The Public Record v. The Money

Follow the money. The lesson keeps coming back home in the battles over access to court records.

Let’s start by looking at the positive side of that fundamental force. In San Francisco Superior, Clerk Michael Yuen is informally described as a former “bean counter” at City Hall where he was a financial analyst. He made the decision years ago to pay a mere $342,000 for an e-filing system.

“We own the EFM,” said one official at the court recently, referring to an e-filing system’s engine: the electronic file manager. It receives an e-filed document automatically and sends it into a clerk intake queue or straight into the docket.

Compare that with the amount paid by the state of Texas to rent its EFM --- $19 million per year.

With any software, including our own software which was developed in-house, things change. The software must evolve to meet competition and internal growth, as well as changes in code language.

A court can either hire its own IT staff to steer that evolution, as San Francisco has done, or depend on the software landlord, a perilous financial position.

So while SF Superior owns its e-file manager in perpetuity, Texas is just renting it from homeboy corporation Tyler Technologies, based outside Dallas. The rental contracts typically run five years with an option to extend.

Is there any chance that the state will switch vendors once the one has been locked into the state’s e-filing system for, in that case, nearly ten years. As other software companies gamely bid for the 2022 Texas e-filing contract, we considered the outcome a foregone conclusion.

No surprise, Texas awarded the new contract to homeboy. But they are keeping it secret for now. So the public does not know how much rent the state will have to pay next year and in years forward.

But if a state court administration is unwise financially, as is often the case, that would be no different than a slew of state agencies. California’s auditor continues to skewer various California agencies over their profligacy with public funds.

But it’s different with the courts. When court administrators get taken to the cleaners, it is not only that public money is wasted, it is that the courts control something that other state agencies do not --- the public record. And they begin to cast a covetous eye on an asset just waiting to be taken advantage of.

So along the e-file road in Texas, the court administrative office walked arm in arm with Tyler, as the one cleaned the other’s pocket. But a funny thing happened in 2018, the rent went down!

It went from $19.46 million the year before to $18 million. Why?

The extension contract signed in 2018 gives the answer. The corporation --- itself valued at $13 billion --- in effect paid about $1.5 million for the right to exploit the court record. The very next year, the rent went back up to more than it had been before the hiatus, at $19.6 million, and the right to exploit the record was now part of the ongoing and locked-in deal.

The deal is bald-faced and simple. Local courts keep copy fees from a statewide database of court records --- so they like the discretionary money --- and Tyler keeps all fees related to searches of the record, opening a new market for the giant public contractor.

Like any quasi-and-ill-conceived match between a state agency and a powerful corporation to exploit a public asset, both parties have bared their teeth at a press request to see the record before it is controlled by their joint enterprise.

The administrative office has “consulted” with Tyler to conclude that should the press be given access on-receipt --- upon filing, as they did traditionally with paper and as required by the First Amendment --- then Tyler would simply have to whack the courts for another $200k, per year.

So does the First Amendment bow to an access-control-and-profit deal between the state and a private entity. We are going to find out.

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