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

During the COVID-19 pandemic, federal relief programs such as the EIDL and PPP were implemented to assist small businesses. In Puerto Rico, a scheme led by Manfred Pentzke-Lemus fraudulently obtained such loans using fabricated documents and kickbacks. Jayson Pastrana-Román, owner of a food kiosk, became involved after Pentzke contacted him and assisted with loan applications. Pastrana allowed co-conspirators to alter his documents and apply for loans in his name, resulting in approved loans and kickbacks paid to Pentzke. Pastrana also recruited his brother and friends into the scheme, relaying instructions and collecting their kickback payments, though he did not retain these funds.A federal grand jury indicted Pastrana on ten counts, including wire fraud, money laundering, and conspiracy. He initially planned to go to trial but later pleaded guilty to all counts. At sentencing in the United States District Court for the District of Puerto Rico, the court determined Pastrana acted as a "manager" in the conspiracy, applying a three-level upward adjustment under U.S.S.G. § 3B1.1(b). The court declined to grant a reduction for acceptance of responsibility under U.S.S.G. § 3E1.1, finding his acceptance was not timely and he had not admitted to his full role as recruiter and intermediary. The court imposed a 33-month concurrent sentence for all counts, below the calculated Guidelines range.On appeal to the United States Court of Appeals for the First Circuit, Pastrana challenged the sentencing enhancements and denial of the acceptance reduction. The First Circuit held the district court did not err in applying the managerial role adjustment but did clearly err in denying the reduction for acceptance of responsibility, as Pastrana had admitted relevant conduct and timely notified the government of his intent to plead guilty. The court vacated Pastrana’s sentence and remanded for resentencing. View "US v. Pastrana-Roman" on Justia Law

A Puerto Rico limited liability company, Berkey International, LLC, manufactures water filters known as Black Berkey Filters, which contain silver—a substance recognized as a pesticide. Berkey distributed these filters without EPA registration, claiming the silver was intended only to protect the filters themselves, not for pesticidal purposes. Inspections by the Environmental Protection Agency (EPA) revealed that Berkey and associated distributors made claims on product labels and websites indicating the filters could remove viruses, bacteria, and other pathogens, suggesting pesticidal intent. As a result, the EPA issued a Stop Sale, Use, or Removal Order prohibiting Berkey and other distributors from selling or distributing these filters.Reviewing the matter, the United States District Court for the District of Puerto Rico considered Berkey’s request for a preliminary injunction to halt enforcement of the EPA’s order. The district court evaluated the administrative record, held hearings, and reviewed extensive briefing. The court found that Berkey had not substantiated its claims that the silver was not intended for pesticidal use and denied Berkey’s motion for preliminary injunctive relief. Berkey’s subsequent motion for reconsideration was also denied, prompting Berkey to file an interlocutory appeal.The United States Court of Appeals for the First Circuit reviewed the district court’s denial of preliminary injunctive relief for abuse of discretion. Applying a highly deferential standard to the EPA’s technical determinations, the appellate court concluded that Berkey had not shown a likelihood of success on the merits of its claims under the Administrative Procedure Act, including its assertions of arbitrary and capricious agency action and violations of notice-and-comment and due process requirements. The First Circuit affirmed the district court’s order, holding that the EPA had reason to believe Berkey’s filters were unregistered and misbranded pesticidal products under federal law. View "Berkey International, LLC v. Environmental Protection Agency" on Justia Law

A class of noncitizens with final removal orders challenged new Department of Homeland Security (DHS) policies issued in March and July 2025, which authorized their removal to “third countries”—countries neither designated in their removal orders nor identified in writing during prior proceedings. The plaintiffs alleged that DHS’s policy failed to provide effective notice or a meaningful opportunity to contest removal to these third countries based on reasonable fear of persecution or torture. The policies also relied on diplomatic assurances from receiving countries, sometimes removing individuals without further protective procedures.The United States District Court for the District of Massachusetts issued a temporary restraining order, granted class certification, and later a preliminary injunction requiring DHS to provide written notice and an opportunity for class members to assert fear-based claims before any third-country removal. After DHS appealed, the U.S. Supreme Court granted a stay pending appellate review. On remand, the district court dissolved the preliminary injunction and issued a final judgment, concluding that DHS’s guidance violated statutory requirements for sequencing removal destinations, and failed to provide notice and hearing for fear-based claims, including those under the Convention Against Torture (CAT). The court ordered declaratory relief and vacated the guidance as unlawful under the Administrative Procedure Act (APA).On appeal, the United States Court of Appeals for the First Circuit held that the plaintiffs lacked Article III standing on the “sequencing” claim and vacated the related declarations. However, the court affirmed the district court’s judgment that DHS must provide effective notice and a meaningful opportunity to contest removal to a third country based on fear-based claims, and upheld the vacatur of DHS guidance as unlawful under the APA. The court rejected DHS’s jurisdictional and remedy arguments, clarifying that declaratory and vacatur relief were permissible and not barred by statute. View "D.V.D. v. Department of Homeland Security" on Justia Law

Several employees of Veolia Water Contract Operations USA, Inc. sued their employer, seeking prevailing wages under the Massachusetts Prevailing Wage Act (PWA) for certain repair and replacement work they performed pursuant to a contract between Veolia and the Springfield Water and Sewer Commission. That contract was authorized by a 1997 Massachusetts Special Act, which provided that work falling within "the construction and design of improvements" remained governed by the PWA. The disputed work occurred during the contract’s second stage, which involved ongoing operation, maintenance, repair, and replacement of wastewater facilities.After both sides moved for summary judgment, the United States District Court for the District of Massachusetts ruled for Veolia. The court concluded that the employees’ work did not fall under "construction and design of improvements" as used in the Special Act and, relying on the Supreme Judicial Court of Massachusetts’s (SJC) decision in Metcalf v. BSC Group, Inc., determined that the structure of the procurement scheme made the PWA inapplicable to the service contract as a whole. The employees appealed.The United States Court of Appeals for the First Circuit, reviewing the case, certified two questions regarding Massachusetts law to the SJC. The SJC clarified that "construction and design of improvements" in the Special Act is broader than the PWA’s definition of “construction” but does not include ordinary repairs or maintenance. The SJC also held that the Special Act was not incompatible with the PWA and that Metcalf was not controlling. Based on the SJC’s answers, the First Circuit held that the district court’s summary judgment for Veolia could not stand, reversed the order, vacated the judgment, and remanded the case for further proceedings to determine which, if any, of the employees’ tasks fell within the statutory phrase. View "Nicholls v. Veolia Water Contract Operations USA, Inc." on Justia Law

LUMA Energy, LLC and LUMA Energy ServCo, LLC entered into a long-term contract to operate and maintain Puerto Rico’s electric power transmission and distribution system, previously managed by the Puerto Rico Electric Power Authority (PREPA), a Title III debtor under PROMESA. The agreement included a liability waiver provision, which was subsequently approved with modifications by the Puerto Rico Energy Bureau (PREB). After LUMA invoked the waiver to deny numerous consumer claims, the Puerto Rico Department of Consumer Affairs (DACO) brought suit in Puerto Rico’s courts against LUMA, PREPA, and PREB, challenging the constitutionality of the waiver. The Supreme Court of Puerto Rico accepted the case for review.While the DACO action was pending, LUMA, without participation from PREPA or the Financial Oversight and Management Board (the Board), sought an order from the United States District Court for the District of Puerto Rico (acting as the Title III court) to enforce the automatic bankruptcy stay and halt the DACO litigation. The Title III court denied LUMA’s motion, finding the police and regulatory power exception to the automatic stay applicable because DACO’s action was an exercise of governmental authority to protect consumers. LUMA appealed this order.The United States Court of Appeals for the First Circuit reviewed the case. The main holding was that LUMA lacked statutory standing to appeal the Title III court’s denial of its motion to enforce the automatic stay. The First Circuit clarified that LUMA was not a “person aggrieved” for purposes of appellate standing under the Bankruptcy Code as incorporated by PROMESA, because LUMA did not show it suffered a direct and adverse pecuniary injury of the type the automatic stay is meant to prevent. Accordingly, the First Circuit dismissed the appeal for lack of appellate jurisdiction. View "LUMA Energy LLC v. Puerto Rico Dep't of Consumer Affairs" on Justia Law

Several nonprofit organizations filed suit after President Trump issued an executive order and subsequent memorandum directing federal agencies to pause the disbursement of funds appropriated under the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA). The nonprofits, which had been awarded grants under these statutes, alleged that the “freeze” on funding had resulted in denial of financial assistance and disruption of their operations. The complaint named several federal agencies and officials, alleging violations of the Administrative Procedure Act (APA) and seeking declaratory and injunctive relief.The United States District Court for the District of Rhode Island found that the plaintiffs had Article III standing and rejected the government’s arguments regarding prior pending actions in other courts and the nature of the claims as contract disputes. The District Court determined that the challenged agency actions were not committed to agency discretion, likely constituted final agency actions, and were likely arbitrary and capricious under the APA. The court granted a preliminary injunction, ordering agencies to resume processing and payment of already-awarded funds and prohibiting further implementation of the funding freeze directives.The United States Court of Appeals for the First Circuit reviewed the case and affirmed much of the District Court’s order, finding that the nonprofits demonstrated standing and were likely to succeed on the merits of their APA claims. The Court held that the categorical funding freezes constituted final agency actions and that agencies failed to consider reliance interests, rendering their actions likely arbitrary and capricious. However, the Court vacated the portion of the order that directly compelled agencies to make monetary payments under contractual grants, finding it exceeded the District Court’s authority under the APA. The remainder of the injunctive relief was affirmed. View "Woonasquatucket River Watershed Council v. USDA" on Justia Law

Several nonprofit organizations that rescue stray puppies from Caribbean islands and arrange for their adoption in the United States challenged a 2024 regulation issued by the Centers for Disease Control and Prevention (CDC). This regulation requires all dogs imported into the United States to be at least six months old, denying entry to younger dogs regardless of their country of origin. The CDC implemented this rule to prevent the reintroduction of rabies, citing both the difficulty of accurately assessing rabies risk and age in younger puppies and concerns about fraudulent documentation regarding the dogs’ origins and vaccination status.After the regulation was enacted, the plaintiffs argued that it exceeded the CDC’s statutory authority under 42 U.S.C. § 264(a) and was arbitrary and capricious under the Administrative Procedure Act. The United States District Court for the District of Massachusetts granted summary judgment to the CDC, finding the age requirement within the agency’s statutory authority as an inspection measure directly related to preventing the introduction of communicable diseases. The district court also concluded that the CDC had reasonably explained its rationale for the rule and had not acted arbitrarily.On appeal, the United States Court of Appeals for the First Circuit reviewed the district court’s judgment de novo, applying the standards articulated in recent Supreme Court decisions. The First Circuit held that the CDC’s age requirement is a permissible inspection measure under its statutory authority and is rationally connected to the goal of preventing rabies reintroduction. The court further held that the CDC’s decision was not arbitrary or capricious, as it considered relevant concerns and provided an adequate explanation, including addressing the plaintiffs’ reliance interests. Accordingly, the First Circuit affirmed the district court’s judgment. View "Bruno Project Rescue, Inc. v. Centers for Disease Control and Prevention" on Justia Law

The appellant, a former Marine, sought to upgrade his 1986 discharge from “Other Than Honorable” to “Honorable.” He argued that his misconduct while in the service was the result of undiagnosed post-traumatic stress disorder (PTSD) and major depressive disorder, which he claimed were caused by racial harassment and traumatic experiences during his time in the Marine Corps. He supported his application with a psychologist’s assessment diagnosing him with PTSD and major depressive disorder linked to his service. The Board for Correction of Naval Records (BCNR) also considered an advisory opinion from a Navy psychologist, who concluded that while some of the appellant’s misconduct might be attributable to PTSD or depression, not all incidents were clearly connected.After the BCNR denied his request for a discharge upgrade, the appellant brought suit in the United States District Court for the District of Massachusetts. He argued that the BCNR did not apply Department of Defense guidance requiring liberal consideration for discharge-upgrade applications involving PTSD and that the Board failed to adequately explain its reasoning. The district court, applying an “unusually deferential” standard of review to the BCNR’s decision, found that the Board’s denial was supported by substantial evidence and not arbitrary or capricious. The court granted summary judgment for the Secretary of the Navy and denied the appellant’s motion for summary judgment.On appeal, the United States Court of Appeals for the First Circuit reviewed the administrative record de novo but accorded the BCNR “unusual deference” under governing law. The court held that the BCNR properly considered all relevant Department of Defense memoranda and the evidence linking the appellant’s mental health conditions to his misconduct. The court affirmed the district court’s judgment, concluding that the BCNR’s decision was neither arbitrary nor capricious and adequately explained. View "Taylor v. Cao" on Justia Law

A religious nonprofit organization sought to purchase a former university campus property after being selected as the winning bidder in a competitive process conducted by a state university system. Following the public announcement of the award, there was significant public opposition to the sale, particularly due to the religious nature of the winning bidder. Two unsuccessful bidders filed administrative protests, raising both procedural and substantive objections, including criticism of the university's decision to sell to a religious organization. The university's designated official initially denied these protests, but upon further internal review, a higher-level administrator determined that a flaw in the bid evaluation process—specifically, the failure to consider cost-saving proposals for existing infrastructure—warranted rescinding the award and restarting the process. In the new round, the property was awarded to a different bidder who scored higher under revised criteria.The original winning bidder, the religious organization, challenged the university's decision in the United States District Court for the District of Maine, alleging violations of the Equal Protection and Free Exercise Clauses of the U.S. Constitution. The district court denied the plaintiff’s motions for a temporary restraining order and a preliminary injunction, finding that the plaintiff failed to show a likelihood of success on the merits of either claim. The court credited testimony that the university’s decision was motivated by cost-saving considerations rather than religious bias, and found no clear evidence of procedural irregularity or pretext.On appeal, the United States Court of Appeals for the First Circuit reviewed the denial of the preliminary injunction for abuse of discretion. The Court affirmed the district court’s decision, holding that the lower court applied the correct legal standards and did not clearly err in its factual findings. The Court concluded that the plaintiff failed to demonstrate a likelihood of success on the merits of its constitutional claims. View "Calvary Chapel Belfast v. University of Maine System" on Justia Law

Plaintiffs had their property taken by the Commonwealth of Puerto Rico through eminent domain. They received over two million dollars in compensation, including interest accrued up to the time of payment. However, they alleged a second violation occurred when the court-administered disbursement process failed to notify them of further accrued interest and deducted a 15% administrative fee from that interest. They challenged these practices as unconstitutional takings and violations of due process, seeking declaratory and equitable relief against the Administrator of the Administration of Tribunals.The United States District Court for the District of Puerto Rico initially dismissed most claims, finding plaintiffs lacked standing because they had not alleged an attempt to withdraw the accrued interest, making their injury speculative. After reconsideration, the court revived the claim challenging the deduction of administrative fees, but limited relief to prospective injunctive relief due to Eleventh Amendment constraints. The court ultimately granted summary judgment to the defendant, finding the administrative fee reasonable and not an unconstitutional taking, as plaintiffs provided no evidence to the contrary.The United States Court of Appeals for the First Circuit reviewed the case and confronted jurisdictional issues arising from Puerto Rico’s Title III bankruptcy under PROMESA. The court held that the administrative fee claim was void for violating the automatic stay provisions, as it amounted to a demand for property of the debtor (the Commonwealth), and dismissed that portion of the appeal. Regarding the interest claim, the court affirmed the district court’s dismissal, ruling plaintiffs lacked standing because they failed to allege they sought disbursement or challenged existing procedures. The First Circuit thus dismissed the appeal from summary judgment and affirmed the district court's dismissal. View "Hernandez-Castrodad v. Steidel-Figueroa" on Justia Law