Kupiec v. Republic Federal Savings & Loan Ass'n

• Decision Date: 03 October 1974
• Docket Number: No. 74 C 378.,74 C 378.
• Citation: 384 F. Supp. 1008
• Court: U.S. District Court — Northern District of Illinois
• Parties: Stephen P. KUPIEC and John E. Cihocki, Plaintiffs, v. REPUBLIC FEDERAL SAVINGS & LOAN ASSOCIATION and Otto C. Martinek, Defendants.

384 F. Supp. 1008

Stephen P. KUPIEC and John E. Cihocki, Plaintiffs, v. REPUBLIC FEDERAL SAVINGS & LOAN ASSOCIATION and Otto C. Martinek, Defendants.

No. 74 C 378.

United States District Court, N. D. Illinois, E. D.

October 3, 1974.

Gerald J. Muller, Judith S. Bernstein, and William J. McNally, Chicago, Ill., for plaintiffs.

Garvey & Novy, George A. Askounis, Chicago, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

BAUER, District Judge.

This cause comes before the Court on plaintiffs' motion for a summary judgment.

This action arises under the Savings and Loan Association Act, 12 U.S.C. § 1464. The matter in controvery exceeds the sum of $10,000 exclusive of interest and costs. Jurisdiction of this Court is allegedly invoked pursuant to 28 U.S.C. §§ 1331 and 1337.

This is an action seeking declaratory and injunctive relief based on defendants' alleged unlawful practices which have denied plaintiffs access to the membership list of defendant Savings and Loan Association.

Previously, on February 15, 1974, this Court issued a Memorandum Opinion and Order denying plaintiffs' motion for a preliminary injunction. Subsequently, plaintiffs have amended their complaint and they now seek an order to permit plaintiffs and a reasonable number of their agents to inspect and copy the list of all the present members of Republic Federal Savings and Loan Association entitled to vote at any special meeting which may be called and at the March, 1975 annual meeting.

Each of the plaintiffs is a member of the defendant Republic Federal Savings and Loan Association ("Republic Federal") by reason of being a holder of a savings account of Republic Federal. The plaintiffs are allegedly the holders of more than $10,000 of withdrawal value of savings accounts in Republic Federal.

The defendant, Republic Federal, is a federal savings and loan association organized and chartered under 12 U.S.C. § 1464 having its office in Chicago, Illinois.

It is well settled that a member of a federal savings and loan association who holds a savings account has a right to inspect or copy a list of membership in order to solicit their votes for election of directors. Murphy v. Colonial Federal Savings & Loan Association, 388 F.2d 609 (2nd Cir. 1967); Durnin v. Allentown Federal Savings & Loan Association, 218 F.Supp. 716 (E.D.Pa.1963); Ochs v. Washington Heights Federal Savings & Loan Association, 17 N.Y.2d 82, 268 N.Y.S.2d 294, 215 N.E.2d 458, (1966). In their original complaint the plaintiffs requested that they be provided with a list of the members who are entitled to vote by Republic Federal. The amended complaint merely requests that they be given the right to inspect and copy the membership list.

In opposition, defendants contend that

"Since the promulgation of regulation 544.6(g) by the Federal Home Loan Bank Board and its adoption by Republic Federal Savings and Loan Association preempts and supercedes all other means of communication between members, it necessarily renders moot any question of whether the plaintiffs possess an alleged federal common law right to inspect and copy the membership list. By seeking, in their second amended complaint, to inspect and copy the membership list for the purpose of making personal contact with other members, the plaintiffs have not sought relief consistent with the provision of bylaw (g) and therefore said complaint should be dismissed for failure to state a claim upon which relief can be granted."

The Court is unaware of any authority which states that the Federal Home Loan Bank Board's Regulation 544.6(g) preempts the federal common law. If the Federal Home Loan Bank Board had wished to suggest that its new form bylaw provided the exclusive rights to members wishing to communicate with other members, when these rights were quite different and far narrower than the right of a "reasonable opportunity to ascertain the names and addresses of electors known to the management," as described in Murphy, 388 F.2d at 612, it simply would have stated so.

Plaintiffs have investigated the possibility of complying with bylaw (g) and have found that said compliance would be too costly and would not effectively convey their position to their fellow members. Even assuming that the cost of a mailing was reasonable, plaintiffs' message cannot be as effectively conveyed in writing as it could be in face to face conversations. Bylaw (g) should not be construed as to abrogate plaintiffs' rights to communicate with other members of the savings and loan institution.

Plaintiffs, Stephen P. Kupiec and John E. Cihocki, intend to nominate a member of Republic Federal for the post of Director, at future annual meetings of the association and to solicit votes for that nominee before these meetings. Any effort to nominate and elect a Director would be severely impeded should they be denied an opportunity to copy the names and addresses of members of the association who would be entitled to vote for the office of Director at the meetings.

The New York Court of Appeals, in Ochs v. Washington Heights Federal Savings and Loan Association, supra, stated unequivocably that:

"Without the right to

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