Class action complaint filed against Carroll Electric

Wednesday, July 20, 2011

CARROLL COUNTY -- A class action complaint against the Board of Directors and management of Carroll Electric Cooperative Corporation was filed July 19 with the Arkansas Public Service Commission.

The complaint was filed by Dane Schumacher and Gordon Watkins, on behalf of all Carroll Electric members.

The core components of the complaint request declaratory and injunctive relief, seeking "increased transparency, more democratic governance, repayment of capital credits, a halt to the use of herbicides without the landowners' permission and more," said Watkins in an email to the newspaper Wednesday.

Although filing the complaint does not require the services of an attorney, Schumacher and Watkins have retained the services of Bill Ikard, assisted by Jordan Haedicke, of Ikard Wynne of Austin, TX, as lead counsel and Randall Bynum of Little Rock as local counsel.

"Bill Ikard and his associates were successful in winning a similar case against Pedernales Electric Coop in Austin, TX, the largest coop in the US, resulting in increased transparency, access to board meetings, payment of capital credits to members, and criminal indictments against its CEO and others," wrote Watkins.

He added that legal recourse was taken after long and serious consideration and only after "more than three years of efforts to work with the CE board and management proved futile."

He said members have been repeatedly denied access to board meetings and minutes, have been denied the right to speak at members' meetings, and bylaws have been repeatedly changed to impede member participation and to make it virtually impossible to gain a seat on the board of directors.

"The property rights of members have been disregarded, with CE's attorney implying that CE can do whatever they please on easements across landowners' property. Members have been denied information about or access to their investment in the coop (capital credits)," he wrote.

The complaint lists a number of specifics against Carroll Electric's practices, including its refusal of "free and unfettered access to the cooperative's financial, operational and managerial information" and its "unjust enrichment" of board members.

Several questions are to be decided, among them, whether Carroll Electric's defendants "have converted property rightfully belonging to members," violated its own bylaws and whether Carroll Electric members are entitled to restitutional and punitive damages.

Schumacher, Watkins and other members of Carroll Electric expressed frustration earlier this year when petition efforts to get a member-nominated candidate, Marcie Brewster, on the ballot for a board position were denied.

The nomination team, upon viewing disqualified signatures, said Carroll Electric's denial of their validity was inconsistent with its practices of handling accounts, that it had accepted bill payments from people who were later denied access to the annual membership meeting on technicalities.

Attempts to reach Nancy Plagge, Director of Corporate Communications at Carroll Electric, were unsuccessful as of press time.

The complaint can be read here:

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