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Power Contracting, Inc. v. Stirling Energy Systems

November 22, 2010

POWER CONTRACTING, INC., GARY L. REINERT, SR. AND SAFE FOUNDATIONS, INC. D/B/A METAL FOUNDATIONS, LLC, PLAINTIFFS,
v.
STIRLING ENERGY SYSTEMS, INC., AND IMPERIAL VALLEY SOLAR, LLC., DEFENDANTS.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM OPINION AND ORDER

Presently pending before the Court for disposition is the PARTIAL MOTION TO DISMISS UNDER FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6), with brief in support, filed by Defendants (Document Nos. 21 and 22), the BRIEF IN OPPOSITION filed by Plaintiffs (Document No. 25), and the REPLY BRIEF filed by Defendants (Document No. 26).

After careful consideration of the motion, the filings in support and opposition thereto, the memoranda of the parties, the relevant case law, and the record as a whole, the partial motion to dismiss filed by Defendants will be granted.

Factual Background

The following facts are taken from the revised Second Amended Complaint. Stirling Energy Systems, Inc. ("SES") and SES Solar Two, LLC.,*fn1 have contracts to build and operate two large power plants with major California utilities. One of the solar power projects "is to be constructed in Imperial County, California and is known as the "Solar II" Project.

In early 2006, Gary L. Reinert, Sr. ("Reinert"), acting as a representative of Power Contracting Inc. ("PCI") and SAFE Foundations, Inc., d/b/a Metal Foundations, LLC ("Metal"), met with representatives of Schuff Steel Company ("Schuff")*fn2 "to discuss certain business arrangements regarding the introduction of solar power, including but not limited to the manufacture of one piece frames for solar dishes and metal foundations to be used in lieu of concrete, multi-piece foundations for sun catching systems using solar powered dishes in the Western states of the United States of America." Second Amended Complaint, at ¶ 11. Through discussions with Schuff, Reinert became aware "that SES was in the process of marketing its solar energy company . . ., in the form of solar dishes known as Sun Catchers, . . . and would require knowledgeable companies to manufacture the support frames for their dishes, and thereafter install the foundation for the dishes." Id. at ¶ 12.

According to Plaintiffs, following Reinert's discussion with Schuff, Metal proceeded to invent, design, and develop a new foundation system for SES's solar dishes for installation on the Solar II project, which utilized metal in lieu of concrete, and was a one piece design, as opposed to a multiple units design. Id. at ¶ 17. Representatives of Metal and certain engineering subcontractors developed and revised the designs and drawings for the metal, one piece foundations.

According to Plaintiffs, Schuff acknowledged to Plaintiffs that the designs, drawings, ideas, methods, means, installation procedures and specifications for the metal, one piece foundations were confidential, proprietary and owned exclusively by Plaintiffs. On August 2, 2006, Schuff, Metal, PCI, Road Runner Planning and Consulting, Inc.,*fn3 and Reinert entered into a Confidentiality Agreement, wherein Schuff expressly agreed, inter alia, to keep confidential any and all information provided to it regarding the designs, drawings, ideas, methods, means, and installation procedures for the metal, one piece foundations. See Exhibit A to Second Amended Complaint. On June 7, 2007, SES allegedly "acknowledged . SES's intent to enter into a contract with Metal Foundations and/or PCI to be the installer of the foundation of the Solar II Project." See Exhibit C to Second Amended Complaint.*fn4 According to Plaintiffs, throughout the course of the design and testing process, SES continually represented that Plaintiffs would be the installer of the foundations on the Solar II Project. Plaintiffs allege that "[b]ased on the representations made by SES, Metal and PCI continued to provide SES with access to its confidential and proprietary information and also continued to expend time, resources and finances into the development, manufacture and installation of the metal, one piece foundation." Id. at ¶ 31.

On April 16, 2008, Metal and Schuff entered into a Memorandum of Understanding for the Solar II Project.*fn5 Thereafter, additional meetings were held between Metal, PSI and SES whereby SES requested and PCI and/or Metal agreed to supply a detailed cost breakdown for PCI to install the metal, one piece foundation. Prior to testing the metal, one piece foundation, SES requested that PCI supply the equipment, labor and engineering to monitor the testing of its foundation.

PCI provided a proposal to SES to supply the equipment, labor, and engineering for testing the metal, one piece foundations. The proposed terms included a provision that "if PCI reduced its price based upon the parties' relationship, and due to SES's tight budget, and if the foundation passed the test, PCI would be the installer of the foundations for the Solar II Project." Id. at ¶ 40.

On July 24, 2008, SES and Metal met to discuss, inter alia, the details of the contractual relationship between SES, Metal, and PCI for the manufacture and installation of the metal, one piece foundations. According to the Second Amended Complaint, on or about August 11, 2008, Scott Hansen of SES confirmed that SES required the assistance of Metal and PCI to proceed forward with the Solar II Project and that PCI would perform the testing and installation of the foundations for the Project.

According to the Second Amended Complaint, Plaintiffs and their subcontractors and engineering firms attended various meetings with SES and "continued to provide significant monetary support, as well as access to its designs, drawings, methods, means, installation equipment, specifications and ideas to SES pursuant to SES's agreement for Plaintiffs' to install the foundations for the Project." Id. at ¶ 45.

On August 15, 2008, URS Corporation Americas ("URS") issued a Technical Memorandum with regard to results of certain geotechnical analyses for the metal, one piece foundation. Plaintiffs allege that SES requested that Metal review, comment and advise regarding the Technical Memorandum and the designs and technical information necessary for the manufacture and installation of the metal, one piece foundation.*fn6

In November 2008, Metal, PCI, and SES allegedly tested a metal, one piece foundation to determine whether it met the required structural standards for use on the Solar II Project. Plaintiffs allege that "[f]ollowing testing procedure, SES's representatives verbally and in writing repeatedly advised that it intended to use Plaintiffs' metal, one piece foundations for the Solar II Project. "

However, despite the alleged representations of SES that it intended to use Plaintiffs' metal, one piece foundations, Plaintiffs allege that in May 2009, SES sent out requests for proposals to numerous companies to install metal, one piece foundations for the Solar II Project, but did not invite PCI or Metal to submit a proposal and did not award the installation of the foundations to PCI. Further, Plaintiffs allege that Defendants have utilized, or intend to utilize, Metal's "confidential and proprietary drawings, designs, methods, means and installation procedures for the metal, one piece foundations for the Solar II Project." Id. at ¶¶ 87-88.

Plaintiffs have filed a seven (7) count Second Amended Complaint which includes claims for injunctive relief (Count I), breach of contract (Counts II and III), fraudulent misrepresentation (Count IV), common law misappropriation of trade secrets and confidential information (Count V), violation of the Pennsylvania Uniform Trade Secret Act (Count VI), and unfair competition (Count VII).

Defendants request that Counts III, V, and VII be dismissed as they fail to state claims upon which relief may be granted. Defendants also seek to dismiss Gary L. Reinert, Sr., despite being named as a plaintiff in Counts I, II, V, and VI, as the Second Amended Complaint fails to state any cause of action on his individual behalf.

Standard of Review

Rule 12(b) of the Federal Rules of Civil Procedure provides that "the following defenses may at the option of the pleader be made by motion: . . . (6) failure to state a claim upon which relief can be granted." A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) challenges the legal sufficiency of the complaint filed by Plaintiff. The United States Supreme Court has held that "[a] plaintiff's obligation is to provide the "grounds' of his "entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action ...


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