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09-2718-cv

Janus Capital Mgmt. LLC v. Howard Vogel Retirement Plan, et al.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY

ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF

APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER

IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR

AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY

ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

1 At a stated term of the United States Court of Appeals for the Second Circuit, held at the

2 Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York,

3 on the 30 day of June, two thousand ten. th

4

5 PRESENT:

6

7 RALPH K. WINTER,

8 JOSEPH M. McLAUGHLIN,

9 DEBRA ANN LIVINGSTON,

10 Circuit Judges.

11 _______________________________________________

12

13 IN RE: OXFORD HEALTH PLANS, INC.:

14

15 JANUS CAPITAL MANAGEMENT LLC, 

16

17 Claimant-Appellant,

18 v. (09-2718-cv)

19

20 HOWARD VOGEL RETIREMENT PLAN, PBHG GROWTH II PORTFOLIO, PBHG LARGE

21 CAP GROWTH PORTFOLIO, PBHG SELECT 20 PORTFOLIO, PBHG LARGE CAP GROWTH

22 FUND, PBHG LARGE CAP 20 FUND, PUBLIC EMPLOYEES RETIREMENT ASSOCIATION

23 OF COLORADO,

24

25 Lead Plaintiffs,

26

27 METRO SERVICES, INC., et al., 

28

29 Plaintiffs,
 Pursuant to this Court’s order of March 8, 2010, granting Lead Plaintiffs’ motion to 1

remove their designation as appellees, there are no appellees in this appeal. See Order, Mar. 8,

2010 (No. 09-2718-cv). 

2

1 OXFORD HEALTH PLANS, INC., STEPHEN F. WIGGINS, WILLIAM M. SULLIVAN,

2 JEFFREY H. BOYD, ANDREW B. CASSIDY, ROBERT M. SMOLER, DAVID A FINKEL,

3 BRENDAN R. SHANAHAN, ROBERT B. MILLIGAN, JR., JAMES B. ADAMSON, FRED F.

4 NAZEM, THOMAS A SCULLY, BENJAMIN M. SAFERSTEIN, JOHN P. DRISCOLL, DAVID

5 B. SNOW, JR., JAY L. SILVERSTEIN, THOMAS TRAVERS, MARCIA J. RADOSEVICH,

6 PAUL RICKER, JEANNE WISNIEWSKI, KEVIN R. HILL, FRANK MEDICI, ALAN

7 SOKOLOW, ALFRED L. KOPIT, KPMG PEAT MARWICK LLP, 

8

9 Defendants. 

10 ______________________________________________

11

12 FOR CLAIMANT-APPELLANT: MARSHALL R. KING, Gibson Dunn & Crutcher LLP,

13 New York, NY; Mark A. Perry, Gibson Dunn &

14 Crutcher LLP, Washington, D.C., of counsel. 

15 Appeal from a judgment of the United States District Court for the Southern District of New

16 York (Seibel, J.). 

17 UPON DUE CONSIDERATION, it is hereby ORDERED, ADJUDGED, and DECREED

18 that the judgment of the district court be AFFIRMED. 

19 Claimant-Appellant Janus Capital Management LLC (“Janus”) appeals from a June 3, 2009

20 order of the United States District Court for the Southern District of New York (Seibel, J.) allowing

21 a distribution of certain funds from a class action settlement fund but, in relevant part, declining to

22 approve the distribution of funds to parties, like Janus, whose claims were untimely filed. The 1

23 district court had previously rejected all so-called “late-submitted claims” to the settlement in an oral

24 decision on May 7, 2009. Janus contends on appeal that the district court’s decision to exclude

25 Janus’s claim from the distribution constituted an abuse of discretion. We assume familiarity with

26 the remaining facts and procedural history of the case and with the issues presented for review. 

27 “[A] district court overseeing [a] settlement distribution has inherent power to accept late
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1 claims despite [the] contrary terms of [an] agreement” among the parties. In re Agent Orange Prod.

2 Liab. Litig., 821 F.2d 139, 145 (2d Cir. 1987) (describing the holding of Zients v. LaMorte, 459 F.2d

3 628 (2d Cir. 1972)), superseded in part by statute as noted in SEC v. TheStreet.com, 273 F.3d 222,

4 233 n.11 (2d Cir. 2001). Pursuant to Zients, a district court entertaining a late-submitted claim to

5 a settlement should examine the equities to determine whether to allow the claim. See Zients, 459

6 F.2d at 630-31. In the analogous context of determining whether a party has shown “excusable

7 neglect” of a deadline under an applicable federal rule, district courts make a similar “equitable”

8 determination, “taking account of all relevant circumstances surrounding the party’s” failure to act

9 in a timely manner. Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’Ship, 507 U.S. 380, 395

10 (1993). The factors a district court should consider include:

11 the danger of prejudice . . ., the length of the delay and its potential impact on judicial

12 proceedings, the reason for the delay, including whether it was within the reasonable

13 control of the movant, and whether the movant acted in good faith.

14 Id. In balancing the equities pursuant to Zients, it was proper for the district court in this case to look

15 to the Pioneer factors. See, e.g., In re Crazy Eddie Sec. Litig., 906 F. Supp. 840, 844 (E.D.N.Y.

16 1995). 

17 We have recognized in the past that, while there is “an institutionalized but limited flexibility

18 at the margin with respect to rights lost because they have been slept on,” the legal system relies on

19 deadlines to function, and that “every missed deadline” should not become “the occasion for the

20 embarkation on extensive trial and appellate litigation to determine the equities of enforcing the bar.”

21 Silivanch v. Celebrity Cruises, Inc., 333 F.3d 355, 367-68 (2d Cir. 2003). Therefore, we take a “hard

22 line” when applying the Pioneer factors, and, because in the ordinary case there will be little

23 prejudice or disruption caused by allowing a late-submitted claim, we focus our analysis on the
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1 asserted reason for the claimant’s delay, “including whether it was within the reasonable control of

2 the [claimant].” In re Enron Corp., 419 F.3d 115, 122 (2d Cir. 2005) (internal quotation marks

3 omitted). We review the district court’s decision to allow or disallow a late-submitted claim for

4 abuse of discretion. See, e.g., id. at 124 (reviewing for abuse of discretion bankruptcy court’s

5 application of thePioneer factors); cf. Manhattan-Ward, Inc. v. Grinnell Corp., 490 F.2d 1183, 1186

6 (2d Cir. 1974) (per curiam) (reviewing for abuse of discretion district court’s grant of a motion for

7 extension of time under Fed. R. Civ. P. 6(b)). 

8 We conclude that the district court did not abuse its discretion in declining to allow Janus’s

9 late-submitted claim. First, the district court did not, as Janus asserts, commit legal error by

10 considering itself inextricably bound to apply the court’s earlier deadline for the filing of claims.

11 Indeed, not only did the court discuss the application of the Pioneer factors, the court expressly

12 stated that it had “the power to vary the terms of a settlement agreement for equitable considerations”

13 and, in considering late-filed claims, that it “need[ed] to consider the excusable neglect

14 standard . . . .” May 7, 2009 Hg. Tr. at 17. The district court’s discussion of the importance of the

15 prior deadline was, as discussed above, entirely proper. 

16 We also find no abuse of discretion in the district court’s weighing of the Pioneer factors.

17 It was entirely within Janus’s “reasonable control” to file a timely claim with respect to its holdings

18 in the Berger funds. Enron, 419 F.3d at 122. Janus’s agent, State Street Bank and Trust Co. (“State

19 Street”), became custodian of the Berger funds in 2001, Sanders Decl. ¶ 16, and Janus provides no

20 explanation why, following this event, State Street did not seek to standardize the trading records

21 of the Berger funds with its own accounting system. Moreover,Janus concedes that State Street held

22 all the information regarding the Berger funds’ trading records on microfiche at the time the
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1 settlement was announced, and therefore could have discovered the Berger funds’ holdings in Oxford

2 Health Plans securities in time to file a claim. Id. ¶ 19. Finally, the district court did not clearly err

3 in concluding that allowing late-submitted claims would cause at least some prejudice to claimants

4 who had timely filed by diminishing those claimants’ pro rata share of the settlement funds. See May

5 7, 2009 Hg. Tr. at 18. 

6 We have considered Janus’s remaining arguments and we conclude that they are without

7 merit. For the foregoing reasons, the judgment of the district court is AFFIRMED. 

8 FOR THE COURT:

9 Catherine O’Hagan Wolfe, Clerk

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