PORTLAND, Ore. A federal court last week dismissed a member suit claiming the incumbent board and management of St. Helens Community FCU rigged last year’s vote to recall the majority of the board, ruling the member is not the proper party to bring the suit.
But Steven Knebel, the member who brought the suit, said this morning he plans to appeal the federal court ruling, as well as file a similar action in state court, which he hopes will be more amenable to his cause. “We’re filing in state court to assure that these people are held accountable,” Knebel told the Credit Union Journal.
In dismissing the suit, the U.S. District Court for the District of Oregon ruled that because Knebel alleged that the mail-in ballot for the board ouster violated NCUA’s bylaws, only NCUA can move to enforce the bylaws—and not a member.
The suit claims the bylaws of the $160 million credit union—standard NCUA bylaws--bar anyone from voting in the recall of directors who does not attend a special meeting called for the recall. The credit union allowed members to vote by mail for the recall, then announced immediately after the September special meeting that the recall initiative had failed—but never announced a vote count.
NCUA standard bylaws state that only member present at the special meeting may vote on a recall. That’s because directors are given a chance to defend themselves and answer question at such meeting.
In a legal opinion letter issued in conjunction with the case—but never mentioning St. Helens Community—NCUA reiterated its position barring mail-in ballots for director recall votes.
Knebel said he hopes to enlist NCUA’s help in his appeal, by getting the agency to file a brief rejecting the validity of the mail-in ballot, and thus the failed board recall. “We’re not letting them (the St. Helens board and management) off the hook,” he said.
Knebel and other members petitioned for the recall of the majority of the seven-member board after the credit union announced an agreement to merge with nearby Wauna FCU, even after they were assured during a June 2012 annual meeting there were no mergers being considered. The then-CEO of St. Helen's Community was forced out and the longtime chairman named as interim CEO.
