A.        What is “product liability” law?

Product liability law governs defective products that cause serious injury or death.  Product liability claimants include individual consumers or end-users of the defective product, and also innocent bystanders who come into contact with the defective product. Product liability cases are brought against the manufacturers and sellers of the defective product and, depending on the type of product and the manner in which it is brought to market, perhaps also against the product’s designer, distributor, retailer and/or marketer.  

Liability can attach to virtually any type of harmful product, but for practical purposes lawyers tend to categorize them as follows: retail consumer products, industrial products, automotive products, pharmaceutical drugs and medical devices. 

1.         Retail consumer products.  These are the most common product defect cases because they involve mass marketed consumer products that are bought and sold in high volume and have the capacity to affect large numbers of consumers and users.   Examples include:

(a)        Sporting goods and recreational equipment like trampolines, scuba gear, above-ground swimming pools, in-line                          skates, bicycles, climbing walls, safety helmets, firearms, life jackets and preservers and various other                                            types of safety equipment.

(b)        Infant care products like cribs, changing tables, baby swings, clothing without flame-retardant, cold medicine, baby                      formula, plastic bottles with bPA and safety gates.

(c)        Household appliances like conventional ovens, toaster ovens, gas grills, microwave ovens, pressure cookers, hot                        water heaters, furnaces, space heaters, fans, power cords and power strips, electrical outlets, junction boxes and                        circuit breakers, HVAC pipes and plumbing and gas fixtures.

(d)       Home safety devices like smoke detectors, carbon monoxide detectors, fire alarms and security systems.

(e)       Tainted food products that contain foreign objects, unsafe chemicals or deadly microorganisms.

(f)        Outdoor equipment like chainsaws, lawn mowers, power tools, power saws, weed wackers and ladders.

(g)       Children toys and equipment like jungle gyms, bicycles, roller blades, roller skates, Wheelies, scooters and BB guns.

(h)       Cigarettes.

(i)        Toxic cleaning agents and cleaning products.

2.         Industrial products.  Product liability claims also include specialized industrial products like machine parts, tools, dyes and chemicals, elevators and escalators, construction equipment like a forklift or a climbing scaffold and toxic construction materials like asbestos.  This category can also include environmental contamination claims that cause physical illness as a result of a defendant’s pollution or dumping of toxic chemicals.   

3.         Automotive products.  Product liability claims also include defective motor vehicles like cars, vans, SUVs, trucks, motorcycles, mopeds, scooters, all-terrain vehicles, golf carts, 18 wheel tractor-trailers and farm tractors.  Automotive defect claims typically involve a particular component in the product that is defective such as the braking system, passenger restraint system, transmission parts or safety features.  

4.         Pharmaceuticals and Medical Devices.  Various types of pharmaceutical drugs and medical devices have been linked to serious, sometimes deadly medical complications.  Product liability claims in the area are extremely complex, not only in terms of the medical and bio-engineering issues involved but also because these products often fall under the federal regulatory umbrella of the United States Food & Drug Administration and can be subject to federal laws like the Medical Device Act.  As such these claims have become by and large “federalized” and they need to be analyzed through a very specialized lens. 

B.        Legal theories of product liability

There are three principal theories of product liability in Massachusetts:

  1.       Breach of implied warranty of merchantability

2.        Negligence

3.       Chapter 93A

C.        Breach of Warranty of Merchantability

The most used theory of product liability in Massachusetts is breach of warranty of merchantability.  The warranty of merchantability is a consumer protection device that automatically attaches to any good sold.  For this reason it is referred to as an “implied” warranty.  This warranty guarantees that the product is of merchantable quality—that is, that it will perform up to the expected use for which it was sold.  The warranty of merchantability cannot be disclaimed by the manufacturer or seller of the product, though there is sometimes misleading disclaimer information on the packaging that has no legal effect.

To prove a breach of warranty claim the plaintiff must establish that:

  1.       The defendant was a “merchant” as that term is legally defined;

2.        The product was sold or leased

3.        The plaintiff’s use of the product was foreseeable;

4.        The product was defective; and

5.       The defect was a proximate cause of the plaintiff’s injury.

These five elements are discussed in order.   

1.         The “merchant” requirement.  An implied warranty of merchantability arises from the sale or lease of goods only if the seller or lessor is a “merchant” with respect to goods of that kind.  “Merchant” is defined as a “person who deals in goods of the kind or otherwise by his or her occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his or her employment of an agent or broker or other intermediary who by his or her occupation holds himself or herself out as having such knowledge or skill.”

To be deemed a merchant turns on whether the defendant “regularly deals in goods of the kind involved or otherwise has a professional status with regard to the goods involved such that [he] could be expected to have specialized knowledge or skill peculiar to those goods.”

For example, the Ford Motor Company is a “merchant” with respect to the sale of motor vehicles.  However, a college history professor who executes a one-time sale of a used Ford Mustang on-line is not a “merchant.”

2.         The sale or lease requirement.  The warranty of merchantability applies only where the product was obtained through a particular type of transaction.  Specifically, it arises only from (1) a sale of goods, (2) a contract for a future sale of goods or (3) a lease.  So, for example, the warranty would not apply if a plaintiff was injured as a result of some mechanical defect while test driving a Ford automobile at the dealership before deciding to purchase it.

Because the warranty arises out of all sales and leases, this theory of liability is not limited to manufacturers but extends to anyone who sells or leases a defective product, including retailers and all those in the chain of distribution.  Depending on the product, this could include the product’s designers, distributors, licensors and even marketers.

It is not necessary that the injured person had a direct contractual relationship with a defendant.  The plaintiff may sue any “merchant” involved in bringing the product to market anywhere along the chain of distribution.  Thus, Massachusetts has done away with the antiquated “privity of contract” requirement for these cases whereby an injured party used to only be able to sue entities with whom he had a direct contractual relationship, like a Ford car dealership but not a wholly owned corporate subsidiary of Ford that may have designed a defective seatbelt for the vehicle.  

3.         The foreseeable use requirement.  The implied warranty of merchantability requires that products be “fit for the ordinary purposes for which such goods are used.”  The warranty applies only to uses that are reasonably foreseeable.  But it does not extend to unforeseeable misuses of the product.  To prove the claim, the plaintiff must therefore show that his use, or even his misuse, of the product was foreseeable to the defendant.  Misuse of a product will not bar recovery so long as the misuse was foreseeable to the defendant.

One of the seminal cases addressing the foreseeable use requirement involved a defective sauna heater that caused a fire in the men’s sauna room of a racquet club.  The fire started when someone left a towel on the heater.  The court ruled that the jury did not need to even consider the issue of misuse as potential defense because it should have been foreseeable to the seller of the sauna that someone would place a towel on the heater in a sauna.  As such, the arguable misuse of leaving of a towel on a sauna heater could not be considered unforeseeable to sauna’s manufacturer.

It is technically incorrect to refer to this as a “misuse defense” because misuse is not an affirmative defense for which the defendant has the burden of proof; instead, it is the plaintiff’s burden to prove that his or her use or misuse was foreseeable.

4.         Product defect.  The warranty of merchantability requires that the product must be fit for the ordinary purposes for which such products are used.  The merchant must therefore anticipate the environment in which its product will be used and must design against the reasonably foreseeable risks of its use in that setting.  The merchant has a duty to prevent the release of any product in a defective condition unreasonably dangerous to the user or consumer.

The liability focus in a breach of warranty case is on the product itself rather than on the conduct of the manufacturer, designer or seller.  Thus, a defendant may be held liable under a breach of warranty theory even if it used all possible care in making the product safe.

Product defects can be divided into three categories:

(a)        Design defect: the product was manufactured as intended, but the design was unreasonably dangerous;

(b)        Manufacturing defect: the product was not manufactured as intended and the mistake created a dangerous defect;                      and/or

(c)        Failure to warn: the defendant did not provide an adequate warning concerning a danger posed by the product.

These three categories of product defect claims are discussed in order.

(a)        Design defect.  The key in a design defect cases is the reasonableness of the product’s design.  The basis of the claim is that an entire product line or model is defective because of a design flaw.  To establish a defective design claim, the plaintiff must prove that the product was defective when it left the manufacturer’s possession.

Several relevant factors will help determine whether a product contains a design defect:

(i)        the gravity of the danger posed by the challenged design;

(ii)       the likelihood that such danger would occur;

(iii)      the mechanical feasibility of a safer alternative design;

(iv)      the financial cost of an improved design; and

(v)       the adverse consequences to the product and to the consumer that would result from an alternative design.

The appropriateness of a design depends largely, although not exclusively, on consumer expectations.  Liability may attach even if the product functioned as intended. A product may be defectively designed if it was designed in a manner that was more dangerous than necessary.

Industry design standards and/or the defendant’s own internal standards can be very helpful in these cases.  Those standards can be relied on to establish a minimum level of safety compliance below which a manufacturer may be deemed to have acted unreasonably.

A product may be defectively designed even if it contained an appropriate warnings of the danger posed.   A common misperception by the public is that a harmful product can be insulated from legal scrutiny is there enough warning stickers applied to it.  This is not true.  There is no assumption of the risk defense to design defect claims, or to any warranty claims for that matter.  Defendants cannot argue that their product is so inherently dangerous that the user should have known and avoided the product.  This is in essence admitting the design defect.  In addition, some individuals may not have a real alternative to using a dangerous product, as in the case of a factory worker who has to choose between working with dangerous lathe and losing her job.  In addition, the warning relied on by the defendant may not be effective in preventing accidents due to a plaintiff’s instinctual reactions, momentary inadvertence or forgetfulness.  Safety devices, not warning stickers, are needed to guard against these foreseeable situations.

(b)        Manufacturing defect.  The issue in a manufacturing defect case is whether the product was defectively manufactured or assembled. The manufacturing and inspection processes are the central issues.  The existence of a manufacturing defect may be shown by comparing the propensities of the product as sold with those that the product’s designer intended it to have, and then determining whether the deviation from the design rendered the product defective.  Most manufacturers have quality control departments with in-house standards and procedures.  Records are generally kept regarding inspections to ensure the product meets manufacturing guidelines.

It is also important to verify that the defect complained of was actually caused during the manufacturing process and was not the result of abuse or trauma after the product was sold.

A manufacturing defect can be illustrated with a recent running shoe case.  A young man was running track in a brand new pair of running shoes when the heel platform literally peeled away from the base of one shoe while he was rounding a turn.  The man suffered a torn Achilles and endured six surgeries after which he still has trouble walking and can never run competitively again.  Scientific materials analysis revealed that there had not been enough adhesive material applied to the heel platform during the manufacturing process.  The claim was not that every similar type of shoe design from this company was defective.  The claim was that this one shoe was defectively made because not enough adhesive had been applied to keep the shoe together under foreseeable uses.

(c)        Warning Defect.  Sellers and manufacturers can be liable not only for selling a defective product but also for failing to warn consumers and users about the hazards created by the product.  To prevail, it is necessary that the defendant knew or should have known of the hazard and then taken inadequate steps to warn of it.  This duty to warn arises even if the product is properly designed. There are several issues that pertain to warning defect claims.

(i)         Adequacy of the warning.  The adequacy of the written warning on the product is almost always the central issue in the case.  The most straightforward, and the rarer, cases involve dangerous products with no warnings whatsoever, either in the packaging, labeling or in the user manual.  The more challenging, and the more frequent, cases involve an inadequately phrased or inadequately placed warning.

A product warning must be comprehensible to the average user and must convey a fair indication of the nature and extent of the danger to a reasonable, prudent person.  The warning may be defective if it was unduly delayed, reluctant in tone or lacking in a sense of urgency.  Typically, a human-factors expert will be needed to help analyze and explain the deficiency of a warning.  The expert will explain to the jury how and why the color of a warning label, its location on the product, the size of its writing, the content of the writing and the proximity of other warning labels are all factors in determining whether users will see and appreciate the warning. 

(ii)       Obvious or known dangers.  There is no duty to warn where the danger complained of was obvious to the plaintiff or if the plaintiff was already aware of it.  Thus, if a plaintiff acknowledges that he was aware of the product’s specific hazard, then it is likely that a court will conclude that there was no duty to warn and that particular claim will be dismissed.  The rationale for this rule is that no amount of warnings can deter a person from interacting with a product that the user knows to be hazardous.

A clear example would be in the case of a lawnmower designed and sold with no blade guard.  If the plaintiff knows there is no guard and still proceeds to put his hand near the blade while it is running and loses a finger, there will be no failure to warn claim where the evidence indicates that the plaintiff knew about the hazard.  Thus, any warnings would have been superfluous and not heeded.  However, often a plaintiff will testify that she knew of the general hazardous nature of the product but was not thinking about the specific danger at the time of the accident. The plaintiff will claim that if a warning label had been affixed to the product, she would have been reminded of the danger and the accident would have been avoided.  If the court is persuaded as to the reasonableness of this claim, the failure to warn claim survives and could go to the jury to decide whether the duty was breached.

(iii)      Duty to warn foreseeable users.  The general rule (with exceptions discussed below) is that a manufacturer or seller of a product has a duty to warn all foreseeable users of its product of any known hazards.  This duty can, and often is, addressed with permanent warning labels affixed directly to the product so whoever is using it (whether it is the purchaser, or his family member, or a friend who borrowed it) will have an opportunity to read and heed the warning.

However, some products – based on their nature, their durability or the manner in which they are sold and distributed – are not amenable to such types of warnings.  In those situations, courts have recognized exceptions to the general rule as follows.

(iv)      Limited exception for second-hand purchasers.  Remote, or second-hand, purchasers are still also owed a duty to warn, but only under limited circumstances.  Where a seller knows or reasonably should have known of a product’s dangers discovered post-sale, it has a duty to warn users of substantial risks of harm if a reasonable person in the seller’s position would provide a warning and if those to whom the warning might be given can be identified and the warning effectively communicated to them.  In the leading case on this point, the defendant did not have a duty to warn the plaintiff about the dangers posed by a snow thrower, originally sold in 1966, and then re-sold to the plaintiff in 1982 as a second-hand purchase from a friend.  The court concluded that it would be unreasonable to require the original manufacturer to warn the plaintiff who purchased the second hand product, sixteen years after it was originally sold, and did not own the product until years after a duty to provide additional warnings arguably arose.

(v)       Exception for bulk suppliers.  This rule applies when a manufacturer-supplier of bulk products is able to, under certain circumstances, discharge its duty to warn end users of a product’s hazards by reasonably relying on an intermediary.  This rule would apply to a bulk supplier of a hazardous chemical who sells to an intermediary manufacturer that then packages, markets and sells the chemical as part of a consumer cleaning product to the public.  Among other defendants and among other claims, a consumer who suffers blindness when the cleaner spray misfires into her eye could allege that the bulk supplier of the toxic chemical should have warned her about the hazardous properties of the chemical on the product’s labeling.  The jury will be instructed to consider whether the bulk supplier gave an adequate and sufficient warning to the intermediary company that packaged and re-sold the product in a spray bottle, whether it had no reason to anticipate any negligence or other fault on the part of the intermediary, and whether it had no indication that the intermediary was inadequately trained, or unfamiliar with the product, or incapable of passing on its knowledge about the product to the ultimate users of the product.

(vi)      Exception for drug manufacturers: the learned intermediary.  Again, a manufacturer’s warning to its immediate purchaser does not discharge the ongoing duty to warn consumers down the line of a product’s hazards.  Usually, the manufacturer must provide a warning to all persons who will foreseeably come into contact with and consequently be endangered by the product.

However, under very limited circumstances recognized primarily in pharmaceutical drug defect cases, a drug manufacturer may be absolved from blame because of a reasonable and justified reliance on a learned middleman, such as a physician or a pharmacist.  In that situation, the manufacturer may be relieved of liability because the intermediary’s failure to pass the warning along to the next purchaser is viewed as a superseding cause of the plaintiff’s injury or because under the circumstances the manufacturer cannot be reasonably expected to communicate with the ultimate purchaser.  With respect to pharmaceutical companies, the primary focus seems to be on whether the patient would be expected to be warned of the danger by his or her physician, rather than the manufacturer. 

In one well known drug case against the manufacturer of harmful birth control pills, the court noted that oral contraceptives purchased by the plaintiff were purchased over a long period of time and did not necessarily correspond with appointments with her doctor.  Furthermore, the patient initiated the decision to use oral contraceptives and sought a prescription from her physician (as opposed to having the physician suggest them among other therapeutic alternatives).  Consequently, the court held that the manufacturer had a duty to warn the patient directly, and it was not sufficient to merely warn the physician.

(vii)     State of the art.  A failure to warn defendant has a duty to warn only if it knew or should have known that a product was dangerous.  Thus, a defendant will not be held liable for failure to warn of risks or hazards that were not reasonably detectable at the time of sale based on the then existing state of the art of testing technology.  Under this rule, a manufacturer will be held to the standard of knowledge of an expert in the appropriate field and will remain subject to a continuing duty to warn purchasers of risks discovered following the sale of the product at issue.  The defendant can therefore argue that it was not feasible to warn of dangers posed by the product because the defendant neither knew nor could have known of the dangers.

5.        Proximate cause.

The plaintiff has the burden of proving that the product defect, be it a design defect or a manufacturing defect or a warnings defect, was a proximate cause of the injuries sustained.  Proximate cause means a substantial, contributing cause to the injury.  The product need not have been the sole cause of the injury, but merely a substantial, contributing cause.  The causal connection between the product and the injuries however cannot be left to conjecture, surmise or speculation.

D.        Defenses to Breach of Warranty.

Three general types of defenses can apply in any breach-of-warranty claim:

1.         “Correia” defense

2.         Notice defense

3.         Disclaimer of warranty

1.         The “Correia” defense.  This is by far the most important defense to a warranty of merchantability claim.  Its name is derived from the seminal Massachusetts Supreme Judicial Court decision in Correia v. Firestone Tire & Rubber Co.  The court in that case ruled that a plaintiff may not recover if, “after discovering the product’s defect and being made aware of its danger, he nevertheless proceeded unreasonably to make use of the product and was injured by it.”  This defense is aimed at the element of proximate causation and focuses on the plaintiff’s conduct as an intervening cause of the injury at the time of the accident.  This defense acts as a complete bar to the warranty claim.  The defendant has the burden of proving this defense at trial.

There are five elements the defendant must show to establish the “Correia” defense:

(a)        the plaintiff knew that the product was defective;

(b)        the plaintiff knew that the product was dangerous and understood the magnitude of the danger;

(c)        the plaintiff voluntarily encountered the danger;

(d)        the plaintiff acted unreasonably; and

(e)        the plaintiff’s conduct was a proximate cause of his or her injury.

The defendant must prove all five elements to prevail.

This warranty defense should be distinguished from the defense of comparative negligence.  Comparative negligence is only a defense to a negligence claim, not to breach of warranty claims.  Though for all practical purposes, this legal nicety will be lost on jurors asked to consider both negligence and breach of warranty at trial.  A jury that is willing to find comparative negligence, will likely also find the elements satisfied for a “Correia” defense to a warranty claim.

The “Correia” defense should also not be confused with the concept of product misuse.  They are distinct legal concepts.  Product misuse refers to a use of the product that was not intended by the manufacturer.  The “Correia” defense refers to situations where the plaintiff knows that the product is defective and dangerous but nevertheless voluntarily and unreasonably proceeds to use it. The plaintiff need not have misused the product for the “Correia” defense to apply.  So, the “Correia” defense could apply even if the plaintiff was using the product in exactly the manner intended by the manufacturer. Conversely, in a misuse situation, the plaintiff need not appreciate the risks of his or her conduct for misuse to defeat the claim.  The plaintiff may simply have been using the product in a manner the defendant could not reasonably have foreseen.

The “Correia” defense has its limits however.  It can be used only where the magnitude of the risk understood by the plaintiff encompassed the injury that he or she actually received.  In other words, the defense does not apply if the plaintiff receives an injury that is greater than the risk he or she understood.  In one well known case, the Appeals Court held that the jury could properly find that the plaintiff did not know that there was a danger that he would lose his entire arm by using a machine product.  Thus, the injury he received was “beyond the magnitude of the danger the plaintiff perceived,” and the defense did not apply.

The time at which the plaintiff understands the particular danger posed by the defect is also important.  To establish the “Correia” defense the defendant must prove that the plaintiff voluntarily encountered the danger “on the occasion in question.”  It is not enough to merely showing that the plaintiff had a general knowledge of the danger but on that on this occasion inadvertently placed himself in a dangerous position vis a vis the product at issue.

In addition, in workplace injuries, the control that a plaintiff’s employer exerts over his or her actions may be of significance to the “Correia” defense.  The defense is inapplicable where an injured plaintiff did not voluntarily encounter the danger but was instructed to use a machine in a certain way with no practical alternative.

2.         The notice defense.  Under the Uniform Commercial Code as adopted by the Massachusetts Legislature, a party seeking to recover for breach of warranty must give notice of the breach to the defendant.  The statute is silent as to a specific time frame for the notice, so the notice should be given within a reasonable time so as to allow the defendant properly investigate the product.  Failure to give the required notice, however, does not bar a plaintiff’s claim unless the defendant proves that it was prejudiced thereby. Consequently, the notice requirement does not usually create a viable defense to a product liability claim for breach of warranty unless the lack of notice somehow results in a loss of evidence or prevents the defendant from investigating the incident.  This would occur if after the accident the product is lost or removed by some third-party and not properly safeguarded.  Usually the notice defense is not an issue when the product at issue remains in the plaintiff’s control and he can demonstrate that the product has not been altered or tampered with following the accident.

3.         Disclaimer.  Sales contracts will sometimes attempt to disclaim the implied warranty of merchantability by stating something like: “Purchaser agrees that there are no implied warranties for this product.”  With respect to consumer retail goods, which comprise the vast majority of warranty claims, such disclaimers are invalid and have no legal effect.

As to transactions where disclaimers could be deemed valid such as a commercial sale of an industrial machine, disclaimers are binding only on parties to the sales contract.  This severely limits the scope of the defense since an employee injured while using the machine would not be deemed a party to the contract wherein her employer purchased the machine.  Thus, any disclaimer could not be applied to the injured employee’s implied warranty claims.

E.        Negligence.

In addition to breach of warranty, a seller or manufacturer of a harmful product can also be held legally responsible for negligence acts or omissions in its involvement in bringing the product to market.  For a deeper discussion of the law of negligence in Massachusetts, please refer to the blog below.

In general, a seller of a product has a duty to exercise reasonable care in the sale, design and manufacture of that product.  Thus, like all other negligence claims, the plaintiff must establish a duty owed to the plaintiff, a breach of the duty, proximate cause and damages.

The duty owed by the defendant is one of reasonable care, not perfection.  The defendant is held to the standard of the ordinary, reasonably prudent designer or manufacturer in like circumstances.  The focus on a negligence case is twofold: the conduct of the defendant and the condition of the product.  Thus, the plaintiff has one more burden than in a breach of warranty case.  The plaintiff must prove not only that the product was unreasonably dangerous.  He must also prove that the defendant’s conduct was unreasonable.  For this reason, plaintiffs routinely dismiss the negligence count at the time of trial and proceed just on the warranty claim.

Though sometimes more difficult to prove, a negligence claim necessarily focuses on the same core factors as a warranty claim, namely the adequacy and reasonableness of the product’s design and manufacture.  Indeed, a jury finding that the defendant was negligent must also find that the defendant breached its warranty of merchantability.  In other words, it would be inconsistent to find that a defendant was negligent, but that the product it designed, manufactured or sold was not defective.  

The primary defense to a negligence claim in a product liability case is that of comparative negligence.  If the jury finds that the plaintiff was more than 50 percent negligent, the plaintiff is totally barred from recovery.  If the jury finds the plaintiff less than 51% at fault, then the plaintiff’s monetary award is reduced by that percentage.

So if a jury finds a forklift manufacturer negligent for designing a top heavy machine that tipped over and crushed the operator, and if the jury also finds the operator 20% at fault, then the total award will be reduced by 20% by the judge after the trial.  If the same jury found the operator 60% at fault for causing the tip over, then the verdict will be for the defendant manufacturer.

F.         Chapter 93A Consumer Protection.

Pursuant to Massachuetts statute codified at General Laws chapter 93A, § 2(c), the Attorney General of the Commonwealth has promulgated a regulation that states: “it shall be an unfair and deceptive act or practice to fail to perform or fulfill any promises or obligations arising under a warranty.”  The implied warranty of merchantability is specifically included in the definition of a “warranty.”  As a result, plaintiffs can invoke chapter 93A in product liability cases.  Technically then, any breach of warranty automatically constitutes a violation of this consumer protection statute.

Applying chapter 93A in a product liability context has significant implications. First, in addition to recovering actual damages, the plaintiff is entitled to recover the value of the attorney fees incurred in prosecuting the warranty claim.  The defendant can limit its liability for attorney fees, however, by making a reasonable offer of settlement in response to the plaintiff’s preliminary demand letter.  If under all of the circumstances, the offer is deemed reasonable, the defendant is not liable for fees incurred after the plaintiff rejected the offer.

Second, the defendant will be liable for double or treble damages if, in bad faith, it fails to make a reasonable offer of settlement after receiving a demand letter and it knows or has reason to know that its conduct violated chapter 93A.

Chapter 93A cases are usually tried before the judge after the jury verdict for the plaintiff on a warranty claim.  Chapter 93A claims are so commonplace that they require exceptional presentation to cause a judge to really take them seriously.  Massachusetts judges are not particularly receptive to the punitive aspect of double or treble damages and, consequently, it is hard to persuade them that bad faith has occurred. 

Chapter 93A cases are usually defended by arguing that the offer was reasonable, or that there was no bad faith involved.  Where the 93A claim is based on breach of warranty, the defendant can raise the same defenses that are applicable to breach of warranty.  The defendant may also assert that the plaintiff’s demand letter did not comply with the precise statutory requirements for a demand letter.


Leave a Reply