Monday, November 30, 2020, was a big day for a group of Georgia prisoners suing their phone service provider, Global Tel*Link (GTL), over the company’s allegedly hidden policy of confiscating any unused funds in their accounts after 90 days.
U.S. District Court Judge Amy Totenberg granted the suit class action status and smacked GTL with sanctions — including the cost of plaintiffs’ legal fees — after finding the firm had played fast and loose with legal rules. (See related story on this page.)
The case potentially sets the stage for a second large judgment against GTL in just a few months. In October 2020, a federal judge in New Jersey approved a $25 million settlement to satisfy a class-action suit filed in 2011 by prisoners in the state. In that case, the court found GTL guilty of receiving kickbacks from overly inflated prices, charging its prisoner customers as much as 100 times the going rate for a call (See PLN, Dec. 2020, p. 24).
The Georgia prisoners filed their suit in 2015, accusing GTL of violating the Federal Communication Act, as well state laws against breach of contract and unjust enrichment. At issue was the firm’s habit of cleaning out prisoner phone accounts after 90 days of disuse, which GTL calls its “breakage policy.”
Under this policy, the company employed software known as a “breakage calculator” to scan prisoners’ phone accounts — all of which are pre-paid — flagging those that had not been used in 90 days (or 180 days in certain jails and prisons). Flagged accounts were immediately placed on “inactive” status, meaning the prisoners could not receive any more calls, even though there was money left in their accounts. Then GTL snatched the money from the account and added it to its unrestricted revenue account.
Depositions provided by GTL indicated that, between 2008 and 2017, the firm collected $110 million in unused prisoner account funds— money GTL did nothing to earn, but which it nevertheless said it was entitled to keep. The reason, the company claimed, was that prisoners had been given a recorded audio notice of the policy during the automated procedure by which they set up their accounts.
But that turned out to be a lie.
The firm had actually removed the audio warning from its set-up script in 2014. And as the lawsuit progressed, GTL repeatedly obfuscated that fact with doctored documents and testimony.
“GTL insisted, over and over again in different variants, that this lie was the truth,” Judge Totenberg fumed, resulting in “significant delays and detours in reaching the merits of this case.”
She imposed sanctions on the firm because of the “significant litigation harm” suffered by the prisoner plaintiffs as a result of “GTL’s course of gamesmanship.”
In the New Jersey case, another federal District Court judge, William J. Martini, also granted class-action status to include “all 55,000 currently incarcerated GTL customers.” He ruled that they were entitled to relief from the $25 million settlement fund for the amounts by which they were overcharged. The settlement was delayed about five months after it was reached in May 2020 while attorneys for plaintiffs in the Georgia case petitioned Judge Martini to ensure that any judgment they won would not preclude them from getting reimbursed by the New Jersey fund to remedy GTL’s price-gouging.
In certifying the Georgia prisoners’ class-action, Judge Totenberg included anyone who had set up a pre-paid account with GTL after April 2011 to receive phone calls from prisoners in Georgia or South Carolina. But she did not rule out expanding the class to include GTL customers in other states — or even in the whole nation.
“The court recognizes that plaintiffs have submitted evidence that the breakage policy is relatively uniform nationwide,” the judge found.
Incorporated in Delaware and based in the Washington, D.C. suburb of Falls Church, Virginia, GTL reported over $318 million in 2019 revenues from prisoners in 2,200 facilities across 48 states, making it one of the largest players in a $1 billion market for prisoner telecommunications.
There was no comment on Judge Totenberg’s ruling by GTL nor its attorneys: Michael Sklaire, Michael King, John Crisham and Robert Herrington of Greenberg Traurig; Josh Belinfante and Jeremy Littlefield of Robbins Ross Alloy Belinfante Littlefield; and Derek Ho and Benjamin Softness of Kellogg, Hansen, Todd, Figel & Frederick.
In a statement, plaintiffs’ attorneys — Michael Caplan, James Cobb and T. Brandon Waddell of Caplan Cobb; James Radford of Radford & Keebaugh; and Andrew Lynch — said that they “look forward to obtaining a full recovery of the money Global Tel*Link wrongfully took from its customers.” See: Githieya v. Glob. Tel*Link Corp., Case No. 1:15-cv-986-AT, U.S.D.C. (N.D. Ga.).
Additional source: law.com
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Related legal case
Githieya v. Glob. Tel*Link Corp.
|Case No. 1:15-cv-986-AT, U.S.D.C. (N.D. Ga.)