MARIETTA — A four-year battle a judge called “trench warfare at its worst” over a class-action lawsuit alleging that Cobb Electric Membership Corp. withheld millions of dollars from customers ended Tuesday morning.
Cobb Superior Court Judge Stephen Schuster signed off on the $100 million settlement Tuesday that is the largest class-action settlement in Cobb County’s history.
Cobb EMC is a nonprofit owned by its 175,000 customers, called “members,” and is accused of failing to return excess revenues to customers.
The suit says that $286 million should have been returned to members but instead was kept. An estimated 900,000 customers are now owed money. The EMC has offered a settlement to pay $98 million, about one-third of what the suit says it owes.
At the end of each year, the EMC places its excess revenue in a capital account where it is assigned to the members based on how much electricity they use.
Until the lawsuit was filed in 2010, the last time Cobb EMC refunded capital credits to its members was in 1976, when it returned $500,000.
Payouts range from fewer than $100 to several million dollars. Members can choose to receive an immediate payout of a portion of their capital credits or to receive the full amount on a yearly basis over 24 years.
The Cobb Board of Education has been offered the largest payout. It opted to take an immediate lump sum of $1.8 million. If the board had chosen to receive payments over 24 years, it would have received $5.15 million.
The district isn’t sure yet how it will spend the cash or when it will receive a check, said school board Chairwoman Kathy Angelucci, who sat in court Tuesday next to Vice Chairman Randy Scamihorn.
Still, it’s a needed boost for the school system facing an $80 million shortfall.
“I think this will go a long way,” Angelucci said.
The Cobb Board of Commissioners is another top customer offered a lump sum of almost $1.6 million or a staggered payment of $4.9 million.
The Cherokee County Water Authority, Cherokee Board of Education and city of Powder Springs are among other government entities that will get a refund.
“These public entities have benefitted very much so from this litigation,” said Hylton Dupree, attorney for current EMC members, of Marietta-based Dupree & Kimbrough LLP.
Nonprofits will also get a check. The YMCA of Cobb has been offered a one-time payout of $38,419 or $182,084 over 24 years.
Cobb EMC will pay $19.8 million in attorneys’ fees.