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Phillips v. Equity Residential Management, L.L.C.

United States Court of Appeals, First Circuit

December 12, 2016

SCOTT PHILLIPS, individually and on behalf of all others similarly situated, Plaintiff, Appellant,


          David Pastor, with whom Pastor Law Office LLP, Joshua N. Garick, Law Office of Joshua N. Garick, Preston W. Leonard, and Leonard Law Office PC were on brief, for appellant.

          Craig M. White, with whom Baker & Hostetler LLP, Thomas H. Wintner, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. were on brief, for appellee.

          Before Lynch, Stahl, and Barron, Circuit Judges.

          STAHL, Circuit Judge.

         This dispute arises out of a class action brought by Scott Phillips against his former landlord, Equity Residential Management, L.L.C. ("ERM"). Phillips alleged that ERM violated several provisions of the Massachusetts Security Deposit Law ("Security Deposit Law"), Mass. Gen. Laws ch. 186, § 15B, relating to unlawful charges or deductions taken against his security deposit and ERM's failure to return the security deposit within thirty days after he moved out of his leased apartment. The purported class consisted of other former tenants of ERM-owned or managed apartments who also, since August 6, 2009, had these same grievances.[1] As recompense, Phillips sought recovery under the Security Deposit Law's penalty provision, Mass. Gen. Laws ch. 186, § 15B(7), which includes, inter alia, the availability of treble damages.

         At summary judgment, the district court awarded Phillips a Pyrrhic victory: though he was entitled to recover his security deposit (less a small amount of holdover rent), the district court refused to apply Section 15B(7), and soon after denied his class certification motion on mootness grounds.[2] Phillips challenges these rulings on appeal, arguing that the district court should have ruled on his class certification motion before the parties' summary judgment motions, that his class certification motion should not have been dismissed as moot, and that he was entitled to recovery under Section 15B(7).

         Phillips's last contention is of particular importance, since the outcome turns on provisions of the Massachusetts Security Deposit Law that have not been interpreted by the Massachusetts Supreme Judicial Court ("SJC") in over three decades. See Mellor v. Berman, 454 N.E.2d 907, 910-13 (Mass. 1983). Generally, we must make an "informed prophecy" as to how the highest state court would rule on questions of that state's law. Ambrose v. New Eng. Ass'n of Schs. & Colls., Inc., 252 F.3d 488, 497-98 (1st Cir. 2001) ("Our task . . . is to discern the rule the state's highest court would be most likely to follow under these circumstances, even if our independent judgment might differ."). The SJC's guidance in this area, however, is "sufficiently undeveloped . . . so as to make such prophetic action unwise, " see Showtime Entm't, LLC v. Town of Mendon, 769 F.3d 61, 79 (1st Cir. 2014). For this reason and the others that follow, we certify a question regarding the relevant provisions of the Massachusetts Security Deposit Law to the SJC, and refrain from deciding the merits of Phillips's other claims until that question is resolved. See Mass. S.J.C. R. 1:03; see also, e.g., Easthampton Sav. Bank v. City of Springfield, 736 F.3d 46, 48, 50-53 (1st Cir. 2013).


         We recite the facts relevant to the certified question. Phillips and a friend, Sean Ostriker, [3] entered into a written lease with ERM for an apartment located at Longview Place in Waltham, Massachusetts. The lease term lasted from July 20, 2012 to May 19, 2013. In accordance with the lease, Phillips paid ERM a $750.00 security deposit prior to move-in, and he requested its return shortly after vacating the apartment on May 20, 2013. After receiving his request, ERM sent Phillips a signed Statement of Deposit Account ("SODA") listing charges against his security deposit totaling $968.08.[4] The SODA credited $750.06 against this amount, reflecting Phillips's $750.00 security deposit and $0.06 in accumulated interest, and claimed a balance due of $218.02.

         On August 6, 2013, Phillips filed a class action complaint against ERM in Massachusetts Superior Court. He alleged that ERM had violated the Security Deposit Law by: (1) not providing him, within thirty days of his vacating the apartment, sufficiently detailed written evidence of damages for which funds were deducted from his security deposit, (2) not providing him with an itemized list of damages sworn to under the pains and penalties of perjury, and (3) impermissibly deducting certain cleaning charges from his security deposit. ERM removed the case to the United States District Court for the District of Massachusetts based on diversity of citizenship, see 28 U.S.C. § 1332(d), and counterclaimed for the $218.02 balance outlined in the SODA.

         Soon after, both Phillips and ERM moved for summary judgment. The district court found that ERM did not comply with Mass. Gen. Laws ch. 186, § 15B(4)(iii), which required ERM to provide Phillips with "an itemized list of damages" sworn to "under pains and penalties of perjury." Phillips v. Equity Residential Mgmt., No. 13-12092, 2015 WL 12733438, at *3 (D. Mass. Dec. 14, 2015). This failure, the court concluded, also resulted in a second violation under a separate provision of the Security Deposit Law since Phillips did not receive the required "itemized list of damages . . . in compliance with the provisions of [Section 15B]" within thirty days after the termination of his tenancy.[5] Id. (quoting Mass. Gen. Laws ch. 186, § 15B(6)(b)). Based on this second violation, the district court held that ERM forfeited its right to retain any part of Phillips's security deposit. Id.; see also Mass. Gen. Laws ch. 186, § 15B(6) (stating that a lessor "shall forfeit [the] right to retain any portion of [a tenant's] security deposit for any reason" if the lessor violates any provision of Section 15B(6)).

         Phillips nonetheless insisted that ERM's Section 15B(6)(b) violation resulted in a third Security Deposit Law violation under Mass. Gen. Laws ch. 186, § 15B(6)(e). That provision provides that a lessor must "return to the tenant the security deposit or balance thereof to which the tenant is entitled after deducting therefrom any sums in accordance with the provisions of this section, together with any interest thereon, within thirty days after termination of the tenancy." Id.

         The alleged Section 15B(6)(e) violation, Phillips continued, activated yet another Security Deposit Law provision, Mass. Gen. Laws ch. 186, § 15B(7). Section 15B(7) awards tenants "three times the amount of [their] security deposit or balance thereof to which the tenant is entitled plus interest at the rate of five per cent from the date when such payment became due, together with court costs and reasonable attorney's fees" if the lessor or his agent fails to comply with clauses (a), (d), or (e) of Section 15B(6). Id.

         The district court, however, refused to entertain Phillips's argument, finding that ERM only violated Section 15B(6)(e) because of its violation of Section 15B(6)(b). Phillips, 2015 WL 12733438, at *4. Under Phillips's reading of the statute, the court reasoned, any violation of Section 15B(6)(b) would result in a violation of Section 15B(6)(e), making Section 15B(6)(b) redundant. Id. Since Section 15B(6)(b) is not listed in Section 15B(7), the district court also inferred that Section 15B(6)(b) was excluded from ...

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