CAI lobbyists – HOA Constitutional Government

The need to regulate CAI monopoly

To answer to the question I raised, “Is CAI a coercive HOA monopoly?,” required further research and analysis, which resulted in finding extensive and strong evidence, gathered from over the years, that CAI is definitely acting in violation of the anti-trust statutes; steps need to be taken to break up the monopoly. Below are my recommendations to regulate CAI’s activities to allow for the voice of others to be heard, especially from owners of HOA homes who suffer under the monopoly.

A. Regulations on CAI monopolistic activities

1. CAI to cease all references and implications that it represents HOAs before the legislature, all government bodies, before the courts and including amicus curiae briefs without express consent to do so;

2. Require CAI to state that it is a business trade nonprofit, explicitly a 501(c)6 and not an educational entity;

3. Inform readers that it cannot have HOAs as members since HOAs are consumers of the services provided by the trade group members;

4. It is actively engaged in lobbying state legislatures on bills favorable to the HOA and not necessarily to the membership;

5. Inform owners and the public in general that its attorney members represent the HOA personified by the Board of Directors and not the member.

B. Regulations on HOA activities in support of CAI monopoly

1. Similar to representing employees in bargaining with management, propose federal laws that permit and protect HOA members to organize its membership to bargain in good faith for amendments to the governing documents and Rules changes;

2. Propose legislation that allows for the creation and protection of a national HOA Homeowners Coalition, similar in intent as the National Labor Relations Board (NLRB);

3. To restrict the HOA from interference with the newly established organized national and state member entities;

4. Quarterly inform the membership of the number of directors, officers, managers, and attorneys who are members of CAI;

5. Publish the total annual amount of spending for CAI dues paid for any HOA members, donations, other fees, and expenditures paid for by the HOA;

6. Inform the membership that all communications with their attorney are not exempt from disclosure by state law,

7. and all communications with the HOA attorney constitutes corporate documents that are accessible to the members, unless explicitly exempted under “Pending or contemplated litigation” apply;

8. The CC&Rs or Declaration for any planned community, condominium association or homeowners association shall state that, “The association hereby waivers and surrenders any rights or claims it may have, and herewith unconditionally and irrevocably agrees to be bound by the US and State Constitutions and laws of the State as if it were a local public government entity.”

Is CAI a coercive HOA monopoly?

Community Associations Institute (CAI) dominates themarket for HOA educational services and controls the market around it by means of its extensive lobbying of state legislatures and by holding seminars, conferences and publications extolling its self-serving agenda that promotes the HOA legal structure and scheme; by the support of state agencies that sponsor CAI seminars and classes, and by private entities trained under the CAI education program – ECHO in California and CALL in Florida, as examples. It has become successful in lessening competition as a result of its “improper conduct.”

A quick review of the internet postings shows (emphasis added),

“[The] courts ask if that leading position was gained or maintained through improper conduct—that is, something other than merely having a better product, superior management or historic accident. In the end, courts will decide whether the monopolist’s success is due to ‘the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.’”

“Coercive monopoly” is defined as:

“A monopoly that is created using extraordinary power such as a government or international agency. For example, a government that grants legal protections to firms that create barriers to entry to prevent competition. Firms commonly lobby governments for rules that protect them from competition.”

With respect to CAI, a tax-exempt nonprofit, can it be charged as a monopoly? It is a well-established fact that no state has granted CAI a protective government monopoly exclusion — the right to lessen competition. And that includes local governments in several states that openly support and encourage the CAI HOA program; some states have actually employed CAI as its authority to educate the public regarding HOAs.

The answer is YES according to the following Supreme Court case. The case addresses the instance where the state assigns a “governmental monopoly” (making it a state-actor) to an entity (which HOAs are not), but must explicitly state that the entity has the right to lessen competition,

“Under this Court’s state-action immunity doctrine, when a local governmental entity acts pursuant to a clearly articulated and affirmatively expressed state policy to displace competition, it is exempt from scrutiny under the federal antitrust laws. In this case, we must decide whether a Georgia law that creates special-purpose public entities called hospital authorities and gives those entities general corporate powers, including the power to acquire hospitals, clearly articulates and affirmatively expresses a state policy to permit acquisitions that substantially lessen competition. Because Georgia’s grant of general corporate powers to hospital authorities does not include permission to use those powers anticompetitively, we hold that the clear-articulation test is not satisfied, and state-action immunity does not apply.”

(F.T.C. v. Phoebe Putney Health System (133 S.Ct. 1003 (2013)).

CALL TO ACTION

I believe the case can be made for a CAI monopoly and for the Feds to investigate (Citizens Complaint Center, Antitrust Division, DOJ), and to file an appropriate antitrust lawsuit ASAP.

Do you stand behind the US Constitution or your HOA ‘constitution’?

Many courts have referred to the Declaration of Covenants, Conditions and Restrictions (CC&Rs) as the HOA constitution.

Arizona’s HB 2158 is a second try (Arizona HB 2052 restores homeowner constitutional speech protections ) to prohibit restrictions on HOA members’ freedom of political speech with respect to HOA governance issues and matters. It has passed put of committee and Caucus.

This important bill has been sitting for an extended 2 week time awaiting the House leadership to schedule it for a full House vote of all the members. NOT A GOOD SIGN! My years of experience lead me to believe it does not have the support of the leadershp that has the right, under House Rules, to withhold bills from further votes.

HB 2158 (2022). You can read the bill at the legislature’s website. Read the important amendments below. This is your chance to stand up for constitutional protections against the CAI lobbyists, many whose members have been or are SCG directors – conflict of interest!

“L. Notwithstanding any provision in the community documents, an associociation [sic] may not prohibit or unreasonably restrict a member’s ability to peacefully assemble and use private or common areas of the planned community . . . . An individual member or group of members may organize to discuss or address planned community business, including board elections or recalls, potential or actual ballot issues or revisions to the community documents . . . . The association shall not restrict posting notices of these informal member meetings on physical or electronic bulletin boards used by the association for posting notices for the association’s or board of director’s official meetings.”

This bill has support from the Nevada Supreme Court opinion in Kosor (NV supreme court upholds HOAs as public forums (re: Kosor 2021)) that contained several California opinions serving as legal precedent.

“[A] unit owner’s association or a planned community association (association) may not prohibit a unit owner or member (member) from peacefully assembling and using private or common elements of the community . . . legitimate and valid criticisms of your HOA and its president and board are protected from HOA lawsuits of defamation and libel.”

“Nextdoor.com post qualifies as a public forum for the purposes of anti-SLAPP protections. . . .these steps [Kosor’s statements] do not seem to differ significantly from that which might be required to view posts on Facebook; that is, a post on Nextdoor.com is as compatible with expressive activity as one on the other platform, which we have already held can support a public forum.”

“The HOA here is no less of ‘a quasi-government entity’

* * * *

The following is an excerpt from a lengthy email sent to me by a long time AZ homeowner rights advocate, Dennis Legere. It and his email are made public with Dennis’ permisssion. It reveals the obstacles an hostiity he faces trying the get HOA reform legislation to restore lost rights and freedoms. It contains his comments on the heavy opposition from CAI and AACM (AZ managers association, CAI trained).

“The ridiculous nature and hidden motivation of the HOA trade groups [CAI and AACM] is what makes any HOA meaningful legislation so difficult to get introduced or protected from demands from the trade groups for provisions that benefit them only.”

Take back controll of your HOA! Write your Representative in support of this bill. Also write the sponsor, Jack Kavanagh (jkavanagh@azleg.gov) and the House leaders in support of this bill urging that it be submitted for a hearing by all the House members. Do it today!

House leaders:

Rbowers@azleg.gov – Speaker (R)

tgrantham@azleg.gov – Speaker Pro Temp (R)

btoma@azleg.gov – Majority Leader (R)

lbiasiucci@azleg.gov – Majority Whip (R)

rbolding@azleg.gov – Minority Leader (D)

ddegrazia@azleg.gov – Minority Whip (D)

jlongdon@azleg.gov – Asst Minortiy Whip (D)

The people at CAI working against member interests

CAI Advocacy Blog for 11/23/2021, email (Click on this link to see state members).

Thank you to these incredible volunteer leaders and CAI members. Wishing you, your family, and friends a Happy Thanksgiving. We’re so thankful for you!

Government and Public Affairs Committee
Mr. T. Peter Kristian, CMCA, LSM, PCAM
Ms. Sally L. Balson
Mrs. Marilyn E. Brainard
Mrs. Wendy Bucknum, CMCA, AMS, PCAM
Ms. M. Katherine Bushey, Esq.
Mr. Joseph Carleton, Esq., CCAL fellow
Mr. Joseph Crawford, CMCA, AMS, PCAM
Ms. Sandra K. Denton, CMCA, LSM, PCAM
Ms. Jennifer Eilert, CIRMS
Mr. Michael Johnson, CMCA, AMS, PCAM
Mr. John Krueger
Ms. Lisa A. Magill, Esq., CCAL fellow
Mr. Nathan R. McGuire, Esq.
Ms. Janet L. Newcomb
Mr. Matt D. Ober, Esq.
Mr. Scott J. Sandler, Esq., CCAL fellow
Mr. Todd A. Sinkins, Esq., CCAL fellow
Ms. Wendy W. Taylor, CMCA, AMS, LSM, PCAM
Mr. Michael Laurence Traidman
Mr. Craig F. Wilson Jr., CMCA, AMS, PCAM
Mr. Ronald L. Perl, Esq. CCAL fellow
Mr. J. David Ramsey, Esq., CCAL fellow

Federal Legislative Action Committee
Mr. Ronald L. Perl, Esq., CCAL fellow
Mrs. Pamela D. Bailey, CMCA, AMS, PCAM
Mr. Jeffrey A. Beaumont, Esq., CCAL fellow
Mrs. Marilyn E Brainard
Mrs. Wendy Bucknum, CMCA, AMS, PCAM
Mr. Robert M. Diamond, Esq., CCAL fellow
Mr. Andrew S. Fortin, Esq.
Mr. T. Peter Kristian, CMCA, LSM, PCAM
Ms. Lisa A. Magill, Esq., CCAL fellow
Mr. Stephen M. Marcus, Esq., CCAL fellow
Mr. George E. Nowack Jr., Esq., CCAL fellow
Mr. J. David Ramsey, Esq., CCAL fellow
Mr. Stefan Richter, Esq., CCAL fellow
Mr. Clifford J. Treese, CIRMS

Champlain Tower South Task Force Leadership and Committee Contributors
Ms. Lisa Magill, Esq., CCAL fellow
Mr. Bob Browning, PCAM, RS
Mr. Mitchell Frumkin, RS
Mr. Robert Diamond, Esq., CCAL fellow
Mr. Stephen Marcus, Esq., CCAL fellow
Ms. Jennifer Eilert, CIRMS
Ms. AJ Scott, CIRMS
Mr. Phil Masi, CIRMS
Mr. Cliff Treese, CIRMS

(The following underlined are NOT links. See above link.)

Alabama State Legislative Action Committee Members

Arizona State Legislative Action Committee Members

California State Legislative Action Committee Members

Colorado State Legislative Action Committee Members

Connecticut State Legislative Action Committee Members

District of Columbia State Legislative Action Committee Members

Florida Legislative Alliance

Georgia State Legislative Action Committee Members

Hawaii State Legislative Action Committee Members

Idaho State Legislative Action Committee Members

Illinois State Legislative Action Committee Members