UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION
March 22, 2013
ORACLE AMERICA, INC., A DELAWARE SBA CORPORATION,
SERVICE KEY, LLC, A GEORGIA LIMITED LIABILITY COMPANY;
FEDERAL BUSINESS SYSTEMS SUPERSEDES
CORPORATION, A DELAWARE CORPORATION; AND DOES 1--50, DEFENDANTS.
The opinion of the court was delivered by: United States District Judge Saundra Brown Armstrong
AMENDED ORDER GRANTING MOTION TO WITHDRAW AND DIRECTING DLT FEDERAL BUSINESS SYSTEMS CORPORATION TORETAIN COUNSELANGELA VINES; DLT 10Dkt. 163 Dkt. 183
The parties are presently before the Court on DLT Federal Business Systems 16Corporation's (DLT) Motion to Withdraw by Counsel. Dkt. 163. Having read and 17 considered the papers filed in connection with this matter and being fully informed, the 18
Court hereby GRANTS the motion for the reasons set forth below. In addition, DLT is 19 ordered to retain new counsel within fifteen (15) days of this Order. The Court, in its 20 discretion, finds this matter suitable for resolution without oral argument. See Fed. R. Civ. 21
I. BACKGROUND 23
24 against Defendants, DLT, Service Key, LLC ("Service Key") and its Service Key President 25 and co-owner, Angela Vines. The Amended Complaint alleges claims, inter alia, under the 26 Federal Copyright Act, 17 U.S.C. §§ 101 et seq., the Computer Fraud and Abuse Act 27 ("CFAA"), 18 U.S.C. §§ 1030 et seq., and the Lanham Act, 15 U.S.C. § 1125(a)(1)(B). 28 P. 78(b); N.D. Cal. Civ. L.R. 7-1(b). 22 On February 17, 2012, Plaintiff Oracle America, Inc. (Oracle) filed the instant action 1The discovery cut-off date is June 26, 2013, and trial is scheduled to commence on October 2 14, 2013. Dkt. 59.
At the outset of the action, DLT was represented by DunlapWeaver PLLC and 4Coblentz, Patch, Duffy & Bass LLP (collectively "Original Counsel"). On January 11, 5 2013, Original Counsel filed a motion to withdraw due to ethical concerns, pursuant to 6 California Rule of Professional Conduct 3-700. Dkt. 117. For procedural reasons, the 7 Court denied the motion without prejudice on January 18, 2013. Dkt. 131. In that Order, 8 however, the Court explicitly warned DLT, that, as a corporation, it may appear only 9 through counsel. Id. at 2. In addition, the Court noted that "[w]hen a corporation fails to 10 retain counsel to represent it in an action, its answer may be stricken and a default judgment 11 entered against it." Id. at 3. Three days later, on January 22, 2013, DLT filed a notice 12 substituting the law firms Rimon P.C. and NOVA IP Law, PLLC (collectively "Current 13 Counsel") in place of Original Counsel. Dkt. 137, 142. 14 On March 8, 2013, little more than one month after appearing in this action, Current 15Counsel filed the instant motion to withdraw. Dkt. 163. According to Current Counsel, on 16 March 6, 2013, DLT informed them that it was severing the attorney-client relationship.
Additionally, DLT expressly forbade Current Counsel from making or serving any further 18 papers, briefs, motions or discovery on DLT's behalf, other than a notice of termination 19 and, if necessary, a motion to withdraw as counsel. Whittacar Decl. ¶ 3, Dkt. 163-1. 20 Current Counsel then notified DLT of impending and briefing deadlines, and advised DLT 21 that it could only appear through counsel. Id. ¶ 4. DLT responded that it would assume 22 responsibility for its litigation obligations through its own or alternative counsel. Id. 23
II. DISCUSSION 24
25 record only if: (1) written notice has been given reasonably in advance to the client and all 26 other parties in the action; and (2) the attorney obtains leave of Court. Civ. L.R. 11-5(a). 27
In addition, withdrawing counsel must have "taken reasonable steps to avoid reasonably 28 foreseeable prejudice to the rights of the client, including giving due notice to the client,
This Court's Civil Local Rules authorize an attorney to withdraw
as counsel of
1allowing time for employment of other counsel,
complying with rule 3-700(D), and 2 complying with
applicable laws and rules." Cal. Rules Prof. Conduct 3-700(A)(2); see
Nehad v. Mukasey, 535 F.3d 962, 970 (9th Cir. 2008) (applying California Rules of 4
Professional Conduct to attorney withdrawal). 5
A client has an absolute right to discharge an attorney, with or without cause.
6Francasse v. Brent, 6 Cal. 3d 784, 790 (1972) (citing Cal. Code. Civ. Proc. § 284). Rule 3- 7
700(C)(5) of the California Rules of Professional Conduct
authorizes the permissive 8 withdrawal of counsel upon the
client's termination of the employment relationship. In 9
addition, Current Counsel's withdrawal is justified based on DLT's
explicit instruction that 10 they not take any further
action on its behalf, other than to seek withdrawal or to file a
11 notice of termination. See Cal. Rule. Prof. Conduct, rule
3-700(C)(1)(d) (permissive 12 withdrawal allowed where
client "renders it unreasonably difficult for the member to carry
13 out the employment effectively"). Finally, the record
confirms that DLT has expressly 14 consented to withdrawal
of Current Counsel and that all of the prerequisites for withdrawal
15 under Civil Local Rule 11-5(a) and Rule 3-700(D) have
been satisfied. 16
17 ruse by DLT to disrupt its efforts to conduct discovery and prepare this action for trial. 18
Dkt. 167. 1 In addition, Oracle points out that DLT cannot appear pro se, and that it has no 19 replacement counsel lined up. Although Oracle's concerns are well taken, denying Current 20
Counsel's request to withdraw is not a viable solution. The record confirms that DLT has 21 fired Current Counsel, explicitly forbidden them from taking any further action on behalf of 22
DLT, and ceased compensating them for their services. Whittacar Decl. ¶¶ 3-10. Under 23 these circumstances, it would be illogical, inequitable and untenable to compel Current 24
Counsel to remain as DLT's counsel of record. 25
1 Oracle points out that the depositions of DLT employees are scheduled for March
2621 and 22, 2013, and that Oracle has invested significant time and resources preparing for those depositions. Oracle began serving discovery requests upon DLT in July 2012, but 27
Oracle opposes the motion to withdraw on the grounds that it is nothing more than a DLT has refused to cooperate in responding to those requests. As a result, Oracle has obtained three orders issued by Magistrate Judge Nandor Vadas compelling discovery. 28
Oracle only recently received documents from DLT in February 2013.
2 cannot appear pro se, and that it must be represented by counsel in this action. See D-Beam 3
Ltd. P'ship v. Roller Derby Skates, Inc., 366 F.3d 972, 973-974
(9th Cir. 2004) ("It is a 4 longstanding rule that
'[c]orporations and other unincorporated associations must appear in
5 court through an attorney.'") (citation omitted); Civ.
L.R. 3-9 ("A corporation, 6 unincorporated association,
partnership or other such entity may appear only through a 7
member of the bar of this Court."). The record demonstrates that
DLT fired Current 8
As noted, both this Court and Current Counsel have repeatedly warned DLT that it
Counsel on March 6, 2013, despite its awareness that its failure to retain substitute counsel 9 could lead to the entry of a default judgment against it. That notwithstanding, to date, no 10 substitute counsel has appeared in the action nor is there any indication that DLT intends to 11 retain counsel. Therefore, if substitute counsel fails to appear on behalf of DLT in this 12 action within fifteen days of this Order, the Court will strike DLT's answer and direct the 13 entry of default against DLT. Thereafter, Oracle may file a motion for default judgment 14 against DLT, which will then be referred to Magistrate Judge Vadas for a report and 15 recommendation. See United States v. High Country Broadcasting Co., 3 F.3d 1244, 1245 16
(9th Cir. 1993) (holding that it was "perfectly appropriate" for
the district court to enter a 17 default judgment when the
defaulting corporation failed to comply with the court's order to
18 retain licensed counsel). 19
III. CONCLUSION 20
For the reasons stated above,
IT IS HEREBY ORDERED THAT:
1. The Motion to Withdraw by Counsel is GRANTED. The law firms of Rimon
23P.C. and NOVA IP Law, PLLC, and their attorneys, are terminated as counsel of record. 24
25 file a notice of appearance within fifteen (15) days of the date this Order is filed. Should 26
DLT fail to do so, the Court will strike DLT's answer and direct the Clerk to enter default 27 against DLT forthwith.
2. DLT is ordered to retain counsel licensed to practice in this Court who shall
3. Until further Order of the Court, pursuant to Civil Local Rule 11-5(b), all
2 notices, papers, and pleadings that may or must be served on DLT shall be served upon 3
Rimon P.C. and NOVA IP Law, PLLC, by regular or overnight mail, who are ordered, in 4 turn, to forward any materials received directly to DLT forthwith, upon receipt. 5
4. This Order terminates Docket 163.
IT IS SO ORDERED.
© 1992-2013 VersusLaw Inc.