Friday, August 27, 2010

Worldmark v. Wyndam Resort Development Corp. (Cal. Ct. App. - Aug. 24, 2010)

Hurrah for the Court of Appeal.

Robin Miller is one of the 260,000 members of Worldmark, which is a California nonprofit mutual benefit corporation owned by its members (including Robin) and that owns vacation timeshares. The California Corporations Code entitles members of such groups to obtain the fellow names and addresses of its members for purposes reasonably related to the group, and that's exactly what Miller wants to do, since she wants to propose some bylaws changes.

Worldmark communicates with its members via e-mail, so Miller asks for the e-mail addresses. Worldmark says "No." Miller says: "Look, I just want to circulate this proposal, I'm not looking to spam people. If you want, I'll give you my proposal and you circulate it to the people via their e-mail addresses." Worldmark says: "No." Miller says: "Seriously, I'm expressly entitled to this stuff under the California Corporations Code, and for good reason." But Worldmark says: "Okay, I'll tell you what. We communicate with our members via e-mail, but the only addresses we're going to give you are their snail mail addresses. So good luck spending the quarter million dollars mailing things out on your piddly bylaws change while we communicate for free."

So Miller sues. The trial court agrees with Worldmark, so Miller seeks relief from the Court of Appeal. Which looks like it may be leaning Miller's way, and grants a stay and some provisional relief. At which point Worldmark continues its obstruction and obtains a (potentially collusive) Florida judgment in which Worldmark was a "defendant" that ostensibly precludes Worldmark from releasing any e-mail addresses. A final judgment that took all of nine days for the plaintiffs to obtain after filing suit, and that coincidentally happened right when the California Court of Appeal was on the case and looking to grant Miller's request for e-mail addresses. Worldmark really fought that one tooth and nail, eh?

Worldmark attempts to throw additional roadblocks in the way of Miller's request as well, but the Court of Appeal rejects them all. "Addresses" for proxy materials include e-mail addresses in the modern era, particularly when the company has that information and itself communicates that way. Expensive snail mail is both unnecessary and not a reasonable alternative, especially in a context in which the defendant -- as here -- seems like it's being deliberately obstreperous.

Seems right to me.