Cobb EMC adds legal firepower for appeal

Just a few weeks ago, Marietta-based Cobb EMC was knocked down in court for trying to control a court-ordered vote by its members.

The non-profit electric co-op didn’t stay down for long.

This week, the co-op appealed that ruling, which said its behavior had violated a December legal settlement, co-op bylaws and state law.

The co-op also just upped its legal firepower.

Four attorneys with King & Spalding, the biggest and best-paid of Atlanta’s local law firms, have now joined the already substantial team representing the co-op in its nominally settled dispute with customers.

The appeal will push back two membership votes dictated by the co-op’s settlement with suing customers.

Those votes are now the focus of a power struggle. Co-op customers, who are also its owners, elect co-op board members.

Plaintiffs want the co-op’s current board and management ousted. Co-op management wants to retain the status quo.

Cobb EMC is the monopoly power provider for 190,000 customers in five metro Atlanta counties.

In 2007, eight customers sued the co-op and its for-profit operating company Cobb Energy over ties between the two companies.

Controlled and largely owned by co-op insiders, Cobb Energy charged an 11 percent markup to operate the co-op. The lawsuit said Cobb Energy siphoned the customer-owned co-op’s assets, enriching insiders.

Cobb settled with customers Dec. 2.

The deal folded Cobb Energy back into the co-op. It also specified that members would vote by the beginning of February on whether to change the co-op’s rules, and allow mail-in voting for board members. Plaintiffs were to draft the ballot language.

By Christmas, the deal had unraveled.

Plaintiffs dragged the co-op into court over a mailing the co-op was poised to send out.

The mailing urged members to approve not only the mail-in amendment but bylaw changes that, plaintiffs said, effectively limited customers’ right to participate in co-op governance.

Cobb County Superior Court Judge Michael Stoddard sided with plaintiffs, and barred the co-op from proceeding.

That’s the decision that co-op is now appealing, with its newest law firm’s help. The appeal says the court no longer has jurisdiction over the actions that plaintiffs challenged.

Attorney Pitts Carr, who represented the plaintiffs, said the appeal ignores the language of the settlement deal.

“It just gets curiouser and curiouser,” he said.

He also questioned the hiring of a new law firm now.

“It seems odd indeed that the EMC and its directors would hire, now, its 10th law firm, with 25 or 30 lawyers attempting to assure that the board and chief executive do not have to face the vote of the members.”

Co-op spokeswoman Carol Cookerly said King & Spalding had expertise in corporate governance issues, and that the co-op had “streamlined” and now has fewer attorneys than it did.

Still unclear: How the co-op’s law firms will be paid.

Its insurance carrier has already paid Carr’s firm its $3.5 million fee. But it has yet to pay the co-op’s bills, according to a lawsuit Cobb EMC filed Tuesday.

Richard Hallman and Andria Simmons contributed to this article.