Lead Stories

The Pennsylvania Supreme Court has refused to join several other jurisdictions in accepting a “good cause” inquiry to provide exceptions to the basic rule of attorney-client privilege in derivative action cases.  It has held that providing such a “conditional privilege” would reduce the certainty of the attorney-client privilege.

A federal District Court in Virginia has refused to remove the bank trustee of a scholarship fund as sought by two individual trustees and has refused to remove the individual trustees as sought by the bank, saying that neither side had shown that the other breached their fiduciary duty or otherwise failed to function properly.  But it has sided with the bank on some substantive issues, including telling the trustees that they could not add conditions to the scholarship grants that are inconsistent with the provisions of the will establishing the fund.

A federal District Court in California has allowed donors of $100 million to a donor advised fund at Fidelity Investments Charitable Gift Fund to proceed with a suit for damages they claimed resulted when, contrary to its representations, Fidelity dumped the gift stock immediately upon receipt and depressed the value of the gift for charitable donation deduction purposes.  The Court has rejected a motion to dismiss the case, holding that the plaintiffs have standing to sue and have adequately alleged causes of action.

An appellate court in Louisiana has affirmed dismissal of a suit by parishioners of a merged church seeking to enjoin the sale of a church building.  It held that the parishioners failed to state a cause of action upon which relief could be granted.

A 501(c)(3) nonprofit running long-distance bicycle rides to raise money for affordable housing has found itself uninsured when sued for negligence by one of its participants who was seriously injured while on a cross-country ride.  A federal District Court in Philadelphia has granted summary judgment to the organization’s commercial liability and excess coverage insurers who sought a declaration that they had no obligation to protect the charity from the rider’s claims.

Dues-paying “members” of the Berkshire Museum in Massachusetts, who have no voting rights in the nonprofit museum corporation, lack standing to seek an injunction to stop the sale of valuable artwork, the state Appeals Court has affirmed.

A group of plaintiffs sued the museum and its trustees individually claiming standing to sue to enforce the museum’s governing documents, to protect their rights as members, and derivatively as corporate members.  A trial judge dismissed their claims and the Appeals Court has affirmed.