United States District Court, D. Connecticut
RULING AND ORDER
R. Underhill United States District Judge
10, 2015, the plaintiffs, Susana and Boris Mirkin, filed a
putative class action against the defendant, Viridian Energy,
Inc., alleging violations of N.Y. G.B.L. §§
349-d(7), 349-d(3), and 349, and unjust enrichment, and
asserting that they represented a class that met the
requirements of the Class Action Fairness Act, 28 U.S.C.
§§ 1332, et seq. (doc. 1) The Mirkins
filed a First-Amended Complaint ("FAC") on December
18, 2015 (doc. 47), replacing the unjust enrichment claim
with claims for breach of contract and of the implied
covenant of good faith and fair dealing. On January 8, 2016,
Viridian filed the instant motion to dismiss. (doc. 48) I
held a hearing on Viridian's motion on April 19, 2016.
following reasons, I now grant the motion to dismiss the
section 349-d(7) claim (Count One) because the disclosures
were adequate. I grant the motion to dismiss the implied
covenant claim (Count Five) because the parties appear to
agree that it is subsumed under the breach of contract claim
under New York law. I deny the motion to dismiss the section
349 and 349-d(3) claims (Counts Two and Three), which are
largely identical, because the plaintiffs have alleged
sufficiently specific and quantifiable misstatements, and
have further alleged that those misstatements caused them to
pay more money on electricity than they otherwise would have
done. Finally, I deny the motion to dismiss the breach of
contract claim (Count Four), because the plaintiffs have
adequately alleged that Viridian either did not set variable
rates in the manner to which it agreed, or exercised the
discretion to do so in bad faith.
Standard of Review
Motion to Dismiss for Failure to State a Claim Upon Which
Relief May Be Granted
motion to dismiss for failure to state a claim pursuant to
Rule 12(b)(6) is designed "merely to assess the legal
feasibility of a complaint, not to assay the weight of
evidence which might be offered in support thereof."
Ryder Energy Distribution Corp. v. Merrill Lynch
Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984)
(quoting Geisler v. Petrocelli, 616 F.2d 636, 639
(2d Cir. 1980)).
deciding a motion to dismiss pursuant to Rule 12(b)(6), the
court must accept the material facts alleged in the complaint
as true, draw all reasonable inferences in favor of the
plaintiffs, and decide whether it is plausible that
plaintiffs have a valid claim for relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678-79 (2009); Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555-56 (2007); Leeds v.
Meltz, 85 F.3d 51, 53 (2d Cir. 1996).
Twombly, "[f]actual allegations must be enough
to raise a right to relief above the speculative level,
" and assert a cause of action with enough heft to show
entitlement to relief and "enough facts to state a claim
to relief that is plausible on its face." 550 U.S. at
555, 570; see also Iqbal, 556 U.S. at 679
("While legal conclusions can provide the framework of a
complaint, they must be supported by factual
allegations."). The plausibility standard set forth in
Twombly and Iqbal obligates the plaintiff
to "provide the grounds of his entitlement to
relief" through more than "labels and conclusions,
and a formulaic recitation of the elements of a cause of
action." Twombly, 550 U.S. at 555 (quotation
marks omitted). Plausibility at the pleading stage is
nonetheless distinct from probability, and "a
well-pleaded complaint may proceed even if it strikes a savvy
judge that actual proof of [the claims] is improbable, and .
. . recovery is very remote and unlikely." Id.
at 556 (quotation marks omitted).
following facts are alleged in the First-Amended Complaint:
Viridian Energy, Inc. ("Viridian") is an Energy
Service Company ("ESCO"), and a participant in the
market that arose following the deregulation of New
York's residential gas and electricity markets. FAC at
¶¶ 1, 4, 5. Relevant to this action, Viridian
markets itself as providing "green" energy at
"competitive" prices. Id. at ¶ 5.
Viridian is incorporated under Nevada law and has its
principal place of business in Stamford, Connecticut.
Id. at ¶¶ 18, 31.
and Boris Mirkin are married and reside in Brooklyn, New
York. Id. at ¶ 17. In the fall of 2013, one of
Viridian's direct-marketing associates showed the Mirkins
standardized Viridian marketing materials including a
brochure about Viridian's commitment to sustainability,
id. at ¶ 39, Ex. 3, and a brochure entitled
"Affordable Green Energy, " id. at ¶
39, Ex. 4. The Sustainability Brochure does not make
any direct references to Viridian's rate plans, but does
describe the company's "mission" as follows:
"Viridian was built on the idea that customers should
never have to choose between affordability and
sustainability." Id. at Ex. 3. The
"Affordable Green Energy" Brochure also does not
directly lay out Viridian's rates. It states that
Viridian provides green energy at "competitive prices,
" and that "[i]n fact, the average Everyday Green
customer saves money on energy costs over time."
Id. at Ex. 4. In smaller font on the back of the
brochure, following a list of Viridian's licensing
numbers, it also states: "Viridian may offer two rate
plans: variable rates which are subject to change based on
market conditions and fixed rates which are fixed for an
agreed upon number of billing cycles. Current rates should
not be construed as a guarantee of future rates or
savings." Id. The Viridian associate, using
those materials, "convinced the Mirkins that
Viridian's green energy was less expensive than
conventional energy and was competitively-priced."
Id. at ¶ 38. As a result, Susana Mirkin signed
up with Viridian for the couple's joint energy
October 16, 2013,  Viridian mailed Ms. Mirkin the
aforementioned Sustainability Brochure, a "Welcome
Letter, " Id. at ¶ 40, Ex. 2, and a copy
of its Terms and Conditions, Id. at ¶ 40, Ex.
8. The main body of the Welcome Letter states that once
Viridian service begins, Ms. Mirkin will be "doing your
part to do something better for the environment while saving
money on your energy costs at the same time."
Id. at Ex. 2. In slightly smaller text in a box on
the side of the page, the letter also states that Ms. Mirkin
had enrolled in a "6-Month Fixed Rate plan" for
8.99 cents per kilowatt hour during that period with a
"$50 Early Termination Fee." Id. The
letter goes on to state that "[a]t the end of your term,
your service will continue on a month-to-month basis on a
variable rate." Id.
Terms and Conditions document ("T&C"), which
consists of three pages of relatively small font, makes the
following relevant statements:
• The T&C and welcome letter "supersede any
oral or written statements made in connection with the
Agreement or the Service."
• For customers with a fixed-term plan, it states in
four locations that at the end of the fixed number of billing
cycles set out in the welcome letter and/or any other Renewal
term to which the parties agree, "the Agreement will
continue with respect to such Service month-to-month with a
variable rate" until the Agreement is terminated by
• The variable rate under Viridian's "Everyday
Green" plan, in which Ms. Mirkin apparently enrolled, is
described as follows: "Your price may fluctuate from
month-to-month based on wholesale market conditions
applicable to the LDU's [Local Distribution Utility]
service territory. The variable price for Electric Service
each month will be calculated by multiplying the variable
price of electricity per kilowatt hour (kWh) that month by
the amount of electricity you use in the billing cycle plus
any applicable fees, charges or taxes."
• "Viridian's prices may be higher or lower
than the LDU's rate in any given month."
• "This Agreement offers no guaranteed
• In two locations, the T&C provides a rescission
clause, stating: "You have the right to cancel the
Agreement, without fees or penalties of any kind, within
three (3) business days of receiving the Agreement."
Mirkin apparently did not cancel the agreement following
receipt of those documents. She received six months of
Viridian service at the fixed-term rate of 8.99 cents per
kilowatt hour. Id. at ¶ 41. For the billing
period from June 11, 2014 through July 10, 2014, Viridian
charged Ms. Mirkin 15.4889 cents per kilowatt hour.
Id. at ¶ 42. For the billing periods ending in
August and September 2014, Viridian charged Ms. Mirkin 16.49
cents per kilowatt hour. Id. Ms. Mirkin then
apparently terminated her Agreement with Viridian. See
Id. at ¶ 43. During that three-month period, Ms.
Mirkin paid $60.28 more than she would have paid based on her
local utility's rate. Id. at ¶ 43. The
Mirkins also allege that Viridian's rates increased or
stayed the same even when the average wholesale market price
for the region decreased. Id. at ¶
Apparently as a result of that discrepancy, the plaintiffs
allege that Viridian's variable-rate plan is not based on
"wholesale market conditions." Id. at
plaintiffs seek certification of the class of similarly
situated Viridian customers in New York, monetary relief
under N.Y. G.B.L. §§ 349-d and 349, compensatory
and punitive damages, and an injunction prohibiting Viridian
from continuing the allegedly deceptive marketing practices
described in the complaint.