March 17, 2005 | Read Time: 2 minutes
A U.S. appeals court in Seattle reinstated a $1.25-million lawsuit against the Northwest Area Foundation last month, saying residents of a county in eastern Washington State can pursue one part of their case against the grant maker, which is located in St. Paul.
The residents sued the foundation in 2001, saying it had reneged on a promise to pay them for incidental costs — such as travel, child care, and compensation for time away from work — to help develop a plan to reduce poverty in the region where they live. The foundation said it committed no wrongdoing.
The appeals-court judges said the residents, who are farmworkers in Yakima Valley, can continue their legal efforts because the residents produced enough evidence to show that the foundation promised them the money. The farmworkers, however, were not allowed to pursue their case on other legal grounds. For example, the judges said that no formal contract existed between the two groups, meaning the farmworkers cannot sue for breach of contract as they had hoped to do.
Matthew N. Metz, the plaintiffs’ lawyer, said the decision was a victory for the residents. “It was important to establish that our clients have a right to fight the foundation,” he said.
But Sylvia Burgos Toftness, a spokeswoman for Northwest Area Foundation, said the grant maker was encouraged by the court’s ruling. “We’re glad that most of the complaint was dismissed,” she said.
Widespread Interest
The case has been widely watched because of the precedent it could set for legal action against grant makers. But Mark Sidel, associate professor of law at the University of Iowa, in Iowa City, who is following the lawsuit, says that because of the way the case is being handled, the precedent would not apply directly to other cases involving charitable foundations.
The dispute between the farmworkers and the Northwest Area Foundation, which has nearly $438-million in assets, started after a series of meetings in Yakima County four years ago to determine whether the area was a good candidate to become one of up to 16 locations in which the fund would provide more than $150-million to fight poverty.
In August 2002, the foundation decided not to invest in Yakima County, citing the residents’ inability to work together and other concerns.
The case is known as Romero v. Northwest Area Foundation, case number 03-35709. The ruling was made in the U.S. Court of Appeals for the Ninth Circuit and is available online at http://www.ca9.uscourts.gov by clicking on “Memoranda” on the left side of the Web page and then finding the February 18, 2005, filings.
