In re Cendant Corp. Prides Litigation

189 F.R.D. 321, 1999 WL 958953
CourtDistrict Court, D. New Jersey
DecidedSeptember 21, 1999
DocketNo. CIV. 98-2819(WHW)
StatusPublished
Cited by20 cases

This text of 189 F.R.D. 321 (In re Cendant Corp. Prides Litigation) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Cendant Corp. Prides Litigation, 189 F.R.D. 321, 1999 WL 958953 (D.N.J. 1999).

Opinion

OPINION

WALLS, District Judge.

Defendants Cendant Corporation and Cendant Capital I (“Cendant”) move for an Order Disallowing Proofs of Claim made pursuant to paragraph 11(B)(6) of the Stipulation and Agreement of Compromise and Settlement (“Stipulation”) dated March 17, 1999 and the corresponding Order Regarding Proposed Class Action Settlement, Settlement Hearing and Notice of Proposed Settlement dated March 17, 1999 (“March 17 Order”) approved by the Court’s Order and Judgment dated June 15, 1999 (“June 15 Order”). Lead Counsel for plaintiffs, Roger W. Kirby, of Kirby, Mclnerney & Squire, LLP, opposes the motion and cross-moves for the enlargement of time to file or cure claims pursuant to Federal Rule of Civil Procedure 6(b)(2). Having heard oral argument, the Court denies Cendant’s motion and grants the cross motion of plaintiffs.

Factual Background1

The instant dispute stems from a settlement first announced by the parties on January 7, 1999. On March 17, 1999, a proposed settlement agreement between Cendant and the class of persons who purchased Income or Growth Prides2 during the period February 24, 1998 through April 15, 1998 was presented to the Court. The Prides Settlement was approved by June 15, 1999 Order. Cendant agreed to distribute one Right, with a theoretical value of $11.71, for each Prides owned as of the close of business on April 15, 1998. See Stipulation HIT 1-5; see also In re Cendant Corp. Prides Litig., 51 F.Supp.2d at 539^40. Cendant will then issue two New Income Prides or two New Growth Prides to any person who delivers to Cendant three Rights, together with existing Income or Growth Prides, respectively, before the expiration, the close of business on February 14, 2001, unless the Prides are amended. See id.

To collect the Rights, each Prides owner was required to submit a valid Proof of Claim form by June 18, 1999. See March 17 Order 114. Under the terms of the March 17 Order, a settlement administrator, Valley Forge Administrative Services, was to verify the proofs of claim. If a claim was rejected by the administrator, each claimant was given twenty days after the administrator mailed a request to cure to resolve its claim. Id. at H 4(h).

On September 7, 1999, Cendant filed a motion to disallow proofs of claim and requests that the Court uphold the “unambiguous, mandatory deadline by which proofs of claim must be filed [and the] equally unam[323]*323biguous, mandatory deadline for filing a response to any request to cure a proof of claim.” Cendant Brf. at 2. Cendant asserts that the administrator “has determined to accept claims that were filed late; to accept claims that were initially filed on time but were not corrected (or ‘cured’) in a timely manner; and to accept claims that have not been supported by the required documentation.” Id. at 4. Cendant objects to fifty-four claims filed after the June 18 deadline, one hundred and forty-one claims accepted by the administrator after the twenty-day time-to-cure period had expired, and twelve claims which Cendant says are supported by insufficient documentation. Id. at 12; Greenberg Aff. 11115-11.

Lead Counsel, in response, has submitted a brief on behalf of class members whose claims are being disputed generally, and in particular on behalf of certain Merrill Lynch customers, Schroder & Co., and AEGON USA. He asks the Court to extend the time for filing proofs of claim and the time to respond to the administrator’s requests. Lead Counsel asserts that the Court has the power to extend the time because (1) it has the inherent discretion in equity to protect class members and (2) Fed.R.Civ.P. 6(b)(2) allows the Court to enlarge the time to respond upon a showing of “excusable neglect.” Lead Counsel’s (“LC”) Brf. at 17-23. Lead Counsel urges the allowance of the late-filed claims and the AEGON, Schroder and Merrill Lynch client claims. Id. at 14-17.

Analysis

A. The Court’s Power to Modify the Stipulation and Related Orders

1. The Equitable Power of the Court

As noted by Lead Counsel, there are two sources of the Court’s ability to modify the deadlines in the Stipulation, and the March 17 and June 15 Orders: (1) the Court’s general equitable power to define the scope of class action judgments and settlements; and (2) Federal Rule of Civil Procedure 6(b)(2), which permits the Court to enlarge the time to respond to courtordered deadlines.

The Court has general equitable power to modify the terms of a class action settlement. “Until the fund created by the settlement is actually distributed, the court retains its traditional equity powers ... to protect unnamed, but interested persons.” Zients v. LaMorte, 459 F.2d 628, 630 (2d Cir.1972). A Court may assert this power to allow late-filed proofs of claim and late-cured proofs of claim. See id.; see also In re Agent Orange Product Liability Litig., 689 F.Supp. 1250, 1263 (E.D.N.Y.1988); The Manual For Complex Litig. § 30.47 at 248 (3d ed.1995) (“Adequate time should be allowed for late claims before any refund or other disposition of settlement fund occurs.”).

Courts which have considered requests to extend deadlines for filing proofs of claim and other settlement documents have generally subjected each request to a general “good cause” analysis. See Kyriazi v. Western Elec. Co., 647 F.2d 388, 396 (3d Cir.1981) (affirming trial court’s application of a good cause standard to claims of plaintiffs who failed to opt-in to settlement by deadline); In re Gypsum Antitrust Cases, 565 F.2d 1123, 1128 (9th Cir.1977) (affirming district judge’s decision that he “would have discretion to permit a claim and allow a late claim when there’s good and sufficient cause shown therefor”); see also Grace v. City of Detroit, 145 F.R.D. 413, 414-15 (E.D.Mich.1992) (“The adoption of the good cause standard [to a decision to accept untimely claim forms] is ‘an appropriate exercise of the trial court’s discretion in defining the scope of the class action judgment and settlement.”); In re ML-Lee Acquisition Fund II, No. CIV.A. 92-60, 1999 WL 184135, at *2 (D.Del. March 23, 1999) (following Grace v. City of Detroit).

In the alternative, Courts have treated requests to accept late-filed or late-cured proofs of claim as motions to extend the time to comply with a court-ordered deadline. Federal Rule of Civil Procedure 6(b)(2) provides that “when ... by order of court an act is required ... the court for cause shown may at any time in its discretion ... upon motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect.” A court-ordered deadline for filing proofs of claim, then, may be subject to enlargement under Rule 6(b)(2) if the movant

Free access — add to your briefcase to read the full text and ask questions with AI

Related

ARcare Inc v. Alere Inc
E.D. Arkansas, 2020
Kimberg v. University of Scranton
411 F. App'x 473 (Third Circuit, 2010)
Carter v. Lake County
840 So. 2d 1153 (District Court of Appeal of Florida, 2003)
Cendant Corp. Prides Litigation v. Cendant Corp.
311 F.3d 298 (Third Circuit, 2002)
In Re Cendant Corporation Prides Litigation
157 F. Supp. 2d 376 (D. New Jersey, 2001)
Goldstein v. Forbes
260 F.3d 183 (Third Circuit, 2001)
In Re: Cendant Corp
Third Circuit, 2001
Clark v. Runyon
165 F. Supp. 2d 920 (D. Minnesota, 2001)
Welsh & Forbes, Inc. v. Cendant Corp.
235 F.3d 176 (Third Circuit, 2000)
In Re: Cendant Corp Prides Litigation
234 F.3d 166 (Third Circuit, 2000)
In Re Cendant Corporation Prides Litigation
233 F.3d 188 (Third Circuit, 2000)
Welch & Forbes, Inc. v. Cendant Corp.
233 F.3d 188 (Third Circuit, 2000)
In re Cendant Corporation Securities Litigation
194 F.R.D. 158 (D. New Jersey, 2000)
In Re Cendant Corp. Prides Litigation
98 F. Supp. 2d 602 (D. New Jersey, 2000)

Cite This Page — Counsel Stack

Bluebook (online)
189 F.R.D. 321, 1999 WL 958953, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-cendant-corp-prides-litigation-njd-1999.