Second Circuit Affirms Summary Judgment in Energy Class Action

February 4, 2019

Case Studies

The United States Court of Appeals for the Second Circuit issued an opinion affirming the summary judgment dismissal of a class action alleging that MH’s client, Direct Energy, overcharged variable-rate electricity customers in Connecticut and Massachusetts. Though this lawsuit is one of many similar cases filed against retail energy suppliers in recent years, this decision is the first time a federal circuit court has opined on the merits of claims brought against retail energy suppliers in a published opinion.

The Second Circuit’s decision is a victory for Direct Energy, but also has broad implications for class actions brought against competitive energy retailers across the country. In particular, the opinion found that “[Q]uotidian pricing practices like Direct Energy’s . . . have long been mainstream across numerous sectors of American commerce.” And the Second Circuit declined the plaintiff’s invitation to impose restrictions on that deregulated market through novel legal theories, holding instead that “Connecticut chose to deregulate consumer electricity ratemaking, not transfer that authority from a public utility commission to the after-the-fact judgments of courts. . .” (emphasis in original).

The Second Circuit’s majority opinion is available here.

MH lawyers Matt Matthews, Bobby Debelak, Hutson Smelley, and James Chambers represented Direct Energy in the District Court and on appeal.