A Legally Induced Comma

Lawyers can sometimes be mundane in their construction of contracts, the the point where their scrutiny can appear pointless. Beyond just the contents, there is endless amount of time spent on syntax, grammar, and even punctuation.

There might be good reason for this, as the interpretation of these contracts can have a significant impact. A recent American cases focusing on commas has illustrated this quite clearly. In O’Connor v. Oakhurst Dairy, the United States Court of Appeals For the First Circuit held that delivery drivers of a dairy company in Maine fell into an overtime exemption under the state’s employment laws. The provision for overtime states,

3. Overtime rate. An employer may not require an employee to work more than 40 hours in any one
week unless 1 1/2 times the regular hourly rate is paid for all hours actually worked in excess of 40 hours in
that week. The regular hourly rate includes all earnings, bonuses, commissions and other compensation that
is paid or due based on actual work performed and does not include any sums excluded from the definition of
“regular rate” under the Fair Labor Standards Act, 29 United States Code, Section 207(e).

The overtime provision of this section does not apply to:

F. The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or
distribution of:
(1) Agricultural produce;
(2) Meat and fish products; and
(3) Perishable foods.

[emphasis added]

This provision does not provide any definition of who is an employee, which is found elsewhere in the act, with numerous exceptions explicitly stated,

3. Employee. “Employee,” any individual employed or permitted to work by an employer…

[emphasis added]

There are no explicit exceptions under the act for delivery drivers, and the drivers claimed that although they handle perishable foods, they are not packing them. As this provision is focused on the single activity of packing, either for shipping or distributing, they do not fall under the exemption, and would be protected by the state’s overtime laws.

In contrast, the employer claimed that the the provision refers to two different and distinct activities, “packing for shipment,” and
“distributing of,” perishable foods, including dairy, which would put them outside of the overtime protections.

The court stated,

Each party recognizes that, by its bare terms, Exemption F raises questions as to its scope, largely due to the fact that no comma precedes the words “or distribution.” But each side also contends that the exemption’s text has a latent clarity, at least after one applies various interpretive aids. Each side then goes on to argue that the overtime law’s evident purpose and legislative history confirms its preferred reading.

We conclude, however, that Exemption F is ambiguous, even after we take account of the relevant interpretive aids and the law’s purpose and legislative history. For that reason, we conclude that, under Maine law, we must construe the exemption in the narrow manner that the drivers favor, as doing so furthers the overtime law’s remedial purposes.

The court looked at canons, or linguistic conventions, invoking the “rule against surplusage” to provide meaning to each word in the statute. The employer used this to claim that shipment and distribution are synonyms, and therefore their distinctions cannot be reduced to a type of packing. The employer also referred to the linguistic convention of using a conjunction such as an “and” or an “or” to mark the last item on a list. Its absence before packing but after shipping and before distribution provides an interpretation of separate activities. Finally, the employer pointed to the lack of comma before the word “distribution.”

The employees provided a different interpretation, claiming that “shipment” and “distribution” are distinct activities, referring respectively to the outsourcing to a third-party for the delivery of goods, or a direct in-house transportation of goods by the seller. They pointed to another Maine statute which refers to “manufacture, distribution or shipment” as separate activities on a list. They also invoked a gerund exception to grammar, where the non-gerund nouns of “distribution” and “shipment” should be interpreted using the parallel usage convention. This interpretation would call for those non-gerund nouns to be interpreted as the object of the preposition for the entire exempt activity of “packing.”

The final submission of the employees focused on the comma. Although convention would caution against using serial commas as a set off for a final list item, lists with modified or complex terms can be written in a manner to avoid ambiguity. The Maine Legislative Drafting Manual states,

Section 2. Commas
Commas are probably the most misused and misunderstood punctuation marks in legal
drafting and, perhaps, the English language. Use them thoughtfully and sparingly.

A. Series. Although authorities on punctuation may differ, when drafting Maine law or
rules, don’t use a comma between the penultimate and the last item of a series.

Do not write:
Trailers, semitrailers, and pole trailers

Trailers, semitrailers and pole trailers

Be careful if an item in the series is modified. For example:

Trailers, semitrailers and pole trailers of 3,000 pounds gross weight or less
are exempt from the licensing provisions.

This textual interpretation still did not address the lack of a conjunction before “packing,” so the employees also cited Scalia & Garner,

[s]ometimes drafters will omit conjunctions altogether between the enumerated items [in a list],” in a technique called “asyndeton…”

However, no other Maine statute has every used this technique, leaving the court deeply unsatisfied. Ultimately they abandoned the textual analysis as a draw, and turned to a purposive approach using a liberal construction to further the remedial purpose of overtime law to provide pay protections to employees.

The case settled a year later for $5 million, and the state amended the act to replace many of the commas with semi-colons, to provide greater clarity. The New York Times remained unimpressed, stating, “So now we get to replace Oxford comma pedantry with semicolon pedantry.”

All of this ado about commas may be enough to put a reader into a coma. Still, Canadian cases are not immune to such exercises, despite the Court of Appeal for British Columbia stating last year in Adam v. Insurance Corporation,

[40] The strict grammatical rule of construction whereby the restrictive clause is limited to modifying the immediate antecedent may give way when the context requires a deviation from the rule: Rex v. Stronach1928 CanLII 448 (ON CA)[1928] 3 D.L.R. 216 at 218 (Ont. C.A.). According to Ruth Sullivan in Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis Canada, 2014) at 470, Canadian courts are “rightly cautious of attaching too much significance to a single punctuation mark”. The Supreme Court of Canada has said, “[a] debate on punctuation cannot take the place of an interpretation based on the legislative context and ordinary meaning of words”: Laurentide Motels Ltd. v. Beauport (City)1989 CanLII 81 (SCC)[1989] 1 S.C.R. 705 at 755.

[emphasis added]

The Ontario Superior Court of Justice recently released a decision in Austin v Bell Canada, involving a class action around an annual indexing provision of a pension plan, which did largely center around a single comma. The calculation of the plan hinged on one particular provision of the plan which stated,

s. 1.29 ‘Pension Index’ means the annual percentage increase of the Consumer Price Index, as determined by Statistics Canada, during the period of November 1 to October 31 immediately preceding the date of the pension increase.
[emphasis added]

This Pension Index must be calculated every year, and is a measurement of increases built into a pension to account for cost-of-living. The single comma after the word “Consumer Price Index” gave rise to divergent interpretations.

The Plaintiff claimed that the comma before the qualifying words required the application of “Consumer Price Index,” the use of the term “as determined by Statistics Canada” should apply to both the CPI and the annual percentage increase. This would peg the the increases of the pension in question to the determinations made by Statistics Canada, a third-party who does not administer the pension plan. As the provision was drafted by the Defendant, the administrator of the plan, they invoked contra proferentum to have the provision read against their interests.

The Defendant, on the other hand, stated that the term should be interpreted in the ordinary grammatical meaning of the sentence structure and in the context of the plan as a whole, pointing to the Manitoba Court of Appeal’s decision in Dinney v. Great-West Life Assurance Co.

58 A fundamental rule for interpreting contracts is that the contract is to be construed as a whole, and the words of a contract, being the words used by the parties, are to be given their plain, ordinary and literal meaning so as to determine the objective intent of the parties at the time of execution of the contract. Resort is made to the entire document so as to ensure that the interpretation of a particular term is contextual.

The Defendants pointed to a separate provision of the plain that explains the calculation of the annual indexation. This provision provides two methods, the greater of a rounding up o the nearest whole number up to 2%, or 60% of the Pension Index in s. 1.29, or rounded to two decimal places to a maximum of 4%. The evidence of an actuary was introduced to illustrate that the Plaintiff’s interpretation was mathematically impossible, leading the court to state,

[60] There is no evidence that contradicts this statement of mathematical fact.

[69] I do not know why s. 1.29 is phrased in the awkward way that it is. I certainly do not know why a comma had to be inserted before the modifying phrase “as determined by Statistics Canada”. It was not necessary, since that modifier applies only to the CPI which is the last antecedent before the modifying clause. It was likely punctuated that way unconsciously; I do not believe it was a legally induced comma.
[emphasis added]

Given that the calculation provision of the plain was drafted with enormous mathematical precision, dependent on rounding of numbers and the number of decimals, the court was understandably unwilling to interpret the plan in a manner that would render it completely meaningless. They cited in approval the Supreme Court of Canada’s decision in National Trust Co. v Mead,

National Trust submits that the doctrine of contra proferentem is inapplicable here because the construction put on the Agreement by the Court of Appeal would make the inclusion of the personal covenant pointless. It could have no effect. Since the Court should strive to give meaning to the parties’ agreement, it should reject an interpretation that would render one of its terms ineffective.

As a result, the court did not read the term regarding Statistics Canada as displacing entirely another provision of the plan. Doing so would effectively gut one of the key terms of the plan, and ignore the context of the calculation clause.

For lawyers, it might be of some relief that courts will provide a meaningful and purposive interpretation of terms, even if punctuations are inserted without conscious deliberation. For those who receive and read these confusing terms without any ability to edit, modify, or question them before a dispute arises, it may not be of much assurance that the result of a forehead hitting the keyboard precisely where the comma key lays is of no consequence at all.

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