Massachusetts Law Review

Modern Reflections on Charitable Immunity

Kenneth R. Kohlberg practices professional liability, health care and employment litigation with McCarthy, Bouley & Barry in Cambridge.
A public charity, whether incorporated or not, is but a trustee, and is bound to apply its funds in furtherance of the charity, and not otherwise. This doctrine is hoary with antiquity, and prevails alike in this country and in England, where it originated as early as the reign of Edward V, and it was announced in the year book of that period.1

I. Introduction

To be sure, the doctrine of charitable immunity “prevails” less today than it did in the age of Edward V2 or even 100 years ago.3 Indeed, in more modern times the doctrine has been the subject of considerable debate.4 But as recent decisions by the Supreme Judicial Court illustrate, litigants in Massachusetts should not underestimate the force of the charitable immunity statute, Massachusetts General Laws, chapter 231, section 85K (“Section 85K”).5

In essence, Section 85K imposes a $20,000 limit on damages that can be awarded against a “charitable corporation”6 for any cause of action “based on tort.”7 Proponents of the statute maintain that this “cap” on damages is necessary to preserve the assets of charitable institutions, whereas critics argue that Section 85K fails to balance the interests of innocent victims against those of negligent actors.8 Amidst this broad theoretical controversy, Section 85K continues to produce serious practical consequences.9

Apart from its historical origin, the primary rationale for charitable immunity is that, without it, the financial strains of liability would reduce the capacity of charitable corporations to provide valuable goods and services to the community.10 In turn, these “public goods” would be undersupplied when left to the commercial sector, with government having to make up the shortfall.11 Thus, by furnishing societal benefits, charitable institutions relieve government of the burden and costs it would otherwise confront if responsibility for public goods were left primarily to for-profit businesses.12

This article provides a summary of the recent Supreme Judicial Court decisions highlighting contentious issues of the day in the area of charitable immunity. The article suggests that, in light of modern case law and the court’s faithful adherence to the “plain text” of Section 85K, charitable immunity claims will continue to play an important role in civil litigation in the commonwealth. In setting forth and assessing proposals and considerations for the legislature, the article concludes that any new legislation involving the charitable immunity statute should, in addition to protecting charities, also ensure that charitable corporations fulfill their public responsibilities and utilize their funds in a manner that instills public trust and confidence in charitable institutions.

II. The “Public Good”

The plaintiff in Conners v. Northeast Hospital Corp. was injured in a slip-and-fall accident in the parking lot of the Beverly Hospital campus.13 The defendant-corporation (“Northeast”) owned and maintained the parking lot, together with a complex of buildings on the campus.14 A jury found Northeast negligent in failing to remove snow from the parking lot and awarded the plaintiff $183,000 in damages.15

Finding that Northeast was a charitable corporation under Section 85K, however, the trial court reduced the damages to $20,000.16 On appeal, the plaintiff argued that Northeast was not truly a charitable corporation, that its snow removal activities were not carried on to accomplish a charitable purpose, and that its snow removal activities were “primarily commercial” in nature.17 On direct appellate review, the Supreme Judicial Court rejected the plaintiff’s arguments and affirmed the judgment of the trial court.18

The evidence in Conners showed that Northeast was incorporated under a precursor to Massachusetts General Laws, chapter 180, the statute currently governing charitable corporations.19 In its articles of organization, the “purpose” of Northeast was identified as “the care and treatment of the sick, especially the worthy poor of the Town of Beverly, and the other general purposes of a hospital.”20 As part of its assets, Northeast owned the hospital campus, including the parking lot and land beneath a condominium complex that housed physician practice groups.21

In support of her contention that Northeast was not truly a charitable corporation, the plaintiff offered evidence to suggest that Northeast was a large enterprise integrated into a corporate structure that included several for-profit businesses.22 In addition, the facts showed that Northeast generated substantial revenue from paying or fully insured patients.23 Indeed, the plaintiff proved that Northeast received only a small amount of income from charitable sources and that it actually provided limited amounts of free care to the public.24

Despite these facts, the Supreme Judicial Court decided that the plaintiff had overlooked the “fundamental distinction of purpose” that separates charitable from for-profit corporations.25 The court explained that a corporation is considered charitable when “the dominant purpose of its work is for the public good.”26 By contrast, a corporation is not charitable when its work is intended to benefit “its members or a limited class of persons.”27 The “critical inquiry,” the court ruled, is “whether the purpose of the organization is to benefit a select few, rather than the wider community.”28

In this context, the court stated that Northeast’s purpose as identified in its articles of organization — “the care and treatment of the sick” — has “long been recognized as charitable.”29 It noted that “the promotion of health, whether through the provision of health care or through medical education and research,” is generally considered a charitable endeavor.30 Accordingly, the court found that Northeast’s articles of organization constituted “prima facie evidence” of its charitable character.31

Apart from the prima facie evidence, the facts in Conners further revealed that no shareholders owned or controlled Northeast’s income and none of its officers or members benefited personally from its charitable status.32 In addition, Northeast admitted patients at the hospital even if they were unable to pay, provided care and treatment to patients whose insurance did not provide full reimbursement for expenses, and was engaged in public health related activities in the broader community.33 For these reasons, the court held that Northeast fell “squarely within” the definition of a charitable corporation under Section 85K.34

The court further determined that Northeast’s snow removal activities served to accomplish its charitable purpose.35 In this regard, the court declared that the removal of snow from the parking lot “facilitated the care and treatment of the sick” by providing a convenient means of access for patients.36 Moreover, the location of the parking lot on the hospital campus “enhanced the medical care and treatment [of] patients,” who benefited from having the physician practice groups near the hospital.37

Rejecting the plaintiff’s final argument that the snow removal activities were “primarily commercial” in nature, the court explained that this language applies only when the activity in question generates revenue for the corporation,38 which Northeast’s snow removal activities did not.39 Also, even if the snow removal activities had generated revenue, the “critical question” would still be whether the activities accomplished Northeast’s charitable purpose, which the court had already answered in the affirmative.40

III. “No Matter How Compelling The Circumstances”

The plaintiff in Keene v. Brigham & Women’s Hospital, Inc. was born at the hospital at 1:07 a.m. on May 15, 1986.41 Shortly after birth, he experienced respiratory distress and was sent from the nursery to the neonatal intensive care unit (“NICU”).42 Blood tests were performed at 6:25 a.m. and the plaintiff was then discharged from the NICU back to the nursery, with an ominous note stating “watch for [signs and symptoms] of sepsis . . . hold antibiotics pending CBC [complete blood count] results and cultures.”43

It is not known who received the CBC results and cultures or what follow-up care was provided to the plaintiff in the nursery, because the medical records of the hours 6:30 a.m. on May 15 through 12:00 a.m. on May 16 were lost and never recovered.44 The plaintiff’s medical records immediately following that period, however, indicate that by 2:30 a.m. on May 16 the plaintiff was suffering from septic shock and seizures.45 Subsequent testing revealed that the plaintiff had in fact contracted sepsis and meningitis, resulting in profound brain damage.46

In its answer to the plaintiff’s malpractice complaint, the hospital asserted the charitable cap as an affirmative defense.47 During discovery, the hospital acknowledged that it could not find the missing records, that it did not know the names of the individuals who had treated the plaintiff during the missing records period, and that it had not attempted to ascertain the names of such individuals.48 For these reasons, the plaintiff moved for default judgment on liability and asked the trial court to “strike” the hospital’s charitable cap defense.49

After an evidentiary hearing, the trial court allowed the plaintiff’s motion for default judgment and struck the hospital’s charitable cap defense.50 The court reasoned that the hospital’s failure to preserve the missing records had deprived the plaintiff of the opportunity to recover damages from the individuals who were at fault and whose liability would not be limited by the charitable cap.51 The trial court awarded damages to the plaintiff in excess of $4 million52 and the Appeals Court subsequently affirmed the judgment.53

On further appellate review, the Supreme Judicial Court determined initially that the case should have been decided under the doctrine of “spoliation of evidence,” which permits courts to impose sanctions for the loss or destruction of evidence.54 The spoliation doctrine is based on the notion that a party who has lost or destroyed evidence should be held accountable for the unfair prejudice that results.55 Applying this doctrine, the court found that by failing to preserve the missing records, the hospital violated its duty to preserve evidence and was therefore “accountable for the plaintiff’s inability to prove his malpractice claim.”56

Affirming the default judgment, the Supreme Judicial Court reasoned that the hospital’s failure to preserve the records “itself gives rise to liability as a form of medical malpractice” under the medical records statute.57 The court found that the missing records formed “the critical linchpin of the plaintiff’s case” and contained “the only documentation of the critical time period” during which the alleged malpractice occurred.58 Thus, on this “unique and extraordinary record,” the court held that the trial court had acted within its discretion in entering a default judgment against the hospital.59

With respect to charitable immunity, however, the Supreme Judicial Court held that the trial court had exceeded its authority in striking the hospital’s charitable cap defense.60 On this issue, the court reasoned that the “plain text” of Section 85K makes the charitable cap “mandatory” and provides no basis for striking the cap as a sanction for the loss of evidence.61 Since the legislature in enacting Section 85K intended to protect the funds of charitable institutions “so they may be devoted to charitable purposes,” the court held that the charitable cap shall apply to limit damages “no matter how compelling the circumstances of the injured party.”62

IV. A Case For The Legislature?

In reaching its decision in Conners, the Supreme Judicial Court recounted the legislative history of Section 85K, including Governor Sargent’s view that charitable corporations “by their nature and the quality and character of their charitable endeavor” should be “treated differently” with regard to their legal liability.63 The court noted that, in enacting Section 85K, the legislature had pursued “the legitimate objective of preserving charitable assets.”64 Accordingly, Section 85K was intended to strike an appropriate balance between “the desirability of protection for [charitable] corporations . . . against the interest of the [injured] person.”65

In dictum, the court recognized in Conners the “vigorous and ongoing debate provoked by the dramatically changing landscape of the health care industry regarding the charitable treatment of health care institutions.”66 This controversy, the court noted, focuses primarily on the validity of tax-exempt status of such institutions.67 The court observed, however, that the legislature is presumably aware of this debate, but has nevertheless taken no action with respect to the charitable immunity statute.68 Since the “promotion of health remains, as it long has, a charitable purpose,” the court stated that “[t]he argument that large nonprofit health organizations, funded in substantial part by insurance, government and private, should no longer benefit from tax exemption or charitable immunity is more appropriately addressed to the Legislature.”69

In both his concurring opinion in Conners70 and his dissent in Keene,71 Justice Roderick L. Ireland maintained that Section 85K does not “fairly” balance the interests of charitable corporations against those of injured persons.72 Justice Ireland opined that the statute is “monetarily outdated” and that it fails to recognize the evolving roles of traditionally charitable institutions.73 Accordingly, Justice Ireland urged the legislature to act “in order that Massachusetts align with the vast majority of States in recognizing that the charitable immunity cap has become obsolete, unfair, and expanded beyond its original intent.”74

Regardless of these pleas by Justice Ireland, the trial court in Ayash v. Dana-Farber Cancer Institute applied the charitable cap to limit damages awarded against a hospital under the anti-discrimination statute, Massachusetts General Laws, chapter 151B (“chapter 151B”).75 Recognizing that, under Conners and Keene, Section 85K is “to be interpreted broadly, and not narrowly,” the trial court in Ayash determined that chapter 151B claims are “tort-like” in nature and therefore within the reach of the charitable immunity statute.76 “Otherwise,” the trial judge reasoned, “the charitable entity’s ability to fulfill its charitable purpose would be chipped away by damage judgments.”77

On direct appellate review, however, the Supreme Judicial Court reversed and held that Section 85K does not apply to limit damages awarded under chapter 151B.78 In reaching its decision, the court reasoned that since chapter 151B created statutory rights “that did not exist under the common law,” such claims cannot be considered “torts” for purposes of Section 85K.79 Perhaps hearkening back to the remarks of Justice Ireland, the court in Ayash held that a “fair reading” of both statutes does not support the extension of the charitable cap to claims arising under chapter 151B.80

As the language of the Ayash decision reflects, the Supreme Judicial Court could have reached the opposite conclusion in accordance with applicable law. Indeed, the court freely acknowledged its own line of cases in which it had “referred frequently to tort-like aspects” of chapter 151B claims.81 Moreover, the court’s holding that the charitable cap “does not apply to most statutory violations, unless there is a ‘tort’ within the meaning of the statute,” leaves open critical issues with respect to the future scope of the charitable immunity statute.82 For example, prior to the Ayash decision, the trial court in Wang v. Leominster Hospital83 had decided that the charitable cap applies to a statutory claim arising under the federal Emergency Medical Treatment and Active Labor Act of 1986 (“EMTALA”).84 In Wang, the trial court recognized that EMTALA, like chapter 151B, created “a new cause of action” that did not exist under the common law.85 Contrary to the conclusion reached by the Supreme Judicial Court in Ayash, however, the judge held in Wang that the charitable cap does extend to statutory claims arising under EMTALA.86 It is questionable whether the judge would have reached the same conclusion, had the case been heard in the wake of Ayash.

V. A Look Toward The Future

At first blush, the recent Supreme Judicial Court decisions interpreting the charitable immunity statute provide ample direction to lower courts in the commonwealth. In accordance with the Conners and Keene decisions, courts must apply the cap and limit tort-based damages to $20,000, regardless of the underlying facts and circumstances of the particular case. Moreover, these cases mandate that future challenges to the charitable cap be addressed to the legislature, not to the courts.

By limiting the reach of Section 85K to what the court deems a “fair reading,”87 however, the Ayash decision may actually incite future litigation over the scope of the charitable cap. Indeed, the court’s recognition that the cap may apply to statutory violations other than those arising under chapter 151B, and perhaps to other unspecified “tort-like” causes of action, may serve to embolden litigants to assert new types of charitable immunity claims. In any event, the recent Supreme Judicial Court jurisprudence has rekindled old debates and spurred new proposals regarding the future of charitable immunity.

The simplest approach that has been suggested is for the legislature to amend the statute and raise the amount of the charitable cap in order to provide more meaningful recovery for injured persons.88 Indeed, the $20,000 limit in Massachusetts appears to constitute the lowest cap among those states which still maintain charitable immunity statutes.89 Although two bills were filed during the 2003-2004 legislative session proposing to raise the cap for hospitals from $20,000 to $250,000, neither bill was reported out of committee.90

A more complex proposal involves the creation of new legislation which would feature “a meaningful analysis of what constitutes a charity” for purposes of the statute.91 This approach is premised upon the argument set forth in Conners that some charitable corporations are substantial business entities that may not require statutory protection from tort damages.92 As proponents of this approach point out, Section 85K does not distinguish between smaller organizations, such as community hospitals which often cannot obtain robust insurance policies, and larger institutions that possess considerable assets.93

The concept of a new cap that would apply only to “real charities” that truly serve the public interest, however, raises critical issues that have received widespread media attention.94 For example, regulators and lawmakers have recently begun to scrutinize the true motivations of corporate entities that claim to possess “charitable aims.”95 At the same time, leaders of the nation’s charitable institutions, “singed by news reports of self-dealing and extravagant spending,” have initiated sweeping reforms designed to force greater accountability and boost penalties for the misuse of charitable funds.96

VI. Conclusion

Recent decisions by the Supreme Judicial Court indicate that charitable immunity claims will continue to play an important role in litigation in the commonwealth, particularly in cases involving healthcare institutions which work in partnership with government to promote public health.97 The court’s intention to apply the cap regardless of individual hardships, coupled with its recognition that Section 85K may apply to statutory and unspecified “tort-like” causes of action, may give rise to new forms of charitable immunity claims. Thus, like other Massachusetts statutes involving privileges and immunities, the charitable immunity statute presents challenging issues for the legislature.98

In evaluating proposed amendments to the statute, the legislature must consider the issues in light of the evolving nature of charitable corporations. Any new legislation should serve the dual purposes of protecting charities, and ensuring that charitable corporations fulfill their public responsibilities in the proper charitable use of their funds. At the same time, however, lawmakers should take care not to exclude certain entities merely because of their size or business structure.

Indeed, since larger entities may be capable of providing more goods and services to the public than smaller entities, they may actually be better equipped to achieve the policy objective of relieving government of that burden and expense. Given the range of jury verdicts today, even large entities could be seriously hampered in their charitable efforts — and discouraged from future charitable endeavors — if faced with unlimited tort awards. In the end, regulators and lawmakers must be vigilant to prevent potential abuses by charities and make certain that charitable assets are utilized in a manner that is consistent with the true mission of public charities.

1. Fordyce v. Woman’s Christian Nat’l Library Ass’n 79 Ark. 550, 563, 96 S.W. 155, 160 (1906) (citing Fire Ins. Patrol v. Boyd, 120 Pa. 624, 15 A. 553 (1888)).[back]

2. Edward V ascended the English throne in 1483 at age 13, but he reigned for only two months before being deposed by his uncle, Richard, Duke of Gloucester. See, Britannia, Edward V (1483 AD), available at www.britannia.com/history/monarchs/mon38.html (last visited Nov. 1, 2005).[back]

3. See Keene v. Brigham & Women’s Hosp., Inc., 439 Mass. 223, 246-47 (2003) (Ireland, J., dissenting) (majority of jurisdictions reject charitable immunity doctrine, citing Restatement (Second) of Torts § 895E (1979); 15 Am. Jur. 2d § 184 (2000)).[back]

4. See, e.g., Developments in the Law — Nonprofit Corporations, 105 Harv. L. Rev. 1578, 1691-96 (1992) (proposing alternate liability arrangement to charitable immunity); Note, The Quality of Mercy: “Charitable Torts” and Their Continuing Immunity, 100 Harv. L. Rev. 1382, 1398-99 (1987) (arguing that charitable immunity is unwarranted in principle); John R. Feather, Comment, The Immunity of Charitable Institutions From Tort Liability, 11 Baylor L. Rev. 86, 86-89 (1959) (discussing origin of charitable immunity doctrine); see also Paul T. O’Neill, Charitable Immunity: The Time to End Laissez-Faire Health Care Has Come, 82 Mass. L. Rev. 223 (1997) (advocating for legislative amendment to statute).[back]

5. Keene, 439 Mass. 223; Conners v. Northeast Hosp. Corp., 439 Mass. 469 (2003).[back]

6. In modern times, a charitable corporation is generally defined as an organization that qualifies for tax exemption under section 501(c)(3) of the Internal Revenue Code (I.R.C.). See The Quality of Mercy, supra note 4, at 1382 n.1. The issue of what is or should be considered a charitable corporation under Section 85K, however, is addressed in greater detail below.[back]

7.Section 85K provides:

It shall not constitute a defense to any cause of action based on tort brought against a corporation, trustees of a trust, or members of an association that said corporation, trust, or association is or at the time the cause of action arose was a charity; provided, that if the tort was committed in the course of any activity carried on to accomplish directly the charitable purposes of such corporation, trust, or association, liability in any such cause of action shall not exceed the sum of twenty thousand dollars exclusive of interest and costs. Notwithstanding any other provision of this section, the liability of charitable corporations, the trustees of charitable trusts, and the members of charitable associations shall not be subject to the limitations set forth in this section if the tort was committed in the course of activities primarily commercial in character even though carried on to obtain revenue to be used for charitable purposes.

Mass. Gen. Laws ch. 231, § 85K (2005). See Morrison v. Lennett, 415 Mass. 857, 861 (1993) (legislature has “shield[ed] charitable organizations from tort liability in excess of $20,000 for torts committed in ‘the course of any activity carried on to accomplish directly the charitable purpose’ of the organization.”) (quoting Section 85K); English v. New England Med. Ctr., Inc., 405 Mass. 423, 429 (1989) (legislature limited the liability of charitable institutions for negligent and intentional torts to $20,000 in order to permit their funds to be “devoted to charitable purposes.”), cert. denied, 493 U.S. 1056 (1990).[back]

8. See Keene, 439 Mass. at 242-43.[back]

9. See Martin v. Kelley, 2004 Mass. Super. LEXIS 277 (Mass. Super. Ct. Aug 2, 2004) (charitable immunity statute applies to Roman Catholic diocese sued for negligent hiring and retention of priest); see also Lisa K. Bruno, Immunity Statute Protects Church From Abuse Lawsuit, Mass. Law. Wkly., Aug. 30, 2004, at 1 (discussing Martin v. Kelley decision); Ralph Ranalli, Victims Agonize Over Church Deal, Boston Globe, Oct. 8, 2003, at B1 (citing charitable cap as motivating factor for victims of clergy sexual abuse to settle claims).[back]

10. See The Quality of Mercy, supra note 4, at 1388.[back]

11. See Henry Hansmann, The Rationale for Exempting Nonprofit Organizations from Corporate Income Taxation, 91 Yale L.J. 54, 68 (1981); Henry Hansmann, The Role of Nonprofit Enterprise, 89 Yale L.J. 835, 848-54 (1980).[back]

12. Michael H. Schill, Note, The Participation of Charities in Limited Partnerships, 93 Yale L.J. 1355, 1358 n.16 (1984) (citing H.R. Rep. No. 1860, 75th Cong., 3d Sess. 19 (1938)); see also Oliver A. Houck, With Charity for All, 93 Yale L.J. 1415, 1421-25 (1984) (noting that charitable privileges are intended as subsidies for public services). [back]

13. 439 Mass. at 470.[back]

14. Id. [back]

15. Id.[back]

16. Id.[back]

17. Id. at 470, 472-73.[back]

18. Id. at 470.[back]

19. Conners, 439 Mass. at 470.[back]

20. Id. at 470-71.[back]

21. Id. at 471.[back]

22. Id. at 474.[back]

23. Id.[back]

24. Id.[back]

25. Conners, 439 Mass. at 474.[back]

26. Id.[back]

27. Id.[back]

28. Id. at 475.[back]

29. Id. at 474 (citing W. Mass. Lifecare Corp. v. Bd. of Assessors, 434 Mass. 96, 103 (2001) (provision of health care recognized as “a traditional charitable purpose”); Harvard Cmty. Health Plan, Inc. v. Bd. of Assessors, 384 Mass. 536, 543 (1981) (“the promotion of health, whether through the provision of health care or through medical education and research, is today generally seen as a charitable purpose”); Restatement (Third) of Trusts § 28 (2003) (charitable trust purposes include promotion of health)).[back]

30. Id.[back]

31. Conners, 439 Mass. at 474; see also Goldberg v. Northeastern Univ., 60 Mass. App. Ct. 707, 712 (2004) (“When a corporation presents a charter that shows the corporation to be charitable, that charter is prima facie evidence of the corporation’s charitable purpose and operation.”). [back]

32. Conners, 439 Mass. at 475.[back]

33. Id. at 471-72.[back]

34. Id. at 474.[back]

35. Id. at 477-78.[back]

36. Id. at 477.[back]

37. Id. at 477-78. [back]

38. Conners, 439 Mass. at 478-80. [back]

39. Id. at 478. For an interesting discussion of a current dispute involving the “primarily commercial in nature” exception to the charitable immunity cap, see Liz Kowalczyk, A Challenge to Nonprofits, Boston Globe, May 25, 2005, at C1 (discussing challenge to the charitable immunity statute by family of patient who died after obesity surgery). See also Darviris v. Petros, 442 Mass. 274, 279 (2004) (rejecting a chapter 93A claim filed against a doctor, but stating, “[w]hile we have no hesitancy in concluding that the negligent provision of medical care, without more, does not give rise to a claim under G.L. c. 93A, this does not mean that all conduct of medical care providers is beyond the reach of that statute. As appellate courts in other jurisdictions have concluded, consumer protection statutes may be applied to the entrepreneurial and business aspects of providing medical services, for example, advertising and billing, even though those statutes do not reach medical malpractice claims.”).[back]

40. Conners, 439 Mass. at 480. In this regard, the law provides that a corporate activity will be considered sufficiently connected to the corporation’s charitable purposes “unless the reasons for conducting that activity are ‘primarily commercial,’ meaning that the activity is ‘entirely disconnected’ from the charitable purposes of the corporation.” Goldberg, 60 Mass. App. Ct. at 713 (citing Missett v. Cardinal Cushing High Sch., 43 Mass. App. Ct. 5, 11 (1997)); see also Linkage Corp. v. Trs. of Boston Univ., 425 Mass. 1, 28 n.37 (1997).[back]

41. 439 Mass. at 225.[back]

42. Id.[back]

43. Id.[back]

44. Id. at 225-26.[back]

45. Id. at 226.[back]

46. Id.[back]

47. Keene, 439 Mass. at 228.[back]

48. Id. at 228-232.[back]

49. Id. at 229.[back]

50. Id. at 231-32.[back]

51. Id. at 232-33.[back]

52. Id. at 224.[back]

53. Keene v. Brigham & Women’s Hosp., Inc., 56 Mass. App. Ct. 10 (2002).[back]

54. Keene, 439 Mass. at 234.[back]

55. Id. (citing Fletcher v. Dorchester Mut. Ins. Co., 437 Mass. 544, 549-50 (2002); Kippenhan v. Chaulk Servs., Inc., 428 Mass. 124, 127 (1998); Nally v. Volkswagen of Am., Inc., 405 Mass. 191, 197-98 (1989)).[back]

56. Id.[back]

57. Id. at 236.[back]

58. Id. at 236, 237.[back]

59. Id. at 237.[back]

60. Keene, 439 Mass. at 237.[back]

61. Id. at 238.[back]

62. Id. at 238, 239.[back]

63. 439 Mass. at 473 (quoting 1971 House Doc. No. 5976 (governor’s address to the legislature)).[back]

64. Id. In this regard, the Supreme Judicial Court has noted that “[t]he objective of § 85K clearly is to protect the funds of charitable institutions so they may be devoted to charitable purposes.” English, 405 Mass. at 429. “If a charity’s property were ‘depleted by the payment of damages its usefulness might be either impaired or wholly destroyed, the object of the founder or donors defeated, and charitable gifts discouraged.’” Id. (quoting St. Clair v. Trs. of Boston Univ., 25 Mass. App. Ct. 662, 666 (1988)). Thus, the purpose of Section 85K coincides with the common law objective to protect charitable assets held in trust for the purposes envisioned by the donors. McDonald v. Mass. Gen. Hosp., 120 Mass. 432, 435-36 (1876).[back]

65. Conners, 439 Mass. at 473.[back]

66. Id. at 476.[back]

67. Id. at 477 n.6 (citing Shelley A. Sackett, Conversion of Not-for-profit Health Care Providers: A Proposal for Federal Guidelines on Mandated Charitable Foundations, 10 Stan. L. & Pol’y Rev. 247 (1999) (proposing solutions to ease transition for healthcare organizations converting from nonprofit to for-profit entities); Valerie N. Hosfeld, Comment, Integrated Delivery Systems — The “Promised Land” of Health Care: Obtaining a Federal Income Tax Exemption as a Nonprofit Organization under Section 501(c)(3) of the Internal Revenue Code, 20 U. Dayton L. Rev. 203 (1994) (discussing ways in which integrated health delivery systems can maintain charitable status for federal tax exemption purposes); Developments in the Law, supra note 4, at 1629-33 (discussing propriety of tax exemption for healthcare institutions)). [back]

68. Id. at 476-77.[back]

69. Id. at 477.[back]

70. 439 Mass. at 481.[back]

71. 439 Mass. at 242-48.[back]

72. Conners, 439 Mass. at 481; Keene, 439 Mass. at 242-48.[back]

73. Conners, 439 Mass. at 481.[back]

74. Keene, 439 Mass. at 246. In this regard, Justice Ireland noted that “[t]he great majority” of jurisdictions support the Restatement (Second) of Torts, which states, “One engaged in a charitable, educational, religious or benevolent enterprise or activity is not for that reason immune from tort liability.” Id. at 246-47 (citing Restatement (Second) of Torts § 895E (1979)).[back]

75. No. 96-565-E, 2001 Order on Post-Trial Motions (August 28, 2003). This employment case arose from investigations of the discovery that two patients enrolled in an experimental medical protocol at the hospital received overdoses of a chemotherapy drug. In addition to her chapter 151B claim, the physician alleged that the hospital invaded her privacy by discussing publicly its investigation of the overdoses, defamed her in statements to a newspaper, and breached its contractual obligations to her. The jury returned verdicts in favor of the hospital on the defamation and discrimination claims but found in favor of the plaintiff on the claims of invasion of privacy and breaching the implied covenant of good faith and fair dealing, and the claim under chapter 151B. The jury awarded $2.1 million in compensatory damages against the hospital. In post-trial proceedings, the trial judge reduced the compensatory damages against the hospital to $20,000 under the charitable immunity statute. Id.[back]

76. Id. at 2.[back]

77. Id.[back]

78. Ayash v. Dana-Farber Cancer Inst., 443 Mass. 367, 390 (2005).[back]

79. Id. (Section 85K does not apply to damages awarded under unfair business practices act, Mass. Gen. Laws ch. 93A, because that statute created “broad new rights, forbidding conduct not previously unlawful under the common law of contract and tort or under any prior statute.”) (citing Linkage Corp., 425 Mass. at 27-28, cert. denied, 522 U.S. 1015 (1997); Birbiglia v. Saint Vincent Hosp., Inc., 427 Mass. 80, 88 (1998) (Section 85K does not apply to claim that hospital violated wiretapping statute, Massachusetts General Laws, chapter 272, section 99 Q)); see also McMillan v. Mass. Soc’y for the Prevention of Cruelty to Animals, 140 F.3d 288, 307 (1st Cir. 1998), cert. denied, 525 U.S. 1104 (1999) (Section 85K does not limit damages awarded under chapter 151B); Ayash, 443 Mass. at 391 n.21 (chapter 151B violation is not a tort for purposes of Section 85K).[back]

80. Ayash, 443 Mass. at 392. When the charitable immunity statute was originally enacted, the legislature specifically exempted charitable corporations from the category of “employers” who could be liable for chapter 151B violations. In 1969, the legislature removed the exemption and made charitable corporations “employers” for purposes of claims arising under chapter 151B. [back]

81. Id. at 391 (Supreme Judicial Court has identified tort-like aspects of chapter 151B claims) (citing Stonehill Coll. v. Mass. Comm’n Against Discrimination, 441 Mass. 549, 559-60, cert. denied, 125 S. Ct. 481 (2004)); Thomas v. EDI Specialists, Inc., 437 Mass. 536, 539 (2002); Dalis v. Buyer Adver., Inc., 418 Mass. 220, 223 (1994); Conway v. Electro Switch Corp., 402 Mass. 385, 387 (1988). For an interesting discussion of a current dispute involving the “tort-like aspects” of chapter 151B claims, see Margaret H. Paget, Survival of 151B Claims Upon Death Of A Party, Mass. Law. Wkly., June 13, 2005, at 11 (discussing opposite conclusions reached by superior court justices on question whether death of party extinguishes chapter 151B claim).[back]

82. Ayash, 443 Mass. at 391. In this regard, the Supreme Judicial Court noted that it has rejected the notion “that statutory causes of action created by the Legislature out of whole cloth categorically do not sound in tort.” Ankiewicz v. Kinder, 408 Mass. 792, 795 (1990). Rather, “the key variable in defining whether claims sound in tort is ‘the substantive quality of the claims.’” Id. (quoting Wolfe v. Ford Motor Co., 386 Mass. 95, 100 (1982)).[back]

83. Norfolk Superior Court Civil Action No. 92-1961 (Memorandum of Decision and Order dated March 29, 1996, Butler, J.) (citing “Massachusetts’s policy of rigorously follow[ing] the trust fund principle” set forth in St. Clair v. Trs. of Boston Univ., 25 Mass. App. Ct. 662, 667 (1988)). [back]

84. 42 U.S.C. § 1395dd. Also known as the “Anti-Dumping Statute,” EMTALA was enacted to “prevent the practices of denying emergency medical treatment to patients unable to pay, or transferring them before their emergency conditions have been stabilized.” Memorandum of Decision and Order, supra note 83, at 4 (citing Power v. Arlington Hosp. Ass’n, 42 F.3d 851, 856 (4th Cir. 1994)).[back]

85. Memorandum of Decision and Order, supra note 83, at 4 (citing Gatewood v. Wash. Healthcare Corp., 933 F.2d 1037, 1041 (D.C. Cir. 1991)).[back]

86. Id. at 5.[back]

87. Ayash, 443 Mass. at 392.[back]

88. Editorial, Revisiting the Charity Cap, Mass. Law. Wkly., Mar. 24, 2003 at 10.[back]

89. See Developments in the Law, supra note 4, at 1684 n.48.[back]

90. See House Bills 4702 and 1144 (Massachusetts General Court, 2003-2004 session).[back]

91. Editorial, Forcing the Charity Cap Issue, Mass. Law. Wkly., June 9, 2003, at 10.[back]

92. Editorial, Revisiting the Charity Cap, supra note 88, at 10 (discussing concept of limiting the applicability of the cap to “small non-profits and ‘real charities’ that truly serve the public interest”).[back]

93. Id.[back]

94. Id.[back]

95. See, e.g., Stephanie Strom, Big Tax Break Often Bypasses Idea of Charity, N. Y. Times, Apr. 25, 2005, at A1 (discussing regulators’ and lawmakers’ suspicions that so-called “supporting organizations”— “obscure philanthropic entit[ies] . . . so named because [they are] created to support a specific charity or charities” — are being used “more for tax planning than for any charitable aim”); Jonathan Cohn, Uncharitable?, N. Y. Times, Dec. 19, 2004, at 6-51 (discussing transformation of nonprofit hospital “from savior to scourge”); Jennifer Bayot, U.S. Suit Accuses Credit Counselor of Deception, N. Y. Times, Nov. 20, 2003, at C17 (discussing Federal Trade Commission’s first suit against non-profit credit counselor charged with deceptive practices); Associated Press, Group Fights Bequest to Neo Nazi, Oct. 26, 2003 (suggesting tax-exempt church constitutes “a front” for hate group).[back]

96. See, e.g., Sacha Pfeiffer and Michael Rezendes, Mass., 2 Other States to Probe Foundations, Boston Globe, Oct. 10, 2003, at A1 (discussing inquiries into possible financial wrongdoing by heads of charitable foundations); Beth Healy and Michael Rezendes, Nonprofits Outline Plans for Reform, Boston Globe, Mar. 2, 2005, at A1 (discussing need for reforms designed to force greater accountability and boost penalties for the misuse of charitable funds).[back]

97. Of course, the charitable immunity cap affects a wide range of organizations including religious (see supra note 9) and educational (see supra note 31) institutions, benevolent societies (see McMillan v. Mass. Soc’y for the Prevention of Cruelty to Animals, 140 F.3d 288 (1st Cir. 1998)), charitable arts foundations (see Proctor v. N. Shore Cmty. Arts Found., 47 Mass. App. Ct. 372 (1999)), and nominee land trusts (see Morrison v. Lennett, 415 Mass. 857 (1993).[back]

98. See Kenneth R. Kohlberg, The Medical Peer Review Privilege: A Linchpin for Patient Safety Measures, 86 Mass. L. Rev. 157 (2002) (discussing statutory medical peer review privilege); Kenneth R. Kohlberg, Physicians as Public Employees: Revisiting the Immunity Issue, 83 Mass. L. Rev. 71 (1998) (discussing statutory public employee immunity of physicians).[back]

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