Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_08-cv-01510/USCOURTS-cand-3_08-cv-01510-127/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 JAMES

MCLEOD’S UNTIMELY

REQUEST TO OPT OUT

OF THE CLASS

This order addresses the letter sent by class member James McLeod 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 819 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, this order finds that the facts and

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

Circuit law. There is no question that class member MacLeod received actual notice of this class

action, as his letter acknowledges that he attempted to opt out before the deadline of December

28, 2010. In his letter, Mr. MacLeod notes that he “sent [his] opt out letter so that it would be

received before the deadline” but then goes on (confusingly) to note that the delayed response

from attorneys while he was pursuing an individual action “result[ed] in a delayed response to the

opt in/out out mandate.” In any event, class member MacLeod’s opt-out request was not received

in a timely manner by the claims administrator and there are no legally sufficient reasons

provided in Mr. MacLeod’s letter to find excusable neglect for his untimely submission.

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

the reasons set forth by class member MacLeod are legally insufficient to show excusable neglect. 

If Mr. MacLeod’s excuses were 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 given the recent preliminary approval of a $235 million —

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

mind. Considering all of the relevant circumstances, the Court cannot grant Mr. Macleod’s

request for late exclusion from the class.

For these reasons, even if it was brought in good faith, the motion is DENIED.

IT IS SO ORDERED.

Dated: May 26, 2010. WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:08-cv-01510-WHA Document 819 Filed 05/27/10 Page 2 of 2