SACRAMENTO, Calif. (CN) — Seeking to curb exorbitant credit card fees charged by court filing managers, California Gov. Jerry Brown approved a bill Thursday that creates new electronic filing guidelines for state courts.
The proposal caps convenience fees that private companies, hired by the courts to operate e-filing systems, often pass on to consumers who pay with a credit card. Assembly Bill 2244 also requires e-filing gatekeepers and managers to offer alternative forms of payment to filers and document their e-filing expenses to prove they aren't overcharging for credit card servicing fees.
"The bill would require an agent of the court to report its costs in providing for payment by credit or debit card, or electronic funds transfer, as specified and would require the agent to provide the Judicial Council, or its authorized representative, with access to examine the records and documents of the agency for purposes of verifying report accuracy and compliance with certain requirements," the bill states.
The proposal was introduced in February by the Coalition for Improving Court Access, a group of 18 attorney service or e-file service companies. The coalition, led by Sacramento lobbyist Mike Belote, negotiated with the Judicial Council and courted Assemblyman Mike Gatto, D-Los Angeles, to carry the bill.
While AB 2244 was amended three times in order to gain the Judicial Council's full support, it breezed through the Legislature and was unanimously approved in August by the Assembly.
The bill aims to regulate California courts' gradual transition to e-filing and create an even playing field for runners and litigants that are required to file with the court-specified e-file manager.
For years e-file managers like Texas-based Tyler Technologies and others have held lucrative million-dollar contracts with some of California's largest courts.
Tyler has provider contracts with nearly half of California's 58 superior courts and it typically limits e-filers to pay with credit card only. It charges a convenience fee ranging from 2.75 percent to 3.5 percent on all credit payments and the unchecked fees resulted in considerable profit.
There is plenty of opportunity for the e-file managers to rake in convenience fees in the Golden State; according to state data, 7.5 million cases were filed in fiscal year 2013-2014 in California state courts.
In addition, more than a dozen California courts require some form of mandatory e-filing and the Judicial Council has also moved to check the gatekeepers' power. The council adopted a policy in June saying California courts can contract with more than one e-file manager, which would lessen the single gatekeeper's stranglehold.
Gatto said his bill offers consumer protections and creates important statewide e-filing guidelines for California's massive court system.
"Long term, there may be multiple electronic filing managers and many electronic filing service providers and the law should be clear and uniform for all," Gatto said in a July email. "California is unique in part that it so big and populated, so it is important to create consistency throughout the state."
Follow @@NickCahill_5
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
Contributor-Test-Post-2024-04-12 April 12, 2024 -
