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SJC-12035

SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 509 vs. 

DEPARTMENT OF MENTAL HEALTH & others.

1

Suffolk. September 6, 2016. - November 22, 2016.

Present: Gants, C.J., Botsford, Lenk, Hines, Gaziano, Lowy, & 

Budd, JJ.

Privatization Act. Commissioner of Mental Health.

Commonwealth, Contracts. Contract, Validity. Public 

Employment. Laches. Practice, Civil, Judgment on the 

pleadings.

Civil action commenced in the Superior Court Department on 

February 15, 2012.

Following review by this court, 469 Mass. 323 (2014), the 

case was heard by Janet L. Sanders, J., on motions for judgment 

on the pleadings.

 

1 Advocates, Inc.; Alternatives Unlimited, Inc.; Bay Cove 

Human Services; The Bridge of Central Mass, Inc.; Brien Center, 

Brockton Area Multi Services, Inc.; Carson Center for Human 

Services; Center for Human Development, Inc.; Community 

Counseling of Bristol County; Community Healthlink, Inc.; 

Edinburg Center, Inc.; Eliot Community Human Services, Inc.; 

Fellowship Health Resources, Inc.; Mental Health Association of 

Greater Lowell, Inc.; North Suffolk Mental Health Association; 

Riverside Community Care, Inc.; Servicenet, Inc.; South Shore 

Mental Health Center, Inc.; and Vinfen Corporation.
2

The Supreme Judicial Court granted an application for 

direct appellate review. 

Ian O. Russell (Katherine D. Shea with him) for the 

plaintiff.

Iraida J. Álvarez, Assistant Attorney General, for 

Department of Mental Health.

Carl Valvo & Ariel G. Sullivan, for Advocates, Inc., & 

others, were present but did not argue.

Mark G. Matuschak & Robert Kingsley Smith, for Pioneer 

Institute, Inc., were present but did not argue.

Anita S. Lichtblau & Robert E. Cowden, III, for 

Massachusetts Council of Human Services Providers, Inc., & 

others, amici curiae, submitted a brief.

LENK, J. This is the second time that the plaintiff labor 

union appeals from dismissal of the declaratory judgment action 

it first brought against the Department of Mental Health (DMH or 

agency) in 2012. Service Employees International Union, Local 

509 (SEIU or union) maintains that certain contracts DMH made in 

2009 with private vendors are "privatization contracts" subject 

to the requirements of the Pacheco Law, G. L. c. 7, §§ 52-55.

The Pacheco Law establishes certain prerequisites that agencies 

must meet when seeking to enter into privatization contracts. 

Because DMH had determined that the subject contracts were not 

privatization contracts, however, it did not comply with those 

statutory prerequisites. In bringing this action, the union 

seeks, among other things, a declaration invalidating the

contracts on the basis of G. L. c. 7, § 54 (§ 54), which 
3

provides that no privatization contract "shall be valid" where 

an agency did not follow the necessary procedures.

In our previous decision in this case, Service Employees 

Int'l Union, Local 509 v. Department of Mental Health, 469 Mass. 

323, 324 (2014) (SEIU I), we rejected DMH's contention that the 

union lacked standing to challenge, in a declaratory judgment 

action, the agency's unilateral determination that the contracts 

were not privatization contracts. While recognizing that the 

Pacheco Law does not expressly provide a private right of 

action, we also recognized that the Legislature did not 

contemplate the situation presented there (and here), in which

an agency determines on its own that it need not comply with the 

requirements of the statute. Id. at 335-336. Because 

unreviewable agency decision-making on such a matter would 

thwart legislative intent, we concluded that in these 

circumstances "declaratory judgment is an appropriate vehicle 

for relief to ensure that agencies may not evade the 

requirements of the Pacheco Law with impunity." Id. at 336. We 

accordingly vacated the judgment of dismissal and remanded the 

case to allow joinder of necessary parties.

2 Id. at 339.

 

2 The Superior Court judge had determined, and we agreed, 

that the initial complaint did not include all necessary 

parties. Service Employees Int'l Union, Local 509 v. Department 

of Mental Health, 469 Mass. 323, 338-339 (2014) (SEIU I). On 

remand, SEIU filed an amended complaint joining those parties.
4

While SEIU I was under advisement in this court, however, 

the five-year term of the subject contracts drew to an end and, 

pursuant to the provisions of those contracts, DMH exercised 

options renewing them for successive one year periods.3

Following our decision in SEIU I and the amendment of the 

complaint, DMH again successfully moved to dismiss the union's 

declaratory judgment action, this time asserting it was moot.

The basis for the dismissal was two-fold: first, the action was

moot as to the now-expired 2009 contracts, and, second, the 

remaining extant renewal contracts were immune from challenge by 

virtue of G. L. c. 7, § 53 (§ 53) ("any agreement renewing . . . 

a privatization contract[] shall not be considered a 

privatization contract"). The union appealed, asserting, in 

essence, that because the non-compliant 2009 initial contracts 

are invalid under § 54, so too are any renewal contracts made 

pursuant to them.

We are thus called upon to construe §§ 53 and 54 as they 

apply in these unusual circumstances. Cognizant that the 

Pacheco Law only contemplates the situation, unlike this one, 

where an agency recognizes a potential privatization contract as 

 

3 The 2009 contracts were for a period of five years, 

expiring in 2014. They provided the Department of Mental Health

(DMH) three unilateral options to renew for periods of one year 

each.
5

such and acts in compliance with the statutory requirements to 

assure its validity, see, e.g., SEIU I, 469 Mass. at 329-330; 

Massachusetts Bay Transp. Auth. v. Auditor of the Commonwealth, 

430 Mass. 783, 784-787 (2000) (MBTA), we interpret §§ 53-54 with 

that framework in mind. Fidelity to the intent and purpose of 

the Legislature in enacting the Pacheco Law, evident in both the 

plain language of the statute when read as a harmonious whole,

and the legislative history, requires that the protection 

afforded renewal contracts by § 53 not be extended to those 

renewal contracts made pursuant to timely challenged and 

subsequently invalidated privatization contracts under § 54. We 

accordingly vacate the judgment of dismissal.

1. Background. The following facts are taken from SEIU's 

amended complaint, which, at this stage, we assume to be true,

see, e.g., Iannacchino v. Ford Motor Co., 451 Mass. 623, 636 

(2008), supplemented by undisputed facts in the record.

4 For 

more than fifteen years, DMH had employed case managers to 

provide services to individuals with mental illness. In 

late 2008 and early 2009, DMH initiated a new program, the 

Community Based Flexible Supports program, that was intended to 

 

4 The allegations in the amended complaint are materially 

identical to those in the initial complaint. See Service 

Employees Int'l Union, Local 509 v. Department of Mental Health, 

469 Mass. 323, 324,326 (2014) (SEIU I).
6

provide similar but more personalized services to DMH clients. 

As part of the Community Based Flexible Supports program, DMH 

entered into agreements with nineteen private organizations to 

provide services substantially similar to those previously 

provided by the case managers. Over the same period, DMH laid 

off approximately eighty case managers. DMH unilaterally 

determined that these new contracts were not "privatization 

contracts" within the meaning of the Pacheco Law and therefore 

did not attempt to follow any of the procedures that the law 

requires when an agency intends to privatize a service. 

Sometime in 2009, SEIU notified the Auditor of the 

Commonwealth of DMH's intent to enter into the contracts and the 

union's objections to the contracts. The Auditor's office

undertook an investigation and, in September, 2010, the 

Auditor's general counsel sent DMH, SEIU, and the Attorney 

General a letter and memorandum stating that the contracts 

"[had] the effect . . . of privatizing services previously 

performed by public employees," and therefore should have been 

submitted for review prior to taking effect. The Auditor's 

office told the Office of the Attorney General "to take whatever 

steps [the Attorney General felt] were appropriate," but the 

Attorney General's office did not take any action. 

Having failed to obtain relief through administrative 

channels, the union filed its initial complaint in 2012. As 
7

discussed, a Superior Court judge dismissed that complaint for 

lack of standing; we vacated the decision, concluding that the 

union did have standing, and remanded for further proceedings. 

On remand, a different Superior Court judge dismissed the 

amended complaint, this time as moot; SEIU appealed, and we 

granted direct appellate review.

2. Discussion. We have discussed at some length in prior 

decisions the statutory framework, purpose, and history of the 

Pacheco Law. See SEIU I, 469 Mass. at 329-330; MBTA, 430 Mass. 

at785-787. In brief, G. L. c. 7, § 52 (§ 52), sets forth the 

purpose of the law:

"The [G]eneral [C]ourt hereby finds and declares that 

using private contractors to provide public services 

formerly provided by state employees does not always 

promote the public interest. To ensure that citizens of 

the [C]ommonwealth receive high quality public services at 

low cost, with due regard for the taxpayers of the 

[C]ommonwealth and the needs of public and private workers, 

the [G]eneral [C]ourt finds it necessary to regulate such 

privatization contracts in accordance with [the rest of the 

law]."

In addition to defining several key terms, the other three 

sections of the law, set forth both the procedures that agencies 

must follow when seeking to enter into privatization contracts 

and describe the independent review process that the Auditor is 

to conduct of a proposed privatization contract upon receiving 

from the agency specified information and a certification of 

compliance with those prerequisites.
8

Section 53 defines "privatization contract" as follows: 

"[A]n agreement or combination or series of agreements 

by which a non-governmental person or entity agrees with an 

agency to provide services, valued at [an amount to be 

adjusted for inflation, currently $500,000, or more] which 

are substantially similar to and in lieu of, services 

theretofore provided, in whole or in part, by regular 

employees of an agency." 

It excludes from the definition "[a]ny subsequent agreement, 

including any agreement resulting from a rebidding of previously 

privatized service, or any agreement renewing or extending a 

privatization contract."5 Id. Section 54 makes plain that "[n]o 

agency shall make any privatization contract and no such 

contract shall be valid unless the agency [follows requisite 

procedures]." This point is underscored in G. L. c. 7, § 55

(§ 55), which sets forth the consequence of the Auditor's 

objection to a proposed contract: "An agency shall not make any 

privatization contract [to which the auditor objects] and no 

such contract shall be valid."

DMH contends that, even if the initial 2009 contracts were 

deemed invalid, the now fully performed contracts should not be 

deemed void. It is DMH's view that the renewal contracts would 

remain unaffected even in the face of such a declaration because 

 

5 In addition to renewal contracts, certain contracts for 

services such as information technology, legal services, 

consulting, engineering, or design are excluded from the 

definition of "privatization contract." G. L. c. 7, § 53.
9

renewal contracts are not privatization contracts by definition, 

and therefore need not comply with Pacheco Law requirements.

Accordingly, in its view, the renewal contracts cannot be set 

aside by virtue of either their own noncompliance with such 

requirements or that of the predecessor contracts. The union 

maintains, by contrast, that the invalidity of the initial 

privatization contracts requires that they be set aside as void,

that they could not give rise to validly exercised options to 

renew and therefore that such renewal contracts are themselves 

void. Section 53, the union argues, does not provide a safe 

harbor immunizing such renewal contracts from the consequences 

of predecessor agreements' invalidity.

Assuming, as we must at this stage, that the contracts DMH 

entered into with private vendors in 2009 were privatization 

contracts

6 and that, pursuant to § 54, "no such contract shall be 

valid," the questions we must resolve are these. Is the 

consequence of declaring a non-compliant privatization contract

invalid to render it void and of no effect? If the answer is in 

the affirmative, are renewal contracts that are entered into 

 

6 The question whether the services provided through the 

Community Based Flexible Supports program are substantially 

similar to those provided by case managers, and therefore 

whether the contracts were, in fact, privatization contracts 

under the Pacheco Law, has not been determined, see SEIU I, 469 

Mass. at 325 n.4, and we do not reach it today.
10

pursuant to the exercise of rights in an invalid contract 

themselves thereby to be set aside? If the answer is in the 

affirmative, does the language of § 53 nonetheless create a safe 

harbor, as it were, for these renewal contracts?

We address each question in turn, interpreting the statute 

"according to the intent of the Legislature, ascertained from 

all its words construed by the ordinary and approved usage of 

the language, considered in connection with the cause of its 

enactment, the mischief or imperfection to be remedied and the 

main object to be accomplished, to the end that the purpose of 

its framers may be effectuated." Commonwealth v. Mogelinski, 

473 Mass. 164, 169 (2015) (Mogelinski II), quoting Commonwealth

v. Clark, 472 Mass. 120, 129 (2015). We construe the Pacheco 

Law in order to render it "an effectual piece of legislation," 

able to accomplish legislative aims (citation omitted). Sun Oil 

Co. v. Director of Div. on the Necessaries of Life, 340 Mass. 

235, 238 (1960).

a. The invalid 2009 contracts and voidness. Under the 

plain language of § 54, no privatization contract made by an 

agency "shall be valid" unless it is compliant with the 

requirements of the statute.7 Given that the 2009 contracts are

 

7 Even where, unlike here, an agency acknowledges a contract 

as a privatization contract and unsuccessfully attempts to 

comply with those requirements by, inter alia, submitting it to 
11

assumed for these purposes to be non-compliant privatization 

contracts, they must be considered invalid. 

Generally speaking, whether a contract made in violation of 

a statute is rendered void ab initio, i.e., treated as having no 

force or effect, depends upon the language of the statute and 

the nature of the violation. See Baltazar Contractors, Inc., v. 

Lunenburg, 65 Mass. App. Ct. 718, 720-721 (2006) (contract void 

where statute declares it so or where voiding contract necessary 

to accomplish statutory purpose). See also Massachusetts Mun. 

Wholesale Elec. Co. v. Danvers, 411 Mass. 39, 55 (1991) (absent 

statutory declaration or binding precedent "voiding ab initio . 

. . applied . . . with the view of . . . effectuating public 

policy").8 The language that the Legislature chose to use in 

both § 54 and § 55 (that "no agency shall make any privatization 

contract and no such contract shall be valid" [emphasis 

 

the Auditor for review, the result of the Auditor's objection is 

the same: "no such contract shall be valid." See G. L. c. 7, 

§ 54.

8 DMH and the service providers rely on Massachusetts Mun. 

Wholesale Elec. Co. v. Danvers, 411 Mass. 39, 56 (1991) to argue

against the "legal fiction" of retrospectively declaring 

contracts void ab initio. While the court did caution in that 

case against "unthinkingly" voiding contracts, that discussion 

was with respect to the effect of an invalid contract on a third 

party (citation omitted). Id. at 55. The court explained that 

"limits [to retroactive voiding] . . . have their typical 

application to the rights and duties of" third parties. Id. at 

56, quoting Sleicher v. Sleicher, 251 N.Y. 366, 369-370 (1929).
12

supplied]) makes it unmistakably clear that the statute was 

intended to be "prohibitory," so as to render any contract in 

violation of it absolutely void, rather than simply "directory." 

See Baltazar, 65 Mass. App. Ct. at 721. 

This is especially so when viewed in light of the 

Legislature's stated purpose in § 52 that, in order to protect 

taxpayers, recipients of services, and workers, "it is necessary 

to regulate such privatization contracts" by means of the 

provisions set forth in the remainder of the statute. Were noncompliant privatization contracts to be afforded continuing 

force and effect, the result would thwart the express statutory 

purpose, allowing agencies to "evade the requirements of the 

Pacheco Law with impunity." SEIU I, 469 Mass. at 336. Deeming 

such contracts to be void ab initio is therefore necessary to

accomplish the statute's purposes. Cf. Phipps Prods. Corp. v. 

Massachusetts Bay Transp. Auth., 387 Mass. 687, 691-692 (1982)

(voiding public contracts that did not meet statutory bidding 

requirements [which serve similar purpose as Pacheco Law], even 

where no harm shown). 

b. Status of renewal contracts. It is undisputed that the 

renewal contracts were made by DMH's exercise of rights under 

the 2009 contracts, which for purposes here are deemed invalid

and void. Were such invalidation to have been the result of a 

declaratory judgment entered during the term of the 2009 
13

contracts, we have little doubt but that such void contracts

would be deemed without force or effect, and that they would no 

longer give rise to rights to renew. See, e.g., Winslow v. 

Baltimore & Ohio R.R. Co. 188 U.S. 646, 657-659 (1903). The 

inquiry then is whether the same result should obtain where, as 

here, the options to renew were exercised before the alreadychallenged 2009 contracts were declared to be invalid. We 

conclude that it should.

The fact that we confront this issue at a time when the 

2009 contracts have expired only underscores the highly unusual 

circumstances here. As we noted in SEIU I, "the Pacheco

Law . . . provides a streamlined and time-sensitive 

process . . . . [T]he . . . need for expedition in settling 

questions . . . is evident." SEIU I, 469 Mass. at 337 n.12.

The statutory framework contemplates that an agency seeking to 

privatize functions will follow the procedures outlined and, if 

there is a challenge to the Auditor's independent review of the 

proposed contract, that an action in the nature of certiorari 

will be filed and adjudicated promptly, protecting the many 

interests at stake. See MBTA, 430 Mass. at 786-787, 790-791. 

On the other hand, "it seems plain that the Pacheco Law as 

written does not contemplate the situation presented here." 

SEIU I, 469 Mass. at 327.
14

In light of the fact that the parties find themselves in a 

situation not expressly addressed in the statute, it is hardly 

surprising that the union's challenges to DMH's unilateral 

decision to forego the Pacheco procedures began by raising the 

issue first with DMH and the Auditor and, thereafter, by 

awaiting enforcement action from the Attorney General. 

Cf. MBTA, 430 Mass. at 791 (law entrusts Auditor with "broad 

grant of power"). The union brought suit in 2012 only when

those efforts proved fruitless. The union's standing to bring 

the action was then litigated, and it was only in 2014, after 

the 2009 contracts already had expired and DMH had exercised its 

contractual options, that we clarified the procedure to be 

followed in these circumstances. See SEIU I, 469 Mass. at 335-

336. We would not expect to confront such a situation again, 

given that in the future the agency's determination that a 

contract is not a privatization contract may be challenged 

forthwith in a declaratory judgment action with injunctive 

relief available. Parties entering into any such contracts, let 

alone exercising rights of renewal, prior to adjudication of the 

challenge, would do so at their peril.

That being said, this is not a case where the litigation 

was brought to challenge renewal contracts in the first instance 

on the basis that the predecessor contracts were invalid. To the 

contrary, the union challenged the predecessor 2009 contracts 
15

well before their expiration and now, only due to delays in 

adjudication, challenges the vitality of the extant renewal 

contracts. DMH and the vendors entered into those renewal 

contracts fully aware of the challenges lodged to the validity 

of the contracts pursuant to which the options to renew were

exercised. In essence, DMH would have the result turn on the 

fortuity of the clock running out on the 2009 contracts before 

the litigation concluded. We fail to see how it serves the 

purpose of the Pacheco Law to permit the passage of time to be 

dispositive in such circumstances. See Mogelinski II, 473 Mass. 

at 169 (looking to statutory purpose). Cf. Commonwealth v. 

Vega, 449 Mass. 227, 233 (2007) (courts do not interpret statute 

to produce an illogical result); 2A N.J. Singer & J.D. Shambie 

Singer, Statutes and Statutory Construction § 45:12 (7th ed. 

rev. 2014).

The union's claim that the 2009 contracts are invalid and 

that they and the resulting renewal contracts are thereby void, 

gives rise to a live controversy. SEIU has a legally cognizable 

interest in the outcome of a declaration as to the validity and 

voidness of the 2009 contracts. Such a declaration implicates 

the consequent inability of DMH effectively to have exercised 

rights of renewal pursuant to such contracts and, insofar as 

such a declaration would permit any such ongoing renewal 

contracts to be set aside, would itself provide a remedy. In 
16

these circumstances, declaratory relief is not merely advisory

and the union's claim is not moot.

c. The impact of Section 53. DMH maintains, however, that

because all subsequent agreements, including the renewal 

contracts here, are not "privatization agreements," and thus are 

not required to comply with §§ 54-55, they therefore are immune 

from the effects of a declaration as to the invalidity and 

voidness of the initial agreements pursuant to which they were 

made. This reading is not supported by the plain language of 

§ 53 itself, by the statute read as an harmonious whole, or by 

legislative history.

We have no quarrel with the view urged by DMH that the 

language of § 53 is fairly read as subjecting to statutory 

requirements and review processes only new privatization

agreements, entered into after the statute became effective, 

that privatize for the first time services that were until then 

provided by government employees. "Any subsequent agreement"

continuing those privatized services is "not a privatization 

contract." G. L. c. 7, § 53. By statutory definition, certain 

new agreements, such as those involving information technology, 

legal, or consulting services, also are not privatization 
17

contracts.9 See id. As to subsequent agreements, of which 

renewal agreements are a subset, the use of the word "any" as a 

modifier is certainly consistent with the reading that all such 

agreements are exempt. See Hollum v. Contrib. Retirement Appeal 

Bd., 53 Mass App. Ct. 220, 223 (2001). Contrary to the 

defendants' view, however, subsequent agreements are not exempt 

from all challenges. By contrast, because they are not required 

to comply with the rigorous strictures and review processes of 

the Pacheco Law, they are exempt only from challenges based on 

their own noncompliance with that law.

There is nothing in the language of § 53 that renders the 

exempt categories bullet proof from challenges that may be made 

to contracts as such. The exempt agreements, as any contracts, 

are subject to all manner of common law contract claims, ranging 

from simple breaches to issues such as fraud, unconscionability, 

or the ultra vires doctrine, some of which could, if proven, 

result in an agreement being rendered void. See, e.g.,

Massachusetts Mun. Wholesale Elec. Co. v. Danvers, 411 Mass. at

 

9 "A contract for information technology services shall not 

be considered a privatization contract if an employee 

organization recognized under [G. L. c. ] 150E, as the exclusive 

representative of an affected employee . . . agrees to the terms 

of the contract in writing. An agreement solely to provide 

legal, management consulting, planning, engineering or design 

services shall not be considered a privatization contract." 

G. L. c. 7, § 53.
18

54 (contract void ab initio as ultra vires); Restatement 2d of 

Contracts, § 7, comment b (1981) (circumstances such as fraud or 

duress allow aggrieved party to void contract). Such 

challenges -- not based on the renewal agreements' noncompliance 

with Pacheco Law requirements -- may seek directly to set aside 

an exempt contract because it is, for example, beyond the 

department's authority and therefore ultra vires or the product 

of fraud. 

Challenges also can seek indirectly the same result as to 

agreements ancillary to a void contract, because that contract 

is thereby rendered incapable of giving rise to any rights or 

duties. See 17A C.J.S. Contracts § 374 (2011) ("When parties to 

an illegal contract attempt to extend or renew it by entering 

into a new agreement, the new contract . . . is illegal and 

unenforceable"). Similarly, the latter type of challenge may 

affect "subsequent agreements" as the byproduct of a timely 

challenge to the validity of earlier contracts under the Pacheco 

Law, whether by virtue of the Auditor's objection pursuant to 

§ 55, an action in the nature of certiorari challenging the 

Auditor's decision, or a declaratory judgment action challenging 

the agency's non-compliance with §§ 54 and 55. Nothing in the 

express language of § 53 shields exempt agreements from such 

claims.
19

The silence of § 53 as to whether exempt agreements are 

immunized from all claims must be viewed in light of the 

statutory scheme as a whole. See Pentucket Manor Chronic Hosp., 

Inc. v. Rate Setting Comm'n, 394 Mass. 233, 240 (1985) (statutes 

must be construed "as a harmonious whole"). Sections 54 and 55 

plainly contemplate that privatization agreements, as defined in 

§ 53, that are entered into absent compliance with the 

requirements set forth in those sections, will be deemed void. 

To imply that § 53 draws a cloak of immunity over renewal 

contracts made pursuant to a contract voided by virtue of §§ 54 

and 55 would countermand the clear mandate of those sections, 

i.e., that agencies must comply with the Pacheco Law when 

entering into agreements to privatize services.

Nor does the legislative history support the view that the 

exemption of "subsequent agreements" from the definition of 

"privatization contracts" was intended to render such agreements 

wholly unreviewable. We look to legislative history because 

"statutes are to be interpreted, not alone according to their 

simple, literal, or strict verbal meaning" (citation omitted),

Sullivan v. Chief Justice for Admin. & Mgt. of the Trial Court, 

448 Mass. 15, 24 (2006), and "[u]nderstanding the intent of the 

Legislature" can be "far more important than a literal 

dictionary meaning." Quincy City Hosp. v. Rate Setting Comm'n, 

406 Mass. 431, 449 (1990).
20

While the language of the exemption makes one purpose selfevident -- it prevents duplicative review of already-approved 

contracts -- the legislative history of the Pacheco Law suggests 

one further goal. The provision was a means of dealing with 

contracts that had already privatized state services prior to 

the effective date of the statute. It was added as an amendment 

to ensure that agreements continuing those contracts in place 

after the statute became effective were not to be upended by 

virtue of not having been or thereafter being in compliance with 

the statutory vetting process. See Anti-Privatization Bill 

Would Stall Weld Push, The Boston Globe, March 3, 1993 at 22

Senator Marc Pacheco, the bill's sponsor, explained that as to 

"private services that are out there right now . . . [their] 

renewal is exempt from the bill." State House News Serv. (June 

16, 1993). On the other hand, nothing in the law's history

suggests that the Legislature intended to protect the renewal of 

invalid contracts.

DMH contends, however, that the Legislature intended the 

statute to provide a safe harbor for subsequent agreements, 

including renewal contracts, in order to ensure finality and 

attendant certainty for the parties to the contracts and those 

they serve. On this view, § 53 functions as an implicit statute 

of repose. Challenges belatedly invalidating renewal contracts 

as the result of statutory noncompliance in connection with the 
21

predecessor privatization contract would interfere with this 

salutary goal. There is merit to this point, but it does not 

justify the immunity that DMH seeks for renewal contracts. It 

goes instead to the timing of such challenges.

We are mindful that the statutory scheme recognizes the 

need for expedition in the review of privatization contracts. 

That is apparent in the short timelines set forth in § 55 for 

agency initiated review by the Auditor, and the fact that, if

challenged thereafter in an action in the nature of certiorari, 

that action should be brought and adjudicated promptly. Given 

this, we have indicated the need for similar dispatch in the 

one-off situations, as here, prompting declaratory judgment 

actions. See SEIU I, 469 Mass. at 337 n.12.

Ordinarily, we would expect that a union challenging an 

agency's decision to forego Pacheco Law review for alleged 

privatization contracts would bring a declaratory judgment 

action promptly after the agency's decision becomes public 

information.10 Ascertaining whether the agency's assessment of 

the nature of the contract is correct, and therefore does not 

require Pacheco Law review, is the pivotal issue requiring 

 

10 Given the importance of speedy resolution, in many cases

even limited delay might allow the defendant agency to raise the 

defense of laches. See SEIU I, 469 Mass. at 337 n.12. See also 

Mosley v. Briggs Realty Co., 320 Mass 278, 283 (1946) (laches 

requires delay and prejudice).
22

resolution. Ideally, suit could be brought before the contract 

is made or as soon thereafter as feasible and, in most 

circumstances, well before any renewal or other subsequent 

agreements would be in place, with injunctive relief sought as 

appropriate. The matter should be litigated and adjudicated on 

an expedited basis. 

To the extent that suit cannot reasonably be brought until 

the contract is already in place, and in the presumably rare 

instances where the initial privatization contract is of such

short duration that its renewal may take effect before the case 

is adjudicated, the result of a determination that the initial 

agreement is in fact a privatization agreement will be to 

declare such a contract invalid and thereby void and to set 

aside any renewal contracts made pursuant to it. Timeliness 

issues for laches purposes are, of necessity, to be decided on a 

case-by-case basis, with the guiding principle being fairness; 

parties must not sit on their hands. See, e.g., West Broadway 

Task Force v. Boston Hous. Auth., 414 Mass 394, 400 (1993) 

(laches operates where there is "unreasonable delay"). 

As discussed, the case before us is sui generis in this 

regard. The union brought this suit in the absence of an 

express statutory remedy and after having made reasonable, if 

ultimately fruitless and time consuming, administrative efforts 

to challenge the initial contracts. In the face of this
23

challenge to the validity of the agreements, the agency 

exercised its rights under them to renew. In these unusual 

circumstances, it appears that the union did not sit on its 

hands.

To construe § 53 as barring the union from seeking to set 

aside the extant renewal contracts as the byproduct of a 

declaration as to the invalidity of the initial contracts would

contravene the statutory mandate that noncompliance with its 

requirements has significant repercussions. It would also, in 

these circumstances, render meaningless the timely challenge 

brought to the agency's decision not to submit the 2009 contract 

to the Auditor, in essence inoculating the agency from review 

and allowing it to evade the Pacheco Law with impunity by virtue 

of the passage of time. As we stated in SEIU I, 469 Mass. 

at 336,

"In short, it cannot be that there is no recourse 

where an agency, believing the Pacheco Law is inapplicable 

in a particular situation, simply opts not to comply with 

its terms. The Pacheco Law could not function as the 

Legislature intended if an agency could decide, 

unilaterally and without input from the Auditor or the 

union, that its proposed contracts did not fall within the 

provisions of G. L. c. 7, § 53. Indeed, a public agency 

would have little incentive to adhere to the Pacheco Law's 

requirements were its decision to evade those requirements 

immune from any review. DMH's belief that the Pacheco Law 

does not apply to its proposed contracts cannot be 

understood to inoculate it against efforts to demonstrate 

otherwise. Such an approach would render the statute 

toothless, confounding the Legislature's efforts to ensure 

that privatization does not occur at the expense of public 

welfare." 
24

Here, as in SEIU I, DMH urges an interpretation of the 

Pacheco Law which would insulate potential privatization 

contracts from the very review that the law mandates. We do not 

believe the Legislature contemplated such a result.

3. Conclusion. The judgment dismissing the amended 

complaint is vacated, and the matter is remanded for further 

proceedings consistent with this opinion. Given the many delays 

that already have occurred, and the 2017 expiration of the 

extant renewal contracts, such further proceedings are to take 

place forthwith on an expedited basis.

So ordered.