CHICAGO (CN) – An Eastern Wisconsin Girl Scout troop can sue to prevent its dissolution by the national organization, the 7th Circuit ruled.
The national organization “charters” local councils, authorizing them to sell Girl Scout cookies and other merchandise in exchange for membership fees.
The Manitou Council, which boasts more than 5,500 scouts, was targeted for elimination as part of nationwide downsizing operation. Beginning in 2004, the national organization decided to shrink from around 300 to 100 councils.
U.S. District Judge J.P. Stadtmueller in Milwaukee had ruled in favor of the national Girl Scouts, saying the merger was protected as a right of free expression.
The 7th Circuit reversed, however, in a 19-page opinion that says the organization’s structure mirrors that of a major franchise. Eliminating the troop without good cause would violate the Wisconsin Fair Dealership Law.
“From a commercial standpoint the Girl Scouts are not readily distinguishable from Dunkin’ Donuts,” Judge Richard Posner wrote for the court.
The ruling rejected the argument that nonprofits should be exempt from the law.
“If the antitrust laws apply to the nonacademic activities of universities, as they do … though universities exist principally to speak, then franchise laws can apply to the Girl Scouts’ dealership structure, which is optimized for the sale of cookies,” he added.
The judges also criticized “unprofessional features” of the brief filed by the national organization’s attorneys with Hogan Levells, noting that the firm was misleading in its use of a Supreme Court ruling to bolster its argument.
“The brief distorts the Court’s meaning, and this could not be accidental,” Posner wrote.