Circuit Court decisions protect Credit Unions from ADA claims

August 7, 2019 at 11:54 am Leave a comment

A recent decision from the Court of Appeals for the 7th Circuit further closes the door on attempts to bring class action lawsuits against credit unions for alleged ADA violations involving their websites. I’m going to delve into the legal weeds on this one, because the decision does a good job of explaining why field of membership restrictions make it so difficult to bring these lawsuits against credit unions when it comes to ADA website compliance.

As readers of this blog know, credit unions across the country have either been sued or threatened with lawsuits in recent years claiming that their websites do not comply with the Americans with Disabilities Act. Many of these lawsuits have been brought by the same attorney based in California and typically involve a single vision impaired individual who alleges that he or she is unable to utilize the website even though software is available that allows them to do so.

 Although, similar lawsuits have been brought against other industries, this litigation raises unique issues for credit unions when it comes to the question of standing. I talked about this issue in previous blogs. It means that before someone can sue an individual in federal court, they must be able to demonstrate that they have been harmed by the allegedly illegal conduct. When attorneys first analyzed these lawsuits, the  obvious way of trying to get these cases dismissed was to point out that the plaintiffs who brought these cases typically did not qualify for membership in the credit union they were suing. This was the situation in Carello v. Aurora Policemen Credit Union recently decided by the 7th Circuit. As the court explained, the plaintiff “is not eligible for, nor has he expressed any interest in membership in the credit union.”

So was he just wasting the court’s time? No, because there was another potential way for him to establish standing. I have always felt that this alternative argument was the strongest one for the plaintiffs  which is why this decision is so significant. The plaintiff claimed that he is a “tester,” meaning he visits websites for testing compliance for the ADA. Tester standing has an important history in American jurisprudence; it has allowed plaintiffs to bring civil rights actions against discriminatory conduct based on the harm to a person’s dignity caused by a violation of the law. In this case, Carello claims that he suffered such harm by being unable to use the website to the same extent as non-disabled individuals.

 The court rejected this argument. It reasoned that field of membership restrictions placed on the credit union pursuant to state law once again saves the credit union from the lawsuit. In this case, the field of membership restrictions “erected a neutral legal barrier to the  plaintiff’s use of the credit union’s services. Although, the website may have frustrated him, non-disabled persons would also be denied standing to sue the credit union if they were not eligible for membership. The courts’ holding is similar to a recent decision of the 4th Circuit granting a motion to dismiss by the Department of Labor Federal Credit Union.

Neither of these decisions nor others that have addressed the issue of standing for the proposition that the ADA does not apply to websites. A vision impaired member of this credit union would presumably have standing to sue over an ADA violation. But on a practical level, these decisions make it impossible for plaintiffs’ attorneys to bring class action lawsuits. Meaning, that there isn’t all that much money to be made by threatening litigation.

Which brings us to my opinion and my opinion alone: Those of you who haven’t made your websites ADA compliant should take the time to do so, provided it can be done cost effectively. Sooner or later, you will have to do so as a matter of law or regulation. Besides, as your members age, it simply makes good business sense.


Entry filed under: General, Legal Watch. Tags: , , , , , , , , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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