Blohm, Sly and Ward were supporters of DFCU Owners United, the member group organized that successfully opposed the CU's charter change. The three have declined to comment on the decision until they have reviewed it with legal counsel.

One thing the members will have to face is the reality that the CU has adopted a different stance toward its members since the controversy that led to the suit. It has returned equity to its members in the form of record-setting dividend payments, and it now plays a significant role in partnerships with the state to help retrain and re-educate laid off auto workers. Auto workers, particularly those tied to Ford Motor Co., are a significant part of DFCU's membership.

DFCU has said it is disappointed with Judge Cynthia Stephens decision and pointed out that the court should have taken into account events since the case was filed.

"DFCU Financial is disappointed by and disagrees with Judge Stephens' decision, which fails to take into account events that have occurred since the lawsuit was filed in 2006. In particular, eight of the nine directors named in the recall petition have either resigned or been reelected by the membership since 2006. DFCU Financial will continue to evaluate the court's decision and the appellate and other options available to it."

The credit union didn't mention it, but the regulatory environment has changed as well.

At the time of the DFCU conversion attempt, NCUA's policy was not to intervene in bylaw disputes of federally chartered credit unions unless it believed those disputes directly addressed safety and soundness issues. Since then, some have argued, in part because of this example, NCUA has returned FCU bylaws to its body of regulations and indicated that it would step into such disputes in some circumstances, such as a CU declining to hold a special meeting that members have petitioned to hold.

Even though it is unclear what the decision might mean to DFCU's immediate circumstances, advocates for the rights of credit union members will likely be cheered by the decision's very clear language about the CU's need to follow its bylaws.

For example, DFCU had argued that it could not hold a special meeting at which all the CU's board members might be recalled because that would have put the CU at risk. Judge Stephens firmly rejected that line of reasoning.

"The bylaws authorize votes to remove directors at call meetings and place no limit on how many may be recalled or removed," the judge wrote. "The defendants argue that the removal of the entire board would be contrary to the interests of the corporation, a violation of the FCUA. Interestingly, the bylaws of the credit union and the NCUA make a provision for the control and operation of a credit union when all the directors are removed."

The court used similar language in rejecting DFCUs arguments on why members should not be allowed to see its records.

"The defendants in this case argue that the fact that the plaintiffs may seek to remove certain directors or even all of the directors renders their inquiry into the books and records contrary to the interest of the corporation," the judge wrote. "If this were true, access to the corporate records could be withheld from any shareholders who may vote for any new director."

Even though, as a decision from a state court, the court's judgment's value as a precedent is limited, lawyers familiar with credit union law said the decision's import is increased by the fact that there are few similar cases and because federal courts have been largely silent on these issues.

–[email protected]