Lawsuit Charging AKA Sorority Financial Misconduct Allowed To ProceedAugust 30, 2011 |
by Eric Freedman
Eight suspended members of Alpha Kappa Alpha can sue the sorority and a number of its officers and directors alleging irregularities in the organization’s fiscal management, an appeals court has ruled.
The District of Columbia Court of Appeals unanimously reinstated a lawsuit this month against the country’s oldest Black sorority stemming in large part from controversial payments to former international president, or “Supreme Basileus,” Barbara McKinzie, and her use of an AKA credit card.
At the same time, however, the court upheld dismissal of all claims against the sorority’s affiliated foundation, the AKA Education Advancement Foundation.
Melody McDowell, the sorority’s chief information officer, said of the ruling, “While it’s pending, we have no comment about it.”
AKA was founded in 1908 at Howard University
The suit filed in 2009 alleges large-scale misspending without the authorization required from AKA’s policymaking body, the Boule. The challenged spending included a lump sum $250,000 payment and recurring $4,000 monthly “pension stipends” to McKinzie, the decision said.
The presidency had been a voluntary position prior to McKinzie’s tenure, according to court documents.
Other questioned expenditures include a wax statue of McKinzie and the purchase of jewelry, gym equipment club dues and designer clothing.
Claims include breach of fiduciary duties, breach of contract, fraud and unjust enrichment. The suit seeks to force repayment of the disputed funds estimated at more than $1 million, compensatory and punitive damages and an injunction against future violations of the constitution and bylaws. The plaintiffs also are asking for reinstatement of their membership privileges.
McKinzie, whose presidency ended in 2010, and AKA have denied any improprieties.
A lower-court judge dismissed the case before trial, saying the “disgruntled” sisters had no legal standing to sue and failed to show they have a legally recognizable claim against the sorority. That decision, which criticized the allegations as “hyperbolic,” also said that District of Columbia courts lack jurisdiction over the 24 individual current and former officers named as defendants.
But the unanimous three-judge appeals panel disagreed.
First, the court held that the plaintiffs, who are AKA former officers, were entitled to sue over the organization’s alleged failure to follow its own constitution and bylaws at the July 2008 Boule meeting in Washington. They assert that McKinzie wrongfully failed to open the floor to a discussion of financial matters and that AKA suspended their membership privileges in retaliation for filing the lawsuit.
“It would seem almost self-evident that members of a nonprofit organization whose revenue depends in large part upon the regular recurring annual payment of dues by its members have standing to complain when allegedly the organization and its management do not expend those funds in accordance with the requirements of the constitution and bylaws,” Senior Judge John Steadman wrote for the appellate court.
“Further, the individual rights of the plaintiffs were affected by the alleged failure to follow the dictates of the constitution and bylaws,” Steadman said. “Relief from improper discipline, here the suspension of membership, is a direct claim.”
The court ruled that the case was properly filed in Washington, where AKA is incorporated and where all the individual defendants participated in the 2008 convention. However, it said the foundation could not be sued in Washington because it is incorporated in Illinois, doesn’t do business in Washington and wasn’t accused of engaging in wrongdoing there.
The court did not rule on the merits of any of the allegations.
The case now returns to D.C. Superior Court for discovery and other pretrial proceedings.
AKA attorney Dale Cooter of Washington declined to discuss the appellate court’s reasoning but said it’s difficult to predict what will eventually happen in the case.Semantic Tags: Courts • Discrimination • Foundations • Fraternities & Sororities