Criminalizing Poverty Through Fines, Fees, and Costs

On June 20, 2016, a distinguished panel of experts discussed how fines, fees, and costs in our justice system are criminalizing poverty by burying people unable to pay under ever-growing mountains of debt and imposing on the poor more severe punishments for failure to pay. This free CLE webinar, Criminalizing Poverty: Debtor’s Prison in the 21st Century, was presented by the American Bar Association Commission on Homelessness & Poverty, Section of State and Local Government Law, Criminal Justice Section, Section of Litigation Children’s Rights Litigation Committee, and the Center for Professional Development.

The program was moderated by Lourdes Rosado, chief of the Civil Rights Bureau of the New York State Office of the Attorney General, and prominently featured the following panelists:

• Alexes Harris, associate professor, Department of Sociology, University of Washington
• Chiraag Bains, senior counsel to the assistant attorney general, U.S. Department of Justice, Civil Rights Division
• Jessica Feierman, associate director, Juvenile Law Center
• Danielle Elyce Hirsch, assistant director of the Civil Justice Division, Administrative Office of the Illinois Courts
• Nick Allen, staff attorney, Columbia Legal Services

Legal Financial Obligations: What Are They?

There are many different terms used interchangeably across the country—such as monetary sanctions, legal financial obligations (LFOs), and assessments (e.g., in Illinois)—to describe the different fines, fees, and costs associated with offenses and the courts. For the sake of simplicity, in this article, we will use the term “LFO” whenever possible to refer to such fines, fees, and costs.

In the program on criminalizing poverty, Dr. Harris identified four systems of justice or “layers of legal debt” in which LFOs are imposed on people: traffic and misdemeanor, juvenile, felony, and federal. Then, within each of these layers of legal debt, there are types or “buckets” of LFOs. Dr. Harris has identified through her research the following buckets of LFOs:

• Fines related to the offense. These fines range from an undefined amount (Delaware) to $500,000 (Kansas). Examples are a discretionary $1,000 drug conviction LFO for a first conviction and $2,000 for a second conviction (Washington).
• Court-imposed user fees for processing. Examples are a mandatory $500 victim penalty assessment per felony (Washington), a $100 fee per felony (Washington), a $100 criminal cost fee (Indiana), a $193 felony docket fee (Kansas), and a $300 jury trial fee (Maine).
• Surcharges for court and non-court-related costs. These are fees on top of the base charges, and they range from 0 to 83 percent. In Arizona, 10 percent of an 83 percent surcharge goes to a clean elections fund even though people with felony convictions paying this surcharge cannot vote; in Delaware, a 50 percent surcharge on fines goes to a transportation fund.
• Collection costs and interest on unpaid balances. These directly create a two-tier system of justice by punishing those who are unable to pay with additional costs such as interest and penalties. Examples are 4.75 percent interest (Florida), 7 percent interest (Georgia), 12 percent interest (Washington), a 15 percent penalty on unpaid balances and a 30 percent collection fee (Illinois), and a 19 percent collection fee for delinquent payments and a $35 fee (Arizona).
• Restitution for victim compensation. Restitution is the money owed to victims by offenders to compensate for the offender’s actions.

While the webinar focused on specific examples of these buckets from Illinois, Ferguson, and Washington to demonstrate how the issues play out, Dr. Harris made clear that “these fines, fees, and practices exist across the United States.” More examples from each state can be found in Dr. Harris’ book, A Pound of Flesh: Monetary Sanctions as Punishment for the Poor (Russell Sage Found. 2016).

Spotlight on Restitution LFOs

At the webinar, Nick Allen delved into this last bucket of restitution LFOs and the issues they present.

Allen explained that, in the state of Washington, as in other states, restitution is an LFO that is part of the actual judgment, and for felony offenses, restitution is mandatory. “The court has no discretion to consider the defendant’s ability to pay when setting restitution,” emphasized Allen.

Allen recognized restitution as something that needed to be imposed. However, he clearly outlined some of the primary problems with how restitution is currently being used:

• Victim compensation takes years or never happens. A defendant often owes, for example, $3,000 in restitution but can only afford to pay $10 per month. At that rate, the victim cannot be compensated for 25 years. If that amount is increased to $25 per month, then it is 10 years, without accounting for interest or a penalty.
  
• Where there is no ability to pay, there is no way to complete restitution. If there is no ability to pay, there is no way to get out from under restitution or any other LFO, which leaves the offender bound to the system, forced into more serious debt, and suffering further from collateral consequences in employment, housing, etc.
  
• There are no options for relief from restitution. In many states, such as Washington, once the judgment is entered, the only relief is making a payment. Restitution is almost impossible to undo and will never expire.
  
• Laws implementing restitution create barriers. There are laws, as in Washington, that require collection of restitution before any other LFO. In some jurisdictions, this could mean that restitution has to be collected first per case. So, if there are three cases, the victim in the third case will not receive restitution until the first two cases are paid off.
  
• Annual collection fees are assessed first. Court clerks and superior courts can charge an annual collection fee of $100 per year. This is not considered an LFO, so they collect this fee before paying out on the underlying LFO, including the restitution.
  

Best practices and ideas on how to change our restitution system are emerging from across the country, and they include taking into account the person’s ability to pay, allowing for conversion of restitution to community service, looking to more restorative justice approaches, imposing restitution rather than other fines, imposing statutes of limitations on restitution, allowing for modification of restitution, and making it a civil collection and taking it out of the criminal and juvenile justice systems. There has to be a better balance struck between making the victim and community whole again without putting a terrible burden on the offender.

How Do LFOs Affect People Who Are Unable to Pay?

Nick Allen presented the negative consequences that stem from the imposition of LFOs in Washington and nationally. These consequences are especially problematic for people who are unable to pay:

• Interest penalty. This penalty is imposed on those who cannot immediately pay off LFOs. In Washington, this is 12 percent per year from the date of judgment, even during the entire period of incarceration, when a defendant will have a limited source of income.
  
• Sanctions for failure to pay. Sanctions include a warrant, time in jail, and the like. A defendant cannot be incarcerated unless the failure to pay is “willful.” But, as Allen noted, the “interpretation of concepts like willfulness and indigence are inconsistent, and so this results in indigent people being incarcerated for failure to pay.”
  
• Deductions ordered by the court or the Department of Corrections. Examples are garnishment and orders of payroll deduction. These can take up to 25 percent of a person’s income and can take away from money needed for basic living expenses, particularly for someone already living in poverty.
  
• Lifelong ties to the system. LFOs do not expire in Washington for felony convictions, which means that people can be brought back into the system, cannot vacate their record, or recover their full civil rights until their LFOs are paid in full.
  

When it comes to LFOs, we do not seem to have an appreciation for the serious impact that poverty has on a person and his or her ability to meet an LFO. Allen best described it when he shared that “$500 or $600 for someone who has no ability to pay may as well be $1 million.” Multiply that by the various convictions that some people have and you are left with people who, no matter what their intentions or how hard they try to rectify the situation, are sentenced to harsher punishments and an even more devastating poverty from which they can never emerge.

Allen gave examples of Columbia Legal Services clients to explain how LFOs truly work against people who are unable to pay from the very start. One of the clients had LFOs from three different convictions in the early 2000s. The first LFO was for $1,600 and is now close to $3,500 because of interest. The second LFO was $500 and became $1,319 before it was sent to collections in 2012. Once in collections, a 23 percent interest was added, so that LFO is now over $1,600. The third LFO started as $1,300 plus interest, which the client could also not afford to pay, so it was turned over to collections, where 50 percent was added to the outstanding balance, as allowed by Washington statute. On the third LFO, he owes $3,500 in principal and $3,300 in interest. He got a job, but the collection agency will not accept less than $200 per month, so he still cannot pay. He is in his mid-50s, has children to take care of, and is trying to find other ways to pay. Twenty-five percent of his income is taken out, so he can’t cover basic living expenses. “What started off as $3,400 in principal that he already lacked the ability to pay has now ballooned over $12,000 in LFOs, and there is really no end in sight because of the interest and because they are not going to expire,” Allen points out.

Spotlight on the Juvenile Justice System

As Dr. Harris outlined at the beginning of the program, one of the four systems of justice in which LFOs are imposed is the juvenile justice system. Jessica Feierman explained how the Juvenile Law Center kept hearing stories from its clients about all the different costs, fines, and fees involved, so the center took the time to do a 50-state statutory review to get a sense of the problem nationally and to look at what can be done. According to Feierman, the JLC found that the problem is “widespread and highly problematic.” The report outlines the types of costs imposed:

• Court costs (27 states). Examples are single fees, witness fees, transportation costs, prosecution costs, court operations, depositions, and transcripts.
  
• Evaluation and testing (31 states). Examples are drug and alcohol, general, mental health, and DNA—a wide variety.
  
• Probation and supervision (20 states). It is common for courts to find a violation because the defendant couldn’t pay costs.
  
• Diversion programs (22 states). The defendant avoids formal processing, but if the defendant can’t pay the fee, he or she is formally processed.
  
• Cost of care (45 states). Lumped together are a large number of costs: for example, paying for the cost of incarceration, GPS, and monitoring.
  
• Fines (44 states). Fines may be imposed on youth and families.
  
• Expungement (13 states). Defendants are sometimes required to pay a fee to expunge their records; other times, they are not allowed to seek expungement until they have paid off other costs.
  
• Cost of counsel. JLC is still determining how many states have such a cost. Even if determined indigent, the defendant may have to pay a fee for counsel or reimburse counsel expenses later.
  
• Restitution (50 states and the District of Columbia). Restitution is different from other costs, but when the costs are added together, restitution is part of how it makes it difficult for young people to pay everything back.
  

To supplement the 50-state statutory review and get a sense of what was really happening on the ground, JLC surveyed 180 individuals in 41 states. These individuals included lawyers, other professionals, family members, and young people with experience in the juvenile justice system. JLC found that the practices were widespread. In fact, Feierman noted, there are local practices “to impose fees, costs, and fines even when there is no statute on the ground—that’s particularly true for probation, informal adjustment, and expungement.”

JLC reached out especially to families to collect stories about what happens to young people and their families as a result of LFOs. Feierman gave the example of E.B., who faced a truancy fine in Arkansas. E.B. had heard that the fine was $500. Neither he nor his mother could afford to pay the fine. E.B. told the JLC: “My mind was set to where I was just like forget it, I might as well just go ahead and do the time because I ain’t got no money and I know the [financial] situation my mom is in. I ain’t got no money, so I might as well just go and sit it out.” No lawyer or family member was present at the hearing, and the judge imposed a three-month sentence in a secure facility. After looking up the fine, JLC discovered that it could be up to $500, and it was discretionary. As to how young people perceive these costs, JLC found that E.B. was really concerned about how his mom perceived him because of his own shame. E.B. shared: “I didn’t want [my mom] to see me the way I was looking. I didn’t want her to see her son being in the situation he was in. . . .” Feierman shared that E.B. did not realize in the moment that an adult may have been able to help him through these problems and that how his adolescent brain worked may have contributed tremendously to this situation. E.B. told JLC that after being in jail, he couldn’t see himself as a good kid again.

JLC is finding that LFOs undermine the goal of the juvenile justice system of giving young people a second chance. In researching the penalties imposed on young people for not paying LFOs, JLC is discovering that they include civil contempt, criminal contempt, incarceration, further fines, license suspension, violations of probation, violations of informal adjustment, civil judgment, and misdemeanors. The different LFOs and penalties assessed by juvenile justice systems across the country are forcing young people and their families to go deeper into debt and become further entrenched in the court system with devastating results, as in the case of E.B.

Recent Findings and Emerging Best Practices: Illinois; Ferguson, Missouri; Washington

During the program, the panelists highlighted the new findings from Illinois, Ferguson, and Washington to give specific examples of LFOs and their effects. In addition, they discussed the best practices and reform possibilities emerging from this research and these jurisdictions.

Illinois

Danielle Elyce Hirsch presented the findings of the Illinois Statutory Court Fee Task Force. The report from this task force, Illinois Court Assessments (June 1, 2016), covers the circuit courts but not the administrative and municipal courts. Hirsch clarified that, in Illinois, LFOs are referred to as “assessments.”

To give us some background first, Hirsch explained that, in the process of exploring the idea of adding a filing fee to fund civil legal aid services and an ambitious civil Gideon pilot, Illinois decided to create a bipartisan task force composed of all the relevant stakeholders to analyze assessments and make recommendations. The task force issued a report with findings and recommendations for the civil and criminal sides and several different audiences. First, the task force identified the types of civil and criminal court assessments present in Illinois circuit courts, from filing to mandatory arbitration fees. Next, Hirsch shared that they “tried to take a step back” and “did a schoolhouse rock—who touches how an assessment becomes law?” They found all the different stakeholders that were involved in the process. Next, they analyzed data from across the state and made four findings: (1) costs are increasingly passed on to court users; (2) assessments are constantly increasing and outpacing inflation; (3) there is extreme diversity in assessment amounts from one county to another (e.g., driving under the influence conviction assessments: $327 in Knox County but $1742 in McLean County); and (4) low- and moderate-income Illinois residents are severely and disproportionately affected.

The Illinois report recommends the following five core principles:

• Courts should be funded from general government revenue, not user taxes.
  
• There must be a relationship between an assessment and access to the courts because, if we keep increasing assessments, we could be impeding access and creating a barrier to reentry.
• Assessments should be simple, easy to understand, and uniform.
• There needs to be a nexus between an assessment and its rationale.
• There should be periodic review of assessments.
  

The Illinois report proposes four legislative actions and draft language: a civil assessment act with all assessments, an expansion of the fee waiver provision, a criminal and traffic assessment act similar to the civil one proposed, and a new criminal fee waiver provision.

Ferguson, Missouri

Chiraag Bains explained that, shortly after Michael Brown was shot on August 19, 2014, the U.S. Department of Justice (DOJ) opened two investigations into the police department of Ferguson: one into Michael Brown’s shooting and a second one, covered in this webinar, into the practices of the police department. On March 4, 2015, the DOJ released a report on its investigation into the police department, which included an analysis of the Ferguson Municipal Court and fees assessed because, unlike in other jurisdictions, in Ferguson “the police essentially exercised supervision over the courts.” For example, the court clerk reported to the police chief, and the court was physically located within the police department. See also Press Release, U.S. Dep’t of Justice, Justice Department Announces Findings of Two Civil Rights Investigations in Ferguson, Missouri (Mar. 4, 2015). During this webinar, Bains focused on the findings pertaining to the court.

The DOJ found that the courts were violating the due process and equal protection rights of the people appearing before them. Bains noted that “the court routinely imposed excessive fines and ordered the arrest of low-income residents for failure to appear or to make payments, sometimes despite inadequate notice and also without inquiring into their ability to pay. And we also found that there was the use of unlawful bail practices resulting in unnecessary and unconstitutional incarceration.”

One of the most serious problems was that the court issued municipal arrest warrants for missed appearances. In 2013, in a city of about 21,000 people, the court issued more than 9,000 municipal arrest warrants relating to cases of minor violations, traffic tickets, and housing code violations. Bains also emphasized how Ferguson did not allow for a license suspension to be lifted until all fines had been paid in full, which was a stricter standard than was called for by Missouri law, and additional fines were imposed in these cases. One man who owed the city close to $1,000 in fines wrote to the city that he wanted to pay what he owed and was trying to put together what he could, but it was hard to get work with the warrants. The clerk still issued a warrant then for his arrest, even though he had made efforts and demonstrated inability to pay. Bains noted that the LFOs kept people “trapped in poverty,” especially taking into account the mounting debt and collateral consequences of repeated imprisonment, employment, housing, etc.

The DOJ found disparate impact motivated by racial bias. In Ferguson, African Americans were 68 percent less likely to have their cases dismissed, more likely to have cases last longer and have more court encounters, and 50 percent more likely to have an arrest warrant issued against them. Explicit evidence, such as messages and memoranda, established that the court was operating as a revenue generator, to the point that police shifts, changes in employment, and decisions relating to the enforcement of laws were made from the perspective of increasing revenue. Ferguson court revenues increased tremendously from $1.38 million in 2010 to the budgeted $3.09 million in 2015 that the city was on track to meet before Michael Brown was shot.

Bains noted that many police officers did not like what was happening in Ferguson and expressed that “they had not signed up to be collection agents, essentially, for the courts . . . and that this kind of activity was actually making it harder for them to gain the public’s trust.” The Ferguson case is now in the settlement phase. The DOJ reached a federal consent decree entered on April 19, 2016.

In response to a growing national concern over LFO issues, the DOJ convened, on December 2, 2015, a diverse group of court administrators, judges, lawmakers, affected individuals, and others. On December 3, the DOJ and the White House cosponsored an event on these issues. See Press Release, U.S. Dep’t of Justice, Fact Sheet on White House and Justice Department Convening—A Cycle of Incarceration, Imprisonment, and Debt (Dec. 3, 2015). The DOJ released a Dear Colleague letter on March 14, 2016, clarifying that, based on Bearden v. Georgia, courts must determine whether a person can pay before imprisoning them for fines. Bains urged us to review and use the DOJ Dear Colleague letter, which provides specific information on the legal challenges available (e.g., due process, equal protection), alternatives to incarceration, access to a hearing, notice and right to counsel, warrants, license suspension, bail practices, and responsibilities of court staff and private contractors. Legal challenges have focused on the Fourteenth Amendment, but there are many cases in the pipeline now to develop Eighth Amendment case law.

Bains shared best practices gathered by the DOJ and learned from Ferguson: ensure policing and court enforcement are not driven by revenue but by public safety, consider a comprehensive amnesty program to forgive cases and warrants before a certain date, eliminate unnecessary fees, define warrant practices to comply with due process, increase court transparency, and work closely with judges because many of them are willing to speak out and take action.

Washington

Dr. Harris’s research found that Ferguson is actually not an outlier. Her research looked at national statutes, but the quantitative and qualitative data came from the state of Washington. The following are among her findings after eight years of research and interviews:

• Monetary sanctions are regularly imposed nationally.
  
• Legal debt is usually substantial in relation to expected earnings.
• Non-legal factors (such as gender, race, and ethnicity) significantly influence the amount of LFO imposed.
• Monetary sanctions reduce family income and create long-term debt.
• LFOs lead to financial constraint especially because of cost increases with interest.
• LFOs create family stress and relationship strains affecting children.
• A cumulated disadvantage is generated—accessing food, housing, employment, and medication, and avoidance of police and other institutions.
• LFOs bring more emotional strain and delegitimizing of the justice system.

The Laura and John Arnold Foundation is committed to funding ongoing research involving primarily an eight-state (California, Georgia, Illinois, Minnesota, Missouri, New York, Texas, and Washington), five-year study of monetary sanctions led by Dr. Harris, which is currently in the first year. One item that is missing is national, systematic court data that would allow us to assess who is being sentenced, who is paying what, and what is the amount outstanding. In one county in Washington, for example, over $750 million is outstanding, but the average annual payment is $39 (again, the first $100 go to the collection fee).

A best practice identified by Dr. Harris’s research is a practice by a judge in Washington who gives credit and reduces a person’s debt if the person receives a General Educational Development certificate. Dr. Harris has also found other courts nationally that are more restorative and allow people to pay off their debt by attending programs that lead to better reintegration into their community. A much talked about best practice is the concept of day fines, which is like a sentencing grid, so the amount of the LFO is proportionate to the offense and what the defendant is able to pay. Some states, such as Ohio and Washington, have issued bench cards outlining what is mandatory and what is discretionary. New court rules (e.g., requiring individualized indigence assessment) and statutes (establishing clear legal criteria for indigence and eliminating non-restitution LFOs) are also changing the landscape of LFOs throughout the country.

There are also a number of best practices in litigation and legislation emerging from Washington. The American Civil Liberties Union (ACLU) of Washington recently settled a case with a county that had some of the most egregious LFO practices, and the Washington State Supreme Court has issued helpful decisions to be cited. The Washington legislature has passed two pieces of legislation with provisional restoration of voting rights (House Bill 1517) and more interest relief options (Senate Bill 5423). Recent Washington legislative efforts include highlighting the disproportionate effects on the poor and communities of color, reducing the 12 percent interest rate, defining terms (criteria for indigence, ability to pay, types of evidence defendants can provide, willful nonpayment), establishing clear alternatives, making LFOs discretionary, and establishing statewide consistency. A comprehensive bill died in 2015 and 2016 in the Washington Senate because of fiscal concerns (erroneous data to persuade legislators) and ideological differences (such as the view that people are choosing not to pay or interest is an incentive to payment or LFOs hold defendants accountable).

What Can You Do?

Here are suggestions of what you can do to make a difference on these issues:

• Watch the Criminalizing Poverty webinar, available at no cost, and reach out to the speakers.
• Share information so court actors and others understand their obligations.
• Work with community groups to educate the public.
• Conduct more research or coordinate with someone who can conduct more research. Having the data gives you the numbers and the power to put behind a movement to change how the system works. Advocates in Washington have used Columbia Legal Services and ACLU reports to push for further reform. The Juvenile Law Center is creating a database to search for LFOs in the juvenile justice system by state, and Harvard Law School’s Criminal Justice Policy Program is examining and seeking to change the adult system.
• Use the media.
• Continue your representation in post-sentencing.
• Provide advice to individuals about LFOs, as Columbia Legal Services has done.
• Challenge these practices in the courtroom when fines are imposed, especially when discretionary.
• Bring constitutional challenges and use the DOJ’s Dear Colleague letter.
• Propose policy and legislative change. Alameda County in California found no benefit to the county of juvenile courts fees, which helped the county pass a moratorium on these fees. Be active on the legislative level also to oppose bills being introduced.