author: THOMPSON, Circuit Judge.

text:
    Gregory P. TURNER, Plaintiff, Appellant, v. HUBBARD SYSTEMS, INC., f/k/a Jim Hubbard and Associates, Inc., Defendant, Appellee.
    No. 16-1387
    United States Court of Appeals, First Circuit.
    April 19, 2017

      Gregory P. Turner, Seattle, WA, on brief for appellant.
    Bethany P. Minich, Daniella Massimilla, and Litchfield Cavo LLP, Lynnfield, MA, on brief for appellee.
    Before TORRUELLA, THOMPSON, KAYATTA, Circuit Judges.
   THOMPSON, Circuit Judge.

The relevant facts in this case are few. Appellant Gregory Turner is a sole practitioner whose Massachusetts law practice is focused on recovering delinquent accounts. Appellee Hubbard Systems, Inc. (“HSI”) is a Delaware software corporation that develops, markets, and sells a debt collection software program titled “Collection Partner.” In December 1992, Turner entered into a rent-to-own agreement with HSI in which he was granted a temporary rental license for the use of Collection Partner. After making some initial payments and a deposit, Turner was to make monthly payments until he paid off the remaining balance for the software, at which time he would be given a permanent license. Turner made the final installment payment sometime in 1996, and the parties agree that thereafter Turner owned a permanent license to the software.

HSI also provides monthly software maintenance services. Turner’s rent-to-own agreement made clear that maintenance service fees would be charged every month and that such fees were “separate and apart from the monthly software license fee rental payment[s]” that Turner was required to make in order to gain a permanent license to the software.

In late April 2011, HSI sent Turner a new license key to reflect an update in the software. That license expired on May 31, 2011. On June 1, 2011 Turner informed HSI that his Collection Partner software was not working. Before noon that same day, HSI sent Turner a new license key that permitted him access to the software. Turner’s license and access to the Collection Partner software has remained uninterrupted since the new license key was sent on June 1, 2011.

The following year, Turner filed suit alleging that HSI violated the Computer Fraud and Abuse Act (“CFAA” or “the Act”) when it issued a license key that expired on May 31, 2011, despite the fact that he owned a permanent license to the Collection Partner software. Turner also alleged state law claims of conversion, intentional (or negligent) infliction of emotional distress, and unfair and deceptive practices in violation of Massachusetts General Laws Chapter 93A. The district court accepted and adopted the magistrate judge’s report and recommendation, granted HSI’s motion for summary judgment, and denied Turner’s motion to strike portions of HSI’s motion as “beyond the scope of the pleadings.” In addition to objecting to the magistrate judge’s report, Turner also filed motions to supplement the record, certify legal questions to the Massachusetts Supreme Judicial Court, and appeal one of the magistrate judge’s management orders before the district court judge. The district court judge denied all these additional motions in their entirety.

Turner appeals the district court’s order adopting the magistrate judge’s report and recommendation, denying Turner’s motion to strike, and granting HSI’s motion for summary judgment.

Discussion

“We review a district court’s grant of summary judgment de novo,” viewing the facts in the light most favorable to the nonmovant. Burke v. Town of Walpole, 405 F.3d 66, 75 (1st Cir. 2005) (citing Valente v. Wallace, 332 F.3d 30, 32 (1st Cir. 2003)). “We review the denial of [a motion to strike a motion for summary judgment] for abuse of discretion.” FDIC v. Kooyomjian, 220 F.3d 10, 16 (1st Cir. 2000); see also Dodi v. Putnam Cos., 94 F.3d 640, at *2 (1st Cir. 1996) (‘We review the district court’s decision to strike for abuse of discretion.”).

A brief review of the relevant statutory framework may prove helpful here. Congress enacted the CFAA in 1984 to address the problems of computer crime and hacking. Pub. L. No. 98-473, 98 Stat. 2190; see also WEC Carolina Energy Sols. LLC v. Miller, 687 F.3d 199, 201 (4th Cir. 2012). Originally a criminal statute, in 1986 the Act was expanded to include a civil action component as well. Pub. L. No. 99-474, 100 Stat. 1213 (codified as amended at 18 U.S.C. § 1030); Miller, 687 F.3d at 201. Under the civil action provision, “[a]ny person who suffers damage or loss by reason of a violation of [18 U.S.C. § 1030] may maintain a civil action against the violator to obtain compensatory damages and injunctive relief or other equitable relief.” 18 U.S.C. § 1030(g). The term “damage” is defined as “any impairment to the integrity or availability of data, a program, a system, or information” and the term “loss” is defined as “any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service.” 18 U.S.C. § 1030(e)(8), (11). The phrase “compensatory damages” is not explicitly defined in the statute.

We, however, have held that not any damage or loss is compensable. Ef Cultural Travel BV v. Explorica, Inc., 274 F.3d 577, 585 (1st Cir. 2001) (“We do not hold, however, that any loss is compensa-ble.- The CFAA provides recovery for ‘damage’ only if it results in a loss of at least $5,000. We agree with the court in In re Doubleclick Inc. Privacy Litigation, 154 F.Supp.2d 497 (S.D.N.Y. 2001), that Congress could not have intended other types of loss to support recovery unless that threshold were met. Indeed, the Senate Report explicitly states that ‘if the loss to the victim meets the required monetary threshold,’ the victim is entitled to relief under the CFAA. S. Rep. 104-357, at 11. We therefore conclude that expenses of at least $5,000 resulting from a party’s intrusion are ‘losses’ for purposes of the ‘damage or loss’ requirement of the CFAA.”).

Turner asserts that HSI violated § 1030(a)(5)(A) of the CFAA. Under § 1030(a)(5)(A), a person violates the CFAA by “knowingly causing] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally causing] damage without authorization, to a protected computer.” 18 U.S.C. § 1030(a)(5)(A). Maintenance of a civil action under 18 U.S.C. § 1030(a)(5)(A) also requires one of the five factors outlined in § 1030(c)(4)(A)(i)(I)-(V): namely,

(I) loss to 1 or more persons during any 1-year period ... aggregating at least $ 5,000 in value;
(II) the modification or impairment, or potential modification or impairment, of the medical examination, diagnosis, treatment, or care of 1 or more individuals;
(III) physical injury to any person;
(IV) a threat to public health or safety; [or]
(V) damage affecting a computer used by or for an entity of the United States Government in furtherance of the administration of justice, national defense, or national security.

(emphasis added); see also 18 U.S.C. § 1030(c)(4)(B)(i), (g) (“A civil action for a violation of [18 U.S.C. § 1030] may be brought only if the conduct involves 1 of the factors set forth in subclauses [sub-clause] (I), (II), (III), (IV), or (V) of subsection (e)(4)(A)(i).”).

Here, the parties agree that the only possible basis for Turner’s civil action is found under § 1030(c) (4) (A) (i) (I), which is limited to economic damages and requires a loss of at least $5,000. 18 U.S.C. § 1030(g) (“Damages for a violation involving only conduct described in subsection (c) (4) (A) (i) (I) are limited to economic damages.”). HSI argues that Turner fails to meet this $5,000 requirement. Turner appears to argue that he meets the $5,000 requirement because he suffered prospective damages amounting to at least his “prospective annual income of $150,000.00.” Turner argues further that while his “damages may be limited by admissible evidence of intervening factors such as where a plaintiff mitigates his damages,” HSI is barred from arguing that he failed to meet the $5,000 requirement because “HSI had not pled that as a result of mitigation Turner could not meet the statutory threshold of $5,000.00.” Unfortunately for Turner, he erroneously confuses his failure to meet a statutory requirement with the affirmative defense of mitigation.

On appeal, Turner presents no evidence that he has in fact suffered losses in the amount of $5,000. As the district court noted, the only plausible damages identified by Turner (his expenses and lost income for the hours when the system was down on June 1, 2011 and any fees he paid HSI for amounts owed for maintenance service fees) do not reach the $5,000 threshold and therefore foreclose his CFAA claims. Turner attempts to bypass this fatal defect by claiming that he is entitled to damages he would have suffered if his access to the Collection Partner software had never been restored. As the district court noted, however, Turner’s assertions are “counterfactual and thus absurd.”

Because the CFAA contains no definition of the phrase “compensatory damages” we assume that the “plain and ordinary meaning” of the term applies. Yershov v. Gannett Satellite Info. Network, Inc., 820 F.3d 482, 487 (1st Cir. 2016). Consequently, compensatory damages are “[djamages sufficient in amount to indemnify the injured person for the loss suffered” or “actual damages.” Black’s Law Dictionary (10th ed. 2014). “Actual damages” is further defined as “[a]n amount awarded to a complainant to compensate for a proven injury or loss; damages that repay actual losses.” Id. Prospective damages are “[f]uture damages that, based on the facts pleaded and proved by the plaintiff, can reasonably be expected to occur.” Id.

Even if we assume that the CFAA provided for prospective damages as a form of compensatory damages, such damages would not be measured by hypothetical losses based on counterfactual assertions, but only by losses that reasonably could be expected and proven. Turner has not, and cannot, demonstrate reasonably expected damages amounting to $5,000. In fact, the record demonstrates that Turner’s access to the Collection Partner software was restored after only a few hours and his access has remained uninterrupted since its restoration. Turner persists on appeal that he is entitled to all damages he would have experienced if he was never given a new license key on June 1, 2011 and his access to the Collection Partner software was never restored. Unfortunately for Turner, prospective damages do not encompass what he would have lost had the facts been different. And Turner has not demonstrated how a brief lapse in access to the Collection Partner software could reasonably be expected to result in damages totaling his yearly salary or any other imaginary damages he has dreamed up.

Lastly, Turner moved to strike HSI’s motion for summary judgment and certain supporting documents, arguing that the motion was “based on two unpled affirmative defenses: mitigation and mistake” that were “outside the scope of the pleadings.” The district court correctly dismissed these arguments for the same reasons discussed above — a $5,000 threshold requirement for Turner’s CFAA claim is not synonymous with an affirmative defense. Accordingly, the district court did not abuse its discretion in denying Turner’s motion to strike. Any reference by HSI to Turner’s failure to meet the $5,000 requirement was not barred — Turner was required to demonstrate that he met the $5,000 damages threshold regardless of the affirmative defenses asserted by HSI.

Without a federal claim to stand on, in a last-ditch effort to restore his state law claims of conversion, intentional (or negligent) infliction of emotional distress, and unfair and deceptive business practices in violation of Massachusetts General Laws Chapter 93A, Turner argues that these state law claims satisfy the requirements for diversity jurisdiction and were thus properly before the district court. The district court found that while the parties were indisputably diverse, Turner failed to establish the necessary $75,000 amount in controversy. See 28 U.S.C. § 1332. Turner points us to no evidence that he meets the amount in controversy necessary to sustain federal jurisdiction — therefore, the district court correctly dismissed those claims. CE Design Ltd. v. Am. Econ. Ins. Co., 755 F.3d 39, 43 (1st Cir. 2014) (“The burden is on the federal plaintiff to establish that the minimum amount in controversy has been met.” (citing Abdel-Aleem v. OPK Biotech LLC, 665 F.3d 38, 41 (1st Cir. 2012))).

Conclusion

For the foregoing reasons, we affirm the district court’s grant of HSI’s motion for summary judgment and denial of Turner’s motion to strike.

      . Turner argues that HSI sent him the April license key set to expire at the end of May 2011 in an attempt to collect on his late maintenance fees. HSI argues that the failure to update Turner’s license key was "[d]ue to administrative oversight or error” and that it "never intended for the license key that was sent to [Turner] to expire.” These arguments are of no consequence to our analysis in this case.

      . Although Turner also appeals the district court's refusal to consider evidence that was not part of the summary judgment record, the lack of developed argumentation in his brief renders this basis for appeal waived. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).

      . Turner’s complaint does not make clear which provision of the CFAA he is alleging that HSI violated. However, in his memorandum before the magistrate judge opposing HSI’s motion for summary judgment, he argued that HSI violated 18 U.S.C. § 1030(a)(5)(A).

      . Turner never disputed the defendant’s calculation of his business expenses and presented no alternative calculation either before the district court or here on appeal that he suffered any losses1 other than those identified above.


source: Caselaw Access Project

author: KAYATTA, Circuit Judge.

license: Public Domain

text:
    Peter CAMERANO, Personal Representative of the Estate of Patrick Camerano, Plaintiff, Appellant, v. UNITED STATES of America, Defendant, Appellee.
    No. 16-2025
    United States Court of Appeals, First Circuit.
    April 19, 2017

      Daniel C. Federico and Shames & McEachern, PA, Portsmouth, NH, on brief for appellant.
    Rayford A. Farquhar, Assistant United States Attorney, and Carmen M. Ortiz, United States Attorney, on brief for appel-lee.
    Before TORRUELLA, SELYA, KAYATTA, Circuit Judges.
   KAYATTA, Circuit Judge.

Plaintiff is the son of the late Patrick Camerano and the personal representative of Patrick’s estate. This lawsuit arises out of Patrick’s death, which resulted from a fall he suffered while on a “respite/nursing stay” at a facility operated by East Boston Neighborhood Health Center (“EBNHC”) at 26 Sturgis Street in Winthrop, Massachusetts.

The underlying facts of this case are detailed in the district court’s published opinion. See Camerano v. United States, 196 F.Supp.3d 172, 175-76 (D. Mass. 2016). In summary, the chronology of relevant events is as follows:

• February 24, 2012: When Patrick’s second son, Paul — who lived in the same apartment building as Patrick— has to travel to Florida, EBNHC arranges for Patrick to stay temporarily at its Winthrop facility.
• February 26, 2012: At approximately three o’clock in the morning, Patrick suffers a fall in the hallway of the Winthrop facility. No witnesses observe Patrick’s fall.
• February 27, 2012: Patrick begins to display signs of distress and is hospitalized at Boston Medical Center.
• February 28, 2012: Plaintiff receives a phone call from an EBNHC nurse, who advises him that Patrick has been involved in an accident and sent to the hospital. Upon further inquiry, the nurse tells plaintiff that Patrick has fallen, but that she is “not totally sure.”
• February 29, 2012: Patrick is moved to hospice care.
• March 1, 2012: Patrick passes away.
• May 27, 2012: The Commonwealth of Massachusetts issues Patrick’s death certificate. The document specifies that he died due to a “subdural hemorrhage” that resulted from an “unwit-nessed fall” at a “respite facility” located at “26 Sturgis Street, Winthrop, MA.”
• June 2012: Plaintiff requests Patrick’s medical records from EBNHC, and receives some, but not all, records. (He says now that he made this request because he did “not know[] where [his] father was when he was injured.”)
• August 29, 2012: Plaintiff files a voluntary administration statement with the Massachusetts Probate and Family Court. The form lists as an asset a “[wjrongful death action regarding [a] nursing home facility.”
• October 29, 2012: Plaintiff and his attorney obtain an additional set of Patrick’s medical records. (Plaintiffs brief alleges that “the location and the proximate cause of the injury ... were not reasonably discoverable until” he received these records.)
• March 5, 2014: Plaintiffs attorney sends a letter to EBNHC, stating plaintiffs “inten[tion] to file a claim for damages.”
• May 15, 2014: Plaintiffs attorney sends a letter styled as a “Claim” to the United States Department of Health and Human Services (“HHS”), alleging state common law and federal statutory violations and seeking unspecified damages.
• July 16, 2014: Plaintiffs attorney submits a standard claim form to HHS, seeking $1,700,000 in damages for Patrick’s alleged wrongful death.

As the district court noted in granting summary judgment to the government, the problem for plaintiff is that he has not submitted any evidence disputing that EBNHC is a federal entity under the purview of the United States Public Health Service. As such, plaintiffs tort claims against EBNHC are considered tort claims against the United States, see 42 U.S.C. § 233(g), and any “tort claim against the United States shall be forever barred unless it is presented in writing to the appropriate Federal agency within two years after such claim accrues,” 28 U.S.C. § 2401(b). As the chronology reflects, plaintiff did not file his administrative complaint with HHS until more than two years after learning that his father had suffered a fatal injury caused by an unwitnessed fall.

Plaintiff argues nevertheless that his claim did not accrue until October 29, 2012, when his newly retained counsel was able to ascertain “the name of the respite/nursing home where his late father’s accident happened.” Alternatively, he argues that the two-year limitations period should be equitably tolled until that date because of the government’s alleged fraudulent concealment of “the location and possible causes of the accidental fall.”

The district court’s opinion cogently explains why these arguments fail. See Camerano, 196 F.Supp.3d at 177-81. We affirm largely on the basis of that explanation. In brief, there is no evidence that EBNHC deliberately concealed any material facts that were needed to put plaintiff on notice of the fact and cause of his father’s injury. See Callahan v. United States, 426 F.3d 444, 454 (1st Cir. 2005). Further, no reasonable jury could find that plaintiff did not know enough about his father’s injury at least to investigate further by March 1, 2012 — and certainly by May 27, 2012, when the death certificate was issued. See Sanchez v. United States, 740 F.3d 47, 52 (1st Cir. 2014). And given that plaintiff has not submitted any evidence disputing that this case involves employees of the United States Public Health Service acting within the scope of their employment, 42 U.S.C. § 1983 does not provide a remedy for plaintiffs alleged injuries even if, as plaintiff argues, those employees violated the Nursing Home Reform Act, 42 U.S.C. §§ 1396r-1396r-8. See id. § 233(g) (establishing the “[exclusivity” of the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680, as a remedy for actions such as this one); McCloskey v. Mueller, 446 F.3d 262, 271 (1st Cir. 2006) (“[T]o plead a viable section 1983 claim, a complaint must allege action under color of state law.” (emphasis added)); see also Casey v. Dep’t of Health & Human Servs., 807 F.3d 395, 400-01 (1st Cir. 2015) (noting that “the federal analog to § 1983 suits against state officials,” M. at 398 n.1, is available to redress only a “limited” range of constitutional violations).

We add only the following comments in response to several points that plaintiff emphasizes in his brief. First, plaintiffs argument that the running of the limitations period should be deemed to have been stayed until he retained counsel has no support in the law. Certainly, we do not expect a layperson to know what statutes of limitations apply. And in most cases some portion of the relevant limitations period will run before counsel is retained. That is likely one reason why such periods are not shorter. Any counsel competent to handle a malpractice claim against a nursing or health care facility presumably knows that various statutes of limitations exist, and that the correct one need be identified if not already known. See Sanchez, 740 F.3d at 54-56. If plaintiffs own lawyer did not tell him about the two-year limitations period applicable here, then that may well provide plaintiff with cause to complain. The proper object of such a complaint, however, would be counsel, not EBNHC or the federal government.

Second, plaintiffs statement in his affidavit that records produced by the hospital in June of 2012 were incomplete fails to get him anywhere because he offers no explanation as to how the incompleteness prejudiced him in any material way. Plaintiff alleges no facts making it plausible that the hospital lulled him into thinking that he had no viable claim. To the contrary, after receiving the records, plaintiff executed an estate-administration form that listed the “wrongful death action regarding [a] nursing home facility” as an asset of the estate. He claims that the records that EBNHC provided him prior to October 29, 2012, did not reveal the name of the relevant facility. But he already knew the address from the death certificate. That he also fails to allege that he ever asked about the name of the facility erects yet another impediment to any plausible contention that EBNHC, by its silence, misled him about the location at which his father was injured.

We also decline to find that the district court committed procedural error in granting summary judgment to the government. Contrary to plaintiffs assertions otherwise, the government’s memorandum in support of its motion to dismiss contains a section entitled “Introduction and Undisputed Facts,” which cites plaintiffs own complaints as well as various attached exhibits. Nor do we find error in the district court’s finding that the address of “26 Sturgis Street, Winthrop, MA” was “EBNHC’s address.” The district court was not saying that plaintiff knew that fact. Rather, the district court was correctly saying that, armed with the death certificate, plaintiff could have “readily” ascertained the location at which his father’s injury occurred. See Gonzalez v. United States, 284 F.3d 281, 289 (1st Cir. 2002) (noting that the existence of a possible claim was not “inherently incapable of detection ... through the exercise of reasonable diligence”).

Finally, plaintiffs claim that he was entitled to prejudgment discovery is defeated by his acquiescence to the district court’s conversion of the government’s motion to dismiss into a motion for summary judgment. See Fed. R. Civ. P. 12(d). Nor did plaintiff claim in the district court that he lacked the opportunity to rebut the government’s timeliness argument in his opposition memorandum. The key issues, after all, were what plaintiff knew and when he knew it. Thus, we cannot say that plaintiff did not have “reasonable opportunity to present all material made pertinent to such a motion” or that conversion was otherwise a “surprise” or “unfair.” See Giragosian v. Ryan, 547 F.3d 59, 65 (1st Cir. 2008).

To be sure, it is unfortunate when a potentially important claim is lost because a deadline is missed. However, that is the necessary result of the statutory limitations periods that our elected representatives have seen fit to enact, without which there would be no repose and claims might be filed long after the ability to recreate what happened has much diminished. Plaintiff is a layperson who suspected that he might have a valid claim arising out of his father’s death. Based on what he knew, the law anticipates that he would do what he did in fact do: promptly consult a lawyer. Plaintiffs knowledge of his father’s injury, combined with what his lawyer should have known about how to investigate and preserve any potential claims arising from that injury, left him well able to file the appropriate claim form with HHS within the two-year limitations period established by Congress. That he did not do so is not the fault of EBNHC or the government.

For the foregoing reasons, we affirm.

      . Both plaintiff's original complaint and his amended complaint specify July 16, 2014, as the operative filing date, presumably because he submitted the relevant claim form to HHS on or around this date, and because his earlier filings failed to provide sufficient notice to HHS, see Holloway v. United States, 845 F.3d 487, 489 (1st Cir. 2017) (citing 28 C.F.R. § 14.2(a)). On appeal, plaintiff does not argue that we should consider any date other than July 16, 2014, as the operative filing date.

      . The district court’s correct dismissal of plaintiff's § 1983 claim thus moots the question of whether plaintiff should have been granted leave to add another defendant to that claim.


author: SELYA, Circuit Judge.

text:
    IN RE Joseph M. CURRAN, Debtor. Carolyn Privitera, Plaintiff, Appellant, v. Joseph M. Curran, Defendant, Appellee.
    No. 16-9006
    United States Court of Appeals, First Circuit.
    April 20, 2017

      Paul W. Hughes, with whom Michael B. Kimberly, Karianne Jones, Mayer Brown LLP, Washington, DC, William C. Parks, and Parks Law Offices were on brief, for appellant.
    Louis S. Haskell, with whom Joy D. Hotchkiss and Law Office of Louis S. Has-kell, Lowell, MA, were on brief, for appel-lee.
    Before HOWARD, Chief Judge, SELYA and LYNCH, Circuit Judges.
   SELYA, Circuit Judge.

In this bankruptcy appeal, the parties ask us to resolve an issue that has divided our sister circuits: whether the phrase “statement ... respecting the debtor’s ... financial condition,” as used in 11 U.S.C. § 523(a)(2)(B), should be interpreted narrowly to refer only to those documents that speak directly to the debt- or’s overall financial condition or broadly to include those documents that merely reference a single asset or liability. Compare, e.g., Bandi v. Becnel (In re Bandi), 683 F.3d 671, 676 (5th Cir. 2012), and Cadwell v. Joelson (In re Joelson), 427 F.3d 700, 714 (10th Cir. 2005) (employing narrow approach), with Appling v. Lamar, Archer & Cofrin, LLP (In re Appling), 848 F.3d 953, 960 (11th Cir. 2017) and Engler v. Van Steinburg (In re Van Steinburg), 744 F.2d 1060, 1061 (4th Cir. 1984) (employing broad approach). But courts should not rush to decide unsettled issues when the exigencies of a particular case do not require such definitive measures. Here, we see no need to enter onto terra incognita but, rather, decide the case on less controversial principles of pleading and materiality. When all is said and done, we affirm.

I. BACKGROUND

We begin with a brief description of the legal foundation on which this case rests. Chapter 7 liquidation proceedings enable an individual debtor to gain a “fresh start” by granting him a discharge that releases him from almost all debt previously incurred. Grogan v. Garner, 498 U.S. 279, 283, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991); Harrington v. Simmons (In re Simmons), 810 F.3d 852, 855 (1st Cir. 2016). Such a discharge is available, though, only to the “honest but unfortunate debtor.” Premier Capital, LLC v. Crawford (In re Crawford), 841 F.3d 1, 7 (1st Cir. 2016) (quoting Grogan, 498 U.S. at 286-87, 111 S.Ct. 654). To this end, the bankruptcy code exempts some debts— especially those rooted in fraud and deceit—from discharge. See 11 U.S.C. § 523(a). These exemptions are construed stringently and creditors must show that a debt “comes squarely” within a particular exemption. McCrory v. Spigel (In re Spigel), 260 F.3d 27, 32 (1st Cir. 2001).

This case, which deals with a creditor’s attempt to avail herself of two such exemptions, was resolved on what amounts to a motion for judgment on the pleadings. Accordingly, we rehearse the facts as they appear in the plaintiffs complaint (and the documents incorporated by reference therein) and draw all reasonable inferences in the plaintiffs favor. See Shay v. Walters, 702 F.3d 76, 78 (1st Cir. 2012).

In November of 2007, the debtor, Joseph M. Curran, and the plaintiff, Carolyn Privitera, were romantically involved. In need of funds, the debtor turned to the plaintiff, who promised to loan him $30,000. During negotiations, the plaintiff (represented by counsel) asked the unrepresented debtor to draw up a list of his property. In response, the debtor gave her a list of property (the List), comprising property “belonging” to him “either by title or by physical possession” and used in his landscaping business. The plaintiffs attorney made only minor changes to the List before converting it into what he unilaterally styled as a “List of Collateral.” The attorney then prepared a loan agreement (the Agreement) and attached the List as an exhibit.

The List included sixteen different landscaping-related items ranging from a variety of clippers and trimmers to two trucks. The purchase price of each item was listed beside the item in a column labeled “cost.” Excluding the trucks, the total cost of the remaining items was slightly over $22,000. With the trucks, the total cost of all the items ballooned to more than $86,000. Unbeknownst to the plaintiff, the debtor was still making installment payments on at least one of the trucks and that truck remained titled to the lender.

Article II of the Agreement specified that the debtor would execute and deliver a security agreement and financing statements “covering” the property included in the List. It further provided that the debt- or would record and file all documents necessary to “perfect and protect” the plaintiffs security interest. To ensure this protection, Article II empowered the plaintiff to sign and file financing statements on the debtor’s behalf.

The Agreement was executed in November of 2007, and the plaintiff transferred $30,000 to the debtor’s bank account. Even so, no security agreement or financing statement was presented, and neither the plaintiff nor the debtor took any steps to perfect the plaintiffs security interest in the property. The loan proved to be a poor investment: the debtor repaid less than $5,000 before defaulting in 2012.

The plaintiff sued the debtor in a Massachusetts state court and, in March of 2014, secured a default judgment in the amount of $137,030.78 (a sum that included damages, interest, and costs). Later that year, the debtor — without making any payment on the judgment — filed for Chapter 7 bankruptcy protection. See 11 U.S.C. §§ 701-784.

In due course, the plaintiff commenced an adversary proceeding in the bankruptcy court seeking an order declaring the debt non-dischargeable. She claimed that the List was a false statement submitted to induce her to make the loan, thus bringing the debt within the purview of 11 U.S.C. § 523(a)(2)(B), which renders non-dis-chargeable debts obtained through “use of a statement in writing — (i) that is materially false; (ii) respecting the debtor’s ... financial condition; (iii) on which the creditor ... reasonably relied; and (iv) that the debtor ... published with intent to deceive.”

The debtor answered the complaint and then moved to dismiss for failure to state a claim. The plaintiff not only opposed this motion but also moved to amend her complaint to include an alternative claim that the debt was non-dischargeable under section 523(a)(2)(A). That section exempts from discharge debts obtained through “false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s ... financial condition.” 11 U.S.C. § 523(a)(2)(A); see Field v. Mans, 516 U.S. 59, 64-69, 116 S.Ct. 437, 133 L.Ed.2d 351 (1995) (comparing section 523(a)(2)(A) and section 523(a)(2)(B) claims).

After a hearing, the bankruptcy court granted the debtor’s motion to dismiss. In a bench decision, the court concluded that, with respect to the section 523(a)(2)(B) claim, the plaintiffs failure to perfect any security interest in the debtor’s property rendered her reliance on the List unjustifiable. At the same time, the court denied the plaintiffs motion to amend as futile, noting that the proposed amended complaint did not allege that the debtor had made any affirmative misrepresentations and that the plaintiffs failure to perfect “would be fatal, in any case.”

The plaintiff took a first-tier appeal to the Bankruptcy Appellate Panel for the First Circuit (the BAP). Because the debt- or had answered the complaint before moving to dismiss, the BAP construed his motion as a motion for judgment on the pleadings. See Fed. R. Bankr. P. 7012(b) (incorporating Federal Rule of Civil Procedure 12); Fed. R. Civ. P. 12(b) (stating that a motion to dismiss for failure to state a claim must be filed before a responsive pleading). It proceeded to hold that the List was not a “statement ... respecting the debtor’s ... financial condition” within the meaning of section 523(a)(2)(B) and that, even if it was, the plaintiff did not plead sufficient facts to show that the List was materially false. See Privitera v. Curran (In re Curran), 554 B.R. 272, 282-83 (1st Cir .BAP 2016). At the same time, the BAP affirmed the denial of the plaintiffs motion to amend. See id. at 287. This timely second-tier appeal followed.

II. ANALYSIS

In this circuit, appeals in bankruptcy cases proceed through a two-tiered framework. See In re Simmons, 810 F.3d at 856. A party who loses in the bankruptcy court has a choice: he may take his initial appeal either to the district court or to the BAP. See 28 U.S.C. § 158(a), (b). The court of appeals offers a second tier of appellate review. See id. § 158(d)(1). We afford no particular deference to decisions of the first-tier appellate tribunal (be it the district court or the BAP) and focus instead on the bankruptcy court’s decision. See Wheeling & Lake Erie Ry. Co. v. Reach (In re Montreal, Me. & Atl. Ry., Ltd.), 799 F.3d 1, 5 (1st Cir. 2015).

Here, the plaintiffs challenge is twofold. First, she asserts that the bankruptcy court erred when it dismissed her complaint. Second, she asserts that the bankruptcy court compounded this initial error by refusing to allow her to add a section 523(a)(2)(A) claim to her complaint. We address these assertions sequentially.

In litigating adversary proceedings in bankruptcy, the standards embedded in Federal Rule of Civil Procedure 12 apply. See Fed. R. Bankr. P. 7012; see also Rok Builders, LLC v. 2010-1 SFG Venture LLC (In re Moultonborough Hotel Grp., LLC), 726 F.3d 1, 4 (1st Cir. 2013) (explaining that “[t]he legal standards traditionally applicable to ... motions to dismiss apply without change in bankruptcy proceedings”). The bankruptcy court and the BAP expressed divergent views about whether the debtor’s motion should be treated as a motion to dismiss or a motion for judgment on the pleadings. Here, however, those divergent views do not matter: when — as in this instance — a motion for judgment on the pleadings serves “as a vehicle to test the plausibility of a complaint,” it is treated like a motion to dismiss under Rule 12(b)(6). Shay, 702 F.3d at 82 (quoting Grajales v. P.R. Ports Auth., 682 F.3d 40, 44 (1st Cir. 2012)). Regardless of the label, we review the bankruptcy court’s dismissal of the complaint de novo, accepting all well-pleaded facts as true and drawing all reasonable inferences in the pleader’s favor. See id. at 79.

In order to survive dismissal, a complaint need not set forth “detailed factual allegations,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), but it must “contain sufficient factual matter ... to state a claim to relief that is plausible on its face,” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted). If the facts articulated in the complaint are “too meager, vague, or con-clusory to remove the possibility of relief from the realm of mere conjecture,” the complaint is vulnerable to a motion to dismiss. SEC v. Tambone, 597 F.3d 436, 442 (1st Cir. 2010) (en banc).

This sort of plausibility review requires courts to undertake a two-step pavane. See Shay, 702 F.3d at 82. First, the court must set aside the complaint’s conclusory averments. See id. Second, it must evaluate whether the remaining factual content supports a “reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Grajales, 682 F.3d at 45); see Banco Santander de P.R. v. Lopez-Stubbe (In re Colonial Mortg. Bankers Corp.), 324 F.3d 12, 15 (1st Cir. 2003) (similar). In conducting this tamisage, the court “need not give weight to bare conclusions, unembellished by pertinent facts.” Shay, 702 F.3d at 82-83.

Much of the briefing in this case focuses on whether the List is a statement respecting the debtor’s financial condition. Here, though, that issue need not be resolved because — even if we assume, for argument’s sake, that the List constitutes a statement of financial condition — the judgment below must be affirmed. The critical datum is that the plaintiff has failed plausibly to allege that the List was materially false. We explain briefly.

Material falsity is an element of a claim under section 523(a)(2)(B). See 11 U.S.C. § 523(a)(2)(B)(i); Abramov v. Movshovich (In re Movshovich), 521 B.R. 42, 61 (Bankr. D. Mass. 2014). To make out a claim that a statement is materially false within the purview of section 523(a)(2)(B), a plaintiff must plausibly allege that the statement misrepresented the kind of information that “would normally affect the decision to grant credit” and thus portrayed a substantially untruthful picture of the debtor’s financial condition. Bethpage Fed. Credit Union v. Furio (In re Furio), 77 F.3d 622, 625 (2d Cir. 1996) (citation omitted); see In re Movshovich, 521 B.R. at 61. A statement may be rendered materially false either by an affirmative misrepresentation, see, e.g., In re Movshovich, 521 B.R. at 62, or by omission, see, e.g., Leominster Hous. Auth. v. Dunbar (In re Dunbar), 474 B.R. 14, 21 (Bankr. D. Mass. 2012). To sink to the level of a misstatement by omission, the party privy to the omitted information must have been obligated to furnish it. See hL (collecting cases).

Viewed against this backdrop, the plaintiffs complaint needed plausibly to plead either that the debtor affirmatively misrepresented the status of the items enumerated in the List or that he omitted information he was obligated to furnish. In this case, the complaint does not identify any affirmative misrepresentations. Instead, it alleges only that the plaintiff expected the debtor to supply a list of property “belonging to [him], either by title or by physical possession.” In response, the debtor gave her exactly what she had requested: a list of items that he either owned or possessed. He added the cost (that is, the purchase price) of each of the items. The plaintiff does not claim that the substance of the List was in any way untrue, nor does she claim that the debtor made any affirmative misrepresentations about the nature of his interest in the enumerated items.

Stripped to its essence, then, the plaintiffs case rests on a claim that it is what the debtor did not say that created a materially false impression. She points specifically to his failure to disclose that at least one of the trucks was encumbered. But a failure to speak becomes a misrepresentation by omission only if the context requires the debtor to speak (that is, to provide the missing information). See id. Here, however, the complaint contains no facts indicating that the debtor was obliged to tell the plaintiff that the trucks were encumbered.

To begin, the plaintiff does not assert that the debtor agreed to identify only unencumbered property when compiling the List. As we already have explained, her complaint relates that she asked him to prepare a list of property that he either owned or possessed. Including encumbered property on the List was entirely consistent with her request.

Moreover, when the debtor signed the Agreement, he vouchsafed only that he would not further encumber the enumerated items. In this respect, the Agreement states that the debtor would not “create, incur, assume, or suffer to exist” any encumbrances “upon the use of [his] property or assets.” Giving these terms their natural meaning, they refer only to future encumbrances, not to preexisting ones. See LifeWise Master Funding v. Telebank, 374 F.3d 917, 920 & n.4 (10th Cir. 2004) (interpreting promise that funding recipient would not “create, incur, assume or suffer to exist any Lien” on described property as prohibiting recipient from allowing any future liens).

By the samé token, the plaintiffs complaint does not aver that the debtor promised to provide a list of items sufficient to secure the loan fully. Without such a promise, the debtor may reasonably have believed that the unencumbered property on the List (which cost around $22,000 when purchased), together with whatever equity he had in any encumbered property, was sufficient for the plaintiffs purposes, so no further information was required.

That the plaintiffs attorney subsequently titled the list “List of Collateral,” annexed it to the Agreement, and had the debtor initial it did not — as the plaintiff suggests — transmogrify the debtor’s representations into misrepresentations. Importantly, the plaintiffs complaint presents no facts indicating that the parties reached a meeting of the minds regarding either the purpose of the List or the implications of its recharacterization. Nor does the complaint supply facts suggesting that the plaintiff believed the listed items to be unencumbered. After all, encumbered property can serve as collateral up to the value of the debtor’s retained equity. See, e.g., Prudential Ins. Co. v. SW Bos. Hotel Venture, LLC (In re SW Bos. Hotel Venture, LLC), 748 F.3d 393, 398 (1st Cir. 2014); Harley-Davidson Motor Co. v. Bank of New Eng.-Old Colony, N.A., 897 F.2d 611, 613 (1st Cir. 1990). In the absence of facts indicating that the parties had reached a different understanding, the plaintiffs assertion that the debtor misled her gains no traction.

Striving to blunt the force of this reasoning, the plaintiff insists that it should have been clear to the debtor that he was expected to disclose any preexisting encumbrances. In support, she cites a compendium of cases acknowledging that the existence of encumbrances is often salient information. See, e.g., In re Van Steinburg, 744 F.2d at 1061. But she cites no case holding that a debtor is required to disclose prior encumbrances simply because he has been asked to provide a list of property that he owns and/or possesses, and we are aware of none.

The short of it is that, without pleaded facts adequate to support a reasonable inference of material falsity, the plaintiffs section 523(a)(2)(B) claim does not cross the line from possible to plausible.- The plausibility requirement demands something more than facts showing that a claim is conceivable. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937; Schatz v. Repub. State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). The section 523(a)(2)(B) claim was, therefore, properly dismissed.

This leaves only the plaintiffs claim that the bankruptcy court abused its discretion when it denied her motion to amend her complaint to add a section 523(a)(2)(A) claim. Federal Rule of Bankruptcy Procedure 7015 incorporates Federal Rule of Civil Procedure 15 as the mechanism for adjudicating motions to amend a pleading in the bankruptcy context. Rule 15 specifies that, with exceptions not relevant here, a party may amend her complaint only by leave of court. See Fed. R. Civ. P. 15(a)(2).

Courts are instructed to “freely give leave when justice so requires.” Id. This permissiveness, though, extends only so far. See Aponte-Torres v. Univ. of P.R., 445 F.3d 50, 58 (1st Cir. 2006) (observing that courts need not “mindlessly grant every request for leave to amend”). A court may deny leave to amend for a variety of reasons, including “futility, bad faith, un-due delay, or a dilatory motive on the movant’s part.” Hatch v. Dep’t for Children, Youth & Their Families, 274 F.3d 12, 19 (1st Cir. 2001).

We review a bankruptcy court’s denial of leave to amend for abuse of discretion. See Zullo v. Lombardo (In re Lombardo), 755 F.3d 1, 3 (1st Cir. 2014). That review is satisfied if we discern some “arguably adequate basis” for the district court’s decision. Hatch, 274 F.3d at 19.

In the case at hand, the bankruptcy court denied the plaintiffs motion for leave to amend on futility grounds. Where, as here, a party seeks leave to amend before any discovery has occurred, a reviewing court assays futility with reference to the Rule 12(b)(6) pleading criteria. See id. An attempt to amend is regarded as futile if the proposed amended complaint fails to state a plausible claim for relief. See id.; see also Tambone, 597 F.3d at 442.

In her proposed amended complaint, the plaintiff claims that the debt is exempt from discharge under section 523(a)(2)(A), as well as section 523(a)(2)(B). The former section exempts from discharge debts obtained by “false pretenses, a false representation, or actual fraud.” 11 U.S.C. § 523(a)(2)(A). The plaintiff appears to contend that because the debtor did not disclose that at least one of the trucks was encumbered, he obtained the loan through either false pretenses or a false representation. This contention lacks force.

Unlike section 523(a)(2)(B)— which delineates every element of a claim under it — section 523(a)(2)(A) incorporates common law principles. See Field, 516 U.S. at 69, 116 S.Ct. 437. To state a plausible section 523(a)(2)(A) claim, a complaint must include facts reasonably indicating that:

1) the debtor made a knowingly false representation or one made in reckless disregard of the truth, 2) the debtor intended to deceive, 3) the debtor intended to induce the creditor to rely upon the false statement, 4) the creditor actually relied upon the false statement, 5) the creditor’s reliance was justifiable, and 6) the reliance upon the false statement caused damage.

Sharfarz v. Goguen (In re Goguen), 691 F.3d 62, 66 (1st Cir. 2012) (quoting In re Spigel, 260 F.3d at 32). The first element includes false pretenses, which arise when the circumstances “imply a particular set of facts, and one party knows the facts to be otherwise” but does not correct the counter-party’s false impression. Old Republic Nat’l Title Ins. Co. v. Levasseur (In re Levasseur), 737 F.3d 814, 818 (1st Cir. 2013) (citation omitted).

The circumstances here do not imply a particular set of facts that the debtor knew to be untrue. The debtor was never asked about whether or to what extent the listed items were encumbered, and the mere fact of an encumbrance was not inconsistent with their use as collateral. See, e.g., In re SW Bos. Hotel Venture, 748 F.3d at 398; Harley-Davidson, 897 F.2d at 613. Seen in this light, the plaintiff’s section 523(a)(2)(A) claim fails for much the same reason that her section 523(a)(2)(B) claim fails: she has not pleaded facts sufficient to make out a plausible claim that the debtor either operated under false pretenses or made a false representation. Indeed, she relies on the same facts she provided to support her section 523(a)(2)(B) claim, insisting that because the debtor did not tell her about the encumbrances, the List was false or, at least, actionably misleading. These facts did not bear the weight of her section 523(a)(2)(B) claim, and they are likewise too flimsy to bear the weight of her section 523(a)(2)(A) claim. The List was exactly what it purported to be: a description of items that the debtor used in the course of his business and their cost when he purchased them.

To say more would be to paint the lily. We conclude, as did the BAP, that an adequate basis existed for the bankruptcy court’s denial of the plaintiffs motion to amend: the new claim, like the old claim, would have been futile. It follows that the bankruptcy court did not abuse its discretion in denying the motion for leave to amend.

III. CONCLUSION

We need go no further. For the reasons elucidated above, the judgment is

Affirmed.

      . To be sure, we do not rely on the reasoning of either the bankruptcy court or the BAP. But that shift in focus presents no obstacle. We are not wed to a lower court's reasoning but, rather, may affirm the dismissal of a claim on any ground made manifest by the record. See MacDonald v. Town of Eastham, 745 F.3d 8, 11 (1st.Cir. 2014).

      . The complaint is silent as to what equity, if any, the debtor had in one of the trucks. As to the other, it alleges that his equity was only $100.

      . Many of the cases cited by the plaintiff consider the discharge of debts incurred through affirmatively false representations regarding a particular item's true ownership status. See, e.g., Voyatzoglou v. Hambley (In re Hambley), 329 B.R. 382, 390-91, 399 (Bankr. E.D.N.Y. 2005); Hudson Valley Water Res., Inc. v. Boice (In re Boice), 149 B.R. 40, 43, 45 (Bankr. S.D.N.Y. 1992). As we already have explained, the plaintiff alleges no facts indicating that the debtor made affirmatively false statements about his ownership interest in the listed property.

      . In a last-ditch attempt to snatch victory from the jaws of defeat, the plaintiff invokes the tenet that a party to a transaction must disclose "matters known to him that he knows to be necessary to prevent his partial or ambiguous statement of the facts from being misleading.” Restatement (Second) of Torts § 551 (2)(b). No argument premised on section 551 (2)(b) was raised below — and arguments advanced for the first time on appeal are deemed waived. See B&T Masonry Constr. Co. v. Pub. Serv. Mutual Ins. Co., 382 F.3d 36, 40 (1st Cir. 2004); see also Teamsters, Chauffeurs, Warehousemen & Helpers Union v. Superline Transp. Co., 953 F.2d 17, 21 (1st Cir. 1992) ("If any principle is settled in this circuit, it is that, absent the most extraordinary circumstances, legal theories not raised squarely in the lower court cannot be broached for the first time on appeal.”).


author: LYNCH, Circuit Judge.

text:
    PAN AM RAILWAYS, INC., Petitioner, v. UNITED STATES DEPARTMENT OF LABOR, Respondent, Jason Raye, Intervenor.
    No. 16-2271
    United States Court of Appeals, First Circuit.
    April 21, 2017

      Andrew J. Rolfes, Philadelphia, PA, with whom Robert S. Hawkins and Buchanan Ingersoll & Rooney, P.C., New York, NY, were on brief, for petitioner.
    Dean A. Romhilt, Senior Attorney, Office of the Solicitor, U.S. Department of Labor, with whom Nicholas C. Geale, Acting Solicitor of Labor, Jennifer S. Brand, Associate Solicitor, and Megan E. Guen-ther, Counsel for Whistleblower Programs, were on brief, for respondent.
    Stephen J. Fitzgerald, with whom Garrison, Levin-Epstein, Fitzgerald & Pirrotti, P.C., New Haven, CT, was on brief, for intervenor.
    Before HOWARD, Chief Judge, SELYA and LYNCH, Circuit Judges.
   LYNCH, Circuit Judge.

This is a petition for review, in a Federal Railroad Safety Act (“FRSA”) whistle-blower retaliation action, of an agency decision resulting in the statutory maximum award of punitive damages against a railroad. The railroad brought charges of dishonesty and insubordination, as well as threats of dismissal, against an injured employee who had filed a complaint under the FRSA with the Occupational Safety and Health Administration (“OSHA”), alleging that he lied in that complaint about precisely how his on-the-job accident happened, based on a purported discrepancy between the complaint and his prior story. An Administrative Law Judge (“ALJ”) later found that those charges of dishonesty constituted unlawful retaliation against the employee for filing the OSHA complaint.

We agree with the Department of Labor’s Administrative Review Board (“ARB”) that substantial evidence supported the ALJ’s rejection of the railroad’s affirmative defense and the ALJ’s decision to impose punitive damages. The amount of the punitive damages award presents a closer question. The award seems high, and we might ourselves have chosen a different sum. In the end, however, we conclude that the ALJ’s decision to award punitive damages of $250,000, to punish and deter what he perceived to be a culture of intimidating employees and discouraging them from engaging in protected activity, was within the realm of his discretion. We deny the petition for review.

I.

A. The FRSA and Raye’s Injury

This story begins with an on-the-job accident in which Jason Raye, a train conductor for a subsidiary of petitioner Pan Am Railways, Inc. (“Pan Am”), injured his ankle and missed work as a result. The FRSA’s employee protection provision forbids railroad carriers from retaliating against employees who engage in protected activity, such as reporting a workplace injury or filing an OSHA complaint. See 49 U.S.C. § 20109. Importantly, this case concerns FRSA retaliation against Raye for filing an OSHA complaint.

A few weeks before his accident, on October 5, 2011, Raye noticed a pile of old railroad ties next to a track in a railyard in Waterville, Maine. He thought the pile a tripping hazard and reported it to his manager, Dwynn Williams. The pile was not removed before Raye’s accident.

On October 24, 2011, during his shift, Raye stepped off a train onto that same pile of railroad ties and badly sprained his ankle. We recount later his testimony about the accident. Raye called his dispatcher for a ride to the hospital, where Raye was diagnosed with the sprain. Williams visited Raye at the hospital, and Raye explained that he had “rolled [his] ankle on the same ties that [he had] turned in three weeks ago.” In response, Williams said that Raye should “probably expect a [disciplinary] hearing” in the wake of the injury.

Raye had two scheduled days off after his injury, but he needed three days to recover, so he missed a day of work. That missed day required Pan Am to report Raye’s injury and the injury’s cause to the Federal Railroad Administration (“FRA”). See 49 C.F.R. § 225.19(d)(3)(i). When Raye returned to work on October 28, 2011, his superintendent, Jim Quinn, learned about the injury and the missed day. Quinn told Raye that the missed day “change[d] everything” and that “[t]here w[ould] probably be a hearing ... for that FRA reportable injury, for missing a day.”

B. First Pan Am Disciplinary Proceeding Brought Against Raye for His Alleged Safety Violation

On November 1, 2011, Raye received a Notice of Hearing from Pan Am, signed by Williams. The notice alleged that Raye had violated Pan Am Safety Rule P-76, which provides that “[b]efore getting on and off [a train], [employees must] carefully observe ground condition and be assured of firm footing.” At the November 11, 2011 hearing, Raye testified that he had stepped down from the train safely and cautiously, but had nonetheless lost his balance on the unstable pile of ties. Raye also testified that after rolling his ankle he had “caught [him]self’ and sat down on the ground rather than falling over.

On November 28, 2011, John Schultz,' Pan Am’s Vice President of Transportation, sent Raye a letter stating that Raye had failed to assure himself of firm footing before stepping onto the pile of ties. The letter itself “serve[d] as discipline in the form of a formal [r]eprimand and ... a copy of it w[as] ... placed in [Raye’s] personal file.”

C. Raye’s OSHA Complaint, Second Pan Am Disciplinary Proceeding for Raye’s Alleged Dishonesty, and Raye’s Amended OSHA Complaint Charging Retaliation

Raye retained a lawyer, who drafted and submitted a typed complaint to OSHA on December 6, 2011, without Raye first reviewing or signing it. This initial complaint accused Pan Am of violating the FRSA by retaliating against Raye, both for reporting a safety hazard and for reporting his injury. See 49 U.S.C. § 20109(a)(4), (b)(1)(A). The typed OSHA complaint was consistent with Raye’s testimony at the earlier Pan Am disciplinary hearing, with one exception: the complaint stated that Raye “fell hard to the ground” at the time of the injury, rather than that he sat down on the ground.

On December 12, 2011, OSHA sent Pan Am a copy of Raye’s complaint and sought Pan Am’s response to the allegations. At the request of Pan Am’s legal and human resources departments, Schultz reviewed the OSHA complaint — which he reasonably believed had been drafted by Raye himself — and thought there was a “major discrepancy” between the complaint’s statement about Raye falling hard to the ground and Raye’s prior hearing testimony that he had caught himself and sat down on the ground after stumbling. That discrepancy, Schultz said later, caused Pan Am to make a “collective determination” to bring a second set of disciplinary charges against Raye. Pan Am made that determination -without any effort to first ask Raye about the purported inconsistency.

On December 23, 2011, Pan Am sent Raye a second Notice of Hearing, which directed him to appear at a second disciplinary proceeding, levied several serious charges against him, and threatened him with termination. OSHA and the ALJ would later find that retaliation against Raye for filing the initial OSHA complaint was a contributing factor in Pan Am’s decision to bring these new charges. The notice alleged that Raye had “[p]rovid[ed] false statements to [Pan Am] and/or a government agency, in connection with [his] description as to how the incident ... on October 24, 2011, took place.” That purported dishonesty, the notice further alleged, violated two Pan Am Safety Rules: (1) Rule PGR-C, which threatens employees with dismissal if they commit “act[s] of insubordination, hostility, or willful disregard of [Pan Am’s] interests” or if they “conduct themselves in such a manner that [Pan Am] will ... be subject to criticism or loss of good will”; and (2) Rule PGR-L, which threatens employees with dismissal if they are “dishonest, immoral, vicious, quarrelsome, and uncivil in deportment or ... careless of the safety [of] themselves or of others.” The notice did not specify which of Raye’s statements about the accident were alleged to have been “dishonest” or “insubordinat[e].”

Raye’s lawyer, in response, amended the OSHA complaint on December 27, 2011, to include an allegation that the second set of charges amounted to Pan Am retaliating against Raye for having filed the original OSHA complaint. See 49 U.S.C. § 20109(a)(3). He enclosed the new Notice of Hearing and asserted to OSHA that Pan Am was “clearly bringing these additional charges in retaliation for ... the original [OSHA] complaint.”

The second Pan Am disciplinary hearing, addressing the new charges of dishonesty and insubordination, took place on January 4, 2012. Raye explained that his lawyer had written the statement in the OSHA complaint, that he himself had not been aware of the statement’s contents before the lawyer submitted the complaint to OSHA, that the discrepant portion of the statement was wrong, and that his testimony at the first hearing had been correct. The facts in the OSHA complaint, he confirmed, were otherwise accurate and consistent with his prior hearing testimony. Finally, he testified that no one from Pan Am had approached him informally at any time before issuing the second Notice of Hearing to discuss the purported “major discrepancy” that Schultz had identified.

In a letter dated January 13, 2012, Pan Am informed Raye that “the charges [of rule violations] ha[d] not been sustained” and that no disciplinary action would be taken as a result of the second hearing.

On August 14, 2013, QSHA rejected Raye’s claim that Pan Am had retaliated against him for reporting his injury or for reporting a safety hazard, finding that Pan Am had “provided clear and convincing evidence that it would have reprimanded [Raye] if it had observed the incident, even if no injury resulted.”

OSHA agreed with Raye, however, that Pan Am had unlawfully retaliated against him by bringing the second set of charges after he filed the original OSHA complaint. Pan Am had “not provided clear and convincing evidence,” OSHA found, “that it would have taken the same adverse action even if [Raye] had not engaged in protected activity.” OSHA further noted that “once a FRSA allegation has been made to OSHA, it is OSHA’s responsibility, not [an employer’s], to establish the truth of assertions made by both parties.”

D. ALJ and ARB Proceedings

On September 12, 2013, Pan Am objected to OSHA’s finding of retaliation and requested a de novo hearing before an ALJ. That hearing took place on February 24, 2014. The ALJ heard live testimony from Raye and from Schultz. Pan Am sought to introduce several exhibits documenting past instances of employee discipline, which it characterized as comparator evidence supporting its affirmative defense that it would have taken the same action even absent Raye’s protected activity. The ALJ admitted the documents about which Schultz could testify from personal experience, but excluded others for which Pan Am could provide no explanation or context.

The ALJ issued his Decision and Order on June 25, 2014. First, he found that Raye’s protected activity — filing an OSHA complaint — had been a contributing factor in Pan Am’s decision to charge Raye with dishonesty and to hold a second hearing. Next, he rejected Pan Am’s affirmative defense, holding that Pan Am had not “prove[d] by clear and convincing evidence that it would have taken the same action absent [Raye’s] protected activity.” He dismissed as inadequate Pan Am’s proffered comparator evidence because those instances of investigation and discipline were not fairly comparable to Raye’s circumstances.

Finally, the ALJ turned to what relief was “necessary to make [Raye] whole,” 49 U.S.C. § 20109(e)(1), and awarded Raye $10,000 in damages for emotional distress. He also imposed $250,000 in punitive damages — the maximum amount that the FRSA allows, see id. § 20109(e)(3) — because Pan Am had “utilized the [disciplinary] process to intimidate and discourage protected activity, not only by Raye, but [by] other employees of Pan Am as well.”

Pan Am appealed the ALJ’s decision to the ARB, which affirmed. The ARB held that substantial evidence supported the ALJ’s determination that Pan Am had failed to prove its affirmative defense by clear and convincing evidence. It also found no abuse of discretion in the award of $250,000.

II.

The scope of our review of Pan Am’s petition for review of the ARB’s final order is limited by the Administrative Procedure Act. See 49 U.S.C. § 20109(d)(4) (cross-referencing 5 U.S.C. §§ 701-706); R & B Transp., LLC v. U.S. Dep’t of Labor, Admin. Review Bd., 618 F.3d 37, 44 (1st Cir. 2010). Accordingly, we must deny the petition “unless [the ARB’s] legal conclusions are arbitrary, capricious, or otherwise not in accordance with law, or its factual conclusions are unsupported by substantial evidence.” R & B Transp., 618 F.3d at 44 (quoting Clean Harbors Envtl. Servs., Inc. v. Herman, 146 F.3d 12, 19 (1st Cir. 1998)). The substantial evidence standard is a hurdle “notoriously difficult to overcome on appellate review.” Vieques Air Link, Inc. v. U.S. Dep’t of Labor, 437 F.3d 102, 104 (1st Cir. 2006) (per curiam) (quoting Bath Iron Works Corp. v. U.S. Dep’t of Labor, 336 F.3d 51, 56 (1st Cir. 2003)).

Pan Am’s petition raises two issues. First, Pan Am argues that it established in the ALJ proceeding, by clear and convincing evidence, its affirmative defense that it would have issued the second Notice of Hearing and threatened Raye with termination for dishonesty even if he had not engaged in protected activity by filing an OSHA complaint. Second, Pan Am argues that the $250,000 punitive damages award was unsupported by substantial evidence and clearly excessive. Pan Am does not challenge the abuse of discretion standard of judicial review as to the amount of punitive damages.

A. Rejection of Pan Am’s Affirmative Defense that It Would Have Charged Raye with Dishonesty Even Absent His Protected Activity

Under the FRSA, an employee alleging retaliation bears the initial burden of demonstrating that his protected activity “was a contributing factor in the unfavorable personnel action alleged in the complaint.” 49 U.S.C. § 42121 (b)(2) (B) (iii); see id. § 20109(d)(2)(A). Pan Am does not dispute that Raye met his “contributing factor” burden and shifted the burden to Pan Am to prove, “by clear and convincing evidence,” that it “would have taken the same unfavorable personnel action in the absence of [the protected activity].” Id. § 42121(b)(2)(B)(iv).

Pan Am takes two tacks in challenging the ALJ’s rejection of its affirmative defense. First, it argues that the ALJ abused his discretion by excluding material comparator evidence. Second, it argues that the mere fact of discrepancy between the two accounts of Raye’s accident is sufficient to meet Pan Am’s burden of proof.

1. Pan Am’s Comparator Evidence

Pan Am faults the ALJ for excluding certain notices of investigation and records of arbitration awards, which Pan Am sought to introduce as additional comparator evidence. There was no abuse of discretion in the ALJ’s decision to exclude those exhibits. Pan Am contends that the exhibits were admissible as business records or public records. See 29 C.F.R. § 18.803(a)(6), (a)(8). But that argument misses the point: the ALJ excluded the exhibits not because they were hearsay, but rather because their probative value was minimal without a witness to explain their significance and in light of the exhibits already in evidence. See id. § 18.403. The ALJ was within his discretion in concluding that the proffered exhibits, without additional context, should not be admitted.

In any event, the record makes clear that any error was harmless. The excluded exhibits, on their face, merely suggested that Pan Am may have previously disciplined employees for false statements. The key issue, however, was whether the false statements in those instances were of a similar character as the discrepancy that Pan Am chose to investigate formally and aggressively in Raye’s case. The excluded exhibits do not themselves describe circumstances that are reasonably comparable to Raye’s, and no other evidence makes them so. There is no reason to believe that the ALJ would have afforded the exhibits any weight, or changed his mind, had they been admitted. See R & B Transp., 618 F.3d at 46 (finding “any purported [evidentiary] error ... harmless in light of the other evidence” considered by the ALJ); Mekhoukh v. Ashcroft, 358 F.3d 118, 130 (1st Cir. 2004) (“The evidence [not considered] contains no information that materially affects the outcome of [petitioner’s] claims.”).

Pan Am also argues that the comparator evidence the ALJ did admit was sufficient to meet its burden to prove its affirmative defense. But those disciplinary records, too, had only indirect relevance to Raye’s case: they involved patently and materially false hearing testimony by the employees, rather than mere discrepancies, and the notices given there to the employees did not threaten to fire them after the employees had made a statement to OSHA.

2. Rejection of Pan Am’s Purportedly Non-Retaliatory Motive for Charging Raye with Dishonesty

Pan Am contends that the two accounts of Raye’s accident were “fundamentally irreconcilable” and that the discrepancy gave Pan Am a non-retaliatory motive to charge Raye with dishonesty-related violations and to hold a second formal hearing. But the ALJ had substantial evidence and reason not to credit Pan Am’s explanation.

First, the ALJ was entitled to evaluate the hearing testimony of Schultz, Pan Am’s key decision maker, and decide whether Schultz’s explanation was sufficiently credible. There were reasons to doubt Schultz’s credibility. In his initial testimony, he mischaracterized the description of the accident contained in the OSHA complaint. Only on cross-examination did he admit his mischaracterization. The ALJ also reasonably gave weight to Schultz’s failure simply to ask Raye about the perceived discrepancy before rushing to charge Raye formally with dishonesty and to threaten him with the loss of his job. Again, the ALJ rejected Pan Am’s purported reasons for its failure to do so.

Although there may be room for disagreement about the significance and extent of the discrepancy, we are not the triers of fact. Substantial evidence supported the ALJ’s conclusion that Pan Am overstated the significance of the discrepancy and failed to prove that it would have taken the same adverse actions if Raye had not filed the OSHA complaint.

Pan Am argues that the ALJ ignored an ARB precedent requiring him to consider “the proportional relationship between the adverse actions and the bases for the actions.” See Speegle v. Stone & Webster Constr., Inc., ARB Case No. 13-074, 2014 WL 1870933, at *7 (Dep’t of Labor Admin. Review Bd. Apr. 25, 2014). That argument is flatly contrary to the record, which reflects that the ALJ in this case properly took proportionality into account as circumstantial evidence, as well as “the temporal proximity between the non-protected conduct and the adverse actions.” Id. As Speegle clearly states, proportionality is only one of several pieces of circumstantial evidence that an ALJ “can” consider. Id.

B. No Abuse of Discretion in Punitive Damages Award

The remaining issue is whether the $250,000 punitive damages award was unsupported by substantial evidence, contrary to law, or clearly excessive. We conclude that the ALJ’s choice of award was not an abuse of discretion.

1. Background

An employee who prevails on a FRSA retaliation claim “shall be entitled to all relief necessary to make the employee whole,” 49 U.S.C. § 20109(e)(1), and the relief “may include punitive damages in an amount not to exceed $250,000,” id. § 20109(e)(3). The purpose of punitive damages, both in the FRSA and elsewhere, is twofold: “to punish [a wrongdoer] for his outrageous conduct and to deter him and others like him from similar conduct in the future.” Smith v. Wade, 461 U.S. 30, 54, 103 S.Ct. 1625, 75 L.Ed.2d 632 (1983) (quoting Restatement (Second) of Torts § 908(1) (1979)).

When Congress amended the FRSA in 2007 to expand anti-retaliation protections and shift enforcement authority from arbitrators to the Department of Labor, it said that it was aiming to address and rectify railroads’ history of systematically suppressing employee injury reports through retaliatory harassment and intimidation. See Araujo v. N.J. Transit Rail Operations, Inc., 708 F.3d 152, 156-57 & n.3, 159 & n.6 (3d Cir. 2013) (discussing the legislative history of the 2007 FRSA amendment). Congress’s amendment not only gave the Department of Labor enforcement authority but also put stronger tools in the Department’s toolbox: the statute’s punitive damages cap rose from $20,000 to $250,000. Compare 49 U.S.C. § 20109(c) (2006) (pre-amendment), with id. § 20109(e)(3) (2012) (post-amendment).

As Pan Am acknowledges, the test for awarding punitive damages in FRSA whistleblower cases is the same common law test that Smith used for actions under 42 U.S.C. § 1983. See Worcester v. Springfield Terminal Ry. Co., 827 F.3d 179, 182-84 (1st Cir. 2016) (applying Smith standard); BNSF Ry. Co. v. U.S. Dep’t of Labor, 816 F.3d 628, 642 (10th Cir. 2016) (same). We have described the Smith test as a “reckless disregard standard,” Worcester, 827 F.3d at 183, meaning that punitive damages are warranted if a railroad acted “[w]ith malice or ill will or with knowledge that its actions violated federal law or with reckless disregard or callous indifference to the risk that its actions violated federal law,” id. at 182 (alteration and emphases in original).

2. An Award of Punitive Damages Was Warranted

Substantial evidence in the record supports the ALJ’s conclusion that punitive damages were warranted on account of Pan Am’s “reckless or callous disregard for [Raye’s] rights, as well as intentional •violations of federal law.” Smith, 461 U.S. at 51, 103 S.Ct. 1625. The ALJ specifically found that Pan Am had willfully retaliated against Raye for filing an OSHA complaint and that it had “consciously disregarded Raye’s statutorily-protected rights under the FRSA, and in fact intentionally interfered with the exercise of those rights.” Those were reasonable inferences, in light of the facts developed at the ALJ hearing.

3. A Statutory-Maximum Award of Punitive Damages Was Not Clearly Excessive

The evidence on which the punitive damages award rests does not pertain solely to how Pan Am treated Raye. The ALJ’s opinion cites several additional reasons, all supported by substantial evidence. For example, Pan Am exaggerated the seriousness of the supposedly “major” discrepancy, both in the second Notice of Hearing and in Schultz’s testimony before the ALJ, and Schultz’s dissembling gave reason to be concerned about Pan Am’s culture. Pan Am’s choice to charge Raye with dishonesty was made not by a low-level manager but by its corporate legal department and a Vice President. Pan Am chose not to make use of OSHA’s built-in factfinding process to address the discrepancy, and instead threatened Raye with the dishonesty charges. Finally, Pan Am appeared to the ALJ to have a corporate culture more focused on retaliation than on safety: the ALJ found that 99% of injuries at Pan Am that were reportable to the FRA triggered formal charges against the injured employee, in stark contrast to Pan Am’s apparent nonchalance about its own responsibility to improve safety and remove hazards like the one Raye reported.

The difficult question is not whether there should have been a punitive damages award at all, but whether Pan Am has shown that a $250,000 award, set at the statutory maximum, was an abuse of discretion. See Cooper Indus., Inc. v. Leatherman Tool Grp., Inc., 532 U.S. 424, 432-33, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001) (federal appellate courts generally review the size of a punitive damages award for abuse of discretion, assuming that “no constitutional issue is raised” and that the award was within statutory limits). Our deference to the ALJ’s choice, to be sure, “is not boundless.” United States ex rel. D’Agostino v. EV3, Inc., 802 F.3d 188, 192 (1st Cir. 2015). Still, in this instance, we will not disturb the $250,000 award.

The Supreme Court has recently reminded us about the reasons for an abuse of, discretion standard: “basic principles o.f institutional capacity counsel in favor of deferential review” when a fact-finder’s decision “turns not on ‘a neat set of legal rules’ but instead on the application of broad standards” to the specific and nuanced facts of a particular case. McLane Co. v. EEOC, — U.S. -, 137 S.Ct. 1159, 1167, 197 L.Ed.2d 500 (2017) (quoting Illinois v. Gates, 462 U.S. 213, 232, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983)). In cases like this one, a Department of Labor ALJ’s subject matter expertise and experience with whistleblower cases make him or her well suited to make the “discretionary moral judgments],” Smith, 461 U.S. at 52, 103 S.Ct. 1625, and the “fact-intensive, close calls,” McLane, 137 S.Ct. at 1168 (quoting Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 404, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990)), that must inform any punitive damages determination — whether under the FRSA or another statute. Abuse of discretion review is not “no review at all,” Wilton v. Seven Falls Co., 515 U.S. 277, 289, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995), but when applying that standard we will refrain from “reweighing evidence and reconsidering facts already weighed and considered by the [ALJ],” McLane, 137 S.Ct. at 1168 (quoting Cooter & Gell, 496 U.S. at 404, 110 S.Ct. 2447).

The ALJ was entitled, within wide limits, to decide how much weight to afford to each of the relevant facts, to assess the credibility of the witnesses at the ALJ hearing, and to make the fact-sensitive and “discretionary moral judgment[s]” that Smith requires. 461 U.S. at 52, 103 S.Ct. 1625. The question of excessiveness is a close one, but like the ARB we ultimately see no abuse of discretion in the ALJ’s conclusion that a maximum award was warranted here to accomplish the FRSA’s goal of punishing and deterring retaliatory conduct by employers like Pan Am.

III.

We deny Pan Am’s petition for review. Costs are awarded against Pan Am.

      . Raye later testified in the ALJ hearing that Pan Am had not disciplined anyone, as far as he knew, for failing to remove the dangerous pile from the railyard in the weeks between Raye's initial report and his accident. Pan Am has not refuted that testimony.

      . The ALJ later found, despite Pan Am’s claim that its officials could not have spoken informally with Raye because of the collective bargaining agreement with Raye's union, that nothing in that agreement prohibited an informal conversation. This was one of several instances in which the ALJ found Schultz’s testimony before him to be less than truthful. Further, the ALJ evidently accepted Raye’s unrebutted testimony that on another occasion Quinn, the superintendent, had called him in for an informal conversation to learn more about the circumstances of a workplace accident. On that occasion, Pan Am did not formally charge Raye with a safety violation until after the informal conversation.

      . OSHA's finding that the first Pan Am hearing and subsequent reprimand did not constitute unlawful retaliation against Raye was not appealed.

      . With respect to findings of fact, "it is the ALJ's unique prerogative in the first instance to 'draw inferences and make credibility assessments, and we may not disturb his judgment and the [ARB’s] endorsement of it so long as the [ALJ's] findings are adequately anchored in the record.' " Bath Iron Works, 336 F.3d at 56 (quoting Bath Iron Works Corp. v. Dir., Office of Workers Comp. Programs, U.S. Dep’t of Labor, 244 F.3d 222, 231 (1st Cir. 2001)).

      . Pan Am has abandoned one of its original theories: that there was no "adverse action,” as a matter of law, given that Raye was not punished after the second disciplinary proceeding.

      .The “clear and convincing evidence” standard is more demanding than a preponderance standard and requires "proof that the [employer's] assertions are 'highly probable.’ ” United States v. Volungus, 730 F.3d 40, 46-47 (1st Cir. 2013) (quoting Colorado v. New Mexico, 467 U.S. 310, 316-17, 104 S.Ct. 2433, 81 L.Ed.2d 247 (1984)).

      . Prevailing plaintiffs are also entitled to "compensatory damages, including compensation for any special damages sustained as a result of the discrimination, including litigation costs, expert witness fees, and reasonable attorney fees." See 49 U.S.C. § 20109(e)(2)(C).

      . Post-amendment jury awards of punitive damages, under the FRSA, are reduced to this statutory cap if necessary. See, e.g., Barati v. Metro-North R.R. Commuter R.R. Co., 939 F.Supp.2d 143, 145 (D. Conn. 2013) (granting motion to reduce $1,000,000 jury award of punitive damages to $250,000).

      . Pan Am has not challenged the size of the punitive damages award on constitutional grounds. Cf. State Farm Mut. Auto Ins. Co. v. Campbell, 538 U.S. 408, 416-17, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (discussing the "procedural and substantive constitutional limitations” applicable to punitive damages awards); Méndez-Matos v. Municipality of Guaynabo, 557 F.3d 36, 47, 52-56 (1st Cir. 2009) (reducing a jury’s punitive damages award to comport with due process).