Withdrawal Not As Easy As Expected
The second recent Court of International Trade decision of interest primarily to lawyers is United States v. International Trading Services, LLC and Julio Lorza. In this case, the lawyer representing International Trading Services and Mr. Lorza tried to withdraw from his representation of the corporate defendant while apparently continuing to represent the individual.
It is not very easy to fire a client in the middle of litigation. The CIT's Rule 75(d) requires that an appearance by an attorney may only withdrawn by order of the Court. It requires that the lawyer make a motion and that the motion be served on the client. Here, the corporate defendant dissolved pursuant to Florida law before counsel was hired by Mr. Lorza to represent both the defunct company and the individual. Counsel seeks to withdraw from representing the corporation on the entirely reasonable grounds that it no longer exists. Consequently, according to counsel, he has no corporate client to represent.
The United States opposed the motion.
Florida Bar rules state that a lawyer may only withdraw when "withdrawal can be accomplished without material adverse effect on the interests of the client" or for "other good cause." In other words, clients cannot be abandoned mid-matter without some really good reason. Also working against withdrawal is CIT Rule 75(b)(1). which requires that corporations appear in the Court represented by counsel.
What this comes down to is the question: If there is no corporation, why does it need representation? The answer is that under Florida law, ITS remains amendable to suit and is still part of the case. As such, it can only appear in Court through counsel. Without substitute counsel to represent the interests of the defunct company, withdrawal will result in adverse effects on ITS.
We should not confuse the question of whether ITS can continue as a defendant and whether Customs and Border Protection will be able to collect from it. Enforcing a judgment against a dissolved corporation raises numerous legal issues. The status of the company is controlled by state law. In some states, the dissolved corporation continues to exist for purposes of winding up and also for prosecuting or defending any actions. However, once the assets are distributed to creditors, there remains the question of whether Customs can collect from the presumably bloodless turnip.
Of course, as an individual, Mr. Lorza does not have the ability to simply dissolve. He still needs a lawyer.
It is not very easy to fire a client in the middle of litigation. The CIT's Rule 75(d) requires that an appearance by an attorney may only withdrawn by order of the Court. It requires that the lawyer make a motion and that the motion be served on the client. Here, the corporate defendant dissolved pursuant to Florida law before counsel was hired by Mr. Lorza to represent both the defunct company and the individual. Counsel seeks to withdraw from representing the corporation on the entirely reasonable grounds that it no longer exists. Consequently, according to counsel, he has no corporate client to represent.
The United States opposed the motion.
Florida Bar rules state that a lawyer may only withdraw when "withdrawal can be accomplished without material adverse effect on the interests of the client" or for "other good cause." In other words, clients cannot be abandoned mid-matter without some really good reason. Also working against withdrawal is CIT Rule 75(b)(1). which requires that corporations appear in the Court represented by counsel.
What this comes down to is the question: If there is no corporation, why does it need representation? The answer is that under Florida law, ITS remains amendable to suit and is still part of the case. As such, it can only appear in Court through counsel. Without substitute counsel to represent the interests of the defunct company, withdrawal will result in adverse effects on ITS.
We should not confuse the question of whether ITS can continue as a defendant and whether Customs and Border Protection will be able to collect from it. Enforcing a judgment against a dissolved corporation raises numerous legal issues. The status of the company is controlled by state law. In some states, the dissolved corporation continues to exist for purposes of winding up and also for prosecuting or defending any actions. However, once the assets are distributed to creditors, there remains the question of whether Customs can collect from the presumably bloodless turnip.
Of course, as an individual, Mr. Lorza does not have the ability to simply dissolve. He still needs a lawyer.
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