Revoking Licenses for Failure to Pay: Is Change on the Horizon?

The revocation of driver’s licenses for unpaid court costs and fines has been a hot topic of late. Much of the focus has centered around the spiral of debt that can result when an indigent person’s license is revoked for this reason. The narrative goes like this:  The person is convicted of a relatively minor violation of the motor vehicle laws. Court costs and a fine are imposed. The person, who is financially unable to do so, fails to pay those amounts. Forty days after the judgment, the clerk of court reports the failure to pay to DMV.  DMV mails a revocation order to the person, which becomes effective 60 days later.  The person could forestall or end the revocation by paying the amounts owed, but she lacks the funds to do that. Yet she must drive in order to keep her job.  So, notwithstanding the revocation, she continues to drive. Soon, she is charged with driving while license revoked and is convicted.  Court costs are imposed again.  And again, she lacks the funds to pay. DMV issues another revocation. When this cycle repeats itself over time, the person may wind up owing hundreds – or even thousands – of dollars in court debt, which, again, she lacks the resources to pay.

Why do we have this law? The statutory requirement that a person’s driver’s license be revoked for his or her failure to satisfy monetary obligations imposed upon conviction of a motor vehicle offense was first enacted in 1985. The sanction accompanied the reclassification of certain minor traffic violations as a new type of non-criminal violation, termed an infraction. Because persons found responsible for infractions could not be placed on probation or ordered to jail, the legislature recognized the need for other measures commensurate with the petty nature of such offenses to ensure that persons found responsible for infractions complied with court-ordered monetary sanctions. Payment of costs and fines was thus tied to a person’s ability to remain licensed to drive. Today, the administrative license revocation provisions enacted in 1985 are codified, as amended, at G.S. 20-24.1 and G.S. 20-24.2.

Have such license revocations been challenged? North Carolina is not the only state to impose license revocation as a consequence of nonpayment of court-imposed monetary obligations. And lawsuits have been filed challenging these laws in North Carolina and elsewhere. Last summer, the United States District Court for the Middle District of Tennessee struck down Tennessee’s statute revoking driver’s licenses for failure to pay court debt on the grounds that it violated the due process and equal protection clauses of the US Constitution. Thomas v. Haslam, 329 F. Supp.3d 475 (2018). The court concluded that Tennessee’s statutory scheme could not survive rational basis scrutiny.  In fact, the court deemed the entire scheme counterproductive to the government’s attempt to collect its debt, reasoning:

If a person has no resources to pay a debt, he cannot be threatened or cajoled into paying it; he may, however, become able to pay it in the future.  But taking his driver’s license away sabotages that prospect. For one thing, the lack of a driver’s license substantially limited one’s ability to obtain and maintain employment. Even aside from the effect on employment, however, the inability to drive introduces new obstacles, risks, and costs to a wide variety of life activities as the former driver is forced into a daily ordeal of logistical triage to compensate for his inadequate transportation. In short, losing one’s driver’s license simultaneously makes the burdens of life more expensive and renders the prospect of amassing the resources needed to overcome those burdens more remote.

Id. at 483-84.

The Thomas court also determined that the Tennessee plaintiffs were entitled to an opportunity to assert their indigence before the revocation was issued.  A large number of individuals facing revocation are indigent, the court reasoned. Thus, a pre-deprivation hearing is necessary to avoid erroneous deprivations; moreover, the government has little interest in avoiding the slight delay associated with affording such a hearing.

North Carolina’s statute has a safety valve. G.S. 20-24.1(b) provides that a license revocation imposed for failure to pay monies owed in a motor vehicle case ends when the person demonstrates to the court that his failure to pay was not willful and that he is making a good faith effort to pay or that the fine or penalty should be remitted. My sense is that this provision is not used very often, and I don’t think there are any standard petitions for hearings to make such a demonstration to the court.

In addition, the safety valve appears in the revocation statute, not the reporting statute. Thus, it appears to contemplate a post-revocation determination, though I suppose that a person could seek to demonstrate his indigency to the court after the report is sent to DMV but before the revocation goes into place. The timing is of practical as well as perhaps constitutional significance since a person seeking reinstatement of his or her license following a revocation must pay a $65 restoration fee. G.S. 20-7(i1).

Legislative proposals to change the narrative.  In 2015, the North Carolina General Assembly eliminated the additional license revocation period that was tacked on when a person was convicted of driving while license revoked so long as that person was revoked for something other than impaired driving.  See S.L. 2015-186, as amended by S.L. 2015-264. That legislation ended the endless cycle of revocations that often followed an initial revocation for failure to appear or pay monies oweed in a motor vehicle case.

This session, several bills have been introduced in the N.C. General Assembly that would change the current procedure for revoking a person’s driver’s license for failure to pay court debts in motor vehicle cases in the first place. The proposals suggest three types of changes:  (1) eliminate altogether the revocation for failure to pay (S 643); (2) require that the court determine at sentencing whether the defendant has the ability to pay the financial obligations imposed; only if the court makes a finding of ability to pay and good cause to suspend the license may the license be suspended following failure to pay (H 909, S 494); and (3) permit a person whose license is revoked for failure to pay monies owed to the court to obtain a limited driving privilege (H 853, H 211).

It remains to be seen whether and how North Carolina law on revocation for nonpayment may change. But given that there were more than 80,000 license revocations in North Carolina last year for failure to pay monies owed in motor vehicle cases, plenty of people appear to have a stake in the outcome.