U.S. Court of Appeals Rules Federal Courts do not have Per Se Jurisdiction in ROFR Cases

The U.S. Court of Appeals for the First Circuit issued a ruling, which affirms a lower court’s ruling that federal courts do not have per se jurisdiction over Right of First Refusals (ROFRs) given to qualified nonprofits or other qualifying organizations under Section 42. The Court confirmed that disputes involving Section 42 ROFRs are contractbased disputes governed by rules of contract construction, and thus do not invoke a federal question for purposes of federal court jurisdiction and are properly reserved for state courts to decide. The case will now be returned to the lower court in Boston, where it will be litigated on the merits.