Edwards v. N. Am. Power & Gas, LLC

• Decision Date: 04 August 2015
• Docket Number: Case No. 3:14–cv–1714 (VAB).
• Citation: 120 F.Supp.3d 132
• Parties: Paul T. EDWARDS, Plaintiff, v. NORTH AMERICAN POWER AND GAS, LLC, Defendant.
• Court: U.S. District Court — District of Connecticut

120 F.Supp.3d 132

Paul T. EDWARDS, Plaintiff,

v.NORTH AMERICAN POWER AND GAS, LLC, Defendant.

Case No. 3:14–cv–1714 (VAB).

United States District Court, D. Connecticut.

Signed Aug. 4, 2015.

Robert A. Izard, Jr., Nicole Anne Veno, Izard Nobel, LLP, West Hartford, CT, Seth R. Klein, Izard Nobel PC, Hartford, CT, for Plaintiff.

Greil Roberts, William E. Murray, Gordon & Rees LLP, Glastonbury, CT, for Defendant.

RULING ON DEFENDANT'S MOTION TO DISMISS

VICTOR A. BOLDEN, District Judge.

Plaintiff, Paul T. Edwards, filed this Complaint against Defendant, North American Power and Gas LLC ("NAPG"), asserting claims that arise out of NAPG's business of supplying electricity to residential customers. Compl. ¶¶ 2–3, ECF No. 1. Mr. Edwards alleges that NAPG attracted new customers by promising low rates on electricity tied to the wholesale market rate and subsequently charged exorbitant prices, not reasonably related to the market rate. Id. ¶¶ 2–6. He claims that, in doing so, NAPG engaged in unfair and deceptive trade practices, in violation of the unfair trade practices laws of Connecticut, Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen.Stat. § 42–110a et seq., Maine, Maine Unfair Trade Practices Act ("UTPA"), Me.Rev.Stat. Ann. tit. 5, § 205–A et seq., New Hampshire, the New Hampshire Consumer Protection Act, N.H.Rev.Stat. Ann. § 358–A:1 et seq., and Rhode Island, the Rhode Island Unfair Trade Practice and Consumer Protection Act, R.I. Gen. Laws § 6–13.1–1 et seq. Compl. ¶ 52, ECF No. 1. He also makes claims of unjust enrichment and breach of the covenant of good faith and fair dealing. Id. ¶ 5561, 63–68.

NAPG seeks to dismiss the entire case with prejudice under Federal Rule of Civil Procedure 12(b)(6). Mot. To Dismiss, ECF No. 17. For the reasons that follow, the Court DENIES the motion with respect to the CUTPA and breach of the covenant of good faith and fair dealing claims. The Court GRANTS the motion without prejudice with respect to the claims under Maine's UTPA, the New Hampshire Consumer Protection Act, and the Rhode Island Unfair Trade Practice and Consumer Protection Act as well as the unjust enrichment claim.

I. FACTUAL ALLEGATIONS

Mr. Edwards alleges that, in the late 1990s and early 2000s, "many states" deregulated their electricity supply markets. Compl. ¶ 13, ECF No. 1. Before deregulation, large, regulated public utilities allegedly administered both electricity generation and distribution.Id. According to the Complaint, after deregulation the public entities continued to distribute power through transmission lines, but the business of power generation and supply was opened to competition. Id. ¶¶ 13–15. Mr. Edwards claims that the electricity market now consists of three groups of companies: (1) those that generate or create electricity, (2) those that distribute it via transmission lines, and (3) those that supply it, or sell it to retail customers. Id. ¶ 15.

In this deregulated market, Mr. Edwards alleges that several companies, like NAPG, operate as "middlemen," purchasing power from generation companies and selling that electricity to end users at a "mark-up" on either fixed or variable rate terms. Id. ¶¶ 17–20. The prices these "middlemen" charge, including NAPG, are not regulated by the states of Connecticut, Rhode Island, Maine or New Hampshire. Id. ¶ 18. These companies also allegedly do not actually distribute the electricity they sell, which remains the role of the large public utilities, nor do they generate power, provide customer bills, or otherwise maintain infrastructure for the electricity business. Id. ¶¶ 17, 32. Because of their limited role, Mr. Edwards claims that these so-called "middlemen" companies like NAPG charge "exorbitant premiums without adding any value to the consumer whatsoever." Id. ¶ 32.

Mr. Edwards claims that NAPG lured customers with a "teaser" rate, which was charged for a "set number of months." Id. ¶¶ 3, 21. When the "teaser" rate expired, customers were automatically "rolled" into a variable-rate plan. Id. Mr. Edwards alleges that NAPG markets its variable-rate plan to consumers as being "correlated with the underlying wholesale market rate." Id. ¶¶ 23–26. In particular, he quotes portions of NAPG's instructions to its sales representatives that explain the plan as "subject to change with market pricing, which means when market prices go down, so does the variable rate" and that consumers "will be paying a month-to-month, market-based variable rate that can fluctuate from time to time." Id. ¶¶ 23–24. Consistent with these marketing materials, Mr. Edwards also claims that NAPG's Terms of Service provided that "[t]he variable rate may increase or decrease to reflect the changes in the wholesale power market." Id. ¶ 25.

In Mr. Edwards's view, "a reasonable consumer" would interpret NAPG's marketing representations and Terms of Service to mean that the NAPG's variable plan's rates would rise and fall with the wholesale market rates. Id. ¶ 26. He claims that NAPG's variable-rate plan, in reality, did the opposite, resulting in artificially high electricity prices that did not decrease when wholesale prices fell. Id. ¶¶ 27–28, 31. He also includes a chart in his Complaint that shows the NAPG rate increased when the "average wholesale" rate decreased and that NAPG charged a substantial margin above the average wholesale rate from October 2013 to October 2014. Id. ¶ 28.

Mr. Edwards alleges that he resides in Connecticut and subscribed to NAPG's variable-rate plan around August 2013. Id. ¶¶ 8, 33. He alleges that he suffered "monetary damages" as a result of NAPG's pricing. Id. ¶ 35. In filing this lawsuit, Mr. Edwards also has indicated that he will seek to certify a class that as of the date of the Complaint consists of "[a]ll persons enrolled in a [NAPG] variable rate electric plan in connection with a property located within Connecticut, Rhode Island, New Hampshire and Maine." Id. ¶ 36.

II. STANDARD

To survive a motion to dismiss under Rule 12(b)(6), a plaintiff must state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted). A claim is facially plausible if "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In other words, to state a plausible claim, a plaintiff's complaint must have "enough fact to raise a reasonable expectation that discovery will reveal evidence" supporting the claim. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Although "detailed factual allegations" are not required, a complaint must offer more than "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or "naked assertion[s]" devoid of "further factual enhancement." Id. at 555, 557, 127 S.Ct. 1955.

"The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). "[A] claim should only be dismissed at the pleading stage where the allegations are so general, and the alternative explanations so compelling, that the claim no longer appears plausible."

Arar v. Ashcroft, 585 F.3d 559, 617 (2d Cir.2009) (citing Fed.R.Civ.P. 8(a) ; Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ).

In determining whether the plaintiff has met this standard, the Court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the plaintiff. In re NYSE Specialists Sec. Litig., 503 F.3d 89, 95 (2d Cir.2007) ; Newman & Schwartz v. Asplundh Tree Expert Co., Inc., 102 F.3d 660, 662 (2d Cir.1996) (citations omitted). In considering a motion to dismiss, "a district court must limit itself to facts stated in the complaint or in documents attached to the complaint as exhibits or incorporated in the complaint by reference." Newman & Schwartz, 102 F.3d at 662 (citation and internal quotation marks omitted).

III. DISCUSSION

Mr. Edwards alleges claims under the unfair trade practice statutes of several states, breach of the covenant of good faith and fair dealing, and unjust enrichment. NAPG's Motion to Dismiss challenges the sufficiency of all of these claims under Rule 12(b)(6) and asks that the lawsuit be dismissed in its entirety with prejudice. Mot. To Dismiss 1, ECF No. 17–1; Fed.R.Civ.P. 12(b)(6). The Court will address each claim in turn.

A. COUNT ONE (UNFAIR TRADE PRACTICES STATUTES)

Mr. Edwards alleges claims under the unfair trade practices statutes of Connecticut, Rhode Island, New Hampshire, and Maine. NAPG raises two arguments in its Motion to Dismiss with respect to these claims. First, it argues that Mr. Edwards, as a resident of Connecticut only, lacks standing to assert claims under the other states' statutes. Mot. To Dismiss 5–8, ECF No. 17–1. Second, NAPG argues that Mr. Edwards has failed to state a CUTPA claim because he has not alleged an unfair trade practice or deceptive act. Id. at 8–12.

i. STANDING

NAPG argues that because Mr. Edwards has only purchased electricity from NAPG in Connecticut, he only has standing to bring claims under CUTPA, and not under any of the other states' unfair trade practices statutes included in the Complaint. Id. at 6–7. Mr. Edwards responds that the question of standing cannot be considered now and should be considered at the class certification stage. Opp Br. 20, ECF No. 24. For the reasons that follow, the Court agrees with NAPG and grants its Motion to Dismiss on the claims under the Maine, New Hampshire, and Rhode Island unfair trade practices statutes.

Article III, Section 2 of the U.S. Constitution limits the jurisdiction of the federal courts to the resolution of cases and controversies. Mahon v. Ticor Title Ins. Co., 683 F.3d 59, 62 (2d Cir.2012) (citation omitted). "In order to ensure that this ‘...