Former National Chair Nick Sarwark is organizing a derivative lawsuit against the Libertarian National Committee. A non-lawyer’s explanation from Editor Phillies of derivative lawsuits, also seen by stockholders against a board of directors. There are a group of people who legally run the organization, typically the board of directors, There are a group of people who in some sense own the organization, typically the stockholders or members (the latter group may include directors). The owners conclude that the actions of the board of directors are severely inconsistent with the interests of the owners. After satisfying a variety of conditions, a group of owners (I gather that the requisite number is 50, but do not assume that I am right) may file in court to have the Board of Directors removed and a new board installed. The following is the letter from Sarwark to National Party members:
Stop the Destruction of the Libertarian Party
Dear Friends,
The Libertarian Party is in pretty bad shape right now.
Angela McArdle and the rest of the Libertarian National Committee have been mismanaging party assets in breach of their fiduciary duties and requirements of the bylaws for their positions.
As a nonprofit membership contribution organized under D.C. law, the members of the Libertarian Party have rights to have the organization managed with appropriate care, loyalty, honesty, and basic standards of nonprofit management.
This right is not because of the government, it is because we who have joined the Libertarian Party agreed to rules and bylaws to govern our organization. When those rules are violated and the violators won’t stop, the courts are where the problem needs to be fixed.
Members of an organization are owed leaders who meet the basic fiduciary duties of a board member and/or officer and abide by the rules and bylaws voluntarily adopted by the members at convention. In short, members are owed competent leadership.
Competent leadership does not engage in corrupt self-dealing.
Competent leadership does not divert resources away from the LNC to competing organizations and political parties.
Competent leadership does not cut staffing levels in core areas of operations without any plan to engage in an election year.
Competent leadership does not drive the finances into insolvency by offending donors and members without any strategy to replace those donors and members.
If you are a sustaining member of the Libertarian Party and would like to join a derivative lawsuit to enforce our rights as members to have competent leadership, enter your contact information in the form below and I will get it to the lead plaintiff.
Together, we will rebuild what has been broken.
Yours in liberty,
Nicholas Sarwark
Chair Emeritus, Libertarian National Committee (2014-2020)
To join the suit or elsewise support it
If that does not work for you:
https://docs.google.com/forms/d/e/1FAIpQLSf08OTvOoFL1oogkipo0qAY4xnIBQ1bmXo0Hwy7jqIqPkhXwA/viewform?vc=0&c=0&w=1&flr=0
Interesting that violations of the bylaws are alleged,. I am as of yet unaware of any appeals being filed to the party’s judicial committee in regard to such matters. I don’t see how an alleged violation of the bylaws can have any standing without that
If an action of your organization crosses legal lines, you are entirely entitled to appeal to the law rather than to the internals of the organization.
In my opinion the political process should be used to fix these problems, just as it should have been used previously by the Mises Caucus waiting for the next annual (or biennial) state conventions instead of removing people halfway through their terms and calling special conventions for do-overs when they lost. I may not have voted for or supported particular candidates and I may not like some of the decisions they made while in office, but they won fair and square. I hope people who care about the future of the LP will show up en masse for the national convention and elect good fiduciaries to the LNC.
Convention will be held in three months. The voice of the membership will be heard as to it desires for leadership. That is one of the reasons for the convention.
For the curious: The zeroth step in the process is the lead plaintiff, other plaintiffs, and attorneys get their ducks in a row. The next step is that the lead plaintiff and attorneys send the board a demand letter saying what needs to be fixed. The Board then gets to react, by sending a response letter (perhaps including proposed courses of action and timelines). The Board must also notify their Directors and Officers insurance company of the situation and take several other needed legal actions. Perhaps matters are solved. Otherwise, the complainers may choose to advance to litigation in the (iirc) DC courts.
Getting 50 people to show up at the LPNH convention any of the past several years would have been more than enough to win.
This is a derivative suit regarding the Libertarian National Committee.
Several commenters are assuming here that Nick will be the lead plaintiff, as opposed to being an organizer. That assumption is not irrational, but that does not make it correct.
My role is limited to asking people if they would like to help.
That may be enough. 🙂
Looking at the Cornell Law School site, Sarwark may have a problem with standing. Being a member of the Libertarian Party does not give you ownership of even part of the party; it is not like he is a stockholder.
Second, Sarwark will open himself t a possible counter suit, where he would be financially liable. It would also him up to discovery. I would be quite interested in that, especially to any involvement with trying to influence the actions of members in affiliates.
Every accusation is a confession.
meh. should have been anyone but nick.
Who would you recommend?
I don’t know…. Could it be Satan?
I can’t imagine any ruling other than to settle it at the convention, it being this close, and if the same leadership is elected, then that’s what the membership must want.
There are more things in the world than can exist in any one person’s imagination.
If one of the issues is the LNC bringing lawsuit against an organization that 2/3 of membership recognize in order to ensure that delegates are sent by an organization that only 1/3 of the membership recognized, “will of the delegates” could become an issue as a defense.