Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_02-cv-01240/USCOURTS-cand-4_02-cv-01240-1/pdf.json

Nature of Suit Code: 371
Nature of Suit: Truth in Lending
Cause of Action: 28:1441 Petition for Removal

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United States District Court

For the Northern District of California

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1

 Defendants also request judicial notice of this Court's

November 3, 2004 Order Granting in Part and Denying in Part

Movants' Motion to Opt Out (the Barrow Order); November 23, 2004

Order Denying Movants' Motion to Opt Out (the Jamieson Order);

November 23, 2004 Order Denying Movants' Motion to Opt Out (the

Woodward Order); and May 24, 2004 Order Granting Movants' Motion to

Opt Out (the Newman Order). Defendants' request for judicial

notice is GRANTED.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE:

HOUSEHOLD LENDING LITIGATION

 /

No. C 02-1240 CW

ORDER DENYING

MOTION TO OPT OUT

David L. Hauger moves for an order allowing him to opt out of

the class settlement of this case. Defendants Household

International, Inc., Household Finance Corporation II, Household

Finance Corporation III, Household Realty Corporation, Beneficial

Finance, Beneficial of Washington, Inc. and other related Household

Finance corporate entities (collectively, HFC) oppose the motion.1

Having considered the papers filed by the parties, the Court DENIES

the motion to opt out.

Case 4:02-cv-01240-CW Document 412 Filed 10/18/05 Page 1 of 7
United States District Court

For the Northern District of California

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2

 Hauger's declaration, attached to his motion to opt out, is

signed and dated January 10, 2005, four months before his motion

was filed. 

2

BACKGROUND

On August 7, 2003, Movant filed a complaint in the Court of

Common Pleas for Berks County, Pennsylvania, against Beneficial

Consumer Discount Company (Beneficial) alleging fraudulent and

negligent misrepresentation. Movant's Reply, Ex. A., Hauger v.

Beneficial Consumer Discount Co., No. 03-08594. Beneficial is one

of the Defendants in this action. On October 7, 2003, Beneficial

filed preliminary objections to Movant's complaint. Movant's

Reply, Ex. A. On October 28, 2003, Movant filed an opposition to

Beneficial's preliminary objections. Movant's Reply, Ex. A. 

On December 12, 2003, this Court issued a preliminary order

approving a class action settlement of Movant's claims and

providing for notice to the class (hereinafter the Acorn class

settlement). That order required any person who wanted to be

excluded from the settlement to mail a request for exclusion to the

Settlement Administrator no later than twenty-one days prior to the

April 30, 2004 fairness hearing, that is, no later than April 9,

2004. On April 30, 2004, this Court issued a final order approving

the class settlement and a judgment.

Movant does not recall receiving any documents regarding optout procedures for the Acorn class settlement. Hauger Decl. ¶ 2.2

The only documents he recalls receiving that related to the Acorn

class action arrived "after settlement had been reached." Hauger

Decl. ¶ 3. Movant does not explain whether "after settlement had

Case 4:02-cv-01240-CW Document 412 Filed 10/18/05 Page 2 of 7
United States District Court

For the Northern District of California

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been reached" refers to the Court's preliminary or final approval

of the Acorn settlement. However, the Settlement Administrator's

records indicate that notice was mailed to Movant's address of

record in Fleetwood, Pennsylvania on December 22, 2003. Redell

Decl. ¶ 8; Stamm Decl. ¶ 6. There is no record that the notice was

returned by the postal service as undeliverable. Redell Decl. 

¶ 10. Movant does not state that this address of record was

incorrect. 

On June 21, 2004, following supplemental briefing,

Beneficial's preliminary objections to Movant's State court

complaint were overruled. Movant's Reply, Ex. A. On July 27,

2004, Beneficial filed an answer to Movant's complaint in

Pennsylvania state court. Movant's Reply, Ex. A. In his motion,

Movant asserts that he first learned of the Acorn settlement from

Beneficial's July 27 answer, which he received three months after

the opt-out deadline. However, this assertion is not supported by

a declaration. After learning of the Acorn settlement, Movant

spoke to his attorney, and understood that his attorney would

complete the opt-out procedures. Hauger Decl., 

¶¶ 5-6. 

On December 12, 2004, Beneficial filed a motion for summary

judgment. Movant's Reply, Ex. A. On January 13, 2005, Movant

filed a response to Beneficial's summary judgment motion. Movant's

Reply, Ex. A. The State court ordered Movant to file this motion

to opt out, and stayed the Pennsylvania litigation. Movant filed

the instant motion on May 2, 2005. 

Case 4:02-cv-01240-CW Document 412 Filed 10/18/05 Page 3 of 7
United States District Court

For the Northern District of California

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LEGAL STANDARD

In requesting exclusion from the class after the April 9, 2004

opt-out deadline, Movant is effectively seeking relief from final

judgment under Federal Rule of Civil Procedure 60(b). The standard

for determining whether Movant should be allowed to opt out of the

class after the applicable deadline is whether his failure to

comply with the deadline is the result of “excusable neglect.” 

Fed. R. Civ. P. 60(b). 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). It is appropriate

for courts to accept such late filings when the party's neglect can

be considered "excusable," a determination that is "at bottom an

equitable one, taking account of all relevant circumstances

surrounding the party's omission." Id. at 395. The relevant

circumstances include "the danger of prejudice to the [opposing

party], the length of the delay and its potential impact on

judicial proceedings, the reason for the delay, including whether

it was in reasonable control of the movant, and whether the movant

acted in good faith." Id.

DISCUSSION

Movant argues that his alleged failure to receive an opt-out

notice and his good faith belief that his attorney had completed

the opt-out procedure constitute excusable neglect. 

In Pioneer, the Supreme Court held that when determining

whether failure to act before the bar date was excusable, the

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United States District Court

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proper inquiry was whether the neglect of movants and their counsel

was excusable. Pioneer, 507 U.S. at 396. The Supreme Court

reasoned that "clients must be held accountable for the acts and

omissions of their attorneys." Id. 

 First, Movant argues that he does not recall receiving any

notice of opt-out requirements in the Acorn class settlement. 

However, the Settlement Administrator's records indicate that

notice of opt-out procedures was mailed to Movant's address of

record in December, 2003 and was not returned as undeliverable. 

Furthermore, Movant acknowledges that he has received other

documents regarding the Acorn settlement. Movant does not state

that his address of record is incorrect or give any explanation of

why he did not receive the opt-out notice, but simply states that

he does not "recall" receiving any such notice. 

Next, Movant argues that, even after he had notice of the

Acorn class settlement and opt-out requirements in July, 2004, his

failure to opt out was excusable because he believed that his

attorney would complete the opt-out process. However, Movant

submits no evidence that he or his attorneys made any further

efforts to ensure that he had successfully opted out of the

settlement. Instead, Movant delayed until twelve months after the

opt-out deadline before filing this motion. Furthermore, although

Movant does not explain when or how he and his counsel learned of

their mistake, his affidavit attached to this motion is signed and

dated January 10, 2005. Therefore, at the latest, Movant knew by

January 10, 2005 that he had failed to opt out, and yet he did not

file this motion for another four months. Movant offers no excuse

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United States District Court

For the Northern District of California

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for these delays, except to indicate that his case was reassigned

to a new attorney at the same firm. 

Movant cites McCubbrey v. Boise Cascade Home & Land Corp., 71

F.R.D. 62, 71 (N.D. Cal. 1976), for the proposition that his

individual lawsuit in Pennsylvania State court unequivocally

expressed his desire to opt out. In McCubbrey, the court denied in

part a motion by class-action defendants to enjoin individual suits

by class members who had failed to timely opt out of the class

action. Movant compares himself to the class members in McCubbrey

who filed suits during the opt-out period, in lieu of formally

opting out. However, Movant is more similarly situated to the

McCubbrey class members who had filed individual complaints against

the defendants prior to the opt-out period, who the court found

were given inadequate notice of the need to take further opt-out

action, and thus were not barred from prosecuting their suits. Id.

at 67-69. Here, Movant has not shown that the notice was

insufficient to inform him of the need to opt out. Instead, he

relied on his attorney to complete the necessary procedures, which

the attorney did not do. 

Weighing all of the relevant circumstances, Movant's lengthy,

unexplained delay in moving to opt out, even after he admittedly

knew that he had failed to do so effectively, is not excusable

neglect, and it is not rendered excusable by his prior initiation

of a suit against one of the Defendants. 

CONCLUSION 

For the foregoing reasons, Movant's motion to opt out is

DENIED (Docket No. 383). The Court GRANTS Defendants' request for 

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United States District Court

For the Northern District of California

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judicial notice (Docket No. 387). Defendants' request for relief

from opposing any future opt-out motions unless so ordered by the

Court is denied, without prejudice to renewal if numerous

repetitious motions are filed. 

IT IS SO ORDERED.

Dated: 10/18/05

 

CLAUDIA WILKEN

United States District Judge

Case 4:02-cv-01240-CW Document 412 Filed 10/18/05 Page 7 of 7