September 4, 2003 | Read Time: 2 minutes
A U.S. District Court judge last month dismissed a $1.25-million lawsuit that accused the Northwest Area Foundation, in St. Paul, of reneging on a promise to pay to help a county in eastern Washington State develop a plan to reduce poverty. Residents of the county said they planned to appeal the court’s decision.
Some 300 residents of Yakima County told the court that the grant maker had agreed to compensate them for transportation costs and other expenses of attending weekly meetings set up by the foundation to devise an antipoverty strategy for the region.
The residents said the Northwest Area Foundation had not told them that the planning was only an “exploratory” effort that might not result in a grant (The Chronicle, December 12). The case has been widely watched because of the precedent it could set for action against grant makers.
In dismissing the case, Judge Edward F. Shea said that while the residents may have spent considerable time and money at the grant maker’s request, that did not create a contractual agreement between them and the foundation. “The statements allegedly made by the foundation to plaintiffs during the planning process are not sufficiently definite to constitute a unilateral offer for contract or promise,” the judge said.
Furthermore, the Yakima residents have no legal standing to sue the foundation for violating its charitable obligations, the judge said. Only the attorney general or other government official can do that, he said.
Karl N. Stauber, president of the foundation, said that the judge’s ruling “means communities challenged by poverty — and the organizations who wish to help them — can continue to work together to initiate new approaches to poverty reduction.”
Matthew N. Metz, the plaintiffs’ lawyer, said he would appeal. “The decision was decided on narrow procedural grounds and did not at all reach the merits of the case,” he said. “The court shouldn’t bend over backwards to exempt charities from legal scrutiny.”
The dispute arose after the Northwest Area Foundation, which has $367-million in assets, started a series of meetings in Yakima County in 2001 to determine the area’s suitability for an effort to identify up to 16 communities in which to provide more than $150-million to fight poverty.
In August 2002, after more than 50 meetings, the foundation decided not to invest in Yakima County, citing a lack of staff resources and the residents’ inability to work together.
