Bellermann v. Fitchburg Gas & Elec. Light Co.

• Decision Date: 29 July 2016
• Docket Number: SJC–11979.
• Citation: 54 N.E.3d 1106,475 Mass. 67
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Marcia D. BELLERMANN & others v. FITCHBURG GAS AND ELECTRIC LIGHT COMPANY.

475 Mass. 67

54 N.E.3d 1106

Marcia D. BELLERMANN & others¹

v.FITCHBURG GAS AND ELECTRIC LIGHT COMPANY.

SJC–11979.

Supreme Judicial Court of Massachusetts, Worcester.

Submitted March 10, 2016.

Decided July 29, 2016.

Gavin J. Rooney, of New Jersey (Anne W. Chisholm, Boston, & Eric R. Passeggio with him) for the defendant.

C. Deborah Phillips (Barry M. Altman & Edwin H. Howard with her) for the plaintiffs.

Robin L. Main, for Massachusetts Electric Company & others, amici curiae, submitted a brief.

Present: GANTS, C.J., SPINA, CORDY, BOTSFORD, DUFFLY, LENK, & HINES, JJ.²

DUFFLY

, J.

In Bellermann v. Fitchburg Gas & Elec. Light Co., 470 Mass. 43, 18 N.E.3d 1050 (2014)

(Bellermann I ), we affirmed a Superior Court judge's denial of a motion for class certification of residential and business customers of the defendant, Fitchburg Gas and Electric Light Company (FG & E).³ In that case, the plaintiffs, who lost electric power during a major winter ice storm in 2008 that struck significant portions of the northeast (Winter Storm 2008), sought class certification under G.L. c. 93A, §§ 9(2) and 11, for themselves and other users of electricity who were injured by FG & E's assertedly inadequate preparation for and response to Winter Storm 2008. See Bellermann I, supra at 44–46, 18 N.E.3d 1050. The plaintiffs' efforts to obtain class certification in that case were premised on FG & E's asserted failure properly to prepare and plan for Winter Storm 2008, which prolonged the power outages the plaintiffs experienced, and on FG & E's deceptive communications made before and during the storm that resulted in the plaintiffs' inability to plan for the extended outages.⁴ See id. at 45, 54, 18 N.E.3d 1050. We concluded that there was no abuse of discretion in the judge's determination that the record did not support class certification on these theories, because the asserted injuries suffered by class members were too dissimilar. See id. at 53–57, 18 N.E.3d 1050.

We also observed, however, that the plaintiffs had proposed an alternative theory of injury under G.L. c. 93A, §§ 9(1)

and 11, maintaining that they had “paid for a level of emergency preparedness, efficient restoration, and accurate information,” prior to and during Winter Storm 2008, which FG & E unfairly and deceptively had failed to provide, and therefore that the services they received were worth less than what they had paid for those services. See id. at 54 n. 10, 18 N.E.3d 1050. Because the plaintiffs had not asserted this theory as a basis for recovery in their motion for class certification, we did not address it. See Leardi v. Brown, 394 Mass. 151, 155, 474 N.E.2d 1094 (1985).

Following our decision affirming the denial of the first motion for class certification, the plaintiffs filed a renewed motion in the Superior Court for class certification, pursuant to G.L. c. 93A, §§ 9(2)

and 11, based on the same record, and premised on this alternate theory of injury. In their second motion for class certification, the plaintiffs contended that, beginning in 1992, and extending for a period of some sixteen years, FG & E failed to comply with Department of Public Utilities (DPU) regulations regarding emergency storm preparedness.⁵ They maintain that they suffered economic injury by overpaying for a level of emergency preparedness required by DPU's regulations, which FG & E unfairly and deceptively failed to provide, although the rates charged were based on FG & E's assumed compliance with those regulations.⁶ The plaintiffs do not assert that members of the putative class suffered any loss of power or interruption of service, as a class, during this period.

Following a hearing, a different Superior Court judge certified two classes of FG & E business and residential customers who paid rates for electric service at any point between January 7, 2005, and January 7, 2009.⁷ The judge then reported the class certification order to the Appeals Court, pursuant to Mass. R. Civ. P. 64(a)

, as amended, 423 Mass. 1403 (1996), on FG & E's motion, and we allowed FG & E's application for direct appellate review.⁸

We conclude that, in these circumstances, the plaintiffs' assertion of overpayment for FG & E's services does not set forth a cognizable injury under G.L. c. 93A, §§ 9(1)

and 11, and thus does not support class certification pursuant to that statute. We therefore vacate the order certifying the class.⁹

1. Background. The facts underlying the plaintiffs' request for class certification are set forth in some detail in Bellermann I. We briefly summarize those background facts that bear on the issues raised by the plaintiffs' renewed motion for class certification. See Weld v. Glaxo Wellcome Inc., 434 Mass. 81, 85–86, 746 N.E.2d 522 (2001)

.

The plaintiffs' allegation that FG & E was unprepared for major storms throughout the class period is based on the results of an investigation into FG & E's preparation for and response to Winter Storm 2008, that was conducted by DPU pursuant to its regulatory authority. See G.L. c. 164, §§ 1E

, 76. In a 215–page decision, DPU found that there had been “numerous and systematic” deficiencies in the way in which FG & E prepared for and responded to Winter Storm 2008. D.P.U. 09–01–A, at xiii. DPU concluded that each of these deficiencies constituted a violation of FG & E's obligation to provide safe and reliable service. See id. at 52, 60, 72, 83–84, 102, 121, 125. As relevant here, DPU also found that some of the deficiencies stemmed from apparent disregard for certain of its prior directives and orders concerning the manner in which electric companies in Massachusetts were to plan and prepare for major storms and other emergencies, that were in effect during the class period. For example, in 1992, also following a major storm, DPU ordered Massachusetts electric companies to assess their emergency response plans in relation to those of other electric companies, and to consider the impact of extreme weather in their planning activities. FG & E, however, did not undertake such an assessment, and according to the judge's report, at no point during the class period would FG & E's emergency response plan have been adequate to respond to a storm as extreme and widespread as Winter Storm 2008. As FG & E conceded during hearings before DPU, rather than preparing for a storm of that magnitude, it believed that it could “ramp up” its emergency operations to respond to such a severe storm.

In support of their renewed motion for class certification, the plaintiffs argued in essence that DPU's determination as to FG & E's regulatory noncompliance had been found as fact by the Superior Court judge who ruled on the first motion for class certification, that this finding established FG & E's regulatory noncompliance, and that the noncompliance was alone sufficient to support the plaintiffs' claim of economic injury. The plaintiffs contend that, in seeking class certification under G.L. c. 93A, §§ 9(2)

and 11, they were not required to show that they suffered actual injury, such as an interruption in electrical service.

The crux of FG & E's argument in the Superior Court was that the plaintiffs' overpayment theory fails as a matter of law because it is premised on an incorrect assumption implicit in the plaintiffs' claim that they suffered an injury merely by paying a particular utility rate.¹⁰ The motion judge concluded, to the contrary, that the plaintiffs' overpayment theory of injury was viable, based on the plaintiffs' assertion “that they have paid for more in terms of quality and reliability of service than they received.” The judge certified two classes, one consisting of FG & E's residential customers and one of its business customers.

2. Class certification. a. Standard of review. Review of a decision on class certification is undertaken with due consideration of the broad discretion afforded in allowing or denying class certification. Nonetheless, pursuant to G.L. c. 93A, discretion to deny class certification is tempered by the “public policy of the Commonwealth [which] strongly favors G.L. c. 93A class actions.” Feeney v. Dell Inc., 454 Mass. 192, 200, 908 N.E.2d 753 (2009)

. See Aspinall v. Philip Morris Cos., 442 Mass. 381, 391–392, 813 N.E.2d 476 (2004) Aspinall ). Although our “review asks only whether that discretion has been abused,” an error of law in ordering a class certification renders that decision an abuse of discretion. Salvas v. Wal–Mart Stores, Inc., 452 Mass. 337, 361, 893 N.E.2d 1187 (2008)

, citing Weld v. Glaxo Wellcome Inc., 434 Mass. at 84–85, 746 N.E.2d 522.

To succeed in their motion for class certification under G.L. c. 93A, § 9(2)

or 11,¹¹ the plaintiffs must show that they are entitled to seek relief under G.L. c. 93A, § 9(1) or 11, for injuries resulting from the defendant's unfair or deceptive act or practice.¹² The plaintiffs also must show that the assertedly unfair or deceptive act or practice that caused their injuries “caused similar injury to numerous other persons similarly situated,” and that they would “adequately and fairly represent[ ] such other persons.” G.L. c. 93A, §§ 9(2), 11. See Bellermann I, 470 Mass. at 52, 18 N.E.3d 1050. The requirement of showing that a plaintiff suffered an injury may be met by showing either an economic or a noneconomic injury. See Hershenow v. Enterprise Rent–A–Car Co. of Boston, 445 Mass. 790, 802, 840 N.E.2d 526 (2006). A party seeking class certification “need only provide ‘information sufficient to enable the motion judge to form a reasonable judgment’ that certification requirements are met.” Aspinall, supra at 392, 813 N.E.2d 476, quoting Weld v. Glaxo Wellcome Inc., supra at 87, 746 N.E.2d 522.

With these standards in mind, we turn to consideration whether the plaintiffs have provided “information sufficient to ... form a reasonable judgment” that they suffered an economic injury. See id.

b. Class certification claim under G.L. c. 93A, § 9

. The plaintiffs argue that FG & E's...