BILL ANALYSIS SENATE JUDICIARY COMMITTEE Senator Ellen M. Corbett, Chair 2009-2010 Regular Session SB 1181 (Cedillo) As amended April 5, 2010 Hearing Date: April 20, 2010 Fiscal: Yes Urgency: No KB/AW:jd SUBJECT Shorthand Reporters: Transcript Reimbursement Fund DESCRIPTION This bill would extend the sunset on the Transcript Reimbursement Fund (TRF) administered by the Court Reporters Board of California (the board) from January 1, 2011 to January 1, 2013. The bill would expand the applicants authorized to obtain reimbursement from the fund to include indigent pro se litigants, as specified, up to a maximum of $30,000 annually and $2,500 per case, and require the board to report to the Legislature no later than January 1, 2012, on expenditures and claims by such litigants. The bill would also expand the types of services that may be reimbursed to include instant visual display services provided at depositions up to a maximum of $2,500 per case. BACKGROUND The Court Reporters Board of California is charged with certifying and regulating shorthand reporters. Since 1981, the board has been charged with administering the Transcript Reimbursement Fund (TRF). The purpose of the TRF is to ensure that low-income litigants in civil cases are able to afford deposition and court transcripts by reimbursing eligible applicants or certified shorthand reporters for the cost of preparing an original transcript and/or copy of a California state court or deposition proceeding. Litigants appearing pro se at any stage of a case are not able to apply for reimbursement from the TRF. (more) SB 1181 (Cedillo) Page 2 of ? In fiscal year 2008-09, the board received 363 claims for reimbursement and disbursed approximately $201 million to 330 applicant attorneys or shorthand reporters. Of the 33 claims denied, nine were from litigants who appeared pro se in the underlying case. This bill seeks to extend the sunset for the TRF and authorize pro se litigants to apply for reimbursement for deposition and court transcripts. CHANGES TO EXISTING LAW Existing law establishes the California Court Reporters Board (Bus. and Prof. Code Sec. 8000.) with, among other things, the authority and responsibility to determine the qualifications of persons applying for certification as a shorthand reporter (Bus. and Prof. Code Sec. 8007(a).); make rules for the examination of applicants and the issuing of certificates of qualification in professional shorthand reporting (Bus. and Prof. Code Sec. 8007(c).); and charge and collect authorized fees (Bus. and Prof. Code Secs. 8008(c), 8031.) Existing law establishes the Court Reporters' Fund into which all funds collected by the board shall be deposited. (Bus. and Prof. Code Sec. 8030.) Existing law, until January 1, 2011, establishes the Transcript Reimbursement Fund to provide shorthand reporting services to low-income litigants in civil cases who are unable to otherwise afford those services. Existing law also provides that the board shall transfer up to $300,000 into the TRF from the Court Reporters' Fund at the beginning of each fiscal year, from excess funds needed to support the board's operating budget for each fiscal year. The board may transfer additional funds available, provided that the additional transfer does not result in a reduction of the balance of the Court Reporters' Fund to an amount less than six months' operating budget. The board is required to maintain sufficient funding to pay all qualified claims and is authorized to utilize all refunds, unexpended funds, fees, and any other moneys received for this purpose. (Bus. and Prof. Code Sec. 8030.2) Existing law, until January 1, 2011, provides that an "applicant," or certified shorthand reporter in a case handled by an applicant, may apply, with supporting documentation, for reimbursement from the Transcript Reimbursement Fund for the allowable charges for preparing an original transcript, a copy SB 1181 (Cedillo) Page 3 of ? of the transcript (or both if appropriate) of court or deposition proceedings for litigation conducted in California. These existing provisions also specifically exclude persons appearing pro se to represent themselves at any stage of the case. (Bus. and Prof. Code Secs. 8030.4(e), 8030.8.) Existing law, until January 1, 2011, specifies that an applicant includes a "qualified legal services project," a "qualified support center," "other qualified project," or "pro bono attorney," as those terms are defined, which generally includes those non-profit organizations, attorneys, law firms, or legal corporations providing legal services to an indigent person. In addition, the case may not be a fee generating case, which is generally defined as a case that, if undertaken by an attorney in private practice, may reasonably be expected to result in payment of a fee from an award to a client, from public funds, or from an opposing party. (Bus. and Prof. Code Sec. 8030.4.) Existing law, until January 1, 2011, specifies the charges that may be reimbursed from the Transcript Reimbursement Fund, including regular customary charges for expedited deposition transcripts up to a maximum of $2,500. (Bus. and Prof. Code Sec. 8030.6.) Existing law provides: (1) that the instant visual display of deposition testimony shall not be certified and cannot be used, cited, or transcribed as the official certified transcript of the proceedings; and (2) provides that the instant visual display of testimony shall not be cited or used in any way or at any time to rebut or contradict the official certified transcript of the proceedings as provided by the official reporter or official reporter pro tempore. (Code Civ. Proc. Sec. 273.) This bill would extend the sunset on the Transcript Reimbursement Fund and the accompanying provisions to January 1, 2013. This bill would, until January 1, 2013, permit a person appearing pro se at any stage of the case to apply to receive funds from the Transcript Reimbursement Fund. Pro se litigants applying for reimbursement would be required to provide a fee waiver from the court to establish indigent status. In addition, the amount reimbursed to persons appearing pro se would be limited to $2,500 per case and not to exceed $30,000 annually for all cases. This bill also requires the board to SB 1181 (Cedillo) Page 4 of ? report to the Legislature by January 1, 2012, on a summary of expenditures and claims paid to pro se litigants from the Transcript Reimbursement Fund. This bill would extend the sunset on these provisions to January 1, 2013, and permit the cost of services related to providing instant visual display of deposition testimony to be reimbursed from the Transcript Reimbursement Fund. COMMENT 1.Stated need for the bill The author states: The Transcript Reimbursement Fund (TRF) was established by the legislature in 1981 and is funded through the Certified Shorthand Reporters annual license renewal fees. The purpose of the TRF is to provide court transcripts or depositions at little or no cost to non-profit legal service centers and pro bono attorneys on behalf of indigent litigants in civil cases. This fund is to sunset by January 1, 2011. Since this is a valued program serving the indigent community it is vital for the court process to have an extension of the program. According to the Court Reporters Board, approximately a quarter of all TRF claims are denied because they are submitted by a litigant who represents himself/herself in a lawsuit (known as in pro per litigants) rather than have an attorney. Many of these clients have obtained a fee waiver for their cases and often assume that it applies to transcript costs as well. These people are unable to afford the costs of transcripts and often time forego their efforts to pursue civil litigation or defend themselves in an action. Typical cases involving requests for TRF assistance, in addition to those who represent themselves, include: dissolution of marriage/custody issues, evictions, unlawful terminations, and probate disputes. These litigants could be helped with the use of underutilized funds from the TRF to be expanded to include individuals representing themselves. In addition, current law does not allow TRF funds to be used for the reimbursement of instant visual display reporting rates for court reporters providing such services to counsel. Instant visual display reporting is a near instant text delivery of court proceedings and did not exist at the time SB 1181 (Cedillo) Page 5 of ? the law was written. Allowing the reimbursement for instant visual display services would ensure speedy and efficient transcripts to litigants. 2.Bill would extend the sunset on the operation of the Transcript Reimbursement Fund to January 1, 2013 Authorization for the Transcript Reimbursement Fund would sunset on January 1, 2011. Funds currently allocated for these purposes would instead remain in the Court Reporter Fund for the purpose of operating the board. The board may also reduce certification fees to the extent these funds are not needed. As indicated by the author, without this fund, there would be fewer resources available to indigent litigants to obtain a deposition transcript that permits them to evaluate and prepare for their case. In addition, without a court transcript, indigent litigants are unable to bring an appeal, which has serious access to justice implications. The author indicates that many of the cases involve difficult family law and custody disputes, unlawful detainer, unlawful terminations, and probate disputes that they would otherwise be unable to defend or pursue. Extending the sunset for the TRF would help to ensure that indigent litigants continue to be able to access this pool of funds. 3.Historical expenditures suggest underutilization of available funding As indicated above, each year, the board makes available at least $300,000 that is transferred into the Transcript Reimbursement Fund. Based on data provided by the board, in the nearly 30 years since the Fund's inception in 1981, the amounts expended on an annual basis has ranged from a high in 1993/94 of $417,778 to a low in 2002/03 of $146,649. In the 10 years between 1986/87 and 1995/95, expenditures exceeded the $300,000 budget on nine occasions. However, since 1996/97, expenditures have remained well below $300,000, and have not exceeded $272,000. According to the board, the chart below represents recent historical claims and expenditures from the Transcript Reimbursement Fund: Historical Trial Court Reimbursement Fund Claims and Expenditures SB 1181 (Cedillo) Page 6 of ? 2003/04 to 2008/09 ------------------------------------------------------------------ | TRF | 2003/04 | 2004/05 |2005/06 |2006/07 |2007/08 |2008/09 | |Applicatio| | | | | | | | ns | | | | | | | |----------+---------+---------+--------+--------+--------+--------| | | | | | | | | | | | | | | | | | Approved | 408 | 356 | 397 | 398 | 397 | 330 | | | | | | | | | | | | | | | | | |----------+---------+---------+--------+--------+--------+--------| | | | | | | | | | | | | | | | | | Denied | 26 | 32 | 31 | 13 | 29 | 33 | | | | | | | | | | | | | | | | | |----------+---------+---------+--------+--------+--------+--------| | | | | | | | | | | | | | | | | | Denial | 8 | 7 | 6 | 3 | 8 | 9 | | for Pro | | | | | | | | Se | | | | | | | | | | | | | | | | | | | | | | | |----------+---------+---------+--------+--------+--------+--------| | | | | | | | | | | | | | | | | | Total $$ |$204,220 |$159,858 |$225,676|$219,308|$219,275|$201,259| |Disbursed | | | | | | | | | | | | | | | | | | | | | | | |----------+---------+---------+--------+--------+--------+--------| | | | | | | | | | | | | | | | | | Add'l | $95,780 |$140,142 |$74,324 |$80,692 |$80,725 |$98,741 | | Funds | | | | | | | |Available | | | | | | | | | | | | | | | | | | | | | | | ------------------------------------------------------------------ As these figures show, in no year has the amount of additional funding available fallen below $70,000, or nearly 25 percent of SB 1181 (Cedillo) Page 7 of ? the total funding available in each year of $300,000. 4.Bill would expand those eligible to seek reimbursement from the Transcript Reimbursement Fund to include indigent Pro Se litigants Under existing law, an "applicant," or certified shorthand reporter in a case handled by an applicant, may apply for reimbursement from the Transcript Reimbursement Fund for the allowable charges for preparing an original transcript, a copy of the transcript, or both if appropriate, of court or deposition proceedings for litigation conducted in California. (Bus. & Prof. Code Sec. 8030.4.) These existing provisions also specifically exclude persons appearing pro se to represent themselves at any stage of the case. An applicant includes a "qualified legal services project," a "qualified support center," "other qualified project," or "pro bono attorney," as those terms are defined, which generally includes those non-profit organizations, attorneys, law firms, or legal corporations providing legal services to an indigent person. In addition, the case may not be a fee generating case, which is generally defined as a case that, if undertaken by an attorney in private practice, may reasonably be expected to result in payment of a fee from an award to a client, from public funds, or from an opposing party. This bill would, until January 1, 2013, permit a person appearing pro se at any stage of the case to apply to receive funds from the Transcript Reimbursement Fund. Pro se litigants applying for reimbursement would be required to provide a fee waiver from the court to establish indigent status. In addition, all other requirements related to the type of case and the types of expenses to be reimbursed would continue to apply. While it may appear that requiring the involvement of legal services organizations would arguably tend to weed out frivolous claims, the relatively low number of claims submitted historically does not suggest that the fund's exposure would be substantial. On the other hand, many potential pro se applicants may not seek reimbursement currently when made aware of the rules for reimbursement. Therefore, it is unknown what impact the expansion of eligibility would have on the fund. In order to ensure that any impact does not overwhelm the fund, this bill would provide that amount to be reimbursed under the proposed provisions for pro se litigants would not exceed $30,000 annually and $2,500 per case. These amounts are well SB 1181 (Cedillo) Page 8 of ? below the historical amount of unexpended funds remaining at the end of each year in the fund. (See Comment 3.) Taking into consideration the number of claims denied solely on the basis of the fact that the applicant was a pro se litigant, and assuming that all such claims were approved in each of the years since 2003/04 with a limit of $2,500 per case, these claims would have only added up to $22,500 (2008/09) in reimbursements. However, as previously stated, the historical data may not accurately reflect the true impact of expanding eligibility because more pro se litigants may apply for reimbursement should this bill be enacted. Accordingly, this bill would also require the board to report to the Legislature by January 1, 2012, on a summary of expenditures and claims paid to pro se litigants from the Transcript Reimbursement Fund. This information would enable the Legislature to determine the actual impact to the TRF and assess whether the new eligibility requirement is serving its intended purpose, or whether new avenues for making transcripts more accessible for pro se litigants needs to be explored. The following is a suggested technical amendment to clarify that a pro se litigant should provide proof of a fee waiver from the court to establish indigent status: Suggested technical amendment: On page 6, beginning at line 39, revise the last sentence to read: "The person shall provide proof of a fee waiver from the court to establish indigent status in the case . 5.Bill would expand the types of costs that may be reimbursed from the Transcript Reimbursement Fund to include "instant visual display services provided at depositions" Currently, until January 1, 2011, an applicant may request reimbursement for an expedited deposition transcript. These transcripts are usually provided within 24 hours of a deposition and typically cost twice as much as a routine deposition transcript. Current law permits the use of "instant visual display services" SB 1181 (Cedillo) Page 9 of ? at depositions provided that the noticing party notice an intent to use that technology. This technology generally permits an instant visual display of the transcript for viewing during the deposition. It also allows scrolling backward and forward through testimony and word searching of the transcript. Some providers permit a real-time feed from the reporter's computer into the party's computer for use with litigation support software. Often, the reporter will provide a digital electronic copy of the transcript at the conclusion of the deposition. Currently, the cost of these services is not reimbursable from the TRF. This bill would authorize the reimbursement of costs for instant visual display services. Background information provided by the author's office states that instant visual display transcripts are "similar" to producing quick transcripts, but that this technology was not available at the time the Fund was created. However, is it not clear what additional or extraordinary effort is related to producing an instant visual display as compared to producing an expedited transcript. Nevertheless, this bill permits both types of transcripts to be reimbursed up to a maximum of $2,500 per case. Additionally, when this technology is used to produce court transcripts, current law essentially deems it to be a "rough draft transcript" that may not be certified, used, cited or transcribed as an official certified transcript. Therefore, it appears that by authorizing the reimbursement for instant visual display services, this bill would set a precedent for reimbursing for a form of rough draft transcripts. Committee staff notes that the most widely used deposition reporter services appear to offer instant visual display services. It is unknown what volume of claims might result from this expansion and, therefore, what exposure the Transcript Reimbursement Fund would have for these costs. Notably, while the other provisions of this bill related to permitting a pro se litigant to be reimbursed from the Fund would be subject to a report to the Legislature, there is no similar report required relative to this cost expansion. Accordingly, this committee may wish to consider whether the provisions authorizing reimbursement for instant visual display services similar to "rough draft transcripts" should be removed from the bill. Suggested amendment : On page 8, line 6 strike "or instant visual display services SB 1181 (Cedillo) Page 10 of ? provided at depositions" Support : Bay Area Legal Aid Opposition : None Known HISTORY Source : Author Related Pending Legislation : None Prior Legislation : SB 819 (Yee, Chapter 308, Statutes of 2009) required all unencumbered funds remaining in the Transcript Reimbursement Fund as of June 29, 2009, to be transferred to the Court Reporters' Fund. AB 170 (Mendoza, Chapter 87, Statutes of 2009) provides that, until January 1, 2017, a court reporter's instant visual display of testimony or proceedings (also known as "realtime reporting"), or both, may not be certified and cannot be used, cited, distributed, or transcribed as the official transcript of the proceedings. SB 963 (Ridley-Thomas, Chapter 385, Statutes of 2008) extended the sunset for the Court Reporters Board and Trial Reimbursement Fund until January 1, 2011. **************