Contract Law News - U.S. First Circuit
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When it rains, it pours. The First Circuit is not usually a very busy circuit to report on, but it happens to have a lot going on right now. Rather than focusing on once case, we thought we'd give you the scoop on the biggest headlines in the First Circuit.

Sex Changes Hearing En Banc

Just a month ago we reported that the First Circuit affirmed a district court's ruling that an inmate's gender reassignment surgery is medically necessary. Now, the court has granted a motion for rehearing en banc with the full panel of the First Circuit, and a new hearing is scheduled for May 8, 2014, reports The Boston Globe.

Massachusetts Settles Massey Mine Explosion Lawsuit for $264M

On Monday, Massachusetts Treasurer Steven Grossman announced a $265 million deal with Alpha Appalachia Holdings Inc. The deal settles allegations that the coal miner misled investors, including the state's pension fund, by misrepresenting its safety record ahead of a deadly 2010 Massey Energy mine explosion that killed 29 people.

The settlement is good news for investors and state taxpayers alike.

Judge Halts Sale of Boston Globe to Red Sox Owner

A Massachusetts judge has temporarily blocked the sale of The Boston Globe and The Worcester Telegram & Gazette to Boston Red Sox owner John W. Henry.

Henry inked a deal for the papers with The New York Times Company for an estimated $70 million but Judge Shannon Frison of Superior Court in Worcester halted the sale, citing a potential complication with a pending class action lawsuit involving the Worcester newspaper and its delivery workers.

Newspaper legal drama reported by the newspaper parties -- très meta!

Zipcar Late Fees Are OK Under Massachusetts Law, Says 1st Circuit

A Zipcar customer lost her late-fee lawsuit against the car-sharing company. Again.

The First Circuit Court of Appeals affirmed U.S. District Judge Nathaniel M. Gorton’s decision that Naomi Reed could not assert a claim that Zipcar’s automatic late-fee charge constituted an unlawful penalty under Massachusetts law.

Former U.S. Supreme Court Justice David Souter penned the opinion.

In a case that should remind us all of our loan obligations, the First Circuit affirmed that if you fail to pay your loans, despite your financial circumstances, the default is on you.

FDIC v. Estrada-Rivera had the Court sizing up a claim that a bank later taken over by the FDIC was somehow complicit in destroying a third party deal that left the appellants with no money to pay their loans.

¡Qué escándalo!

1st Circuit OK's Denial of Rent Increases for Section 8

The years of automatic rent payment increases may be over for landlords. With the last housing market collapse, landlords may be denied their annual rental payment increases for their Section 8 housing units. Even though their contract with MHA may state they will get these increases automatically every year, the contract may have a limitation clause within it that allows MHA to deny increases should it lead to a windfall for landlords.

This week, the U.S. Court of Appeals for the First Circuit has affirmed that MHA properly denied landlords their "otherwise-automatic" annual payment increases. It's all written in their housing assistance payment contracts with the landlord plaintiffs.

Overloaded with complicated legal concepts and boring litigation fact patterns? This opinion, penned by Judge Thompson, reads like a Hardy Boys mystery novel, including the pun-ny heading, "Misplaced Trust." It looks like Selya isn't the only talented author in the First Circuit.

Lillian Smillie penned a will in 1986 that bequeathed her entire estate, minus a few odds and expenses, to the Smillie Trust, which benefited her blind nephew Thaddeus. Thaddeus' brother, Dr. Frederick Jakobiec was named as trustee.

What is the Appropriate Standard for Class Action Attorney Fees?

Contingency fees versus hourly fees— which is the appropriate standard in a class action lawsuit?

Last Friday, the First Circuit Court of Appeals overturned a class action attorneys’ fees award in a lawsuit against Volkswagen and Audi, reports Thomson Reuters News & Insight.

Banks Can Be on the Hook for Fraudulent Transactions

What’s the extent of a bank’s liability when a customer’s account has been hacked?

A district court in Maine held that Ocean Bank wasn’t liable for a hacked account, but the First Circuit Court of Appeals remanded the case, finding that the bank could potentially be liable.

Return of the Winklevii

What will it take for the dynamic duo of Tyler and Cameron Winklevoss to curl up with their $65 million Facebook settlement and leave the judicial system alone? More than an admonishment from Ninth Circuit Chief Judge Alex Kozinski that the time for the litigation to end "has now been reached."

The Winklevii are at it again, this time challenging Facebook in the United States District Court in Boston. Their claim? Facebook "intentionally or inadvertently suppressed evidence" during settlement talks, including communications from the time of Facebook's founding. The outcome? Denied. Again.