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

In this case involving a class action complaint filed against CVS Pharmacy Inc. in Massachusetts Superior Court for wage and hour violations, the First Circuit clarified the removal time periods and mechanisms under the Class Action Fairness Act of 2005. CVS filed a second notice of removal, claiming that there was a reasonable probability that the amount in controversy exceeded $5 million. The district court granted Plaintiffs’ motion to remand, holding (1) CVS’s notice of removal came too late to meet the thirty-day deadline in 28 U.S.C. 1446(b)(1), and the second thirty-day deadline in section 1446(b)(3) did not apply; and (2) CVS had not met its burden to establish the substantive amount in controversy requirement. The First Circuit reversed, holding (1) the time limits in section 1446(b) apply when the plaintiffs’ pleadings or the plaintiffs’ “other papers” provide the defendant with a clear statement of the damages sought or with sufficient facts from which damages can be readily calculated; (2) CVS’s second notice of removal was timely under section 1446(b)(3); and (3) CVS sufficiently demonstrated that the amount in controversy exceeded $5 million. View "Romulus v. CVS Pharmacy, Inc." on Justia Law

Plaintiffs were four customers who purchased cable television, internet, or telephone services from Charter Communications Entertainment I, LLC and Charter Communications, Inc. (together, Charter). After a severe snow storm, Plaintiffs sued Charter on behalf of themselves and a putative class of others claimed to be similarly situated, contending that Charter violated various duties by failing to provide credits to its customers for their loss of service during the storm. Charter removed the case to federal court, invoking the Class Action Fairness Act (Act).. The federal district court subsequently granted Charter’s motion to dismiss, finding that the claims of three Plaintiffs were moot because they had received credits covering the time they were without service and that, as to the fourth plaintiff, the complaint failed to state a claim. The First Circuit vacated in part the district court’s opinion, holding that the district court (1) properly exercised its jurisdiction under the Act; but (2) erred in granting Charter’s motion to dismiss, as all four plaintiffs may pursue their requests for declaratory relief regarding their dispute with Charter over the nature of its obligations to them, and Plaintiffs’ complaint pleaded facts sufficient to plausibly show that they were entitled to relief on some of their claims.View "Cooper v. Charter Cmmc’ns Ents. I, LLC" on Justia Law

At issue in this case was whether alleged misrepresentations made by Defendants were made “in connection with” a transaction in covered securities under the Securities Litigation Uniform Standards Act of 1998 (SLUSA). Plaintiffs, investors in a licensed non-diversified investment company, filed a putative class action in Puerto Rico court against the Fund and others alleging fraud or misrepresentation in violation of Puerto Rico law after the Fund invested the majority of its assets in notes sold by Lehman Brothers, resulting in the Fund adopting a plan of liquidation. Defendants removed the action to the federal district court, asserting that it fell within the ambit of the SLUSA. Plaintiffs unsuccessfully sought remand on jurisdictional grounds. Ultimately, the district court granted Defendants’ motions to dismiss premised on SLUSA preclusion. The First Circuit vacated the judgment of dismissal and remitted with instructions to return the case to the Puerto Rico Court, holding that the link between the misrepresentations alleged and the covered securities in the Fund’s portfolio was too fragile to support a finding of SLUSA preclusion under Chadbourne & Parke LLP v. Troice. View "Hidalgo-Velez v. San Juan Asset Mgmt., Inc." on Justia Law

Plaintiffs challenged an insurance company's use of "retained asset accounts" (RAAs) as a method of paying life insurance benefits in the ERISA context. They presented the district court with two basic questions: (1) whether the insurer's method of paying death benefits in the form of RAAs constitute self-dealing in plan assets in violation of ERISA section 406(b); and (2) whether this redemption method offended the insurer's duty of loyalty toward the class of beneficiaries in violation of ERISA section 404(a). The district court answered the first question in favor of the insurer and the second in favor of the plaintiff class. The court then awarded class-wide relief totaling more than $12,000,000. Both sides appealed. Upon review, the First Circuit Court of Appeals agreed with the district court that the insurer's use of RAAs in this case did not constitute self-dealing in plan assets. However, the Court disagreed with the district court's answer to the second question and held that the insurer's use of RAAs did not breach any duty of loyalty owed by the insurer to the plaintiff class. View "Merrimon, et al v. Unum Life Insurance Company" on Justia Law

Plaintiffs filed a putative class action in the United States District Court for the District of Massachusetts, invoking federal diversity jurisdiction, alleging that Defendant, Raytheon Company, negligently exposed Plaintiffs and others similarly situated to beryllium. Plaintiffs’ principal theory of liability was that the beryllium exposure caused subcellular change. Plaintiffs alternatively argued that a cause of action for medical monitoring under Massachusetts law does not require a showing of subcellular or other physiological change. The district court granted summary judgment in favor of Defendant. The First Circuit affirmed, holding (1) because no named Plaintiff or any class member had as yet contracted beryllium sensitization, the first manifestation of subcellular change resulting from beryllium exposure, Plaintiffs’ first claim failed; and (2) Plaintiffs did not preserve a claim under their alternative theory. View "Genereux v. Raytheon Co." on Justia Law

A pension fund and other America Online (AOL) shareholders brought a class action against Credit Suisse First Boston (CSFB), former CSFB analysts, and other related defendants (collectively, Defendants), alleging violations of sections 10(b) and 20(a) of the Securities Exchange Act and of SEC Rule 10b-5. Specifically, Plaintiffs claimed (1) CSFB made material misstatements and fraudulently withheld relevant information from the market in its reporting on the AOL-Time Warner merger; and (2) the shareholders purchased stock in the new company at artificially inflated prices as a result of the alleged misstatements and omissions. The district court awarded summary judgment to Defendants. The First Circuit Court of Appeals affirmed, holding (1) the district court did not err in excluding the shareholders’ expert testimony for lack of reliability; and (2) without the expert’s testimony, Plaintiffs were unable to establish loss causation. View "Bricklayers & Trowel Trades Int'l Pension Fund v. Credit Suisse Secs. (USA) LLC" on Justia Law

Plaintiff sued the servicer of his loan (Bank) in a putative class action, asserting that the Bank's requirement that he maintain flood insurance coverage in an amount sufficient to cover the replacement value of his home breached the terms of his mortgage contract. The mortgage was insured by the Federal Housing Administration (FHA). Specifically, Defendant contended that the Bank, under a covenant of the mortgage contract, could not require more than the federally mandated minimum flood insurance. The covenant was a standard uniform covenant prescribed by the FHA pursuant to federal law. The district court dismissed the complaint for failure to state a claim. The judgment of dismissal was affirmed by an equally divided en banc First Circuit Court of Appeals, holding that Plaintiff failed to state a claim for breach of contract, as (1) the Bank's reading of the contract was correct and Plaintiff's was incorrect; (2) Plaintiff could not avoid dismissal on the grounds that his specific understanding or the actions of the parties created an ambiguity; and (3) the United States' position articulated in its amicus brief, which stated that Plaintiff's interpretation of the contract was incorrect, reinforced the Court's conclusion. View "Kolbe v. BAC Home Loans Servicing, LP" on Justia Law

Defendant in this case was a franchisor and Plaintiffs were its franchisees. After Plaintiffs sued Defendant, the district court certified a class, excluding those franchisees whose agreements with Defendant contained clauses expressly requiring arbitration. While those franchisees pursued arbitration, the arbitrator imposed a stay of the arbitrations of ten of those franchisees. The district court later concluded that Defendant had violated an order requiring it to obtain judicial permission before making any motion to delay or prevent arbitration proceedings and sanctioned Defendant by admitting to the class the ten franchisees, relieving them of their obligations to arbitrate. Defendant then unsuccessfully filed a motion to reconsider the sanction and to stay the ten franchisees' judicial proceedings pending arbitration. The First Circuit Court of Appeals reversed, holding (1) the district court's determination that Defendant violated the order was an abuse of discretion; and (2) therefore, there was no basis for the sanction, and Defendant's motion to stay should have been granted. View "Awuah v. Coverall N. Am., Inc." on Justia Law

These consolidated appeals comprised two putative class actions brought by skycaps affiliated with two major airlines. After Defendants, the airlines, each introduced a $2 per bag fee for curbside service for departing passengers at airports that did not inure to the benefit of the skycaps, Plaintiffs sued the airlines for unjust enrichment and tortious interference, among other claims. The district court dismissed the unjust enrichment and tortious interference claims as preempted by the Airline Deregulation Act (ADA). Plaintiffs appealed, contending that the ADA does not preempt common-law claims. The First Circuit Court of Appeals affirmed after an analysis of statutory language, congressional intent, and case law, holding that the ADA preempted Plaintiffs' common-law claims. View "Brown v. United Airlines, Inc." on Justia Law

Plaintiffs brought this putative class action under sections 11, 12, and 15 of the Securities Act, alleging that a prospectus and registration statement (the offering documents) issued by AMAG Pharmaceutical, Inc. in connection with a secondary stock offering held in 2010 contained two serious omissions: (1) a failure to disclose almost two dozen reports of serious adverse effects linked to a make-or-break drug for AMAG's future; and (2) failure to disclose information the FDA revealed in a warning letter issued after the offering. The district court dismissed the entire complaint on the ground that Plaintiffs failed sufficiently to plead section 11 claims pursuant to an SEC regulation. The First Circuit Court of Appeals (1) reversed the dismissal of the claims of actionable omissions because of the undisclosed reports because the reports gave rise to uncertainties AMAG knew would adversely affect future revenues and risk factors that made the offering risky and speculative; (2) affirmed as to the claims of omissions regarding the FDA information; and (3) reversed the dismissal of Plaintiffs' sections 12 and 15 causes of action. Remanded. View "Silverstrand Invs. v. Amag Pharms., Inc." on Justia Law