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

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.