United States District Court, C.D. California
Brooklyn AC-Delco, Inc. et al.
DAC International, Inc., et al.
Present: The Honorable MICHAEL W. FITZGERALD, U.S. District
(In Chambers): ORDER DISMISSING ACTION WITH
are corporations or other business organizations. Plaintiffs
were warned by their prior lawyers that Plaintiffs needed to
find new lawyers or this action would be dismissed. After the
lawyers successfully obtained leave to withdraw, this Court
provided ample time to Plaintiffs to retain new lawyers and
warned Plaintiffs that failure to do so would result in
dismissal. Plaintiffs have not retained new lawyers by the
Court-ordered deadline. Therefore, this Court has no choice
but to dismiss this action with prejudice.
Court granted Plaintiffs' prior lawyers' Motion to
Withdraw on January 17, 2017. (Docket No. 106). In that Order
the Court warned,
Plaintiffs are ORDERED to file a Notice of
Appearance of new counsel on or before February 7,
2017. Failure to do so shall be deemed a failure to
participate in the action. The sanction shall be dismissal of
the action. A corporation may not appear pro se or through
its officers, but through a lawyer only. Accordingly, failure
to hire substitute counsel will result in dismissal of the
(Id.). Subsequently, Plaintiffs asked for a
continuance of the February deadline, which was granted.
(Docket Nos. 108-109). Plaintiffs were given a new deadline
of March 7, 2017. That deadline has come and gone without a
new appearance being filed.
request for a continuance Plaintiffs' outside counsel in
New York, Mikhail Ratner, stated a local firm had shown
interest in taking the case. That firm never filed a notice
of appearance and Plaintiffs have filed nothing else since
the February request for a continuance.
basic rule is that a corporation must appear in federal court
through counsel. Rowland v. Cal. Men's Colony, Unit
II Men's Advisory Council, 506 U.S. 194, 201-02
(1993) (only natural persons may proceed in forma
pauperis because, inter alia, organizations
need a lawyer in federal court). Plaintiffs' prior
counsel warned Plaintiffs' outside counsel in New York
that he would be withdrawing as counsel as early as August
2016. (Docket No. 106 at 1). Nonetheless, Plaintiffs have
failed to acquire new counsel by the court-imposed deadline.
Therefore, the action must be dismissed.
dismissal can be viewed in various ways. For example, it can
be viewed, under Ninth Circuit case law, as the inevitable
result of the requirement for a business entity to be
represented by counsel. See Ringgold Corp. v.
Worrall, 880 F.2d 1138, 1142 (9th Cir. 1989) (upholding
dismissal of affirmative claims and grant of default judgment
on counterclaims after attorney withdrew and company failed
to retain new counsel or appear for pretrial conferences);
Emp. Painters' Trust v. Ethan Enters., Inc., 480
F.3d 993, 1000-01 (9th Cir. 2007) (upholding default judgment
after corporation failed to hire an attorney following
withdrawal); Galtieri-Carlson v. Victoria M. Morton
Enters., Inc., No. 2:08-cv-01777 FCD-KJN-PS, 2010 WL
3386473, at *3 (E.D. Cal. 2010) (sanctioning corporate
defendants by striking their answer when they failed to
retain alternate counsel after the withdrawal of their
dismissal can be viewed as an appropriate sanction for
violation of the Local Rules of the Central District of
California. Local Rule 83-2.2.2 explicitly requires
organizations (including corporations) to appear through
counsel. Local Rule 83-2.2.4 explicitly warns that failure to
obey the Local Rules on attorney representation may be a
ground for dismissal.
dismissal can also be viewed as the appropriate sanction for
failure to prosecute this action. As a general matter,
district courts may dismiss actions for failure of
prosecution under Federal Rule of Procedure 41(b). See
Link v. Wabash Railroad Co., 370 U.S. 626, 629-30 (1962)
(noting that district court's authority to dismiss for
lack of prosecution is necessary to prevent undue delays in
the disposition of pending cases and avoid congestion in
district court calendars); Ferdik v. Bonzelet, 963
F.2d 1258, 1260 (9th Cir. 1992) (stating that district court
may dismiss action for failure to comply with any order of
the court). In determining whether dismissal is appropriate,
the Court must consider five factors: (1) the public's
interest in expeditious resolution of litigation; (2) the
Court's need to manage its docket; (3) the risk of
prejudice to Defendants; (4) the public policy favoring the
disposition of cases on their merits; and (5) the
availability of less drastic sanctions. See In re
Eisen, 31 F.3d 1447, 1451 (9th Cir. 1994) (setting forth
the governing standard).
first two factors-the public's interest in expeditious
resolution of litigation and the Court's need to manage
its docket-weigh in favor of dismissing Plaintiffs'
claims. Plaintiffs have had several months to retain new
counsel, and yet failed to do so even after the Court prior
counsel warned them that they could not proceed pro
third factor-prejudice to the opposing parties-also weighs
against Plaintiffs. A rebuttable presumption of prejudice to
defendants arises when there is a failure to prosecute the
action diligently. Eisen, 31 F.3d at 1452-53
(“The law presumes injury from unreasonable
delay.”) (citation omitted). That presumption may be
rebutted if the plaintiff proffers an excuse for delay.
Id. Plaintiffs have failed to come forward with any
excuses that would justify delaying this action further.
fourth factor-public policy in favor of deciding cases on
their merits- weighs against dismissal. It is Plaintiffs'
responsibility, however, to move the action toward resolution
at a reasonable pace and to avoid dilatory tactics. See
Morris v. Morgan Stanley Co., 942 F.2d 648, 652 (9th
Cir. 1991) (“Although there is indeed a policy favoring
disposition on the merits, it is the responsibility of the
moving party to move towards that disposition at a reasonable
pace, and to refrain from dilatory and evasive
tactics.”). Because Plaintiffs have failed to ...