Nel ASA last week filed a motion to dismiss a wrongdoing case brought by Iwatani Corporation of America over the problematic deployment of hydrogen fueling stations in California.
In its motion to dismiss the case brought by Iwatani, Nel presents several legal arguments challenging the sufficiency of Iwatani’s First Amended Complaint (FAC) under federal and state legal standards, with the response largely centered on procedural grounds.
Iwatani, one of Japan’s largest industrial gas companies, alleges that Nel and former and current executives, including its CEO, engaged in deceptive practices, such as misrepresenting the capabilities and reliability of their hydrogen fueling stations, known as H2Stations, which were sold to Iwatani in 2019 and later deployed in California with disastrous results.
Nel argues that Iwatani’s FAC fails to state a claim upon which relief can be granted. Specifically, Nel contends that the FAC does not meet the requirements for pleading fraud (under Rule 9(b)) and that the economic loss rule bars Iwatani’s claims for fraud and related torts, as these claims seek recovery for purely economic losses that are typically recoverable under contract law, not tort law.
Lawyers for Nel also invoke the economic loss rule, which limits plaintiffs to contractual remedies for purely economic or commercial losses, to argue that Iwatani’s fraud and related tort claims are inappropriate. Nel asserts that Iwatani’s allegations involve disappointed expectations rather than misconduct that would warrant a tort-based recovery.
- Insufficiency of Fraud Allegations (Federal Rule of Civil Procedure 9(b)):
- Nel claims that Iwatani’s FAC fails to sufficiently allege fraud. Rule 9(b) requires that the circumstances constituting fraud be stated with particularity. Nel argues that Iwatani’s allegations do not specify who made the fraudulent statements, when these statements were made, or how the statements were fraudulent.
- Specific Challenges to Various Counts:
- Fraud Claims: Nel argues that the FAC lumps all defendants together without distinguishing their roles or specifying the fraudulent acts they individually committed.
- Unfair Competition and Other Claims: Similar to the fraud claims, Nel argues that other claims like unfair competition, breach of contract, and declaratory relief are also inadequately pleaded because they rely on the same insufficiently detailed allegations of wrongdoing.
- Lack of Specificity in Allegations:
- Nel highlights that Iwatani fails to provide the specific details necessary to link alleged misrepresentations to specific defendants, thus failing to give adequate notice to each defendant about the nature of the alleged misconduct for which they are individually responsible.
In a separate motion to dismiss the charges brought by Iwatani against individual defendants Jon André Løkke, Stein Ove Erdal, Håkon Volldal, and Robert Borin, Nel presents several key arguments focused on jurisdictional issues, specifically challenging the personal jurisdiction of the United States District Court, Central District of California over these non-resident individual defendants.
