BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2878|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 2878
Author: Committee on Judiciary
Amended: 8/31/16 in Senate
Vote: 21
ASSEMBLY FLOOR: 10-50, 5/31/16 - See last page for vote (FAIL)
ASSEMBLY FLOOR: 79-0, 6/2/16 - See last page for vote
SUBJECT: Attorneys: State Bar: board of trustees
SOURCE: Author
DIGEST: This bill authorizes the State Bar of California (State
Bar) to collect annual membership dues for 2017 and, among other
things:
Reconstitutes the membership of the State Bar Board of
Trustees (Board) from a 19-member Board consisting of a
supermajority of attorneys (13) as compared to non-attorneys
(six), to a 13-member Board consisting of seven attorneys and
six non-attorney members, by eliminating the six attorneys
elected to the Board;
Provides that the President and Vice-President of the Board
are to be renamed as the Chair and Vice-Chair and to be
appointed by the Supreme Court instead of elected by the
Board;
Provides that each appointing body should consider
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Page 2
appointing members with education or experience in one of six
specified areas, including immigration law;
Provides that members of the Board serve four year terms
instead of three;
Codifies new 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);
Requires the Office of Chief Trial Counsel at the State Bar
to employ at least one supervising attorney with significant
immigration law experience;
Requires the Executive Committee to include at least one
Board member appointed by the Governor, Senate, Assembly, and
Supreme Court to ensure oversight and participation by all
appointing entities in the most crucial decisions made by the
Board;
Provides that access to records of the State Bar Court are
subject to the rules and laws applicable to the judiciary
instead of the California Public Records Act (CPRA) or
Bagley-Keene Open Meeting Act;
Enhances the annual financial audits of the State Bar and
requires an additional performance audit of the State Bar by
the State Auditor;
Requires the Attorney General to appoint a temporary State
Bar enforcement program monitor to evaluate the disciplinary
system, make recommendations, and report findings, as
specified;
Eliminates the ability of the State Bar to prevent future
Legislatures from reducing future membership dues;
Requires Board approval of contracts for goods, services, or
both for an aggregate amount in excess of $50,000 as well as
of contracts for information technology, goods, services, or
both, for an aggregate amount in excess of $100,000, as
specified;
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Requires the Board to adopt policies and procedures to
require Board approval of any contract that could impact the
State Bar's ability to carry out its paramount duty to
protect the public;
Prohibits the State Bar from creating foundations or
nonprofits, as specified; and
Requires the State Bar to conduct an analysis of the Client
Security Fund (CSF), as specified.
ANALYSIS:
Existing law:
1) 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.
2) Requires all attorneys who practice law in California to be
members of the State Bar, establishes that the State Bar is a
public corporation established for the purpose of regulating
the legal profession.
3) 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 2016. The other $75 is pursuant to
statutory authorization to assess annually the following
fees: $40 for the CSF; $25 for disciplinary activities; and
$10 to fund the Lawyer Assistance Program (LAP).
4) 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 2016. The other $40 is pursuant to
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statutory authorization to assess annually the following
fees: $10 for the CSF; $25 for disciplinary activities; $5
to fund the LAP.
5) 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 may deduct the $40 from the annual membership fee if
they elect not to have the amount allocated for the purposes
of legal services.
6) Subjects the State Bar to the 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.
7) 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.
8) Requires the Board to 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, as
specified.
9) Requires, in relevant part, that every two years, the Board
contract with the California State Auditor's Office to
conduct a performance audit of the State Bar's operations, as
specified.
10) Establishes that the State Bar is governed by a
19-member Board of Trustees consisting of six board members
who are not attorneys (public members) and 13 members who are
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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 and one public member is appointed by
the Senate Committee on Rules. One attorney and one public
member is appointed by the Speaker of the Assembly. Four of
the six public members are appointed by the Governor.
11) Provides that the State Bar officers are a president,
vice president, secretary, and treasurer, elected by the
Board.
12) 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.
13) 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 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.
14) 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.
15) 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
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obligation.
16) Authorizes the State Bar to raise additional revenue
by any lawful means, including, but not limited to, the
creation of foundations or not-for-profit corporations.
17) Requires the Board to establish and administer a CSF
to relieve or mitigate pecuniary losses caused by dishonest
conduct of active members of the State Bar, as specified.
18) Prohibits a person from practicing law in California
unless the person is an active member of the State Bar, and
provides for the fine and imprisonment of persons who engage
in the unauthorized practice of law, as specified.
19) Provides that in addition to any criminal penalties or
contempt proceedings, 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 (the "unauthorized practice of law"). The State Bar, or
superior court on its own motion, may make application for
assumption by the court of jurisdiction over the practice, as
specified. In any proceeding related to the unauthorized
practice of law, the State Bar is permitted to intervene and
assume primary responsibility for conducting the action.
20) Requires that the court provide a copy of any order
issued on the unauthorized practice of law to the Office of
the Trial Counsel of the State Bar.
This bill:
1) Requires, until January 1, 2018, the Board to charge an
annual membership fee for 2017 of $390 for active members.
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2) Provides 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 exempts the State Bar Court from the
Bagley-Keene Open Meeting Act.
3) Requires the California State Auditor's Office to conduct an
additional performance audit evaluating the State Bar's
progress in certain areas, including correcting any issues
raised in prior California State Auditor audits.
4) Requires the Board to expand the scope of its annual
independent financial statement audit to also include an
audit of its revenues, expenditures, and reserves.
5) Requires 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.
6) Requires the Board to transition from a 19 member Board to a
13 member Board, as specified.
7) Removes from the Board the six attorney members who are
elected from State Bar Districts and would make conforming
changes.
8) Requires that a maximum of six members of the Board be
non-attorney members appointed as follows: four by the
Governor, one by the Assembly Speaker, one by the Senate
Rules Committee, and none by the Supreme Court.
9) Provides that each appointing body should consider
appointing members with education or experience, in one of
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six specified areas, including immigration law.
10) Requires the Supreme Court to select a Chair and
Vice-chair of the State Bar.
11) Requires the Attorney General to appoint a State Bar
enforcement program monitor prior to March 31, 2017, and
requires the monitor to evaluate the disciplinary system and
procedures of the State Bar, as specified.
12) Requires the program enforcement monitor to submit an
initial report no later than October 1, 2019 and to issue a
final report before March 31, 2020. This provision sunsets on
January 1, 2021.
13) Deletes 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.
14) Eliminates the ability of the State Bar to prevent
future Legislatures from reducing future membership dues.
15) Requires Board approval of contracts for goods,
services, or both for an aggregate amount in excess of
$50,000 as well as of contracts for information technology,
goods, services, or both, for an aggregate amount in excess
of $100,000, as specified.
16) Requires the Board to adopt policies and procedures to
require Board approval of any contract that could impact the
State Bar's ability to carry out its paramount duty to
protect the public.
17) Prohibits the State Bar from creating any foundation
or nonprofit corporations, as specified.
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18) Requires the State Bar to conduct a thorough analysis
of the CSF and to submit a report to the Legislature on its
analysis of that fund by March 15, 2017, as specified.
19) 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.
20) Requires the Bar's Office of Chief Trial Counsel to
employ a supervising attorney with significant immigration
law experience, including representing individuals in removal
proceedings and asylum applications.
Background
The State Bar 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
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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 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. Ultimately, if the
Bar dues bill fails to pass or is vetoed, the Supreme Court can
exercise its inherent constitutional power over regulation of
the legal profession and order a special regulatory assessment
to fund the State Bar's discipline-related functions.
This bill authorizes the State Bar to collect the annual
membership dues for 2017 and makes 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.
Comments
1)Stated need for the bill. The author writes the following:
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 publicly reported turmoil
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. [. . . ] This
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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 State Bar functions as the administrative arm of the
Supreme Court. 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 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. 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.)
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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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
SUPPORT: (Verified8/31/16)
None received
OPPOSITION: (Verified8/31/16)
None received
ASSEMBLY FLOOR: 10-50, 5/31/16 (FAIL)
AYES: Atkins, Cooley, Dodd, Gordon, Jones-Sawyer, O'Donnell,
Quirk, Santiago, Mark Stone, Rendon
NOES: Alejo, Travis Allen, Arambula, Baker, Bigelow, Bonta,
Brough, Brown, Burke, Calderon, Campos, Chang, Chávez, Chiu,
Chu, Cooper, Dababneh, Gallagher, Cristina Garcia, Gatto,
Gipson, Gonzalez, Gray, Grove, Harper, Roger Hernández,
Holden, Irwin, Jones, Lackey, Levine, Lopez, Low, Maienschein,
Mathis, Mayes, McCarty, Medina, Obernolte, Olsen, Patterson,
Rodriguez, Salas, Steinorth, Ting, Wagner, Waldron, Weber,
Wilk, Wood
NO VOTE RECORDED: Achadjian, Bloom, Bonilla, Chau, Dahle, Daly,
AB 2878
Page 13
Eggman, Frazier, Beth Gaines, Eduardo Garcia, Gomez, Hadley,
Kim, Linder, Melendez, Mullin, Nazarian, Ridley-Thomas,
Thurmond, Williams
ASSEMBLY FLOOR: 79-0, 6/2/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos,
Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh,
Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher,
Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,
Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger
Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,
McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,
O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Bigelow
Prepared by:Margie Estrada / JUD. / (916) 651-4113
8/31/16 21:22:44
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