Memorandum of Decision Re: Attorney For Trustee Not Member of California Bar

IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re MICHAEL and KAREN LAWRENCE,                                               No. 94-1002      Debtors. ___________________________/ In re STEVE T. RUDONI,                                                                            No. 93-13132      Debtor. ___________________________/ In re PAUL DAVID MILLER,                                                                     No. 94-10744      Debtor. ___________________________/
ORDER DENYING APPLICATION FOR APPOINTMENT OF ATTORNEY FOR TRUSTEE
     The trustee in these Chapter 7 cases has asked the court to approve the appointment of an attorney who is not a member of the State Bar of California. The proposed attorney has moved to California from Michigan and opened up a local office, but has not become a member of the California bar.      Although the proposed attorney is admitted to practice in this court by virtue of his membership in the bar of another state, this does not automatically mean that the court must appoint him as counsel in bankruptcy proceedings. While the court rarely denies the trustee leave to employ whomever he wishes, the court is obligated to exercise its discretion in order to protect the estate. It is not in the best interest of the bankruptcy estates to employ an attorney who has moved to California but has not become a member of the California bar.      This is the first time that a panel trustee has sought to employ an attorney who is not a member of the California bar in this court. The court has experienced great difficulties with debtors in possession who have used out-of-state counsel, and understands that as a result of these problems and those experienced in other courts that the district court is moving to change its rules so that such counsel cannot set up permanent shop here without becoming a member of the California Bar. Among other problems, such attorneys are immune from discipline by California and often mislead members of the public who do not understand the nuances of federal as opposed to state practice.      The court does not have the resources to police the actions of its bar. Attorneys for trustees are often placed in very sensitive fiduciary positions. The State Bar of California exercises increasingly effective oversight over members of its bar. It is not in the best interest of bankruptcy estates to employ professionals who are immune from such oversight.      For the foregoing reasons, the trustee's application will be denied. Any request for reconsideration shall be by motion noticed to the debtors, all creditors, and the U.S. Trustee.      SO ORDERED.
Dated: May 10, 1994                                                                                                   _______________________                                                                                                                                                    Alan Jaroslovsky                                                                                                                                                    U.S. Bankruptcy