Judge nixes some claims in Fallon

May 29, 2023

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A Boston judge moved a legal clash between real estate developer Joe Fallon and a Massachusetts manufacturer closer to a trial by dismissing some, but not all, of their claims against one another over a failed partnership to produce N95 masks during the pandemic's early days.

The Fallon Co. and West Bridgewater-based Shawmut Corp. joined together in 2020 to start producing the masks at a time when the equipment was hard to find, even for health care workers. The Fallon Co. founder, Joe Fallon, was to provide financing and leverage his business connections, while Shawmut was to put its manufacturing expertise to use.

Last year, a Fallon affiliate sued Shawmut, blaming the company for allegedly mismanaging the joint venture and selling many fewer masks than anticipated. Shawmut soon after brought claims against Fallon. The company claimed that Fallon said Thermo Fisher Scientific Inc. would buy $150 million in masks over three years, prompting Shawmut to invest millions of dollars to make the masks, only for it to learn later that Fallon had not secured a commitment.

Both sides sought to dismiss all of the other side's claims. In a ruling last month, Suffolk County Superior Court Judge Kenneth Salinger dismissed most of the counts brought by the Fallon affiliate, while allowing most of those brought by Shawmut. The two sides will now continue to litigate the remaining claims, including potentially during a jury trial.

The judge allowed Shawmut's claims for intentional fraud, negligent misrepresentation and fraudulent inducement to move forward against Fallon, based on statements he allegedly made before the two sides executed on their contract. Other allegations related to post-contract statements he made also survived, though Judge Salinger dismissed Shawmut's claim against Fallon under the Massachusetts Consumer Protection Law and one other count.

"This ruling is consistent with Shawmut's view that the claims against Shawmut were just a preemptive smokescreen designed to obscure Fallon's conduct and to bully Shawmut into silence," Daniel Tighe, an attorney for Shawmut, said in a statement.

Tighe added that "once Joe Fallon received the media attention he had sought, he walked away from the project. Shawmut ended up spending $23 million dollars to produce high quality masks for which there were effectively no customers. The factory now sits idle, stocked with millions of unsold N95 masks."

Judge Salinger dismissed six of the Fallon affiliate's counts against Shawmut, including for breach of contract and breach of fiduciary duty, while keeping alive four others, including an allegation related to unjust enrichment.

A Fallon spokesperson said that while the decision narrows some of the issues in the case, "we remain confident that we will prevail on the merits."

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