1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 SECURITIES AND EXCHANGE Case No. 5:20-cv-04855-BLF

COMMISSION,

8 Plaintiff, ORDER GRANTING MOTION TO 9 WITHDRAW AS COUNSEL v. 10 YOUPLUS, INC., et al., 11 Defendants. 12 13 Before the Court is counsel for Defendant Shaukat Shamim’s Motion to Withdraw as 14 Counsel. ECF No. 34. The Court finds that this Motion may be determined without oral 15 argument. Civ. L.R. 7-1(b). Accordingly, the September 19, 2024, hearing is hereby VACATED. 16 For the following reasons, the Court GRANTS the Motion to Withdraw as Counsel. 17 I. BACKGROUND 18 On July 20, 2020, the SEC initiated this action against Defendants Shaukat Shamim 19 (“Shamim”) and YouPlus, Inc. (“YouPlus”). ECF No. 1. Each defendant filed an Answer on 20 January 25, 2021. ECF Nos. 20 & 21. The Initial Case Management Conference took place on 21 February 18, 2021. ECF No. 27. Thereafter, on March 12, 2021, the Court entered an Order 22 staying all discovery in this matter pending resolution of a related criminal case, United States v. 23 Shaukat Shamim, Case No. 3:22-cr-00227-JD-1 (N.D. Cal.). ECF No. 30. The Court 24 subsequently entered an Order on May 2, 2023, granting the Parties’ stipulation that the pretrial 25 and trial dates in this matter should be vacated, and that the Parties should file a request for a 26 status hearing “within 30 days after resolution of the District Court criminal proceeding” against 27 Defendant Shaukat Shamim. ECF No. 33. Mr. Shamim’s trial in the criminal proceeding is 1 On July 31, 2024, Mr. Shamim’s counsel, Gail Shifman, filed a Motion to Withdraw as 2 Counsel for Defendant. ECF No. 34. The Motion was accompanied by a Declaration noting that 3 all parties were notified that same day of Counsel Shifman’s intent to file a motion to withdraw. 4 Id. at 7. Counsel Shifman had previously notified Mr. Shamim of her forthcoming motion to 5 withdraw on May 26, 2022. Id. The SEC filed a response to Counsel Shifman’s Motion on 6 August 14, 2024, noting that it “t[ook] no position on defense counsel’s motion.” ECF No. 36. 7 No response has been filed by Mr. Shamim. 8 II. LEGAL STANDARD 9 “Counsel may not withdraw from an action until relieved by order of the Court after 10 written notice has been provided, reasonably in advance, to the client and to all other parties who 11 have appeared in the case.” Civ. L.R. 11-5(a). Withdrawal of counsel is governed by the State 12 Bar of California’s standards of professional conduct. In re Pers. Web Techs., LLC et al., Pat. 13 Litig., No. 18-MD-02834-BLF, 2022 WL 2290592, at *3 (N.D. Cal. June 24, 2022) (citation 14 omitted). Accordingly, an attorney is required to take “reasonable steps to avoid reasonably 15 foreseeable prejudice to the rights of the client, such as giving the client sufficient notice to permit 16 the client to retain other counsel, and complying with paragraph (e)” before withdrawing. Cal. R. 17 Prof. Conduct 1.16(d). 18 The decision to permit counsel to withdraw is within the sound discretion of the trial court. 19 United States v. Carter, 560 F.3d 1107, 1113 (9th Cir. 2009). Courts consider several factors 20 when deciding a motion for withdrawal, including: “(1) the reasons counsel seeks to withdraw; (2) 21 the possible prejudice that withdrawal might cause to other litigants; (3) the harm that withdrawal 22 might cause to the administration of justice; and (4) the extent to which withdrawal will delay 23 resolution of the case.” In re Pers. Web Techs., LLC et al., Pat. Litig., 2022 WL 2290592, at *3 24 (citation omitted). 25 III. DISCUSSION 26 The Court finds that Counsel Shifman has provided sufficient reasons to justify withdrawal 27 as counsel. As the basis for the Motion, Ms. Shifman cites two provisions of California Rule of 1 ... renders it unreasonably difficult for the lawyer to carry out the representation effectively,” id. 2 1.16(b)(4), or where “‘the client breaches a material term of an agreement with . . . the lawyer 3 relating to the representation, and the lawyer has given the client a reasonable warning after the 4 breach that the lawyer will withdraw unless the client fulfills the agreement,” id. 1.16(b)(5). ECF 5 || No. 34 at 4,7. Ms. Shifman identifies the fact that Mr. Shamim has been unresponsive to her 6 || communications, rendering her unable to effectively represent her client or fulfill her duties to the 7 || Court. ECF No. 37 95. Ms. Shifman also warned Mr. Shamim over two years ago that he was in 8 breach of the material terms of his agreement with his counsel, and that she intended to file a 9 motion to withdraw. Id. 10 Furthermore, Ms. Shifman’s withdrawal is unlikely to prejudice other litigants, harm the 11 administration of justice, or delay resolution of the case. The Court notes that Plaintiff SEC does 12 || not oppose the motion to withdraw. See ECF No. 36. In addition, this suit remains at an early 5 13 stage in the litigation: discovery in this matter has been stayed since shortly after the Initial Case 14 Management Conference, see ECF Nos. 27 & 30, and the pretrial, trial, and dispositive motion 3 15 hearing dates have all been vacated, ECF Nos. 31 & 33. The Parties will seek a status hearing 16 “within 30 days after resolution of the District Court criminal proceeding,” and the first date of 3 17 that trial proceeding is still nearly two months away. See ECF No. 33. In short, Mr. Shamim has 18 sufficient time to secure substitute representation before the proceedings in this matter re- 19 || commence. Counsel Shifman’s Motion to Withdraw as Counsel is hereby GRANTED. 20 21 IT IS SO ORDERED. 22 23 Dated: August 19, 2024

H LABSON FREEMAN

25 United States District Judge 26 27 28