BILL ANALYSIS                                                                                                                                                                                                    Ó





                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular  Session


          AB 2244 (Gatto)
          Version: June 13, 2016
          Hearing Date:  June 21, 2016
          Fiscal: Yes
          Urgency: No
          RD   


                                        SUBJECT
                                           
                           Court fees:  electronic filing

                                      DESCRIPTION  

          This bill would ensure that if any trial court permits or  
          mandates electronic filing and service of documents, any fees  
          charged by the court, an electronic filing manager, or an  
          electronic filing service provider (EFSP) to process a payment  
          for filing fees and other court fees shall not exceed the costs  
          incurred.  This bill would further ensure that if a trial court  
          mandates e-filing: (1) a court or an electronic filing manager  
          contracted with a court to provide a system for acceptance of  
          electronically transmitted documents and associated fees accept  
          more than one method of payment to an electronic filing service  
          provider, to be determined by the court, that may include credit  
          or debit cards, electronic funds transfers, electronic networks  
          for financial transactions such as Automated Clearing House  
          (ACH) and other payment methods that do not charge a transaction  
          cost; and (2) clarify that an EFSP is an agent of the court for  
          the sole purpose of collecting and remitting specified payments  
          and any fees set by an EFSP must, consistent with existing law,  
          be approved by the Judicial Council. 

          This bill would also allow for prevailing parties to recover  
          fees associated with electronic filing and service through an  
          EFSP, as specified.  Lastly, the bill requires agents of the  
          court (EFSPs) to report their costs to the Judicial Council and  
          requires that the Judicial Council or its authorized  
          representative have access to and the right to examine the  
          records and documents of agents of the court for purposes of  









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          verifying the accuracy of these reports and compliance with this  
          reporting requirement, as specified. 

                                      BACKGROUND  

          The federal courts, have long allowed for electronic filing of  
          court documents.  (See Fed. Rule Civ. Proc. rule 5(d)(3), which  
          provides that a court may, by local rule, allow papers to be  
          filed, signed, or verified by electronic means that are  
          consistent with any technical standards established by the  
          Judicial Conference of the United States, and may require  
          electronic filing only if reasonable exceptions are allowed.)   
          The federal rules also, however, prohibit a court clerk from  
          refusing to accept paper filings - even if a local court rule  
          mandates electronic filing.  (Fed. Rule Civ. Proc. Rule 5(d)(4);  
          see also Klemm v. Astrue (9th Cir. 2008) 543 F.3d 1139, 1143:  
          "Under this rule, the Clerk was obligated to accept Klemm's  
          notice of appeal for filing, despite Klemm's failure to comply  
          with the local electronic filing rules.  [Footnote omitted.] In  
          any event, the Clerk's failure formally to file Klemm's notice  
          of appeal is of no import because the paper was deemed filed  
          when it 'arrived in the hands of the Clerk within the statutory  
          period.' [Citation omitted.] Thus, Klemm's notice of appeal was  
          timely even though it was mailed to the Clerk, rather than filed  
          electronically, as the local rules require.")
            
          E-filing proponents argue that it creates substantial  
          efficiencies and cost savings for both litigants and the courts:  
          it saves in time, labor, postage, supplies, storage, and travel;  
          creates easier and timelier access to records and documents by  
          the courts and the public; engenders more efficient use of staff  
          time; allows for remote access to court records by lawyers and  
          the public over the Internet; grants attorneys the flexibility  
          to file documents after hours when courts are closed; and gives  
          multiple parties the ability to view the same documents, at the  
          same time.  At the same time, however, this state has been  
          cautious of the hardships that e-filing might cause for some  
          courts or litigants-particularly low income or unrepresented  
          litigants-given that access to electronic communications are  
          still widely disparate among different cities and counties  
          within this state, and even from home to home in the same  
          neighborhoods based on one's economic means.  Some might not be  
          able to even afford the technology needed for e-filing, or have  
          access to broadband or Internet services, even if they do have  
          the technology (i.e. computers.)  Thus, while it has been long  








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          anticipated that e-filing and e-service will become the norm,  
          and not the exception, it has been with the understanding that  
          public policy ultimately dictates that, when it comes to our  
          courts, access (and uniform access at that) is imperative.  This  
          is not to state that the competing interests in efficiencies and  
          access cannot coexist or help advance one another<1>; it is  
          merely to acknowledge that any rules adopted in this state for  
          e-filing need to be cognizant of the very real concerns related  
          to access so as to not compromise them in the name of  
          technological advancement and efficiency.  

          Accordingly, for years, California has authorized limited  
          electronic filing under Section 1010.6 of the Code of Civil  
          Procedure.  In 1999, SB 367 (Dunn, Ch. 514, Stats. 1999), among  
          other things, enacted Section 1010.6, to allow trial courts to  
          adopt local rules permitting e-filing and service of documents,  
          and to require the Judicial Council to adopt uniform rules for  
          the electronic filing and service of documents in the trial  
          courts of the state, as specified.  SB 367 also reflected the  
          legislative intent to:  (1) provide for the eventual  
          standardization of electronic filing and service procedures on a  
          statewide level; and (2) to provide that a court shall not adopt  
          an electronic filing procedure that requires a litigant or  
          attorney to possess specialized, cumbersome, or expensive  
          equipment or software to utilize the electronic filing system.   
          Subsequently, in 2010, SB 1274 (Committee on Judiciary, Ch. 156,  
          Stats. 2010) authorized parties to consent to, or the court to  
          order, electronic service of documents that are not required to  
          be personally served.  Among other things, SB 1274 also required  
          the Judicial Council to adopt uniform rules relating to the  
          integrity of electronic filing and service of documents in the  
          trial courts of the state, and redefined "electronic service" to  
          include both electronic notification and electronic  
          transmission, as specified.  

          Most recently, in 2012, this state enacted additional  
          legislation to authorize a pilot program in Orange County's  
          Superior Court that would allow for mandated e-filing in  
          specified cases, as long as certain enumerated conditions were  
          met.  (See AB 2073, (Silva, Ch. 320, Stats. 2012).)  Recognizing  
          ---------------------------
          <1> Indeed, allowing e-filing can grant litigants access (remote  
          access) to their courts, saving them valuable time that would  
          otherwise be spent standing in line and away from work-which can  
          be particularly difficult for low-wage and self-represented  
          litigants.   








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          that other courts may subsequently wish to move toward mandatory  
          e-filing as well, AB 2073 also allowed for that possibility, on  
          the condition that any future courts must also meet requirements  
          of Section 1010.6 and any additional uniform rules adopted by  
          the Judicial Council for the filing and service of documents in  
          the trial courts of the state based upon its study of the Orange  
          County court's pilot program.  Indeed, in 2013, the Judicial  
          Council approved a proposal, effective July 1, 2013, to allow  
          superior courts to require that parties electronically file and  
          serve documents in civil cases.  Notably, those new rules exempt  
          self-represented parties from any mandatory e-filing and service  
          requirements adopted by participating courts, but also include  
          language that encourages these parties to participate  
          voluntarily. To the extent feasible, courts and other entities  
          are encouraged to assist self-represented parties to  
          electronically file and serve documents.  (See California Courts  
          Press Release, Judicial Council Allows Superior Courts to  
          Require E-filing in Civil Cases (Jun. 28, 2013)  
           [as of Jun. 5, 2016].) 

          This bill would update some of the statutory rules and  
          conditions surrounding mandatory e-filing, in particular  
          relating to processing fees charged for e-filing payments,  
          payment options, and the ability of prevailing parties to  
          recover e-filing fees.  

                                CHANGES TO EXISTING LAW
          
          Existing law  provides that except as otherwise provided by  
          statute, a prevailing party, as defined, is entitled as a matter  
          of right to recover costs in any action or proceeding.  (Code  
          Civ. Proc. Sec. 1032(a)(5).)  

           Existing law  enumerates the items allowable as costs under the  
          above provision, including, among other things:
           filing, motion, and jury fees; 
           transcripts of court proceedings ordered by the court; 
           court reporter fees as established by statute; 
           court interpreter fees, as specified; and 
           any other item that is required to be awarded to the  
            prevailing party pursuant to statute as an incident to  
            prevailing in the action at trial or on appeal.  (Code Civ.  
            Proc. Sec. 1033.5(a).)  

           Existing law  provides that any award of costs is subject to the  








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          following, among other things:
           allowable costs shall be reasonably necessary to the conduct  
            of the litigation rather than merely convenient or beneficial  
            to its preparation; and
           allowable costs shall be reasonable in amount.  (Code Civ.  
            Proc. Sec. 1033.5(c).)  


           Existing law  authorizes a court and other specified public  
          entities to accept credit card, debit card, or electronic fund  
          transfers for the payment of certain government services and  
          fees, including the payment of a filing fee or other court fee.   
          A court desiring to authorize the use of a credit card, debit  
          card, or electronic funds transfer must first obtain the  
          approval of the Judicial Council.  Existing law provides that,  
          notwithstanding specified law, a court may impose a fee for the  
          use of a credit or debit card or electronic funds transfer, not  
          to exceed the costs incurred by the agency in providing for  
          payment by credit or debit card or electronic funds transfer.  
          These costs may include, but shall not be limited to, the  
          payment of fees or discounts to the card issuer, funds process,  
          or draft purchaser.  Any such fee imposed by a court must be  
          approved by the Judicial Council.  (Gov. Code Sec. 6159(b), (c),  
          (h).) 

           Existing law  provides that in any action in which a party has  
          agreed to accept electronic service or in which the court has  
          ordered electronic service, as specified, the court may  
          electronically serve any document issued by the court that is  
          not required to be personally served in the same manner that  
          parties electronically serve documents.  Existing law provides  
          that electronic service shall have the same legal effect as  
          service by mail, except as provided.  (Code Civ. Proc. Sec.  
          1010.6(a)(3).)

           Existing law  provides that a trial court may adopt local rules  
          permitting electronic filing of documents, subject to Rules of  
          Court adopted as specified and subject to specified conditions.   
          These include conditions relating to electronic signatures and  
          fee waivers, among other things.  (Code Civ. Proc. Sec.  
          1010.6(b)(1)-(6).)  Existing law requires the court to permit a  
          party or attorney to file an application for waiver of court  
          fees and costs, in lieu of requiring the payment of the filing  
          fee, as part of the process involving the electronic filing of a  
          document, as specified.  (Code Civ. Proc. Sec. 1010.6(b)(6).)








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          Existing law  permits a court to require electronic filing of  
          documents in complex civil litigation cases, as specified,  
          provided that it does not cause undue hardship or significant  
          prejudice to any party in the action. (Code Civ. Proc. Sec.  
          1010.6(c).) 
           
          Existing law  requires the Judicial Council to adopt uniform  
          rules for the electronic filing and service of documents in the  
          trial courts of the state, which shall include statewide  
          policies on vendor contracts, privacy, and access to public  
          records, and rules relating to the integrity of the electronic  
          service.  Existing law requires these rules to conform to the  
          conditions set in Section 1010.6 of the Code of Civil Procedure,  
          as amended from time to time.  (Code Civ. Proc. Sec. 1010.6(e).)  


           Existing Rules of Court  set forth uniform rules regarding  
          electronic filing and serving of documents.  (California Rules  
          of Court, rules 2.250-2.261.)  
            
          Existing law  provides authority for the Orange County Superior  
          Court, by local rule and until July 1, 2014, to establish a  
          pilot project to require parties to specified civil actions to  
          electronically file and serve documents, subject to specified  
          requirements and rules adopted by Judicial Council, and certain  
          additional conditions.  Those additional conditions include that  
          the court and the parties either have access to more than one  
          electronic service provider capable of electronically filing  
          documents with the court, or to electronic filing access  
          directly through the court.  Any fees charged by the court must  
          be for no more than the actual cost of electronic filing and  
          service of the documents, whereas any fees charged by the  
          electronic service provider must be reasonable.  In both  
          instances, fees must be waived when deemed appropriate by the  
          court, including for any party who has received a fee waiver.   
          (Code Civ. Proc. Sec. 1010.6(d).)  

           Existing law  also requires the Judicial Council, on or before  
          July 1, 2014, to adopt uniform rules for mandatory electronic  
          filing and service of documents for specified actions in the  
          state's trial courts, which are to be informed by the pilot  
          project, above, and are to include statewide policies on vendor  
          contracts, privacy, access to public records, unrepresented  
          parties, parties with fee waivers, hardships, reasonable  








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          exceptions to electronic filing, and rules relating to the  
          integrity of electronic service.   Existing law provides that  
          upon the adoption of those rules, a superior court may, by local  
          rule, require mandatory electronic filing, pursuant to the  
          requirements and conditions set forth in this section, including  
          several of the conditions that must be met by any court allowing  
          e-filing of documents and several of the requirements specified  
          for the mandatory e-filing pilot project, above.  (Code Civ.  
          Proc. Sec. 1010.6(f), (g).)  

           This bill  would add a new condition to the list of conditions  
          that would have to be met both by courts that elect to permit,  
          and courts that otherwise mandate, e-filing and service of  
          documents.  Specifically, it would provide that a fee, if any,  
          charged by a court, an electronic filing manager, or an  
          electronic filing service provider to process a payment for  
          filing fees and other court fees shall not exceed the costs  
          incurred.

           This bill  would, consistent with existing law, specify that the  
          court, an electronic filing manager, or an electronic filing  
          service provider shall waive any fees charged if the court deems  
          waiver appropriate, including in instances where a party has  
          received a fee waiver.

           This bill  would prohibit an electronic filing service provider,  
          as described, from collecting or attempting to collect a fee to  
          complete an electronic filing transaction, including a fee to  
          process a payment, a filing or other court fee, or a fee charged  
          by the electronic filing service provider for electronically  
          filing documents, from a party who is exempt from paying fees;  
          provided, however, that the electronic filing service provider  
          must complete the filing notwithstanding the fee exemption.
           
          This bill  would further require a court or an electronic filing  
          manager that provides a court, pursuant to contract, a system  
          for acceptance of electronically transmitted documents and  
          associated filing and other court fees accept more than one  
          method of payment to an electronic filing service provider who  
          is required to collect and remit a payment of a filing or other  
          court as an agent of the court, as specified, below.   The bill  
          would require the court to determine which methods of payment  
          shall be accepted by the court and the electronic filing  
          manager, and specifies that the methods of payment may include  
          credit or debit cards, electronic funds transfers, electronic  








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          networks for financial transactions such as Automated Clearing  
          House (ACH) and other payment methods that do not charge a  
          transaction cost.

           This bill  would authorize an "agent of the court" to impose a  
          fee for use of a credit or debit card or electronic funds  
          transfer, not to exceed the costs incurred by the agent in  
          providing for payment by credit or debit card or electronic  
          funds transfer. This bill would provide for these purposes, that  
          an electronic filing service provider who is required to collect  
          and remit a payment of a filing fee or other court fee, as  
          specified, complete an electronic filing transaction is deemed  
          an agent of the court, and, unless specified otherwise, the  
          electronic filing service provider is deemed an agent of the  
          court for the sole purpose of collecting and remitting such  
          payments for an electronic filing transaction.  This bill would  
          further ensure that, consistent with the existing requirement  
          under Section 6159 of the Government Code, above, that any such  
          fees charged by the court be approved by the Judicial Council,  
          that any fees charged by the electronic filing service provider  
          be approved by the Judicial Council. 

           This bill  would prohibit a court from being held liable for the  
          actions of an agent of the court under the above provisions and  
          would require that an agent of the court report its costs in  
          providing for payment by credit or debit card or electronic  
          funds transfer pursuant to Judicial Council guidelines.  This  
          bill would require that the Judicial Council or its authorized  
          representative have access to and the right to examine the  
          records and documents of an agent of the court for purposes of  
          verifying the accuracy of these reports and compliance with this  
          reporting requirement. The agent of the court must: (1) provide  
          the Judicial Council all relevant information requested; (2)  
          permit access to its premises at reasonable times, for the  
          purposes of interviewing employees and inspecting and copying  
          any relevant records; and (3) maintain all records and documents  
          relating to its fees and costs for a minimum of four years from  
          the date the fee is imposed or until the verification process is  
          complete, whichever is later.  
           
           This bill  would add to the list of recoverable costs by  
          prevailing parties:
           fees for the electronic filing or service of documents through  
            an electronic filing service provider if a court requires or  
            orders electronic filing or service; and 








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           fees for the hosting of electronic documents if a court  
            requires or orders a party to have documents hosted by an  
            electronic filing service provider.  This bill provides that  
            this paragraph shall become inoperative on January 1, 2022.

           This bill  would make other technical, clarifying or  
          non-substantive changes. 

                                        COMMENT
           
          1.    Stated need for the bill  

          According to the author:

            The Judicial Council's Court Case Management System (CCMS), an  
            ambitious court technology project to provide all 58 superior  
            courts with a long-needed uniform, linked case management  
            system would have, among other things, made it easier for  
            parties to file their legal documents electronically with the  
            courts. Since its demise in the heights of the Great  
            Recession, California courts have moved to upgrade their  
            information technology systems with local contracts with  
            various vendors. These contracts typically provide for case  
            management systems, electronic filing of documents, and more.  
            Usually the third party vendor acts as an "electronic filing  
            manager" (EFM) in creating the portals through which  
            "electronic filing service providers" (EFSPs) actually file  
            documents on behalf of law firms and other users of court  
            services. 

            Increasingly, courts are moving to require the filing of  
            documents electronically. In some counties, certain case types  
            must be filed electronically, and often complex civil cases  
            require e-filing. In some counties, EFSPs must pay court  
            filing fees and e-filing transaction costs with credit cards,  
            and pay convenience fees to electronic filing managers for the  
            use of credit cards. 

            While electronic filing represents a major benefit to the  
            courts and public, how the systems are implemented can raise  
            policy questions of fair access to the judicial system. In  
            addition, present law contains a number of ambiguities which  
            should be resolved as these systems are being implemented. AB  
            2244 is intended to address these ambiguities.









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          In support, the Coalition for Improving Court Access, adds: 

            The use of electronic filing is expanding rapidly in  
            California courts, and courts throughout the country. Rather  
            than create and maintain electronic filing systems directly,  
            most courts have turned to contracts with private companies to  
            provide the services. In simple terms, the entities which  
            create and maintain the electronic filing portals into courts  
            are known as "electronic filing managers" (EFMs), while  
            companies which interact with law firms and other filers to  
            transmit documents to courts through these portals are known  
            as "electronic filing service providers" (EFSPs). 

            Courts increasingly are mandating the electronic filing of  
            documents in particular case types, as we move towards  
            "paperless" systems. There are tremendous benefits to  
            litigants and courts which can result from properly designed  
            and supervised electronic filing systems.  [ .  .  . ] Taken  
                                          together, [the proposed changes in AB 2244] resolve  
            ambiguities and help establish the statutory framework to  
            support the growth of electronic filing in California courts.

          2.    Relevant terminology, explained  

          This bill uses terminology such as "electronic filing managers"  
          and "electronic filing service providers," and, as does existing  
          law, recognizes that e-filing can be provided directly by the  
          courts or by electronic filing service providers.  As explained  
          in a recent report by the Judicial Council: 

            A fully functioning e-filing system (as opposed to  
            "e-delivery," which allows for documents to be delivered to a  
            court email address or other electronic drop box, but does not  
            integrate those documents into the court's case management  
            system) requires both an electronic filing service provider  
            (EFSP) to receive the filing, and an electronic filing manager  
            (EFM), to serve as a "translator" of the information received  
            on the forms from the EFSPs and deliver that information into  
            an individual court's case management system. In California,  
            local courts that are pursuing e-filing are working with their  
            case management system vendors to determine a certification  
            process for e-filing service providers (EFSPs) and an  
            appropriate number of EFSPs for certification. They will also  
            be contracting with a vendor for the development of an EFM to  
            communicate with their case management systems, in order to  








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            deliver the benefits of truly paperless filing. 

            Early experiences with e-filing, both in California and in  
            other states, suggest that many private vendor EFSPs are not  
            focused on serving the market segment of self-represented  
            litigants, many of whom are indigent and qualify for fee  
            waivers. The access community believes that the exclusion of  
            self-represented litigants from electronic filing "has the  
            potential to enlarge the access to justice gap in the long  
            run." Electronic filing is an area in which a slight tip of  
            the balance means that the technology tool is no longer used  
            to achieve greater access; rather, it becomes a barrier. The  
            California judicial branch has the opportunity to "place a  
            finger on the scale" in favor of low-income and  
            self-represented litigants by developing the capacity to serve  
            as the EFSP and EFM for all self-represented litigants in the  
            state. 

            In other states, the judicial branch serves as either a sole  
            EFSP or sole EFM for all forms of electronic filing (or  
            manages contracts with outside vendors for these services) on  
            behalf of all courts throughout the state. In California, the  
            Judicial Council can ensure that electronic filing is  
            available to all court users by serving as a one-stop EFSP and  
            EFM for self-represented litigants. This function is the  
            culmination of the work currently being undertaken to apply  
            user-centered design concepts to the information currently  
            available on the statewide self-help website and is the final  
            link in providing full and equal access to the courts for  
            self-represented litigants.  (Judicial Council, The Critical  
            Role of the State Judiciary in Increasing Access for  
            Self-Represented Litigants: Self-Help Access 360? (Jul. 2015)  
             [as of Jun. 5, 2016] (Footnote omitted).)  

          3.    Bill would enhance consumer protections for purposes of  
            mandatory e-filing fees  

          Existing law allows for courts to adopt local rules allowing  
          parties to electronically serve specified documents, consistent  
          with certain statutory requirements and conditions and  
          applicable Rules of Court.  In 2012, AB 2073 (Silva, Ch. 320,  
          Stats. 2012) was enacted to authorize a temporary pilot project  
          in the Orange County Superior Court to require parties to  
          specified civil actions to electronically file and serve  








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          documents, subject to the rules adopted by the Judicial Council  
          and other specified conditions.  That bill also required the  
          Judicial Council to adopt uniform rules for mandatory electronic  
          filing (or e-filing) and service of documents for specified  
          civil actions in the state's trial courts, and ensured that any  
          subsequent trial courts that seek to mandate electronic filing  
          adopt the conditions required by the Orange County Superior  
          Court pilot and the applicable Rules of Court issued by the  
          Judicial Council, as well as certain statutory conditions that  
          would apply in the context of voluntary e-filing courts.  As  
          noted in the Background, the Judicial Council has since adopted  
          rules allowing for courts to mandate e-filing in civil actions,  
          having declared the pilot project a success which, overall  
          "resulted in significant cost savings for the court and was  
          generally less or equally expensive for litigants" and  
          "demonstrated the project's relative ease of use and convenience  
          for represented and self-represented litigants."  (Judicial  
          Council, Report on the Superior Court of Orange County's  
          Mandatory E-Filing Pilot Project: Report to the Legislature as  
          Required by Code of Civil Procedure Section 1010.6(d)(2) (Sept.  
          2014)  
           [as of Jun. 5, 2016].)  

          This bill now seeks to make various updates to the statutory  
          conditions and requirements that relate to e-filing payments,  
          including processing fees.  Most relevant to this bill, if a  
          superior court desires to mandate e-filing, existing law  
          dictates, among other things, that the court and the parties  
          either have access to more than one electronic filing service  
          provider (ESFP) capable of electronically filing documents with  
          the court, or to electronic filing access directly through the  
          court.  Any fees charged by the court must be for no more than  
          the actual cost of electronic filing and service of the  
          documents and shall be waived when deemed appropriate by the  
          court, including, but not limited to, for any party who has  
          received a fee waiver.  In contrast, any fees charged by an ESFP  
          are required to be "reasonable," and, must also be waived when  
          deemed appropriate by the court, including for any party who has  
          received a fee waiver.  (Code Civ. Proc. Sec. 1010.6(d)(1)(B).)   


          This bill would now expressly prohibit a court, electronic  
          filing manager (EFM), or EFSP from charging processing fees for  
          filing fees and other court fees shall in excess of the actual  








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          costs incurred.  Notably, this prohibition would apply not only  
          in courts that mandate e-filing, but also those that allow it on  
          a voluntary basis.  Additionally, consistent with existing law,  
          this bill would continue to ensure that the court, an EFM, or an  
          EFSP waive any fees charged if the court deems a waiver  
          appropriate, including in instances where a party has received a  
          fee waiver.  Such fees, as reflected in the bill, include a fee  
          to process a payment, a filing or other court fee, or a fee  
          charged by the EFSP for electronically filing documents.   
          Moreover, the bill ensures that any fees for the use of a credit  
          or debit card or electronic funds transfer that are set by the  
          EFSP, as an agent of the court, who is required to collect and  
          remit funds in order to complete an electronic filing  
          transaction, would also have to first be approved by the  
          Judicial Council.  (See Gov. Code Sec. 6159(h), which requires  
          any such fees, when set by a court, be approved by the Judicial  
          Council.)  

          Thus, as a practical matter, under this bill, any fees charged  
          to litigants for e-filing payments that they make by way of  
          credit card are restricted to the actual amount incurred for  
          processing the credit card payment, and no more-which is  
          particularly important when parties have no alternatives to  
          e-filing in certain actions.  Moreover, the bill would further  
          ensure that the court or the contracted entity providing the  
          system for acceptance of e-documents and associated fees not  
          require an EFSP to use any single method of payment.  The court  
          or contracted EFM would, instead, have to allow for more than  
          one form of payment, to be selected by the court, which may  
          include credit or debit cards, electronic funds transfers,  
          electronic networks for financial transactions such as Automated  
          Clearing House (ACH) and - notably - payment methods that do not  
          charge a transaction cost.  Moreover, consistent with the  
          existing requirement that fees be waived for parties who have  
          received fee waivers from the court (e.g., indigent parties),  
          this bill would expressly prohibit EFSPs from collecting or  
          attempting to collect a fee to complete an e-filing transaction  
          from a party who is exempt from paying fees.  

          As a matter of public policy, as discussed in the Background,  
          while it is encouraging to see this state's courts incrementally  
          move toward mandatory e-filing, it is important to balance the  
          desire for innovation and efficiencies against access and  
          potential hardships to litigants, particularly for low-income  
          individuals.   By adding such consumer protections into the law  








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          surrounding the conditions which must be met before e-filing can  
          be mandated by any California trial court, this bill would  
          appear to recognize the concerns related to access and help  
          ensure that those concerns are not compromised in the name of  
          technological advancement and efficiency.  
          4.    Recovery of electronic filing service provider and EFSP  
            hosting fees  

          California allows prevailing parties to recover certain fees.   
          For these purposes, Section 1033.5 of the Code of Civil  
          Procedure lists various categories of costs that a prevailing  
          party may currently recover, to which this bill would add  
          electronic filing service provider (EFSP) fees as well as EFSP  
          hosting fees.  Specifically, this bill provides that if a court  
          requires or orders a party to file and serve documents  
          electronically with the court, the party may recover fees for  
          the electronic filing or service of the documents through an  
          EFSP (which are otherwise limited by the bill to the actual  
          costs incurred).  Similarly, if a court requires or orders a  
          party to have documents hosted by an ESFP, the prevailing party  
          may recover those fees, though only until January 1, 2022.   

          Notably, Section 1033.5 already permits the recovery of filing  
          fees.  Indeed, when this Committee considered AB 2073 in 2012 to  
          allow for an Orange County pilot program (see Comment 2, above)  
          a question was raised as to the recovery of e-filing fees:

            Interested parties have raised a question of whether the cost  
            of e-filing, in a county in which e-filing is made mandatory,  
            is a form of recoverable fees under Section 1033.5 of the Code  
            of Civil Procedure.  That section lists costs that are  
            generally recoverable, in the court's discretion, by a  
            prevailing party, including, "[f]iling, motion, and jury  
            fees." (Code Civ. Proc. Sec. 1033.5(a)(1).)  Staff notes that  
            where e-filing is made mandatory pursuant to this pilot  
            project, the direct cost of using the designated e-filing  
            systems to file documents is arguably among those filing fees  
            that can be recoverable under that section under the plain  
            meaning of the term, "filing fees."   (Sen. Judiciary Com.  
            analysis of AB 2073 (2011-2012 Reg. Session) Jun. 10, 2012, p.  
            10.) 

          This bill would now make that presumption explicit.  Ultimately,  
          allowable costs must be reasonably necessary to the conduct of  
          the litigation rather than merely convenient or beneficial to  








          AB 2244 (Gatto)
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          its preparation and must be reasonable in amount.  (See Code  
          Civ. Proc. Sec. 1033.5(c).)   In support, the Judicial Council  
          writes that this bill "will result in a more consistent  
          electronic filing universe for both the public and the courts,  
          while also providing clarity for ESFPs in planning their  
          operations under the improved laws." 


           Support  : Coalition for Improving Court Access; Judicial Council

           Opposition  :  None Known 

                                        HISTORY
           
           Source  :  Author 

           Related Pending Legislation  :  None Known 
           Prior Legislation  :  AB 2073 (Silva, Ch. 320, Stats. 2012) See  
          Background; Comments 2 and 3.   

           Prior Vote  :

          Assembly Floor (Ayes 78, Noes 0)
          Assembly Appropriations Committee (Ayes 20, Noes 0)
          Assembly Judiciary Committee (Ayes 10, Noes 0)

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