Mirkin v. XOOM Energy, LLC
931 F.3d 173
| 2d Cir. | 2019Background
- Plaintiffs Susanna and Boris Mirkin (the Mirkins) sued XOOM Energy, LLC and XOOM Energy New York, LLC for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment based on XOOM’s variable residential electricity rates.
- The customer Agreement promised rates “based on XOOM’s actual and estimated supply costs,” but plaintiffs alleged XOOM’s post-teaser variable rates substantially exceeded market wholesale supply costs.
- Plaintiffs calculated a Market Supply Cost using publicly available NYISO data and an expert; their Complaint included a table showing significant percentage deviations between XOOM’s rates and the Market Supply Cost (and Con Edison’s rates).
- The District Court dismissed the Complaint under Rule 12(b)(6), holding the contract’s reference to XOOM’s internal “actual or estimated supply costs” made rate-setting an internal, nonjusticiable activity and plaintiffs could not plead breach without XOOM’s internal data.
- Plaintiffs moved post-judgment under Rules 59(e) and 60(b) for leave to file a proposed amended complaint (PAC) adding detailed NYISO-based allegations; the District Court denied leave as futile.
- The Second Circuit reversed in part, holding the Complaint and PAC plausibly alleged breach of contract and that the District Court erred in denying leave to amend; it affirmed dismissal of the implied-covenant and unjust-enrichment claims (not challenged on appeal).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Complaint plausibly alleges breach of the Agreement that rates be based on XOOM’s actual or estimated supply costs | Mirkins: public NYISO data and expert calculations show XOOM’s rates materially exceeded market supply costs, implying XOOM did not base rates on supply costs | XOOM: contract ties rate-setting to internal actual/estimated costs; customers cannot verify internal cost calculations so complaint is speculative | Held: Complaint and PAC plausibly allege breach; district court erred in dismissing under Rule 12(b)(6) |
| Whether plaintiffs’ reliance on publicly available NYISO data suffices at pleading stage | Mirkins: NYISO data is objective, regulated, and commonly reflects wholesale supply cost; expert analysis supports plausibility | XOOM: plaintiffs cannot prove internal procurement details; their calculations are speculative or fabricated | Held: Reliance on NYISO data and expert calculations is sufficient at pleading stage; no basis to deem calculations fabricated |
| Whether leave to amend should be denied as futile when proposed amendments add NYISO-based and other factual allegations | Mirkins: PAC adds that wholesale cost is >90% of supply cost, XOOM is NYISO market participant, detailed variables and comparisons to Con Edison; these cure the district court’s concerns | XOOM: Post-judgment amendment is untimely and still speculative about XOOM’s internal costs | Held: District court abused discretion; PAC would not be futile and should have been permitted under Rules 59(e)/60(b) |
| Whether prior Second Circuit precedent (Richards v. Direct Energy) compels dismissal here | Mirkins: Richards is distinguishable because that contract granted discretion without linking rates to supply costs | XOOM: argues Richards supports dismissal of similar procurement-based breach claims | Held: Richards is distinguishable; contract language here expressly tied rates to supply costs, so Richards does not control |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading)
- Erickson v. Pardus, 551 U.S. 89 (complaint need only give fair notice of claim)
- Scutti Enters., LLC v. Park Place Entm't Corp., 322 F.3d 211 (de novo review of Rule 12(b)(6) dismissal)
- Williams v. Citigroup Inc., 659 F.3d 208 (post-judgment motions to amend should respect liberal amendment policy)
- Foman v. Davis, 371 U.S. 178 (standards favoring amendment of pleadings)
- Mirkin v. XOOM Energy, LLC, 342 F. Supp. 3d 320 (E.D.N.Y.) (district court opinion dismissing complaint)
- Richards v. Direct Energy Servs., LLC, 915 F.3d 88 (2d Cir.) (distinguished on contract language grounds)