United States District Court, Northern District of Illinois, E.D
March 8, 1974
STEPHEN P. KUPIEC ET AL., PLAINTIFFS,
REPUBLIC FEDERAL SAVINGS AND LOAN ASSOCIATION AND OTTO C. MARTINEK, DEFENDANTS.
The opinion of the court was delivered by: Bauer, District Judge.
MEMORANDUM OPINION AND ORDER
This cause comes on the plaintiffs' motion for a preliminary
This action arises under the Savings and Loan Association Act,
12 U.S.C. § 1464. The matter in controversy exceeds the sum of
ten thousand dollars exclusive of interest and costs. The
jurisdiction of this Court is allegedly invoked pursuant to
28 U.S.C. § 1331 and 1337.
This is an action seeking declaratory and injunctive relief
based on defendant's alleged unlawful practices which have denied
plaintiffs access to the membership list of defendant savings and
loan association in violation of the Federal Savings and Loan
Each of the plaintiffs is a member of the defendant Republic
Federal Savings and Loan Association ("Republic Federal") by
reason of being a holder of a savings account of Republic
Federal. See 12 U.S.C. § 1464(b)(1). The plaintiff Daniel M.
Regan is allegedly a holder of more than $10,000 of withdrawal
value of savings accounts in Republic Federal. The defendant
Republic Federal is a federal savings and loan association
organized and chartered under 12 U.S.C. § 1464, having its office
in Chicago, Illinois. The defendant Otto C. Martinek is allegedly
the duly elected president of defendant Republic Federal.
The plaintiffs in their instant motion request this Court to
issue a preliminary injunction ordering defendants to permit
plaintiffs or their agents to inspect and copy the list of all
members of Republic Federal entitled to vote at the March 28,
1974 meeting of the membership.
On December 13, 1973, prior to the filing of this action, the
Directors of Republic Federal passed By-law (g) which sets forth
the procedural requirements that must be met before a member can
communicate with other members in relation to any matter which
may properly be considered at a meeting of the members.*fn1
After weighing the testimony of numerous witnesses who
testified at the hearing on March 5, 1974, and carefully
examining the relevant pleadings, exhibits and affidavits
submitted by the parties in support of their respective
positions, it is the opinion of this Court that the plaintiff's
motion for a preliminary injunction should not be granted at this
time and that plaintiffs should attempt to comply with By-law (g)
of the Charter and By-laws of Republic Federal.
While it is well settled that a member of a federal savings and
loan association who holds a savings account has a general right
to inspect or copy a list of membership in order to solicit their
votes for election of directors, this right is not absolute.
Murphy v. Colonial Federal Savings and Loan Association,
388 F.2d 609 (2nd Cir., 1967); Durnin v. Allentown Federal Savings and
Loan Association, 218 F. Supp. 716 (E.D.Pa., 1963); Ochs v.
Washington Heights Federal Savings and Loan Association,
17 N.Y.2d 82, 268 N.Y.S.2d 294, 215 N.E.2d 485 (1966); cf. Daurelle
v. Traders Federal Savings and Loan Association of Parkersburg,
143 W. Va. 674, 104 S.E.2d 320 (1958).
It is entirely possible and proper, for a federal savings and
loan association by their own regulations to establish a
reasonable procedure by which a member of the savings and loan
association could communicate with other members of that
association in order to solicit their votes for the election of
directors by means of mailings made by the association, and thus
obviate the necessity of having a member inspect or copy its
membership list.*fn2 Practically speaking, such an alternative
regulation not only guarantees a member his right to communicate
with other members and solicit proxies, but also prevents the
problems inherent in the blanket inspection and copying of
membership lists, namely that such actions especially around the
time of the annual meeting may impose an impossible burden on the
federal savings and loan association and its performance in
conducting ordinary business operations.
By-law (g) of the Charter and By-laws of Republic Federal
its face to be a reasonable regulation of the communication
between members of the association. The plaintiffs contend that
their message to the other members of the association cannot be
adequately conveyed by a mailing and can only be communicated by
face to face contact. The defendants contend that the mailing as
provided by By-law (g) is an adequate means of soliciting proxies
and/or communicating with members of the association about
complicated issues to be raised at an annual meeting, and that
face to face confrontation between the plaintiffs and other
members may not only be offensive to the other members, but also
may cause a serious and irreparable harm to the defendant savings
and loan association.
From the evidence presented at the hearing on this matter, it
is clear to this Court that the contentions of the defendants
have merit and the plaintiffs should first seek to comply with
By-law (g) before they seek any extraordinary equitable remedies
from this Court which possibly could cause serious problems for
the defendant savings and loan association.
It is the firm intention of this Court that justice should be
done in the instant action. Thus this Court has chosen to require
the plaintiffs to first attempt to comply with the purportedly
reasonable requirements of By-law (g) before they seek any
extraordinary remedies from this Court.*fn3 However, if the
defendants fail to act reasonably in their application of By-law
(g) or if they fail to proceed with the utmost dispatch to
distribute the plaintiffs' message to other members of the
association, this Court will not hesitate to reconsider its
ruling and take whatever action is necessary to remedy the
Accordingly, it is hereby ordered that the plaintiffs' motion
for a preliminary injunction is denied at this time.