Martinez v. Agway Energy Services, LLC

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

____________________________________________

ANTONIO MARTINEZ, in his capacity as

executor of Naomi Gonzales' estate,

Plaintiff,

vs. 5:18-CV-00235

(MAD/ATB)

AGWAY ENERGY SERVICES, LLC,

Defendant.

____________________________________________

APPEARANCES: OF COUNSEL:

FINKELSTEIN, BLANKINSHIP, TODD S. GARBER, ESQ.

FREI-PEARSON & GARBER, LLP CHANTAL KHALIL, ESQ.

One North Broadway, Suite 900 DOUGLAS G. BLANKINSHIP, ESQ.

White Plains, New York 10601

Attorneys for Plaintiff

BOND SCHOENECK & KING, PLLC BRENDAN M. SHEEHAN, ESQ.

One Lincoln Center SHARON M. PORCELLIO, ESQ.

Syracuse, New York 13202

Attorneys for Defendant

COYLE LAW GROUP LLP JOHN D. COYLE, ESQ.

55 Madison Avenue - Suite 400

Morristown, New Jersey 07960

Attorney for Defendant

Mae A. D'Agostino, U.S. District Judge:

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Naomi Gonzales ("Decedent") commenced this putative class action against Defendant

Agway Energy Services, LLC, on December 6, 2017, in the United States District Court for the

District of Delaware. See Dkt. No. 1. Decedent purported to bring this action on her own behalf

and on behalf of (1) a class consisting of Defendant's New York and Pennsylvania customers

charged a variable rate for residential electricity services from November 2011 to the present (the

"New York/Pennsylvania Class"); and (2) a sub-class of Defendant's New York customers

charged a variable rate for residential electricity services from November 2011 to the present (the

"New York Sub-Class"). See id. at 13. Plaintiff asserted five claims against Defendant: (1)

violations of New York General Business Law ("GBL") § 349 on behalf of the New York

Sub-Class; (2) violations GBL § 349-d on behalf of the New York Sub-Class; (3) breach of

contract on behalf of the New York/Pennsylvania Class; (4) breach of implied covenant of good

faith and fair dealing on behalf of the New York/Pennsylvania Class; and (5) unjust enrichment on

behalf of the New York/Pennsylvania Class. See id. at 15-21.

On January 29, 2018, Defendant filed a motion to dismiss and the case was transferred to

the United States District Court for the Northern District of New York by stipulation of the

parties. On October 22, 2018, this Court granted Defendant's motion to dismiss in part and denied

it in part, dismissing Plaintiff's breach of implied covenant of good faith and fair dealing and

unjust enrichment claims. See Dkt. No. 81. Decedent subsequently passed away and, on April 1,

2021, U.S. Magistrate Judge Andrew T. Baxter granted a motion to substitute Antonio Martinez,

in his capacity as the executor of Decedent's estate, as Plaintiff. See Dkt. No. 125.

Currently before the Court is (1) Plaintiff's motion for class certification, see Dkt. No. 136;

(2) Defendant's motion for summary judgment or, in the alternative, to strike Plaintiff's proposed

expert, see Dkt. No. 137; (3) Defendant's motion to deny class certification, see Dkt. No. 138; (4)

Plaintiff's motion to strike Defendant's motion to deny class certification, see Dkt. No. 139; and

(5) Defendant's motion to strike Plaintiff's statement of additional material facts, see Dkt. No. 156.

For the reasons that follow, Plaintiff's motion for class certification is granted in part and denied

in part and Defendant's motion to deny class certification is granted in part and denied in part;

2

Plaintiff's motion to strike Defendant's motion to deny class certification is denied; Defendant's

motion for summary judgment is granted in part and denied in part; Defendant's motion to strike

Plaintiff's proposed expert is granted; and Defendant's motion to strike Plaintiff's statement of

additional material facts is denied.

II. BACKGROUND

In the electricity industry, traditionally, local incumbent utilities maintained monopoly

control over electricity distribution systems within set geographic zones. However, in the late

1990s, regulators in New York and Pennsylvania deregulated the electricity market and allowed

Energy Supply Companies ("ESCOs") to buy or generate electricity wholesale for resale or sale to

customers by, for example, owning electricity production facilities, purchasing electricity from

wholesale brokers, or purchasing futures contracts for the delivery of electricity at a

predetermined price. Many ESCOs offer variable prices, promotional rates, guarantees that

energy will come from renewables, and incentives like cash rebates and gift cards. Utilities are

still delivered to customers using the incumbent utilities' transmission or distribution systems, but

customers pay the cost of the utility to the ESCO. Defendant is a limited liability Delaware

corporation and an ESCO eligible to sell electricity to residential and commercial customers in

New York and Pennsylvania.

Decedent was a resident of New York and received electricity from her local utility,

Central Hudson. In December 2015, Decedent decided to switch her electricity provider to

Defendant, who confirmed her enrollment via a recorded Third-Party Verification ("TPV") call.

See Dkt. No. 152-6 at ¶ 29. During the TPV call, Defendant's representative informed Decedent

that she would "be placed on [Defendant's] monthly variable rate Electricity Program with [her]

first month introductory price being 4.4 cents per kilowatt hour." Dkt. No. 137-9 at 7.

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Defendant's representative explained that she would "continue to receive [Defendant's]

competitive market based monthly variable rate until [she] notif[ied] [Defendant] of [her] wish to

cancel" and that, as part of the electricity program, she would "also automatically receive the ...

Energy Guard Repair Program that provides coverage for [the] [central] air conditioning unit and

electric wiring in [her] home." Id. Finally, the representative informed her that participation in

Defendant's electricity program was "not a guarantee of future savings." Id.

After completing the TPV call, Defendant mailed Decedent a Customer Disclosure

Statement, Welcome Letter, and EnergyGuard brochure. See Dkt. No. 152-6 at ¶ 30. The

Customer Disclosure Statement stated that

the price for all electricity sold under this Agreement shall be a

variable rate which shall each month reflect the cost of electricity

acquired by [Defendant] from all sources (including energy,

capacity, settlement, ancillaries), related transmission and

distribution charges and other market-related factors, plus all

applicable taxes, fees, charges or other assessments and

[Defendant's] costs, expenses and margins.

Dkt. No. 137-10 at 3. The Customer Disclosure Statement further provided that "Savings are

NOT guaranteed." Id. Decedent's Welcome Letter stated as follows:

For being an ... electricity customer, [Defendant] also include[s] the

peace of mind and added value of [the] Energy Services

EnergyGuard Repair Program. ... EnergyGuard provides you with

protection in the event of a breakdown of your residential central air

conditioning unit or a problem with the electrical wiring in your

home. It provides up to a maximum of $1000 for parts and labor

per each service plan every calendar year that you're a customer.

Id. at 2. The EnergyGuard brochure stated that, "[a]s an ... Energy Services electricity customer[,]

you automatically receive all the benefits of our ... EnergyGuard repair program" and provided

further specifics on the program. Id. at 5. Decedent's enrollment in Defendant's electricity

program commenced in February 2016 and continued until October 2017, when Decedent

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cancelled her contract. See Dkt. No. 152-6 at ¶ 31; Dkt. No. 137-12 at ¶ 26. Decedent had been

provided an introductory rate of $0.044 per kilowatt hour for her first two months in the electricity

program, and then she was switched to Defendant's variable rate for the remainder of her time.

The New York Public Service Commission ("NYPSC") is the New York regulatory

agency with supervisory authority over all ESCOs in New York. In December 2019, the NYPSC

issued an "Order Adopting Changes to the Retail Access Energy Market and Establishing Further

Process" ("NYPSC order") to "strengthen[] protections for residential and small commercial

customers (mass-market customers) in the retail energy market." Dkt. No. 137-5 at 2, 3. The

NYPSC order was the result of a ten-day evidentiary hearing before two administrative law judges

and involved the testimony and cross-examination of twenty-two witnesses and panels of

witnesses. See id. at 5-6. The NYPSC ultimately determined that:

any product marketed by an ESCO after the effective date of ... this

Order must meet at least one of three criteria, with one exception

noted below: (a) it must include guaranteed savings; (b) it must be a

fixed-rate product compliant with a price limit; or, (c) it must be a

renewably sourced product compliant with rules regarding content,

sourcing, and transparency.

Id. at 17. The single exception to this rule was Defendant, who was provided with "a limited

opportunity to continue to offer its EnergyGuard service" because it was the only ESCO to

provide "detailed evidence" demonstrating that its value-added and energy related product or

service "provide[d] a unique benefit that may be reasonably comparable to its costs." Id. at 21.

As an ESCO validly offering an value-added energy related product or service, Defendant was

"permitted to charge prices higher than the utility default supply rate." Id. at 22. Other ESCOs

had a "limited opportunity" to apply for a similar exception. Id. at 19.

Plaintiff now argues that his motion for class certification should be granted because he

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has satisfied all of the requirements under Rule 23(a) of the Federal Rules of Civil Procedure, as

well as the requirements of Rule 23(b)(2) and 23(b)(3). See Dkt. Nos. 136, 149, 155. Defendant

opposes class certification, arguing that Plaintiff cannot show by a preponderance of the evidence

that the commonality, typicality, or adequacy requirements of Rule 23(a), or the requirements of

Rule 23(b)(2) and 23(b)(3), have been met. See Dkt. Nos. 138, 150, 154.1 Defendant also argues

that its motion for summary judgment should be granted against Plaintiff because (1) Plaintiff

cannot establish that it breached its contract with Decedent as a matter of law because it complied

with the actual terms of that contract; (2) Plaintiff's GBL claims must be dismissed because they

are duplicative of the breach of contract claim and the NYSPC orders definitively determined that

Defendant's variable rates are reasonable. See Dkt. Nos. 137, 156. Defendant further argues that

the opinion of Plaintiff's proposed expert, Dr. Felder, must be struck because his proffered

testimony is unsupported and without a reliable foundation and therefore inadmissible under Rule

702 of the Federal Rules of Evidence, see id., and that Plaintiff's Statement of Additional Material

Facts should be struck for failure to comply with Local Rule 56.1, see Dkt. No. 156. Plaintiff

opposes these motions. See Dkt. Nos. 151, 157.

III. DISCUSSION

A. Class Certification2

1 Plaintiff argues that Defendant's separate motion to deny class certification should be

struck and the contents instead be included in Defendant's opposition to Plaintiffs motion for class

certification. See Dkt. No. 139. The Court does not perceive Defendant's motion to deny

certification to be a pretext to circumvent the page limit or gain the last word through a de facto

sur-reply, or to be otherwise unduly burdensome or impermissible. Accordingly, Plaintiff's

motion to strike is denied.

2 As addressed more fully in the summary judgment section below, the Court is granting

Defendant's motion for summery judgment on the breach of contract claim. This leaves the New

York/Pennsylvania Class without any surviving claims. Accordingly, Plaintiff's motion for class

certification is denied with respect to the New York/Pennsylvania Class, and this section will only

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1. Standard

"In evaluating a motion for class certification, the district court is required to make a

'definitive assessment of Rule 23 requirements, notwithstanding their overlap with merits issues,'

and must resolve material factual disputes relevant to each Rule 23 requirement." Brown v. Kelly,

609 F.3d 467, 476 (2d Cir. 2010) (quoting In re Initial Pub. Offerings Sec. Litig., 471 F.3d 24, 41

(2d Cir. 2006)). "A district court enjoys broad discretion when it comes to resolving questions of

class certification because it 'is often in the best position to assess the propriety of the class and

has the ability ... to alter or modify the class, create subclasses, and decertify the class whenever

warranted.'" V.W. by and through Williams v. Conway, 236 F. Supp. 3d 554, 572 (N.D.N.Y.

2017) (quoting Sumitomo Copper Litig. v. Credit Lyonnais Rouse, Ltd., 262 F.3d 134, 139 (2d

Cir. 2001)).

Rule 23(a) sets forth four threshold requirements for class certification:

(1) the class is so numerous that joinder of all members is

impracticable, (2) questions of law and fact are common to the

class, (3) the claims or defenses of the representative parties are

typical of the claims of defenses of the class, and (4) the

representative parties will fairly and adequately protect the interests

of the class.

Fed. R. Civ. P. 23(a). After the threshold requirements in Rule 23(a), "[t]he district court must

also determine whether the action can be maintained under Rule 23(b)(1), (2), or (3)." In re Am.

Int'l Grp., Inc. Sec. Litig., 689 F.3d 229, 238 (2d Cir. 2012). Additionally, "courts have written a

third, 'implied requirement' into the Rule: a party seeking certification must demonstrate that the

proposed class is 'ascertainable.'" V.W., 236 F. Supp. 3d at 573 (quotation omitted).

"A party seeking class certification must affirmatively demonstrate [its] compliance with

address the New York Sub-Class.

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the Rule." Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011) ("Rule 23 does not set forth

a mere pleading standard"). "The party seeking class certification bears the burden of establishing

by a preponderance of the evidence that each of Rule 23's requirements has been met." Myers v.

Hertz Corp., 624 F.3d 537, 547 (2d Cir. 2010) (citations omitted). Although "a court's

class-certification analysis must be 'rigorous' and may 'entail some overlap with the merits of the

plaintiff's underlying claim, Rule 23 grants courts no license to engage in free-ranging merits

inquiries at the certification stage." Amgen Inc. v. Connecticut Ret. Plans and Tr. Funds, 568 U.S.

455, 465-66 (2013) (citations omitted). "Merits questions may be considered to the extent—but

only to the extent—that they are relevant to determining whether the Rule 23 prerequisites for

class certification are satisfied." Id. at 466.

"In sum, '[c]lass certification is appropriate where the proposed class meets, by a

preponderance of the evidence following a court's "rigorous analysis," the requirements of Rule

23(a) and the proposed class constitutes one of the types of classes enumerated in Rule 23(b).'"

V.W., 236 F. Supp. 3d at 573 (quoting Stinson, 282 F.R.D. at 367).

2. Numerosity

The first element of certification under Rule 23 requires a plaintiff to demonstrate that "the

class is so numerous that joinder of all members is impracticable." Fed. R. Civ. P. 23(a)(1). As

"the bearer[] of the burden to show joinder is impracticable," a plaintiff need only "'show some

evidence of or reasonably estimate the number of class members'" and '"need not show the exact

number.'" Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993) (quotation omitted).

The Court concludes that Plaintiff has satisfied the numerosity requirement. Plaintiff

asserts—and Defendant does not dispute—that Defendant "had many thousands of residential

electricity customers on a variable rate during the relevant class period." Dkt. No. 136-1 at 26;

8

see also Consol. Rail Corp. v. Town of Hyde Park, 47 F.3d 473, 483 (2d Cir. 1995) (holding that

"numerosity is presumed" where a putative class has forty or more members).

3. Commonality

The second element of certification under Rule 23 requires Plaintiff to demonstrate that

there "are questions of law or fact common to the class." Fed. R. Civ. P. 23(a)(2). This element

"does not require all questions of law or fact to be common"; indeed, "even a single common

question will suffice." Sykes v. Mel Harris & Assocs., LLC, 285 F.R.D. 279, 286 (S.D.N.Y.

2012), aff'd 780 F.3d 70 (2d Cir. 2015) (citing Wal-Mart, 564 U.S. at 359). However, the mere

"existence of a 'common contention' is not sufficient; rather, '[t]hat common contention, ... must

be of such a nature that it is capable of classwide resolution—which means that determination of

its truth or falsity will resolve an issue that is central to the validity of each one of the claims in

one stroke.'" Callari v. Blackman Plumbing Supply, Inc., 307 F.R.D. 67, 75 (E.D.N.Y. 2015)

(quoting Wal-Mart, 564 U.S. at 350). "Therefore, what matters is 'the capacity of a classwide

proceeding to generate common answers apt to drive the resolution of the litigation.'" Sykes, 285

F.R.D. at 286 (quoting Wal-Mart, 564 U.S. at 350). "Plaintiffs may satisfy the commonality

requirement with 'significant proof' that a general policy or practice caused the alleged violations

of class members' rights." J.B. v. Onondaga Cnty., 401 F. Supp. 3d 320, 331 (N.D.N.Y. 2019)

(quoting Wal-Mart, 564 U.S. at 353).

Plaintiff has met his burden with respect to the commonality requirement. The entire New

York Sub-Class shares the claim that Defendant made deceptive representations, statements, and

omissions about its variable rate in violation of GBL §§ 349 and 349-d. This common contention

rests on facts that are consistent across the entire class—Plaintiff has provided significant proof

that the contracts and documentation given to Defendant's customers were substantially uniform

9

across the whole class, see Dkt. No. 151-4 at 5; and that the variable rate set by Defendant was

similarly consistent, see id. at 5-6. Accordingly, a classwide proceeding should generate common

answers apt to drive the resolution of the GBL claims. In opposition, Defendant makes a number

of arguments concerning the ultimate merits of Plaintiff's claims, see Dkt. No. 150 at 8-13, but

does not directly address whether this proceeding would generate common answers, see Baffa v.

Donaldson, Lufkin & Jenrette Securities Corp., 222 F.3d 52, 58 (2d Cir. 2000) ("'Nothing in either

the language or history of Rule 23 ... gives a court any authority to conduct a preliminary inquiry

into the merits of a suit in order to determine whether it may be maintained as a class action'")

(quotation omitted).

4. Typicality

Rule 23(a)(3) requires plaintiffs to show that "the claims or defenses of the representative

parties are typical of the claims or defenses of the class." "To establish typicality[,] ... the party

seeking certification must show that 'each class member's claim arises from the same course of

events and each class member makes similar legal arguments to prove the defendant's liability.'"

In re Flag Telecom Holdings, Ltd. Sec. Litig., 574 F.3d 29, 35 (2d Cir. 2009) (quoting Robidoux v.

Celani, 987 F.2d 931, 936 (2d Cir. 1993)). "Typicality requires that 'the disputed issue[s] of law

or fact occupy essentially the same degree of centrality to the named plaintiff's claim as to that of

other members of the proposed class.'" Mazzei v. Money Store, 829 F.3d 260, 272 (2d Cir. 2016)

(quoting Caridad v. Metro-N. Commuter R.R., 191 F.3d 283, 293 (2d Cir. 1999)). "One purpose

of the typicality requirement is 'to ensure that ... the named plaintiff's claim and the class claims

are so interrelated that the interests of the class members will be fairly and adequately protected in

their absence.'" Id. at 272 (quoting Marisol A. ex rel. Forbes v. Giuliani, 126 F.3d 372, 376 (2d

Cir. 1997)). Thus, the typicality requirement is met (1) if the "claims of [the] representative

10

plaintiffs arise from [the] same course of conduct that gives rise to claims of the other class

members," (2) "where the claims are based on the same legal theory," and (3) "where the class

members have allegedly been injured by the same course of conduct as that which allegedly

injured the proposed representative." In re Oxford Health Plans, Inc., 191 F.R.D. 369, 375

(S.D.N.Y. 2000) (citing In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 291 (2d Cir.

1992)).

Here, Plaintiff's GBL claims are typical of the claims of the New York Sub-Class.

Plaintiff's GBL claims arise from the same representations and contractual agreements as the class

claims, depend on the same legal theories as the class claims, and request the same relief as the

class claims. Defendant argues that Plaintiff cannot show typicality because Plaintiff was never

personally a customer of Defendant, and has no actual knowledge the facts underlying Decedent's

individual claim. See Dkt. No. 150 at 13-17. However, Plaintiff is not bringing this claim in his

individual capacity; he was substituted into the action as executor of Decedent's estate, and

accordingly occupies the same position as Decedent did. See Harrow v. Prudential Ins. Co. of

Am., 279 F.3d 244, 248 n.7 (3d Cir. 2002) ("When an executor or administrator continues with a

decedent's claim, she 'stands in the shoes of the decedent'") (quotation omitted). His individual

knowledge and experiences with Defendant are therefore irrelevant to the determination of

whether Decedent's "claims or defenses ... are typical of the claims or defenses of the class." Fed.

R. Civ. P. 23(a)(3).3 Defendant does not address the typicality of Decedent's claims generally.

Thus, the Court finds that Plaintiff has met his burden under Rule 23(a)(3).

3 Defendant's arguments concerning Plaintiff's position as the executor of Decedent's

estate are discussed more throughly in the "Adequacy" section below, which deals more directly

with the ability of the representative party to fairly and adequately protect the interests of the

class.

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5. Adequacy

Rule 23(a)(4) requires that "the representative parties will fairly and adequately protect the

interests of the class." "Under Rule 23(a)(4), adequacy of representation is measured by two

standards. First, class counsel must be 'qualified, experienced and generally able' to conduct the

litigation. Second, the class members must not have interests that are 'antagonistic' to one

another." In re Drexel Burnham Lambert Grp., Inc., 960 F.2d 285, 291 (2d Cir. 1992), cert.

dismissed 506 U.S. 1088 (1993) (quotation omitted). When determining whether the proposed

class representative's interests are antagonistic to the interests of other class members,4 "[a]

conflict or potential conflict alone will not ... necessarily defeat class certification—the conflict

must be 'fundamental.'" Denney v. Deutsche Bank AG, 443 F.3d 253, 268 (2d Cir. 2006)

(quotation omitted). Furthermore, although class representatives cannot satisfy Rule 23(a)(4)'s

adequacy requirement if they have "'so little knowledge of and involvement in the class action that

they would be unable or unwilling to protect the interests of the class against the possibly

competing interests of the attorneys,'" Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d

52, 61 (2d Cir. 2000) (quotation omitted), "'it is well established that "in complex litigations ... a

plaintiff need not have expert knowledge of all aspects of the case to qualify as a class

representative, and a great deal of reliance upon the expertise of counsel is to be expected,"'" In re

NTL, Inc. Securities Litig., No. 02-CIV-3013, 2006 WL 330113, *11 (S.D.N.Y. Feb. 14, 2006)

(quotation omitted).

"There is no per se rule that an estate administrator cannot be a class representative, and

courts have found estate administrators to be adequate class representatives notwithstanding the

4 Defendant does not challenge the competency of Plaintiff's attorneys to represent the

interests of the class members.

12

possible evidentiary and discovery challenges this might cause." Allen v. Holiday Universal, 249

F.R.D. 166, 186 (E.D. Pa. 2008) (citations omitted); see also Jie Zhang v. Wen Mei, Inc., No.

CV14-1647, 2015 WL 6442545,*6 (E.D.N.Y. Oct. 23, 2015); Kamerman v. Ockap Corp., 112

F.R.D. 195, 196 (S.D.N.Y. 1986). However, "a proposed class representative may not satisfy the

adequacy prong if his or her case involves problems that 'could become the focus of

cross-examination and unique defenses at trial, to the detriment of the class.'" Lapin v. Goldman

Sachs & Co., 254 F.R.D. 168, 177 (S.D.N.Y. 2008) (quotation omitted).

Plaintiff will fairly and adequately protect the interests of the New York Sub-Class.

Initially, Plaintiff has demonstrated sufficient knowledge of this case to vigorously represent the

interests of the class and protect those interests against any competing interests of his attorneys.

Plaintiff petitioned the Surrogate's Court for limited letters of administration for the sole purpose

of taking over the instant action on behalf of Decedent's estate, "regularly engaged with counsel,"

sat for a deposition, and "understands that [he is] to remain engaged in each part of litigation,

consider any settlement offers, and have knowledge of the case." Dkt. No. 149-1 at ¶¶ 4, 8.5

Defendant, however, argues that Plaintiff cannot adequately protect the interests of the class due

to his lack of personal knowledge about the facts underlying Decedent's individual claim. See

Dkt. No. 138-1 at 17. Defendant identifies a number of alleged deficiencies in Plaintiff's

knowledge, including: (1) the details of Decedent's enrollment with Defendant, including the

phone call and the various contract documents; (2) what Decedent's state of mind and

expectations were when she enrolled with and subsequently left Defendant's energy program; (3)

Decedent's understanding of the contract terms; and (4) Plaintiff's personal knowledge and

5 This Court may rely on Plaintiff's affidavit to establish Rule 23(a)(4)'s adequacy

requirement. City of Westland Police and Fire Ret. System v. MetLife, Inc., No. 12-CIV-0256,

2017 WL 3608298, *9 (S.D.N.Y. Aug. 22, 2017) (collecting cases).

13

experience in enrolling with Defendant's energy program. See Dkt. No. 138-1 at 13-14.

The Court finds that this alleged lack of knowledge will not become a material issue at

trial to the detriment of the class as a whole. The Court notes that the critical evidence in

Plaintiff's claims—such as the contents of the key documents and the transcript of the phone call

with Decedent—are uncontroverted. Plaintiff's lack of personal experience enrolling with

Defendant's energy program or switching energy providers is wholly irrelevant given that Plaintiff

is here in his capacity as the executor of Decedent's estate, not in an individual capacity. As to

Decedent's state of mind and her subjective expectations, Defendant fails to explain why

testimony on these issues would be necessary at trial. Indeed, as Plaintiff argues, the surviving

GBL claims do not require an individualized examination of the Decedent's subjective state of

mind or expectations; instead, they depend on generalized, objective evidence. See In re Scotts

EZ Seed Litig., 304 F.R.D. 397, 409 (S.D.N.Y. 2015) ("Materiality under Section 349 of the GBL

is an objective inquiry; a deceptive act is defined as one 'likely to mislead a reasonable consumer

acting reasonably under the circumstances.' ... Plaintiffs' GBL claims thus depend on generalized

evidence") (quoting Maurizio v. Goldsmith, 230 F.3d 518, 521 (2d Cir. 2000)).

Defendant also argues that Plaintiff cannot adequately represent the class because his

personal interests as executor and someone who never individually received Defendant's services

"directly contradict[s] those of every class member who deliberately chose [Defendant] in order to

receive EnergyGuard." Dkt. No. 138-1 at 17. Specifically, Defendant argues that, due to his

position as "an executor for a former customer," Plaintiff is "uninterested" in the continued

viability of the EnergyGuard service, id. at 16, and "cannot perceive [EnergyGuard-specific]

avenues for relief because he does not stand in the shoes of a present customer." Dkt. No. 154 at

10. However, the Court finds that even though Plaintiff—as the representative of a former

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customer's estate—might not personally care about the future financial viability of the

EnergyGuard service, this speculative conflict does not rise to the level of a "fundamental"

conflict that would preclude the formation of a class. Denny, 443 F.3d at 268; see also Vogt v.

State Farm Life Ins. Co., 963 F.3d 753, 767 (8th Cir. 2020), cert. denied 141 S. Ct. 2551 (2021)

("[The defendant's] purported conflict is entirely speculative and is insufficient to render class

certification inappropriate because it relies on nothing more than conjecture about how this

lawsuit will affect [the defendant]'s future dealings with current policyholders"); Allen v. Holiday

Universal, 249 F.R.D. 166, 181-82 (E.D. Pa. 2008) (holding that a purported conflict between

former health club members, who seek only to recover damages, and current members, who

potentially have an interest in maintaining their memberships, was "not substantial and [was]

overly speculative and, thus, [did] not preclude a finding of the Plaintiffs' adequacy to represent

the class"); Becher v. Long Island Lighting Co., 164 F.R.D. 144, 152 (E.D.N.Y. 1996) ("While

active and retired employees may have some divergent interests ... [a]ll participants seek the same

'make-whole' relief claimed by the named plaintiffs").

6. Rule 23(b)(2)

Under Rule 23(b)(2), certification is appropriate where "the party opposing the class has

acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or

corresponding declaratory relief is appropriate respecting the class as a whole." Fed. R. Civ. P.

23(b)(2). "The key to the (b)(2) class is 'the indivisible nature of the injunctive or declaratory

remedy warranted—the notion that the conduct is such that it can be enjoined or declared

unlawful only as to all of the class members or as to none of them.'" Wal-Mart Stores, Inc. v.

Dukes, 564 U.S. 338, 360 (2011) (quotation omitted). "In other words, Rule 23(b)(2) applies only

when a single injunction or declaratory judgment would provide relief to each member of the

15

class." Id.

Here, certification of a New York Sub-Class for injunctive relief is appropriate. The

injunctive relief sought by Plaintiff—an order enjoining Defendant from undertaking any further

unlawful conduct under GBL §§ 349 and 349-d with respect to its variable rate—would apply to

all or none of the New York Sub-Class. See Dkt. No. 1 at ¶¶ 57, 65. However, Defendant

correctly notes that Rule 23(b)(2) "does not authorize class certification when each class member

would be entitled to an individualized award of monetary damages." Wal-Mart Stores, Inc., 564

U.S. at 360-61. Here, the GBL claims seek trebled compensatory damages, trebled statutory

damages, and punitive damages, see Dkt. No. 1 at ¶¶ 56, 58, 64, which are far from "incidental to

a final injunctive or declaratory remedy." Amara v. CIGNA Corp., 775 F.3d 510, 520 (2d Cir.

2014). Nevertheless, "'[w]here a plaintiff seeks both declaratory and monetary relief, the court

may separately certify a damages-seeking class under Rule 23(b)(3), and an injunction-seeking

class under Rule 23(b)(2).'" Tomassini v. FCA US LLC, 326 F.R.D. 375, 387 (N.D.N.Y. 2018)

(quotation omitted). Accordingly, the Court certifies a New York Sub-Class solely for injunctive

relief under Rule 23(b)(2), and will address a separate New York Sub-Class for damages under

Rule 23(b)(3), below.

7. Rule 23(b)(3)

A Rule 23(b)(3) class may be certified if "the questions of law or fact common to class

members predominate over any questions affecting only individual members." Fed. R. Civ. P.

23(b)(3). "This 'predominance' requirement is satisfied if: (1) resolution of any material 'legal or

factual questions ... can be achieved through generalized proof,' and (2) 'these [common] issues

are more substantial than the issues subject only to individualized proof.'" In re Petrobras Secs.,

862 F.3d 250, 270 (2d Cir. 2017) (quoting Mazzei v. Money Store, 829 F.3d 260, 272 (2d Cir.

16

2016)). The presence of individualized damage issues cannot, by itself, defeat class certification

under Rule 23(b)(3). Sykes v. Mel S. Harris and Associates LLC, 780 F.3d 70, 81 (2d Cir. 2015).

Once predominance is established, the Court must determine whether "a class action is superior to

other available methods for fairly and efficiently adjudicating" the claims at issue. Fed. R. Civ. P.

23(b)(3). Rule 23(b)(3) lists four factors pertinent to a court's consideration:

(A) the class members' interests in individually controlling the

prosecution or defense of separate actions;

(B) the extent and nature of any litigation concerning the

controversy already begun by or against class members;

(C) the desirability or undesirability of concentrating the litigation

of the claims in the particular forum; and

(D) the likely difficulties in managing a class action.

Fed. R. Civ. P. 23(b)(3). "[M]anageability 'is, by the far, the most critical concern in determining

whether a class action is a superior means of adjudication.'" Sykes, 780 F.3d at 82 (quotation

omitted).

Here, common questions of law and fact predominate in the New York Sub-Class for

Damages. As discussed above, the GBL claims depend on generalized, objective evidence (e.g.,

the standardized customer agreements and representations made to Defendant's customers), and

depend on common questions of law (e.g., whether Defendant's representations were likely to

mislead a reasonable consumer acting reasonably under the circumstances). Although some

individualized issues may arise with respect to calculating damages, they do not predominate over

the issues of law and fact that are common across the class. The Court also finds that a class

action is a superior means of adjudication for these claims. Due to the predominating common

questions of law and fact, the Court will foster economies of time, effort, and expense by

17

prosecuting this action as a class, and avoid the risk of inconsistent or varying adjudications. See

Zhang v. Ichiban Group, LLC, No. 1:17-CV-148, 2021 WL 3030052, *8 (N.D.N.Y. May 21,

2021) ("[A]lthough the damages may differ depending on the class member, the claims all involve

the same policies and practices. Forcing the proposed class members to litigate nearly identical

grievances in individual actions 'would risk disparate results among those seeking redress, ...

would exponentially increase the costs of litigation for all, and would be a particularly inefficient

use of judicial resources'") (quotation omitted).

8. Ascertainability

Under the implied element of ascertainability, "'[a]n identifiable class exists if its members

can be ascertained by reference to objective criteria.'" Id. at *2 (quoting Stinson v. City of N.Y.,

282 F.R.D. 360, 367 (S.D.N.Y. 2012)). Plaintiff has satisfied this requirement. The members of

the class are readily identifiable pursuant to objective criteria, including, but not limited to, the

records maintained by Defendants.

Accordingly, Plaintiff's motion for class certification is granted to the extent it sought class

certification for a New York Sub-Class, and the New York Sub-Class is divided into the New

York Sub-Class for Damages and a New York Sub-Class for Injunctive Relief. Plaintiff's motion

for class certification is otherwise denied. Defendant's motion to deny class certification is

accordingly granted in part and denied in part.

B. Defendant's Motion to Strike Plaintiff's Statement of Additional Material Facts

In its reply brief, Defendant asks the Court to strike portions of Plaintiff's Statement of

Additional Material Facts because those portions "completely disregard [Local Rule 56.1] to the

point that they cannot remotely be considered good faith compliance." Dkt. No. 156 at 8. Local

Rule 56.1 states that the "Statement of Material Facts shall set forth, in numbered paragraphs, a

18

short and concise statement of each material fact about which the moving party contends there

exists no genuine issue."

Although Plaintiff's lengthy Statement of Additional Material Facts does contain some

disputed opinions and legal arguments, the Court does not believe that the drastic measure sought

by Defendant is warranted in this case. Instead, the Court will disregard any improper assertions

and consider the statements in Plaintiff's Statement of Additional Material Facts only to the extent

they are supported by the record. See ScentSational Techs., LLC v. PepsiCo, Inc., No.

13-CV-8645, 2017 WL 4403308, *7 (S.D.N.Y. Oct. 2, 2017) ("The Court will consider the facts

contained in Plaintiff's Rule 56.1 Statement to the extent that they are not conclusory and are

supported by the record"); Ross U. Sch. of Med., Ltd. v. Brooklyn-Queens Health Care, Inc., No.

09-CV-1410, 2012 WL 6091570, *6 (E.D.N.Y. Dec. 7, 2012) ("[C]ourts in this Circuit frequently

deny motions to strike paragraphs in Rule 56.1 statements, and simply disregard any improper

assertions"), report and recommendation adopted in part, 2013 WL 1334271 (E.D.N.Y. Mar. 28,

2013); Mihalik v. Credit Agricole Cheuvreux N.A., Inc., No. 09 CIV. 1251, 2011 WL 3586060, *4

(S.D.N.Y. July 29, 2011) ("[F]ollowing the practice of several other courts in the district, this

Court will disregard any statements that lack support or are otherwise inadmissible"), vacated and

remanded on other grounds, 715 F.3d 102 (2d Cir. 2013).

Accordingly, Defendant's motion to strike Plaintiff's Statement of Additional Material

Facts is denied.

C. Defendant's Motion for Summary Judgment

1. Standard of Review

A court may grant a motion for summary judgment only if it determines that there is no

genuine issue of material fact to be tried and that the facts as to which there is no such issue

19

warrant judgment for the movant as a matter of law. See Chambers v. TRM Copy Ctrs. Corp., 43

F.3d 29, 36 (2d Cir. 1994) (citations omitted). When analyzing a summary judgment motion, the

court "'cannot try issues of fact; it can only determine whether there are issues to be tried.'" Id. at

36-37 (quotation and other citation omitted). Substantive law determines which facts are

material; that is, which facts might affect the outcome of the suit under the governing law. See

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 258 (1986). In assessing the record to determine

whether any such issues of material fact exist, the court is required to resolve all ambiguities and

draw all reasonable inferences in favor of the nonmoving party. See Chambers, 43 F.3d at 36

(citing Anderson, 477 U.S. at 255) (other citations omitted). Irrelevant or unnecessary facts do not

preclude summary judgment, even when they are in dispute. See Anderson, 477 U.S. at 258.

The moving party bears the initial burden of establishing that there is no genuine issue of

material fact to be decided. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). With respect

to any issue on which the moving party does not bear the burden of proof, it may meet its burden

on summary judgment by showing that there is an absence of evidence to support the nonmoving

party's case. See id. at 325. Once the movant meets this initial burden, the nonmoving party must

demonstrate that there is a genuine unresolved issue for trial. See Fed. R. Civ. P. 56(e). A

genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a

verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

2. Plaintiff's Breach of Contract Claim

Defendant argues that it is entitled to summary judgment on Plaintiff's breach of contract

claim because Plaintiff cannot, as a matter of law, show that there is a triable issue of fact. See

Dkt. No. 137-15 at 18-30. Specifically, Defendant argues that it complied with the plain and

unambiguous language of its contract when it set the variable rate, see id. at 24-25, and that

20

Plaintiff cannot establish that Defendant abused its discretion when setting the variable rate, see

id. at 29. In opposition, Plaintiff argues that there are questions of fact concerning whether

Defendant (1) breached the contract's promise to "charge 'competitive' rates that reflect market

costs" when it set the variable rates "substantially higher than [the] utilities[,] who are [the]

primary competitors in the electricity market," Dkt. No. 152 at 19, 22; and (2) violated "the terms

of the contract" by charging "additional amounts to customers for the EnergyGuard service" when

"[n]othing in the contract permits Defendant to charge extra for the EnergyGuard service," id. at

20-21.

"To prevail on a breach-of-contract claim in New York, a plaintiff must prove: '(1) the

existence of a contract, (2) performance by the party seeking recovery, (3) nonperformance by the

other party, and (4) damages attributable to the breach.'" Moreno-Godoy v. Kartagener, 7 F.4th

78, 85 (2d Cir. 2021) (quotation omitted). "'[T]he initial interpretation of a contract "is a matter of

law for the court to decide."'" Int'l Multifoods Corp. v. Commercial Union Ins. Co., 309 F.3d 76,

83 (2d Cir. 2002) (quotations omitted). It is well accepted that courts should construe contracts

according to the parties' intent as derived from the contracts' unambiguous terms. "Whether or not

a writing is ambiguous is a question of law to be resolved by the courts." W.W.W. Assocs., Inc.,

77 N.Y.2d at 162 (citation omitted). "When an agreement is unambiguous on its face, it must be

enforced according to the plain meaning of its terms." Lockheed Martin Corp. v. Retail Holdings,

N.V., 639 F.3d 63, 69 (2d Cir. 2011) (citing South Rd. Assocs., LLC v. IBM, 4 N.Y.3d 272

(2005)). The parties' intent is derived "'from the plain meaning of the language employed' in the

agreements," Crane Co. v. Coltec Indus., Inc., 171 F.3d 733, 737 (2d Cir. 1999) (quotation

omitted), when the agreements are "read as a whole," W.W.W. Assocs., Inc., 77 N.Y.2d at 162.

Courts must avoid "interpretations that render contract provisions meaningless or superfluous."

21

Manley v. AmBase Corp., 337 F.3d 237, 250 (2d Cir. 2003) (citations omitted).

Here, after drawing all reasonable inferences in Plaintiff's favor as the nonmoving party,

the Court concludes that there is no genuine issue of material fact as to whether Defendant

breached the contract when setting the variable rate. Initially, nothing in the contract precludes

Defendant from including the cost of the EnergyGuard Program in the variable rate. The contract

explicitly states that the variable rate would reflect multiple factors, including Defendant's costs,

expenses and margins. Dkt. No. 137-10 at 3. The EnergyGuard Program is part of the services

provided to Plaintiff under the contract, and the expense of running it would clearly fall within

Defendant's "costs [and] expenses." Id. Plaintiff nevertheless argues that certain statements in the

contract required Defendant to offer its EnergyGuard service at no extra cost and that any

additional charges for that service would constitute a breach of the contract. See Dkt. No. 151 at

20-21. The specific language that Plaintiff relies on is (1) a statement in the Welcome Letter that,

"[f]or being [Defendant's] electricity customer," Defendant would "include" the EnergyGuard

program, Dkt. No. 137-10 at 2, and (2) a statement made during the TPV call that Plaintiff would

"automatically receive" the EnergyGuard program, Dkt. No. 137-9 at 7. However, a plain reading

of this language reveals only that Defendant automatically includes EnergyGuard with its

electricity services—not that it would do so free of charge.

Furthermore, Plaintiff cannot create a triable issue of fact by showing that Defendant's

rates are not "competitive" compared solely against those of the incumbent utilities. Although

Defendant was obligated to provide a "competitive market based monthly variable rate," Dkt. No.

137-9 at 7, and to "exercise [its] discretion in good faith" when doing so, Richards v. Direct

Energy Services, LLC, 915 F.3d 88, 99 (2d Cir. 2019), the contract here is "replete with language

giving [Defendant] discretion to set prices based on factors other than the rates charged by

22

traditional electric utility companies," Brown v. Agway Energy Services, LLC, 822 Fed. Appx.

100, 103 (3d Cir. 2020). To allow Plaintiff to measure the competitiveness of Defendant's rates

solely against the regulated rates of the incumbent utilities would, "in effect," make the utility's

rates "binding on private electricity suppliers"—an outcome in direct conflict with "the entire

point of electricity deregulation," which was "to allow the market, rather than [a Public Utilities

Regulatory Authority], to determine rates." Richards, 915 F.3d at 99;6 see also Brown, 822 Fed.

Appx. at 103 (holding that "[t]he fact that [Defendant] provides [EnergyGuard] to [the plaintiff]

undermines [the] comparison of [Defendant]'s prices to that of a traditional electric utility

supplier, which may not provide such a service"). Thus, to determine whether Defendant's rates

were competitive, the proper comparison must be against the rates charged by Defendant's ESCO

competitors.

Here, Defendant has met its initial burden of establishing that there is no genuine issue of

material fact to be decided. Defendant submits the report of its expert, Dr. Aron, comparing

Defendant's rates to the rates charged by other New York ESCO participants in the market using

publicly available "historical pricing data reported quarterly by ESCOs that offer no

energy-related value-added services." Dkt. No. 137-12 at ¶ 109. In certain utility territories from

January 2013 through February 2015—where Defendant was not offering EnergyGuard as part of

its energy service—Dr. Aron found that Defendant's "variable rate [wa]s never the highest

variable rate charged" and, sixty-three percent of the time, Defendant's variable rate "was below

the median rate" offered by other ESCOs. Id. at ¶ 114. For the remainder of utility territories

6 Indeed, in Richards, the Second Circuit characterized the plaintiff's breach of contract

claim—which asserted that a private electricity supplier "must have abused its discretion because

[its] variable rate was higher" than the public utility rate—as "near-frivolous." Richards, 915 F.3d

at 99.

23

during the relevant time period, where Defendant was offering EnergyGuard, Dr. Aron again

concluded that Defendant's variable rate was "never the highest rate in any utility territory in any

quarter" and, ninety-eight percent of the time, Defendant's variable rate was "below the median

rate" offered by other ESCOs. Dkt. No. 137-12 at ¶ 120. It is worth stressing that, for the latter

comparison, Defendant's service included an energy-related value-added service, and its variable

rates were still below the median rates offered by ESCOs that offer no such value-added service

ninety-eight percent of the time.

Plaintiff's expert, Dr. Felder, does not attempt to make his own comparison between

Defendant's variable rates and the variable rates of other ESCOs. Instead, Dr. Felder argues that

Dr. Aron has not established Defendant's rates were "competitive" because "it defies common

sense to claim that a particular vendor ... is competitive if there are on average numerous

competitors with lower prices." Dkt. No. 151-3 at ¶ 80. Dr. Felder, however, offers no support

for this strained interpretation of "competitive"—especially in light of the wide discretion afforded

to Defendant in setting the variable rate—nor does Dr. Felder account for Defendant's unique

position, in comparison to other ESCOs, as a provider of an additional energy-related value-added

service. Thus, Dr. Felder has not demonstrated that there is a genuine issue of material fact

concerning the competitiveness of Defendant's variable rates.

Accordingly, Defendant's motion for summary judgment on Plaintiff's breach of contract

claim is granted.

3. Plaintiff's N.Y. General Business Law §§ 349 and 349-d Claims

a. Skidmore Deference

Defendant argues that, under the Skidmore Doctrine, this Court should defer to the

NYSPC's "definitive determination [that] ESCO variable rates are 'just and reasonable,'" Dkt. No.

24

156 at 15, and dismiss Plaintiff's General Business Law §§ 349 and 349-d claims as a matter of

law because "[b]oth counts are based on the false premise that [Defendant] misrepresented its

pricing components and did not comply with the disclosure provisions ... for ESCO contracts."

Dkt. No. 137-1 at 18. In opposition, Plaintiff argues that Skidmore "deference only applies to the

interpretation of a statute the agency in question is authorized to administer." Dkt. No. 152 at 11.

Plaintiff asserts that the NYSPC order did not interpret or apply General Business Law §§ 349 or

349-d with respect to Plaintiff's claims and that "[t]here is no dispute here regarding the meaning

of any statutes." Id. Plaintiff also argues that, in any event, the NYSPC order "did not find that

Defendant's rates are in fact reasonable in relation to EnergyGuard's costs" and "never held that

Defendant could not be sued for charging variable rates in violation of its Customer Agreement

and in contravention of its representations that it would charge competitive rates that reflect its

actual costs." Id. at 11, 12.

In Skidmore v. Swift & Co., 323 U.S. 134 (1944), the Supreme Court held that "an agency's

interpretation may merit some deference whatever its form, given the 'specialized experience and

broader investigations and information' available to the agency, and given the value of uniformity

in its administrative and judicial understandings of what a national law requires." United States v.

Mead Corp., 533 U.S. 218, 234 (2001) (internal citation omitted) (quoting Skidmore, 323 U.S. at

139). "Skidmore deference is a 'more limited standard of deference' than Chevron deference," In

re Bernard L. Madoff Inv. Securities LLC, 779 F.3d 74, 82 (2d Cir. 2015) (quoting In re New

Times Securities Services, Inc., 371 F.3d 68, 83 (2d Cir. 2004)), that generally applies to agency

interpretations such as "policy statements, agency manuals, and enforcement guidelines, all of

which lack the force of law." Christensen v. Harris County, 529 U.S. 576, 587 (2000). Such

interpretations "are 'entitled to respect' under [the] decision in Skidmore ... but only to the extent

25

that those interpretations have the 'power to persuade.'" Christensen, 529 U.S. at 587 (quoting

Skidmore, 323 U.S. at 140).

In determining whether to defer to an agency's interpretation under Skidmore, courts

generally first determine whether the statutory language at issue is ambiguous and, where the

statute is unambiguous, a court may conclude "that Skidmore deference is inappropriate or

unnecessary." Catskill Mountains Chapter of Trout Unlimited, Inc. v. Envtl. Protec. Agency, 846

F.3d 492, 509 (2d Cir. 2017).7 Skidmore then "requires consideration of an agency's

'thoroughness, ... the validity of its reasoning, its consistency with earlier and later

pronouncements, and all those factors which give it power to persuade.'" Chao v. Russell P. Le

Frois Builder, Inc., 291 F.3d 219, 227-28 (2d Cir. 2002) (quoting Skidmore, 323 U.S. at 140).

The Court declines to apply Skidmore deference to the NYSPC order. Not only does

Defendant fail to identify an ambiguity in the meaning of a statute, the NYSPC orders themselves

are not relevant to Plaintiff's GBL §§ 349 and 349-d claims. Indeed, those orders—to the extent

they were provided by the parties—did not "unequivocal[ly] endorse[]" Defendant's "business

model," Dkt. No. 137-15 at 7; nor did they determine Defendant could never engage in deceptive

acts or practices in the marketing of its EnergyGuard service. Rather, the NYSPC orders merely

held out Defendant's EnergyGuard service as an example of an energy-related value-added

product or service that an ESCO could permissibly offer at a price above the utility default supply

rate, "without the requirement of being paired with a compliant guaranteed savings, fixed-rate, or

renewably sourced product." Dkt. No. 137-5 at 21. Such a determination does not preclude a

7 Alternatively, a court may choose to "engage in Skidmore analysis without answering

this threshold question by considering the statutory text as one of several factors relevant to

determining whether the agency interpretation has the 'power to persuade.'" Catskill Mountains,

846 F.3d at 509 (quoting Skidmore, 323 U.S. at 140).

26

material question of fact as to whether Defendant engaged in deceptive acts or practices in the

marketing of its energy service by "charg[ing] an unconscionably high rate" and making

"misrepresentations ... with regard to the rate being market based ... for the purpose of inducing

consumers to sign up." Dkt. No. 1 at ¶ 58.8

b. Are Plaintiff's GBL Claims Duplicative

Defendant argues that Plaintiff's GBL claims must be dismissed as duplicative of

Plaintiff's breach of contract claim because the loss alleged under the GBL claims is

indistinguishable from the loss alleged under the breach of contract claim. Dkt. No. 137-1 at 30.

Defendant relies on Spagnola v. Chubb Corp., 574 F.3d 64 (2d Cir. 2009), which dismissed a

GBL § 349 claim where the plaintiff alleged damages in the amount of the purchase price of his

contract, but failed to allege that the defendants had denied him the services for which he had

contracted. See Spagnola, 574 F.3d at 74.

However, as Plaintiff argues, this case is distinguishable from Spagnola. Here, Plaintiff

has alleged that, "[a]s a direct and proximate result of Defendant's unlawful deceptive acts and

practices," Plaintiff and the proposed class "suffered and continue[d] to suffer an ascertainable

loss of monies based on the difference in the rate they were charged versus the rate they would

have been charged had Defendant charged a rate based on market conditions and the factors

specified in the [contract]." Dkt. No. 1 at 16-17. Plaintiff's allegation of injury in the "form of an

overpayment or 'price premium,' whereby [he] pays more than she would have but for the

8 The Court notes that Defendant does not claim that the NYSPC orders are entitled to

Chevron deference. See United States v. Mead Corp., 533 U.S. 218, 229-31 (2001) (holding that

Chevron deference generally applies to interpretations issued pursuant to the agency's exercise of

its formal rule-making authority). To the extent Chevron deference might be more appropriate for

the NYPSC order—which was issued according to the NYSPC's formal rule-making authority

under the New York Public Service Law and involved a formal adjudication—the application of

such deference would be inappropriate for the same reasons as Skidmore deference.

27

deceptive practice," is sufficient to establish he suffered injury under the GBL. Donnenfeld v.

Petro, Inc., 333 F. Supp. 3d 208, 223 (E.D.N.Y. 2018); see also Orlander v. Staples, Inc., 802

F.3d 289, 302 (2d Cir. 2015). It is not a requirement under New York law that "any monetary

GBL injury must be independent of alleged breach of contract damages." Donnenfeld, 333 F.

Supp. 3d at 224; see also Nick's Garage, Inc. v. Progressive Casualty Ins. Co., 875 F.3d 107, 125

(2d Cir. 2017).

Accordingly, Defendant's motion for summary judgment on Plaintiff's GBL §§ 349 and

349-d claims is denied.

D. Defendant's Motion to Strike Plaintiff's Proposed Expert

Defendant argues that the opinion of Plaintiff's expert, Dr. Felder, should be deemed

inadmissible under Rule 702 of the Federal Rules of Evidence. See Dkt. No. 137-15 at 31-43;

Dkt. No. 156 at 18-22. Broadly stated, Defendant asserts that Dr. Felder's report "presents

numerous opinions that are completely unsupported" and, therefore, his methodology lacks a

reliable foundation. Dkt. No. 137-15 at 34. In opposition, Plaintiff argues that Dr. Felder's

opinions are reliable and, "[e]ven if there were merit to any of Defendant's contentions, they

would constitute '[d]isputes regarding ... an expert's use or application of [his] methodology' and

would accordingly 'go to the weight, not the admissibility of [Dr. Felder's] testimony.'" Dkt. No.

152 at 38 (quotation omitted).

The admissibility of expert testimony is governed by Rule 702 of the Federal Rules of

Evidence. That Rule provides as follows:

A witness who is qualified as an expert by knowledge, skill,

experience, training, or education may testify in the form of an

opinion or otherwise if: (a) the expert's scientific, technical, or other

specialized knowledge will help the trier of fact to understand the

evidence or to determine a fact in issue; (b) the testimony is based

28

on sufficient facts or data; (c) the testimony is the product of

reliable principles and methods; and (d) the expert has reliably

applied the principles and methods to the facts of the case.

Fed. R. Evid. 702. In reviewing the admissibility of expert testimony, "the district court has a

'gatekeeping' function under Rule 702—it is charged with 'the task of ensuring that an expert's

testimony both rests on a reliable foundation and is relevant to the task at hand.'" Amorgianos v.

Nat'l R.R. Passenger Corp., 303 F.3d 256, 265 (2d Cir. 2002) (quoting Daubert v. Merrell Dow

Pharmaceuticals, Inc., 509 U.S. 579, 597 (1993)). The rule set forth in Daubert applies to

scientific knowledge, as well as technical or other specialized knowledge. See Kumho Tire Co.,

Ltd. v. Carmichael, 526 U.S. 137, 141 (1999). As the Second Circuit has explained:

In fulfilling this gatekeeping role, the trial court should look to the

standards of Rule 401 in analyzing whether proffered expert

testimony is relevant, i.e., whether it has any tendency to make the

existence of any fact that is of consequence to the determination of

the action more probable or less probable than it would be without

the evidence. Next, the district court must determine whether the

proffered testimony has a sufficiently reliable foundation to permit

it to be considered. In this inquiry, the district court should consider

the indicia of reliability identified in Rule 702, namely, (1) that the

testimony is grounded on sufficient facts or data; (2) that the

testimony is the product of reliable principles and methods; and (3)

that the witness has applied the principles and methods reliably to

the facts of the case. In short, the district court must make certain

that an expert, whether basing testimony upon professional studies

or personal experience, employs in the courtroom the same level of

intellectual rigor that characterizes the practice of an expert in the

relevant field.

Amorgianos, 303 F.3d at 265-66 (internal alterations, quotations, and citations omitted).

"In undertaking this flexible inquiry, the district court must focus on the principles and

methodology employed by the expert, without regard to the conclusions the expert has reached or

the district court's belief as to the correctness of those conclusions." Amorgianos, 303 F.3d at 266

(citation omitted). "In deciding whether a step in an expert's analysis is unreliable, the district

29

court should undertake a rigorous examination of the facts on which the expert relies, the method

by which the expert draws an opinion from those facts, and how the expert applies the facts and

methods to the case at hand." Id. at 267. "A minor flaw in an expert's reasoning or a slight

modification of an otherwise reliable method will not render an expert's opinion per se

inadmissible." Id. "The judge should only exclude the evidence if the flaw is large enough that

the expert lacks good grounds for his or her conclusions." Id. (quotation and other citation

omitted). Accordingly, "the rejection of expert testimony is the exception rather than the rule."

Fed. R. Evid. 702, Advisory Committee's Note; see also E.E.O.C. v. Morgan Stanley & Co., 324

F. Supp. 2d 451, 456 (S.D.N.Y. 2004); U.S. Info. Sys., Inc. v. Int'l Bhd. of Elec. Workers Local

Union No. 3, 313 F. Supp. 2d 213, 226 (S.D.N.Y. 2004). "This principle is based on the

recognition that 'our adversary system provides the necessary tools for challenging reliable, albeit

debatable, expert testimony.'" Melini v. 71st Lexington Corp., No. 07-CV-701, 2009 WL 413608,

*5 (S.D.N.Y. Feb. 3, 2009) (quoting Amorgianos, 303 F.3d at 267).

Here, Dr. Felder's opinion is inadmissible under Rule 702 because its conclusions are not

the product of reliable principles or grounded in sufficient data. Dr. Felder's report primarily

consists of a calculation of the amount of money Defendant is alleged to have overcharged its

customers, based on a comparison between Defendant's revenues and the cost to Defendant from

purchasing electricity from the relevant public utilities. See Dkt. No. 137-4 at 10-18. The

soundness of this calculation rests on Plaintiff's and Dr. Felder's argument that the proper

comparison for Defendant's variable rate is solely the rates of the incumbent utilities. However, as

addressed in the breach of contract section above, allowing Plaintiff to make this comparison

would be in direct conflict with "the entire point of electricity deregulation." Richards, 915 F.3d

at 99. Dr. Felder's report does not attempt to make any comparison against the rates charged by

30

Defendant's ESCO competitors. Thus, Dr. Felder's opinion and report—which rests upon an

unreliable methodology and insufficient data—is "simply inadequate to support the conclusions

reached." Amorgianos, 303 F.3d at 266.

Accordingly, Defendant's motion to strike Plaintiff's proposed expert, Dr. Felder, is

granted.

IV. CONCLUSION

After carefully reviewing the entire record in this matter, the parties' submissions and the

applicable law, and for the above-stated reasons, the Court hereby

ORDERS that Plaintiff's motion for class certification (Dkt. No. 136) is GRANTED in

part and DENIED in part;9 and the Court further

ORDERS that the New York Sub-Class is divided into a New York Sub-Class for

Damages and a New York Sub-Class for Injunctive Relief; and the Court further

ORDERS that Plaintiff's motion to strike Defendant's motion to deny class certification

(Dkt. No. 139) is DENIED; and the Court further

ORDERS that Defendant's motion to deny class certification (Dkt. No. 138) is

GRANTED in part and DENIED in part; and the Court further

ORDERS that Defendant's motion for summary judgment (Dkt. No. 137) is GRANTED

in part and DENIED in part; and the Court further

ORDERS that Defendant's motion to strike Plaintiff's proposed expert (Dkt. No. 137) is

GRANTED; and the Court further

ORDERS that Defendant's motion to strike Plaintiff's Statement of Additional Material

9 Plaintiff's motion is granted as to the New York Sub-Class.

31

Facts (Dkt. No. 156) is DENIED; and the Court further

ORDERS that the Clerk of the Court shall serve a copy of this Memorandum-Decision

and Order on the parties in accordance with the Local Rules.

IT IS SO ORDERED. ,

Dated: February 2, 2022 J), 4 ie L 0 □ a

Albany, New York Le Z OD

Mae A. D’ Agostino”

U.S. District Judge

32