Barry S. Steinhardt v. Blue Cross of California

• Court: District Court, S.D. California
• Decided: March 14, 2025
• Docket: 3:23-cv-01737
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 BARRY S. STEINHARDT, an individual, Case No.: 3:23-cv-01737-L-KSC on behalf of himself, all others similarly 13 situated, and the general public, ORDER DENYING PLAINTIFF’S 14 MOTION TO SET ASIDE ORDER Plaintiff, GRANTING MOTIONS TO DISMISS 15 v. 16 [ECF No. 34] BLUE CROSS OF CALIFORNIA, et al., 17 Defendants. 18

19 Pending before the Court is Plaintiff Barry S. Steinhardt’s (“Plaintiff”) motion to 20 set aside judgement as void under Federal Rule of Civil Procedure 60(b)(4), or 21 alternatively, for excusable neglect under Federal Rule of Civil Procedure 60(b)(1).1 22 (ECF. No. 34.) Defendants collectively opposed the motion, and Plaintiff filed a reply. 23 (ECF Nos. 40, 42.) For the following reasons, Plaintiff’s motion is DENIED. 24 / / / / / 25 26 27 28 1 1 I. Background 2 This putative class action alleging negligent misrepresentation, unfair competition, 3 and breach of the implied duty of good faith and fair dealing was filed in the Los Angeles 4 County Superior Court. On May 25, 2023, Defendants removed it to the United States 5 District Court for the Central District of California (“Central District”) based on minimal 6 diversity under 28 U.S.C. § 1332(d). 7 On June 30 and July 14, 2023, Defendants all moved to dismiss. (ECF Nos. 10, 8 15.) On July 14, 2023, two of the Defendants also moved to transfer venue to this 9 District. (ECF No. 16.) On September 1, 2023, Plaintiff opposed the motion to transfer. 10 (ECF No. 26.) The motion was granted on September 19, 2023. (ECF No. 29.) On 11 September 20, 2023, the case was transferred to this District and assigned to this Court. 12 (ECF Nos. 30, 31.) 13 As of the time of transfer, Plaintiff had not filed his opposition to Defendants’ 14 motions to dismiss as several stipulations extended the deadline. The final extension, 15 granted on August 3, 2023, set the hearing on the motions to dismiss for October 13, 16 2023, which made the opposition to the motions due on September 22, 2023, see C.D. 17 Cal. Civ. L.R. 7-9. (ECF No. 22.) However, these dates passed without any activity on 18 Plaintiff’s or Defendants’ part. 19 On November 9, 2023, this Court issued an order to show cause why Defendants’ 20 motions to dismiss should not be granted as unopposed. (ECF No. 32) Plaintiff was 21 ordered to respond no later than November 14, 2023, and was warned that a failure to 22 timely respond may be deemed a waiver of opposition and consent to dismissal. (Id.) 23 Plaintiff did not oppose the motions to dismiss or timely respond to the order to show 24 cause. The Court therefore granted Defendants’ motions as unopposed. (ECF No. 33.) 25 See Civ. Loc. Rule 7.1.f.3.c; Ghazali v. Moran, 46 F.3d 52, 53-54 (9th Cir. 1995). All 26 claims were dismissed without prejudice. Pending before the Court is Plaintiff’s motion 27 to set aside dismissal. 28 / / / / / 1 II. Discussion 2 Plaintiff moves to set aside dismissal pursuant to Rule 60(b). He argues that 3 dismissal should be set aside under Rule 60(b)(4) because he was deprived of his due 4 process right to be heard. Alternatively, Plaintiff seeks relief based on “mistake, 5 inadvertence, surprise, or excusable neglect” under Rule 60(b)(1). 6 A. Rule 60(b)(4) 7 Rule 60(b)(4) allows relief from a final judgment when “the judgment is void.” 8 Rule 60(b)(4) relief is “applie[d] only in the rare instance where a judgment is premised 9 either on a certain type of jurisdictional error or on a violation of due process that 10 deprives a party of notice or the opportunity to be heard.” United Student Aid Funds, Inc. 11 v. Espinosa, 559 U.S. 260, 271 (2010).2 Due process requires notice be “reasonably 12 calculated, under all the circumstances, to apprise interested parties of the pendency of 13 the action and afford them an opportunity to present their objections.” Mullane v. 14 Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950); see also Jones v. Flowers, 15 547 U.S. 220, 225 (2006). 16 Plaintiff’s attorney Paul T. Cullen states that he intended to file an amended 17 complaint in lieu of opposing motions to dismiss “upon receiving notification of the case 18 assignment in this Court and an updated hearing schedule for the pending motions to 19 dismiss.” (ECF No. 34-2, Cullen Declaration, ¶ 3(d) (“Cullen Decl.”).) He explains that 20 after the case was transferred on September 20, 2023, he monitored his email inbox for 21 CM/ECF notifications but did not receive a notification of case assignment. (Id. ¶ 4(a).) 22 On November 29, 2023, he received notification of dismissal and discovered the 23 notification of case assignment in his junk email folder. (Id. ¶ 4(a).) Cullen states that 24 despite searching his inbox and junk mail folder, he never received the order to show 25 cause. (Id. ¶ 4(b).) Cullen attributes these errors to “unexplained technical issues beyond 26 27 28 2 1 my or my client’s control.” (Id. ¶ 5(b).) Plaintiff argues that the dismissal should be set 2 aside under Rule 60(b)(4) because “failure of notice” deprived him of due process. 3 This case does not present the rare instance where the judgement is void for a lack 4 of notice. While Plaintiff’s counsel states that he had a problem receiving CM/ECF 5 notifications from this Court, an entry on the Central District docket on September 20, 6 2023, shows receipt of the electronic case transfer from this District, including the new 7 case number. Accordingly, Plaintiff was on notice that the case was transferred and was 8 able to access this District’s docket. Further, Plaintiff was on notice by the order issued 9 on August 3, 2023, to file his opposition briefs or an amended complaint no later than 10 September 22, 2023. Plaintiff did not request an extension of this date. It was therefore 11 unreasonable for Plaintiff to wait and do nothing for more than two months past the due 12 date. 13 Moreover, that Plaintiff may have had technical issues in receiving CM/ECF 14 notifications is not a violation of Plaintiff’s due process rights. Each docket entry was 15 electronically sent to the email address Plaintiff had registered in the system. Service is 16 effectuated by “sending it to a registered user by filing it with the court’s electronic-filing 17 system.” Fed. R. Civ. P. 5(b)(2)(E). This District’s Electronic Case Filing 18 Administrative Policies and Procedures Manual (“ECF Manual”) requires that “[a] filing 19 party must maintain an electronic mailbox of sufficient capacity, with the appropriate e- 20 mail permissions, to receive electronic notice of case-related transmissions.” See ECF 21 Manual § 1(f); see also Civ. L.R. 5.4(f). The Court’s actions were “reasonably 22 calculated, under all the circumstances, to apprise interested parties of the pendency of 23 the action,” Mullane, 339 U.S. at 314, and it was Plaintiff’s responsibility to enable 24 receipt of notifications, or alternatively, consult the docket directly if necessary. 25 Accordingly, Plaintiff’s request for relief under Rule 60(b)(4) is denied. See Jones, 547 26 U.S. at 225 (“[D]ue process does not require actual notice[.]”). 27 / / / / / 28 1 B. Rule 60(b)(1) 2 Under Rule 60(b)(1), a judgment may be set aside for “mistake, inadvertence, 3 surprise, or excusable neglect.” Plaintiff’s motion is based on excusable neglect.3 The 4 determination of what conduct constitutes excusable neglect “is at bottom an equitable 5 one, taking account of all relevant circumstances surrounding the party’s omission.” 6 Pioneer Inv. Svcs. Co. v. Brunswick Assoc. Ltd., 507 U.S. 380, 395 (1993). “[T]he 7 determination … depends on at least four factors,” including, but not limited to, “(1) the 8 danger of prejudice to the opposing party; (2) the length of the delay and its potential 9 impact on the proceedings; (3) the reason for the delay; and (4) whether the movant acted 10 in good faith.” Bateman v. U.S. Postal Serv., 231 F.3d 1220, 1223–24 (9th Cir. 2000) 11 (citing Pioneer, 507 U.S. at 395). 12 Plaintiff found out his case was dismissed on November 29, 2023, and filed the 13 pending Rule 60(b) motion 364 days later, on November 27, 2024. Rule 60(c) sets the 14 time for filing a Rule 60(b) motion: 15 A motion under Rule 60(b) must be made within a reasonable time--and for reasons (1), (2), and (3) no more than a year after the entry of the judgment 16 or order or the date of the proceeding. 17 18 Fed. R. Civ. P. 60(c)(1). Plaintiff argues that delay is reasonable because he filed no 19 more than a year after dismissal. (ECF No. 34-1 at 3.) 20 While one year provides the outside limit, a motion made on the last possible day 21 is not presumptively filed within a reasonable time. See Meadows v. Dominican 22 Republic, 817 F.2d 517, 820-21 (9th Cir. 1987) (noting that while the motion was filed 23 within the one-year limit, it was not filed within a reasonable time). “What constitutes 24 ‘reasonable time’ depends upon the facts of each case, taking into consideration the 25 interest in finality, the reason for delay, the practical ability of the litigant to learn earlier 26

27 3 In his declaration, Plaintiff’s attorney also mentions inadvertence and surprise 28 1 of the grounds relied upon, and prejudice to the other parties.” Ashford v. Steuart, 657 2 F.2d 1053, 1055 (9th Cir.1981). Plaintiff learned on or about September 20, 2023, that 3 the case was transferred to this District. (See Cullen Decl. ¶ 4(a).) He does not deny that 4 he knew that the due date to oppose motions to dismiss was September 22, 2023, as the 5 order setting the due date was issued prior to transfer. Nevertheless, Plaintiff did nothing 6 even when he received notice of dismissal on November 29, 2023, (see id. ¶ 4(d)) and 7 waited to file the pending motion on November 27, 2024. (See ECF Nos. 31-34.) 8 Plaintiff explains that technical difficulties with receiving ECF notifications caused 9 inaction prior to November 29, 2023 (see Cullen Decl. ¶ 4), and attempts to excuse his 10 subsequent, 364-day-long period of inactivity, with reference to “Plaintiff’s Counsel’s 11 busy trial schedule” (ECF No. 34-1 at 3). Plaintiff’s superficial explanation is 12 insufficient to show that he filed the motion within reasonable time. See Pioneer, 507 13 U.S. at 398 (giving “little weight to the fact that counsel was experiencing upheaval in his 14 law practice.”); see also Selph v. Council of the City of Los Angeles, 593 F.2d 881, 884 15 (9th Cir. 1979), overruled on other grounds by Andrade v. Att’y Gen. of State of 16 California, 270 F.3d 743 (9th Cir. 2001) (“The term excusable neglect is not meant to 17 cover the usual excuses that the lawyer is too busy, which can be used, perhaps truthfully, 18 in almost every case.”). The extended period of inactivity seems particularly 19 unreasonable as Plaintiff claims that many of the claims may be time-barred. 20 Accordingly, the length of delay and the reasons for the delay weigh heavily against 21 granting Plaintiff relief under Rule 60(b)(1). 22 Additionally, Plaintiff has not shown good faith. “There must be some obedience 23 to the rules of court; and some respect shown to the convenience and rights of other 24 counsel, litigants, and the court itself.” Smith v. Stone, 308 F.2d 15, 18 (9th Cir. 1962). 25 While Plaintiff’s actions do not indicate maliciousness or gamesmanship, Plaintiff’s 26 failure to acknowledge his culpability in allowing the case to be dismissed and his 364- 27 day long delay in his attempt to vacate dismissal show a disregard for the rules of 28 procedure, court orders, and the rights of other litigants in the case. 1 Finally, danger of prejudice to the adverse party requires a showing that setting 2 || aside an order or judgment will result in greater harm than simply delaying resolution of 3 ||the case. It must impair the defendant’s ability to defend against plaintiff’s claim. Falk 4 Allen, 739 F.2d 461, 463 (9th Cir. 1984). Defendants argue that as a result of the 5 || delay, “it is a near certainty that each party’s witnesses will have worse recall of the 6 || factual events relevant to Plaintiffs’ legal claims, creating greater potential for inaccurate 7 testimony.” (ECF No. 40-1 at 14.) Defendants have had to wait a year before Plaintiff 8 || moved to set aside the dismissal, resulting in a delay of almost five years after the events 9 || giving rise to the Complaint. (See ECF No. 1-1 at 3 (events giving rise to the complaint 10 || occurred in March 2020).) This delay is sufficient to show prejudice to Defendants. 11 || See In re Eisen, 31 F.3d 1447, 1452-53 (9th Cir. 1994); Morris v. Morgan Stanley & Co., 12 F.2d 648, 652 (9th Cir. 1991) (as amended) (presuming from elapsed time that a 13 || party’s ability to prosecute or defend a case has been prejudiced). 14 As all four Pioneer factors weigh against Plaintiff, Plaintiffs request for relief 15 under Rule 60(b)(1) is denied. 16 ||. Conclusion 17 For the foregoing reasons, Plaintiff's motion is DENIED. 18 IT IS SO ORDERED. 19 20 || Dated: March 14, 2025 : 1 pee fp? 27 H . James Lorenz, United States District Judge 23 24 25 26 27 28