308B.501 MEMBERS.
    Subdivision 1. Requirement. A cooperative shall have one or more members.
    Subd. 2. Grouping of members. (a) A cooperative may group members and patron members
in districts, units, or on another basis if and as authorized in its articles or bylaws. The articles or
bylaws may include authorization for the board to determine the groupings.
(b) The board may implement the use of districts or units, including setting the time and
place and prescribing the rules of conduct for holding meetings by districts or units to elect
delegates to members' meetings.
    Subd. 3. Member violations. (a) A member who knowingly, intentionally, or repeatedly
violates a provision of the articles, bylaws, member control agreement, or marketing contract
with the cooperative may be required by the board to surrender the member's voting power or the
financial rights of membership interest of any class owned by the member, or both.
(b) The cooperative shall refund to the member for the surrendered financial rights of
membership interest the lesser of the book value or market value of the financial right of the
membership interest payable in not more than seven years from the date of surrender or the board
may transfer all of any patron member's financial rights to a class of financial rights held by
members who are not patron members, or to a certificate of interest, which carries liquidation
rights on par with membership interests and is redeemed within seven years after the transfer as
provided in the certificate.
(c) Membership interests required to be surrendered may be reissued or be retired and
canceled by the board.
    Subd. 4. Inspection of cooperative records by member. (a) A member is entitled to inspect
and copy, at the member's expense, during regular business hours at a reasonable location specified
by the cooperative, any of the records described in section 308B.245 if the member meets the
requirements of paragraph (b) and gives the cooperative written demand at least five business days
before the date on which the member wishes to inspect and copy the records. Notwithstanding the
provisions of this subdivision or any provisions of section 308B.245, no member shall have the
right to inspect or copy any records of the cooperative relating to the amount of equity capital
in the cooperative held by any person or any accounts receivable or other amounts due the
cooperative from any person, or any personnel records or employment records of any employee.
(b) To be entitled to inspect and copy permitted records, the member shall meet the following
requirements:
(1) the member has been a member for at least one year immediately preceding the demand
to inspect or copy or is a member holding at least five percent of all of the outstanding equity
interests in the cooperative as of the date the demand is made;
(2) the demand is made in good faith and for a proper cooperative business purpose;
(3) the member describes with reasonable particularity the purpose and the records the
member desires to inspect; and
(4) the records are directly connected with the described purpose.
(c) The right of inspection granted by this subdivision shall not be abolished or limited by
the articles, bylaws, or any actions of the board or the members.
(d) This subdivision does not affect:
(1) the right of a member to inspect records to the same extent as any other litigant if the
member is in litigation with the cooperative; or
(2) the power of a court to compel the production of the cooperative's records for examination.
(e) Notwithstanding any other provision in this subdivision, if the records to be inspected or
copied are in active use or storage and, therefore, not available at the time otherwise provided for
inspection or copying, the cooperative shall notify the member and shall set a date and hour within
three business days of the date otherwise set in this subdivision for the inspection or copying.
(f) A member's agent or attorney has the same inspection and copying rights as the member.
The right to copy records under this subdivision includes, if reasonable, the right to receive
copies made by photographic copying, xerographic copying, or other means. The cooperative
may impose a reasonable charge, covering the costs of labor and material, for copies of any
documents provided to the member. The charge may not exceed the estimated cost of production
and reproduction of the records.
(g) If a cooperative refuses to allow a member, or the member's agent or attorney, who
complies with this subdivision to inspect or copy any records that the member is entitled to
inspect or copy within a prescribed time limit or, if none, within a reasonable time, the district
court of the county in this state where the cooperative's principal office is located or, if it has no
principal office in this state, the district court of the county in which its registered office is located
may, on application of the member, summarily order the inspection or copying of the records
demanded at the cooperative's expense.
(h) If a court orders inspection or copying of the records demanded, unless the cooperative
proves that it refused inspection or copying in good faith because it had a reasonable basis for
doubt about the right of the member or the member's agent or attorney to inspect or copy the
records demanded:
(1) the court may order the losing party to pay the prevailing party's reasonable costs,
including reasonable attorney fees;
(2) the court may order the losing party to pay the prevailing party for any damages the
prevailing party shall have incurred by reason of the subject matter of the litigation;
(3) if inspection or copying is ordered under this paragraph, the court may order the
cooperative to pay the member's inspection and copying expenses;
(4) the court may grant either party any other remedy provided by law; and
(5) the court may impose reasonable restrictions on the use or distribution of the records
by the demanding member.
History: 2003 c 105 art 1 s 38