United States of America v. Parish Chemical et al

Filing 65

MEMORANDUM DECISION AND ORDERgranting 60 Motion to Withdraw as Attorney. Attorney Aaron R. Harris and Evan A. Schmutz withdrawn from case for Uintah Pharmaceutical and Parish Chemical Company. See order for further details. Signed by Magistrate Judge Paul M. Warner on 8/19/11. (jmr)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

UNITED STATES OF AMERICA,

MEMORANDUM DECISION AND
ORDER

Plaintiff,
v.
Case No. 2:09cv804
PARISH CHEMICAL COMPANY and
UINTAH PHARMACEUTICAL
CORPORATION,

District Judge Clark Waddoups

Defendants.

Magistrate Judge Paul M. Warner

This matter was referred to Magistrate Judge Paul M. Warner by District Judge Clark
Waddoups pursuant to 28 U.S.C. § 636(b)(1)(A).1 Before the court is a motion to withdraw as
counsel filed by Evan A. Schmutz and Aaron Harris from the law firm of Hill, Johnson &
Schmutz, LC, counsel for Parish Chemical Company and Uintah Pharmaceutical Corporation
(collectively, “Defendants”).2 On August 18, 2011, the court held a hearing on the motion. At
the hearing, Joshua Van Eaton and Jerel L. Ellington appeared by telephone, and Jared C.
Bennett appeared in person, all on behalf of the United States of America (“Government”).
Aaron Harris appeared on behalf of Defendants, and Dr. Wesley Parish, the principal of both
Defendants, was also present. Before the hearing, the court carefully considered the motion,

1

See docket no. 3.

2

See docket no. 60.

memoranda, and other materials submitted by the parties. After considering the arguments of
counsel and taking the motion under advisement, the court renders the following memorandum
decision and order.
Counsel for Defendants move this court for an order allowing them to withdraw from
representing Defendants on the grounds that Defendants are substantially behind in their
payment of legal fees. Counsel for Defendants further assert that Mr. Schmutz, the main partner
on the matter, is out of the country until 2014, and that there is no other partner at the firm
willing to take over this case. The Government opposes Defendants’ counsel’s motion until such
time as substitute counsel makes an appearance on Defendants’ behalf. The Government asserts
that due to the posture of this case, i.e., Preliminary Injunction violations and a likely
forthcoming motion for contempt proceedings, it would be difficult and potentially prejudicial to
it for this court to allow Defendants’ counsel to withdraw from this matter.
It is well established that, in order for a corporation to appear in court, it must be
represented by counsel. See Rowland v. California Men’s Colony, 506 U.S. 194, 201-02 (1993)
(“It has been the law for the better part of two centuries . . . that a corporation may appear in the
federal courts only through licensed counsel.”); Tal v. Hogan, 453 F.3d 1244, 1254 (10th Cir.
2006) (“It has been our long-standing rule that a corporation must be represented by an attorney
to appear in federal court.”). Likewise, civil rule 83-1.4(a)(2) of the United States District Court
for the District of Utah Rules of Practice (“local rules”) provides:
No attorney of record will be permitted to withdraw after an action has been set
for trial unless (i) the Motion to Withdraw as Counsel includes a certification
signed by a substituting attorney indicating that such attorney has been advised of
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the trial date and will be prepared to proceed with trial; (ii) the application
includes a certification signed by the moving attorney’s client indicating that the
party is prepared for trial as scheduled and is eligible pursuant to DUCivR 83-1.3
to appear pro se at trial; or (iii) good cause for withdrawal is shown, including
without limitation, with respect to any scheduling order then in effect.
DUCivR 83-1.4(a)(2). This matter is set for a 15-day jury trial beginning on February 6, 2012.3
Upon questioning by the court at the hearing, Dr. Parish indicated that while Defendants
are somewhat financially viable companies, the Preliminary Injunction required them to cease
production and prohibited them from filling any further purchase orders. As a result, Dr. Parish
stated, Defendants have laid off their production employees. However, Dr. Parish further
indicated that Defendants continue to employ workers and that they could pay the clean up costs
if Clean Harbors, a hazardous waste disposal company, would accept their business. According
to Dr. Parish, Clean Harbors has a monopoly on the hazardous waste disposal business in the
region, Clean Harbors has refused to conduct business with Defendants, and there are no other
disposal options within a 1000-mile radius. Dr. Parish also stated that he had made some efforts
to obtain alternative counsel and would continue to do so.
In response, Mr. Van Eaton stated that one of the Government’s expert witnesses opined
that Defendants are in serious financial distress. Mr. Van Eaton also stated that Defendants have
other hazardous waste disposal options but cannot afford to pursue them.
The court concludes that counsel for Defendants have demonstrated “good cause for
withdrawal” under local rule 83-1.4(a)(2)(iii). DUCivR 83-1.4(a)(2)(iii). Mr. Harris stated that
he and Mr. Schmutz have had numerous conversations with Dr. Parish regarding past due
3

See docket no. 15.
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amounts and that Dr. Parish is either unwilling or unable to pay for legal services rendered.
Accordingly, the Defendants’ motion is GRANTED. As such, Mr. Schmutz, Mr. Harris, and the
law firm of Hill, Johnson & Schmutz are permitted to withdraw as counsel for Defendants.
The court further orders that Defendants, through Dr. Parish, have until September 9,
2011, to secure alternate counsel. New counsel must file a notice of appearance by that date.
Should Defendants fail to secure alternate counsel due to financial inability, they are ordered to
show cause why they have not filed for bankruptcy protection by September 9, 2011. Likewise,
failure to secure alternate counsel for any other reason may result in sanctions pursuant to rule
16(f)(1) of the Federal Rules of Civil Procedure. See Fed. R. Civ. P. 16(f)(1); see also DUCivR
83-1.4(a)(1)(B).
IT IS SO ORDERED.
DATED this 19th day of August, 2011.
BY THE COURT:

PAUL M. WARNER
United States Magistrate Judge

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