SunRun Deceptive Marketing Class Action Moves Forward

SunRun Deceptive Marketing Class Action Moves Forward

By Anne Bucher

A California judge has refused to dismiss a putative class action lawsuit accusing SunRun Inc. of making misleading claims about the cost-effectiveness of their solar panels.

On June 20, 2013, Los Angeles County Superior Court Judge John Shepard Wiley Jr. ruled that plaintiff Shawn Reed had made an adequate claim that he relied on SunRun’s misstatements when he purchased solar panels from the company. He alleges that had he known that SunRun had made misleading claims, he never would have purchased the solar panels.

Reed initially filed the SunRun deceptive marketing class action lawsuit in January 2013.

In his class action lawsuit, Reed accused SunRun of making misleading claims about rising electricity costs in order to promote their solar panels. San Francisco-based SunRun finances and leases solar panels. The company has customers in 10 states.

While SunRun argued that Reed was not injured by their marketing, Judge Wiley acknowledged that Reed suffered an injury.

Reed accused SunRun of developing a marketing campaign that promised that consumers who installed the SunRun Solar System would experience savings on their energy bills, a statement which Reed claims is “inherently unknowable.” In his class action lawsuit, he indicated that media outlets such as CNN and The Economist had cited the rise of shale gas exploration as a factor that helped to lower the cost of electricity.

SunRun’s website indicated that there had been a national increase of approximately 6 percent per year for the last 30 years. However, according to graphs from Southern California Edison and Pacific Gas & Electric Co. showed that California’s rates plateaued and dipped after 2008.

“Whether the cost disadvantage is experienced or not, the promise of a system sure to result in cost advantage was false when made and likely to deceive consumers into leasing a system they would not otherwise have,” Reed argued in his class action lawsuit.

According to the class action lawsuit, SunRun only obtained its license to lease and install solar panels on residential homes in February 2012. However, the company had been installing the panels since 2007.

Reed is seeking a refund on customer fees from contracts that were entered into prior to February 2012. In his class action lawsuit, he claims that the company’s agents claim that SunRun customers can terminate their contracts if they move. However, the contract is confusing in this regard. In one section of the SunRun contract, the company claims that it will remove the solar panels at the end of the agreement without charge. Another section of the contract indicates that some customers may be faced with a termination fee.

At the hearing, Judge Wiley urged both sides to attempt to settle the dispute. A recent Supreme Court decision has made it easier for corporations to use arbitration to avoid certain class action lawsuits.

The SunRun Deceptive Marketing Class Action Lawsuit case is Reed v. SunRun Inc., Case No. BC498002, in the Superior Court of the State of California, County of Los Angeles.

Reed is represented by Steve W. Berman, Elaine Byszewski and Craig R. Spiegel of Hagens Berman Sobol Shapiro LLP.

Updated June 29th, 2013

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