Justia Non-Profit Corporations Opinion Summaries

Plaintiffs Zhi An Wang, Yu Liu, Bo Xu, Yanhong Sun, Yong Li, Tao Chen, Lina Tao, Bin Qu, Qingjiang Li, Tao Jing, Xingchuan Wu, Jun Shi, Ke Zhang, Zhuo Xiao, and Yugang Xie appealed a trial court order granting defendants Shimin Fang and his spouse, Juhua Liu's motion to dismiss plaintiffs’ complaint on the grounds of forum non conveniens (motion). Fang and Juhua Liu resided in San Diego County. Plaintiffs all resided in the People’s Republic of China. Fang created a website in China that published articles and other content regarding purported examples of fraud, corruption, and bureaucratic inefficiency affecting the scientific and academic communities in China. In about 2005, Fang publicly criticized a urologist who claimed to have a developed a treatment for a rare disease. A year later, the urologist sued Fang, and a Chinese court ruled in the urologist's favor. In 2010, Fang was attacked by individuals purportedly hired by the urologist as revenge for his public criticism of the doctor. As a result of the attack, Fang established a business in China called “Personal Safety Foundation for Scientific Anti-Fraud Individuals” (Foundation). Fang used the Foundation’s website among other methods to obtain donations. Fang represented that donated funds “would be used solely for the protection of the personal safety of individuals engaged in anti-fraud activities,” and that any such awards could be used by recipients for the “purpose of protecting their personal safety.” As an inducement to obtain donations, Fang publicly represented that no monies collected to fund the Foundation would be used to pay for his personal living expenses. For approximately eight years, the Foundation collected donations from “several thousand donors” including plaintiffs. The complaint alleged defendants misused Foundation funds “for personal transactions” in contravention of the stated mission and purpose of the Foundation. Defendants in their motion argued the complaint should have been dismissed on the ground of inconvenient forum because the matter should be litigated in China, where all plaintiffs resided and where the Foundation was located. The Court of Appeal concluded substantial evidence supported the trial court’s finding that China was a suitable forum. However, the California Court agreed with plaintiffs that in the interest of justice, the case should have been stayed and not dismissed, with the U.S. court to retain jurisdiction over the matter pending the outcome of the case in China. View "Wang v. Fang" on Justia Law

At issue in this case was the tax status of a 9.9-acre parcel of land containing an 11,500-square-foot garage that was owned and used by Zlotoff Foundation, Inc., a nonprofit charitable organization, for the purpose of storing and maintaining a collection of classic automobiles that it displayed at its nearby museum. The trial court ruled that the garage and the land were tax-exempt because they were used for a public purpose. However, it denied the Foundation’s request for a refund of property taxes paid to the Town of South Hero from 2016 to 2018 because the Foundation did not obtain a certificate of authority allowing it to transact business in Vermont until 2019. The Foundation and the Town both appealed. Finding no reversible error, the Vermont Supreme Court affirmed judgment. View "Zlotoff Foundation, Inc. v. Town of South Hero" on Justia Law

Defendants Evelyn Quimby, Susan Quimby, and Christopher Quimby, appealed superior court orders denying their motion to dismiss the Weare Bible Baptist Church’s motion for contempt, finding the defendants in contempt, and imposing additional obligations upon the defendants. In 1985, Leland Quimby, the patriarch of the defendants’ family, became the pastor of the Church. In 2014, after Leland suffered a stroke, defendants decided to find an interim pastor. Calvin Fuller was voted in by the entire Church membership to become pastor. Thereafter, Fuller invited new members to join the Church, took several actions relating to the administration of the Church and its finances, amended the Church’s corporate charter, and replaced the members of the corporate board. Subsequently, defendants filed an action on behalf of the Church seeking to void the memberships of Fuller, his wife, and the new members he invited to join the Church, and the official acts Fuller took as pastor, due to an alleged failure to comply with the corporate charter. Following a bench trial, the trial court issued a final order in February 2016 (2016 order) in which it concluded that: (1) Fuller was duly elected as pastor with full authority; (2) Fuller, his wife, and the other new members of the Church were properly admitted; and (3) certain “official acts” taken by Fuller and the defendants following Fuller’s appointment were invalid for failure to follow the procedures set forth in the Church’s corporate charter. On appeal, defendants argued the trial court: (1) erred in denying their motion to dismiss because the Church’s contempt motion failed to identify a clear directive of the court that defendants violated; (2) committed an unsustainable exercise of discretion in finding defendants in contempt in the absence of a clear directive in the underlying order; and (3) lacked subject matter jurisdiction to render its findings and rulings because doing so required the court to consider ecclesiastical matters of the Church. Because the Church’s contempt motion asks the court to rule on ecclesiastical matters, the New Hampshire Supreme Court reversed the trial court’s denial of defendants’ motion to dismiss, and vacated and remanded the trial court’s additional rulings. View "Weare Bible Baptist Church, Inc. v. Fuller" on Justia Law

The Atlanta Botanical Garden, Inc. (the “Garden”) leased land from the City of Atlanta. The Garden wished to enforce a policy precluding the possession of firearms by visitors to, and guests of, the Garden, like Phillip Evans. Evans held a valid weapons carry license under Georgia law and asserted that he was authorized to carry a firearm at the garden under the authority of OCGA 16-11-127 (c). The Garden contended it could enforce its policy based on an exception to the general rule found in the same statutory paragraph. The Georgia Supreme Court granted certiorari to consider whether OCGA 16-11-127 (c) permitted a private organization that leased property owned by a municipality to prohibit the carrying of firearms on the leased premises. The Court of Appeals determined that it did and affirmed the trial court’s grant of summary judgment in favor of the Garden on the petition for declaratory and injunctive relief filed by GeorgiaCarry.Org, Inc. The Georgia Supreme Court determined this case turned on whether the Garden was indeed private property. Because no lease was entered into the trial court record, judgment was reversed for further proceedings at the trial court. View "GeorgiaCarry.org, Inc. et al. v. Atlanta Botanical Gardens, Inc." on Justia Law

The Board of Directors of the Girl Scouts of the United States of America increased the amount of annual membership dues. Farthest North Girl Scout Council, its executive director, and the chair of its board of directors challenged this increase, claiming that the corporation’s governing documents did not give the Board authority to increase membership dues. The superior court denied Farthest North’s motion for summary judgment, ruling in favor of the Girl Scouts of the United States of America that the Board had such authority. The Alaska Supreme Court disagreed, finding the corporate governing documents vested authority to establish membership dues solely in the National Council of the Girl Scouts of the United States of America. View "Farthest North Girl Scout Council v. Girl Scouts of the United States of America" on Justia Law

The Second Church of Christ, Scientist, Melbourne (Australia) appealed a circuit court order denying it standing to request affirmative relief and enforce certain charitable trusts created by the will of Mary Baker Eddy. Mary Baker Eddy founded the Church of Christian Science and, upon her death in 1910, her will established two testamentary trusts, known as the Clause VI Trust and Clause VIII Trust. In previous litigation concerning these trusts, we upheld the validity of the trusts and established that the bequest in Clause VIII was to be held in trust for two purposes, church building repair and “promoting and extending the religion of Christian Science as taught by [Mrs. Eddy].” The underlying litigation commenced in 2015, when Second Church, an alleged qualified beneficiary of the Clause VIII Trust, sought to review, and potentially object to, the annual accounting filed by the trustees. In March 2018, the trial court issued an order finding that Second Church failed to satisfy its burden to demonstrate that it had standing. The trial court acknowledged the general rule that when a trust is determined to be charitable, it becomes the duty of the attorney general to ensure that the rights of the public in the trust are protected and that the trust is properly executed. The court further noted that New Hampshire law was unclear as to whether a possible beneficiary of a charitable trust, like Second Church here, had standing. Looking to other jurisdictions for guidance, the trial court determined that most jurisdictions have ruled that a possible beneficiary is generally not entitled to sue for enforcement of the trust. After considering how other courts have applied the doctrine of special interest standing, the trial court applied a five-factor test, often referred to as the Blasko test. The trial court found that none of the factors weighed in favor of granting Second Church standing. The New Hampshire Supreme Court found no reversible error in the trial court's judgment and affirmed Second Church lacked standing. View "In re Trust of Mary Baker Eddy" on Justia Law

Pacifica, a California non-profit corporation, owns and operates public radio stations, including KPFK in Los Angeles. Brown was elected to be a “Delegate” of KPFK and subsequently to a position on Pacifica’s National Board of Directors. Pacifica notified Brown she was ineligible for those positions because she was a Los Angeles Small Business Commissioner. Pacifica bylaws bar individuals from serving in board positions while they hold any public office. Claiming her removal was instigated by a rival faction of Pacifica’s National Board, Brown and others with similar complaints sought declaratory and injunctive relief. The trial court granted the plaintiffs a preliminary injunction, finding that Brown’s position on the Commission is not a public office. The court of appeal reversed. The term “public office” has more than one legal definition. The common law definition has two elements: a fixed and permanent tenure of office in which incumbents succeed one another and delegation to the officer of some portion of the sovereign functions of government, either legislative, executive, or judicial. The Los Angeles Board of Supervisors has delegated tasks to the Commission that it would otherwise perform itself; the Commission clearly serves a function that aids the Board. The fact that a body serves an advisory function does not preclude it from being a public office. View "Brown v. Pacifica Foundation, Inc." on Justia Law

In 2010, the Internal Revenue Service issued a refund to the Wichita Center of Graduate Medical Education (a federally qualified charitable organization) on overpaid taxes along with incorrectly calculated interest on the refund. The IRS then sought repayment of part of the interest. Under the Internal Revenue Code, corporate taxpayers received a lower refund interest rate than other taxpayers such as individuals or partnerships. The Center claimed it was not a corporation for purposes of this section and was be entitled to the higher interest rate applicable to non-corporations. The Tenth Circuit affirmed the district court’s finding that the Center was a corporation and subject to the lower interest rate: the statutory text compelled the conclusion that the Center, even though it did not issue stock or generate profit, had to be treated as an ordinary corporation for purposes of the refund statute. View "Wichita Ctr for Grad Med. Ed. v. United States" on Justia Law

This case involved questions of how the attorney-client privilege should apply in the context of derivative litigation. The nonprofit corporations involved in this matter were the Pittsburgh History and Landmarks Foundation (“the Foundation”) and its subsidiary, the Landmarks Financial Corporation (“the Corporation”), which managed the Foundation’s endowment. Plaintiffs were five former members of the Boards of Trustees of the Foundation and the Corporation who alleged they were improperly and ineffectively removed from the Boards in an attempt to thwart their oversight of the Foundation’s president, whom they believed was engaging in actions that were improper and not in accord with the Foundation’s mission. The Foundation’s Board created a Governance Task Force to review various practices of the Foundation; the Task Force recommended that both Boards be reduced substantially in number. The Foundation Board approved this recommendation and removed all trustees then serving from both Boards; significantly smaller boards were elected and as a result of these consolidations, and Derivative Plaintiffs lost their seats on the Boards. In accord with standard procedures for bringing a derivative action adopted by the Pennsylvania Supreme Court in Cuker v. Mikalauskas, 692 A.2d 1042 (Pa. 1997). The Supreme Court rejected the Commonwealth Court’s adoption of a qualified attorney-client privilege as set forth in Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970), which the Supreme Court viewed as inconsistent with prior Pennsylvania caselaw emphasizing predictability in the application of the attorney-client privilege. However, the Commonwealth Court’s decision not to apply the fiduciary or co-client exceptions to the attorney-client privilege under the facts of this case was affirmed. The matter was remanded for further al court and the Commonwealth Court and remanded the matter to the trial court for further proceedings. View "Pgh History v. Ziegler" on Justia Law

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