Court Opinion

ID: 8969674
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:24:49.504864+00
Date Added: 2024-06-11T17:10:23.706306
License: Public Domain

K.K. HALL, Circuit Judge,
concurring:
I fully concur with the result reached by the majority and in large part with the analyses employed by Judge Mumaghan in his fine opinion. I write separately only to *731clarify what I believe is dispositive to the Rule Against Perpetuities (“RAP”) issue.
In my view, the majority properly states the RAP as it is formulated in Massachusetts and properly concludes that the Massachusetts courts would apply the RAP to the right of first refusal held by Continental. I also agree that the plain language creating the right violates the RAP.
From this point, I am concerned that the majority’s analysis, although essentially correct, becomes somewhat unclear. The Massachusetts courts have repeatedly expressed their reluctance to mercilessly apply the RAP in a way that works a commercial injustice. See Childs v. Sherman, 351 Mass. 450, 221 N.E.2d 748, 751 (1966); Yentile v. Howland, 26 Mass.App.Ct. 214, 525 N.E.2d 689, 691 (1988). This concern is paramount in this case. If United Broadcasting were now, through the RAP, allowed to negate the right of first refusal which was the primary concession it made in settling its previous litigation with Continental, it would be unjustly enriched in a way that these two sophisticated corporate entities never envisioned. In such a situation the Massachusetts courts would apply the RAP “reasonably, in light of its objectives and the economic conditions of modem society.” Childs, 221 N.E.2d at 751. To prevent this windfall to United Broadcasting, the Massachusetts courts would view this right of first refusal as viable as long as it vests within “a reasonable period of time” not to exceed the period of the RAP. Id. That is exactly the result this Court reaches today. Our holding does nothing more.
The majority discusses a wide range of RAP-saving techniques and toys with the notion of “interpreting” the right of first refusal to in actuality be two rights of first refusal: (1) a contingent right existing the first 21 years of the contract; and (2) a contingent right existing for an indefinite time thereafter. Such an interpretation would certainly be creative, but just as certainly would be unsupported by the law of Massachusetts, the law which necessarily controls our decision. My reading of the majority opinion, however, leads me to conclude that this rationale is not the one finally relied upon to decide this case. At 727. Rather, we hold only that Continental’s right of first refusal will last for “a reasonable time,” in this instance, 21 years. Id. at 727. Because Continental’s right has been exercised within this period, it does not violate the RAP. It is with this understanding that I concur in the majority opinion.