Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-01510/USCOURTS-cand-3_08-cv-01510-122/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 TIMOTHY L.

GARCIA AND NANCY R. LONG’S

UNTIMELY REQUEST TO OPT

OUT OF THE CLASS

This order addresses the motion filed by class members Timothy L. Garcia and Nancy R.

Long seeking permission to opt out of the class after the applicable deadline (Dkt. No. 777).

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 814 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, it is clear from the motion that class

members Garcia and Long had actual notice of the class action as well as the December 28 optout deadline. Indeed, they freely admit that they received the class certification notice and were

aware of the obligation to opt out (if they so desired) (Br. 2). Second, the only excuse provided

by movants is that “[t]he compressed time frame [caused by their filing separate claims against

Schwab] and the 2009 holiday season caused Movants to send their Written Request For

Exclusion From Class Action Lawsuit to the Notice Administrator very close to the deadline

established by the Court” (Br. 3). Since the class action notice clearly stated that opt-out requests

had to be received by the stated deadline, this delay by class members Garcia and Long resulted

in their opt-out request being untimely.

Under the factors that govern the determination of excusable neglect, this order finds that

the reasons set forth by class members Garcia and Long are insufficient to show excusable

neglect. If such excuses were deemed legally sufficient to warrant exclusion, a landslide of

similar untimely opt-out requests would likely follow. The prejudice to Schwab that would result

from granting such requests — especially on the eve of preliminary approval of a $200 million

settlement — would be tremendous, since the settlement was negotiated with a stable class

membership in mind. The reasons stated in the instant motion are insufficient to overcome this

prejudice, and do not amount to excusable neglect under these circumstances.

For these reasons, the 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 814 Filed 05/27/10 Page 2 of 2