In a case that should be of interest to all insurers, the First Circuit Court of Appeals in Full Spectrum Software, Inc. v. Forte Automation Systems, Inc., 858 F.3d 666 (1st Cir. 2017), held that the plaintiff's claim for a violation of Massachusetts General Law, Chapter 93A, the Massachusetts consumer protection statute, was triable to a jury as a matter of right.
Chapter 93A provides a cause of action by a consumer or a business against another business for unfair or deceptive acts or practices. The Massachusetts Supreme Judicial Court has long held that there is neither a statutory right nor a constitutional right to a jury trial under the Massachusetts state constitution for a claim under Chapter 93A. See Nei v. Burley, 388 Mass. 307 (1983). However, the district court in this case allowed the plaintiff's request for a jury trial over the defendant's objection. After the jury found a violation of Chapter 93A by the defendant, the appeal followed.
The First Circuit framed the question as whether the plaintiff had the right to have the Chapter 93A claim heard by a jury pursuant to the Seventh Amendment of the U.S. Constitution. The court stated the analysis it would employ was whether the statute was analogous to common law causes of action ordinarily decided in English courts in the late 18th century. Then, it examined the remedies sought to determine whether it was legal or equitable in nature. Finally, it needed to determine whether Congress had assigned resolution of the claim to a non-Article III body that does not use a jury as a fact finder.
The court found the only question at issue was the first. That is, whether Chapter 93A was analogous to causes of action tried in courts of law in late 18th century England. The court found the plaintiff's claim was one for deception which was not analogous to any 18th century action at law. However, in such a case the court held that the other two factors controlled. Since both dipped in favor of a jury claim, the court upheld the district court's decision.
The court did review its prior decisions as well as Massachusetts case law which found there was no right to a jury under Chapter 93A. However, the court noted that it had never addressed the question of whether there was a right to a jury trial in federal court for Chapter 93A claims pursuant to the Seventh Amendment.
While it upheld the district court's ruling, the court noted that the defendant had not developed a meritorious argument for why the district court erred in submitting the claim to a jury. The court also noted that because of the scope of Chapter 93A, whether the jury was permitted as a matter of right might be based upon the type of claim alleged. The court closed by noting it left for another day a fuller consideration of the extent to which the Seventh Amendment may apply to Chapter 93A claims.
While this is not an insurance case, insurers may see that plaintiffs litigating claims in federal court in Massachusetts may now push more frequently for a jury trial of the Chapter 93A claim. That will complicate trials as both the claim decision and the claims handling will be the subject of the trial.
