Massachusetts General Law 93A, entitled Regulation of Business Practices for the Protection of Consumers, is designed to protect those consumers who would not otherwise know their legal rights. Dough. Gen. Law 93A. As originally drafted, 93A did not create a private right to sue, an issue that was quickly addressed by the legislature, and now both consumers and businesses can use 93A as the basis for asserting their rights through a lawsuit. private right. Unlike other states, Massachusetts’ consumer protection statute establishes an express, rather than an implicit, right to sue companies that feel they have been the victims of a deceptive or unfair act. It’s often easy to spot a consumer protection issue with standard businesses, such as: bait and trade advertising, failure to disclose defects, pricing, faulty warranty claims, and no-negotiation return / refund policies. It becomes much more difficult to determine when a consumer protection claim based on Mass. Gen. Law 93A exists when the business involved is only involved in electronic commerce, and especially when that business is not located within the state.
When evaluating a potential consumer protection claim, it is necessary to keep in mind that the required elements are different for a business and a consumer. A consumer must follow certain procedural and substantive requirements outlined in section 9 of the law. Among other items, section 9 requires a 30-day demand letter, showing that they are in fact a consumer, an unfair or deceptive practice, and a showing of damages.
Businesses, especially online businesses, differ substantially in their required elements. Section 11 establishes the requirements for a 93A commercial claim and requires that a commercial show:
- What are a “business” – [involved in the conduct of any trade or commerce];
- That the defendant engaged in an “unfair competition method” or that the defendant’s actions were “unfair” or “misleading”;
- That these actions occurred primarily and substantially within Massachusetts (the defendant has the burden of rebutting this presumption as a defense); Y
- That these actions resulted in a loss for the commercial plaintiff of money or property, real or personal, for monetary damages to be issued; gold
- That these actions “may have the effect of causing such loss of money or property.”
Dough. Gen. Law 93A
Due to the openness of the internet and the anonymity involved, it can be extremely difficult to prove that a certain method was unfair or misleading. More difficult, especially in the context of an online business, is to show that a certain act has the effect of causing damage or loss. Since online transactions vary in quantity and since the market is continually expanding, it can be extremely difficult to prove a real loss, or even a potential loss. Since each item must be present before filing a claim, the prudent advocate will investigate the facts of the case before initiating a 93A claim. Without the elements properly declared, most judges will dismiss the case at the earliest possible opportunity.
Additionally, online businesses present unique jurisdictional issues that can confuse the use of 93A for consumer protection purposes. For there to be any hope of applying 93A to an online business, the “unfair or deceptive act” must have occurred primarily or substantially within the Commonwealth of Massachusetts. When neither the deceptive / wrongful act nor the harm takes place in MA, a consumer protection claim will be prohibited based on 93A, even if the victim is a Massachusetts resident or business. In the recent Massachusetts Superior Court case of Fillmore v. Leasecomm Corp., the judge dismissed a consumer protection lawsuit filed by a Massachusetts company against a California company because the allegedly deceptive sales tactics and unfair contracts were consummated in California. Fillmore v. Lease Corp., 18 Mass. L. Rptr. 560, 2004 WL 3091642 (Mass. Super. Ct. November 15, 2004). In Fillmore, the plaintiff’s allegations did not pass the “center of gravity” test applied for jurisdictional purposes, so the claim was dismissed. When deciding whether or not to file a consumer protection claim in Massachusetts, it’s best to first look at the act, the damage, and the jurisdiction. The more that occurs within the jurisdiction of Massachusetts, the more likely the claim will be allowed to proceed. However, Massachusetts courts find in favor of Massachusetts companies when all elements are met, including jurisdictional ones. If a contract was to be performed in Massachusetts, and the damages occurred in Massachusetts, then the jurisdictional element will be met and the court will rule for the plaintiff, as the Massachusetts court of appeals did in Auto Shine Car Wash Sys. V. Nice ‘n Clean Car Wash, Inc. At Auto Shine, the parts were frequently located in Massachusetts and the misrepresentation originated in Massachusetts. The court ruled in favor of the plaintiff for double damage, as there was a deliberate and knowing violation of the mass. Gen. Laws ch. 93A 58 Mass. App. Ct. 685 (Mass. Appeals Ct. 2003).
Filing a consumer protection claim presents a substantially higher level of evidence and jurisdictional requirements when your client is a business. Be wary of the consequences and potential waste of time that you can spend filing a claim without all the elements being met. Just because Massachusetts provides an express right for companies to file claims does not mean that judges are willing to overlook even the smallest discrepancies in pleading requirements.