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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Farthest North Girl Scout Council, Russ Sharpton and Suellen Nelles v. Girl Scouts of the United States of America (9/13/2019) sp-7408
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.us.
THE SUPREME COURT OF THE STATE OF ALASKA
FARTHEST NORTH GIRL SCOUT )
COUNCIL, RUSS SHARPTON, and ) Supreme Court No. S-17144
SUELLEN NELLES, )
) Superior Court No. 4FA-17-01413 CI
Appellants, )
) O P I N I O N
v. )
) No. 7408 - September 13, 2019
GIRL SCOUTS OF THE UNITED )
STATES OF AMERICA, )
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska,
Fourth Judicial District, Fairbanks, Bethany Harbison, Judge.
Appearances: Susan Orlansky, Reeves Amodio LLC,
Anchorage, and Gary W. Leydig, The Law Firm of Gary W.
Leydig LLC, Chicago, Illinois, for Appellants. James E.
Torgerson, Stoel Rives, LLP, Anchorage, and Karin D. Jones,
Stoel Rives LLP, Seattle, Washington, for Appellee.
Before: Bolger, Chief Justice, Winfree, Stowers, Maassen,
and Carney, Justices.
CARNEY, Justice.
I. INTRODUCTION
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,
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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. Because the corporate governing documents vest
authority to establish membership dues solely in the National Council of the Girl Scouts
of the United States of America, we reverse and remand for further proceedings.
II. FACTS AND PROCEEDINGS
A. Facts
Girl Scouts of the United States of America (GSUSA) is a congressionally
1 Appellants (collectively Farthest North) are leaders of
chartered nonprofit corporation.
the Farthest North Girl Scout Council, a chartered Girl Scout Council responsible for
promoting and organizing Girl Scouts programs in Fairbanks and northern Alaska.
The governing body of GSUSA is the National Council, comprised of
approximately 1,500 individuals, including some elected by local Girl Scout Councils
2 3
such as Farthest North. The National Council meets triennially and elects the members
1 36 U.S.C. § 80301(a) (2018); see GIRL SCOUTS OF THE USA, Disclosure
Statement,https://www.girlscouts.org/en/help/help/disclosure-statement.html(lastvisited
Jun. 19, 2019).
2 GSUSA Const. art. IV, §§ 2, 4. Membership in the National Council
consists of delegates from individual Girl Scout councils, delegates from overseas
chapters, members of the National Board of Directors, members of the National Board
Development Committee, past GSUSA presidents, and any other elected individuals. Id.
at § 4. We note, however, that the members of the National Council should not be
confused with the dues-paying Girl Scouts members.
3 GSUSA Const. art. V, § 1. During the time relevant to this appeal, the
National Council has met at least twice, once in 2014 and once in 2017.
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4
of the National Board of Directors (Board). The Board is comprised of the Chair of the
National Board Development Committee, the Chief Executive Officer, 25 members-at-
large, and officials elected by the Board members, including the President, Vice
5 GSUSA's governing documents are the codified
Presidents, Secretary, and Treasurer.
Congressional Charter and the GSUSA Constitution and Bylaws.6
A person wishing to become a Girl Scouts member must pay membership
dues to GSUSA.7 As a Girl Scouts Council, Farthest North is responsible for collecting
dues from members in its jurisdiction; it then forwards those dues to GSUSA. The
National Council voted to increase membership dues nine times between 1941 and 2009.
In 2009 it established a requirement that every Girl Scouts member pay annual
membership dues of $12. But in 2012 the Board increased the membership dues by $3,
to $15 per member. And in 2016 the Board again increased the membership dues by
$10, making the annual dues $25. In neither 2012 nor in 2016 did the Board present its
dues increase to the National Council for approval.
Farthest Northobjected totheBoard's dues increases. Farthest North wrote
to GSUSA that it would not participate in the collection of what it considered to be
"unauthorized dues." Though Farthest North did collect $15 from each member, it only
4 GSUSA Const. art. X, §§ 2-3; GSUSA Const. art. XI, § 2.
5 GSUSA Const. art. X, § 2; GSUSA Const. art. XI, § 2.
6 In addition, GSUSA has a pamphlet titled "Blue Book of Basic
Documents," which contains all GSUSA documents, including those titled "Policies" and
"Credentials." Though the parties refer to this document in their briefs, we do not
consider it on appeal and therefore do not need to determine whether it is a corporate
governing document.
7 GSUSA Const. art. IX.
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8
forwarded $12 from each to GSUSA. In response GSUSA informed Farthest North in
late 2016 that it was in breach of its Charter Agreement and refused to enroll any
Farthest North members, refused to allow any Farthest North members to participate in
Girl Scouts activities, and refused to insure any Farthest North member who participated
in any Girl Scouts activities.
B. Proceedings
In February 2017 Farthest North filed suit against GSUSA. Its complaint
sought declaratory judgment that only the National Council had authority to increase
membership dues and that the Board's increase was thereforewithout authority. Farthest
North also moved for an injunction barring any future enforcement of the Board's
increased membership dues. In addition Farthest North alleged wrongful charitable
solicitation, unfair trade practices, tortious interference with fiduciary duty, and breach
of contract by GSUSA.
GSUSA moved to dismiss Farthest North's complaint pursuant to Alaska
Civil Rule 12(b)(6).9 Farthest North moved for partial summary judgment on its request
for declaratory judgment. GSUSA opposed Farthest North's motion for summary
judgment and cross-moved for summary judgment, arguing that "[a]s a matter of law, the
authority to set membership dues is shared." The superior court ruled in favor of
GSUSA and concluded that the Board had authority to increase membership dues,
thereby denying Farthest North's motion, rendering GSUSA's motion to dismiss moot,
and granting GSUSA's motion for summary judgment.
8 Farthest North placed the remaining $3 from each member into a separate
account "to protect the interests of Farthest North's members."
9 Alaska Rule of Civil Procedure 12(b)(6) allows a party opposing a civil
complaint to file a motion to dismiss for "failure to state a claim upon which relief can
be granted."
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Farthest North appeals.
III. STANDARD OF REVIEW
We apply de novo review to a superior court's decisions on motions for
summary judgment, " 'reading the record in the light most favorable to the non-moving
party and making all reasonable inferences in its favor.' A party is entitled to summary
judgment only if there is no genuine issue of material fact and if the party is entitled to
10
judgment as a matter of law."
"When applying the de novo standard of review, we
apply our 'independent judgment to questions of law, adopting the rule of law most
11
persuasive in light of precedent, reason, and policy.' "
IV. DISCUSSION
A. Choice Of Law
The superior court applied Washington, D.C. law to interpret GSUSA's
corporate documents because GSUSA was incorporated there. The court based its
decision on § 302 of the Restatement (Second) of Conflict of Laws, which provides that
"[i]ssues involving the rights and liabilities of a corporation" will be determined by
applying "the local law of the state of incorporation." Neither party disputes this choice
of law on appeal, so we also apply the law of Washington, D.C.
B. Congressional Charter
Congress has constitutional authority to charter a wide range of
10 ConocoPhillips Alaska, Inc. v. Williams Alaska Petroleum, Inc. , 322 P.3d
114, 122 (Alaska 2014) (quoting Witt v. State, Dep't of Corr. , 75 P.3d 1030, 1033
(Alaska 2003)).
11 Id. (quoting Russell ex rel. J.N. v. Virg-In, 258 P.3d 795, 802 (Alaska
2011)).
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12
organizations with patriotic, educational, or charitable purposes; they are generally
13 14
referred to as "Title 36 Corporations."
Title 36 corporations are not federal agencies,
but a special type of corporation that "do[es] not receive direct
appropriations, . . . exercise[s] no federal powers, . . . [is] not covered by the full faith
and credit of the United States, and . . . do[es] not enjoy original jurisdiction in the
federal courts."15 GSUSA is a Title 36 corporation.16
Farthest North argues that the Congressional Charter grants the Board only
those powers specified in the GSUSA Constitution and Bylaws, including the power to
manage the activities of the corporation. GSUSA, on the other hand, argues that "[t]he
Congressional Charter does not restrict [the Board's] authority regarding membership
dues or reserve such power to the National Council" because "[i]t makes no mention
whatsoever of membership dues."
When reviewing "charters granted by special acts of a legislature,"
including Congress, Washington, D.C. courts "use the same rules of construction that
12 Under the Necessary and Proper Clause of Article 1, Section 8, Clause 18
of the United States Constitution, Congress has the power to charter organizations such
as GSUSA. RONALD C. M OE, C ONG. R ESEARCH SERV., RL30340, C ONGRESSIONALLY
CHARTERED NONPROFIT ORGANIZATIONS ("TITLE 36CORPORATIONS"):WHAT THEY ARE
AND HOW CONGRESS TREATS THEM 1-2 (Apr. 8, 2004), available at
https://digital.library.unt.edu/ark:/67531/metacrs7367/m1/1/high_res_d/RL30340_20
04Apr08.pdf; U.S. Const. art. I, § 8, cl. 18.
13 MOE, supra note 20, at 1.
14 See id. at 5.
15 Id.
16 36 U.S.C. § 80301(a) (2018).
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17
[they] use to examine articles of incorporation adopted pursuant to general law." And
because the GSUSA's congressional charter was a special act of the legislature,
"[p]rinciples of statutory construction guide our interpretation" of the Congressional
18
Charter.
Where "the statutory language at issue is 'plain and admits of no more than
one meaning,' " Washington, D.C. courts will "give effect to the plain meaning of a
statute."19 "Common rules of statutory construction require [Washington, D.C. courts]
to avoid conclusions that effectively read language out of a statute whenever areasonable
interpretation is available that can give meaning to each word in the statute."20 Further,
Washington, D.C. courts "may also look to the legislative history to ensure that [the
court's] interpretation is consistent with legislative intent."21 Legislative intent "governs
the interpretation of both a special and a general act of incorporation, as both constitute
17 Bd. of Dirs., Washington City Orphan Asylum v. Bd. of Trs., Washington
City Orphan Asylum , 798 A.2d 1068, 1078 n.11 (D.C. 2002).
18 Id. at 1079 (citing 7A WILLIAM MEADE FLETCHER ET AL., F LETCHER
CYCLOPEDIA OF THE LAW OF PRIVATE CORPORATIONS § 3640, at 226-27 (perm.ed.,
rev.vol., 1997) ("The rules governing the construction of charters of corporations are, for
the most part, the same as those which govern the construction and interpretation of
statutes, contracts and other written instruments.")).
19 Facebook, Inc. v. Wint, 199 A.3d 625, 628 (D.C. 2019) (quoting Peoples
Drug Stores, Inc. v. District of Columbia, 470 A.2d 751, 753 (D.C. 1983) (en banc));
see also Thomas v. Buckley, 176 A.3d 1277, 1281 (D.C. 2017) ("We begin by looking
at the plain language of the statute and, if the plain meaning is clear, we will look no
further.").
20 School St. Assocs. Ltd. P'ship v. District of Columbia, 764 A.2d 798, 807
(D.C. 2001).
21 Facebook, Inc., 199 A.3d at 628 (quoting Buckley, 176 A.3d at 1281).
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legislative acts." 22
The Congressional Charter establishes that the governing bodies of the
23 It grants the National
GSUSA are the National Council and the Board of Directors.
Council authority to "adopt and amend a constitution and bylaws and elect a board of
directors, officers, and agents,"24 and it grants the Board "the powers of the Council" but
only "[t]o the extent provided in the constitution and bylaws."25 The operative language
we must interpret is "[t]o the extent provided." The superior court interpreted this
language to mean that the Board has all the powers of the National Council, unless
provided otherwise in the Constitution and Bylaws. Farthest North argues this language
plainly means that "[i]f the power is not provided to the Board in the [C]onstitution and
[B]ylaws, [then] the Board does not possess it."
We agree with Farthest North. Because a plain reading of the
Congressional Charter supports Farthest North's interpretation, we must look to the
GSUSA Constitution to determine what, if any, power the Board has to increase
membership dues amounts.26
C. GSUSA Constitution
The Washington, D.C. Court of Appeals has held that "the formal
[governing documents] of an organization are to be construed as a contractual agreement
22 Bd. of Dirs., Washington City Orphan Asylum , 798 A.2d at 1078 n.11.
23 36 U.S.C. § 80303 (2018).
24 Id. § 80303(a)(2).
25 Id. § 80303(b)(1).
26 The GSUSA Bylaws do not address membership requirements or
membership dues to any extent. Neither the parties nor the superior court relied on it in
this dispute; we also do not.
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27
between the organization and its members." In interpreting these corporate governing
documents, a court "must adhere to the 'objective law' of contracts, under which the
written language embodying the terms of an agreement governs the rights and liabilities
28 These rules are "closely analogous" to the rules that govern statutory
of the parties."
construction.29 The "objective law" of contracts "means that the written language will
govern the parties' rights, unless it is not susceptible of clear meaning."30 "[W]ords [are]
given their ordinary and usual meaning."31
Farthest North argues that when read together, Articles V and VIII of the
GSUSA Constitution establish the National Council's sole authority to set membership
dues amounts. GSUSA responds that Article V is merely procedural and does not confer
exclusive authority on theNational Council; it also argues that specific membership dues
amountsarenot membership"requirements"and thereforetheNational Council does not
have exclusive authority to establish dues amounts under Article VIII. But because the
meaning of Article V is unambiguous and Article VIII reinforces its plain meaning, we
hold that the GSUSA Constitution vests sole authority to set membership dues amounts
in the National Council.
1. Article V and Article VIII
Article V, § 2 of the GSUSA Constitution provides that "[t]he National
27 Meshel v. Ohev Sholom Talmud Torah, 869 A.2d 343, 361 (D.C. 2005).
28 Id.
29 Id. at 355.
30 Sagalyn v. Found. for Pres. of Historic Georgetown, 691 A.2d 107, 111
(D.C. 1997).
31 Id. (alterations in original) (quoting Nat'l Symphony Orchestra Ass'n v.
Konevsky, 44 A.2d 694, 695 (D.C. 1945)).
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Council at its sessions shall establish requirements for credentials." 32 Article VIII, § 1
33
specifies that a certificate of membership is one such credential.
A certificate of
membership is issued to each individual who meets the requirements of membership,
34 Because paying membership dues is a
including paying annual membership dues.
requirement for a credential, the National Council is vested with the power to establish
the amount of annual dues. And, pursuant to the Congressional Charter, because the
Board is not similarly delegated this power elsewhere in the GSUSA Constitution, the
power is exclusively held by the National Council.
Article V, § 5 also supports this conclusion. Article V, § 5 of the GSUSA
Constitution prescribes the voting procedure to be taken by the National Council at its
triennial sessions:
Each member present in person at the National Council shall
be entitled to one (1) vote. Decision on membership dues
shall require a majority of votes cast. All matters shall be
determined by a majority vote of the members present and
voting, unless otherwise provided by this Constitution.[35]
GSUSA argues that the second sentence does not require the National Council to vote
on membership dues, but merely establishes the procedure if the National Council votes
on membership dues. But GSUSA's interpretation fails to distinguish the second and
32 GSUSA Const. art. V, § 2.
33 GSUSA Const. art. VIII, § 1 ("The National Council shall establish
requirements for certificates of membership, local council charters, and all other
credentials.").
34 GSUSA Const. art. IX.
35 GSUSA Const. art. V, § 5 (emphasis added).
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36
third sentences, and renders the second sentence superfluous. If the second sentence
does not serve to designate the National Council as the sole body authorized to increase
membership dues then it would be unnecessary to include it: the third sentence already
requires a majority vote for all matters unless otherwise provided by the Constitution.
The only reason to separate the specific matter of "decision on membership dues" from
"all matters" must be to proclaim that only the National Council has the authority to set
37 and giving meaning to the second
them. We must give meaning to each provision,
sentence of Article V, § 5 makes clear that only the National Council has the authority
to make decisions on membership dues.
GSUSA argues that Article V and Article VIII only give the National
Council the authority to establish the general requirement that members must pay dues
and that the specific amount of those dues is a "standard," which the Board has authority
to establish so long as it is consistent with the requirements established by the National
38 We disagree. First, the GSUSA Constitution makes clear that the National
Council.
36 See Abdelrhman v. Ackerman , 76 A.3d 883, 891 (D.C. 2013) ("When
interpreting a contract, we 'strive to give reasonable effect to all its parts and eschew an
interpretation that would render part of it meaningless or incompatible with the contract
as a whole.' " (quoting District of Columbia v. Young , 39 A.3d 36, 40 (D.C. 2012)));
Anderson v. D.C. Hous. Auth. , 923 A.2d 853, 867 (D.C. 2007) (rejecting contract
interpretation that would render language "useless, inexplicable, inoperative,
meaningless[,] or superfluous" (quoting Intercty. Constr. Corp. v. District of Columbia ,
443A.2d 29, 31-32 (D.C.1982))); Phenix-Georgetown, Inc.v.Charles H. Tompkins Co.,
477 A.2d 215, 225 (D.C. 1984) ("[T]he general rule is that contracts will be read as a
whole, and every part will be interpreted with reference to the whole.").
37 See School St. Assocs. Ltd. P'ship v. District of Columbia, 764 A.2d 798,
807 (D.C. 2001).
38 GSUSA Const. art. VIII, § 2 ("The National Board of Directors shall
administer the requirements for the credentials established by the National Council, and
(continued...)
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Council is entitled to set the amount of membership dues. 39 And second, the National
Council had previously set the amount of membership dues at $12, thereby rendering the
Board's subsequent dues increase inconsistent with the specific requirement established
by the National Council. In 2009 the National Council set a specific requirement that
members must pay annual dues of $12; it has not voted to change the dues amount since
that time. By setting a specific amount for membership dues, the National Council
establisheda specific requirement under Article VIII, whichtheBoardonly hadauthority
to administer. By unilaterally increasing the membership dues under the guise of
"administration of requirements," the Board exceeded its constitutional authority under
Article VIII.
2. Article X
Article X grants the Board the power to manage "[t]he affairs of the
40
corporation between sessions of the National Council."
Similar to its argument that its
administrative authority under Article VIII grants the Board authority to increase annual
memberships dues, GSUSA also argues that the Board's authority to manage the affairs
of the corporation between the National Council's triennial sessions also grants it such
authority. But Article X does not confer such a power. As discussed above, the National
Council reservedthepowertoestablishspecificmembership requirementsin theGSUSA
38 (...continued)
may establish standards and issue standards, procedures, and interpretations regarding
such requirements provided such standards,procedures,andinterpretationsareconsistent
with the requirements established by the National Council.").
39 GSUSA Const. art. VIII, § 1.
40 GSUSA Const. art. X, § 1.
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41
Constitution and acted on that power when it set the specific requirement for annual
membership dues at $12. Article X's general grant of the power to the Board to manage
the corporation's affairs must yield to more specific constitutional provisions. 42
In addition, GSUSA's argument that it retains the power to increase annual
membership dues under either Article VIII or X inverts the fundamental relationship
between the Board and the National Council and would allow the Board to subvert the
National Council's authority regarding membership dues. It would also require us to
hold that the corporation's charter vests in the Board all powers except those explicitly
taken away by the GSUSA Constitution. But the terms of the corporation's charter grant
the Board only those powers specifically delegated in the GSUSA Constitution and
Bylaws and therefore do not grant it the power to undermine the express decisions made
by the National Council.
D. GSUSA's Remaining Arguments
GSUSA also argues that Farthest North's interpretation of the GSUSA
Constitution is at odds with fundamental principles of corporate law and that the Board's
power to manage the corporation's finances is another source of authority to set annual
membership dues.
1. Principles of corporate law
GSUSAarguesthat theWashington, D.C.Codeprovisions allowing boards
43
of nonprofit corporations to "[i]mpose dues . . . on [the corporation's] members"
41 GSUSA Const. art. VIII, § 1.
42 See Ohio Power Co. v. Fed. Energy Reg. Comm'n, 744 F.2d 162, 168 n.7
(D.C. Cir. 1984) ("[S]pecific clauses prevail over general clauses [when] the clauses
stand irreconcilably in conflict.").
43 D.C. Code § 29-403.02(14).
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support its argument that managing the affairs of the corporation includes setting annual
dues amounts. But the section of the Code it cites actually describes what powers the
corporation - as an individual legal entity - may have and does not specify which
body within the corporation may exercise such powers. Additionally, GSUSA's
interpretation confuses members of the GSUSA corporation, i.e., those who "ha[ve] the
right . . . to select or vote for the election of directors or delegates or to vote on any type
44 with the individual Girl Scouts who are "members" of
of fundamental transaction,"
their local charters.
GSUSA further argues that under general rules of corporation law, it is
"customary" for a board of directors to exercisebroadauthority over the corporation, and
that this broad authority includes the ability to increase membership dues amounts. But
as explained above, the Board does have broad authority, such as its authority to manage
the affairs of the corporation between the National Council's triennial sessions.45 Its
authority simply is not broad enough to countermand the specific authority granted to the
National Council in the GSUSA Constitution.46
2. Power to manage finances
GSUSA argues that the GSUSA Constitution grants the Board shared
authority with the National Council to manage the corporation's finances and therefore
the ability to collect "contributions" from the corporation's members, which would
includesetting annualmembershipdues amounts. ArticleXIVprovides: "Contributions
for the purposes of this corporation shall be collected only as authorized by the National
44 Id. § 29-401.02(24).
45
GSUSA Const. art. X, § 1.
46 See GSUSA Const. art. IV, § 1.
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47
Council or [the Board]." A plain reading of the term "contributions" in this context
leads us to conclude that Article XIV governs charitable contributions, not mandatory
membership dues. As GSUSA argued earlier in this case, membership dues are not
"charitable contributions" and therefore do not fall under this provision. Moreover, even
if such contributions included membership dues, the ability to "collect" does not connote
the authority to set or increase the dues amounts.
V. CONCLUSION
BecausetheGSUSAConstitution grants theNationalCouncil theexclusive
right to establish membership dues, we REVERSE the superior court's decision granting
summary judgment in favor of GSUSA and direct the superior court to enter partial
summary judgment in favor of Farthest North. We REMAND to the superior court for
further proceedings on the parties' remaining claims.
47 GSUSA Const. art. XIV, § 1.
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