Colorado § 7-30-107 - Capacity to assert and defend - standing.

§ 7-30-107. Capacity to assert and defend - standing.

(1) A nonprofit association, in its name, may institute, defend, intervene, or participate in a judicial, administrative, or other governmental proceeding or in an arbitration, mediation, or any other form of alternative dispute resolution.

(2) A nonprofit association may assert a claim in its name on behalf of its members if one or more members of the nonprofit association have standing to assert a claim in their own right, the interests the nonprofit association seeks to protect are germane to its purposes, and neither the claim asserted nor the relief requested requires the participation of a member.

Source: L. 94: Entire article added, p. 1274, § 1, effective May 22.

OFFICIAL COMMENT

1. Subsection (a) (numbered as subsection (1) in C.R.S.) broadly recognizes the right of a nonprofit association to participate as an entity in judicial, administrative, and governmental proceedings, and in arbitration and mediation on behalf of it and its members. It may sue and be sued. Many states have enacted statutes granting unincorporated associations these rights. Many have rejected the argument that these acts made an unincorporated, nonprofit association a separate legal entity for other purposes.

2. Ohio Rev. Code Ann. Section 1745.01 (Baldwin 1991) provides that an unincorporated association may "sue or be sued as an entity under the name by which it is commonly known and called." This formulation has an element that subsection (a) (numbered as subsection (1) in C.R.S.) does not have — a description of the association name to be used. Maryland requires that the unincorporated association have a "group name." Md. Estates & Trust Code Ann. Section 6-406(a) - (1991). As some of the informal nonprofit associations may not have fixed on a name but need the benefit of the rule, subsection (a) (numbered as subsection (1) in C.R.S.) does not require that it have a name.

3. Subsection (b) (numbered as subsection (2) in C.R.S.) describes an association's standing to represent the interests of its members in a proceeding. It is the federal standing rule. Hunt v. Washington Apple Advertising Comm'n, 432 U.S. 333, 343, 97 S. Ct. 2434, 53 L.Ed.2d 383 (1977). A nonprofit association must meet the three requirements only if it seeks to represent the interests of its members. If the suit concerns only the nonprofit association's interests, subsection (b) (numbered as subsection (2) in C.R.S.) does not apply.

4. If participation of individual members is required, the nonprofit association does not have standing. If the injury for which a claim is made or the remedy sought is different for different members, their participation through testimony and presenting other evidence is required. The typical case in which a nonprofit association has standing is where it seeks only a declaration, injunction, or some form of prospective relief for injury to its members. Warth v. Seldin, 422 U.S. 490, 515, 95 S. Ct. 2197, 45 L.Ed.2d 343 (1975).

5. Subsection (b) (numbered as subsection (2) in C.R.S.) does not require the nonprofit association to show that it suffered harm or has some interest to protect to have standing to represent the interests of its members. Warth v. Seldin, 422 U.S. 490, 511 95 S. Ct. 2197, 45 L.Ed.2d 343 (1975). Some states require an association to have an interest to protect which is separate from that of its members. One court found that the probable loss of members if it did not take action on their behalf was a sufficient interest to protect to give it standing to represent its members. This approach certainly diminishes greatly the burden of satisfying the requirement. States have further modified the old standing rule. Recently many states have adopted the three-pronged federal rule, which is the rule in subsection (b) (numbered as subsection (1) in C.R.S.).

This section does not re-state rules of joinder because they will be governed by the jurisdiction's other law.