OverDrive, Inc. v. The Open eBook Forum

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DISTRICT OF COLUMBIA COURT OF APPEALS
No. 20-CV-0746
OVERDRIVE, INC., APPELLANT,
V.
THE OPEN EBOOK FORUM, APPELLEE.
Appeal from the Superior Court
of the District of Columbia
(2016-CA-007768-B)
(Hon. José M. López, Trial Judge)
(Argued March 29, 2022 Decided January 26, 2023)
Andrew G. Fiorella, with whom Erin L. Hamilton and Martin J. Amundson
were on the brief, for appellant.
David G. Ross, with whom Benjamin Takis was on the brief, for appellee.
Before MCLEESE and DEAHL, Associate Judges, and GLICKMAN, ∗ Senior
Judge.
DEAHL, Associate Judge: The Open eBook Forum, doing business as
International Digital Publishing Forum (IDPF), is a nonprofit corporation focused
∗
Judge Glickman was an Associate Judge of the court at the time of argument.
He began his service as a Senior Judge on December 21, 2022.
2
on advancing electronic books and digital publishing. IDPF is the developer of
EPUB, a popular file format for e-books. About a decade ago, IDPF’s board of
directors—faced with precarious finances, declining membership, and competitive
threats—determined the organization’s long-term viability was in jeopardy. After
considering a variety of options, the board negotiated a merger with the World Wide
Web Consortium (W3C), a much larger organization with the broader purpose of
establishing standards for the World Wide Web to ensure its long-term growth.
OverDrive, Inc., a member of IDPF, opposed the merger and lobbied against
it. When IDPF’s board nonetheless approved the merger and put it to a membership
vote, OverDrive petitioned the Superior Court to preclude that vote and—when that
failed and IDPF’s membership approved the merger—to block the merger until a
new vote could be held. OverDrive brought its petition under D.C. Code § 29-
401.22(a), which permits members of nonprofit corporations to challenge corporate
actions in certain circumstances. But the court’s review authority under that
provision does not extend to instances where the “nonprofit corporation has provided
in its articles of incorporation or bylaws for a means of resolving a challenge to a
corporate action.” Id. § 29-401.22(c). The Superior Court found that to be the case
here, as IDPF’s bylaws permitted any group of fourteen members—equal to the
number of directors on the board—to petition the board for a rescission vote, which
3
would trigger a new vote of the full membership. Because IDPF’s bylaws provided
a mechanism for OverDrive to raise an internal challenge to the merger, the trial
court concluded that its own review under § 29-401.22(a) was limited to ensuring
that the merger complied with IDPF’s articles and bylaws. It did, in the court’s view.
In this appeal, OverDrive argues that (1) this court already rejected the trial
court’s reasoning when, in a prior appeal, we concluded that § 29-401.22(c) is not a
jurisdiction-stripping statute; (2) the provision in IDPF’s bylaws permitting a
challenge to a corporate action is too ineffectual to strip the Superior Court of its
authority to entertain OverDrive’s challenge under § 29-401.22(a); (3) even if the
trial court’s statutory authority was limited to reviewing only the merger’s
compliance with IDPF’s bylaws and articles, as the trial court reasoned, this merger
was non-compliant because those documents required that any transfer of IDPF
assets be to organizations that “engage in activities substantially similar to those of”
IDPF, and W3C does not meet that description; and (4) putting § 29-401.22(a) aside,
the trial court also had freestanding equitable authority to block the merger and it
should have done so for a host of reasons. We disagree as to each point and affirm.
4
I.
IDPF is a nonprofit corporation, formed in the District of Columbia, dedicated
to developing and promoting digital publishing. Its members include other nonprofit
organizations, educational institutions, publishers, and technology companies. IDPF
was formerly known as the Open eBook Forum, and its original articles of
incorporation (adopted in 2000) stated that its purposes were to “create and maintain
standards and promote the successful adoption of electronic books; to provide a
forum for the discussion of issues and technologies related to electronic books; [and
to] develop, publish, and maintain common specifications relating to electronic
books.” About five years after it was incorporated, IDPF modestly expanded that
mission statement to focus on digital publishing more generally, rather than just e-
books. IDPF’s most important contribution to digital publishing is the EPUB file
format, the “most widely supported non-proprietary” e-book standard in the world.
EPUB “allows publishers to produce and send a single digital publication file”
providing “consumers interoperability between software/hardware” platforms for
digital books and other publications.
OverDrive is a leading platform for e-books, audiobooks, and other digital
media. It was among IDPF’s members, of which there were about 130 in good
5
standing at the time of the relevant membership vote discussed below. OverDrive’s
founder and CEO is Steven Potash, who also helped found IDPF and served as one
of its board members during its first decade of existence.
Bill McCoy became IDPF’s executive director in 2011. McCoy grew
concerned about IDPF’s finances and declining membership over the years, and
during his tenure he and the board considered strategies to ensure IDPF’s long-term
viability. By the spring of 2016, he and other directors believed the best option
available was to merge with W3C, a joint collaborative project between the
Massachusetts Institute of Technology and three other educational institutions.
W3C and its member organizations “work together to develop Web standards” and
seek “to lead the World Wide Web to its full potential.” While W3C was not focused
exclusively on e-books or digital publishing, it had a digital publishing interest group
and collaborated with IDPF to adopt and implement digital publishing standards.
IDPF’s board was concerned that if it did not merge with W3C it risked getting
pushed out of the digital publishing space altogether by larger and better-resourced
competitors (including W3C itself). In April 2016, IDPF’s board notified its
membership of the proposed merger and solicited input. The following month, IDPF
issued a public notice of the proposed merger and held a meeting in Chicago, open
to both members and the public, where the proposed merger was discussed.
6
The merger negotiations between IDPF and W3C continued throughout the
spring and summer of 2016. By late September 2016, the organizations agreed to a
memorandum of understanding under which the merger would take place in two key
steps: (1) W3C would acquire IDPF’s members under a so-called “membership
exchange,” see D.C. Code § 29-409.03, and (2) W3C would acquire IDPF’s assets,
including EPUB, in an asset transfer, see id. § 29-410.02. W3C also agreed to hire
McCoy as an independent contractor as part of the deal, with a base compensation
of $125,000 per year plus an annual bonus capped at $90,000 per year (McCoy’s
IDPF salary was $165,000). After the membership exchange and asset transfer were
completed, IDPF would dissolve. The board then sent its membership a notice of
intent to approve the merger, which included a draft plan for the merger and
disclosed that W3C would hire McCoy as part of the deal, in September 2016. The
notice explained that if the board approved the merger as anticipated, it would then
go to a vote of the full membership.
OverDrive opposed the merger and tried to thwart it. Its position was that the
proposed merger was a “self-serving, poorly conceived, and improperly executed”
deal which would lead to IDPF’s “self-immolation” and “destroy” the organization.
About a week after the board sent the draft plan out to IDPF’s members, an attorney
for OverDrive sent a six-page letter to McCoy posing questions about the
7
transaction, requesting documents from the board, and threatening litigation.
OverDrive’s view was that IDPF was giving away EPUB to W3C and receiving
nothing in return, and it was also violating IDPF’s articles of incorporation, which
provided that IDPF could transfer its assets only to entities “engaged in activities
substantially similar” to IDPF’s, a criterion it asserted that W3C did not meet. Two
days later, Potash (OverDrive’s CEO) asked to present the board with an alternative
business plan to grow membership, solicit funding, and collaborate with other digital
publishing standards organizations. The board granted Potash’s request and heard
his presentation later that week, but nonetheless approved the merger with W3C and
put the matter to a vote of its full membership. The three-week voting period for the
members in good standing lasted from October 14 to November 4, 2016.
Potash contacted IDPF’s President, George Kerscher, and requested the email
addresses for all primary representatives of IDPF’s member organizations, i.e., the
individuals with authority to vote on behalf of those organizations. Kerscher agreed
to provide a list of IDPF’s member organizations and their general mailing
addresses, but indicated that he was under no obligation to provide the primary
representatives’ names or email addresses to Potash. Kerscher nonetheless offered
to provide that information if Potash agreed to forgo any litigation regarding the
proposed merger, so that the merger would be “in the hands of all of IDPF’s
8
members to decide on the merits.” Potash rejected that offer and did not receive the
email addresses of the primary representatives.
Aside from contacting Kerscher, Potash made little effort to identify IDPF’s
primary representatives on his own. OverDrive also did not make any push to
rescind the board’s approval of the merger; IDPF’s bylaws permitted any group of
members equal in number to the board of directors (fourteen) to call for a rescission
vote, with a simple majority of a quorum then needed to rescind the board’s action.
Instead, OverDrive filed suit in D.C. Superior Court, invoking the court’s authority
under D.C. Code § 29-401.22 to enjoin the membership vote because the board’s
approval of the merger was “an improper nonprofit corporate action.” The court
declined to enjoin the vote, which proceeded as planned.
Of IDPF’s roughly 130 member organizations in good standing, 81 cast votes
for or against the merger, with 71 in favor and 10 (including OverDrive) against.
That was substantially more than enough for the “simple majority of a quorum”
necessary to approve the merger. Within months of the membership’s approval,
IDPF and W3C had executed a “Membership Exchange and Asset Transfer
Agreement,” but the two organizations agreed to extend the deadline for IDPF’s
9
dissolution and to clarify the terms of an interim intellectual property license
concerning W3C’s use and development of EPUB.
Meanwhile, OverDrive’s suit continued in Superior Court. The court initially
concluded that it lacked subject matter jurisdiction over the suit. While the court
recognized that § 29-401.22(a) generally permits members of nonprofits to
challenge corporate actions in court, § 29-401.22(c) removes that authorization in
cases where the “nonprofit organization has provided in its articles of incorporation
or bylaws for a means of resolving a challenge to a corporate action.” That was the
case here, in the court’s view, because IDPF’s bylaws provided an avenue for any
of its members, including Overdrive, to challenge the board’s action by seeking a
rescission vote. The court concluded that it therefore lacked jurisdiction to entertain
the suit. OverDrive appealed that ruling, and we reversed and remanded for further
proceedings, holding that § 29-401.22(c) is not of jurisdictional import. OverDrive
Inc. v. Open eBook Forum, No. 17-CV-101, Order at 3 (D.C. Feb. 23, 2018). On
remand, OverDrive filed an amended petition seeking a permanent injunction to
block the transfer of EPUB to W3C and to prevent IDPF and W3C from completing
the merger.
10
After extensive discovery, the trial court granted summary judgment for
IDPF, finding that: (1) D.C. Code § 29-401.22(c) curtailed the court’s “statutory
power to overrule IDPF’s Board and members,” allowing it only to “enforce[], as
appropriate,” IDPF’s articles and bylaws; and (2) the transaction did not violate
IDPF’s articles or bylaws because, contrary to OverDrive’s arguments, W3C
“engage[d] in activities substantially similar to those of” IDPF. OverDrive now
appeals. 1
II.
The threshold dispute between the parties centers on the extent to which the
trial court had authority to entertain IDPF’s claims. In the trial court’s view, its
authority to “hear and determine the validity of [a] corporate action” under § 29-
1
In addition to its suit in Superior Court, OverDrive also filed a federal
copyright infringement case against IDPF that is tangentially relevant to this appeal.
In sum, OverDrive asserted that it retained copyrights in its “separate and
independent contributions to EPUB,” which it had never agreed to transfer to W3C.
OverDrive Inc. v. Open E-Book Forum, 986 F.3d 954, 956 (6th Cir. 2021). The
federal district court did not cast doubt on the premise of the claim that a transfer of
EPUB to W3C would violate OverDrive’s copyright, but it nonetheless granted
summary judgment for IDPF because: (1) at the time of the suit, IDPF had not yet
dissolved and had only licensed W3C to use and develop EPUB, rather than
transferring it; and (2) any future infringement claim based on an actual transfer of
EPUB from IDPF to W3C was not ripe for review. The Sixth Circuit agreed as to
both points and affirmed. Id. at 959.
11
401.22(a) was severely circumscribed by § 29-401.22(c), because IDPF “provided
in its . . . bylaws for a means of resolving a challenge to a corporate action,” namely,
by permitting members to call for a rescission vote. That internal dispute resolution
mechanism meant, in the trial court’s view, that it was permitted only to “enforce
the articles or bylaws if appropriate,” D.C. Code § 29-401.22(c), and it concluded
that the merger was compatible with IDPF’s articles and bylaws. Beyond that
narrow authorization, the court reasoned that it had no authority to invalidate the
membership’s vote to approve the merger simply because that vote was “unfair” or
contrary to IDPF’s interests in the variety of ways that OverDrive contends.
OverDrive raises several challenges to that reasoning, which fit roughly into
four categories: (1) that this court, in the prior appeal from these proceedings, already
rejected the trial court’s reading of § 29-401.22(c); (2) in any event, IDPF’s bylaws
did not in fact provide a means of resolving a challenge to a corporate action within
the meaning of § 29-401.22(c), so that limitation on the court’s authority does not
apply; (3) even if the trial court was correct that it could review the merger only for
compliance with IDPF’s articles and bylaws, the merger violated the articles’
requirement that IDPF’s assets transfer upon dissolution only “to one or more
organizations which engage in activities substantially similar to those of” IDPF; and
(4) putting § 29-401.22 aside, the trial court was permitted to exercise its equitable
12
authority to invalidate the merger and had jurisdiction to do so per the general grant
of jurisdiction in D.C. Code § 11-921. We consider these arguments in turn.
A.
OverDrive argues that we have already rejected the trial court’s conclusion
that it lacked statutory authority to hear this dispute under D.C. Code § 29-401.22.
We disagree. In the trial court’s 2017 order, unlike the one now on appeal, the trial
court ruled that § 29-401.22(c) deprived it of jurisdiction to hear this dispute. We
reversed that ruling in a three-page order explaining that § 29-401.22 “should not be
read as a jurisdiction-stripping statute.” Order of Feb. 23, 2018, supra, at 2. At the
same time, we acknowledged that § 29-401.22(c) “circumscribes [the] cause of
action” authorized by § 29-401.22(a), but explained that it is wrong to conflate a
statutory narrowing of a cause of action with stripping jurisdiction. Id. at 2-3. That
erroneous conflation was the narrow basis for our reversal of that 2017 order.
It is now OverDrive that mistakenly conflates the two concepts. It misreads
our prior ruling that § 29-401.22(c) is not a jurisdiction-stripping statute as
foreclosing the trial court’s subsequent ruling that § 29-401.22(c) curtails the cause
of action codified in § 29-401.22(a). OverDrive asserts that the two concepts—
stripping jurisdiction and narrowing statutory authority to hear a case—“are
13
indistinguishable.” Not so. Our precedents draw a clear distinction between them,
emphasizing that “statutory restrictions governing the cases courts may hear are not
to be deemed jurisdictional unless” that is the clear “intent of the legislature.” Neill
v. D.C. Pub. Emp. Rels. Bd., 93 A.3d 229, 238 n.37 (D.C. 2014) (citing Sebelius v.
Auburn Reg’l Med. Ctr., 568 U.S. 145, 153 (2013)). This is because, contrary to
OverDrive’s assertions, there are significant practical consequences to attaching
jurisdictional import to such restrictions. For instance, courts are obliged to satisfy
themselves that they have jurisdiction, even if no party has cast any doubt on the
matter and even if the parties affirmatively agree that the court has jurisdiction. See
Rolinski v. Lewis, 828 A.2d 739, 742 (D.C. 2003). Conversely, non-jurisdictional
limitations on courts are generally “subject to waiver, estoppel,” and other
exceptions. Kidwell v. District of Columbia, 670 A.2d 349, 353 (D.C. 1996) (citation
omitted).
In short, “[c]haracterizing a rule as jurisdictional renders it unique in our
adversarial system,” with distinct practical effects. Auburn, 568 U.S. at 153. Both
this court and the Supreme Court have therefore, in recent years, “attempted to ‘bring
some discipline to the use’ of the term ‘jurisdiction.’” Gatewood v. D.C. Water &
Sewer Auth., 82 A.3d 41, 47-48 (D.C. 2013) (quoting Auburn, 568 U.S. at 153). Our
ruling in the previous appeal did no more than police that important line between
14
jurisdiction-stripping statutes and more routine statutory limitations on causes of
action, such as statutes of limitations and other waivable restrictions like the one in
§ 29-401.22(c). Our prior ruling thus did not foreclose the trial court’s conclusion
that § 29-401.22(c) substantially restricted its authority to adjudicate the present
dispute.
B.
We next consider OverDrive’s argument that § 29-401.22(c) should not apply
on the particular facts of this case. Recall that § 29-401.22(a) permits members of
nonprofit corporations to petition the Superior Court to “hear and determine the
validity of [a] corporate action.” Section 29-401.22(c) then instructs that this grant
of authority “shall not apply if a nonprofit corporation has provided in its articles of
incorporation or bylaws for a means of resolving a challenge to a corporate action,
but the Superior Court may enforce the articles or bylaws if appropriate.” The trial
court ruled that IDPF’s bylaws provided a means of resolving a challenge to a
corporate action by way of a rescission vote. As a result, the court lacked authority
to hear OverDrive’s claims under § 29-401.22(a), except to the limited extent
OverDrive claimed the merger did not comply with IDPF’s articles or bylaws.
15
OverDrive counters that IDPF’s bylaws did not in fact provide a means of
resolving a challenge to a corporate action within the meaning of § 29-401.22(c). Its
arguments come in two types. First, it argues that the bylaws by their very terms
provide too ineffectual a mechanism for challenging a corporate action to displace
the court’s authority to hear such a challenge under § 29-401.22(a). Second, it
argues that IDPF’s conduct in obstructing OverDrive from effectively challenging
the merger should render § 29-401.22(c) inapplicable here.
i.
OverDrive argues that the bylaws by their terms provide too ineffectual a
“means of resolving a challenge to a corporate action” to trigger § 29-401.22(c)’s
limitation on the court’s authority under § 29-401.22(a). We do not doubt, nor does
IDPF dispute, the premise of OverDrive’s argument: that an internal mechanism for
challenging corporate actions may be so illusory that § 29-401.22(c)’s limitation on
court review does not apply. But we are unpersuaded that this is the case here.
First, OverDrive points out that the bylaws’ rescission provision permits only
rescission of “action[s] by the Board of Directors,” whereas D.C. Code § 29-401.22enables challenges to all manner of corporate actions, including those by a board,
officer, employee, or the entire membership. That distinction is immaterial,
16
however, where OverDrive’s suit is very much challenging the board’s actions.
OverDrive’s amended petition, for instance, challenges the board’s actions
approving the transaction documents and sending them to a membership vote on
October 13, 2016. The board also had to execute the “Membership Exchange and
Asset Transfer Agreement” after the membership approved the merger but before
any merger could commence. The bylaws thus gave OverDrive direct routes to
challenging the merger that it sought to block through its petition, so its complaint
that it could not challenge other types of actions is of no moment.
Second, OverDrive complains that the rescission provision allows challenges
only by those members who are well-connected enough to succeed through the
rescission process, whereas § 29-401.22(a) permits any single member to challenge
corporate actions. That is also of no import. Section 29-401.22(c)’s strictures apply
when a nonprofit corporation provides “a means of resolving a challenge to a
corporate action”; while we agree with OverDrive that these means cannot be
illusory, nothing in the statutory text (or any other authority that OverDrive can point
to) requires that the internal mechanism for a challenge be as sweeping and
permissive as the challenges otherwise permitted by § 29-401.22(a). That accords
with the principle that “courts ordinarily will not interfere with the management and
internal affairs of a voluntary association.” Blodgett v. Univ. Club, 930 A.2d 210,
17
225 (D.C. 2007) (quoting Levant v. Whitley, 755 A.2d 1036, 1043 (D.C. 2000)).
While that principle may bend where “an organization fail[s] to follow its own
rules,” Levant, 755 A.2d at 1044, OverDrive has not demonstrated that IDPF
violated its own rules (a point discussed below in Part II.C).
ii.
OverDrive next argues that IDPF “actively and intentionally prevented
OverDrive from contacting other members,” a “calculated refusal” which
“deprive[d]” OverDrive of its ability to use the rescission process ahead of the
membership vote. IDPF should therefore not be able to invoke § 29-401.22(c)’s
restrictions on the court’s authority, or so OverDrive’s argument goes. We again do
not doubt the premise that a corporation cannot affirmatively obstruct its members
from raising a challenge permitted by its articles or bylaws, and where it does so,
§ 29-401.22(c)’s restriction on the court’s authority may not apply. After all, § 29-
401.22(c) itself provides that “the Superior Court may enforce the articles or bylaws
if appropriate,” and a corporation obstructing its members from exercising their
rights under the articles’ or bylaws’ provisions would be grounds for enforcing them.
OverDrive’s argument is nonetheless unpersuasive because there is simply no
factual basis for concluding that IDPF engaged in such obstruction.
18
The substance of OverDrive’s complaints is not really about obstruction at all,
but about a lack of facilitation that IDPF was under no obligation to provide.
OverDrive complains that IDPF did not, when requested, disclose the identities and
email addresses of the representatives of its member organizations. That complaint
rings hollow for two reasons. First, OverDrive offers no authority for the proposition
that it was entitled—under IDPF’s articles, bylaws, or any other authority—to the
identities and email addresses of IDPF’s primary representatives. Second,
OverDrive made virtually no independent effort to obtain those identities and contact
information, and the record provides no support for its contention that this would
have been a futile task for it to undertake on its own. Potash testified that he and an
OverDrive employee tried to locate the information only by using Google “on and
off” for a period of time, possibly “less than an hour,” before giving up on the
endeavor. They did not, for instance, contact the general counsel’s offices of IDPF’s
members (of whom they had a complete roster) and request the contact information
of the primary representatives to IDPF. 2
2
Also recall that Potash was a founding member of IDPF and had served on
its board for a decade, departing several years before the events underlying this
appeal. One would think that Potash would have personal knowledge of some
number of IDPF’s primary representatives, or contacts beyond Kerscher who might
shed light on the matter, though the record is not clear on that.
19
In short, we agree with the trial court’s assessment that IDPF did not
impermissibly obstruct a rescission vote. Instead, OverDrive did not “even attempt[]
to avail itself of th[at] remedy provided for in IDPF’s Bylaws.” We see no basis for
circumventing § 29-401.22(c)’s limitations under these circumstances.
C.
OverDrive next contends that even if the trial court’s authority under
§ 29-401.22 was limited to ensuring the merger’s compliance with IDPF’s articles
and bylaws, the merger did not comply with IDPF’s articles. It highlights a provision
in IDPF’s articles that requires, upon its dissolution, that IDPF’s assets (like EPUB)
be “transferred to one or more organizations which engage in activities substantially
similar to those of” IDPF. The trial court concluded that W3C is engaged in
activities substantially similar to IDPF because it (1) formed a digital publishing
interest group in 2013, (2) has collaborated with IDPF to adopt and implement
certain digital publishing standards, and (3) has worked to ensure the digital
publishing industry’s input in creating open web standards. While the court
acknowledged that W3C engages in many activities beyond digital publishing, it did
“not see any provision in the Articles that suggests IDPF may not merge with a larger
corporation that engages in numerous activities as long as at least one of those
20
activities is substantially similar to those of IDPF.” OverDrive counters that W3C’s
mission is so expansive that it cannot meaningfully be said to engage in activities
substantially similar to IDPF’s discrete focus on e-books and digital publishing.
We note at the outset that it is not clear that § 29-401.22(c) gives a court carte
blanche to enforce a nonprofit corporation’s bylaws and articles, as the trial court
seemed to reason. That provision—which generally divests a court of authority to
entertain a challenge to a corporate action where a nonprofit corporation has an
internal mechanism for resolving it—permits a court to nonetheless “enforce the
articles or bylaws if appropriate.” D.C. Code § 29-401.22(c). One might read that
provision as permitting a court to enforce only those articles and bylaws that
themselves create the internal mechanism for challenging a corporate action, i.e.,
that it is only appropriate to enforce the corporation’s own internal dispute resolution
mechanisms. Under this understanding of § 29-401.22(c), it was not for the court to
determine whether W3C engaged in activities substantially similar to IDPF—the
“substantially similar” clause is not a component of IDPF’s internal dispute
resolution mechanism—and that question would be better left to IDPF and its
membership. With that said, IDPF does not dispute the trial court’s broader reading
that § 29-401.22(c) permitted it to enforce any of IDPF’s bylaws or articles—
21
notwithstanding that IDPF provides an internal means to challenge corporate
actions—so we take that point as conceded in this appeal. 3
On the merits, we agree with the trial court that the record establishes that
W3C engages in activities substantially similar to IDPF. There is no dispute that
among W3C’s many endeavors are its efforts to develop and implement open digital
publishing standards, which aligns with IDPF’s core mission of being “the trade and
standards association for the digital publishing industry.” OverDrive’s only bone of
contention is that W3C does much more than that, and that W3C’s sheer size and
expansive mission preclude it from being “‘substantially similar’ to IDPF.” But that
misstates the articles’ requirement, which is not that IDPF transfer its assets to an
organization substantially similar to it—perhaps, as OverDrive contends, W3C does
not fit that bill—but rather that it need only transfer its assets to an organization
engaged in activities substantially similar to IDPF’s. 4 W3C unquestionably does
that.
3
Circling back to Part II.A, supra, it is only because § 29-401.22(c) is non-
jurisdictional that we may accept this point as conceded, rather than needing to
resolve it sua sponte. See Kidwell, 670 A.2d at 353 (non-jurisdictional restrictions
are subject to waiver).
OverDrive, both in its trial court pleadings and its briefs to this court,
4
materially misquotes the articles on this point. The articles require that IDPF’s assets
be transferred, upon dissolution, to organizations “which engage in activities
22
D.
Finally, OverDrive argues that besides the authority granted by
§ 29-401.22(c), the trial court also had the inherent equitable authority to remedy the
various alleged improprieties associated with the merger. See D.C. Code § 11-921(granting the Superior Court “jurisdiction of any civil action . . . at law or in
equity”). 5 While we doubt that the trial court had such authority outside of the suits
permitted by the District’s Nonprofit Corporation Act, D.C. Code §§ 29-401.01 to
414.04, we need not conclusively resolve that point. Even assuming that the trial
court had some residual authority to hear challenges to nonprofit corporate actions
beyond what the Act provides, OverDrive has not sufficiently articulated a basis for
such a claim.
substantially similar” to IDPF’s, whereas OverDrive repeatedly quotes the provision
as requiring the assets be transferred to “organizations which are substantially
similar” to IDPF.
5
Among the various improprieties OverDrive alleges are that: (1) IDPF made
material misrepresentations to its membership to secure the merger’s approval; (2)
IDPF’s failure to dissolve was a material deviation from the approved merger that
never received membership approval; (3) McCoy, as IDPF’s executive director, had
a conflict of interest because he secured a job for himself at W3C upon the merger;
(4) the voting period was unduly rushed; and (5) IDPF suppressed alternative options
to the merger and censored discussion before the membership vote, in part by
holding the only open meeting to discuss the merger in Portugal rather than in the
District.
23
The District’s Nonprofit Corporation Act carefully circumscribes the types of
challenges to nonprofit corporate actions that can be raised in court, and it further
details who can raise those challenges and under what circumstances. In addition to
§ 29-401.22, discussed at length above, the Act authorizes court actions that include:
(1) derivative suits, subject to a variety of requirements, § 29-411.02(a); (2)
challenges to acts as being beyond the corporation’s power (so-called ultra vires
acts), § 29-403.04(b); (3) actions to compel meetings, § 29-401.21(a); (4) actions to
inspect corporate records, § 29-413.04; (5) actions for removal of a director,
§ 29-406.09; and (6) actions for judicial dissolution of a corporation, § 29-412.21. 6
That exhaustive scheme for challenging nonprofit corporate actions is incompatible
with OverDrive’s view that the Superior Court retains the unfettered power to
adjudicate any and all challenges that come before it in this area.
It is true, as OverDrive notes, that the Nonprofit Corporation Act provides that
“principles of law and equity shall supplement” it, D.C. Code § 29-107.02, but that
is not to say that equitable causes of action survive the Act’s passage, as OverDrive
would have it. The courts’ residual equitable powers might be constrained to
fashioning remedies not expressly provided for in the statutory scheme, rather than
6
While OverDrive complains of IDPF’s failure to dissolve as planned, it has
never invoked § 29-412.21 or otherwise sought to compel IDPF’s dissolution.
24
supplementing the causes of action permitted under the Act. See Thanos v. District
of Columbia, 109 A.3d 1084, 1093 (D.C. 2014) (our courts “have the broad authority
to fashion equitable relief” (second emphasis added)); see also Glasgow v. Camanne
Mgmt. Inc., 261 A.3d 208, 215-16 (D.C. 2021) (“A suit in equity does not lie where
there is a plain adequate and complete remedy at law.” (citation omitted)).
And even if there are some causes of action to preclude nonprofit corporate
actions beyond what the Act authorizes, OverDrive never specifies what cause of
action it might have (either at law or in equity). Instead, to paraphrase, it invokes
our plenary equitable authority to dispense justice as we see it, and that is authority
we do not have. OverDrive has never identified a specific and freestanding claim
that could exist alongside the Act’s carefully tailored scheme for challenging
nonprofit corporate actions. That is no doubt why the trial court did not expressly
address the extent of its equitable authority, despite OverDrive’s scattershot and
perfunctory invocations of it. We thus reject OverDrive’s view that the trial court
had freestanding equitable authority to address and remedy any “unfair” practices.
To the extent some narrower cause of action survived the Nonprofit Corporation
Act’s passage, OverDrive has not even attempted to articulate its scope or
parameters, and we will not take up that task sua sponte. See Comford v. United
States, 947 A.2d 1181, 1188 (D.C. 2008) (“Issues adverted to in a perfunctory
25
manner, unaccompanied by some effort at developed argumentation, are deemed
waived. It is not enough merely to mention a possible argument in the most skeletal
way, leaving the court to do counsel’s work, create the ossature for the argument,
and put flesh on its bones.” (quoting United States v. Zannino, 895 F.2d 1, 17 (1st
Cir. 1990))).
III.
The judgment of the Superior Court is affirmed.
So ordered.