Big Victory for Auburn Energy Company in Corporate Espionage Case

By DAVE SOLOMON see original union leader article here
New Hampshire Union Leader

AUBURN — The Freedom Companies of Auburn, a group of unregulated energy supply firms, has been awarded $500,000 in damages from a larger competitor in a case involving corporate espionage, and now stands to win more than $330,000 in legal fees on top of that.

“From what I’ve been told by our attorney, that is the second largest legal fee award in state history,” said Bart Fromuth, chief operating officer at Freedom Energy Logistics.

The ruling on legal fees was handed down on May 3 by presiding justice David Anderson in Rockingham County Superior Court.

The initial jury verdict in the civil lawsuit and the judge’s subsequent ruling on legal fees are both being appealed to the New Hampshire Supreme Court on behalf of the defendant, Provider Power.

Provider is the parent company of ENH Power, the largest competitive supplier of electricity in New Hampshire and Maine.

After a two-week trial in Rockingham County Superior Court in January, a jury found Provider Power and its owners guilty of stealing confidential customer lists, sales leads and other proprietary information from the Freedom Companies.

“They hired one of our employees to work for them, while at the same time working for us,” said Fromuth. “His job for them was to essentially get hold of sensitive customer and pricing information and then transfer that over to ENH Power to use for their means.”

The unanimous verdict named owners Emile Clavet, Kevin Dean and their three energy supply and brokerage firms — Provider Power, ENH Power and Electricity Maine. No one from Provider Power would comment on the jury verdict or legal fees.

In light of the jury verdict and information provided by Freedom’s attorney Chris Carter of Hinkley Allen, state regulators launched their own investigation of Provider Power in April.

The Consumer Services and External Affairs Division of the PUC is trying to determine whether Provider Power also violated state regulations barring the misuse of confidential customer information.

Provider Power subsidiary ENH Power is the largest competitor to regulated utilities in the state, with more than 40,000 customers signed up for power supply. Freedom Companies has about 6,000 residential customers through its subsidiary Resident Power.

The Freedom Companies, run by Gus Fromuth and his son Bart, were one of the earliest to jump into the competitive market for residential electricity in 2011, and agreed to provide consulting services to Clavet and Dean when they expanded Provider Power from Maine into New Hampshire in 2012.

The jury agreed with the plaintiffs that Clavet and Dean induced a Freedom Companies employee to steal proprietary information, and to then use that information in a “deliberate attempt to harm the Freedom Companies’ business and misappropriate their customers.”

Judge Anderson cited the jury’s finding that Clavet and Dean had acted “willfully and maliciously” in awarding full attorney’s fees.

Meanwhile, it looks like Clavet and Dean won’t be running Provider Power much longer.

The electricity and natural gas supplier Spark Energy of Houston announced in its quarterly earnings report on Friday that it had reached an agreement with the two owners to purchase Provider Power and all of its subsidiaries for $28 million.

No one from Provider Power was available to comment on the sale, but Dean told the Lewiston Sun-Journal on Friday that electricity rates for Provider Power customers are not expected to change, and that all current employees will remain in their jobs.

“Spark Energy is a national company with 750,000 customers and they plan on keeping everybody here and creating more jobs,” he said.

dsolomon@unionleader.com