BLS Blog

It was another eventful year at the BLS, which included Judge Green replacing Judge Kaplan in the BLS1. As 2020 concludes, check out our top five widely read posts:

• Facebook Ordered to Turn Over Internal Investigation Documents to Massachusetts Attorney General: Judge Davis of the BLS ordered Facebook to produce documents to Massachusetts Attorney General Maura Healey (AG). The AG obtained the order while investigating Facebook’s policies and protections related to user data.
• Community Health Systems Affiliate Found Subject to Personal Jurisdiction in Massachusetts: In Steward Health Care System v. CHSPSC, Judge Sanders found that CHSPSC, an affiliate of Community Health Systems (CHS), is subject to personal jurisdiction in Massachusetts for claims made under transition-services agreement (TSAs) signed along with an asset-purchase agreement (APA).
• lululemon’s Motion to Dismiss Eviction Case Denied: In CWB Retail Limited Partnership v. Lululemon USA, Inc., lululemon moved to dismiss a summary-process action brought by its landlord, CWB Retail Limited Partnership.
• Comcast Prevails in Dispute over Interpretation of Commercial Lease: Maynard Industrial Properties Associates Trust (MIPA), a commercial landlord, sued Comcast of Massachusetts III, Inc. (Comcast). The dispute focused on the amount Comcast would owe under an extension of the amended lease.
• John J. Donovan Loses Again: Court Rules that Award in Derivative Action be Distributed Based on Shareholders’ Investment to Avoid Windfall to Disloyal Fiduciary: In Brining v. Donovan, the latest blow to former MIT business professor, John J. Donovan, Judge Davis held that shareholders in Donovan’s failed internet start-up, SendItLater (SIL), could recover more than $700,000 in attorneys’ fees in addition to a December 2019 award of $1.57 million in damages.

In Hershey v. Mount Vernon Partners, LLC, Judge Green faced dueling motions to dismiss in a dispute arising from the purchase of an “ultra-luxury” condominium in Beacon Hill. Judge Green granted Brett Hershey’s motion, in part, dismissing counterclaims for interference with business relations and violation of the Massachusetts Wiretap Act brought by the defendants, Mount Vernon Partners, LLC, Marcel D. Safar, Chevron Partners, LLC and Chevron Builders, LLC. Judge Green also denied most of the defendants’ motion to dismiss, allowing all but one of Hershey’s claims (a claim against Safar in his individual capacity) to proceed.    

In Brining v. Donovan, the latest blow to former MIT business professor, John J. Donovan, Judge Davis held that shareholders in Donovan’s failed internet start-up, SendItLater (SIL), could recover more than $700,000 in attorneys’ fees in addition to a December 2019 award of $1.57 million in damages. Relying on equitable principles, Judge Davis also prohibited Donovan’s company and SIL shareholder, Securenet Holdings, LLC (Securenet), from sharing in the award. Judge Davis also ruled that the award must be distributed to the remaining shareholders based on each shareholder’s investment, rather than per-share basis, so as to render shares obtained by Donovan’s wife, Linda Donovan, under “suspect” conditions effectively worthless.

In Crotty v. Continuum Energy Technologies, Judge Salinger granted Thomas Crotty’s special motion to dismiss counterclaims for tortious interference brought by Continuum Energy Technologies (CET) and John Preston under the Massachusetts anti-SLAPP statute.   

This is the latest litigation chapter in "the unravelling of a lengthy business relationship" between CET’s co-founders, John Preston and Christopher Nagel, after Nagel resigned in 2014 to form a competing business, IDL Development, Inc. (IDL). Preston and CET brought claims against Nagel and IDL alleging that Nagel had utilized and exploited CET’s proprietary information without a license. In March 2018, the parties entered into settlement and licensing agreements, under which CET licensed certain intellectual property to IDL. Crotty had participated in these settlement negotiations on behalf of IDL as its lead investor. IDL subsequently defaulted on its payment obligations and declared bankruptcy. 

Emphasizing the concept of “notice pleading” under Mass. R. Civ. P. 8, Judge Salinger recently denied a gelatin factory’s motion to dismiss. In Baranofsky v. Rousselot Peabody, Inc., a proposed class of neighboring City of Peabody residents brought nuisance, negligence, and trespass claims against Rousselot Peabody, Inc. based on “overpowering smells of rotting flesh” allegedly emitted by its factory.

In Flessas v. Rouisse, Judge Davis denied “dueling motions” seeking enforcement of the parties’ settlement agreement. The settlement agreement arose out of a dispute in which Costas Flessas alleged that he was fraudulently induced into purchasing a 15% interest in the Essex Sports Center, LLC, which operates an indoor sports facility. The settlement agreement provided that certain defendants would purchase Flessas’ ownership interest, who would thereafter release his claims.

In Headquarters Hotel v. LBV Hotel, Judge Davis ruled that Headquarters rejected LBV’s offer to sell a property interest under a right-of-first-offer provision by refusing to execute a confidentiality agreement included with the offer.

Under an agreement between the parties, LBV has an estate for years in the real estate owned by Headquarters at 154 Berkeley Street, Boston, until 2131 (2131 is not a typo). The agreement includes a right-of-first-offer provision. Under that provision, if either party wants to market its interest to third parties, the selling party must first offer the interest to the other party at the same price and on the same terms the selling party would offer to third parties.

In Steward Health Care System v. CHSPSC, Judge Sanders found that CHSPSC, an affiliate of Community Health Systems (CHS), is subject to personal jurisdiction in Massachusetts for claims made under transition-services agreement (TSAs) signed along with an asset-purchase agreement (APA).

Under the APA between Steward Health Care System LLC (Steward) and CHSPSC, Steward agreed to purchase eight hospitals outside Massachusetts. Under the TSAs between the same parties, CHSPSC agreed to provide services to facilitate the transition of the hospitals.

Ruling on a motion seeking the return of inadvertently produced privilege materials, Judge Kaplan elaborated on the meaning of “inadvertent” in the context of Massachusetts Rule of Civil Procedure 26(b)(5) and so-called clawback agreements.  

In Renova Partners v. Michael Singer and Greenlight Development Partners, Judge Sanders granted Greenlight’s motion to dismiss for lack of personal jurisdiction because, among other things, Greenlight was “not even in existence” when the allegedly tortious acts occurred.