Massachusetts General Law 93A, entitled Business Practices Regulations for the Protection of Consumers, is designed to protect consumers who may not otherwise be aware of their legal rights. Dough. General Law 93A. As originally drafted, 93A did not create a private right to sue, an issue the legislature quickly addressed, and now both consumers and businesses can use 93A as a basis for asserting their rights through a right to sue. private. Unlike other states, the Massachusetts consumer protection statute establishes an explicit, rather than implied, right to sue businesses that they feel they have been the victim of a deceptive or unfair act. It is often easy to spot a consumer protection issue with standard companies, such as: bait-and-switch advertising, failure to disclose defects, pricing, faulty warranty claims, and non-negotiated return/refund policies. It becomes much more difficult to determine when a consumer protection claim based on Mass. General Law 93A exists when the business involved is solely engaged in electronic commerce, and especially when that business is not located within the state.
When evaluating a possible consumer protection claim, it is necessary to keep in mind that the elements required are different for a business and a consumer. A consumer must follow certain substantive and procedural requirements outlined in section 9 of the Act. Among other items, section 9 requires a 30-day demand letter, a showing that you 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 sets out the requirements for a 93A business claim and requires a business to demonstrate:
- What are a “business” – [involved in the conduct of any trade or commerce];
- That the defendant engaged in an “unfair method of competition” or that the defendant’s actions were “unfair” or “deceptive”;
- That these actions occurred primarily and substantially within Massachusetts (the defendant bears the burden of rebutting this presumption as a defense); Y
- That these actions resulted in a loss to the claimant business of money or property, real or personal, for damages in money to be issued; Prayed
- That these actions “may have the effect of causing such loss of money or property.”
Dough. General 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 proving that a certain act has the effect of causing harm or loss. Because online transactions vary in amount and because the market is continually expanding, it can be extremely difficult to prove actual loss or even the possibility of loss. Since each element must be present before filing a claim, the prudent attorney will investigate the facts of the case before filing a 93A claim. Without the elements duly argued, most judges will dismiss the case at the earliest possible opportunity.
Additionally, online businesses present unique jurisdictional issues that may confound 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 deception/unfair act nor the harm occurs in MA, a consumer protection claim based on 93A will be barred, 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. Leasingcomm corporation, 18 Mass. L.Rptr. 560, 2004 WL 3091642 (Mass. Super. Ct. Nov. 15, 2004). In fill more, the plaintiff’s allegations did not pass the ‘center of gravity’ test applied for jurisdictional purposes and therefore the claim was dismissed. When deciding whether or not to file a consumer protection claim in Massachusetts, it is best to first look at the act, the harm, and the jurisdiction. The more that occurred within the jurisdiction of Massachusetts, the more likely it is that the claim will be allowed to proceed. However, Massachusetts courts rule in favor of Massachusetts companies when all elements, including jurisdictional ones, are met. If a contract was to be performed in Massachusetts and the damages occurred in Massachusetts, then the jurisdictional element will be satisfied and the court will find in favor of the plaintiff, as the Massachusetts appellate court did in Auto Shine Car Wash Sys. Nice ‘n Clean Car Wash, Inc. In Auto Shine, the parties frequently met in Massachusetts and the misrepresentation originated in Massachusetts. The court found in favor of the plaintiff for double damages, since there was a willful and knowing violation of the Mass. general Laws chap. 93A 58 Mass. application. Court 685 (Massachusetts Court of Appeals 2003).
Filing a consumer protection claim introduces a substantially higher level of evidence and jurisdiction requirements when your client is a business. Beware of the consequences and potential loss of time you can use by filing a claim without complying with all elements. The fact that Massachusetts provides an express right for companies to file claims does not mean that judges are willing to overlook even the smallest discrepancies in the filing requirements.