Contract Law News - U.S. First Circuit
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Sometimes you just need to switch it up, whether you're getting a new pair of sneaks or ending a 28 year long business arrangement. In 2013, Nike, the massive shoe and apparel company, decided it was time to make a change when its retailers severed the relationship with Carter's of New Bedford, a tiny, family-owned Massachusetts retailer. Carter's wasn't about to let Nike get away, however.

Carter's, alleging that Nike was turning its back on small businesses, sued the shoe company for breach of contract in Massachusetts court. Unfortunately for Carter's, Nike removed the case to federal court and had it dismissed. The issue? Nike's invoices contained a forum selection clause, limiting contract disputes to courts in Oregon, Nike's home state.

As New England begins to crawl out of one of its worst winters on record, it's easy to forget that Yanks' circuit court includes the tropical climes of Puerto Rico. But it does, given the First Circuit occasion to rule on a lawyer-on-lawyer fee dispute arising from the Estado Libre Asociado.

The dispute arose following successful representation in a personal injury case and ended in a (metaphorical) court room brawl between lawyers, as the esquires battled not only over their fee sharing agreement, but even over who actually represented the client.

Company Can't Assert Arbitration Clause After Filing Lawsuit

When Joca-Roca Real Estate and Robert Brennan entered into a contract back in 2005, the contract contained an arbitration clause. No biggie: Arbitration clauses are everywhere, especially now that we know they trump state contract law in some important ways.

But what else do they trump? Do they trump the common law doctrine of waiver? No, they don't, said the First Circuit Court of Appeal in a case decided Monday.

Debt Collection Letter Too Confusing for Unsophisticated Consumer

Last month, we wondered whether lawyers should get involved in the debt collection business. It's fraught with regulations, and this case from the First Circuit demonstrates what can happen to a law firm that doesn't follow those regulations.

Robbie Pollard had a debt of about $612. The Law Office of Mandy L. Spaulding sent Pollard a letter saying that it was collecting on the debt and that, you know what, she was just going to sue her to get this all over with. Efficient? Yes. Legal? No. The Fair Debt Collection Practices Act (FDCPA) doesn't allow for this. Spaulding claimed that the law didn't contradict the collection notice, which contained some teeny-tiny print advising Pollard of her rights under the FDCPA.

Class Action for Cable-TV Outage During Storm Can Proceed

Residents of Massachusetts might remember that in October 2011, a surprise "nor'easter" swept across New England, downing power lines, closing roads, and -- most importantly -- depriving cable customers of "Sopranos" reruns. A scant month later, four plaintiffs filed a suit in state court against Charter Communications, their cable company, because their cable service was down for nine days.

Charter removed the case to federal court under the Class Action Fairness Act, then moved to dismiss on the grounds that the plaintiffs' case was moot, as they had already received a credit on their bill for the time the service was down. The district court granted Charter's motion to dismiss.

Last week, in Cooper v. Charter Communications, the First Circuit Court of Appeals affirmed class certification, but reversed the district court's motion to dismiss.

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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!