Summary
finding that attorney withdrawal would not unreasonably delay proceedings as the case was not on the verge of trial
Summary of this case from Baiqiao Tang v. Wengui GuoOpinion
08 Civ. 6469 (DAB) (JCF)
02-17-2011
BLUE ANGEL FILMS, LTD. and MIROMAR ENTERTAINMENT AG, Plaintiffs, v. FIRST LOOK STUDIOS, INC., Defendant.
(ECF)
MEMORANDUM AND ORDER
JAMES C. FRANCIS IV UNITED STATES MAGISTRATE JUDGE
This is an action for breach of contract and copyright infringement relating to a motion picture distribution agreement. On September 29, 2010 the Honorable Deborah A. Batts, U.S.D.J., issued a decision granting the plaintiff's motion for summary judgment on its breach of contract claim, but also granting the defendant's cross-motion for summary judgment on the copyright infringement claim. Following this determination, the defendant, First Look Studios, Inc. ("FLS"), filed a motion for attorneys' fees based on its successful defense of the infringement claim. The plaintiff opposed this motion and cross-moved for sanctions. Subsequently, the defendant's attorney moved to withdraw as counsel.
For the reasons that follow, the application of defendant's counsel to withdraw is granted, and defendant is required to appear by new counsel within thirty days of this decision. Defendant's outgoing counsel shall provide prompt notice of this decision to the defendant. If the defendant fails to appear by new counsel within thirty days, its motion for attorneys' fees will be denied as moot.
Discussion
Defendant's counsel, Charles M. Coate of Costa Abrams & Coate, LLP, seeks to be allowed to withdraw as counsel pursuant to Local Civil Rule 1.4, which states:
An attorney who has appeared as attorney of record for a party may be relieved or displaced only by order of the court and may not withdraw from a case without leave of the court granted by order. Such an order may be granted only upon a showing by affidavit or otherwise of satisfactory reasons for withdrawal or displacement and the posture of the case, including its position, if any, on the calendar.When considering whether to grant a motion to dismiss, district courts must thus analyze two factors: the reasons for withdrawal and the impact of the withdrawal on the timing of the proceeding.
Although there is no clear standard for what may be considered a "satisfactory reason" for allowing a withdrawal, it seems evident that the non-payment of legal fees constitutes such a reason. Melnick v. Press, No. 06 CV 6686, 2009 WL 2824586, at *3 (E.D.N.Y. Aug. 28, 2009) ("[I]t is well-settled in the Eastern and Southern Districts of New York that non-payment of legal fees is a valid basis for granting a motion to withdraw pursuant to Local Civil Rule 1.4."); Freund v. Weinstein, No. 08 CV 1469, 2009 WL 750242, at *1 (E.D.N.Y. March 19, 2009) (granting motion to withdraw where "clients have failed to communicate with attorneys . . . and have failed to pay legal fees"); Team Obsolete Ltd. v. A.H.R.M.A. Ltd., 464 F. Supp. 2d 164, 166 (E.D.N.Y. 2006) ("Courts have long recognized that a client's continued refusal to pay legal fees constitutes a 'satisfactory reason' for withdrawal under Local Rule 1.4."); Diarama Trading Co. v. J. Walter Thompson U.S.A., Inc., No. 01 Civ. 2950, 2005 WL 1963945, at *1 (S.D.N.Y. Aug. 15, 2005)("'Satisfactory reasons' include failure to pay legal fees, a client's lack of cooperation -- including lack of communication with counsel, and 'the existence of an irreconcilable conflict between attorney and client.'" (quoting Hallmark Capital Corp. v. Red Rose Collection, Inc., No. 96 Civ. 2839, 1997 WL 661146, at *2 (S.D.N.Y. Oct. 21, 1997))); Cower v. Albany Law School of Union University, No. 04 Civ. 643, 2005 WL 1606057, at *5 (S.D.N.Y. July 8, 2005)("It is well settled that nonpayment of fees is a legitimate ground for granting counsel's motion to withdraw."). This is particularly true when communications between client and counsel have broken down. See Diarama Trading Co., 2005 WL 1963945, at *1-2.
In this case, defendant's counsel seeks to withdraw for two reasons: first, the defendant has gone out of business and there are no employees left with whom to communicate; second, the defendant has not paid any legal fees since October 2010. (Declaration of Charles M. Coate in Support of Motion to Withdraw as Counsel of Record for Defendant First Look Studios, Inc., dated Dec. 8, 2010 ("Coate Decl."), ¶ 2). Defendant's counsel have been unable to communicate with their client for several consecutive months and have not received any legal fees during this time. (Coate Decl., ¶¶ 3, 4, 6). These facts constitute sufficient grounds for withdrawal pursuant to Local Civil Rule 1.4.
The plaintiff argues that FLS is in fact still in operation, and cites its participation in a film festival in Berlin on February 14, 2011. (Letter of Gregory A. Sioris dated Feb. 15, 2011). This may well be evidence that FLS is attempting to evade its creditors; it does not, however, negate the representation of FLS's counsel that their client has ceased to communicate with them.
However, in addition to considering reasons for withdrawal, district courts typically also consider whether "'the prosecution of the suit is [likely to be] disrupted by the withdrawal of counsel.'" See Whiting v. Lacara, 187 F.3d 317, 320-21 (2d Cir. 1999) (alteration in original) (quoting Brown v. National Survival Games, Inc., No. 91-CV-221, 1994 WL 660533, at *3 (N.D.N.Y. Nov. 18, 1994)). Allowing counsel to withdraw may be likely to disrupt and delay the proceedings, especially when the case is about to be tried. Vachula v. General Electric Capital Corp., 199 F.R.D. 454, 458 (D. Conn. 2000) ("Where an attorney moves to withdraw on the eve of trial, courts generally deny such a motion."); Malarkey v. Texaco, Inc., No. 81 Civ. 5224, 1989 WL 88709, at *2 (S.D.N.Y. July 31, 1989) (denying counsel's motion to withdraw when case is "on the verge of trial readiness"). Cf. Freund, 2009 WL 750242, at *1 ("[W]ithdrawal at this juncture will not substantially disrupt this litigation since discovery is in the early stages."). Although the plaintiff argues here that the motion to withdraw here is only a pretext for stalling the proceedings (Plaintiffs' Memorandum of Law in Opposition to the Defendant Attorneys' Motion to Withdraw and in Support of the Plaintiffs' Cross Motion for the Entry of a Non Final Judgment and Other Relief at 11); see also Rophaiel v. Alken Murray Corp., No. 94 Civ. 9064, 1996 WL 306457, at *2 (S.D.N.Y. June 7, 1996)(denying motion to withdraw over concern with litigation delay because it would be "too easy for a defendant to stall proceedings by inducing the withdrawal of its attorney by non-payment of fees"), there is no evidence suggesting that defendant's counsel is engaged in such a strategy. Furthermore, in the Rophaiel case, the judge was concerned that counsel's only basis for withdrawal was the non-payment of legal fees by the client; the client otherwise appeared to be maintaining a cooperative relationship with counsel. Id. at *1-2. In this case, both elements -- lack of payment and lack of communication by the client -- are present. Moreover, more recent case law in the Southern and Eastern Districts of New York has held that non-payment of legal fees alone can be a satisfactory reason for withdrawal. See Melnick, 2009 WL 2824586, at *3; Team Obsolete Ltd., 464 F. Supp 2d. at 166. Finally, this case is not on the verge of being tried, and any disruption is caused not by defendant's counsel moving to withdraw, but simply by the defendant's failure to communicate with its attorneys. Holding counsel in this proceeding will do nothing to speed the litigation.
Conclusion
Because defendant's counsel proffers "satisfactory reasons" for requesting to be relieved pursuant to Local Civil Rule 1.4, and because his withdrawal will not in and of itself unnecessarily delay the proceedings, the motion to withdraw (Docket No. 50) is granted. The defendant must appear by new counsel within thirty days of this decision. See Century Jets Aviation, LLC v. Alchemist Jet Air, LLC, Nos. 08 Civ. 9892, 09 Civ. 7659, 2009 WL 4035642, at *3 (S.D.N.Y. Nov. 23, 2009)(granting thirty days for corporation to obtain replacement counsel). This determination is without prejudice to the plaintiff's cross-motion for sanctions, which will be considered subsequently. The defendant's outgoing counsel shall immediately deliver a copy of this Order to the defendant at its last known address.
SO ORDERED.
/s/_________
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE Dated: New York, New York
February 17, 2011 Copies mailed this date: Gregory A. Sioris, Esq.
350 Fifth Avenue, Suite 7606
New York, New York 10118 Charles M. Coate, Esq.
Jennifer K. Hudson, Esq.
Costa Abrams & Coate, LLP
1221 Second Street, Third Floor
Santa Monica, CA 90401 William R. Horner, Esq.
551 Fifth Avenue, Suite 616
New York, New York 10176