The common-law rule is that a corporation appearing in court must be represented by an attorney. That’s the rule in Washington and all federal courts. Not surprisingly, earlier this year Washington applied that rule to limited liability companies. Marina Condo. Homeowner’s Ass’n v. Stratford at the Marina, LLC, 161 Wn. App. 249, 263, 254 P.3d 827 (2011).
One might have thought that the Marina decision would have foreclosed the issue, but the plaintiff in Dutch Village Mall, LLC v. Pelletti, 162 Wn. App. 531, 256 P.3d 1251 (July 5, 2011), an LLC with a single member, contended that its sole member should be able to represent it in court.
The Dutch Village LLC owned a shopping mall and sued a tenant. The LLC’s complaint was signed by its sole member, Jay Lei. The defendant moved to strike the complaint on the grounds that it had to be signed by an attorney. The trial court granted the motion and the Court of Appeals accepted review. Lei argued for an exception:
Lei contends the right to appear pro se belongs to a single-person LLC as much as a person because the single owner is likewise acting solely on his own behalf, making all the decisions and taking all the risks, much like a sole proprietor. Lei contends the separate legal entity status of a single member LLC is a technicality that the court should disregard.
Id. at 536.
The court rejected Lei’s argument. First, said the court, allowing nonlawyers to conduct litigation creates burdens for the other party and for the court, resulting in poorly drafted pleadings, inadequate presentations of motions, and proceedings that are unduly prolonged and numerous. Id. at 538. (This does seem to reflect a hostility to pro se litigants, even when the litigant is an individual and therefore fully entitled to represent him- or herself.) Additionally, said the court, a lay litigant lacks many of an attorney’s ethical responsibilities. The court referred to the “elaborate and inappropriate claims pleaded by Lei in this case and his refusal to withdraw a moot and pointless motion for default.” Id.
Second, the court was troubled by the inconsistency between disregarding the entity for the member’s convenience (thereby obviating the need for a lawyer in court), and respecting it for other issues (the LLC’s liability shield). For example, if the defendant successfully counterclaimed against the LLC, Lei presumably would be unwilling to disregard the LLC and accept personal liability.
The court also pointed out that a rule allowing single-member LLCs to appear in court without an attorney would likely result in disputes over the LLC’s claim to have only one owner. What if the LLC’s ownership changed in the middle of a lawsuit? Could a plaintiff assign its claim to a single-member LLC, thereby eliminating the need to hire a lawyer to represent it in court?
The court’s refusal to allow the LLC to be represented in court by its single member is unexceptional and consistent with the rules on corporations. It is also consistent with the lawyer licensing system and the body of rules that protect lawyers’ monopoly on legal services. The system is usually justified by the need to protect the public from incompetent or unethical legal representation, but the Dutch Village case shows that the convenience of the courts is also a factor in supporting the rule.