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Former NCUA Executive Director Karl Hoyle-who a year ago sued NCUA and Board members Yolanda Wheat and Dennis Dollar (and OSC Associate Special Counsel William Reukauf) in their official and private capacities for firing him over his alleged involvement in the agency's hiring scandal-had a procedural setback in U.S. District Court for the District of Columbia March 28.
There U.S. District Court Judge Ellen Segal Huvelle granted NCUA's motion contesting proper service of suit on Dollar, Wheat, and Reukauf and transferred the case to the U.S. District Court for the Eastern District of Virginia.
Huvelle ruled that Hoyle's attorney had not achieved "personal service" over defendants and that her court lacked personal jurisdiction over the defendants. Furthermore, she held that venue in the case was properly in Virginia.
Huvelle did not-as NCUA had sought-dismiss the case, and she directed expeditious transfer of case records to the Virginia jurisdiction.
Hoyle now has 30 days to effect proper service on defendants.
Stating that he was not discouraged with the judge's ruling, as the case would now go to Virginia's "rocket docket" court, Hoyle attorney James Butera said Huvelle was "immersed in the case" and indicated some interest in the complaint's basic point that only NCUA Board Chairman Norman D'Amours had authority to fire Hoyle.
Butera predicted oral arguments in the case by June.
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American Bankers Association (ABA) Deputy General Counsel for Litigation Michael Crotty, commenting here on the March 30 CU court victory over ABA's (and ICBA's) challenge to NCUA's new chartering manual, declared April 4 that it was likely ABA would appeal the ruling.
"I'm pretty sure we're going to appeal," Crotty said, adding that ABA has a history of losing to NCUA at the district court level but prevailing at the appellate level.
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In pointed response March 27 to a March 13 appeal by NCUA Board Chairman Norman D'Amours to support his overruled overlap protection policies, NAFCU President Fred Becker, Jr. replied that the discontinued practice appeared to be inconsistent with D'Amours' own congressional testimony on credit union "choice" and that his forced overlap analysis demands at the agency may well be illegal.
Becker explained that D'Amours' self-proclaimed policy of recusing himself from community charter votes where an overlap analysis has not been performed could be an "overreaching" of authority because overlap analysis is nowhere contained in the new chartering manual.
"In light of the potential legal ramifications of your continuation of this policy," Becker wrote, "we again urge you to abandon your practice of soliciting information on overlaps prior to considering the merits of a community charter request."
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Less than two months after the NCUA returned control of the seized Polish and Slavic FCU (P&SFCU) to an appointed board of directors, over 900 members March 23 petitioned the NCUA-imposed board to call a special election "to decide whether to remove (the) Board of Directors."
Under terms of NCUA's February 3 release of the FCU, however, the appointed board agreed not to hold elections until 2001, at which time only a minority of the board can be voted out-and the one board member who objected to the stipulation ultimately stepped down. -
gmcorrigan@mindspring.com
