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California Court of Appeal Upholds Dismissal of Challenge to Excessive Jail Phone Rates as Unconstitutional Tax

by Matt Clarke

On April 28, 2020, a California court of appeal affirmed the judgment of a lower court sustaining the demurrer of nine counties that were sued by jail prisoners and their families as a challenge to excessive jail phone rates as an unconstitutional tax under Proposition 26.

The counties contracted with telecommunications providers that are not parties to the lawsuit to have an exclusive right to provide prisoner telecommunications services in exchange for a percentage — generally over half — of what the companies charge for the calls. Los Angeles County is typical in that it receives the greater of 67.5% of the charges, or $15 million annually. The rates are exorbitant but, under Penal Code § 4025, the counties are required to deposit their commissions in an inmate welfare fund.

Plaintiffs alleged the commissions were an unlawful tax that violated the California Constitution because none of the commissions had been approved by voters. Proposition 26 (Art. XIII C, § 2, Cal. Const.) makes all taxes imposed by local entities subject to voter approval with seven exceptions.

The defendants filed a challenge to the legal sufficiency of the complaint called a demurrer. The basic premise was that the plaintiffs were not the people who were paying the governmental entity, so they had no standing to challenge the tax. The trial court sustained the demurrer.

Aided by attorneys Ronald O. Kaye and Barrett S. Litt of Kaye, McLane, Bednarski & Litt and Michael S. Rapkin and Scott B. Rapkin of Rapkin & Associates, plaintiffs appealed. The Human Rights Defense Center, which publishes PLN and CLN, filed an amicus brief in the case.

The court of appeal noted that “the general rule is that a person may not sue to recover excess taxes paid by someone else. Plaintiffs may have paid exorbitant charges to the telephone provider, but they did not make any payment to the county and they had no legal obligation to do so.” Therefore, the Court agreed with the trial court that the plaintiffs lacked standing and should seek relief from the legislature.

“We do not agree with plaintiff that, because the counties are unjustly enriched by their contracts with the telecommunications companies, we should provide inmates a remedy for the exorbitant telephone charges they must pay. It is the legislative branch, not the courts, that must provide that remedy…

“In the end, the pertinent point is that no precedents support plaintiffs’ claim that a consumer who pays charges to a third-party vendor—including one that has inflated its prices to recover the cost of a tax it pays to a local government—has standing to seek a refund of those charges from the taxing authority.”

Plaintiffs had also argued there was a disparate effect on Blacks and Latinos, compared to the overall population, in violation of California Government Code § 11135, because they were disproportionately represented among the jail prisoners. The court rejected that argument, noting that the comparison should have been with other prisoners’ families, not the general population. Plaintiffs made no claim that Black and Latino prisoners and their families were treated differently from other prisoners and their families, so no disparate treatment was alleged.

Further, the Legislature established a basis for treating prisoners’ families different from other taxpayers in Penal Code § 4025. Also, there was no coercion shown to support a claim under the Bane Act, Civ. Code § 52.1. Therefore, the judgment of the trial court was affirmed. See: County Inmate Telephone Service Cases, Cal. App., Second District, Case No. B291341.

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Related legal case

County Inmate Telephone Service Cases