it please the court yes please this case involves whether an arbitration award arising out of an agreement between two private parties is just chargeable in bankruptcy the lower courts misinterpreted section five twenty three eighty seven by relying on defendant's misrepresentation that my transfer to involuntary inactive status by the state bar was disciplinary the lower court's also improperly expanded the scope of section five twenty three  see what's just chargeable are not just chargeable in bankruptcy is the debt not not the suspension right gesture on ok so and then does the second level is that if there was a just charge of old dad and it was and the provisions of five twenty seven point three or otherwise met then there could be a problem with the suspension but first we have to decide because it did not fall within the confines of five twenty three eighty seven ok my debt was discharged because it did not satisfy the exception to discharge for twenty three a seven for penal obligations payable to and for the benefit of the government here the payment was to be made to a private party and none of the cases that the state bar cites even cost control marketing their main case where the payments made directly to a private party here the state bar says i owed the government nothing the payment isn't posed to be made directly to mr clark it was also the requirement to pay the government's costs in the end after at the forstmann level right in other words when when when it went to the  government made this trip well i have to tell you the arbitrator never applied for costs the presiding arbitrator when he came in to enforce the suspension i was suspended because i could not pay an arbitration award in one lump sum five thousand dollars in one lump sum that's why i was suspended not based on the arbitration a wart now the presiding arbiter canada bacon did not seek cost so the judge mile suspended me as a collection agency is not payable to and for the benefit of the government even in cost control marketing the money there was payable to hud with no requirement the court specifically said that no requirement that the money be paid to anyone and a judge easterbrook picked that up in the seventh circuit when he discussed cost control marketing in in on re tower now the correct decision in this to and this circuit right parsons decided by the bankruptcy court he correctly analyzed section five twenty three eighty seven because in a civil contract it's not a criminal proceeding it's not piano and in a civil thing i have to show the state bar court is that the debt has been satisfied the debt no longer exists because it's discharged it's a perfunctory ministerial act they're making an argument and i was i guess except at least but it just record that you had to make some affirmative motion and you haven't done it well your honor i had to get a judicial determination from this or from the bankruptcy court that the debt was discharged i can assure you if i had gone into the state bar court without yet they would have said you're saying when you first need an agreement that again that stage one that it was a in order that it was in fact discharged yes i needed you just will determination and that's what my complaint was no challenge to the discharge and and the order of the bankruptcy court actually did discharge is is that correct or is that your your position well the government's taking the position the state by state in the position it was not discharged under section five twenty three  had position is not just chargeable but that seems a little different from whether it was actually just charge well there's various provisions of the bankruptcy code and certainly instances the creditor has to take affirmative action and then other cases it's just automatically deemed not dischargeable and government obligations like tax obligations that sort of thing they're deemed not to start at all but here you have a money judgment and even at the state even for the sake of argument if the state was put acting under its police power it would not exist be exempt from going into getting relief from the automatic stay to continue to continue the suspension of my drivers license five eight was based on creds versus campbell the council on i guess where i'm troubled in this case is that the supreme court and kelly in a number of other courts in similar situations i agree identical but in similar situations dealing with attorney discipline or attorney issues have said federal court had to be very careful not to intrude on the state's ability to discipline or deal with lawyers they think are following the rules of that state there's a case called richmond there's finlay from this court how would you have us distinguish your case from those cases because my suspension here wasn't discipline yet and the four authors of the california practice guide and professional conduct agree with me and i think i went on at length in my brief but but i understand that that it technically may not be disciplinary but the state bar and the state of california have said because of something that you did you should not be practicing law in the state of california correct that's why we're here my license in this particular proceeding was suspended as a result of disciplinary issues you took money out of time that you should not have this wasn't part of the disciplinary proceeding a motion to transfer me to involuntary sounds this is a rose out of an arbitration over arbitration but but let's just stick with the questions we're asking here ok so just to be clear the whole way this thing started was is the accepted fees from a client to help with but what the mortgage relief before the mortgage relief had occurred correct along medicaid law correct ok so that that ok and then a few dispute arose between you and your former client the i would say took a man and said look you've got to pay this money back as you weren't allowed to take in the first place correct but that's what he ruled because that's how the state bar had integrated that staff so then you did not pay the the five thousand dollars fifty five hundred dollars back to the client correct i tried to make a payment plan yes ok but the but the five fifty five hundred dollars was not paid back correct right that's where we are well your honor sixty two zero three d b two sats that my license can only be suspended if if i fail to propose a payment plan or if i'm able to pay at ok so going back to my original question there are a number of cases that say federal courts and to be very careful not to meddle in the ability of state bars to oversee i want to use the word disappoint to oversee the practice of lawyers in their state what tell us how we get around those cases in a way that is consistent with the supreme court's dictates and kelly well number one this is a bankruptcy case and the only way this debt is not dischargeable if it's payable to or for the benefit of the government and it's not payable to or for the benefit of the government it's payable directly to have it at what penalty in a circumstance under the statute correct your honor i mean i don't disagree here the presiding arbitrator when he filed the motion to transfer me to involuntary inactive in ro and we we had that determination before judge miles and i came in with all my evidence i could not pay this immediately in one lump sum which is what the state bar in the client demanded i didn't have it my law license is certainly worth five thousand dollars to me if i didn't have it i tried to make a payment plan and judge miles and the evidence was uncontroverted that that i was indigent i was on food stamps i was on government sponsored health care in fact when i did a petition the california supreme court they allowed me to waive the filing fee so if i couldn't pay seven hundred seventy five dollars i don't know how i could pay  the state bar is continuing the suspension of my license when that debt has been discharged and my license should be restored under five twenty five eight my just on my suspension w good morning again may please the court michael vaughan no one thought for the a police with the court's indulgence i'd actually like to work our way backwards to the discharge ability question because five twenty five a does not have some free standing obligation that a understand she says that but that's not what the rules say so i think that's not what the rule say that the rule so i would first go back again to conway which discusses this involuntary inactive status where the court notes that the lawyer always has the ability to come in and ask for the suspension to be lifted she couldn't open it i mean you know you're even taking the position that even if it was just charge you still could undo it no no i want to be very clear on that your honor i'm taking  that the state bar court does not have statutory torrie authority to do that the supreme court which is where the petition would go absolutely has authority to do that if miss year was to petition the california supreme court further lifting of her involuntary not further ok what's the state of racially just charge by the fact that there was no objection to the discharge our position is no your honor because it's and because it's the kind of debt it's the kind of regulatory debt is that kelly is tied to the principles of federalism in younger kelly tells us we do not read the statutory words with the ease of a computer and i mean first of all it's a form of statutory interpretation which isn't particularly in vogue these days which you say i think this is a unique area where the supreme court has indicated that because of the federalism concerns expressed by younger because of particular federal concerns i e because there was a history with regard to criminal proceedings in particular and if we're going to add it does trouble me to start expanding that out to when it seems pretty clear that the incrementalism we're getting further and further and further from the statutory language let me choose that out because i think there are a couple pieces in there if i may the first is that kelly notes that the interest is the interest expressed in younger and that we're not expanding that at all state bar proceedings fall into the exact same younger interest as criminal proceedings that's what the supreme court tells us in middlesex and if you read that just after counting i'm sorry that sure about that was middlesex after kelly i'm not sure i don't know middlesex is ninety stayed attorney disciplinary and attorney regulatory matters and i don't think it's productive to get into an argument about whether the word discipline technically applies here her license is suspended that is clearly an exercise of power over her ability promise of this case at this point what she got her got her license back if we pretend she had not been suspended subsequently are right and she paid the debt and then she went and filed the proper petition in the paperwork with the quote with the state bar court yes you get her license you arguing that the other suspension well i think it moots questions about the validity of her suspension remember this case is about whether the bar violated five twenty five a day that's fundamentally what she's saying she's saying that the bar has failed to reinstate her license and not only has she not asked for that because she doesn't think she can do that which is her understanding but that doesn't mean that the bar is violated anything but if she were to ask for it at this point that relief cannot be granted because she's been suspended for numerous acts of similar loan modification misconduct and frankly i'm practicing law outside of her jurisdiction and that order which is final and has been approved by the california supreme court that suspension or disbarment it's a suspension your honor she's on suspension and i think probation until she meets certain conditions i think she was not actually disbarred which is it but do we have that actual order i know i know we know about it but do we have the piece of paper you do your honor we submitted a request would you still notice and that is before the court so that frankly moot the question as to whether her that quote unquote continuing has resolved all of the issues but at least this is not an issue that you'll have to resolve that's right that is true your honor in a sense however because she did not ask to be reinstated with respect to this day that there's you still nobility find that the bar violated by twenty five day i understand that but that's why i've been trying to separate the two pieces that because isn't there still an issue in this case as to whether this debt is a debt she has to pay to mr clark ever well i think there is not because the supreme court in its disciplinary order which you have as their requests for judicial notice ordered her to pay the same amount of money to mr clarke as a disciplinary sanction so she owes that five thousand dollars to mr clark even if the arbitration award is vacated or this charge or what have you she still owes it because the supreme court has said that as a disciplinary matter because of her misconduct in practicing law outside of california and in collecting they changed the label but the but the underlying issue is still the same is the five thousand dollars debt well and so that they're in effect if what you're saying is true circumventing the authority of the bankruptcy court because they have since even if we find that there's dischargeable she still is on the hook for so what i'm saying your honor is that first off that question's not been presented to the court and wasn't presented because me sure as never asked the california supreme court or the state bar court for that matter we don't need for  paid and wasn't just charged and she was suspended for that reason and until she has a court order to the contrary what she can get out of the california supreme court with your her argument as i understand it is that the bankruptcy order is that order she's arguing not that this court should discharge the debt but that the debt is already discharged i feel like i'm getting a little down the rabbit hole though because we do we contend very strongly that this is nondestructive all debt because this is exactly the type of concern protected by younger this federal interference through the courts or the bankruptcy is always make the younger argument with respect to any state regulatory scheme when the statute itself is clear that this pill to a for the benefit of a governmental  unit and we don't have that here but with respect your honor the younger argument is actually very narrow the court has recognized youngers a plug ability in the extraordinarily narrow set of circumstances and so i can't make that argument if you look at all the cases powers all the other cases miss your cites those are all civil cases where there'd be no possibility of younger applying because younger doesn't stop that a pending fed is civil case would not be stopped by that state bar proceedings like a butterfly with a dental disciplinary proceeding that had some money that would still count for younger purposes i don't know that that's true your honor especially not with the history of the federal f c in this case and it would not i would submit that the interest as expressed in middlesex the younger interest the federalism i if but as you you know where did you get that argument take young guy out of a formal well your are having difficulty taking younger out of it because kelly tells us that younger is the reason we don't read the statute literally if you of young no your honor you can read it literally except where the younger concerns are triggered and you ask the question what would prevent any state regulatory proceeding from being squeezed in the younger other regulatory proceedings don't have hundreds of years of history behind them of the federal government not interfering whereas criminal state criminal proceedings and what as far as i can tell the citation to younger is that there's a fundamental policy against federal interference with prosecutions very strong signing younger is just using younger to bolster the notion of how strong the interest in state criminal prosecutions is not to say that anything that satisfies younger therefore falls outside of the i think what kelley is saying is that the historic reluctance to interfere with state criminal proceedings reflected in younger tells us that we should not this applies as much in bankruptcy as in any other context and what i'm saying to your honor which is a question that was not presented in kelly is that in middlesex the supreme court recognized that the historic that for the entire existence of this country the historic deference that has been given to attorney disciplinary an attorney regulatory matters to be free from federal interference that is the interest that is as high as the interest in criminal proceedings that is in cali and that is why the younger doctrine is consistently applied to crew to state bar proceedings just as it is to criminal proceedings so if you're asking me did kelly de equitable talk or it doesn't have to struggle with more to anything it's more to just the interest not to to any stature of your own or younger reflects a concern with federalism and what the supreme court said in cali is that this reflection of our federalism they're referring to younger criminal discharged under the bankruptcy code i'm seeking that you just determination ok and then i'm also seeking a judicial determination that section five twenty five a a plus no this court cannot reinstate my license but i have to get a judicial determination because i know very well if i go into the state all right why why should we even recent five twenty five issue if we just cited to discharge issue and particularly in light of the fact that you have the other suspension question anyway  why isn't that play out afterwards you then go to the court and ask to be reinstated and then we see what happens but why are we why are we even deciding on the reinstatement question they may just do it theoretically why well position is that if it's your position as i understand it is that if the deadest is charge five twenty five they require some to reinstate you but you haven't asked them to do that because you don't have to discharge i understand that car so once you have the discharge i and they're not really saying as i understand it that except for the later later suspension that if there were a just charge they want reinstate him so why are we getting to the  they're in violation of the automatic stay because even if the police power regulatory a power applied under three sixty two b for that is not an acceptance to rel bankruptcy so does the automatic stay say that you have to on ravel something you've already done you know they should they should they should have come in for a relief for me my automatic stay to be able to continue th license because that debt was discharged what they're trying to do is in force in money judgment the regulatory power does not give them the right to do that under three sixty two before what they're doing isn't forcing a money judgment if you look at three sixty two people or it doesn't exempt them from the provisions of the automatic stay they had to come in to continue the automatic stay talks about continuing in foresman of the debt by continuing to