As I discussed in a prior post, the substantive law applicable to a dispute can have a tremendous impact on its outcome. But what about the procedural law of the jurisdiction where a suit is being litigated? If that jurisdiction is Massachusetts, the procedural law can have a potentially game-changing impact – even if the substantive law of another jurisdiction will be applied to the underlying claims. Further, hauling an out-of-state person or entity into Massachusetts to defend a suit may be easier than you think.
Unique Aspects of Massachusetts Procedural Law
Obviously, there is sometimes a significant advantage to suing an out-of-state party in Massachusetts simply to have the “home field advantage” and to inconvenience the defendant. There is, however, another reason why a plaintiff may want to sue in Massachusetts. While virtually all jurisdictions allow a plaintiff to obtain a preliminary injunction, if the plaintiff can show that it has a likelihood of success on the merits and that, absent injunctive relief, it will suffer irreparable harm, under Massachusetts procedural law, a plaintiff can obtain a prejudgment “attachment” of a defendant’s bank account, real estate or personal property upon a mere showing of a likelihood of success. Further, such prejudgment attachments prevent defendants from disbursing funds from their bank accounts or transferring or encumbering any real or personal property subject to an order of attachment.
Being able to freeze a defendant’s bank account and/or prevent it from accessing the equity in its real or personal property can have a devastating affect. Indeed, more than one defendant has been forced to settle a case where it had a very solid defense simply because it could not afford to litigate for months or years with an attachment on its bank account or some other key property. As such, and as I discussed in two previous posts, in-house counsel should know how these sorts of attachments, particularly bank attachments, work for both offensive and defensive purposes.
Suing an Out-of-State Person or Entity in Massachusetts May Be Easier Than You Think
The Massachusetts Long-Arm Statute, M.G.L. c. 223A, §3, allows a court to exercise personal jurisdiction over a person or business entity if that person or entity (among other things):
- Transacts any business in Massachusetts;
- Contracts to supply services or things in Massachusetts;
- Causes tortious injury by an act or omission in Massachusetts; or
- Has an interest in, uses or possesses real property in Massachusetts.
Just as technology has made our world seem so much smaller, so too has it made it more likely that someone outside of Massachusetts can be sued in the Commonwealth. For instance, a judge in the Middlesex Superior Court held this past September that an individual who never had lived or previously come to Massachusetts was subject to suit in the Commonwealth because her allegedly defamatory postings on the internet about two Massachusetts residents were “plainly intended to cause harm in Massachusetts.”
In another case, Haddad v. Taylor, the Massachusetts Appeals Court took an even more expansive view of when an out-of-state person legitimately can be made a defendant in a Massachusetts lawsuit. In that case, the mere negotiation of a contract was held sufficient to subject the defendant to the jurisdiction of Massachusetts even though those negotiations (i) did not lead to a consummated contract; (ii) were via telephone; and (iii) did not involve the defendant ever setting foot in Massachusetts.
Because many out-of-state businesses and their counsel have no idea that prejudgment attachments even are possible, they are vulnerable to them – if, but only if, the suit is brought in Massachusetts. Thus, in-house counsel may want to strongly consider a Massachusetts forum selection clause in agreements, even if they have to concede other deal terms in order to obtain them.