Opinion ID: 195233
Heading Depth: 1
Heading Rank: 4

Heading: the unfair trade practices claim

Text: 43 We come, finally, to appellant's unfair trade practices claim. This claim invokes a Massachusetts statute that provides in relevant part: 44 [A]ny person who engages in the conduct of any trade or commerce and who suffers any loss of money or property, real or personal, as a result of the use or employment by another person who engages in any trade or commerce of an unfair method of competition or an unfair or deceptive act or practice ... may, as hereinafter provided, bring an action ... for damages.... 45 Mass.Gen.L. ch. 93A, Sec. 11 (1984). The district court, without making an explicit choice-of-law determination, dismissed the claim on the ground that the interdicted conduct did not occur in trade or commerce. 46 Appellant's chapter 93A claim is really two separate but related claims. We deal with them seriatim. The first initiative fails to state a cause of action even if chapter 93A applies, and we dispose of it on that basis. 13 The second initiative is a horse of a different hue; if chapter 93A applies, it arguably states a claim. Consequently, we treat the choice-of-law question that necessarily precedes substantive consideration of this initiative. 47
48 Appellant's initial charge--that ELC, by blaming the collapse of the deal on Cretco's financial plight rather than on its own empty coffers, misrepresented its reason for refusing to proceed with the sale and leaseback--need not detain us. Although Judge Torres found that ELC had not informed appellant that its participation in the deal would hinge upon the availability of funding, there is no credible evidence that ELC ever made express representations to the contrary. Thus, even if we assume the truth of the charge, no reasonable factfinder could conclude that ELC's conduct in this respect descended to the level of rascality required for a successful chapter 93A suit. See, e.g., Gooley v. Mobil Oil Corp., 851 F.2d 513, 515-16 (1st Cir.1988) (explaining that, [i]n Massachusetts, the litmus test for transgression of chapter 93A involves behavior which falls within 'the penumbra of some ... established concept of unfairness' ) (quoting Massachusetts cases); Levings v. Forbes & Wallace, Inc., 8 Mass.App.Ct. 498, 396 N.E.2d 149, 153 (1979) (explaining that objectionable conduct must attain a level of rascality that would raise an eyebrow of someone inured to the rough and tumble of the world of commerce in order to support a chapter 93A action); see also Maruho Co. v. Miles, Inc., 13 F.3d 6, 10 (1st Cir.1993); Quaker State Oil Refining Corp. v. Garrity Oil Co., 884 F.2d 1510, 1513 (1st Cir.1989); Whitinsville Plaza, Inc. v. Kotseas, 378 Mass. 85, 390 N.E.2d 243, 251 (1979); Rex Lumber Co. v. Acton Block Co., 29 Mass.App.Ct. 510, 562 N.E.2d 845, 850 (1990). Whether or not full disclosure during arm's-length business negotiations is more likely the exception than the rule, a failure fully to disclose, standing alone, while sometimes actionable in tort, ordinarily will not transgress chapter 93A. So it is here. 49
50 The second basis for the appellant's chapter 93A claim arguably consists of sterner stuff. During pretrial discovery, ELC produced a handwritten credit decision memorandum (CDM) dated November 2, 1990. Attached to the CDM was a note purportedly written to Mark Patterson, advising him that the handwritten memo superseded a typed CDM of the same vintage. The difference between the two memoranda is of import. The typed CDM stated that the sale and leaseback had been approved. 14 The handwritten version, however, conditioned the approval on a thoroughgoing review of appellant's financial status and a favorable reaction by an ELC funding source. By the time the case reached trial, appellant had integrated ELC's gamesmanship during discovery with its other purported peccadilloes, and charged that the handwritten CDM was a fake, manufactured after the fact in order to lay the groundwork for ELC's defense. 51 Even if we assume, arguendo, that the described conduct might infract chapter 93A, see generally Quaker State, 884 F.2d at 1513-14 (discussing when tactics in, and related to, ongoing litigation may prove actionable under chapter 93A), we nevertheless must pause at the choice-of-law threshold. Recognizing that a defendant in a contract case governed by one state's law nonetheless may be subject to the provisions of another state's unfair trade practices statute, see, e.g., Computer Sys. Eng'g, Inc. v. Qantel Corp., 740 F.2d 59, 64 nn. 6, 7 (1st Cir.1984), that result will obtain only if the forum state's choice-of-law rules so dictate, see id. at 70. Considering this possibility brings into play the principle of depecage, which we have described as the framework under which different issues in a single case ... may be decided according to the substantive law of different states. Putnam Resources, 958 F.2d at 465. 52 For choice-of-law purposes, we treat appellant's chapter 93A initiative as a species of tort claim. At least one federal court has made the across-the-board assessment that chapter 93A claims should be treated uniformly, rather than on a case-by-case basis, in the same way as tort claims. Computer Sys. Eng'g, Inc. v. Qantel Corp., 571 F.Supp. 1365, 1371 (D.Mass.1983), aff'd, 740 F.2d 59 (1st Cir.1984). We need not go so far. We hold that, at minimum, when a chapter 93A claim and the requested remedy are highly analogous to a tort claim and remedy, the chapter 93A claim should be considered as a tort for choice-of-law purposes. See id. at 1370-71; see also Michael C. Gilleran, The Law of Chapter 93A Sec. 12:8, at 413 (1989); cf. Northeast Data Sys., Inc. v. McDonnell Douglas Computer Sys. Co., 986 F.2d 607, 609 (1st Cir.1993) (holding that a chapter 93A claim may trigger a contractual conflicts analysis where it is essentially an embroidered contract claim). 53 In applying these principles, we focus only on the arguably actionable conduct, i.e., appellant's second chapter 93A initiative. 15 In that initiative, appellant claimed that ELC manufactured evidence in an attempt to justify its nonperformance. This charge resembles the tort of fraudulent misrepresentation. Similarly, appellant asked for a tort-like remedy (multiple damages and attorneys' fees). Thus, we consider this species of chapter 93A claim as falling under the tort rubric for purposes of our choice-of-law assessment. 54 In tort cases, Rhode Island uses a multipart analysis to determine which of two states has the more significant interest in the resolution of the issue presented in the case. See Pardey v. Boulevard Billiard Club, Inc., 518 A.2d 1349, 1351 (R.I.1986); accord Brown v. Church of the Holy Name of Jesus, 105 R.I. 322, 252 A.2d 176, 178 (1969); Woodward v. Stewart, 104 R.I. 290, 243 A.2d 917, 923, cert. dism'd, 393 U.S. 957, 89 S.Ct. 387, 21 L.Ed.2d 371 (1968); see also Putnam Resources, 958 F.2d at 464; Fashion House, Inc. v. K Mart Corp., 892 F.2d 1076, 1092 (1st Cir.1989); Montaup Elec. Co. v. Ohio Brass Corp., 561 F.Supp. 740, 744-45 (D.R.I.1983). 55 General choice-of-law principles that should guide a court in making such a determination include (1) predictability of results; (2) maintenance of interstate order; (3) simplification of the judicial task; (4) advancement of the forum's governmental interests; and (5) application of the better rule of law. See Putnam Resources, 958 F.2d at 464-65; Brown, 252 A.2d at 178; Woodward, 243 A.2d at 923; see also Restatement Sec. 6. In considering these general principles, tort conflict-of-law analysis weighs more heavily the needs of the interstate system, the policies of the interested states as well as the forum, and the ease of determination and application of the law. See Restatement Sec. 145, cmt. b. In the tort context, these overarching tenets may take into account a number of other factors, including (1) the place of injury; (2) the place where the conduct which caused the injury occurred; (3) the place of incorporation and place of business of each party; and (4) the locus, or center of gravity, of the parties' relationship. See Putnam Resources, 958 F.2d at 464; Fashion House, 892 F.2d at 1092; Brown, 252 A.2d at 179; see also Restatement Sec. 145(2). 56 An application of these factors reveals that Rhode Island has a more significant interest than Massachusetts in the resolution of this claim. Appellant initiated negotiations with ELC in Rhode Island--and interstate policy does not dictate prosecution under the Massachusetts statute of every deceptive trade allegation brought against a company headquartered in Massachusetts but doing business in another state. Rhode Island has a substantial interest in protecting its resident companies from deceptive representations or unfair trade practices, especially those that may occur within its borders. As it is the forum state, an application of Rhode Island's tort law would be more easily accomplished than an application of Massachusetts law. 57 Then, too, in addition to the Rhode Island locus of the claimed injury, the allegedly tortious conduct also possesses substantial links to Rhode Island. Appellant's claim arose when Douglas Crellin visited Mark Patterson at his Rhode Island home and saw the typed version of the CDM. The coverup itself--if one took place--must have been crafted in the course of pretrial discovery in a Rhode Island forum. Even if we assume that the handwritten version of the CDM was created in Massachusetts--and there is no proof of that fact--such a contact, standing alone, would not be enough to overcome Rhode Island's interest in compensating a Rhode Island company whose financial well-being was compromised through deceptive acts of a company doing business within Rhode Island. 16 58 We conclude, therefore, that to the extent appellant presents a potentially viable unfair trade practices claim, the claim is governed by the substantive law of Rhode Island. Because that is so, appellant's claim under chapter 93A is not actionable. 17 See, e.g., Eastland Bank v. Massbank for Savings, 767 F.Supp. 29, 35 (D.R.I.), aff'd mem., 953 F.2d 633 (1st Cir.1991); cf. Qantel, 740 F.2d at 70. Accordingly, we affirm the district court's dismissal of this claim on different, but equally dispositive, grounds, see generally Polyplastics, Inc. v. Transconex, Inc., 827 F.2d 859, 860-61 (1st Cir.1987) (explaining that an appellate court, in affirming a judgment, is not limited to the trial court's rationale, but can affirm on any independent ground made manifest in the record), without reaching the question of whether the alleged coverup can be said to have been aimed at influencing Cretco in the conduct of any [ongoing] trade or commerce. Mass.Gen.L. ch. 93A, Sec. 2.