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, 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 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. The Court granted
preliminary approval on March 30, 2018. See Order,
ECF No. 126.
now move for final approval of the class action settlement.
See Pls. Mot. for Final Approval of Class Action
Settlement, ECF No. 130. They seek the following:
1. certification of the settlement class;
2. appointment of Plaintiffs as representatives of the class;
3. appointment of their lawyers as class counsel;
4. approval of the Class Action Settlement; and,
5. approval of their proposed attorneys' fees and
Id. at 1-2. The Court took the motion under
advisement at a final fairness hearing, held on August 1,
2018. See Min. Entry, ECF No. 132.
reviewing the Settlement Agreement, all the filings submitted
in connection with the motion, and the information presented
at the hearing, the motion is GRANTED.
FACTUAL AND PROCEDURAL BACKGROUND
settlement agreement seeks global resolution of several
different putative class actions, currently pending against
NAPG in this Court and elsewhere.
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.
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
convenant 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 Pls. Mot. Class Certification, 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
Report, 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 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 involves alleged violations of New
Jersey's Consumer Fraud Act, as well as contractual
claims. The Tully Action involves 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 other state law claims.
The Arcano action involves alleged violations of the
Rhode Island Unfair Trade Practices and Consumer Protection
Act, as well as contractual claims. The Tully and
Fritz 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. Id.
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 Supp. (“Pls. Preliminary Certification
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. In February
2017, they tried again, unsuccessfully, to mediate a
settlement. Id. Likewise, the Edwards
Action went 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.
parties stated that they “recognize and acknowledge the
benefits of settling these cases, ” id. ¶
1.5, 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. § IV.
agreement provides that NAPG customers who properly file a
claim will be given $0.00351 per kilowatt hour, if they are
variable rate customers receiving electric supply or $0.0195
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.
Preliminary Approval of the Settlement Agreement
the initial motion for preliminary approval, the Court held a
hearing on January 29, 2018. See Min. Entry, ECF No.
118. The Court requested supplemental briefing addressing
1. Does the Court have jurisdiction to approve a class action
settlement that addresses the state law claims of states
where the named representatives may lack standing to bring
2. If the Court possesses jurisdiction, can the named
representatives fairly and adequately protect the interests
of class members from other states and whose claims would be
subject to state laws different from that of the named
representatives? See Fed. R. Civ. P. 23(a)(4).
3. Do the statutory and contractual state law claims included
under the settlement "differ in a material manner that
precludes the predominance of common issues" under
Fed.R.Civ.P. 23(b)(3)? See In re U.S. Foodservice Inc.
Pricing Litigation, 729 F.3d 108, 127 (2d Cir. 2013).
See Order, ECF No. 119.
Court then granted preliminary approval on March 30, 2018.
See Ruling and Order, ECF No. 126. In response to
its initial questions, the Court found that
“preliminary certification is appropriate because
claims here would ‘focus predominantly [sic] on common
evidence' to determine whether NAPG was liable and rest
on breach of contract claims where there is not significant
variation.” Id. at 10 n.2 (quoting In re
U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108, 125
(2d Cir. 2013)). The Court held that, for the purposes of
preliminary approval, the class met the requirements of Rule
23(a) and (b)(3) of the Federal Rules of Civil Procedure.
Id. at 11-12. The Court appointed the named
plaintiffs as representatives of the settlement class and
their counsel as class counsel. Id. at 13.
Court granted preliminary approval of the Settlement
Agreement's terms, while noting that preliminary approval
required only at most “a determination that there is
what might be termed ‘probable cause' to submit the
proposal to class members and hold a full-scale hearing as to
its fairness, ” Id. at 13-14 (quoting
Menkes v. Stolt-Nielsen S.A., 270 F.R.D. 80, 101 (D.
Conn. 2010)). The Court held that the proposed settlement met
both the substantive and procedural requirements.
Court also approved the form and content of the notice to be
provided to the class, set a schedule for final approval and
the date of the final fairness hearing. Id. 16-18.
Finally, it also approved a claims administration plan and
procedure through which class members could opt-out.
Id. at 18.
Notice to the Class
parties engaged Heffler Claims Group (“Heffler”),
a third party, to administer notice of the settlement to the
class. See Decl. of Joseph F. Mahan (“Mahan
Decl.”), ECF No. 130-7. Heffler identified 491, 126
unique records from a list of 531, 847 class members provided
by the parties. Mahan Decl. ¶ 5. Heffler then mailed
postcards to the 491, 126 identified class members. The
postcard directed class members to the website or Heffler for
more information, and provided information on how to submit a
written request for exclusion. Id. ¶ 10. The
postcard also stated that exclusions, objections, and claim
forms must be post-marked or submitted by June 26, 2018.
Id. Additionally, Heffler conducted additional
research on any notices identified by the USPS as
undeliverable. Id. ¶ 13. Heffler then sent a
second, identical postcard to any updated addresses
April 3, 2018, Heffler also published the Settlement
Agreement, notice, claim forms, and other case documents to a
dedicated website available to the public at
www.electricityandgassettlement.com. The website
explained the litigation and the settlement, as well as the
on-line claim form submission process. Id. ¶ 9.
also set up a toll-free number, providing class members with
general information about the litigation, the settlement, and
the claim form process. Id. ¶ 7. Finally, under
the Class Action Fairness Act, 28 U.S.C. § 1711, et.
seq. (“CAFA”), the parties also sent a
letter, on January 26, 2018, to the United States Attorney
General and fifty-one states and territories. Id.
¶ 6. The notice provided a copy of the Complaint, notice
of a hearing, copies of the notice forms, the proposed
settlement, and the class definition. See 28 U.S.C.
§ 1715(b) (listing requirements).
The Final Claims
now move for approval of the class settlement. They summarize
the final results as of June 8, 2018. See Pls. Mem.
at 18. A total of 16, 890 claims have been submitted and the
average claimant will receive $50:
. Approximately 4, 700 will receive between
$2.00 and $9.99;
. Approximately 4, 500 will receive between
$10.00 and $29.99;
. Approximately 2, 900 will receive between
$30.00 and $49.99;
. Approximately 2, 400 class members will
receive over $100; and,
. Approximately 200 class members will
receive over $300. Id.
no claimant has objected, and only seventeen plaintiffs opted
out of the settlement. Status Report ¶ 2.
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 Assocs., 237 F.R.D.
345, 349 (E.D.N.Y. 2006); see also Denney v. Deutsche
Bank AG, 443 F.3d 253, 270 (2d Cir. 2006) (holding that
Rule 23(a) and (b) analysis is independent of Rule 23(e)
23(a) states four threshold requirements applicable to all
class actions: (1) numerosity (a ‘class [so large] that
joinder of all members is impracticable'); (2)
commonality (‘questions of law or fact common to the
class'); (3) typicality (named parties' claims or
defenses ‘are typical ... of the class'); and (4)
adequacy of representation (representatives ‘will
fairly and adequately protect the interests of the
class').” Amchem Prods., Inc. v. Windsor,
521 U.S. 591, 613 (1997) (quoting Fed.R.Civ.P. 23(a)).
“In addition to satisfying Rule 23(a)'s
prerequisites, parties seeking class certification must show
that the action is maintainable under Rule 23(b)(1), (2), or
(3).” Id. at 614.
requirements apply equally to “conditional
certification of a class for settlement purposes.”
Cohen v. J.P. Morgan Chase & Co., 262 F.R.D.
153, 157 (E.D.N.Y. 2009); see also Reade-Alvarez v.
Eltman, Eltman & Cooper, P.C., 237 F.R.D. 26, 31
(E.D.N.Y. 2006) (“Certification of a class for
settlement purposes only is permissible and appropriate,
provided these [Rule 23(a) and (b) ] standards are
met.”). The settlement-only class certification inquiry
requires this Court to “demand undiluted, even
heightened, attention in the settlement context” to
Rule 23's “specifications . . . designed to protect
absentees by blocking unwarranted or overbroad class
definitions.” Amchem Prods., Inc., 521 U.S. at
now move for final approval of the settlement agreement and
seek the following: (1) the certification of the class for
settlement purposes; (2) the approval of the settlement as
procedurally and substantively fair, reasonable and adequate;
(3) the appointment of the named Plaintiffs as
representatives of the class and their counsel as class
counsel; (4) the ...