Case: Ayala v. Valley First Credit Union

1:22-cv-00657 | U.S. District Court for the Eastern District of California

Filed Date: June 1, 2022

Closed Date: March 11, 2024

Clearinghouse coding complete

Case Summary

This is a case about a financial institution denying applicants’ membership and financial services based on their alienage and immigration status. On June 1, 2022, a woman who had been denied membership and financial services at a bank filed a class action complaint in U.S. District Court for the Eastern District for California. The lawsuit was filed against Valley First Credit Union which is a member-owned credit union serving California’s Central Valley. The plaintiff sought class certificati…

This is a case about a financial institution denying applicants’ membership and financial services based on their alienage and immigration status.

On June 1, 2022, a woman who had been denied membership and financial services at a bank filed a class action complaint in U.S. District Court for the Eastern District for California. The lawsuit was filed against Valley First Credit Union which is a member-owned credit union serving California’s Central Valley. The plaintiff sought class certification, declaratory and injunctive relief, statutory and compensatory damages, and attorney’s fees under the Civil Rights Act of 1866, 42 U.S.C. § 1981 and California’s Unruh Civil Rights Act, California Civil Code § 51. The plaintiff asked the court to declare the defendant’s policies and practices unlawful and violations of § 1981 and § 51 of the respective statutes, and preliminary and permanent injunctions against it engaging in such practices. The plaintiff was represented by the Mexican American Legal Defense and Education Fund. The case was assigned to Magistrate Judge Helena Barch-Kuchta. 

The allegations arose after the plaintiff, who is a recipient of Deferred Action for Childhood Arrivals (DACA), sought a personal loan from the defendant. The plaintiff worked as a virtual teller for the defendant’s corporate headquarters. She applied for the loan on the defendant’s website and was subsequently approved. The defendant allegedly instructed the plaintiff that in order to receive the loan she needed to join the credit union, open a savings account, pay a membership fee, and upload a copy of her social security card. When the plaintiff attempted to comply with the instructions, she was unable to become a member and was informed by the defendant that it was unable to establish membership with a “work-only” social security number; thus, it would be unable to provide her the loan. Shortly after, the plaintiff received a notice from the defendant of the “adverse action taken” and listed the principal reason for her denial as being ineligible for membership at the credit union. The plaintiff sought to represent a class composed of all persons who attempted to apply for membership or a financial product from the defendant and was denied due to their alienage or immigration status.

On September 26, 2023, the plaintiff filed an unopposed motion for preliminary approval of class action settlement. After reviewing the proposed settlement the court denied approval without prejudice for several reasons. First, the proposed agreement described negotiations as “arms-length” as required by precedent, but the court found that there is no explanation on how the negotiations were conducted in that manner. Second, the “clear sailing” provision here, which provides the monetary limit of attorney’s fees payable from outside the settlement fund that the defendant would not contest, does not adequately describe the amount or type of discovery that was conducted. Third, the proposal failed to identify the cy pres recipients. A cy pres recipient is the beneficiary of any unused settlement funds and is typically a charitable organization. Fourth, the notice provided to affected claimants did not sufficiently inform class members of what claims they were releasing. Fifth, there was insufficient information to justify the incentive award for the class representative. Finally, the court concluded that the notice form provided to class members did not contain sufficient information concerning attorney’s fees, costs, incentive award, or other related information.

On November 8, 2023, after the parties cured the defects noted in the court’s previous denial, the court granted preliminary approval of their settlement. 

On March 11, 2024, the court granted final approval for the settlement and dismissed the case with prejudice. The settlement agreement included the following provisions:

  • Recognition of 48 individuals who live in California and had applied for membership at the defendant credit union but were denied membership based on their lack of U.S. citizenship
  • Release of their claims related to this denial
  • Creation of a settlement fund amounting to $120,000
  • Each individual receives $2,500
  • Attorney’s fees paid separate from the settlement fund in the amount of $30,000
  • Settlement administrator fees of $10,000
  • Incentive payment of $5,000 for the class representative
  • Defendant agreed to cease the practices challenged

This case is now closed.

Summary Authors

Tucker Gribble (3/30/2025)

People

For PACER's information on parties and their attorneys, see: https://www.courtlistener.com/docket/63354155/parties/ayala-v-valley-first-credit-union/


Judge(s)

Barch-Kuchta, Helena (California)

Attorney for Plaintiff

Herrera, Ernest Israel (California)

Holguin-Flores, Andres Ricardo (California)

Lozada, Luis Leonardo (California)

Attorney for Defendant

Richter, Stuart Matthew (California)

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Documents in the Clearinghouse

Docket

See docket on RECAP: https://www.courtlistener.com/docket/63354155/ayala-v-valley-first-credit-union/

Last updated Feb. 22, 2026, 1:11 a.m.

ECF Number Description Date Link Date / Link
1

COMPLAINT against Valley First Credit Union by Karla Ayala. Attorney Holguin-Flores, Andres Ricardo added. (Filing fee $ 402, receipt number ACAEDC-10258479) (Attachments: # 1 Civil Cover Sheet)(Holguin-Flores, Andres) (Entered: 06/01/2022)

June 1, 2022

June 1, 2022

RECAP
2

SUMMONS ISSUED as to *Valley First Credit Union* with answer to complaint due within *21* days. Attorney *Andres Ricardo Holguin-Flores* *Mexican American Legal Defense and Education Fund* *634 S Spring Street, 11th Floor* *Los Angeles, CA 90014*. (Marrujo, C) (Entered: 06/01/2022)

June 1, 2022

June 1, 2022

3

CIVIL NEW CASE DOCUMENTS ISSUED; Initial Scheduling Conference set for 1/19/2023 at 11:30 AM in Yosemite (HBK) before Magistrate Judge Helena M. Barch-Kuchta. (Attachments: # 1 Standing Order, # 2 Consent Form, # 3 VDRP) (Marrujo, C) (Entered: 06/01/2022)

June 1, 2022

June 1, 2022

4

NOTICE of APPEARANCE by Ernest Israel Herrera on behalf of Karla Ayala. Attorney Herrera, Ernest Israel added. (Herrera, Ernest) (Entered: 06/09/2022)

June 9, 2022

June 9, 2022

5

WAIVER of SERVICE RETURNED EXECUTED: Waiver sent to Valley First Credit Union on 7/1/2022, Answer due 8/30/2022 (Thrift-Viveros, Deylin) (Entered: 07/07/2022)

July 7, 2022

July 7, 2022

6

NOTICE of APPEARANCE by Luis Leonardo Lozada on behalf of Karla Ayala. Attorney Lozada, Luis Leonardo added. (Lozada, Luis) (Entered: 08/01/2022)

Aug. 1, 2022

Aug. 1, 2022

7

STIPULATION re 1 Complaint Stipulation to Extend the Time to Respond to the Complaint by Valley First Credit Union. Attorney Richter, Stuart Matthew added. (Attachments: # 1 Declaration of Stuart M. Richter, # 2 Proposed Order)(Richter, Stuart) (Entered: 08/26/2022)

Aug. 26, 2022

Aug. 26, 2022

8

TEXT ONLY ORDER GRANTING (Doc. No. 7 ) the Parties' stipulated Motion to Extend Time for Defendant to Respond to the Complaint filed on August 26, 2022. Pursuant to Fed. R. Civ. P. 6(b) and Local Rule 144(a), Defendant shall have a fifty-nine (59) day extension of time to respond to Plaintiff's Complaint (Doc. No. 1 ). Defendant's shall file a response no later than October 28, 2022. The parties are reminded if Court approval is required for the relief requested the pleading should be filed as a motion and not as a stipulation. The parties should nonetheless indicate the motion is stipulated, if appropriate. Signed by Magistrate Judge Helena M. Barch-Kuchta on 8/29/2022.(Glinzak, Louis) (Entered: 08/29/2022)

Aug. 29, 2022

Aug. 29, 2022

Order on Motion for Extension of Time to File Answer

Aug. 29, 2022

Aug. 29, 2022

9

MOTION for EXTENSION of TIME to FILE ANSWER re 1 Complaint from October 28, 2022 to December 28, 2022 (Stipulated) by Valley First Credit Union. (Attachments: # 1 Proposed Order)(Richter, Stuart) (Entered: 10/25/2022)

Oct. 25, 2022

Oct. 25, 2022

10

TEXT ONLY ORDER GRANTING (Doc. No. 9 ) the parties' second stipulated motion for extension of time for Defendant to respond to the complaint. The parties represent they are currently engaged in settlement discussions. Pursuant to Fed. R. Civ. P. 6(b) and Local Rule 144, Defendant shall have a sixty (60) day extension of time to respond to the complaint (Doc. No. 1 ). Defendant shall file a response to the complaint no later than December 28, 2022 absent further order from the court. Signed by Magistrate Judge Helena M. Barch-Kuchta on 10/26/2022. (Glinzak, L) (Entered: 10/26/2022)

Oct. 26, 2022

Oct. 26, 2022

Order on Motion for Extension of Time to File Answer

Oct. 26, 2022

Oct. 26, 2022

11

NOTICE of SETTLEMENT (Joint) by Valley First Credit Union. Dispositional Docs due by 2/3/2023. (Richter, Stuart) (Entered: 12/05/2022)

Dec. 5, 2022

Dec. 5, 2022

12

TEXT ONLY ORDER GRANTING the parties' request to stay all hearings dates and deadlines incorporated in their Joint Notice of Settlement 11 . The Clerk shall vacate all hearing dates and deadlines, including the January 19, 2023 mandatory initial scheduling conference. The parties shall file a Fed. R. Civ. P. 23(e) motion for preliminary settlement approval within sixty (60) days, absent further leave of court. Signed by Magistrate Judge Helena M. Barch-Kuchta on 12/14/2022. (Barch-Kuchta, Helena) (Entered: 12/14/2022)

Dec. 14, 2022

Dec. 14, 2022

Order on Motion to Vacate

Dec. 14, 2022

Dec. 14, 2022

13

STANDING ORDER signed by District Judge Jennifer L. Thurston on February 13, 2023. (Munoz, I) (Entered: 02/13/2023)

Feb. 13, 2023

Feb. 13, 2023

14

MOTION Preliminary Settlement Approval by Karla Ayala. Motion Hearing set for 3/20/2023 at 09:00 AM in Courtroom 4 (JLT) before District Judge Jennifer L. Thurston. (Saenz, Thomas) (Entered: 02/13/2023)

Feb. 13, 2023

Feb. 13, 2023

15

DECLARATION of Thomas A. Saenz in support of 14 Motion for Miscellaneous Relief. (Saenz, Thomas) (Entered: 02/13/2023)

Feb. 13, 2023

Feb. 13, 2023

16

PROPOSED ORDER re Motion for Preliminary Settlement Approval re 14 Motion for Miscellaneous Relief. (Saenz, Thomas) (Entered: 02/13/2023)

Feb. 13, 2023

Feb. 13, 2023

17

MINUTE ORDER (Text Only Entry) The parties are informed that pursuant to Local Rule 302 and the Standing Order 13, the filed Motion for Preliminary Settlement Approval 14 will be heard and decided by the undersigned. No hearing will be calendared, and the matter will be decided on the papers. A written decision will issue as soon as is practicable in light of the Court's extraordinarily heavy caseload signed by District Judge Jennifer L. Thurston on March 13, 2023. (Munoz, I) (Entered: 03/13/2023)

March 13, 2023

March 13, 2023

~Util - Motions Submitted/Under Advisement AND Minute Order

March 13, 2023

March 13, 2023

18

CONSENT/DECLINE of U.S. Magistrate Judge Jurisdiction. Pursuant to Fed. R. Civ. P. 73(b)(1), this document is restricted to attorneys and court staff only. Judges do not have access to view this document and will be informed of a party's response only if all parties have consented to the referral. (Richter, Stuart) (Entered: 09/06/2023)

Sept. 6, 2023

Sept. 6, 2023

19

CONSENT/DECLINE of U.S. Magistrate Judge Jurisdiction. Pursuant to Fed. R. Civ. P. 73(b)(1), this document is restricted to attorneys and court staff only. Judges do not have access to view this document and will be informed of a party's response only if all parties have consented to the referral. (Lozada, Luis) (Entered: 09/06/2023)

Sept. 6, 2023

Sept. 6, 2023

20

ORDER REASSIGNING CASE signed by District Judge Jennifer L. Thurston on 9/7/2023. New case number 1:22-cv-00657-HBK.(Marrujo, C) (Entered: 09/07/2023)

Sept. 7, 2023

Sept. 7, 2023

21

MOTION to WITHDRAW as ATTORNEY by Karla Ayala. (Thrift-Viveros, Deylin) (Entered: 09/13/2023)

Sept. 13, 2023

Sept. 13, 2023

22

ORDER DENYING 14 PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT WITHOUT PREJUDICE, signed by Magistrate Judge Helena M. Barch-Kuchta on 9/26/2023. (Apodaca, P)

Sept. 26, 2023

Sept. 26, 2023

RECAP
23

MOTION Preliminary Settlement Approval by Karla Ayala. Motion Hearing set for 11/8/2023 at 02:00 PM in Yosemite (HBK) before Magistrate Judge Helena M. Barch-Kuchta. (Attachments: # 1 Declaration Declaration of Thomas A Saenz, # 2 Exhibit Signed Settlement Agreement, # 3 Exhibit RG2 Brochure, # 4 Exhibit Revised Long Form Class Notice, # 5 Exhibit Revised Short Form Class Notice, # 6 Exhibit Class Notices, # 7 Proposed Order Proposed Order for Renewed Preliminary Approval)(Saenz, Thomas) (Entered: 10/03/2023)

Oct. 3, 2023

Oct. 3, 2023

24

MINUTE ORDER (Text Only): On October 3, 2023, Plaintiff filed a Renewed Unopposed Motion for Preliminary Settlement Approval (Doc. No. 23 ). On the Court's own motion and pursuant to Local Rule 230(g), the hearing scheduled for November 8, 2023 at 2:00 P.M. is VACATED. Considering the Motion is unopposed, the Court deems the matter submitted and suitable for decision on the papers and without oral argument. Signed by Magistrate Judge Helena M. Barch-Kuchta on 10/4/2023. (Apodaca, P) (Entered: 10/04/2023)

Oct. 4, 2023

Oct. 4, 2023

Minute Order AND ~Util - 1 Terminate Deadlines and Hearings

Oct. 4, 2023

Oct. 4, 2023

25

ORDER GRANTING 23 Preliminary Approval of Class Action Settlement signed by Magistrate Judge Helena M. Barch-Kuchta on 11/08/2023. Final Certification Hearing set for 3/7/2024 at 01:00 PM in Courtroom 6 (HBK) before Magistrate Judge Helena M. Barch-Kuchta.(Flores, E)

Nov. 8, 2023

Nov. 8, 2023

RECAP
26

NOTICE of Class Action Settlement - Short Form by Karla Ayala re 25 Order,, Set/Reset Deadlines and Hearings,, Order on Motion for Miscellaneous Relief,. (Lozada, Luis) (Entered: 11/13/2023)

Nov. 13, 2023

Nov. 13, 2023

27

NOTICE of Class Action Settlement - Long Form by Karla Ayala re 25 Order,, Set/Reset Deadlines and Hearings,, Order on Motion for Miscellaneous Relief,. (Lozada, Luis) (Entered: 11/13/2023)

Nov. 13, 2023

Nov. 13, 2023

28

MINUTE ORDER (TEXT ONLY): Upon review of the submission of revised Notice of Class Action Settlement-Short Form ( 26 and Long Form 27, the Court APPROVES the revised Class Notices. Signed by Magistrate Judge Helena M. Barch-Kuchta on 11/14/2023. (Apodaca, P) (Entered: 11/14/2023)

Nov. 14, 2023

Nov. 14, 2023

Minute Order

Nov. 14, 2023

Nov. 14, 2023

29

STIPULATION and PROPOSED ORDER for Modification of Settlement Agreement; or, Alternatively, Allow Percentage of Recovery by Karla Ayala. (Attachments: # 1 Proposed Order)(Lozada, Luis) (Entered: 01/05/2024)

Jan. 5, 2024

Jan. 5, 2024

30

ORDER granting Joint Stipulation to allow Percentage of Recovery Method to Limited Extent 29 signed by Magistrate Judge Helena M. Barch-Kuchta on 1/9/2024. (Lundstrom, T)

Jan. 10, 2024

Jan. 10, 2024

RECAP
31

MOTION for ATTORNEY FEES, Costs, and Service Award by Karla Ayala. Motion Hearing set for 3/7/2024 at 01:00 PM in Courtroom 6 (HBK) before Magistrate Judge Helena M. Barch-Kuchta. (Attachments: # 1 Declaration Luis Lozada)(Lozada, Luis) (Entered: 02/08/2024)

Feb. 8, 2024

Feb. 8, 2024

32

MOTION Final Approval of Class Settlement by Karla Ayala. Motion Hearing set for 3/7/2024 at 01:00 PM in Courtroom 6 (HBK) before Magistrate Judge Helena M. Barch-Kuchta. (Attachments: # 1 Declaration Dana Boub, # 2 Exhibit A, # 3 Exhibit B, # 4 Proposed Order)(Lozada, Luis) (Entered: 02/08/2024)

Feb. 8, 2024

Feb. 8, 2024

33

STATEMENT of NON-OPPOSITION by Valley First Credit Union to 32 Motion for Miscellaneous Relief,. (Richter, Stuart) (Entered: 02/21/2024)

Feb. 21, 2024

Feb. 21, 2024

34

MINUTES (Text Only) for proceedings held before Magistrate Judge Helena M. Barch-Kuchta: FINAL CERTIFICATION HEARING held on 3/7/2024. Plaintiff's Counsel Luis Lozada and Defendant's Counsel Stuart Richter were present. No appearances by any objectors. The Court to issue a written order. Court Reporter/CD Number: ECRO - Otilia Rosales. (Apodaca, P) (Entered: 03/07/2024)

March 7, 2024

March 7, 2024

In Court Hearing

March 7, 2024

March 7, 2024

35

ORDER GRANTING Plaintiff's Unopposed 32 Motion for Final Approval of Class Action Settlement; ORDER GRANTING Plaintiff's Unopposed 31 Motion for Attorney's Fees, Costs, and Service Award signed by Magistrate Judge Helena M. Barch-Kuchta on 3/11/2024. CASE CLOSED. (Sant Agata, S) (Entered: 03/11/2024)

March 11, 2024

March 11, 2024

RECAP

Case Details

State / Territory:

California

Case Type(s):

Fair Housing/Lending/Insurance

Immigration and/or the Border

Key Dates

Filing Date: June 1, 2022

Closing Date: March 11, 2024

Case Ongoing: No

Plaintiffs

Plaintiff Description:

Class of 48 individuals denied membership at credit union due to being DACA recipients

Plaintiff Type(s):

Private Plaintiff

Public Interest Lawyer: No

Filed Pro Se: No

Class Action Sought: Yes

Class Action Outcome: Granted

Defendants

Valley First Credit Union (Modesto, Stanislaus), Regional

Defendant Type(s):

Bank or credit provider

Case Details

Causes of Action:

42 U.S.C. § 1981

Other Dockets:

Eastern District of California 1:22-cv-00657

Available Documents:

Any published opinion

Complaint (any)

Injunctive (or Injunctive-like) Relief

Monetary Relief

Trial Court Docket

Outcome

Prevailing Party: Plaintiff OR Mixed

Relief Granted:

Damages

Injunction / Injunctive-like Settlement

Source of Relief:

Settlement

Form of Settlement:

Court Approved Settlement or Consent Decree

Voluntary Dismissal

Content of Injunction:

Preliminary relief granted

Amount Defendant Pays: $165,000

Issues

Discrimination Area:

Lending

Discrimination Basis:

Immigration status

Immigration/Border:

DACA (Deferred Action for Childhood Arrivals)