Skip navigation
× You have 2 more free articles available this month. Subscribe today.

Preliminary Injunction Bars Arkansas from Confiscating Prisoners’ COVID Stimulus Money

by David M. Reutter

An Arkansas federal district court issued a preliminary injunction that bars the Arkansas Department of Corrections (ADC) from carrying out a state law that confiscates prisoners’ stimulus money and distributes it to the state.

The Court’s September 3, 2021, order was issued in a lawsuit brought by ADC prisoner Anthony Lamar. As the COVID-19 virus hit the United States, Congress responded to the halting of the economy by passing the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) on March 27, 2020. For purposes of Lamar’s lawsuit, the most noticeable part of the CARES Act was a $1,200 payment to every American adult with an income below $75,000. Those payments were commonly known as stimulus checks.

Congress passed two more stimulus bills in the next year. The December 27, 2020, Consolidated Appropriations Act (CAA) included a $600 stimulus payment or tax credit. Then, on March 11, 2021, Congress approved a $1,400 stimulus payment or tax credit with the American Rescue Plan Act.

Prisoners fell under the definition of persons eligible to receive stimulus checks. The Internal Revenue Service originally declined to send stimulus payments to prisoners, but a California federal district court entered a permanent injunction in a nationwide class action requiring distribution of stimulus payments to prisoners. [See: PLN, Nov. 2020, p. 24; Scholl v. Mnuchin, 494 F.Supp.3d 661 (N.D. Cal. 2020)].

The Arkansas General Assembly believed that money could be put to better use by the state. It passed Arkansas Act 1110. It instructs ADC officials to withhold stimulus checks received by prisoners and use the funds in one of two ways. First, the funds must be used to pay off a prisoner’s court fines, fees, costs, or restitution if the ADC is aware of such debts. If a prisoner did not owe such debts or if there was any stimulus funds left over after those debts were paid, the excess funds must be distributed equally to the “inmate welfare fund” and the Division of Correction Inmate Care and Custody Fund Account.

Under that law, ADC had collected, as of the Court’s order, $3,503.095.56 with more on the way. Of that, it has paid $461,630.32 towards court fines, fees, costs, or restitution. ADC confiscated $1,395 of Lamar’s $1,400 to pay off liens against his prisoner account under ADC Administrative Directive 16-44. While he challenged the constitutionality of that Directive, it was not an issue in the preliminary injunction. What was at issue is Lamar’s request to prevent ADC from confiscating his $600 and $1,200 stimulus checks once they arrive.

After holding a hearing on Lamar’s request for a preliminary injunction, the Court granted him relief. It began its analysis by noting that none of the federal acts that authorized the stimulus payments created a private right of action.

Thus, Lamar’s lawsuit had to rest on the doctrine of obstacle preemption. Under that doctrine, a state law will be invalidated if it poses an “obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” See: Wyeth v. Levine, 555 U.S. 555 (2009).

“Whether one defines Congress’s purposes and objectives in the CARES Act and the CAA in broad terms of economic stimulation or narrow terms of simply giving people ‘free’ money, Act 1110 plainly frustrates the method which Congress chose to achieve its purpose,” the Court wrote.

ADC argued that its use of the monies, as opposed to prisoners, would advance economic stimulation. “The ADC’s argument misses the mark. Confiscation of the money is an obstacle to Congress’s choice,” the Court wrote. “Even if one genuinely believes Act 1110 is the better way to serve Congress’s purpose, neither the State of Arkansas nor this Court is in any position to second guess Congress’s chosen method. Congress gave money to everyone.”

The Court then turned to decide whether confiscation of the money was a violation of procedural due process. It found no violation when it came to confiscation for the purpose of paying off court fines, fees, costs, or restitution.

It did, however, find a violation when it comes to diverting the excess funds to the inmate welfare fund and the Inmate Care and Custody Account. The Court noted there were no post deprivation remedies available, for the ADC’s grievance procedure provides a challenge to “issues controlled by State or Federal law or regulation” a “non-grievable issue.” The Court concluded the confiscation of the monies did not violate substantive due process or the Takings Clause.

The Court’s order granting Lamar a preliminary injunction noted that Lamar was just one of many cases making similar challenges to Act 1110. Lamar’s case was one of three the Court chose for motions practice. Many of those cases sought class action status. Because the Court envisioned appointing counsel for the pro se plaintiffs and probably certifying a class, it said it was “appropriate for the injunctive relief to cover all prisoners to whom Act 1110 applies.”

The Court ordered ADC to place any federal relief and stimulus funds in a sequestered account if it continues to confiscate those funds. It must maintain records of how much money it confiscates from each prisoner and what amount is paid for court fines, fees, costs, and restitution. While ADC may return the confiscated excess funds to prisoners, it may not otherwise disburse those funds until the end of the lawsuit. See: Lamar v. Hutchinson, USDC, ED AR, Case No. 4-21-cv-00529 (2021).

The court has consolidated all pro se cases into Hayes v. Rutledge, USDC ED AR, Case No. 4:21-cv-347-LPR. John Tull and Thomas Keller of Quattlebaum, Grooms and Tull have appeared to represent the plaintiff class, who have filed a motion for class certification as this issue of PLN goes to press. 

As a digital subscriber to Prison Legal News, you can access full text and downloads for this and other premium content.

Subscribe today

Already a subscriber? Login

Related legal cases

Hayes v. Rutledge

Lamar v. Hutchinson

Scholl v. Mnuchin

Wyeth v. Levine