762 F.3d 138
1st Cir.2014Background
- MAZ Partners, LP and Peter Blakeslee filed stockholder class actions challenging a PHC, Inc.–Acadia merger.
- Plaintiffs alleged breaches of fiduciary duty, aiding and abetting, and disclosure violations related to the merger.
- The merger provided PHC stockholders with 0.25 Acadia shares per PHC share, plus a $5 million cash premium to PHC Class B stockholders (led by Bruce Shear).
- The district court granted partial dismissal and contemplated summary judgment, with discovery largely not conducted.
- Plaintiffs timely invoked Rule 56(d) after defendants moved for summary judgment, attaching a detailed affidavit outlining needed discovery.
- The district court granted summary judgment without addressing the Rule 56(d) motion, prompting an appeal that led to remand for further discovery considerations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court abused discretion by denying Rule 56(d) relief before ruling on summary judgment. | Plaintiffs, via Rule 56(d) affidavit, showed need for discovery to oppose summary judgment. | Defendants contend the Rule 56(d) affidavit was insufficient to warrant further discovery. | Yes, abuse; remand for discovery permitted. |
| Whether Rule 56(d) requirements were satisfied and discovery should have been ordered. | Affidavit satisfied authoritativeness, timeliness, and showed good cause and materiality. | Record insufficient to justify delay; discovery unnecessary. | Rule 56(d) requirements satisfied; discovery should have been allowed. |
| Whether the district court’s premature summary judgment prevented plaintiffs from obtaining essential facts. | Incomplete discovery impeded opposition to summary judgment. | Record lacked imminent triable issues; summary judgment appropriate. | Remand necessary to permit discovery and proper adjudication. |
Key Cases Cited
- Resolution Trust Corp. v. N. Bridge Assocs., Inc., 22 F.3d 1198 (1st Cir. 1994) (construe Rule 56(d) motions generously; safety valve for discovery needs)
- Reid v. New Hampshire, 56 F.3d 332 (1st Cir. 1995) (protects a party needing more time to respond to summary judgment)
- Carmona v. Toledo, 215 F.3d 124 (1st Cir. 2000) (discovery delays can defeat premature summary judgment)
- Rivera-Almodóvar v. Instituto Socioeconómico Comunitario, Inc., 730 F.3d 23 (1st Cir. 2013) (Rule 56(d) abuse of discretion standard)
- Mir-Yépez v. Banco Popular de P.R., 560 F.3d 14 (1st Cir. 2009) (good cause and timely affidavits for discovery)
- CenTra, Inc. v. Estrin, 538 F.3d 402 (6th Cir. 2008) (incomplete discovery may warrant denial of summary judgment)
- Nestor Colón Medina & Sucesores, Inc. v. Custodio, 964 F.2d 32 (1st Cir. 1992) (vacating summary judgment where discovery may affect issues)