BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1159
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          Date of Hearing:  September 12, 2013

                           ASSEMBLY COMMITTEE ON JUDICIARY
                                Bob Wieckowski, Chair
                 AB 1159 (Gonzalez) - As Amended:  September 11, 2013

                                   FOR CONCURRENCE
           
          SUBJECT  :  IMMIGRATION ACT SERVICES

           KEY ISSUE  :  SHOULD IMPORTANT ADDITIONAL CONSUMER PROTECTIONS BE  
          ENACTED TO PROTECT POTENTIALLY VULNERABLE IMMIGRANT CLIENTS FROM  
          FRAUD AND ABUSE REGARDING PROSPECTIVE IMMIGRATION REFORM ACT  
          SERVICES?

           FISCAL EFFECT  :  As currently in print this bill is keyed fiscal.

                                      synopsis

          According to supporters, including the State Bar and others, AB  
          1159 is an important consumer protection measure that will  
          immediately assist in helping to protect the vulnerable  
          community that will be seeking assistance under proposed federal  
          immigration reform.  Reports indicate that immigration fraud has  
          already begun and a few bad actors are already making guarantees  
          they cannot fulfill, as well as already taking fees for services  
          they cannot possibly provide until the federal government has  
          acted.  AB 1159 is designed to significantly help reduce fraud  
          and to provide appropriate enforcement tools to recover against  
          those individuals who do engage in fraudulent behavior.  
          By putting these safeguards in place, it is hoped that the bill  
          will help prevent fraud and avoid more significant repercussions  
          down the road. 

          Specifically, this bill would require that when a contract for  
          legal services is subject to certain existing laws, an attorney  
          providing immigration reform act services must provide a written  
          notice informing the client that he or she may report complaints  
          to specified entities. 
          The bill would also prohibit an attorney or an immigration  
          consultant from demanding, or accepting the advance payment of,  
          any funds for immigration reform act services before the  
          enactment of an immigration reform act, as defined, and would  
          require any funds received after the effective date of this  
          bill, but before the enactment of an immigration reform act, to  








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          be refunded to the client.  The bill would require any funds  
          that were received before the effective date of the bill for  
          services not yet rendered to be either refunded to the client or  
          deposited in a client trust account, as specified. This bill  
          would also increase the amount of bond required to be filed by  
          an immigration consultant from $50,000 to $100,000, and require  
          consultants to itemize their contracts, establish a client trust  
          account, and to deposit any funds received from the client prior  
          to performing immigration reform act services.  Finally, the  
          bill would make it a violation of specified provisions of law  
          relating to the unauthorized practice of law for any person who  
          is not an attorney to literally translate from English into  
          another language the phrases "notary public," "notary,"  
          "licensed," "attorney," "lawyer," or any other terms that imply  
          that the person is an attorney.  As the result of the author's  
          strong efforts, the bill has no known opposition.

           SUMMARY  :  Imposes various restrictions and obligations on  
          persons who would offer services with respect to potential  
          federal immigration reform legislation that may be enacted.   
          Specifically,  this bill  :  

          1)Provides that it is unlawful for an attorney to demand, or  
            accept advance payment of, any funds from a person for  
            immigration reform act services before the enactment of an  
            immigration reform act.  Any funds received after the  
            effective date of this bill, but, before the enactment of an  
            immigration reform act must be promptly refunded to the  
            client, as specified.

          2)Provides that:

             a)   if an attorney providing immigration reform act services  
               accepted funds prior to the effective date of this bill,  
               and the services provided in connection with payment of  
               those funds were rendered, the attorney shall promptly  
               provide the client with a statement of accounting  
               describing services rendered; and

             b)   any funds received before the effective date of this  
               bill for which immigration reform act services were not  
               rendered prior to the effective date, shall be either  
               refunded to the client or shall be deposited in a client  
               trust account.  If the attorney elects to deposit funds in  
               a client trust account, he or she shall provide a specified  








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               written notice to the client, in English and the client's  
               native language.

          3)Provides that when a contract for legal services is subject to  
            specified laws an attorney providing immigration reform act  
            services shall provide a written notice informing the client  
            where he or she may report complaints. 

          4)Requires the notice to be attached or incorporated into any  
            written contract for immigration reform act services, and be  
            signed by both the attorney and client. This bill would  
            require the notice to be in English and in one of the  
            languages translated by the State Bar, if the contract for  
            immigration reform act services was negotiated in one of those  
            languages.

          5)Requires the State Bar to provide the form of the notice, post  
            the form and translations of the form on its Internet Web  
            site, and to translate the form into Spanish, Chinese,  
            Tagalog, Vietnamese, Korean, Armenian, Persian, Japanese,  
            Russian, Hindi, Arabic, French, Punjabi, Portuguese,  
            Mon-Khmer, Hmong, Thai, and Gujarati.  This bill would specify  
            that an attorney who meets specified criteria shall be  
            responsible for adding and translating the name of, toll-free  
            number of, and information on the Internet Web site for, the  
            bar or court in which he or she is admitted to practice law.

          6)Provides that failure to comply with the notice and  
            translation requirement renders the contract voidable at the  
            option of the client, and the attorney shall, upon the  
            contract being voided, be entitled to collect a reasonable  
            fee.

          7)Makes the above notice and translation provision operative  
            when the State Bar posts on its Internet Web site the required  
            form and translations, and, require the State Bar to post the  
            form and translations as soon as practicable but no later than  
            45 days after the effective date of the bill.

          8)Defines "immigration reform act" as any pending or future act  
            of Congress that is enacted after the effective date of this  
            section but before January 1, 2017, including but not limited  
            to the "Border Security, Economic Opportunity, and Immigration  
            Modernization Act" (S. 744, 2013), as specified.  This bill  
            would require the State Bar to announce and post on its  








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            Internet Web site when an immigration reform act has been  
            enacted.

          9)Defines immigration reform act services as services offered in  
            connection with an immigration reform act that are necessary  
            in the preparation of an application and other related initial  
            processes in order for an undocumented immigrant, as  
            specified, to attain lawful status under the immigration  
            reform act.

          10)Provides that it is a violation of the existing prohibition  
            on non-attorneys advertising or holding themselves out as  
            entitled to practice law for any person who is not an attorney  
            to literally translate from English into another language, in  
            any document, any words or titles, including "notary public,"  
            "notary," "licensed," "attorney," or "lawyer" that imply the  
            person is an attorney, as specified.  This bill would provide  
            that a person who violates the translation prohibition is  
            liable for a civil penalty not to exceed $1,000, as specified.

          11)Provides that, in a civil action brought by the State Bar,  
            the civil penalty collected shall be paid to the State Bar and  
            allocated as specified, and that the State Bar shall annually  
            report any collection and expenditure of funds for the  
            preceding calendar year to the Assembly and Senate Committees  
            on Judiciary, as specified.

          12)With respect to immigration consultants, the bill:

               a)     increases the amount of the bond to $100,000,  
                 effective July 1, 2014;
               b)     requires each service to be performed to be itemized  
                 with an explanation of the purpose and process of the  
                 service, and make corresponding changes;
               c)     revises the existing exemptions for non-profit tax  
                 exempt corporations who help client complete application  
                 forms by clarifying that only a nominal fee may be  
                 charged;
               d)     requires an immigration consultant who provides  
                 immigration reform act services to establish and deposit  
                 into a client trust account any funds received from a  
                 client prior to performing those services;
               e)     allows an immigration consultant providing  
                 immigration reform act services for the client to  
                 withdraw funds received from that client:  1) after  








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                 completing one or more of the itemized services, as  
                 specified; or 2) after completing one or more of the  
                 documents listed, as specified;
               f)     prohibits an immigration consultant from demanding  
                 or accepting advance payment of any funds from a person  
                 for immigration reform act services before the enactment  
                 of an immigration reform act; 
               g)     provides that funds received after the effective  
                 date of this bill but before enactment of an immigration  
                 reform act must be refunded to the client;
               h)     provides that for funds received before the  
                 effective date of the bill: 1) the consultant must  
                 provide the client with an accounting for services that  
                 were rendered; and 2) any funds received for which  
                 services have not yet been rendered must be refunded or  
                 deposited into a client trust account, as specified; 
               i)     states that a person who violates the above  
                 restrictions on advance fees shall be subject to a civil  
                 penalty not to exceed $1,000, as specified, and require a  
                 court to grant a prevailing plaintiff reasonable  
                 attorney's fees and costs. ; and
               j)     expressly prohibits the literal translation of the  
                 phrase "notary public" into Spanish as "notario public"  
                 or "notario."

          13)States that a violation of the existing prohibition on  
            translating terms that imply the person is an attorney is a  
            violation of the State Bar Act's prohibition on non-attorney's  
            holding themselves out to be authorized to practice law.  In  
            addition to the remedies and penalties under the Immigration  
            Consultants Act ( ICA), this bill provides that a person who  
            violates this prohibition would be subject to a civil penalty  
            of up to $1,000 per day for each violation, as specified.

           EXISTING LAW  :

          1)Requires all attorneys who practice law in California to be  
            members of the State Bar of California (State Bar) and  
            establishes the State Bar for the purpose of regulating the  
            legal profession.  (Bus. & Prof. Code Sec. 6000 et seq.  All  
            further statutory references are to this code unless otherwise  
            noted.)

          2)Provides that in non-contingent fee matters, an attorney must  
            have a written contract for services with their client  








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            whenever the client's total expense, including fees, will  
            foreseeably exceed $1,000, as specified.  The written contract  
            must contain: (1) any basis compensation; (2) the general  
            nature of the legal services to be provided; and (3) the  
            respective responsibilities of the attorney and the client as  
            to the performance of the contract. Failure to comply with the  
            written contract requirement renders the agreement voidable at  
            the option of the client, and the attorney shall, upon the  
            agreement being voided, be entitled to collect a reasonable  
            fee. (Section 6148 (a), (c).)

          3)Requires a person who negotiates primarily in Spanish,  
            Chinese, Tagalog, Vietnamese, or Korean to deliver to the  
            other party to the contract a translation of the contract or  
            agreement in the language in which the contract or agreement  
            was negotiated, as specified.  That requirement applies to  
            various contracts and agreements, including, those for the  
            purpose of obtaining legal services.  (Civ. Code Sec. 1632  
            (b).)

          4)Provides that no person shall practice law in California  
            unless the person is an active member of the State Bar.   
            (Section 6125.)

          5)Provides that any person advertising or holding himself or  
            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.  (Section 6126(a).)

          6)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.   
            (Section 6030.)

          7)Under the Immigration Consultants Act (ICA), regulates the  
            activities of immigration consultants by requiring them to  
            pass a background check conducted by the Secretary of State  
            (SOS), file a $50,000 bond with the SOS, to comply with  
            specified notice requirements, and to provide clients with  
            written contracts in their native language, as specified.   
            (Section 22440 et seq.)

          8)Further prohibits an immigration consultant from literally  








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            translating words or titles that imply that the person is an  
            attorney, as specified.  (Section 22442.3.)

          9)Provides that a violation of the ICA subjects a person to a  
            civil penalty not to exceed $100,000 for each violation, is a  
            misdemeanor punishable by a fine of not less than $2,000 or  
            more than $10,000, and that the second or subsequent violation  
            is a felony.  (Section 22445.)

          10)Allows a person claiming to be aggrieved to bring a civil  
            action for injunctive relief, or damages, or both, and  
            requires a court finding a violation to award the plaintiff  
            actual damages plus treble damages, as specified, and  
            reasonable attorney's fees and costs.  (Section 22446.5.)   
            Existing law further allows a person who is awarded damages to  
            recover those damages from the required bond, as specified.   
            (Section 22447.)

           COMMENTS  :  In support of the bill the author states:

            AB 1159 is an important consumer protection measure that  
            will immediately assist in helping to protect the vulnerable  
            community that will be seeking assistance under  
            comprehensive immigration reform.

            Immigration fraud has already begun.  A few bad actors are  
            already making guarantees they cannot fulfill, and are  
            already taking fees for services they cannot possibly  
            provide until the federal government has acted.

            If immigration reform passes, it is estimated that 11  
            million nationwide will be impacted.  Of that 11 million,  
            approximately 2.55 million live in California.  No one knows  
            how many of the 2.55 million will be victimized by fraud,  
            but we do know the risk of fraud is very high since the  
            fraud is already occurring. . .  AB 1159 is designed to  
            significantly help reduce fraud and to provide appropriate  
            enforcement tools to recover against those individuals who  
            do engage in fraudulent behavior.  
                 
            AB 1159 is a reasonable approach to ensure consumer protection  
            for immigrants.  By putting in place these safeguards now, the  
            bill will help prevent the fraud at the front end, avoiding  
            more significant repercussions down the road.









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           This Bill Imposes Restrictions and Obligations With Respect to  
          Services In Connection With Pending Proposals For Federal  
          Immigration Reform.   As the media has widely reported, Congress  
          has spent much of the year debating potential changes to federal  
          immigration law.  While the outcome of that debate is far from  
          certain, various individuals have apparently sought to charge  
          immigrants for various legal and paralegal or quasi-legal  
          services that cannot appropriately be performed prior to  
          enactment of the proposed legislation.  Given the potential size  
          of the immigrant pool that may be affected, a large number of  
          people is at risk of exploitation. Undocumented immigrants may  
          be particularly vulnerable to abuse by unscrupulous businesses  
          and individuals because of the risks they face in asserting  
          their rights as consumers and victims of fraud or other  
          wrongdoing.

          Under the bill, "immigration reform act" is defined as an act of  
          Congress that is enacted after the effective date of this bill  
          before January 1, 2017.  With respect to attorneys, the bill  
          specifies that immigration reform act services are those  
          services offered in connection with an immigration reform act  
          that are necessary in the preparation of an application and  
          other related initial processes in order for an undocumented  
          immigrant who either entered the United States without  
          inspection or who did not depart after the expiration of a  
          nonimmigrant visa, to attain lawful status under an immigration  
          reform act.  

          Although a literal reading of this language - particularly with  
          respect to "other related initial processes" - might suggest an  
          unduly broad scope, it is important to note that the  
          acknowledged intent of the bill is to target attorneys who are  
          engaged for the purpose of serving clients regarding an  
          immigration reform law, rather than any lawyer whose services in  
          another type of matter might tangentially or incidentally touch  
          on a client's potential eligibility for legalization or  
          adjustment of immigration status.  Such peripheral issues might  
          arise, for example, in the course of representation in a  
          criminal matter, employment dispute, domestic violence case or  
          retaliatory eviction challenge where the purpose of the  
          representation is not immigration status.  Moreover, with  
          respect to engagement for the purpose of immigration law, this  
          definition clearly relates to services regarding an immigration  
          reform act and would not be implicated in the provision of  
          lawful and appropriate preliminary or preparatory work for  








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          clients, such as obtaining records and documentation, for use in  
          applications or filings under any other immigration or other  
          law, or for lawful and appropriate procedures or processes for  
          determining or obtaining legal relief under other immigration or  
          other laws.
                                                        
          Because the bill uses terms that are not used by current  
          immigration law, which may not be used in the proposed  
          immigration reform act (e.g., "undocumented immigrant"), the  
          bill requires the State Bar to issue a declaration stating  
          whether and when the referenced act has been enacted, which will  
          trigger the fee prohibitions and notice obligations discussed  
          below.

           Restrictions on Lawyer Fees Before Any Immigration Reform Is  
          Enacted.   This bill would prohibit an attorney from demanding  
          any funds, or from accepting advance payment of any funds, for  
          immigration reform act services prior to the enactment of an  
          immigration reform act.  The reason for this prohibition appears  
          to be plain: before proposed legislation has been signed into  
          law, it is impossible to know who might be eligible and what  
          steps would be needed to submit an application. This prohibition  
          therefore seeks to target attorneys who are currently  
          advertising and collecting fees for highly questionable services  
          in connection with immigration reform that has not been enacted  
          and may never be enacted in the future.  It should be noted that  
          the prohibition is directed at services for a fee; if no fee is  
          charged, this section is not triggered.  However it would  
          apparently be a violation of the measure's intent to seek a fee  
          after enactment of an immigration reform act for uncompensated  
          services provided before enactment of the act.

          This bill would further provide that if fees were collected  
          before this bill is enacted, and the services were rendered, the  
          attorney must provide the client with a statement of accounting  
          for those services.  For fees that were collected after  
          enactment of this section but before enactment of an immigration  
          reform act where the services have not been rendered, this bill  
          would require the attorney to refund those fees, presumably  
          within 30 days of the effective date of this section,  
          consistently with the refund period prescribed for funds  
          received after the effective date of this section, or place them  
          in a client trust account.  Client trust accounts are governed  
          by existing law.  (Sections 6211, 6212.)  If placed in a trust  
          account, the attorney must provide a specified notice in English  








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          and the client's native language.  Any advance fees received  
          after the effective date of the bill, but before the enactment  
          of an immigration reform act, must be returned to the client.

           Prospective Obligation To Notify Clients Of Complaint Rights If  
          And When Immigration Reform Is Enacted.   In addition to the fee  
          prohibition noted above (which applies prior to the enactment of  
          an immigration reform act) this bill also regulates the conduct  
          of attorneys after the enactment of an immigration reform act.   
          Specifically, the bill requires an attorney who provides  
                                                    immigration reform act services to provide a specified notice  
          when a contract for legal services is required in writing  
          pursuant to Section 6148, or is subject to Section 1632 of the  
          Civil Code.  Section 6148 requires a written contract for any  
          legal services over $1000 and specifies the content of that  
          contract.  Civil Code section 1632 requires written translations  
          of certain contracts for legal services negotiated in specified  
          languages other than English.  This section becomes operative  
          when the State Bar posts on its Internet Web site the form and  
          translations described below. 

          The written notice must inform the client that he or she may  
          report complaints to the Executive Office for Immigration Review  
          of the United States Department of Justice, to the State Bar of  
          California, or to the bar of the court of any state, possession,  
          territory, or commonwealth of the United States or of the  
          District of Columbia where the attorney is admitted to practice  
          law. The notice shall include the toll-free telephone numbers  
          and Internet Web sites of those entities.  Although section 6148  
          and Civil Code section 1632 apply only to members of the State  
          Bar, the bill makes clear that admission to the State Bar is not  
          a necessary condition for application of this provision.  

          The State Bar is required to provide the form of the notice,  
          translate the form into specified languages, and post the form  
          and translations on its Internet Web site.  The notice is  
          required to be in English and in one of the languages of the  
          forms translated by the State Bar if the contract for  
          immigration reform act services was negotiated in one of those  
          languages.  This provision is thus unlike the notice provision  
          described above for clients whose funds are deposited in a  
          client trust account in that the translation obligation for this  
          notice applies only to contracts negotiated in a language other  
          than English while the client trust account notice is required  
          to be translated regardless of the language of negotiation.








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          A violation of this provision makes the contract voidable at the  
          option of the client.  This is the only express penalty for  
          violation of the notice requirement.  While it might be assumed  
          that the State Bar may seek to initiate discipline proceedings  
          for a violation, the bill does not expressly provide that  
          violation of this section is cause for discipline. (Compare  
          sections 6106.2 and 6106.3.  See also Article 5 of the State Bar  
          Act (starting at section 6075) and Article 6 (starting at  
          section 6100) setting forth a disciplinary scheme for specified  
          violations.)  Any ground for discipline therefore would appear  
          to rest on some unstated or implicit authority.  (Cf.  In the  
          Matter of David M. Harney, 3 Cal State Bar Ct. Rptr. 266  
          (1995)(analyzing potential discipline for violation of section  
          6148.)

           Attorneys Subject To These Provisions.   This bill would apply  
          the above provisions regarding fees and written notices to  
          attorneys who are active members of the State Bar, as well as to  
          attorneys who are not active members but who (1) provide  
          immigration reform act services in an office or business in  
          California and (2) are authorized by federal law to practice law  
          and to represent persons before the Board of Immigration Appeals  
          of the United States Citizenship and Immigration Services.  From  
          a policy standpoint, that provision would appear to apply the  
          above restrictions with some uniformity so that clients who  
          visit attorneys in California are treated similarly.

           Reform Of Immigration Consultants Act.   The Immigration  
          Consultants Act (ICA) was enacted in 1986 to regulate activities  
          of immigration consultants who perform a variety of services for  
          persons who seek adjustment of their immigrant status at minimal  
          cost.  The explosion of immigration applications, a result of  
          the 1986 federal and amnesty law revisions, necessitated the  
          regulation of these persons.  The ICA and its subsequent  
          amendments now require immigration consultants to, among other  
          things:  (1) provide clients with written contracts; (2) file a  
          bond with the Secretary of State; and (3) post a notice of  
          compliance with the bonding requirement and a statement that the  
          immigration consultant is not an attorney (if pertinent) or that  
          the attorney is authorized under some other federal rule or is  
          an attorney from another state.

          Existing law imposes various requirements on those who act in  
          the capacity of an immigration consultant.  Consultants must  








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          pass a background check, provide clients with a written contract  
          in English and the client's native language, conspicuously  
          display a statutory notice with specified information (including  
          that the consultant is not an attorney), and file a $50,000  
          surety bond with the Secretary of State.  Existing law also  
          prohibits consultants from making false or misleading  
          statements, making guarantees or promises unless it is in  
          writing and there a basis in fact for the promise or guarantee,  
          and making any statement that the consultant can obtain special  
          favors.  Violation of those provisions is a misdemeanor, subject  
          a person to a civil penalty not to exceed $100,000, and can be a  
          felony if there are repeat violations.

          This bill would further strengthen those provisions by: (1)  
          requiring the written contract to itemize each service to be  
          performed; (2) requiring consultants who provide immigration  
          reform act services to deposit any funds received into a client  
          trust account and only withdraw funds upon completing an  
          itemized service or a document listed; (3) prohibiting  
          consultants from demanding or accepting advance payment of any  
          funds from a person for immigration reform act services before  
          the reform is enacted; (4) imposing a civil penalty of up to  
          $1,000 per day for violations of the advance fee prohibition;  
          and (5) increasing the amount of the required surety bond from  
          $50,000 to $100,000.

           Expansion of Existing Prohibition Against Using Terms That Cause  
          Confusion Regarding Practice of Law.   Current law prohibits  
          immigration consultants from using certain terms that when  
          translated from English imply that the person is an attorney.   
          This bill would expand that prohibition to all persons, and  
          would specify that it is a violation of the prohibition against  
          the unlicensed practice of law under section 6126.  In addition  
          to the existing civil penalty for a violation of section 6126,  
          the bill provides a further civil penalty of up to 1,000 per day  
          for each violation, to be assessed and collected in a civil  
          action brought by the State Bar. Consistently with AB 888  
          (Dickinson) which provides that civil penalties for violation of  
          section 6126 are to be directed to the Justice Gap Fund, which  
          provides small but important supplemental funding for qualified  
          legal services projects and support centers according to the  
          established interest on lawyer's trust accounts formula, or if  
          needed for the purposes of mitigating potential unpaid claims of  
          injured immigrant clients, as directed by the Board of Trustees  
          of the State Bar. 








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           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          State Bar of California (sponsor)
          AFSCME, AFL-CIO
          California Catholic Conference
          California Labor Federation
          Los Angeles County Sheriff, Leroy D. Baca
          San Diego Volunteer Lawyer Program, Inc.
          UNITE HERE Local 30
          Western Center on Law and Poverty

           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Kevin G. Baker / JUD. / (916) 319-2334