SAN JOSE, Calif. – A California superior court judge on Tuesday gave a rare setback to the members who recently blocked a proposed charter change by $1.6-billion Technology CU, ruling the credit union does not have to reveal membership information.

Judge Patricia M. Lucas cited California Corporations Code Section 8330(b)(1), which provides that a corporation may deny a demand for membership information if it provides a “reasonable alternative method.” The dissident members, who rallied votes that helped prevent Tech CU from converting to a mutual savings bank, had asked for full access to the credit union’s membership list. Tech CU instead offered to forward e-mails to the 57,620 members for which it has addresses, at a cost of $1,050 for each forward.

Judge Lucas said Section 8330(c) provides that an alternative method is “reasonable” if it “reasonably and timely” accomplishes the purpose. “The evidence shows that TCU has presented an alternative reasonable within the meaning of the statute, and therefore the petition is granted,” she wrote.

Paul Popescu, a Tech CU member whose name was on the court case, told Credit Union Journal he is an engineer and used to dealing with logic, and did not understand some of the judge’s findings. He said he presented an alternative company, Constant Contact, which would have charged him $300 to send as many e-mails to his fellow members as he wanted for one month.

“For the purposes of the California Corporations Law, the judge said the alternative was ‘reasonable,’ but I don’t think sending an e-mail for $1,050 is ‘reasonable,’” he said. “What if I was unemployed or on Social Security? The judge is discriminating between those who can pay and those who cannot. The NCUA has stated in an Opinion of its General Counsel, the fair amount for a communication cannot be more than $200. I believe the judge should have shown deference to the NCUA’s OGC.”

Popescu said Judge Lucas also dismissed his claims regarding “servlets” adding to the probability of an e-mail rendered as undeliverable. Servlets, which are bits of tracking software that allow a sender to monitor if a message has been opened and if any links have been clicked on by the recipient, are a controversial part of this case. According to Popescu, the ruling came, “possibly because the judge did not understand the technical aspects.” He said the members brought in the declaration of Paula Martin, an IT professional “with diplomas and a long career in the industry. The other side brought in a declaration of a person with a couple of certificates and a couple years of marketing experience. With all due respect to the judge, I do not understand why she did not side with the expert.”

Popescu said the dissident members view Tuesday’s ruling as a mere bump in the road. “Of course I am very disappointed by the judgment, which seems to show the judge sides with the few, those who took over Technology Credit Union, and against the many, the rightful owners,” he declared. “We will continue our fight, and I am very confident that, sooner or later and probably out of court, we the members will take back what is ours.”

 

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