The U.S. District Court for the District of Massachusetts and the Massachusetts Superior Court recently held that Chapter 80 of the Acts of 2008 (Chapter 80)—which amended Massachusetts General Laws ch. 149, § 150 to provide for mandatory treble damages for state wage and hour law violations—does not apply retroactively.
In DiFiore v. American Airlines, Inc., the plaintiff skycaps sued American under Massachusetts General Laws ch. 149, § 152A (the Tip Statute), claiming the fee that the airline charged to passengers for curbside baggage check-in services constituted a tip which should properly have been paid to them. Following a jury verdict in the plaintiffs’ favor, American moved for reconsideration of an earlier order in which the Court had held that the plaintiffs’ claims were not preempted by the Airline Deregulation Act. The Court denied the motion, holding that American had failed to show that the Tip Statute had a “significant effect” on airline prices or services, as would be necessary to establish preemption. The Court stated its disagreement with other recent District Court decisions finding preemption under similar facts.
The Court then addressed the plaintiffs’ motion to amend the judgment to include treble damages pursuant to Chapter 80, which they requested even though the trial and conduct at issue had occurred prior to the effective date of the amendment. The Court denied the skycaps’ motion, noting that as a general rule all Massachusetts statutes are prospective in their operation unless made retroactive by unequivocal terms.
The District Court further held that since the amendment constitutes a change to the substantive rights of employers and employees, it cannot be applied retroactively. The Court examined whether the amendment was enacted as a clarification of the existing law, but held that since the amendment was not an immediate reaction to any application of the law and because the legislature had given no clear indication that the amendment was meant to explain the statute, the amendment could not be deemed a clarification. In addition, the Court ruled against the skycaps’ argument that the decision of the Massachusetts Supreme Court (SJC) in Somers v. Converged Access, Inc. mandated that the recent amendment be given retroactive effect. The Court stated that in Somers the SJC merely listed damages that might be available to the plaintiff, but did not express an opinion as to the retroactive effect of the amendment.
Following DiFiore, the presiding judge of the Business Litigation Session of the Superior Court likewise held that Chapter 80 does not apply retroactively. In Hernandez v. Hyatt Corp., hotel employees argued that the company had violated the Tip Statute by including banquet captains in its hotels’ service charge pools. The plaintiffs asserted that the mandatory treble damages provision applied retroactively to the conduct at issue, which occurred between 2002 and 2004. Judge Hinkle relied heavily on the District Court’s analysis in DiFiore in finding the provision does not apply to alleged conduct that predates the amendment.
Together, DiFiore and Hernandez provide increased support for the proposition that mandatory treble damages cannot be imposed on conduct that occurred prior to the effective date of Chapter 80. Of the four trial court decisions that address this issue, three have decisively held that the amendment has no retroactive effect.