Court Opinion

ID: 2993687
Source: CourtListenerOpinion
Date Created: 2015-09-23 20:02:24.765791+00
Date Added: 2024-06-11T11:45:18.749742
License: Public Domain

Slip Op. 15-106

                 UNITED STATES COURT OF INTERNATIONAL TRADE

 UNITED STATES,

        Plaintiff,

 v.                                            Before: Mark A. Barnett, Judge

 INTERNATIONAL TRADING SERVICES,               Court No. 12-00135
 LLC AND JULIO LORZA,

        Defendants.

                                 OPINION AND ORDER

[The court denies Defense Counsel’s Motion to Withdraw as Counsel for Defendant
International Trading Services, LLC.]

                                                         Dated: September 23, 2015

Joshua Ethan Kurland, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington D.C., for plaintiff. With him on the brief were
Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Jeanne E. Davidson,
Director, and Patricia M. McCarthy, Assistant Director.

Peter Stanwood Herrick, Peter S. Herrick, P.A. of St. Petersburg, FL, for defendant.

       Barnett, Judge: Pending before this court is counsel’s motion to withdraw as

attorney of record for Defendant International Trading Services, LLC (“Withdrawal

Motion”), pursuant to Rule 75(d) of the Rules of the Court of International Trade (“CIT”).

Mot. to Withdraw as Counsel for Def. Int’l Trading Servs., LLC (“Withdrawal Mot.”), ECF

No. 24. Plaintiff timely filed a response opposing the Withdrawal Motion (“Plaintiff’s

Response”). Pl.’s Resp. to Defense Counsel’s Mot. to Withdraw (“Pl.’s Resp.”), ECF

No. 26. For the reasons discussed below, the court denies the Withdrawal Motion.
Court No. 12-00135                                                                   Page 2

                              BACKGROUND AND ARGUMENTS

       The current action was filed by Plaintiff United States (“Plaintiff” or “United

States”) against two defendants, International Trading Services, LLC (“ITS”) and Mr.

Julio Lorza (Managing Member and President/CEO of ITS, prior to its dissolution). See

Compl. ¶ 4, ECF No. 2. This case commenced on May 17, 2012 when Plaintiff filed its

Complaint in this court. See, generally, Compl. Defendants Mr. Lorza and ITS filed

their Answer through counsel, Mr. Peter S. Herrick (“Defense Counsel”) on September

11, 2012. See, generally, Answer, ECF No. 4. On August 10, 2015, Mr. Herrick filed

his Withdrawal Motion as attorney of record for Defendant ITS, citing the non-existence

of the corporation as his basis for seeking withdrawal. Withdrawal Mot. ¶¶ 4-5. Mr.

Herrick does not seek to withdraw as counsel for Defendant Julio Lorza. Plaintiff filed a

response to the Withdrawal Motion on August 21, 2015. See, generally, Pl.’s Resp.

       ITS is a Florida corporation that was administratively dissolved by the Florida

Department of State in December 2009. Compl. ¶ 3. Defendants admitted to this fact

in their Answer. Answer ¶ 3. Defendant Julio Lorza retained the services of Mr. Herrick

to represent Mr. Lorza as an individual and to represent ITS, the already defunct

company. Withdrawal Mot. ¶ 3. Mr. Herrick now seeks to withdraw for the reason that

Defendant ITS no longer exists as a corporation and, as such, “there is no entity to

represent.” Id. ¶ 5. Stating that “government counsel admitted that International

Trading Services, LLC had ceased to exist long before the commencement of this

litigation,” counsel notes that ITS “has not only ceased to exist, it has not been
Court No. 12-00135                                                                   Page 3

resurrected.” Id. ¶¶ 2, 4. As such, Mr. Herrick argues that withdrawal can be affected

“without material adverse effect on the interests of the government.” Id. ¶ 8.

       Plaintiff opposes the Withdrawal Motion, arguing that Mr. Herrick has not shown

good cause for withdrawal as “there has been no change in circumstances that would

make defense counsel’s withdrawal—essentially rendering ITS unable to proceed with

litigation—appropriate.” Pl.’s Resp. at 1. Plaintiff notes that ITS is amenable to suit

even as a dissolved corporation, and as a corporation it cannot participate in this action

except through counsel. Pl.’s Resp. at 3. As such, Plaintiff argues that the Withdrawal

Motion does not meet the burden of showing either that withdrawal can be

accomplished without material adverse effect on the interests of ITS or that other good

cause exists to support withdrawal.

                                       LEGAL STANDARD

       Pursuant to CIT Rule 75(d), “the appearance of an attorney of record may be

withdrawn only by order of the court.” USCIT R. 75(d). Further, under Rule 4-1.16(b) of

the Rules Regulating the Florida Bar, an attorney’s request to withdraw may be granted

upon showing, in relevant part, that such “withdrawal can be accomplished without

material adverse effect on the interests of the client” or for “other good cause.” FLA. ST.

BAR R. 4-1.16(b). The “attorney seeking to withdraw has the burden of establishing one

of these legitimate bases for withdrawal.” In re Davis, 258 B.R. 510, 513 (Bankr. M.D.

Fla. 2001) (internal citations omitted). In In re Davis, the court explains that the rules

require an attorney to seek leave of court to withdraw in order to ensure “that the client

is protected and not abandoned in the matter” and so that the withdrawal does not have
Court No. 12-00135                                                                   Page 4

an adverse effect on the “orderly administration of the court” and its calendar. In re

Davis, 258 B.R. at 513.

       Under CIT Rule 75(b)(1), a corporation may only appear before the court through

an attorney authorized to practice before the court. USCIT R. 75(b)(1)); see Lady Kelly,

Inc. v. U.S. Sec’y of Agric., 30 CIT 82, 83, 414 F. Supp. 2d 1298, 1299 (2006) (“The rule

is well established that a corporation must always appear through counsel.”). Thus,

when the party being represented by the attorney seeking to withdraw is a corporation,

there is a further interest in ensuring the party’s ability to continue with the proceedings.

See Highway 46 Holdings, LLC v. Quantified Mktg. Group, LLC, No. 608-CV-674-ORL-

28DAB, 2008 WL 4820070, at *1 (M.D. Fla. Nov. 3, 2008) (Mag. J.). Granting

withdrawal in such cases can effectively “[render] Defendant voiceless” in the

proceeding, and if this is not “timely remedied” may result in “default for the

corporation.” Highway Holdings, 2008 WL 4820070, at *1-2. As such, “the

consequences of withdrawal are severe,” and absent “compelling ethical reasons

prohibiting representation,” the court is within its discretion to deny the motion. Id.

       Finally, under Florida law, a “dissolved corporation continues its corporate

existence” and dissolution “does not . . . [p]revent commencement of a proceeding by or

against the corporation in its corporate name.” FLA. STAT. § 607.1405(1) and (2)(e).

                                           DISCUSSION

       As the moving party, Defense Counsel has the burden to show that withdrawal

can be accomplished without material adverse effect on the interests of his client ITS.

See Sands v, Moron, 339 So. 2d 307, 307 (Fla. 3rd DCA 1976); see also FLA. ST. BAR
Court No. 12-00135                                                                    Page 5
Rawle 4-1.16(b). This burden has not been met. Mr. Herrick simply states that “withdrawal

can be accomplished without material adverse effects on the interests of the

government” and does not address the adverse effects on the interests of his own

client, ITS. Withdrawal Mot. ¶ 8. Mr. Herrick claims that because ITS has been

dissolved, there is no entity to represent. Id. ¶ 5. However, under Florida law, even

though ITS has ceased operations as a corporation, it remains amenable to suit. At this

time, ITS continues to be part of the ongoing proceedings before this court, and as a

corporate entity, ITS can only appear before this court through counsel. USCIT R.

75(b)(1). Mr. Herrick’s motion does not identify substitute counsel or otherwise show

how ITS will continue in the present proceeding if his motion is granted. Thus, allowing

Mr. Herrick to withdraw as counsel for ITS will preclude this defendant from further

appearances before the court, at least until substitute counsel can be identified, causing

material adverse effects to interests of ITC and the orderly administration of this

proceeding, which commenced more than three years ago, before the court.

       Defense Counsel also failed to demonstrate other “good cause” in support of his

motion. See FLA. ST. BAR R. 4-1.16(b). Mr. Herrick points to the non-continuing nature

of ITS as his only reason for withdrawing representation. Withdrawal Mot. ¶¶ 4-5.

However, it is clear from the present proceedings that Mr. Herrick agreed to represent,

and entered an appearance on behalf of, ITS well after the administrative dissolution of

the corporation. Id. ¶ 3. As such, he did so with knowledge of the corporation’s non-

continuing status and now has a responsibility to see the defendant corporation through

the proceedings, or at least until substitute counsel is identified. Mr. Herrick does not
Court No. 12-00135                                                               Page 6

raise any other arguments supporting his motion to withdraw and therefore has not met

his burden in showing there is good cause allowing him to withdraw as counsel.

                                 CONCLUSION AND ORDER

       Defense Counsel has not met the burden for showing that his Withdrawal Motion

can be granted without adverse material effects on Defendant ITS and has not shown

any other good cause in support of his request for withdrawal. Upon consideration of

Mr. Herrick’s Motion to Withdraw as Counsel for Defendant International Trading

Services, LLC (ECF No. 24) and the response thereto (ECF No. 26), and upon due

deliberation, it is hereby

       ORDERED that Defense Counsel’s Motion to Withdraw as Counsel for

Defendant International Trading Services, LLC is DENIED.

       Parties are advised that the Scheduling Order, as amended (ECF No. 19, 21,

and 23), and all dates established therein, remain in effect.

                                                 /s/   Mark A. Barnett
                                                 Mark A. Barnett, Judge

Dated: September 23, 2015
      New York, New York