Massachusetts Mutual Life Insurance Company v. DLJ Mortgage Capital, Inc., 3:11-cv-30047

MassMutual sued Credit Suisse alleging misstatements/omissions in RMBS offering documents under the Massachusetts Uniform Securities Act (MUSA), Mass. Gen. Laws ch. 110A § 410.
MassMutual purchased RMBS certificates that produced (1) declining principal repayments and (2) periodic interest (coupon) payments.
MUSA authorizes a successful plaintiff to “recover the consideration paid for the security, together with interest at six per cent per year from the date of payment, costs, and reasonable attorneys’ fees, less the amount of any income received on the security.”
The parties agreed principal repayments should reduce the purchase-price base for prejudgment interest; they disputed whether interest (coupon) payments should also be deducted before computing prejudgment interest.
Credit Suisse moved for partial summary judgment seeking (1) deduction of interest payments before calculating prejudgment interest and (2) substitution of a lower interest rate (risk-free or coupon rate) in place of the statutory 6%.
The court denied Credit Suisse’s motion, ruling that (a) interest payments are deducted only after prejudgment interest is calculated on the consideration paid, and (b) the statutory 6% rate governs.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether interest (coupon) payments received must be deducted before calculating prejudgment interest	Interest payments are “income received on the security” and per statute should be deducted after prejudgment interest is applied to the consideration paid	Interest payments should be deducted before calculating prejudgment interest to avoid awarding MassMutual a windfall for interim benefits	Court held interest payments are deducted after prejudgment interest; prejudgment interest is calculated on the consideration paid (purchase price) first
Whether court may apply a lower prejudgment interest rate instead of MUSA’s 6%	MUSA’s plain text requires 6%; applying it may produce overcompensation but statute controls	Court should use a lower, more appropriate rate (risk-free or coupon) to avoid windfall given current low-rate environment	Court held no basis to depart from statute’s 6%; judicial substitution of rate is improper and remedy lies with the legislature

Benoit v. Tech. Mfg. Corp., 331 F.3d 166 (1st Cir. 2003) (summary judgment standard and construing facts for nonmoving party)
Mendes v. Medtronic, Inc., 18 F.3d 13 (1st Cir. 1994) (burden on nonmoving party after movant shows no disputed material facts)
Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment burden-shifting principles)
Ret. Bd. of Stoneham v. Contributory Ret. Appeal Bd., 65 N.E.3d 650 (Mass. 2016) (statutory interpretation starts with plain language)
Commonwealth v. Soto, 68 N.E.3d 1133 (Mass. 2017) (enforce statute according to clear, ordinary meaning)
Ruiz v. Bally Total Fitness Holding Corp., 496 F.3d 1 (1st Cir. 2007) (courts must presume legislature says what it means)
Marram v. Kobrick Offshore Fund, Ltd., 809 N.E.2d 1017 (Mass. 2004) (statute’s remedial and preventive purposes in securities context)
Sterilite Corp. v. Continental Cas. Co., 494 N.E.2d 1008 (Mass. 1986) (discussing legislative history allowing departure from statutory rate in different statutory context)
Boam v. Trident Fin. Corp., 8 Cal. Rptr. 2d 177 (Cal. Ct. App. 1992) (statute as straightforward arithmetical formula: consideration + interest - income = recovery)