BLS Blog

Key Takeaway: Where there were “serious questions” about the independence of a board and the good faith of its decision not to pursue a derivative suit against a former director, Judge Kaplan refused to apply the business-judgment rule (BJR).

In Mooney v. Diversified Business Comms., Judge Sanders addressed a number of discovery issues, including the relevance of requested documents, the redaction of non-relevant information in responsive documents, and privilege. The most notable—an issue of first impression in Massachusetts—was whether a former officer suing his old company could discover privileged communications that occurred when he had been employed with the company.

Background: When the Massachusetts Gaming Commission (MGC) awarded a gaming license to Wynn to operate a casino in Everett, Massachusetts, MGC effectively chose Wynn over Mohegan Sun, which sought a license to operate a casino in Revere, Massachusetts. Mohegan Sun brought suit in the BLS, seeking to vacate the MGC’s decision. Mohegan Sun alleges that MGC improperly favored Wynn throughout the application process. Mohegan Sun further alleges that MGC did not properly apply the statutory standards for granting a casino license. After commencing suit, Mohegan Sun filed a motion to “complete the administrative record,” which sought production of, among other documents, communications between a quorum of MGC commissioners regarding the licensing proceedings.

In Beninati, et al. v. Borghi, et al., Judge Sanders ruled that the plaintiffs in a successful action under G.L. c. 93A, § 11, were not entitled to recover $170,000 in attorneys’ fees incurred before the litigation began. The fees, according to the plaintiffs’ fee petition, related to “extensive settlement discussions” that predated the filing of the action. Judge Sanders wrote: “This Court is aware of no authority that permits the award of fees incurred before the litigation began and that do not bear directly on its preparation, which these fees clearly did not.”