Demoulas v. Demoulas Super Mkts., Inc.

Supreme Judicial Court of Massachusetts · 1998 · Corporations

428 Mass. 543 (1998)

Updated August 22, 2026

CorporationsShareholder derivative actionJudicial recusalRestitutiontimelinessCanon 3appearance of impartialityabuse of discretion

Facts

This case arose from a 1990 shareholder derivative action alleging that the defendants diverted corporate opportunities from DSM and Valley to other entities in breach of fiduciary duties. The defendants had previously sought recusal, lost, and then after judgment and during the appeal in Demoulas I began a fifteen-month investigation into alleged ex parte contact and improper conduct by the trial judge and plaintiff's lead counsel. Days before scheduled asset transfers under the judgment, the defendants filed another recusal motion supported by affidavits alleging that the judge and counsel had limited social contact at a public restaurant owned by the judge's husband during the trial. On remand from Demoulas I, the trial judge entered a supplemental judgment granting tax credits but making no specific provision for investment credits.

Issue

Whether the trial judge erred in denying the defendants' posttrial recusal motion and request for relief from judgment without referring the matter to another judge for an evidentiary hearing, where the allegations of extrajudicial conduct were disputed and the motion was filed very late. Also, whether the supplemental judgment on remand had to account for additional future tax liabilities and investment credits so that the defendants would not repay more than their actual gains.

Rule

A judge's denial of a recusal motion is ordinarily reviewed for abuse of discretion. A recusal motion filed after trial is presumptively untimely absent good cause, and where the motion comes at the end of complex litigation, the movant bears a strong burden to show that the grounds could not have been raised earlier. Even assuming the affidavits are true, no evidentiary hearing before another judge is required when the alleged conduct consists of limited public social contact and the allegations are too insubstantial to establish a reasonable basis for questioning impartiality. In restitution for breach of fiduciary duty, defendants must receive credit for taxes and investments so they are not required to repay more than their actual gains, including reimbursement for additional taxes later shown to be due.

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

After a three-year bench trial in Boston over a closely held company, the court entered a $70 million judgment against Nolan Pierce. Fourteen months later, and two days before stock transfers were scheduled, Nolan moved to recuse the trial judge based on reports he had heard during the trial that the judge had occasionally exchanged pleasantries with opposing counsel at a public café in Cambridge.

What is the strongest argument for denying Nolan's motion?

Explanation. The governing rule is that recusal motions filed after trial are presumptively untimely absent good cause, especially in complex litigation at a late stage. A movant who knew or suspected the facts earlier bears a strong burden to show the grounds could not have been raised sooner. Last-minute filing after an adverse judgment supports denial.