Brito v. Major Energy Elec. Servs., LLC
| Citation | 526 F.Supp.3d 95 |
| Decision Date | 08 January 2021 |
| Docket Number | Civil Action No. ELH-20-0230 |
| Parties | Patricia BRITO, Plaintiff, v. MAJOR ENERGY ELECTRIC SERVICES, LLC, Defendant. |
| Court | U.S. District Court — District of Maryland |
Jane Santoni, Santoni, Vocci & Ortega, LLC, Towson, MD, Janet R. Varnell, Pro Hac Vice, Varnell and Warwick PA, Lady Lake, FL, Matthew T. Peterson, Pro Hac Vice, Varnell and Warwick PA, for Plaintiff.
Mark A. Johnston, Jessica Ashley Glajch, Eckert Seamans Cherin and Mellott LLC, Washington, DC, Kevin P. Allen, Pro Hac Vice, Thomas E. Sanchez, Pro Hac Vice, Eckert Seamans Cherin and Mellott LLC, Pittsburgh, PA, for Defendant.
In this putative class action, plaintiff Patricia Brito has sued defendant Major Energy Electric Services, LLC ("Major" or "Major Energy"), an electricity provider. ECF 1. The suit concerns Major's methods of soliciting and acquiring new residential customers as well as the rates Major charges for electricity.
In an "Amended Class Action Complaint" (ECF 20, the "Amended Complaint"), Ms. Brito asserts four counts, each founded on Maryland law and lodged on behalf of a putative class and a putative subclass. Count I alleges violation of the Maryland Consumer Protection Act ("MCPA"), Md. Code , § 13-101 et seq. of the Commercial Law Article ("C.L."). ECF 20, ¶ 45. In Count II, plaintiff alleges unjust enrichment. Id. ¶ 59. Count III lodges a claim for "Common Law Fraud, Including Fraudulent Inducement, and Fraudulent Concealment." Id. ¶ 64. And, in Count IV, plaintiff asserts negligent misrepresentation. Id. ¶ 72.
The Amended Complaints asserts subject matter jurisdiction pursuant to the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d)(2). Id. ¶ 9. Plaintiff seeks class certification as well as declaratory relief, disgorgement, compensatory and actual damages, attorney's fees, and costs. Id. ¶ 82.
Major has moved to dismiss (ECF 21), supported by a memorandum of law. ECF 21-1 (collectively, the "Motion to Dismiss"). Defendant asserts that dismissal is warranted for lack of subject matter jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(1), and for improper venue, pursuant to Rule 12(b)(3). According to Major, the Court lacks subject matter jurisdiction because Brito has not exhausted her administrative remedies with the Maryland Public Service Commission (the "Commission" or "PSC"). ECF 21 at 2. And, Major contends that venue is improper because Brito is bound by the arbitration clause in her contract with Major. ECF 21-1 at 18. In addition, Major opposes class certification and argues that all of plaintiff's claims fail under Rule 12(b)(6). Id. at 2. The Motion to Dismiss is supported by exhibits. ECF 21-2.
Defendant has also filed a motion to stay or to dismiss plaintiff's suit, pursuant to § 3 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 3. ECF 22. The motion is supported by a memorandum of law. ECF 22-1 (collectively, the "FAA Motion"). The exhibits supporting the FAA Motion are identical to those appended to the Motion to Dismiss. See ECF 22-2.
Plaintiff opposes the Motion to Dismiss (ECF 31) and the FAA Motion (ECF 30) (collectively, the "Opposition"). Defendant has replied to both submissions. See ECF 32 (); ECF 33 ().
Ms. Brito has also moved for leave to file two surreplies. ECF 34. The proposed surreply supporting her opposition to the Motion to Dismiss is docketed at ECF 34-1. The proposed surreply supporting plaintiff's opposition to the FAA Motion is docketed at ECF 34-2. The two proposed surreplies are virtually identical, and each is accompanied by plaintiff's Declaration. See ECF 34-1 at 7; ECF 34-2 at 7.
The motions are fully briefed and no hearing is necessary to resolve them. See Local Rule 105.6. For the reasons that follow, I shall grant defendant's Motion to Dismiss, grant defendant's FAA Motion, and deny plaintiff's motion for leave to file a surreply.
Maryland is one of several states that has deregulated the market for electricity. ECF 20, ¶ 2; ECF 21-1 at 10; see Md. Code , §§ 7-501 to 7-516 of the Public Utilities Article ("P.U.") (subtitle on "Electric Industry Restructuring").1 Before deregulation, local utilities sold and delivered electricity to consumers. See ECF 21-1 at 10. Deregulation enabled "[r]etail energy suppliers [to] sell directly to consumers, using the local utility's distribution system to deliver electricity." How it Works , MD ELECTRIC CHOICE , https://www.mdelectricchoice.com/how-it-worrks/ (last accessed December 13, 2020).2 As a result of deregulation, residential consumers may now elect to purchase electricity from a supplier other than their local utility. Id. However, suppliers must be licensed by the Commission. Electric Choice, Frequently Asked Questions , MARYLAND PUBLIC SERVICE COMMISSION , https://www.psc.state.md.us/electricchoice/frequently-asked-questions/ (last accessed December 13, 2020).
According to the Commission's website, if a consumer chooses an electricity supplier other than his/her local utility, the consumer "may be able to receive a single monthly bill from [her] utility that details the retail electricity supplier's charges separately." Id. The website also indicates that "[s]ome retail electricity suppliers have the ability to bill you separately." Id. But, the website does not specify which suppliers have the ability to do so. See id.
During the relevant period, Ms. Brito was a resident of Baltimore. ECF 20, ¶ 24. She alleges that Major, a New York corporation, sells electricity to consumers in Maryland, New York, Pennsylvania, New Jersey, Illinois, Massachusetts, Connecticut, Ohio and Washington, D.C., "through a network of both Major Energy's internal employees and external third-party vendors," which the Complaint refers to as "sales representatives." Id. ¶¶ 3, 7. According to plaintiff, Major's sales representatives are paid by commission and "use standardized marketing and training materials to carry out door-to-door and telephone solicitations, in-person solicitations at retail establishments, and direct mail and online advertisements in an effort to switch consumers to Major." Id. ¶ 4.
The core of the suit concerns how Major solicits and acquires new customers, and what it charges for electricity. Ms. Brito alleges, id. ¶ 1:
Major Energy obtains many of its customers without even gaining their actual agreement or authorization to switch to its electrical services, a practice known as "slamming." Second, it falsely promises lower electric bills compared to what consumers currently pay their electric provider but then places much higher charges on the bill, a practice known as "cramming."
Further, plaintiff alleges that in February 2017, a Major sales representative conducting a door-to-door marketing campaign arrived at her doorstep. Id. ¶ 25. The sales representative asked plaintiff Id. ¶ 26.3 The sales representative then "represented to Plaintiff that her electric bill would be lower each month if she switched to Major Energy." Id. ¶ 27.
Ms. Brito asserts that she "never signed any door-to-door sales agreement and never actually gave consent to switching her electricity provider." Id. ¶ 28. But, she adds: "After the Major Energy sale's [sic] representative left Plaintiff's residence, Major Energy switched Plaintiff's electric from Baltimore Gas & Electric to Major Energy." Id.
Plaintiff did not notice any changes in her electricity bill "for a period of many months." Id. ¶ 29. According to plaintiff, her bill "appeared substantially the same as before the switch and she did not notice the small, inconspicuous notation that Major Energy was now her designated provider." Id. Moreover, "her monthly charges were not immediately excessive." Id. However, she alleges: "At some point after the switch to Major Energy, Plaintiff's electric costs were significantly higher than what they were for Baltimore Gas & Electric for the same historical electrical usage that Plaintiff usually utilized." Id. ¶ 30.
According to Ms. Brito, her experience is part of Major's "fraudulent scheme," which affects consumers "everywhere that Major Energy offer its services." Id. ¶ 31. There are two main components to this scheme: "slamming" and "cramming." Id. ¶ 1. As to the former, plaintiff asserts, id. ¶ 5:
Major Energy's sales representatives always ask consumers to see their utility bills, often under false pretenses, and copy down the information. Frequently, the sales representatives simply switched many customer's [sic] without consent. Major Energy created a system that incentives [sic] document forgery and creates practical barriers for consumers to know that they have been slammed ....
Moreover, Major "does not have a workable policy or practice to ensure that an agreement to switch providers is authentic." Id. ¶ 18.
However, Ms. Brito adds that even where Major acquires new customers with consent, Major engages in unlawful cramming. Id. ¶¶ 5, 18. Plaintiff asserts, id. ¶ 18:
Upon information and belief, Major Energy ... trains ... "sales representatives" through substantively uniform selling scripts and other marketing materials to lure consumers to switch from their current electric company to Major Energy, with the false promise that they will receive lower competitive rates resulting in savings in their monthly bills.
According to plaintiff, Major's website is also implicated in its "deceptive marketing practices." Id. ¶ 21. The Amended Complaint includes two images allegedly taken from majorenergy.com. One image displays text that states: ...
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