Alcala Pharmaceutical, Inc v. RNB Holdings, LLC ( 2019 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ALCALA PHARMACEUTICAL, Case No.: 19cv1973-JM-MDD INC., 12 ORDER DISQUALIFYING Plaintiff, 13 PLAINTIFF’S COUNSEL v. MATTHEW RIFAT 14 RNB HOLDINGS, LLC, 15 [ECF NO. 15] Defendant. 16 17 On December 5, 2019, the Court issued an Order to Show Cause 18 requiring counsel for Plaintiff, Matthew Rifat, Esq., to notify the Clerk 19 regarding certain felony charges pending against him in the California 20 Superior Court in Riverside County and to demonstrate why he should be 21 allowed to continue to represent Plaintiff in this case, as required by Civil 22 Local Rule 83.5. (ECF No. 13). On December 6, 2019, Mr. Rifat notified the 23 Clerk of the charges. (ECF No. 14). On December 11, 2019, Mr. Rifat moved 24 the Court to allow him to continue to represent Plaintiff. For the reasons 25 provided below, Mr. Rifat’s motion is DENIED. 26 // 1 DISCUSSION 2 Civil Local Rule 83.5(b) states, in part: 3 1. Any attorney charged with or convicted of a felony must report the charge or conviction within fourteen (14) days to the 4 Clerk of Court. 5 … 3. A non-court appointed attorney charged with a felony 6 must show cause why he or she should not be removed from any 7 pending civil or criminal case due to a conflict of interest. It will be the attorney’s burden to demonstrate to each judge assigned a 8 case on which the charged attorney wishes to appear that there is 9 no conflict and the attorney can appropriately discharge his or her duties to the client. 10 11 In his Motion to remain as counsel for Plaintiff, Mr. Rifat asserts that 12 his client is aware of the charges against him and wishes that he remain as 13 counsel. (ECF No. 15-2, ¶¶ 15-17). Mr. Rifat states that the charges against 14 him have no connection to his representation of Plaintiff. (Id.). Mr. Rifat is 15 vigorously defending himself against these very serious charges and correctly 16 points out that he is entitled to the presumption of innocence. (ECF No. 15-2, 17 ¶ 13). Nonetheless, being subject to significant criminal charges must be 18 stressful and distracting. 19 If that is all there was to this, the Court likely would accede to the 20 wishes of Plaintiff and allow Mr. Rifat to continue as its attorney. But, there 21 is more to the story. 22 Mr. Rifat acknowledges that he is a prospective witness in this case. 23 (ECF Nos. 10 at 3; 15-2, ¶ 15). Although starting out as a contract 24 dispute/collections case, Defendant’s Amended Counterclaims allege 25 misrepresentations by Plaintiff inducing Defendant to enter into the subject 26 contract. Of concern here, Defendant specifically asserts that representations 1 (ECF No. 8, ¶¶ 22, 23). 2 California Rule of Professional Conduct 3.7(a) provides: 3 A lawyer shall not act as an advocate in a trial in the which the lawyer is likely to be a witness unless: 4 1. the lawyer’s testimony relates to an uncontested issue; 5 2. the lawyer’s testimony relates to the nature and value of legal services rendered in the case; or, 6 3. the lawyer has obtained informed written consent from the 7 client. 8 Although the rule allows continued representation where the client consents 9 to the attorney’s dual role, a trial court has discretion to disqualify counsel. 10 See U.S. Equal Employment Opportunity Commission v. Bay Club Fairbanks 11 Ranch, LLC d/b/a Fairbanks Ranch Country Club, Inc., No. 18-cv-1853-W- 12 BLM, 2019 WL 5788446, at *1 (S.D. Cal. Nov. 6, 2019). 13 Mr. Rifat has declared that his client, through its principals, wants him 14 to remain as counsel, but does not state that he has obtained “informed 15 written consent” from the client. Nonetheless, the Court is cognizant that in 16 exercising its discretion under Rule 3.7(a), the court must “weigh the 17 competing interests of the parties against potential adverse effects on the 18 integrity of the proceeding before it and ‘should resolve the close case in favor 19 of the client’s right to representation by an attorney of [its] choice….’” 20 Smith, Smith & Kring v. Superior Court, 60 Cal. App. 4th, 573, 580 (1977) 21 (quoting Lyle v. Superior Court, 122 Cal. App. 3d, 470, 482 (1981)). 22 This is not a close case. Mr. Rifat admits that he is a prospective 23 witness and, based on the allegations of Defendant’s counterclaims, his 24 testimony will be contested. It is very early in the case; the Court vacated its 25 Early Neutral Evaluation/Case Management Conference to consider the 26 question of Mr. Rifat’s continued representation of Plaintiff. The progress of 1 ||continue as counsel at this time, only to have him forced to withdraw after 2 || litigation has fully commenced and strategic legal decisions have been made. 3 The Court of Appeals for the Ninth Circuit has stated that “[t]he policy 4 ||rationale for prohibiting representation is to avoid placing the advocate in the 5 ||‘unseemly and ineffective position’ of arguing his own credibility....” In re 6 || Johnston Hawks Ltd., 885 F. 2d 875, No. 88-1926, 1989 WL 107841, at *3 7 Cir. Sept. 12, 1989) (citation omitted). It seems inevitable in this case g |{that Mr. Rifat will end up in that “unseemly and ineffective position.” Better 9 ||for Plaintiff to obtain new counsel now rather than down the road where its 10 ||options may be more circumscribed. 11 CONCLUSION AND ORDER 12 Mr. Rifat’s Motion to Continue as Counsel is DENIED. Mr. Rifat is 13 || DISQUALIFIED from continued representation of Plaintiff in this case 14 |;}other than to assist Plaintiff in obtaining new counsel. Plaintiff must obtain 15 counsel who must make an appearance within 30 days. Following the 16 ||}appearance of new counsel, the Court will reschedule the vacated hearing. If 17 ||new counsel does not appear within 30 days, the Court will set the matter for 18 status hearing re: counsel. Mr. Rifat may appear at that hearing and 19 || provide any reasons for Plaintiffs inability to obtain new counsel at that 90 || time. 91 Dated: December 16, 2019 . Mitek. fou Le Hon. Mitchell D. Dembin 23 United States Magistrate Judge 24 25 26 27