Articles Posted in U.S. 1st Circuit Court of Appeals

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Defendant, a citizen and resident of Puerto Rico, borrowed $700,000 from Plaintiff, a citizen and resident of Greece. Plaintiff’s loan was not evidenced by "even a single scrap of paper." The parties subsequently disputed who the borrower was, whether Caribbean Carrier Holding (Panama), Inc., as Defendant claimed, or Defendant, as Plaintiff claimed. When the parties could not agree on the identity of the borrower, Plaintiff brought a collection action against Defendant in the United States District Court for the District of Puerto Rico. The district judge ruled that Plaintiff had not sustained his burden of proof and entered judgment for Defendant. The First Circuit Court of Appeals affirmed, holding that the district judge (1) substantially complied with the requirements of Fed. R. Civ. P. 52(a)(1), and (2) applied the correct substantive law standard in adjudicating Plaintiff’s claim. View "Valsamis v. Gonzalez-Romero" on Justia Law

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Plaintiff’s nine-year-old daughter, N.K., was injured when N.K.'s sandals, popularly known as CROCS, were caught in an escalator, causing N.K. to sustain injuries. Plaintiff invoked diversity jurisdiction and brought suit against Crocs, Inc. (Defendant) in the United States District Court for, inter alia, failure to warn and breach of an implied warranty of merchantability. The district court granted summary judgment for Defendant. The First Circuit Court of Appeals affirmed, holding that Plaintiff failed to adduce significantly probative evidence that CROCS present a heightened risk of escalator entrapment sufficient to allow a reasonable jury to find in her favor. View "Geshke v. Crocs, Inc." on Justia Law

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Plaintiffs, property owners, filed an action against Defendant, a bank, alleging eleven counts of state law violations for Defendant’s decision to deny Plaintiffs’ application for a loan modification under the Home Affordable Modification Program and to foreclose on Plaintiffs’ home. The district court granted Defendant’s motion to dismiss. The First Circuit Court of Appeals affirmed the district court’s dismissal of Plaintiffs’ amended complaint, holding that the district court properly dismissed Plaintiffs’ claims for breach of the implied obligation of good faith and fair dealing, violation of the Massachusetts Consumer Credit Cost Disclosure Act, rescission, negligence, and promissory estoppel. View "MacKenzie v. Flagstar Bank, FSB" on Justia Law

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Appellant filed two amended qui tam actions against her employer, a pharmaceutical company and its subsidiary (collectively, Appellees), under the federal False Claims Act (FCA), alleging that Appellees failed adequately to disclose the risks associated with some of their drugs and that this failure resulted in the submission of false claims by third-party patients and physicians for government payment. The district court dismissed both of Appellant's actions under Fed. R. Civ. P. 9(b) for failure to plead fraud with particularity and under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Appellant subsequently sought to amend the second amended complaint, asserting more theories of FCA liability, but the district court refused to allow further amendment. The First Circuit Court of Appeals affirmed the district court's rulings regarding the dismissal of Appellant's claim under Rule 9(b) and the denial of Appellant's proposed amendments, holding (1) Appellant's claims on all theories which were presented failed under Rule 9(b); and (2) the district court did not err in denying Appellant's motion to amend. View "United States ex rel. Ge v. Takeda Pharm. Co. Ltd." on Justia Law

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Plaintiffs, minors who were born with permanent brachial plexus injuries, sued through their mothers and next friends, alleging separately that their injuries were caused by the application of excessive traction during delivery. At both trials, the defense introduced into evidence a case report that purported to document an instance of brachial plexus injury occurring in a delivery. Plaintiffs lost their medical malpractice cases and subsequently sued the authors of the report, the journal in which it was published, and the publisher, contending that the report was false and that Defendants engaged in fraudulent conduct in publishing the report. The district court dismissed the complaint for failure to state a claim upon which relief could be granted. The First Circuit Court of Appeals affirmed, holding that, because the causation allegation was wholly speculative, Plaintiffs' claim did not reach the plateau of plausibility that is the "new normal in federal civil procedure." View "A.G. v. Elsevier, Inc." on Justia Law

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Robert Smith, a schizophrenic trash collector, was induced into acting as a straw buyer for two overvalued residential properties in Massachusetts. Smith sued various entities and individuals involved in the transactions. After a jury trial, the jury returned a verdict largely favorable to Smith on his claims of fraud and breach of fiduciary duty. The district court doubled and trebled certain damages pursuant to the Massachusetts Consumer Protection Statute, Mass. Gen. Laws ch. 93A. Two defendants, a real estate brokerage firm (Century 21) and a mortgage broker (NEMCO), appealed. Smith cross-appealed the dismissal of several of his claims. The First Circuit Court of Appeals (1) vacated the damage award against Century 21 and remanded for a new trial on damages; (2) reversed the judgment against NEMCO on Smith's common-law claims; (3) vacated the judgment against NEMCO on Smith's Chapter 93A claim and remanded for a determination on the merits; (4) vacated the judgment in favor of another defendant and remanded; and (5) reversed the dismissal of Smith's Chapter 93A claim against yet another defendant and remanded for a determination of the claim on the merits. View "Smith v. Jenkins" on Justia Law

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In 2004, Plaintiffs refinanced their home by means of a loan from Downey Savings and Loan Association (Downey), a federal insured financial institution. In 2008, Plaintiffs' monthly loan payment doubled. Later that year, Downey was closed and the FDIC was appointed as its receiver. U.S. Bank subsequently assumed all of Downey's loans and mortgages. After Plaintiffs defaulted on their mortgage loan, U.S. Bank conducted a foreclosure sale and recorded a foreclosure deed. Plaintiffs, in turn, sued U.S. Bank, claiming that the loan made by Downey violated various state consumer protection laws and that the foreclosure was unlawful. U.S. Bank removed the case to federal district court, which granted summary judgment to U.S. Bank. The First Circuit Court of Appeals affirmed, holding (1) the Financial Institutions Reform, Recovery, and Enforcement Act's exhaustion requirement applied to Plaintiffs' consumer protection claims, and therefore, Plaintiffs' failure to file those claims with the FDIC divested the district court of subject-matter jurisdiction; and (2) the transfer of a mortgage, authorized by federal law, obviates the need for a specific written assignment of the mortgage that state law would otherwise require, and thus, the foreclosure sale in this case was lawful. View "Demelo v. U.S. Bank Nat'l Ass'n" on Justia Law

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Appellant signed a loan agreement with Bank for a line of credit for his business (Business). Appellant later defaulted on the loan, and Bank brought a collection action against Appellant, his wife, their conjugal partnership, and Business. The FDIC subsequently took over the Bank as receiver and obtained summary judgment in its favor on the collection action. The district court also dismissed Appellants' counterclaim for lack of jurisdiction, finding that Appellants had not timely taken the steps necessary to maintain an action against the FDIC. The First Circuit Court of Appeals affirmed, holding (1) summary judgment was properly granted on the collection action because factual disputes did not remain concerning Bank's role in causing Appellants to breach their loan agreement and whether Appellants should be released from their obligations under that agreement; and (2) the district court correctly dismissed Appellants' counterclaims on jurisdictional grounds, as the Bank had insufficient assets to make any distribution on the claims of general unsecured creditors, including Appellants if they prevailed on their counterclaim, and therefore, the claim was not redressable. View "Fed. Deposit Ins. Corp., as receiver for R-G Premier Bank of P.R. v. Estrada-Rivera" on Justia Law

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This appeal concerned the decade-long litigation of Relator's qui tam action against Defendant for alleged violations of the federal False Claims Act (FCA). The claims arose from Defendant's efforts to promote the pharmaceutical drug Procrit. The First Circuit Court of Appeals reversed and remanded as to the district court's determination that Relator's kickback claims in Count I of the amended complaint were not pled with sufficient particularity. On remand, the district court imposed limitations on the scope of Relator's discovery for the kickback claims. At the discovery's conclusion, Relator agreed it had not identified any admissible evidence to support the remaining Count I claims, and the district court granted summary judgment for OBP on that basis. The First Circuit affirmed, holding that the discovery limitations imposed by the district court were proper, and therefore, the district court did not err in granting OBP's motion for summary judgment on the basis of Relator's stipulation that she did not possess evidence to support her remaining Count I claims. View "United States ex rel. Duxbury v. Ortho Biotech Prods., LP" on Justia Law

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In a prior suit, Appellees obtained a state court judgment against Appellant, Boston Property Exchange Transfer Company (BPE), for Defendant's financial misconduct. At the time of that judgment, BPE was about to begin arbitration of claims against PaineWebber, which it claimed was responsible for its financial troubles. Appellees successfully sought to compel assignment of BPE's legal claims to them to help satisfy their judgment against BPE. In this federal action, BPE claimed damages from the appellee assignees and their lawyers for allegedly mishandling the PaineWebber arbitration. The district court dismissed all of BPE's claims. The First Circuit Court of Appeals affirmed, holding (1) summary judgment for Appellees was proper on BPE's tort claims because BPE failed to prove that Appellees cause it to suffer damages; and (2) summary judgment was properly granted for Appellees on their breach of contract claim, as the assignment order in this case was not a contract. View "Boston Prop. Exch. Transfer Co. v. Iantosca" on Justia Law