Challenge filed to rule that bar’s inactive lawyers from working as neutrals

A Los Angeles lawyer on Monday filed a challenge to a State Bar rule that forbids attorneys with an inactive license from working as a private arbitrator or mediator.

Leonard Steiner represents Morris Getzels who is 72, and was first admitted to the bar in 1976. Last November, Getzels retired from the practice of law but wants to continue to work as an arbitrator and mediator. He has worked as a neutral for 25 years, mostly in matters involving the Financial Industry Regulatory Authority, and is currently on FINRA's California roster of arbitrators and mediators.

To continue to do that, Getzels would have to pay annual bar dues, currently $515 for active members, and complete continuing education requirements.

"There is no rational basis for prohibiting inactive members of the State Bar from acting as private arbitrators and mediators in California," Steiner wrote in his complaint against the State Bar filed in Los Angeles County Superior Court. Getzels v. State Bar of California, 23STCV18632 L.A. Super. Ct., (filed Aug. 7, 2023).

In a statement, the State Bar said: "The Office of General Counsel has communicated with Mr. Steiner on the issues raised in his complaint. We appreciate his raising of important issues related to licensee status for those attorneys doing work in other areas and/or licensed by other licensing agencies. We have advised Mr. Steiner that we intend to explore the policy consideration his complaint raised, and make recommendations to the Board, if and as appropriate."

Heather L. Rosing, a professional responsibility lawyer and CEO and president of Klinedinst PC, said, "I have run across and heard about this issue over the years, primarily from neutrals who would prefer not to pay the fee and take the CLE classes."

Rosing said the State Bar, in the course of this lawsuit, will likely have to "articulate the rationale and reasoning for the rule, and to consider whether it can be more narrowly tailored.

"If there ultimately was an exception for neutrals created, there would need to be a lot more precision about what constitutes a neutral and who qualifies for the exception," Rosing said. "For example, one could make the case that a mediator does not need a law license, but it becomes more difficult, for example, if the neutral is acting as a special master, making legal rulings based on current California law."

In a phone conversation, Steiner of Steiner & Libo pointed out that inactive attorneys are allowed to act as referees and special masters if they are court appointed.

Steiner argues in his lawsuit that sections (b) and (c) of State Bar Rule 2.30 violate the rights of inactive members to the equal protection of the law under the 14th Amendment to the U.S. Constitution and Article I, Section 7 of the California Constitution. He wants a judge to declare those sections of the rule unconstitutional and issue a permanent injunction against their enforcement.

Steiner said the rule also disproportionately affects elderly people. He pointed out that there are roughly 74,000 members of the California bar currently on inactive status.

"It appears that there is no other classification of persons in California prohibited from acting as private arbitrators and mediators," he wrote.

People who are not attorneys or have never been licensed to practice in California can work as private mediators.

To underscore what he believes is the absurdity of the rule, Steiner wrote in his complaint a long list of categories of people who could work as private neutrals in California without an active bar card, including criminals, football players, Uber drivers and 10-year olds. He also pointed out that disbarred attorneys and suspended attorneys can work as arbitrators as long as they make disclosures to the parties.

"There's no logic to it," he said in a phone interview.