Arai

We must decide whether the district court abused its discretion by denying a motion to reopen the time for appeal because, in its opinion, the grounds for the underlying appeal were meritless.

I

In 1992, Hideo and Mitsuko Arai (collectively “the Aráis”) sued Ernest Leff 1 for fraud and deceit in the Central District of California. During the pendency of the suit, Leff filed for Chapter 11 bankruptcy protection, but the bankruptcy court granted the Aráis leave to proceed. In November 1994, before trial, the Aráis and Leff reached a settlement. Under its terms, Leff was required to pay the Aráis *1068 $50,000 by January 31, 1995, and if he did not, judgment, non-dischargeable in bankruptcy in the sum of $2,543,000, would be entered. The district court approved the settlement.

Leff failed to make the required $50,000 payment to the Aráis by January 31, 1995, and the district court, in accordance with the terms of the settlement, entered the stipulated judgment against Leff in February 1995. Shortly thereafter, Leff moved to vacate or to amend the judgment, alleging that the district court did not have subject matter jurisdiction. In April 1995, the court amended the…