Lead Stories

An appellate court in Georgia has held that a quorum is not required for election of the directors of a homeowners’ association when the election is conducted by written ballot as permitted by the association’s bylaws and not at a meeting of the members.  It has also held, pursuant to a quirk in homeowners’ association law, that a non-member of the association may not serve as a director, even though the articles of incorporation of the association provide that directors need not be members of the association.

A federal District Court in Brooklyn has dismissed a putative class action claiming “fraud” in a CVS drug store fundraising campaign in which patrons were offered the opportunity to contribute to the American Diabetes Association at the checkout register.  It rejected the plaintiff’s claim that the failure of CVS to tell customers that it would make up the difference if the campaign fell short of its $10 million goal constituted a fraud on the public.

In an unusual case involving the donation of charitable contributions to a church, a divided 9th Circuit Court of Appeals has permitted a member of the Mormon Church to sue for allegedly false and misleading statements by the Church about its use of tithing money. 

The California Supreme Court has overruled an appellate court decision that said that a director of a charitable corporation suing other directors for breach of fiduciary duty lost her standing to sue when she was not re-elected to the board during the litigation.  (See Nonprofit Issues® Vol. XXXI, No. 3.). The Supreme Court has unanimously held that “continuous relationship” is not required to continue the litigation under the state’s Nonprofit Corporation Law.

The Supreme Court of New Hampshire has held that the traditional rules for “special interest” standing to intervene in a proceeding to change the purpose of a charitable gift are no longer applicable to a completed charitable gift for which a change in purpose is being requested under the Uniform Prudent Management of Institutional Funds Act.  It has denied the executor of an estate the right to intervene in a contest seeking to modify the use of a charitable bequest.

When Howard University amended its corporate bylaws during the Covid-19 pandemic, various alumni of the University filed suit to stop the changes.  After 18 months of litigation, the U.S. District Court for the District of Columbia has dismissed the complaint without leave to amend.