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Lexis Efiling Case Better for State Court

HOUSTON (CN) - In dismissing a federal claim against British publishing giant Reed Elsevier, a federal judge said he was "troubled" by a state court order forcing lawyers to file electronically through Reed Elsevier's American division Lexis Nexis, adding that the efile system and the accompanying fees imposed by the private publisher may not comply with Texas law.

Karen McPeters filed a class action against Reed Elsevier dba LexisNexis, Montgomery County, Judge Frederick Edwards and Montgomery County District Clerk Barbara Gladden-Adamick in April 2010, alleging that LexisNexis' charges violate her due process and equal protection rights.

She also claimed that the defendants violated the RICO Act by forming an "enterprise" to mandate the payment of LexisNexis' filing fees, and sending invoices for payment by mail and wire.

On Jan. 27, U.S. District Judge Keith Ellison dismissed the suit, declining to exercise supplemental jurisdiction over the state-law claims after finding that McPeters had failed to substantiate her federal claims. A related lawsuit filed last week in Texas state court remains pending.

Though Ellison seemed sympathetic to the state-law claims, he wrote that they should not stand alone in federal court.

"Although no federal statutory or constitutional claim is available in this case, the court is indeed troubled by certain aspects of the e-filing system at issue," Ellison wrote. "It is not clear that the e-filing system, and the accompanying fees, were properly adopted within the bounds of applicable Texas law."

Electronic filing systems and rules should be approved by the state Supreme Court under Texas government code, but the court to date has only approved the use of e-filing - not the fees, the ruling states.

LexisNexis charges $7 for filing fees, $8 in service charges for any document filed online, and at least $10.00 for providing a paper invoice.

McPeters had claimed that Montgomery County gets $1 from every filing and service charge LexisNexis processes.

"It is not clear that under [Texas law] the district clerk may delegate fee-setting authority to a private company," Ellison wrote. "It is also not clear that there is any limit to the rates LexisNexis could charge, subject only to Montgomery County ceasing to use LexisNexis' services.

"It is a bedrock principle of federal and state courts that they should be accessible to persons seeking remedies for their grievances," the ruling continues. "Charging litigants more than is necessary to subsidize the operation of the courts and other vital government functions is contradictory to the basic idea of access to courts.

"To give to a private company the authority to profit by setting rates and charging litigants for each court filing seriously endangers that principle and sets forth on a dangerous path," the ruling continues. "That is particularly so where it is not clear under state law that the district clerk has the power to delegate authority in such a way. Still, the right of access to courts is not absolute, and no federal remedy is available under the facts presented in this case. Plaintiffs claims under the constitution and laws of Texas may or may not have merit, but as no federal question remains in this case, they are properly decided by a state court."


The findings as to McPeters' state-law claims seem to bode well for the related lawsuit she filed in a San Antonio state court last week.

Ellison shot down McPeters' constitutional argument that the obligation to pay LexisNexis e-filing fees put an unfair burden on the right to open courts.

"The Supreme Court has held that the right of access to courts does not prohibit filing fees (even with no waiver for indigent litigants) where the lawsuit does not implicate a fundamental right other than access to courts," the ruling states (parentheses in original). "In this case, plaintiff does not allege the presence of any fundamental right other than access to courts. Notably, plaintiff cannot point to a single federal case that is even arguably analogous to her constitutional claims."

McPeters' claims stem from a 2003 order signed by Judge Frederick Edwards with Texas' 9th District Court in Montgomery County, which states that private litigants in his court must file records online through LexisNexis.

Ellison's order describes two options to file documents without paying LexisNexis, Ellison found. A litigant can either ask for leave of the court to file documents conventionally, or he can bring filings on a computer disk to a public computer in the district clerk's office and upload the pleadings at no charge.

McPeters had claimed she only became aware of these alternatives to e-filing on May 5, 2010, but Ellison wrote that McPeters attorney should have learned about them as early as Jan. 27, when the district clerk apparently sent him a copy of Edwards' order.

"Thus, even if Plaintiff did not in fact receive the order in January 2009, it appears to have been due to an error in the transmission from the clerk's office to plaintiff's counsel rather than a policy in which litigants were not informed of the alternatives to e-filing," Ellison wrote in his 22-page ruling.

Because there is evidence in the public record that McPeters and her counsel were notified about the alternatives to LexisNexis e-filing, McPeters "provides no authority to suggest that these factors are sufficient to trigger greater than rational review basis," Ellison wrote.

The ruling states that the county proved it had a rational basis to adopt the e-filing policies.

"The e-filing system may have been imposed, for example, in order to make court filings in Montgomery County more efficient," Ellison wrote. "The provision in the 2003 order that 'new divorce and annulment cases that are resolved within 90 days' need not be filed electronically may have been included, for example, because such cases are generally resolved more quickly than general civil cases, so e-filing would not increase their efficiency. Because there are conceivable rational bases for the challenged actions, and because plaintiff has not met her burden to negative them, plaintiff has not stated a claim under the U.S. Constitution."

Ellison also dismissed McPeters' claims that the defendants violated the RICO Act by forming an enterprise to engage in racketeering activity and to commit mail fraud.

McPeters' complaint, as quoted in Ellison's ruling, had claimed that, with "Judge Edwards as its head, Barbara Adamick and Montgomery County as enforcer, and LexisNexis as its collector, defendants are an association-in-fact using money derived from a pattern of racketeering activity to conduct the enterprise through a pattern of racketeering activity."

Ellison's ruling describes why McPeters' claims cannot stand.

"In this case, however, the allegations of predicate acts - based on defendants ordering, implementing, and administering the e-filing system - do not suggest the existence of an enterprise; rather, they suggest only that defendants each had a role in the underlying acts," Ellison wrote.

Ellison added that defendants' conduct does not meet the RICO act criteria of being an enterprise because their actions were not committed with a "common purpose."

"Plaintiff's complaint suggests that, for example, Judge Edwards' purpose in ordering e-filing was to encourage efficiency, while LexisNexis's purpose was to generate profits," the ruling states.

Ellison also found that McPeters had been reaching in claiming mail fraud under the RICO Act.

"Plaintiff's allegations attempt to transform her claim that defendants lack the authority to impose e-filing and the accompanying charges into a claim that defendants committed fraud," Ellison wrote.

Since McPeters has already filed two amended complaints without managing to state a federal claim, Ellison declined to let her amend her complaint a third time and dismissed the case without prejudice.

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