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Lawsuit Challenging Phone Kickbacks at Massachusetts Jail Survives Motion to Dismiss

In December 2018, a Massachusetts federal district court refused to dismiss a lawsuit challenging the cost of phone calls made by prisoners at the Bristol County House of Correction (BCHC). [See: PLN, Sept. 2018, p.36].

Before the court were motions to dismiss filed by defendants Sheriff Thomas M. Hodgson and Securus Technologies, Inc. The lawsuit alleged that Securus was awarded a contract on August 8, 2011 to provide phone services at BCHC. That contract paid the Sheriff’s Office 48 percent of Securus’ gross revenue from phone calls made by prisoners, amounting to $1,172,748.76 in “commission” kickbacks from August 2011 to June 2013.
Rate caps ordered by the Federal Communications Commission in 2013 resulted in an amended contract that gave the Sheriff’s Office a lump-sum payment of $820,000 for the duration of the contract from October 21, 2015 to June 30, 2020.

The complaint claimed that Hodgson was violating state law by requiring Securus to make payments to the Sheriff’s Office beyond the authority the legislature expressly gave the Sheriff to charge. The district court found there was authority for state prisons to collect commissions for phone services, but there was no such authority for sheriffs. Absent such authority, the commission kickbacks at BCHC were invalid.
Other claims in the lawsuit related to allegations of improper collection of revenue. The plaintiffs argued that the inflated phone rates charged by Securus in order to pay commissions to the Sheriff’s Office were without legislative authority, and whether they were considered a tax or fee did not change the fact that they were unlawful. The court denied dismissal of those claims, though it did dismiss a conversion claim against Securus. 

As to the plaintiffs’ argument that Securus had engaged in unfair or deceptive practices under Mass. Gen. Laws CH. 93A, Section 2 and 940 C.M.R. Section 3.16(2), the district court held that claim was well stated because it established that Securus was passing on the cost of its contractual obligations in a manner that helped the Sheriff’s Office circumvent state law. Thus, that claim was allowed to proceed too, though several other claims were dismissed. The case remains pending. See: Pearson v. Hodgson, U.S.D.C. (D. Mass.), Case No. 1:18-cv-11130-IT. 

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Related legal case

Pearson v. Hodgson