                               In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 17-2275
NICK PEARSON, et al.,
                                                 Plaintiffs-Appellees,

                                 v.

TARGET CORPORATION, NBTY, INC. and REXALL SUNDOWN,
INC.,
                                  Defendants-Appellees,

APPEAL OF: THEODORE H. FRANK,
                                                                Objector.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
            No. 11 C 7972 — John Robert Blakey, Judge.
                     ____________________

     ARGUED JANUARY 16, 2018 — DECIDED JUNE 26, 2018
                     ____________________

   Before WOOD, Chief Judge, and ROVNER and HAMILTON,
Circuit Judges.
   WOOD, Chief Judge. Inequitable settlements are an unfortu-
nate recurring bug in our system of class litigation. Federal
Rule of Civil Procedure 23(e) is designed to minimize such
2                                                     No. 17-2275

problems, but appeals by class members who object to a set-
tlement indicate that the system still needs improvement. All
too often, class counsel negotiate a settlement with substantial
attorneys’ fees but meager benefits for the class. See, e.g., Red-
man v. RadioShack Corp., 768 F.3d 622, 638–39 (7th Cir. 2014).
Named plaintiffs fail to live up to their ethical obligations as
fiduciaries to the class. See, e.g., Eubank v. Pella Corp., 753 F.3d
718, 723–24 (7th Cir. 2014). The objector-appellant before us,
Theodore Frank, has brought problems like these to our atten-
tion before, including in an earlier appeal in this case. See, e.g.,
Pearson v. NBTY, Inc., 772 F.3d 778 (7th Cir. 2014); In re Subway
Footlong Sandwich Mktg. & Sales Practices Litig., 869 F.3d 551
(7th Cir. 2017).
    But this appeal is different. It does not concern the class
settlement itself, but rather what happened after the district
court approved the settlement. Frank characterizes it as “ob-
jector blackmail”: an absent class member objects to a settle-
ment with no intention of improving the settlement for the
class. Instead, the objector files her objection, appeals, and
pockets a side payment in exchange for voluntarily dismiss-
ing the appeal. A potential benefit for the class—a better set-
tlement—is leveraged for a purely personal gain—a side bar-
gain. Although Rule 23 may change at the end of this year, if
Congress allows some proposed amendments to go into ef-
fect, up until now the federal rules have not had any provision
targeted at side settlements reached on appeal. Proposed
Amendments to the Federal Rules of Civil Procedure, Rules 5, 23,
62, and 65.1, Slip Order at *9–15 (U.S. Apr. 26, 2018),
https://www.supremecourt.gov/orders/courtor-
ders/frcv18_5924.pdf.
No. 17-2275                                                    3

    In this case, three objectors voluntarily dismissed their ap-
peals before appellate briefing began. Frank suspects that
they acted in bad faith. He hoped to bring the issue to the dis-
trict court’s attention, but he was stymied because final judg-
ment had already been entered with prejudice. Frank moved
for a limited reopening of the case, but the district court de-
nied that motion. Because the motion should have been
granted and Frank allowed to pursue his theory, we reverse.
                                I
    Nick Pearson filed this suit in November 2011 on behalf of
a putative class of consumers who purchased glucosamine, a
dietary supplement advertised for its benefits to joint health.
The class alleged that Target Corporation, NBTY, Inc., and
Rexall Sundown, Inc., violated consumer protection laws by
making false claims about the efficacy of the supplement. The
parties reached a settlement, which the district court initially
approved on January 22, 2014. Frank objected and appealed
to this court. We reversed because the settlement provided
outsized benefits for class counsel. Pearson, 772 F.3d at 787. On
remand, the parties reached a new settlement, which the dis-
trict court approved on August 25, 2016. The district court en-
tered final judgment on the same day; its order reflected its
approval of the settlement, which included both monetary
and injunctive relief. We call this the “Settlement Judgment.”
The order specified that the action was being dismissed
“‘without prejudice’ so as to allow the Court to supervise the
implementation and administration of the Settlement.”
    Three unnamed class members—Steven Buckley, Pat-
rick Sweeney, and Randy Nunez—objected and filed appeals.
All three dismissed their appeals before briefing began. From
4                                                    No. 17-2275

here the proceedings took an unusual turn. After the volun-
tary dismissal of the objectors’ appeals, the district court en-
tered a new order on November 18 dismissing the (already
dismissed) action. Unlike the Settlement Judgment, the No-
vember dismissal was unconditional: it was entered with prej-
udice and was not accompanied by any order effectuating the
settlement. We call this the “Post-Appeal Judgment.”
    On December 7, Frank moved to intervene and disgorge
any side settlements made by the other three objectors. Frank
claims that because the appeals were brought on behalf of the
class, the class is entitled to any proceeds from the side settle-
ments. Judge Zagel, who had presided over the case since
2012, approved a briefing schedule for the issue on December
12. But because Judge Zagel had taken senior status, the case
was reassigned to Judge Blakey the next day. Judge Blakey
promptly struck Frank’s motion and vacated the briefing
schedule, reasoning that the court lacked jurisdiction to con-
sider the issue because the Post-Appeal Judgment had termi-
nated all proceedings in the district court. That order, how-
ever, did not stop the named plaintiffs from moving two
months later for court approval of the distribution of class set-
tlement funds. The court denied the motion, again for want of
jurisdiction, on March 6, 2017. Finally, on May 19, Frank
moved under Federal Rule of Civil Procedure 60(b) to vacate
the Post-Appeal Judgment and restore the Settlement Judg-
ment as the applicable final judgment. That, he believed,
would allow the court to entertain his previous motion to dis-
gorge any side payments. The district court denied the motion
the same day. Frank appealed. Because all appellees declined
to file briefs, Frank was the lone party represented on appeal.
No. 17-2275                                                      5

                                II
                                A
    Before addressing the merits, we must consider whether
Frank was entitled to bring a Rule 60(b) motion in the first
place. Rule 60(b) contemplates relief only for “a party or its
legal representative.” FED. R. CIV. P. 60(b). Thus, Frank must
count as a “party” to bring the motion and, consequently, to
bring this appeal. Absent class members, such as Frank, “may
be parties for some purposes and not for others.” Devlin v.
Scardelletti, 536 U.S. 1, 9–10 (2002). Generally, they are not par-
ties for Rule 60(b) purposes. In re Four Seasons Sec. Litig.,
525 F.2d 500, 504 (10th Cir. 1975). But this is not an absolute
rule. While we have never so held in a published opinion, “it
has long been the general rule that some form of participation
in the litigation is necessary before an unnamed class member
can seek relief under Rule 60(b).” Adelson v. Ocwen Fin. Corp.,
621 F. App’x 348, 351 (7th Cir. 2015); see also In re Four Seasons,
525 F.2d at 504; 6 NEWBERG ON CLASS ACTIONS § 18:40 (5th ed.
2017); cf. Devlin, 536 U.S. at 10 (“The label ‘party’ does not in-
dicate an absolute characteristic, but rather a conclusion about
the applicability of various procedural rules that may differ
based on context.”). Through his objection to the initial settle-
ment and litigation of a prior appeal, Frank has brought him-
self within the bounds of Rule 60(b). To hold otherwise would
risk “depriv[ing] nonnamed class members of the power to
preserve their own interests in a settlement.” Devlin, 536 U.S.
at 10.
                                B
    Rule 60(b) delineates six grounds upon which relief from
a judgment can be granted. Frank invoked two in the district
6                                                      No. 17-2275

court and reasserts them here: Rule 60(b)(1) (“mistake, inad-
vertence, surprise, or excusable neglect”) and Rule 60(b)(6)
(“any other reason that justifies relief”). FED. R. CIV. P. 60(b)(1),
(6). The two rules are mutually exclusive—Rule 60(b)(6), as a
residual catchall, applies only if the other specifically enumer-
ated rules do not. Brandon v. Chi. Bd. of Educ., 143 F.3d 293, 295
(7th Cir. 1998). This difference is of great importance if the
60(b) motion is filed outside the one-year limit prescribed for
Rules 60(b)(1)–(3), see Rule 60(c)(1), but Frank’s motion is
timely no matter which subsection is used.
     Rule 60(b)(1) applies to “errors by judicial officers as well
as parties.” Wesco Prods. Co. v. Alloy Auto. Co., 880 F.2d 981,
984–85 (7th Cir. 1989). Rule 60(b)(6) is even more open-ended;
it is flexible and gives courts “wide discretion.” Buck v. Davis,
137 S. Ct. 759, 777 (2017). It is “available only in ‘extraordinary
circumstances,’” but courts may consider “a wide range of
factors” to determine if “extraordinary circumstances are pre-
sent.” Id. at 777–78 (quoting Gonzalez v. Crosby, 545 U.S. 524,
535 (2005)). Denials of Rule 60(b) motions are reviewed for
abuse of discretion. Acosta v. DT & C Glob. Mgmt., LLC,
874 F.3d 557, 560 (7th Cir. 2017). Considerable deference to the
district court is appropriate because ruling on such a motion
is not “a task that gives rise to ‘error’ (as opposed to question-
able exercise of judgment), unless the judge leaves something
important out of his analysis.” Metlyn Realty Corp. v. Esmark,
Inc., 763 F.2d 826, 831 (7th Cir. 1985).
    Unfortunately, the latter is what happened in this case: the
district court discussed only Rule 60(b)(1) in its order and
failed to consider Frank’s Rule 60(b)(6) arguments. Had Frank
relied only on Rule 60(b)(1), the district court’s decision would
have been sound. The parties stipulated to the Post-Appeal
No. 17-2275                                                      7

Judgment, and usually a strategic decision is enough to sup-
port the denial of a Rule 60(b)(1) motion. Sadowski v. Bom-
bardier Ltd., 539 F.2d 615, 618 (7th Cir. 1976) (“Rule 60(b) is not
to be invoked to give relief to a party who has chosen a course
of action which in retrospect appears unfortunate or where
error or miscalculation is traceable really to a lack of care.”);
see also 11 Charles Alan Wright & Arthur Miller, FED. PRAC.
& PROC. CIV. § 2858 (3d ed. 2017) (noting that “deliberately
adopted stipulations” typically preclude Rule 60(b)(1) relief).
But Frank also invoked Rule 60(b)(6) in his motion, and par-
ticularly noted how the class context should affect Rule 60(b)’s
equitable considerations. As we have said in another context,
trial judges presiding over class actions may not always “as-
sume the passive role that is appropriate when there is a gen-
uine adverseness between the parties.” Redman, 768 F.3d at
629. It is fine to say that individual parties must bear the re-
sponsibility for their deliberate litigation conduct and leave it
at that. But class-action cases—with all their inherent agency
problems—require an extra analytical step to ensure that the
interests of the class are protected.
    Rule 60(b)(6) is a suitable vehicle to consider the class’s in-
terests. The Post-Appeal Judgment should have been vacated
under that rule for two independent reasons. First, the princi-
ple announced in Safeco Insurance Company of America v. Amer-
ican International Group, 710 F.3d 754, 758 (7th Cir. 2013), sup-
ports 60(b)(6) relief in this case. In Safeco, Liberty Mutual ob-
jected to a class settlement resolving claims pertaining to an-
other insurer’s misconduct in a reinsurance pool. Id. at 755–
56. Liberty Mutual appealed, but it moved to dismiss its ap-
peal under Federal Rule of Appellate Procedure 42(b) after
settling. Id. at 755. Although that motion followed a side set-
tlement between the objector and defendant, we found no
8                                                   No. 17-2275

cause for alarm. Several features of the litigation lessened the
possibility that Liberty Mutual had sold out the class: all class
members were sophisticated financial institutions, and Lib-
erty Mutual’s appeal implicated strong individual claims dis-
tinct from those of the class. Id. at 757. But we noted that if,
despite these indicators of reliability, the settlement disap-
pointed expectations, “a class member could file a motion in
the district court under Fed. R. Civ. P. 60(b)(3) (misconduct by
an opposing party) or 60(b)(6) (‘any other reason that justifies
relief’).” Id. at 758. We now face such a situation. Objectors
voluntarily dismissed their appeals. At this stage we do not
know why, but there is a real risk that they did so at the ex-
pense of the class. Safeco points to Rule 60(b)(6) as a safety
valve for precisely these situations.
    In several ways, this is an easier case than the one hypoth-
esized in Safeco. The compelling reasons suggesting that there
was nothing unfair about the settlement in that case—a class
of sophisticated financial institutions and an objector with in-
dividualized claims—are absent. This class is composed of or-
dinary consumers who, by terms of the settlement, could re-
cover no more than $200 each, and likely much less. To justify
even the filing fee, each objector must have been advancing
claims on behalf of the class as a whole. Frank also asks for
less than is typically at stake in a Rule 60(b) motion. He does
not seek to unwind the class settlement or to relitigate the
case. He asks only to effectuate the limited ancillary jurisdic-
tion contemplated by the class settlement agreement. This
makes the countervailing interest in finality under Rule 60(b)
somewhat less compelling. Following Safeco, Rule 60(b)(6) re-
lief was appropriate to ensure that no class sellout had oc-
curred.
No. 17-2275                                                      9

    Second, the Post-Appeal Judgment should be vacated be-
cause the change in retained jurisdiction from the Settlement
Judgment is inherently problematic. Under the earlier judg-
ment, the district court’s continuing jurisdiction over Frank’s
claim and other settlement disputes is clear. The dismissal
was “without prejudice” specifically to allow the court to re-
tain “exclusive jurisdiction over this action, the Parties, and
all Settlement Class members to determine all matters relating
in any way to the Final Judgment and Order, the Preliminary
Approval Order, or the Settlement Agreement … .” Even if
this Settlement Judgment had been made with prejudice, it
would have allowed for ancillary enforcement jurisdiction be-
cause the terms of the settlement were embodied in a court
order. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375,
381 (1994); Hill v. Baxter Healthcare Corp., 405 F.3d 572, 577 (7th
Cir. 2005). By superseding the Settlement Judgment, the Post-
Appeal Judgment constructively revised the settlement agree-
ment itself. Without the agreed-upon court monitoring of the
settlement, the class could no longer enforce the injunctive re-
lief embodied in the settlement agreement or resolve issues
with common fund distributions.
    Material alterations to a class settlement generally require
a new round of notice to the class and a new Rule 23(e) hear-
ing. In re Baby Prods. Antitrust Litig., 708 F.3d 163, 175 & n.10
(3d Cir. 2013). This requirement “may be implicated when
class counsel seeks to bargain away the right to enforce por-
tions of a previously entered settlement.” Keepseagle v. Vilsack,
102 F. Supp. 3d 306, 313–14 (D.D.C. 2015). The Post-Appeal
Judgment removed that benefit from the class without giving
absent members the option to weigh in. This need not have
been the case. The stipulated judgment was filed pursuant to
Rule 41(a)(1)(A)(ii), which typically requires no court order to
10                                                   No. 17-2275

effectuate dismissal. Nonetheless, the rule’s operation is
“[s]ubject to Rule[] 23(e).” FED. R. CIV. P. 41(a)(1)(A). And that
rule requires district court approval (and accompanying scru-
tiny) for any voluntary dismissal of a class action. FED. R. CIV.
P. 23(e). It does not appear that the Rule 23(e) procedures were
applied to the Post-Appeal Judgment. We do not know
whether class counsel intended to bargain away rights with
the stipulated dismissal, or merely did so accidentally. But
whatever the reason, the class was disadvantaged by the Post-
Appeal Judgment and received no offsetting benefit. “Rule
60(b)(6) is fundamentally equitable in nature,” Ramirez v.
United States, 799 F.3d 845, 851 (7th Cir. 2015), and this delete-
rious effect on the class’s interest separately supports relief
under the rule. By failing to pursue these lines of analysis, the
district court abused its discretion. The Post-Appeal Judg-
ment must be vacated, and Frank must be allowed to pursue
his theory pursuant to the ancillary jurisdiction preserved in
the Settlement Judgment.
                               III
    By all accounts, selfish settlements by objectors are a seri-
ous problem. See John E. Lopatka & D. Brooks Smith, Class
Action Professional Objectors: What to do About Them?, 39 FLA.
ST. U. L. REV. 865, 871–72 (2012) (proposing an amendment to
the appellate rules to allow greater appeal bonds to deter ex-
tortionate objectors); Marie Leary, STUDY OF CLASS ACTION
OBJECTOR APPEALS IN THE SECOND, SEVENTH, AND NINTH
CIRCUIT COURTS OF APPEALS 10 (Federal Judicial Center 2013)
(finding that all 27 objector appeals in this circuit during the
period studied were voluntarily dismissed). Admittedly, we
are not without fault for contributing to the problem. We
could have provided more scrutiny at an earlier stage before
No. 17-2275                                                     11

granting the Federal Rule of Appellate Procedure 42 motion
to dismiss the appeal voluntarily. As we noted above, the in-
dicia of reliability in Safeco were absent. But, as we briefly
noted earlier, our oversight may be of limited future conse-
quence. The Supreme Court has transmitted to Congress an
amendment of Rule 23 designed to prevent this problem from
recurring. If Congress allows the amendment to go into effect,
see 28 U.S.C. § 2074(a), the new Rule 23(e)(5)(B) would require
district court approval, after a hearing, of any “payment or
other consideration” provided for “forgoing or withdrawing
an objection” or “forgoing, dismissing, or abandoning an ap-
peal.” See Proposed Amendments to the Federal Rules of Civil Pro-
cedure, Rules 5, 23, 62, and 65.1, Slip Order at *11 (U.S. Apr. 26,
2018),         https://www.supremecourt.gov/orders/courtor-
ders/frcv18_5924.pdf. The pending amendments to Rule 23
may solve the problem prospectively, but that does nothing
for the case before us.
   We have nothing to say about the merits of Frank’s chal-
lenge. Indeed, we do not even know if there was anything
amiss about these objector appeals. We thus refrain from dis-
cussing the remedies Frank has proposed. On remand, the
parties and the court can tailor evidentiary proceedings to re-
solve any factual disputes before confronting the propriety of
any remedy.
                               ***
   The district court mistook the scope of its discretion and
the nature of the problem before it when it denied Frank’s
60(b) motion. Accordingly, we REVERSE and REMAND for fur-
ther proceedings consistent with this opinion.
