Rappahannock News

Appeals court ruling on REC utility favors each side

10-year battle ending

A three-judge panel of the Virginia Court of Appeals in Richmond has ruled that the Rappahanno­ck Electric Cooperativ­e (REC) utility wrongfully prevented its member- owners from voting on a proposal that would require the co- op to publish board compensati­on.

At the same time, the Court of Appeals ruled Feb. 13 in favor of REC on another issue. The court upheld a lower court ruling to treat signed, but otherwise blank, proxy forms as abstention­s and require public discourse of how individual directors voted.

At issue were proposals made to amend the board’s bylaws by member- owners Seth Heald, a Rixeyville resident and the lead petitioner, Michael Murphy and John Levasseur.

One of the proposals, which was upheld by the Court of Appeals, will require the co- op to publish board members’ compensati­on in its magazine “Cooperativ­e Living.” The appeals court ruling prohibits the board from voting to increase compensati­on without giving members 60 days’ notice of the vote.

The Court of Appeals also reversed a trial court’s decision that was in favor of REC. It ruled in favor of the petitioner­s’ claim that REC’s existing bylaw —requiring a two-thirds majority voting threshold for bylaw amendments — was invalid because such threshold is not required by the cooperativ­e’s articles of incorporat­ion.

“While the court of appeals did not grant REC all of the relief it requested, REC is pleased by the ruling on the proxy voting bylaw proposal, and trial court’s decision in favor of REC on the petitioner­s’ open meetings bylaw proposal,” REC spokespers­on Casey Hollins wrote in an email to the Rappahanno­ck News.

Hollins said they have “already implemente­d changes to the REC bylaws to address the petitioner­s’ request of prior notice for any changes to board compensati­on.”

“This is a signi cant win for rural Virginians, and for the principle of democratic governance of electric co- ops,” Heald, a retired Department of Justice lawyer, wrote in an email to the Rappahanno­ck News about the Feb. 13 decision. “It’s unfortunat­e that REC’s board fought this basic reform for more than a decade.”