Opinion
No. CV-10-2179-PHX-LOA.
April 15, 2011
ORDER
This action arises on the April 12, 2011 appearance of Defendant New Jersey Car and Limo, Inc. ("New Jersey Limo"), a New Jersey corporation, by its Chief Executive Officer, Malak Faltawws, a non-lawyer. (Doc. 29) Despite the filing of this action in October, 2010, Mr. Faltawws filed a pro se appearance on behalf of New Jersey Limo only two days before the April 14, 2011 default damages hearing which has been pending since February 10, 2011. (Doc. 21) On April 14, 2011, Mr. Faltawws also filed a document which the Court deems a motion to continue the default damages hearing set for that same day. (Doc. 31)
"Please allow Motion of Continuous (sic) for this cause to locate Attorney to represent my company in your court that has the authority to practice in Court of Arizona." (Doc. 31 at 1)
I. Background
Plaintiff LimoStars, Inc. ("Plaintiff") commenced this trademark infringement action on October 12, 2010. (Doc. 1) On October 21, 2010, Plaintiff consented to magistrate-judge jurisdiction pursuant to 28 U.S.C. § 636(c). (Doc. 13) On December 21, 2010, Plaintiff filed an Affidavit of Service of the Summons and Complaint purportedly prepared by Carmen Molina, a New Jersey process server, stating that New Jersey Limo, was served on December 8, 2010 at 1:50 p.m. c/o the New Jersey Department of Treasury, 33 West State Street, Trenton, New Jersey. (Doc. 17) Federal Rule of Civil Procedure 12(a)(1) provides, in relevant part, that a defendant must serve an answer "within 21 days after being served with the summons and complaint." Fed.R.Civ.P. 12(a)(1). Defendant New Jersey Limo did not file an answer or otherwise respond to the Complaint within the time allotted under Rule 12(a)(1). The Clerk of Court entered Defendant's default on February 8, 2011. (Doc. 20) An April 14, 2011 default damages hearing before the undersigned Magistrate Judge has been pending since mid-February 2011. (Doc. 21)
II. Practice of Law
In federal courts, only licensed attorneys may represent a corporation or other entity. Best Western Intern., Inc. v. Fish Creek Holdings, LLC, 2010 WL 2790118, * 1 (D.Ariz., July 14, 2010) (citing Rowland v. Cal. Men's Colony, Unit II Men's Advisory Counsel, 506 U.S. 194, 201-202 (1993) ("It has been the law for the better part of two centuries . . . that a corporation may appear in federal courts only through licensed counsel.") (citing Osborn v. President of Bank of U.S., 9 Wheat. 738, 829, 6 L.Ed. 204 (1824)); D-Beam Ltd. P'ship v. Roller Derby Skates, Inc., 366 F.3d 972, 973-74 (9th Cir. 2004) ("It is a longstanding rule that `corporations and other unincorporated associations must appear in court through an attorney.'") (alteration and citation omitted); In re Am. W. Airlines, 40 F.3d 1058, 1059 (9th Cir. 1994) ("Corporations and other unincorporated associations must appear in court through an attorney."); U.S. v. High Country Broad. Co., 3 F.3d 1244, 1245 (9th Cir. 1993) (holding that a corporation's president and sole shareholder could not make an "end run around" the counsel requirement by intervening pro se rather than retaining counsel to represent the corporation) (citing 28 U.S.C. § 1654)). See also, National Union Fire Ins. Co. of Pittsburgh, PA v. Excel Staffing, 2011 WL 31192, * 1 n. 1 (D.Ariz., January 5, 2011).
Unless federal law addresses an issue like the prohibition of a non-lawyer representing a corporation in a district court proceeding, the District Court of Arizona turns to Arizona law regarding the boundaries of practicing of law without a license and attorney discipline. Marchant v. U.S. Collections West, Inc., 12 F. Supp. 2d 1001, 1005 (D. Ariz. 1998); In re Oladiran, 2010 WL 3775074, * 1 (D.Ariz., Sept. 21, 2010) ("[L]ocal Rule of Civil Procedure 83.2 governs attorney discipline in this Court, and provides that the Arizona Rules of Professional Conduct, Ariz. R. Sup.Ct. 42 . . . shall apply to attorneys authorized to practice before the Court.").
Arizona law also forbids non-lawyers to practice law on behalf of other individuals or corporations in a judicial proceeding. Rule 31(a)(2)(A)(3) and (b), Ariz. R. Sup.Ct. While a natural person can always appear pro per, a corporation is an entity unto itself quite separate from its owners and officers. In order to respect the corporate form, Arizona long ago adopted the rule that a corporation can not appear in court without a lawyer. Jacquez v. Diem Corp., 2003 WL 25548423, * 3 (D. Ariz. 2003) (citing Boydston v. Strole Development Company, 193 Ariz. 47, 969 P.2d 653 (Ariz. 1998) and Ramada Inns, Inc. v. Lane Bird Advertizing, Inc., 102 Ariz. 127, 128, 426 P.2d 395, 396 (Ariz. 1967)). See also, State v. Liberty Bail Bonds, 2008 WL 4095513, * 3 n. 6 (Ariz.Ct.App. 2008).
There is no doubt that the filing of an answer, motion to dismiss for lack of subject-matter jurisdiction, or motion to set aside entry of default on behalf of a corporation constitute the "practice of law" within the meaning of both federal and Arizona law. While there are some minor exceptions, none apply here.
III. Discussion
Even though Mr. Faltawws is not an attorney, his appearance and motion to continue herein on behalf of Defendant New Jersey Limo will not, at least initially, be treated as a nullity. Boydston, 969 P.2d. at 656. In an abundance of fairness to Defendant and its non-lawyer CEO, the Court will sua sponte vacate the April 14, 2011 default damages hearing to allow New Jersey Limo to retain counsel. D-Beam Ltd. P'ship, 366 F.3d at 974 ("[T]hough a corporate officer's signing the notice of appeal does not render that notice invalid, all subsequent motions and pleadings must be filed by counsel. Thus, even if Evans's notice of appeal were adequate to assert D-Beam's claims, we lack jurisdiction over those claims because D-Beam did not retain counsel prior to the filing of motions and pleadings on appeal."); Barrios v. New York City Housing, 564 F.3d 130, 132-133 (2nd Cir. 2009).
Defendant New Jersey Limo will be allowed a reasonable time and a single opportunity to retain a lawyer, licensed to practice law in Arizona and admitted to practice in this District Court or authorized to practice law in this District Court upon pro hoc vice application, or the Court will proceed with the default judgment proceedings. United States v. High Country Broadcasting Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993) (affirming district court's entry of default judgment against the corporation when the corporation failed to retain counsel for the duration of the litigation and attempted to proceed through its unlicensed president and sole shareholder). Absent a showing of good cause or a written settlement agreement, the failure of New Jersey Limo to promptly retain counsel, consistent with this order, and appear in this action may result in entry of a default judgment against it. Ackra Direct Marketing Corp. v. Fingerhut Corp., 86 F.3d 852, 855-56 (8th Cir. 1996) (affirming district court's entry of default judgment, noting that "[a]ppellants' excuses for their conduct do not warrant a finding that the district court abused its discretion in granting default judgment," where one of the excuses included was that the company was "financially unable to secure new legal counsel"); GFSI, Inc. v. San Sun Hats Cap Co., Ltd., 2008 WL 489318 (D.Kan., Feb. 20, 2008) (court struck invalid pro se response on behalf of defendant corporation because it was in violation of both court's order and the rule that corporations must be represented by counsel.).
The additional time provided herein will also give the parties a fair chance to try to quickly settle this case without further expense and delay which is consistent with Rule 1, Fed.R.Civ.P. Unless Mr. Faltawws has already retained counsel, the Court hereby directs Mr. Faltawws to promptly contact Plaintiff's counsel directly at his office in Wood River, Illinois in an effort to settle this case to the satisfaction of all parties.
On the Court's own motion,
IT IS ORDERED that the April 14, 2011 default damages hearing is hereby VACATED. IT IS FURTHER ORDERED that unless the parties promptly settle this case, Defendant New Jersey Car and Limo, Inc. must retain an attorney, licensed to practice law in Arizona and admitted to practice in this District Court or authorized to practice law in this District Court upon pro hoc vice application, and file an appearance herein on or before Friday, April 29, 2011. If Defendant New Jersey Car and Limo, Inc. does not timely comply with this order regarding obtaining counsel, Plaintiff is hereby authorized to file a notice requesting the Court reset the default damages hearing on a date and time convenient to Plaintiff.
IT IS FURTHER ORDERED that there will be no further extensions of time for Defendant New Jersey Car and Limo, Inc. to retain an attorney in this lawsuit.
IT IS FURTHER ORDERED that Malak Faltawws' motion to continue, doc. 31, is DENIED as moot.
The Clerk of Court is kindly directed to mail a copy of this order to Defendant New Jersey Car and Limo, Inc. c/o Malak Faltawws.
Dated this 14th day of April, 2011.