Cobb EMC faces another lawsuit

By Gertha Coffee and Margaret Newkirk

The Atlanta Journal-Constitution

Cobb EMC faces another lawsuit, this one claiming it owes thousands of former customers up to $300 million. The lawsuit seeks class-action status for all former customers since 1939.

The lawsuit, filed Friday in Cobb County Superior  Court, claims that Cobb EMC, one of Georgia’s largest electric cooperatives, has kept money owed to former customers 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 company's Web site says the co-op has paid $33 million in rebates since 1996.

The lawsuit, filed by Alpharetta law firm Pierce, Gabriel & Parker, 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.

"Cobb EMC has kept these capital credits and not returned any," said attorney Chuck Gabriel. But unlike current customers, former EMC customers can only seek repayment through the courts, said attorney Sam Pierce.

“This lawsuit filed against Cobb EMC is the kind of abusive litigation that gives abusive litigation a bad name," said Dwight Davis, a lawyer with King and Spalding who represents Cobb EMC. "Lawsuits like this one have been uniformly rejected by every court that has ever considered them," he said.

Cobb EMC serves customers  in Cobb, Bartow, Cherokee, Fulton, Paulding, Randolph, Calhoun, Quitman, and Clay counties.

The co-op settled a lawsuit with suing customers in December 2008, related to a for-profit affiliate, Cobb Energy.

In April last year, the Cobb County district attorney's office executed search warrants at five locations related to Cobb EMC.