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

In a suit alleging engine defects in Volkswagen and Audi vehicles, the district court awarded $30 million in attorneys' fees to several groups of plaintiffs' attorneys who achieved a class action settlement agreement. The award was based in federal law. The First Circuit vacated the fee award and remanded for calculation using Massachusetts law. In a diversity suit, where the settlement agreement expressly states that the parties have not agreed on the source of law to apply to the fee award and there is an agreement that the defendants will pay reasonable fees, state law governs the fee award. View "Volkswagen Grp of Am. v. McNulty Law Firm" on Justia Law

Companion was authorized to license space in Wal-Mart stores to companies that sell durable medical equipment and entered into licensing agreements with defendants. In 2007, defendants shut down operations. Companion sued. Problems arose during discovery, including defense counsel motions to withdraw, allegations of inadequate responses to discovery requests, objections to the scope of discovery, refusal to attend depositions, motions to compel, multiple extensions, and claims of obstruction. After three years, the district judge imposed a default as to all counts, based on discovery violations by the defendants. The court eventually lifted the default except as to Companion's veil piercing claim, allowing the substantive claims to go to trial. A jury found for Companion and awarded more than $1 million in damages. Defendants, personally liable as a result of the default, appealed. The First Circuit vacated the default and remanded, "because the district court imposed such a severe sanction based on a very limited slice of the relevant facts." View "Companion Health Servs, v. Majors Mobility, Inc." on Justia Law

Plaintiff, a police department employee, made claims of sexual harassment and emotional abuse. The district court issued a scheduling order, closing discovery as of November 18, 2010. When defense counsel encountered an emergency, the court reset the date to January 28, 2011. In November, defendants served plaintiffs with interrogatories and requests for production of documents. The court extended discovery closure date to February 28, 2011. On February 24, plaintiffs moved to extend this deadline by 30 days, claiming that their lawyer had no time to devote to their case. The court extended the discovery closure date to March 25, but stated that plaintiffs must provide answers to outstanding interrogatories and requests for production of documents no later than February 28 and that failure to answer by that date would result in dismissal, with prejudice. On March 1, defendants informed the court that plaintiffs had not complied. The court extended the deadline by 10 days. On March 16, defendants informed the court that the interrogatories remained unanswered and that the documents had not been produced. The next day the court dismissed the action with prejudice. The First Circuit affirmed. View "Mulero-Abreu v. PR Police Dep't" on Justia Law

An employee crashed a Verizon truck and admitted to snorting heroin earlier that day. When his supervisor visited his home to have paperwork completed, the encounter became hostile. Verizon fired him. He filed a Massachusetts workers' compensation claim, based on injuries from the accident and alleged psychological harm based on-the-job harassment by the supervisor before the accident and the supervisor's visit to the house. An ALJ rejected the claims and the review board affirmed. A state court affirmed. Employee filed a second workers' compensation claim pertaining solely to the incident at the house. The claim was rejected by the ALJ as res judicata; the board and court affirmed, with an award of double costs against the employee for frivolous appeal. Employee then filed suit against Verizon and the supervisor, charging intentional infliction of emotional distress, negligent infliction of emotional distress, and trespass. The court dismissed, based on preemption provisions of the Labor Management Relations Act, 29 U.S.C. 185(a), and the exclusivity provision of the Compensation Act, Mass. Gen. L. ch. 152, 24. The court ordered plaintiff's attorney to pay $34,908.12 to reflect only defendants’ attorney fees incurred after the court's warning about the lawsuit's viability. The First Circuit affirmed. View "McCarty v. Verizon New England Inc." on Justia Law

Debtor had unsecured liabilities of almost $15,000 and anticipated disposable income of about $100 per month. He visited an attorney, who indicated that he would not file a Chapter 7 proceeding until the debtor paid the anticipated legal fee ($2,300). If debtor chose the Chapter 13 alternative, he could pay over time as part of the Chapter 13 plan. The attorney estimated that fees associated with a Chapter 13 proceeding would total $4,100. Not having fees for a Chapter 7 filing, the debtor opted for Chapter 13 and paid $500 on account. The attorney submitted a “fee only” Chapter 13 plan that called for payment of $100 per month for 36 months to the bankruptcy estate. Of the total $3,600, only about $300 would be available to general creditors. The bankruptcy court rejected the plan as not submitted in good faith. The debtor opted to convert to Chapter 7; the attorney moved for an award of $2,872. The bankruptcy court awarded $299, which required him to disgorge more than $200. The district court affirmed. Noting a division in the circuits, the First Circuit reversed, holding that fee-only plans are not per se in bad faith.View "Berliner v. Pappalardo" on Justia Law

Debtors engaged the attorney to represent them in bankruptcy proceedings. They owed more than $115,000 in unsecured debt with no realistic prospect of payment. In a retainer agreement, he estimated that legal fees plus court costs would total around $4,000. Debtors paid $3,684 on account. Their Chapter 13 plan, 11 U.S.C. 1321-1322, was approved by the bankruptcy court and the lawyer filed an application requesting an additional $8,173.36 in attorneys' fees and expenses. The trustee objected. The bankruptcy court set the total fee and expense figure at $3,684, finding that the case was relatively uncomplicated. The district court and First Circuit affirmed, agreeing that the attorney billed an excessive number of hours. View "Sullivan v. Pappalardo" on Justia Law

On Monday afternoon, a sentencing hearing scheduled for Wednesday afternoon was rescheduled to Wednesday morning. The court sent electronic notice; prior notices and filings had been electronic. The attorney failed to appear and, on the same day, the court imposed a fine of $1,500. The First Circuit reduced the fine to $500, noting that the attorney was unwise in his criticism of the lower court when he requested reconsideration and rejecting the attorney's characterization of the fine as criminal contempt. The court noted that it would be better policy to hear from the attorney before imposing the sanction.

A federal grand jury issued a subpoena to a law office, commanding production of documents relating to a real estate transaction. The attorney obtained the client's consent and complied. The client changed his mind, notified USAO that the documents were privileged, and moved to quash the subpoena.The district court found that the documents were not privileged. The First Circuit affirmed. The district court acted within its discretion in conducting an in camera review; the client's generalized assertion of privilege did not establish that privilege attached to any particular document. The documents would have been disclosed at closing and the attorney essentially acted as a scrivener and disburser of funds. The request for production did not implicate the privilege against self-incriminating testimony.

The former (2001-2006) Assistant Secretary of State for Protocol Affairs at the Puerto Rico State Department sued the Secretary of State under 42 U.S.C. 1983, alleging that the official fired him due to his political affiliation. The district court dismissed, holding that plaintiff could be terminated without cause because he held a trust position for which party affiliation was an appropriate qualification, and fined plaintiff's attorneys $1000 each, concluding that the pleadings and responses that they submitted violated Federal Rule of Civil Procedure 11(b). The First Circuit affirmed; plaintiff's position was not federally protected against political discrimination. The pleadings at issue consisted, in large part, of speculation and conclusory allegations lacking evidentiary support.

In a suit under the Copyright Act, 17 U.S.C. 106, described by the court as the equivalent of hand-to-hand combat, the plaintiff settled with some defendants for $30,000. After trial plaintiff obtained injunctive relief and statutory damages in the amount of $40,000 against others, offset by the $30,000 settlement. The court awarded $98,745 in attorney fees; a motion for costs, initially denied, remained pending. The First Circuit affirmed, first noting that the district court had cured a jurisdictional defect by awarding $3,413.05 in costs. The district court correctly applied the lodestar method. Although the fees exceed the award, the violation was willful and the injunctive relief may be worth more that the award of damages. While a rejected Rule 68 offer, not improved upon at trial, obligates the plaintiff to pay the defense costs incurred subsequent to the rejection the offer plaintiff made before trial was not a Rule 68 offer.