Smithfield attorney Lamar Armstrong is fed up.
Tired of being gouged by court reporters for the past three decades, he finally decided to sue about it after getting a $736 bill for an emailed copy of a transcript of a client’s deposition.
The client, Crystal Danielson, is the named plaintiff in a complaint filed May 10 in Johnston County Superior Court against Veritext Corporate Services, Inc. But this is very much Armstrong’s battle.
“This is a matter that was stuck in my craw for years and I decided to do something about it,” he said. “Every court reporter that I’ve dealt with in my 30-plus years of practicing sets copy pricing at a profit basis. This has been going on for decades, and they just keep upping their prices.”
Armstrong argues in the suit that Veritext, a New Jersey-based company that hires court reporters as independent contractors, violated Rule 30 of the North Carolina Rules of Civil Procedure. The rule states that court reporters must provide transcript copies in exchange for “reasonable charges.”
That key phrase – reasonable charges – is not defined in the rule and Armstrong says our state’s courts have never interpreted the language. He has asked the court to declare that a reasonable charge be “based on the administrative expense associated with providing the transcript for which the party taking the deposition already paid.”
He added that other states have established cost-based definitions of a reasonable charge for copies of transcripts, which he equates to medical records. North Carolina law already caps what health care providers can charge for medical records at 75 cents per page. Most court reporters charge $2.75 a page for copies.
The complaint against Veritext also seeks treble compensatory damages, attorney’s fees and costs totaling more than $25,000.
Armstrong’s argument hinges on the understanding that court reporters act as officers of the court and do not own the transcripts they’re selling, he says, at “outrageous” prices for profit.
“Veritext was inequitably leveraging its position and power in an unfair, deceptive and oppressive, and substantially injurious manner to force Crystal [Danielson] to pay more than what she owed,” he wrote in the complaint.
Danielson paid Veritext under protest following an email exchange in which Armstrong questioned Christine Catalano, who works in the company’s client services and billing department, about the bill.
As an aside, Veritext has a national contract with Liberty Mutual to provide court reporters for the insurer. Liberty Mutual insured a construction company that Danielson sued, and Veritext provided the court reporter when the defense deposed her. Liberty Mutual paid for the original transcript.
Most court reporters in North Carolina operate alone or through small businesses, according to Armstrong. But he added that, in his experience, the fees they charge for copies are within the same range as what Veritext charged Danielson.
In his email exchange with Catalano, Armstrong asked how Veritext set pricing for copies and whether the company believed that it had a copyright or ownership interest in the transcripts.
“Veritext is setting a price essentially for selling a copy of something it has been paid by another party to produce,” he wrote. “Does Veritext believe it has a right to treat the transcript as something it owns and is entitled to sell or, if no sale is agreed to, is entitled to protect?”
In her response, Catalano wrote that Veritext does “not disclose its rates to you or anyone” but felt that its prices for copies “are reasonable charges based on the type of deposition, location, level, etc., of service(s) we provide.” She added that it was unclear who owns transcripts.
She offered to reduce the charge from $736 to $612 by lowering the per page copy rate from $2.75 to $2.50, removing a $42 charge for a CD containing an electronic copy of the transcript (Danielson did not want a CD) and waiving a shipping and handling charge and $26 electronic delivery charge – for emailing the copy.
Armstrong also questioned why Danielson was being charged per page for an electronic copy of a transcript that never had to be printed. But he did not receive a response.
“I was really trying to force the issue with the emails, to lay it out there,” he said. “But I could never get them to answer the question about why they charged that much money for something they don’t own. They just kept doing the two-step with me.”
Catalano said in a phone interview that Liberty Mutual does not receive a discount on the cost of the original transcript and would have to pay the same price as Armstrong or his client if it wanted a copy.
“He wasn’t charged more because he’s plaintiff’s counsel and we’re trying to rip him off,” she said. She referred further questions to Veritext’s in-house counsel, Judith Kunreuther, who was unable to comment before press time.
Veritext had not answered the complaint, which could have significant implications for court reporters throughout North Carolina. An attempt to talk about the case with Cindy Hayden, president of the N.C. Court Reporters Association, was unsuccessful.
Armstrong believed that court reporters are using copy charges as an “extra profit center.” But he said he’s been told that reporters have to make money off the copies based on how they price the originals.
“Then the answer is to set your originals at whatever cost you need to generate the profits you want,” he said.
Follow Phillip Bantz on Twitter @NCLWBantz