Attorneys in a class-action lawsuit against Cobb EMC are in talks to reach a settlement — one that has the potential to financially affect all current and former members of the electric membership cooperative.
Three former customers who are seeking class-action status for all former customers since 1939 filed suit against Cobb EMC in Cobb County Superior Court in 2010. Both parties entered into settlement talks with a mediator Oct. 8, and those talks are still continuing, according to court records.
“We’re all participating in good faith and not at liberty to comment,” said attorney Charles Gabriel, who along with co-counsel Samuel Pierce is representing the former customers.
Just how much current and former customers stand to gain — or lose — is unclear. If the former members succeed in getting some of the millions they claim to be owed, current members might have to foot some of the bill in passed-along costs, according to a court filing on behalf of Cobb EMC’s current members, who are seeking to be added as a plaintiff.
Attorney Kevin Moore, who represents Cobb EMC, also declined to talk about the possibility of a settlement while the case is in mediation.
“I cannot comment on the possibilities,” Moore said. “I have to respect that process.”
The lawsuit filed by the former customers claims that Cobb EMC, one of Georgia’s largest electric cooperatives, kept money owed to them in violation of “longstanding principles” that guide electric membership cooperatives nationwide. It also says the co-op used money that should go to former customers to make periodic rebates to current customers.
The lawsuit also claims Cobb EMC has failed to abide by the terms of its own charter, which calls for repaying current and former customers from its excess earnings. The excess is credited to members based on power usage.
Instead of repaying its former customers, Cobb EMC has used $38 million to pay rebates to current members, $20 million to buy naming rights to a performing arts center, tens of millions of dollars to operate a for-profit corporation for the benefit of its CEO and control group, and millions to pay lawyers to defend its CEO and control group on criminal charges, the lawsuit states.
Dwight Brown, the former CEO of Cobb EMC, is under indictment in Cobb County on charges of racketeering, theft and witness intimidation. That case is on hold while appeals are pending in the state Supreme Court and Georgia Court of Appeals.
Cobb EMC serves more than 190,000 residential and commercial customers in nine Georgia counties: Cobb, Bartow, Cherokee, Fulton, Paulding, Randolph, Calhoun, Quitman, and Clay.
*Staff reports contributed to this story.