Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-01510/USCOURTS-cand-3_08-cv-01510-116/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE: 

CHARLES SCHWAB CORPORATION

SECURITIES LITIGATION.

This Document Relates

To All Cases.

 /

No. C 08-01510 WHA

ORDER DENYING ALVIN 

AND LINDA COPPERSMITH’S

UNTIMELY REQUEST TO OPT

OUT OF THE CLASS

This order addresses the motion filed by class members Alvin and Linda Coppersmith

seeking permission to opt out of the class after the applicable deadline (Dkt. No. 785).

The standard for determining whether a class member should be allowed to opt out of a

class action after the applicable exclusion deadline has passed is whether the class member’s

failure to meet the deadline is the result of “excusable neglect.” See Silber v. Mabon, 18 F.3d

1449, 1454-55 (9th Cir.1994). This standard allows courts, “where appropriate, to accept late

filings caused by inadvertence, mistake, or carelessness, as well as by intervening circumstances

beyond the party’s control.” Pioneer Inv. Serv. Co. v. Brunswick Assoc. Ltd. P’ship, 507 U.S.

380, 388 (1993). When evaluating whether “excusable neglect” applies, the Ninth Circuit

instructs courts to consider the “degree of compliance with the best practicable notice procedures;

when notice was actually received and if not timely received, why not; what caused the delay, and

whose responsibility was it; how quickly the belated opt out request was made once notice was

received; how many class members want to opt out; and whether allowing a belated opt out would 

Case 3:08-cv-01510-WHA Document 808 Filed 05/27/10 Page 1 of 2
United States District Court

For the Northern District of California

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affect either the settlement or finality of the judgment.” Silber, 18 F.3d at 1455 (internal footnote

omitted). Additionally, the court should consider the danger of prejudice to the opposing party,

and whether the movant acted in good faith. Pioneer, 507 U.S. at 395.

This order finds that the facts and circumstances underlying this request do not support a

finding of excusable neglect under Ninth Circuit law. First, the Coppersmiths admit receiving the

class action notice at their residence (Coppersmith Decl. ¶ 2). In other words, the notice was not

returned to the claims administrator as “undeliverable.” The only excuse provided by the

movants for not reading the notice is that the notice had been relegated to a pile of “junk mail”

(ibid.). It was only after the Coppersmiths went through the “junk mail” pile in February 2010

that they learned of the December 2009 opt-out deadline. Second, while the Coppersmiths started

proceedings against defendant Schwab with FINRA in October 2009, the instigation of such

proceedings does not serve as a substitute to the opt-out procedures set forth under the Federal

Rules (id. at ¶ 1). Third, this opt-out request comes on the eve of preliminary approval of a 200

million dollar class-wide settlement. Even if the motion has been brought in good faith, there is

no question that granting such a late opt-out request would be prejudicial to defendant Schwab,

since the settlement was negotiated with the current class membership in mind. 

After considering all the factors that underlie the determination of excusable neglect, this

order finds that excusable neglect has not been shown with respect to the Coppersmiths. For

these reasons, the instant motion must be DENIED.

IT IS SO ORDERED.

Dated: May 26, 2010. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:08-cv-01510-WHA Document 808 Filed 05/27/10 Page 2 of 2