Third Circuit Reaffirms Strict Timeliness and Excusable-Neglect Limits on Rule 60 Relief in Bankruptcy Claim Expungements

Introduction

In a non-precedential opinion, the United States Court of Appeals for the Third Circuit affirmed the denial of a Rule 60 motion seeking reconsideration of a bankruptcy court’s 2020 order disallowing and expunging a claim filed in the TK Holdings Inc. (“Takata”) Chapter 11 cases. The appellant, pro se claimant Dina Gonzales, challenged the disallowance of her “failure-to-deploy” airbag personal injury claim, arguing that newly presented materials and circumstances justified relief. The appellee was Eric D. Green, the trustee of the PSAN PI/WD Trust, doing business as the Takata Airbag Tort Compensation Trust Fund (“Trust”).

The key issues before the Third Circuit were:

• Whether Gonzales’s motion for relief from the 2020 expungement order, filed in March 2023, was timely under Federal Rule of Civil Procedure 60(b)(2) and 60(c)(1).
• Whether she showed “excusable neglect” under Rule 60(b)(1) sufficient to justify reopening the final expungement order more than two years later.
• Whether, to the extent invoked, Rule 60(b)(6) could supply relief filed “within a reasonable time” and supported by “extraordinary circumstances.”

The Third Circuit affirmed, emphasizing the strict time limits for Rule 60(b)(2) motions, the equitable but demanding Pioneer excusable-neglect framework, and the strong interest in finality when a mass-tort trust’s administration is nearing completion.

Summary of the Opinion

The Third Circuit, reviewing the bankruptcy court’s order under an abuse-of-discretion standard, held:

• Gonzales’s Rule 60(b)(2) request—based on purportedly “newly discovered evidence”—was untimely because it was filed more than one year after the October 2020 expungement order. The one-year period is absolute and cannot be extended. See Fed. R. Civ. P. 60(c)(1); 6(b)(2); applied in bankruptcy via Fed. R. Bankr. P. 9024.
• Her showing under Rule 60(b)(1) for “excusable neglect” failed under the Pioneer factors. The length of the delay (about 29 months), the absence of a satisfactory reason for that delay, and the prejudice to the Trust and holders of allowed claims—especially given the near-conclusion of administration—outweighed any contrary considerations.
• To the extent Rule 60(b)(6) was implicated, the District Court correctly found that the motion was not filed within a reasonable time and, independently, that no “extraordinary circumstances” justified reopening the final judgment.

The court therefore affirmed the District Court’s judgment, which had affirmed the Bankruptcy Court’s denial of reconsideration.

Detailed Analysis

Procedural and Factual Context

Takata’s Chapter 11 cases arose from widespread defects in airbag inflators that could rupture upon deployment, leading to severe injury and death and triggering massive recalls. Gonzales filed a proof of claim alleging injuries from a 2011 accident in which her Honda Accord’s airbag allegedly failed to deploy (a “nondeployment” theory, distinct from inflator “rupture” claims).

The Trust objected to a group of nondeployment claims. After evidentiary hearings, the Bankruptcy Court disallowed and expunged that group in October 2020, finding by a preponderance of the evidence that Takata’s inflators did not cause the failure-to-deploy injuries asserted.

In March 2023, Gonzales moved to reconsider the 2020 expungement order, attaching materials including:

• Letters from John Keller, a former Takata engineer and whistleblower (noting he pursued a Motor Vehicle Safety Whistleblower Act claim in early 2017).
• A 2021 Volkswagen safety recall report.
• Excerpts from a 2017 Honda Service Bulletin.
• 2016 National Highway Traffic Safety Administration report excerpts.
• Materials from a 2015 congressional hearing and a 2015 consent order.

The Bankruptcy Court denied the motion in June 2023 as untimely under Rule 60(b)(2) and, under Rule 60(b)(1), for lack of excusable neglect. The District Court affirmed in March 2024; the Third Circuit has now affirmed as well.

Precedents and Authorities Cited

• Rule 60 and Bankruptcy Rule 9024:
  • Rule 60(b)(2) allows relief from a final judgment based on “newly discovered evidence” that could not have been found with reasonable diligence in time to move under Rule 59(b). But Rule 60(c)(1) imposes a strict one-year deadline for such motions, and Rule 6(b)(2) prohibits extending that deadline. Bankruptcy Rule 9024 makes Rule 60 applicable in bankruptcy cases.
• Standard of Appellate Review:
  • In re Odyssey Contracting Corp., 944 F.3d 483, 487 n.2 (3d Cir. 2019): When the district court acts as an appellate tribunal in a bankruptcy appeal, the court of appeals reviews the bankruptcy court’s decision under the same standards the district court was obliged to apply.
  • In re Energy Future Holdings Corp., 904 F.3d 298, 312 (3d Cir. 2018): Denials of reconsideration under Rule 60 are reviewed for abuse of discretion; factual findings are reviewed for clear error and legal issues de novo.
• Excusable Neglect Framework:
  • Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993): Sets the equitable, multi-factor “excusable neglect” standard—courts weigh prejudice, length of delay and its impact, the reason for delay (including control by movant), and good faith.
  • George Harms Constr. Co. v. Chao, 371 F.3d 156, 163–64 (3d Cir. 2004): Reiterates and applies the Pioneer factors.
  • Advanced Fluid Sys., Inc. v. Huber, 958 F.3d 168, 182–83 (3d Cir. 2020): Confirms Pioneer governs when assessing whether excusable neglect warrants setting aside a final judgment.
  • In re Am. Classic Voyages Co., 405 F.3d 127, 133 (3d Cir. 2005): All Pioneer factors must be considered and balanced; none is dispositive in isolation.
  • Nara v. Frank, 488 F.3d 187, 193–94 (3d Cir. 2007): Characterizes excusable neglect as an equitable determination requiring assessment of all circumstances.
• Rule 60(b)(6) Residual Clause:
  • Bracey v. Superintendent Rockview SCI, 986 F.3d 274, 284 (3d Cir. 2021): Rule 60(b)(6) permits equitable relief only in “extraordinary circumstances” to avert “extreme and unexpected hardship,” and must still be sought within a “reasonable time” under Rule 60(c)(1).

Legal Reasoning

1) Rule 60(b)(2) – Newly Discovered Evidence: The Hard One-Year Stop

Gonzales’s reconsideration motion was filed approximately 29 months after the expungement order. Under Rule 60(c)(1), a motion invoking newly discovered evidence under Rule 60(b)(2) must be filed no later than one year after entry of judgment, and Rule 6(b)(2) forbids extending that jurisdictional-like deadline. The Third Circuit agreed with both lower courts that the Rule 60(b)(2) aspect was untimely, regardless of the content of the materials appended.

Importantly, the court did not need to reach whether the attachments truly qualified as “newly discovered evidence” that could not have been located earlier with reasonable diligence; the late filing was dispositive.

2) Rule 60(b)(1) – Excusable Neglect: Pioneer Balancing Applied

For relief premised on excusable neglect, the Bankruptcy Court expressly identified and applied the Pioneer factors and concluded they weighed against Gonzales. The Third Circuit found no abuse of discretion in that balancing:

• Length of delay and impact: Roughly 29 months elapsed between the expungement order and the reconsideration motion—a substantial period that risked disrupting an advanced-stage claims administration.
• Reason for delay: The Bankruptcy Court noted the absence of a proffered reason or explanation for the delay. Where the cause of delay is not effectively outside the movant’s reasonable control, this factor weighs heavily against relief.
• Prejudice: The Trust credibly showed legal prejudice. The Trust’s objection to the nondeployment cohort had been fully litigated and resolved in its favor in 2020; it also had confronted similar reconsideration efforts previously, requiring additional briefing and hearings. Reopening would burden the Trust and, more critically, imperil timely distributions to holders of allowed claims as the administration neared completion.
• Good faith: While not expressly disputed, good faith alone cannot overcome the combined force of lengthy, unexplained delay and concrete prejudice at a late stage of administration.

The court reiterated that no single Pioneer factor is controlling, and the equitable balance favored finality here—particularly in the context of a mass-tort bankruptcy trust winding down.

3) Rule 60(b)(6) – No Reasonable Time, No Extraordinary Circumstances

Although the Bankruptcy Court did not separately analyze Rule 60(b)(6), the District Court did, and the Third Circuit “s[aw] no basis to disturb” that analysis. On this record, the motion was not filed within a “reasonable time,” and—even more importantly—did not present the requisite “extraordinary circumstances” necessary for equitable reopening under Rule 60(b)(6). This is consistent with the Third Circuit’s insistence that Rule 60(b)(6) is a narrow safety valve, not a vehicle to bypass the one-year cap applicable to Rule 60(b)(1)–(3).

Impact and Significance

Although designated “not precedential” under the Third Circuit’s Internal Operating Procedures, the opinion reinforces several practical points for bankruptcy and complex-litigation practitioners:

• Finality in mass-tort trusts: Courts are acutely sensitive to prejudice when a trust is nearing the end of its administration. Reopening claim disputes late in the process risks delaying distributions to allowed claimants and increasing administrative costs. This weighs heavily against post-judgment relief absent compelling justification.
• Rule 60(b)(2) is unforgiving: The one-year deadline for newly discovered evidence is firm. Litigants cannot extend it via Rule 6(b), and courts will enforce it even when a claimant is pro se and invoking public-safety documents or whistleblower materials.
• Excusable neglect is not a backdoor to Rule 60(b)(2): Attempting to reframe newly discovered evidence arguments as “excusable neglect” will confront the Pioneer balancing. Lengthy, unexplained delay and concrete prejudice—especially to third parties relying on finality—are powerful counterweights.
• Rule 60(b)(6) remains extraordinary: Relief demands both prompt action (“reasonable time”) and circumstances well beyond the ordinary burdens of litigation. Routine evidentiary disputes or hindsight disagreements with case outcomes typically will not suffice.
• Appellate posture matters: In bankruptcy appeals, the Third Circuit reviews the bankruptcy court’s order under the same standards applied by the district court. Demonstrating an abuse of discretion—particularly where the bankruptcy court conducted evidentiary proceedings and navigated trust administration realities—is an uphill battle.

Complex Concepts Simplified

• Expungement of a claim: In bankruptcy, to expunge a claim is to disallow and remove it from the claims register, effectively eliminating it from participating in distributions from the estate or trust.
• Rule 60(b) relief: A post-judgment mechanism allowing a court to relieve a party from a final judgment for specific reasons, such as mistake (60(b)(1)), newly discovered evidence (60(b)(2)), fraud (60(b)(3)), or an exceptional “catch-all” for extraordinary circumstances (60(b)(6)).
• Strict one-year deadline: For Rule 60(b)(1), (2), and (3) motions, there is a non-extendable one-year time limit from the judgment’s entry. Filing later than one year bars relief under those subsections.
• “Reasonable time” under Rule 60(b)(6): Even where the catch-all applies, a motion must be filed promptly in light of all case circumstances. Substantial, unexplained delay is usually fatal.
• Excusable neglect: An equitable standard considering prejudice, delay, reasons for delay (including whether within the movant’s control), and good faith. Courts balance all factors; no single factor is determinative.
• Abuse of discretion review: A deferential standard under which an appellate court asks whether the lower court made a clear error of judgment, misapplied the law, or relied on clearly erroneous facts. It is not enough that the appellate court might have decided differently.
• Preponderance of the evidence: The standard used by the Bankruptcy Court in the underlying expungement proceedings—requiring that a fact be more likely true than not.
• PSAN PI/WD Trust: The Takata Airbag Tort Compensation Trust Fund established in the TK Holdings bankruptcy to resolve personal injury and wrongful death claims associated with PSAN (phase-stabilized ammonium nitrate) inflators.

Conclusion

The Third Circuit’s decision in In re TK Holdings Inc. (Gonzales v. Green) underscores the judiciary’s commitment to finality and orderly administration in large-scale bankruptcy claims processes. Litigants seeking to reopen final orders must adhere strictly to Rule 60’s timetables and standards. Motions premised on newly discovered evidence filed beyond one year are barred; attempts to recast them as excusable neglect face a demanding Pioneer balancing in which prolonged, unexplained delay and prejudice to the estate or trust often carry decisive weight. And Rule 60(b)(6) remains a narrow avenue reserved for truly extraordinary cases and timely pursued.

For practitioners and claimants, the message is clear: assemble and present evidence diligently before judgment; if post-judgment relief is necessary, move promptly within Rule 60’s deadlines and be prepared to show compelling reasons that justify disturbing finality without imperiling the equitable distribution to other stakeholders.

Case Snapshot (for quick reference)

• Case: In re: TK Holdings Inc., et al., Debtors; Gonzales v. Green (Trustee)
• Court: U.S. Court of Appeals for the Third Circuit
• Date: September 9, 2025
• Panel: Judges Bibas, Freeman, and Nygaard; Per Curiam; Not Precedential
• Disposition: Affirmed (denial of Rule 60 motion to reconsider 2020 expungement order)
• Key Holdings:
  • Rule 60(b)(2) motion untimely when filed more than one year after judgment; deadline non-extendable.
  • No excusable neglect under Pioneer; length of delay, lack of reason, and prejudice to Trust/claimants control.
  • No Rule 60(b)(6) relief: not within a reasonable time and no extraordinary circumstances.