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

Two Massachusetts-based Volvo dealers filed a lawsuit against Volvo Car USA, Volvo Car Financial Services, and Fidelity Warranty Services, alleging violations of Massachusetts General Laws Chapter 93B. The dispute centers on Volvo-branded Prepaid Maintenance Program (PPM) contracts, which allow customers to prepay for future maintenance services at a discounted rate. Fidelity administers these contracts, which the dealers sell to their customers. The dealers claimed that the defendants were underpaying them for the parts and labor costs incurred in servicing these PPM contracts.The United States District Court for the District of Massachusetts heard cross-motions for summary judgment from both parties. The district court granted summary judgment in favor of the defendants, concluding that entities like Fidelity are not regulated by the relevant provisions of Chapter 93B. The court denied the dealers' motion for summary judgment, leading the dealers to appeal the decision.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court's decision, but for a different reason. The appellate court held that the dealers' sale and service of the Volvo PPM are not franchise obligations under Chapter 93B. The court found that the Retailer Agreement between the dealers and Volvo USA did not obligate the dealers to sell or service the Volvo PPM. The court also noted that the dealers had the discretion to sell various financial products, including the Volvo PPM, and that servicing the PPM was not a material term of the Retailer Agreement. Therefore, Chapter 93B did not require Fidelity to reimburse the dealers at the statutory rates. View "Colony Place South, Inc. v. Volvo Car USA, LLC" on Justia Law

US Ghost Adventures, LLC (Ghost Adventures) operates a bed and breakfast at the Lizzie Borden House in Fall River, Massachusetts, offering ghost tours and related activities. Ghost Adventures holds federal trademarks for the name "Lizzie Borden" and a hatchet logo. Miss Lizzie's Coffee LLC (Miss Lizzie's) opened a coffee shop next to the Lizzie Borden House, using the Lizzie Borden story in its marketing, including a hatchet logo and references to being "The Most Haunted Coffee Shop in the World." Some visitors mistakenly believed the two businesses were affiliated.Ghost Adventures sued Miss Lizzie's in the United States District Court for the District of Massachusetts for trademark infringement and unfair competition, seeking a preliminary injunction to stop Miss Lizzie's from using the "Lizzie Borden" name and hatchet logo. The district court denied the preliminary injunction, finding that Ghost Adventures failed to show a likelihood of success on the merits. The court determined that the key element in any infringement action is the likelihood of confusion, which Ghost Adventures did not demonstrate. The court found that Miss Lizzie's hatchet logo and use of the name "Lizzie" were not similar enough to Ghost Adventures' trademarks to cause confusion.The United States Court of Appeals for the First Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that the district court did not clearly err in finding that the hatchet logos were dissimilar and that Miss Lizzie's reference to "Lizzie" was to the historical figure, not the trademark. The court also found that any consumer confusion was due to the proximity of the businesses and their common reliance on the Lizzie Borden story, not the similarity of their marks. The court concluded that Ghost Adventures did not demonstrate a likelihood of success on the merits, and the district court's denial of the preliminary injunction was affirmed. View "US Ghost Adventures, LLC v. Miss Lizzie's Coffee LLC" on Justia Law

The case involves BioPoint, Inc., a life sciences consulting firm, which accused Catapult Staffing, LLC, and Andrew Dickhaut of misappropriating trade secrets, confidential business information, and engaging in unfair trade practices. BioPoint alleged that Catapult, with the help of Dickhaut and Leah Attis (a former BioPoint employee and Dickhaut's fiancée), used BioPoint's proprietary information to recruit candidates and secure business from BioPoint's clients, including Vedanta and Shire/Takeda.The U.S. District Court for the District of Massachusetts handled the initial proceedings. The jury found Catapult liable for misappropriating BioPoint's trade secrets concerning three candidates and two clients, and for tortious interference with BioPoint's business relationship with one candidate. The jury awarded BioPoint $312,000 in lost profits. The judge, in a subsequent bench trial, found Catapult liable for unjust enrichment and violations of the Massachusetts Consumer Protection Law (chapter 93A), awarding BioPoint $5,061,444 in damages, which included treble damages for willful and knowing conduct, as well as costs and attorneys' fees.The United States Court of Appeals for the First Circuit reviewed the case. The court largely affirmed the lower court's findings but reduced the judge's award by $157,068, as it found that BioPoint could not recover both lost profits and unjust enrichment for the same placement. The court also reversed the district court's imposition of joint-and-several liability on Andrew Dickhaut, ruling that he could not be held liable for profits he did not receive. The case was remanded for further proceedings to determine Dickhaut's individual liability. View "BioPoint, Inc. v. Dickhaut" on Justia Law

The First Circuit affirmed the judgment of the district court granting Defendants' motion to dismiss the underlying complaint in its entirety, holding that the district court did not err in finding that the challenged regulations in this case were not null and remained enforceable and that there is no private right of action to enforce the Puerto Rico Oversight Management Stability Act (PROMESA), 48 U.S.C. 2101.Plaintiff, Camara de Mercadeo, Industria y Distribución de Alimentos, Inc., filed the underlying complaint on behalf of its members - businesses in the food industry - seeking declaratory and injunctive relief from certain regulations related to freight tariffs and implementing circular letters promulgated by the Commonwealth of Puerto Rico's Transportation and other Public Services Bureau. Specifically, Plaintiff alleged that the challenged regulations were unlawful under PROMESA. The district court granted Defendants' motion to dismiss. The First Circuit affirmed, holding that Plaintiff was not entitled to relief on its allegations of error. View "Camara de Mercadeo v. Emanuelli Hernandez" on Justia Law

The First Circuit affirmed the judgment of the district court denying Jose Santiago, Inc.'s (JSI) motion for a preliminary injunction under Puerto Rico's Law 75, holding that the district court did not err in concluding that a preliminary injunction was not warranted under the facts of this case.JSI, a distributor of food-service products in Puerto Rico, brought this action alleging that one of its suppliers violated Law 75 by refusing to revoking JSI's status as an exclusive distributor and by refusing to continue filling JSI's orders unless JSI agreed to a written distribution agreement that would limit the products it could order. The district court denied JSI's motion for a preliminary injunction, and JSI appealed. The First Circuit affirmed, holding that there was no error in the district court's findings and that the court properly denied a preliminary injunction. View "Jose Santiago, Inc. v. Smithfield Packaged Meats Corp." on Justia Law

The First Circuit reversed the judgment of the district court requiring the parties to arbitrate their dispute in this case, holding that the district court erred in compelling arbitration.In 2000, Air-Con signed a written distribution agreement with Daikin Industries, LTD to be an authorized distributor in Puerto Rico of air conditioning and refrigeration equipment. The agreement contained an arbitration provision requiring the parties to arbitrate any disputes in Japan. Also in 2000, Air-Con established a distribution relationship with Daikin Applied Latin America, LLC, Daikin Industries' subsidiary. In 2018, Air-Con filed suit against Daikin Applied seeking injunctive relief and damages under Puerto Rico's Dealer Protection Act. After the case was removed to federal court Daikin Applied filed a motion to compel arbitration, arguing that the written agreement between Air-Con and Daikin Industries governed Daikin Applied's relationship with Air-Con. The district court agreed with Daikin Applied. The First Circuit reversed, holding that the district court erred in concluding that Air-Con agreed to arbitrate the claims at issue in this case. View "Air-Con, Inc. v. Daikin Applied Latin America, LLC" on Justia Law

The First Circuit affirmed the district court's final judgment against Plaintiffs on their claims that Uber Technologies competed unlawfully in the on-demand, ride-hail ground transportation in and around Boston, Massachusetts, holding that Uber did not compete unfairly in violation of statutory and common law prohibitions governing the commercial marketplace.Plaintiffs - owners of companies that dispatched, leased, and maintained taxicab vehicles and owned taxi medallions - brought this complaint alleging that, in violation of Boston regulations, Uber caused asset devaluation by competing unfairly under Mass. Gen. Laws ch. 93A, violating the common law for unfair competition, and aiding and abetting a conspiracy to engage in unfair competition. The district court issued judgment in favor of Defendants. The First Circuit affirmed, holding that Uber's conduct in the transportation market during a period of regulatory uncertainty did not violate the statutory or common law governing the commercial marketplace. View "Anoush Cab, Inc. v. Uber Technologies, Inc." on Justia Law

In this case, a byproduct of litigation stemming from the derailment of a Montreal, Maine & Atlantic Railway, Ltd. (MMA) freight train carrying crude oil in Lac-Megantic, Quebec, the First Circuit affirmed the district court's entry of judgment in favor of Robert Keath, the estate representative of MMA, and against creditor Wheeling & Lake Erie Railway Company, holding that, giving due deference to the fact-finder's resolution of the burden of proof, the judgment must be affirmed.One month after the derailment, MMA filed a voluntary petition for protection under Chapter 11 of the Bankruptcy Code. Wheeling instituted an adversary proceeding in the bankruptcy court against MMA and the estate representative, seeking a declaratory judgment regarding the existence and priority of its security interest in certain property of the MMA estate. The case involved intricate questions concerning secured transactions, carriage of goods, and corporate reorganization. After a settlement, the bankruptcy court ruled in favor of the estate representative. The First Circuit affirmed, holding (1) ultimately, this case turned on principals relating to the allocation of the burden of proof and the deference due to the finder of fact; and (2) giving due deference to the fact-finder's resolution of the burden of proof issue, the district court's judgment must be affirmed. View "Wheeling & Lake Erie Railway Co. v. Keach" on Justia Law

In this case involving an electronic component, a voltage regulator known as the KA7805, the First Circuit affirmed in part and vacated in part the district court's judgment dismissing Plaintiff's claims against Defendant, holding that the district court erred in dismissing three of Plaintiff's claims.Defendant's subsidiaries manufactured the KA7805. Plaintiff purchased KA7805s from Defendant's agent and then installed them into power supply units (PSU) it subsequently sold. When one of Defendant's subsidiaries began to manufacture a new "shrunk-die" version of the KA7805, problems with the PSUs arose. Plaintiff brought this suit against Defendant and its holding company, asserting several claims. The district court dismissed all claims except those involving breach of implied warranty at the summary judgment stage. After a trial, the district court dismissed the remaining claims. The First Circuit held (1) the district court erred in summarily dismissing Plaintiff's fraudulent misrepresentation claim based on its holding that Plaintiff's reliance on an uncharged part number was unreasonable as a matter of law; and (2) because the district court's basis for dismissal of Plaintiff's fraudulent omission and negligent misrepresentation claim also rested on its erroneous holding, the court erred in dismissing these two claims as well. View "AcBel Polytech, Inc. v. Fairchild Semiconductor International, Inc." on Justia Law

The First Circuit affirmed the judgment of the district court granting Defendant's motion to dismiss this suit brought by the insurer (Insurer) of a chicken products manufacturer seeking damages from the manufacturer's chicken supplier (Supplier) for claims under Maine law of breach of warranty and strict product liability, holding that the district court did not err in dismissing the claims.Insurer sought to recoup the money it paid to the manufacturer for the losses the manufacturer incurred when its products were recalled following a salmonella outbreak. Insurer's complaint against Supplier alleged that the manufacturer received raw chicken from Supplier that was contaminated with salmonella and was therefore defective under Maine law. The district court dismissed all claims, concluding that the allegations in the complaint did not plausibly allege that the raw chicken sent by Supplier to the manufacturer was defective and that the strict liability claim was independently barred by the economic loss doctrine. The First Circuit affirmed, holding (1) as to the breach of warranty claims, Insurer failed to plausibly allege that the raw chicken at issue was contaminated with a type of salmonella that would persist despite proper cooking; and (2) Insurer's strict liability claim was properly dismissed because the complaint failed to allege facts that could suffice to show that the chicken was defective. View "Starr Surplus Lines Insurance Co. v. Mountaire Farms Inc." on Justia Law