Court Opinion

ID: 4180693
Source: CourtListenerOpinion
Date Created: 2017-06-26 14:10:50.67871+00
Date Added: 2024-06-11T13:24:56.226347
License: Public Domain

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SJC-12191

   ROBERT GEORGE & others1 vs. NATIONAL WATER MAIN CLEANING
                       COMPANY & others.2

         Suffolk.    February 14, 2017. - June 26, 2017.

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

Supreme Judicial Court, Certification of questions of law.
     Massachusetts Wage Act. Labor, Wages, Failure to pay
     wages, Damages. Damages, Interest. Interest. Judgment,
     Interest. Practice, Civil, Interest, Judgment, Damages.

     Certification of a question of law to the Supreme Judicial
Court by the United States District Court for the District of
Massachusetts.

     Adam J. Shafran (Jonathon D. Friedmann also present) for
the plaintiffs.
     Richard L. Alfred (Dawn Reddy Solowey & Anne S. Bider also
present) for the defendants.

     1
       Michael Curvin, Mark Bassett, Kevin Colvin, Justin Kordas,
Carlos Villarreal, Paul Dockett, Jon Eldridge, Chris Myers, Zef
Zeka, Paul LeDoux, Erik Paiva, Jeffrey David, and Chris
Mirisola, individually and on behalf of all others similarly
situated.
     2
       Carylon Corporation, Dennis Sullivan, Antonino
LaFrancesca, and Carl Cummings.
                                                                     2

     John Pagliaro & Martin J. Newhouse, for New England Legal
Foundation, amicus curiae, submitted a brief.
     Annette Gonthier Kiely, Kathy Jo Cook, Thomas R. Murphy, &
Timothy J. Wilton, for Massachusetts Academy of Trial Attorneys,
amicus curiae, submitted a brief.

    GANTS, C.J.    Several employees of National Water Main

Cleaning Company filed a class action suit against the company

and its parent company, Carylon Corporation, in the Superior

Court, alleging, among other claims, nonpayment of wages in

violation of the Massachusetts Wage Act, G. L. c. 149, §§ 148,

150 (Wage Act).   After the case was removed to the United States

District Court for the District of Massachusetts, the judge

granted final approval of a class settlement agreement that

resolved all outstanding issues except one question of law.     To

resolve that question, the judge certified to this court the

following question pursuant to S.J.C. Rule 1:03, as appearing in

382 Mass. 700 (1981):

         "Is statutory interest pursuant to [G. L. c. 231, § 6B
    or 6C,] available under Massachusetts law when liquidated
    (treble) damages are awarded pursuant to [G. L. c. 149,
    § 150]?"

In answer to the question, we declare that, under Massachusetts

law, statutory prejudgment interest pursuant to G. L. c. 231,

§ 6H, shall be added by the clerk of court to the amount of lost

wages and other benefits awarded as damages pursuant to G. L.

c. 149, § 150, but shall not be added to the additional amount

of the award arising from the trebling of those damages as
                                                                    3

liquidated damages.3

     Interpretation of the certified question.   Before we answer

the certified question, which the judge issued at the joint

request of the parties, we must first ascertain its meaning.

The question is an inquiry into the availability of statutory

interest pursuant to two statutes:   G. L. c. 231, § 6B, which

directs the clerk of court to add interest at the rate of twelve

per cent per year to awards of judgment "for personal injuries

to the plaintiff or for . . . damage to property"; and G. L.

c. 231, § 6C, which directs the clerk to add interest at the

same twelve per cent rate to awards of judgment "[i]n all

actions based on contractual obligations."   The parties appear

to treat the certified question essentially as two questions:

first, whether Wage Act claims fall within the scope of either

§ 6B or § 6C, and second, if they do, whether prejudgment

interest should be added to the award of damages for lost wages

and other benefits where § 150, as amended in 2008, provides for

the trebling of those damages and characterizes such an award as

"liquidated damages."   We decline to answer the first of these

questions because, even if prejudgment interest could not be

added to Wage Act awards under § 6B or § 6C, it plainly could be

     3
       We acknowledge the amicus briefs submitted by the New
England Legal Foundation and the Massachusetts Academy of Trial
Attorneys.
                                                                     4

added under G. L. c. 231, § 6H, which declares that interest at

the rate of twelve per cent per year shall be added to the award

of damages "[i]n any action in which damages are awarded, but in

which interest on said damages is not otherwise provided by

law."    The question we shall answer, which we consider to be the

true gist of the certified question, is whether the Legislature,

when it amended § 150 in 2008 to require the award of treble

damages on Wage Act judgments and characterized the award as

"liquidated damages," intended that prejudgment interest not be

added to any part of this award because such interest was

included within the scope of "liquidated damages."4   See Tyler v.

Michaels Stores, Inc., 464 Mass. 492, 499 n.12 (2013) (declining

to limit answer to narrow confines of certified question where

broader discussion was necessary to articulate law regarding

issue presented).

     4
       We note from the record that the parties initially had
agreed that the unresolved legal issue in their settlement
agreement would be resolved through this court's answer to the
certified question in Travers v. Flight Servs. & Sys., Inc., 808
F.3d 525, 551 (1st Cir. 2015), which asked: "Did [G. L. c. 149,
§ 150,] impliedly repeal [G. L. c. 231, § 6B,] as to cases in
which a party was awarded liquidated damages under § 150 and is
eligible for prejudgment interest under § 6B, such that the
award of prejudgment interest is precluded?" That resolution
became impossible when the Travers case settled and the
certified question was withdrawn. That certified question
assumed that an award under the Massachusetts Wage Act, G. L.
c. 149, § 150 (Wage Act), would include prejudgment interest
under § 6B unless the Legislature had impliedly repealed that
provision as applied to Wage Act awards.
                                                                     5

    Discussion.    The Wage Act was enacted "to protect wage

earners from the long-term detention of wages by unscrupulous

employers."   Melia v. Zenhire, Inc., 462 Mass. 164, 170 (2012),

quoting Cumpata v. Blue Cross Blue Shield of Mass., Inc., 113 F.

Supp. 2d 164, 167 (D. Mass. 2000).     Employers violate the Wage

Act when they fail to pay "each . . . employee the wages earned"

and when they fail to do so within the time period set by

statute.   See G. L. c. 149, § 148.

    Before the 2008 amendment, G. L. c. 149, § 150, provided

that an aggrieved employee may initiate "a civil action for

. . . any damages incurred, including treble damages for any

loss of wages and other benefits" and, if he or she prevails,

"shall be entitled to an award of the costs of the litigation

and reasonable attorney fees."     St. 2005, c. 99, § 2.   In

Wiedmann v. The Bradford Group, Inc., 444 Mass. 698, 709 (2005),

we noted that the text of this statute "states only that a

plaintiff 'may' institute a suit for damages that includes a

request for treble damages," and concluded that "there is

nothing in the plain language of the statute that requires an

award of treble damages."   We declined to require a judge to

award treble damages to a prevailing plaintiff where the plain

language of § 150 did not require it, and declared that the

award of treble damages in Wage Act cases was a decision left to

the discretion of the judge.     Id. at 710.   This conclusion was
                                                                       6

similar to the conclusion we reached in Goodrow v. Lane Bryant,

Inc., 432 Mass. 165, 178-179 (2000), where we rejected the

argument that the award of treble damages was mandatory once a

plaintiff requested such an award for an employer's failure to

pay required overtime compensation, in violation of G. L.

c. 151, § 1B.    Wiedmann, supra.   We noted that we had declared

in Goodrow that "treble damages are punitive in nature, allowed

only where authorized by statute, and appropriate where conduct

is 'outrageous, because of the defendant's evil motive or his

reckless indifference to the rights of others.'"     Wiedmann,

supra, quoting Goodrow, supra at 178.

     Three years after we decided Wiedmann, the Legislature

"effected a critical change in the language of the statute,

removing the provision that treble damages 'may' be awarded, and

replacing it with the directive that treble damages 'shall be

awarded.'"    Rosnov v. Molloy, 460 Mass. 474, 479 (2011).     Under

G. L. c. 149, § 150, as amended through St. 2008, c. 80, § 5,

where an aggrieved employee prevails in a civil action seeking

damages under the Wage Act, the employee "shall be awarded

treble damages, as liquidated damages, for any lost wages and

other benefits and shall also be awarded the costs of the

litigation and reasonable attorneys' fees."5    By its plain

     5
         General Laws c. 149, § 150, provides, in pertinent part:
                                                                    7

language, the 2008 amendment to § 150 mandates the award of

treble damages for lost wages and benefits once an aggrieved

employee prevails on a Wage Act claim; the plaintiff no longer

need show that the defendant's conduct was "outrageous" to

obtain such an award.

    The 2008 amendment did more than mandate the award of

treble damages to a prevailing plaintiff in a Wage Act case; it

characterized the treble damages "as liquidated damages."     The

         "An employee claiming to be aggrieved by a violation
    of [G. L. c. 149, § 33E, 52E, 148, 148A, 148B, 148C, 150C,
    152, 152A, 159C, or 190, or G. L. c. 151, § 19,] may,
    [ninety] days after the filing of a complaint with the
    attorney general, or sooner if the attorney general assents
    in writing, and within [three] years after the violation,
    institute and prosecute in his own name and on his own
    behalf, or for himself and for others similarly situated, a
    civil action for injunctive relief, for any damages
    incurred, and for any lost wages and other benefits;
    provided, however, that the [three-]year limitation period
    shall be tolled from the date that the employee or a
    similarly situated employee files a complaint with the
    attorney general alleging a violation of any of these
    sections until the date that the attorney general issues a
    letter authorizing a private right of action or the date
    that an enforcement action by the attorney general becomes
    final. An employee so aggrieved who prevails in such an
    action shall be awarded treble damages, as liquidated
    damages, for any lost wages and other benefits and shall
    also be awarded the costs of the litigation and reasonable
    attorneys' fees."

General Laws c. 149, § 150, also provides that "[t]he attorney
general may make complaint or seek indictment against any person
for a violation of [§ 148]," an additional enforcement mechanism
not at issue in this case. See Melia v. Zenhire, Inc., 462
Mass. 164, 170 (2012) ("Wage Act provides for both public and
private enforcement").
                                                                   8

crux of this appeal is to ascertain what the Legislature

intended by this characterization.   The defendants contend that

the inclusion of this phrase reflects the intent of the

Legislature that, apart from the award of reasonable attorney's

fees and the costs of litigation, the judgment in favor of a

prevailing plaintiff shall be limited to three times the amount

of lost wages and benefits; it shall not include any prejudgment

interest, whether under § 6B, 6C, or 6H, because prejudgment

interest is included within the award of liquidated damages.

The plaintiff contends that the inclusion of this phrase

reflects the intent of the Legislature that treble damages be

treated as compensatory in nature, rather than punitive, and

does not reflect an intent to deprive employees of prejudgment

interest they would otherwise be due as a matter of statute for

their lost wages and benefits.

    "Liquidated damages" is a term derived from contract law to

identify the amount of damages that the parties agree must be

paid in the event of a breach.   See Cochrane v. Forbes, 267
Mass. 417, 420 (1929) ("Liquidated damages . . . mean damages,

agreed upon as to amount by the parties, or fixed by operation

of law, or under the correct applicable principles of law made

certain in amount by the terms of the contract, or susceptible

of being made certain in amount by mathematical calculations

. . .").   See also 24 R.A. Lord, Williston on Contracts § 65:1
                                                                     9

(4th ed. 2002).    "A liquidated damages provision will usually be

enforced, provided two criteria are satisfied:    first, that at

the time of contracting the actual damages flowing from a breach

were difficult to ascertain; and second, that the sum agreed on

as liquidated damages represents a 'reasonable forecast of

damages expected to occur in the event of a breach.'"    NPS, LLC

v. Minihane, 451 Mass. 417, 420 (2008), quoting Cummings Props.,

LLC v. National Communications Corp., 449 Mass. 490, 494 (2007).

"Where damages are easily ascertainable, and the amount provided

for is grossly disproportionate to actual damages or

unconscionably excessive, the court will award the aggrieved

party no more than its actual damages."    NPS, LLC, supra.

    The term is used in the damages provision of the Federal

Fair Labor Standards Act (FLSA), 29 U.S.C. § 216(b), which

provides, "Any employer who violates the provisions of [§ 206 or

207] of this title shall be liable to the employee or employees

affected in the amount of their unpaid minimum wages, or their

unpaid overtime compensation, as the case may be, and in an

additional equal amount as liquidated damages."    The United

States Supreme Court has declared that liquidated damages under

the FLSA "are compensation, not a penalty or punishment by the

[g]overnment."    Overnight Motor Transp. Co. v. Missel, 316 U.S.
572, 583 (1942).    "The retention of a workman's pay may well

result in damages too obscure and difficult of proof for
                                                                  10

estimate other than by liquidated damages."   Id. at 583-584.

Liquidated damages under the FLSA "constitute[] a Congressional

recognition that failure to pay the statutory minimum on time

may be so detrimental to maintenance of the minimum standard of

living 'necessary for health, efficiency and general well-being

of workers' and to the free flow of commerce, that double

payment must be made in the event of delay in order to insure

restoration of the worker to that minimum standard of well-

being" (footnote omitted).   Brooklyn Sav. Bank v. O'Neil, 324
U.S. 697, 707 (1945).

      Although the legislative history is silent regarding the

Legislature's purpose in characterizing treble damages as

"liquidated damages" in the 2008 amendment to the Wage Act, we

infer that the Legislature knew that

     the FLSA had characterized the "additional equal amount" of
      unpaid minimum wages and unpaid overtime compensation as
      "liquidated damages";

     the United States Supreme Court had regarded liquidated
      damages as compensatory in nature rather than punitive; and

     the characterization of treble damages as "liquidated
      damages" could be used to defend an award of treble damages
      from the constitutional challenge that such an award was
      punitive in nature and therefore required a finding that
      the employer's conduct had been "outrageous." See
      Matamoros v. Starbucks Corp., 699 F.3d 129, 140 (1st Cir.
      2012) (defendant employer's argument that treble damages
      under Wage Act violate due process in absence of finding of
      employer "reprehensibility" was "misplaced" because, "[b]y
      definition, . . . liquidated damages are not punitive
      damages").
                                                                    11

       The defendants contend that we should make one further

inference:    that, by characterizing treble damages as

"liquidated damages" under the Wage Act, the Legislature

intended to adopt Federal law and preclude a plaintiff from

receiving any prejudgment interest on the award, including the

award of lost wages and benefits.   We conclude that this is one

inference too far.

       We recognize that the Supreme Court has declared that

Congress, by providing an award of liquidated damages under the

FLSA, "meant to preclude recovery of interest on minimum wages

and liquidated damages."    Brooklyn Sav. Bank, 324 U.S. at 715-

716.   The Court described "liquidated damages" as "compensation

for delay in payment of sums due under the [FLSA]."       Id. at 715.

Consequently, according to the Court:

       "Since Congress has seen fit to fix the sums recoverable
       for delay, it is inconsistent with Congressional intent to
       grant recovery of interest on such sums in view of the fact
       that interest is customarily allowed as compensation for
       delay in payment. To allow an employee to recover the
       basic statutory wage and liquidated damages, with interest,
       would have the effect of giving an employee double
       compensation for damages arising from delay in the payment
       of the basic minimum wages. . . . Allowance of interest on
       minimum wages and liquidated damages recoverable under § 16
       (b) tends to produce the undesirable result of allowing
       interest on interest." (Citation omitted.)

Id.

       We are not persuaded that the Legislature shared the

Congressional intent in this regard.    When the FLSA was enacted,
                                                                  12

there was no Federal statute generally mandating the payment of

prejudgment interest.    See Milwaukee v. Cement Div., Nat. Gypsum

Co., 515 U.S. 189, 194 (1995).   The payment of prejudgment

interest in Federal court, in the absence of a statute regarding

prejudgment interest, "is governed by traditional judge-made

principles."   Id.   In contrast, as noted earlier, the payment of

prejudgment interest in a Massachusetts court is governed by

statute, either G. L. c. 231, § 6B, 6C, or 6H.    The enactment of

§ 6H, St. 1983, c. 652, § 1, mandating the payment of

prejudgment interest where "not otherwise provided by law,"

reflects the Legislature's intent that prejudgment interest

always be added to an award of compensatory damages.

    Where § 6H provides for the award of prejudgment interest

whenever compensatory damages are awarded, an interpretation of

§ 150, as amended, that would preclude the payment of

prejudgment interest on the award of lost wages and benefits

under the Wage Act would be an implied repeal of § 6H with

respect to Wage Act awards.    Under our "long standing rule of

statutory interpretation," the implied repeal of a statute by a

subsequent statute has "never been favored by our law."

Commonwealth v. Hayes, 372 Mass. 505, 511 (1977), quoting

Commonwealth v. Bloomberg, 302 Mass. 349, 352 (1939).     Where two

statutes appear to be in conflict, we do not mechanically

determine "that the more 'recent' or more 'specific' statute
                                                                   13

. . . trumps the other."   Commonwealth v. Harris, 443 Mass. 714,

725 (2005).   Instead, we "endeavor to harmonize the two statutes

so that the policies underlying both may be honored."    Id.     "[A]

statute is not to be deemed to repeal or supersede a prior

statute in whole or in part in the absence of express words to

that effect or of clear implication."   Id., quoting Hayes, supra

at 512.   Repeal is not clearly implied "[u]nless the prior

statute is so repugnant to and inconsistent with the later

enactment that both cannot stand."   Hayes, supra at 511.

    Here, amended § 150 is in conflict with § 6H only if we

conclude that the Legislature intended the trebled "liquidated

damages" to incorporate all prejudgment interest.   But, because

we disfavor implied repeal, we may reach that conclusion only if

§ 150 expressly states that "liquidated damages" includes all

prejudgment interest or otherwise negates the entitlement in

§ 6H to prejudgment interest (which it does not), or if the

addition of prejudgment interest to an award of lost wages and

benefits is clearly inconsistent with the characterization of

treble damages as "liquidated damages" (which it is not).

    Before § 150 was amended in 2008, an aggrieved employee who

prevailed on a Wage Act claim was entitled to prejudgment

interest on an award of lost wages and benefits.    See, e.g.,

DeSantis v. Commonwealth Energy Sys., 68 Mass. App. Ct. 759,

768, 771 (2007) (upholding award of prejudgment interest on
                                                                    14

damages for lost wages and benefits under Wage Act).    Where the

employer's conduct was so outrageous as to justify punitive

damages, prejudgment interest would not be added to the trebled

punitive damages award, but the award of punitive damages did

not mean the deprivation of prejudgment interest on the award of

lost wages and benefits.    Cf. McEvoy Travel Bur., Inc. v. Norton

Co., 408 Mass. 704, 717 & n.9 (1990) (prejudgment interest added

to actual damages in G. L. c. 93A judgment, but not to multiple

punitive damages).    There is nothing in the legislative history

of the 2008 amendment of § 150 to suggest that the Legislature

intended to deprive an employee of prejudgment interest on lost

wages and benefits when it characterized what had been punitive

damages as liquidated damages.    To do so would mean that an

employee who was deprived of wages and benefits because of the

outrageous conduct of his or her employer would receive the same

treble damages under the amended § 150 as he or she would have

obtained before the amendment, albeit as liquidated damages

rather than punitive damages, but would obtain a lesser judgment

because of the preclusion of prejudgment interest.    Section 6H

may be read in harmony with the amended § 150 simply by

recognizing that the Legislature intended no change in the

payment of prejudgment interest.6

     6
         Because we recognize that the Legislature intended no
                                                                  15

    Nor is there anything in the legislative history to suggest

that the Legislature intended that the amended § 150 mirror the

FLSA with respect to "liquidated damages."   We can infer that

the Legislature did not intend the Wage Act fully to replicate

the FLSA because it declined to adopt a good faith exception to

the Wage Act's mandatory damages requirement.   As a result of

the Portal-to-Portal Act, 29 U.S.C. § 260 (1947), liquidated

damages under the FLSA must be remitted "if the employer shows

to the satisfaction of the court that the act or omission giving

rise to such action was in good faith and that he had reasonable

grounds for believing that his act or omission was not a

violation of the [Act]."   See Reich v. Southern New England

Telecomm. Corp., 121 F.3d 58, 70-71 (2d Cir. 1997).   By

contrast, following the passage of the 2008 amendment to the

Wage Act, the Legislature declined to accept the Governor's

change in the payment of prejudgment interest, we also conclude
that the Legislature did not intend that prejudgment interest be
awarded on the liquidated portion of the award of damages. If
it did, an employee under the amended § 150 who was deprived of
wages because of a good faith error by the employer would obtain
a significantly larger judgment than he or she would have
obtained before the amendment where the deprivation of wages
arose from the employer's outrageous conduct, because
prejudgment interest would be added to the "liquidated damages"
portion of the award but it would not have been added to the
punitive damages portion of the award under the previous version
of the statute. Under the amended § 150, prejudgment interest
is to be calculated based on the portion of damages reflecting
lost wages and benefits alone. The plaintiff does not contend
that the class members are entitled to prejudgment interest
beyond this.
                                                                   16

proposed amendments -- similar to those in the Portal-to-Portal

Act -- that would have allowed an exception to mandatory treble

damages for employers who violated the Wage Act in good faith.

See Rosnov, 460 Mass. at 482 n.9.   The amended § 150 became law

without the Governor's signature.   Id.

     Moreover, prejudgment interest and § 150 damages are

different in kind and accomplish distinctly different purposes.

Prejudgment interest is not generally included within

"liquidated damages" under our common law of contract.   In fact,

prejudgment interest is not even a category of damages; where

liquidated damages are awarded in a civil contract action,

prejudgment interest is added to the award of liquidated

damages.   See Sterilite Corp. v. Continental Cas. Co., 397 Mass.
837, 840 (1986) (prejudgment interest under G. L. c. 231, § 6C,

paid on both liquidated and unliquidated damages); Cochrane v.

Forbes, 267 Mass. 417, 420 (1929) (under common law, prejudgment

interest on liquidated damages runs from date of demand).

    Prejudgment interest is awarded to compensate a plaintiff

for the depreciation of the eventual recovery arising from the

often substantial delay between the commencement of the action

and the judgment.   See Smith v. Massachusetts Bay Transp. Auth.,

462 Mass. 370, 375 (2012).   In the context of a violation of the

Wage Act, "liquidated damages" properly would include the

various additional costs that might be incurred by an employee
                                                                    17

who has not been timely paid his or her full wages, but who

still needs to pay for the family's housing, transportation,

food and clothing, tuition, and medical expenses.     The damages

arising from delay in paying the wages due might be

considerable, depending on the employee's circumstances, but

they would be difficult to quantify with precision.    In

contrast, prejudgment interest on the amount of lost wages and

benefits is simple to quantify, and would not properly be a

subject of "liquidated damages."

    In short, we conclude that the Legislature's

characterization of treble damages as "liquidated damages" in

the 2008 amendment to § 150 was not intended to produce any

change in the award of prejudgment interest in Wage Act

judgments.   Prejudgment interest is still to be added to the

amount of lost wages and benefits, and is still not to be added

to the trebled portion of the judgment that previously had been

punitive damages and is now characterized as liquidated damages.

    Conclusion.   For the reasons stated, in answer to the

certified question, we declare that, under Massachusetts law,

statutory prejudgment interest shall be added by the clerk of

court to the amount of lost wages and other benefits awarded as

damages pursuant to G. L. c. 149, § 150, but shall not be added

to the additional amount of the award arising from the trebling

of those damages as "liquidated damages."
                                                                  18

    The Reporter of Decisions is to furnish attested copies of

this opinion to the clerk of this court.   The clerk in turn will

transmit one copy, under the seal of the court, to the clerk of

the United States District Court for the District of

Massachusetts, as the answer to the question certified, and will

also transmit a copy to each party.   See, e.g., DiFiore v.

American Airlines, Inc., 454 Mass. 486, 497 (2009).