A federal judge in the Middle District of Tennessee has ruled that Tennessee’s practice of suspending a driving license to compel the collection of delinquent court debts is unconstitutionally unfair to poor people. She has ordered Tennessee to stop and to start restoring the licenses of people who simply could not pay, but an appeal is likely.
Similar cases are pending elsewhere including one in Virginia which was dismissed but is going back on remand. More than 40 states use the method in some form. I have not yet been able to find the judge’s written opinion on line, but back in March she issued a memorandum laying out her likely reasoning for a summary judgement in favor of the debtors.
“The fact that it is difficult to collect debts from very poor debtors is a reality faced by people and entities, both public and private, in a wide array of circumstances; indeed, it is a problem as old, presumably, as debt itself,” she wrote.
Also: “Tennessee’s system has the actual effect of imposing a harsher punishment on indigent defendants than on non-indigent defendants based solely on their economic circumstances. A non-indigent defendant has a choice: pay or lose his license. Drivers like (plaintiffs) Thomas and Hixson, they argue, have no such choice. The plaintiffs challenge this differential treatment as unconstitutional pursuant to 42 U.S.C. § 1983.”
The plaintiffs also argued that license suspension is not an option for the collection of private debts, only court debts, 1s further evidence it was not fair.
My introduction to this issue came as the lobbyist for several Virginia law firms doing collection work for various local courts. About five years ago, in budget language that simply appeared in a final state budget document, an additional 17% fee was tacked on to all accounts sent out for collection. The attorney who initially contacted me wanted to know where that anonymous proposal came from, in part because he knew it made it harder for debtors to pay up.
In response to the pending Virginia case, the Virginia Supreme Court directed local courts to allow payment plans that took the defendant’s ability to pay into account. It is not clear whether that was the case in Tennessee or if that is a solution it may propose. It is also not clear yet if that has allowed more Virginians to get their licenses back. It is estimated that one in six Virginians have lost their license over unpaid fines and fees (which do not have to be driving-related at all).
The harsh reality is that state and local governments love this revenue. More than $470 million in fines and fees were assessed in Virginia’s courts in 2017, and more than $200 million were judged delinquent. As high as the basic fines have become, the processing fees and interest magnify the problem in delinquent cases. An annual state report tracks the collection of delinquent fines by the clerks, local commonwealth’s attorneys, local treasurers and a small group of private collectors. It does not appear that collections dropped off in 2017 because of the payment plans.
The even harsher reality is the opponents of this system are right that it ultimately is counterproductive to expect somebody who cannot afford to pay to dig themselves out of debt without basic transportation, which for most means a car. The end of this approach may be in sight, although the judge in her initial memorandum didn’t believe the system was unfair in the case of people who did have the ability to pay. Who decides what, and who is poor enough to be protected from that collection method? It will probably just go away.