CA Chided for Shielding Court-Reporter Work

SACRAMENTO (CN) — Federal antitrust officials on Friday warned against a California bill in the making that would limit California courts' ability to outsource court reporting, saying the plan could increase court costs and jeopardize judicial integrity.

Assemblyman Scott Wilk, R-Santa Clarita, had asked for the Department of Justice Antitrust Division's views on a bill that would restrict state courts ability to hire nonunion, private contractors.

The Antitrust Division responded that the plan could "raise barriers" and limit courts' ability to cut costs, at consumers' expense.

"Consumers benefit when a competitive marketplace presents them with a wider variety of services," Antitrust Division Acting Assistant Attorney General Renata Hesse said in a statement.

"When analyzing legislation that could result in a ban or limitation of third-party court-reporting contracts, the California State Legislature should consider a company's ability to realize significant savings under a third-party court-reporting contract and pass savings on to its customers."

Wilk wrote to the Antitrust Division in July and asked for its stance on state laws restricting courts from signing employment contracts with third parties.

While California lawmakers have not introduced such a bill, Wilk's inquiry indicated that there could be one brewing in Sacramento.

Handcuffing courts from signing outside contracts has been tried before in California, most recently in 2013. Lawmakers passed a bill restricting courts' ability to outsource to contractors but it was vetoed by Democratic Gov. Jerry Brown.

That proposal, Assembly Bill 566, required courts to prove that outsourcing work to contractors would save money, along with other conditions. The bill was introduced by a Democratic lawmaker after Placer County fired its entire court reporting staff in favor of outside contractors. The state's labor unions and the California Court Reporter Association lobbied heavily for AB 566.

Brown, who historically has supported California labor groups, disappointed the unions and said the proposal "goes too far" and creates huge roadblocks for the courts. At the time, state budgets were hamstrung by the recession and Brown supported the courts' attempt to save money through outsourcing certain work.

Wilk's office would not confirm that he's working on a new bill but said a new court reporting bill is likely to be introduced in the Legislature.

"We were aware of legislation in California concerning court reporters and wondered if the Justice Department had any view on the issue of compliance in court reporting. The answer is what we expected, that we should always balance potential effects of legislation with the need to protect consumers," Wilk's chief of staff Curtis Raulinaitis said in an email.

The Court Reporter Association did not respond to an inquiry on whether it is involved in a new court reporting bill.

While it's unclear who is behind the push for California court reporting reform, it's apparent that antitrust officials don't like the proposal.

"The division has analyzed state legislation or regulation directed at a wide variety of industries," the Antitrust Division's Chief of Legal Policy Robert Potter wrote to Wilk on Friday. "A theme that emerges from this work is that sometimes regulation aimed at a laudable public policy goal (e.g. safety, health or prevention of fraud) instead can serve primarily to protect incumbents from competition, among other effects."

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