Orleans courthouse

Orleans Parish Criminal District Court is undergoing renovations including for removal of asbestos and lead in New Orleans, La. Thursday, March 2, 2017.

Federal judges delivered a one-two gut punch to the New Orleans criminal court system this month, declaring that judges have an inherent conflict of interest both when they set bail amounts and when they impose court fees that pad their budgets.

The twin rulings against Magistrate Judge Harry Cantrell and the 12 Criminal District Court trial judges portend major changes at the courthouse — and problems for its coffers.

But they also present a rare opportunity for reform: The advocates who brought the lawsuits hope the decisions will end the courts’ longstanding practice of raising revenue on the backs of the poor.

Yet what happens next is anyone’s guess. U.S. District Judges Sarah Vance and Eldon Fallon’s decisions were long on constitutional law principles and short on practicalities. Barring a successful appeal, it will be up to the state judges themselves to usher in change.

Roughly $2 million is at risk, nearly half of the court system’s so-called discretionary budget. The question is whether the judges will dismantle the current, “user pays” system, or whether they will manage to tweak their policies just enough to satisfy the U.S. Constitution and the federal judges who cried foul.

And while the federal lawsuits targeted only New Orleans, the rulings could ripple across court systems around Louisiana that generate income in a similar fashion.

“It’s uncharted territory, really. There’s not a clear path forward,” said Alec Karakatsanis, an attorney who helped bring both lawsuits against the Orleans court system. “What’s clear is they can’t keep doing what they’re doing.”

City Councilman Jason Williams, a criminal defense attorney and chairman of the council's Criminal Justice Committee, said he had been expecting the court decisions for months.

“I hope this doesn’t encourage us to try and come up with clever workarounds, but really engage in figuring out if this system is working the way that we need it to work,” he said.

A hole in the budget

A sword has been dangling over the state judges’ heads since September 2015, when attorneys at Karakatsanis’ nonprofit law firm, Civil Rights Corps, as well as the Lawyers’ Committee for Civil Rights Under Law, brought a lawsuit against the judges of Criminal District Court.

The dollar amount fluctuates from year to year, but fines and fees imposed after convictions now generate about $1 million a year in revenue for the New Orleans court system, or a quarter of its discretionary budget.

The court’s revenues are split between a restricted fund, which goes toward expenses like judges’ salaries and administering the jury pool, and a general or discretionary fund, which covers expenses like staff salaries and office supplies.

In 2017, the court’s total revenue was $8.7 million, which was split almost evenly between the two funds. The state supports the restricted fund, which means court fines and fees do not directly pay judges' salaries. But $2.3 million of the $4.5 million general fund came from charges like bail fees and court costs. The court spends the lion’s share of that general fund money, 80 percent, on salaries and benefits for staffers like minute clerks and law clerks.

The plaintiffs in the federal lawsuits said the fines and fees assessed against defendants violate a 1983 U.S. Supreme Court decision that said it was unconstitutional to jail people solely for failing to pay court costs, unless it can be shown that they willfully avoided doing so when they were able to pay.

The judges’ legal and financial jeopardy only mounted in June 2017, when civil rights firms brought a second lawsuit, this one against Magistrate Judge Cantrell. That suit targeted bail fees on the same grounds. Suddenly, another $1 million chunk of the court system’s budget was in danger.

It's not just the court itself that could be gashed. According to a January 2017 analysis by the Vera Institute of Justice, several other criminal justice agencies rely heavily on bond fees and court fines that are split with the courts.

For instance, the Orleans Parish District Attorney’s Office took $614,000 from bond fees and conviction fees in 2015; the Orleans Public Defenders received $493,000; and the Sheriff’s Office got about $561,000.

The judges themselves have expressed frustration with the practice of using fines and fees to support the criminal justice system. They know that the defendants who pass through their courtrooms are overwhelmingly poor. But they have argued that the federal courts were not the proper venue to change a system created by the Louisiana Legislature.

“Plaintiffs do not like the fact that the judges have statutory discretion to assess and collect (fees) and operate and administer the court,” the judges said in one legal filing. “In short, a person complaining about these issues should go to Baton Rouge and not to federal court.”

Vance, who was nominated to the federal bench by President Bill Clinton, telegraphed her decision in December, when she declared that it was unconstitutional for judges to set fines and fees when their own budget was at stake. She expanded upon that ruling on Aug. 2, and Fallon, also a Clinton nominee, chipped in with his similar ruling against Cantrell on Aug. 6.

Vance said this month that defendants must have the chance to plead poverty in a "neutral forum" before they are arrested for failure to pay.

Fallon declared the current system for setting bail on state charges to be unconstitutional because Cantrell has a conflict of interest when a fee on the bail bond goes toward his court’s budget.

He added that in the future, the court system must conduct a full hearing on an arrested person’s ability to pay bail; give consideration to “alternative conditions of release,” such as a recognizance bond; and provide an attorney for arrestees at their first bail hearing.

Short on specifics

Yet anyone searching for specific advice on implementing the decisions would be disappointed. Federal judges are generally limited in how far they can go in ordering their state counterparts to take specific steps.

“They can order them to stop treating (defendants) unconstitutionally. But if Louisiana doesn’t want to fund its court system, the federal court can’t make it do that,” Karakatsanis said.

New Orleans' judges have so far declined to comment on the rulings. They are set to meet with their attorneys and accountant Tuesday to discuss their next steps.

The judges could appeal the court’s ruling to the 5th U.S. Circuit Court of Appeals. However, a three-judge panel from the 5th Circuit in February upheld a similar ruling against the bail system in Harris County, Texas.

The local judges had already taken some steps to change their practices before the latest rulings came down. After Vance’s December ruling, the Criminal District Court judges adopted a checklist on a defendant’s ability to pay, and Cantrell has promised to conduct more detailed examinations into arrestees’ finances. Meanwhile, magistrate commissioners have greatly expanded the use of releases on recognizance — that is, without posting money — for minor state crimes.

But Vance's and Fallon’s decisions make clear that any system where the judges assess fees that pad their budgets will not pass constitutional muster.

Going forward, the judges could try to figure out a way to maintain the “user pays” system while removing the conflicts of interest. Or they could attempt to find an alternative revenue source altogether.

State judges in Orleans, Jefferson and Terrebonne parishes found themselves in a strikingly similar position in 1991, after a federal court struck down a 2 percent bond fee the courts used to shore up their budgets. Ultimately, however, the courts engineered a workaround where bail fees went into a fund that was shared among a number of criminal justice entities.

“They just found an indirect way to do what they couldn’t do directly,” said Jack Dveirin, who filed the lawsuit that led to the 1991 decision with legendary civil rights attorney Sam Dalton.

Dveirin recalls that, years later, he was called for jury duty in Judge Frank Marullo’s courtroom. When he notified the judge that they had once been on separate sides in the federal bond fee lawsuit, Marullo remembered their connection.

“It shut us down for a while. Then we went to the Legislature and got the statute changed,” Dveirin recalls Marullo saying. 

“They did an end-run, so to speak,” Dveirin said. “They still got the 2 percent, but the 2 percent was assessed on the bail bondsmen, and it didn’t go directly into a fund that the judges administered.”

Dveirin said he is pessimistic that the latest federal court rulings, so similar to the one he won more than a quarter-century ago, will finally kill the “user pays” system.

Others, like Williams, are more hopeful.

“I think this ruling is a very good and big wake-up call for the fact that the system is upside down, and the system is not operating in a morally just way at times, nor is it operating in a fiscally sound way,” he said.

Money from 'someplace'

Williams said estimates that the decisions will carve a $2 million hole in the court's budget are "maybe even a little low.” He has already engaged in conversations with the judges and Mayor LaToya Cantrell’s office about how to proceed, he said.

He doubts that the Legislature, which is managing a perpetual budget crisis of its own, will be eager to send money to courts in New Orleans. A funding fix at the state level could also come with a major catch, he warned. For years, some state legislators have proposed merging the city's criminal and civil courts, which Williams opposes.

The local judges have warned in the past that if the lawsuits succeeded, the city would be on the hook to make up the resulting shortfall. Criminal District Court Judge Franz Zibilich put his fears about the first lawsuit in dire terms when he appeared before the City Council at one budget hearing.

“The unfortunate thing is we’re going to be back looking for help from you all as a direct result of this lawsuit,” he said. “If we are handcuffed in that particular regard, that money replacement’s going to have to come from someplace.”

However, Williams said he hopes New Orleans can use the current challenge as an opportunity to re-evaluate its entire criminal justice system. He said the city can save money by putting fewer people in jail and prosecuting fewer minor offenses, while expanding mental health and addiction services.

“This is an opportunity to really decide what we want to prosecute … what we want them spending time on in court,” he said. “We might find that putting the criminal justice system on a diet in this way is going to get us better results.”

Cutting down the courts’ caseload could require persuading other stakeholders like District Attorney Leon Cannizzaro. Yet Cannizzaro has defended his office's high case-acceptance rate as a necessary tool in the fight against crime, and he was not covered by the federal court decisions.

Critics have painted the advocates pushing the lawsuits as radicals without a positive plan of their own for funding court operations, other than by taxing law-abiding citizens. Some in the bail bond industry also argue that the current bail system helps guarantee defendants will show up for trial.

At a typical hearing in Magistrate Court, Cantrell spends just a few seconds asking a defendant some basic questions about their ability to pay, such as whether they have a job and how much money they make a week.

Madro Bandaries, an attorney who has represented insurance companies in the bail industry, said bails are set at a breakneck pace because the system is designed that way. “It has to be done that fast only because of the number of people. It’s a busy courthouse,” he said.

Bandaries said an individualized bail hearing for every defendant would “complicate the hell” out of the current system, although he saw no alternative in a city with as much crime as New Orleans.

“Contrary to popular opinion, the Police Department doesn’t go out and just arrest people for no reason. The majority of people arrested have committed a crime,” he said. “This is going to confound in Orleans Parish a criminal system that is already on the ropes.”

Follow Matt Sledge on Twitter, @mgsledge.

msledge@theadvocate.com | (504) 636-7432