The State Bar seeks public comment regarding a proposed State Bar Rule of Procedure 5.137 setting forth guidelines for the imposition and collection of monetary sanctions in State Bar disciplinary proceedings
Deadline: October 25, 2019
The State Bar is seeking public comment on a redrafted proposed rule setting forth guidelines for the imposition and collection of sanctions to be ordered by the California Supreme Court when imposing suspension or disbarment of an attorney. A prior version of proposed rule 5.137 was submitted to the California Supreme Court for approval. After receiving comments from the California Supreme Court, staff worked closely with State Bar Court, to redraft the proposed rule.
A. Definition of “Violation”
Subsections (A), (C) and (D) of proposed rule 5.137 largely track the statutory language of Business & Professions Code section 6086.13 with some important additions. First, Business & Professions Code section 6086.13 subdivision (a) does not specify whether the $50,000 maximum for monetary sanctions is per disciplinary order or per individual respondent. Moreover, the statute does not define the term “violation.” Without a definition, “violation” could be interpreted as applying to either an individual count charged against a respondent in a complaint or to each transaction described within a count.
Proposed rule 5.137 clarifies that the maximum $50,000 referred to in the statute is per disciplinary order. Further, subsection (b) defines to the term “violation” to mean “each count (including its subparts) contained in a Notice of Disciplinary Charges for which the State Bar Court has found the licensee culpable, or each violation of a rule or statute the attorney admits to have violated in a stipulation.” This definition was chosen to make clear that “violation” means a violation of The State Bar Act or Rules of Professional Conduct. The Office of Trial Counsel charges one violation per count contained in a Notice of Disciplinary Charges. Similarly, with respect to stipulations, each “conclusion of law” being stipulated to is an independent violation of the State Bar Act or Rules of Professional Conduct.
At its meeting on September 19, 2019, the Board of Trustees’ Regulation and Discipline Committee considered these three proposed amendments and authorized a 60-day public comment period.
B. Guidelines for Imposition of Monetary Sanctions
Subsection (E) sets forth the specific guidelines for the imposition and collection of monetary sanctions. This subsection provides State Bar Court broad discretion in determining the amount of monetary sanctions depending on the specific facts and circumstances of the discipline case. While the proposed rule has suggested sanctions ranges per order based on the nature of the discipline, it also specifies that “the State Bar Court may, in its discretion, deviate from the ranges set forth in this subsection to a maximum of $5,000 for each violation, and $50,000 for each disciplinary order.” (Proposed rule 5.137(E)(3).) Deviations should be reasonably based on the facts and circumstances for each case. Id.
For example, for a disbarment case with five serious misconduct violations, State Bar Court may determine it is appropriate to recommend $25,000 in monetary sanctions total ($5,000 per violation). This amount is over the suggested guideline range of $5,000 per disbarment order, but within the $50,000 maximum per disciplinary ordered authorized by Business & Professions Code section 6086.13 subdivision (a).
The proposed rule further provides that “if the same conduct is encompassed by two or more separate violations, the Court generally should not impose more than one monetary sanction for that conduct. Instead, the Court should consider the most serious applicable violation for that conduct.” (Proposed rule 5.137(E)(3)(b).) This is analogous to California Penal Code section 654 which provides that the same punishable act cannot be punished under more than one provision of law. This language was added because there may be one disciplinary order containing multiple violations for the same conduct. In such cases, State Bar Court should consider the most serious violation when determining the sanctions amount, rather than imposing two separate sanctions per violation.
C. Waivers, Payment Plan and Extensions of Time for Payment
Subsection (E)(4)-(5) specifies how monetary sanctions may be waived, in whole or in part, or the time for payment extended for specified good cause or in the interests of justice. Specifically, subsection (E)(4) provides that the State Bar Court may use its discretion to waive costs or extend time to pay based on “on a finding of financial hardship, special circumstances, whether a licensee’s ability to pay criminal or civil judgments arising out of the discipline case is adversely affected, for good cause, or in the interests of justice.”
Subsection (E)(5) permits the licensee and the Office of Trial Counsel to stipulate to a waiver, payment plan and/or an extension of time for payment which must be approved by State Bar Court. Subsection (E)(6) provides a way for the licensee to affirmatively seek such relief in State Bar Court, following the procedures set forth in the State Bar Rules (currently, rule 5.130).
D. Payment In Full Must Be Made Prior to Reinstatement
Subsection (F) specifies that monetary sanctions must be paid in full as a condition of reinstatement or return to active status, unless time for payment is extended. This ensures that monetary sanctions are treated the same as all other payment imposed as part of a disciplinary order by the California Supreme. (see Bus. & Prof. Code, § 6140.5 [payment of client security fund reimbursement is a condition of continued practice and/or reinstatement]; Bus. & Prof. Code, § 6140.7 [unless time for payment is extended, disciplinary costs shall be paid as a condition of reinstatement or return to active membership].)
Lastly, subsection (G) states that imposed monetary sanctions are enforceable as a money judgment. This assures that the State Bar is able to undertake appropriate collection activities necessary to enforce its legal rights to all court ordered payments.
This proposal, if adopted, would add a new rule that would require the State Bar Court to consider whether a respondent recommended to be suspended or disbarred, or who has resigned with charges pending, should be ordered to pay monetary sanctions as part of a disciplinary recommendation to the California Supreme Court. The rule sets forth criteria for the imposition and collection of these sanctions.
If adopted, the proposed rule may provide additional funding to the State Bar Client Security Fund. (Business and Professions Code section 6054(a).)
The proposed rule may necessitate additional resources in OCTC and State Bar Court in order to assess monetary sanctions recommendations, handle respondent’s challenges to sanctions, and evaluate respondent’s requests for sanctions’ waivers, reductions, or payment plans.
Regulation and Discipline Committee
October 25, 2019
Office of General Counsel
180 Howard Street
San Francisco, CA 94105
Please reference the specific item in your comments.