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

In 2011, FSRO filed a Demand for Arbitration against Fantastic Sam's Franchise Corporation, on behalf of its members, who are franchisees, holding individual license agreements with Fantastic Sams. FSRO alleged that the Corporation had breached those license agreements. The Corporation filed a petition pursuant to the Federal Arbitration Act, 9 U.S.C. 4, to stay FSRO's arbitration and to compel FSRO members to arbitrate their claims individually. The district court allowed the petition as to license agreements that specifically prohibit class-arbitration. The decision in favor of the Corporation was not appealed. The court denied relief as to other agreements, which state: “Any controversy or claim arising out of or relating in any way to this Agreement or with regard to its formation, interpretation or breach shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association." The First Circuit affirmed. Whether the language permits group arbitration, as requested by FSRO, is a question for the arbitrators. View "Fantastic Sams Franchise Corp. v. FSRO Ass'n, Ltd." on Justia Law

The Massachusetts Registry of Motor Vehicles sought proposals from contractors to print and send registration renewal notices along with advertisements to raise revenue to defray costs. RMV would provide the contractor with information (name, address, date of birth, and license number) that was generally exempt from public disclosure under the Driver's Privacy Protection Act, 18 U.S.C. 2721-25, and Mass. Gen. Laws ch. 4, sect. 7, cl. 26(n), that the contractor would need to safeguard from unlawful public disclosure. Defendant's winning bid indicated that it understood and accepted the terms. The contract specified that Massachusetts would continue to exercise ownership over all personal data, and that a violation of the DPPA or the Massachusetts privacy law would cause the contract to terminate. Plaintiff, who received a registration renewal notice that included advertisements, filed a putative class action on behalf of himself and other drivers who, without providing consent, had received advertisements from defendant. The district court granted defendant judgment on the pleadings based on failure to join the Commonwealth as an indispensable party. The First Circuit affirmed, finding no violation of the DPPA. Defendant does not disclose the information it legitimately receives, as the state's contractor, to others. View "Downing v. Globe Direct LLC" on Justia Law

A proposed consent order from an FTC investigation indicated that U-Haul attempted to implement a scheme to collude with competitors, Budget and Penske, to raise prices for truck rentals. The FTC concluded that U-Haul's conduct violated the Federal Trade Commission Act, 15 U.S.C. 45(a)(1). The proposed consent order was designed to prevent collusion. U-Haul consented to the relief, but did not admit the conduct or violation. A consumer filed a complaint charging U-Haul with violating Mass. Gen. Laws ch. 93A by engaging in an attempted price-fixing scheme and seeking damages on behalf of a large class. The suit, a follow-on action after a proposed government consent decree, is common in antitrust cases. Because the FTC Act contains no private right of action and the Sherman Act is of doubtful application to price-fixing, the suit rested chapter 93A, which prohibits "[u]nfair methods of competition and unfair or deceptive acts or practices," and permits consumer class actions. The complaint alleged that U-Haul's actions caused plaintiff to pay at least 10 percent more for truck rentals than she would have absent the unlawful action. The district court dismissed, stating that the complaint failed plausibly to allege injury. The First Circuit vacated, finding the claim plausible. View "Liu v. Amerco" on Justia Law

Plaintiffs are a dissident group, within a larger class of medical patient consumers in a case alleging fraud in overcharging for the medication Lupron. The patients, along with insurers and private health care providers, obtained a $150 million settlement agreement that was approved by the district court, of which $40 million was allocated to consumers. That agreement provided that if there were unclaimed monies from the $40 million consumer settlement pool after full recovery to consumer plaintiffs, all unclaimed funds would go into a cy pres fund to be distributed at the discretion of the trial judge. Dissident plaintiffs appealed distribution of the $11.4 million cy pres fund to the Dana Farber/Harvard Cancer Center and the Prostate Cancer Foundation for work on the treatment of the diseases for which Lupron is prescribed. They have already recovered more than 100% of their actual damages. The First Circuit affirmed. After expressing concern about distribution of such funds by judges and adding an audit requirement, the court noted the importance of avoiding windfalls for plaintiffs who have already been fully compensated. View "Rohn v. Dana Farber/Harvard Cancer Ctr." on Justia Law

Named plaintiffs sought to represent potential classes of hospital employees, some covered by collective bargaining agreements and others not, claiming that they were deprived of compensation for work performed during meal breaks, before and after shifts, and during training sessions. One case asserted only state law tort and regulatory claims; the other raised claims under the Fair Labor Standards Act, 29 U.S.C. 206-207, and the Employee Retirement Income Security Act, 29 U.S.C.1059(a)(1), 1104(a)(1). The district court dismissed. The First Circuit affirmed in part. The state law claims were properly removed to federal court and were preempted because many were dependent on the terms of a collective bargaining agreement. The federal law claims, dismissed for failure to identify specific employers, were remanded to permit amendment. View "Cavallaro v. UMass Mem'l Health Care,Inc." on Justia Law

In 2003, the New Hampshire Department of Health and Human Services and a certified class of Medicaid-eligible children reached a settlement agreement and proposed a consent decree that outlined the Department's obligations to provide dental services to Medicaid-enrolled children in accordance with federal law. The district court approved the Decree in 2004. Between 2007 and 2010, the district court denied four motions alleging that the Department was not in compliance. The First Circuit affirmed, upholding the district court's requirement that the Class to file a motion for contempt to enforce the Decree; denial of a 2010 motion for contempt; denial of a request for an evidentiary hearing in 2010; and holding the Class to a clear and convincing burden of proof on its 2010 motion to modify or extend the Decree.

A class action was brought against companies engaged in credit repair and debt consolidation, alleging a scheme to defraud debtors in violation of the federal Credit Repair Organizations Act, 15 U.S.C. 1679, and the Massachusetts Consumer Protection Act, Mass. Gen. Laws ch. 93A. The court entered judgment in favor of the class for $259 million, and established a constructive trust over "all fees that consumers paid to the current or former defendant entities." Finding the judgment largely uncollectable, plaintiffs filed complaints against auditing firms and law firms that had assisted defendants in the class action. The district court dismissed. The First Circuit affirmed. The constructive trust cannot be read as intended to claw back monies expended, prior to the imposition of the trust, by defendants, in the ordinary course of business and in exchange for fair value. It is not unjust enrichment for lawyers and accountants to be paid for their services. In addition, plaintiffs were seeking "class-based relief" but did not seek certification of the class as required by FRCP 23.

A six-year-old boy, with profound hearing impairment, was furnished with transportation to and from school as part of his individualized education program. The school district contracts with a private company for bus service. The boy alleged sexual abuse by a bus driver. The family sued under 42 U.S.C. 1983 and Title IX of the Education Amendments of 1972, 20 U.S.C. 1681-1688. The district court ruled in favor of the defendants. The First Circuit affirmed. The Section 1983 claim was properly rejected because transportation to and from school is not an exclusive state function; defendants did not act under color of state law. The Title IX claim failed because it is not clear that the "appropriate person," with the authority to take disciplinary action against the bus driver, actually knew about the alleged harassment and exhibited deliberate indifference toward it.

Plaintiffs filed a putative class action against a hospital network and senior executives, claiming to represent more than 12,000 employees deprived of compensation for work performed during their meal break, for work performed before and after shifts, and for time spent attending training sessions, based on the Massachusetts Payment of Wages Act, Mass. Gen. Laws ch. 149, 148; the Massachusetts Minimum Fair Wages Act, Mass. Gen. Laws ch. 151, 1A and 15--or breach of contract or implied contract; money had and received; quantum meruit/unjust enrichment; fraud; negligent misrepresentation; conversion; equitable and promissory estoppel. Defendants claimed that the Labor Management Relations Act, 29 U.S.C. 185, precluded state law claims. The district court dismissed. The First Circuit vacated and remanded, stating that the district court. It is not clear that either named plaintiff is covered by a collective bargaining agreement.