The possibility for a jury trial over a Chapter 93A claim in federal court exists (under certain circumstances), as we discussed on Aug. 20, 2024. In that post, we explained there is no such right in Massachusetts state court, based on the Supreme Judicial Court’s 1983 Nei v. Burley decision. On Aug. 28, the Hon. Kenneth W. Salinger, Justice of the Massachusetts Superior Court, agreed in GIUL, LLC v. Shenghuo Med., LLC.
In GIUL, LLC, the plaintiff brought claims under the Massachusetts Uniform Securities Act (MUSA) and Chapter 93A, Section 11, alleging the defendant duped it into making a bad investment in Shenghuo Medical, LLC. After a bench trial, Judge Salinger issued findings of facts and conclusions of law and noted that the court had exercised its discretion to try the claims without a jury. When doing so, Judge Salinger explained that the alleged MUSA violations were in the nature of an equitable rescission claim, which did not create a jury right. As to the Chapter 93A claim, citing Nei v. Burley, Judge Salinger also concluded that there existed no constitutional or statutory right to a jury trial.
As to the Chapter 93A claim itself, Judge Salinger sided with the defendant because the underlying conduct concerned the defendant’s honest business judgment. Even if that judgment was mistaken, as explained by Judge Salinger, making a business judgment mistake does not implicate Chapter 93A. Rather, Chapter 93A requires more than a finding of mere negligence and, therefore, where a mistake does not involve intentional deceit or negligent misrepresentation, it does not run afoul of Chapter 93A. Stated another way, a defendant who acts in “good faith” and exercise honest business judgment cannot be held liable under Chapter 93A, according to the court.
Although there are many cases indicating that a negligent misrepresentation does violate Chapter 93A, two of which the court cited in GIUL, LLC, those holdings seem inconsistent with the concept that negligence itself does not violate Chapter 93A. For example, if a defendant made a negligent misrepresentation in good faith, and the misrepresentation arose from an honest mistake without any intent to deceive, the rationale underlying the no-Chapter 93A-liability-for-negligence-and-honest-mistake cases like GIUL, LLC would seem to apply equally to that form of negligence.