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Rodriguez v. Massachusetts Bay Transportation Authority

Superior Court of Massachusetts, Suffolk, Business Litigation Session

March 31, 2016

Raquel Rodriguez [1]
v.
Massachusetts Bay Transportation Authority et al. [2] No. 133282

          MEMORANDUM OF DECISION AND ORDER ON (1) DEFENDANT MASSACHUSETTS BAY TRANSPORTATION AUTHORITY'S MOTION TO DISMISS AND (2) DEFENDANT KEOLIS COMMUTER SERVICES, LLC'S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT

          Mitchell H. Kaplan, Justice of the Superior Court.

         In this action, the plaintiff, Raquel Rodriguez, on behalf of herself and all other similarly situated purchasers of monthly commuter rail passes, seeks to recover the economic damages that she alleges she and the putative class suffered when the defendants, Massachusetts Bay Transportation Authority (MBTA) and Keolis Commuter Services, LLC (Keolis), failed to provide " timely and reliable commuter rail service" during a period beginning near the end of January 2015 through March 2015. As anyone living in the MBTA's service area at that time knows, during those months, the Commonwealth of Massachusetts endured record-breaking snow storms that, at times, paralyzed travel and altered normal patterns of daily life in the region.

         Rodriguez's first amended complaint (complaint) contains the following five claims: breach of contract against the MBTA (Count I), unjust enrichment against the MBTA (Count II), breach of contract against Keolis (Count III), unjust enrichment against Keolis (Count IV), and violation of G.L.c. 93A, § 9 against Keolis (Count V). Under all these claims, Rodriguez asserts a right to monetary relief as a consequence of the purchase of monthly commuter rail passes in January, February, and March 2015, at undiscounted rates, because the defendants did not provide commuter rail services on many days during that period, or only provided commuter rail services at drastically reduced schedules.

         The case is now before the court on the MBTA's and Keolis' motions to dismiss all counts for failure to state claims upon which relief can be granted pursuant to Mass.R.Civ.P. 12(b)(6). On March 3, 2016, the court convened a hearing on the motions. In consideration of the parties' memoranda of law and oral arguments, for the reasons that follow, the MBTA's motion to dismiss is ALLOWED and Keolis' motion to dismiss is ALLOWED .[3]

         BACKGROUND

         The following facts, assumed to be true, are taken from the complaint and the documents referenced therein.[4] Rodriguez is a resident of Massachusetts who purchased monthly commuter rail passes through her employer in January, February, and March of 2015. The MBTA was created by statute and is charged with providing commuter rail service and subway service. Keolis is a Maryland corporation that transacts business in Massachusetts.

         The MBTA is responsible for providing commuter rail service along fourteen rail routes in and around the Boston, Massachusetts area. The MBTA contracted with Keolis to operate, staff, and maintain the commuter rail, which includes the commuter rail's tracks and equipment. On a typical weekday, the MBTA provides commuter rail service to 131, 161 people and to approximately 25, 703 people and 20, 907 people on Saturdays and Sundays, respectively. Moreover, on a typical weekday, the MBTA provides 62, 244 inbound and 62, 775 outbound commuter rail passenger rides. There are approximately 388 route miles of service and 138 commuter rail stations.

         Each month, the MBTA sells monthly commuter rail passes to thousands of commuter rail passengers based on " zone pricing." There are ten different zones, and the MBTA offers both commuter rail zone and interzone pricing, essentially offering twenty different monthly zone passes. Pass prices range from $75.00 to $362.00. Thousands of people purchase monthly commuter rail passes each month.

         In February 2015, Rodriguez purchased a Zone 1 Pass for $182.00. The commuter rail pass contains the following language: " Subject to applicable tariff regulations and conditions of use. Ticket may be confiscated for misuse. Not replaceable if lost or stolen. Non-refundable." The pass also provides that schedule and fare information is available at, " 617-222-3200 Website: www.mbta.com ."

         The MBTA printed its commuter rail tariff, effective July 1, 2014, in the form of a paper booklet.[5] The tariff governed terms of service. Section 6 of the tariff described the following monthly pass and ticket refund policy:

Tickets purchased on board from crew members (rebates) are nonrefundable.
An application for a refund must be made at the location where the ticket was purchased. Refunds will not be provided without a receipt.
Refunds for tickets purchased at Back Bay, North Station, and South Station will be provided as provided below:

Monthly Pass

The amount of refund for a monthly pass is as follows:
100% through the 2nd of the month for which the pass is valid;
50% from the 3rd of the month up to the 9th of the month for which the pass is valid;
25% from the 10th of the month up to the 14th of the month for which the pass is valid;
No refund is available after the 15th of the month for which the pass is valid.
A monthly pass purchased through the Corporate Pass Program may only be exchanged or refunded through their Corporate Administrator.

         The winter of 2015 in Massachusetts " featured several winter storms from January through February 2015." Complaint at para. 29. There were four snow storms with snow accumulations in the double digits on or about January 27, February 2, February 7, and February 14 of 2015. It snowed seven inches from February 15 through February 28, 2015 in Boston, and six inches of snow fell in Boston in March of 2015. Rodriguez notes that even though the Boston area received " historic" snow fall for the entire winter of 2015, there were at least three to seven days between each double digit snow storm and " more than enough time to clear the snow and return to a full commuter rail schedule." [6] Id. at paras. 33-34.

         Nonetheless, the MBTA announced the cancellation of all commuter rail, subway, and most bus service from 7:00 p.m., on Monday, February 9, 2015 through all day Tuesday, February 10, 2015. On February 9, 2015, Massachusetts Governor Charlie Baker stated that he was " frustrated" and " disappointed" in the MBTA's decision to suspend commuter rail and subway service and that the decision was " unacceptable." In response to Governor Baker's statement, Dr. Beverly Scott, then the Chief Executive Officer and General Manager of the MBTA, criticized the lack of significant investment m the MBTA and referenced the MBTA's age (it was not a " spring chicken system") and aging equipment. On February 11, 2015, Scott resigned from her position at the MBTA and stated that, " much more needs to be done to achieve the modern and first-class public transportation system that all want and deserve."

         At some point in February 2015, the MBTA and/or Keolis announced a " winter recovery schedule" and continued to provide less than full commuter rail and subway service for the rest of February and March of 2015. Each commuter rail line ran four to five trains per day; only one or two trains per line ran in the morning on weekdays. The commuter rail train schedules were inconvenient, trains were cancelled and frequently delayed without proper announcements through the defendants' " alert system, " and " service was well short of what Plaintiff and monthly purchasers of monthly commuter rail passes paid for." Complaint at para. 43. Moreover, " [t]he odd, inconvenient and unreliable winter recovery schedule left Plaintiff and purchasers of monthly commuter rail passes largely unable to use their monthly commuter rail passes for the second half of February and most of March 2015, or if used at all with substantial uncertainty and delay." Id. at para. 44. At some point in February, the MBTA announced that it would not have commuter rail service fully operational until the end of March 2015, well after the last significant winter snow storm.

         On March 11, 2015, the MBTA " admitted it failed its ridership" and offered riders a fifteen percent discount to anyone who purchased a May 2015 monthly commuter rail pass. Id. at para. 46. The average discount was approximately $37.74. Rodriguez asserts that the defendants operated the commuter rail at much less than an eighty-five percent service level for almost ten weeks and that a fifteen percent discount for one month " falls well short of a fair refund for Defendants' breach." Id. at para. 48.

         Rodriguez alleges that years of mismanagement at the MBTA and a culture of indifference (not the weather) are the real reasons that the defendants provided substandard service and " breached the contracts" with her and other purchasers of monthly commuter rail passes. Both the MBTA and Keolis lacked the proper equipment to deal with winter storms. The MBTA failed to spend $2.3 billion of its capital budget over the last five years. However, the MBTA spent $66.5 million on salaries for 444 employees, for an average annual salary of approximately $150, 000 per employee, and, according to Rodriguez, the MBTA diverted funds from its capital budget to pay these salaries. Rodriguez also points to a story in the Boston Globe, which reported that the MBTA spent $244 million on forty locomotives that were delivered in an unusable condition. As of January 2015, only two of the forty locomotives were in service. In addition, the MBTA paid a South Korean company $144 million for seventy-five passenger cars that were delivered thirty months late. To make matters worse, the passenger cars were so trouble-prone that many of their parts had to be replaced.

         Governor Baker created a special panel to review the MBTA. The panel noted the following problems:

a. The catastrophic winter breakdowns were symptomatic of structural problems that require fundamental change in virtually all aspects of the MBTA;
b. Measured against national benchmarks and other transit systems, the [MBTA's] operating costs are too high and its ...

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