In Re Vitamins Antitrust Class Actions

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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 21, 2003 Decided May 6, 2003

No. 02-7025

IN RE: VITAMINS ANTITRUST CLASS ACTIONS

Appeal from the United States District Court
for the District of Columbia
(No. 99ms00197)
–————
Jeffrey S. Cashdan argued the cause for appellant UCB
Chemicals Corporation. With him on the briefs was Kevin R.
Sullivan. Jeffrey S. Bucholtz entered an appearance.
Gerald G. Saltarelli argued the cause and filed the brief for
appellee Hill’s Pet Nutrition, Inc.
Before: GINSBURG, Chief Judge, and SENTELLE and
RANDOLPH, Circuit Judges.
Opinion for the Court filed by Circuit Judge SENTELLE.
SENTELLE, Circuit Judge: UCB Chemicals Corporation ap-
peals from a February 22, 2002 order of the district court
granting Hill’s Pet Nutrition Inc.’s (‘‘Hill’s Pet’’) Motion to
Modify the Final Order Approving Class Settlement and
Final Judgment entered by the district court on November

Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
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30, 2001. We affirm the order because the district judge did
not abuse his discretion when he found that Hill’s Pet’s
neglect in failing to timely opt out of the settlement was
excusable.

Background
The class settlement at issue in this case is one of the many
federal antitrust actions alleging price-fixing by suppliers of
vitamins. The claims against UCB and other providers of
choline chloride were consolidated before a single judge of the
United States District Court for the District of Columbia
under the title In re Vitamins Antitrust Litigation for pre-
trial proceedings. On July 25, 2001, the district court entered
an order certifying the UCB Settlement Class and prelimi-
narily approving the proposed settlement, in which UCB
agreed to pay $9 million for a complete release of claims
against it. The order contained a plan for notifying class
members of the settlement. The plan provided for mailing
notices to class members as well as publishing notices in
widely read industry periodicals and the Wall Street Journal.
The notices expressly stated that members would be bound
by the settlement and could opt out by sending a written
request postmarked before or on September 28, 2001. The
Claims Administrator mailed a notice to Hill’s Pet’s corporate
parent, at the same address to which prior notices, which had
elicited responses, had been sent. The notice was also posted
online. On November 30, 2001, the district judge entered a
final judgment approving the settlement. When Hill’s Pet’s
counsel reviewed an exhibit attached to the final order, on
December 10, 2001, he discovered that Hill’s Pet was not
listed among the class members who had timely opted out.
Two days later, he filed a Motion to Modify the Final Order
Approving the Class Settlement and Final Judgment to allow
Hill’s Pet to opt out of the settlement. The court granted
this motion pursuant to Fed. R. Civ. P. 6(b) and 60(b) after
finding that Hill’s Pet’s failure to file a timely opt-out notice
was the result of excusable neglect, not bad-faith, and that
UCB would not be substantially prejudiced.
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Analysis
This court reviews the district court’s decision for abuse of
discretion, which allows for reversal only if the district court
applied the wrong legal standard or relied on clearly errone-
ous findings of fact. See Peters v. Nat’l R.R. Passenger
Corp., 966 F.2d 1483, 1485 (D.C. Cir. 1992); Linder v. Dept.
of Defense, 133 F.3d 17, 24 (D.C. Cir. 1998). The district
court had discretion, pursuant to Fed. R. Civ. P. 6(b) and
Fed. R. Civ. P. 60(b), to modify its order so that Hill’s Pet
would be able to opt-out of the settlement beyond the agreed
opt-out date. Rule 6(b) states that ‘‘the court for cause
shown may at any time in its discretion TTT permit the act to
be done where the failure to act was the result of excusable
neglect.’’ Fed. R. Civ. P. 6(b). Additionally, Rule 60(b)
provides that ‘‘[o]n motion and upon such terms as are just,
the court may relieve a party or a party’s legal representative
from a final judgment, order, or proceeding for the following
reasons: (1) mistake, inadvertence, surprise, or excusable
neglect, TTT or (6) any other reason justifying relief from the
operation of the judgment.’’ Fed. R. Civ. P. 60(b).
The Supreme Court addressed the meaning of ‘‘excusable
neglect’’ in Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.
P’ship, 507 U.S. 380 (1993). The Court set forth factors to
consider when determining what kind of neglect will be
considered ‘‘excusable.’’ These include: (1) the danger of
prejudice to the party opposing the modification, (2) the
length of delay and its potential impact on judicial proceed-
ings, (3) the reason for the delay, including whether it was
within the reasonable control of the movant, and (4) whether
the movant acted in good faith. Id. at 395. The district
judge in the current case evaluated the factors articulated,
and found that UCB would not be substantially prejudiced by
Hill’s Pet’s untimely opt-out; the length of the delay was
short and would not impact judicial proceedings; and that
there was no indication that Hill’s Pet had acted in bad faith.
The court also found that the reason for the delay was within
Hill’s Pet’s reasonable control but that the other factors
outweighed the impact of this finding, and consequently
granted Hill’s Pet’s motion to modify the final order.
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On appeal, UCB urges this court to adopt a per se rule that
garden variety attorney inattention can never constitute ex-
cusable neglect. We decline and uphold the district court.
The Pioneer standard precludes the adoption of any such per
se rule. The Court in Pioneer purposely fashioned a flexible
rule which, by its nature, counsels against the imposition of a
per se rule on attorney neglect. ‘‘Although inadvertence,
ignorance of the rules, or mistakes construing the rules do
not usually constitute ‘excusable’ neglect, it is clear that
‘excusable neglect’ TTT is a somewhat ‘elastic concept’ and is
not limited strictly to omissions caused by circumstances
beyond the control of the movant.’’ Id. at 392. See Yesudian
ex rel. U.S. v. Howard Univ., 270 F.3d 969, 971 (D.C. Cir.
2001) (applying the excusable neglect standard without em-
phasis on any particular Pioneer factor.)
UCB argues that some of our sister circuits have suggested
that certain types of attorney neglect can never constitute
excusable neglect. The Eighth Circuit has stated in a recent
case, ‘‘Notwithstanding the ‘flexible’ Pioneer standard, experi-
enced counsel’s misapplication of clear and unambiguous pro-
cedural rules cannot excuse his failure to file a timely notice
of appeal.’’ Lowry v. McDonnell Douglas Corp., 211 F.3d
457, 464 (8th Cir. 2000). Likewise, the Eleventh Circuit has
held, ‘‘an attorney’s misunderstanding of the plain language
of a rule cannot constitute excusable neglect such that a party
is relieved of the consequences of failing to comply with a
statutory deadline.’’ Advanced Estimating Sys., Inc. v. Ri-
ney, 130 F.3d 996, 998 (11th Cir. 1997). We note that we
doubt the applicability of such precedents to the present case
because each involves an attorney’s failure to file a timely
notice of appeal, an issue of special interest to the courts of
appeal. Lowry, 211 F.3d at 458; Advanced Estimating Sys.,
130 F.3d at 997. By contrast, the current case involves a
case-management decision in a complex class action, in which
district court discretion is at its greatest. In any case,
because we find the question of whether attorney error may
constitute ‘‘excusable neglect’’ is within the discretion of the
district court and the court did not abuse its discretion, we
will affirm the modification of the final judgment.