In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 17-2275

NICK PEARSON, et al.,

Plaintiffs-Appellees,

v.

TARGET CORPORATION, NBTY, INC. and REXALL SUNDOWN,

INC.,

Defendants-Appellees,

APPEAL OF: THEODORE H. FRANK,

Objector.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 11 C 7972 — John Robert Blakey, Judge.

____________________

ARGUED JANUARY 16, 2018 — DECIDED JUNE 26, 2018

____________________

Before WOOD, Chief Judge, and ROVNER and HAMILTON,

Circuit Judges.

WOOD, Chief Judge. Inequitable settlements are an unfortunate recurring bug in our system of class litigation. Federal 

Rule of Civil Procedure 23(e) is designed to minimize such 
2 No. 17-2275

problems, but appeals by class members who object to a settlement indicate that the system still needs improvement. All 

too often, class counsel negotiate a settlement with substantial 

attorneys’ fees but meager benefits for the class. See, e.g., Redman v. RadioShack Corp., 768 F.3d 622, 638–39 (7th Cir. 2014). 

Named plaintiffs fail to live up to their ethical obligations as 

fiduciaries to the class. See, e.g., Eubank v. Pella Corp., 753 F.3d 

718, 723–24 (7th Cir. 2014). The objector-appellant before us, 

Theodore Frank, has brought problems like these to our attention before, including in an earlier appeal in this case. See, e.g., 

Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir. 2014); In re Subway 

Footlong Sandwich Mktg. & Sales Practices Litig., 869 F.3d 551 

(7th Cir. 2017).

But this appeal is different. It does not concern the class 

settlement itself, but rather what happened after the district 

court approved the settlement. Frank characterizes it as “objector blackmail”: an absent class member objects to a settlement with no intention of improving the settlement for the 

class. Instead, the objector files her objection, appeals, and 

pockets a side payment in exchange for voluntarily dismissing the appeal. A potential benefit for the class—a better settlement—is leveraged for a purely personal gain—a side bargain. Although Rule 23 may change at the end of this year, if 

Congress allows some proposed amendments to go into effect, up until now the federal rules have not had any provision 

targeted at side settlements reached on appeal. Proposed 

Amendments to the Federal Rules of Civil Procedure, Rules 5, 23, 

62, and 65.1, Slip Order at *9–15 (U.S. Apr. 26, 2018), 

https://www.supremecourt.gov/orders/courtorders/frcv18_5924.pdf.
No. 17-2275 3

In this case, three objectors voluntarily dismissed their appeals before appellate briefing began. Frank suspects that 

they acted in bad faith. He hoped to bring the issue to the district court’s attention, but he was stymied because final judgment had already been entered with prejudice. Frank moved

for a limited reopening of the case, but the district court denied that motion. Because the motion should have been 

granted and Frank allowed to pursue his theory, we reverse. 

I

Nick Pearson filed this suit in November 2011 on behalf of 

a putative class of consumers who purchased glucosamine, a 

dietary supplement advertised for its benefits to joint health.

The class alleged that Target Corporation, NBTY, Inc., and 

Rexall Sundown, Inc., violated consumer protection laws by 

making false claims about the efficacy of the supplement. The 

parties reached a settlement, which the district court initially 

approved on January 22, 2014. Frank objected and appealed 

to this court. We reversed because the settlement provided 

outsized benefits for class counsel. Pearson, 772 F.3d at 787. On

remand, the parties reached a new settlement, which the district court approved on August 25, 2016. The district court entered final judgment on the same day; its order reflected its 

approval of the settlement, which included both monetary 

and injunctive relief. We call this the “Settlement Judgment.” 

The order specified that the action was being dismissed 

“‘without prejudice’ so as to allow the Court to supervise the 

implementation and administration of the Settlement.” 

Three unnamed class members—Steven Buckley, Patrick Sweeney, and Randy Nunez—objected and filed appeals. 

All three dismissed their appeals before briefing began. From 
4 No. 17-2275

here the proceedings took an unusual turn. After the voluntary dismissal of the objectors’ appeals, the district court entered a new order on November 18 dismissing the (already 

dismissed) action. Unlike the Settlement Judgment, the November dismissal was unconditional: it was entered with prejudice and was not accompanied by any order effectuating the 

settlement. We call this the “Post-Appeal Judgment.”

On December 7, Frank moved to intervene and disgorge 

any side settlements made by the other three objectors. Frank 

claims that because the appeals were brought on behalf of the 

class, the class is entitled to any proceeds from the side settlements. Judge Zagel, who had presided over the case since 

2012, approved a briefing schedule for the issue on December 

12. But because Judge Zagel had taken senior status, the case 

was reassigned to Judge Blakey the next day. Judge Blakey 

promptly struck Frank’s motion and vacated the briefing 

schedule, reasoning that the court lacked jurisdiction to consider the issue because the Post-Appeal Judgment had terminated all proceedings in the district court. That order, however, did not stop the named plaintiffs from moving two 

months later for court approval of the distribution of class settlement funds. The court denied the motion, again for want of 

jurisdiction, on March 6, 2017. Finally, on May 19, Frank 

moved under Federal Rule of Civil Procedure 60(b) to vacate 

the Post-Appeal Judgment and restore the Settlement Judgment as the applicable final judgment. That, he believed,

would allow the court to entertain his previous motion to disgorge any side payments. The district court denied the motion 

the same day. Frank appealed. Because all appellees declined 

to file briefs, Frank was the lone party represented on appeal. 
No. 17-2275 5

II

A

Before addressing the merits, we must consider whether 

Frank was entitled to bring a Rule 60(b) motion in the first 

place. Rule 60(b) contemplates relief only for “a party or its 

legal representative.” FED. R. CIV. P. 60(b). Thus, Frank must 

count as a “party” to bring the motion and, consequently, to 

bring this appeal. Absent class members, such as Frank, “may 

be parties for some purposes and not for others.” Devlin v. 

Scardelletti, 536 U.S. 1, 9–10 (2002). Generally, they are not parties for Rule 60(b) purposes. In re Four Seasons Sec. Litig., 

525 F.2d 500, 504 (10th Cir. 1975). But this is not an absolute 

rule. While we have never so held in a published opinion, “it 

has long been the general rule that some form of participation 

in the litigation is necessary before an unnamed class member 

can seek relief under Rule 60(b).” Adelson v. Ocwen Fin. Corp., 

621 F. App’x 348, 351 (7th Cir. 2015); see also In re Four Seasons, 

525 F.2d at 504; 6 NEWBERG ON CLASS ACTIONS § 18:40 (5th ed. 

2017); cf. Devlin, 536 U.S. at 10 (“The label ‘party’ does not indicate an absolute characteristic, but rather a conclusion about 

the applicability of various procedural rules that may differ 

based on context.”). Through his objection to the initial settlement and litigation of a prior appeal, Frank has brought himself within the bounds of Rule 60(b). To hold otherwise would 

risk “depriv[ing] nonnamed class members of the power to 

preserve their own interests in a settlement.” Devlin, 536 U.S. 

at 10. 

B

Rule 60(b) delineates six grounds upon which relief from 

a judgment can be granted. Frank invoked two in the district 
6 No. 17-2275

court and reasserts them here: Rule 60(b)(1) (“mistake, inadvertence, surprise, or excusable neglect”) and Rule 60(b)(6)

(“any other reason that justifies relief”). FED.R. CIV. P. 60(b)(1), 

(6). The two rules are mutually exclusive—Rule 60(b)(6), as a 

residual catchall, applies only if the other specifically enumerated rules do not. Brandon v. Chi. Bd. of Educ., 143 F.3d 293, 295 

(7th Cir. 1998). This difference is of great importance if the 

60(b) motion is filed outside the one-year limit prescribed for

Rules 60(b)(1)–(3), see Rule 60(c)(1), but Frank’s motion is 

timely no matter which subsection is used. 

Rule 60(b)(1) applies to “errors by judicial officers as well 

as parties.” Wesco Prods. Co. v. Alloy Auto. Co., 880 F.2d 981, 

984–85 (7th Cir. 1989). Rule 60(b)(6) is even more open-ended; 

it is flexible and gives courts “wide discretion.” Buck v. Davis, 

137 S. Ct. 759, 777 (2017). It is “available only in ‘extraordinary 

circumstances,’” but courts may consider “a wide range of 

factors” to determine if “extraordinary circumstances are present.” Id. at 777–78 (quoting Gonzalez v. Crosby, 545 U.S. 524, 

535 (2005)). Denials of Rule 60(b) motions are reviewed for 

abuse of discretion. Acosta v. DT & C Glob. Mgmt., LLC, 

874 F.3d 557, 560 (7th Cir. 2017). Considerable deference to the 

district court is appropriate because ruling on such a motion 

is not “a task that gives rise to ‘error’ (as opposed to questionable exercise of judgment), unless the judge leaves something 

important out of his analysis.” Metlyn Realty Corp. v. Esmark, 

Inc., 763 F.2d 826, 831 (7th Cir. 1985).

Unfortunately, the latter is what happened in this case: the

district court discussed only Rule 60(b)(1) in its order and 

failed to consider Frank’s Rule 60(b)(6) arguments. Had Frank 

relied only on Rule 60(b)(1), the district court’s decision would 

have been sound. The parties stipulated to the Post-Appeal 
No. 17-2275 7

Judgment, and usually a strategic decision is enough to support the denial of a Rule 60(b)(1) motion. Sadowski v. Bombardier Ltd., 539 F.2d 615, 618 (7th Cir. 1976) (“Rule 60(b) is not 

to be invoked to give relief to a party who has chosen a course 

of action which in retrospect appears unfortunate or where 

error or miscalculation is traceable really to a lack of care.”); 

see also 11 Charles Alan Wright & Arthur Miller, FED. PRAC.

& PROC. CIV. § 2858 (3d ed. 2017) (noting that “deliberately 

adopted stipulations” typically preclude Rule 60(b)(1) relief).

But Frank also invoked Rule 60(b)(6) in his motion, and particularly noted how the class context should affect Rule 60(b)’s 

equitable considerations. As we have said in another context, 

trial judges presiding over class actions may not always “assume the passive role that is appropriate when there is a genuine adverseness between the parties.” Redman, 768 F.3d at 

629. It is fine to say that individual parties must bear the responsibility for their deliberate litigation conduct and leave it 

at that. But class-action cases—with all their inherent agency 

problems—require an extra analytical step to ensure that the 

interests of the class are protected.

Rule 60(b)(6) is a suitable vehicle to consider the class’s interests. The Post-Appeal Judgment should have been vacated 

under that rule for two independent reasons. First, the principle announced in Safeco Insurance Company of America v. American International Group, 710 F.3d 754, 758 (7th Cir. 2013), supports 60(b)(6) relief in this case. In Safeco, Liberty Mutual objected to a class settlement resolving claims pertaining to another insurer’s misconduct in a reinsurance pool. Id. at 755–

56. Liberty Mutual appealed, but it moved to dismiss its appeal under Federal Rule of Appellate Procedure 42(b) after 

settling. Id. at 755. Although that motion followed a side settlement between the objector and defendant, we found no 
8 No. 17-2275

cause for alarm. Several features of the litigation lessened the 

possibility that Liberty Mutual had sold out the class: all class 

members were sophisticated financial institutions, and Liberty Mutual’s appeal implicated strong individual claims distinct from those of the class. Id. at 757. But we noted that if, 

despite these indicators of reliability, the settlement disappointed expectations, “a class member could file a motion in 

the district court under Fed. R. Civ. P. 60(b)(3) (misconduct by 

an opposing party) or 60(b)(6) (‘any other reason that justifies 

relief’).” Id. at 758. We now face such a situation. Objectors 

voluntarily dismissed their appeals. At this stage we do not 

know why, but there is a real risk that they did so at the expense of the class. Safeco points to Rule 60(b)(6) as a safety 

valve for precisely these situations.

In several ways, this is an easier case than the one hypothesized in Safeco. The compelling reasons suggesting that there 

was nothing unfair about the settlement in that case—a class 

of sophisticated financial institutions and an objector with individualized claims—are absent. This class is composed of ordinary consumers who, by terms of the settlement, could recover no more than $200 each, and likely much less. To justify 

even the filing fee, each objector must have been advancing 

claims on behalf of the class as a whole. Frank also asks for 

less than is typically at stake in a Rule 60(b) motion. He does 

not seek to unwind the class settlement or to relitigate the 

case. He asks only to effectuate the limited ancillary jurisdiction contemplated by the class settlement agreement. This 

makes the countervailing interest in finality under Rule 60(b) 

somewhat less compelling. Following Safeco, Rule 60(b)(6) relief was appropriate to ensure that no class sellout had occurred.
No. 17-2275 9

Second, the Post-Appeal Judgment should be vacated because the change in retained jurisdiction from the Settlement

Judgment is inherently problematic. Under the earlier judgment, the district court’s continuing jurisdiction over Frank’s 

claim and other settlement disputes is clear. The dismissal 

was “without prejudice” specifically to allow the court to retain “exclusive jurisdiction over this action, the Parties, and 

all Settlement Class members to determine all matters relating 

in any way to the Final Judgment and Order, the Preliminary 

Approval Order, or the Settlement Agreement ... .” Even if 

this Settlement Judgment had been made with prejudice, it 

would have allowed for ancillary enforcement jurisdiction because the terms of the settlement were embodied in a court 

order. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 

381 (1994); Hill v. Baxter Healthcare Corp., 405 F.3d 572, 577 (7th 

Cir. 2005). By superseding the Settlement Judgment, the PostAppeal Judgment constructively revised the settlement agreement itself. Without the agreed-upon court monitoring of the 

settlement, the class could no longer enforce the injunctive relief embodied in the settlement agreement or resolve issues 

with common fund distributions. 

Material alterations to a class settlement generally require 

a new round of notice to the class and a new Rule 23(e) hearing. In re Baby Prods. Antitrust Litig., 708 F.3d 163, 175 & n.10 

(3d Cir. 2013). This requirement “may be implicated when 

class counsel seeks to bargain away the right to enforce portions of a previously entered settlement.” Keepseagle v. Vilsack, 

102 F. Supp. 3d 306, 313–14 (D.D.C. 2015). The Post-Appeal 

Judgment removed that benefit from the class without giving 

absent members the option to weigh in. This need not have 

been the case. The stipulated judgment was filed pursuant to 

Rule 41(a)(1)(A)(ii), which typically requires no court order to 
10 No. 17-2275

effectuate dismissal. Nonetheless, the rule’s operation is 

“[s]ubject to Rule[] 23(e).” FED. R. CIV. P. 41(a)(1)(A). And that 

rule requires district court approval (and accompanying scrutiny) for any voluntary dismissal of a class action. FED. R. CIV.

P. 23(e). It does not appear that the Rule 23(e) procedures were 

applied to the Post-Appeal Judgment. We do not know 

whether class counsel intended to bargain away rights with 

the stipulated dismissal, or merely did so accidentally. But 

whatever the reason, the class was disadvantaged by the PostAppeal Judgment and received no offsetting benefit. “Rule 

60(b)(6) is fundamentally equitable in nature,” Ramirez v. 

United States, 799 F.3d 845, 851 (7th Cir. 2015), and this deleterious effect on the class’s interest separately supports relief 

under the rule. By failing to pursue these lines of analysis, the 

district court abused its discretion. The Post-Appeal Judgment must be vacated, and Frank must be allowed to pursue 

his theory pursuant to the ancillary jurisdiction preserved in 

the Settlement Judgment.

III

By all accounts, selfish settlements by objectors are a serious problem. See John E. Lopatka & D. Brooks Smith, Class 

Action Professional Objectors: What to do About Them?, 39 FLA.

ST. U. L. REV. 865, 871–72 (2012) (proposing an amendment to 

the appellate rules to allow greater appeal bonds to deter extortionate objectors); Marie Leary, STUDY OF CLASS ACTION 

OBJECTOR APPEALS IN THE SECOND, SEVENTH, AND NINTH 

CIRCUIT COURTS OF APPEALS 10 (Federal Judicial Center 2013) 

(finding that all 27 objector appeals in this circuit during the 

period studied were voluntarily dismissed). Admittedly, we 

are not without fault for contributing to the problem. We 

could have provided more scrutiny at an earlier stage before 
No. 17-2275 11

granting the Federal Rule of Appellate Procedure 42 motion 

to dismiss the appeal voluntarily. As we noted above, the indicia of reliability in Safeco were absent. But, as we briefly 

noted earlier, our oversight may be of limited future consequence. The Supreme Court has transmitted to Congress an 

amendment of Rule 23 designed to prevent this problem from 

recurring. If Congress allows the amendment to go into effect, 

see 28 U.S.C. § 2074(a), the new Rule 23(e)(5)(B) would require 

district court approval, after a hearing, of any “payment or 

other consideration” provided for “forgoing or withdrawing 

an objection” or “forgoing, dismissing, or abandoning an appeal.” See Proposed Amendments to the Federal Rules of Civil Procedure, Rules 5, 23, 62, and 65.1, Slip Order at *11 (U.S. Apr. 26, 

2018), https://www.supremecourt.gov/orders/courtorders/frcv18_5924.pdf. The pending amendments to Rule 23 

may solve the problem prospectively, but that does nothing 

for the case before us. 

We have nothing to say about the merits of Frank’s challenge. Indeed, we do not even know if there was anything 

amiss about these objector appeals. We thus refrain from discussing the remedies Frank has proposed. On remand, the 

parties and the court can tailor evidentiary proceedings to resolve any factual disputes before confronting the propriety of 

any remedy.

* * *

The district court mistook the scope of its discretion and

the nature of the problem before it when it denied Frank’s 

60(b) motion. Accordingly, we REVERSE and REMAND for further proceedings consistent with this opinion.