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Patriarca v. Center for Living and Working, Inc.

2/26/2003

 
Propriety Of Counsel’s Ex Parte Communications With Opposing Party’s Former Employees

In this case the Massachusetts Supreme Judicial Court took direct appellate review of an interlocutory appeal from the Superior Court’s issuance of a protective order barring plaintiff’s counsel from having any ex parte contact with former employees of the defendant. The trial court based its order on Rule 4.2 of the Massachusetts Rules of Professional Conduct, which prohibits an attorney from having unauthorized ex parte communications with a party represented by counsel. The plaintiff Ellen Patriarca was a registered nurse who worked for the Center for Living and Working, Inc. (“CLW”) and was terminated in 1998. She sued for wrongful discharge and for breach of contract. Plaintiff's counsel then conducted ex parte interviews with four former employees of CLW. CLW’s counsel obtained a protective order to prevent further ex parte contact with its former employees. Two of the former employees were occupational therapists, a third was an assistant community department manager-supervisor, and the fourth had been a business manager who witnessed the events leading to plaintiff’s termination. Plaintiff appealed. CLW argued that Rule 4.2 should apply to former and current employees alike. 

NELF filed an amicus brief supporting CLW’s interpretation of Rule 4.2. Pending appeal, the SJC issued its landmark decision in Messing, Rudavsky & Weliky, P.C. v. President and Fellows of Harvard College. In that case, the SJC held that Rule 4.2 applies only to 3 categories of employees: (1) those who exercise managerial responsibility in the matter, (2) those who are alleged to have committed the wrongful acts at issue, and (3) those who have authority on behalf of the corporation to make decisions about the course of the litigation. The SJC in Patriarca applied its holding in Messing, Rudavsky & Weliky v. Harvard and held that none of the four former employees at issue was covered by Rule 4.2. Accordingly, the Court vacated the trial court’s protective order. The SJC declined to reach the broader issue of whether Rule 4.2 should apply to any former employee, because the Court concluded that the former employees in question would not have fallen under Rule 4.2, even if they had still been employed by CLW.

Queler v. Trustees of Bishops Forest Condominium Trust

2/26/2003

 
Validity under the Condominium Statute of the Developers’ Reservation in the Master Deed of a Right to Remove Property

This case related to the enforceability of a developer’s rights to withdraw land from a phased condominium development in the event that the developer does not complete the development in the anticipated time frame.  The Massachusetts Condominium Act provides that, once dedicated, common areas may not be divided.  Mass. Gen. L. c. 183A, §5(c).  This ensures that unit owners’ percentage shares in the common areas (and consequently their proportionate share of condominium fees) are not altered without amending the condominium documents after the master deed is recorded.  For similar reasons, the Act further provides that property may not be removed from the condominium without the approval of 75% of the unit owners.  These provisions are intended to prevent a developer from changing the condominium’s basic allocation of rights after the developer has sold some of the units to entice later purchasers to buy.  Despite these specific provisions, the Massachusetts Supreme Judicial Court has acknowledged the legitimacy of phased condominium developments as a matter of statutory interpretation.  The SJC recognized that c. 183A does not explicitly provide for phased developments, while a number of other states and the Uniform Condominium Act do include explicit phasing provisions in their condominium statutes.  However, an Appeals Court decision, Levy v. Reardon, raised a question as to the ability of developers to remove subsequent phases of a condominium even if the terms of the removal are explicitly included in the master deed.

In this case the developer provided for a phased condominium in the master deed, reserved a right to withdraw subsequent phases from the condominium and, in fact, withdrew land from the condominium when the developer was unable timely to complete the project.  The developer’s successor subsequently created a second condominium on the withdrawn land.  Disputes later arose over the respective rights of the unit owners of the two condominiums, and this suit resulted.  The first condominium argued that the provisions of the master deed permitting the developer to withdraw the unbuilt phases were void as contrary to c. 183A and that the entire original area of the first condominium, including the land on which the second condominium was built, was owned as common area by the unit owners of the first condominium.  The Land Court ruled that the language used by the original developer was legitimate and allowed the developer to withdraw unbuilt phases of the condominium.  The first condominium owners appealed and the SJC took direct appellate review. NELF supported the owners of the second condominium, arguing that the removal right was legitimately created.  NELF also argued that, as a matter of public policy, developers should be able to manage the risks of large scale condominium development by reserving a right to withdraw unbuilt phases, so long as the master deed clearly puts the unit owners on notice of that right.  The SJC agreed with NELF, confirming the validity of “contractable condominiums” as a form of phased condominium development and the flexible intent of the Massachusetts condominium statute.

Knight v. Avon Products, Inc. 

2/26/2003

 
Evidence in Age Discrimination Cases under Mass. Gen. L. c. 151B

This case raised the issue whether a plaintiff in an age discrimination case under Mass. Gen. L. c. 151B must prove that she was replaced by a “substantially younger” employee or merely by a younger employee.  Avon hired Mary Shea Knight, then 44, as a district sales manager  Two years later Avon discovered that Knight had an interest in a store that sold competing cosmetic products and fired her.  Avon replaced Knight with a woman twenty-eight months younger. Knight sued Avon for age discrimination under c. 151B.  A Berkshire superior court jury found in her favor, awarding her front pay of $420,000, back pay of $225,000, and emotional distress damages of $150,000.  After the superior court denied Avon’s motion for a new trial, Avon appealed, arguing that in the absence of direct evidence of age discrimination, Knight must prove that she was replaced by a substantially younger employee.  The Supreme Judicial Court granted Avon’s motion for direct appellate review, and solicited amicus briefs.  

NELF filed a brief in support of Avon arguing that the SJC should adopt the “substantially younger” test applied by the federal courts under the Age Discrimination in Employment Act.  A “substantially younger” requirement is consistent with the role of a prima facie case in the three-stage analysis under c. 151B, which is to support a presumption of discrimination in the absence of direct proof.  When the replacement employee is insignificantly younger, that fact has no probative value and the presumption of discrimination is not warranted. NELF demonstrated that federal circuit courts require a replacement employee to be five to ten years younger to sustain a prima facie case under the ADEA. While acknowledging that the SJC does not always elect to follow federal law, NELF argued that that the rationale underlying the federal cases is equally applicable to cases under c. 151B.  NELF argued that such a ruling does not deprive insignificantly older employees the opportunity to demonstrate that they were, in fact, discriminated against on the basis of their age.  Rather, such a ruling removes the presumption in favor of the employee and against the employer in such cases, leveling the playing field and requiring the employee to produce either direct evidence of discrimination or evidence of disparate treatment.  

The SJC agreed, ruling that the substantially younger standard was appropriate and that a terminated employee replaced by someone less than five years younger did not, without other evidence, present a triable claim of age discrimination.

Greater Boston Real Estate Board v. Massachusetts Dept. of Telecommunications 

2/26/2003

 
Mandated Multiple Carrier Cable Television Access

The Massachusetts Department of Telecommunications and Energy (“DTE”) adopted a regulation requiring owners of commercial and multifamily residential buildings that permit cable television or telecommunications access by one company to allow cable television and telecommunications access to all companies.  Because its regulatory enabling authority is limited to utilities, DTE redefined “utility” to include all residential rental buildings of more than four units (more than three if not owner-occupied) and all commercial rental buildings, provided that the building owner permited at least one traditional utility to attach its wires, cables, or conduits to the building.  The Greater Boston Real Estate Board (“GBREB”) filed for declaratory and injunctive relief against DTE. The superior court granted summary judgment for GBREB, finding that the regulation was an uncompensated taking of building owners’ property.  DTE appealed and the Supreme Judicial Court granted direct appellate review. The SJC then solicited amicus briefs.  

NELF filed a brief in support of GBREB.  The touchstone case on utility attachments to buildings is Loretto v. Teleprompter Manhattan CATV Corp., a United States Supreme Court decision holding that a New York statute permitting cable television wires to be placed on rental buildings without owner permission constituted a physical taking, regardless of the size of the physical occupation. Since DTE has no taking authority, NELF argued that an SJC finding that the regulation permits a taking would invalidate the regulation.  In addition, building on its success in Chandler v. Nantucket County Commissioners, where NELF agued that “highway” meant “highway,” NELF argued in this case that “utility” means “utility,” and that it is a perversion of the legislature’s intent in the authorizing statute to regulate buildings, as opposed to traditional utilities.  DTE does not have authority to regulate buildings, and cannot acquire that authority simply because a building contains a utility wire.  The SJC agreed with NELF’s argument that the legislature, in granting DTE the power to regulate utilities, did not intend to define “utilities” so broadly that ordinary rental buildings could be treated as public utilities.

Kuwaiti Danish Computer Co. v. Digital Equipment Corp. 

2/26/2003

 
Determining Whether Massachusetts Companies are Subject to Consumer Protection Claims for Conduct Occurring Outside of Massachusetts

In 1991, Kuwaiti Danish Computer Company (“KDCC”), on behalf of the University of Kuwait, negotiated the purchase of Digital equipment with an educational discount from a Digital sales office in the Washington, D.C., area. The deal ultimately fell apart when Digital refused to sell the equipment to KDCC for the educational discount price, which Digital only gave to educational institutions in the United States.  Most of the negotiations between KDCC and Digital were with the Washington, D.C., sales office and all the relevant meetings took place there. KDCC made several telephone calls to Massachusetts in an attempt to reverse the decision, and the educational discount policies were set in Massachusetts. The business-to-business section of the Massachusetts Consumer Protection Statute, Mass. Gen. L. c. 93A, § 11, contains an explicit requirement that conduct subject to the Act take place “primarily and substantially” in Massachusetts. The reason for such provision was, in part, to assure corporations that they would not face multiple liability in several states for the same conduct.

In this case, the trial court explicitly found that Digital’s negotiation of the contract occurred primarily and substantially outside Massachusetts, but that conduct setting the policy and the decision to enforce the policy occurred primarily in Massachusetts.  The trial court acknowledged that its finding of “primary and substantial” ties with Massachusetts on these facts was “not without some question . . . .” Nevertheless, the trial court found “in the absence of more fullsome [sic] appellate direction” that Digital’s conduct in this case occurred “primarily and substantially” in Massachusetts.  NELF filed a brief arguing that the trial court decision in this case verges on the proposition that a Massachusetts corporation is subject to c. 93A if policy decisions made at corporate headquarters have an adverse impact on anyone, anywhere.  NELF argued that the court should follow the lead of a federal court that has construed this same provision,  and hold that corporations should not automatically be subject to c. 93A simply because policies related to a claim were established in Massachusetts.  In a decision in January 2003, the SJC reversed the decision below, agreeing with NELF that the existence of neutral corporate policies adopted in a Massachusetts corporate headquarters does not constitute conduct “primarily and substantially” in Massachusetts when the parties’ principal dealings with each other occurred outside the Commonwealth.

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