Business-killing cuts to state court systems

Last May, Alabama’s state lawmakers approved a significant increase to civil case filing fees. For disputes involving more than $50,000, the fee increased 15 percent; in cases involving smaller amounts, the fee has jumped by 25 percent. The measure was supported by wide majorities in both the house and senate. Democratic State Senator William Beasley was among them. “The fee system is a good mechanism to fund the court system because, that way, the people who are using the court system are paying the fees,” he told Remapping Debate.

But some question the wisdom of this strategy. “The higher the filing fees are, the more costs that are shifted from the judicial branch to the actual litigants almost to the point of it becoming a ‘you-use-it, you-pay-for-it’ scenario,” said Dunn, the head of the California Bar Association. “As states have moved away from taxpayer support of the judiciary to fee-based revenue support, you are pricing the judicial system out of reach of many startup companies and smaller companies.”

So how much additional delay is there?

California has seen the country’s steepest cuts in its state court funding, in dollar terms: over $300 million in fiscal year 2011-2012 alone. If planned cuts for the upcoming fiscal year go through, another $544 million would be stripped from the state judiciary. The effects of these cuts are being felt throughout the state.

According to Michael Burke, a defendent-side civil litigator in San Francisco, “It used to be you could get [a motion hearing] within the normal notice period, usually 21 days. You could just call up and get a date,” Burke said. But now, “It could be two or three months.”

John Kithas, a San Francisco attorney, who has been in civil practice for almost 40 years, currently has a case that’s stuck in the earliest phases, even though it was filed nine months ago. While charging that some delays are due to stalling by his adversaries, Kithas was certain that budget reductions were part of the problem. “It’s been almost a year and we haven’t learned anything” he said incredulously. In the past, he asserted, he would be at this same phase in litigation after only a month or two. “In this case we’re out there for [nearly] a year, we have almost no discovery turned over to us,” he said. “We’re probably looking at another year before trial.”

Burke said there are many steps along the way where a case can get held up thanks to fewer courthouse resources. “There are all sorts of things throughout litigation that the court has to sign off on. It could be a ruling on a motion. It could be approving a settlement,” he explained. “There’s no end to what the court needs to approve by way of order or ruling during the process of litigation,” he said. And the delay caused by the cuts “just bogs everything down.”

In fiscal year 2011-2012, Alabama’s legislature shrunk its court funds by almost 9 percent, the largest percentage cut of any state that year.

In that year, Sue Bell Cobb, the state’s chief justice, who acts as the administrative head of the judiciary, ordered courthouses to close on Fridays. And needing to cut still more, she reduced by half the number of weeks that jury trials (“jury weeks”) were available to civil litigants. By mid-2012, budget cuts had led to clerk staff being thinned in the majority of Alabama’s courthouses.

“In the civil setting they did away with most law clerks and courtroom deputies,” recounted Lee Benton, a business attorney in Birmingham. “That means a judge gets a brief from both sides but he’s having to do all his research personally. It dumps a much heavier caseload on a judge, and that delays him in issuing a decision.”

According to G. Bartley Loftin III, a Madison County, Alabama, lawyer, who focuses primarily on commercial litigation, “When you have a client come in and say, ‘We have this situation how long is it going to take?’ and when you say, ‘18 to 24 months,’” he explained, “a lot of them are shocked at the time it may take.” Loftin has observed this slowdown increasing as court budgets shrink. “There’s a direct link to underfunding,” he said.

“Businesses are already in a fragile position these days,” Benton said. “If you’re already on the banana peel, [litigation delay] just pushes you over the edge.”