First Circuit

Lenders often require borrowers to keep money in a mortgage escrow account, and those funds are used to pay taxes, mortgage insurance, and other costs throughout the year.  At least 12 states require lenders to pay the borrower interest on the money held in these escrow accounts.  And for more than a decade, certain national banks have challenged the applicability of those state laws to them, arguing the laws are preempted by the National Bank Act because they would significantly interfere with the exercise of a federally granted banking power.[1]  

These cases have resulted in a trip to the Supreme Court.  In Cantero v. Bank of America, the Supreme Court explained that the test for preemption under the National Bank Act requires courts to “make a practical assessment of the nature and degree of the interference caused by a state law,” and courts should do so by engaging in a “nuanced comparative analysis” that compares the interference caused by previous state laws that were challenged as preempted before the Supreme Court to the law at issue.[2]  602 U.S. 205, 219–21 (2024). Continue Reading Post-Cantero, First Circuit Sets Demanding National Bank Act Preemption Test

The enforceability of an arbitration clause is often a hotly disputed issue in class action lawsuits. But may a party who is not a signatory to a contract invoke its arbitration provisions to compel the arbitration of claims brought by a party who is? The First Circuit recently held that a defendant was unable to meet the high burden to enforce an arbitration agreement based on a contract that it is not a party to in Morales-Posada v. Cultural Care, Inc., 2025 WL 1703513 (1st Cir. June 18, 2025).Continue Reading Non-signatory Defendant Unable to Meet High Burden for Compelling Arbitration

The First Circuit recently held as a matter of first impression that denial of class certification does not strip a federal court of jurisdiction under the Class Action Fairness Act (“CAFA”), consistent with earlier decisions from the Second, Third and Seventh Circuits.  The opinion also addressed two exceptions to CAFA—the “home state” and “local controversy” exceptions—ultimately finding that the latter did defeat CAFA jurisdiction in the case before it and required remand to state court.  See Kress Stores of Puerto Rico, Inc. v. Wal-Mart Puerto Rico, Inc., — F.4th —-, 2024 WL 4750774 (1st Cir. Nov. 12, 2024).Continue Reading First Circuit Agrees with Other Circuits that CAFA Jurisdiction Survives Class Certification Denial

Whether a class representative has actually been injured can determine the suitability of class certification, as a class with an uninjured representative will not be certified.  But as illustrated by the First Circuit in Nightingale v. National Grid USA Service Company, — F.4th —-, 2024 WL 3337766 (1st Cir. July 9, 2024), when class certification is denied based on an erroneous interpretation of a class representative’s injury, that denial will not stand.Continue Reading First Circuit Reverses Denial of Class Certification Based on Erroneous Injury Ruling

Over the last several years, food and drug manufacturers have litigated countless class action lawsuits claiming that their products are misleadingly advertised.  Many of these lawsuits claim that a product’s packaging is misleading because it allegedly violates FDA labeling rules.  Last week, in DiCroce v. McNeil Nutritionals, LLC, — F.4th —, No. 22-1910, 2023 WL 6056144 (1st Cir. Sept. 18, 2023), the First Circuit found that these claims are impliedly preempted by the Federal Food, Drug, and Cosmetic Act (“FDCA”). Continue Reading First Circuit Finds “Fraud on the FDA” Claims Preempted by the FDCA

Recent decisions from the First and Ninth Circuits may help defendants facing false advertising challenges to certain types of labeling statements known as “structure/function claims.”  Three courts have held that such challenges were preempted by the Food, Drug, and Cosmetic Act (FDCA).Continue Reading Trio of Cases Supports Preemption Arguments for False Advertising Suits Challenging “Structure/Function Claims”

The First Circuit recently vacated and remanded a district court’s approval of a proposed class action settlement “because the absence of separate settlement counsel for distinct groups of class members makes it too difficult to determine whether the settlement treated class members equitably.” Murray v. Grocery Deliver E-Servs. USA Inc.…

Continue Reading First Circuit Holds that Class Action Settlements Require Separate Counsel for Class Members with Significantly Different Claims

The First Circuit recently revived consumer deception claims challenging the safety and testing of a car booster seat manufactured by Evenflo, in a case that potentially makes it easier for class-action plaintiffs to satisfy Article III’s standing requirements in the First Circuit when they only allege an economic injury. Continue Reading First Circuit Holds Alleged Overpayment Enough for Article III Standing

If a tree falls in the forest but no one is around to hear it, did it make a sound?  Philosophers disagree.  If a product contains a contaminant but no one gets sick, did it cause an injury?  Judges disagree.

In the 2000s, enterprising plaintiffs’ attorneys attempted to push the boundaries of existing tort law by arguing that plaintiffs are entitled to damages for defects even when they cause no physical injury.  These so-called “no-injury” theories of liability were largely rejected by courts.  E.g., Rivera v. Wyeth-Ayerst Lab’ys, 283 F.3d 315, 320–21 (5th Cir. 2002) (dismissing “no-injury products liability law suit”); Johnson v. Bankers Life & Cas. Co., 2014 WL 4494284, at *7 (W.D. Wis. Sept. 12, 2014) (recognizing that in the “consumer product context, courts routinely find lack of standing where—while a product may have been defective in the hands of others—the individual plaintiffs did not suffer the defect and, therefore, suffered no injury”).

While these cases closed the door on “no-injury” product liability claims, they left open the possibility of other “no-injury” claims, such as claims that a manufacturing defect breached a warranty or constituted fraud.  E.g., Cole v. Gen. Motors Corp., 484 F.3d 717, 723 (5th Cir. 2007) (“Notably in this case, plaintiffs may bring claims under a contract theory based on the express and implied warranties they allege.”).

Whether and when “no-injury” claims are viable is a hotly debated question.  As more fully discussed below, courts disagree on whether a plaintiff who has purchased a contaminated or defective product—but who has successfully used the product for its intended purpose while suffering no physical injury—can maintain a claim.Continue Reading A Closer Look: Does Purchasing a Defective or Contaminated Product Always Cause an Article III Injury?

Although plaintiffs often assume that breach-of-contract claims arising out of form agreements are readily susceptible to class certification, two recent appellate decisions cast doubt on that thinking. The First Circuit affirmed denial of class certification of claims arising from an annuity certificate, agreeing with the district court that common issues…

Continue Reading Certification of Class Claims Based on Form Contracts No Longer Guaranteed