Whether a plaintiff may recover under 93A for a violation that was not disclosed until after sending its demand letter, but prior to filing suit.

The plaintiffs were scheduled to take a cruise on September 16, 2001, with the defendant Norwegian Cruise Line. As a result of the September 11 attacks, they decided not to go on the cruise and requested a refund. Norwegian refused, pursuant to its disclosed policy to deny refunds within fourteen days of departure.

In early September, after paying for the trip, the plaintiffs had received passenger ticket contracts along with their tickets. It was Norwegian’s undisclosed policy to refund tickets if customers objected to a term of the ticket contracts, as required by Federal caselaw. The plaintiffs sent Norwegian a c. 93A demand letter asserting various unfair trade practices, but not a failure to disclose refund policies. Norwegian revealed the refund policy in its reply letter, which denied wrongdoing. Plaintiffs then filed suit, but did not state claims relating to a hidden refund policy for another four years.

The judge denied the hidden-refund-policy claim on the basis that the plaintiffs had not cancelled because of any objection to the ticket contracts, but because of safety concerns. The Appeals Court reversed, finding that failure to disclose the refund policy violated 940 Code Mass. Regs. § 15.04(2)(e), and that disclosure of the refund policy might well have led the plaintiffs to object. The SJC granted Norwegian’s application for further appellate review.

1. Sufficiency of the 93A demand letter. Under G.L. c. 93A, § 9, a plaintiff must send “a written demand for relief, identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon,” prior to filing a 93A claim. The demand letter in this case did not state any theory relating to notice of Norwegian’s refund policy. The Appeals Court did not address the scope of the demand letter, other than to note that it was sent. Norwegian argues that the notice requirement of § 9 was not met, and the claim should be rejected as a matter of law. The plaintiffs respond that they were not required to issue such a specific demand, where the violation consisted of failure to disclose, and they had no notice of the violation until after sending their demand.
2. Causation. Norwegian argues, and the trial judge found, that the violation did not cause any harm to the plaintiffs, because they did not have any objection to the ticket contract itself—they cancelled because of fear of further terrorist attacks, and not because of any term of the contract, which they admitted they did not even read. The plaintiffs argue, and the Appeals Court found, that had they had notice of Norwegian’s cancellation policy, they would have read the ticket contract and offered good faith objections to a number of its terms.

The Court likely granted review because the Appeals Court failed to address sufficiency of the 93A demand letter. It seems that the plaintiffs could have sent a second demand letter prior to filing their complaint, had the refund-policy-notice issue occurred to them. Requiring such a letter would serve the purpose of § 9 to promote settlement, and may be required by the Court on that basis.

There is an interesting question of what should happen if a new theory of 93A liability emerges after filing the complaint, during discovery. In that case, it may be less equitable, and create some perverse incentives for the defendant, if plaintiffs must send a new demand letter, especially where the claim itself is based on failure to disclose information.