New Legal Developments

Fee Arbitration Award Dischargeable in Bankruptcy

In re Scheer (9th Cir. 2016) 819 F.3d 1206
Attorney Scheer lost her bid to declare unconstitutional the State Bar’s process for suspending an attorney who does not pay a fee arbitration award.
Sheer then attempted to discharge the debt in bankruptcy. The State Bar contended that the award was a non-dischargeable fee or penalty.
Held: the debt was dischargeable. The court was reluctant to side with the defrocked attorney in this case and the State Bar suffered a rare loss in Federal court.