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Gyulakian v. Lexus of Watertown

10/24/2016

 
Arguing that in a Claim of Employment Discrimination Under Mass. G.L. c. 151B, an Employer Should Not Be Held Vicariously Liable for Punitive Damages Based on a Supervisor’s Egregious Misconduct Towards a Subordinate Employee, if the Employer Has Made Good Faith Efforts to Comply with c. 151B, Namely by Taking Preventive and Corrective Steps to Eliminate Discrimination in the Workplace.

In this case, the Massachusetts Supreme Judicial Court was presented with the novel issue whether an employer should be held strictly liable under the Massachusetts Employment Anti-Discrimination Act (Mass. G. L. c. 151B) for punitive damages based on the egregious misconduct of a supervisor toward a subordinate employee. The issue was significant because the SJC held many years ago, in College-Town v. Mass. Comm’n Against Discrimination, 400 Mass. 156 (1987), that employers are strictly liable in actual damages for actionable supervisory misconduct under c. 151B. And so the Court was presented with the question whether the same College-Town standard of strict liability should apply to employers with respect to punitive damages, given the markedly different purposes that distinguish punitive from actual damages.
 
The plaintiff, Emma Gyulakian, was an employee of Lexus of Watertown from 2003 through 2012. In 2014, she prevailed in a jury trial on her claim that her immediate supervisor had sexually harassed her for an extended period of time and had thereby created an unlawful hostile work environment in violation of c. 151B. The jury awarded her $40,000 in compensatory damages and $500,000 in punitive damages. On Lexus’ post-trial motions, the trial court vacated the award of punitive damages. The lower court apparently concluded that, as a matter of law, an employer cannot be held vicariously liable in punitive damages for egregious supervisory misconduct.
 
In the SJC appeal, NELF filed an amicus brief supporting the decision below, arguing that the College-Town standard of strict liability should not apply, and that an employer should not be liable for punitive damages unless it has engaged in blameworthy conduct itself. Recognizing such a standard is appropriate, NELF argued, because punitive damages serve to punish and deter an employer’s wrongful conduct, not to provide the injured employee with a remedy for the actual harm inflicted by the rogue supervisor. Accordingly, NELF argued that an employer should not be held liable for punitive damages if it can show that it has taken affirmative steps to eliminate discrimination in the workplace, such as by implementing an antidiscrimination policy, through education and training, and by providing internal grievance procedures and acting appropriately on grievances. Indeed, NELF argued, recognizing such a standard would create an incentive for employers to take measures to carry out c. 151B’s important social goal of eradicating discrimination in the workplace.


In its decision of August 24, 2016, the SJC adopted NELF’s position that an employer should not be held liable in punitive damages for a supervisor’s egregious misconduct unless the employer itself has engaged in blameworthy misconduct. The Court announced that the standard to be applied is whether the employer was on notice of the supervisor’s misconduct and egregiously or outrageously failed to respond. “We consider first whether the employer was on notice of the harassment and failed to take steps to investigate and remedy the situation; and, second, whether that failure was outrageous or egregious.” The Court then applied this two-step test to the record and concluded that Lexus was liable in punitive damages for the supervisor’s harassment of Gyulakian. Therefore, the Court reinstated the award of punitive damages. Nonetheless, the principle articulated in NELF’s amicus brief is now the law in Massachusetts. Employers cannot be held liable for punitive damages unless they have engaged in outrageous or egregious misconduct of their own.

Turra v. Deutsche Bank Trust Company Americas

10/16/2016

 
Click here to read the brief.

Arguing that an Otherwise Valid Foreclosure Should Not Be Invalidated Because the Mortgagee Allegedly did Not Comply Fully with the Requirement Under Massachusetts Law that, Before Taking Possession or Conveying Title, Notice Must Be Given to Tenants, Certain Municipal Officials, and Any Provider of Water and Sewer Services to the Property


Since the collapse of the housing market in 2008, there has been an increased number lawsuits in which a homeowner has sought to thwart or undo a foreclosure on the grounds that the foreclosing party failed to comply with some requirement of the Commonwealth’s nonjudicial foreclosure law. This is another such case, the latest in a string of cases that commenced with U.S. Bank N.A. v. Ibanez, 458 Mass. 637 (2011).

The homeowner here asks the courts to find the foreclosure sale of his property void on the grounds that the mortgagee bank failed to comply with one of a series of statutes that, purportedly, the SJC has declared set out the steps required in order to effect a valid foreclosure sale under the statutory power of sale. This particular statute requires that, within 30 days of the closing, the foreclosing party give notice of the closing to the municipal tax assessor and any sewer or water provider. Since there is no dispute about the failure of the bank to comply with this requirement, the case boils down to whether the SJC really meant what it purportedly said in the six cases the homeowner relies on—and, if so, whether the SJC should continue to mean it.
​

In its amicus brief, filed in support of the bank, NELF argues that the plaintiff relies exclusively on pure dicta, a point NELF illustrates by analyzing U.S. Bank N.A. v. Schumacher, 467 Mass. 421 (2011), Turra’s strongest case. NELF urges the Court not to be bound by dicta because this important issue has never been placed squarely before the Court and briefed until now. Moving to the substantive legal question raised by this case, NELF demonstrates that the plaintiff’s view of this post-sale notice statute cannot be reconciled with the plain language of G.L. c. 183, § 21, which creates a right to foreclosure by statutory power of sale and which describes all the statutory requirements for the exercise of that power as pre-sale requirements. NELF then shows that the description given in § 21 also excludes from being foreclosure sale requirements other statutes mentioned in the dicta Turra cites, thereby further undermining his argument that the dicta provides a reliable, complete list of statute a mortgagee must comply with. Finally, NELF analyzes the language of the notice statute in question and shows that the statute is not even mandatory, but rather directory.

Chitwood v. Vertex Pharmaceuticals

10/15/2016

 
Click here to read the brief.

Arguing that a shareholder does not have a right under the Massachusetts Business Corporation Act to inspect a corporation’s books and records
after the board of directors has refused his litigation demand concerning alleged corporate wrongdoing.

In this case, which the Massachusetts Supreme Judicial Court has taken sua sponte for direct appellate review, the Court will decide under what circumstances a shareholder may be permitted to inspect a corporation’s books and records after the board of directors has refused his litigation demand concerning alleged corporate wrongdoing. Under the Massachusetts Business Corporations Act, G. L. c. 156D, § 16.02(1), a shareholder has the right to inspect certain corporate books and records if he establishes a “proper purpose” with “reasonable particularity,” among other statutory requirements. At issue, then, is what constitutes a “proper purpose” sufficient to permit a shareholder to inspect the board’s books and records after the board has refused the shareholder’s litigation demand.
​


NELF will argue, in support of Vertex, that a “demand refused” shareholder should not be permitted to inspect the board’s books and records unless he can show that the board’s decision making process may have lacked the good faith and diligence necessary to warrant protection under the business judgment rule. This is because another key provision of the Act, addressing shareholder derivative actions, expressly codifies the business judgment rule and requires a court to uphold a board’s refusal of a shareholder’s litigation demand, so long as a majority of independent directors “has determined in good faith after conducting a reasonable inquiry upon which its conclusions are based that the maintenance of the [shareholder derivative suit] is not in the best interests of the corporation . . . .” G. L. c. 156D, § 7.44(a). That is, a demand-refused shareholder is limited to seeking judicial review of the board’s decision making process itself, and only when the shareholder has presented a credible threshold challenge to the integrity of that process to overcome its presumptive validity. Therefore, to harmonize the books-and-records provision with the shareholder derivative provision of the same statute, as NELF will argue the Court should do, a demand-refused shareholder who seeks discovery of the board’s documents should be required to persuade the trial court that the board’s decision making process does not warrant protection under the business judgment rule. Accordingly, the shareholder should be required to show that the board’s decision has fallen short of at least one of the three statutory requirements quoted above: good faith, reasonableness, and independence. For these and other reasons discussed below, NELF will argue that the SJC should affirm the lower court’s dismissal of Chitwood’s books-and-records request.

Verdrager v. Mintz Levin

6/2/2016

 
Opposing Plaintiff’s Argument That Her Copying and Dissemination of Her Law Firm Employer’s Sensitive and/or Confidential Documents In Order to Advance Her Discrimination Claim Constituted “Protected Activity” Such That Her Termination for Such Conduct Constituted Unlawful Retaliation.
​

The question presented in this matter before Massachusetts’s highest court was whether an employer may lawfully terminate an employee who violated the employer's confidentiality policies to gather evidence in support of a discrimination claim. The Massachusetts anti-discrimination statute, Mass. G.L. c. 151B, § 4(4), declares it an unlawful practice for any employer "to discharge, expel or otherwise discriminate against any person because he has opposed any practices forbidden under this chapter or because he has filed a complaint, testified or assisted in any proceeding" before the Massachusetts Commission Against Discrimination ("MCAD").  Mass. G.L. c. 151B § 4(4) (2015) (emphasis added). Under this and other anti-retaliation provisions like it, courts have identified certain employee actions as "protected activities," declaring that adverse employment actions with a causal connection to such protected activities establish at least a prima facie case of retaliation.

In this case, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. ("Mintz Levin") terminated Verdrager, an associate attorney, for violating its computer use and confidentiality policies, when it discovered she had secretly copied internal documents from its computer systems to support a gender discrimination claim that she had made against the firm. It turned out that, over the course of a year, Verdrager had accessed, copied, and transmitted a multitude of her employer's confidential and sensitive internal documents, including some arguably subject to protection under the attorney-client privilege. Verdrager, who lost on summary judgment in the Superior Court, contends in this appeal that, when it fired her for violating the firm’s policies, Mintz Levin unlawfully retaliated against her for engaging in "protected activity" in support of her discrimination claims.  

In connection with its consideration of Verdrager’s appeal, the Massachusetts Court issued a call for amicus briefs on the following question:

     Whether, and in what circumstances, an employee may engage in so-called self-help discovery during the course of her employment, by collecting and copying documents of the employer that she intends to use in a discrimination case against the employer; whether, and to what extent, an employee who obtains documents in such a fashion is engaged in protected activity for purposes of G. L. c. 151B, such that she may not be subject to adverse employment action as a consequence.

In answering this question, NELF’s amicus brief in support of the employer, Mintz Levin, made two principal arguments. First NELF argued that, based on the clear language of the Massachusetts employment discrimination statute, “self-help” discover is simply not a protected activity. The statute, on its face, restricts an employee’s protected activity only to three categories of conduct: opposing discriminatory practices with one’s employer (such as by informal complaints or use of an employer’s grievance procedures); the formal filing of a charge of discrimination; or participation in an administrative or judicial proceeding. An unauthorized breach of an employer’s confidentiality policies to obtain confidential documents is simply not covered.  

Second, NELF argued that, even if the type of activity at issue here might be protected in other circumstances, in this case the deliberate and unnecessary violation of her employer’s legitimate confidentiality polices robs what the plaintiff did of any protection. Put another way, the employee’s actions were not reasonable in the circumstances, given the firm’s written polices and even its ethical duty, as a law firm, maintain the strict confidentiality of its internal documents.

In a disappointing decision issued on May 31, 2016, the SJC reversed the Superior Court’s summary judgment in Mintz Levin’s favor and, finding that the defendant was not entitled to summary judgment, remanded the case to the Superior Court for further proceedings, consistent with the SJC’s decision, on the plaintiff’s G.L. c. 151B claims.  

With regard to the amicus question addressed by NELF, the Court noted that it did not need to address the question “as it is relevant only to the plaintiff’s claim that her termination was retaliatory, and we have determined that the defendants are not entitled to summary judgment on that issue.” However, to provide guidance to the trial court, the Court did address the issue, which was one of first impression in Massachusetts, and, disagreeing with NELF’s first argument that c. 151B on its face did not protect self-help discovery, ruled that “[t]aking into consideration the interests at stake and the views of other courts that have addressed the matter, we conclude that such conduct may in certain circumstances constitute protected activity under [G.L. c. 151B], but only if the employee’s actions are reasonable in the totality of the circumstances.” In this connection, the Court emphasized that the seriousness of this test, and adopted as a non-exhaustive framework the seven factors suggested by the court in Quinlan v. Curtiss-Wright Corp., 204 N.J. 2329 (2010).

With regard to NELF’s second argument, that Verdrager’s actions were not protected activity because they were not reasonable, the SJC offered no opinion, preferring for that to be decided by the Superior Court at trial.

Town of Lunenburg Zoning Board of Appeals v. Hollis Hills LLC and Massachusetts Housing Appeal Committee 

6/2/2016

 
Arguing that the Housing Appeals Committee Did Not Exceed Its Authority by Supposedly “Invalidating” Town Bylaws and, In the Process, Failing to Presume their Validity While Also Misallocating to the Town the Burden of Proof as to the Issue.

​
In 1955, in order to facilitate the construction of affordable housing, Massachusetts enacted General Law c. 40B, which enables a developer to obtain a single, comprehensive permit for the construction of any project that includes affordable housing units.  Should a town deny the application for such a permit, the developer may appeal to the state-wide Housing Appeals Committee (HAC). The law arose in response to towns’ use of local laws to exclude affordable housing from their locale. In the present case, the developer, Hollis Hills LLC, sought a comprehensive permit, believing the sewer fees for its project in Lunenburg would be about $17,000 under applicable town bylaws, only to discover later that the town would invoke different bylaws, under which the fees soared to about $1.75 million.

Against its will, Lunenburg had previously been required by the HAC to grant Hollis Hills a comprehensive permit (see Zoning Board of Appeals of Lunenburg v. Housing Appeals Committee, 464 Mass. 38 (2013)), with the issue of sewer fees reserved for later determination. Subsequently, when reviewing the sewer fees at issue, the HAC ruled, after taking extensive evidence, that the bylaws relied on by the town for setting the fees so high had not even been enacted at the relevant time (i.e., the date the permit application was submitted) and therefore they could not be used to calculate the fees applicable to the project. The town appealed to the Superior Court, arguing that the HAC was wrong about the relevant time, had erroneously placed the burden on the town to prove what bylaws were in effect at that time, and had exceeded its powers by, supposedly, “invalidating” the town’s preferred set of sewer-fee bylaws, whose validity, so the town claimed, should have been presumed by the HAC. The court dismissed the appeal on grounds that the town had failed to preserve these issues below. The town then appealed to the Appeals Court, where it repeated its arguments.

NELF filed a brief supporting Hollis Hills and asking the Appeals Court to affirm the judgment below, albeit on substantive grounds, rather than on the procedural grounds cited by the trial judge. NELF pointed out that, under statute and case law, Massachusetts courts and adjudicatory agencies like the HAC are not permitted to take judicial notice of either the text or the effective date of local laws. In short, what local law governs is a question of fact that must be proven by the proponent, just as any other facts a party wishes to establish. The burden of proof was therefore properly placed on the town by the HAC, NELF contended, and the HAC’s ruling that the town had failed to carry its burden was therefore not an “invalidation” of the bylaws. NELF then demonstrated that the principle that the validity of laws is to be presumed applies only when there is a direct judicial challenge to a law’s validity, as occurred in all ten of the cases the town relied on to argue its point. Here, by contrast, the HAC was dealing with the antecedent evidentiary problem of determining what legal text counts as the apparently applicable law in the first place. NELF concluded its brief by discussing the aims of the comprehensive permit law and how the past use of local laws to exclude projects like Hollis Hills makes it imperative that a permit not be subject to local laws enacted after the developer submits its application.

On March 3, 2016, the Massachusetts Appeals Court, agreeing with NELF, affirmed the judgment below. Addressing the issue briefed by NELF, the court wrote: “Furthermore, the HAC did not purport to invalidate any of the town’s regulations; it decided simply that in this case, other than a charge of $125 per unit, no validly adopted sewer charge applies to the project. That this determination required the HAC to consider whether the town validly had adopted fees does not mean the HAC ‘invalidated’ any town regulations.”

Commonwealth v. Lucas

10/29/2015

 
Arguing That the First Amendment Should Prohibit Massachusetts from Criminalizing Knowingly False Political Campaign Speech
​

At issue was whether Mass. G. L. c. 56, § 42, a 1946 statute that criminalizes any knowingly false statement in relation to any candidate for nomination or election to public office, violated the First Amendment to the United States Constitution. The statute punishes the convicted speaker with either a fine of up to $1,000 or imprisonment for up to six months. This case was initiated during the 2014 state elections by an incumbent (and subsequently reelected) candidate, State Representative Brian Mannal, who successfully applied for the issuance of a criminal complaint against Melissa Lucas, the chairperson and treasurer of Jobs First, an independent-expenditure Political Action Committee. Mannal alleged that Lucas was responsible for the PAC’s publication and circulation of a brochure falsely stating that Mannal, a criminal defense attorney, would benefit personally from the passage of bill that he was sponsoring. Mannal’s proposed legislation would earmark state funds for court-appointed criminal attorneys representing indigent convicted sex offenders in post-conviction proceedings. The SJC stayed Lucas’ arraignment in Falmouth District Court until it decided the constitutionality of the statute, in the exercise of its general superintendence powers. The Court issued an amicus announcement and heard oral argument on May 7, 2015.
 
In its amicus brief in support of the defendant, NELF argued that this case was not about protecting the right to lie in political campaigns. Instead, it was about protecting the First Amendment right of everyone, including State Representative Brian Mannal himself, to engage freely in political debate about the qualifications of candidates for public office, without fear of criminal reprisal from the government. Such speech is “integral to the operation of the system of government established by our Constitution. The First Amendment affords the broadest protection to such political expression . . . .” McIntyre v. Ohio Elections Comm'n, 514 U.S. 334, 346 (1995) (citations and internal quotation marks omitted). 
 
As NELF argued, political speech does not lose its First Amendment protection even if it is false (to the extent that political speech can be reduced to truth or falsity). This means that the disputed statute is a content-based prohibition on protected speech. Therefore, the statute violates the First Amendment unless the Commonwealth can show that it survives “exacting scrutiny.” It must be narrowly tailored to serve an overriding state interest.
 
This the Commonwealth cannot show. Indeed, “it might be maintained that political speech simply cannot be banned or restricted as a categorical matter . . . .” Citizens United v. Fed. Election Comm’n, 558 U.S. 310, 340 (2010). This is because political campaign speech is the essence of self-government and thus occupies the highest rung of First Amendment values. To ensure the proper functioning of a representative democracy, core political speech must be afforded ample breathing space to flourish.   The First Amendment thus requires that the electorate shall engage freely in political debate and shall decide whom and what to believe during an election campaign, without any governmental interference. 
 
By contrast, the fact or threat of criminal prosecution is antithetical to this First Amendment value because it stifles political discourse, especially when that discourse is needed most, on the eve of an election. The statute thus impinges the rights of the electorate, both as speaker and listener. As a result, the political process suffers.
 
The First Amendment ensures a wide-open marketplace of ideas in which the appropriate remedy for allegedly false speech is simply more speech, and not enforced silence through actual or threatened criminal prosecution. As the Supreme Court has long recognized, counter speech is a particularly effective remedy during a political campaign, because a candidate is likely to respond immediately and forcefully to false accusations, as this case illustrates.
 
Not only does the statute fail exacting scrutiny. It is also void for vagueness. Political speech is often an unruly mixture of fact and opinion that cannot be reduced to neat categories of truth and falsity. This means that the statute cannot provide adequate notice of what speech is permitted or proscribed. This can only result in widespread self-censorship among the electorate. The statute’s vagueness could also invite prosecutorial abuse, such as the silencing of views that are critical of incumbents or government generally. 
 
In its decision issued on August 6, 2015, the Supreme Judicial Court agreed with NELF that Mass. G. L. c. 56, § 42 was unconstitutional. The Court, however, based its decision entirely on the Massachusetts constitution holding that “§ 42 is antagonistic to the fundamental right of free speech enshrined in art. 16 of our Declaration of Rights and, therefore, is invalid.” On this basis, the Court dismissed the criminal complaint charging the defendant with criminal charges under § 42.

Vale v. New England Cleaning Services, Inc. 

10/28/2015

 
Whether an Agreement to Submit Valuation of Stock to the Binding Decision of Arbitrators is an Arbitration Agreement Enforceable Under the Massachusetts Arbitration Act
​
At issue in this case, pending before the Massachusetts Supreme Judicial Court (“SJC”), is whether a stock valuation provision in the articles of organization of a closely held Massachusetts corporation is enforceable under the Massachusetts Arbitration Act, G. L. c. 251, §§ 1-18 (“MAA”). The SJC requested amicus briefing on this issue. Under this familiar contract provision, the shareholders have agreed in advance to submit any future dispute about the value of a departing shareholder’s stock to a binding and final determination by an arbitral panel. Unlike the common law, the MAA provides for expedited specific performance of an arbitration agreement, via a motion to compel arbitration, along with other streamlined statutory mechanisms designed to enforce the parties’ bargained-for expectations.
 
The departing shareholder in this case has refused to complete the parties’ agreed-upon process for arbitrating the value of his shares. Instead, he has sought an accounting in court, as part of his claim for breach of fiduciary duty against the defendant, New England Cleaning Services, Inc. (“NECS”). The Superior Court denied NECS’ motion to compel arbitration, concluding that the parties’ valuation agreement was not an arbitration agreement. The lower court based its decision on Palmer v. Clark, 106 Mass. 373 (1871), and its progeny. In Palmer, decided nearly a century before the MAA’s enactment in 1960, this Court drew a distinction between an appraisal and an arbitration agreement. The SJC has also requested amicus briefing on whether Palmer and its progeny survive the MAA.

In its amicus brief supporting NECS, NELF has argued that the parties’ valuation agreement is indeed an arbitration agreement enforceable under the MAA, which applies broadly to any “controversy” that the parties have designated in their agreement for resolution in binding arbitration. In fact, this Court has already enforced a property valuation agreement under the MAA. See Trustees of Boston & Maine Corp. v. Massachusetts Bay Transp. Auth., 363 Mass. 386 (1973) (enforcing railroad right-of-way valuation agreement under MAA). As the Court recognized implicitly in Trustees of Boston & Maine, the MAA allows the parties to decide in advance both what is to be arbitrated--however specific and factual the issue--and how it is to be arbitrated--however informal the procedures. See G. L. c. 251, § 1 (MAA applies to “any controversy thereafter arising . . . .“), § 5 (MAA requires certain arbitral procedures “[u]nless otherwise provided by the agreement . . . .”) (emphasis added). In short, the MAA embodies the modern notion of party autonomy in the crafting of arbitration agreements tailored to each particular dispute. Therefore, the parties’ valuation agreement should be specifically enforced under the MAA. As a result, the old distinction between an appraisal and an arbitration agreement under Palmer should not survive the MAA. That distinction was drawn under a predecessor arbitration statute that did not apply to valuation agreements. Moreover, Palmer was decided when predispute arbitration agreements were voidable. Thus, in its day, Palmer actually protected the rights of shareholders to an appraisal agreement. Such protection is no longer necessary now that such an agreement can be enforced under the MAA.

On May 22, 2015, the Supreme Judicial Court issued its opinion in this case. Agreeing with NELF, the Court concluded that Article 5 of NECS's articles of incorporation contained a valid agreement to arbitrate future controversies regarding the value of NECS's stock. However, the Court also concluded that no such controversy existed at the time of NECS's motion to compel arbitration and, therefore, affirmed the order denying the NECS's motion to compel arbitration. 

Molina v. State Garden, Inc.

10/27/2015

 
Defending the Immunity from Suit, under the Workers Compensation Act, of an Insured Alternate Employer
​
This case raised an important issue of first impression under Massachusetts workers compensation law. The plaintiff worked for a temporary staffing agency (his general employer) and was sent out on a job assignment to the defendant (his special, or alternate, employer). He was injured on the first day of the assignment, while performing a task under the direct control of the defendant on the latter’s premises. Later, after collecting workers compensation benefits, he sued the defendant on the theory that the company had not been his employer under workers compensation law and so did not enjoy an employer’s statutory immunity from suit. The trial judge granted the defendant summary judgment, and the plaintiff appealed. He argued that the defendant could not be regarded as his employer because the benefits he received were paid on the temp agency’s workers compensation policy.
​
As NELF noted in its brief, filed with co-amicus Associated Industries of Massachusetts, the defendant was named as an additional insured on an “Alternate Employer Endorsement” attached to the temp agency’s policy. As NELF successfully argued several years ago in another legal context, the effect of being named as an additional insured on a policy is to create a direct relationship between the insurer and the additional insured for the latter’s own liabilities, without regard to which party paid the premium for the additional coverage or who was identified as the named insured on the policy. Of crucial importance in this connection is the fact that the workers compensation act specifically permits a special employer, like the defendant, to agree with the general employer that it, not the general employer, will be liable for workers compensation, provided that the special employer is insured. The “Alternate Employer Endorsement” reflects precisely such an agreement and provides precisely such insured status to the defendant. In fact, as NELF pointed out, this particular endorsement form has been approved by the Massachusetts Division of Insurance for use in such situations, a fact of which both parties in the case were unaware. 

NELF further showed that such endorsements are used nationally for this purpose, typically in the exact same standardized form found here (the form is promulgated by the National Council of Compensation Insurers). NELF called the Appeals Court’s attention to the use of the form in other states (New York, North Carolina, Texas, Delaware, Minnesota), where the form is officially approved and sometimes even prescribed for this use. Molina’s contentions that the use of the endorsement amounted to “an illusory promise” and a nefarious “artifice” were therefore without merit. In short, NELF concluded that State Garden was clearly the relevant insured employer for purposes of the work-related injury Molina suffered and that the company was therefore entitled to employer immunity from suit.

In its decision issued on September 3, 2015, the Massachusetts Appeals Court agreed with NELF that, under the endorsement, the plaintiff’s special employer was immune from suit under the Workers Compensation Act.

​On September 23, 2015, Molina applied for further appellate review by the Supreme Judicial Court. This application remains pending.

Outfront Media VW Communications LLC v. Massachusetts Department of Transportation  

10/26/2015

 
Arguing that, Without an Express Legislative Mandate, the Massachusetts Department of Transportation Does Not Have the Authority to Regulate Outdoor Advertising Throughout the Commonwealth.
​
This case is before the Massachusetts Supreme Judicial Court on a certified question from the United States District Court for the District of Massachusetts. The question is whether the Massachusetts Legislature has authorized the Massachusetts Department of Transportation (“MassDOT”) to regulate all “off-premise” outdoor advertising (billboards, outside signs, and the like) throughout the Commonwealth. The SJC issued an amicus call on the question and NELF filed an amicus brief in support of Outfront Media, arguing that the MassDOT had acted without legislative authorization when it promulgated regulations purporting to regulate all off-premise outdoor advertising in the Commonwealth. 
 
The issue was of importance to NELF and its supporters because outdoor advertising companies have long been subject to detailed and demanding local regulation by towns and cities throughout the state, and do not need to be burdened with duplicative and costly regulations at the state level.
 
In its brief, NELF argued that when the Massachusetts Legislature created MassDOT in 2009 in an omnibus Transportation Act, that same Act abolished the Outdoor Advertising Board, a state agency that for several decades had regulated the placement and manner of outdoor advertising in Massachusetts. Notably, the 2009 Act did not re-delegate the former Outdoor Advertising Agency’s regulatory powers to the MassDOT. By contrast, NELF argued that the Legislature, in the past, had indeed re-delegated the rulemaking authority of a predecessor outdoor advertising agency to its successor state agency, by so amending the relevant provisions of the enabling statutes. Therefore, the Legislature’s failure to do so in 2009 can only be a deliberate choice to remove the state from regulating all outdoor advertisements throughout the Commonwealth. Moreover, the Legislature has for nearly 100 years authorized cities and towns to regulate outdoor advertising. And both the Legislature and and the SJC have recognized that the regulation of outdoor advertising is primarily a local issue, because only local governments can respond to the particular aesthetic concerns and geographical details of each neighborhood.

​To reinforce this point, NELF provided an extensive analysis and summary of the ordinances and bylaws of several cities and towns throughout the Commonwealth. NELF demonstrated persuasively that several cities and towns have done far more than the disputed state regulations to restrict the size, placement, and manner of outdoor advertising. Therefore, state regulation of the same issue is unnecessary.
 
After filing its brief, NELF received word that the case had settled, leaving the legal issue unresolved.

Meshna v. Scrivanos 

6/3/2015

 
Arguing that the Massachusetts Wage Act allows a business to maintain a no-tipping policy

At issue in this case, which was before the Massachusetts Supreme Judicial Court (“SJC”), was whether the tips provision of the Massachusetts Wage Act, G. L. c. 149, § 152A, allows a business establishment to maintain a no-tipping policy, under which patrons are requested not to tip employees, and employees are, in turn, required not to accept any such tips. The plaintiffs were employees of various Dunkin’ Donuts franchises owned and operated by the defendants Constantine Scrivanos and the Scrivano Group (collectively “Scrivanos”). The plaintiffs claimed, on behalf of themselves and all other similarly situated employees, that Scrivanos violated their rights under the Wage Act by preventing them from accepting tips offered to them by customers. The Superior Court (Fabricant, J.) ruled that a no-tipping policy is permitted under the statute, so long as the policy is “clearly and conspicuously announced” to provide notice to patrons. The SJC took the case on direct appellate review and requested amicus briefing on this issue.

NELF argued, in support of the defendants, that the Wage Act does not prohibit, or address in any other way, a no-tipping policy. While NELF is not opposed to the practice of tipping, nevertheless NELF does not believe that the statute requires a business to permit tipping on its premises. Nowhere does the statute provide that a business must permit its patrons to tip its employees. Instead, the Act addresses only the consequences that result when a business does permit tipping—i.e., such a business cannot confiscate tips from its employees. And, since the statute does not require a business to permit tipping, its silence on the issue should be interpreted as leaving undisturbed “the traditional broad authority of owners and proprietors of business establishments to adopt reasonable rules regulating the conduct of patrons or tenants.” Butler v. Adoption Media, LLC, 486 F. Supp.2d 1022, 1030 (N.D. Cal. 2007) (citation and internal quotation marks omitted). After all, “[a] statute is not to be interpreted as effecting a material change in or a repeal of the common law unless the intent to do so is clearly expressed.” Reading Co-Op. Bank v. Suffolk Constr. Co., 464 Mass. 543, 549 (2013) (citation and internal punctuation marks omitted) (emphasis added). Therefore, the Act, lacking any clearly expressed intent to the contrary, should be interpreted as preserving the bedrock common law principle that “[t]he status of an invitee is not absolute but is limited by the scope of the landowner’s invitation.” 62 Am. Jur. 2d Premises Liability § 100.”). In short, the statute allows each business to exercise its own judgment and decide for itself whether tipping is a good idea for its particular establishment. 

In its decision of April 10, 2015, the Court agreed with NELF and held that the tipping statute does not require an employer of wait staff to permit tipping. Instead, the statute only addresses the circumstances when the employer does permit tipping. “No language in [the tipping statute] prohibits an employer from imposing a no-tipping policy. The Tips Act addresses circumstances in which tipping is permitted and wait staff employees have been given tips, directly or indirectly; it prescribes what the employer is required to do with such tips.” Meshna v. Scrivanos, 471 Mass. 169 (2015). 

Christakis v. Jeanne D'Arc Credit Union

6/3/2015

 
Defending the Rights of a Secured Judgment Creditor Against an Asserted Discharge of the Debt in Chapter 7 Bankruptcy

This case was the subject of an amicus call by the SJC and presented what was essentially an issue of first impression in the Court, at least under modern bankruptcy law. The defendant credit union was a secured creditor that, in an earlier action, obtained a judgment against the present plaintiff and perfected a judicial lien on her real property to secure the judgment. It intended to sell the property in order to satisfy a judgment arising out her unpaid credit card debt. About a year after the credit union won its judgment and lien, the plaintiff filed for bankruptcy and her debts were discharged under Chapter 7. She then brought this action to “remove cloud on title” in order to forestall the sale of her property, arguing that the bankruptcy discharge voided the judgment on which the creditor’s pre-bankruptcy lien rested. Other than a glancing remark in a short, 1937 decision, the Court had not discussed, let alone decided, whether, in circumstances like these, a creditor retains a secured interest upon which it may foreclose.

Concerned by the failure of the parties and the trial judge to discuss controlling federal case law, NELF filed a brief in support of the credit union. In its brief, NELF identified Johnson v. Home State Bank, 501 U.S. 78 (1991), as providing the rule of decision in this case. NELF explained the reasoning of Johnson and cited numerous lower court decisions acknowledging the precedential status of Johnson. Briefly put, a discharge of debts only reaches debts for which the debtor’s personal assets in bankruptcy are liable; property interests (such as, here, liens interests) validly conveyed to another party before bankruptcy do not form part of the debtor’s later bankruptcy estate, and thus the debts secured by such interests remain unaffected by a discharge. NELF also rebutted Christakis’ attempts to exempt non-consentual liens, like the judgment lien in question here, from the rule of Johnson. NELF pointed out the Johnson itself relied on two cases involving judicial liens, noting further that Christakis conceded that she could not satisfy the sole statutory exception addressing judgment liens. Finally, NELF demonstrated that the few cases Christakis cited offer no support to her position for a variety of reasons; in particular, NELF observed that her strongest case actually rests on a serious misquotation of an earlier case on a crucial point of law.

In its May 6, 2015 decision, Christakis v. Jeanne D’Arc Credit Union, 471 Mass. 365, 2015 WL 2069689 (2015), the Court agreed with NELF and applied Johnson as the rule of decision in the case. Finding that the discharge did not reach the property interest transferred by the judgment lien, it rejected the plaintiff’s contention that the case turned on an issue of Massachusetts law, i.e., whether state courts should allow the credit union to execute on a judgment supposedly voided by the discharge. Interestingly, the Court went on to declare that other secured creditors, who had been defaulted in this case for failure to answer and were not part of the appeal, were entitled to judgment in their favor because Christakis’s complaint was legally insufficient as to them too for the reasons stated in the opinion.

Commonwealth v. Partners Healthcare System, Inc., et al.

3/12/2015

 
Assisting the Court in Evaluating A Proposed Consent Judgment Addressing Competition in the Business of Healthcare Services


In 2014 the Attorney General of Massachusetts invoked the rarely used anticompetitive branch of the state’s Consumer Protection Act, G.L. chapter 93A, to bring an action against Partners Healthcare System, Inc., a not-for-profit corporation that is the largest healthcare provider in the Commonwealth.  The Attorney General sought to block Partners’ acquisition of three hospitals outside of Boston, principally alleging that the acquisitions would have a substantial anticompetitive effect on the business of healthcare in the relevant state market and would therefore harm the public interest.  After intense negotiations, Partners and the Attorney General agreed to entry of a consent judgment that would permit the acquisitions to take place, but would subject Partners’ operations to a series of restrictions intended to lessen any anticompetitive effect of the acquisitions. 

When the trial judge then solicited comments from the public at large concerning the proposed consent judgment, NELF, in a classic instance of playing its role as amicus curiae in the public interest, responded by filing with the court a letter in which it discussed the legal standard by which the court should evaluate the agreement struck by the parties.  Having reviewed the submissions of the Attorney General and Partners on the question of the legal standard to be used, and after careful independent review of the relevant legal authorities, NELF opined to the court that the Attorney General and Partners had accurately stated consensus legal principles, drawn from a variety of federal and state antitrust cases, that have guided other courts in a range of similar situations and that ought to guide this court as well.  NELF summarized the court’s inquiry into two areas.  First, there were core judicial concerns, including whether the consent judgment was the product of genuine adversarial negotiations, whether the terms reasonably relate to issues over which the court has jurisdiction, whether the terms of any possible future enforcement envisioned under the consent judgment are sufficiently clear, and whether enforcement would be adequate and manageable.  Second, there were concerns relating to the public interest.  Here, the court should satisfy itself that the judgment does not clearly violate any well-established public policy, taking due account of the Attorney General’s unique discretionary powers in protecting the public interest through the prosecution and settlement of law suits (a discretion recently reaffirmed by the Legislature specifically as to healthcare providers and anticompetitive conduct under G.L. c. 93A).  One point that NELF thought especially important to emphasize was that the proposed consent judgment did not rest on either a finding or an admission of liability and therefore “the instrument must be construed as it is written, and not as it might have been written had the plaintiff established his factual claims and legal theories in litigation” (quoting U.S. v. Armour & Co., 402 U.S. 673, 682, 91 S.Ct. 1752, 1757 (1971)).

In February 2015, the judge declined to approve entry of the consent judgment, finding that its substantive terms failed to address adequately the likely anticompetitive effects of the acquisitions and finding, also, that the terms of the settlement were not sufficiently clear as to render possible future enforcement reasonably manageable by the court.

Genereux v. Raytheon Company

10/30/2014

 
Fighting to Maintain the Massachusetts Supreme Judicial Court’s Requirements for Medical Monitoring

In this case some former employees of Raytheon and their family members sought to impose on the company the costs of their being monitored for possible future chronic beryllium disease. The plaintiffs claim that the employee plaintiffs were exposed to beryllium at a Raytheon plant and that their family members were exposed to it secondhand, on the persons of the employees.

In Donovan v. Philip Morris USA, Inc., 455 Mass. 215 (2009) (“Donovan I”), the Supreme Judicial Court held that when a defendant negligently exposes a plaintiff to a substance capable of causing a disease, the plaintiff may have a cause of action in tort even though he does not suffer from the disease. Under Donovan I, the plaintiff’s relief would be that the defendant must bear the medical costs of monitoring the plaintiff for signs of the disease’s possible future advent. But before a defendant can be held liable for these costs, the plaintiff must prove that he presently exhibits at least subclinical, or subcellular changes that serve as medical “warning signs” of a substantially increased risk of developing disease in the future. A plaintiff must be able to prove the existence of these changes, in order to satisfy the tort element of actual injury.

On June 23, 2013, U.S. District Court Judge Mark Wolf granted Raytheon summary judgment, ruling that the plaintiffs could not come forth with admissible evidence of the required subcellular changes (i.e., for each of them, two positive tests for beryllium sensitivity, a “warning sign” of possible future beryllium disease). The plaintiffs appealed to the First Circuit, arguing that the trial court misunderstood Donovan and the relevant medical science.

NELF, together with Associated Industries of Massachusetts, filed an amicus brief in support of Raytheon. In it NELF explained that the plaintiffs’ case depends on weakening and obfuscating, in a variety of ways, the standard set out in Donovan I. Their claim requires proof of a present, actual physical “impact,” which in this case would mean that they each have suffered subcellular changes connected to beryllium sensitivity, the very thing the plaintiffs cannot show. NELF then explained how, under the erroneous standard advanced by the plaintiffs, a mere risk of a risk of future disease would give rise to a Donovan claim. NELF rebutted in detail the use the plaintiffs make of Donovan I’s successor case, Donovan v. Philip Morris USA, Inc., 268 F.R.D. 1, 16 (D. Mass. 2010) (“Donovan II”), showing, for example, that the Donovan requirements are not limited to tobacco class actions and that the plaintiffs hold numerous erroneous views of the facts of Donovan II. Finally, NELF explained that amendment of their complaint, in order to seek refuge for their claims under an issue of law left undecided in Donovan I, should not be allowed because it would be futile.

In its June 10, 2014 decision, the Court upheld summary judgment, chastising the plaintiffs for trying to alter their appeal to encompass the issue left undecided in Donovan I.

Glovsky v. Roche Bros. Supermarkets, Inc. 

6/4/2014

 
Defending the Right of Private Property Owners to Forbid Political Activity on their Premises


In this case, the plaintiff, Steven M. Glovsky, an attorney, while seeking to run for election to the Massachusetts Governor’s Council in 2012, sought permission to solicit nominating signatures at a Roche Brother’s supermarket situated on a private 5-acre lot in Westwood, Massachusetts. The store, which has a policy against such solicitations, denied him permission. Glovsky later brought this pro se suit, alleging that Roche Brothers had violated his constitutional rights. He cites the Massachusetts Supreme Judicial Court’s decision Batchelder v. Allied Stores Int’l, Inc., 388 Mass. 83 (1983). In Batchelder the SJC held that the owners of the huge, 84-acre Northshore Mall had violated Batchelder’s rights under Article 9 (freedom and equality of elections) of the Massachusetts Declaration of Rights, when they prevented him from using certain common areas of the mall as a place to collect signatures to get himself put on the ballot for legislative office.

NELF, together with six co-amici, filed an amicus brief in support of Roche Brothers, arguing that the narrow holding in Batchelder does not apply to the modest property at issue in this case and its small, purely utilitarian common area (the parking lot and front entry way of the supermarket). NELF pointed out that crucial to the Court’s decision in Batchelder was its factual finding that large shopping malls, with their spacious common areas and numerous amenities intended to induce people to linger and congregate, sometimes may assume some of the functions of a traditional public downtown and therefore be deemed dedicated to the public as a practical matter. Nothing could be further from the facts of this case, where the property bears no resemblance to a “downtown,” lacks the scale of a place intended to draw the public to congregate and socialize, and possesses a common area that is a small utilitarian space completely devoted to facilitating shopping.

Especially concerning to NELF is Glovsky’s request that the Court extent Batchelder to any commercial property that is, allegedly, the “best” place to gather signatures. NELF argues that such a view is inconsistent with the text and reasoning of Batchelder and would lead to absurd or unworkable results. NELF also rebutted two false distinctions made by Glovsky in his attempt to deflect the fatal reasoning of Batchelder from his own case. NELF argued that his distinction between inviting the public into a commercial establishment and allowing the public there is completely spurious under Massachusetts tort law. NELF also argued that the Batchelder court did not apply a more accommodating standard than that applied in the seminal precedent Robins v. Pruneyard Shopping Center, 592 P.2d 341 (Cal. 1979); Glovsky’s distinction between a free speech issue in that case and a free elections issue in Batchelder is belied by the undisputed facts of both cases.


Scituate Zoning Board of Appeals v. Herring Brook Meadow, LLC and Housing Appeals Committee 

6/4/2014

 
Opposing a Local Zoning Board’s Attempt to Block a Comprehensive Permit for Affordable Housing Based on a Misinterpretation of the Rules Governing Appeals to the Housing Appeals Committee

This case concerns a developer’s attempt to secure a comprehensive permit under c. 40B for a multi-unit dwelling in Scituate that would include affordable housing units. After protracted hearings, the local zoning board (“board”) denied a permit on the ground that a very small patch of the project site was defined as wetlands under the town’s regulations, and that local concerns therefore outweighed the regional need for affordable housing. The developer appealed to the Housing Appeals Committee (“HAC”), where the case was largely fought out over highly factual issues. The developer won the appeal and obtained its permit, but the board appealed the HAC’s decision to the Land Court, where the developer won again.

The board has now appealed to the Appeals Court and makes two legal arguments. Of these, NELF’s amicus brief concentrates on refuting the board’s view of what a developer must do to make out a prima facie case in an appeal to the HAC. The applicable regulation, 760 C.M.R. 56.07(2)(a)(2), states that an appellant establishes a prima facie case by proving “that its proposal complies [with] the federal or state statutes or regulations, or with generally recognized standards as to matters of health, safety, the environment, design, open space, or other matters of Local Concern.” The board contends that developers must prove compliance with restrictive local regulations as part of the prima facie case, not just with State and Federal law dealing with the same local concerns. NELF argues that, in making this argument, the board has misread the plain language of the regulation. Compliance with local regulations is not mentioned. In fact, compliance with restrictive local regulations is deliberately omitted from the developer’s prima facie case because the validity of such local concerns is precisely what is put into question by c. 40B as a matter of law. Because there is a history of towns using restrictive local rules as a means to keep affordable housing from being built within in their boundaries, the reasonableness of local rules and the validity of the local concerns they address are matters that must be established by a town as part of its case, before the developer can be required to accommodate the local rules.

The board’s approach would, in effect, present a great obstacle to developers seeking to construct housing that includes affordable units. In its brief, NELF focuses on construing the plain language of the regulation and explaining the public policy rationale for the regulation and why the board’s reading is in sharp conflict with the purposes of c. 40B. NELF expresses its view that the board’s reading, if affirmed, could have a disastrous effect on most developers’ ability to stay in the HAC and get a full review of a permit denial.

In a March 2014 decision, the Appeals Court agreed with NELF that the approach advocated by Scituate was inconsistent with the rationale of the comprehensive permit scheme and the role of the HAC in that scheme.

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