Last week, a class action lawsuit alleging that Ambit Energy Holdings LLC unfairly hiked up its rates was dismissed by a New Jersey judge who ruled that Ambit had disclosed its rates in its terms of service.
Lead plaintiff Michael Urbino alleged in his class action lawsuit that that the Texas energy company used deceptive marketing ploys currently permitted by deregulated retail electricity markets in New Jersey and other states to offer customers “life-changing rewards,” “free travel, cruises and getaways,” and “free energy” to get them to switch energy suppliers. However, the rewards allegedly turn out to be worth much less than the savings and benefits Ambit promised.
Last week, U.S. District Judge Michael A. Shipp dismissed most of the class action lawsuit’s claims. The judge determined that the plaintiff’s contract with Ambit expressly allowed the company to change its rates, as well as disclosing that the company is a third-party energy provider, and supersedes any previous agreements or understandings between the customer and company.
Judge Shipp dismissed the Ambit Energy class action lawsuit’s state Consumer Fraud Act claims and claim for unjust enrichment with prejudice, meaning the plaintiff cannot amend the class action lawsuit to bring those claims again. The judge is allowing the plaintiff to amend his complaint regarding the actions for breach of implied good faith and fair dealing. The amended complaint must be filed before Aug. 21.
Four other claims were brought by another plaintiff, who left the class action lawsuit after Ambit filed its dismissal motion.
According to a representative for Ambit, Judge Shipp correctly enforced the terms of the contract. “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,” said Ambit’s representative. “The customer, of course, has the right to cancel the contract on 30 days’ notice, so the customer is not bound for any long period of time.”
According to the judge’s order, the plaintiff failed to establish how his loss in energy savings was caused by Ambit’s allegedly illegal behavior. Judge Shipp also pointed out that the plaintiff’s alleged savings were not included in Ambit’s terms of Service. For the same reason, the class action claim for unjust enrichment was dismissed by the judge, stating “[the plaintiff’s] unjust enrichment claim must be dismissed because a valid and unrescinded contract governed the parties’ relationship.”
“Indeed,” points out the judge in his order, “[the plaintiff] never contests the validity of the contract governing the parties’ relationship.”
Similar class action lawsuits have been filed against Ambit, including in New York and Pennsylvania. Ambit has generally managed to prevail in these cases as well.
Urbino is represented by Jonathan Minkove and Lawrence J. Friscia of Friscia & Associates LLC, and Charles J. LaDuca, Bonnie Prober and Michael J. Flannery of Cuneo Gilbert & LaDuca LLP.
The Ambit Energy Deceptive Marketing Class Action Lawsuit is Urbino v. Ambit Energy LP, et al., Case No. 3:14-cv-05184, in the U.S. District Court for the District of New Jersey.
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3 thoughts onJudge Dismisses Class Action Lawsuit Against Ambit Energy
Well said Adam. Customers also have their own web site to “manage” their own account, renew rates and even can refer the service to their friends/family. It’s become the “norm” to want to blame others but the reality is, I use the service because I am in control. I can choose the lowest rate or to terminate without fees if I feel the savings is not present but then I’d be returning to a service where I have no say, no control, no input. I’d much rather be in the know than be ignorant but one could say, the ignorance part is what initiated the Law Suit to begin with. Ignorance should never a reason any company is at fault when they offer the info upfront, honest and in writing… just read it.
Renewal Notices in WRITING are sent to every Ambit customer 90, 60 and 30 days prior to the Plan expiration. Now, also via email if correct email address is provided….
Customers need to understand that the savings are guaranteed over 12 months period versus the incumbent (where GSP Plan is implemented) but prior the term expiration the plan needs to renewed otherwise they will be paying current variable rate… Setting up an alert in a phone or physical calendar might help prevent this from happening if someone chooses ignore the notices in writing.. Ambit Energy was also the very first company which never had any cancellation or early termination fees (except of Texas with different system where there is no more “incumbent” or “default” company to revert to).
“Never Let Good Enough be Good Enough” is another motto the company and it’s marketing force is striving to live by. Ambit energy is today the largest Direct Seller energy in the world and this would not happen with large and growing number of satisfied customers.
The AMBIT Team is instructed by the Co-Founders, Jere Thompson and Chris Chambliss to : NEVER SACRIFICE INTEGRITY FOR GROWTH!