Also known as: unincorporated nonprofit association · unincorporated non-profit association · unincorporated non-profit associations · unincorporated associations
Written by attorneys — see sources below.
An aggregate of persons organized for a common nonprofit purpose without formal incorporation whose citizenship for diversity jurisdiction is determined by the citizenship of each member.
Umar Underwood and Uliana Ustinova formed an unincorporated nonprofit association with members domiciled in States A and B. The association sued a corporation incorporated and headquartered in State B. Because the association takes the citizenship of every member, complete diversity failed and the federal court lacked jurisdiction.
Umeko Uchida and Uriel Urban created an LLC with members in States X and Y. The LLC sued a defendant citizen of State Y. The court treated the LLC as an unincorporated association and traced citizenship through all members, destroying complete diversity.
Una Ueda organized an unincorporated nonprofit association with members domiciled in States A and B. The association sued a defendant citizen of State B. Because the association takes the citizenship of every member, complete diversity failed and the federal court lacked jurisdiction.
Citizens United is a nonprofit corporation with an annual budget of about $12 million. Most of its funds come from donations by individuals, though it accepts a small portion from for-profit corporations. In January 2008, Citizens United released a 90-minute documentary film entitled Hillary: The Movie. The film mentions Senator Hillary Clinton by name and depicts interviews with political commentators, most of them critical of her. Hillary was released in theaters and on DVD, but Citizens United wanted to increase distribution by making the film available through video-on-demand. In December 2007, a cable company offered to make Hillary available on a video-on-demand channel called Elections '08 for a payment of $1.2 million. The proposal was to make the film available to viewers free of charge. To promote the video-on-demand offering, Citizens United produced two 10-second ads and one 30-second ad. Each ad includes a short statement about Senator Clinton followed by the name of the movie and the movie's website address. Citizens United desired to promote the offering by running the advertisements on broadcast and cable television within 30 days of primary elections. Before the Bipartisan Campaign Reform Act of 2002, federal law prohibited corporations from using general treasury funds to make independent expenditures that expressly advocate the election or defeat of a candidate in connection with certain federal elections. BCRA §203 amended the law to prohibit any electioneering communication. An electioneering communication is any broadcast, cable, or satellite communication that refers to a clearly identified candidate for federal office and is made within 30 days of a primary or 60 days of a general election when publicly distributed so that it can be received by 50,000 or more persons in a relevant state. Concerned about possible civil and criminal penalties for violating 2 U.S.C. §441b, Citizens United filed suit in the United States District Court for the District of Columbia in December 2007. It sought declaratory and injunctive relief, arguing that §441b is unconstitutional as applied to Hillary and that BCRA's disclaimer, disclosure, and reporting requirements are unconstitutional as applied to Hillary and the ads. The District Court denied Citizens United's motion for a preliminary injunction and granted the Federal Election Commission's motion for summary judgment. The Supreme Court noted probable jurisdiction. The case was reargued after the Court requested supplemental briefs addressing whether Austin v. Michigan Chamber of Commerce and the relevant portion of McConnell v. Federal Election Commission should be overruled.
View caseUmar Usmani formed an unincorporated nonprofit association with members domiciled in States X and Y. The association sued a defendant citizen of State Y. The court treated the association as an unincorporated entity and traced citizenship through all members, destroying complete diversity.
In 2012 and 2013, three closely held for-profit corporations—Hobby Lobby Stores, Inc., Mardel, Inc., and Conestoga Wood Specialties Corp.—along with their owners, the Green and Hahn families, filed suits against the Secretary of Health and Human Services and other federal officials. Hobby Lobby operates over 500 stores with more than 13,000 employees. Mardel runs 35 Christian bookstores with nearly 400 employees. Conestoga employs about 950 people in its woodworking business. The Green family owns and operates Hobby Lobby and Mardel. The Hahn family owns and operates Conestoga. Both families hold sincere Christian religious beliefs that life begins at conception. Under the Patient Protection and Affordable Care Act of 2010, employers with 50 or more full-time employees must provide group health insurance covering certain preventive services for women, including 20 FDA-approved contraceptive methods, without cost sharing. The Department of Health and Human Services issued regulations requiring coverage of all 20 methods. The Greens and Hahns object specifically to four methods because they believe these may prevent implantation of a fertilized egg, which they view as destroying an embryo in violation of their faith. If the companies fail to provide the required coverage, they face penalties of $100 per day per affected employee, potentially reaching $475 million annually for Hobby Lobby, $33 million for Conestoga, and $15 million for Mardel. Alternatively, dropping coverage entirely could trigger penalties of $2,000 per employee per year. The companies and owners sued under the Religious Freedom Restoration Act of 1993, seeking to enjoin the mandate as applied to the four objected-to methods. The District Court for the Western District of Oklahoma denied a preliminary injunction to the Greens and their companies. The Tenth Circuit reversed, holding that the corporations could assert RFRA claims. In the Eastern District of Pennsylvania, the District Court denied a preliminary injunction to the Hahns and Conestoga. The Third Circuit affirmed, concluding that for-profit corporations cannot exercise religion under RFRA. The Supreme Court granted certiorari and consolidated the cases.
View caseUliana Ustinova led an unincorporated nonprofit association with members domiciled in States A and B. The association sued a defendant citizen of State B. Because the association takes the citizenship of every member, complete diversity failed and the federal court lacked jurisdiction.
Mass. Gen. Laws Ann., ch. 55, § 8 prohibits banks and business corporations from making contributions or expenditures for the purpose of influencing the vote on any referendum question other than one materially affecting the corporation's property, business, or assets. The statute also specifies that no question solely concerning the taxation of individuals would be deemed to have such an effect. Appellants, the First National Bank of Boston, New England Merchants National Bank, the Gillette Company, Digital Equipment Corporation, and Wyman-Gordon Company, wished to spend corporate funds to publicize their opposition to a proposed constitutional amendment authorizing the legislature to impose a graduated personal income tax. That amendment was scheduled for submission to voters on November 2, 1976. Appellants brought suit in the Supreme Judicial Court of Massachusetts seeking a declaration that the statute was unconstitutional as applied to their proposed expenditures. The case was submitted on an expedited basis upon agreed facts to a single justice of that court, who referred the matter to the full bench the same day. The statement of agreed facts reflected disagreement among economists on whether a graduated personal income tax would affect corporate business or assets. Appellants' management nevertheless believed the tax would have a significant effect on their businesses. The Supreme Judicial Court upheld the statute in a 1973 decision. After the United States Supreme Court vacated the judgment and remanded for further consideration in light of Buckley v. Valeo, the Massachusetts court again upheld the statute in a February 1977 opinion. It construed the law to bar the proposed corporate expenditures on the individual-tax referendum. Although the November 1976 referendum was held and the amendment defeated, the United States Supreme Court addressed the merits. The controversy fell within the class of cases capable of repetition yet evading review. Similar graduated-income-tax amendments had been submitted to voters four times in recent years. The interval between legislative authorization and election was only about eighteen months. The statute prescribed a maximum fine of $50,000 for a violating corporation. It also prescribed a maximum fine of $10,000 or imprisonment for up to one year, or both, for a violating corporate officer, director, or agent.
View caseThe citizenship of every member counts. The association is treated as a citizen of each state in which any member is a citizen.
An LLC receives the member-citizenship rule. It is treated as an unincorporated association rather than a corporation with its own state of incorporation and principal place of business.
Yes. Every member counts regardless of voting rights. Attendance at meetings and payment of dues establish membership status for jurisdictional purposes.
Citizenship must be traced through every tier. The citizenship of the ultimate individual or entity members is attributed to the plaintiff LLC.
…still lobby elected officials, although smaller corporations may not have the resources to do so. And wealthy individuals and unincorporated associations can spend unlimited amounts on independent expenditures. See, e.g., WRTL , 551 U. S., at 503–504 (opinion of Scalia, J.) (“In the 2004 election cycle, a mere 24 individuals contributed an…