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A San Francisco lawyer committed misconduct and should pay his opponent’s attorney fees for trying to use bankruptcy court to delay a state court action, a 9th U.S. Circuit Court of Appeals panel said Monday. The attorney is solo Arlo Hale Smith, the son of longtime former San Francisco District Attorney Arlo Smith. The younger Smith could not be reached for comment. The 9th Circuit’s unanimous ruling in In re Deville, 04 C.D.O.S. 2249, upholds a lower court’s decision that Smith filed numerous actions in different venues in order to delay an action. Now, Smith and his client, Daniel Miller Jr., are liable for nearly $20,000 in attorney fees. U.S. Bankruptcy Judge Dennis Montali in San Francisco had hit Smith up for nearly twice as much, but a 9th Circuit U.S. Bankruptcy Appellate panel reduced the sanction before it reached the three-judge 9th Circuit panel. Smith and Miller were friends and business partners who owned a real estate firm. Besides having a law license, Smith was also a real estate broker, and Miller worked under Smith’s license. Smith had his bar card suspended in May 2001. It was reinstated two months later. In 1998, Noreen Cardinale filed a state court suit against Miller; the 9th Circuit’s opinion does not say why. Rather than fight the case, Smith and Miller tried to delay it with bankruptcy filings and notices of removal, according to court documents. Going to bankruptcy court halted the state court action, and Cardinale’s attorney, Thomas Eastridge of Alameda, Calif.’s Caron & Eastridge, had to file papers to try to get it sent back. Eastridge also could not be reached for comment Monday. The 9th Circuit called Smith’s behavior “preposterous misconduct” but does not get into much detail in its 26-page opinion because Smith does not take issue with that accusation. Rather, Senior U.S. Judge Louis Pollack of the Eastern District of Pennsylvania, sitting by designation, spends more time on whether a bankruptcy judge has the authority to require an attorney to pay another’s fees. Smith argued that his right to due process was violated and that the bankruptcy court does not have the authority to impose such monetary sanctions. Pollack disagreed. “Smith and Miller were fully advised of the conduct charged against them and of the fact that the bankruptcy court deemed the charged conduct to have been pursued in bad faith,” Pollack wrote, citing the lower court’s record. In fact, Pollack said that because of the bankruptcy court’s “inadequacy of rules and statutes to sanction … misconduct” the court properly relied on “its inherent power as a sanctioning tool.” Judges Betty Fletcher and A. Wallace Tashima concurred.

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