Nonprofit directors, like those of for-profit companies, have limited liability for their corporate actions. This means that there are only certain people who can sue a nonprofit's director and only for certain reasons. Before you consider suing a nonprofit's board of directors, you should consult with an attorney who can evaluate your case and determine whether or not you are even entitled to bring a lawsuit. If you meet each of the requirements, you will be able to sue the director in the same way as you would sue anyone else.
Hire an attorney specializing in corporate law. Though nonprofits operate differently than for-profit companies, they are still incorporated entities and follow the same legal formalities. An experienced attorney can evaluate the merits of your case and will know best how to proceed.
Make sure that you have standing to bring the lawsuit. Not just anyone can sue a nonprofit's board of directors; you have to be a person who was individually hurt by the board's actions. Examples of individuals with standing to sue the board include insiders (such as employees); outsiders (third-parties with business relationships with the nonprofit organization); other directors; beneficiaries (people who benefit or are supposed to benefit from the nonprofit's service) and donors.
Determine your cause of action. Many decisions made by board members, even if actionable, are protected by the corporation's limited liability. To sue a board member, you must show that he acted beyond the scope of his duties. Possible causes of action include the publishing of defamatory statements (untrue, damaging statements against you personally); the violation of state reporting laws and wanton disregard of duties.
File your complaint (this is the name of the legal form you file to indicate your desire to initiate a lawsuit) in your state's trial court. If you do not have an attorney to assist you in this process, the court's clerk can help you to navigate the very specific state, county and city rules for filing a suit.
- Lawsuits, especially those against large corporations, can be very time consuming and expensive. If your issue is minor, you may have better results if you pursue private methods to resolve your dispute such as arbitration, mediation or negotiation.
- For many violations, your state's attorney general is the only person with standing to bring a lawsuit. If a lawyer you hire does not believe that you have a case, try consulting the attorney general's office and encourage him to bring a lawsuit on your behalf.
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