Cobb EMC Will Pay $98 Million to Settle Claims
Members to receive profits as class action battle ends with record sum
Six years of bitter legal battles concluded Thursday in a courtroom full of lawyers who gathered before Cobb County Superior Court Judge J. Stephen Schuster to announce a preliminary $98 million settlement of a class action lawsuit against the Cobb Electric Membership Corp. over sharing profits with customers.
In a deal described as the largest known settlement in the county's history, the money will go to two classes of EMC members—current and former—to be paid by a claims administrator. A website and call center are being developed. The amount that will go to lawyers, which will come from the $98 million, is yet to be determined. For legal fees and expenses, the attorneys will have to seek approval from the mediator who brought the parties together, Michael Bowers, a partner with Balch & Bingham and former Georgia attorney general.
"Every nickel was fought through," Bowers told the court, adding that out of 400 cases he has mediated in his career, he has not seen one more contentious.
In thanking Bowers for his help, the judge referred to the partial government shutdown. "General Bowers, if I could send you up to Washington to work that out, I would."
In reply, Bowers referred to his last political campaign, a failed bid for governor in 1998: "Your honor, I don't do politics anymore."
Bowers began working with the EMC and the two plaintiffs groups a year ago. "There were many moments when I thought, this is not going to work," Bowers told the court. "It was highly adversarial. There were so many things they fought about." The claims arose over the lack of payments of profits back to customers, or members, of the cooperative dating back to the formation of the company in 1938.
The parties did their battling in a conference room at the law firm of Cobb EMC general counsel, J. Kevin Moore of Moore Ingram Johnson & Steele. The room overlooks a cemetery, which Bowers confessed he was beginning to view as a metaphor. "This deal was dead from the beginning," he said.
"I'm not sure what changed, but something changed toward the holiday season," Bowers said. In January of 2012, the parties agreed to a framework. Working out the details of the settlement took another nine months. The lawyers signed the deal Wednesday. The judge signed it in the courtroom at 10:36 a.m. Thursday. They set a date for final approval in February 2014.
Three teams of lawyers thanked each other and the judge. They used the word "happy" frequently. They praised each other. They agreed that Cobb EMC will, within 60 days, set aside an estimated $34 million to be paid to individuals and businesses that were co-op members up through the first half of 1988. The remaining amount, estimated at $64 million, will go to reimburse individuals and businesses that were co-op members between the second half of 1988 through Dec. 31, 2012.
The EMC has turned over 5.5 million addresses and "data points" to facilitate the payments. The size of the class is estimated to be 900,000 former and current members, which would mean the average payment—excluding any legal fees—is about $109 per member. But the lawyers cautioned against stating any average payment because the amount of electricity used varies widely between members, which ranged from individuals in small homes to large busineses.