REGULATORY AGENCY ACTION

ing for a flurry of similar trials which have The State Bar Act, Business and Pro­ fall. Weintraub has served on the Los An­ already cost utilities millions of dollars. fessions Code section 6000 et seq., desig­ geles Unified School District Board since As Zuidema ended, several other cases nates a Board of Governors to run the State 1979, and has twice served as its presi­ involving EMF exposure are still pending Bar. The Board President is elected by the dent. in California. In San Diego County, a class Board of Governors at its June meeting action has been filed against SDG&E by and serves a one-year term beginning in ■ MAJOR PROJECTS residents whose homes near the San September. Only governors who have Onofre nuclear power plant abut a power served on the Board for three years are Bar to Create California Legal line, and in Fresno at least twelve teachers eligible to run for President. Corps. At its January 23 meeting, the and children at an elementary school have The Board consists of 23 members­ Board of Governors approved a proposal been diagnosed with cancer. The cancer seventeen licensed attorneys and six non­ to create a task force to develop plans for victims all have been identified as having lawyer public members. Of the attorneys, the formation of a new "California Legal spent considerable time in two classroom sixteen of them-including the Presi­ Corps," a program designed to increase areas close to power lines owned by dent-are elected to the Board by lawyers access to justice and the legal system for PG&E. in nine geographic districts. A representa­ low-income Californians and enhance at­ tive of the California Young Lawyers As­ torney participation in legal services pro­ ■ RECENT MEETINGS sociation (CYLA), appointed by that grams. First proposed by State Bar Presi­ On April 22, the PUC held the first of organization's Board of Directors, also dent Harvey Saferstein, the Legal Corps three hearings on the challenges and op­ sits on the Board. The six public members will be a vehicle for law students, recent portunities facing the electric service in­ are variously selected by the Governor, law school graduates, and other attorneys dustry in the near future. The hearing fea­ Assembly Speaker, and Senate Rules to help low-income people obtain legal tured a dialogue involving the chief exec­ Committee, and confirmed by the state assistance, and hopefully make up for a utive officers of the four major electric Senate. Each Board member serves a rapidly declining level of funding for Cal­ power companies in California and stems three-year term, except for the CYLA rep­ ifornia legal services programs. The Bar, from the February report issued by the resentative (who serves for one year) and which distributes accrued interest on PUC's Strategic Planning Division enti­ the Board President (who serves a fourth attorneys' client trust funds to legal ser­ tled California s Electric Services Indus­ year when elected to the presidency). The vices programs for the poor through its try: Perspectives on the Past, Strategies terms are staggered to provide for the se­ Interest on Lawyers' Trust Accounts for the Future. The second hearing will be lection of five attorneys and two public (IOLTA) program, will be distributing held on May 25, and the third on June 24. members each year. about 33% less money in 1993-94 than it The State Bar includes twenty standing did in 1992-93, due to declining interest ■ FUTURE MEETINGS committees; fourteen special committees, rates. The full Commission usually meets addressing specific issues; sixteen sec­ The proposed Legal Corps will have every other Wednesday in San Francisco. tions covering fourteen substantive areas two components: a large group of volun­ of law; Bar service programs; and the teers who will work with legal services Conference of Delegates, which gives a programs on preventive law and commu­ representative voice to 291 local, ethnic, nity education, and a one-year fellowship STATE BAR OF and specialty bar associations statewide. program for first-year lawyers which CALIFORNIA The State Bar and its subdivisions per­ would include a small stipend and law form a myriad of functions which fall into school loan repayment assistance. The Bar President: Harvey I. Saferstein six major categories: (I) testing State Bar also hopes to incorporate an institutional­ Executive Officer: applicants and accrediting law schools; ized disaster response plan into the Legal Herbert Rosenthal (2) enforcing the State Bar Act and the Corps effort. (415) 561-8200 and Bar's Rules of Professional Conduct, The Legal Corps may receive partial (213) 580-5000 which are codified at section 6076 of the funding through a mechanism to be estab­ TDD for Hearing- and Speech­ Business and Professions Code, and pro­ lished in SB 536 (Petris) (see LEGISLA­ Impaired: moting competence-based education; (3) TION). The bill would require the Bar to ensuring the delivery of and access to legal establish and manage the Corps, and spec­ (415) 561-8231 and services; (4) educating the public; (5) im­ ify that the program must sponsor preven­ (213) 580-5566 proving the administration of justice; and tive law projects, alternative dispute reso­ Toll-Free Complaint Hotline: (6) providing member services. lution efforts, legal support for victims of 1-800-843-9053 In February, Governor Wilson ap­ disasters, and other activities designed to pointed Wendy H. Borcherdt of Los An­ help improve access to justice for all Cal­ geles to serve as a public member on the ifornians. SB 536 would also allow courts he State Bar of California was created Board of Governors. Borcherdt replaces to distribute unclaimed funds from class Tby legislative act in 1927 and codified public member Kathryn Thompson, who action judgments, plus interest, "in any in the California Constitution at Article resigned from the Board in 1992. manner the court determines is consistent VI, section 9. The State Bar was estab­ Borcherdt is a longtime Republican who with the objectives and purposes of the lished as a public corporation within the is president of Borcherdt and Associates, underlying class action"-including the judicial branch of government, and mem­ a public policy consulting and lobbying California Legal Corps. Although Gover­ bership is a requirement for all attorneys firm. Also in February, Senate President nor Wilson vetoed a similar bill in I 991 practicing law in California. Today, the pro Tern David Roberti appointed Roberta [11:4 CRLR 212], that measure would State Bar has over 128,000 members, L. Weintraub of Los Angeles as a public have allowed distribution of unclaimed which equals approximately 17% of the member to replace Richard Annotico, class action funds directly through the nation's population of lawyers. whose third term on the Board expired last IOLTA program.

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Bar President Saferstein was charged appointments to the task force have been dling a case; advertisements which list a with appointing members to the task force, announced. trade or fictitious name without including who will include attorneys, members of Bar Establishes Lawyer Advertising the name of the lawyer behind the ad; the business community, and representa­ Task Force. In response to pressure by the dramatizations, unless they include a dis­ tives of legal services programs. At this legislature and the public, Bar President claimer stating "this is a dramatization"; writing, no appointments have been an­ Harvey Saferstein recently created the advertising that does not contain the name nounced. Lawyer Advertising Task Force. Headed and State Bar number of the attorney re­ Bar Creates Commission on the Fu­ by Board member Lawrence Crispo, the sponsible for it; and mailers (except for ture of the Legal Profession and the task force will examine whether existing professional announcements) that do not State Bar. At its January meeting, the lawyer advertising regulations suffi­ bear the word "advertisement" or "news­ Board of Governors established a new ciently protect consumers and, if not, letter" on every page. commission to study the future of the legal whether greater restrictions would be con­ New Bar Publication Approved. profession and the role of the State Bar­ stitutional. The issue pits concerns that After delaying a decision at its January as currently structured-in regulating it. lawyer advertisements mislead consumers meeting, the Board of Governors voted in This action follows Governor Wilson's against concerns that limits on attorney April to approve the publication and dis­ September 1992 veto of AB 687 (W. advertising violate free speech rights. In tribution of State Bar Bulletin, a new Brown), which would have required the its 1977 decision in Bates v. State Bar of monthly tabloid newspaper, to its mem­ Board of Governors and specified legisla­ Arizana, the U.S. Supreme Court recog­ bers starting in January 1994. This publi­ tors to appoint a 21-member task force to nized lawyer advertising as commercial cation will replace the Bar's current study whether the "integrated" State Bar speech which is deserving of protection, twelve-page State Bar Report insert in the should be abolished; an earlier version of and struck down an Arizona ban on such Daily Journal Corporation's California AB 687 would have abolished the State advertising. While false and misleading Lawyer. Although past in-house publish­ Bar and delegated the state's regulation of advertising may be barred, the Court held ing attempts have failed, proponents of the attorneys to a new Attorneys' Board of that attorney advertising of routine legal new publication cited a need for an inde­ California within the Department of Con­ services must be permitted. Since that de­ pendent publication so as to insulate Bar sumer Affairs. [13:1 CRLR 140-41; 12:4 cision, there has been a tremendous in­ public relations and communications from CRLR 233] crease in attorney advertising. Critics con­ other, sometimes "anti-Bar" articles The commission will consist of nine tend that much attorney advertising-par­ which have appeared in California Law­ members appointed by the Governor and ticularly in the personal injury area-mis­ yer. I 13:1 CRLR 141] legislature, and as many as sixteen mem­ leads consumers and even encourages Four members of the Board of Gover­ bers appointed by the State Bar President. them to abuse the legal system by filing nors dissented from the vote, citing the The commission is to submit interim re­ frivolous lawsuits for the purpose of ob­ cost of the publication and a projected $2 ports to the Board of Governors every six taining "nuisance settlements." million deficit in the Bar's budget during months, and a final report by the end of In spite of the Bar's move, As­ 1994. The Bar currently uses $136,000 of 1994. As part of its purview, the commis­ semblymember Paul Horcher has reintro­ its members' dues under its contract with sion will incorporate a yearlong review of duced his bill to enact a comprehensive the Daily Journal Corporation, and would the Bar's discipline system, which is al­ plan regulating false and misleading law­ be required to spend at least $146,000 per ready under way. yer advertising; a similar Horcher bill was year to publish its own newspaper. Bar On March 30, Bar President Harvey rejected in committee last year. [ 12:4 Senior Communications Executive Saferstein appointed Los Angeles attorney CRLR 237] The bill would prohibit any Christy Carpenter assured Board mem­ Patricia Phillips to chair the commission. guarantee of the outcome of a lawsuit, bers that she expects to break even on the Phillips is a former member of the Board suggestions of immediate cash settle­ publication because it will include adver­ of Governors and was the first woman ments, and unlabeled testimonials or dra­ tising. She foresees the need to add only president of the Los Angeles County Bar matizations. According to Horcher, the one part-time writer and one advertising Association. At this writing, no other ap­ bill would expand current State Bar rules salesperson to the Bar's current communi­ pointments to the Commission have been on lawyer advertising and incorporate ad­ cations staff. announced. vertising rules similar to sweeping con­ Bar Increases Applicant Fees. At its Task Force to Study Sexual Orienta­ trols on lawyers advertising that have been January meeting, the Board of Governors tion Discrimination in the Legal Profes­ implemented in Florida (see LEGISLA­ approved applicant fee increases which sion. Also in January, the Board of Gov­ TION). became effective on March I. Specific­ ernors established a task force to study At two public hearings held by the task ally, the Board approved a $5 increase sexual orientation discrimination in the force in January, most of the speakers (from $50 to $55) for a law student's reg­ legal system and the legal profession. The noted that the Bar's rules already prohibit istration with the Bar, a $15 increase (from sixteen-member task force will examine false and misleading advertising, and ar­ $15 to $30) in the Bar's late filing fee for the prevalence of bias against gay, lesbian, gued that stricter regulation of attorney law student registration, a $50 increase and bisexual litigants in the legal system, advertising would likely run afoul of the (from $50 to $ 100) for registration as an and the participation of gay, lesbian, and first amendment. In early March, the task attorney applicant, a $15 increase (from bisexual lawyers in the profession. The force drafted six amendments to Rule of $285 to $300) in the fee for the first-year Board allocated $9,000 to fund the study; Professional Conduct 1-400 which have law students' examination, a $15 increase pursuant to the Keller decision, the money been released for a public comment period (from $250 to $265) in the fee for an will come from not from mandatory attor­ ending on July 16. The amendments application for determination of moral ney licensing fees but from funds contrib­ would prohibit attorneys from advertising character, a $60 increase (from $65 to uted by California lawyers who choose to "no fee" contingency arrangements unless $125) in the fee for an application for pay the so-called "Hudson deduction" the ad also specifies whether clients are extension of determination of moral char­ (see LITIGATION). At this writing, no liable for the attorneys' expenses in han- acter, a$ I 5 increase (from $310 to $325)

California Regulatory Law Reporter• Vol. 13, Nos. 2&3 (Spring/Summer 1993) 219 REGULATORY AGENCY ACTION

in the fee to take the California Bar Exam which law students may be certified to scheduled on the Board of Governors' for general applicants, a $50 increase give legal advice to clients, negotiate on agenda. (from $425 to $475) in the fee to take the behalf of clients, appear at depositions and • Discrimination in Management ofa California Bar Exam for attorney appli­ in court on behalf of clients, and appear on Law Practice. At its March meeting, the cants, and a $20 increase (from $20 to behalf of a government agency in the pros­ Board of Governors adopted proposed $40) in the fee for an admission certificate. ecution of criminal actions-all under the Rule 2-400, which would provide that "in State Bar Rulemaking. The follow­ direct supervision of a supervising attor­ the management or operation of a law ing is a status update on proposed regula­ ney, is to provide for the operation of a practice a [State Bar] member shall not tory amendments considered by the State program of practical training for law stu­ unlawfully discriminate or knowingly Bar in recent months: dents as a valuable complement to aca­ permit unlawful discrimination on the • Gifts to Attorneys From Clients. In demic classes. These regulations will be­ basis of race, national origin, sex, sexual response to widespread publicity concern­ come effective on or after the date the orientation, religion, age or disability in: ing a southern California attorney who California Supreme Court approves new (I) hiring, promoting, discharging or oth­ allegedly prepared wills for elderly clients Rule of Court 983.2. The Bar submitted eiwise determining the conditions of em­ which made him the recipient of millions the new rule in December 1992; at this ployment of any person; or (2) accepting of dollars in cash, stock, and real estate, writing, the court has not yet approved the or terminating representation of any cli­ the Board of Governors commenced a rule. ent." [ 12:4 CRLR 235-36] At this writing, rulemaking proceeding in February to • Deposit of Advance Fees in Trust the rule has not yet been approved by the amend Rule of Professional Conduct 4- Account. In June 1992, the Board of Gov­ California Supreme Court. 400. The revised rule would prohibit State ernors adopted amendments to Rules of • Suspension of Attorneys Who Fail Bar members from ( 1) inducing a client to Professional Conduct 3-700 and 4-100, to to Comply with Child Supporl Orders. On make a gift, including a testamentary gift, require that all advance fees paid by a January 14, the California Supreme Court to the member or the member's parent, client to a State Bar member be placed in approved Rule of Court 962, which will child, sibling, or spouse, except where the the member's client trust account unless enable the Bar to comply with AB 1394 client is related to the member, and (2) the member's written fee agreement ex­ (Speier) (Chapter 50, Statutes of 1992). preparing an instrument giving any gift pressly provides that the fee paid in ad­ The new law, which became effective in from a client to the member or the vance is earned when paid or is a "true November 1992, requires most occupa­ member's parent, child, sibling, or spouse, retainer" as that term is defined in Rule tional licensing agencies to suspend the except where the client is related to the 3-700(0)(2). [12:4 CRLR 235] At this license of a licensee ( or deny the applica­ member. writing, these rule changes have not yet tion of a licensure appiicant) who has The Bar received public comments on been approved by the California Supreme failed to pay court-ordered family or child the proposal until April 26; at this writing, Court. support. Rule 962 authorizes the Bar to Bar staff are reviewing the comments, and •Attorney Confidentiality. In July submit the names of members who appear adoption of the rule has been placed on the 1992, the Board of Governors approved on a list of individuals who have failed to Board of Governors' June agenda. The new Rule of Professional Conduct 3-100, comply with child support orders prepared new rule must be approved by the Califor­ regarding State Bar members' duty of con­ by the Department of Social Services nia Supreme Court before it becomes ef­ fidentiality to clients. The rule specifies an (DSS) to the California Supreme Court for fective. attorney's duty "to maintain inviolate the possible suspension from practice or non­ MCLE Written Materials Require­ confidence, and, at every peril to himself certification of applicants for admission, ment. At its April meeting, the Committee or herself, to preserve the secrets of a and to adopt further rules and regulations on Admissions and Competence voted to client." The rule provides permissive ex­ as necessary to implement AB 1394. release for public comment a proposed ceptions to a member's duty of confiden­ • Copies ofDocuments for Clients. At amendment to section 7 .1.4 of the rules of tiality (1) where the client consents to its June meeting, the Board of Governors the Bar's Minimum Continuing Legal Ed­ disclosure, and (2) to the extent the mem­ is scheduled to vote whether to adopt pro­ ucation (MCLE) program. The rule cur­ ber reasonably believes necessary to pre­ posed new Rule of Professional Conduct rently requires that substantive written vent the commission of a criminal act that 3-520, which would require attorneys to materials be distributed to all participants the member believes is imminently likely provide to a client, upon request, one copy in an approved MCLE course that is more to result in death or substantial injury. of any significant document or correspon­ than one hour in length. The proposed [12:4 CRLR 235] Although the Bar has dence received or prepared by the attorney amendment would distinguish self-study submitted this rule to the California Su­ relating to the employment or representa­ from participatory activities and require preme Court, the court has not issued its tion. [13:1 CRLR 142) participants in a self-study activity to have decision at this writing. the use of substantive written materials • Use of the Term "Certified Special­ ■ LEGISLATION while viewing or listening to videotapes ist." On March 11, the public comment SB 645 (Presley), as amended May 12, or audiotapes and reasonable access to the period closed on the Bar's proposal to would make changes to a number of as­ written materials thereafter, but does not adopt a new version of Rule of Profes­ pects of the Bar's discipline system. require participants to retain a personal sional Conduct 1-400(0)(6), which would Among other things, it would increase the copy of the materials. At this writing, the prohibit a California attorney from adver­ membership of the Hearing Department of public comment period is scheduled to tising as a "certified specialist" unless the the State Bar Court from six to seven close on July 16. attorney is certified by the Bar's Board of judges. The bill would also revise the • Practical Training of Law Students. Legal Specialization or by another entity membership of the Bar's Complainants' At its October 1992 meeting, the Board of approved by the Bar to designate special­ Grievance Panel, which monitors com­ Governors approved proposed regulations ists. [13:1 CRLR 142] Bar staff is cur­ plaints and disciplinary proceedings governing the practical training of law rently reviewing the comments received; against attorneys, to require four public students. The purpose of these rules, under at this writing, this proposal has not been members and three attorney members.

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This bill would revise the duties of the mitted to this arbitration if the plaintiff SB 536 (Petris), as introduced March Panel, impose additional responsibilities files an election therefor and agrees that I, would require courts to determine the on the Panel with respect to the audit and the arbitration award shall not exceed total amount payable to all class members review of complaints, and provide for $50,000. As amended April 12, this bill in a class action, set a reporting date for funding for the panel, as specified. would increase the above $50,000 maxi­ notifying the court of actual amounts re­ SB 645 would authorize the State Bar mums to $100,000. [A. W&MJ ceived by class members, and require the to establish an alternative dispute resolu­ SB 401 (Lockyer), as amended May 19, court to amend the judgment to direct the tion discipline mediation program to re­ would require all courts in Los Angeles defendant to pay any unpaid residue, plus solve consumer complaints against attor­ County, and authorize other courts, to imple­ interest, in any manner the court deter­ neys that do not warrant the institution of ment a prescribed program of mediation of mines is consistent with the objectives and formal investigation or prosecution. specified civil matters, where the amount in purposes of the underlying cause of ac­ Existing law, with certain exceptions, controversy does not exceed $50,000. In tion, including payment to the State Bar makes privileged any confidential com­ courts providing judicial arbitration, the bill for the use of the California Legal Corps munication between a lawyer and a client. would authorize an alternative referral for created by the bill. The bill would specify This bill would create an exception to the mediation under the bill. The bill would the purposes of the California Legal Corps lawyer-client privilege if the lawyer rea­ require the Judicial Council to adopt pre­ (see MAJOR PROJECTS). [S. Floor] sonably believes that disclosure of any scribed rules for mediation and to submit a SB 312 (Petris). Existing law provides confidential communication relating to report to the legislature on alternative dis­ for the formation of professional law cor­ representation of a client is necessary to pute resolution programs by January I, porations and their regulation by the State prevent the client from committing a crim­ 1996. The above provisions of the bill would Bar. As amended May 3, this bill would inal act that the lawyer believes is likely be repealed without further action of the allow a professional Jaw corporation to be to result in imminent death or substantial legislature on January I, 1997. incorporated as a nonprofit public benefit bodily harm (see MAJOR PROJECTS). The bill would also revise existing law corporation if (I) the corporation com­ [S. Floor] specifying what aspects of mediation are plies with the provisions of the Nonprofit AB 1544 (W. Brown), as amended excluded from evidence and would also Public Benefit Corporation Law, and ad­ April 27, would require that consumer exclude these matters from discovery. ditional specified requirements, or (2) the complaints about the conduct of an attor­ Under existing provisions of the Trial corporation is a qualified legal services ney must be made in writing and signed Court Delay Reduction Act, delay reduc­ project or a qualified support center, as by the complainant on a form of the State tion rules are required to preclude referral specified. The bill would, until January I, Bar. The form shall state that any person to arbitration before the elapse of2 l Odays 1996, exempt those corporations from a who makes a complaint, knowing it to be following the filing of the complaint, ex­ requirement of obtaining errors and omis­ false and malicious, is guilty of a misde­ cluding a specified stipulated continuance sions liability insurance if the board of meanor. The bill would also provide that not exceeding 30 days. This bill would directors has made all reasonable efforts disputes over the enforcement of liens by authorize making a referral to arbitration to obtain available insurance. The bill health care providers shall not be grounds or mediation at any status conference, and would also exempt qualified legal service for disciplinary action; the State Bar has would include referrals to mediation other projects and support centers from certain no jurisdiction to prosecute an attorney for than referrals pursuant to the provisions filing requirements. [S. Floor a disciplinary matter unless the complaint added by this bill within the above 21 O­ SB 1053 (Watson). Existing law au­ is received within one year of the day rule, as specified. [S. Jud] thorizes the legislative body of any public complainant's actual knowledge or dis­ AB 2302 (Morrow), as amended May or municipal corporation or district to con­ covery of the alleged violation, with spec­ 4, would require mandatory mediation, as tract with and employ any persons for the ified exceptions; the State Bar has two specified, in certain civil actions upon the furnishing of special services and advice years after receipt of a complaint or after filing of a request for mediation by a party in various matters, including legal mat­ discovery by the Bar of an alleged viola­ against whom a complaint or cross-com­ ters. As introduced March 5, this bill tion to file a notice to show cause; before plaint has been filed, within thirty days of would require, in specified circumstances, disciplinary charges are filed, a settlement the latter filing. [A. JudJ the disclosure of the names of private law conference before a judge of the State Bar SB 373 (Lockyer). Existing law estab­ firms so employed by local public agen­ Court shall be held upon request of either lishes annual membership fees for mem­ cies and the amounts of money paid to party; and an attorney complained against bers of the State Bar of California for the those firms in each fiscal year by publica­ shall receive any exculpatory evidence year 1993, but does not establish member­ tion in newspapers of general circulation. obtained by the Bar, as specified. [A. ship fees for later years. As introduced [S. Floor] Floor} February 19, this bill would establish an­ AB 1272 (Connolly). Existing law re­ AB 2300 (Morrow). Under existing nual membership fees for the years 1994 quires the Board of Governors to establish law, superior courts with ten or more and 1995 in the same amounts as those for a system for the arbitration of disputes judges must submit civil matters where the the year 1993 and would extend the re­ concerning fees and costs charged by at­ amount in controversy, in the opinion of pealer in the provision to January I, 1996. torneys, which is administered by the the court, will not exceed $50,000, to ar­ Existing law, until January I, 1994, State Bar. Existing law, except as to an bitration. Other superior courts may pro­ requires the Board of Governors of the action filed in small claims court, requires vide for submittal of these cases to arbitra­ State Bar to increase the annual member­ an attorney to forward a written notice, as tion by local court rule where the amount ship fees by an additional fee of $110 to specified, to a client at the time of service in controversy, in the opinion of the court, be used exclusively for discipline aug­ of summons in an action against the client will not exceed $50,000. Under existing mentation. This bill would continue that for recovery of fees or costs. As amended law, in superior courts with fewer than ten requirement for the years 1994 and I 995 May 17, this bill would eliminate the ex­ judges and which have not adopted such a and would also extend the repealer in the ception for actions filed in small claims local rule, matters are required to be sub- provision to January I, 1996. [A. Jud} court. This bill would provide for a proce-

:::alifornia Regulatory Law Reporter• Vol. 13, Nos. 2&3 (Spring/Summer 1993) 221 REGULATORY AGENCY ACTION

dure to enforce an unpaid arbitration specifically provided, this relationship is an attorney or party on any pleading, mo­ award that has become final by requiring governed by the law of trusts. tion, and any other paper filed or served in the State Bar to place the attorney on in­ Under existing law, there is no express a civil action, constitutes a certificate that voluntary inactive status until the award is prohibition against an attorney who serves he/she has read the paper, has made a paid, and would impose on that attorney as a guardian, conservator, or trustee from reasonable inquiry into the allegations, administrative penalties and costs, or acting as an attorney for the estate or trust and presents it in good faith and not for an both. or which prohibits collecting additional improper purpose. The bill would require Existing law provides for binding arbi­ legal fees therefor. Under existing law, an any pleading, motion, or other paper that tration upon agreement of the parties in the attorney who is the personal representa­ is not signed to be stricken unless it is case of a dispute over attorneys' fees. In tive of a decedent's estate may not act as promptly signed after the omission is the absence of an agreement, either party attorney for the estate without approval of called to the attention of the pleader or is entitled to a trial after arbitration in a the court. This bill would permit an attor­ moving party. The bill would require an court of appropriate jurisdiction. This bill ney, certain of his/her relations, or his/her appropriate sanction to be imposed by the would permit a municipal or justice court law firm to provide compensated legal court if a paper is signed in violation of to conduct a trial pursuant to an action for services to an estate or trust for which the these requirements. [A. Jud] declaratory relief, after a nonbinding arbi­ attorney serves as guardian, conservator, AB 208 (Horcher), as introduced Jan­ tration where the amount in controversy is personal representative, or trustee only if uary 25, would enact a comprehensive $25,000 or less, or to confirm, correct, or authorized in advance by the court or, in regulatory scheme to, among other things, vacate a fee arbitration award where the the case of a trustee, by giving notice to provide that no advertisement made by an arbitration award is $25,000 or less. This specified persons who may object to the attorney or law firm shall contain any bill would permit a small claims court to dual compensation. These provisions false, misleading, or deceptive statement confirm, correct, or vacate a fee arbitration would not apply, however, where the or omission (see MAJOR PROJECTS). award not exceeding $5,000 or to conduct guardian, conservator, or trustee is related This bill would also provide that, with a hearing de novo after nonbinding arbi­ by blood or marriage to, or is a cohabitant respect to that prohibition, no complaint tration of a fee dispute involving no more with, the ward, conservatee, or settlor. or cause of action shall be maintained than $5,000. [A. Floor] Under existing law, nothing precludes against an advertising medium or adver­ AB 600 (Speier), as amended May 6, a person who is instrumental in the draft­ tising agency with respect to the content would provide that in any action against a ing of an instrument making a donative of an advertisement or communication. person for conduct for which the person is transfer for another from receiving a gift [A. Jud} convicted of the crime of intentionally thereunder. With certain exceptions, this AB 335 (Ferguson). Existing law au­ blocking the entrance or exit of a health bill would invalidate a transfer to the per­ thorizes the State Bar to establish and ad­ care facility, place of worship, or school, son who drafted or transcribed such an minister a mandatory continuing legal ed­ the court may in its discretion and in addi­ instrument, or who caused the instrument ucation program. Existing law also ex­ tion to other costs, award reasonable to be drafted or transcribed, and persons empts from this program retired judges, attorneys' fees to a prevailing plaintiff. [A. having certain business and other relation­ officers and elected officials of the State Floor] ships thereto (see MAJOR PROJECTS). of California, full-time Jaw professors, AB 602 (Speier). Under existing Jaw, The bill would define these persons as and full-time employees of the State of a party to a civil action may not be "disqualified persons." The bill would California. As introduced February 9, this awarded his/her attorneys' fees unless au­ provide exceptions for transfers to persons bill would delete the exemptions for offi­ thorized by statute or by a contract of the related by blood or marriage to, or who cers and elected officials of the State of parties. As amended May 3, this bill would cohabit with, the transferor or where the California and full-time employees of the authorize recovery of attorneys' fees by a instrument is reviewed by an attorney not State of California. [A. FloorJ prevailing plaintiff in an action to recover related to, or associated with, the proposed AB 498 (Goldsmith). Existing law prescribed hospital, medical, or disability transferee, or where the transfer is ap­ provides that a party to a cause of action benefits for a catastrophic or life-threaten­ proved by a court. The bill would specify may move for summary judgment if it is ing illness or condition. The bill would forms for attorney certification, for pur­ contended that the action has no merit or make unenforceable any contractual poses of the above, which would certify that there is no defense to the action or waiver of the right to attorneys' fees under that the transfer was not the product of proceeding. The motion must be sup­ the bill. [A. Floor} fraud, menace, duress, or undue influence. ported by affidavits, declarations, and AB 1287 (Moore), as amended May 4, [S. Jud] other documents, including a separate would, until January I, 1997, enact a com­ AB 108 (Richter). Existing law autho­ statement setting forth plainly and con­ prehensive scheme for the regulation and rizes trial courts to order a party, the cisely all material facts which the moving registration of "self-help legal services party's attorney, or both, to pay any rea­ party contends are undisputed. Existing providers" (also known as "legal techni­ sonable expenses, including attorneys' law imposes similar requirements on the cians" or "independent paralegals") under fees, incurred by another party as a result party opposing the motion. Existing law the jurisdiction of the Department of Con­ of bad faith actions or tactics that are friv­ provides that once the plaintiff or cross­ sumer Affairs. The bill would establish a olous or solely intended to cause unneces­ complainant has met his/her burden of registration and renewal fee and create a sary delay. As amended May 6, this bill showing that there is no defense to a cause Self-Help Legal Services Provider Regis­ would revise this provision to require trial of action, or once the defendant or cross­ tration Fund. [A. Jud] courts to impose upon a party, the party's defendant has met his/her burden of show­ AB 21 (Umberg). Under existing Jaw, attorney, or both, an appropriate sanction, ing that a cause of action has no merit, the the relationship of guardian and ward and which shall include an order to pay reason­ burden shifts to the opposing party to conservator and conservatee is a fiduciary able expenses, for actions or tactics that show that a triable issue of one or more relationship. As amended May 6, this bill are frivolous. The bill would also provide, material facts exist as to that cause of would specify that, except as otherwise except as specified, that the signature of action. As amended May 4, this bill would,

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instead, provide that the burden shifts to arising from any act of that person in fur­ with the above requirements be filed with the opposing party to show that a triable therance of the person's right of petition a civil action arising out of such a dispute. issue of one or more material facts exist as or free speech under the United States or Failure to file the certificate where re­ to that cause of action or a defense thereto. California Constitution in connection with quired would render the plaintiff's com­ The bill would prohibit the opposing party a public issue, as specified, shall be sub­ plaint subject to a motion to strike or de­ from relying on the mere allegations or ject to a special motion to strike, unless the murrer. denials of the pleadings to show that a court, after considering the pleadings and This bill would also allow the court to triable issue of material fact exists, and supporting and opposing affidavits, deter­ stay a pending action in order to refer it to would require the opposing party to set mines that there is a probability that the alternative dispute resolution. In any ac­ forth the specific facts showing that a tri­ plaintiff will prevail on the claim. This tion for declaratory relief or injunctive able issue of material fact exists as to that provision also states that if the court deter­ relief related to enforcement of the gov­ cause of action or a defense thereto. [S. mines that the plaintiff has established a erning documents of a common· interest Jud] probability that he/she would prevail, nei­ development, the bill would entitle the AB 500 (Goldsmith). Existing Jaw ther that determination nor the fact of that prevailing party to an award of attorneys' provides with respect to the settlement of determination would be admissible in ev­ fees and costs, but would require the court civil actions that, if an offer made by a idence at any later stage of the case nor to consider the prevailing party's refusal defendant is not accepted and the plaintiff would it affect the burden or degree of to engage in alternative dispute resolution fails to obtain a more favorable judgment, proof. It requires the recovery of in making such an award of attorneys' fees the plaintiff shall not recover his/her costs attorneys' fees and costs by a prevailing and costs. The bill would require common and shall pay the defendant's costs from defendant on a special motion to strike, interest development associations to pro­ the time of the offer. A similar provision, and authorizes recovery of attorneys' fees vide their members annually with copies at the discretion of the court, applies to and costs by a prevailing plaintiff if the of the provisions of the bill, and would offers by a plaintiff which are not accepted court finds that the motion was frivolous require any Request for Resolution sent to by the defendant. As amended May I 7, or solely intended to cause unnecessary an owner by the association to also include this bill would add reasonable attorneys' delay. These provisions do not apply to a copy of the provision of the bill. [S. Jud} fees from the time of offer to the costs any action brought in the name of the AB 58 (Peace), as amended April 12, recoverable under this provision, but these people of the State of California by certain would add a motion for dismissal, as spec­ new provisions would not apply to per­ state and local prosecutors, and require all ified, to the motions which may be made sonal injury actions in superior court. The discovery proceedings to be stayed upon by a defendant prior to pleading; provide bill would also authorize, in lieu of accept­ the filing of a notice of this special motion, for a motion for judgment on the plead­ ing a settlement offer, an offeree to request except as specified. ings; revise the requirement for a state­ binding arbitration which would preclude As introduced December 7, this bill ment of the nature and amount of dam­ the offeror from recovering attorneys' fees would make recovery of attorneys' fees ages; revise certain procedures for the dis­ under the above·provisions. [A. Jud] and costs by a prevailing plaintiff under missal of civil actions and the granting of AB 1757 (Caldera). Under existing this provision mandatory rather than per­ default judgments; specify that additional law, with certain exceptions, evidence of missive if the motion to strike was frivo­ orders are open on appeal; specify the anything said or of any admission made in lous or solely intended to cause unneces­ effect of denial of summary adjudication the course of mediation is not admissible sary delay. The bill would also repeal the or failure to seek summary adjudication; in evidence; disclosure of any such evi­ entire provision on January I, 1998, un­ specifically limit the amount of a default dence may not be compelled in any civil less a later statute enacted before that date judgment to the amount demanded in the action, and no document prepared for the extends or repeals that date. [S. Floor} complaint or the amount specified in a purpose of, in the course of, or pursuant AB 55 (Hauser), as amended May 6, statement of damages filed in a personal to, the mediation is admissible in evi­ would generally require that, before a injury or wrongful death action in superior dence; and disclosure of such a document common interest development association court; and revise the circumstances in may not be compelled in any civil action, or the owner of a separate interest therein which an undertaking is required in order unless the document otherwise specifies, brings an action for declaratory relief or for the enforcement of a judgment or order provided that a specified confidentiality injunctive relief relating to the enforce­ to be stayed on appeal, the process by agreement is executed prior to the media­ ment of the governing documents of the which the attendance of witnesses repre­ tion. Existing Jaw provides that no arbitra­ common interest development, the associ­ senting a party who is not a natural person tor shall be competent to testify in any ation or owner shall endeavor to submit is compelled by subpoena, and instances subsequent civil proceeding as to any the matter to alternative dispute resolution in which attorneys' fees are allowed as statement, conduct, decision, or ruling re­ as provided in the bill. Under the bill, any costs. [A. Floor] lated to the arbitration, except as to a state­ party to such a dispute may request an­ ment or conduct that could give rise to other party to submit to alternative dispute ■ LITIGATION civil or criminal contempt, constitute a resolution by serving a prescribed Request So-called "fee objectors"-lawyers crime, be the subject of specified investi­ for Resolution. The bill would make any­ challenging the sufficiency of the Bar's gations regarding attorneys and judges, or thing said in the course of alternative dis­ "Hudson deduction" licensing fee reduc­ give rise to certain disqualification pro­ pute resolution under the bill inadmissible tion-were dealt a one-two punch during ceedings regarding judges. As amended in any civil action unless consented to by the first half of 1993. First, on January 25, April 20, this bill would include mediators both parties, and would preclude compel­ the Sacramento Superior Court sustained in the latter provision, except with regard ling testimony or disclosure of any state­ the Bar's demurrer in Brosterhous, et al. to the mediation of visitation and custody ment or admission made in the course of v. State Bar of California, No. 527974, issues, as specified. [S. Jud] the alternative dispute resolution. With the Pacific Legal Foundation's (PLF) SB 9 (Lockyer). Existing Jaw provides certain exceptions, the bill would require challenge to the Bar's calculation of its that a cause of action against a person that a certificate certifying compliance 1991 "non-chargeable" expenses pursuant

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to the U.S. Supreme Court's ruling in Kel­ ally thought to fall within the "litigation ler v. State Bar and its use of an arbitration privilege" and/or subject to the State Bar's procedure to resolve disputes over the cal­ discipline system. [12:2&3 CRLR 270- culation. [ 12:4 CRLR 237; 12:2&3 CRLR 71] 28-29, 270; 11:4 CRLR 38,213] The su­ In a 4-3 vote, the majority ruled that perior court found that the legislature has the "solicitation" acts at issue were com­ delegated to the Bar the authority to gov­ municative and, as such, fell within the ern its operations, that the Bar has adopted "litigation privilege" of Civil Code sec­ rules and regulations to comply with the tion 47(b); that alleged solicitation is not Keller decision (including adoption of the an "unfair business practice" under Busi­ "Hudson deduction" procedures and an ness and Professions Code section 17200; arbitration process to resolve disputes), and that any alleged solicitation should be and that the rules adopted meet the re­ handled by the State Bar discipline system quirements of Keller. The court held that or through criminal prosecution-not by the arbitration procedure adopted by the another round of litigation by private par­ Bar meets due process requirements, the ties seeking to intimidate opponents away consent of Bar members to the Bar's arbi­ from access to the judicial system. The tration process is not required, and that the majority stated that the attempted lawsuit "fee objectors" are not entitled to "judicial "not only undermines the established pol­ review of the specific costs of the Bar and icy of allowing access to the courts, but whether they are proper under Keller." that, given the availability of other reme­ PLF has appealed to the Third District dies for the redress of attorney solicitation, Court of Appeal, arguing that the Bar's this retaliatory suit is not maintainable." determination of "chargeable" costs In Reves v. Ernst& Young, No. 97-886 should be directly appealable to the courts (Mar. 3, 1993), the U.S. Supreme court and citing a string of cases in support of held that accountants, lawyers, and other the proposition that "compulsory arbitra­ professionals must actually participate in tion statutes that effectively close the the operation or management of an illegal courts to the litigants by compelling them enterprise in order to be liable under the to resort to arbitrators for a final and bind­ federal Racketeer Influenced and Corrupt ing determination are void as against pub­ Organizations Act (RICO). The Court up­ lic policy and are unconstitutional." held the Eighth Circuit Court of Appeals' The other shoe dropped on May 3, decision affirming the trial court's deci­ when arbitrator Reginald Alleyne rejected sion to grant summary judgment and dis­ the request of 162 lawyers for additional miss a case brought against the accounting reductions in their I 992 Bar dues. During firm Ernst & Young for its role in a stock that year, the Bar offered to refund $4 in offering that was later the subject of a fees; the "fee objectors"-again repre­ RICO suit by investors. sented by PLF-sought a further reduc­ tion of $104.68. In his ruling, Alleyne ■ FUTURE MEETINGS upheld the Bar's standard in calculating August 26-28 in San Francisco. "chargeable" and "non-chargeable" ex­ October 7-10 in San Diego (annual penses for its members, and even found meeting). that certain programs which were chal­ December 2-4 in San Francisco (ten­ lenged last year (primarily the work of the tative). Bar's Ethnic Minority Relations Commit­ tee and its Committee on Women in the Law) are vital to the Bar's mission and should be charged to members once again beginning in calendar year 1994. Following oral argument on January 6, the California Supreme Court issued its opinion in Rubin v. Green on April 5. In the case, the court reviewed a Fourth Dis­ trict Court of Appeal decision holding that violations of Business and Professions Code section 6 I 52 and 6 I 53 (running and capping prohibitions) are "unfair acts" within the meaning of California's "Little FTC Act," Business and Professions Code section 17200, and therefore give rise to its remedies of injunction and restitution. The Fourth District's decision arguably permits a party to sue an opposing party's counsel for a myriad of actions tradition-

224 California Regulatory Law Reporter• Vol. 13, Nos. 2&3 (Spring/Summer 1993