Lead Stories

An appellate court in New York has affirmed the dismissal of counterclaims by the National Rifle Association seeking to throw out a suit by the state Attorney General for widespread and longstanding executive malfeasance.  It has affirmed the traditional standard of needing only to show “probable cause” to overcome a defendant’s claim of retaliatory litigation.

A nonprofit corporation that manages historical property for the National Trust for Historic Preservation in the United States cannot force the National Trust to increase the distribution from its endowment to cover costs of the work, a federal District Court in Virginia has held.  The Court has said that the relationship is governed by the management contract and is not covered by the state’s Uniform Trust Code.

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.