United States: Key Updates Regarding the Massachusetts Consumer Protection Act – Chapter 93A

Brett D. Carroll and Michael T. Maroney are Partners in our Boston office .


  • Litigation involving claims of unfair or deceptive business practices under Chapter 93A of the Massachusetts General Laws remain a favorite for the plaintiffs' bar, particularly given the potential recovery under the statute for multiple damages and attorneys' fees.
  • Companies doing business in Massachusetts should be cognizant of how Chapter 93A claims are being used in their industry, as well as the various efforts to expand liability and damages for violations of the statute.
  • Courts have recently issued several significant decisions in this area, including ones that impact consumer pre-suit notice requirements, whether postjudgment interest can be included in the amount of a judgment to be multiplied and whether Chapter 93A demand letters are the functional equivalent of filing a lawsuit.

Litigation involving claims of unfair or deceptive business practices under Chapter 93A of the Massachusetts General Laws is constantly evolving, and these claims remain a favorite for the plaintiffs' bar, particularly given the potential recovery under the statute for multiple damages and attorneys' fees. Companies that do business in Massachusetts need to be cognizant of how Chapter 93A claims are being used in their industry, as well as the various efforts to expand liability and damages for violations of the statute. Below is a summary of some key recent decisions in this area.

Consumer Pre-Suit Notice Requirements

In late December 2016, the Massachusetts Supreme Judicial Court (SJC) provided further clarification concerning when a consumer must send a pre-suit demand letter to a business allegedly engaged in unfair and deceptive trade practices. The Court concluded that, consistent with the express statutory language under Chapter 93A, a consumer is not required to send a pre-suit letter in order to maintain a claim if the relevant company either does not have a place of business in Massachusetts or does not have assets in Massachusetts.

In Moronta v. Nationstar Mortgage, LLC, 476 Mass. 1013 (2016), the Court considered whether a mortgagor was required to give his mortgage servicer a demand letter 30 days prior to filing suit in order to allow the business the opportunity to respond to the allegations with a reasonable settlement offer. Typically, most attorneys understood, or at least followed, the practice that to file a consumer suit under Chapter 93A and have the ability to collect multiple damages and fees, the consumer must serve a pre-suit demand letter on the defendant. After being served, the business/defendant had 30 days to prepare a response with a reasonable settlement offer. If the business/defendant failed to do so, it could be punished for allegedly failing to make a good faith effort to resolve the matter early.

The mortgage servicer argued that the complaint should have been dismissed because the consumer had failed to send a pre-suit demand letter. The consumer argued that, pursuant to the unambiguous language of the statute, a pre-suit demand is unnecessary if either: a) the business does not have an office in Massachusetts, or b) the business has no assets in Massachusetts.

The SJC – employing the long-held rule that "a statute must be interpreted according to the intent of the Legislature ascertained from all its words construed by the ordinary and approved usage ..." – concluded that the plain language of Chapter 93A §9(3) required only that the defendant either "not maintain a place of business" or "not keep assets within the Commonwealth ... " and stated that the absence of "either [prong] would be sufficient on its own and that it is not necessary to establish both." The Court concluded that a contrary result would be inconsistent with 93A's purpose as a "broad remedial statute" intended to "deter misconduct" and "to encourage vindictive lawsuits" since the consumer would be obligated to "undertake the formidable task of verifying the [business] has no assets in Massachusetts before being relieved" of the burden of sending a demand.

The impact of this decision is more significant than simply whether a consumer's claim can be dismissed pre-suit if the notice is not served. Instead, if an out-of-state company has no office in Massachusetts (or no assets – which is typically more difficult to assert), the business may have limited ability to try to resolve the matter pre-suit, or limit the award of multiple damages or fees. Instead, as the SJC noted, the business can otherwise "employ the provisions of [93A and try to limit multiple damages and fees] by making a written offer of relief and paying the rejected tender into court as soon as practicable after receiving notice of an action commenced ..." In other words, only after the suit is filed can a business respond with a settlement offer. But, unlike in the pre-suit phase, the business must pay into the court registry the "rejected tender." This is a burden some companies may not want to incur, especially if the "offer" is relatively substantial.

Postjudgment Interest Not Part of Multiple Damages Award

In February 2017, the SJC held that postjudgment interest should not be included in the amount of the judgment to be doubled or trebled for a willful or knowing violation of Chapter 93A. See Anderson v. National Union Fire Ins. Co., SJC-12108, 2017 WL 445244, at *1 (Mass. Feb. 2, 2017).

In Anderson, the plaintiffs filed a personal injury action for serious injuries suffered after one of the plaintiffs was struck by a bus owned by Partners HealthCare Systems Inc. (Partners). The plaintiffs sought to reach a settlement with Partners' insurers but the insurers rejected the plaintiffs' demand and declined to enter into settlement negotiations. After the plaintiffs obtained a multimillion-dollar jury verdict in the personal injury action, they filed a separate action against the insurers for unfair and deceptive insurance settlement practices in violation of M.G.L. Chapter 176D, §3, and Chapter 93A, §9(3).

The Superior Court judge found that the defendants violated Chapter 176D, §3(9)(d) by failing to conduct a reasonable investigation; by failing to effectuate a prompt, fair and equitable settlement in which liability had become reasonably clear; and by pursuing an unreasonable appeal of the underlying personal injury judgment. The judge also concluded that these violations were willful and egregious, warranting an award of punitive damages under Chapter 93A, §9(3). Accordingly, he awarded the plaintiffs treble damages, using the combined amount of the underlying tort judgment and the accrued postjudgment interest on that judgment as the "amount of the judgment" to be multiplied.

The issue before the SJC was whether postjudgment interest was properly included in the "amount of the judgment" to be multiplied under Chapter 93A, §9(3). The Court concluded that it was not. The Court reasoned that, although prejudgment interest is added to the underlying amount of damages and becomes an integral part of the judgment itself, postjudgment interest is separate and distinct from the underlying amount of damages because it serves to provide compensation to a prevailing party for delay in payment after the underlying obligation has been established.

Chapter 93A Demand Letters Not Functional Equivalent of a Suit

In another case that should be of interest to insurers and insureds, the U.S. Court of Appeals for the First Circuit in December 2016 declined to hold that Chapter 93A demand letters are the functional equivalent of filing a lawsuit. See Sanders v. Phoenix Ins. Co, 843 F.3d 37 (1st Cir. 2016).

In Sanders, the homeowners insurance policy at issue provided the insurer with a duty to defend, which applied to lawsuits, and a right to investigate, which applied to both lawsuits and claims. Based on the policy language, the insurer claimed that it had no obligation to provide a defense in the absence of a suit. The plaintiff argued that his pre-suit Chapter 93A demand letter triggered the duty to defend because it was similar to a notice letter under the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), which the SJC held in Hazen Paper Co. v. U.S. Fid. & Guar. Co., 407 Mass. 689 (1990) triggered a duty to defend. The First Circuit rejected the plaintiff's argument, noting that the SJC's decision in Hazen Paper was narrow and case specific, and that Chapter 93A demand letters are more comparable to demand letters sent in garden-variety personal injury actions. Because a suit was never filed triggering the insurer's duty to defend, the First Circuit affirmed the dismissal of the plaintiff's complaint.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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