City Merchandise Inc. v. Tian Tian Trading Inc.

Background

Curt Donald Schmidt, counsel for Tian Tian Trading Inc. and Weiwei Lin, filed a second motion asking to withdraw from representing the defendants. The court had previously denied Schmidt’s first motion without prejudice because its redactions were too broad. The court then directed Schmidt either to file a renewed motion with narrower redactions or to report whether the defendants had obtained substitute counsel. The court later granted the related motion to seal.

In the renewed motion, Schmidt stated that the defendants had ended the attorney-client relationship, that disagreements over defense strategy were insurmountable, and that communication between counsel and the defendants had broken down. He also stated that he learned that no further representation was authorized and that Weiwei Lin, whom he described as a representative of Tian Tian Trading Inc., acknowledged choosing to end the relationship.

Arguments and legal standard

City Merchandise opposed withdrawal. It argued that Schmidt had not complied with Local Rule 1.4 because he did not describe the case’s procedural posture or state whether he was asserting a retaining or charging lien. City Merchandise also identified unresolved disclosure and discovery failures and argued that Schmidt had not complied with the court’s direction to address Tian Tian Trading Inc.’s inability to proceed without counsel and to confirm that he had discussed withdrawal with Weiwei Lin.

Local Rule 1.4 permits an attorney to withdraw only by court order and only after showing satisfactory reasons for withdrawal and information about the case’s posture and any retaining or charging lien. The court explained that withdrawal decisions generally consider the reasons for withdrawal and the effect on the timing and progress of the case. It also explained that termination of the attorney-client relationship is a mandatory ground for withdrawal under the New York Rules of Professional Conduct, and that serious disagreements and a breakdown in communication may also justify withdrawal.

Court’s analysis

The court agreed that Schmidt had not complied with Local Rule 1.4 because his motion did not address the case’s procedural posture or any retaining or charging lien. Nevertheless, the court exercised its authority to address the motion rather than deny it again and cause additional delay.

The court found sufficient reasons to permit withdrawal. First, it found that the defendants had terminated the attorney-client relationship. Second, it accepted Schmidt’s statements about the serious disagreements over case strategy and the breakdown in communication. The court reasoned that requiring Schmidt to continue representing defendants after the relationship had ended could force him to violate ethical duties or face sanctions.

The court also found that withdrawal would not unduly harm the judicial system or the case’s progress. Although discovery deadlines had passed, the court noted that discovery issues remained unresolved and that the case was not close to being ready for trial. The court therefore concluded that the reasons for withdrawal outweighed the potential effect on the case’s progress.

Disposition

The court GRANTS the Motion to Withdraw. It requested that the Clerk close docket entries 25, 26, 32, and 33. The court reminded corporate defendant Tian Tian Trading Inc. that it cannot proceed without counsel and ordered substitute counsel to appear by February 12, 2021. The opinion does not decide the underlying claims or the parties’ discovery disputes.