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Full text of "Report of the attorney general for the year ending .."

Public Document 



No. 12 



rary of A jseits 

State House, Boston 



0% (Eommoniuealtij of iltasBachuBetts 



REPORT 



OF THE 



ATTORNEY GENERAL 



FOR THE 



Year Ending June 30, 1984 




PUBLICATION OF THIS DOCUMENT APPROVED BY DANIEL D CARTER. STATE PURCHASING AGENT 



fVU<. 

RHC1 



iLtyt (Eommmtuiealth, of fWaBsarijuaettB 



To the Honorable Senate and House of Representatives: 

I have the honor to transmit herewith the Report of the Department of the Attorney 
General for the year ending June 30, 1984. 

Respectfully submitted, 

FRANCIS X. BELLOTTI 

Attorney General 



P.D. 12 



DEPARTMENT OF THE ATTORNEY GENERAL 



Attorney General 
FRANCIS X. BELLOTTI 

First Assistant Attorney General 
Thomas R. Kiley 



Assistant Attorneys General 



Jacqueline Allen 14 
Richard Allen 7 
James Aloisi 50 
John Amabile 
Dorothy Anderson 2 
Nicholas Arenella 
Donna Arzt 
Thomas Barnico 
Madeline Becker 
Annette Benedetto 
Despena Billings 
Lee Bishop 
Paul Bishop 62 
Edward Bohlen 19 
Mark Bourbeau 18 
Kenneth Bowden 
Stephen Bowen 
Kathleen Bowers 6 
Lee Breckenridge 
Roberta Brown 
Cynthia Canavan 13 
Eric Carriker 7 
William Carroll 62 
Gerald Caruso 56 
James Caruso 
Francis Chase 
Paul Cirel 
Cheryl Conner 9 
John Cratsley 
John Curran 63 
Richard Dalton 
Paula DeGiacomo 
Ernest DeSimone 64 
George Dean 
Elaine Denniston 
Vincent DiCianni 
Carol Dietz 
Michael Dingle 
John Donohue 
Elizabeth Donovan 
Raymond Dougan 
Joan Entmacher 
Leslie Espinoza 
Michael Farrington 55 
L.j^uu litzpatrick 16 
Peter Flynn 
John Fox 
Maureen Fox 



Robert Gaines 
Dwight Golann 
Paul Good 
John Graceffa 
Alexander Gray 
John Grugan 
Catharine Hantzis 65 
Michael Hassett 
Craig Havel 5 
Beverly Hayes 17 
F. Timothy Hegarty 67 
David Hopwood 61 
Marilyn Hotch 59 
Andra Hotchkiss 
William Howell 
Edward Hughes 
Jeffrey Hurwit 10 
Linda Irvin 66 
Ellen Janos 
Michelle Kaczynski 
Richard Kanoff 
Jamie Katz 
Linda Katz 
Thomas Keaney 58 
Sally Kelly 
Michael Kogut 11 
Alan Kovacs 
Steven Kramer 
Raymond Lamb 
Paul Lazour 
Leonard Learner 12 
Stephen Leonard 
Martin Levin 
James Lewis 
Maria Lopez 
William Luzier 
Dana Mason 57 
George Matthews 
Paul Matthews 
Susan McHugh 4 
Edward McLaughlin 
Georgianna McLoughlin 
William McVey 
Paul Merry 
William Mitchell 
Paul Molloy 15 
Paul Muello 
Mark Muldoon 



P.D. 12 



Kim Murdock 
Thomas Norton 
Henry O'Connell 
Carlo Obligato 
Stephen Ostrach 
Christopher Palano 54 
Howard Palmer 
William Pardee 
Charles Peck 
Carmen Picknally 8 
Edward Quinlan 51 
Richard Rafferty 
T. David Raftery 
Frederick Riley 
Susan Roberts 1 
Frances Robinson 3 
John Roddy 
Ann Rogers 
Michael Roitman 52 
James Ross 
Hilary Rowen 
Dennis Ryan 
Anthony Sager 60 
Holly Salamido 7 
Brison Shipley 16 
JoAnn Shotwell 



E.Michael Sloman 
Barbara A. Smith 
Scott Smith 53 
Carol Sneider 
Dianne Solomon 
Donna Sorgi 
Johanna Soris 9 
Joan Stoddard 
Kevin Suffern 
Christopher Sullivan 
Diana Tanaka 
Diane Tsoulas 
Carl Valvo 
Charles Walker 
John Ward 
John White 
H.Reed Witherby 
Carolyn Wood 
Christopher Worthington 
Steven Wright 64 
Judith Yogman 
Andrew Zaikis 
Margaret Zaleski 
Donald Zerendow 
Stephen Ziedman 



Assistant Attorneys General Assigned To Division of Employment Security 



Robert Lombard 
George J. Mahanna 64 



John Harvey 
Robin Ultcht 15 



Chief Clerk 
Edward J. White 

Assistant Chief Clerk 
Marie Grassia 



APPOINTMENT DA TE 

1. 7/11/83 

2. 7/18/83 

3. 8/8/83 

4. 8/16/83 

5. 9/6/83 

6. 9/19/83 

7. 9/26/83 

8. 10/17/83 

9. 11/7/83 

10. 11/21/83 

11. 12/19/83 

12. 1/23/84 

13. 1/30/84 

14. 2/13/84 

15. 4/2/84 

16. 4/17/84 

17. 5/14/84 

18. 5/21/84 

19. 6/11/84 



TERMINA TION DA TE 

50. 7/1/83 

51. 7/12/83 

52. 7/29/83 

53. 8/2/83 

54. 8/29/83 

55. 9/16/83 

56. 9/27/83 

57. 10/28/83 

58. 11/25/83 

59. 1/9/84 

60. 2/1/84 

61. 2/24/84 

62. 3/9/84 

63. 3/19/84 

64. 3/30/84 

65. 6/1/84 

66. 6/18/84 

67. 6/20/84 



P.D. 12 



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P.D. 12 U 



In accordance with the provisions of section 1 1 of chapter 1 2 and of section 
32 of chapter 30 of the General Laws, I hereby submit the Annual Report of 
the Department of the Attorney General for fiscal year 1984. This is the tenth 
report that I have filed as the Attorney General of the Commonwealth and 
it chronicles the efforts and accomplishments of a dedicated staff over the past 
fiscal year. This introduction does more than that, however, because if offers 
an appropriate opportunity to look at the numerous institutional changes that 
have been made in the functioning and operation of this Department during 
the past ten years. Some of these changes are permanent and the result of 
legislative enactments; some will endure only because they have been established 
and maintained for nearly a decade. 

As this is first and foremost a report to the General Court, I begin with those 
institutional changes mandated by the Legislature and more specifically with 
those providing increased protection to the public. Perhaps the most signifi- 
cant of those changes involve representation of the public interest in rate-making 
proceedings. In 1976, realizing that the consumers of this state had virtually 
no representation at insurance and utility rate-setting hearings, the Legislature 
authorized this office to intervene in those proceedings on behalf of any group 
of consumers. Pursuant to that statutory authorization, I created separate 
utilities and insurance divisions within the Public Protection Bureau. The 
underlying wisdom of the legislation was borne out in last year's results. Dur- 
ing the past fiscal year the intervention of the Insurance Division alone, resulted 
in a total savings of $ 1 1 6, 000,000 to the consumers of this state. Focusing even 
more narrowly on our intervention in the automobile insurance rate setting 
hearing, the Commissioner of Insurance set a rate of $102,000,000 less than 
that requested by the insurance industry. That decision resulted in a savings 
of about $40.00 for each private passenger car in the state. Similarly, as the 
ensuing report demonstrates, the savings realized for Massachusetts consumers 
by the Utilities Division in the past fiscal year equaled $85,333,524. This is 
money often desperately needed by the elderly and the ill who cannot afford 
to pay exorbitant fees for gas and electricity. 

In 1977, just one year after passing the utilities and insurance legislation, 
the General Court created the Local Consumer Aid Fund to be administered 
by this Department. The rationale for the fund mirrors my own vision of ef- 
fective consumer representation; the Attorney General is best suited to litigate 
cases where a pattern of violations exists, while the resolution of individual 
consumer complaints is best handled by local groups, familiar with individual 
businessmen and consumers. This fund has enabled numerous local groups 
to receive the financial support they need to aggressively protect consumers 
throughout the state. During the past year we were able to augment the finan- 
cial backing of these groups with the additional resource of a face-to-face media- 
tion capability. An alternative dispute resolution coordinator was hired to 
develop a face-to-face mediation capacity to supplement the mediation/negotia- 
tion techniques previously used by the various local groups. 



12 P.D. 12 

Following the pattern of enacting one significant public protection measure 
a year, the General Court passed the Massachusetts Antitrust Act in 1978. One 
of its key provisions is a revolving fund, which permits the Department to en- 
sure that violators, not the public, pay for our enforcement efforts. The need 
for such a fund is great, because antitrust cases are typically both time- 
consuming and complex. To illustrate the point, last year's most significant 
cases have continued into the next fiscal year. Nationally we are involved in 
cases against the pertroleum industry with more than two billion dollars at stake. 
Locally we are engaged in protracted litigation with the fledgling bottle redemp- 
tion industry to ensure that the Commonwealth's "Bottle Bill" is enforced. 
It is hoped both of these matters will be resolved in the next fiscal year. 

One of the statutory and institutional changes affecting the Department of 
which I am most proud was the enactment in 1979 of the state Civil Rights 
Act. One section of this law gives this Department the power to protect all those 
who are discriminated against by threats or intimidation because of their race, 
sex or national origin. Again the best test of the law is how well it has been 
used. Last year the Civil Rights Division aggressively enforced this law secur- 
ing numerous convictions throughout the state against those who attempted 
to deprive families of their right to live in their chosen neighborhoods. The 
Division has been particularly active in fighting against emerging acts of 
discrimination against the Southeast Asian community, bringing at least six 
cases last year alleging racially motivated violence against this newest of im- 
migrant groups. 

Having praised the General Court, the fact remains that one of the very first 
actions I took as Attorney General was to move the Department from the State 
House to the new State Office Building. This move signalled the separation 
of the legal representation of the state from political considerations. In- 
dependence from political considerations is an extremely important change 
in the operation of this Department. 

Equally important are the numerous changes in the structure, operation and 
focus of the Department that have been accomplished without the need to resort 
to legislation. When I first assumed this office, I organized the various func- 
tions performed by the Department of the Attorney General into bureaus, 
depending upon the type of legal activity involved. This bureau organization 
has allowed us to share specialized information and resources among a small 
group of attorneys who readily became recognized experts in the various fields. 
By depoliticizing the office and specializing our practice, I have achieved the 
professionalism the public deserves. That professionalism touches all our 
bureaus. 

Beginning in 1975 when I first took the oath of office, the focus of the 
Criminal Bureau has been on the hard cases not previously handled by other 
Attorneys General. One specialty that has come with depoliticizing the office 
has been prosecuting those individuals engaged in acts of public corruption, 
without consideration of political or party affiliation. During the past ten years 
this Department has investigated and prosecuted well over one hundred such 
cases. These efforts have resulted in the resignation of three Sheriffs and two 



P.D. 12 13 

District Attorneys. A Boston Fire Captain, a Chelsea Fire Captain and a State 
Police Lieutenant Detective have all been prosecuted. The list of convictions 
includes a state Senator, the Bureau Chief of the Division of Occupational 
Education and an Associate Commissioner of the Department of Education. 
A sitting cabinet Secretary was prosecuted and convicted as was the Director 
of the Division of Food and Drugs. This unswerving committment to vigorously 
prosecute public corruption where ever it occurs is a significant development 
in the focus of the Department of the Attorney General and one that cannot 
and should not be changed. 

Another new committment has been to acquire all of the physical resources 
necessary to provide the Commonwealth with quality legal service. A library 
was established in our offices equipped with all of the reports, encyclopedias, 
digests and treatises needed for effective legal research. These resources have 
been augumented within the past fiscal year by a legal computer research 
capability. A computer system was established to monitor and control the flow 
of the vast number of law suits handled by this Department. A modern word 
processing system was installed to enable the Department to keep pace with 
changing technologies and to compete with opposing parties. With these tools 
the work of the Department has attained new heights. Representation of the 
Commonwealth has never been better. While examples abound I point to the 
work of but one Assistant Attorney General who last year presented three 
separate cases to the United States Supreme Court and won all three. She was 
able, in each case, to convince the court to strenghten the tools available to 
law enforcement officials in prosecuting criminal offenders. 

One institutional phenomenon that has occurred during the past ten years 
that I am particularly proud of, is the commitment to the goal of excellence 
that has been made by every member of the staff. The caliber of the individuals 
who work here and who have worked here, is of the highest level. While I am 
sure that my predecessors felt that their staffs were outstanding, it was not 
until I took office in 1975 that all Assistants were precluded from practicing 
as private attorneys as well. With full time service came a tradition of excel- 
lence and public service perhaps best illustrated by looking at what my staff 
does when they leave this Department. For instance, of the five individuals 
who comprised the first four Bureau Chiefs and First Assistant that I appointed, 
three were subsequently named federal or state judges, one is the elected District 
Attorney of Middlesex County and the other currently serves as Counsel to 
the Governor. Their legacy continues; the legal staff that has been assembled 
here remains one of the finest cadres of legal talent in the Commonwealth. 
Indeed I am now able to lure people from the bench to serve in the Department 
and not merely to prepare future judges. 

With all these institutional changes our shared dream is that the commit- 
ment to excellence shared by and demanded from all Assistant Attorneys General 
will remain even when the changes themselves appear passe. 



14 P.D. 12 

MONEY RECOVERED AND SAVED 
FOR THE COMMONWEALTH AND ITS CITIZENS 

/. MOSEY RECOVERED FOR THE COMMONWEALTH TREASURY 

A. Charitable Registrations and Certificate Fees S 218.220.00 

B. Escheats 351.232.57 

C. Collections. Rent 71.000.00 

D. Collections. General 147.056.15 

E. Delinquent Unemployment Compensation Claims 2.319.038.35 

F. Fraudulent Unemployment Compensation 181.789.00 

G. Criminal Delinquent Tax Recover)- 1.250.000.00 

TOTAL S 4.538.336.07 

//. MONEY RECOVERED AND SAVED FOR COMMONWEALTH CITIZENS 

A. Hill-Burton FY 1984 S 300.000.00 

B. Antitrust Recoveries 

C. Deposits to Antitrust Enforcement Fund 

D. Judgments. Settlements and Restitution In 

Consumer Protection Division Court Cases 1 .103.500.00 

E. Consumer Recoveries. Non-Court Cases 369.844.56 

F. Insurance Rate Savings 116.000.000.00 

G. Utility Rate Savings " 85.333.524.00 
H. Medicaid Fraud Fines and Restitution 792.922.00 
I. Civil Penalties. Costs and Grants In Environmental 4.500.000.00 

TOTAL S208.399.790. 56 

TOTAL TABLES I AND II S2 12.938. 126.63 



I. CIVIL BUREAU 

CONTRACTS DIVISION 

The responsibility of the Contracts Division generally involves three areas: 
1) Litigation involving matters in a contractual setting : 2) Advice and counsel 
to state agencies concerning contractual matters: and 3) Contract review. 

A. Litigation 

The Contracts Division represents the Commonwealth, its officers, and agen- 
cies, as both party plaintiff and defendant in all civil actions involving con- 
tract and contract related disputes. 

A majority of the cases handled by the Division concern public building, 
state highway, and public work construction disputes. Other typical cases in 
the Division involve claims arising from the interpretation of leases, employ- 
ment contracts, statutes, rules, regulations, and surety bonds. 



P.D. 12 15 

In contract actions against the Commonwealth, G.L. c.258, §12, is, for the 
most part, the controlling statute. At the commencement of actions, litigants 
routinely seek temporary restraining orders and preliminary injunctions against 
the Commonwealth, its agencies, and officers. The granting of such relief would 
delay the execution of contracts, increase contract costs, and result in addition- 
al claims for damages. During the fiscal year. Division attorneys successfully 
resisted all such attempts for injunctive relief. 

Government contract disputes have become more complicated since there 
has been a tendency for consultant engineers, architects, and subcontractors 
to be joined as parties. Discovery in contract cases is prolonged, partly due 
to the volume of documentation and the complexity of the issues, especially 
in the building construction area. 

The impact of recent legislation, the Omnibus Bill "To Improve The System 
Of Public Construction In The Commonwealth. C. 579. Acts Of 1980, 
Sponsored By The Special Commission Concerning State and County 
Buildings' ' has become increasingly evident during the past fiscal year. A number 
of actions involving the construction of the statute relating to the validity of 
the minority and women-owned "set aside" provisions have be^n initiated. 

Actions pursuant to G.L. c.30, §39N and G.L. c.30. §390. seeking equit- 
able adjustments in the contract price and disputes arising from the language 
of agency promulgated regulations also have been brought with increasing 
frequency . 

Trials of contract cases are often complex and involve lengthy hearings. Dur- 
ing the fiscal year, the Division attorneys have successfully avoided references 
to masters, resulting in an increased frequency of trials before the court. Many 
of the cases tried involve appeals. 

In some instances, as many as eight years transpire before a case is finally 
resolved. One example is an action completed during the fiscal year which in- 
volved two appeals to the Supreme Judicial Court. First National Insurance 
Company of America v. Commonwealth, 376 Mass. 48 (1978); and 391 Mass. 
321 (1984). This action concerned a contracting officer's exercise of discre- 
tion in considering the surety's interest in administering periodic contract pay- 
ments to a financially troubled general contractor. 

Sixty-five (65) new actions were commenced during the fiscal year and sixty- 
eight (68) cases were closed. As of June 30. 1984. there were three hundred 
forty-nine (349) pending cases in the Division. 

B. Advice and Counsel to State Agencies 

On a daily basis, the Division receives requests for legal assistance from state 
agencies and officials. Problems involve formation of contracts, performance 
of contracts, bidding procedures, bid protests, contract interpretation, and 
numerous other miscellaneous matters. The most frequent requests received 
during the fiscal year were related to indemnification clauses in leases and 
arbitration provisions in construction contracts. 



16 PD. 12 

On a weekly basis, the Contracts Division also receives requests for assistance 
in purchasing matters. Economic conditions have heightened competition, and 
bid awards are often bitterly contested. Members of the Division counsel the 
Purchasing Agent and his staff, interpret regulations, and attend informal pro- 
test hearings. 

The Division also has an equivalent relationship with the Department of Public 
Works, Metropolitan District Commission, Secretary of Transporta- 
tion, Board of Regents of Higher Education, Data Processing Bureau, Depart- 
ment of Mental Health, Department of Youth Services, Environmental 
Management, Water Resources, State Lottery Commission, Department of 
Public Welfare, and the Division of Capital Planning and Operations. 

C. Contract Review 

The Division reviews all state contracts, leases, and bonds submitted by state 
agencies. All contracts are logged in and out, and a detailed status record is 
maintained. The average contract is approved within forty-eight (48) hours of 
its submission to the Division. 

During the fiscal year, the Division received 1 ,489 contracts for approval 
as to form. One hundred ninety (190) contracts were rejected and later approved 
after the deficiencies were corrected. 



EMINENT DOMAIN 

The major function of the Eminent Domain Division is the representation 
of the Commonwealth in the defense of petitions for the assessment of damages 
resulting from land acquisition by eminent domain. The Commonwealth 
acquires land for a variety of purposes, including rights of way for roads, land 
for state colleges, land for recreation and park purposes, land for flood con- 
trol and land for easements. The division deals primarily with the Department 
of Public Works, the Metropolitan District Commission, the Department of 
Environmental Affairs, State Colleges, the University of Massachusetts, the 
Armory Commission and the Department of Food and Agriculture. 

The Division also provides legal advice to the Real Estate Review Board to 
assist in settling damage claims on takings of government-owned land for 
highway purposes, and in some instances the Division is called upon to testify 
before land damage payments are approved. 

Informal advisory services, both written and oral are rendered to practical- 
ly every state agency. Agencies with eminent domain or real estate questions 
or problems either write or call the division for consultation and advise. The 
division also appears before Legislative Committees to give advice on legisla- 
tion of importance to the Department of the Attorney General as well as other 
state agencies. 

Chapter 79 of the General Laws prescribes the procedure in eminent domain 
proceedings. Under Chapter 79, when property is taken, the taking agency 
makes an offer of settlement known as a pro tanto, which makes available to 
the owners an amount the taking agency feels is fair and reasonable but reserves 
to the prior owners the right to proceed, through the courts, to recover more 



P.D. 12 17 

money. In the event of a finding by the court or jury, the pro tanto payment 
is subtracted from the verdict and the taking agency pays the balance, with 
interest from the date of the taking to the date of the judgment. 

If occupied buildings are situated on parcels acquired by eminent domain, 
the occupants remaining become tenants of the Commonwealth and are 
obligated to pay rent under a lease agreement or for use and occupancy. The 
problem of rent collection is handled by a Special Assistant Attorney General 
who is assigned to the Department of Public Works on a full-time basis. He 
is under the direct supervision of the Right of Way Bureau with review super- 
vision from the Eminent Domain Division. His primary function is to repre- 
sent the Department of Public Works in all matters related to state owned 
property being leased or rented to the general public. This includes negotiating 
settlements, closing out uncollectibles, suits to enforce the payment of rent, 
as well as eviction matters. In those cases wherein rent is owed to the Common- 
wealth and there is a land damage case pending, the Eminent Domain Division 
trial attorney assigned handles both matters at the time of trial. During the past 
fiscal year, 95 rent cases were closed out and approximately $71,000.00 
was collected and turned over to the State Treasurer. 

The Eminent Domain Division also has the responsibility of protecting the 
Commonwealth's interests in all petitions for registration of land filed in the 
Land Court. In each case, a determination must be made as to whether or not 
the Commonwealth, or any of its agencies or departments, has an interest which 
may be affected by the petition. If such a determination is made, no decree 
issues without the Division being given a full and complete opportunity to be 
heard. Some of these issues are tried to a conclusion while others are amicably 
agreed upon and the rights of the Commonwealth are protected by stipulation. 

Land Court matters involve the full-time activities of an Assistant Attorney 
General. Its jurisdiction covers every type of land transaction from foreclosure, 
tax takings to determination of title absolute and all the equity rights arising 
therefrom. 

The Eminent Domain Division is involved in almost every petition to con- 
firm or register title. The involvement requires the determination of all interests 
in state highways, the preservation of the taking lines, the determination of 
drainage and other easements and the assurance that the decree is entered sub- 
ject to all of the above. 

Further, the Land Court determines so-called "water rights". As indicated 
in the reports of past years, this is becoming a new problem area in that many 
rivers and streams have been cleaned and improved as a result of federally 
funded projects, bringing into question the Commonwealth's rights and 
responsibilities. Also, the tidal areas of the Commonwealth are creating con- 
tinual litigation, particularly where the Colonial Ordinances are concerned. 
Litigation is developing whereby the public is asserting possession and prescrip- 
tive rights in the flats of the tidelands and access to beaches. 

In addition, more claims are being made against the Insurance Fund and 
local probate courts are having an effect upon the land registration system as 
their decisions are causing an effect upon the land regulation cases. 

The land registration process continues to involve diverse issues. Many 
railroad rights of way appear in registration cases. Serious questions arise as 



18 P.D. 12 

to whether they have been abandoned and the effect upon the total railroad 
right of way . The Commonwealth, by way of the Secretary of Transportation, 
has acquired railroad rights of way to be used not only for railroad passenger 
service but for recreational purposes as well. The reversionary rights and the 
effects upon Commonwealth title are important issues. 

The Commonwealth has become involved with problems due to filling and 
dredging that have taken place along the shores and areas developed by beach 
associations, especially on the Cape and Islands. Dredging has been done with 
the material dredged being put upon the shores, changing private access rights 
to and from the beaches. 

All rental agreements, pro tanto releases, general releases, deeds of grants 
and conveyance, and documents relating to land under the control of any of 
the state's departments or agencies must be reviewed and approved as to form 
by the Eminent Domain Division. 

The Division continues to assist the Department of Food and Agriculture 
to expedite and to carry out the mandates of Chapter 780 of the Acts of 1977, 
known as the Agricultural Preservation Restriction Act. 

Fiscal 1985 promises another busy year for the Eminent Domain Division. 
The Massachusetts Department of Public Works, as well as the Metropolitan 
District Commission, predicts a heavy workload for Fiscal Year 1985. The 
Department of Environmental Management is still deeply committed and in- 
volved in the Heritage State Park Projects in Lowell, Lynn, Holyoke, North 
Andover and Lawrence. These ambitious undertakings are expected to cost 
in excess of 100 million dollars and can be expected to result in extensive litiga- 
tion for this Division. 



INDUSTRIAL ACCIDENT DIVISION 

The Industrial Accident Division serves as legal counsel to the Common- 
wealth in all workers' compensation cases involving state employees. Pursuant 
to G.L. c. 152, §69A, the Attorney General must approve all payments of com- 
pensation benefits and disbursements for related medical and hospital expenses 
in compensable cases. In contested cases the Division represents the Com- 
monwealth before the Industrial Accident Board and in appellate matters before 
the Superior Court and the Supreme Judicial Court. 

There were 13,069 First Reports of Injury filed during the last fiscal year 
for state employees with the Division of Industrial Accidents, a decrease of 
122 from the previous fiscal year. Of the lost time disability cases, the Division 
reviewed and approved 2,078 new claims for compensation and 1 75 claims for 
resumption of compensation. In addition, the Division worked on and disposed 
of 221 claims by way of lump sum agreements. 

The Division appeared for the Commonwealth on 1 ,308 formal assignments 
before the Industrial Accident Board and before the Courts on appellate 
matters. In addition to evaluating new cases, the Division continually reviews 
the accepted cases; that is, those which require weekly payments of compensa- 
tion, to bring them up to date medically and to determine present eligibility 
for compensation. 



P.D. 12 



19 



Total disbursements by the Commonwealth for state employees' industrial 
accident claims, including accepted cases, Board and Court decisions and lump 
sum settlements, for the period July 1 , 1983 to June 30, 1984 were as follows: 

General Appropriation 
(Appropriated to the Division of Industrial Accidents) 



Incapacity Compensation 
Medical Payments 

TOTAL DISBURSEMENTS 



$10,081,897.97 
$ 1,900.310.83 

$11,982,208.80 



Metropolitan District Commission 
(Appropriated to M.D.C.) 



Incapacity Compensation 
Medical Payments 

TOTAL DISBURSEMENTS 



$717,885.35 
$209,689.90 

$927,575.25 



The Industrial Accident Division also has the responsibility of defending 
the "Second Injury Fund" set up by Chapter 152, §65, against claims for 
reimbursement made under Chapter 152, §§37 and 37A. During the past fiscal 
year the Division appeared on 265 occasions to defend this fund against claims 
for reimbursement by private insurers. As of June 30, 1984, the financial 
status of this fund was: 







CASH 


SECURITIES 


7/1/83 


Brought Forward 


13,183.95 


247,000.00 


7/1/83 to 
6/30/84 


Receipts 


141,780.90 






Assessments 


771,085.00 






Add'l Securities 


500,000.00 






Interest of 
Securities 


22,239.47 








948,289.32 


747,000.00 


7/1/83 to 
6/30/84 


Payments 


None 






Sales and Maturity 
of Investments 


500,000.00 





7/1/84 



448,289.32 747,000.00 

Begining Cash & Securities $ 1 , 1 95 ,289. 32 



20 P.D. 12 

Pursuant to G.L. Chapter 33, App. §§13-11A, the Chief of the Industrial 
Accident Division represents the Attorney General as a sitting member on 
the Civil Defense Claims Board. This involves reviewing and acting upon 
claims for compensation to unpaid civil volunteers who were injured while 
in the course of their volunteer duties. 

The Division also represents the Industrial Accident Rehabilitation Board. 
When an insurer refuses to pay for rehabilitative training for an injured 
employee, the Division presents the case to the Industrial Accident Board 
on behalf of the Industrial Accident Rehabilitation Board. 

During the past fiscal year the attorneys of this Division were called upon 
numerous times to assist workers in private industry who contacted this Divi- 
sion regarding problems they were having with their compensation claims 
against private industry and their insurers. Every effort was made to assist these 
employees in resolving their difficulties or in referring them to appropriate 
persons or agencies. 



TORTS DIVISION 

The main activities of the Division continued unchanged from the previous 
year. The bulk of attorneys' time was focused on the defense of tort and civil 
rights suits brought against the commonwealth and its employees, though the 
investigation and preparation of reports for the district court on petitions for 
compensation to victims of violent crime also absorbed significant staff 
resources. 

The overall caseload of the division increased steadily over the year, contin- 
uing the growth spiral manifested in the previous two years. New cases totalled 
287 , while only 1 1 7 cases were terminated. Combined with the fiscal year 1 983 
increase, this resulted in over 455 additional pending cases, many of them in- 
volving potentially large damage awards against the commonwealth. Efforts 
to cope with the increase included greater use of the investigative staff and 
attorneys from other divisions in the Civil Bureau. Emphasis was also placed 
on finding a solution to the problem of the unavailability of funds for settle- 
ment of cases. 

Some of the more significant new cases included several suits involving 
employment discrimination or wrongful discharge, an increasing number of 
civil rights actions against the State Police, a growing number of negligence 
claims against court clerks for failure to keep up-to-date records, several suits 
against district attorneys challenging actions taken during investigations, a 
number of suits claiming injuries or death as a result of negligent placement 
of clients by the Departments of Youth Services and by the Department of Social 
Services, more new cases involving a failure to supervise and treat psychiatric 
patients in state hospitals, several suits challenging the release of dangerous 
patients from commonwealth facilities, and an increased number of cases in- 
volving alleged defects in highway planning and design. 

The division attorneys obtained mixed results, of course, from cases tried 
to conclusion during fiscal year 1984. One death action, resulting from a defect 
was tried against the Commonwealth to a jury. The trial judge agreed to report 
the case when the jury returned a judgment of $31,250 and he allowed the 
Commonwealth's Motion for Judgment Notwithstanding the Verdict. Verdicts 



P.D. 12 21 

for the Commonwealth were obtained in twelve cases, five cases were settled 
without trial, while dismissals or summary judgment were obtained against 
plaintiffs in 70 cases. 

There were 483 new petitions for compensation to victims of violent crime 
forwarded to the Torts Division for investigation and if necessary, litigation; 
a number which constituted a slight decrease from the previous year's filings. 
Roughly $1,01 1,000 was paid out by the district court during this period, for 
an average of $4,490 per claim. Court hearings were required in 68 of the peti- 
tions processed by civil bureau attorneys. Exactly 225 violent crimes cases were 
closed out by the division in the course of the year. 

The total amount of money collected on debts due to state agencies through 
the Torts Division in fiscal year 1984 was $147,056. 15; 86 claims were processed. 
Five new cases seeking damages for tortious injury to Commonwealth property 
were brought during the year. 

II. CRIMINAL BUREAU 

The Criminal Bureau of the Department of the Attorney General is com- 
posed of four Divisions: (1) the Trial Division; (2) the Appellate Division; (3) 
the Criminal Investigation Division; and (4) the Division of Employment 
Security. Several special units or task forces also operate within the Bureau: 
the Tax and Insurance Prosecution Task Force, the Government Integrity Unit, 
the Organized Crime Information Section, the Governor's Auto Theft Strike 
Force and the Governor's Statewide Drug Task Force, a unit recently organized 
to insure an exchange of data among drug law enforcement officials throughout 
the Commonwealth. 

During the 1984 fiscal year, the Bureau continued to prosecute a wide variety 
of cases developed by its own investigations division, as well as those referred 
by other government agencies or the offices of the district attorneys. The Bureau 
continued to concentrate its resources on certain classes of crime including white 
collar crime, government malfeasance and the disposal of hazardous waste. 



TRIAL DIVISION 

The following cases are a sampling of the kinds of criminal litigation in which 
the Criminal Bureau has been involved in pursuit of the goal of keeping the 
Commonwealth safe for all of its residents. 

M.B.T.A.— Thirty-four employees of the Massachusetts Bay Transporta- 
tion Authority were indicted and arraigned on charges of larceny. All of the 
"T" workers were involved in the surface line revenue collection process and 
are accused of larceny from three vault rooms and the central money room. 
The investigation of this matter included the use of sophisticated video 
surveillance equipment. 

CRIME IN GOVERNMENT— An attorney for the Department of Revenue 
was convicted of being involved in extensive business dealings with a delinquent 
taxpayer whose taxes the lawyer was charged with collecting, a violation of 
the Commonwealth's new conflict of interest statute. The attorney was 
sentenced to a one year jail term. 



22 P.D. 12 

A member of the Town Board of Health of a Plymouth County community 
was found guilty of soliciting a $10,000.00 bribe in return for guaranteeing 
favorable action by the health board on a matter regarding an entertainment 
firm's outdoor sanitary facility. This public official was apprehended after a 
"sting" set up by the Bureau's Investigations Division. 

A cashier for the Registry of Motor Vehicles was indicted for embezzling 
the money paid by registrants for sales tax on their vehicles. 

Restitution of $16,500.00 was ordered as part of sentence meted out to an 
employee of the state book store who was caught thieving from government 
coffers. 

The charge of embezzlement of $17,000.00 was directed against an assistant 
unit director of a mental health facility. After trial the defendant was sentenced 
to a two year jail term, with one year of the sentence suspended. 

HAZARDOUS WASTE— A four to five year term of imprisonment in 
Walpole State Prison was the sentence imposed on a Worcester County man 
who was convicted of disposing of hazardous waste in a manner which could 
endanger humans or the environment. The man's son was also convicted and 
received a jail term. 

Another man convicted of harzardous waste violations was sentenced to a 
jail term after violating the terms of his probation. He was the owner and presi- 
dent of a Dorchester disposal firm and had been convicted of various viola- 
tions of the State's Hazardous Waste Law. 

ARSON— Law enforcement officials from throughout the state attended 
a seminar on the legal aspects of an arson investigation, including developing 
evidence in anticipation of prosecution, sponsored and coordinated by the 
Criminal Bureau. 

A building superintendent was sentenced to a ten year term at MCI-Concord 
after pleading guilty to setting a blaze in an apartment building in Allston, leav- 
ing several tenants homeless. 

DRUGS— Following a high speed chase through the Sumner Tunnel, two 
men were arrested and subsequently indicted for possession of cocaine with 
intent to distribute after a large quantity of the drug was found in their late 
model auto. 

CONSUMER ERA UD— In cooperation with the Consumer Protection Divi- 
sion, a home improvement contractor who was convicted of violating the Com- 
monwealth's three day cancellation law was sentenced to three years in the House 
of Correction. The criminal action was initiated after the defendant's repeated 
disregard of the cancellation law. 

After a midnight transfer of real estate to avoid litigation filed by the Con- 
sumer Protection Division to protect tenants who had been forced to leave their 
apartments after a suspicious fire, the Criminal Bureau filed charges against 
the real estate firm for the fraudulent conveyance. The firm was found guilty 
and fined by the Cambridge District Court. 

INSURANCE ERA UD— A twenty-four year old insurance agent working 
at his first insurance job was indicted in a complicated fraud scheme involving 
policy upgrading or money market plans. 

WELFARE— Three former employees of the Department of Public Welfare 
were indicted and charged with larceny after it was discovered that they had 
stolen food stamp vouchers and general relief payments. 



P.D. 12 23 

A homeowner from Dorchester working at Brigham & Women's Hospital, 
a landlord from Dorchester employed by the Department of Public Welfare, 
an employee of the City of Boston who maintained a substantial bank account , 
a highly paid staff member at IBM, and a housing inspector from the Boston 
Housing Court were indicted for receiving welfare benefits while gainfully 
employed. 

TAX— The Tax Recovery Unit of the Criminal Bureau aggressively pursued 
delinquent or evasive taxpayers for failure to pay all forms of state taxes in- 
cluding meals taxes, income taxes and taxes withheld from wages. Forty-two 
intransigent persons and corporations were charged in the Superior Court and 
District Court with tax violations resulting in a net recovery to the Common- 
wealth of one and one quarter million dollars. 

OTHER —A counselor with the Department of Youth Services was convicted 
of statutory rape after proof was produced that he had had a sexual relation- 
ship with a minor who had escaped from a D. Y.S. facility. The defendant was 
sentenced to serve a two year jail term. 

A man was convicted in Somerville of unauthorized use of a credit card and 
was sentenced to a jail term. 

Several state checks which had been stolen from the Division of Employ- 
ment Security turned up in the possession of an Essex County man who was 
charged with forgery, larceny and receiving stolen property. He was convicted 
and sentenced to three to five years at Walpole State Prison. 



CRIMINAL INVESTIGATIONS DIVISION 

The Criminal Investigations Division is the investigative arm of the Criminal 
Bureau. It is headed by an Assistant Attorney General and staffed by civilian 
investigators and personnel, State Police, Boston Police and Metropolitan 
District Commission Police. During the fiscal year 1984, Boston and M.D.C. 
Police were added to the Division to further enhance the ongoing cooperative 
efforts with the individual District Attorneys' Offices, state agencies and state 
and local police in the investigation and prosecution of criminal matters. 

An example of the Division's successful cooperative efforts with law, enforce- 
ment agencies was an eight month investigation by the Department of the 
Attorney General and the Massachusetts Bay Transportation Authority of large 
scale thefts of hundreds of thousands of dollars in the M.B.T.A.'s Revenue 
Collection process. The investigation unmasked widespread institutional cor- 
ruption and resulted in the indictment of thirty-four employees of the M.B.T. A. 
The management of the M.B.T. A. provided complete and total cooperation 
and support throughout the investigation and demonstrated the successes that 
can be realized when law enforcement agencies work in a coordinated and 
cooperative effort. 

In addition to the exhaustive M.B.T. A. investigation, the Division made 
over sixty arrests during fiscal year 1984, for welfare fraud, tax violations, 
illegal hazardous waste disposal, political corruption, organized and white collar 
crime activities, controlled substances violations, and violations of the Common- 
wealth's Conflict of Interest statute. 

During fiscal year 1984, the Division added a new computer system which 
is utilized primarily to gather and store drug intelligence to augment the 



24 P.D. 12 

Governor's Drug Task Force which is coordinated by the Department of the 
Attorney General. The computer is further utilized in gathering information 
for use in the investigation of illegal hazardous waste matters. 

The Criminal Investigations Division continues in its capacity to supply 
photographic and technical expertise to other prosecutional units and 
to coordinate investigations with such agencies as the Inspector General's Office 
and the State Ethics Commission. 

The achievements reached in fiscal year 1984, coupled with the assistance 
of and countless referrals to other law enforcement agencies, demonstrates 
the unqualified success that a unified command within the Department of the 
Attorney General can have in coordinating and cooperating with other law 
enforcement agencies in the continuing investigations and prosecutions of 
criminal matters. 



CRIMINAL APPELLATE DIVISION 

The Criminal Appellate Division handled several significant cases in the 
United States Supreme Court during fiscal year 1984. Two cases, in which peti- 
tions for writ of certiorari had been granted at the end of fiscal 1983, were 
argued and won. In Justices of the Boston Municipal Court v. Lydon, the 
Supreme Court reversed the Circuit Court of Appeals and held that operation 
of the trial de novo system had not violated the defendant's constitutional right 
not to be placed twice in jeopardy. In Commonwealth v. Sheppard, the Supreme 
Court, in reversing the decision of the Supreme Judicial Court, recognized an 
objectively reasonable good faith exception to application of the Exclusionary 
Rule for Fourth Amendment violations. In a third case, Commonwealth v. 
Upton, the Supreme Court granted a petition and summarily reversed the 
Supreme Judicial Court, establishing a more flexible constitutional standard 
for determining probable cause for the issuance of a search warrant. The 
Supreme Court also granted a petition for writ of certiorari in Ponte v. Real, 
involving the constitutional requirements of prison disciplinary hearings. In 
addition, the office successfully opposed 19 petitions for review in the Supreme 
Court. 

The number of new cases opened in fiscal 1984 dropped to approximately 
200. The drop resulted from increasing the number of inmate suits referred 
to the Department of Correction, which during fiscal 1984 numbered approx- 
imately 1 10. Approximately 80 additional inmate suits filed in the state court 
were handled in this division. Monthly unified sessions of the Massachusetts 
Superior Court are now held at MCI-Walpole, resulting in speedy resolution 
of those prisoner cases. Approximately 287 cases are presently active in the 
Division, of which 1 10 involve suits against the Department of Correction. 
The majority of the cases involve civil litigation arising from underlying criminal 
convictions. 

Thirty-one new petitions for review of Sexually Dangerous Person status 
pursuant to C.123A were filed. Three unified trial sessions were held during 
fiscal 1984 to decide these petitions. 

Forty-five cases filed in the Federal District Court were handled by this Divi- 
sion: 30 petitions for writs of habeas corpus, and 1 5 civil rights actions or re- 
quests for declaratory or injunctive relief. 



P.D. 12 25 

Eighteen cases were argued in the Court of Appeals for the First Circuit. 
Five were argued in the Massachusetts Supreme Judicial Court and seven in 
the Appeals Court. 

The Appellate Division also processes the rendition of fugitives from justice. 
Demands from both law enforcement officials of the Commonwealth and 
Governors of other states are examined, and an opinion rendered on the legality 
of each demand. Two hundred and eleven such opinions were rendered in fiscal 
1984. 



EMPLOYMENT SECURITY DIVISION 

The purpose and intent of the Employment Security Division is to provide 
the director with whatever legal assistance and representation is necessary to 
enforce the Employment Security Law, otherwise known asG.L. C.151A. 

The Employment Security Law is highly complex and its language technical 
as well as legal. Under the law, employers with one or more employees be- 
come subject to c. 15 1 A, and are expected to comply with its provisions. The 
efficient and economical administration of the employment security program 
in Massachusetts depends in large measure on the cooperation and compliance 
of well-informed employers throughout the Commonwealth, for it is they who 
pay the entire costs of its operation. The employment security program also 
insures individuals who become unemployed, through no fault of their own, 
a weekly benefit check if they meet the requirements of the law on a claim filed 
with the Division of Employment Security. 

Whenever an employer fails to comply with the Employment Security law, 
does not file the necessary reports required by law or pay the taxes owed by 
law to the Division of Employment Security, civil proceedings are initiated 
by the Division's Legal Service and judgments are obtained from the court cover- 
ing damages and court costs. If the judgments are not satisfied, the matters 
are referred to the Employment Security Division for criminal prosecution. 

The Assistant Attorneys General make every effort to fully inform the 
employers of their rights and obligations under the law. As a result, a certain 
percentage of the matters are settled immediately thereby avoiding the expense 
of criminal prosecutions creating a savings to the Commonwealth and its 
taxpayers. 

During the fiscal year ending June 30, 1984, 1 ,803 employer tax cases were 
handled by this Division. As of July 1 , 1983, there were 1 ,598 cases on hand, 
205 additional cases were received during the fiscal year, and 35 cases were 
closed leaving a balance of 1,768 employer tax cases. 

Criminal complaints were brought in the Boston Municipal Court, charg- 
ing 192 individuals with 2,577 counts of nonpayment of taxes, totaling 
$3,692, 124.28 in monies owed the Commonwealth's agency by the delinquent 
employers. 

During the fiscal year ending June 30, 1984, $2,3 19,038.35 in overdue taxes 
were collected and deposited to the Massachusetts Unemployment Compen- 
sation Fund. 

Whenever individuals are found to be collecting unemployment benefits 
fraudulently on claims they have filed while gainfully employed and earning 
wages, the fraudulent matters are referred to the Employment Security Divi- 



26 P.D. 12 

sion for prosecution of the criminal offenses. Criminal complaints are brought 
only when the facts surrounding the offense have been investigated, reviewed 
with the individual involved and the criminal intent substantiated by the 
evidence obtained. 

Criminal complaints were brought in various courts of the Commonwealth 
having jurisdiction over the offenses involved, charging 72 individuals with 
1,208 counts of larceny totaling $122,138.00 in unemployment insurance 
benefits fraudulently collected from the Commonwealth's agency. 

The amount of $ 1 8 1 ,789.40 was collected from the fraudulent claimants dur- 
ing the fiscal year ending June 30, 1984 and has been restored to the Unemploy- 
ment Insurance Fund of the Massachusetts Division of Employment Security . 

Five of the Criminal actions involving CETA fraud, brought in years past, 
remain pending court disposition. Default warrants have issued and are out- 
standing after exhaustive searches have been made to locate the defendants. 
As a result of earlier prosecutions made on the CETA claims, the caseload dur- 
ing the fiscal year ending June 30, 1984 remained the same minimal cases 
presently pending court disposition. 

During the fiscal year ending June 30, 1984, there were 21 actions brought 
against or by the Director of the Massachusetts Division of Employment 
Security. 

There were 42 cases in the Supreme Judicial Court of the Commonwealth 
that were handled by the Employment Security Division during the fiscal year 
1984, 26 of which were argued before, and decided by the court. 



III. MEDICAID FRAUD CONTROL UNIT 

Fiscal year 1984 was the sixth operational year of the Massachusetts Medicaid 
Fraud Control Unit. Throughout its tenure the Unit has remained in the 
forefront of the growing national focus on health care provider fraud and the 
need to protect elderly nursing home residents from physical and financial 
abuse. 

In fact, the Unit's efforts not only predated the national focus but in many 
ways contributed to the 1978 Congressional mandate to create similar fraud 
units throughout the country. The Unit is the outgrowth of the Attorney 
General's Nursing Home Task force, created in 1977, and is responsible for 
the successful prosecution of nursing home owners and administrators . When 
Congress identified health care fraud as a national problem in 1978, it sought 
and received testimony relating to the Nursing Home Task Force's efforts in 
defining the problem and in fashioning a national approach. In August of 1978, 
the Massachusetts Medicaid Fraud Control Unit was among the first certified 
as a part of the new national effort. 

In its first five years the Massachusetts Medicaid Fraud Control Unit con- 
tinued the prosecution of institutional health care providers while broadening 
its scope to include ambulatory providers such as doctors, dentists, psychiatrists, 
laboratories, podiatrists, pharmacies, transportation companies and durable 
medical equipment suppliers. The Unit has also successfully prosecuted in- 
stances of physical abuse to patients in long term care facilities. During the 
first five years the Unit opened over 1 ,000 cases. Those cases resulted in 209 



P.D. 12 27 

prosecutions and 1 69 convictions . Many of those convictions resulted in signifi- 
cant jail sentences. In addition to those jail sentences, the Unit's prosecutorial 
successes resulted in the collection of $254,24 1 in fines and $ 1 ,923 ,278 in restitu- 
tion. Another $3,262,995 was identified for recovery through civil sanctions. 

In addition to many successful prosecutions, the Unit has also made signifi- 
cant contributions in the legislative area sponsoring both the Massachusetts 
Patient Abuse Act and the Massachusetts Medicaid False Claims Act. 
Massachusetts became one of the first states in the nation to enact patient abuse 
legislation. The act makes the abuse, mistreatment and neglect of residents 
of long-term care facilites a separate cognizable crime. Of equal importance, 
the act also mandates the immediate reporting of suspected instances of pa- 
tient abuse, mistreatment or neglect and provides criminal sanction for the 
failure to report. The False Claims Act, makes the intentional submission of 
any false bill by a provider of medicaid services a felony punishable by up to 
five years in jail and fine of $1 ,000. The act thereby obviates the need for each 
prosecution to focus on voluminous documentation and authentication of 
records. Of equal importance is the potential for a substantial fine providing 
a much needed alternative sanction to the $600 maximum fine provided under 
the Massachusetts larceny statute. 

The Unit's efforts continued in fiscal year 1984, when the Unit opened an 
additional 104 cases. In fiscal year 1984, the Unit initiated 62 prosecutions and 
obtained 41 convictions. 1 As a result of these convictions, defendants paid 
$98,150 in fines and $700,772 in restitution. The vast majority of Medicaid 
Fraud Control Unit prosecutions were initiated through the investigations of 
a special grand jury, specifically impaneled to investigate allegations of medicaid 
fraud. 

Among the more noteworthy prosecutions initiated through that grand jury 
during the past year are the following: 

With two successful prosecutions the Unit concluded an undercover opera- 
tion commenced two years ago aimed at detecting the practice of generic 
substitution by Medicaid providing pharmacies generic substitution involves 
filling a prescription with less expensive generic drugs, while billing Medicaid 
for the more expensive brand-name equivalents. The operation was a joint ven- 
ture with the Department of Public Welfare which provided Medicaid Fraud 
Control Unit investigators with Medicaid identification cards thereby enabl- 
ing them to pose as recipients to purchase prescription medicine. By compar- 
ing the drugs actually received by Unit investigators with the subsequent bill- 
ings received by the Department of Public Welfare, investigators were able 
to identify those pharmacies engaged in fraudulent practices. 

An investigation begun in 1983 was concluded with the conviction of a 
Newton pediatrician on charges of larceny and medicaid false claims. The con- 
viction was based on the doctor's fraudulent billing scheme that included 
upgrading service codes to detect longer and more expensive patient visits then 
actually occurred; billing for laboratory tests not performed and altering 
hospital records to facilitate double billing. The court ordered $200,000 in 



These figures include cases which were opened in prior years but concluded in 1984. 



28 P.D. 12 

restitution, which was paid, and sentenced the defendent to a 3-10 year Wal- 
pole Prison sentence. The sentence was suspended after the court took exten- 
sive testimony from the defendant's psychiatrist who testified that the defendant 
committed the crimes while suffering from severe depression syndrome for 
which he was currently being treated. The court did impose 2,000 hours of 
community service. 

A nursing home administrator was sentenced to 3-5 years in state prison on 
charges of trustee embezzlement and larceny. The administrator stole over 
twenty thousand dollars from nursing home patients by billing the patients 
for expensive clothing that was never received. Patients were also charged for 
comforters donated by a local church group. The defendant was aided in this 
scheme by another individual who subsequently pleaded guilty to conspiracy 
charges. The administrator was also convicted of selling Amway products to 
patients which would have been supplied by the nursing home at no cost for 
the sole purpose of benefiting the defendant's Amway distributorship. 

In one of the largest individually owned nursing home cases reported, the 
former owner of three such facilities and his son were convicted on seven larceny 
indictments and three violations of the Medicaid False Claims Act. The lar- 
ceny indictments charged thefts of $356,000. Upon conviction, the owner was 
sentenced to serve two years and three months at the Dedham House of Cor- 
rection. The court further ordered that the defendant be placed on probation 
for a period of five years. The conditions of probation were that the Depart- 
ment of Public Welfare must be paid $150,000 within 30 days, and $3,333 per 
month for five years starting September 1 for a total of $350,000 in restitu- 
tion. Prior to surrendering, the defendant paid the $150,000. The defendant's 
son pleaded guilty to a single larceny indictment and was sentenced to two years 
in the House of Correction. The convictions followed a 15 month grand jury 
investigation, during which the $350,000 larceny was uncovered and 
documented. In the course of the investigation, it was discovered that the own- 
er and his son had engaged twenty individuals to become no-show employees 
at the various nursing homes. As part of the scheme, the names of the twenty 
individuals, along with their "salaries, ' ' were carried on the nursing home books 
and filed with the Massachusetts Rate Setting Commission as an operating cost, 
thereby increasing the homes' per diem rates. In exchange for the use of their 
names and Social Security numbers, the no-shows were paid between $25 and 
$65 per week. The actual salary checks were retained by the owner himself 
who cashed the checks and retained the proceeds. The investigation documented 
2,532 checks cashed in that fashion, resulting in a net loss to the state of 
$210,000. 

The investigation also revealed that the remaining $140,000 was stolen by 
the inclusion of false vendor invoices in that amount in the nursing homes' 
filings with Rate Setting Commission. In some instances, these checks were 
cashed by the vendor and the amount returned to the owner, while in other 
instances, the owner simply endorsed and cashed the checks himself. In the 
course of the investigation, indictments were returned and convictions obtained 
against both a no-show employee and a vendor for testimonial perjury before 
the grand jury. 

During fiscal year 1984 the Unit also made an impact in securing jail sen- 
tences for those convicted of white collar crime. While jail sentences still do 



P.D. 12 29 

not predominate, courts have become increasingly more disposed to impose 
such sentences when appropriate. The Medicaid Fraud Control Unit, as the 
state's largest white collar crime prosecutorial authority, has played a signifi- 
cant role in calling to the courts' attention the propriety of sentencing white 
collar criminals. 

During 1984, the Unit continued its committment to the critical area of patient 
abuse. The Unit brought criminal charges of patient abuse or mistreatment 
against four employees of nursing homes during the reporting period, includ- 
ing the first criminal charges brought against a licensed nurse and the first criminal 
charges of "mistreatment" (harmful use of physical restraints), under the 
Massachusetts Patient Abuse, Mistreatment, and Neglect Act, G.L. c.lll, 
§72F-72L, and c.265, §38. Two defendants were found guilty; the nurse was 
fined and subjected to professional sanctions, and an aide was given a suspended 
sentence and probation. The mistreatment charge resulted in a not guilty find- 
ing after a three-day trial. The fourth case, abuse and indecent assault and 
battery, is awaiting trial. 

In addition to the four prosecutions the Unit referred four cases of non- 
criminal neglect to the Attorney General's Consumer Protection Division for 
civil proceedings under the Act. Also, the Unit completed criminal investiga- 
tions of 45 allegations of patient abuse, neglect or mistreatment which resulted 
in no criminal charges. (These investigations involved 39 allegations of patient 
abuse, 1 1 allegations of neglect, 3 of mistreatment and 1 of robbery.) For reasons 
of insufficient proof these cases could not be prosecuted; however, in many 
cases the employees involved were disciplined or regulatory action was taken 
against the nursing home. 



IV. EXECUTIVE BUREAU 

ELECTIONS DIVISION 

A. Campaign and Political Finance 

One of the primary functions of the Elections Division is to enforce com- 
pliance with the state's campaign finance law by candidates and political com- 
mittees. G.L. c.55. In fiscal year 1984 the Office of Campaign and Political 
Finance reported 97 individual candidates or treasurers who had failed to file 
the required financial disclosure reports. Through administrative action taken 
by the Division, compliance was obtained in 49 instances. The Division brought 
civil suit against 43 individuals; 28 of whom have since complied with the 
disclosure statute. Criminal actions were brought against five individuals who 
had each repeatedly violated the campaign finance disclosure statute. Of these, 
three admitted to sufficient facts, paid fines and filed the necessary reports. 
The other cases remain pending. 

In addition, city and town clerks throughout the Commonwealth reported 
124 local candidates or political committee treasurers who had not complied 
with the filing requirements. Compliance was obtained by administrative action 
in 94 instances. Thirty law suits were initiated and four individuals have subse- 
quently complied with the filing provisions. 



30 P.D. 12 

B. Lobbyists 

The Elections Division also enforces the state statute that requires legislative 
agents and their employers to file financial disclosure statements with the office 
of the State Secretary. G.L. c.3, §§43, 44, 47. In fiscal year 1984, 22 violations 
of these sections were reported by the Secretary. As a result of administrative 
action taken by the Elections Division, the required statements were filed by 
seven of these individuals. 



C. Jury Commissioner 

The Division also assisted the State Jury Commissioner in his efforts to have 
cities and towns submit lists of inhabitants in a timely manner so that the new 
jury selection system of "one day-one trial" could be efficiently implemented. 
Full compliance with the law was obtained without the need to resort to actual 
litigation. 

D. Litigation 

During fiscal year 1 984 the Election Division successfully brought an action 
against the Town of Winchester to require the town to hold a special election 
to fill the term of a town selectman who had died while in office. During the 
same year, the division was not successful in obtaining a court order to require 
the City of Worcester to conduct a voter registration session at a local public 
welfare office. 

One of the most significant achievements during fiscal year 1984 was ob- 
taining a judgment from the United States District Court from the District of 
Columbia removing several Massachusetts cities and towns from the 
preclearance requirements of the Federal Voting Rights Act. Those localities 
had to have all laws pertaining to voting and elections approved by the United 
States Attorney General because fewer than 50% of the adult population had 
actually voted in the 1968 presidential election. The Division was able to con- 
vince the Justice Department and the Court that the lack of voter participa- 
tion was not a result of discriminatory laws or procedures. 

E. Initiative and Referendum 

In August of 1983, 20 initiative petitions were filed proposing various laws 
to be submitted to the voters at the November 1984 general election. After ex- 
tensive review by the Elections Division ten were approved as appropriate for 
submission to the people. 

Two separate law suits challenging these decisions were initiated in the 
Supreme Judical Court of Suffolk County. They were immediately reserved 
and reported to the full court for decision. In the first suit, Lockhart v. Attorney 
General the decision to reject an initiative petition that totally rewrote the 
criminal sentencing laws of the Commonwealth and made numerous other 
substantive changes in the criminal laws was challenged. The petition was re- 
jected as not containing only subject which were related or mutually depen- 
dant and because it pertained to the power of courts. The petitioners, however, 



PD. 12 31 

failed to obtain the necessary signatures to place the question on the ballot. 
The court found the controversy had become moot and did not present a suitable 
occasion to offer a full opinion. 

The other law suit challenged the decision to reject an initiative petition revis- 
ing the rules under which the Massachusetts legislature operated. The Supreme 
Judicial Court upheld the rejection of the petition, finding that the initiative 
process is limited to the enactment of laws and does not extend to the adoption 
of rules. Paisner v. Attorney General. 



VETERANS DIVISION 

The Veterans Division serves primarily as an informational agency refer- 
ring private citizens to appropriate federal and state offices for assistance in 
veterans matters. The Division serves as litigation counsel to the Commissioner 
of Veterans Services and the Veterans Affairs Division of the Department of 
the Treasury. 

During fiscal year 1984 the Division successfully defended regulations of 
the Commissioner of Veterans Services requiring veterans to reimbui se benefits 
improperly obtained before qualifying for additional benefits. Allard v. Com- 
missioner of Veterans Services. 

V. PUBLIC PROTECTON BUREAU 

The Public Protection Bureau is the largest of the Bureaus in the Depan- 
ment of the Attorney General. Its work is carried out by seven Divisions: Anti- 
trust, Civil Rights, Consumer Protection, Environmental Protection, 
Insurance, Utilities and Public Charities, as well as a Complaint Section, an 
Investigative Section, and a Local Consumer Aid Fund coordinator. The Bureau 
brings affirmative litigation on behalf of the public, and represents the public 
in insurance and utility rate hearings. The Bureau also represents several state 
agencies and boards whose duties involve actions in the public interest. These 
include the Division of Environmental Quality Engineering, the Outdoor 
Advertising Board, the Pesticide Control Board, the Architectural Barriers 
Board, and the Office for Children. 

The work of the Bureau includes litigation support activities and training 
programs for staff attorneys. The litigation support work includes review of 
all new complaints prior to filing, discussion and approval of settlements, and 
review of draft briefs due in appellate courts. In addition, Bureau attorneys 
conduct moot courts prior to each attorney's argument in the Appeals Court, 
Supreme Judicial Court, or First Circuit Court of Appeals. During fiscal year 
1984, the Bureau ran three major training programs to improve the trial 
advocacy skills of the legal staff. In the fall of 1983, the Bureau, together with 
the Advocacy Training Institute, conducted a motion practice training pro- 
gram in which each participant argued four different motions (summary judg- 
ment, dismissal, preliminary injunction, and to compel discovery). Each 
attorney was videotaped and then evaluated by experienced attorneys from 
within the Department as well as private practice. In the winter months, a ser- 
ies of mock trials were conducted with the Bureau Chief sitting as trial judge. 



32 P.D. 12 

Each trial team was counselled by a senior staff attorney and an attorney from 
private practice, both of whom participated with the Bureau Chief in giving 
critique at the close of the trial. During the spring, a writing program was con- 
ducted for bureau attorneys. This included several lectures on writing skills 
as well as review of individual written work. 

The Bureau participates in the litigation of cases handled in the various divi- 
sions as well as conducting selected litigation. During fiscal year 1984, Bureau 
attorneys assisted the Consumer Protection Division in the Plymouth Memor- 
ial Park litigation, the Environmental Protection Division in the DeCotis liti- 
gation and in the Seabrook nuclear power station licensing hearing, the Antitrust 
Division in the CPJNC and Pepsi-Metro litigation, the Insurance Division with 
the Baldwin-United litigation, and the Public Charities Division in the Boston 
Athletic Association litigation. 

The Bureau also undertook a major new lawsuit in February of 1984, when 
a $7 . 5 million dollar claim was brought in the Johns-Manville bankruptcy pro- 
ceedings on behalf of 42 cities and towns in the Commonwealth of 
Massachusetts. This claim alleges that Manville sold defective water pipes to 
the named cities and towns and seeks recovery through the bankruptcy pro- 
ceedings for the costs of replacing the pipe. Late in fiscal year 1984, it was 
learned through participating in the Manville bankruptcy of a pending bar date 
by which all property damage claims against Manville would have to be filed. 
As the fiscal year ended, bureau attorneys were reviewing the question of whether 
the Commonwealth of Massachusetts would authorize the Attorney General 
to file a claim for asbestos cost removal expenses with respect to an estimated 
5,000 state buildings. 

The Bureau also coordinates litigation and legislative activity across Bureau 
lines. This included a joint effort with the Government Bureau to present anti- 
trust and healthcare perspectives in the brief filed for the Commonwealth in 
the First Circuit Court of Appeals in Kartell et al. v. Blue Shield of 
Massachusetts. The Bureau also worked closely with the Criminal Bureau in 
the successful criminal prosecution of George Ward for defrauding an elderly 
woman by excessive home improvement charges. The Bureau also worked with 
the Civil Bureau in preparing a comprehensive set of amendments to the Victims 
Compensation Act. 

Finally, the Bureau represents the Attorney General in several important 
public activities . In January, 1 984, the Chief of the Public Protection Bureau , 
was designated to chair the newly created Victim/Witness Assistance Board. 
As a result, bureau staff implemented this new statute by monitoring the collec- 
tions mechanism, interviewing and selecting an executive director, and arrang- 
ing for the Board's first budget. Late in fiscal year 1984, an executive director 
was selected and the first set of grants was made to District Attorneys' offices 
throughout the Commonwealth to support their victim services programs. The 
Bureau Chief also represented the Attorney General on the Governor's Anti- 
Crime Council and participated in a series of presentations reflecting various 
roles of the Department in the criminal justice system. These included a review 
with Civil Bureau staff of the victims compensation statute; a review with Civil 
Rights Division staff of civil rights enforcement activity, particularly in the 
area of racial violence; a review with victim/witness board members of their 
new work; and a review of the Bureau's work in the field of arson. 



P.D. 12 33 

Two substantive developments of particular significance to the Bureau are 
the creation of alternative dispute resolution mechanisms for consumer mat- 
ters and the growth of bankruptcy skills by bureau attorneys. In developing 
alternatives to consumer litigation, the Bureau has enthusiastically supported 
face-to-face mediation programs in selected local consumer groups, and media- 
tion services for major cases handled by Bureau staff. With respect to bankrupt- 
cy training, monthly training sessions were conducted in bankruptcy law for 
interested attorneys from all seven divisions. The Bureau has also retained a 
bankruptcy consultant so that attorneys have an additional resource when 
handling complex bankruptcy matters. 



COMPLAINT SECTION 

During fiscal year 1984, the Consumer Protection Divison's Complaint 
Section opened 5,759 cases, closed 3,3 16 cases and assigned 2,972 cases to Com- 
plaint Section personnel. 

The section recovered for consumers $369,844.56 in refunds, savings and 
the value of goods or services they would not have received but for the interven- 
tion of the Department. 

In addition, 4,456 written complaints were referred to other Massachusetts 
agencies, agencies of other states, federal agencies, to local consumer groups, 
or sent back to consumers for lack of jurisdiction or for other miscellaneous 
reasons. 

The Telephone Line Information Staff received a total of 1 1 8,686 calls dur- 
ing the past year. As a result of these calls, 1 5,893 citizens were sent Complaint/ 
Inquiry Forms, 21 ,000 were given information and 7 1 ,403 calls were referred 
to local consumer groups or other state or federal agencies. 

The staff also received 367 calls concerning civil rights issues. As a result 
of these calls, 185 citizens were sent Complaint/Inquiry Forms, and 182 citizens 
were given information relating to civil rights inquiries. 

Due to the nationwide FTC/GM Agreement, the Department embarked upon 
a system to identify all Massachusetts consumers who had filed complaints 
with this office prior to the agreement and who fell within the guidelines of 
the agreement. Consumers who had filed complaints either through this office 
to the FTC or directly to the FTC were contacted. A system was devised to 
prioritize phone calls and incoming mail so that arbitration kits could be sent 
directly to these consumers with the shortest delay possible. In addition, a con- 
tinuing tally of the number of kits actually sent was maintained. Since January 
13, 1984, 2,684 Arbitration Kits were sent to consumers. 

As of October 1 983 , the Local Consumer Groups went on-line on a new com- 
puter system. A training session was held to familiarize everyone involved to 
the workings of the system and a computer book was assembled containing 
all of the essential information. A feedback system was established to main- 
tain constant communication with the local groups so that computerization 
is as little of a burden as possible. 



34 P.D. 12 

INVESTIGATIVE SECTION 

The Investigative Section continued to upgrade the level of services provided 
through training and improved efficiency. 

To make use of the advanced data processing capabilities of the Department, 
the Section developed and now maintains a computerized case tracking system 
which is tailored to insure efficient day to day management of pending cases. 
Along with the comprehensive case filing system previously established, the 
Section now has a more accurate and clearly organized repository for all 
investigations performed. 

In cooperation with the Consumer Protection Division, the Section investi- 
gated home improvement frauds, landlord-tenant and condominium conver- 
sion problems, investment scams and deceptive practices by mortgage 
companies and health spas. Investigators continued to work closely with the 
Division of Standards and in one case a southeastern Massachusetts gasoline 
dealer was ordered to make restitution to consumers for deceptively charging 
per liter rather than per gallon prices. Near the end of the fiscal year, a major 
initiative to detect violations of the state's advertising regulations was under- 
taken with significant results expected in the immediate future. 

The Section continued its efforts in all areas of the automobile industry by 
investigating instances of odometer tampering, option packing on new cars 
and invoice pricing violations. Working in conjunction with attorneys in the 
Consumer Protection Division and personnel from the Registry of Motor 
Vehicles, investigators helped develop a system that identifies "spun" cars, 
promptly informs consumers of their right to return the auto to the seller and 
leads investigators to the unscrupulous dealers responsible for the odometer 
turnback. 

Working closely with attorneys from the Antitrust Division, investigators 
continued to monitor and respond to allegations that retailers and large on- 
the-premises collection companies were acting in violation of the state's newly 
enacted bottle redemption law. Emphasis was also placed on the identifica- 
tion and investigation of businesses engaging in resale price maintenance. This 
effort has resulted in the development of several cases currently being litigated 
by attorneys in that Division. 

The Investigative Section demonstrated its ability to complete a major task 
in limited time in the Silresim Chemical Corporation case brought by the 
Environmental Protection Division. Extensive corporate background checks 
of more than three hundred corporations were completed in less than two weeks. 
Additional investigative resources for asset checks, documents, and on-site 
reports were also done throughout the year in other cases litigated by this 
Division. 

In one example of professional training, five Section investigators and 
numerous local police officers attended a seminar presented by the Attorney 
General's Civil Rights Division in conjunction with the Massachusetts Criminal 
Justice Training Council. During the past year many investigations of alleged 
violations of civil rights were conducted and Section investigators worked in 
a variety of areas to enforce provisions of the Massachusetts Civil Rights Act. 



P.D. 12 35 

Investigators also developed a close working relationship with the City of Boston 
Civil Disorders Unit and in one instance helped reduce the tension in a 
Dorchester neighborhood through a coordinated effort. 

Along with the Division of Public Charities, investigators continued to 
monitor Las Vegas nights throughout the state. Section personnel also con- 
ducted a complex investigation and prepared affidavits and exhibits in the Com- 
monwealth v. M & M Publications Company, et al. , a contempt case filed in 
Suffolk Superior Court. In Bellotti v. O. S. C Corporation, etal. , investigators 
worked closely with Division attorneys in a trial seeking to enforce the statutes 
governing charitable fund raising by professional solicitors. With the refined 
investigative abilities and financial analysis techniques now offered by the 
Section, more emphasis will be placed on combating the problems of mis- 
application of charitable funds and fraudulent and deceptive practices by paid 
solicitors. 

On occasion, investigators were called upon to assist the Insurance and 
Utilities Division and to work on Bureau-wide projects. In one case involving 
intrastate long distance telephone calls, an investigator prepared affidavits and 
was called to testify at a DPU hearing. Investigators also worked with per- 
sonnel from forty-two municipalities in collecting extensive data regarding the 
purchase of alleged defective Johns-Manville vinyl lined asbestos cement water 
pipes. 

On numerous occasions Investigative Section personnel assisted the other 
Bureaus and Divisions within the Department. In conjunction with the 
Executive Bureau, financial investigators continued to act on referrals from 
the State Auditor and Executive Office of Human Services in combating fraud 
in the state's purchase of service system. Additionally, accounting assistance 
was provided to the Civil Bureau as requested. 

The addition of trained financial investigators has enabled the Section to 
assume duties previously performed by a separate accounting component 
within the Bureau. 



LOCAL CONSUMER AID FUND 

For the fiscal year 1984, the Massachusetts Legislature appropriated $3 12,700 
to provide regional consumer groups throughout the Commonwealth with 
supplemental funding for consumer complaint mediation. This funding is 
distributed through the Local Consumer Aid Fund which is administrated by 
the Public Protection Bureau. 

Through this program, 13,500 consumer complaints from approximately 
90% of the cities and towns in the Commonwealth are now handled at the local 
level. The resolution of complaints at the local level has proven beneficial to 
both consumers and business because complaints are handled quickly and in 
a workable manner between the merchants and citizens. Due to their familiarity 
with local merchants, the groups recognize patterns of unfair and deceptive 
practices at an early stage. This has resulted in an expedited curbing of these 
practices. 



36 P.D. 12 

The 1 984 appropriation was distributed among twenty-four agencies in the 
following manner: 

AMOUNT 
GRANT RECIPIENT AWARDED 

Agawam Consumer Advisory Commission $ 3,500 

Arlington Office of Consumer Affairs 8,000 

Berkshire County Consumer Advocates, Inc. 18,000 

Brockton Consumer Advisory Commission 10,000 

Cambridge Consumer Council 10,700 

Cape Cod Consumer's Assistance Council, Inc. 10,500 

Duxbury Consumer Advisors 1 ,500 

Fall River Consumer Service Office 10,000 

Greater Lawrence Community Action, Inc. 10,000 

Hampshire-Franklin Consumer Protection Agency 12,000 

Haverhill Community Action Commission 13,000 

Lowell Community Teamwork, Inc. 10,000 

Mass P.I.R.G. Education Fund 25,000 

Mayor's Office of Consumer Affairs and Licensing 21,500 
(Boston) 

Medford Consumer's Council 19,500 

Newton Department of Human Services 14,500 

North Shore Community Action Program, Inc. 16,200 

Quincy Consumer's Council 7,500 

Revere Consumer Affairs Office 17,000 

Somerville Multi-Service Center 7,000 

South Middlesex Consumer Protection Office 18,000 

South Shore Community Action Council 8,167 

Springfield Consumer Action Center 18,100 

Worcester County Consumer Rights Project 21,000 



P.D. 12 37 

In November 1983, the Public Protection Bureau inaugurated a new project 
designed to increase the use of dispute resolution techniques in consumer cases 
handled by the local consumer groups. An alternative dispute resolution coor- 
dinator was brought into the Bureau to work with local consumer group staff 
to develop a face-to-face mediation capacity which would augment the 
telephone and letter mediation/negotiation which the groups already provide 
to consumers throughout the state. 

A survey of the work of the local consumer groups earlier in 1 983 had shown 
that in the 3097o of cases which the groups did not resolve, referrals were often 
made to private attorneys and small claims court. The survey also found that 
more than 50% of the consumers referred to small claims court chose not to 
go to court, and those that did, encountered significant difficulties and delays. 
Face-to-face mediation conducted by trained community volunteers was pro- 
posed as an alternative for these consumers and others who might need the 
individualized approach which mediation meetings could provide. 

In the spring of 1984, the Department was awarded a $35,000 grant from 
the National Institute for Dispute Resolution in Washington, D.C. to fund 
face-to-face mediation projects in the local consumer groups in Worcester and 
Haverhill. A third group, the Somerville Multi-service Center, received a grant 
directly from the Permanent Charity Fund of Boston, to develop a face-to- 
face mediation project. The grant for this program was written cooperatively 
with the Alternative Dispute Resolution Coordinator, who also will provide 
staff and mediator training for the program. 

In addition to the development of the face-to-face mediation projects, the 
ADR coordinator conducted two 2 1 hour training programs for local consumer 
group staff in mediation skills in the spring of 1984. The ADR coordinator 
also serves as a resource to the local groups and other Public Protection Bureau 
staff for information about arbitration as a consumer dispute resolution 
mechanism and about mediation as a settlement technique in some appropriate 
cases within the Bureau. 



ANTITRUST DIVISION 

A. Introduction 

During fiscal 1984, the Antitrust Division continued vigorous enforcement 
of state and federal antitrust laws. The Division continues to place priority 
upon pursuing those violations which most directly impact upon the state, its 
cities, towns, schools, and consumers, namely bid rigging, price fixing and resale 
price maintenance. Additionally, the Division took a leadership role in oil over- 
charge litigation involving all states and over $2 billion. 

B. Litigation 

During fiscal 1984, the Antitrust Division had cases which were in various 
stages of litigation in both the federal and state court systems. 



38 P.D. 12 

1. Commonwealth of Massachusetts v. Rockwell Corp., et al. 
(Eastern District of Pennsylvania) 

The Commonwealth brought suit in fiscal 1980 on behalf of four municipally- 
owned gas works against three major manufacturers of gas meters in the United 
States, alleging that they have conspired to fix prices and rig bids on gas meters . 
This case has been settled for in excess of $ 1 5 million and the Commonwealth 
is presently awaiting a final resolution of the method by which the settlement 
monies will be distributed to determine how much will be recovered by four 
municipally-owned gas works. 

2. Commonwealth of Massachusetts v. Cuisinarts, Inc., et al. 
(District of Connecticut) 

The Commonwealth filed this case in fiscal 1981 against Cuisinarts, Inc., 
claiming that it had unlawfully engaged in a vertical price fixing agreement. 
Federated Department Stores was named as a party defendant several months 
after the filing of the complaint. This is a. parens patriae action filed by the 
Division on behalf of Massachusetts residents and seeking treble damages. In 
May of 1983, the Court granted preliminary approval of a proposed settle 
ment. The settlement provides that residents of Massachusetts who purchased 
a Cuisinarts Food Processor between January 1 , 1973 and December 31, 1981, 
will be able to purchase certain other Cuisinarts products at 50 6 of the sug- 
gested retail price. Final approval of the settlement was granted in fiscal 1984. 
In a related action, the United States Supreme Court dismissed the appeal from 
the Second Circuit Court of Appeal's decision affirming the District Court's 
refusal to release to the Commonwealth materials presented to, and testimony 
before, a Federal grand jury which returned an indictment against Cuisinarts, 
Inc. 

3. Commonwealth of Massachusetts v. Ashland-Warren, Inc., 
Erg Investments, Inc. , et al. 

(District of Massachusetts) 

In February, 1982, the Antitrust Division filed this case alleging that nine 
companies had engaged in bid rigging and price fixing in Massachusetts in con- 
nection with the sale of bituminous concrete and the paving of roads in and 
around Boston and its northern environs. The suit was brought on behalf of 
the state and municipalities injured by the alleged conspiracy and seeks recov- 
ery of treble damages. During fiscal 1984, the district court denied defendants' 
motion to dismiss the Commonwealth ' s unitary plaintiff claim and defendants ' 
motion to dismiss the claims for damages incurred more than four years prior 
to the filing of the action. These decisions will be extremely useful to the 
Commonwealth's future use of the plaintiff proceeding which avoids class 
action procedures, as well as a claim of fraudulent concealment. Addition- 
ally, during fiscal 1984, the Commonwealth settled the matter with four of 
the defendants, George Brox, Inc. , Keating Bros, Inc. , Ashland-Warren, Inc. 
and Tilcon Warren, Inc. The respective Settlement Agreements provided for 
entry of consent decrees prohibiting defendants from collusion in connection 
with public projects in the future and for payments by these defendants of a 
total of $532,000. 



P.D. 12 39 

4. Commonwealth of Massachusetts v. Ashland-Warren, Inc., 
Old Colony Crushed Stone Corp. , et al. 

(District of Massachusetts) 

In February 1982, the Antitrust Division filed this case alleging that four 
companies had engaged in bid rigging and price fixing in Massachusetts in con- 
nection with the sale of bituminous concrete and paving of roads in and around 
Boston and its southern environs. The suit was brought on behalf of the state 
and municipalities injured by the alleged conspiracy and seeks recovery of treble 
damages. The court has under advisement various motions to dismiss filed by 
defendants, which attack the action on issues of the statute of limitations and 
the right of the Commonwealth to represent political subdivisions without 
alleging a class action. In June, 1983, this action was partially settled as a result 
of agreement with one of the defendants, Old Colony Crushed Stone and Con- 
struction Company, Inc. Old Colony agreed to the payment of $240,000 in full 
settlement of its liability in the litigation. Furthermore, a Consent Decree 
was filed in Federal District Court prohibiting Old Colony from entering into 
agreement with any other road paving company to establish prices for 
bituminous concrete or road paving work, to allocate customers, or to rig bids . 
In fiscal 1984, the suit was also settled with Ashland-Warren, Inc. and 
Tilcon-Warren, Inc. 

5. Commonwealth v. MASS. CRInc, et al. 
(Suffolk Superior Court) 

In fiscal, 1983, the Antitrust Division charged MASS. CRInc. and 13 beer 
wholesalers with price fixing, boycotting, monopolization and violations of 
the Massachusetts bottle deposit law in a complaint filed in Suffolk Superior 
Court. 

The suit alleges that the beer wholesalers unlawfully agreed to increase the 
prices of beer and charge deposits for cardboard containers in which beer is 
sold, unlawfully agreed as to the handling charge which would be paid to 
retailers , and unlawfully agreed as to the time when deposits and handling fees 
would be returned to retailers. It also alleges that the defendants attempted 
to monopolize the bottle return industry by establishing MASS. CRInc. and 
that they have unlawfully refused to deal with other persons who sought to 
operate beverage container collection businesses. The complaint further declares 
that the defendants violated various provisions of the consumer protection act 
and the bottle deposit law by requiring retailers to deal with MASS. CRInc. 
and not otherwise accept empty cans and bottles. 

In addition to requesting preliminary injunctive relief, the complaint asks 
the Superior Court to award civil penalties and damages. 

In April, 1983, a preliminary injunction was granted against all defendants 
and defendants appealed to the Appeals Court. The trial judge entered a stay 
of his preliminary injunction pending the appeal. Thereafter, Defendant's 
Motion to Dismiss the claims under the Massachusetts Consumer Protection 
Act were denied. However, their motion to dismiss claims for consumer 
damages were granted. 

In fiscal 1984, the Supreme Judicial Court affirmed in part and reversed 
in part the granting of the preliminary injunction. Specifically, the Court ruled 



40 PD. 12 

that defendants probably had violated the Massachusetts Antitrust Act and 
the Bottle Deposit Law by imposing a comming penalty which reduced the 
handling fee guaranteed to dealers, charging a deposit for storage cartons, 
requiring dealers to comply with the recovery corporation's schedule for collec- 
tion of empty containers, and collaborating on the price to be charged for 
recycling receptacles provided to dealers. The Court affirmed in part and 
modified in part the injunction to enjoin the aforementioned practices. 

However, it further ruled that the formation of CRInc. and the CRInc. fee 
schedules were not per se antitrust violation but should be judged under the 
rule of reason. 

The Supreme Judicial Court's decision will be extremely useful to the Depart- 
ment in its enforcement of antitrust and other laws the purpose of which are 
to promote the public interest. The Court ruled that in seeking a preliminary 
injunction to enforce a statute, the Attorney General need only show the 
likelihood of a statutory violation and that entry of an injuction is in the public 
interest, rather than showing the traditional requirement of immediate 
irreparable harm. 

Finally, in fiscal 1984, in deciding certain motions in this case the Superior 
Court ruled that the regulations issued by the Department under G.L. c. 93 A 
were constitutionally valid in making any violation of a statute or regulation 
meant for the protection of the public's health, safety, or welfare an unfair 
and deceptive practice under the Massachusetts Consumer Protection Act. 

6. In re Stripper Well Exemption Litigation 
(District of Kansas) 

In April, 1983, the Division was granted leave to intervene in the Stripper 
Well Exemption litigation in the United States District Court for the District 
of Kansas. This suit seeks distribution to the Commonwealth of approximately 
40 million dollars. 

The Stripper Well Exemption litigation involves challenges to regulations 
issued by the United States Department of Energy with respect to low produc- 
tion oil wells, commonly called stripper wells, and the certification of crude 
oil from such wells for higher prices. The United States District Court for the 
District of Kansas issued a number of preliminary injunctions requiring the 
oil companies to deposit in escrow the difference between stripper and non- 
stripper well oil prices until the merits of the case are resolved. As of October 
31, 1982, the escrow account, including interest, contained in excess of one 
billion dollars. The issue presently pending before the District Court is how 
the money in escrow is to be distributed. 

During fiscal 1984, the District Court referred the matter to the Office of 
Hearings and Appeals ("OHA") of the Department of Energy. OHA was 
directed to conduct fact-finding to determine if the overcharges, and any injury 
resulting therefrom, could be precisely traced through the chain of distribu- 
tion, from oil producer to end user. The Massachusetts Attorney General's 
Office, through the Antitrust Division, took a leadership role in this matter 
during fiscal 1 984 with particular focus on preparation for the OHA hearings. 



P.D. 12 41 

7. U.S.A. v. Exxon Corp. 

(District Court for District of Columbia) 

The Division intervened in fiscal 1 984 in this action which also involves viola- 
tion of oil pricing regulations in effect during the 1970's. Exxon was ordered 
by the District Court to deposit approximately $1 billion. The District Court 
also ordered that the entire fund be distributed to the states on a pro rata basis 
for use in various energy related state programs and Exxon appealed. The Anti- 
trust Division assisted in the writing of the brief submitted to the Temporary 
Emergency Court of Appeals on behalf of forty-two states. Oral argument was 
held in May, 1984 but no decision has yet been rendered. Massachusetts' share 
of the escrow fund, if fully distributed to the states, is approximately $40 million. 

8. Commonwealth v. Cambridge-Lee Industries, Inc., et al. 
(Suffolk Superior Court) 

In fiscal 1984, the Antitrust Division filed this action alleging that Cambridge- 
Lee Industries, Inc., Cerro Copper Products Co. and Phelphs Dodge Industries, 
Inc. engaged in price fixing between 1975 and 1981 with respect to the sale of 
copper water tubing. The action seeks injunction relief, civil penalties and 
damages for the Commonwealth and its political subdivisions. 

9. Commonwealth v. Victor Scoppe, et al. 
(Middlesex Superior Court) 

This criminal action was transferred by the Middlesex District Attorneys 
Office to the Antitrust Division in April, 1983. The indictment charges the 
defendants, an inspector with the Medford Home Improvement Program and 
three contractors with larceny, conspiracy to commit larceny and conspiracy 
in unreasonable restraint of trade in violation of G.L. c.93. The charges stem 
from an alleged conspiracy to rig bids submitted to, and contracts awarded 
by, the Medford Home Improvement Project. One defendant, Scoppe was also 
charged with bribery. 

In December 1983, the three contractors, Ryan, Agostino and Taylor, and 
Scoppe plead guilty to a conspiracy in restraint of trade in violation of G.L. 
c.93. All were placed on probation for 1 year, Ryan was fined $500, Agostino 
and Taylor $2500 and Scoppe $4500. The indictment of Scoppe for bribery 
was filed without a finding. All other charges against all the defendants were 
dismissed. 

C. Additional Proceedings and Activities 

During fiscal 1984, the Antitrust Division was also actively involved in 
approximately twenty investigations of antitrust violations and received con- 
sent decrees or assurances of discontinuance in the following matters: 



42 P.D. 12 

1 . In the Matter of Northshore Retail Oil Dealers 

On February 27, 1984, the Division filed consent decrees in Suffolk Super- 
ior Court against three retail sellers of home heating oil in the Lynn/Swamp- 
scott area. The three companies were accused of entering into agreements to 
fix the price of home heating oil and to discontinue price advertising in local 
newspapers. 

The consent decree prohibits the Defendants from entering into or engag- 
ing in any agreement "to fix, control, maintain or stabilize the retail price or 
any other terms or conditions of the sale of home heating oil in Lynn, 
Massachusetts or contiguous cities and towns" or from communicating or 
exchanging price information with competitors. The Defendants also paid the 
Attorney General a total of $7,660 to cover the costs and expenses of the 
investigation. 

D. New England Bid Monitoring Project 

In the summer of 1978, the Commonwealth began a pilot program to deter- 
mine the feasibility of collecting and analyzing masses of bid data from 
municipalities in order to determine whether antitrust violations were occur- 
ring in the sale of certain specified products. As part of the project the An 
titrust Division collected bid data from over 100 towns and cities in 
Massachusetts and commenced development of computer programs for analy- 
sis of the data. 

During fiscal 1984, data collection continued to insure that the project 
remained current. Additionally, software was further improved to permit more 
efficient management of data collected and analysis of project bids in addi- 
tion to product bids. 



CIVIL RIGHTS AND LIBERTIES DIVISION 

A. Introduction 

The Civil Rights and Liberties Division concentrated on three priority areas 
during fiscal year 1984: racial and ethnic violence; housing; and health care. 
The priorities were selected based on their impact on the lives of people most 
in need, the availability of other agencies or private lawyers, and the effec- 
tiveness of legal strategies in addressing the problems. Several innovative 
lawsuits were filed to establish precedents clarifying the scope of certain legal 
rights. The Division also expanded its training and advisory efforts, particu- 
larly in the area of enforcement of the state Civil Rights Act. 

Highlights of the Division's work during fiscal year 1984 follow. 



P.D. 12 43 

B. Major Case Areas 

1. Racial and Ethnic Violence 

Litigation reflected the changing nature of the problem of racial violence: 
juvenile perpetrators and new classes of victims. The cases also highlight the 
capacity of the Division, working cooperatively with local law enforcement 
agencies, to respond quickly to problems by seeking injunctive relief. 

The case of Commonwealth v. S.K., et al., was the first civil action brought 
by the Attorney General against juveniles under the state Civil Rights Act. Three 
juveniles were alleged to have broken the windows on several occasions of the 
first black family to move to Lonsdale Street in Dorchester, and to have 
repeatedly intimidated the children. A preliminary injunction prohibiting any 
threats or damage to the family or other black residents of or visitors to 
Dorchester, and prohibiting the defendants from congregating in certain areas, 
was obtained, and was effective in putting an end to the harassment. 

In Commonwealth v. Hathaway, et al., an injunction was sought against 
thirteen defendants, including several juveniles. The complaint alleged that 
on the very first night a black Portugese family moved into their home on 
Leedsville Street, Dorchester, the defendants gathered and discussed how they 
would drive the blacks out of the neighborhood. Later that night, they smashed 
the windshield of a car belonging to one member of the family, assaulted him, 
and attempted to break into the house. Quick and effective investigation by 
the Community Disorders Unit of the Boston Police Department enabled the 
Division to get a restraining order within days of the incident. The court later 
issued a preliminary injunction, prohibiting the defendants from gathering in 
the area and from interfering with the family, or other blacks, in any way. Since 
the restraining order was obtained, there have been no further incidents. An 
appeal challenging the scope of the preliminary injunction issued by the Superior 
Court was pending in the Appeals Court at the end of the fiscal year. 

In Commonwealth v. Coderre, et ah, a preliminary injunction was issued 
against three defendants alleged to have physically assaulted and threatened 
Cambodian refugees living on the same street as the defendants in Revere. The 
injunction prohibited the defendants from interfering with people because of 
their Asian race or national origin, and from threatening or intimidating com- 
plainants or witnesses in any way. 

To expand the capacity of all parts of the legal system to deal with cases 
arising under the state Civil Rights Act or the newly enacted Racial and Ethnic 
Intimidation Act of 1 983 , the Division participated in a variety of training pro- 
grams: in a series of six workshops around the state for police and assistant 
district attorneys sponsored by the Criminal Justice Training Council; the 
Educational Conference of the District Court Clerk-Magistrates; programs 
organized by the Hampshire, Plymouth, Norfolk and Middlesex District 
Attorneys; Metropolitan Police Academy training for patrol officers and super- 
visors; and programs sponsored by the private bar. The Division also worked 
as part of the Governor's Anti-crime Council to develop a model policy on 
civil rights cases for local police. Finally, the Division consulted with and assisted 
local law enforcement agencies in several cases handled at the local level. 



44 P.D. 12 

2. Health Care 

The Division pursued several approaches to improve access to health care. 
First, enforcement continued of the requirement of the federal Hill-Burton 
Act that hospitals which received Hill-Burton funds provide a reasonable 
amount of free care to persons unable to pay. Settlements were reached with 
two hospitals which will provide approximately $300,000 in additional free 
care. About %VA million has been obtained since the project began. 

Second, the Division addressed the problems experienced by Medicaid 
patients in several parts of the state when all of the doctors in a particular 
speciality withdrew from the Medicaid program. The Division took action to 
enforce the "community services" obligation under the Hill-Burton Act, which 
requires that hospitals insure that all medical services are available to Medicaid 
patients, notwithstanding the doctors' withdrawal from the Medicaid program. 

The Division filed a formal administrative complaint against The Jordan 
Hospital, Plymouth, with the federal Department of Health and Human 
Services. The complaint alleged that the hospital failed to insure that obstetrical 
and gynecological services were available to all women in the hospital's 
geographical service area. The settlement reached was the first formal 
administrative settlement of its kind in the country. Under the agreement, the 
hospital agreed to create a clinic open to all women in the service area which 
will provide gynecological and obstetrical services and comprehensive prenatal 
care. 

Agreements were negotiated with other hospitals to insure the availability 
of services to Medicaid patients. The Cape Cod Hospital agreed to establish 
a referral system for obstetrical cases, and agreed that the one group of 
anesthesiologists which practiced at the hospital would treat all Medicaid 
patients free of charge. The anesthesiologists also agreed to refund all payments 
made by Medicaid patients. The Hunt Memorial Hospital, Danvers, agreed 
to operate an OB-GYN clinic for Medicaid recipients three days a week. 

Third, the Division worked to eliminate a variety of barriers faced by non- 
English speaking residents. For example, as the result of an investigation by 
the Division, the Brighton-Marine Public Health Center took significant steps 
to increase the accessibility of its services to the Southeast Asian communities 
of Boston. The health center has increased the availability of translators, posted 
notices of patient rights in Vietnamese, Cambodian, and Laotian and notifies 
patients that they can continue to receive services even after their refugee 
Medicaid funding has lapsed by making arrangements with the credit office. 
To facilitate monitoring of the extent to which hospitals are serving the needs 
of the communities in which they are located , the Division supported a proposal 
which the Rate Setting Commission adopted, requiring hospitals to report on 
the racial and ethnic mix of the patients they serve. 

3. Housing 

A case of first impression for discrimination against recipients of housing 
subsidies and suits challenging racially discriminatory practices by suburban 
realtors highlighted the Division's work in the area of housing during fiscal 
year 1984. 



P.D. 12 45 

In the case of Bellotti v. Harold Brown, the Division filed the first court 
challenge to a widespread practice by landlords of refusing to rent to participants 
in the Section 8 rental housing assistance program. The suit, filed in Boston 
Housing Court, charged Harold Brown, one of the largest landlords in Boston, 
with such discrimination, in violation of a Massachusetts statute prohibiting 
discrimination against recipients of governmental rental assistance. Brown was 
also charged with race discrimination because of the disparate impact of his 
practices on minorities. 

Division staff coordinated a program of "testing" suburban realtors for race 
discrimination, sending pairs of Public Protection Bureau investigators, 
matched for all characteristics except race, to various agencies to request similar 
housing. Following a series of "tests," charges of discrimination were brought 
against a Watertown realtor in the case of Commonwealth v. Dale Haroutunian 
d/b/aMt. Auburn Realty, and against a Waltham agency in Commonwealth 
v. Daniel McAuliffe d/b/a The Apartment Quest. By the end of fiscal year 
1 984, the action against McAuliffe had been settled by the entry of a consent 
judgment, ordering McAuliffe to refrain from discrimination, take a variety 
of measures to insure that discrimination did not reoccur, advertise in minori- 
ty newspapers, and pay $1,500 to the Commonwealth. The case against 
Haroutunian was still pending. 

In Bellotti v. Nocito, et ai, the Division alleged that the owners and managers 
of an East Boston rental property discriminated against a group of tenants 
by refusing to permit them to move back into their apartments after a fire 
because they were Vietnamese. The suit also alleged that the defendants violated 
several laws protecting tenants' rights. The owners eventually agreed to the 
entry of judgment ordering a range of provisions designed to prevent discrimina- 
tion in the future, and full restitution of security deposits and rent balances. 

Monitoring compliance with judgments obtained in prior years is another 
important component of the Division's fair housing enforcement effort. A 
review of records submitted to the Division pursuant to a judgment obtained 
against New Boston Realty, Inc. during fiscal year 1983 indicated that the defen- 
dant might be violating the law prohibiting discrimination against families with 
children. The defendant agreed to change its rental practices. 

A settlement was reached in the case of Faverman v. Cambridge Housing 
Authority, in which the Division had intervened on behalf of the Executive 
Office of Communities and Development. The condominium association which 
had brought the suit to prevent the Cambridge Housing Authority from pur- 
chasing a condo unit to be rented to a low income family agreed to rescind 
an amendment to the condominium master deed which would have blocked 
such a use. The condominium association also agreed that it would not pre- 
vent or hinder the housing authority in its use of the unit in any other way. 
As a result of the suit, the Commonwealth's scattered site public housing pro- 
gram will be able to utilize condominium units. 

The Division was successful in having the Leominster Housing Authority 
rescind its policy of refusing to rent certain family units to female-headed 
households. The Authority had adopted the policy on the ground that women 
would be unable to perform the necessary maintenance. 



46 P.D. 12 

A different type of housing for some of the Commonwealth's poorest 
residents was involved in the case of Commonwealth v. Gulliver. A complaint 
for civil contempt was filed in Middlesex Superior Court against an orchard 
owner for operating a farm labor camp without a Certificate of Occupancy 
from the Department of Public Health. A permanent injunction obtained in 
1 98 1 had prohibited the operation of the camp without a certificate. A finding 
of contempt was entered, and fines of $250/day for any further violations were 
imposed. 

4. Education 

The Division was involved in a number of cases designed to insure that all 
children receive an appropriate education. 

Several actions begun in fiscal year 1983 to obtain compliance with the 
Department of Education's assignment of responsibility for the special educa- 
tion of children were concluded. In Board of Education v. School Committee 
ofAmesbury, the Massachusetts Appeals Court ruled that the Department of 
Education acted arbitrarily when it assigned responsibility for paying for an 
institutionalized child's special education to the town in which the parents last 
resided, but only briefly, before moving out of state. The court stated that the 
Department of Education must develop guidelines for making such assignments 
in consultation with state and local agencies. The impact of the case should 
be limited since the Department developed guidelines while the case was 
pending. 

Responsibility for providing educational services to the residents of group 
homes was clarified in Board of Education v. North Andover School Com- 
mittee, et al. Ruling on cross motions for summary judgment, the Superior 
Court ruled that the responsibility for designing and paying for the child's educa- 
tional program rested with the town where the parents last resided, rather than 
the town where the group home was located. The Superior Court also ruled 
that the Commonwealth fulfilled its responsibility under the Federal Educa- 
tion for All Handicapped Children Act by enforcing state laws requiring school 
committees to provide special education. 

The Rockland School Committee agreed, prior to the filing of the suit, to 
allow children living in foster homes in the town to attend the public schools. 

In Braintree Baptist Temple, et. al. v. Holbrook Public Schools, et. al., a 
suit brought in Federal District Court by Fundamentalist Christian Churches 
challenging the constitutionality of the state's compulsory school laws , the Divi- 
sion represented the state education defendants. A motion to dismiss the state 
education defendants was argued, but not decided, by the end of the year. 

5. Employment 

A suit alleging employment discrimination on the basis of national origin, 
Bellotti v. Eastern Cleaning Contractors, Inc., et al., was filed in Superior 
Court. The complaint charged that after one Hispanic had a dispute with his 
supervisor, all of the other Hispanics on the crew were fired, even though they 
were not involved in the dispute. The Division is seeking injunctive relief, back 
pay, and reinstatement. 



P.D. 12 47 

In Bellotti v. Drake Petroleum Company andKenyon Oil Company, a con- 
sent judgment was obtained which prohibits the companies from asking ques- 
tions prohibited by state anti-discrimination laws, consumer credit laws, and 
laws pertaining to criminal records. Also in the area of employee privacy, several 
employers agreed to stop administrating lie detector tests, after being informed 
of the illegality of the practice. 

6. Insurance 

Jointly with the Insurance Division, the Civil Rights Division presented 
testimony to the Insurance Commission about the legal and policy issues raised 
by the exclusion of maternity benefits from otherwise comprehensive individual 
health care policies. Although federal and state laws concerning employment 
discrimination prohibit employers from offering individual policies that ex- 
clude maternity benefits, these laws do not regulate policies sold directly to 
consumers. Thus, women who do not have health insurance at work are usual- 
ly required to purchase much more expensive family plan coverage in order 
to be eligible for maternity benefits. 

The two Divisions also supported comprehensive state legislation to pro- 
hibit discrimination on the basis of sex and marital status in all forms of 
insurance. The state bill, like its federal counterpart, encountered forceful 
opposition from the insurance industry and failed to pass during fiscal year 1984. 

7. Voting 

A preliminary injunction was obtained requiring the owners and managers 
of Copley Place to permit access by individuals seeking to collect signatures 
on nominating papers, pursuant to our counterclaim in the case of UIDC of 
Massachusetts, Inc. v. Attorney General and Secretary of State. Copley Place, 
a development in downtown Boston including hotels, apartments, offices, and 
a retail shopping center, contends that the decision of the Supreme Judicial 
Court in Batchelder v. Allied Stores International, Inc., which held that the 
North Shore Shopping Center must permit people gathering signatures on 
nominating papers access to the center, did not apply to it because of its urban 
setting. 

Most suburban shopping centers did allow some access by people gathering 
signatures after Batchelder. However, several complaints arose concerning the 
conditions imposed on such access, which were resolved by the Division work- 
ing in cooperation with the Elections Division of the Secretary of State's of- 
fice. The Division also resolved complaints concerning refusals by municipal 
officials to permit demonstrations or leafletting in public areas. 

The Division was successful in having the town clerk of Milton agree to fur- 
nish copies of voting lists, which are public records. The clerk had originally 
refused claiming that it was not his job to help people in their political 
campaigns. 

8. Institutional Conditions 

Working with the Department of Mental Health, the Division reviewed the 
use of seclusion at a treatment facility for children. By law, restraint, including 



48 P.D. 12 

seclusion, may only be used in cases of emergency. Following discussions with 
the Division, the Department of Mental Health issued a clarification of its policy 
on seclusion, to insure that all forms of effective seclusion, not just confine- 
ment in a locked room, are considered seclusion for purposes of the statute. 

The Division also assisted the Department of Mental Health and the Mental 
Health Legal Advisers in developing guidelines for the probate courts, and train- 
ing programs for lawyers, to insure compliance with the decision in Rogers 
v. Commissioner of Mental Health, 390 Mass. 489. The Rogers case estab- 
lished the right of competent persons to refuse antipsychotic medication, and 
the right of incompetent persons to have the question of whether such medica- 
tion should be administered determined under a substituted judgment standard 
by a probate court. 

Comments were presented to the Department of Youth Services on proposed 
regulations concerning secure facilities. The comments addressed the use of 
room confinement and mechanical restraints, and access to client records. 

9. Architectural Barriers 

The Division obtained compliance with several orders of the Architectural 
Barriers Board, requiring facilities to make modifications so that they would 
be accessible to the handicapped, and worked with the Board in negotiating 
with Massport to institute a wheelchair van shuttle service around Logan air- 
port and with the M.B.T.A. to insure that the Red Line would be accessible 
to handicapped persons during construction. The Division also advised the 
Board on a variety of legal matters, including the development of new pro- 
cedural regulations. 

10. Public Records /Open Meeting Law 

Disclosure of information about the products handled at a hazardous waste 
treatment facility is the issue in General Chemical v. Commissioner of the 
Department of Environmental Quality Engineering. The Division is defending 
the Commissioner of Department of Environmental Quality Engineering, who 
was sued to enjoin him from disclosing such information, which he had deter- 
mined did not constitute trade secrets. A judge of the Superior Court dismissed 
the complaint of General Chemical; however, a justice of the Appeals Court 
enjoined the disclosure to permit General Chemical to take an appeal. The ap- 
peal was argued, but not decided, by the end of the fiscal year. 

In Pottle v. Braintree School Committee and Supervisor of Public Records, 
the Division represents the Supervisor, who had ruled that the names, addresses, 
and job classifications of public school employees were public records. Not- 
withstanding an interlocutory decision of a single justice of the Appeals Court 
that the addresses were public records, a Superior Court judge ruled that 
disclosure would violate the employees' right of privacy. The appeal is pending. 

A settlement was reached with the last of 28 police departments sued in Bellotti 
v. Chief of Police of Amesbury, etal., for violating the public records regula- 
tions by charging excessive amounts for copies or refusing to provide copies 
by mail. 

Activity concerning the Open Meeting Law was in areas other than litiga- 
tion during the fiscal year. Several complaints about violations of the Open 



P.D. 12 49 

Meeting Law were resolved prior to suit. A lawyer from the Division discussed 
the Open Meeting Law at a training program on municipal law sponsored by 
the Massachusetts Continuing Legal Education Program, and provided addi- 
tional materials and information about the law to the offices of the District 
Attorneys, which share responsibility for Open Meeting Law enforcement. 

1 1 . Community Relations /Citizen Complaints 

Maintaining contact with individuals and groups, and promoting the public's 
awareness of their rights, is vital to the work of the Division. Division staff 
participate in meetings throughout the state ranging from small neighborhood 
gatherings to state-wide conferences, and on issues including racial violence, 
refugee affairs, minority employment, discrimination against handicapped 
people, fair housing, and the state Equal Rights Amendment. The Division 
works closely with other civil rights organizations and agencies, both on an 
ad hoc basis and as a member of the Greater Boston Civil Rights Coalition. 

During the course of the year, the Division handled almost 600 individual 
complaints, most of them received by mail. The majority of the complaints 
were referred to other state and federal agencies or the private bar, but several 
led to investigation and action by the Division. 



CONSUMER PROTECTION DIVISION 

I. Introduction 

During fiscal year 1984, the Consumer Protection Division addressed illegal 
business practices which injured Massachusetts citizens and acted as a national 
advocate ofconsumer issues. At the same time, the Division gave new priority 
to the problems of vulnerable consumers, especially low-income persons and 
the elderly. 

A. Enforcement Actions Involving Major Offenders 

The Division, in fiscal 1984, placed special emphasis on illegal practices by 
major corporations, in recognition of the widespread harm caused by such 
activities. In these cases, the Division was often required to present new legal 
theories and to represent the claims of thousands of individual consumers. 

For example, an action was brought against the Poly gly coat Corporation, 
a national seller of rustproofing and paint sealant for new cars, which had filed 
for bankruptcy reorganization but continued to offer multi-year product 
warranties to the public. Concerned that the warranties would not be honored, 
the Division applied for state court orders to compel Polyglycoat either to 
disclose its troubled financial situation or to obtain special insurance to back 
up its guarantees. In doing so, the limits of the exemption for state "police 
power" actions under the U.S. Bankruptcy Code were tested. Under a 
preliminary injunction entered in December, 1983, Polyglycoat has taken out 
special insurance and has changed its claims procedure to protect its thousands 
of customers. 



50 P.D. 12 

In the case of Commonwealth v. Woman's World Health Spas of America, 
Inc. the Division sued one of the largest health spa franchisors in Massachusetts, 
alleging that it was using deceptive advertising and high pressure sales tactics, 
and had unfairly refused to make refunds for unexpired memberships after 
several of its franchised spas suddenly went out of business. An injunction 
was entered in that case which bars future illegal practices; litigation continues 
over the claim that the franchisor corporation should be held responsible for 
honoring refund claims against its insolvent franchisees. 

In fiscal year 1984, one case was settled and later a second action was filed 
against Puritan Furniture Corp, New England's largest independent furniture 
retailer. The first judgment against Puritan, entered in August 1983, barred 
the company from a variety of improper practices in furniture sales, warranties, 
and service. In early 1984, after being advised that Puritan was in serious 
financial difficulty, the creation of a special trust fund to protect thousands 
of customer deposits from creditor claims in the event of bankruptcy was 
negotiated; this is the first known use of such a strategy in a state consumer 
protection action. Although Puritan did later go into bankruptcy, the negotia- 
tions, the trust fund, and the later lawsuit assured that Puritan repaid some 
$750,000 in existing consumer deposits and insulated a further $410,000 in new 
deposits from seizure by business creditors. At the close of the fiscal year, 
repayments to consumers out of the trust fund were in progress. 

B. National Consumer Advocacy 

In 1983, the Federal Trade Commission settled national litigation with the 
General Motors Corp. over defective transmissions, camshafts and diesel 
engines in GM cars. Massachusetts and many other states had objected to the 
settlement because it established no finding that the components at issue were 
defective or any standard for judging their performance, and required every 
GM customer to settle or arbitrate his case individually against company 
representatives. The Consumer Division believed that this process would put 
thousands of GM owners at an unfair disadvantage. In response, special briefs 
were prepared containing facts and law concerning the defects, which consumers 
could present in arbitration. The Attorney General's briefs were sent to more 
than 2,700 residents of Massachusetts who requested them. The briefs were 
later adopted as a model by other state attorneys general and over 50,000 copies 
were distributed across the United States. The GM campaign thus became the 
largest effort ever undertaken by state attorneys general to provide advocacy 
assistance to individual consumers. Preliminary surveys of Massachusetts 
recipients show that more than 75% of the GM owners who have completed 
the process succeeded in recovering all of their repair costs. 

In 1984, the Division also continued to coordinate advocacy by state attorneys 
general on behalf of a proposed national Credit Practices Rule, which would 
ban several egregious creditor practices. The Rule was formally adopted by 
the Federal Trade Commission on March 1, 1984. The industry immediately 
challenged the Rule in the United States Court of Appeals; the Division will 
participate in that litigation. 

In October, 1983, over strong dissents, a majority of the FTC adopted an 
interpretation of the law of deception which would significantly raise the burden 



P.D. 12 51 

which consumers must meet to prove that a practice is deceptive under federal 
law and, arguably, under the Massachusetts Consumer Protection Act. The 
National Association of Attorneys General adopted a resolution, sponsored 
by Massachusetts, rejecting the Commission's policy. In February, 1984, the 
FTC issued a letter of "clarification" to the attorneys general which disavowed 
several of the most troubling implications of the new policy. 

C. Vulnerable Consumers 

The Division decided during the past fiscal year to give a special priority 
to the problems of elderly and low income consumers. The decision grew out 
of a belief that these groups are more often the victims of illegal business prac- 
tices, have less ability to absorb a loss, and find it especially difficult to obtain 
compensation without assistance or to file complaints with the Consumer Divi- 
sion. To implement this priority, the Division lessened certain of the criteria 
required to initiate legal action on behalf of elderly and low-income consumers. 

One example of this effort was Commonwealth v. Ward, a criminal prose- 
cution brought against a home repair contractor who used high-pressure sales 
tactics to impose extraordinary overcharges for minor home repah s on elderly 
consumers. Ward was indicted for victimizing a Cambridge widow; he was 
convicted by a j ury and sentenced to three years in j ail — the most severe penalty 
the Division has ever obtained in a consumer protection case. 

Other cases on behalf of the elderly include litigation to protect residents 
of nursing homes, described below, and Commonwealth v. Plymouth County 
Memorial Park, Inc. In the latter case, the Division sued the owners of a 
cemetery for failing to provide grave markers and other services which it had 
sold to large numbers of consumers. The cemetery's failure to perform caused 
serious harm to many elderly consumers, who were unable to find the graves 
of loved ones. After intensive litigation, including a successful contempt prose- 
cution, the Division reached a settlement which provided for the sale of the 
cemetery to a responsible owner, the creation of a special fund to provide the 
promised services, the funding of a consumer aid group in Plymouth, and other 
relief. 

The Division also took special steps to protect low-income consumers in fiscal 
1984. For example, in a number of related cases, including Harrington v. 
Belchertown and Chelmsford Trailer Park, Inc. v. Chelmsford, we defended 
the constitutionality of trailer park rent control statutes which had been enacted 
because of the unusual vulnerability of mobile home residents to manipulative 
landlord practices. At the close of the fiscal year, the issue was pending before 
the Supreme Judicial Court. In Commonwealth v. Frederic Rust, III, a major 
Boston landlord was sued to enforce the state's new condominium conversion 
statute, which protects tenants dislocated by condominium conversion 
activities. A judgment was entered in the Rust case which reimbursed victims 
in that case and enjoined future violations in any of the defendants' properties. 
Finally, recognizing that low income consumers are the primary purchasers 
of used cars, we have intensified litigation efforts against odometer spinning 
and deceptive used car sales practices, as described below. 

Through these priority activities, the Division continued its role as a national 
leader in consumer protection while extending new assistance to the most 
vulnerable residents of the Commonwealth. 



52 P.D. 12 

D. Statistics 

During the 1984 fiscal year, the Consumer Protection Division maintained 
an active litigation caseload of 144 lawsuits. The Division obtained 25 
preliminary injunctions, 53 final judgments, and 5 assurances of discon- 
tinuance. The Division also initiated 4 contempt of court proceedings and 
obtained 3 criminal convictions. Finally, the Division obtained approximate- 
ly $638,800 in judgments and settlements, which were distributed as restitu- 
tion for Massachusetts consumers and an additional $464,700 in fines and civil 
penalties. 

II. Subject Areas 

1. Advertising 

Beginning in the spring of 1984, the Consumer Protection Division under- 
took a major new program against violators of the Attorney General's adver- 
tising regulations. The enforcement efforts have been directed against both 
large and small companies and have concentrated primarily on the furniture, 
clothing and auto industries. 

With clothing and furniture advertising, the Division has been particularly 
concerned with range-of-price ads, which do not disclose the items' highest 
sale price, and with discount-price ads, in which the seller cannot establish that 
it has, in fact, sold items at the high "former" or "regular" price quoted in the 
ad. In the case of automobiles, the Division has actively pursued car dealers 
who advertise that they will sell cars for a certain sum "over invoice", misleading 
consumers to believe that the dealer is making a minimal profit, and with bait- 
and-s witch ads, which promise terms and models not actually available to 
customers who answer the ad. 

2. Bankruptcy 

In fiscal 1984, the Consumer Division undertook a new emphasis on 
bankruptcy court litigation. Depending on the nature of the case, businesses 
which had ceased operations were forced into bankruptcy to insure that their 
assets were used for restitution for consumers, In reMichaud Tours, Inc., and 
the Division successfully moved to dismiss bankruptcy petitions by businesses 
which had filed in bankruptcy to avoid the Division's efforts in state court. 
In re Perulco, Inc., d/b/a Prospect Street Nursing Home. 

In addition, the Division actively participated in negotiations to reorganize 
businesses in bankruptcy. We successfully negotiated settlements providing 
for restitution for consumers from debtors' estates, In re Joseph and Janet 
Pierce [Commonwealth v. Selective Singles, Inc. J and In re Puritan Furniture 
Corp. and concluded agreements which call for continued monitoring of 
business activities to guard against future unfair and deceptive practices. In 
re Professional Career Counsellors, Inc. 

3. Automobiles 

The enforcement of consumer protection laws in the areas of new and used 
automobile sales and repair, automobile odometer tampering and warranty 



P.D. 12 53 

protection, as in previous years, continued to make up a substantial percen- 
tage of the Consumer Division's caseload. The Division's efforts this past year 
again focused on large-scale investigations and prosecutions of odometer 
tampering and option packing . With the passage of the "Lemon Law" bill and 
the litigation against the Polyglycoat Corporation, the Division branched out 
to include a new emphasis on insuring warranty protection for vehicle owners. 

A. Odometer Tampering 

This year the Division obtained judgments in 1 3 odometer tampering cases, 
involving hundreds of used cars. As a result of these settlements, over $130,000 
in consumer restitution and costs was collected. One of these settlements, Com- 
monwealth v. H.J. Nassar Co. Inc., involved a new theory under which a dealer 
who had purchased and resold "spun" cars, but had not itself tampered with 
any odometers, was successfully sued for breach of warranty. The dealership 
was required to provide restitution to its customers. 

B. Option Packing 

The practice of "option packing" by automobile dealers, that is, forcing 
consumers to purchase unwanted, expensive, dealer-installed options on new 
cars, continued to be a focus of the Division's efforts in the automobile area. 
Claims against Woburn Foreign Motors, Inc. and Foreign Auto Import, were 
settled and $39,000 was collected in restitution for consumers and $19,000 in 
costs for the Commonwealth. 

In a hotly contested option packing case which the Division continues to 
litigate, Wellesley Toyota appealed a Superior Court injunction which was ob- 
tained in October, 1983, enjoining Wellesley from continuing to force con- 
sumers to buy unwanted options. That case, now pending in the Appeals Court, 
raises for the first time the question of the meaning of the option packing statute, 
G.L. c.93B. 

4. Health Care 

The Division's litigation in the health area continued to focus on improving 
nursing home care for the elderly. In Commonwealth v. Hodgdon Rest Home, 
a preliminary injunction was obtained against the owners of the nursing home 
which required them immediately to cease their mistreatment and neglect of 
patients and to transfer nearly half of the patients to other facilities where they 
could obtain appropriate treatment. The preliminary injunction eventually 
resulted in the transfer of all of the patients from the home and its ultimate 
closure. In Commonwealth v. Perulco, Inc., d/b/ a Prospect Street Nursing 
Home, a petition was filed to place the Prospect Street Nursing Home under 
temporary receivership because the home's owner had been unable to improve 
the deplorable patient conditions there and the Department of Public Health 
had decertified the home. A Superior Court judge granted the petition and 
appointed a temporary receiver to assume operation of the home. 

Finally, addressing the new phenomenon of a woman who acted as a "broker" 
for nursing home beds by placing patients in nursing home facilities, 
Commonwealth v. Marie Stackpole, d/b/ a Social Service Association, the 



54 P.D. 12 

Division obtained a judgment which prohibited the defendant from continu- 
ing to place patients in facilities which were not licensed to provide them with 
necessary levels of care or misrepresenting her professional qualifications. 

5. Banking and Credit 

The Consumer Protection Division's banking and credit activities during 
the fiscal year concentrated primarily in the area of mortgage lending. In 
Commonwealth v. Cabot Mortgage Corp., a South Boston mortgage com- 
pany and its president was sued for failing to honor mortgage commitments 
which they had made to customers. In the course of the lawsuit, $250,000 worth 
of the defendants' real estate assets were attached to secure payment of restitu- 
tion to injured consumers, and a preliminary injunction was granted prohibiting 
the defendants from accepting new mortgage applications until pending com- 
mitments had been honored. 

In another mortgage lending case, the Division sued the Lowell Institution 
for Savings for using improper indexes to calculate increases in its variable 
rate mortgages. The bank had attempted to raise rates on its variable mortgages 
to equal those of its fixed rate mortgages. A final consent judgment was agreed 
to which requires the bank to refund $10,000 in excess interest to injured con- 
sumers and to lower its interest rates on variable rate mortgages. 

6. Landlord and Tenant 

This past year, in addition to litigating the rent control and condominium 
conversion cases described above, the Division brought a number of other 
landlord-tenant cases. 

In Commonwealth v. Paco Realty Corporation, for example, a landlord 
corporation and its principal officers were sued for misrepresentations to 
tenants and for failure to repair a residential apartment house after an arson 
fire. After attaching the building itself and a bank account of the defendants 
and obtaining a preliminary injunction, a final consent judgment was entered 
into with Paco and the individual defendants which provided that they im- 
mediately complete repairs to the building and pay damages to the tenants. 

7. Miscellaneous Issues 

The Division settled two travel-related cases this past year, one against a 
travel company, Commonwealth v. First Federal Corporation, for failing to 
provide travel passes to consumers who purchased them for travel to destina- 
tions serviced by Air Florida, and another against a cruise operator, Common- 
wealth v. Carnival Cruise Lines, Inc., for sending cruise passengers to Nassau 
rather than to Bermuda due to a labor strike, and failing to provide notice or 
refunds. In the First Federalca.se, Air Florida was persuaded to give defraud- 
ed consumers free airline tickets in accordance with the pass program. In the 
Carnival case, the settlement provided that consumers be reimbursed one-third 
of their cruise fare. 

Having responsibility for ensuring compliance with Massachusetts' laws on 
weights and measures, as issued and monitored by the Division of Standards, 
the Consumer Protection Division successfully litigated several weights and 



P.D. 12 55 

measures cases. In Commonwealth v. Christy Corporation, for example, a final 
consent judgment was obtained against the defendant prohibiting it from con- 
tinuing to short weight bottles of dry gas and requiring it to provide restitution 
by overfilling containers for two years. In Commonwealth v. Festino Fuel, 
Inc. and Commonwealth v. Lincoln Park Fuel, Inc., two oil delivery fraud 
cases, the Division commenced suit after the Division of Standards advised 
that these companies were employing methods to deliver less oil than the amount 
for which the consumer was billed. In both cases, the defendants' practices 
were stopped, and in the Festino case, a final consent judgment was entered 
into requiring the defendant to pay $65,000 to its customers. 

In a case brought in federal court by the MBTA Carmen's Union against 
the Commonwealth and the MBTA, Local Division 589 v. Commonwealth 
of Massachusetts, attorneys for the Division successfully defended laws passed 
in 1978 and 1980 which reformed the arbitration procedures followed by the 
MBTA and which gave management more rights in the operation of the 
Authority. These laws had been passed in a time of MBTA fiscal crisis and 
were designed to improve efficiency and reliability in MBTA operations. The 
Union challenged the laws, arguing that they violated the Supremacy and Con- 
tract Clauses of the United States Constitution. The United States Court of 
Appeals has now twice upheld the laws, and no further appeal has been taken. 

In another case extensively litigated by the Division, a final consent judg- 
ment was obtained against a burglar alarm company, Commonwealth v. Rollins 
Protective Service Co., which prohibited the defendant from engaging in a host 
of deceptive practices, including repossessing burglar alarm systems under the 
guise of making repairs, failing to honor warranties and utilizing misleading 
crime statistics in its sales talks. 

ENVIRONMENTAL PROTECTION DIVISION 

General Laws c.12, §11D establishes the Environmental Protection Divi- 
sion in the Department of the Attorney General. The Division's responsibilities 
lie in two main areas. It is litigation counsel on environmental issues to all of 
the agencies of the Commonwealth, principally those within the Executive Of- 
fice of Environmental Affairs. In this role the Division does all of the Common- 
wealth's civil environmental enforcement, including air and water pollution, 
hazardous and solid waste control, wetlands protection and billboard control. 
In addition, the Division initiates and intervenes in judicial and administra- 
tive actions for the purpose of protecting the environment of the Common- 
wealth. These cases include hearings before federal agencies on the siting of 
energy generating facilities and participation in state and federal appellate litiga- 
tion on issues of significance to the environment. 

As a result of its role in environmental enforcement the Division receives 
substantial grant money from the United States Environmental Protection 
Agency. 

During the year the Division recovered through litigation nearly $4.5 million 
in penalties, costs and grants for environmental programs. In addition, several 
of the cases described below have resulted in forcing private parties to under- 
take cleanups which cost millions of dollars and which the Commonwealth 
would otherwise have had to perform. 



56 P.D. 12 

Silresim Chemical Corporation 

During fiscal year 1984, the Division pursued both state and federal actions 
seeking recovery of cleanup costs at the Silresim Corporation hazardous waste 
site in Lowell. The corporation was declared bankrupt in 1978, leaving 
thousands of barrels of chemical wastes at the site of its operations. The Depart- 
ment of Environmental Quality Engineering removed all of the hazardous 
materials stored in drums and tanks and completed other measures on the site 
at a cost of approximately $3 million to the Commonwealth. 

In August 1983, the settlement agreements were reached in a state court 
lawsuit filed in 1979 against Silresim Chemical Corporation, its president John 
Miserlis, and the Union National Bank, the mortgage-holder on the property. 
The Union National Bank paid $250,000 to the Commonwealth and assigned 
to the Commonwealth its mortgage on the Silresim Chemical Corporation 
property. John Miserlis paid $35,000 to the Commonwealth and further agreed 
in an Agreement for Judgment approved by the Suffolk Superior Court to pay 
a portion of his salary each year for thirteen years, and to designate the 
Commonwealth as a beneficiary of $50,000 under his life insurance policy. 

In December 1983, the Division filed suit in federal court against more than 
300 generators and transporters of chemical wastes who did business with 
Silresim, and against Neil Pace, an operator of the site during one of its years 
of operation. The suit was Massachusetts' first major action under the federal 
Superfund law and the new state Superfund law that was enacted in March 
1983. The state and federal governments initiated settlement negotiations with 
the potential defendants in September 1983. After lengthy discussion with a 
negotiating committee appointed by the responsible parties, the Division and 
the defendants reached settlement agreements totalling nearly $2 million in 
March 1984. This sum was paid in full following the federal court's approval 
of the Agreements for Judgment in April 1 984 . The Division continues to press 
the Commonwealth's claims against the few defendants that did not participate 
in the settlement. 

Commonwealth of Massachusetts v. Watt 

The United States Court of Appeals for the First Circuit on September 16, 
1983 issued a decision upholding the preliminary injunction, issued by the 
District Court on March 28, 1983, which enjoined the Department of the Interior 
from leasing contracts for oil and gas development on Georges Bank. The Court 
of Appeals' decision relied on the National Environmental Policy Act (NEPA). 
The Court found that Interior's Environmental Impact Statement (EIS) was 
inadequate because it failed to address the drastically reduced estimates of oil 
and gas resources in the area which became available after the EIS was pub- 
lished, and because it failed to accurately define the anticipated environmental 
impacts in light of the new estimates. Given its conclusions under NEPA, the 
court found no need to address other possible grounds for an injunction under 
the Coastal Zone Management Act or the Outer Continental Shelf Lands Act. 

DEQE v. Shaffer Landfill 

This case involves a large commercial landfill in Billerica that for years had 



P.D. 12 57 

been operating out of compliance with DEQE regulations. This non-compliance 
resulted in the leaching of contaminants off the site and into groundwater, 
a problem that is extremely expensive to remedy. The Division sued and obtained 
an injunction against the landfill owners' transferring of assets. A summary 
judgment was then granted closing the landfill. This led to negotiations that 
resulted in a final judgment requiring the payment of a $75,000 civil penalty, 
the deposit of $1 .35 million in escrow to assure the proper clean up of the site 
and a schedule for the phasing out of the use of the site as a landfill. 

Commonwealth v. Reliable Electronics Finishing Corp. 

The complaint in this case alleged that the defendant had violated 
Metropolitan District Commission (MDC) orders to complete and operate its 
pretreatment system and had failed to submit analyses of its treated effluent. 
The Division was informed of the existence of a by-pass pipe that periodically 
discharged untreated effluent into the MDC sewer system when flow to the 
treatment facility exceeded its capacity. Because of the bypass, the plant 
discharged slugs of acids, caustics, and such metals as cadmium, chromium, 
zinc, and cyanides into the sewer and eventually into Boston Harbor. 

In a consent judgment, the defendant agreed to pay a civil penalty of $100,000 
and to make grants totalling $500,000 to Bay State Skills Corp. to fund a five 
year program to train industrial treatment plant operators in the increasingly 
specialized and complex field of industrial pretreatment. Because state matching 
funds are available, the $500,000 grant by Reliable will result in a $1 million 
program. The Defendants also agreed to replace its pretreatment system and 
obtain an MDC permit prior to operation. Finally, the judgment required the 
defendant to sample ground and groundwater at and near the site and to clean 
up any hazardous waste discovered at and near the site to the satisfaction of 
the D.E.Q.E. , an undertaking that will cost approximately five million dollars. 

Town of Warren v. Hazardous Waste Facility Site Safety Council 

The Division defended G.L. C.21D against a wide-ranging challenge to its 
step-by-step scheme for the siting of environmentally-sound hazardous waste 
disposal facilities in the case of Town of Warren v. Hazardous Waste Facility 
Site Safety Council. The Supreme Judicial Court sustained the Division's posi- 
tion, rejecting all of the challenges to the statute. In doing so, the Court took 
a major step toward solving the problem of the illegal disposal of hazardous 
waste in the Commonwealth. 

Acid Rain 

The Division in March 1984 joined five other state Attorneys General and 
several environmental organizations in filing suit against the United States 
Environmental Protection Agency under the federal Clean Air Act because 
of EPA's failure to take action on acid rain. The complaint filed in the United 
States District Court for the District of Columbia, alleged that EPA failed to 
comply with the federal Clean Air Act by refusing to rule on the 1981 admin- 
istrative petitions of three states that sought stricter controls on air pollution 
from the Midwest. The suit also challenged EPA's failure to notify Midwestern 



58 P.D. 12 

states of the international effects of air pollution and its failure to require 
reduced emissions in those states on that basis . The parties filed cross-motions 
for summary judgment on both issues and oral argument was scheduled for 
August 1984. 

Town of Norwood 

A long-standing dispute among DEQE, MDC, and the town of Norwood 
was referred to the Division because Norwood had refused to repair its sewers 
and comply with state permit requirements for large structures, resulting in 
both widely publicized back-ups into homes and streets and also millions of 
gallons of excess storm water flow into the overloaded MDC lines and the Nut 
Island treatment plant. The parties were able to reach agreement on an order, 
issued by the MDC and DEQE, and agreed to by Norwood , by which Norwood 
was required (1) to remove, by September 1, 1983, 300,000 gallons per day 
of excess flow by repair work and removal of local sump pumps; (2) to continue 
the repair work and removal thereafter at such a rate as to remove two gallons 
of flow for every gallon allowed into the system by new permits; and (3) to 
comply with state permit requirements. 

EPA v. South Essex Sewerage District & Commonwealth of Massachusetts 

The United States Environmental Protection Agency sued to stop discharge 
of sludge into Salem Harbor from a South Essex Sewerage District's (SESD) 
sewage treatment plant; the Commonwealth was a defendant under the provi- 
sion of the federal Clean Water Act that requires a state to pay for remedial 
action if a state law makes it impossible for a municipality to pay. The Division 
worked with SESD to find a method of treatment and a site for the sludge and 
amended a prior state case against SESD to include the member municipalities 
(Salem, Peabody, Danvers, Marblehead, and Beverly) as defendants in order 
to require them to pay for the solution if they would not do so voluntarily. 
The municipalities voted to finance the solution, and treatment and disposal 
were commenced before any court action took place in the federal case. 

DEQE v. Cumberland Farms, et al. 

The Division obtained a permanent injunction preventing Cumberland Farms 
from filling portions of the Great Cedar Swamp in Middleboro. Cumberland 
Farms argued that its clearing, draining and filling of wetland was exempt from 
state regulation because the land was "in agricultural use" as defined by M . G . L . 
c.131, §40. The Division maintained that the "in agricultural use" exemption 
applied only to land currently in such use, not to land in the process of conver- 
sion to agricultural use. The Superior Court sustained the Division's position 
but reported the case to the Appeals Court, where it has been argued and is 
awaiting decision. 

DEQE v. Town of Wellfleet 

This wetlands protection case was instituted after the Town of Wellfleet in 
1976 refused to operate the rebuilt Herring River Dike so as to protect a re- 



P.D. 12 59 

emerging saltmarch behind the dike. During the past fiscal year, intensive 
negotiations with representatives from the Town resulted in the filing and 
approval of a final judgment in favor of DEQE requiring the town to allow 
DEQE to control and operate the dike. This will assure the recovery of the 
Herring River estuary as a productive saltmarsh. This result is important because 
of the constant loss of saltmarsh in the Commonwealth. 

EPA Rulemaking on Coal Fired Power Plants 

The Division filed comments in an EPA rulemaking proceeding which 
concern the adoption of a new rule relaxing monitoring and compliance re- 
quirements for sulfur dioxide emissions from coal-fired power plants. The 
comments opposed adoption of any such rule, arguing that it would increase 
damage to the environment from acid rain. 

Penn Central Corp. v. Commonwealth 

In this hazardous waste and tort case, Penn Central brought suit against 
the Commonwealth for Penn Central's costs of removing hazardous waste from 
its property in Dorchester; the waste was placed on the site by a lessee. Penn 
Central alleged that the Commonwealth was liable because of the negligent 
issuance of a hazardous waste disposal license to the lessee and inadequate in- 
spection. The Superior Court ruled, and the Appeals Court affirmed, that the 
Commonwealth could not be sued on these grounds. 

Commonwealth v. Canadian Universal Insurance Co. 

In a related case, DEQE v. ReSolve, Inc., et ai, the Division collected $82,000 
from the president and the past president of the company for clean-up of hazar- 
dous waste in North Dartmouth. The company itself has no assets and sued 
its insurers for coverage under a pollution-exclusion clause that is being litigated 
in several states. The Division intervened in the case to support the interpreta- 
tion of the clause that would provide coverage and to bring our own case against 
the insurer. This is the first time the Commonwealth has brought a case direct- 
ly against an insurance company on the basis of a claim that the Commonwealth 
is an intended beneficiary of the insurance policy. 

Department of Environmental Quality Engineering v. Cannons 
Engineering Corp. et al. 

This year's action on this long-standing and complex case involved the 
removal of hazardous waste from storage tanks owned by a third party in 
Plymouth, where Cannons had rented tanks, put hazardous waste in them, 
and then abandoned them. The owners of the tanks and EPA split the cost 
of removal, approximately $700,000; and the owners paid DEQE's costs (for 
past repairs and guard service) of $75 ,000 in return for the Division's our agree- 
ment to refrain from using G.L. c. 21E to place a lien on the Plymouth site. 



60 P.D. 12 

New Bedford Harbor 

In December 1983 the Division filed suit in federal court against six defendants 
in connection with the polychlorinated-biphenyl (PCB) contamination of the 
New Bedford Harbor. The suit seeks recovery under the state and federal Super- 
fund laws for damages to the natural resources in the harbor and recovery of 
the state's costs in investigating and remedying the contamination. The Divi- 
sion is pursuing the litigation in close coordination with the federal govern- 
ment, which filed suit at the same time for recovery of federal damages and 
costs. The parties have initiated extensive discovery and filed pretrial motions. 

Elliot J. Englander v. Department of Environmental Management 

Englander brought an action under G.L.c.l31§40, claiming that a wetlands 
restriction order imposed by the Department of Environmental Management 
constituted an unconstitutional taking of his land in Westwood. Englander 
had acquired contiguous land in Westwood and Norwood, on which there is 
an apartment complex yielding gross profits of over $1.25 million per year. 
The Superior Court had ruled that the order's prohibition of filling on half 
of the Westwood land was a taking of that land. The Division argued on ap- 
peal that the Westwood land could not be viewed as a separate parcel and that 
even if it were so viewed, it had not been deprived of all practical use and thus 
had not been "taken." On July 5, 1983, the Appeals Court reversed the Superior 
Court, ruling that under Moskowv. DEM, 1981 Mass. Adv. Sh. 2134, theorder 
did not constitute a taking whether either the entire acreage or just the Westwood 
land were viewed as the "parcel" in dispute. 



INSURANCE DIVISION 

The Insurance Division of the Public Protection Bureau represents the in- 
terests of Massachusetts citizens who purchase insurance. The Division in- 
tervenes in administrative hearings related to insurance companies' requests 
for rate increases and also brings affirmative litigation on behalf of victims of 
unfair and deceptive insurance practices, fraud, and other illegal insurance 
activities. As a result the Division assisted in saving Massachusetts consumers 
over one hundred sixteen million dollars this fiscal year. 

A. Administrative Hearings 

1 . Automobile Insurance Hearing 

In the fall of 1983, the Insurance Division intervened in a major administrative 
hearing relating to a $150 million (13.5%) auto-insurance rate increase pro- 
posed by the insurance industry for 1984. The Division in its advisory filing 
on these auto insurance rates, recommended that auto insurance rates be 
increased by only 2.5% in 1984. The major difference in the two recom- 
mendations was the method of calculating profits and the after tax income 
which insurance companies earn by investing premiums before paying con- 
sumer claims. Adopting the Division's methods and recommendations in many 



P.D. 12 61 

areas, the Insurance Commissioner permitted a 4.5% increase resulting in sav- 
ings of $102 million to consumers. These savings amounted to about $40 for 
each private passenger car in Massachusetts. 

2. Blue Cross /Blue Shield — Nongroup 

The Division intervened in opposition to a rate increase filed on behalf of 
Blue Cross/Blue Shield which requested 9.8% Blue Cross and 14.9% Blue 
Shield increases for non-group health insurance policies. Although the Division 
recommended and presented evidence supporting a 2.8% Blue Cross increase 
and 2.8% Blue Shield decrease in rates, the Hearing Officer approved rate 
increase of 9.8% for Blue Cross and 13.6% for Blue Shield. The Division ap- 
pealed this decision to the Insurance Commissioner. The appeal was pending 
at the end of the fiscal year. 

3. Blue Cross /Blue Shield — Medex 

In March of 1984, Blue Cross/Blue Shield (BC/BS) filed for a 24.4% rate 
increase on its Medex coverage. Medex is a supplement to social security's 
medicare coverage purchased primarily by senior citizens. The Insurance Divi- 
sion filed an opposition to the rate request of BC/BS and proposed a 14.8% 
increase. Following two weeks of administrative hearings the Insurance 
Commissioner denied the request of BC/BS as excessive and unreasonable. 
The decision was based in part on a new law which required that any rate in- 
crease include a specific finding that BC/BS are employing effective utiliza- 
tion review and other cost containment measures to prevent payments for 
medically unnecessary treatments and services. The Division had presented 
extensive evidence in the hearing documenting the lack of cost containment 
efforts by BC/BS in several areas. BC/BS agreed to lower their rate request 
to 15.9% which was approved. The difference between the proposed rate of 
24.4% and the approved rate of 15.9% represents a premium savings of $34.00 
per year for each subscriber and a total savings of over $14 million. 

4. Automobile Insurance Competition 

The Division intervened in a hearing called by the Insurance Commissioner 
to review the method of establishing automobile insurance rates for 1 985 . The 
Division argued successfully to the Commissioner that the automobile insurance 
market in the Commonwealth of Massachusetts was not currently suitable for 
competitively setting insurance premiums. The Division presented testimony 
concerning certain reforms which are prerequisites to any change in the current 
fix and establish system. 

5. Safe Driver Insurance Plan 

Chapter 241 of the Acts of 1983 mandated the creation of the new Safe Driver 
Insurance Plan (SDIP), to replace the Merit Rating System. Under the SDIP, 
drivers with at-fault accidents and traffic violations are surcharged on their 
insurance bills, drivers with clean records receive credits which reduce their 
insurance bills. In the fall of 1983, the Commissioner of Insurance held hear- 



62 P.D. 12 

ings on the structure of this SDIP and on the price of surcharges and credits. 
The Insurance Division presented expert testimony at these hearings and 
participated in lengthy technical discussions with the industries' experts and 
the staff of the State Rating Bureau. The Commissioner's decision on 1985 
automobile insurance rates adopted the Insurance Division recommendations 
almost in their entirety. 

6. Hearing on Discrimination in Maternity Benefits 

In the spring of 1984, the Insurance Commissioner held an informational 
hearing on the exclusion of maternity benefits from health insurance policies. 
The Insurance Division and the Civil Rights Division presented expert testimony 
on the cost to insurers and consumers of providing maternity coverage in those 
policies which currently exclude or limit payment for pregnancy related medical 
costs. The Insurance and Civil Rights Divisions also presented extensive legal 
analysis of the law on discrimination in maternity benefits and the Commis- 
sioner's authority to promulgate regulations mandating the inclusion of 
maternity benefits in health insurance policies. A decision is pending. 

B. Affirmative Litigation 

1. Baldwin-United 

The Division initiated suits against 12 financial and insurance firms in con- 
nection with the sale of the Baldwin-United Single Premium Deferred Annuities. 
The Baldwin conglomerate acquired a number of insurance company sub- 
sidiaries who became active in selling these annuities during the period 
1980-1983. Major national and regional security dealers sold annuities to 
approximately 8,500 Massachusetts citizens who invested approximately 
$187,000,000. These consumers, in relying on the promises from the defendants 
that the annuities would be safe, invested funds which were earmarked for retire- 
ment purposes, not for speculation. Because the Baldwin parent company went 
into bankruptcy and the insurance subsidiaries were unable to meet their obliga- 
tions to their annuity holders, the companies are under regulatory rehabilita- 
tion proceedings in their respective states (Indiana and Arkansas), and the 
principal and interest invested by annuitants are threatened. In addition to the 
suits initiated against the brokerage firms, the Division represents the 
Massachusetts Department of the Attorney General as chairman of the Baldwin- 
United Advisory Committee of the National Association of Attorneys General. 

2. Assurance Assistance Bureau 

The Division provided restitution of $ 1 4,000 to 92 elderly persons who had 
paid membership fees to a business which claimed they would provide assistance 
to elderly consumers in collecting benefits under insurance policies. The 
defendants were not licensed as insurance advisors and used unfair and decep- 
tive means of solicitation of these elderly citizens. 



P.D. 12 63 

3 . Group Health Insurance 

Division has concentrated its affirmative litigation efforts in two areas of 
group health insurance plans. The first is where employers failed to provide 
the promised insurance coverage as a result of failure to properly remit insurance 
premiums to the carriers involved. 

One of these cases involved 84 freelance artists and writers who were vic- 
timized by the financial failure of an organization known as "The Word Guild , 
Inc." The Division filed a request in Bankruptcy Court to give the claims of 
the freelancers priority over the other creditors of Word Guild so that lost 
insurance premiums may be recovered. This request was granted and the Divi- 
sion disbursed $10,000 to the former members. In other cases the Division has 
obtained attachments when necessary to secure restitution. The second area 
of group health insurance problems is where employers fail to offer a 39 week 
extension of the company's group health insurance plan to involuntarily laid- 
off employees as required by statute. The intervention by this Division has 
resulted in these former employees being allowed to be covered under the com- 
pany group plan. The Division continues to aggressively police these areas of 
the insurance market. 

4. City of Boston — Deferred Compensation Plan 

The Division reached settlements with insurance companies who administer 
the City of Boston's deferred compensation plan. The agreement resulted in 
the crediting of over $50,000 in lost interest to employees accounts as a result 
of delays in the transmission of employee deferrals to the participating insurance 
companies. 

C. Individual Consumer Complaints 

Intervention by the Division regarding individual consumer complaints 
resulted in a total savings of over $40,000 during fiscal year 1984. 

D. Legislation 

The Division continues to actively assist legislators, the public, and ad- 
ministrators in the drafting of legislation involving automobile insurance 
reform, sex discrimination in insurance and group health insurance. 



PUBLIC CHARITIES DIVISION 

The Division of Public Charities was established in the Department of the 
Attorney General pursuant to G.L. c. 12, §8B. Its activities fall into four main 
areas: (1) litigation aimed at protecting the public from misapplications of 
charitable funds and from fraudulent or deceptive solicitation; (2) participa- 
tion in estates and trusts in which there is a charitable interest; (3) various 
administrative functions mandated by G.L. c.12, §8F, and G.L. c.68, §§19, 
21 and 23, (4) miscellaneous projects. 



64 P.D. 12 

A. AFFIRMATIVE LITIGATION 

The Division continues to actively enforce registration, annual financial 
reporting and audit requirements under G.L. c.12, §8Fandc.68, §19. Active 
enforcement of the reporting and audit requirements ensures maximum ac- 
countability to the public regarding expenditure of charitable funds. Currently, 
every annual report and audit received by the Division is examined to deter- 
mine whether the organization is soliciting funds properly and expending funds 
in accordance with its purposes. In connection with these efforts, fifteen law 
suits were filed during fiscal year 1984. In addition the Division, without the 
need to resort to litigation, obtained audits from over 700 organizations which 
had initially failed to provide them. 

1 . CHARITABLE SOLICITA TIONS 

In the last few years the Division has received increasing numbers of com- 
plaints from the public concerning charitable telephone solicitations. Typically 
these complaints involve for-profit companies which solicit small businesses 
to purchase advertising in a charitable organization's year book. Other com- 
plaints pertain to for-profit corporations which solicit the public, as well as 
small businesses, to purchase tickets to events such as circuses, magic shows 
or ice shows alleged to benefit charitable purposes. The solicitors usually fail 
to disclose that they are for-profit companies and that they retain 65% -85% 
of the proceeds. Occasionally, the charity which the solicitor claims to repre- 
sent has not even authorized a solicitation in its name. Violations include failure 
to register and post bond as required by G.L. c.68, §23, excessive compensa- 
tion usually in the range of 65-85% in violation of G.L. c.68, §21, and decep- 
tive sales presentations in violation of G.L. c.68, §30 and G.L. C.93A, §2. Con- 
cerned about the quantity and severity of these complaints, the Division em- 
barked on a major enforcement campaign against non-complying professional 
solicitors. In fiscal year 1984, the following actions were brought. 

Bellotti v. O.S.C. Corporation et al. 

This company solicited under contracts providing for 65% -80% compen- 
sation to the company in violation of the 15% limit set forth in G.L. c.68, §21 
by selling yearbook ads for various police associations and without having 
registered and posted bond with the Division as required by G.L. c.68, §23. 
Telephone callers claimed that donations would support widows of slain of- 
ficers and scholarships for their children. A two and a half week trial was held 
in October, 1983. By the end of the fiscal year the Division was still awaiting 
the decision which will determine whether and to what extent police organiza- 
tions are subject to the Massachusetts Charitable Solicitation Act, whether and 
to what extent the Massachusetts Charitable Solicitation Act is unconstitutional 
and to what extent the defendants engaged in unfair and deceptive practices 
in their police solicitation campaigns. 

Bellotti v. United Funding Inc. and Richard J. Garden 

This case was filed in the Spring of 1 984, against a Florida professional fund- 
raising corporation which solicits donations to purportedly send handicapped 



P.D. 12 65 

and retarded children to a circus, which United Funding produces. The Divi- 
sion obtained a preliminary injunction enjoining the company from: engag- 
ing in solicitation in Massachusetts without registering, posting bond and fil- 
ing contracts with the Division; entering into contracts in which it is to be paid 
in excess of fifteen percent (15%) of the gross revenue; engaging in unfair and 
deceptive solicitation practices; and failing to disclose in its solicitations the 
percentage of receipts retained by United Funding as its fee. 

Bellotti v. Gerald M. Catanzaro and G.M.C. Advertising, Inc. 

This case is based on facts similar to Bellotti v. O. S. C, as it involves solicita- 
tion for police relief associations as well as an organization ostensibly promoting 
public safety for children. Pre-trial discovery was conducted during the fiscal 
year. 

Commonwealth v. M & M Publishing Co., et al. 

This action commenced on March 5, 1981 as a result of false and deceptive 
solicitations by the defendants. On March 1 3 , 1 98 1 the Superior Court approved 
a consent judgment enjoining the defendants from continuing practices of 
solicitation fraud and from failing to make certain disclosures to potential 
advertisers about their advertising publications and the percentage of contribu- 
tions they solicited which would actually benefit charities. On March 29, 1984 
the Division filed a complaint for civil contempt, which alleges that the 
defendants have continually violated that consent decree. The contempt com- 
plaint seeks restitution to affected groups and a $ 1 0,000.00 fine for each viola- 
tion of the consent decree. On March 29, 1 984 the Superior Court granted the 
Division's motion for ex parte trustee process against four banks up to an 
amount of $140,000.00 on the theory that the accounts are held in construc- 
tive trust for the effected organizations. 

Bellotti v. People Aiding Children, Inc 

This charity, which was soliciting by selling tickets to an ice show, was sued 
for failure to register and to receive a Certificate to Solicit. After a temporary 
restraining order was granted, the case was settled through the filing of a consent 
judgment. 

Bellotti v. R.G.L. Associates and Rocco G. La Penta 

This case, pursuant to G.L. c.93A, involves the sale of advertising space 
for the defendants' own "Mass. Police Journal" which they falsely represent 
is affiliated with police organizations. The Division's motion for a preliminary 
injunction was granted and the defendants' motion for an injunction on first 
amendment grounds against the Commonwealth was denied. 

2. OTHER SOLICIT A TION INVESTIGA TIONS AND A CTIVITY 

The Division additionally has been investigating over twenty other solicita- 
tion complaints, including eight involving police or firefighter associations, 
six involving athletic or entertainment events, and three involving charities 



66 P.D. 12 

which attempt to locate missing children. Near the end of the fiscal year, the 
Division initiated an educational campaign to alert the public to the possibility 
of fraudulent solicitation and to the Department's commitment to combatting 
abuse of the public's generosity in making charitable donations. 

3. CHARITABLE GAMBLING 

Enforcement efforts have continued under the Attorney General's charitable 
gambling regulations promulgated in 1982. Function halls which host frequent 
Las Vegas events are investigated to determine whether the sponsoring organiza- 
tions are legitimate and complying with the regulations. When a violation of 
the rule limiting each organization to two gambling nights per year is discovered, 
a letter of assurance of future compliance is required from the sponsoring 
organization. In connection with this program, numerous investigations were 
conducted and seven compliance letters were obtained. 

Investigation of suppliers continues — both investigation of new suppliers 
and monitoring compliance with the seventeen court orders previously obtained. 

As a result, the Division sued two casino equipment suppliers for civil 
contempt of court. In Bellotti v. Joseph Sinnottd/b/aLas Vegas— Monte Carlo 
Nights, following a trial, a $2,500 penalty and $300 costs were assessed against 
the supplier. In Bellotti v. Alfred Meurant d/b/a Vegas Time Associates, a 
settlement of $8,500 was obtained. 

Finally, in May, 1984, a Superior Court decision in Bellotti v. Frate, held 
that slot machines cannot be operated at non-profit Las Vegas Nights, that 
the machines are subject to seizure and that the Attorney General's regulations 
are valid. The decision is currently being appealed. 

On March 12-14, 1984, in Minneapolis, The National Association of 
Gambling Regulatory Agencies (NAGRA) held its first organizational meeting. 
The purpose of the organization is to provide a forum for the exchange of in- 
formation, intelligence and regulatory procedures relating to charitable 
gambling. Representatives from 18 states were present. Two attorneys from 
the Division attended the meeting, one of whom spoke on Massachusetts' ex- 
perience with raffles and Las Vegas Nights. 

4. CONSTITUTIONAL LITIGATION 

Chapter 68 , § § 1 8-33 of the Massachusetts General Laws regulates charitable 
solicitation. As a result of recent Supreme Court decisions several sections of 
the chapter have been challenged on the basis that regulating solicitation is 
like regulating speech. Therefore, it is argued such regulation would have to 
meet the same strict scrutiny test that regulation of speech must meet. 

The Division filed an amicus curiae brief for Massachusetts and ten other 
states in Secretary of State of Maryland v. Munson, primarily because the case 
might impact the Commonwealth's regulation of professional solicitors. The 
Munson majority held that Maryland's flexible percentage limitation on the 
fundraising costs of charities violates the free speech guarantee of the First 
Amendment. However, Justice Rhenquist writing for four dissenting Justices, 
stated, as the Division had argued, that percentage compensation limits are 
"merely ... economic regulation..." and not a percentage limit on a charity's 
fundraising expense. As such, "... if Maryland's statute regulated only the rates 



P.D. 12 67 

charged by professional fundraisers to charitable organizations, this would 
be an easy case. The statute would be clearly constitutional." 

In Bellotti v. OSC Corporation the Attorney General sued to enforce com- 
pliance with §21 and §23 of c.68. Those sections require that professional 
solicitors register with the Division, file an annual bond in the amount of 
$10,000, submit copies of their contracts with charitable organizations and 
limit their compensation to 1 5% of the monies collected on behalf of the charity. 
OSC Corporation counterclaimed asserting that these sections of c.68 are un- 
constitutional because they burden solicitors and thus burden a charity's abili- 
ty to solicit funds. The Attorney General argued that such accountability and 
limits on compensation serve to protect the charity from overreaching by the 
solicitor, that such regulation does not affect speech and that, as with limits 
on the contingent fees of lawyers, limits on percentage compensation are valid 
economic regulation of professional fiduciaries. The trial of this case was com- 
pleted in October 1983, and a decision is awaited. 

Bellotti v. International Marathons, Inc. 

Marshall Medoff, the president and sole shareholder of International 
Marathons Inc. (IMI), alleged that he had a contract with the Boston Athletic 
Association to be sole agent for the selling of sponsorship rights for the Boston 
Marathon. The Division sued IMI for violating c.68, §21 which limits a 
solicitor's compensation to 15% of the monies received and c.68, §23 which 
requires solicitors to register and to become bonded. Medoff countered that 
§21 is unconstitutional as it limits the speech rights of charities. The case was 
decided by the Supreme Judicial Court this year. The Court found that Medoff s 
sale of BAA sponsorships was not solicitation of contributions within the 
jurisdiction of the statute but instead purely commercial activity. According- 
ly, the Court dismissed Medoff s constitutional challenge as moot. In a related 
case, Boston Athletic Association v. International Marathons Inc., the Court 
held that the contract between the BAA and International Marathons Inc. 
(Medoff) was void and unenforceable as an improper, excessive delegation of 
authority by the board of the BAA. 

Planned Parenthood League of Massachusetts v. Bellotti 

In this action the Planned Parenthood League of Massachusetts (PPLM) 
sought a declaratory judgment that §28 of c.68 is unconstitutional. That sec- 
tion prohibits charitable organizations from using paid telephone operators 
to solicit contributions where the operators' principal duties are such solicita- 
tion. The Suffolk Superior Court, after a trial based on stipulated facts, declared 
that §28 was an unconstitutional infringement on free speech rights. An ap- 
peal was taken and the Supreme Judicial Court granted direct appellate review. 
The Supreme Judicial Court upheld the Superior Court finding that §28 is un- 
constitutional and enjoined the Attorney General from enforcing it. The 
Attorney General filed a Petition for Writ of Certiorari in United States 
Supreme Court. Section 28 is defended as regulation of speech in a private forum 
aimed at protecting the privacy rights of telephone subscribers. 



68 P.D. 12 

5. DISSOLUTIONS 

The Division is authorized by G.L. c.180, §1 IB to dissolve charitable cor- 
porations that fail to file annual financial reports for two consecutive years 
or against charitable corporations which are inactive and whose dissolution 
would be in the public interest. 

Dissolutions pursuant to § 1 1 B involve investigation to discover any charitable 
assets which could be applied to similar charitable purposes as well as legal 
dissolution proceedings before the Supreme Judicial Court. The Division is 
currently investigating the status of twenty charitable corporations prior to 
filing a petition for involuntary dissolution in the Supreme Judicial Court. 

Charitable corporations may also dissolve voluntarily pursuant to G.L. c. 1 80, 
§1 1A by filing an action against the Attorney General. The Division reviews 
such dissolution complaints to make certain that the remaining charitable assets 
are distributed to a similar charitable purpose. During the past year eight 
corporations were voluntarily dissolved by final order of the Supreme Judicial 
Court. In addition, twelve cases are pending awaiting distribution of assets 
to similar charitable purposes. 

6. MISCELLANEOUS LITIGA TION 

Bellotti v. Brockton Agricultural Society 

The action is a suit to compel the Brockton Agricultural Society to register 
as a public charity. The Supreme Judicial Court affirmed the Superior Court's 
ruling denying intervention to all shareholders of the Brockton Agricultural 
Society. The proposed intervenors had argued that their failure to be included 
denied them their constitutional due process rights to representation by counsel 
of their own choice. The Supreme Judicial Court dismissed this argument and 
found, as the Division had argued, that the intervenors were adequately 
represented by the Brockton Agricultural Society. 

Children's Museum and South Dartmouth v. Attorney General 

This is an application for permission to sell land given to the museum as 
a sanctuary for small birds and animals. The museum provided a nature walk 
for school students in the area, but found that the property surrounding the 
museum had become heavily developed and had impaired the property's ability 
to support bird and small animal life. The Superior Court, over the objection 
of neighbors, allowed the sale of the property and application of its proceeds 
to a new and vastly more appropriate site for the museum. 

In re: Dimock Community Health Center 

On December 29, 1983, the Superior Court approved a plan to end the 
receivership following additional borrowings by Dimock endowment, payment 
of $435,000.00 out of $923,000.00 of outstanding debts and execution of 
agreements and compromise with remaining secured creditors. On April 5, 1984 
the Superior Court held a meeting at the Dimock with its Board of Directors 
for terminating the receivership. The Court approved orders which would (1) 



P.D. 12 69 

return property in possession of the receiver to Dimock's board of directors; 
(2) allow short-termed borrowing up to $71,000 by Dimock from funds cy 
preyed from endowment if no other commercial credit was available; (3) re- 
quire Dimock to comply with the Division of Public Charity's financial record- 
keeping, audit and reporting requirements. 

The Court expressed great pleasure at the success of the receivership in main- 
taining the Dimock as a key source of health care services in Roxbury. The 
Court singled out for praise the receiver, his counsel and this Department for 
making the receivership a success. 

Bellotti v. Massachusetts Cerebral Palsy of Greater Boston 

On May 7, 1984 the Division filed a Complaint and a request for receiver 
against Massachusetts Cerebral Palsy of Greater Boston, Inc. The Complaint 
alleges that Mass. Cerebral Palsy has not submitted financial statements since 
1980 as required by law and that it has conducted Las Vegas Fund-raising Events 
without first obtaining Certificates of Registrations to Solicit required by law. 

B . PARTICIPA TING IN ESTA TES AND TR USTS WITH 
CHARITABLE INTERESTS 

The Attorney General is an interested party in the probate of each estate 
where there is a charitable interest. This year 1,520 new wills were received 
of which 795 involved charitable bequests of over $5,000. Each of these wills 
was reviewed and it was determined that the Attorney General had an interest 
in 1,386 of these estates. 

Seven hundred and fifty four Executor accounts and 1 ,785 Trustee accounts 
were reviewed and approved during fiscal year 1984. 

In addition the Division approved 1 1 1 petitions for the sale of real estate, 
34 petitions for appointment of trustees and was involved in 1 ,479 miscellaneous 
probate legal actions. 

The Division has continued its efforts to review old Probate matters in order 
to close files where no further action is required and to investigate estates and 
trusts where additional accountings are required but have not been received 
by the Division. At the completion of this effort only active cases will remain 
in the files and as a result the monitoring of such cases will be more effective. 

In addition to these routine matters, the Division handled 197 actions on 
cases in litigation. The most significant cases in this area are as follows: 

Chase v. Pevear 

Final proposed findings of fact, conclusions of law, memorandum in sup- 
port thereof and reply briefs were filed in this probate fee case ($780,000 total) 
regarding the successor trustee's request for $100,000 in fees. This portion of 
the case is note-worthy because the Division has taken the position that the 
successor trustee's fees should be charged directly against the former trustee 
and his counsel based on their misconduct and abuse of the judicial process 
in the original fee hearing. The misconduct was specifically detailed by the court 
in findings of fact and conclusions of law relating to the initial claim of $680,000 
in fees by the remaining parties. This office was instrumental in reducing the 



70 P.D. 12 

claim to an actual award of $67,500. In attempting to assess the co-successor 
trustee's $100,000 legal fee against the former trustee and his counsel as a penalty 
for their misconduct, the Division is attempting to send a message to the Bar — 
those who abuse the process of court do so at their peril. 

Sturdy Memorial Foundation v. Attorney General 

This action involved an attempt by the Plaintiff to use charitable trust funds 
intended to benefit certain medically indigent individuals for other unrelated 
purposes. The Division has opposed this attempt and trial is expected during 
the next year. 

Naumkeag Trust Co. v. Hazel M. Watson, et. al. 

The defendant sought to revoke a charitable trust created by her ward for 
the benefit of certain named charities . The Division j oined with the Naumkeag 
Trust Co. and successfully defended against the revocation of the trust. 

Town of Salem v. Attorney General 

The plaintiff had been using a portion of trust funds designated for use by 
Salem citizens chiefly in times of emergency or special need to finance free public 
concerts. The Division obtained a court order specifying that free public con- 
certs are not an appropriate use of these funds. 

C. ADMINISTRATIVE FUNCTIONS 

The Division has numerous administrative and routine responsibilities in- 
cluding: (1) receiving annual financial statements from charities operating in 
Massachusetts and maintaining these as public records; (2) administering the 
state's charitable solicitation act (G.L. c.68, §§18-33); (3) registering and 
regulating professional solicitors and fundraising counsel; and (4) represent- 
ing the state treasurer in the public administration of estates escheating to the 
Commonwealth. 

1. Annual Registrations Under G.L. c.12, §8F 

The Division has completed the process of computerizing registration in- 
formation. In addition during the past fiscal year a computerized delinquency 
program has been created and will shortly become operational. These com- 
puter programs will significantly enhance the Division's enforcement program. 
This year 1,308 new charitable organizations' Articles of Organization were 
received from the Secretary of State's Office, were reviewed , determined to be 
charitable and entered on the computer. 

Fees paid to the Commonwealth in fiscal 1984 arising from the annual fil- 
ings amounted to $198,880. 

After many years of effort, the nationwide plan to achieve uniform report- 
ing for charitable organizations has become a reality. All states will now accept 
the revised Internal Revenue Service Form 990 together with certain supplemen- 
tary schedules. Efforts to further improve the Form 990 are being carried out 
with the help of the Form 990 Advisory Committee . It is hoped that this develop- 



P.D. 12 71 

ment will substantially ease the burden on charitable organizations imposed 
by individual state reporting requirements. 

2. Regulation of Charitable Solicitations 

Under G.L. c.68, §19, every charitable organization soliciting funds from 
the public must apply to the Division for a Certificate of Registration prior 
to engaging in solicitation. Each such application must be reviewed for com- 
pliance with the statutory requirements. For the period from July 1, 1983 to 
June 31, 1984, 1864 applications were received. Certificate fees received were 
$18,640. 

3 . Registration of Professional Solicitors and Fund-Raising Counsel 

Under. G.L. c.68, §§21 and 23, all persons acting as solicitors or fund-raising 
counsel for soliciting organizations must register with the Division and file a 
bond. Each registration and each professional solicitation contract must be 
approved by the Director if it meets statutory requirements. During the fiscal 
year ending June 30, 1984, 70 registrations were received and approved and 
total fees were $700. 

4. Public Administration 

The Division represents the State Treasurer in the public administration of 
intestate estates where the decedent had no heirs. Such estates escheat to the 
Commonwealth. The following table represents activity in this area. During 
fiscal year 1984, $351,232.57 in escheats were received. 

During the past fiscal year the Division has filed thirty-seven (37) petitions 
for appointment of administrators de bonis non with respect to old public 
administration estates where the public administrator has either died, been 
disbarred or left the jurisdiction. 

D. MISCELLANEOUS PROJECTS 

Underutilized Town Trust Fund Project 

A review of the misuse and underutilization of charitable trust funds held 
by the various cities and towns in the Commonwealth commenced during the 
past fiscal year. The review project initially focused on 18 towns and 
municipalities in the Boston area. The full scale review began after a pilot project 
disclosed that Salem had over $800,000 in unexpended charitable income 
available for use. The project requires submission by each town of a compre- 
hensive review of their charitable trust funds (including principal, income, 
investment practices and accounting procedures) to the Division, review and 
analysis of the report, and court proceedings to pursue wrong doing or to 
eliminate outdated restrictions so that these assets may be put to full use. The 
other major elements of the program are to educate local town counsel regard- 
ing legal and fiduciary obligations of the towns and municipalities in relation 
to their charitable trusts and to establish that the Division intends to compel 
full utilization of these funds. 



72 P.D. 12 

MODEL SOLICITA TION LA W PROJECT 

The Division has been active in conjunction with the National Association 
of Attorneys General (NAAG) and the National Association of State Charities 
Officials (NASCO) regarding preparation of a model charitable solicitation 
act, which it is hoped will be enacted on a state by state basis. The need for 
a new, uniform charitable solicitation statue has become acute due to recent 
Supreme Court and state high court decisions which reject many of the tradi- 
tional statutory approaches. 

In response, the Division submitted a report to NAAG and NASCO entitled 
Issues in Charitable Fund-raising. The purpose of this report is to provide 
NAAG and NASCO with a complete historical perspective regarding develop- 
ment of the solicitation laws now under attack, the current state of affairs, 
as well as proposed solutions for the future model solicitation law. 

WORKING WITH THE MASSACHUSETTS NON-PROFIT 
COMMUNITY 

In an attempt to add stability to the provision of services to needy 
Massachusetts citizens by private non-profit organizations, the Division com- 
pelled a number of organizations to take affirmative steps to improve their 
financial condition. The Division worked with the organizations to make sure 
audits were completed, loans rescheduled when necessary, and long term finan- 
cial plans implemented. This approach was successful in helping such diverse 
organizations as a half-way house, a low income housing group and a museum 
remain in operation. The Division also continues to act as a source of infor- 
mation and assistance to Massachusetts citizens establishing and operating 
charitable organizations and to those concerned about the activities of charitable 
organizations. 



UTILITIES DIVISION 

A. Introduction 

The Attorney General has been involved in utility matters on behalf of 
Massachusetts ratepayers since 1973. The Utilities Division continues to operate 
as the major, and in most instances, the only representative of consumer interests 
in gas, electric, and telephone rate cases and related matters within 
Massachusetts. These matters are heard and decided by the Department of 
Public Utilities (D.P.U.) and the Energy Facilities Siting Council (E.F.S.C). 
The Division also appears on behalf of Massachusetts ratepayers before the 
Federal Energy Regulatory Commission (F.E.R.C). 

Fiscal year 1984 was extremely active and important for the Utilities Division 
for many reasons. On December 17, 1983 the Massachusetts Legislature enacted 
an increase in the Division's assessment; this legislation resulted in a doubling 
of the Division's main funding source from $250,000 to $500,000. (The Divi- 
sion also utilizes a separate assessment of $75,000 in electric fuel adjustment 
clause cases.) As is described in detail below, the legislature's action enabled 
the Division to increase the effectiveness of its representation of ratepayers 



P.D. 12 73 

to a significant extent. For the first time since it was established, the Division 
has the wherewithal to present expert witnesses' testimony in important cases. 
For example, this year the Division was able to present expert testimony in 
cases ranging from an electric company's request to include Construction Work 
In Progress (CWIP) in its rates, to the D.P.U.'s wide-ranging investigation 
of the telecommunications industry. The Division was also able to move 
affirmatively in several areas. For example, it petitioned the Federal Energy 
Regulatory Commission to investigate the causes of an outage at a power plant, 
and has retained an engineering firm to determine the cause of the outage and 
its impact on rates. The Division has also filed a petition with the Department 
of Public Utilities seeking an investigation of the telecommunications industry 
in light of the recent divestiture of the Bell System. These and other activities 
are described in greater detail below. 

B. Retail Rate Cases 

During the fiscal year, the Utilities Division intervened in each of the nine 
gas and electric base rate cases filed with the D.P.U. These cases represented 
requested rate increases of approximately $101 million. In the eight cases decid- 
ed to date, $57 million has been granted out of $97 million requested, resulting 
in a savings to the consumer of $40 million. The Utilities Division can legiti- 
mately claim responsibility for much, if not all, of these savings. It should be 
noted that the Department of the Attorney General has no control over the 
scheduling of rate cases. Companies may file for rate increases annually and 
many do so. The D.P.U. and F.E.R.C. set the schedule based on the timing 
of these filings. For the D.P.U. proceedings there is a six month statutory time 
limit during which each rate case must be heard and decided; this time limit 
imposes considerable strain on the resources of the Division . The Utilities Divi- 
sion reviews each of the companies' increases critically. It examines profit 
margins, operation and maintenance expenses, property taxes, depreciation 
expenses and utility plant in service. Through reviewing written documents 
filed before the hearings, through cross-examinating the companies' witnesses 
and by sponsoring expert consultants as witnesses, the Utilities Division is able 
to formulate recommendations for the agencies. In D.P.U. cases, the factual 
basis for allowing rates less than those requested by a utility is developed almost 
entirely by the Utilities Division. A brief narrative description of three of the 
most significant retail rate cases in which the Division participated in this fiscal 
year are presented below. 

A good example of effective rate case work came in a case filed by Eastern 
Edison Company. The company had sought to increase its rates by $16,893,494. 
The Utilities Division contended that the company had failed to show any signfi- 
cant proof of the need for any increase, and recommended that the Company 
receive a decrease of $1 ,936,808. The D.P.U. issued its rate order on January 
31, 1984, allowing an increase of only $893,494. 

The Western Massachusetts Company rate case was, perhaps, more sig- 
nificant from a long-term policy perspective. In this case, the utility sought 
permission to include in its current rates CWIP associated with Millstone 3, 
a nuclear plant under construction. The Utilities Division sponsored two expert 
witnesses in opposition to this proposal, and argued vigorously against it. Such 



74 P.D. 12 

a presentation would have been impossible without the increase in the Division's 
assessment approved by the legislature. The Department found the Division's 
testimony persuasive, and denied the utility's CWIP request. The D.P.U. also 
announced a new policy regarding abandoned plants. It held that for all new 
plants not yet under construction it would not permit any recovery for 
abandoned investments. It also adopted a clearer standard by which it will 
determine whether and to what extent completed plants will be included in rate 
base. 

On May 1 5 , 1 983 the Bay State Gas Company filed a request for a rate increase 
of $12,860,000. The Utilities Division was the only intervenor in this case. At 
the conclusion of hearings the parties were able to settle the entire case. The 
settlement resulted in a rate increase of $5,539,000, much less than the utility 
had sought. Most significantly, the settlement represented a fair outcome for 
both the utility and its consumers, with significant savings in time and resources 
for the Attorney General and the D.P.U. This was the first retail rate case in 
which the Attorney General was a party to be fully settled. 



RATE CASE COMPILATION 

Berkshire Gas Company, D.P.U. 1490-Filed in April 1983 for $2,420,006 
increase. The Attorney General recommended a decrease of $561,376. The 
Department of Public Utilities allowed an increase of $263,626 in January, 
1984. 

Granby Telephone Company, D.P.U. 1499-Filed in April 1983 for $1 15,000 
increase. The Attorney General recommended an increase of $13,956. The 
Department of Public Utilities allowed an increase of $88,61 1 in November 
1984, or 77% of the Company's request. 

Nantucket Electric Company, D.P.U. 1530- filed in May 1983 for $697,000 
increase. The Attorney General recommended an increase of $355,000 or 50% 
of the request. The D.P.U. allowed $507,025 in February 1984 or 72% of 
the Company's request. 

Eastern Edison Company, D.P.U. 1580 — filed in July, 1983 for an increase 
of $6,893,494. The Attorney General recommended a decrease $1,936,808. 
The D.P.U. allowed 1%, $610,774 of the Company's request. 

Boston Edison Company, D.P.U. 1720— filed in December, 1983 for an 
increase of $37,500,824. The Attorney General recommended an increase of 
$10,470,000. In July, 1984 the D.P.U. allowed 90%, $34,087,000 of the 
Company's request. 

Western Massachusetts Electric Company, D.P.U. 84-25, filed for an increase 
of $33,670,000 in January, 1984. The Attorney General recommended 
$4,100,000 or 12% of request. The D.P.U. allowed $14,325,000 in July 1984, 
or 43% of the Company's request. 



P.D. 12 75 

Colonial Gas Company, D.P.U. 84-94 — filed in April, 1984 for an increase 
of $4,329,000. The Attorney General recommended an increase of $816,000 
for the Cape Cod Division and a decrease of $33,000 for the Lowell Division. 
The case is awaiting a decision by the Department of Public Utilities. 

C. FERC Proceedings 

The Utilities Division also participated in proceedings held at the Federal 
Energy Regulatory Commission, which has jurisdiction over wholesale elec- 
tric transactions in interstate commerce. It should be noted that while the 
Utilities Division has begun to participate in wholesale electric cases, it is still 
unable, despite the recent increase in our budget, to intervene in the F.E.R.C. 
cases involving natural gas pipeline rates. This is troublesome in view of the 
fact that approximately 65 percent of the rates paid by Massachusetts gas con- 
sumers are actually determined by the F.E.R.C. 

1 . Montaup Electric Company 

The Utilities Division intervened in a case filed at the F.E.R.C. by Montaup 
Electric Company, a wholesale power company which sells electricity to its 
affiliate, the Eastern Edison Company, in southeastern Massachusetts. In this 
case, Montaup sought to include in its rates approximately $5 million a year 
associated with its construction work in progress (CWIP). In addition, the com- 
pany asked to recoup all of its lost investment in the Pilgrim 2 project , approx- 
imately $10.5 million . The Division argued against both of these proposals and 
on January 17, 1984, F.E.R.C.'s administrative law judge issued an initial deci- 
sion disallowing the Company's request for CWIP in rate base. The Judge's 
decision relied heavily on arguments made by the Division. The Company has 
appealed the decision to the full commission. The Pilgrim 2 abandonment issues 
are still being litigated in Phase II of the proceeding. 

2. New England Power Company 

In July, 1983, the New England Power Company filed a request with the 
Federal Energy Regulatory Commission to increase its wholesale rates by ap- 
proximately $74 million per year. Included in the filing was the Company's 
request to receive a return on its investment in the Seabrook project. After 
analyzing the Company's filing the Utilities Division reached an agreement with 
the company to reduce the requested rate increase by approximately $30 million. 

At the hearings which followed on the Seabrook issues, the Division argued 
in opposition to NEP's Seabrook II CWIP proposal. On June 20, 1984, the 
administrative law judge issued an initial decision essentially adopting the 
Utilities Division's position, and disallowing the inclusion of the company's 
Seabrook investments in rate base. The company has appealed the initial 
decision to the full Commission. 

3. The Attorney General of the Commonwealth of Massachusetts, 
et al. v. New England Power Company 

On December 6, 1983 the Utilities Division, in conjunction with certain other 
parties, filed a petition with the Federal Energy Regulatory Commission seek- 



76 P.D. 12 

ing an investigation of an accident which occurred at the New England Power 
Company's Brayton Unit 3 power plant. This accident occurred on August 26, 
1983, and resulted in an extended outage of the Brayton Unit. The F.E.R.C. 
granted the Division's petition and ordered that and hearings be held in order 
to establish whether New England Power Company should pass on to its 
customers over $50 million dollars in replacement power costs. 

D. Miscellaneous Cases 

1. Attorney General v. Department of Public Utilities 

During fiscal year 198A the Utilities Division appealed one of the D.P.U.'s 
decision to the Supreme Judicial Court. The case involved a rate case filed by 
the gas division of the Fitchburg Gas and Electric Light Company. 

In its order, the D.P.U. allowed Fitchburg to increase its gas service rates 
by approximately $2.3 million. The Division appealed both the rate of return 
which the Department allowed the company to earn on its gas investment and 
the capital structure used to calculate the return. The Division argued that the 
decision improperly allowed the company to charge its gas ratepayers for capital 
costs which were properly attributable to its electric division, particularly its 
massive investment in the Seabrook nuclear project in New Hampshire. On 
June 20, 1984, the Supreme Judicial Court concluded that the Division had 
not sustained its burden of providing that the D.P.U. erred in its decision regard- 
ing the return on equity. However, the Court remanded that portion of the 
D.P.U.'s decision which dealt with capital structure. 

2. Boston Gas Company, D.P.U. 555-C, Gas Crisis Investigation 

On December 30, 1983, the D.P.U. issued an order finding Boston Gas Com- 
pany unreasonable and imprudent for certain actions taken during the 1 980-8 1 
heating season. During that season, Boston Gas Company experienced a critical 
shortage of gas, and incurred emergency gas purchase expenses of approxi- 
mately $46.5 million. On January 21 , 1981 , the D.P.U. began its investigation 
of the shortage to determine whether Boston Gas was imprudent , and whether 
it would be liable for the additional costs. In its order the D.P.U. agreed with 
the Utilities Division that Boston Gas engaged in a number of unreasonable 
and imprudent acts, and found the Company liable for $10 million of the 
emergency gas costs. 

3. Eastern Edison Company, D.P.U. 1633 

The Utilities Division intervened in the D.P.U.'s hearings on Eastern Edison's 
request to make a capital contribution to its affiliate, Montaup Electric Com- 
pany. This capital contribution was necessary to enable Montaup to meet its 
obligations to pay for its share of Seabrook construction costs. The D.P.U. 
denied Eastern Edison's request. This case marks the first time that the D.P.U. 
has recognized that it must analyze the necessity of various construction projects 
in a financing docket where funds are being requested for construction of those 
projects. In previous financing proceedings the D.P.U. only examined the 
nature of the financing, not the underlying need and necessity of the under- 



P.D. 12 77 

lying construction project. Under the precedent established in this case, utility 
financings can become a mechanism for review of power plant construction 
projects prior to completion of those projects. 

E. Electric Fuel Clause Intervention 

Each electric utility is permitted to collect fuel and related costs through a 
fuel adjustment clause, changes in which are filed every quarter with the D.P.U. 
In addition, the D.P.U. reviews each utility's power plant performance on an 
annual basis. The Utilities Division is given a separate assessment of $75,000 
per year to enable it to participate in these cases. 

The most significant quarterly fuel charge proceeding this fiscal year involved 
Boston Edison Company. The Utilities Division intervened in this case and 
requested a 90-day extension to enable it to investigate the company'e generating 
unit efficiency. After hearings, the D.P.U. found Boston Edison unreasonable 
and imprudent in its operation of its fossil generating unit, Mystic 7. In doing 
so, the D.P.U. accepted the position advanced by the Division that the Company 
knew of the need to replace the condensor at Mystic 7 and failed to do so in 
a timely fashion. The failure to make that replacement resulted in the com- 
pany's unnecessarily purchasing $2.8 million in replacement power. The Depart- 
ment ordered Boston Edison Company to refund those costs, plus $410,000 
in interest, to its ratepayers during the period February — April, 1984. 

This represents the first time that the Department of Public Utilities has found 
a company liable for costs associated with its failure to operate a generating 
unit in accordance with its annual generating unit efficiency. 

F. Telecommunications Activities 

On January 1, 1984, the American Telephone and Telegraph Company 
(AT&T) was required to divest itself of its local operating companies, including 
New England Telephone Company. The divestiture came about as a result of 
an order issued by the United States District Court for the District of Colum- 
bia approving a settlement agreement with the United States Justice Depart- 
ment. This agreement has caused substantial changes in the structure of the 
telecommunications industry, and has the potential to cause increases in the 
rates paid by consumers of local exchange telephone service. 

These regulatory changes have raised significant issues for state regulators. 
The Utilities Division has intervened in more than 25 telephone proceedings 
conducted by the Department in the past fiscal year to protect the interests 
of local exchange ratepayers. These cases fell into three categories: first, those 
in which policy issues concerning the degree of regulation to be applied to 
telephone companies are at stake; second, those in which individual companies 
seek the D.P.U. 's approval to provide telephone service in Massachusetts; and 
third, those in which FCC actions have raised questions concerning the proper 
level and structure of cost recovery. In all these cases the Division has sought 
to guarantee the existence of continued universal telephone service at reasonable 
rates. Selected cases of major significance are described in further detail below. 



78 P.D. 12 

1 . Generic Proceeding Concerning Intrastate Competition In The 
Telephone Industry D.P. U. 1 73 1 

In December 1983 the Utilities Division petitioned the D.P. U. to investigate, 
in a generic (or industry-wide) proceeding, the question of whether to permit 
competition in the intrastate telecommunications market. In this case the Divi- 
sion's goal is to ensure that toll competition does not adversely affect the in- 
terests of local exchange ratepayers. The Division sponsored the expert 
testimony of two witnesses, who testified that the D.P.U. should impose a 
moratorium before permitting free competition. This moratorium would enable 
the D. P.U. to take certain steps which are necessary to ensure that competition 
does not result in an unjustified increase in local rates. The D.P.U.'s decision 
is expected by the end of 1984. 

2. AT&T Communications of New England, Inc., D.P.U. 1641 

In this case the D.P.U. granted the Utilities Division's Motion for Resuspen- 
sion of AT&T's intrastate tariffs until June 30, 1984. In doing so, the Depart- 
ment adopted the Division's rationale that it could suspend the tariffs and allow 
AT&T to charge the rates during the suspension period, subject to refund. This 
was critical to a review of the tariffs, since failure to grant the motion would 
have resulted in the rates taking effect on a final basis on January 1 . In addi- 
tion, the Department agreed with the Division that it has the authority to re- 
quire telephone companies to obtain a certificate of public convenience and 
necessity before operating in intrastate commerce within the Commonwealth . 
After hearings held on AT&T's tariffs in the spring of 1984, the Division and 
AT&T entered a stipulation which resulted in AT&T's reducing its intrastate 
toll rates by approximately five percent. 

3. New England Telephone and Telegraph Access Charges, 
D.P.U. 1661 

The New England Telephone and Telegraph Company filed proposed in- 
trastate "access charges," to be imposed on long distance telephone companies 
rather than on local customers' bills. The Utilities Division intervened in sup- 
port of NET's proposal , and in opposition to the position taken by AT&T Com- 
munications and other long distance companies. After numerous hearings, the 
D.P.U. issued an order adopting the Utilities Division's position and approv- 
ing NET's proposal. 



VI. WESTERN MASSACHUSETTS DIVISION 

The Western Massachusetts Division of the Department of the Attorney 
General continued to provide a wide range of legal representation for the 
Commonwealth, its agencies and citizens throughout the four Western Coun- 
ties of Massachusetts: Berkshire, Franklin, Hampden and Hampshire. 
Throughout the fiscal year the Division was responsible for an increasing 
number of referrals from most of the Bureaus and Divisions within the Depart- 
ment as well as for a number of consumer protection matters originating in 
the Western Massachusetts Division. 



P.D. 12 79 

In addition to the usual types of cases referred by the various divisions during 
the fiscal year, the Western Massachusetts Division also handled Rendition 
Hearings, Department of Public Welfare criminal prosecutions relating to 
recipient fraud, Industrial Accident Board claims hearings in the four western 
counties and personnel from the Springfield Office serve on the Board of Appeal 
on Motor Vehicle Liability Policies and Bonds. The following represents, by 
bureau and division, the active cases assigned to the Springfield Office during 
fiscal year 1984. In addition to the active cases, attorneys in the Western 
Massachusetts Division responded to 52 requests to make court appearances 
on behalf of the various divisions in Boston. These court appearances ranged 
from answering calls of the trial list to filing various pleadings and/or arguing 
various motions before the court. At these times attorneys from the Western 
Massachusetts Division will appear in court on that particular matter but not 
handle the entire case. During the course of the year nearly 100 man-hours 
were spent in court on such matters. The ability of the Western Massachusetts 
Division to respond on short notice to these requests contributes to the overall 
efficiency and effectiveness of the Department as a whole because of the sav- 
ings that result from not having to send an attorney from the Boston Office. 

Investigators assigned to the consumer protection section conducted 
numerous investigations of firms or individuals suspected of unfair and decep- 
tive practices. The investigations covered a wide range of businesses including 
but not limited to automobile sales and service, business franchise sales, rental 
listing firms advertising practices, charitable solicitations, home improvement 
firms, heating oil sales, health insurance sales and firewood sales. 

As noted in prior years odometer tampering is one of the major areas of 
concern for the Western Massachusetts Division in the consumer protection 
area. During fiscal year 1984 the Division continued investigating automobile 
dealers suspected of odometer tampering. These investigations resulted in the 
filing of civil suits against six (6) used car dealers. In conjunction with the filing 
of the civil complaints, court orders were obtained attaching the bank accounts 
of the defendants. The suits sought restitution of $121,000 and fines and 
penalties of $38,100. Two of the cases have since been concluded resulting in 
restitution of $26,800. The other cases are pending. 

The magnitude of the odometer tampering problem cannot be overstated. 
In the cases mentioned above, 44 automobiles were turned back a total of 
1 ,563,726 miles; an average of 35,550 miles per car. This means that the dealers 
stood to make profits between $500 and $1500 per automobile: monies taken 
directly from the consumer. 

In another matter, the Division brought suit against an insurance agent who 
had previously been imprisoned for bilking the elderly. In this instance the agent 
claimed he would assist the elderly clients in collecting insurance benefits and 
claims. During the solicitation, the agent said he would also help clients get 
discounts on prescriptions, eyeglasses and hearing aids, process medicare claims 
and locate nursing homes. However, a majority of the services were not listed 
in the membership contract. The court ordered restitution of $14,000 which 
was distributed to 92 elderly victims and also ordered that the defendants be 
prohibited from any form of solicitation of persons 55 years or older. 

Working in conjunction with the Public Charities Division, investigators 
were able to close down a solicitation by a professional, for profit, fundraising 



80 P.D. 12 

firm which was operating in Western Massachusetts in violation of a temporary 
restraining order. Some 130 persons who had "contributed" received refunds 
totaling $2006.00. 

In addition to investigations involving widespread patterns of deceptive prac- 
tices, the Division attempts to resolve consumer complaints where there is no 
local consumer group or where a merchant refuses to negotiate with the local 
group. 

The number of individual consumer complaints settled between July 1 , 1983 
and June 30, 1984 was 84 resulting in a savings for consumers in the amount 
of $29,836.84. 



VII. GOVERNMENT BUREAU 

The Government Bureau has four functions : ( 1 ) defense of lawsuits against 
state officials and agencies concerning the legality of governmental operations; 
(2) initiation of affirmative litigation on behalf of state agencies and the 
Commonwealth; (3) preparation of Opinions of the Attorney General; and 
(4) legal review of all newly-enacted municipal by-laws, pursuant to G.L. c.40, 
§32. 

A report of activity during fiscal year 1984 in each of these areas follows. 

A. Defense of State Agencies 

The Government Bureau defends the Commonwealth and its officials and 
agencies in litigation in state and federal courts, and, in certain cases, before 
federal administrative agencies. These proceedings typically involve challenges 
to the validity of governmental decisions, initiatives, regulations, or statutes, 
and raise important issues of administrative and constitutional law in diverse 
subject-matter areas. 

During fiscal year 1984, the Bureau opened 491 new cases and closed a total 
of 391 previously active cases. In addition, the Bureau supervised and monitored 
the trial court defense, by Department of Public Welfare attorneys, of 189 new 
welfare benefits cases. 

Government Bureau lawyers argued 13 cases before the Court of Appeals 
for the First Circuit which resulted in reported opinions during fiscal year 1984. 2 
In three of these, the Bureau represented the Department of Education in 
appeals arising from the special education obligations of local education 
authorities. The most significant of the three cases is Town of Burlington v. 
Department of Education, in which the First Circuit grappled with many of 
the difficult legal problems, ranging from the standard of judicial review to 
the availability of retroactive reimbursement, which the special education laws 
have generated. The United States Supreme Court has granted review of the 
Burlington case and it will be argued before that Court in 1985. 



2 The Government Bureau briefs and argues many more appeals in the United States Court of Appeals, the Supreme Judicial 
Court, and the Massachusetts Appeals Court than result in reported decisions. Although briefing and argument of these cases 
requires the same professional effort as any others, the issues presented in such cases are relatively insignificant or are already 
settled and, consequently, are disposed of in unreported summary decisions or by rescript opinion. Such cases are not included 
in the description of the Government Bureau's appellate decisions for this fiscal year. 



P.D. 12 81 

Another case of national significance, one of three involving the Depart- 
ment of Public Welfare this year, is Foggs v. Block. In that case the court found 
that the Department violated the due process rights of food stamp recipients 
because a notice informing them of changes in federal law was difficult to read 
or understand. The Supreme court has heard arguments in this case, renamed 
Parker v. Block, and a decision is expected in 1985. 

Three other cases decided by the First Circuit this year involved lawsuits of 
long standing, each of which attracted national attention and were before the 
Supreme Court in their earlier phases. In Bel lot ti v. Baird, the court upheld 
a denial of attorneys' fees to lawyers representing Bill Baird because they waited 
over thirty months to apply for an award under 42 U.S.C. §1988; the court, 
however, reversed the district court's denial of fees to Planned Parenthood's 
lawyers because their application was only seven months late and there was 
insufficient prejudice to the Commonwealth's interests shown. In Rogers v. 
Okin, a case involving the right of involuntarily committed mental patients 
to refuse treatment with certain drugs, the First Circuit found that state law, 
as declared by the Supreme Judicial Court in response to certified questions 
(see below), afforded greater protection to the mental patients than did federal 
law, and disposed of the case for that reason without the need to reach the 
federal questions. Finally, in Boston Chapter, NAACP v. Beecher, the case 
involving the court-ordered layoffs of senior white Boston police officers and 
firefighters to protect minority ratios achieved by affirmative action, the First 
Circuit found that the controversy was moot by virtue of the enactment of the 
so-called "Tregor Bill". The Supreme Court, however, later vacated this decision 
and ordered the Court of Appeals to reconsider the case in light of the Supreme 
Court's decision in a similar case from Memphis, Tennessee. 

In one of the more unusual cases this y ar, Maritime Underwater Surveys 
v. Unidentified, Wrecked and Abandoned Sailing Vessel, the Bureau success- 
fully argued that the federal courts had no jurisdiction to adjudicate the 
Commonwealth's sovereign claim to ownership of certain underwater ar- 
cheological resources. At issue was a salvor's claim, under admiralty laws, to 
ownership of the Whidah, a pirate ship said to be fully loaded with gold and 
other booty when it sank off Wellfleet in 1717. 

A considerable portion of the Government Bureau's resources was dedicated 
in fiscal 1984 to the litigation of cases in the United States District Court. Among 
the more significant of the many federal district court cases are those involv- 
ing the following issues: federal regulation of and monies for state foster care 
programs (Lynch v. King); various issues arising from programs to assist handi- 
capped and learning disabled children in residential or special educational 
placements of the children (e.g., Burlington v. Department of Education); 
implementation of consent decrees concerning the state institutions for the 
mentally retarded (Massachusetts Association for Retarded Citizens v. Dukakis 
and consolidated cases); the validity, under the antitrust laws, of Blue Shield's 
ban on balance billing (Kartell v. Blue Shield); affirmative action (e.g., 
Culbreath v. Dukakis); and court-awarded attorneys' fees (e.g., Grendel'sDen 
v. Larkiri). Fiscal year 1984 saw continued expansion of litigation involving 
awards of attorneys' fees under 42 U.S.C. §1988. Aggregate claims total well 
into the millions and in one case alone, Rogers v. Okin, plaintiffs' attorneys 
are seeking over $2.3 million from the Commonwealth. 



82 P.D. 12 

During the fiscal year, Government Bureau lawyers were involved in 29 cases 
decided by the Supreme Judicial Court. Among them were several significant 
cases highlighted here. 

In Rogers v. Commissioner of Mental Health, the court answered questions 
certified to it by the Court of Appeals for the First Circuit. The court's answers, 
specifying the circumstances and procedures under which persons committed 
to the care of the Department of Mental Health may be administered certain 
therapies, will have far-reaching effects in the Commonwealth's mental health 
system. In American Grain Products Processing Institute, Inc. v. Department 
of Public Health, the court vacated a lower court injunction preventing enforce- 
ment of emergency regulations designed to protect Massachusetts consumers 
from certain carcinogenic and otherwise deleterious pesticide residues in grain- 
based foods. The court ruled that the Department of Public Health was not 
bound in this case to follow the regulatory approach adopted by the federal 
government. In Massachusetts Automobile Rating and Accident Prevention 
Bureau v. Commissioner of Insurance, one of three insurance cases decided 
during the fiscal year, the Bureau successfully defended the decision of the 
Commissioner of Insurance in setting 1983 automobile insurance rates. The 
automobile insurance industry vigorously challenged those rates and sought 
an upward adjustment of approximately $90 million. The decision firmly estab- 
lished the Commissioner's broad authority to protect consumers' interests when 
establishing automobile insurance rates. 

In other significant areas of appellate activity in the SJC during fiscal year 
1984, the Bureau represented the Commissioner of Revenue in ten tax cases 
and the Department of Social Services in four cases involving the custody or 
adoption of abused or neglected children. The remaining cases involved 
representation of an assortment of state agencies, including the Department 
of Public Utilities, the Rate Setting Commission, the Boards of Registration, 
the Department of Public Welfare, the Treasurer, and the Registry of Motor 
Vehicles. 

Government Bureau lawyers also participated in 9 cases decided in the state 
Appeals Court this year. One of these cases involved issues of termination of 
parental rights; three involved personnel and civil service matters; two involved 
regulation and reimbursement of nursing homes, one arose from the denial 
of welfare benefits, and one involved questions of the licensure jurisdiction 
of a board of registration. 

B . AFFIRM A TIVE LITIGA TION 

The Affirmative Litigation Division was established in the Government 
Bureau to represent the Commonwealth and its officers and agencies when 
performance of their official duties or protection of their interests require resort 
to state or federal courts. Affirmative litigation cases which the Government 
Bureau brings may be divided into four broad, and sometimes over-lapping, 
categories: (1) advocacy litigation; (2) federal program litigation; (3) enforce- 
ment litigation; and (4) quasi-criminal litigation. The first category includes 
cases commenced on behalf of a state agency with an advocacy responsibility 
or in the furtherance of the Attorney General's independent obligation to 
advance the public interest or to protect the interest of the Commonwealth 



P.D. 12 83 

as a sovereign. The second category, litigation related to federal programs, 
continues to account for a substantial portion of the Bureau's affirmative litiga- 
tion efforts. These cases also tend to be the most significant ones in terms of 
financial value since federal government programs involve hundreds of millions 
of dollars due to the Commonwealth and its citizens. In cases of the third 
category, the Bureau performs the traditional enforcement function of the 
Attorney General by commencing suit on behalf of state regulatory and licensing 
agencies . The final category involves suits for civil recovery of funds criminally 
obtained from state agencies. It serves as a supplement to normal criminal prose- 
cution. The following paragraphs contain brief descriptions of significant or 
representative cases litigated during the fiscal year. 

The Bureau participated either as a plaintiff or as amicus curiae in several 
cases in which municipalities used their zoning ordinances to frustrate efforts 
to establish small residential facilities to provide care and treatment for mentally 
retarded or emotionally disturbed persons. These actions, usually initiated on 
behalf of the Department of Mental Health, were designed to further the public 
policy of mainstreaming retarded or emotionally disturbed citizens by max- 
imizing their opportunity to participate in ordinary life. In another example 
of advocacy litigation, the Government Bureau continued its practice of bring- 
ing actions against nursing homes and other health care institutions to obtain 
appointment of receivers to take over their operation. In Attorney General 
v. Avalon School, Inc., the Bureau initiated a receivership for a group of schools 
in Berkshire County which provided special education to approximately two 
hundred special needs children. The receivership was necessary to prevent finan- 
cial collapse and the resulting harm to the children residing at the schools. 

An example of federal program litigation is Commonwealth v. Auchter, in 
which the Bureau filed a petition for review of regulations issued by the Secretary 
of Labor which would have preempted Massachusetts' recently enacted right 
to know statute. The case is now pending in the United States Court of Appeals 
in Philadelphia. Another example of federal program litigation is New Mexico, 
et al. v. Heckler, an action commenced by the Government Bureau in concert 
with several other states against the Secretary of Health and Human Services 
seeking to restrain her from reducing Massachusetts Medicaid reimbursement 
because of projected excessive error rates. This case is a successor to one 
previously brought which induced the Secretary to withdraw her original error 
rate regulations. The case is now pending in the United States District Court 
for the District of Columbia. A somewhat similar case now pending in the 
United States District Court for the District of Massachusetts is Commonwealth 
v. Heckler, in which the Bureau is seeking to overturn a decision of the Grant 
Appeals Board disallowing $6.6 million in Medicaid reimbursement for services 
provided to patients at intermediate care facilities for the mentally retarded. 

A case which represents both advocacy and federal program litigation is the 
continuing case of Avery v. Heckler in which the Bureau intervened in a federal 
district court action on behalf of the Commonwealth, its disabled citizens, and 
the Department of Public Welfare. The original purpose of that intervention 
was to halt the federal government's policy of forcing the state to use improperly 
strict rules for reviewing payments of Social Security disability benefits and 
to require the federal government to halt its practice of ignoring adverse legal 
precedents. Now that that result has been achieved by statute, the Bureau is 



84 P.D. 12 

using A very to ensure the proper implementation of that statute, both prospec- 
tively and retroactively. Continued prosecution of Avery is designed to benefit 
both the disabled, many of whom were improperly denied disability benefits 
due them, and the Commonwealth itself which has to pay General Relief to 
some of those who have been denied such federal benefits. The United States 
District Court has recently remanded the case to the federal govenment to notify 
improperly terminated persons and to restore the benefits due them. 

As in past years, the Government Bureau brought several lawsuits to enforce 
the licensure requirements, regulations, and orders of state agencies. For 
example, Department of Education v. Ayer, which also is an advocacy action, 
was brought to require the Town of Ayer to provide special education to a child 
whose legal guardian resided in the town. A preliminary injunction was issued 
and Ayer has since complied with its obligations. Another example of the 
Bureau's role in enforcing statutory duties is Board of Education v, Lynn, in 
which the Bureau filed suit against the City of Lynn to prevent a threatened 
closing of the Lynn public schools. The Superior Court issued a preliminary 
injunction and a final declaration requiring Lynn to provide and to fund a full 
180 days of school as required by statute and regulation. The Bureau has also 
continued to assist the Department of Revenue's stepped up tax enforcement 
program by filing several seizure actions. In those cases, the Bureau, on behalf 
of the Commissioner of Revenue, files actions seizing the property of businesses 
with large unpaid state tax bills after other, less drastic efforts at tax collection 
have failed. 

Another case, which combines enforcement with federal program litigation, 
is Northeast Bancorporation v. Board of Governors of the Federal Reserve 
System, in which the Bureau intervened in the United States Court of Appeals 
in New York in a case involving a proposed bank merger. The case involves 
the constitutionality of the new Massachusetts interstate banking act which 
limits acquisition of Massachusetts banks to banks located in New England. 
This statute has been challenged by other banks, principally several very large 
banks located in New York. The Court of Appeals upheld the Massachusetts 
statute and the case is now before the United States Supreme Court on an 
application for certiorari. 

C. OPINIONS AND BY-LA WS DIVISION 

(1) Standards for Issuing Opinions 

The Attorney General is authorized by G.L. c. 12, §3 to render legal advice 
and opinions to state officers, agencies, and departments on matters relating 
to their official duties. 

Following in large part the established practice of previous Attorneys 
General, opinions have been given only to state agencies, departments, and 
the officials who head those entities. Opinions are not rendered to individual 
employees of a state agency; questions posed by county or municipal officials 
or by private persons or organizations are not answered. 

The questions considered in legal opinions must have an immediate, concrete 
relation to the official duties of the state agency or officers requesting the 
opinion. In other words, hypothetical or abstract questions or questions which 



P.D. 12 85 

ask generally about the meaning of a particular statute, lacking a factual under- 
pinning, are not answered. Opinions are not offered on questions raising legal 
issues which are or soon will be the subject of litigation or that concern collec- 
tive bargaining. Questions relating to the wisdom of legislation or administrative 
or executive policies are not addressed. Generally federal statutes are not con- 
strued and the constitutionality of state or federal legislation is not determined. 

(2) Procedures for Requesting Opinions 

In an effort to make the opinion-rendering function as effective, helpful, 
and efficient as possible, the Opinions Division has established a number of 
procedural guidelines to govern opinion requests. 

Opinion requests from state agencies (or heads of state agencies) which come 
under the jurisdiction of a cabinet or executive office must first be sent to the 
appropriate executive secretary for his or her consideration. If the secretary 
believes the question raised is one which requires resolution by the Attorney 
General, the secretary then requests the opinion on behalf of the agency or 
submits the agency's request with his or her approval noted. 

There are two reasons for this rule. The first concerns efficiency. Opinions 
of the Attorney General, because of their precedential effect, are thoroughly 
researched and prepared. If a question can be satisfactorily resolved more 
quickly within the agency or executive office— by agency legal counsel or 
otherwise — everyone is better served. The second reason relates to the internal 
workings of the requesting agency and its executive office. It would be inap- 
propriate for this Department to be placed in the midst of an adminis- 
trative or even legal dispute between these two entities. The rule, therefore, 
helps to ensure that the agency and its executive office speak with one voice 
insofar as Opinions of the Attorney General are concerned. 

If the agency or executive office requesting an opinion has a legal counsel, 
counsel should prepare a written memorandum explaining the agency's posi- 
tion on the legal question presented and the basis for it. The memorandum 
should accompany the request. 

When an agency request raises questions of direct concern to other agencies, 
governmental entities, or private individuals or organizations the Opinions Divi- 
sion solicits the views of such interested parties before rendering an opinion. 

The issuance of informal opinions is strongly discouraged. Informal opinions 
are often relied upon as if they were formal Opinions of the Attorney General. 
In a number of instances, this reliance has been seriously misplaced. As a result, 
the issuance of informal opinions is strictly limited to situations of absolute 
necessity. 

(4) Synopses of Opinions 

Approximately 163 requests for opinions of the Attorney General were 
received during fiscal year 1984. Eight formal opinions of the Attorney General 
were rendered, some of which are summarized below. 

The Joint Legislative Committee on Insurance, was advised, pursuant to 
G.L. c. 12, §9, that certain bills then pending before the Committee, which would 
prohibit insurers from discriminating on the basis of race, color, religion, sex, 
marital status, or national origin, would not impermissibly affect pre-existing 



86 P.D. 12 

insurance contracts and would not affect the membership policies of fraternal 
benefit societies. 

In two opinions, one requested by the Secretary of the Executive Office of 
Administration and Finance and one by the Secretary of the Executive Office 
of Energy Resources, the conclusion was reached that certain individuals work- 
ing for the Commonwealth on a voluntary or on a contractual basis might be 
considered "public employees" for purposes of the immunity and indemnifica- 
tion provisions of the Massachusetts Claims and Indemnity Act, G.L. c.258. 
However, those opinions further indicated that whether a particular individual 
would be covered by the Act would have to be determined on a case-by-case 
basis. 

Two opinions concerned statutory notice and hearing requirements. In 
response to a request from its Commissioner, the Department of Public Works 
was advised that the Department is required to publish notices inviting pro- 
posals for public construction projects in the Central Register. The Secretary 
of the Executive Office of Labor was advised that, although the Industrial 
Accident Board is not required to permit televising of its meetings and hear- 
ings, the Board does have the authority to do so. 

In the area of public protection, an opinion to the Commissioner of the 
Department of Environmental Management, concluded that certain park 
officers are not authorized to carry firearms. In response to a request from 
the Secretary of Consumer Affairs and Business Regulation, the Common- 
wealth's recently enacted "Lemon Law," G.L. c.90, §7Nl/2, was construed as 
applying to motor vehicles delivered after January 1, 1984, the effective date 
of the law, even if they were ordered prior to that date. 

(3) By-Laws 

Town by-laws, home rule charters, and amendments thereto are reviewed 
and must receive approval of the Attorney General prior to becoming effec- 
tive. The review function is performed in the Government Bureau. During the 
fiscal year ending June 30, 1984, the Bureau reviewed over 1 ,208 by-laws and 
seven home rule charter actions. 

By-laws adopted by town meetings are generally non-controversial in nature 
and only of local interest. However, each year local enactments come forth 
that represent regional concerns or matters of general public policy. 

During fiscal year 1984, the most popular subject of general interest came 
from the resort areas of the state where there were serious efforts to ban or 
limit time-sharing of residential units. Another item of general concern was 
the desire to ban activity connected with nuclear weapons. There were a number 
of resolutions adopted, but these are not by-law actions subject to the Attorney 
General's review. Two such actions adopted at 1983 annual town meetings were 
reviewed and disapproved during fiscal year 1984. Two other town meeting 
votes at 1984 annual town meetings were forwarded for appropriate action 
during fiscal year 1985. 

As in other years, attention has to be focused on whether or not statutory 
procedures have been followed in the adoption of general and zoning by-laws. 
It is easier to correct these mistakes by disapproval and constructive comments 
that enable towns to avoid such pitfalls in the future rather than to become 



P.D. 12 87 

involved in litigation. One possible cause of these errors is the constant turn- 
over in town officers, particularly among town clerks and members of plan- 
ning boards, who assume their duties without being adequately briefed by their 
predecessors. 

July 14, 1983 

Frank T. Keefe, Secretary 

Executive Office for Administration & Finance 

State House 

Boston, Massachusetts 02133 

Dear Secretary Keefe: 

You have requested my opinion as to whether certain individuals working 
on a volunteer basis for the state are "public employees" within the meaning 
of the Massachusetts Claims and Indemnity Act, G.L. c. 258, §§ 1 et seq., 
inserted by Si. 1978, c. 512, § 15. Specifically, you have expressed an interest 
in determining the status of law students who work as volunteers in the Office 
of the Counsel to the Governor, volunteer workers at the state hospitals, and 
volunteer drivers for the Governor. The purpose of your question is to deter- 
mine whether the Commonwealth may be held liable for the tortious acts of 
such volunteers under G.L. c. 258, § 2, 1 and whether such workers are afforded 
immunity from indemnification for liability under G.L. c. 258, §§ 2 and 9. 2 

I have concluded that individuals in the three general categories of volunteers 
named may be public employees for the purposes of G.L. c. 258, §§ 1 et seq. 
However, whether a particular individual is a public employee will have to 
be determined on a case-by-case basis. As will be discussed more fully below, 
this conclusion is based on the language of the statute and the meaning of 
the term "employee" within the context of statutory and common law. 

A "public employee" is defined in G.L. c. 258, § 1, to include "elected or 
appointed, officers or employees of any public employer, whether serving full 
or part-time, temporary or permanent, compensated or uncompensated, and 
officers or soldiers of the military forces of the Commonwealth" (emphasis 
added). 3 It is therefore clear from the plain language of the statute that public 
employee status may be afforded to those who work as state employees without 
compensation. In addition, an examination of the legislative history of this 
definition reveals that the words "compensated or uncompensated" were added 



' General Laws c. 258, §2, provides, in pertinent part, that "[p]ublic employers shall be liable for injury or loss of property or personal 
injury or death caused by the negligent or wrongful act or omission of any public employee while acting within the scope of 
his office or employment, in the same manner and to the same extent as a private individual under like circumstances." 

2 General Laws c. 258 § 2, further provides that "no ... public employee shall be liable for any injury or loss of property or per- 
sonal injury or death caused by his negligent or wrongful act or omission while acting within the scope of his office or employment ." 

General Laws c. 258, § 9, provides, in pertinent part, that "[pjublic employers may indemnify public employees from personal 
financial loss and expenses . . . arising out of any claim, action, award, compromise, settlement or judgment by reason of an 
intentional tort, or by reason of any act or omission which constitutes a violation of the civil rights of any person under any 
federal or state law ; if such employee or official at the time of such intentional tort or such act or omission was acting within 
the scope of his official duties or employment." 

3 G.L. c258, § 1, defines the term "public employer" to include "the commmonwealth . . . and any department, office, commis- 
sion . . . institution, agency or authority thereof which exercises direction and control over the public employee ..." There 
is no question that the Governor is a "public employer" within the meaning of this definition. In addition, it is clear that state 
hospitals are "public employers" as institutions of the Commonwealth that exercise control over "public employees." See, e.g. . 
G.L. c. 6A, § 16, and c. 19, §§ 1 and 14A. 



88 P.D. 12 

to the definition of "public employee" in the Senate during the drafting process, 
see Mass. S. 1647 (1978), thereby signifying the clear intent of the legislators 
that whether an individual is compensated or uncompensated is not deter- 
minative of his status as a public employee under c. 258. 4 In construing a statute, 
the plain language and legislative intent are controlling. Hoffman v. 
Howmedica, Inc., 373 Mass. 32, 37 (1977); Baker Transport, Inc, v. State 
Tax Commission, 371 Mass. 872, 877 (1977). Thus, G.L. c. 258, § 1, in defin- 
ing the term "public employee," answers the threshold question of whether 
a volunteer may be a "public employee" within the meaning of G.L. c. 258. 

However, the fact that an individual works as a volunteer for the state does 
not, in and of itself, qualify him as a "public employee." To be categorized 
as a "public employee," a volunteer must satisfy the additional requirement 
of being employed by a public employer who "exercises direction and control" 
over him. G.L. c. 258, § 1. In the absence of such direction and control, a 
volunteer would properly be viewed as an independent contractor rather than 
an employee of the state. Bell v. Sawyer, 313 Mass. 250, 251 (1943); 
McDermott's Case, 283 Mass. 74, 76 (1933); Hodges v. Doctors Hospital, 141 
Ga. App. 649, 234 S.E.2d 1 16, 1 17 (1977). Since no definition of the phrase 
"direction and control" is contained in G.L. c. 258, this phrase must be con- 
strued in accordance with its "usual and accepted" meaning as derived from 
its use in other legal contexts such as statutory and common law. Common- 
wealth v. Zone Book, Inc., 372 Mass. 366, 369 (1977); 1978/79 Op. Atty. 
Gen. No. 6, Rep. A.G., Pub. Doc. No. 12 at 107 (1979). 

Because the statutes are similar both in language and spirit, the Massachusetts 
courts have looked to cases construing that the Federal Tort Claims Act, 28 
U.S.C. §§ 2671 et seq., for guidance in interpreting G.L. c. 258. Vasys v. 
Metropolitan District Commission, 387 Mass. 51, 54 (1982). 5 The determin- 
ing factor in deciding whether an individual is an employee as opposed to an 
independent contractor, for federal tort claims purposes, is rooted in com- 
mon law and centers on the right of the government to control the detailed 
physical performance of the individual duties. United States v. Orleans, 425 
U.S. 807, 814 (1976); Perez v. United States, 594 F.2d 280, 284-85 (1st Cir. 
1979); Wollman v. Gross, 484 F.Supp. 598, 601 (D.S.D. 1980). 

Similarly, the common law test used in this Commonwealth to determine 
employee status is the control which may be exercised over the performance 
of the work of an individual. Brigham 's Case, 348 Mass. 140, 141 (1964). The 
individual is considered to be an employee if, in the actual performance of 
his work, the individual is "bound to obedience and subject to direction and 
supervision as to details." Id. at 142; see also 1961/62 Op. Atty. Gen., Rep. 
A.G., Pub. Doc. No. 12 at 179 (1962). When speaking of control, the courts 
have acknowledged that an individual need not be subjected to slavish control 
to be adjudged an employee, for it is the right to control as opposed to the 



4 In a previous opinion I determined that volunteers working under the control and supervision of the state were not employees 
for the purposes of G.L.c. 12, § 3B,and were therefore not allowed indemnification while driving state-owned vehicles, 1976/77 
Op. Atty. Gen. No. 27, Rep. A.G., Pub. Doc. No. 12 at 145 (1977). Since that opinion interpreted a different statute, it is not 
controlling here. 

5 The federal act defines the term "Employee of the Government" as "officers or employees of any federal agency, members of 
the military or naval forces of the United States, and persons acting on behalf of a federal agency in an official capacity, temporarily 
or permanently in the service of the United States, whether with or without compensation," 28 U.S.C. § 2671. 



P.D. 12 89 

exercise of control that is pivotal. McDermott's Case, 283 Mass. at 76; see 
also Bell v. Sawyer, 3 1 3 Mass. at 25 1 -52; Khoury v. Edison Electric Illuminating 
Company, 265 Mass. 236, 239 (1928). 

This factor, as it applies to G.L. c. 258, was addressed in a recent Attorney 
General's Opinion, where I concluded that when a traditional consultant rela- 
tionship exists between a physician and the Commonwealth, the physician 
is not a "public employee" within the meaning of the statute, since such an 
individual is operating without the supervision and control necessary for 
employee status. 1978/79 Op. Atty. Gen. No. 6, Rep. A.G., Pub. Doc. No. 
12 at 107-08 (1979). 

In addition to the right to control, other factors considered by the courts 
in determining the employee status of an individual have included the intended 
duration of employment, the degree of supervision required or exercised, the 
place of employment, and the ownership of equipment. 1978/79 Op. Atty. 
Gen. No. 6 at 107; Marino v, Trawler Emil C, Inc., 350 Mass. 88, 96 (1966); 
Galloway's Case, 354 Mass. 427, 430(1968); Bellv. Sawyer, 313 Mass. at 25 1-52; 
McDermott's Case, 283 Mass. at 76. 

Application of these factors to the facts you have described with respect 
to the categories of volunteers in question here leads me to conclude that, 
in general, individuals within these categories may be public employees within 
the meaning of c. 258. However, whether a particular individual is covered 
by c. 258 will depend upon the precise duties and responsibilities of the 
individual in question and, therefore, must be determined on a case-by-case 
basis. See 1978/79 Op. Atty. Gen. No. 6 at 108. 

In particular, the degree of direction and control exercised over these 
categories of volunteers by their employers is crucial in determining whether 
or not they are public employees. As you have described the duties of these 
categories of volunteers, they either work in a government facility or, in the 
case of the volunteer drivers, use equipment owned by the state. In addition, 
these individuals are employed for an indefinite period of time, unlike an 
independent contractor whose employment would typically terminate at the 
completion of the project for which he was hired. 6 

More significantly, the degree of supervsion exercised over the work of the 
volunteers described may also warrant their classification as public employees. 
In the case of law students who work as volunteers during the summer months 
for the Governor's Counsel, you have informed me that their work assignments 
are determined and supervised by the Counsel to the Governor. Whether or 
not a particular student would be covered by c. 258 depends on the extent 
to which he is directed and aided as to the details of his work. If he is given 
the responsibility to accomplish an agreed result and to control the means 
to that result, as would an independent contractor, then he would not be a 
public employee within the meaning of c. 258. Cf. Brigham's Case, 348 Mass. 
at 142; Bell v. Sawyer, 313 Mass. at 25 1-52; McDermott's Case, 283 Mass. at 76. 

Volunteers who work at state hospitals also receive their work assignments 
from state officials and are supervised in their work by the officials of the 



6 In the case of summer legal interns, their fixed period of employment is dictated not by any specific project on which they are 
working, but rather on the length of time the summer intern program is offered by the Commonwealth. 



90 P.D. 12 

hospital. To the extent that their employers have the right to control the manner 
in which their assignments are carried out, such volunteers would be public 
employees. 

Those volunteers who drive for the Governor do so in vehicles owned by 
the state and only with the approval of the Governor. The volunteers drive 
the Governor on official trips, all arrangements being made through the 
Governor's scheduling office, which controls and supervises the details of the 
trip. Again, while these facts indicate that volunteer drivers may, in some situa- 
tions, be public employees under c. 258, whether a particular driver is a public 
employee must be determined on a case-by-case basis, depending on the precise 
relationship between such an individual and his employer in a particular 
situation. 

The number of hours the volunteers work and/or the regularity with which 
they work varies with each category of volunteer described. 7 It is my opinion 
that the number of hours worked is not necessarily determinative of whether 
these individuals are public employees. General Laws 258, § 1, expressly in- 
cludes those working on a part-time basis in its definition of "public employee," 
and the relevant provisions of the statute apply only to tortious conduct 
occurring within the scope of an individual's employment. G.L. c. 258, §§ 
2 and 9. However, if a particular individual works only occasionally and for 
a limited period of time, he may be properly viewed as an independent con- 
tractor rather than a public employee. 

In sum, as I have previously stated, the broad range of volunteer relation- 
ships with the Commonwealth necessitates a case-by-case analysis in deter- 
mining public employee status, since "it is the substance of the relationship 
rather than the formal label attached to it which controls the determination 
of one's status as an employee." 1978/79 Op. Atty. Gen. No. 6 at 108. Apply- 
ing this approach to the general categories of volunteers you have described, 
I am of the opinion that to the extent that the performance of services rendered 
by the volunteers described are subject to the direction and control of their 
state supervisors both as to what shall be done and how it shall be done, these 
volunteers may be "public employees" for the purpose of the Massachusetts 
Claims and Indemnity Act and, accordingly, may be immune from liability 
and entitled to indemnification under the conditions and to the extent provided 
in the statute. However, a determination of whether a particular individual 
within these general categories is a public employee will have to be made on 
a case-by-case basis. 

Very truly yours, 

FRANCIS X. BELLOTTI 

Attorney General 



7 You have informed me that the law student volunteers work full-time during the summer months; the state hospital volunteers 
typically work once a week for several hours; while the volunteer drivers usually work during the evening hours or on the weekends. 



P.D. 12 91 

November 15, 1983 

Sharon M. Pollard, Secretary 
Executive Office of Energy Resources 
1500 Saltonstall Building 
100 Cambridge Street 
Boston, Massachusetts 02202 

Dear Secretary Pollard: 

You have asked whether certain persons who provide services to the Executive 
Office of Energy Resources (EOER) on a contractual basis and who are paid 
from a subsidiary account coded "03" in the expenditure code manual are "public 
employees" within the meaning of the Massachusetts Claims and Indemnity 
Act, G.L. c. 258, §§ 1, etseq., inserted by St. 1978, c. 512, § 15. The purpose 
of your question is to determine whether these individuals would be person- 
ally liable for injury or property damage arising out of their use of state vehicles 
and, further, whether the Commonwealth would be authorized to indemnify 
such individuals in the event of such liability. 

I believe that the particular workers whom you have described as providing 
services under "03" (consultant) contracts are covered by the immunity and 
indemnification provisions of G.L. c. 258, §§ 2 and 9, by virtue of their par- 
ticular employment relationship with the Executive Office of Energy Resources. 
This belief is based upon determination that these workers are "public 
employees" within the meaning of G.L. c. 258, § 1. Although I would con- 
clude that the described consultants are public employees, their immunity from 
liability and eligibility for indemnification for losses or injuries arising from 
their operation of state vehicles would depend upon the particular circumstances 
of any accidents in which they are involved as well as other considerations 
discussed below. Because such factual inquiries are beyond the scope of an 
Opinion of the Attorney General, it is not only unnecessary for me to rule 
unequivocally on the status of your "03" employees, but impossible for me 
to give you a categorical "yes or no" answer to your questions. 

My opinion is based primarily upon the terms of the Massachusetts Claims 
and Indemnity Act , enacted by the General Court in 1 978 . General Laws chapter 
12, section 3B, which previously provided limited indemnification for state 
employees driving state-owned vehicles, was repealed in 1978 by the enactment 
of the Massachusetts Claims and Indemnity Act, St. 1978, c 512, § l. 1 Under 
G.L. c. 258, §§ 2 and 9, a public employee may now be indemnified for or 
immune from tort liability for automobile accidents under the conditions and 



1 It should be noted that under the present version of G.L. c. 258 such immunity or indemnification that is provided public 
employees involved in motor vehicle accidents is no longer limited to the accidents involving state vehicles. 



Q : p.d. 12 

to the extent provided by those sections. 2 The question of an individual con- 
sultant's liability and the authority of the Commonwealth to indemnify him 
in the event of an automobile accident therefore rests upon a determination 
of that individual's status as "public employee" under G.L. c. 258. 

Prior to the extensive statutory revisions of 1978, Attorneys General typically 
viewed the consultant as a non-employee, on the grounds that the supervision 
and control necessary for employee status were absent in a typical consultant 
relationship, in which the consultant possesses a level of expertise that would 
preclude supervision and review by a superior. 1966 Op. Atty. Gen. No. 26, 
Rep. A.G., Pub. Doc. No. 12 at 71 (1966); 1976/77 Op. Atty. Gen. No. 27, 
Rep. A.G., Pub. Doc. No. 12 at 145 (1977). In a more recent opinion, which 
post-dated the 1 978 enactment , I considered the issue of whether certain physi- 
cians hired under "03" consultant contracts were employees within the mean- 
ing of G. L . c . 258 and concluded that a consultant's status as a public employee 
must be determined on a case-by-case basis . Similarly, a case-by-case analysis 
was recently employed to determine whether certain volunteers were public 
emplovees for the purposes of G.L. c. 258. 1979/80 Op. Atty. Gen. No. 6, 
Rep. A.G., Pub. Doc. No. 12 at 106 (1979); 1983/84 Op. Atty. Gen. No. 1, 

Rep. A.G., Pub. Doc. No. 12 at (1983). Those two opinions establish 

that under the Claims and Indemnity Act in its current form, the label attached 
to the employment relationship is not dispositive of the issue. Rather, it is 
substance of the relationship which is determinative of employee status. 3 

In those opinions, I articulated the means by which a determination should 
be made as to the employee status of a state worker for purposes of G.L. c. 
258. The statute itself defines the term "public employee" to include "elected 
or appointed, officers or employees of any public employer." G.L. c. 258, 
§ 1. The term "public employer" is defined in the same section of the statute 
to include "the Commonwealth and any department, office, commission . . . 
institution, agency or authority thereof which exercises direction and control 
over the public employee." Since no definition of the phrase "direction and 
control" is contained in the statute, traditional common law principles must 
be utilized to determine whether an individual enjoys public employee status. 

The common-law test used to determine employee status focuses primarily 
on the degree of control which may be exercised over the individual in the per- 
formance of his work. Brigham's Case, 348 Mass. 140, 141 (1964). In addi- 
tion, other factors may be considered in determining the employee status of 

2 General Laws chapter 258, section 2, provides, in pertinent part, that "no . . . public employee . . . shall be liable for any injury 
or loss of property or personal injury or death caused by his negligent or wrongful act or omission while acting within the scope 
of his office or employment." 

It further provides that 

[p]ubbc employers shall be liable for injury or loss of property or personal injury' or death caused by the negligent 
or wrongful act or omission of any public employee while acting within the scope of his office or employment , 
in the same manner and to the same extent as a private individual under like circumstances. 

General Laws chapter 258, section 9, provides, in pertinent part, that 

[pjublic employers may indemnify public employees from personal financial loss and expenses . . . arising out 
of any claim, action, award, compromise, settlement or judgment by reason of an intentional tort, or by reason 
act or omission which constitutes a violation of the civil rights of any person under any federal or state 
law; if such employee or official at the time of such intentional ton or such act or omission was acting within 
the scope of his official duties or employment. 

3 For example, in a case where a consulting physician is in fact functionally indistinguishable from a physician hired under a 
traditional employment contract, the provisions of G.L. c. 258 would applv. 1979/80 Op. Attv. Gen. No. 6, Rep. A.G., Pub. 
Doc. No. 12 at 106. 



P.D. 12 93 

an individual, including the intended duration of employment, the degree of 
skill required for performance, the place of employment, and the ownership 
of equipment. Marino v. Trawler Emil C, Inc., 350 Mass. 88, 96 (1966); 
Galloway's Case, 354 Mass. 420, 430 (1968); Bell v. Sawyer, 313 Mass. 250, 
251-52 (1943); McDermott's Case, 283 Mass. 74, 76 (1933). Although the 
number of hours an individual works is not a determinative factor, an individual 
who works only occasionally and for a limited period of time may be considered 
an independent contractor rather than a public employee. 1983/84 Op. Atty. 
Gen. No. 1, Rep. A.G., Pub. Doc. No. 12 at (1983). However, the deter- 
minative factor remains the employer's right to control the manner in which 
the individual's assignments are carried out. 4 Khoury v. Edison Electric 
Illuminating Co., 265 Mass. 236, 230 (1928). The means of compensation is 
not dispositive of the right of control. McDermott's Case, 283 Mass. at 75. 
Therefore, the fact that a consultant is paid out of an "03" subsidiary account 
is not pivotal in determining the individual's employee status. 1 979/80 Op. Atty. 
Gen. No. 6, Rep. A.G., Pub. Doc. No. 12 at 107 (1979). 

In an effort to provide you with meaningful legal advice, I have applied this 
analysis to the description you have provided of the duties and responsibilities 
of the consultants employed by EOER. Were it necessary to reach this issue, 
I would conclude that these particular workers are public employees within 
the meaning of G.L. c. 258. Although several factors are relevant, my deter- 
mination as to public employee status would be based mainly upon the degree 
of direction and control exercised over these individuals. In particular, you 
have informed me that seventeen workers under "03" consultant contracts are 
assigned office space within EOER's offices. They are provided office sup- 
plies and support services including the use of state vehicles for field work. 
More significant, however, is the degree of control which the supervisor of 
these consultants exercises over their work. These individuals are assigned pro- 
gram management or supervisory tasks in connection with specific programs 
funded by the state or federal government. Their specific projects include finan- 
cial review, site visits, administrative review of contracts, and policy planning. 
In all of these tasks, they are under the direction and supervision of an EOER 
employee. They may make day-to-day policy and administrative decisions; 
however, these decisions are reviewed by their supervisors on a weekly, often 
daily, basis. Although these consultants are specialists and therefore possess 
a degree of expertise in their fields, 5 their work is clearly subject to the supervi- 
sion of other EOER employees. I would therefore conclude that the requisite 
degree of control is present to afford these individuals public employee status 
under G.L. c. 258. 

Still, whether these consultants would be afforded immunity from or indem- 
nification for liability arising from their operation of state vehicles would 
depend on the circumstances under which such liability arose. Both the 
immunity afforded by G.L. c. 258, § 2, and the indemnification allowed under 
G.L. c. 258, § 9, apply only where the tort is committed while the employee 

4 Under G.L. c. 12. § 3B, the degree of supervision and control exerted over the individual by an officer or employee of the state 
was also determinative of his employee status. 1976/77 Op. Arty. Gen. No. 2", Rep. A.G., Pub. Doc. No. 12 at 145 (1977). 

5 You have informed me that these individuals are employed as designers, architects, and engineers. 



94 P.D. 12 

is acting within the scope of his official duties or employment. G.L. c. 258, 
§§ 2, 9. See generally, Wormstead v. Town Manager of Saugus, 366 Mass. 
659 (1975); Bettis v. United States, 635 F.2d 1 144 (5th Cir. 1981). In addition, 
the immunity afforded by G.L. c. 258, § 2 applies only to nonintentional torts 
and is conditioned upon the reasonable cooperation of the employee in the 
defense of any action brought against the public employer under that chapter. 
It should also be noted that the indemnification permitted by G.L. c. 258, 
§ 9, is not automatic, but rather is left to the discretion of the public employer, 
and the amount of indemnification may not exceed $1 million in any case. 
In sum, the consultants you have described appear to be under the direction 
and control of their superiors in the performance of their work, and as such 
should be considered public employees for the purpose of G.L. c. 258. These 
individuals may therefore be immune from and indemnified for liability aris- 
ing from motor vehicle accidents under the conditions and to the extent pro- 
vided by the statute. Whether they would be afforded the protection of such 
immunity or indemnificaton in a particular case involving the operation of 
a state vehicle, however, remains subject to a case-by-case analysis which is 
beyond the scope of an Opinion of the Attorney General. 

Very truly yours, 

FRANCIS X. BELLOTTI 

Attorney General 



January 26, 1984 

Robert T. Tierney, Commissioner 
Department of Public Works 
100 Nashua Street 
Boston, Massachusetts 02114 

Dear Commissioner Tierney: 

You have requested an opinion as to whether G.L. c. 29, § 8A, requires the 
Department of Public Works to publish notices inviting proposals for horizontal 
construction projects in the Central Register. 1 By "horizontal construction," 
you refer to the construction of highways, bridges, sewers, utilities, and public 
works. 2 I answer your question "yes" and base this conclusion first on a con- 
sideration of the plain meaning of the statute, then its legislative history, and 
finally its overall purpose. 

You have informed me that this question arose during discussions of the 
Chapter 579 Task Force regarding proposals for amendments to chapter 579 



1 The Central Register, published weekly pursuant to G.L.c. 9, §20A, and 950C.M.R.§ 21. 00, lists notices of contracting oppor- 
tunities offered by public agencies and authorities of the Commonwealth. 

2 "Vertical construction," in contrast, generally refers to the construction of buildings. 



P.D. 12 95 

of the Acts of 1 980. 3 One such proposal submitted by the Task Force's Com- 
mittee on Bidding Requirements would consolidate the advertising requirements 
for all construction contracts let by public agencies. This proposed amend- 
ment to chapter 579 would apply the same advertising requirements to all public 
agencies, including the Department of Public Works, for both horizontal and 
vertical construction contracts, and would utilize the Central Register as the 
primary vehicle for advertising. 4 

During the discussions of the Task Force, a controversy arose as to whether 
G.L. c. 29, § 8A, presently requires the Department of Public Works to publish 
notices inviting bids for horizontal construction projects in the Central 
Register. 5 The Department of Public Works has never published notices inviting 
bids for horizontal construction projects in the Central Register; rather, it has 
advertised in newspapers pursuant to G.L. c. 81, § 8. 6 The Task Force con- 
cluded that the law is unclear as to whether the Department of Public Works 
is subject to the requirements of G.L. c. 29, § 8A, orG.L. c. 81, § 8, or both. 7 
In order to resolve this controversy, you have requested the present opinion. 

Given this factual background, I will first consider the plain meaning of the 
statute. On its face, the language of G.L. c. 29, § 8A, indicates that horizontal 



3 Chapter 579, entitled "An Act to Improve the System of Public Construction in the Commonwealth," was enacted in order to 
remedy problems involved in the system of awarding contracts for the design and construction of public buildings which were 
uncovered by the Special Commission Concerning State and County Buildings (the Ward Commission), established by the General 
Court in April 1978. 

The Chapter 579 Task Force was established by the Inspector General in May 1982 in order to examine proposed changes in 
the provisions of chapter 579. The Task Force was composed of nine committees which studied legislative and administrative 
proposals to remedy problems in the statute. Two of these committees, the Committee on Bidding Requirements and the Com- 
mittee on Horizontal Construction, reviewed the requirements for advertisements of bids for both vertical and horizontal con- 
struction projects. See Final Report of the Chapter 579 Task Force at 19-25 (February 1, 1983). 

4 Proposed section 44J of chapter 149 of the General Laws provides, in pertinent part: 

No public agency or authority of the Commonwealth or any political subdivision thereof shall award any con- 
tract for the construction, reconstruction, alteration, repair, development, installation, maintenance, or demoli- 
tion at public expense of any building, road, bridge or other physical property, if competitive bids are required 
for such contract pursuant to section forty-four A of this chapter or section thirty-nine M of chapter thirty, 
unless a notice inviting bids therefor . . . shall also have been published ... in the central register published 
by the state secretary pursuant to section twenty of chapter nine. . . . 

See Final Report of the Chapter 579 Task Force at 100, 103, 191-92. 
5 Final Report of the Chapter 579 Task Force at 107. 

6 Section 8 of chapter 81 of the General Laws provides, in pertinent part: 

The department [of Public Works], when about to construct a state highway, shall advertise in two or more 
newspapers published in each county in which the highway lies, and in three or more daily newspapers pub- 
lished in Boston, for sealed proposals or the construction of such highway, stating the time and place for open- 
ing such proposals, and reserving the right to reject any and all proposals. 

1 Final Report of the Chapter 579 Task Force at 107. 



96 P.D. 12 

construction projects must be advertised in the Central Register. 8 The statute 
specifically states that "[n]o officer . . . shall award any contract for the con- 
struction, reconstruction, alteration, repair or development at public expense 
of any building, road, bridge or other physical property" unless the notice pro- 
visions of the statute have been satisfied. G.L. c. 29, § 8A (emphasis added). 
The inclusion of the words "road" and "bridge" in the first sentence of section 
8A leaves no doubt that the statute applies to horizontal as well as to vertical 
construction projects. 

The statute also states that a contract in excess of five thousand dollars 
involving the construction of a building, road, bridge or other physical property 
may not be awarded unless a notice inviting proposals therefor is posted in 
three places: (1) "in a conspicuous place on or near the premises" of the officer 
in charge of the particular office or department awarding the contract; (2) "in 
the central register published by the state secretary"; and (3) "in such newspaper 
or newspapers or trade periodical or periodicals" prescribed by the commis- 
sioner of administration or deputy commissioner of capital planning and 
operations. 9 G.L. c. 29, § 8A. Moreover, with particular reference to the Depart- 
ment of Public Works, the statute further provides that in the case of work 
under the supervision or control of the department of public works, the com- 
missioner of public works shall prescribe the newspaper or newspapers or trade 
periodical or periodicals in addition to the central register in which said notice 
shall be published. G.L. c. 29, § 8A (emphasis added). 

It is a general rule of statutory construction that words and phrases in statutes 
are given their ordinary meaning and are construed according to their natural 
import and approved usage. Burke v. Chief of Police of Newton, 374 Mass. 
450, 452 (1978); Johnson v. District Attorney for the Northern District, 342 
Mass. 212, 215 (1961). When the language of a statute is unambiguous, a court 
will not look to outside sources to determine the correct construction. Boston 
Teachers Union, Local 66 v. Boston, 382 Mass. 553, 561 (1981); New England 
Medical Center Hospital, Inc. v. Commissioner of Revenue), 381 Mass. 748, 
750(1980); Commonwealth v. Gove, 366 Mass. 351, 354(1974). The language 

8 Section 8A of chapter 29 of the General Laws as amended by St. 1980, c. 579, § 52, provides, in pertinent part, as follows: 

No officer having charge of any office, department or undertaking » hich receives a periodic appropriation 
from the Commonwealth shall award any contract for the construction, reconstruction, alteration, repair or 
development at public expense of any building, road, bridge or other physical property if the amount involved 
therein is one thousand dollars or over, unless a notice inviting proposals therefor shall have been posted , not 
less than one week prior to the time specified in such notice for the opening of said proposals, in a conspicuous 
place on or near the premises of such officer, and shall have remained so posted until the time so specified, 
and, if the amount involved therein is in excess of five thousand dollars, unless such a notice shall also have 
been published at least once not less than two weeks prior to the time so specified, or in the case of any contract 
awarded pursuant to the provisions of sections forty-four A through H, inclusive, of chapter one hundred 
and forty-nine, unless a notice inviting applications to bid has been published at such time prior to receipt 
of proposals as section forty-four D of said chapter provides; and at such other times prior thereto, if any, 
as the commissioner of administration , or in the case of any contract awarded pursuant to sections forty-four 
A through H, inclusive, of chapter one hundred and forty-nine, as the deputy commissioner of capital planning 
and operations shall direct, in the central register published by the state secretary pursuant to section twenty 
of chapter nine and in such newspaper or newspapers or trade periodical or periodicals as said commissioner 
or deputy commissioner, having regard to the locality of the work involved in such contract, shall prescribe; 
provided, . . . that in the case of work under the supervision or control of the department of public works, 
the commissioner of public works shall prescribe the newspaper or newspapers or trade periodical or periodicals 
in addition to the central register in which said notice shall be published, having regard to the locality of the 
work involved. 

9 In an intervening clause ("or in the case of any contract ... as the deputy commissioner of capital planning and operations 
shall direct"), the statute contains additional notice requirements for contracts awarded pursuant to G.L. c. 149, §J 44 AH. 
the statutory - sections which provide detailed bidding procedures for the construction of buildings (i.e., vertical construction). 
It is my opinion that these additional requirements do not negate the general requirement of section 8A that notices inviting 
proposals for all construction projects, vertical or horizontal, must be published in the Central Register. 



P.D. 12 97 

of section 8 A of chapter 29 of the General Laws is clear and unambiguous since 
it "is neither peculiar nor technical, but is comprised rather of familiar words 
commonly combined to express . . . a simple thought." New England Medical 
Center Hospital, Inc. v. Commissioner of Revenue, 381 Mass. at 750. The plain 
meaning of the statute, therefore, must be given its full effect. Rosenbloom 
v. Kokofsky, 373 Mass. 778, 781 (1977). 

Given the plain language of G.L. c. 29, § 8A, I consider it insignificant, for 
purposes of construing that statute, that another statute, G.L. c. 81, § 8, also 
requires the Department of Public Works to advertise state highway construc- 
tion projects in newspapers. 10 As discussed above, G.L. c. 29, § 8A, specifically 
requires the publishing of notices for construction projects in excess of five 
thousand dollars in both newspapers or trade periodicals and in the Central 
Register. Moreover, the statute creating the Central Register, G.L. c. 9, § 20A, 
also seems to require the publication of notices inviting proposals for hori- 
zontal construction projects. Section 20A requires that the State Secretary 
publish a Central Register listing "all notices of contracting opportunities 
estimated to be in excess of a sum to be determined by the secretary offered 
by any public agency or authority of the commonwealth or any political sub- 
division thereof (emphasis added). 11 

A general rule of statutory construction is that the mere existence of one 
regulatory statute does not affect the applicability of a broader, non-conflicting 
statute, particularly when both statutes provide for concurrent coverage of 
a common subject matter. Dodd v. Commercial Union Ins. Co., 373 Mass. 
72, 78 (1977). When two or more statutes relate to the same subject matter, 
they should be construed together in order to constitute a harmonious whole 
consistent with the legislative purpose. Registrar of Motor Vehicles v. Board 
of Appeal on Motor Vehicle Liability Policies and Bonds, Mass. Adv. Sh. (1981) 
415, 420; Board of Education v. Assessor of Worcester, 368 Mass .511,513-14 
(1975). Since G.L. c. 29, § 8A, and G.L. c. 81 , § 8, do not conflict, they should 
be construed so that both may be given effect. See County Commissioners of 
Middlesex County v. Superior Court, 371 Mass. 456, 460 (1976). 

The legislative history and purpose of section 8A also support the conclu- 
sion that the statute applies to notices concerning both horizontal and vertical 



10 See supra, n. 6, for the language of G.L. c. 81, § 8. 

11 The regulations promulgated by the Secretary of the Commonwealth, pursuant to G.L. c. 9, § 20A, concerning the format 
and content of the Central Register, add some confusion to the foregoing analysis. These regulations, published at 950 C. M R 
§ 21.00 and revised in June 1983, 367 Mass. Reg. 16 (1983), establish standards for the preparation, filing, and publication 
of capital facility contract data, including invitations for bids, by public agencies. Section 21 .04(2) of the revised regulations 
provides that information concerning contracts adopted pursuant to G.L. c. 30, § 39M, need not be published in the Central 
Register. Since G.L. c. 30, § 39M, applies to contracts for "public works," this section of the regulations appears to conflict 
with the plain language of G.L. c. 29, § 8A, which states that contracts involving "any building, road, bridge or other physical 
property" must be published in the Central Register, and with G.L. c. 9, § 20A, which requires the publishing of notices of 
contracting opportunities "offered by any public agency or authority." However, given the limited purpose of the revised 
regulations - "to promote uniformity, clarity and coherence in form and economy, accessibility and timeliness in printing and 
distributing this information. . . . [and] to make public capital facility contract information widely available to the public 
at reasonable cost in a form that is current, understandable and legible," 950 C.M.R. § 21.01, I conclude that 950 C.M.R. 
§ 21.04(2) has neither the purpose nor effect of eliminating the publication requirements contained in G.L. c. 29, § 8A, and 
c. 9, § 20A. 



98 P.D. 12 

construction projects. 12 Section 8 A was amended in 1980. 13 The content of 
that amendment indicates that the Legislature had only two reasons for amend- 
ing that section: (1) to make clear that contracts subject to the provisions of 
G.L. c. 149, §§ 44A-H, were included within the purview of section 8A; and 
(2) to add an additional publication requirement to the statute— i.e., that notices 
inviting bids for construction projects be published in the Central Register 
as well as in newspapers or trade periodicals. The preamble to chapter 579 of 
the Acts of 1980, which amended section 8 A, states that two of the purposes 
of the Act as a whole were to "provide the people of Massachusetts with a system 
of public construction which . . . operates under coordinated policies, in a time- 
ly, efficient, and professional manner" and which "reduces opportunities for 
corruption, favoritism, and political influence in the award and administra- 
tion of public contracts." Moreover, case law indicates that statutes like sec- 
tion 8A are aimed at providing a free opportunity to bid for all who wish to 
bid as well as enabling prospective bidders to obtain knowledge of the specifica- 
tions for construction projects so that they can make proposals. Pacella v. 
Metropolitan District Commission, 339 Mass. 338, 342-43 (1959). SeeDatatrol 
Inc. v. State Purchasing Agent, 379 Mass. 679, 696 (1980). The requirement 
that notices of invitations for bids for horizontal construction projects be placed 
in the Central Register as well as in newspapers or trade periodicals fosters 
the purposes of the statute. It provides for a coordinated, efficient method 
of publicizing all state construction projects, horizontal and vertical, and 
thereby maximizes the opportunity for potential contractors to seek state con- 
struction jobs. 

In sum, based on the language of G.L. c. 29, § 8A, as well as its legislative 
history and purpose, it is my opinion that the Department of Public Works 
must publish notices inviting proposals for horizontal construction projects 
in the Central Register. 

Very truly yours, 
FRANCIS X. BELLOTTI 

Attorney General 



12 The Legislature's purpose in establishing the Central Register also supports this conclusion. The Legislature created the Central 
Register for several reasons: 1) notices pertaining to public construction contracts or awarded by Massachusetts agencies were 
not listed in any central location; rather, public awarding authorities advertised for invitations to bid, requests for proposals, 
and other contracting services in various newspapers and trade periodicals; 2) there was no assurance that the announcements 
or notices would appear on time or in the form submitted; and 3) there was no statute or regulation governing the level of 
specificity required of such advertisements, and therefore, project descriptions were often inadequate to inform a potential 
contractor of what was actually involved in the project. See 8 Final Report to the General Court of the Special Commission 
Concerning State and County Buildings 369-7 1 (December 3 1 , 1 980) ; Background Memorandum - The Massachusetts System 
of Public Construction 184-87 (March 19, 1980). The Central Register was viewed as a way to cure these problems, as well 
as to increase access to public contracts for small business. Id. 



13 Section 8A was amended by St. 1980, c. 579, § 52. Chapter 579, for the most part, dealt with issues related to vertical construc- 
tion and w as enacted in response to the Ward Commission's criticisms of the system of awarding contracts for the construction 
of buildings. Some of the provisions of chapter 579, however, also apply to horizontal construction projects. 



P.D. 12 99 

March 5, 1984 

Paul J. Eustace, Secretary 
Executive Office of Labor 
One Ashburton Place 
Boston, Massachusetts 02108 

Dear Secretary Eustace: 

You have requested my opinion as to whether the Industrial Accident Board 
(IAB) is authorized or required to allow television cameras to film its meetings 
and hearings. This request arises because a local television station has asked 
to film certain IAB meetings and hearings. For the reasons explained below, 
it is my opinion that while the IAB is not required to provide access to televi- 
sion cameras, it does have authority to permit televising or filming of its 
meetings and hearings. I further advise you, however, that if the IAB does 
allow access for television cameras, it should regulate such access to protect 
the rights of the parties, and it should not arbitrarily discriminate among those 
wishing to film its proceedings. 

The IAB hearings on the compensation cases of individual employees must 
be open to the public under G.L. C. 30A, §§ 11 A, HAVi. 1 No provision of 
G.L. C. 30A, however, mandates that the IAB open its hearings to television 
cameras. 2 Further, no provision of G.L. c. 152, which regulates workmen's 
compensation procedures, requires that the IAB allow television cameras to 
film its proceedings. Finally, no rule of the IAB or the Division of Industrial 
Accidents requires the granting of such access. Thus, I am aware of no statute 
or regulation mandating that the IAB allow access to its hearings for televi- 
sion cameras. 

Nor does the IAB have a constitutional obligation to provide access for 
television cameras. The United States Supreme Court has held that the press 
and the general public have a constitutional right of access to criminal trials. 
Richmond Newspapers, Inc. v. Virginia, 448 U.S. 555, 580 (1980); Globe 
Newspaper Co. v. Superior Court, 457 U.S. 596, 603 (1982). However, in 
neither Richmond Newspapers, Inc. nor Globe Newspaper Co. did the Supreme 
Court explicitly deal with the issue of television cameras in the courtroom. 

With respect to television broadcast coverage in courtrooms, the Supreme 
Court has allowed states to experiment, holding that broadcast coverage does 
not involve an inherent denial of due process rights. Chandler v. Florida, 449 
U.S. 560, 581 (1981). Following this decision, the Massachusetts Supreme 
Judicial Court adopted a rule which allows cameras in courtrooms for record- 
ing purposes, subject to a number of restrictions. S.J.C. Rule 3:09, Canon 
3(A)(7). Nonetheless, these cases and rules establish no constitutional right 
of access to an administrative proceeding involving civil matters. 

Although the IAB is therefore not required to permit television access to 
its proceedings, I have concluded that it does have authority to permit tele- 



1 Under G.L. c. 30A, § HA, however, the deliberations of the IAB in the process of deciding a compensation case may be closed to 
the public. 

2 Under G.L. c. 30A, § lLA'/2, persons in attendance may tape record meetings or use "other means of sonic reproduction." 



100 P.D. 12 

vising or filming of its hearings and meetings if it so chooses. As an 
"administrative tribunal created to administer the workmen's compensation 
act," the IAB possesses "the powers conferred upon it by express grant or 
necessary implication." Perkins's Case, 278 Mass. 294, 299 (1932). " '[W]here 
a grant of power is expressly conferred by statute upon an administrative officer 
or board . . . they in the absence of some statutory limitation have authority 
to employ all ordinary means reasonably necessary for the full exercise of the 
power.' " Town Taxi Inc. v. Police Commissioner of Boston, 311 Mass. 576, 
586 (1979) (quoting from Bureau of Old Age Assistance ofNatick v. Commis- 
sioner of Public Welfare, 326 Mass. 121, 124 (1950)). Under G.L. c. 152, § 
5, the "division [of Industrial Accidents] may make rules consistent with this 
chapter for carrying out its provisions. Process and procedure shall be as simple 
and summary as reasonably may be." The IAB has authority to conduct 
meetings and to hold hearings on contested cases under G.L. c. 152, as well 
as to establish procedures for those hearings. Thus, the IAB has considerable 
discretion in determining how it will conduct its meetings and hearings. 
Accordingly, it is my opinion that the IAB has authority to allow television 
access to its proceedings if it so chooses. 

I cannot conclude in the abstract, however, that the televising or filming 
of any particular IAB hearing or meeting will not infringe upon the rights 
of any of the parties involved, since IAB meetings and hearings encompass 
a broad spectrum of factual settings and parties. In the event that the IAB 
does allow filming of its meetings or hearings, any prudent attorney would 
advise the board to adopt procedures to ensure that parties to the proceedings 
suffer no deprivations of their due process or privacy rights. 

Though the IAB is an administrative agency rather than a court, it must 
provide the parties to its proceedings with constitutional due process protec- 
tion. Haley's Case, 356 Mass. 678, 681-82 (1970). Those rights enumerated 
in Haley's Case include "the opportunity to present evidence, to examine their 
own witnesses and to cross-examine witnesses of other parties, to know what 
evidence is presented against them and to an opportunity to rebut such evidence, 
and to argue, in person or through counsel, on the issues of fact and law involved 
in the hearing." Id. at 681. Any procedures adopted by the IAB governing 
television access to its proceedings should be designed to protect those due 
process rights of the parties to the proceedings. 

Further, the parties to IAB hearings and meetings may have the right to 
have the confidentiality of certain information in the possession of the IAB 
maintained on the basis of various common law privileges or statutes. As I 
have indicated in a previous opinion, some personal information on injured 
employees must remain confidential in light of the interplay between the Public 
Records Law, G.L. c. 66, § 10, its definitional counterpart, G.L. c. 4, § 7, 
cl. 26, and the Fair Information Practices Act (FIPA), G.L. c. 66A, as well 
as the specific statutes concerning the IAB or the Division of Industrial 
Accidents. 1977/78 Op. Atty. Gen. No. 9, Rep. A.G., Pub. Doc. No. 12 at 
88,91. For your guidance in determining whether television access will violate 
any individual's privacy interest under those statutes, I refer you to the opinion 
cited above. In addition, there may exist other privileges or statutes which, 
in the context of particular meetings and hearings, mandate that information 
remain confidential. Finally, if the IAB does open its meetings and hearings 



P.D. 12 10 i 

to television cameras, it must not arbitrarily discriminate in determining which 
cameras may have access. See Westinghouse Broadcasting Co. Inc. v. Dukakis, 
409 F. Supp. 895, 896 (D. Mass. 1976). 

In sum, it is my opinion that the I AB is authorized but not required to permit 
television access to its proceedings, provided that such access is regulated so 
as not to interfere with the rights of parties to those proceedings or to 
discriminate arbitrarily among those seeking such access. 

Very truly yours, 

FRANCIS X. BELLOTTI 

Attorney General 



March 26, 1984 

James Gutensohn, Commissioner 
Department of Environmental Management 
100 Cambridge Street 
Boston, Massachusetts 02202 

Dear Commissioner Gutensohn: 

You have requested my opinion whether employees of the Division of Forests 
and Parks who are assigned police duties pursuant to G.L. c. 21 § 4A, and 
G.L. c. 132A, § 7 (hereinafter "park officers"), may carry firearms in the per- 
formance of those duties. 

As background for your inquiry, you inform me that the park officers wear 
uniforms and perform law enforcement duties for which you believe the general 
public assumes they are armed. During the course of performing those duties, 
park officers are exposed to dangerous situations which, in your view, require 
the apparent ability to use force, if not the actual use of force. In light of 
that requirement, the Department of Environmental Management has instituted 
a practice of allowing the park officers to arm themselves after they have 
furnished evidence to the Department that they have obtained licenses to carry 
firearms from their local police chiefs pursuant to G.L. c. 140, § 131. 

On the basis of the foregoing facts, you have asked whether the practice 
you describe is authorized by statute. My answer to your question is "no." 
I am of the opinion that the Legislature has not authorized park officers 
appointed pursuant to G.L. c. 21 , § 4A, and G.L. c. 132A, § 7, to carry firearms, 
nor has it delegated to the Department of Environmental Management the 
power to authorize park officers to carry firearms. My conclusion derives from 
the wording of the statutes themselves when read in conjunction with statutes 
enacted at the same time dealing with similar subject matter. 

The words of a law are the primary indicator of its meaning. Nantucket 
Conservation Foundation, Inc. v. Russell Management, Inc., 380 Mass. 212, 
214(1 980) . Section 4A of chapter 2 1 of the General Laws provides , in pertinent 
part, as follows: 

Forest supervisors, park superintendents and laborers employed 
by the division, while employed in state forests, forest parks, state 



102 P.D. 12 

parks or reservations, including roads and highways, shall, within 
the limits of said forests, parks or reservations, except great ponds, 
have and exercise all the powers and duties of constables, and of 
police officers, except service of civil process, if so authorized in 
writing by the director [of the Division of Forests and Parks]. 
The enforcement officers of the division of law enforcement shall, 
within the limits of such forests, parks or reservations, including 
roads and highways, except great ponds, have and exercise all the 
powers and duties of constables and of police officers except service 
of civil process. 

Section 7 of chapter 132A contains language similar to the first quoted 
paragraph of section 4A, but with reference to state recreation areas. 

Although the above-quoted statute grants park officers "all the powers and 
duties ... of police officers," the precise powers of police officers are not 
defined. As I stated in a previous opinion interpreting the term "police powers" 
in another statute, "the powers and duties of . . . various police officers . . . 
are established by . . . the respective statutes under which they operate." 1977/78 
Op. Atty. Gen. No. 30, Rep. A.G., Pub. Doc. No. 12 at 149 (1978). Both 
statutes which grant authority to the park officers to perform police duties 
are silent concerning the officers' use of firearms to effectuate those duties. 
From this silence I infer that the Legislature intended that park officers not 
be armed. 

That inference becomes compelling when one applies the well-known 
principle of statutory construction that " '[w]here a statute, with reference 
to one subject contains a given provision, the omission of such provision from 
a similar statute concerning a related subject is significant to show that a dif- 
ferent intention existed.' " City of Port Hueneme v. City ofOxnard, 341 P. 2d 
318, 324(Cal. 1959) (quoting People ex rel. Paganiniv. Town of Corte Madera, 
218 P. 2d 810, 813 (Cal. 1950)). ^See also New England Power Company v. 
Board of Selectmen ofAmesbury, 389 Mass. 69 (1983) (lack of express authority 
in the part of the statute in question and presence of such authority in other 
sections implies an intent of the Legislature to exclude that authority where 
not expressly granted). 

In the present situation, G.L. c. 21 , § 4A, creates the position of park officer 
and defines the powers and duties of the position. Significantly, in the same 
section, the Legislature grants similar powers to natural resource officers 
appointed pursuant to G.L. c. 21, § 6. However, natural resource officers 
are granted explicit authority to carry firearms, upon authorization of the 
Director of the Law Enforcement Division of the Department of Environmental 
Management: 

The director [of the Law Enforcement Division] may in writing 
authorize his assistants and any natural resource officer to have 
in his possession and carry a revolver, club, billy, handcuffs, 
twisters, or any other weapon or article required in the performance 
of his official duty. 

1 See also Iannellev. Fire Commissioner of Boston, 331 Mass. 250, 252 (1954) (fact that some sections of statute expressly exclude 
Sundays and holidays in appeal period is strongly indicative that Sundays and holidays are not excluded in those sections which 
are silent on that issue). 



P.D. 12 103 

G.L. c. 21 , § 6B. Sections 4A, 6, and 6B were all adopted in the 1953 legislative 
session; they are so closely related both in time and subject matter as to negate 
the inference that the differences among these sections were accidental. In 
light of the explicit grant of authority to natural resource officers to carry 
firearms, the Legislature's silence as to similar authority for park officers can 
be interpreted only as a deliberate withholding of such authority. 2 The fact 
that the Department historically has furnished weapons to its natural resource 
officers and not to its park officers evidences an administrative interpretation 
consistent with the apparent legislative intent. 

Therefore, it is my opinion that park officers are not authorized by statute 
to carry firearms while on duty. While circumstances have undoubtedly changed 
over the last thirty years and policy reasons may now support arming park 
officers, such policy arguments must be addressed to the Legislature and not 
to me. In light of this opinion, I need not address your second question 
concerning whether the Department of Environmental Management is 
authorized to purchase firearms for issuance to park officers. 

Very truly yours, 
FRANCIS X. BELLOTTI 

Attorney General 



April 5, 1984 

Paula W. Gold, Secretary 

Executive Office of Consumer Affairs and Business Regulation 

One Ashburton Place 

Boston, Massachusetts 02108 

Dear Secretary Gold: 

You have asked my opinion whether the recently enacted "Lemon Law," 
G.L. c. 90, § 7N 1/2, inserted by St. 1983, c. 395, § 1 , applies to motor vehicles 
ordered from a dealer prior to the effective date of the law, but delivered after 
that date. This question arose in connection with your administration of the 
arbitration provisions of the Lemon Law, pursuant to G.L. c. 90, § 7N 1 /2(6). 
For the reasons set forth below, my conclusion is that the Lemon Law applies 
to vehicles delivered after January 1, 1984, regardless of when they were 
ordered. 

On its face, the Lemon Law applies to any motor vehicle "sold or replaced 
by a dealer or manufacturer" after January 1 , 1984, the effective date of the 



2 Cf. City of Boston v. Boston Patrolmen's Association, Inc., 8 Mass. App. Ct. 220, 225 (1979), in which the court held that 
"[i]n this Commonwealth the decision as to who shall carry a firearm and under what conditions, be it a public official or 
a private citizen, is one which our Legislature has seen fit to leave with the heads of law enforcement agencies." However, 
in so stating, the court relied on those statutes which explicitly delegate to the heads of various law enforcement agencies the 
authority to determine whether their officers may carry weapons. That case therefore is inapposite to the present situation 
in which the Legislature has not authorized the Division of Forests and Parks to arm its officers. 



104 P.D. 12 

statute. G.L. c. 90, §7N 1/2(1); St. 1983, c. 395, § 2. 1 Since your question 
concerns motor vehicles which were ordered prior to January 1, 1984, but 
delivered after that date, the precise issue presented is whether an order is 
the equivalent of a "sale," or whether physical delivery to the consumer is 
necessary for a car to be "sold" for purposes of the Lemon Law. 

The word "sold" is not expressly defined in the statute. Furthermore, there 
is no formal legislative history to which I can turn to ascertain the meaning 
of the term. Hence in construing it, I am primarily guided by the basic maxim 
that words and phrases are ordinarily given their common and approved usage, 
but that technical terms or phrases that may have acquired a peculiar and 
appropriate meaning in law are to be construed according to that meaning. 
G.L. c. 4, § 6. See also Burke v. Chief of Police of Newton, 374 Mass. 450 
(1978); Opinion of the Justices, 313 Mass. 779 (1943). Moreover reliance on 
commercial usage is particularly appropriate in interpreting statutes such as 
the Lemon Law, which regulate trade. West Boylston Manufacturing Com- 
pany v. Board of Assessors of Easthampton, 277 Mass. 180 (1931). 

I believe that the word "sold" has acquired a particular technical meaning 
as applied to the sale of motor vehicles in Massachusetts and construe the 
term accordingly. Before outlining the basis for that conclusion, however, 
I note that even if I am mistaken in this view, the result of this opinon remains 
the same. The standard dictionary definition of the verb "sell" is "to give up, 
deliver or exchange something for money or its equivalent." Webster's New 
World Dictionary 1293 (2d. ed. 1980). In common parlance, then, the word 
"sold" envisions an actual exchange or delivery, not merely an agreement to 
exchange or deliver. 

The settled legal meaning of the term in a commercial context is equally 
clear and emerges from early case law as well as recent statutes. Massachusetts 
case law and the Uniform Commercial Code indicate that a motor vehicle 
is not "sold" until physical delivery is made. Physical delivery has been an 
essential element of a sale under Massachusetts law for well over one hundred 
years. See Commonwealth v. Williams, 72 Mass. (6 Gray) 1, 8-9 (1856) ("A 
sale is a transfer of property from one man to another ... [t]he agreement 
to sell is not a sale without the delivery"); Howard v. Harris, 90 Mass. (8 Allen) 
297, 299 (1864). 

The Uniform Commercial Code sets out a more complex set of rules govern- 
ing the more sophisticated transactions of modern commercial practice, 
including provisions for constructive as well as actual delivery. See G.L. c. 
106, §§ 2-106, 2-401(2), 2-401(3). However, the Code also generally requires 
physical delivery to complete a sale. 2 Thus, the pre-Code definition of the 
term "sale" has not been changed by the Code, E.I. du Pont de Nemours & 
Co. v. Kaufman & Chernick, Inc., 337 Mass. 216, 219-20 (1985); and sub- 

1 Section 7N 1/2(1) of chapter 90 of the General Laws provides in relevant part, as follows: 

"Motor vehicle" or "vehicle," any motor vehicle as defined in section one sold or replaced by a dealer or manufac- 
turer after the effective date of this section, except that it shall not include auto homes, vehicles built primarily 
for off-road use or any vehicle used primarily for business purposes. 

Secton 2of chapter 395 of the Acts of 1983 provides: "This act shall takeeffect on January first, nineteen hundred and eighty four." 

2 Although the Code defines a sale as consisting of "the passing of title from the seller to the buyer for a price," G.L. c. 106, 
§2-106(1); Mechanics National Bank of Worcester v. Gaucher, 7 Mass. App.Ct. 143, 146(1979), the passing of title generally 
coincides with physical delivery. See G.L. c. 106, § 2-401(2), which provides, in relevant part: "Unless otherwise explicitly 
agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical 
delivery of the goods." 



P.D. 12 105 

sequent Massachusetts cases have followed § 2-401(2) and adhered to the 
requirement of physical delivery. 3 Newhall v. Second Church & Society of 
Boston, 349 Mass 493, 501 (1965); Regal Floor Covering, Inc. v. A. P. Con- 
struction Co., 35 Mass. App. Dec. 73, 77 (1966); Mechanics National Bank 
of Worcester v. Gaucher, 7 Mass. App. Ct. at 148; MacDonald v. Hawker, 
Mass. App. Ct. Adv. Sh. (1981) 1014. 

The concept of "physical delivery" does not require that the dealer "deliver" 
the vehicle to a specified destination, such as the buyer's home. "[PJhysical 
delivery [can be made] at [the dealer's] place of business to complete the sale," 
Mechanics National Bank of Worcester v. Gaucher, 1 Mass. App. Ct. at 148, 
which is the course the Code normally contemplates. G.L. c. 106, § 2-308. 
Ordinarily, the motor vehicle seller makes physical delivery by relinquishing 
possession and control to the buyer, typically by giving the buyer the keys 
to the vehicle. 

In analyzing the point at which a sale of a motor vehicle is completed, other 
jurisdictions have similarly looked to the transfer of possession effected by 
physical delivery and have applied § 2-401(2) of the Uniform Commercial Code. 
See, e.g., Gross v. Powell, 181 N.W.2d 113, 117-18, 288 Minn. 386 (1970); 
Detweiler v. Stevens Dodge, Inc., 16 U.C.C. Rep. 404, 406 (N.Y. Civ. Ct. 
1975); Bunch v. Signal Oil and Gas Co., 505 P.2d 41, 42 (Colo. App. 1972); 
Motors Insurance Corp. v. Safeco Insurance Co. of America, 412 S.W.2d 
584, 585 (Ky. App. 1967); Lawrence v. Graham, 29 Md. App. 422, 349 A.2d 
271, 273 (1975); Pugh v. Hartford Insurance Group, 328 N.Y.S.2d 872, 875, 
68 Misc. 2d 1014(1972); Semple V. State Farm Mutual Automobile Insurance 
Co., 215 F. Supp. 645, 647 (E.D. Pa. 1963). This is also the view taken by 
Code commentators. SeeR. Anderson, Uniform Commercial Code, § 2-401:34 
(3rd ed. 1981); R. Nordstrom, Handbook of the Law of Sales § 134 (1970). 

Construing the term "sold" as requiring physical delivery is also consistent 
with other provisions of the Lemon Law. The "term of protection," the statutory 
warranty period created by the law, does not begin until the motor vehicle 
is physically delivered to the consumer. 4 Thus, the Lemon Law itself designates 
the time of physical delivery as the time at which the law's substantive protec- 
tions begin to apply. It follows that the date of delivery should determine 
whether a vehicle is covered by the law, as well as when such coverage begins. 
Gosselin v. Gosselin, 1 Mass. App. Ct. 146 (1973); Atlas Distributing Co. 
v. Alcoholic Beverages Control Commission, 354 Mass. 408 (1968); Doliner 
v. Planning Board of Millis, 343 Mass. 1 (1961). 

I am bolstered in this conclusion by the fundamental rule that a statute must 
be construed so as to give effect to its manifest legislative purpose. Simon 
v. Solomon, 385 Mass. 91 (1982); Labor Relations Commission v. Board of 
Selectmen ofDracut, 314 Mass. 619 (1978); In re Bergeron, 220 Mass. 472 
(1915). The Lemon Law is clearly a remedial, consumer protection statute, 
designed to give buyers remedies when the cars they purchase prove to have 

3 This approach is also consistent with the Code's risk of loss rules, which, like its sale provisions, turn on the parties' expectations 
and intent. In the circumstance described by your inquiry, under G.L. c. 106, § 2-509(3), the risk of loss, which hinges on 
concepts of ownership and possession, ison the dealer until the buyer receives the motor vehicle. See R. Nordstrom, Handbook 
of the Law of Sales § 134 (1970). 

4 The Lemon Law requires that a motor vehicle manufacturer attempt to repair any substantial defect which a new motor vehicle 
exhibits during its "term of protection, "the first year or 15, 000 miles of use, whichever comes first. G.L. c. 90, § 7N 1/2(1), (2). 



106 P.D. 12 

uncorrectable defects. A purchaser is only going to know of those defects after 
he takes possession of a vehicle. Moreover, the Legislature presumably intended 
to redress the problems of as many affected consumers as possible, and it is 
well-settled that consumer protecton statutes are to be liberally construed. 
Shepard v. Finance Associates of Auburn, Inc., 366 Mass. 182 (1974); see 
also Massachusetts Association for the Blind v. Board of Assessors of 
Brookline, 391 Mass. 384, 391 (1984) (coverage of remedial statute construed 
broadly). These two considerations of legislative intent support the conclu- 
sion that the remedies provided by the statute are to apply to vehicles ordered, 
but not delivered, prior to the effective date of St. 1983, c. 395. 

Accordingly, consistent with the authorities and precedents I have cited, 
I conclude that the Lemon Law applies to motor vehicles delivered after January 
1, 1984, even if such vehicles were ordered prior to that date. 

Very truly yours, 
FRANCIS X. BELLOTTI 

Attorney General 



May 16, 1984 

The Honorable Allan J. McKinnon 

The Honorable Theodore J. Aleixo, Jr. 

Chairmen 

Joint Legislative Committee on Insurance 

State House 

Boston, Massachusetts 02133 

Dear Senator McKinnon and Representative Aleixo: 

In your capacity as Chairmen of the Joint Committee on Insurance and 
pursuant to G.L. c. 12, § 9, you have requested that I advise you as to the 
constitutionality and effect of certain bills presently pending before the Com- 
mittee. The bills 1 would prohibit insurers from discriminating on the basis 
of race, color, religion, sex, marital status, or national origin. The particular 
concerns of the Committee appear to be whether these bills would impermissibly 
affect pre-existing insurance contracts and whether this legislation would affect 
the membership policies of fraternal organizations. 

On the basis of the analysis set forth below, I believe that the proposed 
legislation is constitutional and, more specifically, that it could be success- 
fully defended against a facial constitutional challenge. 2 Because the Com- 
mittee is particularly concerned with the constitutionality of the provisions 
of the proposed legislation that would affect pre-existing contracts, my opinion 
is even more narrowly focused on the Contract Clause, article 1, § 10, cl. 1, 
of the United States Constitution, which prohibits states from passing laws 



1 H. 4023, H. 4024, H. 1774, and H. 1777. 

2 An as-applied analysis, which would depend upon the specific provisions of the multitude of insurance products on the market, 
is beyond the scope of this opinion. 



P.D. 12 107 

impairing the obligation of contracts. 3 1 also conclude that H. 4023, H. 4024, 
H. 1774, and H. 1777 would not affect the membership policies of fraternal 
benefit societies organized pursuant to G.L. c. 176, but would only regulate 
the issuance of insurance policies by such organizations. 

Before explaining the reasons for my conclusions, it is necessary to sum- 
marize the provisions of the bills in question. House bill 4023 would prohibit 
discrimination on the basis of race, color, religion, sex, marital status, or 
national origin in the availability, terms, conditions, rates, benefits, or require- 
ments of any insurance contract issued for delivery in Massachusetts. The pro- 
hibition on discrimination would apply to insurers, fraternal benefit societies, 
hospital service organizations (Blue Cross), medical service corporations (Blue 
Shield), medical service plans (health maintenance organizations) and savings 
and insurance banks. 4 That bill would also forbid the use of any statistical 
table which classifies individuals on the basis of race, color, religion, sex, marital 
status, or national origin. House bill 4024 parallels H. 4023, except that it 
would ban discrimination only with respect to disability insurance. House bills 
1744 and 1777 are almost identical to H. 4023 and H. 4024 except that those 
bills would not apply to pre-existing contracts. 

With respect to existing insurance contracts, H. 4023 and H. 4024 would 
affect only future premiums and benefits. 5 Any discrimination in premiums 
or benefits that occurred prior to the effective date of the Act would not have 
to be remedied. The payments which would be subject to the ban on discrimina- 
tion in H. 4023 and H. 4024 thus fall into two categories: future payments of 
premiums by the insured and future payments of benefits by the insurer. The 
insurer would be authorized to modify the premiums and to increase (but not 
to decrease) the benefits under existing contracts that are due after the effec- 
tive date of the law, if it is clearly necessary to comply with the non- 
discrimination requirements of the law. No insurer would be required, however, 
to refund any portion of the premiums that were payable to it prior to the 
effective date of the law, nor to pay any additional benefits that were payable 
by it prior to the effective date of the law. 

Returning to the first legal issue presented by your request, I begin by noting 
that the test for determining whether state legislation violates the Contract 
Clause of the United States Constitution is well established. The Contract 



3 The same analysis would be applicable to a challenge under the Due Process Clause of the United States Constitution or cognate 
provisions of the Massachusetts Constitution. See, e.g., American Manufacturers Mutual Insurance Co. v. Commissioner of 
Insurance, 374 Mass. 181, 190 (1978); Velix v. Sixth Ward Building & Loan Association, 310 U.S. 32, 41 (1940). 

4 For convenience, the various sellers of insurance enumerated in H. 4023 and in H. 4024 will be referred to as "insurers" in this opinion. 

5 Both H. 4023 and H. 4024 would provide: 

(1) No insurer . . . shall charge or collect premium payments or contributions which become due after the 
effective date of this Act or determine the amount of or pay to any insured or other beneficiary (under an 
insurance, annuity or pension contract] any periodic or lump sum payment after the effective date of this Act 
if such charge, collection, determination or payment is based, directly or indirectly, on the race, color, religion, 
sex, marital status or national origin of any person or group of persons or on any statistical table whose use 
would, if applied to contracts made after the effective date of this Act, violate any provision of this section; and 

(2) The insurer may modify the premium and contribution rates and may increase but not decrease the periodic 
and lump sum payments under such existing contracts insofar as they are due after the effective date of this 
Act, if clearly necessary to comply with the non-discrimination requirements of this section, but such insurer 
need not refund any portion of the premiums and contributions which were payable to the insurer prior to 
the effective date of this Act nor pay any additional amounts for the benefits which were payable by the insurer 
prior to the effective date of this Act. 

(Bracketed language appears in H. 4023 but not in H. 4024.) 



108 P.D. 12 

Clause, in spite of its absolute language, 6 does not ban all legislation which 
affects existing contracts. Home Building and Loan Association v. Blaisdell, 
290 U.S. 398, 428 (1934). Rather, the effect of state legislation on existing con- 
tracts must be balanced against the State's interest in exercising its police power 
and achieving significant public purposes. Energy Reserves Group, Inc. v. 
Kansas Power & Light Co., 103 S. Ct. 697, 704-05 (1983). A determination 
of whether legislation affecting existing contracts violates the Contract Clause 
requires consideration of four factors. 7 

The first factor to be considered is whether H. 4023 and H. 4024 would 
substantially impair the contractual rights of insureds or insurers. 8 If the 
impairment would not be "substantial," no further analysis is needed; the legisla- 
tion would not violate the Contract Clause. Allied Structural Steel Co. v. 
Spannas, 438 U.S. 234, 245 (1978). 

House bill no. 4023 applies to all types of insurance contracts; H. 4024 to 
disability contracts. An exhaustive analysis of the numerous insurance 
contracts 9 is beyond the scope of this opinion. It should be noted, however, 
that with regard to annual policies, there would be little or no impairment since 
the existing contract would terminate before or shortly after the effective date 
of this legislation. The application of H. 4023 and H. 4024 to annual policies 
with renewal rights may not constitute an impairment of the existing contract , 
since the renewal of the existing contract might be viewed as the creation of 
a new contract, especially if there is a modification of the premium or of other 
terms. Attorney General v. Travelers Insurance Co., 385 Mass. 598, 615 (1982), 
remanded on other grounds, 103 S. Ct. 3563 (1983), affd on other grounds, 
391 Mass. 730 (1984). Even for long-term policies, the contractually guaranteed 
benefits may be less than the benefits ultimately received. In that circumstance, 
there would be no impairment of the insured's interest in the contract, since 
there would be no contractual expectation of receiving a higher level of benefits. 

It is thus clear that many existing insurance contracts would be subject to 
no more than a minimal impairment by the enactment of H . 4023 and H . 4024. 
If only minimal alterations of contractual obligations would occur, the inquiry 
ends at its first stage and the statute is constitutional. Allied Structural Steel, 
438 U.S. at 245. Nevertheless, for the purpose of this opinion, I am assuming 
that some existing contracts would be sufficiently impaired to require further 
analysis. 



6 "No state shall . . . pass any . . . Law impairing the Obligation of Contracts . . . ."United States Constitution, art. 1, § 10, cl. I. 

7 Since neither H. 1774 nor H. 1777 would affect existing contracts, those bills would not be subject to a challenge under the 
Contract Clause. The following analysis therefore applies only to H. 4023 and H. 4024. 

8 The provisions which would allow increases of premiums might impair the contractual rights of insureds. The language which 
allows increases but not decreases of benefits might impair the contractual rights of insurers. 

9 For example, some of the contracts affected by these bills may provide coverage for a single year, others may provide coverage 
for a single year but give the insureds certain rights to renew the coverage for future years. Some policies may specify the benefits 
payable at some future time with great exactitude; other policies may guarantee only a minimum benefit and allow the actual 
benefit paid to be determined at some future time. 

10 E.g., G.L. c. 175, § 108A (insurers cannot refuse to sell accident and health insurance because insured is blind or deaf); G.L. 
c. 175 § 108C (insurer cannot refuse to renew insurance because of insured's exposure to DES); G.L. c. 175, §47B (mandating 
psychiatric benefits); G.L. c. 175 § 47C (mandating coverage of newborn and adopted children); G.L. c. 175, § 1 10G (mandat- 
ing a 39 week continuation of laid-off employee in a group health plan); G.L. c. 175, § 1101 (mandating coverage of divorced 
spouses in group plans). 



P.D. 12 109 

The second factor to be considered is the extent to which insurance is already 
subject to state regulation. The existence and extent of prior regulation are 
relevant to a determination of the reasonable expectations an insurer or an 
insured may have had concerning contractual relations and hence determinative 
of whether an impairment is substantial. Energy Reserves Group, 103 S. Ct. 
at 705-706; City of El Paso v. Simmons, 379 U.S. 497, 515 (1965). Once an 
industry is subjected to substantial regulation in a specific area, its contracts 
are considered to be made subject to further regulation on the same topic. 
Veix v. Sixth Ward Building & Loan Association, 310 U.S. at 38; American 
Manufacturers Mutual Insurance Co. v. Commissioner of Insurance, 374 Mass. 
at 1 89-90. Thus, the impairment of a contract in an industry subject to intense 
regulation and in an area already touched by that regulation must be very 
severe before a significant impairment will be found. 

In this case there is intense regulation of the insurance industry. Congress 
has delegated primary responsibility for the regulation of insurance to the states 
in the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-15. Massachusetts has 
exercised that authority by enacting numerous laws regulating the terms and 
availability of insurance policies and mandating specific benefits. 10 The General 
Court has also previously enacted legislation specifically addressing certain 
forms of discrimination in insurance. 11 In addition, federal legislation has 
substantially affected many insurance products. 12 From this extensive and 
intrusive regulatory scheme, insurers and insureds are, or should be, aware 
that their contractual agreements are subject to future state and federal anti- 
discrimination legislation. Indeed, the Supreme Judicial Court has explicitly 
held that the regulation of the insurance industry is such that it places both 
insurers and insureds on notice that future legislation may modify existing 
insurance contracts. American Manufacturers Mutual Insurance Co., 314 
Mass. at 1 94; see also Attorney General v. Travelers Insurance Co., 385 Mass. 
at 616. 

To the extent, if any, that H. 4023 and H. 4024 do significantly impair 
contractual rights, the next step of the analysis is to determine whether the 
proposed legislation "rests on and is prompted by significant and legitimate 
state interests." Energy Reserves Group, 103 S. Ct. at 708. The statute must 
have been enacted to serve a public purpose; the state must be exercising its 
police power rather than merely providing a benefit to a special interest. Id. 
at 705 n. 13 (distinguishing Allied Structural Steel Co., 438 U.S. 234). 



11 E.g., G.L. c 175, § 24A (banning discrimination on the basis of sex in the availability of benefits with respect to health and 
disability insurance); G.L. c. 175, § 122 (banning discrimination on the basis of race or color); G.L. c. 175, § 113B (banning 
use of age, sex, or marital status in the determination of automobile insurance rates); G.L. c. 176D, § 3 (forbidding unfair 
discrimination in life, annuity, health, and disability policies); G.L. c. 176A, §§5,7, 10 (Blue Cross rates must not be unfairly 
discriminatory); G.L. c. 176B, § 4 (Blue Shield rates must not be unfairly discriminatory); G.L. c. 176G, § 16 (rates charged 
by health maintenance organizations must not be unfairly discriminatory). 

12 For example, the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 el seq., provides for com- 
prehensive federal regulation of employee pensions, see Nachman Corp. v. Pension Benefit Guaranty Corp., 446 U.S. 359 
(1980); the Civil Rights Act of 1964, 42 U.S.C. § 2000-2(a) (1), prohibits employer-based insurance plans from providing dif- 
ferent rates or benefits to male and female employees. City of Los Angeles Department of Water and Power v. Manhart, 435 
U.S. 702 (1978); Arizona Governing Committee v. Norris, 103 S. Ct. 3492 (1983); and the Pregnancy Discrimination Act of 
1978, 42 U.S.C. § 2000e(k), requires that pregnancy benefits be provided to employees on the same basis as other health in- 
surance benefits. Newport News Shipbuilding and Dry Dock Co. v. EEOC, 103 S. Ct. 2622, 2637 (1983). 



110 PD- 12 

AD - ts are impliedly limited by. and subject to. the implicit authority 

of the state to exercise its 'police row er' ." Local Division 5 S9 v. Commonwealth 
of Massachusetts, 666 F. 2d 61S. 639 (1st Cir. 1981). "This doctrine reflects 
the importance of allowing states to legislate freely on social and economic 
matters of importance to their citizens, modifyng the law to meet changing 
needs and conditions." Id. The Supreme Court has recognized that the con- 
tinued state regulation of insurance is in the public interest. Prudential Insurance 
Co. v. BenjamiK, 52S U.S. 408, 429-50(1946). State insurance laws, in general, 
unquestionably serve a legitimate public purpose. Attorney General v. Travelers 
Insurance Co., 391 Mass. at ~35. In addition to the public purpose served 
;gulating insurance in general, legislation banning classification on the 
basis Dfsex, race, national origin, or marital status in the business of insurance 
a the particularly important public purr eliminating discrimina- 

tion, a policy that is reflected in Pan 1 . an . 1 . of the Massachusetts Constitu- 
tion as most recently amended by the Equal Rights Amendment. 

The founh and final factor to be considered is whether the legislative provi- 
sions which impair existing contracts are reasonable and appropriate to the 
achievement of the legitimate public purpose justifying the adoption of the 
legislation. Home Building and Loan Association v. Blaisdell, 249 U.S. at 
-. : ; in assessing the fit between means and ends, the couns "properly defer 
to legislative judgment as to the necessity and reasonableness of a panicular 
measure." United States Trust Co. v. New Jersey, 431 U.S. at 23. See also 
East Sew York Savings Bank v. Hahn, 326 U.S. 230 (1945). Particularly in 
light of the deference properly paid to the Legislature's judgment as to the 
appropriate means of accomplishing legitimate ends. I do not believe that this 
proposed legislation could be successfully challenged as ill-suited to achieving 
its stated purpose of eliminating discrimination in insurance. 

Therefore. I conclude that H. 4023 and H. 4024. insofar as they would affect 
pre-existing insurance contracts, would not on their face impermissibly impair 
the obligation of such contracts in violation of the Contract Clause of the 
United States Constitution. 

You have also inquired as to the impact of H. 4023. H. 4024. H. 1774, and 
H. 1"77 on the membership policies of fraternal benefit societies. 13 For the 
following reasons, it is my opinion that these bills would not affect the member- 
ship of such organizations. 14 



. n 



q the kgafity. under casting law, of sacfa me mba shi p criteria. Cf. L'niied Stales Jaycees 
.391Mass-S94.60S4»(1984) (iMrMJinsl^ >pofciesofthe. MavgKto is m s 



P.D. 12 HI 

The relevant portions of the four bills would provide that no fraternal benefit 
society shall, on the basis of race, color, religion, sex, marital status, or national 
origin treat any applicant for insurance differently than it treats any other 
applicant with respect to the availability, terms, conditions, rates, or benefits 
of insurance. I am assuming, for purposes of this opinion, that fraternal benefit 
societies provide insurance only to their members. In such cases, the bills would 
simply direct the societies not to discriminate among their members on the 
basis of sex, religion, race, color, national origin, or marital status and would 
have no effect on the criteria for membership in such organizations. 

My conclusion that these bills would not affect the membership criteria of 
such societies is bolstered by the absence of anything in the stated purpose 
of the bills or in their language which is aimed toward prohibiting or mandat- 
ing membership criteria. To avoid any ambiguity, however, it might be 
advisable to include specific language in the bills which clearly states the 
legislative intention not to affect membership criteria or policies. 

In summary, in accordance with my obligation under G.L. c. 12, § 9, 1 advise 
you that the proposed legislation would withstand a facial challenge under 
the Contract Clause of the United States Constitution and would not affect 
the membership criteria of fraternal benefit organizations. 

Very truly yours, 

FRANCIS X. BELLOTTI 

Attorney General 



June 5, 1984 

Frederick P. Salvucci, Secretary 

Executive Office of Transportation and Construction 

10 Park Plaza 

Room 3510 

Boston, Massachusetts 02116 

Dear Secretary Salvucci: 

In your capacity as Chairman of the Board of the Massachusetts Bay 
Transportation Authority (MBTA), 1 you have requested my opinion as to 
whether the MBTA's interpretation of a state statute 2 requiring that North End 
families of low income be afforded a preference in purchasing condominium 
units constructed on land conveyed to the developer by the MBTA, is consis- 
tent with the pertinent statutory provisions. That interpretation is set forth 
in a record instrument called a Land Disposition Agreement (LDA), a copy 



Although I do not ordinarily provide legal advice or opinions to the MBTA, which I do not consider a state agency for purposes 
of G.L. c. 12, §3, 1 am making an except on in this case due to the Commonwealth's interest in the question raised. See Si. 1981, 
c.807, §2. The MBTA, in addition, has agreed to be bound by my advice on this issue. 



2 St. 1979, c.784, as amended by St. 1981, c. 807. 



112 P.D. 12 

of which is appended to your opinion request. Both the need for an interpreta- 
tion by the MBTA and the desire for my opinion are caused by the fact that 
the words of the statute are not specifically defined and the resulting ambiguity 
in the law. In my opinion, the MBTA has followed a prudent course of action 
in insisting upon the LDA and the interpretation of the preference to be afforded 
to North End residents embodied in the LDA is reasonable and consistent with 
the statute. These conclusions are predicated first on the terms of the law, to 
which I now turn. 

Section 2 of chapter 784 of the Acts of 1979, as amended by Chapter 807 
of the Acts of 1981, directs the MBTA to convey the Lincoln Power Station 
to San Marco Housing Corporation (the developer) for the construction of 
housing. Section 3, as inserted by the 1981 statute; provides that all con- 
dominium units constructed on the property be sold at below market prices. 
It further requires that, in selling the condominium units, the developer shall 
afford a "preference to North End families of low income who have been or 
are threatened with displacement by redevelopment, rehabilitation, or renewal 
of existing North End housing units." Section 4, which was also inserted in 
1 98 1 , provides that if the land is not used for the purposes set forth in the statute, 
the land shall revert to the Commonwealth. 

Pursuant to the MBTA's section 2 duty to convey the property to San Marco, 
you have informed me that the MBTA intends to require San Marco to enter 
into the LDA. The LDA was designed specifically to set forth the steps to be 
taken by San Marco to effectuate the required preference to North End 
residents. You have provided me with a draft of that agreement under which 
San Marco will offer its units first to the preferred group. Because the pre- 
ferred residents may not be able to afford these units, San Marco will also engage 
in a price-skewing process. The LDA requires San Marco to sell a number of 
its condominium units at prices that are above its per-unit development costs 
(but below market price, as required by the statute) and to use the net proceeds 
to reduce the sales prices of other units for purchasers eligible for the statutory 
preference, The sales prices of at least 25 % of the development's units are 
required to be reduced in this manner, except to the extent that San Marco 
is unable to obtain sufficient proceeds from the sale of units above develop- 
ment cost or obtain a sufficient number of purchasers who are eligible for the 
preference and who qualify for mortgages. North End families or individuals 
are eligible to purchase at the reduced prices if their incomes do not exceed 
the income limits for assistance under a federal , state, or local program pro- 
viding assistance to low or lower income households in the purchase of a con- 
dominium unit or a single-family residence. To be eligible they must also be 
tenants currently residing in the North End, present owner-occupants of homes 
in the North End threatened with displacement, or individuals or families who 
have already been displaced from their North End homes. 



P.D. 12 U3 

It is my opinion that the proposed LDA constitutes a reasonable and proper 
administrative interpretation of the statutory requirement that a "preference" 
be afforded to "North End families of low income who have been or are 
threatened with displacement." Moreover, adopting such a record agreement 
may well be the only method of providing definition for the statutory terms; 
neither the courts nor I may cure legislative omissions under the guise of 
statutory construction. See Prudential Insurance Co. v. Boston, 369 Mass. 542 
(1976); 1966/67 Op. Atty. Gen. No. 44, Rep. A.G., Pub. Doc. No. 12 at 95 
(1966). Even if I attempted to define the ambiguous statutory terms, the 
administrative interpretation by the MBTA might well carry more weight. See 
Devlin v. Commissioner of Correction, 364 Mass. 435 (1973). For all these 
reasons, I believe the course of conduct followed by the MBTA to have been 
appropriate. 

Very truly yours, 
FRANCIS X. BELLOTTI 

Attorney General 



114 

INDEX OF OPINIONS 

TOPICS 

Advertising 

Notices in Central Register for horizontal 

construction projects 

Central Register 

Notices for horizontal construction projects 

Condominiums 

Interpretation of statute requiring preference to low-income 
North End families in purchasing condominiums 

Constitutionality 

Anti-discrimination bills 

Consultants 

"Public employees" within meaning of 

Massachusetts Claims and Indemnities Act 

Contracts 

1) Notices in Central Register for horizontal 
construction projects 

2) Constitutionality of anti-discrimination bills 

Discrimination 

Constitutionality of anti-discrimination bills 

Employees, public 

"Public employees" within meaning of 

Massachusetts Claims and Indemnities Act 

Firearms, see Weapons 

Forests and forestry 

Whether park officers may carry firearms 

Insurance 

Constitutionality of anti-discrimination bills 

Lemon Law 

Effective date; definition of "sold" 

Liability 

"Public employees" within meaning of 

Massachusetts Claims and Indemnities Act 

Massachusetts Bay Transportation Authority 

Interpretation of statute requiring preference to 
low-income North End families in purchasing 
condominiums 

Massachusetts Claims and Indemnities Act 

"Public employees" within meaning of Act 



P.D. 12 

OPINION PAGE 

3 
3 



1,2 



1,2 



1,2 



1,2 



P.D. 12 115 

INDEX OF OPINIONS (Cont.) 

TOPICS OPINION PAGE 

Meetings 

Television filming of meetings and hearings by 

Industrial Accident Board 4 

Motor vehicles 

(1) "Public employees" within meaning of 

Massachusetts Claims and Indemnities Act 2 

(2) Effective date of Lemon Law; definition of "sold" 6 

Notices 

Notices in Central Register for horizontal 

construction projects 3 

Parks 

Whether park officers may carry firearms 5 

Public bidding 

Notices in Central Register for horizontal 

construction projects 3 

Public hearings 

Television filming of meetings and hearings by 

Industrial Accident Board 4 

Statutes — administrative interpretation 

Interpretation of statute requiring preference to 

low-income North End families in purchasing 

condominiums 8 

Statutes — effective date 

Effective date of Lemon Law: definition of "sold" 6 

Television and radio 

Television filming of meetings and hearings by 

Industrial Accident Board 4 

Torts 

"Public employees" within meaning of 

Massachusetts Claims and Indemnities Act 1,2 

Volunteers 

"Public employees" within meaning of 

Massachusetts Claims and Indemnities Act 1 

Weapons 

Whether park officers may carry firearms 5 

Words and phrases 

Effective date of Lemon Law; Definition of "sold" 6 



116 P.D. 12 

INDEX OF REQUESTING AGENCIES 

AGENCY OPINION PAGE 

Administration & Finance, Executive Office for 1 

Consumer Affairs and Business Regulation, 

Executive Office of 6 

Energy Resources, Executive Office of 2 

Environmental Management, Department of 5 

Insurance, Joint Legislative Committee on 7 

Labor, Executive Office of 4 

Public Works, Department of 3 

Transportation and Construction, Executive Office of 8 



A J BOOKBINDER 

MAY 1986 

VVALTHAM, MA 02154