As my colleague, Matt Donovan, recently blogged, it is essential for litigants to “play[] nice in the litigation sandbox” or risk facing the ire of the Justices in the Commercial Division. Many litigants might think they are playing “nicely” by asserting “good cause” in their arguments. But what does it actually mean to have “good cause”? As illustrated by some recent decisions by Manhattan ComDiv Justice Robert Reed, a finding of good cause will depend on the circumstances, evidence, and respective law.

Case Spotlight #1: Designs by F.M.C. v. Unique First Ltd.  

In Designs, Justice Reed dealt with two motions seeking withdrawal as counsel. In assessing both motions, Justice Reed reiterated that an “attorney must demonstrate that good cause exists to end the relationship with the client.” Without showing good cause, a motion to withdraw will be denied.

In the first motion, Justice Reed granted withdrawal as there was sufficient evidence submitted to demonstrate that the attorney’s purported appearance for an entity was “caused by mistake.” The evidence showed that when the attorney appeared on behalf of the entity, he believed his client owned the entity and that he therefore was representing it. When the attorney learned during a deposition that this was not the case, he immediately moved to withdraw. Since there was no evidence that the entity wanted/authorized the attorney to represent it, Justice Reed found sufficient good cause.

Likewise, in the second motion, Justice Reed also found sufficient good cause to grant the motion to withdraw. In that motion, the attorney, by way of affirmation, submitted evidence that the client did not intend to cooperate with the attorney and wished to appoint new counsel. Accordingly, Justice Reed granted the motion to withdraw.

Good Cause: 1, Gamesmanship: 0.

Case Spotlight #2: In Subify LLC v. Ace Hat Collection, Inc.

In Ace Hat Collection, Inc., an attorney moved to withdraw because he ceased working for the law firm by which he was employed when the client initially retained him. The attorney represented that he could not contact the client after the change in firm and did not receive the client’s consent.

In denying this motion, Justice Reed looked to the law. He reasoned that the law required the attorney to give the client reasonable notice he was withdrawing from representation. Justice Reed found that the attorney submitted no evidence of this fact.

Further, Justice Reed looked to the factual circumstances of the case. Justice Reed detailed the lack of evidence put forth by the attorney that would show “an irretrievable breakdown in the relationship or failure of cooperation by the client in representation.” As such, Justice Reed held that there was no good cause and denied the motion.  

Good Cause: 1, Gamesmanship: 1.

Case Spotlight #3: Sumec Textile & Light Indus. Co., Ltd. v. Zee Co. Apparel Corp.

Finally, Justice Reed once again dealt with good cause, albeit under different circumstances, in Sumec Textile. The case dealt with a discovery dispute over whether the deposition of plaintiff’s representative should take place in New York or virtually.

Plaintiff’s counsel argued there was good cause for the deposition to be conducted virtually, as the witness resided in China, which would result in unduly burdensome expenses to the plaintiff. Plaintiff also argued that the witness was the principal caretaker for a young child and her elderly parents, thus making it difficult for her to leave China.

Defendant argued that mere inconvenience was not good cause to avoid the obligation to produce a witness for a deposition in New York. Defendant argued that it was defendant’s right to conduct the deposition in person, so that defendant could better assess credibility and present physical evidence relevant to the case.

Looking at the circumstances, Justice Reed ruled there was no good cause to warrant a virtual deposition. Justice Reed reasoned that plaintiff specifically chose New York as a venue and thus “could not reasonably argue to be aggrieved by the accompanying obligations.” Thus, absent good cause, Justice Reed held that the deposition must take place in New York.

Good Cause: 1, Gamesmanship: 2.

Takeaway

Although these cases found more gamesmanship than good cause, in reality there is no true scoreboard for a finding of good cause. As seen by Justice Reed’s decisions, a finding of good cause will vary given the circumstances.

However, litigants can take one thing to the bank — simply stating good cause will not be enough. When asserting good cause, litigants should strive to focus their arguments around relevant law and to submit sufficient factual evidence to support their position.