Could Better Bylaws For Nonprofit Have Avoided 6 Years of Litigation?
Courts decide to impute meaning to bylaw requiring removal of any director who misses three consecutive meetings
A former director’s derivative suit for breach of fiduciary duty against the CEO of a nonprofit corporation has been dismissed by a trial court and appellate court in California on the ground that the plaintiff was not actually a director at the time he filed the suit. The former director claimed that he was still on the board because the deciding vote to oust him was cast by a director who had been automatically dropped from the board by a bylaw terminating anyone who had missed three consecutive meetings.
Emeritus Trustee has no right to board information
An “Emeritus Trustee” of the University of Pittsburgh, who can be invited to be a non-voting observer at the University board meetings, does not have a director’s rights to information as spelled out in the Pennsylvania Nonprofit Corporation Law, a trial court in Pittsburgh has held. The Court has said that the Emeritus Trustee has no managerial oversight over the activities of the University and is therefore not entitled to the information.
AG’s Request for Charity Donor Lists Likely Violates First Amendment
Federal court enjoins enforcement of investigation demand while constitutional issues are decided in state court
A federal District Court in Virginia has issued a temporary injunction enjoining the enforcement of constitutionally questionable questions asked by the state Attorney General in an investigation for violation of the state’s charitable solicitation registration law. It has found that the charity is likely to prevail on its claim that demanding donor lists in a Civil Investigative Demand (”CID”) likely violates the right of free association guaranteed by the First and Fourteenth Amendments.
RI Court enjoins anti-DEI conditions in domestic violence grants
The federal District Court in Rhode Island (Melissa R. DuBose) has temporarily enjoined the Trump Administration from enforcing new anti-diversity, equity and inclusion provisions in grants to help support survivors of domestic violence and sexual assault and individuals without stable housing.
Donors, beneficiary lack standing to challenge Red Cross
A putative class action of donors to the American Red Cross and a claim by an alleged beneficiary of a contract with USAID have been dismissed by a federal District Court in Florida. The Court has found that neither the donors nor the beneficiary have standing to challenge the actions of the Red Cross in providing relief in Haiti after a devastating earthquake in 2010.
Homeowners Association denied exemption under 501(c)(4)
In a case that started nearly six years ago, the Tax Court has denied 501(c)(4) social welfare exemption to a Texas homeowners’ association on the ground that it provides services primarily to its members and not to the general public.
RI Court orders funding of SNAP benefits
The federal District Court in Rhode Island (Chief Judge John J. McConnell, Jr.) has issued a temporary restraining order to force the Trump Administration to make funds available for the Supplemental Nutrition Assistance Program (”SNAP”) despite the governmental shutdown.