COMMONWEALTH OF MASSACHUSETTS:
NORFOLK SUPERIOR COURT DIVISION
OF THE TRIAL COURT
CIVIL ACTION NO. 98-01597
MICHAEL J. YOUNG, as representative of
Andersen Consulting, LLP, a General Partnership,
J. BAKER, INC.
This is an action for declaratory relief, pursuant to Mass. Gen. Laws c. 231A, brought
by Andersen Consulting LLP ("Andersen Consulting")
against J. Baker, Inc. ("J. Baker") to determine whether Andersen Consulting was
in breach of contract or violated any duty owed to J. Baker when it assisted J. Baker in
the selection, design, customization, and implementation of a third-party retail computer
software package (the "Project").
Michael J. Young is a resident of Wellesley, County of Norfolk. He brings this action as
the representative of Andersen Consulting LLP, a general partnership consisting of
approximately 600 partners.
Andersen Consulting is a general partnership engaged in the business of providing
management and business consulting services to clients in a wide range of industries. It
has a principal place of business in Wellesley, County of Norfolk.
J. Baker is a Massachusetts corporation with its principal offices in Canton, County of
Norfolk. It is a diversified retailer of clothing and footwear, and its divisions include
the Casual Male Big and Tall stores and the Licensed Department Division.
In or about 1989, J. Baker determined that it needed a new computer-based merchandising
system (the ASystem@). It engaged Andersen Consulting to assist in the
selection, design, customization and implementation of such a System to be purchased from
a third party.
After reviewing a Merchandising System Analysis submitted by Andersen Consulting, J.
Baker decided to install a System using a third-party software package called Genesis.
Between 1989 and 1991, J. Baker and Andersen Consulting entered into a series of
agreements (collectively, the "Agreements") to assist J. Baker in the selection, design,
customization and implementation of the Genesis software package.
The Agreements provided that qualified leadership personnel from J. Baker would work,
and they in fact did work, jointly with Andersen Consulting employees at every stage of
the Project. Moreover, the Agreements provided that J. Baker would approve, and they in
fact did approve, the design of the System.
The System was completely functional by 1991, fully conforming to J. Baker's contractual requirements. During the period up to
and including 1991, it was commonplace to use two digits to represent the date field. No
provision in the Agreements, workplans, design specifications, or testing protocols
required anything other than two-digit year fields or referred to the year 2000. The
System contained all stated requirements with respect to year formats.
Andersen Consulting completely fulfilled its obligations under the Agreements, including
complying with J. Baker's request to make the
System operational as soon as possible, an event which, according to J. Baker's own calculations, would result in substantially
increased monthly profits. Because Andersen Consulting assisted J. Baker in implementing
the System in a timely manner, J. Baker was able immediately to reap considerable
J. Baker expressed great satisfaction with the performance of its System, describing the
System in its 1993 Annual Report as "already
contribut[ing] to a significantly improved turn on Inventory for [several divisions]." In fact, J. Baker was so pleased that it agreed
to, and did in fact, provide Andersen Consulting with favorable references over the years
with respect to the System.
During the relevant 1989-1991 time period, making J. Baker's System year 2000 compliant was not economically
viable. At the time, the only mainframe software packages available to support, J. Baker=s requirements were not year 2000 compliant.
Customizing any of the then-available software packages would have been significantly more
expensive to J. Baker than the costs of repairs that J. Baker, benefitting from subsequent
advances in year 2000 remediation technology, has incurred to date, Customizing the System
for year 2000 functionality would have also resulted in lengthy delays and the permanent
loss of significant financial benefits for J. Baker.
By demand letter dated June 18, 1998 (a copy of which is attached as Exhibit A), counsel
for J. Baker notified the plaintiff of J. Baker's
claim that plaintiff was negligent, in breach of contract, in breach of the covenant of
good faith and fair dealing, guilty of misrepresentations and of unfair trade practices in
connection with the System recommended for and delivered to J. Baker. The plaintiff denies
all allegations contained in this letter.
An actual controversy therefore exists between the parties as to the parties' rights and obligations under the Agreements and,
specifically, the plaintiff's responsibility for
making the System year 2000 compliant. The plaintiff contends, and the defendant disputes,
that the System which Andersen Consulting assisted J. Baker in selecting, designing,
customizing and implementing fully conformed with all applicable requirements of J. Baker.
The plaintiff further contends, and the defendant disputes, that the defendant is barred
from seeking relief for the reasons that: (a) the defendant has sustained no damages
because the costs of making its System year 2000 compliant in 1989-1991 would have
exceeded the costs of its repairs to date; (b) the statute of limitations on all of
defendant's claims has expired; and (c) the
defendant cannot recover damages under the economic loss doctrine applicable under
The plaintiff is compelled to bring this action to protect its reputation from baseless
claims of fraud, misrepresentation, and other wrongdoing alleged by the defendant. The
plaintiff has attempted to engage in numerous negotiations with the defendant to try to
resolve the dispute. Because plaintiff's efforts
have been unsuccessful, the only course of action left to plaintiff is to bring this
action and request that the Court resolve the matter.
Claim for Relief
The plaintiff asks this Court to determine and declare that the plaintiff
fulfilled all its obligations to J. Baker under the terms of the relevant Agreements.
The plaintiff asks this Court to determine and declare that there was no conduct by the
plaintiff that constituted negligence, misrepresentation, breach of contract, breach of
the covenant of good faith and fair dealing, or unfair trade practices as alleged by J.
Baker in Exhibit A.
WHEREFORE, the plaintiff prays that this Court:
(a) determine and declare that plaintiff Andersen Consulting LLP fulfilled all its
obligations to J. Baker and that plaintiff is not responsible for any costs associated
with making year 2000 compliant the merchandising System owned and operated by J. Baker;
(b) for such other and further relief as this Court deems just.
By its attorneys,
Richard W. Renehan (BBO No. 416680)
Michael S. Greco (BBO No. 208480)
Le-Huyen T. Pham (BBO No. 634037)
HILL & BARLOW
A Professional Corporation
One International Place
Boston, Massachusetts 02110
Dated: August 28, 1998