[00:00:00] Speaker 02:
All right, good morning.

[00:00:01] Speaker 02:
On this matter, state of Nevada versus, and can you tell me how to pronounce your last name?

[00:00:06] Speaker 01:
Yeah, it's Hoagie, like a sandwich.

[00:00:09] Speaker 02:
Oh, I apologize.

[00:00:11] Speaker 02:
For Wikey Wick?

[00:00:14] Speaker 02:
Wike.

[00:00:15] Speaker 02:
Wike?

[00:00:15] Speaker 02:
Okay, thank you.

[00:00:16] Speaker 02:
State of Nevada, State Bar of Nevada versus White, case number 24-4402.

[00:00:21] Speaker 02:
Each side will have 15 minutes.

[00:00:25] Speaker 02:
If appellants would like to reserve time for rebuttal, please be aware that you are responsible for keeping track of your time, but I would like to know if you are going to reserve time.

[00:00:33] Speaker 01:
Yes, I would like to reserve three minutes.

[00:00:35] Speaker 01:
Three minutes.

[00:00:36] Speaker 02:
Okay, Mr. Hoge, go ahead.

[00:00:37] Speaker 02:
You may begin whenever you're ready.

[00:00:39] Speaker 01:
Thank you.

[00:00:40] Speaker 01:
May it please the court, Daniel Hoge, representing the State Bar of Nevada.

[00:00:45] Speaker 01:
The issue before you is whether disciplinary costs imposed in attorney discipline pursuant to Nevada Supreme Court Rule 120 are dischargeable in bankruptcy under 11 USC 523A7.

[00:01:01] Speaker 01:
The bankruptcy court ruled that these were not dischargeable.

[00:01:05] Speaker 01:
The bankruptcy appellate court then held that these costs were compensatory and dischargeable, reversing the bankruptcy court.

[00:01:14] Speaker 01:
We urge you to reverse.

[00:01:17] Speaker 01:
For a summary of the underlying misconduct, I just wanted to clear up maybe some misunderstandings.

[00:01:24] Speaker 01:
This is, you can read from the Nevada's Supreme Court's second suspension order in second ER 56 and 57.

[00:01:33] Speaker 01:
Says, Wike acted knowingly as he made numerous small transfers of client property to his operating and personal account.

[00:01:42] Speaker 01:
Then reading further on, Wyck knowingly converted client funds to benefit himself.

[00:01:48] Speaker 01:
The baseline sanction before consideration of aggravating and mitigating circumstances is disbarment.

[00:01:55] Speaker 01:
And the reason that's important is because the Supreme Court of Nevada typically follows the ABA model rules, and the ABA standards recommend disbarment in a case such as this.

[00:02:05] Speaker 01:
The reason that the Supreme Court of Nevada did not disbar Mr. Wyck is because it crafted a package, a disciplinary package, that it felt like could be more rehabilitative and more deterring.

[00:02:20] Speaker 01:
It noted that Mr. Wyck had paid clients, although it was not pleased, and this is quoting directly from the order again, his insistence that his misconduct is not serious was an aggravating factor.

[00:02:33] Speaker 03:
I think we understand the underlying attorney conduct, but the more difficult question really is this interplay between the rules, 120 and 102.

[00:02:47] Speaker 01:
Then the bankruptcy code right and the only reason again I bring that up is because of the package And that's that's why it's so important is understanding that this is a tool in the package Disciplinary cost is one of the tools and if you take away this tool then all you're left with is either a longer suspension or disbarment

[00:03:08] Speaker 03:
And so... Well, that may be the case.

[00:03:10] Speaker 03:
I mean, here's my specific question.

[00:03:14] Speaker 03:
I know you're familiar with the Reed case in Nevada.

[00:03:20] Speaker 03:
And there, the court's pretty clear that if you have a suspension or disbarment, you can't have a fine.

[00:03:29] Speaker 03:
And then it's talking about, you know, contrary to 102 and the purpose of attorney discipline.

[00:03:39] Speaker 03:
Then you get to rule 120, which is mandatory.

[00:03:45] Speaker 03:
And if it's mandatory, how can it be a penal sanction in a case where there is suspension or disbarment?

[00:03:57] Speaker 03:
I mean, it's a collision between those two principles.

[00:04:00] Speaker 03:
And so it seems to me that I appreciate that the bar created a package that it felt was appropriate.

[00:04:08] Speaker 03:
But the costs assessed under 120, which are mandatory, couldn't be a fine or real sanction if you read it in conjunction with rule 102 and the read case.

[00:04:24] Speaker 03:
So can you explain how you get out of that conundrum?

[00:04:28] Speaker 01:
Sure sure I wouldn't know that historically in attorney discipline and this isn't just Nevada in most states The the monetary sanctions are usually costs and costs are pretty high Very rarely and even in California you notice that they recently added a provision for fines Nevada actually has a provision for fine, but it's never used and

[00:04:52] Speaker 01:
They just don't we don't find attorneys.

[00:04:55] Speaker 01:
It's almost always cost is how we obtain the monetary sanctions But again it goes to the purpose of the rule and I wouldn't clarify this though under Supreme Court rule 120 It says the costs are assessed by the panel and the court in full or part So it is discretionary

[00:05:12] Speaker 01:
Look at the cost they will look at the discipline overall and there have been times where costs have been waived or reduced and so They're not automatic the in fact some of them aren't even tied to actual costs, but the what about the word mandatory Under rule 120 the

[00:05:36] Speaker 01:
It's mandatory, but then there's discretion in how much you The mandatory portion is for a suspension the $2,500 and so that's the 2500 for for example for reprimand It's 1500 for suspension is 2500 that's mandatory, but it's not tied to an actual cost So that portion is mandatory, but it's flat right

[00:06:01] Speaker 04:
In this case, essentially, Mr. Wiecki was ordered, he owed $21,138.15, which is the figure we're dealing with here in cost, and then there were two mandatory $2,500 suspension fees, correct?

[00:06:16] Speaker 01:
I believe that the the 21,000 total includes 2,500 for the first suspension and 2,500 for the second suspension so it's actually 16,000 roughly in actual costs and then 5,000 for those two suspensions so there were some there was clearly some figures that were For compensation not for penalty yes most of that would be the transcript for the hearing that's the largest expense and

[00:06:45] Speaker 01:
And the reason why these aren't Dischargeable if you look at 523 a7 there's three prongs right and the first prong is is it a penalty and Is it a fine penalty or forfeiture is how the statute reads right exactly?

[00:07:04] Speaker 01:
We just assume that the forfeiture isn't really in play fine you could probably argue some of this is a fine, but I think the most apt

[00:07:13] Speaker 01:
that word is penalty.

[00:07:16] Speaker 01:
And if you look at the definition, Black's law dictionary says a penalty is punishment for wrongdoing.

[00:07:22] Speaker 01:
And so that's the key figure.

[00:07:24] Speaker 04:
In terms of 523A7, it is not dischargeable, one, if it's a fine penalty or forfeiture.

[00:07:32] Speaker 04:
Then secondarily, it is payable to and for the benefit of the governmental unit.

[00:07:36] Speaker 04:
And thirdly,

[00:07:37] Speaker 04:
It is not compensation for actual pecuniary costs, those three factors, correct?

[00:07:43] Speaker 01:
Correct, correct.

[00:07:45] Speaker 01:
Yeah, and so when you look at it, you ask yourself, is it a penalty?

[00:07:49] Speaker 01:
Yes, because it's a punishment for wrongdoing.

[00:07:54] Speaker 01:
But for Mr. Weich's misconduct, he would not have been assessed these costs.

[00:07:58] Speaker 01:
So it is clearly tied to the misconduct.

[00:08:01] Speaker 01:
The misconduct triggers this, and it is punishment for that misconduct.

[00:08:05] Speaker 04:
It totally swallows up the matter of it.

[00:08:07] Speaker 04:
It is not compensation for actual pecuniary cost.

[00:08:10] Speaker 01:
Right.

[00:08:10] Speaker 01:
Well, I haven't gotten to the third prong yet, though.

[00:08:12] Speaker 01:
I agree.

[00:08:12] Speaker 01:
I agree with you.

[00:08:14] Speaker 01:
If you want to get to the third prong, I think the second prong everyone agrees that that fits.

[00:08:19] Speaker 01:
But not compensation for actual pecuniary loss.

[00:08:21] Speaker 01:
This is the problem.

[00:08:22] Speaker 01:
Actual pecuniary cost.

[00:08:24] Speaker 04:
Cost.

[00:08:26] Speaker 04:
It says it is not compensation for actual pecuniary cost.

[00:08:31] Speaker 04:
Correct?

[00:08:32] Speaker 04:
That's the wording.

[00:08:32] Speaker 01:
I don't believe that's correct.

[00:08:35] Speaker 01:
If you look at the statute, it says pecuniary loss.

[00:08:39] Speaker 01:
not cost.

[00:08:40] Speaker 01:
Maybe mistaken.

[00:08:41] Speaker 01:
I don't know.

[00:08:42] Speaker 01:
And if you look up, in fact, the 1898 original Bankruptcy Act said pecuniary loss.

[00:08:49] Speaker 01:
They carried that over.

[00:08:51] Speaker 01:
And so if you take, even if the word compensation is plain, the meaning's not.

[00:08:56] Speaker 01:
Not in the historical context.

[00:08:57] Speaker 01:
And that's exactly what Kelly said, the Supreme Court and the Kelly decision.

[00:09:01] Speaker 01:
Said you cannot interpret 523A7 based on the words alone.

[00:09:06] Speaker 01:
You have to look at the historical context.

[00:09:11] Speaker 01:
And if you look just at the word compensation, then that's what Justice Frankfurter called the pernicious oversimplification.

[00:09:19] Speaker 01:
Because the historical context is that pecuniary loss was a very narrowly tailored definition.

[00:09:29] Speaker 01:
And the penalty was a very broad definition.

[00:09:34] Speaker 01:
So when we had the Bankruptcy Act of 1978, what Kelly said is that same interpretation came with the 1978 Bankruptcy Act, meaning penalties were interpreted broadly and the compensation and pecuniary loss were interpreted very narrowly.

[00:09:56] Speaker 01:
And so that's where the court really focused.

[00:09:59] Speaker 01:
And I think the problem with the bankruptcy appellate panel's ruling is they said, well, all Kelly did was create an exception.

[00:10:06] Speaker 01:
But it didn't create an exception.

[00:10:08] Speaker 01:
It didn't create an exception at all.

[00:10:09] Speaker 01:
If you read Kelly, all they say is, on its face, the rule 523A7 creates a broad exception for penal

[00:10:24] Speaker 01:
I can't remember the exact quote.

[00:10:26] Speaker 01:
I'm paraphrasing for penal sanctions.

[00:10:30] Speaker 01:
So Kelly interpreted the plain language.

[00:10:33] Speaker 01:
It said that.

[00:10:33] Speaker 01:
It said on its face.

[00:10:34] Speaker 01:
It did not create an exception.

[00:10:36] Speaker 01:
What it said is, we recognize a historical exception that has been here since 1898.

[00:10:44] Speaker 01:
And we recognize that Congress's intent in drafting 523A7 was to carry this over into the 1978 act.

[00:10:52] Speaker 01:
And because Congress intended that, you have to read 523A7 with that in mind.

[00:10:59] Speaker 01:
So you can't read 523A7 very narrowly and hyper-focus on one word like compensation.

[00:11:05] Speaker 01:
And that's exactly what the bankruptcy appellate panel did.

[00:11:08] Speaker 01:
They ignored pecuniary loss and they focused right on compensation.

[00:11:14] Speaker 03:
One thing in your briefing, you cite the Seventh Circuit case.

[00:11:19] Speaker 03:
And that's talking about criminal restitution.

[00:11:23] Speaker 03:
So it seems to me that if you don't go that route, which is an out-of-circuit case, you would look at our opinions from the Ninth Circuit, like Finley or Taggart or Casas, and wouldn't... If Zarensky were the law of the Ninth Circuit, those cases wouldn't have come out the way they did, would they?

[00:11:50] Speaker 01:
Correct.

[00:11:50] Speaker 03:
Okay, so we of course can't overrule a panel, so we're looking only at the Ninth Circuit precedent.

[00:12:00] Speaker 03:
And it seems to me in doing that, too, we have to take into account that California itself had a, I don't know if it was an amendment, but their statute basically says, costs are penalties.

[00:12:14] Speaker 03:
And we don't have that in Nevada, right?

[00:12:16] Speaker 01:
Well, we do, I believe.

[00:12:18] Speaker 03:
Okay, and so where do I look in your rules to find costs or penalties?

[00:12:23] Speaker 01:
Again, if you look at, this was the issue in Mr. Wieck's reinstatement order, and this was briefed.

[00:12:31] Speaker 01:
We both briefed 523A7.

[00:12:33] Speaker 01:
We asked the court whether or not the primary purpose of discipline was penal or whether it was to compensate.

[00:12:44] Speaker 01:
The Supreme Court said it was penal.

[00:12:47] Speaker 01:
And now the Supreme Court in Claiborne, and Mr. Wyck mentions this, has repeatedly said the primary purpose of attorney discipline is not to punish.

[00:12:56] Speaker 01:
But the problem is it also says repeatedly that attorney discipline is for deterrence and rehabilitation.

[00:13:04] Speaker 03:
But don't, you know, those are kind of broad concepts.

[00:13:07] Speaker 03:
But don't we have to look at the Nevada case, Reid, which seems to be the most significant case, and the Nevada rules?

[00:13:16] Speaker 03:
and how, I mean BAP looked at this intersection between 120 and 102.

[00:13:23] Speaker 03:
So my, going back to my actual question, the question was where in the rules do I find support for your position?

[00:13:33] Speaker 03:
If you look at,

[00:13:38] Speaker 01:
I will can see that it's not explicit in the rule if that's what you mean.

[00:13:41] Speaker 01:
Okay.

[00:13:42] Speaker 01:
I agree.

[00:13:42] Speaker 01:
It's not explicit in the rule.

[00:13:44] Speaker 03:
All right.

[00:13:44] Speaker 03:
So I'd have to interlineate.

[00:13:46] Speaker 01:
Right.

[00:13:46] Speaker 03:
Purpose.

[00:13:47] Speaker 01:
But if you look at Taggart, when the court analyzed Taggart, they said, look, it's not in the rule.

[00:13:55] Speaker 01:
So we're going to define your intent based off of history and reading the statute.

[00:14:00] Speaker 01:
And they said, look, we think your intent's compensatory.

[00:14:02] Speaker 01:
Compensatory.

[00:14:05] Speaker 01:
But then the California legislature said, hey, wait a minute, that's not our intent.

[00:14:11] Speaker 01:
And every other state in the nation generally follows the ABA guidelines.

[00:14:16] Speaker 01:
And the ABA says, it's a sanction.

[00:14:19] Speaker 01:
And so they said, look, this is a sanction.

[00:14:20] Speaker 01:
Its intent is deter and rehabilitate.

[00:14:24] Speaker 01:
So when the court came back and reviewed that the second time in Finley, they said, OK, you're right.

[00:14:29] Speaker 01:
We will honor your intent, your statement of intent.

[00:14:32] Speaker 01:
So it begs the question, does the Supreme Court of Nevada have to amend rule 20 just to clarify its intent?

[00:14:39] Speaker 01:
Because notice, the California legislature didn't actually change the rule all that much.

[00:14:43] Speaker 01:
All it did is,

[00:14:44] Speaker 01:
Amend by adding a statement of intent is that really necessary or can we?

[00:14:50] Speaker 01:
Like in middle middle sex in that case the supreme court already recognized the purpose of attorney discipline throughout the nation is to deter and rehabilitate all right counsel you are Way over yeah for purposes of saving time for rebel Mr.. Wake

[00:15:15] Speaker 00:
Thank you, Your Honors.

[00:15:16] Speaker 00:
Terry Wike on behalf of ProPurr.

[00:15:19] Speaker 00:
And let me begin right with the court's questions.

[00:15:26] Speaker 00:
The Nevada Supreme Court, in my case, as Mr. Hogy is arguing, imposed a cost as a rehabilitative measure.

[00:15:35] Speaker 00:
Well, that's not necessarily true.

[00:15:38] Speaker 00:
They imposed a cost in the matter of Enrico,

[00:15:44] Speaker 00:
And Enrico was a disbarred attorney in Nevada.

[00:15:49] Speaker 00:
And when they disbarred that attorney, they did not impose the sanctions under Supreme Court Rule 102.

[00:15:59] Speaker 00:
Interestingly, though, they mandated that.

[00:16:03] Speaker 00:
And the reason why they didn't impose those sanctions under Rule 102 was because rehabilitation is not going to serve this attorney because he's now been disbarred.

[00:16:13] Speaker 00:
That was a ruling of the court.

[00:16:15] Speaker 00:
As to the costs, they did impose the costs under 120 on this attorney because they were not rehabilitative in nature.

[00:16:26] Speaker 00:
So the Supreme Court wants to interpret Supreme Court Rule 120 any way it wants, depending upon the circumstances.

[00:16:37] Speaker 00:
That's because it's not in the language.

[00:16:39] Speaker 00:
That's because SCR 120 is not a penalty.

[00:16:43] Speaker 00:
And they've said so much explicitly in Claiborne.

[00:16:47] Speaker 00:
They identified that costs upon the disciplined attorney are not intended to be a penalty.

[00:16:54] Speaker 00:
They said that.

[00:16:55] Speaker 00:
Not me.

[00:16:57] Speaker 00:
We're hearing today that this is a penalty under Supreme Court or under 523A7.

[00:17:10] Speaker 00:
Mr. Hoge is arguing that this is a penalty.

[00:17:13] Speaker 00:
It's not a penalty because the Supreme Court has said disciplinary costs are not a penalty upon the disciplined attorney.

[00:17:21] Speaker 00:
And that was in Claiborne.

[00:17:22] Speaker 00:
They made it clear.

[00:17:24] Speaker 00:
They also said that

[00:17:28] Speaker 00:
It also is compensation for pecuniary costs or loss.

[00:17:34] Speaker 00:
It doesn't matter.

[00:17:35] Speaker 00:
Because whether or not you use the word loss, as Mr. Hogy explained, loss was a very narrow definition at the beginning of the code.

[00:17:45] Speaker 00:
As they expanded the code, they included the word cost, which basically means any debt.

[00:17:51] Speaker 00:
And that's where the costs come into play, is that this is a debt that is owed to the State Bar of Nevada for expenses that they incurred in their disciplinary proceedings.

[00:18:03] Speaker 03:
There's a lot of cases and disciplinary proceedings floating around here, as you know.

[00:18:07] Speaker 03:
I want to ask you about Findlay, because it seemed to me there, we were dealing with a situation where the California legislature had amended the statute

[00:18:19] Speaker 03:
And they basically said that costs are penalties.

[00:18:24] Speaker 03:
And as I understand Mr. Hogy's argument, he's saying, well, that was basically a declaration made by the Nevada Supreme Court in your case in connection with the reinstatement.

[00:18:39] Speaker 03:
So therefore, in parallel with Findlay, these also would be penalties.

[00:18:48] Speaker 00:
I understand that that's the state bars argument, but that's not that's what the Supreme Court said the Supreme Court rejected Hogy's argument that it was a fine penalty or forfeiture and in fact they said explicitly you're talking about read now No, I'm talking about my case.

[00:19:05] Speaker 03:
Oh in your case.

[00:19:05] Speaker 00:
Okay, okay They specifically said that it was not a fine penalty or forfeiture, but it was a product of rehabilitation and

[00:19:12] Speaker 00:
Yet in the matter of Enrico, they said those costs are not rehabilitation costs.

[00:19:21] Speaker 00:
So you got a difference of opinion based upon a statute which wasn't passed by the legislature in Nevada.

[00:19:30] Speaker 00:
It wasn't created as a matter of law like a regular state statute would.

[00:19:35] Speaker 00:
They're interpreting it any way they want.

[00:19:38] Speaker 00:
And it conflicts with the bankruptcy code.

[00:19:40] Speaker 00:
Now, the bankruptcy code preempts the law of the land.

[00:19:43] Speaker 00:
It is the law.

[00:19:46] Speaker 00:
And to the extent that it should be strictly construed in favor of the debtor,

[00:19:51] Speaker 00:
Now, when the courts, you know, it was passed by Congress with representatives from the state of Nevada there voting on the Bankruptcy Act, and they knew at that time that to overcome the bankruptcy, the statute needed to be narrowly construed because it was strict scrutiny.

[00:20:13] Speaker 00:
And in fact, because it needed to be narrowly construed, yes, Nevada needed to go back and look at their statutes as it pertains to bankruptcy discharge matters, and whether or not they're going to comply with 523A7.

[00:20:25] Speaker 00:
They chose not to do so.

[00:20:29] Speaker 00:
We saw in 2001 in Taggart that the California Business and Professional Code did modify their statute in 2003, which led to Findlay.

[00:20:42] Speaker 00:
Now, Finley, interestingly enough, never got to the issue of whether or not it was still compensation for actual pecuniary loss.

[00:20:50] Speaker 00:
That's the interesting discussion that never happened in Finley.

[00:20:54] Speaker 00:
So, because that discussion and argument was never made in Finley, they never got to the position of even if it is a fine, the third part of the statute says, and not compensation for pecuniary costs.

[00:21:08] Speaker 00:
Well, in Finley, that was a hybrid.

[00:21:11] Speaker 00:
So it did dovetail into that third realm, which was never discussed in Finley.

[00:21:17] Speaker 00:
And then subsequently, we heard in Shear how the different courts' opinions have caused confusion among practitioners and the courts in interpreting whether or not disciplinary costs would be dischargeable.

[00:21:34] Speaker 00:
And in that case, they recognized... Involved arbitration fees, correct?

[00:21:38] Speaker 00:
Correct.

[00:21:38] Speaker 00:
Involved arbitration fees.

[00:21:40] Speaker 00:
And they said that they were dischargeable because they were... Compensatory.

[00:21:44] Speaker 00:
Compensatory, correct.

[00:21:46] Speaker 00:
Subsequently, we went to Albert Sheridan.

[00:21:49] Speaker 00:
The issue there was sanctions.

[00:21:51] Speaker 00:
And in Albert Sheridan, they also said that...

[00:21:55] Speaker 00:
They recognized that the sanction was payable to a third party, but they also said, specifically, but that doesn't matter either because it is compensation for extra-opinionary loss.

[00:22:07] Speaker 00:
Same thing, we go turn around and we go to Casas.

[00:22:10] Speaker 00:
Casas was payment to the client security fund in the state of California.

[00:22:15] Speaker 00:
And the court held that in that situation, we need not dive into the abyss of whether it's fine, penalty, or forfeiture.

[00:22:26] Speaker 00:
We don't even need to decide that issue, because we know it's compensation for actual pecuniary loss.

[00:22:31] Speaker 00:
And we're done.

[00:22:35] Speaker 00:
in my opinion, clarified the rules with respect to the discharge of actual pecuniary laws.

[00:22:43] Speaker 04:
It was essentially reimbursing the fund for monies paid, specifically, right to the penny, whatever the figure was.

[00:22:48] Speaker 00:
Exactly.

[00:22:49] Speaker 00:
And, you know, there's some decisions out there throughout the country where they, if the

[00:22:59] Speaker 00:
Penalty or whatever you want to say the compensation for pecuniary loss is discretionary Some of the courts have said that that serves as a fine but I think that runs afoul of what is interesting in the plain language of 523 where it says and not compensation for pecuniary loss if so even if you if even if you label it as a fine and it is compensation for pecuniary loss and

[00:23:27] Speaker 00:
You're circumventing the code by saying that it's non-dischargeable, because it is dischargeable even if it's a finer penalty, if it is compensation for pecuniary loss.

[00:23:38] Speaker 03:
What do you make of the argument, though, that basically Nevada, like many other states, has essentially followed the ABA model code, which characterizes this as a sanction or penalty, a sanction?

[00:23:53] Speaker 00:
Well, the ABA model code, I understand that, but there again, we're looking at the specific statute of 120 and how it's drafted.

[00:24:02] Speaker 00:
If they want to redraft 120 in accordance with the ABA, then that's fine.

[00:24:08] Speaker 00:
And I think that careful drafting, again, this is a strict scrutiny analysis and it needs to be narrowly tailored.

[00:24:15] Speaker 00:
The government needs to narrowly tailor their statutes to comply with the preemptive law of the Bankruptcy Code.

[00:24:21] Speaker 00:
And that they chose not to do.

[00:24:23] Speaker 00:
California's made some effort with the California Business and Professional Code, which is passed through their legislature.

[00:24:32] Speaker 00:
Remember, the Supreme Court rules aren't passed through the people of Nevada.

[00:24:37] Speaker 00:
They're passed and enforced by the strong arm of the state bar.

[00:24:40] Speaker 00:
That's it.

[00:24:42] Speaker 00:
There's no due process there.

[00:24:44] Speaker 00:
I don't have a right to a trial by jury, as in Kelly, Zaworski,

[00:24:50] Speaker 00:
I'm not going to butcher that name, but... Baronski was a criminal case.

[00:24:54] Speaker 00:
Yes, they were criminal cases.

[00:24:56] Speaker 00:
They're an afforded due process.

[00:24:58] Speaker 00:
And then whether or not restitution is dischargeable is questionable, based upon Davenport even.

[00:25:07] Speaker 00:
But the bottom line is that those are criminal restitution cases, afforded due process.

[00:25:15] Speaker 00:
They get a right by trial, by jury.

[00:25:18] Speaker 00:
And we don't have that in Nevada.

[00:25:20] Speaker 00:
And we have the Supreme Court changing the rules based upon every case that's before it.

[00:25:25] Speaker 00:
Enrico Reed and Wyck, for instance.

[00:25:30] Speaker 03:
So if we were to disagree with the state bar, what would we then do?

[00:25:37] Speaker 03:
Remand to the bankruptcy court with instructions to grant the motion for sanctions?

[00:25:42] Speaker 03:
Where would that leave us if we were to rule against the bar on their appeal?

[00:25:46] Speaker 00:
If that was the only remaining issue, yes, Your Honor.

[00:25:49] Speaker 00:
I believe that that would be the correct approach.

[00:25:53] Speaker 00:
And, you know, I understand Mr. Hogy's argument, but I brought this up at the very beginning when I was before the reinstatement panel that this debt has been discharged.

[00:26:05] Speaker 00:
And at no time did the State Bar of Nevada seek relief from the Bankruptcy Court to pursue this debt.

[00:26:12] Speaker 00:
So even if it was a debt and it wasn't a penalty, let's just say it wasn't a penalty.

[00:26:18] Speaker 00:
Let's just say

[00:26:19] Speaker 00:
It wasn't a penalty.

[00:26:21] Speaker 00:
It was just a debt that they felt I owed them.

[00:26:23] Speaker 00:
Well, then it was discharged also.

[00:26:26] Speaker 00:
It was discharged also.

[00:26:28] Speaker 00:
They tried to create an exception as it being a fine penalty.

[00:26:32] Speaker 00:
But then they forgot the third part of 523 because it was compensation for pecuniary loss.

[00:26:39] Speaker 00:
So even if they want to claim it's something other than a penalty, it's been discharged.

[00:26:50] Speaker 00:
Thank you.

[00:26:51] Speaker 01:
I know I don't have a lot of time.

[00:27:03] Speaker 01:
I just really briefly wanted to clarify a couple things.

[00:27:06] Speaker 01:
First of all, the

[00:27:09] Speaker 01:
The claim that Claiborne stated that these costs are not punishment, that's not what the case said.

[00:27:18] Speaker 01:
In Claiborne, they said the primary purpose of discipline is not punishment.

[00:27:24] Speaker 01:
Again, it was talking about the three theories of punishment, retribution, deterrence, rehabilitation.

[00:27:31] Speaker 01:
It said we focus on deterrence and rehabilitation.

[00:27:34] Speaker 01:
We are not here for retribution.

[00:27:37] Speaker 01:
It never said costs were not penalties, never.

[00:27:41] Speaker 01:
Second of all, this argument that the Supreme Court rejected that, if I could just have one minute or 30 seconds.

[00:27:50] Speaker 01:
This is what the Supreme Court said.

[00:27:52] Speaker 01:
The panel disagreed with Weick's argument.

[00:27:54] Speaker 01:
This is ER 92.

[00:27:57] Speaker 01:
Concluding that SCR 120 costs owed to the state bar are accepted from discharge and bankruptcy under 11 USC 523 because they constitute fines penalties or forfeitures payable to a government agency and our punitive deterrent and rehabilitative in nature That's what it said it said we approve the panel's recommendation So to say that the Supreme Court rejected this is 100% incorrect the Supreme Court made its intent very clearly

[00:28:27] Speaker 01:
Thank you.

[00:28:27] Speaker 02:
OK.

[00:28:28] Speaker 02:
Thank you.

[00:28:28] Speaker 02:
Thanks to both of you.

[00:28:32] Speaker 02:
This matter is now submitted.