Lawyers Cannot Always Withdraw in Federal Court

Originally published by Thomas J. Crane.

Filing suit in federal court is different. Federal court differs from state court in some key respects. One of these respects concerns attorney withdrawal. In state court, most judges would quickly grant a motion to withdraw. Not so in federal court. In GDC Technics, Ltd. v. Grace, No. 15-CV-488-ML, the Defendant’s counsel asked to withdraw. The motion to withdraw indicates the law firm would suffer financial hardship if the motion was not granted. That assertion suggests the firm was not being paid by the Defendant. The Plaintiff opposed the motion because 1) the trial date was about two months away, and 2) there was a corporate co-Defendant. J.R.G. Design, Inc. cannot appear in court without an attorney. Since Mr. Grace has not paid his current lawyer, argued the Plaintiff, then it is unlikely he would find a new lawyer. Thus, the corporate Defendant would have to be dismissed from the lawsuit, or a default judgment would have to be entered against it.

The Judge agreed. In a Feb. 10, 2017 decision, the court found that if granted, the status of the corporate defendant would be very problematic. Mr. Greace himself could appear in court pro se, but the corporate defendant could not. The court noted the law firm had represented the Defendant for well over a year. It seemed unlikely that the Defendant would be able to hire new counsel now.

A couple of months later, the same law firm, the Snell Law Firm, asked again to withdraw, citing some $44,000 in unpaid bills. The law firm noted that the client appeared to have funds with which to hire new counsel. The claims against Mr. Grace had been dismissed. The only remaining Defendant was J.R.G. Design. And, noted the Snell law firm, the parties had entered into a Joint Notice of Settlement. All the corporate Defendant had to do was settle the case. And again, the Plaintiff opposed the motion. The Court agreed with the Plaintiff. Finalizing a settlement agreement and transferring the disputed property would not require much time from the law firm. The Court did note that the conduct of Mr. Grace did appear to have caused additional work for his lawyers. So, if the remaining work became too much, the Court agreed it would re-hear the motion to withdraw. The Court noted that the Plaintiff had filed a motion seeking sanctions due to conduct of Mr. Grace. The Court seemed to be signaling its willingness to release the law firm if Mr. Grace mis-behaved.

That is the different between state and federal court. Bad behavior will have consequences much sooner in federal court. Another lesson appears in this decision, playing nice counts in lawsuits.

 

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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