Brown v. Agway Energy Servs., LLC
328 F. Supp. 3d 464
| W.D. Pa. | 2018Background
- Plaintiff James Brown switched to Agway Energy Services (an electric generation supplier) in March 2016 under a two‑page Customer Contract (plus a Cover Letter) that provided an introductory rate for the first month and then a monthly variable rate "set each month at Agway's discretion" reflecting enumerated factors (energy, capacity, transmission, renewable compliance, taxes, "Agway's costs, expenses and margins," etc.).
- Plaintiff received two months of an introductory/teaser rate, then was billed month‑to‑month variable rates that he alleges were 20%–46% higher than his local utility; he canceled service in January 2017.
- Plaintiff sued individually and as a putative class, alleging Agway breached the contract by charging variable rates not actually based on market‑related factors but inflated for profit; unjust enrichment was withdrawn, leaving only breach of contract.
- Agway moved to dismiss under Rule 12(b)(6), arguing (1) the contract gives Agway discretion to set rates consistent with enumerated factors, (2) Plaintiff failed to satisfy UCC notice requirements, and (3) the voluntary payment doctrine bars recovery; Agway attached the Cover Letter and a slightly different contract version (Court treated documents as integral and considered the Cover Letter).
- The Court concluded Plaintiff’s bare comparison to the local utility (20%–46% higher) and conclusory allegations were insufficient to plausibly show Agway breached the contractual price formula (which allowed discretion and included non‑market cost components), dismissed the breach claim with prejudice, and found amendment futile. The Court did not reach the UCC‑notice or voluntary‑payment arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract — whether Agway's variable rates violated the contract's price‑structure promise | Agway promised rates based on "market‑related factors" and a "competitive" variable price; charging 20%–46% above the local utility plausibly shows rates were not market‑based | Contract expressly grants Agway discretion to set monthly variable rates and lists multiple cost components (including Agway's own costs, margins, and incentive programs); simple comparison to utility rates does not show noncompliance | Dismissed: Plaintiff's allegations are speculative and fail to plausibly show Agway did not follow the contractual formula (discretion + non‑market factors defeat the comparator theory) |
| Leave to amend / futility | Plaintiff requested leave to amend (in a footnote) but did not identify factual allegations he could add | Agway opposed; Court observed Plaintiff had an earlier opportunity to amend and offered no proposed new facts | Denied as futile: Court could not identify plausible additional facts Plaintiff could allege to cure the pleading defects |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility requirement for complaints)
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not entitled to affirmative assumption of truth)
- Bistrian v. Levi, 696 F.3d 352 (Third Circuit three‑step plausibility analysis)
- Kaymark v. Bank of Am., 783 F.3d 168 (elements of Pennsylvania breach of contract claim)
- Landau v. Viridian Energy PA LLC, 223 F. Supp. 3d 401 (E.D. Pa. decision recognizing an EGS duty to base rates on listed factors; used to contrast contracts that permit discretion)