A New Jersey federal judge dismissed a proposed class action suit against Ambit Energy Holdings on July 22. The litigants had claimed that the Dallas-based electricity and natural gas retail energy provider had hiked up customers’ rates after luring them into switching energy providers with promises of lower prices. However, the court ruled that Ambit’s practices were clearly stated in its terms of service.
According to coverage of the case (Urbino v. Ambit Energy LP et al) on the blog, Law 360, US District Judge Michael Shipp found that plaintiff Michael Urbino’s contract with Ambit “expressly allowed the company to change its rates,” stipulated it was a third-party energy provider; and superseded any previous agreements or understandings between the parties – including Urbino’s claims that he was guaranteed energy savings that were not delivered.
Of the total seven counts against Ambit, two — a state Consumer Fraud Act violation and unjust enrichment — were dismissed by Judge Shipp with prejudice; while another accusing Ambit of a breach of implied good faith and fair dealing was deferred, to be amended before August 21.
The four other counts were brought by a second plaintiff, who voluntarily dismissed himself from the case after Ambit filed its dismissal motion, so the judge did not address those counts in his findings.
“You’ve got a contract that provides for variable rates on electricity, and the contract expressly says that Ambit retains the discretion to adjust the rates, and that’s exactly what happened,” Ambit’s lawyer Steve Rasch of Thompson & Knight LLP told Law360.
In the claim of “breach of implied good faith and fair dealing” that could continue the case if it is amended by August 21, Urbino had alleged that Ambit acted in bad faith by changing customers’ energy rates after promising savings, but the judge said that Urbino had not proven the company’s intention outside of simply seeking profit. Therefore, if the claim is not amended by the deadline, it, too, will be dismissed with prejudice.