2013 Update on Chapter 93A

by Adler Pollock & Sheehan P.C.
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The Law of Chapter 93A (Thomson Reuters) - March 2013

1.  Standard governing liability under 93A

Higher standard applies for business plaintiffs – More decisions confirm that a business plaintiff must make a higher showing of defendant wrongdoing in order to prevail under 93A than would a consumer plaintiff

Small businesses not to get special treatment under 93A – A decision of the SJC rejected the argument of a small business that it should be given the same privileged treatment under 93A as is given to a consumer.

More courts hold against 93A claim where non-93A claim fails – Although 93A was originally expected to expand plaintiffs’ rights, more often now where the related non-93A claim fails courts are also dismissing the 93A claim.

2.  Class claims

Restrictions on standing for class claims – Class claimants can no longer satisfy standing requirements under 93A where they allege a loss which is non-continuing, potential or hypothetical.

Expansion to permit nation-wide 93A class claims – More courts are permitting nationwide class claims alleging 93A violations against Massachusetts businesses as long as 93A does not conflict too much with other state laws or plaintiffs can be arranged into subclasses.

3.  Intellectual property & 93A

Non-competes & Trade secrets – Cases are mixed on whether a departing employee can be liable under 93A for violating a non-compete or misappropriating a trade secret (since 93A generally does not apply to employer-employee disputes).

Copyright – Even though the Copyright Act clearly preempts other related law, a 93A claim premised on copyright infringement can still be brought if it alleges an “extra element.”

Patent – 93A claims against alleged infringers can still be brought if they allege an “extra element,” such as misconduct in the marketplace; 93A claims against patent holders for bad faith enforcement and publication of their patents are not preempted by the Patent Act

Anticompetitive litigation – A 93A claim can brought against a claimed holder of intellectual property rights who in bad faith brings suit against competitors to stifle competition.

4.  Various subjects & 93A

Breach of contract, plus misrepresentations about performance – There will be no 93A liability for a breach of contract, even if the breach is accompanied by misrepresentations, if there are no other damages besides the breach of contract.

Insurance - unfair claims settlement – The SJC has clarified that a willful or knowing failure of an insurance company to settle and pay a claim where liability has become clear can result in punitive damages of double or treble the amount of the full insurance claim, not just the interest on the loss of use of the insurance proceeds.

5.  Defenses to 93A

Contractual shortening of statutes of limitation – A recent decision by the SJC upheld a contractually-agreed 1-year statute of limitations versus the 93A statutory 4-year statute of limitations.

6.  Judge vs. Jury

Can a judge’s 93A decision be contrary to a jury verdict? – Older decisions permitted this.  This practice permitted a party found not liable by the jury in the non-93A part of the case to again be subject to a judge’s decision in favor of liability in the 93A part of the case. This rule is now under review by the SJC and may be changed.

7.  Attorneys fees awarded under 93A

Restrictions on a judge’s discretion in awarding attorney’s fees – Recent decisions require generally that a judge’s award of attorney’s fees to a prevailing 93A plaintiff must be proportional to the 93A judgment amount, whereas older decisions did not require this.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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