California Appellate Tracker

Scheer v. State Bar of California (In re Scheer)

April 28, 2016

Filing bankruptcy reinstates a lawyer’s license to practice by discharging her obligation to repay improperly collected attorney fees to her client.

An arbitrator ordered Scheer, a lawyer, to repay her client improperly collected attorney fees. When Scheer did not do so, the State Bar suspended her license. Scheer then filed a Chapter 7 bankruptcy petition and demanded reinstatement of her bar license under 11 USC 525(a), which prohibits government entities from denying or refusing to renew a license solely because a debtor has not paid a discharged or dischargeable debt in bankruptcy. The bankruptcy court wrongly held Scheer’s debt to her client was not dischargeable under 11 USC 525(a)(7) which exempts fines, penalties or forfeitures payable to governmental entities. Here, the unpaid sums were compensation owned clients, not penalties payable to the State Bar.

Ninth Circuit Court of Appeals (Owens, J.); April 14, 2016; 2016 WL 1459217

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Scheer v. State Bar of California (In re Scheer)

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