Judge Ricciuti, sitting in the Massachusetts Business Litigation Session, rejected a shareholder’s claim that she could shed herself of the fiduciary duty she owed to a close corporation by renouncing her shares in the corporation.
In Empire Dealer Services, Inc., et al. v. Guerin, et al., Empire Dealer Services, a close corporation, and John Kane, Empire’s sole director, president, treasurer, and secretary, sued Guerin, a former vice president and a minority shareholder of Empire, and Drive Dealer Performance, Guerin’s new company. The plaintiffs sought an injunction to stop Guerin from pursuing the new venture, claiming that Guerin was violating her fiduciary duties owed to Empire and Kane.
In Archer, et al. v Grubhub, Inc., the Massachusetts Supreme Judicial Court (SJC) ruled that § 1 of the Federal Arbitration Act (FAA) applies to Grubhub delivery drivers.
The plaintiffs, former delivery drivers for Grubhub, commenced a putative class action against Grubhub in the Massachusetts Superior Court. The drivers alleged that Grubhub violated Massachusetts statutes, including the wage act (G.L. c 149, §§ 148 and 150), the tips act (G.L. c. 149, § 152A), and the minimum-wage act (G.L. c. 151, § 7).
Under its recently issued Standing Order 1-22 (link here), the Massachusetts Superior Court increased the number of hearing types that it will “presumptively” conduct by videoconference. The standing order applies to Massachusetts state trial courts, including the Massachusetts Business Litigation Session.
The Superior Court, according to Chief Justice Heidi Brieger, designated the types of hearings that it will presumptively hold by videoconference or in-person “consistent with constitutional, statutory, and other applicable rights, and in the interest of justice.”
Judge Krupp, sitting in the Massachusetts Business Litigation Session, ruled that the statute of limitations barred the plaintiff’s tort, contract, and unfair and deceptive practices claims against Williams-Sonoma.
In Gattineri v. Williams-Sonoma Stores, the plaintiff, a former Williams-Sonoma sales employee, alleged that she showed her idea of “The Perfect Brownie Pan” to a Williams-Sonoma district manager in 2003. Although the district manager signed a non-disclosure agreement, the agreement did not signify that the manager was signing it in any representative capacity. Williams-Sonoma never developed the pan into a marketable product. In mid-2009, the plaintiff saw a television infomercial for a virtually identical product marketed under the name “The Perfect Brownie Pan.” In early 2018, the plaintiff learned that the district manager had shown the plaintiff’s prototype to an entity affiliated with the informercial back in 2003. The plaintiff sued Williams-Sonoma (as well as other defendants) in November 2021.
Considering Williams-Sonoma’s motion to dismiss, Judge Krupp observed that the Massachusetts “discovery rule” only “tolls the statute of limitations until a plaintiff knows, or reasonably should have known, that it has been harmed or may have been harmed by the defendant’s conduct.” A plaintiff may be put on inquiry notice that a cause of action has accrued, Judge Krupp wrote, “where it is informed of facts that would suggest to a reasonably prudent person in the same position that an injury has been suffered as a result of the defendant’s conduct.”
Judge Krupp ruled that because the “plaintiff saw her pan advertised on television in mid-2009,” she knew then “that someone else had brought her idea to market” and therefore the plaintiff at that time “had actual knowledge that she had been harmed.” According to Judge Krupp, the fact that the plaintiff “did not know the mechanism of injury—i.e., exactly how her idea for the Perfect Brownie Pan got from [the district manager] to [the advertiser]” in mid-2009—did not toll the statute of limitations. In mid-2009, the plaintiff “knew that she had been injured,” explained Judge Krupp.
Judge Krupp also rejected the plaintiff’s contention that the reasonable-person standard requires a court to look to every particular of a plaintiff’s circumstance. “Individual variations in judgment, intellect, or psychological health which are unrelated to the complained of conduct are not considered,” Judge Krupp wrote. “The reasonable person standard,” he explained, “requires the Court to consider whether a reasonable person who had invented ‘The Perfect Brownie Pan’ would have discovered, or should have discovered, that she had been harmed and who had caused that harm when she learned that the pan was being marketed on television.”
You can read the decision here.
In Lubin & Meyer v. John J. Manning, Judge Salinger, sitting in the Business Litigation Session, ruled that Lubin & Meyer’s claims for breach of fiduciary duty against its former associate, John Manning, survived summary judgment.
According to Judge Salinger, Lubin & Meyer claimed that Manning breached his duty of loyalty to the firm by “continu[ing] to work on cases that the firm had rejected, l[ying] to clients about whether the firm was representing them, and l[ying] to the firm about what he was doing.”
Adversaries often challenge each other’s privilege calls in the thick of litigation, and sometimes those challenges are elevated to a court’s in camera review. In Governo Law Firm LLC v. CMBG3 Law LLC, et al., Judge Salinger, sitting in the Massachusetts Business Litigation Session, ruled that the attorney-client privilege protected from production a confidential email from the defendants to their counsel “seeking feedback on a draft press release . . . embedded in the text of the email.”
After reviewing the email in camera, Judge Salinger ruled that “it is evident that this defendant sent this confidential communication to counsel in order to elicit legal advice as to whether issuing a press release in this form could create any legal exposure for the Defendants.” Although the communication “does not contain legal advice,” “that does not matter,” explained Judge Salinger. “Any confidential communication between attorney and client, in either direction, is privileged if it [is] made for the purpose of obtaining or giving legal advice—whether the communication conveys legal advice or not.”
In Kirk Ramey v. Trustees of Boston University, et al., Judge Krupp, sitting in the Business Litigation Session, ruled that Ramey, a former BU research scientist, was entitled to a trial on his claim that defendants, BU and Dr. Edward Damiano, breached an oral agreement to provide Ramey an equity stake in Beta Bionics, a medical device company.
The oral contract, Ramey alleges, arose from two conversations he had with Dr. Damiano, a BU biomedical engineering professor. One of the conversations took place before Ramey accepted a position in Dr. Damiano’s lab. Dr. Damiano did not dispute that the conversations took place, but denied that he had agreed to give Ramey an equity interest in Beta Bionics, which had not yet been formed when Ramey began work. Neither conversation was memorialized in writing.
In Verveine Corp., et al., v. Strathmore Insurance Company, et al., the Massachusetts Supreme Judicial Court (SJC) held that claims for business losses made by three restaurants arising from COVID-19 dining restrictions were not covered by “all-risk” property insurance policies because the losses were not “direct physical loss or damage” under those policies.
In spring 2020, Governor Baker issued an emergency order prohibiting in-person dining at restaurants and bars in the Commonwealth. Two of the plaintiffs responded by offering takeout and delivery services, while the third plaintiff suspended operations. Though limited in-person dining resumed in June 2020, the plaintiffs continued to lose revenue due to the restrictions. The restaurants filed insurance claims for the lost income. Strathmore Insurance Company denied the claims. The restaurants then brought a declaratory judgment action against Strathmore and asserted claims for breach of contract and violation of G. L. c. 93A and G. L. c. 176D. Superior Court Judge Sanders dismissed the claims, ruling that the restaurants did not suffer “direct physical loss or damage,” as required by the policies.
After successfully appealing a judgment and obtaining a remand of its Chapter 93A claim to the Massachusetts BLS, the Governo Law Firm moved to admit expert testimony about a “reasonable royalty” measure of damages. Governo had sued six former nonequity partners whom the law firm alleged had misappropriated proprietary databases and electronic files. Deciding Governo’s motion, Judge Salinger ruled that Governo had waived its right to challenge the admission of the damages testimony because Governo had failed to raise the argument on appeal.
Judge Salinger’s decision turned on the procedural history of the case.
Judge Krupp, sitting in the Massachusetts Business Litigation Session, granted Uber’s motion to compel documents containing the identities of drivers who shared information with the Attorney General about their work for Uber and Lyft.
In Healey v. Uber Technologies (see our prior update here), the AG invoked the investigatory privilege to resist production. The purposes of the investigatory privilege, according to the Supreme Judicial Court in Bougas v. Chief of Police of Lexington, include: