Autonomous Region of Narcotics Anon v. Narcotics Anon World Svcs
Case Number: B309376
Court: Cal. Ct. App.
Date Filed: 2022-04-25
Case Brief – Autonomous Region of Narcotics Anonymous v. Narcotics Anonymous World Services, Inc.
Court: COURT OF APPEAL OF THE STATE OF CALIFORNIA
Date: 2025-09-03
Case Number: B309376
Disposition: The Court affirmed the judgment of the Superior Court and awarded costs to the respondent.
Holding
The court held that the Autonomous Region of Narcotics Anonymous lacked standing to sue because it is neither a settlor of the revocable charitable trust that controls Narcotics Anonymous’s intellectual property nor a party with “special interest” standing; consequently, the probate court’s denial of leave to amend was proper.
Narrative
Lead – In a decision that sharpens the boundary between internal governance disputes and judicial oversight of charitable trusts, the California Court of Appeal affirmed a probate court’s dismissal of a suit brought by a regional Narcotics Anonymous delegate group. The appellate panel concluded that the Autonomous Region of Narcotics Anonymous could not invoke either statutory revocation‑power standing or the doctrine of special interest standing to enforce the NA Intellectual Property Trust, a revocable charitable trust that holds the organization’s literature and trademarks.
Procedural History – The Autonomous Region filed a petition in the Superior Court of Los Angeles County alleging that Narcotics Anonymous World Services, Inc. (“World Services”), the trustee of the NA Intellectual Property Trust, breached fiduciary duties, misused trust assets, and should be removed. The petition sought a court order to distribute trust literature, audit payments, disgorge profits, and award attorney’s fees, invoking Probate Code §§ 16420, 16440, and 17200. World Services moved to dismiss for lack of standing. After a hearing, the trial court sustained the demurrer without leave to amend. The Autonomous Region appealed, arguing (1) that § 15800 of the Probate Code confers standing on any entity possessing the power to revoke a revocable trust, and (2) that it possessed “special interest” standing as a charitable‑trust beneficiary. The Court of Appeal reviewed the appeal de novo for standing and reviewed the trial court’s discretion on leave to amend.
Facts – In 1993 the Fellowship of Narcotics Anonymous created the NA Intellectual Property Trust to hold the organization’s literature, trademarks, and related assets. The trust instrument defines the “settlor” as “The Fellowship of Narcotics Anonymous, as given voice by its groups through their regional delegates at the World Service Conference.” The instrument further provides that the settlor may add, delete, or revise trust property by a two‑thirds vote of regional delegates and may revoke the trust entirely. World Services, a nonprofit corporation, is named as trustee; the Fellowship, as a whole, is the beneficiary. The Autonomous Region is a regional delegate group that claims to have a “special and definite interest” in the trust’s administration.
Issues –
- Whether the Autonomous Region qualifies as a “settlor” under § 15800 and thus has standing to sue for breach of fiduciary duty.
- Whether the Autonomous Region possesses “special interest” standing to enforce a revocable charitable trust.
- Whether the trial court abused discretion in denying leave to amend the complaint.
Reasoning –
Statutory Standing under § 15800 – The appellate court emphasized that the text of the trust instrument unequivocally identifies a single settlor—the collective Fellowship acting through its regional delegates at the World Service Conference. The instrument never uses a plural “settlors” language, and the operational rules require a two‑thirds delegate vote to revoke the trust. The court rejected the Autonomous Region’s argument that it is “one of many settlors” because the trust’s definition of settlor is singular and the delegate group alone cannot act unilaterally. Interpreting the instrument to treat each delegate group as a settlor would render the revocation provision meaningless and violate Tradition Four of Narcotics Anonymous, which expressly limits unilateral action that could affect the whole Fellowship.
Special‑Interest Standing – The court turned to the Holt doctrine, which permits “special interest” standing to enforce charitable trusts when the settlor is no longer able to supervise the trust. The appellate panel noted that Holt’s rationale was predicated on the absence of a living, competent settlor. Here, the trust is expressly revocable, and the Fellowship retains the power to revoke or amend the trust at any time. Because the settlor can supervise the trust directly, the policy justification for special‑interest standing evaporates. The court found no authority extending the Holt doctrine to revocable charitable trusts and observed that California case law (e.g., Patton v. Sherwood, Hardman v. Feinstein) never applied special‑interest standing to revocable trusts.
Leave to Amend – The trial court’s denial of leave to amend was upheld because the Autonomous Region failed to demonstrate a viable amendment that could cure the standing deficiency. The appellate court reiterated that a party seeking leave bears the burden of showing a reasonable possibility of curing the defect, a burden the Autonomous Region could not meet.
Disposition – The Court of Appeal affirmed the Superior Court’s judgment, ordered costs against the Autonomous Region, and declined to entertain any further amendment of the complaint.
Impact and Unresolved Questions – This decision reinforces a strict constructionist approach to trust instruments, especially where the settlor’s identity is expressly defined. It clarifies that § 15800 does not create a blanket standing rule for any entity that claims a revocation power; the statutory language must be read in concert with the trust’s own definitions. Moreover, the ruling narrows the scope of “special interest” standing, confirming that revocable charitable trusts remain under the direct control of their settlors, thereby insulating them from third‑party litigation absent a demonstrable lack of settlor supervision.
The opinion leaves open the question of whether a non‑settlor delegate group might obtain standing under a different statutory provision, such as California Corporations Code § 5142, if it could demonstrate a reversionary or contractual interest in the trust assets. Future litigants may attempt to craft arguments based on ancillary statutes or on the fiduciary duties owed by trustees to “beneficiaries” that are more narrowly defined than the broad Fellowship. Until the California Supreme Court addresses the intersection of revocable charitable trusts and third‑party enforcement, the Holt doctrine will remain confined to irrevocable trusts, and the standing bar articulated here will likely deter similar intra‑organizational challenges.
Referenced Statutes and Doctrines
- Probate Code §§ 15800, 16420, 16440, 17200 – standing for revocable trusts; causes of action for breach of fiduciary duty.
- Probate Code §§ 15002, 15004 – incorporation of common‑law trust principles; Attorney General supervision of charitable trusts.
- Corporations Code § 5142 – parties authorized to enforce charitable trusts (not extended to revocable trusts in this case).
- Restatement (Third) of Trusts §§ 3, 37, 94 – definitions of settlor, trustee removal, and special‑interest standing.
- Holt v. College of Osteopathic Physicians & Surgeons, 61 Cal.2d 750 (1964) – foundational case on special‑interest standing for charitable trusts.
- Estate of Giraldin, 55 Cal.4th 1058 (2012) – revocable‑trust standing principles.
- Brown v. Labow, 157 Cal.App.4th 795 (2007) – textual interpretation of trust instruments.
- Schifando v. City of Los Angeles, 31 Cal.4th 1074 (2003) – standard for granting leave to amend.