Justia Massachusetts Supreme Court Opinion Summaries

Articles Posted in Business Law
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The dispute arose from an agreement between Columbia Plaza Associates (CPA) and Northeastern University regarding the development of a parcel of land in Boston. The contract stipulated that the developer for each phase of the project would be Northeastern or an affiliated entity, which could include CPA. The contract also specified that the developer of the garage parcel would be a joint venture between Northeastern and CPA.CPA claimed that Northeastern violated the agreement when it sought to develop a subparcel unilaterally and repudiated CPA's rights to that subparcel. CPA also argued that Northeastern's communication with a governmental agency amounted to a deceptive business practice.The court held that the agreement did not grant CPA development rights in any of the subparcels except for the garage parcel. The court also found no proof of an enforceable promise by Northeastern to build a hotel with CPA on the disputed subparcel. The court thus ruled in favor of Northeastern on all counts, including CPA's claims for breach of contract, breach of the implied covenant of good faith and fair dealing, intentional interference with advantageous economic relations, unjust enrichment, commercial fraud, unfair or deceptive business practices, and requests for declaratory and injunctive relief.The court further held that Northeastern was entitled to attorney's fees under the anti-SLAPP statute because it successfully dismissed CPA's claim of commercial fraud, which was based solely on Northeastern's petitioning activity. The court did not find CPA's claim to be a SLAPP suit. View "Columbia Plaza Associates v. Northeastern University" on Justia Law

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In a complex commercial dispute with a series of administrative and legal challenges, the Supreme Judicial Court of Massachusetts found that the defendants, Bristol Asphalt Co., Inc. and others, did not meet the criteria to dismiss the case under the "anti-SLAPP" statute. The court outlined a simplified framework for considering anti-SLAPP motions, returning to the traditional approach set out in Duracraft Corp. v. Holmes Prods. Corp. The court also clarified that the appropriate standard of review for a ruling on a special motion to dismiss is de novo, rather than for an abuse of discretion.The dispute arose from the plaintiffs' efforts to open an asphalt plant in the same industrial zone as the existing plant owned by the defendants. The defendants launched a series of administrative and legal challenges to the plaintiffs’ efforts to obtain regulatory approval for the construction and operation of the proposed plant. The plaintiffs filed a three-count complaint alleging that the defendants' legal challenges constituted unfair or deceptive acts or practices, conspiracy in restraint of trade, and abuse of process. In response, the defendants filed a special motion to dismiss under the anti-SLAPP statute.The Supreme Judicial Court affirmed the lower court's denial of the defendants' special motion to dismiss, concluding that the defendants' petitioning activities were not entitled to the procedural protections of the anti-SLAPP statute. The court found that the defendants' challenges to the plaintiffs' proposed asphalt plant did not lack any reasonable factual support or arguable legal basis. Therefore, the plaintiffs' claims against the defendants were not based solely on the defendants' petitioning activities and were not subject to dismissal under the anti-SLAPP statute. View "Bristol Asphalt, Co., Inc. v. Rochester Bituminous Products, Inc." on Justia Law

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The case involves an appeal from a wrongful death action brought by Joni Babaletos, the personal representative of her late husband Thomas Babaletos, against Demoulas Super Markets, Inc., Philip Morris USA Inc., and R.J. Reynolds Tobacco Company. Babaletos claimed that the cigarettes produced and sold by the defendants caused her husband's death. She brought claims for breach of warranty in design, negligence in design and marketing, fraud, civil conspiracy, and unfair and deceptive acts and practices in violation of G. L. c. 93A, § 9. The jury found for the defendants on the four claims presented to them, and the trial judge subsequently found no liability with respect to the c. 93A claim.On appeal, Babaletos argued that the trial judge's imposition of time limits for the presentation of evidence forced her to omit essential evidence. The Supreme Judicial Court of Massachusetts held that Babaletos failed to demonstrate either an abuse of discretion by the trial judge or how she was prejudiced by the imposition of time limits. The court noted that the trial judge had repeatedly offered to extend scheduled half days to full days should the need arise during trial, but Babaletos made no such requests as the trial progressed. As such, the court affirmed the trial court's judgment. The court also provided guidance for trial judges who believe that setting time limits for the presentation of evidence would be prudent in a particular case. View "Babaletos v. Demoulas Super Markets, Inc." on Justia Law

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The Supreme Judicial Court held that the Secretary of the Commonwealth did not overstep the bounds of the authority granted to him under the Massachusetts Uniform Securities Act (MUSA), Mass. Gen. Laws ch. 110A, by promulgating the "fiduciary duty rule."The Secretary brought an administrative enforcement proceeding alleging that Plaintiff Robinhood Financial LLC violated the prohibition in Mass. Gen. Laws ch. 110A, 204(a)(2)(G) against "unethical or dishonest conduct or practices in the securities, commodities or insurance business" by dispensing ill-suited investment advice to unsophisticated investors. The Secretary defined the phrase in section 204(a)(2)(G) to require broker-dealers that provide investment advice to retail customers to comply with a statutorily-defined fiduciary duty. Thereafter, Plaintiff brought the instant action challenging the validity of the fiduciary duty rule. The superior court concluded that the Secretary acted ultra vires to promulgating the rule. The Supreme Judicial Court reversed, holding (1) the Secretary acted within his authority under MUSA; (2) the fiduciary rule does not override common-law protections available to investors; (3) MUSA is not an impermissible delegation of legislative power; and (4) the fiduciary rule is not invalid under the doctrine of conflict preemption. View "Robinhood Financial LLC v. Secretary of the Commonwealth" on Justia Law

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The Supreme Judicial Court held that delivery drivers that delivered takeout food and various prepackaged goods from local restaurants, convenience stores, and delicatessens to Grubhub, Inc. do not fall within a residual category of workers who are exempt from arbitration pursuant to section 1 of the Federal Arbitration Act (FAA).Plaintiffs, former delivery drivers for Grubhub, brought this putative class action against Grubhub, alleging violations of the Wage Act, the Tips Act, and the Minimum Wage Act and that Grubhub unlawfully retaliated against drivers who complained about their wages. Grubhub filed a motion to compel arbitration pursuant to an arbitration agreement each Plaintiff had entered into. Because Plaintiffs transported and delivered some prepackaged food items manufactured outside Massachusetts, the judge found that Plaintiffs fell within the definition of "any other class of workers engaged in foreign or interstate commerce" who were exempt from arbitration under section 1 of the FAA. The Supreme Judicial Court reversed, holding that Plaintiffs were not transportation workers actually engaged in the movement of goods in interstate commerce, as required by the residual clause of section 1. View "Archer v. Grubhub, Inc." on Justia Law

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The Supreme Judicial Court affirmed the judgment of the jury finding that Defendant violated his fiduciary duties to a corporation and converted the corporation's assets for his own benefit, holding that the judge did not err in denying Plaintiff's request for a surcharge and that there were no other prejudicial errors.In this disputed between family members in a closely-held corporation over asserted conversions of corporate funds the corporation and one of its shareholders (collectively, Plaintiffs), brought this action against an officer (Defendant), alleging that the officer diverted money from the corporation for the benefit of himself and his individually-owned corporation. The jury found in favor of Plaintiffs and awarded $1 million in damages to the corporation. The Supreme Judicial Court affirmed, holding (1) a surcharge may be used to award a plaintiff fiduciary the costs of attorney's fees under certain circumstances; (2) the judge did not err in denying Plaintiff's request for a surcharge; and (3) Defendant was not entitled to relief on his remaining claims of error. View "Tocci v. Tocci" on Justia Law

Posted in: Business Law
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The Supreme Judicial Court held that, where a franchisee is an "individual performing any service" for a franchisor, the three-prong test set forth in the independent contractor statute, Mass. Gen. Laws ch. 149, 148B, applies to the relationship between a franchisor and the individual and is not in conflict with the franchisor's disclosure obligations under the "FTC Franchise Rule."Plaintiffs filed a complaint alleging that they were 7-Eleven employees and had been misclassified as independent contractors in violation of the independent contractor statute, Mass. Gen. Laws ch. 149, 148B. A federal judge granted summary judgment in favor of Eleven, concluding that the independent contractor statue does not apply to franchisee-franchisor relationships because there is a conflict because that statute and the FTC franchise Rule, 16 C.F.R. 436.1 et seq., a series of regulations promulgated by the Federal Trade Commission (FTC) regarding franchises. The Supreme Judicial Court answered a certified question, holding that the independent contractor statute applies to the franchisor-franchisee relationship and is not in conflict with the franchisor's disclosure obligations set forth in the FTC Franchise Rule. View "Patel v. 7-Eleven, Inc." on Justia Law

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The Supreme Judicial Court affirmed the judgments of the superior court in this dispute over a commercial lease, holding that contractual provisions limiting liability for violations of Mass. Gen. Laws ch. 93A, 11 will not be enforced to protect defendants who willfully or knowingly engage in the unfair or deceptive conduct prohibited by the statute.The statute at issue makes unfair or deceptive acts or practices between businesses unlawful. When Defendants attempted to terminate a lease agreement between the parties, Plaintiff alleged a violation of Mass. Gen. Laws ch. 93A, 11. The judge found for Plaintiff on its claim and granted specific performance. After finding that Defendants' violations of the statute were willful or knowing the judge doubled the damages awarded. After reopening the trial, the judge awarded Plaintiff additional damages for willful or knowing violations. The Supreme Judicial Court affirmed, holding (1) Defendants' conduct met the standard for unfair or deceptive acts or practices under chapter 93A, 11; (2) the double damages award was warranted; and (3) a limitation of liability provision provides no protection in a chapter 93A, 11 action where the violation of the statute was done willfully or knowingly, as in this case. View "H1 Lincoln, Inc. v. South Washington Street, LLC" on Justia Law

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The Supreme Judicial Court affirmed the judgment of the superior court allowing Defendants' motion for judgment on the pleadings on the ground that the claims in this case were based on issues that had been litigating and decided in previous litigation between the same parties, holding that this action was precluded.In 2014, Plaintiff, the owner of the closely held corporation at the center of the parties' dispute, filed a complaint alleging that Defendants breached a contract and their fiduciary duties. The superior court judge found against Plaintiffs on his claims and found in favor of Defendants on their counterclaims. In 2017, Plaintiff brought this action alleging breach of contract and breach of fiduciary duty and asserting derivative claims. The superior court judge allowed Defendants' motion for judgment on the pleadings. The Supreme Judicial Court affirmed, holding (1) issue preclusion applied in this case; and (2) where the interests of the parties fully coincided with that of the closely held corporation, Plaintiff was precluded from asserting his claims by means of a derivative action. View "Mullins v. Corcoran" on Justia Law

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In this case involving the Attorney General's investigation into Facebook, Inc. under Mass. Gen. Laws ch. 93A focusing on whether Facebook misrepresented the extent to which it protected or misused user data the Supreme Judicial Court held that most of the civil investigative demands (demands) served by the Attorney General were not covered by the attorney-client privilege but that the work product doctrine applied to the documents requested.After potential widespread misuse of Facebook user data by third-party applications was reported Facebook started an investigation, known as the app developer investigation (ADI), to identify the extent to which the apps had misused user data and to determine potential resulting legal liabilities. At issue were six requests contained with the Attorney General's demands. Facebook argued that the attorney-client privilege and the work product doctrine protected the information. A judge determined that most of the information was neither privileged nor work product. The Supreme Judicial Court reversed in part, holding (1) the documents sought by the first five requests were covered by the work product doctrine; (2) the sixth request required further review; and (3) a remand was required to determined whether some of the documents requested constituted opinion work product. View "Attorney General v. Facebook, Inc." on Justia Law

Posted in: Business Law