Please help me! How should PACER be funded?

For those of you, like me, who are huge supporters of PACER, the sister system CM/ECF, and the issue of transparency more generally, please read Brian Browdie’s great article entitled Why Pacer should (and should not) be like Edgar, Quartz (November 24, 2014).*  Transparency advocates want PACER access to be free. But there is a problem (nothing is “free”), and I want your help in addressing that problem.

First, you need to know the basics. Here they are:

* “Pacer holds records for roughly 43 million cases, according to the Administrative Office of the US Courts, which manages the database.”

* “In practice, Pacer’s fee structure means that three-quarters of people who use the database pay nothing.”

* “Pacer has about 1.6 million user accounts, but most of the 500 million requests the database receives annually come from law firms; commercial publishers such as Reed Elsevier, Bloomberg and Thomson Reuters; and the Department of Justice (DoJ). These and other power users accounted for about 70% of Pacer’s $146 million in revenue in the fiscal year that ended on Sept. 30, 2013, according to the Administrative Office.”

*  “As the chart[s] below shows, [the revenue is] used to cover outlays for the filing system, CM/ECF ($32.1 million); video monitors, audio and other electronica that courts need to stage trials in the 21st century ($31.5 million); and the telecommunications, broadband internet and security systems that allow access to 197 databases around the country but keep hackers at bay ($27.5 million).”

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pacer_fees

Second, what I would like to know from you is this: Assuming public access to these records is a public good that should come as close as possible to being “free” to the general public and perhaps academics, how would you propose that PACER be funded (a) assuming the federal judiciary must maintain roughly the same revenue stream from PACER that it receives now and (b) assuming that Congress will not fund PACER (or the judiciary’s related revenue stream) from appropriated funds?

 

Trust me–don’t quibble with the “a” and “b” assumptions built into the question. They are real life constraints.

I look forward to your answers while simultaneously wishing you a happy Thanksgiving.

RGK

*H/t How Appealing.

15 responses

  1. I think the model for PACER is less EDGAR than it is the US Patent Office’s PAIR (Patent Application Information Retrieval) service, which acts more PACER-like in that it is both an information retrieval and electronic filing and case management system.

    The USPTO manages to keep PACER free by covering their costs through relatively high filing fees for new applications. This is mitigated by a tiered cost structure, where people who make middle class incomes and don’t have a lot of patent applications under their belt pay substantially reduced fees. Wealthier / more prolific people and small businesses pay somewhat larger fees, and large corporations pay extremely large fees. The general formula is 25% fees for “micro” entities, 50% fees for “small” entities, and 100% fees for “large” entities.

    But those filing fees (and other fees throughout the patent process) cover the entire operating budget of the patent side of the USPTO, and allow the PAIR service to remain free to users and the public at large.

    While of course fair access to courts requires much more care in assessing filing fees, since indigent people cannot be barred from the courthouse doors when they wish to defend their rights, I think there is a way to work out a similar framework for the Federal courts.

  2. That should read “The USPTO manages to keep PAIR free” in the first sentence of the second paragraph.

  3. The district courts could act like the bankruptcy courts, which require parties to pay a filing fee for each document they file in the court instead of just the initial complaint filing fee. That way the general public could get free access and the court’s expenses are paid. As a litigant in the district court I would not be so excited about having to pay those fees, but it would probably also lower the amount of crazy motions the court has to deal with on a daily basis.

  4. One option for funding would be to improve PACER/ECF.

    Basic searching for cases/parties and access to documents should be free. Advanced services should be available at a charge that supports operation of the system – including docket monitoring, notifications, full-text search of filed documents, similar cases, searches across jurisdictions, early access to transcripts, etc.

    Coupled with a reasonable charge for the filing of each document – based on a reasonable estimate of the actual storage cost of the document being filed – and perhaps even a financial penalty for filing documents that must be OCRd or require human intervention to improve metadata (for instance, you choose the wrong filing type), it seems the revenue can still come from users who have an interest in maintaining and improving the system AND ensure free public access to records.

  5. John,

    Amen! I am a proponent of cloud storgage by a private vendor and Google would be my selection. The problem is, my friend, that Google, and private vendors more generally, scare the hell out of the powers.

    All the best.

    RGK

  6. I think that the fundamental innovation that made Google so stinking rich is that if you want to offer a service that is cheap (like a single web search or a single page of a legal document) for free, then it can be paid for by an advertisement.

    I’m not talking crazy here. I am willing to look at some advertisements to get legal documents for free, just like I do to get email for free, news for free, online games for free, and etc. I would even let the ad vendors “read” the documents I am reading to give me ads on the topic I am reading about. (The history of everything I personally have read is a little creepy, but if push came to shove I would probably still go along. Google seems to know just about everything about me and I continue to use their services.)

    Design a web-based system that makes it relatively easy to view single pages of the legal record (with ads.) Give the system permalinks so I can send you a link and you can read the same document I am reading — with ads of course. Make it difficult, however, to download copies of the documents. Offer a “premium” service that allows downloading and bulk downloading at the current PACER rates.

    The majority of PACER’s revenue comes from a few companies who want a large number of documents, and find the current fee structure acceptable. You could make your web interface just clunky enough that it would cost them more to extract bulk data from the free interface that it would to just buy it from the premium service. Alternatively journalists, pro se litigants, law students, and any one else with more time than money could get free access to the entire federal record — one page at a time.

  7. PACER, and indeed all optional government services, should be priced at marginal cost. The remainder of the funds to operate the judiciary system should come from general revenues derived from ordinary (progressive) taxation. I am too technologically ignorant to guess at what the marginal cost of viewing a page on PACER is, but I suspect that it is somewhere in the “microscopic fractions of a penny” range, i.e. not worth bothering with unless someone is an institutional downloader (i.e. Westlaw and Lexis).

    If it is, for whatever reason, necessary to make up this revenue through court fees, I would suggest Nick’s idea with a tweak: moving parties must pay a fee for all denied motions– and objecting parties must pay a fee for all objected-to, granted motions. (No one pays a fee for unopposed or joint motions. If a motion is granted in part, I would put simplicity ahead of perfect fairness and just split the fee down the middle.). You pay double if you request oral argument, receive it, and lose.

    Not only will this generally shrink the docket and hearing calendar, it will specifically encourage parties to resolve motions by agreement rather than wasting the court’s time haggling over minutiae.

  8. Dear Judge Kopf:

    Happy Thanksgiving! One is curious if you have an “in” with the AOUSC on these issues, or if you are asking independently.

    I have a number of thoughts on these questions, as a freelance journalist who pays attention to our courts, but many of them are more thoughts about the problem in general rather than direct answers. There is a lot of room for improvement in PACER in many ways that relate to costs, and I’ll try to hit some of them below.

    Right now, I think the best answer is to recognize that there is a large divide in PACER users. There are the $Biglaw users, for whom PACER is far cheaper than West and Lexis that they use anyhow, and the costs are in the noise. And then there are the rest of us, who get to decide whether reading this court case is really worth the cost of a movie ticket or a hardcover book, even though the court case is far less entertaining and probably far less good for our intellectual development.

    PACER already acknowledges this by offering $15 for free per quarter, but this is just not enough. It permits a truly casual user who wants a single document to get it, but it is not enough to permit a casual user to view an entire case of any reasonable substance. So I would advocate radically changing this divide.

    Given that a single case of interest can have several hundred docket entries that are might each be scores of pages, and a reasonable person might want to view at least one such case per month, that is (300 documents/case * 40 pages/document * 3 months/quarter * $.10/page) => $3600/quarter. That sounds like a lot, but that’s really what the fee waiver should be. But there’s a lot of room for compromise between $15 and $3600.

    So to evaluate this usefully, I think we need better data from the AOUSC: what’s the historgram of how much is paid by how many users per quarter.

    You offer the statistic that “In practice, Pacer’s fee structure means that three-quarters of people who use the database pay nothing.”
    I suspect this is because many of those are PACER accounts that have gone unused — someone has registered an account and does not use it. Perhaps they wanted to look at a case 4 years ago, but not today. A much better question is of those people who use PACER in a given month, how many pay anything? And again, it is much better to see the full histogram of this data, not some arbitrary threshold. Because any arbitrary threshold cannot be defended against accusations of cherrypicking.

    There is also a fundamental problem with PACER’s model of charging for information retrieval.
    There are a variety of services that offer public access to documents that others have downloaded from PACER and promote sharing and “crowdsourcing.” These include RECAP, Plainsite, PacerPRO, etc. If those services are working efficiently, i.e. if everybody used them,
    then PACER’s revenue structure would probably look a lot different.

    What if PACER costs came out of filing fees? How much would filing fees across the country have to increase (both in dollars and as a percentage) to cover the cost of PACER?

    You also mention that the funds from PACER fund a variety of good works that the Court System does, but that doesn’t justify this practice. Why is it alright to use revenue from PACER to fund other Court projects? As we’re reminded by Aaron Greenspan (Think Computer/Plainsite), who is suing the AOUSC over this, 28 U.S.C. § 1913 only permits prescribing reasonable fees “to the extent necessary…to promote public access to such information.” Just as it would not be OK to use PACER fees to fund a nice roof for a leaking courthouse (however critical such an expense may be), it is problematic for PACER fees to fund video monitors in courts. (It is also extra-problematic when those video monitors are used to, e.g., promote public access to trials in ways that cripplingly limited. PACER fees fund cameras that the District of Massachusetts uses to record prominent trials, like the Whitey Bulger trial or the Boston Marathon bomber cases, and those cases which have wide public interest are displayed in overflow rooms in the courthouse. But because of regulations adopted by the Judicial Conference, even with the permission of the defendants, recordings of that video cannot be publicly released. So PACER fees are used to fund a crippling of public access to justice when those cases could very well be accessible on the Internet to all. There is no statutory bar to this, merely a choice on the part of the AOUSC and/or the Judicial Conference; not even the local judges can choose.)

    Additional thoughts:

    . In far too many cases, PACER fees deter people from reading cases, and they deter open access. The result denies revenue to PACER — it’s just too expensive. So people skip documents and just don’t read them. This isn’t appreciably cheaper for PACER — the cost of document retrieval is a negligible part of the system costs. That means readers miss important details, hurting public information and public access.

    . Fee waivers—explicitly and by rule—exclude journalists: that hurts for freelancers and student journalists, and sometimes it hurts even bigger journalists and prevents them from reading material that they should read. Again, this is a national policy. Local clerks do not have the discretion to waive this aspect of the policy.

    . As a journalist, I am financially constrained and PACER’s charges make it hard for me to do my job.

    . The free PACER amount ($15/month) is not enough to reasonably view a large case. See above.

    . Some kinds of actions on PACER produce unpredictable charges:
    * Docket reports should be free. While I think they are capped at $3 each, that is still too much. And the system encourages people to go to laborious efforts to avoid running the docket report and incurring extra charges. Trying to keep track of what documents you have already seen and remembering docket numbers and dates, or taking notes on them. A substantial burden of use would be lifted if running docket reports was free (though if the charge was nominal — e.g. 10 cents to run an entire docket report, that would be a reasonable compromise.)

    * Searches should be free — billing based on how many search results thare are means you never know what you’re going to have to pay, which is fundamentally unfair. You should be able to search the name of a plaintiff, defendnat, or attorney, and pay a small fixed cost — again, ideally zero.

    . For those of us in metropolitan areas, it is often cheaper to take a cab to the courthouse and use the public terminal than it is to pay the PACER fees. This feels manifestly unfair. It means something is wrong with the system. I realize this may not apply in Nebraska, and I wouldn’t want to base the entire policy on this kind of illustrative case, but it is an indicator.

    . It should be possible, again, to access PACER from libraries (not just law libraries and circuit libraries, but also public libraries around the country), like the pilot that was killed when Aaron Swartz used it for mass downloading. It’s ridiculous that I can go to a federal courthouse or library and view a single court’s PACER documents for free, but I can’t view other courts’, because of a policy-based restriction. The pilot program should be restored and expanded to include any municipal public library in any city or town that wants to participate.

    . In Boston, if I go to the John Joseph Moakley Courthouse, the First Circuit has a beautiful library on the 9th floor with very comfortable chairs, a lovely view, and it is a wonderful and quiet place to get some work done, with plenty of space. It also has 10 or 20 computers for public use with Internet access. But none of them have free access to PACER. If I want to view a First Circuit case, I have to go down to the second floor and use the one terminal in a spare little cubicle with harsh lighting and a hard seat. And if I want to view the case below, from the District of Massachusetts, I have to go across the building to another set of terminals (this time there are two!), and use them. This makes little sense — it should be possible to access all PACER courts from the nice computers in the pleasant library (and it especially should be the case that the First Circuit library can access all PACER instances in the district courts underneath it.)

    Thanks for the opportunity to speak.

  9. Dear John,

    You wrote “One is curious if you have an ‘in’ with the AOUSC on these issues, or if you are asking independently.” The answer is a big “NO” with the AO. I am asking for myself.

    You point out many real problems with PACER. I agree with most everything you have written.

    I think it critically important to my jihad on transparency that PACER become free or almost free to the general public. While I understand your point about the “profits” being used for other things, the cash strapped federal courts are not likely to adopt a “free” PACER system without obtaining a comparable substitute income stream.

    Here is an idea: We could increase all civil filing fees substantially but with differing amounts for differing plaintiffs. For example, in Australia there is a tiered system (1) for commencing an action: (a) publicly listed companies pay $4,980 (AUS dollars); (b) profit-making but non-publicly listed corporations (or associations), $3,332 (AUS dollars); (c) and most other plaintiffs pay $1,140; (2) there are other fees for a variety of things that are tiered as well. (As I write this, one Australian Dollar equals 0.85 US Dollar).

    Our present filing fees are way below Australia’s. For example, for 2014,the filing in the district courts was $400. There were roughly 225,000 private civil cases commenced in the federal district courts in 2012-2013 exclusive of bankruptcy cases.

    In short, there is: ample room for substantially increasing filing fees, an opportunity to place the burden primarily upon private civil litigants who have the ability to pay, an opportunity to make PACER “free” or almost so for the public, and a method for replacing the judiciary’s lost income stream from PACER charges by substantially increasing filing fees for private civil litigants. I would favor such an approach.

    Let me clear. I have been very simplistic. There would problems with such an approach. (Think of data brokers for example.) But, as my not so dear mother used to say, “where there is a will there is a way.”

    Thanks for your extensive and thoughtful engagement. All the best.

    RGK

  10. Indeed your numbers are telling.
    Just to do the math, dividing up the $146 million:

    With 375,870 district court cases filed in 2013, that’s $388 per case.
    And just with civil: with 284,604 in 2013, that’s $513 per case.

    Either way that’s basically doubling the $400 filing fee. That’s probably not acceptable.
    But perhaps raising filing fees by $50 or $100 could be a component of finding funding.

  11. John,

    Perhaps you are right. And, you do have to consider whether increased filing fees would decrease volume and hence income. That said, I like the Australian method of using progressive filing fees based upon the ability to pay. All the best.

    RGK

  12. Thinking out loud again, this does make me wonder:
    What keeps PACER costs in check? What incentive does the AOUSC have to use our money wisely? It seems hard to imagine that it should cost $400 to house the electronic dockets of the average case.

    I have heard a lot of complaints from PACER-change advocates that CM/ECF is inefficiently run and that the whole system could be easily rpelaced with a better design, etc., etc., and generally speaking I am a bit skeptical of those claims. (I’m skeptical because I think they come from people who don’t have much experience with the CM/ECF side of the system, vs. just the PACER document retrieval side. And also because I’m not sure that conversion to a centralized model instead of “small” servers run by each Court is necessarily a better model.)

    But it does seem, from the per-case cost, that probably this could be done much cheaper.

    So maybe the remedy is to ask the AOUSC to publish its CM/ECF costs in much finer grain (what’s in that $32.1M, anyhow?), to encourage them to trim the fat a bit (if there is any).

    A little part me is scared to ask how much it cost to fix this year’s self-brought-on PACER “emergency” where older court records from several circuits disappeared from PACER because of the incompatibilities between CM/ECF Nextgen’s longer usernames and the older case file format, or whatever.

    For that matter, what are the costs associated with CM/ECF Nextgen? Presumably there was some substantial capital outlay on this?

    Of course, $32.1M/284,604 => $113, and that’s starting to sound reasonable, at least by comparison.

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