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NOTICE: This opinion is subject to formal revision before publication in
the preliminary print of the United States Reports. Readers are
requested to notify the Reporter of Decisions, Supreme Court of the
United States, Washington, D.C. 20543, of any typographical or other
formal errors, in order that corrections may be made before the
preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
--------
No. 91-1695
--------
PIONEER INVESTMENT SERVICES COMPANY, PE-
TITIONER v. BRUNSWICK ASSOCIATES LIMITED ____
PARTNERSHIP ET AL.
ON WRIT OF CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE SIXTH
CIRCUIT
[March 24, 1993]
JUSTICE WHITE delivered the opinion of the Court.
Rule 3003(c) of the Federal Rules of Bankruptcy Procedure sets out the
requirements for filing proofs of claim in Chapter 9 Municipality and Chapter 11
Reorganization cases. (Ftnote. 1) Rule 3003(c)(3) provides that the (Ftnote. 1)
"court shall fix and for cause shown may extend the time within which proofs of
claim or interest may be filed." Rule 9006 is a general rule governing the
computation, enlargement, and reduction of periods of time prescribed in other
____________________
1) Bankruptcy Rule 3003(c), in relevant part, provides: 1)
"(c) Filing Proof of Claim.
``(1) Who May File. Any creditor or indenture trustee may file a proof of _____________
claim within the time prescribed by subdivision (c)(3) of this rule.
``(2) Who Must File. Any creditor or equity security holder whose claim or ______________
interest is not scheduled or scheduled as disputed, contingent, or unliquidated
shall file a proof of claim or interest within the time prescribed by
subdivision (c)(3) of this rule; any creditor who fails to do so shall not be
treated as a creditor with respect to such claim for the purposes of voting and
distribution.
``(3) Time for Filing. The court shall fix and for cause shown may extend ________________
the time within which proofs of claim or interest may be filed. Notwithstanding
the expiration of such time, a proof of claim may be filed to the extent and
under the conditions stated in Rule 3002(c)(2), (c)(3), and (c)(4)." 91-1695 - OPINION
2 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
bankruptcy rules. Rule 9006(b)(1) empowers a bankruptcy court to permit a late
filing if the movant's failure to comply with an earlier deadline "was the
result of excusable neglect." (Ftnote. 2) In this case, we are called upon to (Ftnote. 2)
decide whether an attorney's inadvertent failure to file a proof of claim within
the deadline set by the court can constitute "excusable neglect" within the
meaning of the rule. Finding that it can, we affirm.
I
On April 12, 1989, petitioner filed a voluntary petition for bankruptcy in the
United States Bankruptcy Court for the Eastern District of Tennessee. The
petition sought relief under Chapter 11 of the Bankruptcy Code. Petitioner also
filed a list of its 20 largest unsecured creditors, including all but one of
respondents here. The following month, after obtaining extensions of time from
the Bankruptcy Court, petitioner filed a statement of financial affairs and
schedules of its assets and liabilities. The schedules, as amended, listed all
of the respondents except
____________________
2) Bankruptcy Rule 9006(b) provides: 2)
"(b) Enlargement.
``(1) In General. Except as provided in paragraphs (2) and (3) of this ___________
subdivision, when an act is required or allowed to be done at or within a
specified period by these rules or by a notice given thereunder or by order of
court, the court for cause shown may at any time in its discretion (1) with or
without motion or notice order the period enlarged if the request therefor is
made before the expiration of the period originally prescribed or as extended by
a previous order or (2) on 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.
``(2) Enlargement Not Permitted. The court may not enlarge the time for ___________________________
taking action under Rules 1007(d), 1017(b)(3), 2003(a) and (d), 7052, 9023, and
9024.
``(3) Enlargment Limited. The court may enlarge the time for taking action ___________________
under Rules 1006(b)(2), 1017(e), 3002(c), 4003(b), 4004(a), 4007(c), 8002, and
9033, only to the extent and under the conditions stated in those rules." 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 3 ____
Ft. Oglethorpe Associates Limited Partnership as creditors holding contingent,
unliquidated, or disputed claims; the Ft. Oglethorpe partnership was not listed
at all. Under S1111 of the Bankruptcy Code, 11 U. S. C. S1111(a), and
Bankruptcy Rule 3003(c)(2), all such creditors are required to file a proof of
claim with the bankruptcy court before the deadline, or "bar date," established
by the court.
On April 13, 1989, the day after petitioner filed its Chapter 11 petition, the
Bankruptcy Court mailed a "Notice for Meeting of Creditors" to petitioner's
creditors. Along with the announcement of a May 5 meeting was the following
passage:
"You must file a proof of claim if your claim is scheduled as disputed,
contingent or unliquidated, is unlisted or you do not agree with the amount.
See 11 U. S. C. Sec. 1111 & Bankruptcy rule 3003. Bar date is August 3,
1989." App. 29a.
The notice was received and read by Mark A. Berlin, president of the corporate
general partners of each of the respondents. Berlin duly attended the
creditors' meeting on May 5. The following month, respondents retained an
experienced bankruptcy attorney, Marc Richards, to represent them in the
proceedings. Berlin stated in an affidavit that he provided Richards with a
complete copy of the case file, including a copy of the court's April 13, 1989,
notice to creditors. Berlin also asserted that he inquired of Richards whether
there was a deadline for filing claims and that Richards assured him that no bar
date had been set and that there was no urgency in filing proofs of claim. Id., ____
at 121a. Richards and Berlin both attended a subsequent meeting of creditors on
June 16, 1989.
Respondents failed to file any proofs of claim by the August 3, 1989, bar
date. On August 23, 1989, respondents filed their proofs, along with a motion
that the court permit the late filing under Rule 9006(b)(1). In particular, 91-1695 - OPINION
4 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
respondents' counsel explained that the bar date, of which he was unaware, came
at a time when he was experiencing "a major and significant disruption" in his
professional life caused by his withdrawal from his former law firm on July 31,
1989. Id., at 56a. Because of this dispruption, counsel did not have access to ____
his copy of the case file in this matter until mid-August. Ibid. _____
The Bankruptcy Court refused the late filing. Following precedent from the
Court of Appeals for the Eleventh Circuit, the court held that a party may claim
"excusable neglect" only if its " `failure to timely perform a duty was due to
circumstances which were beyond [its] reasonable control.'" Id., at 124a ____
(quoting In re South Atlantic Financial Corp., 767 F. 2d 814, 817 (CA11 1985), ____________________________________
cert. denied sub nom. Biscayne 21 Condominium Associates, Inc. v. South Atlantic ________ ________________________________________ ______________
Financial Corp., 475 U. S. 1015 (1986)). Finding that respondents had received_______________
notice of the bar date and could have complied, the court ruled that they could
not claim "excusable neglect."
On appeal, the District Court affirmed in part and reversed in part. The
court found "respectable authority for the narrow reading of `excusable
neglect'" adopted by the Bankruptcy Court, but concluded that the Court of
Appeals for the Sixth Circuit would follow "a more liberal approach." App.
157a. Embracing a test announced by the Court of Appeals for the Ninth Circuit,
the District Court remanded with instructions that the Bankruptcy Court evaluate
respondents' conduct against several factors, including: " ` ``(1) whether
granting the delay will prejudice the debtor; (2) the length of the delay and
its impact on efficient court administration; (3) whether the delay was beyond
the reasonable control of the person whose duty it was to perform; (4) whether
the creditor acted in good faith; and (5) whether clients should be penalized
for their counsel's mistake or neglect.'' ' " Id., at 158a-159a (quoting In re ____ _____
Dix, 95 B. R. 134, 138 (CA9 Bkrptcy. Appellate Panel 1988) (in turn quoting In___ __
re__ 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 5 ____
Magouirk, 693 F. 2d 948, 951 (CA9 1982))). The District Court also suggested________
that the Bankruptcy Court consider whether the failure to comply with the bar
date "resulted from negligence, indifference or culpable conduct on the part of
a moving creditor or its counsel." App. 159a.
On remand, the Bankruptcy Court applied the so-called Dix factors and again ___
denied respondents' motion. Specifically, the Bankruptcy Court found (1) that
petitioner would not be prejudiced by the late filings; (2) that the 20-day
delay in filing the proofs of claim would have no adverse impact on efficient
court administration; (3) that the reason for the delay was not outside
respondents' control; (4) that respondents and their counsel acted in good
faith; and (5) that, in light of Berlin's business sophistication and his actual
knowledge of the bar date, it would not be improper to penalize respondents for
the neglect of their counsel. Id., at 168a-172a. The court also found that ____
respondents' counsel was negligent in missing the bar date and, "[t]o a degree,"
indifferent to it. Id., at 172a. In weighing these considerations, the Bank- ____
ruptcy Court "attache[d] considerable importance to Dix factors 3 and 5," and ___
concluded that a ruling in respondents' favor, notwithstanding their actual
notice of the bar date, "would render nugatory the fixing of the claims' bar
date in this case." Id., at 173a. The District Court affirmed the ruling. ____
The Court of Appeals for the Sixth Circuit reversed. The Court of Appeals
agreed with the District Court that "excusable neglect" was not limited to cases
where the failure to act was due to circumstances beyond the movant's control.
The Court of Appeals also agreed with the District Court that the five "Dix ___
factors" were helpful, although not necessarily exhaustive, guides. In re _____
Pioneer Investment Services Co., 943 F. 2d 673, 677 (1991). The court found,________________________________
however, that the Bankruptcy Court had misapplied the fifth Dix factor to this ___
case. Because Berlin had inquired of counsel whether there were any 91-1695 - OPINION
6 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
impending filing deadlines and been told that none existed, the Court of Appeals
ruled that the Bankruptcy Court had "inappropriately penalized the [respondents]
for the errors of their counsel." Ibid. _____
The Court of Appeals also found "it significant that the notice containing the
bar date was incorporated in a document entitled `Notice for Meeting of
Creditors.'" Id., at 678. "Such a designation," the court explained, "would ___
not have put those without extensive experience in bankruptcy on notice that the
date appended to the end of this notice was intended to be the final date for
filing proof of claims." Ibid. Indeed, based on a comparison between the _____
notice in this case and the model notice set out in Official Bankruptcy Form 16,
the court concluded that the notice given respondents contained a "dramatic
ambiguity," which could well have confused "[e]ven persons experienced in
bankruptcy." Ibid. Having determined that the fifth Dix factor favored _______ ___
respondents rather than petitioner, the Court of Appeals found that the record
demonstrated "excusable neglect."
Because of the conflict in the courts of appeals over the meaning of
"excusable neglect," (Ftnote. 3) we granted certiorari, (Ftnote. 3)
____________________
3) The Courts of Appeals for the Fourth, Seventh, Eighth, and Eleventh 3)
Circuits have taken a narrow view of "excusable neglect" under Rule 9006(b)(1),
requiring a showing that the delay was caused by circumstances beyond the
movant's control. See In re Davis, 936 F. 2d 771, 774 (CA4 1991); In re ___________ _____
Danielson, 981 F. 2d 296, 298 (CA7 1992); Hanson v. First Bank of South Dakota,_________ ______ ___________________________
N. A., 828 F. 2d 1310, 1314-1315 (CA8 1987); In re Analytical Systems, Inc., 933_____ ______________________________
F. 2d 939, 942 (CA11 1991). The Court of Appeals for the Tenth Circuit, by
contrast, has applied a more flexible analysis similar to that employed by the
Court of Appeals in the present case. In re Centric Corp., 901 F. 2d 1514, ___________________
1517-1518, cert. denied sub nom. Trustees of Centennial State Carpenters Pension ________________________________________________________
Trust Fund v. Centric Corp., 498 U. S. 852 (1990). The Courts of Appeals__________ _______________
similarly have divided in their interpretations of "excusable neglect" as found
in Rule 4(a)(5) of the Federal Rules of Appellate Procedure. Some courts have
required a showing that the movant's failure to meet the deadline was beyond its
control, see, e.g., 650 Park Ave. Corp. v. McRae, 836 F. 2d 764, 767 (CA2 ____ _ ___________________ _____
1988); Pratt v. McCarthy, 850 F. 2d 590, 592 (CA9 1988), while others have _____ ________
adopted a more flexible approach similar to that employed by the Court of
Appeals in this case, see, e.g., Consolidated Freightways Corp. of Delaware v. ____ _ __________________________________________
Larson, 827 F. 2d 916 (CA3 1987), cert. denied sub nom. Consolidated Freightways______ ________ ________________________
Corp. v. Secretary of Transp. of Pennsylvania, 484 U. S. 1032 (1988); Lorenzen_____ ____________________________________ ________
v. Employees Retirement Plan of Sperry-Hutchinson Co., 896 F. 2d 228, 232-233 __________________________________________________
(CA7 1990). 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 7 ____
504 U. S. ___ (1992), and now affirm.
II
A
There is, of course, a range of possible explanations for a party's failure to
comply with a court-ordered filing deadline. At one end of the spectrum, a
party may be prevented from complying by forces beyond its control, such as by
an act of God or unforeseeable human intervention. At the other, a party simply
may choose to flout a deadline. In between lie cases where a party may choose ______
to miss a deadline although for a very good reason, such as to render first aid
to an accident victim discovered on the way to the courthouse, as well as cases
where a party misses a deadline through inadvertence, miscalculation, or
negligence. Petitioner contends that the Bankruptcy Court was correct when it
first interpreted Rule 9006(b)(1) to require a showing that the movant's failure
to comply with the court's deadline was caused by circumstances beyond its
reasonable control. Petitioner suggests that exacting enforcement of filing
deadlines is essential to the Bankruptcy Code's goals of certainty and finality
in resolving disputed claims. Under petitioner's view, any showing of fault on
the part of the late filer would defeat a claim of "excusable neglect."
We think that petitioner's interpretation is not consonant with either the
language of the rule or the evident purposes underlying it. First, the rule
grants a reprieve to out-of-time filings that were delayed by "neglect." The 91-1695 - OPINION
8 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
ordinary meaning of "neglect" is "to give little attention or respect" to a
matter, or, closer to the point for our purposes, "to leave undone or unattended
to esp[ecially] through carelessness." Webster's Ninth New Collegiate _________________________________
Dictionary 791 (1983) (emphasis added). The word therefore encompasses both
simple, faultless omissions to act and, more commonly, omissions caused by
carelessness. Courts properly assume, absent sufficient indication to the _
contrary, that Congress intends the words in its enactments to carry "their
ordinary, contemporary, common meaning." Perrin v. United States, 444 U. S. 37, ______ _____________
42 (1979). Hence, by empowering the courts to accept late filings "where the
failure to act was the result of excusable neglect," Rule 9006(b)(1), Congress
plainly contemplated that the courts would be permitted, where appropriate, to
accept late filings caused by inadvertence, mistake, or carelessness, as well as
by intervening circumstances beyond the party's control.
Contrary to petitioner's suggestion, this flexible understanding of "excusable
neglect" accords with the policies underlying Chapter 11 and the bankruptcy
rules. The "excusable neglect" standard of Rule 9006(b)(1) governs late filings
of proofs of claim in Chapter 11 cases but not in Chapter 7
cases. (Ftnote. 4) The rules' differentiation between (Ftnote. 4)
____________________
4) The time-computation and -extension provisions of Rule 9006, like those 4)
of Federal Rule of Civil Procedure 6, are generally applicable to any time
requirement found elsewhere in the rules unless expressly excepted. Subsections
(b)(2) and (b)(3) of Rule 9006 enumerate those time requirements excluded from
the operation of the "excusable neglect" standard. One of the time requirements
listed as excepted in Rule 9006(b)(3) is that governing the filing of proofs of
claim in Chapter 7 cases. Such filings are governed exclusively by Rule
3002(c). See Rule 9006(b)(3); In re Coastal Alaska Lines, Inc., 920 F. 2d 1428, ________________________________
1432 (CA9 1990). By contrast, Rule 9006(b) does not make a similar exception
for Rule 3003(c), which, as noted earlier, establishes the time requirements for
proofs of claim in Chapter 11 cases. Consequently, Rule 9006(b)(1) must be
construed to govern the permissibility of late filings in Chapter 11
bankruptcies. See Advisory Committee Note accompanying Rule 9006(b)(1). 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 9 ____
Chapter 7 and Chapter 11 filings corresponds with the differing policies of the
two chapters. Whereas the aim of a Chapter 7 liquidation is the prompt closure
and distribution of the debtor's estate, Chapter 11 provides for reorganization
with the aim of rehabilitating the debtor and avoiding forfeitures by creditors.
See United States v. Whiting Pools, Inc., 462 U. S. 198, 203 (1983). In _____________ ___________________
overseeing this latter process, the bankruptcy courts are necessarily entrusted
with broad equitable powers to balance the interests of the affected parties,
guided by the overriding goal of ensuring the success of the reorganization.
See NLRB v. Bildisco & Bildisco, 465 U. S. 513, 527-528 (1984). This context ____ ___________________
suggests that Rule 9006's allowance for late filings due to "excusable neglect"
entails a correspondingly equitable inquiry.
The history of the present bankruptcy rules confirms this view. Rule 9006(b)
is derived from Rule 906(b) of the former bankruptcy rules, which governed
bankruptcy proceedings under the former Bankruptcy Act. Like Rule 9006(b)(1),
former Rule 906(b) permitted courts to accept late filings "where the failure to
act was the result of excusable neglect." The forerunner of Rule 3003(c), which
now establishes the requirements for filing claims in Chapter 11 cases, was
former Rule 10-401(b), which established the filing requirements for proofs of
claim in reorganization cases under Chapter X of the former Act, Chapter 11's
predecessor. The Advisory Committee Notes accompanying that former rule make
clear that courts were entrusted with the authority under Rules 10-401(b) and
906(b) to accept tardy filings "in accordance with the equities of the
situation":
"If the court has fixed a bar date for the filing of proofs of claim, it
may still enlarge that time within the provisions of Bankruptcy Rule 906(b)
which is 91-1695 - OPINION
10 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
made applicable in this subdivision. This policy is in accord with Chapter X
generally which is to preserve rather than to forfeit rights. In S102 it
rejects the notion expressed in S57n of the Act that claims must be filed
within a six-month period to participate in any distribution. Section 224(4)
of Chapter X of the Act permits distribution to certain creditors even if
they fail to file claims and S204 fixes a minimum period of 5 years before
distribution rights under a plan may be forfeited. This approach was
intentional as expressed in Senate Report 1916 (75th Cong., 3d Sess., April
20, 1938):
`` `Sections 204 and 205 insure participation in the benefits of the
reorganization to those who, through inadvertence or otherwise, have failed
to file their claims or otherwise evidence their interests during the
pendency of the proceedings.'
``This attitude is carried forward in the rules, first by dispensing with
the need to file proofs of claims and stock interests in most instances
and, secondly, by permitting enlargement of the fixed bar date in a
particular case with leave of court and for cause shown in accordance with
the equities of the situation." Advisory Committee Note accompanying Rule
10-401(b), reprinted in 13A J. Moore & L. King, Collier on Bankruptcy,
(para.)10-401.01, p. 10-401-4 (14th ed. 1977).
This history supports our conclusion that the enlargement of prescribed time
periods under the "excusable neglect" standard of Rule 9006(b)(1) is not limited
to situations where the failure to timely file is due to circumstances beyond
the control of the filer.
Our view that the phrase "excusable neglect" found in Bankruptcy Rule
9006(b)(1) is not limited as petitioner would have it is also strongly supported
by the Federal Rules of Civil Procedure, which use that phrase in several 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 11 ____
places. Indeed, Rule 9006(b)(1) was patterned after Rule 6(b) of those
rules. (Ftnote. 5) Under Rule 6(b), where the specified period for the (Ftnote. 5)
performance of an act has elapsed, a District Court may enlarge the period and
permit the tardy act where the omission is the "result of excusable
neglect." (Ftnote. 6) As with Rule 9006(b)(1), there is no indication that (Ftnote. 6)
anything other than the commonly accepted meaning of the phrase was intended by
its drafters. It is not surprising, then, that in applying Rule 6(b), the
courts of appeals have generally recognized that "excusable neglect" may extend
to inadvertent delays. (Ftnote. 7) Although inadvertence, ignorance of the (Ftnote. 7)
rules, or mistakes construing the rules do not usually constitute "excusable"
neglect, it is clear that "excusable neglect" under Rule 6(b) is a somewhat
"elastic concept" (Ftnote. 8) and is not limited strictly to (Ftnote. 8)
____________________
5) See Advisory Committee Note accompanying Rule 9006(b). 5)
6) Federal Rule of Civil Procedure 6(b) provides: 6)
"(b) Enlargement. When by these rules or by a notice given thereunder or by
order of court an act is required or allowed to be done at or within a specified
time, the court for cause shown may at any time in its discretion (1) with or
without motion or notice order the period enlarged if request therefor is made
before the expiration of the period originally prescribed or as extended by a
previous order, or (2) 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; but it may not extend the time for taking any action under
Rules 50(b) and (c)(2), 52(b), 59(b), (d) and (e), 60(b), and 74(a), except to
the extent and under the conditions stated in them."
7) See, e.g., United States v. Borromeo, 945 F. 2d 750, 753-754 (CA4 1991); 7) ____ _ _____________ ________
Hill v. Marshall, No. 86-3987, 1988 U. S. App. LEXIS 14742, *4 (CA6, Nov. 4,____ ________
1988); Dominic v. Hess Oil V. I. Corp., 841 F. 2d 513, 517 (CA3 1988); Sony _______ ____________________ ____
Corp. v. Elm State Electronics, Inc., 800 F. 2d 317, 319 (CA2 1986); United_____ ___________________________ ______
States ex rel. Robinson v. Bar Assn. of District of Columbia, 89 U. S. App._______________________ __________________________________
D. C. 185, 186, 190 F. 2d 664, 665 (1951). But see Hewlett-Packard Co. v. ___________________
Olympus Corp., 931 F. 2d 1551, 1552-1553 (CA Fed. 1991)._____________
8) 4A C. Wright & A. Miller, Federal Practice and Procedure S1165, p. 479 8)
(2d ed. 1987). 91-1695 - OPINION
12 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
omissions caused by circumstances beyond the control of the movant. (Ftnote. 9) (Ftnote. 9)
The "excusable neglect" standard for allowing late filings is also used
elsewhere in the Federal Rules of Civil Procedure. When a party should have
asserted a counterclaim but did not, Rule 13(f) permits the counterclaim to be
set up by amendment where the omission is due to "oversight, inadvertence, or
excusable neglect, or when justice requires." In the context of such a
provision, it is difficult indeed to imagine that "excusable neglect" was
intended to be limited as petitioner insists it should
be. (Ftnote. 10) (Ftnote. 10)
The same is true of Rule 60(b)(1), which permits courts to reopen judgments
for reasons of "mistake, inadvertence, surprise, or excusable neglect," but only
on motion made within one year of the judgment. Rule 60(b)(6) goes further,
however, and empowers the court to reopen a judgment even after one year has
passed for "any other reason justifying relief from the operation of the judg-
ment." These provisions are mutually exclusive, and thus a party who failed to
take timely action due to "excusable neglect" may not seek relief more than a
year after the
____________________
9) The Courts of Appeals generally have given a similar interpretation to 9)
"excusable neglect" in the context of Rule 45(b) of the Rules of Criminal
Procedure, which, like Rule 9006(b), was modeled after Rule 6(b). See, e.g., ____ _
United States v. Roberts, 978 F. 2d 17, 21-24 (CA1 1992); Warren v. United_____________ _______ ______ ______
States, 123 U. S. App. D. C. 160, 163, 358 F. 2d 527, 530 (1965); Calland v.______ _______
United States, 323 F. 2d 405, 407-408 (CA7 1963)._____________
10) In assessing what constitutes "excusable neglect" under Rule 13(f), the 10)
lower courts have looked, inter alia, to the good faith of the claimant, the __________
extent of the delay, and the danger of prejudice to the opposing party. See,
e.g., New York Petroleum Corp. v. Ashland Oil, Inc., 757 F. 2d 288, 291 (Temp.____ _ ________________________ _________________
Ct. Emergency App. 1985); Gaines v. Farese, No. 87-5567, 1990 U. S. App. LEXIS ______ ______
18086, *9 (CA6, Oct. 11, 1990); Barrett v. United States Banknote Corp., 1992-2 _______ ____________________________
Trade Cases (para.)69,956, p. ___ (SDNY 1992); Technographics, Inc. v. Mercer ____________________ ______
Corp., 142 F. R. D. 429, 430 (MD Pa. 1992). Federal Rule of Bankruptcy_____
Procedure 7013 contains a similar allowance for late counterclaims brought by a
trustee or debtor in possession. 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 13 ____
judgment by resorting to subsection (6). Liljeberg v. Health Services _________ _______________
Acquisition Corp., 486 U. S. 847, 863, and n. 11 (1988). To justify relief_________________
under subsection (6), a party must show "extraordinary circumstances" suggesting
that the party is faultless in the delay. See ibid.; Ackermann v. United _____ _________ ______
States, 340 U. S. 193, 197-200 (1950); Klapprott v. United States, 335 U. S.______ _________ _____________
601, 613-614 (1949). If a party is partly to blame for the delay, relief must
be sought within one year under subsection (1) and the party's neglect must be
excusable. In Klapprott, for example, the petitioner had been effectively _________
prevented from taking a timely appeal of a judgment by incarceration, ill
health, and other factors beyond his reasonable control. Four years after a
default judgment had been entered against him, he sought to reopen the matter
under Rule 60(b) and was permitted to do so. As explained by Justice Black:
"It is contended that the one-year limitation [of subsection (1)] bars
petitioner on the premise that the petition to set aside the judgment showed,
at most, nothing but `excusable neglect.' And of course, the one-year
limitation would control if no more than `neglect' was disclosed by the
petition. In that event the petitioner could not avail himself of the broad
`any other reason' clause of 60(b). But petitioner's allegations set up an
extraordinary situation which cannot fairly or logically be classified as
mere `neglect' on his part. The undenied facts set out in the petition
reveal far more than a failure to defend . . . due to inadvertence,
indifference, or careless disregard of consequences." 335 U. S., at 613.
Justice Frankfurter, although dissenting on other grounds, agreed that
Klapprott's allegations of inability to comply with earlier deadlines took his _________
case outside the scope of "excusable neglect" "because `neglect' in the context
of its subject matter carries the idea of negligence and not 91-1695 - OPINION
14 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
merely of non-action." Id., at 630. ___
Thus, at least for purposes of Rule 60(b), "excusable neglect" is understood
to encompass situations in which the failure to comply with a filing deadline is
attributable to negligence. Because of the language and structure of Rule
60(b), a party's failure to file on time for reasons beyond his or her control
is not considered to constitute "neglect." See Klapprott, _________
supra. (Ftnote. 11) This latter result, however, would not obtain under (Ftnote. 11)_____
Bankruptcy Rule 9006(b)(1). Had respondents here been prevented from complying
with the bar date by an act of God or some other circumstance beyond their
control, the Bankruptcy Court plainly would have been permitted to find "excus-
able neglect." At the same time, reading Rule 9006(b)(1) inflexibly to exclude
every instance of an inadvertent or negligent omission would ignore the most
natural meaning of the word "neglect" and would be at odds with the accepted
meaning of that word in analogous contexts. (Ftnote. 12) (Ftnote. 12)
B
This leaves, of course, the Rule's requirement that the party's neglect of the
bar date be "excusable." It is this requirement that we believe will deter
creditors or other
____________________
11) A similar, but even more explicit, dichotomy can be found in a former 11)
rule of the Circuit Court of Appeals for the Second Circuit governing the late
filing of appeals. That rule permitted late filings "`upon a showing . . . (a)
that the delay has been due to cause beyond the control of the moving party or
(b) that the delay has been due to circumstances which shall be deemed to be
merely excusable neglect . . . .'" Rule 15(2), U. S. C. C. A., Second Circuit,
quoted in Pyramid Motor Corp. v. Ispass, 330 U. S. 695, 703, n. 10 (1947). ___________________ ______
Although the meaning given "excusable neglect" for purposes of this rule
obviously is not controlling for purposes of Rule 9006(b)(1), it does suggest
that the meaning of "excusable neglect" urged by petitioner is far from natural.
12) See also United States v. Boyle, 469 U. S. 241, 245, n. 3 (1985) 12) _____________ _____
("neglect" as used in statute governing late filing of tax returns "impl[ies]
carelessness"). 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 15 ____
parties from freely ignoring court-ordered deadlines in the hopes of winning a
permissive reprieve under Rule 9006(b)(1). With regard to determining whether a
party's neglect of a deadline is excusable, we are in substantial agreement with
the factors identified by the Court of Appeals. Because Congress has provided
no other guideposts for determining what sorts of neglect will be considered
"excusable," we conclude that the determination is at bottom an equitable one,
taking account of all relevant circumstances surrounding the party's
omission. (Ftnote. 13) These include, as the Court of Appeals found, the danger (Ftnote. 13)
of prejudice to the debtor, 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. See 943 F. 2d, at 677. (Ftnote. 14) (Ftnote. 14)
____________________
13) The dissent discerns in Lujan v. National Wildlife Federation, 497 13) _____ ____________________________
U. S. 871 (1990), an indication that the factors relevant to this inquiry extend
no further than the movant's culpability and the reason for the delay, see post, ____
at 3. We cannot agree. Lujan held that a district court did not abuse its _____
discretion in declining to permit a late filing under Rule 6(b) of the Civil
Rules on grounds of excusable neglect. 497 U. S., at 897-898. The Court did
not, however, define ``excusable neglect'' or even decide whether that standard
could have been met on the facts of that case.
14) The dissent would permit judges to take account of the full range of 14)
equitable considerations only if they have first made a threshold determination
that the movant is ``sufficiently blameless'' in the delay, see post, at 2. The ____
dissent believes that this formulation of the Rule's requirements would bring
needed clarity to the Rule's application and save judicial resources. See post, ____
at 10. But narrowing the range of factors to be considered in making the
``excusable neglect'' determination will not eliminate disputes over how the
remaining factors should be applied in any given case. For purposes of the
present case at least, the dissent appears willing to draw a line between
ordinary negligence and partial ``indifference'' to deadlines, see ibid., but _____
parties with valuable interests at stake will no doubt find this distinction
susceptible of litigation. The only reliable means of eliminating the
``indeterminacy'' the dissent finds so troubling would be to adopt a bright-line
rule of the sort embraced by some Courts of Appeals, erecting a rigid barrier
against late filings attributable in any degree to the movant's negligence. As
we have suggested, however, such a construction is irreconcilable with our cases
assigning a more flexible meaning to ``excusable neglect.'' Faced with a choice _______
between our own precedent and Black's Law Dictionary, we adhere to the former. 91-1695 - OPINION
16 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
There is one aspect of the Court of Appeals' analysis, however, with which we
disagree. The Court of Appeals suggested that it would be inappropriate to
penalize respondents for the omissions of their attorney, reasoning that "the
ultimate responsibility of filing the . . . proof[s] of clai[m] rested with
[respondents'] counsel." Ibid. The court also appeared to focus its analysis _____
on whether respondents did all they reasonably could in policing the conduct of
their attorney, rather than on whether their attorney, as respondents' agent,
did all he reasonably could to comply with the court-ordered bar date. In this,
the court erred.
In other contexts, we have held that clients must be held accountable for the
acts and omissions of their attorneys. In Link v. Wabash R. Co., 370 U. S. 626 ____ _____________
(1962), we held that a client may be made to suffer the consequence of dismissal
of its lawsuit because of its attorney's failure to attend a scheduled pretrial
conference. In so concluding, we found "no merit to the contention that
dismissal of petitioner's claim because of his counsel's unexcused conduct
imposes an unjust penalty on the client." Id., at 633. To the contrary, the ___
Court wrote:
"Petitioner voluntarily chose this attorney as his representative in the
action, and he cannot now avoid the consequences of the acts or omissions of
this freely selected agent. Any other notion would be wholly inconsistent
with our system of representative litigation, in which each party is deemed
bound by the acts of his lawyer-agent and is considered to have 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 17 ____
`notice of all facts, notice of which can be charged upon the attorney.'"
Id., at 633-634 (quoting Smith v. Ayer, 101 U. S. 320, 326 (1880)). ___ _____ ____
This principle also underlay our decision in United States v. Boyle, 469 U. S. _____________ _____
241 (1985), that a client could be penalized for counsel's tardy filing of a tax
return. This principle applies with equal force here and requires that
respondents be held accountable for the acts and omissions of their chosen
counsel. Consequently, in determining whether respondents' failure to file
their proofs of claim prior to the bar date was excusable, the proper focus is
upon whether the neglect of respondents and their counsel was excusable. _________________
III
Although the Court of Appeals in this case erred in not attributing to
respondents the fault of their counsel, we conclude that its result was correct
nonetheless. First, petitioner does not challenge the findings made below
concerning the respondents' good faith and the absence of any danger of
prejudice to the debtor or of disruption to efficient judicial administration
posed by the late filings. Nor would we be inclined in any event to unsettle
factual findings entered by a Bankruptcy Court and affirmed by both the District
Court and Court of Appeals. See Goodman v. Lukens Steel Co., 482 U. S. 656, 665 _______ ________________
(1987). Indeed, in this case, the Bankruptcy Court took judicial notice of the
fact that the debtor's second amended plan of reorganization, offered after this
litigation was well underway, takes account of respondents' claims. App.
168a-169a. As the Court of Appeals found, the lack of any prejudice to the
debtor or to the interests of efficient judicial administration, combined with
the good faith of respondents and their counsel, weigh strongly in favor of
permitting the tardy claim.
In assessing the culpability of respondents' counsel, we give little weight to
the fact that counsel was experiencing 91-1695 - OPINION
18 PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. ____
upheaval in his law practice at the time of the bar date. We do, however,
consider significant that the notice of the bar date provided by the Bankruptcy
Court in this case was outside the ordinary course in bankruptcy cases. As the
Court of Appeals noted, ordinarily the bar date in a bankruptcy case should be
prominently announced and accompanied by an explanation of its significance.
See 943 F. 2d, at 678. We agree with the court that the "peculiar and
inconspicuous placement of the bar date in a notice regarding a creditors[']
meeting," without any indication of the significance of the bar date, left a
"dramatic ambiguity" in the notification. Ibid. (Ftnote. 15) This is not to (Ftnote. 15) _____
say, of course, that respondents' counsel was not remiss in failing to apprehend
the notice. To be sure, were there any evidence of prejudice to petitioner or
to judicial administration in this case, or any indication at all of bad faith,
we could not say that the Bankruptcy Court abused its discretion in declining to
find the neglect to be "excusable." In the absence of such a showing, however,
we conclude that the unusual form of notice employed in this case requires a
finding that the neglect of respondents' counsel was, under all the circum-
stances, "excusable."
____________________
15) Indeed, one commentator has warned expressly of the deficiency in the 15)
method of notification employed by the Bankruptcy Court here: "Prior to the
adoption of the present bankruptcy rules some bankruptcy courts placed a time to
close the receipt of claims in chapter 11 in the notice sent to the listed
creditors for the first meeting of creditors. This practice should be strongly
discouraged. It conflicts with some of the factual circumstances giving rise to
a claim in chapter 11 and can ambush unwitting creditors. Since creditors are
notorious for failing to read all of the boilerplate language in the xeroxed
form distributed as the notice of the first meeting of creditors, counsel for
creditors will be wise to double check and ask for a prompt receipt of the
notice from the client or examine the notice on file in the particular
bankruptcy case." R. Aaron, Bankruptcy Law Fundamentals S 8.02[7], p. 8-21
(rev. ed. 1991). 91-1695 - OPINION
PIONEER INV. SERVS. CO. v. BRUNSWICK ASSOC. 19 ____
For these reasons, the judgment of the Court of Appeals is
Affirmed. _________
