This summer, the Boston Bar Association hosted its annual “Business Litigation Session Year in Review.” The current BLS bench—Judges Sanders, Salinger, Kaplan, and Liebensperger—shared tips for attorneys practicing in the BLS. Here are four takeaways from that event:
Judge Kaplan reported the following question to the Massachusetts Appeals Court: “May a government agency invoke a termination for convenience clause contained in a procurement contract for the purchase of goods for the sole reason that it has learned of an opportunity to purchase the same goods at a lower price from another vendor?”
The question arose in a dispute between A.L. Prime Energy Consultant, Inc. (Prime) and the MBTA. In July 2015, Prime was awarded a two-year supply contract to provide the MBTA with Ultra Low Sulfur Diesel Fuel (ULSDF) after a public bidding process. A year later, the MBTA terminated the contract under the termination-for-convenience clause.
In IBEW Local No. 129 Ben. Fund v. Tucci., the Supreme Judicial Court (SJC) affirmed a decision by Judge Leibensperger of the BLS dismissing a class action brought by EMC shareholders against EMC board members. The plaintiff alleged that the board members violated their fiduciary duties when they approved the sale of EMC to Dell for $64 billion. Affirming Judge Leibensperger’s decision, the SJC held that directors of a Massachusetts corporation generally have a unitary duty to act in the best interests of the corporation, rather than dual duties that run to both the corporation and its shareholders.
The Superior Court updated its Administrative Directive governing the BLS to broaden the scope of the types of cases that the BLS will preside over. This new directive signifies that the BLS is open to hearing almost any complex civil case—not just quintessential business cases.
Considering the rights of parties involved in a soured business relationship, Judge Kaplan reiterated that a binding contract requires an agreement on the material terms and an intent to be bound. A term sheet that does not represent an attempt to formalize an already established agreement is not an enforceable contract.
Key Issue: In G4S Technology LLC v. Massachusetts Technology Park Corporation, Judge Sanders faced the question of whether a state agency acting pursuant to a legislative mandate has standing to bring a claim under G.L. c. 93A, § 11.
Key Takeaway: The G4S decision follows a line of Massachusetts decisions holding that public entities acting under legislative mandates are not engaged in “trade or commerce” for purposes of Chapter 93A, even if the public entities are engaged in commercial transactions.
Assertions made solely on “information and belief” are insufficient support for a preliminary-injunction motion. That’s the key takeaway from Judge Salinger’s decision in Governo Law Firm LLC v. CMBG3 Law LLC.
The Governo Law Firm alleged that six former partners, who left to start another firm, misappropriated proprietary databases and electronic files. Judge Salinger denied the Governo Law Firm’s preliminary-injunction motion, which sought the return of the databases and files.
Judge Leibensperger decertified a class of current and former employees of Federal Management Co., Inc. (Federal), who alleged that Federal failed to pay them overtime, after post-certification discovery revealed that the named plaintiffs were not adequate class representatives.
Two years ago, the court certified a class of “all current and former Property Managers” employed by Federal from January 1, 2005 to the present under Mass. R. Civ. P. 23. While these Property Managers were paid a salary and annual bonus, they were not paid for overtime hours worked because Federal designated a Property Manager “as a bona fide executive, or administrative or professional person earning more than eighty dollars per week” in accordance with G.L.C. 151, s. 1A. Thus, Federal argued that these employees were exempt from receiving overtime pay.
Judge Leibensperger denied Glock’s motion to set aside a civil-investigative demand (CID) issued by Attorney General Maura Healy. The AG issued the CID under G.L. c. 93A, 6, as part of her investigation into Glock’s compliance with Massachusetts laws bearing on gun safety and product warranties. According to the AG, there have been reported safety issues with Glock handguns, including the risk of accidental discharge.
Proving that motions for reconsideration are not always futile, Judge Sanders exercised her discretion to undo part of her own prior ruling. Judge Sanders previously ruled in the case before her that the plaintiffs’ breach-of-fiduciary-duty claim survived summary judgment. The plaintiffs alleged that the defendants sold tilapia “without providing plaintiffs an opportunity to participate in these transactions.” In support of this allegation, the plaintiffs relied on their own interrogatory answer. Judge Sanders, on reconsideration, pointed out that the answer was “not based on personal knowledge and therefore d[i]d not constitute admissible evidence under Rule 56(e).” (Mass. R. Civ. P. 56(e) states that “[s]upporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.”) For that reason, among others, Judge Sanders allowed the defendants’ motion for reconsideration and awarded summary judgment against the breach-of-fiduciary-duty claim.
- Senior Editor, Co-Chair, Business Litigation Practice Group