Lead Stories

PSU Trustees May Recover Costs Of Suit for Right to Review Records

Recovery permitted by expense reimbursement policy and indemnification clause in bylaws

Alumni trustees of Penn State University may recover the litigation costs of their successful suit to gain access to “source materials” of the Freeh Report on the Jerry Sandusky situation, the Pennsylvania Commonwealth Court has held. 

“Concerned” Individuals Lack Standing To Force Treasury Department Investigation

Plaintiffs seek revocation of tax-exempt status of organizations allegedly assisting settlements in West Bank

The federal District Court in the District of Columbia has ruled that a group of “individuals sharing mutual concerns” about Israeli settlements in the West Bank and East Jerusalem have no standing to sue the Treasury Department to force it to investigate about 200 501(c)(3) organizations and revoke their exemptions where appropriate.  The District Court followed a long line of cases denying standing where the activity complained of has only a tenuous relationship to the injury complained about and where the remedy requested would not redress the injury.

Church Can’t Complain About Loss of Control of “Subsidiaries”

Governing documents of two housing groups do not give governing powers to church

A church in San Francisco has lost a court battle to reclaim control over two housing subsidiaries, one of which is more than a half century old, that it thought it controlled but didn’t.  An appellate court in California has affirmed a trial court decision holding that the church’s claim is barred by the statute of limitations but even if it weren’t, the governing documents of the “subsidiaries” don’t give the church any role in governance.

Receiver May Claim Under D & O Policy For Alleged Breach of Duty by Directors

Court says claim is not excluded under insured-versus-insured exclusion

A court appointed receiver for a nonprofit community action program may claim breach of duty by two former officers and demand that the organization’s D & O insurance carrier make payment.  A federal District Court in Rhode Island, reviewing conflicting cases in other jurisdictions, has held that the claim is not excluded by the “insured-versus-insured” exception contained in the policy.

Foundation Director May Approve Grant To Organization of Which She Is Also a Director

Other director stays in office after expiration of her term until a successor is selected and qualified

Two children of the founders of a family private foundation don’t seem to see eye-to-eye on the operation of the foundation they now lead following the death of their parents.  The Seventh Circuit Court of Appeals has recently affirmed a District Court decision denying relief to the son who sought to overturn actions taken by his sister.  (See Nonprofit Issues, 1/16.) 

Catholic Hospital Not Covered by ADA, But May Be Sued Under Rehab Act

Patient claims retaliation after objecting to failure to provide adequate communication aid

A federal District Court in Missouri, agreeing with several District Courts in other states, but acting without any Court of Appeals authority, had held that the requirements of the Americans with Disabilities Act do not apply to a Catholic hospital, but that the hospital can be sued for retaliation under the Rehabilitation Act of 1973.