Retail Supplier Ordered To Pay $500,000 In Suit Brought By Competitor Over Trade Secrets
January 22, 2016 Email This Story Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
A New Hampshire superior court jury reached a verdict ordering Provider Power, and various affiliates and principals, to pay $462,000 in damages, plus attorney fees, to Freedom Energy Logistics and affiliates in a suit brought by Freedom Energy against Provider Power in which Freedom Energy had alleged that Provider Power had obtained Freedom Energy trade secrets from one of Freedom's sales agents.
Provider Power said that it would appeal the verdict, and that it wholly disagreed with the case's outcome (full statement below).
The jury found that Freedom Energy and affiliates (including PNE Energy Supply and Resident Power) proved, by a preponderance of the evidence, that Provider Power and affiliates:
• Misappropriated Freedom Energy's trade secrets
• Intentionally interfered with contracts between Freedom Energy and customers of Freedom Energy
• Intentionally interfered with Freedom Energy's contract with one of its sales agent
• Intentionally interfered with Freedom Energy's economic relations with Freedom Energy's customers
• "Conspired to engage in wrongful acts" directed at Freedom Energy
The jury also found that defendants' misappropriation of Freedom Energy's trade secrets was, "willful or malicious."
The jury awarded Freedom Energy $317,000 for Provider Power and affiliates' interference with contracts between Freedom Energy and customers of Freedom Energy; $33,000 for Provider Power and affiliates' interference with Freedom Energy's contract with its sales agent, and $112,000 for Provider Power and affiliates' interference with Freedom Energy's economic relations with Freedom Energy's customers
However, the jury did not award any damages for the misappropriation of Freedom Energy's trade secrets, a point which Provider Power said made the jury's finding for the other awards confusing, given no value was assigned to the misappropriation of trade secrets which was allegedly the genesis of the other behavior for which damages were awarded. This is one avenue Provider Power intends to pursue on appeal.
The jury also found that Provider Power and affiliates are liable for attorney fees incurred by Freedom Energy in prior litigation against the sales agent, though the jury did not set the amount to be awarded in its verdict.
The jury found that Freedom Energy had not proven that Provider Power and affiliates intentionally interfered with prospective economic relations between Freedom Energy and prospective customers of Freedom Energy
Provider Power issued the following statement
"We wholeheartedly disagree with this outcome and will be appealing. This is result of an independent sales agent who wrongly collected a customer list from Power New England after they defaulted with ISO New England and brokered those accounts to several CEPs including Provider Power. This was a difficult subject matter for the jury. The jury seems not to have appreciated the results of the February 2013 Power New England default and subsequent suspension by ISO New England and the New Hampshire Public Utilities Commission."
In its original complaint, Freedom had alleged that on or about February 25, 2013, defendants began negotiating with a Freedom Energy sales agent to work for defendants. While this occurred in the wake of PNE's default, which saw PNE customers returned to default service, other Freedom Energy suppliers continued normal operations.
The Freedom Energy companies had alleged in their complaint that, "On March 2 and 3, 2013, [the sales agent] logged into Plaintiffs' Salesforce.com website and downloaded files containing sales leads for more than 250 commercial accounts. [The sales agent] then forwarded the files to himself, using his personal 'gmail' email account. With these files, [the sales agent] could determine when each commercial customer was due to renew its supply agreement, and the contact person at each customer."
The Freedom Energy companies had alleged in their complaint that, "A few days later on March 12, [the sales agent] emailed [a Provider Power principal] and stated that if he joined Defendants, he wanted 'to be allowed to work my existing larger commercial accounts and try to maintain my relationships with them. But steering them away from 'you know who.''"
"The referenced 'larger commercial accounts' were, in fact, the commercial customers of PNE and FEL, not [the sales agent]," the Freedom Energy companies had alleged.
The Freedom Energy companies further alleged that the sales agent disclosed to a Provider Power principal, "confidential information about one of Plaintiffs' commercial prospects, The Common Man Family of Restaurants, that [the sales agent] had downloaded from Plaintiffs' Salesforce.com website on March 3, 2013."
The Freedom Energy companies further alleged that the sales agent told a Provider Power principal that the sales agent would forward information that defendants could use "for bidding" on The Common Man contract. The Freedom Energy companies further alleged that a Provider Power principal responded that the sales agent should, "send [the information] over," adding, "Maybe we can test with this."
The Freedom Energy companies further alleged that the sales agent provided Provider Power with a notice sent out to Resident Power aggregation customers concerning the selection of a new supplier after PNE's default, and alleged that the sales agent had suggested that he could provide the defendants with Resident Power's customer lists, so that defendants could contact those customers to offer of a competing rate.
The Freedom Energy companies had alleged that on or about April 11, 2013, the sales agent signed an employment agreement with the defendants. "Two days later, on April 13, 2013, [the sales agent] downloaded the Resident Power customer list from Plaintiffs' computer server and forwarded the list to himself (again, using his personal 'gmail' email account)," the Freedom Energy companies had alleged. "Upon information and belief, Defendants used this information to compete with Plaintiffs," the Freedom Energy companies had alleged.
The Freedom Energy companies had alleged in their complaint that the defendants knew that the sales agent was barred, under an agreement with a Freedom Energy company, from disclosing the Freedom companies' confidential or proprietary information.
The case was heard in New Hampshire's Rockingham County Superior Court, Docket No. 218-2014-CV632