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Temporary restraining order against PEC election denied; new court hearing set

Randy Klaus

Randy Klaus, a former Pedernales Electric Cooperative board director, filed a civil suit against PEC because he was deemed ineligible to run in the upcoming District 3 election. Courtesy and staff photos

District Judge Allan Garrett denied a request for a temporary restraining order to delay the Pedernales Electric Cooperative’s Board of Directors election for districts 2 and 3 at a hearing on Monday, May 1, in Burnet. The 33rd District Court judge also set a subsequent hearing on the question of permanent injunctive relief as requested by former PEC board member Randy Klaus, who was denied a position on the ballot for District 3. The hearing was set for 1:30 p.m. Friday, May 12, in the Burnet County North Annex courtrooms. 

Klaus served as a director from 2017-20. He resigned in February 2020 “under duress,” he told, but then filed to run for the same seat that same year. PEC’s Qualifications and Elections Committee, which is appointed by the sitting board, deemed him unqualified in 2020. Klaus filed again this year and was again denied. The QEC is made up of seven co-op members, each appointed by the director of their district. A new QEC is appointed each year.

The hearing was set to occur before PEC members begin voting on May 16. The election runs through June 9. Winners will be seated during a regular board meeting after the annual meeting on June 16. 

When Klaus was denied a place on the ballot this year, he filed a civil suit in Blanco County district court seeking injunctive relief. 

Attorney Rob Johnson of Foley and Lardner LLP in Austin represented PEC at the TRO hearing. PEC corporate counsel Michael Butler sat in as second. PEC board attorney Ross Fischer also attended the hearing, but as a possible witness, sitting in the audience. Klaus, a CPA, represented himself. 

“PEC cannot be allowed to arbitrarily exclude a bylaw-qualified member from the ballot,” Klaus said. “I’ve satisfied all 17 of the bylaws mandated to serve on the board.” 

Johnson answered that a temporary restraining order would only last 10 days and that the election was not due to begin until 16 days from the court date. 

“There’s no imminent or irreparable injury to relieve here,” he said. 

He also pointed out that PEC is not a government entity but rather a nonprofit corporation entitled to draw up its own bylaws.

“The plaintiff is asking the court to rewrite corporate documents,” he said. “There’s no legal basis for doing that.” 

Both parties submitted affidavits before the hearing. In the PEC affidavit, which was written by Butler, the PEC attorney noted that ballots are already being printed.

“If PEC is delayed in printing under the current schedule, estimated additional costs for the expedited printing of ballots and candidate materials off-schedule are between $25,000 and $30,000 per district,” he wrote in the affidavit. “PEC would incur this cost in order to print the new ballots and candidate materials in time for its statutorily required annual meeting in June.” 

Klaus countered in a responsive affidavit that the additional cost was only 0.0099 percent of the co-op’s more than $821 million in annual revenues. As a percentage of assets, the cost would be 0.004 percent. 

“Mr. Butler’s affidavit said nothing of any substance regarding the very serious matters raised in the pleadings,” Klaus wrote in his responsive affidavit. “Unless this matter is settled amicably between the parties, the truth will not be known and PEC will continue to bar bylaw-qualified and eligible candidates from appearing on the ballot for arbitrary and capricious reasons.”

Judge Garrett denied the TRO but will hear arguments on May 12 on the merits of the original case filed by Klaus in April.