KCI USA, Inc. v. Healthcare Essentials, Inc.

Filing 358

Memorandum of Opinion and Order For the reasons set forth herein, Attorneys James S. Gentile and Rhys B. Cartwright-Jones' Motion to Withdraw as counsel for Defendants Healthcare Essentials, Inc., Healthcare Essentials, LLC, Healthcare Essentials Medical Devices, LLC, RT Acquisition, Inc., and Ryan H. Tennebar, and Counter-Claimant Healthcare Essentials, LLC, ECF No. 356 , is denied. Judge Benita Y. Pearson on 3/21/2018. (JLG)

PEARSON, J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

KCI USA, INC.,
Plaintiff,
v.
HEALTHCARE ESSENTIALS, INC., et al.,
Defendants.

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CASE NO. 1:14CV549

JUDGE BENITA Y. PEARSON

MEMORANDUM OF OPINION AND
ORDER [Resolving ECF No. 356]

I.
Pending before the Court is a motion to withdraw (ECF No. 356) filed by Attorneys
James S. Gentile and Rhys B. Cartwright-Jones, counsel for Defendants Healthcare Essentials,
Inc., Healthcare Essentials, LLC, Healthcare Essentials Medical Devices, LLC, RT Acquisition,
Inc., and Ryan H. Tennebar, and Counter-Claimant Healthcare Essentials, LLC. As the basis for
their motion, Attorneys James S. Gentile and Rhys B. Cartwright-Jones state that they seek to
withdraw as counsel because “[D]efendant Ryan Tennebar and his business entities have no
source of revenue from which to pay legal fees.” ECF No. 356 at PageID#: 6612. Plaintiff filed
an opposition. ECF No. 357. For the reasons provided below, the motion (ECF No. 356) is
denied.

II.

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Issues regarding attorney withdrawal are committed to the court’s discretion. See
Brandon v. Blech, 560 F.3d 536, 537 (6th Cir. 2009). When ruling on a motion to withdraw, the
court looks to the rules governing attorneys’ professional conduct for guidance. See Brandon,
560 F.3d at 537

38. Under Rule 83.9 of the Local Rules for the United States District Court for

the Northern District of Ohio, “[t]he attorney of record may not withdraw, . . . without first
providing written notice to the client and all other parties and obtaining leave of Court.”
Similarly, the Ohio Rules of Professional Conduct, which also govern in this proceeding, provide
that an attorney may withdraw from representation when “the representation will result in an
unreasonable financial burden on the lawyer.” Ohio Prof. Cond. Rule 1.16(b)(6); Ohio Fed. Dist.
Ct. (N.D.), Civ, LR Rule 83.7.
III.
According to Counsel’s representations to the Court, “[D]efendant Ryan Tennebar and
his business entities have no source of revenue from which to pay legal fees. In addition,
[D]efendant Ryan Tennebar is currently in federal prison, serving a four-year prison term, and is
without funds. [See, Case No. 1:17-cr-00176-JRA, R.E. 38 (Order of Indigence), PageID#98;
R.E. 33 (Sen.Tr.), PageID#:155

182.].” ECF No. 356 at PageID#: 6612. Defendants inability

to fulfill their financial obligation to Counsel qualifies as “an unreasonable financial burden” on
Counsel under Ohio Rule 1.16(b)(6). And, given that Counsel has indicated its intention to
withdraw by filing the instant motion and informing its clients through written communication,
Counsel has complied with the notice requirements of both Local Rule 83.9 and Rule 1.16(b)(6).

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ECF No. 356 at PageID#: 6612

13. Therefore, it appears counsel has laid a foundation for

withdrawal.
The analysis does not, however, end here. The Sixth Circuit has held that satisfying the
rules of professional misconduct does not guarantee a right to withdraw. See Brandon, 560 F.3d
at 538. There are “several occasions when a district court ought to prohibit counsel from
withdrawing” that include, a showing that withdrawal would be severely prejudicial to any party.
Brandon, 560 F.3d at 538 (citing Fid. Nat’l Title Ins. Co., v. Intercounty Nat’l Title Ins. Co., 310
F.3d 537, 541 (7th Cir. 2002)).
The Court finds that Counsel’s withdrawal would severely burden the litigants in this
lawsuit. In federal court, a corporation must be represented by counsel, and this requirement
cannot be waived. See Rowland v. California Men’s Colony, 506 U.S. 194, 202, 113 S. Ct. 716.
121 L.Ed.2d 656 (1993) (holding that all artificial entities such as corporations, partnerships, or
associations, may appear in federal court only through a licensed attorney); Doherty v. Am.
Motors Corp., 728 F.2d 334, 340 (6th Cir. 1984) (“The rule of this circuit is that a corporation
cannot appear in federal court except through an attorney.”). This rule also applies to limited
liability corporations. See Ward v. Intercontinental Mortg. Group, LLC, 2012 WL 3025098, at
*1 (S.D. Ohio July 24, 2012) (limited liability corporations cannot prosecute or defend in a
federal court except through an attorney) (citing Rowland, 506 U.S. 194 at 201). See also United
States v. Hagerman, 545 F.3d 579, 581

82 (7th Cir.2008) (limited liability corporation must

appear through counsel). Therefore, given that several of the Defendants represented by
Attorneys Gentile and Cartwright-Jones are corporate entities, Counsel’s withdrawal would
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inevitably stifle the parties’ ability to participate in the litigation. See Meznarich v. Morgan
Waldron Ins. Mgmt. LLC, 2012 WL 487963, at * 4 (N.D. Ohio Feb. 14, 2012) (denying counsel’s
motion to withdraw because it would unfairly prejudice the party’s ability to participate in the
scheduled litigation efforts). As to the non-corporate Defendant, Ryan Tennebar, to whom this
rule does not apply, the Court lacks any indication that Defendant Ryan Tennebar possesses the
knowledge or ability to prepare his case pro se or effectively represent himself during the
remainder of the lawsuit.
Additionally, the current stage of litigation suggests that Counsel’s withdrawal will likely
have an irreparable and unavoidable prejudicial effect on Plaintiff. See Meznarich, 2012 WL
487963, at * 4 (citing Buschmeier v. G. & G Invs., Inc., 222 F. App’x 160, 164 (3d Cir. 2007)
(“One factor to consider in any prejudice analysis is the stage of litigation.”)). As Plaintiff
highlights in its opposition brief, withdrawal by counsel at this juncture, would unfairly prejudice
the parties because the case has been ongoing for a substantial length of time and is at a critical
stage with the pending motions for case-terminating sanctions. See ECF No. 357 at PageID#:
6614

15. As such, the judicial economy and efficiency would be negatively impacted by any

further delay in the case. Therefore, because the high risk of substantial prejudice outweighs the
policy reasons to allow withdrawal from these proceedings without the replacement of counsel,
Counsel’s motion is denied.

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IV.
For the reasons stated above, Counsel’s motion to withdraw (ECF No. 356) is denied.

IT IS SO ORDERED.

March 21, 2018
Date

/s/ Benita Y. Pearson
Benita Y. Pearson
United States District Judge

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