
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________          No. 96-1780                                    MARY V. PRATT,                                Plaintiff - Appellant,                                          v.                                 KELLEY C. PHILBROOK,                                Defendant - Appellee.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                    [Hon. Michael A. Ponsor, U.S. District Judge]                                             ___________________                                 ____________________                                        Before                           Stahl and Lynch, Circuit Judges,                                            ______________                            and Woodlock,* District Judge.                                           ______________                                _____________________               Edward W. McIntyre for appellant.               __________________               Paul G. Pino, with whom Clark, Balboni & Gildea was on brief               ____________            _______________________          for appellee.                                 ____________________                                    March 19, 1997                                 ____________________                                        ____________________          *  Of the District of Massachusetts, sitting by designation.                    WOODLOCK, District  Judge.  At a  settlement conference                    WOODLOCK, District  Judge.                              _______________          with  the trial judge, the parties announced they had agreed upon          terms to  resolve this case.   The trial judge told  them that he          would  enter a 60-day  Settlement Order of  Dismissal and invited          them  to return to him if  problems arose during that time period          which  impeded consummation of the settlement.  Within a day such          problems arose  but the parties did  not alert the court.   After          sixty  days passed and the trial court heard nothing further from          the  parties,  the dismissal  became  final by  operation  of the          settlement order.  About  three weeks later, plaintiff's counsel,          who  ultimately framed his failure to  forestall the dismissal as          an instance of  excusable neglect  under Fed. R.  Civ. P.  60(b),          began  to seek  to  have  the  dismissal  vacated  and  the  case          reopened.    The  trial  judge  declined,  observing  that  if  a          settlement   order  of   dismissal   were   vacated  under   such          circumstances, the order would essentially be meaningless.                      Although the trial judge's views are  not unreasonable,          the Supreme Court recently has signalled a substantial degree  of          elasticity   in   the   definition   of    "excusable   neglect."          Accordingly, we remand this matter to the trial judge to consider          whether the plaintiff has  satisfied the latitudinarian standards          for excusable neglect the Supreme Court has outlined.                                          I                                          I                    In Pioneer  Inv. Servs.  Co. v. Brunswick  Assocs. Ltd.                       _________________________    _______________________          Partnership, 507 U.S.  380 (1993), the Supreme Court  phrased the          ___________                                         -2-          question presented  as whether an attorney's  inadvertent failure          to  file  a   proof  of   claim  in  a   Chapter  11   Bankruptcy          reorganization case within  the deadline set  by the Court  could          constitute  "excusable neglect"  within  the meaning  of Fed.  R.          Bank. P. 9006(b)(1).  Id. at 383.                                    ___                    The Court  declined to limit the  "neglect" which might          be  excusable  to  those   circumstances  caused  by  intervening          circumstances  beyond  a  party's  control.   Rather,  the  Court          concluded  that  "Congress plainly  contemplated that  the courts          would  be permitted,  where appropriate,  to accept  late filings          caused  by inadvertence, mistake, or carelessness."   Id. at 388.                                                                ___          The Court  further indicated  that the  concept of "neglect"  for          purposes  of Fed. R.  Civ. P. 60(b)  "encompass[es] situations in          which  the   failure  to  comply   with  a  filing   deadline  is          attributable to negligence."  Id. at 394.                                          ___                    As to the requirement  that the neglect be "excusable,"          the  Court  established  a   balancing  test  which  requires  an          equitable   determination   "taking  account   of   all  relevant          circumstances  surrounding the  party's omission."   Id.  at 395.                                                               ___          Such  factors were found to  include "the danger  of prejudice to          [an adverse party],  the length  of the delay  and its  potential          impact  on  judicial  proceedings,  the  reason  for  the  delay,          including  whether it  was within  the reasonable control  of the          movant, and whether the movant acted in good faith." Id.                                                               ___                                         -3-                    Pioneer appeared on  its face to resolve  only a narrow                    _______          issue  of  bankruptcy practice.    But  by construing  "excusable          neglect," a phrase used  throughout the Federal Civil,1 Criminal2          and Appellate3 Rules of Procedure, Pioneer must  be understood to                                             _______          provide guidance outside the bankruptcy context.                      That  the Pioneer  test  for  "excusable  neglect"  was                              _______          intended to  extend beyond the bankruptcy  context was emphasized          by the  Supreme Court last term in  Stutson v. United States, 116                                              _______    _____________          S.  Ct. 600 (1996), when  the Court summarily  granted a petition                                        ____________________          1   The phrase "excusable  neglect" appears  in Fed.  R. Civ.  P.          Rules  6(b), 13(f)  and  60(b).   The  Supreme Court  in  Pioneer                                                                    _______          referred explicitly to  each one  of these rules.   Pioneer,  507                                                              _______          U.S. at 391-93.   The Court specifically observed that in Fed. R.          Civ.  P. 6(b),  as  in  Bankruptcy  Rule  9006(b)  which  it  was          construing, "there is no indication that anything  other than the          commonly  accepted meaning of  [excusable neglect] was intended."          Id. at 391.   Since  Pioneer, courts have  concluded the  Pioneer          ___                  _______                              _______          standard of "excusable neglect"  should apply to Fed. R.  Civ. P.          6(b).   See,  e.g., Committee  for Idaho's  High Desert,  Inc. v.                  ___   ____  __________________________________________          Yost, 92 F.3d 814,  825 n.4 (9th Cir. 1996); 44  Liquormart, Inc.          ____                                         ____________________          v. Rhode Island, 940 F. Supp. 437, 440 (D.R.I. 1996).             ____________          2   Fed. R.  Crim. P.  45(b) permits courts  to enlarge  the time          limits  set  for certain  actions if  failure  to act  within the          specified  time was the result of "excusable neglect."  The Court          in  Pioneer also  referred to  the use  of the  phrase "excusable              _______          neglect" in the Criminal  Rules by noting that Rule  45(b), "like          [Bankruptcy] Rule 9006(b),  was modeled after  [Fed. R. Civ.  P.]          Rule 6(b)."  507 U.S. at 392 n.9.          3  The Court in Pioneer referenced the phrase "excusable neglect"                          _______          in Fed. R. App. P. 4(a)(5).  The Court placed this reference in a          footnote explaining why it had granted certiorari on the issue of          "excusable neglect."  Id. at  387 n.3.  In that  explanation, the                                ___          Court included the fact  that "[t]he Courts of Appeals  similarly          have divided  in their interpretations on  'excusable neglect' as          found in Rule 4(a)(5)."  Id.  We have since  held that "Pioneer's                                   ___                            _________          exposition of excusable neglect . . . applies equally to  Fed. R.          App.  P. 4(a)(5)."  Virella-Nieves v. Briggs & Stratton Corp., 53                              ______________    _______________________          F.3d 451, 454 n.3 (1st Cir. 1995).                                           -4-          for certiorari, vacated the judgment  below and remanded the case          (GVR) for  further consideration of the  applicability of Pioneer                                                                    _______          to a failure to  file a criminal appeal within  the 10-day period          called  for by  Fed. R.  App. P.  4(b).   While not  definitively          determining  the scope of Pioneer, the Supreme Court's use of the                                    _______          GVR  procedure in Stutson is  an exercise of  a reviewing court's                            _______          prudential powers to permit  a lower court that had  not directly          confronted an  intervening clarification in  the law to  have the          first  opportunity to adjust or correct its earlier decision.  As          the Court noted in a companion case  discussing resort to the GVR          procedure,  Lawrence on behalf of  Lawrence v. Chater,  116 S. Ct                      _______________________________    ______          604 (1996):                      Where intervening developments, or recent                      developments  that  we  have   reason  to                      believe the court below did not consider,                      reveal a reasonable probability  that the                      decision  below rests upon a premise that                      the lower court would reject if given the                      opportunity  for  further  consideration,                      and   where  it   appears  that   such  a                      redetermination    may   determine    the                      ultimate outcome of the litigation, a GVR                      order   is,   we   believe,   potentially                      appropriate.                    As did the Supreme  Court in Stutson, we deal  with the                                                 _______          need  to evaluate  the potential  applicability of  the balancing          test  announced  in  Pioneer  to a  different  realm  of  federal                               _______          procedure.  The importance of permitting the trial judge--who did          not  have Pioneer brought to  his attention but  is more familiar                    _______          with the dynamics of the settlement process that broke down here-          -the opportunity of  developing the record  more fully is  plain.                                         -5-          In the interests of  justice, the trial judge should  be afforded          the full  opportunity  to  calibrate  the balance  in  the  first          instance, particularly if there  is a reasonable probability that          a different  outcome would  result.   A review  of the  course of          proceedings below suggests that there is such a probability.                                          II                                          II                    Exercising the  hands-on case management in  pursuit of          settlement encouraged by  the Civil Justice Reform  Act of 1990,4                                        ____________________          4  The Civil Justice  Reform Act of 1990 ("the CJRA")  is Title I          of  the Judicial Improvements Act  of 1990, Pub.  L. No. 101-650,          104 Stat. 5089.  The CJRA, which is codified at 28 U.S.C.    471-          82,  requires that each United States  District Court implement a          plan in order, inter alia, to "improve litigation management, and                         __________          ensure  just,  speedy,   and  inexpensive  resolution   of  civil          disputes."   28  U.S.C.    471.   The CJRA  lists guidelines  for          litigation  management   that  federal  courts  may  consider  in          formulating their plans.  These include, in pertinent part:                               (2) early  and ongoing control of  the pretrial process                    through involvement of  a judicial officer  . . .;  (3)                    . . .  careful  and  deliberate  monitoring  through  a                    discovery-case management  conference  or a  series  of                    such conferences . . . .          Id.   473(a).            ___             While  the CJRA did not  focus on judicial  involvement in the          settlement  process, the  Act reinforced  the 1983  amendments to          Fed.  R. Civ.  P.  16,  which  were  designed  to  recognize  the          "informal  use of  pretrial  conferences  to  promote  settlement          [through]  increased judicial settlement  efforts."  Stephen McG.          Bundy,  The Policy in Favor of Settlement in an Adversary System,                  ________________________________________________________          44 Hastings L.J. 1, 58 (1992).   The CJRA "implie[d] that a local          expense and delay reduction plan that authorizes judges to compel          represented parties to participate  in settlement conferences . .          . is lawful. . . ."  Id. at 60.                                 __             The CJRA plan for the District  of Massachusetts accepted that          implication  and  directed  active  encouragement  of  settlement          efforts by the judicial officer.  The plan provides that:                                                     -6-                                        ____________________                      At every conference conducted under these                      rules, the judicial officer shall inquire                      as   to  the   utility  of   the  parties                      conducting    settlement    negotiations,                      explore   means  of   facilitating  those                      negotiations,    and    offer    whatever                      assistance that may be appropriate in the                      circumstances.  Assistance may  include a                      reference of the case to another judicial                      officer    for    settlement    purposes.                      Whenever a settlement conference is held,                      a  representative of  each party  who has                      settlement authority shall  attend or  be                      available by telephone.             Rule  4.02 Settlement,  Expense and  Delay Reduction Plan  of the          United States  District Court  for the District  of Massachusetts          (Adopted Nov. 18, 1991).             The District Court's  CJRA Plan is implemented by  local rules          mandating settlement  discussions  as  part  of  case  management          procedures.  See, e.g., L.R.  16.1(C) "Early Assessment of Cases"                       ___  ____          (requiring settlement  proposals in advance of initial scheduling          conference);  L.R.  16.3(A)(1)   "Case  Management   Conferences"          (directing  exploration of  "possibility of  settlement" at  each          case  management conference);  L.R. 16.4(B)  "Alternative Dispute          Resolution"  (mandating  inquiry by  judicial  officer concerning          settlement at every conference conducted under Local Rules).             We  note  that  while   current  legislation  and   rulemaking          initiatives have been encouraging active judicial  involvement in          pursuing  settlements, a  relatively  recent  examination of  the          judicial role in the process strikes a cautionary note.                      Once we recognize that all  components of                      the  intricate  ecology of  disputing are                      linked    in   complex    and   sometimes                      paradoxical ways to what courts do, it is                      manifest  that  the obligation  of seeing                      justice  is  done  is not  discharged  by                      uncritical celebration  of settlement (or                      uncritical  condemnation  of  it).     It                      requires a discriminating appreciation of                      the complex dynamics  of various  species                      of  settlements  in different  bargaining                      arenas and an appreciation of the limited                      capacity  of  the devices  for regulating                      them.   Settlement is not the  answer; it                                         -7-          the trial  judge in this  motor vehicle accident  diversity case,          brought  by a then 89-year-old plaintiff, set the matter down for          a  settlement conference on January 17, 1996.  In order to ensure          a full discussion of the possible ramifications of settlement, he          directed not only that  the parties and their attorneys  but also          the   attorney  for   a  non-party   potential  claimant   and  a          representative of  the defendant's insurance company  be present.          After  separate discussions  with  the trial  judge, the  parties          advised the court they were prepared  to settle the case both  as          to  the plaintiff  and as  to the  non-party claimant  within the          policy limits.   The judge  then informed counsel  that he  would          issue a 60-day Order of Dismissal permitting them the opportunity          to tie up any loose ends regarding the  settlement.  He expressly          instructed the parties that  the 60-day Order of Dismissal  "will          be the end of the case as far as I'm concerned."   He emphasized,          however,  that "if you have any problems . . . let me know and we          can restore the case to the docket and pursue it."                    The following  day, January 18, 1996,  the 60-day Order          issued from the court providing "this action is dismissed without          costs and without prejudice  to the right, upon good  cause shown          within sixty (60) days, to reopen the action if settlement is not                                        ____________________                      is the question.            Marc  Galanter  &  Mia  Cahill,  "Most  Cases  Settle":  Judicial                                           ________________________________          Promotion and Regulation  of Settlements, 46 Stan. L.  Rev. 1339,          ________________________________________          1391 (1994).                                          -8-          consummated  by the  parties."5   That same  day new  information          which impacted the terms of the settlement apparently came to the          attention of plaintiff's  attorney.  The  precise nature of  this          information is unclear to us but appears to involve recalcitrance          by an interested entity not present at the settlement conference,          the  insurer  of the  non-party  potential claimant.    The trial          court, however,  was not  informed of any  difficulties regarding          the  settlement until April 8,  1996, some three  weeks after the          close of the 60-day period established before the dismissal would          become final.   In a letter  to the  court that day,  plaintiff's          counsel  reported that  "despite the  good  faith .  . .  and due          diligence of counsel for both the plaintiff . . . and defendant .          . . settlement has  not been consummated."  The  letter requested          the "earliest possible trial  date."  The trial court  deemed the          letter a motion to  vacate the Settlement Order of  Dismissal and          denied it as untimely and lacking any showing of good cause.                    On April 18, plaintiff's  counsel filed a formal Motion          for Reconsideration  of Plaintiff's Motion to  Vacate the Court's                                        ____________________          5   The 60-day order procedure  has developed as a  mechanism for          the trial  courts  to  bring cases  to  closure  while  retaining          jurisdiction to enforce a  settlement for a period of  time after          closure is announced.   In Kokkonen v. Guardian  Life Ins. Co. of                                     ________    __________________________          Am., 511 U.S. 375, ---. 114 S. Ct. 1673, 1677 (1994), the Supreme          ___          Court  observed   that  a   district  court  could   only  retain          jurisdiction  to  enforce a  settlement  if  the dismissal  order          expressly reserved such jurisdiction or if the court incorporated          the settlement agreement into the dismissal order.  See generally                                                              ___ _________          In re  Mal de Mer Fisheries,  Inc., 885 F. Supp.  635, 637-38 (D.          __________________________________          Mass. 1995).                                           -9-          January  18, 1996 Settlement Order of Dismissal.6  In the motion,          plaintiff's counsel acknowledged that he learned of problems with          the  settlement  the  day  after the  settlement  conference  but          instead of "resort[ing] to the Court to resolve the conflict, the          parties worked diligently to achieve settlement."  On May 15, the          trial  judge  denied  the  motion  in  a  five  page  memorandum,          concluding:                      The plain  fact of the matter  is that if                      this  court  were  to  allow  plaintiff's                      Motion for Reconsideration, the sixty-day                      Order  of Dismissal  would be  a nullity.                      There  would be no  reasoned way that the                      court  could ever deny an untimely motion                                   ____                      for reconsideration brought by  any other                      party.   No good  cause has  been offered                      for plaintiff's counsel's failure in this                      case  to proceed  in accordance  with the                      Order's  terms.   Settlement  discussions                      offer no  excuse . . .  . The unavoidable                      fact is that plaintiff's counsel, without                      any  articulable  excuse, simply  ignored                      the contents of the  January 18 Order . .                      . .                    On  June 10,  plaintiff's  counsel filed  a Motion  for          Relief pursuant to Fed.  R. Civ. P. 60(b) on grounds of excusable          neglect and inadvertency.  On June 27, the trial judge denied the          60(b) motion.                                        ____________________          6   The motion indicated that  it was assented  to by defendant s          counsel.   At oral argument, however,  defendant s counsel stated          that the assent was only to permit reconsideration and not to the          ultimate relief of vacating the judgment sought by plaintiff.  In          any event, the defendant lodged no objection to the relief sought          by plaintiff's attorney in his letter of April 8 or his motion of          April 18.                                         -10-                    At no point  in proceedings before the  trial court was          the  decision  of  the Supreme  Court  in  Pioneer  cited or  its                                                     _______          implications argued.                                         III                                         III                    On  the record  before  us, the  issue  is whether  the          failure of counsel to inform  the court in a timely  fashion that          the settlement had unravelled was "excusable neglect," within the          meaning of  Fed. R.  Civ. P.  60(b)(1).  That  it was  neglect is          manifest; counsel neglected to pay heed to a direction to provide          timely  notice  to the  court that  the  settlement would  not be          consummated  within the  60-day  period.   The  open question  is          whether the neglect was excusable.                    The determination  whether  the neglect  was  excusable          should  be left in the  first instance to  the trial court, which          was never afforded  the opportunity to  evaluate the question  in          light  of Pioneer.   This  is  especially appropriate  here where                    _______          there  apparently was  off-the-record consultation  involving the          trial judge regarding the terms of the settlement, and the formal          record  regarding  its breakdown  is  relatively undeveloped,  no          doubt because the areas  for development that Pioneer identifies,                                                        _______          504 U.S. at 394, were not explored.                      From our  vantage  point it  is difficult  to see  what          cognizable  prejudice,  in  the   sense,  for  example,  of  lost          evidence, would come  to the defendant  from reopening the  case.          Of course,  it is always prejudicial  for a party to  have a case                                         -11-          reopened after it has been closed advantageously by an opponent's          default.  But we do not think that is the sense in which the term          "prejudice"  is used  in Pioneer.   Moreover,  the delay  was not                                   _______          particularly  extended.    Impact  on  judicial  proceedings   is          arguably of concern; but if the parties had reported  on the 59th          day  that the settlement could  not be consummated,  it would not          appear  to have a materially less significant impact than it does          here  when the  report occurred  some 21  days later.7   Finally,          there  does not  appear to have  been a  lack of  good faith with          respect  to the  reason  for  the  delay;  from  all  the  record          discloses the  cause of  the difficulties was  beyond plaintiff's          control.   It seems  that a  stranger to  the litigation with  an                                        ____________________          7  In circumstances such as these, Fed. R. Civ. P. 60(b) provides          a  fail-safe   mechanism  to   guard  against  the   finality  of          improvident judgments.   The  relatively expansive  one-year time          period under Fed. R. Civ. P. 60(b)(1) for challenges to judgments          flowing from  excusable neglect is designed  to permit considered          review  and  assertion  of  such  grounds.    This  mechanism  is          designedly  at  the expense  of  the  rigid enforcement  of  more          compressed  time periods imposed  for acts  required to  be taken          before judgment enters.             Defendant correctly  observes that it  was not until  June 10,          nearly  three  months  after  the  dismissal  took  effect,  that          plaintiff expressly framed the issue under Fed. R. Civ. P. 60(b).          Defendant  notes that in Pag n v. American Airlines, 534 F.2d 990                                   _____    _________________          (1st Cir. 1976), we upheld denial of  a 60(b)(1) motion not filed          until four  months after  the conclusion  of a  60-day settlement          order period and  argues we should act in  the same fashion here.          It  is a  sufficient answer to  observe that  Pag n substantially                                                        _____          predates  Pioneer.   Moreover,  here there  were relatively  more                    _______          timely efforts, albeit not framed  expressly under Rule 60(b), to          set  aside the judgment.   Even in Pag n,  there were indications                                             _____          the trial court would  have considered reinstating the case  if a          request  had been made within two months after the dismissal took          effect.  Id. at 993.                    ___                                         -12-          interest in a potential claim was making threatening noises.  The          parties  apparently  hoped to  work  to  resolve the  impediments          without  the court's intervention.   There was no gamesmanship by          plaintiff  here.    Rather  we have  an  instance  of inattentive          hopefulness blinding  plaintiff's counsel  to the need  to assure          that a time deadline was met.                    We   do  not   deny   the   importance  of   timeliness          requirements  in the  fair and  efficient management  of a  trial          court's busy docket.  Especially in an era when great emphasis is          placed on vigilant judicial oversight of the various alternatives          to  the resolution process, failure  of the parties  to adhere to          deadlines  is a practice that can be  disruptive of the rights of          other  litigants in other cases  who also are  entitled to active          judicial attention.  But the Supreme Court has recently adopted a          forgiving  attitude toward  instances of  "excusable neglect,"  a          term Pioneer suggests will be given a broad reading.               _______                    Whether  the failure of  plaintiff's attorney to notify          the district court in a timely fashion regarding the breakdown of          the  settlement  in  this  case   comes  within  the  meaning  of          "excusable neglect" as explicated  in Pioneer, is a matter  to be                                                _______          resolved initially by  the trial  court on  the basis  of a  more          extended record.                                          IV                                          IV                    Accordingly,  we  hereby  vacate  the  denial   of  the                                              vacate                                              ______          plaintiff's Rule 60(b) motion  and remand this case to  the trial                                             remand                                             ______                                         -13-          court for further proceedings consistent with this opinion.                                         -14-
