Opinion ID: 539802
Heading Depth: 2
Heading Rank: 2

Heading: Status of the JUA Under Massachusetts Law

Text: 25 The district court ruled that the Massachusetts Supreme Judicial Court would extend its holding in Diluzio v. United Electrical, Radio and Machine Workers of America, Local 274, 386 Mass. 314, 435 N.E.2d 1027 (1982), to confer jural status upon the JUA. In that case, the Massachusetts court held that labor unions are legal entities, overturning the common law rule that unincorporated associations lack the capacity to sue or be sued. 435 N.E.2d 1027 at 1029. The court reasoned that the rationale behind the old rule--that an unincorporated association was simply an aggregation of individuals engaged in a joint enterprise--was not applicable to many modern entities, which can be large, highly organized institutions with great powers and responsibilities. Id. at 1029-1030. 26 Even though the Diluzio holding was limited to labor unions only, leaving to future development the rules to be applied in cases involving other types of unincorporated voluntary associations, id. at 1031, n. 6, we think that the court's rationale is applicable in this case. As an involuntary association created by legislative mandate, the JUA differs significantly from the aggregations of individuals pursuing a common purpose contemplated by the old common law rule. Id. at 1030. It is a non-profit underwriting association which issues policies in its own name and divides fixed profits among its members according to an established formula. Its existence is not dependent on the life of any member but is at the prerogative of the legislature. It engages in general malpractice underwriting work which represents organized, institutional activity as contrasted with wholly individual activity. Id. at 1029. The JUA, like the labor union under consideration in Diluzio, shares many of the institutional characteristics of incorporated entities which have jural status. 27 Moreover, the Massachusetts Supreme Judicial Court has itself entertained suits by and against the JUA without questioning the association's jural capacity. See Pinheiro v. Medical Malpractice Joint Underwriting Ass'n, 406 Mass. 288, 547 N.E.2d 49 (1989); Massachusetts Medical Soc'y v. Commissioner of Ins., 404 Mass. 720, 537 N.E.2d 116 (1989) (JUA was plaintiff-intervenor); Massachusetts Medical Soc'y v. Commissioner of Ins., 402 Mass. 44, 520 N.E.2d 1288 (1988) (separate JUA complaint consolidated with that of named plaintiff); Medical Malpractice Joint Underwriting Ass'n v. Commissioner of Ins., 395 Mass. 43, 478 N.E.2d 936 (1985). The existence of these cases strongly supports the JUA's argument that it has the capacity under Massachusetts law to sue and be sued as an entity. 28 We, therefore, agree with the district court's conclusion that the JUA has jural status. See Moores v. Greenberg, 834 F.2d 1105, 1107 (1st Cir.1987) (it is the duty of the federal district court to determine how the state's highest tribunal would rule on issues of state law, and in doing so it may reasonably assume that [the state court] will follow the rule that appears best to effectuate relevant policies) (citation omitted); Kassel v. Gannett Co., Inc., 875 F.2d 935, 950 (1st Cir.1989) (when state law has been authoritatively declared, the federal tribunal should apply that law according to its tenor).