Service Employees International Union, Local 509 v. Department of Mental Health

14 N.E.3d 216, 469 Mass. 323
CourtMassachusetts Supreme Judicial Court
DecidedAugust 15, 2014
DocketSJC 11544
StatusPublished
Cited by24 cases

This text of 14 N.E.3d 216 (Service Employees International Union, Local 509 v. Department of Mental Health) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Service Employees International Union, Local 509 v. Department of Mental Health, 14 N.E.3d 216, 469 Mass. 323 (Mass. 2014).

Opinion

*324 Lenk, J.

The plaintiff, Service Employees International Union, Local 509 (union), appeals from an order of a Superior Court judge dismissing its complaint for declaratory judgment pursuant to G. L. c. 231 A, §§ 1, 2, and 5. In that complaint, the union alleged that the Department of Mental Health (DMH) violated the Massachusetts privatization statute, G. L. c. 7, §§ 52-55 (Pacheco Law), by entering into contracts with private entities to obtain services substantially similar to those performed by members of the union, but failing to comply with relevant statutory obligations. DMH filed an answer as well as a motion for judgment on the pleadings pursuant to Mass. R. Civ. P. 12 (c), 365 Mass. 754 (1974). After a hearing, the judge granted DMH’s motion, which she treated as a motion to dismiss for lack of subject matter jurisdiction under Mass. R. Civ. P. 12 (b) (1), 365 Mass. 754 (1974). The judge determined that the union lacked both direct and associational standing to seek declaratory relief and, additionally, that the union’s failure to join necessary parties constituted a separate jurisdictional bar requiring dismissal. The judge did not err in declining to consider the union’s complaint on the basis of its failure to name all necessary parties. However, because we conclude that the union has direct standing to seek a declaratory judgment under G. L. c. 231A that would invalidate the contracts at issue, we remand the case to the Superior Court for the limited purpose of allowing the union to seek leave to amend its complaint by adding all necessary parties. An order of dismissal shall enter if the union does not take such action within thirty days of the issuance of the rescript in this case.

1. Background. The following facts are taken from the union’s complaint. For over a decade, DMH, which provides mental health services to clients throughout the Commonwealth, has employed case managers who are members of the union. Case managers are responsible for conducting initial need assessments, developing individualized service plans, and maintaining ongoing client contact and advocacy. In late 2008 or early 2009, DMH entered into contracts with private entities to initiate a new program, community based flexible supports (CBFS). CBFS services, which were intended to facilitate more personalized client assistance, overlapped in certain respects with services previously provided by DMH case managers. 2 *325 DMH concluded that the contracts into which it sought to enter did not constitute “privatization contracts” within the meaning of G. L. c. 7, § 53, 3 and that it was therefore not subject to the terms of the Pacheco Law. For this reason, throughout the contracting process, DMH did not comply with any of the requirements enumerated in G. L. c. 7, §§ 52-55, discussed in more detail below, nor did it notify the union or the Auditor of the Commonwealth that it had entered into such contracts. During fiscal year 2009, approximately one hundred case managers, all members of the union, were laid off. The union alleges that these layoffs resulted from implementation of DMH’s CBFS contracts because the services provided by private entities were substantially similar to those previously offered by the case managers. 4

In early 2009, the union notified the Auditor, who is endowed by G. L. c. 7, § 55, with a “broad grant of power” to review all privatization contracts for compliance with the Pacheco Law, Massachusetts Bay Transp. Auth. v. Auditor of the Commonwealth, 430 Mass. 783, 791 (2000) (MBTA), that DMH had declined to follow the terms of the Pacheco Law despite having contracted *326 with private entities in order to implement the CBFS program. On September 15, 2010, after soliciting information from DMH about the contracts at issue, the general counsel for the Auditor issued a memorandum to both parties in which he concluded that the contracts in question constituted privatization contracts under the Pacheco Law and that, accordingly, DMH had erred in declining to comply with the Pacheco Law’s requirements. 5 Counsel forwarded this memorandum to the office of the Attorney General “to take whatever steps ... are appropriate.” The Attorney General took no action as a result of the Auditor’s findings. Following the issuance of the Auditor’s report, DMH has not taken steps to comply with the terms of the Pacheco Law in connection with its implementation of the CBFS program, and has not reinstated the case managers who lost their jobs.

On February 15, 2012, the union filed a complaint in the Superior Court seeking a declaratory judgment pursuant to G. L. c. 231 A, §§ 1, 2, and 5. The complaint alleged that DMH had violated the Pacheco Law by entering into contracts with private entities without adhering to the requirements set forth in G. L. c. 7, §§ 52-55, and requested a declaration that the contracts at issue are invalid, as well as equitable relief including monetary damages and reinstatement of the case managers who were laid off. In its answer, DMH averred that there was no violation because the provisions of the Pacheco Law were not applicable to the CBFS contracts.

After a hearing, the judge allowed DMH’s motion for judgment on the pleadings, which consisted only of the union’s complaint and DMH’s answer. She determined that the union lacked both direct and associational standing to pursue its claim, concluding that, where an agency “believes that the law is not applicable in a particular situation,” it owes no duty to an employee organization or its members. The judge also concluded that the Superior Court lacked jurisdiction because the union had failed to join necessary parties to the action pursuant to G. L. c. 231A, § 8, and Mass. R. Civ. P. 19, 365 Mass. 765 (1974). We granted the union’s petition for direct appellate review.

2. Discussion. We are asked to determine whether the union has standing to seek declaratory relief where DMH did not comply *327 with the provisions of the Pacheco Law, given its unilateral determination that the law was inapplicable to its proposed contracts with outside vendors. According to the union, DMH breached its statutory duties when it opted not to follow the procedures set forth in the Pacheco Law, thereby preventing the union from protecting the interests and employment rights of its membership. This inability to fulfill its core mission, the union argues, constituted a legally cognizable injury sufficient to confer direct standing for the purposes of G. L. c. 231 A.

DMH maintains that the Pacheco Law provides no benefits to the union itself, as distinct from its members, and that the union’s rights under the Pacheco Law exist solely to assist State employees. Therefore, DMH contends, it owes no duty to the union under the Pacheco Law, and the union has no standing to seek declaratory relief. In a related vein, DMH argues that the union has suffered no legally cognizable injury that could serve as a predicate for direct standing.

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Bluebook (online)
14 N.E.3d 216, 469 Mass. 323, Counsel Stack Legal Research, https://law.counselstack.com/opinion/service-employees-international-union-local-509-v-department-of-mental-mass-2014.