Fri, Mar 18, 1994

The Members of the Board of Directors
Corporate Secretary
c/o SCA Corporate Offices
P.O. Box 360742
Milpitas, CA 95036-0743

Dear Sirs:

I gather from a recent communication with Marion Kee, based on a conversation with Randall Tatro, that the Board has been told by the Corporate Counsel that advisory members are not "members" of the Corporation and thus do not have access to the books--that the passage in the By-laws does not refer to advisory members. I am not an attorney, but I have spent the past eight years teaching and doing research at two leading law schools (U of Chicago and Cornell), and have lots of attorneys to consult. If your attorney has given you that advice, I believe that he is either misleading you or incompetent.

The advice would be correct if the issue were the statutory right of members of a Corporation to see its books. That right is given to members by the relevant California Statutes and applies only to statutory members, of which the Corporation has none. But the issue is the right to inspect the books given to members by the bylaws of this particular corporation. The bylaws of the SCA Inc. are quite explicit about including advisory members as one of the two classes of members (the other are statutory members, of which there are none) and giving them the rights of members. The bylaws are equally explicit about stating that one of the rights of members is access to the books. I quote the relevant passages below. Assuming you have not recently changed them, they leave no basis I can see for the advice Mr. Seeley is said to have given you.


A. STATUTORY MEMBERS. The Society is a public benefit corporation and shall not have any members within the meaning of Section 5056 of the California Corporations Code. It is not a mutual benefit nonprofit corporation permitting distributions to members.

B. NONSTATUTORY MEMBERS. The Board of Directors has designated the following categories of advisory membership. Such advisory members are not members within the meaning of Section 5056 of the California Corporations Code.

1. Sustaining Membership conveys eligibility to hold office in the Society, as well as subscriptions to Tournaments Illuminated and the appropriate regional newsletter, and any other privileges designated by the Society or its subdivisions as accruing to members of the Society.



The Society shall keep correct and complete books of account and records and shall also keep Minutes of the proceedings of the meetings of its Board, and shall keep in the custody of the Registrar of the Society a record giving the names and addresses of the persons described in Article V, which record shall not be copied or viewed by any person except the officers and Directors, except with the permission of the Board. The books of account may be inspected by any member or member's agent, for any reasonable purpose at any reasonable time. ...

As this makes clear, it is members, not merely statutory members, that have the right to inspect the books. The Corporation's current policy of refusing access to members who ask for it is thus not only indefensible as a matter of policy, it is also in violation of the Corporation's legal obligation to its advisory members.

I gather that Mr. Tatro is trying to do something about the Executive Director's refusal to release the Corporation's Form 990's. As I hope you are aware, the penalty for willful refusal to make these forms available (to anyone, not just members) is a thousand dollars per refusal.

Sincerely Yours

David Friedman
(Cariadoc of the Bow)
309 Mitchell St.
Ithaca, N.Y. 14850
Visiting Professor
Cornell Law School

cc: Randall Tatro, 802-893-6831,
164 Everest Road, Milton, VT 05468