A federal District Court in Colorado has refused to dismiss claims against volunteers of a 501(c)(3) charitable food bank who were sued personally for violation of the federal Perishable Agricultural Commodities Act (PACA”).  Although the officers claimed that they were protected by the federal Volunteer Protection Act of 1997, the Court held that the Act did not protect them from claims under federal law.  (American Produce v. Harvest Sharing, D. CO., No. 11-cv-00241, 3/20/13.)

American Products, a for-profit company that sells perishable foods, sued Harvest Sharing and two of its officers for failure to pay about $26,000 for perishable foods.  It claimed violations of the PACA.  The volunteers argued that the VPA preempts all state and federal tort actions against them “within the scope of their responsibilities” for the organization.  American Products argued that they were not volunteers, but if they were, the VPA did not protect them from the claims for violation of federal law.

The VPA provides that volunteers for 501(c)(3) nonprofits are not personally liable for their actions within the scope of their responsibilities unless they cause harm through “willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the individual harmed by the volunteer.”  It specifically exempts misconduct that constitutes a crime of violence, terrorism, a hate crime, sexual offenses for which the individual was convicted, a violation of state or federal civil rights law, or where the harm was committed while the volunteer was intoxicated.  (See Ready Reference Page:  “Federal Law Protects Nonprofit Volunteers”)

The VPA “preempts the laws of any State to the extent that such laws are inconsistent with [the VPA], except that [the VPA] shall not preempt any State law that provides additional protection from liability relating to volunteers….”

The Court said its task was to determine Congressional intent by examining the statute’s plain language.  “By its plain terms,” the Court said, “the VPA explicitly preempts any state law that provides volunteers with insufficient protection against lawsuits or is inconsistent with the provisions of the VPA. Moreover, despite the fact that federal liability for volunteers would seem to undercut the stated goals of encouraging volunteerism, nothing in the language of the VPA expresses an intent to exempt volunteers from federal liability.”  It said that “well established jurisprudence strongly disfavors preemption of federal statutory law by another federal statute absent express manifestations of preemptive intent.”

The Court looked to the legislative history, which, it said, supports the conclusion that Congress only intended to immunize volunteers from state law claims.  It said the House report revealed the purpose to create a uniform national standard governing volunteer liability because the “hodgepodge of State laws” does not provide volunteers with enough protection.  It said the House report did not refer to federal laws and that the Congressional Budget Office did not mention the cost of overriding federal laws, although it did say the cost of overriding state laws would be minimal.  “Nothing in the VPA or the legislative history indicates that, by enacting the VPA, Congress intended to immunize volunteers from claims brought pursuant to federal law,” it concluded.

The volunteers had cited a 2003 case in Arizona in which a federal District Court there had held that the VPA protected volunteers against personal liability under the Federal Fair Labor Standards Act. The Court in that case held that the VPA was intended to protect against “any claim” other than those specifically excepted by the Act.  The Court in Colorado disagreed with the Arizona court’s decision and did not interpret the reference to federal laws among the claims for which protection was not provided as evidence that Congress intended to “immunize” volunteers from federal law.

YOU NEED TO KNOW

This case seems to disregard the fundamental premise of the VPA to establish a uniform minimum national standard for protection of volunteers against personal liability in working for charitable organizations.  The basic limitation of liability language in the Act provides that no volunteer will be liable for harm caused by an act or omission when acting on behalf of the nonprofit entity, except when the volunteer fails to meet certain conditions of the act.  Some of those exceptions involve violations of federal law.

The fact that the exceptions to the protection specifically exclude protection for violation of certain federal laws strongly suggests that other federal laws are not excluded from the protection.  The Court in this case does not find that argument persuasive, but if Congress had really wanted to provide for liability other federal laws, it clearly knew how to do so.  There is no indication in the Act that it was not intended to establish a minimum standard of protection in all cases except those specifically excluded.

The VPA preempted state laws that provided less protection for volunteers, but did not disturb state laws that provided more protection, specifically those that provided volunteers with actual immunity from liability. The fact that the Court repeatedly describes the VPA as providing immunity also suggests that it does not understand what Congress was attempting to do.  The VPA establishes a more stringent standard for imposing liability in most cases, but does not provide immunity and doesn’t provide the more stringent standard in certain situations, including violation of certain federal statutes.