Availability of Mandamus Relief from Planning Board’s Failure to Act on Request for Subdivision Approval

NELF provided direct representation in this case to developers who, in 1999, filed preliminary subdivision plans with the Planning Board of Aquinnah (formerly Gay Head), which they followed up with definitive plans in 2000. At the time that the developers filed their plans with the Planning Board, the town had a subdivision moratorium in effect that suspended the deadlines for the consideration of any filed preliminary or definitive plans.  The moratorium ended on May 23, 2000.  The Planning Board held a hearing on the preliminary plans on August 10, 2000, more than the statutorily mandated 45 days after the end of the moratorium.  In addition, the Board never notified the developers of the preliminary plans hearing and denied the preliminary plans in part because of the developers’ failure to attend the hearing.  Consequently, no hearing at all was held on the definitive plans.  The Planning Board then failed to notify the Trustees of the result of the hearing. Having heard nothing, the developers wrote to the Planning Board on May 8, 2001, seeking acknowledgement of constructive approval of the subdivision; when the Planning Board denied this request in a letter dated May 25, 2001, the developers entered into negotiations with the Board.  Their final contact with the Board was on December 17, 2001.  

After failing to receive any further response, the developers commenced an action pro se in Superior Court on August 23, 2002 seeking a mandamus requiring the Town Clerk to issue them a certification of subdivision approval.  The Superior Court granted the mandamus on September 17, 2002.  Kitras v. Jeffers, 2002 WL 31151206 (Mass. Super. Ct.). The Town appealed and in an unpublished opinion the Appeals Court reversed, Town Clerk of Aquinnah, 61 Mass. App. Ct. 1121, 813 N.E.2d 584 (table), 2004 WL 1824307 (August 16, 2004).  The sole basis for the Appeals Court’s decision was the developers’ delay in filing their action after receipt of the May 25, 2001 rejection letter.  In essence, the Appeals Court in this case elevated dictum from a prior mandamus action into a strict rule that mandamus actions requesting a government entity to act on an application must be brought in a timeframe relatively close to the appeals period that would be applicable if the entity had rejected the application.  

Acting on behalf of the developers, on October 29, 2004, NELF filed an application for further appellate review by the Supreme Judicial Court, arguing that the Appeals Court had misconstrued prior precedent which actually makes it clear that timeliness of a mandamus action is determined, not by a strict deadline, but by the equitable doctrine of laches. In this connection, NELF argued that the Appeals Court had improperly dismissed, with minimal discussion, two traditional defenses against laches raised by the developers, namely lack of prejudice and ongoing settlement negotiations. Based on these facts, NELF argued that the Appeals Court’s decision should be overturned.  

On December 1, 2004, the SJC denied NELF’s request for further appellate review.  On December 20, 2004, NELF filed a request for reconsideration by the SJC of its denial.  The SJC denied reconsideration on May 27, 2005.

Attempting to Preserve the Safe Harbor for Forward-Looking Statements by Public Companies Under the Public Securities Litigation Reform Act of 1995

In this matter, NELF joined with two other amici curiae—the American Society of Corporate Secretaries and the National Investor Relations Group—on a brief in support of the writ for certiorari that Baxter International Incorporated (“Baxter’) filed in the U.S. Supreme Court seeking review of a decision by Judge Easterbrook of the Seventh Circuit. The Seventh Circuit decision effectively guts a major protection afforded to public company issuers of securities. Asher v. Baxter Int’l Inc., 377 F.3d 727 (7th Cir. 2004).  That provision, 15 U.S.C. § 77Z-2(c)(1)(A)(i), requires dismissal of a securities lawsuit based on the issuer’s forward-looking business projections, before time-consuming and expensive discovery takes place, if the issuer’s statements were identified as forward looking and were accompanied by “meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statements.” 15 U.S.C. § 77Z-2(c)(1)(A)(i).  It is not required that the issuer list all factors that might affect its actual results or even the factors that actually affected the results; all that is required is that the cautionary statements are meaningful statements identifying important factors.  Nevertheless in this putative class-action securities Judge Easterbrook refused to dismiss the action, and instead allowed discovery to proceed to determine whether, as plaintiffs alleged, Baxter had omitted actual major risks contained in its internal estimates from the cautionary language that accompanied its projections.  It was the amici’s position that, in effect, the Seventh Circuit’s decision erroneously injects an examination of the issuer’s intent into the safe harbor analysis. 

On March 21, 2005, the Supreme Court denied Baxter’s petition for a writ of certiorari.  

Upholding the Constitutionality of the Mechanics’ Lien Law in Rhode Island

These related cases involved a constitutional challenge to the Rhode Island Mechanics’ Lien Law (R.I. G.L. 1956 §§ 34-28-1 et seq.)  The Rhode Island Superior Court held in both cases that the law violates due process because it encumbers private property without adequate procedural safeguards.  Those decisions have been appealed to the Rhode Island Supreme Court.  

These cases were brought to NELF’s attention by the Rhode Island Attorney General’s Office, which had already submitted an amicus brief supporting the Mechanics’ Lien statute against the constitutional challenge.  NELF’s principal concern with the Superior Court’s decision was that it failed to recognize the long-standing purpose behind mechanics’ lien statutes, which is to ensure payment for the time, labor, and  money that the contractor invests in the affected property.  If the Superior Court’s decisions were upheld, they would deprive the owners of construction businesses in Rhode Island of a meaningful and effective remedy against delinquent customers, with adverse economic consequences on the construction industry of Rhode Island.  

On December 3, 2004, NELF filed an amicus curiae brief with the Rhode Island Supreme Court in these cases which focused on showing that the Superior Court erred when it held that Connecticut v. Doehr, 501 U.S. 1 (1991), required a finding that the Rhode Island Mechanics’ Lien Law was unconstitutional.  NELF argued that under Doehr, due process does not require a pre-deprivation hearing in every situation.  Instead, Doehr holds that due process involves a more flexible balancing test that weights the particular vulnerability of the defendant against the plaintiff’s interest in the affected property.  

On February 22, 2005, the Rhode Island Supreme Court reversed, holding that the Mechanics Lien law, as amended after the trial court’s judgment, did not violate procedural due process.

Opposing Nationwide Long-Arm General Jurisdiction Based on “Significant” Internet Presence

Gator.com Corp. (“Gator.com”), a California-based software company, received a cease-and-desist letter in March, 2001, from L.L. Bean, a Maine corporation, demanding that Gator.com cease using its “pop-up” internet software to cause advertisements offering a coupon for one of L.L. Bean’s competitors to pop up each time one of Gator.com’s users visited the L.L. Bean website.  Gator.com then instituted a declaratory judgment action in the federal district court in California, requesting a judgment that its actions did not violate state or federal law.  The district court dismissed Gator.com’s complaint on the ground that it did not have personal jurisdiction over L.L. Bean, which has its principal place of business in Maine, has a limited number of retail stores, and has no retail stores in California.  L.L. Bean’s only contacts with California are its catalog sales, a toll-free telephone number, and an interactive website which produces about 16% of L.L. Bean’s total sales.  Gator.com appealed to the Ninth Circuit, a panel of which found, based on these facts, that L.L. Bean has sufficient contacts with California to permit the court to exercise general personal jurisdiction. See Gator.com Corp. v. L.L. Bean, Inc., 341 F.3d 1072 (9th Cir. 2003).This finding was based on the panel’s view that, in particular, L.L. Bean’s substantial mail-order and internet-based commerce in the state are sufficient to support the assertion of general personal jurisdiction.  In addition, the panel noted that, even if L.L. Bean’s only contacts with California had been through its “virtual store,” i.e., its interactive website, a finding of general jurisdiction would be warranted.  

On April 29, 2004, the Ninth Circuit granted L.L. Bean’s petition for a rehearing en banc, Gator.com Corp. v. L.L. Bean, 366 F.3d 789 (9th Cir. 2004), and on July 27, 2004, NELF filed an amicus letter in support of L.L. Bean on its own behalf and on behalf of Associated Industries of Massachusetts. The letter sought to apprise the Ninth Circuit of two issues that it should consider.  First, the letter discussed the potentially adverse impact of the panel’s decision not only on the business community as a whole but especially on small businesses that use interactive internet sites, who would be devastated by the costs of defending a lawsuit in a distant state.  Second, the letter addressed a issue not reached by the panel, arguing that, not only should the panel’s decision on general jurisdiction be reversed, but there should also be no finding of specific personal jurisdiction in California based on L.L. Bean’s cease and desist letter.  If Gator.com were to obtain specific personal jurisdiction, based on that single letter, for litigation relating to any internet activities, it would have obtained through the back door of specific jurisdiction what NELF and AIM contend it cannot obtain through general personal jurisdiction. The dispute in this case is whether Gator.com infringed L.L. Bean’s Maine-based trademark rights, which is not an appropriate basis for specific personal jurisdiction in California.  

As an anticlimactic conclusion to this closely watched case, in a decision issued on February 15, 2005, the Ninth Circuit en banc panel dismissed the appeal as moot, based on the parties’ settlement of their dispute. Although the parties had sought to structure their settlement so as to keep alive the hotly contested jurisdictional issue, the Ninth Circuit determined that the matter was no longer an actual case or controversy, as required by Article III of the Constitution.  The upshot of the dismissal is that the only decision in this matter that remains valid is the District Court’s holding that it did not have personal jurisdiction over L.L. Bean.

Defending the Rights of the Owners of an Artificial Pond

This case raised the issue whether a property owner has the right to the exclusive use of a manmade pond situated entirely on its own land.  Ace Equipment Sales (“Ace Equipment”) and the Willington Fish and Game Club (“WFGC”) own the land under an artificially created pond, which WFGC maintains for the sole use of its members.  Ace Equipment moved to enjoin the Buccinos, the owners of land bordering the southwesterly shoreline of the pond who sought to use the pond for their own recreational business, and the Buccinos’ licensees, from entering upon the pond and using it for recreational purposes, such as fishing and boating.  The trial court in Connecticut allowed the Buccinos’ motion for summary judgment, ruling, inter alia, that they had riparian rights to use the pond for recreational purposes.  The Appellate Court affirmed and the matter was further appealed to the Connecticut Supreme Court.  

NELF filed an amicus brief  supporting the property owners. NELF argued that prior decisions by the Connecticut Supreme Court strongly supported a property owner’s right to enjoy the fruits of its labor under analogous circumstances and that enforcement of the right to exclude others from benefiting from an owner’s improvements (in this case, the pond) provides the necessary economic incentive for the productive use of private property.  NELF pointed out that, although this was a matter of first impression in Connecticut, the law is settled in the majority of jurisdictions that the owner of land under a manmade pond also owns the pond and has the right to exclude all others from the pond.  In addition, the United States Supreme Court has held, under analogous circumstances involving government use of private property, that the right to exclude others from a private pond is a protected property interest whose deprivation requires just compensation, especially where the property owner has invested considerable resources to improve his land.  

On April 5, 2005, the Connecticut Supreme Court agreed with NELF and the property owners, holding that the owners of subaqueous land have exclusive control over that portion of pond bed they own and the waters above it. 

Whether a Law that Protects an Interest Group from Competition Violates the Substantive Due Process Clause

This case raised the issue whether a Puerto Rican licensing regime for new retail pharmacies violated the U.S. Constitution.  Under the regime, regulatory review was effectively triggered when existing pharmacies objected to a new pharmacy’s application to locate in a competitive area.  The record established that Puerto Rico had denied applications only when existing pharmacies opposed them.  Thus, the statute was selectively invoked to shield existing pharmacies from competition.  Walgreen brought an action under 42 U.S.C. § 1983 against Puerto Rico’s Secretary of Health, alleging that, inter alia, the licensing regime violated the Commerce Clause.  The lower court held that the regulatory regime was constitutional because it was rationally related to the legitimate purpose of encouraging new pharmacies to locate in remote, “underserved” areas, even though the legislation did not provide pharmacies with any financial incentive or any other reason to locate in these economically undesirable areas.  Walgreen appealed this ruling to the First Circuit.  

NELF filed a brief in support of Walgreen, arguing, as an alternative to the Commerce Clause objection, the licensing regime also violated substantive due process under the Fourteenth Amendment. Although substantive due process challenges to economic legislation have been disfavored since the late 1930s, when the Supreme Court became highly deferential to the states’ exercise of their police powers and allowed them to control their own economic affairs with minimal judicial oversight, NELF argued that, even so, substantive due process review should not be “toothless.”  Where, as here, a statute insulates a special interest group from economic competition without serving any discernible public purpose, a court should be on its guard to determine whether or not the government’s articulated purposes are a mere pretext.  NELF asserted that the selective enforcement of the law, triggered exclusively by the members of the interest group protected by its provisions, exposes the law’s articulated purposes as a pretext for economic protectionism.  The law puts the fox in charge of the hen house.  NELF also argued that lower federal courts in recent decisions have invalidated similar protectionist laws that serve no discernible public purpose.  NELF asserted that the framers of the Constitution contemplated that the judiciary would serve as the necessary check on legislative action that serves only the narrow interests of the few.  Judicial deference to protectionist, special-interest legislation such as the Puerto Rico statute is inconsistent with the role of the courts that the framers envisioned. 

On April 22, 2005, the First Circuit held that Puerto Rico’s licensing regime was unconstitutional because it impermissibly discriminated against interstate commerce in violation of the dormant Commerce Clause.  Having decided the case on that basis, the Court did deal with the alternative, substantive due process argument advanced by NELF.   

Protecting a Litigant’s Right to Federal Court Review of its Federal Rights Claims 

At issue in this case was the scope of the so-called Rooker-Feldman doctrine. The doctrine comes from two cases in which parties who had received final adverse judgments in state court sought to initiate actions in the federal district court, complaining that the state courts had violated their federal rights.  In those two instances, the Supreme Court held that the federal suits were impermissible, because federal appellate jurisdiction over state court judgments only exists in the Supreme Court itself, not the lower federal courts.  In Exxon Mobil, however the Third Circuit was faced with a different circumstance, namely that of parallel federal and state court actions (where the federal action had been brought before the state court matter had been fully litigated), raising the question whether in those circumstances the plaintiff in the federal action still had the right to litigate its federal claims in federal court even after the state court had rendered a judgment (in Exxon Mobil the state trial court decided the matter while an appeal of the federal court’s denial of a motion to dismiss was still pending). The Third Circuit answered in the negative, on the ground that the matter had been fully litigated in the state courts.  

NELF joined with Defenders of Property Rights in an amicus merits brief urging reversal of the Third Circuit’s decision, arguing that the Rooker-Feldman doctrine should only be applied where the federal case has been brought clearly as an attempt to gain a collateral appeal of a state court judgment, after that judgment has been rendered.   

In its decision issued on March 30, 2005, the Supreme Court unanimously agreed with NELF. In the opinion, written by Justice Ginsburg, the Supreme Court held (in summary) that the Rooker-Feldman doctrine is “confined to cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the federal district court proceedings commenced and inviting district court review and rejection of those judgments.”  Accordingly, the Third Circuit’s dismissal of the federal claim was improper, and the Supreme Court reversed and remanded the matter.

Adopting an Appropriate Standard of Proof for an Employment Discrimination Claim Based on a Lay-off Pursuant to a Reduction in Force

Mary Sullivan, an attorney, was employed in Liberty Mutual Insurance Company’s (‘Liberty”) Boston Field Office until she was permanently laid off on June 15, 1999, as part of a reduction in force (“RIF”) implemented by Liberty’s Legal Department.  Sullivan sued Liberty in the Massachusetts Superior Court alleging age and gender discrimination.  On March 5, 2003, the Superior Court granted Liberty’s motion for summary judgment and dismissed Sullivan’s complaint.  Sullivan’s appeal to the Appeals Court was taken sua sponte by the Supreme Juidicial Court for direct appellate review and arguments were heard by the SJC on December 6, 2004.  At the argument, it became clear why the SJC had taken the case.  In their questioning, the justices focused on the fact that Massachusetts has not adopted a clear standard for the establishment of a prima facie case of discrimination in the context of a discharge caused by a RIF.  At the close of the argument, the SJC asked the parties to submit supplementary memoranda of law setting forth what standard they think the Court should adopt to deal with the RIF context.  

At Liberty’s request and because whatever standard the SJC adopts will affect employers and employees throughout Massachusetts, NELF decided to file an amicus curiae brief on this question.  In its brief, NELF urged the SJC to adopt a standard of proof in such cases that was logically related to the particular circumstances of a RIF, which by definition occurs because of business necessity and might well result in a lay off of the meber of a protected class for justifiable business reasons.  NELF argued that, due to the nature of a RIF, it should not be sufficient for a plaintiff to show that other individuals, not in the protected class, remained employed.  Rather, NELF supported Liberty’s position, as already presented to the Court in its supplemental filing, that the Court should adopt a standard of proof like the one adopted by the Fifth, Sixth, Eighth, Ninth, Tenth, and Eleventh Federal Circuits.  This standard requires that, where the plaintiff’s termination is part of a RIF, the plaintiff has to show as the fourth element of the prima facie case, not simply that others who are not in the plaintiff’s protected class remained employed, but some “direct, circumstantial, or statistical evidence tending to indicate that the employer singled out the plaintiff for discharge for impermissible reasons.”  Barnes v. Diversitech GenCorp, Inc., 896 F.2d 1457, 1465 (6th Cir. 1990).  

In its decision issued on April 15, 2005, the SJC agreed with NELF and Liberty.  Joining with the majority of other jurisdictions, the SJC held that, in a RIF case, the plaintiff must show, as the fourth element of the prima facie case, that “her layoff occurred in circumstances that would raise a reasonable inference of unlawful discrimination.” 

Upholding E-mail As a Potentially Effective Method for Notifying Employees of Employment Terms 

Roderick Campbell was employed at-will as an engineer by General Dynamics Government System Corporation (“GDGS”) from February 18, 2000 until he was fired on December 30, 2002. During his employment, Campbell’s workplace was virtually paper-free and he did his work via email, using that medium to receive and review nearly all of his technical and administrative communications.  On May 1, 2001, approximately twenty months before Campbell’s discharge, GDGS implemented a Dispute Resolution Policy (“DRP”), which, inter alia, required that employees arbitrate any discrimination claims relating to their employment.  The DRP was first announced by a letter from the President of GDGS that was sent via company-wide email on April 30, 2001.  Subsequent to his discharge, Campbell brought this action, claiming that GDGS discriminated against him because of an alleged disability, i.e. sleep apnea.  GDGS moved, pursuant to the Federal Arbitration Act, for a stay of the action and an order requiring Campbell to submit his claim to arbitration in accordance with the DRP. 

On June 3, 2004, the Massachusetts Federal District Court denied GDGS’ motion and struck GDGS’s affirmative defense based on the DRP, primarily on the ground that email was an insufficient method for giving notice under the FAA, despite the facts that (a) GDGS’s IT log showed that Campbell had received and opened the email and (b) Campbell conceded that the company routinely used the intranet to communicate policies.  The District Court based its decision on its own view (with no citation to the record or to any competent authority) of how email users behave in general (i.e., that most people reflexively open and delete mass emails without reading them), essentially taking judicial notice of these “facts” and applying them to invalidate the arbitration policy and strike GDGS’s affirmative defense based on it.  

GDGS appealed the District Court’s decision to the First Circuit and, on November 2, 2004, NELF filed an amicus brief arguing for reversal of the District Court’s decision on the ground that the District Court improperly took judicial notice, in violation of Rule 201 of the Federal Rules of Evidence, of its own anecdotal and unsupported views concerning the general behavior of email users.  Rule 201 requires the Court to notify the parties of its intention to take judicial notice and provide an opportunity for evidence to be presented on the issues. It also permits judicial notice to be taken of only certain types of “facts,” which, NELF argued, do not include a court’s personal views on how email users behave. NELF argued that once the improperly judicially noticed “facts” are removed, no factual basis remains for the District Court’s decision in this case.  

On May 23, 2005, the First Circuit issued its decision, upholding the District Court’s refusal to stay or dismiss the action to permit arbitration. However, unlike the District Court, the First Circuit based its decision not on the use of e-mail per se, but on the substantive inadequacy of the email notice in this particular case. With respect to the issue that had concerned NELF, the Court specifically noted that it did not share the District Court’s skepticism of the use of email notice and, to the contrary, found that, especially in light of Electronic Signatures in Global and national Commerce Act of 2000, 15 U.S.C. §§ 7001-7031, proper email notice would satisfy the Federal Arbitration Act’s “written provision” requirement and that “the choice of mass e-mail is not determinative of the appropriateness of the notice” at issue. Further, noting that this was a close case, the Court cautioned that its holding “should not be read as a general denunciation of e-mail as a medium for contract formation in the workplace.”  It noted that “an e-mail, properly couched, can be an appropriate medium for forming an arbitration agreement.”