F. d. v. Blue Ridge Rural Electric Cooperative, Inc.
United States District Court for the Western District of South Carolina · Civil Procedure
Civil ProcedureMotion to dismissTort immunityRule 12(b)(6)failure to state a claimnonprofit cooperativerural electric cooperativecharitable immunity analogy
Facts
The complaint alleged that the plaintiff suffered severe injuries because of the negligence and willfulness of the defendant's agents, servants, and employees acting within the scope of their employment. The defendant was a nonprofit rural electric cooperative organized under the South Carolina Rural Electric Cooperative Act to supply electric energy in rural areas. Its funds were limited by statute to specified operational and reserve purposes, and neither the statute nor the cooperative provided any fund for payment of tort claims. The cooperative operated for no one's profit, and its funds had been used strictly in accordance with the statutory scheme.
Issue
Whether a nonprofit rural electric cooperative organized under the South Carolina Rural Electric Cooperative Act may be sued in tort for injuries allegedly caused by the negligence of its employees, or whether it is immune from such suits under South Carolina law.
Rule
Where a nonprofit membership cooperative is created under South Carolina law solely to provide electric energy to rural areas, operates for no one's profit, and the statute provides no fund or authorization for payment of tort claims, it is not subject to suit in tort under South Carolina law. The court applied the same public-policy rationale used by South Carolina courts to grant full tort immunity to charitable institutions.
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One of 10 multiple-choice questions for this case. Pick an answer to see why.
Nora Kim was injured near Spartanburg, South Carolina, when a truck owned by Palmetto Foothills Electric Cooperative allegedly struck her bicycle during a service call. Palmetto Foothills is organized under South Carolina's rural electric cooperative statute, serves only rural customers, operates on a nonprofit membership basis, and its funds are limited to operating expenses, debt service, reserves, expansion, and member education, with no tort-claims fund authorized by statute.
Palmetto Foothills moves to dismiss for failure to state a claim. How should the court rule under the governing doctrine?
Explanation. The majority opinion treats a South Carolina nonprofit rural electric cooperative as immune from tort suit when it is organized solely to supply electric energy in rural areas, operates for no one's profit, and the statutory scheme provides no fund or authorization for tort liability. The rationale is public policy analogous to charitable immunity, not the plaintiff's status. (Derived from F. d. v. Blue Ridge Rural Electric Cooperative, Inc. (n.d.).)