Opinion ID: 2583896
Heading Depth: 4
Heading Rank: 2

Heading: Bylaw interpretation

Text: MEA argues that the Board was simply doing its job by addressing violations of the campaign disclosure regulations. MEA relies on the managerial power granted to the Board by statute [4] and its own bylaws, [5] as well as the authority granted in the bylaws to regulate campaign disclosures [6] and to adopt policies for the implementation of MEA's campaign disclosure bylaws. [7] MEA further argues that Waterman's interpretation of the bylaws would effectively render MEA's campaign disclosure rules a nullity. MEA contends that there are certain serious campaign disclosure violations that cannot be cured with the filing of a post-election correction report [8] and that it is the Board's duty to distinguish such violations from those that are less serious. In Afognak Native Corp. v. Olsen, we recognized that a board's interpretation of a corporate bylaw is not necessarily conclusive. [9] The rules of contract interpretation apply to the interpretation of by-laws [10] and include avoiding interpretations that create conflict among provisions. [11] MEA's position ignores the plain language of the bylaws. Section 11(i) states that a candidate ... in violation of [§ 11] shall not be seated ... if the candidate ... fails to make the disclosure required in (g).  (Emphasis added.) Section 11(g) provides that any candidate who fails to fully disclose the information required to be filed ... shall be notified in writing by the Board of the actions needed to fully comply and shall be given thirty days from receipt of notice to make the disclosure or file the appropriate report.  (Emphasis added.) Taken together, these sections create a system whereby a candidate is to be notified of any disclosure violations and given thirty days to cure the violation. If, and only if, a candidate fails to provide such a cure is the Board permitted to refuse to seat that candidate. This procedure parallels the procedure described in article IV, section 3(e), [12] which permits the Board to remove a board member when there is a violation that has not been corrected under section 11(g). Having been verbally notified at the April 9 Board meeting of concerns regarding his campaign disclosures, Janecek filed a correction report within thirty days. Janecek thus made a curative disclosure and satisfied all of the requirements of section 11(g). The plain language of the bylaws prevents the Board from using its discretion to determine whether a candidate should be disqualified due to campaign disclosure violations. And the bylaws are based on solid policy. As Waterman notes, unfettered Board discretion to decide when a campaign disclosure violation merits refusing to seat a successful candidate would permit the Board to refuse to seat a winning slate of reform candidates or to choose not to seat its challengers. In Grimm v. Wagoner, we considered whether financial disclosure violations required a state senate candidate to forfeit an election. [13] We reasoned that minor errors in disclosure did not interfere with the public's ability to judge the candidates; [14] we instead emphasized the harm of thwart[ing] voter intent by depriving voters of the representatives they elect. [15] The same concern arises here when a board is authorized to overcome the will of the members by selectively seating candidates. Rather, pursuant to section 5 of the bylaws, entitled Removal of Board Member by Members, it is the members who bring charges for cause and who vote on the question of the removal of such board member. MEA's reliance on the business judgment rule is misplaced because a plain reading of the bylaws, and Janecek's undisputed compliance with the correction report requirements of section 11(g), leave no discretion to the Board to refuse to seat Janecek. Therefore, we affirm the superior court's grant of summary judgment in favor of Waterman.