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

A dispute arose when an insurance company denied coverage to an entity listed as an "Additional Insured" under a claims-made insurance policy. The insurer had issued the policy to a company operating an elder care facility. The plaintiff, a commercial real estate lender, had provided a loan secured by a mortgage on the property and later sought the appointment of a receiver after the operator defaulted. In January 2022, several residents were removed from the facility, leading to lawsuits alleging wrongful eviction and other claims against entities involved in financing and controlling the facility, including the plaintiff.The United States District Court for the District of Massachusetts reviewed the plaintiff’s suit seeking a declaration that the insurer had a duty to defend it in two underlying lawsuits. The district court granted summary judgment in part to each party, holding that the insurer had a duty to defend the plaintiff in one action (the Frost action) based on a claim related to the collection of an administrative fee, but not in the other (the Salie action), due to the plaintiff’s failure to provide timely notice as required by the policy. The court also granted summary judgment to the insurer on the plaintiff’s state-law claims for unfair and deceptive practices, finding insufficient evidence of bad faith.On appeal, the United States Court of Appeals for the First Circuit reversed the district court’s decision regarding the Frost action, holding that the insurer did not have a duty to defend because the claims did not allege liability solely attributable to the original insured, as required by the policy’s endorsement. The court affirmed the district court’s decision as to the Salie action and the state-law claims, concluding that the plaintiff’s failure to comply with the policy’s notice requirements and the insurer’s reasonable denial of coverage precluded recovery. The case was remanded for further proceedings. View "BI 40 LLC v. Ironshore Specialty Insurance Company" on Justia Law

Two individuals, along with other plaintiffs, filed suit under Section 7 of the Clayton Act to block a proposed merger between two airlines. After their case was filed, the U.S. Department of Justice, joined by several states and the District of Columbia, brought a separate action challenging the same merger. Both cases were assigned to the same judge in the U.S. District Court for the District of Massachusetts, but were not consolidated. The district court found that only two of the original plaintiffs had standing, dismissing the others. The plaintiffs’ request to consolidate their case with the DOJ’s was denied.The DOJ case proceeded to trial first, resulting in a bench trial judgment that the merger violated the Clayton Act, and the court permanently enjoined the merger. The airlines appealed but later abandoned the merger and dismissed their appeal. As a result, the district court dismissed the remaining plaintiffs’ case as moot, since the relief they sought had already been granted in the DOJ case. The dismissed plaintiffs then moved for attorneys’ fees and costs, arguing they were prevailing parties under Section 16 of the Clayton Act because their efforts contributed to the outcome.The United States Court of Appeals for the First Circuit reviewed whether the plaintiffs qualified as prevailing parties eligible for attorneys’ fees. The court held that, under the standard set by Buckhannon Board & Care Home, Inc. v. West Virginia Department of Health & Human Resources, a party must obtain a judicially sanctioned change in the legal relationship of the parties, such as a judgment on the merits or a consent decree. Because the plaintiffs’ case was dismissed as moot without a judgment on the merits, and they were not beneficiaries of the injunction in the DOJ case, the court concluded they were not prevailing parties. The First Circuit affirmed the district court’s denial of attorneys’ fees and costs. View "Garavanian v. JetBlue Airways Corp." on Justia Law

A graphic designer was commissioned in 2016 to create a room-sized artwork for a brewery’s exhibition at an annual fair produced by the defendant. The agreement specified that the designer would retain copyright ownership and that the installation could only be shown in person to paying patrons at the 2016 event. During the fair, the defendant created and widely disseminated marketing videos online featuring the designer’s work without attribution, despite the designer’s requests for credit. The designer applied for copyright registration in April 2017, and the work was eventually registered, though the exact date of registration is not in the record.The designer first filed a pro se copyright infringement suit in the United States District Court for the District of Massachusetts in early 2018, but the court dismissed it without prejudice for failure to allege copyright registration. Instead of amending, the designer filed a second action in state court, which was removed to federal court. After amending her complaint, the district court again dismissed the copyright claims, this time with prejudice, for failure to state a plausible claim and failure to allege registration. The designer did not respond to the motion to dismiss. In December 2020, now represented by counsel, she filed the present suit in federal court, which was dismissed with prejudice on claim preclusion grounds. On appeal, the United States Court of Appeals for the First Circuit reversed and remanded for further consideration.On remand, the district court again dismissed the case, this time on both claim preclusion and statute of limitations grounds. The United States Court of Appeals for the First Circuit affirmed the dismissal, holding that the copyright infringement claims were untimely under the three-year statute of limitations, as the plaintiff knew or should have known of the alleged infringement by early 2017. The court also found no basis for equitable tolling. View "Foss v. Eastern States Exposition" on Justia Law

Two hospitals incorporated and operating in Mexico provided emergency medical care to individuals insured under Medicare Advantage plans issued by a Maine-based health insurance company. The patients, while in Mexico, signed contracts with the hospitals agreeing to pay for all services rendered and provided their insurance information. The hospitals, through a third-party administrator, contacted the insurer and received representations that the patients had “full medical insurance benefits” for the proposed out-of-country emergency services. Relying on these representations, the hospitals provided extensive treatment. After the patients were discharged, the insurer refused to reimburse the hospitals beyond a $25,000 cap, citing the terms of the Medicare Advantage plans.The hospitals filed separate lawsuits in the United States District Court for the District of Maine, asserting Maine common-law claims for promissory estoppel and negligent misrepresentation. They argued that the insurer’s representations induced them to provide care for which they were not fully reimbursed. The insurer moved to dismiss, contending that the claims were, in substance, claims for Medicare benefits and thus subject to the Medicare Act’s administrative exhaustion requirements. The district court agreed, finding that the claims arose under the Medicare Act and that the hospitals had not exhausted administrative remedies. The court dismissed both actions for lack of subject-matter jurisdiction and later denied the hospitals’ motions to alter the judgments, rejecting the argument that foreign hospitals are exempt from the exhaustion requirement.On appeal, the United States Court of Appeals for the First Circuit affirmed. The court held that the hospitals’ claims, though styled as common-law torts, were “inextricably intertwined” with determinations of Medicare benefits and thus arose under the Medicare Act. Because the hospitals had not exhausted administrative remedies, the district court properly dismissed the actions for lack of subject-matter jurisdiction. The court also found no basis to excuse exhaustion for foreign hospitals. View "Hospital Amerimed Cancun S A DE C V v. Martin's Point Health Care, Inc." on Justia Law

A resident of a memory-care facility in Massachusetts alleged that the facility’s court-appointed receiver, KCP Advisory Group, LLC, conspired with others to unlawfully evict residents, including herself, by falsely claiming that the local fire department had ordered an emergency evacuation. The resident, after being transferred to another facility, filed suit in the United States District Court for the District of Massachusetts, asserting several state-law claims against KCP and other defendants. The complaint alleged that KCP’s actions violated statutory and contractual notice requirements and were carried out in bad faith.KCP moved to dismiss the claims against it, arguing that as a court-appointed receiver, it was entitled to absolute quasi-judicial immunity. The district court granted the motion in part and denied it in part, holding that while quasi-judicial immunity barred claims based on negligent performance of receivership duties, it did not bar claims alleging that KCP acted without jurisdiction, contrary to law and contract, or in bad faith. The court thus denied KCP’s motion to dismiss several counts, including those for violation of the Massachusetts Consumer Protection Act, intentional infliction of emotional distress, civil conspiracy, fraud, and breach of fiduciary duty. KCP appealed the denial of immunity as to these counts.The United States Court of Appeals for the First Circuit reviewed the district court’s denial of absolute quasi-judicial immunity de novo. The appellate court held that KCP’s alleged acts—removing residents from the facility—were judicial in nature and within the scope of its authority as receiver. Because KCP did not act in the absence of all jurisdiction, the court concluded that quasi-judicial immunity barred all of the resident’s claims against KCP. The First Circuit therefore reversed the district court’s denial of KCP’s motion to dismiss the specified counts. View "Suny v. KCP Advisory Group, LLC" on Justia Law

In August 2021, the defendant, along with his brother and another accomplice, committed a series of crimes in Puerto Rico, including two carjackings and an armed robbery. During the first carjacking, a firearm was brandished at the victim, and the group later attempted a second carjacking, which was unsuccessful. That same night, the defendant and another individual robbed a bar, during which the defendant fired a gun both outside and inside the establishment. The defendant was arrested the following day, confessed to the attempted carjacking, and admitted to other criminal conduct that night.A grand jury indicted the defendant on two counts of carjacking and two counts of possession and brandishing a firearm in furtherance of a crime of violence. He entered into a plea agreement, pleading guilty to both carjacking counts and one count of possession of a firearm in furtherance of a crime of violence. The plea agreement contained errors regarding the total offense level for the carjacking counts and the maximum supervised release term for the firearm count. The presentence report corrected these errors, and neither party objected. At sentencing, the United States District Court for the District of Puerto Rico imposed sentences above those recommended by the parties, including an upward variance on the firearm count, citing the seriousness of the offenses and the defendant’s conduct.The United States Court of Appeals for the First Circuit reviewed the case. The court held that, although the defendant was misinformed about the supervised release term for the firearm count at the plea hearing, he was later correctly informed and failed to show a reasonable probability that this error affected his decision to plead guilty. The court also found no Rule 11 error regarding the sentencing range for the carjacking counts and concluded that the upwardly variant sentence for the firearm count was procedurally reasonable. The First Circuit affirmed the conviction and sentence. View "United States v. Morales-Ortiz" on Justia Law

Two brothers with developmental disabilities, Gaven and Jared, live with their parents, who are certified to provide in-home care. Both brothers qualified for Maine’s “Single Member Services,” which would allow each to receive one-on-one care from a designated provider. The family requested that each parent be reimbursed for providing care to one brother. However, the Maine Department of Health and Human Services determined that, because the brothers lived together, they were only eligible for “Two Member Services,” meaning a single provider would be reimbursed to care for both, at half the total rate. The parents continued to provide one-on-one care to both brothers, but were only reimbursed for one provider, resulting in a significant financial shortfall.The family challenged this determination in Maine Superior Court, which ruled in their favor, finding that the Department’s interpretation of its rules was arbitrary and inconsistent with its policies. Following this decision, the Department began reimbursing both parents for providing one-on-one care. The family then filed a federal lawsuit seeking damages for the period before the state court’s ruling, alleging discrimination under Title II of the Americans with Disabilities Act (ADA). The United States District Court for the District of Maine dismissed the case, holding that the Department was protected by Eleventh Amendment sovereign immunity.On appeal, the United States Court of Appeals for the First Circuit reversed the district court’s dismissal. The First Circuit held that the Department was not entitled to sovereign immunity because Congress validly abrogated such immunity under Title II of the ADA in this context. The court found that the Department’s policy violated the brothers’ equal protection rights, as there was no rational basis for providing reduced services solely because the brothers lived together. The case was remanded for further proceedings. View "McKenna v. Maine Department of Health and Human Services" on Justia Law

Investors in a major drug-development company alleged that the company and two of its officers misled them about the integrity of the company’s overseas supply chain for long-tailed macaques, which are essential for its business. After China halted exports of these monkeys due to the COVID-19 pandemic, the company shifted to suppliers in Cambodia and Vietnam, some of which were later implicated in a federal investigation into illegal wildlife trafficking. Despite public signs of the investigation and seizures of shipments, the company’s CEO assured investors that its supply chain was unaffected by the federal indictment of certain suppliers, and that the indicted supplier was not one of its own. However, evidence suggested that the company was, in fact, sourcing macaques from entities targeted by the investigation, either directly or through intermediaries.The United States District Court for the District of Massachusetts dismissed the investors’ class action complaint, finding that the plaintiffs failed to allege any false or misleading statements or scienter (intent or recklessness), and therefore did not reach the issue of loss causation. The court also dismissed the derivative claim against the individual officers.The United States Court of Appeals for the First Circuit reviewed the dismissal de novo. The appellate court held that the investors plausibly alleged that the company and its CEO knowingly or recklessly misled investors in November 2022 by assuring them that the company’s supply chain was not implicated in the federal investigation, when in fact it was. The court found these statements actionable, but agreed with the lower court that other statements about “non-preferred vendors” were not independently misleading. The First Circuit reversed the district court’s dismissal as to the November 2022 statements and remanded for further proceedings, including consideration of loss causation. Each party was ordered to bear its own costs on appeal. View "State Teachers Retirement System of Ohio v. Charles River Laboratories International, Inc." on Justia Law

A police officer with the Cambridge Police Department, who had served in both patrol and special investigations roles, posted a comment on his personal Facebook page criticizing the naming of a federal police reform bill after George Floyd. In his post, he referred to Floyd as a "career criminal, a thief and druggie," and expressed pessimism about the country's future. The post was made from home, visible only to his Facebook friends, but was quickly screenshotted and shared with community members, including the local NAACP. The police commissioner was alerted, and the department initiated an internal investigation. The officer was placed on administrative leave and, after the investigation concluded that his post violated department policies on courtesy and professionalism, he was suspended without pay for four days.The officer filed suit in the United States District Court for the District of Massachusetts, alleging that his suspension was unconstitutional retaliation for exercising his First Amendment rights. Both parties moved for summary judgment. The district court granted summary judgment in favor of the department, finding that the department’s interest in maintaining public trust and effective service outweighed the officer’s and the public’s interest in his speech, particularly given the context of heightened scrutiny and protest following George Floyd’s death.On appeal, the United States Court of Appeals for the First Circuit reviewed the district court’s decision de novo. The First Circuit held that, while the officer’s speech addressed a matter of public concern, its mocking and disparaging nature diminished its First Amendment value. The court further held that the department’s prediction that the post could undermine public trust was reasonable, especially in the context of ongoing public unrest and the department’s need to maintain community confidence. The court found no evidence of impermissible viewpoint discrimination. The First Circuit affirmed the district court’s grant of summary judgment for the department. View "Hussey v. City of Cambridge" on Justia Law

In this case, the plaintiff, Robert Arias, sued several federal Drug Enforcement Administration (DEA) agents for damages, alleging that they violated his Fourth Amendment rights during his arrest in a shopping center parking lot in September 2016. Arias claimed that some agents used excessive force against him, while others failed to intervene to prevent that force. He based his claims on the implied cause of action for damages under the Fourth Amendment recognized by the Supreme Court in Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics.The United States District Court for the District of New Hampshire granted summary judgment to the defendants. The court reasoned that, due to the 1988 amendment to the Inspector General Act (IGA), which created an administrative mechanism for reporting federal law enforcement misconduct, Arias’s claims arose in a “new context” compared to Bivens. The District Court concluded that the existence of this alternative remedial scheme counseled against extending the Bivens remedy, thus precluding Arias’s excessive force and failure-to-intervene claims.On appeal, the United States Court of Appeals for the First Circuit reviewed the District Court’s decision. The First Circuit held that the IGA’s administrative remedy, by itself, does not make the context of Arias’s excessive force claims meaningfully different from Bivens. The court found that Arias’s excessive force claims arise in the same context as Bivens, so the Bivens remedy remains available. However, the court affirmed summary judgment on Arias’s failure-to-intervene claims, as he did not show that those claims arise in the same context as Bivens or justify extending Bivens to that context. The First Circuit thus reversed the District Court’s judgment on the excessive force claims and remanded for further proceedings, while affirming the judgment on the failure-to-intervene claims. View "Arias v. Herzon" on Justia Law