Wednesday, July 2, 2008

Louisiana Supreme Court Finds Standing for Donors to Sue Charities

Insidehighered.com reports that the Supreme Court of Louisiana has ruled donors and their heirs have standing to sue charities regarding alleged failures to comply with the terms of their gifts.  The lawsuit at issue arose out of Tulane University's decision, in the wake of Hurricane Katrina, to merge its women's college and other undergraduate units into one unified college. 

The court's opinion is available through a link in the court's press release from July 1, 2008 under the name Pamra Matthis Howard and Jane Matthis Smith v. Administrators of the Tulane Educational Fund (no. 2007-C-2224).  It details that the gifts at issue were from Josephine Louise LeMonnier Newcomb and were allegedly intended to be used to establish and maintain the women's college, named after Mrs. Newcomb's deceased daughter.  Mrs. Newcomb made the first gift of $100,000 in 1886 (yes, in the nineteenth century), and continued to make donations to support the college for the rest of her life and through her estate.  She died in 1901. 

While the court found standing for donors or their heirs under Louisiana law, it noted that the plaintiffs had failed in their pleadings to establish that they were the "would-be heirs and legatees" of Mrs. Newcomb under Louisiana law.  The court therefore remanded the case to allow the plaintiffs an opportunity to amend their pleadings to address this issue.

The impact of the decision outside of Louisiana is unclear, as it relied upon an extensive review of Louisiana's Civil Code and the Napoleon Code upon which it is based, and so not on common law principles.

LHM

http://lawprofessors.typepad.com/nonprofit/2008/07/louisiana-supre.html

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