‘The Spokane Case’ gives private clubs new look at policies

By Craig Smith, The Seattle Times
“The Spokane case” is what it is called in private-club circles.

If you have friends who belong to a private club, odds are excellent they have heard of it. If they are on the board of a private club, they know it well.

Tremors continue from a five-year-old ruling made in a marathon lawsuit filed in 2009 that resulted in the bankruptcy and sale of the Spokane Country Club.

What started as a gender-discrimination lawsuit by four women members ended with the club declaring bankruptcy and being sold to the Kalispel Indian Tribe. The tribe operates it as the semiprivate Kalispel Golf and Country Club. The course is an amenity of the Northern Quest Resort & Casino and offers stay-and-play packages. It is also open to some public play, which explains the golf-industry description of “semiprivate.”

The 118-year-old Spokane club, site of the first U.S. Women’s Open in 1946, was purchased for $3 million by the tribe in December.

At the heart of the case for other private clubs — whether they be yacht clubs, tennis clubs or golf clubs — is a ruling made by Spokane County Superior Court Judge Linda Tompkins in 2011.

She ruled the club was not exempt from public-accommodation provisions of state anti-discrimination laws. Usually, private-membership clubs are exempt from these laws on grounds of preserving rights of privacy and freedom of association.

In other words, the private club had to operate as if it were a public business and be vigilant not to offend anyone or face legal consequences. Suddenly, a club policy such as designating a block of tee times for one gender could make it a legal target on grounds of discrimination.

In making the ruling, the judge cited examples of how the club had been operating in some ways as a public business to boost revenue. She noted the ease of gaining membership, that nonmembers could rent the club for weddings and other occasions, that the general public could shop in the pro shop and that college golf teams used the course.

“The Spokane case” has prompted a behind-closed-doors review of policies at clubs in the Northwest.

“I think it has caused everybody to evaluate themselves and how private they are,” said Tom Frets, general manager of Fairwood Golf & Country Club in Renton who is president of the Evergreen Chapter of the Club Managers Association of America.

Frets said he knows of clubs that no longer do “outside weddings” (weddings with no ties to a member), “outside” charity events or allow their courses to be used by high-school teams because of the Spokane ruling.

One Puget Sound repercussion was the decision of the Everett Golf & Country Club to withdraw from the three-course rotation in the annual Snohomish County Amateur. The Everett club also stopped hosting high-school tournaments. Board members said they didn’t want to do anything to jeopardize the club’s private status.

Brad Steele, vice president and general counsel of the National Club Association in Washington, D.C., replied “absolutely” when asked if the Spokane case has been a national topic.

Steele called the Spokane ruling “wide ranging” and said, “Private clubs want to protect their private status.”

A Puget Sound club manager who didn’t want to be identified said no club, including those with impeccable policies, wants a judge or the government “telling you what to do.”

Another reason clubs have paid attention to the Spokane ruling is because private clubs are exempt from federal income tax. But if the Internal Revenue Service says too much “general-public” money is flowing in, a club can lose its tax-exempt status. The Spokane Country Club remained nonprofit for federal income-tax purposes. Still, the judge’s ruling raised a huge warning flag on policies and a smaller warning flag on tax-exempt status that other clubs were quick to notice.

The four women filed suit contending they didn’t get the same benefits and privileges enjoyed by men who also had full-status memberships.

Some examples were certain prime tee times reserved for men, male-only tournaments and a men’s grill (restaurant area) the plaintiffs said continued in custom even after it was formally declared open to both genders.

Victorious lawyer Mary Schultz used the comparison of men and women ordering a $5 hamburger at a fast-food restaurant and the women being handed a $3 burger.

Schultz said her clients had presented their complaints to the club board without success before filing suit.

One of the plaintiffs, Drusilla Hieber, recently told The Times, “The ego of specific male members who believed in traditions sabotaged the club. . . . The reason we were so passionate was that we paid for rights and male membership denied us our rights.”

The discrimination case became a sinkhole of legal bills and problems for the club. In 2013, it was hit by a $579,000 jury verdict for discrimination against the four women. After the verdict, the club filed for bankruptcy protection.

In 2014, the case went back before Judge Tompkins after complaints of continuing discrimination against women. The judge heard evidence and took the extraordinary move of putting the club under court supervision. Her order included the requirement any official club tournament be open to both men and women.

Later, the club, whose membership once included singer-actor Bing Crosby, was ordered to pay victorious lawyer Schultz $773,000 in attorney fees plus expenses.

These days, the downward spiral has been reversed.

Gary Lindeblad — who fought the City of Spokane over deteriorating conditions at public Indian Canyon Golf Course, where he was the pro for decades — is the head pro at Kalispel. The club, which during the 1990s reportedly had 370 golf memberships and a waiting list, was down to about 200 golf memberships when the tribe bought it, according to general manager Bob Castle. That number is up to 230 and social memberships also have increased, he said.

The tribe increased the greens crew from 10 to 30, replaced its golf-cart fleet with carts equipped with GPS, installed two full-swing golf simulators, added a fitness center and has opened a public restaurant, the 1898 Public House, at the club.

“We’re striving to make KGCC the best golf experience in the Northwest,” Castle said.