Justia Non-Profit Corporations Opinion Summaries

Utah officials had interpreted its old law to require Plaintiff Rainbow Direct Marketing to register and obtain a permit in the State of Utah to be a professional fundraising consultant. Rainbow viewed these requirements as unconstitutional and unsuccessfully sued in district court. But during the appeal, Utah substantially revised its law, prompting officials to concede that the new restrictions did not apply to Rainbow. The Tenth Circuit concluded this change in the law rendered the appeal moot. View "American Charities v. O'Bannon" on Justia Law

Plaintiff The Marist Brothers of New Hampshire (MBNH) appealed several superior court orders: (1) a decision upholding the denial by defendant Town of Effingham (Town), of MBNH’s request for a charitable tax exemption, for tax year 2015, for real property; and (2) an order granting the Town’s motion in limine to exclude evidence of the tax treatment of New Hampshire youth camps other than the camp run by MBNH. When Camp Marist was not in session, MBNH rented the Property subject to this appeal: no restrictions were placed on who is eligible to rent, or how renters use, the Property. Rental proceeds were allocated to either the “regular Camp fund, the running of the Camp, or . . . to some of [MBNH’s] scholarships.” MBNH argues that the trial court erred in determining that it met none of the "ElderTrust" factors. After careful consideration, the New Hampshire Supreme Court concluded MBNH did satisfy all ElderTrust factors, reversing the trial court. View "The Marist Brothers of New Hampshire v. Town of Effingham" on Justia Law

In this declaratory relief action, the trial court granted summary judgment to the plaintiff, The National Grange of the Order of Patrons of Husbandry (the National Grange), declaring that property at issue in the underlying dispute belonged to the California State Grange when the National Grange revoked the California State Grange’s charter in 2013 belonged to a newly chartered California State Grange. At the annual convention of the National Grange in November 2010, an amendment to the National Grange’s by-laws was proposed to expand the National Master’s power to suspend or revoke the charter of a State Grange, allowing the National Master to take that action in various situations, including when “the State Grange is working in violation of the law and usages of the Order.” The Master of the National Grange, Edward Luttrell, ordered an investigation of Robert McFarland, then Master/President of the California State Grange, based on allegations that McFarland had engaged in various instances of misconduct. McFarland ordered the consolidation of two subordinate granges. At some point, McFarland was suspended and an Overseer was supposed to act in his place. McFarland refused to acknowledge the Overseer’s authority to act in his stead. Put to a vote of the State Grange, the Executive Committee refused to honor Luttrell’s suspension of McFarland, arguing the State Grange was a California corporation governed by California state law, Luttrell did not have the power to suspend either McFarland or the State Grange. The California State Grange did not appeal the suspension of its charter within the organization as allowed by the by-laws of the National Grange. This declaratory relief action followed. The Court of Appeal was persuaded that the trial court did not err in granting summary judgment in favor of the National Grange in this declaratory relief case. View "Nat. Grange of the Order etc. v. California Guild" on Justia Law

Baruch SLS, Inc., a Michigan nonprofit corporation, sought exemptions from real and personal property taxes as a charitable institution under MCL 211.7o and MCL 211.9 for tax years 2010–2012. Petitioner based its request on the fact that it offered an income-based subsidy to qualifying residents of Stone Crest Assisted Living, one of its adult foster care facilities, provided those residents had made at least 24 monthly payments to petitioner. The Tax Tribunal ruled that Stone Crest was not eligible for the exemptions because petitioner did not qualify as a charitable institution under three of the six factors set forth in Wexford Med Group v City of Cadillac, 474 Mich 192 (2006). The Court of Appeals reversed with respect to two of the Wexford factors, but affirmed the denial of the exemptions on the ground that petitioner had failed to satisfy the third Wexford factor because, by limiting the availability of its income-based subsidy, petitioner offered its services on a discriminatory basis. The Michigan Supreme Court found the third factor in the Wexford test excluded only restrictions or conditions on charity that bore no reasonable relationship to a permissible charitable goal. Because the lower courts did not consider Baruch’s policies under the proper understanding of this factor, the Court vacated the Court of Appeals’ and Tax Tribunal’s opinions in part and remanded this case to the Tax Tribunal for further proceedings. View "Baruch SLS, Inc. v. Twp of Tittabawassee" on Justia Law

Consolidated appeals arose out of a complaint filed by four Georgia taxpayers in which they challenged the constitutionality of Georgia’s Qualified Education Tax Credit, Ga. L. 2008, p. 1108, as amended (“HB 1133” or the “Bill”). HB 1133 set up a tax credit program that allows individuals and businesses to receive a Georgia income tax credit for donations made to approved not-for-profit student scholarship organizations (“SSOs”). The Bill created a new tax credit statute for that purpose. Generally speaking, the SSO is required to distribute the donated funds as scholarships or tuition grants for the benefit of students who meet certain eligibility requirements, and the parent or guardian of each recipient must endorse the award to the accredited private school of the parents’ choice for deposit into the school’s account. Plaintiffs alleged: (1) the Program was educational assistance program, and the scheme of the Program violated the Constitution; (2) the Program provided unconstitutional gratuities to students who receive scholarship funds under the Program by allowing tax revenue to be directed to private school students without recompense, and also that the tax credits authorized by HB 1133 resulted in unauthorized state expenditures for gratuities; (3) the Program took money from the state treasury in the form of dollar-for-dollar tax credits that would otherwise be paid to the State in taxes, and since a significant portion of the scholarships awarded by the SSOs goes to religious-based schools, the Program takes funds from the State treasury to aid religious schools in violation of the Establishment Clause; and (4) the Department of Revenue violated the statute that authorized tax credits for contributions to SSOs by granting tax credits to taxpayers who have designated that their contribution is to be awarded to the benefit of a particular individual, and by failing to revoke the status of SSOs that have represented to taxpayers that their contribution will fund a scholarship that may be directed to a particular individual. Plaintiffs sought mandamus relief to compel the Commissioner of Revenue to revoke the status of SSOs, and injunctive relief against the defendants to require them to comply with the constitutional provisions and statutory laws set forth in the complaint. In addition to mandamus relief and injunctive relief, plaintiffs sought a declaratory judgment that the Program was unconstitutional. The Georgia Supreme Court found no error in the trial court’s finding plaintiffs lacked standing to pursue their constitutional claims, or their prayer for declaratory relief with respect to those claims, either by virtue of their status as taxpayers or by operation of OCGA 9-6-24. Consequently plaintiffs failed to allege any clear legal right to mandamus relief. View "Gaddy v. Georgia Dept. of Revenue" on Justia Law

The Stuttering Foundation, Inc. (“Foundation”) leased office space in a commercial development in Glynn County owned by Lucas Properties Holdings III, LLC (“Lucas”). In 2015, Lucas filed an application for rezoning of the property to construct an addition to the rear of one of the existing buildings in the development, the building in which the Foundation leased its office. It also sought approval of a site plan for the proposed construction. Both were approved in March 2016. For various reasons, the Foundation opposed the new development and filed a petition for judicial review of the rezoning application and Site Plan, or in the alternative, for mandamus reversing the County’s approval. Both the County and Lucas filed a motion to dismiss the complaint on its merits. The trial court entered an order granting the County’s motion to dismiss, concluding that the Foundation lacked standing to raise its objections to the rezoning. The Georgia Supreme Court agreed with the trial court that the Foundation demonstrated no right to contest the rezoning decision. Lucas’s motion to dismiss was a nullity and therefore vacated. View "The Stuttering Foundation of America, Inc. v. Glynn County" on Justia Law

The Idaho Supreme Court determined the district court did not err when it found that the Church did not have a special relationship with Henrie such that it had an affirmative duty to control or protect him, nor was there any issue of fact as to whether the Church had a general duty to prevent Henrie's injury. This case arose out of injuries suffered by Bryan Henrie while he was participating in a community service event organized by the Mormon Helping Hands (“Helping Hands”), a priesthood-directed program run by the Church of Jesus Christ of Latter-day Saints (the “Church”). Henrie argued on appeal that the district court erred when it dismissed his tort claim on summary judgment. Henrie was assigned to work with a crew felling burned trees and rolling or throwing the wood down an embankment on the property to be hauled away later. Later that day, Henrie was attempting to throw a tree stump down the embankment when it caught on his smock. He was pulled down the embankment by the stump, severely injuring his right knee in the process. Henrie asserted that “[a]t the very least, Defendant had a duty not to supply Plaintiff with gear or clothing that would put him or his bodily safety in danger or ultimately harm him . . . Defendant breached this duty of care.” He further asserted that “Defendant owed a duty to Plaintiff to use reasonable care in nominating, training, and supervising any and all of the clean-up organizers and volunteers, including those who spoke with and directed Plaintiff.” The Supreme Court affirmed the district court's grant of summary judgment in favor of the Church. View "Henrie v. Church of Latter-Day Saints" on Justia Law

At issue in this case was whether Gateway Community Charters (Gateway), a nonprofit public benefit corporation that operated charter schools, was an “other municipal corporation” for purposes of Labor Code section 220, subdivision (b), thereby exempting it from assessment of waiting time penalties described in section 203. After review, the Court of Appeal concluded it was not; therefore, it affirmed the trial court’s judgment. View "Gateway Community Charters v. Spiess" on Justia Law

An employee of a nonprofit serving disabled adult clients used her position to embezzle more than half a million dollars held by the nonprofit for its clients. After the embezzlement was discovered, Travelers Casualty & Surety Company, the nonprofit's insurance company, made the nonprofit whole. Travelers then sought contribution from the bank in federal court. By submitting certified questions of Washington law, that court has asked the Washington Supreme Court to decide, among other things, whether a nonpayee's signature on the back of a check was an indorsement. Furthermore, the Court was also asked whether claims based on unauthorized indorsements that are not discovered and reported to a bank within one year of being made available to the customer are time barred. The Supreme Court answered yes to both questions. View "Travelers Cas. & Sur. Co. v. Wash. Trust Bank" on Justia Law

The Institute, a Section 501(c)(3) nonprofit organization, filed suit against the FEC, challenging the constitutionality of the disclosure requirements of the Bipartisan Campaign Reform Act of 2002, 52 U.S.C. 20104(f). The district court denied the Institute's request to convene a three-judge district court pursuant to the statutory provision that requires three-judge district courts for constitutional challenges to the BCRA. On the merits, the district court held that the Institute's claim was unavailing under McConnell v. FEC, and Citizens United V. FEC. The Institute appealed. The court concluded that, because the Institute’s complaint raises a First Amendment challenge to a provision of BCRA, 28 U.S.C. 2284(a) entitles it to a three-judge district court. In this case, the Institute’s attempt to advance its as-applied First Amendment challenge is not “essentially fictitious, wholly insubstantial, obviously frivolous, and obviously without merit.” Therefore, section 2284 “entitles” the Institute to make its case “before a three-judge district court.” Accordingly, the court reversed and vacated the district court's judgment, remanding for further proceedings. View "Independence Institute v. FEC" on Justia Law