Why the World Hates Lawyers

Why does the world hate lawyers?  Because of stuff like this.  You can't make this up:  the on-line menu prices for a Chinese restaurant weren't up-to-date, and a customer was overcharged $4. I get being pissed about that.  But what would most people do?  Just lump it, stop patronizing the restaurant, ask the restaurant for a refund, or complain to the credit card issuer. But in this case, the customer has a JD (and to make it more delicious, happens be a Harvard Business School professor). The professor decides to go all legal on the restaurant, demanding $12, as treble damages under Massachusetts' unfair and deceptive acts and practices (UDAP) statute, MGL 93a (even citing the statute!).  

I get why people would be hating on the professor for that alone. But here's what really peeves me. He gets MGL 93a wrong!!!  (I happen to teach this statute.) The professor is demanding something that he almost assuredly cannot get under law.

As an initial matter, it's important to know that there is no scienter (intent) requirement for MGL 93a.  A negligent misrepresentation is as much of a violation as an intentional one.  The interesting issue is the remedy.  Let's look at the relevant part of the statute:

At least thirty days prior to the filing of any such action, a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered, shall be mailed or delivered to any prospective respondent. Any person receiving such a demand for relief who, within thirty days of the mailing or delivery of the demand for relief, makes a written tender of settlement which is rejected by the claimant may, in any subsequent action, file the written tender and an affidavit concerning its rejection and thereby limit any recovery to the relief tendered if the court finds that the relief tendered was reasonable in relation to the injury actually suffered by the petitioner. In all other cases, if the court finds for the petitioner, recovery shall be in the amount of actual damages or twenty-five dollars, whichever is greater; or up to three but not less than two times such amount if the court finds that the use or employment of the act or practice was a willful or knowing violation of said section two or that the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said section two.

First, MGL 93a(9)(3) does not mandate treble damages.  It provides for a recovery of the greater of actual damages or $25.  The statute allows double to treble damages if the UDAP was a willful or knowing violation" or if the defendant refused, in bad faith to settle. That's quite different from automatic treble damages.  

But wait, you say, that just means the HBS professor should have been demanding $25, not $12. Not quite.  There's a second problem.  MGL 93a(9)(3) requires that before bringing suit the plaintiff send a demand letter to the business asking for rectification of the unfair or deceptive act or practice. That gives the business a chance to settle things for something like actual damages. The whole purpose of the demand provision is to encourage settlement and to act as a control on damages.  (Refusal to parlay is one of the hooks that can result in treble damages.)  

If the defendant's offer of settlement is rejected by the plaintiff, the defendant can introduce its offer (and its reasonableness) at trial.  Here, the restaurant offered the professor a full refund of the overcharge in response to his email (which is fairly understood as a demand letter). Thus, in a lawsuit, if the defendant made a reasonable settlement offer, the court must limit damages not to the $25 minimum, but to the restraurant's reasonable offer. See Kohl v. Silver Lake Motors, Inc., 369 Mass. 795 (Mass. 1976). I don't see how the professor gets to treble damages here. 

Indeed, just reading the statute carefully ought to have given the professor some pause. While he makes a big deal in one of the emails about being ethically bound to deal only with an attorney if the restaurant is represented by counsel, it strikes me as a possible ethical problem to be making demands (particularly on an unrepresented party) for which one lacks a legal basis. I don't think negligent belief about the law helps the professor here.

Let me state for the record that my Chinese restaurant of choice is perpetually engaged in a FACTA card truncation violation. They've been failing to truncate card numbers for years on every take-out order. I'd like them to stop, but I want to be sure I have somewhere to go on Christmas, so I haven't said a word. 

Comments

[Erik W]

The fact the Americans think that "the World" equals "the US" is why the world hates Americans.

[Dean C]

Wow Erik. I sure am glad you posted that insightful comment that was relevant to the discussed story. I am fairly certain that the author's over-exaggeration of the lawyer-hate was merely intended to emphasize the degree of the disgust most of us have with the profession of lawyers, rather than a literal assumption about what the "world" thinks.
I suspect you're a lawyer.

[Newell White]

No Dean, you are more likely the lawyer, since you immediately resort to an 'ad hominem' argument against Erik's point.
I am not a lawyer, and have friends in the USA, but find the provincialism of most Americans at best disappointing, at worst frightening.
Does the author accept Erik's point?

[Sid]

As someone who is not American, lives outside of the US and has had more than his fair share of dealings with lawyers, I would like to put it on record that "the world" does indeed hate lawyers.

On a less lighter note, it really is things like this - where lawyers see the world they live in so myopically through the lense of their profession without any regard to how that may impact real people - why the rest of society hate them. It isn't unique to the US.

Also, law has become less about justice or fairness and much more about using it as a tool to maximise (particularly monetary) gain for themselves and clients. Laws / regulations are now too complex for the common man to follow so they've become a game for the law profession.

[Silver]

Armenia here. We hate lawyers too.

[Forrest]

It's overgeneralizing to say that the world hates lawyers. They are paid advocates and most are smart and decent folks. Most folks are, in fact. What you may legitimately hate is behavior like this, and it is not limited to lawyers, sadly.

I have too many public service lawyers as friends who work for indigents, criminals, immigrants, children, and the elderly to stand by while they are lumped in with a patent jackass.

The first time YOU get into legal trouble, you'll LOVE your lawyer. Everyone does when they are on your side.

The man's training added to a negative personality, but it was there long before law school, friend. I've got engineer and physician and accounting contacts who are every bit as disgusting.

[Doug]

Sid's comment is exactly the essential issue. I doubt this Harvard Business School lawyer/professor knew this exact statute by heart, so he looked it up - and decided to spin it to his benefit, counting on the assumed ignorance or timidity of the restaurant owner.

His repeated efforts to escalate the situation are a sign of this - he wasn't seeking to settle the dispute, he was out to win and extract the largest amount of money he could. Threats, bluster, and disingenuity are the foremost tools of the law profession - the actual law is secondary.

[Bar]

He was not a lawyer. He went to law school but never passed the bar, as stated in the original Boston.com story.

[Andrew]

"The first thing we do, let's kill all the lawyers." - Not an American

[Melvin Donaldson]

The HBS/HLS moron (HBS-HLS-M) not only misstates Ch. 93A to try to steal money, he misstates the professional ethics rules to try to steal money. When the restaurant owner writes that he's checked informally with a lawyer friend to confirm HBS-HLS-M is nuts, HBS-HLS-M writes back to demand to know if the owner is represented by counsel, says he, HBS-HLS-M, as counsel to himself, is legally bound only to communicate with the restaurant guy's lawyer friend, and demands to know the restaurant guy's lawyer friend's contact information.

This garbles the rule, which only relates to actual knowledge of representation. Massachusetts lawyer bully morons aren't ethically bound to demand to know the names of every lawyer acquaintance their victims turn to for help. The clear implication of this additional legal misstatement is, again, to bully to try to scam money: Oh you talked to a lawyer, rules say you have to tell me his name so I can bully him too, pay me pay me pay me.

An embarrassment to the profession.

[Jen]

Thanks for the explanation Professor Levitin! I think I understand one aspect of one law now. ;)

[Bar_wrong]

Bar, you're the one who's wrong. First, the Boston.com story says no such thing. Second, even if it did, it would be wrong.

https://massbbo.org/bbolookup.php

Try it yourself - he's an active member of the Massachusetts Bar. So he is not simply a JD, he's actually an attorney.

[john johnson]

the professor did nothing wrong. if i had the ability to just sue that piece of cr3p restaurant overcharging, i would. To say he was out of line is ridiculous. he was NOT the only person overcharged, every single person who went to this restaurant and bought something has been overcharged. thats why suing is necessary, its called FALSE ADVERTISING and its a law for a reason!

[Bart]

Remember who said "let's kill all the lawyers" http://m.youtube.com/watch?v=1i0MNOwNNsM

[ssl]

People are jumping to conclusions. Thousands might have been bilked by the outdated website. Then again, it might only have been one person. Chances are, it's something in that wide middle.

I would also be curious as to whether Edelman had ordered takeout-delivery from that Chinese food place before and, if so, whether it was recently. Reason being, every Chinese delivery place I've ordered from includes a physical copy of the latest menu along with the food order. If this practice is the case with this establishment as well and Edelman had ordered recently, then he would have already been given updated menus with the latest pricing. In that case, with the website's disclaimers and Edelman having received new physical menus, does Edelman still have a case?

We'd need to find out more on both sides.

[Tom Maguire]

I read the law for the first time today hoping to say "Ah hah! He was wrong!"

I didn't, because I got hung up on this (my emphasis):

"...or up to three but not less than two times such amount **if** the court finds that the use or employment of the act or practice was **a willful or knowing violation of said section two** or that the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said section two."

The prof emphasized in the emails that the shopkeeper had confessed to an ongoing intent to defraud by admitting that the prices had been outdated for months.

This was not a simple "Darn, the newspaper misprinted our ad but we'll honor that price". The argument is there was ongoing intent to defraud all customers. If the court agreed, double or triple damages would be appropriate.

Of course, I don't teach the law. But why am I wrong?

MY guess, FWIW, is that once the court finds the business offers to pay actual damages they stop looking at the other questions of the case. But that seems odd to me, if an ongoing pattern is being alleged.

BONUS QUESTION: I was hoping for a materiality clause but was derailed. The "amount of actual damages or twenty-five dollars, whichever is greater" told me that small claims, such as $4, would still be considered. Is that correct?

[Doctor Biobrain]

Anyone saying this was intentional fraud is really overthinking it. The website was out of date. That's it. And the price difference is just $1 an entree. Are you suggesting that this guy intentionally lied about his prices because he feared these customers would use a different restaurant if they knew the Moo Goo Gai Pan was $12 instead of $11? That's doubtful.

Now, it'd be one thing if he updated his website regularly yet left the prices the same. But the more likely answer is that he just didn't think about it. Because again, these people weren't overcharged. The website was outdated.

[Doctor Biobrain]

Oh, and for the record: if you take the time to dissect whether the entire world hates lawyers or if it's just Americans...you're doing it wrong.

Seriously, I suspect that statement was made for entertainment purposes only, and wasn't intended to be taken literally.

[Tom Maguire]

Re: "Are you suggesting that this guy intentionally lied about his prices because he feared these customers would use a different restaurant if they knew the Moo Goo Gai Pan was $12 instead of $11? That's doubtful."

Now you are bringing common sense to a discussion about the actual law? THAT's doubtful.

Obviously we both think the price difference is immaterial, but I don't see such an exception in the statute. I'd love to be wrong about that.

[Bill Bailey]

This wasn't even the first time he did this. He threatened another restaurant to have their licenses revoked - essentially destroying the business - if he didn't get a special coupon deal.

http://www.boston.com/food-dining/restaurants/2014/12/10/there-more-edelman-did-this-before-and-worse/00mTW39jcyXb3VNHZoXEYN/story.html

To their credit... the restaurant's owner essentially told him to frack off.

[Tom Maguire]

From the post:

"...The statute allows double to treble damages if the UDAP was a willful or knowing violation"

And a bit later:

" I don't see how the professor gets to treble damages here. "

In the linked emails, the professor repeatedly notes that it was, by the owner's own admission, a willful, ongoing fraud because the prices were out of date for some time.

See for example the Dec 6 9:33 AM email, the Dec 6 3:55 PM email, or the third paragraph of the Dec 7 2:23 PM letter.

Arguing ongoing, intentional fraud may or may not automatically get him to triple damages, but I am at a loss as to why the argument has no chance at all.

And now radio silence? Tough day for Harvard Law.

[silly shopper]

I, for one, applaud someone for taking the time to address a type of negligence that effects everyone. That he used the lawyer angle, to me, is kind of a "scared straight" tactic. I would love to sue my grocery store because I Am so sick of buying something with a sign stating a different price than the register rings up--and I am unloading my cart or bagging my groceries so I don't catch the error until later. and it costs a lot of people more than they had exoected...fraud, whether intentional or due to negligence I don't care, hire more people or better people.

[Griffith Chung]

It appears to me that the restaurant owner didn't even realize the website was out of date until the prof brought it to his attention. If my reading's correct, how can you suggest that the misstatement was willful or knowing when the store didn't actually know? It may have been negligent web maintenance on the restaurant's part, but the statute is clearly reserving treble damages for more heinous conduct. It's a stick to use against truly bad and deceitful actors, not simple sloppiness.

Moreover, you've also glossed over a crucial part of the statute, which effectively limits damages to the amount stated in a reasonable settlement offer. The restaurant offered to refund the difference to the customer, which (though I don't have case law to support this) strikes me as totally reasonable reparation. Thus, by operation of the statute, treble damages are eliminated from consideration and capped at actual damages as defined by the amount of a reasonable settlement offer.

Professor Levitin, I sat in on a couple of sessions of your Consumer Law class this past fall semester. I had to drop it for scheduling reasons, but with great reluctance, as I could tell it would be a useful and well-taught course. Thanks for maintaining this blog, I'll keep it bookmarked.