Judge Jill Feeney, Case Number: 23STCV18632, Date: 2024-02-21 Tentative Ruling

This is an action for declaratory and injunctive relief. Plaintiff is an active member of the California State Bar who retired from the practice of law in 2022. (Compl., ¶¶7-8.) Plaintiff serves as an arbitrator and mediator in California and intends to continue his work. (Id.) However, State Bar Rule 2.30(B)(C) would require Plaintiff to maintain an active membership with the State Bar to continue serving as an arbitrator and mediator, meaning he would have to continue paying annual dues and complete mandatory minimum continuing legal education (MCLE). (Id.) Plaintiff alleges that there is no rational basis for prohibiting inactive members of the State Bar from acting as private arbitrators and mediators in California. (Id., ¶9.) No other class of persons in California are prohibited from acting as private arbitrators. (Id.) Plaintiff seeks entry of judgment declaring Rule 2.30(B)(C) unconstitutional and unenforceable, ordering Defendant to revoke the rule, enjoining Defendant from enforcing the rule, and ordering Defendant to refund annual dues paid by members who remained active but who would have become inactive members if not for the rule. (Id., ¶11.)

Defendant demurs to Plaintiff’s Complaint on the grounds that (1) the Court does not have jurisdiction over this matter because the Supreme Court of California has exclusive jurisdiction over matters arising from the discipline and licensing of California attorneys and (2) the Complaint fails to state a cause of action for declaratory and injunctive relief.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Proc., §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 (internal citations omitted).)

A party filing a demurrer “shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., section 430.41(a).) “The parties shall meet and confer at least five days before the date the responsive pleading is due. If the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.” (Code Civ. Proc., section 430.41(a)(2).) A failure to meet and confer does not constitute grounds to sustain or overrule a demurrer. (See Code Civ. Proc., sections 430.41 (a)(4).)

Evidence Code, section 452 states that a court may take judicial notice of (b) regulations and legislative enactments issued by or under the authority of the United States or any public entity in the United States, (c) official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States, and (h) facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort of sources of reasonably indisputable accuracy, among others.

Here, the requests for judicial notice as to State Bar Rule 2.30 and the Judicial Council’s Ethics Standards (Exhibits G and H) are granted because they are regulations issued by public entities, the State Bar of California and the California Judicial Council.

Regarding the California Commission on Judicial Performance, Frequently Asked Questions page (Exhibit I), the page is a copy of the Commission’s website. A court may take judicial notice of the existence of websites as official government acts. (See People v. Morales (2018) 25 Cal.App.5th 502, 512, fn. 7 [taking judicial notice of materials on an official government website, which discussed official acts].) However, “although it might be appropriate to take judicial notice of the existence of the websites, the same is not true of their factual content.” (Searles Valley Minerals Operations, Inc. v. State Bd. of Equalization (2008) 160 Cal.App.4th 514, 519; see also Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1141, fn. 6 [“The truth of the content of the articles is not a proper matter for judicial notice”]; Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 194 [“The contents of the Web sites and blogs are ‘plainly subject to interpretation and for that reason not subject to judicial notice.’”].)

Although a court may take judicial notice of official acts of state agencies, the truth of matters asserted in such documents is not subject to judicial notice. (Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471.) When judicial notice is taken of a document, the truthfulness and proper interpretation of the document are disputable. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114.)

Here, the State Bar is a state agency because it is a part of the judicial branch of this state. Because the reports are official reports created by the State Bar, the Court finds the reports may be judicially noticed as official acts of a state agency. However, the Court does not take judicial notice of the truth of the matters asserted in the reports.

Defendant first argues that this Court lacks subject matter jurisdiction over the Complaint because it pertains to the regulation and practice of law in California, which is within the inherent and exclusive jurisdiction of the California Supreme Court.

Defendant cites Code Civ. Proc., section 430.10(a), which provides that a party may demur to a complaint on the grounds that the court has no jurisdiction of the subject of the cause of action alleged in the pleading. Defendant also cites Cal. Rules of Court, Rule 9.3, which provides that the California Supreme Court has the inherent power to admit persons to practice law in California.

Defendant cites Obrien v. Jones (2000) 23 Cal.4th 40, 47, which involved a dispute over whether the legislature could revise a statute related to the regulation of the State Bar. The court there ruled that although the State Bar is a constitutional entity subject to the California Supreme Court’s reserved, primary, and inherent authority over admission and discipline, statutes regarding the disciplinary system are not exclusive, but are supplementary to the California Supreme Court’s authority. (Id at p. 50.) The other cases cited by Defendant also state that the California Supreme Court has exclusive power to license and discipline attorneys. (Hustedt v. Workers' Comp. Appeals Bd. (1981) 30 Cal.3d 329, 349; In re Rose (2000) 22 Cal.4th 430, 438; In re Att’y Disc. Sys. (1998) 19 Cal.4th 582, 598-599.)

A. Any licensee not under suspension, who does not engage in any of the activities listed in (B) in California, may, upon written request, be enrolled as an inactive licensee. The Secretary may, in any case in which to do otherwise would work an injustice and subject to any direction of the board permit retroactive enrollment of inactive licensees.

B. No licensee practicing law or occupying a position in the employ of or rendering any legal service for an active licensee or occupying a position wherein he or she is called upon in any capacity to give legal advice or counsel or examine the law or pass upon the legal effect of any act, document, or law, shall be enrolled as an inactive licensee.

C. Notwithstanding (A) and (B) a licensee serving for a court or any other governmental agency as a referee, hearing officer, court commissioner, temporary judge, arbitrator, mediator or in another similar capacity is eligible for enrollment as an inactive licensee if he or she does not otherwise engage in any of the activities listed in (B) or hold himself or herself out as being entitled to practice law.

The courts have ruled that placement in active or inactive status is not the equivalent of being admitted to the State Bar. (Early v. Becerra (2020) 47 Cal.App.5th 325, 332 [In sum, under the State Bar Act, an inactive member may not practice law in California but remains admitted in the state and a member of the bar. The State Bar Act confirms our interpretation of the plain language of Government Code section 12503, to wit, “admitted to practice” refers to being admitted as an attorney in California, not the active or inactive status of an admitted attorney.])

This case does not involve the admission or discipline of attorneys in California. Plaintiff alleges that the effect of Rule 2.30(B) and (C) is that members (licensees) seeking to serve as arbitrators or mediators, who would reasonably be expected to render the legal services described in Rule 2.30(B), must maintain active status. Plaintiff alleges that the rule violates inactive licensees’ equal protection rights because other classes of people who are not members of the State Bar are not required to maintain active status with the State Bar to serve as arbitrators or mediators.

This matter does not affect the State Bar’s admissions process because it concerns the rights of inactive licensees of the State Bar who have already been admitted to the State Bar. Changing from active to inactive status or vice a versa does not change the fact a licensee has already been admitted.

This action therefore does not fall within the ambit of the California Supreme Court’s exclusive jurisdiction over the admission and discipline of attorneys in California. Defendant fails to cite authority stating the California Supreme Court has exclusive jurisdiction over disputes involving the active or inactive status of a State Bar licensee. The Court finds that it is not barred from hearing this matter for lack of jurisdiction.

To state a cause of action for declaratory relief, the plaintiff must plead the following elements: (1) person interested under a written instrument or a contract; or (2) a declaration of his or her rights or duties (a) with respect to another or (b) in respect to, in over or upon property; and (3) an actual controversy. (Code Civ. Proc. § 1060; Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 605-06; Bennett v. Hibernia Bank (1956) 47 Cal.2d 540, 549.)

A facial attack on the overall constitutionality of a statute or regulation may be made by an action for declaratory relief. A facial challenge to a statute or ordinance “considers only the text of the measure itself, not its application to the particular circumstances of an individual.” (Tobe v. City of Santa Ana (1995) 9 Cal.4th 1069, 1084; Sturgeon v. Bratton (2009) 174 Cal.App.4th 1407, 1418.)

The constitutionality of acts of the legislature are entitled to a strong presumption of constitutionality. (Washington State Grange v. Washington State Republican Party (2008) 552 U.S. 442, 450; City of San Diego v. Boggess (2013) 216 Cal.App.4th 1494, 1503.) The court presumes the statute to be valid and resolves all doubt in its favor. (California Housing Finance Agency v. Ellion, (1976) 17 Cal.3d 575, 594.) Where possible, the enactment must be construed to preserve its constitutional validity. (Save Our Sunol, Inc. v. Mission Valley Rock Co. (2004) 124 Cal.App.4th 276, 284.)

A demurrer is generally not an appropriate means to test the merits of a declaratory relief action unless the issues are solely ones of law. (Arroyo v. Regents of University of California (1975) 48 Cal.App.3d 793, 797.) The Court may resolve equal protection challenges on demurrer. (See e.g. Kimco Staffing Services, Inc. v. State of California (2015) 236 Cal.App.4th 875, 877 (upholding judgment of dismissal after demurrer sustained without leave to amend).)

Here, Plaintiff alleges a cause of action for declaratory and injunctive relief based on an alleged violation of inactive State Bar licensees’ equal protection rights. Because equal protection challenges may be resolved on demurrer, Defendant may challenge the merits of this action on demurrer.

Under the California Constitution, Article I, section 7, the right to equal protection of the law is violated when the government treats a similarly situated group of people unequally without some justification. (In re Murray (2021) 68 Cal.App.5th 456, 462.)

Rational basis review applies to equal protection challenges when the challenged dispute implicates no suspect class or fundamental right. (Doe v. Finke (2022) 86 Cal.App.5th 913, 922.) In cases involving rational basis review, equal protection of the law is denied only where there is no rational relationship between the disparity of treatment and some legitimate government purpose. (Id, citing Johnson v. Department of Justice (2015) 60 Cal.4th 871, 881.)

The standard of rationality does not depend on whether lawmakers ever actually articulated the purpose they sought to achieve, nor must the underlying rationale be empirically stated. (Finke at p.923, quoting People v. Turnage (2012) 55 Cal.4th 62, 77.) A party challenging the existence of a rational basis must prove there is no conceivable basis that might support the disparity. (Finke at p.923.) If a plausible basis exists for the disparity, a court may not second-guess its wisdom, fairness, or logic. (Id.) A court will not overturn a law unless the varying treatment is so unrelated to the achievement of any combination of legitimate purposes that it can only be concluded that the government’s action is irrational. (Id at p.927.)

Defendant states Rule 2.30 was enacted in response to a growing number of California attorneys serving as arbitrators or mediators while on inactive status. (Motion, p.3.) According to a staff report presented to the State Bar’s Board Committee, these inactive licensees often advertised their status as attorneys as a benefit to those who retained their services, emphasizing that they had legal skills to enhance the alternative dispute resolution process. (Id.) The staff report further noted that inactive attorneys working in the field of alternative dispute resolution were more likely to generate demands on the regulatory jurisdiction of the State Bar in the form of complaints even if their conduct did not constitute the practice of law per se. (Id at p.4.)

Defendant’s rationale for the disparity in treatment of inactive licensees caused by Rule 2.30 is that the rule would allow the State Bar to cover regulatory costs incurred by the conduct of attorneys working in alternative dispute resolution. Inactive licensees, though not authorized to practice law in California, are still subject to discipline by the State Bar for misconduct. By serving in positions where they would be providing legal services, inactive attorneys may be subject to discipline if they commit misconduct while working as arbitrators and mediators. The State Bar would bear the cost of the disciplinary proceedings arising from this misconduct. It is reasonable to conclude that funding the State Bar’s regulatory functions is a legitimate government purpose. Requiring licensees to continue paying fees as active licensees is thus related to this purpose because the fees would fund the State Bar’s anticipated regulatory costs related to the licensees’ conduct as an arbitrator or mediator. Therefore, Defendant sufficiently articulates a rational basis for the disparate treatment of inactive State Bar licensees compared to other individuals serving as arbitrators or mediators.

Plaintiff in opposition argues that Defendant provides no rational basis for the disparity of treatment with respect to inactive licensees because the truth of the staff reports provided by Defendant is not subject to judicial notice. Plaintiff also argues that there is no indication that inactive licensees are violating the law by advertising they are active licensees. Plaintiff finally makes arguments pertaining to the fairness of requiring inactive licensees to be active licensees when non-attorneys do not have these restrictions.

Plaintiff’s equal protection claim fails if there is any rationale for the unequal treatment caused by Rule 2.30 that is related to a legitimate government purpose. Additionally, the fairness, wisdom, or logic of the articulated rationale is not relevant to the rational basis analysis. Here, Defendant has articulated a rational basis for the disparity. Therefore, Plaintiff’s equal protection claim fails as a matter of law.

Because Plaintiff’s equal protection claim fails as a matter of law, Plaintiff fails to plead an actual controversy over his rights. Therefore, Plaintiff fails to plead facts sufficient to support a cause of action for declaratory relief. The demurrer is sustained as to the cause of action for declaratory relief.

The necessary elements for an injunction are: (1) a cause of action arising from a wrongful act; and (2) a basis for equitable relief, ordinarily because of a threat of irreparable or because there is no adequate remedy at law available. Brownfield v. Daniel Freeman Marina Hospital (1989) 208 Cal.App.3d 405, 410.

Here, because the demurrer was sustained as to the cause of action for declaratory relief and there are no remaining causes of action, the prayer for injunctive relief also fails. The demurrer is sustained as to the prayer for injunctive relief.

Plaintiff cannot amend his Complaint to successfully plead a cause of action for declaratory relief based on an equal protection claim because a rational basis exists for the disparate treatment of inactive licensees caused by Rule 2.30. Therefore, leave to amend is denied.