Corsale v. Sperian Energy Corp.

412 F.Supp.3d 556

John CORSALE and David Taylor, individually and on behalf of all other similarly situated, Plaintiffs,

v.SPERIAN ENERGY CORPORATION, Defendant.

Civil Action No. 18-996

United States District Court, W.D. Pennsylvania.

Signed October 3, 2019

Jamie E. Weiss, Pro Hac Vice, Richard J. Burke, Pro Hac Vice, Zachary A. Jacobs, Pro Hac Vice, Quantum Legal LLC, Highland Park, IL, Jonathan Shub, Pro Hac Vice, Kevin Laukaitis, Pro Hac Vice, Kohn, Swift & Graf, P.C., Charles E. Schaffer, Daniel C. Levin, Pro Hac Vice, Levin Sedran & Berman, Philadelphia, PA, D. Aaron Rihn, Robert Peirce & Associates, P.C., Pittsburgh, PA, for Plaintiffs.

Charles A. Fitzpatrick, IV, Huaou Yan, Jason A. Snyderman, Christopher A. Lewis, Pro Hac Vice, Blank Rome LLP, Philadelphia, PA, for Defendant.

OPINION AND ORDER

Marilyn J. Horan, United States District Judge

Plaintiffs John Corsale and David Taylor, individually and on behalf of all others similarly situated, bring a putative class action against Defendant Sperian Energy Corporation under Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL), 73 P.S. § 201-1 et seq. (ECF No. 62). The Complaint was first filed by Plaintiff Corsale on May 24, 2018 in the Eastern District of Pennsylvania. (ECF No. 1). On August 21, 2018, Plaintiff Corsale, now joined by Plaintiff Taylor, filed an Amended Complaint with leave of court. (ECF No. 31). On September 25, 2018, Defendant Sperian Energy filed a Motion to Dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6). (ECF No. 36). Following briefing and oral argument, the Court granted the Motion, thereby dismissing the Amended Complaint, on April 10, 2019. (ECF No. 61). The Court, however, granted Plaintiffs leave to amend as to one part of Count II, in which Plaintiffs alleged a claim under the UTPCPL, but found that amendment as to Plaintiffs' other claims was futile. (ECF No. 61). On April 24, 2019, Plaintiffs filed a Second Amended Complaint containing the single count that is now before the Court. (ECF No. 62). Defendant Sperian Energy subsequently filed a Motion to Dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6) and a Motion to Strike the class allegations. (ECF No. 64). The parties have briefed the issues and the Motion is now ripe for decision.

For the following reasons, Defendant Sperian Energy's Motion to Dismiss will be granted, and the Motion to Strike will be moot.

I. Background

Plaintiffs provide a lengthy factual background, much of which is contained in this Court's previous Opinion. (ECF Nos. 61, 62). Relevant to Plaintiffs' single claim, however, are the following facts. In or around June 2015, Defendant Sperian Energy solicited Plaintiff John Corsale by mail, promising that Defendant Sperian Energy "would provide him a competitive rate if he switched" from his utility company to Defendant Sperian Energy. Id. at ¶ 64. Upon receiving the solicitation letter, Plaintiff Corsale called Defendant Sperian Energy to learn more, and Defendant Sperian Energy allegedly "reaffirmed its promises of a competitive rate if Plaintiff switched to its electricity plan." Id. Plaintiff Corsale switched from his existing utility company to Defendant Sperian Energy and thereafter received a welcome letter, dated June 30, 2015, along with a document detailing the terms and conditions of the agreement. (ECF No. 62-1; ECF No. 62, at ¶ 65). This initial document (hereinafter, "Initial Terms and Conditions") stated that the parties agreed Plaintiff Corsale was bound for a three-month term, during which time he would pay a fixed rate for electricity. (ECF No. 62-1, at 2). Additionally, the Initial Terms and Conditions explained that if Plaintiff Corsale chose to continue with Defendant Sperian Energy beyond the initial three-month term, the agreement would roll over to a month-to-month variable rate. (ECF No. 62, at ¶ 65; ECF No. 62-1, at 3). The Initial Terms and Conditions further explained the circumstances under which Defendant Sperian Energy could modify the fixed-rate term agreement and the variable-rate agreement. (ECF No. 62-1, at 3–4). Specifically, the Initial Terms and Conditions stated

This agreement does not renew automatically. At the end of the initial term, if you do not choose a new product, your term products will rollover into a month-to-month variable product. Sperian reserves the option to modify any term product in the event of a Material Adverse Change. A Material Adverse Change is defined as a market or regulatory event beyond Sperian's control, which would cause a material negative effect on Sperian being able to perform its obligations under this Agreement.... You will receive two written notices from us either as a bill message or in a separate email or direct mail that precedes either the expiration date of your Agreement or the effective date of any proposed changes in Terms. We will explain your options to you in these two advanced notifications.

If you have a variable product agreement with us, Sperian Energy may amend the terms of this Agreement at any time, consistent with any applicable law, rule or regulation, by providing notice to Customer of such amendment at least thirty (30) days prior to the effective date thereof. Sperian Energy will supply Customer with a current version of this document annually and upon request.

(ECF No. 62-1, at 3–4).

As to the variable-rate price structure that would take over once the initial three-month term ended, assuming that Plaintiff Corsale did not cancel his services with Defendant Sperian Energy, the Initial Terms and Conditions provided, in part,

The price for our Month to Month variable product will be calculated monthly and may change each month in response to market fluctuations based on several conditions including the wholesale electricity prices .... Sperian Energy's price may be higher or lower than the [Electric Distribution Company's] rate in any given month.

Id. at 4 (emphasis added). Additionally, the Initial Terms and Conditions provided that "No savings are guaranteed." Id.

Subsequently, in a letter dated August 18, 2015, Defendant Sperian Energy notified Plaintiff Corsale that the end of his initial three-month term was approaching, on or about October 3, 2015. (ECF No. 62-4, at 2; ECF No. 62, at ¶ 66). The letter also served as notification to Plaintiff Corsale that Defendant Sperian Energy had updated its terms and conditions. Id. Plaintiffs allege that the Updated Terms and Conditions gave Defendant Sperian Energy greater discretion in setting its variable rates than the Initial Terms and Conditions, in that the Updated Terms and Conditions removed "wholesale electricity prices" from the price structure and replaced it with discretionary language. (ECF No. 62, at ¶¶ 55, 59). The language at issue in the Updated Terms and Conditions stated,

If you select a variable product, the price will be calculated monthly and may change each month in response to market fluctuations and conditions at the discretion of Sperian Energy. Sperian Energy's price may be higher or lower than the EDC's rate in any given month.

(ECF No. 62-4, at 3) (emphasis added).

Then, in or around November 2015, Defendant Sperian Energy solicited Plaintiff David Taylor by telephone, allegedly promising "that Sperian would provide him with a competitive rate if he switched." (ECF No. 62, at ¶ 67). Plaintiff Taylor switched to Defendant Sperian Energy for electricity. Id. at ¶¶ 67–68. Defendant Sperian Energy sent Plaintiff Taylor a welcome letter, dated November 5, 2015, and a document detailing the terms and conditions of the parties' agreement, which were virtually identical to Plaintiff Corsale's welcome letter and Initial Terms and Conditions. (ECF No. 62-2; ECF No. 62, at ¶¶ 69–70). And, like Plaintiff Corsale, prior to the end of Plaintiff Taylor's initial three-month term, Plaintiff Taylor received a notification letter from Defendant Sperian Energy, dated December 29, 2015, informing Plaintiff Taylor that his three-month term would end on or about February 13, 2016, and that the terms and conditions had been updated. (ECF No. 62-3, at 3). The Updated Terms and Conditions received by Plaintiff Taylor in December 2015 were identical to the Updated Terms and Conditions that were sent to Plaintiff Corsale in August 2015. (ECF No. 62, at ¶ 85; ECF No. 36-3, at 4–6).

Neither Plaintiff Corsale nor Plaintiff Taylor cancelled his contract with Defendant Sperian Energy at the conclusion of the initial three-month term, and their contracts rolled over into month-to-month variable-rate plans. (ECF No. 62, at ¶¶ 65, 69). Plaintiffs' monthly bills included a comparison of the rate charged that month by Defendant Sperian Energy and the rate charged by Plaintiffs' prior utility companies. Id. at ¶ 108 n.12, ¶ 110 n.14. During the time that Plaintiff Corsale was under a month-to-month variable-rate plan, Defendant Sperian Energy charged Plaintiff Corsale at a rate that ranged from 13% to 102% greater than the rate Plaintiff Corsale would have paid had he stayed with his prior utility company, Met-Ed. Id. at ¶ 108. Similarly, Defendant Sperian Energy charged Plaintiff Taylor at a rate that ranged from 6% to 135% greater than the rate Plaintiff Taylor would have paid his prior utility company, West Penn Power. Id. at ¶ 110. Plaintiff Corsale cancelled his contract with Defendant Sperian Energy in April 2018, two and a half years, or approximately thirty billing periods, after his contract rolled over to a variable-rate plan. Id. at ¶ 107. Plaintiff Taylor likewise canceled his contract with Defendant Sperian Energy in May 2018, two years and three months, or approximately twenty-seven billing periods, after his contract rolled over to a variable-rate plan. Id. at ¶ 109.

Plaintiffs now bring their present Second Amended Complaint, alleging that Defendant Sperian Energy violated the UTPCPL by engaging in a bait-and-switch tactic that ultimately "caused thousands of ...