Todd v. XOOM Energy Md., LLC
| Decision Date | 31 March 2020 |
| Docket Number | Case No.: GJH-15-154 |
| Parties | MICHAEL TODD, et al., Plaintiffs, v. XOOM ENERGY MARYLAND, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
Plaintiffs Michael Todd, Jerome Bonicos, and Elizabeth Donnellon ("Plaintiffs") bring this statutory and common law consumer fraud action against Defendants XOOM Energy, LLC ("XOOM Energy" or "XOOM"), an electricity and natural gas supplier, its Maryland subsidiary XOOM Energy Maryland, LLC ("XOOM Maryland"), and ACN, Inc. ("ACN"), a marketing company that promotes XOOM's services to consumers. Pending before the Court are Defendants' Motion for Summary Judgment, ECF No. 122, and Defendants' Motion to Strike an exhibit to Plaintiffs' Opposition to the Motion for Summary Judgment, ECF No. 134. No hearing is necessary. See Loc. R. 105.6 (D. Md.). For the following reasons, the Motion for Summary Judgment will be granted in part and denied in part and the Motion to Strike will be granted in part and denied as moot in part.
Defendant XOOM Energy "is the parent company of a number of subsidiaries that supplyelectricity and/or natural gas products in several states and the District of Columbia." ECF No. 122-4 ¶ 4. XOOM operates in states that have deregulated their energy markets, which allows consumers to purchase energy from entities other than their local utility, although the utility maintains and operates the physical infrastructure that transports that energy to the consumer's location. See id. at 21.2 XOOM works with several companies that promote its energy services to potential customers, including defendant ACN. Id. ¶ 31. ACN, which is a trade name of the entity LKN Communications, Inc., maintains a subsidiary called ACN Opportunity, LLC, which "administers a program through which independent contractors known as Independent Business Owners ('IBOs') may promote or refer customers to various products and services." ECF No. 122-5 ¶¶ 2, 5. This includes the energy plans offered by XOOM Energy. Id. ¶ 10, 20-21.
ACN stresses that "IBOs are not employees of LKN Communications, ACN Opportunity, or any other company related to LKN Communications or ACN Opportunity." Id. ¶ 6. While IBOs are not paid a salary or hourly wage by LKN Communications or ACN Opportunity, they can "earn commissions and bonuses in connection with certain products and services" that they successfully promote, including XOOM's. Id. ¶ 8. ACN Opportunity pays these commissions and bonuses with funds provided by XOOM. ECF No. 122-4 ¶ 58. In order to become an IBO, a person or company must "enter into an IBO Agreement with ACN Opportunity" on a website. ECF No. 122-5 ¶ 11-12. To promote and receive commissions for XOOM services, XOOM requires IBOs to pass a XOOM accreditation test after reviewing XOOM training materials. Id. ¶ 23; ECF No. 122-4 ¶¶ 36, 45-48. Some of these training materials direct IBOs not to promote or promise savings to consumers who switch to XOOM for their energy unless such promises of savings are stated on XOOM's website. Id. ¶¶ 38-41, 60, 63; see also id. at 31, 34, 37. Trainingmaterials also state that "[c]ustomers must place their own orders" for XOOM's services on its website and "need[] to sign themselves up for service." Id. at 31-32; see also id. ¶¶ 42-43.
Plaintiffs in this case are New Jersey residents Jerome Bonicos and Michael Todd, (collectively, the "New Jersey Plaintiffs") and Maryland resident Elizabeth Donnellon. At their depositions, each Plaintiff testified that an IBO contacted them promising savings on their monthly energy bills if they switched to XOOM, but that after they were switched their rates instead increased. Plaintiff Bonicos testified that William Stracher, a longtime friend, came to Bonicos's house, said that he was working for XOOM Energy, and could "save [Bonicos] five or ten percent on [his] gas bill" as compared to his local utility. ECF No. 131-10 at 2; see also id. at 3-5, 11. Instead, however, Bonicos's rates significantly exceeded what he would have paid to his existing provider. Id. at 6-7, 9. Plaintiff Todd testified that a family member - either Lucille DelVecchio or Phil DelVecchio, both of whom were IBOs - called him and said that they "could save [him] significant money by switching over to . . . a third party provider for [his] energy services" and that he would experience "monthly savings." ECF No. 154-4 at 7, 22; see also id. at 5, 10, 12, 20, 23-24. The caller then asked him to provide a copy of his existing bill, which he did, after which his energy service was switched. Id. at 7-9. Instead of saving money, however, Todd's monthly bills were higher than they had ever been with his local utility. Id. at 14-15, 20.3
Finally, Plaintiff Donnellon testified that she was visited by her ex-husband's Mark's son, Blaine Donnellon, who said he was a representative of XOOM Energy and told her that she would save money on her electricity bills by switching to XOOM because her rates would belower. ECF No. 122-7 at 5-6; ECF No. 154-3 at 6-7, 9; see also id. at 3, 10, 11, 15, 16, 18, 20. Plaintiff Donnellon then gave Blaine a bill from her existing provider and allowed Blaine and Mark to use a computer at her house to switch her to XOOM. ECF No. 122-7 at 24-27. Although Donnellon experienced savings for one month, her bills increased beginning in the second month of XOOM service. ECF No. 154-3 at 12-13, 23. She eventually resorted to applying for a public energy assistance program to afford her electric bill. Id. at 26.
Plaintiff Todd and a plaintiff who has since left the case filed this action on January 16, 2015 again XOOM, ACN, XOOM Maryland, and XOOM's New Jersey affiliate. ECF No. 1. An Amended Complaint including the current parties was filed on March 25, 2015. ECF No. 33. The filing asserted claims under the Maryland Consumer Protection Act, the New Jersey Consumer Fraud Act, and the North Carolina Unfair & Deceptive Trade Practices Act, and common law claims of breach of contract, breach of the covenant of good faith and fair dealing, common law fraud, negligent misrepresentation, and unjust enrichment. Id. ¶¶ 37-108. Defendants filed a Motion to Dismiss the Amended Complaint on April 27, 2015. ECF No. 37. On February 22, 2016, the Court issued a Memorandum Opinion and an Order dismissing without prejudice all claims except Plaintiff Donnellon's breach of contract claim against XOOM Maryland and the New Jersey Plaintiffs' negligent misrepresentation claim against ACN. ECF No. 50 at 28-29; ECF No. 51. Plaintiffs filed a Second Amended Complaint on March 21, 2016 that realleged the same claims as the first except for the North Carolina statutory claim, breach of the covenant of good faith and fair dealing, and unjust enrichment. ECF No. 57 ¶¶ 51-101.
Defendants again moved to dismiss on April 20, 2016, ECF No. 59, and the Court granted the motion in part and denied it in part on February 16, 2017, ECF Nos. 67, 68. The Court dismissed the breach of contract claims against ACN and XOOM, as well as PlaintiffDonnellon's negligent misrepresentation claims against all Defendants and the New Jersey Plaintiffs' negligent misrepresentation claims against XOOM Maryland. ECF No. 68. All other claims proceeded. Id.; see also ECF No. 67 at 21. On June 28, 2019, Defendants moved for summary judgment on all claims. ECF No. 122. Plaintiffs filed their Opposition on July 19, 2019. ECF No. 131. On August 2, 2019, Defendants submitted a Reply, ECF No. 133, and a separate Motion to Strike an exhibit to Plaintiffs' Opposition, the declaration of Frank A. Felder, Ph.D., ECF No. 134. Plaintiffs filed an Opposition to the Motion to Strike on August 15, 2019, ECF No. 137, and Defendants submitted a Reply, ECF No. 144, on August 29, 2019.
The parties also litigated a Motion to Compel that Plaintiffs filed on June 20, 2019. ECF No. 119. The Court referred the Motion to Magistrate Judge Simms on August 16, 2019, ECF No. 138. Following a telephonic hearing on September 4, 2019, ECF No. 145, Judge Simms granted in part and denied in part the Motion, ordering Defendants to produce certain customer complaints that were received between January 1, 2014 and June 30, 2014 and any training materials for responding to such complaints. ECF No. 146. The Court then held a telephone conference on December 5, 2019, during which the Court granted Plaintiffs' request to file a supplemental brief in opposition to summary judgment in light of the newly produced materials as well as Defendants' request to supplement their Motion to Strike. On January 8, 2020, Plaintiffs filed their supplemental Opposition, ECF No. 164, and Defendants filed their supplement to the Motion to Strike, ECF No. 166. The parties filed responses to the supplements on January 31, 2020. ECF Nos. 168 (Plaintiffs' response), 171 (Defendants' response).
Also pending before the Court is Plaintiffs' Amended Motion for Class Certification and Appointment of Class Counsel. ECF No. 161. The Court will consider that Motion separately.
Summary judgment is proper if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing Fed. R. Civ. P. 56(c)); Francis v. Booz, Allen & Hamilton, Inc., 452 F.3d 299, 302 (4th Cir. 2006). A material fact is one "that might affect the outcome of the suit under the governing law." Spriggs v. Diamond Auto Glass, 242 F.3d 179, 183 (4th Cir. 2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A dispute of material fact is only "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248-49. However, the nonmoving party "cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another." Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985...
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