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Korean Cleaners Sue the Pants Off Infinite Energy Gas Company

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Atlanta, GAAttorney David Pardue's clients feel like Infinite Energy took a spike in gas prices and drove it right through the heart of their businesses. The Korean Cleaners' Association of Atlanta (KCAA) recently came to Pardue's office at Hartman, Simons, Spielman & Wood with a serious complaint about the 3-year natural gas contract many of their members had signed in the wake of the Hurricane Katrina in 2005.

David PardueAfter looking the problem, Pardue filed a class action lawsuit on behalf of the KCAA against Infinite Energy that is currently awaiting certification. "I think the complaint largely speaks for itself," says Pardue. "I think the bottom line is that Infinite Energy took advantage of a spike in natural gas prices and was unjustly enriched as a result."

Hurricane Katrina caused major disruptions in the natural gas supply across the US and caused economic havoc for consumers. As prices soared Infinite Energy sent out letters to the Korean community with an offer to lock-in at current prices as protection against future increases.

Alarmed by how high natural gas prices would affect their costs, many Korean Cleaners signed long term contracts with the Infinite Energy Gas Company only to see prices drop dramatically after the crisis passed.

According to the lawsuit, Infinite Energy has tried to hold members of the KCAA to the higher rates despite attempts to renegotiate the contract and despite the fact that many members never agreed to the new rate.

"We believe Infinite Energy took advantage of the plaintiffs and locked them into this 3-year deal at the height of a price spike that was based on a short term supply problem," says Pardue.

Pardue argues that the people in the industry knew or should have known the price spikes were temporary. "The industry people understood the costs were based on a short term fixable problem in supply based on the devastation that Katrina had wrought in the gulf," says Pardue, "and once the pipelines were repaired the problem would be resolved."

The Korean Cleaners' Association of America has more than 600 members in the United States. Pardue describes his clients as a hard working group of small business owners and he says, "They are great to work with and I think they are looking forward to their day in court."

English is a second language for most of his clients and although Pardue is not sure if they were specifically targeted by Infinite Energy he says, "I do believe that the language barrier between the Koreans and operating contracts written in English probably had something to do with what happened to them."

Pardue believes the law is on their side and the suit seeks more than $5 million in damages, as well as punitive damages and a permanent injunction.

David Pardue represents small and large businesses and heads the litigation team at Hartman, Simons, Spielman & Wood in Atlanta, Georgia. Pardue was also selected as a Georgia Superlawyer for 2008 in the category of Business Litigation and Real Estate Litigation. He holds a B.A. from Tulane University and a J.D. from Yale.



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So I can see feeling that someone got a raw deal in this situation. You have some good hardworking folks that got locked into a crazy high rate. They are minorities with language barriers and they just want to operate without an excessive overhead and the security of a fixed rate. Then you have a big energy company that may locked them into this crazy high rate for a long term and the rates have since come down and the customer is paying a rate that is ridiculously out of sync with the current market. The problem is when they locked those rates in the market was extremely volatile and with all that market movement it seemed that it was only moving one way..... up. Infinite is a decent size company but they aren't a A-list brand so the customer must have been shopping which indicates that although in today's standards that rate was stinking high - it was competitive at the time. The customer obviously chose what seemed like the lesser of bad rates and not knowing how long this debacle was going to last they chose the security of a long term rate. Just like when rates are low and you purchase a fixed rate you dont want your supplier to raise your rate when the market goes up at that same token the supplier can't lower your rate when the rate goes down. Although this seams cold it isn't because they wouldn't want to it is because the agreement is "FIXED". Upon countersigning the agreement Infinite would have went out into the market and hedged their natural gas. They basically purchase the whole amount of energy that the customer will use and allow them to pay for it as they use it. Really they are financing the natural gas. It is no different than someone who bought a gas guzzler right before the oil spike and then the price of trucks and SUV plummeted. That person can't go to Ford, GMC or Dodge and demand their money back because they didn't know what the market was gonna do. Infinite doesn't make any more money on the account even though natural gas is cheaper because they had to pay for it upfront. So, regardless of how crappy the situation is.... and it is crappy... Infinite didn't actually do anything wrong here. Now here is where some blame can be put on Infinite's shoulders. The market was crazy high, and after having years of energy industry experience I understand that what most goes up must come down. Infinite probably should have known that it wouldn't be advantageous to sign a long term agreement. In the end it is up to the customer to decide what they would like to do. I have no way of knowing how Infinite presented the options and the situation to the customer. It is times like these that customers should seek the advice of a non-biased third party energy professional. We have been handling energy consulting since 2002 and we represent the customer. There is no way that without great expense will a customer be truly qualified to make sure that they are getting the best product, price with the best terms and legal provisions that they can get without seeking a consulting firm. Not saying that all consulting firms are great but If you are going to purchase a new location you are going to consult a real estate agent and even in this situation if you are going to sue a energy company you need a lawyer. Why wouldn't you consult an energy professional? Well, I certainly hope that the KCAA is doing well now and has a much better system of making decisions for their energy needs.

All the best.


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