Skyline Steel, L.L.C. v. Pilepro, L.L.C.

Filing 239

MEMORANDUM OPINION AND ORDER re: 205 MOTION for Michael C. Van, Micah F. McBride, Robert T. Spjute, Gregory W. Schulz to Withdraw as Attorney filed by Pilepro, L.L.C., 197 MOTION to Withdraw as Attorney filed by Pi lepro, L.L.C. Accordingly, out of an abundance of caution, the Court will retain jurisdiction over the firms for the purposes of adjudicating any request for fees related to Shumway Van's or Maschoff Brennan's conduct specifically as oppos ed to PilePro's conduct generally during this litigation, as many courts have done when faced with Rule 11 motions when granting motions to withdraw. See, e.g., Logicom Inclusive, Inc. v. W.P. Stewart & Co., No. 04-CV-604 (CSH) (DFE), 2008 WL 1 777855, at *2 (S.D.N.Y. Apr. 16, 2008) (retaining jurisdiction over sanctions claim notwithstanding attorneys' withdrawal from case); cf. Gold v. The Last Experience, No. 97-CV-1459 (JGK), 1999 WL 156005, at *4 (S.D.N.Y. Mar. 22, 1999) (granting attorney's motion to withdraw but noting that "[t]he withdrawal does not absolve [the attorney] of liability for Rule 11 sanctions"). The Clerk of Court is directed to terminate Docket Nos. 197 and 205 and to terminate Larry R. Laycoc k, David R. Wright, Tyson K. Hottinger, and Bret D. Tingey as attorneys on the docket. After the close of fact discovery, the Court will issue a separate order directing the Clerk of Court to terminate Michael C. Van, Micah F. McBride, Robert T. Spjute, and Gregory W. Schulz as attorneys.SO ORDERED. (Signed by Judge Jesse M. Furman on 3/05/2015) (ama)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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SKYLINE STEEL, LLC,
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Plaintiff,
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-v:
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PILEPRO, LLC,
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Defendant.
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03/05/2015

13-CV-8171 (JMF)
MEMORANDUM OPINION
AND ORDER

JESSE M. FURMAN, United States District Judge:
This Memorandum Opinion and Order addresses motions to withdraw filed by two firms
representing Defendant PilePro, LLC (“PilePro”). On January 29, 2015, Larry R. Laycock,
David R. Wright, Tyson K. Hottinger, and Bret D. Tingey of the law firm of Maschoff Brennan
Laycock Gilmore Israelsen & Wright, PLLC (collectively, “Maschoff Brennan”) moved for
leave to withdraw as counsel of record for PilePro, citing the failure of PilePro to pay Maschoff
Brennan’s legal fees and costs and a lack of communication between attorney and client.
(Docket Nos. 197-98). On February 9, 2015, Michael C. Van, Micah F. McBride, Robert T.
Spjute, and Gregory W. Schulz (collectively, “Shumway Van”) also moved for leave to
withdraw as counsel of record for PilePro, citing similar reasons. (Docket Nos. 205-06).
Notably, Maschoff Brennan and Shumway Van are not PilePro’s first attorneys in this case — or
the first to seek withdrawal based on PilePro’s failure to pay legal fees. Lee S. Wolosky,
Douglass A. Mitchell, and Jonathan R. Knight of the law firm of Boies, Schiller & Flexner LLP
represented PilePro for the first year of the case, until they were granted leave to withdraw by
Order entered on November 7, 2014. (Docket No. 129).

Plaintiff Skyline Steel, LLC (“Skyline”) opposed both motions, primarily on the ground
that “the efficient and timely administration of this case would be threatened if PilePro’s counsel
are both allowed [to] withdraw,” in part because PilePro had not yet obtained new counsel.
(Docket No. 223, at 3). Given PilePro’s track record, Skyline’s concern that it would have
trouble obtaining counsel was well founded. But PilePro appears to have accomplished the
improbable: On March 2, 2015, Janet B. Linn of the law firm Bleakley Platt & Schmidt, LLP,
entered a notice of appearance on PilePro’s behalf. (Docket No. 236). And by letter filed
yesterday, Maschoff Brennan advised the Court that PilePro had asked it to transfer all files
relating to its representation of PilePro in this case to Ms. Linn, and that Maschoff Brennan has
done so. (Docket No. 237).
This District’s Local Rules provide that counsel can withdraw only with Court approval
and that the Court may grant withdrawal “only upon a showing . . . of satisfactory reasons for
withdrawal or displacement and the posture of the case . . . and whether or not the attorney is
asserting a retaining or charging lien.” S.D.N.Y. Local Civ. R. 1.4. Thus, when considering
whether to grant a motion to withdraw under Rule 1.4, courts must analyze two factors: the
reasons for withdrawal and the impact of the withdrawal on the timing of the proceeding. With
respect to the former, a party’s “refusal to pay attorney’s fees may constitute ‘good cause’ to
withdraw. In most cases . . . , courts have permitted counsel to withdraw for lack of payment
only where the client either ‘deliberately disregarded’ financial obligations or failed to cooperate
with counsel.” United States v. Parker, 439 F.3d 81, 104 (2d Cir. 2006) (citation omitted) (citing
McGuire v. Woods, 735 F. Supp. 83, 84 (S.D.N.Y. 1990)). With respect to the latter, the Court
must consider “the posture of the case,” and whether “the prosecution of the suit is likely to be
disrupted by the withdrawal of counsel.” Whiting v. Lacara, 187 F.3d 317, 320-21 (2d Cir.

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1999) (internal quotation marks omitted).
Weighing those considerations here, and mindful of the fact that Ms. Linn has entered a
notice of appearance on PilePro’s behalf, Maschoff Brennan’s motion is GRANTED, as
PilePro’s failure to pay its fees or communicate with counsel provides good cause to withdraw
and discovery is still ongoing. For similar reasons, Shumway Van’s motion is also GRANTED,
except — in the interests of ensuring that there are no delays in completing fact discovery (and
mindful that Shumway Van identified itself as lead counsel and filed its motion to withdraw after
Maschoff Brennan had filed its motion) — it is not granted leave to withdraw until the close of
fact discovery (currently set for March 27, 2015). Between now and that date, Shumway Van
shall take all necessary steps to assist Ms. Linn in completing fact discovery, and, more broadly,
shall cooperate in promptly transferring any files related to this case to Ms. Linn. (See Docket
No. 206, at 5 (agreeing “to cooperate in transferring any files related to this case to any other law
firm as directed by PilePro, as necessary to avoid delay or prejudice”)). Between that condition,
and the fact that the Court must approve any application to extend the deadlines for discovery
(which it is exceedingly unlikely to do in view of the fact that the parties have had nearly a year
to complete fact discovery), the Court is confident that counsels’ withdrawal will not materially
affect the progress of this case. (See Docket No. 129 (noting that the “will not allow the
substitution of counsel to materially delay the proceedings”)).
Skyline requests that, in the event counsels’ motions to withdraw are granted, the Court
retain jurisdiction over both firms for the purpose of any future motion for attorney’s fees and
costs under, among other statutes, 28 U.S.C. § 1927. (Docket No. 223, at 7-8; Docket No. 202 at
5-7). In response, Maschoff Brennan’s and Shumway Van’s sole argument is that any such
motion would be without merit. (Docket No. 221, at 2; Docket No. 227, at 7-8). Although the

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Court is inclined to agree that Skyline would face an uphill battle in bringing any such motion,
Maschoff Brennan and Shumway Van cite no authority for the proposition that the merits (or
lack thereof) of a prospective motion are a reason to decline to retain jurisdiction in these
circumstances. Accordingly, out of an abundance of caution, the Court will retain jurisdiction
over the firms for the purposes of adjudicating any request for fees related to Shumway Van’s or
Maschoff Brennan’s conduct specifically — as opposed to PilePro’s conduct generally — during
this litigation, as many courts have done when faced with Rule 11 motions when granting
motions to withdraw. See, e.g., Logicom Inclusive, Inc. v. W.P. Stewart & Co., No. 04-CV-604
(CSH) (DFE), 2008 WL 1777855, at *2 (S.D.N.Y. Apr. 16, 2008) (retaining jurisdiction over
sanctions claim notwithstanding attorneys’ withdrawal from case); cf. Gold v. The Last
Experience, No. 97-CV-1459 (JGK), 1999 WL 156005, at *4 (S.D.N.Y. Mar. 22, 1999)
(granting attorney’s motion to withdraw but noting that “[t]he withdrawal does not absolve [the
attorney] of liability for Rule 11 sanctions”).
The Clerk of Court is directed to terminate Docket Nos. 197 and 205 and to
terminate Larry R. Laycock, David R. Wright, Tyson K. Hottinger, and Bret D. Tingey as
attorneys on the docket. After the close of fact discovery, the Court will issue a separate order
directing the Clerk of Court to terminate Michael C. Van, Micah F. McBride, Robert T. Spjute,
and Gregory W. Schulz as attorneys.
SO ORDERED.
Dated: March 5, 2015
New York, New York

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