Court Holds Vote To Remove Director Is Not An Exercise Of Free Speech

When directors vote to remove a fellow director, are they exercising their free speech rights?  This may seem to be a question that is reserved for courses in legal theory.  In California, however, answering the question can determine whether a plaintiff will stay in court.

In Donovan v. Dan Murphy Foundation,  Cal. Ct. of Appeals Case No. B230820 (April 18, 2012), the plaintiff filed a lawsuit contesting his removal from the board of directors of a non profit corporation’s board.  The defendants filed a special motion to strike under California’s anti-SLAPP statute, California Code of Civil Procedure § 425.16.  The statute gets its name from the initialization of “Strategic Lawsuits Against Public Participation”.  In general, anti-SLAPP statutes are intended to protect people and businesses from retaliation for speaking out.

The directors argued that the complaint implicated constitutional rights “because the removal of Donovan [the plaintiff] as a director was done through a majority vote, and voting is an act in furtherance of the directors’ right of free speech.”  They also argued that director meetings and voting are authorized by the California Corporations Code.  The Court of Appeal, however, concluded that the mere act of voting isn’t enough and that board meetings of a nonprofit charitable organization are not official proceedings authorized under law for purposes of § 425.16.  Thus, the Court of Appeal reversed the trial court’s granting of the directors’ special motion to strike pursuant to § 425.16.

For a successful use of a special motion to strike pursuant to § 425.16, see “Court Slaps Down Section 25400 Market Manipulation Claim Against Convicted Felon“.

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Allen Matkins Leck Gamble Mallory & Natsis LLP | Attorney Advertising

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