Psychological Association Members File Suit Over Special Assessment

Some members of the American Psychological Association are filing a class-action lawsuit against that organization for alleged misrepresentation of the nature of a financial assessment designed to finance political advocacy on behalf of clinical psychologists.

The suit, brought by three members of the association purportedly on behalf of all of the psychological association's members who paid the assessment after 2000, alleges that the organization has misled members by characterizing as "mandatory" a special assessment—over and above the dues required for membership in the organization—used to finance a separate organization known as the American Psychological Association Practice Organization (APAPO), which is devoted to legislative and political advocacy.

Though run by the psychological association's leadership, the APAPO is a separate organization, classified as a 501(c) (6) entity by the Internal Revenue Service (IRS). The APAPO is not a political action committee. The IRS defines a 501(c)(6) entity as a "business league" that is "devoted to improving business conditions of one or more lines of business as distinguished from performing particular services for individual persons."

(The American Psychological Association is a 501(c)(3) organization, a tax status that limits its lobbying activities and prohibits financial support of candidates for political office.)

The case is being heard in the U.S. District Court for the District of Columbia. The American Psychological Association has filed a motion to dismiss the case, and a decision is not expected sooner than May, according to a lawyer for the plaintiffs.

In the suit, the plaintiffs state that "since at least 2002, the [psychological association] has falsely represented to its members that a ‘mandatory’ practice or special assessment over and above the annual dues was required for membership in the [psychological association]. In fact, that assessment (which currently amounts to approximately $140 per member per year) is completely voluntary and solely required for membership in the 501(c)(6) organization, the APAPO."

And the plaintiffs maintained that the assessment amounts collected have totaled approximately $6 million a year.

The suit highlights the sensitive nature of organizations created to advocate for the political interests of a business or profession and the need for transparency in how such organizations are funded.

In a statement provided to Psychiatric News, Rhea Farberman, director of the Office of Public Affairs for the American Psychological Association, states that the assessment is "mandatory" but also that members retain their membership in the association even if they don't pay it.

"The practice assessment was established in 1985 as a mandatory payment. All [American Psychological Association] members who are licensed health service providers are billed the assessment and are expected to pay it. [M] embers who pay the assessment become members of the American Psychological Association Practice Organization (APAPO) in addition to their membership in the [psychological association]. Licensed members who pay dues but fail to pay the assessment (most members do pay) lose their access to APAPO services and benefits, but their [American Psychological Association] membership continues unaffected."

She added, "Concerning the lawsuit, we believe it to be totally baseless. [The American Psychological Association] and APAPO have filed a motion to dismiss the complaint. If our motion is denied, we will oppose class certification and continue to vigorously defend against any remaining claims."

But in an interview with Psychiatric News, Hassan Zavareei, a lawyer with the firm Tycko and Zavareei, which is representing the plaintiffs, drew attention to the difficulty of characterizing something as "mandatory" while acknowledging that members could decline to pay the assessment without affecting their membership in the psychological association.

"Their argument is too cute by half," he said. "They are saying the assessment is mandatory, but that ‘mandatory’ doesn't mean there are consequences. So they are playing word games.

"Our position is simpler," Zavareei said. "The plaintiffs allege that they were given the impression that if they didn't pay the assessment, they couldn't be members of the association, when in fact that is not the case."

Documents submitted by the plaintiffs to the District Court include remarks made by a member of the board of trustees of the psychological association, Glenn Ally, Psy.D., on a list serve in May 2010, following attempts by that board to clarify to membership the nature of the special assessment.

"I'm assuming you know the statistics that psychologist [sic] are at the bottom of the list of professions regarding voluntary contributions, even political advocacy contributions," Ally wrote on the list serve. "What you are suggesting here is to make the primary and largest advocacy arm of our organization dependent on the voluntary contributions of the cheapest profession around.... The [APAPO] is a business and [it is] in the business of advocating for practice. We have decided we need this, and we decided long ago that we were not getting enough advocacy when we had to depend on the larger [psychological association].... That ‘business’ has to depend on a relatively stable revenue source."