STATEMENT OF THE ISSUES PRESENTED FOR REVIEW

I. WHETHER THE TRIAL COURT ERRED IN RULING THAT CHAPTER90, §32E1/2 – A CONSUMER PROTECTION STATUTE WHICH SETSCERTAIN REQUIREMENTS FOR COLLISION DAMAGE WAIVERPROVISIONS, BUT CONTAINS NO PRIVATE REMEDIES AND NOPREEMPTION LANGUAGE – COMPLETELY PRECLUDES A CLAIMUNDER CHAPTER 93A FOR UNFAIR OR DECEPTIVE CONDUCTRELATED TO THE SALE OF COLLISION DAMAGE WAIVERS

II. WHETHER THE TRIAL COURT ERRED IN HOLDING THAT THEENACTMENT OF SECTION 32E1/2 DEPRIVED CONSUMERS OFPREVIOUSLY RECOGNIZED CHAPTER 93A CLAIMS, WHICH EXISTINDEPENDENTLY OF THE PROSCRIPTIONS OF SECTION 32E1/2

STATEMENT OF THE CASE AND PRIOR PROCEEDINGS

This case involves the appeal of two consolidated

cases,1 Hershenow, et al. v. Enterprise Rent-a-Car

Company, Inc., et al., and Roberts v. Enterprise Rent-

a-Car Company of Boston, Inc. (the Defendants/Appellees

are hereinafter referred to collectively as

“Enterprise”). Both cases allege that Enterprise

engaged in separate unfair and deceptive business

practices that violate Chapter 93A in connection with

the sale of Collision Damage Waivers (“CDWs”)2 to

consumers as part of automobile rental contracts. Both

cases were filed as class actions on behalf of

similarly situated consumers.

1 The cases were consolidated following remand ofRoberts (No. 99-4767 BLS) from the Supreme JudicialCourt. See Roberts v. Enterprise Rent-A-Car Company ofBoston. Inc., 438 Mass. 187, 196 (2002).2 A CDW is: “any contract or contractual provision . .whereby the rental company agrees, for a charge, towaive any or all claims against the renter for damagesto or loss of the rented private passenger automobileduring the term of the rental agreement.” M.G.L. c. 90,§ 32E1/2(A)(hereinafter “Section 32E1/2”).

2

The First Amended Class Action Complaint in

Hershenow (No. 03-0033 BLS) contains four counts:

breach of contract; unjust enrichment; violation of

G.L. c. 93A; and declaratory judgment. Appendix, I-53.3

All four counts are based on the claim that

Enterprise’s CDW contains broad exclusions which are

prohibited by statute and that at least three of the

exclusions are so far-reaching as to render the CDW

illusory. The Amended Class Action Complaint in Roberts

contains two counts: violation of Section 32E1/2 (B)(2)

and (C)(2); and violation of Chapter 93A. A. I-17.

Both counts are based on Enterprise’s failure to

disclose that purchase of a CDW may be unnecessary

because such coverage duplicates an existing insurance

policy.

On April 10, 2003, Enterprise filed a Motion for

Judgment On the Pleadings On the Ground That There Can

Be No Claim for Violation of Chapter 90, Section 32E1/2

Under Chapter 93A. A. I-75. This motion was directed

at both Hershenow and Roberts. Enterprise also filed

separate summary judgment motions directed at the

separate claims in Roberts and Hershenow. A. II-600,

III-1026. On the same date both Roberts and Hershenow

3 References to the Appendix are abbreviated as“A.(Volume)-(Page)”.

3

filed Cross Motions for Partial Summary Judgment

against Enterprise. A. I-419, I-317.

The Superior Court did not address the merits of

the parties’ respective summary judgment motions.

Instead, on July 28, 2003, the court (Van Gestel, J.)

issued its Memorandum And Orders On Various Dispositive

Motions, granting Enterprise’s Motion for Judgment On

the Pleadings. The court ruled that Section 32E1/2

contains no private remedies, and further that it

conflicted with c. 93A, thus precluding consumers’

independent right to bring a claim under c. 93A.4

The court’s decision represents the first time a

Massachusetts court has ruled that a consumer

protection statute, containing no private remedies and

containing no express language preempting other laws,

cannot be enforced through an action under c. 93A. The

court’s ruling that Section 32E1/2 contains the “entire

statutory scheme for the regulation of business

practices regarding collision damage waivers in private

passenger automobile rental transactions in

4 Because Roberts interpreted the trial court’s Orderon Rule 16 Conference, entered on January 6, 2003, tospecifically request summary judgment briefing only onthe more limited legal issue of whether Enterprise’suse of the “addendum” form of rental agreementsviolated Section 32E1/2, he did not explicitly seeksummary judgment that Enterprise’s conduct violated c.93A independently or via Section 32E1/2 violations.However, Roberts does so allege in his Amended ClassAction Complaint and demand letter to Enterprise. SeeA. I-17; I-41.

4

Massachusetts” (A. III-1295), to the exclusion of c.

93A, is contrary to longstanding Massachusetts case

law, as well as the legislative purpose underlying c.

93A.

STATEMENT OF FACTS AND BACKGROUND

The factual allegations of the Hershenow and

Roberts complaints, which must be taken as true, Eyal

v. Helen Broadcasting Corp., 411 Mass. 426, 429 (1991),

may be summarized as follows:

The Hershenow Action

The facts of Hershenow are essentially undisputed.

Both Mr. Hershenow and Ms. Beaumier, the plaintiffs

below, rented cars from an Enterprise office located in

Massachusetts; paid a rental fee for use of their

respective cars; purchased a CDW for an additional fee;

and executed a form contract with Enterprise containing

the terms and conditions of the rental agreement. A.

I-357, 363. Mr. Hershenow and Ms. Beaumier executed

identical form rental contracts. A. I-354, 360.

Paragraph 5 of the Enterprise form Rental

Agreement states: “[a] violation of any provision of

this agreement invalidates Damage Waiver.” (emphasis

added). Paragraphs 3 and 13 contain similarly sweeping

provisions: “Renter agrees not to use car . . . in

violation of any law, ordinance or regulation governing

the use or return thereof” (¶3); “[a] violation of the

5

agreement shall exist if the car is used or driven: (a)

in violation of any term or condition of this

agreement…” (¶13) (emphases added). Paragraph 13 also

provides that the renter violates the contract “if the

car is used or driven . . . (j) in a[n] … imprudent

manner.” A. I-355.

Other provisions of the Enterprise form Rental

Agreement nullify the CDW if the car is used or driven:

(b) By any person under the age of 25 withoutOwner’s written permission, or by anyone whohas given a fictitious name or address;

(c) For any illegal purpose, in a race, speedcontest, to tow a vehicle or trailer;

(d) By any person if there is reasonableevidence they [sic] were under the influence ofnarcotics, intoxicants or drugs;

(e) By any person other than Renter withoutwritten consent of the Owner;

(f) Outside the state of rental without writtenconsent of Owner;

(g) Under authority or license other than hisown . . .;

(h) If renter or driver leaves the car unlockedor fails to secure the keys;

(i) Other than on a paved public highway,private road, or driveway.

A. I-355. Section 32E1/2 does not permit any of

these exclusions.

On November 21, 2001, Mr. Hershenow and Ms.

Beaumier issued a Chapter 93A demand letter to

Enterprise. A. I-366. Enterprise responded without

making any offer of settlement. Enterprise did revise a

portion of its contract, but retained the bulk of the

6

challenged provisions.

Hershenow’s c. 93A claims rest on two independent

bases: that Enterprise’s use of form rental agreements

indisputably contain at least ten CDW exclusions not

permitted by Section 32E1/2, thereby violating c. 93A;

and that those form agreements, by their express terms,

contain such broad exclusions and limitations of CDW

coverage as to render the CDWs virtually worthless to

consumers. A. I-67. With respect to this latter claim,

Hershenow also alleged that three overarching

exclusions contained in Enterprise’s rental agreements

violate the strong public policy in Massachusetts

against illusory contracts, and thereby violate c. 93A

irrespective of Section 32E1/2.

The Roberts Action

Roberts alleges that between May 1995 and April,

1997, Enterprise violated c. 93A and Section 32E1/2 by

using a form of rental agreement (the “Addendum Form”)

that failed to disclose to consumers that CDW purchase

could be unnecessary because it would merely duplicate

their own automobile insurance coverage, which extended

to the rental vehicle.5

5The Roberts action has previously been before theSupreme Judicial Court on the issue of whether anotherform of its rental agreement, the “Ticket Jacket” form,complied with Section 32E1/2. See Roberts v. EnterpriseRent-A-Car Company of Boston, Inc., 438 Mass. 187, 191(2002). In that case, the SJC determined thatEnterprise’s use of the Ticket Jacket form satisfied

7

The Addendum Form consists of four pages, attached

along the left side by perforated strip. The front of

the first three pages are substantively identical; the

back sides of two of those three pages, designated

“Customer Copy” and “Auditor’s Copy,” contain the terms

and conditions of the rental agreement. See A. I-438.

Each of the first three pages of the Addendum Form

contains the phrase, near the bottom left of the page:

“SEE ADDENDUM FOR COLLISION DAMAGE WAIVER NOTICE, MASS

GENERAL LAW CHAPTER 90, SECTION 32E1/2.” Id.

Section 32E1/2 requires CDWs to contain the

following notice (hereinafter, the “Required Notice”):

NOTICE: This contract offers, for anadditional charge, a Collision Damage Waiver tocover your financial responsibility for damageto the rental vehicle. Your personalautomobile insurance may already cover you fordamage to a rental car. The purchase of aCollision Damage Waiver is optional and may bedeclined. For Massachusetts residents: If youhave an automobile policy on your personalvehicle with coverage for collision, yourpolicy will cover collision damage to a rentalvehicle, less the deductible on your policy.If you have comprehensive coverage on yourvehicle, your policy will cover loss on therental vehicle caused by fire, theft orvandalism, less the deductible on your policy.. . .

M.G.L. c. 90, § 32E1/2(B)(2)(emphasis added).

During the time that Enterprise rented vehicles to

consumers using the Addendum Form, the Required Notice

the requirements of Section 32E1/2. See id. The courtalso held that in order to satisfy Section 32E1/2, the

8

was not contained in the terms and conditions section

of the rental agreement, or anywhere else in that

agreement, but rather, in a separate document: the

“Addendum” referred to on the Addendum Form. See, A. I-

438-39. In addition to the Required Notice, the

Addendum contains places for the customer to sign the

Addendum. Id.

Roberts alleges that Enterprise’s use of a rental

agreement that is separate from the document disclosing

to consumers the Required Notice does not satisfy the

requirements of Section 32E1/2. Roberts further alleges

that even if the Addendum could somehow be deemed to be

part of the rental agreement in principle, the evidence

establishes that Enterprise failed to provide the

Addendum to Roberts and the class members in practice,

and that therefore, the Required Notice was not

included in Enterprise’s rental agreements, as required

by Section 32E1/2.

The Roberts Complaint also alleges that

Enterprise’s conduct, including, but not limited to,

its failure to comply with Section 32E1/2, violates c.

93A. A. I-28.

[Required] notice must be included in the RentalAgreement.” Id. at 192, 627.

9

SUMMARY OF ARGUMENT

The court below erred when it granted

Enterprise’s motion for judgment on the pleadings, and

dismissed these consolidated actions, on the stated

ground that there “can be no claim for violation of

Chapter 90, Section 32E1/2 under Chapter 93A.” A. III-

1296. The court based its conclusion on two grounds:

that Section 32E1/2 contained no express or implied

private right of action, and that its public remedies

conflicted with the broader private remedies of c. 93A,

and therefore completely preempted it.

The court’s ruling is erroneous for three reasons.

As an initial matter, Hershenow did not assert claims

directly under Section 32E1/2, because it contains no

private remedies. Instead, Hershenow asserts that

Enterprise’s conduct violates c. 93A because it fails

to comply with the requirements of Section 32E1/2. A.

I-67. [pp. 6-7]

Second, the court’s ruling that Section 32E1/2

conflicts with c. 93A, and thereby precludes its

application, is irreconcilable with longstanding c. 93A

jurisprudence, which holds that conduct that violates

separate statutory or regulatory provisions designed to

protect the health, safety or welfare of consumers also

constitutes a violation of c. 93A. An exception to

10

this rule exists only in the rare circumstance where

the Legislature has indicated its intent to preempt c.

93A by establishing a comprehensive regulatory scheme,

including separate conflicting private remedies. See

Cabot Corp. v. Baddour, 394 Mass. 720, 477 N.E. 2d 399

(1985); Reiter Oldsmobile Inc. v. General Motors

Corporation, 378 Mass. 707 (1979). Nothing in the

express language of either statute supports the court’s

ruling either. [pp. 18-35]

The court’s holding on this point also conflicts

with the central premise behind the original creation

of c. 93A’s private right of action, that such a right

is necessary precisely because the Attorney General has

woefully inadequate resources to protect consumers on

his own. Slaney v. Westwood Auto, Inc., 366 Mass. 688,

699, 322 NE 2d 768,776 (1975). [pp. 19-20]

Third, the court utterly ignored Hershenow’s claim

that Enterprise’s CDW provisions were unfair and

deceptive, independent of Section 32E1/2, because of

three broad exclusions which rendered the CDW coverage

illusory and virtually worthless. Even were the court’s

decision read to implicitly hold that there can never

be a c. 93A claim for unfair and deceptive acts and

practices related to CDW provisions, its ruling cannot

stand. Because c. 93A clearly applied to CDWs prior to

the enactment of Section 32E1/2, the court’s

11

interpretation would require a finding that the

Legislature, in enacting Section 32E1/2, intended to

take away Chapter 93A’s protections, and replace them

with a scheme giving rental companies complete immunity

from consumers’ claims for unfair or deceptive CDW

practices. Such presumed intent is illogical, contrary

to the intent and policy goals of c. 93A generally, and

violates the longstanding presumption against implicit

repeal. [pp. 35-49]

ARGUMENT

I. The Trial Court Erred In Ruling That Violations ofSection 32E1/2 Cannot Provide the Basis for A ClaimUnder Chapter 93A

The court’s ruling is at odds with the history and

purpose of Section 32E1/2, case law interpreting c. 93A,

and with the policies embodied in c. 93A.

A. The Legislature Enacted Section 32E1/2 To ProhibitEnterprise And Other Car Rental Companies FromTaking Unfair Advantage Of Consumers In The Sale OfCDWs

1. The Genesis Of Section 32E1/2

In 1989, a task force of the National Association

of Attorneys General (“NAAG”) issued a report detailing

a number of abuses in car rental companies’ sale of

CDWs and providing guidance to car rental companies on

complying with state unfair and deceptive practice

laws. Final Report and Recommendations of the National

Association of Attorneys General Task Force on the Car

Rental Industry Advertising and Practices, 56 Antitrust

12

& Trade Reg. Rep. (BNA) No. 1407 (March 16, 1989)

(hereinafter “NAAG Report”). A. I-372. The NAAG Report

concluded that “the marketing and sale of CDW has been

fraught with deception,” and recommended that states

support legislation to curb the abuses associated with

CDW sales. A. I-380. The NAAG recommended legislative

reform because car rental agreements are “classic

adhesion contracts” and the surest way to protect

consumers in this area (other than banning CDWs

outright) was to prohibit abusive terms. A. I-386.

In its report, the NAAG discussed certain aspects

of CDWs that were “unfair, deceptive, or unconscionable

under existing state laws.”7 A. I-385 (emphasis

added). The NAAG Report specifically cited as “unfair

and deceptive . . . business practices” . . . the “sale

of costly CDW products that offer little or no

protection from liability in the event of an accident

or theft of the vehicle.” A. I-377. The Report

concluded that some rental companies engaged in unfair

7 At the time the NAAG Report was issued in 1989, c.93A was already in existence. The Report noted: “Theguidelines contained in the report are not an attemptat rulemaking and should not be considered as such.Rather, they are intended to be no more than arestatement of what is currently illegal under the lawsof the various states, specifically applied to thepractices of the car rental industry. The guidelineswill also serve to advise the car rental industry as towhat conduct is permitted and what is prohibited. Sucha guide will better serve the interests of consumersand industry alike.” A. I-375 (emphasis added).

13

business practices by selling CDWs that were so

unreasonably restricted as to be useless, A. I-386, the

very claim that Hershenow makes, completely independent

of Section 32E1/2. The report also found that most

rental contracts were “virtually worthless because they

are so complicated and convoluted that it is unlikely

that more than a very few consumers would understand

them,” and contained no clear information about whether

the CDW was duplicative of the consumer’s own

automobile insurance, as Roberts alleges. A. I-386

(also noting the practice of sales representatives to

disparage the consumer’s own insurance, and

recommending improved disclosures with respect to

exclusions and necessity of CDW where consumer has

insurance).

The NAAG Report confirms that, even before the

enactment of Section 32E1/2, practices such as those

complained of in the Hershenow and Roberts actions were

unfair and deceptive, in violation of existing state

consumer protection laws. A. I-385. Chapter 93A, which

has been in existence since 1967, was among those

existing state laws. See M.G.L.A. c.93A, §§ 1, 2 (West

1997).6

6 Other courts have cited the NAAG guidelines indetermining whether conduct in connection with CDWs isunfair and deceptive. See, Gershon v. HertzCorporation, 626 N.Y.S.2d 80, 215 A.D.2d 202 (1995) (inupholding a lower court’s finding that Hertz’s CDW

14

2. The Requirements of Section 32E1/2

The Massachusetts Legislature added Section 32E1/2

to M.G.L. Chapter 90, in 1990 – shortly after the NAAG

Report was issued. The Legislature’s goal in enacting

Section 32E1/2 was to protect consumers. Indeed, in the

context of considering Enterprise’s practices

concerning the Required Notice complained of in the

Roberts action, the Supreme Judicial Court recognized

that:

Section 32E1/2 is clearly designed to benefitconsumers who rent private passengerautomobiles by notifying them that purchase ofCDW might duplicate coverage already providedby their automobile insurance.

Roberts, 438 Mass. at 192, 779 N.E.2d at 627.

The express provisions of Section 32E1/2 allow car

rental companies to exclude CDW protection in only

eight enumerated circumstances:

If a collision damage waiver is purchased,only the following may be excluded from the

practices did not violate NY UDAP law, the courtstated: “The IAS court properly relied on the NationalAssociation of Attorneys General Guidelines of 1989,which, based upon an extensive review of the businessand advertising practices of the car rental industry bya special task force and intended to provide guidanceto car rental companies on complying with State unfairand deceptive practice laws, do not require thedisclosure of alternative basis rates but do requirethe disclosure of "surcharges"); or have foundmisleading language in CDW provisions, like thosecriticized by NAAG, to be an unfair business practice.See People v. Dollar Rent-A-Car Systems, Inc., 259Cal.Rptr. 191, 211 Cal.App.3d 119(1989)(misrepresentations regarding CDWs and misleadingCDW provisions constituted unfair business practices inviolation of California statute).

15

protection of the collision damage waiver.

(a) damage or loss caused intentionally,willfully or wantonly by an authorized driver;

(b) damage or loss occurring while anauthorized driver operates the rental vehiclewhile legally intoxicated or under theinfluence of any illegal drug or chemical asdefined or determined under the law of thestate in which the damage occurred;

(c) damage or loss caused while an authorizeddriver is engaging in any speed contest;

(d) damage or loss caused while an authorizeddriver is using the vehicle to push or towanything or using the vehicle to carry personsor property for hire, unless expresslyauthorized in the rental agreement;

(e) damage or loss incurred while an authorizeddriver is driving outside the United States orCanada, unless expressly authorized in therental agreement;

(f) damage or loss incurred while the vehicleis driven, with the renter's permission oraccession, by anyone other than an authorizeddriver;

(g) damage or loss incurred after the privatepassenger automobile was rented or anauthorized driver was approved as a result offraudulent information provided to the rentalcompany;

(h) damage or loss incurred as a result ofcommission of a felony by an authorized driver.

M.G.L. c. 90, § 32E1/2(C)(5)(emphasis added).

Section 32E1/2 also mandates that each CDW must

contain the required notice that a consumer’s personal

automobile insurance may already provide coverage.

M.G.L. c. 90 § 32E1/2(B)(2). Section 32E1/2(C)(2) further

provides that “[n]o rental company may sell or offer to

sell a [CDW] unless the rental agreement . . . includes

the notice. . . ”. The statute provides no express

16

private right of action or remedies, but instead

provides civil fines and penalties in actions brought

on behalf of the Commonwealth. M.G.L. c. 90, §§

32E1/2(D),(E).

B. The Relationship Between Chapter 93A AndSection 32E1/2

1. Chapter 93A And Section 32E1/2 Form AComplementary Scheme Which Protects ConsumersFrom The Illegal Conduct That AppellantsChallenge

The court below concluded that section 32E1/2

preempts c. 93A, because it contains the “entire

statutory scheme for the regulation of business

practices regarding collision damage waivers in private

passenger automobile rental transactions in

Massachusetts.” A. III-1295. The court’s decision

suggests that by expressly failing to provide a private

remedy, and instead providing only for public

enforcement by the Attorney General, the Legislature

affirmatively sought to “bar” actions under c. 93A for

any conduct related to CDWs. This premise is faulty for

several reasons.

First, there is nothing in the express language of

either statute which suggests that c. 93A should not

apply to collision damage waivers in rental car

contracts. There can be no dispute that c. 93A applied

generally to rental car contracts prior to the

enactment of Section 32E1/2, and there is no indication

17

whatsoever that the Legislature intended to deprive

consumers of existing rights to recover for rental car

companies’ CDW abuses under c. 93A by enacting Section

32E1/2. In fact, it is the converse that is true, the

Legislature’s intention in enacting Section 32E1/2 –

immediately after the release of the NAAG Report, which

detailed “unfair and deceptive practices” that were

already actionable under c. 93A - was to provide

increased protection for consumers purchasing CDWs.

The Legislature was certainly aware, as the Supreme

Judicial Court noted in Slaney v. Westwood Auto, Inc.,

366 Mass. 688, 322 NE 2d 768 (1975), that an effective

private right of action under c. 93A is critical to

protecting consumers’ rights, because the Attorney

General’s ability to effectively police the consumer

marketplace is “woefully” inadequate:

Because of the inability of the [AttorneyGeneral’s Consumer Protection Division] tohandle all the complaints it was receiving, itbecame clear that private remedies were neededunder c. 93A7… The Attorney General sought tomeet the pressing need for an effective privateremedy under c. 93A by proposing the bill whichevolved into 1969 Senate Doc.No.1259. Whilethis bill was awaiting final approval, theAttorney General discussed its import in hisannual report: 'Some significant legislation wasproposed and supported during this period. . .. Two important amendments to Chapter 93A are

7 “It has been observed that most such agencies are'woefully understaffed and underfinanced, morassed in asea of red tape, and unbearably slow acting’.” Slaney,at 698-99, 776, quoting Travers and Landers, TheConsumer Class Action, 18 U. of Kans.L.Rev. 811, 812(1970).

18

pending and favorable action is anticipated. One. . . provides the consumer with a privateremedy, including a minimum recovery of $25.00,attorney's fees, a class action provision, and,in certain cases, treble damages.' Insubstantially the form proposed by the AttorneyGeneral, a private remedy bill was enacted.St.1969, c. 690.”

Slaney, 366 Mass. at 699-700, 322 NE 2d at 776-777

(emphasis added).

The Legislature must also be presumed to be aware

of the Attorney General’s regulation at 940 CMR

3.16(3), validly promulgated pursuant to c. 93A, §

2(c), making relief available under c. 93A for any

violation of a statute intended to protect consumers,

at the time Section 32E1/2 was enacted.

Second, the trial court is simply incorrect in

suggesting that Section 32E1/2 is a comprehensive

regulatory scheme governing unfairness in an industry,

which thereby precludes application of the “broader” c.

93A. As demonstrated below, case law and common sense

establish that Section 32E1/2 is not a comprehensive

scheme.

C. There Is No Conflict Between Section 32E1/2

And Chapter 93A

1. Section 32E1/2 Is Not A Comprehensive Statute ThatPreempts Chapter 93A

The plain language of the statutes at issue do not

suggest any intention that c. 93A should not apply to

collision damage waivers in rental car contracts.

Chapter 93A is a broad, remedial act, which applies to

19

unfair and deceptive acts and practices in the conduct

of any trade or commerce. M.G.L. c. 93A § 2. The only

stated exemptions from conduct covered by c. 93A is for

“actions otherwise permitted under laws as administered

by any regulatory board or officer acting under

statutory authority of the Commonwealth or of the

United States.” M.G.L. c. 93A § 3. The protections of

c. 93A are so far-reaching that it provides a remedy

where damages are de minimus. c. 93A, §9.

The expansive scope and broadly remedial purpose of

c. 93A is recognized in literally hundreds of

Massachusetts decisions. See, e.g., Ciardi v. F.

Hoffman-La Roche, Ltd., 436 Mass. 53, 58, 762 N.E.2d

303, 308 (2002)(Chapter 93A is “a statute of broad

impact which creates new substantive rights and

provides new procedural devices for the enforcement of

those rights,” citation omitted); Raymer v. Bay State

Nat’l Bank, 384 Mass. 310, 319, 424 N.E.2d 515, 521

(1981)(holding c. 93A applicable to banks

notwithstanding comprehensive regulation of banking

industry because banks engage in “trade or commerce,”

and citing cases evidencing court’s lack of hesitation

to apply c. 93A to other regulated institutions).

Likewise, there is nothing in the language of Section

32E1/2 that suggests an intention to exclude CDW

20

contracts from the application of any other laws,

including c. 93A.

In the absence of plain language to the contrary,

Massachusetts courts will only find an intention to

preclude the application of c. 93A where the

Legislature has enacted a comprehensive regulatory

scheme for a particular industry, including a private

right of action. See Cabot Corp. v. Baddour, 394 Mass.

720, 726, 477 N.E. 2d 399, 402 (1985); Reiter

Oldsmobile Inc. v. General Motors Corporation, 378

Mass. 707 (1979). These two cases, the only two

decisions that the trial court cites to support its

conclusion that the remedies of Section 32E1/2 conflict

with c. 93A, turned on the fact that the underlying

statutes at issue were comprehensive regulatory

schemes, that included their own detailed provisions

for private remedies, which were different than the

remedies available under c. 93A. Id. Conversely, where

a statute governing an industry is not comprehensive

and does not provide a private cause of action, access

to c. 93A is not barred. See Quincy CableSystems, Inc.

v. Sully’s Bar, Inc., 684 F. Supp. 1138, 1141 (D. Mass.

1988) (holding where no statute provided for private

remedy for injury complained of, there could be no

conflict with c. 93A). Section 32E1/2 is neither a

21

comprehensive statute, nor does it contain any remedy

provisions that could conflict with those in c. 93A.

In Cabot, the SJC held that c. 93A was inapplicable

to securities transactions because M.G.L. c. 110A, the

Uniform Securities Act, was “clear[ly] . . . intended

to provide comprehensive regulation of the securities

field. Cabot, 394 Mass. at 725, 477 N.E. 2d at 402. In

so holding, however, the Cabot court made it a point to

distinguish Dodd v. Comm’l Union Ins. Co, 373 Mass. 72,

365 N.E.2d 802 (1977), in which it had previously held

that c. 93A had concurrent applicability with an

extensive statutory scheme governing insurance, on the

basis that the insurance statute “made no provision for

private actions, . . . and therefore . . . did not

comprehensively regulate unfair or deceptive insurance

practices.” Cabot, 394 Mass. at 725, 477 N.E.2d at 402

(emphasis added).

In Cabot, the court focused on the “carefully

crafted remedial provisions” in c. 110A, including

provisions for suits at law or in equity to recover

damages, interest and attorneys’ fees. Cabot, 394 Mass.

at 725, 477 N.E. 2d at 402. Reasoning that the

Legislature had enacted similar, but somewhat different

remedial provisions in c. 93A, § 11 just four days

before enacting c. 110A, the court concluded that the

Legislature must have intended the specific remedial

22

provisions of c. 110A to apply in securities

transactions. Id. at 725-26, 477 N.E.2d at 402.8

Similarly, in Reiter, the SJC found that M.G.L. c.

93B, which is entitled “Regulation of Business

Practices Between Motor Vehicle Manufacturers,

Distributors and Dealers,” was a “self-contained

statute, prescribing specific remedies for its

violation.” Reiter, 378 Mass. at 711, 393 N.E.2d at

378; see G.L. c.93B.9 The remedies available under c.

93B were articulated by direct reference to certain

sections of c. 93A, but not others. Id. at 709, 393

N.E.2d at 377. Specifically, c. 93B provided that motor

vehicle dealers could recover “damages as provided in

sections nine and ten of . . . chapter ninety-three A.”

Id. The court observed that conspicuously absent from

that language was any reference to the sections of c.

93A providing for injunctive relief, and concluded that

the Legislature must have intended to preclude

automobile dealers from obtaining such relief by

specifically referencing in c. 93B only the damages

remedies in c. 93A. Id. at 707, 393 N.E.2d at 376.

8 The Legislature amended c. 93A after Cabot toexpressly include securities transactions within itsscope. See Ansin v. River Oaks Furniture, Inc., 105F.3d 745, 760 (1st Cir. 1997).9 Reiter is also inapposite because the statute atissue in that case was not a consumer protectionstatute. See 378 Mass. at 708, 393 N.E.2d at 377.(Chapter 93B is “addressed primarily to . . . dealings

23

The court held, therefore, that plaintiff’s claim for

injunctive relief under c. 93A, § 11 was barred,

because “to hold otherwise would be to overlook the

careful limitation on private remedies in c. 93B and

render much of the statute surplusage”. Id. at 711, 393

N.E.2d at 378 (emphasis added).

As Cabot and Reiter establish, since Section 32E1/2

contains no private remedy provisions whatsoever, let

alone any “carefully crafted remedial provisions,” it

does not constitute a comprehensive regulatory scheme

that conflicts with, and supplants, c. 93A. See also,

Quincy CableSystems, Inc. v. Sully’s Bar, Inc., 684 F.

Supp. 1138, 1141 (D. Mass. 1988). A well known

Massachusetts treatise is in accord:

…when the Legislature has provided acomprehensive regulatory scheme for aparticular industry . . . , including a privateright of action for aggrieved parties, itsintent is to preclude an aggrieved party fromresorting to the more liberal remedies presentin the Consumer Protection Act but not in thespecific statute.”

35 Howard J. Alperin & Roland F. Chase,

Consumer Law, § 4.15 (Mass. Practice Series 2001)

(emphasis added). That statement precisely

reflects the analysis that led the Cabot and Reiter

courts to hold that the plaintiffs in those cases

among motor vehicle manufacturers, distributors, anddealers” as opposed to consumers).

24

were precluded from asserting claims under c. 93A

because a more specific statute governed.

2. Massachusetts Courts Find No Conflict BetweenChapter 93A And A Statute Containing No PrivateRemedies

No Massachusetts decision holds that a conflict

exists between c. 93A and a “narrower” consumer

statute that contains no provisions for private

remedies, or that relief under c. 93A is precluded

for violations of such a consumer statute. In fact,

numerous decisions have expressly found 93A to be

applicable when another statute governs the conduct

at issue but contains no private remedies. See

Ciardi v. F. Hoffman-La Roche, Ltd., 436 Mass. 53,

762 N.E.2d 303, 310 (2002); Dodd, 373 Mass. 72, 365

N.E.2d 802. In both Ciardi and Dodd, the SJC held

that remedies available under c. 93A were available

to the plaintiffs, notwithstanding the existence of

another concurrently applicable statute that

provided no such remedies. Ciardi, 436 Mass. at 64,

762 N.E.2d at 312; Dodd, 373 Mass. at 78, 365

N.E.2d at 805. Notably, in both of those cases,

the statutes were specifically intended to protect

consumers, but contained no express private

remedies for the claims at issue. Ciardi, 436 Mass.

at 55, 762 N.E.2d at 306; Dodd, 373 Mass. at 75,

365 N.E.2d at 804. In fact, the statute at issue

25

in Dodd, like Section 32E1/2, expressly provided for

public enforcement. M.G.L. c. 176D, §§ 5-7.

In Ciardi, the SJC addressed the issue of whether

indirect purchasers can assert claims for price-fixing

or other anticompetitive conduct under c. 93A when they

have no standing to bring such claims under the

Massachusetts Antitrust Act, c. 93 §§ 1-14A. Ciardi, at

55, 306. The defendants argued that Reiter and Cabot

compelled a finding that indirect purchasers were

barred from bringing price-fixing claims under G.L. c.

93A, because they could not bring such claims under the

Antitrust Act. Id. at 56, 307. To conclude otherwise,

the defendants argued, “would be to allow indirect

purchasers to circumvent the limitations on plaintiffs'

remedies in the Antitrust Act by bringing their causes

of action under G.L. c. 93A.” Id. The SJC, however,

rejected this argument, ruling that Reiter and Cabot

were distinguishable because the statutes at issue in

those cases contained limited private remedies which

excluded some of the remedies available under c. 93A.

Id. at 63–64, 312. Moreover, the Court noted that

neither statute was a “comprehensive scheme” enacted to

govern all antitrust claims, to the exclusion of the

other. Id. 64, 312.

In Dodd v. Comm’l Union Ins. Co., 373 Mass. 72, 77,

365 N.E.2d 802, 805 (1977), the SJC rejected the

26

argument that the Legislature’s failure to include a

private remedy in G.L. c. 176D, which did provide for

public enforcement by the Commissioner of Insurance,

established that the Legislative intent was to bar

relief under c. 93A. Id. Noting the broad application

of c. 93A and the fact that it did not expressly

exclude the insurance business from its scope, the

court concluded that the “mere existence of one

regulatory statute does not affect the applicability of

a broader, nonconflicting statute, particularly when

both statutes provide for concurrent coverage of their

common subject matter.” Id., at 78, 805.10 Rather, the

SJC held that “one can infer that this omission [of a

private remedy] stemmed from the Legislature’s

knowledge that such a consumer right of action already

existed pursuant to c. 93A, § 9, rather than from a

desire to bar such actions.” Id.

While the trial court inscrutably stated that it

reads nothing in Ciardi “applying to the claims and

situations set forth in the two complaints before it

here,” A. III-1294, and failed to address Dodd

10 The Dodd court also noted that c. 176D § 8 providesin relevant part:No order of the commissioner under this chapter ororder of a court to enforce the same shall in any wayrelieve or absolve any person affected by such orderfrom any liability under any other laws of thiscommonwealth.

27

entirely. These cases make clear that the trial court

is wrong and that there is no inherent conflict between

c. 93A and a consumer protection statute or regulation

that lacks explicit private remedy provisions, or that

authorizes public enforcement. See also, McGrath v.

Mishara, 434 N.E.2d 1215, 1221, 386 Mass. 74, 83 (1982)

(finding no conflict between c. 93A and security

deposit statute noting that “mere fact that these

statutes contain some overlapping prohibitions and

remedies does not establish a legislative intent to

preclude their concurrent application”); Henderson v.

Wright, 1996 WL 33401225, *3 (Mass.Super.) (Lopez, J.)

(Addendum) (no conflict exists between statute

governing medical malpractice claims, which contains no

private remedies, and c. 93A).

3. Numerous Decisions Have Found That Relief isAvailable Under Chapter 93A For Violations ofConsumer Protection Statutes, Without Regard toWhether Such Statutes Contain Private Remedies

Massachusetts courts have found that relief is

appropriate under c. 93A for violations of a wide

variety of consumer protection statutes and

regulations, notwithstanding the remedies, or lack of

remedies, contained in the law at issue. See, e.g.,

Calimlim v. Foreign Car Center, Inc., 392 Mass. 228,

235, 467 N.E.2d 443, 448 (1984); Norwest Bank Iowa,

N.A., v. McNulty, (unpublished) 50 Mass. App. Ct. 1114,

741 N.E.2d 492 (Table), (2001) 2001 WL 92993

28

(Mass.App.Ct.); Piccuirro v. Gaitenby, 20 Mass. App.

Ct. 286, 290-91, 480 N.E.2d 30, 33-34 (Mass. App. Ct.

1985); (Addendum)Harkins v. Colonial Floors, Inc., C.A.

No. 96-910, 1998 WL 22075, at *9 (Mass. Super. Ct. Jan.

20, 1998) (Gants, J.) (Addendum).

For example, in Calimlim, the SJC held that the

plaintiff stated a claim for violations of the

warranties of merchantability and fitness – and also

stated an independent cause of action under c. 93A –

because the “defendant’s violations of merchantability

and fitness were contrary to G.L. c. 106, § 2-314 and §

2-315, respectively, and thus, violative of c. 93A.”

Calimlim, 392 Mass. at 235, 467 N.E.2d at 448. No

conflict between the provisions was cited.

In Piccuirro, supra, the defendants failure to

comply with Environmental Code regulations related to

testing and approval of building lots to ensure that

they could support adequate septic systems, and which

were “designed to protect the public health,” permitted

the plaintiff’s recovery under c. 93A. See 20 Mass.

App. Ct. at 288-91, & n.2, 480 N.E.2d at 32-34 & n.2.

Like Section 32E1/2, the Environmental Code in Piccuirro

authorized public enforcement, but neither (i) provided

for a private right of action for consumers injured by

a violation of its provisions, nor (ii) expressly

provided that consumers could seek damages under c. 93A

29

for violations of those provisions. See Mass. Regs.

Code tit. 310, § 15.025.

In Norwest Bank, the defendant bank, which serviced

the plaintiff’s credit card account, increased the

plaintiff’s interest rate after he made a late payment.

Id. at *2. The court found that this conduct violated

the version of M.G.L. c. 140, § 114B then in effect,

which prohibited creditors from imposing delinquency

charges on credit card accounts. Like Section 32E1/2,

the statute at issue in Norwest Bank contained no

express provisions (i) allowing for the recovery of

damages, or (ii) providing for recovery under c. 93A.

Id. See also M.G.L. c. 140, § 114B (2002)(describing

prior versions of § 114B in Historical and Statutory

Notes). Nevertheless, reasoning that § 114B “provided

a consumer protection mechanism . . . by limiting the

finance charges available to creditors,” the Court held

that defendant’s violation of § 114B constituted an

unfair and deceptive practice under c. 93A, entitling

the plaintiff to damages. Id. at *4.11

11 Similarly, in McGonagle v. Home Depot U.S.A., Inc.,2002 WL 31956999 (Addendum) the Superior Court(Lauriat, J.) granted the plaintiffs summary judgmentas to liability on their c. 93A claims on the basisgrounds that the defendants had violated a Departmentof Revenue regulation relating to the payment of salestax, a regulation the court found was intended tobenefit the economic interests of Massachusettsconsumers. The Court did so after concluding that theregulation at issue, which contained no provisions forprivate recovery nor any references to recovery under

30

4. The Enactment of Section 32E1/2 Did Not and CouldNot Repeal The Protections of Chapter 93A

If allowed to stand, the effect of the trial

court’s ruling would be that Section 32E1/2 preempts or

repeals c. 93A to the extent it applies to collision

damage waiver provisions of rental car contracts.

Nothing in Section 32E1/2 expressly repeals c. 93A,

however, and an implied repeal of an earlier statute is

disfavored by Massachusetts courts. See Commonwealth v.

Feodoroff, 686 N.E.2d 479, 482; 43 Mass.App.Ct. 725,

729 (1997)(noting that the argument that a later

wiretap statute implicitly repealed an earlier

telephone records statute “falls before the strong

presumption in the cases against implied repeal of a

statute”) citing, Commonwealth v. Hayes, 372 Mass. 505,

511, 362 N.E.2d 905 (1977); Commonwealth v. Jones, 382

Mass. 387, 391, 416 N.E.2d 502 (1981). Implied repeal

is only appropriate where the prior statute is so

repugnant to and inconsistent with the later statute

covering the subject matter, that both cannot stand.

Doherty v. Commissioner Of Administration, 212 N.E.2d

c. 93A, was intended to benefit the economic interestsof Massachusetts consumers. Id. In Harkins, supra, theCourt (Gants, J.) held that where the facts at trialleft “no question that the . . . [defendants] violatedstate health and safety laws and regulations,”plaintiff was entitled to recovery under c. 93A.Harkins, 1998 WL 220785 at *8 -*9 (Addendum). In sodoing, the Court did not rely on any provisions in theunderlying laws and regulations that provided for a

31

485, 488, 349 Mass. 687, 690 (1965). For example, in a

case where two conflicting statutes govern which agency

is responsible for hiring capital police, the court

ruled that earlier statue must give way to the later

statute. Id., at 690, 691 (where later statute is

comprehensive and inconsistent with prior statute,

later enactment found to have implicitly repealed

earlier one).

In this case, Section 32E1/2 is neither repugnant

to nor inconsistent with c. 93A. While both may apply

to rental car contracts, they do not contain

inconsistent prescriptions. See, Boston Housing

Authority v. Labor Relations Commission, 500 N.E.2d

802, 398 Mass. 715 (1986). Both statutes can stand

without imposing conflicting requirements on rental car

companies. The court can, and should, interpret these

two statutes harmoniously. Boston Housing Authority v.

Labor Relations Commission, at 804, 718 (“Where two

statutes deal with the same subject they should be

interpreted harmoniously to effectuate a consistent

body of law.“ (citations omitted)).

D. Enterprise’s Violations of Section 32E1/2 AreViolations Of Chapter 93A

1. The Nature of the Violations

In ruling that there was no basis for a claim

private right of action or specifically “authorized”recovery under c. 93A.

32

under c. 93A, the trial court never reached the

question whether Enterprise’s CDW provisions actually

met the statutory requirements or were otherwise unfair

or deceptive. It is plain from the face of the form

contract at issue however, that the statutory

requirements are not satisfied, and that the contracts

are misleading, unfair and deceptive. On its face,

Enterprise’s form rental agreement contains three broad

exclusions, which void the protection of the CDW in

almost all circumstances in which one would need and

expect CDW coverage.

The three sweeping voiding provisions are as

follows:

¶ 13: A violation of the agreement shall existif the car is used or driven: (a) in violationof any term or condition of this agreement …[or] in a[n] imprudent manner.

¶ 3: Renter agrees not to use car … inviolation of any law, ordinance or regulationgoverning the use or return thereof.

¶ 5: “[a] violation of any provision of thisagreement invalidates Damage Waiver.” (emphasesadded).

A. I-73. These exclusions are, of course, not

among those enumerated in Section 32E1/2. The express

provisions of Section 32E1/2 allow car rental companies

to exclude CDW protection in only eight enumerated

circumstances. M.G.L. c. 90, §32E1/2(C)(5).

The three global exclusions in Enterprise’s

contract are the most offensive and harmful to

33

consumers, and clearly violate the express terms of the

Act. But Enterprise’s form contract impermissibly

excludes no fewer than eight additional categories of

conduct in contravention of the Act. For example, CDW

coverage is voided if, at any time during the rental

period, the renter (a) fails to lock the car’s doors,

(b) drives under someone else’s license, or (c) drives

on an unpaved road. A. I-73, ¶¶ 13(g),(h),(i). None of

these circumstances is within the enumerated

statutorily allowable exclusions to CDWs; each is thus

illegal. In addition, despite the Act’s express

limitation on territorial restrictions, Enterprise also

excludes coverage if the car is driven outside

Massachusetts, an extremely common occurrence for

rental cars. Id. The Act allows coverage to be

excluded only if the car is driven outside of the

United States. M.G.L. c. 90, § 32E1/2(C)(5)(e).

Enterprise’s contract is identical in many

respects to the contract the Attorney General

challenged in Commonwealth v. Attias Corporation, dba

Rent-A-Wreck of Marlboro, Suffolk Superior Court, Civil

Action No. 96-2135H as violative of section 32E1/2 and

c. 93A. A I-401. In the Attias enforcement action, the

Attorney General noted that as Section 32E1/2(C)(5)

permits only the eight specifically enumerated CDW

exclusions, the defendants’ use of a dozen or more

34

unpermitted exclusions “directly violate[d] G.L. c. 90,

§ 32E1/2 (C).” A. I-406, ¶#23. Like Enterprise, the

Attias defendants excluded from CDW coverage, among

other things, operation on unpaved roads or use of the

car in any manner which would constitute a violation of

law. A. I-404, ¶2. The use of these and other

unpermitted exclusions is a blatant flouting of the

consumer protections of Section 32E1/2 and therefore, as

stated by the Attorney General, a “direct” violation of

the Act. “By using rental agreement forms which

exclude from the scope of the collision damage waiver

acts or causes of damage which are not excludable under

G.L. c. 90, §32E1/2 defendants have committed

unconscionable or oppressive acts or practices …” . A.

I-411, ¶ 50 (emphasis added). Deference should be

given to the Attorney General’s interpretation of

Chapter 93A, as he is charged with enforcing it. See,

Felix A. Marino Co., Inc., v. of Labor Industries, 689

NE 2d 495, 497, 426 Mass. 458, 461 (1998).

Similarly, as alleged in the Roberts action,

Enterprise’s conduct in failing to include the Required

Notice in its Addendum Form rental agreements, by

placing the Required Notice in a separate “addendum”

document, and also by failing to provide that

“addendum” to consumers, violates the express

provisions of Section 32E1/2, which requires that the

35

Required Notice be “included” in the rental agreement.

For all of these reasons, Enterprise’s contract

violates Section 32E1/2 as a matter of law.

3. The Trial Court Ignored Attorney GeneralRegulation 3.16(3), Which Makes Violation Of AStatute Such As Section 32E1/2 A Per Se ViolationOf Chapter 93A

The Attorney General’s regulation, 940 C.M.R.

3.16, issued pursuant to c. 93A § 2(c), provides that:

Without limiting the scope of any other rule,regulation or statute, an act or practice is aviolation of M.G.L. c. 93A § 2 if:

…

(3) It fails to comply with existing statutes,rules, regulations or laws, meant for theprotection of the public's health, safety, orwelfare promulgated by the Commonwealth or anypolitical subdivision thereof intended toprovide the consumers of this Commonwealthprotection.

This regulation has the force of law. Purity

Supreme v. Attorney General, 380 Mass. 762, 771-72, 407

N.E.2d 297, 304 (1980). Accordingly, it has been

interpreted broadly to effectuate its purpose.

MacGillivary v. W. Dana Bartlett Insurance Agency of

Lexington, Inc., 436 N.E.2d 964,969, 14 Mass.App.Ct.

52, 60 (1982) (“a wide scope has been accorded to

regulations promulgated by the Attorney General” under

c. 93A, construing 940 C.M.R. 3.16(3)). Pursuant to

Regulation 3.16 violations of statutes and regulations

which are intended to protect consumers are per se

violations of c. 93A.

36

Section 32E1/2 is a statute meant for the

protection of the public’s health, safety, or welfare

and intended to protect consumers. Roberts, 438 Mass.

at 192, 779 N.E.2d at 627. As such, the plain language

of 940 CMR 3.16(3) compels a finding that a violation

of c. 90, § 32E1/2 is a per se violation of c. 93A.

A wide range of statutes and regulations fall

within the broad meaning and scope of 940 C.M.R.

3.16(3), even where the statute or regulation at issue

does not provide that its violation is an unfair and

deceptive practice. For example, in MacGillivary,

supra, 436 N.E.2d at 969, the Appeals Court held that

an insurance broker’s violation of c. 175, § 160, a

criminal statute governing the issuance of insurance

policies by unlicensed companies, also constituted a

violation of c. 93A and 940 CMR 3.16(3), even though

the violation was negligent. See also, Piccuirro v.

Gaitenby, supra (seller’s violation of environmental

code requiring Board of Health attendance for

percolation tests was per se violation of c. 93A,

pursuant to 940 C.M.R. § 3.16(3).12

The Attorney General also interprets 940 C.M.R.

12 See also, Commonwealth v. Source One Associates,Inc., 1999 WL 975120, 10 Mass.L.Rptr. 579, 1999 WL975120 (Mass.Super.)(Addendum)(disclosing anindividual’s personal financial data to third partiesin violation of G.L. c. 167B § 16 also violated c. 93Aby virtue of 940 C.M.R. 3.16(3)); McGonagle, Harkins,supra, n. 11.

37

3.16(3) to apply to the type of Section 32E1/2 violations

Enterprise has committed. In the Attias matter, the

Attorney General invoked 940 C.M.R. 3.16(3) in his

Complaint, stating the defendants, by violating G.L. c.

90. §32E1/2 also violated 940 C.M.R. 3.16(3) and Chapter

93A. A. I-409, ¶¶42-46.13

The trial court erred by neglecting to take into

account the effect of this regulation, which renders

Enterprise’s violations of Section 32E1/2 actionable

violations of c. 93A.

II. The Trial Court Committed an Error Of Law InDepriving Appellants Of Their Pre-Existing Chapter93A Claims For Unfair And Deceptive ConductIndependent Of Section 32E1/2

A. The Offending Provisions In Enterprise’sContract Illustrate The ComplementaryInterrelationship Between Section 32E1/2 AndChapter 93A

As discussed above, Enterprise’s form CDW contract

contains three broad exclusions, which void the

protection of the CDW in almost all circumstances in

13 The Attorney General also claimed that thedefendants’ violated c. 93A by failing to disclose“that automobile rental companies are prohibited byG.L. c. 90, §32E1/2 from denying consumers the benefitsof collision damage waiver coverage they havepurchased, except where damage results from any of theeight causes listed in G.L. c. 90, §32E1/2.” A. I-410,¶43(a). This failure to disclose violates 940 C.M.R.3.16(2), which provides that it is a violation of c.93A if:“[a]ny person . . . fails to disclose to a buyer orprospective buyer any fact, the disclosure of which mayhave influenced the buyer or prospective buyer not toenter into the transaction.

38

which one would need and expect CDW coverage.

Independent and irrespective of Section 32E1/2, these

sweeping exclusions render the CDW coverage illusory

and thereby render the contract itself unfair and

deceptive, in violation of c. 93A.

1. The Supreme Judicial Court Has Held VirtuallyIdentical CDW Voiding Provisions To Be Illusory

The Supreme Judicial Court has specifically held,

with respect to virtually identical rental contract

exclusions, that such provisions are “void as against

public policy” because they render the purported

coverage illusory. Liberty Mutual Ins. Co. v. Tabor,

407 Mass. 354, 358, 553 N.E.2d 909, 912 (1990). In

Tabor, consumers who rented vehicles from Embassy

Motors, Inc. were purportedly covered by Embassy’s

business auto policy. The rental agreement, however,

nullified coverage of the business auto policy whenever

the renter violated any law or vehicle code, or was

negligent. Id., at 357-358. Given these broad

exclusions, the court refused to enforce the contract

because “it is common knowledge that protection against

liability on the ground of negligence is the principal

purpose of [motor vehicle liability] policies . . . A

provision in an insurance policy that negates the very

coverage that the policy purports to provide in the

circumstances where the person is liable is void as

against public policy.” Id.

39

The NAAG Report mirrors Tabor’s holding,

emphasizing that such “waivers of liability … are so

unreasonably restricted as to be worthless.” A.I-386.

Courts across the country have also reached similar

conclusions. See, e.g, General Car & Truck Leasing

System, Inc. v. Woodruff, 214 Ga.App. 200, 203-204, 447

S.E.2d 97, 100 (Ga.Ct.App. 1994) (“blanket exclusion”

to rental insurance which excluded coverage if renter

uses vehicle “in violation of any law, ordinance, rule

or regulation of any governmental agency or body” was

void as against public policy. The court explained that

“we can think of no reason why one would need liability

insurance unless there is a possibility of liability

such as, for example, running a red light or following

too closely.”); Val Preda Leasing, Inc. v. Rodriguez,

540 A.2d 648 (Vt. 1987)(refusing to enforce extensive

list of prohibitions which rendered renter liable for

nearly all damage. “[I]f the numerous exceptions were

given effect, the renter would be liable for damage

caused by virtually every type of driver error,

including making an illegal left-hand turn, . . .

because that is operating the vehicle in an 'unlawful

manner' . . . driving while intoxicated, . . . or by

falling asleep . . . The exceptions swallow the

protection”).14

14See also, Harbour v. Arelco, Inc, 678 N.E.2d 381, 385

40

Enterprise’s form contract goes even further than

the illusory contract voided in Tabor. Rather than

exclude coverage if the renter is negligent,

Enterprise’s contract voids coverage if the renter is

merely “imprudent.” Negligence is at least a term

which defines a cognizable legal standard. But

imprudence is an imprecise and ambiguous term, is not

defined in the contract, and describes conduct which is

less blameworthy than negligence. Nullifying the CDW

when the renter is “imprudent” makes the protection

provided by the CDW even more illusory than voiding it

for negligence.

(Ind. 1997) (explaining that failure to comply withstate statute limiting exclusions on CDWs is “noquibble” and contractual provisions that voidedcoverage if vehicle was used “for any illegal purpose”“or in any abusive or reckless manner” wereunenforceable); Automobile Leasing & Rental, Inc. v.Thomas, 679 P.2d 1269 (Nev. 1984) (court rejectedlessor’s argument that because Thomas was making a leftturn from an improper position and received a citationfor doing so, the collision damage waiver was voided,noting that appropriate interpretive approach was theobjectively reasonable expectations of the insured.);Davis v. M.L.G. Corporation, 712 P.2d 985 (Col. 1986)(finding that provisions in collision damage waiverwhich significantly restricted coverage and which wereprinted on the back in small type were unconscionableand void, in part because inconsistent with consumer’sreasonable expectations.); Standard Mutual Ins. Co. v.General Casualty Cos., 171 Ill.App.3d 758, 763, 525N.E.2d 965, 968-89 (1st Dist. 1988) (rental policywhich invalidated coverage if renter used car “inviolation of law” effectively provided “no coverage atall” since renter would have most likely violated lawin situation where he would have needed the coverage.).

41

2. Enterprise’s Sweeping CDW Exclusions ContradictThe Reasonable Expectations Of Consumers

The broad, unfair limitations of Enterprise’s

contract are contrary to the reasonable expectations of

consumers. This, in and of itself, is a textbook

violation of c. 93A. See, e.g, Commonwealth v. DeCotis,

366 Mass. 234, 316 N.E. 2d 748 (1974) (charging fee

without providing correspondent benefit is unfair and

deceptive). As such, Enterprise’s overarching

exclusions are “deceptive, unfair, and unconscionable

because consumers expect that when they purchase CDW

that they have purchased insurance, which will protect

them even if they are negligent. This practice causes

substantial, unavoidable injury to consumers.” A.I-385.

Further exacerbating the unfair and deceptive

aspect of these exclusions is that they purport to

exclude coverage regardless of whether the “use

violation” in any way caused the damage. The NAAG

Report highlights this lack of causality as another

aspect of the unfair and deceptive effect of these

overly broad exclusions:

The CDW protection offered by some companiesbecomes void if a driver drinks any alcoholicbeverages in any quantity (regardless of thedegree, if any, of intoxication), takes anydrugs (even aspirin or a prescription drug thathas no effect on driving ability), or drives ina manner that the company deems to be even 1%negligent (for example, driving with wet shoeson a rainy day). Such exclusions may violatenot only state consumer protection statutesreflected in these guidelines, but specificstate statutory safeguards as well.

42

A.I-386.

3. Enterprise’s Illusory CDW Provisions Meet EveryAspect Of Chapter 93A’s Accepted Tests For DeceptionAnd Unfairness

Chapter 93A invokes an evolving legal standard,

designed to reach “as-yet-undevised business

practices.” Purity Supreme v. Attorney General, 380

Mass. 762, 771, 407 N.E.2d 297, 303 (1980); Wasserman

v. Agnastopolous, 22 Mass. App. Ct. 672 (l986). Conduct

is deceptive under c. 93A when the offending practices

have the “capacity or tendency or effect of deceiving

[consumers].” Slaney v. Westwood Auto, Inc., 366 Mass.

688, 703, 322 NE 2d 768, 778 (1975). Unfairness is

tested under the standard the Supreme Judicial Court

first enunciated in PMP Associates, Inc., v. Globe

Newspaper Co., 366 Mass. 593, 596, 321 NE 2d 915, 918

(1975): whether the challenged conduct is “within at

least the penumbra of some common law, statutory or

other established concept of unfairness, … is immoral,

unethical, oppressive [or] unscrupulous … [or] would

cause substantial injury to consumers …”. Deception

and unfairness are evolving concepts, tested by the

courts on a case by case basis. Arthur D. Little, Inc.,

v. Dooyang Corp., 147 F.2d 47, 55 (1st Cir. 1998).

Enterprise’s illusory CDW provisions are a relic of the

unregulated past of the car rental industry so

scathingly portrayed in the NAAG Report and expressly

addressed by legislation. These practices have been

43

universally denounced as unfair and deceptive by NAAG,

the courts, and legislators. The illusory protections

contained in Enterprise’s contract clearly have the

capacity or tendency or effect of deceiving consumers.

In addition, Enterprise’s contract easily meets

all three of the unfairness criteria the PMP decision

describes. First, it clearly “is within the penumbra of

a statutory established concept of unfairness,” in that

the CDW exclusions directly violate section 32E1/2. A.I-

406, ¶23. Second, the NAAG Report has defined the

practice of using overarching CDW exclusions as

unconscionable (A.I-386), a characterization which

certainly meets at least one of the second group of

criteria, “whether … immoral, unethical, oppressive or

unscrupulous…”. The Attorney General maintains that

such practices are oppressive or unconscionable as

well: “By using rental agreement forms which exclude

from the scope of the collision damage waiver acts or

causes of damage which are not excludable under G.L. c.

90, §32E1/2 defendants have committed unconscionable or

oppressive acts or practices.” A.I-411, ¶ 50. The

final criterion, “whether it causes substantial injury

to consumers,” is affirmatively answered by the

Attorney General: “Massachusetts consumers have been

and will continue to be harmed by defendants’ use of

rental agreements which do not conform to G.L. c. 90,

44

§32E1/2(C)(5).” A.I-406, ¶ 25. “This practice causes

substantial, unavoidable injury to consumers.” Id.,¶

50.

Enterprise offers, for a charge, apparent

protection from financial responsibility in the event

that a rental vehicle is damaged. At the same time,

Enterprise limits the circumstances under which the

protection would apply so narrowly that the coverage is

all but worthless. This practice is unfair and

deceptive by any measure. Enterprise, by the literal

terms of its contract, demonstrably violates the legal

requirements of fairness and full disclosure Chapter

93A contains.

The trial court committed clear error in ruling

that there is no right to relief under c. 93A for

violations of Section 32E1/2.

V. CONCLUSION

Because of the legal errors committed by the trial

court, the Appellants request that this Court reverse

the dismissal of both consolidated actions, and remand

the cases for determination on the merits.

Respectfully submitted,

John Roddy, BBO No. 424240Elizabeth Ryan, BBO No. 549632Grant Klein & Roddy727 Atlantic AvenueBoston, MA 02111

45

(617) 357-5500, ext. 16, 17

Of Counsel:John BlimJay EdelsonBlim & Edelson, LLC53 West Jackson BoulevardSuite 1642Chicago, IL 60604(312) 913-9400

Counsel forPlaintiffs/Appellants BarryHerhsenow and Dana Baumier

Edward F. Haber, BBO No. 215620 Christine E. Morin, BBO No. 600237 Todd S. Heyman, BBO No. 643804 Shapiro Haber & Urmy LLP 53 State Street Boston, MA 02109 (617) 439-3939 Lee M. Berger, BBO No. 038880 Berger & Markir, P.C. One Cohasset Avenue Buzzards Bay, MA 02532(508) 759-2133 Counsel for Plaintiffs/AppellantsScott Roberts

STATEMENT OF THE ISSUES PRESENTED FOR REVIEWI. WHETHER THE TRIAL COURT ERRED IN RULING THAT CII.WHETHER THE TRIAL COURT ERRED IN HOLDING THAT THE ENACTMENT OF SECTION 32E1/2 DEPRIVED CONSUMERS OF PREVIOUSLY RECOGNIZED CHAPTER 93A CLAIMS, WHICH EXIST INDEPENDENTLY OF THE PROSCRIPTIONS OF SECTION 32E1/2STATEMENT OF THE CASE AND PRIOR PROCEEDINGSSTATEMENT OF FACTS AND BACKGROUNDSUMMARY OF ARGUMENTARGUMENT

1. The Supreme Judicial Court Has Held Virtually Identical CDW Voiding Provisions To Be Illusory2. Enterprise’s Sweeping CDW Exclusions Contradic3. Enterprise’s Illusory CDW Provisions Meet Ever