United States District Court, District of Columbia
Document Nos.: 35, 40, 106, 107, 108, 109, 110, 111
RUDOLPH CONTRERAS, UNITED STATES DISTRICT JUDGE
Defendants' Motions to Dismiss; Denying Defendants'
Motions to Stay
diversity action concerns a controversial topic in American
academia: The movement to boycott Israeli academic
institutions. Plaintiffs are current and former members of
the American Studies Association (“ASA”), a
nonprofit, charitable corporation dedicated to promoting the
study of American culture. They have sued ASA and several of
its current and former leaders,  alleging that Defendants
coopted an apolitical educational organization and, against
its members' wishes, turned that organization into a
mouthpiece of the Israel boycott movement. More specifically,
Plaintiffs contend that Defendants acted unlawfully in
securing the membership vote authorizing ASA to endorse the
boycott, and that Defendants unlawfully expended ASA funds
supporting the boycott. They seek damages, declaratory
relief, and injunctive relief, some of that relief on behalf
of ASA itself.
before the Court are Defendants' motions to dismiss the
action, along with other miscellaneous motions. Having
reviewed the briefing, the Court concludes that Plaintiffs
may have meritorious claims arising from their individual
injuries as ASA members. However, the Court also concludes
that Plaintiffs cannot seek relief for ASA's injuries,
because ASA is not a plaintiff and Plaintiffs do not and
cannot assert derivative claims on its behalf. Without that
relief, Plaintiffs cannot meet the amount-in-controversy
necessary to pursue their action in federal court.
Accordingly, and for the reasons stated below, the Court will
grant Defendants' motion to dismiss without prejudice.
a nonprofit organization in service of “the promotion
of the study of American culture through the encouragement of
research, teaching, publication, the strengthening of
relations among persons and institutions in this country and
abroad devoted to such studies, and the broadening of
knowledge among the general public about American culture in
all its diversity and complexity.” See ASA
Const. & Bylaws, Art. I § 2, ECF No. 21-3. ASA's
founding documents provide that it was “organized
exclusively for education and academic purposes.”
Pls.' Sec. Am. Compl. (“SAC”) ¶ 30, ECF
No. 81. Its Statement of Election further states that
“[n]o substantial part of [its] activities . . . shall
be the carrying on of propaganda, or otherwise attempting, to
influence legislation . . . .” ASA Statement of
Election ¶ 3(4), ECF No. 21-5. Its priorities and
general direction are dictated by its “National
Council”; essentially its board of directors.
Officially, the National Council is charged with
“conduct[ing] the business, set[ting] fiscal policy,
and oversee[ing] the general interests of the [ASA].”
ASA Const. & Bylaws, Art. V § 2.
incorporated in the District of Columbia as a private,
nonprofit corporation governed by District of Columbia law.
SAC ¶ 17. Moreover, the Internal Revenue Service has
designated ASA as a tax-exempt, charitable organization under
the Internal Revenue Code, 26 U.S.C. § 501(c)(3).
Id. Because ASA is exempt from taxation under §
501(c)(3), it is considered to be a “charitable
corporation” under the District of Columbia statutory
framework governing nonprofit corporations. D.C. Code §
ASA's Boycott Resolution
contend that beginning in 2012, the Individual Defendants
launched a scheme to co-opt ASA's National Council and
key ASA committees, with the purpose of causing ASA to
officially endorse a boycott of Israeli academic institutions
(the “Resolution”). See SAC ¶¶
45, 47-77. First, the Individual Defendants allegedly caused
only boycott supporters to be nominated for National Council
elections-without disclosing their boycott support to
ASA's general membership-to “pack” the
National Council. See id. ¶¶ 53-54. Next,
having secured the necessary decision-making power, the
Individual Defendants made the Resolution's passage a
priority for 2013. See id. ¶¶ 87-89. In
furtherance of that goal, the Individual Defendants allegedly
expended ASA resources and manpower promoting the boycott to
ASA's general membership. See id. ¶¶
82-101. According to Plaintiffs, the Individual Defendants
also suppressed dissenting opinions and information
unfavorable to the boycott, preventing such materials from
being widely distributed to the membership. See id.
¶¶ 105-116. Then, around the time that ASA
announced that a membership vote would be held on the
Resolution, the Individual Defendants allegedly froze
ASA's membership rolls to prevent individuals adverse to
the Resolution from paying their dues and voting against it.
See id. ¶¶ 123-26. Finally, ASA allegedly
conducted the Resolution vote in a manner violating ASA's
bylaws and District of Columbia law. See id.
¶¶ 138-41. The Resolution passed. Id.
contend that once the Resolution passed, the Individual
Defendants improperly diverted ASA's resources to
defending and promoting it. For instance, they claim that the
Individual Defendants “invade[d]” ASA's Trust
and Development fund to pay for Resolution-related insurance,
public relations and legal fees. See id.
¶¶ 162-171, 182-91. They also claim that ASA's
revenues from donations and membership dues dropped
precipitously after the Resolution, because the Resolution
offended current and potential contributors and members.
See id. ¶¶ 172-81. And they claim that to
offset Resolution-related expenses, ASA raised membership
dues from, at most, $120 to $275. See id. ¶
assert several common law claims arising from the Individual
Defendants' alleged scheme. They claim that the Individual
Defendants breached their fiduciary duties to ASA and its
membership by (1) misrepresenting their intentions to the
membership and failing to disclose the Resolution's
costs; and (2) misappropriating ASA resources and
manipulating ASA's voting processes for their own
interests, at ASA's expense. Id. ¶¶
192-97. They claim that Defendants acted ultra vires
and breached their contract with ASA's members by (1)
failing to nominate diverse candidates for National Council
elections; (2) freezing ASA's membership rolls so that
certain members, including Plaintiff Michael Barton, could
not vote on the Resolution; (3) improperly conducting and
certifying the Resolution vote; and (4) devoting a
“substantial part” of ASA's activities to
attempting to influence United States and Israeli
legislation, all in violation of ASA's bylaws, ASA's
constitution, and potentially District of Columbia law.
Id. ¶¶ 198-240. Finally, they claim that
Defendants engaged in corporate waste by devoting ASA
resources to supporting the Resolution. Id.
¶¶ 241-44. Plaintiffs seek damages, declaratory
relief, and injunctive relief. Id. at 82.
Relevant Procedural History
filed suit in April 2016, see Compl., ECF No. 1, and
amended their complaint for the first time in June 2016,
see First Am. Compl. (“FAC”), ECF No.
19. That complaint asserted both direct claims based on
Plaintiffs' individual injuries and derivative claims on
behalf of ASA. See generally id. It also asserted-as
does Plaintiffs' Second Amended Complaint-that the Court
has subject matter jurisdiction under 28 U.S.C. §
1332(a). FAC ¶ 9; SAC ¶ 11.
after Plaintiffs amended their complaint, Defendants first
moved to dismiss the action. They argued in part that (1) the
Court lacked subject matter jurisdiction because Plaintiffs
failed to satisfy the $75, 000 amount-in-controversy required
to maintain a diversity suit under 28 U.S.C. § 1332(a);
and (2) Plaintiffs failed to meet the statutory requirements
for bringing a derivative action. See Bronner I, 249
F.Supp.3d at 36. Reviewing the complaint for the first time,
the Court concluded that it was not legally impossible for
Plaintiffs to receive a judgment of at least $75, 000, and
thus that the amount-in-controversy requirement was
satisfied. Id. at 38. The Court also concluded,
however, that Plaintiffs failed to satisfy the District of
Columbia's procedural requirements for bringing a
derivative action on ASA's behalf. Id. at 43
(citing D.C. Code § 29-411.03(2)). The Court thus
dismissed Plaintiffs' derivative claims. Id. at
November 2017, Plaintiffs moved for leave to amend their
complaint for a second time. See generally Pls.'
Mot. Leave File Sec. Am. Compl., ECF No. 59. The Court
granted this motion but sought supplemental briefing from the
parties regarding whether the District of Columbia Nonprofit
Corporations Act immunized the Individual Defendants from
money damages. Bronner II, 324 F.R.D. at 294-95. The
Court recognized that Plaintiffs' inability to collect
money damages from the Individual Defendants would raise
serious doubts regarding the Court's jurisdiction under
28 U.S.C. § 1332(a). Id. at 294.
Court considered the parties' supplemental briefing and
held that it could not conclude, at the pleadings stage, that
District of Columbia law immunized the Individual Defendants
from money damages. Bronner III, 317 F.Supp.3d at
293-94. The Court declined, however, to address whether
Plaintiffs' Second Amended Complaint otherwise satisfied
28 U.S.C. § 1332(a)'s amount-in-controversy
requirement. See id. at 289 n.2, 290 n.5. Instead,
it encouraged Defendants to submit a “well-fashioned
motion to dismiss” raising that question. Id.
at 290 n.5.
motion to dismiss has now been submitted. See
Original Defs.' Mot. to Dismiss, ECF No. 106; Def. Steven
Salaita's Mot. to Dismiss, ECF No. 108; Defs. J.
Kehaulani Kauanui's & Jasbir Puar's Mot. to
Dismiss, ECF No. 109. Defendants argue that Plaintiffs'
action should be dismissed in its entirety under Federal Rule
of Civil Procedure 12(b)(1) for lack of subject matter
jurisdiction, see Original Defs.' Mot. at 1, and
in the alternative that certain of Plaintiffs' claims
should be dismissed under Federal Rule of Civil Procedure
12(b)(6), see id. at 14, 21-22. Defendants have also
asked the Court to stay discovery pending its consideration
of their motions to dismiss. See Original Defs.'
Mot. to Stay, ECF No. 107; Def. Steven Salaita's Mot. to
Stay, ECF No. 110; Defs. J. Kehaulani Kauanui's &
Jasbir Puar's Mot. to Stay, ECF No. 111.Briefing on these
motions has concluded, and they are ripe for the Court's