'Excessive' PACER Fees Prompt Class Action Complaint

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By Melissa Heelan Stanzione

April 25 — The government agency running the PACER system, which provides online access to federal court records, charges more fees than necessary to recoup its costs in providing its services, a complaint filed in the U.S. District Court for the District of Columbia April 21 alleges.

“The judiciary has taken no steps to change the fee structure or the way it has administered the system and so that means, unfortunately, that a lawsuit is necessary,” Deepak Gupta, an attorney representing the plaintiffs, told Bloomberg BNA April 25. Gupta is with Gupta Wessler PLLC in Washington.

The increase in PACER fees creates “substantial barriers to accessing public records—for litigants, journalists, researchers, and others,” the complaint says.

Further, the complaint says the Administrative Office of the U.S. Courts, which runs the PACER system, discourages fee waivers for journalists, pro se litigants and nonprofits and hires private collection lawyers to sue individuals who can't pay the fees.

$145 Million in Fees

In the class action complaint, the plaintiffs—three non-profit organizations, the National Veterans Legal Services Program, the National Consumer Law Center and the Alliance for Justice—allege that the AO collected more than $145 million in fees in 2014, “much of which was earmarked for other purposes such as courtroom technology, websites for jurors and bankruptcy notification systems.” PACER stands for Public Access to Court Electronic Records.

Charles Hall, a spokesperson for the AO, had no comment on the case, citing its policy not to comment on pending litigation.

E-Government Act

Under the E-Government Act of 2002, the AO is authorized to charge PACER fees “as a charge for services rendered,” but only enough to reimburse expenses relating to providing the services.

Agencies have to get Congress to appropriate money for them, Gupta said.

“They are allowed to charge people fees for services but can't transform those fees into all-purpose, revenue-raising means,” Gupta said.

The judiciary has raised costs twice since 2005, despite accumulating surpluses in the millions of dollars, the complaint alleges.

“The basic idea here is that a government agency can't make up its own taxes,” Gupta said.

The complaint alleges that almost one decade ago, PACER fees had already generated at least $32 million in surplus funds.

First Challenge

The case is the first challenge to the PACER fee schedule by parties represented by counsel, the complaint says.

A pro se plaintiff challenged the fees in 2014 but the case “went the way so many cases do where there are not lawyers involved—it was dismissed,” Gupta said. That case was Greenspan v. Admin. Office, 2014 BL 341599 (N.D. Cal. 2014).

Two PACER-related complaints were filed in December 2015, alleging the system overcharges due to a billing error, Fisher v. United States, Fed. Cl., No. 15-1575C, filed 12/28/15 and Fisher v. Duff, W.D. Wash., No. 15-5944, filed 12/29/15.

Legal Strategy

One reason there haven't been more successful lawsuits is that people aren't sure what legal pathway they can use, Gupta said.

The E-Government Act doesn't create a cause of action, Gupta said, and the court system is exempt from the Administrative Procedures Act, which is the normal method you would use to challenge a government action, he said.

The theory used here is based on a little-known statute from 1887, the Little Tucker Act, he said.

The act waives the government's sovereign immunity and provides jurisdiction for damages claims to recover for an illegal exaction, Gupta said.

The illegal exaction theory provides a cause of action that money has been taken from someone in violation of a statute, he said.

“If such a cause of action didn't exist, the government could just take money from you in a lawless way and you'd have no way of seeking recovery,” Gupta said.

To contact the reporter on this story: Melissa Heelan Stanzione in Washington at mstanzione@bna.com

To contact the editor responsible for this story: Jessie Kokrda Kamens at jkamens@bna.com

For More Information

Complaint at http://src.bna.com/eq4.