Powers v. McDonough

Cite as 24-6576
Filed December 23, 2025
Ninth Circuit

By Michelle Barnett Batista
Aaron, Riechert, Carpol & Riffle, APC
www.arcr.com

Headnote: Charitable Trusts – Special Interest Standing

Summary: Intended beneficiaries of charitable trust had special interest standing to sue to enforce charitable trust.  

In 2022, a putative class of unhoused veterans with severe disabilities and mental illnesses sued the United States Department of Veterans Affairs (VA) and the Department of Housing and Urban Development (HUD) seeking to restore the West Los Angeles VA Grounds to its intended use of housing disabled veterans. Plaintiffs claimed that the original 1888 Deed created a charitable trust and that the VA breached enforceable fiduciary duties by entering into commercial leases that did not principally benefit veterans. The district court ruled in favor of Plaintiffs. The VA and HUD appealed.

The Ninth Circuit affirmed the district court’s ruling that Plaintiffs have special interest standing to sue but reversed the district court’s judgment in favor of Plaintiffs on their charitable trust claim. A suit for enforcement of a charitable trust may be maintained by a person who has a “special interest in the enforcement of the trust.” Special interest standing involves balancing the need to protect the trustee from vexatious litigation by a large, changing, and uncertain class of intended beneficiaries with the concern that charitable trusts may lack oversight due to the Attorney General’s limitations of information and resources. Here, the putative class – disabled unhoused veterans for whom receipt of the trust’s benefits of supportive housing and healthcare can make the difference between life and death – have a sufficient special interest to enforce the trust on their own behalf. Additionally, balancing the policy concerns and objectives supports special interest standing. The VA consistently failed to restore the West Los Angeles VA Grounds to its intended purpose of housing disabled veterans. Despite public coverage of the VA’s failures, the Attorney General had not taken any steps to ensure the charitable trust was being properly managed. Although Plaintiffs had standing to sue, the Ninth Circuit reversed the charitable trust claim finding no judicially enforceable fiduciary duties under the Leasing Act.

https://cdn.ca9.uscourts.gov/datastore/opinions/2025/12/23/24-6576.pdf