Southern District of New York Judge Lewis A. Kaplan on Monday prevented attorneys Robert Fink and Caroline Rule of the Manhattan law firm Kostelanetz & Fink from withdrawing as defense counsel to former KPMG partner Richard Smith in United States v. Stein, 05 Crim. 888.
"Having signed on for the voyage, they are on for the voyage unless relieved by the court," Kaplan said at a conference.
On July 16, Kaplan dismissed criminal tax fraud charges against Smith and 12 other former KPMG partners. The same day, Southern District of New York prosecutors appealed his decision to the 2nd U.S. Circuit Court of Appeals, and Fink and Rule resigned from the case. The defense attorneys notified the government, which faxed a letter to Judge Kaplan.
At the conference Monday, Fink argued that when the government filed its notice of appeal it stripped Kaplan of jurisdiction. As a result, the judge could not prevent his firm from withdrawing. But Kaplan disagreed. He cited S.D.N.Y. Civ. R. 1.4, which states that "an attorney who has appeared as attorney of record for a party may be relieved or displaced only by an order of the court and may not withdraw from a case without leave of the court granted by order."
Kaplan said a notice of appeal only prevents a district court from changing an order or judgment that is being appealed. "The power of the district court remains standing notwithstanding the notice of appeal," Kaplan said.
In an interview, Fink said Kaplan went "further than any other district court" on the jurisdictional issue. Last week, The Wall Street Journal's Law Blog quoted Fink as saying that he did not want to represent Smith for another year or two without getting paid. Fink said that his 12-person firm was paid $400,000 by KPMG but then the firm stopped paying legal fees for the defendants. The fees issue was not raised at Monday's conference.