-: SJC-13526.
William Shoucair v. Zoning Board of Appeals of Boston.
-: [Justice Wendlandt] Okay, attorney,
I'll clock whenever you're ready.
-: May it please the court.
Good morning, Your Honors.
Sean Regan on behalf of the appellant, William Shoucair.
We are here on interlocutory appeal
requesting this honorable court
vacate the trial court order imposing bond
after finding that the claim was not brought in bad faith.
Today we seek to harmonize the bond provision
of the Boston Zoning Code with that of the state
to ensure that good faith abutters have access to justice
and are not barred from seeking judicial review
of administrative zoning decisions.
To do so, the court must decide
whether the Boston Bond provision is intended as a shield
against frivolous and vexatious claims,
or whether it may also be used as a sword
to cut down meritorious suits.
-: Counsel, haven't we decided
this question already in Damascus?
-: Damascus was a different question.
The question in Damascus was about whether or not
the shall language rendered the bond mandatory.
So it's a little bit different.
We believe that the bond provision is a shield.
-: But doesn't it...
I mean, doesn't it say Damascus says that the discretion
should be exercised, quote,
"To discourage frivolous and vexatious appeals
from the decision of the Boston Board
but not unreasonably to prohibit
directly or indirectly meritorious appeals."
That's the standard, right?
-: That is the standard, Your Honor.
And we believe that a good faith claim here
is having a bond for damages imposed against it,
and we believe that's a bar to justice.
-: I'm just trying to understand, though,
what that standard is and how it differs
from, you know, bad faith.
Just...
-: I don't think it that it does differ from bad faith.
I think that there should be
a predicate finding of bad faith
before a bond should be imposed,
just like this court decided in Merengue.
-: Yeah, but Merengue was just interpreting
the cost provision.
And we said you need, basically, bad faith
or it needs to be so devoid of merit
as to amount to bad faith, right?
-: Yes.
Yes, Your Honor.
And here, the question is about damages.
The bond provision in Merengue is to secure cost.
In Boston, it's to save harmless
and indemnify against cost and damages.
So-
-: And so given the difference in the language
of the statutes that you just quoted,
why wouldn't there be a difference in terms of the standard?
-: Well, one cannot be be damaged
from a good faith claimant filing a claim.
So there would have to be some cause
of the potential damages down the line.
So the-
-: Where is that legal principle embodied?
-: Well, I think the definition-
-: That you have to have a cause of action
in order to be indemnified and held harmless
in connection with a bond provision?
-: I think that comes from the plain language
of those words.
That a damage is a remedy for a harm cause to one.
Caused to an individual.
And an indemnity is to hold someone harmless
from the wrongful act or harmful act of another.
There has to be at least (indistinct).
-: And so in either of those definitions,
you did not include a private right of action,
sort of a separate claim against the plaintiff.
And it seems like your argument is really about
that the defendant needs to have
a private right of action or a claim
in order to recover damages.
-: So, in the application, in this instance,
if we follow it all the way through to the end,
let's say that, in this hypothetical only,
Mr. Shoucair loses.
What then happens at the end?
We have to assume that the defendant, Pure Oasis,
would move to have the bond dispersed,
and that could only be based on damages.
The only potential cause of that damages
would've been the filing of a good faith claim
under a judicial right under Section 11
of Boston Zoning Code. -: Well, isn't a delay
in having to go through the litigation in order to get that,
which the Zoning Board has already given it.
-: But do we recognize the delay
of regulatory process
that was voluntarily entered into to get an exception
from the underlying Zoning Code as a legal harm
when someone has a judicial right to challenge that?
-: Right.
And isn't that exactly what's recognized
in the context of this bond?
-: I think the bond
based in the words indemnity and damages
is intended to save and hold harmless
from frivolous and vexatious suits,
not from good faith suits.
So without a predicate finding, just like in Merengue,
where cost ultimately cannot be awarded in the end,
if damages cannot be awarded in the end,
nor should a bond be imposed for it
at the beginning. -: You're going back
to the words of the statute.
It seems like the Boston specific statute says,
"Costs can't be awarded
unless there isn't good faith," right?
Sean: Yes, Your Honor.
-: And then Section 17 also has that cost can't be awarded
if there isn't good faith.
But there's nothing in the Boston statute
that says anything about good faith vis-a-vis damages.
-: I don't think that needs to be explicitly stated.
I think that the legislature knew what they were doing
when they put in indemnity in damages
because those have a plain meaning,
that there has to be a wrongful act.
So that they did not need to place bad faith next to damages
because one cannot be damaged
by filing a statutory claim in good faith.
-: You can file a frivolous lawsuit that's not in bad faith
or a vexatious lawsuit that's not in bad faith.
It's, you know, you may just be ignorant.
-: Correct, Your Honor.
I think I'm speaking generally here.
But in this specific instance, there's-
-: Say, you file a frivolous lawsuit.
It's not brought in bad faith,
but you don't know the law
and you throw in something that's a bad claim,
and that delays this project.
So that project doesn't go up for two years.
So they can't build, they can't occupy.
Doesn't that cause damage?
-: I don't know that ignorance of the law
rises to the level of frivolity under-
-: File something that's really stupid
and has no legal basis.
Isn't that a frivolous case,
even if it's not a claim filed in bad faith?
-: And there would be,
I think there's a statute for that
to bring that claim for frivolous.
-: There's a statute here that says,
I mean, Damascus, I don't know I exactly where Damascus
came up with the frivolous and vexatious language.
It relied on an earlier SJC decision.
But it seems to be that's the standard.
-: They relied on Begley.
And in Begley, specifically in the descent,
I'm paraphrasing,
but in the descent, he said that while he agrees
with the proposition that Boston can be treated separately
from the rest of the commonwealth,
he doesn't agree that only Boston
should get substantive damages
if the claim is frivolous.
So it is about frivolity.
-: But Begley says that we're more likely
to have these kinds of claims in Boston
because of the density and the difficulty of building there.
Therefore, it makes sense to have a statute
that's perhaps more protective.
-: Agreed, against frivolous and vexatious claims.
So once that finding is there,
and I think this is even more evident
in that there's no cap to the bond
over the 50,000 square foot threshold.
Over that, the bond's uncapped.
So isn't that a deterrent
for frivolous and vexatious claims?
It's not intended to punish someone
who brings a claim in good faith
to challenge whether or not a claim is administrative whim,
which is the purpose.
There's no right to zoning relief.
There is a right to challenge underlying,
to challenge these approvals
to ensure that they are not administrative whim.
I believe the legislative intent is clear
from the statutory construction
in the plain meaning of Section 11.
And they all support this common sense approach
that we believe the legislature knew what they were doing
when they included the words indemnity and damages.
Indemnity is generally understood
to protect one from the wrongful act of another,
and damages do require more
than bringing a good faith claim.
There has to be a wrongful act, or at minimum, negligence.
There has to be something.
One cannot be damaged from a good faith claim.
-: Sorry, can you just explain the basis for that assertion
vis-a-vis the claimed specific damages here?
Because assuming for purposes of your argument
that this is a good faith claim,
we have in front of us a whole bunch of claimed damages
that actually are arising from the situation
from the delay of the building of this project.
-: Well, I don't know that that delay damages
as part of the regulatory process
are without a cause, without a wrongful act
are damages that we recognize in the law.
In Merengue, this court said
that if the legislature intended to include delayed damages,
they would say that.
-: But Merengue is very different
because it was a statute that only referred to costs.
And this one refers to costs and damages.
-: The statute that was referenced,
that was cited, I think...
Was it 40R?
45R reference delay damages.
And that was the reference.
If they intended to include delay damages
or carrying costs, that would be,
in the statute here, it's just damages,
which implies that it has to be from a wrongful act.
Now, if there is a predicate finding-
-: But doesn't the context of the entire statute
suggest that the damages have to be from pursuing the claim
because it's damages to hold the person harmless
from the fact of this lawsuit going forward?
-: I would in invite the conversation
about the context of Section 11
because that section is about the right
of an aggrieved party to bring a claim in court
and damages and indemnity
have specific definitions in court.
And so I would encourage the court
to give those words the plain meaning of the statute
in which they're in.
-: Could you address Rule 65,
which is sort of an analogous provision?
-: Absolutely.
I think Damascus makes the analogy
that the bond provision should be imposed in a similar way.
And at that time, the bond provision had shall language.
And so what the court in Damascus intended
was that it should be a discretionary,
it should be a discretionary bond
just like the Rule 65 bond is actually discretionary.
The difference between the two bonds
is the extraordinary remedy sought in Rule 65,
which is to restrain someone's affirmative action.
Here, only the status quo is being maintained
while the decision of the administrative body
is being checked-
-: That's an interesting...
You raised a point that I was interested in,
which is actually the administrative body
has approved this project going forward.
So I recognize that it maintains the status quo
in the sense that, you know, nothing's being built.
But in a sense, it also alters the status quo
because by filing this lawsuit,
you get an automatic tat injunction
of the project going forward.
If you did not file this lawsuit,
the project would be being built, correct?
-: Well, the administrative body that approved the project
is a very highly political process
in which abutters don't have much say.
It's a very one-sided process with the proposed-
-: But you're not challenging
the constitutionality of the process.
I mean, sticking with the bond, to Justice Stewart's point,
the status quo is maintained
where the status quo is defined by the action
before the litigation,
and that action was approval to go ahead with the build.
-: Understood.
I guess I should be more specific
in that we are maintaining the Zoning Code as it exists
and not allowing an exception to the Zoning Code
to move forward without ensuring
that it's not administrative whim
or arbitrary and capricious
as with many of these political processes-
-: So your status quo definition
would be no deviations from the code as written.
-: My stat...
Sure.
To confirm that the political administrative body
that approved it did not violate the standard in doing so,
which the abutters don't have much opportunity
to challenge during that process.
And they do have judicial review under Section 11,
which they are attempting to bring,
and they should not have to pay to do so
if it is in good faith.
Now, if frivolity
or bad faith is found,
then the damages and cost bond can be so applied.
In closing, the courthouse doors
should not be closed to the public.
For over 50 years, this court has made great effort
to implement bond requirements imposed by the legislature
in ways that do not offend the constitutional rights
of due process and access to the courts.
In Damascus, this court ruled that bonds may be imposed
to discourage frivolous and vexatious appeals,
but may not be used to unreasonably prohibit directly
or indirectly meritorious appeals.
And Merengue, this court, reaffirmed that position,
and now Shoucair removes the space for confusion
between the two.
Our interpretation is consistent with Merengue and Damascus.
It aligns with the plain meaning of damages and indemnity,
and most importantly, it ensures that abutters
are free to access their right of petition
and access the court.
The court here has an opportunity
to harmonize 40A in the Boston Zoning Code
to ensure good faith claimants with presumptive standing
have appropriate remedy of law
for zoning appeals in the city of Boston.
Thank you. -: Okay, thank you.
Attorney McKenna.
-: Good morning, Your Honors, may it please the court.
My name is Dennis McKenna
and I represent the appellate defendant Pure Oasis,
a minority-owned business here in Boston
that holds a license from the Boston Cannabis Board
for over two and a half years
to operate its cannabis store
on Washington Street in the Oak Square,
a business section of Brighton.
After receiving the license from the cannabis board,
which also looks at location
as one of its several factors
in determining among many applicants
who would get to operate and where,
the Boston cannabis determined
that this was an appropriate location.
And then as is current under the Zoning Code-
-: I get it that you've got a permit.
And so what is the standard and how does it...
I get that Merengue doesn't control this.
What I'm trying to understand is a practical matter.
What the standard is and how it differs from bad faith?
Because in Merengue, we said it's so devoid of merit
that you can, you know, at least infer bad faith.
This standard about so vexatious or frivolous,
although there's a second part,
not to deter meritorious appeals,
what is the standard?
And, you know, when you're advising your clients,
how does it differ, you know,
from the 40A standard?
-: It is designed to discourage, I would say.
Combining the two words,
unmeritorious appeals, but also to afford.
So Damascus, but then under,
I believe it was a judge to afford bond protection
to my client.
So it's a two-part question-
-: No, I understand.
Were^ trying to protect
your client from something.
And it's not bad faith, I don't think,
but I'm trying to understand.
It's a somewhat high standard, right?
Dennis: Which, Your Honor?
I'm sorry.
-: This standard We're applying here.
It's not bad faith, but it's not bad...
It's not sort of mediocre claims or sort of, you know,
poorly thought out, you know,
but still there's something to it claims.
-: Right. -: It's something else.
-: So we both know what the language is.
Well, we all know what the language is in Damascus.
So I would say,
from somebody who does plenty of this litigation,
even in these...
This is a typical abutter,
but this is a business abutter.
This is a multi-family person who,
while this appeal is pending,
is making hundreds of thousands of dollars in rent
while my client-
-: But again, that's all sort of background music.
Is his claim frivolous or vexatious?
If it's not, then he gets to bring it, right?
-: Well, he gets to bring it.
We cannot stop it until-
-: But he doesn't...
You don't get a bond if his lawsuit
isn't frivolous or vexatious, right?
-: Yes, we do, Your Honor.
-: Don't get costs unless it's bad faith.
So what is it that you get...
And I also agree with your reasoning
that damage is not a separate cause of action,
but the delay in getting your cannabis operation
up and running could be damages.
I think that makes some sense.
But he's gotta have the right to bring a meritorious appeal
and something that's not vexatious or frivolous, right?
-: What will happen,
I'm gonna put it in the context of this case.
What will happen when discovery is over?
We will move for summary judgment on standing.
This case will likely never get to trial.
-: I don't know if that's true.
He's a neighbor
and you're putting a cannabis operation next to his house.
-: Understood, Your Honor.
So he has presumed standing.
-: Right.
Say, you ooze on standing, help me out here.
What's the standard?
-: We will then win, I predict,
because the board is given significant deference
on a discretionary permit, which this is.
We meet all the standards,
and the board's discretion
is then given discretion by the superior court.
-: His traffic analysis is so flawed
that it's frivolous or vexatious?
-: Yes, Your Honor.
He has no traffic expert.
He never did, and he still doesn't.
And so these are anecdotal concerns
that every neighbor on every project...
There was a case called Holland Brands
that went through the appeals court.
I tried that to the Superior Court.
Same exact concerns, that none of the other businesses
that operate there successfully
surrounding the same plaintiff's house,
the fast food stores,
the liquor store right down the street.
Eventually, not today,
we have to get a conditional use permit.
Someday soon, these cannabis stores will be regulated
the same as liquor stores,
meaning the regulations will be at the regulatory level,
there will be no conditional use permit.
-: So this traffic analysis is frivolous,
and therefore the bond is appropriate or...
-: He may have his own internal concerns,
but they're not concerns of his tenants
who decided where they would live.
They could have lived three blocks over
but decided to live on Washington Street
on the bus line next to existing businesses.
So won't be frivolous, but it will be devoid of merit.
And so that's why I use the words unmeritorious appeal.
Remember, Damascus doesn't-
-: But you're jumping past the conclusion of the judge.
And I know you're going to the end
and saying that once this is fully litigated,
you'll be vindicated.
But the judge has made a finding
that this appeal was not frivolous.
-: The judge only said,
and that's a key distinction
of what the plaintiff is arguing.
The plaintiff is taking the superior court's words
where the superior court,
when she distinguished the 48 Section 17 in Merengue,
she said that she did not find
that the plaintiff was acting in bad faith
because that was the language of Merengue.
What she did not find
is that this was a meritorious appeal.
There's no finding.
-: Well, but she has to find
that it's vexatious or frivolous, right?
-: No, no, no.
Not at all, Your Honor.
That's not a required finding.
It's a purpose, but it's not a required finding and recall.
Ultimately, the only question
is whether the court properly exercised its broad discretion
or whether the court was clearly erroneous.
And the court here did exercise
a correct amount of discretion.
And there's no evidence, none whatsoever,
in the records submitted by the plaintiff
who had the opportunity to file an affidavit and did,
there's not any question nor statement or evidence
that a $3,500 bond is gonna cause this plaintiff
to dismiss this appeal.
-: Can I ask the...
We don't read what the judge did.
I can't remember if it's a he or she.
We can't remember what the judge.
She says, I believe that it's not in bad faith,
but we don't know what...
That's not good enough, right?
Not being in bad faith is not the standard.
It's something less than bad faith
may still justify a (indistinct).
We don't know whether she thought
bad faith was the requirement or not.
-: She is saying that bad faith isn't the requirement
because she did not find the plaintiff to be in bad faith,
which may look to your heart,
but it doesn't look to your question,
initially, your observation.
It could be an ignorant appeal,
which it's a peel devoid of merit,
and that's what we believe it to be.
-: Wait, how do we know she applied the correct standard?
That's what...
By saying it's not the wrong standard,
how do we know she applied the right standard?
-: Well, we know she exercised
the correct amount of discretion
because she said when she entered this,
"I'm not gonna award a $25,000 bond,
I'm gonna award a $3,500 bond."
And that affords us the protection
that under Damascus and related cases,
we are entitled to
has the plaintiff put just a little bit
of skin in the game and nothing close
to the hundreds of thousands of dollars
of losses we're suffering.
And-
-: So some of those losses that you claim to be suffering
are losses that you would suffer
even if you had to go forward,
like having to ensure the property and things like that.
So how do we treat those?
Isn't really your damages to be indemnified here,
the lost profits maybe that you would have gotten
if you were allowed to go forward?
-: Well, they are delayed damages because-
-: Well, which is they?
can you be more specific with the pronoun?
-: All of them.
All of them are delayed damages.
Everything that we put in the affidavit.
-: That's just not true because some of them
are things that you would've had to pay anyway.
-: We would have, but we would've been operating.
So, because we are paying them while not operating,
that's when they become damages to us.
-: That's just not true
because you would've had to pay them if you were operating.
So, really your delay damages is the differential.
-: Well, at least, Your Honor, under...
We differ on whether we are being damaged
by paying real estate taxes
when we don't get the benefit of operating,
but I'll concede that we can see things differently.
-: And so you're paying the real estate taxes
without the benefit.
So your damages are the differential.
You are gonna play the real estate taxes anyway.
-: Overhead is overhead.
You can't avoid it. -: Right.
Some of the things that you put into your,
you know, damages calculation
in connection with asking for the bond are just not true.
-: Well, they're true in that we are paying them.
We can differ on-
-: And you would have to pay them anyway.
-: I concede it.
-: Okay, thank you. -: I concede it.
What we will never get back are the profits.
-: Yeah.
-: And that is hundreds of times more than the $3,500 bond.
Your Honors, we believe and request
that you affirm the superior court order
because it was within the broad discretion
that the Superior Court had.
Thank you for your time this morning.
-: Thank you.
Okay, Attorney Jones.
-: Good morning, your Honors.
May it please the court.
I'm Catherine (indistinct) Jones
on behalf of the Zoning Board of Appeal and its members.
Zoning in Boston has long been regulated separately
from the zoning in the rest of the commonwealth.
The language contained in Section 17 of 40A
and Section 11 of the Enabling Act is not nearly identical.
Boston's bond provision Section 11-
-: So tell me how...
I understand it's not identical.
What I can't figure out is how it differs exactly.
It doesn't require bad faith,
but I'm not sure the difference
between bad faith and vexatious and frivolous.
In a meaningful, give me, if I were advising a client,
what's the difference?
What kind of claim falls within the bond provision in Boston
that doesn't fall within the one in 40A,
in Worcester or somewhere else?
-: Your Honor, I believe that that goes to things
like delay damages, which in the Merengue-
-: That's the amount.
I'm trying to understand what the type of claim is that...
I understand we look at the amount,
and that affects, you know, the ability to proceed,
but there's gotta be a substantive difference
in these standards,
and I'm trying to get a sense of what it is.
And you're the best one to tell us that
'cause you're, you know, you're from,
you're coming from this.
Tell me how you differ from Worcester.
-: So, Boston is, like I said,
Boston's been Enabling Act
and the State Zoning Act are different, and have been,
since as long as they've existed.
-: We get that, but how do they differ?
-: So Boston differs in population size, density.
-: No, no, I understand how Boston is different
from the rest of the commonwealth.
What I don't understand is how the legal standard differs.
-: Your Honor, the court has many times determined
that because of the differences
between Boston and the rest of the Commonwealth,
the legislature is reasonable
in making these sorts of differences in the statutes.
The practical differences in the two,
including the damages and costs versus just costs
and including the different caps
on the amount that bonds can be imposed at,
are a reflection of those differences.
-: Okay, I get it.
So you can get damages as well as cost,
but you're not saying the same substantive standard.
The bad faith standard applies to both,
and you could just get more, right?
-: No, the bad faith standard does not apply to both.
-: Right. -: And in theory,
yes, they could get more.
-: I get that they can get more.
That you have damages in costs in Boston,
they only have costs.
But I think you're arguing
that there's a difference in the substantive standard too,
are you not?
-: Yes, there is.
And the bond standard in Boston, Your Honor,
is, first of all, it's not a requirement for people
to post a bond in order to file under the Enabling Act.
It's only done through motion practice.
It's not done every time.
And then as it's been discussed-
-: You've gotta help us on the hard question.
The hard question is,
is it something less than bad faith?
I take it you're arguing,
but I don't know that...
I'm trying to understand the difference
between vexatious and frivolous.
And maybe I'm wrong,
but it seems like the substantive standard
is the difference between vexatious
and frivolous and bad faith.
-: Your Honor, we would submit that vexatious and frivolous
is something different than bad faith.
-: So help me, how is it differ?
Give us some examples of how it differs.
-: I think Your Honor's point earlier
that there can be a scenario in which,
you know, maybe an abutter is ignorant
of exactly what is required
to bring a complaint under Section 11
that results in the, in most cases,
developer winning the appeal,
is a great example of that.
And in that case,
the position is that the defendant in that scenario
should be indemnified against damages
that may be the result
of the delay caused by the litigation.
-: But I'm having a little trouble though
because, again, in Merengue, we said,
we we are using sort of the lack of merit
in the claim to show bad faith.
So devoid of merit as to be indicative
or whatever the language was of bad faith.
Here, we're not requiring bad faith,
but we're also making a merits determination, right?
-: Well, the judge, Your Honor,
is weighing those two considerations
as outlined in Damascus.
And the most important point is that the legislature
doesn't require a bad faith,
require a bad faith finding.
Like, the court has determined that...
-: Does the second part of Merengue change,
I mean, of Damascus changed the first part?
The first part of Merengue is the vexatious and frivolous,
and then it talks about not interfering
with meritorious appeals.
Does that soften the vexatious and frivolous requirement?
-: I think it may, Your Honor,
depending on the claim
that's being brought in the judge's discretion.
And to that point, I think it's also worth noting
that to the extent, there might be an error in discretion
that doesn't necessarily mean
that we can read a bad faith requirement
into the Enabling Act.
And if there are no further questions.
On the basis of the plain language reading of Section 11,
the board of appeal and its members respectfully request
that the court finds,
that the courts may impose a bond
absent of finding of bad faith.