LITTLE et al v. AMBIT NORTHEAST, LLC et al

Filing 37

MEMORANDUM AND ORDER denying in part and granting in part the 26 MOTION to Dismiss. Count III of the Amended Complaint is dismissed. Signed by Judge Peter G. Sheridan on 12/20/2017. (mps)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
JOSHUA LITTLE, et al,
Civil Action No.: 16-cv-8800 (PGS)
Plaintiffs,
MEMORANDUM AND ORDER
v.
AMBIT ENERGY HOLDINGS, LLC and
AMBIT NORTHEAST, LLC,
Defendants.

SHERIDAN, U.S.D.J.

This matter is before this Court on Defendants’ motion to dismiss Plaintiffs’ First Amended
Class Action Complaint. Plaintiffs Joshua Little (“Little”), Samantha Mason (“Mason”), and
Gregory Stewart (“Stewart”) allege, on their own behalf, as well as on behalf of all other similarly
situated, that Defendants, Ambit Energy Holding, LLC and Ambit Northeast, LLC, (collectively
“Defendant” or “Ambit”) have engaged in unconscionable and deceptive commercial practices in
violation of the New Jersey Consumer Fraud Act (NJCFA) and other related tortious acts.
I.
Little, Mason, and Stewart enrolled as Ambit customers in New Jersey respectively in
September 2013, December 2011, and November 2012. (ECF No. 24 “Amend. Compl.” ¶¶ 1315). Ambit is an energy service providing utilities to New Jersey residents in alternative to the
existing utility companies such as PSE&G, pursuant to the Electric Discount and Energy
Competition Act of 1999 (EDECA), N.J.S.A. 48:3-49 et seq. (Id. at ¶1). Ambit markets itself as a
less-expensive alternative to existing utilities companies. (Id. at ¶¶ 1-2). Ambit offers a “budget

1 

billing” payment plan intended to avoid fluctuations in monthly energy expenses. (Id. ¶4).
According to its website, Ambit calculates the average monthly amount by determining the
wattage of electricity based on prior usage. Ambit sets a monthly rate of wattage based on an
average. Both the prior usage and the rate of wattage are estimates, subject to variations based on
several factors. Prior usage may vary depending weather, for example. Rate of wattage may vary
because Ambit purchases electricity on the grid, and the price fluctuates based on demand.
Specifically, to reach the average budgeted amount, Ambit multiplies a budgeted (estimated) usage
amount, times a budgeted (estimated) rate. The resulting total is the “budget bill amount.” (See
Amend. Compl. Ex. 7 showing the amount paid by Plaintiff Little) (Def. Br. Pg.17). A consumer’s
use of electricity varies seasonally, but a consumer’s take home pay does not. The budgeted
amount evens out the cost of electricity by averaging the price over a year, so that the amount paid
fits within a consumer’s budget.

According to the Complaint, when a customer terminates

Ambit’s service, the customer receives a final bill identified as a “budget settlement,” wherein the
customers is billed for the difference between the budget bill amount and the actual usage and
actual rates. The difference can be substantial.
On November 28, 2011, Plaintiffs brought a class action on behalf of Ambit’s New Jersey
customers claiming to have been financially harmed by Ambit’s “budget billing” plan in which
they were enrolled. After Defendants moved to dismiss the original complaint, the case was
administratively terminated without prejudice, allowing the parties to reopen the case. (ECF No.
17). Plaintiffs filed an amended complaint on June 17, 2017 (ECF No. 24). On July 28, 2017,
Defendants renewed their motion to dismiss the amended complaint for lack of subject matter
jurisdiction, Fed. R. Civ. P. 12(b)(1), and failure to state a claim, Fed. R. Civ. P. 12(b)(6).

2 

The Plaintiffs
In support of their claims, Plaintiffs provide individual accounts of their experience with
Ambit, along with billing statements and correspondence with Defendants.
Joshua Little
Little signed up with Ambit in 2013. He decided to terminate the service in May 2016, and
when he proceeded to advise Ambit accordingly, he received a charge of $5,132.08. Little alleges
that that was the first time he was advised that he owed thousands of dollars to Ambit. (Amend.
Compl. at ¶¶40-42, See Ex. 6). Those charges represented “adjustment” or “Budget Settlement”
due to the increase in actual rate charged to budget plan customers. Little contends that none of
the budget plan billing statements contained a breakdown of energy used, costs, “actual rates,” and
balances owed.
Samantha Mason
Mason signed up for Ambit electric in December 2011 and gas in January 2012. She
decided to switch back to her existing utility in 2015 and in her last Ambit bill, she received a
charge of $2,405.41. (Amend. Compl. ¶¶46-49, See Ex. 8). After advising Ambit that she also
wanted to terminate gas services, she received a charge in the amount of $671.07 (Id. See Ex. 9).
She also alleges not having been informed of the charges, or “actual rates” differences, before she
decided to terminate the account and received the last billing statement. Upon receiving the
charges, Mason complained to the company. In a conversation with one of the company’s
representatives, she explained that the budged bill amount was not broken down to show either
credit or accumulated balance. The representative acknowledged that in that case, the accrued
charges would hit as a surprise when settling the balance. (Id. at ¶ 55).

3 

Gregory Stewart
Stewart signed up for Ambit services in late 2012. He contacted Ambit to terminate their
services in December 2015. On January 2016, he received his final Ambit bill and learned that he
was being charged a total of $2,192.60. He also contends that he had not previously been informed
of an accrued balance. (Amend. Compl. ¶¶56-58, See Ex. 12).
First Amended Complaint: The Claims
In the first Amended Complaint, Plaintiffs raise the following causes of actions:
In Count I, Plaintiffs allege that Defendants have engaged in unconscionable and deceptive
commercial practices under the New Jersey Consumer Fraud Act (NJCFA) (N.J.S.A. 56:8-1 et
seq.). These actions include knowingly and falsely (1) promising Plaintiffs that by switching to
Ambit they would save money compared to its competitors (utility companies) prices; (2) that by
enrolling in Ambit’s budget billing plan they would be able to pay their energy expenses in an
even, budgeted manner, and not accumulate a significant balance; and (3) knowingly concealed
and misrepresented the rates that were actually being charged and knowingly concealed that the
budget payments assessed on their monthly bills were not covering all Ambit’s charges. (Id. at
¶73-75). Such practices allegedly resulted in hidden fees and “budget settlement” or “adjustment”
charges that were billed to Plaintiffs upon termination of their services with Ambit. (Id. at ¶76).
Plaintiffs argue that Defendants misrepresented and/or omitted the total amount of energy for
which they were charged. (Id. at ¶77). Plaintiffs ask for damages, an injunction, and declaratory
relief pursuant to N.J.S.A. 56:8-2.12 and 56:8-159 (NJCRA), in addition to court costs, and
reasonable and necessary attorneys’ fees in connection with this action. (Id. at ¶81-82).
In Count II, Plaintiffs raise claims of unjust enrichment resulting from the Defendants
wrongful conduct. (Id. at ¶83-87). They argue that Defendants collected improper and excessive

4 

energy charges, and it would be unjust and inequitable for them to retain the benefits of their
wrongful conduct. (Id.)
In Count III, Plaintiffs raise claims of unconscionability regarding Defendants’ budget
billing policies and alleged misleading practices. (Id. at ¶88-89).
II.
Defendants filed a motion to dismiss Plaintiffs’ first amended complaint pursuant to Fed.
R. Civ. P. 12(b)(1) and 12(b)(6).
A.

Rule 12(b)(1) Lack of Subject Matter Jurisdiction

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) challenges the
existence of a federal court's subject matter jurisdiction. "When subject matter jurisdiction is
challenged under Rule 12(b)(1), the plaintiff must bear the burden of persuasion." Symczyk v.
Genesis Health Care Corp., 656 F.3d 189, 194 n.4 (3d Cir. 2011) (citation omitted). A motion to
dismiss for lack of subject matter jurisdiction may either "attack the complaint on its face ... [or]
attack the existence of subject matter jurisdiction in fact, quite apart from any pleadings."
Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). A facial challenge
asserts that "the complaint, on its face, does not allege sufficient grounds to establish subject matter
jurisdiction." Iwanowa v. Ford Motor Co., 67 F. Supp. 2d 424, 438 (D.N.J. 1999). A court
considering a facial challenge construes the allegations in the complaint as true and determines
whether subject matter jurisdiction exists. Mortensen, 549 F.2d at 891.
B.

Rule 12(b)(6) Failure to State a Claim

"Federal Rule of Civil Procedure 8(a)(2) requires only 'a short and plain statement of the
claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of
what the . . . claim is and the grounds upon which it rests.' Bell Atl. Corp. v. Twombly, 550 U.S.

5 

544, 555, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47,
78 S. Ct. 99, 2 L. Ed. 2d 80 (1957)).
Rule 9(b) provides that “[i]n alleging fraud or mistake, a party must state with particularity
the circumstances constituting fraud or mistake.” The requirements of Rule 8 apply even where
the Rules command particularity, as in the pleading of fraud under Rule 9(b). In re Westinghouse
Sec. Litig., 90 F.3d at 702. Therefore, where alleging fraud, Plaintiffs must state the circumstances
constituting fraud with particularity, but must still endeavor to make their allegation clear and
concise. “Pleadings containing collectivized allegations against ‘defendants’ do not suffice.”
Naporano Iron & Metal Co. v. Am. Crane Corp., 79 F. Supp. 2d 494, 511 (D.N.J. 1999).
On a motion to dismiss for failure to state a claim, the "defendant bears the burden of
showing that no claim has been presented." Hedges v. United States, 404 F.3d 744, 750 (3d Cir.
2005). A district court is to conduct a three-part analysis when considering a Rule 12(b)(6) motion
to dismiss. See Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). "First, the court must 'tak[e]
note of the elements a plaintiff must plead to state a claim.'” Id. (quoting Ashcroft v. Iqbal, 556
U.S. 662, 675, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009)). Second, the court must "review[] the
complaint to strike conclusory allegations." Id. The court must accept as true all of the plaintiff's
well-pleaded factual allegations and "construe the complaint in the light most favorable to the
plaintiff." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (citation omitted). In
doing so, the court is free to ignore legal conclusions or factually unsupported accusations that
merely state "the-defendant-unlawfully-harmed-me." Iqbal, 556 U.S. at 678 (citing Twombly, 550
U.S. at 555). Finally, the court must determine whether "the facts alleged in the complaint are
sufficient to show that the plaintiff has a 'plausible claim for relief.' Fowler, 578 F.3d at 211
(quoting Iqbal, 556 U.S. at 679). A facially plausible claim "allows the court to draw the reasonable

6 

inference that the defendant is liable for the misconduct alleged." Id. at 210 (quoting Iqbal, 556
U.S. at 678).
III.

Jurisdiction of the New Jersey Board of Public Utilities (NJBPU)
With regards to the Rule 12(b)(1) motion, Defendant argues that the NJCFA claim raised
by Plaintiffs is subject to exclusive, or at least primary, jurisdiction of the Board of Public Utility
Commissioners of the State of New Jersey (“NJBPU” or the “Board”) Daaleman v. Elizabethtown
Gas Co., 390 A.2d 566 (N.J. Sup. Ct. 1978) (Def. Br.pg.7). In Daleeman, the Supreme Court of
New Jersey reasoned that consumers had raised a claim under the New Jersey Consumer Fraud
Act, due to the adjustments made by a privately owned public utility company which resulted from
variations in the cost of purchase and supplies of gas. The mechanism used by the company, the
“Purchase Gas Adjustment Clause” was permitted under the NJBPU. Therefore, review and
application of the Purchase Gas Adjustment Clause to the facts of the case, would require review
of the Board’s administrative order and regulations. For that reason, the Supreme Court of New
Jersey opined that Board had exclusive jurisdiction over the matter. Daaleman, 390 A.2d at 27172.
First, this Court reviews whether, pursuant to Electric Discount and Energy Competition
Act of 1999 (EDECA) (N.J.S.A. 48:3-49), the Board intended to have exclusive or primary
jurisdiction over matters such as this one. Competitive business entities appear to be regulated by
EDECA in a similar manner as public utilities companies. For instance, as indicated in the Act,
“[a]n electric public utility or a related competitive business segment of an electric public utility
shall not offer any competitive service to retail customers within this State without the prior
express written approval of the [B]oard.” N.J.S.A. § 48:3-55. Further, N.J.S.A. § 48:3-85, regulates
7 

Consumer protection standards. The determination of whether an administrative agency has
jurisdiction over a particular matter "is one of statutory construction, that is, determining the
legislative intent." Hinfey v. Matawan Reg'l Bd. of Educ., 77 N.J. 514, 529, 391 A.2d 899 (1978).

The BPU is responsible for supervising and regulating public
utilities in the State and has the power to set "just and reasonable
standards, classifications, regulations, practices, measurements or
service to be furnished, imposed, observed, and followed" by a
public utility. N.J.S.A. 48:2-13; N.J.S.A. 48:2-25(a). The BPU relies
upon N.J.S.A. 48:2-13(a) for its general jurisdiction over this
matter.”
See Borough of Haledon v. Borough of North Haledon, 817 A.2d 965, 971 (N.J. Super. Ct. App.
Div. 2003). The section states: “The [B]oard shall have general supervision and regulation of and
jurisdiction and control over public utilities as defined in this section and their property, property
rights, equipment, facilities and franchises so far as may be necessary for the purpose of carrying
out the provisions of this Title.” (N.J.S.A. 48:2-13(a)).
Additionally, with regards to rights and remedies under the Statute, N.J.S.A. 48:3-84 (a),
states:
The rights, remedies and prohibitions accorded by the provisions of
this act are in addition to and cumulative of any right, remedy or
prohibition accorded by the common law or any statute of this State
and nothing contained herein shall be construed to deny, abrogate or
impair any such common law or statutory right, remedy or
prohibition.
N.J.S.A. § 48:3-84 (b) further states “Administrative and judicial remedies provided in this
act may be pursued simultaneously.”
Therefore, the Board does not have exclusive jurisdiction over this matter.

8 

Alternatively, Defendant argues that, pursuant to the doctrine of primary jurisdiction, the
court should stay this case to permit the NJBPU to resolve the budget-billing issues first by
ordering a stay of the present case. (Def. Br.pg.9).
The doctrine of primary jurisdiction:
applies where a claim is originally cognizable in the courts, and
comes into play whenever enforcement of the claim requires the
resolution of issues which, under a regulatory scheme, have been
placed within the special competence of an administrative body; in
such a case the judicial process is suspended pending referral of such
issues to the administrative body for its views.
United States v. W. Pac. R.R. Co., 352 U.S. 59, 64 (1956). See also Reiter v. Cooper, 507
U.S. 258, 268 (1993) (doctrine applies "to claims properly cognizable in court that contain some
issue within the special competence of an administrative agency").
The Third Circuit has held that the doctrine applies when decision-making is:
divided between courts and administrative agencies [and] calls for
judicial abstention in cases where protection of the integrity of a
regulatory scheme dictates preliminary resort to the agency which
administers the scheme. . . . It is now generally accepted . . . that the
principal justification [for the doctrine] is the need for an orderly
and sensible coordination of the work of agencies and courts.

Cheyney State Coll. Faculty v. Hufstedler, 703 F.2d 732, 736 (3d Cir. 1983) (internal
citation omitted).
“’No fixed formula exists for applying the doctrine of primary jurisdiction,’ so matters
should be evaluated on a case by case basis.” Natixis Fin. Prods., LLC v. Public Serv. Elec. & Gas
Co., 2014 U.S. Dist. LEXIS 58943, *8 (D.N.J. April 29, 2014) (quoting W. Pac. R.R. Co., 352
U.S. at 59). The Third Circuit has found the following four factors helpful in determining whether
to apply the doctrine:

9 

(1) Whether the question at issue is within the conventional
experience of judges or whether it involves technical or policy
considerations within the agency's particular field of expertise; (2)
Whether the question at issue is particularly within the agency's
discretion; (3) Whether there exists a substantial danger of
inconsistent rulings; and (4) Whether a prior application to the
agency has been made.
Baykeeper v. NL Indus., Inc., 660 F.3d 686, 691 (3d Cir. 2011).
In interpreting the significance of Daaleman and the applicability of the NJCFA, the Third
Circuit Court stated,
As the Supreme Court of New Jersey stated in Daaleman v.
Elizabethtown Gas Co., 77 N.J. 267, 390 A.2d 566, 568 (N.J. 1978),
the Consumer Fraud Act was "aimed basically at unlawful sales and
advertising practices designed to induce consumers to purchase
merchandise or real estate." "The legislative concern [underlying the
Act] was over sharp practices and dealings in the marketing of
merchandise and real estate whereby the consumer could be
victimized by being lured into a purchase through fraudulent,
deceptive or other similar kind of selling or advertising practices."
Id. at 569.
J & R Ice Cream Corp. v. California Smoothie Licensing Corp., 31 F.3d 1259, 1273-1274
(3d Cir. 1994).1 The issues raised by Plaintiff appear to be one regarding Defendant’s business
conduct, and whether it was sufficiently deceptive to constitute consumer fraud, as opposed to
being solely based on regulations established by the Board. Resolution of this matter does not
require complex technical knowledge. Therefore, there is no reason for the Court to refrain from
exercising jurisdiction over this case.

1

 It must be noted that both, Daaleman and J & R decisions date prior to 1999 when EDECA was
enacted. 

10 

IV.
1. The New Jersey Consumer Fraud Claim
Defendant argues that Plaintiffs’ NJCFA claim cannot proceed as pleaded because the
Amended Complaint does not contain sufficient facts to plausibly plea that Defendant knowingly
or intentionally omitted certain information from bills sent by Plaintiffs’ incumbent utilities.
Defendant contends that Plaintiffs failed to satisfy the requirements of Rule 8(a) when failing to
plausibly allege facts sufficient to support the “ascertainable loss” element. (Def. Br.pg.13).
Further, Defendant claims that Plaintiffs fail to meet the heightened pleading standard set by Fed.
R. Civ. P. 9(b) applicable to fraud claims, which states:
In alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake. Malice, intent,
knowledge, and other conditions of a person’s mind may be alleged
generally.
Defendant also argues that Plaintiffs fail to allege facts to support an inference that their
affirmative representations were false. (Def. Br.pg.11-12). Nor can they show that the failure to
disclose the “actual rate” only disclosing the “budget rate” is an affirmative act rather than an
omission. (Def. Br.16). Further, assuming the disclosure of the budget rate where to be deemed an
affirmative act, Plaintiffs have not provided sufficient facts in support of the claim that the charged
rate was unlawful pursuant to the NJCFA. (Id. at 17).
Defendant claims that Plaintiffs failed to claim “ascertainable loss” under the NJCFA.
Defendants argue that Plaintiffs cannot show that the benefit of their bargain was to save money
and that even if the statements mentioning saving money were to be analyzed, they would not be
sufficient to support a claim since they constitute mere puffery. (Def. Br. Pg. 19-20).
Plaintiffs rebut Defendant’s argument by enumerating paragraph 75 of the Amended
Complaint which states:
11 

i.

ii.

iii.
iv.
v.

Defendants have knowingly and falsely promised Plaintiffs and the Class that by
switching to Ambit they would save money compared to what the consumers’
utilities would have alleged
Defendants have knowingly and falsely promised Plaintiffs and the Class that by
enrolling in Ambit’s budget billing plan they would be able to pay their energy
expenses in an even, budgeted manner, and not accumulate significant balances.
Defendants have knowingly concealed from Plaintiffs and the class the rates at
which they were actually being charged.
Defendants have knowingly concealed from Plaintiffs and the Class that the budget
payments assessed on their monthly bills were not covering all of Ambit’s charges.
Defendants have knowingly misrepresented to Plaintiffs and the Class the rates
Ambit was charging.

The Amended Complaint alleges that all Plaintiffs were not aware there would be a settling
amount at the end of service, nor were they aware of the actual amount of energy consumed.
To state a claim under the NJCFA, a plaintiff must allege three elements: (1) the defendant's
unlawful practice, (2) the plaintiff's ascertainable loss, and (3) a causal relationship between the
two. Intl Union of Operating Eng'rs Local No. 68 Welfare Fund v. Merck & Co., 192 N.J. 372,
389, 929 A.2d 1076 (2007) (internal quotation marks omitted). Defendant argues that Plaintiffs
failed to plea any affirmative acts that constitute unlawful practice under NJCFA. (Def. Br. 16.)
The NJCFA defines "unlawful practice" as:
The act, use or employment by any person of any unconscionable
commercial practice, deception, fraud, false pretense, false promise,
misrepresentation, or the knowing concealment, suppression, or
omission of any material fact with intent that others rely upon such
concealment, suppression or omission, in connection with the sale
or advertisement of any merchandise[.]
N.J.S.A. 56:8-2.
The CFA does not define what constitutes an "ascertainable loss," but the New Jersey
Supreme Court has recognized that the loss must be capable of calculation, and not just
hypothetical or illusory. Thiedemann v Mercedes-Benz USA, LLC, 183 N.J. 234, 248, 872 A.2d
783 (2005); see also Torres-Hernandez v. CVT Prepaid Solutions, Inc., No. 08-1057—FLW, 2008

12 

U.S. Dist. LEXIS 105413, 2008 WL 5381227, at *7 n. 3, (D.N.J. Dec. 9, 2008) ("A sufficiently
plead ascertainable loss is one with enough specificity as to give the defendant notice of possible
damages."). "A cognizable injury . . . must consist of more than just unmet expectation." Dzielak
v. Whirlpool Corp., 26 F. Supp. 3d 304, 335 (D.N.J. 2014).
There are two relevant theories to ascertainable losses under the CFA: (1) the out-pocketloss theory, and (2) the loss-in-value or benefit-of-the-bargain theory. Id. An out-of-pocket-loss
theory will suffice only if the product received was essentially worthless. Id. A benefit-of-thebargain theory requires that the consumer be misled into buying a product that is ultimately worth
less than the product that was promised. Smajlaj v. Campbell Soup Co., 782 F. Supp. 2d 84, 99
(D.N.J. 2011).
Plaintiffs identify an unlawful practice in Defendant’s failure to disclose the actual rate.
They argue that by concealing the actual rates charged, Defendants caused them to pay more for
their utilities than they would have. (Pl. Opp. pg. 20). Defendants’ failure to disclose that they
were accumulating a balance, caused them an ascertainable loss. In fact, Plaintiffs support that
they were forced to accrue a valid debt that they had no idea was accruing. (Id. at 20-21).
Plaintiffs have provided sufficient evidence to support a connection between the alleged
wrongful action and their ultimate loss. Therefore, the claim is sufficiently supported for purposes
of a motion to dismiss.
2. The Unjust Enrichment
Defendant argues that Plaintiffs cannot maintain a claim of unjust enrichment because New
Jersey Law does not recognize tort-based unjust enrichment claims. In the alternative, even if
Plaintiffs’ claim were to be based on quasi-contract, or a contractual base, rather than tort, they
fail to meet the elements of a claim under New Jersey law. (Def. Br.pg.24-26).

13 

To succeed on a claim for unjust enrichment under New Jersey law, "a plaintiff must show
both that defendant received a benefit and that retention of that benefit without payment would be
unjust." VRG Corp. v. GKN Realty Corp., 641 A.2d 519, 526 (N.J. Sup. Ct. 1994); see also Callano
v. Oak-wood Park Homes Corp., 219 A.2d 332, 334 (N.J. Super. Ct. App. Div. 1966).
Additionally, for an unjust enrichment claim to succeed, there must be a showing that "the plaintiff
expected remuneration from the defendant, or if the true facts were known to plaintiff, he would
have expected remuneration from defendant, at the time the benefit was conferred." Callano, 219
A.2d at 335; see also VRG Corp., 641 A.2d at 526.
Plaintiffs argue that the charges imposed at termination of their contracts with Ambit were
improper and excessive. Plaintiff has provided sufficient support necessary to survive at motion
to dismiss at this juncture, however, the court will review the validity of this claim again at the
summary judgment stage.
3.

The Unconscionability Claim

Defendants argues that the claim for unconscionability should be dismissed because an
affirmative claim for damages is not recognized by New Jersey Law, and even if it were, it would
lack merit. (Def. Br.pg.27). Plaintiff rebuts arguing that they seek a declaration, along with other
awards that the Court may deem appropriate. (Pl. Opp. Pg. 36).
Under New Jersey law, "a contract is unconscionable if its terms are manifestly unfair or
oppressive and are dictated by a dominant party." Howard v. Diolosa, 241 N.J. Super. 222, 574
A.2d 995, 999 (App. Div. 1990) (citing Kuzmiak v. Brookchester, 33 N.J. Super. 575, 111 A.2d
425 (App. Div. 1955). "To establish unconscionability, a plaintiff must show 'overreaching or
imposition resulting from a bargaining disparity between the parties,' or 'patent unfairness' such
that 'no reasonable person not acting under compulsion or out of necessity would accept its terms.'"

14 

Cole v. Wells Fargo Bank, N.A., 2016 U.S. Dist. LEXIS 42156, 2016 WL 1242765, at *6 (D.N.J.
Mar. 30, 2016) (citing Rotwein v. Gen. Accident Grp. & Cas. Co., 103 N.J. Super. 406, 247 A2d
370 (N.J. Super. Ct. Law. Div. 1968)). Based on the above standard, the Court finds that the claim
does not apply to the facts of this case. This claim is dismissed accordingly.
As a last point, Defendant argues that Plaintiffs’ Complaint should be dismissed pursuant
to Rule 23 (b)(2) because it seeks primarily money damages. (Def. Br.pg.30). At this early stage
there is no basis to doubt Plaintiffs’ Rule 23(b)(2) allegations. Defendant may raise objections
regarding class certification in a Rule 23 motion.
CONCLUSION
Defendant’s motion to dismiss is denied in part and granted in part. Plaintiffs have
sufficiently supported the claims set forth in Count I and II. Plaintiff’s Count III
(Unconscionability) is dismissed at this time.
ORDER
This matter, having been brought before the Court on Defendant the State of New Jersey’s
motion to dismiss [ECF No. 26], and the Court having considered the briefs and submissions of
the parties, and having heard oral argument;
IT IS on this 20th day of December, 2017;
ORDERED that Defendant’s motion to dismiss (ECF No. 26) is DENIED IN PART AND
GRANTED IN PART; it is further
ORDERED that Count III of the Amended Complaint is DISMISSED.

s/Peter G. Sheridan
PETER G. SHERIDAN, U.S.D.J.

15