Westenbroek v. Kappa Kappa Gamma
Opinion
FILED
United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT June 12, 2024
Christopher M. Wolpert
Clerk of Court
JAYLYN WESTENBROEK; HANNAH HOLTMEIER; ALLISON COGHAN; GRACE CHOATE; MADELINE RAMAR; MEGAN KOSAR, on behalf of themselves and derivatively on behalf of KAPPA KAPPA GAMMA FRATERNITY,
Plaintiffs - Appellants,
v. No. 23-8065 (D.C. No. 2:23-CV-00051-ABJ)
KAPPA KAPPA GAMMA (D. Wyo.) FRATERNITY, an Ohio non-profit corporation, as Nominal Defendant and as a Direct Defendant; MARY PAT ROONEY, President of the Fraternity Council of KAPPA KAPPA GAMMA FRATERNITY, in her official capacity; KAPPA KAPPA GAMMA BUILDING CO., a Wyoming non-profit corporation,
Defendants - Appellees, and ARTEMIS LANGFORD, Defendant,
--------------------------------
WOMEN’S DECLARATION INTERNATIONAL USA; OVER 450 KAPPA KAPPA GAMMA ALUMNAE; WOMEN’S LIBERATION FRONT; NATIONAL PANHELLENIC CONFERENCE; NATHANIEL R. JONES
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CENTER FOR RACE, GENDER AND SOCIAL JUSTICE; THE NATIONAL CENTER FOR TRANSGENDER EQUALITY; THE WOMANS CITY CLUB OF GREATER CINCINNATI; JIM OBERGEFELL; AMERICAN CIVIL LIBERTIES UNION OF OHIO FOUNDATION,
Amici Curiae.
ORDER AND JUDGMENT*
Before McHUGH, MURPHY, and FEDERICO, Circuit Judges.
Several aggrieved members of the University of Wyoming chapter of the sorority Kappa Kappa Gamma1 (“Appellants”) filed this lawsuit against the sorority and its president (“Appellees”) over the proper interpretation of the sorority’s governing documents. Specifically, Appellants allege that Appellees violated their fiduciary duties when, in 2015 and continuing to today, Kappa Kappa Gamma (“Kappa”), an Ohio non-profit corporation, began interpreting “women” to include
*
This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Federal Rule of Appellate Procedure 32.1 and Tenth Circuit Rule 32.1.
1 Kappa Kappa Gamma’s Charter and other governing documents routinely refer to Kappa Kappa Gamma (“Kappa”) as a “Fraternity” because Kappa’s founding “pre-dates, by thirty years, use of the word ‘sorority’ to refer to” women’s Greek societies at colleges or universities. App. Vol. I at 9 n.1. The organization now routinely identifies as a sorority, and we adopt that nomenclature here.
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“individuals who identify as women.” App. Vol. 1 at 51, 263. Applying Ohio state case law that cautions against judicial interference into the internal affairs of voluntary associations like sororities, the district court dismissed Appellants’ claims, but did so without prejudice. Appellants nevertheless filed this appeal challenging the district court’s dismissal of their claims. Appellees moved to dismiss this appeal for lack of appellate jurisdiction. Because the district court has not issued a final order, we grant Appellees’ motion and dismiss this appeal for lack of jurisdiction.
I. BACKGROUND
Appellants’ operative First Amended Verified Complaint asserted four claims:
Count I: a derivative claim for breach of fiduciary duty against Kappa President Mary Pat Rooney for “violat[ing] [her] dut[y] of loyalty, care, and obedience/compliance,” App. Vol. I at 74; Count II: a breach of contract claim against Kappa Kappa Gamma Building Co.; Count III: a tortious interference with contract claim against Kappa and Ms. Rooney; and Count IV: a direct claim for breach of fiduciary duty against Kappa and Ms. Rooney based on the same fiduciary duty theory as Count I.2 On June 20, 2023, Appellees moved to dismiss the complaint. As relevant to this appeal, Appellees argued (1) the district court could not exercise personal jurisdiction over Ms. Rooney, (2) the derivative claim was deficient for both procedural and substantive reasons, and (3) the direct claim should be dismissed for the same
2 The First Amended Verified Complaint is not entirely clear as to which Appellees are sued under which counts, and the district court order and the parties’ briefing differ at points in identifying the Appellees sued under each count. Given the limited purpose of this order, we need not resolve this dispute.
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substantive reasons as its companion derivative claim, and further that it was subject to dismissal for failure to allege a distinct injury felt by Appellants rather than an injury that inured to all Kappa members.
On August 25, 2023, the district court granted the motion to dismiss in full, but without prejudice. Relevant to this appeal, the district court held:
1. personal jurisdiction over Ms. Rooney was proper;3
3 Because we dismiss this appeal for lack of subject matter jurisdiction, we need not consider whether the district court also lacked personal jurisdiction over Ms. Rooney under Wyoming’s fiduciary shield doctrine, which shields nonresident corporate agents from becoming subject to a court’s jurisdiction based solely upon acts taken by them on behalf of the corporation. See Ten Mile Indus. Park v. W. Plains Serv. Corp., 810 F.2d 1518, 1527 (10th Cir. 1987) (predicting Wyoming would adopt the fiduciary shield doctrine and no-imputed-contacts rule, and explaining that under those rules, corporate defendants’ contacts cannot be attributed to corporate officers (the no-imputed-contacts rule), and “[w]here the acts of individual principals of a corporation in the jurisdiction were carried out solely in the individuals’ corporate or representative capacity, the corporate structure will ordinarily insulate the individuals from the court’s jurisdiction” (the fiduciary shield doctrine)); but see Newsome v. Gallacher, 722 F.3d 1257, 1278–79 (10th Cir. 2013) (concluding that even if Oklahoma would follow the fiduciary shield doctrine, it would not apply under the facts of that case, and further questioning whether the doctrine would apply to a claim of breach of fiduciary duty).
In Newsome, we discussed how, in a prior decision, Rusakiewicz v. Lowe, we expressed concern over whether Ten Mile definitively addressed the fiduciary shield doctrine, or rather solely established the no-imputed-contracts rule. See 722 F.3d at 1277 (citing Rusakiewicz v. Lowe, 556 F.3d 1095, 1102 (10th Cir. 2009)). But as we explained in Newsome, Rusakiewicz concerned a question of whether personal jurisdiction existed in Utah over the defendants in that matter, and it never approached the issue as a matter of Utah state law, even though the fiduciary shield doctrine arises under state law. See id. at 1277–78 (citing Rusakiewicz, 556 F.3d at 1102–03). Later in Newsome, we clarified that “Ten Mile’s statement about the fiduciary shield must be confined to the doctrine as applied in Wyoming.” Id. at 1278. Ultimately, the fiduciary shield doctrine is a creature of state law. See id. at 1275.
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2. the derivative claim for breach of fiduciary duty was doomed because (a) Ohio law does not permit courts to interfere with the management and internal affairs of a voluntary association, and (b) the First Amendment did not permit the district court to “invade [Kappa’s] freedom of expressive association,”
App. Vol. II at 99; and
3. the direct claim for breach of fiduciary duty did not state a claim because (a) Appellants did not allege any distinct injury they experienced or any special duty owed to them alone (rather than Kappa members writ large), and (b) there was no breach of fiduciary duty for the same reasons the district court dismissed the derivative claim.
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