Landau v. Viridian Energy PA LLC
223 F. Supp. 3d 401
| E.D. Pa. | 2016Background
- Pennsylvania opened retail electricity markets to ESCOs; Landau enrolled with Viridian under a Welcome Letter (marketing language) and Terms & Conditions (T&C) that were expressly incorporated into a single Agreement.
- The Agreement provided a six-month fixed rate of $0.0799/kWh, after which customers who took no action were placed on a Variable Price plan with disclaimers that prices “may fluctuate each month based on wholesale market conditions” and “may be higher or lower than the DC’s rate in any given month.”
- After conversion to the Variable Price plan, Landau’s rate roughly doubled and remained substantially above PECO’s rates for ~15 months; Landau then canceled service and sued for breach of contract, UTPCPL violations, declaratory relief, unjust enrichment (alternative), and breach of the covenant of good faith and fair dealing.
- Viridian moved to dismiss under Rule 12(b)(6) (invoking the economic loss doctrine among other defenses) and separately moved to strike class allegations; Landau seeks class certification under Rule 23(b)(2) and (b)(3).
- The court treated all well-pleaded facts as true for the Rule 12(b)(6) motion and analyzed contract language (including the incorporated Welcome Letter) together in interpreting parties’ intent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract (variable pricing) | Viridian failed to base variable rates on wholesale market conditions and charged exorbitantly compared to PECO | T&C disclaims any obligation to match wholesale or PECO rates and permits higher-than-DC pricing | Denied dismissal: incorporation of Welcome Letter (promises of "affordable" and "saving money") plausibly supports breach claim despite disclaimers; claim survives pleading stage |
| Breach of covenant of good faith and fair dealing | Separate cause of action for bad-faith pricing conduct | No independent cause of action beyond contract remedies | Granted: claim is subsumed in breach of contract and dismissed |
| Unjust enrichment (alternative) | Pleaded in the alternative if contract unenforceable | Parties acknowledge valid contract; unjust enrichment unavailable where contract exists | Granted: dismissed because enforceable contract exists |
| UTPCPL claim; economic loss doctrine | Marketing and Associate statements deceived Landau into enrolling and caused ascertainable loss; seeks damages and injunctive relief | Economic loss doctrine bars statutory fraud/UTPCPL claims; puffery and failure-to-plead fraud with particularity; regulatory compliance defense; no standing for injunctive relief | Partial denial: economic loss doctrine not applied here (court follows Pennsylvania intermediate appellate authority); marketing puffery online dismissed but Associates’ specific promises are actionable; deception claim pleaded under catch-all (no Rule 9(b) requirement); injunctive relief dismissed for lack of standing |
| Declaratory relief & class allegations | Seeks declaration about pricing obligations and seeks class certification (including (b)(2) based on declaratory relief) | DJA claim duplicative of contract claim; class allegations premature and should be struck | DJA claim survives (court declines to dismiss to preserve potential (b)(2) class); motion to strike class allegations denied as premature pending discovery |
Key Cases Cited
- Ware v. Rodale Press, Inc., 322 F.3d 218 (3d Cir.) (breach of contract elements)
- Werwinski v. Ford Motor Co., 286 F.3d 661 (3d Cir.) (predictive panel decision applying economic loss doctrine to statutory fraud claims)
- Knight v. Springfield Hyundai, 81 A.3d 940 (Pa. Super. Ct.) (economic loss doctrine inapplicable to non-negligence UTPCPL claims)
- McNair v. Synapse Group, Inc., 672 F.3d 213 (3d Cir.) (standing to seek injunctive relief requires likelihood of future injury)
- Lesko v. Frankford Hosp.-Bucks Cty., 15 A.3d 337 (Pa.) (contract interpretation principle: intent is the writing and provisions construed together)
- Summy v. State Farm Mut. Auto. Ins. Co., 234 F.3d 131 (3d Cir.) (discretion to dismiss declaratory claims to avoid duplicative litigation)
- Castrol Inc. v. Pennzoil Co., 987 F.2d 939 (3d Cir.) (definition of puffery vs. actionable misrepresentations)