BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 888|
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THIRD READING
Bill No: AB 888
Author: Dickinson (D)
Amended: 7/2/13 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 6-1, 6/25/13
AYES: Evans, Walters, Corbett, Jackson, Leno, Monning
NOES: Anderson
ASSEMBLY FLOOR : 74-0, 05/13/13 - See last page for vote
SUBJECT : State Bar of California: enforcement actions
SOURCE : State Bar of California
DIGEST : This bill requires the State Bar of California (State
Bar) to disclose, in confidence, the information in its
investigation of an unauthorized practice of law to the agency
responsible for criminal enforcement, and allows the State Bar
to request the Attorney General or other public prosecutor to
bring an enforcement action for the unauthorized practice of
law. This bill additionally allows the State Bar to bring a
civil action for any violation of the existing prohibitions on
the unauthorized practice of law, and requires the court in
those actions to impose a civil penalty, to consider providing
relief to any injured party, and award the State Bar reasonable
attorney's fees and costs. This bill, for actions referred to
the Attorney General or other prosecutor for enforcement, allows
the State Bar to recover their reasonable expenses incurred.
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ANALYSIS : Existing law requires all attorneys who practice
law in California to be members of the State Bar and establishes
the State Bar for the purpose of regulating the legal
profession.
Existing law provides that no person shall practice law in
California unless the person is an active member of the State
Bar.
Existing law provides that any person advertising or holding
himself/herself out as practicing or entitled to practice law or
otherwise practicing law who is not an active member of the
State Bar, or otherwise authorized pursuant to statute or court
rule to practice law in this state at the time of doing so, is
guilty of a misdemeanor.
Existing law provides that any person who has been involuntarily
enrolled as an inactive member of the State Bar, or has been
suspended from membership from the State Bar, or has been
disbarred, or has resigned from the State Bar with charges
pending, and thereafter practices or attempts to practice law is
guilty of a crime punishable by imprisonment in the state prison
or county jail.
Existing law provides that the willful failure of a member of
the State Bar, or one who has resigned or been disbarred, to
comply with an order of the Supreme Court to comply with
California Rules of Court Rule 955, which sets out the range of
allowable Supreme Court orders for resigned, disbarred, or
suspended attorneys, is an alternate felony-misdemeanor.
Existing law authorizes the State Bar to enjoin any violations
or threatened violations of the unauthorized practice of law in
a civil action brought in the superior court by the State Bar.
This bill allows the State Bar to disclose, in confidence,
information in its investigation of the unauthorized practice of
law, as specified, to the agency responsible for criminal
enforcement, or, exchange that information with that agency.
The State Bar may request the Attorney General, district
attorney, or a city attorney acting as a local prosecutor to
bring an enforcement action, or the State Bar may bring a civil
action in its own name for violations of the existing
prohibitions on the unauthorized practice of law.
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This bill, in a civil enforcement action brought by the State
Bar, in addition to other available remedies and relief
available, requires the court to:
Impose a civil penalty in an amount not to exceed $2,500 for
each violation, to be paid to the State Bar. In determining
the amount of the penalty, the court shall consider any
relevant circumstances presented by any of the parties to the
case, including, but not limited to, the nature and
seriousness of the misconduct, the number of violations, the
persistence of the misconduct, the length of time over which
the misconduct occurred, the willfulness of the defendant's
misconduct, and the defendant's assets, liabilities, and net
worth;
Impose a civil penalty for the intentional violation of any
injunction prohibiting the unlawful practice of law, in an
amount not to exceed $6,000 for each violation, to be paid to
the State Bar. If the conduct constituting the violation is
of a continuing nature, each day of that conduct shall be
deemed a separate and distinct violation. In determining the
amount of the civil penalty to assessed, the court shall
consider any relevant circumstances, including, but not
limited to, the extent of the harm caused by the conduct
constituting a violation, the nature and persistence of the
conduct, the length of time over which the conduct occurred,
the defendant's assets, liabilities, and net worth, and any
corrective action taken by the defendant;
Consider, when applicable, the relief available under
existing law in an enforcement action for any person who
obtained services or purchased goods that were offered or
provided in violation of the existing prohibitions on the
unauthorized practice of law, as specified; and
Award reasonable attorney's fees and costs and, in the
court's discretion, exemplary damages.
Existing law provides that any person who engages, has engaged,
or proposes to engage in unfair competition shall be liable for
a civil penalty not to exceed $2,500 for each violation, which
shall be assessed and recovered in a civil action brought in the
name of the people of the State of California by the Attorney
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General, by any district attorney, by any county counsel, city
attorney, or city prosecutor, as specified.
Existing law provides that if the action is brought at the
request of a board within the Department of Consumer Affairs or
a local consumer affairs agency, the court shall determine the
reasonable expenses incurred by the board or local agency in the
investigation and prosecution of the action. The amount of
those reasonable expenses must be paid to the board or local
consumer affairs agency, as specified.
This bill additionally includes actions brought at the request
of the State Bar, and, requires the amount of reasonable
expenses incurred by the State Bar to be paid to the State Bar
to fund its investigation and enforcement of the unauthorized
practice of law.
This bill requires the State Bar, by April 30 of each year,
report annually to the Assembly and Senate Judiciary Committees
concerning the numbers of complaints of unauthorized practice of
law received, of referrals under Business and Professions Code
(BPC) subdivision (a) of Section 6126.6, and of the proceedings
filed by the State Bar under BPC Sections 6030, 6126.3, 6126.4,
and 6126.6 in the preceding calendar year.
Background
The State Bar is a public corporation and is currently governed
by a 23-member Board of Trustees. Attorneys who wish to
practice law in California generally must be admitted and
licensed in this state and must be a member of the State Bar.
As of May 2013, the State Bar had 178,050 active members and
51,985 inactive members, which represents a slight annual
increase in both active members and inactive members. Total
State Bar membership is listed at 242,738, which includes 2,122
judge members and 10,580 members who are "Not Eligible to
Practice Law."
Under existing law, no person can practice law unless the person
is an active member of the State Bar. With regards to the
history and scope of that general prohibition, the California
Supreme Court observed:
The California Legislature enacted [the prohibition on the
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unauthorized practice of law (UPL)] in 1927 as part of the State
Bar Act (Act), a comprehensive scheme regulating the practice of
law in the state. Since the Act's passage, the general rule has
been that, although persons may represent themselves and their
own interests regardless of State Bar membership, no one but an
active member of the State Bar may practice law for another
person in California. The prohibition against unauthorized law
practice is within the state's police power and is designed to
ensure that those performing legal services do so competently.
Although the Act did not define the term "practice law," case
law explained it as "'the doing and performing services in a
court of justice in any matter depending therein throughout its
various stages and in conformity with the adopted rules of
procedure.'" (Birbrower, Montalbano, Condon & Frank v. Superior
Court (1998) 17 Cal.4th 119, 127-128.)
In addition to the general UPL prohibition, existing law
specifically provides that any person advertising or holding
himself/herself out as practicing or entitled to practice law
who is not an active member of the State Bar, or otherwise
authorized to practice law, is guilty of a misdemeanor. The
State Bar has the authority to bring a civil action enjoin to
violations of those and other provisions that similarly prohibit
the UPL. Despite those provisions, an article by Laura Ernde in
the February 2013 California Bar Journal noted continued
difficulty in addressing the UPL by certain individuals,
specifically:
In California, the State Bar gets hundreds of complaints a year
about individuals and businesses practicing law without a
license, claiming that they can solve legal problems for
consumers, Assistant Chief Trial Counsel Dane Dauphine said [].
Because it doesn't have jurisdiction over non-attorneys, the
State Bar generally tries to address the problem by sending
cease-and-desist letters to the offenders and reporting the
offenders to other law enforcement agencies, Dauphine said. . .
. UPL, is a crime punishable by a misdemeanor conviction.
In reality, law enforcement has other higher priorities to
address, State Bar Deputy Executive Director Robert Hawley said.
Many of the biggest abuses occur in immigrant communities where
people don't understand that the legal system here is different
than in their home countries. (Laura Ernde, State Bar to look at
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limited-practice licensing program, Feb. 2013, California Bar
Journal [as of June 20, 2013.)
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 6/25/13) (unable to reverify)
State Bar of California (source)
OPPOSITION : (Verified 6/25/13) (unable to reverify)
California Association of Legal Document Assistants
Consumers for a Responsive Legal System
Cost Effective Legal Access California
Nolo Press Occidental
Santa Barbara Paralegal Association
ARGUMENTS IN SUPPORT : According to the author, "The State Bar
has little authority to stop the unauthorized practice of law
[(UPL)]. The limit of this authority was recently highlighted
by the post-foreclosure scam where businesses would promise to
help homeowners remain in their homes for a period of time after
they had already been foreclosed on. The perpetrators would act
as attorneys and accept payment for services that they did not
provide. . . . To enhance the State Bar's enforcement of UPL,
AB 888 would allow the State Bar to obtain the same relief of
civil penalties, costs and attorney's fees, and remedies for
consumers that courts may now award in civil enforcement actions
by the Attorney General, district attorneys and city attorneys.
AB 888 would also allow the State Bar to recover costs of its
investigation when it turns over its investigation to the
Attorney General, a [district attorney] or some other local
prosecutor."
ARGUMENTS IN OPPOSITION : Regarding the impact on LDAs, Cost
Effective Legal Access California asserts that this bill gives
the State Bar "enormous financial incentives to pursue UPL
claims whether they are legitimate or not . . . If LDAs or
potential LDAs are fearful of the risk imposed by the crippling
legal penalties allowed by AB 888 every time they attempt to
legally provide assistance, they will simply find another line
of work that does not offer this hazard." Other opposition
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letters assert, among other things, that legal document
assistants (LDAs) is unable to defend themselves "against a
frivolous lawsuit against a well-funded state agency such as the
State Bar," that AB 888 will unjustly target non-lawyers and
stifle competition, and that the State Bar has a natural
conflict of interest when it comes to regulating LDAs because
many of the Bar's members see LDAs as competition.
ASSEMBLY FLOOR : 74-0, 5/13/13
AYES: Achadjian, Alejo, Atkins, Bigelow, Bloom, Blumenfield,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Beth
Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray, Grove,
Hagman, Hall, Harkey, Roger Hernández, Jones, Jones-Sawyer,
Levine, Linder, Logue, Maienschein, Mansoor, Medina, Melendez,
Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande,
Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk,
Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Torres,
Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Allen, Ammiano, Donnelly, Holden, Lowenthal,
Vacancy
AL:d 7/2/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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