District Of Massachusetts Holds Alleged Post-Termination Use Of Proprietary Formulations May Constitute ‘Something More’ Under Chapter 93A

In Chew CPG Inc. v. Hiya Health Products, LLC, the United States District Court for the District of Massachusetts allowed the plaintiff to amend its Chapter 93A claim, concluding that the allegations plausibly exceeded a routine breach of contract dispute and adequately alleged unfair or deceptive conduct under Massachusetts General Laws Chapter 93A, § 11. The dispute arose from a product development agreement under which Chew CPG agreed to develop children’s nutrition products for Hiya. After another company acquired Hiya, Chew alleged that Hiya reassured it that the relationship would continue and continued soliciting Chew’s services. Chew alleged that Hiya later abruptly attempted to terminate the agreement, ceased payments, and launched a product allegedly developed using Chew’s proprietary work product without compensation.

The court acknowledged and reiterated the familiar principle that a mere breach of contract, standing alone, is insufficient to establish liability under Chapter 93A. The court emphasized that a plaintiff must allege “something more,” such as conduct intended to secure an unbargained-for advantage or involving deceptive or coercive behavior. Hiya argued that the case involved nothing more than a contractual dispute concerning termination rights, payment obligations, and ownership of work product. The court nevertheless found the amended allegations sufficient at the pleading stage because Chew alleged that Hiya intentionally misrepresented its goals after the acquisition so it could continue receiving Chew’s development services, then exploited Chew’s work product for commercial gain without payment.

Although Hiya challenged the claim under Rule 9(b), arguing that the allegations lacked the particularity required for fraud-based Chapter 93A claims, the court held that the complaint sufficiently identified the allegedly misleading communication, including who made it, when it was sent, and what it said. The court further declined to dismiss the claim based on the “primarily and substantially” requirement, observing that it was the defendant’s burden to show that the “center of gravity” for the issue did not occur primarily and substantially within Massachusetts. The court held that Hiya did not do so and noted that the highly factual issue is “not generally” appropriate for a motion to dismiss. 

While the court permitted the Chapter 93A claim to proceed past the pleading stage, the decision reinforces that Massachusetts courts continue to require allegations of “something more” than a mere contractual breach to sustain Chapter 93A liability. Defendants facing Chapter 93A claims in commercial disputes should consider emphasizing the distinction between ordinary contract performance disputes and conduct that is truly coercive, deceptive, or designed to secure an unfair commercial advantage.

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