United States District Court, S.D. New York
OPINION AND ORDER
Vincent L. Briccetti United States District Judge
Robert Hamlen brings this putative class action against
Gateway Energy Services Corporation claiming violations of
the New Jersey Consumer Fraud Act (“NJCFA”), N.J.
Stat. Ann. § 56:8-1 (West); breach of contract; breach
of the implied covenant of good faith and fair dealing; and
unjust enrichment, alleging defendants used deceptive pricing
practices to charge thousands of New Jersey customers higher
rates for natural gas.
pending is defendant's motion to dismiss. (Doc. #14).
reasons set forth below, the motion to dismiss is GRANTED IN
PART and DENIED IN PART.
Court has subject matter jurisdiction pursuant to 28 U.S.C.
deciding the pending motion, the Court accepts as true all
well-pleaded allegations in the complaint and draws all
reasonable inferences in plaintiff's favor.
is a New Jersey citizen who purchased natural gas from
defendant from November 2010 to January 2016. Defendant is a
New York corporation that sells retail electricity and
natural gas to commercial and residential consumers in New
Jersey, among other areas.
September 2010, plaintiff was a customer of New Jersey
Natural Gas (“NJNG”), a different retailer, when
he spoke with defendant's representative via telephone.
The representative recited defendant's standard sales
pitch for its variable-rate natural gas plan, stating
“your price of . . . natural gas will be a variable
rate set by Gateway Energy based on market conditions and
will fluctuate monthly.” (Compl. ¶ 15). Subsequent
to this conversation, defendant provided plaintiff with the
are three contract clauses relevant to this case. First, the
“Variable-Rate Plan” clause provides:
The price for all electricity or natural gas sold under our
Variable-Rate Plan is a rate set by us each month based on
our evaluation of a number of factors that affect the total
price of electricity or natural gas to a customer. The
following description is not exhaustive of all factors that
may influence our pricing decision each month, but it does
describe the major components that influence our analysis in
a typical month. Each month our management uses the
information described below, along with numerous other
considerations, to determine how low a price we can charge in
the upcoming month.
• We determine the cost of all electricity or natural
gas (including, where applicable, transmission costs, storage
costs, transportation costs and line losses) that we have
already obtained for delivery to customers in your utility
territory for the upcoming month. Because we often acquire
supply over time in preparation for future delivery needs (in
an effort to mitigate the volatility in price) and do not
acquire all of our required electricity or natural gas from
the spot market, our supply costs may not directly follow
spot market prices.
• If additional supplies of electricity or natural gas
will be required for the upcoming month, we will determine
the anticipated cost to acquire such additional supplies from
the spot market.
• If we expect to have surplus supply for the upcoming
month, we evaluate the expected income we may receive from
selling the surplus. Additionally, with electricity, we may
expect to have surplus or shortfall in any given hour of the
upcoming month. In this case, we evaluate the expected income
or costs that may be incurred by eliminating the surplus or
• We evaluate, if known, the prices that your utility
and other competitors in your area plan to charge in the
• We evaluate the amount of profit we hope to earn from
the sale of electricity or natural gas in your utility
• We evaluate any taxes that must be included in the
rate we charge for electricity or natural gas in your
• From time to time, and as a direct result of sudden or
drastic increases in price, we may experience a higher level
of cost to supply our customers than we wish to bill our
customers in a single period. In these circumstances, we may