Defamation Per Se, Implied Compensation, and Limits on Federal Anti‑Suit Injunctions: Commentary on Orkin v. Albert (1st Cir. 2025)

Defamation Per Se, Implied Compensation, and Limits on Federal Anti‑Suit Injunctions:
Commentary on Orkin v. Albert, 1st Cir. Dec. 11, 2025

I. Introduction

Orkin v. Albert is a dense and important First Circuit decision arising from an informal family business arrangement gone badly wrong. At its core is a dispute between siblings:

  • Wayne Orkin – the sibling who actually ran the business operations and generated the revenues.
  • Lisa Sue Albert – the sibling who incorporated the company, appeared on corporate filings, and controlled the bank account.

The business vehicle was Boost Web SEO, Inc. (“Boost Web”), a Florida corporation created largely as a shell through which Wayne could channel residual income from CardConnect, a credit‑card processing company. The parties never finished corporate formalities: no stock was issued, no shareholders formally identified, and no clear written agreement existed on ownership, compensation, or profit‑sharing. Yet, for years, Wayne used the entity to generate substantial monthly residuals ($35,000–$50,000 by 2021), while routinely paying both business and personal expenses from its account with Albert’s knowledge and acquiescence.

When the relationship collapsed in 2021, disputes arose over:

  • Whether Albert defamed Wayne by emailing CardConnect that they were “experiencing fraudulent activities with a Wayne Orkin” and that this was a “civil and criminal matter.”
  • Whether Wayne’s use of corporate funds and his redirection of CardConnect residuals to a third‑party entity (MKY) amounted to conversion of Boost Web’s property under Florida law.
  • Whether Wayne’s efforts to block CardConnect’s compliance with the federal court’s orders, and his parallel Florida state court action about Boost Web’s ownership, justified:
    • a civil contempt finding and monetary sanctions; and
    • a federal injunction barring him from proceeding in Florida under the Anti‑Injunction Act’s relitigation exception, 28 U.S.C. § 2283.

The First Circuit opinion, authored by Judge Kayatta, does far more than decide these discrete issues. It clarifies key points in:

  • Massachusetts defamation law (especially defamation per se and reputational harm),
  • Florida conversion law and implied‑in‑fact compensation contracts in closely held corporations,
  • Ohio contract law on ambiguous assignments and the use of party conduct to fill gaps, and
  • The Anti‑Injunction Act’s relitigation exception and civil contempt standards in the First Circuit.

At the same time, the court sharply criticizes both sides’ failure to structure their business relationship and signals that the real issue that must eventually be resolved is: who owns Boost Web?

II. Summary of the Opinion

The First Circuit consolidated three appeals and held as follows:

  1. Defamation (Massachusetts law)
    • The district court erred in holding that Albert’s email was not defamatory and not actionable without proof of economic loss.
    • The court holds that the email unambiguously imputes criminal fraud to Wayne and thus:
      • satisfies the “defamatory meaning” element because it could damage his reputation; and
      • constitutes defamation per se, actionable without proof of economic damages.
    • The case is remanded for fact‑finding on:
      • whether the imputation of criminal fraud was substantially true, and
      • if false, whether Albert was at fault and what non‑economic damages Wayne suffered.
  2. Conversion (Florida law, internal affairs of Boost Web)
    • Residuals redirected to MKY ($234,941.60):
      • Affirmed: Wayne converted
      • The court upholds that Boost Web owned the residuals, based on a 2014 Consent to Assignment Agreement (interpreted under Ohio law) and the parties’ long‑standing course of dealing.
    • Personal expenditures ($403,827.91) in 2020–2021:
      • The district court did not clearly err in finding Wayne spent this amount on non‑Boost‑Web expenses and could not document business purposes.
      • However, the district court clearly erred in concluding Wayne had zero authority to use any corporate funds for personal expenses.
      • Based on years of consistent practice, W‑2 reporting, tax returns, and Albert’s acquiescence, the First Circuit holds that Florida law recognizes an implied‑in‑fact contract entitling Wayne to some reasonable compensation out of Boost Web’s funds.
      • Result: the conversion award as to the entire $403,827.91 is vacated. On remand, the district court must determine:
        • what would have been a reasonable level of compensation for Wayne’s services; and
        • whether any excess above that amount was a wrongful conversion (or was instead a contract‑type overpayment claim).
  3. Civil contempt
    • Wayne, through counsel, repeatedly urged CardConnect not to follow the district court’s orders to transfer residuals to Boost Web, while those orders were in effect.
    • The district court held him in civil contempt and imposed $20,000 in sanctions.
    • The First Circuit agrees that some of Wayne’s conduct fell within the ambit of clear orders but notes that:
      • the district court also grounded its contempt finding on Wayne’s filing of the Florida ownership action and on communications premised on an issue (ownership) the court had not clearly decided.
    • Because contempt must rest on violation of a clear and unambiguous order, and part of the conduct at issue did not clearly violate prior orders, the contempt order is vacated and remanded for reconsideration on a narrowed basis.
  4. Anti‑Injunction Act & the Florida action
    • The district court had permanently enjoined Wayne from prosecuting the Florida action (and any related actions) about ownership of Boost Web, invoking the relitigation exception of 28 U.S.C. § 2283.
    • The First Circuit holds this was an abuse of discretion because:
      • the April 11 decision had not actually decided who owned Boost Web, and
      • under Supreme Court precedent (Chick Kam Choo, Atlantic Coast Line), the relitigation exception applies only to issues actually decided.
    • The injunction is therefore vacated. Res judicata and preclusion issues, if any, are to be raised in the Florida court, absent unusual circumstances.

The First Circuit repeatedly emphasizes that ownership of Boost Web remains unresolved and is central to virtually all disputes. It encourages the district court, on remand, to confront that issue directly, and explicitly warns that a result leaving Wayne with no wages and no ownership benefits would be hard to justify on the record.

III. Detailed Analysis

A. The Defamation Claim: Email Accusing “Fraudulent Activities” as Defamation Per Se

1. Legal framework and precedents

Under Massachusetts law, defamation requires four elements (as stated in Shay v. Walters, 702 F.3d 76 (1st Cir. 2012)):

  1. A statement, concerning the plaintiff, communicated to a third party;
  2. A statement that is defamatory – i.e., it is of such a nature that it could damage the plaintiff’s reputation in the community;
  3. Fault in making the statement; and
  4. Either (a) economic loss caused by the statement, or (b) that the statement is actionable without proof of economic loss (defamation per se).

Two key doctrinal points in Massachusetts, reinforced by this opinion, are:

  • The defamatory character is assessed by whether a statement could damage reputation, not whether it did so (Shay; Restatement (Second) of Torts § 559 cmt. d).
  • Statements that impute criminal conduct are defamation per se (Jones v. Taibbi, 512 N.E.2d 260 (Mass. 1987)), meaning no economic loss need be proven (Ravnikar v. Bogojavlensky, 782 N.E.2d 508 (Mass. 2003)).

There is also a statutory “truth plus actual malice” defense for written libel: under G.L. c. 231, § 92 and Ravnikar, a private‑figure plaintiff cannot recover for written defamation where the challenged statement is substantially true unless it was published with actual malice (in the sense of spite or ill will, not the constitutional standard).

2. The district court’s error: “could” vs. “did” harm

The district court found that Albert’s April 29, 2021 email to CardConnect was not defamatory because CardConnect continued to do business with Wayne, so his reputation was not actually harmed. The First Circuit notes that the court correctly quoted the law’s “could damage reputation” standard but then applied a different standard, focusing on whether the statement “did” damage Wayne’s reputation.

This is a legal error. Under § 559 of the Restatement (Second) of Torts, a statement is defamatory if it tends to harm reputation; it need not be shown to have actually changed anyone’s behavior. The First Circuit therefore reviews the statement de novo to decide whether it is reasonably susceptible of a defamatory meaning.

3. The key statement: “fraudulent activities” and “criminal matter”

The full critical language in Albert’s email, as summarized by the court, was:

“We have been experiencing fraudulent activities with a Wayne Orkin, who may have attempted to either access, change, or otherwise alter any arrangements between you and Boost Web SEO. This is currently a civil and criminal matter that is being pursued. Wayne Orkin is not an authorized representative of Boost Web SEO and any such attempted activity by him will be further pursued in court.”

The First Circuit’s interpretive steps:

  • Read in context, “we have been experiencing fraudulent activities with a Wayne Orkin” is simply a more indirect way of asserting that Wayne has engaged in fraud.
  • The follow‑up description of the situation as a “civil and criminal matter” that is “being pursued” reinforces that this is a charge of criminal conduct.
  • The use of passive voice (“is being pursued”) does not soften or obscure the accusatory nature from the perspective of a reasonable reader (Amrak Prods., Inc. v. Morton, 410 F.3d 69 (1st Cir. 2005)).

The court concludes that the email “unambiguously imputed criminal fraud” to Wayne. Under Massachusetts law, such an imputation is defamation per se (Jones; Restatement (Second) of Torts § 571). Albert’s argument that ambiguous conduct cannot support defamation per se (Phelan v. May Dep’t Stores Co.) is rejected as inapposite; here, the statement itself (not ambiguous conduct) carries a clear criminal imputation.

4. Impact on the “per se” and damages analysis

Because imputing a crime is defamation per se, the plaintiff need not prove any economic losses to get past the fourth element. The district court had reasoned that the email was not per se defamatory because it only reflected Albert’s intent to pursue legal remedies and did not clearly accuse Wayne of a crime. The First Circuit disagrees: the language goes beyond intention and asserts the existence of fraudulent, criminal activity.

Result: the First Circuit holds as a matter of law that elements (1), (2), and the “per se” part of (4) are satisfied:

  • Albert made a statement about Wayne;
  • To a third party (CardConnect);
  • That could damage his reputation because it accuses him of criminal fraud; and
  • Is actionable without proof of economic damages.

5. Truth and actual malice: unresolved on the record

The district court also held that, even if defamatory, the email was protected by “material truth” and absence of actual malice. But that finding rested on the mistaken reading that the email simply expressed an honest intent to sue, not an actual accusation of criminal fraud.

Crucially, the district court never made any factual finding that Wayne actually committed criminal fraud. Nor did it analyze whether Albert had a factual basis to believe he had done so when sending the email. Thus, the appellate court cannot affirm the “truth” defense as to the imputation of criminal fraud.

The case is therefore remanded to the district court, as factfinder, to determine:

  • Whether the accusation of fraudulent, criminal activity was substantially true.
    • If so, the defamation claim fails (absent written publication with actual malice under § 92; Wayne did not develop such an argument on appeal).
  • If not true:
    • Whether Albert was at fault in publishing it (at least negligence for a private figure), and
    • What non‑economic damages (e.g., humiliation, emotional distress) Wayne suffered.

6. Practical implications

  • Emails to third‑party business partners characterizing internal disputes as “criminal” or “fraudulent” are highly risky and will almost always qualify as defamatory in nature.
  • Courts in Massachusetts and the First Circuit will focus on whether a statement could damage reputation, not whether the recipient actually changed behavior.
  • For litigators: invoking criminality in civil business disputes invites scrutiny under defamation per se standards, and “truth” must be backed by solid factual findings, not inference.

B. Conversion and Implied Compensation in a Formally Incomplete Corporation

1. Choice of law and basic conversion doctrine

Because Boost Web is a Florida corporation, and the dispute concerns its internal allocation of money and authority, the First Circuit applies Florida law under Massachusetts’ internal affairs doctrine (Harrison v. NetCentric Corp., 744 N.E.2d 622 (Mass. 2001)).

Under Florida law, conversion is:

“an unauthorized act which deprives another of his property permanently or for an indefinite time.” (Marine Transp. Servs. Sea‑Barge Grp., Inc. v. Python High Performance Marine Corp., 16 F.3d 1133, 1140 (11th Cir. 1994).)

Florida courts often add two constraints:

  • The plaintiff must have an ownership interest in the property (Edwards v. Landsman, 51 So. 3d 1208, 1213 (Fla. Dist. Ct. App. 2011)).
  • Where the dispute is essentially contractual, conversion cannot simply duplicate a breach of contract claim, and monetary “property” must be a specifically identifiable fund rather than a generalized claim for “money due” (Transcapital Bank v. Shadowbrook at Vero, LLC, 226 So. 3d 856 (Fla. Dist. Ct. App. 2017); Bel‑Bel Int’l Corp. v. Commercial Bank of Homestead, 162 F.3d 1101 (11th Cir. 1998); Zinn v. Zinn, 549 So. 2d 1141 (Fla. Dist. Ct. App. 1989)).

The First Circuit accepts that the “specific fund” requirement exists but emphasizes (citing Bel‑Bel and Zinn) that it:

  • applies chiefly to prevent contract disputes from being repackaged as tort conversion claims; and
  • does not apply where there is no contract between the parties concerning the disputed funds and the alleged wrong is purely tortious misappropriation.

2. Redirection of CardConnect residuals to MKY: a straightforward conversion

a. No contractual dispute, so no “identifiable fund” problem

Wayne argued that the residuals redirected to MKY from CardConnect could not be the subject of conversion because they were not “specifically identifiable” and functioned as contract damages. The First Circuit notes:

  • The contracts at issue (CardConnect/PTMS, and the Consent Agreement involving Boost Web) did not govern any contract between Boost Web and Wayne as such; the conversion claim is tort‑based against Wayne personally.
  • The gravamen is that Wayne wrongfully diverted funds CardConnect otherwise would have paid to Boost Web.

Thus, this is “not the type of claim to which the specific fund requirement was intended to apply” (Bel‑Bel, 162 F.3d at 1109). It is not a disagreement about performance under a contract but about interference with the flow of funds due to a corporation.

b. Ownership: interpreting the Consent to Assignment Agreement (Ohio law)

Ownership of the residuals depended on a 2014 “Consent to Assignment Agreement” among PTMS, CardConnect, and Boost Web. The contract had an Ohio choice‑of‑law clause, so Ohio contract law applies (Envision Waste Servs., LLC v. Cnty. of Medina, 83 N.E.3d 270 (Ohio Ct. App. 2017)).

Key points:

  • The document is styled “Consent to Assignment,” but it also contains an operative clause titled “Assignment” that states that, as of January 23, 2014, residuals “shall be paid to [Boost Web]” and “[a]ll payments after the Effective Date shall be made to [Boost Web].”
  • Schedules listing the “Merchants Assigned” were missing; the text also references possible future accounts with some additional documentation requirement.
  • The First Circuit finds the document at least ambiguous and incomplete concerning exactly which merchants and time periods, but it is clear enough that an assignment of residuals to Boost Web was contemplated.

Under Ohio law, where a contract is ambiguous, courts may consider the parties’ course of performance. The conduct here was unequivocal:

  • From 2014 until April 2021, CardConnect consistently paid all residuals (from old and new merchant accounts) to Boost Web, without differentiating pre‑ and post‑2014 merchants.
  • Wayne himself testified that the Consent Agreement was an “assignment” that “transfer[red] revenue from PTMS to the Boost operating account,” and he never asserted any personal right to those residuals until the falling‑out.
  • Boost Web treated the residuals as its corporate revenues, funding operations and expenses.

The court therefore holds that, by the contract as illuminated by the parties’ conduct, the residuals, including those from merchants originated after 2014, belonged to Boost Web.

c. Lack of authority: Wayne’s retaliatory redirection

Wayne had run Boost Web’s day‑to‑day operations, solicited merchants, communicated with CardConnect, and generally “was” the business operationally. He argued that this gave him actual or implied authority to redirect residuals by signing the Residual Redirection Application and Agreement in favor of MKY (a company owned by his friend, which then funneled the money to Wayne).

The First Circuit affirms the district court’s factual finding that:

  • Whatever authority Wayne had to act for Boost Web was limited to acting in Boost Web’s best interests and within the scope of its business; and
  • He signed the Redirection Agreement not for Boost Web’s benefit but to ensure that “Boost would not receive the revenues,” after Albert cut him off from the bank account, i.e., as retaliation.

On those facts, the court finds no clear error in concluding Wayne had no authority to redirect the residuals and that doing so was an “unauthorized act” depriving Boost Web of its property. The conversion judgment for $234,941.60 is therefore affirmed.

3. Personal expenditures of $403,827.91: identifying the amount vs. deciding authority

a. Factual finding that the money went to non‑Boost‑Web expenses

In 2020 and early 2021, Wayne continued the long‑standing pattern of using the Boost Web account for both business and personal expenses, and then relying on Boost Web’s accountants to reconcile which were business‑related. But in those years, when the accountants asked him for receipts and documentation, he did not provide what they requested. They then issued Form 1099s to him reflecting that:

  • $211,167.68 (2020)
  • $192,660.23 (2021)

were amounts charged to Boost Web for which no business purpose could be substantiated, for a total of $403,827.91.

On this record, the First Circuit holds there is no clear error in the district court’s findings that:

  • Wayne actually spent at least $403,827.91 of Boost Web funds on personal or unrelated business expenses; and
  • He failed to substantiate these as business expenses despite multiple opportunities, both to accountants and to the court.
b. The crucial error: treating Wayne as having no right to any compensation

The district court then concluded that “nothing in the record establishes that [Wayne] could rightfully use Boost Web funds to pay for his personal expenses or other business expenses to benefit himself,” and thus treated every dollar of personal spending as conversion.

The First Circuit finds this conclusion clearly erroneous under Florida law on implied‑in‑fact contracts.

c. Implied‑in‑fact contract for compensation (Florida law)

Florida recognizes contracts “implied in fact,” i.e., obligations inferred from the parties’ course of conduct rather than explicit words (F.H. Paschen, S.N. Nielsen & Assocs. LLC v. B&B Site Dev., Inc., 311 So. 3d 39 (Fla. Dist. Ct. App. 2021); Com. P’ship 8098 Ltd. v. Equity Contracting Co., 695 So. 2d 383 (Fla. Dist. Ct. App. 1997)). A classic example is:

where a person performs services at another’s request, or with that party’s knowledge, under circumstances fairly indicating an expectation of payment; the law implies a promise to pay a reasonable amount for the services.

The First Circuit applies this paradigm almost directly:

  • Wayne “inarguably performed services” for Boost Web: he ran all day‑to‑day operations, generated all business, and built the merchant relationships that produced substantial residual income.
  • For years, Boost Web (with Albert’s knowledge) allowed him to use corporate funds for personal expenses, and then:
    • treated those personal expenditures as wages or income on his W‑2s (at least in 2018–2019); and
    • reflected them as such on corporate tax returns, which Albert signed.
  • Albert did not object to this pattern for years, and only did so after the relationship deteriorated in 2021.

Given these facts, the court holds it is “clear from their conduct that Orkin regularly used at least some Boost Web funds for personal expenses and was issued W‑2s for those amounts, and Albert regularly acquiesced to this practice.” That conduct “is adequately specific to show an agreement in which Orkin was entitled to some level of recompense for his labors.”

The district court had rejected an implied‑contract theory for lack of “specificity” in terms (rate, limits, etc.). The First Circuit responds that implied‑in‑fact contracts by their nature lack full written specificity; courts routinely fill in missing details, notably price or compensation, by implying a reasonable amount (e.g., Com. P’ship 8098; Focus Mgmt. Grp. USA, Inc. v. King, 171 F. Supp. 3d 1291 (M.D. Fla. 2016)). Demanding the level of specificity of a written agreement would eviscerate the doctrine.

The opinion also invokes equity explicitly, citing Magwood v. Tate, 835 So. 2d 1241 (Fla. Dist. Ct. App. 2003), to underscore that considerations of “equity and morality” influence whether a promise should be inferred from conduct: a result that leaves the operating sibling with no compensation, while the paper incorporator appropriates all profits, is described as essentially inequitable and implausible.

d. Consequences: compensation must be recognized but quantified

The First Circuit stops short of setting any compensation figure. Instead, it holds:

  • The finding that Wayne had no authority to take any Boost Web money for himself is clearly erroneous.
  • The conversion judgment for the entire $403,827.91 must therefore be vacated.
  • On remand, the district court must:
    • determine what compensation would be “reasonable” for Wayne’s services in 2020–2021, considering prior years and the company’s increased revenues; and
    • then decide whether any amount he took beyond that reasonable compensation can be treated as conversion under Florida law (which may raise renewed questions about identifiability and demand/refusal).

The court hints that the amounts Wayne took in earlier years were much smaller (e.g., roughly $15,000 in 2019) but notes that revenues had increased substantially by 2020–2021. These factors will presumably bear on “reasonableness.”

e. Contract vs. conversion for any “excess” withdrawals

The First Circuit flags, but does not decide, a further nuance: depending on how the facts develop:

  • Excess withdrawals might be better characterized as over‑compensation under the implied agreement (i.e., a contractual claim), or
  • Might, if suitably identifiable and wrongful, qualify as conversion.

Given that the “specific fund” requirement is primarily about preventing contract‑to‑tort transformation, classification of any excess will matter. The appellate court leaves this to the district court to resolve on remand.

4. Practical impact for closely held / family companies

This aspect of Orkin is particularly significant for:

  • Family‑run or informally run corporations where:
    • one person does the work,
    • another controls the formal corporate structure, and
    • no written agreement exists on compensation or ownership.

It sends several clear signals:

  • Long‑standing patterns of conduct (e.g., using company funds for personal expenses, issuing W‑2s, signing tax returns) can and will be used to infer an implied compensation contract.
  • A corporate “owner” on paper, who knowingly allows an operator‑partner to be paid in this way for years, is unlikely to be allowed—retroactively—to characterize all such payments as wrongful conversions.
  • Nevertheless, where the operator suddenly increases withdrawals dramatically, courts may be willing to cap compensation at a “reasonable” level and potentially treat the remainder as wrongful.

C. Civil Contempt: Limits of “Clear and Unambiguous” Orders

1. Contempt standard

The First Circuit reviews civil contempt under the framework of United States v. Saccoccia, 433 F.3d 19, 27 (1st Cir. 2005). To hold a party in civil contempt, a court must find, by clear and convincing evidence:

  1. The alleged contemnor had notice that he was within the order’s scope;
  2. The order was clear and unambiguous about what it required or prohibited;
  3. The alleged contemnor had the ability to comply; and
  4. The order was actually violated.

The clarity requirement is stringent: parties must be able to ascertain “from the four corners of the order precisely what acts are forbidden” (Goya Foods, Inc. v. Wallack Mgmt. Co., 290 F.3d 63, 76 (1st Cir. 2002); NBA Props., Inc. v. Gold, 895 F.2d 30 (1st Cir. 1990)).

2. Orders concerning CardConnect residuals

The April 11 decision and, more clearly, the May 2 ruling did three things:

  • Declared that “the funds being held by CardConnect representing residuals from merchant accounts payable to Boost Web since August 2021 belong to Boost Web.”
  • Directed CardConnect to transfer those funds to Boost Web’s bank account (or as Boost Web might direct).
  • Denied a stay pending appeal.

While appeals were pending, Wayne’s counsel repeatedly communicated with CardConnect, asserting:

  • It was “highly likely” Wayne would succeed on appeal;
  • The claims “ha[d] not been finally adjudicated”; and
  • The orders did not “clearly” require CardConnect to disburse funds to Boost Web.

The district judge found these communications were attempts to “undermine and controvert explicit court orders,” and the First Circuit agrees that, at least as to the directive that CardConnect must pay Boost Web, the orders were sufficiently clear to satisfy the “unambiguous” requirement.

3. Overreach: basing contempt on unresolved ownership issues

However, the contempt order had a broader foundation. The district court:

  • Characterized its April 11 decision as having resolved that Albert “is entitled to all of Boost Web’s assets as the company’s incorporator and director,” and
  • Treated Wayne’s Florida “ownership” lawsuit as an attempt at “judicial hopscotch” and a contemptuous effort to relitigate resolved questions.

The First Circuit points out that the April 11 decision in fact did not clearly decide ownership of Boost Web. It found certain things (that Albert was listed as the sole initial officer/director; that no shares were issued; etc.), but it did not draw the legal conclusion that Albert was the sole owner nor analyze Wayne’s potential equitable ownership theories under Florida law.

Accordingly:

  • Wayne’s effort to litigate ownership in Florida did not violate any clear and unambiguous order.
  • Nor did counsel’s May 2 comments to CardConnect that referred to possible Wayne rights contingent on ownership being later resolved.

Because contempt cannot be based on violation of implicit or ambiguous expectations, the First Circuit vacates the contempt order and remands. On remand, the district court may consider whether Wayne’s other conduct—especially attempting to dissuade CardConnect from complying with explicit transfer orders—justifies a narrower contempt finding and what level of sanctions, if any, is appropriate.

D. The Anti‑Injunction Act and the Relitigation Exception

1. Statutory framework

The Anti‑Injunction Act, 28 U.S.C. § 2283, provides:

“A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.”

The last category is known as the relitigation exception. It allows a federal court to bar state litigation of issues already actually decided by the federal court (Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 148 (1988)). But the Supreme Court has emphasized:

  • The exception is narrow and should not be expanded;
  • Courts must look to what was actually decided in the earlier order, not to what the federal court might later think it “intended” to decide; and
  • State courts are presumed competent to apply res judicata; federal anti‑suit injunctions require “substantial justification” and unusual circumstances (see also Atlantic Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs, 398 U.S. 281 (1970); First Circuit cases like Fernández‑Vargas v. Pfizer, 522 F.3d 55 (1st Cir. 2008) and Aristud‑González v. Gov. Dev. Bank for P.R., 501 F.3d 24 (1st Cir. 2007)).

    2. The district court’s injunction and its premise

    The district court permanently enjoined Wayne from:

    • Prosecuting the Florida action; and
    • Bringing any action that “purports to relitigate the issue of ownership of Boost Web or any other issue that was decided by” the April 11 decision or May 2 order.

    It reasoned that:

    • Its prior decisions had already resolved that Albert owned Boost Web, and
    • Any further ownership claims would be barred by res judicata as arising from the same nucleus of operative facts.

    3. The First Circuit’s critique

    The appellate court rejects that premise. On “the precise state of the record and what the earlier federal order actually said” (Chick Kam Choo):

    • The April 11 decision:
      • said Albert was listed on filings as incorporator and sole initial officer/director;
      • found no stock had ever issued and no shareholders existed;
      • found Wayne not to be an officer or shareholder; but
      • did not actually decide as a matter of Florida corporate law who legally or equitably owned Boost Web.
    • Albert’s reliance on tax returns listing her as holding 100% of “voting shares” was never tied to any finding that Wayne saw or agreed to these returns, and no Florida‑law analysis of equitable shareholder doctrines was performed.

    Consequently:

    • The issue Wayne sought to raise in Florida—ownership of Boost Web—had not been actually decided in the federal case.
    • The relitigation exception therefore does not apply under Chick Kam Choo and Atlantic Coast Line.

    4. Res judicata is for the state court to apply (absent unusual circumstances)

    The district court also justified its injunction by saying that, to the extent ownership had not already been adjudicated, any such claims would be barred by res judicata. The First Circuit notes its earlier admonition in Aristud‑González that, in the context of the relitigation exception:

    • Res judicata and preclusion issues should ordinarily be raised and decided in the state court where the new action is pending; and
    • Federal anti‑suit injunctions are appropriate only in unusual circumstances, which were neither identified nor present here.

    Thus, even if some or all of Wayne’s claims should ultimately be barred by claim preclusion, it is for the Florida court—not the federal court—to determine that in the first instance.

    5. Impact and guidance

    The vacatur of the injunction sends a clear message in the First Circuit:

    • Federal courts must be precise about what their judgments actually decide.
    • The relitigation exception will not be stretched to cover issues that were implicit, background, or unresolved in prior federal orders.
    • Parallel proceedings in state court about ownership and internal affairs of corporations, especially when not squarely adjudicated previously, are not lightly to be enjoined.

    For litigants, this means:

    • Seeking an anti‑suit injunction in the First Circuit requires showing that the precise issue or claim was actually adjudicated and that unusual circumstances justify cutting off access to the state forum.
    • Opponents can resist such injunctions by showing that a core legal issue (e.g., corporate ownership) remains open or only partially addressed in the federal record.

    E. The Unresolved Core: Ownership of Boost Web

    Throughout the opinion, the First Circuit returns to the idea that the central problem is the unresolved question:

    “If Orkin owns all or even most of Boost Web, then whether he owes Boost Web anything becomes mostly an academic issue. Conversely, if he does not own all or most of Boost Web, then it would be strange indeed to find that he was not able to receive any compensation in view of his actual role at the company.”

    Key facts from the record:

    • Boost Web was incorporated by Albert in Florida. She is listed as incorporator, initial officer/director, and on annual reports.
    • No stock was ever issued; no formal shareholders were recorded.
    • Wayne conducted all business, created all revenue, managed relationships, and effectively acted as president.
    • Tax returns for some years listed Albert as holding “100% of voting shares,” but there is no clear evidence Wayne saw or agreed to those returns.

    Florida corporate law generally defines ownership via shareholding, but Florida courts also recognize concepts like equitable ownership in certain contexts. Wayne suggests he may be an “equitable shareholder”; the First Circuit does not decide the matter but emphasizes that some coherent ownership determination must be made.

    Importantly, the court makes a fairness point at the end:

    “We stress only that any outcome that leaves Orkin with no rights to either wages or the benefits of ownership would be difficult to justify on the record as it stands.”

    On remand, the district court will likely have to:

    • Determine—under Florida corporate law—whether:
      • Albert is the sole legal owner,
      • Wayne has some equitable or de facto ownership interest, or
      • some shared or constructive ownership regime should be recognized.
    • Integrate that ownership determination with:
      • the implied compensation analysis (how much Wayne should have been paid); and
      • the conversion analysis (to what extent, if any, Wayne’s withdrawals truly deprived another “owner” of property).

    The court hints that once ownership is clarified, much of the bitter litigation over “conversion” may reduce to either:

    • Internal accounting among owners; or
    • Compensation disputes that could, in hindsight, have been addressed through a proper employment or shareholder agreement.

    IV. Complex Concepts Simplified

    For clarity, here is a simplified explanation of key legal concepts implicated in Orkin v. Albert:

    1. Defamation per se

    Defamation is a false statement about a person that harms reputation. “Per se” means the statement is of such a serious type (e.g., imputing crime, professional incompetence) that:

    • The law presumes it tends to harm reputation; and
    • The plaintiff need not prove specific economic losses.

    In Massachusetts, accusing someone of a crime (= “imputation of crime”) is a textbook example of defamation per se.

    2. “Material truth” and “actual malice” in Massachusetts defamation

    A defendant can avoid liability if the statement is substantially true—minor inaccuracies don’t matter if the “gist” or “sting” is accurate. For written defamation (libel), Massachusetts statute also provides that if the defendant proves truth, the plaintiff cannot recover unless he shows the statement was made with actual malice in the sense of spite, hatred, or ill will (a state‑law standard distinct from the constitutional “actual malice” for public figures).

    3. Conversion vs. breach of contract (Florida law)

    Conversion is a tort—a wrongful exercise of ownership over someone else’s property, denying them its use. In Florida:

    • Where the relationship is contractual (e.g., a promise to pay money), courts will not let a party simply re‑label a breach of contract claim as conversion.
    • In such cases, conversion generally requires a specifically identifiable fund—for example, a segregated escrow account—not just “money I should have been paid.”
    • But if there is no contract between the parties governing the property and a party misappropriates money owed to someone else (e.g., diverts third‑party payments), conversion can apply without the “identifiable fund” constraint.

    4. Implied‑in‑fact contracts

    An implied‑in‑fact contract arises from the conduct of the parties, not from explicit written or oral agreement. Courts infer that:

    • Services were performed with an expectation of payment; and
    • The other party knew of and accepted those services under circumstances showing an understanding that payment would be made.

    The law then implies a promise to pay a reasonable amount for those services, even if no price or salary was ever agreed upon.

    5. Internal affairs doctrine

    Under this conflict‑of‑laws principle, questions about the internal operations and governance of a corporation—such as shareholder rights, director duties, and internal disputes—are governed by the law of the state of incorporation. Here, because Boost Web is a Florida corporation, Florida law governs questions like:

    • Who owns the corporation?
    • What fiduciary duties exist among insiders?
    • How do we characterize internal financial transfers?

    6. The Anti‑Injunction Act and the relitigation exception

    Federal courts generally may not stop state court suits, with three narrow exceptions. The “relitigation” exception allows a federal court to enjoin a state suit only when:

    • The state suit seeks to relitigate an issue or claim that the federal court has already finally decided; and
    • The injunction is needed to “protect or effectuate” (i.e., enforce) that federal judgment.

    If the prior federal judgment didn’t actually decide a particular legal issue, the relitigation exception does not apply, even if the federal court might believe the state suit should be precluded.

    7. Civil contempt

    Civil contempt is used to coerce compliance with court orders or compensate for harm from non‑compliance. To hold someone in civil contempt, the court must find:

    • The order was clear and specific;
    • The person knew of the order and had the ability to comply; and
    • They violated it.

    Ambiguities are resolved in favor of the accused contemnor. Orders do not forbid everything a judge might in hindsight wish the party had not done; only what is plainly prohibited or required on their face.

    V. Conclusion: Key Takeaways and Broader Significance

    Orkin v. Albert is a cautionary tale about:

    • Running a substantial business through a corporation that exists only “in name,” without stock issuance, written agreements, or clear compensation and ownership arrangements; and
    • Attempting to weaponize those formal deficiencies after a family relationship breaks down.

    From a doctrinal perspective, the opinion establishes and clarifies several important principles:

    1. Defamation: In Massachusetts and the First Circuit, emails to business partners accusing someone of “fraudulent activities” and calling the situation a “criminal matter” will be read as imputing criminal conduct, triggering defamation per se and eliminating any requirement to prove economic loss.
    2. Implied compensation and conversion: Under Florida law, a long‑standing practice of paying a working insider through corporate funds—documented in tax forms and ratified year after year—will support an implied‑in‑fact contract for reasonable compensation. A corporate insider cannot retroactively characterize every dollar as conversion merely because ownership was never formalized.
    3. Assignments and course of dealing: Ohio contract law, as applied here, illustrates how a poorly drafted “Consent to Assignment” can be salvaged and interpreted by considering years of unambiguous course of performance, especially in commercial settings with third‑party payors like CardConnect.
    4. Civil contempt and anti‑suit injunctions: The First Circuit insists on strict adherence to the “clear and unambiguous order” requirement for contempt, and to the narrow scope of the Anti‑Injunction Act’s relitigation exception. Federal judges may not enjoin state litigation about issues they have not actually decided, even if they suspect the claims are precluded.
    5. Primacy of ownership issues: The court strongly encourages both parties and the district court to confront the ownership of Boost Web directly. That determination—left unresolved for over a decade—will largely determine:
      • how much, if anything, Wayne owes the corporation; and
      • whether Albert can justly capture the full benefit of a business Wayne created and ran.

    In the broader legal context, Orkin underscores that:

    • Courts will not let formal corporate structures be used opportunistically to deprive a working partner of any compensation or ownership benefit where equity and longstanding practice indicate otherwise.
    • At the same time, courts will not tolerate an insider’s unilateral diversion of corporate revenues to themselves behind the back of other insiders, especially as retaliation.
    • And federal courts, mindful of federalism and comity, will resist over‑broad efforts to block state courts from adjudicating unresolved corporate ownership and internal affairs issues.

    The decision thus stands as a significant precedent at the intersection of defamation, closely held corporate governance, implied contractual obligations, and federal–state judicial relations. It will be particularly instructive for practitioners handling disputes in family‑run or informally structured businesses, and for litigators strategizing multi‑forum battles over corporate control and economic entitlement.

Case Details

Year: 2025
Court: Court of Appeals for the First Circuit

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