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State Agency Lacks Standing under Chapter 93A

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.

Case Background: The case arose from a contract between Massachusetts Technology Park Corporation (MTPC), a state agency charged with expanding high-speed internet access, and G4S Technology (G4S), the company MTPC engaged to build a fiber-optic internet network. MTPC withheld millions dollars of the original contract price, arguing that G4S failed to pay its subcontractors on time, was delayed in completing the project, and delivered poor quality work.

When G4S sued MTPC for fraud, MTPC counterclaimed under Chapter 93A, § 11.

Summary Judgment Granted: Judge Sanders entered summary judgment against MTPC’s Chapter 93A claim. She reasoned that, because MTPC, a “creature of statute,” was acting under a legislative mandate to expand access to affordable high-speed internet, MTPC was not engaged in “trade or commerce.” Thus, MTPC did not have standing to bring a claim under Chapter 93A.

In reaching her holding, Judge Sanders rejected MTPC’s argument that MTPC was engaged in “trade or commerce” because it would profit from fees charged to end users of high-speed internet. The fees were not profits, Judge Sanders reasoned, because “the fees here are to be used by MTPC to pay staffing expenses and create a reserve fund for a future upgrade of the system. That is entirely in keeping with the public purpose behind the Project and with MTPC’s legislative mandate.”

G4S Technology LLC v. Massachusetts Technology Park Corporation
January 30, 2017
Full decision here.

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