September 16, 2019
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Electricity Maine lawsuit on hiatus as parties hold settlement talks

Darren Fishell | BDN
Darren Fishell | BDN
Power lines deliver electricity through Enfield in this September 2017 file photo.

A potential class action lawsuit involving Electricity Maine, one of the state’s largest private electricity sellers, is on a 75-day hiatus as the parties pursue settlement discussions, according to a document filed in federal court.

The case alleges that between 2011 and 2014, the Auburn-based Electricity Maine enrolled nearly 200,000 Maine households and small businesses in its electricity-supply services with the promise of substantial cost savings.

The complex case involves more than 220 filings, including amended complaints by the plaintiffs, affidavits supporting the plaintiffs and documents refuting their claims by Electricity Maine and other defendants. The hold on actions on the three-year-old case could bring it a step closer to being settled.

The plaintiffs allege that instead of decreasing consumers’ electricity bills, Electricity Maine, using fraud and deceptive practices, cost Maine ratepayers at least $35 million. In a separate case, Maine’s utility regulator asked Electricity Maine in July 2018 to explain its actions.

The case was filed in U.S. District Court in November 2016, and seeks class action status, a jury trial and compensatory damages. In a July filing, all parties in the case asked the court to hold all deadlines and further activity for 75 days “while the parties pursue settlement discussions.”

One lawyer involved in the case said settlement discussions are confidential and those involved in the case cannot comment on them.

The plaintiffs listed in the filing are three Mainers and a South Portland acupuncture clinic, who filed on behalf of themselves and others in the class action. The defendants are Electricity Maine, Provider Power, Spark Holdco and the company’s founders, Kevin Dean and Emile Clavet.

Electricity Maine is a retail electricity supplier that serves as an option to the standard offer electricity prices from Central Maine Power and Emera Maine.

The company was founded in 2011, then sold to Houston, Texas, energy giant Spark Energy in 2016 for $28 million. At the time Electricity Maine was owned by Provider Power and had about 125,000 customers in Maine and New Hampshire.

Separately, in July 2018 Electricity Maine was asked to explain its actions to the Maine Public Utilities Commission, which regulates electric and other utilities.

[State confirms home power customers spent $77M they didn’t need to]

The joint filing noted that three motions are pending before the district court. They are the plaintiffs’ motion to certify the case as a class action, the plaintiffs’ motion to exclude expert testimony and the defendants’ motion to dismiss the case and compel arbitration.

The parties to the case attended a settlement conference on July 1 and 2 with U.S. Magistrate Judge John C. Nivison in Bangor.

“As a result of that conference, the parties have made progress toward a settlement that would fully and finally resolve the lawsuit,” the filing said.

To reach a settlement agreement among all the parties, a separate agreement must first be reached between Electricity Maine and Spark and defendants Provider Power, Clavet and Dean. Electricity Maine and Provider Power said they require additional time to work out the terms of their agreement.

Before the 75 days is up, the parties will either report to the court that they have agreed to resolve the lawsuit, which would require approval by the court, or they would report that they have not reached an agreement and request more time or for rulings on the three pending motions.

In a separate case, the court of appeals on July 10 agreed with an earlier ruling by the district court regarding an insurance company and Electricity Maine.

Zurich America Insurance Co., which insures Electricity Maine, said it should not be obligated to defend Electricity Maine in the proposed class action lawsuit because the damages by the plaintiffs were not “bodily injury” and thus didn’t qualify under the insurance policy.

Both courts took a broad interpretation of Maine law and said Zurich America needed to defend Electricity Maine, meaning it had to pick up some fees if the proposed class action lawsuit is certified and moves forward.

Larry Schiffer, an attorney with Squire Patton Boggs in New York who specializes in insurance, said the ruling will not affect ratepayers.

“This ruling says that the insurance policy Electricity Maine took out has to pay its share of the defense,” Schiffer said in an article for the National Law Review. “The ruling makes no decision on the putative class action suit itself.”

 



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