Energy Plus Consumer Fraud Class Action – $11 Million Settlement

Case Name: Yu, et al. v. Energy Plus Holdings, LLC

Case Type: Public Interest Litigation

Filed in: U.S. District Court for the District of New Jersey

Docket: [Case No.: 2:12-CV-02627]

In May 2012, Sanford Heisler Sharp McKnight filed a class action lawsuit against Energy Plus Holdings LLC and Energy Plus Natural Gas LP (“Energy Plus”) on behalf of thousands of customers who were allegedly victimized by the energy company’s illegal bait-and-switch scheme to defraud consumers out of millions of dollars.

The Complaint sought compensatory damages and treble damages for violations of the New Jersey Consumer Fraud Act, breach of the covenant of good faith and fair dealing, and unjust enrichment.

The Complaint alleged that Pennsylvania-based Energy Plus—taking advantage of the de-regulation of the energy supply markets in New Jersey meant to provide greater consumer choice—promised customers competitive market rates and savings on their energy bills if they switched from their local utilities or other energy suppliers to Energy Plus. Within one or two billing cycles, however, according to the Complaint, Energy Plus raised customers’ rates well above the market, by as much as 150% or more.

Class Representative Yue Yu, a resident of Kearny, N.J., allegedly was billed at a rate 70% above market over a six-month period. The proposed class had two subclasses: New Jersey customers of Energy Plus Holdings LLC who switched to the company for electricity services, and New Jersey customers who used Energy Plus Natural Gas LP as their natural gas supplier.

In 2013, the parties reached an $11 million settlement in the case.