SAN DIEGO–The verdict is in: Credit unions and regulators should keep an eye on these lawsuits and court decisions.
Francois Henriquez, a partner in the Miami law firm Schutts Bowen, and the former counsel for U.S. Central Credit Union, updated CUs on three legal cases he said could have a bearing on their decision-making and business.
The cases include:
Gil v. Winn Dixie Stores
Filed in District Court in South Florida, the question at the heart of the case is when is a website a public accommodation for purposes of the Americans with Disabilities Act.
The plaintiff has filed more than 70 lawsuits alleging various companies’ websites are not in compliance with the ADA. What makes this case unique is that it is the first to go to court; all the other cases have been settled.
The plaintiff has stated that the Winn Dixie website is closely integrated with the shopping experience at the physical grocery store, and as such must be treated as a public accommodation.
Earlier, in a separate case, Target lost a similar lawsuit, noted Henriquez, with the court finding its site was a public accommodation.
Henriquez explained the ADA covers “intangible barriers,” and at issue is whether it can be a “gateway” because it is “heavily integrated with the company’s physical locations.”
“We represent a website developer and hosting company and they host a lot of websites for credit unions,” said Henriquez. “We see credit unions getting hit with these types of lawsuits. I think there are going to be a lot more of these before there are a lot less of them.”
It has been estimated that the cost to Winn Dixie to update its site would be between $40,000 and $50,000.
National Labor Relations Board v. Murphy Oil USA
Arbitration agreements have been much in the news given the CFPB’s ruling seeking to ban such language in consumer card agreements. But in this case, Henriquez is referencing National Labor Relations Board v. Murphy Oil USA.
“In many employment applications, new employees are asked to sign away their right to a jury trial and a class action if they have a dispute with their employer,” said Henriquez.
And that is the case with the suit against Murphy Oil.
This case bears watching, he said, because there have been so many conflicting rulings and opinions. Separate Circuit Courts have arrived at different positions, and the National Labor Relations Board has said it doesn’t care what the courts had to say, and ruled in favor of the group of employees.
The Supreme Court has said it will now review the case, but that is complicated as well, Henriquez pointed out. In June, a new Solicitor General appointed by President Trump reversed the position of the previous Solicitor General and even wrote a friend of the court brief in support of the employer. And that’s where it stands.
“This case is really, really being watched by a lot of people. This will be one of the first cases to be argued before the new Supreme Court term in October,” said Henriquez.
Fourth Corner Credit Union v. Federal Reserve Bank of Kansas City
As has been reported in CUToday.info, this case involves Denver-based Fourth Corner Credit Union, which was chartered in 2014 by the State of Colorado specifically to serve the state’s cannabis industry. But the Federal Reserve Bank has declined to provide the credit union with a master account, citing federal law, which states marijuana possession is a federal crime. NCUA also turned down the credit union for share insurance, citing the risk of a CU serving one industry.
A three-judge panel on the 10th circuit sent the case back and told the lower court to throw it out without prejudice, additionally ruling that Fourth Corner can again apply for a master account.
But the court also added an important caveat, noted Henriquez: the CU will only be allowed to serve advocates of marijuana industry and not businesses.
“This probably won’t be the final decision on marijuana banking,” said Henriquez. “Dozens of other institutions trying to do the same thing.”