249 F. Supp. 3d 27
D.D.C.2017Background
- Members of the American Studies Association (ASA) challenged the ASA’s 2013 adoption of a resolution endorsing an academic boycott of Israeli institutions, alleging the boycott exceeded ASA’s purposes and violated its bylaws.
- Plaintiffs sued derivatively (on behalf of ASA) and directly, asserting breach of fiduciary duty, ultra vires acts, waste, breach of contract, and violations of the D.C. Nonprofit Corporation Act; they seek injunctive relief and damages.
- Individual defendants were ASA officers or National Council/Executive Committee members who led or organized the boycott programming and vote at the ASA annual meeting in D.C.; the membership vote later occurred during a ten-day online period.
- Plaintiffs alleged voting irregularities and membership losses and delivered a written demand to the ASA two days before filing suit; they did not wait the statutory 90-day demand period.
- The court found it had subject-matter and personal jurisdiction, and that adjudication would not violate the First Amendment, but dismissed derivative claims for failure to satisfy the D.C. demand statute and dismissed the ultra vires claim for lack of an express prohibition in the bylaws.
- Surviving at the pleading stage: direct claims for breach of contract (procedural bylaw violations) and corporate waste, and a claim under the D.C. Nonprofit Corporation Act against the ASA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Subject-matter jurisdiction (amount-in-controversy) | Amount in controversy exceeds $75,000 due to lost dues, reputational harm, PR/legal expenses, and prospective damages | Plaintiffs alleged no specific monetary losses so federal diversity threshold not met | Court: Jurisdiction exists; plaintiffs met the low legal-possibility standard that recovery could exceed $75,000 |
| Personal jurisdiction over individual defendants | D-defs led and organized injurious acts for a D.C. nonprofit and attended the D.C. annual meeting, so they reasonably anticipated being haled into D.C. court | Contacts were fortuitous (attendance at meeting) and insufficient for D.C. jurisdiction | Court: Specific jurisdiction proper—direct leadership roles + injurious conduct tied to D.C. nonprofit suffice |
| First Amendment defense | Plaintiffs' suit would improperly regulate core expressive conduct (boycott) | Enforcement of generally applicable contract/nonprofit law against voluntarily assumed obligations is not state action and only incidentally affects speech | Court: No First Amendment bar; judicial enforcement of bylaws/contracts is passive and permissible |
| Pre-suit demand (derivative claim) | Demand was made (written) and futility/irreparable-harm exceptions excused waiting | Demand was served only two days before filing; D.C. law requires 90-day wait unless demand rejected or irreparable harm shown | Court: Derivative claims dismissed — plaintiffs filed before 90 days and failed to plead particularized facts to show demand would be futile |
| Ultra vires claim | Boycott fell outside ASA’s academic/charitable purposes and violated bylaw barring propaganda/legislative influence or long-standing practice | ASA charter allows activities reasonably in furtherance of educational purposes; bylaw does not expressly prohibit the boycott; long-standing practice is not an express bylaw | Court: Ultra vires claim dismissed — plaintiffs failed to identify an express statutory or bylaw prohibition |
| Breach of contract (bylaws/procedure) | ASA violated Article XI §3 by not obtaining two-thirds vote at the first full day of the meeting and by not following emergency-meeting procedures | Executive Committee had authority to speak for ASA and properly used membership vote as ratification | Court: Breach of contract claim survives — plaintiffs plausibly alleged the procedural bylaw applied and was not followed |
| Waste and claims against individual defendants under D.C. Nonprofit Act | ASA assets were spent imprudently on boycott-related PR and activities; individual defendants should be liable for waste | D.C. Nonprofit Act restricts certain direct suits against individuals (re ultra vires), so individual liability argued to be limited | Court: Waste claim against individual defendants survives; D.C. Nonprofit Act does not bar waste claims here |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (1938) (plaintiff’s good-faith claim controls amount-in-controversy unless legally certain otherwise)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment/minimum contacts for specific jurisdiction)
- New York Times Co. v. Sullivan, 376 U.S. 254 (1964) (limits on civil law enforcement implicating constitutional speech)
- Cohen v. Cowles Media Co., 501 U.S. 663 (1991) (generally applicable laws may be enforced even if they incidentally affect expression)
- Blum v. Yaretsky, 457 U.S. 991 (1982) (state action doctrine; mere judicial enforcement of private obligations not state action)
- Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) (distinction between general and specific jurisdiction)
- Daley v. Alpha Kappa Alpha Sorority, Inc., 26 A.3d 723 (D.C. 2011) (standards for ultra vires and waste claims against nonprofit organizations)
- Family Fed’n for World Peace v. Hyun Jin Moon, 129 A.3d 234 (D.C. 2015) (personal jurisdiction over directors of D.C. nonprofit who controlled and injured the D.C. corporation)