Renew Rensselaer Legal Update

Dear RPI Alumni,

We are very pleased to announce that on May 14, 2020, the Rensselaer County Supreme Court issued its Decision and Order in the action commenced by a number of concerned members of the RAA, which sought recognition of certain rights of RAA members with respect to its governance. The most important of these rights was the legal ability of members to adopt and amend the RAA’s Bylaws. The lawsuit was necessary, because the RAA Board had refused to allow the members to propose or vote on any member-initiated amendments to the RAA’s Bylaws.

While the Court granted the RAA’s motion for summary judgment, upholding some of the Board’s current Bylaws, it cleared the pathway for the members to repeal them and adopt their own Bylaws instead. More specifically, the Court’s Decision and Order acknowledged that RAA members have the legal right to adopt amendments to the RAA’s Bylaws, which cannot be blocked by the Board.

In particular, the Court’s Decision and Order provided as follows:

• Under New York law, both the members and the board of a not-for-profit corporation have the power to adopt, amend, or repeal its bylaws.
• The language in Article XI of the current RAA Bylaws, providing that the Bylaws may be amended by two-thirds vote of the Board, does not grant the Board the sole right to amend Bylaws, and does not “in any way” prevent the members from doing so.
• The language in the RAA’s Charter giving the Board the power to adopt Bylaws likewise does not grant the Board the exclusive power to adopt Bylaws, or on its face, prevent the members from doing so.

The recognition of the right of members to adopt and amend the RAA’s Bylaws was an integral part of the reason the RAA’s motion for summary judgment was granted, since it was the basis for the Court holding that Article XI of the Bylaws did not violate New York State law. The Board had relied on Article XI in arguing that the Board has the sole power to amend Bylaws, and the Court specifically held that this is not correct.

It should be noted that under the Not-for-Profit Corporation Law, members have the right to not only adopt Bylaws, but can also prevent the Board from amending or repealing any Bylaws adopted by the members. By contrast, any Bylaw adopted by the Board can be amended or repealed by the members.

A letter has been sent by our attorneys to the RAA’s attorneys, advising that it is our intention to propose certain amendments to the Bylaws at the next Annual Meeting of members (or Special Meeting for election of directors), and requesting that such amendments be circulated to the members at least 30 days prior to such meeting and be placed on the agenda for a vote.

We plan to transmit the final proposed amendments for your information when they are submitted.

Sincerely,
Renew Rensselaer