Cobb EMC $100 million settlement of class-action suit OK’d by judge
by Nikki Wiley
February 25, 2014 12:50 PM | 11027 views | 5 5 comments | 14 14 recommendations | email to a friend | print

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.


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two cents
February 25, 2014
Cobb Schools - receives the largest amount - $1.8 million

Attorneys - get paid $19.8 million

Something is very wrong with our system.
Peon Member
February 25, 2014
Face it, Cobb EMC members were once again screwed.

When does Dwight Brown come to trial?
February 25, 2014 how many years will it take for the checks to be issued?
Cobb EMC Member
February 25, 2014
This sucks ! The Cobb EMC "leadership" holds our money illegally for 30 plus years and now wants us to settle for a discounted amount or wait 20 plus years. Cobb EMC should be paying it's members interest on member money withheld illegally over all of these years, not a discount.

Who audited the amount and why the heck are attorney's getting almost $20,000,000. Maybe the attorney general should have taken the lead in getting Member money back - Cobb EMC leadership violated state law, didn't they ?

Judge, common sense tells this Cobb EMC Member that this is a really bad deal based on illegal actions - who is going to jail Judge and why did you approve such an preposterous settlement ?
February 26, 2014
The AG was a Cobb Commissioner - probably too chummy with Dwight. There still is no transparency at Cobb EMC. Ask Ga Rep Don Parsons why he did not let a bill out of committee that would provide oversight.
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