Is Texas a red state? More like a red tape state.

Texas has earned a reputation nationwide as a state with a low regulatory climate where any business can flourish, but don’t tell that to Tod Pendergrass and Dana McMichael of Austin.

They have waged a fight for seven years against the Texas Supreme Court for its regulation of the industry of about 3,500 people in Texas who serve court papers. Texas is one of nine states that require state regulation, and the only one that did so by state Supreme Court edict, according to the National Association of Professional Process Servers.

“There is no call from the public that we need protection from process servers,” McMichael says.

Pendergrass and McMichael believe state legislators can undo the court’s action and have raised the issue via a new website, Texas Red Tape Challenge, where citizens can comment “on how to make Texas laws and regulations less burdensome.” The site created by the House Government Efficiency and Reform Committee in July has a forum for public discussion of state occupational licensing issues. Committee chairman Rep. Bill Callegari, R-Katy, said he expects the elimination of some licenses and is seeking public input before the panel meets in November.

Opposed to any targeting of his industry is Carl Weeks, former chairman of the process server licensing board. He said the system is more efficient than that of local constables, who also have charge of serving court papers.

“Citizens should not bear the cost of subsidizing litigation cost. Private process fees are 100 percent paid by the litigants, when process is served in the office of a constable it cost taxpayers enormous dollars and only serves to grow and expand government. … Citizens of Texas are subsidizing the cost of private litigation when constable offices deliver civil process,” Weeks said.

Weeks said the Process Server Review Board provides an essential check on the profession.

“It goes to the deprivation of freedom and personal property interests,” he said. “You can’t get any more foundational than that.”

After about a dozen rejections by Texas lawmakers to regulate the industry, Texas Supreme Court justices created the Process Server Review Board in July 2005. It makes recommendations to justices and can recommend discipline of process servers.

The high court’s move established a cottage industry that requires process servers to take classesand pass an exam to receive a state certificate. The state collects $75 a year from each person who serves court papers. The Office of Court Administration pours the money into the state’s general fund, so far nearly $650,000. The classes are run by four trade groups and one small business.

Pendergrass and McMichael don’t like paying $225 for a three-year certificate, but that’s not the real rub. Both men argue the high court superseded the Legislature to regulate their profession.

“The Legislature never created the Process Server Review Board by statute,” said Pendergrass, who has 24 years of experience as a judicial process server.

“That is a blatant breach of power,” said McMichael, also a more than 20-year veteran of the industry. “If the Legislature can regulate it, the Supreme Court can’t.”

Weeks said the move was appropriate because justices have charge over the operation of the courts.

The licensing of people who deliver court papers adds to the number of people who have to get a state approval to ply their trade.

Consider a study in May from the Arlington,Va.-based Institute for Justice. It gave Texas a mixed grade, with Texas in the top third — 17th — for most burdensome licensing laws, and 32nd most extensively and onerously licensed state.

The study shows 60 years ago only one in 20 U.S. workers needed government approval to pursue their occupation. Today, it is about one in three. “Yet research to date provides little evidence that licensing protects public health and safety or improves products and services. Instead, it increases consumer costs and reduces opportunities for workers,” the Institute for Justice study states.

The study does not identity process servers, guardians and court reporters, all whom must have a certificate to work. A certificate would be the equivalent of a license issued by the Texas Department of Licensing and Regulation. The department will spend about $48 million in 2012-13, and since 1999 the number of licenses it oversees has grown more than five-fold from 116,000 to 655,987, according to the department’s strategic plan.

“There’s been an explosion of occupational licensing,” said Matt Miller, executive director of the Institute for Justice’s Texas chapter. “Rules are typically passed with flimsy evidence.”

Pendergrass and McMichael said they will continue their quest to end the certification of their profession. They want the Sunset Advisory Commission, which has the power to recommend reforms or dismantling of state agencies, to examine the board. Pendergrass believes the board wouldn’t measure up under intense Sunset Commission scrutiny.


Is Texas a red state? More like a red tape state.
Curt Olson/Texas Watchdog
September 10, 2012

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