TUSCALOOSA, Ala.—A high-profile lawsuit by a former credit union CEO against the governor of Alabama and his legal advisor has been dismissed after four years in the courts.
The United States Court of Appeals for the 11th Circuit has dismissed the suit brought by John Dee Carruth, the former CEO of Alabama One Credit Union, against former Alabama Gov. Robert Bentley that alleged he had been wrongfully terminated after the credit union was placed into conservatorship by Alabama’s state regulator. Carruth’s lawsuit had also named as a defendant David Bryne.
In 2017, Bentley resigned as governor following a sex scandal with a political aide. The CEO’s lawsuit was filed two years earlier.
In filing suit, Carruth had alleged the governor had appointed Sarah Moore as Alabama Credit Union Administrator even though she had no experience in regulating financial institutions because the governor wanted the credit union shut down and Moore would do his bidding. Bryne had allegedly told Moore prior to her taking the position that Alabama One would be a “large problem” to be dealt with.
A Tumultuous Couple of Years
As CUToday.info reported here in 2015, the conservatorship was just the latest step in what has been a tumultuous and high-profile couple of years for the credit union, which had fought previous cease-and-desist orders from the Alabama Credit Union Administration and argued that the state regulator is only acting on behalf of powerful interests in state government who have personal financial reasons behind their actions.
In putting Alabama One into conservatorship the state regulator cited the credit union’s refusal to comply with the cease-and-desist order that had been issued earlier. That order had charged Alabama One management with “willful violation of a cease-and-desist order” and “concealment of books, papers, records or assets of the credit union or refusal to submit” those items for inspection and examination by state authorities.
Among other issues, the credit union was entangled in business loans that had gone sour in a high-profile case involving former developer Danny Ray Butler, a former Tuscaloosa used car dealer and real estate developer who is currently serving a federal sentence for fraud, and who at one time had as much as $25 million in loans from the credit union.
At the time of the conservatorship, as CUToday.info reported here, 11 former executives with Alabama One CU here who were let go in a conservatorship also filed a lawsuit claiming they were improperly dismissed by the state regulator.
Dismissal Upheld
In dismissing Carruth’s lawsuit against the former governor, the 11th Circuit cited qualified immunity, among other issues, and upheld an earlier dismissal by a lower district court.
“Carruth has pled no facts plausibly establishing that the Governor and Byrne made the decisions causing Carruth harm,” the 11th Circuit said in its ruling. “What’s more, even if we could assume away the basic causation problem permeating the entire complaint, Carruth also has failed to plausibly allege that Bentley and Byrne violated his clearly established constitutional rights. From the face of the complaint, it is clear that he cannot defeat their entitlement to qualified immunity. The district court did not err in dismissing the federal claims.
Not Plausible
“Quite simply, Carruth’s complaint does not plausibly allege that the Governor and his counsel were the cause of Carruth’s injuries, and so he cannot establish the necessary nexus between these defendants and any violation of his constitutional rights,” the court stated.
The court’s detailed findings in the case can be found here.
As CUToday.info also reported here, Carruth also earlier filed a lawsuit against one of the CU’s members, alleging he had been libeled by a Facebook post.
Alabama One Credit Union continues to operate and has grown to $627-million in assets and 62,000 members, according to its most recent call report.