NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

No. 19-3532

In Re: HERTZ GLOBAL HOLDINGS, INC. SECURITIES LITIGATION

SHEET METAL WORKERS’ LOCAL 80 PENSION TRUST FUND; WESTCHESTER TEAMSTERS PENSION FUND, Appellants

On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 2-13-cv-07050) District Judge: Hon. Madeline C. Arleo

On Appeal from the United States District Court for the District of New Jersey (D.C. Civil No. 2-14-cv-00285) District Judge: Hon. Stanley R. Chesler

Submitted under Third Circuit L.A.R. 34.1(a) October 8, 2020

Before: AMBRO, JORDAN, and MATEY, Circuit Judges.

(Opinion filed: October 13, 2020)

OPINION

 This disposition is not an opinion of the full Court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. MATEY, Circuit Judge.

Hertz Global Holdings, Inc. (“Hertz”), its former executives, and its shareholders

return to this Court for a second look at allegations of fraud leading to overstated revenue

and, ultimately, a sagging share price. This time around, Plaintiffs challenge the District

Court’s refusal to reopen the case and permit an amended complaint. But Plaintiffs’ request

was untimely, and we will thus affirm, although, because of Hertz’s bankruptcy, only as to

Plaintiffs’ claims against the individual defendants.

I. BACKGROUND

In 2015, Hertz announced that “inappropriate accounting decisions” led to

overstated revenue in prior fiscal years. (App. at 80.) Plaintiffs, a group of Hertz

shareholders, then sued the company and three of its former executives, alleging that

numerous statements made or approved by the defendants about the company’s finances

during the relevant period were fraudulent.1 The District Court held that Plaintiffs’

complaint failed to “state with particularity facts giving rise to a strong inference that the

defendant[s] acted with” an “intent to deceive, manipulate, or defraud investors,” and

dismissed the claims. (App. at 42.) We then affirmed. In re Hertz Global Holdings Inc.,

(3d Cir. 2018).

But while the case was over, the story was not. After our decision, the Securities

and Exchange Commission announced an agreement with Hertz to settle a regulatory

investigation into the overstatements. That caught Plaintiffs’ attention, so they moved the

1 The putative class action included the Sheet Metal Workers Local No. 80 Pension Trust Fund and the Westchester Teamsters Pension Fund. 2 District Court to set aside the dismissal, reasoning that the SEC’s order contained findings

that, if incorporated into an amended complaint, would satisfy the scienter requirement

found lacking. While that motion was pending, Hertz sued two of the former executives,

alleging that their conduct caused the overstatements and that Hertz was therefore entitled

to claw back some of their incentive compensation (“Clawback Action”). Sensing a bit of

bait and switch, Plaintiffs argued that Hertz was now accusing the executives of the very

misconduct the company had denied. The District Court listened, but ultimately concluded

that Plaintiffs’ motion was untimely and, in any event, without merit. That led to this

appeal.2

Finally, three last chapters in the story. To start, after this appeal was noticed, the

SEC settled with two of the former executives. Next, Hertz amended its complaint in the

Clawback Action. Plaintiffs ask us to judicially notice these two developments. And last,

Hertz filed for bankruptcy. The parties agree the bankruptcy stays the case as to Hertz, but

Hertz asks the case be stayed as to the individual defendants as well. Mindful of the

Bankruptcy Court’s authority under Section 105(a) of the Bankruptcy Code to extend the

stay to non-debtor third parties, we asked Hertz about its former executives. In response,

Hertz represented that the bankruptcy court has not extended the stay to the individual

defendants. We proceed accordingly and our decision addresses only Plaintiffs’ claims

against Hertz’s former executives.

2 The District Court had jurisdiction under

and 15 U.S.C. § 78aa. We have jurisdiction under

. We review the District Court’s decision for abuse of discretion. Budget Blinds, Inc. v. White,

(3d Cir. 2008). 3 II. DISCUSSION

This matter turns on Rule 60(b) of the Federal Rules of Civil Procedure, which

allows district courts to “relieve a party . . . from a final judgment.” The grounds for relief

are limited, and include “newly discovered evidence,” Rule 60(b)(2); “fraud . . . ,

misrepresentation, or misconduct by an opposing party,” Rule 60(b)(3); or, a bit more

broadly, “any other reason that justifies relief,” Rule 60(b)(6). Rules 60(b)(2) and 60(b)(3)

require motions within “a year after the entry of the judgment,” but motions under Rule

60(b)(6) need only “be made within a reasonable time.” Rule 60(c)(1). To prevent the

general from defeating the specific, a party may not use the exception in Rule 60(b)(6) for

motions properly brought under Rules 60(b)(2) or 60(b)(3) to “circumvent[]” the one-year

time limitation. Stradley v. Cortez,

(3d Cir. 1975).

Here, the District Court held that Plaintiffs’ motion raised “newly discovered

evidence” under Rule 60(b)(2), making it untimely.3 We agree. “[T]he term ‘newly

discovered evidence’ refers to ‘evidence of facts in existence at the time of trial of which

the aggrieved party was excusably ignorant.’” Bohus v. Beloff,

(3d Cir.

1991). True, the SEC orders and the Clawback Action arose after the District Court

dismissed Plaintiffs’ complaint. But Plaintiffs rely not on the creation of those documents

but on their contents, which purport to show what the executives knew when making the

allegedly fraudulent statements. And that state of mind was a “fact[] in existence” long

before the District Court dismissed this lawsuit. See Chilson v. Metro. Transit Auth., 796

3 The District Court’s dismissal order was entered on April 28, 2017. Plaintiffs filed their Rule 60(b) motion on February 5, 2019—more than one year later.

(5th Cir. 1986) (facts in an audit were “in existence at the time of the trial,”

even though audit itself was not); Rosebud Sioux Tribe v. A & P Steel,

, 515–

16 (8th Cir. 1984) (post-trial admission of perjury was “newly discovered evidence” since

the perjury existed at the time of trial); cf. Betterbox Commc’ns Ltd. v. BB Techs., Inc.,

, 331–32 (3d Cir. 2002) (rejecting Rule 60(b)(2) motion based on trademark-

cancellation notice issued after trial, since the notice “d[id] not reveal that a decision to

cancel had been made at the time of trial”).

Hoping to avoid that conclusion and benefit from the open-ended, “reasonable” time

limit of Rule 60(b)(6), Plaintiffs note that Hertz settled with the SEC and filed the

Clawback Action after we affirmed the District Court’s dismissal order. No accident, they

argue, seeing the timing as motivated by a desire to deprive them of facts helpful to their

complaint. And that, they conclude, must be an “extraordinary circumstance.” See Budget

Blinds, Inc. v. White,

(3d Cir. 2008) (noting that a party seeking to use

Rule 60(b)(6) must show the existence of “extraordinary circumstances”). But even

accepting this theory, their argument is naturally one of “fraud, misrepresentation, or

misconduct” governed by Rule 60(b)(3) and the same one-year time limit. See Stridiron v.

Stridiron,

(3d Cir. 1983). Either way, therefore, the motion to reopen is

too late.

III. CONCLUSION

As Plaintiffs’ motion was untimely, the District Court properly denied it. For that

reason, we will affirm as to the claims against the former executives. Because of its

ongoing bankruptcy proceedings, the appeal remains stayed as to Hertz.

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