The Quark-X is powered by quantum accelerated coherent collapse (quacc) of Meshe Gas with itself. E-cats are fueled with liberal applications of Flabber Gas and Rossi Grease. Rossi v. Darden provides a limitless supply of flabber, enough to serve the needs of sarcastic writers far into the future.
Every time I look at Rossi’s blog, or at the case documents, there is no shortage of material, the question is always where to begin.
Mike Dunford of The Fogbow was flooded with flabber, reading the License Agreement. I am told that Fogbow is flooded with lawyers. I’ll agree, it seems that way, but … it takes all kinds. In any case, Mike reported that he had to read the Agreement more than once, because he wasn’t believing what he was reading. It couldn’t be that stupid.
Of course, Mike has not been following Rossi. It could be that stupid, and routinely is. So, then, the koan: if Rossi has the reverse Midas touch, that whatever he touches turns to shit, why did Industrial Heat, which has a long history of engaging with risky ventures, and which certainly would afford counsel and indeed, had in-house counsel handling IP issues, go ahead and agree, and pay Rossi $1.5 million for the Plant and $10 million, based on a very shaky “Validation Test”?
That is a koan for advanced students. The answer I came up with is counter-intuitive, but few of us would have the intuition needed to cope with Darden’s primary business, Cherokee Limited Partners, an LLC that creates many LLCs, each one taking on some risky project. If these projects fail, they will lose up to $25 million or so of Cherokee Funding.
Normal thinking Is that if a risky business fails, the investment was a mistake. However, nothing ventured, nothing gained. The business of Cherokee would not be in avoiding risk, as such, but in estimating, perhaps quantifying it, and comparing that to possible gains. CIP projects might fail more often than not (though I don’t think they do), but if CIP invests in projects with sufficient possibility of success multiplied by the probability of success, it cannot be said that an investment was an error, merely because it failed.
If Darden et al’s sense of possibility and risk is, in general, more likely to be right than wrong, in mercato veritias. If they are losing money on every transaction, but trying to make up for it with volume, they would not be running a $2.2 billion investment fund, apparently successfully.
In 2011 and 2012, Rossi enjoyed massive publicity in the LENR world. He was commonly discussed on the private CMNS list My sense of the majority opinion was that it was possible he had something, but his rejection of sound scientific approach (“I don’t need controls, because I already know what a control will do: nothing”) was very visible. The errors of Kullander and Essent were obvious. But those errors did not prove that Rossi had nothing, only that their conclusions were flawed. And that Rossi was “eccentric.”
It appears that by 2012 Darden et al had decided to enter the field of LENR research and development. It appears that their first investment was a modest one, in Brillouin Energy. However, all other LENR working groups were working with modest levels of power, at best. Clear XP at a watt is often considered a significant result.
Who would want to invest in technology that is so far from commercial feasibility, when Rossi was claiming many kilowatts? They decided that they needed to know the truth of Rossi’s claims, and they needed to know either way, because the uncertainty was causing harm to the field. There is an IH deposition where they stated that if there was any possibility of a reality underneath Rossi’s bluster and even obvious deception, if this was as low as 1%, it would be worth continuing. In 2011-2012, I would have estimated the possibility of Rossi Reality (i.e., a real LENR effect, generating significant power, as would be known with conclusive tests), at perhaps 10%. (90% he was mistaken or creating fake demonstrations.)
Given that functioning LENR at the power levels claimed (say 10 KW per reactor, at a COP of 6) could be worth a trillion dollars, a 1% chance of success could be worth $10 billion (but investors would’t cut close to those values, unless the buy-in is truly cheap.) They were obviously willing to risk about $20 million. I would assume that they knew it would be difficult to recover that investment if Rossi were insane or even a deliberate fraud, unless actionable fraud could be shown, and if Rossi had let matters stand as they stood before the fraudulent Guaranteed Performance Test, he might have gotten away with it all.
It didn’t work out that way. That Rossi took IH to court has to stand as a major mystery in this case. I explain it with insanity, which more or less means “it doesn’t make sense.”
However, I have called the IH investment “brilliant.” That’s because it created desirable results. Confining desirable results to commercial success with the Rossi technology will miss that they wanted to find out, and to find out they needed independent testing, fully under their own supervision, and validated by others. To do that they needed to buy the IP. So I assume that they had already decided to accept the Validation Test, no matter how much it stank.
Rossi wrote the Agreement. It’s bonkers in many ways. It gets even worse to see how Rossi interpreted it and the Second Amendment. IH could see this, I’m sure, it was immediately obvious when I saw the Agreement, and more than one lawyer has opined in this direction. Mike saw this, from the Agreement, section 16.18.
Any controversy or claim arising out of or relating to this agreement, or breach of it, shall be settled exclusively by the Court of Miami, Florida, USA.
Rossi did not have a lawyer draft the agreement. As Mike points out, this is a $100 million agreement, secured with an immediate $1.5 million payment. In case anyone doesn’t notice, there is no “Court of Miami.” This usage is common on Planet Rossi. Given that the specified court does not exist, for it would necessarily be referring to a specific court, this was a major flaw. However, the entire thrust of this provision is something that no ethical lawyer would recommend. IH certainly had fallen into a “controversy,” but lawsuits are a last resort. Before then, instead of jumping into Court to settle the issues, the parties will attempt to settle the issues, by negotiation. Instead of attempting negotiation, before the end of the “test,” where IH raised their lack of agreement to GPT and ERV — which is very well supported, possibly enough for summary judgment — Annesser threated to sue them immediately for anticipatory breach. Pugncious in the extreme. Lawyers like this create losing situations for their clients … but more legal fees.
However, it is possible that Annesser was just following orders. The lawyer had a fool for a client.
Another little tidbit from Rossi’s blog:
Dear Mr. Andrea Rossi.
I wish you success in court.
You will win! Serious interference in your work will be eliminated.
Advise where you can follow the course of judicial supervision.
June 23, 2017 at 10:46 PM
Thank you for your sustain.
I think the official pacemaker is the source for information on internet, but I am not sure.
There is common opinion that Rossi is many of those who comment on his blog. For some of these, evidence is reasonably clear. However, in this case, the question may be sincere. Rossi’s answer, again, shows his lack of clue. There is at least one follower of Rossi who has acknowledged the value of this blog, and especially of the Docket page here.
The “official source” is PACER. See our introduction to the docket page. “pacermaker” or “pacemaker” is a complete error We have also seen “the pacermaker of the Miami Court.” Or variations. PACER is the document retrieval system of the U.S. Federal court system. It happens that the United States Federal District Court for the Southern District of Florida is currently located in Miami.
Pacermonitor is a site that sells access, and that, for a short period of time, shows the Docket entries. They charge roughly twice what PACER charges (Pacer is being sued over the fees being illegally high, at ten cents per page, with no limit for some documents, like the docket itself, they charge to show a subscriber the index to the documents.)
So if the questioner is sincere, Rossi misled his supporter. Someone with a conspiratorial mind might think that he doesn’t want his supporters reading the actual documents. Some have bailed after reading them.
Rossi also says that the trial begins June 26, tomorrow. Maybe. The information I have is that it begins Wednesday June 28. I will be talking with the Court tomorrow, and, obviously, I will be checking. Rossi also treats “one month” as a fixed length of time. He’s naïve. However, it may not matter.
i have confirmed, this morning (Monday) with Altonaga’s office. 12:30 PM Wednesday, June 28 starts jury selection. I knew this last week (I.e., I had information, and I was told it was public.) So why didn’t Rossi know it?
25 thoughts on “The study of Rossi v Darden provides an endless supply of flabber.”
When you say, “However, the entire thrust of this provision is something that no ethical lawyer would recommend,” are you referring to the choice of law/choice of forum clause itself, or just the pathological example included in this contract?
If you are limiting that to poorly drafted clauses, I wouldn’t disagree. Lawyers have a duty of competence, and serious breaches of the duty of competence can reach the point where they become ethical issues. This particular example is the kind of thing that would be more likely to involve a malpractice carrier than a licensing agency, but it’s still the kind of thing that a good lawyer would want to avoid. To use a medical analogy, a pathological choice of court clause is (usually) more like a doctor misdiagnosing a hairline fracture as a sprain than the surgeon leaving a clamp in the patient scenario.
If you’re talking about choice of law and choice of forum clauses in general, I have to disagree. Their inclusion is standard practice, for good reason, in contracts that touch more than one jurisdiction. That’s true for multi-billion dollar mergers, and it’s probably true for most of the end-user agreements for the software you use. Questions of jurisdiction and choice of law can be painfully complex to unravel and can result in years of litigation delays. Most jurisdictions globally will permit the parties to include contract terms that dictate the choice of law, and (sometimes) the jurisdiction that will hear any disputes.
The first part of the clause in this contract – which declared that the contract would be subject to Florida law – has almost certainly saved a great deal of time. If that clause was missing, there’s a very good chance that Judge Altonaga would have had to spend considerable time determining whether the contract should be interpreted based on the principles of Italian law, Florida law, or the law of some other American jurisdiction. And there are issues in this case (like the ones around the entire agreement clause) where the choice of which law to apply might determine which side prevails on that issue.
The problem was not the choice of state law nor the establishment of jurisdiction. The problem was the lack of process for resolving disputes before going to court. The clause was strangely worded to me. Seen in the light of what Rossi actually did (sue immediately, actually prematurely), this betrays Rossi’s thinking. Minor point, there was no demand letter, sent when the payment was allegedly past due. I think Rossi had the idea this would go to court when he drafted the agreement. I don’t think that was the work of an attorney. There are some clauses that may have been inserted by IH. Payment of taxes, for example (showing they were aware of Rossi’s past).
Aside from the glaring error in the specifying the court with exclusive jurisdiction, the clause language did not seem strange to me. My suspicion is that it’s boilerplate that was lifted from somewhere else – maybe a sample tech transfer or licensing agreement in a book or found online, maybe from another contract.
The lack of an ADR provision doesn’t strike me as terribly strange. Some people like ADR, some consider it to be a lack of time – particularly since it’s hard in practice to enforce a clause mandating a sincere attempt at resolving a dispute.
Assessing “sincere” can be impossible, and I wouldn’t put that in. But the record shows no attempt at negotiation at all, just demand and threat (and then later claims by Rossi — especially in his blog — that IH had not warned him that the Doral test wasn’t proper as a GPT. “Only when it came time to pay …” was his refrain. The man lies on his blog, and he was more careful in testimony, but still lied.
Yes, Rossi may have picked up the general language from some contract. This was clearly his insertion, though. I would not think an attorney would suggest just this clause with just this language in a friendly agreement with someone offering up to $100 million, and with no other such offers pending. Rather, even friends may have disagreements, some of which would not affect the Agreement.
Rossi’s long-term behavior was “my way or the highway,” or, in this case, the Court of Miami. You betta or I sue ya.
I’m off to see the Wizard.
I’m still not totally sure what you’re trying to say, so forgive me if I’m replying to something other than intended. I’m particularly not sure what you mean by “just” this clause and “just” this language.
But friendly contract or not, I have a very hard time seeing an attorney draft any agreement without similar language. To give you an example of how basic it is, here’s the language from my own personal template for an IP license. I drafted the template as an exercise for a class (which I aced) several years ago, and have tweaked the language a bit here and there since, as my international commercial law knowledge has expanded:
“The Parties expressly agree that this Agreement, and any dispute, controversy or claim arising under, out of, or relating to this Agreement and any subsequent amendments of this Agreement, including, without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual claims, shall be governed by, construed, and enforced in accordance with the substantive laws of [JURISDICTION].”
That’s in the template that I would use as the starting point if a friend came to me and asked for help drafting an IP agreement of any kind. (Including an end-user license for software.) Friendly agrement, hostile agreement, arm’s length deal, whatever. The very next clause in the template covers either arbitration or choice of court – I’ve got pre-drafted clauses for both options. (I’m actually a bit surprised that the license in this deal didn’t have a mandatory arbitration clause. Arbitration is a formal dispute resolution method, usually quicker and cheaper than a lawsuit, provides more opportunity to keep things secret, and arbitration awards are often easier to enforce in other countries than court judgments.)
My template does not have a pre-drafted ADR clause or cooling-off period, or other provisions regarding handling disputes pre-lawsuit.
Zero problem with that, as I already wrote, stating applicable law and jurisdiction is more than okay, it’s wise. It was the rest of the language, requiring that disputes or “controversies” be taken to the “Court of Miami” that I find odd, in a way consistent with actual Rossi/Annesser behavior, as if they so strongly believed that negotiation would be useless that they made no effort, only raw demand.
I still have a similar provision in my template – it’s just that I split it out into a separate clause. That’s partly to make it easier to swap between arbitration clauses and court clauses based on what’s appropriate to the case, and partly just a stylistic choice:
“[OPTION 3 COURT]
The Parties expressly agree that this Agreement, and any dispute, controversy or claim arising under, out of or relating to this contract and any subsequent amendments of this contract, including, without limitation, its formation, validity, binding effect, interpretation, performance, breach or termination, as well as non-contractual claims, shall be subject to the exclusive jurisdiction of [COURT].”
The word ‘controversy’ is, to be honest, probably unnecessary. But it’s standard practice to use multiple duplicative words in contracts, probably because someone lost to the mists of time got into trouble once for leaving one of the synonyms out. (In fact, I suspect I cribbed that list of synonyms in my model from somewhere – a World Intellectual Property Organization model clause, maybe.)
Including “controversies” doesn’t mean you get to take just any dispute over the contract to court – courts tend to get cranky and throw you out if you don’t have an actual cause of action – it’s just basic duplicative boilerplate to cover all possible bases.
The only problem with the clause in the Rossi contract was the “Court of Miami” language. That was a problem because it was sloppy enough that a good commercial litigator could, if so inclined, (1) use the ambiguity in the clause to argue that whatever Miami court they are in isn’t the right one and the other party is in breach by the very act of bringing the case to the one they are in; (2) use the ambiguity as an excuse to ignore the clause (on the grounds that it can’t be complied with) and bring an action or counter-action somewhere other than Miami; or (3) work any of several other kinds of mischief to further delay and drag out the case. It was literally the kind of simple mistake that can turn an otherwise adequate clause into an epic disaster.
“i have confirmed, this morning (Monday) with Altonaga’s office. 12:30 PM Wednesday, June 28 starts jury selection. ”
Are you still planning on attending the trial? If so, is the schedule firm enough that you have been able to make travel arrangements or a firm itinerary?
As with many, I hope this trial brings an end to a long, problematic story! I doubt that it will unless a government agency steps in to press criminal fraud charges. But who knows?
I am in Miami, getting my sea legs after a 40-hour bus ride that arrived at 4 AM Sunday. I had raised enough for a two-week stay. I have a fantastic room 4 blocks from the courthouse. Donations are still coming in, so I may be able to afford to stay the duration of the trial; I have not made the decision yet.
Your decision better be to stay in DC and you should check your email.
Good luck and enjoy this break you deserve it for all the work you do.
I am a truck driver from Canada and not smart
enough to work for Alan.
I think if Rossi is a fraud Mary Yugo will be
one who had it right from the start.
I agree with you, that is why I take Mary to task. He may be right anyway enjoy the summer it is too short up there. He is literate just needs to come out of his ‘you are an ass’ response and say why it is true. I have been trying to work with him and I think he is putting more thought. I love clarity.
It is quite possible to present a stupid argument that supports a correct conclusion. and it is quite possible to make a decision based on the best information that later turns out to be “wrong.” Pseudoskeptics and yellow journalists often are “right,” but they are not reliable judges. Judgment itself is subjective, distinct from fact. Facts may be cherry-picked to create impressions, etc.
Obviously,Mary Yugo has been right from the start.
“Right” and “wrong” are complex judgments reduced to massive oversimplification, that fall far short of depicting reality. I met real people today, in a room full of real people. I smiled at Dr Rossi (and yes, I called him “Doctor,” even though I knew that Chaiken erred in saying that he had earned a “PhD” in Italy. I introduced myself, and from his response, I think he knew who I am. He did not stop smiling, and remained cordial. I also talked with Vaughn at some length, and with Darden, and both thanked me for coming. I chatted with Christopher Lomax. I watched jury selection, many ordinary people there to serve, I will write more about that.
Mary Yugo has contributed nothing, only standard armchair pseudoskepticism. A peudoskeptic might be “right” as to some statement, but will not create knowledge, just argument and dismissal and contempt with no resolution. The parties in this case are paying millions of dollars for resolution, clear evidence and conclusions, not mere speculation or opinionated belief.
checking email is a little difficult right now. I’ll eventually do it. I have looked over the headers, which I can see in my spam filter. More information would help. (I can read an email if I can find it in the vast pile of non-spam mail I get, and if the filter (operating on settings that were two years old) didn’t kill it.
Meanwhile, DC is still on the agenda. I’m off to the Court in a few minutes.
Lomax, thanks for all the work you do. Did you ride instead of fly because you don’t like to fly?
I rode the bus because I could walk to the bus station from home, and it may have been cheaper. I have not decided yet how to return. The plan is to go home via Washington DC. I will probably check out flying there. While this was my third 40-hour bus ride, (ICCF-18 both ways), I’ll be considering it carefully before another. I made the mistake of not bringing a blanket. They don’t understand hypothermia.
I rewrote this comment 2X this so here is the nice version. I want the good Doctore to own up this time. I want Dewey to make sure this happens. Abd I want you literally to see it happen. I want TTH to admire the work when it happens. If they settle it would be bad. He is a crook and it is getting absurd.
Did I miss anybody?
Dewey we do not seem to be clear a lot of times– are we clear now?
Yes Dewey are you and all the little Angels of I.H clear now.
Sam no one is an angel here why are you mumbling say what you want to.
And I surely want Dewey to hear me. Else why would I invoke him. I want this trial either way to go quick. Then get LENR back on track. I hate mumbling.
I was being impudent and
I apologize for that.
But I think Abd favours I.H.
and writes like they did no
Mary Yugo who mistrusts
Rossi more than Abd but
he has no sympathy for I.H.
This is one of M.Y. comments from Lenr forum.
Apr 30th 2017
Why anyone would let the benefactor of $89 million take the water meter readings the money is ultimately based on is beyond me.
A lot of the absolutely stupid and ridiculously incompetent things IH (Darden and Vaughn) did in this whole incredible affair are beyond belief. Why did they not get independent confirmation of earlier simple high performance (18kW on a tabletop) Levi-type tests? By a famous test lab or major university **department** (not a few unknown scientists)? Why did they proceed with a completely absurd and unnecessary one year test which cost them $10M, and then allow Rossi and a few strange characters who worked for Rossi run the whole show? Why did they allow testing of multiple reactors at the same time when it would have been simpler and cleaner to test just one at a time? Why did they not have some reputable and knowledgeable third parties (heat flow, fluid flow and electrical measurement specialists) go thoroughly and cautiously over the experiment while it was running, looking for errors and sleight of hand tricks? Why did they not let such a team carry out calibrations upstream (at the input) and downstream (at the output) of Rossi’s instruments, using entirely their own instruments? Why did they not check how the heat allegedly being used was in fact disposed of and measured, using their own experts? Did they not read all the allegations on the internet about what Rossi had done in the past (nothing but fraud and disasters and failures)? Even if they did not entirely believe it, why were they not more alert to the chance it might in part be true? Yes, it’s beyond belief — the whole thing is. IH’s people have no business whatever investing other people’s money in technological ventures and IMHO, if shareholders of IH or Woodford lose money, they should group together and sue to get it back.
That Was Easy.
Let’s put it this way: I’m willing to cut a lot of slack to a group of investors who were willing to take major and obvious risks to promote LENR. They put together, the leaders and friends, $20 million of their own money, and there is no reasonable sign of any fraudulent inducement on their part. The documentary record is clear. That is not to say they made no mistakes, I think they did, but I have the benefit of hindsight.
I do think that they suspected Rossi would attempt to create a faux GPT, though it is not clear when. Annesser was threatening a suit for “anticipatory breach,” but that was an empty threat. Annesser is deeply involved here.
Rossi, suspending replies on JONP, said that comments on the case would be spammed, which indicates that Rossi uses the blog spam tool to censor what he doesn’t want posted, which then indicates approval of what is posted. And attack on Cherokee continues, repeating what is, at best, mindless misunderstandings, and, at worst, libel. It is not being spammed.
By citing Mary Yugo, Sam, you discredit yourself. MY is a long term pseudoskeptical troll who lies to promote his vision of truth, starting with name and gender. I have come to commonly ignore those ravings. If you have a claim to make, Sam, make it yourself, take responsibility for what you write, don’t bring Mary here as some kind of authority.
I have never seen MY show any sympathy for anyone who thinks outside of his boxes. They must be stupid, or worse. The IH people commit the double sin of not only being gullible fools, but they are wealthy, having stupidly made many risky investments that paid off, so they could have retained experts. By which he means him, someone right-thinking like him, the intrepid exposer of scams. Creating that identity, he picked obvious frauds, like Sniffex and Power Balance. Or Steorn.
Genuine skepticism is an essential part of how science advances. Those who take the time to write researched critique are heroes, where they do not confuse their own opinions with Truth, which is a Believer position, not skeptical, hence “pseudoskeptical”, Truzzi’s usage.
Sam you are fine. I was just not clear on what you were saying. I try to get to the point. I hope I was not being offensive as I just wanted to know. The Rossi circus is just that. The shell companies are so normal that there is no point in addressing them. These entites like to stay that way. With regards to you am not sure sometimes as we have multiple sams on LF and ECW. So if you are the one that works with Alan you are a nice person. If this is you then you are earnest and working for a common goal. If you have noticed I have been working with Mary Y to up her game as it were. We do not have to agree but we need to be more descriptive. I want Mary to add to the debate.
SAM, that is pushing it. “Crook” is as well, but is closer to what is being tested in the trial, fraudulent representation. As well, the common term for what Darden and Vaughn did is to be “angel investors.” But in real life, such do not always act like angels. If I were James Bass, I would not count on forgiveness. I’d get it in writing, checked by a lawyer.
However, here and other places where the alleged evil of Cherokee and thus Darden et al is being alleged, it’s spite. Cherokee could be out, pissing in the Potomac, and it would mean nothing in the trial. If I am a criminal, even, and you steal from my store front, you can still go to jail.
But Cherokee isn’t pissing in San Francisco Bay, and all we have seen from Leanne and/or Jeanne is fluff, documents not understood by those waving them. Reading the case documents helpfully provided by Rossi, Darden is looking to me like a true angel investor, the kind honest inventors would give their eye teeth to find. And, before signing anything, they should consult a lawyer!!! Rossi believed what was impossible about Cherokee, almost certainly misunderstanding what was said to him. Any lawyer would have corrected him. … or he is just plain lying. I’ll get to see his face when he testifies.