Industrial Heat Files Motion to Dismiss Rossi Lawsuit

Quote from quizzical

As far as I can tell, there is no "Six Cylinder" unit in the contract. [...]

I might add that I couldn't care less whether or not IH lost money on this contract. They are venture-capitalists and they are willing to take risks. I am also less sympathetic to them (even if Rossi is a fraudster) because of the one-sided nature of the contract.

Whether or not the contract was unfair or "one-sided" depends on who wrote it, primarily. Otherwise, it would be assumed that with a contract like this, both sides have counsel and have done due diligence.

The original Agreement refers to a "1 MW E-CAT unit," which was to be sold and delivered to IH. Apparently this thing was actually delivered. It was the unit to be tested. Refereces in the agreement to the extended test were to be of this unit, not something else. Obviously, anything that IH and Rossi subsequently agreed upon could modify the Agreement.

The first Amendment modified the delivery date for the plant to April 30, 3013, after the Validation test described. This is all part of the first exchange, $1.5 million for the plant, and $10 million for full disclosure of the IP and the license.

The second Amendment refers to the Six Cylinder Unit. What I notice, in this, and in the original Agreement, is that the test focuses on COP. The original agreement, minimum COP of at least six. In the amendment, a COP of as low as 2.6 still would be considered performance, but with reduced payment.

However, consider this. Suppose the plant has a COP of 50. Suppose input power is 10 watts. Suppose output power is 500 watts. COP 50. Does this satisfy the test? Would this be worth $100 million? Maybe. It depends on details.

I'm seeing comments essentially complaining that IH is "resorting to legal technicalities."

First of all, this is a court proceeding. Rossi supposedly has competent counsel. Legal technicalities matter in court process. Don't satisfy the technicalities, they will indeed throw your case out, but if there is a motion like this, the plaintiff may amend the complaint, if it is possible to fix the alleged problems. If the legal ducks are not in a row, the court will reject the case, possibly "without prejudice," meaning that a new action could be filed that was proper. Or with prejudice, which would mean that Rossi's complaint was really dead. I don't expect the latter. The former is possible. Or, even more likely, Rossi's counsel will get their act together and amend the complaint (or attempt to settle out of court).

Now, to the details of what the Motion to Dismiss discloses and what is visible from it ...

First of all, it is professionally written. It starts with four pages of legal authorities. If anyone actually wants to understand this motion, they may need to look at those authorities, at least as they are cited in the Motion. I'm not doing this at this time. It could be days of work. We will see legions of idiots giving opinions, however, who know neither law nor the facts of this case. It's the internet, after all.

Could this list be fluffed up? Sure. Lawyers seek to win, serving clients, and one method used is to make litigation more expensive for the other side. If someone sued me, I would drop a pile of interrogatories on them, questions that they are legally obligated to answer. I would not make it easy. I've actually done this, and professional counsel for the other side caved and agreed to settle on favorable terms. It saved a whole lot of trouble for everyone. They had, in the case, agreed to serve on contingency, thinking they were facing an easy target (an ex-wife of mine), so it would be easy money for them. Not. It was going to get very expensive, and they saw the handwriting on the wall. And yes, I would file technical motions, I did that in another case, a motion to quash. My goal was to delay. Time is money. And the result was actually justice. From being totally intransigent, the plaintiff instructed his attorney to talk with us, so we agreed to something fair. Which we would have agreed to in the first place. The delay probably cost the plaintiff about $30,000. It cost us nothing but a little time of mine in a law library. I hated reading law, where there was personal involvement. It gave me headaches.

The Introduction pretty much summarizes my non-lawyer impression of the Complaint, which appeared to me to have been very badly drawn, indicating one of two things: an incompetent lawyer, or one simply repeating what the client told him. A competent attorney will advise the client against this, but the client may insist on going ahead.

Reading on, the Motion is quite clear and appears sound. Notice this:

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Parties may not recast breach-of-contract claims as tort claims.

Right. I've pointed that out and a lawyer pointed that out.

Reading the Motion, I'm applauding, not on the basis of justice -- which is another matter -- but on the basis of clarity, cogency, and precise professionalism.

But what about the 400-day test? Aren't they going to answer about that? Several have pointed out that there is a very good possibility that the public will learn nothing about that test based on this case.

It was written here:

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I might add that this makes it likely to me that their motion to dismiss will be denied since the issues regarding the 1 MW test need to be decided on their own merits.

This is at this point legally irrelevant. My non-lawyer opinion is that if there is no amendment to the Complaint -- and it would need to be truly major -- the Court will dismiss it. If there is no proper complaint, the Court is not going to take up a case based on, say, some "need" to know. Need by whom? There is no party to this case representing the Public Need To Know.

What reading law taught me was clear thinking. Common thinking is fuzzy as hell, largely based on "I like it" or "I don't like it."

What could an amended complaint look like? It would probably be a breach of contract claim, failure to pay the $89 million. He could claim that the delayed performance was due to failures on the part of IH, say. and that the substance of those provisions was satisfied. By overstating the claim, tossing in fraud allegations and the kitchen sink, he may have made settlement more difficult. If he files that case, two things might be a part of it: one would be the ERV report, and the other could end up being full disclosure of the IP.

At this point, IH may be able to publish the IP, if they choose to do so. That's how I read their arguments in the Motion to Dismiss.

Let me put it this way: if someone holds your trade secrets, suing them is probably a very bad idea. There went your trade secrets! All it would take, even if you could get "legal protection," is that someone steals the documents and publishes them on wikileaks or the like. Gee, who would be so rude as to do that?

Remember, Rossi fans: Rossi is supposedly out to benefit humanity. If his secrets are gone, disclosed, open, does humanity lose? Wouldn't that mean that anyone could carry on the work, even if the Evil Conspirators try to stop it?

There could be a problem, though. What if he did not disclose his secrets? If he didn't, he was in violation of the Agreement, and he's basically screwed, blued, and tattooed.

And then we can see that IH is carefully avoiding the nuclear option, a fraud claim.

Dewey is right. Rossi is in trouble. I have always looked with some sympathy at his Petroldragon past, perhaps he really was screwed over by the Mafia. But ... did he effectively defend himself? Did he take reasonable protective measures, as he could have done. How did they manage to arrest and jail him?

If he had a lawyer in that affair, like he has in this one, an the lawyer was incompetent or he didn't listen to the advice, it's simply not surprising what happened. Again, I recommend and urge people to read An Impossible Invention, by Mats Lewan. Factor for Lewan possibly being unwilling to grossly confront Rossi, so the book understates criticism, avoids detailing it, because he could lose access, but ... a quite clear story of Rossi's character emerges.

The Motion to Dismiss and other documents are linked on Lewan's web site, in this post: https://animpossibleinvention.…-industrial-heat-for-89m/

Quote from IH Fanboy

stephenrenzz wrote:

So why did they then proceed to introduce those facts in the following sentences?

The MTD will assume and examine only what is in the Complaint. If it depends on something outside that, this could require court examination, i.e., further process. They might mention this or that, but it would be dicta, of no legal effect. I did not notice such "facts" in the MTD. If court process continues, later there can be a motion for Summary Judgment, which will consider all evidence before the court at that time, alleging that it is enough to decide the case, that there is no "triable fact" left. IHFB apparently has not noticed the "Six Cylinder Unit" in the 2nd amendment, so maybe he was referring to that. The Complaint includes all the documents filed with it.

One fascinating claim: the failure of Ampenergo to sign the 2nd amendment. So. You have an agreement that, if you satisfy your side, will give you $89 million. How careful are you to dot every i and cross every t? You already have $11.5 million. Do you have an attorney check everything?

The Fan club will scream that this is all unfair. But the attorneys for IH would be incompetent if they did not notice and point this out. Can this be fixed? Maybe. The intention was obvious. I suspect that the problem was that Rossi thinks of himself as all of these parties. He could have signed it for Ampenergo, perhaps, if he were authorized. Rossi actually did not sign for himself, but for Leonardo (corporation). [corrected} Rossi signed for himself, but also not for Leonardo.

I think he wrote all these agreements, perhaps putting in this or that which was demanded. If IH wrote the agreements, my opinion of IH plummets. But, as it was, I think that they believed that if there was a problem, it could be fixed. They believed that if it was a failure of the purpose of the Agreement for them to pay $89 million, they'd have recourse, starting with simply not paying. When I am party to a contract, and I supposedly agreed to something, and then conditions arise that actually makes it a rip-off for me to pay, I don't pay. Underneath the letter of contracts are the intentions. Many people don't understand that!

The additional "facts" mentioned above are part of the footnotes to pages 1 and 2 of the MTD, pdf page 7 and 8 in https://animpossibleinvention.…/ih-motion-to-dismiss.pdf

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Because Defendants are not permitted to introduce facts outside the Complaint and its Exhibits, this motion does not address, for example, the numerous errors in Plaintiffs’ purported “Guaranteed Performance Test” that the Complaint purposely ignores (such as departing from the purported test plan, ignoring inoperable reactors, relying on flawed measurements, and using unsuitable measuring devices).

It's a footnote, dicta, as I mentioned, but it might function point out to the Court that those additional alleged facts, that might not be supported with evidence, are irrelevant to the MTD. As another pointed out, this is telegraphing possible future counterclaims, which would be brought up if the MTD fails, I assume.

Was there a departure from the purported test plan? That seems obvious to me, from what else we know. How about inoperable reactors? While I have no information about such, some reactors may not have been "operable," and this would raise a reliability issue, very important as to the intention of the contract. How many reactors were replaced during the 400 day test? Let me be ridiculous to make the point! Say that Rossi was replacing 50 reactors a day, the ones pulled being sent for "repair." What could this mean? The Agreement does not provide any standard of power performance, only COP ... which is face-palm idiotic, on the face of it.

And, then, "flawed measurements" and using "unsuitable measuring devices" has been more or less common in the history of Rossi's demonstrations, so it would not be surprising for it to be an aspect of problems with the Guaranteed Performance Test. The issue of the ERV would then come up, and it's all a huge can of worms, that IH is sanely attempting to avoid by filing an MTD. Rossi will either reduce his claims, allowing the suit to go ahead, or the case will be dismissed, I predict. If it goes ahead, then all this crap may come out.

It will not necessarily all become public. That would depend on how the case proceeds.

But, with this note, IH has slightly fleshed out what they wrote in their press release on the suit. I would not read more into it than is clear. This is not a claim that there was no anomalous heat. It is a claim that tests were flawed. Which is SOP around Rossi, for years. Working with IH was one place where Rossi would, I'd think, have been advised to be rigorous, and to avoid any appearance of shirking full and complete and truly independent verification. For years, Rossi has stonewalled actual critiques, instead of clearly addressing them.

And going ahead and modifying the technology, to improve it, as Axil suggests is good practice, is not good practice, because it means that all prior testing no longer applies. If Rossi had the elements of a 1 MW reactor in 2011, as he claimed then, that he doesn't at least, by now, have products in relatively common industrial, investigational use is a mind-boggling demonstration of business incompetence, and I worried about that in 2011.

I warned CMNS researchers against jumping on the Rossi bandwagon, because even if the Rossi Effect was real -- and many thought so and I thought was quite possible (and, actually, I still do, absent actual proof of fraud) -- he could fail for reasons that have nothing to do with the reality of the effect, but for business reasons. Looking back, I think the warning was cogent.

Quote from Argon

Is there link to full 'Proposed Second Amendment' document (Exhibit D in complaint), which IH refers in their response.

Quote from Abd Ul-Rahman Lomax

The Motion to Dismiss and other documents are linked on Lewan's web site, in this post: https://animpossibleinvention.…ustrial-heat-for-89m/</a>

the page linked includes links to all the case documents.

Quote from axil

Project management requires that a change order process be followed when a change is made to a system.

en.wikipedia.org/wiki/Change_order

Why was the interface between Rossi and IH not handled in standard project management process via a change order?

This is truly hilarious. So funny that I'm not going to explain. Axil, you have me ROTFL. Congratulations! You win the Notice the Obvious Prize for June 3, 2016, and your submission will be entered in the contest for June and for 2016.