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Robert Slack, et al v. Suburban Propane Partners

December 22, 2010


The opinion of the court was delivered by: Linares, District Judge.



This matter comes before the Court by way of Defendants' motion to dismiss the Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court has considered the submissions made in support of and in opposition to the instant motion. No oral argument was heard. Fed. R. Civ. P. 78. Based on the reasons that follow, Defendants' motion is granted in part and denied in part. Plaintiffs have thirty (30) days in which to file a Third Amended Complaint which cures the pleading deficiencies addressed herein.


The following facts are accepted as true for purposes of the instant motion. Suburban Propane (comprised of a parent company and operating company) is a nationwide marketer and distributor of energy products including propane. (Second Am. Compl. ("Complaint orCompl."), ¶ 9). Plaintiffs are residential customers of Suburban Propane. (Compl., ¶¶ 10-17). Most of Suburban Propane's residential customers receive their propane supply through an automatic delivery system which schedules deliveries at dates and times of Suburban Propane's choosing. (Compl., ¶ 29). Another feature of Suburban Propane's residential propane business is that it owns a significant portion of the storage tanks located on its customers' premises and rents these tanks to its customers. (Compl., ¶ 30).

Suburban Propane does not meaningfully disclose how its prices are determined and typically does not disclose the price that it charges, per gallon, until after it has already delivered the propane. (Compl., ¶ 32). The price is not made available to residential customers until after their tank is filled, even when customers have asked for the price ahead of time. (Id.). As a result, Suburban Propane's residential customers are often surprised by the prices that Suburban Propane charges them for propane deliveries which frequently exceed competitors' prices and industry averages by significant amounts. (Id.).

Suburban Propane has also established a fee structure designed to inhibit the ability of its residential customers to reject propane deliveries once the cost of the delivered propane is disclosed to them. (Compl., ¶ 36). For instance, Suburban Propane charges its residential customers significant restocking or pump out fees to return any propane that has already been delivered to them and charges them a separate fee to pick up their propane tank if they wish to return a rented tank in order to switch service to a competitor. (Id.). Suburban does not disclose the amount of these fees at the time that it is soliciting residential customers for their business. (Id.).

The Suburban Propane company website states "When you shop at Suburban Propane, you get ... the best value!" (Compl., ¶ 37). In addition, Suburban Propane publicly claims that its prices are "competitive" with those charged by other companies. (Id.). To the contrary, Suburban Propane's prices are generally higher than the prevailing market price for propane. (Id.). When customers complain about Suburban Propane's exorbitant and arbitrary prices, Suburban Propane often times has failed to make proper price adjustments and, instead, offers deceptive and misleading explanations and excuses for the overcharges. (Id., ¶ 39).

In addition, Suburban Propane has imposed various fees, separate and apart from its propane prices, on its residential customers including but not limited to: regulatory fees, transportation fuel surcharges, tank rental fees, tank pick up fees, tank pump out fees, and restocking fees. (Id., ¶ 41). Suburban Propane has imposed such fees on its residential customers without providing them with proper advance notice of the fees, the amount of the fees or the basis for the fees. (Id., ¶ 42). Some invoices contain no explanation as to the nature of such fees (Compl., ¶ 43), whereas other invoices contain a fee disclosure statement. (Id., ¶ 44). The fee disclosure statement provides, in pertinent part:

FEES -- The invoice for this delivery may include a REG Fee, Transportation Fuel Surcharge, Emergency/Special Delivery fee and other fees, under appropriate circumstances and when not prohibited by law. The REG fee is charged to recover regulatory compliance costs for implementing policies and procedures, employees training and equipment charges to comply with federald [sic] and state requirements. The REG Fee is being charged instead of including it in the price per gallon of propane. The REG Fee is not being collected on behalf of any government agency.(Compl., ¶ 44).

Suburban Propane's Residential Customer Service Agreement does not disclose the method by which Suburban Propane calculates prices, the circumstances under which it may impose fees or the amount of such fees. (Compl., ¶¶ 48, 56, 62, 63, 68, 73, 75, 78, 85, 86, 90, 96, 96, 100, 108, 112, 118, 123, 129, 132, 137). Instead, the Customer Agreement contains information limited to Suburban Propane's "initial" prices and/or fees and states that such prices and/or fees are "subject to future change based upon market fluctuations and other factors," with no further explanation. (Compl., ¶ 48). Plaintiffs reasonably expected that Suburban Propane would charge them a fair and reasonable market price for their propane. (Id., ¶¶ 59, 72, 83, 94, 101, 113, 124, 133).

The Complaint alleges that Suburban Propane has engaged in a practice of deceptively "jacking" its prices and fees for reasons that are inconsistent with market fluctuations or other legitimate business factors. (Compl., ¶ 50). The Complaint also alleges that Suburban Propane's business practices are "fraudulent, deceptive, misleading, unconscionable and unlawful, and knowingly conceal, suppress, and omit material terms relating to Suburban Propane's prices, fees, and service." (Compl., ¶ 52). According to the Complaint, as a result of such fraudulent and deceptive business practices, Plaintiffs have suffered ascertainable damages and losses. (Compl., ¶ 53).

In light of the foregoing, Plaintiffs commenced the instant cause of action, on behalf of themselves and all others similarly situated, in May 2010.*fn1 Plaintiffs filed a First Amended Complaint in July 2010. Defendants filed a motion to dismiss the First Amended Complaint. On September 21, 2010, the Court granted Defendants' motion to dismiss and granted Plaintiffs' leave to file a Second Amended Complaint. On October 18, 2010, Plaintiffs filed a Second Amended Complaint. Defendants now move to dismiss this complaint, which contains the following claims:

(1) violation of the New Jersey Propane Gas Customer Protection Act (Count One), (2) violation of Article 2, Section 305 of the Uniform Commercial Code (Count Two), (3) violation of the New Jersey Truth-In-Consumer Contract, Warranty, and Notice Act (Count Three), (4) violation of the New Jersey Consumer Fraud Act (Count Four), (5) violation of other states' consumer fraud acts (Counts Five through Eight), (6) unjust enrichment (Count Nine), (7) breach of the covenant of good faith and fair dealing (Count Ten), and (8) violation of the Fair Credit Reporting Act (Count Eleven). Currently before the Court is a motion to dismiss the Second Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6).


For a complaint to survive dismissal, it "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). In evaluating the sufficiency of a complaint, a court must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable inferences in favor of the non-moving party. See Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008). Additionally, in evaluating a plaintiff's claims, generally "a court looks only to the facts alleged in the complaint and its attachments without reference to other parts of the record." Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1261 (3d Cir. 1994).


Defendants seek dismissal of each of Plaintiffs' claims. As a preliminary matter, the Court notes that the parties agree that New Jersey law should apply to Plaintiffs' claims. Accordingly no arguments have been raised with respect to Counts Five through Eight of the Second Amended Complaint, which contain claims, pled in the alternative, pursuant to various states' consumer fraud laws.

1. New Jersey Propane Gas Customer Protection Act Claim

Count One alleges that Suburban Propane violated the New Jersey Propane Gas Customer Protection Act ("NJGCPA"), N.J.S.A. 52:27D-509, et seq., by, inter alia, failing to provide Plaintiffs and other customers with a meaningful description of its charges and pricing policies for propane services and fees associated therewith. (Compl., ¶¶ 163-168). Defendants move to dismiss this claim on the basis that the NJPGCPA does not expressly or impliedly confer a private right of action. In support of this position, Defendants rely on language from the statute itself:

Any propane gas supplier or marketer who neglects or knowingly fails to comply with the requirements of this act or of the regulations issued thereunder shall be subject to a penalty not to exceed $1,000 per violation, which penalty may be imposed by the department [of Community Affairs] and recovered in a civil action by a summary proceeding pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c. 274 (C.2A:58-10 et seq.). Payment of any such penalty shall be remitted to the department [of Community Affairs]. N.J.S.A. 52:27D-512 (emphasis added). Plaintiffs do not directly address this issue. Instead, Plaintiffs respond by stating that "a consumer's 'clearly established legal rights' under federal or state law -- including the NJPGCPA -- is actionable under New Jersey's Truth in Consumer Contract, Warranty and Notice Act ("TCCWNA"). (Pl. Opp'n Br. at 15). Whether Plaintiffs have stated a claim pursuant to the TCCWNA has no direct bearing on whether Plaintiffs have stated a claim pursuant to the NJGCPA. The remainder of Plaintiffs' briefing on this claim is limited to addressing various sections of the NJPGCPA which Plaintiffs maintain Defendants have violated. Plaintiffs cite to no legal authority whatsoever suggesting -- much less demonstrating -- that a private right of action under the NJPGCPA is available.

Given the language of the statute itself, which clearly states that any penalty for violation of the statute may be imposed "by the department [of Community Affairs]" and that payment of any such penalty shall be remitted "to the department [of Community Affairs]," coupled with Plaintiffs failure to provide any legal basis on which the Court may infer that a private right of action exists, expressly or otherwise, under the NJPGCPA, Plaintiffs have failed to raise their right to relief, under this particular statute, above the speculative level. See Twombly, 550 U.S. at 545 ("Factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true."). ...

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