MAZ PARTNERS LP, on behalf of itself and all others similarly situated; PETER BLAKESLEE, individually and on behalf of all others situated, Plaintiffs, Appellants, v. PHC, INC.; BRUCE A. SHEAR; DONALD E. ROBAR; DOUGLAS J. SMITH; HOWARD W. PHILLIPS; WILLIAM F. GRIECO; DAVID E. DANGERFIELD; ACADIA HEALTHCARE COMPANY, INC.; and ACADIA MERGER SUB, LLC, Defendants, Appellees.
No. 13-2273
United States Court of Appeals, First Circuit.
Aug. 6, 2014.
762 F.3d 138
Before THOMPSON and SELYA, Circuit Judges, and McCONNELL, Jr.,* District Judge.
* Of the District of Rhode Island, sitting by designation.
attempted battery or a threatened one. See 432 Mass. at 247, 733 N.E.2d 106 (cited in Gorassi, 432 Mass. at 247, 733 N.E.2d 106). Gorassi also relied on the SJC‘s earlier opinion in Commonwealth v. Delgado, 367 Mass. 432, 437, 326 N.E.2d 716 (1975), in which the SJC explicitly endorsed the definition of assault found in the Restatement (Second) of Torts: “[w]ords do not make the actor liable for assault unless together with other acts or circumstances they put the other in reasonable apprehension of an imminent harmful or offensive contact with his person.” 367 Mass. at 437 n. 3, 326 N.E.2d 716 (emphasis added). And even more recently, the SJC again confirmed that a threat of slight touching, if merely offensive, is sufficient to establish a threatened battery, and thus an assault. See Commonwealth v. Porro, 458 Mass. 526, 529-31, 939 N.E.2d 1157 (2010). At the time when Martinez was convicted, only one Massachusetts case, Gorassi, ran against this tide.
In short, although the SJC has occasionally suggested in dictum that the offense of assault might require a threat or attempt to cause physical harm, rather than mere offensive touching, it has never repudiated either the principle that assault is attempted or threatened battery or the principle that battery does not require violent force. In the face of such ambiguity, we are constrained to conclude that the Massachusetts assault statute criminalizes all that the SJC has said it criminalizes, including mere touching if offensive. We therefore conclude that the Massachusetts assault statute does not constitute a crime of violence under section 4B1.2 of the Sentencing Guidelines, and consequently, that the district court improperly calculated Martinez‘s base offense level.
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In ruling that the government has not shown that Martinez was previously convicted of a crime of violence as defined in the Guidelines, we are aware that a full exploration of the facts underlying Martinez‘s prior convictions might well reveal that his conduct has truly been violent by any measure. But as to each offense, the government asks us to resolve serious, lingering doubts in its favor and against the defendant, by relying on hunches as to what we think Martinez actually did. The Supreme Court, wary of such forays beyond the narrow scope of defining the elements of an offense, has demanded substantially more certainty in the application of the categorical approach than the government‘s analysis can afford. See, e.g., Taylor v. United States, 495 U.S. 575, 599-600, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990). For that reason, and for others here identified, we observe quite simply that where state law and the Shepard documents leave open a plausible and realistic possibility that the defendant‘s prior conviction was for an offense whose elements do not meet the applicable definition of recidivist conduct, we cannot simply presume that the actual conduct qualified.
III. Conclusion
For the foregoing reasons, we affirm Martinez‘s conviction, vacate the district court‘s order sentencing him, and remand for further proceedings consistent with this opinion. So ordered.
In re PHC, INC. SHAREHOLDER LITIGATION
James H. Hulme, with whom Matthew Wright, Arent Fox LLP, Richard M. Zielinski, Leonard H. Freiman and Goulston & Storrs were on brief, for PHC Director defendants/appellees.
This stockholders’ class action suit challenging the fairness of a corporate merger raises the issue of whether the district court precipitately granted summary judgment in light of plaintiffs’ Rule 56(d) Affidavit outlining the discovery they needed to respond to the dispositive motion. After a thorough and careful review of the entire record, we find that plaintiffs should have been afforded the opportunity to conduct additional discovery, and, therefore, remand this matter for further proceedings below.
BACKGROUND
Plaintiffs MAZ Partners, LP (“MAZ“) and Peter Blakeslee were holders of Class A common stock of PHC, Inc. (“PHC“). They filed separate but similar class action suits in Massachusetts, alleging that an announced merger between PHC and Acadia Healthcare Company, Inc. (“Acadia“) was the result of an unfair process that provided them with too little compensation. Plaintiffs sued PHC, Acadia, and Acadia Merger Sub, LLC (“Merger Sub“), an entity created to facilitate the merger, as well as PHC‘s chairman, several directors, and a board member (collectively, the “Individual Defendants“). MAZ filed in state court, while Mr. Blakeslee filed in federal court. Plaintiffs’ claims included breaches of fiduciary duty, aiding and abetting those breaches, and a disclosure violation.
Plaintiffs claim that defendants breached their fiduciary duty to Class A stockholders because the announced merger between PHC and Acadia gave them only one quarter of one share of Acadia common stock for each share of PHC stock they owned. In contrast, in addition to the one quarter of one share of Acadia common stock, a $5 million cash payment was made to the holders of PHC Class B common stock, 93.2% of which was owned by defendant Bruce A. Shear, PHC‘s president, chief executive officer, and chairman. Mr. Shear negotiated the merger‘s terms.
In the MAZ case, a Massachusetts Superior Court judge entered a discovery order allowing discovery in connection with MAZ‘s filing of a preliminary injunction motion to stop the merger. Defendants then removed the case to federal court. The parties reached an agreement: plaintiffs would not seek remand and defendants would provide expedited discovery. MAZ alleges that defendants only produced limited and redacted materials. After the 30-day period for remand expired, defendants filed a motion to stay discovery. Although the court ultimately denied the stay of discovery, defendants produced only a handful of documents and no depositions were taken.
Plaintiffs filed amended complaints and all defendants moved to dismiss those complaints under
The district court granted in part and denied in part the motions to dismiss. In re PHC, Inc. S‘holder Litig., Civ. A. No. 11-11049-GAO, 2012 WL 1195995, at *4 (D.Mass. Mar. 30, 2012). The claims against PHC, the corporation itself, were dismissed, as was the disclosure claim. Id. at *3-4. Plaintiffs’ remaining claims—breach of fiduciary duty against the Individual Defendants, and aiding and abetting against Acadia and Merger Sub—all survived. Id. at *2, *4.
Remaining defendants again sought to dismiss the complaints, this time by filing a motion for judgment on the pleadings under
A month after the denial of their
The district court granted summary judgment without addressing the lack of discovery or the Rule 56 Affidavit. Instead, the district court concluded that the case “could be framed as a lack of standing or as the absence of proof of an essential element of the claims. In either event, the fact that the plaintiffs are unable to demonstrate that they have suffered an actual injury is fatal to their claims.” In re PHC, Inc. S‘holder Litig., Civ. A. No. 11-11049, 2013 WL 5441745, at *2 (D.Mass. Sept. 30, 2013). Judgment entered in favor of defendants.
Plaintiffs appealed, asserting various substantive errors in the district court‘s ruling and arguing that the district court abused its discretion by effectively denying their invocation of
STANDARD OF REVIEW
Ordinarily, a review by this court of the grant of summary judgment is de novo. Morelli v. Webster, 552 F.3d 12, 18 (1st Cir.2009). However, because we ultimately conclude that the district court erred in not affording appropriate consideration to the Rule 56 Affidavit, our review is for
DISCUSSION
The district court‘s summary judgment decision addressed neither plaintiffs’ invocation of
Although our review of the decision below as it relates to
Under
”
In order to gain the benefit of
There is no question that plaintiffs have satisfied the first two requirements, “authoritativeness” and “timeliness.” Plaintiffs promptly invoked
Turning to the third requirement, the Rule 56 Affidavit should show “good cause for [plaintiffs‘] inability to have discovered or marshalled the necessary facts earlier in the proceedings.” Mir-Yépez v. Banco Popular de P.R., 560 F.3d 14, 16 (1st Cir.2009) (quoting Rivera-Torres v. Rey-Hernández, 502 F.3d 7, 10 (1st Cir.2007)). A review of the litigation below establishes that discovery had barely begun before the court entered summary judgment. “Typically, when the parties have no opportunity for discovery, denying the Rule 56(f) motion and ruling on a summary judgment motion is likely to be an abuse of discretion.” CenTra, Inc. v. Estrin, 538 F.3d 402, 420 (6th Cir. 2008). The Rule 56 Affidavit establishes plaintiffs’ persistence in their pursuit of discovery at an early stage of the litigation. On multiple occasions, the parties reached agreement on discovery schedules but defendants did not comply; instead, they sought to stay discovery and filed numerous motions. We are mindful that a party seeking “discovery expeditiously is not obligated to take heroic measures to enforce his rights against a recalcitrant opponent.” Carmona v. Toledo, 215 F.3d 124, 135 (1st Cir.2000) (citation omitted) (internal quotation marks omitted). Although defendants Acadia and Merger Sub represented that they had gathered over 140,000 responsive pages that they would produce, and PHC and the Individual Defendants had additional documents, plaintiffs received only about 170 pages. The parties took no depositions. Much of the information sought was within defendants’ control, “a factor which weighs heavily in favor of relief under Rule 56(f).” Reid, 56 F.3d at 342.
To fulfill the fourth requirement, that of “utility,” plaintiffs’ proffer must show “a plausible basis for believing that additional facts probably exist and can be retrieved within a reasonable time.” Rivera-Torres, 502 F.3d at 10. In the Rule 56 Affidavit, plaintiffs point to defendants’ admissions as proof of readily available additional facts. For example, the Individual Defendants’ initial disclosures enumerate several persons and entities likely to have relevant information regarding negotiations and diligence related to the merger at issue, including the valuation of Acadia. Those disclosures also identify documents, emails, and electronically stored information at PHC‘s corporate headquarters and on PHC‘s servers regarding diligence and financial analyses related to the merger. Acadia and Merger Sub‘s initial disclosures identify several individuals involved with negotiating and preparing the merger agreement. They also specify email communications related to the merger at issue, as well as due diligence documents related to another Acadia merger. The Rule 56 Affidavit also describes several categories about which the identified witnesses are likely to have information, such as the merger ratio, the valuations of PHC and Acadia, and the $5 million premium paid to the holders of Class B PHC common stock.
Finally, to accomplish the fifth requirement of “materiality,” the Rule 56 Affidavit “should indicate how the emergent facts, if adduced, will influence the outcome of the pending summary judgment motion.” Resolution Trust Corp., 22 F.3d at 1203. Because “[e]valuating the potential significance of unknown facts in regard to unadjudicated issues is something of a metaphysical exercise.... [T]he threshold of materiality at this stage of a case is necessarily low.” Id. at 1207.
In the Rule 56 Affidavit, plaintiffs articulate how the discovery sought pertains to material factual disputes, such as the Individual Defendants’ fiduciary duties, potential conflicts of interest of financial advisors, the relationships among the Individual Defendants, and the existence of other merger opportunities. The lack of discovery on these issues was acknowledged by the district court when it stated that “there are no facts” to support the plaintiffs’ claim for breach of fiduciary duty. In re PHC, Inc. S‘holder Litig., 2013 WL 5441745, at *1.
Plaintiffs timely sought discovery from defendants relevant to the issues presented in the motion for summary judgment. Despite plaintiffs’ perseverant efforts, minimal discovery in the conventional sense took place. Plaintiffs survived several dispositive legal motions only to be faulted by a summary judgment motion for lacking evidence. Under these circumstances, the district court‘s disregard of plaintiffs’ detailed, plausible, and comprehensive Rule 56 Affidavit was plainly wrong and an abuse of discretion. See Reid, 56 F.3d at 341-42 (finding that the district court granted summary judgment prematurely where plaintiff made timely motion supported by affidavit describing requested discovery); Resolution Trust Corp., 22 F.3d at 1203-09 (district court abused its discretion by granting summary judgment when discovery was incomplete); Nestor Colón Medina & Sucesores, Inc. v. Custodio, 964 F.2d 32, 39 (1st Cir.1992) (vacating portion of summary judgment where “plaintiffs set forth enough to indicate that they may conceivably be able to make out a triable issue” (emphasis in original) (citation omitted)).
CONCLUSION
Accordingly, we hereby vacate the judgment of the district court and remand this matter for further proceedings consistent with this opinion.3 Costs shall be taxed in favor of the plaintiffs.