Amazon.com, Inc. v. Personal Web Technologies, LLC

Background

Stubbs Alderton & Markiles, LLP (SAM) represented PersonalWeb Technologies, LLC in post-judgment proceedings concerning PersonalWeb’s patent-infringement claims against Amazon.com, Inc., Amazon Web Services, Inc., and Twitch Interactive, Inc. The court had previously entered judgment after finding on summary judgment that Amazon did not infringe PersonalWeb’s asserted patents. The judgment included more than $5.4 million in attorney fees, costs, and post-judgment interest.

In 2021, the court conditionally granted SAM’s first motion to withdraw, allowing withdrawal only after replacement counsel filed a notice of appearance. No replacement counsel appeared. SAM filed a second motion, arguing that continuing to represent PersonalWeb could violate California professional-conduct rules and California law. SAM relied on PersonalWeb’s failure to comply with discovery orders, possible future sanctions or contempt proceedings, and a California state-court receivership injunction involving PersonalWeb.

Amazon opposed withdrawal. It argued that withdrawal would prejudice Amazon’s efforts to collect its judgment and made several requests for relief against SAM.

Court’s reasoning

The court held that SAM had not shown that circumstances had changed enough to modify the earlier conditional withdrawal order. It rejected the idea that counsel could withdraw whenever a client failed to meet discovery obligations, noting that this could leave many parties without representation. The court stayed further motion practice before the magistrate judge handling post-judgment discovery while the representation issue was addressed.

The court also found that the state-court injunction expressly excluded PersonalWeb’s intellectual-property litigation, but said the scope of that exception and the division of authority between the receiver and PersonalWeb remained unclear. The court therefore required PersonalWeb to obtain written answers from the receiver about whether the receiver would retain counsel, whether the receiver would authorize and compensate counsel for PersonalWeb, and whether the receivership restricted PersonalWeb’s ability to comply with federal-court orders and make binding statements.

Order

The court CONDITIONALLY GRANTED SAM’s second motion to withdraw. SAM may withdraw upon either: (1) replacement counsel filing a notice of appearance for PersonalWeb; or (2) the court receiving the receiver’s answers to the required questions, along with effective contact information for PersonalWeb and its assurance that it will respond to the federal proceedings. The second condition requires express court approval and does not take effect automatically.

Within seven days, PersonalWeb was ordered to provide the receiver with the order and request written responses within 30 days. Within 30 days, PersonalWeb must file a status update stating whether it received the receiver’s responses. If the receiver does not respond, the court stated that it would communicate directly with the Los Angeles County Superior Court.

The court STRUCK Amazon’s requests for affirmative relief in its opposition and STAYED further motion practice before the magistrate judge handling post-judgment discovery for 45 days. This order addressed counsel withdrawal, representation, and related post-judgment procedures; it did not decide the patent-infringement merits.