Lane et al v. Direct Energy Services, LLC
ORDER: The Court GRANTS Defendant Direct Energy Services' Motion to Dismiss (Doc. 57 ) and Plaintiffs Julie Lane and Richard Lane's ICFA unfairness claim is DISMISSED with prejudice due to futility. The Court DIRECTS the Clerk of Court to close the case on the Court's docket. Signed by Judge Stephen P. McGlynn on 4/26/2021. (anb2)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
JULIE LANE and RICHARD LANE,
Case No. 19-CV-00674-SPM
DIRECT ENERGY SERVICES, LLC,
MEMORANDUM AND ORDER
McGLYNN, District Judge:
On June 21, 2019, Plaintiffs Julie Lane and Richard Lane brought this action,
which now alleges a singular claim for unfairness against Defendant Direct Energy
Services, LLC’s (“DES”) under the Illinois Consumer Fraud and Deceptive Business
Practices Act (“ICFA”) (Doc. 56). Earlier, the Lanes also alleged claims against DES
for deceptive practices under ICFA, breach of contract, and breach of implied
covenant of good faith and fair dealing, but the Court dismissed those claims by
order after DES filed a memorandum in opposition to the Lanes’ motion for leave to
file an amended complaint (Docs. 44, 49, 55). Pending before the Court is DES’s
Motion to Dismiss and memorandum in support of dismissal (Docs. 57, 58), which
states that ICFA’s safe harbor provision bars the Lanes’ ICFA unfairness claim.
“To survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to state a claim to relief that is plausible on its face.” McCoy
v. Iberdrola Renewables, Inc., 760 F.3d 674, 685 (7th Cir. 2014) (citing Ashcroft v.
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Iqbal, 556 U.S. 662, 678 (2009), quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007)).
Before addressing the safe harbor provision, the Lanes claim that the law-ofthe-case doctrine prevents DES from bringing this new safe harbor argument since
it has already had the opportunity to bring the argument in its previous
memorandum in opposition to the Lanes’ motion for leave to file an amended
complaint, which used the same standards as a FED. R. CIV. P. 12(b)(6) motion to
dismiss. In this way, the Lanes paint DES’s Motion to Dismiss as a motion for
reconsideration. But, “as a prudential doctrine, the law of the case doctrine is
discretionary rather than mandatory.” Boyer v. BNSF Ry. Co., 824 F.3d 694, 710
(7th Cir. 2016) (collecting cases). So, while this Court does not generally consider
arguments not presented, or grant reconsideration of issues already decided, sound
practice and an interest in judicial economy dictates that this Court exercise its
discretion and consider the newly–raised safe harbor argument.
The ICFA safe harbor provision “bars a plaintiff’s claim when (1) ‘a regulatory
body or officer [is] operating under statutory authority,’ and (2) ‘the action . . . at
issue is ‘specifically authorized by laws administered’ by the regulatory body.”
Aliano v. Louisville Distilling Co., LLC, 115 F. Supp. 3d 921, 932 (N.D. Ill. 2015)
(citing Price v. Philip Morris, Inc., 848 N.E.2d 1, 36 (Ill. 2005). The Lanes use the
Electric Service Customer Choice and Rate Relief Law of 1997 (“the Act”) to claim
unfairness under ICFA by alleging that DES offended the public policy goals of the
Act when providing residential electricity services to them. The Lanes acknowledge
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in their Second Amended Complaint (“SAC”) that the Act deregulated the market
for retail residential electricity supply and also gave the Illinois Commerce
Commission statutory authority to promulgate regulations that protect consumers
and their financial interests (Doc. 56, pp. 7-8). The SAC also states that the
Commission then promulgated, and the Illinois legislature adopted, consumer
protection regulations designed to protect Illinois consumers from deceptive
business practices in the energy industry (Id., p. 8). 1
The question becomes whether DES’s conduct (or lack thereof), which allegedly
made it impossible for customers to make informed choices, was specifically
authorized by the Commission. The word “authorized” in Section 10b(1) includes
“formally promulgated trade regulation rules,” but the “definition nor the statute
itself limit the application of the provision to authorization via formal agency
rulemaking.” Price, 848 N.E.2d at 37. The word “‘specifically’ . . . describes the
substance or content of the authorization.” Id. at 38.
The conduct at issue does not involve making an affirmative statement. Instead,
the Lanes allege that DES failed to disclose information which they claim should
have been provided regarding transitional variable rates, variable rates, and pricing
methodology. The Lanes allege that DES “obscures” its variable rate pricing
methodology and transitional variable rates, thereby undermining “the public policy
purpose of deregulation by making it virtually impossible for customers to make
informed choices and benefit from competition” (Doc. 56, pp. 30-31). In doing so, the
The SAC later details several disclosure rules under the Act promulgated with consumer protection
in mind, but does not actually allege a violation of those rules. (Id., p. 30-31).
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Lanes seek to impose disclosures that are not required by the Commission’s
regulatory disclosure rules. This is clear because the SAC does not allege that DES,
for example failed to provide a separate written notice of a variable-rate customer’s
upcoming rate change when the rate increases by more than 20% under Ill. Admin.
Code tit. 83, § 412.165 or failed to maintain a customer call center under 220 Ill.
Comp. Stat. Ann. 5/16-123. Through omission, the SAC indicates that DES followed
the specifically authorized disclosure rules, providing DES with safe harbor.
Furthermore, the Court notes that it will not help lead the Lanes any further on
a connect the dots mission to plead sufficient facts to state a claim that is plausible
under FED. R. CIV. P. 12(b)(6).
Accordingly, the Court GRANTS Defendant Direct Energy Services’ Motion to
Dismiss (Doc. 57) and Plaintiffs Julie Lane and Richard Lane’s ICFA unfairness
claim is DISMISSED with prejudice due to futility. The Court DIRECTS the
Clerk of Court to close the case on the Court’s docket.
IT IS SO ORDERED.
April 26, 2021
s/ Stephen P. McGlynn
STEPHEN P. McGLYNN
U.S. District Judge
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