ORDERED PUBLISHED

UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re:

LENORE L. ALBERT-SHERIDAN, 

 Debtor.

BAP No. CC-23-1024-SFL

Bk. No. 8:18-bk-10548-SC

Adv. No. 8:18-ap-01065-SC

OPINION

LENORE L. ALBERT-SHERIDAN, dba 

Law Offices of Lenore Albert

 Appellant, 

v.

STATE BAR OF CALIFORNIA;

MARICRUZ FARFAN; BRANDON 

TADY; ALEX HACKERT; PAUL 

BERNARDINO; HON. YVETTE 

ROLAND, 

 Appellees. 

Appeal from the United States Bankruptcy Court

for the Central District of California 

Scott C. Clarkson, Bankruptcy Judge, Presiding

APPEARANCES 

Appellant Lenore L. Albert-Sheridan argued pro se; Suzanne C. Grandt

argued for appellees. 

Before: SPRAKER, FARIS, and LAFFERTY, Bankruptcy Judges.

Opinion by Judge Spraker

Concurrence by Judge Faris

SPRAKER, Bankruptcy Judge:

FILED

APR 2 2024

SUSAN M. SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
2

INTRODUCTION

Lenore L. Albert-Sheridan (“Albert”) sued the State Bar of California 

(“State Bar”), its employees, and its representatives on various claims 

relating to her suspension from the practice of law. Her claims included

violations of the automatic stay under § 3621 and violations of the 

discharge injunction under § 524. The bankruptcy court dismissed some of 

Albert’s claims and granted partial summary judgment as to others. 

Ultimately, the court held trial on the narrow remainder of her claims and 

entered judgment in Albert’s favor for $21,627.48. Albert appeals this 

judgment together with the dismissal and summary judgment rulings.

This appeal is but one chapter in the drawn-out litigation between 

Albert and the State Bar. The State Bar suspended Albert’s law license and 

ordered that, after a minimum period of suspension, she could reinstate 

her license by paying certain discovery sanctions, restitution, and costs. 

After Albert filed a chapter 13 bankruptcy petition, the State Bar eventually 

(but tardily) reinstated her license. When the bankruptcy court converted 

Albert’s case to chapter 7, the State Bar suspended her again.

In earlier chapters of the litigation saga, Albert established that her 

obligations to pay discovery sanctions, restitution, and the amounts owed 

1 Unless specified otherwise, all chapter and section references are to the 

Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules 

of Bankruptcy Procedure, and all “Civil Rule” references are to the Federal Rules of 

Civil Procedure.
3

to the State Bar’s Client Security Fund (“CSF”) were dischargeable. Prior 

chapters also established that the disciplinary costs assessed against her in 

her disciplinary proceedings were nondischargeable in a chapter 7 case 

under § 523(a)(7).

In the current chapter, Albert reprises these claims and argues that 

the State Bar violated the automatic stay while Albert was in bankruptcy. 

The bankruptcy court rejected these claims. We hold that the court was 

correct in most respects but erred in others. The disciplinary proceedings 

were valid regulatory proceedings excepted from the automatic stay by

§ 362(b)(4). But Albert originally filed her bankruptcy in chapter 13, in 

which all debts owed to the State Bar were dischargeable under § 1328(a). 

The State Bar’s efforts to collect discovery sanctions and disciplinary costs 

violated the stay during this period. Upon conversion of her case to chapter 

7, the disciplinary costs became nondischargeable as a matter of law. Yet, 

§ 362(a)(6) still precluded the State Bar from taking any further actions to 

collect those costs during the pendency of her bankruptcy case. We hold 

that the bankruptcy court erred in dismissing Albert’s claims that the State 

Bar’s alleged collection efforts violated the automatic stay and remand for 

further proceedings on those claims.

Upon the entry of the discharge, the State Bar was enjoined from 

collecting any discovery sanctions, restitution, and the CSF obligation. 

It was not enjoined, however, from collecting the outstanding disciplinary 

costs or reinstating her suspension until she paid such costs. The State Bar 
4

was entitled to suspend her license because she did not pay the 

nondischargeable disciplinary costs. It is true that the State Bar also 

suspended her license because she did not pay discharged debts and that 

this violated the discharge injunction. But Albert failed to plausibly allege 

or credibly prove that she suffered additional compensable injury because 

the State Bar suspended her license post-discharge for both proper and 

improper reasons.

Moreover, the State Bar had an objectively reasonable basis to believe 

that it legally could pursue the discovery sanctions, the client restitution, 

and the CSF debt after Albert received her discharge. At the time, this 

Panel had ruled, based on a Supreme Court decision, that these types of 

debts were nondischargeable. The Ninth Circuit later reversed our 

decision, but it was objectively reasonable for the State Bar to rely on

decisions, including ours, holding that such debts were nondischargeable

in the meantime. This means that the State Bar was not liable for contempt

of the discharge injunction.

We find no error in the court’s disposition on summary judgment or 

at trial. However, mindful of the stringent legal standards governing 

motions to dismiss, we hold that the court erred in dismissing Albert’s

claims for violation of the automatic stay under Civil Rule 12(b)(6)—but 

only as to her allegations that the State Bar failed to reinstate her license 

timely while she was in chapter 13 and reimposed the suspension after the 

conversion to chapter 7. We also hold that the bankruptcy court erred 
5

when it held that it lacked subject matter jurisdiction of Albert’s claims 

under the California constitution. We, therefore, AFFIRM in part,

REVERSE in part, and REMAND for further proceedings consistent with 

this decision.

FACTS2

A. The disciplinary proceedings leading to the 2017 Suspension 

Order.

Albert is an attorney licensed to practice in California. In 2015 and 

2016, the State Bar commenced disciplinary proceedings against Albert by 

filing Notices of Disciplinary Charges (“NDCs”) in the State Bar Court

alleging that she had failed to (1) cooperate with its investigations, (2) pay 

court-ordered discovery sanctions, (3) perform competent legal services, 

(4) account for client funds, and (5) refund unearned attorney’s fees.3

On June 30, 2017, the Review Department of the State Bar Court

found that Albert had received a fair trial, failed to cooperate with the 

investigation of her misconduct, and failed to comply with three discovery 

sanctions orders totaling $5,738 (“2017 Discovery Sanctions”). In December 

2017, the California Supreme Court entered an order (“2017 Suspension 

Order”) in which it adopted most of the State Bar’s recommendations and 

2 We exercise our discretion to take judicial notice of documents electronically 

filed in the underlying bankruptcy case and adversary proceeding. See Atwood v. Chase 

Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).

3 For a description of the State Bar disciplinary process, see Hirsh v. Justices of 

Supreme Court of California, 67 F.3d 708, 711–12 (9th Cir. 1995).
6

suspended Albert from the practice of law for at least 30 days, but 

continuing until she paid the 2017 Discovery Sanctions, as well as $18,714 

in disciplinary costs awarded to the State Bar under California Business 

and Professions Code § 6086.10(b)(3) (“Disciplinary Costs”).

B. Albert’s bankruptcy and the first adversary proceeding against the 

State Bar.

Albert did not immediately pay either the 2017 Discovery Sanctions 

or the Disciplinary Costs. Instead, on February 20, 2018, she filed a chapter 

13 petition.

In March 2018, she moved for sanctions against the State Bar and 

others. She claimed that the State Bar violated the automatic stay when it 

refused to terminate her suspension and reinstate her as a licensed 

California attorney. She claimed that the continuation of her suspension 

was an impermissible attempt to collect dischargeable debts during the 

pendency of her bankruptcy stay.

The State Bar opposed the sanctions motion. It contended that it was 

acting under its police or regulatory power and not merely enforcing a 

monetary obligation. It further maintained that Albert was not entitled to 

injunctive relief and that she had not demonstrated that the alleged stay 

violation had injured her.

In April 2018, before the bankruptcy court held a hearing on the 

sanctions motion, Albert filed her first adversary complaint (“First 

Adversary”) against the State Bar and several of its employees. Among 
7

other things, she alleged that her debts to the State Bar were dischargeable 

and fell outside the scope of § 523(a)(7) and that the State Bar violated her 

rights under § 525(a)’s anti-discrimination provision.

After a hearing on May 3, 2018, the bankruptcy court deferred a final 

ruling on the motion but noted that the State Bar’s “30-day actual 

suspension of Debtor’s license to practice law as determined by the 

California Supreme Court commenced on February 14, 2018 and ran 

through and including March 16, 2018.” The court observed that this 

“portion of the suspension [was] not based on condition of any payment of 

sanctions or disciplinary costs.” The court further noted: “[w]hether the 

suspension continues past March 16, 2018 based on certain reinstatement 

conditions is the subject of an adversary proceeding which will be 

adjudicated in due course.”

Four days later, on May 7, 2018, the State Bar moved to dismiss the 

First Adversary. The State Bar argued that the 2017 Discovery Sanctions 

and Disciplinary Costs were nondischargeable debts under § 523(a)(7) and 

that it properly continued Albert’s suspension after the initial 30 days 

based on her failure to pay those debts. The State Bar also sought to dismiss 

Albert’s other claims for relief.

While its motion to dismiss was pending, on June 1, 2018, the State 

Bar reinstated Albert effective as of March 16, 2018. It did not explain why 

it changed its position.

Shortly thereafter, on June 26, 2018, the bankruptcy court converted 
8

the bankruptcy case to chapter 7. The State Bar then reimposed Albert’s 

suspension pending payment of the 2017 Discovery Sanctions and 

Disciplinary Costs.

On August 9, 2018, the bankruptcy court granted the defendants’ 

motion to dismiss the First Adversary. Albert appealed. This Panel 

affirmed the dismissal. We interpreted the Supreme Court’s decision in 

Kelly v. Robinson, 479 U.S. 36 (1986), to mean that the 2017 Discovery 

Sanctions and Disciplinary Costs were nondischargeable under § 523(a)(7). 

Albert-Sheridan v. State Bar (In re Albert-Sheridan), 2019 WL 1594012, at *5-7 

(9th Cir. BAP Apr. 11, 2019) (“Albert I”), aff'd in part, rev'd in part and 

remanded, 960 F.3d 1188 (9th Cir. 2020) (“Albert II”), and aff'd, 808 F. App’x 

565 (9th Cir. Jun. 10, 2020) (“Albert III”). We further held that the State Bar 

could condition the reinstatement of Albert’s law license on payment of 

nondischargeable debts without violating § 525. Id. at *8. We also affirmed 

the dismissal of Albert’s other causes of action.

C. The Ninth Circuit’s decisions.

Albert appealed the Panel’s decision to the Ninth Circuit Court of 

Appeals. This resulted in two decisions. In an unpublished decision, the 

Ninth Circuit affirmed the dismissal of all the non-bankruptcy claims for 

relief. Albert III, 808 F. App’x at 566. It held that most of the nonbankruptcy claims depended on the dischargeability of both the

Disciplinary Costs and the 2017 Discovery Sanctions. As the Ninth Circuit 

observed, this was a false premise because the Disciplinary Costs were 
9

nondischargeable, and the State Bar could properly condition Albert’s 

reinstatement on payment of the Disciplinary Costs. Id. at 566-67.

Separately, in a published decision, the Ninth Circuit held that the 

2017 Discovery Sanctions were compensatory rather than punitive in 

nature and were not excepted from discharge under § 523(a)(7). Albert II, 

960 F.3d at 1188, 1195-96.

D. Albert’s discharge and issuance of a new suspension order.

In the meantime, on February 26, 2019, Albert received her chapter 7 

discharge. 

In January 2019, between this Panel’s decision in Albert I and the 

Ninth Circuit’s decisions in Albert II and III, the State Bar Court issued 

another decision (“2019 Decision”), and in July 2019 the California 

Supreme Court issued a second disciplinary order against Albert (“2019 

Suspension Order”). The misconduct covered by this order was separate 

from that covered by the 2017 Suspension Order. It mostly concerned 

Albert’s retention by Dr. Nira Schwartz-Woods as patent litigation counsel 

between 2014 and 2016. But it also addressed $875 in unpaid discovery 

sanctions imposed against Albert in 2015 in a lawsuit she prosecuted as 

plaintiffs’ counsel against Fin City Foods, Inc. (“Fin City Sanction”). 

Between 2016 and 2018, the State Bar issued multiple NDCs regarding

these matters and continued its investigation and prosecution of these 

disciplinary charges while Albert’s bankruptcy case was pending. On 

January 9, 2019, prior to Albert’s discharge, the State Bar Court found that 
10

she willfully failed to: (1) perform her representation of Dr. Woods with 

competence; (2) account for client funds; (3) refund $20,000 in unearned 

fees; (4) cooperate in the State Bar’s disciplinary investigation; (5) release 

the client’s file; and (6) obey the sanctions order in the Fin City Foods 

litigation.

Based on these findings of misconduct, the California Supreme Court 

issued the 2019 Suspension Order. It placed Albert on probation for two 

years and suspended her from practice for a minimum of six months. The 

suspension would continue until she repaid the $20,000 retainer fee plus 

interest to Dr. Woods (“Woods Restitution”), the Fin City Sanction, and 

$18,841.90 in further Disciplinary Costs.4

Between 2019 and 2021, Albert and the State Bar communicated 

about the terms and status of her probation and the amounts she needed to 

pay to be eligible for reinstatement. Some of these communications took 

the form of quarterly probation reports the State Bar required Albert to fill 

out and the State Bar’s responses to her efforts. The State Bar also issued 

additional NDCs and sent Albert emails in response to her inquiries 

regarding what she needed to pay to be reinstated (“Alleged Email 

Violations”).

4 In December 2020, the State Bar paid Dr. Woods $20,000 from the CSF. In 

accordance with the terms of the 2019 Suspension Order, the CSF directed Albert to 

reimburse it for this expenditure (“CSF Obligation”) as a condition to her reinstatement.
11

E. Albert’s second adversary proceeding.

In June 2020, Albert filed her second adversary proceeding against 

the State Bar and some of its employees (“Individual State Bar 

Defendants”). The parties stipulated to consolidate the remnants of her 

First Adversary with the second adversary proceeding and to allow her to 

file an amended consolidated complaint with additional claims

(“Consolidated Adversary”). Albert’s First Amended Complaint (“FAC”)

stated claims for: (1) dischargeability of debts under § 523(a)(7) against all 

defendants; (2) violation of the automatic stay and discharge injunction 

against all defendants; (3) violation of the Eighth Amendment of the U.S.

Constitution for excessive fines against the State Bar; (4) violation of Article 

1, Section 17, of the California Constitution for excessive fines against the 

State Bar; and (5) violation of § 525(a) against the State Bar for its failure to

reinstate Albert’s license based on a dischargeable debt.

In April 2021, Albert paid the State Bar $37,555.90, representing all

outstanding Disciplinary Costs and all of the CSF Obligation. The State Bar 

reinstated Albert as an active licensed attorney on May 5, 2021.

F. Partial dismissal of the Consolidated Adversary.

In June 2021, the bankruptcy court granted the State Bar’s motion to 

dismiss some of Albert’s claims in the Consolidated Adversary. 

The court dismissed her claims for violation of the automatic stay. 

The bankruptcy court concluded that the 2019 Decision was exempt from 

the automatic stay under § 362(b)(4). It did not directly address the 
12

allegations pertaining to the timeliness of her reinstatement during the 

chapter 13 phase of her bankruptcy case, but the court rejected Albert’s 

claim that the State Bar violated the automatic stay by reimposing her 

suspension after the conversion of her case to chapter 7. The court 

interpreted the Ninth Circuit’s decision in Albert II to mean that the State 

Bar could properly condition Albert’s reinstatement upon the payment of 

nondischargeable debt.

The bankruptcy court also dismissed Albert’s claims for violation of 

the United States and California constitutions and under § 525(a), as well as

all claims against the Individual State Bar Defendants. It denied leave to 

amend the dismissed claims.

The only surviving claims after the court’s ruling on the motion to 

dismiss were Albert’s: (1) first claim for relief against the State Bar seeking 

to determine the dischargeability of the debts she owed to the State Bar; 

and (2) second claim for relief against the State Bar for violation of the 

discharge injunction.

G. Partial summary judgment in the Consolidated Adversary.

In April 2022, the State Bar moved for partial summary judgment on

the two remaining claims for relief. But it excluded from its motion a small 

portion of the claim for violation of the discharge injunction: it admitted 

that it should have reinstated Albert’s law license on April 21, 2021, when 

she paid the Disciplinary Costs and the CSF Obligation, that it did not do 

so until May 5, 2021, and that its delay violated the discharge injunction.
13

With respect to the first claim for relief, the State Bar argued that 

there was no genuine factual dispute regarding the dischargeability of the

discovery sanctions, the Disciplinary Costs, and the Woods Restitution/CSF 

Obligation. All that remained was for the bankruptcy court to determine as 

a pure matter of law whether these debts were nondischargeable under 

§ 523(a)(7).

As for the second claim for contempt, the State Bar asserted that none 

of its challenged conduct constituted an attempt to collect a discharged 

debt. But even if it did, the State Bar argued that there was no genuine 

dispute that it reasonably believed it was acting lawfully and not in 

violation of the discharge injunction.

The bankruptcy court granted the motion for partial summary 

judgment in June 2022. The court recognized that under Albert II, the 

discovery sanctions had been discharged but the Disciplinary Costs

remained nondischargeable. The bankruptcy court also ruled that Albert’s 

CSF Obligation was excepted from discharge under § 523(a)(7).

As for the contempt claim, the bankruptcy court held that the 

probation reports, the NDCs, and the Alleged Email Violations were not 

actions to collect discharged debts but rather served regulatory or 

disciplinary purposes. The court alternatively held that, even if some of 

these activities constituted actions to collect a debt, the Disciplinary Costs 

remained nondischargeable. As for the discovery sanctions, the bankruptcy 

court ruled that Albert failed to show that the State Bar lacked an 
14

objectively reasonable basis for concluding that these debts were 

nondischargeable when the alleged collection efforts occurred. To the 

contrary, the bankruptcy court remarked that, “until the Ninth Circuit 

rendered its opinion in [Albert II] . . . , there was no [Ninth Circuit] 

precedent on this issue and both this Court and the Ninth Circuit B.A.P. 

were under the same impression as the State Bar that discovery sanctions 

were nondischargeable.”

Shortly after the bankruptcy court’s partial summary judgment, the 

Ninth Circuit held in Kassas v. State Bar, 49 F.4th 1158 (9th Cir. 2022)

(“Kassas II”), rev’g Kassas v. State Bar (In re Kassas), 631 B.R. 469 (Bankr. C.D. 

Cal. 2021) (“Kassas I”), that restitution obligations payable to the CSF were 

dischargeable in bankruptcy. Albert thereafter moved for reconsideration 

of the bankruptcy court’s summary judgment ruling. The bankruptcy court 

partially granted the motion, acknowledging that, under Kassas II, the CSF 

Obligation had been discharged.

H. Trial and final judgment.

The bankruptcy court’s decisions on the motions to dismiss and 

summary judgment left for trial only the issue of the State Bar’s contempt 

for violation of the discharge injunction from the date on which Albert paid 

the Disciplinary Costs and the CSF Obligation (April 21, 2021) through the 

date of Albert’s reinstatement (May 5, 2021). After a one-day trial, the court

issued its memorandum decision holding the State Bar in contempt for the 

15-day period. As the court explained, when Albert made the payment on 
15

April 21, 2021, the State Bar told her that it would forthwith reinstate her. 

But, as the State Bar admitted, “through its employees, [it] continued to 

place administrative barriers, which delayed the re-activation of her license 

until May 5, 2021.”

The court then made rulings regarding Albert’s entitlement to 

damages against the State Bar. Albert claimed 22 categories of damages.

For most of these categories, the court awarded little or no damages. It 

ruled that Albert presented insufficient evidence that she incurred any 

compensable damages or losses as a result of the 15-day delay.

Albert admitted that she could not recover her attorney’s fees for selfrepresentation. Still, she sought $300,133.75 for the “time” she spent on the 

matter. The court considered this to be a thinly disguised attempt to 

recover attorney’s fees by a pro se litigant. It awarded her $922.50 ($45 per 

hour for 20.5 hours) for the time she said she spent over the 15 days 

attempting to push through her reinstatement after she paid the State Bar.

The court also awarded Albert $20,705.48 for various litigation costs 

she incurred. The bankruptcy court entered final judgment for Albert in the 

amount of $21,627.48 on January 27, 2023. Albert timely appealed. The 

State Bar has not appealed the entry of judgment against it.

JURISDICTION

The bankruptcy court had jurisdiction under 28 U.S.C. § 1334, and we 

have jurisdiction under 28 U.S.C. § 158.
16

ISSUES

1. Did the bankruptcy court err when it dismissed some of Albert’s 

claims for relief?

2. Did the bankruptcy court err when it granted the State Bar partial 

summary judgment?

3. Did the bankruptcy court err when it entered judgment in favor of 

Albert but awarded her damages of only $21,627.48?

4. Do any of Albert’s evidentiary or discovery arguments support 

reversal?

STANDARDS OF REVIEW

We review de novo the bankruptcy court’s dismissal under Civil 

Rule 12(b)(6), which is made applicable in adversary proceedings by Rule 

7012(b). Barnes v. Belice (In re Belice), 461 B.R. 564, 570-72 & n.3 (9th Cir. BAP 

2011). We also review de novo its summary judgment ruling. Stadtmueller 

v. Sarkisian (In re Medina), 619 B.R. 236, 240 (9th Cir. BAP 2020), aff'd, 2021 

WL 3214757 (9th Cir. July 29, 2021). Jurisdictional issues also are reviewed 

de novo. See McCowan v. Fraley (In re McCowan), 296 B.R. 1, 2 (9th Cir. BAP 

2003) (“Whether a court has subject matter jurisdiction is a question of law 

that we review de novo.”). “De novo review requires that we consider a 

matter anew, as if no decision had been made previously.” Francis v. 

Wallace (In re Francis), 505 B.R. 914, 917 (9th Cir. BAP 2014).

The bankruptcy court’s legal conclusions after trial are reviewed de 

novo, and its factual findings are reviewed under the clearly erroneous 
17

standard. Oney v. Weinberg (In re Weinberg), 410 B.R. 19, 28 (9th Cir. BAP 

2009), aff'd, 407 F. App’x 176 (2010). Factual findings are clearly erroneous 

if they are illogical, implausible, or without support in the record. Retz v. 

Samson (In re Retz), 606 F.3d 1189, 1196 (9th Cir. 2010).

CIVIL RULE 12(b)(6) STANDARDS

When we review an order granting a Civil Rule 12(b)(6) motion, we 

consider the legal sufficiency of the plaintiff’s complaint. See Johnson v. 

Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121–22 (9th Cir. 2008). We must 

assess whether the complaint presents a cognizable legal theory and 

whether it contains sufficient factual allegations to support that theory. Id.

Thus, “for a complaint to survive a motion to dismiss, the non-conclusory 

‘factual content,’ and reasonable inferences from that content, must be 

plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. 

Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (citing Ashcroft v. Iqbal, 556 U.S. 

662, 677-78 (2009)). A claim is facially plausible when it contains factual 

allegations that, if taken as true, would allow the court to reasonably infer 

that the defendant is liable to the plaintiff. Iqbal, 556 U.S. at 678.

“Threadbare recitals of the elements of a cause of action, supported by 

mere conclusory statements, do not suffice.” Id. Additionally, we do not 

accept as true mere legal conclusions because they cannot by themselves 

establish a plausible claim for relief. Id.

SUMMARY JUDGMENT STANDARDS

A court must grant summary judgment when the pleadings and 
18

evidence submitted show that there are no genuine issues of material fact 

and the movant is entitled to judgment as a matter of law. Civil Rule 56(a) 

(incorporated by Rule 7056); Roussos v. Michaelides (In re Roussos), 251 B.R. 

86, 91 (9th Cir. BAP 2000), aff'd, 33 F. App’x 365 (9th Cir. 2002). The moving 

party bears the initial burden of demonstrating an absence of a genuine 

issue of material fact. Once the moving party has met its initial burden, the 

non-moving party must show specific facts establishing the existence of 

genuine issues for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 

(1986).

DISCUSSION

A. Events During the Bankruptcy Case.

Albert’s first set of claims are based on alleged violations of the 

automatic stay that went into effect when she filed her chapter 13 petition

and remained in effect until she received her chapter 7 discharge. The 

automatic stay is a statutory injunction that prohibits most actions to collect 

prepetition debts or to execute upon property of the estate. § 362(a); see also

Gruntz v. Cnty. of L.A. (In re Gruntz), 202 F.3d 1074, 1081–82 (9th Cir. 2000)

(en banc) (describing sweeping scope of automatic stay). 

The automatic stay is broad, but it is subject to exceptions. The 

exception that is particularly relevant to this appeal is § 362(b)(4), which 

provides that the automatic stay does not apply to “the commencement or 

continuation of an action by a governmental unit . . . to enforce such 

governmental unit’s . . . police and regulatory power, including the 
19

enforcement of a judgment other than a monetary judgment . . . .”

This exception covers professional disciplinary proceedings 

conducted by state licensing agencies. It does not, however, apply to 

actions solely serving a pecuniary interest. See Poule v. Registrar of 

Contractors (In re Poule), 91 B.R. 83, 85-88 (9th Cir. BAP 1988). Courts must 

distinguish between valid and necessary governmental action and “a 

circumvented method of collecting a dischargeable judgment from the 

debtor.” Watson v. Shandell (In re Watson), 192 B.R. 739, 745 n.5 (9th Cir. 

BAP 1996) (citing Stovall v. Stovall, 126 B.R. 814, 815–16 (N.D. Ga. 1990)), 

aff’d, 116 F.3d 488 (9th Cir. 1997).

Violations of the automatic stay have consequences. Actions taken in 

violation of the automatic stay are void. Schwartz v. United States (In re 

Schwartz), 954 F.2d 569, 571-72 (9th Cir. 1992). Additionally, § 362(k) allows 

individual debtors to recover damages caused by a violation of the 

automatic stay. See Koeberer v. Cal. Bank of Com. (In re Koeberer), 632 B.R. 680, 

687 (9th Cir. BAP 2021); Ramirez v. Fuselier (In re Ramirez), 183 B.R. 583, 589 

(9th Cir. BAP 1995), appeal dismissed sub nom., Ramirez v. Sharp (In re 

Ramirez), 201 F.3d 444 (9th Cir. 1999) (table). To recover actual damages 

under § 362(k), the debtor must allege and prove that the stay violation was 

willful, specifically that the defendant “knew of the automatic stay, and its 

actions in violation of the stay were intentional.” Stuart v. City of Scottsdale 

(In re Stuart), 632 B.R. 531, 538 (9th Cir. BAP 2021) (quoting Eskanos & Adler, 

P.C. v. Leetien, 309 F.3d 1210, 1215 (9th Cir. 2002)), aff’d, 2023 WL 5011739 
20

(9th Cir. Aug. 7, 2023). Importantly, the debtor need not prove that the 

defendants intended to violate the stay. Pinkstaff v. United States (In re 

Pinkstaff), 974 F.2d 113, 115 (9th Cir. 1992).

1. Period 1: Chapter 13 petition date to end of minimum 

suspension.

We begin our analysis with the period that began when Albert filed 

her bankruptcy petition and the automatic stay was invoked, and ended on 

March 16, 2018, when the minimum 30-day suspension period under the 

2017 Suspension Order expired. Although Albert’s contentions are 

muddled, she seemed to concede that the State Bar did not violate the 

automatic stay during this period. Her concession is correct. The automatic 

stay did not prevent the State Bar from exercising its police or regulatory 

powers unless it was employing those powers solely for pecuniary 

purposes. During Period 1, the 2017 Suspension Order provided that 

Albert could not reinstate her license even if she paid all of her debts in 

full. Therefore, the suspension during Period 1 had no pecuniary purpose,

and it did not violate the automatic stay.

2. Period 2: End of minimum suspension to reinstatement in 

chapter 13.

After the minimum suspension term ended on March 16, 2018, the 

2017 Suspension Order entitled Albert to reinstatement if she paid the 2017 

Discovery Sanctions and the Disciplinary Costs. In short, the only thing 

that stood between Albert and her license during this period was the 
21

payment of debt. Albert alleged in her FAC that the State Bar violated the 

automatic stay by refusing to reinstate her law license until June 1, 2018, 

based on her failure to pay debt.

5

The bankruptcy court rejected this claim, reasoning that the State Bar 

did not violate the automatic stay during this period because some of those 

debts (the Disciplinary Costs) were not dischargeable. It relied on the Ninth 

Circuit’s decision in Albert II. In this respect, the bankruptcy court 

misconstrued Albert II. In that decision, the court of appeals held that the 

State Bar did not violate § 525(a). That section bars a governmental unit 

from withholding a license “solely because [the debtor] . . . has not paid a 

debt that is dischargeable . . . .” The court of appeals did not discuss the 

effect of the automatic stay because no stay violation claims were before 

the court. Section 525(a) is different from § 362(a) in a crucial respect: the 

former only protects debtors against adverse consequences from 

dischargeable debts; while the latter protects debtors from the enforcement 

of “claims,” which includes both dischargeable and nondischargeable 

debts. Compare § 525(a) (preventing discrimination against debtors and 

others by virtue of being a debtor or not having “paid a debt that is 

dischargeable in the case under this title . . .”), with § 362(a)(6) (staying “any 

act to collect, assess, or recover a claim against the debtor that arose before 

5 The State Bar claimed that it backdated the reinstatement of Albert’s license as 

of March 16, 2018. We need not decide which date is relevant because it would only 

affect the amount of any damages, and we leave that issue to the bankruptcy court on 

remand.
22

commencement of the case under this title”); see generally Johnson v. Home 

State Bank, 501 U.S. 78, 83 (1991) (explaining that “claim” means “right to 

payment, whether or not such right is reduced to judgment, liquidated, 

unliquidated, fixed, contingent, matured, unmatured, disputed, 

undisputed, legal, equitable, secured, or unsecured” and that “Congress 

intended by this language to adopt the broadest available definition of 

‘claim’” (citations omitted)).

The Ninth Circuit affirmed the prior dismissal of Albert’s claims 

under § 525, but her subsequent claim under § 362(k) remains. Albert’s 

FAC is poorly drafted, but it contains sufficient allegations to sustain this 

portion of her claim. Albert alleged that, “[o]n March 16, 2018, after the 30-

day suspension period had ended, Ms. Albert demanded the State Bar 

defendants reinstate her license, but they failed and refused to do so on the 

ground Ms. Albert had not paid [the 2017 Discovery Sanctions] plus 10% 

interest.” FAC at ¶ 22. Albert also specifically alleged that “[s]uch illegal 

attempt included but is not limited to refusing to reinstate Ms. Albert’s law 

license from March 16, 2018 to May 30, 2018 in a timely manner and then 

by revoking her license again on June 28, 2018 through at least February 2, 

2019 because the [2017 Discovery Sanctions] was dischargeable debt.” FAC 

at ¶ 100. Albert further alleged that she suffered actual damages 

proximately caused by the State Bar’s willful stay violation.

These factual allegations are adequate. On our review of the 

bankruptcy court’s order partially granting the State Bar’s motion to 
23

dismiss, we are obligated to accept her allegations as true and construe 

them in the light most favorable to Albert. See Johnson, 534 F.3d at 1122. The 

allegations sufficiently state a claim for violation of the automatic stay. 

While Albert was in chapter 13, all debts owed to the State Bar were

dischargeable under § 1328(a), including the Disciplinary Costs, because 

§ 523(a)(7) does not apply in chapter 13. Accordingly, there is no question 

that § 362(a)(6) stayed the State Bar from attempting to collect any debts 

owed by Albert while she was in chapter 13. Any effort to collect these

debts as a condition of reinstatement of Albert’s law license, therefore, 

violated the automatic stay. The bankruptcy court erred in dismissing this 

claim under Civil Rule 12(b)(6). We remand for further proceedings on 

Albert’s claim that the State Bar violated the stay by attempting to collect 

the 2017 Discovery Sanction and Disciplinary Costs while she was in 

chapter 13. 

3. Period 3: First reinstatement to chapter 7 conversion.

In her FAC, Albert alleged that the State Bar continuously violated 

the automatic stay during this period. These allegations do not meet the 

test of plausibility. Albert did not identify any act of the State Bar that 

violated the stay during the limited period after the State Bar reinstated her 

license up to the conversion of her bankruptcy and the reimposition of her 

suspension. The bankruptcy court did not err in dismissing this portion of 
24

her claims.

4. Period 4: Conversion to chapter 7 to discharge (2/26/19).

The bankruptcy court converted Albert’s bankruptcy case from 

chapter 13 to chapter 7 on June 26, 2018. Conversion of her bankruptcy case 

to chapter 7 made § 523(a)(7) applicable where it was not in chapter 13. 

Compare § 523(a), with § 1328(a)(2). As a result, the Disciplinary Costs 

became nondischargeable upon conversion of the case while the 2017 

Discovery Sanctions remained dischargeable as held in Albert II, 960 F.3d at 

1188, 1195-96. The State Bar then reimposed Albert’s suspension from the 

practice of law subject to paying the 2017 Discovery Sanctions and the 

Disciplinary Costs. Albert has alleged in the FAC that the State Bar violated 

the automatic stay by seeking to collect both debts through various actions, 

including the reimposition of her suspension.

The bankruptcy court dismissed Albert’s claims for stay violations on 

the basis that that the Disciplinary Costs were nondischargeable. It 

reasoned that the State Bar properly conditioned her reinstatement to 

practice law on the payment of that debt. Section 362(a)(6) continued to 

stay the State Bar’s efforts to collect the dischargeable 2017 Discovery 

Sanctions, but the question arises whether it also stayed collection of the 

nondischargeable Disciplinary Costs while Albert was in chapter 7.

Section 362(a) defines the scope of the automatic stay and specifically 

precludes any act to collect any prepetition claims, which the 2017 

Discovery Sanctions and the Disciplinary Costs were. As noted above, 
25

§ 362(a)(6) stays “any act to collect, assess, or recover a claim against the 

debtor that arose before the commencement of the case . . . .” Section 362(b) 

lists the exceptions to the automatic stay. The State Bar acted under 

§ 362(b)(4) to investigate and adjudicate the claims of professional 

misconduct against Albert, and then to enforce its judgments against her. 

Section 362(b)(4) provides:

under paragraph (1), (2), (3), or (6) of subsection (a) of this 

section, of the commencement or continuation of an action or 

proceeding by a governmental unit . . . to enforce such 

governmental unit’s or organization’s police and regulatory 

power, including the enforcement of a judgment other than a 

money judgment, obtained in an action or proceeding by the 

governmental unit to enforce such governmental unit’s or 

organization’s police or regulatory power[.]

(Emphasis added.)

While § 362(b)(4) excepts actions and enforcement of judgments 

invoking a governmental unit’s police and regulatory power, the statute 

specifically excludes enforcement of money judgments from its exception. 

Accordingly, “section 362(b)(4) by its own terms does not permit a 

[governmental creditor] to ‘enforce . . . a money judgment’ obtained in a 

police power proceeding. Thus, section 362(b)(4) defers to other provisions 

of the Code to determine whether the state may collect money.” Hawaii v. 

Parsons (In re Parsons), 505 B.R. 540, 545 (Bankr. D. Haw. 2014); see also 

United States v. Perez (In re Perez), 61 B.R. 367, 368 (Bankr. E.D. Cal. 1986)

(permitting governmental action to proceed to judgment under § 362(b)(4) 
26

but holding “that any attempts to collect any money judgment which 

might be rendered in that action shall not be pursued except through 

debtor’s bankruptcy proceeding”).

Neither § 362(a) nor § 362(b) differentiates between dischargeable 

and nondischargeable debts in the application of the stay or its exceptions. 

Yet, binding authority in this circuit holds that creditors who obtain a 

nondischargeable judgment are not stayed from collecting 

nondischargeable debts so long as collection is sought from property that is 

not property of the bankruptcy estate. Palm v. Klapperman (In re Cady), 266 

B.R. 172, 180 (9th Cir. BAP 2001) (“Section 362 [does] not preclude the 

execution of a judgment, which has been held by the bankruptcy court to 

be non-dischargeable, upon property of the debtor which is not property of 

the estate.” (quoting Watson v. City Nat’l Bank (In re Watson), 78 B.R. 232, 

235 (9th Cir. BAP 1987)), aff’d, 315 F.3d 1121 (9th Cir. 2003); see Cal. State 

Univ. v. Gustafson (In re Gustafson), 111 B.R. 282, 286 (9th Cir. BAP 1990)

(“We therefore determine that the automatic stay applies to preclude a 

creditor’s attempts to collect a claim that is presumed, but not yet 

determined by the bankruptcy court, to be nondischargeable under section 

523(a)(8).”), rev'd on other grounds, 934 F.2d 216 (9th Cir. 1991); In re Watson, 

78 B.R. at 233-34 (holding that a creditor who obtains a § 523 judgment of 

nondischargeability may proceed with execution on non-estate property 

without obtaining relief from the automatic stay).

These cases do not address whether creditors holding 
27

nondischargeable debts that are neither presumed nondischargeable, such 

as under § 523(a)(8), nor require a bankruptcy court judgment under 

§ 523(c), are subject to the automatic stay. As relevant here, § 362(b)(4) 

provides that judgment debts arising from governmental police and 

regulatory powers are not excepted from the automatic stay. Because 

§ 362(b)(4) is clear that the recovery of monetary judgments remains subject 

to the automatic stay, any actions to recover such a debt violates the 

automatic stay absent relief from stay under § 362(d). As a result, any 

action by the State Bar to collect either the 2017 Discovery Sanctions or the 

Disciplinary Costs during Albert’s bankruptcy necessarily violated the 

automatic stay.

Albert’s allegations of stay violations in the FAC are chaotic. We have 

focused on the allegations pertaining to her liability under the 2017 

Suspension Order, but she also asserts that the State Bar’s later disciplinary 

proceedings involving her representation of Dr. Woods and the Fin City 

Sanction violated the automatic stay. As discussed in more detail elsewhere 

in this decision, we agree with the bankruptcy court that the adjudication 

of the disciplinary proceedings against Albert during the pendency of her 

bankruptcy that ultimately resulted in the 2019 Decision and the 2019 

Suspension Order fall squarely within the stay exception provided by 

§ 362(b)(4). Those actions did not violate the automatic stay. 

We reverse and remand the bankruptcy court’s dismissal of Albert’s 

claims that the State Bar’s efforts to collect the 2017 Discovery Sanctions 
28

and Disciplinary Costs violated the automatic stay. The court erred in 

concluding that the automatic stay did not apply to the State Bar’s 

collection efforts while Albert was in chapter 7. Albert’s allegations that the 

State Bar sought to collect the 2017 Discovery Sanctions and Disciplinary 

Costs in violation of the automatic stay state viable claims for purposes of 

defeating the motion to dismiss.

B. Post-Discharge Events.

As we have noted, Albert received her discharge under chapter 7 on 

February 26, 2019. The discharge has two effects. First, it “voids any 

judgment at any time obtained, to the extent that such judgment is a 

determination of the personal liability of the debtor with respect to any 

debt discharged under section 727 . . . .” § 524(a)(1). Second, it “operates as 

an injunction against . . . an act[ ] to collect, recover or offset any 

[discharged] debt as a personal liability of the debtor . . . .” § 524(a)(2).

The discharge only applies to dischargeable debts. Among the debts 

that are not discharged in chapter 7 is “any debt . . . to the extent such debt 

is for a fine, penalty, or forfeiture payable to and for the benefit of a 

governmental unit, and is not compensation for actual pecuniary loss . . . .“ 

§ 523(a)(7). 

Unlike violations of the automatic stay, the Bankruptcy Code does 

not provide a statutory remedy to debtors for a violation of the discharge 

injunction. But because it is an injunction, a party who violates it may be 

liable for contempt. See Walls v. Wells Fargo Bank, N.A., 276 F.3d 502, 507 
29

(9th Cir. 2002). Contempt arises from a knowing violation of a clear order 

of the court. See ZiLOG, Inc. v. Corning (In re ZiLOG, Inc.), 450 F.3d 996, 

1007-09 (9th Cir. 2006); Nash v. Clark Cnty. Dist. Att'y's Off. (In re Nash), 464 

B.R. 874, 880 (9th Cir. BAP 2012).

The discharge injunction is a “specific and definite” court order that 

may support contempt. In re Bennett, 298 F.3d at 1069. To impose liability, 

however, Albert was required to show by “clear and convincing evidence” 

that the State Bar “(1) knew the discharge injunction was applicable and 

(2) intended the actions which violated the injunction.” In re ZiLOG, Inc., 

450 F.3d at 1007 (quoting In re Bennett, 298 F.3d at 1069).

The creditor’s knowledge of the discharge injunction for purposes of 

contempt is subject to an objective standard. In Taggart v. Lorenzen, 139 

S. Ct. 1795 (2019), the Supreme Court held that civil contempt sanctions

only are appropriate “when there is no objectively reasonable basis for 

concluding that the creditor’s conduct might be lawful under the discharge 

order.” Id. at 1801 (emphasis added). Thus, to hold a party in contempt, the 

debtor must prove that there was “[no] fair ground of doubt as to the 

wrongfulness of the defendant’s conduct.” Id. (emphasis added) (quoting 

Cal. Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 618 (1885)).

The Ninth Circuit’s consideration of the contempt claim in Taggart 

after remand from the Supreme Court is instructive. There, the underlying 

question was whether the debtor had “returned to the fray” in postpetition 

litigation such that attorney’s fees could be awarded for his postpetition 
30

conduct despite entry of the discharge. The Ninth Circuit observed that the 

question it needed to answer was “whether the Creditors had some—

indeed, any—objectively reasonable basis for concluding that Taggart 

might have ‘returned to the fray’ and that their motion for post-petition 

attorney’s fees might have been lawful.” Lorenzen v. Taggart (In re Taggart), 

980 F.3d 1340, 1348 (9th Cir. 2020) (citing Taggart, 139 S. Ct. at 1799).

1. The Discharge Did Not Entirely Void the 2019 Suspension 

Order.

Albert argues that the 2019 Suspension Order violated the discharge 

and is therefore void. The bankruptcy court correctly rejected this 

contention.6

The 2019 Suspension Order was the culmination of lengthy 

disciplinary proceedings examining Albert’s prepetition conduct and her 

compliance with her professional obligations. Albert was charged with 

eight counts of professional misconduct involving two distinct matters. 

With respect to Albert’s representation of Dr. Woods, the State Bar Court 

found that Albert failed to: (1) provide competent representation; (2) 

render an account of client funds; (3) return unearned fees; (4) cooperate 

with the State Bar investigation; and (5) return client papers and property.

6 Albert also challenges the 2019 Decision as void. The 2019 Decision was issued 

in January 2019, before the bankruptcy court granted Albert a discharge in February 

2019. It was subject to the automatic stay rather than the discharge injunction. The 

disciplinary proceedings resulting in the 2019 Decision against Albert were proper 

exercises of the regulatory powers of the State Bar excepted from the stay under 

§ 362(b)(4). Wade v. State Bar (In re Wade), 948 F.2d 1122, 1123 (9th Cir. 1991).
31

Most of these findings do not concern Albert’s failure to pay her debts—

dischargeable or otherwise. Thus, there is no basis to say that the entirety 

of the 2019 Suspension Order violated the discharge.

Albert vaguely argues that the State Bar used the disciplinary 

proceedings leading up to and including the 2019 Suspension Order as a 

form of leverage solely to collect dischargeable debts. This bald allegation 

is neither specific nor plausible enough to withstand dismissal under Civil 

Rule 12(b)(6). Iqbal, 556 U.S. at 678. The record makes clear that the State 

Bar had ample non-pecuniary reasons to take disciplinary action against 

Albert.7

Admittedly, the 2019 Suspension Order did provide for the 

continuation of a mandatory suspension conditioned on repayment of the 

Woods Restitution and the Fin City Sanction. Albert has established that 

those debts are dischargeable. But this alone does not render the 

disciplinary proceedings pecuniary in nature, because her license was 

suspended for multiple, independently sufficient reasons, many of which 

had nothing to do with Albert’s failure to pay her debts. A judgment 

7 Bertuccio v. California State Contractors License Board (In re Bertuccio), 414 B.R. 604, 

616-17 (Bankr. N.D. Cal. 2008), does not help Albert. In that case, two California state 

agencies suspended Bertuccio’s contractor’s license solely because he failed to pay state 

taxes. The agencies refused to reinstate the license immediately after he filed his chapter 

13 bankruptcy. Id. at 607-08. The parties ultimately agreed that the taxes were 

dischargeable and that Bertuccio was entitled to reinstatement of his license. Bertuccio

differs from this case because the agencies had no reason to suspend Bertuccio’s license 

other than his failure to pay a dischargeable debt. In contrast, Albert committed 

multiple unprofessional acts that had nothing to do with the payment of money.
32

subsuming both dischargeable and nondischargeable debt is not void in its 

entirety under § 524(a)(1) simply because it also included the discharged 

debt. See In re Poule, 91 B.R. at 85-88.

Albert argues that In re Slater, 573 B.R. 247 (Bankr. D. Utah 2017), 

permits courts to void the entirety of a judgment if it includes any 

dischargeable debt. Slater involved a default judgment entered against the 

debtor for both discharged prepetition debts and postpetition debts not 

subject to the debtor’s discharge. The bankruptcy court held that the 

judgment was void. In a footnote, the court observed that, “although an 

argument could be made that only part of the [judgment] relating to the 

2007 Note is void, the Court determines that carving the [judgment] up as 

to void and not void would be problematic.” Id. at 257 n.50.

We respectfully decline to follow Slater. The court did not explain 

why it would be “problematic” to separate the nondischargeable and 

dischargeable parts of the judgment; the decision lays out the dollar 

amount of each part. Id. at 251-52. More importantly, § 524(a)

unambiguously provides that a judgment is void only “to the extent” it 

rests on a discharged debt, so the Slater’s decision to void the entire 

judgment lacked a statutory basis.

Section 524(a)(1) is clear, and we are bound to apply it to void the 

2019 Suspension Order—but only to the extent it imposed continued 

liability for the Fin City Sanction, the Woods Restitution, and the CSF 

Obligation. See Lamie v. U.S. Tr., 540 U.S. 526, 534 (2004). Accordingly, we 
33

affirm the bankruptcy court’s dismissal of Albert’s claim that the 2019 

Decision and 2019 Suspension Order were void in their entirety for 

violation of the discharge.

2. The bankruptcy court did not err by granting partial 

summary judgment on Albert’s claims for contempt against 

the State Bar.

Albert further argues that the bankruptcy court erred by granting 

summary judgment to the State Bar on her claims for contempt arising 

from its post-discharge efforts to collect the dischargeable Woods 

Restitution, CSF Obligation, and Fin City Sanction imposed under the 2019 

Suspension Order. She is wrong. She has established that these debts are 

dischargeable. It follows that the State Bar violated the discharge injunction

by attempting to collect those debts. But Albert failed to show that the State 

Bar was in contempt and liable for damages.

a. Before Albert II.

Not every violation of the discharge injunction results in liability for 

contempt. Albert was required to establish that there was no “objectively 

reasonable basis” for the State Bar to believe that its actions did not violate 

the discharge. Taggart, 139 S. Ct. at 1801.

Prior to the Ninth Circuit’s decisions in Albert II and Kassas II, 

bankruptcy courts and the BAP ruled that liabilities like the Fin City 

Sanction, Woods Restitution, and CSF Obligation were nondischargeable. 

Indeed, when the California Supreme Court entered its 2019 Suspension 
34

Order, we had just affirmed the bankruptcy court’s ruling that the 2017 

Discovery Sanctions were nondischargeable under § 523(a)(7). The Ninth 

Circuit later decided that our decision was incorrect, recognizing that there 

was “considerable confusion among federal courts and practitioners about 

section 523(a)(7)’s scope.” Albert II, 960 F.3d at 1195 (quoting Scheer v. State 

Bar (In re Scheer), 819 F.3d 1206, 1210 (9th Cir. 2016)). Until the Ninth 

Circuit decided Albert II, our decision in Albert I gave the California 

Supreme Court and the State Bar an objectively reasonable basis to believe 

that their conduct did not violate the discharge.

Albert also maintains that the State Bar was in contempt of the 

discharge injunction when it refused to reinstate her law license on 

February 24, 2020, when the mandatory six-month suspension under the 

2019 Suspension Order expired. Again, the continuation of the suspension 

was improperly conditioned on the repayment of the Fin City Sanction and 

the Woods Restitution, but this was not established until June 10, 2020, 

when the Ninth Circuit entered its decision in Albert II. Until then, our 

decision in Albert I gave the State Bar an objectively reasonable basis to 

condition reinstatement on the repayment of the Fin City Sanction and 

Woods Restitution. 

Further, the continued post-discharge suspension was also 

conditioned on the payment of the Disciplinary Costs imposed by the 2019 

Suspension Order, and the Ninth Circuit held that such costs are not 

discharged. In other words, the State Bar was entitled to suspend Albert 
35

based on her failure to pay the nondischargeable Disciplinary Costs, and 

Albert failed to establish that she suffered additional damage because the 

State Bar also continued the suspension based on her failure to pay 

discharged debts. This also warranted the bankruptcy court’s partial 

summary judgment.

b. After Albert II.

Albert argues that the post-discharge conversion of the Woods 

Restitution into the CSF Obligation is a separate basis for contempt. The 

CSF paid the Woods Restitution on December 18, 2020, after the Ninth 

Circuit had decided Albert II. She argues that by paying Dr. Woods what 

Albert owed her in dischargeable client restitution, the State Bar 

improperly changed her debt from one owed to a third party to one owed 

to a governmental entity. Once the obligation was owed to the State Bar’s 

CSF, the State Bar argued that the CSF Obligation fell within the scope of 

§ 523(a)(7)’s discharge exception. But Albert has established that both debts 

are dischargeable. As such, the conversion of the Woods Restitution into 

the CSF Obligation did not change Albert’s rights.

Albert cites the bankruptcy court’s decision in Kassas I as evidence

that the State Bar did not have a fair ground to doubt that the CSF 

Obligation was dischargeable. This is simply wrong. The bankruptcy court 

in Kassas I recognized that Albert II did not address the dischargeability of 

CSF debt. 631 B.R. at 472. Based on the Supreme Court’s decision in Kelly, 

Kassas I concluded that “[t]he reimbursement obligation consequently 
36

bears the hallmarks of a ‘fine, penalty, or forfeiture’ because it forces [the 

attorney] to ‘confront, in concrete terms, the harms his actions have

caused.’” Id. at 475 (quoting Kelly, 479 U.S. at 49 n.10). Indeed, the 

bankruptcy court here granted summary judgment in large part based on 

Kassas I. It was not until the Ninth Circuit published its opinion reversing 

Kassas I on August 1, 2022, that the law in this circuit established that CSF 

debts are dischargeable. By that time, Albert’s license had been reinstated 

for over a year. Accordingly, even if Albert could state some damage from 

the State Bar’s efforts to collect the CSF Obligation, the State Bar had fair 

ground to doubt that the debt was discharged when it took its actions. This 

ground of doubt negated the claim for contempt based on the CSF 

Obligation.

c. Failure to reinstate immediately after payment of the 

CSF Obligation and Disciplinary Costs.

Albert argues that the State Bar was in contempt for failing to 

reinstate her license immediately after she paid the CSF Obligation and the 

Disciplinary Costs on April 20, 2021.8 The bankruptcy court agreed with 

this proposition: it held the State Bar in contempt for the period from April 

8 Albert states that the State Bar also violated the discharge order by petitioning 

“the California Supreme Court to modify the Orders to include the payments Albert 

made on April 20, 2021.” Albert never develops this argument or states how this 

conduct might have resulted in damages different from those caused by the State Bar’s

failure to reinstate her license after she paid the CSF Obligation and Disciplinary Costs. 

Accordingly, she has failed to establish any reversible error (assuming she means to 

suggest that this was a separate ground for contempt).
37

21, 2021 through May 5, 2021, when the State Bar reinstated her license, and 

entered judgment against the State Bar for the amount she paid. 

But Albert also contends that she is entitled to interest on the $20,801 

she paid to the State Bar to satisfy the CSF Obligation until the State Bar 

reimbursed her. Again, Albert confuses the State Bar’s discharge violation 

with its liability for contempt. The State Bar did violate the discharge 

injunction by collecting the CSF Obligation, but it did so with an 

objectively reasonable basis for concluding that the CSF Obligation was 

nondischargeable. The record reflects that the State Bar promptly 

reimbursed Albert for her payment of the CSF Obligation after the Ninth 

Circuit issued its Kassas II decision. Accordingly, the State Bar was not 

liable for contempt damages (in the form of interest or otherwise) for 

collecting and temporarily retaining the $20,801 Albert paid to satisfy the 

CSF Obligation.

C. The bankruptcy court correctly dismissed Albert’s § 525 claim.

In her FAC, Albert alleged that the State Bar had violated § 525(a) by 

refusing to reinstate her license solely based on her failure to pay 

discharged debts. The bankruptcy court dismissed this claim as moot and 

because reinstatement was conditioned on payment of nondischargeable 

debt as well.

Albert’s claim is frivolous. She completely ignores the fact that this 

Panel and the Ninth Circuit upheld the dismissal of a similar § 525(a) claim 

for relief stated in her First Adversary. As both decisions explained, the 
38

State Bar validly conditioned her reinstatement on the payment of a 

nondischargeable debt without violating § 525(a). Albert II, 960 F.3d at 1196;

Albert I, 2019 WL 1594012, at *8. These holdings are law of the case. See 

FDIC v. Kipperman (In re Com. Money Ctr., Inc.), 392 B.R. 814, 832-33 (9th Cir. 

BAP 2008). They are fatal to this claim.

We also agree with the bankruptcy court that Albert’s § 525(a) claim 

was moot. The only relief she sought in respect of this claim was injunctive 

relief, costs, and attorney’s fees, and “[a]ny further relief this Court may 

deem fair and just.” By the time of the hearing on the State Bar’s motion to 

dismiss, the State Bar had reinstated her, so there was no basis for 

injunctive relief, and she never alleged anything plausibly establishing her 

right to “further relief.”

Albert cites United States v. W. T. Grant Co., 345 U.S. 629, 632 (1953), in 

support of her argument that the State Bar’s voluntary cessation of the 

allegedly unlawful activity does not justify dismissal of the claim as moot.

However, W. T. Grant and other Supreme Court cases have held that 

voluntary cessation of the unlawful conduct moots requests for declaratory 

and injunctive relief when the plaintiff lacks a “reasonable expectation that 

the wrong will be repeated[.]” Preiser v. Newkirk, 422 U.S. 395, 402-03 (1975)

(quoting W. T. Grant Co., 345 U.S. at 633) (listing cases). Albert has 

speculated that other future wrongs might occur, but she offered nothing 

to show that her fears amounted to a “reasonable expectation.”

Albert has not demonstrated that the bankruptcy court erred in 
39

dismissing her § 525(a) claim.

D. The bankruptcy court did not commit reversible error in granting 

summary judgment on Albert’s claim for declaratory relief. 

Albert argues that the bankruptcy court erred “[b]ecause there was 

no order after summary judgment in Albert’s favor declaring the debts 

discharged . . . .” (Emphasis added). Albert contends that, “[w]ithout 

correcting the record, the Orders stood as collectible to the world . . . .” She 

maintains that a declaratory judgment is necessary to state the 

dischargeability of the debts the State Bar attempted to collect from her. 

She does not explain why anything other than the orders and judgment 

entered in the Consolidated Adversary were required.

To state a claim for declaratory judgment under the Federal 

Declaratory Judgment Act, 28 U.S.C. § 2201, the plaintiff must demonstrate

that an “actual controversy” exists between the parties as required by 

Article III of the U.S. Constitution, and the court must consider whether in 

its discretion to exercise its jurisdiction over the actual controversy. GEICO

v. Dizol, 133 F.3d 1220, 1222-23 (9th Cir. 1998); Am. States Ins. Co. v. Kearns, 

15 F.3d 142, 143-44 (9th Cir. 1994). An actual controversy exists if the 

dispute is “definite and concrete, touching the legal relations of parties 

having adverse legal interests; and that it be real and substantial and admit 

of specific relief through a decree of a conclusive character, as 

distinguished from an opinion advising what the law would be upon a 

hypothetical state of facts.” MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 
40

127 (2007) (cleaned up). A court may dismiss a claim for declaratory relief if 

it is duplicative of, substantially similar to, or commensurate with relief 

sought under another cause of action. Mangindin v. Wash. Mut. Bank, 637 F. 

Supp. 2d 700, 707-08 (N.D. Cal. 2009). A claim brought under the Federal 

Declaratory Judgment Act “should be denied when it will neither serve a 

useful purpose in clarifying and settling the legal relations in issue nor 

terminate the proceedings and afford relief from the uncertainty and 

controversy faced by the parties.” United States v. Washington, 759 F.2d 

1353, 1357 (9th Cir. 1985) (en banc).

In Albert II and Kassas II, the Ninth Circuit held that obligations like 

the Fin City Sanction, the Woods Restitution, and the CSF Obligation were 

dischargeable. After those decisions, the State Bar did not contend 

otherwise. Accordingly, there was no immediate and actual controversy

about the dischargeability of these debts and no basis for a declaratory 

judgment in the exact form that Albert demanded.

The bankruptcy court did not err in entering summary judgment on 

Albert’s claim for declaratory relief.

E. Albert’s challenges to the Disciplinary Costs as constitutional 

violations.

Albert’s third claim for relief in the FAC alleged that the State Bar’s 

Disciplinary Costs were excessive and violated the Eighth Amendment of 

the U.S. Constitution, as made applicable to the States by the Fourteenth 

Amendment. She similarly alleged in her fourth claim for relief that the 
41

Disciplinary Costs also violated Article I, Section 17, of the California 

Constitution. Albert argues that the Disciplinary Costs were improperly 

assessed in fixed amounts regardless of the amount in controversy in the 

underlying disciplinary action. She further alleged that most of the 

Disciplinary Costs assessed against her bore no relationship to the minor 

nature of her violations.

1. The bankruptcy court properly dismissed Albert’s Eighth 

Amendment Claim for excessive fines against the State Bar. 

The bankruptcy court dismissed Albert’s claim under the Eighth 

Amendment pursuant to Civil Rule 12(b)(1) for lack of subject matter 

jurisdiction. While we disagree with the bankruptcy court’s decision that it

lacked subject matter jurisdiction (for the reasons given in the next section), 

we agree that dismissal of this claim was proper. The State Bar was not 

amenable to suit on this basis, so the FAC failed to state a claim against the 

defendants.

The court correctly observed that claims for violation of 

constitutional rights require statutory authority and treated her claim as if 

it were premised on 42 U.S.C. § 1983 (“§ 1983”). See, e.g., Pimentel v. City of 

L.A., 974 F.3d 917, 922 (9th Cir. 2020) (excessive fee claim brought against a 

municipality under § 1983); Blickenstaff v. City of Hayward, 2023 WL 187100, 

at *3 (N.D. Cal. Jan. 13, 2023) (same). Albert has not challenged these 

decisions.

The bankruptcy court held that the State Bar was not amenable to suit 
42

under § 1983 because this statute only covers violation of constitutional 

rights by “persons.” State agencies are not “persons” within the meaning of 

the statute. See Isaacs v. USC Keck Sch. of Med., 853 F. App’x 114, 117 (9th 

Cir. 2021) (citing Maldonado v. Harris, 370 F.3d 945, 951 (9th Cir. 2004)); 

Johnson v. Dep't of Soc. & Health Servs., 800 F. App’x 595 (9th Cir. 2020); 

McReynolds v. Washington, 2021 WL 736927, at *10 (W.D. Wash. Feb. 25, 

2021), aff'd, 2022 WL 16756387 (9th Cir. Nov. 8, 2022).

On appeal, Albert cites Timbs v. Indiana, 139 S. Ct. 682, 687 (2019),

which applied the Eighth Amendment’s Excessive Fines Clause to state 

governments within a civil forfeiture proceeding. Albert also cites Pimentel 

v. City of Los Angeles, 966 F.3d 934, 937-38 (9th Cir.), as amended on denial of 

reh’g, 974 F.3d 917, 920 (9th Cir. 2020), which applied Timbs to a 

municipality in a § 1983 action. But local governments are recognized as 

persons subject to § 1983. Monell v. Dep’t of Social Servs., 436 U.S. 658, 690 

(1978). Neither of these cases involved a state agency like the State Bar.

The bankruptcy court had subject matter jurisdiction, but Albert had 

no claim because the State Bar was not amenable to suit on the claim. The 

court thus did not err when it dismissed these claims.

2. The court had subject matter jurisdiction of Albert’s excessive 

fines claim based on the California Constitution.

The bankruptcy court also dismissed Albert’s excessive fines claim 

under Article 1, Section 17, of the California Constitution based on Civil 

Rule 12(b)(1) for lack of jurisdiction. The State Bar sought dismissal of the 
43

state law claim because Albert failed to allege how the claim was related to 

the core bankruptcy matters raised in the FAC. Albert opposed dismissal 

because she alleged in the FAC that the Consolidated Adversary was a core 

proceeding “within the meaning of 28 USC § 157 and 28 USC § 1334

pursuant to FCP 7001 [sic].” 

Courts ordinarily must examine their subject matter jurisdiction for 

each claim brought. See, e.g., Holdner v. Krietzberg, 2019 WL 1783057, at *4 

(D. Or. Mar. 14, 2019), report and recommendation adopted, 2019 WL 1783044 

(D. Or. Apr. 23, 2019); Gentile Fam. Indus. v. Diatom, LLC, 2015 WL 13917008, 

at *5 (C.D. Cal. Mar. 5, 2015). To establish bankruptcy jurisdiction over a 

particular claim, a plaintiff must prove that the claim arises in the 

bankruptcy case, arises under the Bankruptcy Code, or is related to the 

bankruptcy case. 28 U.S.C. § 1334(b). Albert failed to identify the basis for 

jurisdiction under 28 U.S.C. § 1334(b) or the facts alleged in the FAC 

supporting such jurisdiction. Instead, she argued that the motion must be 

denied because no party had made a motion to have her ancillary state law 

claim heard in state court.

The bankruptcy court dismissed this state law claim because it did 

not arise under the Bankruptcy Code or in a case under the Code. See

Wilshire Courtyard v. Cal. Franchise Tax Bd. (In re Wilshire Courtyard), 729 

F.3d 1279, 1285-87 (9th Cir. 2013). The bankruptcy court also noted that 

Albert had the burden of alleging facts supporting its jurisdiction, but the 

FAC did not contain any facts suggesting that the bankruptcy court had 
44

“related to” jurisdiction over the fourth claim for relief. The bankruptcy 

court rejected the notion that it had “ancillary jurisdiction” over the state 

law claim. It observed that ancillary jurisdiction is permitted to dispose of 

“factually interdependent claims” by a single court. Battleground Plaza v. 

Ray (In re Ray), 624 F.3d 1124, 1135 (9th Cir. 2010) (citing Sea Hawk Seafoods, 

Inc. v. Alaska (In re Valdez Fisheries Dev. Ass’n), 439 F.3d 545, 549 (9th Cir.

2006)). But the court held that nothing in the FAC indicated that the fourth 

claim for relief was factually interdependent with Albert’s dischargeability 

claim, her contempt claim, or her § 525(a) claim.

On appeal, Albert summarily argued that jurisdiction exists because 

the excessive nature of the Disciplinary Costs are interrelated to her claims 

under § 525(a) and § 524. Again, she failed to develop this argument. 

Instead, in her reply brief, she argued that the bankruptcy court had core 

jurisdiction to rule on the allowance or disallowance of the State Bar’s 

proof of claim. She has not effectively challenged the bankruptcy court’s 

discussion of ancillary jurisdiction.

We disagree with the bankruptcy court’s jurisdictional analysis. 

Bankruptcy courts have subject matter jurisdiction over proceedings 

“arising under title 11, or arising in or related to cases under title 11.” 28 

U.S.C. § 1334. A proceeding “arises under” title 11 if it presents claims for 

relief created or controlled by title 11. A proceeding “arises in” a 

bankruptcy case if the claims would have no existence outside of a 

bankruptcy case, even if they are not explicitly created or controlled by title 
45

11. Double Diamond Distrib., Ltd. v. Garman Turner Gordon LLP (In re U.S.A. 

Dawgs, Inc), 657 B.R. 98, 110 (9th Cir. BAP 2024) (citing In re Ray, 624 F.3d at 

1131). “Related to” jurisdiction exists if

the outcome of the proceeding could conceivably have any 

effect on the estate being administered in bankruptcy. . . . An 

action is related to bankruptcy if the outcome could alter the 

debtor’s rights, liabilities, options, or freedom of action (either 

positively or negatively) and which in any way impacts upon 

the handling and administration of the bankrupt estate.

Pacor, Inc. v. Higgins, 743 F.2d 984, 994 (9th Cir. 1984) (cleaned up), partially 

overruled on other grounds by Things Remembered, Inc. v. Petrarca, 516 U.S. 124 

(1995).

We agree that Albert’s constitutional claims do not “arise under” the 

Bankruptcy Code; rather, they arise under the applicable constitutional 

provisions. We also agree that those claims did not “arise in” her 

bankruptcy case, because the same claims could arise in a non-bankruptcy 

setting. But Albert’s claims were “related to” her bankruptcy case because 

they affected the amount of Albert’s nondischargeable obligations and thus 

“could alter [her] rights, liabilities, options, or freedom of action (either 

positively or negatively) . . . .” Id. The bankruptcy court has subject matter 

jurisdiction to determine the amount of any claim against the debtor, 

whether that claim is or is not discharged.

Both Albert and the bankruptcy court went astray when they 

evaluated the relatedness of Albert’s state constitutional claims to the 
46

categories of “core proceedings.” This was incorrect. The court’s subject 

matter jurisdiction turned on the relationship between those claims and 

Albert’s bankruptcy case. Whether those claims were “core proceedings” 

bears on whether the bankruptcy court or the district court may enter final 

judgment on the claims, and does not pertain to either court’s subject 

matter jurisdiction.

Albert’s scattered pleading and ever-changing arguments have 

confused the jurisdictional analysis. But again mindful of the standards 

applied to the State Bar’s motion to dismiss, we must reverse the dismissal 

of Albert’s claims under the California Constitution. We express no opinion 

on any other aspect of those claims, including (1) whether the bankruptcy 

court may or must decline to decide those claims on grounds other than 

subject matter jurisdiction, (2) whether the California Supreme Court’s final 

decisions in the 2017 Suspension Order and the 2019 Suspension Order

have preclusive effect that bars those claims in whole or in part, 

(3) whether the Rooker-Feldman doctrine bars a federal court from 

addressing those claims, or (4) the merits of those claims.

F. The bankruptcy court correctly applied quasi-judicial immunity to 

the Individual State Bar Defendants.

Albert challenges the bankruptcy court’s dismissal of all claims 

against the Individual State Bar Defendants. She named them as 

defendants as to the first claim for declaratory relief and the second claim 

for violations of the automatic stay and discharge injunction. The 
47

bankruptcy court followed our decision in Albert I and held that state bar 

judges, prosecutors, and probation officers are “entitled to absolute quasijudicial immunity under the Civil Rights Act for acts performed in their 

official capacities.” 2019 WL 1594012, at *9. This is not only a correct

statement of law; it is law of the case. See generally Am. Express Travel 

Related Servs. Co. v. Fraschilla (In re Fraschilla), 235 B.R. 449, 454 (9th Cir.

BAP 1999) (explaining legal standards governing law of the case doctrine), 

aff'd, 242 F.3d 381 (9th Cir. 2000) (table).

Albert does not explain how her claims could withstand quasijudicial immunity. In her FAC, she sued the Individual State Bar 

Defendants for: (1) the instigation and prosecution of the disciplinary 

proceedings themselves; (2) the resulting recommendations that led to the 

California Supreme Court’s issuance of the 2017 and 2019 Suspension 

Orders; and (3) the monitoring and reporting associated with Albert’s 

probation as contemplated in those orders. These are prototypical quasijudicial activities that are protected by such immunity. See Hirsh, 67 F.3d at

715 (citing Butz v. Economou, 438 U.S. 478, 511-17 (1978)); Demoran v. Witt, 

781 F.2d 155, 157 (9th Cir. 1985); see also Fort v. Washington, 41 F.4th 1141, 

1144 (9th Cir. 2022) (holding that quasi-judicial immunity extended to the 

administrative act of scheduling a parole hearing by the state’s parole 

board); Sellars v. Procunier, 641 F.2d 1295, 1303 (9th Cir. 1981) (“If an 

official’s role is functionally equivalent to that of a judge, the official will be 
48

granted equivalent immunity.”).

Albert alleges that the Individual State Bar Defendants’ actions were 

motivated by politics, personal animus, or her failure to pay the discharged 

debts. But their motivations are irrelevant. As the Supreme Court has 

explained, “judicial immunity is an immunity from suit, not just from 

ultimate assessment of damages. Accordingly, judicial immunity is not 

overcome by allegations of bad faith or malice, the existence of which 

ordinarily cannot be resolved without engaging in discovery and eventual 

trial.” Mireles v. Waco, 502 U.S. 9, 11 (1991) (citations omitted).9

The bankruptcy court did not commit reversible error when it 

dismissed the Individual State Bar Defendants.

G. The bankruptcy court’s damages findings were not clearly 

erroneous.

Albert argues that the bankruptcy court should have awarded her 

damages for emotional distress and “delay and harassment.” The court 

declined to do so. It explained that Albert provided insufficient evidence 

9 Albert also argues that there could never be quasi-judicial immunity for 

violating a federal court order. She cites Hutto v. Finney, 437 U.S. 678 (1978), and Twin 

Sisters Gun Club v. Emlen, 2018 WL 1335394, at *9 (E.D. Cal. Mar. 15, 2018), in support of 

her argument. Hutto is inapposite. It dealt with the sovereign immunity of state officials 

and whether that immunity insulated them from being held in contempt when they 

violated orders issued by a federal court that was hearing a matter in which the officials 

already were parties. 437 U.S. at 690-91. Twin Sisters Gun Club applied quasi-judicial 

immunity to one of the two individual defendants in that case but analyzed why the 

other defendant was not entitled to a separate and distinct qualified or “good faith”

immunity. 2018 WL 1335394, at *10-11. Neither case addressed quasi-judicial immunity

as it applies to the Individual State Bar Defendants.
49

that, during the 15-day period of the State Bar’s admitted violation of the 

discharge injunction, she suffered compensable damages on either ground. 

It also found that there was insufficient evidence to justify a larger 

damages award for this 15-day period on any other ground. 

Albert does not explain why these findings were clearly erroneous. 

She merely disagrees with the court’s findings. She also cites several cases 

that she maintains support the proposition that she might have incurred 

compensable damages. See Schmitt v. SN Servicing Corp., 2021 WL 3493754, 

at *8-9 (N.D. Cal. Aug. 9, 2021); Copeland v. Kandi (In re Copeland), 441 B.R.

352, 367-68 (Bankr. W.D. Wash. 2010); In re Ramirez, 183 B.R. at 590. None of 

these cases help explain why the bankruptcy court’s damages findings 

were clearly erroneous on this record. Given our review of the record, we 

cannot say that these findings were illogical, implausible, or without 

support in the record.

Albert additionally argues that the bankruptcy court should have 

awarded her at least $125,169.25 in punitive damages. The bankruptcy 

court found that the evidence presented did not justify any punitive 

damages. Once again, Albert has not done anything to demonstrate on 

appeal that this finding was clearly erroneous. Moreover, a bankruptcy 

court has no authority to award punitive damages for contempt other than 

“relatively mild” non-compensatory fines. See Ocwen Loan Servicing, LLC v. 

Marino (In re Marino), 577 B.R. 772, 788–89 & n.12 (9th Cir. BAP 2017), aff'd 

in part, dismissed in part, 949 F.3d 483 (9th Cir. 2020).
50

H. The challenged evidentiary and discovery rulings did not affect the 

outcome of this appeal.

Albert challenges the bankruptcy court’s decision to excuse the State 

Bar’s former counsel, James Chang, from testifying at trial. She also 

disputes the exclusion from trial of some of her expert witnesses. Finally, 

she asserts that the court erroneously denied her motion to compel 

discovery.

The denial of discovery-related motions is not grounds for reversal 

absent a clear showing of prejudice. Kobold v. Good Samaritan Reg'l Med. 

Ctr., 832 F.3d 1024, 1048 (9th Cir. 2016). Similarly, we only will reverse an 

evidentiary ruling “if any error would have been prejudicial to the 

appellant.” Van Zandt v. Mbunda (In re Mbunda), 484 B.R. 344, 351 (9th Cir. 

BAP 2012) (citing Johnson v. Neilson (In re Slatkin), 525 F.3d 805, 811 (9th Cir.

2008)).

Albert has not demonstrated any prejudice arising from the 

bankruptcy court’s evidentiary and discovery rulings. Nor is any evident 

to us in light of our review of the record and our analysis of this appeal. 

Consequently, Albert’s arguments based on the bankruptcy court’s 

evidentiary and discovery rulings do not justify reversal.

I. The bankruptcy court properly denied leave to amend.

In three sentences, Albert argues that the bankruptcy court should 

have granted her leave to amend the portions of the FAC that the 

bankruptcy court dismissed with prejudice. But the trial court is not 
51

obliged to grant leave to amend when amendment would be futile. Ebner v. 

Fresh, Inc., 838 F.3d 958, 968 (9th Cir. 2016) (citing Doe v. United States, 58 

F.3d 494, 497 (9th Cir. 1995)). The bankruptcy court denied leave after 

considering that the First Adversary and the Consolidated Adversary 

already had been pending for three years, Albert already had made two 

full attempts to plead legally sufficient claims for relief, and the dismissed 

claims largely suffered from “substantive” deficiencies. “[W]hen the 

district court has already afforded a plaintiff an opportunity to amend the 

complaint, it has wide discretion in granting or refusing leave to amend 

after the first amendment, and only upon gross abuse will its rulings be 

disturbed.” Rich v. Shrader, 823 F.3d 1205, 1209 (9th Cir. 2016) (cleaned up).

Here, both the First Adversary and the Consolidated Adversary concerned

essentially the same conduct by the State Bar, its officials, and its other 

representatives. Albert never explained how she could amend the FAC to 

cure its defects. The bankruptcy court did not abuse its discretion.

CONCLUSION

For the reasons set forth above, we REVERSE the portions of the 

bankruptcy court’s decision: (1) dismissing Albert’s stay violation claim 

based on the State Bar’s failure to promptly reinstate her license to practice 

law while she was in chapter 13 and its reimposition of the suspension 

after her case was converted to chapter 7; and (2) dismissing her claims 

under the California Constitution. As to those matters, we REMAND for 

further proceedings consistent with this decision. We AFFIRM the 
52

bankruptcy court’s decision in all other respects.

Concurrence begins on next page.
1

FARIS, Bankruptcy Judge, concurring:

I agree with the majority’s result and reasoning. I write separately to 

make three additional points.

I.

In section A.4 of the Discussion, the majority holds that the State Bar 

violated the automatic stay when it reimposed Albert’s conditional 

suspension after the court converted her case from chapter 13 to chapter 7. 

The majority discusses and distinguishes prior decisions of this Panel and 

the Ninth Circuit holding that the automatic stay does not bar enforcement 

of a nondischargeable claim, at least against property that is not property 

of the estate. Watson v. City Nat’l Bank (In re Watson), 78 B.R. 232 (9th Cir. 

BAP 1987); Palm v. Klapperman (In re Cady), 266 B.R. 172 (9th Cir. BAP 2001), 

aff’d, 315 F.3d 1121 (9th Cir. 2003). I agree that those decisions are 

distinguishable, and I also think that they are no longer good law. 

Section 362(a) does not distinguish between dischargeable and 

nondischargeable debts. That section bars (among other things) the 

enforcement of a “claim.” § 362(a)(1), (5), (6). The Bankruptcy Code 

provides a sweeping definition of the term “claim.” § 101(5). The definition 

of “claim” does not even mention, let alone distinguish between, 

dischargeable and nondischargeable obligations. Further, the language of 

§ 523 makes clear that an obligation is a “claim” whether it is dischargeable 

or not. That section makes certain kinds of “debt” nondischargeable. “The 

term ‘debt’ means liability on a claim.” § 101(12). If the word “claim” did 
2

not include nondischargeable obligations, then the reference to “debts” that 

are not “discharged” would be redundant.

It is equally clear that the automatic stay often protects property that 

is not property of the estate. For example, § 362(a)(1) blocks the 

“commencement or continuation . . . of [any] action or proceeding against 

the debtor [on a prepetition claim] or to recover a claim against the debtor 

that arose” prepetition. This section applies regardless of whether the 

claimant seeks recovery from estate or non-estate property. Similarly, 

§ 362(a)(6) bars “any act to collect, assess, or recover a claim against the 

debtor that arose” prepetition. Again, this subsection effectively protects 

property whether it belongs to the estate or not. 

In short, there is no textual support for the argument that the 

automatic stay does not apply to nondischargeable claims. 

In Watson and Cady, this Panel and the Ninth Circuit held that “the 

automatic stay provisions of Section 362 do not preclude the execution of a 

judgment, which has been held by the bankruptcy court to be nondischargeable, upon property of the debtor which is not property of the 

estate.” In re Watson, 78 B.R. at 235; see also In re Cady, 266 B.R. at 176; cf. Cal. 

State Univ. v. Gustafson (In re Gustafson), 111 B.R. 282, 286 (9th Cir. BAP 

1990) (“We therefore determine that the automatic stay applies to preclude 

a creditor’s attempts to collect a claim that is presumed, but not yet 

determined by the bankruptcy court, to be nondischargeable under section 

523(a)(8).”), rev'd on other grounds, 934 F.2d 216 (9th Cir. 1991). Those cases 
3

rely on policy justifications and legislative history, not the language of the 

statute. In Watson, the majority of this Panel was persuaded that there was 

“no valid reason” to give a debtor who has suffered a nondischargeable 

judgment “the opportunity to delay and/or hinder the creditor from 

executing upon post-petition property, which is not property of the 

bankruptcy estate . . . .” 78 B.R. at 234. The Panel also quoted legislative 

history stating that the automatic stay is “one means of protecting the 

debtor’s discharge[,]” id. at 234 (quoting H.R. Rep. No. 95-595 (1978), as 

reprinted in U.S.C.C.A.N. 5787, 6299), and reasoned that “[t]here is a lack of 

logic in allowing a creditor release from a discharge only to hold him in 

place as if he were still affected by the discharge or the prospect thereof[,]”

id. at 235. In Cady, this Panel followed Watson as “binding authority,” 266 

B.R. at 180, and the Ninth Circuit affirmed, simply adopting this Panel’s 

decision, 315 F.3d 1121.

Judge Meyers dissented from the Panel’s decision in Watson, pointing 

out that the language of the statute did not support the majority’s decision.

78 B.R. at 236-37 (Meyers, J., dissenting). In Cady, Judge Berzon dissented 

from the Ninth Circuit’s majority decision, agreeing with Judge Meyers’ 

reasoning in Watson. 315 F.3d at 1122-23 (Berzon, J., dissenting). 

The dissenters were prescient. Almost two decades after Judge 

Berzon wrote her dissent, the Supreme Court unanimously held in City of 

Chicago v. Fulton, 592 U.S. 154 (2021), that the City of Chicago did not 

violate the automatic stay when it retained possession of a vehicle that it 
4

had impounded before the debtor filed a bankruptcy petition. The Court’s 

analysis focused entirely on the language of § 362 (including that section 

prior to an amendment) and a related provision (§ 542(a)). The Court was 

aware that its decision would have negative practical consequences for 

debtors, because Justice Sotomayor explained them in detail in a separate 

opinion. 592 U.S. at 163-64 (Sotomayor, J., concurring). But those 

consequences did not change any justice’s mind. Even Justice Sotomayor 

concurred. 

Fulton makes clear that, when interpreting § 362, we must begin with 

the statute’s language, and our analysis must also end there unless the 

statute is ambiguous. As Judges Berzon and Meyers pointed out, the 

language of § 362 does not support the holding of Watson, Gustafson, or

Cady. I would therefore hold that those decisions are no longer good law. 

This reinforces our unanimous holding that the State Bar violated the 

automatic stay when it reimposed Albert’s suspension upon the conversion 

to chapter 7.

II.

Our partial reversal of the bankruptcy court’s decision may not lead 

to a victory for Albert. 

First, if she is proceeding on a contempt theory, she would have to 

surmount the Taggart standard by proving that there was no “fair ground 

of doubt” that the State Bar’s reinstatement of the suspension would violate 

the automatic stay. See Taggart v. Lorenzen, 139 S. Ct. 1795, 1804 (2019).
5

Given that Watson and Cady were on the books when the State Bar acted, 

this may be an impossible task.

Second, whether she employs a contempt theory or § 362(k), she

would have to prove that she suffered compensable damages due to the 

stay violation. These damages would be limited at best, and might be 

nonexistent, because the State Bar was fully entitled to reimpose the 

suspension when Albert received her discharge. In other words, the State 

Bar jumped the gun by only a few months. Albert would have to show that 

she could have restarted her practice and made it profitable between the 

time the State Bar incorrectly reimposed the suspension (in mid-2018) and 

the date of her discharge (February 26, 2019). 

Third, the bankruptcy court might (or might not) exercise its 

discretionary power to grant the State Bar retroactive relief from the stay. 

See Fjeldsted v. Lien (In re Fjeldsted), 293 B.R. 12, 21 (9th Cir. BAP 2003) (“A 

bankruptcy court has authority to [grant]. . . annulment [of the automatic 

stay] providing retroactive relief, which, if granted, moots any issue as to 

whether the violating sale was void because, then, there would have been 

no actionable stay violation.” (citation omitted)).

III.

We do not condone any of Albert’s conduct. The State Bar charged 

her with very serious professional misconduct, including (in effect) stealing 

money from her clients. Her briefing and oral argument before this Panel 

were incompetent. She richly deserved the suspension and other discipline 
6

that the California Supreme Court imposed. 

There is an irony at the core of this case: if the supreme court had 

imposed an unconditional suspension, or had simply disbarred her, Albert 

would have no recourse under the Bankruptcy Code. Albert has claims 

under the Bankruptcy Code only because the supreme court offered her a 

way to salvage her legal career. Although we hold that the State Bar failed 

(in some relatively minor respects) to comply with the Bankruptcy Code, 

our decision should not meaningfully hinder the crucial work of the State 

Bar in protecting the public from incompetent and unethical attorneys.