Farthest North vs. GSUSA: The Final Battle

“Because the corporate governing documents vest authority to establish membership dues solely in the National Council of the Girl Scouts of the United States of America, we reverse and remand for further proceedings.” – The Supreme Court of the State of Alaska

And there it is, folks.  The Alaskan Supreme Court rolled up a Blue Book and smacked GSUSA on the nose.  Hard.  A couple of times.  And yet again for good measure.

In case you’re new to this madness, here is the chain of events.  Up to 2008, the National Council had always been the body to approve membership dues increases at the triennial National Council Sessions.  In 2012, the National Board took it upon itself to raise dues from $12 to $15.  Then in 2016, the National Board raised them again to $25.  The Farthest North council called the National Board out on this claiming it didn’t have the authority per the Blue Book of Basic Documents, and they filed a lawsuit against GSUSA in February of 2017.  In May of 2018, the superior court of Alaska ruled in favor of GSUSA.  Farthest North appealed, and in April of this year, the lawsuit was heard in the Supreme Court of the State of Alaska.  Farthest North won its appeal last Friday.

A little over two years ago, I wondered what the heck Farthest North’s lawsuit was all about, because based on what I had read online and heard from a former National Delegate in my council, I was under the impression that the National Council at some point had given authority over to the National Board to raise dues.  So ignoring the saying “curiosity killed the cat,” I decided to look into it and see if that really was the case.  I figured if the National Council had actually given the National Board the power, it would be reflected somewhere in the Blue Book text.  Upon review, I didn’t think it did, and I wrote a blog post about it.  I was surprised to see this blog post go viral, and it led to three more posts over that summer defending my viewpoint.  During my research, I also found that despite what people “remembered,” at no time did the National Council vote to give the National Board the authority.  The Mandela Effect was in full force here for sure.

You can find the case documentation on the Alaskan appellate court website, and here’s another website where you can download the ruling.  Or if you want to watch the trial, here’s the video.  The Court did a much better job in their ruling explaining why the National Board doesn’t have the authority than I did back in 2017.  I suppose that goes without saying, because that’s why they are state supreme court judges, and I’m just a blogger.  However, I did include some of the back story and more detailed references to the Blue Book.   If you’re not familiar with our governance documents and/or you’re curious about the history of how this all came about in 2008, I suggest going back and reading my initial blog post complete with  Back to the Future graphics.

I’m now going to walk through the ruling.  Please let me know if I cover something incorrectly.

First, the Alaskan Supreme Court applied Washington, D.C. law as a basis for this case since GSUSA was originally incorporated there.  We have a Congressional Charter, and you can find it in the last section of the Blue Book.  Farthest North argued that this charter only gives the National Board specifically stated powers in the GSUSA Constitution and Bylaws.   GSUSA claimed they (acting through the National Board) have authority based on the line, “To the extent provided in the constitution and bylaws, the board of directors shall have the powers of the Council and manage the activities of the corporation between meetings of the Council.”  And because membership dues aren’t specifically mentioned in the Congressional Charter, GSUSA said therefore their authority over said membership dues was fair game.  This reminds me of when my daughters get in trouble and try to get out of it by yelling, “Well you didn’t tell me I couldn’t do it!”  The Court sides with Farthest North.  They state, “Because a plain reading of the Congressional Charter supports Farthest North’s interpretation, we must look to the GSUSA Constitution to determine what, if any, power the Board has to increase membership dues amounts.”  A plain reading means someone should interpret a document using ordinary language and at face value.  The Court then speaks to the objective law of contracts, meaning you should read into a contract the same way a third party who has no investment in either side would (in other words, objectively!).  There should be no interpretation of what’s right or wrong.

In their argument, Farthest North asserted that Articles V and VIII of the GSUSA Constitution establish the National Council as the only body authorized to set the amount of membership dues:

The Court cuts right to the chase by stating, “But because the meaning of Article V is unambiguous and Article VIII reinforces its plain meaning, we hold that the GSUSA Constitution vests sole authority to set membership dues amounts in the National Council.”  They reaffirm this later:  “Because paying membership dues is a requirement for a credential, the National Council is vested with the power to establish the amount of annual dues. And, pursuant to the Congressional Charter, because the Board is not similarly delegated this power elsewhere in the GSUSA Constitution, the power is exclusively held by the National Council.”

Farthest North also referenced Article V again in their rationale:

GSUSA claimed the second sentence about votes cast only establishes a procedure IF the National Council just happens to vote on membership dues.  (Would this have ever happened if the National Board thought it could just do it on its own anyway?)  I’m assuming they believed the third sentence referred to ANY meeting, including National Board meetings.  But the Court calls GSUSA out on this by asking what’s the point of the second sentence if it’s claimed it doesn’t vest any authority to the National Council?  They answer this question:  “The only reason to separate the specific matter of ‘decision on membership dues’ from ‘all matters’ must be to proclaim that only the National Council has the authority to set them. We must give meaning to each provision, and giving meaning to the second sentence of Article V, § 5 makes clear that only the National Council has the authority to make decisions on membership dues.”

By the way, it’s interesting to note that in the 2008 National Council Session Workbook, Proposal 4 requested an amendment to Article V, § 5 (pg. 51).  The National Board, in its rationale for support, brought up the procedural argument but tied it directly to the word “ballot” which at the time was included in the second sentence:  “Decision on annual membership dues shall be by ballot and shall require a majority of votes cast.”  The National Board claimed using the phrase “by ballot” specified the procedure as to how a vote would be taken and that it was no longer necessary.  It recommended removing the entire sentence altogether, but the proposal was amended during the session so that just “by ballot” was struck (since it was what the National Board had the issue with), and therefore the procedural language was removed.  Just thought I’d point that out.

GSUSA also claimed that the National Council has the authority to establish general membership requirements and that the specific amount should be considered a standard, which the National Board does have the authority over:

In my opinion, GSUSA was just hedging their bets with this rationale.  If the National Board claimed it had overall authority based on how it interpreted the Congressional Charter and the Constitution, then why include this one mentioning standards?   It wouldn’t be necessary to bring this up.  This is similar to what I asked on a webinar about Proposal 3 regarding Lifetime Membership dues at the 2017 National Council Session.  Why come to the National Council asking it to modify the Requirements section of the Credentials when you are claiming you have that power in the first place?  Either you have the power or you don’t.  To their credit, GSUSA answered me, but I published a rebuttal on my blog.  Some people were not happy about this.

Anyway, the Court blew GSUSA up on this one too by referencing the National Council’s approval of a dues increase to $12 in 2008.  “By setting a specific amount for membership dues, the National Council established a specific requirement under Article VIII, which the Board only had authority to administer. By unilaterally increasing the membership dues under the guise of ‘administration of requirements,’ the Board exceeded its constitutional authority under Article VIII.”  Like one of the judges asked at the trial when the GSUSA attorney questioned how membership dues amounts came to be a requirement, “Can you be a member without paying it?”  If you don’t pay that specific amount, you’re not a member.  That sounds like a requirement to me.

Then we come to Article X:

GSUSA claimed that setting membership dues amounts is an administrative task and therefore falls under “the affairs of the organization.”  The Court said NOPE: “Article X’s general grant of the power to the Board to manage the corporation’s affairs must yield to more specific constitutional provisions.”  The Court goes a step further and also points out that not yielding to specifics opens the door to basically allowing the National Board to control the entire organization except those duties taken away in the Constitution.  They continue on, saying, “But the terms of the corporation’s charter [the Congressional Charter] grant the Board only those powers specifically delegated in the GSUSA Constitution and Bylaws and therefore do not grant it the power to undermine the express decisions made by the National Council.”

GSUSA also claimed they are granted authority per corporate law – specifically Washington D.C.’s code pertaining to boards of nonprofit corporations.  I’m not a lawyer, so I’m just going to quote from the ruling:  “But the section of the Code it cites actually describes what powers the corporation — as an individual legal entity — may have and does not specify which body within the corporation may exercise such powers. Additionally, GSUSA’s interpretation confuses members of the GSUSA corporation, i.e., those who ‘ha[ve] the right . . . to select or vote for the election of directors or delegates or to vote on any type of fundamental transaction,’ with the individual Girl Scouts who are ‘members’ of their local charters.”

GSUSA also argued that the National Board and National Council share authority to set membership dues amounts based on Article XIV/Financials:

Really, GSUSA?  Membership dues are the same thing as contributions?  The Court dropped a nuke on that rationale:  “A plain reading of the term ‘contributions’ in this context leads us to conclude that Article XIV governs charitable contributions, not mandatory membership dues. As GSUSA argued earlier in this case, membership dues are not ‘charitable contributions’ and therefore do not fall under this provision. Moreover, even if such contributions included membership dues, the ability to ‘collect’ does not connote the authority to set or increase the dues amounts.”

Finally, the Court declares that they REVERSE (yes, they used ALL CAPS too in case it wasn’t clear) the superior court’s ruling for GSUSA.  They direct the lower court to enter a partial summary judgment in favor of Farthest North.  And they REMAND (ALL CAPS too) the lower court to take care of the rest.  Clean up on Aisle 4!

I know there are a few questions based on what I’ve seen people asking and discussing online, so I’ll do my best to answer them.  Correct me if I’m wrong.

Didn’t the National Council vote to give the National Board authority at a previous National Council Session?

Nope.  Never happened.  Check the minutes and the records.  The Court ruled what’s stated in the Blue Book, not what was discussed at a National Council Session or claimed in a National Council Session Workbook.

What about the Lifetime Membership amount voted on by the National Council in 2017?  Does this ruling still apply?

Yes, it still applies.  None of the language that either Farthest North or GSUSA used in their arguments was modified after the publication of the 2009 Blue Book.

Well, I think the National Board should be the one to set the amount of membership dues anyway.

That’s fine, but then do it the right way as our governance procedures dictate.  It’s too late for the 2020 National Council Session at this point, but if that’s what you believe, write a proposal that would give the National Board that authority and then get your council to sponsor and submit it when the National Board calls for proposals.

Do I get a refund of membership dues if I don’t live in Alaska?

Nope.  The Court ruling only applies to the state of Alaska, so only the two Alaskan councils can collect $12 dues.

This ruling says it’s being sent back down to the lower court, so it sounds like it’s not over yet.

The Supreme Court of the State of Alaska has ruled on the question of who has authority and has ordered the lower court to reverse its decision.  At this point only a decision regarding how much money Farthest North will receive due to this ruling has to be worked out.

Could this go to federal court?

No, the case was filed in Alaska, and the Supreme Court of the State of Alaska is the highest court at that level.  A separate case would have to be filed in federal court for it to be heard there.

Who cares?  $25 is still a great deal.

I said this before in one of my original blog posts.  If you don’t think this is a big deal because you’re fine with dues being $25 a year, what if in a few years from now the National Board decides to raise dues to $30?  Or $50?  Or $100?  At what amount does it become a big deal to you?

Does this mean the $35 18 month membership level is invalid too?

Correct.  The National Council never approved this level.  This past April’s special on Lifetime Membership Dues was out of order too.

On a personal note, I have to admit it was satisfying to get validation on the research and time I spent on this topic.  Plus, I took a lot of heat due to the posts.  Falling down this rabbit hole was definitely worth it though, because talk about a crash course in National Governance!  Since then, I have learned a lot about the history of our organization and how it came about, and I don’t think I would have been able to do that without going down a path related to National Governance.  Yes, I am a Girl Scout nerd.

So where do we go from here?  Well, I have no idea.  I would think something related to this will come up during the 2020 National Council Session, or maybe even before then.   Personally, I’d like to see the National Board come forward in Orlando with a sincere mea culpa and the National Council OFFICIALLY approve $25 dues and the $35 18 month membership level.  I have no idea how this would work, but if we wanted to be ULTRA clear on matters, the National Council could even put forth a proclamation stating the National Council has full authority regarding membership dues.  That might be overkill though.

I believe if the National Board sincerely recognizes the National Council and gives it the respect it’s due “as the coordinating head of the Girl Scout Movement in the United States” per the GSUSA Constitution, it will go a long way to perhaps restoring some of the hard feelings that have developed over the past decade that are preventing us from moving forward successfully as a Movement.  I personally feel like this usurping of authority is a show of disrespect to the National Council and therefore the membership, and even if volunteers don’t know the ins and outs of governance and court rulings, I believe a large number of them sense it too.  Additionally, because of interpretative twisting, we are not abiding by the governance documents of our organization.  If you don’t respect your guiding documents, then you head down a slippery slope and place the entire organization at risk.

And kudos to the people of the Farthest North council for standing up for our organization and sticking with it even after being struck down at one point.  I have no doubt they also dealt with sharp criticism and pressure from multiple sources.  Most people in this day and age are happy to mumble and complain but then sit there quietly when it’s time to take action, or they look the other way if it doesn’t affect them personally.  I don’t understand this attitude because that’s the exact opposite of what we teach girls and what is at the heart of our Movement.

I have a feeling this won’t be the last time I blog about membership dues, so I’ll see you even further down the rabbit hole!

Addendum 10/11/19:  Not so fast my friend!