Daily Independent (Ashland, KY)

Local News

April 9, 2014

Olive Hill electricity lawsuits merged

GRAYSON — A judge has issued an order consolidating a pair of class-action lawsuits alleging the city of Olive Hill overcharged its residents for electricity.

The recent ruling by Carter Circuit Judge Rebecca Phillips merges two complaints filed last year against the city into a single suit. According to the ruling, the number of class members could potentially grow to more than 4,500.

Phillips also appointed attorney Jim Deckard of Lexington and his partner, Matthew Malone, as lead counsel for the class. Attorneys Michael Fox and Reid Glass of Olive Hill, who filed one of the two original suits, also had sought to represent the plaintiffs.

“Mr. Deckard has had professional experience at the highest levels of state government. His role within such governmental positions has afforded him litigation experience in various settings,” the ruling states. “Of great significance to this Court is the fact that (Malone) not only has experience in complex litigation, but also has superior experience in utility law.”

That experience includes electric and other utility issues “litigated before courts and administrative agencies,” and his “fund of knowledge will eliminate the need to re-invent the wheel,” Phillips wrote.

Also, as members of a firm with eight attorneys, Deckard and Malone are well-equipped to provide the “resources and support” the case will require, the ruling states.

However, the judge denied a request by Deckard and Malone to add  Patrick Flannery — who initially filed a complaint himself before bringing Deckard on board — as co-counsel for the class. Her reason for doing so, according to the ruling, had to do with Flannery’s position as Carter County attorney.

“While local counsel may be desirable for purposes of convenience, the court is concerned that Mr. Flannery may have a conflict of interest that would make him unsuitable to serve in the capacity as local counsel or co-counsel,” Phillips wrote.

Given the potential size of the class, Phillips deemed it “highly unlikely” that one or more of its members would not be involved in legal matters also involving the county attorney’s office, be they district court criminal prosecutions, child support collection issues or cases in family court.

The lawsuits came about in the week of a January 2013 report issued by the Kentucky Attorney General’s Office’s Office of Rate Intervention. In that report, ORI Director Jennifer Black Hans concluded Olive Hill’s electric rate ordinance, which was adopted in 2000, violated a state law requiring city-owned utilities to hold public hearings before increasing electricity rates.

The suits allege that, among other violations, the city defrauded its electrical customers and violated the Consumer Protection act by not following established state law in setting and adjusting its electricity rates, and that it sought to evade public hearings on proposed rate increases.

A motion currently pending before Phillips seeks to add former City Clerk Cheri James and former Utility Director Derrick Jones as defendants in the suit.

KENNETH HART can be reached at khart@dailyindependent.com or

(606) 326-2654.

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