Court Opinion

ID: 3065275
Source: CourtListenerOpinion
Date Created: 2015-10-14 22:30:26.386354+00
Date Added: 2024-06-11T11:12:46.579882
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

MARK LEMOGE and ROXINA                          No. 08-56210
LEMOGE,
             Plaintiffs-Appellants,                D.C. No.
               v.                              3:07-cv-00620-
                                                   LAB-AJB
UNITED STATES OF AMERICA,
                                                   OPINION
              Defendant-Appellee.
                                         
        Appeal from the United States District Court
          for the Southern District of California
         Larry A. Burns, District Judge, Presiding

                 Argued and Submitted
          November 4, 2009—Pasadena, California

                    Filed December 7, 2009

       Before: Harry Pregerson and Ronald M. Gould,
Circuit Judges, and Myron H. Bright,* Senior Circuit Judge.

                    Opinion by Judge Gould

   *The Honorable Myron H. Bright, Senior United States Circuit Judge
for the Eighth Circuit, sitting by designation.

                               15943
                  LEMOGE v. UNITED STATES              15947

                        COUNSEL

David W. Baumgarten (argued), Yale & Baumgarten, LLP,
San Diego, California, for appellants Mark Lemoge and Rox-
ina Lemoge.

Karen P. Hewitt, United States Attorney, Southern District of
California, and Melanie A. Andrews (argued), Special Assis-
15948                 LEMOGE v. UNITED STATES
tant United States Attorney, for appellee United States of
America.

                              OPINION

GOULD, Circuit Judge:

  Mark and Roxina Lemoge appeal the district court’s denial
of their motion to set aside the dismissal of their action for
personal injuries under the Federal Torts Claims Act (FTCA)
against the United States and to extend time to serve the sum-
mons and complaint. The issue is whether the district court
abused its discretion under Federal Rule of Civil Procedure
60(b) by denying the Lemoges relief from the dismissal. We
have jurisdiction under 28 U.S.C. § 1291. We reverse and
remand.

                                   I

   In April 2004, Mark Lemoge suffered a serious leg injury
at a military facility when a concrete park bench collapsed
and fell on him.1 In April 2006, the Lemoges filed an adminis-
trative tort claim pursuant to the FTCA with the Department
of the Navy concerning that injury.

   The Lemoges’ administrative tort claim was denied, after
which, on April 5, 2007, the Lemoges filed a personal injury
action against the United States in the United States District
Court for the Southern District of California. In June 2007,
Mark Caruana, counsel for the Lemoges, sent a copy of the
summons and complaint to the Navy’s administrative-claims
attorney. On September 5, 2007, a Navy attorney forwarded
  1
   In assessing the issues concerning the Rule 60(b) motion, and whether
the district court abused its discretion in denying relief, we accept the
Lemoges’ factual allegations. See Laurino v. Syringa Gen. Hosp., 279
F.3d 750, 753 (9th Cir. 2002).
                   LEMOGE v. UNITED STATES               15949
correspondence to Caruana stating that the United States
Attorney’s office needed to be served. On September 18,
2007, the district court issued an order to show cause why the
action should not be dismissed for failure to serve the govern-
ment with the summons and complaint pursuant to Federal
Rule of Civil Procedure 4(m), which requires the defendant to
be served within 120 days after the complaint is filed. On
October 9, 2007, hearing nothing from the Lemoges, the dis-
trict court sua sponte dismissed the Lemoges’ action without
prejudice.

   During the time in which the Lemoges were to have served
the summons and complaint, Caruana suffered medical com-
plications, including a staph infection, from an injury to his
leg. Over several months, Caruana underwent three surgeries,
skin grafts, extensive therapy, and a full regimen of medica-
tions. Caruana states he was not able to “connect the dots”
and therefore did not timely serve the summons and com-
plaint and was not aware of the order to show cause or the
dismissal.

   Caruana subsequently discovered that the case had been
dismissed. The Lemoges concede that because more than six
months have passed since the denial of their FTCA claim,
they are time-barred from re-filing their action under 28
U.S.C. § 2401(b). Thus, on May 8, 2008, Caruana, on behalf
of the Lemoges, filed a motion to set aside the dismissal and
extend time to serve the summons and complaint (the “Mo-
tion”).

   Simultaneous to the above events, there was a short-lived,
related litigation between Granite State Insurance Company
(“Granite State”), Mark Lemoge’s employer’s workers’ com-
pensation insurer, and the government. On November 6, 2007,
after the Lemoges’ action was dismissed, Granite State filed
a workers’ compensation subrogation claim concerning Mark
Lemoge’s injury (the “Granite State Action”). On May 9,
15950              LEMOGE v. UNITED STATES
2008, the day after the Lemoges filed their Motion, Granite
State and the government settled the Granite State Action.

   The district court denied the Lemoges’ Motion orally at the
end of a July 7, 2008, hearing, and confirmed the denial
through an order filed one week later. The district court con-
strued the Lemoges’ Motion as a motion for relief under Fed-
eral Rule of Civil Procedure 60(b)(1) for excusable neglect.
Despite accepting that Caruana had suffered medical injuries
requiring extensive treatment, the district court concluded that
none of Caruana’s explanations justified the significant pas-
sage of time before the Motion was filed. The district court
also concluded that the government would be unfairly preju-
diced if the Lemoges’ action was reopened because the gov-
ernment relied on its dismissal in settling the Granite State
Action.

 The Lemoges appeal the district court’s denial of their
Motion.

                               II

   A district court’s denial of relief from a final judgment,
order, or proceeding under Federal Rule of Procedure 60(b)
is reviewed for abuse of discretion. De Saracho v. Custom
Food Mach., Inc., 206 F.3d 874, 880 (9th Cir. 2000). A dis-
trict court abuses its discretion by denying relief under Rule
60(b) when it makes an error of law or relies on a clearly erro-
neous factual determination. Bateman v. U.S. Postal Serv.,
231 F.3d 1220, 1223 (9th Cir. 2000).

   Federal Rule of Civil Procedure 60(b)(1) provides as fol-
lows: “On motion and just terms, the court may relieve a party
or its legal representative from a final judgment, order, or pro-
ceeding for the following reasons: [ ] mistake, inadvertence,
surprise, or excusable neglect.”

   [1] Excusable neglect “encompass[es] situations in which
the failure to comply with a filing deadline is attributable to
                        LEMOGE v. UNITED STATES                         15951
negligence,” Pioneer Inv. Servs. Co. v. Brunswick Assocs.
Ltd., 507 U.S. 380, 394 (1993), and includes “omissions
caused by carelessness,” id. at 388. The determination of
whether neglect is excusable “is at bottom an equitable one,
taking account of all relevant circumstances surrounding the
party’s omission.” Id. at 395. To determine when neglect is
excusable, we conduct the equitable analysis specified in Pio-
neer by examining “at least four factors: (1) the danger of
prejudice to the opposing party; (2) the length of the delay
and its potential impact on the proceedings; (3) the reason for
the delay; and (4) whether the movant acted in good faith.”
Bateman, 231 F.3d at 1223-24 (citing Pioneer, 507 U.S. at
395). Although Pioneer involved excusable neglect under
Federal Rule of Bankruptcy Procedure 9006(b), in Briones v.
Riviera Hotel & Casino, 116 F.3d 379 (9th Cir. 1997), we
concluded that the Pioneer standard governs analysis of
excusable neglect under Rule 60(b)(1). See id. at 381.

                                      A

   We conclude that the district court did not identify the
Pioneer-Briones standard or correctly conduct the Pioneer-
Briones analysis and that this was an abuse of discretion.2
While the district court conducted analysis related to the first
three factors, the district court did not consider the fourth fac-
tor, good faith, or, as required under the circumstances of this
case, the prejudice the Lemoges would suffer if their Motion
was denied.
  2
    In our recent en banc decision in United States v. Hinkson, ___ F.3d
___, No. 05-30303, 2009 WL 3645003 (9th Cir. Nov. 5, 2009 ) (en banc),
we refined and restated our test for abuse of discretion as comprising a
two-step inquiry. First, we “determine de novo whether the trial court
identified the correct legal rule to apply to the relief requested.” Id. at *11.
If the trial court did not identify the correct legal standard, it is an abuse
of discretion. Id. Second, a trial court abuses its discretion if its “applica-
tion of the correct legal standard was (1) illogical, (2) implausible, or (3)
without support in inferences that may be drawn from the facts in the
record.” Id. (quotations and citation omitted).
15952              LEMOGE v. UNITED STATES
   [2] The district court did not cite to Pioneer or Briones or
list the Pioneer-Briones factors. In Bateman, we held that dis-
trict courts should explicitly use the Pioneer-Briones frame-
work for analysis of excusable neglect under Rule 60(b)(1):

       Bateman argues that the district court abused its
    discretion because it failed to conduct the equitable
    analysis laid out in Pioneer and Briones. We agree.
    In its order denying relief, the district court cited
    Pioneer, but only for the proposition that “clients
    must be held accountable for the acts and omissions
    of their attorneys.” The court did not acknowledge
    Pioneer’s statement that “excusable neglect”
    includes cases of negligence, nor did it mention the
    equitable test established by Pioneer. The court also
    did not mention this court’s adoption of the equitable
    test for Rule 60(b)(1) cases in Briones.

        ....

       . . . The court would have been within its discre-
    tion if it spelled out the equitable test and then con-
    cluded that [the attorney] had failed to present any
    evidence relevant to the four factors. But it abused
    its discretion by omitting the correct legal standard
    altogether.

Bateman, 231 F.3d at 1224 (internal citation omitted). In
Bateman, we concluded that as long as the substance of the
equitable analysis called for by Pioneer-Briones is
undertaken, reversal may not be necessary:

       We would not ordinarily reverse a court simply
    for failing to articulate the Pioneer and Briones test,
    as long as it actually engaged in the equitable analy-
    sis those cases mandate. However, it does not appear
    the district court did so here . . . .
                   LEMOGE v. UNITED STATES                 15953
       While these factors [provided by the district court]
    are certainly relevant to the determination of whether
    [the attorney’s] conduct was excusable, they revolve
    around just one of the Pioneer and Briones
    considerations—the reason for the delay. The court
    made no mention of the other three: the prejudice to
    the defendant, the length of the delay and its poten-
    tial impact on the proceedings, and whether [the
    attorney] acted in good faith.

Id. We concluded that the district court abused its discretion
by applying the wrong legal standard, and remanded with
instructions to grant the Rule 60(b)(1) motion. Id. at 1225.

   As in Bateman, here “[t]he court did not . . . mention the
equitable test established by Pioneer” or “spell[ ] out the equi-
table test.” Id. at 1224. It is not, moreover, merely a matter of
the district court not citing and stating the test required by
Pioneer and by Briones. More importantly, we are concerned
that the substance of the district court’s analysis wholly omit-
ted discussion of one of the four factors said to be relevant by
the Supreme Court in Pioneer. Therefore, following the test
stated by us recently in United States v. Hinkson, we conclude
that the district court abused its discretion by not “identif[y-
ing] the correct legal rule” and omitting analysis of an impor-
tant part of that rule. ___ F.3d ___, No. 05-30303, 2009 WL
3645003, at *11 (9th Cir. Nov. 5, 2009 ) (en banc).

   There are substantial reasons why the courts of appeals and
the district courts should pay close heed to a standard that has
been expressly set by the United States Supreme Court, and
normally conform their analysis to it. National uniformity of
federal law is a virtue in its own right. See Ruth Bader Gins-
burg & Peter W. Huber, The Intercircuit Committee, 100
Harv. L. Rev. 1417, 1424-25 (1987) (“Uniformity promotes
the twin goals of equity and judicial integrity—similar treat-
ment of similar litigants secures equity, while it also inspires
confidence in the legal system, a confidence crucial to the
15954               LEMOGE v. UNITED STATES
effective exercise of judicial power.”) (citation omitted). But
pragmatic concerns limit the amount of cases the Supreme
Court is able to review. To aid uniformity of law, it is impor-
tant that the Supreme Court’s interpretations of law are
adopted and followed by lower courts. Moreover, we are told
that we are to pay close attention even to Supreme Court
dicta. See Fernandez-Ruiz v. Gonzales, 466 F.3d 1121, 1129
(9th Cir. 2006) (en banc) (“[A]s a lower federal court, we are
advised to follow the Supreme Court’s considered dicta.”)
(quoting Oyebanji v. Gonzales, 418 F.3d 260, 264-65 (3d Cir.
2005)). It follows with stronger logic that when a Supreme
Court case identifies explicitly just four factors to be consid-
ered in assessing a type of problem, then whatever else is dis-
cussed, the analysis of the lower court should normally
address the factors that the Supreme Court has identified. See,
e.g., Laurino v. Syringa Gen. Hosp., 279 F.3d 750, 753-54
(9th Cir. 2002) (holding that the district court abused its dis-
cretion after noting that the district court did not address
Pioneer-Briones’s good-faith factor); Bateman, 231 F.3d at
1224 (holding that the district court abused its discretion
where it considered only one of the Pioneer-Briones factors);
Cheney v. Anchor Glass Container Corp., 71 F.3d 848, 850
(11th Cir. 1996) (“The district court’s failure to . . . apply the
correct legal standard and factors as announced in Pioneer
constitute[s] an abuse of discretion.”).

   [3] The district court conducted some analysis relevant to
the Pioneer-Briones factors: the district court stated that the
government would be unfairly prejudiced if the case were
reopened, that the Lemoges’ Motion came seven months after
the case was dismissed, and that Caruana’s explanations did
not justify the significant passage of time before relief was
requested. This discussion loosely fits within the framework
of the first three Pioneer-Briones factors. But the district court
did not conduct any analysis relevant to the fourth factor,
good faith.

  [4] We have recognized that when a district court does not
address good faith when conducting the Pioneer-Briones
                   LEMOGE v. UNITED STATES                 15955
analysis, it may result in an abuse of discretion. In Laurino,
we reversed a district court’s denial of Rule 60(b)(1) relief
after noting that the district court did not apply the good-faith
factor. 279 F.3d at 753-54. We concluded that the district
court erred because, among other things, “the district court
made no finding of bad faith.” Id. at 754. Similarly, it was
error for the district court here not to make a finding as to
good faith, one of only four factors detailed by the Supreme
Court for analysis.

   Because the standard under Rule 60(b) is an equitable stan-
dard, see Briones, 116 F.3d at 381, it may follow that in some
circumstances a district court may satisfy the standard even
though omitting to discuss some specified factor. However,
we conclude that it will always be a better practice for the dis-
trict court to touch upon and analyze at least all four of the
explicit Pioneer-Briones factors, namely: “(1) the danger of
prejudice to the opposing party; (2) the length of the delay
and its potential impact on the proceedings; (3) the reason for
the delay; and (4) whether the movant acted in good faith.”
Bateman, 231 F.3d at 1223-24 (citing Pioneer, 507 U.S. at
395).

   [5] Not discussing good faith here does not seem to us to
be an irrelevancy. It is difficult to even assess whether this
case is close without knowing whether Caruana acted in good
faith in connection with his delays and with his explanations
that attributed the delays to his own injury. District courts
should be advised in all cases considering a Rule 60(b)
motion that it will be helpful to their analysis and important
to ours on appeal if they articulate a complete analysis of all
the factors that the Supreme Court has declared relevant.
Doing so will make clear the basis of the district court’s Rule
60(b) determination and will aid our review. Cf. United States
v. Taylor, 487 U.S. 326, 336-37 (1988) (“Where, as here,
Congress has declared that a decision will be governed by
consideration of particular factors, a district court must care-
fully consider those factors as applied to the particular case
15956              LEMOGE v. UNITED STATES
and, whatever its decision, clearly articulate their effect in
order to permit meaningful appellate review. Only then can an
appellate court ascertain whether a district court has ignored
or slighted a factor that Congress has deemed pertinent
. . . .”).

   [6] Morever, in the circumstances of this case, we think that
the district court also erred in its analysis of prejudice by not
considering the prejudice the Lemoges would suffer if they
were denied relief. In Pioneer, the Supreme Court stated that
“all relevant circumstances” must be considered. 507 U.S. at
395. We stated in Briones that “[t]hese four enumerated fac-
tors” are “not an exclusive list.” 116 F.3d at 381. Although
prejudice to the movant is not an explicit Pioneer-Briones
factor, and is not a factor that we think should be assessed in
each and every case evaluating a Rule 60(b) motion, prejudice
to the movant, in a case such as that before us, is one of the
“relevant circumstances” that should be considered when
evaluating excusable neglect.

   It is worth noting that there is always prejudice to a movant
whenever an untimely complaint is rejected, as for example
when that is required by a statute of limitations. In such a
case, the established law reflects a balance between the needs
of society for dispute resolution in a specified period and the
needs of parties for justice, and lateness cannot be excused
merely because the movant is prejudiced. However, unlike a
statute-of-limitations standard, the standard for permissibly
expanding the period for service under Rule 4(m) has embed-
ded within it a concern for prejudice to the movant. We have
in a prior decision expanded the scope of the “prejudice”
inquiry when conducting analysis under Rule 4(m) to include
the prejudice that would be suffered by a plaintiff in the event
of a dismissal for failure to timely serve:

       The prejudice inquiry might also include consider-
    ation of what prejudice the plaintiff . . . would suffer
    if the case were dismissed. A dismissal for untimely
                   LEMOGE v. UNITED STATES                 15957
    service is required to be a dismissal without preju-
    dice . . . . It is conceivable . . . that prejudice might
    result from a dismissal without prejudice if, for
    example, the statute of limitations had expired. The
    existence of prejudice of this kind could affect what
    action a court might choose to take in response to
    untimely service of process.

United States v. 2,164 Watches, More or Less, Bearing a Reg-
istered Trademark of Guess?, Inc., 366 F.3d 767, 772 (9th
Cir. 2004). Thus, relief under Rule 4(m) “may be justified, for
example, if the applicable statute of limitations would bar the
re-filed action.” Fed. R. Civ. P. 4, Advisory Committee Note
to 1993 Amendments, Subdivision (m).

   [7] We hold that at least where the movants’ Rule 60(b)(1)
motion (1) seeks to set aside a dismissal that arises from non-
compliance with Rule 4(m), (2) the movants cannot re-file
their action because the statute of limitations has run, and (3)
there is no or only slight prejudice to the opposing party if
relief is granted, the district court should consider, and give
appropriate weight to, the movants’ prejudice if relief is
denied. Here, the district court acknowledged the Lemoges’
argument that they would be prejudiced by the denial of relief
because they would be barred by the statute of limitations
from re-filing their action. But the district court neither con-
sidered prejudice to the Lemoges in its analysis of prejudice,
nor gave it any apparent weight.

                               B

   [8] Turning to its application of the specific Pioneer-
Briones factors, the district court in our view erred by con-
cluding that the Lemoges did not establish excusable neglect
sufficient for relief under Rule 60(b)(1). First, the government
would not be prejudiced if the Lemoges were granted relief;
instead, the Lemoges would suffer the “ultimate” prejudice
absent relief because the statute of limitations on their claim
15958              LEMOGE v. UNITED STATES
has run. Second, the length of the delay was not unreasonable
given the circumstances. Third, Caruana offered credible rea-
sons for the delay. Fourth, there is no indication that Caruana
or the Lemoges acted in bad faith.

   As to the first factor, prejudice, the district court accepted
the government’s representation that absent the dismissal, the
government would have approached the Granite State Action
differently and would likely not have settled with Granite
State. The district court erred in concluding that the govern-
ment would be prejudiced on this basis if relief were granted.

   [9] Prejudice requires greater harm than simply that relief
would delay resolution of the case. TCI Group Life Ins. Plan
v. Knoebber, 244 F.3d 691, 701 (9th Cir. 2001) (“[M]erely
being forced to litigate on the merits cannot be considered
prejudicial for purposes of lifting a default judgment.”). The
government offered no argument for how it would be preju-
diced other than its claim that it likely would not have settled,
and would have approached differently, the Granite State
Action if it knew the litigation concerning the Lemoges’
action would continue. The government does not indicate how
it would have changed its strategy in the Granite State Action,
or that a different strategy would have benefitted the govern-
ment. As the government settled the Granite State Action, the
government must have thought that payment of the settlement
sum was a better deal for it than taking a chance litigating the
dispute. The government’s bare assertions do not establish
prejudice, particularly in light of the nature of California
workers’ compensation law. Under California workers’ com-
pensation law, an employer’s insurer’s recovery is limited to
workers’ compensation benefits paid or owed. See Engle v.
Endlich, 12 Cal. Rptr. 2d 145, 156 (Cal. Ct. App. 1992). If an
employer’s insurer recovers workers’ compensation benefits,
this sum cannot be recovered by an employee in a separate
suit. See Demkowski v. Lee, 284 Cal. Rptr. 919, 923-925 (Cal.
Ct. App. 1991). Thus, double recovery of workers’ compensa-
tion benefits cannot occur if the Lemoges’ action is reopened.
                    LEMOGE v. UNITED STATES                 15959
Id. The government has pointed to no tangible harm that it
will suffer if the Lemoges are granted relief.

   [10] Prejudice to the Lemoges if relief is denied is also an
important consideration under these circumstances. The
Lemoges’ Rule 60(b)(1) motion seeks to set aside a dismissal
for non-compliance with Rule 4(m)’s service requirements.
The Lemoges cannot re-file their action because the statute of
limitations has run. And the government will not be preju-
diced if the Lemoges are granted relief. In contrast to the lack
of prejudice to the government if the Lemoges are granted
relief, the Lemoges will suffer substantial prejudice absent
relief because they cannot re-file their action. Indeed, the
Lemoges would endure the ultimate prejudice of being for-
ever barred from pursuing their claims.

   As to the second factor, the length of the delay, Federal
Rule of Civil Procedure 60(c) requires that a Rule 60(b)
motion be made “within a reasonable time” and “no more
than a year after the entry of the judgment or order or the date
of the proceeding.” “What constitutes ‘reasonable time’
depends upon the facts of each case, taking into consideration
the interest in finality, the reason for delay, the practical abil-
ity of the litigant to learn earlier of the grounds relied upon,
and prejudice to the other parties.” Ashford v. Steuart, 657
F.2d 1053, 1055 (9th Cir. 1981) (per curiam).

   [11] The Lemoges’ Motion was brought within a year of
the dismissal and within a reasonable amount of time. The
Lemoges sought relief about seven months after the case was
dismissed. According to the district court, in spite of Car-
uana’s third surgery in November, he should have been able
to tend to his law practice by, at the latest, March 2008, but
did not bring the Motion until May. Under the district court’s
view, Caruana waited at least two months after he should
have been able to return to his law practice before filing the
Motion. But this delay is insubstantial when viewed in light
of Caruana’s traumatic medical issues that still afflicted him
15960               LEMOGE v. UNITED STATES
as of the time of the hearing. Caruana testified at the hearing
that while his most recent surgery was in November 2007, the
surgeries were ongoing and he was still experiencing swell-
ing. It is understandable that, as a sole practitioner, it would
take Caruana months to get back on his feet and to catch up
on the status of his cases while recovering from surgery.
Under the totality of the circumstances, the Lemoges brought
the Motion within a reasonable time.

   [12] As to the third factor, the reason for the delay, the dis-
trict court erred in its conclusion that Caruana did not provide
adequate reasons for the delay. Caruana’s inability to identify
the correct agency to serve may have been negligent, and seri-
ously so, but it was nonetheless, in the circumstances here,
excusable negligence if merely a good-faith mistake. Car-
uana’s June 2007 letter to the Navy, sent before his medical
problems arose, demonstrates that he was trying to ascertain
how to successfully prosecute the Lemoges’ FTCA claim.
The district court noted that Caruana “was expressly informed
by letter dated September 5, 2007 . . . [that] the proper agency
for service of any civil complaint was the United States Attor-
ney’s Office” and was later notified through the district
court’s order to show cause that service had not been com-
pleted. But Caruana’s medical problems, which the district
court accepted, explain why Caruana did not review the Navy
attorney’s September 5, 2007, letter, why he did not respond
to the district court’s order to show cause, and why he did not
file the Motion until seven months after the case had been dis-
missed. There is no question that Caruana could have handled
his practice better, but under the circumstances, Caruana pro-
vided adequate reasons for the delay.

   [13] As to the fourth factor, good faith, the district court did
not discuss this factor. We conclude that “there is no evidence
that [Caruana] acted with anything less than good faith. His
errors resulted from negligence and carelessness, not from
deviousness or willfulness.” Laurino, 279 F.3d at 753 (quot-
ing Bateman, 231 F.3d at 1225). The government argues that
                   LEMOGE v. UNITED STATES                 15961
even though the district court did not discuss good faith, we
should infer that the district court believed that Caruana failed
his clients by not diligently pursuing his cases. The govern-
ment’s argument is misplaced. The district court merely con-
cluded that Caruana did not provide an adequate reason for
not diligently prosecuting the Lemoges’ action. See id. We do
not infer from this that the district court found that Caruana
acted in bad faith. To the contrary, the district court appeared
to be sympathetic to the injured status and situation of Car-
uana. The district judge stated at the hearing, “I hate to sound
like I am hard hearted about [granting relief], but . . . I just
[don’t] think [the legal standard] can be met in this case.” If
any inference at all can be drawn, it would be that the district
court did not think that Caruana acted in bad faith, but felt
compelled, erroneously, to deny relief on other grounds.

   [14] In sum, we conclude that under the total circum-
stances, the Lemoges have demonstrated excusable neglect.
We therefore reverse the district court’s denial of the Rule
60(b)(1) Motion and consequent continued dismissal of the
case because the complete test from Pioneer-Briones was not
recognized by the district court and because each of the
Pioneer-Briones factors, as we consider this appeal, weighs in
favor of granting relief to the Lemoges.

                              III

  The district court, having concluded that the dismissal
should stand, did not reach the issue of whether time should
be extended to allow the Lemoges an opportunity to serve the
summons and complaint. Federal Rule of Civil Procedure
4(m) governs this inquiry and provides as follows:

    If a defendant is not served within 120 days after the
    complaint is filed, the court—on motion or on its
    own after notice to the plaintiff—must dismiss the
    action without prejudice against that defendant or
    order that service be made within a specified time.
15962                  LEMOGE v. UNITED STATES
      But if the plaintiff shows good cause for the failure,
      the court must extend the time for service for an
      appropriate period.

Rule 4(m) provides two avenues for relief. The first is manda-
tory: the district court must extend time for service upon a
showing of good cause. In re Sheehan, 253 F.3d 507, 512 (9th
Cir. 2001).3 The second is discretionary: if good cause is not
established, the district court may extend time for service
upon a showing of excusable neglect. Id. at 512, 514. Exercise
of discretion to extend time to complete service is appropriate
when, for example, a statute-of-limitations bar would operate
to prevent re-filing of the action. See Efaw v. Williams, 473
F.3d 1038, 1041 (9th Cir. 2007); see also 2,164 Watches, 366
F.3d at 773. The Lemoges have established excusable neglect
and concede that they are time-barred from re-filing their
action and would be prejudiced if they could not complete
service. Therefore, we conclude that relief under Rule 4(m) is
appropriate and on remand should be granted.

                                   IV

   [15] The district court abused its discretion by applying the
wrong legal standard. Proper application of the Pioneer-
Briones excusable-neglect analysis under Rule 60(b)(1)
requires consideration of all four factors and also requires giv-
ing proper weight to the movants’ prejudice under the circum-
stances presented by this case. The Lemoges have
demonstrated excusable neglect under Pioneer-Briones and
the dismissal should be set aside on that basis. Furthermore,
because the statute of limitations has run preventing the
  3
    Good cause to avoid dismissal may be demonstrated by establishing,
at minimum, excusable neglect. See Boudette v. Barnette, 923 F.2d 754,
756 (9th Cir. 1991). In addition to excusable neglect, a plaintiff may be
required to show the following factors to bring the excuse to the level of
good cause: “(a) the party to be served personally received actual notice
of the lawsuit; (b) the defendant would suffer no prejudice; and (c) plain-
tiff would be severely prejudiced if his complaint were dismissed.” Id.
                  LEMOGE v. UNITED STATES              15963
Lemoges from re-filing their action, extending time to com-
plete service under Rule 4(m) is appropriate. On remand, the
district court is instructed to grant the Lemoges’ Motion and
enter an order providing the Lemoges a reasonable amount of
time to serve the government with the summons and com-
plaint.

  REVERSED and REMANDED.