BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2244 (Gatto) - Court fees: electronic filing
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|Version: June 13, 2016 |Policy Vote: JUD. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Jolie Onodera |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 2244 would prescribe specified limits on the fees
charged by the courts, an electronic filing manager, or an
electronic filing service provider associated with the
electronic filing of court documents, as specified.
Fiscal
Impact:
Fee restrictions : Potentially significant costs to electronic
filing service providers (EFSPs) and electronic filing
managers (EFMs) for processing costs that are unrecoverable
due to fee exemptions/waivers. To the extent a court serves as
the EFSP and/or EFM for low-income and self-represented
litigants, many of whom are indigent and qualify for fee
waivers, these processing costs would be absorbed by the
court's operating budget (General Fund*). Alternatively, to
the extent courts enter into vendor contracts for EFSP/EFM
services, these unrecoverable costs could be built into the
costs of the contracts (General Fund*).
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EFSP verification process : Potential future increase in
workload (General Fund*) to the Judicial Council to conduct
the verification process described in this measure which would
include interviewing EFSP employees, as well as accessing,
inspecting, and copying relevant records of fees/costs for
auditing purposes. To the extent this process is already in
place and operating, any impact to the Judicial Council would
be absorbable.
*Trial Court Trust Fund
Background: 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.
Any such fee imposed by a court must be approved by the Judicial
Council. (Government Code § 6159(b), (c), (h).)
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.
(Code of Civil Procedure (CCP) § 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.
(CCP § 1010.6(b)(6).)
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. The Judicial Council is
required 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
AB 2244 (Gatto) Page 2 of
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rules to conform to the conditions set in Section 1010.6 of the
Code of Civil Procedure, as amended from time to time. (CCP §
1010.6(c), (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 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
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. (CCP §
1010.6(f), (g).)
While the practice of electronic filing may create substantial
efficiencies and cost savings for both litigants and the courts,
the state has been cautious of the hardships that electronic
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 afford the technology needed to
electronically file, or have access to broadband or internet
services. Thus, while it has been long anticipated that
electronic filing will be adopted widely, it has been with the
understanding that public policy ultimately dictates that
uniform access to justice in the courts is imperative.
This bill would update specified statutory rules and conditions
surrounding mandatory electronic filing, in particular relating
to processing fees charged for electronic filing payments,
payment options, and the ability of prevailing parties to
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recover electronic filing fees.
Proposed Law:
This bill would prescribe the following specified limits on
fees associated with the electronic filing of court documents:
Adds 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
(EFM), or an electronic filing service provider (EFSP) to
process a payment for filing fees and other court fees
shall not exceed the costs incurred.
Consistent with existing law, specifies that the court,
an EFM, or an EFSP shall waive any fees charged if the
court deems waiver appropriate, including in instances
where a party has received a fee waiver.
Prohibits an EFSP, 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 EFSP for
electronically filing documents, from a party who is exempt
from paying fees; provided, however, that the EFSP must
complete the filing notwithstanding the fee exemption.
Further requires a court or an EFM 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 EFSP 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 networks for
financial transactions such as Automated Clearing House and
other payment methods that do not charge a transaction
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cost.
Authorizes 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 EFSP 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 EFSP
be approved by the Judicial Council.
Prohibits 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.
Requires the Judicial Council or its authorized
representative to 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 the fee and cost
reports to be issued pursuant to guidelines adopted by the
Judicial Council and to verify 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,
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whichever is later.
Adds to the list of recoverable costs by prevailing
parties:
o Fees for the electronic filing or service of
documents through an EFSP if a court requires or
orders electronic filing or service.
o Fees for the hosting of electronic documents
if a court requires or orders a party to have
documents hosted by an EFSP. This bill provides that
this paragraph shall become inoperative on January 1,
2022.
Makes other technical, clarifying and non-substantive
changes.
Prior
Legislation: AB 2073 (Silva) Chapter 320/2012 authorized the
Orange County Superior Court to establish a pilot project
mandating that parties electronically file documents in
specified civil cases, and required the Judicial Council to
adopt a rule on mandatory electronic filing before July 1, 2014.
Staff
Comments: The Judicial Council has indicated the provisions of
this measure are consistent with ongoing internal efforts to
promote the use and fairness of electronic filing.
Staff notes that due to the restrictions placed on charging fees
for persons subject to fee exemptions/waivers, this bill could
result in ongoing operating costs to the entities responsible
for the processing costs, which could be the vendor EFSP, the
EFM, or the court. To the extent a court serves as the EFSP
and/or EFM for low-income and self-represented litigants, many
of whom are indigent and qualify for fee waivers, these
processing costs would be absorbed by the court's operating
budget. Alternatively, to the extent courts enter into vendor
contracts for EFSP/EFM services, these unrecoverable costs could
be built into the costs of the vendor contracts, which would
AB 2244 (Gatto) Page 6 of
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also be a state cost. The magnitude of these costs would be
dependent on the unit processing cost and the volume of
transactions subject to the processing fee waiver annually,
which is unknown but potentially significant. As reported 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
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
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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. (Judicial Council, The
Critical Role of the State Judiciary in Increasing Access for
Self-Represented Litigants: Self-Help Access 360? (Jul. 2015)
This bill requires the Judicial Council or its authorized
representative to have access to and the right to examine the
records and documents of an EFSP for purposes of verifying the
accuracy of its fee and cost reports issued, and to verify the
EFSP's compliance with the bill's provisions. Additionally, the
bill requires EFSPs to maintain 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
completed, whichever is later. This requirement would imply that
the verification process must be conducted, although it does not
impose a strict timeline within which the process must be
completed. As a result, the Judicial Council could potentially
incur additional workload to conduct the verification process
described in this measure which would include interviewing EFSP
employees, as well as accessing, inspecting, and copying
relevant records of fees/costs for auditing purposes. To the
extent this process is already in place and operating, any
impact to the Judicial Council would be absorbable.
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