Starostenko v. UBS AG

Background

Plaintiffs were proceeding without paying filing fees and requested pro bono counsel, meaning a volunteer lawyer. The court had previously granted their requests to proceed without paying fees and confirmed that their financial circumstances had not improved. In their Second Amended Complaint, plaintiffs asserted securities-fraud claims against UBS (Bahamas) Ltd., which the opinion describes as a Bahamian corporation in liquidation proceedings, and UBS AG, which the opinion describes as its Swiss parent corporation.

The court had authorized an alternative method of serving UBS (Bahamas) Ltd., and plaintiffs told the court that they had served that entity by registered mail and email. No lawyer had appeared for UBS (Bahamas) Ltd., and the court did not know whether that entity would challenge service. A lawyer had appeared for UBS AG for the limited purpose of filing a motion to dismiss that included an improper-service argument.

Legal standard

Under 28 U.S.C. § 1915(e)(1), a court may request—but cannot compel—the services of a volunteer lawyer for a person who cannot afford counsel. Civil litigants do not have an automatic right to a court-provided lawyer, and courts do not have funds to pay counsel in ordinary civil cases. The court therefore applies the factors identified by the Court of Appeals for the Second Circuit, including whether the claim appears likely to have substance, the person’s ability to investigate and present the case, the complexity of the legal issues, the need for cross-examination, and whether a lawyer would likely produce a fairer result.

Court’s analysis

The court’s research suggested that UBS AG had not been properly served and that service on the Swiss corporation under the Hague Convention would be complicated. Plaintiffs would need to complete the required paperwork, translate their materials into German, and pay substantial service fees. The court had asked defense counsel either to accept service for UBS AG or to provide a New York address where the company could be served, but those efforts did not succeed.

The court concluded that plaintiffs’ service issues were likely to have substance and that the other factors supported requesting counsel. Although defense counsel had raised concerns about the merits of the securities-fraud claims, the court stated that it needed to resolve the service issues before addressing the merits. It determined that limited-purpose counsel could help produce a quicker and fairer result by clarifying the issues and organizing the necessary work.

Disposition and scope

The plaintiffs’ application for pro bono counsel was GRANTED to the extent that the court would request limited-purpose pro bono counsel to assist with service issues under the Hague Convention. The contemplated assistance included preparing the relevant materials, facilitating their translation, and arranging service on UBS AG under the Convention. The court did not appoint or fund a lawyer, and it stated that a volunteer might not be available. Counsel could separately ask the court to expand the representation. The court’s stay of discovery and suspension of further briefing remained in place pending a later order. The court did not rule on the merits of the securities-fraud claims.