History
In 1938, Cobb Electric Membership Corporation (EMC) was founded by the members it serves as a non-profit electric cooperative to help provide electricity to areas in and around rural Cobb County, Georgia. Since its inception, Cobb County has grown into a sprawling suburb of Atlanta making Cobb EMC one of the largest co-ops in the United States with over 193,000 members. Cobb EMC is owned by its members (the customers) and managed by a Board of Directors who are charged with democratic representation of the membership in all decision-making responsibilities. Nationally, EMCs are organized under seven core principles known as the Cooperative or Rochdale Principles which include voluntary and open membership, democratic member control, members' economic participation, autonomy and independence, education, training and information, cooperation among cooperatives, and concern for community. These lay the foundations for an open, transparent and fair EMC. 

Lawsuit

In October 2007, several members of Cobb EMC filed suit against the cooperative’s board members. The suit alleged “gross mismanagement, breach of fiduciary duty, self-enrichment and a waste of corporate assets, related to the relationship between Cobb EMC and Cobb Energy.”[1] Cobb Energy was created in 1997 as a for-profit entity and would be responsible for the day-to-day operations of Cobb EMC after Cobb Energy and Cobb EMC signed a 40-year operating contract. The contract allowed Cobb Energy to sign an 11 percent markup for running Cobb EMC. The plaintiffs argued that Cobb EMC board members were moving millions of dollars in EMC money to Cobb Energy. Judge Stephen Schuster of the Cobb County Superior Court heard arguments in the case and in December 2008, after nearly 14 months of litigation, a settlement agreement between the two parties was reached.

The settlement required Cobb EMC to acquire Cobb Energy for an estimated cost of $47 million and would end the relationship between the two entities. However, the plaintiffs’ attorneys claimed, “the co-op will net $65 million in the deal approved. The operating contract’s markup alone was costing the co-op more than $5 million per year.”[2] The settlement also required Cobb EMC to make its election process more democratic, however changes in the bylaws in regards to voting would bring the case back into court.

Although the case was settled in December 2008, the plaintiffs found that the Cobb EMC board was not following through with the order to make board elections more democratic. The plaintiffs appealed the case to the Georgia Court of Appeals. Board elections were suspended by the Court of Appeals until a resolution of the suit was reached. On April 14, 2010, the Georgia Court of Appeals ruled unanimously in favor of the plaintiffs finding that the bylaw changes focusing on elections and proxy voting were in violation of the 2008 settlement agreement between the plaintiffs and Cobb EMC. The Appeals Court thereby ordered Superior Court Judge Stephen Schuster to enforce the settlement between the two parties.

Cobb EMC appealed the ruling to the Georgia Supreme Court (GASC) on April 23, 2010. In November 2010, the Georgia Supreme Court accepted Cobb EMC's writ of certiorari and scheduled oral arguments occurred in February 2011. The GASC ruled that Cobb EMC could not use proxies as defined in the settlement, and enforced the ruling of the Appeals Court. 

Later that summer, both parties met with Judge Stephen Schuster who enforced the ruling with a new order and hammered out a schedule for board elections. Schuster also lectured the current Board on their inaction on hiring a new president and CEO of Cobb EMC. The matter is now considered settled.

Corruption Scandal and Indictments

In 2009, Cobb EMC found itself in the midst of even more legal difficulties. In April 2009, the Cobb County district attorney's office and the Georgia Bureau of Investigation (GBI) executed a search warrant related to possible theft and racketeering among Dwight Brown and board members including Larry Chadwick, David McGinnis and Frank Boone. GBI agents confiscated files from Cobb EMC headquarters and the personal residences of several board members. 

On January 6, 2011 a Cobb County grand jury indicted Cobb EMC president/CEO Dwight Brown on 31 counts including racketeering and theft. Brown is accused of using Cobb EMC funds for various purposes without permission from Cobb EMC or its members. In March, Judge Robert Flournoy tossed the indictment against Brown citing a technicality. The Cobb County D.A.'s office has appealed the ruling to the GA Supreme Court. 

In July 2011, Dwight Brown was re-indicted, this time with 35 felony charges. The same 31 charges against Brown were refiled along with 4 new counts of threatening and intimidating witnesses that spawned from a lawsuit Cobb EMC filed against the plaintiffs in the derivative suit. On Nov. 30, 2011, Brown's attorneys argued that the charges should be dropped. A decision will be handed down later in December.

FERC Investigation Request

On April 26, 2011, two Cobb EMC customers requested an investigated of Cobb EMC by the Federal Energy Regulatory Commission. Of the many allegations made in the request, the customers point out that Cobb EMC failed to disclose information that violates federal regulation. For more detailed information a fact sheet of the alleged violations can be found here. 

Elections
On September 17, 2011, Cobb EMC members attended their first members meeting in over three years. Members roundly rejected the EMC's attempt to hold board elections by mail-in ballots, fearful that a mail-in vote would ensure the reelection of incumbent board members. Voting down this measure ensured that voting would be held in-person and votes would be counted by a third party.