United States District Court, D. Oregon, Medford Division
D. CLARKE United States Magistrate Judge.
the Federal Trade Commission ("FTC") brings claims
against more than thirty defendants, alleging claims under
section 5(a) and section 13(b) the Federal Trade Commission
Act, 15 U.S.C. §§ 45(a), 53(b), to obtain
preliminary and permanent injunctive relief, rescission or
reformation of contracts, restitution, the refund of monies
paid, disgorgement of ill-gotten monies and other equitable
relief. The FTC claims that the defendants, who are a large
number of corporate entities, groups, and individuals,
engaged in a nationwide campaign using misrepresentations to
solicit newspaper renewals and new subscriptions from
consumers. The case comes before the Court on a motion to
withdraw filed by an attorney for a group of the defendants
(#112), and two motions to stay the case pending a grand jury
investigation into one or more of the defendants (#111,
#113). For the reasons below, the motion to withdraw is
granted, subject to certain conditions. The motions to stay
are denied. Additionally, the motion for disqualification of
counsel (#96) is denied as moot.
Attorney Lennon's Motion to Withdraw is Granted with
Oregon District Court Local Rule 83-11, an attorney may
withdraw as counsel of record only with leave of the court.
In considering a motion to withdraw from representation,
courts consider a variety of factors, including: (1) the
reasons why withdrawal is sought; (2) the prejudice
withdrawal may cause to other litigants; (3) the harm
withdrawal might cause to the administration of justice; and
(4) the degree to which withdrawal will delay the resolution
of the case. Sidbury v. Boeing, 2015 WL 11714358, at
*2 (W.D. Wash. June 24, 2015) (citing Bohnert v.
Burke, 2010 WL 5067695 (D. Ariz. 2010)).
of this multi-factor test leads the Court to conclude that
withdrawal should be allowed, with conditions. First, the
reasons given for withdrawal are serious. Attorney David P.
Lennon, counsel of record for seven individual defendants and
over twenty corporate defendants, moves to withdraw based on
potential or actual conflicts of interest arising from Mr.
Lennon's connections and interactions with the defendants
in this case - both his clients and other co-defendants.
Co-defendants Dennis Simpson and Reality Kats, LLC, are
former clients of Lennon, and they have filed a third-party
complaint against Lennon in this action, as well as a motion
to disqualify him as counsel. Additionally, Mr. Lennon
submits that these defendants have filed a bar complaint in
the State of Oregon, a lawsuit in a California court, and
most recently a new action in the Jackson County Circuit
the only prejudice to the other litigants will be mitigated
by the conditions, as discussed below. Third, any harm to the
administration of justice will also be remedied by the
conditions. Fourth, the Court is hopeful that the conditions
will prevent any substantial delay that would otherwise be
caused by immediate withdrawal.
pointed out by Plaintiff FTC, Mr. Lennon has been the sole
counsel for seven individual and twenty three corporate
defendants for over nine months. He has worked with these
parties for years, and he is familiar with the underlying
conduct at issue, the structure of the corporate entities,
the relationships among the defendants, and the location of
key documents subject to discovery. The Court agrees that the
conditions imposed on Attorney Lennon's withdrawal will
help to minimize the inevitable delay that will be result as
his clients seek representation, and the potential halting of
the process altogether if the corporate defendants are unable
to retain counsel. Mr. Lennon has already agreed to several
of these conditions in his Reply brief, but the Court will
include all of them here for purposes of clarity.
Lennon will continue to temporarily serve as counsel, and:
a. He will file amended affirmative responses on behalf of
his clients, as ordered by the Court on December 21, 2016
(#94), which were due on January 27, 2017. This shall be
filed no later than March 3, 2017.
b. He will respond to the requests for production of
documents served on his clients, which are due March 17. As
indicated in his Reply Brief, Mr. Lennon is aware of the
existence and the location of the Company Group
Defendants' documents and copies of hard drives. The
Court sees no reason why he cannot make these available to
the Plaintiff for copying and inspection before he withdraws.
c. If he has not already done so, Mr. Lennon will immediately
provide the initial disclosures for his clients, which were
due February 17.
Lennon will submit an affidavit to the Court and provide
satisfactory assurance that he has complied with the
conditions above. If the Court approves his submission, he
will be allowed to withdraw immediately.