In the summer of 2005, I returned home after spending months on the road as an unsuccessful Lt. Governor candidate. I was looking for a new challenge. Something different. I found it.
I met Ted and Lois Banasiewicz and their partner, Dave Graeber, who had developed a power plant concept in central Utah, which attracted the interest of PacifiCorp, the power company for the Rocky Mountain states.
After contacting the partners in August 2002, PacifiCorp negotiated to buy the project, known as “Spring Canyon,” along with its various air permits, land options and water rights necessary to build the 500 megawatt power plant. But first they demanded the right to do due diligence …
The “Spring Canyon” design had some interesting twists. It was natural gas-fired, combined cycle, featured 7FA turbines and had zero water discharge. More uniquely, it had “air cooling” which meant that it could operate using 10% of the water of a normal plant — a key factor in Juab County, one of the driest counties in the U.S.
The partners entered a non-disclosure agreement with PacifiCorp, then showed them all their data, including sophisticated modeling that proved that the unit could operate efficiently with air cooling, even on the summer’s hottest days. (This type of site-specific ”energy penalty” calculation is critical before siting air-cooled plant.)
In March 2003, having received all this info and the project pro formas, PacifiCorp suddenly broke off the negotiations and told Spring Canyon that it must “bid” into an RFP for building a new power plant.
Unbeknownst to the partners, PacifiCorp was planning to build its own plant. Moreover, it had hired Spring Canyon’s lawyer, Jody Williams, to obtain water for the competing power plant. In the spring of 2003, it rushed to put together its own bid, which it called “Currant Creek.”
In September 2003, PacifiCorp “decided” that its own Currant Creek bid had “won” the RFP. A few weeks later, it announced the details of its winning design. Currant Creek was (wait for it ….) a clone of the Spring Canyon concept: combined cycle, 500 megawatts, gas-fired, 7FA turbines, zero discharge and air cooled. And located in the same tiny town of Mona, Utah.
PacifiCorp’s engineers had “arrived” at this design in spring 2003 despite (i) no prior experience in developing large power plants, (ii) limited knowledge of air cooling , and (iii) no preliminary engineering necessary to site the plant. In other words, PacifiCorp stole the Spring Canyon design.
And they thought they could get away with it.
In 2005, our clients filed suit in Salt Lake County District Court against PacifiCorp and Jody Williams. I was lead counsel along with Peggy Tomsic, a remarkably tenacious litigator based in Salt Lake. (My old law firm refused to permit me to take the case — which is how I ended up with the Surovell firm).
We litigated the case for two years (2005-2007). During that time, I flew to Salt Lake ten times to take depositions, visit the “duplicate” plant and appear in court. I also made trips to Delta (UT), Portland (OR), Amarillo, Oklahoma City, Exeter (N.H.) and Charlottesville to take depositions, defend depositions and meet key witnesses.
Over four memorable days in 2006, I took the deposition of Ted Banasiewicz in our offices in Fairfax. He was dying of cancer, which killed him the next year. His deposition was played at trial in 2012 and was some of our strongest evidence.
Everything seemed on track. Then, shockingly, the case was dismissed on summary judgment in October 2007.
In early 2008, our team filed an appeal with the Utah Supreme Court. I was in the State Senate at this point and Peggy’s team largely took over. Their work was flawless.
In 2010, the Utah Supreme Court unanimously reversed the trial court and sent the case back. It took two years to get a trial date ….
On April 9, 2012, the jury trial began. Our trial team was well-prepared, putting forward evidence that had been years in collection. (I was no longer at the counsel table due to legislative commitments, but arrived midway).
The evidence was clear: PacifiCorp had used our client’s ideas, data and lawyer to duplicate its work. The net effect of that theft was the construction of a $345M plant, which had a built-in return on equity of $635 million to PacifiCorp over thirty years.
On May 21, we closed. That evening, the jury returned its verdict.
It found that PacifiCorp had misappropriated our trade secrets. In doing so, it had caused $21.4 million in direct damages and $112.5 million in “unjust enrichment” from illegally using the technology of Spring Canyon. The jury further found that the actions were taken “willfully and maliciously,” which means that the Court can still add exemplary damages under Utah law, as well as additional attorney fees.
The aggregate verdict last night was $134 million. No, we haven’t collected a dime yet. There will likely be appeals and motions. (Or maybe there won’t, as Mid-American Holdings which now owns PacifiCorp is apparently distancing itself from the deceitful actions of the company).
The victorious trial attorneys were Jim Magleby, Peggy Tomsic and Eric Schnibbe of Salt Lake. I was in the background at trial, except on Ted’s video, but stayed involved as the “institutional memory” from the first years of litigation.
Most importantly, it was a team effort and being part of that team was the biggest achievement of my career.