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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : havePOWER, LLC : v. : Civil Action No. DKC 2001-0353 : GENERAL ELECTRIC CO., et al. : MEMORANDUM OPINION Plaintiff havePOWER, LLC asserts that General Electric Fuel Cell Systems ("GE Fuel Cell Systems" or "GEFCS") breached their distribution contract and violated Maryland Antitrust laws. havePOWER asserts that GE Fuel Cell Systems' parent company General Electric ("GE") induced GE Fuel Cell Systems to breach its contract and violated Maryland Antitrust laws by merging with Honeywell. Pending before the court and ready for

resolution is the motion by Defendants General Electric Fuel Cell Systems and General Electric to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) on the grounds that havePOWER failed to state any actionable claims. No hearing is deemed necessary, and the For the reasons

court now rules pursuant to Local Rule 105.6.

that follow, the court shall grant the motion in part and deny it in part. I. Background

The following recitation is taken from facts alleged in Plaintiff's complaint. This case arises out of a dispute over

an alleged exclusive distributorship agreement between havePOWER and GE Fuel Cell Systems, LLC, to sell fuel cells in the Fuel

Washington, DC, Maryland and Northern Virginia region. 1

cell electric generators produce direct electric current that can be converted to alternating current for use by homes and industries. havePOWER was established as a division of

Chesapeake Design, LLC, a Maryland company, in 1998.

It became

a District of Columbia limited liability company in December 1999 and was reformed as a Maryland limited liability company in August 2000. In February 1999, GE Power Systems formed GE Fuel

Cell Systems to market and distribute fuel cells designed and manufactured by Plug Power, Inc. GE Fuel Cell Systems is coGE

owned by GE (75% share) and Plug Power, Inc. (25% share).

Fuel Cell Systems owns the worldwide marketing and distribution rights, except for four Midwestern states, for all Plug Power fuel cell generators of up to 35 kW generating capacity. contracted with third parties to license the It has

distribution,

The complaint refers to several entities, including GEMicroGen, Inc. and Plug Power, Inc., as well as the Defendants. The complaint does not set forth the alleged relationships among all of the entities. 2

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service,

installation

and

maintenance

of

fuel

cell

systems

worldwide. On October 28, 1999, havePOWER completed an on-line

application on a website to become a Distributor, Installer, and Servicer of Plug Power fuel cells. On November 16, 1999,

havePOWER received a response advising it that a representative would contact havePOWER shortly. Jay Zawatsky, Chief Executive

Officer of havePOWER, e-mailed Laura Chummers of GE MicroGen on January 6, 2000 to notify her that havePOWER had not yet

received a response to its dealer application filed in early November. The next day, January 7, 2000, Zawatsky received a

phone call from Richard Robertson, Director of North American Market Development for GE MicroGen, Inc., who outlined five capabilities havePOWER would need to demonstrate in order to become an exclusive distributor for GE's fuel cell products. These were: (1) management and installation capability; (2) financial capability; (3) a source of fuel through a strategic alliance withe a natural gas/propane supplier; (4) market He

presence; and (5) a vision for the future of fuel cells.

also stated that an exclusive distributor must pay a fee between $200,000 and $2,000,000 to purchase the distributorship, of

purchase 10 commercial fuel cell units at a unit price

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$35,000, and meet mandatory annual sales quotas ranging from 300 to 2,000 fuel cells at a unit price of $8,000. In order to comply with those prerequisites, havePOWER

secured a supply of natural gas and propane from PowerTrust, signing a letter of intent on February 11, 2000. On February

15, 2000, havePOWER's executives met with Robertson at GE Fuel Cell Systems headquarters in New York and presented a strategic plan outlining their company profile and their capability to be an exclusive distributor, installer, and servicer. At the close

of havePOWER's presentation, Robertson stated that GE Fuel Cell Systems would negotiate with havePOWER to become the exclusive GE Fuel Cell Systems fuel cell distributor, installer, and servicer in almost all of Maryland, the District of Columbia and Northern Virginia. As a precondition to GE Fuel Cell's issuance of a Memorandum of Understanding, havePOWER executed a Confidential Information Agreement (CIA) on March 12, 2000 and faxed it to Robertson. havePOWER states this was not signed by GEFCS and has submitted a copy of the CIA. Robertson Paper No. 2, Ex. A. Zawatsky on March 21, 2000 that

informed

negotiation of a definitive Distributor Agreement would begin soon. Zawatsky returned a signed copy of the Memorandum of Robertson

Understanding (MOU) to Robertson on March 23, 2000.

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faxed a draft definitive Distributor Agreement to Zawatsky on March 31, 2000. The parties began to negotiate the terms of the

Agreement and havePOWER asserts that during the negotiations Robertson "held himself out as having actual authority to

negotiate the terms". both Robertson and

Paper No. 2,

Download havePOWER v. General Electric.pdf

Maryland Law