## Facts

- Wilco Energy Corp., a home heating oil supplier, mailed consumers an October 1999 flyer offering a two-year fixed-price heating oil contract.
- Approximately 143 residential customers accepted the offer and entered into fixed-price contracts.
- In January 2000, wholesale heating oil prices rose sharply amid claimed supply shortages and high demand.
- Wilco notified fixed-price customers that it was increasing prices despite the two-year fixed-price promise.
- After a consumer complaint and investigation, the Attorney General commenced a special proceeding under GBL §§ 349 and 350 and Executive Law § 63(12), seeking injunctive relief, restitution, civil penalties, and costs.
- During the investigation, Wilco reinstated the fixed prices and allegedly credited customers for the price differential.
- The trial court dismissed the petition as procedurally defective and, alternatively, found no consumer-oriented deception, no repeated or persistent conduct, and excused Wilco’s actions on commercial impracticability grounds.

## Issues

1. Whether the Attorney General’s petition in the special proceeding was procedurally sufficient.
2. Whether offering a two-year fixed-price consumer contract and later imposing unilateral price increases constitutes deceptive acts or practices (GBL § 349) and false advertising (GBL § 350) affecting consumers at large.
3. Whether Wilco’s conduct constituted repeated fraudulent or illegal acts or persistent fraud or illegality under Executive Law § 63(12).
4. Whether commercial impracticability based on wholesale price spikes excused Wilco’s conduct for purposes of liability under the cited consumer-protection statutes.

## Decision

- The Appellate Division reversed the dismissal, denied Wilco’s cross-motion to dismiss, reinstated the proceeding, and remitted for further proceedings on relief.
- The court held the petition was not procedurally defective because Wilco had notice and an opportunity to respond and waived any stricter service requirement.
- The court determined Wilco violated GBL §§ 349 and 350 by marketing a fixed-price contract and then refusing to honor the most material term—price.
- The court determined Wilco violated Executive Law § 63(12) because the conduct was repeated and persistent, given the broad mailing and implementation across many consumer contracts.
- The court rejected commercial impracticability as a basis to avoid statutory liability in these circumstances.
- Wilco’s post-investigation credits and reinstatement of fixed prices did not eliminate the violations or bar statutory remedies.

## Legal Principles

- A business commits a deceptive act (GBL § 349) and false advertising (GBL § 350) when it markets a consumer fixed-price offer and then unilaterally changes the price, especially where price is the most material term.
- Consumer-oriented conduct affecting the public may be shown by widespread solicitation and multiple consumer transactions; it is not limited to individualized disputes.
- Conduct applied across many transactions can satisfy Executive Law § 63(12)’s requirement of repeated fraudulent or illegal acts or persistent fraud or illegality.
- Remedial steps taken after an investigation begins do not negate prior statutory violations or foreclose injunctive and monetary relief sought by the Attorney General.
- Market price increases do not, without more, excuse statutory consumer-protection violations arising from a seller’s decision to offer and publicize a fixed-price commitment.

## Conclusion

The appellate court held that Wilco’s two-year fixed-price marketing followed by unilateral price increases constituted consumer-oriented deception and repeated illegality under New York’s consumer-protection enforcement statutes, reinstated the Attorney General’s proceeding, and remitted for determination of appropriate remedies.


People v. Wilco Energy Corp., 284 A.D.2d 469, 728 N.Y.S.2d 471 (N.Y. App. Div. 2d Dep’t 2001)