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June 13, 1974

UNITED STATES JAYCEES, INC., and New York State Jaycees, Inc., Defendants

Gurfein District Judge.

The opinion of the court was delivered by: GURFEIN

GURFEIN, District Judge.

The New York City Jaycees, Inc. ("Local") sues to enjoin the United States Jaycees, Inc. ("National") and the New York State Jaycees, Inc. ("State") from revoking the Charter of the plaintiff.

 The plaintiff has a charter granted by the national body. The by-laws of National provide that active membership is limited to young men between the ages of 18 and 36 of good moral character. It has been interpreted to exclude otherwise qualified female applicants.

 Local had the same by-law and the same interpretation. On May 18, 1971 a proposal was made that the by-law be amended to strike the word "men" and to substitute the word "people." This was passed by the membership on May 31, 1973. *fn1"

 In June, some women paid their dues and were admitted to the local chapter, and in August the dues were remitted to National by Local. In October, National notified Local that the dues would not be accepted without written verification that all members were male. Thereafter National took the dues but listed the women as "associates."

 On October 10, 1973 the plaintiff received a notice that it was in violation of the by-laws of the defendant National which prohibited active membership for women. The plaintiff was ordered to show cause at the Executive Board of Directors meeting on February 16, 1974 why the plaintiff's charter should not be revoked. On February 11, 1974 this Court issued a temporary restraining order to prevent revocation of the charter.

 A motion was made for a preliminary injunction and adjourned by consent. In the meantime, National proceeded to revoke the charter of Local but suspended the effectiveness of the revocation pending the determination of this action. *fn2"

 The defendant National moved to quash service of the summons and complaint upon the ground that the Court lacked jurisdiction over its person. Rule 12(b)(2), Fed.R.Civ.P. Decision on this motion was reserved.

 An evidentiary hearing was held on April 9, 1974 on the motion for a preliminary injunction.


 The Facts Found

 The plaintiff is incorporated in New York; the defendant National *fn3" in Missouri. National's headquarters are located in Tulsa, Oklahoma. *fn4" National began in 1915 in St. Louis as the Young Men's Progressive Civic Association. In 1920 the organization became the Junior Chamber of Commerce. In 1965 it changed its name to the United States Jaycees, Inc. Currently there are 6,500 local chapters in each of the 50 states and the District of Columbia with membership lists running approximately 325,000 in number. There are additionally international affiliates in 82 countries. *fn5"

 Local was founded in 1926 under the name Young Men's Board of Trade. In 1948 it was granted a charter by National. Its name was changed in 1965 to New York City Jaycees, Inc. Local has a membership of 114. *fn6"

 The by-laws of National require that Local's by-laws "not contain provisions contrary to [the] by-laws [of the United States Jaycees] or the Constitution of its existing state organizations . . ." Article IV By-Law 4-2. *fn7"

 The National structure consists of a nineteen member executive committee and the presidents of all the states and District of Columbia. This Committee has the responsibility for formulating national policy and by-laws, adopting national programs and annual budgets. There is also a paid staff at the national level. *fn8"

 National provides services to State organizations and local chapters. *fn9" Although at one time its purpose was to promote the business interests of its members, in recent years it has broadened its membership, and its program emphasis is on community services. By the defendant's statement it is involved in programs for low cost housing, prevention of child abuse, convict rehabilitation, transportation for the elderly, control of the environment and many other civic activities. The plaintiff alleges, and I so find, that membership in the Jaycees is also still linked to advancement in the business community.

 National is affiliated with the United Jaycees Foundation ("the Foundation") which is governed by a self-perpetuating board of seven Trustees. The original trustees at the time of formation of the trust were three in number and they were officers of the defendant. The Board reports annually to National's Board.

 The fiscal year ended July 1, 1973 was the first year National received any federal funds. The budget for the year ending July 1, 1974 totals $3,639,000 of which $1,143,000 or 31.4% comes from funds supplied by the Federal Government. Of that amount, $545,085 is received by National directly from the Federal Government, the remaining federal funds coming through the Foundation. $1,200,000 comes from membership dues which are transmitted by mail to National by the State chapters after they have collected them from the locals. The part of the budget not derived from federal funds and dues comes from contributions by corporations and foundations, and the sale of supplies.

 The specific federal grants and contracts break down as follows:

 (a) National itself is a party to two federal contracts: (1) For the control of venereal disease which was entered into with the Department of Health, Education and Welfare ("HEW") in the amount of $99,923; *fn10" and (2) for prevention of alcohol abuse, entered into with HEW for $445,162. *fn11" Of the latter amount, $140,000 is given for "seed" grants to local chapters and state organizations. In 1972-73, the New York State Chapter was ...

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