Everett Town Taxi, Inc. v. Board of Aldermen of Everett

• Decision Date: 23 December 1974
• Citation: 366 Mass. 534,320 N.E.2d 896
• Parties: EVERETT TOWN TAXI, INC., et al. v. BOARD OF ALDERMEN OF EVERETT et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 896

320 N.E.2d 896

366 Mass. 534

EVERETT TOWN TAXI, INC., et al. v. BOARD OF ALDERMEN OF EVERETT et al.

Supreme Judicial Court of Massachusetts, Middlesex.

Argued Oct. 9, 1974.

Decided Dec. 23, 1974.

Vincent Galvin, Boston, for plaintiffs.

Edward J. Bushell, Malden (John A. Brennan, Jr., Malden, with him), for defendants.

Before REARDON, QUIRICO, HENNESSEY and KAPLAN, JJ.

REARDON, Justice.

This case, reported by a judge of the Superior Court to the Appeals Court, is here from that court on order of transfer. The issue is presented by the action of the trial judge in sustaining the defendants' plea in bar to a bill of complaint and amendment thereto. The bill was brought by corporations operating taxicab companies in the city of Everett which are in competition with certain corporations also operating taxicab companies in that city. Joined as defendants were the latter corporations, the city of Everett, the individual members of the board of aldermen of the city, one of whom was named as an officer of the defendant corporations, and the chief of police of Everett and his wife, also named as officers of one of the defendant corporations. The plaintiffs' bill alleged violation of G.L. c. 268A, inserted by St. 1962, c. 779, § 1 (the conflict of interest statute), and sought revocation of licenses obtained by the defendant corporations from the Everett board of aldermen to operate taxicabs and taxi stands in Everett. The sole issue raised by the pleadings is whether the corporate plaintiffs are the proper parties to bring an action under G.L. c. 268A. The pertinent section reads as follows: ¹

'Section 21. (a) In addition to any other remedies provided by law, any violation of section two, three, eight, or sections fifteen to twenty, inclusive, which has substantially influenced the action taken by any municipal agency in any particular matter shall be grounds for avoiding, rescinding or cancelling the action on such terms as the interest of the municipality and innocent third persons require.

'(b) The city or town may bring a civil action against any person who has acted to his economic advantage in violation of said sections two, three, eight and fifteen to twenty, inclusive, and may recover damages in the amount of such economic advantage or five hundred dollars, whichever is greater. If there has been no final criminal judgment of conviction or acquittal of the same violation, the city or town may in the discretion of the court recover additional damages in an amount not exceeding twice the amount of the economic advantage or five hundred dollars, whichever is greater, and a judgment for such damages shall bar any criminal prosecution for the same violation.'

The important question whether the civil remedy provided by § 21(a) may be invoked by a private party as well as by a municipality has been before this court twice and in each instance we expressly reserved the question for later decision. Moskow v. Boston Redevelopment Authy., 349 Mass. 553, 571, 210 N.E.2d 699 (1965), cert. den., 382 U.S. 983, 86 S.Ct. 558, 15 L.Ed.2d 472 (1966). Crall v. Leominster, --- Mass. ---, --- ^a, 284 N.E.2d 610 (1972). Today we answer that question in the affirmative.

The language of § 21(a) is neutral on the matter, simply setting out the remedy without describing those to whom it is available. At the least there is nothing in the language to preclude a private action; if anything, the specific reference to actions by the city or town for restitution in § 21(b) leads to the inference that no such limitation is present in § 21(a). We are impelled to this conclusion by our obligation to construe a legislative act so as to effectuate fully the statutory purpose. Foley v. Lawrence, 336 Mass. 60, 65, 142 N.E.2d 588 (1957); New York Cent. R.R. v. New England Merchs. Natl. Bank. 344 Mass. 709, 713, 183 N.E.2d 852 (1962); United States Trust Co. v. Commonwealth, 348 Mass. 378, 383, 204 N.E.2d 300 (1965). Boston v. Massachusetts Port Authy., --- Mass. ---, --- ^b, 308 N.E.2d 488 (1974). There can be no doubt about the purpose of this statute, enacted as part of 'comprehensive legislation . . . (to) strike at corruption in public office, inequality of treatment of citizens and the use of public office for private gain.' Report of the Special Commission on Code of Ethics, 1962 House Doc. No. 3650, p. 18. See Buss, The Massachusetts Conflict-of-Interest Statute: An Analysis, 45 B.U.L.Rev. 297, 301--302 (1965). In light of these objectives it is apparent that, if a right of action is denied to all private parties, there would be a frustration of the statute. See J. I. Case Co. v. Borak, 377 U.S. 426, 433, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964); Allen v. State Bd. of Elections, 393 U.S. 544, 556--557, 89 S.Ct. 817, 22 L.Ed.2d 1 (1969). Cf. Commonwealth v. Haddad, --- Mass. ---, --- - --- ^c, 308 N.E.2d 899 (1974). Compare National R.R. Passenger Corp. v. National Assn. of R.R. Passengers, 414 U.S. 453, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974). Were we to construe § 21(a) as providing an exclusively public remedy so that the sole parties eligible to move under § 21(a) were municipal authorities, the result would be that in a city where those authorities were the principal parties in interest there would be no movement at all. Thus to deny a private right of action under the statute would in some cases be to deprive the public of the protection conferred on it by the Legislature.

Examination of the legislative history confirms the view that the Legislature did not intend to so limit § 21(a). The conflict of interest statute was the product of extensive study and proposals by a Special Commission on Code of Ethics. 1962 House Doc. No. 3650. In drafting the legislation the commission consciously chose as its model the Federal conflict of interest provisions proposed by H.R. 8140, 87th Cong., 1st Sess. (1961), subsequently enacted as 18 U.S.C. §§ 201--218 (1970). See 1962 House Doc. No. 3650, p. 8. Significantly, the Federal provisions allowing rescission of governmental action taken in violation of the conflict of interest rules expressly named the President and agency heads as the proper parties to invoke the remedy. 18 U.S.C. § 218 (1970). In addition, the special commission had before it a model statute drafted by the Association of the Bar of the City of New York (special committee on the Federal conflict of interest laws, 'Conflict of Interest and Federal Service' (1960)), and two bills filed in the Legislature in 1961 (Senate Nos. 54 and 492). See Braucher (now Justice Braucher), Conflict of Interest in Massachusetts, in Perspectives of Law, Essays for Austin Wakeman Scott, 4--5 (1964). Each of these statutes, like the Federal statute, provided for rescission of the governmental action only at the instance of specified public officials. By contrast the commission's proposal, which was adopted by the Legislature, contained the present language of § 21(a), devoid of any reference to specific officials authorized to invoke the remedy. This background leads to a very strong inference that the legislative intent was to broaden the remedy to include private as well as public actions. Compare National R.R. Passenger Corp. v. National Assn. of R.R. Passengers, 414 U.S. 453, 458--461, 94 S.Ct. 690, 38 L.Ed.2d 646 (1974).

In reaching this conclusion we emphasize that rescission of governmental action pursuant to § 21(a) is not an automatic proposition; rather it must be 'on such terms as the interest of the municipality and innocent third persons require.' G.L. c. 268A, § 21(a). See Braucher, Conflict of Interest in Massachusetts, supra, at 34--35. For example. in a suit by a private citizen, the fact that the municipal authorities were aware of the conflict of interest, but chose to ratify the action may be entitled to some weight where the action cannot be rescinded without detriment to the municipality. Compare Sylvester v. Webb, 179 Mass. 236, 241, 60 N.E. 495 (1901), with Barrett v. Medford, 254 Mass. 384, 387, 150 N.E. 159 (1926), and Albano v. Selectmen of South Hadley, 341 Mass. 494, 496--497, 170 N.E.2d 685 (1960). Likewise the possibly harsh effect of rescission on innocent third parties who dealt with the municipality should be considered. See Massachusetts Legislative Research Council Report Relative to Conflict of Interest, 1961 Senate Doc. No. 650, p. 22; Manning, Federal Conflict of Interest Law, 270--271 (1964). But see United States v. Mississippi Valley...