California Cases August 11, 2023: Glass v. DocuSign, Inc.

Case Description

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ORDER GRANTING MOTIONS TO WITHDRAW AND REQUIRING COUNSEL TO FILE LODGED MATERIALS UNDER SEAL BY AUGUST 18, 2023 - RE: DKT. NOS. 11, 12

LISA J. CISNEROS UNITED STATES MAGISTRATE JUDGE

Before the Court are Sherry S. Hamilton's and Kevin A. Adams's Motions for Leave to Withdraw as Counsel for Plaintiff. ECF Nos. 11 (Hamilton's Mot. to Withdraw), 12 (Adams's Mot. to Withdraw). On July 18, 2023, the Court held a hearing under seal regarding the Motions. Having carefully considered the parties' arguments and the relevant legal authority, the Court GRANTS Hamilton's and Adams's Motions to Withdraw for the following reasons.

I. BACKGROUND

On February 24, 2023, Plaintiff Todd Glass filed this lawsuit concerning the data privacy and cyber security vulnerabilities involved in utilizing Defendant DocuSign, Inc.'s (DocuSign) electronic signature services. ECF No. 1 (Compl. ¶¶ 1-3). Plaintiff alleges that on February 13, 2023, DocuSign violated his federal rights under the Electronic Stored Communications Privacy Act (18 U.S.C. § 2511) and the Stored Communications Act (18 U.S.C. § 2701), when it allegedly allowed third-party hackers to hijack the DocuSign system to access Plaintiff's private communications and documents. Compl. ¶¶ 1, 3.

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The Complaint was drafted by Tony Lee of Fletcher, Heald & Hildreth, PLC and signed by Sherry S. Hamilton and Kevin A. Adams of Mortenson Taggart Adams LLP. ECF No. 13 (Opp. to Mot. to Withdraw) at 9. Lee has not appeared in this case. According to Plaintiff, Hamilton and Lee recommended that Plaintiff forgo serving the current complaint due in part to their stated concern regarding the shortage of privacy-related case law regarding e-signature companies. Id. Plaintiff agreed to delay service of his Complaint on DocuSign to further augment and revise his Complaint, using an “outside legal resource” that he had identified. Id.

On May 24, 2023, Plaintiff moved for an extension of time to serve the Summons and Complaint on Defendant. ECF No. 9. On June 1, 2023, the Court denied Plaintiff's request, reasoning Plaintiff failed to show that he diligently tried to serve Defendant pursuant to Rule 4(m) of the Federal Rules of Civil Procedure. ECF No. 10 (Order Denying Pl.'s Request for Admin. Relief). The Court also issued an Order to Show Cause (OSC) why the matter should not be dismissed without prejudice for failure to serve Defendant. Id. The OSC hearing is currently scheduled for November 7, 2023, with Plaintiff's response due two weeks in advance. ECF No. 24.

On June 2, 2023, Hamilton moved to withdraw from this matter, and Adams followed suit on June 7, 2023, moving to withdraw himself and his firm, Mortenson Taggart Adams LLP. ECF Nos. 11, 12. Hamilton asserts that withdrawal should be permitted on the grounds that Plaintiff's conduct has rendered it unreasonably difficult to carry out the representation effectively. ECF Nos. 11 at 3, 11-1 (Hamilton Decl.) ¶ 3. Adams similarly contends, in his motion to withdraw, that “interactions with Plaintiff have been both limited and strained, rendering it unreasonably difficult for Counsel to carry out the representation effectively.” ECF No. 12 at 3. In light of concerns about protecting privileged attorney-client communications, both attorneys offered to provide the Court with more details in camera regarding the reasons for their motions to withdraw. ECF Nos. 11 at 3, 12 at 3.

Plaintiff opposed these motions on June 16, 2023, and Hamilton filed a reply on June 20,

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2023. ECF Nos. 13 (Pl.'s Opp.), 14 (Hamilton's Reply). On June 27, 2023, Adams filed a declaration in lieu of Plaintiff's OSC response, stating Plaintiff's Counsel was “not in a position to provide a response to the OSC on behalf of Plaintiff” due to a “breakdown in [the] relationship with Plaintiff.” ECF No. 16 (Adams OSC Decl.) ¶¶ 4, 5.

On July 10, 2023, the Court ordered Hamilton and Adams to lodge for in-camera review supplemental declarations, including exhibits, substantiating the grounds for their Motions to Withdraw by July 17, 2023. ECF No. 19 (Order Regarding Mot. to Withdraw). The Court also ordered Plaintiff to lodge a supplemental declaration that further substantiated his arguments in his opposition to the Motions to Withdraw, including the retainer agreement with his current Counsel and any efforts he has made to secure substitute counsel. Id. On July 17, 2023, Hamilton and Adams lodged separate supplemental declarations, and Plaintiff filed on the Court docket his supplemental declaration. ECF Nos. 20, 21, 23. Hamilton's declaration and exhibits were accompanied with a certificate of service indicating that the same were sent by email to Plaintiff on July 17, 2023. Adams sent to the Court with his supplemental declaration and exhibits in an email that was also addressed to two email addresses for Plaintiff.

On July 18, 2023, the Court held a hearing under seal on both motions to withdraw. Hamilton and Adams argued the motions, and Plaintiff appeared as well, opposing the motions. ECF No. 24. At the hearing, Plaintiff raised concern that he had received Hamilton's supplemental declaration late, despite the indication in the certificate of service. The Court took a recess to allow Plaintiff time to review Hamilton's supplemental declaration and exhibits. The Court noted that Hamilton's supplemental declaration included exhibits that largely consist of copies of communications with Plaintiff, and thus, Plaintiff was aware of these communications and had access to them in advance of the Hamilton's submission. When the hearing reconvened Plaintiff did not object or otherwise request additional time to review documents or oppose the motions.

II. LEGAL STANDARD

This District's Civil Local Rules authorizes an attorney to withdraw as counsel of record if: (1) written notice has been given reasonably in advance to the client and all other parties in the

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action; and (2) the attorney obtains leave of Court. Civ. L.R. 11-5(a). Civil Local Rule 11-4(a)(1) requires attorneys practicing in this Court to “comply with the standards of professional conduct required of members of the State Bar of California.” Withdrawal of counsel is governed by Rule 1.16 of the California Rules of Professional Conduct.

The decision to permit the withdrawal of counsel is within the sound discretion of the trial court. See United States v. Carter, 560 F.3d 1107, 1113 (9th Cir. 2009). Courts “consider several factors when considering a motion for withdrawal, including: (1) the reasons counsel seeks to withdraw; (2) the possible prejudice that withdrawal may cause to other litigants; (3) the harm that withdrawal might cause to the administration of justice; and (4) the extent to which withdrawal will delay resolution of the case.” Atkins v. Bank of Am., N.A., 2015 WL 4150744, at *1 (N.D. Cal. July 9, 2015).

III. DISCUSSION

Based upon the filings and the materials lodged with the Court for in camera review, and arguments presented at the in-camera hearing, the Court is persuaded to exercise its discretion and grant Hamilton, Adams, and Mortenson Taggart Adams LLP leave to withdraw. The Court's reasoning is as follows.

Initially, an attorney seeking leave to withdraw must comply with Rule 11-5(a) of the Civil Local Rules, which requires written notice be given reasonably in advance to the client. See Brown v. City of Antioch, No. 16-CV-05102-LB, 2017 WL 2438989, at *1 (N.D. Cal. June 6, 2017). Both Hamilton and Adams provided Plaintiff with notice of their intent to file a Motion to Withdraw. See Hamilton Decl. ¶ 2; ECF No. 12-2 (Adams Decl.) ¶ 4. Hamilton notified Plaintiff via email on May 8, 2023, that she would not continue to represent him, and he should start looking for new counsel, and on May 30, 2023, she informed him of her intent to file the instant motion seeking leave to withdraw. Hamilton Decl. ¶ 2. Adams appears to have given notice on May 26, 2023, that his firm would not continue representing Plaintiff. Adams Decl. ¶ 4. The motions were filed by Hamilton and Adams on June 2, 2023, and June 7, 2023, respectively.

This notice was reasonably in advance, given that this case is still in its infancy and Plaintiff has long been aware that he has needed to retain additional counsel to prepare an

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amended complaint. Plaintiff has been on notice for months that his complaint required augmentation and his attorneys were unable to handle the case on their own, as they did not have expertise in privacy or cyber-security law. See, e.g., ECF No. 13 at 9, ECF No. 9-1 at ¶¶ 5-6. He understood that that expertise would be necessary to amend his complaint. Furthermore, timing to serve and amend a complaint is finite. See Fed.R.Civ.P. 4(m); Fed.R.Civ.P. 15(a)(1). Counsel's notice is reasonable given the posture of the case, and Plaintiff's ongoing ability to seek new counsel and request additional time to file an amended complaint and serve DocuSign. ECF No. 10 at 1-2 (scheduling OSC hearing in which Plaintiff may present “good cause” to allow his case to continue).

Additionally, the four factors that courts consider when analyzing a motion to withdraw favor approval of the withdrawal request. First, the Court considers the reasons counsel seeks to withdraw. Pursuant to Rule 1.16(b)(4) of the California Rules of Professional Conduct, Hamilton, Adams, and Adams's firm may withdraw from this case because Plaintiff's conduct “renders it unreasonably difficult for [Counsel] to carry out the[ir] representation effectively.” Cal. R. Prof. Conduct, Rule 1.16(b)(4). Without Plaintiff's timely retention of additional counsel with privacy and cyber-security law expertise, the preparation of an amended complaint, and reliable communication, current counsel have been unable to proceed with the case. Plaintiff's vague statement indicating that at some point he has identified an “outside legal resource available to augment and broaden” the complaint does not establish that he has identified and retained alternate counsel with expertise, or that an amended complaint has been drafted and is ready for filing. ECF No. 13 at 9; see, also, Adams Decl. ¶ 9; ECF No. 14-1 (Hamilton Reply Decl.) ¶ 2. It is also evident from communications between Plaintiff and counsel that a serious breakdown in trust has occurred. These circumstances strongly indicate that Hamilton, Adams, and the firm are no longer able to effectively represent Plaintiff.

Second, the Court considers the possible prejudice that withdraw may cause to other litigants. As noted earlier, this case remains at an early stage and DocuSign has not been served. Thus, any further delay will not have a significant effect on the case or prejudice DocuSign. The Court has extended Plaintiff's upcoming deadlines so that Plaintiff can have ample time to retain

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new counsel. The Court's OSC response deadline is now set for October 24, 2023, and the OSC hearing is set for November 7, 2023. ECF No. 24. If Plaintiff retains counsel with expertise who are not admitted to practice in California, that counsel may be a candidate for pro hac vice admission.

Moreover, Plaintiff will not be prejudiced by Hamilton's withdrawal because she admits she cannot offer any meaningful assistance in this regard as she does not specialize in data privacy or cyber security law. Hamilton Reply Decl. ¶ 5. Additionally, Plaintiff will not be prejudiced by Adams's absence, as Adams admits he has a strained relationship with Plaintiff, and, due to difficulties with Plaintiff, he has been “unable to assert any position or file any papers on behalf of Plaintiff.” ECF No. 12 at 5. Plaintiff argues that counsel are obligated to represent him through discovery and completion of this case, but these arguments are unpersuasive given his acknowledgement that alternate counsel with the expertise are necessary for the case to proceed.

Plaintiff also contends that the case should not be delayed any further because it is a high stakes matter that relates to his prior business dealings. ECF No. 13 at 5-6. It is difficult to understand his argument, but it seems that the “backdrop” for the case involves a company that Plaintiff founded in 1995 and which was slated to be sold in 2021. Id. at 5. The agreement to sell fell through, and a principal shareholder withdrew his signature. Id. at 6. Even if this litigation affects a separate dispute, the outlines that Plaintiff have sketched are insufficient to show that the withdrawals of counsel who do not have the legal expertise necessary to continue his case will prejudice him. Expertise is necessary for both amending the complaint and conducting discovery.

Third, the Court considers the harm that withdrawal might cause to the administration of justice. There are no upcoming deadlines in this action other than those related to the OSC. And this Court anticipated Plaintiff's need and extended the OSC-related deadlines in this Order to ensure Plaintiff had sufficient time to find new counsel or prepare to proceed pro se . Plaintiff, however, asserts that withdrawal of counsel would harm the public by delaying a case that will

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address alleged risks that DocuSign poses to the public. Plaintiff claims that DocuSign is failing to prevent the spread of malware and cyberattacks. The Court is not able to prejudge the merits of Plaintiff's allegations. These arguments are not grounds to deny the motions to withdraw, especially as Plaintiff may retain new counsel or proceed pro se . Moreover, Plaintiff has taken the position that his attorneys lack the expertise to revise his complaint.

Finally, the Court considers the extent to which withdrawal will delay resolution of the case. Withdrawal of counsel will not delay litigation because counsel do not have the expertise to prepare an amended complaint. Nor has Plaintiff indicated that there is an amended complaint that has been prepared and reviewed and is ready for filing and service by his current counsel, upon leave granted by this Court. The case is currently delayed because of the absence of an amended complaint and alternate counsel that have the expertise to prepare amended pleadings. Keeping counsel in this case will not cure that deficiency.

Counsel seeking to withdraw from this case have satisfied Civil Local Rule 11-5(a)'s requirement of reasonable advance notice, and the four factors discussed above favor allowing counsel to withdraw. Accordingly, the Court holds that counsel are permitted to withdraw.

IV. CONCLUSION

For the reasons stated above, the Motions to Withdraw are GRANTED. ECF Nos. 11, 12. Withdrawal will be effective after Hamilton and Adams file under seal the materials that they lodged with the Court via email on July 17, 2023. The Court finds good cause for sealing those lodged materials, as they were reviewed in camera to protect attorney-client privilege. Hamilton and Adams shall file the materials under seal by August 18, 2023. Similarly, the Court finds good cause for sealing the July 18, 2023 hearing, except for counsel and Plaintiff's access to the

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transcript as noted in the Minute Order, ECF 24.

The Clerk shall terminate Sherry S. Hamilton, Kevin A. Adams, and Mortenson Taggart Adams LLP as counsel for Plaintiff Todd Glass after the lodged materials are filed under seal. Their names, however, shall remain on the electronic notification list in the above captioned matter through the date upon which the Court conducts a hearing on the OSC. Hamilton, Adams, and Mortenson Taggart Adams LLP are not required to represent Plaintiff at the OSC, as the motions to withdraw have been granted. However, they shall respond, as needed, to any order or notice that the Court may issue and direct at them prior to resolution of the OSC. Hamilton and Adams shall serve copies of this order on Plaintiff via email and mail. Plaintiff shall register to become an electronic filer in this case by August 18, 2023.

IT IS SO ORDERED.