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Wednesday, June 12, 2024 | Back issues
Courthouse News Service Courthouse News Service

Details Sought on Private Prison Settlement

LOUISVILLE (CN) - Prison Legal News asked a federal judge to unseal documents supporting a settlement Corrections Corporation of America reached with employees in a lawsuit accusing it of labor laws violations.

The nonprofit, which publishes a monthly newspaper, claims it needs the documents to report on the ongoing political dialogue about whether private prison operators hide legal settlement expenses and minimize their costs to get prison contracts.

Employees at two prison facilities CCA ran in Kentucky sued the company in May 2012, alleging it violated Kentucky and federal labor laws by misclassifying them and withholding overtime compensation.

CCA denied the allegations, but after more former and then-current employees joined the class action, the parties reached a tentative settlement in November 2013.

A federal judge approved the settlement on Nov. 27 and granted the parties' request to seal exhibits supporting the agreement.

The sealed documents contained information about the amount to be paid to each plaintiff and attorneys' fees and costs.

Although the $131,000 award of attorneys' fees and costs was disclosed, the record provided no details about their allocation, according to court filings.

Prison Legal News last week asked the court to unseal the exhibits, claiming they were crucial to its reporting on issues related to private prison operators' expenses.

Prison Legal News, a project of the Human Rights Defense Center, publishes reviews and analyses of prisoners' rights issues and other prison-related news. It has devoted extensive coverage to the private prison industry, including issues related to CCA, according to its motion in Federal Court. The nonprofit recently moved to Florida from its longtime home in Brattleboro, Vermont.

"Specifically, PLN seeks to review the settlement amounts paid to the plaintiffs in this case to determine the actual financial costs incurred by CCA for its Kentucky operations," Prison Legal News wrote in its motion to intervene. "These amounts are particularly newsworthy because providers of private prison services, including CCA, tout their purported ability to house inmates for a lower per-inmate cost than the state in order to secure valuable state prison contracts. Given that approximately 80 percent of prison operation expenses are due to staffing costs (e.g., salaries, benefits, training, etc.), private prison firms seek to minimize those costs in order to maximize profits. The fact that, here, CCA incurred settlement expenses for what plaintiffs claimed were systemic violations of the FLSA [Fair Labor Standards Act] is relevant (as is the amount of those expenses) to the ongoing political dialogue about whether private prison operators seek to minimize their costs improperly and whether their claimed operational costs adequately reflect their resolution of legal claims." (Parentheses, but not brackets, in original).

Prison Legal News claims its request to intervene, which came less than 10 weeks after the court approved the settlement, is timely and cannot prejudice the original parties.

The court has closed the case, and Prison Legal News does not challenge the underlying claims or the settlement.

Prison Legal News says the sealed records are relevant to public debate on the private prison industry, which is a matter of public concern.

It claims the original parties to the lawsuit have not justified their request to restrict public access to the judicial record.

Prison Legal News is represented by William Sharp with the ACLU of Kentucky.

"CCA has been sued a number of times by its own employees for failure to comply with federal labor laws," Prison Legal News editor Alex Friedmann told Courthouse News in an email. "We successfully intervened in another case in Kansas several years ago to have the settlement in that lawsuit unsealed.

"Such cases demonstrate the business model of private prison companies in terms of cutting costs, including what they pay their employees, as well as the additional costs of prison privatization - such as settlements in these lawsuits (the Kansas settlement was capped at $7 million)."

Attorneys for CCA and the plaintiffs did not respond to requests for comment.

Nashville-based CCA is the largest private corrections company in the United States, with more than 60 prisons across the nation.

The company will pay Idaho $1 million for understaffing that state's largest prison in violation of contract, according to a settlement agreement announced last week.

CCA acknowledged last year that its employees falsified staffing records it gave the state, making it look as though thousands of hours of mandatory guard posts were filled when they were left vacant for months. The vacant posts and phony records violated the company's $29-million annual contract to run the Idaho Correctional Center and a federal settlement agreement reached with inmates who sued claiming the understaffing led to rampant violence.

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