BILL ANALYSIS Ó AB 2629 Page 1 Date of Hearing: April 19, 2016 ASSEMBLY COMMITTEE ON JUDICIARY Mark Stone, Chair AB 2629 (Roger Hernández) - As Amended March 18, 2016 As Proposed to be Amended SUBJECT: COURT REPORTERS: TRANSCRIPT FEES KEY ISSUES: 1)SHOULD the statutory feeS that court reporters are permitted to charge for transcriptS, WHICH HAVE NOT beeN INCREASED FOR 25 YEARS, be increased BY 45 PERCENT under a phaseD-in plan over the next FIVE years? 2)IN ADDITION TO RAISING COSTS FOR COURTS AND LITIGANTS GENERALLY, WOULD INCREASING THE COST OF TRANSCRIPTS PLACE THE ABILITY TO OBTAIN NECESSARY TRANSCRIPTS OUT OF THE REACH OF INDIGENT LITIGANTS IN THE ABSENCE OF IMPROVING ACCESS TO THE TRANSCRIPT REIMBURSEMENT FUND FOR SUCH LITIGANTS? SYNOPSIS AB 2629 Page 2 A court transcript is a verbatim record of what occurred at a court hearing. Without that official record of what transpired at a court proceeding, litigants may be unable to draft orders effectively and will generally not be able to appeal decisions, and those attempting to recount what actually happened during proceedings will be unable to so with any degree of accuracy. The fees charged by court reporters for transcripts have not been increased since 1990. In the 25 years since the transcript fee was last increased, the Consumer Price Index (CPI), as calculated by the Bureau of Labor Statistics, has increased by over 80 percent. As proposed to be amended, this bill, sponsored by the California Court Reporters Association (CCRA), seeks to increase the fee by approximately 45 percent, through step increases over the next five years, commencing in 2017. The author argues that this bill advances a modest transcript fee adjustment in order to bring parity and fair compensation for court reporters. The bill is supported by court reporter associations and SEIU. As now in print, the bill would have increased fees the same amount, but over a three-year period and then be subject to ongoing CPI increases. As a result of opposition by the plaintiffs and defense bar, who were concerned that an increase in transcript costs would harm both trial courts budgets and increase costs to litigants who can ill afford any increased costs, the author has agreed to stretch the fee increase over five years and eliminate the ongoing CPI increases. However, unless court reporters are in the courtroom, creating the record, a transcript cannot later be created at any price. This Committee has repeatedly stated that access to justice requires that California courts provide court reporters in all courtrooms. The supporters and the plaintiffs and defense bar strongly concur and have agreed to work together to seek funding in this year's Budget to bring court reporters back particularly to family law, but also to civil courts generally. AB 2629 Page 3 In order to defray the costs of court transcripts for indigent litigants, the Legislature created the Transcript Reimbursement Fund, which receives its $300,000 annual funding from court reporter license fees, but is scheduled to sunset effective January 1, 2017. To help ensure that indigent litigants have at least the same access to justice as they have today, supporters of this bill agree that not only must the Transcript Reimbursement Fund continue, but that it should be increased as necessary to cover the cost increase under this bill; and they have agreed to work to help ensure that occurs. SUMMARY: Increases the fees charged by court reporters for original transcripts and copies by 45 percent, through step increases over the next five years, commencing in 2017. Specifically, this bill: 1)Provides that the fee for transcription for the original printed copy, which reflects an amount assessed for each 100 words (also known as the "folio rate") will be charged as follows: a) From January 1, 2017 to December 31, 2018: $0.98 per 100 words (an increase from $0.85.) b) From January 1, 2019 to December 31, 2020: $1.13 per 100 words. c) Beginning January 1, 2021: $1.24 per 100 words. 2)Provides that the fee for each copy purchased at the same time by the court, party, or other person purchasing the original will be charged as follows: AB 2629 Page 4 a) From January 1, 2017 to December 31, 2018: $0.17 per 100 words (an increase from $0.15). b) From January 1, 2019 to December 31, 2020: $0.20 per 100 words. c) Beginning January 1, 2021: $0.22 per 100 words. 3)Provides that the fee for a first copy to any court, party, or other person who does not simultaneously purchase the original will be charged as follows: a) From January 1, 2017 to December 31, 2018: $0.23 per 100 words (an increase from $0.20), and $0.17 for each additional copy purchased at the same time. b) From January 1, 2019 to December 31, 2020: $0.26 per 100 words, and $0.20 for each additional copy purchased at the same time. c) Beginning January 1, 2021: $0.29 per 100 words, and $0.22 for each additional copy purchased at the same time. 4)Clarifies that the fee for special daily copy service transcription is an additional 50 percent. 5)Makes legislative findings and declarations. AB 2629 Page 5 EXISTING LAW: 1)Specifies the following transcript-related fees: a) The fee for transcription for the original copy is $0.85 for each 100 words. b) The fee for each copy purchased at the same time by the court, party, or other person purchasing the original is $0.15 per 100 words. c) The fee for a first copy to any court, party, or other person who does not simultaneously purchase the original is $0.20 per 100 words, and $0.15 for each additional copy purchased at the same time. (Government Code Section 69950.) 2)Provides that, notwithstanding #1), above, if a local trial court had established transcription fees in effect on January 1, 2012 based on an estimate as to the number of words or folios on a typical transcript page, those transcription fees shall be the transcription fees for proceedings in those trial courts, and the policy or practice for determining transcription fees in those trial courts shall not be unilaterally changed. (Id.) 3)Establishes the Transcript Reimbursement Fund (Fund) for the purpose of providing shorthand reporting services to low-income litigants in civil cases who are unable to otherwise afford those services. More specifically, requires funds generated by court reporter licensing fees, in excess of funds needed to support the Court Reporter Board's operating budget, to be used by the Board for the purpose of AB 2629 Page 6 establishing and maintaining the Fund. Authorizes the Fund only until January 1, 2017, unless another statute is enacted before that date that deletes or extends the sunset date. (Business & Professions Code Section 8030.2.) 4)Permits, until January 1, 2017, a person appearing pro se at any stage of the case to apply to receive assistance with transcription costs from the Fund, subject to a limit of $1,500 per case and not to exceed $30,000 annually for all cases. (Business & Professions Code Section 8030.5.) FISCAL EFFECT: As currently in print this bill is keyed fiscal. COMMENTS: A court transcript is a verbatim record of what occurred at a court hearing. Without that official record of what transpired at a court proceeding, litigants may be unable to draft orders effectively and will generally not be able to appeal decisions, and those attempting to recount what actually happened during proceedings will be unable to so with any degree of accuracy. The fee charged by court reporters for original transcripts has not been increased since 1990. This bill, as proposed to be amended, seeks to increase the fee by approximately 45 percent, through step increases over the next five years, commencing in 2017. According to the author: California has not adjusted the court transcript fee collected by court reporters since 1990. Court reporters employed by the courts are currently paid under a dual compensation structure in which the base salary of a court reporter is supplemented by the income from preparing required transcripts and providing other required transcription services. The dual compensation structure protects the state from AB 2629 Page 7 bearing the full cost of transcript preparation and other transcription services. This avoids the resulting consequences of overtime liability related to these services. In order to bring parity and fair compensation for court reporters, this bill advances a modest transcript fee adjustment. This will ensure the system of dual compensation is up to date in providing sufficient payment for transcription services. The last increase in the transcript fee occurred through SB 2376 (Presley), Chap. 505, Stats. 1990, which increased the transcription fee, effective 1991, for court reporters from $0.70 to $0.85 per 100 words for an original transcript, and from $0.10 to $0.15 per 100 words for each copy of a transcript ordered at the same time as the original. Since 1990, the CPI, as calculated by the Bureau of Labor Statistics, has increased by 81 percent, but the costs of transcriptions has not increased. This bill increases the fee for the original transcript per 100 words to $0.98 for 2017-18, $1.13 for 2019-20 and $1.24 for 2021 and thereafter. The bill similarly increases the fees, over five years, for each copy purchased at the same time as the original transcript from $0.15 to $0.22 per 100 words, and for a copy purchased without the original transcript from $0.20 to $0.29 per 100 words, while additional copies purchased at that time would increase from $0.15 to $0.22 per 100 words. These increases all represent a 45 percent increase from the current fees. In support of raising these fees, which again have not been increased in over 25 years, CCRA writes that court reporter transcripts "are vital to the delivery of justice in California. AB 2629 Page 8 Parties regularly rely on court records to prepare for future hearings, explore potential legal theories, as well as, ensure compliance with statutory and constitutional requirements. In essence, an official transcript is used both to enable parties to fully exercise their legal rights and to provide some level of accountability of our judicial process." CCRA explains that court reporters spend thousands of dollars to purchase their own equipment and "are subject to a dual compensation structure. The hours we work at the courthouse are paid for through a traditional employee wage or salary model. However, whenever an official transcript must be produced, we are required to spend evenings and weekends doing the work. This is uncompensated through salary or wages." Instead, it is compensated by a statutory transcript fee, which has not "been updated since 1991, falling far behind the rate of inflation." Despite previous attempts, transcript fees not raise since 1990. There have been several attempts to raise the transcript fee since 1990, none of which have been successful. In 1999, SB 449 (Burton), passed the Legislature, but was vetoed by the Governor. That bill would have raised fees on the original transcript to $1.15 per 100 words, but, at the same time, would have lowered the fees on copies purchased with the original transcript from $0.15 to $0.10 per 100 words. That bill would also have expanded access to the Transcript Reimbursement Fund for indigent litigants to help ensure that any increase in transcription costs did not impact their ability to access justice. That bill was vetoed by then Governor Gray Davis, who wrote: "I am vetoing this bill because it would result in a significant increase in costs for the State's trial court system, which is supported by the General Fund, and the Court Reporters Board, which is supported by license fees paid by registered court reporters. . . . I believe this issue should be examined in the annual budget process." AB 2305 (Klehs), 2006, would have changed the transcript fee from a folio rate to per page rate and set the fee for the AB 2629 Page 9 original transcript at $3.57 per page, with the cost of additional copies set at $0.63 per page. That bill was referred to this Committee, but was not heard. The most recent attempt to raise the fee was AB 582 (Evans) in 2007, which would also have changed to a per page rate and increased the fees. That bill passed the Assembly, but was not heard in the Senate. As a result of this lack of legislative action, transcript fees have not increased in 25 years, even though the cost of living, as measured by the CPI, has increased approximately 80 percent. Access to a court transcript is an important component of access to justice. As discussed above, without the official record of what transpired at a court proceeding, litigants may be unable to draft orders effectively and will generally not be able to appeal decisions, and those attempting to recount what actually happened during proceedings will be unable to so with any degree of accuracy. For example, when issuing a judgment in a contested family law matter, the judge often requires one of the parties to prepare a written judgment memorializing the orders of the court. Without a transcript, preparation of a judgment, and therefore enforcing the orders made by the judge, may be all but impossible. Similarly, if a litigant seeks to modify a judgment based on a change of circumstances, it is often necessary to understand, and communicate to the court, the circumstances the court initially took into account in making a custody or support order, for example. Absent a transcript, this too may be very difficult. The Transcript Reimbursement Fund for represented and unrepresented indigent litigants. In order to defray the costs of court transcripts for indigent litigants, the Legislature created the Transcript Reimbursement Fund. The Fund was established by AB 1017 (Alatorre), Chap. 1350, Stats. 1980, and is maintained by a percentage of the dues imposed on certified shorthand reporters. AB 1017 was sponsored by the Western AB 2629 Page 10 Center on Law and Poverty and California Rural Legal Assistance who argued that "because indigent litigants are unable to pay for transcripts they are effectively denied appropriate legal remedies." The Fund is used to reimburse court reporters the cost of preparing official court and deposition transcripts for indigent litigants, as defined, served by a qualified legal services project, qualified support center or other qualified project, or a pro bono attorney. Because of concerns that the huge volume of unrepresented parties could overwhelm the Fund, it had historically excluded litigants representing themselves at any stage of the case. The Fund receives $300,000 each year from court reporter license fees. Unfortunately, not all indigent litigants are able to secure counsel to represent them. In fact, most indigent litigants in areas such as family law are forced to represent themselves in court. In response to concerns that indigent, unrepresented litigants have no ability to access the Fund, SB 1181 (Cedillo), Chap. 581, Stats. 2010, established a small sub-fund to help cover the costs of transcripts for indigent, unrepresented litigants. That sub-fund is limited to $30,000 annually, which is taken from the $300,000 in the Fund for represented litigants, and covers, at most, $1,500 per case. It appears that while the total Fund has not been fully expended in the last decade, the $30,000 sub-fund for unrepresented litigants is used up early every year, so that many unrepresented litigants are still unable to obtain assistance from the Fund. Regardless of the effectiveness of both programs in meeting the needs of indigent litigants, both the Fund for indigent represented litigants and the sub-fund for unrepresented litigants are scheduled to sunset effective January 1, 2017. In order to help provide access to justice for indigent litigants, the Transcript Reimbursement Fund for both represented and unrepresented litigants must be continued beyond this year. Moreover, given that raising the cost of a transcript by 45 percent for indigent litigants may result in even less access to AB 2629 Page 11 transcripts than they currently have, it is important that the Transcript Reimbursement Fund, particularly the fund for unrepresented litigants which today is underfunded, be increased at the same rate that the transcript fees are being increased by this bill. This will help ensure that indigent litigants have at least the same access to justice as they have today. The supporters of this bill, the court reporters whose licensing fees fund the Transcript Reimbursement Fund, agree that not only must the Fund continue in order to help ensure that indigent litigants have access to justice, but that it should be increased as necessary to cover the cost increase under this bill. Cost increases for government entities: According to Judicial Council, the trial courts spent over $19 million on court transcripts in the 2014-15 fiscal year. If the fee increases proposed by this bill become effective, costs to the trial courts would increase by roughly $3 million in 2017 and by $9 million in 2021. Some courts purchase transcripts in criminal cases on behalf of the district attorneys and the public defenders, and thus this bill would not increase their costs. In other counties, the district attorneys and the public defenders purchase their own court transcripts. This Committee has heard from district attorney's offices in eight counties, including Contra Costa, Fresno and Santa Clara Counties. The 2015 transcript costs for those counties was $170,000, so the fee increase from the bill would amount to approximately $25,000 in 2017 and $76,000 in 2021. In addition, the Attorney General's Office estimates that it spends approximately $500,000 a year on court transcripts. The proposed increase would cost the Attorney General's office approximately an additional, $75,000 in 2017 and $225,000 in 2021. Amendments remove opposition from plaintiff and defense bars. The cost increases in this bill will also impact other litigants. Consumer Attorneys of California and the California Defense Counsel had jointly opposed the bill because of AB 2629 Page 12 significant concerns about how the bill "would harm trial court budgets and increase costs for litigants who can ill afford additional increases." The attorneys' groups had stated: Our members who appear in court every day on civil cases have borne the brunt of the drastic cuts in court funding. We have faced escalating user fees for filing cases and motions while finding fewer civil courtrooms open for access to justice. This has included hourly and daily fees imposed for the use of court reporters employed by the court. Our members have asked whether they will soon be asked to pay hourly user fees for the services of the bailiff or the judge. Our tax dollars are intended to fund the judicial branch, and the devolution into excessive reliance on user fees has gone too far. As court reporters have been disappearing from civil courtrooms over the last several years, our members have been forced to bring in private pro tempore court reporters who are performing an official function. This is a highly dysfunctional situation that does not serve anyone well. In response to those concerns, the author has agreed to stretch the fee increase over five years and eliminate the ongoing CPI increases. Moreover, the sponsors and the plaintiff and defense bar have agreed to work cooperatively to help bring court reporters back into courtrooms across California, as discussed more fully below. As a result, the Consumer Attorneys of California and the California Defense Counsel have removed their opposition to the bill. Access to a court transcript begins with access to a court reporter. If no court reporter is present at the court proceeding, no transcript can be available; and, unfortunately, most courts in California today no longer provide court reporters in civil and family law matters. Thus for most of these matters, unless parties bring in their own court reporter to court, there is at best limited access to justice and an AB 2629 Page 13 increase in the transcript fee is not relevant since there is no record of the court proceeding to transcribe. As a result of the recession and state budget crisis, trial courts budgets were reduced, and, among other service reductions, many courts reduced or eliminated court reporters unless their services were mandated by statute. In order to better understand the impacts of budget reductions on the trial courts, this Committee independently surveyed the 58 trial courts in 2013 to assess what measures the courts had taken to address the cuts, including any reduction in court reporters. Of the 55 (out of 58) courts to respond, six had reduced expenditures for court reporters, and fully 30 courts reported that they had ceased providing court reporters for civil, family and probate proceedings. Even as the court budgets have increased by millions of dollars over the last few years, courts have not added court reporters back into court proceedings. The Judicial Council provided updated information from 47 courts this year. Of those courts reporting, 34 did not generally provide court reporters for family law matters (including Riverside, Sacramento, San Diego and San Francisco), while 13 courts (including Los Angeles and Santa Clara) did. In those courts that do not provide court reporters, parties who wish to have an official record of proceedings must hire and pay the substantial cost of providing their own private court reporter. If they do not do so, the litigants will be unable generally to appeal decisions, parties may be unable to draft orders effectively, and those attempting to recount what actually happened during proceedings will be unable to so with any degree of accuracy. A recent appellate court decision summarized the problems of AB 2629 Page 14 access to justice in a dissolution case in which the appellant was unable to provide an accurate transcript of the proceedings because there had not been a court reporter present at the trial court, an all too frequent occurrence in courts in California today. The appellate court wrote, in a footnote: We are deeply troubled by the trial court's policy of conducting all family law matters without a reporter unless a reporter is engaged by one or both parties at their own expense. This policy is actually codified in a local rule stating, "The family court does not provide a court reporter in family law matters, except when possible a reporter will be provided for DCSS and restraining order matters. If you would like to have a court reporter present you will need to hire and pay all costs associated with the reporter." (Super. Ct. Santa Cruz County, Local Rules, rule 3.7.01.) As illustrated by this case, the absence of a verbatim record can preclude effective appellate review, cloaking the trial court's actions in an impregnable presumption of correctness regardless of what may have actually transpired. Such a regime can raise grave issues of due process as well as equal protection in light of its disparate impact on litigants with limited financial means. The practice becomes all the more troubling when viewed in combination with the statewide prohibition against privately recording court proceedings "for any purpose other than as personal notes." (Cal. Rules of Court, rule 1.150(d).) Perhaps the time has come at last for California to enter the 20th century and permit parties to record proceedings electronically in lieu of the far less reliable method of human stenography and transcription. Until that day, however, we believe the right to effective appellate review cannot be permitted to depend entirely on the means of the parties. (In re Marriage of Obrecht (2016) 206 Cal. App. Lexis 138, 11, footnote 3.) AB 2629 Page 15 The need for court reporters and for accurate records is also now being briefed before the California Supreme Court in a medical malpractice case. In that case, Jameson v. Desta (2015) 241 Cal. App. 491, involving an indigent plaintiff who was granted a fee waiver, the San Diego trial court told the parties that there would be no court reporter available and if they wanted a record they would have to provide their own reporter. The parties did not. The trial court granted a motion for nonsuit in favor of the defendant, and the plaintiff appealed. However, because there was no record of the court proceedings, the appellate court found that the plaintiff could not show that any error occurred at the trial court and upheld the trial court's judgment for the defendant. The Supreme Court took the case to decide if a party granted a fee waiver can be denied a court reporter and, as a result, an effective right to appeal. The decision in that case could impact whether court reporters (and hence the availability of a transcript) are required in cases involving indigent parties, but would not necessarily impact cases where parties do not qualify for a fee waiver, but are still unable to provide their own court reporter. Supporters and the plaintiff and defense bars committed to work together to bring court reporters back into the courtroom. All stakeholders agree strongly that access to justice requires that California courts provide court reporters in all courtrooms, and for years this has been an issue of great concern to this Committee. To that end, the supporters of the bill, as well as the plaintiff and defense bar, have agreed to work together to seek funding in this year's Budget to bring court reporters back particularly to family law, but also to civil courts generally. Do the statutory transcript fees apply to pro tempore court reporters brought in by private parties? Court reporters include official court reporters, who are employed by the court, and official court reporters pro tempore, who may be brought in by the court and appointed by the court to perform the duties of an official reporter if one is not available. (Government Code AB 2629 Page 16 Section 70044.) Court reporters also include private court reporters who are brought in, and paid for, by private parties when no court reporter is provided by the court. These reporters are not court employees, but nonetheless prepare the official court record of the proceeding. The fees that are the subject of this bill do not explicitly state whether they apply to court reporters brought in by private parties, though it had been presumed by many that the statutory fee structure applied to them as well. However, a recent superior court decision from Los Angeles County, Burd v. Barkley Court Reporters Inc., held that the statutory fee limits do not apply to court reporters pro tempore brought in by private parties. (America Hernandez, Pro tem reporters' fees not capped, Daily Journal (Jan. 11, 2016).) Given that more and more courts no longer provide court reporters, more and more parties are relying on private, pro tempore reporters that they bring to court themselves and courts then appoint for a particular matter. If the Burd v. Barkley Court Reporters Inc. case were to become precedent -- and that is not at all clear since the case was just appealed last week and the parties are awaiting a briefing schedule -- this bill would likely not impact court reporters in civil and family law actions in the majority of courts today where official court reporters have been eliminated and parties' can only have a court reporter present if they choose to bring in their own private, pro tempore reporter. Thus, the impact of the bill, at least on non-criminal and juvenile court matters (since official court reporters are not required in those cases) is not completely clear. Pending Related Legislation: AB 1834 (Wagner) would permit use of electronic recording in family law cases when a court reporter is unavailable. That bill was held in this Committee after a hearing. REGISTERED SUPPORT / OPPOSITION: AB 2629 Page 17 Support California Court Reporters Association (sponsor) Los Angeles County Court Reporters Association Northern California Court Reporters Association Orange County Superior Court Reporters Association Sacramento Official Court Reporters Association San Diego Superior Court Reporters Association SEIU California Opposition (as proposed to be amended) None on file Analysis Prepared by:Anthony Lew and Leora Gershenzon / JUD. / (916) 319-2334 AB 2629 Page 18