Learn more about Peltz-Steele v. UMass Faculty Federation at Court Listener (complaint) and the Liberty Justice Center. The case is now on appeal in the First Circuit as no. 22-1466 (PACER paywall). Please direct media inquiries to Kristen Williamson.
Showing posts with label chapter 93A. Show all posts
Showing posts with label chapter 93A. Show all posts

Saturday, July 9, 2022

Tort-contract distinction cannot block damage multiplier, Mass. high court holds in lease dispute

Photo by Yonkers Honda CC BY-SA 2.0 via Flickr
A landlord may not rely on a limitation-of-liability provision in a commercial lease to evade a damage multiplier under Massachusetts consumer protection law, the Supreme Judicial Court ruled in January, regardless of whether the case is characterized as tort or contract.

The dispute arose between plaintiff-tenant Majestic Honda and its LLC landlord, owned by Alfredo Dos Anjos. Majestic accused the defendant of bad-faith lease termination, and the trial court agreed.

Massachusetts General Laws chapter 93A, under which Majestic brought its case, is a famously potent statutory remedy. Ostensibly its section 11 is a consumer protection law like any of the unfair trade practices prohibitions found throughout the states. But the statute has been read broadly in Massachusetts to operate at or beyond the margins of what lawyers usually regard as "consumer protection."

Moreover, section 11 authorizes double and treble damage awards upon "willful or knowing" misconduct. Massachusetts does not recognize punitive damages at common law, only by statute. Chapter 93A also has a four-year statute of limitations, sometimes an advantage to plaintiffs over the usual Massachusetts limitations period of three years for most tort actions.

Thus, as a result of permissive construction and powerful incentives for plaintiffs, chapter 93A is invoked frequently in what would be merely common law tort cases in other states, even to the exclusion of the common law claim in Massachusetts. Chapter 93A also is used in public enforcement, as in the Attorney General's present litigation to hold Big Oil accountable for climate change.

Tort and contract claims can be subsumed into the same 93A framework, blurring the classical distinction. The distinction is especially weak in product liability cases, in which Massachusetts plaintiffs almost always rely on 93A, in part because the commonwealth has recognized strict product liability as an extension of quasi-contractual warranty rather than as an evolution of common law negligence.

I am not a Massachusetts lawyer, and I am careful to disclaim to my 1L torts students that I am not well versed in 93A practice. It is its own field and cannot be folded into tort fundamentals. But, I admonish, they should endeavor to learn more if they intend to practice tort litigation in Massachusetts. My supremely talented colleague Professor Jim Freely once regularly taught a 93A course, but I don't think it's been offered since he was drafted (no pun intended) into the legal skills program.

Insofar as section 93A's damage multiplier is punitive in nature, it should not be disclaimable by a tort defendant, else the legislature's intended deterrent effect would be rendered moot. Upon this logic, the Massachusetts Appeals Court looked in past cases to discern whether the plaintiff's claim analogized more closely to tort or contract, to determine whether a limitation-of-liability provision should be allowed to nullify extraordinary statutory damages.

In fairness to the Appeals Court, the Supreme Judicial Court did roughly the same thing in 2018 when it applied a statute of repose for tort claims arising from real property to a 93A action, even though 93A itself has no repose period; three justices dissented from that ruling.

Here, the analogical approach is wrong, the Supreme Judicial Court decided unanimously. The court wrote, per Justice Scott Kafker, "Because G. L. c. 93A establishes causes of action that blur the distinction between tort and contract claims, incorporating elements of both, we do not adopt this formulation." The court further explained,

Our cases have also pointed out that a c. 93A claim is difficult to pigeonhole into discrete tort or contract categories, as c. 93A violations tend to involve elements of both tort and breach of contract, blurring the lines between the two. As we explained in [prior cases], "[t]he relief available under c. 93A is 'sui generis,'" being "neither wholly tortious nor wholly contractual in nature." Hence, a "cause of action under c. 93A is 'not dependent on traditional tort or contract law concepts for its definition.'"

After all, the court reasoned, the legislative intention to deter willful or knowing misconduct is not a function of whether the wrong is a tort or a breach of contract.

At a theoretical level, the vast gray area of 93A in Massachusetts law might have broader implications for the classical distinction between tort and contract, namely, whether the distinction will or should persist at all in contemporary common law. Massachusetts 93A practice might prove instructive as courts in many common law jurisdictions, such as Canada, reconsider the vitality of the so-called "economic loss rule," a historic marker of the tort-contract distinction that forbade tort actions in the absence of physical injury or damage.

The case is H1 Lincoln, Inc. v. South Washington Street, LLC, No. SJC-13088 (Mass. Jan. 24, 2022).

Wednesday, July 6, 2022

Court denies Exxon anti-SLAPP relief in Mass. climate claims; European court bemoans Russian SLAPP

AG Maura Healey
The Massachusetts anti-SLAPP statute does not work in defense of Attorney General enforcement actions, the Supreme Judicial Court decided in May in climate change litigation against Exxon Mobil Corp. Europe and the UK, meanwhile, are working out their approaches to anti-SLAPP.

I am in general anti anti-SLAPP, because the statutes are drawn too broadly. I recited my lamentations in April 2021. I support anti-SLAPP in principle when it works the way it was intended, but broadly drawn anti-SLAPP statutes create innumerable headaches and are used to protect Goliath from David as often as the other way around. Exxon's attempted reliance on the law fits the mold.

With the usual American MO, anti-SLAPP statutes try to slap an ill-fitting patchwork fix on a systemic problem, which is transaction costs in civil litigation, declaring the problem solved while in fact it festers, rotting social and political institutions from the inside out. Only when a bridge collapses does everybody momentarily notice, and then we move on.

The Massachusetts Supreme Judicial Court narrowly saved the bridge from collapse this time by rejecting Exxon Mobil's invocation of the commonwealth's typically broad anti-SLAPP statute. Exxon is defending itself against Attorney General Maura Healey. The AG accuses Exxon of deceptive statements that concealed what Big Oil knew about the climate risk of fossil fuel extraction, thus, responsibility for climate change. 

State and locality climate change lawsuits against Big Oil are proliferating in the United States and the world right now, as governments try to figure out where they will get the money to bolster infrastructure against rising sea levels and tempestuous weather events. In the context of "super torts," I wrote in November 2020 about the lawsuit against Big Oil by my home state of Rhode Island. By focusing on claims in state law, public plaintiffs such as my childhood hometown of Baltimore have managed to steer their claims into state court, evading the impact of a U.S. Supreme Court inclination to see the claims in federal court, as Big Oil defendants would prefer.

Accordingly, AG Healey is pursuing the commonwealth claim under Massachusetts's expansive unfair and deceptive practices act, chapter 93A. The powerful law affords double and treble damages and attorney fees in cases of willful and knowing violations, and it can be used as a private or public enforcement mechanism.

Exxon attempted to use the commonwealth's anti-SLAPP statute in its defense. The essence of Exxon's public statements about the environmental safety fossil fuels constituted participation in the public marketplace of ideas, Exxon asserts, so the AG's persecution is just the sort of action that anti-SLAPP should head off.

One limitation, thankfully, in the Massachusetts anti-SLAPP law is that it hinges on petition activity, not merely free speech. There is some margin around the word "petition," as the statute draws in public statements "reasonably likely to encourage consideration or review of an issue" by government. But the anti-SLAPP statute cannot be triggered simply because whatever civil wrong the defendant is accused of was accomplished by way of communication.

The AG objected to Exxon's invocation of anti-SLAPP on this distinction, because Big Oil made plenty of problematic statements to the public. I think she's right. But the court did not get that far. Rather, the court held in favor of the AG on her alternative argument, that the anti-SLAPP statute simply does not apply to public enforcement actions by the AG.

There is a questionable logic to Exxon's theory that petitioning must be protected against attack when the attacker is the petition-ee, government. A petitioner might be expected instead to make a First Amendment retaliation claim, if the attack theory holds up. Also, the anti-SLAPP statute, in a second provision, authorizes intervention by the AG on behalf of anti-SLAPP movants. So the legislature knew how to say "attorney general" when it wanted to, and the AG isn't mentioned anywhere else.

More importantly, the Supreme Judicial Court held, defense against a public enforcement action is not consistent with the legislative purpose of the anti-SLAPP statute: "The legislative history makes clear that the motivation for the anti-SLAPP statute was vexatious, private lawsuits, especially ones filed by developers to prevent local opposition to zoning approval." That's the paradigmatic case that gave birth to anti-SLAPP in 1988.

The court observed that its holding accords with one other jurisdiction that has considered the same problem. The Supreme Judicial Court of Maine declined to apply its anti-SLAPP statute in a municipal enforcement action for a zoning violation, despite the would-be movant's assertion of victimization.

Curious, though, that mass-media-Goliath defense against defamation and privacy lawsuits didn't get a mention in the court's main text. In a telling footnote, the court opined:

Although originally drafted with a particular purpose in mind—that is, the prevention of lawsuits used by developers to punish and dissuade those objecting to their projects in the permitting process—the anti-SLAPP statute's broadly drafted provisions, particularly its wide-ranging definition of petitioning activity, have led to a significant expansion of its application.... The ever-increasing complexity of the anti-SLAPP case law has also made resolution of these cases difficult and time consuming.... We recognize that this case law may require further reconsideration and simplification to ensure that the statutory purposes of the anti-SLAPP statute are accomplished and the orderly resolution of these cases is not disrupted.... We also note that other States have defined petitioning activity more narrowly and that bills have been filed in our Legislature to do the same....

I don't want to be an I-told-you-so, but.... 

Europe and the UK might ought take heed.

The UK invited public comment in a consultation in the spring as it ponders anti-SLAPP, and the European Commission is working out legislation now for the European Union.

In a March judgment, the European Court of Human Rights (ECtHR) recognized SLAPPs as a human rights problem. The court held that a regional Russian government had violated free speech rights with a civil defamation action against an online media outlet critical of officials. 

Of course, the Massachusetts and Maine cases should only aggravate the European court's worry, because it was a public authority that was the complainant in Russia. What if AG Healey were on a crusade against news outlets, using the deceptive practices law to persecute newspapers critical of the commonwealth government? (Is that how Exxon sees itself, victimized?) Would anti-SLAPP not be an apt defense?

The problem did not wholly escape the court's notice. The court struggled to distinguish an earlier Massachusetts case, Hanover, in which the applicability of anti-SLAPP in public enforcement simply had not been challenged when a town sued a union in a row over procurement. In a final footnote, the court wrote: "We note that the union in Hanover was not seeking to employ the anti-SLAPP statute to prevent local government enforcement of laws. As the issue was not raised in that case, and is not raised here, we need not decide whether any or all local government enforcement actions are beyond the scope of the anti-SLAPP statute."

So while the court lamented the burgeoning complexity of anti-SLAPP with one breath, it opened the door to more confusion with the next.

Hanover was characterized as an abuse-of-process suit, and therein lies a suggestion, I believe and have written before, of a better way to manage SLAPPs.

The Massachusetts case is Commonwealth v. Exxon Mobil, No. SJC-13211 (Mass. May 24, 2022). Justice Scott Kafker wrote the unanimous opinion. Track the case at the Climate Change Litigation Database.

The ECtHR case is OOO Memo v. Russia, No. 2840/10 (Eur. Ct. Hum. Rts. Mar. 15, 2022).

Court: Even upon liability for mere negligence, insurer may refuse to cover statutory attorney-fee award

Gerd Altmann licensed by Pixabay
An insurer is not obliged to reimburse an insured for attorney fees awarded in a quasi-tort action under Massachusetts statute, the commonwealth high court held today.

The insured was a cleaning business operating under the "Servpro" banner. In the dispute underlying the instant case, the insured cleaned up a sewage spill and was held liable to a client who suffered respiratory injury from exposure to disinfectant chemicals.

The personal-injury complainant sued under the unusually broad unfair commercial practices statute, Massachusetts chapter 93A. Chapter 93A affords prevailing parties attorney fees, as well as double or treble damages for complainants able to prove "willful or knowing" violation.

Those powerful incentives tend to cause plaintiffs to abandon common law tort claims when the 93A claim is viable. So here, the plaintiff declined to prosecute her common law negligence claim and was awarded attorney fees on a prevailing 93A theory, an implied warranty of merchantability.

Subsequently, Vermont Mutual Insurance Co. declined to pay the full sum of the award, asserting that the policy did not cover the attorney-fee award.

The Supreme Judicial Court agreed, finding the plain meaning of the insurance contract controlling. The policy covered liability for "bodily injury" and "costs," the court acknowledged. But attorney fees are not "costs 'taxed' against the insured in the suit," the court held; rather, "costs" refers to "the narrower, technical meaning of court-related or nominal costs recoverable as a matter of course to prevailing parties."

The outcome is potentially devastating to small businesses that believe themselves to be insured against negligence liability. An attorney-fee award is enough to put a small business into bankruptcy, yet personal-injury liability insurance typically excludes coverage for fees. 

That exclusion arises, I posit, upon the logic that fees typically are awarded in the states, if at all under "the American rule," only in cases of intentional or reckless wrongdoing, for which insurers also exclude liability. Chapter 93A makes fees much more readily accessible to prevailing plaintiffs and thereby burdens business with an unanticipated transaction cost, while affording multi-state insurers with a windfall.

Notwithstanding my principled objection to deviations from the American rule as an incoherent remedy to our problem of runaway transaction costs, I see no meaningful distinction between a personal injury award and an accompanying fee award when both are predicated on conduct indistinguishable from common law negligence. Vermont Mutual was let off the hook on a technicality, to my mind, and insureds should be entitled to the coverage they reasonably believe they bargained for. 

At minimum, going forward, the commonwealth insurance regulator should compel clear articulation of the risk to insureds of such a coverage limitation specially under chapter 93A. I won't hold my breath.

The case is Vermont Mutual Insurance Co. v. Poirier (Mass. July 6, 2022). Justice Scott L. Kafker wrote the unanimous opinion.

Thursday, January 27, 2022

Mass. high court affirms 'component parts doctrine' in HVAC spat, unless maker was culpable in defect

Historical interior of the William Bliss House, 25 Exeter, Back Bay in Boston,
constructed 1882-1884: today the private home of the Nemirovsky family.
Source: Historic New England. 
In a December decision, the Massachusetts Supreme Judicial Court (SJC) reaffirmed the defense-friendly "component parts doctrine" in product liability.

The case arose from a faulty HVAC system installed in plaintiff's 22,000-square-foot Boston home. Evaporator coils in the system repeatedly failed and required replacement, costing the plaintiff hundreds of thousands of dollars, and then substantially more to replace the system in its entirety.  The coils themselves were not defective, but a defect in the system's Styrofoam drain pan caused the coils to fail prematurely.  The statute of limitations precluded plaintiffs' claims based on sale of the HVAC system, but not claims based on the later sale of replacement coils.

Sensibly, the widely accepted "component parts doctrine" ordinarily relieves from liability the manufacturer of non-defective component parts.  However, the SJC explained, citing the Third Restatement, "a component manufacturer may be liable, even if the component itself is not defective, if the component manufacturer is 'substantially involved' in the integration of the component into the design of the integrated product, the integration of the component causes the integrated product to be defective, and the defect in the integrated product causes the harm."

The Superior Court erred, the SJC concluded, in not applying the general rule of the component parts doctrine.  The Superior Court had reasoned that the coil manufacturer could be liable because the coils were made specifically for integration into the defective HVAC system and had no standalone functionality.  In other words, the product failure was foreseeable to the coil manufacturer.  But there are no such exceptions to the component parts doctrine, the SJC held.  Intended integration is not the same as the "substantial involvement" contemplated by the Restatement rule.  And standalone functionality is not the test to shield a component maker from liability.

The component parts doctrine is widely accepted in the states.  There was some hand-wringing over the vitality of the doctrine in 2016 when the California Supreme Court held the doctrine inapplicable when "injury was allegedly caused directly by the [defendant's] materials themselves when used in a manner intended by the suppliers."  In that case, a metal foundry worker had developed lung disease, he alleged, as a result of fumes and dust generated by the foundry's use of the defendant's materials in manufacturing.  But it was the defendant's materials that caused the disease, even if they had been physically transformed by the foundry.  And the specific intentionality attached to the use of the materials closely resembled substantial involvement, tightening the lasso of foreseeability.  The decision hardly unsettled the component parts doctrine.

Law students should take care not to confuse the component parts doctrine with "the single integrated product rule."  That rule determines when damage to an integrated product can be said to satisfy the injury requirement of product liability.  Standalone functionality is relevant to the analysis, but not necessarily dispositive.  If a component part is intended for integration into a larger product, and a defect in the component causes damage to the larger product, but no damage beyond the larger product, then the buyer of the defective component cannot meet the injury requirement to sue in product liability.  The theory of the rule is that the buyer, anticipating the integration, should protect itself in contract and warranty, rather than depending on tort law.  The component parts doctrine rather precludes component manufacturer liability for a non-defective integrated component upon the theory that the component buyer, responsible for the integration, is in the better position to ensure the safety of the integrated product.

In the Massachusetts case, the SJC's decision vacated a $10.6m award.  The jury had awarded just under $3.4m in its verdict.  Massachusetts does not allow punitive damages at common law, but an expansive statute protecting consumers against misrepresentation, "chapter 93A," subsumes much of what would be separate product liability claims in other jurisdictions and can hit defendants with punishing awards of damage multipliers and attorney fees.  Under 93A, the trial court had awarded double damages and attorney fees against defendant Daikin North American for its "willful and knowing" misrepresentation.  Daikin NA might not be off the hook entirely, as the SJC ordered a reexamination of its culpability on remand, to disentangle product liability based on defect from product liability based on culpable misrepresentation.

The case is Nemirovsky v. Daikin North America, LLC, No. SJC-13108 (Dec. 16, 2021).  Justice Dalila Wendlandt wrote the unanimous opinion.

 Ahh, rich people problems....

Monday, June 7, 2021

Extortion claim survives anti-SLAPP motion because defendants could not show petitioning connection

Haverhill, Mass., on the Merrimack River, 2008
(photo by Fletcher6 CC BY-SA 3.0)
Defendants could not raise an anti-SLAPP law against allegations of extortion, the Massachusetts Appeals court ruled before the Memorial Day weekend, because extortion did not relate plausibly to the defendants' constitutionally protected petitioning.

Plaintiffs Stem Haverhill and owner Caroline Pineau were applicants for zoning ordinance changes to permit a marijuana dispensary, since opened, in the downtown riverfront district of Haverhill, Massachusetts, a city 35 miles north of Boston, on the New Hampshire border.  Defendants Brad Brooks and Lloyd Jennings leased nearby residential and restaurant space and opposed the zoning changes.

Brooks and Jennings had had a scrap over property boundary with the previous owner of the Stem lot and had paid $30,000 to resolve the matter.  According to the complaint, Brooks and Jennings, apparently bitter over the former matter, demanded more than $30,000 from Pineau as the price of their acquiescence to zoning changes, no matter what the proposed use.

Stem and Pineau sued under the broad Massachusetts tort-and-consumer-protection statute, chapter 93A, as well as state civil rights law and common law defamation.  As often occurs in anti-SLAPP suits, both parties claimed the exercise of constitutional rights.  The plaintiffs were petitioning the government for zoning changes.  The defendants invoked anti-SLAPP upon the theory that the plaintiffs' civil charges of extortion were calculated to interfere with defendants' petition of government in opposition to the zoning changes.  (Read more about anti-SLAPP on this blog.)

The Massachusetts anti-SLAPP statute facilitates dismissal in favor of the defense by special motion upon the theory that litigation is being weaponized to chill the defendant's (or counter-defendant's) free exercise of the right to petition.  As construed by the Supreme Judicial Court, and quoted in part in the instant case, "a defendant seeking dismissal must show, at the threshold, that the claims against it 'are based solely on [its] exercise of its [constitutional] right to petition.'"

The extortion allegations did not fit the anti-SLAPP pattern, the court concluded, affirming the trial court on de novo review.  "Here, some of the defendants' statements to the Pineaus cannot reasonably be viewed as relating to the defendants' petitioning activities. As discussed, the defendants' focus was to obtain money from Pineau that the defendants knew Pineau did not owe to them."  Litigation in the Land Court could not produce a financial award, the court observed, thus undermining the defendants' position.  The court further reasoned:

Here the defendants did not merely oppose Pineau's proposed business, nor did they merely seek to negotiate their price.  Rather, the complaint describes a concerted and extended effort to coerce Pineau to pay, "or else"—complete with thinly veiled threats such as that Pineau "doesn't know who she is dealing with." The complaint thus adequately describes extortion—coercion by improper means that is designed to reap an economic reward. Such actions, in the business context, can be actionable under c[hapter] 93A, and given the facts alleged here, the suit is not based solely on petitioning activity as required by the anti-SLAPP cases.

Though the "solely" limitation is not found in the anti-SLAPP statute, the rule appropriately narrows the doctrine to its roots in protecting the right to petition.  Had the case proceeded in the Massachusetts anti-SLAPP process, the plaintiff would have been afforded an opportunity in rebuttal, also, to articulate a purpose apart from chilling the right to petition.  As the Appeals Court observed, "The Supreme Judicial Court has construed the statute several times, and has provided a framework, which has evolved over time, for analyzing whether an anti-SLAPP motion to dismiss should be allowed."

The case is Haverhill Stem LLC v. Jennings, No. 20-P-537 (Mass. App. Ct. May 26, 2021).  Justice John Englander authored the opinion for a unanimous panel that also comprised Chief Justice Green and Justice Kinder.

Wednesday, March 24, 2021

Facebook shields records from Mass. AG inquiry

The Massachusetts Supreme Judicial Court today ruled on efforts by Facebook to resist disclosures arising from an internal investigation into application development.  The disclosures are sought by the commonwealth attorney general, which is investigating allegations of consumer data misuse.

AG Healey
(Zgreenblatt CC BY-SA 3.0)
The court's ruling is mixed, but, overall, Facebook gained ground.  The court allowed Facebook more latitude than it won in the lower court to resist disclosure on grounds of attorney work product.  On remand, the lower court will have to scrutinize the records to separate attorney opinion, which is protected, from mere facts, which are not.  The SJC agreed with the lower court that one set of records was within attorney-client privilege, and Facebook will have to produce a privilege log.

Facebook seems to be taking seriously the investigation by the office of Attorney General Maura Healey, and it should.  The company hired fixer-firm Gibson Dunn to handle its internal investigation and is represented by Wilmer Hale in the Massachusetts investigation.  Massachusetts data protection regulation is antiquated relative to the latest generation of regulations in Europe and California, but the law has been on the books for more than a decade.  The AG was represented in the SJC by attorney Sara Cable, whose appointment last year as the office's first chief of data privacy and security signaled an intent to ramp up data protection.  Massachusetts consumer protection law, "93A," the basis of the AG investigation here, is famously expansive, often displacing common law tort in private enforcement and affording generous damages.

Justice Scott Kafker wrote the lengthy opinion for the court in Attorney General v. Facebook, No. SJC-12946 (Mass. Mar. 24, 2021).  Justice Kafker is on a tear of late, having written the court's opinion in a sea change in tort law in late February and the court's unanimous ruling against Gordon College in a First Amendment religious freedom case on March 5.

Thursday, February 4, 2021

FDA reg doesn't preempt state medical device liability, but plaintiff must plead 'plausible' theory, Court says

PainDoctorUSA CC BY-SA 4.0
Medical-device liability claims in state courts are not preempted by federal law, the Massachusetts Supreme Judicial Court confirmed Friday, but the plaintiff before the Court failed to meet the pleading standard.

Seeking relief from the pain of osteoarthritis, Plaintiff Dunn received in her knees two injections of "Synvisc-One," a product of defendant Genzyme Corp. and an FDA-approved "Class III medical device," the Court retold.  Subsequently, she "experienced severe side effects, including 'pain and swelling in her knees, difficulty walking, hip bursitis and systemic pseudoseptic acute arthritis," resulting in falls and injuries, including a torn meniscus and broken neck.

The plaintiff sued Genzyme in negligence and product liability and under Massachusetts consumer protection law.  Commonly called "93A," after its codification, the latter theory of unfair or deceptive practices is favored by plaintiffs' lawyers for its allowance of punitive damages upon an up-to-treble multiplier.  Massachusetts allows punitive damages only upon statutory authorization, and 93A is generous, tracking tort liability theories, including product liability, that would not be thought of as statutory consumer protection in other states.

The U.S. Supreme Court ruled in 2008 that state law claims are not necessarily preempted by regulatory approval under the 1976 Medical Device Regulation Act (MDA).  To survive preemption, a plaintiff's claim must parallel, and not exceed, federal regulatory requirements.

Justice Gaziano
Applying the Supreme Court standard, the SJC determined that the plaintiff's claims met the standard.  Specifically, "negligent failure to warn, breach of warranty, negligent manufacture, products liability, and violations of [chapter] 93A—all can be interpreted as coextensive with the comprehensive Federal requirements."

Contrary to implication by the defense, the SJC held that a plaintiff asserting medical-device liability in parallel with the MDA is not required to plead with the high level of particularity (Rule 9(b)) required in fraud.  Rather, the requisite pleading standard is "plausibility": "plaintiffs asserting parallel State-law claims based upon a violation of FDA regulations must articulate only "factual allegations plausibly suggesting (not merely consistent with) an entitlement to relief" (quoting SJC precedent).

Nevertheless, the plaintiff failed to meet that standard.  The complaint alleged foreseeability of "significant dangers," known or reasonably knowable "dangerous propensities," and, as an alternative theory, adulteration or defect of the product.  But the plaintiff alleged no factual support for causation linking the injection to the injury other than "temporal proximity."  Evidence of other complaints about the product would have helped, the Court suggested.  But deficiency of pleading does not entitle a plaintiff to discovery.

Accordingly, the Court reversed the trial court's denial of the defense motion to dismiss.

The case is Dunn v. Genzyme Corp., No. SJC-12904 (Mass. Jan. 29, 2021).  Justice Frank M. Gaziano authored the opinion of the unanimous Court.

Thursday, August 30, 2018

Statute of repose bars tort-like consumer claim, Mass. high court rules

Yesterday the Massachusetts Supreme Judicial Court (SJC) held that a statute of repose bars a claim under the Commonwealth's key consumer protection statute, chapter 93A.  The case examines the oddly "contort" (contracts-torts) role of 93A and occasions a majority-dissent dispute over judicial construction of statute vs. "usurpation of ... legislative prerogative," i.e., corrective justice vs. distributive justice.

Chapter 93A is important in Massachusetts tort law because it is drawn much more broadly than the usual state consumer protection statute.  In a Massachusetts tort case, chapter 93A often provides a parallel avenue for relief and can afford a plaintiff double or treble damages, as well as fee shifting.  That makes it a powerful accountability tool in areas such as product liability, well beyond the usual consumer protection fare in trade practices.

The SJC, per Justice Cypher, published a sound primer on statutes of limitation and repose:

Statutes of repose and statutes of limitations are different kinds of limitations on actions. A statute of limitations specifies the time limit for commencing an action after the cause of action has accrued, but a statute of repose is an absolute limitation which prevents a cause of action from accruing after a certain period which begins to run upon occurrence of a specified event....  A statute of repose eliminates a cause of action at a specified time, regardless of whether an injury has occurred or a cause of action has accrued as of that date....  Statutes of limitations have been described as a "procedural defense" to a legal claim, whereas statutes of repose have been described as providing a "substantive right to be free from liability after a given period of time has elapsed from a defined event." Bain, Determining the Preemptive Effect of Federal Law on State Statutes of Repose, 43 U. Balt. L. Rev. 119, 125 (2014). The statutes are independent of one another and they do not affect each other directly as they are triggered by entirely distinct events.  [Citations omitted.]

Chapter 93A is covered by a four-year statute of limitations.  A six-year statute of repose covers tort actions arising from deficiencies in improvements to real property: "after the earlier of the dates of: (1) the opening of the improvement to use; or (2) substantial completion of the improvement and the taking of possession for occupancy by the owner."

In the instant case, the plaintiff sought relief for damage resulting from a fire 15 years ago.  The plaintiff attributed the fire to multiple deficiencies in electrical work completed by defendant contractors.  Arguing that the electrical work was not done in compliance with the state code, the plaintiff characterized 93A as "neither wholly tortious nor wholly contractual in nature."  The court, however, found the plaintiff's claim "indistinguishable from a claim of negligence," so barred by the statute.

Three justices dissented.   Chief Justice Gants in dissent pointed out that the general statute of repose does not mention chapter 93A, while the general limitations provision does.  And yet another statute, stating terms of both limitation and repose, purports to govern both contract and tort malpractice actions against doctors.  So the legislature knew how to write what it meant.  The general statute of repose, the chief observed, predated chapter 93A, so could not have anticipated it.  Moreover, statutes of limitation and repose have distinct policy objectives:

In short, as is alleged in this case, the property owner may be barred by the statute of repose from bringing a claim before he or she knows, or reasonably should know, that he or she even has a claim -- even where the defendant has fraudulently concealed the claim from the plaintiff. Consequently, a statute of repose reflects a legislative decision that it is more important to protect certain defendants from old claims than it is to protect the right of plaintiffs to enforce otherwise valid and timely claims.

Thus a statute of repose should not be construed to cover 93A absent plain legislative direction.  The chief concluded: "[T]his is a usurpation of a distinctly legislative prerogative."

The case is Bridgwood v. A.J. Wood Construction, Inc., No. SJC-12352 (Mass. Aug. 29, 2018) (PDF opinion; oral argument via Suffolk Law School).