Opinion ID: 3064648
Heading Depth: 2
Heading Rank: 2

Heading: Bad faith/willful misconduct

Text: [12] Furthermore, the bankruptcy court made the findings of “bad faith” and “willful misconduct” required for the use of the inherent sanction power. See Dyer, 322 F.3d at 1196. Although the bankruptcy court did not explicitly state that Price’s conduct was performed in “bad faith” or was “willful,” it impliedly did so by finding that his “conduct in this IN THE MATTER OF LEHTINEN 4989 case was outrageously improper, unprofessional and unethical under any reading of California’s ethical standards for attorneys.” See Fink, 239 F.3d at 994 (“[S]anctions are available if the court specifically finds bad faith or conduct tantamount to bad faith.” (emphasis added)); Toombs v. Leone, 777 F.2d 465, 471 (9th Cir. 1985) (holding that explicit findings are not required where record supports a conclusion that the sanctioned attorney acted in bad faith).3 Finally, the evidence adduced at the hearing (e.g., the five times Price solicited debtor to serve as a real estate broker for the sale of her house and the false letter), demonstrates “bad faith” and “willful misconduct.”4 III. N.D. Cal. Civ. R. 11-6 [13] Price argues that, pursuant to N.D. Cal. Civ. R. 11-6, the bankruptcy court should have referred the suspension action to a standing committee. “In the federal system there is no uniform procedure for disciplinary proceedings. The individual judicial districts are free to define the rules to be followed and the grounds for punishment.” Weissman v. Quail Lodge, Inc., 179 F.3d 1194, 1198 (9th Cir. 1999) (internal quotations omitted). In the Northern District of California, the bankruptcy court is empowered to supervise and discipline attorneys pursuant to N.D. Cal. Bankr. R. 1001-2, which incorporates N.D. Cal. 3 While Dyer notes that “[b]efore imposing sanctions under its inherent sanctioning authority, a court must make an explicit finding of bad faith or willful misconduct,” 322 F.3d at 1196 (emphasis added), the Dyer court cited Fink for this proposition, and as explained above, Fink permits the imposition of sanctions without an explicit finding, 239 F.3d at 994. 4 It is unclear “whether the bankruptcy court must find bad faith by clear and convincing evidence or under a preponderance of the evidence standard.” Dyer, 322 F.3d at 1197 n.20 (noting that this “question [has] not yet [been] resolved in this circuit”). We need not decide this question today because here there is clear and convincing evidence of “bad faith” in this case. 4990 IN THE MATTER OF LEHTINEN Civ. R. 11-1 through 11-9. N.D. Cal. Civ. R. 11-6(a) (2004), titled “Discipline,” provides: (a) General. In the event that a Judge has cause to believe that an attorney has engaged in unprofes- sional conduct, the Judge may do any or all of the following: (1) Initiate proceedings for civil or criminal contempt under Title 18 of the United States Code and Rule 42 of the Federal Rules of Criminal Procedure; (2) Impose other appropriate sanctions; (3) Refer the matter to the appropriate disciplinary authority of the state or jurisdiction in which the attorney is licensed to practice; (4) Refer the matter to the Court’s Standing Committee on Professional Conduct; or (5) Refer the matter to the Chief Judge for her or him to consider whether to issue an order to show cause under Civ. L.R. 11-7. The bankruptcy court apparently imposed Price’s suspension based on subsection (2), which authorizes “other appropriate sanctions.” See N.D. Cal. Civ. R. 11-6(a)(2). [14] Although the BAP recommends that matters involving attorney discipline be referred to the standing committee, Crayton, 192 B.R. at 978, Price’s argument ignores the plain language of N.D. Cal. Civ. R. 11-6(a), which states that its procedures are discretionary. The Rule provides available measures the judge “may” take, not must take, if she has cause to believe an attorney has engaged in unprofessional conduct. IN THE MATTER OF LEHTINEN 4991