Informal Corporate Arrangements, Defamation Per Se, and Limits on Federal Anti‑Injunction Power: A Commentary on Orkin v. Albert

I. Introduction

The First Circuit’s decision in Orkin v. Albert, Nos. 24‑1532, 24‑1614, 24‑1734 (1st Cir. Dec. 11, 2025) is a rich and multi‑layered opinion at the intersection of family business disputes, informal corporate practices, and federal–state court relations. It arises from a decade‑long business relationship between siblings Wayne Orkin (“Orkin”) and Lisa Albert (“Albert”), who operated a merchant services business under the name Boost Web SEO, Inc. (“Boost Web”) with almost no formal documentation of ownership, compensation, or authority.

When the relationship soured, the absence of corporate formalities forced courts to reconstruct the parties’ rights out of their conduct. The First Circuit’s opinion addresses:

When an accusation of “fraudulent activities” and a “civil and criminal matter” constitutes defamation per se under Massachusetts law.
How Florida law treats long-standing patterns of paying “personal expenses” out of company accounts as an implied‑in‑fact compensation agreement, limiting the scope of civil conversion claims.
How Florida conversion law distinguishes between contract damages and tortious misappropriation, particularly regarding redirected residual payments.
How Ohio law and the parties’ conduct inform the interpretation of an ambiguous “Consent to Assignment” of residuals.
The stringent preconditions for federal courts to enjoin state proceedings under the Anti‑Injunction Act’s “relitigation exception,” and the necessity that a prior federal judgment actually decide the issue being enjoined.
The requirement that contempt sanctions rest on violation of a clear and unambiguous court order.

The court affirms in part, vacates in part, and remands on several issues, while explicitly inviting the district court to resolve the central but oddly neglected question: who actually owns Boost Web? The resolution of that question, the First Circuit suggests, will radically affect the proper treatment of both sides’ claims and defenses.

II. Overview of Facts and Procedural History

A. Business Structure and Operations

Orkin operated Pass Thru Merchant Services (“PTMS”) from the Dominican Republic and, in 2011, entered an independent contractor agreement with CardConnect (then Financial Transaction Services, LLC), under which PTMS would solicit merchant accounts and receive 80% of CardConnect’s net income from those merchant relationships (“residuals”).

Because Orkin needed a U.S. entity to facilitate this work, Albert incorporated Boost Web in Florida in 2013. Critically:

Albert was listed as registered agent, incorporator, and sole initial officer/director.
No stock was ever issued; no shareholders or officers were formally elected.
There was no written agreement regarding ownership, profit‑sharing, or compensation.
Albert opened the Boost Web bank account; both siblings had signature authority; Albert also allowed Orkin to use her personal credit card for Boost Web expenses.
Orkin, however, ran all daily operations, generated all business, managed merchant relationships, dealt with CardConnect, and publicly held himself out as Boost Web’s president.

In 2014, a “Consent to Assignment Agreement” among PTMS, CardConnect, and Boost Web provided that CardConnect would pay PTMS’s residuals to Boost Web. From 2014 to April 2021, CardConnect sent all residuals to Boost Web, including from accounts originated before and after the Consent Agreement. By 2021, residuals reached approximately $35,000–$50,000 per month.

B. Breakdown of the Relationship

In April 2021, Albert discovered:

Her personal credit card, used for Boost Web‑related expenses, was maxed out with about $26,000 in charges.
The Boost Web bank account was overdrawn.

She responded by:

Removing Orkin’s access to the Boost Web account and her credit card.
Sending an email to CardConnect on April 29, 2021, claiming “fraudulent activities with a Wayne Orkin” and calling it a “civil and criminal matter” being pursued, and asserting that Orkin was not an authorized representative of Boost Web.

Orkin retaliated by arranging with CardConnect, via a “Residual Redirection Application and Agreement” (the “Redirection Agreement”), to redirect residuals to MKY FTS Sales, LLC (“MKY”), a company owned by his friend. MKY then transferred those funds to an account controlled by Orkin. After Boost Web’s counsel complained, CardConnect stopped paying MKY and placed the residuals into escrow; by November 2023, the escrowed funds exceeded $943,000.

C. Expense Disputes

Historically, Orkin used Boost Web funds to cover both business and personal expenses; Boost Web’s accountants would later reconcile the accounts, reclassifying personal expenditures and issuing W‑2s or 1099s accordingly. But:

In 2020 and 2021, Orkin failed to provide receipts to document the nature of many expenditures.
The accountants therefore issued 1099s treating $403,827.91 in 2020–2021 expenditures as Orkin’s personal income (i.e., not substantiated as business expenses).

D. Litigation in Massachusetts and Florida

On May 28, 2021, Orkin (and his father, now deceased) sued Albert and her son in Massachusetts state court. After removal to federal court (D. Mass.), Boost Web intervened and asserted a conversion crossclaim against Orkin. After partial summary judgment, the case proceeded to a bench trial on:

Orkin’s claims (defamation, breach of fiduciary duty, breach of contract, unjust enrichment, and injunctive relief) against Albert and her son; and
Boost Web’s conversion claim against Orkin.

In April 2024, the district court ruled:

Against Orkin on all his claims, including defamation.
For Boost Web on conversion, finding that Orkin converted:
- $403,827.91 in Boost Web funds used for personal expenses; and
- $234,941.60 in residuals diverted through MKY.

The court ordered CardConnect to disburse the escrowed residuals to Boost Web and awarded damages plus prejudgment interest.

While appealing, Orkin:

Through counsel, repeatedly urged CardConnect to withhold payment to Boost Web, suggesting the judgment was not final.
Filed a new action in Florida state court seeking a declaration that he owned Boost Web and an injunction preserving its assets, without notifying the Massachusetts district court.

The district court responded by:

Rejecting Orkin’s motion to stay the judgment and reiterating that the residuals belonged to Boost Web.
Finding Orkin in civil contempt for efforts to frustrate its orders and for filing the Florida action, and imposing monetary sanctions.
Issuing a temporary restraining order and later a permanent injunction under the Anti‑Injunction Act’s relitigation exception, barring Orkin from litigating the Florida action or any suit “relitigating the issue of ownership of Boost Web or any other issue” decided in the federal case.

Orkin appealed (1) the April 11 merits decision, (2) the contempt order, and (3) the permanent injunction. The First Circuit consolidated the appeals.

III. Summary of the First Circuit’s Holdings

Defamation (Massachusetts law)
- The district court applied the wrong standard by requiring proof that the statement did damage Orkin’s reputation, rather than that it could do so.
- Albert’s email, accusing Orkin of “fraudulent activities” and stating that the matter was “civil and criminal,” unambiguously imputed criminal fraud, constituting defamation per se.
- Because imputations of crime are defamatory per se, Orkin need not prove economic loss.
- However, the district court did not actually decide whether the imputation (that Orkin committed criminal fraud) was substantially true; that issue, along with fault and non‑economic damages, is remanded.
Conversion of Redirected Residuals (Florida & Ohio law)
- The residuals redirected via MKY were not merely contract damages; the identifiability requirement for conversion does not apply where the conversion claim does not simply recast a contract dispute.
- Boost Web owned the residuals, including those from merchants originated after 2014, under the Consent to Assignment Agreement interpreted in light of the parties’ conduct (Ohio law).
- Orkin lacked authority to divert those funds for his own benefit; the district court’s finding that his actions were in retaliation and not in Boost Web’s interest was not clearly erroneous.
- The judgment that Orkin converted $234,941.60 in residuals is affirmed.
Conversion of “Personal Expense” Funds / Implied Compensation (Florida law)
- The district court did not clearly err in finding that Orkin used $403,827.91 in 2020–2021 for expenditures not shown to be Boost Web business expenses.
- However, it clearly erred in concluding that Orkin had no authority to treat any of those funds as compensation.
- Given years of practice where:
  - Orkin performed all operational work,
  - Used Boost Web funds for personal expenses with Albert’s knowledge, and
  - Boost Web issued W‑2s and tax returns treating those amounts as his wages,
  Florida law recognizes an implied‑in‑fact contract entitling Orkin to “a reasonable amount” of compensation.
- The court vacates the finding that all $403,827.91 was converted and remands to determine:
  - What level of compensation was reasonable under the implied arrangement; and
  - Whether, and in what amount, any excess constitutes conversion (considering Florida’s conversion standards and any identifiability issues).
Contempt
- Some aspects of Orkin’s conduct (urging CardConnect to disregard the court’s directive to pay Boost Web) did violate clear orders and may justify contempt.
- However, other conduct — including pursuing the Florida ownership action and counsel’s statements to CardConnect implying unresolved ownership — did not clearly violate any explicit order, because the district court had not actually decided ownership.
- Because the contempt order rested in part on conduct that was not clearly prohibited, it is vacated and remanded for the district court to reconsider contempt and sanctions on the narrower basis of conduct that did plainly violate prior orders.
Permanent Injunction Against the Florida Action (Anti‑Injunction Act)
- The Anti‑Injunction Act’s “relitigation exception” permits a federal court to enjoin state proceedings only where the issue or claim was actually decided by the federal judgment.
- The district court’s earlier decision did not decide who owned Boost Web; it found only that:
  - Albert was incorporator/initial director and listed on state filings; and
  - Boost Web had issued no stock or elected formal officers; and
  - Orkin ran day‑to‑day operations.
- Those findings do not resolve ownership under Florida corporate law, nor do they foreclose arguments that Orkin may have an equitable ownership interest.
- Therefore, the federal court could not use the relitigation exception to enjoin the Florida action; the injunction is vacated as an abuse of discretion.
- The First Circuit emphasizes that, absent “unusual circumstances,” res judicata arguments should be raised as defenses in state court, not enforced by federal injunction.
Guidance on Remand and the Ownership Question
- The panel pointedly notes that the “cart has been placed before the horse”: all along, the parties and the district court litigated conversion, defamation, and related issues without first determining who owns Boost Web.
- The court invites the district court, on remand, to resolve:
  - Who owns Boost Web and in what proportions; and
  - How that ownership structure affects Orkin’s entitlement either to wages or to ownership‑related benefits.
- The panel states that an outcome leaving Orkin with neither wages nor any ownership benefits would be “difficult to justify on the record as it stands.”

IV. Analysis

A. Precedents and Doctrinal Foundations Cited in the Opinion

1. Defamation: Massachusetts Framework

Shay v. Walters, 702 F.3d 76 (1st Cir. 2012): The First Circuit’s own articulation of Massachusetts defamation elements — statement of and concerning the plaintiff, publication, defamatory meaning (ability to damage reputation), fault, and either economic loss or a category that is per se actionable. The Shay standard underpins the re‑analysis here.
Ravnikar v. Bogojavlensky, 782 N.E.2d 508 (Mass. 2003): Clarifies that certain categories — including accusations of crime — are defamatory per se and do not require proof of economic loss.
Jones v. Taibbi, 512 N.E.2d 260 (Mass. 1987): Recognizes that imputations of crime are defamatory per se; also draws distinction between purely legal questions of defamatory meaning and mixed law–fact questions when communications are ambiguous.
Amrak Prods., Inc. v. Morton, 410 F.3d 69 (1st Cir. 2005): Emphasizes that defamatory meaning is assessed contextually from the perspective of a reasonable reader.
Phelan v. May Dep’t Stores Co., 819 N.E.2d 550 (Mass. 2004): Holds that ambiguous conduct, without a clear communicative meaning, cannot support defamation per se. The First Circuit distinguishes Phelan because Albert’s email was not merely ambiguous conduct, but an explicit accusation.
Restatement (Second) of Torts §§ 559, 571 (1977): The panel invokes the Restatement’s formulation that defamatory character turns on general tendency to harm reputation, not proof of actual harm, and that imputations of crime are actionable without proof of special damage.

2. Conversion and Implied Contracts: Florida Law

Marine Transport Services Sea‑Barge Group, Inc. v. Python High Performance Marine Corp., 16 F.3d 1133 (11th Cir. 1994): Defines conversion under Florida law as an “unauthorized act which deprives another of his property permanently or for an indefinite time.”
Bel‑Bel International Corp. v. Community Bank of Homestead, 162 F.3d 1101 (11th Cir. 1998): Applying Florida law, the Eleventh Circuit narrows the “identifiable fund” requirement to cases where a claimant is attempting to transform a contract dispute into a tort; if no contract governs the relationship, the particularization requirement loosens.
Transcapital Bank v. Shadowbrook at Vero, LLC, 226 So. 3d 856 (Fla. Dist. Ct. App. 2017): Reinforces that conversion claims must be independent of mere contract nonperformance and that conversion lies where there is wrongful exercise of dominion beyond contractual rights.
Frayman v. Douglas Elliman Realty, LLC, 515 F. Supp. 3d 1262 (S.D. Fla. 2021): Illustrates the use of the “specific fund” requirement to prevent contract claims dressed up as conversion claims.
Zinn v. Zinn, 549 So. 2d 1141 (Fla. Dist. Ct. App. 1989): Holds that where no contract binds a defendant to a claimant, the specific‑fund requirement used in contract‑type conversion cases is inapplicable.
F.H. Paschen, S.N. Nielsen & Associates LLC v. B&B Site Development, Inc., 311 So. 3d 39 (Fla. Dist. Ct. App. 2021); Commercial Partnership 8098 Ltd. v. Equity Contracting Co., 695 So. 2d 383 (Fla. Dist. Ct. App. 1997): Define implied‑in‑fact contracts as arising from conduct rather than express words, particularly where services are performed with knowledge and under circumstances suggesting compensation is expected.
Rhythm & Hues, LLC v. Nature’s Lawn Care, Inc., 368 So. 3d 12 (Fla. Dist. Ct. App. 2023): Explains that an implied‑in‑fact contract lacks express promissory words and must be inferred from conduct.
Farmer v. Humana, Inc., 582 F. Supp. 3d 1176 (M.D. Fla. 2022): Demonstrates that implied contracts can satisfy the requirement of “specificity in terms” through reasonably inferable obligations, such as the implicit commitment to safeguard sensitive personal data.
Goodrich v. Malowney, 157 So. 2d 829 (Fla. Dist. Ct. App. 1963); Fla. Dep’t of Insurance v. Debenture Guar., 921 F. Supp. 750 (M.D. Fla. 1996): Clarify that demand and refusal are not prerequisites to conversion where the wrongful exercise of dominion is otherwise shown.

3. Contract Interpretation and Modification: Ohio Law

Envision Waste Services, LLC v. County of Medina, 83 N.E.3d 270 (Ohio Ct. App. 2017); Lutz v. Chesapeake Appalachia, L.L.C., 71 N.E.3d 1010 (Ohio 2016): Stand for the proposition that extrinsic evidence, including the parties’ conduct, may be used to clarify an ambiguous or incomplete written agreement.
Union Savings Bank v. Lawyers Title Insurance, 946 N.E.2d 835 (Ohio Ct. App. 2010); Grzely v. Singer, 971 N.E.2d 481 (Ohio Ct. App. 2012): Emphasize that conduct can create a contract implied in fact or modify a written contract over time.

4. Federal Contempt and Anti‑Injunction Principles

United States v. Saccoccia, 433 F.3d 19 (1st Cir. 2005): Provides the standard for civil contempt: clear and convincing evidence of notice, a clear and unambiguous order, ability to comply, and actual violation.
Goya Foods, Inc. v. Wallack Mgmt. Co., 290 F.3d 63 (1st Cir. 2002); NBA Properties, Inc. v. Gold, 895 F.2d 30 (1st Cir. 1990): Stress that contempt orders must rest on clear, unambiguous commands ascertainable from the “four corners” of the order; ambiguities are construed in favor of the alleged contemnor.
Chick Kam Choo v. Exxon Corp., 486 U.S. 140 (1988): The leading Supreme Court case on the Anti‑Injunction Act’s relitigation exception; requires that the issues or claims enjoined from state litigation actually have been decided by the prior federal judgment.
Atlantic Coast Line R.R. Co. v. Brotherhood of Locomotive Engineers, 398 U.S. 281 (1970): Warns that federal courts cannot enjoin state court proceedings simply because those proceedings may reach a different conclusion or because the federal court believes the state court should follow its prior judgment.
Fernández‑Vargas v. Pfizer, 522 F.3d 55 (1st Cir. 2008): Describes the relitigation exception as allowing injunctions only after issues have been conclusively resolved in federal court.
Aristud‑González v. Government Development Bank for Puerto Rico, 501 F.3d 24 (1st Cir. 2007): Cautions that, “absent unusual circumstances,” res judicata defenses should be handled in the state forum instead of prompting federal anti‑suit injunctions.
Massachusetts School of Law at Andover, Inc. v. American Bar Association, 142 F.3d 26 (1st Cir. 1998): Discusses how res judicata can bar re‑litigation of claims arising from the same “nucleus of operative facts.”

B. Legal Reasoning and Key Doctrinal Developments

1. Defamation: “Fraudulent Activities” as Defamation Per Se

The First Circuit corrects a critical misstep by the district court in its application of Massachusetts defamation law.

The district court had focused on whether CardConnect in fact changed its behavior toward Orkin after receiving Albert’s email, concluding that because CardConnect continued to deal with Orkin, his reputation had not been damaged and the statement was not defamatory. But under Shay and the Restatement, the relevant question is whether the statement could damage reputation, not whether it did so in a particular instance.

Analyzing the text:

“We have been experiencing fraudulent activities with a Wayne Orkin… This is currently a civil and criminal matter that is being pursued.”

The panel holds:

Describing “fraudulent activities with a [named individual]” is, functionally, an assertion that the person has committed fraud.
Describing it as a “criminal matter” “being pursued” removes any doubt that the email imputes criminal wrongdoing.
Thus, the statement is unambiguously defamatory and specifically imputes crime to Orkin.

This triggers the rule that such accusations are defamatory per se, obviating the need for proof of economic damages. The panel emphasizes that the district court’s attempt to characterize the email as merely stating an “intent to take legal action” is untenable when the email is read as a whole.

However, the court reserves the truth/malice questions for remand. The district court treated the statement as “materially true” because it interpreted it as describing Albert’s intent to pursue legal remedies. That reading no longer holds once the email is recognized as accusing Orkin of criminal fraud. The district court must now:

Determine whether the factual imputation — that Orkin engaged in “fraudulent activities” amounting to criminal conduct — is substantially true; and, if not,
Determine whether Albert acted with at least negligence (or actual malice if necessary under Massachusetts law) and assess non‑economic damages (such as emotional distress and reputational harm).

This development concretely warns business actors: emails to counterparties alleging “fraud” and “criminal matters being pursued” are high‑risk communications that may be actionable as defamation per se, even if they are sent in the midst of a contractual or corporate dispute and even if no immediate business relationship appears to have been lost.

2. Conversion and Compensation: The Role of Implied‑in‑Fact Contracts

a. Conversion, Identifiability, and the Contract–Tort Boundary

The First Circuit draws a careful boundary between:

Conversion claims that are really disguised contract disputes, where Florida requires identification of a specific, segregated fund; and
True tortious misappropriation claims, where no contractual duty between the claimant and alleged converter is at issue.

For the redirected residuals:

The wrong alleged is not that Orkin breached a contract with Boost Web or CardConnect, but that he misdirected funds that CardConnect owed to Boost Web.
The First Circuit holds that where there is no contract between Boost Web and Orkin governing how Orkin may redirect those residuals, the identifiability requirement does not bar a conversion claim — consistent with Bel‑Bel and Zinn.

For the “personal expense” funds:

There is at least a plausible argument that Orkin’s use of Boost Web funds for compensation was governed by an implied agreement between the siblings.
If some portion of the $403,827.91 represents breaching that implied agreement (e.g., taking more than reasonable compensation), the court hints that such excess may be properly characterized as either:
- Contract damages (not necessarily conversion); or
- Potentially conversion, if sufficient identifiability and wrongful dominion are shown.
The panel intentionally leaves this question open for the district court, recognizing that the record is incomplete as to how to parse compensation vs. excess.

b. Implied‑in‑Fact Compensation Agreement

The more consequential doctrinal development is the First Circuit’s use of Florida’s implied‑in‑fact contract doctrine to recognize that Orkin was entitled to some level of compensation, even in the absence of a written employment or partnership agreement.

The court emphasizes:

Orkin “inarguably performed services for Boost Web”: he generated all business, ran all operations, and created the revenue stream.
There was a long course of conduct where:
- Orkin used company funds for personal expenses;
- Boost Web (through Albert) reconciled these expenditures with accountants;
- Tax filings treated these amounts as Orkin’s wages (including W‑2s in prior years); and
- Albert regularly signed tax returns and reconciliations reflecting this treatment, without objection.

Under Florida law, these facts “fairly raise the presumption that the parties understood and intended that compensation was to be paid” — the classic scenario for an implied‑in‑fact contract. The district court’s insistence on “specificity” in terms was misplaced because:

The absence of fully specified terms is inherent in implied‑in‑fact contracts; the law supplies a “reasonable” compensation term.
To deny any compensation would amount to saying that all of Orkin’s uncompensated labor simply produced value for Albert alone — a result the panel finds inequitable and inconsistent with the parties’ actual conduct.

Accordingly:

The district court erred in treating all 2020–2021 personal expenditures as unauthorized conversion.
On remand, the court must:
- Determine a reasonable compensation level for Orkin’s services (likely by reference to prior years’ patterns, market norms, and corporate profits); and
- Only treat any excess over reasonable compensation as potentially wrongful (and then decide whether such excess is properly conversion or contractual overpayment).

This treatment of implied compensation has significant implications for closely held or family‑run corporations that rely on informal arrangements: substantial, long‑term patterns of treating company funds as de facto compensation with the knowledge and participation of the nominal owner can crystallize into enforceable implied compensation rights, limiting later attempts to recharacterize all such payments as “conversion.”

3. Assignment of Residuals and Ownership of Intangible Payment Streams

The dispute over redirected residuals required the First Circuit to interpret the 2014 Consent to Assignment Agreement under Ohio law. The agreement’s text was incomplete and somewhat confusing:

It was captioned as a “Consent to Assignment,” suggesting a separate underlying assignment document; yet it also contained operative language stating that residuals “shall be paid to [Boost Web]” as of a certain effective date.
Attachments listing specific merchant accounts were missing; and the agreement’s language did not clearly address merchant accounts originated after its effective date.

The panel holds that:

Even if the document’s title and certain references created ambiguity, the operative clause labeled “Assignment” and the consistent course of performance (CardConnect paying all residuals to Boost Web; Orkin treating them as Boost Web revenue) establish that a valid assignment took effect.
Any ambiguity regarding whether the assignment applied to new accounts after 2014 is resolved by:
- CardConnect’s conduct (paying all residuals to Boost Web after 2014 without distinction); and
- Orkin’s own testimony and litigation positions acknowledging that the agreement’s purpose was to transfer revenue from PTMS to Boost Web.

The key doctrinal point: where a written agreement is ambiguous or incomplete, Ohio law permits substantial reliance on the parties’ consistent, long‑term course of performance to determine the scope of rights and obligations, including the scope of an assignment of intangible payment rights.

Once the assignment and scope are recognized, the court easily concludes that:

Boost Web had an ownership interest in the residuals;
Orkin had no authority to redirect them for purely personal purposes; and therefore
His redirection to MKY for his own benefit was an “unauthorized act” amounting to conversion.

4. Contempt: The Need for Clear, Unambiguous Orders

Civil contempt is a coercive and remedial sanction, but it requires a foundation of clear, unambiguous court orders. The First Circuit splits Orkin’s alleged contemptuous conduct into two categories:

Interference with CardConnect’s compliance: After the April 11 decision and a subsequent order directing CardConnect to pay funds to Boost Web, Orkin (through counsel) repeatedly told CardConnect:
- The judgment was not final;
- It was “not clear” that CardConnect must disburse funds; and
- CardConnect could face liability if it paid Boost Web while Orkin’s appeal and Florida claims were pending.
This conduct, the First Circuit acknowledges, directly conflicted with the district court’s explicit directive and can properly support a contempt finding.
Prosecution of the Florida action and ownership arguments: The contempt order also rested on:
- Orkin filing and prosecuting the Florida ownership action; and
- Counsel’s suggestions to CardConnect that Orkin might have a claim to some of the residuals as Boost Web’s owner.
The district court justified this on the premise that its April 11 decision had resolved ownership in Albert’s favor. The First Circuit rejects that premise: the April 11 decision did not decide ownership, and thus Orkin was not violating a clear, unambiguous order by litigating ownership in Florida or asserting ownership‑based claims.

Because the contempt order rests partly on conduct that was not clearly forbidden, the First Circuit vacates the order and remands. The district court must reconsider whether contempt is warranted solely on the basis of Orkin’s interference with CardConnect’s compliance and, if so, whether to adjust the sanctions.

This reinforces a practical point: courts must take care that contempt sanctions rest only on violations of clear commands, not on disputed interpretations of what the court “must have meant” in its earlier rulings.

5. Anti‑Injunction Act and the Relitigation Exception

The most significant public‑law component of the opinion concerns the permanent injunction against Orkin’s Florida ownership action.

The Anti‑Injunction Act, 28 U.S.C. § 2283, bars federal courts from enjoining state proceedings except in narrow circumstances, including “to protect or effectuate” federal judgments (the relitigation exception). Under Chick Kam Choo and Atlantic Coast Line, the exception applies only if the specific claims or issues sought to be litigated in state court were previously and actually decided by the federal judgment.

The district court concluded that its April 11 decision had effectively decided:

That Albert, as incorporator and listed director, owned Boost Web; and
That Orkin had no ownership interest.

Using this interpretation, the court enjoined Orkin from relitigating ownership in Florida. The First Circuit disagrees on several fronts:

The April 11 decision contained factual findings about who was listed in corporate filings and who ran operations, but it did not analyze or decide ownership under Florida corporate law.
Ownership of a Florida corporation depends on shareholder status and possibly equitable doctrines (e.g., equitable shareholder claims), and the district court had not undertaken that legal analysis.
The district court’s later characterization of its decision as having resolved ownership was a “post hoc judgment” at odds with what the earlier order actually said and did, contrary to Chick Kam Choo.

Furthermore, the First Circuit cites its own precedent in Aristud‑González to emphasize that res judicata and collateral estoppel ordinarily should be argued as defenses in the state proceeding itself, rather than invoked to justify an anti‑suit injunction, absent “unusual circumstances” — none of which the district court identified here.

The result:

The permanent injunction is vacated as an abuse of discretion.
Orkin may proceed with the Florida action (though, practically, the federal court on remand may itself resolve ownership first, which may then affect or moot the Florida case through ordinary preclusion rules).

Doctrinally, the case reinforces a strict reading of the relitigation exception: federal courts cannot expand prior judgments by implication to justify enjoining related, but not actually decided, issues in state court, especially core corporate law issues like ownership.

C. Likely Impact on Future Cases and Practice

1. Business Defamation in Ongoing Disputes

The defamation holding sends a clear signal:

Accusations of “fraudulent activities” and references to “civil and criminal” proceedings in communications with third‑party business partners are highly likely to be treated as imputations of crime and thus as defamatory per se under Massachusetts law.
Defendants cannot escape liability by arguing that the plaintiff’s commercial relationships did not, in fact, change — the focus is on what the statement could do to reputation in the eyes of a reasonable recipient.

This will likely influence how corporate counsel and executives couch allegations of misconduct in communications with vendors, payment processors, and other business partners, especially when those communications identify specific individuals by name.

2. Compensation and Conversion in Informal or Family‑Run Entities

In many small or family‑run businesses, owners and operators rarely formalize:

Shareholder agreements;
Compensation arrangements; or
Authority to use company funds for mixed personal and business purposes.

Orkin v. Albert underscores that:

Years of conduct in which someone performs all the work, uses company funds as de facto compensation, and is treated that way on tax filings will often give rise to an implied‑in‑fact compensation agreement.
Attempts, after a falling‑out, to characterize all such payments as “unauthorized conversion” may fail, or at least be limited, because the law will infer a right to “reasonable” compensation from the parties’ course of conduct.
Conversely, the operator who unilaterally appropriates dramatically increased amounts for personal use may still be found to have converted the excess over what is reasonable, depending on evidence.

The opinion thus incentivizes:

Formalizing compensation and profit‑sharing agreements early; and
Maintaining clear records segregating business from personal expenditures, especially where one sibling or partner controls operations while another holds title.

3. Assignments of Residual Payment Rights and Course of Performance

For industries reliant on residual or commission‑style payments (e.g., merchant services, insurance, franchising), the First Circuit’s approach clarifies that:

Even if assignment documents are imperfect or poorly titled, long‑term, consistent performance (payments flowing to the assignee; parties acting in accordance with the supposed assignment) strongly supports enforcement of the assignment.
Attempts by a former agent or salesperson to redirect payment streams away from the assignee and back to themselves, without clear authority, are legally risky and may support conversion claims, not just breach of contract claims, especially where third‑party payers are involved.

4. Federal–State Relations and Anti‑Suit Injunctions

The decision reinforces strict limits on the federal judiciary’s power to police parallel state litigation, especially where issues like corporate ownership are more naturally governed by state law:

District courts cannot retroactively “read into” their judgments decisions they did not actually make in order to justify anti‑suit injunctions.
Res judicata arguments generally belong in the state forum, not as the predicate for a federal anti‑suit order, absent clear and unusual circumstances (e.g., vexatious or duplicative litigation specifically aimed at undermining a federal class action or consent decree).

This will have practical significance where:

Federal cases resolve certain tort or contract claims relating to a business, but leave corporate governance or ownership issues unresolved; and
Parties seek to litigate those unresolved governance issues later in state courts, often in the state of incorporation.

V. Complex Concepts Simplified

1. Defamation vs. Defamation Per Se

Defamation is a false statement of fact about a person, published to a third party, that tends to harm the person’s reputation.
Defamation per se refers to certain categories of statements that are treated as inherently harmful. In Massachusetts, accusations that someone committed a crime fall into this category.
For ordinary defamation, a plaintiff must prove that the statement actually caused economic harm (e.g., lost job, lost customers). For defamation per se, the law assumes harm to reputation; the plaintiff need not prove specific economic damages, though non‑economic damages (e.g., emotional distress) may still be contested.

2. Conversion

Conversion is a civil tort (wrong) where someone intentionally exercises control over another’s property as if it were their own, without authorization, depriving the owner of its use.
For money, some jurisdictions require the money to be part of a specific, identifiable fund (e.g., a segregated escrow account), particularly when the claim overlaps with a contract that governs how the money should be handled.
Where there is no contractual relationship and someone simply diverts money they have no right to, courts can be more flexible about the identifiability requirement.

3. Implied‑in‑Fact Contract

An implied‑in‑fact contract is not written down or explicitly spoken, but courts infer it from the parties’ behavior.
Example: If one person repeatedly performs services and the other repeatedly pays for them, both acting as if there is an agreement, a court may find that a contract exists even if there is no formal document.
In this case, Orkin’s years of running Boost Web and taking funds regularly treated on tax returns as his wages, with Albert’s knowledge and acquiescence, support an implied contract that he would be paid a reasonable amount for his work.

4. Internal Affairs Doctrine and Choice of Law

The internal affairs doctrine says that legal issues relating to a corporation’s internal governance (e.g., who owns it, duties of directors and officers) are governed by the law of the state of incorporation.
Because Boost Web is a Florida corporation, Florida law governs its internal corporate disputes (e.g., ownership and conversion claims between insiders), even though litigation occurred in Massachusetts.
By contrast, the defamation claim is governed by Massachusetts law because that is the forum and the parties agreed on that choice.

5. Anti‑Injunction Act and Relitigation Exception

The Anti‑Injunction Act generally prohibits federal courts from stopping state court cases, reflecting respect for state courts and federalism.
The relitigation exception allows a federal court to enjoin a state case only when the state plaintiff is trying to relitigate a claim or issue already finally decided by the federal court.
To apply this exception, the federal court must show that:
- The earlier federal judgment actually decided the precise issue or claim; and
- The party against whom the injunction is sought had a full and fair opportunity to litigate that issue in federal court.
If the earlier judgment merely touched related facts but never decided the legal issue (e.g., corporate ownership), the federal court cannot use the relitigation exception to block a later state suit addressing that issue.

VI. Conclusion: Key Takeaways and Broader Significance

Orkin v. Albert offers a cautionary tale about the legal risks inherent in prolonged, undocumented family business arrangements and the importance of careful judicial adherence to doctrinal limits in defamation, conversion, and anti‑injunction law.

Key takeaways include:

Defamation Per Se: Business emails alleging that someone engaged in “fraudulent activities” subject to a “civil and criminal matter” will likely be treated as per se defamatory in Massachusetts, even absent proof of economic loss. Businesses and counsel must draft such communications with great care.
Implied Compensation Rights: Under Florida law, years of conduct involving payment patterns and tax reporting can create an implied‑in‑fact contract for compensation. Courts will not lightly allow one side to retroactively recharacterize all such payments as theft or conversion.
Conversion vs. Contract: Florida’s specific‑fund requirement is narrow. Where there is no applicable contract, misdirecting another’s money can be conversion even if it arises in a commercial setting, particularly when third‑party payors are involved.
Assignments and Course of Performance: Ambiguities in assignment documents can be resolved by consistent course of performance. Parties ignoring formalities but behaving as if an assignment is in place may find courts enforcing that practical reality against later opportunism.
Anti‑Injunction Limits: Federal courts may not use the relitigation exception to enjoin state proceedings about issues they never actually decided. Res judicata is generally for state courts to apply.
Centrality of Ownership: The First Circuit stresses that the foundational question of who owns the corporation should be resolved early, as it deeply affects the analysis of compensation, conversion, and entitlement to corporate assets. The court all but directs the district court to resolve Boost Web’s ownership on remand and warns that leaving Orkin with neither wages nor ownership benefits would be untenable on this record.

Ultimately, the case highlights the tension between formal corporate law and informal family practice. The First Circuit’s nuanced approach insists that the law must be grounded both in doctrinal clarity (e.g., on defamation and Anti‑Injunction limits) and in equitable recognition of how people actually behave in long‑standing business relationships. Going forward, Orkin v. Albert will likely be cited:

In Massachusetts defamation cases involving accusations of crime in business contexts;
In Florida cases dealing with conversion claims amidst informal compensation practices in closely held enterprises; and
In federal appellate decisions constraining the use of the Anti‑Injunction Act’s relitigation exception where ownership and internal corporate disputes remain unresolved.

For practitioners, the message is clear: where family and business intertwine, document ownership and compensation early, avoid reckless accusations of criminality, and respect the limits of federal power over parallel state litigation.