Court Opinion

ID: 4101053
Source: CourtListenerOpinion
Date Created: 2016-11-22 16:09:40.130721+00
Date Added: 2024-06-11T13:26:27.168606
License: Public Domain

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SJC-12035

        SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 509   vs.
                DEPARTMENT OF MENTAL HEALTH & others.1

        Suffolk.     September 6, 2016. - November 22, 2016.

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

Privatization Act. Commissioner of Mental Health.
     Commonwealth, Contracts. Contract, Validity. Public
     Employment. Laches. Practice, Civil, Judgment on the
     pleadings.

     Civil action commenced in the Superior Court Department on
February 15, 2012.

     Following review by this court, 469 Mass. 323 (2014), the
case was heard by Janet L. Sanders, J., on motions for judgment
on the pleadings.

    1
       Advocates, Inc.; Alternatives Unlimited, Inc.; Bay Cove
Human Services; The Bridge of Central Mass, Inc.; Brien Center,
Brockton Area Multi Services, Inc.; Carson Center for Human
Services; Center for Human Development, Inc.; Community
Counseling of Bristol County; Community Healthlink, Inc.;
Edinburg Center, Inc.; Eliot Community Human Services, Inc.;
Fellowship Health Resources, Inc.; Mental Health Association of
Greater Lowell, Inc.; North Suffolk Mental Health Association;
Riverside Community Care, Inc.; Servicenet, Inc.; South Shore
Mental Health Center, Inc.; and Vinfen Corporation.
                                                                  2

     The Supreme Judicial Court granted an application for
direct appellate review.

     Ian O. Russell (Katherine D. Shea with him) for the
plaintiff.
     Iraida J. Álvarez, Assistant Attorney General, for
Department of Mental Health.
     Carl Valvo & Ariel G. Sullivan, for Advocates, Inc., &
others, were present but did not argue.
     Mark G. Matuschak & Robert Kingsley Smith, for Pioneer
Institute, Inc., were present but did not argue.
     Anita S. Lichtblau & Robert E. Cowden, III, for
Massachusetts Council of Human Services Providers, Inc., &
others, amici curiae, submitted a brief.

    LENK, J.   This is the second time that the plaintiff labor

union appeals from dismissal of the declaratory judgment action

it first brought against the Department of Mental Health (DMH or

agency) in 2012.   Service Employees International Union, Local

509 (SEIU or union) maintains that certain contracts DMH made in

2009 with private vendors are "privatization contracts" subject

to the requirements of the Pacheco Law, G. L. c. 7, §§ 52-55.

The Pacheco Law establishes certain prerequisites that agencies

must meet when seeking to enter into privatization contracts.

Because DMH had determined that the subject contracts were not

privatization contracts, however, it did not comply with those

statutory prerequisites.   In bringing this action, the union

seeks, among other things, a declaration invalidating the

contracts on the basis of G. L. c. 7, § 54 (§ 54), which
                                                                   3

provides that no privatization contract "shall be valid" where

an agency did not follow the necessary procedures.

     In our previous decision in this case, Service Employees

Int'l Union, Local 509 v. Department of Mental Health, 469 Mass.
323, 324 (2014) (SEIU I), we rejected DMH's contention that the

union lacked standing to challenge, in a declaratory judgment

action, the agency's unilateral determination that the contracts

were not privatization contracts.   While recognizing that the

Pacheco Law does not expressly provide a private right of

action, we also recognized that the Legislature did not

contemplate the situation presented there (and here), in which

an agency determines on its own that it need not comply with the

requirements of the statute.   Id. at 335-336.    Because

unreviewable agency decision-making on such a matter would

thwart legislative intent, we concluded that in these

circumstances "declaratory judgment is an appropriate vehicle

for relief to ensure that agencies may not evade the

requirements of the Pacheco Law with impunity."     Id. at 336.   We

accordingly vacated the judgment of dismissal and remanded the

case to allow joinder of necessary parties.2     Id. at 339.

     2
       The Superior Court judge had determined, and we agreed,
that the initial complaint did not include all necessary
parties. Service Employees Int'l Union, Local 509 v. Department
of Mental Health, 469 Mass. 323, 338-339 (2014) (SEIU I). On
remand, SEIU filed an amended complaint joining those parties.
                                                                    4

     While SEIU I was under advisement in this court, however,

the five-year term of the subject contracts drew to an end and,

pursuant to the provisions of those contracts, DMH exercised

options renewing them for successive one year periods.3

Following our decision in SEIU I and the amendment of the

complaint, DMH again successfully moved to dismiss the union's

declaratory judgment action, this time asserting it was moot.

The basis for the dismissal was two-fold:   first, the action was

moot as to the now-expired 2009 contracts, and, second, the

remaining extant renewal contracts were immune from challenge by

virtue of G. L. c. 7, § 53 (§ 53) ("any agreement renewing . . .

a privatization contract[] shall not be considered a

privatization contract").   The union appealed, asserting, in

essence, that because the non-compliant 2009 initial contracts

are invalid under § 54, so too are any renewal contracts made

pursuant to them.

     We are thus called upon to construe §§ 53 and 54 as they

apply in these unusual circumstances.   Cognizant that the

Pacheco Law only contemplates the situation, unlike this one,

where an agency recognizes a potential privatization contract as

     3
       The 2009 contracts were for a period of five years,
expiring in 2014. They provided the Department of Mental Health
(DMH) three unilateral options to renew for periods of one year
each.
                                                                    5

such and acts in compliance with the statutory requirements to

assure its validity, see, e.g., SEIU I, 469 Mass. at 329-330;

Massachusetts Bay Transp. Auth. v. Auditor of the Commonwealth,

430 Mass. 783, 784-787 (2000) (MBTA), we interpret §§ 53-54 with

that framework in mind.   Fidelity to the intent and purpose of

the Legislature in enacting the Pacheco Law, evident in both the

plain language of the statute when read as a harmonious whole,

and the legislative history, requires that the protection

afforded renewal contracts by § 53 not be extended to those

renewal contracts made pursuant to timely challenged and

subsequently invalidated privatization contracts under § 54.       We

accordingly vacate the judgment of dismissal.

     1.   Background.   The following facts are taken from SEIU's

amended complaint, which, at this stage, we assume to be true,

see, e.g., Iannacchino v. Ford Motor Co., 451 Mass. 623, 636

(2008), supplemented by undisputed facts in the record.4     For

more than fifteen years, DMH had employed case managers to

provide services to individuals with mental illness.    In

late 2008 and early 2009, DMH initiated a new program, the

Community Based Flexible Supports program, that was intended to

     4
       The allegations in the amended complaint are materially
identical to those in the initial complaint. See Service
Employees Int'l Union, Local 509 v. Department of Mental Health,
469 Mass. 323, 324,326 (2014) (SEIU I).
                                                                   6

provide similar but more personalized services to DMH clients.

As part of the Community Based Flexible Supports program, DMH

entered into agreements with nineteen private organizations to

provide services substantially similar to those previously

provided by the case managers.   Over the same period, DMH laid

off approximately eighty case managers.   DMH unilaterally

determined that these new contracts were not "privatization

contracts" within the meaning of the Pacheco Law and therefore

did not attempt to follow any of the procedures that the law

requires when an agency intends to privatize a service.

    Sometime in 2009, SEIU notified the Auditor of the

Commonwealth of DMH's intent to enter into the contracts and the

union's objections to the contracts.   The Auditor's office

undertook an investigation and, in September, 2010, the

Auditor's general counsel sent DMH, SEIU, and the Attorney

General a letter and memorandum stating that the contracts

"[had] the effect . . . of privatizing services previously

performed by public employees," and therefore should have been

submitted for review prior to taking effect.   The Auditor's

office told the Office of the Attorney General "to take whatever

steps [the Attorney General felt] were appropriate," but the

Attorney General's office did not take any action.

    Having failed to obtain relief through administrative

channels, the union filed its initial complaint in 2012.      As
                                                                     7

discussed, a Superior Court judge dismissed that complaint for

lack of standing; we vacated the decision, concluding that the

union did have standing, and remanded for further proceedings.

On remand, a different Superior Court judge dismissed the

amended complaint, this time as moot; SEIU appealed, and we

granted direct appellate review.

    2.   Discussion.     We have discussed at some length in prior

decisions the statutory framework, purpose, and history of the

Pacheco Law.    See SEIU I, 469 Mass. at 329-330; MBTA, 430 Mass.

at785-787.     In brief, G. L. c. 7, § 52 (§ 52), sets forth the

purpose of the law:

         "The [G]eneral [C]ourt hereby finds and declares that
    using private contractors to provide public services
    formerly provided by state employees does not always
    promote the public interest. To ensure that citizens of
    the [C]ommonwealth receive high quality public services at
    low cost, with due regard for the taxpayers of the
    [C]ommonwealth and the needs of public and private workers,
    the [G]eneral [C]ourt finds it necessary to regulate such
    privatization contracts in accordance with [the rest of the
    law]."

In addition to defining several key terms, the other three

sections of the law, set forth both the procedures that agencies

must follow when seeking to enter into privatization contracts

and describe the independent review process that the Auditor is

to conduct of a proposed privatization contract upon receiving

from the agency specified information and a certification of

compliance with those prerequisites.
                                                                     8

     Section 53 defines "privatization contract" as follows:

          "[A]n agreement or combination or series of agreements
     by which a non-governmental person or entity agrees with an
     agency to provide services, valued at [an amount to be
     adjusted for inflation, currently $500,000, or more] which
     are substantially similar to and in lieu of, services
     theretofore provided, in whole or in part, by regular
     employees of an agency."

It excludes from the definition "[a]ny subsequent agreement,

including any agreement resulting from a rebidding of previously

privatized service, or any agreement renewing or extending a

privatization contract."5   Id.   Section 54 makes plain that "[n]o

agency shall make any privatization contract and no such

contract shall be valid unless the agency [follows requisite

procedures]."   This point is underscored in G. L. c. 7, § 55

(§ 55), which sets forth the consequence of the Auditor's

objection to a proposed contract:    "An agency shall not make any

privatization contract [to which the auditor objects] and no

such contract shall be valid."

     DMH contends that, even if the initial 2009 contracts were

deemed invalid, the now fully performed contracts should not be

deemed void.    It is DMH's view that the renewal contracts would

remain unaffected even in the face of such a declaration because

     5
       In addition to renewal contracts, certain contracts for
services such as information technology, legal services,
consulting, engineering, or design are excluded from the
definition of "privatization contract." G. L. c. 7, § 53.
                                                                     9

renewal contracts are not privatization contracts by definition,

and therefore need not comply with Pacheco Law requirements.

Accordingly, in its view, the renewal contracts cannot be set

aside by virtue of either their own noncompliance with such

requirements or that of the predecessor contracts.    The union

maintains, by contrast, that the invalidity of the initial

privatization contracts requires that they be set aside as void,

that they could not give rise to validly exercised options to

renew and therefore that such renewal contracts are themselves

void.    Section 53, the union argues, does not provide a safe

harbor immunizing such renewal contracts from the consequences

of predecessor agreements' invalidity.

     Assuming, as we must at this stage, that the contracts DMH

entered into with private vendors in 2009 were privatization

contracts6 and that, pursuant to § 54, "no such contract shall be

valid," the questions we must resolve are these.    Is the

consequence of declaring a non-compliant privatization contract

invalid to render it void and of no effect?    If the answer is in

the affirmative, are renewal contracts that are entered into

     6
       The question whether the services provided through the
Community Based Flexible Supports program are substantially
similar to those provided by case managers, and therefore
whether the contracts were, in fact, privatization contracts
under the Pacheco Law, has not been determined, see SEIU I, 469
Mass. at 325 n.4, and we do not reach it today.
                                                                  10

pursuant to the exercise of rights in an invalid contract

themselves thereby to be set aside?    If the answer is in the

affirmative, does the language of § 53 nonetheless create a safe

harbor, as it were, for these renewal contracts?

     We address each question in turn, interpreting the statute

"according to the intent of the Legislature, ascertained from

all its words construed by the ordinary and approved usage of

the language, considered in connection with the cause of its

enactment, the mischief or imperfection to be remedied and the

main object to be accomplished, to the end that the purpose of

its framers may be effectuated."   Commonwealth v. Mogelinski,

473 Mass. 164, 169 (2015) (Mogelinski II), quoting Commonwealth

v. Clark, 472 Mass. 120, 129 (2015).    We construe the Pacheco

Law in order to render it "an effectual piece of legislation,"

able to accomplish legislative aims (citation omitted).     Sun Oil

Co. v. Director of Div. on the Necessaries of Life, 340 Mass.
235, 238 (1960).

     a.   The invalid 2009 contracts and voidness.   Under the

plain language of § 54, no privatization contract made by an

agency "shall be valid" unless it is compliant with the

requirements of the statute.7   Given that the 2009 contracts are

     7
       Even where, unlike here, an agency acknowledges a contract
as a privatization contract and unsuccessfully attempts to
comply with those requirements by, inter alia, submitting it to
                                                                  11

assumed for these purposes to be non-compliant privatization

contracts, they must be considered invalid.

     Generally speaking, whether a contract made in violation of

a statute is rendered void ab initio, i.e., treated as having no

force or effect, depends upon the language of the statute and

the nature of the violation.   See Baltazar Contractors, Inc., v.

Lunenburg, 65 Mass. App. Ct. 718, 720-721 (2006) (contract void

where statute declares it so or where voiding contract necessary

to accomplish statutory purpose).   See also Massachusetts Mun.

Wholesale Elec. Co. v. Danvers, 411 Mass. 39, 55 (1991) (absent

statutory declaration or binding precedent "voiding ab initio .

. . applied . . . with the view of . . . effectuating public

policy").8   The language that the Legislature chose to use in

both § 54 and § 55 (that "no agency shall make any privatization

contract and no such contract shall be valid" [emphasis

the Auditor for review, the result of the Auditor's objection is
the same: "no such contract shall be valid." See G. L. c. 7,
§ 54.
     8
       DMH and the service providers rely on Massachusetts Mun.
Wholesale Elec. Co. v. Danvers, 411 Mass. 39, 56 (1991) to argue
against the "legal fiction" of retrospectively declaring
contracts void ab initio. While the court did caution in that
case against "unthinkingly" voiding contracts, that discussion
was with respect to the effect of an invalid contract on a third
party (citation omitted). Id. at 55. The court explained that
"limits [to retroactive voiding] . . . have their typical
application to the rights and duties of" third parties. Id. at
56, quoting Sleicher v. Sleicher, 251 N.Y. 366, 369-370 (1929).
                                                                  12

supplied]) makes it unmistakably clear that the statute was

intended to be "prohibitory," so as to render any contract in

violation of it absolutely void, rather than simply "directory."

See Baltazar, 65 Mass. App. Ct. at 721.

    This is especially so when viewed in light of the

Legislature's stated purpose in § 52 that, in order to protect

taxpayers, recipients of services, and workers, "it is necessary

to regulate such privatization contracts" by means of the

provisions set forth in the remainder of the statute.     Were non-

compliant privatization contracts to be afforded continuing

force and effect, the result would thwart the express statutory

purpose, allowing agencies to "evade the requirements of the

Pacheco Law with impunity."   SEIU I, 469 Mass. at 336.    Deeming

such contracts to be void ab initio is therefore necessary to

accomplish the statute's purposes.   Cf. Phipps Prods. Corp. v.

Massachusetts Bay Transp. Auth., 387 Mass. 687, 691-692 (1982)

(voiding public contracts that did not meet statutory bidding

requirements [which serve similar purpose as Pacheco Law], even

where no harm shown).

    b.   Status of renewal contracts.     It is undisputed that the

renewal contracts were made by DMH's exercise of rights under

the 2009 contracts, which for purposes here are deemed invalid

and void.   Were such invalidation to have been the result of a

declaratory judgment entered during the term of the 2009
                                                                   13

contracts, we have little doubt but that such void contracts

would be deemed without force or effect, and that they would no

longer give rise to rights to renew.   See, e.g., Winslow v.

Baltimore & Ohio R.R. Co. 188 U.S. 646, 657-659 (1903).      The

inquiry then is whether the same result should obtain where, as

here, the options to renew were exercised before the already-

challenged 2009 contracts were declared to be invalid.      We

conclude that it should.

    The fact that we confront this issue at a time when the

2009 contracts have expired only underscores the highly unusual

circumstances here.   As we noted in SEIU I, "the Pacheco

Law . . . provides a streamlined and time-sensitive

process . . . .   [T]he . . . need for expedition in settling

questions . . . is evident."   SEIU I, 469 Mass. at 337 n.12.

The statutory framework contemplates that an agency seeking to

privatize functions will follow the procedures outlined and, if

there is a challenge to the Auditor's independent review of the

proposed contract, that an action in the nature of certiorari

will be filed and adjudicated promptly, protecting the many

interests at stake.   See MBTA, 430 Mass. at 786-787, 790-791.

On the other hand, "it seems plain that the Pacheco Law as

written does not contemplate the situation presented here."

SEIU I, 469 Mass. at 327.
                                                                    14

       In light of the fact that the parties find themselves in a

situation not expressly addressed in the statute, it is hardly

surprising that the union's challenges to DMH's unilateral

decision to forego the Pacheco procedures began by raising the

issue first with DMH and the Auditor and, thereafter, by

awaiting enforcement action from the Attorney General.

Cf. MBTA, 430 Mass. at 791 (law entrusts Auditor with "broad

grant of power").    The union brought suit in 2012 only when

those efforts proved fruitless.    The union's standing to bring

the action was then litigated, and it was only in 2014, after

the 2009 contracts already had expired and DMH had exercised its

contractual options, that we clarified the procedure to be

followed in these circumstances.    See SEIU I, 469 Mass. at 335-

336.    We would not expect to confront such a situation again,

given that in the future the agency's determination that a

contract is not a privatization contract may be challenged

forthwith in a declaratory judgment action with injunctive

relief available.    Parties entering into any such contracts, let

alone exercising rights of renewal, prior to adjudication of the

challenge, would do so at their peril.

       That being said, this is not a case where the litigation

was brought to challenge renewal contracts in the first instance

on the basis that the predecessor contracts were invalid. To the

contrary, the union challenged the predecessor 2009 contracts
                                                                     15

well before their expiration and now, only due to delays in

adjudication, challenges the vitality of the extant renewal

contracts.    DMH and the vendors entered into those renewal

contracts fully aware of the challenges lodged to the validity

of the contracts pursuant to which the options to renew were

exercised.    In essence, DMH would have the result turn on the

fortuity of the clock running out on the 2009 contracts before

the litigation concluded.    We fail to see how it serves the

purpose of the Pacheco Law to permit the passage of time to be

dispositive in such circumstances.    See Mogelinski II, 473 Mass.

at 169 (looking to statutory purpose).    Cf. Commonwealth v.

Vega, 449 Mass. 227, 233 (2007) (courts do not interpret statute

to produce an illogical result); 2A N.J. Singer & J.D. Shambie

Singer, Statutes and Statutory Construction § 45:12 (7th ed.

rev. 2014).

    The union's claim that the 2009 contracts are invalid and

that they and the resulting renewal contracts are thereby void,

gives rise to a live controversy.    SEIU has a legally cognizable

interest in the outcome of a declaration as to the validity and

voidness of the 2009 contracts.    Such a declaration implicates

the consequent inability of DMH effectively to have exercised

rights of renewal pursuant to such contracts and, insofar as

such a declaration would permit any such ongoing renewal

contracts to be set aside, would itself provide a remedy.       In
                                                                    16

these circumstances, declaratory relief is not merely advisory

and the union's claim is not moot.

     c.   The impact of Section 53.    DMH maintains, however, that

because all subsequent agreements, including the renewal

contracts here, are not "privatization agreements," and thus are

not required to comply with §§ 54-55, they therefore are immune

from the effects of a declaration as to the invalidity and

voidness of the initial agreements pursuant to which they were

made.   This reading is not supported by the plain language of

§ 53 itself, by the statute read as an harmonious whole, or by

legislative history.

     We have no quarrel with the view urged by DMH that the

language of § 53 is fairly read as subjecting to statutory

requirements and review processes only new privatization

agreements, entered into after the statute became effective,

that privatize for the first time services that were until then

provided by government employees.     "Any subsequent agreement"

continuing those privatized services is "not a privatization

contract."   G. L. c. 7, § 53.   By statutory definition, certain

new agreements, such as those involving information technology,

legal, or consulting services, also are not privatization
                                                                    17

contracts.9   See id.   As to subsequent agreements, of which

renewal agreements are a subset, the use of the word "any" as a

modifier is certainly consistent with the reading that all such

agreements are exempt.    See Hollum v. Contrib. Retirement Appeal

Bd., 53 Mass App. Ct. 220, 223 (2001).     Contrary to the

defendants' view, however, subsequent agreements are not exempt

from all challenges.     By contrast, because they are not required

to comply with the rigorous strictures and review processes of

the Pacheco Law, they are exempt only from challenges based on

their own noncompliance with that law.

     There is nothing in the language of § 53 that renders the

exempt categories bullet proof from challenges that may be made

to contracts as such.    The exempt agreements, as any contracts,

are subject to all manner of common law contract claims, ranging

from simple breaches to issues such as fraud, unconscionability,

or the ultra vires doctrine, some of which could, if proven,

result in an agreement being rendered void.     See, e.g.,

Massachusetts Mun. Wholesale Elec. Co. v. Danvers, 411 Mass. at

     9
       "A contract for information technology services shall not
be considered a privatization contract if an employee
organization recognized under [G. L. c. ] 150E, as the exclusive
representative of an affected employee . . . agrees to the terms
of the contract in writing. An agreement solely to provide
legal, management consulting, planning, engineering or design
services shall not be considered a privatization contract."
G. L. c. 7, § 53.
                                                                   18

54 (contract void ab initio as ultra vires); Restatement 2d of

Contracts, § 7, comment b (1981) (circumstances such as fraud or

duress allow aggrieved party to void contract).   Such

challenges -- not based on the renewal agreements' noncompliance

with Pacheco Law requirements -- may seek directly to set aside

an exempt contract because it is, for example, beyond the

department's authority and therefore ultra vires or the product

of fraud.

    Challenges also can seek indirectly the same result as to

agreements ancillary to a void contract, because that contract

is thereby rendered incapable of giving rise to any rights or

duties.   See 17A C.J.S. Contracts § 374 (2011) ("When parties to

an illegal contract attempt to extend or renew it by entering

into a new agreement, the new contract . . . is illegal and

unenforceable").   Similarly, the latter type of challenge may

affect "subsequent agreements" as the byproduct of a timely

challenge to the validity of earlier contracts under the Pacheco

Law, whether by virtue of the Auditor's objection pursuant to

§ 55, an action in the nature of certiorari challenging the

Auditor's decision, or a declaratory judgment action challenging

the agency's non-compliance with §§ 54 and 55.    Nothing in the

express language of § 53 shields exempt agreements from such

claims.
                                                                  19

    The silence of § 53 as to whether exempt agreements are

immunized from all claims must be viewed in light of the

statutory scheme as a whole.   See Pentucket Manor Chronic Hosp.,

Inc. v. Rate Setting Comm'n, 394 Mass. 233, 240 (1985) (statutes

must be construed "as a harmonious whole").   Sections 54 and 55

plainly contemplate that privatization agreements, as defined in

§ 53, that are entered into absent compliance with the

requirements set forth in those sections, will be deemed void.

To imply that § 53 draws a cloak of immunity over renewal

contracts made pursuant to a contract voided by virtue of §§ 54

and 55 would countermand the clear mandate of those sections,

i.e., that agencies must comply with the Pacheco Law when

entering into agreements to privatize services.

    Nor does the legislative history support the view that the

exemption of "subsequent agreements" from the definition of

"privatization contracts" was intended to render such agreements

wholly unreviewable.   We look to legislative history because

"statutes are to be interpreted, not alone according to their

simple, literal, or strict verbal meaning" (citation omitted),

Sullivan v. Chief Justice for Admin. & Mgt. of the Trial Court,

448 Mass. 15, 24 (2006), and "[u]nderstanding the intent of the

Legislature" can be "far more important than a literal

dictionary meaning."   Quincy City Hosp. v. Rate Setting Comm'n,

406 Mass. 431, 449 (1990).
                                                                    20

    While the language of the exemption makes one purpose self-

evident -- it prevents duplicative review of already-approved

contracts -- the legislative history of the Pacheco Law suggests

one further goal.    The provision was a means of dealing with

contracts that had already privatized state services prior to

the effective date of the statute.    It was added as an amendment

to ensure that agreements continuing those contracts in place

after the statute became effective were not to be upended by

virtue of not having been or thereafter being in compliance with

the statutory vetting process.    See Anti-Privatization Bill

Would Stall Weld Push, The Boston Globe, March 3, 1993 at 22

Senator Marc Pacheco, the bill's sponsor, explained that as to

"private services that are out there right now . . . [their]

renewal is exempt from the bill."    State House News Serv. (June

16, 1993).    On the other hand, nothing in the law's history

suggests that the Legislature intended to protect the renewal of

invalid contracts.

    DMH contends, however, that the Legislature intended the

statute to provide a safe harbor for subsequent agreements,

including renewal contracts, in order to ensure finality and

attendant certainty for the parties to the contracts and those

they serve.   On this view, § 53 functions as an implicit statute

of repose.    Challenges belatedly invalidating renewal contracts

as the result of statutory noncompliance in connection with the
                                                                    21

predecessor privatization contract would interfere with this

salutary goal.   There is merit to this point, but it does not

justify the immunity that DMH seeks for renewal contracts.     It

goes instead to the timing of such challenges.

     We are mindful that the statutory scheme recognizes the

need for expedition in the review of privatization contracts.

That is apparent in the short timelines set forth in § 55 for

agency initiated review by the Auditor, and the fact that, if

challenged thereafter in an action in the nature of certiorari,

that action should be brought and adjudicated promptly.   Given

this, we have indicated the need for similar dispatch in the

one-off situations, as here, prompting declaratory judgment

actions.   See SEIU I, 469 Mass. at 337 n.12.

     Ordinarily, we would expect that a union challenging an

agency's decision to forego Pacheco Law review for alleged

privatization contracts would bring a declaratory judgment

action promptly after the agency's decision becomes public

information.10   Ascertaining whether the agency's assessment of

the nature of the contract is correct, and therefore does not

require Pacheco Law review, is the pivotal issue requiring

     10
       Given the importance of speedy resolution, in many cases
even limited delay might allow the defendant agency to raise the
defense of laches. See SEIU I, 469 Mass. at 337 n.12. See also
Mosley v. Briggs Realty Co., 320 Mass 278, 283 (1946) (laches
requires delay and prejudice).
                                                                    22

resolution.    Ideally, suit could be brought before the contract

is made or as soon thereafter as feasible and, in most

circumstances, well before any renewal or other subsequent

agreements would be in place, with injunctive relief sought as

appropriate.   The matter should be litigated and adjudicated on

an expedited basis.

    To the extent that suit cannot reasonably be brought until

the contract is already in place, and in the presumably rare

instances where the initial privatization contract is of such

short duration that its renewal may take effect before the case

is adjudicated, the result of a determination that the initial

agreement is in fact a privatization agreement will be to

declare such a contract invalid and thereby void and to set

aside any renewal contracts made pursuant to it.    Timeliness

issues for laches purposes are, of necessity, to be decided on a

case-by-case basis, with the guiding principle being fairness;

parties must not sit on their hands.    See, e.g., West Broadway

Task Force v. Boston Hous. Auth., 414 Mass 394, 400 (1993)

(laches operates where there is "unreasonable delay").

    As discussed, the case before us is sui generis in this

regard.   The union brought this suit in the absence of an

express statutory remedy and after having made reasonable, if

ultimately fruitless and time consuming, administrative efforts

to challenge the initial contracts.    In the face of this
                                                                   23

challenge to the validity of the agreements, the agency

exercised its rights under them to renew.     In these unusual

circumstances, it appears that the union did not sit on its

hands.

    To construe § 53 as barring the union from seeking to set

aside the extant renewal contracts as the byproduct of a

declaration as to the invalidity of the initial contracts would

contravene the statutory mandate that noncompliance with its

requirements has significant repercussions.    It would also, in

these circumstances, render meaningless the timely challenge

brought to the agency's decision not to submit the 2009 contract

to the Auditor, in essence inoculating the agency from review

and allowing it to evade the Pacheco Law with impunity by virtue

of the passage of time.   As we stated in SEIU I, 469 Mass.

at 336,

         "In short, it cannot be that there is no recourse
    where an agency, believing the Pacheco Law is inapplicable
    in a particular situation, simply opts not to comply with
    its terms. The Pacheco Law could not function as the
    Legislature intended if an agency could decide,
    unilaterally and without input from the Auditor or the
    union, that its proposed contracts did not fall within the
    provisions of G. L. c. 7, § 53. Indeed, a public agency
    would have little incentive to adhere to the Pacheco Law's
    requirements were its decision to evade those requirements
    immune from any review. DMH's belief that the Pacheco Law
    does not apply to its proposed contracts cannot be
    understood to inoculate it against efforts to demonstrate
    otherwise. Such an approach would render the statute
    toothless, confounding the Legislature's efforts to ensure
    that privatization does not occur at the expense of public
    welfare."
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    Here, as in SEIU I, DMH urges an interpretation of the

Pacheco Law which would insulate potential privatization

contracts from the very review that the law mandates.   We do not

believe the Legislature contemplated such a result.

    3.   Conclusion.   The judgment dismissing the amended

complaint is vacated, and the matter is remanded for further

proceedings consistent with this opinion.   Given the many delays

that already have occurred, and the 2017 expiration of the

extant renewal contracts, such further proceedings are to take

place forthwith on an expedited basis.

                                   So ordered.