Maine Supreme Court Weakens Charitable Immunity
From the desk of Rob Levin – In a decision handed down this past July, the Maine Supreme Court significantly narrowed the scope of the charitable immunity doctrine in Maine. The effect of this decision will be to expand the tort liability exposure of Maine charitable organizations. For organizations that carry commercial general liability insurance, the added liability exposure likely will be minimal. But organizations without such insurance would face considerably heightened level of risk.
Charitable immunity has existed in Maine for almost 100 years, first as a common law doctrine and eventually recognized implicitly by statute in 1965, at 14 MRS § 158. In a nutshell, the doctrine is important because it has meant that Maine charitable organizations could raise it as a defense to dismiss a lawsuit in its very early stages. The rationale behind the doctrine is that funds donated to charities should not be diverted to non-charitable purposes such as satisfying tort claims. Although several other states enacted versions of charitable immunity in the past, Maine is one of the few states to have a relatively robust doctrine still intact.
In Picher v. Roman Catholic Bishop of Portland, 2009 ME 67, the Maine Supreme Court held that the charitable immunity doctrine does not apply to intentional torts. In the wake of the Picher case, charitable immunity is somewhat less robust, as it only applies to non-intentional tort actions, e.g., negligence. The tort claims in Picher were based on alleged sexual abuses condoned by the church, and were decidedly intentional in nature. Other intentional torts include: assault, battery, conversion (theft), false imprisonment, trespass to land, and intentional infliction of emotional distress.
Perhaps the most common kinds of intentional torts in the nonprofit world are those of slander (verbal defamation) and libel (written defamation). Any nonprofit organization that maintains a website, publishes a newsletter, or has meetings (i.e., all nonprofit organizations) has some fundamental exposure to such defamation claims. The typical commercial general liability insurance policy does cover defamation claims, so organizations that have such insurance will remain protected within the limits of their policies. However, for organizations that have chosen to rely on charitable immunity instead of purchasing insurance, that cost-benefit calculation is now much less favorable.