1 April 9, 2008 SENATOR MACHADO: Next item, court reporting. The LAO has a proposal for that. THE LAO: On another option we wanted to present to the legislature is that the legislature might direct California courtrooms, about 20 percent of California courtrooms, annually to begin transitioning to an electronic court reporting system. We estimate that in 2008/09 even accounting for the one time costs that would be required related to the equipment that would be purchased, there could be as much as 13 million in savings. And upon full roll-out to all California courtrooms there would be a reduction in costs of about a 111 million. Most of these, the savings would be related to a reduction in spending on transcripts and salaries for traditional court reporters. In 2006/07 we paid $26 million for transcripts and $202 million for salaries for court reporters. Court reporting has been proven effective in California. And in a pilot study carried out in the early '90s, it was found that there are significant savings possible in courtrooms that have electronic court reporting. Our estimates are based on this study from the early '90s. And we believe also that our estimates -- the amount of savings we estimated is 2 conservative as some of the newer technology that's been implemented in other courts has resulted in even higher level of savings. Specifically, the Ninth Circuit Court in Florida found that they were able to reduce their costs 86 percent with the use of electronic court reporting. Another benefit of electronic court reporting is that there is currently -- the Judicial Branch has identified a short-fall in the supply of court reporters. When a court reporter isn't available, it can lead to a delay in a proceeding. And we found our analysis is showing that electronic court reporting would help us address the short-fall because electronic court reporting monitors are easier to train and higher than the standard court stenographer is. And in some cases depending on the technology, there's no need for a court reporter to be present at all. SENATOR MACHADO: Thank you. Comments from the Courts? MR. VICKERY: Thank you. This is something at least since the time I arrived here in California seems to have been part of a -- if not an annual, at least a semi-annual debate. UNKNOWN: I can remember hearing this 14 years ago when I first got here. 3 MR. VICKERY: And if you decide to look at this, I guess I would offer two thoughts: One, I think the progress of technology has not moved as fast as many people have speculated in the past to improving other alternative means. And on the other hand, realtime reporting has improved significantly and has been a major asset to the justice system. So I think if we do move ahead, I would urge that the felony trial matters be excluded from that discussion before making radical changes in the system. But on the other hand, the examination of the whether the State owns the transcript or the reporter owns the transcript is something that's been debated in other states. And if the state owns it, then you have to pay the reporter to prepare it on State time. But there probably is some savings there. And I think that's a different policy issue than the policy decision to eliminate court reporting in total from the Court system. SENATOR MACHADO: Could you implement a 20 percent conversion eliminating the criminal courts? MR. VICKERY: If we excluded the criminal courts in the process? So -- Ron, why don't you go ahead and speak up on that issue? MR. OVERHOLT: Well, essentially all that the 4 Courts are responsible to pay for are court reporters and transcripts in criminal matters and juvenile matters. There's been a series of statutes developed over the years that implemented fees that pay the salary of civil court reporters. The parties pay for their own transcripts in civil matters, and so implementing ER is not going to result in -- SENATOR MACHADO: -- is there a full recovery now at the civil courts? MR. OVERHOLT: Yes. MR. VICKERY: Family. MR. OVERHOLT: That's right, domestic violence. SENATOR MACHADO: So -- MR. VICKERY: Family courts generally are not collecting it. MR. OVERHOLT: Generally in family law there's not a request for transcripts. SENATOR MACHADO: You're saying you don't want to use electronic in criminal. Is that what I heard? MR. VICKERY: Use it at misdemeanor level, juvenile, family -- we have to go back and give you the savings number on that, and then you could look at the ownership of the transcript issue. SENATOR MACHADO: Is that the only area where you see efficiencies here? MR. VICKERY: It is at the moment. I'm saying 5 I think if we're going to make the transition, we ought to start in those other areas and get experience with it. The ability to have the realtime transcript that is prepared in a hundred percent of the cases in the felony matters is a significant benefit. SENATOR MACHADO: In some ways it seems it also has the same significance in juvenile and in family dependency cases. MR. VICKERY: Well, first of all, there's a much smaller number of appeals out of those in terms of getting those transcripts prepared from the audiotapes and other things. It's not the issues are less important, but you're not having a transcript prepared in a hundred percent of the cases as you are in felony matters. SENATOR MACHADO: Can you explain why electronic is not realtime? Why electronic is not realtime? MR. VICKERY: The electronic recording is a -- regardless of what means you use to make it -- is still an audio recording that then needs to be subsequently transcribed. Realtime reporting for the court reporters that have both the equipment and that skill gives you a draft of a transcript instantaneously. And I think it's 6 one of the things that I think has assisted in improving the speed of getting transcripts done, for instance, after capital cases are completed and a variety of things. So you actually have a written record at the end of each day. SENATOR MACHADO: Any familiarity with the challenges that the states that have adopted this faced with respect to that issue? MR. VICKERY: There are other states that have both effectively implemented audio recording, and one at least that -- I don't know what it's currently doing today -- that have implemented audio video recording and used it even on appeal. I think they're the only state that ever use it on appeal as the real record. Every other state on appeal uses a written transcript prepared from the audiotape. SENATOR MACHADO: LAO on this discussion? THE LAO: With regards to the transcript being available immediately, the pilot study found that the electronic recordings are available immediately afterwards. And it would poll some of the users of the audio recording as their preferences relative to the traditional transcript. And it found that most people who use them are amenable to relying on the audio recordings. MR. VICKERY: Just to you clarify, I think 7 that is an accurate statement, but that relates to civil matters. And it relates to the accessibility by the lawyers to walk out with a CD at the end of the day to be able to go back and prepare for their cross-examination the next day and listen to that. But that's a very different issue than having a written record for appeal. As I indicated, I think there was only one state that has used an electronic alternative to a written record of the proceeding for the appellate process. That's why in our state where we have a hundred percent of the felony matters appealed, there's a -- SENATOR MACHADO: Do criminal courts get impeded by the demand for court reporters in civil cases and family dependency and juvenile cases? MR. VICKERY: In terms of the -- SENATOR MACHADO: Not enough reporters court reporters to go around? MR. VICKERY: Well, the criminal courts receive priority in terms of the court reporters. SENATOR MACHADO: So, basically we're saying the savings may come in terms of the ownership of the transcripts and what limited application would be juvenile and family? 8 MR. VICKERY: We could try to provide some analysis on that, if you would like. SENATOR MACHADO: Senator Kehoe? SENATOR KEHOE: The question of ownership of the transcripts is separate from the electronic -- transition to electronic -- so the ownership issue, it's still going to be done the traditional way, or we're not addressing that part of it? MR. VICKERY: I'm saying that's a separate policy question that you could take that issue up. The implication is -- the assumption is that if the -- today the reporter owned the transcript, and they prepare the transcript on their time in their home or private offices or whatever, if the State owned the transcript, then we would be responsible for paying the reporters. But I think based on past discussions that there are probably savings in that area. So that's a separate policy issue for you as a legislature about who owns this transcript. And I don't think it effects the other issues that I was raising concerns about. SENATOR KEHOE: How significant would the savings be if the ownership moved to the Courts? MR. VICKERY: If the State owned it of this $26 million -- Ron, do you have an estimate from the past studies? MR. OVERHOLT: I don't. We had a task force. I 9 was the court executive in Alameda County in the early '90s and participated in this pilot. And then we had a task force probably three years ago that looked at this and looked into transcript ownership and whatnot, and we can go back to the results of that task force that included court reporters and labor and court folks on there and see what the potential savings on the ownership issue was. We can provide that to you this week. SENATOR KEHOE: I got some notes here that lost revenues to the courts an estimated 26 million in fees which would otherwise be collected from parties in civil cases when reporting services are provided by the Court. Is that the same as the ownership issue, or I think some of these people are going to address when they come up. I can't get a handle on how significant a savings it would be if there were a change in ownership from the stenographer -- from the court reporter to the Courts. That would be interesting. MR. VICKERY: We can get you that final report. SENATOR KEHOE: And then you were saying the if there were 20 percent pilot project -- we're taking civil off the table right away because they're not required to have something -- so that would, the 10 judicial areas, the Court areas that would still be on the table for 20 percent pilot project of electronic reporting would be juvenile, family, and what else? MR. VICKERY: I would say juvenile, family. And in the civil arena the lawyers are paying for the reporters. And I think the policy question there is should the lawyers have the option of how they want a record. So if they want a record with the court reporter, they could pay for it. Or do you want to also give them the option of having an electronic record? SENATOR MACHADO: But in either case, there's no cost to the Courts in that decision? MR. VICKERY: That's correct. SENATOR KEHOE: On the civil side? SENATOR MACHADO: So similarly to where we are now with juvenile, dependency, family, and criminal, but you still have a transcript question whether it is realtime or it is transcribing from electronic recordings? MR. VICKERY: Correct. And on the electronic record, I think the State does end up the with the ownership of the record, on the electronic depending on how you transcribe it because there are transcription companies so the State owns it. SENATOR KEHOE: The Court's already own -- 11 MR. VICKERY: We don't used electronic reporting today in the Court system. So I think that's the question the legislative analyst is raising is should California be using electronic reporting. RON of AOC: In the pilot project in the early '90s, the Courts owned that transcript. But we're precluded from using it anywhere now, so we don't own any of the transcripts. SENATOR MACHADO: Is there any general fund that goes to subsidize the civil courts? MR. VICKERY: Is there a general fund -- SENATOR MACHADO: That goes to subsidize civil courts? If so, where does that subsidy go? MR. VICKERY: There's general fund money that supports the civil courts -- SENATOR MACHADO: So if we are -- civil courts are based on a fee-basis. Why can't we recover that? MR. VICKERY: I'm sorry, I thought you meant for the cost of civil courts generally. The reporter fee -- so you're asking the question, is the fee covering 100 percent of the costs for -- SENATOR MACHADO: Right, in addition to that, are there other general funds that could be recovered for providing access to civil courts not related to -- MR. VICKERY: Not related to court reporting? SENATOR MACHADO: No, I divided the question. 12 One -- that is the follow-up question. If you're looking at -- is there any general fund that goes to subsidize the court reporting functions in the civil courts? MR. VICKERY: No. SENATOR MACHADO: Now, there are other general funds that go to the civil courts. Are those recovered? MR. VICKERY: Only a portion through the filing fee. So the cost of the judge, the clerk, the materials, those kinds of things, the filing fee -- the filing fees that are paid offset the costs of the Court system. SENATOR MACHADO: Should those fees be increased to make the -- MR. VICKERY: We have a commission that we were directed to establish studying the fee issues right now. SENATOR MACHADO: Let's hold that to next time. I think that's another question to go to do that. Elliot, any comments on the court reporting -- finance, I'm sorry? FINANCE: Finance doesn't have a position on this recommendation. SENATOR MACHADO: Senator Acreman? SENATOR ACREMAN: What is the status of the court reporting in the appellate and Supreme Court? Do 13 they do reporting or not? MR. VICKERY: They do electronic reporting. SENATOR ACREMAN: Electronic in both the Appellate Courts? RON of AOC: But there's not a record made of Court of Appeal proceedings. It's not an evidentiary type of hearing. MR. VICKERY: Because you have no witnesses. You're presenting no evidence. So everything is submitted on the brief at the end of that. SENATOR KEHOE: So you need a written record to get to the Court of Appeals, and then there's no written record after that? MR. VICKERY: There's a written decision by Constitution all the decisions that have to be stated identified -- SENATOR KEHOE: But the judge's discussion and things like that isn't transcribed? MR. VICKERY: No. SENATOR MACHADO: We have some public comment on this. If you would like to take yourself available at the microphone here in the corner. LESIA MERVIN: Hi, I'm Lesia Mervin. I am the president of the California Court Reporters Association. I'm an official reporter in the Central Valley, in 14 Tulare County. I'll try to keep it pretty short. Because we've covered quite a few of the points I wanted to make. But what I wanted to point is out is one of the things you had talked about was some of the other states that implemented this. And California is unique in the fact that we have extremely highly-skilled court reporters. California is on the cutting-edge of technology. And as he talked about, the realtime technology. What that is, is as I am writing, my judge has a screen, and it comes up in English instantaneously what's being said. So that has been proven invaluable to the judges and the attorneys involved. So California is looked at from all over the nation. So we -- I personally go to other states to train reporters how to do this skill. In New Mexico they did implement this, and I received a resolution that was just signed two weeks ago. The New Mexico courts have now made a resolution to bring back the court reporters because the electronic recording definitely did not work for their needs. Now I'm not sure exactly what courts they put them in, but they want them back. Illinois did the same thing. They brought in ER, and now they're begging their court reporters to come back. So there are many issues that are not 15 addressed. What we did want to point out, we wanted to go with the cost because that seems to be -- the LAO thinks we can save 20 percent. And I wanted to point out why that is flawed. We did have an independent analysis. I don't know if everybody received that. It was an independent analysis of court reporting and digital recording we passed out ahead of time. Did everybody get a copy? I have more copies here. Did you receive a copy of that as well? SENATOR KEHOE: No. The sergeant will pass them out. LESIA MERVIN: This was an independent analysis that we had done by Justice Served. And he's done quite a few reports for courts, and he did an independent analysis of what the costs savings would be. And one of the very first things he pointed out in the $13,000,000 in the first year that we determined that it would actually be a net loss attributable to the purchase of the DR equipment -- SENATOR KEHOE: Are you responding to the LAO's proposal here? LESIA MERVIN: Yes, I won't read this fully. It's three full pages. I'll let you have a chance to read that later. But the $13 million, I'll address that 16 first, which is in the first little box there on page one. We attribute that to be an actual net loss because of the equipment purchase, you're going to have to install wiring conduit in the courtrooms, software licensing fees, recruitment, training costs for the new staff, and separate costs for court reporters. And I know I'm not the only county that has a very, very old courthouse. And literally you have to turn off your fan if you're going to print something. So adding more electrical to any of these old buildings I think is going to be a substantial cost. They also indicate that there's an unspecified savings from the use of the audio files in lieu of purchasing these transcripts. And that is not actually the case because there is -- it's a huge myth that ER and digital recording is going to save you time because I don't know if any of you have ever tried to find something in a full CD of something of thousands of pages. It takes you three times as long as if you had something you could skim through, which is why the written word is usually what takes less time. We also determined that of the $111 million for the full conversion where their savings were from staff would actually result in no savings because there are many, many costs that have not been included in the cost savings. The staffing costs that would require 17 from the electronic recorders were not included in that. The court reporters are actually independent contractors, as they said, on the ownership of the record Sometimes I write 4,000 pages a month, literally 4,000 pages is what I'm writing my machine. And sometimes I produce 2,000 pages of transcript out of that 4,000. That is not done during the Court hours. That is done -- I go home at night. I work on the weekends. Those are all borne. I know we talked about the ownership of the record, that really wasn't what I was going to address today, but that is definitely something you're going to have to take into account. So I pay for all of the equipment. I pay for all of my software, computers, faxes everything. So I have just a real short list of some of the things that now the State is going to have to pay for because the court reporters are bearing that costs themselves. The software for the equipment, the maintenance, billing software, word processing software, computers, printers, photocopiers, fax machine, paper, printer toner, cables, fax toner, binding equipment, transcript covers, stamps, packaging, diskettes, labels software support, seminars, vendor training, and equipment insurance. Those are all things that have not been included in the LAO's report for the cost that would actually be coming to you. 18 I'm sorry. Was there a question? SENATOR MACHADO: LAO, response to the challenge? LESIA MERVIN: Challenge. SENATOR MACHADO: Volley. THE LAO: We would like to respond to that. Our estimates are based on the estimates from the pilot project, which looked at the overall costs of implementing electronic court reporting. So this does -- we also specifically limited our analysis to those courtrooms that do require courtroom monitors. So our analysis does include staff costs. And we made sure to include all the one-time costs necessary to implement it. And we also like to note with regard to one-time costs is that in the Florida Ninth Circuit Court of Appeals, they recovered all their one-time costs within the first year. So we would also like -- so essentially because we based our analysis on the pilot program, which made sure to include all costs of electronic court reporting, we would disagree with their analysis that we haven't looked at these costs. SENATOR MACHADO: Thank you. LESIA MERVIN: I did want to address the shortage issue. There was an indication that there is a 19 shortage of reporters. And we have found that not to be the case. There were ten openings in Los Angeles County, and they had 100 applicants. We are not in the shortage situation. There are some small counties, maybe, that don't really have many reporters. That might be a problem in a very small county, but as a whole the State is not in a shortage. Our court reporting schools are thriving. We've got new ones opening. So I wanted to address the shortage issue. SENATOR MACHADO: All right, thank you. Next? If you concur, you can say, "ditto," and that would be appreciated. TOM PRINGLE: My name is Tom Pringle. I'm an official reporter in Shasta County. On that shortage issue, I wanted to add something to that. And that's that if there are shortages in specific courts, it's because the Courts are not hiring reporters. It's not that reporters are not available. In my county we have ten positions. We have eight reporters. It's not because we don't have applicants for those positions. It's because the Court, our court, is not hiring those people. We consider that to be an artificially created 20 shortage, because if the staff was there they wouldn't have a problem covering these courts, especially in civil courts and that kind of thing. Another thing I wanted to add to what Lesia said is that in addition to all of that, court reporters as independent contractors, not all of them -- I do it a different way than Lesia does. I actually have somebody that I pay to do my transcripts. So I have an employee, sort of. She's an independent contractor, too. But I pay an amount of money to her to keep up with the transcript load. There are court reporters that pay for scopists, that's what she is. They pay for proofreaders. They support a small cottage industry, CAT vendor system. There's a whole financial impact to this kind of a recommendation that's underneath the surface of this. So you see one little thing on the top of the water, and that's the court reporters sitting in the courtroom. But there's a whole thing happening underneath the water, and this kind of a recommendation can have a -- depending on the size of the reduction, can have a concurrent impact financially throughout our little system in the State. So there's other consequences to this kind of thing. And I think that's all I can add. SENATOR MACHADO: Thank you. 21 MICHELLE CASTRO: Michelle Castro, Service Employees International Union. I will not repeat anything anyone has already said here. I just want to bring up a couple points right now with regard to access to justice. There's what exists a transcript reimbursement fund which allows indigent litigants to essentially get free transcripts. That fund is paid for solely and 100 percent by court reporters. If you decline the employment of court reporters, that fund is going to decline. Therefore, indigent litigants will have less access to transcripts as well as groups like the Western Center on Law and Poverty, which rely heavily on that fund for their clients. Also, we went through this in '03/'04 when the governor proposed expanding electronic recording and ownership of the transcript by the State. At that time what the legislature decided to do was reject those proposals because they lack merit in terms of long-term/short-term savings as well as it's just bad policy. What the legislature did was instead imposed a new user fee on every time a civil court reporter was used in proceeding. That's generating about $26 million annually each year. Additionally, Government Code Section 6806 22 allows for the charge of the use of court reporters, which is wages and benefits. And I'm not sure if administration or overhead is still in there or not. I think that got taken out. Anyway, so we've seen these over and over. Every time they've come before the legislature, legislature has rejected them. And, in fact, made it more difficult to used electronic recording because it's been bad policy. We do have electronic recording in the State in limited circumstances. And I want to give you on example of one of the situations how electronic recording goes awry. In Fresno County there was a case on appeal. Two of the dates were recorded. One was a court reporter was present. The reporter was asked on the third day when she was present to transcribe the first two dates. It was found that three months of tapes were completely lost in the recordings. So we have the first day, the last date, but not the middle dates. So there's lot of policy problems there. Finally, I want to say when you displace employees. There's a rolling effect to the economy. These are decent wage-earning employees. When they lose their jobs because of electronic recording, 23 without comparable prospects for new employment, it hurts the economy. Our economy is suffering as it is. So I just think it's bad policy. Bad economic policy results in no savings. SENATOR MACHADO: Thank you. UNKNOWN: Can I make one more comment? SENATOR MACHADO: No, we're at the point. Anyone else, please? JACQUELYN YARD: My name is Jacquelyn Yard. I'm with the California Official Court Reporters Association, which is made up entirely of official reporters that are AOC employees. I want to reiterate everything that Lesia Mervin said. I wanted to make the one point here that when we talk about savings, savings is also in time. We found that takes three to five times longer to review electronic recording or see a videotape at the Appellate Court level than it does to be able to read that same information. The other thing I wanted to say is a quick comment on the transcripts, ownership of the transcripts, transcript rates haven't increased in the State of California for over 18 years. And the court reporters have borne the cost of that. I don't think you'll see that same thing happening when the Courts own the transcripts. That was it. I reiterate everybody's 24 comments. Thank you. SENATOR MACHADO: Thank you, next. ATTORNEY 4: Mr. Chairman, members of the committee, Shane Guspin on behalf of the IFPTE Local 21, which represents the court reporters in San Francisco. I would like to share in all the comments previously made by the other speakers. Also point out on the ownership of the transcripts issue, the court reporters are employees during the day. They're independent contractors at night when they transcribe these transcripts. If the Courts own the transcripts, they're going to require employees to transcribe those. That's going to be an additional costs to the Court. SENATOR KEHOE: What is IFPTE? MR. VICKERY: IFPTE, Internal Federation of Professional and Technical Employees. SENATOR KEHOE: Okay. Thank you. SENATOR MACHADO: I think the Courts made a compelling argument in terms of where they would want to see electronic recordings and not to see it. And that, I think, raised some issues onto the full range of benefits that the LAO has said that would be available. There are circumstances surrounding that decision with respect to the appellate process for 25 criminal cases. I do -- I'm not convinced that there's not efficiencies to be achieved in this area. So the recommendation will be to hold this open, and for staff the LAO, and the Courts to look and see if there are savings that can come about through greater efficiencies or the assurance that all costs associated with proceeding court reporting services to the civil courts is indeed fully recovered. SENATOR KEHOE: Just to comment, Mr. Chairman, I'm glad you decided to hold it open. I think the discussion leads me to conclude there's more facets to this discussion than simple ownership or electronic versus paper record. I would listen to a proposal that is more detailed as to where a pilot could be implemented, how it would affect the Courts that are using it. I would like you to make a proposal to look at what the first witness said about Illinois and New Mexico bringing back court reporters after doing away with them. And just -- those are the main things. And then I'm still not clear. I think that was part of the discussion on what would be the financial benefits of the change in the ownership of the record. Thank you. MR. VICKERY: We're not either, but we'll get 26 that information and bring it to you. SENATOR KEHOE: We just need more basic information. I support keeping it open. SENATOR MACHADO: I would also concur. If we could have a cursory look to see if there is indeed potential to explore further. There's enough other issues that need to be looked at in detail to make sure we get a significant outcome. Let's be aware of the cost benefit analysis of this.