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

Two individuals, along with other plaintiffs, filed suit under Section 7 of the Clayton Act to block a proposed merger between two airlines. After their case was filed, the U.S. Department of Justice, joined by several states and the District of Columbia, brought a separate action challenging the same merger. Both cases were assigned to the same judge in the U.S. District Court for the District of Massachusetts, but were not consolidated. The district court found that only two of the original plaintiffs had standing, dismissing the others. The plaintiffs’ request to consolidate their case with the DOJ’s was denied.The DOJ case proceeded to trial first, resulting in a bench trial judgment that the merger violated the Clayton Act, and the court permanently enjoined the merger. The airlines appealed but later abandoned the merger and dismissed their appeal. As a result, the district court dismissed the remaining plaintiffs’ case as moot, since the relief they sought had already been granted in the DOJ case. The dismissed plaintiffs then moved for attorneys’ fees and costs, arguing they were prevailing parties under Section 16 of the Clayton Act because their efforts contributed to the outcome.The United States Court of Appeals for the First Circuit reviewed whether the plaintiffs qualified as prevailing parties eligible for attorneys’ fees. The court held that, under the standard set by Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, a party must obtain a judicially sanctioned change in the legal relationship of the parties, such as a judgment on the merits or a consent decree. Because the plaintiffs’ case was dismissed as moot without a judgment on the merits, and they were not beneficiaries of the injunction in the DOJ case, the court concluded they were not prevailing parties. The First Circuit affirmed the district court’s denial of attorneys’ fees and costs. View "Garavanian v. JetBlue Airways Corp." on Justia Law

The case involves a dispute between the former owner-operator of a professional baseball franchise in Puerto Rico and the league, its president, and other franchise owners. The plaintiffs allege that the defendants conspired to force the former owner to relinquish control of the franchise, violating the Sherman Act, a federal civil rights statute, and various Puerto Rico laws. The plaintiffs claim that the defendants' actions were in retaliation for the former owner's public criticism of the conditions at the team's stadium and his proposal to move the team to another municipality.The United States District Court for the District of Puerto Rico dismissed the plaintiffs' Sherman Act claims, citing the "business of baseball" exemption. The court also ruled that the plaintiffs' claims under Puerto Rico's antitrust and fair competition laws were preempted by federal law. Additionally, the court dismissed the plaintiffs' federal civil rights claim on res judicata grounds, based on a prior judgment from the Superior Court of San Juan. The court then declined to exercise supplemental jurisdiction over the remaining Puerto Rico law claim.The United States Court of Appeals for the First Circuit affirmed the dismissal of the Sherman Act claims, agreeing that the "business of baseball" exemption applied to the Puerto Rico professional baseball league. However, the court vacated the District Court's dismissal of the Puerto Rico antitrust and fair competition claims, finding that the District Court had incorrectly applied the Supremacy Clause. The court also reversed the dismissal of the federal civil rights claim, concluding that the District Court had misapplied the doctrine of res judicata. Consequently, the court reversed the dismissal of the remaining Puerto Rico law claim, as a federal claim remained in the case. View "Cangrejeros de Santurce Baseball Club, LLC v. Liga de Beisbol Profesional de Puerto Rico, Inc." on Justia Law

In 2023, James Broad and Rebecca McCrensky began operating a car-rental agency, Becky's Broncos, LLC, on Nantucket Island without the necessary local approvals. The Town of Nantucket and the Nantucket Town Select Board ordered Becky's to cease operations. Becky's sought preliminary injunctive relief in the District of Massachusetts to continue their business.The District Court for the District of Massachusetts denied Becky's request for a preliminary injunction. The court found insufficient evidence of discriminatory effect under the dormant Commerce Clause and concluded that Becky's had not demonstrated a likelihood of success on the merits of its claims. Becky's appealed the decision.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's denial of the preliminary injunction. The appellate court held that Becky's did not show a likelihood of success on the merits of its dormant Commerce Clause claim, as the ordinance did not discriminate against out-of-state businesses. The court also found that Becky's failed to establish a likelihood of success on its antitrust claims due to a lack of a concrete theory of liability. Additionally, Becky's procedural due process argument was rejected because it did not establish a property interest in the required medallions. Lastly, the court held that the ordinance survived rational basis review under substantive due process, as it was rationally related to legitimate government interests in managing traffic and congestion on the island. View "Becky's Broncos, LLC v. Town of Nantucket" on Justia Law

Local Puerto Rico merchants brought unfair competition claims against major big-box retailers, alleging that during the COVID-19 pandemic, Costco Wholesale Corp. and Wal-Mart Puerto Rico, Inc. violated executive orders limiting sales to essential goods. The plaintiffs claimed that the defendants continued to sell non-essential items, capturing sales that would have otherwise gone to local retailers, and sought damages for lost sales during the 72-day period the orders were in effect.The case was initially filed as a putative class action in Puerto Rico's Court of First Instance. Costco removed the case to federal district court under the Class Action Fairness Act (CAFA). The district court denied Costco's motion to sever the claims against it and also denied the plaintiffs' motion to remand the case to state court. The district court dismissed most of the plaintiffs' claims but allowed the unfair competition claim to proceed. However, it later denied class certification and granted summary judgment for the defendants, concluding that the executive orders did not create an enforceable duty on the part of Costco and Wal-Mart.The United States Court of Appeals for the First Circuit reviewed the case on jurisdictional grounds. The court held that CAFA jurisdiction is not lost when a district court denies class certification. It also held that CAFA's "home state" exception did not apply because Costco, a non-local defendant, was a primary defendant. However, the court found that CAFA's "local controversy" exception applied because the conduct of Wal-Mart Puerto Rico, a local defendant, formed a significant basis for the claims. The court concluded that the district court did not abuse its discretion in denying Costco's motion to sever and determined that the entire case should be remanded to the Puerto Rico courts. The court reversed the district court's denial of the motion to remand, vacated the judgment on the merits for lack of jurisdiction, and instructed the district court to remand the case to the Puerto Rico courts. View "Kress Stores of Puerto Rico, Inc. v. Wal-Mart Puerto Rico, Inc." on Justia Law

In 2020, American Airlines and JetBlue Airways formed the Northeast Alliance (NEA), a joint venture to operate as a single airline for most routes in and out of Boston and New York City. The U.S. Department of Justice (DOJ), along with several states, sued to stop the NEA, claiming it violated the Sherman Act by unreasonably restraining competition. After a bench trial, the district court ruled in favor of the plaintiffs, finding that the NEA reduced competition and output without sufficient procompetitive benefits. American Airlines appealed the decision.The district court found that the NEA caused American and JetBlue to stop competing on overlapping routes, leading to decreased capacity and reduced consumer choices. The court also found that the NEA's schedule coordination and revenue-sharing provisions effectively merged the two airlines' operations in the Northeast, which resembled illegal market allocation. The court rejected the airlines' claims that the NEA increased capacity and provided significant consumer benefits, finding these claims unsupported by reliable evidence.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's decision, agreeing that the NEA had substantial anticompetitive effects. The appellate court found no clear error in the district court's factual findings and upheld its application of the rule of reason. The court concluded that the NEA's harms outweighed any procompetitive benefits, which could have been achieved through less restrictive means. The judgment of the district court was affirmed, and the NEA was enjoined from further implementation. View "US v. American Airlines Group Inc." on Justia Law

The First Circuit affirmed the decision of the district court entering summary judgment in favor of Allstate Insurance Company and dismissing the counterclaims brought by two of Allstate's former agents - James Fougere and Sarah Brody-Isbill - and A Better Insurance Agency, Inc. (ABIA) (collectively, Appellants), holding that there was no error.At issue in the underlying case were spreadsheets that Allstate alleged contained trade secrets misappropriated by Brody-Isbill and Fougere, thus breaching their contracts with Allstate. Allstate filed suit alleging claims for, among other things, breach of contract and trade secrets, violations of the Defend Trade Secrets Act, 28 U.S.C. 1836. Appellants counterclaimed, alleging claims for, inter alia, wrongful interference with contractual relations and violations of Mass. Gen. Laws ch. 93A. The district court granted summary judgment for Allstate and dismissed Appellants' counterclaims. The First Circuit affirmed, holding that the district court (1) did not err in dismissing Appellants' counterclaims; and (2) did not abuse its discretion in granting summary judgment to Allstate on liability for its trade secret and contract claims against Appellants. View "Allstate Insurance Co. v. Fougere" on Justia Law

The First Circuit reversed the order of the district court dismissing Plaintiffs' federal antitrust claims concerning a standard exclusive dealing arrangement between Triple-S Salud, Inc. and Dr. Rodriguez-Blazquez and companies owned by him (Urologics) incident to the maintenance of closed healthcare networks, holding that the complaint, in part, stated a plausible claim to relief.Plaintiffs, who were under contract with Triple-S to provide urology services to urology patients in the area, asserting that the exclusive dealing arrangements in this case caused them to lose business and made it more difficult for patients to obtain urology services in Western Puerto Rico. The district court dismissed the claims. The First Circuit (1) reversed the district court's order dismissing Plaintiffs' federal antitrust claims concerning the exclusive dealing arrangement between Triple-S and Urologics, holding that Plaintiffs adequately stated a claim to relief that was plausible on its face; and (2) affirmed the district court's order dismissing Plaintiffs' federal antitrust claims concerning a different arrangement, holding that the district court properly dismissed these claims. View "Vazquez-Ramos v. Triple-S Salud, Inc." on Justia Law

The First Circuit affirmed the judgment of the district court judge confirming an arbitration award, holding that none of Appellant's legal theories for reversal were meritorious.KPJ Associates, LLC ran a daycare in Maine as a franchisee of Toddle Inn Franchising, LLC. When KPJ ended the franchise agreement on Friday and told Toddle it would open another daycare at the same site the following Monday Toddle filed a federal complaint alleging unfair competition under the federal Lanham Act and breach of contract and trade secret misappropriation under Maine law. Toddle then moved to compel arbitration and stay court proceedings. The judge compelled arbitration, and the arbitrator found for Toddle. The First Circuit affirmed, holding that the district court judge (1) did not lack subject matter in this case because Toddle did not present a frivolous Lanham Act claim; (2) did not err in ruling that Toddle did not waive its right to arbitrate by its litigation conduct; and (3) did not err in awarding additional attorneys' fees and costs. View "Toddle Inn Franchising, LLC v. KPJ Associates LLC" on Justia Law

The First Circuit affirmed the decision of the district court dismissing this lawsuit challenging Defendants' alleged manipulation of natural gas pipeline capacity for failure to state a claim, holding that any differences between two cases filed with regard to this issue did not warrant a different outcome.In 2017, a group of economists published a report alleging that Defendants were able to increase electricity prices in New England by buying up and refusing to release excess transmission capacity in the Algonquin pipeline. In response, a group of electricity end consumers filed suit alleging violations of federal and state antitrust and unfair competition law. Thereafter, PNE Energy Supply LLC, a wholesale energy purchaser, filed this lawsuit also challenging Defendants' conduct in neither using nor releasing reserved pipeline capacity. The district court dismissed the electricity consumers' suit. The First Circuit affirmed, holding that the antitrust claims failed on their merits because Defendants' conduct occurred pursuant to a tariff approved by the Federal Energy Regulatory Commission. At issue was whether the logic from the electricity consumers' suit also applied to this lawsuit brought by PNE. The First Circuit held that the holding in the first lawsuit controlled and affirmed the district court's dismissal of PNE's lawsuit. View "PNE Energy Supply LLC v. Eversource Energy" on Justia Law

The First Circuit reversed the district court's grant of summary judgment to TLS Management and Marketing Services, LLC (TLS) on its breach of contract claims against Ricky Rodriguez-Toledo, ASG Accounting Solutions Group, Inc. (ASG), and Global Outsourcing Services, LLC (GOS) and the court's finding that Rodriguez and ASG were liable for misappropriation of trade secrets, holding that TLS failed to prove its trade secret claims, and the nondisclosure agreements were unenforceable.Rodriguez was the founder of ASG, a company that, like TLS, offered services in tax planning. ASG signed a subcontractor agreement with TLS that included a nondisclosure provision. Rodriguez later began working for TLS and signed a nondisclosure agreement. After his departure from TLS Rodriguez provided tax services in competition with TLS through ASG and GOS. TLS alleged that Rodriguez and ASG misappropriated TLS's trade secrets and that Rodriguez, ASG, and GOS breached their nondisclosure agreements. The district court granted summary judgment to TLS on the breach of contract claims. After a non-jury trial on the trade secret claims, the district court found in favor of TLS. The First Circuit reversed, holding (1) TLS failed to satisfy its burden to prove the existence of trade secrets; and (2) the nondisclosure agreements were so broad as to be unenforceable. View "TLS Management & Marketing Services, LLC v. Rodriguez-Toledo" on Justia Law