Plaintiffs` Motion for Preliminary Injunction

Filed
D.C. Superior Court
12 Apr 26 P05:08
Clerk of Court
SUPERIOR COURT OF THE DISTRICT OF COLUMBIA
CIVIL DIVISION
__________________________________________
)
JOY ELAINE DALEY, ET AL.
)
)
Case No: 2009 CA 004456 B
Plaintiffs,
)
Judge Todd E. Edelman
)
Civil Cal 1
v.
)
)
Next Event: Early Mediation
)
May 9, 2012
ALPHA KAPPA ALPHA SORORITY, INC.
)
ET AL.
)
)
Defendants.
)
__________________________________________)
PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
NOW COMES Plaintiffs Joy Elaine Daley, Kezirah Means Vaughters, Carol P. Ray,
Elizabeth Berry Holmes, Catherine Alicia Georges, Marie L. Cameron, Brenda Georges, and
Frances Tyus (collectively, “Plaintiffs”), by their attorneys, move pursuant to Rule 65 of the
Superior Court Rules of Civil Procedure for the entry of a preliminary injunction against
Defendant Alpha Kappa Alpha Sorority, Inc. (“AKA”) to restore the full membership privileges
of all the Plaintiffs who have had withdrawal of privileges and/or suspension by any one or all of
the Defendants.
In support of this motion, Plaintiffs state as follows:
1.
Plaintiffs have a reasonable likelihood of prevailing on their claims that
Defendants breached their fiduciary duties and contractual duties under the AKA Constitution
and Bylaws when they suspended Plaintiffs membership in AKA out of retaliation, not for
violation of any provision of the AKA Constitution or Bylaws.
3.
Plaintiffs will suffer irreparable harm without the granting of a preliminary
injunction because they will be denied, among other things, the opportunity to participate and
help reform AKA at the July 2012 Boulé—an important meeting of the AKA membership that
occurs only every two years.
4.
The irreparable harm that Plaintiffs will suffer is greater than any harm to
Defendant if the relief is granted.
5.
Restoring Plaintiffs’ AKA membership privileges so that they can, among other
things, continue their efforts to help bring AKA back into legal and sound management is in the
public interest.
6.
Concurrently with the filing of this Motion, Plaintiffs submit their Memorandum
of Points and Authorities In Support of Motion for a Preliminary Injunction.
Dated: April 26, 2012
Respectfully Submitted,
/s/ A. Scott Bolden
A. Scott Bolden, D.C. Bar No. 428758
Tyree P. Jones, D.C. Bar No. 984586
Jeffrey Orenstein D.C. Bar No. 501353
Reed Smith LLP
1301 K Street, NW - Suite 1100
Washington, D.C. 20005
(202) 414-9266
[email protected]
Counsel for Plaintiffs
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 26th day of April 2012, a copy of the foregoing
Motion for Preliminary Injunction was electronically served on:
Aaron Handleman, Esq.
Shannon Chaudhry, Esq.
Eccleston and Wolf, P.C.
1629 K Street, N.W.
Davis Building, Suite 260
Washington, D.C. 20006
Counsel for Defendants
Dale A. Cooter, Esq.
Cooter, Mangold, Deckelbaum & Karas, L.L.P.
5301 Wisconsin Avenue, N.W.
Suite 500
Washington, D.C. 20015
Counsel for Defendant, Barbara A. McKinzie, CPA
/s/ A. Scott Bolden
A. Scott Bolden, D.C. Bar No. 428758
Reed Smith LLP
1301 K Street, N.W. - Suite 1100
Washington, D.C. 20005
(202) 414-9266
[email protected]
-3-
SUPERIOR COURT OF THE DISTRICT OF COLUMBIA
CIVIL DIVISION
__________________________________________
)
JOY ELAINE DALEY, ET AL.
)
)
Case No: 2009 CA 004456 B
Plaintiffs,
)
Judge Todd E. Edelman
)
Civil Cal 1
v.
)
)
Next Event: Early Mediation
)
May 9, 2012
ALPHA KAPPA ALPHA SORORITY, INC.
)
ET AL.
)
)
Defendants.
)
__________________________________________)
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF
PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
I.
Introduction
Plaintiffs brought this suit at great personal expense with the aim of restoring Alpha
Kappa Alpha (“AKA”)—the sorority they have served and loved for many years—back to sound
management. As an independent auditor recently reported after reviewing AKA’s financial
records for 2010, it is clear that “[f]or many years, the board of governance and management had
not established effective internal accounting and administrative control procedures” which
“contributed significantly to the misappropriation of AKA assets through collusive efforts on the
part of the former Supreme Basileus [Barbara McKinzie and] . . . some employees.” See
Auditors’ Report at 31 (attached with related audit materials as Exhibit A). Efforts to reform the
organization from within have been thwarted by those in power who wish to maintain the status
quo. And, while the findings of fraud and gross mismanagement detailed in the above
referenced audit report would ordinarily elicit an outcry for reform, such findings are likely to be
suppressed to the extent possible by AKA leaders who have historically put their own interests
above the sorority’s.
The Plaintiffs are in a unique position to make a positive difference because they
understand the problems AKA faces, because of their history of leadership within the sorority,
and because they have proven themselves not afraid (as many are) to speak candidly and
honestly about wrongdoing at the top of the AKA hierarchy. Their voices, however, cannot be
heard at this most crucial juncture in AKA’s history because their membership privileges have
been suspended. The reason for their suspension was, as AKA acknowledges the filing of this
lawsuit and Plaintiffs’ willingness to speak out and protest corrupt practices. See, e.g.,
Suspension Letters to Joy Elaine Daley and Carol P. Ray (attached with related correspondence
as Exhibits B and C). Defendants’ rationale for suspension has no grounding in AKA’s
Constitution and Bylaws, and Defendants’ attempt to justify suspension under the governing
documents is a transparent farce. Indeed, it is obvious that Defendant AKA, under the leadership
of Defendant McKinzie, simply retaliated against Plaintiffs and, in the process, violated (and
continue to violate) AKA’s Bylaws themselves.
More than ever, with federal authorities investigating and auditing AKA, the sorority is in
desperate need of members willing to inform AKA’s membership about the crises of leadership
they face and to encourage those willing to help advance much needed reforms. The appropriate
venue for this endeavor is the Boulé—a meeting of the membership that takes place only every
two years, and where much of the sorority’s important business is considered and voted upon.
See AKA Const. Art. IV. The next Boulé will convene in July 2012. If, however, Plaintiffs must
wait to address the Boulé until after a final adjudication of this case in their favor, it will be in
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2014, or possibly 2016. By then, the losses to AKA’s fiscal well being and reputation may be
too great to reverse.
Plaintiffs, therefore, move this court to issue a preliminary injunction granting the relief
sought in paragraph 9 of the Second Amended Complaint: “Restoration of the membership
privileges of all of the Plaintiffs who have had withdrawal of privileges and/or suspension by any
one or all of the Defendants.”
II.
Background
On June 20, 2009, Plaintiffs filed this suit in D.C. Superior Court and soon thereafter, in
July 2009, the Directorate purportedly convened to adopt a policy prohibiting sorors from filing
suit against AKA without meeting certain preconditions. Neither the AKA Constitution nor the
Bylaws have been amended to incorporate this new policy and, in fact Plaintiffs have yet to see
this policy embodied in any published AKA document.1
Notwithstanding the facts that (1) only a violation of the AKA Constitution or Bylaws
can justify suspension; and (2) the litigation policy was not in effect when Plaintiffs filed suit,
each of the Plaintiffs in this case received letters of suspension in August 2009 from their
respective Regional Directors, which cited the initiation of this suit as the primary reason for
suspension. Plaintiffs were also accused of violating the sorority’s prohibition on distributing
unauthorized communications in the name of AKA. However, no such communications made in
AKA’s name have been identified and, indeed, none exist.
1
The fact that the Directorate voted to adopt a litigation policy, and that this vote took place in July 2009—after the
filing of this suit in June 2009—is supported by statements made by Defendant McKinzie in her December 9, 2009
letter to Plaintiff Daley in which Defendant McKinzie denies Ms. Daley’s request for reconsideration of her
suspension and refers to “[t]he July, 2009 Directorate vote” pertaining to “the policy of the Sorority to suspend
members who file lawsuits….” See Exhibit C.
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All eight Plaintiffs filed timely appeals in accordance with the procedures set forth in
Article VI of AKA’s Bylaws. See, e.g., Exhibits B and C. Under this appeal process, Plaintiffs
are entitled to “a hearing with the Directorate at the earliest appropriate time.” Art. VI Section
15(b).. However, in the years since Plaintiffs’ suspensions and appeals in 2009, none of the
Plaintiffs have received a hearing.
Plaintiffs filed a Second Amended Complaint in November 2011 in which they alleged
that Defendant AKA’s “withdrawal of membership privileges” was done at the urging of
Defendant McKinzie largely “in retaliation for filing this action” and that such action is “not
provided for in the AKA Constitution [or] Bylaws.” Sec. Am. Compl. ¶ 165. See also id at ¶
166 (“Suspension for this purpose, in order to be valid, enforceable and effective, requires an
amendment to the Bylaws which can only be done by the AKA Boulé when the Boulé is in
session.”). Defendants McKinzie also violated “the Bylaws of defendant AKA” by “approv[ing]
sanctions and refus[ing] to schedule appeal hearings for members who have been suspended or
had privileges withdrawn, thereby denying such members their right to an appeals process which
is set forth in Article VI, Sec. 15 of the Bylaws.” Id. at ¶ 169. Similarly, the Directorate violated
“the Bylaws of defendant AKA” when it “allowed Defendant McKinzie to deprive members who
desire to appeal their withdrawal of privileges or suspensions, of their right to an appeal and due
process as provided in the Constitution and Article VII. Sec. 15.” Id. at ¶ 170. These same
actions also constitute “a breach of fiduciary duties of good stewardship and adherence to the
sorority’s core principles and purposes to encourage and cultivate high ethical standards, and to
welcome and encourage open communication among the membership.” Id. at ¶ 167.
After Plaintiffs filed the Second Amended Complaint, Defendants moved this Court to
dismiss, inter alia, Plaintiffs’ claims for breach of contract and breach of fiduciary duty. This
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Court denied Defendants’ motion with regard to these claims, noting that the Court of Appeals
had already established the fact that Plaintiffs’ breach of contract and fiduciary duty claims were
sufficiently pled and suitable for adjudication by this Court. Order Mot. Dismiss at 10; Daley v.
Alpha Kappa Alpha Sorority, Inc., 26 A.3d 723, 730 (D.C. 2011). While Defendants will
inevitably invoke language cherry picked from Levant v. Whitley that “Courts ordinarily will not
interfere with the management and internal affairs of a voluntary association,” 755 A.2d 1036,
1043 (D.C. 2000), the Court of Appeals has already made plain that, in this case, as in Levant,
the Court is willing to intervene “when an organization failed to follow its own rules.” 26 A.3d
at 730. Here, “we are dealing with allegations that AKA, a District of Columbia corporation,
violated its own Constitution and by-laws”; there should be no doubt at this stage, therefore,
about whether it is appropriate for this Court to adjudicate Plaintiffs’ claims.2
Plaintiffs now move this Court for a preliminary injunction ordering reinstatement of
their AKA membership and privileges. As detailed below, such relief is warranted because, (1)
Plaintiffs are likely to succeed in demonstrating that their suspension was in violation of AKA’s
Constitution and Bylaws, purely retaliatory, conducted in bad faith, and thus a breach of both
Defendants’ contractual duties under the Bylaws and their fiduciary duties; (2) Plaintiffs would
be irreparably harmed by their inability, as suspended members, to participate in the upcoming
2012 Boulé—the biennial meeting of the membership where they could avail themselves of the
protections of the Bylaws and Constitution, and advance the urgent cause of reforming AKA; (3)
2
This Court has taken the same approach in the past, having recognized that judicial intervention with a private
voluntary organization is appropriate under circumstances including fraud or denial of fair process. Jolevare v.
Alpha Kappa Alpha Sorority, Inc., 521 F. Supp. 2d 1 (D.D.C. 2007). By way of distinction, the Court of Appeals
declined to intervene in Blodgett v. Univ. Club, 930 A.2d 210, 225 (D.C. 2007) because the organization’s removal
of a member “was fundamentally fair and not in conflict with designated procedures, and tainted neither by fraud,
nor bad faith, nor arbitrary action.” Here, Defendants’ failure to follow AKA's designated procedures, fraud, and
bad faith are the heart of the case, as acknowledged by the Court of Appeals. Daley, 26 A.3d at 730.
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while Plaintiffs will be irreparably harmed by their continued suspension, no harm would be
visited on Defendants; and (4) the public interest can only be enhanced by enabling Plaintiffs to
participate in the effort to restore AKA to good and legal governance.
III.
Argument
A.
Standard for Preliminary Injunction
“The decision to grant or deny preliminary injunctive relief is committed to the sound
discretion of the trial court.” Stamenich v. Markovic, 462 A.2d 452, 456 (D.C. 1983) (citations
omitted). “A proper exercise of discretion requires the trial court to consider whether the moving
party has clearly demonstrated: (1) that there is a substantial likelihood that he will prevail on the
merits; (2) that he is in danger of suffering irreparable harm during the pendency of the action;
(3) that more harm will result to him from the denial of the injunction than will result to the
defendant from its grant; and, in appropriate cases, (4) that the public interest will not be
disserved by the issuance of the requested order.” Zirkle v. District of Columbia, 830 A.2d 1250,
1255 -1256 (D.C. 2003) (citing Wieck v. Sterenbuch, 350 A.2d 384, 387 (D.C. 1976)).
“The four factors have typically been evaluated on a ‘sliding scale.’” Davis v. Pension
Benefit Guar. Corp., 571 F.3d 1288, 1291 (D.C. Cir. 2009). Under this sliding scale, “[i]f the
movant makes an unusually strong showing on one of the factors, then it does not necessarily
have to make as strong a showing on another factor.” Id. at 1291-92. “It is particularly important
for the [movant] to demonstrate a substantial likelihood of success on the merits.” Barton v.
District of Columbia, 131 F. Supp. 2d 236, 242 (D.D.C. 2001) (citing Benten v. Kessler, 505
U.S. 1084, 1085 (1992)). However, demonstrating success on the merits does not require a
“mathematical probability of success on the merits.” See In re Antioch Univ., 418 A.2d 105, 110
(D.C. 1980) (citations omitted). Nor does it “require a showing of success with absolute
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certainty." Baker v. Socialist People's Libyan Arab Jamahirya, 810 F. Supp. 2d 90, 97 (D.D.C.
2011) (citation omitted) (discussing a motion for stay while on appeal, which requires the same
four-part analysis as is done when considering a motion for preliminary injunction). Under the
“sliding scale” analysis applied by the state and federal courts in the District of Columbia, “[i]f
the movant makes an unusually strong showing on one of the factors, then it does not necessarily
have to make as strong a showing on another factor.” Davis v. Pension Benefit Guar. Corp., 571
F.3d 1288, 1291-92, 387 U.S. App. D.C. 205 (D.C. Cir. 2009) (internal quotation marks and
citations omitted). Plaintiffs in this case, however, satisfy all four factors.
B.
Plaintiffs Are Likely to Succeed on the Merits Because Defendants’
Retaliatory Suspension of Plaintiffs’ Membership Was a Breach of Contract
Plaintiffs are likely to prevail on their claim that Defendants breached their contractual
duties when they suspended Plaintiffs’ membership in retaliation for bringing this suit. “To
prevail on a claim of breach of contract, a party must establish (1) a valid contract between the
parties; (2) an obligation or duty arising out of the contract; (3) a breach of that duty; and (4)
damages caused by breach.” Tsintolas Realty Co. V. Mendez, 984, A.2d 181, 187 (D.C. 2009).
Each of these elements is satisfied.
1.
The Parties Have a Contract
The Court of Appeals has already established the existence of a valid contract between
the parties in this case. As this Court has explained, “the Court of Appeals has explicitly
indicated, in the context of this case” that “the formal Bylaws of an organization are to be
construed as a contractual agreement between the organization and its members since the
continuing relationship between the organization and its members manifests an implicit
agreement by all parties concerned to abide by the Bylaws.” Order Mot. Dismiss at 10; Daley
26, A.3d at 731. Accordingly, this Court ruled: “To the extent that Defendants dispute that the
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AKA Constitution and Bylaws constitute a binding agreement between the parties, the law of the
case doctrine bars consideration of this issue.” Order Mot. Dismiss at 10. With the existence of
a valid contract between the parties established, we turn next to the question of which duties
arising out of this contract are implicated by this Motion.
2.
Defendants Have a Duty To (1) Penalize Sorors Only When They
Have Violated AKA’s Constitution and Bylaws and (2) Adhere to the
Appeals Process
Several different provisions under Article VI of AKA’s Bylaws bear on Defendants’
wrongful suspension of Plaintiffs’ AKA membership:
(a) Justification for Penalties
The justification for disciplinary action is provided in Article VI, section 1, which states:
“Each individual member” must “comply, in good faith, with all provisions of the Constitution
and Bylaws” of AKA and “[p]enalties or sanctions shall be imposed when an individual member
or chapter violates her/their obligations under the Constitution and Bylaws.” “The Regional
Director shall have the authority to determine whether an individual member . . . violation has
occurred and to impose an appropriate penalty, subject to the approval of the Supreme Basileus.”
Art. VI, sec. 2. “The penalties for violation of the Constitution and Bylaws of [AKA] by an
individual member . . . may include: a) withdrawal of individual privileges, b) suspension, c)
expulsion . . . [or] fines.” Art. VI, sec. 3. While the Regional Director and Supreme Basileus
may have some enforcement discretion under the Bylaws, it is clear that they may not impose
penalties for anything less than a “violation of the Constitution and Bylaws.” To do otherwise
would itself be a violation of the Bylaws. See id.
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(b)
Withdrawal & Suspension
Two forms of penalties have been imposed on Plaintiffs: withdrawal of individual
privileges and suspension. “Withdrawal of individual privileges may include . . . forfeiture of
the right to vote in chapter meetings, hold office, participate in or attend social affairs of the
chapter or officially represent the chapter.” Art. VI, sec. 4. This penalty “shall be in force until
the Regional Director determines that the cause(s) for the penalty no longer exist,” id, but “for a
period not to exceed twelve (12) months” Art. VI, sec. 3(a). “A member found responsible for
circulating any unauthorized communication in the name of [AKA] shall be subject to this
penalty for not less than ninety (90) days.” Art. VI, sec. 4.3
The penalty of “[s]uspension of an individual member shall disqualify the individual
from participation in the sorority and all sorority activities for the period of the suspension.” Art.
VI, sec. 8. This penalty “shall be imposed for a period not less than twelve (12) months or more
than five (5) years.” Article VI, section 3b.
(c) Appeal Process
Article VI, section 15 sets forth the appeal process for sorors subjected to penalties. “If
the decision rendered by the Supreme Basileus is unsatisfactory to the grievant, the grievant may
appeal in writing to the Directorate through the Supreme Basileus” who “will schedule a hearing
with the Directorate at the earliest appropriate time. Art. VI Section 15(b). “The soror/chapter
shall be kept informed, in writing, regarding the stages of the appeal.” Article VI, section 15(e).
And, if an appeal is successful, or “when the time specified in the Bylaws has expired” a
3
Only Plaintiff Daley was subjected to this penalty. Her individual privileges were withdrawn in November 2007.
Immediately after the initiation of this lawsuit in June 2009, Plaintiff Daley, along with the other Plaintiffs, was
suspended.
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“member subject to withdrawal of chapter or individual privileges shall be restored to good
standing.” Art. VI, sec. 16.
3.
Defendants’ Breached Their Duty to (1) Penalize Sorors Only When
They Have Violated AKA’s Bylaws and (2) Adhere to the Appeals
Process
Defendant AKA, through its officers, and particularly former Supreme Basileus,
Defendant McKinzie, breached their duties under Article VI in two respects. First, they ordered
the withdrawal of privileges and the suspension of Plaintiffs for reasons that no objective
observer could consider a “violation of the Constitution and Bylaws,” per Art. VI, sec. 3.
Second, they have deliberately denied Plaintiffs the full benefit of the appeals process to which
they are entitled under Art. VI, sec. 15. In doing so, Defendants have themselves failed to
“comply, in good faith, with all provisions of the Constitution and Bylaws.” Art. VI, sec. 1.
Indeed, it is clear that Defendants acted in bad faith by retaliating against Plaintiffs for their
efforts, particularly the filing of this lawsuit, to challenge and ultimately remedy AKA’s gross
mismanagement. Sec. Am. Compl. ¶¶ 160-176.
(a) Plaintiffs Did Not Violate AKA’s Bylaws
AKA provided two rationales for suspending Plaintiffs’ membership.4 Using the
suspension letter of August 3, 2009 sent to Plaintiff Carol P. Ray as a representative example
(attached with related correspondence as Exhibit B), Defendant Evelyn Sample-Oates, then
serving as North Atlantic Regional Director, stated that Ms. Ray was being suspended (1) for
4
While Plaintiffs focus here on the fact that Plaintiffs were wrongfully suspended, it should be noted that
Defendants clearly violated AKA Bylaws, Art. VI, sec. 3(a) by prolonging the period of Plaintiff Daley’s
withdrawal of privileges way beyond the 12 month limit. In fact, Ms. Daley’s privileges were withdrawn for
approximately 21 months (November 2007 – August 2009), just after the filing of this suit, at which time she was
suspended.
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violating the prohibition against “circulat[ing] letters, telegrams, petitions, or email messages
without prior approval”—namely, “unauthorized electronic communications on the website
www.friendsoftheweepingivy.com”; and (2) for “maintaining litigation against the Sorority
without having first exhausted her options under the Sorority’s established policies and
procedures.” See also Suspension Correspondence of Plaintiff Joy Daley (Exhibit C).
The first justification for suspension is false on its face. The prohibition referred to,
when read in full, states that: “A member found responsible for circulating any unauthorized
communication in the name of Alpha Kappa Alpha Incorporated, shall be subject to this penalty
for not less than ninety (90) days.” Art. VI, sec. 4 (emphasis added). In the suspension letter,
however, Defendant Sample-Oates conveniently edited out the clause “in the name of [AKA]”
that makes this rule obviously inapplicable to Plaintiffs. Setting aside the fact that Plaintiffs did
not create or maintain the website referred to, there can be no dispute about the fact that this
website does not purport to do anything “in the name of [AKA].” The website does not contain
any text, logos or trademarks, that is in any way suggestive of an affiliation with AKA. To the
contrary, the website makes clear that it is the product of “Friends of the Weeping Ivy, LLC . . . a
limited liability company committed to investigate and clean up alleged financial improprieties”
at AKA.5 Therefore, regardless of any allegation Defendants may make with regard to
associations between Plaintiffs and the website, the claim that Plaintiffs circulated unauthorized
communications in the name of AKA is patently false and does not constitute a violation of
AKA’s Bylaws under Article VI. Indeed, that Plaintiffs’ suspension expressly prohibited them
from utilizing AKA procedures to address their concerns only underscores that any post-
5
http://www.friendsoftheweepingivy.com/About.aspx
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suspension actions taken by them were not “in the name of AKA.” For Defendants to argue
otherwise is beyond disingenuous. See Sec. Am. Compl. ¶ 160.
The second justification for suspension is an equally specious and transparent pretense
for retaliation. Defendant Sample-Oates states in her suspension letter to Ms. Ray that “it has
long been the policy of the Sorority to suspend any member who initiates and maintains
litigation against the Sorority without having first exhausted her options under the Sorority’s
established policies and procedures.” The suspension letter does not cite to any provision of the
AKA Constitution, Bylaws, or even the Manual of Standard Procedures, because no such policy
was in existence. This fact is supported, not only by the absence of any written rule or policy
statement in effect at that time, but also by (1) the Declaration of Julia Brogdon Purnell, the
senior Former Supreme Basileus (Exhibit D), whose decades of membership and leadership in
AKA put her in the best position to testify as to what “has long been the policy of the Sorority”;
and (2) the substantial list of sorors who have brought suit against AKA without having their
membership suspended. This list includes Defendant McKinzie who sued AKA in 2006
regarding the withdrawal of her privileges (No. 2006-CH-04882, Cir. Ct. Cook Cty), Jacquelyn
Young, former Deputy Executive Director (No. 1999-L-011888, Cir. Ct. Cook Cty), and Julia
Brogdon Purnell, former Supreme Basileus (No. 2010-CH-10972, Cir. Ct. Cook Cty).
Defendants undoubtedly will cite the AKA Directorate’s adoption of a litigation policy in
July 2009 as justification for its retaliatory conduct. However, the fact that this policy was
adopted immediately after Plaintiffs filed suit on June 20, 2009, only highlights the absence of
any such policy when ordering the suspensions (let alone a long-standing policy) and
demonstrates the extent to which Defendants have acted in bad faith by attempting to manipulate
the rules in their perceived self interest. It must also be noted that AKA’s Bylaws authorize the
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penalty of suspension only for violations of AKA’s Bylaws and Constitution—not policies
simply adopted by the Directorate without being incorporated into the Bylaws per the
amendment procedures in Art. XIII. In order to make AKA’s new litigation policy enforceable
through penalties, like suspension, the Bylaws must be amended as follows: First the policy must
be “circulated to chapters no later than April 30 proceding [sic] Boulé” and then, “at a regular
meeting of the Boulé,” it must obtain a favorable “two-thirds of the votes cast.” Art. XIII, sec.
1(c), No such measures have been taken to amend the Bylaws. As a consequence, even if the
Directorate’s adoption of a policy in July 2009 could be applied ex post facto to the Plaintiffs in
this case (which Plaintiffs dispute), this policy has not been incorporated into the AKA
Constitution or Bylaws such that it can be enforced through suspension.
Nor can Defendants maintain any claim that Plaintiffs violated AKA Bylaws by failing to
exhaust certain internal procedural remedies. Again, no such precondition to filing suit is found
anywhere in AKA’s Bylaws. This explains, perhaps, the reason behind the fact—acknowledged
by this Court—that “Defendants have presented no evidence conclusively establishing Plaintiffs’
failure to comply” with “AKA’s internal appeal or dispute procedures.” Order Mot. Dismiss at
6. Indeed, they have presented no evidence whatsoever on this point. If any party has failed to
adhere to the operative procedures, the discussion below demonstrates that it has been the
Defendants.
(b) AKA Denied Plaintiffs the Full Appeals Process
In addition to the fact that Defendants breached AKA’s Bylaws by penalizing Plaintiffs
without proper cause under Art. VI, sec. 3, Defendants have also violated Art. VI, sec. 15(b) of
the Bylaws which states: “If the decision rendered by the Supreme Basileus is unsatisfactory to
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the grievant, the grievant may appeal in writing to the Directorate through the Supreme Basileus”
who “will schedule a hearing with the Directorate at the earliest appropriate time.” (emphasis
added). The Plaintiffs in this case submitted their written appeals years ago in accordance with
this provision, but no hearings have ever been scheduled. In the case of Plaintiff Ray, an appeal
letter was sent to Defendant and former Supreme Basileus, Barbara McKinzie, on October 14,
2009—some 30 months ago. Defendants cannot plausibly argue that “the earliest appropriate
time” for a hearing has not come and gone.
Nor can Defendants argue that the earliest appropriate time will be after resolution of this
case. Such a position begs the fundamental question of the appeal: whether the institution of this
litigation was, in the first instance, a proper cause for suspension or improper retaliation. In this
regard, it is important to note that many of Plaintiffs’ claims do not relate to their own
membership dispute with AKA, but rather with a host of financial improprieties and systemic
managerial failings—none of which must be decided by this Court in order to inform the
question before the Directorate as to whether Plaintiffs were properly suspended. Despite this
fact, Defendants have expressly stated their intent to delay this important disciplinary matter
until after this case is decided, see McKinzie Letter of July 6, 2010 (attached as part of Exhibit
C)—a decision that is not only fundamentally unfair to Plaintiffs, but also a violation of Art. VI,
sec. 15(b).
Defendants have, in fact, taken their unjustifiable connection of this litigation to
Plaintiffs’ membership privileges to shocking levels of bad faith. In a letter of July 6, 2010,
Defendant McKinzie wrote to Plaintiff Daley to state the following:
While the Directorate was prepared to hear the appeal of your suspension after the
D.C. Superior Court dismissed the suit you filed against them and the Sorority,
your pending appeal of that decision has made that impossible. In addition, you
should know that the Directorate has voted that a condition of any reinstatement
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be that you pay restitution in the amount of $59,727.18. This amount is one
eighth of the amount of legal fees incurred by the Sorority as a result of the Daley
lawsuit as of March 24, 2010. That amount may increase as the legal bills
continue to accumulate.
McKinzie Letter (July 6, 2010) (emphasis added) (attached as Exhibit C). This demand is a
shamelessly unethical attempt to coerce Plaintiffs into foregoing their legal rights—not as a good
faith settlement offer related to the parties’ substantive dispute—but as a quid pro quo that
purports to offer the due process rights Plaintiffs are already entitled to under AKA’s Bylaws in
exchange for the payment of large sums of money and, by implication, the “voluntary” dismissal
of the case against Defendants. Attempts such as this to compel people into paying money and
taking certain actions through the use of coercion falls squarely within the definition of extortion.
Moreover, the Directorate’s demand makes two things crystal clear: First, Defendants
have no intension of scheduling Plaintiffs’ appellate hearings, thereby violating Art. VI, sec.
15(b). And second, Plaintiffs could not get a fair hearing even if one had been scheduled. The
Directorate, as an interested party in the outcome of this suit, cannot objectively review the
question of whether a suit brought against them by Plaintiffs warrants suspension. If the
Directors of AKA were endowed with the integrity their office demands, they would delegate
their authority to review Plaintiffs’ appeal to a disinterested panel of AKA sorors. There is,
however, no reason to believe this will happen. Plaintiffs have no choice, therefore, but to seek
injunctive relief from this Court. Without a preliminary injunction, Plaintiffs will remain
powerless and without standing within their sorority to invoke the procedures of the Bylaws and
Constitution both for their own benefit and for the purpose of addressing the improprieties that
jeopardize AKA’s very existence.
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4.
Plaintiffs Have Been Damaged
There can be no serious dispute about the fact that Plaintiffs have been damaged by
AKA’s breach of the Constitution and Bylaws. Their suspension disqualifies them from
participation in the sorority and all sorority activities for the period of the suspension. Art. VI,
sec. 8. By the wrongful application of this penalty, Plaintiffs have been estranged from the
organization they have served and the sorors they love. Plaintiffs are further injured by their
inability as suspended members to further the cause of restoring AKA back to good and legal
governance. They are thus substantially injured by Defendants’ continued breach of AKA’s
Constitution and Bylaws.
C.
Plaintiffs Are Likely to Succeed on the Merits Because Defendants’
Retaliatory Suspension of Plaintiffs’ Membership Was a Breach of Fiduciary
Duty
Plaintiffs also are likely to succeed on their claim that the Defendants breached their
fiduciary duty to Plaintiffs and to AKA when they suspended Plaintiffs in bad faith and in
furtherance of Defendants’ personal interests, rather than in the interest of the organization. To
prove their claim for breach of fiduciary duty, Plaintiffs must show that (1) Defendants owed
Plaintiffs a fiduciary duty; (2) Defendants breached that duty; and (3) if they are seeking
compensatory damages, that the breach proximately caused Plaintiffs' injury. Paul v. Judicial
Watch, Inc., 543 F. Supp. 2d 1, 5-6 (D.D.C. 2008) (applying District of Columbia law).
A fiduciary relation exists when one party “is under a duty to act for or give advice for
the benefit of another upon matters within the scope of the relation.” Church of Scientology Int'l
v. Eli Lilly & Co., 848 F. Supp. 1018, 1028 (D.D.C. 1994) (quoting Restatement (Second) Torts
§ 874, comment a). Officers of a non-profit member organization owe the same fiduciary duties
as directors of stock corporations. Wisconsin Ave. Assocs., Inc. v. 2720 Wisconsin Ave. Coop.
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Ass'n, 441 A.2d 956, 963 (D.C. 1982). As such, the Defendants “were required to ‘act in the
utmost good faith.’” Armenian Genocide Museum & Mem., Inc. v. Cafesjian Family Found.,
Inc., 595 F. Supp. 2d 110, 116 (D.D.C. 2009). Corporate officers and directors owe “an
undivided and unselfish loyalty to the corporation” such that “there shall be no conflict between
duty and self-interest.” Guth v. Loft, 23 Del. Ch. 255, 5 A.2d 503, 510 (Del. 1939)). As this
Court in denying Defendants motion to dismiss Plaintiffs breach of fiduciary claims, “’directors’
of a corporation ‘owe[] the duties of a fiduciary to the corporation and to its members.’” Order
at 8 (quoting Willens v. 2720 Wisconsin Ave. Co-op Ass’n, Inc., 844 A.2d 1126, 1136 (D.C.
2004). It is settled, therefore, that the individual Defendants in this case, as AKA’s past and
present corporate officers, owed a fiduciary duty to Plaintiffs, as members of AKA, at the time
they were wrongfully suspended.
The actions detailed above in Section B constitute several breaches of Defendants’
fiduciary duties. First, Defendants acted in bad faith by abusing the disciplinary process to
retaliate against whistleblowers. This is evidenced by, among other things, the Directorate’s
attempt to change AKA’s policy and retroactively apply it to Plaintiffs. Defendants also
disingenuously characterize their new litigation policy as a long standing one, though this is
clearly a fabrication on their part. See Purnell Declaration ¶¶ 28-31. Even if such a policy were
in place at the time Plaintiffs filed this suit, and even if it were part of the Constitution and
Bylaws such that it was enforceable through suspension, Defendants would still be applying the
policy in an arbitrary and self-serving way as evidenced by the fact that Defendant McKinzie and
other sorors were not suspended when they brought suit against AKA. Such acts of bad faith are
themselves breaches of the fiduciary duty.
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Second, in order to shield Defendant McKinzie and others from embarrassment and, most
importantly, the grave consequences of her many acts of fraud and corruption (many of which
are detailed in the Audit Report, Exhibit A), Defendants have knowingly misinterpreted and
misapplied the prohibition against unauthorized use of AKA’s name (see Art. VI, sec. 4) in order
to create a new disciplinary weapon used to stifle dissent and suppress the AKA membership’s
free expression whenever it conflicts with the interests of those in authority. See Exhibit B and C
(deliberately misconstruing AKA’s bylaws to justify suspension). Under any standard, this kind
of corporate governance constitutes a breach of fiduciary duty. See Armenian Genocide Museum
& Mem., Inc., 595 F. Supp. 2d at 116; Wisconsin Ave. Assocs., Inc., 441 A.2d at 963.
Third, Defendant McKinzie and others unjustifiably denied Plaintiffs their rights to a
hearing when they appealed their suspension in accordance with AKA’s Bylaws. The right to “a
hearing with the Directorate at the earliest appropriate time” is guaranteed under Art. VI, sec.
15(b). Years have passed and no hearing has been scheduled for any of the eight Plaintiffs. This
is yet another act (or omission) of bad faith, intended to punish Plaintiffs as whistleblowers and
to protect Defendant McKinzie and others who “contributed significantly to the misappropriation
of AKA assets through collusive efforts on the part of the former Supreme Basileus [Barbara
McKinzie and] . . . some employees.” See Auditors’ Report at 31 (Exhibit A).
Because the evidence shows that Defendants breached their fiduciary duty to not suspend
Plaintiffs without due process and to not deny Plaintiffs their rightful appeals process, Plaintiffs
are likely to succeed on this claim.
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D.
Plaintiffs Will Suffer Irreparable Harm if They Are Not Able to Participate
in the 2012 Boulé, as Full Members, to Bring About Much Needed Reforms
In addition to showing a likelihood of success on the merits, Plaintiffs can demonstrate
that they are “in danger of suffering irreparable harm” if they do not obtain preliminary
injunctive relief. Zirkle v. District of Columbia, 830 A.2d 1250, 1255 -1256 (D.C. 2003).
Specifically, Plaintiffs will be irreparably harmed if their membership is not immediately
reinstated, both because continued suspension will perpetuate the wrongs visited upon them by
Defendants, and also because it will deny Plaintiffs the opportunity to participate in the
upcoming 2012 Boulé. It is at the Boulé, where the membership meets every two years, that the
sorority’s important business is considered and voted upon. See AKA Const. Art. IV. As stated
above, the primary goal in bringing this legal action is to help end the corruption and negligence
that have characterized the AKA Directorate in recent years. In fact, Plaintiffs’ Complaint is so
heavily focused on issues of reforming AKA’s governance, that Defendants have attempted
(albeit, erroneously) to equate Plaintiffs suit with a derivative action. See Defs’ Mots. Dismiss.
Plaintiffs, however, cannot work to improve their beloved sorority from the outside, nor should
they have to, given their loyalty and commitment to the organization, the rights afforded them
under the Constitution and Bylaws as members of the organization, and the fact that Plaintiffs
have violated no provision of the Constitution or Bylaws.
At this crucial juncture, with the management of the sorority in turmoil and the sorority’s
legacy in jeopardy, it is very important to Plaintiffs, and to the sorority, that the reform effort
they have invested so much in be taken to the membership in July. If such efforts are delayed by
two years or possibly four, the damage to both Plaintiffs and AKA will be irreparable.
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E.
The Balance of Harm Favors Plaintiffs’ Reinstatement
“Before granting a preliminary injunction, the trial court must determine that more harm
will result to the movant from the denial of the injunction than will result to the nonmoving party
from its grant.” District of Columbia v. Greene, 806 A.2d 216, 223 (D.C. 2002) (quotations
omitted). As stated above, Plaintiffs are harmed in their current state of suspension both by
virtue of being estranged from their sorors, and by their inability to help improve the governance
of AKA. In the absence of the injunctive relief sought here, those harms will be perpetuated and,
if such relief does not come in time for the 2012 Boulé, the harm will be irreparable. By contrast,
Defendants will suffer no harm if Plaintiffs, who were sorors in good standing for many years,
have their membership privileges restored. The balance of harms, therefore, clearly favors an
injunction reinstating Plaintiffs’ membership.
F.
Enabling Plaintiffs to Help Restore AKA to Good and Lawful Governance is
in the Public Interest
Finally, it is clear that “the public interest will not be disserved by the issuance of the
requested order.” Zirkle v. District of Columbia, 830 A.2d 1250, 1255 -1256 (D.C. 2003). The
general proposition that AKA has suffered a crisis of leadership, requiring reforms can hardly be
denied—even by Defendants. In response to the 2010 audit (see Audit Report attached at
Exhibit A), AKA drafted a Corrective Action Plan that acknowledges the insufficiency of
management and oversight detailed in each of eleven categories of “Significant Deficiencies”
covered in the audit report and raised no objections to any of the specific findings contained
therein. Audit Report at 44-48. Some of the financial improprieties uncovered in the Audit
Report have also attracted the attention of the Internal Revenue Service, which has audited AKA,
and other state and federal authorities. It is evident, therefore, that any efforts aimed at
improving AKA’s governance are in the public interest. And it follows that enabling Plaintiffs to
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help restore AKA to good and lawful governance is in the public interest. That is precisely what
Plaintiffs will seek to do if their membership privileges are reinstated in time for the upcoming
2012 Boulé.
CONCLUSION
For the reasons set forth above, Plaintiffs request that the Court enter an Order granting
Plaintiffs’ Motion for Preliminary Injunction, enjoining Defendant AKA from wrongfully
suspending Plaintiffs’ membership in AKA and ordering it to reinstate Plaintiffs’ full
membership privileges pending resolution of the asserted claims.
Respectfully Submitted,
/s/ A. Scott Bolden
A. Scott Bolden, D.C. Bar No. 428758
Tyree P. Jones, D.C. Bar No. 984586
Jeffrey Orenstein D.C. Bar No. 501353
Reed Smith LLP
1301 K Street, NW - Suite 1100
Washington, D.C. 20005
(202) 414-9266
[email protected]
Counsel for Plaintiffs
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 26th day of April 2012, a copy of the foregoing
Memorandum of Points and Authorities in Support of Plaintiffs’ Motion for Preliminary
Injunction and Proposed Order were electronically served on:
Aaron Handleman, Esq.
Shannon Chaudhry, Esq.
Eccleston and Wolf, P.C.
1629 K Street, N.W.
Davis Building, Suite 260
Washington, D.C. 20006
Counsel for Defendants
Dale A. Cooter, Esq.
Cooter, Mangold, Deckelbaum & Karas, L.L.P.
5301 Wisconsin Avenue, N.W.
Suite 500
Washington, D.C. 20015
Counsel for Defendant, Barbara A. McKinzie, CPA
/s/ A. Scott Bolden
A. Scott Bolden, D.C. Bar No. 428758
Reed Smith LLP
1301 K Street, N.W. - Suite 1100
Washington, D.C. 20005
(202) 414-9266
[email protected]
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SUPERIOR COURT OF THE DISTRICT OF COLUMBIA
CIVIL DIVISION
__________________________________________
)
JOY ELAINE DALEY, ET AL.
)
)
Case No: 2009 CA 004456 B
Plaintiffs,
)
Judge Todd E. Edelman
)
Civil Cal 1
v.
)
)
Next Event: Early Mediation
)
May 9, 2012
ALPHA KAPPA ALPHA SORORITY, INC.
)
ET AL.
)
)
Defendants.
)
__________________________________________)
[PROPOSED] ORDER
Upon consideration of the pleadings, papers, and arguments of counsel, and with good
cause shown, Plaintiffs’ Motion for Preliminary Injunction pursuant to Rule 65 of the Superior
Court Rules of Civil Procedure is hereby GRANTED.
IT IS HEREBY ORDERED that Defendant Alpha Kappa Alpha Sorority, Inc. (“AKA”)
shall immediately restore, without any preconditions, the membership privileges of all of the
Plaintiffs who have had withdrawal of privileges and/or suspension by any one or all of the
Defendants in this case.
IT IS SO ORDERED.
Dated: _______________________
___________________________________
Judge of the Superior Court