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San Mateo court agrees to stop collecting debt from unpaid fees in light of lawsuit

The agreement comes as legal aid groups filed an amended complaint against the Judicial Council of California for "perpetuating an unconstitutional scheme to fund the California courts through massive late fees."

(CN) — The San Mateo County Superior Court has agreed to stop collecting $30 million in unpaid fines and fees for the next six months in the face of a lawsuit accusing it of charging a “hidden tax” on California's poorest residents.

San Mateo County will also stop collecting debt on the court’s behalf.

“The $30 million in temporary debt relief we have secured today for thousands of low-income Californians is just the first step in undoing the damage that civil assessments have caused to Black and brown communities and other justice-impacted groups who have been disproportionately burdened by the criminal legal system,” said Brandon Green, director of the ACLU of Northern California’s Racial and Economic Justice Program, in a statement.

The deal announced Wednesday morning comes just as legal aid groups filed an amended complaint against the California Judicial Council, accusing the policy-making body for the courts of incentivizing and encouraging courts to impose civil assessments for unpaid traffic tickets and missed response deadlines, and to collect on delinquent debt from those fees.

The lawsuit describes the fee as a “hidden tax” the court automatically uses as a form of punishing people who miss the deadline to respond or pay their traffic tickets or other citations for minor infractions. A few years ago, the Legislature decided to use civil assessment fines instead of bench warrants to get people to show up to court.

It also helps fund the courts — as revenue from civil assessments are placed in the Trial Court Trust Fund, a pot of money from which operating dollars are allocated to the courts by the Judicial Council.

The legal aid groups updated their lawsuit to add the Judicial Council and its top administrator as defendants. It now says that in 2005, the Judicial Council began sending a “direct incentive payment” back to every court table to collect enough civil assessment fees beyond what they are required to contribute to the Trial Court Trust Fund.

“That is, whatever additional sums the trial courts can impose and collect, the Judicial Council sends as an incentive payment— on a dollar-for-dollar basis,” the amended complaint says, adding that under this arrangement the San Mateo Superior Court has raised more than $9 million in the last three years and kept $3.4 million for itself.

"Given these financial incentives, it is no wonder that San Mateo Superior Court has charged a $300 civil assessment in at least 83,592 cases over the last three years,” the complaint says, noting the reimbursements encourage courts to be as aggressive as possible on debt collection.

That will likely end as the state Senate and Governor Gavin Newsom are pledging $100 million in this year’s budget to backfill the lost revenue to the courts.

Attorney Zal Shroff, who also represents debt-holders and the nonprofit Debt Collective in the case, said the Judicial Council’s agreement not to fight the lawsuit and pause litigation until October is a signal that it expects the governor to make good on his commitment.

“This indicates to us that the court system is not interested in defending these fees and is only in the position of having to because they don't have the funding they need,” said Shroff, a senior racial justice attorney at the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area. “We think they see the writing on the wall. We would expect and hope for them to relieve everyone of their debt. If not, we intend to pursue this litigation. They — and we — hope it doesn't come to that.”

Shroff said the state should be properly funding the courts with its unprecedented $97.5 billion surplus.

“They could forgive everyone's debt with $100 million a year. That's a drop in the bucket compared to the surplus,” he said. “Why draw from a stone when you have this ridiculous pot of money?”

A representative for the San Mateo County Superior Court said it would not comment on the plaintiffs' statements about the case or on the status of the litigation.

"The council is grateful for the efforts of both the Governor’s administration and the Legislature to reform the system and provide necessary backfill funding for the judicial branch," a spokesperson for the Judicial Council said Wednesday.

Chief Justice Tani Cantil-Sakauye, who chairs the Judicial Council, has pushed for years for the state to move away from fines and fees as a funding source for the courts.

"[A]ll of us worry that the judicial branch may be becoming a user-fee institution. And all of us are concerned that the high fines and higher penalties are falling on those least able to afford it," Cantil-Sakauye said in a speech to lawmakers in 2013.

She addressed the Legislature again in 2016, warning that the the system of fines and fees "has morphed from a system of accountability to a system that raises revenue for essential government services."

Cantil-Sakauye said that more than 60 percent of the $1.7 billion raised by finds and fees goes to fund state and local services, with the rest going to the courts.

"This is an inequity when we have taken a fines, fees, and assessment accountability system and turned it into a revenue-generating system for government services," she said.

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