IN RE: ICONIX BRAND GROUP, INC.

Background

The court had approved a class-action settlement and entered final judgment on January 23, 2020, after a settlement fairness hearing. The settlement was for $6 million. James J. Hayes had filed two objections before the judgment, and the court overruled them. Hayes then appealed, and the Second Circuit granted the appellees’ motion for summary affirmance of the final judgment.

Hayes later filed a motion for reconsideration under Rules 23 and 60 of the Federal Rules of Civil Procedure. Because he did not identify a specific subsection of Rule 60, the court construed the motion as seeking relief under Rule 60(b). Hayes represented himself. The court stated that reconsideration is an extraordinary remedy and that Rule 60(b) relief is disfavored because it disrupts the finality of judgments. The court also noted that the heavy burden applies to self-represented litigants as well as represented parties. For purposes of the order, the court assumed, without deciding, that Hayes’s motion was timely.

Hayes’s Arguments

Hayes argued that the Securities and Exchange Commission’s December 5, 2019 announcement of a $5.5 million civil penalty against Iconix showed that class counsel had disqualifying conflicts because the class included investors from different periods. He also argued that statements concerning alleged fraudulent inflation of Iconix’s revenue and earnings per share, an indictment, and a guilty plea required class counsel to terminate the settlement and notify the court. Hayes further asserted that defense counsel had engaged in bad-faith mediation and that the settlement’s class period was improper.

Hayes also invoked Rule 23(d), which permits court orders to protect class members and manage a class action. He argued that reconsideration was necessary to protect the class.

Court’s Analysis

The court held that a Rule 60 motion cannot substitute for an appeal. Because Hayes had already appealed the final judgment and the Second Circuit had affirmed it, the district court could not use the reconsideration motion to revisit issues covered by that appellate ruling. The court therefore found no basis to reconsider the affirmed final judgment.

The court separately concluded that the information Hayes cited did not qualify as newly discovered evidence. The SEC announcement, the indictment, the guilty plea, and related allegations were known to Hayes, had been presented to the court, or were matters of public record before the final judgment. The court stated that Hayes could not obtain relief under Rule 60(b)(2) based on evidence that was available before he filed his objections and could have been found through reasonable diligence.

The court also rejected Hayes’s arguments about conflicts involving class counsel because he had made a similar conflict objection before the settlement was approved, and the court had already rejected it. Reconsideration was not proper for arguments previously considered and rejected.

Finally, the court declined to issue additional orders under Rule 23(d) to protect class members. It relied on its earlier findings that the settlement benefited the class, that the negotiations were conducted at arm’s length, that the settlement provided a real economic benefit, and that the class faced significant litigation risks. The court also noted that 70,134 notices had been mailed, only three class members opted out, and Hayes was the only objector.

Disposition

Judge Paul G. Gardephe denied Hayes’s motion for reconsideration. The clerk was directed to terminate the motion at docket entry 178. The order did not alter the final judgment approving the settlement.