Court Dismisses Suit Against Retail Supplier Which Had Alleged Prices Were Not Competitive As Promised

A federal court had dismissed a lawsuit, which had sought class action status, against Ambit Energy and various affiliates, after concluding that Ambit's actions were consistent with its contract with the complainant.

As first reported by EnergyChoiceMatters.com, the suit, one of the first of dozen similar suits filed against various retail suppliers in the wake of the polar vortex, alleged that Ambit, "falsely promis[ed] to charge competitive rates reflective of prevailing market conditions."

However, the United States District Court for the District Of New Jersey ruled that, "since the parties are governed by a written contract that explicitly allows Ambit to change the price of energy, [complainant's] allegations of misrepresentation and omission are undermined, and [complainant] fails to properly plead a CFA [Consumer Fraud Act] claim."

"Ambit's Terms of Service Agreement absolves Ambit from [complainant's] affirmative misrepresentation-based CFA claim because it explicitly grants Ambit the right to change the cost of energy, and it also absolves Ambit from [complainant's] omission-based CFA claim because it discloses Ambit's business practice of being a third-party supplier," the court stated

"The Terms of Service Agreement clearly conveys that '[i]f you selected a variable rate plan, your initial rate will be shown on your [Energy Facts Label] and thereafter rates are subject to change at the discretion of Ambit Energy,'" the court noted

"The contract does not mention savings or make guarantees of any kind," the court noted

"In addition, the Agreement contains an integration clause, which is written in clear language: 'This Agreement sets forth the entire agreement between the parties with respect to the terms and conditions of this transaction; any and all other agreements, understandings and representations by and between the parties with respect to the matters addressed herein are superseded by this Agreement,'" the court noted.

"Likewise, [complainant's] allegation that Ambit violated the CFA by omission is without merit because the Terms of Service Agreement sufficiently disclosed the relevant information concerning Ambit's business practices. Ambit's Terms of Agreement makes it clear exactly how Ambit's business operates," the court ruled.

"[I]f Ambit did increase its electric rates for a given month as alleged, then Ambit was exercising its explicit contractual right to change the rates at its own discretion. In addition, the variable-rate plan outlined in the Terms of Service Agreement, in contrast to the fixed-rate plan, clearly places the risk of rate fluctuation on the consumer. Particularly within the context of a fixed-rate option, it is clear [complainant] assumed the risk associated with Ambit's price-setting discretion," the court said.

Case 3:14-cv-05184