Rossi v. Darden developments - Part 1

Quote from THHuxley

Or, given that your posts here tend to be knocking down other people's evidence

But you have no evidence, only conjectures channeled from the pathoskeptic egregore, and the hearsay of other filibusterers

This was expected, being the joint motion requested by the Judge, to avoid duplicate arguments and process. See Third Parties in Rossi v. IH Court Case File Joint Motion to Dismiss Counter Claims Against Them which refers to the E-catworld post and links to the googledrive copy of the motion. This is 0069.0 on newvortex.

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Pursuant to this Court’s Order [ECF No. 62], Third-Party Defendants, J.M. Products, Inc. (“JMP”), Henry Johnson (“Johnson”), James A. Bass (“Bass”), United States Quantum Leap, LLC (“USQL”), and Fulvio Fabiani (“Fabiani”) (collectively, the “Third-Party Defendants”), by and through their undersigned counsel and pursuant to Rule 12(b)(6), Fed. R. Civ. P., collectively move this Court for the entry of an Order dismissing Counts III, IV, and V of the Case ...

The motion recounts the history of pleadings.

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7. In their Counterclaims and Third-Party Claims, Counter-Plaintiffs set forth over 100 paragraphs with allegations that purportedly support their claims, yet only a few of them involve or relate to Third-Party Defendants.

That is correct; however, the rest sets a context in which the interactions with Johnson, Fabiani, and Bass take on a meaning and purpose, allegedly a fraudulent scheme to create an appearance of a "Test" that would trigger an $89 million payment to Rossi.

The Motion goes on to claim that the evidence provided is not adequately specific.

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Count III of the Counterclaims and Third-Party Claims alleges that Rossi, Leonardo, JMP, and Johnson fraudulently induced IH into entering into the Term Sheet. (ECF No. 50, ¶¶134-139.) Counter-Plaintiffs’ allegations fail to comply with the heightened requirements of Rule 9(b), F.R. Civ. P., and the specificity necessary to properly plead a claim for fraudulent inducement.
“To state a cause of action for fraudulent inducement, a plaintiff must plead:
(1) the defendant made a false statement about a material fact;
(2) the defendant knew the statement was false when he made it or was without knowledge of its truth or falsity;
(3) the defendant intended that the plaintiff rely and act on the false statement; and
(4) the plaintiff justifiably relied on the false statement to his detriment.” ...

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I'm going to take a short-cut here. IH will respond in detail, I'm sure. However, the claims in the Motion with regard to Johnson seem to be directly contrary to what they recited. Their restatement is a little vague.

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9. Counter-Plaintiffs allege that “Rossi and Johnson made a number of false representations to IH, most notably that JMP was a confidential subsidiary of Johnson Matthey p.l.c. (“Johnson Matthey”), and that Johnson Matthey was interested in using the E-Cat technology in connection with a confidential manufacturing process it wanted to operate in Florida.” (ECF No. 50, ¶74.)

However, from the Second Amended Answer, which they cite, there is more detail:

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74. Also in furtherance of this scheme, Rossi, both in his individual capacity and as the representative of Leonardo, and Johnson, both in his individual capacity and as the representative of JMP, traveled to North Carolina in August 2014 to meet with individuals from Industrial Heat. During this meeting, Rossi and Johnson made a number of false representations to Industrial Heat, most notably that JMP (at the time called J.M. Chemical Products, Inc.) was a confidential subsidiary of Johnson Matthey p.l.c. (“Johnson Matthey”), and that Johnson Matthey was interested in using the E-Cat technology in connection with a confidential manufacturing process it wanted to operate in Florida. In fact, in August 2014 Johnson on behalf of JMP even warranted in writing that JMP “[was] owned by an entity formed in the United Kingdom, and none of Leonardo, Dr. Andrea Rossi, Henry W. Johnson nor any of their respective subsidiaries, directors, officers, agents, employees, affiliates, significant others, or relatives by blood or marriage [had] any ownership interest” in JMP. See Compl. Ex. B. (last page of Plaintiffs’ Exhibit). JMP, however, has never been a subsidiary of Johnson Matthey, was not operating or planning to operate any manufacturing process in Florida, and was in fact owned by persons whom Johnson represented in writing did not have any ownership interest in JMP.

Johnson is not going to succeed in getting the core complaint dismissed, it's been alleged with quite adequate specificity.

What about Bass? If, as alleged, JM Products was a fake company, Bass's role was an act, supporting a fraud. This is specific and easily disproven if false. I don't see that Bass can wave this away.

That leaves Fabiani. The claims against Fabiani are relatively vague, my opinion. However, this is what they have:

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78. JMP’s role further intensified when it, along with Leonardo, Rossi, Johnson and Fabiani went so far as to have Bass pose as Director of Engineering for JMP. Leonardo, Rossi, JMP, Johnson and Fabiani enlisted Bass to pretend to be a JMP employee serving as its Director of Engineering to make JMP appear to be a real manufacturing company that would need a Director of Engineering and to create a person with whom they would allegedly interact on technical issues involving JMP’s non-existent operations and operational needs.
[...]
88. As just one example, in late February 2016, shortly after the conclusion of the purported Guaranteed Performance test, USQL and Fabiani committed to send certain data and a report by the end of March 2016 that would “bring to light all the flaws and functional deficiencies of the system” and identify “the plant stop periods (total or partial).” In later emails, USQL and Fabiani also committed to provide Industrial Heat with the raw data that USQL and Fabiani collected while working with the Plant in Doral, Florida. Despite repeated reminders, however, USQL and Fabiani have refused to provide either the report or the raw data to Industrial Heat. See, e.g., Ex. 21.
89. Leonardo, Rossi, JMP, Johnson, USQL and Fabiani are all interconnected in a number of ways. As just one example, Johnson is currently listed as the President of both JMP and Leonardo. He is also the incorporator of USQL and remains its registered agent.
[...]
141. As described in greater detail above, Rossi, Leonardo, Johnson, JMP, Penon, Fabiani, USQL, and Bass (the “FDUTPA Defendants”) were all engaged in a common scheme against Counter-Plaintiffs.
142. The first part of the scheme was to manipulate Counter-Plaintiffs into allowing the Plant to be sent from the Industrial Heat facility in North Carolina – where any work on, operation of, or testing of the Plant could be supervised and overseen by Counter-Plaintiffs – to Florida, where Leonardo, Rossi, USQL, Fabiani, and Penon could operate the Plant and purportedly conduct measurements of the Plant’s operations away from the oversight and control of Counter-Plaintiffs.
143. The second part of the scheme was to manipulate the operation of the Plant and the measurements of the Plant’s operations to create the false and deceptive appearance and impression that the Plant was performing at astronomical levels, with COP measurements not only well in excess of anything achieved by any third party testing of the E-Cat technology, but in fact many multiples higher than anything achieved by any third party testing. [...]

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Fabiani claims a technical defect in the contract with USQL. That's not going to fly, His email to Vaughn (Exhibit 1) is completely adequate to establish estoppel on that. There are two claims against Fabiani, and the Motion confuses them. There is Breach of Contract, which is apparent in the refusal or failure to supply information. However, that is not the fraud claim, in itself. Rather, there is an allegation that Fabiani was involved in setting up Bass. As well, Fabiani spent countless hours over that year with the Plant, is a long-term friend of Rossi (they don't mention that), and would very likely have known that the "customer" was fake. IH is claiming that Fabiani was a supporter of the fraud, which is a distinct claim from the Breach of Contract claim.

Again, if there was no fraud, if the customer was real and there was real manufacturing taking place, using a high level of power, this will all fall apart, and strong evidence on this point can easily be introduced by the counterclaim defendants.

I write above that the case against Fabiani seems vague and weak. That's by comparison. It seems strong enough to stand pending discovery. The judge might want some specifics, perhaps how IH comes to suspect that Fabiani was involved in the recruitment of Bass or in the maintenance of other deceptive practice. However, given the contractual relationship, if Fabiani helped Rossi to hide anything about that Plant and the customer, including simply not disclosing what he knew or suspected, that would be enough to involve him in the fraud.

Barry West is a wild card here!

Quote from THHuxley

They may have been very foolish in their early dealings with Rossi. I expect they were convinced by the Lugano test which had they taken better technical advice at the time they would not have been. But I'm not certain of that, and in any case being overly optimistic about LENR is a pretty common mistake.

Some knowledgeable people commented more or less positively about Lugano at first. McKubre's review comes to mind. However, McKubre, in the same review, pointed out the huge problem that allowed major calorimetry error, he merely did not see the actual error. He assumed good faith (and I have no reason to doubt the good faith of the Lugano team) and he also did what was normal with scientific reports, he stated with an assumption that they had done their work properly.

IH, however, apparently did not simply accept Lugano results, they attempted to verify them, probably fixing the problems, doing proper calibrations, etc., and found no measurable heat. That, I would interpret, likely means "no significant heat," not enough heat to be sure it was not artifact. Bottom line, much less heat than was clained.

I would not call McKubre's early report "overly optimisitic about LENR." McKubre knows that LENR actually exists, the way I put it one time was that with P13/P14, the chimera of LENR licked him in the face and then walked out of the lab. He has seen, in his own lab, many, many strong evidences of reality. None of it, by the way, commercially promising; but his work with the Energetics Technologies replication was such that most cells showed significant heat, out of an extensive series.

IH knew what they were getting into, that seems obvious to me, and they did pay attention to experts, and did their own work.

To sustain the Planet Rossi story of IH greed requires accepting a major conspiracy theory that is implausible in many ways. The story will probably continue of Rossi v. Darden is dismissed on the obvious grounds, the conspiracy then extending to the U.S. courts.

There is a simple suggestion I have for Planet Rossi: support Rossi in creating products for the market, which he has always claimed was the ultimate judge. Attacking IH is simply going to waste Rossi resources. If he did have a functioning 1 MW plant in Doral, it appears that he so badly mismanaged the setup and operation of the alleged test that he cannot collect the $89 million, he would have to go back to square one. Let him do that later. For now, he needs a product that is actually in real use, that will be generating revenue for him and his partners. He has some issues to resolve because of his Agreement with IH, but that can be done. See if he will take good advice from his friends!