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

The First Circuit affirmed Defendant’s convictions for one count of conspiracy to convert government property, fourteen counts of conversion of government property, and one count of conspiracy to commit money laundering and Defendant’s sentence to a term of imprisonment of fifty-four months.Defendant’s convictions stemmed from his role in using bank accounts that he owned or controlled in order to negotiate fraudulently-obtained federal tax refund checks. The First Circuit held (1) Defendant’s argument that the district court erred in permitting a prior settlement with the Massachusetts Attorney General’s Office to be used at trial failed; (2) the district court did not err in permitting the government to introduce expert testimony at trial regarding the Massachusetts rules about Interest on Lawyers’ Trust Accounts (IOLTA) accounts for attorneys; and (3) the district court did not err in imposing three sentencing enhancements in calculating Defendant’s sentencing range under the Sentencing Guidelines. View "United States v. Cohen" on Justia Law

The First Circuit affirmed Defendant’s convictions for one count of conspiracy to convert government property, fourteen counts of conversion of government property, and one count of conspiracy to commit money laundering and Defendant’s sentence to a term of imprisonment of fifty-four months.Defendant’s convictions stemmed from his role in using bank accounts that he owned or controlled in order to negotiate fraudulently-obtained federal tax refund checks. The First Circuit held (1) Defendant’s argument that the district court erred in permitting a prior settlement with the Massachusetts Attorney General’s Office to be used at trial failed; (2) the district court did not err in permitting the government to introduce expert testimony at trial regarding the Massachusetts rules about Interest on Lawyers’ Trust Accounts (IOLTA) accounts for attorneys; and (3) the district court did not err in imposing three sentencing enhancements in calculating Defendant’s sentencing range under the Sentencing Guidelines. View "United States v. Cohen" on Justia Law

The First Circuit reversed the decision of the Tax Court ruling that Appellants owed an excise tax for contributions made to their Roth individual retirement accounts (Roth IRAs) in violation of contribution limits, holding that a transaction Appellants entered into to reduce their federal taxes violated neither the letter nor purpose of the relevant statutory provisions.Specifically, the Tax Court found that the Commissioner of Internal Revenue appropriately recharacterized the transaction at issue under the common-law substance over form doctrine because the transaction’s sole purpose was to “shift[] millions of dollars into Roth IRAs in violation of the statutory contribution limits.” The First Circuit reversed, holding that the Commissioner did not have the power to call Appellants’ transaction a violation of the Tax Code where the transaction did not violate the plain intent of the relevant statutes. View "Benenson v. Commissioner of Internal Revenue" on Justia Law

The First Circuit reversed the decision of the Tax Court ruling that Appellants owed an excise tax for contributions made to their Roth individual retirement accounts (Roth IRAs) in violation of contribution limits, holding that a transaction Appellants entered into to reduce their federal taxes violated neither the letter nor purpose of the relevant statutory provisions.Specifically, the Tax Court found that the Commissioner of Internal Revenue appropriately recharacterized the transaction at issue under the common-law substance over form doctrine because the transaction’s sole purpose was to “shift[] millions of dollars into Roth IRAs in violation of the statutory contribution limits.” The First Circuit reversed, holding that the Commissioner did not have the power to call Appellants’ transaction a violation of the Tax Code where the transaction did not violate the plain intent of the relevant statutes. View "Benenson v. Commissioner of Internal Revenue" on Justia Law

The First Circuit affirmed the district court’s ruling that the “set-off rule” announced by the United States Secretary of Health and Human Services (Secretary) in the form of answers to Frequently Asked Questions (FAQs) posted on medicaid.gov represented a substantive policy decision that could not be adopted without notice and comment.In 1981, Congress authorized the payment of sums in addition to Medicaid payments hospitals that treat indigent patients receive in order to cover the full costs of care. Congress later passed a law seeking to cap those payments at each hospital’s “costs incurred.” At issue was to what extent “costs incurred” equals the total costs of service rather than the costs net of payments from sources such as Medicare and private insurance. With two exceptions, Congress stated that “costs incurred” are “as determined by the Secretary.” In 2010, the Secretary made its FAQs announcement that the payments to be offset against total costs in calculating “costs incurred” also included reimbursements received from Medicare and private insurance. The First Circuit held that the Secretary’s rule was procedurally improper for having failed to observe the notice-and-comment procedures prescribed by the Administrative Procedure Act. View "New Hampshire Hospital Ass’n v. Hargan" on Justia Law

The district court did not err in dismissing Plaintiffs’ first amended complaint (FAC) for failure to state a claim or in denying Plaintiffs leave to file their proposed second amended complaint (PSAC) in this litigation in which Plaintiffs brought securities fraud claims against Sarepta Therapeutics, Inc. (Sarepta), Sarepta’s chief executive officer and Sarepta’s chief scientific officer (collectively, Defendants).Plaintiffs sought to represent a class of purchasers of securities that Sarepta issued between April 21, 2014 and October 27, 2014. Plaintiffs alleged that Defendants knowingly or recklessly misled investors about their target date for submitting an application to the United States Food and Drug Administration (FDA) for approval of the drug eteplirsen. The district court dismissed the FAC and denied Plaintiffs leave to file the PSAC. The First Circuit affirmed, holding (1) the district court did not err in dismissing the FAC for failure to state a claim because Plaintiffs did not adequately plead scienter in the FAC; and (2) and even assuming that the PSAC was not futile, the district court did not abuse its discretion in denying the PSAC on undue delay grounds. View "Kader v. Sarepta Therapeutics, Inc." on Justia Law

The First Circuit affirmed the district court’s judgment convicting Defendant, after he pleaded guilty, to two counts of conspiring to possess with intent to distribute narcotics and sentencing him to 121 months’ imprisonment. Contrary to Defendant’s contentions on appeal, the Court held (1) the district court did not err at the change of plea hearing in concluding that Defendant was competent to plea without further inquiry into his mental state or whether the medications he was taking would affect the voluntariness of his plea; and (2) the district court did not abuse it discretion by denying Defendant’s third motion for substitute counsel after his plea was entered. View "United States v. Mejia-Encarnacion" on Justia Law

The First Circuit affirmed the judgment of the district court dismissing this defamation action for lack of personal jurisdiction.The Deal, LLC posted to a subscriber-only website an attached to email newsletters three articles written by William Meagher that allegedly defamed Scottsdale Capital Advisors Corp. and John Hurry (collectively, Plaintiffs). Plaintiffs filed suit in New Hampshire. The only connection any of the parties had with New Hampshire was that Dartmouth College, one of The Deal’s institutional subscribers, was located there. The district court dismissed the complaint for lack of personal jurisdiction, concluding that Plaintiffs would have no reasonable basis upon which to establish that anyone in New Hampshire saw any of the articles as a result of the Dartmouth subscription. The First Circuit affirmed, holding that nothing in the record indicated that Plaintiffs’ only injury, reputational harm, arose in any way from Defendants’ only contacts with Plaintiffs’ chosen forum. View "Scottsdale Capital Advisors v. The Deal, LLC" on Justia Law

Plaintiffs within the zone of danger may recover for negligent infliction of emotional distress under the general maritime law.Plaintiffs brought this maritime action against Defendant, which they hired to ferry three construction vehicles and their drivers from Rockland, Maine to North Haven, Maine, after two of the vehicles tipped over onto the vessel’s port bulwark during rough seas. Plaintiffs claimed that the ship captain was negligent and seeking damages for property loss and emotional distress. The district court found in favor of Plaintiffs and awarded $257,154 in damages, including $100,000 for emotional distress. The First Circuit affirmed the judgment of the district court in substantial part, vacating only one element of the damages award, holding (1) the district court properly found that the weather conditions that caused the incident were foreseeable; (2) the district court’s award for damaged plywood panels rested on a clearly erroneous view of the facts, but the remainder of the damages award was not in error; (3) maritime plaintiffs within the “zone of danger” can recover for negligent infliction of emotional distress in the First Circuit; and (4) the district court did not clearly err in determining that Plaintiffs were within the zone of danger and that they experienced physical consequences of emotional distress. View "Sawyer Brothers, Inc. v. Island Transporter, LLC" on Justia Law

The First Circuit affirmed the district court’s decision affirming an administrative law judge’s (ALJ) finding that Appellant was not disabled within the meaning of the Social Security Act and thus not entitled to Supplemental Security Income benefits, holding that the ALJ’s determination was supported by substantial evidence. Specifically, the Court held (1) the ALJ did not err in according only slight weight to the testimony of an orthopedic physician who treated Appellant for a non-displaced fracture of her left femur; and (2) the ALJ was entitled to rely on testimony of an impartial vocational expert presented by the Commissioner of the Social Security Administration about available jobs that Appellant was entitled to perform. View "Purdy v. Berryhill" on Justia Law