TRISTAN SQUERI, individuаlly and on behalf of all others similarly situated; MADELINE MCCLAIN, individually and on behalf of all others similarly situated; GEORGE O‘DEA, individually and on behalf of all others similarly situated, Plaintiffs, Appellants, v. MOUNT IDA COLLEGE; THE MOUNT IDA COLLEGE BOARD OF TRUSTEES; CARMIN C. REISS, individually and as a representative of Mount Ida College Board of Trustees; BARRY BROWN, individually and as a representative of Mount Ida College; JEFF CUTTING, individually and as a representative of Mount Ida College; RON AKIE, individually and as a representative of Mount Ida College; JASON POTTS, individually and as a representative of Mount Ida College, Defendants, Appellees.
No. 19-1624
United States Court of Appeals For the First Circuit
March 25, 2020
Lynch, Stahl, and Kayatta, Circuit Judges.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS [Hon. Richard G. Stearns, U.S. District Judge]
Joshua N. Garick, with whom Law Offices of Joshua N. Garick, P.C., Andra Hutchins, and Kerstein, Coren & Lichtenstein LLP were on brief, for Tristan Squeri, Madeline McClain, and George O‘Dea.
Alice W. Yao and Daniel A. Zibel on brief for the National Student Legal Defense Network, amicus curiae.
Katherine D. Shea and Pyle Rome Ehrenberg PC on brief for SEIU Local 509 and SEIU Local 888, amici curiae.
Thomas R. Murphy and Law Offices of Thomas R. Murphy, LLC on brief for the Hildreth Institute, amicus curiae.
Jeremy Sternberg, with whom Paul G. Lannon, Jr., John Monaghan, Christopher M. Iaquinto, and Holland & Knight LLP were on brief, for Mount Ida College, the Mount Ida College Board of Trustees, Carmin C. Reiss, Jeff Cutting, and Ron Akie.
Elizabeth E. Olien, with whom Howard M. Cooper and Todd & Weld LLP were on brief, for Barry Brown.
Tamsin R. Kaplan, with whom Emily P. Crowley and Davis, Malm & D‘Agostine, P.C. were on brief, for Jason Potts.
Ben Robbins and Martin J. Newhouse on brief for the New England Legal Foundation, amicus curiae.
Students Tristan Squeri and George O‘Dea, and expected student Madeline McClain, brought a putative class action under Massachusetts law against Mount Ida, its Board of Trustees, and five Mount Ida administrators: President Barry Brown; Chairwoman of the Board of Trustees Carmin Reiss; Vice President, CFO, and Treasurer Jason Potts; Dean of Admissions and Vice President of Enrollment Management Jeff Cutting; and Chief Academic Officer and Provost Ron Akie.
Underlying all the claims were allegations that the defendants knew that Mount Ida was on the brink of insolvency but concealed this information, instead assuring current and prospective students that Mount Ida was financially stable. The suit brought seven Massachusetts state law claims: breach of fiduciary duty, violation of privacy, fraud, negligent misrеpresentation, fraud in the inducement, breach of contract, and violation of
I.
A. Facts
We recite the facts as alleged in the plaintiffs’ complaint, accepting all well-pleaded facts as true and drawing all reasonable inferences in favor of the non-moving party. Penate v. Hanchett, 944 F.3d 358, 362 (1st Cir. 2019). On a motion to dismiss, we may also consider “documents incorporated by reference in [the complaint], matters of public record, and other matters susceptible to judicial notice.” Lydon v. Local 103, Int‘l. Bhd. of Elec. Workers, 770 F.3d 48, 53 (1st Cir. 2014) (alteration in original) (quoting Giragosian v. Ryan, 547 F.3d 59, 65 (1st Cir. 2008)).
Mount Ida was established in 1899, enrolled in 2017 about 1300 students, and granted four-year bachelor‘s degrees as well as associate degrees and master‘s degrees. As early as 2014, Mount Ida was in “financial distress” and “teetering on insolvency.” The defendants were aware of Mount Ida‘s financial position but did not give direct notice of this to current or prospective students.
Mount Ida filed annual audited financial statements with the Massachusetts Attorney General‘s Office (AGO), as it was required to do by Massachusetts law. See
In August 2017, Mоunt Ida submitted an Institutional Self-Study to the New England Association of Schools and Colleges (NEASC), its regional accreditation agency which is recognized by the Department of Education under federal law. See
The financial resources section of the document further stated that “[f]rom June 30, 2012 through June 30, 2016, operating revenues have increased from $35.8 million to $41.7 million while operating expenses have increased from $35.3 million to $43.2 milliоn.” The report forecasted that Mount Ida would continue to operate at a deficit until 2021, stating that “[b]ecause of many years of deferral of physical maintenance, low enrollment and failure of program expansion, the College‘s existing economic model does not anticipate a surplus from core operations until FY 2021.”
On February 24, 2018, President Brown announced via email a possible merger between Mount Ida and Lasell College to the student body. The email stated that the purpose of the merger “would be to create a more robust learning experience that would take advantage of the distinctiveness of the programs, curricula and experiences of each institution.” The email did not mention “that Mount Ida was in financial distress, that it was teetering on insolvency, or that it was seriously contemplating bankruptcy.”
On March 23, 2018, President Brown emailed the Mount Ida student body announcing that Mount Ida and Lasell College had “ended discussions on the previously announced exploration of merger.” The email further stated that “[o]ver the past six years, Mount Ida has undergone extraordinary growth,” and specifically highlighted the increases in Mount Ida‘s enrollment, scholastic aptitude, and programmatic offerings. The email then stated that “[a]ll these gains have caused the national ratings of the institution to rise to among the top 30 in the North Region as reported in the US News and World Report Rankings.” The email did not mention Mount Ida‘s financial distress.
On April 6, 2018, President Brown again emailed the Mount Ida student body and announced that “Mount Ida College has
The announcement occurred without a closing plan having been submitted earlier to the Massachusetts Department of Higher Education (DHE). See
In the days following the announcement of closing, students received individualized information packages about the process for enrolling аt UMass Dartmouth. The personalized packages from UMass Dartmouth contained information about Mount Ida students’ majors, estimated credits, transcripts, and financial aid packages. Mount Ida students had not given prior consent to the defendants to release these records to UMass Dartmouth.
On April 27, 2018,3 Mount Ida provided written notice of the sale to the AGO pursuant to
The AGO responded by letter on May 15, 2018, agreeing to waive the thirty-day prior notice requirement due to the exigency of the circumstances. The AGO noted at the beginning of the letter that the closing was “extremely unfair” to students as well as “disorderly and harmful.” The AGO letter then assessed and approved the proposed sale and concluded that Mount Ida would be receiving fair value in the transaction. As part of the transaction, UMass Amherst would receive all of Mount Ida‘s real, personal, and intellectual property in exchange for UMass Amherst paying off Mount Ida‘s liabilities and providing Mount Ida with funds to meet its obligations to faculty and staff. UMass Amherst also agreed to continue Mount Ida‘s veterinary technology program until its students completed the program and to provide other schools with the necessary space and assets to continue the dental
hygiene, funeral services, interior architecture and design, and fashion design programs.
UMass Dartmouth agreed to offer admission to all Mount Ida students in good academic standing. All four UMass campuses made commitments as part of the transaction: each cаmpus agreed to waive application and deposit fees for Mount Ida students, to commit to ensuring that Mount Ida students understood how many credits would transfer and count toward degree requirements, to accept Mount Ida general education courses toward fulfilling UMass general education requirements, to
On May 16, 2018, Mount Ida and UMass Amherst finalized the sale. Mount Ida officially closed the following day. About 250 Mount Ida students transferred to UMass Dartmouth out of 1389 total students. Other students faced obstacles transferring to new institutions given the short period of notice of Mоunt Ida‘s closing. As said, some students faced difficulties finding similar programs, transferring their credits, completing their chosen degrees on time, and receiving comparable financial aid and scholarships.4
B. Procedural History of the Litigation
The plaintiffs filed this lawsuit in federal district court on November 26, 2018, asserting jurisdiction under the Class Action Fairness Act,
The amended complaint first alleged that the defendants violated the plaintiffs’ right to privacy under
As to the fraud, negligent misrepresentation, and fraud in the inducement claims, asserted in counts two, three, and four, the amended complaint alleged that the defendants had held Mount Ida out as a “viable institution” despite the fact that they knew or should have known that it was failing financially. The complaint cited the facts that up until Mount Ida‘s closing, the college accepted new students, sought enrollment deposits for the fall 2018 entering class, advertised and awarded substantial scholarships, scheduled admitted student days, omitted information about the Lasell merger from the 2017 Self-Study report, and failed to inform the DHE of its financial distress. The complaint also stated that the statement in the Mаrch 23, 2018, email about the rating of Mount Ida by US News and World Reports was a misrepresentation. The plaintiffs alleged that they
The district court concluded that these claims also failed as a matter of law because the plaintiffs had not identified “any statement that can be shown to have actually been false” and failed to make out a claim of fraud by omission because Mount Ida‘s audited financial information was publicly available. Even assuming the defendants had concealed material information, the court held the plaintiffs failed to allege that the defendants had an actionable duty to disclose such information as needed to support these tort claims.
As for the claim of breach of fiduciary duty, the amended complaint alleged that the defendants “held a unique position of influence and trust with [the] students” and so owed the students a fiduciary duty and were in breach of this duty by “[f]ailing to apprise the [plaintiffs] in a timely manner of the financial viability of Mount Ida, . . . [e]ngaging in the sale of the Newton campus without first providing for the needs of the students, . . . [d]ivulging, without authorization, [their] sensitive and private financial and academic information, . . . [r]ejecting a merger deal with Lasell College[,] . . . and [p]lacing Mount Ida’s needs ahead of the needs of the [plaintiffs].”
The district court held that this claim failed as a matter of law because “Massachusetts courts have consistently held that no fiduciary relationship exists between a student and his or her college.” Any fiduciary duty owed by the defendants, the district court reasoned, “was owed to Mount Ida as a corporate entity.”
On the breach of contract claim, the amended complaint alleged that the plaintiffs had formed a contract with Mount Ida (without specifying how) and that the plaintiffs “fulfilled their сontractual obligations to Mount Ida by remitting tuition payments . . . for the purpose of receiving a degree in their selected field.” The amended complaint asserted that the defendants “breached their contractual duty by failing to provide the education bargained for and paid for by the [p]laintiffs.”
The district court concluded that these “bare allegations [did] not suffice for a breach of contract claim” because the complaint failed to identify the terms of the “contract, when it was formed, and who negotiated it.” Further, the amended complaint failed to plausibly allege an implied contract.
Finally, the amended complaint alleged that the defendants violated
The district court concluded that this claim failed because the defendants were not engaged in “trade or commerce.” Rather, the actions they took were in furtherance of, or at least incidental to, Mount Ida‘s core educational mission and so, under state law, ch. 93A did not apply.
II.
“We review the grant of a motion to dismiss de novo.” See Starr Surplus Lines Ins. Co. v. Mountaire Farms Inc., 920 F.3d 111, 114 (1st Cir. 2019). To overcome a motion to dismiss, the plaintiffs’ complaint “must contain sufficient factual matter . . . to state a claim to relief that is plausible on its face.” Saldivar v. Racine, 818 F.3d 14, 18 (1st Cir. 2016) (alteration
III.
We dispose of the preliminary issues first, before turning to the merits of the state law claims.
The district court did not err in referring to public records or documents referenced in the complaint, including the Massachusetts AGO May 15, 2018, letter, Mount Ida‘s financial statements, and other NEASC reports.5 The court may consider “official public records . . . [and] documents sufficiently referred to in the complaint.” Freeman v. Town of Hudson, 714 F.3d 29, 36 (1st Cir. 2013).
The amended complaint specifically referenced the August 2017 Self-Study report submitted to NEASC multiple times and cited it in support of the fraud and misrepresentation claims. Further, both the Massachusetts AGO‘s May 15 and March 13 letters, as well as Mount Ida‘s publicly filed audited financial documents required by state law, constitute public records.6 The two letters were written by the AGO itself while the financial documents were audited and submitted to the AGO pursuant to a statutory duty and mаde available to the public.
Likewise, the plaintiffs argue that there are material disputes of fact as to at least some claims which survive dismissal. Not so. The district court correctly applied Iqbal‘s plausibility standard and took the facts as pleaded by the
plaintiffs and found no claims were stated as a matter of law. We add that we see no disputes as to any material facts.
IV.
A. The Breach of Fiduciary Duty Claim Fails
The plaintiffs’ primary argument on appeal is that both the individual defendants and Mount Ida itself owed current and prospective Mount Ida students a fiduciary duty. They argue the district court erred by ending its duty analysis after concluding that the relationship between student and college does not give rise to a fiduciary duty to students as a matter of law. They assert that since the “[s]tudents pled that the relationship between the parties was founded on faith, trust and confidence,” those allegations alоne give rise to a fiduciary duty claim. The argument is based on a misunderstanding of Massachusetts law. They further argue that “this Court should hold as a matter of law that colleges and universities owe a fiduciary duty to [their] students.”
The duty is not owed to students. See Estate of Moulton v. Puopolo, 5 N.E.3d 908, 921 (Mass. 2014) (“Directors of a corporation stand in a fiduciary relationship to that corporation and have a duty to protect its interests ‘above every other obligation.‘” (quoting Am. Disc. Corp. v. Kaitz, 206 N.E.2d 156, 160 (Mass. 1965))). The interests of the students alleged on the facts here are in direct conflict with those of the institution. Early disclosure of financial distress might well have endangered the ability of the institution to recover and made the financial distress even worse. The Massachusetts AGO recognized in its March 13, 2019, letter that “premature notice of financial instability can result in a ‘self-fulfilling prophecy.‘” Indeed, even the plaintiffs recognize that the trustees ran the risk of students deciding not to enroll if a gloomy picturе of Mount Ida‘s financials were painted.
Further, Mount Ida itself did not owe a fiduciary duty to the students, and we reject the plaintiffs’ assertion that this court should “expand the law” and establish a fiduciary duty between a college and its students. “Federal courts are not free to extend the reach of state law,” Doe v. Trs. of Bos. Coll., 942 F.3d 527, 535 (1st Cir. 2019), at least not where there are Massachusetts law and precedent suggesting the contrary, see Mu v. Omni Hotels Mgmt. Corp., 882 F.3d 1, 9 (1st Cir.), review denied, 885 F.3d 52 (1st Cir. 2018).7
The Massachusetts legislature just after these events occurred addressed the issue of how to improve the financial stability of higher education institutions going forward. The legislature decided yet again in the new legislation not to impose the duty that the plaintiffs now advocate should be imposed on the college itself. See An Act to Support Improved Financial Stability in Higher Education,
mandates that every higher education institution post financial information on its websitе and “immediately notify the [Massachusetts Board of Higher Education (BHE)8] of any known
Massachusetts courts have repeatedly stated that the relationship between an institution of higher education and its students is generally not a fiduciary one. See Williamson v. Bernstein, No. 951471, 1996 WL 1185104, at *3 (Mass. Super. Ct. Feb. 20, 1996) (“The relationship between students and universities is generally contractual rather than fiduciary.“); see also Morris, 804 N.E.2d at 961 (stating that plaintiff had failed “to assert any particular facts in this case that would
warrant the imposition of a heightened duty upon [his university]“).9
There is another reason the plaintiff students fail to state a breach of fiduciary duty claim. Whether viewed under the rubric of standing or some related doctrine, Massachusetts law restricts to the AGO the ability to рursue claims of mismanagement of charitable organizations. See
The law has provided a suitable officer to represent those entitled to the beneficial interests in a public charity. It has not left it to individuals to assume this duty, or even to the court to select a person for its performance. Nor can it be doubted that such a duty can be more satisfactorily performed by one acting under official responsibility than by individuals, however honorable their character and motives may be.
Weaver v. Wood, 680 N.E.2d 918, 922 (Mass. 1997) (quoting Burbank v. Burbank, 25 N.E. 427, 428 (Mass. 1890)). And there is no plausible argument that the claims advanced here fall within any special standing exception articulated by the Massachusetts Aрpeals Court in Harvard Climate Justice Coalition v. President and Fellows of Harvard College, 60 N.E.3d 380, 382-83 (Mass. App. Ct. 2016) (concluding that student plaintiffs lacked standing to pursue claims that charitable organization had been mismanaged because they “fail[ed] to show that they [had] been accorded a personal right in the management or administration of [the school‘s] endowment that is individual to them or distinct from the student
B. No Claim of Violation of Privacy Was Stated
Next, the plaintiffs argue that the district court erred in dismissing their violation of privacy claim under
“To sustain a claim for invasion of privacy [under
In Ortiz, the SJC affirmed the dismissal of the plaintiff‘s § 1B claim against the defendant-physician because another Massachusetts statute had authorized the defendant to perform the medical examination that the plaintiff had claimed violated his privacy. Id. at 173-74. The SJC cited Schlesinger v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 567 N.E.2d 912, 915 (Mass. 1991), for the proposition that an “action [is] not [a] ‘serious’ or ‘substantial’ interference with privacy if, among other things, it had a legitimate business purpose.” Ortiz, 26 N.E.3d at 173-74. The SJC conсluded that “[b]ecause the examination was authorized under [the statute] the invasions of privacy associated with its taking place were ‘justified.‘” Id. at 174 (quoting Schlesinger, 567 N.E.2d at 914-15).
Here, the plaintiffs’ own allegations establish there was a legitimate business purpose. As in Ortiz, the transfer of financial and academic information was “justified” because it was authorized under Massachusetts law. See
We also reject the plaintiffs’ argument that only UMass Amherst, not UMass Dartmouth, could receive their records. The Univеrsity of Massachusetts is a state system with five campuses, and not a set of independent colleges. See
C. No Claims Were Stated for Fraud, Negligent Misrepresentation, or Fraud in the Inducement
The plaintiffs challenge the dismissal of their fraud and misrepresentation claims, arguing that the defendants made “false and misleading statements” and committed fraud by omission by failing to disclose Mount Ida‘s financial distress.11
For a claim of fraud, a plaintiff, among other requirements, “must establish that the defendant ‘made a false representation of a material fact with knowledge of its falsity.‘” Russell v. Cooley Dickinson Hosp., Inc., 772 N.E.2d 1054, 1066 (Mass. 2002) (quoting Danca v. Taunton Sav. Bank, 429 N.E.2d 1129, 1133 (Mass. 1982)). Negligent misrepresentation does not require that the defеndant have “an intent to deceive or actual knowledge that a statement is false;” instead, it only requires that the defendant fail to exercise “reasonable care or competence in obtaining or communicating the information.” Cumis Ins. Soc‘y, Inc. v. BJ‘s Wholesale Club, Inc., 918 N.E.2d 36, 47-48 (Mass. 2009) (quoting Nycal Corp. v. KPMG Peat Marwick LLP., 688 N.E.2d 1368, 1371 (Mass. 1998)).
The plaintiffs have failed to plead any false statement made by any of the defendants. They assert that the March 23, 2018, email announcing the end of the Lasell merger talks was false because President Brown “announced that Mount Ida would remain a top 30 regional school.” But contrary to the plaintiffs’ characterization, President Brown‘s email actually stated that Mount Ida‘s gains over the past six years in enrollment and programmatic offerings had “caused the national ratings of the institution to rise to among the top 30 in the North Region as reported in the US Nеws and World Report Rankings.” This statement was not false. The statement was about a past rating. Additionally, none of the plaintiffs allege they relied on statements made by Brown between the March 23, 2018, email and the closing announcement two weeks later. Further, the plaintiffs point to no other statements by any of the defendants that were allegedly false.
The plaintiffs’ argument that their negligent misrepresentation claim does not fail lacks merit. Negligent misrepresentation still requires a false statement by the defendants. Id. at 48.
The plaintiffs have also failed to plausibly allege fraud by omission. The plaintiffs allege that despite “facing imminent failure, the defendants were variably touting the college‘s viability to current and prospective students.” “Fraud by omission requires both concealment of material information and a duty requiring disclosure.” Sahin v. Sahin, 758 N.E.2d 132, 138 n.9 (Mass. 2001). Further, “[f]ragmentary information may be as misleading as active misrepresentation, and half-truths may be as actionable as whole lies.” Kannavos v. Annino, 247 N.E.2d 708, 711-12 (Mass. 1969).
But here there were no half-truths, nor was there a duty to disclose. The plaintiffs have not identified any statements by the defendants about Mount Ida‘s financial situation that could be construed as half-truths. In Mount Ida‘s audited financial information, the defendants accurately reported that Mount Ida had operated at a deficit in 2014, 2015, and 2016. Further, President Brown‘s statement about Mount
Further, the plaintiffs have failed to plausibly allege that any of the defendants had a duty to disclose this information. They rely on Knapp v. Neptune Tower Associates, 892 N.E.2d 820 (Mass. App. Ct. 2008), which stated that a duty to disclose arises where “(i) there is a fiduciary or other similar relation of trust and confidence, (ii) there are matters known to the speaker thаt he knows to be necessary to prevent his partial or ambiguous statement of the facts from being misleading, or (iii) the nondisclosed fact is basic to, or goes to the essence of, the transaction.” Id. at 824. As said, there was no fiduciary duty here. Further, none of the defendants made a “partial or ambiguous” statement about Mount Ida‘s finances. Finally, Mount Ida‘s financial distress did not go to the essence of the transaction. Here, the essence of the transaction with the students was that the students would receive a semester of education in exchange for a semester of tuition. Mount Ida‘s financial distress did not impact this transaction, as the students did receive a semester of education before the school closed.
D. No Breach of Contract Claim Was Pleaded
The plaintiffs assert that the district court erred because they plausibly “pled a breach of either the implied or express contractual agreements between the students and the college.”13
Under Massachusetts law, the elements of a breach of contract claim are that “there was an agreement between the parties; the agreement was supported by consideration; the plaintiff was ready, willing, and able to perform his or her part of the contract; the defendant committed a breach of the contract; and the plaintiff suffered harm as a result.” Bulwer v. Mount Auburn Hosp., 46 N.E.3d 24, 39 (Mass. 2016). Further, “[i]n the absence of an express agreement, a contract implied in fact may be found to exist from the conduct and relations of the parties.” Sullivan v. O‘Connor, 961 N.E.2d 143, 153 (Mass. App. Ct. 2012) (quoting LiDonni, Inc. v. Hart, 246 N.E.2d 446, 449 (Mass. 1969)). “[I]t is essential to state with ‘substantial certainty’ the facts showing the existence of the contract and the legal effect thereof.” Tel. Answering Serv. of Bos., Inc. v. New Eng. Tel. & Tel. Co., 267 N.E.2d 918, 919 (Mass. 1971) (quoting Pollock v. New Eng. Tel. & Tel. Co., 194 N.E. 133, 136 (Mass. 1935)).
The plaintiffs’ contract pleadings were that they “applied for admission to Mount Ida,” they were each acсepted, and that “a contract was formed.” It does not allege the terms of any such contract or that specific terms required earlier disclosure of the closing. The amended complaint also makes passing reference to enrollment deposits and the fact that students gave up the chance to enroll at other schools by choosing Mount Ida but fails to explain how these actions formed
E. The Chapter 93A Violation Claim Was Properly Dismissed
Finally, the plaintiffs argue that the district court erred in concluding that the allegedly deceptive actions the defendants took were in service of Mount Ida‘s core educational mission and so were not in “trade or commerce,” as required by
Chapter 93A makes unlawful “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.”
Indeed, the Linkage court stressed the broad meaning of the term education, as distinguished from “trade or commerce” in footnote thirty-six:
We have given broad meaning to the term “education” in order to implement legislative goals and to allow education reasonable freedom to develop, and we have held that vocational and technical teaching and courses constitute education. See, e.g., Assessors of Bos. v. Garland Sch. of Home Making, 6 N.E.2d 374, 386 (Mass. 1937) (instruction in homemaking skills is educational); Mount Hermon Boys’ Sch. v. Gill, 13 N.E. 354, 358 (Mass. 1887) (for purposes of statute exempting educational property from taxation, education includes teaching practical skills). As Justice Knowlton phrased the concept of education, “according to one of Webster‘s definitions,” in the Mount Hermon decision, “[t]o educate . . . is to prepare and fit for any calling or business, or for activity and usefulness in life.” Id. at 357.
Linkage, 679 N.E.2d at 208 n.36 (alterations in original) (internal quotation marks omitted).
The SJC was careful to distinguish the BU facts from situations in which the defendant is, as here, a “statutorily mandated nonprofit” whose actions were “motivated by legislative mandate [and] not [for] business or personal reasons.” Id. at 208 (quoting Poznik, 628 N.E.2d at 4). The factors considered by the SJC as to business context are as follows:
The question whether a transaction occurs in a business context must be determined by the facts of each case. Begelfer v. Najarian, 409 N.E.2d 167, 176 (Mass. 1980). The factors we consider include “the nature of the transaction, the character of the parties and their activities, and whether the transaction was motivated by business or personal reasons.” All Seasons Servs., Inc. v. Comm‘r of Health & Hosps. of Bos., 620 N.E.2d 778, 779 (Mass. 1993).
Poznik, 628 N.E.2d at 3. None of these factors permit a finding of business context here.
Certainly, the words “trade” and “commerce” in
The plaintiffs argue that the defendants violated ch. 93A by failing to follow through on the Lasell merger, failing to disclose Mount Ida‘s financial distress, and by transferring their financial and academic information to UMass Dartmouth. But what the plaintiffs allege to be actionable were all activities taken in furtherance of Mount Ida‘s charitable mission of education.15 Unlike in Linkage where BU possessed a “business motivation[]” to create a new revenue stream with a business partner, 679 N.E.2d at 209, Mount Ida‘s allegedly actionable activities involved directly encouraging students to attend Mount Ida so that they could receive an education and ensuring that Mount Ida students could continue their educations after Mount Ida‘s closing.
The plaintiffs’ argument that the phrase “advertising . . . of any services” in the text of
And there is even stronger reason to conclude that Massachusetts has not authorized a private right of action under ch. 93A for these typеs of actions by a nonprofit school. Regulation of not-for-profit colleges as to such matters as timing of notice of closing has been assigned to the Massachusetts BHE. See
V.
Since our decision disposes of the claims against all of the defendants, including the individual defendants and the Board of Trustees, we do not reach the other defenses that they have raised.16
We also reject the plaintiffs’ request for leave to amend. The “plaintiffs were put on notice of the deficiencies in the complaint by the motion to dismiss. If they had something relevant to add, they should have moved to add it then.” Fire & Police Pension Ass‘n of Colo. v. Abiomed, Inc., 778 F.3d 228, 247 (1st Cir. 2015). They failed to do so. Instead, they stated only that they requested leave to amend if the court found their complaint lacking. This was insufficient. See Gray v. Evercore Restructuring L.L.C., 544 F.3d 320, 327 (1st Cir. 2008) (concluding that a similar statement “[did] not constitute a motion tо amend a complaint” and “the district court cannot be faulted for failing to grant such leave sua sponte“).17
Affirmed.