Gianni Versace, S.p.A. et al v. Versace 19.69 Abbigliamento Sportivo SRL et al

Filing 158

ORDER GRANTING 115 MOTION TO WITHDRAW AS COUNSEL FOR LICENSEE DEFENDANTS. Signed by Judge Haywood S. Gilliam, Jr. on 7/14/2017. (ndrS, COURT STAFF) (Filed on 7/14/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 GIANNI VERSACE, S.P.A., et al., Plaintiffs, 8 v. 9 10 VERSACE 19.69 ABBIGLIAMENTO SPORTIVO SRL, et al., 11 Case No. 16-cv-03617-HSG ORDER GRANTING MOTION TO WITHDRAW AS COUNSEL FOR LICENSEE DEFENDANTS Re: Dkt. No. 115 United States District Court Northern District of California Defendants. 12 Defendants in this action include V1969 Versace SMO, LLC; V1969 Versace HG, LLC; 13 14 and V1969 USA, LLC (collectively “Licensee Defendants”).1 On January 27, 2017, the Court 15 granted Licensee Defendants’ motion to substitute Adams Rossman (“Attorney Rossman”) for 16 their former counsel, Dkt. No. 85, who had sought withdrawal because Licensee Defendants 17 “breached an agreement as to expenses and fees,” Dkt. No. 61. On May 22, 2017, Attorney 18 Rossman filed a motion to withdraw as counsel for Licensee Defendants on the ground that they 19 had “breached the retainer agreement with Mr. Rossman as to fees and expenses.” Dkt. No. 115. 20 He has given notice to the principals of the Licensee Defendants that he is seeking withdrawal and 21 that, as corporate entities, they cannot proceed without counsel. See id. at 3–4, 6. On June 5, 22 2017, Plaintiffs Versace, S.p.A. and Versace USA, Inc. (collectively, “Versace”) opposed 23 withdrawal, Dkt. No. 136, and on June 12, 2017, Attorney Rossman filed a reply declaration in 24 support of the motion, Dkt. No. 140. On July 13, 2017, the Court held a hearing, which was 25 attended by the following individuals: Attorney Rossman; Eran Brosh, a principal for Licensee 26 27 28 1 Over the course of this litigation, these same defendants have collectively been referred to as both the “LVBHQ Defendants” and the “Licensee Defendants.” Compare, e.g., Dkt. No. 61 (former) with Dkt. No. 115 (latter). 1 Defendants; and Rosemarie Ring, an attorney for Plaintiffs (“Attorney Ring”). The Court held an 2 in camera portion of the hearing with only Attorney Rossman and Mr. Brosh, followed by an open 3 portion of the hearing, during which the Court also heard from Attorney Ring. Based on the 4 relevant legal authority, the papers, and the representations made at the hearing, the Court granted 5 the motion to withdraw as counsel, and issues this order to explain its reasoning in more detail. 6 7 I. LEGAL STANDARD In this District, “[c]ounsel may not withdraw from an action until relieved by order of 8 Court after written notice has been given reasonably in advance to the client and to all other 9 parties who have appeared in the case.” Civil L.R. 11-5(a). Moreover, “[w]hen withdrawal by an attorney from an action is not accompanied by simultaneous appearance of substitute counsel or 11 United States District Court Northern District of California 10 agreement of the party to appear pro se, leave to withdraw may be subject to the condition that 12 papers may continue to be served on counsel for forwarding purposes, unless and until the client 13 appears by other counsel or pro se.” Civil L.R. 11-5(b). 14 Withdrawal is also governed by the California Rules of Professional Conduct. See j2 15 Glob. Commc’ns, Inc. v. Blue Jay, Inc., No. C 08-4254 PJH, 2009 WL 464768, at *1 (N.D. Cal. 16 Feb. 24, 2009)); see also Civil L.R. 11-4(a)(1) (requiring compliance with the California Rules of 17 Professional Conduct). Under these rules, permissive withdrawal may only be granted by leave of 18 the Court. CA ST RPC, Rule 3-700(A)(1). The professional rules provide for permissive 19 withdrawal on various grounds, including when “[t]he client . . . breaches an agreement or 20 obligation to the member as to expenses or fees[,]” or when “[t]he member believes in good faith . 21 . . that the tribunal will find the existence of other good cause for withdrawal.” Id., Rule 3- 22 700(C)(1), (6). However, an attorney may not withdraw before he or she “has taken reasonable 23 steps to avoid reasonably foreseeable prejudice to the rights of the client, including giving due 24 notice to the client, allowing time for employment of other counsel, complying with rule 3- 25 700(D), and complying with applicable laws and rules.” Id., Rule 3-700(A)(2); see also id., Rule 26 3-700(D) (regarding the refund of fees and the release of property and papers). 27 Finally, courts assessing withdrawal balance the equities, considering such factors as why 28 counsel seeks to withdraw and whether permitting withdrawal may prejudice other litigants, harm 2 1 the administration of justice, or delay the case’s resolution. Robinson v. Delgado, No. CV 02- 2 1538 NJV, 2010 WL 3259384, at *2 (N.D. Cal. Aug. 18, 2010) (citing cases). 3 II. DISCUSSION Local Civil Rule 11-5(a) is satisfied because the filing of the motion almost two months 4 ago gave all parties reasonable advance notice of withdrawal, and because Attorney Rossman has 6 given notice to his client. See Dkt. No. 115 at 3–4, 6. The filing of the motion was also permitted 7 by the California Rules of Professional Conduct. Based upon the information disclosed during the 8 in camera portion of the hearing, the Court is persuaded that Attorney Rossman filed the motion 9 with a good faith belief in the existence of good cause for withdrawal. CA ST RPC, Rule 3- 10 700(C)(6). Balancing the equities, the Court finds that permitting withdrawal is just, while 11 United States District Court Northern District of California 5 imposing certain conditions (described below) will minimize delay and prejudice. See Robinson, 12 2010 WL 3259384, at *2 (discussing equities). In the exercise of its discretion, the Court finds 13 that withdrawal is warranted. See Gong, 2008 WL 160964, at *1. However, Licensee Defendants, as a business entity, may appear in federal court only 14 15 through counsel. See U.S. v. High Country Broad. Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993); 16 see also N.D. Cal. L.R. 3-9(b). Consequently, the Licensee Defendants must obtain new counsel 17 within 30 days. During this period, the Court directs Attorney Rossman to accept service of 18 papers for forwarding to the Licensee Defendants. See Civil L.R. 11-5(b). If the Licensee Defendants are unable to obtain counsel within 30 days, the Court will be 19 20 inclined to strike their answer and allow Plaintiffs’ counsel to seek entry of a default and a default 21 judgment. See Baeza v. Assisted Credit Servs., Inc., No. 8:15-cv-01451-ODW (JCG), 2016 WL 22 3912016, at *2–4 (C.D. Cal. July 19, 2016); see also Emp. Painters’ Trust v. Ethan Enters., Inc., 23 480 F.3d 993, 998 (9th Cir. 2007) (affirming entry of a default judgment where the corporate 24 defendant had failed to obtain substitute counsel); High Country, 3 F.3d at 1245 (same). Licensee 25 Defendants have never answered the amended complaint. Therefore, the Court sets July 18, 2017 26 as the deadline for the Licensee Defendants to file their answer to the amended complaint. 27 // 28 // 3 1 III. CONCLUSION 2 For the foregoing reasons, the Court grants the motion to withdraw as counsel. 3 IT IS SO ORDERED. 4 5 6 Dated: 7/14/2017 ______________________________________ HAYWOOD S. GILLIAM, JR. United States District Judge 7 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4

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