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

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Debtor had unsecured liabilities of almost $15,000 and anticipated disposable income of about $100 per month. He visited an attorney, who indicated that he would not file a Chapter 7 proceeding until the debtor paid the anticipated legal fee ($2,300). If debtor chose the Chapter 13 alternative, he could pay over time as part of the Chapter 13 plan. The attorney estimated that fees associated with a Chapter 13 proceeding would total $4,100. Not having fees for a Chapter 7 filing, the debtor opted for Chapter 13 and paid $500 on account. The attorney submitted a “fee only” Chapter 13 plan that called for payment of $100 per month for 36 months to the bankruptcy estate. Of the total $3,600, only about $300 would be available to general creditors. The bankruptcy court rejected the plan as not submitted in good faith. The debtor opted to convert to Chapter 7; the attorney moved for an award of $2,872. The bankruptcy court awarded $299, which required him to disgorge more than $200. The district court affirmed. Noting a division in the circuits, the First Circuit reversed, holding that fee-only plans are not per se in bad faith. View "Berliner v. Pappalardo" on Justia Law

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Debtors engaged the attorney to represent them in bankruptcy proceedings. They owed more than $115,000 in unsecured debt with no realistic prospect of payment. In a retainer agreement, he estimated that legal fees plus court costs would total around $4,000. Debtors paid $3,684 on account. Their Chapter 13 plan, 11 U.S.C. 1321-1322, was approved by the bankruptcy court and the lawyer filed an application requesting an additional $8,173.36 in attorneys' fees and expenses. The trustee objected. The bankruptcy court set the total fee and expense figure at $3,684, finding that the case was relatively uncomplicated. The district court and First Circuit affirmed, agreeing that the attorney billed an excessive number of hours. View "Sullivan v. Pappalardo" on Justia Law

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On Monday afternoon, a sentencing hearing scheduled for Wednesday afternoon was rescheduled to Wednesday morning. The court sent electronic notice; prior notices and filings had been electronic. The attorney failed to appear and, on the same day, the court imposed a fine of $1,500. The First Circuit reduced the fine to $500, noting that the attorney was unwise in his criticism of the lower court when he requested reconsideration and rejecting the attorney's characterization of the fine as criminal contempt. The court noted that it would be better policy to hear from the attorney before imposing the sanction. View "United States v. Romero-Lopez" on Justia Law

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A federal grand jury issued a subpoena to a law office, commanding production of documents relating to a real estate transaction. The attorney obtained the client's consent and complied. The client changed his mind, notified USAO that the documents were privileged, and moved to quash the subpoena.The district court found that the documents were not privileged. The First Circuit affirmed. The district court acted within its discretion in conducting an in camera review; the client's generalized assertion of privilege did not establish that privilege attached to any particular document. The documents would have been disclosed at closing and the attorney essentially acted as a scrivener and disburser of funds. The request for production did not implicate the privilege against self-incriminating testimony. View "In re Grand Jury Subpoena (Mr. S.)" on Justia Law

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The former (2001-2006) Assistant Secretary of State for Protocol Affairs at the Puerto Rico State Department sued the Secretary of State under 42 U.S.C. 1983, alleging that the official fired him due to his political affiliation. The district court dismissed, holding that plaintiff could be terminated without cause because he held a trust position for which party affiliation was an appropriate qualification, and fined plaintiff's attorneys $1000 each, concluding that the pleadings and responses that they submitted violated Federal Rule of Civil Procedure 11(b). The First Circuit affirmed; plaintiff's position was not federally protected against political discrimination. The pleadings at issue consisted, in large part, of speculation and conclusory allegations lacking evidentiary support.

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In a suit under the Copyright Act, 17 U.S.C. 106, described by the court as the equivalent of hand-to-hand combat, the plaintiff settled with some defendants for $30,000. After trial plaintiff obtained injunctive relief and statutory damages in the amount of $40,000 against others, offset by the $30,000 settlement. The court awarded $98,745 in attorney fees; a motion for costs, initially denied, remained pending. The First Circuit affirmed, first noting that the district court had cured a jurisdictional defect by awarding $3,413.05 in costs. The district court correctly applied the lodestar method. Although the fees exceed the award, the violation was willful and the injunctive relief may be worth more that the award of damages. While a rejected Rule 68 offer, not improved upon at trial, obligates the plaintiff to pay the defense costs incurred subsequent to the rejection the offer plaintiff made before trial was not a Rule 68 offer.