Duracraft Corp. v. Holmes Products Corp.

• Court: Appeals Court of Massachusetts
• Writing for the Court: GILLERMAN
• Citation: Duracraft Corp. v. Holmes Products Corp., 678 N.E.2d 1196, 42 Mass.App.Ct. 572 (Mass. App. 1997)
• Decision Date: 08 July 1997
• Docket Number: No. 96-P-1203,96-P-1203
• Parties: , 44 U.S.P.Q.2d 1435 DURACRAFT CORPORATION v. HOLMES PRODUCTS CORPORATION & another. 1

Page 1196

678 N.E.2d 1196

42 Mass.App.Ct. 572, 44 U.S.P.Q.2d 1435

DURACRAFT CORPORATION v. HOLMES PRODUCTS CORPORATION & another. ¹

No. 96-P-1203.

Appeals Court of Massachusetts Suffolk.

Argued Nov. 19, 1996.

Decided May 7, 1997.

Further Appellate Review Granted July 8, 1997.

Richard J. Yurko, Boston, for Holmes Products Corporation.

Dustin F. Hecker, Boston, for Francis E. Marino.

Edward J. Dailey, Boston, for the plaintiff.

Before DREBEN, GILLERMAN and PORADA, JJ.

GILLERMAN, Justice.

A judge of the Superior Court denied the defendants' special motion to dismiss under G.L. c. 231, § 59H, added by St.1994, c. 283, § 1, commonly referred to as the anti-SLAPP ² statute (statute), the material provisions of which we set out in the margin. ³ Thereafter, a single justice of this court granted leave to appeal the judge's ruling to a full panel of this court. The appeal raises, for the first time, issues regarding the scope and application of the statute. ⁴ Certain material facts that provide the background for this controversy are undisputed. From 1987 to July, 1990, the defendant Marino was employed as an engineer for the defendant Holmes Products Corporation (Holmes). In July, 1990, Marino left Holmes to work for the plaintiff Duracraft Corporation (Duracraft), where he was employed until August, 1994. From August, 1994, to 1995, Marino was employed by a third company, Accutek. In December, 1995, Marino returned to Holmes, where he is currently employed.

Shortly after joining Duracraft in 1990, Marino entered into a "Nondisclosure and Non-Competition Agreement" (Agreement) in which he agreed not to disclose any confidential information to third parties. The Agreement also contained a provision stating that Marino is not precluded from disclosing confidential information "upon the lawful demand of any governmental agency (including court process)." Upon such a lawful demand, Duracraft was to have the opportunity to review and comment on the confidential information sought, and to discuss with Mr. Marino and the agency the scope and content of the requested information.

In 1992, while Marino was working for Duracraft, Holmes commenced an opposition proceeding against Duracraft before the Federal Trademark Trial and Appeal Board (TTAB), alleging that Duracraft had improperly registered the word "turbo" as a trademark. In November, 1995, Holmes noticed Marino's deposition in the TTAB proceeding. Marino was then working for Accutek. The deposition was postponed, re-noticed in January of 1996, and taken on February 7, 1996, by which time Marino was again employed by Holmes. Present at the deposition were four attorneys for Holmes, two attorneys for Duracraft, and Marino.

Duracraft, in an unverified complaint filed in March, 1996, alleges that during Marino's deposition, counsel for Holmes elicited, and Marino disclosed, confidential information concerning the "turbo" trademark litigation and related intellectual property matters. Duracraft also alleges that Marino met with attorneys for Holmes prior to the deposition and offered to provide such deposition testimony. The claims against Marino and Holmes are for breach of contract, breach of fiduciary duty, intentional interference with contractual relations, misappropriation of trade secrets, unfair competition, and unfair and deceptive acts and practices. Holmes and Marino then moved to dismiss these claims under the statute.

The judge, relying on what she reasonably perceived to be the objective of anti-SLAPP statutes enacted in other jurisdictions, viz., "to protect citizens from lawsuits designed to silence their opposition concerning a matter of public concern," as well as the public reports of House floor debates, ruled that the mischief the statute was designed to remedy were "incidents involving citizens sued for speaking out on issues of public concern" (emphasis in original). Applying that standard, the judge found that Marino's testimony during his deposition was not protected by the statute because a trademark dispute is not a matter of public concern. Although acknowledging that "[o]n its face, the language of the statute would appear broad enough to apply here," the judge held that the statute was not applicable to this case. To construe the statute as being applicable would, the judge wrote, "substantially alter procedural and substantive law," which a judge should not do "[a]bsent a clear legislative intent to abrogate the existing law." The judge denied the special motion.

1. Matters of public concern. We look first to the words of the statute to determine whether, as Duracraft argues, the statute is confined to claims against persons exercising their right of petition in a matter of public concern. "It is elementary that the meaning of a statute must, in the first instance, be sought in the language in which the act is framed, and if that is plain, ... the sole function of the court is to enforce it according to its terms." Massachusetts Community College Council v. Labor Relations Commn., 402 Mass. 352, 354, 522 N.E.2d 416 (1988). See also Singer, Sutherland Statutory Construction § 46.01, at 81 (5th ed.1992), quoting from Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 194, 61 L.Ed. 442 (1917).

The statute grants to any party against whom a claim is brought by reason of that party's exercise of his "right of petition under the constitution of the United States or of the commonwealth," the right to file a special motion to dismiss the claim. ⁵ The "right of petition" referred to in the statute is the right protected by the First Amendment to the Constitution of the United States ("Congress shall make no law ... abridging the ... right of the people ... to petition the Government for a redress of grievances"), ⁶ and by the Declaration of Rights. ⁷

The statute makes explicit that the protected right of petition extends to five kinds of statements. See note 3, supra. Statements , and do not necessarily involve issues of public concern or public participation in the consideration of an issue. Statement does contemplate public participation designed to affect the consideration of an issue. Statement is a catch-all which brings in any statement not previously mentioned and which falls within the constitutional protection of the right of petition. ⁸ Nowhere does the statute state that the special motion to dismiss is available only where the covered statements are those involving issues of public concern. ⁹

The focus of Duracraft's argument is that, aside from the words of the statute, the purpose of the statute is self-evident. Like similar statutes elsewhere, the Duracraft argument runs, the Massachusetts statute is intended only to protect people who speak out on matters of public concern.

It is true that similar statutes passed elsewhere reveal a general legislative purpose to protect activity designed to affect or influence governmental action regarding issues arguably of public concern or significance. ¹⁰ And it is at least arguable that the controversy in this case does not involve speaking out, or taking any other action, regarding an issue of public concern or significance. Yet the principal point remains: the Massachusetts statute is silent as to any requirement that the action to be protected must, to qualify for that protection, involve an issue of public concern.

Duracraft's argument overlooks the fact that the Massachusetts statute is fundamentally different from the anti-SLAPP statutes passed in other jurisdictions; that is to say, the legislative history of the Massachusetts statute reveals an intentional omission of any requirement that the defendant's conduct arise in connection with an issue of public concern. See Hunters Brook Realty Corp. v. Zoning Bd. of Appeals of Bourne, 14 Mass.App.Ct. 76, 81, 436 N.E.2d 978 (1982) (legislative history may decide disputes regarding the interpretation of a statute). ¹¹

The bill was originally introduced on January 7, 1993, as House No. 3033. It was captioned, "An Act Limiting Strategic Litigation Against Public Participation." Section 1 of the bill inserted § 59H, the first sentence of which reads as follows: "In any case in which a party asserts that the civil claims, counterclaims, or cross claims against said party are based on said party's lawful exercise of its right of petition or of free speech under the constitution of the United States or of the commonwealth [sic ] in connection with a matter of public concern, said party may bring a special motion to dismiss" (emphasis added).

On December 7, 1993, the House changed the title of the bill to read, "An Act Protecting the Public's Right to Petition Government." On December 21, 1993, the bill was amended in the Senate by striking from the first paragraph of § 59H (following a reference to a party's "lawful exercise of its right of petition") the phrase "in connection with a matter of public concern," and by striking from the definition of "a party's exercise of its right of petition or of free speech," the phrase "or any written or oral statement made in connection with an issue of public concern." ¹² See Journal of the Senate, Tuesday, December 21, 1993.

On December 30, 1993, the House approved the amendments adopted in the Senate. The bill as amended was passed by both chambers on January 3, 1994. The Governor vetoed the legislation on January 14, 1994. House No. 3033, as amended in the Senate, was reintroduced as House No. 1520 ¹³ and eventually passed, over a second veto by the Governor, in December of 1994. See Legislative Record, 85H-86H (1994).

Given the legislative history just recited, there is no basis for this court to reinsert the rejected condition that the moving party's activity must involve a matter of public concern. Singer, Sutherland Statutory Construction § 47.38, at 290-291 (5th ed.1992). King v. Viscoloid Co., 219 Mass. 420, 425, 106 N.E. 988 (1914) ("we have no right to ......