Todd et al v. ACN, Inc. et al, No. 8:2015cv00154 - Document 67 (D. Md. 2017)

Court Description: MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 2/16/2017. (kns, Deputy Clerk)

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Todd et al v. ACN, Inc. et al Doc. 67 I ,. r . IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND SOlltllem Dh';s;oll r-- I' I., ,., n I MICHAEL TODD, ('t :/1., * Pia in tiffs, * v. Casc No.: G.JH-IS-OIS.t * XOOM ENERGY MARYLAND, LLC ef al., * Dcfcndants. * * * * * * * * MEMORANDUM * * * * * * OPINION Plaintiffs Michael Todd. J.:romc 130nicos. and Elizabeth Donncllon (collectively. "PlaintifTs") bring this purported elass action for an allcgcd "bait-and-switch marketing schcmc" pcrpctratcd by Defcndants XOOM Encrgy. LLC ("XOOM Energy" or "XOOM''j. XOOM Energy Maryland ("XOOM Maryland"). and ACN. Inc.. ("ACN") (collcctively. "Defendants"). In thc Court's previous Mcmorandum Opinion. ECF No. 50. the Court grantcd. in part. and denied. in part. Defendants' Motion to Dismiss fl)r Failurc to State a Claim. ECF No. 37. but allowed Plaintiffs to amend their Complaint. Plaintiffs filed a Second Amcndcd Complaint on March 21. 2016. Now pending befl)re thc Court is Defendants' Motion to Dismiss Second Amended Complaint for Failure to State a Claim. ECF No. 59. A hearing on the motion was hcld on January 11.20 17. Local Rulc 105.6 (D. Md.). For thc following reasons. Defendant's Motion to Dismiss is granted. in part. and denied. in part. Dockets.Justia.com I. BACKGROUND A. Factual Background Delendant XOOM Energy is "a Delaware Limited Liability Company ti.mned on March 15.2011. with its principal place of business inlluntersville. North Carolina:' ECI' No, 57'110, XOOM Energy is an "unregulated retail electricity and natural gas provider, which, together with its wholly-owned state subsidiaries. otTers electric and gas services in unregulated markets throughout the United States:' lei. [)elendant XOOM Maryland is a state subsidiary of XOOM Energy. which "sells and supplies electricity and natural gas in Maryland:' lei. ~ 11. Delcndant ACN is a "North Carolina corporation with its principal place of business in Concord. North Carolina:' Id ~ 9, ACN is "a multi-level (i.e. pyramid) marketing company:' which partners with XOOM Energy to sell energy services to consumers through ACN,'s independent business owners ("[BOs") and other sales channels. Id. In their Second Amended Complaint ("SAC'). Plaintiffs allege that "using standardized marketing and training matcrials. Defendants sell electric and gas [services 1 to consumers. through a network of XOOM independent sales representatives employed by ACN:' ECI' No. 57 ~ 2. Plaintiffs further allcge that "XOOM directly, and through its \BOs, reprcscnt to potcntial customers that. if they switch to XOOM Irom their loca!. regulated utilities or othcr encrgy supplicrs, thcy will receive a low introductory rate on their energy bills, followcd by purportcdly competitive markct-based rates and savings on their energy bills:' Id. However. alier signing up with XOOM. XOOM "unilaterally and without justilication. raises the rates chargcd and customers' utility bills increasc unjustiliably:' Id. Each named Plaintiff. as well as dozens of "Onlinc Customer Complaints" includcd in the SAC. tells a similar story. 2 PlaintitT Michael Todd is a resident of West Orange, New Jersey. ECF No. 57 'i 6. In or around May 2013. "Phil:' an independent business owner ("180") from ACN, called Mr. Todd to discuss XOOM Energy. !d. lBO Phil promised Mr. Todd that ifhe switched Irom his currcnt cncrgy supplicr to XOOM. "his energy bills would be consistently cheaper than what he was paying his local utility provider." Ill. Subsequently, Mr. Todd switchcd his encrgy supplicr li'OI11 Public Scrvicc Elcctric & Gas ("PSE&G") to XOOM. !d. Alicr a few months, Mr. Todd's encrgy bills "skyrocketed:' substantially incrcasing each month. !d. Mr. Todd allegcs that hc was charged "86% higher in January 2014 and 128% highcr in February 2014" by XOOM than he would have paid I'SE&G during the samc timc period. !d. Plaintiff Jcromc Bonicos, a resident of Waldwick, New Jersey, had a similar experience. ECF No. 57 ~ 8. In or around January 2013. an 180 named "William" camc to Mr. Bonicos' home. !d. IBO William told Mr. Bonicos that ifhc switched to XOOM, "his encrgy costs would consistcntly bc 5-10% chcapcr than his cncrgy costs with I'SE&G:' !d. Mr. Bonicos subscquently switehcd to XOOM, and in2014, Mr. Bonicos was charged $555.00 more over thc year than had hc stayed with PSE&G. It!. Plaintiff Elizabcth Donncllon is a residcnt of Abingdon, Maryland. ECF No. 57 ~ 7. In or around October 2014, "Blain:' an 180 Irom ACN, visited Ms. Donncllon's homc. Ill. The IBO showed Ms. Donnellon "XOOM Energy brochures detailing XOOM's rates and purported savings:' !d. The 180 promiscd Ms. Donnellon ifshc switchcd to XOOM, "her energy bills would be consistcntly cheaper than if she stayed with Baltimore Gas and Electric ("BGE'').'' !d. Howevcr, alicr switching to XOOM, Ms. Donnellon's encrgy bills "began to substantially risc duc to the spike in XOOM's rates:' !d. Ms. Donncllon's bills were 35% highcr tha.n BGE's ratcs in Dcccmbcr 2014 and 70% highcr than BGE rates in February 2015. !d. , .' B. Procedural Baekt.:round Plaintiffs initiated this action on behalf ofthemsclves and all other similarly-situated individuals on January 16. 2015. alleging various claims against XOOM Energy. XOOM Energy Maryland. XOOM Energy New Jersey. and ACN. Inc. ECF No. I. Plaintiffs filed their First Amended Complaint ("FAC') on March 25. 2015. dropping claims against XOOM Energy New Jersey. ECF No. 33. In the FAe. Plaintiffs brought seven counts against the remaining three Defendants: (I) violation of the Maryland Consumer Protection Act C'MCPA"). Md. Code. Com. Law SS 13-101. el seq.: (II) violation of the New Jersey Consumer Fraud Act C'NJCFA"). N.J. Stat. Ann. SS 56:8-1. er seq.: (III) violation of the North Carolina Unfair and Deceptive Trade Practices Act. N.C. Gen. Stat. SS 75-1.1. el seq.: (IV) breach of contract and the covenant of good faith and fair dealing: (V) common law fraud. including fraudulent concealment and fraudulent inducement: (VI) negligent misrepresentation: and (VII) unjust enrichment. Defendants moved to dismiss all counts of the FAC on April 27. 2015. ECF No. 37. The Court issued a Memorandum Opinion and Order on February 22. 2016. granting. in part. and denying. in part. DeICndant's Motion to Dismiss. With respect to the breach of contract claims in the FAe. only Ms. Donnellon's claim against XOOM Energy Maryland survived the Defendants' motion to dismiss. ECF No. 37. ECF No. 50 at 17. Plaintiffs' breach of contract claims against XOOM Energy and ACN were dismissed without prejudice. ECF No. 50 at 17. The Court held that. applying either Maryland or New Jersey law. XOOM Energy and ACN could not be liable under the alleged contracts because they were not "parties" to the contracts. !d at 15. Plaintiffs now rc-allege. and this 4 Memorandum Opinion will address. the breach of contract claims with respect to XOOM Energy and ACN in Count III of the SAC. I ECF No. 57 at 28-29. Additionally. Plaintiffs' claims of common law fraud. violations of the Maryland Consumer Protection Act. and the New Jersey Consumer Fraud Act in the FAC were dismissed without prejudiee.2 ECr No. 50 at 19-25. The Court hcld that under the heightened pleading standard for fraud claims. pursuant to Fed. R. Civ. P. 9(b). Plaintiffs had failed to "state with particularity"' to whom the statements of fraud were attributed. and thus. all claims under the common law and both consumer protection statutes were dismissed. Id. at 23. Plaintiffs now reallege. and this Memorandum Opinion will address. the claims against all Defendants in Counts I (MCPA). II (NJCrA). and IV (common law fraud) of the SAC. ECF No. 57 at 24-28. 30-3 J. Finally. with respect to the negligent misrepresentation claims. only Messrs. Todd and Bonicos' claims against ACN survived Defendants' Motion to Dismiss. ECr No. 37. ECF No. 50 at 28. Messrs. Todd and 130nicos' additional negligent misrepresentation claims against XOOM Energy Maryland and XOOM Energy. and Ms. Donnellon's negligent misrepresentation claim against all Defendants. were dismissed without prejudice. Id. at 26-28. Plaintiffs now reallege. and this Memorandum Opinion will address. Messrs. Todd and Bonicos' negligent misrepresentation claims with respect to XOOM Energy Maryland and XOOM Energy. and Ms. Donnellon's negligent misrepresentation claims against all Defendants. in Count V of the SAC. ECF No. 57 at 28-29. II. STANDARD OF REVIEW Pursuant to Rule 8(a)(2) of the Federal Rules of Civil Procedure. a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to reliee I In the SAC. ECF No. 57, Plaintiffs do not re-allege the claims for breach of the covenant argood Hlith and t:,ir dealing from Count IV in the FAC. or the unjust enrichment claim from Count VII. ECF No. 33 . .2 Plaintiffs' claim under the North Carolina Unfair and Deceptive Trade Practices Act was dismissed with prejudice. 5 Fed. R. Civ. P. 8(a)(2). In evaluating Defendants' Motion to Dismiss under Fed. R. Civ. P. 12(b)(6). the Court must accept all well-pleaded factual allegations of the complaint as true. and derive all reasonable inferences in the light most favorable to the Plaintiffs. See Iharra Slales. 120 F.3d 472. 474 (4th Cir.1997). To survive dismissal."a 1'. Uniled complaint must contain sufficient factual matter ... to 'state a claim to relief that is plausible on its face.... Ashen!!; ". Iqhal. 556 U.S. 662. 678 (2009) (quoting Bell Allanlic Corp. 1'. Twomhly. 550 U.S. 544.570 (2007»). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged:' Iqhal. 556 U.S. at 678 (citing Twomhly. 550 U.S. at 556). Ilowever. a court need not accept a plaintiff's legal conclusions as true. as "[t]hreadbare recitals of the elements 01''1cause of action. supported by mere conclusory statements. do not surtice:' Jd. In claims "alleging fraud or mistake. a party must state with particularity the circumstances constituting fraud or mistake. Malice. intent. knowledge. and other conditions of a person's mind may be alleged generally." Fed. R. Civ. P. 9(b). Rule 9(b) requires ,.that a plaintiff alleging fraud must make particular allegations of the time. place. speaker. and contents of the allegedly false acts or statements:' Adams 2000); U.S. ex reI. lVilson 1'. 1'. NVR Homes. Inc.. 193 F.R.D. 243. 249-50 (D. Md. Kellogg Bl'Own & Rool. Inc.. 525 F.3d 370. 379 (4th Cir. 2008) (describing the "who. what. when. where. and how of the fraud claim"). III. ANALYSIS A. Breach of Contract (Count III) In Count III of the SAC. Plaintiffs allege that "Plaintiffs and all members of the Class entered into contracts with XOOM pursuant to which it was to chargc them for energy supplied. purportedly at rates lower than those charged by Plaintiffs' local regulated utilities:' ECI' No. 57 6 ~ 80. "Maryland law requires that a plaintiff alleging a breach of contract "must of necessity allege with certainty and delinitenessf{lcts showing a contractual obligation owed by thc defendant to the plaintifTand a brcach of that obligation by defendant. ... Cillar \'. Balik 0{ America. N.A.. No. 13-cv-3230-RWT. 2014 WI. 3704280. *4 (D. Md. July 22. 2(14) (citing Polek v. J.P. lv/orgall Chase Balik. iVA.. 424 Md. 333. 362 (2012)) (emphasis in original). Similarly. under New Jersey law. the plaintiff must prove that the parties entered into a valid contract. the defendant failed to perform its contractual obligation. and the plaintiff sustained damages as a result. Accurate Ahstracts. LLC I'. Hams Edge, LLC. No. 14-CV-1994 (KM)(MAH). 2015 WI. 5996931. at *4 (D.N.J. Oct. 14.2(15). In the Court's prior Memorandum Opinion, the only Breach of Contract claim that survived was the claim brought by PlaintifT Donnellon against XOOM Maryland. The Court dismissed claims involving XOOM Energy and ACN based on its finding that Plaintiffs had not sufficiently alleged that XOOM Energy and ACN were parties to any contract with Plaintiffs. Having now reviewed the SAC, which reasserts the previous claims with additional allegations. and the Defendants' Motion to Dismiss. the Court sees two primary questions to be addressed as it relates to the Breach of Contact claims. First. should the PlaintifTs' claim that the contracts between the parties were. apparently. entirely oral lead to dismissal of the Breach of Contract claims based on the claimed implausibility of an oral contract for energy supply? This question was answered in the negative in the Court's prior Opinion. but changes in the allegations in the SAC make this an issue worth revisiting. Second. have the Plaintiffs now sufficiently alleged that each Defendant was a party to the agreement'? The Court will address these questions in turn. 7 i. Oral Agrccmcnts Defcndants argue that ..the notion of an 'oral" contract to supply energy ... is wholly implausible:' ECF No. 59-1 at 11. In support. they cite to Maryland and New Jersey state regulations that purportedly require energy suppliers to provide customers with written contracts. Md. Code Regs. 20.53.07.08(B)-(C) ("Supplier Contracts"): N.J. Admin. Code ~ 14:4-7.6. But while it may seem difficult to imagine a contract for energy supply that could be effectively offered and accepted without being reduced to a writing. in the context of the allegations in the , SAC. it does not rise to the level of implausibility. Indeed. the entire premise of the case appears to be the notion that the !BOs made a fairly simplistic offer to the Plaintiffs: they would provide energy at cheaper rates than the Plaintiffs' current providers if the Plaintiffs switched providcrs. And there is support in thc catalogue of customer complaints included in the SAC for the notion that thc Defendants did. in fact. engage in agreements that were both oral. see ECr No. 57 at 12 ("1 never had to sign anything and actually never even met with my so called friend in person to sign up for this SCAM scrvice"). and bare-boncs in nature. it!. at 13 (..takes 3 minutes to sign up. 30 to 60 day(s) to cancel"). Additionally. the terms are sufficiently delinitive. with XOOM Maryland supplying lower cost energy in exchange for Plaintiffs switching providers ... that the performance to be rendered by each party can be ascertained with reasonable certainty:' Weichert Co. Rea/tors \'. Ryall. 608 A.2d 280. 284 (N.J. 1992). Thus. because an "agreement cxists once offer. acceptance. and consideration are exchanged between the parties. regardless of whether the agreement is oral or written:' Lopez \'. XTEL COllst. 01'1'.. U.C. 796 F. Supp. 2d 693. 699 (D. Md. 20 II ). the Court will not dismiss Plaintiffs' Breach of Contract claim solely because the contracts are alleged to have been oral. 8 ii. Parties to the Contract As the Court noted in its prior Opinion. as a general matter, a contract cannot be enforced against a person who is not a party to it. ECF No. 50 at 15 (citing Cecilia Sclll\'{/her Tr. Two I'. /iar(/im/ Acc. & Indem. Co.. 437 1',Supp. 2d 485. 489 (0, Md, 2006)), In their prcvious Motion to Dismiss. Defendants argued that Plaintiffs had not alleged a contractual relationship with ACN and XOOM Energy but conceded there was a contract between Plaintitl's and XOOM Maryland, ECF No. 37-1 at 25. The Court agreed, Both the Court and Defendants cited to paragraph 7 of the FAC for the proposition that there did exist a contract with. at least. XOOM Maryland, as that paragraph stated that "Plainti ff Donnellon switched her energy supplier from BGE to XOOM MD in or around October 2014," ECF No, 33 ~ 7. In the Court's view. this established a contractual link between PlaintifTs, as customers, and XOOM Marylaod, as the entity contractually bound to supply Plaintiffs with low-cost energy, Notably, however, in the SAC. Plaintiff removed the "MD" from this paragraph so that it now reads, "Plaintiff Donnellon switched her energy supplier Irom BGE to XOOM in or around October 2014,"} Thus, it would appear that the PlaintifTs now seck to make the allegations incrcasingly vaguc in an etTort to lead the Court to extend the finding of privity between Plaintiff Donnellon and XOOM Maryland to all Defendants. l3ut the Court is not persuaded that merely shining from a statement specifically identifying XOOM Maryland as thc entity to whom Donnellon contracted with tor her encrgy supply, to a 1I10rcvague statemcnt that it was the parties collectively defined as "XOOM," is sufficicnt to allege that ACN and XOOM Energy were also parties to the agreement. As the Court observed at the Motions Hearing. this change was not noted in the Plaintiffs' red-line version of the SAC. Given that this provision formed the basis of both the Defendants' and the Court's view that the contract was with XOOM Maryland. and only XOOM Maryland. it is surprising that this significant change was not red-lined as all other changes were. The Court will assume that the failure to highlight the change was an inadvcI1ent error. .1 9 Additionally, the conclusion that XOOM Maryland was the entity in contractual privity with Plaintiff Donnellon as their customer, is consistent with provisions in the SAC indicating that "Xoom Energy Maryland, LLC ... sells and supplies electricity and natural gas in Maryland," ECF No. 57 ~ II, and "XOOM MD supplied the overpriced energy to customers." ill. '124. While Plaintiffs have added additional facts indicating the involvement of ACN and XOOM Energy in the solicitation of customers. including Plaintiffs. that information. while relevant to the fraud allegations, does not suftice to establish that there was a contractual relationship involving those parties. To the extent Plaintiffs have alleged any contractual relationship. it is between Plaintiff Donnellon, as customer, and XOOM Energy Maryland, as energy supplier, Plaintiffs' argument that ACN and Xoom Energy should be held liable under a theory of apparent authority also fails. "To support a finding of apparent authority. both Maryland and New Jersey law require a showing that the principal"s conduct created the appearance of the agent's authority, causing a third party to reasonably rely on that representation." Ziemkiell'icz \'. R+ L Carriers. Inc.. 996 F. Supp. 2d 378. 401 (D. Md. 2014). Here, Plaintiffs have not alleged that they relied on a representation that they were entering into an agreement with ACN or XOOM Energy. Rather. the picture painted by Plaintiffs is one where the Plaintiffs were unelear as to which company they were entering into a contract with and were instead relying solely on promises of better prices and their relationships with the individual 1130s. Thus, Plainti ffs' agency argument fails. Plaintiff Donnellon's breach of contract claim with respect to XOOM Maryland survives Defendants' motion to dismiss. All other breach of contract claims are dismissed with prejudice. 10 B. Fraud and Related Claims Plaintiffs again assert claims for common law fraud. the Maryland Consumer Protection Act. and the New Jersey Consumer Fraud Act. ECF No. 57 at 24. 26. 30. The Court will discuss the elements of cach claim and then analyze them jointly as the relevant issues overlap. i. Common Law Fraud (Count IV) To state a claim for common law Iraud, a plaintiff must allege "(1) that the delcndant made a false representation to the plaintiff: (2) that its falsity was either known to the defendant or that the representation was made with reckless indifference as to its truth, (3) that the misrepresentation was made for the purpose of defrauding the plainti ff: (4) that the plaintifT relied on the misrepresentation and had the right to rely on it. and (5) that the plaintilTsuffered compensable injury resulting trom the misrepresentation:' LeRore \'. One Wesl Bank. FSB. 898 F. Supp. 2d 912. 919 (D. Md. 2012).~ To constitute a false representation. "a statement must be a misrepresentation of material fact. It eannot be an estimate or opinion or puffing." Daniyan \'. Viridian EneriO'. LLC, GLR-142715.2015 WL 4031752. at *2 (D. Md. June 30. 2015). The elements for a claim of fraudulent concealment are: (I) the defendant owed a duty to the plaintiff to disclose a material fact: (2) the delendant failed to disclose that fact: (3) the delendant intended to defraud or deceive the plainti 1'1': the plainti ff took action in justi liable reliance on the concealment: and (5) the (4) plaintiff suffered damages as a result of the defendant's concealment. Hill\'. Brush EnRineered Maleria/s. Inc.. 383 F. Supp. 2d 814. 820 (D. Md. 2005): accord Arcand \'. Brolher Inlem. Corp .. 673 F. Supp. 2d 282 (D.N.J. 2009). Both Iraudulent representation and Iraudulent .( Similarly. the clements ofa claim for common law fraud in New Jersey are: (1) a materitsllllisrepresentation ora presently existing or past fact; (2) knowledge or beliefby the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon: and (5) resulting damages. Alexander \'. elGNA Corp .. 991 F. Supp. 427,435 (D.N.!. 1998); Faistl \'. Energy ('I"" /lalding'. u.e, Civil Action No. 12-2879,2012 WI. 3835815 (D.N.J. Sept. 4. 2012). 1I concealment are subject to the heightened pleading standard of Rule 9(b). See Hill. 383 F. Supp. 2d 814. 822-23. ii. Maryland Consumer Protection Act (Count I) The MCPA prohibits the commission of '"unfair or deceptive trade practices:' which includes making a "false ... or misleading oral or written statement ... or other representation of any kind which has the capacity. tendency. or effect of deceiving or misleading consumers" and "knowing concealment. suppression. or omission of any material lact with the intent that a consumer rely on the same in connection with the promotion or sale of any consumer goods ... or consumer service .. :. Md. Code Ann .. Com. Law * 13-30 I(I )-(9). To bring an action under the MCI' A. the plaintiff must allege "( I) an unfair or deceptive practice or misrepresentation that (2) is relied upon. and (3) causes the plaintiff actual injury:' Daniyan \'. Viridian Energy. HC. GLR-14-2715. 2015 WL 4031752. at * I (D. Md. June 30. 2015). While claims of lraud under the MCPA are subject to the heightened pleading requirements of Rule 9(h). "omissions are not subjected to the heightened pleading standards of Rule 9(b) because such allegations cannot be described in terms of the time. place. and contents of the omission:' Daniyanl'. Viridian Energy, He. GLR-14-2715. 2015 WL 4031752. at *I (D. Md. June 30. 2015) (citing Marshall v. .failles B. NlIl/er & Co.. 816 F. Supp. 2d 259. 267 (D. Md. 2011)); see also Landau \'. Viridian Energy I'll LLC. Civil Action No. 16-2383.2016 WL 6995038 (E.D. Pa. Nov. 30. 2016) (noting that claims based on dcccption. not Iraud. under the Pennsylvania Unlair Trade Practices and Consumer Protection Law need only satisfy the normal pleading standard of Rule 8(a)). Nonetheless. the MCPA does provide consumers with protection against "omissions of material laet" and "such omissions are material 'if a significant number of 12 unsophisticated consumers would tind that information important in determining a course of action .... Daniyan. 2015 WL 4031752. at *2. Here. Plaintiffs claim that "Defendants violated the MCPA by failing to disclose that. on a consistent basis. XOOM's regular rates are substantially higher than its competitors and not competitive in the market" ECI' No. 57'158. Plaintiffs also claim that '"Defendants violated the MCPA by failing to disclose to consumers that after the initial introductory period. XOOM's energy rates increased substantially and exceed those charged by rcgulated utilities'" hi. ~ 59. Thus. at least some of Plainti ffs' MCP A claims arc subject not to the heightened pleading standard of Rule 9(b). but to the regular pleading standard of Rule 8(a). iii. New .Jersey Consumer Fraud Aet (Count II) To state a claim under the NJCFA. PlaintifTs must allege sufficient facts to demonstrate: (1) unlawful conduct: (2) an ascertainable loss: and (3) a causal relationship between the unlawful conduct and the ascertainable loss. Harnish \'. Widener Uni\'. Sch. ,!lLall'. 93 I 1'. Supp. 2d 641. 648 (D.N.J. 2013). Unlawful conduct is detined as: The act. use or employment by any person of any unconscionable commercial practice. deception. fraud. false pretense. lalsc promise. misrepresentation. or the knowing. concealment. suppression. or omission of any material fact with intcnt that others rely upon such concealmcnt. supprcssion or omission. in conncction with the sale or advertisement of any mcrchandise or real estate. or with the subscqucnt perfonnancc of such person as aforesaid. whethcr or not any pcrson has in fact bcen misled. deceived or damaged thereby. N.J. Stat. Ann. * 56:8-2. ""This broad definition of unlawful practice covers affirmative acts and knowing omissions'" Faistl. 2012 WL 3835815. at *5 (D.N.J. Scpt. 4. 2012). A claim under the NJCI' A requires more than a brcach of contract or breach of warranty: it requircs "substantial aggravating circumstances'" Id.: Urhino \'. AII/hil EnerKJ' }f()ldin~s. LLe. Civil Action No. 14- 13 5184 (MAS)(DEA). 2015 \VI. 4510201. at *3 (D.N.J. July 24. 2015). To meet this standard. a plaintiff must demonstrate that the business behavior in question "stands outside the nonn of reasonable business practice in that it will victimize the avcrage consumer."' Jd. (eiting Til/I Lawnmoll"er Repair. Inc. v. Bergen Record Corp .. 139 N.J. 392. 416 (1995». Unless the parties' relationship is governed by a valid contract. "whether a business practice is unfair" is typically "a question f()f the jury."' Urbino v. Amhit Energy I/oldings. LLC. Civil Action No. 14-5184 (MAS)(DEA). 2015 \VI. 4510201. at *3 (D.N.J. July 24. 2015): see also Richard\" \'. Direct Enerf!J' Services. LLC. 120 F. Supp. 3d 148. 158 (D. Conn. 2015) (noting that "whether [Defendant energy supplier]"s variable-rate plan was an unfair or deceptive marketing practice is 'a question of fact that is not readily susceptible to resolution on a motion to dismiss") Unlike the Maryland Consumer Protection Act. New Jersey courts seem to agree that all violations of the NJCF A must "meet the heightened pleading requirements of Fed. R. Civ. P. 9(b)." Torres-Ilemande:: \'. CVT Prepaid Sols" Inc" No. 3:08-CV -I 057-FL \V. 2008 \VL 5381227. at *5 (D.N.J. Dec. 17.2008); Naporano Iron & Metal Co. \'. American Crane Corp .. 79 F. Supp. 2d 494. 510 (D.N.J. 2000); Slim CD. Inc. \'. Heartland PaymentS)'s .. No. 06-2256. 2007 \VL 2459349 (D.N.J. Aug. 22. 2007) ("The pleading requirements of Rule 9(b) apply to ... NJCFA claims as well as ... common law fraud claims.""). iv. Analysis In its previous Opinion. the Court dismissed PlaintifTs' fraud claims because Plaintiffs failed to allege with particularity to which Defendants the statements were attributable. Id at 23. Plaintiffs now re-allege the fj'aud claims against all DelCndants in Counts I. II. and IV of the Second Amended Complaint. ECF No. 57 at 24-28. 30-31. In the Second Amended Complaint. Plaintiffs now allege: 14 23. Each of the misrepresentations made orally by. or on behalfoL the Defendants and/or their corporate atliliates (e.g. XOOM NJ) were consistent with one another and were derived Irom XOOM selling scripts. marketing and training materials bclievcd to have been composed and distributed by Delcndant ACN to its coconspirators and joint venturers. 24. Upon information and beliel: the plan to deceive prospective XOOM customers is the product of a scheme carried out jointly and knowingly by all Detcndants: ACN sold the energy through its mos. XOOM Energy produced the selling scripts pursuant to a strategy developed by ACN. and XOOM NJ and XOOM MD supplied the overpriced energy to customers. ECF No. 57 at 8-9. These additional allegations regarding Defendants' unil(lrI11marketing materials. training materials. and selling scripts lend support and clarity to the allegations which were made in the FAC. and are re-alleged in the SAC. Speci!ically. Plaintiffs !irst allege that Phil. an ACN IBO. called PlaintilTTodd in May 2013. According to the Complaint. 180 Phil represented to Mr. Todd that ifhe switched to XOOM. "his energy bills would be consistently cheaper than what he was paying his local utility provider:' ECF No. 57 '1i 6. Second. PlaintifTs allege that an ACN IBO named Blain visited Plaintiff Donnellon's home in October 2014. showed her XOOM brochures. and promised Ms. Donnellon ifshe switched to XOOM "her energy bills would be consistently cheaper than ifshe stayed with [her local service provider]:' Third. Plaintiffs allege that an 180 named William visited Plaintiff Bonicos' home in January 2013. IBO William told Mr. Bonicos that ifhe switched to XOOM. "his energy costs would consistently be 5-10% cheaper than his energy costs with [his local service provider]." With the added allegations regarding the role each Delcndant played in developing the material used by the !BOs. Plaintiffs have now stated with particularity the identity of the speakers. the time. the place. and the contents of the statements at issue in a manner that states a claim as to each Dcfcndant. 15 Additionally, Plaintiffs allege that Defendants made these representations for the purpose of inducing Plaintiffs' reliance - as ACN !BOs made phone calls and home visits to Plaintiffs' homes, speaking with them about XOOM Energy and soliciting them to switch providers, Plaintiffs reasonably relied on the representations and switched providers, only to be charged higher rates. Accordingly, Plaintiffs have stated a e1aim for common law fraud against XOOM Energy, XOOM Energy Maryland, and ACN. Ilence, Defendants' motion to dismiss the common law Iraud e1aims is denied. Plaintiffs have also stated a e1aim for violations of the Maryland Consumer Protection Act and New Jersey Consumer Fraud Act. As the Court held previously, the statements made by the !BOs were not mere puffery and could reasonably have induced Plaintiffs' reliance. ECF No. 50 at 23. Failing to disclose that XOOM prices generally increase, were substantially higher than XOOM's competitors, and were rarely lower than its competitors. states a claim under the Maryland Consumer Protection Act. See Allen \'. Cili,\/orlgage, Inc .. No. CIY. CCB-l 0-2740, 2011 WL 3425665. at *9 (D. Md. Aug. 4, 2011) (holding that plainti ITstated e1aim under MCPA when defendants' letters to plaintilTs, "taken in combination," had plausible "effect of deceiving or misleading [plainti ITs ]"): Daniyan l'. Viridiaf1 EnC1XY. LLC, GLR-14-2715. 2015 WL 4031752, at *2 (D. Md. June 30. 2015) (dismissing MCPA claim but drawing distinction where energy supplier website and marketing materials state that rates may be higher than utility's rates). This is especially true where "a number of unsophisticated consumers would find that infomlation:' i.e. the promise of cost savings on their energy bills. "important in determining a course of action:' Id. Likewise. engaging in a "c1assic bait-and-switch scheme" that "Iure[s] potential customers in by making exaggerated claims of energy savings which ultimately prover s 1 16 'illusory'" constitutes the unlawful conduct that plausibly violates the New Jersey Consumer rraud Act. See Klein \'. Budget Re/1/ a CarS)'s .. Inc.. No. CIV.A. 12-7300 JLL. 2013 WL 1760557. at *6 (D.N.J. Apr. 24. 2013) (finding unconscionable conduct under NJCFA where rental car company engaged in "bait-and-switch" scheme by luring in customers with promises of frequent-flyer miles. then adding hidden surcharges): Arcand \', Brotherlnterll. Corp .. 673 F. Supp, 2d 296-97 (D.N.J. 2009) (finding plaintilTadequately pleaded unlawfill conduct under NJCr A where printer company made misrepresentation to induce customers to purchase additional merchandise); see also Richards \'. Direct Energy Serl'ices. LLC. 120 r. Supp. 3d 148. 158 (D. Conn. 2015) (noting that whether a variable-rate plan is an"unfair or deceptive marketing practice" is "not readily susceptible to resolution on a motion to dismiss," and proper inquiry is whether plaintilTalleges "suflicient facts to raise a reasonable expectation that discovery will reveal evidence supporting the claim ..).5 Therefore. Defendants' motion to dismiss the MCPA and NJCFA is also denied. C. Negligent Misrepresentation Finally. Plaintiff's re-allege the negligent misrepresentation claims against all Defendants in Count V of the Second Amended Complaint. ECr No. 57 at 28-29. Under the Court's previous Opinion. Messrs. Todd and Bonieos' negligent misrepresentation claims against ACN proceeded; but the Court dismissed the claims against XOOM Energy and XOOM Maryland because it was unclear to whom the alleged misrepresentations could be attributed. Messrs. Todd and Bonieos. the plaintifl's from New Jersey. allege no facts to suggest that XOOM Maryland made misrepresentations to them. Thus. the Court will limit its analysis here to Plaintifls Todd Richardt addressed a claim under Connecticut Unfair Trade Practices Act. Conn. Gen. Stat. ~ 42-llOb(a). See Rich"rd, \'. Direct £l1erg)'8eI'l''' .. /.I.e. 120 F. Supp. 3d 148. 156. 5 17 and Bonicos' negligent misrepresentation claims against XOOM Energy and Plaintiff Donnellon's negligent misrepresentation claims against all Defendants. As these claims do not sound in fraud. they arc subject to the more liberal pleading standard of Fed. R. Civ. P. 8(a)(2). To state a claim for negligent misrepresentation in Maryland: ..( I) the defendant. owing a duty of care to the plainti fl'. negligently asserts a false statement: (2) the defendant intends that his statement will be acted upon by the plaintiff; (3) the defendant has knowledge that the plainti ITwill probably rely on the statement. which. if erroneous. will cause loss or injury; (4) the plaintifCjustiliably. takes action in reliance on the statement; and (5) the plaintiff suffers damage proximately caused by the defendant"s negligence," Lloyd \'. Gen. Jvfolors Corp .. 397 Md. 108. 136 (2007). In the context of negligent misrepresentation. "where the lailure to exercise due care creates a risk of economic loss only. 'an intimate nexus between the parties [i]s a condition to the imposition of tort liability," Such an intimate nexus requires "contractual privity or its equivalent," SlIperior Bank. F.SB. \'. Tandell/ Nal. Morlgage. Inc.. 197 F. Supp. 2d 298. 320 (D. Md. 2000) (quoting WeislI/an\'. Connors. 540 A. 2d 783. 791 (Md. 1988)). Under New Jersey law. plaintiffs need only prove that (I) delendant negligently made a false eommunication of materia I Iact: (2) plaintilTjustiliably relied upon the misrepresentation: and (3) the reliance resulted in an ascertainable loss or injury. Elias I'. Unga's Food Prods. Inc.. 252 F.R.D. 233. 251 (D.N.J. 2008). As a preliminary matter. multiple Delendants may be liable for the negligent misrepresentations of the !BOs where a civil conspiracy exists. A civil action for conspiracy is essentially a tort action. Farris I'. COlll7/y()rCall/den. 61 F. Supp. 2d 307. 330 (D.N.J. 1999); accord !laic 7i'IICks(irA/wyland. LLC \'. Vol\'() Trllcks Norlh AII/erica. Inc.. 224 F. Supp. 2d 1010. 1021 (D. Md. 2002). "The conspiracy is not the gravamen of the charge. but merely a 18 mattcr of aggravation. enabling thc plaintiff to rccovcr against all thc dcfendants as joinl tortfcasors:' Farris. 61 F. Supp. 2d at 330: see also !fale. 224 F. Supp. 2d at 1021 (cxplaining that conspiracy "'is not a scparate tort capable of indcpcndcntly sustaining an award of damagcs in the absence of other tortious injury to the plaintiffs:'). By contrast. neither Maryland law nor New Jersey law recognizes a causc of action for civil conspiracy for breach of contract or unjust enrichment. Hale. 224 F. Supp. 2d at 1021: Trim Equip .. Inc. 1'. Manor. Civil No. 08-556 I. 2011 WL 705703. *8 (D.N.J. 2(11). Thus. where PlaintitTs have set forth sufficient lacts suggesting a civil conspiracy between Defendants. Plaintiffs may recover against multiple Defendants jointly for claims sounding in tort - i.e. fraud and negligcnt misrcpresentation - but not for thc brcach of contract claims. Plaintiffs havc pleadcd sufficient facts linking all Defendants to the allegcd unlawful activity. Specifically. Plaintiffs allege that XOOM and ACN developed the training matcrials and content for thc mos. creating a sales "pitch" that creatcs "consumer confusion about the entities with which they arc dealing." ECF No. 57 ~~ 37-39. Plaintiffs allege that "by hiring and training mos. ACN knowingly participated in the schcme conceivcd oC dcsigned. and carried out by XOOM and ACN acting in conccrt:' lei. ~ 39. This schemc. they arguc. mislcd and defraudcd customcrs. lei. '140. PlaintitTs attach no !ewer than 29 customcr complaints. making such allegations as "ACN rep told us he could [definitcly] savc us moncy on electric bill. Got first bill and this is not true at all I have never had bills this high"' ECF No. 57 at 15. "'ACN rep never told me that Xoom energy will charge monthly service fee. the only thing thcy told me is thcy can help to save up to 70% gas bill."' lei. at 21. and "'[w]c l'(lUndout that wc actually paid more every month!!!! ... Watch out for your ncighbors and friends who scll you ACN services:' iel. at 13. PlaintifTs also point to a news article in which a fonncr ACN sales rep states, "I'm robbing 19 people. I pitch[cd]to them that they can save money. but it's the exact opposite:' ECF No. 57'1 32. These are sufficient facts to suggest concerted action between XOOM Energy. its subsidiaries. and ACN. Therefore. Messrs. Todd and Bonicos have stated a claim for negligent misrepresentation against XOOM Energy. However. under Maryland law. which governs Ms. Donnellan' s claims, where a plainti 1'1' claims purely economic losses, plaintiff may recover on a negligent misrepresentation claim only if contractual privity or the equivalent exists between plaintiff and defendant. See 1I1111/illg/oll MONg Co. ", Mor/gage Power Fillallcial Serl'ices. IlIc .. 90 F. Supp. 2d 670 (D. Md. 2000) (upholding dismissal of negligent misrepresentation claims where plaintiff m0l1gage company harmed by faulty appraisals did not show contractual privity betwecn itsclf and rcal estate appraisers). The alleged facts do not demonstratc that Ms. Donnellon was in contractual privity or the equivalcnt with ACN. The filcts only suggest that Ms. Donnellan was in contractual privity or the equivalcnt with XOOM Energy Maryland. Plaintiff's' reliancc on Weismall ,', COllllors. 540 A.2d 783 (1988) is unavailing. In Wei.mulI1. a prospective employer was liable to a prospective employee for negligent misrepresentation when the company vice president made statements about the solvency of the company during "pre-contractual negotiations." Weismall. 540 A.2d at 793-94. (1988). Howevcr. the defendant in that case was the very same employer with which thc cmployec later contracted for employment. Jd. at 431 C.[t]his meeting began a chain of events that led to an employmcnt rclationship between [Plaintifll Connors and [Dcfcndant] Weisman"). Hcre. ACN merely acted as a sales agent for XOOM. and was not in privity with Ms. Donncllon. Accordingly. the dismissal of Ms. Donnellon's claims lor ncgligcnt misrcprcsentation against ACN stands. 20 Ms. Donnellon also cannot proceed on her negligent misrepresentation claims against XOOM Energy or XOOM Energy Maryland because under Maryland law. whieh controls PlaintilTDonnellon's claims. "a promissory representation made with an existing intention not to perform is actionable for fraud ... [but] not for negligent misrepresentation:' He v. Capi/alOne. 2IJIJNor/il Gilll/or. Na/. Ass 'n. 863 F. Supp. 2d 480. 492-93 (D. Md. 2012) (internal citations omitted). As PlaintilT Donnellon's Iraud claim has already survived dismissal. her ncgligent misrepresentation claims against these Defendants shall be dismissed. IV. CONCLUSION For the foregoing reasons. Defendants' Motion to Dismiss for Failure to State a Claim, ECF No. 59. is granted. in part. and denied in part. Ms. Donnellon's breaeh of contract claims (Count III) against XOOM Energy Maryland proceed. and Plaintiffs' breach of contract claims against ACN and XOOM Energy are dismissed. Plaintiffs' common law Iraud claims (Count IV). claims under the MCPA (Count I). and claims under the NJCF1\ (Count II) proceed against all Defendants. Messrs. Todd and Bonieos' negligent misrepresentation claims (Count V) against ACN and XOOM Energy proceed. and Ms. Donnellon's negligent misrepresentation claims against all Defendants are dismissed. 1\ separate Order shall issue. Date: February!' 2017 • 21 k//--- George J. ITazel United States District Judge

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