The Olympia Food Cooperative is a nonprofit corporation grocery store. It emphasizes an egalitarian philosophy that requires consensus in decision-making and engages in various forms of public policy engagement, such as boycotts of certain goods. At issue in this case, the Cooperative’s board of directors adopted a boycott of goods produced by Israel-based companies to protest Israel’s perceived human rights violations. The board adopted this boycott without staff consensus on whether it should be adopted.
Five members of the Cooperative (plaintiffs) brought a derivative action against 16 current or former members of its board (defendants). The complaint alleged the board acted ultra vires [i.e., exceeding the powers delegated to it -EV] and breached its fiduciary duties by violating the Cooperative’s written “Boycott Policy.” That policy, adopted by the board in 1993, provides that the Cooperative “will honor nationally recognized boycotts” when the staff “decide[s] by consensus” to do so. Because the board adopted the boycott of Israel-based companies without staff consensus, the complaint sought a declaratory judgment that the boycott was void, a permanent injunction of the boycott, and an “award of damages in an amount to be proved at trial.” Defendants responded that the board’s inherent authority to govern the Cooperative under its bylaws and the Washington Nonprofit Corporation Act authorized the adoption of the boycott without staff consensus, notwithstanding the boycott policy.
Defendants filed a special motion to strike plaintiffs’ claims under the anti SLAPP statute. Plaintiffs opposed the motion on statutory and constitutional grounds and requested that the trial court lift the anti-SLAPP statute’s automatic stay of discovery. The superior court denied plaintiffs’ discovery request, rejected their constitutional challenges to the statute, and granted defendants’ special motion to strike. Pursuant to RCW 4.24.525(6)(a), the superior court ordered plaintiffs to pay $221,846.75 to defendants: $10,000.00 in statutory damages to each defendant ($160,000.00 total), attorney fees ($61,668.00), and costs ($178.75). Plaintiffs appealed, and the Court of Appeals affirmed on all issues.