Glikin v. Major Energy Electric Services LLC

Background

Angela Glikin brought a proposed class action against Major Energy Electric Services, LLC. She alleged that the company deceived customers and charged them electricity rates that were consistently and significantly higher than public-utility rates, despite being advertised as competitive. Her claims included breach of contract, breach of the implied covenant of good faith and fair dealing, violations of New York and Maryland consumer-protection statutes, unfair and deceptive acts and practices, fraud by concealment, and unjust enrichment.

Glikin’s original agreement with Entrust Energy provided for a fixed electricity rate during an initial term and then a variable-rate plan that could renew monthly. The agreement also required at least 30 days’ advance written notice of any material change and stated that venue for a lawsuit enforcing or interpreting the agreement would lie exclusively in Maryland. The opinion states that the original agreement purportedly did not contain a mandatory arbitration clause or class-action waiver.

Entrust Energy later assigned the agreement to National Gas & Electric, LLC (NG&E), which told Glikin that there would be no changes to the agreement’s terms and conditions. NG&E allegedly later sent a letter that purportedly included new terms requiring individual arbitration and waiving class actions. Glikin said she never received that letter and was never otherwise told that her agreement included those provisions. The agreement was later assigned to Major Energy.

Motion to Stay for Arbitration

Major Energy asked the court to stay, or pause, the case under Section 3 of the Federal Arbitration Act. The court explained that a stay requires a valid agreement to arbitrate and that the party seeking the stay bears the burden of showing that the dispute is subject to such an agreement. Whether the parties formed an arbitration agreement was for the court to decide rather than an arbitrator.

Applying Maryland contract law, the court held that Major Energy had not shown that the arbitration provision became part of Glikin’s contract. A contract modification requires mutual assent, and the original agreement required advance written notice of any material change. The court found that NG&E’s July 21, 2016, letter did not adequately warn Glikin that it was changing the agreement to add arbitration and a class-action waiver. The letter instead stated that doing nothing would automatically renew the account under a month-to-month variable-rate plan, while NG&E had separately said that there would be no changes to the existing terms.

The court therefore denied the motion to stay the action in favor of arbitration. In the conclusion, the court also described this ruling as denying the motion to compel arbitration.

Motion to Transfer Venue

Major Energy alternatively sought transfer under 28 U.S.C. § 1404(a), which permits a federal court to move a civil case to another federal district for convenience and in the interest of justice. The court held that the parties were bound by the Maryland forum-selection clause in Glikin’s contract.

Because of that clause, Glikin had to show that transfer to Maryland was unwarranted. The court found that she had not met that burden. Her only stated argument was that Major Energy would not be prejudiced by litigating in New York because it was based there and allegedly had a home-field advantage. The court concluded that she had not identified public-interest factors sufficient to overcome the valid forum-selection clause.

Disposition and Effect

The motion to stay was DENIED, and the motion to transfer venue was GRANTED. The Clerk was directed to transfer the action to the United States District Court for the District of Maryland and terminate the motion. The opinion resolved the arbitration and venue issues; it did not decide the merits of Glikin’s allegations concerning electricity rates or consumer-law violations.