Judge OKs $14M Energy Plus Class Action Settlement

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Judge OKs $14M Energy Plus Class Action Settlement

By Anne Bucher

A New York federal judge on Tuesday granted final approval to a $14.3 million class settlement resolving allegations that Energy Plus Holdings LLC deceived customers into signing contracts by luring them with promises of rewards.

The Energy Plus class action settlement was first reached in February 2013 and preliminarily approved in March. However, several state attorneys general filed an amicus brief objecting to the settlement, arguing that the attorneys’ fees were exorbitant and that the agreement did not adequately compensate Class Members.

In his September 17 ruling, Judge Pauley approved the deal as final, overruling concerns that Class Members would not receive enough money once attorneys’ fees were paid. Judge Pauley said awarding attorneys’ fees of $3.3 million was equal to about 25 percent of the total payout, and would be in line with similar settlements.

“Class counsel and counsel in the other Energy Plus lawsuits have devoted more than 2,600 hours to litigating the action and achieving the settlement,” Judge Pauley wrote in his decision to approve the Energy Plus class action settlement. “The court finds that the award of attorneys’ fees, costs and expenses is reasonable when viewed as percentage of the common fund.”

The Energy Plus class action lawsuit was originally filed by New York resident Angela Wise, who was a customer of Energy Plus until July 2011. She sought to represent tens of thousands of New York residents who had decided to switch to Energy Plus based on promises of travel rewards or cash back bonuses. Her class action lawsuit was filed in New York federal court in October 2011. In an amended complaint filed in January 2012, Gideon Romm was added as a lead plaintiff.

According to the class action lawsuit, Energy Plus released advertisements that touted the value of its rewards program. The company also promised to charge competitive, market-based rates for electricity. The plaintiffs claim that this deceptive advertising was made possible when the electricity industry was deregulated by the New York Public Service Commission in 1996. This deregulation was supposed to promote competition and provide consumers with more choices. However, under the deregulation plan, Energy Plus did not have to inform state regulators of its rates or the methods it uses to calculate them.

The plaintiffs accused Energy Plus of charging two to three times the amount charged by other local utilities. Because of this higher cost associated with the service, the rewards programs do not actually provide customers with any monetary benefits. According to the class action lawsuit, Energy Plus keeps its rates secret from its customers and state regulators. Wise alleges that Energy Plus charged her 22.49 cents per kilowatt hour of energy, while its competitor Consolidated Edison charged its customers only 12.07 cents per kilowatt hour of energy in June.

The deadline to file a claim for the Energy Plus Holdings Class Action Lawsuit Settlement has passed. If you missed out, sign up for our free weekly e-newsletter below to receive class action lawsuit and settlement updates. You can also see which class action settlements are still accepting claims in our Open Class Action Lawsuits section.

The plaintiffs were represented by D. Greg Blankinship and Todd S. Garber of Meiselman Packman Nealon Scialabba & Baker PC.

The case is Angela Wise, et al. v. Energy Plus Holdings LLC, Case No. 1:11-cv-07345, in the U.S. District Court for the Southern District of New York.

All class action and lawsuit news updates are listed in the Lawsuit News section of Top Class Actions