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Corrections Corporation of America Held in Contempt of Court for Falsifying Records at Idaho Prison

On May 23, 2016, the United States Court of Appeals for the Ninth Circuit affirmed an Idaho federal district court ruling that found Corrections Corporation of America (CCA) -- a private prison company -- in contempt of court for failing to comply with a settlement agreement when the company was caught falsifying reports related to staffing numbers at its Idaho prison. The Ninth Circuit's decision is now final as CCA has declined to seek review of the ruling by the Supreme Court.

CCA runs the state-owned Idaho Corrections Center (ICC) in Kuna, Idaho. In March 2011, a lawsuit was filed against CCA alleging that ICC was inadequately staffed resulting in a dangerous environment that can and did fail to protect the prisoners from assault and other physical violence. In a settlement agreement signed in September 2011, CCA agreed to a specific number of increased custody staff, including a three-person "Warden's Crew," which would be available to enhance security response time. The agreement was for two years and required CCA to issue staffing reports to prove compliance with the settlement.

Just over a year later, however, Idaho Department of Corrections (IDOC) officials began to receive reports that ICC had been falsifying the staffing numbers. An investigation determined that ICC had overreported a total of nearly 4,800 staffing hours during a seven month period in 2012.

In June 2013, the plaintiffs, represented by ACLU attorneys Stephen Fever and Ritchie Eppink, asked the district court to hold CCA in contempt of court for falsifying the records and violating the settlement agreement. After a two-day hearing, the district court agreed and issued an order holding CCA in contempt of court. The court found that ICC warden Timothy Wengler intentionally understaffed the prison in direct violation of the settlement agreement and then issued reports intended to cover up that fact, and knew or should have known it was in material breach of the agreement.

The district court ordered a number of remedial measures, including extending the agreement for an additional two years, appointing an independent monitor at the expense of CCA, and establishing a fine schedule. According to the fine schedule, CCA would be penalized $100 for each hour a mandatory post was left unfilled in excess of 12 hours. Finally, the district court awarded attorney's fees and costs to the ACLU lawyers just in excess of $440,000.

CCA appealed the district court's order, findings, and award of attorney's fees, but the Ninth Circuit affirmed in all respects.

CCA first contended that the contempt finding was unjustified because it took "all reasonable measures" to comply with the settlement agreement once it realized it was out of compliance. The Ninth Circuit dismissed this argument, finding that CCA "failed to actually fill a substantial number of" the staffing positions it had agreed to, and knew or should have known the records were falsified.

CCA also objected to the two-year extension of the agreement and the fine schedule. But the court said that because the settlement agreement required CCA to maintain a certain level of staffing for two years, and it failed to do so, the extension of the agreement for two more years was a reasonable civil sanction that merely placed plaintiffs in the position they would have been in had CCA complied with the agreement in the first place.

The appellate court also ruled that it had no authority to rule on the fine schedule because the district court "never actually imposed fines." Informing CCA of possible fines is not a "final" appealable ruling and may not be challenged unless and until the court actually imposes the fine, the Ninth Circuit held.'

Finally, in affirming the award of attorney's fees, the court rejected CCA's position' that the 200% multiplier was unjustified under the Prison Litigation Reform Act. "The district court did not abuse its discretion in enhancing the attorney's fees award to ensure that it was adequate to attract competent counsel in comparable cases" in the future, the court wrote. See: Kelly v. Wengler and Corrections Corporation of America, Inc., No. 13-35972, 882 F.3d 1085 (9th Cir. 2016).