After months of uncertainty about the future of the Corcoran Gallery of Art in Washington, DC, the Corcoran’s Trustee’s filed a petition on June 17, 2014 for cy pres—to revise the terms of the trust that administers the museum and the Corcoran College of Art + Design.  The Corcoran’s financial condition, they argue, make the current situation untenable and in the long run impossible, to sustain.  The petition proposes an arrangement with the National Gallery of Art (NGA) for the bulk of the artwork, and with George Washington University (GW) for the college functions, all to sustain the mission of the trust “as nearly as possible.”

Now a group of students, faculty, staff, and interested supporters called Saved the Corcoran have filed a motion to intervene in that petition, arguing that the modification is unjustified and fails to take alternatives into account.  The challengers’ motion(linked here) is a meticulous attack on the wisdom of the relief sought by the Corcoran, but it almost certainly falls short of the high standards to intervene in a case in which the movants are not parties.  More likely it is a salvo for consideration by the Court and the Attorney General of reasons not to allow the petition, which is an entirely different question.

To understand what is going on, it is important to review the history of the museum, and the differing law of intervention and cy pres.  If all of this sounds familiar, it is certainly because a communal support organization challenging a cy pres petition is exactly what opponents of the Barnes Foundation’s move to Philadelphia tried, and failed, to do.  That case ended so badly for them that the Friends of the Barnes were ordered to pay the museum’s legal feesfor the last challenge.

The Corcoran

Businessman William Corcoran established a trust in 1869 that was federally chartered in 1870 as a non-profit institution.  He also donated to the trust his art collection, some cash, and the Renwick Building at Pennsylvania Avenue and 17th Street.  The trustees took possession of the personal property (the art and money) and the real property (the building), and administered the museum.  Sometime around 1878, the trustees also established the Corcoran College of Art + Design.  Corcoran himself was no longer a trustee by then.  By 1890 the enterprise had outgrown the Renwick Building, and acquired vacant land on which it built a new structure designed by William Flagg.  The Flagg-designed building has housed the museum and major aspects of the college since 1897 (when it was completed.  A later Clark Wing was added, funded by the bequest of Senator William Clark.

The petition argues that in recent years the financial condition of the Corcoran has become strained.  The petition goes out of its way to note that this burden has been enhanced by the Corcoran’s adherence to the Association of Art Museum Directors’ guidelines on deaccessioning.  In other words, the petition says, they could have shored up the museum’s finances, but only by selling art for general operating funds.  The resulting deaccreditation and sanction would outweigh the trustees’ mission to steward the institution, the petition argues.

According to the petition, the trustees have been searching since 1999 for a solution to these financial woes. A planned Frank Gehry designed renovation in 2005, for example, was proposed but never completed.

Now, the Corcoran says it has reached a tentative deal with the NGA and GW.  It describes the essential components of this deal to be the continued display and preservation of the collection, renovation of the building, and the continued operation of the College of Art + Design.  The petition argues that other offers, including one from the University of Maryland, were considered but this one comes as close as possible to the purpose of the trust, i.e., the display of the artwork in its present location accompanied by the college.

Cy Pres

So is that enough?  A trust is a legal instrument designed to last long after the people who created it.  And administration of trusts ordinarily does not permit revision, since unlike a contract between living people or corporations, the original party is gone.  Rather than pass those rights on to the heirs of the trust’s creators, most states (including the District of Columbia) entrust the Attorney General with that oversight.

To deviate from a trust, the proponents will therefore have to do two primary things: get the Attorney General on board, and persuade the court that the original terms of the trust are no longer practicable or possible.  Without AG support most petitions will fail, since courts tend to defer to the expertise of the office.  To meet the impracticability standard, the Corcoran essentially says that unless it does something, the museum and trust will go bankrupt.  They argue that the solution is “as near as possible” to the original trust and should be permitted.  All things being equal, they make a strong argument.  Others may disagree, but application ofcy pres is always somewhat hazy; it is never a question of a quid pro quo replacement, it is what is as near as possible under the circumstances.  Framed as the difference between closing its doors and continuing to show the same art in many of the same buildings, that should be enough (and the Barnes is a good example of this).

Intervention

As noted above, only the AG has standing to regulate non profits.  Members, employees, and supporters do not.  Thus, to participate in the cy pres proceeding, they must find another way in.  The route that they have chosen is intervention.

There are two kinds of intervention: intervention as of right and permissive intervention. An intervener as of right must show, among other things, that it has an interest relating to the property or transaction that forms the basis of the ongoing suit; the disposition of the action threatens to create a practical impediment to its ability to protect its interest; and no existing party adequately represents its interests.  The requirement that an intervener have an interest relating to the property or transaction which is the subject of the action is satisfied where the intervener’s claims bear a sufficiently close relationship to the dispute between the original litigants and where the interest is direct, not contingent.  Put another way: (1) Are the interests of a present party in the suit sufficiently similar to that of the absentee such that the legal arguments of the latter will undoubtedly be made by the former; (2) is that present party capable and willing to make such arguments; and (3) if permitted to intervene, would the intervener add some necessary element to the proceedings which would not be covered by the parties in the suit?

It will be nearly impossible for the Corcoran supporters to meet this standard for one simple reason: by law, the AG is deemed to represent their interests.  If members or supports of any nonprofit could intervene in its management, the rule would be swallowed by the exception.  The students probably have the best case for a tangible interest since they selected and are paying for a particular institution, but innumerable colleges have gone under or been subsumed into others of the years, and the student body is not given standing to be in the lawsuit itself.  Groups of friends and supporters are routinely turned away from intervention like this, largely for practical reasons.  And they really have no greater concrete stake in the institution than the public at large, however strongly they feel.

If the court determines that the criteria for intervention as of right are not satisfied, it could allow the movants to intervene under Rule 24(b), which allows permissive intervention when an applicant’s claim or defense and the main action have a question of law or fact in common.  This is a purely discretionary standard, and one rarely invoked.  This, too, is hard to envision in the Corcoran’s case.

But any motion to intervene, successful or not, also serves a secondary purpose: to lay out the proposed interveners’ view of the case.  This petition is particularly detailed in that respect.  Even if intervention is denied (as I expect it will be), the complaint sets out for the record what the supporters believe are the flaws in the cy pres proposal.  Once filed, the trustees can’t unring that bell, as we say.

Both parties have agreed to expedited briefing on the intervention, so stay tuned for more developments.