In 1991, Kuwaiti Danish Computer Company (“KDCC”), on behalf of the University of Kuwait, negotiated the purchase of Digital equipment with an educational discount from a Digital sales office in the Washington, D.C., area. The deal ultimately fell apart when Digital refused to sell the equipment to KDCC for the educational discount price, which Digital only gave to educational institutions in the United States. Most of the negotiations between KDCC and Digital were with the Washington, D.C., sales office and all the relevant meetings took place there. KDCC made several telephone calls to Massachusetts in an attempt to reverse the decision, and the educational discount policies were set in Massachusetts. The business-to-business section of the Massachusetts Consumer Protection Statute, Mass. Gen. L. c. 93A, § 11, contains an explicit requirement that conduct subject to the Act take place “primarily and substantially” in Massachusetts. The reason for such provision was, in part, to assure corporations that they would not face multiple liability in several states for the same conduct.
In this case, the trial court explicitly found that Digital’s negotiation of the contract occurred primarily and substantially outside Massachusetts, but that conduct setting the policy and the decision to enforce the policy occurred primarily in Massachusetts. The trial court acknowledged that its finding of “primary and substantial” ties with Massachusetts on these facts was “not without some question . . . .” Nevertheless, the trial court found “in the absence of more fullsome [sic] appellate direction” that Digital’s conduct in this case occurred “primarily and substantially” in Massachusetts. NELF filed a brief arguing that the trial court decision in this case verges on the proposition that a Massachusetts corporation is subject to c. 93A if policy decisions made at corporate headquarters have an adverse impact on anyone, anywhere. NELF argued that the court should follow the lead of a federal court that has construed this same provision, and hold that corporations should not automatically be subject to c. 93A simply because policies related to a claim were established in Massachusetts. In a decision in January 2003, the SJC reversed the decision below, agreeing with NELF that the existence of neutral corporate policies adopted in a Massachusetts corporate headquarters does not constitute conduct “primarily and substantially” in Massachusetts when the parties’ principal dealings with each other occurred outside the Commonwealth.