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Class Action Continues Before State Public Service Commission

Another class action proceeding has been filed against Carroll Electric Service Corporation, this time before the Arkansas Public Service Commission.  In a previous post, we discussed the Arkansas Superior Court’s dismissal of a civil action filed against Carroll.  This latest filing largely continues that litigation, just at a different forum.

The original action,was dismissed by the state supreme court.  The court held that the matter was subject to the exclusive jurisdiction of the state’s Public Service Commission.  After the dismissal of the civil action from the court system, Plaintiffs filed a complaint at the Arkansas Public Service Commission.

According to news articles and other sources, the case arose from the cooperative’s alleged use of “environmentally destructive herbicide on the cooperative’s rights of way which traverse Plaintiffs’ properties.”  Some members complained and felt that the board did not adequately consider their objections.

Irrespective of the alleged origin, the complaint alleges violations of the cooperative’s bylaws and articles of incorporation and violations of statutes and common law of Arkansas.  Plaintiffs allege that the cooperative has denied members access to financial, operational, and managerial information and has prevented member participation in cooperative governance.  Like many other cooperative lawsuits, this matter involves allegations that the cooperative failed to return capital credits.

Plaintiffs seek an order requiring the cooperative to regularly retire capital credits, to amend the “undemocratic provisions of its bylaws,” to promote member participation in cooperative governance, and prohibiting the use of herbicides when members make such a request.

The cooperative has provided a Q&A section on its website regarding capital credits.  According to news articles, the cooperative believes that the members’ view of the cooperative and its service remains positive, based on a member survey.

The matter is slated for a hearing in the near future.  Stay tuned to AHC’s Cooperative Law Blog for additional developments.

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