Thank You For Submiting Feedback!
The Oklahoma General Corporations Act, 18 O.S.1991 § 1001 et seq., provides in § 1018 that no act of a corporation shall be invalid because it was ultra vires, but the lack of capacity or power of a corporation to act may be asserted (1) by a shareholder in an action to enjoin the corporation from performing acts or transferring property, (2) by the corporation in an action against an officer or director for loss or damage due to unauthorized acts, and (3) by the Attorney General in an action to dissolve the corporation or enjoin it from transacting unauthorized business.
Total, an Internet service provider, sued Caddo for injunctive and declaratory relief, alleging the acts of Caddo in operating an Internet service provider were ultra-vires and not within the powers conferred upon rural electric cooperatives by the Rural Electric Cooperative Act. Caddo moved to dismiss on the grounds Total lacked standing to bring this action, the trial court lacked subject matter jurisdiction, and Total failed to state a claim upon which relief could be granted. The trial court granted the motion and dismissed the action.
Does Total have standing to bring the action against Caddo?
An action in the nature of quo warranto may be brought when a corporation "abuses its power or intentionally exercises powers not conferred by law." The parties disagree as to who has standing to bring such an action. Caddo points to 18 O.S.1991 § 1018 as allowing only the corporation itself, a shareholder, or the Attorney General to assert a corporation's lack of power or capacity to do an act. Total argues it is a competitor and therefore has "an interest adverse to [Caddo's] illegal internet service provider" sufficient to provide standing.
he quo warranto statute, 12 O.S.1991 § 1533, is ambiguous as to who may claim an interest adverse to the franchise, gift, or grant which is the subject of the action when such a claim challenges a corporate act as ultra vires. When faced ambiguity, the court will apply rules of statutory construction to discern legislative intent. Using the maxim of statutory construction, "expressio unius est exclusio alterius" on the pertinent provisions of the Oklahoma General Corporations Act, it is clear that there is such an contrast between the situations where assertion of ultra vires acts is specifically authorized and those situations not mentioned as to lead to the inference the Legislature intended to exclude the authority to assert lack of corporate authority to act in any situation not expressly mentioned in § 1018. Total's action may only be brought by the Attorney General, a shareholder or member of Caddo, or Caddo itself.
Total cites Okla. Gas & Elec. Co. v. Okla. Elec. Coop. (OG&E), 1973 OK 158, 517 P.2d 1127, as an example of a case where a competitor was allowed to challenge a cooperative's intrusion into alleged illegal areas. In that case, OG&E alleged OEC invaded its franchise granted by the City of Norman. In the instant case, however, there is no franchise, gift, or grant, which is the subject of the action. Therefore, 12 O.S.1991 § 1533 is inapplicable and 18 O.S.1991 § 1018 is controlling.