An appellate court in Virginia has held that four members of the Virginia Military Institute Alumni Association, including one intending to run for a seat on its board of directors, are not entitled to disclosure of email addresses of the other members under the state’s Nonstock Corporation Act.  In a divided opinion, it has affirmed a trial court decision that a member’s statutory rights to inspect the records of members does not extend to the members’ email addresses.

In March, 2023, two members of the VMI Class of 1961 requested a list of members and email addresses to promote the candidacy of one of them for a position on the board.  Two other members of the Class of 1974 requested the list to enable them to communicate with fellow members “on issues we feel are important to the Membership.” The Association said it would make available a paper copy of the names and mailing addresses, but refused on “advice of counsel” to provide email addresses.  It expressed concern that disclosing email addresses could lead to “general communications” from the members that “could cause confusion and unrest among the alumni and potential harm to VMI.”

The members sued under provisions of the law that allowed them to obtain a list of member names and “address.”  The Court said there were two sources of law for the right of members to obtain addresses of other members, the common law and the statutory law.  Since the members sued only on the statutory law, it said, it did not have to consider what might be possible under the common law.

Nevertheless, the Court traced the common law back to the common law of England, which it said was still in full force and effect in Virginia.  Until 1956, it said, a shareholder of a corporation had a right to compel production of corporate records at a proper time and place and for a proper purpose germane to his interest as a stockholder.  In 1956, the legislature adopted a new stock corporation law and a nonstock corporation law for nonprofit purposes based on Model Laws promulgated by the American Bar Association.  The Nonstock Law carried forward the right of a member to inspect all books and records of the corporation for any proper purpose at any reasonable time.

In 1985, the law was amended again to provide that members had inspection rights only if they had been members for at least six months before making the demand.  In 2019, the legislature adopted a recommendation from the 2016 Model Business Corporation Act providing that a business corporation did not have to provide email addresses to other shareholders.  It did not enact a conforming change to the nonstock corporation act.

The Court reviewed three specific arguments made by the plaintiff members and rejected them all.  It also noted that the ABA’s Corporate Laws Committee amended its Model Act in 2021 in a way that “would likely give petitioners the statutory inspection rights to the member email addresses they seek here.”  But it said that the legislature did not adopt such amendments and “it is not for us to amend the Act by judicial fiat, let alone decide whether doing so would be good policy for Virginia corporations.”

It concluded by saying that nothing impairs the members’ common-law right to seek such records independently but that since they sued for statutory rights alone, the case had to be dismissed.

The dissenting judge said that the term address should include email addresses.  The judge pointed out that the Association maintains such addresses and uses email for most of its communication with members.  It also publishes the email addresses in a printed directory of its members available for $150.  The judge said that the statute does not make a difference between who can pay and who cannot pay for the same information.  (Respess v. VMI Alumni Association, Ct. of Apps., Lexington, VA, No. 1290-23-3, 6/25/24.)

YOU NEED TO KNOW

This is a narrow, limited, and perhaps not final, decision from a single state that is based on peculiar state law history and made by a court unwilling to exercise its common law power because the plaintiffs did not specifically ask it to do so.  With a basic premise of common law being that it can change with the times without legislation, it seems likely, from what the Court says in its opinion, that the same plaintiffs could prevail if they started all over again with a common law claim.

My favorite question about nonprofit organization is “whose organization is it.”  (See Ready Reference Page: “The Key Question — Whose Organization Is It?”). Nobody owns a nonprofit, but some people do control it.  Normally, in a membership nonprofit, the members control and the organization should be responsive to the members’ needs and wishes.  I am always suspicious of a group that says members’ access to discuss issues with other members might cause confusion, unrest and potential harm to the organization.  Discussing and ultimately deciding tough issues is a pre-requisite to democracy.

But maybe an alumni association really belongs to the institution and the membership idea is just an illusion to make the alumni feel included and contribute more.  The governing documents of the Association are not included in the opinion.  The members may not be unfettered. They may be in a position, by rule or by tradition, only to accept or reject the favors that the institution allows them.