Taxpayers Foot $125-Million Bill For Federal Judges' "Unlawful" Conduct

Refunds Ordered—the Judiciary Overcharged For Public Documents On Its PACER System & Improperly Funded Programs With the Revenue

A federal courtroom in Chattanooga, Tennessee; the federal judiciary now admits it “unlawfully” spent money upgrading courtrooms across the United States (Carol M. Highsmith, Rawpixel, CC0 1.0 DEED).

The federal judiciary repeatedly set the price it charges for case records above the maximum it was allowed to charge then “unlawfully” spent the revenue on statutorily unauthorized programs, according to a $125-million class-action settlement approved by the federal trial court in Washington, D.C. The judiciary’s “unlawful expenditures” included “courtroom technology upgrades.”

As happens whenever the government loses or settles a civil case, taxpayers will ultimately foot the bill. And the settlement comes too late for one dead luminary.

The case, National Veterans Legal Services Program, et al. v. United States (free link here), dealt with the federal judiciary’s fees to download documents from the its online docketing system. That system is called PACER, short for Public Access to Court Electronic Records.

A hundred million dollars, eighty percent of the settlement, will go to PACER refunds. The remaining $25 million will be paid in attorneys’ fees and litigation costs.

The beginning of the court’s opinion entering judgment in National Veterans Legal Services, et al. v. United States (public domain)

The $125-million settlement will be taken from the U.S. Treasury’s Judgment Fund, i.e. the tax money the government sets aside to pay legal claims. (According to the U.S. Treasury, the Judgment Fund is “a permanent, indefinite appropriation available to pay final money judgments and awards against the United States.”)

PACER is the official repository of America’s federal trial and appellate case law, i.e. the precedents and other rulings, short of the Supreme Court, that interpret the Constitution and federal laws and control future cases. PACER also contains the legal pleadings filed by the parties in those federal cases.

Court decisions are quintessentially in the public domain, i.e. they are ineligible for copyright protection. The vast majority of parties’ legal pleadings are not copyrighted, and, regardless, the public has a “fair use” privilege to read them. Nevertheless, the federal judiciary has always charged for PACER and has always faced criticism for those charges.

“PACER fees have been controversial since at least 2008,” the court explained. “That year, a group of activists attempted to download significant portions of the court documents available on PACER and make them available for free.”

One of those activists was Aaron Swartz.

Swartz was widely regarded as a child prodigy. As a teenager, he coauthored the widely used R.S.S. web standard and co-founded the Creative Commons. As a young man, he co-founded Demand Progress.

Always civically minded, Swartz took exception to the pay walling of the public domain. PACER was perhaps his first such concern.

The court noted that activists like Swartz, “along with scholars and public officials, argued that PACER fees make it difficult for the public to access information integral to understanding our country’s law and legal system.”

Aaron Swartz in December 2008 (cropped from original image by Fred Benenson, Flickr, CC BY 2.0 DEED)

“The law is the operating system of our democracy,” said noted technology publisher Tim O’Reilly. “And you have to pay to see it? That’s not much of a democracy.”

“PACER is just this incredible abomination of government service,” noted award-winning public-domain advocate Carl Malamud circa 2014. “It’s ten cents a page. It’s this most brain-dead code you’ve ever seen. You can’t [full-text] search it. You can’t bookmark anything. You gotta have a credit card. And these are public records.” (Starting in 2001, the judiciary waived PACER fees for accounts with balances under $10 per calendar year, roughly equal to 142 pages at the rate then in effect. PACER’s waivers have increased over the years. Each accountholder is now allowed 200 free pages per calendar quarter. Upon downloading 201 pages, however, an accountholder is charged for all 201 pages, including the first 200.)

The “U.S. district courts,” whose records are on PACER, “are very important,” emphasized Malamud. They are “where a lot of our seminal litigation starts: you know, civil-rights cases, patent cases, all sorts of stuff, and journalists and students and citizens and lawyers all need access to PACER, and it fights them, every step of the way. People without means can’t see the law as readily as people that have that gold American Express card. It’s a poll tax on access to justice.”

“The law is the operating system of our democracy, and you have to pay to see it? That’s not much of a democracy.” –Tim O’Reilly, founder of O’Reilly Media Inc.

As years went by, PACER’s bottom line increased. “By the end of 2006,” the court noted, “the judiciary had accumulated $32.2 million of excess revenue from PACER fees.”

Those profits were “illegal,” noted Stephen Schultze, former fellow at the Berkman Klein Center for Internet & Society. “The E-government Act of 2002 states that the courts may charge ‘only to the extent necessary’ in order to reimburse the costs of running PACER.”

The judiciary nevertheless kept increasing its PACER fees and net income. “From the beginning of fiscal year 2010 to the end of fiscal year 2016,” the court found, “the judiciary collected more than $920 million in PACER fees; the total amount collected annually increased from about $102.5 million in 2010 to $146.4 million in 2016.”

“It’s a poll tax on access to justice.” –Carl Malamud, winner of the Internet Archive’s 2022 Hero Award

Schultze approached Swartz about performing what Schultze later called “an intervention on the PACER problem.”

By that time, “The PACER people were getting a lot of flack from Congress and others about public access,” remembered Malamud, “and so they put together this [pilot] system in seventeen libraries across the country [where] there was free PACER access.”

“That’s one library every twenty-two thousand square miles,” Malamud recalled. “So it wasn’t, like, really convenient.”

But they were enough for Swartz. He enhanced a program Schultze had written to download PACER documents en masse from the free PACER libraries. Swartz quickly got 760 gigabytes, or about 20 million pages. Then the F.B.I. started staking out Swartz’s parents’ house.

The feds never charged Swartz for the PACER downloads, which he used to help seed the Free Law Project’s RECAP archive.

“Twenty million pages had perhaps exceeded the expectations of the people running the [PACER] pilot-access project,” said Malamud, “but surprising a bureaucrat isn’t illegal.”

The downloads nevertheless put Swartz on the Justice Department’s and judiciary’s radars and started his F.B.I. file.

Years later, Swartz took on a similar project, mass-downloading publicly funded scientific research from a paywalled library named JSTOR. The feds indicted Swartz on 22 felony counts and took express exception to a document he wrote called The Guerilla Open Access Manifesto. “Information is power,” it began. “But like all power, there are those who want to keep it for themselves.”

Facing a 35-year federal-prison sentence and years of court-imposed Internet restrictions, in January 2013 Swartz hanged himself.

A decade later, the new PACER settlement largely vindicates Swartz. The courts now write that their own PACER fees and resultant expenditures had always been “unlawful.”

According to the district court, a first round of reimbursements, up to $350 each, will be sent to “the hundreds of thousands of persons or entities who paid PACER fees between April 21, 2010 and May 31, 2018.” Any remaining funds will then be dispersed to the PACER accountholders who were charged more than $350 during that time, in proportion to the PACER fees each paid.

The court also wrote that PACER accountholders need not request the refunds: “The claims administrator will use the information provided to them[sic] by the government—which has comprehensive records of PACER registrants and the fees they paid—to identify class members and distribute their payments.” Thus, “There are no claims to process, and class members will receive the relief even if they have never contacted Class Counsel or the claims administrator.” (The judgment does not specify how the claims administrator will locate accountholders who, e.g., changed their addresses and bank accounts since last using PACER. Such accountholders may wish to contact the claims administrator after all.)

But will those who receive the refunds know about Swartz’s role promoting free public access to the law of the land, and the price that he paid for it?