Rose v. Bank of America Corporation

Filing 104

ORDER granting 92 Motion for Extension of Time to File. Signed by Judge Edward J. Davila on 7/14/2014. (ejdlc2, COURT STAFF) (Filed on 7/14/2014)

1
2
3
4
5
6
7
8
9
UNITED STATES DISTRICT COURT

United States District Court
For the Northern District of California

10

NORTHERN DISTRICT OF CALIFORNIA

11

SAN JOSE DIVISION

12
13

STEPHANIE ROSE, on behalf of herself and
others similarly situated,

14
15
16
17
18

Plaintiff,
v.
BANK OF AMERICA CORPORATION; FIA
CARD SERVICES, N.A.
Defendants.

19
20

)
)
)
)
)
)
)
)
)
)
)
)
)

Case No.: 5:11-CV-02390-EJD
ORDER GRANTING MOTION FOR
EXTENSION OF TIME

[Re: Docket No. 92]

Presently before the Court is Thomas Thomas’ motion for an extension of time within

21

which to opt out of the class settlement reached by the parties in the above-captioned cases. The

22

Court finds this matter suitable for decision without oral argument pursuant to Civil Local Rule 7-

23

1(b) and vacates the hearing scheduled for July 25, 2014. Having fully reviewed the parties’

24

briefings, and for the following reasons, the Court GRANTS Mr. Thomas’ motion.

25
26

I. BACKGROUND
The instant motion concerns two separate actions: the above-captioned class action lawsuit

27

currently awaiting final approval of settlement (“the Class Action”), and an individual lawsuit

28

currently pending in the Circuit Court in and for Broward County, Florida (“the Florida Action”)
1
Case No.: 5:11-CV-02390-EJD
ORDER GRANTING MOTION FOR EXTENSION OF TIME

1

brought by Mr. Thomas against Bank of America, N.A. Both actions allege, inter alia, that Bank of

2

America violated the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”).

3

Mr. Thomas filed the Florida Action on March 5, 2013. Bank of America filed its Answer

4

and Affirmative Defenses on June 13, 2013. Mr. Thomas later agreed to allow Bank of America to

5

amend its Affirmative Defenses on October 25, 2013. The parties have each propounded discovery

6

and Mr. Thomas had an opportunity to depose Bank of America’s corporate representative on

7

March 4, 2014.

8

A second deposition of Bank of America’s corporate representative specifically regarding
the telephone and computer systems used to place the calls to Mr. Thomas’ cellular telephone was

10
United States District Court
For the Northern District of California

9

scheduled with counsel for Bank of America for May 28, 2014, to take place in Bank of America’s

11

counsel’s office. Bank of America’s outstanding responses to Mr. Thomas’ discovery were due on

12

May 27, 2014.

13

On May 27, 2014, counsel for Bank of America filed a motion to stay proceedings in the

14

Florida Action alleging that Mr. Thomas had failed to timely opt-out of the Class Action, thus

15

barring his TCPA claims in the Florida Action. Mr. Thomas’ attorney, Yechezkel Rodal, claims

16

that this was when he was first made aware that Mr. Thomas’ opt-out letter had not been timely

17

received. Mr. Thomas filed this motion thereafter.

18
19

II. LEGAL STANDARD
Under Rule 6(b) of the Federal Rules of Civil Procedure, where the specified period for the

20

performance of an act has elapsed, a district court may enlarge the period and permit the tardy act

21

where the omission is the “result of excusable neglect.”

22

To determine whether a party’s failure to meet a deadline constitutes “excusable neglect,”

23

courts must apply a four-factor equitable test, examining: (1) the danger of prejudice to the

24

opposing party; (2) the length of the delay and its potential impact on the proceedings; (3) the

25

reason for the delay; and (4) whether the movant acted in good faith. Pioneer Inv. Servs. Co. v.

26

Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993). Because Congress has not provided

27

guidance to determine what sorts of actions constitute excusable neglect, the Court’s

28
2
Case No.: 5:11-CV-02390-EJD
ORDER GRANTING MOTION FOR EXTENSION OF TIME

1

“determination is at bottom an equitable one, taking account of all relevant circumstances

2

surrounding the party’s omission.” Id.

3
4

III. DISCUSSION
“Factors one, two and four will almost always cut one way: Delays are seldom long, so

5

prejudice is typically minimal. Bad-faith delay is rare, given that we’re only dealing with

6

‘neglect,’ not deliberate flouting of the rules-though flouting does happen on occasion. Most of the

7

work, then, is done by factor three, the most important one.” Pincay v. Andrews, 389 F.3d 853,

8

861 (9th Cir. 2004) (dissent).

9

For the most part, the same is true of the instant motion. With respect to the second factor,

United States District Court
For the Northern District of California

10

the parties agree that Mr. Thomas’ motion should have “zero impact” on the class settlement, and

11

therefore a delay of slightly over two months does not appear excessive.

12

As to the fourth factor, Bank of America contends that Mr. Thomas fails to demonstrate

13

good faith. Mr. Thomas’ motion is primarily based on the claim that his attorney, Mr. Rodal,

14

assigned the task of mailing Mr. Thomas’ opt-out letter to a paralegal, who apparently failed to

15

mail the letter. Bank of America suggests a possible lack of good faith due to the fact that Mr.

16

Thomas did not identify the paralegal in the moving papers, did not include testimony from the

17

paralegal to support the motion, and did not provide Bank of America with the paralegal’s contact

18

information until shortly before the filing of Bank of America’s response brief. However, the late

19

disclosure of the paralegal’s contact information does not obviously appear to have been in bad

20

faith: Bank of America requested the paralegal’s information on June 13, 2014 and received it on

21

June 16, 2014, while Mr. Thomas’ motion was filed on June 2, 2014. Although Mr. Rodal waited

22

until the day Bank of America’s response was due (June 16) before providing the paralegal’s

23

information, the Court is reluctant to infer bad faith given that Bank of America waited until June

24

13 to make the request, and Mr. Rodal claims he spent the time attempting (but failing) to elicit an

25

affidavit from the paralegal.

26

As to the first factor, Bank of America asserts that it would be prejudiced if Mr. Thomas

27

were permitted to opt out after the deadline because Bank of America would be forced to litigate a

28

claim that it has already agreed to settle. Bank of America notes two cases in which courts have
3
Case No.: 5:11-CV-02390-EJD
ORDER GRANTING MOTION FOR EXTENSION OF TIME

1

found that granting a late class settlement opt-out request would cause prejudice to the opposing

2

party: In re Charles Schwab Corp. Sec. Litig., 2010 WL 2178937 (N.D. Cal. May 27, 2010) and

3

Bowman v. UBS Fin. Servs., Inc., 2007 WL 1456037 (N.D. Cal. May 17, 2007). The cases

4

support a finding that Bank of America would suffer at least some amount of prejudice if the Court

5

grants Mr. Thomas’ motion. Both courts found that the defendants would suffer prejudice by the

6

late opt-out requests, reaching the same conclusion in both cases despite the fact that the requests

7

were made at different stages in the settlement process: the request in In re Charles Schwab was

8

made “on the eve of preliminary approval” of the settlement, while the request in Bowman was

9

made after final approval.

United States District Court
For the Northern District of California

10

However, any prejudice suffered by Bank of America is not likely to be severe. Bank of

11

America’s only claim of prejudice is that it will have to continue defending the Florida Action.

12

Bank of America does not indicate that it changed its litigation strategy in the Florida Action

13

because it relied on its belief that Mr. Thomas had opted out, nor does Bank of America claim that

14

its decision to settle the Class Action (or its negotiating position) was affected by Mr. Thomas’

15

participation or non-participation in the class. The fact that Bank of America will need to continue

16

defending the Florida Action should the Court grant Mr. Thomas’ motion, by itself, is not

17

significant to an “excusable neglect” analysis. See Pincay, 389 F.3d 853 (upholding a district

18

court’s finding of “no prejudice” despite the fact that granting extension of time would mean that

19

the non-movant would need to defend an appeal that it would otherwise escape).

20

The Court also recognizes that none of the movants in In re Charles Schwab and Bowman

21

had a particularly compelling explanation as to the third factor- the reason for the delay. The

22

movants in In re Charles Schwab failed to read the class action notice because it had been relegated

23

to a pile of “junk mail.” In Bowman, the movants do not appear to have provided any explanation

24

at all.

25

Mr. Thomas attributes his failure to timely opt out of the Class Action to his attorney Mr.

26

Rodal. On March 5, 2014, Mr. Thomas informed Mr. Rodal that he had received a postcard

27

regarding the Class Action. The opt-out request was required to be postmarked no later than the

28

March 21, 2014 deadline. Following the conversation, Mr. Rodal prepared an opt-out letter and
4
Case No.: 5:11-CV-02390-EJD
ORDER GRANTING MOTION FOR EXTENSION OF TIME

1

mailed it to Mr. Thomas for signature. Mr. Rodal then assigned the task to a paralegal that was

2

working for him at that time. Mr. Thomas returned the opt-out letter, and Mr. Rodal claims that, to

3

the best of his knowledge, the opt-out letter was to be mailed out on March 13, 2014 by the

4

paralegal. The paralegal, however, did not make any notes as to when she mailed the letter, if at

5

all. The paralegal’s employment was terminated on or about March 18, 2014, and the letter was

6

not found on her desk, in her drawers, or anywhere within her workspace.

7

After considering all the factors that underlie the determination of excusable neglect and the

8

relevant case law, the Court finds that excusable neglect is adequately shown. The Court’s

9

decision takes into consideration the following: First, Mr. Thomas acted quickly to opt out of the

United States District Court
For the Northern District of California

10

Class Action; unlike in the other cases, he at least made an attempt to opt out, and the record

11

suggests that he believed he had done everything required to opt out. Second, Mr. Rodal’s excuse

12

is arguably stronger than the excuse accepted by the district court in Pincay. In Pincay, the

13

attorney’s reason for missing the deadline was that he relied on his paralegal’s incorrect reading of

14

the Federal Rules of Appellate Procedure. 389 F.3d at 858. It seems more excusable for an

15

attorney to rely on his paralegal for a purely administrative task (mailing a letter) than to rely on a

16

paralegal’s reading of the law. Third, the prejudice to Bank of America is minor; more akin to a

17

denial of a windfall than prejudice. Had the failure to timely opt out resulted in greater prejudice to

18

Bank of America, the result would be different. And finally, the fact that Mr. Rodal attributes his

19

neglect to a recently-fired paralegal, who Bank of America can contact, lends credibility to the

20

story.

21
22

IV. CONCLUSION
For the foregoing reasons, the Court GRANTS Mr. Thomas’ motion. Mr. Thomas is

23

deemed excluded from the class action settlement.

24

IT IS SO ORDERED

25

Dated: July 14, 2014

26
27

_________________________________
EDWARD J. DAVILA
United States District Judge

28
5
Case No.: 5:11-CV-02390-EJD
ORDER GRANTING MOTION FOR EXTENSION OF TIME