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Plaintiffs Lawyers in Cobb EMC Litigation Seek $29 Million in Fees

Six firms represent current and former EMC members in $100 million settlement of class action suit

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Lawyers for the plaintiffs in a class action lawsuit against the Cobb Electric Membership Corp. have asked for a total of $29.4 million in fees for their work that led to the $100 million settlement.

The settlement resolves six years of multiple legal battles over payment of "capital credits"—similar to profit-sharing payments—to current and former members of the EMC. The deal has been described as the largest known settlement in the county's history. A website, call center and claims administrator have been set up to handle payments and to assist class members. Legal fees will come from the settlement fund.

The fee requests are explained and supported in more than 200 pages of documents filed this month with the Cobb County Superior Court, where the case is before Judge J. Stephen Schuster. The judge approved a preliminary settlement agreement in October. The company agreed to pay $34 million to past EMC members and $64 million to current customers, plus the cost of notifying and paying the class, which lawyers estimated at $2 million. The payments will reimburse customers for profits, or "capital credits," that were never paid to members as Georgia law requires.

The judge has scheduled a final settlement hearing for 9 a.m. on Feb. 25 and set a deadline of one week prior for a report from the court-appointed special master, Balch & Bingham partner and former Attorney General Michael Bowers, who mediated the settlement. He told the judge the parties fought over "every nickel."

The deal has engaged eight law firms: the special master's firm, Balch & Bingham, whose bill has not yet been filed; the EMC's defense counsel John Moore and J. Kevin Moore of Moore, Ingram, Johnson & Steele in Marietta; and three plaintiffs' firms for each of the groups in the class action.

The former members' class is the larger of the two groups. The company has estimated that group could include as many as 700,000 former customers, according to Cobb EMC President and CEO Chip Nelson. The current members group includes approximately 170,000. The former members' lawsuit was filed in January 2010 and later was joined by the current members. A prior action started in 2007 and resolved in 2012 helped pave the way.

Attorneys for the former members group requested 30 percent of the $98 million settlement fund, plus $250,000 in expenses. The former members' lawyers include: W. Paul Lawrence II and Charles Siegel of Waters, Kraus & Paul in Washington; Samuel Pierce Jr. and Charles Gabriel of Pierce Gabriel Partners of Roswell; and Larry Lahman of Mitchell & Declerck in Enid, Okla.

Attorneys for the class of current EMC members asked the court for their portion to be set at $8.12 million in fees plus $33,000 in expenses. That number would come out of the total fee award of 30 percent—or whatever number the judge approves. Lawyers representing the current EMC members include: David Cohen of Complex Law Group in Marietta, Hylton Dupree Jr. of Dupree & Kimbrough in Marietta, and Michael Terry and Robert Ashe III of Bondurant Mixson & Elmore. The lawyers declined comment because the case is pending.

The motions filed by both plaintiffs' groups include Georgia case histories that set precedent for fee awards between 25 percent and 33 percent of the total common fund. They also include documentation of the difficulty of the case, the value of the settlement and the credentials of the lawyers. "The case was unusual and challenging from the start," the former members' lawyers stated in their motion for fees. "At the outset, plaintiffs were met with a firm declaration by Cobb that the claims were baseless, with a threat of sanctions."

The current members attorneys also addressed the challenges they faced in their fee motion. "This complex litigation was protracted and contentious from the outset," the motion stated. The motion quoted Bowers saying, "Virtually every aspect of the litigation appeared to be hotly contested." The document also quoted Kevin Moore, who serves as general counsel to the Cobb EMC, saying, "each and every point, item and term" and sometimes "word" in the proposed preliminary settlement agreement "was contested."

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