NSP Lawsuit Dismissed: No End to Internal Battles On Horizon

NSP v NSP SettlementThe NSP officials that filed the NSP v NSP Complaint in August have now settled all matters related to that suit. The member list has been provided to the plaintiffs without the restrictions originally imposed by the NSP that violated Colorado law. The Colorado District Court for Jefferson County approved the parties’ requested dismissal, with each side agreeing to pay its respective court costs and attorney fees.

From the settlement filing approved by the court:

“The concerns of the plaintiffs have been resolved and all of the parties who have appeared in this action stipulate and agree, by their respective attorneys, pursuant to C.R.C.P. 41(a)(1)(B), that the Complaint and action herein shall be and is hereby dismissed, with prejudice, and that each party shall bear its own costs and attorney fees.”

The “with prejudice” notation confirms that the matter was settled to their mutual satisfaction and that neither feels the need to re-file on that issue. Unfortunately, it doesn’t seem like this matter is even close to being over, since the other issues underlying the suit remain unresolved. In the interest of full disclosure, members of Ski Patrol Inc., the non-profit corporation that is the parent of Ski-Patrol.net, are also members of one of the NSP groups involved in this dispute.

Background

The lawsuit was originally filed because several NSP members, including 5 members of the NSP Board of Directors, requested a copy of the corporation’s member list to communicate with members about various issues related to NSP governance and business. Under Colorado Law, any member in good standing of a non-profit corporation can request a copy of the member list. It is a violation of Colorado legal statutes (7-136-102, 7-136-103, 7-127-201) for the NSP or any non-profit corporation to refuse to comply unless the request is unrelated to corporate business, or is a commercial solicitation that doesn’t fund a corporate or membership initiative. NSP management, however, is known to have blocked proper requests for its member list.

This is the second lawsuit that has been filed to compel the NSP to comply with Colorado Law. The first lawsuit in 2005 resulted in dramatic changes within the NSP.

The results of that lawsuit gave NSP Members 3 key rights:

  1. The right to vote and serve on the NSP’s Board of Directors after being a member for over 5 years.
  2. Assurance that certain Bylaw changes can only be made by members, and not the Board.
  3. The right for members to submit proposals directly to members for a vote, without requiring 10% of members to sign a petition.

The current disagreements appear to center around the same key rights, with those associated with service on the NSP Board of Directors and submitting issues to members for consideration clearly in dispute.

Resolution of Current Litigation

The NSP claimed in its answer to the August 2012 lawsuit that it did not unnecessarily delay providing, or block access to, the member list. Tim White, the NSP’s Executive Director, said in his response to the complaint that a CD containing the information was available in the NSP office if anyone came to pick it up. It appears that one of the members requesting the list would have had to drive from Minnesota to do so, however.

White claimed that nobody asked him for the list before the lawsuit was filed, or he would have let them know that it was available. This assertion was also made in a sworn statement (meaning criminal charges can be filed if untrue) in his NSP Motion to Dismiss. However, at least one Board member claims to have sent an email to White requesting to be notified when it was ready, but was not so notified.

Counsel for the plaintiffs spoke on the phone with NSP National Legal advisor Robert Scarlett on 1 August 2012, five days after White’s sworn statement claims he had made the information available for pickup at the NSP’s office. That communication made no mention of the list being available to anyone, and even involved discussion on the NSP Board’s concern about complying with the request for plaintiff Sievert. So it was clear to plaintiffs’ counsel that the NSP had no intention to provide the member list to any of the plaintiffs on 1 August, when the lawsuit was filed following that call.

Tim White finally mailed the information to the last of the plaintiffs, John Sievert, on 14 August 2012, but with conditions that violated Colorado Law. White later agreed, on 11 September 2012, to remove all NSP-imposed restrictions that conflicted with Colorado law to settle the suit. Those conditions were important because they rendered the member list virtually unusable, for lawful purposes.

The record shows that the case was then settled on 12 September, with the judge approving the settlement on 17 September 2012. The original request for the member list from plaintiff Ed Gassman was on 29 June, and the NSP fully complied with that request on 11 September, after 74 days, and only after being sued to comply with the law. Colorado law requires non-profit corporations to fully comply with requests for a corporation’s member list, in electronic form if requested, within 5 days.

Access to the NSP Member List: To Block, or Not to Block?

One of the many reasons that the Colorado Nonprofit Act requires that members be allowed broad access to the member list is that certain actions of members require 10% to sign a petition before a matter can be brought directly to members, bypassing the Board. In recent years there have been numerous disputes over what some have called “dubious” interpretations of the NSP Bylaws and Colorado law by the Board, as well as over whether or not NSP leadership is performing its fiduciary duty.

The NSP blocked an initiative brought by a group of 6 NSP members known as the “Member Vote Team” (MVT Group) in September 2012. They had intended for it to be submitted to members under NSP Bylaw Section 14.2, another section added after the 2005 litigation that granted members more lenient rights to communicate with other members than the 10% required via petition under Colorado law. One current NSP Board member, an attorney, was the author of that language. He and others, including a member of the MVT Group, argued at the June 2012 NSP Board meeting in Colorado that the Board cannot deny a right that was granted as a result of the 2005 litigation.

According to the MVT Group, under NSP Bylaw Section 14.2, any member has the right to ask that a proposal be brought to members for a vote if it involves member voting. Once presented by one or more voting members good standing, it must then be submitted to members at least 60 days prior to the deadline for voting set in the proposal. This was the first time anyone outside the board had presented anything to the NSP that was to be voted-upon by members. The NSP Board decided to appose the MVT Group proposals, and consulted an outside counsel. The result was a majority of Board members opposing a simple interpretation of the Bylaw language, language that was written by one of its own members – himself a lawyer. Outside counsel then provided the NSP with an alternative interpretation, claiming that, since the Bylaw language did not specifically state that any member or group of members could present a matter to other members for a vote, then that interpretation could be ignored.

A majority of Board members decided to rely exclusively on the more restrictive Colorado statute language, which is the legal basis the NSP has employed to block submission of the MVT Group’s questions directly to members. This effectively forced that group to come up with the 10% member petition to bypass the Board and go directly to members, which requires the member list to contact them. The original lawsuit filing appears to indicate the NSP repeatedly delayed complying with the request of the plaintiff group. One party to the lawsuit, John Sievert, is a member of the MVT Group.

Delaying compliance with the law by blocking access to the member list may have helped the Board majority ensure the matter would not be considered by members during the annual fall vote. The Board also successfully blocked consideration of the proposals by members during another internal process, ultimately rejecting all 6 member vote proposals in mid-September. Claiming that the NSP Bylaws do not allow members to directly contact other members to present issues, and then blocking access to the member list, would allow the NSP Board to inappropriately control what members see. This, of course, would violate the letter and spirit of Colorado law, and arguably the NSP’s Bylaws. That is what the MVT Group believes has occurred.

Central Issues: Governance, ‘Keeping the Ski in Ski Patrol’, and OEC5e

The NSP’s troubles appear to have started over the last two years when a number of issues came to the forefront around three key themes. The first relates to the issues noted previously, and detailed below, associated with corporate governance. The second is a controversial Board decision to approve “RFBA 07-08″, which effectively made skiing optional for NSP Patrollers. The third related to questions associated with changes to new standards of training in the new Fifth Edition of the NSP’s Outdoor Emergency Care (OEC5) publication released by Brady.

Regarding the second issue, the Board’s approval of “RFBA 07-08” made the term “Auxiliary” obsolete and instead termed those members as “Patrollers” and provided them with full voting rights within the NSP. It is felt this was done without fully disclosing to members that some of the affected “Auxiliary Patrollers” have never skied and have no intention of learning to do so, explicitly allowing people that are not ski patrollers to vote, serve on the Board, and have equal rights to decide the future of the NSP.

For example, one person, claiming to be among those members, defended the decision saying in a LinkedIn NSP Members forum entitled “RFBA 07-08 – Please read the latest Trail Sweep”, on 21 June 2011:

“I am a full Auxiliary member of the Patrol. I don’t know how to ski, nor do I plan to learn. I have been a member of the Patrol for 11 years, and I patrol because I enjoy it and it gives me something to do while my kids and grand kids ski. I am also an OEC instructor (I am also an EMT Examiner) and enjoy teaching. I spend most of my time alone at the bunny hill. While there I spend time talking to the kids about safety and the parents about wearing a helmet. I am often the 1st on the scene of accidents, in fact this past winter we had two kids collide, both with possible head and neck injuries. I was the 1st on the scene, triaged, called for help and was the IC until the hill Chief Arrived. I have two questions for the group; (1) what does skiing have to do with first aid?(2) Why can’t someone who does not ski provide high quality patient care?”

Those opposed to eliminating the NSP’s skiing/first-aid standard claim that this decision was made without the full knowledge of members and without a proper vote, effectively making an unauthorized change to the organization’s primary strategic purpose, as laid out in its Bylaws, and altering the purpose clearly stated in the NSP’s Federal Charter, Colorado and New York Articles of Incorporation, and every governing document published since the organization’s inception – which states that ski patrols must consist of “competent skiers trained in the administration of first aid, for the purpose of preventing accidents and rendering speedy assistance to persons sustaining accidents“.

Members of that group claim that this has allowed the Board to transform the NSP, without member authorization, into a healthcare organization that serves all outdoor emergency care communities, and eliminates the NSP’s exclusive focus on skier safety.

The majority of NSP leaders appear to have adopted the position that this is simply a “tempest in a teapot” created by a group of long-time members that are stuck in the past and can’t see the future of the NSP. They say the skiing world has changed and resorts are now in all sorts of other businesses, and the NSP needs to support those resorts as they try to move beyond seasonal skiing and boarding activities. The group that constitutes a majority of current NSP leaders no longer views the NSP as serving skiers exclusively. Instead, this group appears to believe the NSP’s primary strategic purpose is now to serve ski resorts along with other venues as part of a larger outdoor recreation community that includes tubing parks, mountain climbing, hiking, biking, swimming, scuba diving, water skiing, and virtually any other outdoor activity in any season.

That leads us to the third issue, OEC5. The Fifth Edition of the NSP’s flagship OEC first-aid program now includes treatment for ailments from snake bites to plant and animal emergencies. NSP officials are lobbying Congress, despite prohibitions on doing so in the organization’s Federal Charter (36USC 152707c) and Articles of Incorporation (Section 7.3), seeking legislation that would eliminate liability for services provided under this ever-diversifying OEC program. The program itself is now virtually indistinguishable from those offered by for-profit companies serving the larger EMS community.

The majority of the NSP’s leadership appears to believe that losing the NSP’s Federal Charter and the organization’s non-profit status for these activities is worth the risk to save the organization from extinction. Those in opposition to the current thinking say the strategic diversion is misguided and will itself quickly put the ski patrol out of business. They cite the same symptoms that have prompted the organization to lobby Congress and the legislatures of many states in which the NSP operates, saying the opposition has been caused by the NSP’s strategic errors in deciding to compete the NSP’s for-profit first responder partners, while simultaneously deemphasizing skiing as a core competency for all ski patrollers.

The MVT Group views these activities, collectively, as both a violation of fiduciary duty and a massive strategic diversion that is draining the organization’s financial and human capital resources. They hope to protect the right of members to decide whether or not to shift the NSP’s mission away from its strategic skier safety purpose before it’s too late.

The Six Proposals NSP’s Board is Fighting to Block from Member Vote

As mentioned previously, the MVT Group has been attempting to submit 6 proposals to the members for vote to address some of the issues that they believe are of significant importance to the sustainability of local patrols and the NSP.

    The first proposal would establish harsh penalties for vote fraud. There have been complaints in recent years about voting irregularities and who has access to voting records. At least three allegations have been submitted that relate to possible fraud in the current Board election cycle. Those will be discussed at the 17 October 2012 Board meeting. The current Nominations Committee, chaired by Eastern Division Director John Shipman, stands accused of being at the center of the elaborate election-fixing scheme, employing dubious interpretations of Bylaws to exclude qualified candidates. It has been alleged that proper vetting of candidates did not take place, and that certain candidates seeking reform were arbitrarily cut before being presented to members. Some of the most educated candidates were claimed to have been cut, along with a disproportionately large number of female candidates, and every member of the NSP’s Rocky Mountain Division. The recent resignation of Board member and long-time Education Committee Chairman, Larry Bost, following allegations that he had misrepresented having a Bachelors degree and an MBA in Ethics from the University of California, Berkeley appears to support the claim that proper vetting of NSP leaders is necessary.

    The second proposal would bring the NSP’s bylaws into compliance with Colorado law related to terminating board members. The MVT Group and NSP Board agree that this needs to happen. Each side, however, claims the other is making additional changes that are not required to comply with Colorado statutes.

    The third proposal relates to the appointment of National committee chairs. Currently, NSP Chairman, Burt Mitchell, is allowed to appoint anyone to chair key NSP committees. The MVT Group proposal would shift that authority to the Board. Opponents to the proposal claim the Chairman of the NSP must appoint key people that he or she feels they can work with so the NSP can function smoothly in the direction set by the Chairman. To the contrary, the MVT Group claims that the current Chairman, Burt Mitchell, routinely appoints Board members with limited qualifications to serve in key NSP leadership positions. For example, they say that the present Chairman of the Audit Committee, John Lawson, has no education in accounting or finance, yet was appointed to chair the committee that oversees the NSP’s annual financial audit and other critical oversight functions. James Decker, a retired physical education teacher with no legal education or experience, was appointed by Mitchell as Chairman of the Governance Committee, to oversee NSP compliance with the NSP’s Bylaws and governing documents, and the law in every jurisdiction around the US (and world) where the NSP serves the skiing public. And as noted previously, long-time Education Committee Chairman, Larry Bost, resigned after his own education credentials were questioned, including a supposed MBA in Ethics. The MVT Group proposes that if the Board was responsible for such appointments, it would result in more qualified leaders serving in those key leadership positions.

    The forth proposal relates to changes in the election process for NSP officials, and the establishment of term limits for national positions which do not currently have term limits, such as the NSP’s National Legal Advisor. Under the proposed model, national volunteer staff and program directors would be nominated, elected and replaced by their division counterparts (i.e. all division legal advisors would elect the National Legal Advisor). Those decisions would then be approved by the Board.

    The fifth proposal relates to asking members whether or not they want to “keep the ski in ski patrol”, or allow people that have never skied and have no intention of ever learning become full voting members of the NSP, and called “Patrollers”. The MVT Group believes only the organization’s 28,000 members have the right to make this decision, rather than having the decision made by the Board without fully disclosing it, or the dramatic strategic implications, to members.

    The sixth proposal relates to clarifying the bylaw language that details the process members follow to formally request a member vote on initiatives, regardless of the nature of the initiative. This would enable members to request a member vote without requiring a formal petition signed by 10% of the NSP’s voting members, or around 2,500 signatures. For perspective, this number is approximately equal to the typical number of voters that cast ballots in an NSP Board election.

NSP Division Directors Call for Resignation of 5 Board Members that Support Colorado Law

Shortly after the settlement, the Directors of several NSP divisions called for the resignations of the 5 board members that were parties in the lawsuit – Gary Deaver, Frank Davis, Ed Gassman, Wally Shank, and Larry Stone. That initiative appears to have been coordinated by the Eastern Division’s John Shipman and the Central Division’s Jim Woodrum, who is a current candidate for the NSP’s Board. The Eastern Division is the largest of the NSP’s twelve divisions, representing about a third or more of the votes cast in most elections, followed closely by the Central division. All other NSP Divisions represent much smaller groups of patrols and patrollers.

The Rocky Mountain Division was the only group to point out that asking for the resignation of these 5 Board members implicitly supported actions by NSP leaders that violated Colorado law. The Rocky Mountain Division published its own statement from its leadership team detailing its perspective on the situation. Four of the five board members who filed the 1 August 2012 lawsuit to obtain the member list were from the Rocky Mountain Division, except one member, Gary Deaver, from the Pacific Northwest Division.

To call out any particular part of that statement from the Rocky Mountain’s 28 Ski Patrols would imply that all other portions were not as interesting. But the following passage pretty much sets the tone for what appears to be the current state of affairs at the National Ski Patrol:

“Seven years ago, NSP was under attack and a few members came to its defense and prevailed so that the basic principles of its members’ rights and mission statement would be protected and preserved. Now, ‘here we go again.’”

One outcome appears certain. The NSP’s 75th anniversary in 2013 will have lots of fireworks.

Links to full-text of documents referenced in this story:
August 2012 NSP v NSP Complaint, Including Exhibits
NSP Answer to August 2012 Lawsuit
NSP Motion to Dismiss Complaint
Plaintiff-Defendant Joint Dismissal Filing, Approved by District Court
Statement of the NSP Rocky Mountain Division’s 28 patrols
Colorado Nonprofit Act from Hindman & Sanchez

Article Updated – 15 October 2012