Posted May 2nd, 2012.
Plaintiff Asserts Company Defrauds and Deceives Customers With Savings Promises,Then “Jacks Up” Electricity and Natural Gas Prices to Above Market Rates
(May 2, 2012, Newark, NJ) –Sanford Wittels & Heisler LLP (SWH) today filed a class action complaint in U.S. District Court in New Jersey against Energy Plus Holdings LLC and Energy Plus Natural Gas LP (Energy Plus) for perpetrating an illegal bait-and-switch scheme that has deceived and defrauded thousands of New Jersey consumers of millions of dollars.
“Energy Plus promises customers competitive market-based rates and savings on their energy bills if they switch their accounts from other energy suppliers,” said Mr. Wittels, a founding partner with the firm. “In fact, any savings that occur are short-lived and effectively wiped out within one or two billing cycles as Energy Plus jacks up its promised rate, often by as much as 150%. Customers can end up paying two or three times more for electricity or natural gas than they did before switching their accounts to Energy Plus. Instead of getting the promised benefit, these customers incur a tremendous loss, to the tune of hundred or thousands of dollars every year. Such business practices are not only illegal, they are unconscionable.”
SWH represents Kearny, NJ resident Yue Yu and a class of similarly situated New Jersey Energy Plus customers. The class consists of thousands of New Jersey residents and businesses whom the Pennsylvania-based company deceives in New Jersey. Mr. Wittels added that Energy Plus is believed to engage in the same underhanded tactics in the other states where the company does business, including Connecticut, Illinois, Maryland, Massachusetts, New York, Ohio, Pennsylvania, and Texas.
Ms. Yu was enticed by Energy Plus’ deceptive claims to switch her electricity and natural gas service to the company in September. Between November and April, she incurred more than $200 in overcharges for her energy supplies, billed at a rate about 70% above the market rates over the 6-month period. When she discovered the magnitude of the difference between the rates promised by Energy Plus and the rates she was actually billed, Ms. Yu switched her service back to PSE&G.
According to the complaint, Energy Plus takes advantage of the deregulation of energy in New Jersey by adopting fraudulent and deceptive business tactics. “The company misleads customers to believe that by switching to Energy Plus they will save money compared to receiving energy services from their local public utilities,” said co-lead counsel Jeremy Heisler. “The company also represents that its rates are tied to market factors and are competitive, when in fact, they are not. It’s a classic consumer fraud and scam.”
The complaint asserts that Energy Plus’ rates are “completely divorced from prevailing market conditions” and usually “skyrocket” within 60 days of customers’ switching their accounts.
Ms. Yu says these corporations exploit customers by making ambiguous representations and agreements that create an expectation of savings that never materialize. “The company never discloses that its regular rates are nearly always substantially higher than its competitors and exorbitant when compared to the energy supply market,” said co-counsel Grant Morris.
The complaint describes in detail how Ms. Yu and all members of the class suffered economic injury because they routinely paid substantially more for Energy Plus services compared to the cost of energy from their previous supplies.
The proposed class has two subclasses. The first subclass comprises New Jersey customers of Energy Plus Holdings LLC who switched to the company for electricity services; the second comprises New Jersey customers who used Energy Plus Natural Gas LP as their natural gas supplier. Ms. Yu’s claims are typical of the claims of the class.
“All class members have been injured by Energy Plus’ imposition of unreasonably high, undisclosed energy supply rates that were not commensurate with the New Jersey market,” said Andrew Melzer, a senior litigation counsel at the firm. “The harm suffered by class members is identical to the harm suffered by Ms. Yu as a result its unfair and unlawful practices.”
The complaint alleges that both Energy Plus companies violated the New Jersey Consumer Fraud Act, breached the covenant of good faith and fair dealing integral to all contractual agreements, and received unjust enrichment by taking money that belongs to Ms. Yu and the class members.
The complaint asks for a class action declaration; an award of compensatory damages to Ms. Yue and class members; treble damages, as allowable under state law; an order enjoining Energy Plus from continuing to implement its deceptive, illegal and unlawful trade practices and schemes; pre- and post-judgment interest on damages awarded.
A jury trial is demanded.
About Sanford Wittels & Heisler, LLP
Sanford Wittels & Heisler LLP, a law firm with offices in Washington, DC, New York, and San Francisco, specializes in employment discrimination, wage and hour, qui tam and consumer actions and complex corporate class action litigation. The firm has represented thousands of individuals in major class action cases in the United States. In addition, the firm also represents individual clients in employment, employment discrimination, sexual harassment, whistleblower, public accommodations, commercial, medical malpractice, and personal injury matters. In May 2010, the firm won the largest jury award in the U.S. in a gender discrimination employment class action when a jury returned a verdict of $253 million in compensatory and punitive damages against Novartis Pharmaceuticals Corporation. On January 25, 2012, SWH won preliminary court approval to settle a wage and hour case on behalf of sales reps employed by Novartis Pharmaceuticals for $99 million. For more information, contact Sanford Wittels & Heisler at 646-791-4848.