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

The plaintiffs, who were long-time friends of the defendants, invested significant sums in a biopharmaceutical company controlled by the defendants. The defendants did not disclose that the company was in serious financial distress, under a substantial obligation to a lender, and prohibited from incurring additional debt. The investment was structured through promissory notes, which included false warranties regarding the company’s financial status and claimed the formation of a new entity that never materialized. Instead of funding a new venture, the defendants used the investment to pay off existing company debt. Less than two years later, the company declared bankruptcy, making the notes essentially worthless.The plaintiffs brought claims under federal and Massachusetts securities laws, the Massachusetts consumer protection statute, and for common law fraud and negligent misrepresentation in the United States District Court for the District of Massachusetts. The defendants moved to dismiss the action, relying on a forum selection clause in the promissory notes requiring litigation in Delaware courts. The district court granted the motion and dismissed the case without prejudice, concluding that the clause applied to the plaintiffs’ claims.On appeal, the United States Court of Appeals for the First Circuit reviewed the dismissal de novo. The plaintiffs argued that their claims did not “arise out of” the notes and that the forum selection clause was unenforceable as contrary to Massachusetts public policy. The First Circuit rejected both arguments, holding that the claims arose from the notes and that the plaintiffs did not meet the heavy burden required to invalidate the clause on public policy grounds. The First Circuit affirmed the district court’s dismissal without prejudice, leaving the plaintiffs free to pursue their claims in the contractually designated Delaware courts. View "Manzo v. Wohlstadter" on Justia Law

The plaintiff filed a putative class action against the Treasurer of the Commonwealth of Massachusetts, challenging the Massachusetts Disposition of Unclaimed Property Act under the Takings Clause of the Fifth Amendment. He alleged that the Act’s provisions regarding payment of interest on unclaimed property resulted in an uncompensated taking of his private property for public use. The plaintiff’s complaint included evidence that the state held property in his name, but did not explain his connection to the listed address or further describe the property. He had not filed a claim to recover the property through the statutory process.The United States District Court for the District of Massachusetts dismissed the action, finding that the plaintiff lacked standing to seek injunctive or declaratory relief since he did not demonstrate any future harm, and that the Commonwealth had not waived its Eleventh Amendment immunity. The district court also concluded that the plaintiff failed to state a plausible claim for relief under the Takings Clause, reasoning in part that the statute provides a mechanism for reclaiming the property in full and that any taking resulted from the plaintiff’s own neglect. The district court did not address the ripeness argument raised by the Treasurer.Upon review, the United States Court of Appeals for the First Circuit affirmed the district court’s dismissal. The appellate court held that if the plaintiff’s challenge was to the statutory interest rate, his claim was not ripe, as he had not yet made a claim for the property or been denied interest. Alternatively, if the claim was that a taking had already occurred when the state took possession, he lacked standing to seek prospective relief because any injury was in the past and not ongoing. The court thus affirmed the dismissal for lack of Article III jurisdiction. View "Narrigan v. Goldberg" on Justia Law

The appellant worked for the appellee as an information technology employee in Boston for over twenty-five years. In August 2019, the company placed her on a three-month performance improvement plan (PIP), which she completed successfully. Approximately ten months after completing the PIP, she resigned from her position. She subsequently brought suit against her former employer, claiming, among other things, that she was subjected to unlawful age discrimination when she was placed on the PIP and then constructively discharged.The United States District Court for the District of Massachusetts granted summary judgment to the employer. The court found that no reasonable factfinder could conclude that the PIP constituted an adverse employment action or that the circumstances of her resignation amounted to a constructive discharge. In the district court’s view, the plaintiff’s successful completion of the PIP, the absence of demotion or pay reduction, and the lack of substantial changes in her responsibilities meant she did not suffer an adverse employment action. The court also concluded that the comments and actions by her supervisors did not create intolerable working conditions that would force a reasonable person to resign.On appeal, the United States Court of Appeals for the First Circuit first addressed the timeliness of the appeal. The court determined that the appellant’s pro se motion for extension of time to file a notice of appeal met the requirements to be treated as a timely notice of appeal, making the appeal timely. On the merits, the First Circuit affirmed the district court’s judgment. It held that, under the Supreme Court’s standard in Muldrow v. City of St. Louis, the PIP did not alter the terms or conditions of employment, and that the record did not support a finding of constructive discharge. The decision of the district court was affirmed. View "Walsh v. HNTB Corporation" on Justia Law

Two individuals entered into a loan agreement and mortgage with a bank in Puerto Rico, using their home as collateral. After a decade, they faced financial difficulties and stopped making payments. The bank denied a request to modify the loan but proposed a short sale. The bank then initiated foreclosure proceedings in Puerto Rico’s Court of First Instance, resulting in a judgment against the borrowers. Multiple short sale offers were rejected until one was conditionally accepted, but the sale did not close in time and the home was foreclosed. Subsequently, the bank garnished funds from the borrowers, who then filed for Chapter 13 bankruptcy.The United States Bankruptcy Court for the District of Puerto Rico confirmed the borrowers’ Chapter 13 plan, noting their intent to pursue claims against the bank. The borrowers filed an adversary proceeding seeking damages and other relief. The bank moved to dismiss the adversary complaint, but the bankruptcy court denied this motion, allowing the case to proceed. The borrowers later filed a similar complaint in the United States District Court for the District of Puerto Rico and moved to withdraw the adversary proceeding to the district court. The district court denied the withdrawal as untimely and dismissed the separate federal case. After the borrowers completed their bankruptcy plan and received a discharge, the bankruptcy court dismissed the adversary proceeding for lack of subject matter jurisdiction.On appeal, the United States Court of Appeals for the First Circuit held that the bankruptcy court erred in finding it automatically lost jurisdiction over the adversary proceeding post-discharge. The appellate court vacated and remanded the case for further proceedings, instructing the lower courts to reassess jurisdiction and properly address the borrowers’ motion for withdrawal and their jury trial request. View "Guallini-Indij v. Banco Popular de Puerto Rico" on Justia Law

A nurse employed by Puerto Rico’s State Insurance Fund Corporation reported sexual harassment by a coworker in 2020 and subsequently filed an administrative charge of discrimination and retaliation. After dropping her sexual harassment claim, she pursued a retaliation claim, arguing that she endured a hostile work environment and was involuntarily transferred to a different office. The incidents underlying her claim included several allegedly meritless disciplinary actions and the eventual transfer.The United States District Court for the District of Puerto Rico granted a preliminary injunction separating her from the coworker and, after trial, a jury found in her favor on the retaliation claim, awarding $300,000 in damages. The district court later denied her request for a permanent injunction seeking reassignment to her former office and expungement of disciplinary records. The court awarded her approximately $301,000 in attorney fees and costs, but she challenged the amount as insufficient. Finally, although the defendant did not appeal the judgment or fee award, the district court stayed execution of both under Puerto Rico law, pending approval of a payment plan by the Secretary of Justice.The United States Court of Appeals for the First Circuit affirmed the denial of permanent injunctive relief and the attorney fee award, finding that the district court did not abuse its discretion on either point and that the fee reductions and denial of injunctive remedies were reasonable. The Court of Appeals also vacated the stay of execution of judgment and fees, holding that Puerto Rico’s statutory payment plan requirement could not delay enforcement of a federal judgment under Title VII. The case was remanded for further proceedings consistent with these rulings. View "Garcia Colon v. State Insurance Fund Corporation" on Justia Law

A Pennsylvania-based company operating an online marketplace for firearms was sued under New Hampshire law by a former Boston police officer and his wife. Their claims alleged that the company’s website facilitated the sale of a firearm in New Hampshire in 2015, which was later used to shoot the officer in Boston in 2016. The plaintiffs asserted causes of action including negligence, aiding and abetting tortious conduct, public nuisance, loss of consortium, and loss of support, based on the website’s alleged design and operation in encouraging illegal gun sales.Previously, the plaintiffs had filed a similar suit in the Massachusetts Superior Court against the company and other defendants, but that court dismissed the claims against the company based on Section 230 of the Communications Decency Act, without ruling on personal jurisdiction. After jurisdictional discovery, the Massachusetts Superior Court subsequently dismissed the claims for lack of personal jurisdiction. The plaintiffs then filed the present action in the United States District Court for the District of New Hampshire, which denied their request for jurisdictional discovery and dismissed their claims for lack of personal jurisdiction, finding the company had not purposefully availed itself of the protections of New Hampshire’s laws.On appeal, the United States Court of Appeals for the First Circuit affirmed the District Court’s ruling in part and vacated it in part. The First Circuit held that the plaintiffs failed to make a prima facie case of purposeful availment based on contacts up to 2016, but concluded that evidence of thousands of “New Hampshire” firearm listings on the website from 2018 onward, when considered with other evidence, sufficed for a prima facie showing of purposeful availment. The court remanded for consideration of relatedness and reasonableness and affirmed denial of jurisdictional discovery. View "Stokinger v. Armslist, LLC" on Justia Law

The case centers on Orlando González Tomasini, who filed civil rights and tort claims against the United States Postal Service, his former employer, alleging that psychological and medical conditions prevented him from working. His then-wife, Juliette Irizarry-Miranda, was initially a co-plaintiff but eventually became a defense witness after a contentious divorce and ongoing custody dispute over their son. On the eve of trial, the Postal Service accused González of witness tampering, specifically of seeking to dissuade Irizarry from testifying by conditioning custody concessions on her refusal to take the stand. Irizarry recorded part of a phone call between them, and the Postal Service submitted this as evidence.Prior to the current appeal, the case was heard in the United States District Court for the District of Puerto Rico, where a magistrate judge presided by consent of the parties. The magistrate judge held a three-day evidentiary hearing to address the witness tampering allegations. After hearing testimony from González, Irizarry, and a social worker, the court found by clear and convincing evidence that González had engaged in witness tampering. As a sanction for this fraud on the court, the magistrate judge dismissed González’s case.The United States Court of Appeals for the First Circuit reviewed the district court's decisions. The First Circuit affirmed the district court in all respects, holding that the evidentiary hearing was appropriately ordered, the finding of witness tampering was not clearly erroneous, and the sanction of dismissal was within the court’s discretion. The appellate court found that González’s conduct constituted a fraud on the court, justifying dismissal, especially given the egregiousness of the witness tampering and its potential impact on the integrity of judicial proceedings. Judgment was affirmed for the Postal Service. View "Gonzalez Tomasini v. Steiner" on Justia Law

The plaintiff brought claims against her former employer alleging violations of federal and state wage and hour laws. After removal to the United States District Court for the District of Rhode Island, some claims were resolved at summary judgment, leaving the federal wage claims for trial. Before trial, the parties participated in a court-ordered mediation before a magistrate judge, during which they reached an oral settlement agreement whose terms were recited on the record. The agreement included payment to the plaintiff, confidentiality, non-defamation, and no-rehire clauses, as well as dismissal of the action with prejudice. Both parties, including the plaintiff and her counsel, confirmed their assent to the agreement.Following the mediation, the defendant prepared written settlement documents and a stipulation of dismissal. However, the plaintiff refused to sign, asserting she felt pressured and that certain terms were ambiguous or not sufficiently definite. The district court reviewed these objections after the defendant moved to enforce the settlement. The court found the agreement enforceable, denied the plaintiff’s request for an evidentiary hearing on alleged undue influence due to lack of factual support, and ordered her to execute the documents. After the plaintiff failed to comply, the court ultimately dismissed the case with prejudice under Federal Rule of Civil Procedure 41(b).On appeal, the United States Court of Appeals for the First Circuit held that the district court did not err in enforcing the oral settlement agreement or in denying the plaintiff’s motion for reconsideration and request for an evidentiary hearing. The appellate court found no genuine dispute of material fact as to the existence or terms of the settlement and affirmed the district court’s judgment, awarding costs and attorney fees to the defendant. View "Maccarone v. Siemens Industry, Inc." on Justia Law

A dispute arose between two siblings, Wayne Orkin and Lisa Albert, over the operation and ownership of a business called Boost Web SEO, Inc. Orkin managed the day-to-day business and generated all of its revenue, while Albert incorporated the company and was listed as its registered agent and officer. No written agreements clarified their roles, profit sharing, or compensation. In 2014, residual income from a payment processing arrangement was assigned to Boost Web, which both parties treated as company revenue for years. In 2021, after a breakdown in their relationship, Albert cut Orkin’s access to company funds and accused him of fraudulent activities in communications with a third-party vendor. Orkin then redirected company revenues to an account he controlled, prompting legal action.The litigation began in Massachusetts Superior Court, where Orkin (and his father) sued Albert and her son for various state-law claims, and Albert removed the case to the U.S. District Court for the District of Massachusetts. Boost Web intervened with a crossclaim against Orkin. After partial summary judgment, the remaining claims—Orkin’s defamation and related claims against Albert, and Boost Web’s conversion claim against Orkin—proceeded to a bench trial. The district court ruled for Albert on the defamation claim, finding her email was not defamatory or was protected as true, and for Boost Web on conversion, awarding it damages for funds Orkin took as personal expenses and for redirected residuals. The court also found Orkin in contempt for interfering with its orders and permanently enjoined him from pursuing related litigation in Florida.The United States Court of Appeals for the First Circuit reviewed the case. It held that the district court erred in dismissing Orkin’s defamation claim, finding that Albert’s email could be defamatory per se and remanded for further proceedings on truthfulness. It affirmed the conversion judgment regarding the redirected residuals but vacated the judgment concerning personal expenses, holding that Orkin was entitled to some compensation and remanded to determine the appropriate amount. The court vacated the contempt order and the permanent injunction, finding the previous orders did not unambiguously decide Boost Web’s ownership. The case was remanded for further proceedings consistent with these holdings. View "Orkin v. Albert" on Justia Law

John Kenney, a resident of Florida, sought to obtain a retail cannabis license in Rhode Island as a social equity applicant. He argued that, as a recipient of a social equity cannabis license in the District of Columbia and someone with nonviolent marijuana convictions in Maryland and Nevada, he would otherwise qualify under Rhode Island’s Cannabis Act. Kenney challenged two provisions of the Act: the requirement that all license applicants must be Rhode Island residents or entities controlled by Rhode Island residents, and the definition of “social equity applicant,” which, according to Kenney, only recognizes nonviolent marijuana offenses eligible for expungement under Rhode Island law.After Kenney filed an amended complaint in the United States District Court for the District of Rhode Island, the defendants moved to dismiss for failure to state a claim and lack of subject matter jurisdiction. On February 6, 2025, the district court dismissed the case on ripeness grounds, reasoning that the Cannabis Control Commission had not yet promulgated final rules for retail cannabis licenses, and thus the court could not adjudicate the claims. The case was dismissed without prejudice, and Kenney appealed.The United States Court of Appeals for the First Circuit reviewed the appeal. Following the Commission’s issuance of final rules for retail cannabis licenses, effective May 1, 2025, the appellate court determined that the district court erred in dismissing the case for lack of ripeness. The First Circuit held that Kenney’s claims were not moot and that he had standing to pursue them. The court reversed the district court’s dismissal order and remanded the case for prompt consideration of the merits of Kenney’s constitutional challenges, instructing the district court to rule at least forty-five days before the Commission issues retail licenses. View "Kenney v. Rhode Island Cannabis Control Commission" on Justia Law