Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-01510/USCOURTS-cand-3_08-cv-01510-129/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 BEULAH 

E. HIPPELE’S UNTIMELY

REQUEST TO OPT OUT

OF THE CLASS

This order addresses the motion filed by class member Beulah E. Hippelle seeking

permission to opt out of the class after the December 2009 deadline.

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 821 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.

Having considered all the applicable factors set forth above, this order finds that the facts

and circumstances underlying this request do not support a finding of excusable neglect under

Ninth Circuit law. The only excuse provided in the instant motion is that class member Hippele

“has no recollection of receiving any notice of any class action and wishes to pursue her claim on

an individual basis before [FINRA].” While this may be true, the class action notice was properly

sent via first-class mail to the address associated with her Schwab account(s) and was not

returned to the claims administrator as “undeliverable” (see Dkt. No. 751-1, listing all class

members where notices were returned “undeliverable” and where new addresses could not be

found). In other words, the notice provided to Ms. Hippele was reasonably calculated to give her

actual notice of this class action and was constitutionally sufficient. This weighs against a finding

of excusable neglect.

The instant motion provides no other reasons why excusable neglect should be found,

mentioning only that Ms. Hippele is 89 years old. Under the factors that govern the determination

of excusable neglect, this order finds that the reasons set forth by class member Hippele are

legally insufficient to show excusable neglect under these circumstances. If such excuses were

deemed sufficient to warrant exclusion, a landslide of similar untimely opt-out requests would

likely follow. The prejudice to Schwab that would result from the granting of 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. 

For these reasons, even if brought in good faith, the motion must be DENIED.

IT IS SO ORDERED.

Dated: May 27, 2010. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:08-cv-01510-WHA Document 821 Filed 05/27/10 Page 2 of 2