BLS Blog

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).

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.”

FTI sued three of its former employees who went to work for Berkeley Research Group (Berkeley), an FTI competitor. The former employees, FTI alleged, breached their FTI employment contracts and their fiduciary duty of loyalty owed to FTI. FTI also sued Berkeley, alleging that Berkeley aided and abetted the former employees’ breach of their fiduciary duties.

The defendants moved to strike the fiduciary-duty claims. Judge Salinger allowed the motion in part, striking the claim for breach of fiduciary duty against the former employees. But Judge Salinger denied the motion to the extent that it aimed to strike the aiding and abetting claim against Berkeley.

In Bertolino v. Fracassa, Judge Salinger ruled that the advice-of-counsel defense did not insulate Frederick McDonald, a defendant in the case, from liability under the Massachusetts Uniform Securities Act (MUSA), G.L. c. 110A, § 410. McDonald claimed that because he relied on his counsel’s advice to determine what he needed to disclose when soliciting investors, he could not be held liable for failing to disclose material facts to potential investors when he offered and sold membership units in his LLC. Rejecting McDonald’s argument, Judge Salinger reasoned that, because the advice-of-counsel defense is available only “to rebut the scienter element of a crime or civil charge requiring a willful or intentional violation of the law” and “willful or intentional misconduct is not an element of liability under MUSA,” McDonald couldn’t rely on that defense. Judge Salinger also reasoned that, even if the advice-of-counsel defense were viable under MUSA, McDonald proffered no evidence that “he made [a] complete disclosure to counsel, sought advice as to the legality of his conduct, received advice that his conduct was legal, [or] relied on that advice in good faith.” 

Three new judges have joined the BLS rotation.

Judge Peter Krupp replaced Judge Karen Green for the January-June rotation period of BLS1. In 2013, Governor Deval Patrick appointed Judge Krupp to the Superior Court. Before his appointment, Judge Krupp founded Lurie & Krupp (n/k/a Lurie Friedman); worked for the Committee for Public Counsel Services; and served as an Assistant Federal Public Defender in the District of Massachusetts. Judge Krupp began his career as an Associate at Mintz, Levin, Cohn, Ferris, Glovsky & Popeo. You can find more information about Judge Krupp’s background at Massachusetts Lawyers Weekly.