BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
AB 2878 (Committee on Judiciary)
Version: June 2, 2016
Hearing Date: June 28, 2016
Fiscal: No
Urgency: No
ME
SUBJECT
Attorneys: State Bar: board of trustees
DESCRIPTION
This bill would authorize the State Bar of California (State
Bar) to collect annual membership dues for 2017 and would, among
other things:
codify a protocol for handling unlawful practice of law
complaints;
provide that access to records of State Bar Court are subject
to the rules and laws applicable to the judiciary instead of
the California Public Records Act or Bagley-Keene Open Meeting
Act;
require various additional audits of the State Bar by the
State Auditor;
require the Board of Trustees (Board) to transition from a 19
member Board to a 13 member board and comprised of a majority
of public members;
provide that no motion of the Board can be approved unless a
majority of the public members approve the motion;
create a Commission of nine appointed members to evaluate
issues of State Bar governance and report findings, as
specified;
require the Chief Justice to appoint a temporary State Bar
enforcement program monitor to evaluate the disciplinary
system, make recommendations, and report findings, as
specified;
prohibit the State Bar from creating foundations or
nonprofits, as specified; and
require the State Bar to conduct an analysis of the Client
Security Fund, as specified.
BACKGROUND
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The State Bar of California is a public corporation. 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. (Cal. Const., art. VI, Sec. 9.) The State Auditor
and media have reported extensively in the last year regarding
the State Bar's lack of transparency and problems with the
discipline system, including the mishandling of over 300
complaints alleging the unauthorized practice of law. The power
to regulate the practice of law, including the power to admit
and to discipline attorneys, is among the inherent powers of the
Supreme Court. The State Bar functions as the administrative
arm of the Supreme Court for the purpose of assisting in
attorney admissions and discipline, with the Court retaining its
inherent judicial authority to disbar or suspend attorneys.
The State Bar of California is the largest state bar in the
country. As of March 2016, the State Bar had 186,152 active
members and 56,929 inactive members, which represents a slight
annual increase in both active members and inactive members.
Total State Bar membership is listed at 257,788, which includes
2,162 judge members and 12,544 members who are "Not Eligible to
Practice Law." The State Bar's programs are financed mostly by
annual membership dues paid by attorneys as well as other fees
paid by applicants seeking to practice law. The Legislature has
required the Board to establish and administer a Client Security
Fund (CSF) to relieve or mitigate pecuniary losses caused by
dishonest conduct of active attorneys. Among the criticisms of
the State Bar in a recent State Auditor report was that the
State Bar failed to be transparent with the Legislature and that
it now takes 18 to 36 months for a victim to be paid from the
CSF. If the Bar dues bill fails to pass or be signed by the
Governor, the Supreme Court will be able to exercise its
inherent constitutional power over regulation of the legal
profession and may order a special regulator assessment to fund
the State Bar's discipline-related functions.
This bill would authorize the State Bar to collect the annual
membership dues for 2017 and make various substantive changes to
the State Bar Act designed to increase transparency, protect
victims of unscrupulous non-attorneys, remove politics from the
Board, reform the discipline system, and make various other
changes in response to the findings in the State Auditor's audit
of the State Bar and various media reports.
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CHANGES TO EXISTING LAW
1.Existing law establishes that protection of the public shall
be the highest priority for the State Bar of California and
the Board of Trustees in exercising their licensing,
regulatory, and disciplinary functions. Whenever the
protection of the public is inconsistent with other interests
sought to be promoted, the protection of the public shall be
paramount. (Bus. & Prof. Code Sec. 6001.1.)
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.
Pursuant to the State Bar Act, the annual mandatory membership
fee set by the State Bar's Board of Trustees to pay for
discipline and other functions must be ratified by the
Legislature. (Bus. & Prof. Code Sec. 6000 et seq.)
Existing law authorizes the State Bar to collect $315 in
annual membership fees from active members for a total annual
dues bill of $390 for the year 2015. (Bus. & Prof. Code Sec.
6140.) The other $75 is pursuant to statutory authorization
to assess annually the following fees: $40 for the Client
Security Fund (Bus. & Prof. Code Sec. 6140.55); $25 for
disciplinary activities (Bus. & Prof. Code Sec. 6140.6); and
$10 to fund the Lawyer Assistance Program (Bus. & Prof. Code
Sec. 6140.9).
Existing law authorizes the State Bar to collect $75 in annual
membership fees from inactive members for a total annual dues
bill of $115 for the year 2015. (Bus. & Prof. Code Sec.
6141.) The other $40 is pursuant to statutory authorization
to assess annually the following fees: $10 for the Client
Security Fund (Bus. & Prof. Code Sec. 6140.55); $25 for
disciplinary activities (Bus. & Prof. Code Sec. 6140.6); $5 to
fund the Lawyer Assistance Program (Bus. & Prof. Code Sec.
6140.9.)
Existing law authorizes the State Bar to increase the annual
membership fees by an additional $40, to be allocated only for
purposes of providing voluntary support for nonprofit
organizations that provide free legal services to persons of
limited means. Members have the option of deducting the $40
from the annual membership fee if they elect not to have the
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amount allocated for the purposes of legal services. (Bus. &
Prof. Code Secs. 6033, 6140.03.)
This bill , until January 1, 2018, would require the board to
charge an annual membership fee for 2017 of $390 for active
members.
2.Existing law subjects the State Bar to the California Public
Records Act (CPRA) and provides that all public records and
writings of the State Bar are subject to the CPRA with
exceptions, as specified. Identifying information submitted
by applicants to the State Bar for admission to practice law
and State Bar admissions records, as specified, are
confidential and may not be disclosed pursuant to any law,
including the CPRA. (Bus. & Prof. Code Secs. 6001(g), 6026.11,
6060.25, 6086.1(b), 6168, 6200(h), 6232(d), 6234.)
Existing law subjects the State Bar to the Bagley-Keene Open
Meeting Act, except that the Act shall not apply to the
Judicial Nominees Evaluation Commission or the Committee of
Bar Examiners. (Bus. & Prof. Code Secs. 6001(g), 6026.5,
6026.7; Gov. Code Sec. 11121.)
This bill would provide that access to records of the State
Bar Court is subject to the rules and laws applicable to the
judiciary instead of the CPRA and would exempt the State Bar
Court from the Bagley-Keene Open Meeting Act.
3.Existing law provides that the Board shall engage the services
of an independent national or regional public accounting firm
with at least five years of experience in governmental
auditing for an audit of its financial statement for each
fiscal year. The financial statement must be promptly
certified and a copy of the audit and financial statement must
be submitted, as specified, to the Chief Justice of the
Supreme Court, and to the Assembly and Senate Committees on
Judiciary. Existing law requires that the audit examine both:
the receipts and expenditures of the State Bar and the
State Bar sections to ensure that the receipts of the
sections are being applied, and their expenditures are
being made, in compliance with specified law, and that the
receipts of the sections are applied only to the work of
the sections; and
the receipts and expenditures of the State Bar to ensure
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that the funds collected on behalf of the Conference of
Delegates of the California Bar Associations are conveyed
to that entity, as specified. (Bus. & Prof. Code Sec.
6145(a).)
Existing law , in relevant part, requires that every two years,
the Board shall contract with the California State Auditor's
Office to conduct a performance audit of the State Bar's
operations for the respective fiscal year. A copy of the
performance audit must be submitted as specified, to the
board, to the Chief Justice of the Supreme Court, and to the
Assembly and Senate Committees on Judiciary. For these
purposes, the California State Auditor's Office may contract
with a third party to conduct the performance audit. This,
however, is not intended to reduce the number of audits the
California State Auditor's office may otherwise be able to
conduct. (Bus. & Prof. Code Sec. 6145(b).)
This bill would require the board to contract with the
California State Auditor's Office for an audit of its
revenues, expenditures, reserves, and its financial statements
for each fiscal year through 2020.
This bill would require the California State Auditor, for the
performance audit due in January 2017, to review all of the
State Bar's expenses, including, but not limited to, executive
salaries and benefits, outside contracts and real estate
holdings, to determine the appropriate and necessary expenses
of the State Bar and the appropriate member dues level.
1.Existing law establishes that the State Bar is governed by a
19-member Board of Trustees consisting of 6 board members who
are not attorneys (public members) and 13 members who are
attorneys. Six of the 13 attorney board members are elected
by other licensed attorneys to represent districts throughout
the state. Five attorneys are appointed by the Supreme Court.
One attorney is appointed by the Senate Committee on Rules.
One attorney is appointed by the Speaker of the Assembly.
Four of the six public members are appointed by the Governor.
And, the Senate Rules Committee and Assembly Speaker appoint
one public member each. (Bus. & Prof. Code Secs. 6011-6019.)
This bill would require the Board to transition from a 19
member board to a 13 member board, as specified.
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This bill would remove from the Board attorney members elected
from State Bar Districts and would make conforming changes.
This bill would require that a minimum of seven members of the
Board be public members appointed as follows: four by the
Governor, two by the Assembly, one by the Senate Rules
Committee, and none by the Supreme Court.
This bill would provide that no motion of the Board can be
approved unless a majority of the public members approve the
motion.
This bill would require each member of the Board appointed
after December 31, 2016, to have demonstrated educational or
experience expertise, or both, in one of five specified areas,
including public finance.
2.Existing law provides that the State Bar officers are a
president, vice president, secretary, and treasurer, elected
by the Board. (Bus. & Prof. Code Secs. 6020, 6021.)
This bill would require the Supreme Court to instead select
from its appointed members a president and vice president of
the State Bar.
This bill would create a Commission of nine appointed members
and require the Commission to evaluate all issues of
governance of the State Bar, including, but not limited to, a
full review of other states with attorney regulatory
structures that are different than the State Bar, in order to
recommend the best governance structure for the State Bar and
to ensure that protection of the public is the highest
priority of the State Bar in its regulatory duties.
This bill would require the Commission to provide a report to
the Governor, the Chief Justice of the California Supreme
Court, and the Senate and Assembly Committees on Judiciary by
April 30, 2017.
This bill would require the Chief Justice to appoint a State
Bar enforcement program monitor prior to March 31, 2017, and
would require the program enforcement monitor to evaluate the
disciplinary system and procedures of the State Bar, as
specified.
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This bill would require the program enforcement monitor to
submit an initial report no later than October 1, 2019, to
issue a final report before March 31, 2020. This provision
would sunset on January 1, 2020.
3.Existing law requires the State Bar to annually report on the
performance and condition of its discipline system, including
the backlog of discipline cases that are six months old and
case processing times, as provided. (Bus. & Prof. Code Sec.
6086.15.)
Existing law creates the Governance in the Public Interest
Task Force, effective February 1, 2013, and requires that the
task force report to the Supreme Court, the Governor and the
Assembly and Senate Judiciary Committees on Judiciary by May
15, 2014, and every three years thereafter, its
recommendations for enhancing public protection and ensuring
that public protection is the State Bar's highest priority.
(The task force has yet to submit its first report.) (Bus. &
Prof. Code Sec. 6001.2.)
Existing law permits the State Bar, for the purpose of
carrying into effect and promoting its objectives, to sell,
lease, exchange, convey, transfer, assign, encumber, pledge,
or dispose of any of its real or personal property or any
interest therein, including without limitation all or any
portion of its income or revenues from membership fees paid or
payable by members. (Bus. & Prof. Code Sec. 6001.)
Existing law provides that whenever the Board secures an
obligation of the State Bar on all or any portion of the fees
from membership dues the Legislature may not, until the
obligation is repaid in full, reduce membership dues below the
maximum amount in effect when the obligation was created and
provides that this constitutes a covenant to the holder of the
obligation. (Bus. & Prof. Code Sec. 6008.5.)
This bill would delete the provision in law that prohibits the
Legislature from reducing membership dues if the Board secures
an obligation of the State Bar on membership dues.
4.Existing law authorizes the State Bar to raise additional
revenue by any lawful means, including, but not limited to,
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the creation of foundations or not-for-profit corporations.
(Bus. & Prof. Code Sec. 6001.)
This bill would prohibit the State Bar from creating any
foundation or nonprofit corporations, as specified.
5.Existing law requires the board to establish and administer a
Client Security Fund to relieve or mitigate pecuniary losses
caused by dishonest conduct of active members of the State
Bar, as specified. (Bus. & Prof. Code Sec. 6140.5.)
This bill would require the State Bar to conduct a thorough
analysis of the Client Security Fund and to submit a report to
the Legislature on its analysis of that fund by March 15,
2017, as specified.
6.Existing law prohibits a person from practicing law in
California unless the person is an active member of the State
Bar. (Bus. & Prof. Code Sec. 6125.)
Existing law provides for the fine and imprisonment of persons
who engage in the unauthorized practice of law, as specified.
(Bus. & Prof. Code Sec. 6126(a), (b).)
Existing law , in relevant part, provides that the following
acts or omissions in respect to the practice of law are
contempts of the authority of the courts:
assuming to be an officer or attorney of a court and
acting as such, without authority; and
advertising or holding oneself out as practicing or
entitled to practice law or otherwise practicing law in any
court, without being an active member of the State Bar.
(Bus. & Prof. Code Sec. 6127.)
Existing law provides that in addition to any criminal
penalties or contempt proceedings, above, the courts of this
state shall have specified jurisdiction when a person
advertises or holds himself or herself out as practicing or
entitled to practice, or otherwise practices law, without
being 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 (hereinafter referred to
as the "unauthorized practice of law"). The State Bar, or
superior court on its own motion, may make application, as
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specified, for assumption by the court of jurisdiction over
the practice to the extent provided in this section. In any
proceeding under this section, the State Bar is permitted to
intervene and assume primary responsibility for conducting the
action. (Bus. & Prof. Code Sec. 6126.3(a)-(c).)
Existing law authorizes the court, if it finds that the facts
set forth regarding the unauthorized practice of law have
occurred, and that the interests of a client or an interested
person or entity will be prejudiced if the proceeding provided
herein is not maintained, to make an order assuming
jurisdiction over the person's practice, as specified. If the
person to whom the order to show cause is directed does not
appear, existing law authorizes the court to make its order
upon the verified application or upon such proof it may
require. Thereupon, the court must appoint one or more active
members of the State Bar to act under its direction to mail a
notice of cessation of practice, as specified, and may appoint
those appointed attorneys to do one or more of the following,
among other things:
examine the files and records of the practice and obtain
information as to any pending matters that may require
attention;
notify persons or entities who appear to be clients in
connection to the event or events stated in relation to the
unauthorized practice of law, and inform them that it may
be in their best interest to obtain other legal counsel;
with the consent of the client, file notices, motions,
and pleadings on behalf of the client where jurisdictional
time limits are involved and other legal counsel has not
yet been obtained; and
do any other acts that the court may direct to carry out
for the purposes of this section. (Bus. & Prof. Code Sec.
6126.3(e).)
Existing law requires that the court provide a copy of any
order issued pursuant to this section on the unauthorized
practice of law to the Office of the Trial Counsel of the
State Bar. (Bus. & Prof. Code Sec. 6126.3(e).)
Existing law provides that upon a finding by the court that it
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is more likely than not that the application will be granted
and that delay in making orders described above will result in
substantial injury to clients or to others, the court, without
notice or upon notice as it shall prescribe, may make interim
orders containing any provisions that the court deems
appropriate under the circumstances. Such an interim order
shall be served, as specified. (Bus. & Prof. Code Sec.
6126.3(j).)
Existing law provides that an order pursuant to this section
on the unauthorized practice of law is not appealable and
shall not be stayed by petition for a writ, except as ordered
by the superior or appellate court. (Bus. & Prof. Code Sec.
6126.3(l).)
Existing law provides that a member of the State Bar appointed
pursuant to this section on the unauthorized practice of law
shall serve without compensation, except as specified. (Bus. &
Prof. Code Sec. 6126.3(m).)
This bill sets forth specific requirements for the handling of
unlawful practice of law complaints, including: specific
timeframes for processing those complaints; specified,
acceptable resolutions for those complaints; and requiring
that those complaints be forwarded to law enforcement.
COMMENT
1.Stated need for the bill
According to the author:
This bill continues the Legislature's important oversight
of the State Bar through the annual dues authorization
bill, which is part of our general oversight role over
agencies in the executive and judicial branches of
government. As the Supreme Court itself acknowledged in In
re Garcia (2014) 58 Cal.4th 440, the Legislature may
establish reasonable rules regulating the Bar, despite the
fact that the Supreme Court has ultimate responsibility for
admissions and discipline. This bill seeks to exercise the
Legislature's oversight role over the State Bar after yet
another year of extensive and publically reported turmoil
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involving the Bar, some of which has only come to light
because of new open government laws that we approved last
year and which took effect just months ago.
The State Bar was created to license and regulate
attorneys, with the protection of the public as its highest
priority. [ . . . ] Unfortunately, in just this last
year alone, far too many instances have come to light that
illustrate how far the Bar has strayed from its paramount
mission to protect the public. Hundreds of complaints from
the public about the unauthorized practice of law were
thrown into a drawer and forgotten for months and even
years; an audit of the Bar's discipline system showed that
the Bar imposed inappropriately light sanctions on
attorneys in an effort to clear its backlog of such cases;
the Bar's discipline system has focused on minor abuses
that do not threaten the public without properly
prioritizing more serious discipline cases; the Bar
refinanced a $25 million loan on its property in Los
Angeles and took out a new $10 million loan on its property
in San Francisco by pledging future bar dues as collateral
and tied the hands of the Legislature in the process, all
without notice to the Legislature; [ . . . ] it was
revealed that the Executive Director (and about a dozen
member of her executive team) earn a salary far higher than
Governor Brown; the Bar recently hired a public relations
professional who makes more money than the White House
Press Secretary; the Bar's executive staff receives far
greater benefits than the rest of the staff; the Bar
unlawfully transferred money between its funds; the Bar
held at least one meeting in violation of the Bagley-Keene
Open Meetings Law; and the Bar is involved in ongoing
litigation with five former Bar employees. And the list of
wrong doing goes on and on. Too often today, the Bar
behaves more like a law firm than a regulator and this has
resulted in attorney discipline and public protection
receiving short shrift.
This bill takes critical steps to make the Bar, once and
for all, an effective regulator of attorneys and a
protector of the public[.]
2.The Supreme Court
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The Supreme Court is not the State Bar Board of Trustees
(Board). However, in the frustration surrounding the Board, its
former Chief Trial Council, and Executive team, the Board and
the Supreme Court are being conflated by some critics. This
Supreme Court is arguably the most diverse state Supreme Court
in the nation and reflects the new California, in terms of
racial, gender, and age diversity. While change is needed with
the Board, arguably, this newer Court should be given a
reasonable opportunity to address issues within its own branch
of government. The Supreme Court is entrusted as the final
adjudicator of State laws. While actions of the State Bar,
including by the Board, the former Chief Trial Counsel, and
Executive team have generated dozens of critical media reports
as well as criticism by the State Auditor, this Committee is not
aware of any criticism of the State Bar Court, the Supreme
Court, or the Chief Justice regarding their respective roles in
licensing and disciplining attorneys.
3.The State Bar functions as the administrative arm of the Supreme
Court for the purpose of assisting in attorney admissions and
discipline, with the Court retaining its inherent judicial
authority to disbar or suspend attorneys
As a constitutional matter, the judicial power of California is
vested in the Supreme Court, Courts of Appeal, and superior
courts. (Cal. Const., art. VI, Sec. 1.) The power to regulate
the practice of law, including the power to admit and to
discipline attorneys, is among the inherent powers of the
Supreme Court. (In re Attorney Discipline System (1998) 19
Cal.4th 582, 592; Obrien v. Jones (2000) 23 Cal.4th 40, 48.) In
addressing this inherent authority, the Supreme Court has
explained: "'The important difference between regulation of the
legal profession and regulation of other professions is this:
Admission to the bar is a judicial function, and members of the
bar are officers of the court, subject to discipline by the
court. Hence, under the constitutional doctrine of separation
of powers, the court has inherent and primary regulatory
power.'" (In re Attorney Discipline System, supra, 19 Cal.4th
at 593.)
Although originally a creature of statute, the State Bar of
California is now "a constitutional entity within the judicial
article of the California Constitution." (Obrien, supra, 23
Cal.4th at 48; see Cal. Const., art. VI, Sec. 9; Bus. & Prof.
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Code, Sec. 6001.) The State Bar functions as the administrative
arm of the Supreme Court for the purpose of assisting in
attorney admissions and discipline, with the court retaining its
inherent judicial authority to disbar or suspend attorneys. (In
re Attorney Discipline System, supra, 19 Cal.4th at 599-600; see
Keller v. State Bar of California (1990) 496 U.S. 1, 11.) The
State Bar's regulatory assistance is an integral part of the
judicial function. (Obrien, supra, 23 Cal.4th at 48.)
Emphasizing the sui generis nature of the State Bar as its
administrative arm, the Supreme Court has made clear that
"express legislative recognition of reserved judicial power over
admission and discipline is critical to the constitutionality of
the State Bar Act." (In re Attorney Discipline System, supra,
19 Cal.4th at 600, citing Bus. & Prof. Code Sec. 6087.)
In addition, the Legislature's exercise, under the police power,
of a reasonable degree of regulation and control over the
profession and practice of law in California, is well
established. (Obrien, supra, 23 Cal.4th at 48.) The
Legislature also exercises regulatory authority pursuant to the
State Bar Act and has authority to set the amount of membership
fees necessary to fund the disciplinary system. The Legislature
has enacted statutes making protection of the public the highest
priority of the State Bar (Bus. & Prof. Code Sec. 6001.1) and
empowering the Bar to promote improvement of the administration
of justice (Bus. & Prof. Code Sec. 6031(a).) And, while the
Board has statutory authority to formulate rule proposals, they
only take effect if the State Supreme Court approves them.<1>
4.This bill would marginalize a co-equal branch of government even
though the State Bar functions as the administrative arm of
the Supreme Court
This bill would provide that no motion of the Board can be
approved unless a majority of the public members approve the
motion. While these provisions are seemingly intended to
increase transparency and fairly distribute authority, as
drafted this bill would disproportionately favor certain
branches of government over others. Specifically, pursuant to
this bill, the Supreme Court continues to appoint no public
---------------------------
<1> The Rules of Professional Conduct are the professional
standards to which California attorneys must adhere. Violation
of the rules may subject an attorney to discipline.
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members, the Assembly Speaker appoints two, the Governor
continues to appoint four, and the Senate Rules Committee
continues to appoint one. Accordingly, the Governor's
appointees could control every motion, whereas the Supreme Court
would have no power on the Board, and the Assembly would have
double the power of the Senate. The following amendment is
suggested to remove this inequitable consequence, by striking
the requirement that a majority of the public members approve
every motion.
Suggested Amendment :
On page 13, strike out lines 19 and 20.
5.The Chief Justice requests the authority to appoint a Special
Master to review issues of governance of the State Bar instead
of the creation of a Commission
As discussed in Comment 3, above, the power to regulate the
practice of law, including the power to admit and to
discipline attorneys, is among the inherent powers of the
Supreme Court. This bill would provide for the creation of
the California State Bar Governance Commission (Commission)
to study the best governance structure for the State Bar to
fulfill its core function of public protection.
Specifically, this Commission would be comprised of nine
volunteer Commission members. The Commission members would
be appointed by the same entities that currently appoint the
Board Members of the State Bar-i.e. the Governor, Chief
Justice, Speaker of the Assembly, and Senate Committee on
Rules. The Commission would be tasked with "evaluating all
issues of governance of the State Bar, including, but not
limited to, a full review of other states with attorney
regulatory structures that are different than the State Bar
and a possible separation of the State Bar's regulatory and
trade association functions [. . .]."
The Chief Justice of the California Supreme Court, as the
leader of the Court, requests that instead of creating this
new commission, she be given the statutory authority to
appoint a Special Master. Under her proposal, the Supreme
Court would assess whether changes to the governing board or
overall structure of the State Bar would better support
regulation of the legal profession, protection of the public,
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and effective administration of justice. To aid in its
assessment, the Supreme Court would be statutorily required
to appoint a Special Master on or before March 1, 2017. The
Special Master would be tasked with reviewing issues of
governance of the State Bar, including, but not limited to, a
full review of other states with attorney regulatory
structures that are similar to or different than the State
Bar, possible changes to the composition and operation of the
Board, and a possible restructuring of the regulatory and
non-regulatory functions of the State Bar. To aid the
Special Master in fulfilling his or her duties, the Supreme
Court would be required to provide a public list of questions
pertaining to governance, regulatory, and other areas
perceived as aiding in or interfering with regulation of the
legal profession, protection of the public, or the effective
administration of justice. The Supreme Court would also be
required to consult with the Administration, the Assembly
Committee on Judiciary, and the Senate Committee on
Judiciary, all of which would be invited to contribute
questions to this list.
A Special Master, sometimes called a referee, typically is a
lawyer or retired judge who is appointed by a court to hear a
case or consider matters involving difficult or specialized
issues. The appointing court may specify or limit the powers
of the Special Master and limit the issues considered.
Depending on the court's order, the Special Master will take
evidence and file a report that may contain findings of fact
and conclusions of law. Once a Special Master's report is
filed, the court will ordinarily accept findings of fact
unless they are clearly erroneous, but the court may always
determine questions of law de novo. In California, Special
Masters have been appointed in a variety of cases. In 1998
when the State Bar fee bill was vetoed, the Supreme Court
appointed a Special Master to supervise and oversee the
collection, disbursement, and allocation of the collected
court-imposed regulatory fees on active members of the Bar.
Given that the Supreme Court has the authority over the
admission and practice of law in the State of California, it is
arguably appropriate that the Supreme Court take the leading
role in assessing how the State Bar, as its administrative arm,
is best structured and governed to support adequate regulation
of the legal profession, protection of the public, and the
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effective administration of justice. In recognition of the
Supreme Court's primary authority over the admission and
practice of law and in deference to the Chief Justice, the
following amendment is suggested to remove the Commission that
would study governance and replace it with the Chief Justice's
language whereby the Special Master would review issues of
governance of the State Bar.
Suggested Amendments :
On page 6, in line 4, strike out "SEC. 2." and insert
"SEC. 1."
On page 7, strike out lines 29 through 39.
On page 8, strike out lines 1 through 37 and insert:
SEC. 2. Section 6001.3 is added to the Business and
Professions Code, to read:
(a) In exercise of its oversight role over the State
Bar, the Supreme Court shall assess whether changes to
the governing board or overall structure of the State
Bar would better support regulation of the legal
profession, protection of the public, and effective
administration of justice.
(b) To aid in its assessment, the Supreme Court shall
appoint a special master on or before March 1, 2017.
(c) The special master shall review issues of governance
of the State Bar, including, but not limited to, a full
review of other states with attorney regulatory
structures that are similar to or different than the
State Bar, possible changes to the composition and
operation of the Board of Trustees, and a possible
restructuring of the regulatory and non-regulatory
functions of the State Bar.
(d) To aid the special master in fulfilling his or her
duties, the Supreme Court shall provide a list of
questions pertaining to governance, regulatory, and
other areas perceived as aiding in or interfering with
regulation of the legal profession, protection of the
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public, or effective administration of justice. The
Supreme Court shall consult with the Administration, the
Assembly Committee on Judiciary, and the Senate
Committee on Judiciary, who will be invited to
contribute questions to this list. The Supreme Court
shall provide written guidelines to the special master
for the conduct of his or her duties. The list of
questions and written guidelines shall be made available
to the public.
(e) The special master shall engage in fact-finding to
identify:
(1) Those functions of the State Bar that are
regulatory, those functions that are non-regulatory but
which reasonably serve to protect the public or improve
the administration of justice, and those functions that
are non-regulatory and provide little or no value to
public protection or the administration of justice.
(2) All areas that relate to the State Bar's governance
structure and interfere with the competent performance
of its regulatory and public protection functions and
its efforts to improve the administration of justice.
(3) All changes and refinements in the structure or
governance of the State Bar that reasonably should be
considered by the Supreme Court as potentially effective
in addressing the areas identified in subdivision
(f)(2). In ascertaining which changes reasonably should
be considered, the special master shall identify the
fiscal and operational implications of the changes. For
each change identified, the special master shall provide
a proposed implementation plan that includes
specification of all modifications to statutory law,
Rules of Court, and Rules of the State Bar that will be
necessary to accomplish such change.
(f) To aid in the fact-finding process, the special
master shall hold public hearings to accept written and
transcribed oral comments from the public and interested
stakeholders, including the authorized State Bar
employee bargaining unit representatives. The special
master shall also receive the transcribed and other
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written comments and information previously taken during
the public hearings conducted in 2016 by the State Bar's
Governance in the Public Interest Task Force. The
special master shall provide bi-monthly written reports
of updates on his or her work to the Supreme Court, the
Administration, the Assembly Committee on Judiciary, and
the Senate Committee on Judiciary.
(g) On or before October 1, 2017, the special master
shall deliver a written report to the Supreme Court, the
Administration, the Assembly Committee on Judiciary, and
the Senate Committee on Judiciary. The report shall set
forth the special master's findings of fact as required
in this section, and may include other observations made
by the special master, if related to the performance or
functioning of the State Bar and supported by
substantial and credible information.
(h) Based on its review of the special master's report,
and after consultation with the Administration, the
Assembly Committee on Judiciary, and the Senate
Committee on Judiciary, the Supreme Court shall make its
assessment of how the State Bar, as its administrative
arm, is best structured and governed to support adequate
regulation of the legal profession, protection of the
public, and the effective administration of justice.
The Supreme Court's written report of its assessments
shall be delivered to the Administration, the Assembly
Committee on Judiciary, and the Senate Committee on
Judiciary on or before March 1, 2018. It is
contemplated that the Legislature will evaluate the
Supreme Court's report in exercising its regulatory
authority pursuant to the State Bar Act.
(i) The State Bar shall furnish the special master with
all reasonable assistance as necessary. To pay for the
services and expenses of the special master, a
per-member fee shall be assessed for all active members
at a sum not exceeding ($ ).
6.Alternative when State Bar due bills fail to be signed into law
If no State Bar dues bill is enacted by January 1, 2017,
attorney bar dues may increase. In last year's State Bar dues
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bill, the Legislature required that the State Bar develop and
implement a workforce plan for its discipline system and conduct
a public sector compensation and benefits study, including a
recommendation for an appropriate backlog goal and an assessment
of staffing needed to achieve that goal. The Legislature
further required the State Bar to conduct a thorough analysis of
its operating costs and develop a spending plan to determine a
reasonable amount for its annual dues. The workforce plan and
the spending plan, which could arguably justify increased dues,
were submitted to the Legislature in May 2016.
In the event that AB 2878 does not pass or is vetoed, the
Supreme Court, in the exercise of its inherent constitutional
power over regulation of the legal profession, may order a
special regulatory assessment to fund the State Bar's
discipline-related functions. In the case of In re Attorney
Discipline System (1998) 19 Cal.4th 582, the Supreme Court
considered information provided by the State Bar in ordering
that each active member of the State Bar pay a mandatory
regulatory fee of $171.44. The Court also appointed a Special
Master to supervise and oversee the collection, disbursement,
and allocation of the collected fees, and imposed an additional
fee of $1.56 upon each active member of the State Bar to pay for
the fees and expenses related to the Special Master and his
activities. If AB 2878 fails, it is likely that the Supreme
Court will act in a similar fashion if AB 2878 fails.
7.Codifying a protocol to protect immigrants from the unauthorized
practice of law
In January of this year, the Daily Journal revealed that the
State Bar had ignored 59 complaints of unauthorized practice of
law dating back to 2007. (Lyle Moran, State Bar Admits Ignoring
Dozens of Complaints Against People Practicing Law Without a
License, Daily Journal (Jan. 29, 2016).) In response, the State
Bar acknowledged that "[c]omplaints against non-attorneys often
come from immigrants who have been exploited by unscrupulous
businesses, and it is important to [the State Bar] to root out
this fraud and safeguard the public's interests[.]" Less than
two months later, the Daily Journal reported that the State Bar
allowed an additional 270 complaints alleging the unauthorized
practice of law to sit idle without assignment to an
investigator for months. (Lyle Moran, State Bar Let Hundreds of
Complaints Against Non-Attorneys Sit Idle, Daily Journal (March
4, 2016).)
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At a recent Summit organized by the State Bar regarding the
Unauthorized Practice of Law, immigration law practitioners
shared stories about the State Bar not following through on
complaints they filed on behalf of immigrants against those
engaged in the unauthorized practice of law and attorneys
licensed in other states who practice immigration law in
California. At that Summit, the State Bar revealed new
protocols they were developing to handle unauthorized practice
of law complaints. Correctly recognizing that failure to
immediately investigate allegations of unauthorized practice of
law leaves future victims vulnerable to the perpetrators, and in
the interest of protecting the public, this bill would codify
those protocols.
Also at the Summit, it was clear that the OCTC lacks meaningful
experience in immigration law. The OCTC would arguably benefit
from employing an attorney with significant immigration law
experience. Accordingly, the author may wish to consider the
following amendment to require the OCTC to employ a supervising
attorney with significant immigration experience:
Suggested amendment :
On page 20, in line 23 insert: "(n) the Office of Chief
Trial Counsel shall hire at least one supervising attorney
with the following experience: (1) Have at least three
years of experience handling asylum, T-Visa, U-Visa, or
special immigrant juvenile status cases and have
represented at least 25 individuals in these matters. (2)
Have experience in representing individuals in removal
proceedings and asylum applications.
8.The State Bar Enforcement Monitor
Audits by the State Auditor's Office and media accounts have
demonstrated that the discipline system at the State Bar in the
Office of Chief Trial Counsel (OCTC) is broken. The 2015 State
Auditor's performance audit of the State Bar revealed that the
State Bar did not fully and consistently report its backlog of
discipline cases or its case processing times to the
Legislature. The Auditor asserted that the manner in which the
State Bar reduced its backlog of discipline cases may have
caused significant risk to the public. According to the
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Auditor, "?to reduce its backlog, the State Bar allowed some
attorneys whom it otherwise might have disciplined more
severely-or even disbarred-to continue practicing law, at
significant risk to the public."
In an effort to improve the processing of complaints from intake
to resolution in the OCTC, this bill would require the Chief
Justice to appoint a temporary State Bar enforcement program
monitor (Monitor) prior to March 31, 2017. The Monitor would be
given various duties, including, monitoring and evaluating the
State Bar's disciplinary system and procedures. The Monitor
would be charged with making his or her highest priority the
reform and reengineering of the State Bar's enforcement program
and operations, and the improvement of the overall efficiency of
the State Bar's disciplinary system so that the State Bar may
successfully and consistently protect the public. The Monitor
would be required to submit an initial report to the Assembly
and Senate Committees on Judiciary and others no later than
October 1, 2019, and to issue a final report before March 31,
2020. Statutory authorization for the Monitor would cease on
January 1, 2021. The strong evidence of a broken discipline
system in the OCTC arguably warrants the imposition of an
independent Monitor. That being said, staff notes that this
Committee has received no complaints regarding the State Bar
Court or the Supreme Court regarding their respective roles in
State Bar discipline. Because the Chief Justice is part of the
Supreme Court, it would arguably be more appropriate for another
person to appoint the Monitor. Accordingly, the author's office
suggests giving that authority to the California Attorney
General instead. The following author's amendments would make
that change and also correct an inadvertent error in the bill
regarding the year the Monitor provisions sunset.
Author's Amendments :
On page 14, in line 35, strike out "Chief Justice of the
California Supreme" and insert "Attorney General"
On page 14, in line 36, strike out "Court
On page 14, in line 37, strike out "the Chief Justice of
the California"
On page 14, strike out line 38
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On page 14, in line 39, strike out "conduct interviews of
candidates for the position."
On page 15, in line 6, remove "Chief Justice" and insert
"Attorney General"
On page 15, strike out line 35 and insert "duties."
On page 15, strike out lines 36 and 37.
On page 16, in line 16, strike out "2020," and insert
"2021,"
9.Respecting the victims of dishonest attorneys
The Legislature required the Board to establish and administer a
Client Security Fund to relieve or mitigate pecuniary losses
caused by dishonest conduct of active members of the State Bar.
In the May 2016 audit of the State Bar, the State Auditor noted:
The State Bar has not clearly informed stakeholders of the
amounts it estimates it will pay to reimburse members of
the public who suffer financial losses because of
dishonest attorneys. By the end of 2015, the State Bar
estimated it would pay about $18.9 million from its Client
Security Fund for such reimbursements. Unfortunately, the
Client Security Fund had approximately $2.2 million
available by that time, severely limiting the State Bar's
ability to pay these claims. However, beginning in 2012,
the State Bar eliminated from its financial statements any
disclosure of Client Security Fund claims it expected to
pay, reporting instead that the fund's balance had
improved. This impeded stakeholders' ability to assess
the financial condition of the Client Security Fund. After
we discussed this issue with the State Bar, it revised its
2015 financial statements to disclose the amount of the
Client Security Fund's estimated payouts. (California
State Auditor, State Bar of California: Its Lack of
Transparency Has Undermined Its Communications With
Decision Makers and Stakeholders, Report 2015-047 (May
2016).)
The State Auditor further reported that by the end of 2015, the
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State Bar had about 5,500 applications that the State Bar
estimated would cost $18.9 million. However, the Client
Security fund balance had dropped to $2.2 million, thus reducing
the State Bar's ability to pay claims in a timely manner.
Because "the State Bar lacked the funds necessary to pay claims,
it slowed its claims processing from about 18 months to about 36
months?"
In response to the State Auditor's report that the State Bar has
lacked transparency around providing the Legislature with an
ability to accurately assess the financial condition of the
Client Security Fund, and in response to claims now taking about
36 months to process, this bill would require the State Bar to
conduct a thorough analysis of the Client Security Fund and to
submit a report to the Legislature on its analysis of that fund
by March 15, 2017. The analysis is intended to help ensure that
the Client Security Fund can adequately protect the public and
relieve or mitigate financial losses caused by the dishonest
conduct of members of the State Bar by paying claims in a timely
manner. The author offers the following amendment to clarify
what is meant by paying claims in a timely manner and to allow
for a review of the governance structure of the Client Security
Fund to ensure that the structure provides for the most
effective and efficient operation of the Fund.
Author's amendment :
On page 21, on line 8, after "including" insert "a review
of the governance structure of Client Security Fund to
ensure that the structure provides for the most effective
and efficient operation of the Fund,"
On page 21, on line 27, after "from the" insert "later of
the"
On page 21, on line 27, after "Bar" insert "and upon the
resolution of underlying discipline case involving an
attorney member, which is a prerequisite to paying the
claim"
10.Correcting problems identified by the State Auditor in the most
recent audit of the State Bar and the authorization of further
audits
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Last year's State Bar dues bill required the Board to
contract with the California State Auditor to conduct an
in-depth financial audit of the State Bar, including an audit
of its financial statement, internal controls, and relevant
management practices. The audit was required to, at a
minimum, examine the revenues, expenditures, and reserves of
the State Bar, including all fund transfers. The Auditor
submitted the audit in May of 2016 and noted the following:
We identified other instances in which the State Bar's
reports lacked transparency. For example, the State Bar
reported the balance in two of its funds as
unrestricted-or available for general use-when, in fact,
that money could only be used for specific purposes. The
State Bar also has not clearly reported its budget
assumptions to the Legislature, despite the fact that the
Legislature relies on that budget to ensure the
reasonableness of the State Bar's fees. In addition, the
State Bar recently pledged its member fee revenue when it
entered into a loan agreement without informing the
Legislature, even though the pledge might have restricted
the Legislature's ability to lower the State Bar's fees.
After we discussed our concern regarding this loan
provision with the State Bar, it replaced this provision
with a $7 million debt service reserve. The State Bar
also created and used a nonprofit foundation without
sufficient oversight of its Board of Trustees, and
recently used almost $14,800 from its general fund to
eliminate the foundation's fund deficit without its
board's knowledge or approval. (California State Auditor,
State Bar of California: Its Lack of Transparency Has
Undermined Its Communications With Decision Makers and
Stakeholders, Report 2015-047 (May 2016).
In response to the State Auditor's report that the State Bar
continues to lack transparency in its reports to the
Legislature, this bill would require the Board to contract with
the California State Auditor's Office for an audit of its
revenues, expenditures, reserves, and its financial statements
for each fiscal year through 2020. This would be in addition to
the biannual performance audit that the State Bar is required to
contract with the State Auditor to perform and the annual audit
of the Bar's financial statement that is required to be
performed by an independent accounting entity. Accordingly, in
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the next few years, the Board would have to contract with the
State Auditor for two types of audits and also would have to
contract with an additional independent auditor for an audit of
their financial statement. SEIU 1000, an authorized State Bar
employee bargaining unit representative, writing with a support
with amendments position, states:
The current language of the bill also sets out a series of
reports and audits on top of existing reports and audits.
The timing of these reports creates a hardship for our
members and, we believe, sets up the State Bar to fail in
its regulatory reforms. We believe that the Legislature,
when requiring reports or audits must set reasonable
timelines to plan, report, and implement the
recommendations in such a way that is productive.
The author offers the following amendments in an effort to
streamline the audits:
Author's amendments :
On page 21, in line 38, strike out "the Supreme Court," and
insert "California,"
On page 22, after line 15, insert: "The State Auditor
shall develop a methodology for auditing the State Bar's
revenues, expenditures, reserves, and its financial
statement for the audit due to the board, to the Chief
Justice of California, and to the Assembly and Senate
Committees on Judiciary in 2018, and may, for all financial
audits performed subsequently to that audit, contract with
a third party to conduct the financial audit following the
methodology developed by the State Auditor in this
paragraph and subject to State Auditor review.
On page 22, in line 27, strike out "the Supreme Court," and
insert "California,"
On page 22, in line 35, strike out "the Supreme" and insert
"California,"
On page 22, in line 36, strike out "Court,"
On page 22, in line 38, strike out "the California Supreme
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Court," and insert "California,"
On page 23, between lines 4 and 5 insert "The performance
audits due to the board, to the Chief Justice of
California, and to the Assembly and Senate Committees on
Judiciary in 2017 and in 2019 may be combined with the
financial audit required in subdivision (a)."
On page 23, in line 35, strike out "the California Supreme
Court," and insert "California,"
On page 24, in line 20, strike out "the California Supreme
Court," and insert "California,"
On page 24, in line 28, strike out "the Supreme Court," and
insert "California,"
Additionally, in response to State Auditor's finding that the
State Bar recently pledged its member fee revenue when it
entered into a loan agreement without informing the Legislature,
even though the pledge might have restricted the Legislature's
ability to lower the State Bar's fees, this bill would delete
the provision in law that provides that the Legislature may not
reduce membership dues if the Board secures an obligation of the
State Bar on membership dues.
Further, in response to the State Auditor's report that the
State Bar also created and used a nonprofit foundation without
sufficient oversight of its Board, and recently used almost
$14,800 from its general fund to eliminate the foundation's fund
deficit without its Board's knowledge or approval, this bill
would prohibit the State Bar from creating any foundation or
nonprofit corporations as of December 31, 2016.
11.Removing politics from governance, streamlining the State Bar
Board of Trustees, and being more inclusive of appointees from
all appointing authorities
The State Bar Board (Board) consists of 19 Board Member
positions. Of those 19 positions, 6 are public member positions
(non-attorneys) and 13 are attorneys. Of the 6 public members,
4 are appointees of the Governor, one is an appointee of the
Senate Committee on Rules, and one is an appointee of the
Assembly Speaker. Of the 13 Attorney appointees, 6 represent
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districts within California and are elected by attorneys, 5 are
appointed by the Supreme Court, one is appointed by the Senate
Committee on Rules, and one is appointed by the Assembly
Speaker.
This bill would require the Board to transition from a 19 member
board to a 13 member board through the gradual elimination of
the 6 elected attorney positions. The bill also removes the
attorney appointee from the Speaker of the Assembly and allows
the Speaker instead to appoint a public member. Accordingly,
the new Board would consist of 7 public members and 6 attorney
members. This bill would further require each member of the
Board appointed after December 31, 2016, to have demonstrated
educational or experience expertise, or both, in one of 5
specified areas, including public finance.
While current law provides that the officers of the State Bar
are the president, vice president, secretary, and treasurer, and
are elected by the Board, this bill would instead require the
Supreme Court to select from its appointed members a president
and vice president of the State Bar. These robust changes to
the board structure would arguably lead to a more focused,
efficient, and less political Board. The author seeks the
following amendments to further reform the Board structure.
The following author's amendments would: (1) allow rather than
require the appointing bodies to consider appointees with
educational or experience in six areas, including immigration
law; (2) would allow the appointees of the Supreme Court and the
appointees of the Governor, Senate Committee on Rules and
Speaker of the Assembly to serve for a term of four years
instead of three; and (3) change the title of Board President
and Vice President to Board Chair and Vice-Chair, to allow the
Supreme Court to appoint both the Chair and Vice-Chair, and to
allow their terms to be two years as Chair and Vice-Chair
instead of one year terms, which will arguably allow for more
consistency on the Board.
Author's amendments :
1) On page 9, in line 19, strike out "Each member
appointed" and insert "When making appointments to the
Board"
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On page 9, in line 19, strike out "shall have" and
insert "each appointing body should consider appointing
members with"
On page 9, in line 20, strike out "educational" and
insert "education"
On page 9, in line 20, strike out "experience
expertise," and insert "experience,"
On page 9, after line 26, insert "(6) Immigration law"
2) On page 9, in line 39, strike out "three" and insert
"four"
On page 10, in line 10, strike out "three" and insert
"four"
On page 11, in line 14, insert "be four years" before
"and he"
Amend Section 6013.1 of the Business and Profession Code
to reflect a term of four years, instead of three, for
Supreme Court appointments to the Board.
.
3) On page 11, in line 34, strike out "its"
On page 11, in line 35, strike out "appointed" and
insert "the"
On page 11, in line 35, strike out "a president and a
vice president" and insert "of the board a chair and a
vice-chair"
On page 11, in line 36, strike out "president." And
insert "chair."
On page 11, strike out lines 37 through 39
On page 12, in line 1, strike out "year."
On page 12, in line 4, strike out "president, vice
president, and treasurer" and insert "chair and
vice-chair"
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On page 12, in line 6, strike out "appointment or" and
insert "appointment."
On page 12, strike out line 7.
On page 12, in line 8, strike out "president" and insert
"chair and vice-chair"
On page 12, in line 8, strike out "one-year, except" and
insert "two-years,"
On page 12, strike out lines 9 through 16
On page 12, in line 20, strike out "officers" and insert
"secretary and treasurer"
Staff notes, under current law, the 19-member Board consists of
a supermajority of attorneys (13) as compared to public members
(6). This bill creates a public member majority Board
consisting of seven public members and six attorney members.
The arguments offered by proponents of a public member majority
board appear to rely on the premise that attorneys would be
inherently self-interested and more likely to render decisions
as Board members that would advantage attorneys to the detriment
of the public. Proponents also argue that the State needs to
preserve anti-trust immunity<2> through changing the composition
of the Board from a supermajority attorney Board to a majority
public member Board.
Some letters received by the Committee point to the Supreme
Court decision of North Carolina State Board of Dental Examiners
v. FTC (2015) 135 S. Ct. 1101 as necessitating a need for a
public majority Board with each vote controlled only by the
public members. Staff notes, however, that the Court in the
North Carolina State Board of Dental Examiners case in no way
held that market participant majority boards would inherently
eviscerate the state's anti-trust immunity. Having a majority
---------------------------
<2> The United States Supreme Court in Parker v. Brown (1942)
317 U.S. 341 interpreted antitrust laws to confer immunity on
anticompetitive conduct by the States when acting in their own
sovereign capacity.
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public member controlled Boards would not ensure anti-trust
immunity with respect to every single decision or action taken
by the Board. They key for a State to receive anti-trust
immunity is for a Board to receive active supervision by the
State when it is engaging in decisions regarding market
participation. For example in the North Carolina case, the
state could not invoke anti-trust immunity because the state was
not actively supervising the Board when it determined that teeth
whitening could only be performed by dentists and issued
cease-and-desist letters to non-dentist teeth whiteners.
Notwithstanding the fact that the state had a Dental Practice
Act that did not address teeth whitening, the dental board
decided that teeth whitening was solely within dentists' scope
of practice.
Accordingly, it is unclear as to why the very fact specific
decision in the North Carolina case should have any impact on
how California decides the best composition of its State Bar
Board. The Bar makes suggestions about what rules practicing
lawyers should be subject to through their recommendations
regarding the Rules of Professional Conduct. The Supreme Court
ultimately determines whether to accept or reject those rules.
The State Bar's Office of Chief Trial Counsel makes
determinations regarding the discipline of lawyers. But, the
Supreme Court has final say in matters of discipline. It is the
Legislature and Supreme Court who make determinations about
criteria for becoming attorneys and what is within the scope of
practice of an attorney. There is nothing to suggest that the
State Bar Board has been engaging in the same kind of activity
that made the state of North Carolina lose their anti-trust
immunity in that specific circumstance.
Indeed, the Committee has not been made aware of any instances
in which our supermajority attorney Bar Board has been sued for
anti-competitive/anti-trust activity. Staff further notes that
other state professional boards, such as the Medical Board, are
comprised of a majority of members of the profession. Notably,
the Court in the North Carolina case actually noted that having
market participant controlled boards could be beneficial. As
stated by the Court, "[t]he States have a sovereign interest in
structuring their governments and may conclude that there are
substantial benefits to staffing their agencies with experts in
complex and technical subjects. There is, moreover, a long
tradition of citizens esteemed by their professional colleagues
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devoting time, energy, and talent to enhancing the dignity of
their calling." (Id. At 1115 (internal citations omitted).) An
effective way for the state to preserve its anti-trust immunity
is to ensure that appointees are ethical, balanced, and fair.
Each of the four appointing authorities have the obligation to
ensure their appointees, whether attorneys or non-attorneys,
possess high ethical standards. Doing away with
attorney-elected appointees, as this bill does, will ensure that
the Assembly, Senate, Governor, and Supreme Court maintain all
control over the caliber of appointees to the Board.
The following amendments are suggested to change the board
composition to consist of 6 public members and 7 attorney
members.
Suggested amendment :
On page 9, in line 37, strike out "Rules." and insert
"Rules, and one by the Speaker of the Assembly."
On page 10, in line 4, strike out "minimum of seven" and
insert "maximum of six"
On page 10, in line 18, strike "two" and insert "one"
On page 10, in line 19, strike "members" and insert
"member"
On page 10, strike out lines 27 through 32
The following suggested author's amendment would require that
members of the Executive Committee include at least one
appointee by each of the appointing entities. This will allow
for oversight and parity in participation by all appointing
entities in the most crucial decisions made by the Board.
Author's amendment :
Add a new section to the bill amending Section 6029 of the
Business and Professions Code to read:
(a) The board may appoint such committees, officers and
employees as it deems necessary or proper, and fix and pay
salaries and necessary expenses.
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(b) The members of the Executive committee shall include at
least one member appointed by each of the Supreme Court, the
Governor, the Senate Committee on Rules and the Speaker of the
Assembly.
The following amendments are suggested to: (1) remove
unnecessary provisions due to the removal of elected attorneys
and allow the appointing entities to appoint for unexpired terms
when vacancies occur; and (2) remove the bill's findings and
declarations as this bill is now substantive:
Suggested amendment :
1) On page 9, in line 39, after "years." insert
"Vacancies shall be filled for the remainder of the
term."
On page 10, strike out lines 11 through 15, and insert
"years. Vacancies shall be filled for the remainder of
the term."
On page 11, in line 13, strike out "commence at the
conclusion of the annual meeting"
On page 11, in line 14, strike out "Succeeding his or
her election or appointment,"
On page 11, in line 15, strike out "elected or"
On page 11, strike out lines 16 through 18 and insert
"qualified. Vacancies shall be filled for the remainder
of the term."
2) On page 4, strike out lines 1 through 31.
On page 5, strike out lines 1 through 40.
On page 6, strike out lines 1 through 3.
1.Refinements to Bagley-Keene and the California Public Records Act
This bill would provide that access to records of the State Bar
Court is subject to the rules and laws applicable to the
judiciary instead of the California Public Records Act and would
exempt the State Bar Court from the Bagley-Keene Open Meeting
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Act. Out of an abundance of caution to ensure that the
statutory exception to California Public Records Act enacted
last year, that prohibited sharing identifying information
submitted by an applicant to the State Bar, would not be
construed to be violated in the event of sharing information for
purposes such as announcing applicants who have passed the bar
examination, the author proposes the following amendments.
Author's amendments :
On page 13, in line 4, strike out "to the board"
On page 14, after line 28, insert "This subdivision shall
apply retroactively to January 1, 2016."
2.Push for removing the sections of the State Bar from the State
Bar
This Committee received letters urging it to amend the bill to,
at the very least, remove the sections from the State Bar.
Proponents of de-unifying the State Bar assert that the
structure is inherently infirm and results in a distracted State
Bar that spends too much time on "trade association" matters and
not enough time on discipline.
In support of decoupling, the Center for Public Interest Law
writes the following:
It is time for action. It is completely improper for a
government agency to mix regulatory duties with trade
association activities that are promotional and protective
of the profession the agency is supposed to regulate.
That creates a conflict of interest, and has resulted in
time-consuming and bureaucratic calculations of
expenditures which may be funded with compulsory Bar
licensing fees and those that may not be so funding. No
other California occupational licensing agency is
structured as such; no other agency has a 'Hudson
deduction' by which licensees can opt out of paying for
trade association activities they choose not to support.
Also, in support of decoupling, a group of Board Members,
including both Senate appointees, assert the following:
The Board of Trustees is a distracted regulator. It spends
AB 2878 (Committee on Judiciary)
PageH of?
much of its energy on professional association matters such
as appointments of attorneys to positions of prestige,
providing continuing legal education in competition with
voluntary bars and for-profit providers while also regulating
those providers, conducting an annual conference that draws
fewer attendees and requires greater subsidy each year,
publishing legal content, selling insurance, etc. [. . .]
over that past two years, the Board has spent far more time
in closed session addressing personnel, litigation and real
estate issues than it has devoted in open session to
regulation [. . .]. [T]he aspirations of attorney Trustees
to attain the coveted tile of president of the California
State Bar have very destructive consequences. Would-be
Presidents often identify themselves from the moment they are
seated and begin to compete for an election to be held three
years later. The election season is perpetual.
Although this bill does not provide for the removal of the
sections from the State Bar, it arguably addresses many of the
issues raised by those who wish to decouple the State Bar. For
example, this bill substantially revises the State Bar Act so as
to reduce the politics on the Board, shine light on State Bar
finances, provide victims of unauthorized practice of law a
better opportunity to be heard, and increases the likelihood
that victims of nefarious attorneys are able get restitution
from the Client Security Fund.
Support : California Lawyers Guild; Responsive Law; SEIU Local
1000 (support if amended); State Bar Board of Trustees Denny
Mangers, Heather Linn Rosing, Glenda Corcoran, and Joanna
Mendoza (support if amended); several individuals (support if
amended)
Opposition : Center for Public Interest Law (CPIL) (oppose
unless amended); several individuals (oppose unless amended)
HISTORY
Source : Assembly Committee on Judiciary
Related Pending Legislation : None Known
Prior Legislation : SB 387 (Jackson, Ch. 5, Stats. 2015)
AB 2878 (Committee on Judiciary)
PageI of?
authorized the State Bar of California to collect active
membership dues of up to $390 for the year 2016; required the
State Bar to develop and implement a specified workforce plan
for its discipline system; required the State Bar to conduct a
public sector compensation and benefits study, conduct a
thorough analysis of its operating costs and develop a spending
plan to determine a reasonable amount for the annual membership
fee, as specified; required the State Bar to contract with the
California State Auditor's Office to conduct an in-depth
financial audit of the State Bar; and made the State Bar subject
to the Bagley-Keene Open Meeting Act and the California Public
Records Act, as specified.
Prior Vote :
Assembly Floor (Ayes 79, Noes 0)
Assembly Floor (Ayes 10, Noes 50)
Assembly Judiciary Committee (Ayes 10, Noes 0)
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