Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

The company filed civil claims under Massachusetts state laws and the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1961 after discovering a scheme under which its employees and outsiders duped it into paying fraudulent invoices. Other defendants settled. After a trial, a former employee and an outsider, who advanced funds for the scheme, were found liable to the company. The First Circuit affirmed. There was sufficient evidence that the outsider knowingly and willfully participated in the scheme to support a verdict under RICO. That the jury did not find her liable for conspiracy to violate RICO is irrelevant. The evidence also supported a verdict of common law fraud; any error in a "willful blindness" jury instruction was harmless. Inclusion of anticipated attorney fees in an appeal bond was appropriate.

After successfully defending an appeal from a verdict that it had not infringed a song copyright, ASCAP obtained an award of about $62,000 in attorney fees. The First Circuit affirmed. The song copyright was timely registered and, in any case, failure to timely register would not bar an award of fees to a party successfully defending an infringement claim. ASCAP was a prevailing party under 17 U.S.C. 505 and the award was reasonable.

In 2009 the bankruptcy court revoked a 2000 Chapter 7 discharge, finding fraud with respect to a 1997 divorce settlement. The district court and First Circuit affirmed. While the debtor "largely avoided explicit false statements," the debtor allowed the trustee and the court to believe that he was turning over whatever he received to secured creditors, which was not true, and he withheld information about accelerated payments under the divorce settlement.

The company purchased a disability benefits plan, regulated by the Employee Retirement Income Security Act. A part-owner and employee of the company received benefits for about four years before the insurer terminated benefits because her non-salary income was higher than her salary income had been. The plan defines "pre-disability earnings" as: "your monthly rate of earnings from the employer in effect just prior to the date disability begins" and "basic annual earnings" as the amount reported by the policyholder on a W-2, excluding commissions. The company argued that a provision allowing termination of benefits when "current earnings" reach a percentage of pre-disability earnings referred to earnings from all sources. The district court held that the employee was not entitled to benefits but denied the insurer reimbursement. The First Circuit reversed, in favor of the employee, finding that the insurer's interpretation of the plan was unreasonable.

The insured was treated as an outpatient for "mental or nervous disorder" in 2005-2007, allegedly incurring expenses of more than $125,000. In 2006 the company informed her that it had already paid $8,506 and would pay only $1,494 more toward the lifetime cap of $10,000. The district court held that the contract was not ambiguous and that the limit was not prohibited by New Hampshire law. The First Circuit affirmed. The policy limit for mental health benefits, stated as "the amount shown on page 3" is not ambiguous simply because that page refers to both the "Mental and Nervous Disorder Limit" of $10,000, and the "Maximum Benefit Limit Per Covered Person" of $1 million. A state law prohibiting unfair trade practices, including discrimination in insurance does not provide a private right of action until after the claimant obtains a favorable ruling from the insurance commissioner.

The plaintiff, employed by U.S. Customs and Border Patrol, was observed taking a security pass from a car. He shredded the pass, without reporting to his superiors. The Puerto Rico Police Department arrested, charged, and investigated, but because the employee was already under investigation for misconduct, an agent of the Department of Homeland Security (DHS) was dispatched and observed some of the ensuing questioning and hearing, without participating. The case against the employee was dismissed. The employee's claim of malicious prosecution through the DHS agent was rejected on summary judgment. The First Circuit affirmed, looking to state law, as required by the Federal Torts Claims Act. The DHS agent was not actively instrumental in the investigation and there was no evidence of malice.

The employee's complaint under the Americans with Disabilities Act was dismissed. The First Circuit affirmed, holding that the employee was required to submit to alternative dispute resolution. After examining Puerto Rico contract law and the Federal Arbitration Act, 9 U.S.C. 1, the court concluded that continued employment of the at-will employee was sufficient consideration to support the agreement, despite the fact that the agreement did not bind both parties to identical procedures. The "threat" of termination did not amount to intimidation that would invalidate consent; state law does not prohibit termination without just cause. The employee's claim that she did not understand the document because of limited English did not constitute an excuse and the agreement was not unconscionable.

The defendant was convicted of use of an unauthorized access device, 18 U.S.C. 1029(a)and aggravated identity theft, 18 U.S.C. 1028A. The First Circuit affirmed. Evidence of the defendant's use of another credit card (not at issue), after the victim's death, was properly admitted on cross-examination, as relevant to the defendant's credibility. Credit card records were also properly admitted; a jury instruction that "access device" could include a card or an account number did not create potential for confusion. The court also rejected a speedy trial argument and claims relating to the timing of rulings.

Rhode Island discontinued its practice of pooling funds from inmate accounts for investment and paying inmates interest on their accounts. The district court rejected claims of taking and due process violations. The First Circuit affirmed. Noting the limited rights of prisoners and that, at common law, prisoners were not paid for their labor, the court concluded that state law creates no property right in earning interest. Prior policy was "administrative generosity" and did not obligate the state to continue the practice.

The defendant, convicted of unlawful possession of a firearm, was denied a new trial by a Massachusetts state court, which rejected a claim of ineffective assistance of counsel. The court considered the record, affidavits, and court notes, but did not hold an evidentiary hearing. The state supreme court denied review. The federal district court denied an evidentiary hearing and rejected a habeas corpus petition on its merits. The First Circuit affirmed denial of an evidentiary hearing, stating that the defendant's claims were adjudicated on the merits in state court.