Lawyers Journal

For decades, plaintiffs have sought to charge Massachusetts public entities with violations of the Regulation of Business Practice and Consumer Protection Act (the act)¹ and obtain the enhanced damages, including multiple damages and attorneys' fees, provided under the act.

In so doing, plaintiffs have relied upon the statutory definition of a "person" as "natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entity,"² and argued that public entities, such as the commonwealth itself, fit within this definition. The sweepingly broad definition of a "person" against whom suit may be brought has created confusion and invited much litigation against the commonwealth and its subdivisions.

Despite the significant volume of such claims against the commonwealth and its subdivisions, the question of whether the private causes of action created by the act are barred by the doctrine of sovereign immunity has evaded definitive review, until recently.

In February 2011, in Max-Planck-Gesellschaft Zur Forderung Der Wissenschaften E.V. v. Whitehead Institute for Biomedical Research,³ the Hon. Patti B. Saris, of the U.S. District Court for the District of Massachusetts, expressly ruled that Chapter 93A claims brought by inventors claiming improper licensing of intellectual property rights against the University of Massachusetts were barred by the doctrine of sovereign immunity. This ruling was the first instance where a court affirmatively acknowledged that the doctrine of sovereign immunity bars Chapter 93A claims.

In the decades preceding the Max-Planck-Gesellschaft decision, the ambiguity in the law had been perpetuated by a number of decisions that, while ruling in favor of public entities on factual findings that the defendant was not engaged in trade or commerce, appear to acknowledge that public entities may be "persons" as defined by the act.⁴ Courts in other cases discussed the ambiguity but failed to directly rule on it.⁵

The Appeals Court, in M. O'Connor Contracting, Inc. v. City of Brockton, noted that "(w)hether a governmental entity is ever amenable to suit under c. 93A remains an open issue."⁶ The court acknowledged that the act "contains no explicit indication that governmental entities are to be liable under its provisions,"⁷ but also recognized that public entities have standing to bring claims under the act, and opined that this fact would support a finding that they are also liable under the act.⁸

But, like the preceding cases, the court then put aside the question of whether Chapter 93A may be read as waiving governmental immunity in any circumstances, and ruled on other grounds. That same year, 2004, the Supreme Judicial Court expressly acknowledged that the issue of whether public entities are persons amenable to suit under Chapter 93A has evaded review, stating that "no case has presented us with an occasion to decide whether a municipality may in some circumstances be 'amenable to the provisions' of G.L. c. 93A."⁹

The Max-Planck-Gesellschaft case required the U.S. District Court to grapple with the issue head on because the facts there clearly established that the defendant, the University of Massachusetts, was engaged in trade and commerce. More specifically, the claims against the University of Massachusetts involved contracts entered into "solely for profit" and did not fit any of the traditional governmental roles.¹⁰ Thus, this unique set of facts required, at long last, a critical analysis of the application of the doctrine of sovereign immunity to Chapter 93A claims.

The court recognized that under well-established Massachusetts law, waiver of sovereign immunity requires either an express legislative waiver or a finding that such a waiver is necessarily implied from the terms of the statute.¹¹ It then noted that Chapter 93A contains no explicit waiver of sovereign immunity, and opined that an implied waiver must be "very clear."¹² The court then acknowledged that in general, Massachusetts statutes that use the term "person" do not encompass governmental entities, and found that the Massachusetts Legislature has explicitly defined "person" to include the commonwealth in other ?statutory enactments.¹³

Moreover, the court's decision affirmatively states that the Legislatures' use of the term "any other legal entity" is not a sufficient basis to support a finding that the Legislature intended to waive sovereign immunity in Chapter 93A.¹⁴

In reaching its decision, the court applied the test set forth in Todino v. Town of Wellfleet¹⁵ and Bates v. Director of Office of Campaign and Political Finance¹⁶ that implied waiver can only be found where it is necessarily implied by the statute and without such implication the statute would be rendered ineffective. The court concluded that exempting the commonwealth and its municipalities from liability under Chapter 93A would not render the act "ineffective," and thus held that sovereign immunity was not waived by Chapter 93A.¹⁷

While the Max-Planck-Gesellschaft decision stands as a trial court decision that will not be reviewed on appeal, it provides important guidance on an issue that has long evaded substantive review. Moreover, it stands as a call to the Legislature to clarify the language of the act to either affirmatively exempt public entities or to explicitly include public entities within the ambit of the term "person."

Doing the former would put an end to plaintiffs' pursuit of attorneys fees and double or treble damages against the commonwealth and its subdivisions and relieve taxpayers of the costly burden of defending Chapter 93A claims.

¹MASS. GEN. LAWS c. 93A (2011).
²MASS. GEN. LAWS c. 93A § 1 (2011).
³No. 09-CV-11116-PBS, 2011 WL 487828 (D. Mass. Feb. 7, 2011).
⁴See, e.g., Park Drive Towing, Inc. v. City of Revere, 442 Mass. 80, 86 (2004); All Seasons Services, Inc. v. Comm'r of Health and Hospitals of Bos., 416 Mass. 269, 271 (1993); Morton v. Town of Hanover, 43 Mass. App. Ct. 197, 206 (1997).
⁵See, e.g., M. O'Connor Contracting, Inc. v. City Of Brockton, 61 Mass.App.Ct. 278, 284 (2004).
⁶Id. at n.8.
⁷Id.
⁸Id.
⁹Park Drive Towing, 442 Mass. at 86.
¹⁰Max-Planck-Gesellschaft, 2011 WL 487828, at *11.
¹¹Id., at *12.
¹²Id.
¹³Id.
¹⁴Id. at *13.
¹⁵448 Mass. 234, 238 (2007).
¹⁶436 Mass. 144, 174 (2002).
¹⁷Max-Planck-Gesellschaft, 2011 WL 487828, at *13.

Richard M. Dohoney is a partner in the Berkshire County-based law firm of DeRosa Dohoney LLP. He concentrates in civil litigation and frequently represents plaintiffs and municipalities in litigation involving contracting disputes, eminent domain and zoning matters. He is a member of the MBA's Civil Litigation Section Council.