United States District Court, D. Massachusetts
OPINION AND ORDER
George
A. O'Toole, Jr. United States District Judge
Defendant
U.S. Carburetion has moved for summary judgment on the
single-count Amended Complaint, which alleges that U.S.
Carburetion engaged in unfair and deceptive practices in
violation of Massachusetts General Laws Chapter 93A, Section
11. The plaintiff opposes the motion.
Summary
judgment is appropriate only when there is “no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed.R.Civ.P. 56(a). In
reviewing the facts offered by the parties, a court
“view[s] the record in the light most favorable to the
nonmovant, drawing reasonable inferences in his favor.”
Noonan v. Staples, Inc., 556 F.3d 20, 25 (1st Cir.
2009) (citing Franceschi v. U.S. Dep't of Veteran
Affairs, 514 F.3d 81, 84 (1st Cir. 2008)).
Although
U.S. Carburetion moves for summary judgment on multiple
grounds, this Court need only address whether the
defendant's allegedly unfair and deceptive conduct
occurred “primarily and substantially” in
Massachusetts as required by Chapter 93A. See Mass.
Gen. Laws, ch. 93A, § 11. After reviewing the record, it
is clear that the defendant's alleged wrongful conduct
did not occur “primarily and substantially” in
Massachusetts for purposes of the claimed cause of action.
The
following facts are not genuinely disputed:
Gen-Connect
is a Massachusetts company with a principal place of business
in Massachusetts. U.S. Carburetion is a West Virginia company
with a principal place of business in West Virginia. U.S.
Carburetion's employees, facilities, and equipment are
exclusively located in West Virginia. The companies sell
competing products that enable consumers to run a single fuel
source generator using different types of fuel from that for
which the generator may have been first designed. These
after-market products are referred to as conversion kits.
Gen-Connect's
claim stems from its belief that any company, including U.S.
Carburetion, selling products used to convert a generator
engine to permit use of an alternate fuel source is required
under 40 C.F.R. § 1054.645 to obtain a particular
certificate of conformity from the Environmental Protection
Agency (“EPA”). Gen-Connect obtained such a
certificate; U.S. Carburetion did not. Gen-Connect asserts
that it suspended sales of relevant products during the
process of obtaining the certificate, thus diminishing its
sales and consequent profits, while competitors such as U.S.
Carburetion continued to sell their products, unfairly taking
advantage of Gen-Connect's self-imposed sales moratorium.
U.S. Carburetion's continued sales of uncertified
products in purported disregard of the EPA regulation was,
the complaint alleges, an unfair trade practice forbidden by
Section 11 of Chapter 93A.
That
section contains a heightened geographic limitation that
states:
No action shall be brought or maintained under this section
unless the actions and transactions constituting the alleged
unfair method of competition or the unfair or deceptive act
or practice occurred primarily and substantially within the
commonwealth.
Mass.
Gen. Laws, ch. 93A, § 11.
US
Carburetion's argument is that it sells its products
throughout the country, and even if its sales of uncertified
products constituted unfair commercial acts, they did not
occur “primarily and substantially” within
Massachusetts so as to make Section 11's remedy
available.
US
Carburetion provided details of its sales during the relevant
period. The sales data shows that during the relevant time
period U.S. Carburetion sold 56 conversion kits in
Massachusetts compared to 3656 kits sold elsewhere, meaning
that only 1.51% of the kits U.S. Carburetion sold in the
relevant period were to Massachusetts customers. Put in other
terms, U.S. Carburetion had revenue from kits sold in
Massachusetts of $10, 188, compared with $702, 313.99 from
kits sold elsewhere, meaning that only 1.43% of total sales
revenues were from sales within Massachusetts. It is apparent
that, if the sales by U.S. Carburetion of uncertified kits
constituted potentially actionable unfair activity, most of
it occurred outside Massachusetts.
The
Massachusetts Supreme Judicial Court has said that the
“primarily and substantially” test inquires
“whether the center of gravity of the circumstances
that give rise to the claim” is found within
Massachusetts. Kuwaiti Danish Comput. Corp. v. Digital
Equip. Corp., 781 N.E.2d 787, 799 (Mass. 2003). Where
the allegedly unfair sales occurred throughout the country,
and where only a very small percentage of the number of sales
and revenues generated was centered in Massachusetts, it is
clear that the center of gravity-if there is a demonstrable
one-is elsewhere. See Fishman Transducers, Inc. v.
Paul, 684 F.3d 187, 197 (1st Cir. 2012) (“Where
wrongdoing is not focused on Massachusetts but has relevant
and substantial impact across the country, the
‘primarily' requirement of section 11 cannot be
satisfied.”).
Gen-Connect
argues that its revenue loss was experienced in Massachusetts
because it is located here. While that may be a factor to be
taken account of in particular cases, it is not a general
principle that trumps other factors, such as the situs of the
loss-producing activity. Id. “[I]f the place
of injury were the only test, practically no case involving a
Massachusetts plaintiff would be exempt from c. 93A status,
no matter how negligible the defendants' business
activity in this State. Such a result would effectively
nullify the words ‘primarily and substantially within
the ...