State Bar defends reinstating DA candidate’s license

The State Bar has defended its recent decision to reinstate the law license of an Orange County district attorney candidate as necessary to comply with federal bankruptcy law, not an attempt to violate a California Supreme Court order.

In a 76-page submission to the state's high court on Friday, the bar acknowledged it reinstated Westminster lawyer Lenore Albert on June 1 without her having paid discovery sanctions or disciplinary costs the court ordered her to pay when it suspended her from practice.

But the bar said once Albert, who filed for bankruptcy in late February, served her 30-day suspension and had only her more than $23,735 in debts to pay to regain her license, the agency was obligated under U.S. Bankruptcy Code to reinstate her. The bar said 11 U.S.C. § 525(a) prohibits a governmental entity from denying, revoking, suspending or refusing to renew a license "solely because" a debtor under the bankruptcy code has not paid a "dischargeable debt."

Though it had previously argued otherwise last month in a bankruptcy proceeding involving Albert, the bar's Friday filing says her debts are dischargeable as a matter of law under Chapter 13 of the U.S. Bankruptcy Code.

"By reinstating petitioner, the State Bar had no intention of exceeding its authority by violating a California Supreme Court order," the bar wrote.

"Rather, it was acting under the good faith belief that it was required to take such action to be in compliance with United States bankruptcy law," the agency continued. "To the extent this court disagrees, the State Bar respectfully requests guidance regarding how to proceed in future bankruptcy cases that may impact Supreme Court orders imposing dischargeable debts."

The Supreme Court had given the bar until June 15 to provide information about Albert's compliance with its suspension order prior to the bar reinstating her retroactively to March 16. The court said it was seeking the bar's response to Albert's pending motion to "reinstate her license, modify this court's order, and waive costs." Albert on Discipline, S243927.

The bar argued that Albert's reinstatement request should be deemed moot since she has her license back, but it opposed waiving her costs or modifying the court's order.

"Petitioner still owes these costs, and if petitioner's case is converted to a different bankruptcy chapter in which the costs she owes would be nondischargeable, if she fails to receive a discharge, or if her case is dismissed, her license should again be suspended pursuant to the terms of the December 13, 2017, order," the bar wrote.

Supreme Court spokesman Cathal Conneely wrote in an email: "The court doesn't comment on filings, but will review and deliberate on the submission in the context of Albert on Discipline, S243927."

Albert, who failed to advance from the June 5 primary to the general election in the district attorney's race, hailed the bar's filing as the result of her criticizing the agency for prosecuting attorneys "who lack the wealth to pay these attorney fees to their client's opponent."

"This is bigger than my license," she wrote in an email. "I predict and hope this will stop untold number of unjust suspensions/disbarments of other good consumer protection attorneys ... because they represented the poor and underrepresented people like I did. Sometimes the good guys do win."

In its filing, the bar also highlighted a state Supreme Court case in which the court ruled that the bankruptcy code does not preclude restitution ordered as a condition of a properly imposed suspension.

The court reached that conclusion on the basis that restitution is not imposed solely because the attorney has failed to pay a debt discharged in bankruptcy, but "it is imposed in order to protect the public and help rehabilitate the State Bar member." Brookman v. State Bar of California, (1988) 46 Cal.3d 1004.

"However, once these payments alone prevent Chapter 13 debtors from reinstatement, such conditions to license reinstatement are directly and squarely contradicted by the United States Bankruptcy Code and the United States Supreme Court decision in NextWave," the bar wrote, citing FCC v. NextWave Pers. Commc'ns Inc. (2003) 537 U.S. 293.

"This contradiction can only be resolved in favor of the controlling federal bankruptcy law pursuant to the Supremacy Clause," the bar continued.

The bar's filing was submitted by General Counsel Vanessa Holton, Deputy General Counsel Robert Retana and Assistant General Counsel Suzanne Grandt.