Ruling on an issue of first impression in Massachusetts, Judge Kaplan determined that he had authority under Mass. R. Civ. P. 12(f) to strike class allegations from a complaint. Judge Kaplan framed the issue this way: “[T]he practical issue raised by [the defendant’s] motion [to strike] is whether there are sufficient facts pled in the Complaint to permit the class claims to proceed and the plaintiff to take class discovery from [the defendant].” Noting the absence of any Massachusetts cases addressing the issue, Judge Kaplan turned to Federal law and followed the First Circuit’s decision in Manning v. Boston Medical Center Corp., 725 F.3d 34 (1st. Cir. 2013). “In reliance of the federal court decisions interpreting Rules 23 and 12(f),” Judge Kaplan wrote, “this court concludes that . . . a Massachusetts trial court can dismiss class allegations under Mass. R. Civ. P. 12(f).”
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).
As we previously noted, Judge Kaplan invalidated a directive issued by the Massachusetts Department of Revenue (DOR). Directive 17-1 would have required internet vendors outside of Massachusetts to collect and remit sales taxes to the DOR where certain thresholds of product sales into Massachusetts were met. Judge Kaplan ruled that because the directive substantially altered the rights and interests of internet vendors, the directive amounted to an improperly imposed regulation. That was chapter one.
In the American Catalog litigation, Judge Kaplan invalidated a directive issued by the Massachusetts Department of Revenue (DOR).
This summer, the Boston Bar Association hosted its annual “Business Litigation Session Year in Review.” The current BLS bench—Judges Sanders, Salinger, Kaplan, and Liebensperger—shared tips for attorneys practicing in the BLS. Here are four takeaways from that event:
Judge Kaplan reported the following question to the Massachusetts Appeals Court: “May a government agency invoke a termination for convenience clause contained in a procurement contract for the purchase of goods for the sole reason that it has learned of an opportunity to purchase the same goods at a lower price from another vendor?”
The question arose in a dispute between A.L. Prime Energy Consultant, Inc. (Prime) and the MBTA. In July 2015, Prime was awarded a two-year supply contract to provide the MBTA with Ultra Low Sulfur Diesel Fuel (ULSDF) after a public bidding process. A year later, the MBTA terminated the contract under the termination-for-convenience clause.
Considering the rights of parties involved in a soured business relationship, Judge Kaplan reiterated that a binding contract requires an agreement on the material terms and an intent to be bound. A term sheet that does not represent an attempt to formalize an already established agreement is not an enforceable contract.
In OpenRisk, LLC v. Microstrategy Services Corp., et al., Judge Kaplan declined to adopt a conspiracy theory of personal jurisdiction. Judge Kaplan framed the issue this way:
- Senior Editor, Co-Chair, Business Litigation Practice Group