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The High Burdens of an Anti-SLAPP Motion to Dismiss: Bristol Asphalt Co., Inc. v. Rochester Bituminous Prods., Inc., No. 21-P1135, 2023 WL 3134396 (Mass. 2023)
May 2023 • Source: Melick & Porter
A motion to dismiss filed under the Massachusetts anti-SLAPP statute creates great obstacles for plaintiffs. This was recently demonstrated in Bristol Asphalt Co., Inc. v. Rochester Bituminous Prods., Inc., No. 21-P1135, 2023 WL 3134396 (Mass. 2023). In Bristol Asphalt Co., Inc., the plaintiff brought a multi-charge anticompetition suit against the defendant alleging that the defendant had, on three separate occasions, filed petitions to block the development of the plaintiff’s concrete plant resulting in a decade long delay to development, nearly $12 million in lost profits and hundreds of thousands of dollars in legal fees. The plaintiff responded by filing a special motion to dismiss under G. L. c. 231 §59H (commonly known as the anti-SLAPP statute).
To evaluate the merits of such a special motion to dismiss, courts will apply the burden-shifting framework first established in Duracraft Corp. v. Holmes Prods. Corp., 427 Mass. 156 (1998) and modified in Blanchard v. Steward Carney Hosp., Inc., 477 Mass. 141, 159-60 (2019). The burden-shifting framework consists of two stages. In the first stage, the movant, the party making the motion, “must make a threshold showing . . . that the claims against it ‘are “based on” the petitioning activities alone and have no substantial basis other than or in addition to the petitioning activities.’” After the movant meets its burden, the burden shifts to the nonmovant. In the second stage, the nonmovant can satisfy its burden via two paths: either (1) establish, by a preponderance of the evidence, that the movant “lacked any reasonable factual support or any arguable basis in law” for their petitioning activity and that the petitioning activity caused the nonmoving party actual injury; or (2) establish that the nonmovant’s “claim is not a ‘meritless’ SLAPP suit ‘brought primarily to chill the special movant’s . . . legitimate petitioning activities.’”
Here, the first stage was satisfied as the plaintiff conceded that its claims against the defendant were based solely on the defendant’s petitioning activities. As such, the burden shifted to the plaintiff.
The Court then considered all three instances of defendant petition to determine if the petitions were void of any reasonable factual or legal basis. The first defendant petition was to the town planning board challenging the board’s approval of the site plan. The defendant asserted two arguments: (1) the site would increase noise levels leading to a decrease in value of the surrounding property and (2) construction on the site would lead to traffic issues as trucks congest the road. The Court found both arguments were without any factual or legal basis. The noise level issue was already addressed by the town planning board as they conditioned site approval on the site’s compliance on DEP noise regulations. The traffic issue was also without basis as the defendant’s evidence was based in assumed facts rather than any facts specific to the site.
In the second defendant petition, the defendant challenged an extension order issued by the town conservation committee to give the plaintiff more time to perfect their incomplete notice of intent. The defendant petitioned to require the plaintiff to restart the entire process as too much time had passed since the initial filing of the notice. The Court found the petition without basis as the defendant’s petition was based solely on the passage of time rather than any new information which rendered the prior filing or notice inadequate.
In the third defendant petition, the defendant filed a fail-safe review under the Massachusetts Environmental Policy Act (“MEPA”). Again, the Court found the petition meritless as the defendant did not produce any evidence that the plant would cause any damage the MEPA is concerned with or that MEPA review was essential to avoid or minimize environmental impact of the plant.
As all three defendant petitions were without actual evidence or based upon assumed facts and resulted in massive losses to the plaintiff, the plaintiff met their burden under the second stage of the burden-shifting framework. As a result, the Court affirmed the lower court’s denial of the defendant’s special motion to dismiss.
This decision underscores the high bar that the nonmovant needs to meet when faced with the second stage of a special motion to dismiss under the G. L. c. 231 §59H and the courts desire to prevent the use of frivolous petitions to impede competition. If you have any question about these issues, Melick & Porter’s team of experienced attorneys are always available to help.
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The Holes in the Charitable Immunity Shield: Wolfe v. Budzyna, 102 Mass. App. Ct., 1116 (2023)
May 2023 • Source: Melick & Porter
The Charitable Immunity Statute in Massachusetts is not a blanket shield to officers of non-profit organizations. In Wolfe v. Budzyna, 102 Mass. App. Ct., 1116 (2023), the Massachusetts Appeals Court affirmed the denial of the employer’s motion for summary judgment in favor of the employees in a case alleging unpaid wages under the Massachusetts Wage Act. The employees of a nonprofit organization filed suit under the Massachusetts Wage Act alleging that the nonprofit’s officers intentionally harmed the employees by promising wages while directing the organization’s funds to third party vendors, despite knowing that the organization was on the verge of bankruptcy.
In most unpaid wage claims, the Massachusetts Wage Act imposes liability for unpaid wages on the employer and their officers. However, there is an applicable defense if the organization is a nonprofit. The Charitable Immunity Statute protects uncompensated officers of a nonprofit organization from any liability arising from civil suits “as a result of any acts or omissions related solely to the performance of his duties as an officer.” In other words, individuals are shielded from the Massachusetts Wage Act if (1) they are officers of a nonprofit organization; (2) they are not compensated for their service; and (3) the officers withheld wages while executing their official duties.
The Charitable Immunity Statute might seem encompassing, but there are exceptions to the rule. Any acts or omissions by officers “intentionally designed to harm” or are “grossly negligent . . . which result in harm to the person” are precluded from the statute’s protection.
Here, the defendants easily satisfied the elements of the Charitable Immunity Statute: (1) they were treasurers of a nonprofit organization, the Boston Children’s Theater; (2) they were not compensated for their services; and (3) they directed company funds to third party vendors instead of the employees as part of their official duties. However, the Massachusetts Appeals Court ruled that the statute was inapplicable to the defendants because their actions constituted “an intentional design to harm employees.”
The court reached this conclusion by comparing this case to Lynch v. Crawford, where the court found the president’s actions constituted “an intentional design to harm employees by failing to pay them the wages they were due.” 483 Mass. 631, 644 (2019). In both cases, the officers (1) personally promised employees that they would be paid; (2) knew that the organization would not make payroll; and (3) chose to direct funds to outside vendors instead of to employees. As such, the court followed the precedent and affirmed the denial of the defendants’ motion for summary judgment.
This decision underscores the desire of the court to provide and protect employees’ ability to collect wages ahead of corporate interests such as paying third party vendors. If you have questions about these issues, Melick & Porter’s team of experienced employment law attorneys are always available to help. |
Exclusive: How AmTrust Uses Performance Data to Select Panel Counsel in 2023
May 2023 • Source: Litify
How can your firm stand out among the competition? Verifiable performance data.
In this exclusive executive interview, AmTrust Assistant Vice President of Litigation Dan Jacobs shares how panel counsel is evaluated, selected — and rewarded with more files — using the firm’s key performance metrics. From shared dashboards to a custom-built tool that auto-ranks panel counsel, see how AmTrust is using Litify to blaze a new trail for the future of claims technology. [Watch On-Demand Now] |
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Melick & Porter Achieves Appellate Victory On Multimillion-Dollar Contractual Indemnification Claim
May 2023 • Source: Melick & Porter
In an appeal handled by the appellate team of michael Byrne, Bob Powers, & Michael Mazurczak of Melick & Porter, the Massachusetts Appeals Court recognized that a literal interpretation of an overly broad contractual indemnification provision would lead to “absurd results,” and ruled that a business consultant who provided financial and marketing services to the owner of a parking garage was not obligated to indemnify the owner for a multimillion-dollar verdict arising out of negligent security. In K.W. v. LAZ Parking Limited, LLC, 102 Mass. App. Ct. 1115 (2023), the Court affirmed a judgment holding that the parties could not have intended for the indemnification provision to apply, notwithstanding its expansive language.
The case arose out of a rape which occurred in a downtown Boston parking garage adjacent to a hotel. The plaintiff, K.W., filed a negligent security action against the entities which owned and managed the garage, as well as LAZ Parking, which acted as a consultant to the garage manager (JPA I). After a trial, the jury found the owner and manager liable and awarded the plaintiff $4 million in damages. LAZ was not found to have been negligent.
Under their agreement, LAZ provided JPA I with advice on financial issues, staffing, equipment and pricing, but was not involved in the day-to-day operations of the garage. Both LAZ and JPA I agreed that LAZ played no role in security matters. Nevertheless, the contract included an indemnification provision which called for LAZ to indemnify JPA I for “any and all liability … arising from … injuries to persons … that arise from the conduct or actions of the servants, agents or employees of any person.” Claiming that the provision broadly applied to any liability connected to the operation of the garage, JPA I sought indemnity from LAZ. The Superior Court ruled that the provision could not plausibly be interpreted to apply as written, and concluded that the parties did not intend for it to apply to a claim arising out of garage security. JPA I appealed, and the Appeals Court affirmed.
Noting that a literal reading of the provision “would require LAZ to indemnify JPA I for losses having nothing to do with the garage whatsoever,” and that such a sweeping obligation could not be reconciled with the limited consulting services LAZ provided to assist JPA I in the management of the garage, the Appeals Court ruled that the agreement was ambiguous. Thus, the Court looked to the context of the contract as a whole, the history of the relationship, and the testimony of the parties to determine their shared intent. Based on this evidence – including the fact that JPA I had never sought indemnity from LAZ for any prior claim, and had not even notified LAZ of a prior sexual assault committed in the garage by the same assailant twelve days before the attack on K.W. – the Court concluded that the contractual indemnification provision was not intended to apply.
The decision demonstrates that the language of a contract cannot always be taken at face value, and underscores the importance of carefully drafted risk-shifting provisions. If you have questions about contractual indemnification issues or negligent security liability, Melick & Porter’s experienced attorneys are always available to help. |
Court Reinstates Independent Contractor Exception for Uber Drivers
May 2023 • Source: John H. Shaffery, Poole Shaffery
Proposition 22 was approved by voters in California in November 2020. It exempted app-based drivers from a 2019 state law known as AB5 that makes it difficult to classify workers as independent contractors rather than employees. It allows app-based transportation services to classify drivers as independent contractors as long as they are paid a minimum wage while transporting passengers and receive expense reimbursements and healthcare subsidies. For hundreds of thousands of drivers, Proposition 22 awarded independent contractor status but took away protections requiring gig workers across many industries to be classified as employees with stronger benefits such as a minimum wage, overtime and workers’ compensation in case of injury.
On March 13, 2023, the California Court of Appeals reversed a 2021 lower court ruling that struck down Proposition 22 on the basis that it violated the state constitution because it limited the legislature's power to include gig drivers within the scope of California workers' compensation law. The appeals court disagreed with that opinion and mostly upheld the provisions of Proposition 22, except for a provision enabling gig workers to join unions. The appeals court severed provisions of Proposition 22 restricting the California Legislature’s ability to authorize collective bargaining over drivers’ compensation, benefits, or working conditions and create rules singling out or otherwise putting unequal regulatory burdens upon app-based drivers.
Proposition 22 has remained in effect throughout the appeals process, and ride-sharing apps, including Uber and Lyft, can continue to treat their drivers as independent contractors. This represents a major victory for such companies because independent contractors do not receive the same legal protections as employees and can be up to 30% cheaper. Immediately after the Court of Appeals decision upholding Proposition 22, shares of Uber and Lyft rose by nearly 5%. However, the ruling is expected to be appealed to the California Supreme Court, so it remains to be seen how the ongoing Proposition 22 saga will develop. |
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