LNC May Face Derivative Lawsuit By Libertarian Party Members

Independent Political Report has confirmed that the Libertarian National Committee may well face a derivative action lawsuit by displeased members of the national party.  We have not yet seen the detailed grounds or the list of litigants,  We gather that at least fifty litigants would be required.

As the LNC is incorporated in D.C., D.C. law appears to apply.  The relevant law appears to indicate that such a suit is “… to enforce a right that the corporation or association may properly assert but has failed to enforce. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of shareholders or members who are similarly situated in enforcing the right of the corporation or association.”

Derivative actions are more typically brought in for-profit corporations by stockholder groups of adequate size, for example to remove some number of officers or directors. In a derivative action, a group of persons sue on behalf of the corporation to protect the corporation and deal with rogue actors, in this case members of the national committee.