an important economic interest was affected; there were “too many factors indicating that the proceedings were in fact not good faith disciplinary hearings,” including that seven members of an eleven member board were defendants in a pending derivative action brought by the members who were expelled by the board
How later courts described this case
- an important economic interest was affected; there were “too many factors indicating that the proceedings were in fact not good faith disciplinary hearings,” including that seven members of an eleven member board were defendants in a pending derivative action brought by the members who were expelled by the board
Written by the judges who cited it.
Distinguished
Distinguished by Lieb v. Chicago Board Options Exchange, Inc., 78 Ill. App. 3d 219 (1979)
Both cases, Silver v. New York Stock Exchange (1963), 373 U.S. 341, 10 L. Ed. 2d 389, 83 S. Ct. 1246, and Van Daele v. Vinci (1972), 51 Ill. 2d 389, 282 N.E.2d 728, are inapposite to the facts in the instant case.
The opinion
MR. CHIEF JUSTICE UNDERWOOD, dissenting:
I cannot agree that the circumstances of this case justify the substantial departure from settled law which the majority opinion represents. As the well-considered opinion of Mr. Justice Drucker, speaking for the appellate court, notes, the heretofore prevailing rule, as announced in the earlier opinions of this court, has been that judicial supervision and intervention were generally limited to a determination that the voluntarily agreed to provisions of the bylaws and rules of the organization were adhered to in resolving disagreements among its members. People ex rel. Rice v. Board of Trade, 80 Ill. 134 ; Sturges v. Board of Trade, 86 Ill. 441 ; Pitcher v. Board of Trade, 121 Ill. 412 ; Ryan v. Cudahy, 157 Ill. 108 ; People ex rel. Keefe v. Women’s Catholic Order of Foresters, 162 Ill. 78 ; Board of Trade v. Nelson, 162 Ill. 431 ; Green v. Board of Trade, 174 Ill. 585 ; Bostedo v. Board of Trade, 227 Ill. 90 ; Engel v. Walsh, 258 Ill. 98 ; Werner v. International Association of Machinists, 11 Ill.App.2d 258 . See also Parsons College v. North Central Association of Colleges and Secondary Schools (N.D. Ill. 1967), 271 F.Supp. 65 .
The question as to the extent to which due process standards applicable to public agencies may or should be imported into the internal operations of associations which are basically private in nature is not one which I find easily answered. The answer provided by the majority opinion, however, is completely superficial. That answer is that “the bylaws provide that a commission could be appointed to investigate the conduct of members and report to the board independently to avoid the possibility of bias.” The superficiality of this solution is that it is not the partiality of the investigators which is the real issue — it is the bias alleged to exist among members of the Board. Certainly appointment of a disinterested committee to investigate does little to remedy partisanship on the part of members of the adjudicatory body (the Board) to which the committee reports. It is alleged bias in that body which is the real issue here. The appointment of a commission does nothing to resolve it.
It is clear that, broadly stated, courts have adhered to a policy of non-intervention in cases of refusal to admit or expulsion from social, fraternal and religious organizations (Falcone v. Middlesex Couty Medical Society, 34N.J. 582, 170 A.2d 791 and cases there cited; Sheridan, Judicial Review of Expulsions From Private Associations, 52 I.B.J. 842.) It is equally clear, however, that an increasingly greater willingness to intervene is manifested in those cases dealing with professional associations exercising virtually monopolistic control in which membership is essential or of substantial importance to the individual in earning a livelihood. Falcone and cases there cited.
The basis for judicial reversal of association action has, again speaking broadly, ordinarily been a violation of the constitution or bylaws of the association, or, that the association rules and proceedings violate concepts of fundamental fairness, or, that the association action was motivated by prejudice or bad faith. (Sheridan, pp. 847-8.) There has been, as noted by the majority, no violation of the association bylaws in the case before us, nor do these regulations violate concepts of basic procedural justice. The sole ground for reversal relied upon by the majority is that members of the board of directors which voted to expel plaintiffs may have been prejudiced by reason of the fact that the Board had instituted the charges and had been made defendants- in prior litigation initiated by plaintiffs. The court’s opinion agrees that the Board is “not necessarily disqualified,” but holds the Board should have appointed an investigating committee “free from any assertions of bias and agreed to be bound by the committee’s report.”
In my judgment the circumstances of this case do not warrant the conclusion reached by the court. Certified, while a sizeable association, can scarcely be thought to be monopolistic. Its members, including plaintiffs, agreed to the terms of its bylaws by applying for membership. There is nothing therein which offends a sense of fundamental fairness except the fact that some members of the Board which is vested with the ultimate responsibility for disciplining the membership may, as a result of plaintiffs’ prior activities, be predisposed in their approach to the expulsion question. But it is precisely this same body which is presumably the most knowledgeable group concerning the welfare and best interests of the association. Similarly, it is this group which is likely to be most aware of, and best able to accurately assess the effect of, the conduct of the association’s members. To say that such awareness prevents them from exercising the authority vested in them by agreement of the membership, including plaintiffs, is likely, I believe, to seriously impair the operating efficiency of such associations. One effect will be to enable dissident members, by the simple expedient of criticizing all other members, to render the association and its members incompetent to try them. While the majority optimistically states that, given such situation, “we believe that the association is capable of formulating proper disciplinary procedures”, I believe it preferable to avoid that possibility.
In short, while agreeing that there are circumstances wherein judicial intervention in the operation of voluntary associations is not only appropriate, but is necessary, I believe that power should be used sparingly and only under circumstances more compelling than those existing here.
I would affirm the judgment of the appellate court.
MR. JUSTICE DAVIS joins in this dissent.,