1On June 23, 2008, at the parties’ request, the court entered

an order staying this litigation so that the parties could pursue

settlement. The court lifts the stay to the extent necessary to

decide this motion.

 IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

WICHITA FALLS DIVISION

VICTORIA KLEIN, et al., §

 §

Plaintiffs, §

 § Civil Action No. 7:03-CV-102-D

VS. §

 §

O’NEAL, INC., d/b/a O’NEAL, §

JONES & FELDMAN §

PHARMACEUTICALS, et al., §

 §

Defendants. §

MEMORANDUM OPINION

 AND ORDER 

In this class action alleging personal injury and death claims

arising from the manufacture and distribution of E-Ferol Aqueous

Solution (“E-Ferol”), Lawrence V. Long, Jr. (“Long”) moves for

leave to opt out of the certified class. Although the deadline for

opting out expired more than two years ago, Long contends that his

failure to comply with the deadline should be excused as a matter

of procedural due process and on the basis of excusable neglect.

The other class plaintiffs (collectively, “class plaintiffs” unless

the context otherwise requires) and defendants O’Neal, Inc., d/b/a

O’Neal, Jones & Feldman Pharmaceuticals, CVS Revco D.S., Inc., and

Retrac, Inc. oppose the motion. For the reasons that follow, the

court declines to allow Long to opt out of the class at this time.1

 

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2In 2008 the court raised sua sponte that the class

certification decision should be reconsidered, and it directed the

parties to submit supplemental briefing addressing whether the

class should be decertified or modified. See Klein v. O’Neal,

Inc., 2008 WL 2152030, at *9 (N.D. Tex. May 22, 2008) (Fitzwater,

C.J.). Before the supplemental briefing was completed, the court

stayed the proceedings in this case. See supra note 1.

- 2 -

I

To decide Long’s motion, the court need not recount at length

the background facts and procedural history of this case. The

court will focus instead on the facts that apply to Long’s failure

to timely opt out. This is a class action alleging personal injury

and death claims arising from the manufacture and distribution of

E-Ferol, a pharmaceutical product administered intravenously to

premature infants between November 1983 and April 1984. In 2004

Judge Buchmeyer, before whom the case was then pending, certified

a plaintiffs class consisting of

[a]ll persons in the United States, including

any estate representatives or heirs of

deceased persons, who, during the period from

November 1, 1983, until April 30, 1984, were

administered E-Ferol. Included in the class

are parents, spouses, children, guardians, and

legal representatives of such persons with

direct or derivative claims.

Klein v. O’Neal, Inc., 222 F.R.D. 564, 566 (N.D. Tex. 2004)

(Buchmeyer, J.).2 It is undisputed that Long, whose late daughter

was administered E-Ferol in March and April 1984, is a member of

the class. Long’s daughter received E-Ferol while in the neonatal

intensive care unit at Miami Valley Hospital (“Miami Valley”) in

 

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Dayton, Ohio, and she subsequently died in June 1984.

Following certification of the class, class counsel began the

process of locating class members. On July 10, 2006 class counsel

mailed individual class notices to class members whom they had been

able to locate. Class counsel had been unable to obtain records,

however, from several hospitals known to have administered E-Ferol,

including Miami Valley. Thus on July 13, 2006, after receiving the

court’s approval, class counsel published the class notice in 35

newspapers across the country, including The Dayton Daily News

(Dayton, Ohio), The Blade (Toledo, Ohio), and USA Today. Long does

not dispute that he and his wife resided in Dayton in July 2006.

The court set September 11, 2006 as the opt-out deadline.

Class counsel continued to pursue records concerning potential

class members from Miami Valley, and they subsequently secured them

in October 2007. After identifying Long as a class member, class

counsel sent Long and his wife a November 1, 2007 letter informing

them of this class action and of their class membership. Long

asserts that he received this letter on November 5, 2007, and that

this was the first time he or his wife had any knowledge or reason

to believe that their daughter’s death was caused by E-Ferol. On

November 7, 2007 Long contacted a representative of class counsel

and discussed the case, and on November 13, 2007 he completed a

questionnaire and medical authorization. Long does not dispute

that he was aware of, and had access to, the class’s website, which

 

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included the pleadings, the class action notice, and the court’s

orders and decisions. In December 2007 Long and his wife signed

declarations attesting to their lack of knowledge concerning the

administration of E-Ferol to their daughter, and these declarations

were attached to “Class Plaintiffs’ Supplemental Response in

Opposition to Defendants’ Motion for Partial Summary Judgment:

Limitations.” Class counsel procured more medical records from

Miami Valley in January and February 2008, and class plaintiffs’

experts analyzed them and concluded that, in their opinion, E-Ferol

was a substantial cause of the death of Long’s daughter. Long was

advised of this finding in May 2008, at which time he informed a

representative of class counsel that he planned to sue Miami

Valley, who is not named as a defendant in the class action.

Long asserts that, in December 2007, his wife’s cancer, which

had been in remission, returned. His wife died on June 13, 2008.

Long asserts that, during his wife’s illness, he devoted his time

and energy to caring for her and for their children, and that he

was unable during this time to seek legal advice or to take legal

action concerning his deceased daughter.

In August 2008 Long contacted his current counsel, John B.

Pinney, Esquire (“Pinney”), and he formally retained Pinney on

September 4, 2008. Pinney was permitted to appear in this case on

behalf of Long, and in September and December 2008 he obtained

medical records relating to Long’s daughter. On October 8, 2008

 

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3Because Long does not dispute the sufficiency of the contents

of the notice, the court need not discuss the requisite contents in

detail.

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Long was appointed administrator of his daughter’s estate. He

filed the instant motion for leave to opt out on January 9, 2009.

II

Long contends that he should be permitted to opt out as a

matter of procedural due process. His due process argument is

conclusory and vague, and he cites no case law to support it.

Essentially, Long argues that because he did not receive actual

notice of the class action until after the opt-out deadline had

expired, he must now be given an opportunity to opt out.

A

The court certified the class in this case under Fed. R. Civ.

P. 23(b)(3), pursuant to which class members are given an

opportunity to opt out of the class. See Amchem Prods., Inc. v.

Windsor, 521 U.S. 591, 592-93 (1997). Additionally, under Rule

23(c)(2)(B), members of a class certified under Rule 23(b)(3) must

be afforded “the best notice that is practicable under the

circumstances, including individual notice to all members who can

be identified through reasonable effort.” Rule 23(c)(2)(B). The

notice given under Rule 23(c)(2)(B) must contain certain

information, including the fact that class members may request

exclusion from the class, the time and manner for requesting

exclusion, and the binding effect of a judgment on class members.3

 

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See id. The Rule 23(c)(2)(B) standard also fulfills due process

requirements. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156,

173-74 (1974). It is well established that notice by publication

can satisfy due process when information required to identify

individual class members cannot be procured through reasonable

effort. See id. (requiring that class members whose names and

addresses can be ascertained through reasonable effort be

individually notified); Hoge v. Parkway Chevrolet, Inc., 2007 WL

3125298, at *18 (S.D. Tex. Oct. 23, 2007) (“Courts have found that

publication notice can satisfy Rule 23.” (citing numerous cases));

In re Vivendi Universal, S.A., 242 F.R.D. 76, 107 (S.D.N.Y. 2007)

(“While individual notice, where reasonably possible, is required,

when class members’ names and addresses may not be ascertained by

reasonable effort, publication notice has been deemed adequate to

satisfy due process.”); In re Prudential Ins. Co. of Am. Sales

Practices, 177 F.R.D. 216, 232 (D.N.J. 1997) (“For those whose

names and addresses cannot be determined by reasonable efforts,

notice by publication will suffice under Rule 23(c)(2) and under

the due process clause.” (citing Mullane v. Cent. Hanover Bank &

Trust Co., 339 U.S. 306, 317-18 (1950))). If a class member

receives the best notice practicable and fails to opt out by the

deadline, he is bound by the court’s actions concerning the class,

 

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4

Although Long does not rely on Rule 23(e)(4) as a basis for

the relief he seeks, the court recognizes that if this case

settles, it may in its discretion refuse to approve the settlement

unless class members are given a second opportunity to request

exclusion from the class. See Rule 23(e)(4) (“If the class action

was previously certified under Rule 23(b)(3), the court may refuse

to approve a settlement unless it affords a new opportunity to

request exclusion to individual class members who had an earlier

opportunity to request exclusion but did not do so.”). The

possibility, however, that there may be another opportunity to opt

out in the context of a settlement does not of itself provide a

rationale for granting a class member’s request for exclusion that

is untimely under the first opt-out deadline imposed in accordance

with Rule 23(c)(2)(B)(vi). If it did, the mere possibility of a

second opt-out opportunity arising in connection with a settlement

could undermine the binding effect of the first opt-out deadline

that applies regardless whether a class action is settled. 

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including settlement and judgment.4 See Amchem Prods., 521 U.S. at

592-93; Reppert v. Marvin Lumber & Cedar Co., 359 F.3d 53, 56-57

(1st Cir. 2004) (citing Cooper v. Fed. Reserve Bank of Richmond,

467 U.S. 867, 874 (1984)).

B

Long does not contend that he could have been identified

through reasonable effort. Nor does he posit that the notice

undertaken at the court’s direction was not the best notice

practicable under the circumstances or was otherwise insufficient.

He argues instead that, even if he did have constructive notice and

it was the best notice practicable, he must be given an opportunity

to opt out after receiving actual notice. According to Long, he

“does not dispute that the notice by publication where the class

member does not have actual notice may, in some circumstances, be

deemed to afford adequate due process.” Long Reply Br. 4. But he

 

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contends that “the issue here is not whether [he] was given proper

notice——it is whether he can now opt out of the class when he,

effectively, was never given the opportunity to do so before.” Id.

Long’s argument misunderstands the nature of constructive

notice and the notice requirements. If a class member is given

proper notice, such as constructive notice by publication, he is

deemed to have been given the opportunity to opt out. To hold that

a class member who receives actual notice of a class action after

the opt out deadline must always be given another opportunity to

opt out, even though he received constructive notice before the

deadline, would defeat the purpose of constructive notice. Actual

notice would be the only type of notice that could bind a class

member. But actual notice is not invariably required. See, e.g.,

Eisen, 417 U.S. at 173-74; In re Nissan Motor Corp. Antitrust

Litig., 552 F.2d 1088, 1097 (5th Cir. 1977).

Long appears to recognize the flaw in his argument, so he also

argues that notice by publication only satisfies due process after

a final judgment is entered in the case or a settlement is fully

consummated. According to Long, if there has been no final

judgment or settlement in the class action, a class member must be

given an opportunity to opt out after receiving actual notice, even

if he has already received constructive notice. Long cites no

authority for this proposition, and the court has found none. The

court holds that an opt-out deadline may bind a class member who

 

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5

As noted, see supra note 4, Long does not base his motion or

any of his arguments on the possibility of a second opt-out under

Rule 23(e)(4). Moreover, the court’s discussion in this context is

not intended to relate to circumstances in which, in its

discretion, it “affords a new opportunity to request exclusion” as

a condition to approving a settlement.

- 9 -

has received the best notice practicable, regardless whether there

has been a final judgment or settlement in the case.5

The reasoning that appears to underlie Long’s contention is

that, if there has been no final judgment or settlement, there can

be no prejudice to other parties in allowing him to opt out after

the deadline. The court disagrees. Both defendants and class

plaintiffs oppose Long’s motion, contending that they will be

substantially prejudiced if he is allowed to opt out. This case

has been stayed since June 23, 2008 so the parties could focus on

negotiating a settlement. Long and Pinney have been aware of the

settlement discussions since at least September 2008. Both sides

are concerned that allowing Long to opt out now would undermine the

progress they have made and hinder their ability to reach a

mutually acceptable settlement. If Long is permitted to opt out,

defendants will be forced to separately defend his individual

lawsuit. This not only prejudices defendants but also the other

members of the plaintiffs class. In a class action settlement

setting, defendants seek and pay for global peace——i.e., the

resolution of as many claims as possible. Accordingly, allowing

plaintiffs to opt out of a class action after the deadline and

 

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6

As before, see supra notes 4 and 5, the court is not

addressing the possibility of a second opt-out period under Rule

23(e)(4). Moreover, the court’s reasoning applies regardless of

the possibility of a second opt-out. When parties negotiate the

settlement of a certified class action, they presumably factor in

the possibility that the court may exercise its discretion to allow

a new opportunity for individual class members to request

exclusion. But this is a predictable rule-based consideration that

potentially applies in every case in which a class is certified

under Rule 23(b)(3). The prospect of untimely opt-outs scattered

along the path between class certification and a tentative

settlement agreement——particularly during a time of active

settlement negotiations——is less predictable (if not unpredictable)

and can hamper the settlement of a class action that is in fact

fair, reasonable, and adequate to class members.

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during a period of active settlement negotiations so that they can

pursue their claims individually can make settlement less valuable

to defendants and less likely to occur. Such opt-outs can in turn

reduce the leverage of the plaintiffs class and the settlement

value of the case. In addition to forcing defendants to defend

Long’s individual lawsuit, allowing Long to opt out would create

the potential for other similarly situated class members to request

exclusion. Although the prejudice to the opposing parties may not

be as severe as it would be in a case where a settlement has

already been reached and approved, the parties would still be

prejudiced if Long were permitted to opt out at this time.6

The court concludes that due process does not require that

Long be given another opportunity to opt out after receiving actual

notice of the class action. Long received constructive notice

through publication in July 2006. He does not dispute the

sufficiency of this notice. He therefore had the opportunity to

 

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opt out before the September 11, 2006 deadline. Because

publication notice can satisfy due process, Long does not have the

right to opt out now, more than two years after the deadline

expired.

III

The court also holds that, even if Long was due another

opportunity to opt out after he received actual notice of the class

action, he did not exercise it within a reasonable time. 

A

Long asserts that he received actual notice on November 5,

2007. He did not move for leave to opt out until January 9, 2009,

more than 14 months later. Long contends that the court should

excuse this delay and permit his untimely opt out based on

excusable neglect. See Rule 6(b)(1)(B) (“When an act may or must

be done within a specified time, the court may, for good cause,

extend the time . . . on motion made after the time has expired if

the party failed to act because of excusable neglect.”). The court

finds that Long’s delay and untimely opt out should not be

permitted on this basis.

In determining whether a party should be granted additional

time to opt out based on excusable neglect, the court should apply

the factors set forth in Pioneer Investment Services Co. v.

Brunswick Associates L.P., 507 U.S. 380, 395 (1993). See

Silvercreek Mgmt., Inc. v. Banc of Am. Sec., LLC, 534 F.3d 469, 472

 

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(5th Cir. 2008). “Under [Pioneer Investment Services], the court

is to consider prejudice to the opposing party, length of the

delay, and reason for the delay in determining whether the

claimant’s neglect was excusable and the delay was made in good

faith.” Id. The determination whether a delay is excusable “is at

bottom an equitable one, taking account of all relevant

circumstances surrounding the party’s omission.” Pioneer Inv.

Servs., 507 U.S. at 395.

B

Although Long argues that there would be no prejudice to

defendants or to class plaintiffs if he were now allowed to opt

out, the court has already concluded that both defendants and class

plaintiffs would be prejudiced. See supra § II(B). The length of

delay is substantial. See, e.g., In re Terazosin Hydrochloride

Antitrust Litig., 2005 WL 2451957, at *1-*3 (S.D. Fla. July 8,

2005) (finding no excusable neglect where class members’ opt out

forms arrived between two and fours days after opt out deadline).

Long waited until more than 14 months after receiving actual notice

to attempt to opt out of the class. Long contends that much of

this delay should be excused because he was caring for his wife,

who was suffering from cancer, and for their children. The weight

of these obligations and the toll they must have taken on Long

cannot, of course, be underestimated or blithely ignored. It is

certainly reasonable that Long would have focused his attention and

 

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7The class members who were notified in July 2006 had a period

of approximately two months to request exclusion before the

September 11, 2006 deadline.

- 13 -

energy on caring for his wife and children. But even when the

court excuses Long from the delay attributable to the period when

his wife was dying from cancer and the months immediately following

her death (December 2007 to August 2008), a significant and

inexcusable period of delay remains. First, after receiving actual

notice on November 5, 2007, Long participated in the class action,

completing a questionnaire and medical authorization on November 13

and signing a declaration in December. He did not attempt to opt

out of the class at that time. Second, Long retained Pinney to

represent him on September 4, 2008, but neither Pinney nor Long

even inquired about opting out until four months later.7

 Pinney

allegedly was unable to obtain complete hospital records for Long’s

deceased daughter until December 2008, but this is not a sufficient

excuse. Obtaining complete records was not a prerequisite for

opting out, especially in light of the facts that Long at any time

could have requested copies of the records from class counsel,

Pinney obtained some of the records in September 2008, and class

counsel’s experts had already analyzed the records and Long had

been informed of their findings.

Defendants and class plaintiffs also assert that Long’s

request to opt out is not being made in good faith. Class

plaintiffs note that Long availed himself of the services and

 

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expertise of the class for 14 months before attempting to opt out.

And defendants point to the timing of the opt-out request. Long

and Pinney were aware of the settlement negotiations taking place

between defendants and class plaintiffs. In December 2008 they

were informed that an in-person settlement conference between the

parties’ representatives had been scheduled for January 16, 2009.

On January 2, 2009 Pinney sent a letter to defendants requesting to

know whether they would oppose Long’s opt-out motion. After

defendants responded that they would, Long filed the instant

motion. Defendants contend that the timing of the motion to opt

out indicates that Long is attempting to extort higher settlement

payments for himself, and that he is undertaking this abusive

tactic in bad faith. Long simply responds that he is acting in

good faith. The court need not decide whether Long is acting in

good faith, however, because it concludes that, even if he is, the

delay in moving to opt out should not be excused on the facts

presented here.

After considering the applicable factors, the court concludes

that Long has not established excusable neglect that justifies

waiting until January 9, 2009——more than two years after the opt

out deadline and fourteen months after receiving actual notice——to

move for leave to opt out. Long received actual notice of the

class action on November 5, 2007 and participated in the class

action in November and December 2007, but he did not attempt to opt

 

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out during that time. After formally retaining Pinney in September

2008, Long waited an additional four months to move for leave to

opt out when he knew that defendants and class plaintiffs were in

the middle of settlement negotiations. Thus even if Long was due

another opportunity to opt out after he received actual notice of

the class action, he did not exercise it in a reasonable amount of

time.

* * *

For the foregoing reasons, Long’s January 9, 2009 motion for

leave to opt out of class is denied.

SO ORDERED.

April 29, 2009.

_________________________________

SIDNEY A. FITZWATER

CHIEF JUDGE

 

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