Massachusetts SJC Affirms That Claims Based On Willful Or Knowing Chapter 93A Violations Are Not Precluded By Contractual Limitation Of Liability Provisions
Published date | 07 February 2022 |
Law Firm | Potomac Law Group |
Author | Mr John R. Snyder |
The Massachusetts Consumer Protection Act, Massachusetts General Laws chapter 93A (a/k/a Regulation of Business Practices for Consumers Protection), enacted in 1969, provides two varieties of private right of action. The first, in section 9, concerns unfair and deceptive business practices that harm consumers. The second, in section 11 (added in 1972), concerns unfair and deceptive practices inflicted by a business upon another business. One or the other cause of action is frequently invoked in litigation (and arbitrations) filed in Massachusetts. Chapter 93A, and in particular the two private rights of action, have been the subject of many appellate decisions over the years, as the courts have struggled to give definition and structure to the statute's broad terms. One would be tempted to think that, after more than fifty years, all conceivable issues would have been resolved by now.
Massachusetts's highest appellate court, the Supreme Judicial Court ("SJC"), recently engaged in some rethinking on a Chapter 93A wrinkle: the extent to which Chapter 93A liability may be limited or excluded by means of a contractual provision. Before explicating that decision, another aspect of Chapter 93A private rights of action should be explained: Pursuant to section 9(3), a court must award "up to three but not less than two times [the amount of actual damages] if the court finds that the use or employment of the act or practice was a willful or knowing violation of . . . section two [which declares unlawful 'unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce'] or that the [defendant's] refusal to grant relief upon [plaintiff's statutorily required] demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said section two"'unless the violative "method, act or practice . . . [was] with regard to any security or any contract of sale of a commodity for future delivery," in which case multiple damages may not be awarded regardless of whether the violation was willful or knowing or a reasonable demand was refused by defendant in bad faith.
The same rules apply to actions under section 11, except that (i) pre-suit demand is not required'a defendant may make an offer of settlement accompanying its answer; if the plaintiff rejects such an offer the court later finds to have been reasonable the plaintiff may not be awarded multiple damages, and (ii) actions...
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