case 1:16-cv-01318-gbd-bcm document 255 filed...

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

JOINT STOCK COMPANY CHANNEL ONE RUSSIA WORLDWIDE, et al. ,

Plaintiffs,

-against-

INFOMIR LLC, et al .,

Defendants.

USDCSDNY 'DOCUMENT ;ELE(::TRONiCALLY Fl·LED ·ooc#:

~~~~~~~~-

DATE FILED: 1 I 9/ 17 16-CV -1318 ( G . . .

ORDER

BARBARA MOSES, United States Magistrate Judge.

Before the Court is a motion by Alan P. Fraade, Esq., made pursuant to Local Civil Rule

1.4, for leave to withdraw as counsel for defendant Panorama Alliance LP (Panorama) on the

ground that, since losing a motion to dismiss for lack of personal jurisdiction, Panorama has

become "unresponsive" and is "no longer cooperating" with its attorney, putting Fraade in "an

untenable position." Fraade Deel., filed April 4, 2017 (Dkt. No. 209), ~ 11 ; see also Panorama

Mem. in Supp., filed April 4, 2017 (Dkt. No. 210), at 2 (citing a "breakdown in communication"

as a factor warranting withdrawal).

Neither plaintiffs nor Panorama oppose the motion.1 However, plaintiffs ask that the

withdrawal be subject to two conditions: (1) that the Court retain jurisdiction over Fraade and his

firm, the Mintz Fraade Law Firm, P.C (Mintz Fraade) for the purposes of plaintiffs ' two pending

sanctions motions; and (2) that Fraade produce various documents and sit for deposition. See Pl.

Mem. in Resp., filed April 18, 2017 (Dkt. No. 233), at 5-6; Pl. Prop. Order, filed April 18, 2017

1 By Order dated March 30, 2017 (Dkt. No. 204), the Court provided Panorama with instructions concerning when and how it could respond to its attorney's withdrawal motion should it wish to do so. Because Fraade failed to serve the March 30 Order on his client until April 28, 2017 (see Dkt. No. 246), the Court issued another Order, dated May 1, 2017 (Dkt. No. 247), extending the time for Panorama' s response through May 8, 201 7. Attorney Fraade then filed a proof of service attesting that he served the May 1 Order on Panorama that same day by Federal Express and by email. (See Dkt. No. 248.) The Court has not received any submission from Panorama.

Case 1:16-cv-01318-GBD-BCM Document 255 Filed 05/09/17 of 16

(Dkt. No. 233-1). For the reasons that follow, the withdrawal motion will be GRANTED subject

to the more limited conditions described below.

BACKGROUND2

Plaintiffs are a group of Russian television broadcasters suing to redress what they

characterize as the "pirating" and resale of their programming to consumers in the United States,

over the internet, without authorization or license fees . Defendant Panorama allegedly sells

subscriptions to plaintiffs' programming through its website at www.mypanorama.tv (the Website)

to Russian-speaking customers in New York and elsewhere. First Am. Compl. (Dkt. No. 211)

i1i139, 42, 96.

A. Plaintiffs Attempt Service and Move for a Default Judgment

In their original Complaint, plaintiffs alleged that Panorama operated out of premises at

1702 Avenue Z, Brooklyn, New York (the Avenue Z Address), which is where they attempted

service of process on March 16, 2016. See Compl. (Dkt. No. 1) i157; Aff. of Service (Dkt. No. 40)

at 1. When Panorama did not answer or otherwise respond to the Complaint, plaintiffs obtained a

clerk's certificate of default (Dkt. No. 45) and moved for a default judgment. (Dkt. No. 54.)

B. Panorama Appears Through Fraade

Panorama first appeared in this action, through attorney Fraade, on May 13, 2016. (Dkt.

No. 58 .) On May 20, 2016, Fraade explained in a letter to the Court (Dkt. No. 61) that his client

was organized under the laws of the United Kingdom, had no offices or employees in the United

States, and could not have been effectively served with process at the A venue Z Address. Fraade

2 The factual background and procedural history of this action are described in more detail in the Court' s prior decisions. See, e.g., Joint Stock Company Channel One Russia Worldwide v. Infomir, LLC, 2017 WL 825482 (S.D.N.Y. Mar. 2, 2017), report and recommendation adopted, 2017 WL 1321007 (S .D.N.Y. Mar. 30, 2017).

2


argued, "That a business in Brooklyn, New York, which may be an unrelated distributor, uses the

banner, Panorama TV does not connote that such premises are an office of Panorama TV UK." Id.

On June 10, 2016, in opposition to the pending default motion, Fraade filed a declaration

signed in the name of David "Zeltser," who identified himself as Panorama's Managing Director.

Zeltser Deel., filed June 10, 2016 (Dkt. No. 75), at 1. Zeltser stated that Panorama was a limited

partnership formed under the laws of the United Kingdom, with its principal address at 44 Main

Street, Douglas, South Lanarkshire, and attached its one-page "Certificate of Registration of a

Limited Partnership" (Certificate), dated August 13, 2013. Id. at 1, Ex. A. Zeltser stated that

Panorama had no office in New York and did no business here. Id. He specifically denied that the

Avenue Z Address was "associated with Panorama Alliance, LP." Id. at 1-2.

At a conference before me on July 22, 2016, Fraade accepted service of process on his

client's behalf. Thereafter, in an Order issued the same day (Dkt. No. 95), I vacated the default

certificate as to Panorama, authorized Panorama to file a motion to dismiss for lack of personal

jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), and set a briefing schedule for that motion. I also

granted plaintiffs' request to conduct limited jurisdictional discovery as to Panorama.

C. Jurisdictional Discovery

Plaintiffs served their jurisdictional discovery demands on July 27, 2016, including both

document production requests and interrogatories. See Blaustein Deel., filed Oct. 17, 2016 (Dkt.

No. 128), ,-i 14. Panorama's responses, signed by attorney Fraade,3 were remarkably uninformative

3 Panorama's responses to plaintiffs' document production requests were signed only by Fraade. See Doc. Req. Resp., dated August 19, 2016 (Dkt. No. 135-2), at 5. Its interrogatory answers were signed by Fraade and accompanied by a one-page declaration in the name of David "Zeltzer," stating that Zeltzer "was consulted" regarding the interrogatories, read them, and knew them to be true. See Interrog. Ans., dated August 18, 2016 (Dkt. No. 125-5), at 7, 8. The declaration does not, however, state that Zeltzer read the interrogatory answers, or knew the answers to be true. Id. at 8. Moreover, in place of Zeltzer's signature on the August 18 declaration there is only his typed

3


and, in a number of respects, implausible, as described in more detail in Joint Stock Company

Channel One Russia Worldwide, 2017 WL 825482 at *2-3. Although Panorama did not object to

any of plaintiffs' document requests, it claimed not to possess a single responsive document-

beyond the one-page Certificate it previously submitted-concerning its partners; its corporate and

management structure; its registration, ownership, and management of the Website; its payments

to Domains by Proxy or other website hosting companies; its registration of the 1-800 telephone

number displayed on the Website; its relationship with the Avenue Z address; or its agreements or

contracts with New York residents (such as those subscribing to its service). See Doc. Req. Resp.

at 2-5. Similarly, in its interrogatory answers, Panorama attested that its only partner was David

"Zeltser,"4 that it had no business relationship with any person or entity in the United States, and

that it had no "authorized representatives" here. See Interrog. Ans. at 3, 8, 23. Panorama

specifically denied any relationship with "any person or entity located at or doing business at" the

Avenue Z Address. Id. at 4. 5

name. Id. It thus appears that the interrogatory answers violated Fed. R. Civ. P. 33(b)(l)(B) (interrogatories to a partnership must be answered by an officer or agent thereof) and Fed. R. Civ. P. 33(b)(5) ("[t]he person who makes the answers must sign them"). See also Southern District of New York Electronic Case Filing Rules & Instructions, § 8.4 ("[a] document requiring the signature of a party or witness shall be electronically filed in a scanned format that contains an image of the actual signature"). 4 Perhaps attorney Fraade was not aware, when he signed Panorama's interrogatory answers, that according to its Form LP-5, on file with the United Kingdom government, Zeltser was not a partner at all (no matter how his name was spelled). Although the Form LP-5 was never produced by Panorama in this action, it is publicly available on the website of Companies House in the United Kingdom. See https://beta.companieshouse.gov. uk/company/SLO 13886/filing-history (last visited May 9, 2017). The Form LP-5 states that Panorama has one general partner, listed as "Broad Admin Ltd.," and one limited partner, listed as "Alfa Admin Ltd." Id. 5 Perhaps attorney Fraade did not notice, when he signed Panorama's interrogatory answers, that his client's Website displayed the Avenue Z Address, along with a Brooklyn telephone number, under the headline "Panorama TV Authorized Dealer." See Blaustein Deel., filed Oct. 28, 2016 (Dkt. No. 137-2), Ex. B.

4


D. The Rule 12(b )(2) Motion

On August 25, 2016, Fraade filed Panorama' s motion to dismiss, supported by the

declaration of David "Zeltzer," who attested once again that Panorama was a limited partnership

formed under the laws of the United Kingdom; that it had no office at the Avenue Z Address or

elsewhere in the State of New York; and that it did not do any business here. Zeltzer Deel. , filed

Aug. 25 , 2016 (Dkt. No. 110), ilil 1, 7-10. The motion was also supported by an Affirmation in

which attorney Fraade stated, under penalty of perjury, that Panorama "does not advertise in the

United States or New York, nor does [it] actively seek consumers within the United States." Fraade

Aff., filed Aug. 25 , 2016 (Dkt. No. 109), if 12.6

E. The September 8, 2016 Conference

On September 8, 2016, during a telephonic discovery conference, I directed Panorama to

search its documents again and to produce any responsive materials by September 19, 2017. See

Joint Stock Company Channel One Russia Worldwide, 2017 WL 825482 at *4; Tr. of Sept. 8, 2016

Conf. (Dkt. No . 123) at 15:21-16:1, 19:5-10. Attorney Fraade assured the Court that he would

"clarify with my client and make sure they provide the proper information." Id. at 16:13-14.

However, Panorama did not produce any additional documents. In a letter dated September 19,

2016 (Dkt. No. 125-1), Fraade stated, "Mr. Zeltser has again advised us that Panorama has

produced all responsive documents and agreements," and that "all of the answers which were

already provided were accurate to the best of his knowledge."

6 In New York State practice, an attorney's affirmation "may be served or filed in the action in lieu of and with the same force and effect as an affidavit." N.Y.C.P.L.R. Rule 2106.

5


F. The Yevdayev Deposition

Stymied by Panorama, plaintiffs next sought permission, which I granted (Dkt. No. 126),

to serve a subpoena for documents and deposition testimony on Asaf Yevdayev, whom they

believed to be a dealer or reseller of Panorama's product operating out of the A venue z Address.

Attorney Fraade represented Yevdayev at his deposition, during which the witness acknowledged,

among other things, that he worked at the Avenue Z Address, selling subscriptions to Panorama's

"IPTV" (internet protocol television) service, which he advertised in local Brooklyn newspapers.

Yevdayev Dep. Tr., Oct. 20, 2016 (Dkt. No. 137-1), at 5:3-8, 32:10-21, 34:3, 38:8-9, 51:17-21,

97: 17-20. The telephone number of the Avenue Z Address was the same number shown on the

Panorama Website, and the signage at the premises included "[a] sign of Panorama TV, My

Panorama TV outside the building." Id. at 31:18-24, 32:10-21, 51:25-52:8, 64:9-66:21, 97:17-18.

Y evdayev obtained the subscriptions in bulk from Panorama by logging in to the Website through

a "special link" for "dealers, resellers"-paying by wire transfer-and then resold them to

consumers in New York and elsewhere. Id. at 39:18-22, 45:7-45:3, 48:22-49:7, 57:9-24. Yevdayev

confirmed that Panorama knew he was reselling its service locally. Id. at 46: 19-47:12. The Avenue

Z Address and Yevdayev's Brooklyn telephone number were listed on the Website "because we

sell their product." Id. at 103: 8-17. Y evdayev received technical support from Panorama both by

telephone and through an online "ticket system." Id. at 84:20-24, 85:21-86:24, 89:15-16.

In addition, Y evdayev testified, he himself "bought" and registered the domain name

www.mypanorama.tv, "ten years ago or a long time ago." Yevdayev Dep. Tr. at 105:8, 106:2-6,

107:2-3. Thereafter, he testified, he "transferred the ownership" of the domain name to "Panorama

company in U.K." Id. at 108:16-22, 110:9-11, 111:14-24, 112:7-13. Shown a document recently

produced by Domains by Proxy, Inc., listing Yevdayev as the registrant, technical, administrative,

6


and billing contacts for the domain name www.mypanorama.tv (Dkt. No. 125-6), Yevdayev was

"curious myself why my name is still on it." Id. at 106:9-10. "[I]t shouldn't be there but it is still

there." Id. at 106:25.7

G. The Sanctions Motions

On October 17, 2016, Panorama filed a motion pursuant to Fed. R. Civ. P. 37(b)(2)(A)

(Dkt. No. 127), seeking discovery sanctions against Panorama and attorney Fraade for failing to

comply with this Court's orders regarding jurisdictional discovery. On October 28, 2016,

Panorama filed a second sanctions motion, pursuant to Fed. R. Civ. P. 11 (Dkt. No. 134), arguing

that Panorama's Rule 12(b )(2) motion was frivolous and should have been withdrawn. 8

In response to the Rule 3 7 motion, attorney Fraade filed a declaration stating, among other

things, that Panorama "produced the only responsive documents it had in its control or possession,"

and that sanctions against its counsel would be "inappropriate," in that he made "good faith efforts

to obtain the truth from Panorama" and "all attempts to ensure that Panorama complied with the

Court's order." Fraade Deel., filed Oct. 24, 2016 (Dkt. No. 131), ~~ 11, 17. Fraade also filed

another declaration in the name of David "Zeltser"-once again bearing only the declarant's

typewritten name on the signature page-stating, among other things, that to the "best of its

7 Y evdayev did not produce any documents in response to plaintiffs' subpoena, claiming at deposition that he searched his records but did not discover any documents concerning "the ownership or operation of the Website," "communications between [Yevdayev] and Panorama," any "relationship between [Yevdayev] and Panorama," or "Panorama's business in the United States." Yevdayev Dep. Tr. at 63 :3-25. Although plaintiffs later filed a sanctions motion against Panorama for its discovery misconduct (discussed below), they did not move to compel or otherwise seek additional discovery from Yevdayev. 8 In accordance with Rule 11 's "safe harbor" provision, Fed. R. Civ. P. 1 l(c)(2), the motion was served on October 6, 2016, 21 days before it was filed, to give Panorama an opportunity to withdraw its Rule 12(b)(2) motion without penalty. See Blaustein Deel., filed Oct. 28, 2016 (Dkt. No. 135), ~ 4. Panorama did not avail itself of that opportunity, even after Yevdayev testified on October 20, 2016.

7


knowledge," Panorama provided "full and accurate responses" to plaintiffs ' jurisdictional

discovery requests. Zeltser Deel., filed Oct. 24, 2016 (Dkt. No. 132), ~ 9.

In response to the Rule 11 motion, attorney Fraade filed a declaration stating, among other

things, that "Panorama has consistently maintained that it has no relationship with Mr. Yevdayev,

rather he is just a reseller of Panorama products." Fraade Deel., filed Nov. 14, 2016 (Dkt. No. 142),

~ 15. Fraade went on to argue that there are "reasonable bas[ e] s upon which this Court could find

it lacks personal jurisdiction over Panorama,'' such that Rule 11 sanctions would be

"inappropriate." Id. ~ 23 .

In addition, Fraade addressed the sanctions motions in Panorama's reply brief in further

support of its motion to dismiss for lack of personal jurisdiction, arguing that the Rule 11 motion

was merely an effort "to coerce Panorama into withdrawing its motion,' ' and that "Panorama

responded to Plaintiffs' interrogatories as best it could." Panorama Reply Mem., filed Nov. 2, 2016

(Dkt. No. 141), at 2-3. The reply also asserted that it was "indisputable" that Panorama "does not

have authorized representatives in New York." Id. at 2.

H. Denial of the Rule 12(b )(2) Motion

On March 2, 2017, I recommended that the District Judge deny Panorama' s Rule 12(b)(2)

motion. Joint Stock Company Channel One Russia Worldwide, 2017 WL 825482, at * 16.

Panorama did not object to my Report and Recommendation, and on March 30, 2017, the

Honorable George B. Daniels, United States District Judge, adopted it in full and denied the

motion. (Dkt. No. 205.)

I. The Motion for Leave to Withdraw

On March 27, 2017-after the deadline for objecting to the Report and Recommendation

passed- Fraade submitted a letter to the District Judge (Dkt. No. 202), requesting leave to move

8


to withdraw as counsel for Panorama. On March 29, 2017, plaintiffs submitted a responding letter

(Dkt. No. 203), requesting that the issue be referred to the undersigned Magistrate Judge. By Order

dated March 30, 2017 (Dkt. No. 204), I noted that "[t]he anticipated motion falls within the scope

of the existing referral," and set a briefing schedule.

Fraade filed his motion papers on April 4, 2017 (Dkt. Nos. 208-210), and served them on

his client by Federal Express and email on April 7, 2017. Deel. of Service, filed April 29, 2017

(Dkt. No. 245), at 1. The moving papers included a copy of Mintz Fraade's Retainer Agreement

with Panorama, dated May 9, 2016.

On April 5, 2017, plaintiffs filed a letter-motion to compel discovery. They noted that the

Retainer Agreement includes the statement: "Panorama TV has its office in the State of New

York." Ret. Ag. (Dkt. No. 209-1) at 4. They also pointed out that the signature on the Retainer

Agreement (which is indecipherable and has no printed or typed name beneath it) does not match

the signature of David "Zeltzer" (or David "Zeltser") as it appeared on the declarations filed in

this action. Id. at 8. Plaintiffs requested that the Court enforce its July 22 and September 8, 2016

orders regarding jurisdictional discovery by directing Mintz Fraade "to tum over all relevant

communications pertaining to the Retainer Agreement and [Panorama' s] presence in New York,"

in particular the transmittal and reply emails associated with the Retainer Agreement. Pl. Ltr. , filed

April 5, 2017 (Dkt. No. 213), at 3. In addition, plaintiffs requested that the Court "consider this

new evidence" in connection with the pending sanctions motions. Id.

Attorney Fraade responded two days later, asserting that the statement "Panorama TV has

its office in the State of New York" was an "unfortunate drafting mistake" by an unnamed associate

who accidentally included "erroneous" "boilerplate" language in the retainer agreement, and that

9


he has "no knowledge of who signed the Retainer Agreement." Fraade Ltr., filed April 7, 2017

(Dkt. No. 214), at 1-2.

On April 18, 2017, when plaintiffs filed their formal response to the motion for leave to

withdraw, they once again requested that Fraade be ordered to provide discovery, this time as a

condition of withdrawal. Pl. Mem. in Resp., filed April 18, 2017 (Dkt. No. 233), at 6. However,

their proposed Order, filed along with their brief (Dkt. No. 233-1 ), would go considerably beyond

the jurisdictional discovery previously authorized. Plaintiffs request, for example, that Fraade and

his firm be ordered to tum over "all documents within their possession relating to Asaf Y evdayev

and David Zeltser a/k/a David Zeltzer," and that Fraade himself sit for deposition regarding all

issues relevant to plaintiffs' motions for sanctions and counsel's motion for leave to withdraw. Id.

at 2-4.

J. The Initial Case Management Conference

At the initial case management conference in this action on April 19, 201 7, plaintiffs stated

(upon inquiry from the Court) that they desired an expeditious decision on their sanctions motions

and would prefer that those motions be decided on the present record, without awaiting further

discovery. Tr. of April 19, 2017 Conf. (Dkt. No. 238) at 38:2-39:4. Accordingly, I denied

plaintiffs' letter-motion to compel, without prejudice to their ability to seek similar discovery in

the ordinary course. (Dkt. No. 237.)

K. Counsel's Reply Brief

On April 25, 2017, Fraade submitted a reply brief in support of his motion for leave to

withdraw, supported by a declaration in which he attests, among other things, that he is "unaware

of why the signature appears the way it does in the retainer agreement" and does not know who

signed it on behalf of Panorama. Fraade Deel., filed April 25, 2017 (Dkt. No. 240), ii 5. Fraade

10


also states that the information set forth in his declaration in support of Panorama's Rule 12(b )(2)

motion "was based upon the information provided by Plaintiff, which I believed to be true at the

time. It was not until a substantial time later that more information came to light." Id. iJ 8.

ANALYSIS

Local Civil Rule 1.4, governing the withdrawal of counsel, provides in relevant part as

follows:

An attorney who has appeared as attorney of record for a party may be relieved or displaced only by order of the Court and may not withdraw from a case without leave of the Court granted by order. Such an order may be granted only upon a showing by affidavit or otherwise of satisfactory reasons for withdrawal or displacement and the posture of the case, including its position, if any, on the calendar, and whether or not the attorney is asserting a retaining or charging lien.

Faced with a motion to withdraw pursuant to Rule 1.4, the district court must consider both "the

reasons for withdrawal and the impact of the withdrawal on the timing of the proceeding." Thekkek

v. LaserSculpt, Inc., 2012 WL 225924, at *2 (S.D.N.Y. Jan. 23, 2012).

Fraade reports that Panorama "has been unresponsive to my communications," particularly

smce March 2, 2017, when Fraade provided his client with a copy of my Report and

Recommendation. Fraade Deel., filed April 4, 2017, iJ 9. Since that date Panorama "has either

routinely failed to, or delayed, responding to my attempts at contacting it." Id. iJ 10. Counsel's last

"substantive response" from its client was on February 24, 2017, when Mr. "Zeltzer" "returned an

executed document with respect to the Preliminary Injunction Motion." Id. 9 Since Panorama "is

no longer cooperating" with counsel, "is not even making the appearance of cooperating," and is

9 That "executed document" was presumably the declaration of David "Zeltser," filed in opposition to plaintiffs' motion for a preliminary injunction on February 24, 2017. (Dkt. No. 193.) However, in place of the witness's signature on that declaration, there is only his typed name, see id. at 4, in apparent violation of§ 8.4 of the Electronic Case Filing Rules & Instructions.

11


"not following [counsel ' s] advice and direction," Fraade has been placed m an "untenable

position" and is unable to "vigorously represent" his client. Id. ifil 11 , 14. 10

"Satisfactory reasons for withdrawal" may "include a client's lack of cooperation,

including lack of communication with counsel." Farmer v. Hyde Your Eyes Optical, Inc., 60 F.

Supp. 3d 441 , 445 (S.D.N.Y. 2014) (internal quotations and citations omitted); accord Chen v.

Wai? Cafe Inc., 2016 WL 722185, at *6 (S .D.N.Y. Feb. 19, 2016). The breakdown in

communication and cooperation described by Fraade is adequate grounds for withdrawal,

especially where, as here, neither the plaintiffs nor the client opposes the motion. See, e.g., Farmer,

60 F. Supp. at 445 (collecting cases). In addition, there is little risk of prejudice to Panorama, or to

other parties, since the jurisdictional and pleading motions were only recently resolved, general

discovery has just begun, and this action is otherwise still in a relatively early phase. See, e.g. ,

Karimian v. Time Equities, Inc., 2011WL1900092, at *3 (S.D.N.Y. May 11, 2011) ("[w]here

discovery in a case has not yet closed and the case is not on the verge of trial readiness, prejudice

is unlikely to be found .") (internal quotations and citations omitted).

Plaintiffs are correct that this Court may retain jurisdiction over a withdrawing attorney in

connection with a pending sanctions motions. "Just as courts retain jurisdiction to apply Rule 37

sanctions after a case has been dismissed, a court may hold an attorney responsible for discovery

noncompliance even after he or she has been relieved as counsel ... [and] may condition the grant

10 In addition, Fraade notes that Panorama owes "substantial fees," and "has made it clear that it did not wish to continue to pay legal fees for the proceeding in the United States." Fraade Deel. , filed April 4, 2017, if 12. However, Fraade does not seek withdrawal on this basis and has not provided further detail regarding his bills, or the client' s arrears, as would be required were this the basis for his application. See, e.g., Rophaiel v. Alken Murray Corp. , 1996 WL 306457, at * 1-2 (S .D.N.Y. June 7, 1996) (requiring financial statements and tax returns demonstrating inability to pay before considering withdrawal motion). Mintz Fraade has waived any retaining or charging lien. Fraade Deel. , filed April 4, 2017, if 19.

12


of the motion to withdraw upon [counsel's] presence at the Rule 37 proceedings." Hakim v.

Leonhardt, et al., 126 F. App'x. 25, at 26 (2d Cir. 2005) (summary order). See also Dangerfield v.

Merrill Lynch, Pierce, Fenner & Smith, Inc., 2003 WL 22227956, at *7 (S .D.N.Y. Sept. 26, 2003)

("an attorney's withdrawal from a case does not prevent the imposition of Rule 11 sanctions for

papers filed prior to the withdrawal"); Logicom Inclusive, Inc. v. WP. Stewart & Co., 2008 WL

1777855, at *2 (S.D.N.Y. Apr. 16, 2008) (attorney's "withdrawal from the case does not insulate

him from ... a claim for pre-withdrawal litigation conduct").

The case law in our Circuit, including Hakim, suggests that a district court retains

jurisdiction over withdrawing counsel for sanctions purposes with or without an explicit order so

stating. For avoidance of doubt, however, the Court will expressly retain jurisdiction over Fraade

for these purposes, including any necessary court appearances. See Hakim , 126 F. App'x at 26

(noting that counsel's presence at the Rule 3 7 hearing could assist the district court to "allocate

responsibility" between counsel and client and "tailor sanctions accordingly").

The remaining issue, therefore, is plaintiffs' request that I order broad discovery as a

condition of withdrawal, ranging from production of all documents "relating to" Yevdayev or

Zeltser (a/k/a Zeltzer) to a deposition of Fraade covering "issues related to" the motions for

sanctions and to withdraw. As noted above, I have already denied plaintiffs' April 5, 2017 letter

motion to compel discovery, without prejudice-after plaintiffs assured me that they would prefer

a prompt decision on the pending sanctions motions based on the present discovery record. I see

little reason to revisit that determination in the context of Fraade's withdrawal motion, and even

less reason to condition his withdrawal on discovery which, if otherwise permissible, plaintiffs

will be entitled to obtain after withdrawal through the ordinary discovery mechanisms available to

13


any litigant. Moreover, since Fraade has presented adequate grounds for withdrawal-and there is

no opposition- I hardly need additional discovery to decide the withdrawal motion itself.

I will, however, require Fraade to produce, as a condition of withdrawal, all emails or other

communications between Mintz Fraade and Panorama, or any person acting on Panorama's behalf,

concerning the Retainer Agreement, including the names, email addresses, and any other

identifying or contact information concerning the sender(s), receiver(s) and recipient(s) of such

communications. Such information is not itself privileged. See Local Civil Rule 26.2(a)(2)(A). To

the extent there is a good-faith claim of privilege as to other portions of these emails or other

communications, Fraade may redact them and provide an accompanying privilege log in

compliance with Local Civil Rule 26.2(a)(2)(A).

I will also require Fraade to produce, as a condition of withdrawal, the manually signed

declarations that correspond to the Zeltser (or Zeltzer) declarations that were filed in this action

bearing only the declarant's typed signature. Section 7 of this Court's Electronic Case Filing Rules

& Instructions, which governs the filing of declarations requiring "original signatures other than

that of the Filing User," requires the Filing User (in this case Fraade) to maintain the declarations

"in paper form" until "five years after all time periods for appears expire." Further, "[o]n request

of the Court, the Filing User must provide original documents for review." Id. The Court has an

independent interest, appropriately addressed in the context of a withdrawal motion, in ensuring

that counsel permitted to use its ECF system comply with the ECF rules and instructions.

CONCLUSION

The motion for leave to withdraw is GRANTED subject to the following conditions:

1. The Court will retain jurisdiction over Alan Fraade, Esq. and his firm in connection

with plaintiffs' pending sanctions motions.

14


2. Fraade must produce all emails or other communications between Mintz Fraade and

Panorama, or any person acting on Panorama' s behalf, concerning the Retainer

Agreement, including the names, email addresses, and any other identifying or contact

information concerning the sender(s), receiver(s) and recipient(s) of such

communications. To the extent there is a good-faith claim of privilege as to other

portions of these emails or other communications, Fraade may redact them, and provide

an accompanying privilege log, in compliance with Local Civil Rule 26.2(a)(2)(A).

3. Fraade must produce the manually-signed Zeltser (or Zeltzer) declarations that

correspond to the declarations filed at Dkt. Nos. 125-5 (at ECF page 8), 132, and 193,

which bear only the declarant's typed name. In addition, Fraade must either:

a. Provide the originals of all Zeltser or Zeltzer declarations on file in this action

to plaintiffs for inspection and review (including those properly filed "in a

scanned format that contains an image of the actual signature," see Electronic

Case Filing Rules & Instructions § 8.4); or

b. Submit his own declaration explaining why he cannot do so.

4. Fraade must serve a copy of this Order upon Panorama.

The withdrawal will be effective when Fraade has complied with paragraphs 2, 3, and 4

above and has certified to the Court, in writing, that he has done so.

In light of the withdrawal of Panorama's current counsel, IT IS HEREBY ORDERED that

Panorama' s time to answer or otherwise respond to the Amended Complaint is EXTENDED to

June 12, 2017.

Since Panorama is not a natural person, it must defend this action through successor

counsel, who should file a notice of appearance as promptly as possible. If Panorama neither

15


responds to the Amended Complaint nor obtains additional time within which to do so by June

12, 2017, plaintiffs may request a certificate of default.

The Clerk if the Court is respectfully directed to close Dkt. 208.

Dated: New York, New York May~, 2017

SO ORDERED.

~~ United States Magistrate Judge

16


case 1:16-cv-01318-gbd-bcm document 255 filed...

Documents