Because not all the members of the Bedford Genealogical Society Inc received notice of a planned incorporation, and of the 22 percent of the members who attended the meeting, three voted against incorporation, plaintiff BGSI has failed to show that it is the successor in interest to the unincorporated Bedford Genealogical Society, and it does not have standing to sue defendant Bedford Museum and Genealogical Library for trademark infringement under the Lanham Act, says a Lynchburg U.S. District Court.
Plaintiff filed a complaint alleging unfair competition/false designation of origin and trademark infringement under the Lanham Act, as well as state law claims for unfair competition and conversion.
The burden is on plaintiff BGSI to establish that it is the successor in interest to the Society. Because BGSI cannot satisfy this burden, it cannot satisfy the initial “injury in fact” requirement for Article III standing. The unilateral acts of certain Society members – without notice to or the knowledge or consent of the entire membership – in forming a corporation of the same name did not transfer the assets or members of the unincorporated association to the corporation. The attempt to incorporate the Society as “BGSI” was invalid because it was done without notice to and the unanimous consent o the Society’s membership, These material jurisdictional facts are not in dispute. The Society’s full membership never received any notice of the vote to incorporate; only 33 of 148 members (22 percent) attended the Feb. 14, 2009 meeting where this vote occurred; and 3 of the 33 members in attendance voted against incorporation. While BGSI appears to have incorporated, there is nothing to support the conclusion that the Society no longer exists or that BGSI has a valid claim to the Society and its assets.
Neither the governing documents of the Society nor any applicable statutes provide for incorporation of the Society with less than unanimous consent of all its members, and thus unanimous consent was required. It is clear BGSI’s attempt to incorporate the Society was invalid. BGSI raises no serious dispute that it failed to notify all the members of the Society before forming BGSI and conducting the incorporation vote and subsequent ratification motion, nor that it failed to obtain unanimous consent. Instead, the five members of the Society who became BGSI’s directors unilaterally made the decision to incorporate, without consent of, or even notice to, the full membership of the Society.
Complaint dismissed for lack of standing.
Bedford Genealogical Society Inc. v. Bedford Museum and Genealogical Library (Moon, J.) No. 6:09cv00060, May 21, 2010; USDC at Lynchburg, Va. VLW 010-3-279, 13 pp.