Arguing that, when an Employee Prevails in An Action Brought for Wages Under G.L. c. 149, § 150, for Unpaid Wages, and Receives the “Liquidated” Treble Damages Mandated By the Statute, Prejudgment Interest is Not Available on Any Portion of the Recovery.
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In 2008, the Massachusetts legislature amended G.L. c. 149, § 150, which governs the right to bring suit for violation of a number of state wage laws.  As relevant here, previous to the amendment, § 150 had permitted an award of treble damages to be made to a prevailing plaintiff, but the Supreme Judicial Court had held that such an award was discretionary and that, because the enhanced damages were punitive in nature, they required the plaintiff to prove the employer’s bad faith, willfulness, or other culpable conduct, in order to avoid due process problems connected with the imposition of punitive damages.  The 2008 amendment worked a major change in § 150—it made the treble damages unconditionally mandatory so that plaintiffs no longer would have the burden of proving bad faith.  Perhaps to get around the due process problem such mandatory treble damages might create, in the 2008 amendment the legislature expressly characterized the new mandatory treble damages as “liquidated,” hence compensatory and not punitive.
The present case raised the question of what effect, if any, the amendment has on a plaintiff’s right to prejudgment interest, which is the primary means of compensating a plaintiff for the loss of use of money or its unlawful detention during the time before judgment enters.  In other words, does the declared “liquidated” character of the new treble damages mean (as it ordinarily would in other legal contexts) that the damages are intended to compensate comprehensively for all injuries, including those that may be difficult to prove or quantify, such as those arising out of loss of use of money or its wrongful detention?
The plaintiffs here had settled their wage claims with the employer, with the exception of a dispute over their alleged right to prejudgment interest under one of the state’s general prejudgment interest statutes.  They construed literally the apparently mandatory language of the prejudgment interest statute.  The company’s view, by contrast, was that § 150’s treble liquidated damages function as any liquidated damages provision would, i.e., they displace all other forms of compensatory damages, including prejudgment interest.  At the parties’ request, the U.S. District Court certified to the Massachusetts Supreme Judicial Court the question of whether plaintiffs who are awarded liquidated treble damages under § 150 retain a right to separate prejudgment interest in addition.
NELF filed an amicus brief in support of the employer, asking the court to answer no to the question.  In the first half of its brief, after recounting the history leading up to the amendment to § 150, NELF focused on the term “liquidated,” noting that it sharply alters the nature of the treble damages from punitive, with all the latter’s attending legal due process complications, to simply compensatory.  In particular, NELF observed that the SJC itself has stated that courts owe deference to the legislature’s legal characterizations, like “liquidated,” when the constitutionality of a law may be involved.  NELF cited also the U.S. Supreme Court’s decision in Brooklyn Sav. Bank v. O’Neil, 324 U.S. 697 (1945).  There, against the background of a mandatory state prejudgment interest statute, much like the one in this case, the court ruled that the liquidated multiple damages awarded under the federal Fair Labor Standard Act precluded application of the state prejudgment interest statutes because liquidated damages compensate for all harms, including those usually addressed by prejudgment interest. 
In the second half of its brief, NELF critiqued the plaintiffs arguments directly.  First, NELF cited SJC cases holding that the mandatory language of the prejudgment interest statutes must not be taken literally when to do so would defeat the purpose of the statutes and over-compensate a party by awarding duplicative damages.  For this reason, NELF rejected the plaintiffs’ contention that there is a “clash” between the mandatory prejudgment interest statutes and mandatory language of § 150.  NELF also rebutted the contention that § 150 plaintiffs would be under-compensated if they do not receive prejudgment interest.  NELF pointed out that all liquidated damages inherently are an approximation of full compensation, and NELF urged the Court not to modify by judicial decision the general “treble liquidated damages” formula inserted into § 150 by the legislature in its sound discretion.  Moreover, NELF argued, the Court should not violate its traditional policy of not taking a “second look” at liquidated damages, in order to see, after the fact, whether they provide full compensation.  NELF concluded by pointing out the deficiencies in the plaintiffs’ understanding of the 1945 Brooklyn decision and by explaining to the Court the difficulties that would arise if it accepted the plaintiffs’ last-ditch suggestion to treat the “liquidated” treble damages as punitive.
In its decisions, issued in June, 2017, the Supreme Judicial Court disagreed with NELF and answered yes to the certified question.  The court expressed doubt that the legislature would have intended some plaintiffs to receive smaller damages after the amendment than they would have received before the amendment, as might happen in certain circumstances if prejudgment interest were no longer to be available.  In effect, the court took a “second look” at the statutory damages and second-guessed the sufficiency of the liquidated formula decreed by the legislature.

Rejecting the Massachusetts Commissioner of Revenue’s Position That, Under the Massachusetts Sales Tax Statutes, a Purchaser of Goods Who Believes She Has Been Erroneously Charged A Sales Tax May Sue a Vendor For Breach of Contract To Recover The Amount Paid
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This case arises from litigation related to the long-running dispute between Dell (the plaintiff in this case is a Dell subsidiary) and Massachusetts purchasers of Dell computers who allege allege that Dell improperly charged them a Massachusetts sales tax on service contracts that they purchased with their Dell computers.  Initially, the purchasers attempted to bring a Mass. G.L. c. 93A class action in the Massachusetts courts.  NELF was heavily involved in supporting Dell’s eventually successful arguments before the Massachusetts Supreme Judicial Court that  the dispute was subject to the service contracts’ mandatory arbitration provision and class action waiver.  Accordingly, the case was ordered to arbitration on an individual basis, and Dell prevailed before the arbitrator.
 
While the challenge to Dell’s collection of sales taxes was pending in court and, then, in arbitration, Dell, as a protective measure, applied to the Massachusetts Department of Revenue (“DOR”) for an abatement of the disputed sales taxes so that, if it lost on the merits, it would have funds to pay back the sales taxes it had collected. (This was done because, as required under Massachusetts law, Dell had already remitted to the Department of Revenue the disputed sales taxes that it had collected from its purchasers.)  When the DOR denied the abatement request, Dell appealed that decision to the Massachusetts Appellate Tax Board (“ATB”).  While Dell’s appeal was pending before the ATB, one of the plaintiffs in the c. 93A action, Econo-Tennis Management Corporation, d/b/a Dedham Health and Athletic Complex (“Dedham”), successfully intervened in the ATB appeal.  The ATB issued a preliminary decision finding that the sales tax had been wrongly collected by Dell.
 
Dell, having won in the arbitration, moved to dismiss its ATB appeal, with which motion the DOR concurred.  The ATB dismissed the appeal over Dedham’s objection.
 
The central issue before the Massachusetts court in this appeal is whether the ATB was correct in dismissing Dell’s appeals, even though Dedham objected.
 
NELF’s participation was requested because the DOR, in its brief supporting the dismissal of the cases, argued that, even if the ATB appeals were dismissed, Dedham still had a remedy.  The DOR claimed that Dedham had a statutory right to sue Dell for the improper sales tax under a theory of breach of contract.  Dell’s attorneys asked NELF to file an amicus brief disputing the DOR’s position on this issue.
 
In its amicus brief, NELFargued that neither the Massachusetts sales tax statutes nor the common law of agency authorizes a purchaser to sue a vendor  to recover an allegedly erroneous sales tax, which the vendor has collected as an agent of the Commonwealth.  Nowhere does the relevant provision of the sales tax code, G. L. c. 64H, § 3(a),[1] mention or even suggest any right of action by the purchaser against the vendor.  By contrast, the plain language of § 3(a)  protects the rights of the vendor, not the purchaser.  Section 3(a) requires the purchaser to reimburse the vendor for the sales tax that the vendor must pay to the Commonwealth under § 2 of the same statute.  Simply put, the sales tax statute establishes the respective obligations of the vendor and the purchaser in the payment of a sales tax to the Commonwealth.  The statute creates a steady stream of revenue flowing from the purchaser through the vendor to the Commonwealth, and nothing more.
 
Indeed, the SJC recognized in an earlier stage of this very case that the sales tax statute places the vendor in the role of the Commonwealth’s agent or trustee, for the purpose of collecting a sales tax from the purchaser and remitting it to the Commonwealth, as Dell has done here.  See Feeney v. Dell Inc., 454 Mass. 192, 213 (2009) (“[V]endors who, on behalf of the Commonwealth, compute, collect, and file sales tax returns, and remit full sales tax for each customer transaction[,] serve as trustees for the Commonwealth’s retail sales taxes . . . .”) (citation and internal quotation marks omitted).  Moreover, the Department of Revenue in this case expressly instructed Dell that, based on the Department’s own regulation, Dell had the duty to collect the disputed sales tax.
 
Under these circumstances, it is black letter law that Dell, as an agent acting on behalf of the Commonwealth, the known principal, cannot be held liable for any acts performed within the scope of its authority.  This foundational principle of agency law recognizes that Dell acted merely as a conduit between the purchaser and the Commonwealth, for the purpose of delivering the sales tax to the Commonwealth.  Therefore, any dispute over this tax collection is between the Commonwealth (the principal) and the purchaser (the third party). 
 
NELF also argued that adoption of the DOR’s position would contravene the purposes of the tax statutes and would lead to untenable results.  In particular, permitting purchasers to sue vendors every time there is a sales tax dispute would contravene the basic purpose of the sales tax statute, which is to secure a reliable stream of revenue for the Commonwealth.  Recognizing such a right of action would actually encourage vendors to under-collect a sales tax whenever the tax law is unclear (a not infrequent occurrence), to avoid their potential exposure to civil liability.  As a result, the Commonwealth could suffer a decrease in the amount of sales tax collected.  And vendors would be forced to make the impossible choice of incurring either state penalties for under-collection or civil liability for over-collection.  The Legislature could not have intended such absurd and draconian results.
 
In addition, the Commissioner’s position would create the untenable result of allowing purchasers to sue vendors over a sales tax after the expiration of the time period for seeking an abatement of the sales tax.  Specifically, an application for abatement must be made within one to three years of the disputed tax assessment, under G. L. c. 62C, § 37.  Under the Commissioner’s approach, however, a purchaser would have four or six years to sue the vendor over the validity of the same sales tax.  See G. L. c. 106,    § 2-725(1)(four-year statute of limitations for sale of goods); G. L. c. 260, § 2 (six-year statute of limitation for express or implied contract claim).  As a result, a vendor could be exposed to liability over a sales tax long after the vendor’s right to recoup the sales taxes from the Commonwealth has expired.
 
And finally, the Commissioner’s position would allow a court to decide in the first instance whether a tax abatement is due.  This would deprive both DOR and the ATB of their primary jurisdiction to decide such tax issues.


[1] That section of the sales tax statute provides, in relevant part:
 
[R]eimbursement for the [sales] tax hereby imposed [on the vendor under G. L. c. 64H, § 2] shall be paid by the purchaser to the vendor . . . and such tax shall be a debt from the purchaser to the vendor, when so added to the sales price, and shall be recoverable at law in the same manner as other debts.
 
G. L. c. 64H, § 3(a).  

Arguing That Neither An Outside Director of Nor An Investor in a Failed Startup May Be Held Personally Liable for Unpaid Wages and Treble Damages Under the Massachusetts Wage Act
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On September 5, the Supreme Judicial Court heard oral argument in this case, in which NELF filed an amicus brief in support of the defendants, a venture capitalist and his manager who invested considerable funds and efforts in a failed biotech start-up limited liability company.  At issue is whether such directors and outside investors of a company doing business in Massachusetts can be held personally liable for mandatory treble damages under the Massachusetts Wage Act, G. L. c. 149, § 148, for the company’s nonpayment of an employee’s wages.  The Wage Act imposes liability on both the employer and “[t]he president and treasurer of a corporation and any officers or agents having the management of such corporation . . . .”  G. L. c. 149, § 148 (emphasis added).  And this Court has interpreted an “agent having the management of such corporation” to mean a high-ranking manager of the employer who has authority over the employer’s payment of wages.  See Cook v. Patient Edu, LLC, 465 Mass. 548, 549 (2013) (Wage Act applies to “a manager who controls, directs, and participates to a substantial degree in formulating and determining the financial policy of a business entity . . . .”)  (citation and internal quotation marks omitted).
 
The plaintiff in this case, Dr. Andrew Segal, was the president, CEO, and the sole officer of a biotech start-up company called Genitrix, LLC, a Delaware limited liability corporation doing business in Massachusetts.  Genitrix’s mission was to develop a cancer-fighting molecule that would train the body’s immune system to attack cancer cells.  Dr. Segal prevailed in a jury trial in his claim to hold the defendants, H. Fisk Johnson, III and Stephen Rose, personally liable for Genitrix’s nonpayment of his wages.  Neither defendant was ever the president, treasurer, or an officer of Genitrix.  And so the issue is whether either defendant was an “agent having the management of” Genitrix under the Wage Act and Cook, when Genitrix failed to pay Segal his salary.
 
NELF argued that the Wage Act does not, on its face, apply to the directors of a corporation, or to individuals occupying comparable positions in any other entity covered by the Act.  This is because the Wage Act omits directors from its list of those corporate actors who are subject to personal liability--i.e., “[t]he president and treasurer of a corporation and any officers or agents having the management of such corporation . . . .”  G. L. c. 149, § 148.  Nor has the Legislature intended the word “agents” to include directors.  To the contrary, the Legislature has recognized throughout the General Laws that directors are not agents of the corporation.  In particular, the Legislature has named directors separately from agents in several other statutes that address the duties and powers of corporate actors.  In light of the Legislature’s repeated distinction between directors and agents in those other statutes, the word “agents” in the Wage Act should not be interpreted to include directors. 
 
NELF argued further that the Legislature’s frequent distinction between directors and agents is consistent with the common law of agency, under which a director is not an agent of the corporation, for two simple reasons.  First, to be an agent, an individual must be subject to the principal’s control.  But a director is not subject to the control of another (other than her placement in office by the shareholders).  Once in office, a director is free to exercise her own business judgment in overseeing the corporation’s affairs. And second, an agent must be able to act on behalf and for the benefit of the principal.  But a director has no power to act on her own for the corporation.  Instead, she acts only as one of a board of directors that act as a body to supervise the activities of the corporation.
 
NELF also argued that investors in a company, and the individuals who manage their investments, should be allowed to take an active role in protecting those investments without risking the loss of their separate legal identities and becoming “agents” of that company under the Wage Act.  After all, the Wage Act limits personal liability to “agents with the management of such corporation,” i.e., high-ranking managers of the employer who are in charge of the employer’s financial policy.  Cook, 465 Mass. at 549.  But the owners and managers of another company (such as the venture capital firm in this case or, for that matter, a parent corporation) that invests in the employer company are not agents of the employer.  If they are agents at all, those individuals are agents of a separate legal entity that invests in the employer.  Consistent with this foundational principle of corporate separateness, then, investors and their managers should be allowed to take an active role in protecting those investments, such as by specifying the purpose of capital contributions and monitoring the company’s operations, without losing their separate legal identities and becoming agents of the employer under the Wage Act.  To overcome this core principle of corporate separateness, the employee would have to prove extraordinary circumstances to justify disregarding the corporate form and treating those individuals as if they were agents of the employer under the Wage Act.
 
Finally, NELF argued that an adverse decision could chill investment and business growth in Massachusetts, because it would expose venture capitalists and their managers to the additional risk of personal liability for treble damages under the Wage Act.  This could, in turn, undermine the Commonwealth’s economy and the public interest.  Indeed, Massachusetts’ innovative economy owes its success, at least in part, to venture capital.  Without the necessary financing from risk-taking entrepreneurs and the committed efforts of their managers, many start-up businesses with innovative and even life-saving goals (such as the biotech start-up company in this case) would not be able to see the light of day.  After all, Genitrix’s mission was to develop a cancer-fighting molecule, and the facts of this case illustrate the crucial role that venture capital can play in financing the early stages of such a business.
 
However, this case also illustrates that investing in a start-up company is an inherently risky prospect, with no guarantee of success.  Exposing investors to more risk, by subjecting them to potential personal liability under the Wage Act, could deter them from investing capital in already risky start-up companies in Massachusetts.  In the end, society as a whole could be deprived of many potentially innovative and even life-saving products and services because they lacked the initial capital investment to become a reality.  The Legislature could not have intended such socially undesirable results under the Wage Act.  

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

Whether an Agreement to Submit Valuation of Stock to the Binding Decision of Arbitrators is an Arbitration Agreement Enforceable Under the Massachusetts Arbitration Act
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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. 

Defending the Immunity from Suit, under the Workers Compensation Act, of an Insured Alternate Employer
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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.
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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.

Arguing that, Without an Express Legislative Mandate, the Massachusetts Department of Transportation Does Not Have the Authority to Regulate Outdoor Advertising Throughout the Commonwealth.
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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.

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). 

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.

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.