November 19, 2017

The Trouble with PACER Fees

One sentiment I’ve seen in a number of people express about our release of RECAP is illustrated by this comment here at Freedom to Tinker:

Technically impressive, but also shortsighted. There appears a socialistic cultural trend that seeks to disconnect individual accountability to ones choices. $.08 a page is hardly burdensome or profitable, and clearly goes to offset costs. If additional taxes are required to make up the shortfall RECAP seems likely to create, we all will pay more in general taxes even though only a small few ever access PACER.

Now, I don’t think anyone who’s familiar with my work would accuse me of harboring socialistic sympathies. RECAP has earned the endorsement of my colleague Jim Harper of the libertarian Cato Institute and Christopher Farrell of the conservative watchdog group Judicial Watch. Those guys are not socialists.

Still, there’s a fair question here: under the model we advocate, taxpayers might wind up picking up some of the costs currently being bourne by PACER users. Why should taxpayers in general pay for a service that only a tiny fraction of the population will ever use?

I think there are two answers. The narrow answer is that this misunderstands where the costs of PACER come from. There are four distinct steps in the process of publishing a judicial record. First, someone has to create the document. This is done by a judge in some cases and by private litigants in others. Second, someone has to convert the document to electronic format. This is a small and falling cost, because both judges and litigants increasingly produce documents using word processors, so they’re digital from their inception. Third, someone has to redact the documents to ensure private information doesn’t leak out. This is supposed to be done by private parties when they submit documents, but they don’t always do what they’re supposed to, necessitating extra work by court personnel. Finally, the documents need to be uploaded to a website where they can be downloaded by the public.

The key thing to understand here is that the first three steps are things that the courts would be doing anyway if PACER didn’t exist. Court documents were already public records before PACER came onto the scene. Anyone could (and still can) drive down to the courthouse, request any unsealed document they want, and make as many photocopies as they wish. Moreover, even if documents weren’t public, the courts would likely still be transitioning to an electronic system for their internal use.

So this means that the only additional cost of PACER, beyond the activities the courts would be doing anyway, is the web servers, bandwidth, and personnel required to run the PACER web sites themselves. But RECAP users imposes no additional load on PACER’s servers. Users download RECAP documents directly from the Internet Archive. So RECAP is entirely consistent with the principle that PACER users should pay for the resources they use.

I think there’s also a deeper answer to this question, which is that it misunderstands the role of the judiciary in a free society. The service the judiciary provides to the public is not the production of individual documents or even the resolution of individual cases. The service it provides is the maintenance of a comprehensive and predictable system of law that is the foundation for our civilization. You benefit from this system whether or not you ever appear in court because it gives you confidence that your rights will be protected in a fair and predictable manner. And in particular, you benefit from judicial transparency because transparency improves accountability. Even if you’re not personally interested in monitoring the judiciary for abuses, you benefit when other people do so.

This is something I take personally because I’ve done a bit of legal reporting myself. I obviously get some direct benefits from doing this—I sometimes get paid and it’s always fun to have people read my work. But I like to think that my writing about the law also benefits society at large by increasing public understanding and scrutiny of the judicial system. And charging for access to the law will be most discouraging to people like me who are trying to do more than just win a particular court case. Journalists, public interest advocates, academics, and the like generally don’t have clients they can bill for the expense of legal research, so PACER fees are a significant barrier.

There’s no conflict between a belief in free markets and a belief that everyone is entitled to information about the legal system that governs their lives. To the contrary, free markets depend on the “rules of the game” being fair and predictable. The kind of judicial transparency that RECAP hopes to foster only furthers that goal.

Comments

  1. The text containing the rules and rulings of our government are the source code of our Judicial system. We need to free it for the same reason we free other code– it’s impossible to understand the system until you examine its machinery. Running a meter while we look under the hood hinders people from seeing in detail how government works. No Democracy should stand for that.

    There is no argument for charging for access to judicial opinions specifically, as opposed to charging a la carte for government services generally. And the general case is especially bad in this instance, when it taxes civic knowledge and the seeking of justice and redress in our courts.

  2. I think they’re not talking about normative costs, but the idea that PACER costs are largely fixed, in the age of cheap hardware and bandwidth. Say it takes $800 a year to power-wash the server room. (It’d be fun.) Today there are 1000 users, they average 10 pages a year, and we charge them $0.08 per page. That pays for the power-washing budget.

    If tomorrow everyone switches to RECAP, and the users pull only 1 page a year instead of 10, PACER comes up $700 short, somebody goes to a budget meeting, and the rates get raised to $0.80 per page.

    Now, I’m not sure that’s what would actually happen, but I think that’s the basic objection. If I were an economist, maybe I’d know the name for that phenomenon, and I’d understand why insurance companies want to limit the number of MRIs done (since MRI costs pay mostly for the machine, and those costs will be similarly divided up among patients no matter how many patients there are).

  3. “There’s no conflict between a belief in free markets and a belief that everyone is entitled to information about the legal system that governs their lives.”

    Well, actually, there is. You’re saying, in THIS situation, in these circumstances – plutocracy does not produce the best outcome. And if one thinks about it – that’s really quite a surprising statement from a Libertarian perspective, given that the particulars – a general taxpayer subsidy to a very small group of actual users, almost all of which are quite affluent – would naively be expected to draw frothing denunciation from them. In that way, it looks like immense special-pleading with transparent justification of the public good.

    After all, if “everyone is entitled to information about the legal system that governs their lives”, why isn’t everyone entitled to public education so as to be able to use that legal system that governs their lives? Oh no, you might say, that must be purchased at whatever price the market will bear, and charity will take care of the poor. But once you’ve opened the benefit door even a little bit, can you ever shut it again without an intellectual problem?

    Now, of course, I happen to believe in the public good argument quite strongly. However, I do think you’re trying to handwave away one of the key flaws of Libertarianism which you’ve just been called out on, more rudely expressed as “That’s libertarians for you – anarchists who want police protection from their slaves”.

    • Nah. Even most libertarians — much less others who believe in markets — acknolwedge that certain parts of your structure have to be outside the normal market mechanism if you’re going to have effiiciency. It makes sense not only from the point of view of equity-like efficiency (you want to deter force and fraud regardless of the relative economic positions of the parties) and Coase-style efficiency (bad results if law enforcement officers have to make exhaustive checks on eligibility on a transaction-by-transaction basis).

    • John Millington says:

      The documents in question are created by government. The very premise is already outside the scope of free markets.

      “a general taxpayer subsidy to a very small group of actual users, almost all of which are quite affluent – would naively be expected to draw frothing denunciation from them”

      The very availability of the court (and its ability to enforce its decisions) is the “subsidy,” not just the documentation that comes out of it. So all you’re really saying is that libertarians, unlike anarchists, accept a government role in the justice system. I’m not sure that’s going to raise any eyebrows.

      “”After all, if “everyone is entitled to information about the legal system that governs their lives”, why isn’t everyone entitled to public education so as to be able to use that legal system that governs their lives?””

      Maybe you’ve got something there, but I suspect most libertarians (uh oh, I’m about to put my foot in my mouth) would prefer a simplification of law so that significant legal education would not be needed in order to use the legal system. Until we can repeal 99% of the laws (i.e. stop having government create the necessity of legal training), I dunno, maybe taxpayer-funded legal training isn’t all that bad of a transitional compromise, from a libertarian perspective. And there’s a weird sort of nasty scorched-earth justice to that: make society pay a heavy price for the burden of all the unnecessary laws that it imposes on its citizens, and take responsibility for what it is doing. If you don’t want to pay sufficient taxes to educate every citizen on how to work with government, then don’t make government so big and complicated. It’s a horrific idea, but perversely fair too.

  4. Anonymous says:

    I was wondering why pacer.resource.org isn;t mentioned on the RECAP home page?

  5. Surely he primary users of Pacer are lawyers — they will continue using Pacer because:
    1. Clients pay for this.
    2. If they get documents form a third party, they cannot be sure the documents are authentic.

  6. Correct me if I’m wrong, but I believe I heard somewhere that the PACER system generates far more money than it costs to run every year. If that’s the case, then whether or not PACER starts losing money doesn’t really matter since it’s not like they are barely making enough to cover costs.

    Secondly, if we’re going to make the argument that the costs of PACER should fall only on the users, what stops that argument being applied to other public records? If Congress charged for online access to proposed bill, debates on the floor, etc, it would impede efforts at government transparency and provoke a vocal outcry. Public records are kept to ensure that any citizen can make sure that government stays (relatively) honest, and those costs are assumed within the tax structure we have currently. The judiciary is a branch our government, and it has no special immunity concerning transparent records. The PACER system is merely making records more freely available, as other governmental agencies have done or tried to do in the past.

    • Hey, since you asked–here’s a post from WSJ Law Blog that references the federal judiciary technology fund surplus ($150M in 2006):

      http://blogs.wsj.com/law/2009/03/03/lieberman-to-courts-whats-the-deal-with-pacer/

      I think it’s something useful to keep in mind in this discussion.

      BTW, great work on RECAP, guys.

    • Anonymous says:

      There was a report done by Stephen Schultze and Shubham Mukherjee at the CITP earlier this year that reported this — they, like Senator Lieberman, meant well but did bot understand the budget process with regard to EPA funds (from PACER fees) and JITF funds (which is a very different animal). PACER did run a small surplus from 2006 to 2008, but with the introduction of free access to written opinions and the limitation of 30 pages paid per document as well as the further development of the infrastructure necessary to keep PACER running, there is no meaningful surplus now or in future budgets. The author misses the bulk of the cost of PACER in this article — but he covers the general perception fairly well. I would suggest that it might be profitable (npi) for the Administrative Office to work with the CITP and offer some internships to students and/or fellows at the CITP so that they might have a better idea how the system really works without having to tease it out of rumor and some rather recondite budget reports.

      I have it on pretty good authority that there are very few within the Judiciary that would not rather have a direct appropriation for PACER that would remove the paywall. That would indeed be popular. Unfortunately, that could also mean shutting the system down periodically during continuing resolutions and the like. There would be no guarantee from year to year that the project would be funded at all. With the current system, enlarged use helps develop the system. Lowered use eases costs. The sad fact is that in today’s (and more importantly tomorrow’s) fiscal environment, the paywall offers better access than the alternative.

  7. While I agree with your ethical and legal reasoning, there’s one point that is inescapable: RECAP will reduce revenue to Pacer and thence to the government. This will result in a decrease in total government revenue, which will, inevitably, transfer costs to the taxpayer.

    The long version of this is as follows:

    The court system as a whole is a taxpayer subsidy to private enterprise. In virtually all cases, virtually all of the benefit from the disposition of civil cases flows to one or both of the parties directly involved. (Criminal cases are a different matter, obviously.) The parties do not, by any means, come close to covering the costs of maintaining the justice system, and anything they don’t pay is a subsidy to them.

    The charges for Pacer documents are an attempt for the government to capture from the direct users of the justice system some of its costs. (This BTW, is a way in which the argument about Pacer differs from that of congressional records, etc. The latter affect all citizens, not just the parties to a lawsuit.) Therefore, what’s missing from the argument in this post is that the government need not justify Pacer charges simply to defray Pacer’s specific costs. It is part of paying for the entire cost of the judiciary, and is borne (mostly, pax the reporters for the third estate) by people who use the judiciary most.

    An aside:

    A question for you libertarians out there is this: Why don’t you support the flat-out privatization of the court system, as, for example, libertarians support the privatization of parks? Many cases are already disposed of in arbitration, generally in a procss run by the American Arbitration Association, a private entity. Could not the government simply monitor the processes and outcomes of a private system, and see that the laws were being duly enforced? Even agreeing that “a system of courts and law is the foundation of our civilization”, why, from the libertarian point of view, must courts be owned and run by the government?

    Of course, if the court system were private, its documents could be copyright, and then the issue of a RECAP wouldn’t arise.

    • I can’t speak for all libertarians, but in my personal view “private court” is simply a category error. The government is, by definition, that institution in society which has a legal monopoly on coercion. Courts are therefore inherently governmental institutions. You could, I suppose, give judicial powers to private parties, but in my view this means that the private party has become part of the government, not that the courts have become privatized.

      Also, I think you’re wrong to say that “the benefit from the disposition of civil cases flows to one or both of the parties directly involved.” If the courts are doing their job, the benefits flow primarily to those who *don’t* wind up in court, because the rules are so clear and effectively enforced that no one dares break them. For example, the threat of judicial enforcement makes people more likely to honor their contractual obligations. In a sense, I benefit the most from contract law when I don’t have to go to court because my counter-parties voluntarily keep their commitments. Likewise, the most important beneficiaries of the tort system aren’t plaintiffs collecting damages, but the many people who never become victims because potential tortfeasors are successfully deterred by the threat of damages.

      On top of that, we have a common law system, so prior decisions are binding precedent. That means I should have access to judicial records for all the same reasons I should have access to legislative records: both directly affect my rights under the law, and I need access to both to understand what my rights are.

      • I don’t see why any of that need stand in the way of having a private court system. A very simple expedient toward one could be that the appellate courts remain government operated, while the lowest courts be operated privately. That way, all the features you look for in the legal system would be preserved. If the lower court (as today) gets the facts or the law wrong, the appellate system would correct it. And these appellate records would be copyright free – it is after all, the appellate records that really define the law, not the lower court cases. (And anyway, we can simply impose a rule that the private court cases have to be released, under some sort of RAND terms.)

        Libertarian arguments have been made for privatizing virtually everything the government does, and during the previous administration, many steps were taken to that end. Think back, for example, to the case of the airport inspectors for the Dept. of Homeland Security. The GOP, based largely on libertarian arguments, tried (without success) to allocate this function to a private security agency. Likewise, in Iraq, many of the functions that were performed by the army in WWII are today done by contractors.

        Now I bring these up because these are examples of privatizing actual coercion, not merely the theoretical kind practiced by courts. And I have seen libertarian arguments for privatizing the military itself. If we put our mind to it, it would be possible to construct a private court system.

        Also, the argument about there being “social side effects” of my lawsuit against my landlord for not taking care of the mice is dangerous for a libertarian to make. Once we start worrying about those sorts of side effects, I can make the argument that it is better for me if there are schools for my neighbors children to go to, better for me if my neighbor has health care, roads, whatever you want…

        • “Think back, for example, to the case of the airport inspectors for the Dept. of Homeland Security. The GOP, based largely on libertarian arguments, tried (without success) to allocate this function to a private security agency. Likewise, in Iraq, many of the functions that were performed by the army in WWII are today done by contractors.”

          I’m against using mercenaries in Iraq for precisely the reasons I outlined above, and I think most libertarians agree with me. And I wouldn’t be any happier with the TSA if they outsourced inspections to a private company. Likewise, I’m skeptical of privately-operated prisons, private red-light-camera enforcement, and the like.

          As far as the courts go, I think you’re underestimating the amount of discretion district courts have. Appellate courts perform only a cursory review based on the record the lower court has built up. If that record is inaccurate or incomplete, the appellate court don’t have the time or resources to correct or supplement it. So either you’d have to beef up the appellate courts a lot (which would seem to defeat the purpose) or you’d wind up placing a great deal of discretion in the hands of private firms. I think that’s a bad idea.

          • I am glad we agree on the substantive matters! However there are more libertarians making these arguments than you’re willing to admit. For example, as recently as 2003, the Cato Institute was calling for the TSA to be privatized:

            “The federal takeover of airport passenger screening was a big mistake and has run into serious troubles.
            […]
            “After 2004, TSA should focus only on standard setting and regulatory oversight, and airports should adopt privatized security. The TSA has ample time before 2004 to fine-tune standards and procedures and to train a high-quality airport screening workforce.”

            http://www.cato.org/dispatch/05-01-03d.html

            In fact, (and I didn’t know this before now) some of the TSA screeners are still employed by private companies, in San Francisco International Airport; Kansas City International Airport; Greater Rochester International Airport; Tupelo Regional Airport; Key West International Airport; and Jackson Hole Airport.

            http://en.wikipedia.org/wiki/Transportation_Security_Administration#A_brief_history

            As the Cato paper says, this came about because of a compromise between the Senate version (where the Democrats insisted on Federal management) and the House version, which was 100% private.

            Regarding your last paragraph: yes, today the appellate courts are insufficient to police an underlying court system. They would have to be beefed up, but the general notion of requiring parties to attempt to settle a case by hiring a private court before calling in the government is not inherently unworkable, and while we agree it’s a bad idea for various reasons, these are not strictly practical in nature.

          • There are already private courts, and they suffer from a structural problem that any economist could predict: because their revenue derives from customers they have a strong incentive to issue opinions that favor large repeat customers over those who will be paying their fees only once or twice. In addition, repeat customers have a strong informational advantage because they can decide which of many “competing” jurists to hire for a particular case. Beefing up the appellate level won’t help here, because appellate courts are constituted as triers of law. Except in extremely extraordinary situations they have to accept the lower court’s findings of fact, and it’s precisely those findings of fact that would be most in dispute.

            (Of course, this kind of pay-for-play perverse incentive can affect government agencies as well, particularly those funded by their direct users — see various analyses of regulatory arbitrage as it affected the US banking meltdown. In fact, there’s a pretty fair argument that PACER fees are an example of just this kind of regulatory capture: they’re not onerous to disputants who have serious money at stake, only to outside analysts and other noncombatants.)

          • I mentioned the American Arbitration Association in the very first post in the thread, as a model for the sort of thing I was proposing. As I said, I am not a libertarian, and I asked this question because I think that it is the sort of thing libertarians should be supporting out of consistency. I don’t know how many other libertarians actually think this sort of thing is a good idea, because other than Timothy Lee, no other libertarians have answered. As I pointed out, the Cato Institute doesn’t seem to buy the argument that there’s an inherent problem with entrusting private entities with coercive powers.

            However, to respond to what you said, let me make the following observations (again, putting on my libertarian hat):

            Yes, the private courts could be subject to the sorts of structural biases you suggest. However, the government-run courts suffer from predictable problems as well.

            They are politicized. (There are some pretty shocking studies that show that, for example, if you are an asylum-seeker, by an overwhelming majority, the most important factor in whether you get it or not is what judge you appear in front of.)
            They are also underfunded, and furthermore, judgeships remain unfilled for long periods of time. For these and other reasons, it takes far too long to resolve even the simplest cases. This inefficiency is extremely costly to the economy and to society at large. (In fact, I would argue that the current system is so bad that it has the opposite effect that Tim suggested above: far from everyone knowing that they have to live up to their obligations, big players can push around little ones essentially at will, because they know that the slowness and high costs will deter anyone from actually attempting use the court system for redress.)

            In order to make a system of the type I am describing, the role of the “appellate” courts would be broader than it is today. It might be easier to get them to reconsider facts. Furthermore, to avoid the gross problems you outline, there would have to be standards that the private courts would operate under. They would be licensed and regulated by the government. The central point of this proposed system is that you can’t just go to the government first: you have to go to a private court and get them to handle the nuts-and-bolts part of the case.

  8. I have made some use of PACER to get documents for a friend who is in prison. For small amounts of use, it’s effectively free, though you have to give a credit card number, since they don’t bill you until you’ve accumulated a few dollars in charges. This avoids annoying fifty-cent charges.

    I don’t have a strong opinion either way on whether there should be a charge, I’m just noting this point.

  9. In deciding whether the government should provide a resource for “free”, one should consider whether the resource is scarce (has a non-trivial marginal cost) or plentiful (has essentially zero marginal cost). Information which exists in networked machine-readable form, and which may legally be distributed freely, is generally plentiful; the cost of providing a million people with access to a particular piece of information is often barely greater than the cost of providing ten. Note that active education about what the information means is more likely to be a scarce resource; one could freely publish information via which someone who wanted to take the time to study it could learn from it, but any sort of individual instruction is apt to have a substantial per-student marginal cost.