Federal court leaders to pay $125M for overcharging for online records

The federal judiciary has agreed to pay $125 million to reimburse hundreds of thousands of users of the nationwide online records system as part of a proposed settlement made public Tuesday in a long-running lawsuit aimed at reducing the cost to access court records.

Three not-for-profits accused the judiciary in 2016 of overcharging to review and download records through the service known as PACER, an acronym for Public Access to Court Electronic Records. The agreement, which must be approved by a federal judge in Washington, mainly would refund up to $350 for fees paid between April 2010 and May 2018. Users who paid more during that period would receive an additional share of the remaining funds.

The settlement does not eliminate charges for using PACER. But advocates for court transparency say the unusual case has put pressure on the judiciary to overhaul the system and prompted Congress to act.

“When we filed this case, it was unthinkable that we could bring a class action lawsuit against the federal judiciary—in the federal judiciary—and end up getting 100 cents on the dollar in refunds for the average PACER user,” Deepak Gupta, the lead attorney for the three not-for-profit groups behind the lawsuit, said in an email. “This settlement has already struck an important blow for transparency going forward.”

The National Veterans Legal Services Program, National Consumer Law Center and Alliance for Justice claimed that the dime-per-page fee unlawfully exceeded the cost of running the system. The proposed settlement is estimated to refund more than 400,000 class members, a group that includes individual users, companies, academics and media organizations.

A federal appeals court in 2020 upheld a lower court finding that the current 10 cents per page charge is “higher than necessary to operate the system” and the court limited fees to the amount needed to cover the cost of providing access online. The Administrative Office of the U.S. Courts will spend an estimated $64 million to run its court records system this year, according to the Congressional Budget Office.

The cost of storing data has declined since the electronic repository was created in the 1980s, while PACER fees have increased. The litigation showed that the administrative office previously used PACER fees to fund some unrelated projects, including for flat-screen TVs for jurors and to send notices to bankruptcy creditors.

In a statement Tuesday, the administrative office said it is “pleased this matter has been resolved” and “taking steps to modernize the system for the benefit of the courts, litigants, and the public who seek to access court records via PACER.”

The judiciary does not charge users to read court opinions and there are waivers for some users to review other documents. While the lawsuit was pending, the judiciary eliminated fees for about 75 percent of users and doubled the quarterly fee waiver to $30, according to court records.

Lawmakers in the House passed a bipartisan bill to ensure free public access to PACER and a similar proposal passed the Senate Judiciary Committee last year.

Rep. Hank Johnson (D-Ga.), the lead sponsor of the House bill, said the lawsuit “laid bare how the judiciary had been unlawfully using PACER fees to create a slush fund that evaded Congressional oversight, impaired the public’s First Amendment right of access to the courts, and ultimately put taxpayers on the hook.” Even so, he added in a statement, Congress should pass legislation to “make federal court records freely available to the public once and for all.”

Federal judiciary leaders in March separately endorsed a proposal to make PACER searches free for “non-commercial users of any future new modernized” system. To update PACER, court leaders have appointed an advisory group with members from the legal profession, government workforce, media and academia to help develop a more user-friendly system.

After the case was returned to District Court, the not-for-profits and the Justice Department negotiated the agreement through a mediator for the government to pay $125 million for overcharges related to PACER use during the eight-year period.

In their filing of the proposed settlement Tuesday, the not-for-profit groups emphasized the impact of the high fees, which they said “hinder equal access to justice, impose often insuperable barriers for low-income and pro se litigants, discourage academic research and journalism, and thereby inhibit public understanding of the courts.”