HAUPPAUGUE, N.Y.–A court here has upheld a lower court’s ruling in a putative class action lawsuit against Teachers FCU that alleges a number of contractual breaches.
The Supreme Court of the State of New York, Appellate Division: Second Judicial Department has affirmed the trial court’s denial of TFCU’s motion to compel arbitration and stay all proceedings and its motion to dismiss the complaint for lack of standing, according to the National Law Review.
The case was initially filed in 2020 with the plaintiff alleging the $9.88-billion TFCU had breached its account agreement, including the imposition of certain fees related to checking accounts.
“Before responding to the complaint, TFCU moved to compel arbitration and stay the proceedings, citing an arbitration provision added to the account agreement in December 2019,” National Law Review reported. “Additionally, TFCU sought to dismiss the complaint, arguing that the plaintiff lacked standing due to the refunding of disputed fees prior to the lawsuit’s commencement.”
The Key Arguments
According to the National Law Review, the appellate court upheld the trial court’s decision that the arbitration amendment, which it tried to impose as part of an “eStatement” distributed after a related federal action had already been initiated, was not binding.
“The plaintiff expressly rejected this amendment through her counsel in January 2020 while the federal action was still pending,” National Law Review said.
The court ruled that TFCU’s unilateral refund of the disputed fees did not invalidate the plaintiff’s standing to pursue the class action, the report added.