Reported / Citable
Background
Shine TV Limited filed a complaint against MasterChef LLC and its sole member, Husein Varvani, on April 19, 2024. MasterChef LLC was properly served through its registered agent on April 26, 2024. Rather than retain counsel, Varvani attempted to represent both himself and the LLC pro se. The district court issued multiple orders to show cause, warning that failure to respond could result in default judgment. Varvani repeatedly filed responses on behalf of both defendants, requesting either that the court allow him to represent the LLC pro se or that it appoint counsel. The magistrate judge was assigned pretrial management under 28 U.S.C. § 636(b).
By the time of this recommendation, the court had ordered MasterChef LLC to retain counsel by July 12, 2024. MasterChef failed to comply with this deadline and did not retain an attorney.
The Court’s Holding
The magistrate judge held that an LLC cannot proceed pro se in federal court and must be represented by licensed counsel. This rule applies uniformly, regardless of whether the LLC is a single-member entity or whether its sole member is a party to the case. Under 28 U.S.C. § 1654, while individuals have a right to self-representation, corporations and LLCs—as artificial legal entities—can only appear through licensed attorneys. As the court noted, this principle is well-settled: even when a person seeking to represent the LLC is its president and major shareholder, pro se representation is prohibited.
The magistrate judge also denied Varvani’s request for court-appointed counsel, holding that no exceptional circumstances warranted such an appointment. Civil defendants have no automatic constitutional right to appointed counsel; appointment is discretionary only when exceptional circumstances exist. Here, the record showed merely that Varvani believed the case was meritless and did not want to spend money on an attorney—grounds insufficient to trigger court appointment. Additionally, 28 U.S.C. § 1915(e)(1), which permits appointment of counsel for indigent litigants, applies only to natural persons, not to artificial entities like LLCs.
Accordingly, the magistrate judge recommended that the court enter default against MasterChef LLC under Federal Rule of Civil Procedure 55(a) for its failure to retain counsel and respond to the complaint within the required timeframe. The magistrate recommended that the plaintiff be given 30 days from entry of the order to move for default judgment.
Key Takeaways
- LLCs cannot be represented pro se in federal court, even by their sole member or owner.
- Belief that a case is meritless does not constitute exceptional circumstances justifying appointed counsel in a civil case.
- Section 1915(e)(1) appointment authority applies only to natural persons, not to artificial entities.
- Failure to retain required counsel after court orders may result in default judgment under FRCP 55.
Why It Matters
This decision reinforces settled federal law that LLCs—even single-member LLCs—must be represented by licensed counsel in federal court. Business owners cannot avoid this requirement by claiming to be their company’s representative. The ruling clarifies that courts have broad discretion to enforce this requirement through default, and that financial hardship or disagreement with the lawsuit does not override it.
The case also reaffirms that appointed counsel in civil cases is a last resort for exceptional circumstances only. Defendants who fail to comply with court orders to retain counsel do so at the risk of losing their right to be heard on the merits. This recommendation—pending the district judge’s adoption—has significant implications for pro se defendants attempting to represent business entities and for the enforcement of federal procedural rules.