Court Opinion

ID: 8630402
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:36:44.583715+00
Date Added: 2024-06-11T16:55:35.055574
License: Public Domain

SUMMARY ORDER

Appellant Elkmont Capital Ltd. (“Elk-mont”) appeals from a judgment of the United States District Court for the Southern District of New York (McKenna, J.). The district court denied its request for an extension of time to opt-out of a class settlement of a securities class action brought on behalf of investors in the Adelphia Communications Corporation (“Adelphia”) against various institutions, including Deloitte & Touche (“Deloitte”). We assume familiarity with the underlying facts and procedural history of this case, as well as the issues on appeal.
In December 2002, Elkmont sued De-loitte. Elkmont’s action was subsequently transferred by the Panel on Multi-district Litigation to the Southern District of New York where a consolidated class action that was brought on behalf of Adelphia investors was pending. On June 15, 2006, the district court preliminarily approved a class settlement of all actions related to the Adelphia litigation and directed lead plaintiffs’ counsel to mail notice of the settlement to all class plaintiffs, as well as publicize the settlement through other means, including the internet and major newspapers. Elkmont claims that it never received notice of the class settlement before the October 1, 2006 opt out deadline and that it found out about the settlement solely through correspondence with the other class plaintiffs on October 2, 2006. On November 2, 2006, Elkmont filed a motion to enlarge the opt-out period. The district court denied its motion and entered final judgment approving the settlement.
DISCUSSION
As an initial matter, we find that Elk-mont’s appeal is not moot. Although we strongly suspect that Arbitex Master Fund L.P., which filed a proof of claim in the class action settlement, received timely notice of the settlement before the opt-out deadline, the record on that point is not clear. Accordingly, we believe that Elk-mont may proceed with its appeal.
On a motion for a late opt out, a district court must determine whether the movant’s neglect was excusable, and whether either party would be substantially prejudiced by the court’s action. We review that determination for abuse of that discretion. See Supermarkets Gen. Corp. v. Grinnell Corp., 490 F.2d 1183, 1186 (2d Cir.1974). Elkmont argues first, that the procedures employed by the district court afforded insufficient notice and, conse*44quently, violated due process. Elkmont’s due process claim is reviewed de novo. United States v. Quinones, 313 F.3d 49, 60 (2d Cir.2002). Because notice of the settlement was reasonably provided through individually mailed notice to all known and reasonably identifiable class members, publication in several major newspapers, and entered on the district court’s docket sheet, actual notice was not necessary and the notice provided here was sufficient. It is clear that for due process to be satisfied, not every class member need receive actual notice, as long as class counsel “acted reasonably in selecting means likely to inform persons affected.” Weigner v. New York, 852 F.2d 646, 649 (2d Cir.1988).
Elkmont also argues that its failure to timely opt out of the class should be characterized as excusable neglect. “Excusable neglect may be found where the relevant circumstances reveal inadvertent delays, mistakes, or carelessness.... To establish excusable neglect, however, a movant must show good faith and a reasonable basis for noncompliance.” In re PaineWebber Ltd. P’ships Litig., 147 F.3d 132, 135 (2d Cir.1998) (internal citations omitted). The district court correctly found that Elkmont did not demonstrate a basis for its noncompliance given all of the signs of a likely settlement. Regardless, Elkmont did not demonstrate excusable neglect because, despite the fact it was aware of the settlement only one day after the opt out deadline, it still waited a full month to file its motion for an extension of time. We find no abuse of discretion. The district court’s judgment is AFFIRMED.