Feeney v. Dell, Inc.

28 Mass. L. Rptr. 652
CourtMassachusetts Superior Court
DecidedOctober 4, 2011
DocketNo. MICV200301158
StatusPublished

This text of 28 Mass. L. Rptr. 652 (Feeney v. Dell, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Feeney v. Dell, Inc., 28 Mass. L. Rptr. 652 (Mass. Ct. App. 2011).

Opinion

Wilkins, Douglas H., J.

The defendants, Dell, Inc. and certain affiliates (collectively, “Dell”), argue that this Court must disregard the Supreme Judicial Court’s rescript invalidating Dell’s arbitration agreement in this very case, Feeney v. Dell, Inc., 454 Mass. 192 (2009), because of the United States Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011). In the plaintiffs’ view, that would amount to disobedience.

These arguments arise in a putative consumer class action brought by the late John A. Feeney3 and Ded-ham Health and Athletic Club challenging Dell’s allegedly unfair and deceptive collection of sales tax on computer service contracts. In the wake of Concepcion, Dell has filed its Renewed Motion to Confirm Arbitration Award of Dismissal With Prejudice (“Motion”). The Motion presents difficult issues under the law of the case doctrine, retroactivity rules and, ultimately, preemption principles under the Federal Arbitration Act, 9 U.S.C. §2 (“FAA”). I conclude that this Court has the power and duty to depart from the rescript in this case if the two decisions cannot be reconciled, but that Feeney survives Concepcion under applicable preemption law. After hearing and review of the written submissions, the Motion is DENIED.

BACKGROUND

The plaintiffs sued Dell in 2003 under G.L.c. 93A, on behalf of a putative class of Dell customers. Dell successfully moved for an order compelling arbitration. Feeney v. Dell, Inc., 2004 WL5665091 (Middlesex Super. 2004) (Bohn, J.). The arbitrator rejected class [653]*653arbitration and dismissed the individual plaintiffs’ claims with prejudice. The plaintiffs moved to vacate the decision. This Court denied the motion and confirmed the arbitration award. Feeney v. Dell, Inc., 23 Mass. L. Rptr. 651 (Middlesex Super. 2008) (Fremont-Smith, J.). On appeal in 2009, the Supreme Judicial Court reversed, holding that the agreement barring class actions was unenforceable and remanded the case for further proceedings, including the filing of a third amended complaint. See Feeney, 454 Mass. at 205-14. Relying upon the Supreme Judicial Court’s opinion, this Court denied the defendants’ motion to dismiss the third amended complaint. Feeney v. Dell Computer Corp., 26 Mass. L. Rptr. 297 (Middlesex Super. 2009) (Fremont-Smith, J.).

The Dell Arbitration Clause

The Motion seeks enforcement of the paragraph entitled “Binding Arbitration” in the plaintiffs’ contracts with Dell (“Dell Arbitration Clause”).4 The Supreme Judicial Court interpreted the Dell Arbitration Clause as follows:

The “Dell Terms and Conditions of Sale” [footnote omitted] in effect at the time of the plaintiffs’ purchases contain an arbitration clause compelling arbitration of any claim against Dell (but not binding Dell in connection with any claims it may have against a customer) and mandating that any such claims be arbitrated on an individual basis. [Footnote omitted.] Specifically, the terms provide that claims against Dell “arising from or relating to this Agreement” shall be resolved “exclusively and finally” by arbitration, and that the arbitration “will be limited solely to the dispute or controversy between Customer and Dell.” [Footnote omitted.] The effect of these provisions is to prohibit a Dell customer from participating in a class action—whether by litigation or arbitration—against Dell. [Footnote omitted.]

Feeney, 454 Mass. at 194-95.

The Supreme Judicial Court’s Decision

After reviewing the facts, the Supreme Judicial Court agreed with the plaintiffs that the Dell’s class action prohibition “contravenes Massachusetts public policy.” Id. at 199, quoting plaintiffs’ brief. It concluded that, “expressions of three branches of Massachusetts government indicate that the public policy of the Commonwealth strongly favors G.L.c. 93A class actions.” Id. at 200.

Recognizing that “causes for which advocates cannot be obtained are, in effect, not adjudicable” [citations omitted], the 1969 amendments to G.L.c. 93A included provisions for a minimum recovery, attorney’s fees, treble damages in certain cases, and most relevant to this case, class actions . . . Permitting consumers to sue as a class cured the defect inherent in the consumer protection statute that no matter how egregiously a consumer might have been wronged, “the economics of a litigation designed to seek redress precluded an effective attack.” [Citation omitted.]

Id. at 201-02. It also noted that prohibition of a class action “undermines the public interest in deterring wrongdoing” and “negatively affects the rights of those unnamed class members on whose behalf the class action would proceed.” Id. at 203.

These broad pronouncements aside, Feeney turned on the specific facts of this case. “The right to a class action in a consumer protection case is of particular importance where, as here, aggregation of small claims is likely the only realistic option for pursuing a claim.” Id. at 202. It held that “Dell’s class action prohibition undermines this policy and, in so doing, defeats ‘the presumption’ that arbitration provides ‘a fair and adequate mechanism for enforcing statutory rights.’ ” Id. at 202 (citation omitted).

The Court rejected Dell’s claim that the plaintiffs had not shown that a class action was necessary to obtain relief for their statutory rights. Among other authority, it cited the very case that the United States Supreme Court overruled in Concepcion—Discover Bank v. Superior Court, 36 Cal.4th 148, 162, 30 Cal.Rptr.3d 76, 113 P.3d 1100 (2005). It stated that, even though Dell had not attempted to displace a statutory scheme:

The claimed damages here are small (Feeney claims damages of $13.65, and Dedham Health claims damages of $215.55), and we need not engage “in an exhaustive analysis" to determine that the costs of bringing such claims are “prohibitive.” [Citation and footnote omitted.] It is sufficient that the plaintiffs’ claims are of a class of disputes that “predictably involve small amounts of damages.” Discover Bank v. Superior Court, 36 Cal.4th 148, 162, 30 Cal.Rptr.3d 76, 113 P.3d 1100 (2005). The defendants’ argument that the statutory availability of attorney’s fees, damages, and multiple damages to a prevailing plaintiff under G.L.c. 93A would “enable the plaintiffs to vindicate valid claims without a class action” is unpersuasive; these statutory provisions are not sufficient to ensure that a consumer or business with a small-value claim will be able to find an attorney willing to take the case absent the ability to aggregate claims. See Gentry v. Superior Court, 42 Cal.4th 443, 464, 64 Cal.Rptr.3d 773, 165 P.3d 556 (2007), quoting Discover Bank v. Superior Court, supra at 162, 30 Cal.Rptr.3d 76, 113 P.3d 1100 .. . This is the import of the Legislature’s 1969 amendment of G.L.c. 93A to provide for class actions in addition to statutory damages and attorneys fees.

Feeney, 454 Mass. at 204. In footnote 29, the Court stated that it was “not dispositive whether, as the defendants claim, the plaintiffs did not present the motion judge in the Superior Court with proof that their claims were not individually viable.” Id.

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Bluebook (online)
28 Mass. L. Rptr. 652, Counsel Stack Legal Research, https://law.counselstack.com/opinion/feeney-v-dell-inc-masssuperct-2011.