Issue January 2013

January 2013

Benefit corporations: A new form of doing business in Massachusetts

On Aug. 7, 2012, Gov. Deval Patrick signed House Bill No. 4352 into law, thereby establishing the Massachusetts Benefit Corporation Act and adding Chapter 156E to the Massachusetts General Laws. With the introduction of Chapter 156E, Massachusetts became the eleventh state to adopt the establishment of this new type of corporate entity, along with California, Hawaii, Illinois, Maryland, Louisiana, New Jersey, New York, Pennsylvania, South Carolina, Vermont and Virginia. Effective Dec. 1, 2012, Massachusetts entities may incorporate as benefit corporations or convert to benefit corporations.

Changes to court rules and amendments effective Jan. 1

Effective Jan. 1, 2013, there are several amendments to the Superior Court Rules, Massachusetts Rules of Civil Procedure, and Supreme Court Rules, as well as the addition of Rule 30B to the Superior Court Rules. The following provides a brief overview of the new rule and amendments.

Reasonable accommodation requests in the housing context

An interesting challenge, not only for a young attorney but also any advocate who practices housing law, is handling cases involving tenants with disabilities. Several laws prohibit housing discrimination based on a person's disability, most notably Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, Title VIII of the Federal Civil Rights Act of 1968, codified at 42 U.S.C. § 301 (The Fair Housing Act), and the Massachusetts Housing Bill of Rights for People with Disabilities, G.L. c. 151B. Under these laws, a person with a disability is defined as an individual who has a physical or mental impairment that substantially limits one or more major life activities, has a record of such impairment, or is regarded as having such impairment. A person with a disability under this definition is entitled to a reasonable accommodation to assist in accessing proper housing or in preserving a tenancy. A landlord's obligation to provide a reasonable accommodation to an individual with a disability exists at all stages of the tenancy, and a refusal to make such an accommodation is discrimination under the law.

What’s new in animal law?

Massachusetts has historically been on the forefront of animal protection. In 1641, the first law in the nation to protect animals was included in our "Body of Liberties." Today, the commonwealth consistently is in the top tier -- as high as fourth -- in rankings comparing all 50 states and the District of Columbia on a wide range of animal protection laws; a rating likely to go even higher as a result of the most recent legislative session.

Responding to Chapter 93a demand letters in product liability cases

In Massachusetts, manufacturers, distributors, suppliers and retailers face the grave reality that a product liability lawsuit brought against them will almost always include a cause of action under G.L. c. 93A, §§ 2 & 9. The application of this law to personal injury lawsuits involving products stems from the Supreme Judicial Court's decision inMaillet v. ATF-Davidson Co., 407 Mass. 185, 193 (1990), which held that "[g]enerally, a breach of warranty constitutes a violation of G.L. c. 93A, § 2." Id. The addition of a G.L. c. 93A claim to a product liability case increases the stakes both for plaintiffs and for defendants (and their insurers). Under G.L. c. 93A, § 9, defendants are faced with the task of evaluating a case prior to litigation, and before discovery has been completed, based upon minimal information, in order to make a "reasonable" settlement offer within 30 days of receiving a demand letter. The consequences for failing to do so appropriately are no less than the potential doubling or trebling of damages. Worse yet, the Supreme Judicial Court held recently in Rhodes v. AIG Domestic Claims, Inc., 461 Mass. 486 (2012), that a plaintiff may recover the original tort or contract judgment and up to three times that judgment amount under chapter 93A on the unfair and deceptive practices claim (either a breach of warranty claim or a bad faith settlement claim), for a total recovery to plaintiff of up to four times the original tort/contract judgment, plus attorneys' fees. G.L. c. 93A, § 9(3); Rhodes, 461 Mass. At 505. Mishandling the matter during the pre-suit demand letter stage can have severe ramifications on the potential damages and may dictate whether the case will be ultimately settled or tried and, if it is to be settled, for how much.

Electricity: good or service?

The Uniform Commercial Code governs the sale of "goods," as distinguished from the sale of services, which is governed by other statutory or case law. Under the UCC, a good is any "tangible thing" that is "moveable." In addition to manufactured products, goods include -- among other things -- growing crops and timber, the unborn young of animals, and minerals.  However, courts across the United States are split on whether electricity constitutes a good under the UCC.

Lawyers on the move: steps to take before dancing with a lateral hire

Law firms hire laterally for numerous reasons, such as the need to meet clients' demands, or in an effort to create specialized practice groups within the firm. The marketplace no longer discourages such jumps, which makes it easier to conduct such hiring.