Industrial Heat’s Motion to Dismiss Denied in Part, Granted in Part (Update: Full Decision Added)

There’s an announcement from yesterday (July 19, 2016) on the Rossi vs. Industrial Heat’s Court Docket regarding the Motion to Dismiss that Industrial Heat filed and Rossi responded to:

ORDER granting in part and denying in part17 Motion to Dismiss for Failure to State a Claim. Counts II, V, VII, and VIII are DISMISSED without prejudice. All other counts remain intact. Signed by Judge Cecilia M. Altonaga on 7/19/2016.

So these are the counts from Rossi’s complaint that are intact and dismissed:

Count I: Breach of Contract (Non-Payment) Intact
Count II: Breach of Contract (Exceeding Scope of License) Dismissed
Count III: Unjust Enrichment Intact
Count IV: Misappropriaton of Trade Secrets Intact
Count V: Civil Conspiracy to Misappropriate Trade Secrets Dismissed
Count VI: Fraud and Deceit Intact
Count VII: Constructive and Equitable Fraud Dismissed
Count VIII: Patent Infringement Dismissed

So Judge Antonaga has spoken: half of the complaint has been upheld, and half thrown out. There is probably satisfaction and disappointment for both sides of the case from this decision. Where Rossi might be most disappointed here is with the decision to dismiss his complaint that IH breached their contract by operating outside of their license area, and filing patents based on Leonardo’s IP. This decision could allow IH to continue to file patents worldwide based on the E-Cat.

Industrial Heat might be most disappointed that while the claim for Constructive and Equitable Fraud has been thrown out, the claim for Fraud and Deceit still stands. Also, that they may be required to pay the $89 million license fee.

UPDATE: The full document on this ruling by Judge Antonaga can be read at this link: http://www.e-catworld.com/wp-content/uploads/2016/07/Motion-to-Dismiss-Judgment-Rossi_et_al_v_Darden_et_al__flsdce-16-21199__0024.0.pdf

  • Engineer48

    Will be interesting to finally read what IH has to say and who are the 3rd parties?

  • Obvious

    What if the Lugano reactor already had about 4 to 5 grams of slightly more coarse-grained Ni62 in it before the Natural nickel “fuel” was added? The likelihood of selecting pure Ni62 grains for testing from the fuel, before going into the reactor, would be almost zero. But after the test, the odds of selecting slightly larger grains of Ni62 from the ash would be fairly high. The same could have been done with a Li6 compound (possibly cementing the Ni62 inside during the fuel insertion.

    Hypothetically, of course.

  • sam

    From Lenr forum

    Court Docket (25 ORDER that by July 26, 2016, the parties shall select a mediator pursuant to Local Rule 16.2, schedule a time, date, and place for mediation, and jointly file a proposed order scheduling mediation. Signed by Judge Cecilia M. Altonaga on 7/22/2016. (wc)

    Judge John J O’Sullivan may be well placed as ‘mediator’ fba-sdfla.org/wp-content/uploa…sullivan-octnov14.pdf.pdf but could be another court official.

    Is this a signal that the parties do not want to go to full trial or just the next step in the court procedure?

    Best regards
    Frank
    Post was edited 1 time, last by “frankwtu” (Yesterday, 9:56pm).
    Alan Fletcher
    User Avatar
    Forum-Beginner
    Yesterday, 10:09pm
    This an automatic step in the legal process.

    Edit : since the motion to dismiss was denied (or at least suspended pending discovery, eg the “6-cylinder” question, which Rossi answered on his blog) I would have expected the next step would be for IH to file an actual answer to the “intact” complaints. (Even if just saying “we deny all allegations”).

    • GiveADogABone

      Just saying ‘we deny all allegations’ is not good enough.
      Rossi and IH agreed in the licence agreement to abide by the ERV report and its conclusions, particularly the measured CoP. IH have to comprehensively prove that the ERV report is fundamentally flawed, otherwise it stands. That comprehensive proof, if such exists, will be subject to the laws of perjury.

      • Bruce__H

        “IH have to comprehensively prove that the ERV report is fundamentally flawed, otherwise it stands.” This certainly makes sense but is it the actual legal situation? Do you know? What level of proof is required? Who is the burden of proof on? I can guess, along with others, but I wonder what the actual legal rules say.

        • GiveADogABone

          This certainly makes sense but is it the actual legal situation?
          According to the licence agreement, yes.

          Do you know?
          After reading the licence agreement, yes.

          What level of proof is required?
          The level that will convince the jury, if it goes to trial.

          Who is the burden of proof on?
          The defendants.

  • Veblin

    E-cat suit moves forward against Raleigh investors

    Jul 25, 2016, 10:38am EDT
    Lauren K. Ohnesorge
    Staff WriterTriangle Business Journal
    http://www.bizjournals.com/triangle/blog/techflash/2016/07/e-cat-suit-moves-forward-against-raleigh-investors.html

    • GiveADogABone

      1: ‘If mediation isn’t scheduled, the entire case could be dismissed, the according to the order. Vaughn didn’t respond to a request for comment, but has said the case against Cherokee is “without merit”.’

      If Rossi is active in trying to set up mediation and IH are not, then how is ‘the entire case [brought by Rossi] could be dismissed’ anything like justice? That looks to me more like a default judgement in favour of Rossi.

      2: ‘In a separate court document, filed July 22, the parties were ordered to schedule mediation by July 26. The deadline had initially been July 21 but, according to court records, that hasn’t happened.’
      Who is dragging it out? Not in Rossi’s interest to do so. The order for mediation dated July 26 is the court putting its foot down after a missed deadline and saying get on with it or else.

      • Abd Ul-Rahman Lomax

        Read primary sources, if you want to know, and read informed commentary. I uploaded the Order on scheduling mediation, it is linked from here: https://groups.yahoo.com/neo/groups/newvortex/conversations/messages/804 and followups cover the Rules and implications.

        Notice that I used quotation, and yahoo, irritatingly, suppresses display of that, so press the “Show message history” button to see it. Bottom line, making sure that mediation is scheduled is the plaintiff’s responsibility. Had Annesser (Rossi’s attorney) filed a request with the Clerk as would be procedure if the defendant was not cooperating, I doubt that the Judge would have issued the Order she did. So Annesser screwed up. He has until today, or the whole case might indeed be thrown out.

        • GiveADogABone

          Good find and a potentially serious error. I guess we now look for the filing report in the next day or two?

          • Abd Ul-Rahman Lomax

            I don’t know. A request to the Clerk might not show. If the lawyers agreed, they would probably file the appointment today. I’m following the free docket, because I don’t want to pay for docket pages… It occurs to me how I can check…. I’ll do it….

  • Michael W Wolf

    Does it matter what tests? IH built both. If the second one they built doesn’t work, that is on them. But it looks like it did indeed work.

  • Michael W Wolf

    Darden confirms isotopic shifts in a public interview. Besides, there is a chance that Rossi’s newer devices get that spectrum that mills gets and Mills claims there is no isotopic shift. We assume isotopic shift is evidence of lenr happening. IT may be that isotopic shifts have nothing to do with output power.

  • Omega Z

    Bruce__H,

    The crux of the matter is excess heat meeting or exceeding minimum COP requirements of the contract regardless of isotopic shift or not. The contract asks for nothing else in that regard.

    • Engineer48

      Hi Omega,

      Yup.

      For IH to avoid paying Rossi $89m plus costs & damages, IH need to prove to the jury the ERV reported COP > 50 was actually COP <= 2.6.

  • Engineer48

    Hi Michael,

    Darden’s public statement that IH did see isotropic changes & energy creation when testing Rossi’s IP is now on the public record.

    No one can deny that or try to spin it away but I’m sure many will try to do exactly that.

    Weaver did early on say that after the $11.5m payment, the license was fully paid up, which could imply IH saw no need to pay the $89m.

    • http://www.lenrnews.eu/lenr-summary-for-policy-makers/ AlainCo

      this interview published in Fortune in september 2015, was in fact visibly done in April , and publisthe in the Business Triangle
      http://www.bizjournals.com/triangle/blog/techflash/2015/04/darden-cold-fusion-focused-industrial-heat-showing.html?ana=fbk

      even if it is not explicit, it sureful cite the Lugano test results which is discussed in the interview.
      It is true that at this time, Darden trusted the test, at least in public.

      note that the ERV test just had started, and the quarterly report seems not to be yet published.

      as Jed/Dewey report, IH was dissatisfied by the first reports, asked for correction, and was not answered.

      worst of all, and only sure things is :
      the usage of full emmissivity in lugano test is an huge error, and there is no question about it.

      this does not prevent the test to be right, is something else correct that error. however, given that undeniable theory error, there is no answer by Levi&al.
      Moreover Rossi did not answer anything either, and if there was an error of measured temperature, rossi who was present to setup temperature could not have ignored it.

      For me there is no room in “it does not work at COP>3/T>1200C” without Rossi being aware of it. I assumed it worked despite Levi&al’s error, but since nobody explained how the error was corrected, and given recent outing by Jed and Dewey (who are respectively financially independent, and financially involved in E-cat success, and both supporters of LENR) raise tons of red flags.

      note that one of the mystery is that grains extracted from the reactor after nickel should have melted looks too fresh, at best coherent with 800C as correction of emissivity lead.

      Many people imagine that we have been fooled by darden, by Jed, by Dewey…

      Sure we are fooled by someone.

      I think we have enough evidence to know who.

      PS: before the ERV ending, I filed 2 E-cat prereservation… I feel less fooled than Dewey feel, because I did not pay anything. I have just lost ego and time. Hopefully LENR is science… slow science.

      • Michael W Wolf

        Rossi publicly offered IH to forego the 89 million, all IH had to do was give up Rossi’s IP rights. Why didn’t IH take the deal, and why do they choose to go to court and risk the 89 million to try and keep IP right? Because that is all they have to gain in court.

        • http://www.lenrnews.eu/lenr-summary-for-policy-makers/ AlainCo

          first it is Rossi who sued IH.
          Second if things are like it looks, IH could ask for the 11.5Mn$ plus damages.

          Like Jed maybe do they think there is a tiny chance E-cat have some (even minor) reality, that they could transform into working technology and then business, to payback the 11.5Mn$ and 2 lost years, and the huge risk it won’t happen.

          It seems the plan of IH was not to go to court but to ask for what was in the contract until things are sure : it works, or it will never works.
          Notice how IH did not complain in public about the ERV and test setup.

          You can believe they are all lying, but this is nonsensical if Rossi have a working technology, given they have a license paid for half of the planet, to refuse to keep good relation with the inventor.

          On the opposite if there is nothing, as I say since long, a good stage magician have to keep controll of the stage, or sleep in the container. to attack when he cannot defend anymore.

          I’m just sad and tired.

          • Stanny Demesmaker

            Alain you’re deluded 🙂 There is a customer who says that it works. There are people who worked with Rossi and the e-cat who says that it works. What more proof do you need? Jed and Dewey are not credible sources.

            The most likely scenario is that IH is creating their own technology based on the e-cat.

            • http://www.lenrnews.eu/lenr-summary-for-policy-makers/ AlainCo

              Defkalion, Prometeon, then IH…
              Rossi is not lucky with his partners.

              Rereading Prometheon CEO complaints, republished by Abd recently, make me sad.

            • Abd Ul-Rahman Lomax

              What customer says it works? I have seen nothing from any customer.

      • Engineer48

        Hi Alain,

        My point was Darden stated IH had measured isotropic shifts and energy generation from Rossi IP.

        That statement is on the public record, admissible in court and credible.

        What Weaver & others who are not official IH spokespersons have stated are just hearsay, not admissible in court or credible.

        I doubt Darden will retract his statement in court as then his credibility is gone.

      • Abd Ul-Rahman Lomax

        Alain, the Triangle Business Journal interview has a different author from the Fortune interview. Yes, the Fortune interview seems anachronistic to me, given what we now know was going on by the date of publication, but it does not state when that interview was done. Fortune mentions Woodford, which happened in about May, 2015. Triangle only mentions the original capitalization of IH, as “nearly $12 million” in 2013.

    • Abd Ul-Rahman Lomax

      An attorney’s opinion was that the License existed from the $10 million payment in 2013, and was not unilaterally cancellable for nonpayment of the $89 million, which is merely an additional payment due assuming the Agreement was fulfilled. It would then be correct that they do not need to pay the $89 million to continue the License, but … they would still owe it, assuming that the ERV certified. Arguments here that the issue is the ERV certification that matters are correct as to the prima facie case. However, that is rebuttable. As an example of how the literal meaning of a contract may not hold, the Agreement explicitly provides that all parties must sign amendments and that the date of the 1 MW test must be agreed in writing signed by all parties. Does that hold? It depends. There is estoppel, which means that the conduct of the parties may signify agreement even if a technical detail is absent. Estoppel would be a factual determination, and the Judge decided that Rossi’s description of the history showed estoppel. If true!

      So, then, what was the background of the test? What was the purpose of the Agreement? All these will become important. The most obvious tactic for IH will be to allege that Rossi did not show them how to make working devices, and that argument could fly even if the 1 MW test, with Rossi living in the reactor, was “successful,” according to the ERV. And then IH could claim failure of specific performance, and that no further payment should be made until Rossi divulges all that is necessary for 1 MW plant function.

      They could also claim fraud, a different tack. Because of the way legal process works, they could claim both fraud and withholding of a necessary secret, even though ordinary thinking would be that those are contradictory. Law, however, does not require perfect knowledge. And the case is not likely to go deep into nuclear physics and isotopic transformation, that’s basically legally irrelevant here.