106th Installment. Lawyer dues—not penalties imposed on respondents—should fund disciplinary tribunals

California may be unique in unconstitutionally allowing its attorney guild to enforce its self-adjudicated costs as a judgment, but the universal state-bar practice of charging costs to respondents (regardless of how the state bars can collect them) derives from changes in the criminal law that, despite their legality, damage the system’s integrity: policies of victim restitution and social restitution. The critique of social-restitutionary state-bar costs begins with its prototype, victim restitution in criminal law, of which there has accumulated much more legal and societal experience.

Victim restitution in criminal law

The award of state-bar “costs” (in most jurisdictions) is sequel to the practice, itself growing out of victim restitution, of appropriating from criminal defendants an array of “imaginative fees.” (HT for phrase to Rosenthal and Weissman, below.) Wildly popular (despite its hollowness, where only 3% of restitution fines are paid), victim restitution led inexorably to charging convicted defendants for every manner of administrative expense (such as their room and board). If the criminal must make restitution to the designated victim, why shouldn’t he compensate society, too? Once the policy became acceptable, the rush to solve budgetary shortfalls by taxing criminal defendants became irresistible. (Former Chief Justice George in California promoted such fundraising.) The first wave started in the 1970s and culminated in the 1980s in the widespread use of restitution in an amount apportioned to the defendant’s means. The second wave occurred in the 1980s and 1990s, when full restitution widely became mandatory and numerous fees were imposed.

This was the Reaganite “victims’ rights” movement, which included other disruptions—such as victim-plight testimony during sentencing—of reasoned jurisprudence. “Victims’ rights” was largely a sop to victims outraged by plea bargaining, which flowered in the 1970s after the U.S. Supreme Court, in Brady v. United States (1970), legitimized it. Defendants were to be charged the costs of their crimes to their victims, who were also allowed to influence sentencing by diatribe.

Restitution and fees are lauded despite the lack of evidence of their rehabilitative effectiveness and their scorn for one of criminology’s established principles: crime is born of poverty. Eighty-five percent of criminal convicts are indigent. Restitution in criminal law purports to teach the lesson that criminals are personally responsible for their crimes, whereas, in fact, crime is fundamentally a product of social conditions. Society cannot teach criminals to accept rather than deny responsibility when, in the very process of this attempted indoctrination, society denies its own responsibility for causing crime.

Restitution expresses and reinforces the ideological denial of poverty’s fundamental role in crime. The fetishism of “personal responsibility” makes it easy to treat the primary victims of harsh economic inequalities as if they were the ones who should provide restitution. This ideological denial helps explain the tolerance of the American public for mass incarceration.

The availability of compensation for the victims of criminal acts is a form of social insurance. Restitution (3% recovery rate) is insufficient.

It is also socially unjust: victim restitution amounts to a highly regressive tax. This became completely obvious with the 1996 federal law (and similar measures in most jurisdictions, including Penal Code § 1202.4 in California), which required judges to order full restitution regardless of the criminal defendant’s ability to pay, but regressive taxation is inherent in restitution in criminal law, since the overwhelming majority of criminal defendants are indigent. If compensation for targets of crime were treated as a social-insurance issue (as is the European tendency), it would be funded through progressive taxation.

The ultra-individualist complexion of victim restitution helps state actors deny that the development of a sophisticated and nuanced law through courtroom contests is a public good. The numerous “imaginative fees” that the restitutionary mentality spawned amount to a tax on the litigation of criminal allegations. Although “victim rights” was a reaction to universalizing the plea bargain, it has served as its handmaiden by providing another incentive to settle criminal cases before the fees accumulate, at the expense of broadening the corpus of law on which a common-law system depends.

The state-bar ramifications of criminal law’s victim-restitution practices

The “imaginative fees” that restitution spawned in criminal law have been avidly adopted by the state bars, which routinely charge investigation, litigation, and court costs to respondents, including costs pertaining to counts eventuating in acquittal. These “costs” easily run to thousands of dollars, often to over ten thousand—a high price for bar counsel and bar-court judges’ incompetent legal work. They suffer all the demerits of criminal law’s restitution-inspired measures: denial of systemic causes of infractions, regressive taxation, and stunted development of law.

While Bar “costs” are like restitutionary fines in denying the primary role of the system in engendering offenses—whether crimes or ethics’ infractions—they differ in manner. The role of system in legal ethics is not so much to cause infractions but rather to self-servingly define them. (For example, over-prosecuting negligent misappropriation and violation of court orders while disregarding fraud by employers and the sacrifice of client interests to the judiciary’s interests.) Yet, the direct economic causes of ethical infractions shouldn’t be entirely ignored; notably, the state bars have failed to bring cases against law-school administrators who have deceived students about their prospects in law, helping create a cutthroat economic climate.

State Bar “disciplinary costs” fall as a regressive tax on those least able to pay. Indigence may not be an important cause of legal-ethics violations, but once their cases come to issue, many attorneys who face discipline charges are impoverished. The reason is that the filing of a notice of charges is public information, which almost invariably cripples a respondent’s law practice. Until their final hearing, respondents are presumed innocent, yet they are taxed with costs that deter them from upholding their innocence.

Even more than for criminal law, which has enjoyed a long evolution, the disincentive to litigate cases stymies the development of bar law. Bar law remains primitive because of the avoidance of real contention, and bar “costs” are an important mechanism for enforcing legal blandness. 

Conclusion

An attorney-discipline system (supposedly) serves the entire profession and, accordingly, should be funded by dues-paying lawyers.  As it most serves the most profitable law firms, an ideal bar would tax its members progressively—and certainly wouldn’t extort funds from beleaguered state-bar respondents.

Facts:

Dickman, M. "Should crime pay: A critical assessment of the Mandatory Victims Restitution Act of 1996." (2009) California Law Review, 97:6(4).

Rosenthal, A. and Weissman, M. “Sentencing for dollars: The financial consequences of a criminal conviction.” (2007)

105th Installment. Humiliated California State Bar tries to corrupt the Franchise Tax Board: The search for a sufficiently despicable debt collector

Reeling at exposure of its partnership with debt-collection thugs at Wakefield Associates, the California State Bar now overreaches by trying to fraudulently manipulate tax collection. Rather than, as before, delegating to gray-market criminals the collection of its fake trial, litigation, and investigation costs, the Bar will ask California’s tax collectors to hand over any refunds due these respondent “debtors.” This collection method is used for back taxes and judgments owed state agencies (Gov. Code, § 12419.5), but as the U.S. Supreme Court held, the California State Bar is not a government agency for the purpose of adjudicating members’ federal rights. (Keller v. State Bar of California (1990) 496 U.S. 1, 11.) By treating “costs” as an ordinary judgment owed California, the State Bar treats its unilateral claims for money owed as a real court-judgment’s equal, flagrantly violating lawyers’ federal right to due process.

The illegality of the State Bar’s collection methods can be clearly understood from two legal histories: 1) the changes in methods the Legislature has authorized for collection of the State Bar’s costs and 2) the State Bar’s previous attempt to misappropriate the prerogatives of a “government agency.”

Before 2004, the State Bar could recover costs from lawyers by only a single means: conditioning readmission on payment; but with the passage of Business and Professions Code section 6086.10, the State Bar unconstitutionally acquired the prerogative to enforce its claims through the courts without a real judgment—without even any process for its lawyer victims to contest the State Bar’s invoice. Why did these changes wait until 2004? Because there are decisive legal reasons to deny the State Bar use of coercive collection methods. To allow the State Bar to recover based on its own edict is to deny respondent lawyers their due-process right to an impartial tribunal: constitutionally, the State Bar can’t act as both a respondent’s opponent and as adjudicator of cost claims. (Nor can this role be filled by the California Supreme Court, since it functions as the State Bar’s boss, this role distinguished from its being the state court of last appeal.)

The State Bar’s overreaching raises the same question the U.S. Supreme Court answered in Keller, a case also illustrating how distant from the legal mainstream—how extremist—is the California Supreme Court when it comes to supporting the State Bar’s goonish methods: in Keller, the U.S. Supreme Court rejected the California Supreme Court’s decision unanimously. Keller invalidated the State Bar’s practice of shamelessly using members’ dues for political propaganda. Political use of tax dollars by state agencies is permitted, and the California Supreme Court had held that the State Bar was entitled to its political spending because California law terms it a state agency. (See Keller v. State Bar (1989) 47 Cal.3d 1152 [reversed].)

This false characterization was refuted by a three-member minority of California Supreme Court justices and a unanimous Supreme Court of the United States. The State Bar can be a “government agency” for some state-law purposes, but when members' federal rights are at issue, it should be treated as a private club. Its most important differences from a “government agency” are that the State Bar is run, not by the public, but by its members; and the State Bar is financed, not by taxes, but by members’ dues. Both the U.S. Supreme Court and the California high-court’s minority analogized the State Bar to a labor union. (I think the prohibition on political spending is unfortunate as applied to labor unions, but that’s another question.)

Now, take the labor-union analogy a step further. Imagine that a union tried to levy on debt it unilaterally claimed a union member owed. That’s what the State Bar (with the State Legislature’s connivance) proposes. A “judgment” for "reasonable costs" issued (as a blank check) by the Supreme Court in its Bar-supervisory capacity is as unconstitutional as was the State Bar’s political propaganda.

100th Installment. California State Bar Colludes with Gray-Market Criminals: Nefarious Collection Practices using “Wakefield Associates” on Bogus “Debt”

The State Bar’s collection practices

The California State Bar employs gray-market criminals, illegal collection thugs, to try to recover its unconscionable “costs” from respondents. These collection thugs try to harass respondents into paying the invented sums.

Collections are ineffectually federally regulated under the Fair Debt Collection Act, which makes it illegal to call people to annoy them. (§ 806, subd. 5 [“causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with the intent to annoy … any person at the called number”].) The collector the California State Bar uses—Wakefield Associates, based in Colorado—is one of numerous illegal collections operations, which go unprosecuted because they systematically avoid pursuing supposed debtors in their home states. This is the key to recognizing them: legitimate collection is by writ of execution on a judgment, for which being based in a different state is disadvantageous. These thugs’ motto is “a call a day until you pay.” They will deny they are engaging in harassment, by refusing to admit the obvious: that harassment is the only conceivable definition for calling someone who makes it clear they want you to stop. 

To eliminate the interstate collections thugs would require more than the ineffectual Federal Trade Commission, charged with enforcing the Fair Debt Collection Act: the U.S. Justice Department would need to concern itself, but the Justice Department is fully occupied with providing legal cover for torture at Guantanamo and waging its war against adolescents using birth control.

Dealing with collection thugs

The gray-market collections operations obfuscate three basic legal principles, which suffice for anyone having to confront these criminals:

1. Collectors have rights no greater than their creditor principals.
2. Creditors have rights no greater than any other citizen.
3. No citizen can dictate what another says over the telephone, but anyone can (only) deny permission to phone.

From these principles, it follows that it suffices legally to tell a collector you don’t want to deal with it to compel it to stop calling. But then, collections thugs operate outside the law (their basis of existence consists of illegal practices: badgering weak, ignorant people into paying supposed debts). Realistically, much more is required to deter them: anyone who calls one of these criminals back a few times—or more—should be commended for performing a public service. (Legally, you can call these telephone tough guys back as many times as you like and say what you want: they can hardly complain of harassment—although they’ll threaten—since they initiated communication and insist on continuing it.)

Birds of a feather

Where is the California State Bar in prosecuting the attorneys who advise these gray-market criminals on how to avoid prosecution? The answer is that they aren’t to be seen, where the State Bar colludes with these criminal collections’ operations. The specific collection syndicate used by the California State Bar engages in the usual violations of local anti-harassment and federal statutes but goes a step further. The Fair Debt Collection Act requires that the collector disclose its identity to caller ID, but Wakefield Associates refuses. Even when it identifies itself orally, it refrains from revealing it’s a private collection company, deceptively identifying itself as “the judicial recovery unit.” Although I doubt they would fool any state-bar respondent, some other corrupt judicial organs must use Wakefield Associates’ services, and they succeed in deceiving the legally naïve into fearing that criminal justice is their pursuer. The business model of these gray-market criminals is otherwise inexplicable. For the California State Bar, thuggery is business as usual.

96th Installment. Challenge the California State Bar Court Fee Schedule in Federal Court

A legal-ethics hypothetical

Attorney charges client $17,000 for a $2,500 matter. When astounded client inquires, attorney’s billing office explains that attorney bills in $15,000 increments.

Hypothetical question on the California Rules of Professional Conduct:

Has attorney committed an ethics violation?

Answer:

Attorney has gravely violated Rules of Professional Conduct, rule 4 –200(A), which prohibits charging an “unconscionable fee.”

The fee is unconscionable because when fees are based on work done, they must be based on the work done on the particular case. The fee must be based on “all the facts and circumstances” of the particular case. (Rules Prof. Conduct, rule 4 –200(B) [emphasis added].) Equivalence classes are allowed for work of equal expected amount but not when the work is highly variable within the range.

What discipline for the routine use of this despicable practice? I don’t have access to the State Bar Review Department’s deliberately inaccessible case law, but I’d estimate a one-year suspension. Other opinions?

The California State Bar’s outrageously unconscionable fee structure

In another manifestation of its ethical villainy, the State Bar charges respondents’ legal costs and fees in exactly this shameful manner, brazenly defending its prerogative to save administrative costs by overcharging. Defense attorney D.C. Carr (Kafkaesq) provides a much-needed exposure of this fee structure. Some examples. 1) A simple challenge before the Review Department costs about $15,000 if taken during the first 120 days. 2) If a trial lasts a fraction of a second day, the cost rises about $6,000.

The California State Bar Court’s state and federal vulnerabilities

There are at least two bases for challenging the fee structure—one at the state level, directed to the fees alone; the other federal level, directed against the whole action because the fee structure denies due process. The state-level challenge is based on the State Bar’s having exceeded its jurisdiction. Since the averaging method the State Bar uses is unethical under the Rules of Professional Conduct as well as under ordinary morality, Business & Professions Code section 6086.10, which provides the right to levee fees, isn’t plausibly interpreted as giving the State Bar the right to impose fees unrelated to costs. The statute allows the State Bar “reasonable costs,” a term of art in California civil procedure, requiring an account of actual costs in the particular case.

The federal challenge is based on the federal standards for due process, which focus on the right to be heard, apply to state courts, and are offended by arbitrary fees. Business & Professions Code section 6086.13 permits waiver for hardship but doesn’t compel it, where the threat of huge, disproportionate fees typically leverages settlement terms and routinely prevents respondents from being heard.

I plan future Installments to consider the procedural issues in mounting a state or federal defense based on the theory that the fee structure denies respondents the right to be heard.