BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1631|
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CONSENT
Bill No: AB 1631
Author: Monning (D)
Amended: As introduced
Vote: 21
SENATE JUDICIARY COMMITTEE : 4-0, 6/12/12
AYES: Evans, Harman, Corbett, Leno
NO VOTE RECORDED: Blakeslee
ASSEMBLY FLOOR : 77-0, 4/16/12 (Consent) - See last page
for vote
SUBJECT : Arbitration: legal representation
SOURCE : California Dispute Resolution Council
Securities Industry and Financial Markets
Association
DIGEST : This bill removes the sunset date on existing
law allowing an out-of-state attorney to represent a party
in an arbitration proceeding in this state or to render
legal services in this state in connection with an
out-of-state arbitration proceeding (referred to as the Out
of State Attorney Arbitration Counsel Program), provided
that the attorney, among other things (1) serves a
certificate, with specified information, upon the
arbitrator(s) or arbitral forum, the State Bar, and all
other parties and counsel in the arbitration, (2) obtains
written approval on the certificate from the arbitrator(s)
or arbitral forum and files the certificate as specified,
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and (3) submits to the disciplinary jurisdiction of the
California State Bar.
ANALYSIS : Existing law provides that no person shall
practice law in California unless an active member of the
State Bar. (Business and Professions Code (BPC) Section
6125)
Existing law provides that a party to an arbitration has
the right to be represented by an attorney at any
arbitration proceeding or hearing. (Code of Civil
Procedure (CCP) Section 1282.4(a))
Existing law authorizes an out-of-state attorney to appear
on behalf of a client in arbitration as long as the
out-of-state attorney files a certificate, as specified,
and once the certificate is approved by the arbitrator, the
certificate must be filed with the State Bar of California
and served on all parties to the arbitration. (CCP Section
1282.4(b)-(e))
Existing law provides that the out-of-state attorney
participating in an arbitration is subject to the
disciplinary jurisdiction of the State Bar of California.
(CCP Section 1282.4(f))
Existing law provides that the above-described provisions
sunset on
January 1, 2013. (CCP Section 1282.4(k))
This bill deletes that sunset provision.
Background
California courts allow out-of-state attorneys to appear
pro hac vice upon submitting an application to the court
and serving notice of the hearing on the application with
the State Bar. (California Rules of Court, rule 9.40.) At
the same time, many companies use in-house counsel to
handle many of their legal needs, including representing
the company during arbitration proceedings.
However, in Birbrower v. Superior Court (1998) 17 Cal.4th
119, the California Supreme Court ruled that a New York law
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firm which was advising a California client with respect to
a pending arbitration in California, and which had
represented the client in pre-arbitration negotiations, was
engaging in the unlawful practice of law in the state in
violation of BPC Section 6125. That section prohibits the
practice of law in California except by attorneys licensed
by the State Bar. Under Birbrower, the practice of law
includes representation of a client in an arbitration
proceeding and in proceedings leading to the arbitration.
In reaching its conclusion, the court declined to adopt an
arbitration exception to Section 6125, stating, "an
exception for arbitration is best left to the Legislature,
which has the authority to determine qualifications for
admission to the State Bar and to decide what constitutes
the practice of law." (Id., at 134)
That same year, in direct response to Birbrower, AB 2086
(Keeley), Chapter 915, Statutes of 1998, was enacted,
amending CCP Section 1282.4 to allow out-of-state attorneys
to represent parties in arbitration proceedings in
California, provided they followed the procedure specified
under that section. The California Supreme Court also
adopted a rule of court, currently Rule 9.43 (originally,
Rule 983.4) effective July 1, 1999, which required the
State Bar establish and administer a program to implement
the process by which out-of-state attorneys may comply with
the statute (Out-of-State Attorney Arbitration Counsel
Program). (See California Rules of Court, rule 9.43(b).)
As such, out-of-state attorneys can represent parties in
California arbitrations once they have satisfied, among
other things, the following requirements: (1) serve a
certificate, with specified information, upon the
arbitrator(s) or arbitral forum, the State Bar, and all
other parties and counsel in the arbitration; (2) obtain
written approval on the certificate from the arbitrator(s)
or arbitral forum and file that certificate, as specified;
and (3) submit to the disciplinary jurisdiction of the
California State Bar. (CCP Section 1282.4; California
Rules of Court, rule 9.43)
AB 2086 contained a two-year sunset provision stating the
authorization under Section 1282.4 would expire on January
1, 2001. In the years since, the sunset on that section
has been extended on numerous occasions, most recently
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through January 1, 2013. Notably, in 2006, in addition to
extending the sunset until January 1, 2009, AB 2482
(Harman), Chapter 357, Statutes of 2006, established the
current filing procedure of the arbitration certificate and
required the State Bar to issue a report and
recommendations, as specified, regarding the appearance of
out-of-state attorneys in arbitration hearings or
proceedings in this state to the Legislature by December
31, 2009.
This bill, co- sponsored by the California Dispute
Resolution Council and the Securities Industry and
Financial Markets Association, repeals the sunset date and
extends the section indefinitely.
Prior Legislation
SB 877 (Harman), Chapter 277, Statutes of 2009, extended
the sunset to January 1, 2013.
AB 2482 (Harman), Chapter 357, Statutes of 2006 (see
Background ).
AB 415 (Harman), Chapter 607, Statutes of 2005, extended
the sunset to January 1, 2007.
SB 2153 (Schiff), Chapter 1011, Statutes of 2000, extended
the sunset to December 31, 2005.
AB 2086 (Keeley), Chapter 915, Statutes of 1998 (see
Background).
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/13/12)
California Dispute Resolution Council (co-source)
Securities Industry and Financial Markets Association
(co-source)
ARGUMENTS IN SUPPORT : According to the author, "�t]he
out-of-state arbitration program is an effective, useful
program that should be a permanent fixture of California
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state law. Accordingly, this bill seeks to implement the
suggestion of the State Bar that 'consideration should be
given to whether the sunset provisions of CCP Sect. 1282.4
should be removed, which would make the requirements for
out-of-state attorneys to appear in California arbitration
proceedings permanent.'"
ASSEMBLY FLOOR : 77-0, 4/16/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Conway, Cook, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Fuentes, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman,
Hall, Harkey, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Cedillo, Davis, Furutani
RJG:m 6/14/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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