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governmental aim, rather than a purely compensatory purpose.' . . . [T]he costs assessed in New Hampshire disciplinary proceedings are not 'purely compensatory.' . . . [C]ost assessments serve both to deter attorney misconduct and to help rehabilitate wayward attorneys. . . . It is irrelevant that the cost assessment may be calculated by reference to the actual loss. . . . [T]he Committee is not concerned with recouping its litigation costs to the degree that it is concerned with deterring unprofessional conduct. . . . 'It would be a poor policy indeed to suggest that an attorney could elude punishment for professional improprieties by resorting to the Bankruptcy Code.'").
Schaffer v. Louisiana State Bd. of Dentistry (In re Schaffer), 515 F.3d 424 (5th Cir. 2008) (Costs assessed by Louisiana State Board of Dentistry in a proceeding to revoke debtor's dental license were dischargeable under S 523(a)(7). "In permitting the assessment of costs in addition to a fine, a plain reading of the text suggests that the costs are not a fine, penalty, or forfeiture under S 523(a)(7). The Board could have assessed a fine . . . but did not do so. Finding the Board's assessment of costs to be punitive forces it into the category of the 'fine' that the Board chose not to levy. . . . [T]he Louisiana statute does not define assessment of costs as a form of 'discipline,' and it provides for assessment of an 'administrative fine' and/or costs, rather than a more general category of 'monetary payment.' The provisions for a 'fine' and 'costs' in the Louisiana statute establish a meaningful difference between the Board's punitive versus loss-based options for monetary measures. The unique text of the Louisiana statute compels us to reach a result that differs from holdings in other circuits. . . . [T]he costs assessed are 'compensation for actual pecuniary loss' and do not fall within S 523(a)(7)'s definition of nondischargeable fines.").
Dampf-Aguilar v. Sandoval (In re Sandoval), 541 F.3d 997 (10th Cir. 2008) ("11 U.S.C. S 523(a)(7) [does not] render nondischargeable a debt incurred by a debtor who has guaranteed a bail bondsman to make the bondsman whole in the event a criminal defendant jumps bail." Debtor's obligation ran to the bondsman and not to any governmental unit. That the bondsman "ultimately paid money to the State of Oklahoma after Yanez failed to appear does not change [the] status from that of a private corporate entity. . . . '[S]tepping into the shoes' of the State as subrogee avails the Bondsman nothing in regard to the dischargeability of the debt and fails to afford the Bondsman status as a governmental unit.").
Findley v. State Bar of Cal. (In re Findley), 387 B.R. 260 (B.A.P. 9th Cir. 2008) (2003 amendment to S 6086.10 of the California Business and Professional Code--intended to make attorney discipline cost awards nondischargeable in bankruptcy and to overrule State Bar v. Taggart (In re Taggart), 249 F.3d 987 (9th Cir. 2001)--did not render costs of discipline action nondischargeable under S 523(a)(7). State Bar issued a certificate of costs for $14,054.94 in a disciplinary case against debtor. Citing Gadda v. State Bar, 511 F.3d 933 (9th Cir. 2007), BAP concluded it had to follow Taggart until the Ninth Circuit took another look at the issue. In Gadda, the Ninth Circuit stated: "[T]he purpose of the imposition of costs is to 'promote rehabilitation and to protect the public.' . . . The 2003 amendments . . . merely provide a new avenue for the Bar to recover those costs. The availability of a new mechanism to collect costs already owed cannot be construed as remotely punitive so as to negate California's civil intentions." The BAP concluded "[h]owever clear the California legislature may have been regarding its intentions vis-a-vis S 523(a)(7) and the result
©2009 Keith M. Lundin
