EASTERN MAINE ELECTRIC COOPERATIVE WINS $13.6 MILLION JURY VERDICT
On Friday November 18th, a Bangor, Maine jury found, after a four day trial, that five wind power companies breached their contractual obligation to negotiate in good faith, and returned a $13.6 million verdict in favor of Eastern Maine Electric Cooperative (the “Cooperative”). The unanimous verdict against the defendants was reached after about two hours of deliberations.
The Cooperative’s CEO, Scott Hallowell said, “The defendants’ breach denied the Cooperative of the benefits of the deal, and forced the Cooperative to take legal action.” Hallowell said, “We are extremely pleased with the verdict, as it vindicates the Cooperative’s position that the wind companies did not negotiate in good faith. We have not yet heard whether the defendants will appeal, but if they do so we will vigorously defend the jury’s verdict.”
The contract required the wind power companies to act in good faith to finalize the sale to the Cooperative of a section of an electric transmission line, which provides transmission services to wind farms owned by three of the defendants. The parties had agreed that the three wind farms would pay for costs, including repairs and upgrades to the line, which is standard electric utility practice across the country.
The Cooperative was represented by Sigmund Schutz, Joe Donahue, and Ben Piper of the law firm Preti Flaherty, LLP. The Cooperative’s lead trial counsel, Sigmund Schutz, said, “The Defendants had sellers’ remorse and breached their good faith obligation. The jury agreed and awarded all of the damages we requested at trial.” Schutz added, “The verdict is among the largest jury verdicts ever awarded in Maine.”
The Cooperative entered into the contract in 2011 with First Wind Holdings, LLC and four of its former subsidiaries (Evergreen Gen Lead, LLC; Evergreen Wind Power III, LLC; Stetson Holdings, LLC; and Stetson Wind, II LLC), for the sale of a section of an electric transmission line, the Stetson Line, to the Cooperative. First Wind Holdings, LLC is now owned by SunEdison. The subsidiaries are three companies that own wind farms, Stetson I (Stetson Holdings, LLC); Stetson II (Stetson Wind II, LLC); Rollins (Evergreen Wind Power III, LLC); and the company that owns the Stetson Line (Evergreen Gen Lead, LLC). These four entities are now owned by TerraForm Power, Inc. (NASDAQ: TERP).
The Cooperative was to buy 12.54 miles of a transmission line that connects the wind farms to the electric grid. The wind farms agreed to take transmission service over the line and pay the Cooperative for the service. The contract included the detailed agreed-to business terms and required good faith negotiations to deliver and execute final documents with the agreed-to business terms. The final documents were never signed due to the defendants' failure to act in good faith.
The Cooperative filed the lawsuit in October 2014 in Maine Superior Court. The defendants filed papers to transfer the case to federal court, but that court ultimately denied a motion to dismiss filed by the defendants and remanded the case back to state court. The Cooperative then transferred the case to Maine Business and Consumer Court, a specialized court charged with handling business cases. In 2016, the defendants filed a Motion for Summary Judgment, again seeking to dismiss the case. After lengthy argument, Justice Michaela Murphy denied the defendants’ Motion, and ordered that the case go to trial before a jury. Justice Murphy presided at trial. The jury trial took place during the week of November 14-18, 2016.
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Eastern Maine Electric Cooperative is a consumer-owned electric utility headquartered in Calais, serving approximately 12,500 consumers in portions of Washington, Penobscot, and Aroostook counties.
Contact: Charlie McAlpin
cmcalpin -at- emec.com