Massachusetts Federal Court Holds Alleged Retaliation For Regulatory Reporting May Support Chapter 93A Liability

In Whitewater, Inc. v. Jones Lang LaSalle Americas, Inc., the District Court of Massachusetts denied defendant Jones Lang LaSalle Americas, Inc. (JLL)’s partial motion to dismiss a Chapter 93A, Section 11 claim asserted by plaintiff WhiteWater, Inc. (WhiteWater), a licensed wastewater treatment operator. The case arose from JLL’s termination of WhiteWater’s subcontractor agreement allegedly in retaliation for WhiteWater’s legally obligated reports to the Massachusetts Department of Environmental Protection and the Town of North Reading regarding a sanitary sewage overflow event. The ruling may offer guidance on how Chapter 93A claims can survive a motion to dismiss and under what factual circumstances courts may support an inference of retributive business conduct.

WhiteWater alleged that JLL breached the implied covenant of good faith and fair dealing by purportedly terminating the service contract “for cause” on a pretextual basis. The court’s analysis of the allegation turned critically on the theory of retributive animus. Relying on Kattar v. Demoulas, and the more recent decision in Janz Corp. v. Philips North America LLC, the court recognized that conduct motivated by retribution is actionable under Chapter 93A, Section 11, and that whether a contract was terminated in good faith or in retaliation is a question for the fact-finder rather than a matter to be resolved on a motion to dismiss. The court found that the complaint’s factual timeline, taken as a whole and with all reasonable inferences drawn in WhiteWater’s favor, was sufficient to support an inference of retributive animus. Specifically, the complaint alleged that WhiteWater warned JLL of an impending sewage overflow emergency and JLL failed to respond. Allegedly, the overflow occurred and was reported to regulators as legally required, then JLL directed WhiteWater to cease communicating with regulatory authorities. WhiteWater, according to the claim, nonetheless continued its legally obligated communications, and JLL allegedly terminated the contract the very next day, citing the regulatory communications as the basis for termination. The court found the combination of the temporal proximity between the regulatory report and the termination, together with the explicit identification of WhiteWater’s regulatory communication as the grounds for the “for cause” termination, sufficient to plausibly allege retributive conduct actionable under Chapter 93A.

This ruling illustrates the potential risk that arises when a contract termination closely follows a party’s exercise of a legally protected right or obligation. The ruling also underscores the limitations of framing a partial motion to dismiss around the argument that a Chapter 93A claim merely duplicates a breach of contract theory. While that argument is well established, it is more difficult to advance where the plaintiff can point to conduct that implicates a legally protected activity. Courts appear willing to treat retaliatory termination for compliance with legal obligations as qualitatively different from an ordinary contractual dispute, placing it within the “penumbra” of established unfairness concepts that Chapter 93A is designed to reach.

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