United States District Court, D. Connecticut
PAUL EDWARDS, GERRY WENDROVSKY, SANDRA DESROSIERS, and LINDA SOFFRON, on behalf of themselves and all others similarly situated, Plaintiffs,
NORTH AMERICAN POWER & GAS, LLC, Defendants.
RULING AND ORDER
A. BOLDEN UNITED STATES DISTRICT JUDGE.
Edwards, on behalf of himself and all persons similarly
situated (collectively “Plaintiffs”), filed the
initial Class Action Complaint in this case on November 18,
2014. This case is one of several class actions pending in
this District and throughout the country, alleging that North
American Power & Gas, LLC (“NAPG” or
“Defendant”) falsely advertised low rates in
order to induce customers into switching their energy
provider. Plaintiffs claim that NAPG expressly breached its
contracts with class members, as well as the covenant of good
faith and fair dealing, by allegedly advertising its variable
rates would fluctuate with the market but failing to do so.
See Second Am. Compl. ¶¶ 65-76, ECF No.
63. Additionally, several of the plaintiffs allege violations
of the Connecticut Unfair Trade Practices Act (CUTPA) on
behalf of a putative sub-class.
settlement discussions between the parties in this action and
those pending elsewhere, the parties have reached a
settlement under which they intend to resolve five cases
involving NAPG's alleged misrepresentations. See
generally Class Action Settlement Agreement
(“Settlement Agreement”), ECF No. 116-1. The
proposed settlement would involve the claims of class members
in eleven states for breach of contract and alleged violation
of state consumer protection laws. After notifying the Court
of the proposed settlement, Plaintiffs moved for preliminary
approval on January 16, 2018. ECF No. 114.
motion seeks the following: (1) preliminary certification of
a class under 23(b)(3) for settlement purposes; (2)
preliminary approval of the Settlement; (3) authorization to
disseminate the proposed Class Notice to members of the
Settlement Class; and (4) a date and time for the Final
reviewing the Settlement Agreement, all the filings submitted
in connection with the motion, the information presented at
the hearing, the Motion is GRANTED. The
Court FINDS, CONCLUDES, AND ORDERS as
FACTUAL AND PROCEDURAL BACKGROUND
The Edwards Action
Edwards filed the initial Complaint in this lawsuit on
November 18, 2014, as the sole named plaintiff. See
Compl., ECF No. 1. He sought to bring the lawsuit
“on behalf of himself and all class of all similarly
situated customers . . . in Connecticut, Rhode Island, New
Hampshire, and Maine, arising out of [NAPG's] unfair,
deceptive, unconscionable and bad faith billing . . .
.” Id. ¶ 2.
moved to dismiss the complaint. The Court granted the motion
in part. See Ruling on Motion to Dismiss, ECF No.
39. The Court found that Mr. Edwards lacked standing to bring
claims under Maine's Unfair Trade Practices Act, New
Hampshire's Consumer Protection Act, and Rhode
Island's Unfair Trade Practice and Consumer Protection
Act. Id. at 2. The Court denied the motion to
dismiss as to the CUTPA claims and the breach of the covenant
of good faith and fair dealing. Id. The dismissal of
the other claims was without prejudice, and Edwards
subsequently moved to amend the complaint.
current operative complaint, the Second Amended Complaint,
was filed on June 3, 2016. See Second Am. Compl.
(“SAC”), ECF No. 63. The Second Amended Complaint
was filed on behalf of Edwards (a Connecticut citizen), Gerry
Wendrovsky (a citizen of New York who owns property in
Connecticut), Sandra Desrosiers and Linda Soffron (both
citizens of New Hampshire). SAC ¶¶ 8-12. They
allege that North American Power was an electric supplier,
purchasing power on the wholesale market and selling it to
consumers. Id. ¶ 21. They allege that NAPG
charged a low promotional rate, fixed for several months,
which then changed to a variable rate following the end of
the introductory period. Id. ¶ 24. NAPG
allegedly represented that the variable rate following the
introductory rate would be based on the wholesale market
rate, id. ¶ 25; instead, Plaintiffs claim, NAPG
“increase[ed] the rates charged to class members when
wholesale prices rose” and kept rates “at a level
as much as double, triple or
quadruple the wholesale market rates when the
wholesale prices fell.” Id. ¶ 31
(emphasis in original).
argue that this pricing scheme represents a breach of the
contracts signed between themselves and NAPG, id.
¶¶ 65-68, as well as a breach of the implied
convenient of good faith and fair dealings. Id.
¶¶ 69-76. They allege these violations on behalf of
a class of those similarly situated in Connecticut and New
Hampshire. Id. ¶ 54. Additionally, the
plaintiffs seek to certify a subclass of NAPG's
Connecticut customers, alleging violations of the Connecticut
Unfair Trade Practices Act (CUTPA). Id. ¶¶
began, and Plaintiffs moved for class certification on May
24, 2017. See Pl. Mot. Class Cert., ECF No. 82.
Before the Court could rule on the motion, however, both NAPG
and the Plaintiffs moved to stay the proceedings.
See Def. Mot. to Stay, ECF No. 98. The motion stated
that “the Parties have agreed to a global
mediation” to attempt to resolve several similar
matters pending against NAPG, including the Edwards
matter. Id. at 1. The Court granted a stay. Order,
ECF No. 99.
October 31, 2017, the parties informed the Court they were
unable to reach a settlement. See Joint Status Rep.,
ECF No. 102. The Court lifted the stay, Order, ECF No. 103,
and NAPG moved for summary judgment. See Def. Mot.
Summ. J., ECF No. 105.
Edwards action is not the only case currently
pending that involves NAPG's alleged misconduct. Three
similar lawsuits are currently pending in the District of
Connecticut. Arcano v. North American Power &
Gas, LLC, No. 3:16-cv-1921-WWE (D. Conn. filed October
31, 2016) (“Arcano Action”); Tully v. North
American Power & Gas, LLC, No. 15-cv-00469-WWE (D.
Conn. filed March 31, 2015) (“Tully Action”);
Fritz v. North American Power & Gas, LLC, No.
3:14-cv-0634-WWE (D. Conn. filed May 6, 2014) (“Fritz
Action”). In addition, another case is currently
pending in the Northern District of Illinois, Zahn v.
North American Power & Gas, LLC, No. 14-cv-8370
(N.D. Ill., filed October 24, 2014) (“Zahn
Action”) and the Southern District of New York.
Claridge v. North American Power & Gas, LLC,
15-cv-1261 (PKC) (S.D.N.Y. filed February 20, 2015)
Fritz Action pertained to alleged violations of New
Jersey's Consumer Fraud Act, as well as contractual
claims. The Tully Action pertained to alleged violations of
the Rhode Island Deceptive Trade Practices Act, the New
Jersey Consumer Fraud Act, the Maryland Consumer Protection
Act, the Connecticut Unfair Trade Practices Act, the Maine
Unfair Trade Practices Act, the New Hampshire Consumer
Protection Act, the Georgia Fair Business Practices Act, the
Ohio Consumer Sales Practices Act, the Pennsylvania Unfair
Trade Practices and Consumer Protection Law, and the Texas
Deceptive Trade Practices Act, among state law claims. The
Arcano action alleged violations of the Rhode Island Unfair
Trade Practices and Consumer Protection Act, as well as
contractual claims. The Tully and Fitz cases were
consolidated on June 23, 2015. The Arcano case was originally
consolidated on June 20, 2016. The court formally severed the
Arcano case from the other two, but stayed it on request of
the parties pending the resolution of the Tully and Fritz
actions. The court then stayed the consolidated Tully and
Fritz actions pending settlement negotiations, and then
administratively closed the cases.
Claridge Action, filed on behalf of New York consumers,
alleged violations of New York's deceptive trade
practices law. See Claridge v. N. Am. Power &
Gas, LLC, No. 15-cv-1261 (PKC), 2016 WL
7009062, at *1 (S.D.N.Y. Nov. 30, 2016). On November 30, the
court in Claridge certified a class of “all
New York North American Power & Gas, LLC customers who
paid North American Power & Gas, LLC's variable
rate” on or after February 20, 2012. Id. The
parties in Claridge also sought the court's
preliminary approval of a settlement that would resolve all
the pending NAPG actions and certify a nation-wide class of
NAPG customers. The court rejected that proposal, but
approved a later settlement agreement pertaining to New York
customers. See Order, Claridge v. N. Am. Power
& Gas, LLC, No. 15-cv-1261 (PKC), ECF No.
139 (S.D.N.Y. March 13, 2018).
Zahn Action appears to assert causes of action on
behalf of Illinois consumers. Pls. Mem. at 6. The district
court initially granted NAPG's motion to dismiss, but on
appeal the Seventh Circuit chose to certify a question to the
Illinois Supreme Court and requested that the court determine
if the Illinois Commerce Commission (“ICC”) would
have exclusive jurisdiction over the claim. Id. The
Illinois Supreme Court held that the ICC did not have
exclusive jurisdiction and the Seventh Circuit then reversed
the district court decision. The Zahn Action is currently
stayed pending approval of the settlement at issue here.
December 20, 2017, the parties informed the Court at a
telephonic status conference that they had reached a
preliminary agreement to settle the case. See Order,
ECF No. 113. Plaintiffs then moved for preliminary settlement
approval. See Pls. Mot. for Prelim. Approval, ECF
their filing, Plaintiffs noted that the parties began
discussing settlement of the Fritz Action in 2015.
Pls. Mem in Support (Pls. Mem.) at 7, ECF No. 115. The
parties attempted mediation in December 2015 and, again in
February 2016, but neither resulted in a settlement.
Id. They tried again, unsuccessfully, to mediate
settlement in February 2017. Id. Likewise, the
Edwards Action attempted to mediation a month later
and the parties also were unsuccessful. Id.
27, 2017, the parties appeared to reach a settlement for the
Fritz and Claridge cases, and sought
preliminary approval in the Southern District of New York,
where Claridge was then pending. Id. at 8.
Edwards counsel opposed; the Court ultimately denied
the motion for preliminary approval. Id. Finally,
the parties in all actions agreed to mediate jointly and,
after two mediation sessions, entered into a settlement on
January 16, 2018. Id. See also Class Action
Settlement Agreement (“Settlement Agreement”),
ECF No. 116-1.
settlement seeks to resolve five separate cases: Edwards
v. North American Power & Gas, No. 3:14-cv-01724 (D.
Conn. filed November 18, 2014); Arcaro v. North American
Power & Gas, LLC, No. 3:16-cv01921-WWE (D. Conn.
filed October 31, 2016); Tully v. North American Power
& Gas, LLC, No. 15-cv-00469-WWE (D. Conn. filed
March 31, 2015); Fritz v. North American Power & Gas,
LLC, No. 3:14-cv-0634-WWE (D. Conn. filed May 6, 2014);
and Zahn v. North American Power & Gas, LLC, No.
14-cv-8370 (N.D. Ill., filed February 20, 2015). See
Settlement Agreement § I. The parties stated that they
“recognize and acknowledge the benefits of settling
these cases” and defined the class as “all
Persons who were NAPG Variable Rate Customers during the
Class Period in Connecticut, Illinois, Maryland, Maine, New
Hampshire, New Jersey, Ohio, Pennsylvania, Rhode Island,
Georgia or Texas.” Settlement Agreement ¶ 2.11.
The class period is defined as between February 20, 2012
through June 5, 2017. Id. ¶ 2.13. The
settlement agreement sets out a series of procedures for its
approval, and noted that, while a class should be certified
for settlement purposes, Defendants would reserve the right
to challenge class certification if the Court denied
preliminary approval of the agreement. Id. §
agreement provides that NAPG customers who properly file a
claim will be given $.00351 per kilowatt hour if they are
variable rate customers receiving electric supply or $.0195
per therm if they receive natural gas supply, with a minimum
benefit of $2.00. Id. ¶ 5.1. The total benefit,
however, “payable by NAPG shall be subject to a $16,
053, 000 cap. In the event that the value of the Benefits
claimed exceeds $16, 053, 000, the Benefit payable to each
NAPG Variable Rate Customer will be reduced pro rata
based on the individual's electric supply and/or natural
gas supply use while on a variable rate plan.”
Id. Named plaintiffs would receive up to $5, 000 as
class representatives, and attorney's fees would be
capped at $3, 699, 000. Id. ¶ 7.5.
also agreed to release claims, defined as:
any and all claims, demands, rights, damages, obligations,
suits, debts, liens, contracts, agreements, judgments,
expenses, costs, liabilities, and causes of action of every
nature and description, including claims for attorneys'
fees, expenses and costs, whether known or unknown, suspected
or unsuspected, existing now or arising in the future that
(a) is or are based on any act, omission, inadequacy,
misstatement, representation, harm, matter, cause or event
whatsoever that has occurred at any time from the beginning
of time up to and including the end of the Class Period and
(b) arise from or are related in any way to this lawsuit or
Id. ¶ 2.34.
STANDARD OF REVIEW
23(e) requires that “[t]he claims, issues, or defenses
of a certified class may be settled, voluntarily dismissed,
or compromised only with the court's approval.”
Fed.R.Civ.P. 23(e). Thus, “[b]efore reaching the merits
of the proposed settlement, ” this Court “must
first ensure that the settlement class, as defined by the
parties, is certifiable under the standards of Rule 23(a) and
(b).” Bourlas v. Davis Law Associates, 237
F.R.D. 345, 349 (E.D.N.Y. 2006); see also Denney v.