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Chandler v. State Bar of California

March 31, 2008


The opinion of the court was delivered by: Charles R. Breyer, District Judge.


The State Bar of California declared plaintiff, a California attorney, voluntarily inactive due to his failure to pay an arbitration award to a former client and this lawsuit followed. Now pending is defendants' motion to dismiss. After carefully considering the papers filed by the parties, the Court concludes that oral argument is unnecessary, see Civil Local Rule 7-1(b), and GRANTS defendants' motion to dismiss.


A. The California Mandatory Fee Arbitration Act

The California Mandatory Fee Arbitration Act (MFAA) governs attorney-client fee disputes pursuant to Business and Professions Code section 6200 et seq. The Act requires the State Bar to provide a system and procedure for the arbitration of attorney/client fee disputes. Cal. Bus. & Prof.Code § 6200(a). If a client requests arbitration of a fee dispute under the MFAA, the attorney must participate. Id. § 6200(c). The arbitration is non-binding unless the parties agree otherwise; however, the arbitration award becomes binding 30 days after the mailing of the notice of the arbitration award unless a party seeks a trial de novo within 30 days. Id. § 6203(b); § 6204.

If an attorney has not satisfied an award that has become final, the State Bar is required to enforce the award by placing the attorney on involuntary inactive status. Id. § 6203(d)(1). Before the attorney is placed on inactive status, State Bar rules give the attorney the right to file a response and have a hearing. State Bar Rules 702-704. Either party can appeal the Hearing Judge's ruling to the State Bar Court Review Department and both can seek California Supreme Court review. State Bar Procedure Rule 709, Cal. Rules Ct. 9.13(d).

B. The Arbitration Award Against Chandler

On May 1, 2007, and pursuant to the MFAA, an arbitration award was entered against Chandler and in favor of his former client Hyoung Ok Lee in the total amount of $8,643.75. The Court may take judicial notice of the arbitration award. Rowland v. Prudential Financial, Inc., 2007 WL 1893630 *1 n. 1 (D.Ariz.2007).

According to the State Bar Order granting the State Bar motion to make Chandler involuntary inactive (and of which this Court may also take judicial notice), Chandler filed a lawsuit against Lee in Marin County Superior Court on June 18, 2007. The lawsuit did not mention the arbitration award or seek a trial de novo on Lee's claim; instead, it sought $9,500 from Lee for the reasonable value of services on Lee's behalf. Chandler did not notify Lee or her attorney of the lawsuit.

Lee subsequently demanded that Chandler pay the arbitration award. On July 26, 2007, Chandler advised Lee that he had rejected the arbitration award by filing the Marin County lawsuit, but he had not served her with the complaint.

Chandler voluntarily dismissed the Marin County lawsuit on August 7, 2007. Shortly thereafter Lee asked the State Bar to enforce the arbitration award. Chandler continued to refuse to satisfy the award.

On October 5, 2007, Chandler file a second lawsuit against Lee in Marin County Superior Court. This time he sought $11,000 in outstanding attorney's fees.

The State Bar went forward with its enforcement action and on February 7, 2008 a State Bar hearing judge granted the State Bar's motion for enforcement of the arbitration award and ordered that Chandler be placed on involuntary inactive status until he pays the arbitration award. The judge ruled that Chandler's first Marin County complaint did not constitute a request for a trial de novo since it did not even mention the arbitration or Lee's claims against Chandler. The judge went on, however, to note that even if it was such a request, Chandler dismissed the lawsuit thereby restoring the arbitration award. Finally, the second Marin County complaint was not filed within 30 days of the arbitration award and thus did not keep the arbitration award from becoming binding.

C. This Lawsuit

While the State Bar enforcement action was pending, but before the State Bar actually ordered Chandler involuntarily inactive, Chandler filed the lawsuit presently pending before the Court. Chandler's complaint does not mention the arbitration award; instead, he contends that Lee demanded repayment of the attorney's fees based on false allegations that Chandler submitted false documents to the Department of Homeland Security. Complaint ¶ 5. He alleges further that Lee "sought assistance from the Defendants in an effort to extort money from Chandler based on her allegations of submitting false documents to the United States Department of Homeland Security." Id. ¶ 8. He alleges that Defendants conspired to punish Chandler based on facts they know to be untrue. Id. ¶ 10.

Chandler names as defendants the State Bar of California, Judy Johnson, its Executive Director, Jill Sperber, a State Bar attorney, and Alan Bloom, another State Bar attorney. Chandler's complaint makes a litany of claims:

First Claim: Section 1983 against individual defendants in their individual capacities; alleges defendants engaged in acts-undefined-that violated plaintiff's undefined constitutional rights.

Second Claim: Section 1983 against individual defendants in their official ...

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