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Update on Missouri Incarceration Reimbursement Act Case

Prison Legal News previously reported a decision by the Bankruptcy Appellate Panel for the Eighth Circuit, which held that a Missouri bankruptcy court was correct in concluding that state prison officials did not violate a discharge injunction by collecting money from a prisoner’s account for incarceration costs that accrued after the injunction was filed.

In 2009, Missouri prisoner Zachary A. Smith was initially ordered to pay $87,830.13 to cover the costs of his incarceration through March 2007 under the Missouri Incarceration Reimbursement Act (MIRA), plus future costs that accrued until his release from custody. He filed a Chapter 7 bankruptcy petition in 2010 and received a discharge in March 2011, effectively voiding the MIRA judgment.

In September 2012, however, prison officials seized funds deposited into Smith’s prison account for costs that had accrued after he filed for bankruptcy. Smith sought a contempt ruling from the bankruptcy court, alleging the state had violated the discharge injunction. The bankruptcy court agreed that the MIRA judgment was void with respect to costs accrued as of the date of the bankruptcy filing, but held the judgment remained valid as to future incarceration reimbursement costs. The Eighth Circuit affirmed on February 5, 2013. [See: PLN, Feb. 2014, p.11].

Smith then filed a Rule 74.06(b) motion in circuit court, arguing that the state could not seize assets from his prison account for MIRA judgments that were unknown at the time of the MIRA hearing, citing State ex rel. Koster v. Cowin, 390 S.W.3d 239 (Mo. Ct. App. 2013) and State ex rel. Koster v. Wadlow, 398 S.W.3d 591 (Mo. Ct. App. 2013).

In a March 6, 2014 letter to PLN, Smith wrote: “The Chapter 7 [bankruptcy] was necessary to discharge the MIRA debt, but I had to argue that the AG’s office could not be reimbursed with assets that were not identified and not known at the time of the MIRA hearing – meaning the AG could not impose future costs for incarceration against me unless it was shown to come from a current stream of income” that existed when the MIRA judgment was entered.

The state conceded, filing a satisfaction of judgment in the circuit court on October 16, 2013, and the MIRA liens against Smith were subsequently removed. Smith, who handled the litigation pro se, noted that Missouri prisoners facing MIRA judgments can successfully challenge them. See: State of Missouri v. Smith, Cole County Circuit Court (MO), Case No. 07AC-CC00109-01.

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