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

Public Document 



No. 12 



Siie (Eommnnuiealtli nf ilaaBactiusetta 



REPORT 



OF THE 



ATTORNEY GENERAL 



FOR THE 



Year Ending June 30,1988 




Publication of this Document Approved by Ric Murphy. State Purchasing agent 



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, 1988. 

Respectfully submitted, 

JAMES M. SHANNON 
Attorney General 



P.D. 12 



DEPARTMENT OF THE ATTORNEY GENERAL 



Richard Allen 
Dorothy Anderson 
Linda Andres 
Barbara Anthony'' 
Thomas Barnico 
Judith Beals" 
Max Beck-- 
Susan Beck 
Patricia Bernstein" 
Annette Benedetto*' 
Susan Bernard" 
Despena Billings 
Edward Bohlen 
Phinorice Boldin'" 
Mark Bourbeau 
Ruth Bourquin''- 
Kenneth Bowden 
Philip Boxell, Jr." 
Lee Breckenridge 
Tommy Brewer 
Donald Bronstein'' 
Richard Brunnell 
Edward Cadieux*- 
Cynthia Canavan^" 
Eric Carriker 
Douglas Carrey-Beaver" 
James Caruso 
Michael Cassidy^^ 
Apolo Catala 
Rosanna Cavallaro" 
Francis Chase 
Karen Cheeks-Lomax* 
Mary Connaughton^* 
Cheryl Connors- 
John Corbett'" "' 
Harvey Cotton 
Mark Coven 
Cheryl Cronin" 
Kevan Cunningham' 
Leslie Curley-* 
Stacey Cushner" 
Richard Dalton 
Alice Daniel 
Joyce Davis-* 
Kimberly Davis-* 
George Dean 
Paula DeGiacomo 
Susan DeMatteo*" 
Elaine Denniston'" 
Mary DeNevi 



A TTORNEY GENERAL 
JAMES M. SHANNON 

First Assistant Attorney General 
Gerald T. Fitzgerald 

Assistant Attorneys General 

Ian DeWaal" 
Barbara Dickey-* 
Carol Dietz 
Robert diGrazia** 
Daniel Dilorati" 
Michael Dingle 
John Donohue*" 
Elizabeth Donovan 
Raymond Dougan 
Suzanne Durrell 
Joseph Early*" 
Judith Fabricant'* 
Susan Fendell 
Allan Fierce 
Lawrence Fletcher-Hill' 
Maria Galvagna^' 
Paul Glickman^s 

Steven Goldberg 
Susan Goldfischer 
William Gottlieb' 
Sydney Hanlon 
Nancy Harper'* 
Deirdre Harris" 
Jon Hartmere 
Sandra Hautanen" 
Lila Heideman' 
Deborah Hiatt 
Virginia Hoetling 
Jeffrey Hurwit'^ 
Tung Huynh 
Stephen Jonas 
Edmund Joyal' 
Michelle Kaczynski 
David Kaplan" *' 
John Karagounis 
Stephen Karnas 
Linda Katz 
Gerald Kelley- 
Robert Kilmartin-' 
Maria Kyranos-Mendros*' 
Marek Laas 
Raymond Lamb 
John Landry'* 
Loren Lang-"^ 
Marc Laredo 
Nathaniel Lawrence 
Paul Lazour 
Virginia Lee 
Antoinette Leoney'"* 
Lisa Levy 



Timothy Linnehan-" 
Maria Lopez'* 
Alycia Lyons^^ 
Kenneth Luke^' 
Samuel Marcellino'* 
Jesse Markham''* 
Michael Marks 
Milton Marquis' 
Michael Mascis''' 
Suzanne Matthews 
Janet McCabe 
Lawrence McCarthy 
Kevin McGrath" 
Susan McHugh 
William McVey 
Gary Mena 
Robert Mendillo 
Janet Menna" 
Pamela Merchant 
Paul Merry 
James Milkey 
William Mitchell 
Eric Mogilnicki 
Alice Moore 
Kathleen Moore-' 
Madelyn Morris-* 
Mark Muldoon 
Sherry Mulloy 
Kim Murdock'* 
Henry O'Connell** 
Stephen Oleskey 
Jerrold Oppenheim 
Gwen O'Sullivan-'' 
Frank Ostrander'* 
Howard Palmer 
A. John Pappalardo 
William Pardee 
Nadine Pellegrini' 
Kathleen Pendergast 
Anthony Penski"' 
Carmen Picknally 
Maria Pizarro-Figueroa' 
Stephen Poitrast 
Nancy Preis" 
Richard Rafferty** 
T. David Raftery 
Jamin Raskin'* 
Susan Roberts 
Carmen Rodriguez" 
Abbe Ross-"* 



P.D. 12 



Hilary Rowen 
Joan Ruttenberg 
Peter Sacks'" 
Carole Sakowski 
Judith Saltzman 
Ernest Sarason^" 
Richard Savignano 
Jane Schacter 
Mark Schmidt 
Roberta Schnoor 
Douglas Schwartz^' 
Phyllis Segal 
Kathleen Sheehan 
Margaret Sheehan 
Robert Sherman^'' 
Brison Shipley 
Natalea Skvir 
Carol Sneider 



Dianne Solomon 
Donna Sorgi 
Johanna Soris 
Paul Stein' 

Lauren Stiller-Rikleen^' 
Mark Sutliff 
Pamela Talbot« 
Deborah Thomsons- 
Edward Toro'" 
Michael Tracy 
John Tratlconte'* 
Diane Tsoulas" 
Frances Tucker-" 
Gwendolyn Tyre'' 
Carl Valvo 
Charles Walker" 
Robert Ward'' 
George Weber" 



Madelyn WesseF 
James White 
William White' 
Douglas Wilkins 
Countess Williams' 
Gregg Wilson' " 
H. Reed Witherby 
Carolyn Wood 
Steven Wright 
Sarah Wunsch'* 
Harry Yee 
Andrew Zaikis 
Margaret Zaleski 
Reed Zars 
Judith Zeprun"* 
Stephen Ziedman" 
Peter Zuk 



Assistant Attorneys General Assigned To Division of Employment Security 



Ann Marie Irwin^' 
William Luzier 



Chief Clerk 
Edward J. White 



Maria Moynihan-^ 
Wendy Thaxter*'' 



Budget Director 
Patrick J. Moynihan 



Fiscal Affairs Manager 
Elizabeth M. Connolly 



APPOINTMENT DATE 



TERMINATION DATE 



1. 


7/1/87 


30. 


11/23/87 


2. 


7/6/87 


31. 


11/30/87 


3. 


7/9/87 


32. 


2/1/88 


4. 


7/13/87 


33. 


2/16/88 


5. 


7/15/87 


34. 


3/1/88 


6. 


7/21/87 


35. 


3/7/88 


7. 


7/27/87 


36. 


3/14/88 


8. 


7/30/87 


37. 


4/11/88 


9. 


8/3/87 


38. 


4/13/88 


10. 


8/10/87 


39. 


4/25/88 


11. 


8/13/87 


40. 


5/2/88 


12. 


8/17/87 


41. 


5/9/88 


13. 


8/21/87 


42. 


5/25/88 


14. 


8/24/87 


43. 


5/31/88 


15. 


8/31/87 


44. 


6/1/88 


16. 


9/1/87 


45. 


6/6/88 


17. 


9/3/87 


46. 


6/13/88 


18. 


9/14/87 






19. 


9/21/87 






20. 


9/28/87 






21. 


10/5/87 






22. 


10/13/87 






23. 


10/16/87 






24. 


10/19/87 






25. 


10/20/87 






26. 


10/26/87 






27. 


11/2/87 






28. 


11/9/87 






29. 


11/16/87 







50. 7/6/87 

51. 7/10/87 

52. 7/17/87 

53. 7/21/87 

54. 7/31/87 

55. 8/28/87 

56. 9/11/87 

57. 9/18/87 

58. 9/25/87 

59. 9/30/87 

60. 10/30/87 

61. 11/25/87 

62. 11/30/87 

63. 1/22/88 

64. 1/29/88 

65. 2/12/88 

66. 2/26/88 

67. 3/11/88 

68. 3/31/88 

69. 4/1/88 

70. 4/20/88 

71. 4/22/88 

72. 4/29/88 

73. 4/30/88 

74. 5/2/88 

75. 5/24/88 

76. 6/1/88 

77. 6/10/88 

78. 6/15/88 



P.D. 12 



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P.D. 12 11 

COMMONWEALTH OF MASSACHUSETTS 

In accordance with the provisions of Section 1 1 of Chapter 12 and of Section 
32 of Chapter 30 of the General Laws, I hereby submit the Annual Report for the 
Department of the Attorney General. This annual report covers the period from 
July 1, 1987 to June 30, 1988 and is the second report I have filed as the 
Attorney General of the Commonwealth of Massachusetts. 

Fiscal 1988 was the first full year of my term in office. By June of 1987, the 
transition team had successfully completed its work of staffing and developing the 
various legal directions this department would take. Along with the creation of 
several new divisions and reorganized bureaus a solid foundation had been buih 
for the work ahead. 

My top priority was rebuilding the Criminal Bureau which now includes six 
divisions— Narcotics, Public Integrity, Special Prosecutions, Victim Compensa- 
tion, Division of Employment Security and the Criminal Appellate Division. The 
growing problem of drug abuse and drug dealing crossing county lines mandated 
that the newly created Narcotics Division develop the capacity to handle muhi- 
jurisdictional, long-term drug trafficking cases. The division established an 
impressive first-year record of 32 cases involving 63 defendants, including 48 
cocaine traffickers, and the seizure of more than 12-thousand grams of cocaine. 

This introduction can't begin to highlight the many accomplishments of the entire 
Criminal Bureau, but it should be noted here that the Public Integrity Division 
brought a number of significant cases in an attempt to increase the accountability 
of public officials to the citizens of Massachusetts. 

The Nuclear Safety Unit (NSU), created to represent the citizens of Massachusetts 
on safety issues surrounding the Pilgrim, Vermont Yankee and Seabrook nuclear 
power plants, focused this fiscal year primarily on preventing the issuance of a 
low-power license to the Seabrook Nuclear Power Plant in New Hampshire. Every 
other week, for nine months, NSU attorneys represented the citizens of 
Massachusetts at federal hearings called on the New Hampshire Radiological 
Emergency Response Plans. My view of the legal responsibility of the Atomic Safety 
and Licensing Board (ASLB) differed significantly from that of the plant owners. 
I made clear in my testimony before that board on October 5, 1987, that how the 
board viewed its role in reviewing an emergency plan would be critical to the out- 
come of this case. My position was that their responsibility was to determine whether 
or not this plan would protect the public. The plant owners, on the other hand, 
contended that their job was simply to ensure that there was a plan. My belief, 
based on the Nuclear Regulatory Commission's adoption of an emergency plan- 
ning rule in the wake of the Three Mile Island accident in 1979, was that an ade- 
quate plan must afford a meaningful level of protection to the public. Submitting 
hundreds of pages of testimony and exhibits provided by expert witnesses, our 
attorneys argued that the New Hampshire plan does not adequately protect the public 
health and safety. As the year ended, a decision was expected in the fall. 

The other significant event concerning Seabrook occurred when the NRC 
amended its emergency planning rules. The change adopted by the NRC was design- 
ed to circumvent the constitutional rights and police powers of state and local govern- 
ments. The rule change purported to permit a nuclear power plant, such as Seabrook, 
to operate even if state and local governments determine in good faith that local 
roadways or other such conditions make it impossible for the public to be safely 
evacuated in case of a nuclear accident. I personally appealed that ruling to the 



12 P.D. 12 

First Circuit of the U.S. Court of Appeals in Boston arguing it was arbitrary and 
capricious and a gross violation of the NRC's mandate to protect public safety. 
As the year ended that decision was under advisement. 

Fiscal Year 1988 was also the year increased penalty provisions for most of the 
state's environmental laws went into effect. It was largely through the lobbying 
efforts of our attorneys and legislative staff that this important legislation finally 
passed. Under the new provisions, the Environmental Protection Division responded 
to growing concern over air quality by bringing several successful cases involving 
companies emitting volatile organic compounds. 

I am gratified to report that we have aggressively enforced the rule which says 
any law of the state or federal government designed to protect the health and welfare 
of the people of Massachusetts is incorporated under the Massachusetts Consumer 
Protection statute. In such basic areas as health care and housing we have been 
successful in applying the statute to enforce consumers' rights. For instance, it 
enabled us to bring the first action against an HMO charged with using deceptive 
advertising to promote its plan. The HMO stopped its advertising and allowed 
anyone who joined during the ad campaign to withdraw without penalty and join 
another health insurance plan. And when we learned that seriously ill people were 
routinely waiting up to seven hours in a hospital emergency room, we used the 
Consumer Protection Act to force changes. The statute led to a formal agreement 
improving communications between the in-patient units and the emergency room 
and the ambulance service. It was also instrumental in creating a regional network 
to promptly and effectively handle patient transfers. Significantly, the action marked 
the first time the statue was used to require a hospital to change its procedures for 
the benefit of the community it serves. 

We were also successful in expanding the protections of the state's Civil Rights 
law. The obtaining of a preliminary injunction against three employees of a private 
security firm who were charged with violating the civil rights of two gay men who 
were patronizing and working in a gay bar in Boston, represented the first time 
the Attorney General has invoked the state Civil Rights Act in a case involving 
alleged discrimination on the basis of sexual orientation. 

I have selected a handful of accomplishments to highlight in this introduction. 
Some because they are "firsts" and others because they represent new inidatives. 
They are, however, a fraction of what the department as a whole has achieved which 
the following report shows in great detail. 

I am encouraged by our early successes and they have convinced me that the 
public trust we hold affords us the finest opportunities to help our fellow citizens. 



CRIMINAL BUREAU 

The Criminal Bureau is comprised of six Divisions: Public Integrity, Narcotics, 
Special Prosecutions, Victim Compensation, Division of Employment Security, 
and the Criminal Appellate Division. 

During the 1988 fiscal year, the Bureau prosecuted a wide variety of cases 
developed by its own investigations division, as well as those referred by other 
government agencies or the district attorneys. 



P.D. 12 13 



PUBLIC INTEGRITY 

During this first full fiscal year of the Shannon administration, substantial pro- 
gress was made on the enforcement efforts against crimes of public corruption. 
Those cases have defined the area of public integrity as a significant priority for 
Attorney General Shannon. 

Division lawyers and investigators devote their Ume exclusively to public cor- 
ruption cases. Division cases included: bribery and other violations of the 
Massachusetts conflict of interest statute (M.G.L. c. 268 A); fraud against govern- 
ment agencies in procurement and other matters; election law and campaign finance 
violations; and related larcenies, tax crimes, and other violations of the public trust 
by government officials and by those dealing with public agencies. 

In addition to five attorneys and a seven-man investigative unit that also works 
on Special Prosecutions cases, six State Troopers and four Metropolitan Police 
Officers have been assigned to the Division. 

One of the most important tasks of the Division was to establish and maintain 
working relationships with federal, county and local law enforcement officials, 
and with other agencies of state government including the State Ethics Commis- 
sion, Office of Inspector General, State Auditor's Office, Office of Campaign and 
Political Finance, Criminal Investigafions Bureau and the Department of Revenue's 
Office of Internal Affairs. 

Although public corruption cases are complex and take a significant time to 
investigate and prosecute, several cases were brought by the new unit in fiscal 1988. 
They include: 

Gerard T. Indelicato, the former president of Bridgewater State College and Chief 
Educational Affairs Advisor to Governor Dukakis, was indicted in Suffolk and 
Plymouth counties on 41 counts of conflict of interest, larceny, fraud and tax 
violations. 

William Cosgrove, a 15-year employee of the Department of Revenue, was 
arrested and charged in a scheme involving the alleged preparation and submis- 
sion of fraudulent tax returns to obtain refunds. 

State Senator Joseph Walsh paid an $18,000 civil penalty after admitting that 
he billed both the State Senate and his campaign fund for travel expenses. 

The City Clerk of Beverly was convicted after a jury trial of tax violations for 
his failure to report income he earned from fees collected by his office and as 
municipal census supervisor. He was acquitted of larceny charges. 

A contractor and a supplier were indicted for the alleged submission of fraudulent 
invoices to the Metropolitan District Commission in connection with the supply 
and servicing of traffic signal equipment. The case was developed in cooperation 
with the Office of the Inspector General (IG). 

In another IG case, convictions were obtained against three businessmen, two 
MDC engineers, and a contractor for a padded billing scheme involving the supply 
and servicing of MDC sound amplification equipment. Four of the defendants 
received jail sentences. 

A former deputy sheriff of Middlesex County was indicted for larceny and tax 
crimes allegedly committed in his official capacity. 

The Division also participated in the investigation and prosecution of several 
cases of theft, embezzlement, and tax violations by public employees involving 
abuse of public office. 

A significant number of investigations are continuing. 



14 P.D. 12 

NARCOTICS 

Fiscal 1988 was the first fully operational year for the Narcotics Division. Totals 
from Narcotics Division investigations and prosecutions include: 

32 Cases 

63 Defendants 

48 Cocaine Traffickers Charged 

12,354.78 grams of cocaine seized (approximately 27 pounds) 

$98,053 cash seized (In addition to approximately $1(X),(X)0 seized in a federal 
case, which may be subject to forfeiture under federal law) 

9 vehicles seized; two forfeited 

More than 25 guns, rifles, and other firearms including shotguns and a bullet- 
proof vest. 

In addition, members of the state police unit assigned to the division have assisted 
the Chelsea police department in a series of street cocaine purchases from nine 
individuals. Three were prosecuted by the Division and their cases were resolved 
in the Chelsea District Court. Each received a jail sentence. 

One case referred to this office for prosecution by the Drug Enforcement 
Administration (DEA) involved a DEA special agent who made three ounce quantity 
purchases (164 grams total) from Konstantinos Koulouris. The case was prosecuted 
by Division attorneys in Middlesex Superior Court. Koulouris was convicted on 
all counts and was sentenced to two separate three-year minimum-mandatory terms 
to be served concurrently. In addition, his two-family house in Arlington is the 
subject of a federal forfeiture action. 

In another instance, the state police assigned to the Division initiated a 
counterfeiting investigation which, with the assistance of the U.S. Secret Service, 
resulted in the seizure of approximately $3 million in counterfeit, in various states 
of completion. The Secret Service describes this seizure as the largest in 
Massachusetts in 10 years. 

Other seizures by the Division involved marijuana, heroin, and LSD. 

The Narcotics Division has also participated in drafting and lobbying a number 
of legislative proposals, including the state RICO bill, the narcotics proceeds 
forfeiture bill, the pen register bill, the precursor chemical bill, and the immunity 
bill. 

SPECIAL PROSECUTIONS 

The Special Prosecutions Division investigated and prosecuted environmental, 
tax and major fraud cases. In addition, the Division functioned as the headquarters 
for general criminal investigation and prosecution within the Attorney General's 
office, typically in violent crime or general criminal cases referred to this office 
by District Attorneys because of possible conflict of interest. 

Thirty-five criminal tax cases were litigated during the fiscal year. Twenty-one 
new cases were indicted. Seventeen cases were disposed of, 15 of those with con- 
victions. The criminal tax cases involved a full range of crimes including income 
tax evasion and failure to file, sales tax frauds, failure to pay over collected sales 
and meals taxes, and other violations. 

The Division succeeded in substantially increasing criminal fines levied and col- 
lected in tax cases— a reflection of recent changes in state laws which allowed 
increasing criminal penalties for tax crimes. 



P.D. 12 15 

The Division litigated four significant environmental cases during the fiscal year 
with more under investigation by the six-member Environmental Police Unit 
assigned to the Criminal Bureau by the state's Division of Fisheries, Wildlife and 
Environmental Law Enforcement. Of the four cases prosecuted, two were suc- 
cessfully disposed of with convictions and fines, and two remain in litigation at 
year-end. All four cases involved the illegal disposal of hazardous waste, with related 
transportation and reporting violations. 
The major fraud cases prosecuted during the fiscal year follow: 
—Two cases were brought against Boston attorneys for embezzling of client 
funds. 

—Two insurance agents were charged with collecting insurance premiums 
from customers and illegally converting them to personal use rather than pay- 
ing them over to the insurance carriers. 

—Six former staff members of Boston University Medical Center were 
charged in a commercial bribery scheme. The defendants allegedly padded 
invoices from suppliers and skimmed parking lot receipts at the University. 
Two defendants pleaded guilty; the other four cases are pending. 
Several criminal cases were referred to this office by District Attorneys and were 
prosecuted by Division attorneys. These cases ranged from homicide to assault 
and battery to motor vehicle violations. Others remain under investigation. Several 
involve police officers as defendants or subjects of investigation. 

Several public employee embezzlement and theft cases were prosecuted. The 
Criminal Bureau receives a steady stream of referrals for this type of conduct, and 
prosecutes those where the evidence warrants criminal charges. 

The Division successfully prosecuted a case involving fraudulent auto theft claims, 
also known as operation "Go Fast." During the previous fiscal year, ajoint state- 
federal undercover investigation brought 1 1 1 indictments against these individuals 
as well. The defendants were charged with concealing a motor vehicle to defraud 
an insurer, filing false police reports, and related charges involving automobiles 
which had been falsely reported as stolen by their owners. 

Working in conjunction with the Governor's Auto Theft Strike Force, the 
Criminal Bureau oversaw a 12-month undercover investigation in which more than 
100 automobiles were "given up" by their owners, usually through middlemen, 
and then falsely reported as stolen to collect insurance proceeds. Of the 54 individuals 
charged, all were convicted with the exception of five cases which remained pen- 
ding at year-end and two which were dismissed. 

Criminal enforcement against insurance fraud remains a high priority of Attorney 
General Shannon as one important way to attack the problem of high insurance 
premiums in the Commonwealth. 

Other cases prosecuted or investigated by the Division during fiscal 1988 in- 
cluded welfare fraud, computer theft, criminal contempt of court, consumer fraud, 
arson, civil rights, and frauds against public agencies and private employers. 

EMPLOYMENT SECURITY 

The Employment Security Division in the Criminal Bureau provides the Divi- 
sion of Employment Security (DES) with the legal assistance and representation 
necessary to enforce the Massachusetts employment security laws. The Division 
also handles appellate matters arising from decisions granting or denying unemploy- 
ment compensation benefits to individual claimants. 



16 P.D. 12 

The Division prosecutes employers who fail to comply with the Employment 
Security Law by not filing the necessary reports required by law or paying the taxes 
owed by law to the Division of Employment Security. 

The Division makes every effort to fully imform employers of their rights and 
obligations under the law. As a result, some intransigent taxpayers, when faced 
with the prospect of criminal prosecution, decide to pay their taxes. 

During the fiscal year, 1167 employer tax cases were handled by the division. 
When the year began, 1087 cases were pending, and 80 additional cases were 
received. At the close of the fiscal year, 75 cases were closed, leaving a balance 
of 1 152 employer tax cases pending. 

Applications for criminal complaints were brought in the Boston Municipal Court, 
charging 69 individuals with 640 counts of nonpayment of taxes, totaling 
$1 , 403 , 1 29. 86 owed to the Commonwealth by del inquent employers . The Boston 
Municipal Court issued complaints against 85 individuals for 757 counts of non- 
payment of taxes totaling $1 ,752,374.80. In addition, the Division obtained eight 
convictions on employer tax cases and the court found facts sufficient to warrant 
a finding of guilty in another 40 cases. 

Overdue taxes totaling $1 , 154,086. 34 were collected during the fiscal year, and 
deposited in the Massachusetts Unemployment Compensation Fund. 

The Division successfully prosecuted a single individual who owed more than 
$800,000 in employment security taxes. He was sentenced to serve a year in jail 
with a two-year suspended sentence. 

The Division also prosecutes individuals who collect unemployment benefits while 
gainfully employed and earning wages. Criminal complaints are brought only when 
the facts surrounding the offense have been investigated and criminal intent substan- 
tiated. Complaints are filed in the jurisdiction where the claimant applied for benefits. 

During the fiscal year, 675 fraudulent claims for unemployment benefits were 
handled by the division. When the year began, 645 cases were pending and 30 
more cases were filed. At the end of the year, 63 cases were closed, leaving a balance 
of 612 employer tax cases pending. 

Applications for criminal complaints were brought in the various courts of the 
Commonwealth, charging 39 individuals with 714 counts of larceny totaling 
$109,345. 99 in unemployment insurance benefits fraudulently collected from the 
Commonwealth. The courts issued complaints against 33 individuals for 6i6 counts 
of larceny totaling $96,367.34. In addition, the Division obtained six convictions 
on larceny cases and the court found facts sufficient to warrant a finding of guilty 
in an additional 13 cases. 

Restitution totaling $134,079. 97 "was collected from fraudulent claimants dur- 
ing the fiscal year and many have been restored to the Massachusetts Unemploy- 
ment Compensation Fund. 

The Division also represents the Director of DES— both in cases brought against 
him and also on his behalf. During the Fiscal Year, the Division represented the 
DES Director in 28 cases. Of those cases, 27 were on hand at the beginning of 
fiscal 1988. and one additional case was filed. 

The Division also handled seven appellate cases arising from decisions granting 
or denying unemployment compensation benefits to individual claimants in the 
Supreme Judicial Court or the Appeals Court of the Commonwealth. Six cases 
were pending when the year began and one was filed. Five of the cases were argued 
and closed. Of those, the court upheld the position of the Director's attorney in 
two cases, denied the position in two cases, and the U.S. Court of Appeals affirmed 



P.D. 12 17 

a Motion to Dismiss in one case. 

During fiscal 1988, the Division's case records were computerized, which will 
allow easier identification of repeat offenders. 

VICTIM COMPENSATION 

After a reorganization of the Criminal Bureau, a separate Victim Compensation 
Division under Attorney General Shannon was established in July 1987. 

The Massachusetts Victim of Violent Crime Compensation Act, enacted in July 
1968, was one of the first programs of its kind in the nation. The Victim Compen- 
sation Program is funded through general revenue. The division is also funded by 
a $1 12,000 grant from the state's Victim and Witness Assistance Board, and by 
a $353,000 federal grant from the U.S. Department of Justice. 

Under the provisions of M.G.L. Ch 258A, claimants are eligible to receive up 
to $25,000 for out-of-pocket expenses. Claimants may be reimbursed for medical 
care and mental health treatment, as well as for lost earnings. There is no compen- 
sation for loss of property or pain and suffering. 

Claims are filed in the District Court where the claimant lives and are investigated 
by the Department of the Attorney General. 

The Victim Compensation Division addresses various concerns confronted by 
victims of violent crimes. Among other duties, this Division: 

— Expedites and verifies claims for compensation filed under the State's Vic- 
fims of Violent Crime Compensation Act (M.G.L. Ch 258A); 

— Performs community outreach to create awareness of the protections and 
rights provided by the state's Victims of Violent Crime Compensation Act 
and the Victim's Bill of Rights (M.G.L. Ch 258B); and 

Provides direct services to victims and witnesses involved in cases prosecuted 
by the Attorney General's Criminal Bureau and Civil Rights Division. 

Previously, when claims were handled in the Civil Bureau, the average process- 
ing time for each claim exceeded a year. Since the Victim Compensation Division 
was created, the average prcessing time has been reduced to seven months. The 
goal of the unit is to process claims in 120 days. 

The Victim Compensation Division's accomplishments go beyond the more ex- 
peditious processing of claims. Over the past year, staff advocates have demonstrated 
a substantial effort at guiding victims through the complex network of social ser- 
vices available in Massachusetts. They have assisted complainants to secure tem- 
porary emergency housing; directed victims to several charitable institutions which 
have emergency funds; and they devoted the bulk of their time to securing free 
medical care and welfare benefits for victims whose lives are suddenly and violently 
disrupted. 

During fiscal 1988, the office developed a new brochure and poster designed 
to explain the compensation program. This brochure is available in Spanish and 
English. Payments to victims from the Victim Compensation Fund in FY 1988 
totaled $2,647,018.25, representing 462 claims. 



P.D. 12 



CRIMINAL APPELLATE 



The Criminal Appellate Division handles appeals from cases prosecuted by the 
Criminal Bureau and represents the (Commonwealth in criminal matters in federal 
court (including the United States Supreme Court). The division also handles a 
wide range of post-conviction litigation including federal habeas corpus actions 
challenging state convictions; civil rights suits brought by incarcerated persons, 
petitions for annual review of inmates confined as sexually dangerous persons at 
the Treatment Center at Bridgewater; and supervisory powers litigation in the 
Supreme Judicial Court. 

The Division provides formal opinions to the governor in the rendition of fugitives 
from justice, files amicus curiae briefs in significant appellate cases, and contributes 
to policy and legislative matters concerning law enforcement. 

The Division filed a petition of certiorari in the United Statte Supreme Court, 
seeking review of the SJC's decision in Commonwealth v. Morash. In this case, 
the Supreme Judicial Court ruled that prosecution of employers for failure to pay 
employees for unused vacation time was preempted by the federal "ERISA" statute. 

Division attorneys were actively involved in drafting the brief in Commonwealth 
V. Oakes, in which the Supreme Court agreed to review the SJC's decision striking 
down the state's child pornography statute. 

The Division successfully opposed four petitions for certiorari seeking review 
of decisions favorable to the Commonwealth. 

Attorneys in this Division successfully argued a number of cases in the First 
Circuit Court of Appeals. In 13 cases briefed and argued during fiscal 1988, the 
Division secured decisions in federal habeas corpus and civil rights cases that were 
favorable to the law enforcement interests of the Bureau. Similarly, 10 cases in 
the SJC and 1 1 cases in the Appeals Court were ruled in the Division's favor in 
decisions reviewing criminal convictions and prisoner suits. 

Division attorneys handled 16 contested hearings involving discharge petitions 
filed by sexually dangerous persons; six state habeas corpus trials filed by fugitives 
challenging rendition proceedings; and obtained two favorable federal court jury 
verdicts in civil rights cases. The Division also rendered 290 opinions on the legality 
of rendition demands. 

MEDICAID FRAUD CONTROL UNIT 

During Fiscal Year 1988, the cerdfied Medicaid Fraud Control Unit (MFCU) 
was 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. 

MFCU prosecutes both institutional health care providers and ambulatory pro- 
viders such as doctors, dentists, psychiatrists, laboratories, pharmacies and transpor- 
tation companies. The unit also has successfully prosecuted instances of physical 
abuse to patients in long-term care facilities. 

MFCU opened 74 cases in FY 1 988 . During the year, the unit initiated 1 3 prose- 
cutions and obtained 17 convictions. As a resuU of these convictions, defendants 
paid $101 ,250 in fines, $258,500 in restitution, and $176,5 10 in costs and damages. 
An additional $103,023 in overpayments and $30,080 in patient funds also were 
recovered. Most MFCU prosecutions were initiated through a special grand jury 
specifically impaneled to investigate allegations of Medicaid fraud. 



P.D. 12 19 

During fiscal 1988, MFCU continued its investigation of dental service providers. 
One noteworthy case illustrates the unit's increasing sophistication in using com- 
puterized data processing, which has led to a dramatic increase in the efficiency 
of investigations. 

In this case, a dentist was identified by the Department of Public Welfare's 
Surveillance Utilization Review Subsystem (SURS) of the Medicaid Management 
Information Systems (MMIS). This computerized system helps identify fraudulent 
billing patterns of dental providers by comparing them to normal billing patterns. 
The system found that 99 percent of this dentist's bills filed to the Medicaid pro- 
gram were for three surface fillings. Without the computerized system, the 
fraudulent billings would have gone undiscovered. 

Using this same system, an analysis revealed that virtually all of the dentist's 
bills were either for three surface fillings or repairing broken front teeth. The com- 
puter generated a list of patients who were then examined by two dental consultants 
and the MFCU's staff dental hygenist. A photographic record was made of each 
recipient's mouth, and all recipients were interviewed. 

The investigation concluded that nearly 68 percent of the billings were fraudulent. 
The provider admitted criminal liability and pled guilty to one count of Medicaid 
False Claims and a fine of $10,000, paying $30,000 in restitution, costs and 
damages. The conviction permanently bars this dentist from participating in the 
Massachusetts Medicaid program. 

During fiscal 1988, a lengthy investigation by the MFCU audit staff of a nursing 
home owner unearthed a scheme involving two accomplices who stole high-priced 
prescription drugs from Massachusetts General Hospital. The two, in turn, gave 
the drugs to another individual who resold them to a number of pharmacies 
throughout the state. The courier who distributed the stolen drugs was placed on 
the payroll ofseveral nursing homes as a "no-show" employee. The investigation 
also led to charges that other "no-shows", including the nursing home owner's 
wife, were being carried on the payroll. 

Indictments in the case were returned in September, 1986 against the owner, 
a co-owner who worked as the comptroller, a pharmacist formerly employed by 
the hospital, and five nursing homes corporations. The charges ranged from viola- 
tions of the state's Medicaid False Claims Act to conspiracy to steal pharmaceuticals. 

In April 1988, the owner pled guilty to a charge of receiving stolen property, 
and received a suspended sentence of three to five years. He was ordered to pay 
$25,000 in restitution to the hospital and $15,000 for investigation costs to the 
Welfare Department. In a separate civil agreement, he also agreed to repay $26,700 
to the Welfare Department for carrying his wife and an employee of his pharmacy 
on the nursing home payroll. In addition, two corporate defendants pled guilty to 
charges that "no-shows" were fraudulently included in the nursing homes' cost 
reports. The corporations, which are in bankruptcy, were each ordered to pay a 
fine of $2,500. 

MFCU also successfully prosecuted a taxicab company which pled guilty to exten- 
sive billing fraud when providing transportation to Medicaid recipients. 

The investigation of the case referred to MFCU by the Welfare Department found 
that the Medicaid program was billed between two and six times more than the 
fare allowable under Medicaid billing regulations. The 45 trips examined by MFCU 
were billed by the company hundreds of times. The overpayments totaled $77,000. 
The overcharges covered some 50,000 miles, or the equivalent of two trips around 
the world by taxicab. 



20 P.D. 12 

The corporation's owner pled guilty to larceny and violating the state's Medicaid 
False Claims Act and received a six-month sentence, of which three months were 
served. The owner's wife, who handled company billing, pled guilty to charges 
of Medicaid fraud and larceny and was fined $12,500. The corporation pled guilty 
to like charges and was fined $12,500. In addition, restitution of $77,000 was 
imposed on all defendants jointly and severally. The payments called for under 
the plea agreements totalled $102,000. 

During fiscal 1988, the MFCU concluded two significant cases involving men- 
tal health providers. The first involved a mental health clinic where there were 
allegations that clinic employees were billing for one-hour sessions, when therapists 
were spending thirty minutes or less with Medicaid patients. These charges were 
later confirmed by an investigation and a special grand jury. 

The grand jury returned indictments against the clinic and four of its employees. 
The clinic pled guilty to charges of submitting false Medicaid claims. One of the 
four employees received a six-month suspended sentence in the House of Correc- 
tion, and the other three received probationary terms. Fines and restitution were 
also ordered. Two other therapists entered into civil agreements. The resolution 
of the case led to restitution of $120,000, costs of investigation and damages of 
$60,000, fines of $32,500, and civil recoveries of $12,000. 

The second investigation involved a professional corporation which delivered 
psychiatric services to Medicaid recipients. The provider also upgraded services 
by billing for more time than was actually spent with the patients. Additionally, 
the corporation billed for services by psychiatrists when they were actually rendered 
by staff therapists. These fraudulent claims were primarily for in-patient psychiatric 
services. 

The provider pled guilty to larceny from the Medicaid program and paid restitu- 
tion, costs and fines totaling $92,500. The individual doctors associated with the 
professional corporation were indicted on charges of filing Medicaid false claims 
and placed under the care of the probation department. 

The Medicaid Fraud Control Unit had a number of cases under investigation 
at the close of the fiscal year. 



PUBLIC PROTECTION BUREAU 

The Public Protection Bureau (PPB) consists of 1 1 divisions: complaints, local 
consumer programs, consumer protection, anti-trust, civil rights, environmental 
protection, insurance, public charities, utilities, nuclear safety, and special litigation. 

The Bureau brings affirmative litigation on behalf of the public and represents 
the public in insurance and utility rate hearings. The Bureau also represents state 
agencies and boards that are involved in the public interest. 

CONSUMER COMPLAINTS 

During Fiscal Year 1988, the Complaint Section opened 3,763 consumer com- 
plaint cases, closed 2,323 cases, and assigned 2,458 cases to Complaint Section 
personnel. 

The section recovered $725,654.83 in refunds, savings and the value of goods 
or services for consumers— a reimbursement that would not have been possible 
without the intervention of the department. 



P.D. 12 21 

In addition, 5,889 complaints were processed by the section: 1 ,202 were returned 
to consumers for lack of jurisdiction; 761 were referred to other state or local agen- 
cies; 733 were referred to other agencies in other states; and 3, 193 were referred 
to local consumer programs. 

The Information Line staff received 102,022 phone calls during fiscal year 1988. 
As a result of these calls, 6,819 citizens were sent Complaint/Inquiry Forms; 16,449 
were given general information; and 78,823 were referred to local consumer pro- 
grams or other state or federal agencies. 

The staff also received 181 calls concerning civil rights issues. As a result of 
these calls, 1 16 citizens were sent Complaint/Inquiry forms, and 66 were given 
information relating to civil rights inquiries. 

Additionally, consumer complaints filed against businesses were reviewed 
because of repeat allegations of unfair or deceptive practices which led to dozens 
of referrals to the Consumer Protection Division for further investigation and 
possible litigation. 

LOCAL CONSUMER PROGRAMS 

The Local Consumer Service Unit is responsible for the administration of the 
Local Consumer Aid Fund and awards grants to a network of local consumer and 
face-to-face mediation programs. These community agencies assist citizens 
throughout the Commonwealth in the resolution of consumer problems. The local 
programs work in cooperation with the Department of the Attorney General and 
help identify repeat offenders of consumer laws. 

Funding for the operation of these programs is allocated by the General Court 
to the Local Consumer Aid Fund (LCAF) (M.G.L. c. 12, s. IIG). 

In FY 1988, a total of $78 1 ,007 was used for grants to 27 local consumer pro- 
grams and eight face-to-face mediation programs. During fiscal 1988, $730,551 
was appropriated by the Legislature to the Local Consumer Aid Fund. Ten per- 
cent, or $73,055, was retained for administrative purposes. An additional $12 1 ,500, 
earmarked for the LCAF in the settlement of consumer related cases, was used 
to supplement the Legislature's allocation. Education grants to seven Local Con- 
sumer Programs were funded by $19,500 from the settlement account. 

In FY 1988 there were 27 Local Consumer Programs working in cooperation 
with the Attorney General's office. These local programs, usually part of com- 
munity action programs or city halls, handled 16,823 consumer complaints. Through 
an informal process of telephone mediation, the community agencies saved 
consumers approximately $3.2 million. 

Complaints typically involved automobile repairs and sales, home improvement 
transactions, landlord/tenant disputes and time-share issues. In addition to mediation 
services, the programs serve as a valuable source for general consumer informa- 
tion and advice. 

In FY '88, there were seven fulltime Face-to-Face Mediation Programs, each 
operating with one paid staff person and 20 to 25 trained community volunteer 
mediators. Mediations involved landlord/tenant or consumer disputes. Referrals 
came from local consumer programs, small claims courts, landlord or tenant advo- 
cacy programs, and other community agencies. 

The Face-to-Face Mediation Program provided mediation services by assigning 
250 trained citizen volunteers. A total of 557 face-to-face mediation sessions were 
held — 85 percent resulted in written agreements, with 96 percent of those agreements 
upheld. In addition, 271 cases were resolved over the telephone by face-to-face staff. 



22 P.D. 12 

CONSUMER PROTECTION 

The Consumer Protection Division brings enforcement actions against businesses 
which use unfair and deceptive practices resulting in injury to consumers. Con- 
centrating on cases where consumers cannot reasonably obtain relief through their 
own efforts, the Division's caseload consists primarily of large-scale class actions 
brought on behalf of consumers affected in similar ways by the illegal activities 
of business. The Division's caseload generally addresses housing, health care, finan- 
cial services, and automobiles. 

In Commonwealth v. Loiselle, et al. a final judgement was entered by consent 
in this condominium conversion case. The owners of a 48-unit apartment complex 
in Dracut agreed to comply with the condominium conversion law and provide 
restitution for tenants harmed by their failure to give timely notice of their intent 
to convert the property to a condominium. 

As part of the agreement, the owners have now sent written notice of all of the 
protections of the law to their present tenants and to the former tenants who moved 
out after the defendants purchased the property on March 3 1 . In addition to giving 
the tenants all the protections required by law, the owners also agreed to a number 
of terms to compensate tenants for losses suffered because of the owners' initial 
failure to comply with the law. 

The defendants agreed to pay the Commonwealth a civil penalty of $5,000 under 
the Consumer Protection Act and pay up to $24,000 more if at least eight present 
or former tenants do not buy their apartments at the reduced price. 

A preliminary injunction was issued in Commonwealth v. Douglas Nason against 
Douglas Nason for repeated violations of the Massachusetts Lead Paint Law and 
hundreds of violations of the State Sanitary Code in at least three Attleboro apart- 
ment buildings. Despite repeated orders by the Childhood Lead Prevention Program 
dating back to 1982 and the Attleboro Health Department, the defendant failed 
to bring his 16 apartments into compliance. 

The injunction orders the defendant to remove or adequately cover lead paint 
or other such material contained in the property which houses sixteen Cambodian 
families and more than 30 children; to comply with outstanding orders issued by 
the Attleboro Health Department and Childhood Lead Prevention Program; and 
to provide a representative of each rental unit with a written notice to disregard 
recent rent increases issued by the defendant. 

The Attorney General filed suit in Suffolk Superior Court to prevent the closing 
of Chelmsford Mobile Home Park and eviction of 600 residents in Commonwealth 
V. Chelmsford Trailer Park, Inc. The park residents own their own mobile homes 
but rent the lots on which the homes are installed. The park land is owned by 
Chelmsford Trailer Park, Inc. whose principals are James DeCotis of Saugus and 
Carl DeCotis of Salem. 

The complaint alleges that the owners sent the closing notice in retaliation for 
the residents' success in obtaining rent control. The notice was sent three months 
after the owners lost a legal battle over rent control with the residents, the Town 
of Chelmsford and the Attorney General. The complaint also alleges that the clos- 
ing notice was intended to frighten residents into voluntarily giving up their rent 
control rights. 

If the homeowners are forced to move because of the announced closing, they 
stand to lose more than 60 percent on the resale value of each home. The total loss 
to homeowners, some of whom are elderly and living on fixed or low to moderate 



P.D. 12 23 

incomes, and many of whom have devoted their Ufe savings to the purchase of 
their homes, would exceed $4.9 million. Under a stipulation the defendants agree 
to take no action to close the park or evict any tenants until all legal proceedings, 
including appeals, have been completed. 

In Commonwealth v. Worcester City Hospital, an Assurance of Discontinuance 
was filed after the hospital agreed to stop posting the names of individuals who 
tested positively for the antibodies to the AIDS virus in its laboratories. This agree- 
ment was the first enforcement of c 1 1 1 , §70F which guarantees the right to con- 
fidentiality of persons tested for antibodies to the HIV virus. 

Assurances of Discontinuance were filed against Maiden Hospital and Central 
Hospital for the denial of care to General Relief recipients. (Commonwealth v. 
Maiden Hospital and Commonwealth v. Central Hospital) 

The two cases were based on a 1984 amendment to the state's hospital cost con- 
tainment law which required all hospitals to provide medically necessary care to 
General Relief recipients. The law was intended to create an entitlement to care 
for General Relief recipients. In both cases, the hospital had turned away General 
Relief recipients who were seeking either alcohol detoxification or in-patient 
psychiatric services. 

In the Matter of South Shore Hospital, Inc. , an Assurance of Discontinuance 
relating to hospital emergency room ("ER") procedures was executed by the presi- 
dent of South Shore Hospital and filed in Suffolk Superior Court on November 
9, 1987. This Assurance, obtained pursuant to C.93A, §5. is the first to impose 
specific obligations on a hospital administration inpatient care. 

South Shore Hospital's ER is the third largest in the state; it receives and cares 
for about 45,000 patients each year. However, an investigation conducted by the 
Department of Public Health (DPH) revealed many serious deficiencies in the way 
patients have been treated. These included the hospital's practice of permitting 
acutely ill patients to remain in the ER for inordinately long periods of time (up 
to 13 hours) after diagnosis before either admitting them or transferring them to 
another facility; and the hospital's failure to regulate the flow of pafients through 
its ER when the availability of in-patient beds was limited. Accordingly, the 
Assurance establishes procedures to eliminate the deficiencies, helps regulate patient 
"traffic" to and through the hospital's ER, and ensures the delivery of appropriate 
patient care as promptly and efficiently as possible. 

In Commonwealth v. Health Enterprises of Massachusetts, Inc. d/b/a Jamaica 
Towers Nursing Home, suit was filed against the operator of the Jamaica Towers 
Nursing Home. The complaint alleged serious patient neglect and violation of several 
state and federal regulations governing the delivery of health care in nursing homes. 
At the same time, a Stipulation in Lieu of Injunction was executed and filed under 
which the provider, H.E.A. of Massachusetts, Inc. ("H.E.A."). agreed to transfer 
complete management and control of the nursing home to a new, unrelated 
administration. 

The complaint describes serious substandard conditions which DPH investigators 
uncovered throughout the 120-bed facility. It specifically alleges that neglect 
contributed to the death of a 94-year-old patient from a urinary infection. At approxi- 
mately the same time, and as a result of DPH recommendations, HCFA decerti- 
fied Jamaica Towers from both the Medicare and Medicaid programs. That action 
stopped the flow of federal funds to the facility. 

In the Stipulation, H.E.A. agreed to a two-stage withdrawal from control of the 
home. During the first stage, it has been financing the rehabilitation of the home, 



24 P.D. 12 

investing an initial $100,000 for an independent expert to remedy deficiencies. 
The second stage, which will begin if and when the home is recertified for 
Medicare/Medicaid funding, involves finding a DPH-approved operator to assume 
permanent control of the facility. 

A Complaint and Petition for Appointment of a Receiver was filed against Beverly 
Enterprises-Massachusetts, Inc. d/b/a Greyclijfs on Cape Ann Nursing Home 
("Greyclijfs"). The Complaint/Petition alleged that Beverly Enterprises, one of 
the nation's largest nursing home chains and owner/operator of Grey cliffs, neglected 
patients living in the 101 -bed facility so grievously that the patients were put at 
risk of death or serious physical injury. Conditions became so bad that DPH ter- 
minated the facility's Medicaid certificafion on December 15, 1987. 

At the eleventh hour, just prior to our asking the Court for the establishment 
of a receivership pursuant to M.G.L. c. 1 1 1 , §72N, Beverly stepped forward. The 
company agreed to give up control of Greycliffs immediately, to install and pay 
for a so-called "functional receiver" to operate the facility, and to sell the nursing 
home to a suitable buyer approved by the state. The sale would follow a full 
rehabilitation of Greycliffs and Beverly also agreed to pay the the expenses of the 
long-term care expert chosen by the Commonwealth to act as the "functional 
receiver' ' . These terms were formalized in a Stipulation in Lieu of Order Appoint- 
ing Receiver which was filed in Suffolk Superior Court on December 16, 1987, 
together with the Commonwealth's Complaint/Petition. 

In the matter oi Attorney General and Department of Public Health v. H.E.A. 
of Massachusetts, Inc. d/b/a Anlaw Nursing Home, Peter Kern and Marie Bergeron 
the Division obtained the appointment of a patient-protector receiver to take over 
the operation and control of the Anlaw Nursing Home in Lawrence. At the same 
time, a C.93A action was filed against the defendants charging them with violating 
state/federal regulations governing the delivery of health care, and with numerous 
instances of repeated patient neglect. 

Litigation was speedily initiated following reports from DPH that the already 
substandard conditions were seriously deteriorating. The home was functioning 
without either an Administrator or Director of Nurses. Many of the patients were 
not being properly fed and were left lying in their own feces and urine. 

Attorney General et al. v. Grover Manor Chronic Hospital et al. resulted in the 
largest financial settlement recovered in any case involving patient neglect. The 
defendants agreed to pay the Commonwealth $550,000 to settle the receivership 
and consumer protection actions brought against them. A final consent judgment 
was entered on February 5, 1988, and approved by Superior Court Justice John 
Irwin, Jr. 

In Commonwealth v. Healthway Medical Plan, Inc. , a consent judgment was 
entered in Suffolk Superior Court in the first consumer protection action brought 
by this office against a health maintenance organization ("HMO"). The complaint 
filed with the judgment alleged that Healthway Medical Plan, Inc. ("Healthway"), 
a South Shore HMO, committed unfair and deceptive acts while promoting its health 
plan at employer-sponsored health fairs. Specifically, it alleged that Healthway 
printed and distributed a so-called consumer comparison guide which purported 
to compare the services of four competing HMOs (including Healthway 's). The 
guide indicated that Healthway provided all the services listed on its chart while 
falsely suggesting that its competitors did not offer the same or similar coverage. 

The judgment, approved by Judge Andrew Gill Meyer, permanently enjoins 
Healthway from further creating or disseminating any form of sales presentation 



P.D. 12 25 

or promotional materials which mislead consumers. In addition, Healthway agreed 
to permit those consumers who thought they had been misled by the guide to 
withdraw from Healthway 's plan without penalty and to help their transfer to another 
health plan. Finally, Healthway paid the Commonwealth $2,500 in civil penalties 
and $2,000 for costs and attorneys fees. 

Legan action was taken against a number of drug stores for selling expired infant 
formula: Commonwealth v. OscoDrug, Inc.; Commonwealth v. Heartland Drug; 
Commonwealth v. Walgreen Co.; and Commonwealth v. Rite-Aid Inc. Complaints 
were filed in Suffolk Superior Court under the Consumer Protection Act against 
all four companies. Our investigation found retail stores selling or offering for sale 
infant formula after the "use-by" date marked on the product. Experts indicate 
that such products may be nutritionally deficient, have rancid or poor flavor, and 
be potentially harmful to children. 

On November 25, 1987, a preliminary injunction hearing was held requesting 
the defendants be enjoined from selling or offering for sale infant formula once 
the "use-by" date expires. Injunctions were issued against Ocso Drug, Inc., 
Heartland Drug, and Walgreen Co. In the case of Rite-Aid, Inc., a Stipulation in 
Lieu of Injunction was entered because the company agreed to abide by the expira- 
tion dates on the products. 

In Commonwealth v. Champney, a settlement providing a permanent injunction 
was entered stopping adoption activities by this Plymouth woman until she is 
licensed. It also barred misrepresentations about the health and availability of 
children for adoption should she secure a license. Champney was required to pay 
$20,000 to six couples and other individuals who had attempted to adopt children 
through Champney without success or whose adoptive children required exten- 
sive medical care. Champney facilitated the adoption of more than 300 children 
between the mid-1970s and the 1984 entry of the preliminary injunction. Many 
couples reported a number of practices including misrepresenting the date of ar- 
rival and health of the adopted children. 

The judgment also requires that $10,000 be held in a trust account for six months 
to pay potential future claims against Champney, and for the payment of $1 1 ,700 
to the Commonwealth as part of a penalty and for costs. 

A trial was held in Commonwealth v. Montgomery for violations of a prior 
preliminary injunction. The earlier preliminary injunction had enjoined defendants 
from providing unlicensed day care in Roxbury. At trial, it was determined that 
defendants continued to provide day care at the Blue Hill Revival Center in Dor- 
chester despite the earlier injunction. Following the trial, the defendants were found 
in contempt and ordered to pay a $20,000 fine. 

In Commonwealth v. Freedlander, Inc. The Mortgage People, a final judgment 
was obtained for charging excessive interest on second mortgages of $1,500 or 
more on real estate with an assessed value of less than $40,000. The judgment per- 
manently enjoins the defendant from charging interest in excess of the statutory 
limit and required the defendant to pay approximately $37,400 in restitution to 
injured consumers, and a $5,000 civil penalty to the Commonwealth. 

In the Matter of Commonwealth Mortgage Cotnpany, Inc., this Assurance 
represents the last of the cases initiated in 1986 after consumers complained that 
lenders were not honoring commitments on locked-in mortgage interest rates. 

Under the terms of the Assurance of Discontinuance, Commonwealth Mortgage 
Company agreed to honor locked-in mortgage rates for 23 consumers who did not 
receive the promised rate even though they were not at fault in delaying the loan 



26 P.D. 12 

closing. Commonwealth agreed to either rewrite the loan or make up the difference 
between the original locked-in rate and the closing rate for the life of the loan, 
with Commonwealth making an annual refund of interest payments. Commonwealth 
further agreed to provide full disclosure, both orally and in writing, at the time 
of application, which outlines the reasons and circumstances for which a mortgage 
loan may not close within a locked-in period. 

In Re: Malmart Mortgage Company, as a result of intervention in this major 
mortgage company bankruptcy, a court order was secured requiring the trustee 
to segregate tax and insurance premium payments made to the company by mort- 
gagors. A number of specific problems have arisen as Malmart transfers its mort- 
gages to other servicing companies as part of its liquidation. Additional legal theories 
are being developed to protect consumers in the event Malmart cannot maintain 
its obligations. 

Commonwealth v. William W^o/j^resulted in a preliminary injunction in Norfolk 
Superior Court barring Wolff from further operating his loan brokerage business. 
Wolff was a Quncy loan broker who promised to obtain mortgage loans for many 
consumers but never procured the loans. The preliminary injunction also prohibits 
Wolff from destroying, concealing and transferring any records of his business 
activities and from conducting any other business in the Commonwealth without 
prior written notice to the Attorney General. The injunction incorporates the terms 
of a temporary restraining order obtained on Feb. 5, when the Court granted our 
request for a $30,000 attachment on Wolffs bank accounts. 

On Feb. 4, Wolff was arrested on 14 counts of larceny by false pretenses brought 
by the Criminal Bureau stemming from his loan brokering activities, and held on 
$25,000 bail. On Feb. 10, he was indicted on 22 additional counts of larceny by 
false pretenses stemming from the same activities. 

In Commonwealth v. National Credit Services, Inc. , a final judgment was entered 
in Suffolk Superior Court against National Credit Services, a Los Angeles based 
debt collection business that was operating in Massachusetts. The collection business 
had attempted to collect payments from Massachusetts residents by threatening 
people with claims they could be arrested or that their wages could be attached. 
The suit was filed under Chapter 93, which governs the activity of debt collection 
agencies. 

Under the terms of the judgment. National Credit Services is prohibited from 
any debt collection activities in Massachusetts until it meets all the licensure require- 
ments of the Commission on Banks and Banking. 

On Dec. 1 , 1987, a temporary restraining order (TRO) was granted in Shannon 
V. Sally Campbell, Donna Asaili, etal. : to prevent promoters of a pyramid scheme 
from participating in or recruiting for the scam. The TRO coincided with criminal 
arrests made by state troopers assigned to the Criminal Bureau. A civil complaint 
naming 33 individuals as well as John Does 1-100 and Jane Does 1-100 was filed 
on Nov. 30, 1987 alleged violations of the "pyramid" statutes, G.L. c.271, §§6 A 
and7andG.L. c.93A, §2 for promoting the "Airplane Game," a pyramid scheme 
designed to provide a $12,000 return on a $1,500 investment. 

At the preliminary injuncdon hearing on Dec. 10, 1987. the court approved 
Stipulations In Lieu of Injunction and granted the injunction for the 33 named 
defendants as well as seven others served under the John and Jane Does. 

This effort has seriously hindered the pyramid scheme which had caused hun- 
dreds of consumers throughout the state to lose thousands of dollars. 



P.D. 12 27 

A complaint and consent judgment were entered against Time Out Properties, 
Inc. and other defendants for the operation of the time-share development Mariner 's 
Point Beach Club of Falmouth. The lawsuit alleged that the owners and managers 
of Mariner's Point had engaged in unfair and deceptive practices in the sale of time- 
share units in violation of the state's consumer protection laws. 

As a result of an investigation into ticket selling practices, the Boston Red Sox 
Baseball Club agreed to enter into an Assurance of Discontinuance. Under the terms 
of the Assurance, the Red Sox agreed to refrain from imposing a surcharge on 
credit card transactions. In lieu of restitution to consumers, the Red Sox agreed 
to distribute 3,380 tickets to local recreation departments for games during July 
and August of the 1988 season. 

After an eight day trial, in Commonwealth v. Wellesley Toyota Company, Inc. 
etal. , the jury found that of the 10 consumer witnesses presented by the Common- 
wealth, all had been compelled to buy unwanted features such as rustproofing, 
soundproofing and pinstriping in purchasing the automobile of their choice. Respon- 
ding to special questions framed by the court, the jury also listed the specific items 
consumers were required to purchase. Furthermore, in response to a third special 
question, the jury found that five of the consumers had been misled by the defen- 
dants' failure to disclose material facts about the options, including the location 
where they were installed. 

The Commonwealth sued Dedham Nissan, Inc. for failing to have certain stickers 
posted on automobiles offered for sale as required by state and federal law. 

Federal law requires that all new cars and station wagons have the so-called 
"Monroney " sticker applied to the side window of new vehicles to inform customers 
of the Manufacturer's Suggested Retail Price including factory installed options 
and freight. The Federal Trade Commission requires all used cars offered for sale 
by a dealer to have the "Used Car Buyer's Guide" affixed which informs customers 
of the warranty protection, including implied warranties, that accompany the sale 
of the vehicle. Massachusetts requires all new vehicles to also have affixed the 
nodce of New Car Lemon Law rights required by G.L. c.90, §7N 1/2. The dealer 
is enjoined from future violations and paid $9,000 in civil penalties. 

During fiscal 1988, the Consumer Protection Division obtained dozens of con- 
sent judgments, assurances of discontinuance, and letter agreements from 
automobile dealerships and individual officers. The Division's program of monitor- 
ing and enforcement is continuing. 

The Consumer Protection Division has continued its enforcement of unfair and 
deceptive advertising practices by monitoring retailers' compliance with the 
Attorney General's retail advertising regulations. The Division has obtained many 
assurances of discontinuance and letter agreements over the past few years, including 
a number over the past few months, for violations relating to the retailers' use of 
manufacturer's suggested retail price comparisons, and the range of price adver- 
tisements in which the retailer fails to identify the basis of its savings claims. 

Our office has been actively organizing the offices of other attorneys general 
across the country to address the critical safety hazards posed by all-terrain vehicles 
(ATVs). ATVs are three- and four-wheeled motorized off-road vehicles which, to 
date, have claimed the lives of nearly 900 people, half of whom have been children. 

In October, 1987, Massachusetts and a number of other states called for a meeting 
with American Honda Motor Company, the manufacturer of nearly 70% of the 
ATVs sold in the United States. Our organizational efforts helped to recruit 28 
states, plus the territory of Guam, to be represented at this November meeting. 



28 PD- 12 

We wanted to discuss a number of safety issues, including a possible ban and recall 
of ATVs, but Honda's presentation ignored our concerns. 

On December 30, 1987, the U.S. Department of Justice filed a preliminary settle- 
ment decree in U.S. District Court between the Consumer Product Safety 
Commission (CPSC) and the five ATV manufacmrers— Honda, Yamaha, Kawasaki, 
Suzuki, and Polaris. The settlement required the industry to implement a number 
of safety measures, including a suspension of sales of three-wheeled vehicles, 
mandatory changes in the advertising and promotion of ATVs, letters of warning 
to ATV purchasers, new warning labels and signs, and free training. However, 
because the decree did not allow ATV purchasers to return their vehicles and ob- 
tain restitution and did not call for a ban of all ATVs which do not meet certain 
basic performance standards. Attorney General Shannon and other attorneys general 
called the settlement deficient. 

On February 23, 1988, thirty-two states, led by Massachusetts, California, and 
New York, filed an amicus brief responding to the terms of the preliminary con- 
sent decree. 

On April 18, 1988 Attorney General Shannon represented the 32 states in arguing 
in U.S. District Court that the decree was inadequate to protect the lives of children 
and prior ATV purchasers. The Attorney General told the court that children under 
16 are not able to competendy operate these complex vehicles and that ATVs should 
not be sold for children's use. He stated that three-wheelers should be taken off 
the market and that the only effective remedy for current owners is the refund offer 
by the manufacturers to anyone who wants to return their vehicles. 

As a result of the argument, certain modifications were made in the final decree 
before approval by Judge Gerhard Gesell. 

At the winter meeting of the National Association of Attorneys General (NAAG), 
the Association adopted guidelines addressing abuses by the airlines in fare adver- 
tising and frequent flyer programs. As a member of the NAAG executive commit- 
tee responsible for the guidelines' enforcement, Massachusetts is participating in 
a multi-state effort to ensure airline compliance. 

While the guidelines have no regulatory effect, they serve notice to the industry 
about the kinds of practices the states view as violations of various unfair and decep- 
tive practices laws. For example, the most controversial guidelines require the clear 
and conspicuous disclosure of limitation and restrictions on fares, as well as the 
total price of fares. 

In State of Alaska v. U.S. Department of Transportation, Massachusetts and 24 
other Attorneys General challenged a U.S. Transportation Department Order which 
would allow airlines to advertise the cost of international air transportation without 
listing the full price consumers must actually pay. 

The lawsuit, filed in the U.S. Circuit Court of Appeals for the District of 
Columbia, was based on guidelines drafted by the NAAG. Under those guidelines, 
airlines are required to list the full price of all airfares advertised or stated to 
consumers. 

On March 10, the Department of Transportation issued a new Order which would 
permit advertisers to exclude foreign departure taxes, customs fees, immigration 
fees, security fees, agricultural inspection fees, tourist and fuel surcharges, and 
any other charges that would be imposed by the federal, state, or local govern- 
ments on the total advertised price. These added surcharges increase the round- 
trip ticket price by an average of $20-23 and apply to consumers purchasing tickets 
for international flights. 



P.D. 12 29 



ANTITRUST 

The Antitrust Division enforces both federal and state antitrust laws and investi- 
gates any suspected violations of the law. The following are summaries of signifi- 
cant activities of the division in Fiscal Year 1988. 

In Commonwealth of Massachusetts v. Campeau Corporation, the Com- 
monwealth simultaneously filed a complaint against the Campeau Corporation, 
parent company of the Jordan Marsh Co., seeking to enjoin Campeau Corpora- 
tion's acquisition of the parent company of Filene's Federated Department Stores, 
and a consent decree resolving the Attorney General's objections to the merger. 
The consent decree requires the Campeau Corporation to divest both Filene's and 
Filene's Basement Department Stores within 320 days of the court's final approval 
of the decree. 

The Campeau Corporation has agreed to sell Filene's to the May Company and 
Filene's Basement to a capable purchaser who intends to continue to operate Filene's 
Basement as a viable competitor in the retail department store business. The con- 
sent decree prevented the two traditional department store rivals in New England, 
Filene's and Jordan Marsh, from being controlled by a common owner. The states 
of New Hampshire and Maine were also parties in this action. 

In a multistate insurance antitrust lawsuit, the Commonwealth and seven other 
Attorneys General filed actions in the United States District Court for the Northern 
District of California against 32 defendants including insurance companies, rein- 
surers, intermediary brokers and trade associations. The complaint alleges that 
the defendants manipulated the market for commercial general liabiliry insurance. 
The suit is a class action with the towns of Milford and Hanover named as class 
representatives. 

The complaint charges that four U.S. insurers— Allstate, Hartford, Aetna, and 
CIGNA— conspired with members of Lloyd's of London, domestic reinsurers, the 
Reinsurance Association of America, and the Insurance Service Office (ISO) to 
significantly reduce coverage of their standard commercial general liability (CGL) 
insurance policy— the insurance purchased by most businesses, public agencies, 
and nonprofit organizations. CGL policies cover a wide range of liabilities to third 
parties resulting from actions or inactions of municipalities and businessess which 
cause personal injuries and property damage. 

The complaint charges that the insurers and reinsurers unlawfully exercised their 
market power through boycotts and threats of boycotts to guarantee that no competi- 
tors could offer broader coverage than the reduced insurance they offered. 

The suit is the result of a two-year, multi-state investigation led by Massachusetts, 
California, New York and Minnesota into the liability insurance crisis. On June 
14, 1988, 10 other states joined in the lawsuit. 

The actions seek treble damages for those public entities injured by the defen- 
dants. The complaints also ask the federal court to enjoin defendants from further 
violations of law and to order broad structural relief that will prevent further abuses. 

In Commonwealth of Massachusetts v. Pepsi-Cola Metropolitan Bottling Com- 
pany, et al. , the Division filed actions against 22 soft drink and beer distributors 
alleging violations of the Mandatory Beverage Container Deposit Act, also known 
as the Bottle Law. The statute requires distributors to segregate deposits in a "fund 
which shall be maintained separately from all other revenues" . The Commonwealth 
charges the defendants with violating the statute by failing to keep deposits in separate 
bank accounts. The complaint seeks civil penalties and the payment of all unclaimed 



30 PD- 12 

bottle deposits to the Commonwealth. 

The Division filed an amicus brief in Patriot Cinema v. General Cinema, et al. , 
on behalf of the Commonwealth and the states of Maine, New Hampshire and Rhode 
Island in the U.S. First Circuit Court of Appeals. The brief supports a movie theatre's 
appeal of the removal of its state antitrust action against several national motion 
picture exhibitors and distributors to federal court. The lower court ruled that plain- 
tiffs state court action was an "artfully pled" claim under the federal Sherman 
Antitrust Act. The Antitrust Division argued that the lower court misapplied the 
"artful pleading" doctrine and so doing, created a federal preemption of state 
antitrust laws. 

The Court of Appeals found the appeal moot because the plaintiff had represented 
in a subsequently filed state court action that it did not intend to pursue its antitrust 
claim, regardless of the outcome of the appeal. The Court, however, in a lengthy 
footnote, made it clear that it accepted the Commonwealth's arguments and that 
if faced squarely with the issue would reject attempts to remove state antitrust actions 
to federal court under the artful pleading doctrine. 

In the Matter oi Piedmont-US Air Merger, Piedmont Airlines and US Air entered 
into an agreement settling the Commonwealth's objections to their Piedmont-US 
Air merger. The Commonwealth had filed preliminary comments with the U.S. 
Department of Transportation raising concerns that the proposed merger would 
substantially reduce competition on a number of routes common to both carriers. 
The Commonwealth was concerned that the US Air-Piedmont entity would 
monopolize non-stop jet service between the city pairs of Boston and Baltimore, 
Rochester, Buffalo and Syracuse. 

To satisfy these concerns, the airlines agreed to maintain a prescribed number 
of daily non-stop roundtrips for the city pairs. The airlines further agreed to main- 
tain coach and discount fares on the flights, as well as flights from Boston to Ithaca, 
Elmira and Binghampton, at a level consistent with coach and discount fares in 
comparable markets. 

The Commonwealth filed an action under the Massachusetts Antitrust Act in 
Commonwealth of Massachusetts v. J.F. , Inc. et al. in Hampden Superior Court 
against seven liquor and convenience stores charging them with price fixing. The 
action charges the defendants with jointly advertising the prices of alcoholic and 
grocery products. The complaint alleges that the joint advertising of prices on these 
items constitutes a per se violation of the state antitrust act. 

CIVIL RIGHTS 

The Civil Rights Division enforces the Massachusetts Civil Rights Act which 
authorizes the Attorney General to seek injunctive relief when the exercise of legal 
rights is interfered with by threats, intimidation, or coercion. A total of 21 new 
injunctions against 62 defendants were obtained by the Division involving racial, 
religious, and anti-gay violence. Criminal contempt arising out of violations of 
a previously acquired injunction was issued against one defendant. 

A total of 1 1 injunctions with 25 defendants involved incidents in Boston. Three 
of the cases arose in Dorchester, two in downtown Boston, two in Charlestown, 
one in Roxbury. one in South Boston, one in Hyde Park and one in Roslindale. 

Four injunctions involving 12 defendants occurred in Somerville. Two injunc- 
tions involving six defendants occurred in Lynn. One injunction involving three 
defendants occurred in Stoughton. One injunction against 10 defendants occurred 



P.D. 12 31 

in Brockton. One injunction involving four defendants occurred in Wellesley . One 
injunction involving two defendants occurred in Medford. 

IN Commonwealth v. Guilfoyle, the Supreme Judicial Court affirmed the gran- 
ting of a permanent injunction against the defendant for his participation in racial 
incidents that took place in the Savin Hill area of Dorchester. The Court held that 
juvenile defendants in civil actions under the Massachusetts Civil Rights Act are 
not entitled to the special protections of juvenile statutes; the scope and duration 
of the injunctions were highly reasonable and within the sound discretion of the 
trial judge; there is no right to a jury trial under G.L. c. 12 sec. IIH; and 
preponderance of the evidence is the correct standard of proof in such actions. 

The Division convened a group of Somerville civic, education, social service, 
law enforcement and housing leaders to discuss problems of racism and racially 
motivated violence in the city. Discussions included the need to communicate the 
message that civil rights violations are illegal, reviving recreational programming 
for youth, street outreach to older adolescents, and the dearth of women and people 
of color in leadership positions in the city. 

Attorney General Shannon informed the Quincy School Committee that its policy 
requiring employees to report a diagnosis of AIDS or evidence of HIV infection 
violated privacy and anti-discrimination laws. The School Committee rescinded 
the policy two days later. 

The Attorney General filed suit {Attorney General v. Harold Brown) against a 
private landlord, alleging violations of the Massachusetts Anti-Discrimination Law 
and seeking declaratory and injunctive relief for recipients of federal housing sub- 
sidies (Section 8 certificate holders). The complaint alleged that the landlord's refusal 
to rent to recipients constitutes discrimination "solely because the individual is 
such a recipient ' ' in violation of M . G . L . c 1 5 1 B sec 4(6) and that , since most reci- 
pients are members of racial minorities, the policy discriminates on the basis of 
race in violation of Sec. 4(10). 

The Housing Court granted the Attorney General's motion for summary judg- 
ment on both allegations. Brown appealed and the Supreme Judicial Court granted 
direct appellate review. The SJC later reversed the summary judgment on the basis 
that there are disputed issues of fact material to a determination of whether the 
landlord's reason for refusing to accept Section 8 tenants were legitimate business 
reasons which may constitute a defense to liability. The case has been remanded 
to the Housing Court for trial on this issue. 

In Simard v. Residential Care Consortium, an action was brought in the Bristol 
County Superior Court by the neighbors of a Fall River residential and educational 
facility for homeless families. The suit challenged the Fall River Zoning Board's 
determination that the facility is exempt from zoning regulation because of its educa- 
tional purpose and its operation by a non-profit educational corporation. The 
Attorney General moved to intervene on behalf of the Department of Public Welfare 
which funds the facility and others like it throughout the Commonwealth. This is 
the first case considering the application of the education use exemption to a DPW- 
funded facility for homeless families. 

Division attorneys filed a number of amicus cureau briefs during the fiscal year. 
In the case oi Patterson v. McLean Credit Union, the Attorney General filed a multi- 
state amicus brief in the U.S. Supreme Court urging the Court to let stand its 1976 
decision in Runyon v. McCraiy, which prohibited discrimination on the basis of 
race in the making of contracts between private parties. (The Supreme Court, in 
an highly unusual move, ordered reargument of the case.) The Attorney General 



32 P.D. 12 

was joined in the brief by Attorneys General from 46 other states and the District 
of Columbia, U.S. Virgin Islands. Puerto Rico, and Guam. 

In the brief, the Attorneys General argued that the states have an interest in 
defending the precedent and thereby ensuring that citizens view government— and 
particularly the courts— as an evenhanded enforcer of legal guarantees of non- 
discrimination. The brief also argued that no compelling changes in society or the 
law suggest that the court should reconsider its interpretation in Runyon. 

The Attorney General entered into an agreement with the Lakeside School in 
Peabody, a school for emotionally and developmentally deprived boys, to ensure 
that present and future employees are not retaliated against for reporting incidents 
of suspected abuse to the Department of Social Services at the Office for Children. 

In Commonwealth v. Board of Selectmen of Town of Leicester, attorneys from 
the Civil Rights Division and Government Bureau obtained a consent judgment 
for preliminary relief in Suffolk Superior Court from the Town of Leicester, assuring 
that they would not conduct the presidential primary election in a location not 
accessible to handicapped and elderly persons. The Selectmen had, until threaten- 
ed with state and federal court lawsuits, refused to comply with the Secretary of 
State's requirement that a second floor polling place at the Town Hall be accessi- 
ble. Since Leicester votes by paper ballot, providing an accessible polling place 
involved moving several tables and boxes from the second floor to a first floor 
conference room. 

Based upon a complaint from the Office of Handicapped Affairs and at the re- 
quest of the Secretary of State's office, letters were sent to seven Massachusetts 
towns and one city demanding that polling places be brought into compliance with 
federal and state law requiring accessibility. The seven towns agreed to make the 
necessary changes and certify the accessibility of their polling places. By the end 
of the fiscal year, the City of Everett had not agreed to make the necessary changes. 

This office was contacted regarding with reftisal by the managers of Harbor Point 
(the reconstructed Columbia Point housing development in South Boston/Dor- 
chester) to allow residents with dependent family members younger than 55 to live 
in the "adult" building in the development. Many of those younger dependents 
were mentally disabled and the elder residents did not want to be forced to choose 
between continuing to care for their relatives and living in the new "adult" 
building. At a series of meetings with the MHFA and the Harbor Point managers 
it was made clear that the federal law would not permit the exclusion of dependents 
from the federally subsidized units in the adult building. The affected residents 
were permitted to move into the aduh building with their dependents. 

Through the Community Access Monitors program, people with disabilities 
monitor and assist developers, builders and owners of buildings in complying with 
the state Architectural Access Code. A New Bedford developer issued a no trespass 
order against a monitor who came onto the construction site of a restaurant to deter- 
mine whether the building complied with the code. We negotiated with the developer 
to revoke that order. 

During fiscal 1988, the Commonwealth participated in a 14-day federal trial as 
a defendant intervenor in the case oiNew Life Baptist Church, et. al v. Town of 
East Longmeadow, et. al. A Memorandum and Order held that the private school 
approval process, as applied by the defendant town, school committee, and school 
official, violated the plaintiffs right under the Free Exercise Clause of the First 
Amendment of the United States Constitution. An appeal was filed with the First 
Circuit Court of Appeals. 



P.D. 12 33 

The Department brought legal action against an opthalmologist who participated 
in the Medicaid program and who had discriminated against Avo Medicaid patients 
with acute medical needs by denying them care unless they paid him cash prior 
to treatment. The case was settled by the physician's agreement to pay an 
administrative penalty and to refrain from applying any criterion other than the 
patient's need for medical care, the professional ability of the doctor to provide 
the type of medical care needed by the Medicaid recipient, and the availability of 
time in which to treat the patient. 

The Division responded to numerous written complaints and phone calls. Most 
of the complaints were referred to other government agencies or to the private bar, 
but several resulted in action by the Division. 

The Division continued to work with community groups representing a broad 
range of civil rights concerns. Division staff spoke at numerous community and 
law enforcement meetings and conferences. 

ENVIRONMENTAL PROTECTION 

The Environmental Protection Division serves as litigation counsel on en- 
vironmental issues for all state agencies, particularly those within the Executive 
Office of Environmental Affairs. The Division handles all of the Commonwealth's 
civil litigation to enforce environmental protection programs established by state 
laws and regulations. The Division brings suits to enforce the Commonwealth's 
regulatory programs governing air pollution, water pollution, wetlands, hazardous 
waste, hazardous materials, solid waste, water supply, "right-to-know," pesticides, 
waterways and billboards, and it defends decisions made by state agencies that 
administer environmental programs. In addition, based on the Attorney General's 
broad authority to protect the environment of the Commonwealth, the Division 
initiates and intervenes in state and federal litigation, and participates in admini- 
strative hearings before federal agencies on significant environmental issues. 

As a result of its enforcement efforts, the Division receives substantial federal 
grant money from the Environmental Protection Agency . 

This fiscal year the Division recovered $1,849,773.90 in penahies and other 
payments. In addition, many cases have resulted in court judgments requiring private 
parties to undertake costly cleanups— a significant saving for the Commonwealth. 

A consent judgement was entered in Suffolk Superior Court in DEQE v. 
Environmental Systems Recovery Corp. , et al. , a suit against an asbestos removal 
contractor and two of its corporate officers. Under the settlement the defendants 
paid a $30,000 civil penalty and were prohibited from conducting future asbestos 
removal activities in the Commonwealth. 

A consent judgment was entered in Suffolk Superior Court resolving DEQE v. 
AMIFF Housing Associates et al. , a case against the owner and property manager 
of a Boston apartment complex. The Complaint alleged that an employee of the 
property manager was found removing asbestos from the basement without taking 
the precautionary measures and giving the advance notice required by law. Under 
the judgement, the defendants will pay a civil penalty of $25,000, and undertake 
an asbestos hazard abatement program at their properties throughout the Com- 
monwealth. They will also train employees regarding asbestos hazards. 

A consent judgment was entered in Suffolk Superior Court settling DEQE v. 
Dartmouth Finishing Corp. , involving a New Bedford textile finishing company. 
According to the complaint, Dartmouth Finishing had substantially underreported 



34 P.D. 12 

its rise of volatile organic compounds (VOCs) and failed to seek DEQE approvals 
for its plant and new equipment. VOCs are chemicals which form ozone when com- 
bined with sunlight. In the settlement, Dartmouth Finishing paid a $1 10,000 civil 
penalty and was ordered to come into full compliance with state air regulations. 

In the case of Commonwealth of Massachusetts v. Craig Systems Corp. , a con- 
sent judgment in Suffolk Superior Court settled this case against a corporation in 
Amesbury charged with contributing to ozone pollution in the Commonwealth. 
Craig Systems Corporation, a manufacturer of military equipment, was charged 
with discharging excessive amounts of volatile organic compounds ("VOCs") in- 
to the air through their production processes. Ground level ozone contributes to 
smog and can cause health problems such as difficulty in breathing, eye irritation 
and increased susceptibility to respiratory infections. 

The complaint alleged that the Amesbury facility began operations without 
obtaining the required state approval of air pollution equipment to control VOC 
emissions. The company's equipment has now been approved by DEQE and the 
consent judgment binds the company to operate in compliance with that approval. 
In addition, the company paid a civil penalty of $60,000. 

In Commonwealth of Massachusetts v. ICI Americas, Inc. , a consent judgment 
filed in Suffolk Superior Court required ICI Americas, Inc. , a chemical manufac- 
turing company located in Dighton, to pay civil penalties totalling $157,500, in 
settlement of claims under both the Clean Air Act and the Hazardous Waste Manage- 
ment Act. 

A complaint filed simultaneously with the consent judgment charged that ICI 
Americas emitted excessive amounts of VOCs in manufacturing an anti-oxidant 
product known as ' 'Topanol. " ' The complaint alleged that the defendant continued 
to manufacture Topanol even though its new air pollution control equipment in- 
stalled to control VOC emission levels had broken down. As a result, amounts 
of VOCs in excess of that licensed by DEQE were emitted into the air. The com- 
plaint also alleged that ICI exceeded the limit of hazardous waste allowed to be 
stored under its license. 

In Commonwealth of Massachusetts v. Humboldt National Graphics, Inc. , the 
Division filed a consent judgment in Suffolk Superior Court thatt required the owner 
of a North Abington printing facility to pay a civil penalty of $60,000. The com- 
pany was charged with violating the state's Clean Air Act by emitting excessive 
pollutants and operating without proper air pollution control equipment. 

Under the terms of the consent judgment, Humboldt National Graphics, Inc., 
a California-based company that operates the printing plant, is also required to 
install pollution control equipment for the facility's three presses no later than May 
3 1 . The company is also enjoined from ever operating its equipment. The printing 
plant is located at 380 North Avenue. 

The judgment settles a lawsuit filed in August 1987 that alleged that three offset 
printing presses operated by Humboldt were emitting air pollutants that exceeded 
the maximum capacity allowed by DEQE. The complaint also alleged that emis- 
sions from the facility were "hazardous to the health of people with respiratory 
ailments, are injurious to vegetation, and are unsighdy and odorous." Humboldt 
was first notified by DEQE in August 1986 that it was in violation of departmental 
regulations promulgated under the Massachusetts Clean Air Act. 

The Matter of DEQE v. Ace Auto Body, et al. , involved the Eastern Chemical 
hazardous waste site in Worcester that operated as a chemical reprocessing and 
treatment plant until it went bankrupt in 1981 . On October 15, 1987, a final judg- 



P.D. 12 35 

ment by consent in Suffolk Superior Court required 845 companies which transfered 
hazardous waste to the site to pay $365,444 to DEQE for its cleanup costs. About 
27 companies remain in the case, and we are negotiating to recover the remaining 
cleanup costs, about $200,000. A complaint naming the companies was filed 
simultaneously with the consent decree. 

A final judgment by consent was entered in DEQE v. Plaza Oldsmobile, Inc. , 
et al. , a case involving a fuel oil spill from an underground tank in Braintree. The 
oil spilled into a river that leads to an abandoned reservoir. The owners of the tank 
reimbursed DEQE for $16,354 in costs incurred in cleaning up the spill. The owners 
also agreed to conduct a site assessment to determine whether further cleanup is 
necessary, and they agreed to cover any future cleanup costs. 

The Division filed a complaint and joint consent decree in U.S. District Court 
with the U.S. Environmental Protection Agency requiring three companies and 
the Town of Westboro to clean up a hazardous waste site (DEQE v. Koppers Co. , 
Inc. et al.). The site, known as the Hocomonco Pond site, was the former location 
of a wood treating operation that disposed of Creosote and other waste directly 
into pits and lagoons, causing contamination. The defendants are required to under- 
take a cleanup plan that will cost $5.5 million. Site monitoring will be conducted 
for at least 30 years to ensure that further contamination does not occur. 

A final judgment was entered on August 18, 1987 requiring Cumberland Farms, 
Inc. of Dedham to pay a $50,000 civil penalty for unpermitted discharges of 
pollutants from the company's Canton site. The final judgment also reserved the 
Commonwealth's rights to recover damages caused by any past or future discharges 
at the site. 

A suit was filed on September 14, 1987 seeking to recover more than $200,000 
incurred by the state in cleaning up a hazardous waste site in HoUiston. (Common- 
wealth of Massachusetts v. Ruth L. Bird, et al) The site was used to dispose of 
refuse and hazardous waste including 400,000 tires. The complaint also seeks final 
site cleanup and civil penalties for violations of G.L. c. 21E and G.L. c. Ill, §150A. 

In Commonwealth of Massachusetts v. Mobil Chemical Cotporation, a final judg- 
ment was entered requiring Mobil to pay a $67,300 penalty for failing to nofify 
DEQE of a 1985 release of hazardous material at the company's Holyoke plant. 
The penalty is the largest recovered under G.L. c. 21E. Mobil also agreed to con- 
duct an assessment of the site and undertake cleanup of any remaining hazardous 
material. 

In Commonwealth of Massachusetts v. Joseph Wozniak and Harold Quinn, a 
complaint sought to recover more than $50,000 in costs incurred by the DEQE 
for the cleanup of hazardous material at a site in Spencer. The site, which has been 
operated as a junkyard, was the site of a 1986 fire involving more than one million 
tires. The fire resulted in the discharge of hazardous materials to the air, surface 
and groundwater. 

On December 2, 1987 a complaint for contempt was filed to enforce a July 28, 
1987 final judgment which required defendants to pay DEQE $17,964. 19 for the 
cleanup of hazardous materials and to prepare an assessment and cleanup plan for 
a site in Roxbury. (Commonwealth of Massachusetts v. Edward Lyons , Jr. , et al.) 
The defendants paid $2,500 but defaulted on other payments and did not submit 
the cleanup plan. A trial was held in Superior Court (Rouse, J.) on December 29, 
1987. After the trial we sought an order requiring the payment of the outstanding 
$15,464. 19, imposition of a penalty of $1 ,500, payment of $500 in attorney's fees, 
and follow-through on the cleanup plan. 



36 P.D. 12 

A final consent judgment was entered in Commonwealth of Massachusetts v. 
Trombetta, Inc. and Charles Trombetta awarding a $10,000 civil penalty for viola- 
tions of a 1985 Administrative Consent Order and M.G.L. c. 21C. The judgment 
also provided injunctive relief requiring the defendant to curtail storage and burn- 
ing of waste oil, and to submit a closure plan to the Department for approval that 
specified how the remaining waste oil storage tanks will be cleaned, decontaminated, 
and disposed of. Any future storage or burning of waste oil must be in compliance 
with necessary state and local permits or licenses. 

A final judgment by consent was entered in DEQE v. Town of Sandwich requir- 
ing the town to bring its landfill into compliance with the Solid Waste Act and regula- 
tions. The landfill had been operating in violation of the law for many years, and 
the Town had ignored several DEQE administrative orders to bring the landfill 
into compliance. The judgment requires Sandwich, inter alia, to undertake ground- 
water monitoring and implement a closure plan for a section of the landfill. A com- 
plaint was filed simultaneously with the judgment. 

In Commonwealth v. Anthony J. Bonacorso, et al. a final judgment by consent 
was filed. This case involved violations of the Wetland Protection Act in the Belle 
Isle salt marsh in Winthrop. The judgment settles a complaint for contempt brought 
by the Commonwealth when Bonacorso violated an earlier consent judgment that 
required him to remove fill from the marsh and stabilize the shoreline. The judg- 
ment filed in October requires Bonacorso to remove additional fill placed in the 
marsh and pay a $6,000 penalty. 

In the Matter of DEQE v. Spencer and Spencer v. DEQE, Judge Cross of the 
Hampshire Superior Court approved a consent judgment in these two consolidated 
cases involving Spencer's municipal landfill. DEQE had been negotiadng with town 
officials for a year to bring them into compliance with regulatory requirements. 
DEQE also wanted to close the landfill which had contaminated nearby ground- 
water and threatened to contaminate one of the town's two public water supply 
sources. When negotiations broke down, the town sued DEQE, challenging its 
right to shut down the landfill. We filed an enforcement action, and moved for 
consolidation of the two suits and for trial in July. The night before the trial was 
to begin, the town selectmen agreed to the entry of a consent judgment that re- 
quires the landfill to close by September 15 and to be capped with final cover before 
winter. 

A decision and memorandum in DEQE v. Rocco was issued in Suffolk Superior 
Court. This case involved a privately owned landfill in Tewksbury. The decision 
came after a three-day trial in April. Judge Tuttle found that Jeanette Rocco, the 
landfill's owner, had violated the Solid Waste Disposal Act by failing to comply 
with numerous operating requirements. He also found her liable for violating 
the Clean Waters Act because the landfill was generating leachate that contaminated 
surrounding surface water and groundwater. In addition, the preliminary judgment 
secured in 1982 was made permanent and the judge ordered Rocco to submit a 
closure plan. He also found that there was insufficient evidence to find that Rocco' s 
son was the operator of the landfill, which would have made him liable for closure 
as well. 

In August, Massachusetts joined six other Northeastern states and five en- 
vironmental groups in a complaint against EPA for failure to comply with the Clean 
Air Act. {State of Maine v. Lee Thomas) The complaint alleges that the EPA has 
failed to comply with a mandatory duty under the Act to promulgate regulations 
addressing the problem of impaired visibility in wilderness areas caused by regional 



P.D. 12 37 

haze, or smog. Regional emitted haze in the Northeast is primarily caused by 
pollutants emitted in the Midwest, the same pollutants that contribute to the problem 
of acid rain. The Clean Air Act required EPA to issue regulations by 1979. On 
October 14, 1987, plaintiff filed a motion for summary judgment. 

The Commonwealth joined six other states in filing a petition with the EPA 
compelling the agency to implement a solution to the problems of interstate and 
international movement of pollutants that cause acid rain. Acid deposition from 
rain and snow has been shown to cause acidification of surface water bodies, destruc- 
tion of fish and wildlife, corrosion of buildings and monuments, regional haze, 
and harm to human health. 

The petition asks EPA to publish for public comment its earlier determinations 
that air pollutants generated in this country endanger public health and welfare 
in Canada, and that the United States has reciprocal rights to control acid rain pro- 
ducing pollutants that cross the border from Canada. Once these determinations 
are officially published, EPA must require those states which cause acid rain through 
emissions to impose additional controls on pollution sources. 

In City ofQuincy v. EPA and MWRA, the city filed a notice of dismissal of this 
case challenging the purchase of the General Dynamics shipyard by the MWRA. 
The EPA and the MWRA had both filed motions to dismiss Quincy's complaint 
for lack of subject matter jurisdiction and failure to state a claim. 

A consent judgment was entered in Suffolk Superior Court resolving DEQE v. 
Charles River Pollution Control District Commission. This case alleged Clean 
Waters Act violations against the District Commission, which operates a sewage 
treatment plant for the towns of Franklin and Medway. The plant discharges its 
effluent into the upper Charles River. Under the settlement, the Commission will 
make extensive repairs to the plant, improve operations and maintenance and address 
some long term operations concerns. The Commission must also pay a civil penalty 
of $30,000 for past violations. 

In Nolan v. DEQE, after a five-day trial last summer, Superior Court Judge 
William H. Carey found in favor of the Commonwealth and permanently enjoined 
a fully constructed Firestone Service Center from discharging sewage and any other 
pollutants. This Court found violations of the State Environmental Code. 

In February the Town of Winthrop and the M. W.R.A. filed a Stipulation of 
Dismissal with prejudice in this two-year-old case. The action ended the Town's 
challenge to the Authority's decision to build the new sewage treatment plant for 
the Boston metropolitan area on Dear Island. We had filed a Motion for Summary 
Judgment on behalf of the defendant, which had been scheduled for argument by 
the court. But at the last minute, the parties reached agreement on compensating 
Winthrop for having the plant as a neighbor. As part of that agreement, the Town 
agreed to dismiss its complaint. 

In DEQE V. Henrikson 's Dairy and Rodney Henrikson, a final judgment was 
entered in Superior Court whereby the defendant, Rodney Henrikson, agreed to 
pay a civil penalty of $8,000 to settle the Commonwealth's water pollution claims 
against the dairy. The case was referred in May 1985 for enforcement of the Clean 
Water Act and DEQE regulations in connection with the dairy's discharges of milk 
process wastes into a river. 

InAnne Place et al. v. Town of Chathanu the plaintiffs own property located 
on a coastal bank and a coastal dune, two areas subject to the Wetlands Protection 
ActG.L. c. 131, §40. ("Act"). UntilJanuary 1987, a barrier peninsula protected 
the plaintiffs' property from the ocean. Last January, several winter storms carved 



38 P.D. 12 

an inlet in that peninsula. To protect their homes from the ocean, the plaintiffs 
want to build a stone revetment on their property without complying with the Act. 
Rather than file a notice of intent with the Chatham Conservation Commission as 
required, they bought this action seeking a temporary restraining order and 
preliminary injunction to stop the Conservation Commission and DEQE from 
enforcing the Act while they build the revetment. 

On December 30, 1987, after issuing a TRO without notice to DEQE or this 
office, the court held a hearing to determine whether the court should issue such 
an injunction. Instead, on January 4, 1988, the court issued an interlocutory order 
which would remain in effect for 90 days. Under this order, the plaintiffs were 
required within 40 days to remove the stone revetment from the coastal dune. In 
addition, within 30 days the plaintiff must either file a notice of intent to construct 
a stone revetment on the coastal bank area or remove the revetment. 

Opening briefs were filed on March 2 1 , 1988 in the D.C. Circuit Court of Appeals 
by Massachusetts and others in a pending lawsuit challenging the five-year pro- 
gram for oil and gas leasing on the Outer Continental Shelf (OCS) approved by 
the U.S. Secretary of the Interior. [National Resources Defense Council v. Model) 
The leasing program is the national program for petroleum resource development 
on the OCS. The program approved by Secretary Donald Hodel proposes opening 
up roughly one-half of the OSC for development over the next five years, including 
the sensitive Georges Bank fisheries off the Massachusetts coast. 

Massachusetts filed a joint brief with four other states and a number of environ- 
mental groups alleging numerous violations of the Outer Continental Shelf Lands 
Act (OCSLA) and the National Environmental Policy Act (NEPA). 

The Town of Wellfleet, et al, v. John W. Glaze, is currently on appeal before 
the Supreme Judicial Court. It involves an exclusive-use shellfish license issued 
by Wellfleet for certain intertidal land. In July of 1987, the Superior Court issued 
a partial stay, pending appeal, of the permanent injunction previously issued against 
the defendant. The stay allowed the defendant to moor his boats over the oyster 
beds that are the subject of this litigation. The town subsequently sought relief from 
the Single Justice of the SJC, who transferred the town's petition to the Single Justice 
of the Appeals Court. We again joined as amicus and argued the case before the 
Single Justice on August 2 1 , 1987. The court (Kass, J.) reversed the Superior Court's 
granting of the partial stay, thus saving the seeding oysters pending appeal. 

In Re: Sewalls Falls Hydroelectric Dam the proponents of a dam project on the 
Merrimack River near Concord, New Hampshire, withdrew their licensing appli- 
cation from the Federal Energy Regulatory Commission. This formally ends a long 
dispute over the building of the dam. The Commonwealth intervened in the licens- 
ing proceedings in 1984, because of the damaging effects the proposed dam would 
have had on federal -state efforts to restore salmon and shad to the Merrimack River 
Basin. Through an agreement reached last year, the site will now be used as a recrea- 
tional area managed by New Hampshire. A second licensing proceeding in which 
we have intervened is still pending. This involves a proposed dam on the 
Pemigewasset River, the largest tributary in the Merrimack. 

INSURANCE 

The Insurance Division represents the interests of Massachusetts citizens who 
purchase insurance. A significant portion of the Division's work involves advocacy 
on behalf of consumers in insurance rate proceedings. The Division intervenes in 



P.D. 12 39 

complex hearings, including automobile and health insurance rate setting. 

The Division also litigates against insurance companies, stock brokers and insur- 
ance agents on behalf of consumers. Cases are brought to obtain injunctive and 
restitutionary relief for insurance consumers. 

The Division also routinely participates in legislative and administrative hear- 
ings concering proposed laws, regulations and other policy issues. 

The actions of the Division saved Massachusetts consumers $645 million this year. 

The Insurance Division filed the Attorney General's Advisory Filing on 1988 
automobile insurance rates recommending a 4.4% increase, in contrast to the 
industry's request for a 32.3% rate hike— a difference of almost $500 million to 
Massachusetts consumers, or more than or over $150 per insured car. 

At the same hearing, the Division submitted an advisory filing on cost contain- 
ment issues. The filing included the results of an independent study commissioned 
by the Attorney General which found that repair estimates for automobiles believed 
to be fully insured were 32.5% higher than for those cars with identical damage 
but believed to be uncovered by a collision policy. The Attorney General's cost 
containment filing included an analysis of differences in payments on claims from 
the Commonwealth Auto Reinsurers (the high risk pool) and the voluntary market 
which indicates that insurers are not managing claims in CAR as carefully as in 
the voluntary market. The Attorney General's final 1988 rate recommendation after 
consideration of cost containment issues was a 1 % decrease. 

In mid-December, Insurance Commissioner Roger Singer established an average 
automobile insurance rate increase of 8.5% for Massachusetts drivers. 

On December 15, 1987, the Supreme Judicial Court issued a Decision on the 
insurance industry's appeal of the 1987 auto rates originally set by former Insurance 
Commissioner Peter Hiam. The Court upheld the Commissioner's decisions in most 
respects but remanded the case to Commissioner Singer, directing him to make 
findings and, if necessary, hold future hearings on certain narrow issues. 

After arguing that further hearings were not necessary, the Division participated, 
under protest, in a remand hearing conducted by Singer on less than one week's 
nofice. The insurance industry proposed further increases of 13% in each of the 
two prior years' rates. The remand hearing resulted in a muddled decision which 
allows an aggregate 17% increase in rates for the two years, or $280 million in 
premiums, which is the largest one-time rate hike in the history of Massachusetts. 

On March 29, 1988, the Attorney General appealed the decision to the SJC, alleg- 
ing that the many procedural errors at the hearings, as well as substantive error 
in the Remand Decision itself, produced a substantial denial of justice and a viola- 
tion of the law and the due process clauses of the Massachusetts and United States 
Constitutions. 

In early October, the Division entered into a settlement with Blue Cross/Blue 
Shield on a pending request for an increase in Medex (Medicare supplement) rates. 
BC/BS had originally requested an increase of 18.4% in the premium rates paid 
by its Medex subscribers, who are elderly or disabled. The Division strongly 
opposed the increase as excessive and further argued that the filing rate request 
was procedurally inappropriate and merited dismissal. In particular, the Division 
argued that BC/BS completely failed to demonstrate that the companies used ade- 
quate or effective methods for containing health care costs as required by statute. 

Following negotiations, the companies cut their request almost in half, settling 
for a 10.5% rate increase. Because the companies' 1986 rate request of 9.4% was 
denied— based in large part on the Division's advocacy in that hearing— the 10.5 % 



40 P.D. 12 

actually represents two years' or slightly more than a 5% annual rate increase, 
the smallest hike in Medex rates in years. Because of the Division's intervention, 
consumers saved $52 million. 

The Division participated in the hearing to consider a 64.3 % or $60 million rate 
increase requested by Blue Cross/Blue Shield on its non-group health insurance 
covering 160,000 Massachusetts residents. As a result of the Attorney General's 
efforts, the average insurance increase was slashed to 21 .3% . The savings to pur- 
chasers of Blue Cross/Blue Shield non-group health insurance totalled $20 million. 

A hearing in the Spring of 1988 considered Xht first major reassignment of towns 
into the 26 automobile rating territories since 1984. Issues include a new measure 
of the severity of accidents for each town into the calculation of town expected 
losses; the volatility of the model used to calculate expected losses; the method 
for clustering the towns ranked by expected losses into the 26 territories; and the 
cap to be applied to territory movements. 

In May of 1988, at the annual hearing to determine the feasibility oi competition 
in the automobile insurance market, the Attorney General presented a proposal 
for a gradual transition to competition. The Attorney General strongly urged the 
Commissioner to introduce competitive pressure to control run away costs. We 
proposed instituting "flex rating" which would have allowed insurers to set their 
own rates for property damage coverages within a range of 10% more or less than 
the prior year's premium. The Insurance Commissioner rejected competitive rating 
for 1989 auto rates. 

The Insurance Division took action against several insurers who improperly denied 
claims under pre-existing condition clauses. A synopsis of those cases follows. 

Aetna Life Insurance & Annuity Company denied claims under individual Short 
Term Medical Policies of Accident and Sickness insurance on the basis of "pre- 
existing symptoms. ' ' The company did so without documenting evidence of actual 
treatment or observation prior to the policy's effective date, and with knowledge 
that there was no treatment or observation prior to the policy's effective date. Follow- 
ing an investigation by the Division, Aetna agreed to enter into a consent judg- 
ment. The judgment required Aetna to pay $30,538.99 in previously denied claims, 
withdraw its pre-existing symptoms rider, and educate its claims processing staff 
to assure compliance. Aetna also paid $6,500 for the costs of the investigation. 

Golden Rule Insurance Company denied coverage for Caesarian sections on health 
policies when the insured had a previous Caesarian section. The company has 
withdrawn the Caesarian section exclusion rider and is examining its files to iden- 
tify claims improperly denied under the rider. 

The Division enforces the provisions of Massachusetts law which mandates 
certain health insurance benefits for all insureds. What follows are examples of 
such enforcement actions. 

Health and Education Services, Inc. , a group health insurance company, refused 
to extend coverage for 3 1 days after termination of employment as mandated by 
Massachusetts law. After the Division's intervention, the company extended 
coverage and the consumer's medical bills incurred after termination of employ- 
ment were paid by the company. 

Divorced spouses ' of members of group health insurance policies were denied 
continuation of eligibility for benefits under their former spouses' policies as 
mandated by state law. After intervention by the Division the group policyholder 
retroactively extended continuation of health insurance to the divorced spouses 
without payment of additional premiums. 



P.D. 12 41 

Employers who failed to pay group health insurance premiums after withholding 
a portion of their employees' wages for such premiums were investigated by the 
Insurance Division. 

The major enforcement action in this area was brought against Andrew Wilson 
Co. , a Lawrence manufacturer, and its president, E. Parker Stokes, alleging that 
the company had failed to pay the group health insurance premiums since October 
1987 and had not informed its employees. The company had been collecting $12 
per week from employees since February 1988 for health insurance. The com- 
plaint alleged that the company has also failed to make credit union deposits. United 
Way contributions, child support payments to the Probate Court, and other payments 
deducted from employees' paychecks. The Superior Court enjoined the defendants 
from deducting such funds from employees' paychecks unless the monies were 
remitted to the appropriate entities and accounts within 48 hours. As a result of 
the Division's actions, $60,000 of medical bills incurred and reported from October 
1, 1987 to February, 1988 were paid. 

Subsequently, Andrew Wilson Company filed for bankruptcy. The Division 
intervened before the U.S. Bankruptcy Court to assert that the employees are 
creditors of the debtor company so that their outstanding medical bills will be 
recognized as priority debts of the firm. 

Other actions against employers who withheld premiums and failed to remit them 
to insurers resulted in the payment of $5,155 in medical bills. 

The Massachusetts Restaurant Insurance Trust, administered by Associated 
Insurance Management in Westbo rough, sent notices of cancellation to 138 employer 
groups covering more than 1,000 employees. The Trust had not disclosed to 
employers prior to the cancellation notice being sent that "excess" claims was 
a basis for cancellation. The Trust rescinded the cancellation notices and continued 
insurance coverage for all groups remaining in the Trust. For those groups which 
secured other coverage following the cancellation notice, the Trust agreed to pro- 
vide coverage for pre-existing conditions not covered by the new carrier. 

In November, South Shore Hospital entered into an assurance of discontinuance 
after discriminatory treatment of a Medicare beneficiary was alleged. 

In 1985, Medicare began reimbursing Massachusetts hospitals caring for 
Medicare beneficiaries at a fixed amount per admission, rather than per day. In 
other states this change led to discriminatory treatment by hospitals of those 
Medicare patients who were likely to need longer stays. Massachusetts sought to 
preempt such problems by legislatively declaring such discrimination illegal under 
the new system. 

In late 1985, an acutely ill 82-year-old Medicare beneficiary was first told he 
would be admitted to South Shore Hospital, but was unexpectedly sent home. He 
was admitted the next day to another hospital, where he died several weeks later. 
The Division's investigation, supplementing inquiries by the Department of Public 
Health, produced evidence that the decision was triggered by the hospital's con- 
cern over reimbursement under the new Medicare system. 

After extensive negotiations, the hospital agreed not to discriminate in the future, 
to institute extensive new staff training on Medicare and patients' rights, to imple- 
ment record keeping to monitor treatment of Medicare patients, and to pay $40,000 
into the Local Consumer Aid Fund. The money has been earmarked for use in 
educating and protecting the rights of elderly health care consumers. 

A 20-year payment universal life insurance policy was purchased by a 76-year- 
old woman. She understood that the policy was a single premium investment 



42 P.D. 12 

equivalent to a money market fund. One year after her payment of $38,958, she 
received a statement showing that her account dropped in value by $1 1 , 160.05. 
She also received a premium due bill for $20,000. After the Division intervened, 
John Hancock Mutual Life Insurance Company cancelled the universal life policy 
and made a full refund. 

The Division intervened on behalf of insurance purchasers on a variety of claims 
settlement practices problems. The Division's actions resulted in payment o{ $6,283 
of improperly denied claims to consumers. 

The Division prepared testimony which the Attorney General presented to the 
Insurance Commissioner on proposed regulations governing HIV-Related testing 
and the use ofAIDS-related information for life and health insurance. The Attorney 
General expressed his support for the proposed regulation which offered critical 
protection and privacy to all persons who apply for health and life insurance. 

After five years of work by the Division, sex discriminatory insurance policies 
will be banned in Massachusetts. The Commissioner of Insurance, relying on a 
formal opinion of the Attorney General issued in January, 1987 issued a draft regula- 
tion which prohibits discrimination in the premiums and benefits under all insurance 
policies issued or renewed after September 1 , 1988. The final regulation adopted 
the more comprehensive remedy for existing discrimination recommended by the 
Attorney General. 

The Division petitioned the Insurance Commissioner to amend his regulation 
defining pre-existing conditions to preclude the denial of claims where there has 
been no medical diagnosis or treatment. 

The Division argued that the existing regulation which permits claim denials in 
cases where there were "symptoms which would have led an ordinarily prudent 
person to seek medical advice or treatment" erodes mandated benefits coverage. 
The regulation also unfairly and adversely affects individuals with "silent" diseases 
such as mental illness, alcoholism and AIDS. 

The Insurance Division intervened in a hearing, held by the Auto Damage 
Appraiser's Licensing Board, concerning Liberty Mutual Insurance Company's 
implementation of a body shop cost containment program. The Liberty program 
advises consumers of their right to choose an auto body repair shop. If requested 
by the consumer. Liberty provides a list of quality repair shops in their geographic 
area. Over the years, at auto rate hearings, the Attorney General has advocated 
the implementation of such programs as a method of reducing repair loss and 
expense. We argued that Liberty's program was consistent with the auto cost contain- 
ment law. Chapter 622 of the Act of 1986, decisions of the Supreme Judicial Court, 
and the regulations of the Insurance Commissioner. 

The Insurance Division presented testimony in support of emergency regula- 
tions implementing a recently passed statute mandating insurance coverage for 
medically necessary diagnosis and treatment oiinfertility . Our testimony applauded 
the regulations for making explicit what was clearly intended by the statute— that 
in vitro fertilization procedures be covered, as well as other non-experimental 
treatments. We recommended alternative language for one section of the regula- 
tions which had the potential for discriminatory application. This legislation would 
largely resolve a problem which repeatedly requires our intervention. 

Division attorneys drafted legislation requiring insurance companies to notify 
employees when their group health insurance premiums are cancelled for nonpay- 
ment of premiums by employers. 



P.D. 12 43 

The Division, working with the Attorney General's Health Care Task Force, 
drafted testimony presented by the Attorney General supporting access to health 
care for the Commonweahh 's 600,000 uninsured residents. The testimony also 
opposed any transformation of Blue Cross/Blue Shield into two commercial, non- 
profit, charitable corporations, or to eliminate the benefits it receives from that 
non-profit status. BC/BS is currently the insurer of last resort, and as such, pro- 
vides an essential service to elderly subscribers and those who cannot get health 
insurance through any group. The Attorney General said that, until a reliable alter- 
native is in place, BC/BS must retain its charitable obligations to serve these popula- 
tions, as well as the financial benefits (such as tax-exempt status) which support 
that coverage. 

The Division testified before the Joint Committee on Insurance in support of 
a bill designed to protect the privacy of insurance consumers. There is now little 
regulation covering how insurers may collect information on consumers, what 
privacy protections apply once that information is in hand, and how insurers main- 
tain the accuracy of that information. The bill imposes comprehensive protections 
on the collection of information and its dispersement. Notice and consent require- 
ments are added, and extra protection is accorded to certain information which 
insurers could use to exclude anyone considered to belong to a group at risk for 
AIDS. We recommended that the bill be enacted to assure greater consumer pro- 
tection in this area. 

The Insurance Division testified and gave technical analyses on several auto 
insurance ' 'reform "bills. The Division chiefly addressed the surcharge mechanism 
proposed by the insurance industry, called the "rolling reconciliation," the struc- 
ture of the good driver credit plan, and various anti-fraud provisions. 

The resolution of individual consumer complaints resulted in savings of approx- 
imately $30,000. 

PUBLIC CHARITIES 

The Attorney General represents the public interest in the proper solicitation 
and use of all charitable funds. The Attorney General's enforcement role extends 
to a wide range of charitable activity to protect donors from diversion and waste 
of funds, and to ensure that the beneficiaries of charitable funds receive the intended 
benefits. 

The Division's work falls into three main areas: 

— Registering and receiving financial informadon from charities and 
fundraisers to assure accountability for charitable funds. 

— Participation as an interested party in estates and trusts in which 
there is a charitable interest. 

— Litigation to protect the public from misapplication of charitable 
funds and from fraudulent or deceptive solicitation. 

Under M.G.L. Ch. 12 s. 8E, all public charities, with the exception of religious 
organizations and certain federally chartered organizadons, ttmst register with the 
Division. 

In cooperation with the Secretary of State, the Division receives the Articles of 
Organization of newly filed G.L. c.l80 non-profit corporations. The Division 
reviews the Articles to determine if the non-profit is a public charity. If it is a public 
charity, information about the charity is entered on the computer, and the organiza- 
tion is sent annual reporting material. 



44 P.D. 12 

Tfiis year 1.251 ne\\- charitable organizations' Articles were reviewed, deter- 
mined to be charitable, ami entered into the computer. More than 24.000 charities 
are registered with the Division. 

All registered charities must submit annual financial reports to the Division. The 
registrations and financial reports are public record and the public may view the 
files between 9 a.m. and 5 p.m.. Monday through Friday. Annual filing fees of 
S25 per report totalled S255.550. 

Under G.L. c.68. §19. every charitable organization which intends to solicit 
funds from the public, except religious organizations, must apply to the Division 
for a solicitation certificate before engaging in fundraising. During the fiscal year. 
2994 certificates were issued and 529,940 in certificate fees were received and 
processed. 

Under §§22 and 24 of the new G.L. c.68. all persons acting as professional 
solicitors or professional fundraising counsel for soliciting charitable organiza- 
tions must register annually with the Division. Solicitors must file a S 10.000 surety 
bond and a cop\ of each fundraising contract signed w ith an\ charitable organization. 

During the fiscal year. 144 registrations were received and approved. Fees 
received totaled SI .440. Of the registrations. 1 16 were renewals, and 28 were new 
registrations obtained as a result of increased enforcement of the registration 
requirement. 

The Di\ision protects the public from misuse by non-profit organizations of their 
siatutor)' license to fund raise through charitable gaming activities, including the 
conduct of fundraising Las Vegas Nights, bazaars, and raffles. 

The Division re\ie\\ s the probate of estates where there is a charitable interest. 

This Fiscal year. 2.022 new wills were received and reviewed, of which 1 .652 
involved charitable bequests. Seven-hundred executor accounts and 2.387 trustees 
accounts were reviewed and appro\ed. The Division also reviewed and approved 
122 petitions for sale of real estate and 72 petitions for appointment of trustees. 

Seventy-one new probate cases were opened, and Division attorneys were 
involved in 810 other probate cases. These included petitions for cy pres or 
instructions to modernize or clarify outmoded trust terms. The Di\ision reviewed 
and/or was involved in 4.166 other probate legal matters. 

The Division also represents the State Treasurer in the Public Administration 
of intestate estates where the decedent has no heirs. Such estates escheat to the 
Commonweahh. The Division ensures that the estates are promptly administered 
and that the state receives its money. During the fiscal year. S423. 124.31 in escheats 
were received. The Division also handles petitions from public administrators 
representing heirs in intestate estates who are found after an estate has been admin- 
istered and are then entitled to a reimbursement of escheated funds. 

During fiscal 1988. the Division reviewed and approved 67 intestate estates. 15 
petitions for sale of real estate and 77 accounts in public administrations. 

The Division is also involved in a number of municipal and private charitable 
trusts, among them municipal trusts held by the city of Boston and the towns of 
Reading and Townsend. as well as pri\ate charitable trusts held b\- Harvard Univer- 
sit)' and Maiden Industrial Aid Societ}-. 

The Charities Division is responsible for enforcing the due application of funds 
by charitable corporations. The assets of all charitable corporations in the Com- 
monwealth are considered by law to be held in trust by the corporation for use 
for the purposes for which the assets were first obtained. The Attorney General 
represents the public's interest in the proper use of these assets. 



P.D. 12 45 

To enforce the public's interest in the disposition of charitable assets, the Attorney 
General is party to all voluntary dissolutions of charitable corporations. All dissolv- 
ing charities must submit draft dissolution pleadings. Once approved by this office, 
the pleadings are filed ex parte by the dissolving charity with the Supreme Judicial 
Court. We review pleadings to ensure that: 

(1) there are adequate grounds for dissolution; 

(2) charitable assets are not diverted to non-charitable uses. e.g. 
verif>'ing the legitimacy of related-party loans to be repaid from 
charitable assets; and 

(3) ensuring that any assets remaining after repayment of outstanding 
debts are transferred, with Court approval, either as restricted 
assets to a charitable corporation with a similar charitable pur- 
pose, or as restricted funds to a charitable corporation with 
broader purposes than those of the dissolving charity. 

The Division approv ed 10 motions by dissolving charitable corpwrations for inter- 
locutor)' orders of the SJC. thereby allowing assets to be transferred to other charities 
for similar charitable purposes. The Division also approved 15 final judgments 
dissolving charitable corporations. 

A summary of the litigation engaged in by the Division follows. 

The Attorney General filed a complaint alleging that the Coalition for Reliable 
Energy (CRE). its directors and its managing agent (BMc Strategies, Inc.) violated 
state law by deceiving the public to believe that CRE was a charit> promoting all 
forms of reliable energy. In fact, we allege CRE is a front for the joint owners 
of Seabrook and designed solely to promote the nuclear power plant. 

The defendants moved for a partial summar\- judgment, on the chapter 93 A claim 
only, arguing that CRE's advertisements were not deceptive, that they were beyond 
reach of chapter 93A. and that they were protected speech under the First 
Amendment. 

After hearing arguments from both sides. Judge Walter Steele denied CRE's 
motion. He held that CRE"s ads satisfied the Supreme Court's criteria for finding 
commercial speech, because they were (1) paid for. (2) intended to influence con- 
sumer demand for purchase of Seabrook" s electricity in a manner unrelated to the 
licensing of Seabrook. and (3) were economically motivated if (as CRE conceded 
for purposes of the motion) CRE is an alter ego for the Seabrook owners. 

Judge Steele also held that CRE's ads constituted trade or commerce subject to 
Attorney General regulation under M.G.L. C.93A because they were in a business 
context and constituted use of a non-profit vehicle as a vehicle for profit. He also 
held that CRE's ads were not protected from regulation by the First Amendment 
right to petition because they were not directed to the Nuclear Regulator)' Com- 
mission or to the public in their capacit}' as voters. 

On June 7. 1988. following renewed discover) by the Attorney General. Judge 
Steele heard arguments on a CRE motion requesting him to exercise his discretion 
to report his decision for interlocutor) appeal. CRE argued that judicial economy 
would be promoted by appeal, because an appellate finding that CRE's ads do not 
constitute commercial speech would dispose of the Attorney General's G.L. C.93A 
claim. The Attorney General argued in opposition that judicial economy would 
not be promoted by appeal because ( 1 ) the issue of commercial speech requires 
fact-finding of material disputed facts as to whether CRE is an aher ego for the 
Seabrook owners and whether CRE's ads are economically motivated: (2) those 
same facts must also be tried in order to dispose of the Attorney General's other 



46 P.D. 12 

claims under G.L. c. 12, §8 and G.L. c.68, irrespective of the G.L. C.93A claim; 
and (3) trial could moot the very issues CRE seeks to appeal. Judge Steele has taken 
CRE's motion under advisement. 

In the case of Wlieaton College v. Shannon, the college's Board of Trustees made 
the decision to admit men as degree candidates for the first time. As a non-profit 
charitable institution, Wheaton must by law use its assets to carry out the charitable 
purpose for which the assets were held or else seek court approval of any change 
of use. The Attorney General, as the overseer of public charities, was concerned 
that contributions to the college continue to be used for the purpose intended by 
the school's donors, especially donors to a recent Sesquicentennial Campaign which 
emphasized Wheaton's history and role as a women's college. 

After lengthy negotiations, the Attorney General and Wheaton presented a com- 
prehensive plan to the court which would permit Wheaton to become coeducational 
while retaining significant portions of its prior funds for the exclusive benefit of 
female students. 

In the judicial proceeding for approval of this plan, nine donors to the Sesqui- 
centennial Fund filed a joint motion to intervene, arguing that they had specifically 
intended that their donations benefit a women's college. The donors asked the court 
to order Wheaton to refund their donations, and to allow them to contest Wheaton's 
conclusion that its future viability as a single-gender college is seriously jeopar- 
dized by changing demographics. They also wanted to litigate how Wheaton's assets 
should be allocated in the cy pres proceeding. The Attorney General agreed that 
the donors have standing to raise private claims that their gifts have lapsed, but 
argued against standing to litigate issues involving Wheaton's use of assets for 
coeducational purposes. 

After several hearings, the court approved the plan developed by the Attorney 
General and Wheaton, and the college agreed to offer to Sesquicentennial donors 
the opportunity to receive refunds upon request. 

The case of Commonwealth v. Resthaven Corporation involved a nonprofit 
charitable corporation which has operated a nursing home in Roxbury for more 
than 50 years. In 1979, the Attorney General filed a lawsuit in Suffolk Superior 
Court against Resthaven to prevent physical and sexual abuse of patients, inade- 
quate staffing, inappropriate use of physical restraints, inadequate restorative nursing 
care and failure to maintain sanitary conditions. Judge John Paul Sullivan appointed 
attorney Norman W. Huggins as a receiver to manage the nursing home. Huggins 
contracted with University Hospital (the "Hospital") to manage the facility, and 
by 1980, the patient care violations had ended, and Resthaven was recertified by 
the Department of Public Health (DPH). 

On June 3. 1988, DPH determined that conditions had seriously deteriorated, 
that there were unsatisfactory sanitary conditions, and that there was an imminent 
danger of serious physical harm to patients. The Attorney General and DPH took 
immediate steps to require Huggins and University Hospital to correct those 
conditions. 

On June 22, 1988, the Attorney General moved for appointment of a new receiver 
on the grounds that Huggins and University Hospital had failed to implement agreed- 
to steps to rectify conditions at Resthaven. Judge John L. Murphy, Jr. deferred 
a decision on appointing a new receiver. However, he granted an order, sought 
by the Attorney General, requiring Huggins and the Hospital to obtain a new ad- 
ministrator, medical director, and director of nurses. Judge Murphy also ordered 
the receiver and the Hospital to take the following steps: 



P.D. 12 47 

— Immediately render basic care to all patients including hygiene, 
bathing, and clean clothing to each resident. 

— Ensure that physicians assess each patient for current medical 
needs. 

— Ensure that independent nurse consultants perform skin 
assessments on all residents. 

— Ensure that a nutritionist assess all patients on tube feeding to 
determine their nutritional status. 

— Ensure that registered dieticians assess all patients for nutritional 
status. 

— Ensure that each supervisor/charge nurse makes daily rounds of 
patient units. 

— Take all necessary steps to implement an infection control 
program. 

— Clean the facility, including all patient areas and patient equip- 
ment, and take all necessary steps to eliminate roaches, rodents, 
and rodent droppings. 

Huggins was also directed to phone DPH twice weekly and to file weekly reports 
with the court, the Attorney General and DPH. 

The SJC issued decisions on two Charities Division cases. In these companion 
cases, the Division sought to establish that the Weymouth Agricultural Society and 
\he Brockton Agricultural Society were charitable organizations. Both are nonprofit, 
stock corporations which operate popular agricultural fairs. 

The SJC held that the two corporations were not charitable because the corporate 
charters and bylaws did not affirmatively bar stockholders from selling their stock 
back to the corporations at a profit, or from receiving a share of assets upon dissolu- 
tion. The court said such restrictions would be necessary for a finding of charitable 
status for nonprofit, stock corporations with programs which are not inherently 
charitable. 

Nonetheless, the Court adopted much of the Attorney General's legal position. 
The Court agreed with the Attorney General that encouraging agriculture could 
be charitable if conducted by an entity benefitting the indefinite public; and issuance 
of stock is not perse determinative of a corporation's non-charitable status. Finally, 
the court agreed that each of the following factors urged by the fairs as probative 
of non-charitable status are irrelevant: incorporation or property tax exemption 
under statutes other than those denominated as applying to "charities"; federal 
tax exemption status other than as a charity; the lack of receipt of gifts, or the degree 
to which gifts have been donated by the corporafion; recent beliefs of a corpora- 
tion's stockholders, officers or directors as to non-charitable status; and the 
extent to which a corporation has not availed itself of benefits enjoyed by charities, 
such as charitable immunity, or exemption from sales or unemployment 
compensation taxes. 

The SJC decision also strengthened and clarified the scope of the Attorney 
General's jurisdiction to enforce the due application of charitable funds and pre- 
vent breaches of trust. The Court adopted the Attorney General's argument that 
under M.G.L. c. 12, §8, the division has jurisdiction over entities traditionally incor- 
porated as charities, and non-charities which hold any portion of their assets in 
charitable trust, such as those soliciting funds for charitable purposes. 

The Supreme Judicial Court Single Justice approved the modification of trust 
terms requested by the Trustees Under Vie Will Of Caroline Weld Fuller and the 



48 P.D. 12 

Attorney General. As a result, a small under-utilized home for elderly women will 
be permitted to expand to a continuing care facility. Residence will no longer be 
restricted to "white, American women of the Protestant faith," and the trustees 
will be required to give preference to applicants of limited means, and to seek and 
utilize governmental funding to support lower income residents. 

The Attorney General obtained a judgment by consent against the American Postal 
Workers Union on July 9, 1987. The judgment contains the first solicitation ban 
ever obtained against a Massachusetts charity. The American Postal Workers Union 
was barred from soliciting contributions in Massachusetts until March 1988. 

The complaint filed in October 1986 alleged that the union engaged in deceptive 
solicitation tactics in conjunction with its solicitor, Capricorn Publishing Com- 
pany. The Attorney General alleged that the Union solicited charitable contribu- 
tions in 1985 and 1986 ostensibly for granting the last wishes of terminally ill children 
when it actually paid the costs of the union's annual convention. In addition, more 
than 80% of the money raised went to the professional solicitors as expenses and 
commissions. The solicitor is under a preliminary injunction in a separate action 
which is still pending. The union also paid $12,500.00 to the Commonwealth. 

In Attorney General v. Bradley M. Taber, a Final Judgment was obtained on 
December 21, 1987 against a professional solicitor, Bradley M. Taber, in a case 
involving violations of M.G.L. c.68, the Charitable Solicitation Act. 

In the complaint filed in 1986, the Attorney General alleged that the defendant 
had failed to comply with the disclosure provisions of c.68 while engaging in a 
fund-raising campaign in Southeastern Massachusetts on behalf of the Coalition 
of Vietnam Veterans (C.O.V.V.), a charitable organization based in New Bed- 
ford. In addition to failing to disclose his status as a solicitor and detail how the 
money would be used, the defendant also engaged in affirmative misrepresenta- 
tions by telling donors that the was a member of the CO. V.V. , rather than a solicitor, 
and by saying that all the money raised would go to the CO. V.V. In fact, only 
20% was actually to be given to the organization under the contract signed with 
Taber. 

The final judgment prohibits Taber from engaging in any solicitation in 
Massachusetts unless and until he complies with the registration, filing and disclosure 
provisions of c.68. Taber was also ordered to pay a civil penalty of $10,000 for 
his past violations of the statute, and to account to the Attorney General for all 
money, previously raised for charity. In addition, money held in an account in 
Taber's name, attached when the case was filed, was ordered released to CO. V.V. 

The case of Attorney General v. Telco Communications, Inc. involved a First 
Amendment challenge by a solicitation firm to Section 21 of the Massachusetts 
Charitable Solicitation Act. Section 21 prohibited professional solicitors from charg- 
ing fees which exceeded 25% of the gross proceeds raised, excluding the cost of 
performances, events, or goods sold to the public. There was oral argument on 
June 2, 1987 in the First Circuit Court of Appeals, and on July 3 1 , the court declared 
the section unconstitutional as a violation of charities' freedom of speech and af- 
firmed the District Court's decision. At the end of the year, the U.S. Supreme Court 
reached the same conclusion about a similar North Carolina statute. 



P.D. 12 49 

UTILITIES 

By statute, the Attorney General is the designated representative of Massachusetts 
ratepayers in utility rate matters. The Utilities Division is the primary, and in most 
instances, the only representative of the consumer interest in gas, electric, and 
telephone rate cases and related matters within Massachusetts. 

The rate cases in which the Attorney General appears are heard and decided by 
the Department of Public Utilities (DPU). The Division also appears on behalf 
of Massachusetts ratepayers before the Federal Energy Regulatory Commission 
(FERC). This federal intervention is essential since FERC establishes nearly all 
of the purchase power rates charged to four of the eight retail electric companies 
serving customers in the Commonwealth. FERC also has wholesale rate jurisdic- 
tion over the Massachusetts utility investment in Seabrook, with the exception of 
MMWEC. 

During fiscal year 1988 the Utilities Division continued aggressive litigation 
including cases that follow. 

Seabrook Litigation before DPU and FERC 

This office reached two settlements concerning the rate treatment of Seabrook 
Unit 2. The first settlement was reached with Canal Electric, and various other 
parties at the FERC. The second settlement was reached with Cambridge Electric 
and Commonwecdth Electric at DPU. The first settlement concerns the amount of 
Canal's investment in the cancelled Seabrook Unit 2 which will be charged under 
wholesale rates by Canal to Cambridge and Commonwealth. The second case in- 
volves the amount of the payments to Canal by Cambridge and Commonwealth 
which can be charged through retail rates. The settlements have been filed with 
the two agencies. 

As originally proposed. Canal would have recovered approximately $28 million 
(a 7% increase in wholesale revenues) in three years from Cambridge and Com- 
monwealth Electric which would have passed the increase along to retail customers. 
Under the FERC settlement, Canal will collect only 90% of its investment in 
Seabrook Unit 2 over approximately 10 years rather than 100% over three years. 
As a result of the FERC Settlement, retail ratepayers will receive a refund of about 
$7-million representing over collections to date by Canal Electric Company for 
its Seabrook 2 investment. 

The Attorney General reached a stipulated settlement of the rates oi New England 
Power Company and resolved the rate treatment of the Company's investment in 
Seabrook Unit 1. In a settlement filed for approval at the FERC, the Attorney 
General, NEP and other parties agreed that NEP could not recover from its 
ratepayers 53 % of its $543 million investment in Seabrook if the plant is cancelled. 
It will be unable to recover approximately 30% of its investment if the plant ever 
operates. The Company will also stop collecting carrying charges on its invest- 
ment and instead will use customer payments to dischargfe^their share of the Com- 
pany's investment in Seabrook. The settlement ends almost two years of litigation 
before FERC. 

MMWEC filed a request at the DPU seeking approval for additional financing 
of its investment in Seabrook. The Attorney General intervened to represent 
ratepayers and will oppose this financing request. MMWEC subsequently 
announced its intention to stop making Seabrook payments and sell its share of 
the plant. A DPU hearing on MMWEC 's request had not commenced at the end 
of the fiscal year. 



50 P.D. 12 

Retail Rate Cases and Other Regulatory Matters Before The DPU 

The Attorney General finished the administrative trial and submitted briefs urg- 
ing the DPU to reduce New England Telephone Company (Phase 2) rates by $159 
million or about 10% . We also argued that NET was unfairly charging monopoly 
residential and small business ratepayers excessive costs for a "gold plated" net- 
work designed to defeat the future competition for large business customers, and 
the costs of unregulated NYNEX affiliates. We urged the DPU to investigate these 
two areas in more detail. 

After trial, the Attorney General, NET and certain other parties to this case 
reached agreement on a stipulated settlement of the case. The stipulation was filed 
at the DPU for approval. It provides for a 50C reduction in monthly residential 
rates, a three-year freeze on those and certain business rates, the enrollment of 
NET into several programs to benefit low income consumers, and funding for the 
Attorney General to investigate NET's affiliate relationship and its construction 
budget. The stipulated settlement had not been acted on by the DPU at fiscal year end. 

The Attorney General filed a petition in August on behalf of himself and Sharon 
Pollard. Secretary of Energy in the Commonwealth, asking the DPU to investigate 
Massachusetts utilities' apparent failure to have sufficient capacity available to 
meet summer 1987 peak demands for electricity. The Attorney General filed 
testimony of three state energy officials. After 12 days of hearings, briefs were 
filed. The Attorney General asked the DPU to find that poor utility planning and 
an unreasonable reliance on Seabrook 1 and Pilgrim units that summer caused the 
shortages and to order appropriate remedies. The DPU subsequently found that 
the power planning engaged by NEPOOL was deficient and resulted in the short- 
ages. At fiscal year end. the case was still pending. 

The City of Boston filed a petition asking the DPU to reduce Boston Gas rates. 
The Company then requested a $15 million increase in rates. The City subsequently 
withdrew from the case. The Attorney General intervened to represent consumers 
hoping to achieve a significant rate reduction. At fiscal year end this case was still 
before the D.P.U. 

The Attorney General filed Comments in August 1987 with the DPU asking that 
it not deregulate the generation of electricity by adopting a bidding system or other 
automatic ratemaking formula. The Attorney General also urged the DPU to ex- 
pand this investigation to include conservation measures as a means of least-cost 
supply planning. The DPU accepted this and called for further comments to be 
filed by December 4. 

The Attorney General testified before the DPU on the concept of least cost 
integrated planning and urged it to adopt rules implementing such a requirement 
for all electric utilities. 

The DPU subsequently issued an order proposing a bidding system to govern 
cost recovery of power plant investment over the Attorney General's objections. 
The DPU has not taken action on the conservation phase of this case. 

Proceedings began before the DPU concerning the revenue requirement and rate 
design of Cambridge Electric Light Company 's rates. The Company proposed in- 
creasing the customer charge for residential users by 106% and for residential 
heating customers by 84%. 

The Attorney General and the Company stipulated to a $300,000 reduction in 
the Company's revenue requirement, which the DPU accepted. In addition, the 
Attorney General filed his initial brief in the rate design portion of the case which 
was not settled, seeking to limit the increase proposed for residential customers 



P.D. 12 51 

and to establish rates that support conservation. 

The DPU issued an order that moderated residential customer charge increases 
to 55% for non-heating customers and 70% for heating customers, and extended 
the 35 % SSI discount to residential heating customers. The DPU also ordered the 
Company to file within 120 days a detailed plan for meeting demand that includes 
conservation efforts. 

On Dec. 17, Western Massachusetts Electric Company (WMECo) filed its peti- 
tion for a $24 million or 9 % rate increase. Most of the rate request is to implement 
a 1986 DPU decision to phase Millstone 3 into the rate base over five years. The 
Company's rate design proposed an above-average increase at 1 1 % to residential 
customers. After the Attorney General cross examined Company witnesses and 
filed a brief in this case, the DPU ordered the Company to raise rates by only $8 
million, or 33% of its original request. The DPU did not adopt the Attorney 
General's proposed rate design but indicated that it might do so in subsequent cases. 

Richmond Telephone Company sought its first general rate increase in over 20 
years. The proposal to increase monthly rates by more than $13 would have more 
than doubled the residential rates. The Attorney General intervened in this case 
before the DPU and reached a settlement with the Company. The DPU approved 
the settlement, which prevented the local monthly rate from rising above $9 per 
month. 

In its annual review of the operating performance of Boston Edison Company 's 
fossil-fueled generating plants, the DPU found that 700 hours of outages experienced 
between November 1 , 1986 and October 3 1 , 1987 were the direct result of impru- 
dent actions by the Company. These findings of imprudence do not include the 
outage hours for plants in which Boston Edison has entitlements. Those have not 
yet been determined. 

The Department also ordered the Company to provide unit-by-unit heat rates, 
and put the Company on notice that the Department would review the performance 
goals set for Boston Edison's peaking units. Additionally, the Department noted 
that in future performance reviews it would carefully review Boston Edison's efforts 
to improve the performance of its fossil-fueled plants. 

Finally, the Department found BECo's citing of Pilgrim costs as a justification 
for deferring investments in its fossil-fueled plants "disturbing." The Department 
noted that limited capital should constitute only a "short term problem" for BECo, 
and expected BECo to make every effort to procure the financing necessary to pro- 
ceed with all capital projects identified as cost-effective and in the best interest 
of ratepayers. 

The Pilgrim Nuclear Power Plant has been out of operation for more than two 
years. Since the plant was shut down in April 1986, Boston Edison, Pilgrim's owner 
and operator, has incurred approximately $250,000 a day in costs to buy power 
to replace that generated by Pilgrim. The issue in this case centers on 
responsibility— to what extent the initial shutdown and length of the outage was 
the result of imprudent actions by Boston Edison and, consequently, how much 
of the replacement power costs should be paid by Company shareholders and how 
much should be charged to ratepayers. 

The plant has still not been granted permission to restart by the NRC. Hearings 
are expected to begin in the Fall and continue throughout FY '89. 

On June 16. 1987, Commonwealth Gas Company filed proposed rates with the 
DPU designed to generate an additional $15.7 million or 7. 1 % in annual revenues 
over rates in effect on June 30, 1987. The Company requested a return on equity 



52 P.D. 12 

of 1 4 . 5 to 1 5 . 2 % . Commonwealth also proposed new class rate designs for all rate 
classes which embodied significant increases for residential customers. Com- 
monwealth also proposed a firm gas transportation tariff. The DPU suspended the 
proposed rates until January 1, 1988, and set the requests for hearing. 

On December 31. 1987. after a month of hearings, the DPU granted Com- 
monwealth an increase of $12.5 million over rates in effect as of June 30. 1987 
based on an allowed return on equity of 13.25 % . The Attorney General had recom- 
mended an overall increase of about $6 million based on a return on common equity 
of 1 1 .5 % . The DPU also adopted rate designs yielding increases for the residen- 
tial non-heat and residential heating classes of 26% and 12% respectively. The 
Attorney General had recommended increases at about half that level. The DPU 
accepted the Attorney General's arguments on marginal cost which will serve to 
give more appropriate price signals to customers. 

The proposed firm gas transportation tariff is still pending in DPU (87-122A). 

This proceeding involved applications by Cambridge Electric Light Company 
and Commonwealth Electric Light Company to recover under G.L. Ch. 164. Sec. 
94G for fuel and purchased power charges. The Attorney General argued that con- 
sistent with precedent the DPU should impute Boston Edison Company's 
imprudence resulting in outages of Pilgrim 1 during January and February 1985 
to Commonwealth Electric Company and order refunds and interest of approx- 
imately $683,000. That total represents excess replacement power costs incurred 
(and already charged to customers) by Commonwealth as a result of the outages. 
The Attorney General also argued the DPU should impute to Commonwealth and 
to Cambridge any imprudence of Canal Electric Company (an affiliated company) 
with respect to an extended outage at Canal Unit 1 during the Fall of 1986. The 
hearings occurred in March and April 1988. The DPU has not issued a decision. 

Boston Edison Company sought authorization to issue $200 million of long term 
securities. We intervened to determine how much of the capital additions request 
related to the Pilgrim Nuclear Plant and to participate if the DPU decided to assess 
the economics of Pilgrim or the prudence of additional investments. The DPU 
decided not to decide those issues here, and approved BECo's request. 

New England Telephone (NET) sought DPU pennission to offer a switched virtual 
private network service (V— PATH Custom Network System) which would per- 
mit its large private line customers to obtain better service, usually at a lower price. 
NET claimed that this service was competitive because it was similar to a service 
offered by its competition and therefore, should be regulated with less scrutiny 
than other services. We intervened opposing this special deal for large business 
customers because eventually residential ratepayers would have to make up the 
lost revenue. The DPU agreed that because the proposal bundled competitive and 
monopoly services in one package, the package was anti-competitive and should 
be rejected. 

The Division was involved in reviewing the merits of New England Telephone's 
request for legislation to permit it to charge residential customers for directory 
assistance and in developing the Attorney General's oposition to this bill. 

NUCLEAR SAFETY 

The Nuclear Safety Unit litigates, on behalf of the Commonwealth, emergency 
planning, safety and management matters for nuclear power plants in and around 
Massachusetts. In Fiscal 1988, the Unit has been involved in litigation on the 



P.D. 12 53 

Seabrook Station in Seabrook, N.H., the Pilgrim Station in Plymouth, and Ver- 
mont Yankee Station in Vernon, Vt. 

The Seabrook litigation, in which the Attorney General's office has been involved 
for 14 years, is the single largest piece of litigation in the office. Separate proceedings 
are currently ongoing in the United States Nuclear Regulatory Commission (NRC) 
on low-power and full-power issues. First Circuit Court of Appeals in Boston, and 
the Federal Bankruptcy Court in New Hampshire. 

The Unit has been heavily involved in attempting to persuade the NRC not to 
permit low-power testing. The testing represents an environmentally and finan- 
cially significant point for the plant because, if permitted, it will irradiate and 
contaminate the plant for the first time. On February 3, 1988, the Unit persuaded 
the NRC's Appeal Board to reopen the previously closed low-power proceeding 
record to litigate the viability of the Applicants' new mobile and airborne siren 
alerting system for the Massachusetts Emergency Planning Zone. The previous 
fixed siren system had been removed after the First Circuit found that the applicants 
did not have the legal authority to erect it in the first place. The Appeal Board ruled 
that the siren litigation must be resolved favorably to the applicants before low- 
power testing can begin. 

On July 5, 1988, the Appeal Board ruled favorably on Massachusetts' petition 
to waive the NRC's rule which generally finds utilities financially qualified to operate 
nuclear power plants and to require an individualized determination in this case. 
The Unit had urged the Appeal Board to waive the rule because of New Hamp- 
shire's anti-CWIP stamte, the bankruptcy of Seabrook's lead owner. Public Service 
Company of New Hampshire (PSNH), and the decision of another owner, the 
Massachusetts Municipal Wholesale Electric Company (MMWEC). to remove itself 
from Seabrook. The matter is now pending before the full Commission. 

Separate proceedings before the NRC are now taking place concerning the New 
Hampshire emergency response plan, the ufility's emergency response plans for 
Massachusetts, and the June 28-29, 1988 joint exercise of those two sets of plans. 
Hearings on the New Hampshire plans began on October 5, 1987 in Concord, N.H. 
and were not completed until June, 1988. The hearings addressed the adequacy 
of the plans in terms of such issues as evacuation time estimates, communications, 
resources, human behavior and sheltering. A decision is expected this Fall. 

Similar proceedings have begun on the utility's Massachusetts plan and the 
performance of the exercise. Discovery is to be completed in mid-November and 
hearings will likely begin in the Spring of 1989. Hearings on the utility plans are 
likely to be even more complicated than those for the New Hampshire plan because 
of the presence of questions about the legality of state officials delegating to utility 
workers the authority to carry out the utility plans. 

In November, 1987, the NRC amended its emergency planning rules to facilitate 
review and evaluation of utility plans. Massachusetts, New York, and several 
environmental groups appealed the amendments to the First Circuit as an arbitrary 
and capricious attempt to push through the regulatory process the licensing of 
Seabrook and Shoreham Station on Long Island. The Attorney General argued for 
Massachusetts and the decision is now under advisement. 

On January 28, 1988, PSNH filed for protection under Chapter 1 1 of the Bank- 
ruptcy Code. PSNH is the first investor-owned public utility to make such a filing 
in more than 50 years. Because the fate of Seabrook is a central issue in the bank- 
ruptcy, the office filed an appearance with the bankruptcy court. On May 12, 1988, 
in response to the NRC's presentation to the bankruptcy court of its views on the 



54 P.D. 12 

licensing, we filed a document outlining the past and expected future course of 
the proceedings. 

Pilgrim Station has been shut down since April 1986 because of numerous prob- 
lems with the management and physical state of the plant. Until that time. Pilgrim 
had widely been viewed as one of the worst run nuclear plants in the country. 

In August, 1987, the Federal Emergency Management Agency found that the 
state of emergency planning and preparedness for an accident at Pilgrim is 
inadequate. 

On July 15, 1986, MassPIRG and other parties filed a petition with the NRC 
requesting that it issue an order to show cause why Pilgrim should not remain closed 
or have its operating license suspended until it remedied plant management 
deficiencies, design flaws in the plant's containment structure and emergency 
planning problems. The NRC denied the petition and the petitioners, who then, 
joined by this office, appealed to the First Circuit. On July 15, 1988, the court 
affirmed the NRC's ruling, holding that the ruling is not subject to judicial review. 

In October, 1987, our office filed another, similar petition raising issues which 
arose after the MassPIRG petition. On June, 1988, the NRC denied the petition 
with respect to design deficiencies but deferred its ruling with respect to manage- 
ment and emergency planning issues. 

The NRC conducted a two- week inspection of the plant in August 1988 to deter- 
mine whether the management and design issues had been resolved. A report on 
the inspection, in which a consultant to our office and the Massachusetts Depart- 
ment of Public Safety is participating, is expected in the Fall of 1988. 

In April, 1986, the Vermont Yankee submitted a proposed license amendment 
to the NRC to authorize an increase in the capacity of the existing spent fuel pool 
from 2000 to 2870 fuel assemblies. Because the change would increase the poten- 
tial consequences of certain types of severe accidents, the Unit intervened in the 
proceedings along with the state of Vermont and the New England Coalition Against 
Nuclear Pollution. We have asked the NRC not to permit the increase, until the 
case is completed. 

SPECIAL LITIGATION 

In a Chapter 1 1 bankruptcy proceeding, the Commonwealth filed a $ 122 million 
dollar claim in 1983 against Johns-Mansville for the cost of removing, repairing 
and otherwise managing the asbestos-containing products the company manufac- 
tured. Those products are present in a large number of more than 5,000 state 
buildings. 

The Attorney General continues to represent the Commonwealth's claim and 
serves as Chair and Chief Negotiator for the State Government Creditors Commit- 
tee, a group of 35 Attorneys General whose states filed claims in excess of $5 billion 
dollars. The Department played a key role in negotiations with Manville, other 
property damage creditors, additional creditors, and the representative of future 
health claimants. The Department and others negotiated the establishment of a pro- 
perty damage settlement trust and prepared a draft of the standards to be used by 
the Trust for payment of property damage claims. After a trial before a panel of 
three jurists, the panelists issued standards very similar to those originally propos- 
ed by the claimants. The standards will govern the payment of all property damage 
claims filed against Manville in the Chapter 1 1 . 

The Department continues to participate in the bankruptcy proceeding and meets 



P.D. 12 55 

regularly with the Property Damage Settlement Trusts trustees and executive direc- 
tor. The Department also assists in the development of claims proceeding procedures 
and claim forms, monitors the insurance settlements, and participates in the appeals 
of the Order confirming the Plan of Reorganization. 

On December 30, 1986, the Commonwealth filed a claim in the UNR Inc. Chapter 
11 bankruptcy proceeding in the U.S. Bankruptcy Court for the Northern District 
of Illinois, Eastern Division. UNR was a former manufacturer of asbestos prod- 
ucts which were used in construction. The Commonwealth's claim is for expenses 
actually incurred and expenses expected to be incurred in the abatement, including 
removal, repair and replacement, of all asbestos production in the Commonwealth's 
public buildings. The claim seeks the portion of $396,000, the Commonwealth's 
total asbestos related claim, which is determined to be UNR's actual liability. 
Discovery of the debtor, UNR Inc. , is proceeding on a coordinated basis with other 
states which filed similar claims. 

On August 25, 1987, the Department testified at a public hearing held by the 
Environmental Protection Agency in Washington, D.C. on its proposed rule on 
Asbestos-Containing Materials in Schools. The proposed rule was issued pursuant 
to the Asbestos Hazard Emergency Response Act of 1986 (AHERA). The Depart- 
ment represented a committee of 35 Attorneys General who have been working 
jointly on asbestos related issues, and urged EPA to make several changes before 
issuing its final rule. Those changes would strengthen the rule to further protect 
human health and the environment as required under AHERA. In its proposed rule, 
EPA had placed cost on an equal footing with protection of human health and the 
environment. In addition to its testimony, the Commonwealth filed extensive com- 
ments on the rule. The Commonwealth and other states intervened in an appeal 
of the AHERA regulations filed by certain former asbestos manufacturers. The 
United States Court of Appeals for the District of Columbia Circuit adopted EPA's 
and the state intervenors' position and upheld the AHERA regulations. 

In Cir\' of Boston v. Keene, filed by the City against 56 former manufacturers 
of asbestos products, the defendants challenged Chapter 260, §2D. Chapter 260, 
§2D is a special statute of limitations for asbestos property damage claims which 
was originally drafted and filed by the Department. Defendant manufacturers 
challenged the statute on several constitutional grounds. The department intervened 
in the case for purposes of defending the challenged statute. On February 26, 1988, 
Judge Morse issued a decision upholding the constitutionality of the statute. 

GOVERNMENT BUREAU 

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

A report of significant activity during fiscal year 1988 follows. 

Litigation. 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. 



56 PD. 12 

During Fiscal Year 1988, the Bureau opened 552 new cases, and closed 533 
cases. In addition, the Bureau supervised and monitored the defense of 86 welfare 
benefits cases by the Department of Public Welfare. Cases argued by Government 
Bureau attorneys resulted in one U.S. Supreme Court decision, 17 decisions by 
the Supreme Judicial Court, 19 by the Appeals Court, five by the U.S. Court of 
Appeals, and 13 by the U.S. District Court. 

The U.S. Supreme Court affirmed last year's decision in Commonwealth vBowen 
that the state is entitled to $1 1 .4 million in Medicaid reimbursements from the federal 
government. The court also reversed the First Circuit's ruling that the state must 
file a new suit in the U.S. Court of Claims in order to collect. 

In H\de Park Emerprises v. Comiolly, the First Circuit Court of Appeals affirmed 
a preliminary injunction enjoining enforcement of Section 3 of the state anti-takeover 
statute and opined that it was probably preempted by federal law, thus bringing 
to an end a series of takeover cases. 

In Beth Israel Hospital Association v. Board of Registration in Medicine, a case 
in which Attorney General Shannon personally appeared, the Supreme Judicial 
Court upheld regulations providing important new safeguards against medical 
malpractice. In Gardner-Athol Mental Health Association v. Zoning Board of 
Appeals, the Court sustained our contention that group homes in which the men- 
tally disabled learn "activities of daily living" are exempt from local zoning restric- 
tions. In Nigro v. Attorney General, the Court rejected a challenge to the Attorney 
General's certification of an initiative petition. In Coalition for the Homeless v. 
Dukakis, the Court ruled that the statutory obligation to provide aid to AFDC 
recipients is limited by the funds appropriated by the General Court, but the Welfare 
Department has a duty to notify the Legislature of a shortfall. In Barlow v. Wareham, 
the SJC upheld the validity of a local by-law, approved by the Attorney General, 
which restricted commercial shellfish harvesting to town residents or taxpayers. 
The SJC upheld state taxation of Tenneco, Inc., as a utility, notwithholding the 
diverse other activities of the corporation's subsidiaries. 

Professional discipline cases continued to occupy a good deal of the Bureau's 
fime, including Cherubino v. Board of Registration of Chiropractors , Friedman 
V. Board of Registration in Medicine, Bougioukas v. Board of Professional 
Engineers. 

The Commonwealth's regulatory initiatives were upheld in a number of cases. 
Worcester Sand & Gravel v. Board of Fire Prevention upheld a limitation on blasting 
within a certain distance of a microelectric plant. In Processed Apple Institute v. 
Department of Public Health, the Court confirmed the state's power to establish 
more stringent tolerance levels for pesticide residues than allowed by federal law. 
Rate Setting Commission regulations and decisions limiting hospital and nursing 
home costs were upheld in a series of cases in the Appeals Court and the SJC. 

Automobile insurance litigation drew heavily on Bureau resources as insurance 
companies challenged the constitutionality of the state's "reinsurance" system for 
high risk drivers, the restrictions on ceasing business, and the level of authorized 
rates. 

The docket of Alcoholic Beverages Control Commission (ABCC) cases 
lengthened as the Commission's efforts to curb drunk driving brought about more 
license suspensions. The Commission also stepped up its regulation of liquor 
wholesalers. 

InEEOCv. Commonwealth, the U.S. District Court agreed with the SJC s deci- 
sion in Apkin v. Commonwealth that the state constitutional provision mandating 



P.D. 12 57 

judicial retirement at age 70 is not preempted by federal law. The EEOC is appeal- 
ing. In Dukakis v. U.S. Department of Defense, the court rejected the Com- 
monwealth's claim that it was entitled to withhold consent from National Guard 
training in Honduras. We are appealing. The court struck down the legislative plan 
for redistricting the state House of Representatives as violative of the "one per- 
son, one vote" right, but approved a new plan which cured this defect. 

We settled the Boston Harbor case by an agreement creating a $2 million Boston 
Harbor-Massachusetts Bay Environment Trust Fund and agreeing to pay a $425,000 
penalty to the U.S. Treasury. The court granted our request for a nationwide in- 
junction against enforcing new federal regulations severely curtailing free speech 
and choice in family planning programs supported even partially by federal funds. 
The U.S. Department of Health and Human Services is appealing. A federal sex 
discrimination suit against the Department of Correction was settled. 

A major settlement was achieved in a suit brought against Worcester State Hospital 
by the U.S. Department of Justice. 

Mandatory retirement for MDC police officers and age limitations for applicants 
to be Motor Vehicle Registry officers were upheld, but both decisions are being 
appealed. Stipulations dismissing with prejudice three Equal Employment Oppor- 
tunity Commission (EEOC) cases challenging the Massachusetts statute which 
requires municipal police and firefighters to retire at age 65 were entered in the 
U.S. District Court. 

By-Laws. Town by-laws, home rule charters, and amendments thereto are 
reviewed and must be approved by the Attorney General before becoming effec- 
tive. The review function is performed by attorneys in the Government Bureau. 
During the fiscal year, the By-Laws Division reviewed 2, 146 by-laws (a 33 % in- 
crease over last year) and 10 home rule charter actions from more than 300 towns. 
There were 113 disapprovals or disapprovals in part, making an error rate of five 
percent for the submittals involved. 

The by-laws received this year consisted of 838 general by-laws and 1 .308 zon- 
ing by-laws. General by-laws pertain to town government and the exercise of 
municipal power. The zoning by-laws are a continuing exercise of the police power 
over land use. Zoning by-laws generate the most local controversy since they affect 
what the land owner considers as his constitutional right to own, use and enjoy 
property. 

Significant by-laws reviewed this year included a condominium conversion by- 
law linking condominium development to construction of low and moderate-income 
housing, various measures to prevent accidental discharges of toxic, combustible 
and hazardous materials, and numerous by-laws to control pit bull terriers. 

As part of an effort to enable the Attorney General to serve a more active and 
effective role in the field of municipal law, the former By-Laws Division was 
expanded into a Municipal Law Unit during Fiscal Year 1988. Working in con- 
junction with the Massachusetts Town Clerks Association, the unit's staff stream- 
lined the procedures to be followed by town clerks in submitting proposed by-laws 
to the Attorney General for approval. A computer data base is also being developed 
to docket and index all town by-laws. In addition. Division attorneys filed an amicus 
brief in the Supreme Judicial Court in Canner v. Town of Groton, on behalf of 
30 local electric ratepayers seeking to enforce two town by-laws which require 
town meeting approval before the town could make certain investments in electric 
generating projects. 



58 P.D. 12 

EXECUTIVE BUREAU 

The Executive Bureau is ciiarged with the overall administration and policy of 
the Attorney General's office. In addition, the Bureau handles a number of special- 
ized functions, including constituent relations, legislative affairs, and opinions. 



LEGISLATION 

The Legislative Affairs Office is responsible for coordinating the Attorney 
General's position on state and federal legislation. The staff serves as the liaison 
to the Massachusetts legislature and other elected officials and is repsonsible for 
overseeing all legislation sponsored by the Attorney General. 

During fiscal year 1988, the Attorney General filed 22 bills, one of which was 
signed into law before the summer recess— the Child Sexual Exploitation Bill, pro- 
hibiting the production and dissemination of child pornography. 

Twelve of the bills have begun to be considered in various stages by the Legislature 
including: 1) an act to establish the Massachusetts Corrupt Organization Statute; 
2) an act revising the penalties for violation of certain environmental laws; 3) an 
act making it unlawful to falsely report a fire, or to threaten to burn or destroy 
a place of worship; 4) an act to clarify the requirements relating to condominium 
conversions; 5) an act to allow appropriate use of investigatory materials in court; 
and 6) an act to control certain precursor chemicals. 

The Division actively monitored the progress of approximately 100 bills, and 
became actively involved in 20 through meetings, letters, and testimony. The Divi- 
sion also monitored the activities of the committees as well as the floor action of 
the House and Senate. 



ELECTIONS DIVISION 

The major responsibility of the Elections Division is to provide legal represen- 
tation to the Secretary of State and the State Ballot Law Commission regarding 
election related issues. 

One significant case involved a challenge to the state's decennial census for the 
city of Boston and the Legislature's 1987 House redistricting plan. The suit, {Black 
Political Task Force, etal. v. Connolly, et al and Massachusetts Republican State 
Committee, et al. v. Connolly, et al.), brought by several minority groups in the 
city of Boston and the Massachusetts Republican State Committee, claimed that 
the population figures determined and verified by the State Decennial Census Com- 
mission and used for legislative reapportionment were invalid and therby violated 
"one person, one vote." 

The plaintiffs further alleged that the 1987 reapportionment of the Massachusetts 
House of Representatives exceeded constitutionally mandated population devia- 
tions. A three-judge federal court determined that the state census for the city of 
Boston was valid. However, the court found that the population deviations in the 
House redistricting plan exceeded constitutional limits. 

In another case, Shcmnon et al. v. Plum Island Water Commission, et al. , the 
Division successfully brought an action against the Commission. In a rare action 
in quo warranto, the court invalidated the election of several water commissioners 
because only taxpayers rather than registered voters were allowed to participate 



P.D. 12 59 

in the election. The court also found violations concerning other aspects of the elec- 
tion. A new election was ordered. 

The Elections Division successfully defended several decisions by the State Ballot 
Law Commission concerning the proper issuance of certificates of registration by 
local clerks and the residency qualifications of candidates. 

In August of 1987, 21 initiative petitions were filed proposing various laws to 
be submitted to voters on the November 1988 ballot. Fifteen were certified as appro- 
priate for submission to the people. 

Two separate lawsuits challenging the Attorney General's certification were 
initiated in the Supreme Judicial Court. The first case, Nigro v. Attorney General, 
involved a claim that the Attorney General's certification was erroneous because 
the title of the petition was inappropriate. In the second case, Yankee Atomic v. 
Secretary of State, the plaintiffs contended that the certified initiative was beyond 
the scope of Article 48 because it was inconsistent with the right to receive com- 
pensation for private property appropriated to public use. 

In both cases, the Supreme Judicial Court agreed with the Attorney General and 
affirmed his certification determination. 

The Elections Division is responsible for enforcing compliance with the state 's 
campaign finance law by candidates and political committees. (M.G.L. c. 55) 

In a major case brought under the state's campaign finance laws, the Attorney 
General initiated a civil action against a sitting state senator claiming that he and 
his political committee made political expenditures in violation of campaign finance 
laws. A judgment required the senator to pay $10,000 as a civil forfeiture and repay 
his committee for all inappropriate expenditures which totaled approximately 
$5,500. 

The Office of Campaign and Political Finance cited 187 individual candidates 
or treasurers of political committees who failed to file the required financial 
disclosure reports. As a result of administrative action by the Division, 75 reports 
were subsequently filed. 

The Elections Division brought civil actions against the remaining 1 12 candidates 
or treasurers, with the court issuing orders requiring the filing of financial reports. 

The Elections Division is also responsible for enforcing state statutes that require 
legislative agents (lobbyists) and their employers to file financial disclosure 
statements with the Office of the Secretary of State. (M.G.L. c.3 s. 43,44,47) In 
fiscal year 1988, six violations of these sections were reported by the Secretary 
of State to the Attorney General. As a result of the action taken by the Elections 
Division, all reports have been filed with the State Secretary. 

The Division assists the State Jury Commissioner in his efforts to have cities 
and towns submit census lists in a timely manner so that the jury selection process 
can be carried out effectively. With the assistance of the Elections Division, all 
cities and towns filed their respective reports without the need to seek court action. 

WESTERN MASSACHUSETTS 

The Western Massachusetts Division of the Department of the Attorney General 
is responsible for legal matters in the four western counties of Berkshire, Franklin, 
Hampden and Hampshire. The Western Division, located in Sprinfield, is staffed 
by investigators and attorneys. During fiscal 1988, the Division was responsible 
for more than 600 cases. 

The Division litigates a wide range of cases, including tort, contract, eminent 



60 PD. 12 

domain, worker's compensation, environmental, consumer protection, civil rights, 
administrative appeals, and victims of violent crimes. The Division also prosecutes 
fraud cases for the Division of Employment Security. 

Similarly, the investigators are responsible for a number of cases. In addition 
to investigating consumer fraud, investigators work closely with attorneys in 
developing their cases by interviewing witnesses, reviewing documents and accum- 
ulating and compiling potential evidence. 

The Division also handles consumer complaints and attempts to resolve them 
short of court action. 

PUBLIC RECORDS, FAIR INFORMATION PRACTICES, 
OPEN MEETING LAW 

During fiscal 1988. the responsibility for enforcing the Public Records Law, 
the Fair Information Practices Act, and the Open Meeting Law was transfered from 
the Civil Rights Division to the Executive Bureau. 

Enforcement of these three laws represents most of the work done by this Depart- 
ment in the area of public disclosure. Many complaints and inquiries filed with 
the Department concerning these laws were resolved without litigation. 

OPINIONS 

The Attorney General is authorized by M.G.L. c.l2, s. 3, 6, and 9 to render 
legal advice and opinions to constitutional officers, agencies and departments, 
district attorneys, and branches of the Legislature. Opinions are given primarily 
to the heads of state agencies and departments. 

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 ask generally 
about the meaning of a particular statute, lacking a factual underpinning, are not 
answered. 

Opinions are not offered on questions raising legal issues which are the subject 
of litigation or that concern collective bargaining. Questions relating to the wisdom 
of legislation or administrative or executive policies are not addressed. Generally, 
federal statutes are not considered and the constimtionality of state or federal legisla- 
tion is not determined. 

Opinion requests from state agencies which report to a cabinet or executive office 
must first be sent to the appropriate executive secretary for his/her consideration. 
If the secretary believes the question raised is one which requires resolution by 
the Attorney General, the secretary then requests the opinion. 

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 inappropriate for this Department to 
be placed in the midst of an administrative or legal dispute between these two entities. 
These rules help to ensure that the agency and its executive office speak with one 
voice insofar as Opinions of the Attorney General are concerned. 



P.D. 12 61 

If the agency or executive office requesting an opinion has a legal counsel, counsel 
should prepare a written memorandum explaining the agency's position 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 agen- 
cies, governmental entities, or private individuals or organizations, the Opinion 
Division solicits the views of such interested parties before rendering an opinion. 

The issuance of informal opinions is strongly discouraged. Informal Opinions 
of the Attorney General are often relied upon as if they were formal Opinions. 
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. 
It is made explicit that the informal opinions cannot be relied upon as if they were 
formal Opinions. 

Between July 1 , 1987 and June 30, 1988, three formal Opinions of the Attorney 
General were issued with an additional 1 10 requests considered, evaluated, and 
declined. 

The formal Opinions follow. 



62 P.D. 12 

December 21, 1987 
Robert Q. Crane, Chairman 
State Board of Retirement 
One Ashburton Place - Rm. 1219 
Boston, Massachusetts 02108 

Dear Chairman Crane: 

In your capacity as chairman of the State Board of Retirement, you have requested 
my opinion as to whether the Board is required to pay an annual benefit to widowers 
under G.L. c.32 §101. The statute provides benefits to widows of disabled 
employees, but does not expressly provide benefits to widowers. ' For the reasons 
set forth below, it is my opinion that the correct interpretation of G.L. c.32, §101 
requires the State Board of Retirement to pay the annual benefit provided by that 
statute to widowers as well as widows. 

It is my understanding that the State Retirement Board has taken the position 
that §101 should be interpreted literally and that the annual allowance should be 
paid only to widows and not widowers. The Board has expressed concern that there 
have been alterations to other sections of the chapter, which have inserted surviv- 
ing spouse language, and has pointed out that the legislature may have intended 
§101 to apply exclusively to widows since §101 was not altered at the same time. 
Other Retirement Boards, who are entitled to a contribution or reimbursement from 
the State Retirement Board, have taken a contrasting view from that of the State 
Retirement Board. In addition, another state agency, the Contributory Retirement 
Board, has interpreted a different section of the pension statute that similarly still 
contains sex-specific beneficiary terms to require the payment of dependency 
benefits a gender-neutral manner.- Flanagan v. Dedham Retirement Board, 
CR-8995 (March 13, 1986). 

My position as the chief law officer for Massachusetts empowers and requires 
me to " set a unified and consistent legal policy for the Commonwealth ' ' . Secretary 
of Administration & Fin. v. Attorney General, 367 Mass. 154, 163 (1975). In the 
instant case, there is a conflict among various Retirement Boards about the correct 
interpretation of § 1 1 . 1 am issuing this opinion in order to establish a unified legal 
policy for the agencies of the Commonwealth to follow with regard to benefits 
payable to widowers under §101. See Feeney v. Commonwealth, 373 Mass. 359, 
364 (1977) (Attorney General responsible for formulating uniform and consistent 
legal policy of the Commonwealth). 

My conclusion that the State Retirement Board should pay widowers benefits 
under G.L. c.32. §101 is compelled by fundamental principles of state and federal 
constitutional law, Weinberger v. Wiesenfeld, 420 U.S. 636 (1975); Lowell v. 
Kowalski, 380 Mass. 663, 665-666 (1980), and is consistent with state law govern- 
ing statutory construction. See G.L. c.4. §6, cl.4. (words of the masculine gender 
may include the feminine gender). In the instant case, if G.L. c.4, §6. cl.4 is utilized 
to analyze the statutory provision in issue, the word "widow" can reasonably be 
expanded to include widowers and thereby avoid an interpretation that would clearly 
violate both the Massachusetts and federal constitution. 

G.L. c.4, §6, cl.4 was applied by the Supreme Judicial Court to a benefits statute 
with the result that the masculine pronoun was construed to include the feminine. 
Brown 's case, 322 Mass. 429, 430 (1948) (workmen's compensation dependency 
benefits available to children of injured mothers as well as injured fathers where 
statute used term "his injury"). The Court ruled that, in statutes where the masculine 
gender is used, the masculine gender shall be construed as including the feminine, 
unless it would "involve a construction inconsistent with the manifest intent of 
the law-making body or repugnant to the context of the same statute. ' ' Id. See also 



P.D. 12 63 



G.L. C.6. A reading of G.L. c.32, §101 to include widowers within "widows" 
is consistent with the intent of the section, which appears to be the provision of 
annual benefits to the surviving spouse of a disabled public employee. 

An argument can be made that, since the legislature has amended certain other 
provision of Chapter 32 to make benefits available to spouses regardless of sex, 
they consciously did not choose to alter the wording of §101 , which refers exclu- 
sively to widows. See, e.g., G.L. c32, §100 (pensions to "surviving spouses" 
of firefighters, police officers, or corrections officers killed in performance of duties; 
formerly read "widow"). In contrast, the only amendments to §101 have increased 
the amount of the annual benefit to be paid to a widow and have not otherwise 
altered the wording of the statute. St. 1984, c. 389, §4; St. 1972. c. 793, §5; St. 
1964. c. 490. 

However, it is a well-established principle of statutory construction that statutes 
should be construed, if possible, in such a way as to avoid unconstitutionality. Loriol 
V. Keene, 343 Mass. 358. 363 (1962). See also Commonwealth v. Slome, 321 Mass. 
713, 716 (1947). An application of §101 to allow benefits to be paid solely to widows 
would clearly violate both the federal and Massachusetts constitutions. See Wengler 
V. Druggists Mutual Ins. Co., 446, U.S. 142 (1980); Califano v. Goldfarb, 430 
U.S. 199 (1977); Weinberger v. Wiesenfeld, 420 U.S. 636 (1975); Lowell v. 
Kowalski, 380 Mass. 663, 665-666 (1980). Under the Massachusetts Equal Rights 
Amendment, classifications based on sex are subject to a degree of constitutional 
scrutiny which is more stringent than the scrutiny under the federal Equal Protec- 
tion Clause. Lowell v. Kowalski, 380 Mass. at 665. 666; Attorney General v. 
Massachusetts Interscholastic Athletic Association, 378 Mass. 342. 354 (1979); 
Commonwealth v. King, 374, Mass. 5, 21 (1977). Legislative prohibitions or 
exclusions based on gender are "prima facie invalid" under the Equal Rights 
Amendment. Attorney General v. MlAA, 378 Mass. at 353. See also Opinion of 
the Justices, 374 Mass. 836, 842 ( 1977). Such classifications are only permissible 
when they meet the compelling state interest test. See Buchanan v. Director of 
Employment Securit}- , 393 Mass. 329, 334 (1984) (statutes facially unconstitutional 
where explicit sex-based distinctions not based upon compelling state interest). 

Thus, if G.L. c.32, §101 is construed to prohibit widowers from receiving an 
annual allowance following the death of a disabled spouse, it is facially invalid 
under the ERA because it discriminates on the basis of gender. Accordingly, it 
is constitutionally defective unless it meets the compelling state interest test.^ 
However, if the statutory provision in question is interpreted to exclude widowers, 
it would not pass the compelling state interest test for the reasons discussed in the 
remainder of this Opinion. 

Even under the lesser scrutiny accorded gender based classifications challenged 
as violating the federal constitution, statutes providing benefits for widows only 
have uniformly been held unconstitutional. Wengler v. Druggists Mutual Ins. Co., 
446 U.S. 142. 143 (1980) (Missouri statute granting death benefits to widows, 
but not widowers, who have not proven incapacity or economic dependence on 
deceased spouse invalidated); Califano v. Goldfarb, 430 U.S. 199, 204 (1977) 
(federal statute granting Social Security survivors' benefits to all widows only 
without proof of financial dependency on deceased violative of Equal Protection 
Clause); Weinberger v. Wiesenfeld, 420 U.S. 636, 637-639 (1975) (federal statute 
granting Social Security survivors' benefits solely to widowed mothers and not 
fathers declared unconstitutional). Significantly, if interpreted to provide benefits 
to widows only, the Massachusetts statute in issue here would be more 
discriminatory than some of the invalidated federal statutes. In Wengler and 
Goldfarb, while widows alone could automatically qualify for benefits, widowers 
who could prove financial dependence on their deceased wives would also qualify 
for benefits. 446 U.S. at 144. 145: 430 U.S. at 201. In contrast, if G.L. c.32. 



64 P.D. 12 



§101 is interpreted to exclude widowers from the benefits provision, the exclusion 
would be irrebutable. Such an outright prohibition "indisputably mandates gender- 
based discrimination." Wengler, 446, U.S. at 14. 

If §101 is interpreted in this way. it would provide female public employees with 
less protection for their spouses than that provided for male employees solely because 
of the employee's gender. As in Wiesenfeld, where a widowed father was denied 
survivors' benefits only because of his sex. a denial of death benefits in the 
Massachusetts statute would "clearly operate . . .to deprive women of protection 
for their families which men receive as a result of their employment." 420 U.S. 
at 645. 

Such a result would discount the role of female public employees in the paid 
work force, maintain sexual inequality, and foster governmental discrimination.'* 
In Wiesenfeld, an unanimous United States Supreme Court found a virtually iden- 
tical gender-based exclusion to be an "archaic and overbroad generalization" not 
tolerated under the federal Constitution. 420 U.S. at 643. 

With regard to the statutory provision in question, there appears to be no legislative 
history available to signal the need which § 1 1 's sex-specific language was intended 
to serve. From justifications advanced by governmental agencies in other jurisdic- 
tions defending similar statutes, it can be inferred that the legislature concluded 
that female spouses of public employees would normally be dependent upon their 
husbands, while male spouses of public employees would not need benefits. ' 
However, such justifications have been offered without success by the parties defen- 
ding similar statutory gender classifications against claims they violated the federal 
Equal Protection Clause. See Frontiero v. Richardson AW U.S. 677 ( 1973) (statute 
invalidated where dependents' benefits available to wife of serviceman without 
proof of need, but only to husband of servicewomen if husband proves financial 
dependency). 

Furthermore, even if the presumption that widows tend to be more economically 
dependent than widowers on their spouses had some empirical support, that ' 'gender- 
based generalization cannot suffice to justify the denigration of the efforts of women 
who do work and whose earnings contribute significantly to their families' sup- 
port. " Wiesenfeld, 420 U.S. at 645. Similarly, in Wengler, administrative conve- 
nience and the bare assertion that men are more likely to be principal supporters 
of their spouses than women was found to fall far short of adequately justifying 
gender-based discrimination. 446 U.S. at 151-52. 

In the present case, there is no evidence whatsoever that excluding the benefits 
of §101 from widowers has any empirical support and. particularly in light of the 
lack of a dependency criterion, it is difficult to imagine how such gender-based 
discrimination could be justified.'' Moreover, since the legislative justification which 
conceivably could be offered to support the distinction between widows and 
widowers has been consistently viewed as insufficient by the courts under the lesser 
federal standard, it may be concluded that a Massachusetts court applying the more 
stringent ERA standard would rule that the exclusion of widowers under §101 would 
not meet the compelling state interest test. 

Where a statutory provision has been declared an unconstitutional sex-based 
classification, the question of the proper remedial course arises. Califano v. 
Westcoti, 443 U.S. 76, 82, 89 (1979). See also Wengler, 446 U.S. at 152. Two 
options are available: the law may be invalidated in its entirety or the provision 
may be extended to cover both men and women. Califano v. Westcott, 443 U.S. 
at 82, 89 (choices were to enjoin operation of sexually discriminatory welfare pro- 
gram or extend benefits to both sexes; Court extended benefits). Generally, the 
courts have suggested that extension, not nullification, is the proper course of action. 
Id. at 89. See also Califano v. Goldfarb, 430 U.S. 100 ( 1977); Frontiero v. Richard- 
son, 41 1 U.S. at 691 and n.25. Accord Lundgren v. Wliitney's, Inc., 614 P. 2d. 



P.D. 12 65 



1272 (Wash. Sup. Ct. 1980) (right to sue for loss of consortium extended to wives 
where right previously available only to husbands). 

In the instant case, extension of the benefits of §101 to widowers as well as widows 
is consistent with the spirit of the statute and would accomplish the apparent object 
intended by the legislature to provide spouses of disabled public employees with 
benefits.^ See Califano v. Westcott, 443 U.S. at 82 (extension of benefits to 
unemployed parents regardless of sex ordered where strong commitment in legisla- 
tion to goal of assisting needy children). Such a result would also be in keeping 
with the statutory construction delineated in c. 4, §6, cl. 4 and consonant with the 
provisions of the Massachusetts and federal constitution. Accordingly, I therefore 
conclude that the proper answer to the State Retirement Board's question is yes, 
if G.L. c.32, §101 is to be implemented in a constitutional manner, an annual benefit 
must be paid to widowers as well as widows. 

Very truly yours. 



JAMES M. SHANNON 
ATTORNEY GENERAL 



' §101 of G.L. c.32 provides that if a disabled public employee is "unable to pro- 
vide for any annual allowance to be paid to his vv/c/ovv," the widow shall be paid, 
with certain restrictions, an annual allowance of $3,000. (emphasis supplied) 

2 In Flanagan, the issue was whether G.L. c.32, §9(2)(c) should be interpreted 
to grant dependency benefits to the brother of a deceased member where the statute 
referred exclusively to "sister". Id. using the Equal Rights Amendment as the 
basis, the Contributory Retirement Board ruled that an otherwise qualified brother 
should receive the same benefits as a sister would have under G.L. c.32, §9(2)(c). 
Id. In a subsequent announcement, the Public Employees Retirement Administra- 
tion (PERA) stated its "intention to follow CRAB's decision and apply the Equal 
Rights Amendment to those sections of chapter 32 which are not gender neutral." 
Vol. IV, P.E.R.A. Bulletin, No. 1 (April, 1986). 

^ In only one case has the Supreme Judicial Court found a sex-based legislative 
classification to be supported in any respect by a compelling state interest. Lowell 
V. Kowalski. 380 Mass. at 666 (compelling interest in distinguishing right of an 
illegitimate child to inherit from her natural mother as opposed to her father). 
Nonetheless, in that case, the court ruled that the statute was not properly confined 
to the fulfillment of that interest and was overbroad. Id. 

'^ The exclusion of widowers clearly discriminates against working women and 
surviving husbands as opposed to working men and widows. Wengler, 446 U.S. 
150 at n.5. 

5 It sould be noted, however, that the benefits of G.L. c.32, §101 are not based 
upon need. If a male public employee retires due to a job related disability and 
dies from a cause different from his disability, his widow need not prove actual 
economic need in order to receive an annual allowance. G.L. c.32, §101. 

^ As noted by the Supreme Judicial Court in Attorney General v. MIAA . even " 'benign 
purposes may inadvertently perpetuate outmoded stereotypes." 378 Mass. at 356 
n.32. 



66 P D. 12 

7 A cursory reading of Chapter 32. the pension statute, reveals eight other sections 
which appear to refer exclusively to widows or wives. G.L. c.32, §12C; 44B; 59A; 
85 J- 89B- 89C; 89D; 92 A. It should be noted that all of these sections may suffer 
from the same'constitutional defect as §101 and either need to be interpreted in 
a gender-neutral manner or be legislatively corrected. 



P.D. 12 67 

June 16, 1988 
Charles V. Barry 
Secretary 

Executive Office of Public Safety 
One Ashburton Place 
Boston, Massachusetts 02108 

Dear Secretary Barry: 

You have requested my opinion on the scope of G.L. c. 148, §25A 1/2, a statute 
requiring that older high-rise buildings in the Commonwealth be retrofitted with 
automatic sprinklers. Specifically, you have asked whether the statute "requires 
that automatic sprinklers be provided in buildings constructed prior to January 1 , 
1975 either as condominiums or converted to condominiums before or after that 
date/"' G.L. c. 148, §26A 1/2 expressly exempts from the sprinkler requirement 
buildings which have been submitted to the provisions of the general laws govern- 
ing condominiums, i.e. G.L. c. 183A. The question has arisen, however, as to 
when a building must have been submitted to the condominium law in order to 
be exempt from the sprinkler requirement.- For the reasons stated below, it is my 
opinion that only buildings converted to, or constructed as, condominiums prior 
to January 1 , 1975, are exempt from the automatic sprinkler requirement of G.L. 
c. 148, §26A 1/2. 

The canons of statutory construction that must guide my analysis are familiar. 
"Ordinarily, if the language of a statute is plain and unambiguous it is conclusive 
as to legislative intent." Sterilite Corp. v. Continental Casualty Co. , 397 Mass. 
837, 839 (1986). However, "time and time again." the Supreme Judicial Court 
has stated that "we should not accept the literal meaning of the words of a statute 
without regard for that statute's purpose or history. ' " Id. Moreover, the Court has 
declined to interpret a statute literally when such an interpretation would lead to 
an absurd or unworkable result. See, e.g. , Apkin v. Treasurer and Receiver General, 
401 Mass. 427, 435 (1988) (declining to interpret federal age discrimination law 
as preempting state mandatory retirement law for state judges "whatever the [federal 
law] may say if read literally"); Board of Appeals of Hanover v. Housing Appeals 
Committee. 363 Mass. 339, 355(1973) ("we must avoid a construction of statutory 
language which produces irrational resuhs"). Interpreting public safety legisla- 
tion requires special care to ensure that a statute's public safety purposes are effec- 
tuated. See Pruiss v. Springfield. 21 Mass. App. Ct. 960. 961 (1986). citing 
Wliirlpool Corp. v. Marshall. 445, U.S. 1, 13 (1980). 

With these principles in mind, I turn to the language of the statute at issue. G.L. 
c. 148. § 26A 1/2 provides that "[e]very building or structure" over 70 feet and 
constructed prior to January 1 , 1975 "shall be protected with an adequate system 
of automatic sprinklers in accordance with the provisions of the state building 
code. . ." G.L. c. 148, § 26A 1/2. The statute further provides that "sprinklers 
shall not be required to be installed in buildings where construction has commenced 
prior to January first, nineteen hundred and seventy-five and which have been sub- 
mitted to the provisions of chapter one hundred and eight-three A. . ." Id. Taken 
literally, the exemption for condominiums might appear to exempt from the sprinkler 
requirement any building constructed prior to January 1, 1975, which has at any 
time satisfied or will satisfy the legal formality of being submitted to the provisions 
of c. 183A, i.e. by the execution or recording of a master condominium deed.^ 
However, such an interpretation of the exemption must be rejected for several 
reasons. 

A broad interpretation of the condominium exemption would undercut the primary 
purpose of G.L. c. 148, § 26A 1/2. which is, quite clearly, to protect the public 



68 P.D. 12 



from the hazards of fires in older, high-rise buildings. G.L. c. 148, § 26A 1/2, 
which codifies, in part, chapter 633 of the Acts of 1986, was enacted on December 
23, 1986. St. 1986, c. 633, § 2. The law prior to that time only required high-rise 
buildings constructed after January 1. 1975, to be equipped with automatic 
sprinklers.'* Attention was focused on the inadequacy of the prior law in the after- 
math of a highly publicized fire in the Prudential Building on January 2, 1986. 
See The Boston Globe, January 3, 1986, at 1 (noting that efforts to fight Prudential 
fire were hampered by absence of sprinkler system); The Boston Globe, January 
8, 1986, at 16 (editorial noting that Prudential was not required to have sprinklers 
under state law at the time). The original version of the bill that was enacted into 
law as G.L. c. 148, §26 A 1/2 was filed soon after the Prudential fire. See Mass. 
H. 862 (1986). 

As you have elsewhere noted, there is no reason to believe that high-rise con- 
dominium buildings, as a class, present less of a fire-safety risk than any other 
class of buildings. See Letter from Secretary Charles Barry to Senator Patricia 
McGovern (November 14, 1986) (on file in Attorney General's library). Fires in 
high-rise residential buildings create particular life-safety concerns. R. Coleman, 
Management of Fire Service Operations 305 (1978). In addition, there is no apparent 
public-safety rationale for distinguishing between condominiums and other types 
of residential buildings, such as apartments. Any argument based on preserving 
the freedom of choice of condominium owners^ ignores a basic premise of fire- 
safety laws, which intentionally restrict individual choice to run risks the Legislature 
deems unreasonable. Such restrictions are justified by the fact that the costs of a 
fire are not simply borne by the property owner. All of a building's occupants, 
residents, workers and visitors, as well as neighbors, firefighters, insurers, and 
the public at large, have a strong stake in whether sprinklers are installed in a 
building, particularly in a high-rise building. See generally R. Coleman, Manage- 
ment of Fire Service Operations 294-332 (1978) (describing difficulty of fighting 
high-rise fires). In view of these considerations, a narrow construction in favor 
of the statute's public safety purposes is appropriate. Cf. Sutherland, Stamtory Con- 
struction §71.04, 537 (4th ed. 1986) ("modern trend has been to give. . .[public 
safety] legislation a liberal interpretation in favor of its objectives"). 

Indeed, interpreting the condominium exemption to apply to all older high-rise 
buildings submitted at any time to the provisions of G.L. c. 183A would threaten 
completely to undermine the statute with regard to high-rise residential buildings. 
Of the several hundred buildings in the Commonwealth that come within the ambit 
of the law, see Press Release of Governor Michael S. Dukakis (December 23, 1986) 
(on file in State House library), a substantial proportion are residential. See Letter 
of Joseph A. O'Keefe, State Fire Marshall, to Assistant Attorney General (January 
27, 1988) (on file in Attorney General's library). Among those, a significant number 
are condominiums. Id., and many more could be converted to condominiums in 
the future. In fact, owners of apartment buildings would have a strong incentive 
to submit their buildings to the provisions of chapter 183 A— a legal formality— if, 
by doing so, they could avoid the cost and inconvenience of putting in automatic 
sprinklers.^ In my opinion, the Legislature could not have intended to create such 
a gaping loophole. Cf.. 1916 Op. Att'y Gen. 585, 586 (avoiding interpretation of 
exception to 1914 automatic sprinkler law which would practically emasculate the 
law).' 

Rejecting a broad interpretation of the condominium exemption, I conclude that 
the statute only exempts condominiums converted or constructed prior to January 
1, 1975. This conclusion is supported by the exemption's specific reference to 
buildings "where constrution has commenced prior to January first nineteen hun- 
dred and seventy-five. ' ' The entire section 26A 1/2 concerns buildings constructed 
prior to January 1 , 1975, as distinguished from section 26 A, which covers buildings 



P.D. 12 69 



constructed or substantially altered after that date. St. 1975, c. 676, § 3. The 
Legislature had no reason to repeat the January 1 , 1975 date in the condominium 
exemption unless it intended the exemption to be read temporally, i.e. to exempt 
buildings whose construction has commenced prior to January 1 , 1975 and which 
have been submitted to the condominium provisions by then . Any other interpreta- 
tion would make the repetition of the date surplusage. Cf. Hie United States Jaycees 
V. Massachusetts Commission Against Discrimination, 391 Mass. 594, 602 (1984) 
("every word of a legislative enactment is to be given force and effect").* 

Finally, my conclusion that the statute does not exempt condominiums converted 
after January 1, 1975 is supported by the necessity to harmonize § 26 A 1/2 with 
§ 26A, the sprinkler requirement for newer buildings. Section 26A requires 
automatic sprinklers in "buildings and structures the construction or substantial 
alteration of which began after January first, nineteen hundred and seventy-five. ' ' 
St. 1975, c. 676, § 3 (emphasis added). To the extent that a post-January 1, 1975 
condominium conversion involved the substantial alteration of a building constructed 
prior to 1975, section 26A would require that automatic sprinklers be installed. 
An interpretation of section 26 A 1/2 that exempted such a building from putting 
in automatic sprinklers merely because it had been submitted to the provisions of 
chapter 183A, would directly conflict with section 26 A. Indeed, it would make 
no sense for the Legislature to require sprinklers in brand-new condominium 
buildings but not in newly-converted older buildings that have been gutted and 
rehabilitated. Sections 26 A and 26 A 1/2 are most persuasively harmonized by 
reading the condominium exemption to apply only to buildings converted prior 
to January 1, 1975. Cf. Registrar of Motor Vehicles v. Board of Appeal on Motor 
Vehicle Liability Policies and Bonds, 382 Mass. 580, 585 (1981) ("where two or 
more statutes relate to the same subject matter, they should be construed together 
so as to constitute an harmonious whole consistent with the legislative purpose"). 

In sum, it is my opinion that only buildings converted to or constructed as con- 
dominiums prior to 1975 are exempt from the sprinkler requirement of G.L. c. 
148, §26A 1/2. This interpretation is necessary to effectuate the public-safety pur- 
poses of the legislation and to avoid an irrational result that an arguably literal reading 
would entail. Moreover, this interpretation integrates other language in the statute 
and best harmonizes the meanings of sections 26A and 26A 1/2. 

Sincerely, 



JAMES M. SHANNON 
ATTORNEY GENERAL 



• You have asked for my opinion in your capacity as the executive and administrative 
head of the Executive Office of Public Safety, within which is the Division of Fire 
Prevention under the charge ofthe Fire Marshall. See G.L. c.22, §3;G.L. c.6A,§18. 

2 In pertinent part, G.L. c. 148, § 26A 1/2 provides: 

Every building or structure of more than seventy feet in height above 
the mean grade and constructed prior to January first, nineteen hun- 
dred and seventy-five, shall be protected with an adequate system 
of automatic sprinklers in accordance with the provisions ofthe state 
building code; provided, however, that sprinklers shall not be in 



70 P.D. 12 



public or private libraries; provided, further, that sprinklers shall 
not be required to be installed in buildings where construction has 
commenced prior to January first, nineteen hundred and seventy- 
five and which have been submitted to the provisions of chapter one 
hundred and eighty-three A\ and. provided further, that automatic 
sprinklers shall not be required in rooms or areas of a telephone 
central office equipment building when such rooms or areas are pro- 
tected with an automatic fire alarm system, (emphasis added) 

^ Chapter 1 83 A contains the provisions of law governing condominiums. An owner 
of land may "submit" his property to the provisions of chapter 183 A "by duly 
executing and recording a master deed . . .containing a statement to the effect that 
the owner . . . proposes to create a condominium to be governed by the provisions 
of" chapter 183A. G.L. c. 183A, § 2. 

* In 1973. the Legislature required all high-rise buildings (i.e. those more than 
seventy feet in height above the mean grade) constructed after March 1, 1974 to 
be protected with automatic sprinklers. St. 1973. c. 395. codified as amended at 
G.L. c. 148. § 26A. In 1975, the Legislature modified the 1973 sprinkler law and 
made it applicable to high-rise buildings constructed or substantially altered after 
January 1, 1975. St. 197^5, c. 676, codified in part at G.L. c. 148. §26A. Automatic 
sprinklers have also been required in buildings or additions constructed after July 
1 , 1983 that have a floor area of more than 7500 gross square feet and in lodging 
or boarding houses. G.L. c. 148, §§ 26G, 26H. The first automatic sprinkler law 
dates back to 1914. St. 1914. c. 795, § 10, codified as amended at G.L. c. 148, 
§ 26 (basements of certain business establishments required to be equipped with 
atuomatic sprinklers). 

' One might attempt to rationalize exempting condominiums, but not apartments, 
on the ground that condominium owners could choose to put in sprinklers if they 
wanted to go through the expense and inconvenience, but that apartment dwellers 
have no control over the decision whether to put in sprinklers and thus must be 
protected by the statute. This argument is extremely weak, however, even on its 
own terms. In the first place, many condominiums are rented out as apartments. 
Second, if the Legislature had been concerned with preserving individual choice, 
then one would expect it to have exempted others thought capable of implementing 
their choices, such as cooperative owners. See generally G.L. c. 157B (governing 
housing cooperatives). Third, individual condominium owners in a large con- 
dominium association probably do not have more control over the association's 
decision to put in sprinklers, which must be done building-wide for all practical 
purposes, than apartment dwellers have over a landlord's decision to put in 
sprinklers. 

^ Submitting a building to the provisions of chapter 1 83A by executing and record- 
ing a master deed is neither difficult nor necessarily expensive. G.L. c. 183A. § 
8 spells out the particulars that must be included in a master deed, including descrip- 
tions of the building and units, floor plans, statement that bylaws have been enacted, 
etc. Nothing in Chapter 183 A would prohibit an apartment building owner from 
submitting his building to the provisions of chapter 183A, while retaining owner- 
ship and leasing each of the condominium units. 



P.D. 12 71 



"^ I note parenthetically that a broad interpretation of the condominium exemption, 
which would encourage the conversion of buildings to condominiums, would also 
undercut the Legislature's declaration in 1983 of a "rental housing emergency" 
created in part by the effect of conversion of rental housing into condominiums 
or cooperatives. St. 1983, c. 527, § 1. 

* It might be argued, however, that the reference to buildings where construction 
has commenced prior to January 1, 1975 in the condominium exemption, while 
redundant, was meant to emphasize that this section did not alter section 26 A, which 
requires all post- 1975 buildings to have automatic sprinklers. A simple exclusion 
of condominiums in section 26A 1/2 arguably might have been read to exclude 
condominiums constructed after 1975. notwithstanding section 26A. This argu- 
ment is plausible, but not persuasive because it does not explain why the Legislature 
would emphasize that the condominium exemption did not conflict with section 
26A and not similarly emphasize that the exemption for libraries and telephone 
central office equipment buildings in section 26 A 1/2 did not conflict with section 
26 A. 



72 P.D. 12 

June 30, 1988 
Honorable Arthur M. Mason 
Chief Administrative Justice of the Trial Court 
New Court House 
Pemberton Square 
Boston, Massachusetts 02108 

Dear Judge Mason: 

You have requested my opinion as to whether court officers employed by the 
Massachusetts Trial Court who become disabled by bodily injuries resulting from 
acts of violence of prisoners in their custody during or awaiting court sessions are 
eligible to receive benefits under the "assault pay" provision contained in G.L. 
c. 30, §58. For the reasons set forth below, I answer your question in the affirmative. 

Section 58 of Chapter 30 of the Massachusetts General Laws provides compen- 
sation for injuries sustained by employees while in the service of the commonwealth. 
The section refers to the worker's compensation scheme embodied in G.L. c. 152 
and also regulates the use of sick leave credits by injured state employees. The 
last paragraph of §58, the so-called "assault pay" provision, reads as follows: 

Notwithstanding the provisions of this section, an employee who, 
while in the performance of duty, receives bodily injuries resulting 
from acts of violence of patients or prisoners in his custody, and 
who as a result of such injury would be entitled to benefits under 
said chapter one hundred and fifty-two, shall be paid the difference 
between the weekly cash benefits to which he would be entitled under 
said chapter one hundred and fifty -two and his regular salary, without 
such absence being charged against available sick leave credits, even 
if such absence may be for less than eight calendar days' duration. 

The question you have raised is whether court officers of the Massachusetts Trial 
Court are eligible to receive benefits pursuant to this section. 

Elementary principles of statutory construction require that "[a] statute. . .be 
interpreted according to the plain and ordinary meaning of its words and their 
ordinary and approved usage." Commonwealth v. Colon-Cruz, 393 Mass. 150, 
167 (1984). The plain language of §58 compels the conclusion that coverage under 
the assault pay provision extends to any employee of the commonwealth who is 
both: (1) injured in the manner specified in the statute; and (2) eligible to receive 
worker's compensation under G.L. c. 152 as a result of such injury. 

In regard to the first issue raised, it is apparent that court officers of the Trial 
Court are entitled to benefits under the assault pay provision if they are injured 
in the manner specified in §58, that is, if while in the performance of duty they 
receive bodily injuries resulting from acts of violence of patients or prisoners in 
their custody. 

This interpretation of §58 is consistent with the general rule that statutory language 
is to be "construed so as to effectuate the intent of the drafters of the statute." 
McCarthy V. Commissioner of Revenue, 391 Mass. 630, 633 (1984). "The pur- 
pose of [the assault pay] provision is to extend benefits up to the amount of an injured 
state employee's full weekly wage when such employee is injured by the violence 
of a patient or prisoner in his custody." 1966/67 Op. Att'y Gen. No. 68, Rep. 
A.G., Pub. Doc. No. 12 at 133 (1967). The legislature thereby intended to com- 
pensate state employees "who are victimized in some violent manner by their 
exposure to a greater than normal risk of violence." Id. Similarly, another prior 
Opinion of the Attorney General observes that in enacting the assault pay provi- 
sion, "the General Court intended to compensate for the added hazards to which 
such employees of a correctional or mental institution are exposed when their duties 



P.D. 12 73 



entail the care or custody of mental patiens or prisoners. " 1966/67 Op. Att'y Gen. 
No. 69, Rep. A.G., Pub. Doc. No. 12 at 134 (1967).' It is not disputed that the 
duties of court officers may include retaining custody of patients or prisoners. See, 
e.g. , McCarthy v. Sheriff of Suffolk County, 366 Mass. 779, 787 (1975) ("as deputy 
sheriffs, many court officers are responsible for the custody of prisoners in the 
criminal sessions ").2 Accordingly, court officers are among the state employees 
exposed to a greater than normal risk of violence by virtue of their responsibility 
to retain custody over prisoners from time to time. Court officers therefore fall 
squarely within the class of intended beneficiaries of the assault pay statute. 

The second question raised requires that I evaluate whether court officers are 
eligible to receive worker's compensation as a general matter. The eligibility of 
court officers employed by the Trial Court to receive worker's compensation under 
G.L. c. 152 is governed by the provisions of that chapter generally applicable to 
state employees . SeeG.L. c. 152, §§69-75. Although there is no reported decision 
conclusively ruling that court officers are covered by the worker's compensation 
statute, "[i]n furtherance of the purpose of the act, it is to be construed broadly 
to cover as many employees as possible." ColUns's Case, 342 Mass. 389, 392 
(1961). I am not aware of any instance in which an otherwise valid worker's com- 
pensation claim filed by a court officer has been denied because of his or her employ- 
ment status. I also note that the legal standard which distinguishes between state 
"employees" eligible to receive worker's compensation and state "officials" not 
eligible to receive worker's compensation involves an inquiry into whether a par- 
ticular public servant or class of public servants exercises some portion of the 
sovereign authority of the Commonwealth. See 1945 Op. Att'y Gen., Rep. A.G., 
Pub. Doc. No. 12 at 51 (1945); Attorney General v. Tillinghast, 203 Mass. 539 
( 1909) . Court officers would not seem to be entrusted with such sovereign authority. ^ 
Under the circumstances, I find it reasonable to conclude that court officers are 
eligible to receive worker's compensation under G.L. c. 152. Thus, if a court officer 
would be eligible to receive worker's compensation as a result of injuries received 
as defined in §58, that individual would be eligible to receive assault pay benefits. 

For the reasons set forth above, I conclude that court officers employed by the 
Massachusetts Trial Court are covered by the assault pay provision of G.L. c. 30, 
§58. 

Very truly yours. 



JAMES M. SHANNON 
ATTORNEY GENERAL 



' Because the opinion only mentions employees of correctional and mental 
institutions, the opinion could arguably be interpreted as excluding all other state 
employees from coverage under the assault pay statute. This excerpt, however, 
must be read in light of the particular question presented, i.e., whether a partially 
disabled employee of the Department of Mental Health could simultaneously receive 
benefits under both the assault pay statute and the partial disability provision con- 
tained in G.L. c. 152, §35. The quoted passage is not an all-inclusive list of the 
state employees who are eligible to receive benefits under the assault pay provision. 
It should also be noted that an interpretation of the cited opinion as limiting 
eligibility for compensation under the assault pay provision soley to employees 
of correctional and mental health institutions would conflict not only with the plain 
language of the statute, but also with language from a related Opinion of the Attorney 
General which was issued the very same day. See 1966/67 Op. Att'y Gen. No. 



74 P.D. 12 



68 , Rep . A . G . , Pub . Doc . No . 1 2 at 1 33 ( 1 967) . That opinion interpreted the custody 
requirement in §58 to mean that the legislature was ^"mainly contemplating institu- 
tionalized patients or prisoners." Id. (emphasis added), this characterization of 
the intended scope of coverage afforded by §58 implicitly envisions application 
of the statute, however rarely, in non-institutional settings. 

2 Moreover, since sheriffs and their deputies are part of the state's correctional 
system. seeG.L.c.37,^ll, there is no meaningful distinction between court officers 
and other correctional officers for the purposes of §58. 

^ But see Wagner v. Hartford Accident & Indemnity Co. , 81 So. 2d 580 (La. Ct. 
App. 1955) (probation officers for juvenile courts are officials rather than employees 
for purposes of the Louisiana Workmen's Compensation Act). Compare County 
of Cook v. Industrial Commission, 304 N.E. 2d 616 (111. 1973) (juvenile probation 
officers are employees rather than officials for purposes of the Illinois Workmen's 
Compensation Act). 



P.D. 12 



75 



INDEX OF OPINIONS 

TOPICS 

Condominiums 

G.L. c. 148 §26A 1/2 does not exempt certain con- 
dominiums from sprinklering requirements 

Court Officers 

Eligible to receive assault pay under G.L. c. 30, §58 

Employees, Public 

Interpretation of G.L. c. 32, §101- benefits to spouses of 
disabled public employees 

Equal Rights Amendment 

Surviving spouses of both sexes must be treated equally 
under G.L. c. 32, §101 

Retirement 

annual benefit payable under G.L. c. 32, §101 

Statutes - Construction 

( 1 ) Statutes should be construed to avoid 
unconstitutionality 

(2) Statutes to be interpreted according to their plain 
meaning 

(3) Statutes should be interpreted so as to harmonize 
purposes and avoid conflict 

(4) Interpretation of public safety legislation must ensure 
that public safety purposes are effectuated 

Widows/Widowers 

Equal Rights Amendment dictates equal treatment under 
G.L. c. 32, §101 

Workers Compensation 

Court officers as eligible for workers compensation 



OPINION PAGE 



INDEX OF REQUESTING AGENCIES 
AGENCY 



OPINION PAGE 



Public Safety, Executive Office of 

Retirement, Board of 

Trial Court, Chief Administrative Justice 



Public Document 



No. 12 



Slie (Uommonuicaltti of fHajasaciiuBetta 

Supplement to the 
REPORT 

OF THE 

ATTORNEY GENERAL 

FOR THE 

Year Ending June 30,1988 




Publication of this Document approved by Ric Murphy, State Purchasing agent 

1500 11-89 - 81182 ESTIMATED COST PER COPY $48 



P.D. 12 3 

CIVIL BUREAU 
INDUSTRIAL ACCIDENT DIVISION 

The Industrial Accident Division serves as legal counsel to the Commonwealth 
in all workers' compensation cases involving state employees. Pursuant to M.G.L. 
c. 152 §69A, the Attorney General must approve all payments of benefits and 
disbursements for related medical and hospital expenses in compensation cases. 
In contested cases the Division represents the Commonwealth before the Depart- 
ment of Industrial Accidents and, in appellate matters, before the Appeals Court 
and the Supreme Judicial Court. 

Recent amendments to M.G.L. chapter 152 have considerably overhauled the 
process of filing and litigating claims. Specifically, the reforms have created an 
expedited scheduling requirement, designed to process claims from filing to hear- 
ing in 90 days. Also, a new mandatory appearance has been added to the process 
requiring a conciliation stage for all claims. The purpose of the conciliation is to 
promote settlement of claims before they go to dispute resolution. The recent amend- 
ments also require the insurer to approve or deny all claims within 14 days. 

The amendments have created four new Board locations within the Department 
of Industrial Accidents in Lawrence, Fall River, Worcester and Springfield, in 
addition to the main office in Boston. Accordingly, the staff of the Division now 
has to appear at these locations. 

In response to these amendments, the Division has appeared before the Worker's 
Compensation Advisory Council in an attempt to elucidate specific sections of the 
act that pertain to the commonwealth. The Division has also participated in the 
Industrial Accident Rules Committee, re-drafting rules which set the procedural 
practices under the act. 

The Division's efficiency in implementing the changes brought by Chapter 152 
is reflected in the increased number of processed payments and resolved claims. 
There were 17,950 First Reports of Injury filed during fiscal year 1988 for state 
employees with the Division of Industrial Accidents— an increase of 1,820 over 
fiscal year 1987. Of the lost time disability cases, the Division reviewed and 
approved 3,205 new claims for compensation and numerous claims for resump- 
tion of compensation. In addition, the Division disposed of 52 claims by way of 
lump sum agreements, and 17 by payment without prejudice. 

The Division appeared for the Commonwealth on 2 ,298 formal assignments before 
the Department of Industrial Accidents , an increase of 86 1 over the previous fiscal 
year. The Division also appeared before the Superior Court concerning enforce- 
ment of orders pursuant to M.G.L. c. 152 §12(1), and before the Appeals Court 
on appeals from decisions of Industrial Accident Review Board pursuant to M.G.L. 
c. 152 §12(2). In addition to evaluating new cases, the Division continually reviews 
the accepted cases to bring the medical reports up to date and to determine present 
eligibility for compensation. 

Total disbursements by the Commonwealth for state employee's Industrial Ac- 
cidents claims, including accepted cases. Board and Court decisions and lump sum 
settlements, between July 1, 1987 to June 30, 1988 follow: 



4 P.D. 12 

General Appropriation to Division of 
Industrial Accidents 

Incapacity Compensation $24,569,638.54 

Medical Payments 5,967,873.00 

Total Disbursement $30,537,511.54 

The Division is also responsible for pursuing the Commonwealth 's subrogation 
claims. Pursuant to M.G.L. c. 152 §15, the Division is entitled to seek recovery 
from third party tort-feasors. The recovery under §15 includes compensation and 
medical bills paid to a claimant, as a result of a third party's negligence. In FY 
1988, the Division recovered $123,858.02 in liens against third party tort-feasors. 

Under chapter 152 §65, the Division has the responsibility of defending the 
Workers Compensation Trust Fund against claims for reimbursement made under 
chapter 152 §§37 and 37A. Workers Compensation Trust Fund and related sec- 
tions encourage employment of handicapped and disabled workers. The Fund 
relieves the insurer from the burden of paying compensation for an employee's 
disability due to the combined effect of a previous injury and a subsequent one. 

Pursuant to G.L. c. 33, §§13-1 lA, the Chief of Industrial Accident Division 
represents the Attorney General on the Civil Defense Claims Board. The Claims 
Board reviews and processes claims for compensation of unpaid civil volunteers 
who were injured 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 represents the case to the Industrial Accident Rehabilitation Board. 

During the fiscal 1988, Division attorneys were asked to assist workers in private 
industry who were having problems with compensation claims against private in- 
dustry and their insurers. Every effort was made to assist these employees or refer 
them to appropriate persons or agencies. 

The Division also represented the Department of Industrial Accidents in a 
nationwide lawsuit. The case involved a request for a permanent injunction against 
all state compensation commissioners throughout the nation from adjudicating cases 
involving worker compensation claims agmnslAllis-Chalmers. The case was settled 
after the National Steering Committee of State Attorneys General filed a brief 
challenging the constitutionality of the request. Attorneys from this office 
represented Massachusetts on that Steering Committee. 

CONTRACTS 

The responsibilities of the Contracts Division generally fall into three areas: litiga- 
tion involving matters in a contractual setting; advise and counsel to state agencies 
concerning contractual matters; and contract review. 

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

Most cases handled by the Division concern public building, state highway, and 
public work construction disputes. Other typical cases involve claims arising from 
the interpretation of leases, employment contracts, statutes, rules, regulations, and 
surety bonds. 



>.D. 12 5 

In contract actions against the Commonwealth. G.L. c. 258. s.l2. is the con- 
rolling statute and the Attorney General represents the Commonwealth in Superior 
rourt in all such disputes. 

At the commencement of contract actions, including bid protests, litigants often 
eek temporary restraining orders and preliminary injunctions against the Com- 
nonwealth. its agencies, and officers. The granting of such relief would delay the 
xecution of contracts, increase contract cost to the public, and result in additional 
laims for damages. During the fiscal year, Division attorneys successfully resisted 
11 such attempts for injunctive relief 

Government contract disputes are complex litigation involving multiple parties 
deluding architects, consulting engineers, subcontractors, suppliers, and surety 
ompanies. The discovery stage often involves the retrieval of massive numbers 
f documents which must be reviewed and analyzed. Trials of public contract ac- 
ions also involve lengthy hearings before the Court or before Court appointed 
:iasters. As a result, the Contracts Division has begun to consider alternatives in 
esolving disputes which could provide simplified and expedited substitutes for 
ormal litigation. Such alternatives could better protect state agencies, save tax- 
payer dollars and provide prompt and fair resolution of disputes for those doing 
usiness with the Commonwealth. 

The Attorney General has placed renewed emphasis on instituting affirmative 
itigation to recover money owed to the Commonwealth due to contract breaches, 
'he Division counsels the Department of Labor and Industries in enforcing orders 
nd litigating architect selection and bid protest matters. The Attorney General 
5 also the sole agency authorized by law to represent the state Inspector General 
1 civil action to redress waste, fraud and abuse in government. 

Along with the Executive Office of Transportation and Construction. Depart- 
lent of Public Works and other agencies, the Contracts Division has begun ad- 
ance planning for resolution of disputes arising out of the S4-billion Central Artery 
nd Third Harbor Tunnel Project. 

Fifty-four new actions were commenced during FY 1988 and 203 files were 
losed. As of June 30. 1988. there were 161 pending cases in the Division repre- 
enting a total dollar exposure to Massachusetts of $52,475,261. The Division is 
Iso handling affirmative claims on behalf of the Commonwealth in excess of $200 
lillion. 

On a daily basis, the Division receives requests for legal assistance from state 
gencies and officials. Problems involve formation of contracts, performance of 
ontracts bidding procedures, bid protests, contract interpretation, and many other 
liscellaneous matters. The most frequent request deals with indemnification clauses 
n contracts, procedural matters in employment contracts and advice in advance 
f anticipated construction contract litigation. 

The Contracts Division also receives requests for assistance in purchasing. Divi- 
ion members counsel the Purchasing Agent and his staff, interpret regulations, 
nd attend informal protest hearings. 

The Division has a similar relationship with the Depanment of Public Works, 
/letropolitan District Commission. Executive Office of Transportadon and Con- 
truction. Board of Regents of Higher Education, the Departments of Mental Health, 
Cental Retardation. Youth Services. Environmental Management. Water 
Resources, and Public Welfare. State Lotter)- Commission, and Division of Capital 
Planning and Operations. 



6 P.D. 12 

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

During the fiscal year, the Division received 1.194 contracts for approval as 
to form. One-hundred-and-ninety contracts were rejected and later approved once 
the deficiencies were corrected. 

EMINENT DOMAIN 

The Eminent Domain Division represents 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 park purposes, 
land for flood control and land for easements. The Division deals primarily with 
the Department of Public Works, the Metropolitan District Commission, the Depart- 
ment of Environmental Affairs, state colleges, the University of Massachusetts, 
the Armory Commission, the Department of Food and Agriculture, the Depart- 
ment of Fisheries & Wildlife and Environmental Law Enforcement and the Depart- 
ment of Capital Planning and Operations. 

The Division also provides legal assistance to the Real Estate Review Board in 
settling damage claims on takings of government-owned land for highway pur- 
poses. Additionally, the Division is sometimes asked to testify before the Gover- 
nor's Council prior to its approving payment of land damage cases settled by the 
Department of the Attorney General. 

Informal advisory services on eminent domain questions are rendered to prac- 
tically every state agency, and cities and towns. 

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 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 10% 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 become tenants of the Commonwealth and are obligated to pay rent. 
Rent collection is handled by a Special Assistant Attorney General who is assigned 
fulltime to the Department of Public Works (DPW). While reporting directly to 
the agency, the Special Assistant Attorney General's performance is reviewed by 
the Eminent Domain Division. 

His primary responsibility is representing DPW in all matters related to state- 
owned property being leased or rented to the general public. This includes 
negotiating settlements, closing out uncoUectibles, filing suits to enforce rent pay- 
ment, as well as eviction. In those cases where rent is owed to the Commonwealth 
and there is a land damage case pending, the Eminent Domain Division trial at- 
torney handles both matters at the time of trial. 

During the past fiscal year, 40 rent cases were closed out and $ 166.460 was col- 
lected and turned over to the State Treasurer. During FY 1988. about 60 land damage 
cases were disposed of, the majority by trial before juries in Superior Courts 



>.D. 12 7 

[iroughout the Commonwealth. The disposition of these cases resulted in a sav- 
ngs to the Commonwealth of approximately $10 million. In addition, more than 
!90 cases were disposed of in the Land Court. 

The Eminent Domain Division also has the responsibility of protecting the Com- 
nonwealth 's interests in all petitions for registration of land filed in the Land Court. 
n each case, a determination is made whether or not the Commonwealth, or any 
>f its agencies, has an interest which may be affected by the petition. If such a 
letermination is made, the Division is given a full hearing before a decree is issued. 
!ome issues are tried to a conclusion while others are amicably agreed upon with 
he rights of the Commonwealth protected by stipulation. 

Land Court matters involve the full-time activities of an Assistant Attorney 
jeneral. The court's jurisdiction covers every type of land transaction from 
oreclosure and tax takings to determination of title absolute as well as all the equi- 
y rights arising from their determination. 

The Eminent Domain Division is involved in almost every petition to confirm 
*r register title. The involvement requires the determination of all interests in state 
lighways, the preservation of the taking lines, the determination of drainage and 
ither easements, and the assurance that the decree is entered with the proper 
tipulations. 

Land Court also determines so-called "water rights". This is an increasing 
)roblem because many rivers and streams have been cleaned and improved through 
ederally-funded projects, bringing into question the Commonwealth's rights and 
esponsibilities. Additionally, the tidal areas of the Commonwealth are creating 
;ontinual litigation, particularly where the Colonial Ordinances are concerned, 
litigation is developing whereby the public is asserting possession and prescrip- 
ive rights in the tideland flats and beach access. 

The land registration process continues to involve diverse issues. Many railroad 
ights of way appear in registration cases. Many pose serious questions regarding 
ibandonment and the effect upon the total railroad right of way. The Com- 
nonwealth, by way of the Secretary of Transportation, has acquired railroad rights 
)f way for both passenger service and recreational uses. The reversionary rights 
md the effects upon Commonwealth title are important issues. 

The Commonwealth has become involved in problems caused by filling and dredg- 
ng along the shoreline and other areas developed by beach associations, especial- 
y on the Cape and Islands. When dredging involves placing material on the shore, 
private access rights to and from the beaches are altered. 

All rental agreements, pro tanto releases, general releases, deeds of grants and 
:onveyance, and documents relating to land under the control of any of the state's 
lepartments or agencies must be reviewed and approved as to form by the Emi- 
lent Domain Division. 

The Division continues to assist the Department of Food and Agriculture in ex- 
pediting and implementing the mandates of Chapter 780 of the Acts of 1977, known 
is the Agricultural Preservation Restriction Act. This act helps to preserve the 
imited farm land remaining in Massachusetts by providing a method where farmers 
-eceive compensation for the so-called "developmental rights" without destroy- 
ing the prductive capacity and value of the farm land. Once development rights 
ire sold, a deed is then filed in the appropriate county registry which restricts the 
land use in perpetuity to farming and agricultural uses. Since the program began 
in 1977, more than 20,000 acres of farmland have been permanently protected 
in Massachusetts. 



8 P.D. 12 

TORTS 

The Torts Division handles /^nman/y tort and civil rights suits brought against 
the Commonweahh and its employees, the investigation and preparation of reports 
for the district courts on Petitions for Compensation to Victims of Violent Crimes, 
Contributory Retirement Appeals Board (CRAB) cases, and collection cases. 

Collections cases are handled by both Torts Division attorneys and by attorneys 
assigned to the Civil Bureau. CRAB cases are distributed among all Civil Bureau 
attorneys. 

At the end of the fiscal year, the division had 1 ,045 open cases and was super- 
vising 58 claims against the Commonwealth where the Attorney General acts as 
executive officer. There were 349 new cases, with 274 cases closed. 

During FY 1988, 87 cases were settled without trial. Dismissals or summary 
judgments on behalf of the Commonwealth were obtained in 163 cases and 25 cases 
were tried.