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ROSENBERG v. AT & T EMPLES. FED. CREDIT UNION

December 5, 1989

LEONARD F. ROSENBERG, Plaintiff,
v.
AT & T EMPLOYEES FEDERAL CREDIT UNION, Defendant



The opinion of the court was delivered by: DEBEVOISE

 NATURE OF ACTION

 This is an action by pro se plaintiff, Leonard F. Rosenberg, against the AT & T Employees Federal Credit Union ("Credit Union"). Plaintiff alleges that defendant's Board of Directors was elected in violation of the Credit Union's bylaws, and that the board also violated the bylaws and the Federal Credit Union Act, 12 U.S.C. § 1751 et seq. in preventing plaintiff from running for a position on the Board. Plaintiff moves presently for summary judgment. In response, defendant claims that the court lacks subject matter jurisdiction to hear this case.

 FACTS

 Plaintiff is a resident of New Jersey and a member of the defendant credit union. The defendant is a federal credit union established in accordance with the requirements of the Federal Credit Union Act ("the Act"), 12 U.S.C. § 1751, et seq., with offices in New Providence, New Jersey. Defendant draws its approximately 45,000 members from employees of certain divisions of the AT & T Corporation. Most of its members are located in New Jersey.

 The present controversy involves plaintiff's attempt to be elected to defendant's Board of Directors. Defendant's bylaws provide for an election of Board members to be held each year at the credit union's annual meeting. In 1989, one director's term was scheduled to expire, leaving a vacancy to be filled by election at the annual meeting. On April 12, 1989, defendant announced by mail to all of its members that the credit union's annual meeting would be held on Saturday, May 27, 1989. That notice allegedly did not mention that an election would be held, nor did it discuss the opportunity for members to run for the Board vacancy.

 Apparently, some time after notice of the annual meeting was mailed, the Nominating Committee of defendant's Board of Directors nominated Claire E. Mansfield to fill the vacancy. On May 4, 1989, after Mansfield was nominated, plaintiff claims that he had a conversation with Joan Thuebel, a member of the Board and Vice Chairperson of the Nominating Committee, who told plaintiff that there was one vacancy on the Board, for which there would be an election on May 27, 1989. On that same date, plaintiff sent defendant his nominating petition, which contained the required number of signatures for nominating plaintiff as a candidate for the Board. Defendant acknowledged receipt of plaintiff's petition on May 9, 1989.

 Subsequent to receiving plaintiff's nomination, another Board member decided to resign, leaving two vacancies on defendant's Board. Under the defendant's bylaws, the board is permitted to reduce the number of directors:

 
to an odd number not fewer than 5 nor more than 15 by resolution of the board. No reduction in the number of directors may be made unless corresponding vacancies exist as a result of deaths, resignations, expiration of terms of office, or other actions provided by these bylaws.

 (Article VII. Board of Directors, section 1). Relying on this provision, the Board decided to reduce its number from 11 to 9 directors, obviating the need for an election and thwarting plaintiff's candidacy. According to defendant, the Board made this reduction because it determined that an 11 member board was "unwieldy." According to plaintiff, the reduction was made in bad faith to prevent plaintiff from obtaining a Board position and to cover up the Board's failure to adhere to the election procedures of the bylaws prior to the resignation of one of its members. To support this claim, plaintiff alleges that he was told by Ms. Thuebel on May 19, 1989 that the election would be postponed. On May 22, 1989, the Chairman of the Board, Donald Lynch, allegedly told plaintiff that the elections were cancelled "simply because [plaintiff's nominating] petition was presented to us." (Plaintiff's Aff. at par. 7). According to plaintiff, two days later, Lynch told him of the reduction in the number of Board positions.

 Plaintiff objects to the procedures employed by the Board prior to its decision to reduce the number of its members. In particular, plaintiff alleges that despite nominating Mansfield to fill a Board vacancy, the Board never notified credit union members of the vacancy and the accompanying opportunity for any member to run for the open position. Article VI, section 1 of defendant's bylaws provides:

 
the Secretary shall, at least seventy-five (75) days prior to the annual meeting, notify in writing all members eligible to vote that nominations for vacancies may also be made by petition signed by one percent of the members with a minimum of twenty (20) and a maximum of five hundred (500).

 Plaintiff claims that these provisions were violated not only prior to the originally scheduled May, 1989 election, but also prior to each election of the existing board members. On this basis, plaintiff claims that all of the Board's members must be removed from office, since none of them were elected in accordance with election procedures required under the bylaws. Plaintiff also alleges that the Board has engaged in a consistent practice of perfunctorily approving candidates for positions on the Board of Directors chosen by the Board's Nominating Committee, without giving proper notice to the credit union's membership.

 Defendant disputes plaintiff's claims through the affidavit of its Chairman of the Board, in which he makes the following general statement:

 
I have been on the Board of Directors of AT & T Employees Federal Credit Union for more than (4) years and I dispute all allegations the plaintiff makes concerning the alleged improprieties with regard to past elections held by the credit union. I can state that for all the years I have been associated with the Board and its members, we have always followed the credit ...

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