By Ray Birch
ARLINGTON, Va.—The recent court decision in Michigan allowing a non-member to move forward with a lawsuit against a credit union over alleged violations of the Americans With Disabilities Act (ADA) likely means CUs will continue to have to spend more time and money addressing these cases, experts say.
As CUToday.info reported, a federal district court ruled a blind person has the right to sue a credit union even though she is not eligible for membership. The ruling is a reversal of a trend in which credit unions had been winning dismissals in the wave of lawsuits filed against credit unions that alleged violations of the Americans With Disabilities Act.
Most recently, as CUToday.info reported, the plaintiff in a lawsuit against SPCO Credit Union, Houston, that alleged the CU’s website violated the Americans With Disabilities Act (ADA) recently voluntarily dismissed the case with prejudice.
But the court has gone in a different direction in the Wolverine State. The United States District Court in Michigan, Southern Division, ruled against Belle River Community Credit Union (Karla Brintley V. Belle River Community Credit Union), finding the ADA does potentially apply to credit union websites, concluding that websites function as a connection point to the goods and services being sold by CUs at physical locations.
But the issue that will concern many CUs, analysts noted, is the court’s finding on standing. As CUToday.info has reported earlier, courts in Virginia have dismissed several lawsuits filed against CUs alleging their websites violated the ADA, finding the plaintiffs in the cases were not members and could not show harm.
‘More Difficult’
Carrie Hunt
“Unfortunately, this decision likely makes it more difficult for credit unions from a time and money standpoint,” said NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt, suggesting that the ruling will only extend the number of such cases and therefore the money and time CUs will spend fighting them. “This may just add to the frustration from these frivolous suits.”
Many of the lawsuits have been filed by Pacific Trial Attorneys in Newport Beach, Fla. Several CU trade associations have sent letters to the firm asking it to drop the pursuit of the suits.
Hunt acknowledged that the decision comes at a time when momentum for credit unions in these cases appeared to be building.
“I wish we could say that every trial court agreed on this issue, but each judge still has to look at the facts and make their decisions,” Hunt said. “They will potentially take note that another jurisdiction has looked at something differently, but at the trial court level judges are not required to do that.”
Remaining Engaged
Hunt emphasized that NAFCU remains actively engaged in this matter across several states.
“And the reason we are so engaged is that we know that at the trial court level you have judges who are not familiar with the issues and make decisions,” she said. “We think this is one court where the judge got it wrong.”
But while this latest decision may give plaintiffs’ attorneys more hope, Hunt said the ruling will not affect the ultimate outcome.
“In terms of NAFCU’s strategy to help our members, we think our ultimate chances for success have not changed at all,” she said. “I think if the Belle River decision is appealed, we’ll see a reversal.”
Alexander Monterrubio, senior director of advocacy and counsel at CUNA,acknowledged the trade association was “disappointed” in the Michigan decision.
‘Frivolous Nature’
“We had some very positive outcomes in cases in Virginia,” said Monterrubio, who said he believes some judges recognized the “frivolous” nature of these suits, especially when the plaintiff is not eligible for CU membership. “But the Michigan court took an opposing viewpoint. This is disappointing and goes against the grain of what we had previously been seeing with these cases.”
In Belle River case, the court ruled the non-member plaintiff could seek damages, writing in its opinion that the “Plaintiff has been denied the ability to effectively browse for Defendant’s services and locations, determine eligibility for membership, and compare Defendant’s services and advantages with its competitors.”
“Yes, this is different (than the previous decisions),” said Monterrubio. “The court said that regardless of whether or not the plaintiff could be a member of Belle River, there could be some sort of harm that could be demonstrated in a case. We disagree, and believe there clearly is no standing here.”
Decision to Have ‘Consequences’
Monterrubio noted that this decision will have some “consequences.”
“I can’t say what will happen now that we have had this adverse result,” said Monterrubio. “But we have also had a lot of positive r
Alexander Monterrubio
esults in the different courts. This creates legal uncertainty and this matter needs to be addressed at some point at a higher level in the federal legal system. But uncertainty leads to more risk.”
Monterrubio acknowledged the Belle River decision, if it is not reversed via an appeal, could make it easier for attorneys to move forward with suits since this decision suggests attorneys do not have to secure a plaintiff from among the members of the credit union being sued.
Guidance Lacking
The Michigan court also noted that the Americans with Disabilities Act lacks sufficient guidance on websites. Both Hunt and Monterrubio stressed the Belle River places an even greater emphasis on the need for the Department of Justice to come up with clear guidance on ADA website requirements.
The Department of Justice has never promulgated regulations regarding website accessibility for public accommodations and has withdrawn previously issued advanced notices of proposed rulemakings on this subject.
As CUToday.info reported, a group of 19 state Attorneys General have sent a letter to the Department of Justice asking it to clarify the Americans with Disabilities Act with respect to websites.
“That letter to the DoJ adds to the case CUNA is making that the DoJ has to get involved and come up with clear guidance,” said Monterrubio, who added that the AGs’ letter places pressure on the agency to move on this matter.
Hunt agreed that the AG’s letter was needed and that the more voices, particularly Washington’s, that get involved will help to convince the DoJ to take action.
“However, from a political perspective, there is not a huge incentive for the Department of Justice to come up with some rules of the road, so we have that working against us,” said Hunt.