judge reading lawsuit
A Wisconsin federal judge has again denied the certification of a proposed class action lawsuit and the preliminary approval of its $570,000 settlement in a three-year dispute between former credit union employees and the Credit Union Retirement Plan Association (CURPA) plan.
However, U.S. District Judge James D. Peterson in Madison, Wis., gave the parties a May 15 deadline to file a renewed motion to address more than 10 concerns in his order.
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The proposed class action lawsuit was originally filed in April 2022 by plaintiffs Brenda L. Lucero, Heather Barton, Cynthia Hurtado and Ilona Kompaniiets, all former credit union employees who participated in a multiple-employer plan, against the CURPA 401(k) plan.
While CURPA sponsored the plan, more than 100 credit unions joined under separate agreements. The plaintiffs alleged that plan administrators failed to control recordkeeping costs and breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA).
The plaintiffs asked the court to certify their case as a class action, but Peterson denied the request in January 2024, stating it did not meet the legal standards required for certification. He also declined to reconsider his ruling in February.
Nevertheless, following months of legal wrangling, the plaintiffs and CURPA submitted in August a new motion to certify the proposed class action lawsuit and to approve its $570,000 preliminary settlement. This revised lawsuit represents about 1,000 employees and ex-employees who participated in the CURPRA plan at the $1.6 billion First Light Federal Credit Union in El Paso, Texas and the $3.3 billion California Coast Credit Union in San Diego.
But it wasn’t until March 18 when Judge Peterson finally issued a ruling that denied the new motion but allowed the parties to file a “renewed motion” that addresses several concerns that he listed in his order.
One of those concerns was that the lawsuit did not meet the “adequacy” requirement to be certified as a class action lawsuit. The adequacy prerequisite stipulates that the representative parties (the plaintiffs) must fairly and adequately protect the interest of the class. Judge Anderson said the lawsuit does not address whether the plaintiffs can fairly represent the credit union employees in the CURPA plan after the plaintiffs left it in 2021.
Other issues raised included how the $570,000 settlement amount was determined, the method of notifying class members, questions surrounding attorneys’ fees and expenses, and a provision that would allow the settlement administrator to make changes without court approval.
CURPA’s attorney declined to comment when reached by CU Times. Lawyers representing credit union employees did not respond to a request for comment.
Peter Strozniak can be reached at [email protected].
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
