Pincay v. Andrews

• Decision Date: 15 November 2004
• Docket Number: No. 02-56577.,02-56577.
• Citation: 389 F.3d 853
• Parties: Laffit PINCAY, Jr.; Christopher J. McCarron, Plaintiffs-Appellants, v. Vincent S. ANDREWS; Robert Andrews; Vincent Andrews Management Corp., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

389 F.3d 853

Laffit PINCAY, Jr.; Christopher J. McCarron, Plaintiffs-Appellants, v. Vincent S. ANDREWS; Robert Andrews; Vincent Andrews Management Corp., Defendants-Appellees.

No. 02-56577.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted En Banc June 24, 2004.

Filed November 15, 2004.

Neil Papiano and Patrick McAdam, Iverson, Yoakum, Papiano & Hatch, Los Angeles, CA, for plaintiffs-appellants.

David Boies and Robert Silver, Boies, Schiller & Flexner, LLP, Armonk, NY, for defendants-appellees.

Appeal from the United States District Court for the Central District of California; William Matthew Byrne, Senior Judge, Presiding. D.C. Nos. CV-89-01445-WMB, CV-89-04965-WMB.

Before SCHROEDER, Chief Judge, KOZINSKI, RYMER, KLEINFELD, THOMAS, SILVERMAN, McKEOWN, GOULD, BERZON, RAWLINSON, and CALLAHAN, Circuit Judges.

SCHROEDER, Chief Judge.

This appeal represents a lawyer's nightmare. A sophisticated law firm, with what it thought was a sophisticated system to determine and calendar filing deadlines, missed a critical one: the 30-day time period in which to file a notice of appeal under Federal Rule of Appellate Procedure 4(a)(1)(A). The rule, however, provides for a grace period of 30 days within which a lawyer in such a fix may ask the district court for an extension of time, and the court, in the exercise of its discretion, may grant the extension if it determines that the neglect of the attorney was "excusable."¹ Here an experienced trial judge found excusable neglect, and the appellee asks us to overturn that ruling.

The underlying dispute began in 1989 when Laffit Pincay, Jr. and Christopher McCarron (Pincay) sued Vincent S. Andrews, Robert L. Andrews, and Vincent Andrews Management Corp. (Andrews) for financial injuries stemming from alleged violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) and California law. In 1992, a jury returned verdicts in Pincay's favor on both the RICO and the California counts. Pincay was ordered to elect a remedy, and he chose to pursue the RICO judgment. This judgment was reversed on appeal on the ground that the RICO claim was barred by the federal statute of limitations. Pincay v. Andrews, 238 F.3d 1106, 1110 (9th Cir.2001). On remand, Pincay elected to pursue the remedy on his California law claim. Judgment was entered in his favor on July 3, 2002.

Andrews's notice of appeal was due 30 days later, but a paralegal charged with calendaring filing deadlines misread the rule and advised Andrews's attorney that the notice was not due for 60 days, the time allowed when the government is a party to the case. See Fed. R.App. P. 4(a)(1)(B). Andrews's counsel learned about the error when Pincay relied upon the judgment as being final in related bankruptcy proceedings, and Andrews promptly tendered a notice of appeal together with a request for an extension within the 30-day grace period. By that time the matter had been in litigation for more than 15 years. Everyone involved should have been well aware that the government was not a party to the case, and any lawyer or paralegal should have been able to read the rule correctly. The misreading of the rule was a critical error that, had the district court viewed the situation differently, would have ended the litigation then and there with an irreparably adverse result for Andrews. The district court, however, found the neglect excusable and granted the motion for an extension of time to file the notice of appeal.

Pincay appealed to this court, and a majority of the three-judge panel concluded that Andrews's attorney had improperly delegated the function of calendaring to a paralegal, and held that the attorney's reliance on a paralegal was inexcusable as a matter of law. Pincay v. Andrews, 351 F.3d 947, 951-52 (9th Cir.2003). It ordered the appeal dismissed. The dissent would have applied a more flexible and deferential standard and affirmed the district court. Id. at 952-56 (Kleinfeld, J., dissenting).

A majority of the active non-recused judges of the court voted to rehear the case en banc to consider whether the creation of a per se rule against delegation to paralegals, or indeed any per se rule involving missed filing deadlines, is consistent with the United States Supreme Court's leading authority on the modern concept of excusable neglect, Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U.S. 380, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993). We now hold that per se rules are not consistent with Pioneer, and we uphold the exercise of the district court's discretion to permit the filing of the notice of appeal in this case.

The Pioneer decision arose in the bankruptcy context and involved the "bar date" for the filing of claims. The Court in Pioneer established a four-part balancing test for determining whether there had been "excusable neglect" within the meaning of Federal Rule of Bankruptcy Procedure 9006(b)(1). The Court also reviewed various contexts in which the phrase appeared in the federal rules of procedure and made it clear the same test applies in all those contexts. The Pioneer factors include: (1) the danger of prejudice to the non-moving party, (2) the length of delay and its potential impact on judicial proceedings, (3) the reason for the delay, including whether it was within the reasonable control of the movant, and (4) whether the moving party's conduct was in good faith. 507 U.S. at 395, 113 S.Ct. 1489.

In this case, the district court analyzed each of the Pioneer factors and correctly found: (1) there was no prejudice, (2) the length of delay was small, (3) the reason for the delay was carelessness, and (4) there was no evidence of bad faith. It then concluded that even though the reason for the delay was the carelessness of Andrews's counsel, that fact did not render the neglect inexcusable. The district court relied on this court's decision in Marx v. Loral Corp., 87 F.3d 1049 (9th Cir.1996), in which we affirmed an order granting an extension of time in a case that involved an attorney's calendaring error.

Because the panel majority decided the case in part on the issue of delegation of calendaring to a paralegal, we consider that issue first. This issue was not presented to the district court, and it was raised sua sponte by the three-judge panel.

In the modern world of legal practice, the delegation of repetitive legal tasks to paralegals has become a necessary fixture. Such delegation has become an integral part of the struggle to keep down the costs of legal representation. Moreover, the delegation of such tasks to specialized, well-educated non-lawyers may well ensure greater accuracy in meeting deadlines than a practice of having each lawyer in a large firm calculate each filing deadline anew. The task of keeping track of necessary deadlines will involve some delegation. The responsibility for the error falls on the attorney regardless of whether the error was made by an attorney or a paralegal. See Model Rules of Prof'l Conduct R. 5.5 cmt. 2 (2002) ("This Rule does not prohibit a lawyer from employing the services of paraprofessionals and delegating functions to them, so long as the lawyer supervises the delegated work and retains responsibility for their work."). We hold that delegation of the task of ascertaining the deadline was not per se inexcusable neglect.

The larger question in this case is whether the misreading of the clear rule could appropriately have been considered excusable. Resolution of that question requires some effort to try to distill any principles that have evolved in the 10 years since Pioneer. In Pioneer itself, the Court adopted a broader and more flexible test for excusable neglect. A narrower test existed in many circuits before Pioneer that limited excusable neglect to situations that were beyond the control of the movant for an extension as, for example, the messenger being hit by a truck on the way to the court clerk's filing desk. See Pioneer, 507 U.S. at 387-88 & n. 3, 113 S.Ct. 1489.

The district court followed our decision in Marx, where we acknowledged that Pioneer had worked a change in our circuit's law as to what constitutes excusable neglect. 87 F.3d at 1053-54. As we explained in Marx, our "strict standard," which required both a showing of extraordinary circumstances that prevented timely filing and injustice resulting from denying an extension, id. at 1053 (citing Pratt v. McCarthy, 850 F.2d 590, 593 (9th Cir.1988)), gave way to an equitable determination that involves consideration of the four Pioneer factors. Id. at 1054. We therefore affirmed the district court's grant of an extension of time to file a notice of appeal in Marx because the district court correctly considered the Pioneer factors. We found that the district court did not abuse its discretion, and we said: "The district court's analysis of the Pioneer Inv. factors in this case, although considerably lenient to the plaintiffs, was not a clear error of judgment." Id.

Our court, in other cases, has also described Pioneer's flexible approach, saying, for example, "we will ordinarily examine all of the circumstances involved rather than holding that any single circumstance in isolation compels a particular result regardless of the other factors." Briones v Riviera Hotel & Casino, 116 F.3d 379, 382 n. 2 (9th Cir.1997); see also Bateman v. United States Postal Serv., 231 F.3d 1220, 1224 (9th Cir.2000).

We seemed to take a more narrow approach in Kyle v. Campbell Soup Co., 28 F.3d 928 (9th Cir.1994). In that case our court reversed the district court's finding of excusable neglect. We emphasized the fact that the attorney had made a mistake in interpreting rules that were not ambiguous and we focused on the particular facts of Pioneer, including a "dramatic ambiguity" in the notice of the filing deadline at issue. Id. at 931.

Our circuit's confusion is not isolated. The authorities interpreting Pioneer in a...