Brito v. Major Energy Electric Services, LLC
January 14, 2021
On January 8, 2021, the U.S. District Court for the District of New York issued an opinion (found here) in Brito v. Major Energy Electric Services, LLC, No. 20-cv-230, 2021 WL 75130 (D. Md. Jan. 8, 2021), dismissing a putative class action based on Brito’s enrollment with Major Energy in which Brito attempted to assert claims for violation of the Maryland Consumer Protection Act, unjust enrichment, fraud, and negligent misrepresentation. Brito alleged that, although a sales representative solicited her at her residence, she never agreed to enroll with Major Energy and her subsequent enrollment was fraudulent.
Major Energy moved for dismissal under Rule 12 and Section 3 of the Federal Arbitration Act, 9 U.S.C. § 3. Major Energy offered evidence that it mailed Brito an enrollment letter and its terms and conditions, which allowed Brito to rescind her enrollment or later cancel the contract without penalty, and that Brito did not respond to that letter. Major Energy also offered evidence that, prior to the expiration of Brito’s twelve-month fixed-rate term, it mailed Brito another copy of the terms and conditions along with a renewal letter, advising that she would be charged a variable rate at the end of her fixed-rate period. The terms and conditions sent with both the enrollment and renewal letters included a mandatory arbitration provision and a class action waiver. Brito remained a customer of Major Energy for nearly two years before switching to a different electricity supplier.
The Court found that Brito was bound by the arbitration provision and class action waiver. Although Brito alleged that she did not consent to her enrollment with Major Energy or knowingly agree to the terms and conditions, the Court held that Brito accepted the terms and conditions “when, by her own admission, she learned that Major was supplying her with electricity” but “took no action in response for an undue period.” Significantly, Brito failed to properly “rebut the presumption that she was put on notice of the change in her electricity supplier through her receipt of the [terms and conditions] in the mail, together with the Enrollment Letter and the Renewal Letter.” The Court also reasoned that, although Brito had pled that she “learned, through her electric bill, that Major was her electricity supplier,” she did “not go on to allege that after that discovery, she contacted Major to terminate her service.”
Following Fourth Circuit authority holding that dismissal is appropriate when all of the issues presented in a lawsuit are arbitrable, the Court dismissed Brito’s claims because they all fell within the scope of the arbitration provision set forth in Major Energy’s terms and conditions.
This Eckert Seamans Energy Supplier Litigation Blog is intended to keep readers current on matters affecting businesses and is not intended to be legal advice. If you have any questions regarding the above, please contact Tom Sanchez (tsanchez@eckertseamans.com) at 412.566.6128, or any other attorney at Eckert Seamans with whom you have been working.