Court Opinion

ID: 7796836
Source: CourtListenerOpinion
Date Created: 2022-08-01 17:00:46.519229+00
Date Added: 2024-06-11T16:28:31.823898
License: Public Domain

FOR PUBLICATION

    UNITED STATES COURT OF APPEALS
         FOR THE NINTH CIRCUIT

 ANTHONY J. KASSAS,                            No. 21-55900
         Plaintiff-Appellant,
                                                D.C. Nos.
                  v.                        2:19-bk-24457-ER
                                            2:21-ap-01021-ER
 STATE BAR OF CALIFORNIA,
         Defendant-Appellee.                     OPINION

      Appeal from the United States Bankruptcy Court
           for the Central District of California
      Ernest M. Robles, Bankruptcy Judge, Presiding

             Argued and Submitted April 12, 2022
                  San Francisco, California

                        Filed August 1, 2022

Before: Jay S. Bybee and Ryan D. Nelson, Circuit Judges,
           and Jed S. Rakoff,* District Judge.

                       Opinion by Judge Bybee

    *
      The Honorable Jed S. Rakoff, United States District Judge for the
Southern District of New York, sitting by designation.
2            KASSAS V. STATE BAR OF CALIFORNIA

                            SUMMARY**

                             Bankruptcy

    The panel affirmed in part and reversed in part the
bankruptcy court’s judgment in an adversary proceeding in
which the bankruptcy court found nondischargeable
(1) indebtedness arising from a disbarred attorney’s
obligation to reimburse the State Bar for payments made by
the Bar’s Client Security Fund to victims of his misconduct
and (2) the costs for the disciplinary proceedings conducted
against the attorney, a Chapter 7 debtor.

    Reversing in part, the panel held that the indebtedness
arising from the attorney’s obligation to reimburse the State
Bar for the payments made to victims of his misconduct was
not excepted from discharge under 11 U.S.C. § 523(a)(7),
which provides that a debtor is not discharged from any debt
that “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.” Considering the totality of the Client
Security Fund program, the panel concluded that any
reimbursement to the Fund was payable to and for the benefit
of the State Bar and was compensation for the Fund’s actual
pecuniary loss in compensating the victims for their actual
pecuniary losses.

   Affirming in part, the panel held that, pursuant to In re
Findley, 593 F.3d 1048 (9th Cir. 2010), the costs associated

    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
           KASSAS V. STATE BAR OF CALIFORNIA                3

with the attorney’s disciplinary         proceedings    were
nondischargeable under § 523(a)(7).

                        COUNSEL

Matthew D. Resnik (argued) and M. Jonathan Hayes, Resnik
Hayes Moradi LLP, Encino, California, for Plaintiff-
Appellant.

Suzanne C. Grandt (argued), Vanessa L. Holton, and Robert
G. Retana, Office of General Counsel, State Bar of
California, San Francisco, California, for Defendant-
Appellee.

                         OPINION

BYBEE, Circuit Judge:

    Appellant Anthony J. Kassas, a Chapter 7 debtor, was
disbarred by the California Supreme Court in 2014 for
violations of the State Bar Rules of Professional Conduct and
the California Business and Professions Code. The California
Supreme Court ordered Kassas to pay restitution to 56 former
clients, costs for his disciplinary proceedings, and any funds
that would eventually be paid out by the State Bar’s Client
Security Fund (CSF) to victims of his conduct. Kassas
subsequently filed for Chapter 7 bankruptcy and received a
discharge.

    Kassas sought a declaration that all of his debts to the
State Bar were discharged in the bankruptcy. The State Bar
argued that Kassas’s disciplinary costs and reimbursements
4          KASSAS V. STATE BAR OF CALIFORNIA

to the CSF were excepted from discharge pursuant to
11 U.S.C. § 523(a)(7) as “a fine, penalty, or forfeiture
payable to and for the benefit of a governmental unit, and . . .
not compensation for actual pecuniary loss.” The bankruptcy
court granted summary judgment for the State Bar. In re
Kassas, 631 B.R. 469 (Bankr. C.D. Cal. 2021). The court
concluded that while the restitution payments were
discharged, the disciplinary costs and reimbursements paid
from the CSF were not. Finding that the dischargeability of
reimbursements from the CSF is a matter of public
importance, the bankruptcy court certified the following
question to us: “Is indebtedness arising from a disbarred
attorney’s obligation to reimburse the State Bar for payments
made by the CSF to victims of that attorney’s misconduct
while practicing law non-dischargeable under 11 U.S.C.
§ 523(a)(7)?” In re Kassas, 2021 WL 2446270, at *2 (Bankr.
C.D. Cal. June 15, 2021). We answer that such indebtedness
is dischargeable, and we reverse the judgment in part.

        I. BACKGROUND AND PROCEEDINGS

A. Background

    1. The Statutory Framework

    In 1971, the California Assembly created a CSF “to
relieve or mitigate pecuniary losses caused by the dishonest
conduct of licensees of the State Bar . . . arising from or
connected with the practice of law.” Cal. Bus. & Prof. Code
§ 6140.5(a) (West 2011). Under the California State Bar’s
CSF Rules, “[t]o qualify for reimbursement, an applicant
must establish a loss of money or property that was received
by an active attorney who was acting as an attorney or in a
fiduciary capacity customary to the practice of law.” Cal.
           KASSAS V. STATE BAR OF CALIFORNIA                 5

State Bar Rule 3.430(A). “The loss must have been caused
by dishonest conduct” and the attorney must have “been
disbarred, disciplined, or voluntarily resigned from the State
Bar; died or been adjudicated mentally incompetent; or . . .
become a judgment debtor of the applicant in a contested
proceeding or been convicted of a crime.” Id. at 3.430(B),
(C), 3.432(A). Decisions “to deny or limit reimbursement”
are ultimately made by the CSF Commission, a five-member
body. Id. at 3.421(A), 3.430(D).

    When an application is received, the CSF Commission
can investigate the application “as it deems appropriate,”
including requiring the submission of declarations, holding
evidentiary hearings, and compelling witnesses and
documents by subpoena. Id. at 3.441(A), (C). The
Commission’s decision to reimburse an applicant “must be
based on a preponderance of the evidence.” Id. at 3.441(I).
The maximum reimbursement allowed per applicant is
$100,000. Id. at 3.434(A).

    The CSF Commission must serve a Notice of Intention to
Pay on the attorney responsible for the conduct in an
application. Id. at 3.442(C), 3.445(A). The attorney has
thirty days to submit an objection. Id. at 3.442(D). If an
objection is received, the Commission will conduct further
review, and if no objection is received, the CSF may pay the
applicant. Id. The CSF Commission must also serve a notice
of its Tentative Decision, which includes a statement of the
findings or reasons on which the decision is based, to the
attorney and applicant, who have thirty days to lodge a
written objection. Id. at 3.443(A), (B), 3.445(B). Only after
the parties have an opportunity to submit objections, requests,
or declarations in response to the Tentative Decision can the
CSF Commission issue a Final Decision. Id. at 3.444(A). An
6            KASSAS V. STATE BAR OF CALIFORNIA

attorney or applicant can petition for review of the CSF’s
Final Decision in California Superior Court. Cal. State Bar
Rule 3.450; see also State Bar of Cal. v. Statile, 86 Cal. Rptr.
3d 72, 81 (Ct. App. 2008).

     Pursuant to the statute creating the CSF, once the CSF
makes a payment, “the State Bar is subrogated, to the extent
of that payment, to the rights of the applicant against any
person or persons who . . . caused the pecuniary loss.” Cal.
Bus. & Prof. Code § 6140.5(b). The statute further provides
that

         [a]ny attorney whose actions have caused the
         payment of funds to a claimant from the
         Client Security Fund shall reimburse the fund
         for all moneys paid out as a result of his or her
         conduct with interest, in addition to payment
         of the assessment for the procedural costs of
         processing the claim, as a condition of
         continued practice.

Id. § 6140.5(c).1 For an attorney who is disbarred “the
reimbursed amount, plus applicable interest and costs, shall
be paid as a condition of reinstatement of membership.” Id.
And “[a]ny assessment against an attorney . . . that is part of
an order imposing a public reproval on a member or is part of
an order imposing discipline or accepting a resignation with
a disciplinary matter pending, may also be enforced as a
money judgment.” Id. § 6140.5(d).

    1
      The cited version was in effect from January 2, 2012, until
December 31, 2018, the time period covering Kassas’s disciplinary
proceedings. All subsequent citations are to this version of the statute.
             KASSAS V. STATE BAR OF CALIFORNIA                         7

    2. The Facts

    Kassas committed numerous violations of the State Bar
Rules of Professional Conduct and California’s Business and
Professions Code. In January 2014, the California Supreme
Court disbarred Kassas. As part of its disciplinary order, the
Supreme Court ordered Kassas to make restitution payments
to 56 individuals for a total of $201,706, plus ten percent
interest per year. The California Supreme Court also awarded
costs to the State Bar for the disciplinary proceedings in the
amount of $61,122.27. Finally, the California Supreme Court
also specified that “[a]ny restitution owed [by Kassas] to the
Client Security Fund is enforceable as provided in Business
and Professions Code section 6140.5, subdivisions (c) and
(d).”

    The CSF made 51 payments to individuals named as
restitution recipients in the CSC’s order and 305 payments to
individuals not named in the order.2 In total, the CSF paid
$1,367,978.12 to Kassas’s victims. The typical victim
received between $3,000 and $6,000. As of April 2021,
including interest and processing costs, Kassas owes the CSF
$2,090,096.32.

     2
       The California Supreme Court named 56 victims in Kassas’s
disbarrment order. The State concedes that the restitution owed directly
to these individuals is dischargeable. Kassas did not reimburse those
former clients, and 51 of the 56 filed for compensation from the CSF. See
In re Kassas, 631 B.R. at 470. The amount Kassas owed to 51 of those
individuals is subsumed within the money paid to the 356 claimants. The
State’s restitution order remained binding until the debt was discharged.
Discharge voids the restitution order and prevents a double recovery by
the 51 individuals who obtained reimbursement through the CSF.
8          KASSAS V. STATE BAR OF CALIFORNIA

B. The Proceedings Below

   In December 2019, Kassas filed for Chapter 7 bankruptcy.
He received a discharge in March 2020. In January 2021,
Kassas filed an adversary proceeding in bankruptcy court
seeking a declaration that all debts listed in his complaint
were discharged in the bankruptcy. The State Bar moved to
dismiss the complaint, but the bankruptcy judge converted the
motion into a motion for summary judgment and ordered
supplemental briefing.

    In a published order, the bankruptcy court held that some
debts associated with his disciplinary proceedings were
dischargeable, while others were not. Three separate debts
were the subject of the bankruptcy court’s order. 631 B.R.
469. First, the bankruptcy court held that the restitution the
California Supreme Court ordered Kassas to pay 56 former
clients—totaling $201,706 plus interest—was discharged as
debt. Id. at 471. The bankruptcy court reasoned that the
restitution payments were not a debt “payable to and for the
benefit of a government unit,” and thus did not come within
§ 523(a)(7). Id. at 472. The State Bar did not dispute this
ruling. Id. at 471 & n.5; see supra n.2. Second, the court
held that the $61,112 in disciplinary costs was not discharged
under our decision in In re Findley, 593 F.3d 1048, 1054 (9th
Cir. 2010). 631 B.R. at 471. Kassas acknowledged that the
bankruptcy court’s judgment on those costs was proper under
Findley, although he preserved his option to challenge
Findley in en banc proceedings. Id. at 471 & n.6. Third, the
bankruptcy court determined that Kassas’s debts owed to the
State Bar for restitution to persons not named in the Supreme
Court’s order—more than $2 million—were
nondischargeable under 11 U.S.C. § 523(a)(7). The court
reasoned that the latter payments to the CSF are “a penalty
           KASSAS V. STATE BAR OF CALIFORNIA                  9

imposed in furtherance of the State’s interest in punishing and
rehabilitating errant attorneys, rather than compensation for
actual pecuniary loss.” Id. at 474. At the same time, the
bankruptcy court recognized that the “[t]he Ninth Circuit has
not determined whether debt owed to the Client Security
Fund is nondischargeable under § 523(a)(7).” Id. at 472
(citing In re Albert-Sheridan, 960 F.3d 1188, 1194 n.5 (9th
Cir. 2020) (stating that the issue of the dischargeability of
reimbursements to the CSF was not before the court)). But
the court determined that the primary purpose of making
attorneys reimburse the CSF is rehabilitative not
compensatory. Id. at 474. The bankruptcy court certified a
direct appeal to this court, pursuant to 28 U.S.C.
§ 158(d)(2)(A), because the judgment “involves a matter of
public importance” and “involves a question of law as to
which there is no controlling decision of the court of appeals
for the circuit.” In re Kassas, 2021 WL 2446270, at *2
(Bankr. C.D. Cal. June 15, 2021) (quoting 28 U.S.C.
§ 158(d)(2)(A)(i)). We granted permission to appeal pursuant
to § 158(a).

               II. STANDARD OF REVIEW

     We review de novo the bankruptcy court’s decision
regarding dischargeability of a debt. See In re Scheer,
819 F.3d 1206, 1209 (9th Cir. 2016). “Because a
fundamental policy of the Bankruptcy Code is to afford
debtors a fresh start, ‘exceptions to discharge should be
strictly construed against an objecting creditor and in favor of
the debtor.’” Id. (quoting In re Riso, 978 F.2d 1151, 1154
(9th Cir. 1992)).
10         KASSAS V. STATE BAR OF CALIFORNIA

                      III. ANALYSIS

    We have two issues before us. The first issue is the
question certified by the bankruptcy court regarding the
dischargeability of reimbursement owed the CSF for
payments to Kassas’s former clients. The second issue relates
to the dischargeability of the costs of the proceedings, which
we held nondischargeable in In re Findley, 593 F.3d at 1054.

A. Payments From the CSF Are Dischargeable Under
   § 523(a)(7)

    A discharge in bankruptcy under Chapter 7 releases the
debtor from personal liability for pre-bankruptcy debts.
Section § 523 of Title 11 exempts certain debts from
discharge. In this case, the State Bar claims that Kassas’s
obligation to reimburse the CSF is exempt from discharge
under § 523(a)(7). That section provides:

       an individual debtor [is not discharged] from
       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 . . . .

11 U.S.C. § 523(a)(7). We have understood § 523(a)(7) to
encompass three separate elements, each of which must be
satisfied before a debt is nondischargeable. That is, the
nondischargeable debt “must (1) be a fine, penalty, or
forfeiture; (2) be payable to and for the benefit of a
governmental unit; and (3) not constitute compensation for
           KASSAS V. STATE BAR OF CALIFORNIA                11

actual pecuniary costs.” In re Albert-Sheridan, 960 F.3d at
1193; see also Kelly v. Robinson, 479 U.S. 36, 51 (1986).

    Only two of the three elements are in play here. Neither
party disputes that the State Bar is a governmental entity. See
Cal. Const. art. VI, § 9 (“The State Bar of California is a
public corporation.”); see also Keller v. State Bar of Calif.,
496 U.S. 1, 11–13 (1990); Hirsh v. Justices of the Sup. Ct.,
67 F.3d 708, 715 (9th Cir. 1995). Thus, we need only
determine whether reimbursement to the CSF is “a fine,
penalty, or forfeiture” and not “compensation for actual
pecuniary loss.” 11 U.S.C. § 523(a)(7). The question of
when restitution may be considered a fine or penalty has been
a difficult question. See Kelly, 479 U.S. at 52 (holding “a
criminal judgment that takes the form of restitution” is within
“the penal goals of the State” and is nondischargeable).

    We have had our own back-and-forth over the nature of
costs imposed in attorney disciplinary matters. In In re
Taggart, 249 F.3d 987 (9th Cir. 2001), we held that the costs
of attorney disciplinary proceedings in California were “not
penal in nature.” Id. at 994. In response to Taggart,
California amended the statute requiring the payment of such
costs and specified that such costs are “penalties . . . to
promote rehabilitation and to protect the public.” Cal. Bus.
& Prof. Code § 6086.10(e). In In re Findley, we revisited the
question of disciplinary costs. 593 F.3d 1048 (9th Cir. 2010).
We concluded that the amendment made clear that California
“enacted attorney disciplinary costs to serve penal and
rehabilitative ends [and] thus undermines the result in
Taggart.” Id. at 1054. After Findley, such costs are
nondischargeable in bankruptcy. See also In re Scheer,
819 F.3d at 1211(holding that the State Bar’s attempt to
enforce an arbitration award in favor of Scheer’s former
12         KASSAS V. STATE BAR OF CALIFORNIA

client was “not a fine or penalty” but “purely compensatory”
and not subject to § 523(a)(7)).

     We do not need to reach the question whether the
California Supreme Court’s order that Kassas repay the CSF
is a fine or penalty, because we conclude that the restitution
payments at issue here are “compensation for actual
pecuniary loss.” In re Albert-Sheridan, 960 F.3d at 1193 n.3
(“Because the discovery sanctions do not meet the
governmental unit or non-compensatory elements, we need
not address whether they are also fines, penalties, or
forfeitures under the Code.”). As we discuss below, at every
step of the CSF process, the State Bar is focused on
compensating victims for their actual pecuniary losses or
seeking compensation for the CSF’s actual payments.

    First, the stated purpose of the CSF is “to relieve or
mitigate pecuniary losses caused by the dishonest conduct of
active members of the State Bar.” Cal. Bus. & Prof. Code
§ 6140.5(a) (emphasis added). The CSF has all the hallmarks
of a secondary, public insurance program overseen by an
administrative agency. See State Bar Rule 3.434(B)(2)
(excluding reimbursement for “a loss covered by any
indemnity, such as insurance, fidelity guarantee, or bond”).
The State Bar’s rules limit reimbursement to “loss of money
or property that was received by an active attorney” and
excludes other damages, including interest and consequential
losses. Id. at 3.430(A), 3.434(B). The amount of pecuniary
loss is determined after a deliberative process overseen by the
CSF Commission. Id. at 3.421(A). Upon application by a
putative victim, the Commission makes an initial
determination, called a Notice of Intention to Pay. Id.
at 3.442(A). The attorney must be served with the Notice and
given an opportunity to contest the claim, including at an oral
           KASSAS V. STATE BAR OF CALIFORNIA                 13

hearing. Id. at 3.442(D), 3.443(B). Counsel to the CSF issues
a tentative decision, which may be appealed to the CSF
Commission. Any final decision of the Commission must be
in writing. Id. at 3.444(B)(1). That decision may be appealed
to California Superior Court. Id. at 3.450.

    Second, once the CSF has made payment to a victim, the
attorney’s obligation is to “reimburse the fund for all moneys
paid out.” Cal. Bus. & Prof. Code § 6140.5(c) (emphasis
added). That obligation distinguishes these payments from
fines and penalties because they are reimbursement for
victims’ actual pecuniary loss. Although fines and penalties
such as restitution to crime victims “may be calculated by
reference to the amount of harm the offender has caused,”
Kelly, 479 U.S. at 52, criminal restitution does not necessarily
demand the precision imposed by California’s CSF scheme.
As the Supreme Court in Kelly observed, some states “do[]
not require imposition of restitution in the amount of the
harm caused. Instead [they may] provide[] for a flexible
remedy tailored to the defendant’s situation.” Id. at 53. The
CSF, by contrast, requires attorneys to reimburse the CSF
only for the amount the CSF paid the attorney’s clients, an
amount limited to actual “pecuniary loss.” Cal. Bus. & Prof.
Code § 6140.5(b). That makes the reimbursements—whether
by the CSF to the client, or by the attorney to the CSF—more
in the nature of the arbitration fee award at issue in In re
Scheer—an award we described as “purely compensatory.”
In re Scheer, 819 F.3d at 1211.

    Finally, reinforcing the idea that the CSF is a form of
public insurance, the statute enforces the State Bar’s right to
reimbursement by granting the State Bar a right of
“subrogat[ion], to the extent of that payment, to the rights of
the applicant.” Cal. Bus. & Prof. Code § 6140.5(b).
14         KASSAS V. STATE BAR OF CALIFORNIA

Subrogation is “the substitution of another person in place of
the creditor or claimant to whose rights he or she succeeds in
relation to the debt or claim.” Fireman’s Fund Ins. Co. v.
Maryland Casualty Co., 77 Cal. Rptr. 2d 296, 302 (Ct. App.
1998). “In the insurance context, subrogation takes the form
of an insurer’s right to be put in the position of the insured for
loss that the insurer has both insured and paid.” State Farm
Gen. Ins. Co. v. Wells Fargo Bank, N.A., 49 Cal. Rptr. 3d
785, 790 (Ct. App. 2006). Thus, when an insurance company
is subrogated to the rights of its insured, it “step[s] into the
shoes of the insured and assert[s] the insured’s rights against
the third party.” Progressive West Ins. Co. v. Sup. Ct.,
37 Cal. Rptr. 3d 434, 441 (Ct. App. 2006). The insurer
“cannot acquire by subrogation anything to which the insured
has no rights, and may claim no rights which the insured does
not have.” Transcon. Ins. Co. v. Ins. Co. of Penn., 56 Cal.
Rptr. 3d 491, 498 (Ct. App. 2007) (internal quotation marks
and citations omitted). Although there are some technical
differences between subrogation and reimbursement, where
the statute creating the CSF uses both terms, we must
conclude that “both the subrogation rights and reimbursement
rights . . . fall within the rubric of subrogation.” 21st Cent.
Ins. Co. v. Sup. Ct., 213 P.3d 972, 976 n.3 (Cal. 2009).
Accordingly, the CSF is limited—both by its organic statute
and by long-standing principles of subrogation—to
recovering the “actual pecuniary costs,” 11 U.S.C.
§ 523(a)(7), of the “pecuniary losses caused by the dishonest
conduct of licensees of the State Bar,” Cal. Bus. & Prof. Code
§ 6140.5(a).

    Considering the totality of the CSF program, even if
reimbursement serves some penal or rehabilitative purpose,
we conclude that any reimbursement to the CSF is payable to
and for the benefit of the State bar and is compensation for
           KASSAS V. STATE BAR OF CALIFORNIA               15

the CSF’s actual pecuniary loss. There is a certain symmetry
in our conclusion. The State Bar did not object to the
bankruptcy court’s conclusion that the reimbursement Kassas
owed 56 of his former clients was subject to discharge. In re
Kassas, 631 B.R. at 470–71. The State Bar only objected to
discharge of Kassas’s debt to the CSF, which reimbursed an
additional 305 of Kassas’s clients. Id. Our conclusion means
that any debt that Kassas owes his clients and is obligated to
pay either (1) directly to them or (2) to the CSF because the
CSF has made payments to his clients is subject to discharge
in bankruptcy. In other words, the dischargeability of
Kassas’s debt does not turn on whether the CSF decides to
step in to compensate his former clients and then seek
subrogation against him. Were we to conclude otherwise,
Kassas could obtain a discharge for debts he owed directly to
56 of his clients but not for debts owed to the 305 of his
clients compensated by the CSF.

    We in no way disparage the laudable and important
service performed by the CSF. Our decision does not relieve
Kassas of his failings as a member of the California Bar. See
In re Scheer, 819 F.3d at 1212. Our conclusion is controlled
by § 523(a)(7).

    In sum, we answer the question certified by the
bankruptcy court: Indebtedness arising from a disbarred
attorneys’ obligation to reimburse the State Bar for payments
made by the CSF to victims of that attorney’s misconduct are
not excluded from discharge under§ 523(a)(7). The judgment
of the bankruptcy court will be reversed on this issue.
16         KASSAS V. STATE BAR OF CALIFORNIA

B. Disciplinary Costs Are Dischargeable Under § 523(a)(7)

    Kassas also appeals the bankruptcy court’s judgment
holding the costs associated with his disciplinary proceedings
nondischargeable. Kassas acknowledges that the bankruptcy
court was bound by our decision in In re Findley. We are
also bound by that decision. A panel can only depart from
our own precedent “if a subsequent Supreme Court opinion
‘undercut[s] the theory or reasoning underlying the prior
circuit precedent in such a way that the cases are clearly
irreconcilable.’” In re Nichols, 10 F.4th 956, 961 (9th Cir.
2021) (alteration in original) (quoting Miller v. Gammie,
335 F.3d 889, 900 (9th Cir. 2003) (en banc)). No such
intervening precedent or change to the statute exists here.
Thus, we have no occasion to reconsider In re Findley. See
In re Albert-Sheridan, 960 F.3d at 1192 (refusing to
reconsider In re Findley in holding that debt to the State Bar
for the costs of attorney discipline proceedings is
nondischargeable). As a result, in accordance with the clear
directive of In re Findley, we affirm the bankruptcy court’s
finding that Kassas’s disciplinary costs of $61,122.27 were
not discharged in his bankruptcy. See 593 F.3d at 1054. If
Kassas wishes to pursue this issue, he must do so through a
petition for rehearing en banc.

                    IV. CONCLUSION

    We reverse the bankruptcy court’s judgment that an
obligation to reimburse the State Bar for payments by the
CSF is nondischargeable under 11 U.S.C. § 523(a)(7). We
affirm the bankruptcy court’s judgment, holding that
Kassas’s disciplinary costs were not discharged.

     AFFIRMED IN PART, REVERSED IN PART.