NATIONAL VETERANS LEGAL SERVICES PROGRAM et al v. UNITED STATES OF AMERICA

Filing 99

MOTION for Certification for interlocatory appeal, MOTION to Stay by UNITED STATES OF AMERICA (Attachments: #1 Memorandum in Support, #2 Text of Proposed Order)(Field, Brian). Added MOTION to Stay on 7/17/2018 (jf).

Case 1:16-cv-00745-ESH Document 99-1 Filed 07/13/18 Page 1 of 11

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
NATIONAL VETERANS LEGAL
SERVICES, et al.,
Plaintiffs,
v.

Civil Action No. 16-0745 (ESH)

UNITED STATES OF AMERICA
Defendant.
DEFENDANT’S MEMORANDUM IN SUPPORT OF MOTION TO CERTIFY
THE COURT’S ORDERS OF DECEMBER 5, 2016, AND MARCH 31, 2018, FOR
INTERLOCUTORY APPEAL AND TO STAY PROCEEDINGS PENDING APPEAL
Defendant, the United States, respectfully requests that the Court certify for interlocutory
appeal under 28 U.S.C. § 1292(b) its December 5, 2016 Order denying Defendant’s Motion to
Dismiss or, in the Alternative, for Summary Judgment (ECF No. 24) and the Court’s March 31,
2018 Order granting in part and denying in part Defendant’s Motion for Summary Judgment (ECF
No. 88). As explained below, both orders “involve[ ] controlling question[s] of law as to which
there is substantial ground for difference of opinion” and a decision from the United States Court
of Appeals for the Federal Circuit with respect to either Order “may materially advance the
ultimate termination of the litigation[.]” 28 U.S.C. § 1292(b). Additionally, the United States
respectfully requests that the Court stay further proceedings in this Court pending appeal.
BACKGROUND
On December 5, 2016, the Court denied Defendant’s Motion to Dismiss or, in the
Alternative, for Summary Judgment. See ECF Nos. 24 & 25. In that Motion, the United States
argued, among other things, that the relevant statutory text—28 U.S.C. § 1913 note (hereinafter,
the “E-Government Act”)—“is insufficient to create the remedy of return” of excessive PACER

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fees. ECF No. 11 at 18 (citing Norman v. United States, 429 F.3d 1081, 1096 (Fed. Cir. 2005)).
In denying the Motion to Dismiss, this Court recognized that there is no Little Tucker Act
jurisdiction unless the statute causing the exaction provides “‘either expressly or by “necessary
implication,” that the remedy for its violation entails a return of money unlawfully exacted.”’”
ECF No. 11 at 6 (quoting Norman, 429 F.3d at 1095 (quoting Cyprus Amax Coal Co. v. United
States, 205 F.3d 1369, 1373 (Fed. Cir.2000))).
On March 31, 2018, the Court granted in part and denied in part Defendant’s Motion for
Summary Judgment. See ECF Nos. 88 & 89. In that Motion, the United States argued that PACER
fees, and the Judicial Conference’s use of PACER fee receipts, complied with the E-Government
Act. See ECF No. 73-1. In its summary judgment Order, this Court ruled that specified categories
of the Judiciary’s past expenditures of PACER fees were permissible, while others were
impermissible.
As the Parties have explained, further proceedings would be complicated and burdensome.
Notably, there is no statutory formula for translating ostensibly impermissible past expenditures
of PACER fees into damages awards for individual PACER users. Fees collected are available
“without fiscal year limitation,” 28 U.S.C. § 612(a), and the Judiciary routinely carries forward
surpluses of PACER fees. Thus, the Parties agreed that “further proceedings are necessary to
determine the amount of an illegal exaction, if any,” and proposed a schedule for fact discovery,
expert discovery, and summary judgment briefing, potentially followed by a bench trial. See
ECF No. 91 at 1 (emphasis added). Additionally, even assuming that class members would be
owed any damages, the specific circumstances here risk that the expense of attempting to ascertain
the amount of an individual’s award will dwarf the award itself. In moving to certify the class,

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Plaintiffs acknowledged that the vast majority of class members stand to recover only a small
amount of damages. See ECF No. 8 at 13.
ARGUMENT
I.

The Court’s Orders Present Controlling Issues Of Law
A.

There are Substantial Grounds to Conclude that the Court Lacks Jurisdiction
Over Plaintiffs’ Claims

The threshold issue for the Federal Circuit to decide will be one of jurisdiction: whether
the Court’s Orders should be vacated for lack of Little Tucker Act jurisdiction because Plaintiffs
do not have a cognizable illegal exaction claim. It is settled that “a district court, when exercising
jurisdiction under the Little Tucker Act, in effect sits as the Court of Federal Claims, which does
not have general equitable powers.” Doe v. United States, 372 F.3d 1308, 1313 (Fed. Cir. 2004).
In attempting to identify a basis for monetary relief, Plaintiffs relied on an “illegal exaction”
theory. They alleged that a portion of their PACER fees constituted an “illegal exaction” because
it was used for purposes not authorized by statute.
An “illegal exaction” occurs when money is “improperly paid, exacted, or taken from the
claimant in contravention of the Constitution, a statute, or a regulation.” Norman, 429 F.3d at
1095 (quoting Eastport S.S. Corp. v. United States, 372 F.2d 1002, 1007 (Ct. Cl. 1967)). But, as
this Court recognized when it denied the United States’ Motion to Dismiss, it is not enough for a
claimant to allege that money was improperly paid. To invoke the Court’s jurisdiction over an
illegal exaction claim, the statute causing the exaction must provide “either expressly or by
‘necessary implication,’ that ‘the remedy for its violation entails a return of money unlawfully
exacted.’” ECF No. 11 at 6 ((quoting Norman, 429 F.3d at 1095) (quoting Cyprus Amax Coal Co.,
205 F.3d at 1373)). In Cyprus Amax, for example, the Federal Circuit concluded that “the Tucker
Act provided jurisdiction over an illegal exaction claim based upon the Export Clause of the
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Constitution because the language of that clause ‘leads to the ineluctable conclusion that the clause
provides a cause of action with a monetary remedy.’” Norman, 429 F.3d at 1095 (quoting Cyprus
Amax, 205 F.3d at 1373).
Unlike the claims here, a typical illegal exaction claim involves contested payments that
were made involuntarily. The “classic illegal exaction claim is a tax refund suit alleging that taxes
have been improperly collected or withheld by the government.” Id. Similarly, in Cyprus Amax,
the claimant challenged the collection of an excise tax.

By contrast, in United States v.

Edmondston, 181 U.S. 500 (1901), the Supreme Court held that a buyer who had paid more than
the statutory price for federal land lacked a cognizable claim for the excess payment because “the
transaction was purely voluntary on his part” and the mistake was not induced by government
deception. Id. at 515. The only decisions finding an illegal exaction in the context of a voluntary
agreement are a series of cases from the Court of Claims that involved the application of a statute
governing the sale of government-owned ships to private persons.

The Court of Claims

emphasized that the substantive statute “was intended to fix, by a self-operating statutory formula,
the selling price of the Government’s surplus ships,” such that “the determination of the price was
a mere mathematical calculation.” A.H. Bull S.S. Co. v. United States, 108 F. Supp. 95, 97 (Cl. Ct.
1952); see also Sprague S.S. Co. v. United States, 172 F. Supp. 674, 675 (Ct. Cl. 1959) (reasoning
that the sales of surplus ships were subject to a statutory price formula “comparable to a statutory
schedule of public utility rates”).
Plaintiffs do not have a cognizable illegal exaction claim for alleged overpayment of
PACER fees. As the government noted in moving to dismiss the Complaint, Plaintiffs conceded
that liability for a PACER fee “comes only after an agreement is reached between the PACER user
and the [Administrative Office].” ECF No. 11 at 6 (citing Complaint ¶ 7 (“each person must agree

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to pay a specific fee”)). Indeed, Plaintiffs emphasized that before accessing a particular record, a
person must first agree to pay a specified fee shown on the computer screen. See ECF No. 8 at 2
(Plaintiffs’ motion for class certification) (providing an illustrative screenshot).
Unlike the statutory provisions at issue in the shipping cases from the Court of Claims, the
relevant statutory authority—the E-Government Act of 2002—does not “fix, by a self-operating
statutory formula,” the fees charged for downloading documents through PACER. A.H. Bull S.S.
Co., 108 F. Supp. at 97. On the contrary, it vests the responsibility for setting fees in the Judicial
Conference. Moreover, even assuming arguendo that the Judiciary had used past fees for
impermissible expenditures, there is no statutory formula for determining the impact that such
expenditures would have had on the fees themselves. Fees collected are available “without fiscal
year limitation,” 28 U.S.C. § 612(a), and the Judiciary routinely carries forward surpluses of
PACER fees as reflected in the annual financial plans that the Judiciary submits to the
appropriations committees.1 Thus, there is no basis to assume that the PACER fees would have
been lower if the ostensibly impermissible expenditures had not been made.
Nor is there any other reason to conclude that Congress intended to allow the Judiciary’s
fee schedules or its expenditures of fees to be the subject of retrospective second-guessing in court.
Because the Judiciary is not an agency within the meaning of the Administrative Procedure Act
(“APA”), the fee schedules set by the Judicial Conference are not subject to APA review. See
Wash. Legal Found. v. U.S. Sentencing Comm’n, 17 F.3d 1446, 1449 (D.C. Cir. 1996); In re
Fidelity Mortgage Investors, 690 F.2d 35, 37–38 (2d Cir. 1982). A district court therefore could

1

See, e.g., ECF No. 81-1 at 30 (reporting a prior-year carryforward of $32.2 million from fiscal
year 2007 and projecting a $44.5 million carryforward for fiscal year 2008); id. at 35 (reporting a
prior-year carryforward of $26.6 million for fiscal year 2011 and projecting a $31.9 million
carryforward for fiscal year 2012).
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not order the Judiciary to lower the fee schedule prospectively. The APA exemption would be
undermined if PACER users could compel the Judiciary to lower fees by threatening damages
actions, as Plaintiffs have tried to do here. See 4/18/18 Tr. 31 (warning that Plaintiffs’ counsel
intend “to file a second action” if “the fee doesn’t come down”).
Instead of authorizing judicial review of the fee schedule, Congress required the Judicial
Conference to transmit the fee schedule to Congress itself before the schedule becomes effective.
See 28 U.S.C. § 1913 note. Moreover, Congress has required the Judiciary to report its proposed
expenditures on an annual basis to the appropriations committees.

See, e.g., Judiciary

Appropriations Act of 2009, § 304. As this Court recognized, the expenditures at issue here were
itemized in the annual financial plans that the Judiciary submitted to the appropriations
committees. See ECF No. 90 at 14–16. Such reports, in turn, can inform the terms of Congress’s
annual appropriations acts for the Judiciary. Congress’s control over federal spending would be
nullified if a court could retrospectively declare past expenditures invalid and, on that basis, award
additional payments from the fisc.
Accordingly, there is substantial ground to conclude that Plaintiffs have no cause of action
for damages, and that the Court’s Orders should be vacated for lack of Little Tucker Act
jurisdiction.
B.

Assuming Jurisdiction, There Is Substantial Ground To Conclude That The
Expenditures At Issue Here Were Permissible

Assuming that there is jurisdiction to review the Judiciary’s past expenditures of PACER
fees, there is substantial ground to conclude that the expenditures at issue here were permissible.
The E-Government Act provides that the Judicial Conference “may, only to the extent necessary,
prescribe reasonable fees … for collection by the courts … for access to information available
through automatic data processing equipment.” 28 U.S.C. § 1913 note. Additionally, it provides
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that such fees “shall be deposited as offsetting collections to the Judiciary Automation Fund
pursuant to 28 U.S.C. 612(c)(1)(A) to reimburse expenses incurred in providing these services.”
The statute that replaced the Judiciary Automation Fund with the Judiciary Information
Technology Fund requires that all fees collected under the E-Government Act be deposited in the
Fund, see 28 U.S.C. § 612(c)(1)(A), and makes moneys in the Fund available to the Director of
the Administrative Office for the procurement of information technology resources for program
activities in the federal court system, without fiscal year limitation, id. § 612(a).
This Court correctly rejected Plaintiffs’ contention that the E-Government Act includes
“only the services that the [Administrative Office] is actually charging fees for as set forth in the
EPA Fee Schedule, i.e., the PACER system” and related PACER services. ECF No. 89 at 25. The
Court concluded, instead, that “[t]he term ‘these services’ could also mean any service that
provides ‘access to information available through automatic data processing equipment,’ whether
or not it is expressly part of the EPA fee schedule.” Id. (quoting 28 U.S.C. § 1913 note). This
Court emphasized that at the time the E-Government Act was passed in 2002, “PACER fees were
already being used to pay for non-PACER costs,” such as for CM/ECF and the Electronic
Bankruptcy Noticing system,” and that “nothing in the statute’s text or legislative history …
suggest[ed] that Congress intended to disallow the use of PACER fees for those services.” ECF
No. 89 at 27 (citation omitted).
This Court did not dispute that the four categories of expenditures it declared impermissible
were used to “‘reimburse expenses incurred’ in providing ‘access to information available through
[automatic] data processing equipment.’” Id. at 29. The term “automatic data processing
equipment” encompasses a broad range of information technology equipment including
computers, ancillary equipment, software, support services, and related resources. Id. at n.4. And

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the Court’s description of the four categories of expenditures shows that each category consisted
of expenses incurred in providing access to information through automatic data processing
equipment.
For example, under the Violent Crime Control Act notification system, local law
enforcement officers receive electronic notification of court documents that were previously sent
to them through the mail, which notify them of changes to the case history of offenders under
supervision. See id. at 19. Thus, that system provides local law enforcement officers with access
to court information “through [automatic] data processing equipment.” Id. at 29. Likewise, the
web-based juror services system provides prospective jurors with electronic copies of court
documents regarding jury service. Id. at 19. The State of Mississippi study allowed the State to
provide the public with electronic access to its documents. Id. And the courtroom technology
expenditures improved “the Judiciary’s ability to share case evidence with the public in the
courtroom during proceedings and to share case evidence electronically through electronic public
access services when it is presented electronically and becomes an electronic court record.”
Id. at 14–15 (quoting the Judiciary’s Financial Plan for Fiscal Year 2007). For instance, the
television monitors allowed jurors and the public seated in the courtroom to view electronically
exhibits and other evidence during a court proceeding. Id. at 41.
Although this Court did not dispute that each of these categories of expenditures consisted
of services that provide “access to information available through [automatic] data processing
equipment,” id. at 29, the Court imposed an additional limitation on the permissible uses of
PACER fees. The Court ruled that such fees may be used only to “provide the public with access
to electronic information maintained and stored by the federal courts on its CM/ECF docketing
system.” Id. at 41. The Court indicated that it derived this limitation from a combination of

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sources including “Congress’s endorsement of the expenditures being made in 2002, in
conjunction with the statutory language”; “the evolution of the E-Government Act”; and “the
judiciary’s practices as of the date of the Act’s passage.” Id. at 38.
There is substantial ground to conclude that this Court erred in substituting this view of the
permissible uses of PACER fees for the Judiciary’s contrary understanding. Under this Court’s
own description, the expenditures at issue here were consistent with the text of the E-Government
Act note because they were made for services that provide “access to information available through
[automatic] data processing equipment.” ECF No. 89 at 29. That understanding is reinforced by
the text of the statute that appropriates moneys in the Judiciary Information Technology Fund,
which requires that all fees collected under the E-Government Act be deposited in the Fund, see
28 U.S.C. § 612(c)(1)(A), and broadly provides that moneys in the Fund are available to the
Director of the Administrative Office without fiscal year limitation for the procurement of
information technology resources for program activities in the federal court system, id. § 612(a).
Thus, there was a sound basis for the Judiciary to determine that the expenditures at issue here
were permissible, a view that was shared by the congressional committees with responsibility for
monitoring such expenditures.
II.

Immediate Appeal May Materially Advance The Ultimate Termination Of This
Litigation
The remaining requirement for a § 1292(b) certification is also met, because immediate

appeal should materially advance the ultimate termination of this litigation.
If the Federal Circuit accepts the government’s position with respect to either of the
controlling legal issues discussed above, this litigation will come to an end. By contrast, further
proceedings would be time-consuming and burdensome. As explained above, there is no statutory
formula for translating ostensibly impermissible past expenditures of PACER fees into damages
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awards for individual PACER users. Accordingly, the Parties agreed that “further proceedings are
necessary to determine the amount of an illegal exaction, if any.” ECF No. 91 at 1 (emphasis
added). The Parties jointly proposed a schedule under which they would engage in five months of
fact discovery and five months of expert discovery, with summary judgment motions (and possibly
a bench trial) thereafter. Id. The Parties also proposed that the Court hold a status conference
between the close of expert discovery and the due date for summary judgment motions, “to
determine the most efficient plan for further proceedings at that point, including whether a brief
bench trial may be appropriate.” Id.
Avoiding such protracted discovery is ample justification for an interlocutory appeal.
Moreover, even if there were a viable means to determine the amount of fees that were “illegally
exacted” from PACER users collectively, there is no means to determine what any individual
member would have been charged for particular downloads and any attempt to determine the
amounts owed to individual class members would itself be burdensome. In moving for class
certification, Plaintiffs estimated that there are nearly two million PACER accounts, approximately
one-third of which are active in a given year, and that the class contains at least several hundred
thousand class members. See ECF No. 8 at 13. Plaintiffs acknowledged that the vast majority of
class members stand to recover only a small amount of damages. Id. at 19. Any damages
calculation would have to take into account the exemption from the class definition for federal
agencies (which are substantial PACER users) as well as the exclusion of PACER users that opted
out of the class. See, e.g., 4/18/18 Tr. 22 (noting that Reuters, a substantial PACER user, opted
out). Thus, the amount spent in attempting to ascertain an individual damages award could easily
exceed the award itself.

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Therefore, the Federal Circuit should be given the opportunity to decide the controlling
legal issues before the Parties’ and the Court’s resources are expended on further proceedings. For
the same reasons, further proceedings in this Court should be stayed pending appeal.
CONCLUSION
For the forgoing reasons, the United States respectfully requests that the Court grant this
Motion and certify its Orders of December 5, 2016, and March 31, 2018, for interlocutory appeal
and find, pursuant to 28 U.S.C. § 1292(b), that the Orders involve controlling issues of law as to
which there is substantial ground for difference of opinion and that an immediate appeal from the
orders may materially advance the ultimate termination of the litigation. In addition, this Court
should stay further proceedings pending appeal.
July 13, 2018

Respectfully submitted,
JESSIE K. LIU
D.C. Bar #472845
United States Attorney
DANIEL F. VAN HORN
D.C. Bar #924092
Chief, Civil Division
By:

/s/ Brian J. Field
BRIAN J. FIELD (D.C. Bar #985577)
W. MARK NEBEKER (D.C. Bar #396739)
Assistant United States Attorney
555 4th Street, N.W.
Washington, D.C. 20530
Tel: [phone]
E-mail: [e-mail];
[e-mail]
Counsel for Defendant

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