Charlotte B Milliner v. Mutual Securities, Inc.

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 CHARLOTTE B. MILLINER, et al., Case No. 15-cv-03354-DMR

8 Plaintiffs, ORDER DENYING MOTION TO 9 v. VACATE DISMISSAL ORDER

10 MUTUAL SECURITIES, INC., Re: Dkt. No. 193 11 Defendant.

12 Plaintiffs Charlotte B. Milliner and Joann Brem filed this putative class action against 13 Defendant Mutual Securities, Inc. (“MSI”) in 2015. On June 1, 2018, following a settlement 14 conference before the undersigned, the parties resolved Plaintiffs’ individual claims and executed a written settlement agreement the same day. [Docket No. 166.] The parties subsequently 15 consented to have this court conduct all further proceedings pursuant to 28 U.S.C. § 636(c) and 16 matter was reassigned to the undersigned on June 5, 2018. [Docket Nos. 167-169.] On September 17 11, 2018 the court sua sponte entered the following order dismissing the case: “On June 6, 2018, 18 this case was transferred to the undersigned solely for enforcement of the parties’ settlement 19 agreement. The case may be reopened solely for that purpose. The Clerk of Court shall close the 20 file.” [Docket No. 172 (Order Dismissing Case).] 21 Plaintiffs filed the instant motion to vacate the dismissal order on July 16, 2019. [Docket 22 No. 193.] MSI opposes the motion. [Docket No. 204.] In October 2019, the court denied the 23 motion without prejudice on the ground that it lacked jurisdiction to decide the motion pending 24 resolution of Plaintiffs’ appeal of an earlier court order to the United States Court of Appeals for 25 the Ninth Circuit. [Docket No. 219.] The Ninth Circuit ultimately granted MSI’s motion to 26 dismiss Plaintiffs’ appeal for lack of jurisdiction. Milliner as Tr. of Charlotte B. Milliner Tr. 27 Dated Jan. 30, 1997 v. Mut. Sec., Inc., No. 19-16463, 2020 WL 4252641 (9th Cir. Mar. 31, 2020). 1 Accordingly, Plaintiffs’ motion to vacate the September 11, 2018 dismissal order is now 2 appropriate for decision. This matter is suitable for resolution without a hearing. Civ. L.R. 7-1(b). 3 For the following reasons, the motion is denied. 4 I. DISCUSSION 5 Plaintiffs ask the court to vacate its September 11, 2018 sua sponte dismissal order and 6 permit the parties to submit a stipulated request for dismissal. Plaintiffs’ motion is not a model of 7 clarity, but the basis for the request appears to be the following: this lawsuit was filed as a putative 8 class action challenging MSI’s investment approach. Plaintiffs settled and released their 9 individual claims against MSI. They did not release any claims by putative class members. Mot. 10 2. According to Plaintiffs, the parties also “expressly agreed to the timing and form of the 11 dismissal to be entered in this case” in connection with the settlement agreement. Id. Plaintiffs do 12 not set forth the terms of any such express agreement in their motion, but cite an August 4, 2018 13 email from Plaintiffs’ counsel to defense counsel in which he references the timing of the filing of 14 the dismissal:

15 Paragraph 2 of the Settlement Agreement states that the release running to MSI is not effective until 91 days have passed after the last 16 payment is made, which was on August 1, 2018. Accordingly, the release is not effective until after October 30, 2018. Attached is the 17 Dismissal, which you can submit to the Court after October 30, 2018. 18 [Docket No. 193 at ECF pp. 4-5 (Sturgeon-Garcia Decl., July 15, 2019) ¶ 2, Ex. 1.] Therefore, 19 Plaintiffs’ position was that MSI could file a request to dismiss the case after October 30, 2018, 20 which was the date Milliner and Brem’s release of claims against MSI was effective. 21 As noted, the court entered its sua sponte dismissal order on September 11, 2018, over one 22 month before the October 30, 2018 date. Plaintiffs now contend that the court’s earlier dismissal 23 of the action may prejudice the putative class members, citing American Pipe & Construction Co. 24 v. Utah, 414 U.S. 538 (1974). In American Pipe, the Supreme Court held that “the 25 commencement of a class action suspends the applicable statute of limitations as to all asserted 26 members of the class who would have been parties had the suit been permitted to continue as a 27 class action.” 414 U.S. at 554. According to Plaintiffs, the court’s sua sponte dismissal order 1 statute of limitations clock for all putative class members re-started following this Court’s sua 2 sponte dismissal, rather than the later date agreed to by the Parties.” Mot. 2-3. 3 There are numerous problems with Plaintiffs’ motion. First and foremost, Plaintiffs’ 4 position that the entire action could be dismissed on October 30, 2018 is not supported by the 5 settlement agreement itself. The court has reviewed the agreement, which was filed under seal in 6 connection with a different motion. The provision addressing the release of the individual claims 7 (Section 3), including its effective date, says nothing about the timing of the dismissal. Similarly, 8 the provision of the agreement addressing the mechanics of the dismissal (Section 2) is silent as to 9 the date the dismissal was to be filed with the court.1 In other words, it appears that Plaintiffs have 10 conflated the effective date of the release of Milliner and Brem’s individual claims with the 11 dismissal of the entire action. 12 Moreover, Plaintiffs offer no authority for the relief they request. Plaintiffs cite Federal 13 Rule of Civil Procedure 41, which governs dismissal of actions, and American Pipe, but neither 14 supports the relief Plaintiffs seek in this motion. The relevant portion of Rule 41 does not provide 15 a mechanism by which the court may vacate a dismissal order, but instead sets forth the 16 circumstances in which a plaintiff may voluntarily dismiss an action, see Fed. R. Civ. P. 41(a), and 17 American Pipe did not involve a party seeking to vacate a dismissal. Instead, Rule 60 governs 18 motions for relief from a final judgment or order. Specifically, Rule 60(b) provides for 19 reconsideration of a final judgment, order, or proceeding “upon a showing of (1) mistake, surprise, 20 or excusable neglect; (2) newly discovered evidence; (3) fraud; (4) a void judgment; (5) a satisfied 21 or discharged judgment; or (6) ‘extraordinary circumstances’ which would justify relief.” Fuller 22 v. M.G. Jewelry, 950 F.2d 1437, 1442 (9th Cir. 1991) (citing Fed. R. Civ. P. 60(b)). “Motions for 23 relief from judgment pursuant to Rule 60(b) are addressed to the sound discretion of the district 24

25 1 Paragraph 2 of the settlement agreement sets out when Plaintiffs would provide MSI with a request for dismissal but doesn’t address when MSI had to file the dismissal. In any event, based 26 on Plaintiffs’ counsel’s August 4, 2018 email discussed above, Plaintiffs received the final settlement payment on August 1, 2018. Pursuant to paragraph 2, Plaintiffs were supposed to give 27 MSI the request for dismissal by approximately August 15, 2018, and presumably MSI could then 1 court.” Casey v. Albertson’s Inc., 362 F.3d 1254, 1257 (9th Cir. 2004). 2 The only subsection of Rule 60(b) that appears to apply in these circumstances is Rule 3 60(b)(6), which allows the court to reconsider an order for “any . . . reason that justifies relief.” 4 To the extent that the court construes Plaintiffs’ motion as a Rule 60(b)(6) motion for relief from 5 the September 11, 2018 dismissal order, the motion is denied as untimely. ““A motion under Rule 6 || 60(b) must be made within a reasonable time.” Fed. R. Civ. P. 60(c)(1). “What constitutes 7 ‘reasonable time’ depends upon the facts of each case, taking into consideration the interest in 8 || finality, the reason for delay, the practical ability of the litigant to learn earlier of the grounds 9 || relied upon, and prejudice to other parties.” Ashford v. Steuart, 657 F.2d 1053, 1055 (9th Cir. 10 1981). Here, Plaintiffs offer no explanation for the 10-month delay in filing their motion, and 11 there is nothing in the record to suggest Plaintiffs were unaware of the court’s dismissal order and a 12 the relevant facts. To the contrary, Plaintiffs submit a September 11, 2018 email in which the

13 || parties’ attorneys communicated about the court’s dismissal of the action: “I saw that Judge Ryu

v 14 || dismissed the case today. I didn’t file the dismissal. That was sua sponte.” Sturgeon-Garcia

15 || Decl. 3, Ex. 2 (email from defense counsel). Further, “[rJelief under section 60(b)(6) is reserved Q 16 || for ‘extraordinary circumstances.’” Id. Plaintiffs do not assert the existence of such

= 17 circumstances here. For example, they offer no evidence that any putative class member has

18 suffered prejudice as a result of the court’s sua sponte dismissal of the action.” 19 || IL | CONCLUSION 20 For the foregoing reasons, Plaintiffs’ motion to vacate the dismissal order is denied. ES DPISTR IC 21 KS LO 7 ON IT IS SO ORDERED. &) □ SmneG ORDERED 23 || Dated: June 28, 2021 S \" □ □ 24 308 (Ae yO gna Mi a □□ 25 Unitexs ales Magistrate Judge & os 26 a VORTICES 2 07 * In their reply, Plaintiffs disavow any reliance on Rule 60 to vacate the dismissal order, and argued that the court has “‘inherent procedural power’ to fix [its] own prior orders.” Reply 1. The 2g || court declines to consider arguments raised for the first time on reply.