BLS Blog

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 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.

Last month, the Social Law Library sponsored the Business Litigation Session 2021 Year in Review. The panel included Judge Kenneth Salinger, the BLS Administrative Justice, as well as Michael Tuteur and Andrew Yost, attorneys at Foley & Lardner LLP.

The Massachusetts Supreme Judicial Court (SJC) recently ruled that a limitation-of-liability provision provides no protection for defendants who willfully or knowingly engage in unfair or deceptive conduct in violation of G. L. c. 93A, § 11.

In H1 Lincoln Inc. v. South Washington Street, LLC, the SJC invalidated a limitation-of-liability clause in a commercial leasing contract. The SJC held that the provision was “unenforceable as contrary to public policy” because of the lessor’s “fraudulent misrepresentations and intentional schemes to string along and take advantage of” the leasee. When a party’s conduct is sufficiently “callous and intentional” to “merit multiple damages” under G. L. c. 93A, § 11, the SJC reasoned, public policy concerns and the legislative intent of the statute to deter intentionally unfair and deceptive acts require invalidation of contractual limitations on liability.

Judge Davis’s recent denial of an anti-SLAPP motion to dismiss provides helpful guidance on how to distinguish between counterclaims used as solely as a “cudgel” and meritorious claims in breach of contract cases. The ruling also underscores the importance of drafting clear release language in a settlement agreement.

In McCarthy v. Genesee & Wyoming Railroad Services, an employee brought a lawsuit against his former employer, alleging that the employer breached the parties’ contract by failing to pay the employee severance benefits. The employer moved to dismiss the complaint, arguing that the contract requires the parties to arbitrate disputes about its enforcement or interpretation. The employee counterargued that the contract, at the very least, is ambiguous. The arbitration provision, according to the employee, conflicts with the contract’s forum-selection provision. That latter provision states that “each party . . . consents to the jurisdiction of a competent court in Massachusetts to hear any dispute arising out of this Agreement.”

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.