A federal judge in Connecticut has preliminarily approved a $18.5 million class action settlement involving claims that Viridian Energy overcharged customers.
The preliminary approval from U.S. District Judge Stefan Underhill on Friday covers two classes who claimed the Norwalk-based energy company misled customers about its variable rate plans. Class members alleged Viridian enticed them to shift their electric service with promises of meaningful savings that never materialized.
For example, Pennsylvania class member Steven Landau claimed Viridian lured him from his local utility in 2013 with promises of low, stable electricity rates. Six months after he signed up, Landau’s account was transferred to a variable rate plan and his rates more than doubled.
Final approval for the $18.5 million settlement will come after a hearing in Bridgeport on June 25. At that hearing, the court will consider the certification of each of the settlement classes, the appointments of the class representatives, the appointment of class counsel, the settlement agreement and whether the preliminary settlement should receive final approval.
The two groups would include an average usage class and an above-average usage class. The average usage class would cover anyone enrolled in a Viridian variable rate electricity or gas plan with an average annual utilization rate of 25,000 or less kilowatt hours, or 2,500 or less therms.
The above-average usage class would cover anyone enrolled in a Viridian variable rate electricity or gas plan with an average annual utilization of more than 25,000 kilowatt hours, or more than 2,500 therms.
The period for both classes is July 1, 2009, through Dec. 31, 2016.
The cash benefit for members of the average usage class cannot exceed $425 per valid claim, while it cannot exceed $500 per valid claim for the above-average usage class member.
The plaintiffs are represented by attorneys from Izard, Kindall & Raabe; Wittels Law; Hymowitz Law Group; Kohn Swift & Garf; Marcus & Mack; Greenfield & Goodman; and Cuneo, Gilbert & LaDuca.
As part of the agreement, Viridian must abide by the company’s policies regarding advertising and marketing claims.
Within 30 days of Underhill’s order, the settlement administrator must create and maintain a website applicable to each settlement class that will provide, among other things, class counsel’s contact information and a method of electronic submission of claim forms. Class members will have 90 days from the commencement notice date, which has yet to be set, to submit a claim form for any benefits available under the settlement.
Robert Izard, a partner at Izard Kindall, said the settlement is fair for Viridian consumers.
“This all started five or six years ago and includes settlements with several cases, including those in Pennsylvania, New York, Massachusetts and Connecticut,” Izard said. “This was a global resolution of overcharging claims against Viridian. It’s a good agreement for consumers.”