Opinion ID: 794138
Heading Depth: 3
Heading Rank: 2

Heading: Plaintiffs' state antitrust claims

Text: 104
105 Moving to our analysis of the Rogers complaint (which raises the state antitrust claims), Massachusetts state antitrust law, while generally tracking federal antitrust law, does not use the same language. In relevant part, Mass. Gen. Laws. c. 93 § 12 states that the court may award up to three times the amount of actual damages sustained (emphasis added). Unlike federal antitrust law, which mandates that a victorious antitrust plaintiff will recover treble damages, Massachusetts law places the award of treble damages within a court's discretion. The use of the word may in Massachusetts law, as opposed to the word shall in federal law, means that the prohibition against treble damages in the arbitration agreements precludes the exercise of the discretion given by statute to a decision maker (be it an arbitrator or a court) in awarding treble damages. However, whether the arbitration agreements' language prohibits the actual award of treble damages (federal), or merely the possibility for that award (Massachusetts), the conflict between the arbitration agreements and state antitrust law on the issue of treble damages is plain. 106 On the basis of this obvious conflict, one might be tempted to conclude that, as with the federal antitrust statutes on the treble damages issue, the state antitrust statute presents a question of arbitrability. However, unlike under federal law, where the waiver of the statutory antitrust remedy is proscribed, it is unclear — or in other words, ambiguous — whether waiver of treble damages is permissible under Massachusetts law. If the answer to the waiver question under state law were clear, we would immediately conclude that there is a question of arbitrability and would proceed to decide the merits of Plaintiffs' vindication of statutory rights claim. Instead, as the Supreme Court did in PacifiCare, we must ascertain the extent of the legal ambiguity on the waiver issue in resolving the threshold question of arbitrability. 107
108 The Massachusetts Supreme Judicial Court most recently discussed whether a statutory right or remedy may be waived under Massachusetts state law in Canal Electric Co. v. Westinghouse Electric Corp., 406 Mass. 369, 548 N.E.2d 182 (1990). There, the Supreme Judicial Court answered questions of law that were certified by the United States District Court for the District of Massachusetts concerning, inter alia, whether a Limitation of Liability provision in a sales contract barred a statutory unfair trade practice claim against a manufacturer. See id. at 183. In Canal, the plaintiffs, including Canal, were electric utility companies that allege that they incurred substantial losses as a result of the failure of certain components of an electric generator manufactured by the defendant, Westinghouse.. . . Id. The question was whether Canal could validly waive its [Mass. Gen. Laws] c. 93A, § 11, claim by assenting to the Limitation of Liability clause. Id. at 187. The Supreme Judicial Court held that: 109 A statutory light or remedy may be waived when the waiver would not frustrate the public policies of the statute. For example ... we stated that a contractual waiver of statutory rights is permissible when the statute's purpose is the protection of the property rights of individual parties ... rather than ... the protection of the general public. A statutory right may not be disclaimed if the waiver could do violence to the public policy underlying the legislative enactment. 110 Id. (internal citations omitted). On the basis of this reasoning, the Supreme Judicial Court concluded that Canal could waive its claim under c. 93A. 111 Arguably, given that Massachusetts decided to make the award of treble damages under its antitrust law a matter of discretion, treble damages are not an indispensable element of Massachusetts' antitrust scheme, and the recovery of treble damages is therefore waivable. However, the Canal court also stated, albeit in passing, that [a]lthough there might be certain c. 93A, § 11 claims that a business plaintiff could not waive, such as a claim sounding in antitrust, facts to establish such a claim have not been alleged or established. Id. at 187-888, 548 N.E.2d 182 (emphasis added). The Canal court also stated that we ordinarily would not effectuate a consumer's waiver of rights under c. 93A, id. at 187. Given this additional language hinting that waiver of statutory remedies will not be allowed in situations involving a consumer plaintiff and/or antitrust claims, categories that Plaintiffs fall into, we see Massachusetts law on this question of waiver as ambiguous at best. 112 In the presence of this ambiguity, PacifiCare is dispositive. When there is an underlying legal ambiguity, and the parties have not explicitly expressed otherwise, Howsam's interpretive rule does not apply, and an arbitrator must decide the underlying legal question in the first instance so that the federal policy in favor of arbitration is not frustrated. Plaintiffs' vindication of statutory rights claim, based on the conflict between the arbitration agreements and Massachusetts antitrust law, does not raise a question of arbitrability. 113 In summary, as to both complaints, Plaintiffs' vindication of statutory rights claim, based on the damages limitation in the arbitration agreements, fails. As to Kristian, while there is a question of arbitrability, the damages limitation is inoperative because of the savings clause. In Rogers, there is no question of arbitrability because of the ambiguity on the waiver issue.