Justia Civil Procedure Opinion Summaries

Steven Fustolo purchased a rental investment unit in Boston, Massachusetts, in 2009, taking out a mortgage with Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Union Capital Mortgage Business Trust. The mortgage was reassigned six times, and Fustolo defaulted on the loan. He sought a declaratory judgment that the current holders, Federal Home Loan Mortgage Corporation as Trustee of SCRT 2019-2 (the Trust) and Select Portfolio Servicing, Inc. (SPS), had no right to foreclose because they did not validly hold the mortgage or the accompanying promissory note. Fustolo also claimed defamation, slander of title, unfair business practices, violation of Massachusetts's Debt Collection Act, and a violation of Regulation X of the Real Estate Settlement Procedures Act (RESPA) by SPS.The United States District Court for the District of Massachusetts dismissed Fustolo's claims, except for one count challenging the adequacy of a notice letter, which was later settled. The court found that the Trust validly held both the mortgage and the note, and that Fustolo's state law claims hinged on the incorrect assertion that the Trust did not have the right to foreclose. The court also dismissed the RESPA claim, stating that Fustolo failed to specify which provision of RESPA was violated and that SPS had responded to his notice of error.The United States Court of Appeals for the First Circuit affirmed the district court's dismissal. The appellate court held that the Trust validly held the mortgage and the note, as the note was indorsed in blank and in the Trust's possession. The court also found that MERS had the authority to assign the mortgage despite Union Capital's dissolution. Additionally, the court ruled that Fustolo's RESPA claim failed because challenges to the merits of a servicer's evaluation of a loss mitigation application do not relate to the servicing of the loan and are not covered errors under RESPA. View "Fustolo v. Select Portfolio Servicing, Inc." on Justia Law

Jorge Baez sued BayMark Detoxification Services, Inc., alleging disability discrimination under Massachusetts law, claiming BayMark Detox was his former employer. Baez was repeatedly informed that he had sued the wrong party but did not amend his complaint in time. BayMark Detox moved for summary judgment, asserting it was never Baez's employer. Baez then requested to amend his complaint to name the correct employer, but the district court granted summary judgment to BayMark Detox, denied Baez's Rule 60(b) motion for relief, and ordered Baez to pay costs.Baez initially worked for Community Health Care, Inc. (CHC), which was acquired by BayMark Health Services, Inc. (BHS). During the COVID-19 pandemic, Baez worked from home but was later terminated after an audit revealed billing errors. Baez filed a discrimination complaint against BayMark Detox, which was removed to federal court. BayMark Detox, a separate entity from CHC, stated it never employed Baez. The district court set a deadline for amending pleadings, which Baez missed.The United States District Court for the District of Massachusetts granted summary judgment to BayMark Detox, finding no evidence that BayMark Detox was Baez's employer. The court denied Baez's request to amend his complaint, citing his failure to show good cause for the delay. The court also denied Baez's Rule 60(b) motion, rejecting the argument that Massachusetts procedural rules should apply. The court awarded costs to BayMark Detox.The United States Court of Appeals for the First Circuit affirmed the district court's rulings, agreeing that Baez failed to name the correct employer and did not demonstrate good cause for amending his complaint late. The court also upheld the award of costs to BayMark Detox. View "Baez v. BayMark Detoxification Services, Inc." on Justia Law

Gleysi Idalia Diaz-Valdez, a Guatemalan national, entered the United States in May 2019 and applied for asylum, withholding of removal, and protection under the Convention Against Torture, citing persecution by gang members in Guatemala. An immigration judge (IJ) denied her requests on August 6, 2021. Diaz attempted to appeal the IJ's decision to the Board of Immigration Appeals (BIA) by sending her Notice of Appeal via FedEx's next-day delivery service on September 4, 2021, expecting it to arrive by the September 7 deadline. However, FedEx delivered the package on September 8, resulting in the BIA summarily dismissing her appeal as untimely.Diaz then requested the BIA to accept her late filing, arguing that FedEx's failure to deliver on time warranted equitable tolling of the appeal deadline. The BIA construed her request as a motion to reconsider its summary dismissal but denied the motion, stating that there was insufficient evidence to prove that Diaz had delivered the appeal to FedEx on September 4 and that the federal holiday was not an extraordinary circumstance.The United States Court of Appeals for the First Circuit reviewed the BIA's decision. The court found that the BIA applied the incorrect legal standard by disregarding the representation of Diaz's counsel and failing to consider supporting evidence, such as the FedEx label and tracking information. The court also held that the BIA abused its discretion by not applying its own precedent from Matter of Morales-Morales, which allows for equitable tolling when a guaranteed delivery service fails to fulfill its guarantee.The First Circuit granted Diaz's petition, vacated the BIA's order, and remanded the case for further proceedings consistent with its opinion, instructing the BIA to reevaluate Diaz's diligence and the extraordinary circumstances under the correct legal standards. View "Diaz-Valdez v. Garland" on Justia Law

Local Puerto Rico merchants brought unfair competition claims against major big-box retailers, alleging that during the COVID-19 pandemic, Costco Wholesale Corp. and Wal-Mart Puerto Rico, Inc. violated executive orders limiting sales to essential goods. The plaintiffs claimed that the defendants continued to sell non-essential items, capturing sales that would have otherwise gone to local retailers, and sought damages for lost sales during the 72-day period the orders were in effect.The case was initially filed as a putative class action in Puerto Rico's Court of First Instance. Costco removed the case to federal district court under the Class Action Fairness Act (CAFA). The district court denied Costco's motion to sever the claims against it and also denied the plaintiffs' motion to remand the case to state court. The district court dismissed most of the plaintiffs' claims but allowed the unfair competition claim to proceed. However, it later denied class certification and granted summary judgment for the defendants, concluding that the executive orders did not create an enforceable duty on the part of Costco and Wal-Mart.The United States Court of Appeals for the First Circuit reviewed the case on jurisdictional grounds. The court held that CAFA jurisdiction is not lost when a district court denies class certification. It also held that CAFA's "home state" exception did not apply because Costco, a non-local defendant, was a primary defendant. However, the court found that CAFA's "local controversy" exception applied because the conduct of Wal-Mart Puerto Rico, a local defendant, formed a significant basis for the claims. The court concluded that the district court did not abuse its discretion in denying Costco's motion to sever and determined that the entire case should be remanded to the Puerto Rico courts. The court reversed the district court's denial of the motion to remand, vacated the judgment on the merits for lack of jurisdiction, and instructed the district court to remand the case to the Puerto Rico courts. View "Kress Stores of Puerto Rico, Inc. v. Wal-Mart Puerto Rico, Inc." on Justia Law

In 2020, American Airlines and JetBlue Airways formed the Northeast Alliance (NEA), a joint venture to operate as a single airline for most routes in and out of Boston and New York City. The U.S. Department of Justice (DOJ), along with several states, sued to stop the NEA, claiming it violated the Sherman Act by unreasonably restraining competition. After a bench trial, the district court ruled in favor of the plaintiffs, finding that the NEA reduced competition and output without sufficient procompetitive benefits. American Airlines appealed the decision.The district court found that the NEA caused American and JetBlue to stop competing on overlapping routes, leading to decreased capacity and reduced consumer choices. The court also found that the NEA's schedule coordination and revenue-sharing provisions effectively merged the two airlines' operations in the Northeast, which resembled illegal market allocation. The court rejected the airlines' claims that the NEA increased capacity and provided significant consumer benefits, finding these claims unsupported by reliable evidence.The United States Court of Appeals for the First Circuit reviewed the case. The court affirmed the district court's decision, agreeing that the NEA had substantial anticompetitive effects. The appellate court found no clear error in the district court's factual findings and upheld its application of the rule of reason. The court concluded that the NEA's harms outweighed any procompetitive benefits, which could have been achieved through less restrictive means. The judgment of the district court was affirmed, and the NEA was enjoined from further implementation. View "US v. American Airlines Group Inc." on Justia Law

The National Association of Government Employees, Inc. (NAGE) challenged the constitutionality of the Debt Limit Statute, alleging that it posed an imminent risk to its members, who are federal employees. NAGE claimed that if the debt limit was not raised, its members would face layoffs, furloughs, unpaid work, and loss of pension funding. NAGE sought declaratory and injunctive relief against Treasury Secretary Janet Yellen and President Joseph R. Biden.The United States District Court for the District of Massachusetts dismissed the case for lack of subject matter jurisdiction. The court found that NAGE's claims of past injuries were moot due to the passage of the Fiscal Responsibility Act, which suspended the debt limit until January 1, 2025, and required the Treasury Secretary to make whole the G Fund accounts. The court also determined that NAGE's claims of future harm were too speculative to establish standing, as they relied on a series of unlikely events, including a federal default, which has never occurred.The United States Court of Appeals for the First Circuit affirmed the district court's dismissal. The appellate court agreed that NAGE lacked standing to pursue prospective relief because the anticipated future harms were speculative and not certainly impending. The court also found that NAGE's claims of past injuries were moot, as the Fiscal Responsibility Act had addressed the immediate concerns, and there was no reasonable expectation that the same harm would recur. The court rejected NAGE's arguments that the voluntary-cessation and capable-of-repetition-yet-evading-review exceptions to mootness applied, concluding that the legislative action was independent and not related to the litigation, and that the risk of future harm was not reasonably expected. View "National Association of Government Employees, Inc. v. Yellen" on Justia Law

In 2002, Natale Cosenza was convicted by a Massachusetts state court jury of assault and battery with a dangerous weapon and armed burglary. The prosecution's case heavily relied on the victim, Melissa Horgan, identifying Cosenza from a photo array administered by Worcester police. In 2016, state courts granted Cosenza a new trial, and in 2017, they suppressed the photo array evidence, leading the Commonwealth to drop the charges.Cosenza then filed a federal civil rights lawsuit in 2018 against the City of Worcester, alleging that the City had a policy of not properly training its officers on photo arrays and other investigative techniques, which he claimed violated his constitutional rights. The U.S. District Court for the District of Massachusetts granted summary judgment in favor of the City, finding no evidence of deliberate indifference to Cosenza's constitutional rights.The United States Court of Appeals for the First Circuit reviewed the case. The court found that there was no evidence Worcester had a policy of not training its officers on photo arrays. The court noted that officers received training at a police academy and on-the-job training, and that the law at the time did not clearly establish the procedures Cosenza argued were required. The court also found no evidence that the City had a policy of fabricating or suppressing evidence. Consequently, the First Circuit affirmed the district court's summary judgment in favor of the City of Worcester. View "Cosenza v. City of Worcester, MA" on Justia Law

Boris Bergus and Agustin Florian, both doctors, were colleagues and later co-investors in a company managed by Florian's brother-in-law, Edgardo Jose Antonio Castro Baca. Bergus invested in the company in 2012 and 2014, purchasing stock. Years later, after their relationship deteriorated, Bergus sued Florian, alleging that Florian had omitted material information about the investments, violating the Massachusetts Uniform Securities Act (MUSA). The trial featured testimony from Bergus, Florian, and Baca. The district court precluded Florian from cross-examining Bergus about a 2013 state medical board finding that Bergus had misrepresented his medical credentials. The jury found in favor of Bergus regarding the 2012 investment but not the 2014 investment.The United States District Court for the District of Massachusetts ruled in favor of Bergus for the 2012 investment, awarding him $125,000 plus interest, totaling $202,506.85, and additional attorney's fees and costs, bringing the total judgment to $751,234.86. The court dismissed Florian's counterclaim for abuse of process, suggesting it be litigated in state court.On appeal, the United States Court of Appeals for the First Circuit reviewed several issues, including the district court's limitation on Florian's cross-examination of Bergus. The appellate court found that the district court abused its discretion by precluding cross-examination about Bergus's misrepresentations of his medical credentials, which were probative of his character for truthfulness. The court concluded that this error was not harmless, as the case hinged on the credibility of the witnesses.The First Circuit vacated the judgment regarding the 2012 investment and remanded for a new trial on that issue. The jury's verdict on the 2014 investment remained intact. The appellate court did not address Florian's other arguments due to the need for a new trial. View "Bergus v. Florian" on Justia Law

The Government of Puerto Rico sued several pharmaceutical benefit managers (PBMs) and pharmaceutical manufacturers in the Commonwealth of Puerto Rico Court of First Instance. The Commonwealth alleged that the PBMs, including Express Scripts and Caremark, schemed to unlawfully inflate insulin prices through rebate negotiations and price setting. The PBMs removed the case to federal court under 28 U.S.C. § 1442(a)(1), arguing that they acted under federal authority in negotiating rebates and setting drug prices, and that the lawsuit related to their federal service.The United States District Court for the District of Puerto Rico remanded the case back to the Court of First Instance. The district court found that the Commonwealth's disclaimer, which stated that it was not seeking relief related to any federal program or contract, effectively excluded any claims upon which the PBMs could base removal under § 1442(a)(1). The district court concluded that the PBMs could not claim they acted under federal authority for their non-federal PBM services and that dividing the work done for federal and non-federal clients was possible.The United States Court of Appeals for the First Circuit reversed the district court's decision. The appellate court held that the disclaimer did not prevent removal because Caremark's rebate negotiations for federal and non-federal clients were indivisible. The court found that Caremark acted under federal authority when negotiating rebates for FEHBA plans and possessed a colorable federal defense under FEHBA's express preemption provision. The court concluded that the disclaimer did not eliminate the possibility that the Commonwealth would recover for Caremark's official acts, thus justifying removal under § 1442(a)(1). The case was remanded to the district court with instructions to return it to federal court. View "Government of Puerto Rico v. Express Scripts, Inc." on Justia Law

Four noncitizens from India, who have been lawfully residing in the U.S. for over ten years, filed for permanent residency more than four years ago. Their applications have not been adjudicated, prompting them to sue the Director of USCIS and the Secretary of DOS under the APA for unreasonable delay and unlawful withholding of agency action. They argue that USCIS's policy of not adjudicating applications until a visa is "immediately available" violates 8 U.S.C. § 1255(a).The U.S. District Court for the District of Massachusetts dismissed the claims under Federal Rules of Civil Procedure 12(b)(6) and 12(b)(1). The court found that the plaintiffs' interpretation of § 1255(a) was incorrect and that the agencies' policies were within their discretion. The court ruled that the plaintiffs failed to state a claim for unreasonable delay and unlawful withholding under the APA.The United States Court of Appeals for the First Circuit affirmed the District Court's dismissal. The appellate court held that § 1255(a) sets eligibility criteria for applying for adjustment of status but does not mandate the timing of adjudication. The court found that the 1976 amendment to § 1255(a) did not preclude USCIS from considering visa availability at the time of approval. The court also rejected the plaintiffs' structural arguments based on other statutory provisions, finding no conflict with USCIS's policy. The court concluded that the plaintiffs failed to state a claim under the APA against both USCIS and DOS. View "Patel v. Jaddou" on Justia Law