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This case presented a question of
statutory interpretation in light of conflicting
regulations promulgated by successive State Treasurers.
Specifically at issue was the interpretation of the
credit balance exemption of the Massachusetts Abandoned
Property Statute, G.L. c. 200A and related regulations.
In 2001, Treasurer O’Brien issued regulations which were
read to include uncashed accounts payable checks within
the definition of credit balances, which were not to be
considered abandoned property under the statute. But
O’Brien’s successor, Timothy Cahill, issued his own
“emergency” amendments to O’Brien’s regulations in 2004,
with the intention of excluding uncashed checks from the
definition of credit balances.
In 2002, Biogen filed an abandoned
property report in accordance with the then-existing
regulations. An audit of the company was commenced by
the Commonwealth in September 2003, with an initial
meeting to occur in February 2004. The audit proceeded
in accordance with the revised regulations, which were
applied retroactively back to 1981, when Biogen first
incorporated in Massachusetts. Biogen brought this
action as a challenge to the audit, claiming that
issuance of the revised regulations was beyond the
authority of the Treasurer and were thus invalid.
The court held that the Treasurer’s
interpretation of G.L. c. 200A was subject to judicial
review. Although the Treasurer’s interpretation is
usually entitled to deference, such deference was
tempered in this case by the fact that the |
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current Treasurer immediately followed
another in office – one who was directly involved in the
passage of the legislation and who had much greater
familiarity with its administrative application. Id.
at *4. Turning to the statute itself, the court
emphasized that the purpose of statutory interpretation
is to give effect to the intent of the legislature. When
two readings of a statute are possible, the court
“chooses the reading that best comports with the
statute’s apparent intent and purpose, and it rejects a
reading that would hobble the statute’s effectiveness.”
Id. at *5.
The court first held that Cahill’s
regulations could not be applied retroactively. The
propriety of the Biogen audit would therefore be
evaluated by reference to the previous O’Brien
regulations – i.e., those that exempted uncashed checks
from the definition of abandoned property. The court
then turned to the question of whether these regulations
were consistent with the statute, focusing on “whether
Treasurer O’Brien went clearly beyond the Legislature’s
intent.” Id. at *8. While finding it “a very
close issue,” the court ruled that O’Brien’s regulations
best comport with the statute’s apparent intent and
purpose. To reach this result, the court applied “a
liberal, even if not literally exact, interpretation of
certain words … as being necessary to accomplish the
purpose indicated by the works as a whole … rather than
one which will defeat the statutory purpose.” Id.
Thus, because the Biogen audit was not conducted in
accordance with the O’Brien regulations, the court
reversed Treasurer’s approval of the audit.
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