In re: Emma Noemi Hobbs

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: October 13, 2016
• Docket: AZ-15-1397-LJuF
• Status: Unpublished

Opinion

FILED OCT 13 2016 1 NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT

3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. AZ-15-1397-LJuF ) 6 EMMA NOEMI HOBBS, ) Bk. No. 4:13-bk-06690-BMW ) 7 Debtor. ) ______________________________) 8 ) EMMA NOEMI HOBBS, ) 9 ) Appellant, ) 10 ) v. ) MEMORANDUM* 11 ) STATE OF ARIZONA, ) 12 ) Appellee. ) 13 ) 14 Argued and Submitted on September 23, 2016 at Phoenix, Arizona 15 Filed - October 13, 2016 16 Appeal from the United States Bankruptcy Court 17 for the District of Arizona 18 Honorable Brenda Moody Whinery, Bankruptcy Judge, Presiding ________________________ 19 Appearances: Gove L. Allen argued for Appellant Emma Noemi 20 Hobbs; Kelly Elaine Gillilan-Gibson and Valerie Love Marciano argued for Appellee State of Arizona 21 ________________________ 22 Before: LAFFERTY, JURY, and FARIS, Bankruptcy Judges. 23 24 25 26 * This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. 28 See 9th Cir. BAP Rule 8024-1. 1 I. INTRODUCTION 2 Debtor objected to the State of Arizona’s (“Arizona”) 3 amended proof of claim, which was based on a state court judgment 4 (“Judgment”) in favor of Arizona that included $70,000 in civil 5 penalties against Debtor and others. Debtor argued that the debt 6 was discharged because Arizona had not filed a timely complaint 7 to determine nondischargeability. The bankruptcy court overruled 8 Debtor’s objection, finding that the civil penalty was 9 automatically nondischargeable under § 523(a)(7).1 Several 10 months later, Debtor moved for reconsideration of the bankruptcy 11 court’s order, asserting that the state court had not assessed a 12 penalty against Debtor in her sole and separate capacity, that 13 her state court attorney had been negligent, and that Arizona’s 14 attorney had made false representations to the state court. The 15 bankruptcy court denied the motion as baseless. 16 The pleadings underlying the Judgment suggest that the civil 17 penalties were intended to be assessed only against Debtor’s 18 marital community interest. Moreover, in the state court action, 19 Arizona sought a penalty of $10,000 per defendant. Nevertheless, 20 the Judgment contains a finding that Debtor is liable for civil 21 penalties and awards Arizona a total of $70,000 without 22 differentiating among the defendants. For the reasons explained 23 below, the bankruptcy court correctly found that it lacked 24 jurisdiction to look behind or modify the Judgment. Accordingly, 25 1 26 Unless otherwise indicated, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and 27 “Rule” references are to the Federal Rules of Bankruptcy Procedure. “Civil Rule” references are to the Federal Rules of 28 Civil Procedure.

-2- 1 we AFFIRM. 2 II. FACTUAL BACKGROUND 3 In 2008, Arizona sued Appellant-Debtor Emma Hobbs and others 4 in Pima County Superior Court for injunctive and other relief for 5 violations of Arizona’s Consumer Fraud Act (“CFA”). Mrs. Hobbs 6 and her husband were both named as defendants in that lawsuit, 7 individually and as a marital community. On January 27, 2010, 8 the state court granted Arizona’s motion for partial summary 9 judgment, finding all defendants liable under the CFA. 10 Thereafter, Arizona moved for partial summary judgment seeking 11 injunctive relief, restitution, civil penalties, and attorneys’ 12 fees, which the state court also granted. Both of Arizona’s 13 summary judgment motions defined “Defendants” as seven parties, 14 not including Mrs. Hobbs, and stated that Mrs. Hobbs was a 15 defendant for community property purposes. Arizona’s second 16 summary judgment motion requested “that each Defendant be 17 assessed one civil penalty of $10,000.00 for a total of 18 $70,000.00.” On August 24, 2010, the state court entered the 19 Judgment in favor of Arizona, which included $70,000 in civil 20 penalties under Ariz. Rev. Stat. § 44-1531.2 Mrs. Hobbs did not 21 move for reconsideration or appeal the Judgment. 22 Mrs. Hobbs filed an individual chapter 7 petition on 23 April 24, 2013. Arizona filed a timely proof of claim that it 24 2 That statute provides: 25 26 If a court finds that any person has wilfully violated § 44-1522, the attorney general upon petition to the 27 court may recover from the person on behalf of the state a civil penalty of not more than ten thousand 28 dollars per violation.

-3- 1 later amended, asserting a claim of $635,014.60 based on the 2 Judgment. The claim included the $70,000 in civil penalties 3 awarded to Arizona and designated those penalties as 4 nondischargeable under § 523(a)(7). That section excepts from 5 discharge (subject to exceptions that are not applicable here) a 6 debt for a “fine, penalty, or forfeiture payable to and for the 7 benefit of a governmental unit, [that] is not compensation for 8 actual pecuniary loss[.]” § 523(a)(7). 9 Mrs. Hobbs objected to Arizona’s claim, arguing that the 10 entire claim was dischargeable because Arizona had not filed a 11 timely complaint objecting to dischargeability of the penalty 12 portion. Mrs. Hobbs also asserted that she was not involved in 13 the actions giving rise to the consumer fraud claim and that the 14 Judgment should have been entered against her only to the extent 15 necessary to bind the marital community. Mrs. Hobbs pointed out 16 that she had listed on her bankruptcy schedules a negligence 17 claim against her state court counsel for allowing the Judgment 18 to be entered against her.3 19 At the hearing on the claim objection, the bankruptcy court 20 found that it lacked the ability to set aside the Judgment and 21 that the civil penalties were automatically excepted from 22 discharge under § 523(a)(7). Thereafter, on January 18, 2015, 23 the bankruptcy court entered an order overruling Mrs. Hobbs’ 24 objection to Arizona’s claim. 25 Seven months later, on August 22, 2015, Mrs. Hobbs, through 26 27 3 Mrs. Hobbs also argued that the claim was unsecured 28 because she owns no property. Arizona conceded that point.

-4- 1 new counsel, moved for rehearing. Mrs. Hobbs did not contest the 2 bankruptcy court’s conclusion that the penalties were 3 nondischargeable under § 523(a)(7). Instead, Mrs. Hobbs again 4 contended that she was not liable for the penalties because she 5 was not personally involved in the conduct giving rise to the 6 consumer fraud claim, and that the attorneys involved in the 7 original hearing on her objection to Arizona’s claim were grossly 8 negligent or dishonest in not pointing out to the bankruptcy 9 court that the Judgment was not against Mrs. Hobbs in her “sole 10 and separate property capacity.” Mrs. Hobbs also argued that the 11 Judgment was not entitled to preclusive effect.4 12 After a hearing, the bankruptcy court denied Mrs. Hobbs’ 13 motion for rehearing, finding that Mrs. Hobbs had not established 14 any grounds for relief under Civil Rule 60(b) (applicable in 15 bankruptcy via Rule 9024). The bankruptcy court determined that 16 Mrs. Hobbs had not shown that the court’s initial interpretation 17 of the Judgment was incorrect, and that the Judgment was entitled 18 to be given full faith and credit. Mrs. Hobbs timely appealed. 19 III. JURISDICTION 20 The bankruptcy court had jurisdiction pursuant to 28 U.S.C. 21 §§ 1334 and 157(b)(2)(B) and (I). We have jurisdiction under 22 4 23 Mrs. Hobbs’ counsel uses the terms “collateral estoppel” and “res judicata” in his briefing in the bankruptcy court and 24 before this Panel. We refer to these doctrines as “issue preclusion” and “claim preclusion,” respectively, to conform to 25 the Restatement (Second) of Judgments and United States Supreme 26 Court usage. See Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 77 n.1 (1984); Robi v. Five Platters, Inc., 838 F.2d 27 318, 321 n.2 (9th Cir. 1988); The Alary Corp. v. Sims (In re Associated Vintage Group, Inc.), 283 B.R. 549, 554-55 (9th 28 Cir. BAP 2002).

-5- 1 28 U.S.C. § 158. 2 IV. ISSUE 3 Did the bankruptcy court abuse its discretion in denying 4 Mrs. Hobbs’ motion for rehearing of the order overruling her 5 objection to Arizona’s claim? 6 V. STANDARD OF REVIEW 7 We review denials of motions for relief under Civil 8 Rule 60(b) for abuse of discretion. See United States v. 9 Stonehill, 660 F.3d 415, 443 (9th Cir. 2011). Accordingly, we 10 reverse only where the bankruptcy court applied an incorrect 11 legal rule or where its application of the law to the facts was 12 illogical, implausible, or without support in inferences that may 13 be drawn from the record. Ahanchian v. Xenon Pictures, Inc., 14 624 F.3d 1253, 1258 (9th Cir. 2010) (citing United States v. 15 Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc)). 16 An appeal from an order denying a Civil Rule 60 motion that 17 was filed more than 14 days after the underlying order or 18 judgment raises only the merits of the order denying the motion 19 and does not raise the merits of the underlying judgment or 20 order. See Maraziti v. Thorpe, 52 F.3d 252, 254 (9th Cir. 1995). 21 VI. DISCUSSION 22 A. Standard on Motion for Rehearing 23 Mrs. Hobbs moved for rehearing under § 105(a), Rule 3008, 24 and Civil Rule 60(b)(6).5 Rule 3008 permits a party in interest 25 5 26 Pursuant to § 105(a), the bankruptcy court may reconsider, modify, or vacate its previous orders, but such 27 relief is sought by motion under Rule 9024. Meyer v. Lenox (In re Lenox), 902 F.2d 737, 739-40 (9th Cir. 1990). In other 28 (continued...)

-6- 1 to move for reconsideration of an order allowing or disallowing a 2 claim against the estate. Under Civil Rule 60(b), the court may 3 relieve a party from a final judgment, order, or proceeding for 4 any of six enumerated reasons, including the ground invoked by 5 Mrs. Hobbs here: “any other reason that justifies relief.” Civil 6 Rule 60(b)(6).6 7 B. Mrs. Hobbs did not demonstrate that relief was warranted 8 under Civil Rule 60(b)(6). 9 In ruling on the initial objection, the bankruptcy court 10 concluded that the Judgment was clear on its face in establishing 11 that Mrs. Hobbs was liable for the $70,000 in civil penalties. 12 The Judgment provides, in relevant part: 13 By Minute Entry filed January 28, 2010, the Court granted the State’s Motion for Partial Summary Judgment 14 as to Liability against Defendants . . . Emma Hobbs . . . . By Minute Entry filed July 16, 2010, the Court 15 granted the State’s Motion for Partial Summary Judgment for Injunctive Relief, Restitution, Civil Penalties and 16 Attorney’s Fees against Defendants. 17 . . . . 18 2. Defendants[] wilfully violated A.R.S. § 44-1552 and are liable for civil penalties pursuant to A.R.S. 19 § 44-1531. 20 5 (...continued) 21 words, § 105(a) does not provide an independent ground for 22 relief. 6 23 The other enumerated grounds for relief under Civil Rule 60(b) are (1) mistake, inadvertence, surprise, or excusable 24 neglect; (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a 25 new trial under Rule 59(b); (3) fraud (whether previously called 26 intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; (4) the judgment is void; and (5) the judgment 27 has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying 28 it prospectively is no longer equitable.

-7- 1 . . . . 2 IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that Claude Thomas Kennedy, Martina J. Alsemgeest, 3 Donald W. Kennedy, Granite Hobbs, Emma Hobbs, Kennedy Motorhome Services, LLC, Kennedy's Financial Services, 4 LLC, Kenneth W. Griffith and Banker’s First of Tucson, LLC be and hereby are permanently enjoined, directly or 5 indirectly, from engaging in any fraudulent, deceptive or illegal acts or practices in violation A.R.S. 6 § 44 1522; and it is further 7 ORDERED, ADJUDGED, AND DECREED that Defendants Claude Thomas Kennedy, Martina J. Alsemgeest, Donald W. 8 Kennedy, Granite Hobbs, Emma Hobbs, Kennedy Motorhome Services, LLC, Kennedy’s Financial Services, LLC, 9 Kenneth W. Griffith and Banker’s First of Tucson, LLC be and hereby are permanently enjoined directly or 10 indirectly from engaging in the advertisement and/or sale of Financial Services to or from Arizona now and 11 in the future; and it is further 12 ORDERED, ADJUDGED, AND DECREED that Defendants, joint and severally, pay $494,364.00 in restitution to 13 the Arizona Attorney General’s Office pursuant to A.R.S. § 44-1528(2); and it is further 14 ORDERED, ADJUDGED, AND DECREED that the Plaintiff 15 be awarded $70,000.00 in civil penalties pursuant to A.R.S. § 44-1531[.] 16 17 Judgment, August 24, 2010, Pima County Superior Court Case No. 18 C2007 7274. 19 We find no error in the bankruptcy court’s interpretation of 20 the Judgment that the civil penalties are against all defendants, 21 including Mrs. Hobbs. The state court determined that 22 “Defendants[] wilfully violated A.R.S. § 44-1552 and are liable 23 for civil penalties pursuant to A.R.S. § 44-1531.” Mrs. Hobbs is 24 included as a named defendant in the lawsuit in her individual 25 capacity, and despite the wording of Arizona’s summary judgment 26 motions, nothing in the Judgment suggests that Mrs. Hobbs’ 27 liability was limited to the marital community. 28 On appeal, Mrs. Hobbs contends that (1) the bankruptcy court

-8- 1 improperly applied the Rooker-Feldman doctrine in concluding that 2 it had no power to look behind the Judgment; (2) the bankruptcy 3 court should have reviewed the record of the Superior Court case 4 to determine whether Mrs. Hobbs was liable for the civil 5 penalties; (3) the requirements for the application of issue 6 preclusion in determining that Mrs. Hobbs was liable were not 7 satisfied; and (4) the bankruptcy court erroneously denied the 8 motion for rehearing because Arizona’s claim is based on a “false 9 debt.” Because the first issue is dispositive, we need not 10 extensively analyze the remaining issues. 11 1. Full Faith and Credit and the Rooker-Feldman doctrine precluded the bankruptcy court from looking behind the 12 Judgment. 13 Federal courts are bound by 28 U.S.C. § 1738 to give full 14 faith and credit to state court judgments. Robi v. Five 15 Platters, Inc., 838 F.2d 318, 322 (9th Cir. 1988).7 16 17 7 28 U.S.C. § 1738 provides: 18 The Acts of the legislature of any State, Territory, or 19 Possession of the United States, or copies thereof, shall be authenticated by affixing the seal of such 20 State, Territory or Possession thereto.

21 The records and judicial proceedings of any court of any such State, Territory or Possession, or copies 22 thereof, shall be proved or admitted in other courts 23 within the United States and its Territories and Possessions by the attestation of the clerk and seal of 24 the court annexed, if a seal exists, together with a certificate of a judge of the court that the said 25 attestation is in proper form. 26 Such Acts, records and judicial proceedings or copies 27 thereof, so authenticated, shall have the same full faith and credit in every court within the United 28 (continued...)

-9- 1 Additionally, the Rooker-Feldman doctrine bars a lower federal 2 court, including a bankruptcy court, from reviewing a state 3 court’s final decision. See Worldwide Church of God v. McNair, 4 805 F.2d 888, 890 (9th Cir. 1986) (citing Rooker v. Fidelity 5 Trust Co., 263 U.S. 413, 415-16 (1923); District of Columbia 6 Court of Appeals v. Feldman, 460 U.S. 462, 476 (1983)). 7 However, the Rooker-Feldman doctrine 8 is confined to cases of the kind from which the doctrine acquired its name: cases brought by 9 state-court losers complaining of injuries caused by state-court judgments rendered before the district 10 court proceedings commenced and inviting district court review and rejection of those judgments. Rooker- 11 Feldman does not otherwise override or supplant preclusion doctrine or augment the circumscribed 12 doctrines that allow federal courts to stay or dismiss proceedings in deference to state-court actions. 13 14 Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 15 (2005). 16 Accordingly, the Rooker-Feldman doctrine does not ordinarily 17 preclude a bankruptcy court from examining the record in a state 18 court case to determine whether issue preclusion applies to 19 establish the elements of a nondischargeability claim. See Lopez 20 v. Emergency Serv. Restoration, Inc. (In re Lopez), 367 B.R. 99, 21 103 (9th Cir. BAP 2007). This is because dischargeability is 22 ordinarily a separate federal question over which the bankruptcy 23 court has exclusive jurisdiction. Id. (citing Brown v. Felsen, 24 442 U.S. 127, 138 (1979)). “[A] nondischargeability claim is an 25 26 7 (...continued) 27 States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory 28 or Possession from which they are taken.

-10- 1 independent federal claim as to which the effect of a prior state 2 court judgment is governed by principles of preclusion.” Id. 3 (citing Grogan v. Garner, 498 U.S. 279, 284 n.11 (1991); Brown, 4 442 U.S. at 132). 5 However, when determining nondischargeability under 6 § 523(a)(7), the bankruptcy court’s review is limited to 7 determining the nature of the debt, not the debtor’s conduct or 8 the correctness of the judgment. Colorado v. Jensen 9 (In re Jensen), 395 B.R. 472, 488 (Bankr. D. Colo. 2008). 10 [A] governmental unit that has obtained a judgment may tender to the bankruptcy court a copy of the judgment 11 and rest its case under § 523(a)(7). The bankruptcy court then has to examine that judgment to determine 12 whether the obligation evidenced in it is in the nature of a “fine, penalty, or forfeiture,” whether the debt 13 is payable to and for the benefit of the government, and whether it represents something other than 14 compensation for actual pecuniary losses. Of course, the bankruptcy court is not precluded from examining 15 the true nature of the debt rather than any label that may be attached to it in the judgment. But nothing in 16 this line of inquiry requires or even allows the bankruptcy court to determine whether the debtor did in 17 fact violate a law, giving rise to the imposition of a fine, penalty or forfeiture. The validity and amount 18 of the debt, including whether the debtor committed a violation of the law, are no longer relevant. 19 20 Id. (citation omitted) (emphasis added). 21 Because the bankruptcy court looks only to the nature of the 22 obligation represented by the judgment, any attack on the 23 underlying finding of culpability is prohibited by the Rooker- 24 Feldman doctrine. See Arizona v. Ott (In re Ott), 218 B.R. 118, 25 125 (Bankr. W.D. Wash. 1998). 26 Here, the bankruptcy court determined that the civil 27 penalties met the criteria for nondischargeability under 28 § 523(a)(7). Mrs. Hobbs does not challenge that determination.

-11- 1 Instead, she seeks to attack the underlying finding of liability, 2 which is specifically prohibited under Rooker-Feldman. 3 2. The doctrine of issue preclusion did not require the bankruptcy court to review the record in the state 4 court litigation. 5 Mrs. Hobbs argues that the bankruptcy court incorrectly 6 applied issue preclusion in determining that the civil penalties 7 were nondischargeable. This argument reflects a misunderstanding 8 of the bankruptcy court’s ruling and the applicable law. 9 The bankruptcy court did not apply issue preclusion in 10 determining that the civil penalties were nondischargeable. As 11 explained above, the bankruptcy court was required only to 12 examine the Judgment to determine whether the civil penalties at 13 issue represented a debt for a “fine, penalty, or forfeiture 14 payable to and for the benefit of a governmental unit, [that] is 15 not compensation for actual pecuniary loss[.]” § 523(a)(7). 16 Once the bankruptcy court made that determination, no further 17 analysis was required. See In re Jensen, 395 B.R. at 488. 18 3. Mrs. Hobbs’ remaining arguments are foreclosed by the Rooker-Feldman doctrine. 19 20 The rest of Mrs. Hobbs’ arguments focus on the 21 inconsistencies between Arizona’s motions and the Judgment. 22 However, as noted, the bankruptcy court was required to give full 23 faith and credit to the Judgment, which clearly imposes civil 24 penalties against Mrs. Hobbs individually. Any error in the 25 underlying state court findings should have been addressed in a 26 motion for reconsideration or an appeal to the appropriate state 27 tribunal; the bankruptcy court was without jurisdiction to alter 28 the Judgment.

-12- 1 C. The Judgment is not consistent with the evidence presented 2 or arguments made to the state court. 3 And one last point. 4 For the reasons noted above, we have concluded that, under 5 the Rooker-Feldman doctrine, the bankruptcy court’s decision was 6 correct. However, we also note here, as we noted during 7 Arizona’s presentation at oral argument of this matter, that the 8 Judgment is not consistent with the evidence or the arguments 9 presented by the Arizona attorney general’s office. We raise the 10 point explicitly, if briefly, in the hope that Arizona’s 11 attorneys will move the state court to correct their error. 12 Arizona filed two motions for summary judgment. The first 13 sought a determination of liability, and the second sought the 14 imposition of remedies. Both motions carefully defined the term 15 “Defendant” to mean only seven of the named defendants, not 16 including Mrs. Hobbs. Both motions stated that Mrs. Hobbs and 17 another defendant were “defendants for community property 18 purposes.” The motions argued, and offered evidence, that the 19 “Defendants” violated the CFA. Because Mrs. Hobbs was not one of 20 the “Defendants,” the motions did not argue or prove that she 21 violated the CFA. According to the motions, Mrs. Hobbs’ only 22 involvement in the scheme is that her husband, who is one of the 23 “Defendants,” “acted on behalf of the marital community,” that 24 she “received money” from a company that was among the 25 “Defendants,” and that “Defendants’ marital communities 26 benefitted from Defendants’ violation(s) of the CFA.” Neither 27 motion argued that this limited involvement subjected Mrs. Hobbs 28 to personal liability for penalties.

-13- 1 The second motion makes the situation even more clear: 2 [T]he State respectfully requests that each Defendant be assessed one civil penalty of $10,000.00 for a total 3 of $70,000.00. 4 Arizona again used the defined term “Defendants,” which did not 5 include Mrs. Hobbs. Simple arithmetic further confirms that 6 Arizona sought penalties against only the seven “Defendants,” not 7 Mrs. Hobbs. 8 Unfortunately, Arizona’s attorneys did not draft the 9 proposed judgment which they presented to the state court with 10 the same care and precision as the motions. The Judgment uses 11 the term “Defendants” but does not include the definition 12 provided in the motions. The Judgment grants $70,000.00 in civil 13 penalties but does not explain that the penalties apply to only 14 seven of the defendants. 15 Put simply, Arizona’s attorneys presented to the state court 16 a judgment which their evidence and arguments do not support. 17 For the same reasons that compel us to affirm the decision 18 of the bankruptcy court, i.e., the Rooker-Feldman doctrine’s 19 prohibition on federal courts acting as courts of appeal from 20 state court judgments, neither this court, nor any other federal 21 court, is empowered now to probe the basis for the obvious 22 defects in the judgment presented to the state court. To be 23 sure, on the spectrum of likely scenarios, we surmise that the 24 disconnect between, on the one hand, the claims stated and the 25 evidence presented by Arizona and, on the other, the form of 26 judgment prepared by Arizona that was ultimately entered by the 27 state court, is more likely the result of inadvertence and error 28 than a blatant attempt to mislead the state court and improperly

-14- 1 disadvantage a party. Yet, to this debtor, the effect even of 2 such inadvertence is just as ruinous as truly nefarious behavior 3 would have been. And there is no question but that, as officers 4 of the court, attorneys have a duty to correct mistakes such as 5 the ones presented here. 6 Moreover, the Arizona Supreme Court has recognized that a 7 government lawyer is a “shepherd of justice,” “with enormous 8 resources at her disposal,” and thus bears a heightened 9 responsibility to act ethically in all respects to avoid 10 undermining the public trust or inflicting severe damage to our 11 system of justice: “[T]his alone compels the responsible and 12 ethical exercise of this power.” In re Peasley, 90 P.3d 764, 13 772-73 (Ariz. 2004) (en banc) (citation omitted); see generally 14 In re City of Newark, 788 A.2d 776, 782 (N.J. Super. 2002) 15 (“Undoubtedly, the need to dispel all appearances of impropriety 16 becomes even more compelling and acute when the attorney is a 17 government lawyer.”); State ex rel. Neb. State Bar Ass’n v. 18 Rhodes, 453 N.W.2d 73, 90 (Neb. 1990) (“the conduct of a 19 government attorney is required to be more circumspect than that 20 of a private lawyer because improper conduct on the part of such 21 an attorney reflects upon the entire system of justice in terms 22 of public trust”). 23 This panel is powerless to correct this obvious error. But 24 Arizona’s attorneys can (and should) move the state court to 25 correct the Judgment which they should never have presented. 26 VII. CONCLUSION 27 Because the bankruptcy court did not abuse its discretion in 28 denying Mrs. Hobbs relief under Civil Rule 60(b), we AFFIRM.

-15-