Madias v. Dearborn Federal Credit Union

• Decision Date: 31 May 1996
• Docket Number: Civil Action No. 96-40043.
• Citation: 929 F. Supp. 1059
• Parties: Vasilios C. MADIAS, Plaintiff, v. DEARBORN FEDERAL CREDIT UNION, a Federal Credit Union, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

929 F. Supp. 1059

Vasilios C. MADIAS, Plaintiff, v. DEARBORN FEDERAL CREDIT UNION, a Federal Credit Union, Defendant.

Civil Action No. 96-40043.

United States District Court, E.D. Michigan, Southern Division.

May 31, 1996.

COPYRIGHT MATERIAL OMITTED

Elaine Fieldman, Barris Sott Denn & Driker, Detroit, MI, for Defendant.

John G. Coutilish, Garratt & Evans P.C., Bloomfield Hills, MI, for Plaintiff.

MEMORANDUM AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

GADOLA, District Judge.

Plaintiff requests this court to hold that the Federal Credit Union Act, 12 U.S.C. §§ 1751-1795k (hereinafter "the Act"), is violated by one of defendant's bylaws which restricts who may run for election to defendant's board of directors (hereinafter "the Board"). The facts are undisputed. Both sides have moved for summary judgment. For the following reasons, this court will grant defendant's motion for summary judgment.

I. Factual Background

Members of defendant credit union may be eligible for election to the Board by one of two ways: (1) being selected by the defendant's nominating committee, or (2) by obtaining 500 member signatures. Plaintiff desired to be a candidate for one of the three Board positions being elected on February 17, 1996. Plaintiff was not selected by the nominating committee, but did submit the requisite number of signatures in a timely manner.

However, one of defendant's bylaws, Article VII, Section 1 (hereinafter "the Bylaw"),¹ also requires that all nominees for the Board be employees of one of the employers listed in defendant's field of membership. The Bylaw is not one of the standard bylaws implemented by the National Credit Union Administration, (hereinafter "NCUA"), which is the federal agency currently responsible for regulating federally chartered credit unions. In 1960, however, the Bylaw was approved after submission to the Bureau of Federal Credit Unions (the agency then charged with responsibility to approve such amendments).

Plaintiff does not meet the requirements set forth in the Bylaw.² Accordingly, defendant notified plaintiff that his name would not be included on the slate of candidates for positions on the Board. The only members listed on the slate of candidates for the three positions up for election were the three incumbents currently holding those positions. On February 17, 1996, these three incumbents were re-elected to the Board.³

II. Standard of Review

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." "A fact is `material' and precludes grant of summary judgment if proof of that fact would have the effect of establishing or refuting one of the essential elements of the cause of action or defense asserted by the parties, and would necessarily affect the application of appropriate principles of law to the rights and obligations of the parties." Kendall v. Hoover Co., 751 F.2d 171, 174 (6th Cir.1984) (citation omitted). The court must view the evidence in a light most favorable to the nonmovant as well as draw all reasonable inferences in the nonmovant's favor. See United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962); Bender v. Southland Corp., 749 F.2d 1205, 1210-11 (6th Cir.1984).

The movant bears the burden of demonstrating the absence of all genuine issues of material fact. See Gregg v. Allen-Bradley Co., 801 F.2d 859, 861 (6th Cir.1986). This burden "may be discharged by `showing' —that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2554, 91 L.Ed.2d 265 (1986). Once the moving party discharges that burden, the burden shifts to the nonmoving party to set forth specific facts showing a genuine triable issue. Fed.R.Civ.P. 56(e); Gregg, 801 F.2d at 861.

To create a genuine issue of material fact, however, the nonmovant must do more than present some evidence on a disputed issue. As the United States Supreme Court stated in Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986),

There is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the nonmovant's evidence is merely colorable, or is not significantly probative, summary judgment may be granted.

(Citations omitted). See Catrett, 477 U.S. at 322-23, 106 S.Ct. at 2552-53; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). The evidence itself need not be the sort admissible at trial. Ashbrook v. Block, 917 F.2d 918, 921 (6th Cir.1990).

III. Analysis

It is the NCUA's position that the Bylaw violates the FCUA.⁴ The NCUA asserts that the only limitations that may properly be placed on those wishing to be elected to the board of directors of a federal credit union are those expressly stated in the Act or described in the NCUA's standard bylaws. This court must first address the level of deference it must give to the NCUA's position.

Plaintiff and the NCUA assert that this court must give great deference to the NCUA's position, accepting it as long as it is a reasonable interpretation of the Act, even if it would not be this court's preferred interpretation. See Chemical Mfrs. Ass'n v. Natural Resources Defense Council, Inc., 470 U.S. 116, 125, 105 S.Ct. 1102, 1107-08, 84 L.Ed.2d 90 (1985); Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-85, 81 L.Ed.2d 694 (1984). Chevron and Chemical Mfrs., the cases cited by plaintiff and the NCUA, dealt with a federal court's interpretation of a federal agency's regulations, however.⁵ Thus, if NCUA had promulgated a regulation that (1) banned federal credit unions from placing non-standard eligibility requirements on board members, and (2) invalidated any such requirements that had been previously approved, then this court would have to give great deference to that regulation, overturning it only if it were unreasonable or if "Congress has clearly expressed an intent contrary to that of the Agency...." Chemical Mfrs., 470 U.S. at 125, 105 S.Ct. at 1107. Such deference is justified because:

when Congress has delegated to an agency the authority to make rules having the force of law and the agency uses the proper procedure to act reasonably and within the delegated power, the reviewing court has no more power to substitute its judgment for that of the reviewing agency than it has to substitute its judgment for that of Congress in determining the content of a statute.

Daughters of Miriam Ctr. for the Aged v. Mathews, 590 F.2d 1250, 1257-58 (3rd Cir. 1978). See Chevron, 467 U.S. at 843-44, 104 S.Ct. at 2782.

Such is not the case here, however. In this case, the court is deciding the weight to be afforded an agency's legal opinion, not codified in any federal regulations promulgated by that agency. Such opinions,

while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier, and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.

Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89 L.Ed. 124 (1944). This court will use this standard, rather than the deferential standard of Chemical Mfrs., in determining whether to adopt the NCUA's position.

This court will now consider the language of the FCUA. 12 U.S.C. § 1761(a) provides, in pertinent part, that "the management of a Federal credit union shall be by a board of directors.... The board shall consist of an odd number of directors, at least five in number, to be elected annually by and from the members as the bylaws provide." 12 U.S.C. § 1785(d) provides, in pertinent part, that "except with prior written consent of the Board ... any person who has been convicted of any criminal offense involving dishonesty or a breach of trust ... may not ... otherwise participate, directly or indirectly, in the conduct of the affairs of any insured credit union...." Together, these provisions expressly state that only members who have not been convicted of crimen falsi may be eligible for election to the board of directors of a federal credit union, and that such elections are also governed by the bylaws of a particular credit union.

With regard to the adoption of by-laws, 12 U.S.C. § 1758 provides:

In order to simplify the organization of Federal credit unions the Board shall from time to time cause to be prepared a form of organization certificate and a form of bylaws, consistent with this Act, which shall be used by Federal credit union incorporators, and shall be supplied to them on request. At the time of presenting the organization certificate the incorporators shall also submit proposed bylaws to the Board for its approval.

Thus, the only limit placed on bylaws is that they must be "consistent with" the FCUA.

12 C.F.R. § 701.2 expressly incorporates by reference the NCUA's standard bylaws. These bylaws, and standard amendments to these bylaws, may be adopted by a federal credit union without prior approval by the NCUA. Non-standard bylaws, however, must be approved by the NCUA in writing before a federal credit union may adopt them. The approval of non-standard bylaws is placed within the sound discretion of...