United States District Court, S.D. New York
October 11, 2005.
IN RE WORLDCOM, INC. SECURITIES LITIGATION. This Document Relates to: ALL ACTIONS.
The opinion of the court was delivered by: DENISE COTE, District Judge
MEMORANDUM OPINION AND ORDER
On July 21, 2005, class member Richard Ungar ("Ungar") filed a
motion to confirm his status as having excluded himself from the
class action. For the reasons stated below, his motion is denied. Background
Ungar contends that he opted out of the WorldCom class action
in January 2004. He has submitted copies of his exclusion form,
dated January 15, 2004, and a January 20, 2004 letter from Ungar
to The Garden City Group, Inc. ("GCG"), the class action claims
administrator, stating his intention to opt out. He attests that
he mailed these documents via U.S. Mail no later than January 21,
2004, but provides no proof of mailing.
Ungar also represents in his brief that his attorneys sent a
letter reiterating his intent to opt out to GCG on September 1,
2004, the opt-out deadline in the class action (the "September 1
Letter"). No copy of this letter, proof of mailing, or affidavit
from Ungar's counsel attesting to the mailing is included with
Ungar's papers. In his brief, Ungar mentions that "By
conversation, the claims administrator confirmed that that
[September 1 Letter] was received, postmarked September [stet] 2,
2004" the day after the opt-out deadline. No date is given for
this conversation; nor is it mentioned in Ungar's sworn
On April 8, 2005, counsel for Ungar mailed a letter to GCG
disputing GCG's position that Ungar had not timely opted out of
the class action (the "April 8 Letter"). Ungar's counsel enclosed
a proof of claim form with the April 8 Letter "to preserve any
and all rights he may have in the Class Action Lawsuit pending a
final determination of his opt out status." Ungar has provided the Court with a copy of the April 8 Letter,
along with a certified mail receipt. He has not provided a copy
of any letter received by GCG.*fn1 Nothing in the April 8
Letter, or any other submission, supports Ungar's assertion that
his lawyers' attempt to opt out on his behalf was made on either
September 1 or 2, 2004.
The December 11, 2003 Notice of Class Action, which Ungar does
not dispute having received, specified that the exclusion form
"must be mailed by certified or overnight mail" to GCG.*fn2
A recent Opinion in this case addressed a similar contention by a
class member. It stated that, to establish opt-out status, a
class member needed to prove "that notice was effectively and
timely communicated." In re WorldCom, Inc. Sec. Litig., No. 02
Civ. 3288 (DLC), 2005 WL 1048073, at *4 (S.D.N.Y. May 5, 2005)
("May 5 Opinion"). Further,
the testimony of a class member, without some
documentary proof of mailing, will seldom, if ever, be sufficient to meet the burden of showing a timely
request to opt out. This is particularly true when,
as here, the court-approved notice to the class
prescribed methods of mailing that would have
provided compelling proof of mailing.
Id. The May 5 Opinion also expressed the concern that, in a
case in which numerous arbitration claimants against the
Citigroup Defendants have not opted out of the class action, a
failure to require proof of mailing would invite false testimony.
See id. at *5. It noted that "[c]ertified or overnight mail
would have provided a class member with documentation of an
exclusion request with minimal cost and effort." Id.
Although, unlike the class member whose contention was the
subject of the May 5 Opinion, Ungar has provided copies of the
documents that he claims to have mailed in January 2004, there is
no compelling basis in this instance to depart from a rule
requiring proof of mailing to substantiate a class member's claim
to have timely opted out of the class action. The May 5 Opinion
made clear that a photocopy of a completed form would not be
sufficient to establish an attempt to opt out. See id. at *4
n. 6. Unnotarized forms and letters should be given little
evidentiary weight in determinations like this one, because they
are easily falsified. In sum, Ungar has not met his burden to
establish that he timely communicated his desire to opt out of
the class action.
Ungar also argues that a finding of excusable neglect is
warranted. The law of excusable neglect was described in the May 5 Opinion, and that discussion is incorporated by reference
here. See id. at *6. Ungar establishes no basis for a finding
of excusable neglect. He argues that the Court should excuse his
delay in opting out because "[t]he only reason these requests for
exclusion were not received must have been either one of mistake
or clerical error after the letters left Mr. Ungar's control."
Because, as discussed above, no finding that Ungar actually
mailed his exclusion form prior to the opt-out deadline can be
made based on the evidence submitted, Ungar's contention that his
request was lost due to factors outside of his control cannot be
used as a basis for granting him another opportunity to opt out.
Ungar's motion to confirm his status as having excluded himself
from the class action is denied.
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