Home » LAW » Perry v Equity Residential Management (landlords cannot charge application, credit, amenity, move-in, pet or any other upfront fees except for First, Last, Security and Locks. But it is ok to charge a monthly pet fee.)

Perry v Equity Residential Management (landlords cannot charge application, credit, amenity, move-in, pet or any other upfront fees except for First, Last, Security and Locks. But it is ok to charge a monthly pet fee.)

My comment: This case was recently decided by a Federal Court for MA. It basically says what other cases have said that Landlords can ONLY change First Month, Last Month, Security Deposit equal to one month rent and a lock fee. They cannot charge anything else like application, credit, gym, amenity, move-in, pet fees, etc. The interesting thing about this case, however, is that it says that it is OK to charge a monthly pet fee (in other words, increase the rent a little because the tenant has a pet).

Clearly the courts are not allowing credit fees to be charged which is something that we, the Massachusetts Landlords, badly need. That statute needs to be clarified and credit fees to be allowed for reasons I have mentioned before so now it’s up to the Legislature to do something…which they won’t…as long as we have the current chairmen of the Housing Committee – sen. Eldridge and rep.Hoonan. Housing consists of two major players – landlords and tenants. These chairmen are not interested in talking to landlords, in my experience. I have met both of them and they do not want to engage in a real conversation. When I ask them where do they stand on the issues they do not want to say. How can you be a Chair of the Housing Committee and refuse to engage with one of the two players – the landlords is beyond my understanding.

 

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 12-10779-RWZ
BRIAN PERRY, KIM PERRY, and
CHERYL MILLER, on behalf of themselves
and all others similarly situated
v.
EQUITY RESIDENTIAL MANAGEMENT, L.L.C.
MEMORANDUM OF DECISION
August 26, 2014
ZOBEL, D.J.
Plaintiffs Brian Perry, Kim Perry, and Cheryl Miller, on behalf of themselves and
all others similarly situated, bring this action against defendant Equity Residential
Management, L.L.C., alleging that defendant violated the Massachusetts Security
Deposit Statute, Mass. Gen. L., ch. 186 § 15B(1)(b), by charging plaintiffs certain fees
at or before the commencement of their tenancies. Before me are defendant’s motion
to consolidate cases (Docket # 46), the parties’ cross-motions for summary judgment
(Docket ## 56, 69), and plaintiffs’ motion for class certification (Docket # 28).
I. Background
Brian and Kim Perry (“the Perrys”), who now reside in Illinois, lived at Longview
Place in Waltham, Massachusetts, from December 23, 2011, until approximately July
2012. From May 2, 2010, through approximately July 7, 2012, Cheryl Miller lived at 10
Case 1:12-cv-10779-RWZ Document 83 Filed 08/26/14 Page 1 of 22
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Emerson Place in Boston, Massachusetts. Defendant, a Delaware LLC with its
principal place of business in Illinois, manages and leases approximately 31 residential
apartment complexes in Massachusetts, including the two buildings in which plaintiffs
were tenants. All told, it leases approximately 6,680 apartments in the Commonwealth.
In Massachusetts,
[a]t or prior to the commencement of any tenancy, no lessor may require a
tenant or prospective tenant to pay any amount in excess of the following:
(i) rent for the first full month of occupancy; and,
(ii) rent for the last full month of occupancy calculated at the same
rate as the first month; and,
(iii) a security deposit equal to the first month’s rent . . . ; and,
(iv) the purchase and installation cost for a key and lock.
Mass. Gen. L. ch. 186 § 15B(1)(b). Plaintiffs contend that defendant violated this
statute by charging five mandatory, non-refundable fees at or prior to the
commencement of their tenancies:
1. Application Fee – $50 per person. The Perrys paid $100; Miller paid $50.
2. Amenity Fee – also called a “move-in fee.” The Perrys paid $350 (later
reduced to $99); Miller paid $500.
3. Community Fee – $500 per tenancy. Plaintiffs allege that this fee replaced the
“amenity fee.” Defendant, they say, charges the fee at the commencement of
the tenancy but does not collect the fee until after the first month of the tenancy.
Because they paid the amenity fee, its alleged predecessor, neither Miller nor
the Perrys paid the community fee.
4. Up-Front Pet Fee – pet owners pay a $250 up-front fee. Neither named
plaintiff paid this fee.
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1It is not altogether clear why the Perrys paid the monthly pet fee but not the up-front pet fee.
2Jurisdiction is proper under the Class Action Fairness Act, 28 U.S.C. § 1332(d), which confers to
the district courts original jurisdiction of any civil action in which the amount in controversy exceeds
$5,000,000 and any member of a class of plaintiffs is a citizen of a state different from that of any
defendant. Id. § 1332(d)(2)(A). Given the number of apartments and fees involved, there is a
“reasonable probability” that the value of plaintiffs’ claims exceeds $5,000,000. Amoche v. Guar. Trust
Life Ins. Co., 556 F.3d 41, 43 (1st Cir. 2009). And because most of the plaintiffs are Massachusetts
residents and defendant is a Delaware corporation with its principal place of business in Illinois, the
statute’s minimal diversity requirement is satisfied.
3Vincelette is itself four consolidated cases. The Suffolk County Superior Court consolidated
them before removal. No. 13-10710-RWZ, Docket # 2-9.
3
5. Monthly Pet Fee – pet owners pay $30 per month. The Perrys paid this fee.1
Plaintiffs say these fees are unlawful because they do not fit within any of the
statutorily permitted categories. They are not a security deposit, first or last month’s
rent, or reimbursement for the cost of a lock and key. Their five-count complaint
alleges that defendant has violated the Security Deposit Statute (Count I) and
Massachusetts General Laws chapter 93A (Count II). They also contend that
defendant has unjustly enriched itself (Count III) and seek a declaratory judgment that
defendant’s conduct is unlawful (Count IV) and an injunction ordering defendant to stop
charging fees to its Massachusetts residents (Count V).2
II. Motion to Consolidate (Docket # 46)
Defendant moves to consolidate this action with Vincelette v. Equity Residential
Management, L.L.C., No. 13-10710-RWZ, a removed action pending before me.3 It
states as support (1) Equity is the primary defendant in both actions; (2) both actions
allege violations of the Security Deposit Statute and chapter 93A; and (3) both actions
involve the same allegedly unlawful fees. Docket # 46 at 1-2. Plaintiffs in the present
action and in Vincellete each filed an opposition (Docket # 77, 78). First, they argue
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4The Vincelette plaintiffs erroneously state that “Vincelette is only concerned with a single
property, the South Winds Apartments in Fall River, Massachusetts.” Docket # 77 at 2. In fact, as the
Perry plaintiffs note, and as the record confirms, four separate properties are involved. Docket # 78 at 2;
see No. 13-10710-RWZ, Docket ## 2-1–2-4.
5Curiously, plaintiffs profess to need more time for discovery, but oppose defendants’ motion for
an extension of time to respond to plaintiffs’ motion for class certification in Vincelette (No. 13-10710-
RWZ, Docket # 29) on the ground that no further discovery is necessary at this time.
6Although Rule 42(a) only requires commonality of facts or law, McAuto adds commonality of
party to the threshold inquiry. McAuto, 878 F.3d at 8. That additional requirement is satisfied here
because Equity is a common defendant.
4
that although Equity is a common defendant, the Vincelette plaintiffs also sued the
owner of each of the four individual properties in which the plaintiffs lived.4 Docket # 78
at 1-2. Second, they claim that the present action is procedurally more advanced than
Vincelette, in which little discovery has taken place.5 Id.; Docket # 77 at 2. It makes
little sense, they urge, to consolidate actions with uncommon defendants and in distinct
procedural stations.
I may consolidate actions if they involve a common question of law or fact. Fed.
R. Civ. P. 42(a)(2). This is a threshold issue. Seguro de Servicio de Salud de P.R. v.
McAuto Sys. Grp., Inc., 878 F.2d 5, 8 (1st Cir. 1989).6 If the party seeking
consolidation passes this first test, I have “broad discretion in weighing the costs and
benefits of consolidation to decide whether that procedure is appropriate.” Id. When
doing so, I should consider “the convenience or inconvenience to the parties, the
judicial economy, the savings in time, effort or expense and any confusion, delay or
prejudice that might result from consolidation.” Gilliam v. Fid. Mgmt. & Research Co.,
No. Civ. A 04-11600NG, 2005 WL 1288105, at *1 (D. Mass. May 3, 2005) (internal
quotation and citation omitted).
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7Only the parties in Perry cross-move for summary judgment. Because the cases are
consolidated, however, this memorandum of decision applies to Vincelette as well.
5
Common factual and legal questions exist. The suits allege violation of the
same statutes by the same means—charging unlawful fees. The fees themselves are
the same. These commonalities easily satisfy the threshold inquiry. The balancing
factors point in the same direction. The substantial overlap between the cases makes
consolidation more economical and expedient. And there is little reason to think that
the purported procedural lag in Vincelette is significant. As the cross-motions for
summary judgment make plain, these cases turn on a statutory interpretation question:
whether the fees violate the Security Deposit Statute. It is not altogether clear what
discovery the parties need in these circumstances, so much so that neither party
bothers to spell it out. Consolidation offers substantial benefits and no intelligible
drawbacks. The motion is allowed.
III. Cross-Motions for Summary Judgment (Docket ## 56, 69)7
A. Legal Standard
Summary judgment is appropriate “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of
law.” Fed. R. Civ. P. 56(a). I must view the record in the light most favorable to the
nonmovant and draw all justifiable inferences in that party’s favor. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986). If the evidence presented would allow a
reasonable jury to return a verdict for the nonmovant, summary judgment must be
denied. Id. at 248. When the parties cross-move for summary judgment, I apply the
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8I do not agree with defendant’s claim that Judge Young merely accepted the parties’ stipulation
that section 15B(1)(b) was unambiguous in Hermida. Def.’s Mem. in Opp. to Pls.’ Cross-Mot. for Summ.
J., Docket # 73, at 4-5. Courts do not take the law by stipulation of the parties. Estate of Sanford v.
Comm’r, 308 U.S. 39, 51 (1939); United States v. Teeter, 257 F.3d 14, 28 (1st Cir. 2001). A fair reading
of Hermida demonstrates that Judge Young analyzed the statute and concluded it was unambiguous.
826 F. Supp. 2d at 384.
6
same standard to each motion. Atl. Fish Spotters Ass’n v. Evans, 321 F.3d 220, 224
(1st Cir. 2003).
B. Violation of the Security Deposit Statute, Mass. Gen. L. ch. 186 §
15B(1)(b) (Count I)
1. Language of Section 15B(1)(b)
The main issue in this case is whether section 15B(1)(b)’s language allows a
landlord to require that tenants pay up-front fees other than the four statutorily
permitted charges. The parties offer competing interpretations of the statute. Plaintiffs
contend that section 15B(1)(b) just lists the permissible charges; any charge not on the
list is prohibited. Defendant responds that the statute’s legislative history demonstrates
its ambiguity.
I am not the first to consider this matter. Two of my colleagues have held that
the language of section 15B(1)(b) is unambiguous. Gardner v. Simpson Fin. Ltd.
P’ship, No. 09-11806-FDS, 2012 WL 1109104, at *8 (D. Mass. Mar. 30, 2012) (Saylor,
J.); Hermida v. Archstone, 826 F. Supp. 2d 380, 384 (D. Mass. 2011) (Young, J.).8 I
join them. Giving the statute’s words their ordinary meaning “consonant with sound
reason and common sense,” Harvard Crimson, Inc. v. President & Fellows of Harvard
College, 840 N.E.2d 518, 522 (Mass. 2006), section 15B(1)(b) simply is not susceptible
of more than one reasonable construction. The statute is a list. If a fee is on the list
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then it is a permissible up-front charge; if it is not on the list, then it is impermissible.
For this reason, I need not—and indeed, may not—indulge defendant’s spirited
recitation of the statute’s history. See Pyle v. Sch. Comm., 667 N.E.2d 869, 871-72
(Mass. 1996); New Eng. Med. Ctr. Hosp., Inc. v. Comm’r, 412 N.E.2d 351, 352 (Mass.
1980) (“[W]here the language of a statute is plain and unambiguous, legislative history
is not ordinarily a proper source of construction.”).
Defendant conjures ambiguity in the statute in several ways. Each is
unconvincing. First, defendant asserts that the statute fails to define key terms, like
“rent.” Def.’s Mem. in Supp. of Cross-Mot. for Summ. J., Docket # 57, at 5. “Rent,”
though, has an ordinary meaning, which I am bound to accept and apply. See Hashimi
v. Kalil, 446 N.E.2d 1387, 1389 (Mass. 1983). Second, defendant reads the statute’s
“in excess of” language to set forth a total amount of up-front charges. Mem. in Supp.
at 4. No matter whether the charges fit within the statutorily permitted categories, a
landlord may not require that a tenant pay more than the sum of first month’s rent, last
month’s rent, a security deposit equal to one month’s rent, and the cost of a lock and
key before his or her tenancy begins. Id. Judge Young rejected that interpretation in
Hermida. 826 F. Supp. 2d at 386-87. Defendant does not identify any flaws in his
reasoning, and neither do I. Finally, defendant maintains that a plain reading of the
statute is incompatible with the fundamental principle of freedom of contract between
landlord and tenant. Mem. in Supp. at 7, 10. True enough. In fact, section 15B
recognizes that landlord and tenant are often in unequal negotiating positions and
seeks to level the playing field. Hermida, 826 F. Supp. 2d at 386 (“The major
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9Defendant’s argument that the fee is used to offset costs, “such as marketing, lease preparation,
communications with prospective tenants, and decorating,” Mem. in Supp. at 12, is of no consequence.
The fact that Miller paid a move-in fee in her current apartment, which defendant does not manage, is
irrelevant as well.
8
legislative concern . . . has been for the tenant.”); Goes v. Feldman, 391 N.E.2d 943,
947 (Mass. App. Ct. 1979) (“By limiting the freedom of landlords and tenants to contract
in this regard, the Legislature manifested a concern for the welfare of tenants in
residential property who, as a practical matter, are generally in inferior bargaining
positions . . . .”). Defendant’s argument contradicts the express purpose of the
Legislature.
Having established that the statute creates categories of permissible charges, I
must now decide whether the fees defendant charged plaintiffs fit within them.
2. Defendant’s Fees
a. Application Fee
Two Commonwealth courts have concluded that section 15B(1)(b) does not
authorize landlords to charge prospective tenants an application fee. See Dolben Co.
v. Friedmann, No. 10034, 2008 WL 81549, at *4 (Mass. App. Div. Jan. 2, 2008); Broad
St. Assocs. v. Levine, No. 12-SP-2041 (Northeast Housing Ct. July 30, 2011). I agree.
b. Amenity Fee/Move-in Fee
The amenity fee, at times called a move-in fee, is indistinguishable from the
“amenity use fee” Judge Young found unlawful in Hermida. It is not on the list of
permissible charges; it is therefore prohibited.9
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10Defendant submits that neither the Perrys nor Miller paid the community fee or the up-front pet
fee, they lack standing to bring these claims on behalf of a class. It also contends that plaintiffs lack
standing because they never sent a chapter 93A demand letter to defendant regarding these two fees.
Like defendant, I address these related standing arguments infra in the class certification analysis.
11Defendant analogizes the up-front pet fee to insurance premiums, which Judge Saylor
concluded a landlord could charge a tenant up front despite the absence of insurance on the section
15B(1)(b) list. Gardner, 2012 WL 1109104, at *8. Gardner is readily distinguishable. As Judge Saylor
recognized, a landlord may require a tenant to obtain liability insurance consistent with Massachusetts
law. Id. (citing Peterson v. Silva, 704 N.E.2d 1163, 1165-66 (Mass. 1999)). “It would elevate form over
function” to prohibit landlords from conveniencing tenants by offering them an otherwise legally required
product at the outset of their tenancies. Id.
12I acknowledge that the Northeast Housing Court concluded a monthly pet fee violates section
15B(1)(b) in Levine, No. 12-SP-2041 (Docket # 70-1). I respectfully disagree with its conclusion.
9
c. Community Fee10
Defendant argues the community fee is lawful because it does not collect the fee
until the second month of tenants’ occupancy. Mem. in Supp. at 15. But the statute
prohibits landlords from “requir[ing] a tenant or prospective tenant to pay” unlisted fees.
That is just what defendant does when it charges the fee before a tenant moves in.
Deferring collection does not make an unlawful fee lawful.
d. Up-Front Pet Fee
Like the others, the up-front pet fee is not among the permissible charges. It is
therefore prohibited.11
e. Monthly Pet Fee
The monthly pet fee is not incurred up front, but rather each month during which
the tenant owns a pet. Because plaintiffs became obligated to pay the fee after they
were already tenants, they may not turn to section 15B(1)(b) for relief.12
f. Summary
Plaintiffs’ motion for summary judgment on Count I is allowed in all respects
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13The Amended Class Action Complaint refers to defendant as the “operat[or], manag[er], and
[lessor]” of the units in question. Am. Class Action Compl. ¶ 4. Defendant still falls within the ambit of
the regulation, however, because it includes as an owner “one who manages, controls, and/or
customarily accepts rent on behalf of the owner.” 940 C.M.R. § 3.01.
10
save for the monthly pet fee.
C. Violation of Chapter 93A (Count II)
Massachusetts General Laws chapter 93A section 2(a) makes unlawful “[u]nfair
methods of competition and unfair or deceptive acts or practices in the conduct of any
trade or commerce.” The attorney general may make rules and regulations to interpret
section 2(a)’s dictates, id. § 2(c), and it has done so as relevant here:
It shall be an unfair or deceptive practice for an owner[13] to:
(a) require a tenant or prospective tenant, at or prior to the
commencement of any tenancy, to pay any amount in excess of the
following:
1. rent for the first full month of occupancy; and
2. rent for the last full month of occupancy calculated at the same
rate as the first month; and
3. a security deposit equal to the first month’s rent; and,
4. the purchase and installation cost for a key and lock.
940 C.M.R. § 3.17(4)(a). The statute and the implementing regulation are coextensive,
so a violation of section 15B(1)(b) is a violation of chapter 93A. Hermida,
826 F. Supp. 2d at 387; Friedmann, 2008 WL 81549 at *4; Flatte v. Carifio, No. 9405,
1997 WL 342250, at *2 (Mass. App. Div. June 12, 1997). I have established that
defendant has violated section 15B(1)(b) as to four of the five challenged fees.
Therefore, it has engaged in an unfair and deceptive practice to the same extent.
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14By awarding plaintiffs summary judgment on Counts I and II, I have, in essence, declared that
defendant’s fee-charging practices are unlawful. Consequently, there is no need for me to award a
separate declaratory judgment (Count IV). I also note that like an injunction, a declaratory judgment is
not a cause of action, as plaintiffs pleaded it, but a form of relief. Schwartz v. CACH, LLC, No. 13-
12644-FDS, 2013 WL 6152343, at *2 (D. Mass. Nov. 21, 2013) (citing Madden v. State Tax Comm’n,
133 N.E.2d 252, 254 (Mass. 1956)).
11
Plaintiffs are entitled to summary judgment on Count II.
D. Unjust Enrichment (Count III)
A claim of unjust enrichment is unavailable when a party has an adequate
remedy at law. Ben Elfman & Sons, Inc. v. Criterion Mills, Inc., 774 F. Supp. 683, 687
(D. Mass. 1991). Plaintiffs’ 93A claim provides such a remedy and therefore precludes
their claim for unjust enrichment. Fernandes v. Havkin, 731 F. Supp. 2d 103, 114 (D.
Mass. 2010).
E. Injunction (Count V)14
Plaintiffs seek an injunction “compelling ERM to cease and desist from charging
Fees to its Massachusetts tenants.” Am. Class Action Compl. ¶ 73. Typically,
injunctive relief is only available when plaintiff can demonstrate, inter alia, irreparable
harm. Winter v. Natural Resources Def. Council, Inc., 555 U.S. 7, 20 (2008)
(preliminary injunction); eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006)
(permanent injunction). A harm is irreparable only if no adequate legal remedy exists.
Foxboro Co. v. Arabian Am. Oil Co., 805 F.2d 34, 36 (1st Cir. 1986) (“We do not find
irreparable injury where only money is at stake . . . .”). Here, plaintiffs lost only money.
The harms they suffered are adequately quantifiable and compensable at law. There is
no irreparable harm in absence of injunctive relief. The motion for an injunction is
denied.
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15Plaintiffs moved to certify a class in both Perry and Vincelette. Equity filed an opposition in
Perry; its opposition in Vincelette is not yet due. Because the cases are consolidated and legally
indistinguishable, there is no reason to think Equity will oppose in Vincelette on different grounds than it
does in Perry. Therefore, I need not wait to decide plaintiffs’ class certification motion.
12
IV. Motion for Class Certification (Docket # 28)15
A. Standing
“The doctrine of standing . . . requires federal courts to satisfy themselves that
the plaintiff has alleged such a personal stake in the outcome of the controversy as to
warrant his invocation of federal court jurisdiction.” Summers v. Earth Island Inst., 555
U.S. 488, 493 (2009) (internal quotation and citation omitted; emphasis removed). In
the class action context, “[a] litigant must be a member of the class which he seeks to
represent.” Sosna v. Iowa, 419 U.S. 393, 403 (1975); Bailey v. Patterson, 369 U.S. 31,
32-33 (1962). Neither the Perrys nor Miller paid the community fee or the up-front pet
fee. This is fatal to their claims for relief, says defendant, because they lack standing
to represent a class of tenants who paid those fees. Mem. in Opp. to Pls.’ Mot. for
Class Cert., Docket # 59, at 9-10. Plaintiffs counter that this basic principle is not an
impediment because “[t]he community fee is simply a re-styled, re-labeled move-in fee
or amenity fee, collected at a later time.” Reply Mem. in Supp. of Mot. for Class Cert.,
Docket # 67, at 14. In other words, the Perrys and Miller paid the move-in/amenity fee,
which is identical to the community fee, and they are therefore members of the class
they seek to represent.
A glance at defendant’s internal emails shows that this is correct:
! “The [non-refundable move-in fee] will be pushed into the second month.
We will not collect at move in. But we will collect during the second
month.” Docket # 71-5 (Email from Equity employee Tom Lebling to
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16For this same reason, defendant’s argument that plaintiffs failed to send defendant a chapter
93A demand letter with respect to the community fee is without merit. The record makes clear that Miller
and the Perrys sent defendant a chapter 93A demand letter regarding the move-in/amenity fee. Docket
# 58-14.
13
Equity’s Vice President of Revenue Management Dave Romano).
! “We will have to stop collecting our [non-refundable move-in fee] in MA.
Actually, we will be pushing the fee collection into the second full month.
So, we will have one month of zero fees during this change.” Docket #
71–6 (Email from Lebling to Equity’s Financial Services Director Martha
Sharrock).
! “We are finalizing the details that will allow us to collect an
amenity/common area fee at the beginning of their second full month of
residency.” Docket # 71-8 (Email from Equity employee Lynn Bora).
Simply put, defendant intended to replace the move-in/amenity fee with the community
fee. The fees are one and the same. Plaintiffs have demonstrated the required
personal stake in the outcome of the litigation to confer standing on them to represent
community fee-paying tenants.16 See Summers, 555 U.S. at 493.
The same cannot be said for the up-front pet fee. The Perrys and Miller did not
pay the up-front fee, and I have already established section 15B(1)(b) does not permit
recovery of monthly pet fees. Accordingly, neither party may represent a class of upfront
pet fee payers. Sosna, 419 U.S. at 403. But two of the named plaintiffs in the
now-consolidated Vincelette action did pay the up-front pet fee. No. 13-10710-RWZ,
Docket # 2-1 at ¶ 46 (Vincelette Complaint); id. # 2-2 at ¶ 47 (Barnes Complaint).
Accordingly, they may represent a class of like payers.
B. Legal Standard
The party seeking class certification must show that
(1) the class is so numerous that joinder of all members is impracticable;
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(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the
claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the
interests of the class.
Fed. R. Civ. P. 23(a). These four requirements are known as numerosity, commonality,
typicality, and adequacy. See Smilow v. Sw. Bell Mobile Sys., Inc., 323 F.3d 32, 38
(1st Cir. 2003). I “must conduct a rigorous analysis of the prerequisites established by
Rule 23 before certifying a class.” Id.; see Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct.
2541, 2551 (2011) (“A party seeking class certification must affirmatively demonstrate
his compliance with the Rule—that is, he must be prepared to prove that there are in
fact sufficiently numerous parties, common questions of law or fact, etc.”).
The party seeking class certification must also satisfy one of the three parts of
Rule 23(b). Plaintiffs seek certification under Rule 23(b)(3), which authorizes a class
action where “the questions of law or fact common to class members predominate over
any questions affecting only individual members, and that a class action is superior to
other available methods for fairly and efficiently adjudicating the controversy.” Fed. R.
Civ. P. 23(b)(3).
C. Subclasses
“When appropriate, a class may be divided into subclasses that are each treated
as a class.” Id. 23(c)(5). “Subclasses must be created when differences in the
positions of class members require separate representations and separate counsel.”
Federal Judicial Center, Manual for Complex Litigation, Fourth § 21.23 (2004). The
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Rule is designed to provide courts with additional flexibility to manage class actions.
7AA Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1790 (3d
ed. 1998). I may create subclasses on my own initiative. Id.
Subclasses make sense here. Assuming that the community fee is a clone of
the move-in/amenity fee, there are three separate fees involved. Not every tenant has
paid every fee (especially the up-front pet fee), and so subclasses will facilitate easier
organization of the class members according to their fee-paying history. See id.
(stating subclasses may help make the case more manageable, which is relevant to the
superiority analysis under Rule 23(b)(3)); 8 Alba Conte & Herbert Newberg, Newberg
on Class Actions § 24:24 (“Bifurcation or the creation of subclasses may circumvent
commonality problems.”). Accordingly, I divide the proposed global class into three
subclasses, one for each fee involved.
Each subclass must meet the requirements of Rule 23 to maintain a class action,
Riva v. Ashland, Inc., No. 09-12074-DJC, 2011 WL 6202888, at *12 (D. Mass. Dec. 13,
2011), but as seen below, the analysis does not differ greatly among the subclasses.
D. Rule 23(a) Requirements
Defendant concedes that plaintiffs have satisfied each of the Rule 23(a)
requirements and instead disputes only the superiority requirement of Rule 23(b)(3).
Mem. in Opp. at 6-9. I nevertheless undertake the “rigorous analysis” that must
precede certification. Smilow, 323 F.3d at 38. That analysis proves to be quite
straightforward.
1. Numerosity
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The numerosity requirement of Rule 23(a) is satisfied when the class is “so
numerous that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1). I “may
draw reasonable inferences from the facts presented to find the requisite numerosity.”
McCuin v. Sec’y of Health & Human Servs., 817 F.2d 161, 167 (1st Cir. 1987).
Defendant operates approximately 6,680 apartment units in the Commonwealth.
Docket # 30-1. I can reasonably infer from this figure that the parties are too numerous
to make joinder practicable. Plaintiffs have satisfied the numerosity prerequisite.
2. Commonality and Typicality
To show commonality, plaintiffs must demonstrate that “there are questions of
law or fact common to the class.” Fed. R. Civ. P. 23(a)(2). This “‘low hurdle’” is met if
there is “even a single common legal or factual issue.” In re Evergreen Ultra Short
Opportunities Fund Sec. Litig., 275 F.R.D. 382, 388 (D. Mass. 2011) (quoting Swack v.
Credit Suisse First Bos., 230 F.R.D. 250, 259 (D. Mass. 2005)). Typicality requires that
“the claims or defenses of the representative parties are typical of the claims or
defenses of the class.” Fed. R. Civ. P. 23(a)(3). The requirement “‘is satisfied when
the [named] plaintiff’s injuries arise from the same events or course of conduct as do
the injuries that form the basis of the class claims, and when the plaintiff’s claims and
those of the class are based on the same legal theory.’” Swack, 230 F.R.D. at 260
(quoting Guckenberger v. Bos. Univ., 957 F. Supp. 306, 325 (D. Mass. 1997)). These
prerequisites are doubtless satisfied here because there are almost no individual
issues whatsoever. The members of each subclass paid the same fee and allege
violation of the same laws.
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17
3. Adequacy
The adequacy prerequisite requires that “the representative parties will fairly and
adequately protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). This involves a
two-part test: “[t]he moving party must show first that the interests of the representative
party will not conflict with the interests of the class members, and second, that counsel
chosen by the representative party is qualified, experienced and able to vigorously
conduct the proposed litigation.” Andrews v. Bechtel Power Corp., 780 F.2d 124, 130
(1st Cir. 1985). No conflicts of interest are apparent here. Plaintiffs’ counsel are
qualified and experienced. See Docket ## 30-4, 30-5. The adequacy prong is met.
E. Rule 23(b) Requirements
1. Predominance
To demonstrate predominance, plaintiffs must show that “questions of law or
fact common to class members predominate over any questions affecting only
individual members.” Fed. R. Civ. P. 23(b)(3). There is no mechanical, single-issue
test for predominance. Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 296 (1st
Cir. 2000). The key inquiry is whether the “proposed classes are sufficiently cohesive
to warrant adjudication by representation.” Amchem Prods., Inc. v. Windsor, 521 U.S.
591, 623 (1997). There must be “a sufficient constellation of common issues [to] bind[]
class members together.” Mowbray, 208 F.3d at 296.
As is now clear from my discussion of the Rule 23(a) factors, the facts and law
underlying the subclass members’ claims are identical. The only remaining source of
potential individual issues is damages. But differing damages among class members
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18
does not defeat predominance. Smilow, 323 F.3d at 40 (“Where, as here, common
question predominate regarding liability, then courts generally find the predominance
requirement to be satisfied even if individual damages issues remain.”). Common
issues predominate.
2. Superiority
Defendant stakes its claim on the superiority prong, which requires that a class
action be “superior to other available methods for fairly and effectively adjudicating the
controversy.” Fed. R. Civ. P. 23(b)(3). A core purpose of Rule 23(b)(3) is to provide
plaintiffs with “negative value” claims, or claims whose value is too small to litigate
individually, with a means of redress. Amchem, 521 U.S. at 617 (quotations and
citations omitted); Smilow, 323 F.3d at 42. This case perfectly effectuates that
purpose, say plaintiffs. Pls.’ Mem. in Supp. of Mot. for Class Cert., Docket # 29, at 12.
The fees tenants paid and would seek to recover do not outprice litigation costs enough
to encourage individual suits. Id. And indeed, to plaintiffs’ knowledge, nobody has
filed suit individually.
Defendant believes plaintiffs undervalue their claims. It points to the
attractiveness of the Massachusetts Housing Court as a venue for individual claim
resolution. Mem. in Opp. at 6-7. Because of its low filing fees and speedy resolution of
claims, the Housing Court keeps litigation costs down. Id. Add to that the treble
damage and fee-shifting provisions of chapter 93A and the claim valuation is not so
lopsided in favor of class treatment. Id. 7-8 (citing Mass. Gen. L. ch. 93A § 9).
I am not persuaded. For one thing, the Housing Court is simply not available in
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17To calculate this figure, I compared the list of properties defendant manages, Docket # 30-1,
with the list of counties over which the Housing Court has jurisdiction.
19
many parts of the Commonwealth. Note its website:
The Housing Court does not have jurisdiction to hear cases from the
following locations: all of Barnstable, Dukes, and Nantucket counties;
Norfolk County (except the Town of Bellingham); Suffolk County (except
the City of Boston); and several cities and towns in the southern and
eastern portions of Middlesex County (such as Cambridge, Framingham,
and Somerville). The District Court covers these locations . . . .
Housing Courts by County,
http://www.mass.gov/courts/court-info/trial-court/hc/hc-by-county-gen.html (last visited
August 14, 2014). Seventeen of the thirty-one, or fifty-five percent, of the properties
defendant manages are outside of covered areas.17 Needless to say, it is no solution to
suggest that plaintiffs seek redress in a court which lacks jurisdiction over their claims.
Moreover, defendant’s argument, if true, comes at great expense of judicial
resource. Piecemeal adjudication of individual suits wastes time. Swack, 230 F.R.D. at
273. Combine this inefficiency with the lack of Housing Court jurisdiction and the
inadequacy of individual litigation is clear. As I recently explained, “[d]efendant loses
either way: if the proposed class members would press their claims, one class action is
superior to many individual actions, and if they would not, class action adjudication is
superior to no adjudication.” Sparkle Hill, Inc. v. Interstate Mat Corp., No. 11-10271-
RWZ, 2012 WL 6589258, at *4 (D. Mass. Dec. 18, 2012). There is no doubt that a
class action is a superior way to adjudicate this dispute.
F. Subclass Periods
The statute of limitations period for actions alleging violation of chapter 93A or
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18The following subclasses pertain only to defendant Equity Residential Management, LLC. If
necessary, I shall address the claims against the four other named defendants in Vincelette later.
20
chapter 186 section 15B is four years. Mass. Gen. L. ch. 260 § 5A. The Perrys filed
their Class Action Complaint on May 1, 2012. Docket # 1. The Class Action Complaint
alleged that only the move-in/amenity fee was unlawful. Working back four years from
this date, the parties agree that the period for the move-in/amenity/community fee
subclass begins on May 1, 2008. See Mem. in Opp. at 13. Plaintiffs filed the
Consolidated and Amended Class Action Complaint on February 19, 2013. Docket #
41. Using the same statute of limitations, the parties further agree that the period for
the application fee and up-front pet fee subclasses begins on February 19, 2009.
Mem. in Supp. at 15; Mem. in Opp. at 13.
The disagreement centers on the proper end date of the subclass periods.
Defendant proposes that the move-in/amenity fee period end on February 28, 2012,
and the application fee period end on September 27, 2013, because defendant stopped
charging the respective fees on those dates. Mem. in Opp. at 12-13. If that is true,
then defendant has no cause to worry because no plaintiff will have a claim during the
time when defendant had discontinued charging fees. Defendant’s proposed end date
is unnecessary.
G. Subclasses and Subclass Counsel
I certify three subclasses,18 defined as follows:
! Subclass 1: All current and former tenants or prospective tenants at
residential apartment units operated and/or managed by Equity
Residential Management in the Commonwealth of Massachusetts who, at
or prior to the commencement of his or her tenancy, paid an application
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21
fee between February 19, 2009 and the date of judgment. The following
individuals are appointed as subclass representatives: Brian Perry, Kim
Perry, Cheryl Miller, Marianna Vincelette, Richard Vincelette, Joseph
Barnes, Colin Appleton, Rhett Kleinschmidt, and Brittany Franco.
! Subclass 2: All current and former tenants or prospective tenants at
residential apartment units operated and/or managed by Equity
Residential Management in the Commonwealth of Massachusetts who, at
or prior to the commencement of his or her tenancy, paid an amenity fee,
move-in fee, or community fee, between May 1, 2008 and the date of
judgment. The following individuals are appointed as subclass
representatives: Brian Perry, Kim Perry, Cheryl Miller, Marianna
Vincelette, Richard Vincelette, Joseph Barnes, Colin Appleton, Rhett
Kleinschmidt, and Brittany Franco.
! Subclass 3: All current and former tenants or prospective tenants at
residential apartment units operated and/or managed by Equity
Residential Management in the Commonwealth of Massachusetts who, at
or prior to the commencement of his or her tenancy, paid an up-front pet
fee between February 19, 2009 and the date of judgment. The following
individuals are appointed as subclass representatives: Marianna
Vincelette, Richard Vincelette, and Joseph Barnes.
I appoint Matthew J. Fogelman of Fogelman & Fogelman LLC, David Pastor of Pastor
Law Office LLP, Preston W. Leonard of Leonard Law Office, PC, and Julie Schreiner-
Oldham, Kevin T. Peters, and Michael Brier of Arrowood Peters, LLP, as counsel for
each subclass. I shall address the division among counsel of any recovered attorneys’
fees later. See Fed. R. Civ. P. 23(g)(1)(E) (stating court may make further orders in
connection with appointment of class counsel).
V. Conclusion
Defendant’s motion to consolidate cases (Docket # 46) is ALLOWED. Plaintiffs’
cross-motion for summary judgment (Docket # 69) is ALLOWED as to Counts I and II in
all respects save for the monthly pet fee and DENIED in all other respects.
Defendant’s cross-motion for summary judgment (Docket # 56) is DENIED. Plaintiffs’
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22
motion for class certification (Docket # 28) is ALLOWED.
Liability now clear, only calculation of damages remains. Before they embark on
this potentially burdensome undertaking, the parties may wish to discuss a mutually
agreeable resolution of this matter.
The court has scheduled a status conference for September 30, 2014, at 2:00
p.m.
August 26, 2014 /s/Rya W. Zobel
DATE RYA W. ZOBEL
UNITED STATES DISTRICT JUDGE
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