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Federal Circuit Hammers Government on Use of PACER Fees (1)

Feb. 3, 2020, 6:55 PMUpdated: Feb. 3, 2020, 8:47 PM

A Federal Circuit panel pressed a Justice Department attorney on how the U.S. government spends fees it collects through its electronic federal court record system during argument in a case over whether the charges are too high.

Three nonprofits are arguing in the case before the U.S. Court of Appeals for the Federal Circuit that fees the Administrative Office of the U.S. Courts charges for the Public Access to Court Records (PACER) violate federal law because they’re higher than what’s needed to operate the system.

The government argues that the law doesn’t put such strict limits on how it uses the money, but the judges appeared to reject that broad reading of the statute.

Gold-Plated Offices

Judge Raymond C. Clevenger III asked Department of Justice attorney Alisa Beth Klein if users could recover fees that the government uses for an “absolutely illegal” purpose.

He gave examples of redecorating judges’ offices with gold plate or putting the Supreme Court’s cafeteria menu on the PACER website. Klein didn’t directly respond to the question, prompting Clevenger to ask, “Do you have a lot of trouble answering questions generally in real life or just when you come in front of the court?”

Klein argued that Congress has the power to prevent particular expenditures of the funds.

Klein tried to focus on the government’s argument that the E-Government Act of 2002, which allows the Administrative Office to set PACER fees, doesn’t allow users to sue for damages.

The statute doesn’t set out the exact amount the judiciary can charge, so it’s “unknowable” how much users allegedly overpaid, she said.

Judge Todd M. Hughes stopped her, saying, “We’re more interested in the merits.”

Just Marginal Costs?

The Federal Circuit panel didn’t seem to fully accept the nonprofits’ arguments either.

Hughes asked their attorney, Deepak Gupta of Gupta Wessler PLLC in Washington, what Congress intended when it allowed the judiciary to charge fees for access to court documents—to cover the cost of sending information to users, or the costs of the underlying system.

Gupta said the fees should only cover the marginal cost of providing documents. The infrastructure was already in place by the start of the class period in 2010, he said.

But the systems have to be updated and maintained, Clevenger said.

Gupta suggested that the court interpret the statute and remand for the lower court judge to decide.

The panel appeared to agree with the U.S. District Court for the District of Columbia’s ruling in the case, which said the government can use PACER revenues for operating the PACER system, but not for non-PACER court technology projects.

Millions in Fees

Fees for downloading a copy of a filing run 10 cents per page, up to $3 per document. The Administrative Office of the U.S. Courts collected more than $145 million in fees in 2014 alone, according to the complaint.

The fees are prohibitive for indigent and pro se litigants who need access to court documents, the nonprofits argue on behalf of a certified class of PACER users.

But the government stressed in its briefs that the “lion’s share of PACER fee revenue comes from a handful of users.”

As of Jan. 1, the judiciary raised the user fee waiver from $15 to $30 per quarter. “This means that about 75% of all PACER users now pay nothing in any given quarter,” Administrative Office of the U.S. Courts Public Affairs Officer David Sellers said in a Jan. 31 email.

Judge Alan D. Lourie also served on the panel.

Tyler Mills, a team leader in Bloomberg Law’s Litigation Content group, serves on an advisory panel that provides advice and feedback to the Administrative Office of the U.S. Courts on electronic public access services provided by the federal judiciary, including PACER. Bloomberg Law’s Litigation Content group is separate from the news division.

The case is Nat’l Veterans Legal Servs. Program v. United States, Fed. Cir., No. 19-1081, argued 2/3/20.

(Updated with additional reporting throughout. )

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

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