Mike Murphy's Enterprises, Inc. v. Fineline Industries, LLC

UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA MIKE MURPHY'S ENTERPRISES, INC., Case No. 1:16-cv-00784-JLT-SAB Plaintiff, ORDER GRANTING MOTION FOR 12 WITHDRAWAL AS COUNSEL FOR v. PLAINTIFF FINELINE INDUSTRIES, LLC, ORDER DIRECTING PLAINTIFF TO 14 ACQUIRE NEW REPRESENTATION AND Defendant. FILE A NOTICE OF APPEARANCE BY 15 NEW COUNSEL 16 (ECF No. 72) 17 DEADLINE: THIRTY DAYS 19 Currently before the Court is a motion by counsel Alan Heimlich to withdraw as counsel of record for Plaintiff Mike Murphy's Enterprises, Inc. (“Plaintiff”). (ECF No. 72.) Having considered Mr. Heimlich’s motion, the declaration attached thereto, the information presented by the parties at the February 21, 2024 hearing, as well as the Court’s file, the motion to withdraw as counsel shall be granted.

24 I.

25 BACKGROUND 26 On June 6, 2016, Plaintiff filed this action alleging patent infringement. (ECF No. 1.)

27 On July 18, 2016, Defendant filed a motion to dismiss. (ECF No. 5.) On August 5, 2016, then- assigned District Judge O’Neill granted Defendant’s motion with leave to amend. (ECF No. 13.)

1 On September 1, 2016, Plaintiff filed its first amended complaint. (ECF No. 15.) On September 15, 2016, Defendant filed its answer and counterclaim against Plaintiff alleging breach of patent license agreement. (ECF No. 16.) Plaintiff filed its answer on October 6, 2016. (ECF No. 19.)

4 On September 29, 2016, Defendant filed a motion to stay this action pending resolution of Plaintiff’s parallel state court breach of license action involving the same parties. (ECF No. 17.) On October 31, 2016, then-assigned District Judge O’Neill granted the stay. (ECF No. 26.)

7 On January 16, 2024, Mr. Heimlich filed a motion to withdraw as attorney for Plaintiff.

8 (ECF No. 22.) Defendant does not oppose the motion. The Court held a hearing in this matter on February 21, 2024 to clarify Mr. Heimlich’s motion and obtain information regarding the status of this stayed case. (ECF No. 75.) Alan Heimlich appeared via video on behalf of Plaintiff and Matthew Quall appeared via video on behalf of Defendant. (Id.) 12 II.

13 LEGAL STANDARD 14 Withdrawal of counsel is governed by the Rules of Professional Conduct of the State Bar of California, and the Local Rules for the United States District Court, Eastern District of California. See L.R. 182; L.S. ex rel. R.S. v. Panama Buena Vista Union Sch. Dist., No. 1:12- CV-00744 LJO, 2012 WL 3236743, at *1 (E.D. Cal. Aug. 6, 2012).

18 The California Rules of Professional Conduct provide that if the rules of a court require permission for an attorney to withdraw, the attorney may not withdraw from employment in a proceeding without the permission of such court. Cal. R. Prof. Conduct 1.16(c). In addition, counsel must take reasonable steps to avoid prejudicing the rights of the client, including providing notice, allowing time for the client to employ other counsel, and complying with applicable laws and rules. Cal. R. Prof. Conduct 1.16(d).

24 The Local Rules provide that an attorney who has appeared on behalf of a client may not withdraw, leaving the client in propria persona, without leave of court upon noticed motion, along with notice to the client and all other parties who have appeared. L.R. 182(d). The attorney is also required to “provide an affidavit stating the current or last known address or Likewise, California’s Rules of Court require notice of a motion to withdrawal to be served on the client and other parties who have appeared in the action. Cal. R. Court 3.1362(d).

3 It is within the Court’s discretion whether to grant withdrawal. L.S. ex rel. R.S., 2012 4 WL 3236743, at *2 (citing Canandaigua Wine Co., Inc. v. Moldauer, No. 1:02-CV-06599, 2009 5 U.S. Dist. LEXIS 4238, at *2 (E.D. Cal. Jan. 13, 2009)). “Factors the Court may consider include: (1) the reasons for withdrawal, (2) prejudice that may be caused to other litigants, (3) harm caused to the administration of justice, and (4) delay to the resolution of the case caused by withdrawal.” Id. Additionally, “[l]eave to withdraw may be granted subject to such appropriate conditions as the Court deems fit.” L.R. 182(d).

10 III.

11 DISCUSSION 12 Mr. Heimlich first moves to withdraw pursuant to California Rule of Professional Conduct 1.16(b)(4), which allows for withdrawal when a client's conduct “renders it unreasonably difficult for the lawyer to carry out the representation effectively. Mr. Heimlich asserts he can no longer represent Plaintiff effectively because Plaintiff has filed a malpractice lawsuit against Mr. Heimlich and his firm. (ECF No. 72-2 at 1-2.) Mr. Heimlich also moves to withdraw pursuant to California Rule of Professional Conduct 1.16(b)(5), which allows for withdrawal when “the client breaches a material term of an agreement with, or obligation to, the lawyer relating to the representation.” Mr. Heimlich contends Plaintiff has breached a material monetary term of an agreement and obligation to Mr. Heimlich. (ECF No. 72-2 at 2.) Finally, Mr. Heimlich moves to withdraw pursuant to California Rule of Professional Conduct 1.16(b)(6), which allows for withdrawal when the client “knowingly and freely assents to termination of the representation.” Mr. Heimlich proffers that Plaintiff has consented to Mr. Heimlich’s withdrawal. (ECF No. 72-2 at 2.)

25 Mr. Heimlich attempted to have Plaintiff execute a substitution of counsel, but Plaintiff indicated it has not obtained new counsel. (Id.) Mr. Heimlich represents that he served the motion on Plaintiff’s president, Michael Murphy of Mike Murphy’s Enterprises, Inc., located at served the motion on Plaintiff’s email address: [email protected]. (Id.) 2 Absent any evidence or argument to the contrary, the Court concludes Plaintiff’s malpractice lawsuit and its breach in a material term of its agreement with Mr. Heimlich have made it unreasonably difficult for Mr. Heimlich to proceed as counsel. Further, counsel for Defendant informed the Court that Defendant did not oppose the withdrawal and Mr. Heimlich represented that Plaintiff consents to the withdrawal. Given the case is stayed pending resolution of the state court action, granting the requested withdrawal would not cause any harm to other litigants or further delay the administration of justice. Accordingly, based upon the representations by Mr. Heimlich in both his motion and at the February 21, 2024 hearing, the Court finds sufficient grounds to allow for Mr. Heimlich to withdraw from representation in this matter.

12 However, as discussed at the hearing, granting the motion would leave Plaintiff, a corporation, without counsel. “[A] corporation may appear in the federal courts only through licensed counsel.” Rowland v. Cal. Men's Colony, 506 U.S. 194, 202 (1993). This Court’s Local Rule 183(a) specifically provides that “[a] corporation or other entity may appear only by an attorney.” Granting the instant motion would therefore place Plaintiff in immediate violation of Local Rule 183(a). In a joint status report filed subsequent to Mr. Heimlich’s motion to withdraw, the parties proffer that Plaintiff is represented by counsel in the parallel state court action. (ECF No. 74 at 2.) Mr. Heimlich represents that he contacted Plaintiff’s “new counsel,” Macy Wilens and Jeffrey Willens of Lakeshore Law Center, for an update on the state case, but “they refused to provide status of the case other than a cryptic ‘the matter is settling. A settlement agreement is being drafted.’ ” (Id.) Counsel for Defendant proffered at the hearing held on the instant motion that the state court action has recently resolved and one of the terms of the state court settlement is the dismissal of the instant matter. The Court advised that counsel for Plaintiff must make an appearance in the instant action due to Local Rule 183(a)’s bar on corporations appearing in propria persona and to file a stipulation of dismissal.

27 / / / 1 IV.

2 CONCLUSION AND ORDER 3 Accordingly, IT IS HEREBY ORDERED that: 4 1. Counsel Alan Heimlich’s motion to withdraw as counsel of record for Plaintiff 5 Mike Murphy's Enterprises, Inc. (ECF No. 74) is GRANTED; 6 2. Mr. Heimlich is ordered to serve a copy of this order on Plaintiff via email and 7 shall provide the Court with a declaration indicating proof of service; 8 3. The Clerk of the Court is DIRECTED to terminate Alan Heimlich of Heimlich 9 Law, PC as attorney of record for Plaintiff Mike Murphy's Enterprises, Inc. in this 10 action; 11 4. The Clerk of the Court is DIRECTED to serve this order on Plaintiff Mike 12 Murphy’s Enterprises, Inc. at its last known address, 30084 Red Barn Pl, Canyon 13 Lake, CA 92587; and 14 5. Because Plaintiff is a corporate entity and not an individual, it is barred from 15 appearing in propria persona. Plaintiff therefore has thirty (30) days from the 16 entry of this Order to obtain counsel and file a notice of appearance by new 17 counsel. Plaintiff is cautioned that if it fails to obtain new counsel and have 18 counsel file a notice of appearance in this Court within thirty (30) days, the 19 undersigned will recommend that this action be dismissed.

IT IS SO ORDERED. OF. nf ee | Dated: _February 23, 2024 ; UNITED STATES MAGISTRATE JUDGE