Cashmarq Global Consultants, Inc. v. Commissioner of Internal Revenue Service
- William Orrick
- 3:18-cv-04069
- U.S. District Court · Northern District of California
- 3
Judge Orrick dismissed Cashmarq v. Commissioner with prejudice after Cashmarq failed to prosecute, comply with discovery, and obtain new counsel.
Cashmarq Global Consultants, Inc.; Moskowitz LLP; and the Commissioner of Internal Revenue Service. The case was dismissed with prejudice, and Cashmarq’s underlying tax-related claim was not decided on the merits.
What happened
In Cashmarq Global Consultants, Inc. v. Commissioner of Internal Revenue Service, Cashmarq alleged that the Internal Revenue Service improperly took money from its bank account to recover tax liabilities owed by one of its shareholders.
Cashmarq stopped responding to discovery, ended its lawyers’ representation, and did not obtain new counsel despite several extensions and warnings. Because a corporation could not proceed in federal court without a lawyer, the case remained at a standstill.
Judge William H. Orrick dismissed the case with prejudice for failure to prosecute, explaining that the delays prejudiced the defendant and that lesser sanctions would not work. He granted Moskowitz LLP’s motion to withdraw and terminated the parties’ proposed schedule change as moot.
The detailed version
- Cashmarq Global Consultants, Inc. v. Commissioner of Internal Revenue Service · No. 3:18-cv-04069
- William Orrick
- Sept. 18, 2019
Background
Cashmarq Global Consultants, Inc. filed the case alleging that the Internal Revenue Service improperly levied funds from its bank account to recover tax liabilities of one of its shareholders.
Failure to Prosecute
Cashmarq told its counsel on June 7, 2019, that it was ending the representation. The law firm later filed an unopposed motion to withdraw. The court had also found that Cashmarq failed to respond to a March 18, 2019 document demand and that its shareholders failed to respond to subpoenas for documents dated May 17, 2019.
The court explained that a corporation could not proceed in federal court without counsel. It ordered a Cashmarq officer to explain under penalty of perjury why the discovery had not been provided, identify new counsel, and explain how Cashmarq would comply with the existing schedule or the parties’ proposed schedule. The court warned that failure to respond would result in dismissal with prejudice.
Cashmarq said it hoped to retain a lawyer, but no new counsel appeared at the September 4 hearing. The court gave Cashmarq another opportunity and ordered new counsel to enter an appearance by September 9 and begin active representation by the next case-management conference. No appearance was entered, and the case remained at a standstill. The government reported that the attorney Cashmarq intended to retain had not actually been retained.
Ruling
Judge William H. Orrick dismissed the case with prejudice for failure to prosecute. The court said that Cashmarq had failed for nearly five months to meet its discovery obligations or otherwise prosecute the case, that the fact-discovery deadline had passed, and that the defendant had been hindered from filing a dispositive motion or otherwise resolving the case on the merits. The court also concluded that lesser sanctions were not appropriate or likely to work.
The motion to withdraw filed by Moskowitz LLP was granted. The stipulation to continue the case schedule was terminated as moot.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.