Attorney Sanctioned for Using DocuSign for Bankruptcy Filing

July 18, 2016, 10:08 PM

By Daniel Gill, Bloomberg BNA

A bankruptcy attorney was ordered to complete the local online e-filing training course because he failed to keep original signature pages, instead relying on the electronic service DocuSign for his client’s signatures on bankruptcy filing documents.

Judge Robert S. Bardwil of the U.S. Bankruptcy Court for the Eastern District of California ordered attorney Pauldeep Bains to attend the training course in response to a motion brought by the Office of the United States Trustee. The OUST is a component of the Department of Justice charged with overseeing the administration of bankruptcy cases and private bankruptcy trustees.

Most, if not all, bankruptcy courts in the U.S. require parties to file court documents electronically. When Bains filed a bankruptcy case for a client, he used the popular electronic signing service DocuSign, a company based in San Francisco and Seattle. According to the company’s website, DocuSign has more than 85 million users in 188 countries.

However, most, if not all, bankruptcy courts have local rules governing the practice of filing documents. In the U.S. Bankruptcy Court for the Eastern District of California, Local Bankruptcy Rule 9004–1 controls. That section provides that electronically filed documents may reflect being signed by the use of “/s/” followed by the signatory’s name.

LBR 9004-1(D) requires that the filing party — here, the attorney — retain copies of the original actual signed document for at least three years from the close of the case. Bains did not have any such original, “wet” signatures in his possession.

Even though the local rule contemplates “software-generated signatures,” it also provides that counsel must maintain on file a copy of actual, handwritten signatures. This requirement “helps ensure the authenticity of documents filed with the Court,” the court said. The court rejected the attorney’s argument that the DocuSigned documents were “originally signed,” and concluded that they were indeed software-generated signatures, requiring a corresponding handwritten signature to be held by counsel.

“Although DocuSign affixations and other software-generated electronic signatures may have a place in certain commercial and other transactions, they do not have a place as substitutes for wet signatures on a bankruptcy petition, schedules, statements, and other documents filed with the court, and they do not comply with this court’s local rule,” the court said.

Pauldeep Bains, Sacramento, Calif. appeared for the debtor and on his own behalf. The US Trustee appeared by Jason M Blumberg, Sacramento, Calif.

In re Mayfield, 2016 BL 228384, Bankr. E.D. Cal., No. UST-1, 7/15/16

To contact the reporter on this story: Daniel Gill in Washington at dgill@bna.com

To contact the editor responsible for this story: Jay Horowitz at jhorowitz@bna.com

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