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Unlike most trials, the moment of judgment elicited no dramatic reaction from the parties or the observers. The judge’s approval of the settlement of the class action was as expected as incumbent re-elections were in the past at the Pedernales Electric Cooperative.

On Monday, Judge John K. Dietz certified the class, approved the settlement as fair, reasonable and adequate, approved $4 million in attorneys’ fees and costs, and awarded an “incentive fee” of $15,000 to each of the three remaining named plaintiffs in the class action that helped bring down the walls of secrecy at the PEC. By the terms of the settlement, none of the individual defendants was ordered to pay any form of damages nor admit any wrongdoing.

While acknowledging the “righteous indignation” of cooperative members regarding the actions of “some directors” at the PEC and the settlement’s failure to hold them personally accountable, Judge Dietz said there “never really looked like a legal recovery of remuneration” in the suit would be possible according to the law and the facts revealed during discovery since they could find no evidence of “individual gain” by the defendants.

Dietz told the audience that the plaintiffs were “persistent in their efforts” to remove the sitting board of directors and in their claims against them, but said, “This was a settlement in the true meaning of the word, where each side had to forgive a little of its position.”

None of the PEC board of directors attended Monday’s hearing. About 20 PEC members braved the rain, fog and rush hour traffic to attend and participate in the 9:30 a.m. hearing, only to be informed that the hearing would be delayed an hour. The hour delay stretched into an hour and forty-five minutes, and then PEC member David M. Waters began the day’s testimony. “I don’t want the people who have robbed me to be let off and not held accountable.” Waters said late fees had been tacked onto his electric bill when he couldn’t pay on time due to health reasons, while the defendants were paying themselves excessive salaries and enjoying lavish meals at co-op expense.

Don Casey, a Blanco County rancher, informed the court that we “could fill up a football stadium with people not happy with the PEC” and although he wanted to stop the run-up of attorneys’ fees, he did not want to let the “old guard off the hook.” Casey asked the court to postpone a ruling until more information was discovered.

Judge Dietz offered Casey an explanation which he said is “not going to be an answer that satisfies everyone.” The laudable early history of the PEC “morphed into a good old boy network,” said Dietz, and his sense is that today that accusation is less true due to the recent changes at the PEC. Tossing the reins back to the membership, Dietz said that whether change will continue at the PEC depends “on what co-op members do with the elections.”

Dietz said, “Throughout the litigation process the court has provided the opportunity to the cooperative to make changes themselves.” He told the PEC to fill Bud Burnett’s vacant seat through an election, which would allow the members to elect 3 new voting directors rather than just 2 to the board in June. He told the PEC that he would order all documents obtained during discovery released, but that “if you want to pre-empt me” and obtain some good will, then release the documents earlier, which they did.

With Casey still standing at the speaker’s podium, Dietz ended his comments by informing the audience that he met personally with the PEC directors and they told him they want to change and will do so. Dietz said he realizes that “this may not be salve to put on open wounds,” but that the “opportunities for change are in your hands.”

Carlos Higgins, PEC member from Austin, kept his comments brief since he testified at last Wednesday’s hearing. He presented 3 emails he received from members who couldn’t be at the hearing in person. One said many members would have attended the hearings, but they had to work. The others said they attempted to electronically file objections in the case, but the system only allows attorneys to use the electronic filing method, and they couldn’t afford to hire an attorney.

David Allen Hall, PEC member from Blanco, asked the court to appoint a “class counsel” to “scrub the settlement,” particularly the extensive releases it contains, and re-submit a cleaner settlement proposal to the court. Hall said this would help assuage the “ire of the membership.”

John Watson, PEC member from Blanco County, asked the court to defer rendering judgment on any part of the settlement based on the actions of the so-called “disinterested committee” made up of Director Barry Adair and the non-voting advisory directors of the PEC. Watson said that the PEC bylaws are clear in their prohibition on advisory directors voting on PEC business and that any attempt for the advisory directors to bind the PEC is “ultra vires” to their roles as non-voting directors.

Judge Dietz offered an explanation of the use of the “disinterested committee” to act on the PEC’s behalf in the suit saying, “The court isaware of the approval of this mechanism.” He said the parties’ attorneys told “the court that they would use this independent mechanism. I thought it was a good idea.” The judge admitted, “I didn’t spend a great deal of time on the issue because facially it appeared to be…a more open and less objectionable way” of handling the matter.

Burnet County rancher Sam Burnam was the last witness to address the court Monday morning. “People are extremely distressed. After church yesterday, this is all people talked about.” Burnam said that many more people would have attended the court hearings if it had not been held in Austin which requires a person to “risk life and limb just to get here.”

Judge Dietz overruled all the objections filed in the case. In his summary, Dietz assured the audience that the objectors did not raise any issues that he and the parties did not look at and consider.

Dietz characterized this action as a “very large challenge” due to the scope of inquiry by the plaintiffs into the “skullduggery” at the PEC and said it was a “joy” working with such “high caliber attorneys.”

He credited the “keen interest by the press” and said that Claudia Grisales of the Austin American Statesman should win a Pulitzer Prize for her reporting. PEC members in the courtroom smiled and nodded in agreement towards Grisales, especially in light of the negative remarks PEC General Manager Juan Garza addressed at Grisales at last Thursday’s candidate forum.

Judge Dietz concluded, “The PEC a year ago is not the PEC of today; the PEC today is not what the PEC will be next year.” And, with that forecast, handed the future of the cooperative into the hands of its members and the ballots they will receive in the mail this week.