A scholarship foundation caught in the middle of a multi-year squabble between its trustees seeking to oust each other from their positions must pay nearly $1.7 million in legal fees and costs incurred by the trustees during their battle, a federal District Court in Maryland has ruled.  It has held that Maryland state law provides that legal costs are “a necessary part of the cost of administering a trust,” including a successful defense against an effort to remove a trustee from office.

An outpatient surgical center owed and operated by a charitable hospital has been denied real estate tax exemption on the ground that it is not a “hospital” within the definition of the statute.  The Pennsylvania Commonwealth Court has reversed a trial court granting exemption to the facility.

The Faculty, Alumni and Students Opposed to Racial Preferences and the Coalition for Meritocracy at Universities, two unincorporated nonprofit associations organized in Texas with no direct connection with Harvard University, have no standing to sue Harvard and the Harvard Law Review for allegedly discriminatory practices in selecting students to run the prestigious publication.  A federal District Court in Massachusetts has dismissed the claims both for lack of standing and for failure to state a claim.

When the corporation is the nominal plaintiff in a derivative action and the counsel has a sense of loyalty to the officers and directors who are charged with wrongdoing.

A federal District Court in Minnesota has rejected the IRS definition of an “educational institution” and allowed the Mayo Clinic to recover more than $11.5 million in unrelated business income tax.  It has held that the IRS definition is too narrow and is not authorized by the Tax Code.

The IRS assessed taxes in 2009 for unrelated business income received by Mayo from certain activities conducted through partnerships. Mayo paid the taxes and sued for a refund.