to deny the motion for summary judgment we believe that the district court made findings that were inconsistent with summary judgment at the hearing on the motion for summary judgment the court and the defendant and the plaintiffs all agreed that exorbitant rates are bad faith and you can see that at the transcript of the hearing it pages forty two to forty three fifty seven in the ruling the judge said there was a genuine issue of fact as to whether the the fen rates were exorbitant and we think by that simple colloquy in ruling alone that summary judgment should not have been entered we think that the issue really arose because the court was confused about our theory the court conceded that there were or at least found in the ruling that there is a genuine issue of material fact as to the meaning of the term business and market conditions but the court said no finer a fact could ever conclude that business and market conditions relationship to the market cost in the price charged absolutely that is our theory but that was not the basis of the ruling on the basis of the ruling and i think you could see this that in the ruling a special appendix page forty six was it no fact finder could conclude that the contract requires a specific profit margin and i think in reaching that conclusion the judge considers confused are damaged theory and are damages are based on the principle that there should be  we rely on for example story parchment which is the supreme court case it talks about you know when you put together a damage of value you give your best estimate and we use thirteen hours and hours our best estimate based on the direct energy's own numbers regarding margins that's not that's not our liability theory but if people could leave this contract any time it becomes oppressive how can we give you really well the question is do you know it's a present in when can you feeling if you paid too much for your power dial i think if you read your say wacko i can't believe this bill is so high and well can you investigate isn't it true well when you say investigate it what is what do you invest a gate you know i think it's a lot to ask a kid super to be an expert wholesale energy markets because we're talking average consumers and in fact defense expert himself mr fisher said that they basically take advantage of the fact that customers don't pay attention and you could see that in mr fisher's report it confidential appendix page to fifty but the point is if that's a mitigation issue your honor in my opinion and so you get in mitigation wasn't first is not on the table now and before you have a duty to mitigate there is an issue of you have to have proper notice of whether there is a potential claim thinking your rates might be too high i don't think is enough to trigger a for saying that business and market conditions should be limited to pick your mc costs to begin with well it's not business and market conditions in the abstract it's business and market conditions that change that could cause a rate to change and our experts have testified and again we think this is a jury issue our experts have said that the only material variable factor is the wholesale rate you know you step back and look at direct energy's business they don't make anything is all they do is they trade power back and forth the bottom of their middlemen and so their costs are relatively fixed what do they do they are brass so they have a five year lease for a building that's not going to change that's not going to cause the variable rate to change the only thing they have fixed cost and then the cost of the power they purchase exactly and they are entitled to profit over that absolutely your argument is it can't be unlimited profit well reasonable profit where does that come from charge anything it wants then the contract those no meaning in the case law i think is pretty clear that says when somebody is exercising discretion they have to exercise it within the bounds of the reasonable expectations of the parties but it wasn't  parties x discretion for the first year i mean right fixed rate and then there's a pretty clear provision it seems to me after the initial term and during the renewal period the rate for electricity will be variable each month direct energies discretion saying if we interpret that to mean here unlimited discretion this was not a contract i believe it would be an illusory contract let's say i pathetically direct energies i want to charge you a million dollars a kilowatt hour you can't do that that's the case law is pretty clear that under the implied covenant it has to be when you have discretion it has to be within the reasonable expectation of the parties and and i and i believe that i think the district court crap that here there's no conceivable reason that somebody would enter into this contract if they didn't think they could ultimately save money and the defense expert says every single month every single month the rate was above the guaranteed fixed utility rate so it's my view that if the if party knew that if a consumer knew that they wouldn't sign up for it and that to me is beyond the reason why expectation of the parties and that's what the district court said on the motion to dismiss yet fifty percent of the customers of direct energy are on variable rates exactly how do we explain that well i think their expert explained it your honor as i mentioned a while ago he if you look at his report a confidential paddocks page two fifty says what happens is people sign up and they don't pay attention and so they waited and waited wait and you know there's a structural issue here too because you buy the power and it's even if you were incredibly vigilant it would be a month and a half between the time you got the power and you could have discovered that you were being overcharged so that's for the most vigilant person so there's a structural advantage for every customer even people say on for years after their variable rate after their fixed rate contract expires that's that's very true and you know i have a fixed rate but you know i never look at my energy bill had their expert says they take but the market he plans of these variable rates suppliers say you know will save you money and you sign up and you know what you never save money because their expert says the longer you stay other variable plan the more money you're going to lose at you know these statutes allowing the alternative energy suppliers were enacted with great hope that it would bring down the cost of energy to ordinary consumers why did it fail well i think i think the problem was there was a structural issue because they forgot the part that the police had connecticut the utilities buy at a market rate because there's an auction and the utility buys it a six month of market rate and they are no profit so i think the hope probably didn't match the economic realities and perhaps of the legislature thought this through they might have come to a different result i know in connecticut now you know they don't market these may please a court that matthews on behalf of direct energy they happily know what many of your documents are and to see all your pricing strategy but is it true that your pricing strategy is you'll charge whatever the market will bear and damn the consumers no your honor it's only y now it's not our pricing strategy is we offer fixed rate plans that's that's all we sell in connecticut and all we ever have sold in connecticut and what happens when the fixed rate contract expires then it goes to a variable rate th changes month to month based on business and market on that it isn't the rate whatever the market will bear no your honor we take into account is our corporate present of detailed and his deposition customer attention is one of our main goals if we charge a rate that is higher than the customer can bear higher than the market would bear higher than we think is fair for our business and for the customer then those customers will leave those customers are the company's biggest asset and that's  yes ron are absolutely the first alternative would be the utility and anyone is free to stay with the utility but in addition to direct energy there are dozens of energy supply companies that customers could go to and the connecticut public focus on their bills but just pay whatever the bill is and you wind up charging whatever the market will bear your honor i don't know anything about how frequently the consumers go to the website but your customers when their fixed rate contract expires stay on the variable rate in which they pay much more than the costs to you of procuring that energy it must tell us that they're not looking they're not paying attention they may not be but we go to great efforts to try to get them to come back in our corporate representative to a fixed rate before their contract expires we send out a notice letting them know that the contract is going to go variable and encouraging them to call  d renew at a fixed rate and then after they go to a variable rate we frequently send them letters again encouraging and come back especially at times where we expect price increases like the polar vortex we send out letters in advance of those trying to get customers to ahead of time so that you know how many customers you have you know about how much power they're going to use and you can plan for that and run your business more predictably and more efficiently when customers are on variable rates and can leave at any time that's that's much harder to do would again submit that we're not charging just whatever the market can bear that our prices are constrained by business market conditions just bolden looked at the conditions that we consider which mr richards on the lower court said were our costs our margin targets the term of the contract and what our customer attention goals and he found that under any reasonable reading those were business market conditions we are constrained by those strange customers  and the fixed rate customers are far more predictable and easier to plan for but direct energies rates are bounded by this discretion it is an example of not charging whatever the market will bear i point you just polar vortex polar vortex is really what got this lawsuit started consumers saw their prices spike and some people who maybe never paid attention their bills did well during that same time period when other competitors shot their r by two hundred percent direct energy held them down and lost money lost tens of millions of dollars in january and february two thousand and fourteen and those those months which actually started this lawsuit are a credit and their damages report prepared by their expert because of all the money direct energy lost at that time so i think that's a good example of a direct energy not just charging whatever the market will take it up by raising rates in the warmer months when energy was cheaper for you to buy they did make some of that up and i would submit to the court that that's a good thing not just for direct but for the consumer it prevents the consumer from having to bear the full weight of those price spikes in those cold months when under underlying wholesale prices have spiked by two hundred customers during the polar rate pay less than buying energy from the power company yes because they were fixed rate because they were fixed rate and because the wholesale rate i want to be clear the rate that i'm talking about is the one that's in their complaint the day ahead locational marginal price reported by new england diet so and that rate at that time was equal to the variable rate the direct energy charged so direct energy didn't even charge didn't you i'm sorry i missed the first part i'm so i'm sorry you couldn't have afford all customers to look at the bill and say what's going on so you couldn't raise the rates as high as your cost might have dictated i think the bad motives that  the ms richards attributes to that pricing strategy are unfounded and the expert testimony that they cite he did not admit or can see the direction she relies on people not looking at their bills he was asked a question about why would anyone if they looked at their bills and they saw that it was more than the utility right why would they stay and he said they probably wouldn't if they looked at their bills but there's no testimony in the record from direct energy expert much less its corporate representative that direct energy relies on some sort of inaction on customers parts or that it does anything but repeatedly try to get them to come back to fix for not using direct energy or having a bad motive i just think this was an idea for to bring in competition that failed because you have no incentive not to charge whatever people will pay and then customers who are not  i think the i think the statute protects customers who are i'm thinking ignorant and credulous that's your idea that's your road load of pit of customers and and we can't protect them and but the statute does that's cut by well your honor again we we don't sell very or a contract we've never tried to lure people in with ferial where contracts are teaser rates or anything like that we sell fixed rate plans twelve months to three years and as i said we try to keep the customers on those fixed rates we don't lower the value and we don't take advantage of them and i think your point  that time as well and he tried to make it look at your pick open your open your mail look at your bill pick up the phone a good number of that's correct you're on the customer's one year the original plan is one year that you mentioned just now you also have a twelve year fixed rate plan the thirty six months to i'm sorry if i said twelve years i misspoke that's far longer three years but so are there are there other terms for the fixed rate plan it can be twelve months two years three years i think in some markets there may be different the terms but those are the ones i'm aware of in connecticut  and i continue to be struck by the fact that most customers stay or at least half of them stay after the fixed rate expires we try to get we would love it if they all came back and when connecticut decided to ban  in support of that bill because our strategy has always been in connecticut to sell fixed rate plans only we don't believe our competitors can do that but we can and that's our preference we're glad that legislation was passed so i think mr richards claim in order for you to find foreigners that this isn't really a contract it's a loser because you could set the price at whatever rate you want to it's it's not the at least because of the first when in which he received a fixed rate so even if he's right about everything and i don't think he is because i think we're still bounded by business and market conditions but even if he's right that the variable rate period has some loser equality the contract itself is not illusory because he got the first year fixed rates and the authority in the circuit is that a partial a loser equality doesn't render the whole contract a loser but again i don't think the contracts a loser at all i think business the market conditions is a reasonably clear  phrase just bolen pound that everything that we consider under any reasonable reading is a business a market condition and then mr richards attempt to impose an appropriate margin on top of one business market condition ordinary when they hear that the raiders said according to business and market conditions what the ordinary consumer think that the rate of being charged has something to do with business and market conditions and yet it doesn't always in your pricing of variable rate energy i think it does i don't think there's been any evidence of any time period in which our rates did not follow business or market conditions the only the only business or market condition that matters and mr richards reading the contract which would essentially have you rewrite the contract is the cost to procure just the power that sold a variable or a customer's not the cost of running the other parts of our business our fixed rate business not what other competitors are charging in fact he would say it doesn't matter if direct energy is charging less direct energy may be the most efficient company in the market it may have the lowest rates in the market but the highest margins and under his reading in the contract that would be unfair and i think that that's not just going to require a rewriting of the contract but it really asked the court to regulate something likely that the connecticut legislature in the highest margins is that unlikely i don't i don't know your honor but i think it's possible under his reading of the contract i think that's in part by just bold and found that that one reading that one market condition he's written business conditions out of the contract that one market condition is something that no reasonable juror could conclude business market conditions met thank you we thank you much disputed issue of fact the plain fact of the matter is they make gobs more money on the variable rate plans and they don't they give notice you heard counsel say they give notice sure they give notice but i don't know about you but i get it i get letters every day from these companies and you know you're barry with mail and they count on the fact that people don't read the noticed at so that's that's part of the business plan absolutely and this notion that they get more much more predictability on fixed rate plans do things to reduce custom which are well they say they do the point is the church is is a is a finite number every would those what it is it's a month after month after month and they plan that into their process they plan that into their variable rates and the plain fact of the matter is they make a whole lot more money on the variable rates than the fixed rates and uniquely the variable rate never ever ever goes below the fixed rate so how can it be a variable reverberated sometimes it's higher the fixed rate sometimes it's lower the fixed rate with direct energy it's always hire you know i think counsel are you counting on the language i read before that cut but protects even the unthinking ignorant and credulous or is that what we're doing yes x yes because it's not a subjective test it's an object to us so cut the focus is on whether something is likely to deceive that's the language of the court so it's focus you've got a reasonable person not every single person a subjective but even a person that doesn't mean male careful absolutely and the same thing as contract law you know you're bound by a contract if you don't read it you know and class action and so that's why it is objective cut because objective contract law is objective and here as the judge said no reasonable consumer would sign up for one of these things if they thought they could never get below the fixed rate and that's exactly  what's happened to thank you thank you thank you both