UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 96-1780
MARY V. PRATT,
Plaintiff - Appellant,
v.
KELLEY C. PHILBROOK,
Defendant - Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge]
Before
Stahl and Lynch, Circuit Judges,
and Woodlock,* District Judge.
Edward W. McIntyre for appellant.
Paul G. Pino, with whom Clark, Balboni & Gildea was on brief
for appellee.
March 19, 1997
* Of the District of Massachusetts, sitting by designation.
WOODLOCK, District Judge. At a settlement conference
WOODLOCK, District Judge.
with the trial judge, the parties announced they had agreed upon
terms to resolve this case. The trial judge told them that he
would enter a 60-day Settlement Order of Dismissal and invited
them to return to him if problems arose during that time period
which impeded consummation of the settlement. Within a day such
problems arose but the parties did not alert the court. After
sixty days passed and the trial court heard nothing further from
the parties, the dismissal became final by operation of the
settlement order. About three weeks later, plaintiff's counsel,
who ultimately framed his failure to forestall the dismissal as
an instance of excusable neglect under Fed. R. Civ. P. 60(b),
began to seek to have the dismissal vacated and the case
reopened. The trial judge declined, observing that if a
settlement order of dismissal were vacated under such
circumstances, the order would essentially be meaningless.
Although the trial judge's views are not unreasonable,
the Supreme Court recently has signalled a substantial degree of
elasticity in the definition of "excusable neglect."
Accordingly, we remand this matter to the trial judge to consider
whether the plaintiff has satisfied the latitudinarian standards
for excusable neglect the Supreme Court has outlined.
I
I
In Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.
Partnership, 507 U.S. 380 (1993), the Supreme Court phrased the
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question presented as whether an attorney's inadvertent failure
to file a proof of claim in a Chapter 11 Bankruptcy
reorganization case within the deadline set by the Court could
constitute "excusable neglect" within the meaning of Fed. R.
Bank. P. 9006(b)(1). Id. at 383.
The Court declined to limit the "neglect" which might
be excusable to those circumstances caused by intervening
circumstances beyond a party's control. Rather, the Court
concluded that "Congress plainly contemplated that the courts
would be permitted, where appropriate, to accept late filings
caused by inadvertence, mistake, or carelessness." Id. at 388.
The Court further indicated that the concept of "neglect" for
purposes of Fed. R. Civ. P. 60(b) "encompass[es] situations in
which the failure to comply with a filing deadline is
attributable to negligence." Id. at 394.
As to the requirement that the neglect be "excusable,"
the Court established a balancing test which requires an
equitable determination "taking account of all relevant
circumstances surrounding the party's omission." Id. at 395.
Such factors were found to include "the danger of prejudice to
[an adverse party], the length of the delay and its potential
impact on judicial proceedings, the reason for the delay,
including whether it was within the reasonable control of the
movant, and whether the movant acted in good faith." Id.
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Pioneer appeared on its face to resolve only a narrow
issue of bankruptcy practice. But by construing "excusable
neglect," a phrase used throughout the Federal Civil,1 Criminal2
and Appellate3 Rules of Procedure, Pioneer must be understood to
provide guidance outside the bankruptcy context.
That the Pioneer test for "excusable neglect" was
intended to extend beyond the bankruptcy context was emphasized
by the Supreme Court last term in Stutson v. United States, 116
S. Ct. 600 (1996), when the Court summarily granted a petition
1 The phrase "excusable neglect" appears in Fed. R. Civ. P.
Rules 6(b), 13(f) and 60(b). The Supreme Court in Pioneer
referred explicitly to each one of these rules. Pioneer, 507
U.S. at 391-93. The Court specifically observed that in Fed. R.
Civ. P. 6(b), as in Bankruptcy Rule 9006(b) which it was
construing, "there is no indication that anything other than the
commonly accepted meaning of [excusable neglect] was intended."
Id. at 391. Since Pioneer, courts have concluded the Pioneer
standard of "excusable neglect" should apply to Fed. R. Civ. P.
6(b). See, e.g., Committee for Idaho's High Desert, Inc. v.
Yost, 92 F.3d 814, 825 n.4 (9th Cir. 1996); 44 Liquormart, Inc.
v. Rhode Island, 940 F. Supp. 437, 440 (D.R.I. 1996).
2 Fed. R. Crim. P. 45(b) permits courts to enlarge the time
limits set for certain actions if failure to act within the
specified time was the result of "excusable neglect." The Court
in Pioneer also referred to the use of the phrase "excusable
neglect" in the Criminal Rules by noting that Rule 45(b), "like
[Bankruptcy] Rule 9006(b), was modeled after [Fed. R. Civ. P.]
Rule 6(b)." 507 U.S. at 392 n.9.
3 The Court in Pioneer referenced the phrase "excusable neglect"
in Fed. R. App. P. 4(a)(5). The Court placed this reference in a
footnote explaining why it had granted certiorari on the issue of
"excusable neglect." Id. at 387 n.3. In that explanation, the
Court included the fact that "[t]he Courts of Appeals similarly
have divided in their interpretations on 'excusable neglect' as
found in Rule 4(a)(5)." Id. We have since held that "Pioneer's
exposition of excusable neglect . . . applies equally to Fed. R.
App. P. 4(a)(5)." Virella-Nieves v. Briggs & Stratton Corp., 53
F.3d 451, 454 n.3 (1st Cir. 1995).
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for certiorari, vacated the judgment below and remanded the case
(GVR) for further consideration of the applicability of Pioneer
to a failure to file a criminal appeal within the 10-day period
called for by Fed. R. App. P. 4(b). While not definitively
determining the scope of Pioneer, the Supreme Court's use of the
GVR procedure in Stutson is an exercise of a reviewing court's
prudential powers to permit a lower court that had not directly
confronted an intervening clarification in the law to have the
first opportunity to adjust or correct its earlier decision. As
the Court noted in a companion case discussing resort to the GVR
procedure, Lawrence on behalf of Lawrence v. Chater, 116 S. Ct
604 (1996):
Where intervening developments, or recent
developments that we have reason to
believe the court below did not consider,
reveal a reasonable probability that the
decision below rests upon a premise that
the lower court would reject if given the
opportunity for further consideration,
and where it appears that such a
redetermination may determine the
ultimate outcome of the litigation, a GVR
order is, we believe, potentially
appropriate.
As did the Supreme Court in Stutson, we deal with the
need to evaluate the potential applicability of the balancing
test announced in Pioneer to a different realm of federal
procedure. The importance of permitting the trial judge--who did
not have Pioneer brought to his attention but is more familiar
with the dynamics of the settlement process that broke down here-
-the opportunity of developing the record more fully is plain.
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In the interests of justice, the trial judge should be afforded
the full opportunity to calibrate the balance in the first
instance, particularly if there is a reasonable probability that
a different outcome would result. A review of the course of
proceedings below suggests that there is such a probability.
II
II
Exercising the hands-on case management in pursuit of
settlement encouraged by the Civil Justice Reform Act of 1990,4
4 The Civil Justice Reform Act of 1990 ("the CJRA") is Title I
of the Judicial Improvements Act of 1990, Pub. L. No. 101-650,
104 Stat. 5089. The CJRA, which is codified at 28 U.S.C. 471-
82, requires that each United States District Court implement a
plan in order, inter alia, to "improve litigation management, and
ensure just, speedy, and inexpensive resolution of civil
disputes." 28 U.S.C. 471. The CJRA lists guidelines for
litigation management that federal courts may consider in
formulating their plans. These include, in pertinent part:
(2) early and ongoing control of the pretrial process
through involvement of a judicial officer . . .; (3)
. . . careful and deliberate monitoring through a
discovery-case management conference or a series of
such conferences . . . .
Id. 473(a).
While the CJRA did not focus on judicial involvement in the
settlement process, the Act reinforced the 1983 amendments to
Fed. R. Civ. P. 16, which were designed to recognize the
"informal use of pretrial conferences to promote settlement
[through] increased judicial settlement efforts." Stephen McG.
Bundy, The Policy in Favor of Settlement in an Adversary System,
44 Hastings L.J. 1, 58 (1992). The CJRA "implie[d] that a local
expense and delay reduction plan that authorizes judges to compel
represented parties to participate in settlement conferences . .
. is lawful. . . ." Id. at 60.
The CJRA plan for the District of Massachusetts accepted that
implication and directed active encouragement of settlement
efforts by the judicial officer. The plan provides that:
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At every conference conducted under these
rules, the judicial officer shall inquire
as to the utility of the parties
conducting settlement negotiations,
explore means of facilitating those
negotiations, and offer whatever
assistance that may be appropriate in the
circumstances. Assistance may include a
reference of the case to another judicial
officer for settlement purposes.
Whenever a settlement conference is held,
a representative of each party who has
settlement authority shall attend or be
available by telephone.
Rule 4.02 Settlement, Expense and Delay Reduction Plan of the
United States District Court for the District of Massachusetts
(Adopted Nov. 18, 1991).
The District Court's CJRA Plan is implemented by local rules
mandating settlement discussions as part of case management
procedures. See, e.g., L.R. 16.1(C) "Early Assessment of Cases"
(requiring settlement proposals in advance of initial scheduling
conference); L.R. 16.3(A)(1) "Case Management Conferences"
(directing exploration of "possibility of settlement" at each
case management conference); L.R. 16.4(B) "Alternative Dispute
Resolution" (mandating inquiry by judicial officer concerning
settlement at every conference conducted under Local Rules).
We note that while current legislation and rulemaking
initiatives have been encouraging active judicial involvement in
pursuing settlements, a relatively recent examination of the
judicial role in the process strikes a cautionary note.
Once we recognize that all components of
the intricate ecology of disputing are
linked in complex and sometimes
paradoxical ways to what courts do, it is
manifest that the obligation of seeing
justice is done is not discharged by
uncritical celebration of settlement (or
uncritical condemnation of it). It
requires a discriminating appreciation of
the complex dynamics of various species
of settlements in different bargaining
arenas and an appreciation of the limited
capacity of the devices for regulating
them. Settlement is not the answer; it
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the trial judge in this motor vehicle accident diversity case,
brought by a then 89-year-old plaintiff, set the matter down for
a settlement conference on January 17, 1996. In order to ensure
a full discussion of the possible ramifications of settlement, he
directed not only that the parties and their attorneys but also
the attorney for a non-party potential claimant and a
representative of the defendant's insurance company be present.
After separate discussions with the trial judge, the parties
advised the court they were prepared to settle the case both as
to the plaintiff and as to the non-party claimant within the
policy limits. The judge then informed counsel that he would
issue a 60-day Order of Dismissal permitting them the opportunity
to tie up any loose ends regarding the settlement. He expressly
instructed the parties that the 60-day Order of Dismissal "will
be the end of the case as far as I'm concerned." He emphasized,
however, that "if you have any problems . . . let me know and we
can restore the case to the docket and pursue it."
The following day, January 18, 1996, the 60-day Order
issued from the court providing "this action is dismissed without
costs and without prejudice to the right, upon good cause shown
within sixty (60) days, to reopen the action if settlement is not
is the question.
Marc Galanter & Mia Cahill, "Most Cases Settle": Judicial
Promotion and Regulation of Settlements, 46 Stan. L. Rev. 1339,
1391 (1994).
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consummated by the parties."5 That same day new information
which impacted the terms of the settlement apparently came to the
attention of plaintiff's attorney. The precise nature of this
information is unclear to us but appears to involve recalcitrance
by an interested entity not present at the settlement conference,
the insurer of the non-party potential claimant. The trial
court, however, was not informed of any difficulties regarding
the settlement until April 8, 1996, some three weeks after the
close of the 60-day period established before the dismissal would
become final. In a letter to the court that day, plaintiff's
counsel reported that "despite the good faith . . . and due
diligence of counsel for both the plaintiff . . . and defendant .
. . settlement has not been consummated." The letter requested
the "earliest possible trial date." The trial court deemed the
letter a motion to vacate the Settlement Order of Dismissal and
denied it as untimely and lacking any showing of good cause.
On April 18, plaintiff's counsel filed a formal Motion
for Reconsideration of Plaintiff's Motion to Vacate the Court's
5 The 60-day order procedure has developed as a mechanism for
the trial courts to bring cases to closure while retaining
jurisdiction to enforce a settlement for a period of time after
closure is announced. In Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375, ---. 114 S. Ct. 1673, 1677 (1994), the Supreme
Court observed that a district court could only retain
jurisdiction to enforce a settlement if the dismissal order
expressly reserved such jurisdiction or if the court incorporated
the settlement agreement into the dismissal order. See generally
In re Mal de Mer Fisheries, Inc., 885 F. Supp. 635, 637-38 (D.
Mass. 1995).
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January 18, 1996 Settlement Order of Dismissal.6 In the motion,
plaintiff's counsel acknowledged that he learned of problems with
the settlement the day after the settlement conference but
instead of "resort[ing] to the Court to resolve the conflict, the
parties worked diligently to achieve settlement." On May 15, the
trial judge denied the motion in a five page memorandum,
concluding:
The plain fact of the matter is that if
this court were to allow plaintiff's
Motion for Reconsideration, the sixty-day
Order of Dismissal would be a nullity.
There would be no reasoned way that the
court could ever deny an untimely motion
for reconsideration brought by any other
party. No good cause has been offered
for plaintiff's counsel's failure in this
case to proceed in accordance with the
Order's terms. Settlement discussions
offer no excuse . . . . The unavoidable
fact is that plaintiff's counsel, without
any articulable excuse, simply ignored
the contents of the January 18 Order . .
. .
On June 10, plaintiff's counsel filed a Motion for
Relief pursuant to Fed. R. Civ. P. 60(b) on grounds of excusable
neglect and inadvertency. On June 27, the trial judge denied the
60(b) motion.
6 The motion indicated that it was assented to by defendant s
counsel. At oral argument, however, defendant s counsel stated
that the assent was only to permit reconsideration and not to the
ultimate relief of vacating the judgment sought by plaintiff. In
any event, the defendant lodged no objection to the relief sought
by plaintiff's attorney in his letter of April 8 or his motion of
April 18.
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At no point in proceedings before the trial court was
the decision of the Supreme Court in Pioneer cited or its
implications argued.
III
III
On the record before us, the issue is whether the
failure of counsel to inform the court in a timely fashion that
the settlement had unravelled was "excusable neglect," within the
meaning of Fed. R. Civ. P. 60(b)(1). That it was neglect is
manifest; counsel neglected to pay heed to a direction to provide
timely notice to the court that the settlement would not be
consummated within the 60-day period. The open question is
whether the neglect was excusable.
The determination whether the neglect was excusable
should be left in the first instance to the trial court, which
was never afforded the opportunity to evaluate the question in
light of Pioneer. This is especially appropriate here where
there apparently was off-the-record consultation involving the
trial judge regarding the terms of the settlement, and the formal
record regarding its breakdown is relatively undeveloped, no
doubt because the areas for development that Pioneer identifies,
504 U.S. at 394, were not explored.
From our vantage point it is difficult to see what
cognizable prejudice, in the sense, for example, of lost
evidence, would come to the defendant from reopening the case.
Of course, it is always prejudicial for a party to have a case
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reopened after it has been closed advantageously by an opponent's
default. But we do not think that is the sense in which the term
"prejudice" is used in Pioneer. Moreover, the delay was not
particularly extended. Impact on judicial proceedings is
arguably of concern; but if the parties had reported on the 59th
day that the settlement could not be consummated, it would not
appear to have a materially less significant impact than it does
here when the report occurred some 21 days later.7 Finally,
there does not appear to have been a lack of good faith with
respect to the reason for the delay; from all the record
discloses the cause of the difficulties was beyond plaintiff's
control. It seems that a stranger to the litigation with an
7 In circumstances such as these, Fed. R. Civ. P. 60(b) provides
a fail-safe mechanism to guard against the finality of
improvident judgments. The relatively expansive one-year time
period under Fed. R. Civ. P. 60(b)(1) for challenges to judgments
flowing from excusable neglect is designed to permit considered
review and assertion of such grounds. This mechanism is
designedly at the expense of the rigid enforcement of more
compressed time periods imposed for acts required to be taken
before judgment enters.
Defendant correctly observes that it was not until June 10,
nearly three months after the dismissal took effect, that
plaintiff expressly framed the issue under Fed. R. Civ. P. 60(b).
Defendant notes that in Pag n v. American Airlines, 534 F.2d 990
(1st Cir. 1976), we upheld denial of a 60(b)(1) motion not filed
until four months after the conclusion of a 60-day settlement
order period and argues we should act in the same fashion here.
It is a sufficient answer to observe that Pag n substantially
predates Pioneer. Moreover, here there were relatively more
timely efforts, albeit not framed expressly under Rule 60(b), to
set aside the judgment. Even in Pag n, there were indications
the trial court would have considered reinstating the case if a
request had been made within two months after the dismissal took
effect. Id. at 993.
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interest in a potential claim was making threatening noises. The
parties apparently hoped to work to resolve the impediments
without the court's intervention. There was no gamesmanship by
plaintiff here. Rather we have an instance of inattentive
hopefulness blinding plaintiff's counsel to the need to assure
that a time deadline was met.
We do not deny the importance of timeliness
requirements in the fair and efficient management of a trial
court's busy docket. Especially in an era when great emphasis is
placed on vigilant judicial oversight of the various alternatives
to the resolution process, failure of the parties to adhere to
deadlines is a practice that can be disruptive of the rights of
other litigants in other cases who also are entitled to active
judicial attention. But the Supreme Court has recently adopted a
forgiving attitude toward instances of "excusable neglect," a
term Pioneer suggests will be given a broad reading.
Whether the failure of plaintiff's attorney to notify
the district court in a timely fashion regarding the breakdown of
the settlement in this case comes within the meaning of
"excusable neglect" as explicated in Pioneer, is a matter to be
resolved initially by the trial court on the basis of a more
extended record.
IV
IV
Accordingly, we hereby vacate the denial of the
vacate
plaintiff's Rule 60(b) motion and remand this case to the trial
remand
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court for further proceedings consistent with this opinion.
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