The $161 million St. Helens Community Federal Credit Union is seeking todismiss a federal lawsuit filed by a member over a dispute torecall board members because it is not within the jurisdiction ofthe federal court.

Member Steven S. Knebel in U. S. District Court in Portland,Ore. brought the lawsuit against the credit union last month. Heclaims he St. Helens, Ore.-based credit union did not comply withits bylaws, permitting the five recalled board directors tocontinue serving. Knebel's lawsuit is asking the federalcourt for a declaratory judgment that would recall the five boardmembers.

“The plaintiff (Steve Knebel) has simply alleged that the (St.Helens Community FCU) has failed to comply with its bylaw,”according to a court document the credit union submitted Friday.“Although federal regulations prescribe the form of bylaws thatfederal credit unions must adopt, disputes regarding adherence tothe bylaws are a matter of state corporate law.”

Knebel said Monday he disagrees with the credit union's responseto his lawsuit and is confident the case will be heard in federalcourt.

He was part of a group of members who started a recall petitionin June 2012 to remove five of the seven board directors aftermembers became upset with the dismissal of former SHCFCU CEO JeffSchwarz. They also had concerns and questions about a proposedmerger with the $152 million Wauna Federal Credit Union inClatskanie, Ore.

Merger discussions between the two credit unions were called offlast year. VanVleet said there are no plans to resume mergerdiscussions.

The recall petition led to a special meeting of the members inSeptember 2012 to vote on whether to retain or recall the fiveboard directors, Lea Chitwood, Michael Hafeman, Richard Louie,Marty Borrevik and David Graham.

According to SHCFCU, the members voted to retain the board ofdirectors.

Knebel contends in his lawsuit, however, that the SHCFCU“counted votes which were not eligible to be counted” under thecredit union's bylaws.

For example, the credit union counted mail-in ballots ofmembers, which were ineligible, according to the lawsuit. Knebel said the bylaws allow mail-in ballots to be counted as avote but only if members request in writing that a ballot be mailedto them. Instead, ballots were mailed to credit union memberswithout their request.

What's more, the credit union's bylaws also state that anydirector or committee member may be removed from office in anaffirmative vote of a majority of members present at a specialmeeting but only after an opportunity has been given to beheard.

Knebel said he believes the five board members would have beenrecalled if the credit union counted only the votes of members whoattended the special meeting and the mail-in votes from members whorequested the mail-in ballots.

“Since they did not reveal the vote break down, then obviouslywe prevailed,” he said.

However, VanVleet said the membership voted to retain the fivedirectors by a margin of more than 70% for each director.