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

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At issue in this case was whether alleged misrepresentations made by Defendants were made “in connection with” a transaction in covered securities under the Securities Litigation Uniform Standards Act of 1998 (SLUSA). Plaintiffs, investors in a licensed non-diversified investment company, filed a putative class action in Puerto Rico court against the Fund and others alleging fraud or misrepresentation in violation of Puerto Rico law after the Fund invested the majority of its assets in notes sold by Lehman Brothers, resulting in the Fund adopting a plan of liquidation. Defendants removed the action to the federal district court, asserting that it fell within the ambit of the SLUSA. Plaintiffs unsuccessfully sought remand on jurisdictional grounds. Ultimately, the district court granted Defendants’ motions to dismiss premised on SLUSA preclusion. The First Circuit vacated the judgment of dismissal and remitted with instructions to return the case to the Puerto Rico Court, holding that the link between the misrepresentations alleged and the covered securities in the Fund’s portfolio was too fragile to support a finding of SLUSA preclusion under Chadbourne & Parke LLP v. Troice. View "Hidalgo-Velez v. San Juan Asset Mgmt., Inc." on Justia Law

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Mark Hansen was a former vice president of Wilcox Industries Corp. After Hansen left Wilcox, he founded his own company, Advanced Life Support Technologies. Wilcox filed a complaint against Hansen, alleging that Hansen stole Wilcox’s customers and spread false and damaging information about Wilcox’s products. Hansen tendered his defense to Wilcox’s insurer, Sentry Insurance Company. Sentry denied coverage, stating that it did not have a duty to defend or indemnify Hansen against Wilcox’s claims. Hansen subsequently filed suit seeking a declaration that Sentry owed a duty to defend and indemnify him with respect to Wilson’s complaint. The district court granted summary judgment for Wilcox, concluding that Hansen did not qualify as an “insured” under Wilcox’s policy. The First Circuit affirmed, holding (1) Sentry owed no duty to defend or indemnify Hansen in the underlying litigation; and (2) there was no evidence in the record that would permit a reasonable jury to find that Sentry breached any contract with Hansen. View "Hansen v. Sentry Ins. Co." on Justia Law

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After an oil drilling rig owned by BP Exploration & Production, Inc. and BP America Production Company (collectively, BP) sank of the Gulf Coast of Louisiana and caused a massive oil spill, Packagen, a manufacturer of packaging products, sought to sell containment boom to BP. Packagen began producing boom after the oil spill, but BP never paid for any of the boom manufactured by Packagen. Packagen filed a five-count complaint against BP in federal district court, invoking diversity jurisdiction and alleging various state-law claims. The district court granted summary judgment in favor of BP. The First Circuit affirmed, holding that the district court did not err in granting summary judgment on Packagen’s negligent and intentional misrepresentation claims, breach of contract claim, unjust enrichment and quantum meruit claim, and promissory estoppel claim. View "Packgen v. BP Exploration & Prod., Inc." on Justia Law

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The lawsuit underlying this action alleged that Glynis McCormack’s ward sexually and physically abused a younger boy. In this declaratory judgment action, the district court ruled that Metropolitan Property and Casualty Insurance Company, McCormack’s insurer, had a duty to defend McCormack in the underlying lawsuit. Metropolitan appealed, arguing that the alleged harmful conduct was excluded from coverage under the governing policy. The First Circuit affirmed, holding that, under the facts of this case, McCormack’s policy would cover the harm alleged in the complaint, and therefore, Metropolitan had a duty to defend McCormack in the underlying action. View "Metro. Prop. & Cas. Ins. Co. v. McCarthy" on Justia Law

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Plaintiff worked in a luggage factory in France that was owned by Samsonite. Samsonite was controlled by an investment group led by Bain Capital, LLC. Bain wanted to shut down the factory, and to avoid paying millions of dollars in post-termination benefits to the laid-off employees of the factory, Bain and Samsonite hired a third party, HB Group, to buy the factory. In 2007, a French court ordered the judicial liquidation of the factory. Because HB Group had no resources to pay Plaintiff and her coworkers, Plaintiff commenced this putative class action in 2012 seeking to hold Bain liable for losses suffered by the factory’s workers as a result of the sale and liquidation. The district court dismissed the complaint as untimely under the relevant three-year statute of limitations. The First Circuit affirmed, holding that there was no basis to conclude that the statute of limitations was tolled in this case. View "Abdallah v. Bain Capital, LLC" on Justia Law

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Richard Feingold’s mother purchased a life insurance policy from an Insurer listing her husband as the only beneficiary. Feingold's mother died in 2006. In 2012, Richard informed Insurer of his mother's death. The Insurer issued Feingold a check for death benefits but did not provide a copy of his mother's life insurance policy. Feingold filed a class action complaint against Insurer in 2013, alleging that the Insurer owed Feingold and the putative class of similarly situated beneficiaries damages based on the Insurer’s handling of unclaimed benefits under its life insurance policies. Specifically, Feingold claimed that the Insurer had an obligation, arising from a regulatory agreement (“Agreement”) between the Insurer and several states, to discover the death of its insureds and notify beneficiaries. The district court dismissed the complaint for failure to state a claim, noting that the Agreement was a contract only between Insurer and participating states. The First Circuit affirmed, holding that because Feingold was neither a party nor a third-party beneficiary of the Agreement, he had no authority to enforce the terms of the Agreement. View "Feingold v. John Hancock Life Ins. Co." on Justia Law

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Plaintiff sought insurance coverage for gastric lap band surgery. Defendant, a health-care insurer that covered Plaintiff by virtue of Plaintiff’s husband’s employment with the federal government, refused to cover the full cost of the surgery. Plaintiff brought tort and breach of contract claims against Defendant in the Puerto Rico Court of First Instance. Defendant removed the action to the federal district court, asserting, inter alia, that the Federal Employees Health Benefits Act of 1959 (FEHBA) completely preempted Plaintiff’s local-law claims, thus conferring original jurisdiction on the federal court. Defendant then moved to dismiss the case, arguing that the FEHBA demanded exhaustion of administrative remedies. Plaintiff, in the meantime, requested that the district court remand the case to the Court of First Instance. The district court (1) denied Plaintiff’s motion to remand, holding that the FEHBA completely preempted Plaintiff’s claims and, thus, federal jurisdiction attached; and (2) dismissed the action for Plaintiff’s failure to exhaust administrative remedies. The First Circuit Court of Appeals reversed the district court’s judgment of dismissal and its order denying remand, holding that the court erred in concluding that the FEHBA afforded complete preemption. View "Lopez-Munoz v. Triple-S Salud, Inc. " on Justia Law

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Appellee, which manufactures and distributes specialized products for use in the defense, security, and aerospace industries, entered into a consultant agreement with Appellant, under which Appellant agreed to identify buyers for Appellee’s products. Three years later, Appellee acquired the rights to manufacture and sell RH1280B field-programmable gate array (“FPGA”)s, which are semiconductor integrated circuits that are used in satellites and other space equipment. Operating under the terms of the consultant agreement, Appellant found customers for RH1280B FPGAs, accepted delivery of the PFGAs, and resold the goods to its customers. Before Appellant accepted delivery, however, Appellee warned it that the RH1280Bs failed to meet certain specifications. Appellant subsequently refused to pay an outstanding balance of $1,800,000, alleging that Appellee breached its express warranty regarding the performance characteristics of the RH1280B. Thereafter, Appellee terminated the consultant agreement. The district court granted summary judgment in Appellee’s favor. The First Circuit Court of Appeals affirmed, holding that, under the circumstances of this case, the district court correctly granted summary judgment in Appellee’s favor. View "BAE Sys. Info. & Elec. Sys. Integration, Inc. v. SpaceKey Components, Inc." on Justia Law

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Plaintiff purchased property with a mortgage from Countrywide Home Loans, Inc. In October 2006, Plaintiff took out a loan from Countrywide to cure his breach of a divorce agreement. In December 2006, Plaintiff took out a home equity loan from Countrywide. Because Plaintiff was not able to make payments on his October 2006 loan, Countrywide foreclosed on his property. In May 2009, Plaintiff filed a complaint alleging claims of unjust enrichment, rescission/equitable relief, breach of the implied covenant of good faith and fair dealing, violations of Mass. Gen. Laws ch. 93A, and negligence. Countrywide removed the case to federal court. The district court resolved certain claims as a matter of law and, after a bench trial on the remaining claims, entered judgment in favor of Countrywide. The First Circuit Court of Appeals affirmed, holding that no grounds exited for reversing any of the district court’s decisions. View "Frappier v. Countrywide Home Loans, Inc." on Justia Law

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This appeal concerned the decade-long litigation regarding the regulation of Puerto Rico’s milk industry. The district court approved a comprehensive Settlement Agreement reached by the original parties: the government defendants, including the Office of the Milk Industry Regulatory Administration for the Commonwealth of Puerto Rico (Spanish acronym “ORIL”), and the plaintiff milk processors, Vaqueria Tres Monjitas, Inc. and Suiza Dairy, Inc. After the district court approved of the Agreement, ORIL filed a motion to alter or amend the judgment, challenging the portion of the district court order opining that Puerto Rico had waived its Eleventh Amendment immunity by entering into the Agreement. The district court denied ORIL’s motion. The First Circuit Court of Appeals (1) held that the language at issue was merely a statement of dicta and not a judgment, and consistent with this construction, the district court was strongly encouraged to strike the statement; and (2) otherwise dismissed the appeal for want of jurisdiction. View "Vaqueria Tres Monjitas, Inc. v. Comas-Pagan" on Justia Law