Hale v. U.S. Trustee ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TOM HALE,  No. 06-35349
Appellant,
v.  D.C. No.
CV-04-00289-EJL
U.S. TRUSTEE,
OPINION
Appellee.

Appeal from the United States District Court
for the District of Idaho
Edward J. Lodge, District Judge, Presiding
Submitted November 8, 2007*
Seattle, Washington
Filed December 10, 2007
Before: William C. Canby, Jr., Susan P. Graber, and
Ronald M. Gould, Circuit Judges.
Opinion by Judge Graber
*The panel unanimously finds this case suitable for decision without
oral argument. Fed. R. App. P. 34(a)(2).
16189
HALE v. U.S. TRUSTEE 16191
COUNSEL
Tom Hale, Shelly, Idaho, appellant in propria persona.
Gary L. McClendon, United States Department of Justice,
Boise, Idaho, for the appellee.
OPINION
GRABER, Circuit Judge:
Appellant Tom Hale assisted Debtors Eric and Selina Jones
in filing a bankruptcy petition. The bankruptcy court found
16192 HALE v. U.S. TRUSTEE
that, in doing so, Hale failed to honor his legal and ethical
obligations as their lawyer. The bankruptcy court denied
Hale’s motion requesting judicial recusal, denied his request
for a jury trial on the reasonableness of his attorney fees, dis-
gorged him of his attorney fees, and sanctioned him. The dis-
trict court affirmed those rulings, and Hale timely appealed.
On appeal, he raises only the attorney fees and sanction
issues. We affirm.
FACTUAL AND PROCEDURAL HISTORY
Hale provided “PRE-FILING legal services” to Debtors
pursuant to a signed disclosure agreement. For a $250 fee, he
agreed to analyze Debtors’ financial situation and prepare
their bankruptcy petition and required exhibits, but disclaimed
representing them at the meeting of creditors required under
11 U.S.C. § 341. In addition, the agreement specified that
Hale’s representation “d[id] not include the following ser-
vices: Adversary proceedings, appeals, and/or conversions,
non-dischargeability proceedings, or any other representa-
tion.” Hale refers to this practice as providing “unbundled”
legal services to “pro se” debtors.
In 2001, Debtors filed for bankruptcy pro se. Hale did not
sign the petition. The bankruptcy petition listed the $250 fee
paid to Hale and explained that the fee covered “preparation,
assistance, pro se advice and counsel, pre-filing, to obtain dis-
charge order, or confirmation of plan.”
Shortly after Debtors filed their petition, the bankruptcy
court ordered sua sponte that Hale account for the $250 fee.
The order stated that “there is inadequate information in the
record to allow the Court to determine whether amount
received by Counsel is reasonable under the circumstances.”
The court requested an itemization of all services that Hale
had rendered to Debtors, including “a detailed and specific
description of each individual item of service rendered; the
name of the individual who rendered each such service; the
HALE v. U.S. TRUSTEE 16193
date such service was rendered; and the time expended in ren-
dering such service.”
A few days later, the United States Trustee issued a notice
of intent to seek sanctions against Hale for his failure to sign
the petition. The notice alleged that this omission violated
Federal Rule of Bankruptcy Procedure 9011(a).
Hale submitted an itemization, but the bankruptcy court
ruled that the itemization was “incomplete and not fully in
compliance” with its order. The court explained that the item-
ization “use[d] a generic description of services with no
detail.” The court ordered that Hale supplement his itemiza-
tion within 15 days.
About three weeks after the expiration of that 15-day
period, Hale submitted a 15-page supplemental itemization.
For most of the 15 pages, he took issue with the bankruptcy
court’s inquiry into his fee. For example:
This is not the first time that I have attempted to
protect the debtors and myself from the judicial tyr-
anny that flows from the chambers of a biased Judge.
....
Judge Terry L. Myers has continued the tradition
of Judge Pappas by ordering an accounting of more
cases to determine subjectively if my legal services
were worth $250.00 to the debtors. To provide the
“necessary” legal services to debtors, needed to file
a no asset Chapter 7 bankruptcy, an attorney must
spend hours of his time, at an hourly rate of $125.00.
Hale then described each of the services rendered, but he did
not provide “the name of the individual who rendered each
such service.”
16194 HALE v. U.S. TRUSTEE
The bankruptcy court ruled that Hale’s supplemental item-
ization still was incomplete: “The Supplemental Itemization
contains, at pp. 9-11, fifteen separate descriptions of services
rendered, which are segregated by date and time. Counsel
shall identify whether he personally performed each and every
such service or whether some were performed by his staff
and/or interns.” The court required that Hale further supple-
ment his itemization within 10 days.
Hale did not submit any additional itemizations. Instead, he
filed a 28-page “Motion to Recuse, Vacate, and Amended
[sic] Jury Trial Demand,” wherein he accused Bankruptcy
Judges Jim D. Pappas and Terry Myers of harboring bias
against him and of casting the legal system into disrepute. He
moved for recusal of Judge Myers and requested a jury trial
on the issue of his $250 fee.
The bankruptcy court scheduled a hearing to examine
Hale’s compliance with its itemization orders. Hale then filed
an 11-page “Motion to Recuse, Vacate Hearing, and Jury
Trial Demand.” The motion included six pages of unattributed
hearsay accusations, in the form of stories and narratives, lev-
eled at Judge Myers. Hale repeated his motion for Judge
Myers to recuse himself, renewed his request for a jury trial
on the issue of his $250 fee, and asked that the scheduled
hearing be vacated. With regard to the latter, he argued that
he was unable to attend the hearing because he was working
as a professor and because Judge Myers should recuse him-
self.
The hearing remained on the docket as scheduled. Hale did
not attend, and the bankruptcy court continued the matter for
further briefing. The court gave the U.S. Trustee three weeks
to respond to Hale’s motions and gave Hale 10 days to
respond to the U.S. Trustee’s brief once filed. The U.S.
Trustee filed a brief, but Hale did not file a reply.
Thereafter, the bankruptcy court published a Memorandum
of Decision. In re Jones, No. 01-02853, 2002 WL 818275HALE v. U.S. TRUSTEE 16195
(Bankr. D. Idaho Apr. 4, 2002). In it, the court denied Hale’s
motion for judicial recusal. Id. at *5. The court ruled that Hale
had tendered only rumors, innuendos, and unsupported allega-
tions in support of his motion, which are insufficient to war-
rant recusal under 28 U.S.C. § 455(a). Jones, 2002 WL
818275, at *4-5. The court also denied Hale’s request for a
jury trial, citing In re Rheuban, 121 B.R. 368 (Bankr. C.D.
Cal. 1990), and In re Rheuban, 128 B.R. 551 (Bankr. C.D.
Cal. 1991). Jones, 2002 WL 818275, at *6.
The bankruptcy court then scheduled a status conference to
set a briefing schedule on the reasonableness of Hale’s fee.
On the morning the conference was to take place, Hale faxed
the bankruptcy court a note: “Please accept my apology for
not being able to attend the Status Conference scheduled for
3:00 p.m., today. I left class feeling extremely disoriented and
I was forced to seek medical assistance.” The bankruptcy
court vacated the hearing and rescheduled the status confer-
ence for a date nearly three months later.1 All parties attended
the rescheduled conference, at which the court established a
discovery time line and scheduled a hearing on Hale’s fee.
The U.S. Trustee filed an amended motion for sanctions
against Hale, stemming from his representation of Debtors. In
its motion, the U.S. Trustee alleged that Hale failed to sign
Debtors’ bankruptcy petition in violation of Federal Rule of
Bankruptcy Procedure 9011(a); failed to provide Debtors with
legal representation covering the normal, ordinary, and funda-
mental aspects of their case; failed to obtain Debtors’
informed consent to limit his representation of them; and
failed to create accurate and complete documents for filing in
Debtors’ case. The U.S. Trustee asked that the bankruptcy
court disgorge all attorney fees Debtors had paid to Hale, that
Hale reimburse Debtors for all costs and expenses incurred in
1
Even were Appellant’s fax construed as a motion to vacate or continue
the hearing, local rules require that such a motion be filed at least three
days before the hearing. Bankr. D. Idaho R. 2002.2(f)(4).
16196 HALE v. U.S. TRUSTEE
connection with their bankruptcy case, and that the court
order Hale to sign all bankruptcy petitions of future debtor-
clients and represent them in all normal, ordinary, and funda-
mental aspects of their cases, including attendance at the 11
U.S.C. § 341 meeting of creditors. The motion argued that
sanctions were authorized under 11 U.S.C. §§ 105(a), 307,
and 329; Federal Rules of Bankruptcy Procedure 2016(b) and
9011; Idaho Rules of Professional Conduct 1.2(c) and 1.4(b);
“and the inherent authority of the court to sanction bad faith
conduct.” The bankruptcy court scheduled the hearing on the
motion for sanctions concurrent with the attorney fees hear-
ing.
Next, the U.S. Trustee filed a notice of intent to call wit-
nesses at the upcoming hearing. Two days before the hearing,
Hale filed a “Motion to Dismiss, Response to Amended
Motions, Request for Sanctions, Offer of Proof, and Renewed
Request for a Jury Trial.” In his motion, Hale wrote a four-
page notice to Debtors in which he accused the bankruptcy
court of impropriety and the Debtors’ current counsel of
incompetent and unethical behavior. He then renewed his
motion for a jury trial and stated: “I will be in Salt Lake City,
Utah on the day of this hearing and I intend to rest on the
pleadings. My presence is not mandated or necessary to the
adjudication of the issues, in my opinion.”
The bankruptcy court held the hearing, as scheduled, on
Hale’s attorney fees in Debtors’ bankruptcy case. Hale did not
attend.
The bankruptcy court subsequently issued a second Memo-
randum of Decision. The court summarized that, at the hear-
ing, Debtor Selina Jones testified that Hale never informed
her or her husband about the § 341 meeting of creditors or his
intention not to appear at the meeting. When Hale sent Debt-
ors the disclosure agreement, he told them to read over the
papers but did not mention the section of the disclosure that
states that he would not appear at the meeting. She further
HALE v. U.S. TRUSTEE 16197
testified that she did not and does not understand
what the term pro se means, and stated that it was
never explained to her. She thought Hale was their
attorney. . . . [She] unequivocally testified that the
Debtors would not have filed bankruptcy through
Hale had they understood that he would not be
appearing or providing services after filing. They
needed an attorney, thought they’d hired one, and
expected to have the assistance of one.
In addition, “[s]omewhere between the filing of the petition
and the scheduled § 341(a) meeting, the Debtors received
another telephone call from Hale. He advised them that there
was ‘something wrong with the paperwork’ and that the Debt-
ors should dismiss their bankruptcy.” Debtor Selina Jones
“testified that Hale was quite firm on dismissing the case, but
not at all clear on why it needed to be dismissed,” nor did he
offer to refund the fee paid by Debtors. Hale drafted a motion
to dismiss “without any request, input or assistance from the
Debtors.” The telephone call and draft motion “scared” Debt-
ors into hiring additional counsel, J. Bart Green.
Green met with Debtors the day before the scheduled § 341
meeting and agreed to appear with them at the meeting. “He
found the Debtors confused over the entire process and with-
out any material understanding of what they had signed or
what awaited them. From these conversations, Mr. Green also
determined that numerous errors existed in the Hale-generated
documents, and that multiple amendments were required.”
For example, although Debtors had informed Hale about a
residence and two apartment buildings that they owned in
Pocatello, Idaho, the original petition did not disclose any real
property.2
2
In his supplemental itemization, Hale maintained to the district court
that he provides low-cost “unbundled” legal services for no-asset bank-
ruptcy filings, but Debtors in fact had assets.
16198 HALE v. U.S. TRUSTEE
The bankruptcy court then proceeded to the merits of the
motions because Hale, a licensed lawyer, specifically repre-
sented in his motion two days before the hearing that he
intended to rest on the pleadings and that his presence at the
hearing was “not mandated or necessary,” and because he
never requested that the court continue or vacate the hearing.
The court summarily denied Hale’s renewed motions for a
jury trial and for judicial recusal because he had not raised
any new arguments since the court’s earlier decision denying
the original motions. The court ruled that Hale violated Fed-
eral Rule of Bankruptcy Procedure 9011(a) when he failed to
sign Debtors’ bankruptcy petition, which he prepared. The
court disgorged his $250 fee because he failed “to provide the
Debtors with competent legal representation covering the nor-
mal, ordinary and fundamental aspects of the case,” failed “to
create adequate and complete documents for filing,” and
failed “to obtain the informed consent of his clients to the pur-
ported limitations on representation.” The court sanctioned
Hale $2,000 to encourage him to change his conduct, serve as
a deterrent to others, and reimburse the U.S. Trustee for some
of the fees and expenses that it incurred attempting to gain
Hale’s compliance with Rule 9011.
The court also imposed non-monetary sanctions. The court
noted:
Hale has in the past been required to, among other
things, disgorge fees in several cases. See, e.g., [In
re ]Castorena, 270 B.R. [504,] 532 [(Bankr. D.
Idaho 2001)] (in which $125.00 was ordered dis-
gorged in each of 19 cases, for a total of $2,375.00).
Neither the Court’s prior decisions nor these eco-
nomic consequences have had appreciable impact on
subsequent conduct.
....
HALE v. U.S. TRUSTEE 16199
Hale continues to prepare a large number of chap-
ter 7 petitions in this District. For example, a report
generated by the Court’s clerk shows that, in the 12
months immediately preceding this Decision . . . ,
Hale filed 226 cases.
A random review of some of Hale’s more recently
filed cases indicates that his overall approach
remains the same.
Consequently, the bankruptcy court ruled:
Unable or unwilling to conform his conduct to the
requirements established by the Court’s prior deci-
sions and rulings, and to the standards by which all
other debtors’ counsel in the District abide, Hale has
earned specific restrictions, by express order, on his
practice. . . .
Hale shall not file, nor shall he prepare or cause
to be prepared for filing by a debtor, any bankruptcy
petition unless Hale signs said petition.
Further, Hale shall not file, nor shall he assist a
debtor as counsel in filing, any bankruptcy petition
unless Hale commits to such debtor to meet the ethi-
cal and professional obligations of a debtor’s attor-
ney and provide the reasonable and necessary
services required to properly represent a debtor in a
bankruptcy case. The required professional obliga-
tions include Hale’s appearance at § 341(a) meet-
ings. Other obligations and services were described
in Castorena . . . . Such a commitment must be
reflected in a written engagement or representation
agreement, which the debtor(s) and Hale must sign.
In sanctioning Hale, the bankruptcy court relied primarily
on the sanction authority of Federal Rule of Bankruptcy Pro-
16200 HALE v. U.S. TRUSTEE
cedure 9011(c). But the court also stated that, “[t]o the extent
the Rules are not up to the task the Court may also rely on its
inherent powers.” (Internal quotation marks omitted.)
Finally, the bankruptcy court denied the U.S. Trustee’s
motion that Hale be ordered to pay Debtors’ damages and fees
for replacement counsel. The court reasoned that Green’s fees
were not unreasonable given the nature of Debtors’ case and
could not, “in dissecting Mr. Green’s bill, identify some por-
tion that [wa]s so directly and proximately caused by Hale’s
conduct that it should be awarded as damages.”
Hale timely appealed from the bankruptcy court’s decision,
and the case was transferred to the United States District
Court for the District of Idaho. Before the district court, Hale
argued that he did not violate Rule 9011(a), that the bank-
ruptcy court improperly disgorged his attorney fees and
imposed sanctions, that his right to a jury trial on the reason-
ableness of his attorney fees was violated, and that the bank-
ruptcy judge should have recused himself. The district court
affirmed the bankruptcy court on all issues, and Hale timely
appealed to this court.
STANDARD OF REVIEW
“We review de novo a district court’s decision on appeal
from a bankruptcy court. That is, we review the bankruptcy
court’s decision independently and give no deference to the
district court’s determinations.” Dawson v. Wash. Mut. Bank
(In re Dawson), 390 F.3d 1139, 1145 (9th Cir. 2004) (citation
omitted).
DISCUSSION
After six years, two bankruptcy court decisions, one district
court decision, and numerous motions and filings, it is impor-
tant to identify the precise issues raised in this appeal. Hale
does not challenge either the bankruptcy court’s findings of
HALE v. U.S. TRUSTEE 16201
fact—including the finding that he violated Federal Bank-
ruptcy Rule 9011(a)—or its denial of his motion for judicial
recusal. Consequently, those issues are waived. See Smith v.
Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999) (“[O]n appeal,
arguments not raised by a party in its opening brief are
deemed waived.”).
Instead, Hale limits his appeal to three issues. He argues
that he is entitled to a jury trial on the reasonableness of his
attorney fees. He also asks this court to examine the reason-
ableness of his attorney fees, which we construe as an objec-
tion to the bankruptcy court’s disgorgement of his attorney
fees. Finally, he argues that the bankruptcy court improperly
sanctioned him.
We review de novo a litigant’s entitlement to a jury trial.
Kulas v. Flores, 255 F.3d 780, 783 (9th Cir. 2001). We
review for abuse of discretion a bankruptcy court’s decision
on attorney fees. Neben & Starrett, Inc. v. Chartwell Fin.
Corp. (In re Park-Helena Corp.), 63 F.3d 877, 880 (9th Cir.
1995). We also review for abuse of discretion a bankruptcy
court’s award of sanctions. Miller v. Cardinale (In re
DeVille), 361 F.3d 539, 547 (9th Cir. 2004).
A. The Seventh Amendment does not include a right to a
jury trial on the reasonableness of attorney fees in bank-
ruptcy proceedings.
[1] Hale argues that the right to a jury trial under the Sev-
enth Amendment of the United States Constitution extends to
determining the reasonableness of attorney fees in a bank-
ruptcy proceeding,3 notwithstanding 11 U.S.C. § 329(b),
3
The Seventh Amendment provides:
In Suits at common law, where the value in controversy shall
exceed twenty dollars, the right of trial by jury shall be preserved,
and no fact tried by a jury, shall be otherwise reexamined in any
Court of the United States, than according to the rules of the
common law.
U.S. Const. amend. VII.
16202 HALE v. U.S. TRUSTEE
which empowers a bankruptcy judge to make that determina-
tion. In Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42 n.4
(1989), the Supreme Court held that “[t]he Seventh Amend-
ment protects a litigant’s right to a jury trial only if a cause
of action is legal in nature and it involves a matter of ‘private
right.’ ”4
To determine when a Seventh Amendment right to a jury
trial exists, the Court established a three-part test. “First, we
compare the statutory action to 18th-century actions brought
in the courts of England prior to the merger of the courts of
law and equity.” Id. at 42 (internal quotation marks omitted).
Although the thrust of the Amendment was to pre-
serve the right to jury trial as it existed in 1791, the
Seventh Amendment also applies to actions brought
to enforce statutory rights that are analogous to
common-law causes of action ordinarily decided in
English law courts in the late 18th century . . . .
Id. at 41-42 (internal quotation marks omitted). “Second, we
examine the remedy sought and determine whether it is legal
or equitable in nature. The second stage of this analysis is
more important than the first.” Id. at 42 (citation and internal
quotation marks omitted). Third, we examine the nature of the
right asserted. “If a claim that is legal in nature asserts a ‘pub-
lic right,’ . . . then the Seventh Amendment does not entitle
the parties to a jury trial if Congress assigns its adjudication
to an administrative agency or specialized court of equity.” Id.at 42 n.4. A case asserts a public right if it “arise[s] between
the Government and persons subject to its authority in con-
4
In Sigma Micro Corp. v. Healthcentral.com (In re Healthcentral.com),
504 F.3d 775, 788 (9th Cir. 2007), we held that, after a party identifies a
valid right to a Seventh Amendment jury trial in bankruptcy proceedings,
“the bankruptcy court may retain jurisdiction over the action for pre-trial
matters.” The right to a jury trial in that case was not disputed, and the
case did not involve an issue of attorney fees.
HALE v. U.S. TRUSTEE 16203
nection with the performance of the constitutional functions
of the executive or legislative departments,” id. at 51 n.8
(internal quotation marks omitted), or involves “a seemingly
private right” created by Congress “that is so closely inte-
grated into a public regulatory scheme as to be a matter
appropriate for agency resolution with limited involvement by
the Article III judiciary,” id. at 54 (internal quotation marks
omitted).
[2] In conformity with those principles, Hale’s argument is
foreclosed by In re Wood, 210 U.S. 246 (1908). In Wood, the
Supreme Court examined whether the Bankruptcy Act of
1898, ch. 541, § 60d, 30 Stat. 544, 562 (codified as amended
at 11 U.S.C. § 96(d)), a statutory predecessor to 11 U.S.C.
§ 329, violated the Seventh Amendment. 210 U.S. at 258.
Section 60d, like § 329, authorized a bankruptcy court to
examine the reasonableness of a debtor’s attorney fees and to
disgorge fees that the court deemed excessive. Wood, 210
U.S. at 250. The Supreme Court expressly held that this pro-
vision did “not deprive parties of rights secured under the 7th
Amendment of the Constitution to trials by jury in suits at
common law where the value in controversy exceeds $20.” Id.
at 258. Section 60d is indistinguishable in all relevant respects
from its successor at issue in this case, 11 U.S.C. § 329.
[3] The Supreme Court has not overruled Wood. In addi-
tion, Wood is consistent with, and reaffirmed by, Granfinanci-
era. Determining the reasonableness of a debtor’s attorney
fees is not analogous to a common-law cause of action ordi-
narily decided in English law courts in the late 18th century;
instead, it is closely integrated into the public regulatory
scheme of bankruptcy law that Congress created. We hold
that Wood remains binding precedent and forecloses Hale’s
argument that the Seventh Amendment includes a right to a
jury trial on the reasonableness of attorney fees in bankruptcy
proceedings.
16204 HALE v. U.S. TRUSTEE
B. The bankruptcy court did not abuse its discretion in dis-
gorging Hale of his attorney fees.
Hale asks us, should we disagree with his Seventh Amend-
ment argument, to examine the reasonableness of his attorney
fees. He argues that the question of reasonableness is an
“issue [that] still has not been decided in this case.” He is mis-
taken. The bankruptcy court squarely ruled that Hale’s fees
were unreasonable and, pursuant to its authority under 11
U.S.C. § 329(b), ordered that the fees be disgorged.
[4] Under § 329(b), a bankruptcy court may examine the
reasonableness of a debtor’s attorney fees and, “[i]f such com-
pensation exceeds the reasonable value of any such services,
the court may cancel any such agreement, or order the return
of any such payment, to the extent excessive.” Here, the only
service Hale provided to Debtors was the completion of a
bankruptcy petition that was incomplete and erroneous and
that required extensive amendments. He failed to inform
Debtors about the bankruptcy process, obtain their informed
consent to his limited representation, or notify them about the
impending meeting of creditors. Instead, he attempted to per-
suade them to dismiss their petition without explaining why
or how it would affect their rights. Debtors ultimately paid
$1000 to correct and supplement the work that Hale per-
formed. The bankruptcy court did not abuse its discretion in
disgorging Hale of his attorney fees.
C. The bankruptcy court did not abuse its discretion in
sanctioning Hale.
[5] Finally, Hale argues that he was not given notice of, and
an opportunity to respond to, the U.S. Trustee’s motion for
sanctions against him. This argument is belied by the record.
The U.S. Trustee filed an amended motion for sanctions more
than six weeks in advance of the hearing, and the Trustee
served Hale with the motion at two separate addresses in
accordance with the applicable procedural rules. Hale there-
HALE v. U.S. TRUSTEE 16205
fore knew (or should have known) about the motion for sanc-
tions when he filed a motion two days before the hearing, in
which he told the bankruptcy court that “[his] presence [wa]s
not mandated or necessary to the adjudication of the issues.”
Hale also argues that the bankruptcy court improperly
imposed sanctions under Federal Rule of Bankruptcy Proce-
dure 9011. Under Rule 9011(c), “[i]f . . . the court determines
that [9011](b) has been violated, the court may . . . impose an
appropriate sanction upon the attorneys, law firms, or parties
that have violated subdivision (b) or are responsible for the
violation.” The bankruptcy court sanctioned Hale for violating
9011(a), not 9011(b). Nowhere in its decision does the bank-
ruptcy court even mention Rule 9011(b), although this omis-
sion is not surprising. Rule 9011(b) concerns papers signed,
filed, submitted, or advocated to the court in bad faith, while
the bankruptcy court found that Hale took none of those
actions—specifically to avoid liability under the Rule. Hale’s
evasive tactics notwithstanding, the plain text of Rule 9011(c)
does not authorize sanctions for violating Rule 9011(a).
[6] But “bankruptcy courts have the inherent power to
sanction vexatious conduct presented before the court.” Cald-
well v. Unified Capital Corp. (In re Rainbow Magazine, Inc.),
77 F.3d 278, 284 (9th Cir. 1996). “These powers are ‘gov-
erned not by rule or statute but by the control necessarily
vested in courts to manage their own affairs so as to achieve
the orderly and expeditious disposition of cases.’ ” Id. at 283(quoting Chambers v. NASCO, Inc., 501 U.S. 32, 43 (1991)).
The U.S. Trustee included this authority as a ground for
imposing sanctions in its motion, and the bankruptcy court
invoked this authority as an alternative basis for imposing
sanctions. See DeVille, 361 F.3d at 550 n.4 (noting that an
appellate court will not “overturn the bankruptcy court’s deci-
sion merely because that court applied the wrong label to the
righteous use of its inherent sanction power” (internal quota-
tion marks omitted)).
16206 HALE v. U.S. TRUSTEE
In an effort to avoid liability, Hale did not sign Debtors’
bankruptcy petition. He had an extensive history—and an
ongoing practice—of similar violations. Despite assertions to
the contrary, he failed to obtain informed consent to his lim-
ited representation. He failed to inform his clients about the
meeting of creditors required under 11 U.S.C. § 341 and to
highlight the fact that he did not intend to represent them at
the meeting. He attempted to persuade his clients to dismiss
their bankruptcy petition without explaining why or what
prejudice they might suffer if they did so. When the bank-
ruptcy court inquired into his representation, he failed to
attend hearings, giving little or no advance notice of his
absence, and accused the court, on the basis of unaccredited
hearsay, of bias and impropriety.
[7] We agree with the bankruptcy court that it should “not
countenance Hale’s exclusion of critical and necessary ser-
vices, or endorse the pretense of adequately advised and
informed consent in Hale’s bankruptcy cases.” Although the
court effectively barred Hale from assisting pro se debtors in
a limited manner that allows the debtors to remain pro se, the
court ordered those sanctions in response to specific and
repeated acts of incompetent and irresponsible representation.
Under the specific facts of this case, we cannot say that the
bankruptcy court abused its inherent power to impose sanc-
tions.
AFFIRMED.