Wright v. Corrections Corp ( 2016 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
}
MARTHA WRIGHT, et al. }
}
Plaintiffs, }
}
v. } Case No. l:OO-cv-00293(GK}
}
CORRECTIONS CORPORATION OF }
AMERICA, et al., }
}
Defendants. }
~~~~~~~~~~~~~~~~>
MEMORANDUM OPINION
On May 15, 2015, Plaintiffs filed a Motion for Leave to File
a First Amended Class Action Complaint ("Motion") [Dkt. No. 178] .
They seek to reduce their original 12 counts to three while greatly
expanding the scope of the proposed class, as well as to update
the Complaint to reflect changes to the Parties' situations over
the last fifteen years. Defendants Securus Technologies, Inc.
( "Securus") and Corrections Corporation of America ( "CCA") have
filed responses in opposition to Plaintiffs' Motion [Dkt. Nos. 180,
181], and Plaintiffs have filed a Reply [Dkt. No. 184]. Upon full
consideration of all the pleadings and the entire record herein,
the Motion shall be granted for the following reasons.
I . BACKGROUND
On February 16, 2000, Plaintiffs filed this putative class
action on behalf of inmates incarcerated at prison facilities owned
-1-
and operated by Corrections Corporation of America, as well as on
behalf of family members and friends of the inmates.
In August 2001, the Court ruled that the Federal Communication
Commission ("FCC") was "in the best position to resolve the core
issues in this case, namely the reasonableness of the rates charged
and the feasibility of alternative telephone arrangements in CCA
facilities." Memorandum Opinion at 10-11 [Dkt. No. 94] . On
November 5, 2001, the Court entered an Order staying the case [Dkt.
No. 105].
Since then, Plaintiffs have filed two petitions for rulemaking
with the FCC. On September 26, 2013, the FCC issued its Report and
Order and Further Notice of Proposed Rulemaking ("Inmate Rate
Order") . Rates for Interstate Inmate Calling Services, 7 8 Fed.
Reg. 67956 (Nov. 13, 2013) (to be codified at 47 C.F.R. pt. 64).
On November 14, 2013, Securus, a Defendant in this lawsuit
under its former name Evercom, and others filed Petitions for
Review of the FCC's Inmate Rate Order with the United States Court
of Appeals for the District of Columbia. Securus Tech., Inc. v.
FCC, 13-1280 (D.C. Cir. filed Nov. 14, 2013). In response to the
FCC's uncontested motion to hold the case in abeyance pending the
agency's adoption of permanent inmate calling reforms, the Court
of Appeals stayed the appeal on December 16, 2014. See Securus,
13-1280 [Dkt. Nos. 1526582, 1527663]; see also Rates for Interstate
-2-
Inmate Calling Services, Second Further Notice of Proposed
Rulemaking, 29 FCC Red 13170, 2014 WL 5408460.
On October 27, 2014, Plaintiffs filed a Motion to Reopen and
Lift Stay Temporarily [Dkt. No. 139]. On February 13, 2015, while
the Motion to Reopen was pending, Plaintiffs also filed a Motion
to Transfer the case to the Western District of Arkansas [Dkt.
No. 163], which Defendants opposed [Dkt. Nos. 165, 166, 167]. The
Court granted Plaintiffs' Motion to Reopen on April 30, 2015 [Dkt.
No. 177]. On May 15, 2015, Plaintiffs filed the present Motion for
Leave to File an Amended Complaint. See Motion at 1; First Amended
Class Action Complaint ("First Amended Class Action Complaint;' or
"Am. Compl.") [Dkt. No. 178-2]. On May 18, 2015, the Court denied
Plaintiffs' Motion to Transfer [Dkt. No. 179].
II. STANDARD OF REVIEW
A. Leave to Amend
The amendment of pleadings in civil matters is governed by
Rule 15 of the Federal Rules of Civil Procedure, which states that
the "court should freely give leave [to amend] when justice so
requires." Fed. R. Civ. P. 15(a) (2). The decision to grant or deny
leave to amend rests in the sound discretion of the trial court;
however, it is an abuse of discretion to deny leave without a
sufficient justification for doing so. Firestone v. Firestone, 76
F.3d 1205, 1208 (D.C. Cir. 1996) (citing Foman v. Davis, 371 U.S.
178, 182 (1962)). Sufficient justifications include "undue delay,
-3-
bad faith or dilatory motive repeated failure to cure
deficiencies by [previous] amendments [or] futility of
amendment." Id. (quoting Foman, 371 U.S. at 182).
In assessing a motion for leave to amend, the Court is
required to assume the truth of the allegations in the amended
complaint and construe them in the light most favorable to the
movant. Caribbean Broadcasting Sys., 148 F.3d 1080, 1086 (D.C.
Cir. 1998). The party opposing the amendment bears the' burden to
I
-I show why leave should not be granted. Dove v. Washington Metro.
Area Trans. Auth., 221 F.R.D. 246, 247 (D.D.C. 2004) (citing
Gudavich v. Dist. of Columbia, 22 F. App' x 17, 18 (D. C. Cir.
2001)).
Defendants oppose Plaintiffs' Motion and contend that it
should be denied because (1) the proposed amendments are improper
and beyond the scope of the initial Complaint, ( 2) Plaintiffs
unduly delayed in seeking to amend their Complaint, ( 3) the
proposed amendments are unduly prejudicial to Defendants, (4) the
proposed amendments are brought in bad faith, and (5) the proposed
amendments are futile. The Court will address each argument in
turn.
Plaintiffs' original Complaint focused on obtaining damages
for those who initiated telephone calls to people in correctional
institutions operated by CCA, and all prisoners incarcerated in
-4-
correctional institutions operated by CCA [Dkt. 1, ~ 34]. It reads
as follows:
Class (1): Families, Friends, Lawyers and Other Bill Payer
Plaintiffs, defined as all persons, corporations and organizations
billed for telephone calls initiated by people who presently are,
have been or will be confined to a correctional facility operated
by CCA.
as well as
Class (2): Prisoner Plaintiffs, defined as all persons who
presently are, have been, or will be incarcerated in correctional
institutions operated by CCA.
Plaintiffs' First Amended Class Action Complaint contained
the allegations set forth above and ~ 50, which included all
persons using Securus telephone systems at non-CCA facilities. It
reads as follows [Dkt. No. 178-2]:
all persons in the United States who, at any time since
February 16, 1998, have paid to use telephone systems
provided by Securus at a CCA facility or who, at any
time since May 15, 2013, have paid to use telephone
systems provided by Securus at a non-CCA facility, in
order to make or receive telephone calls involving a
person incarcerated in any state in the United States
(the "Class") .
as well as
all persons who, at any time since February 16, 1997,
have paid to use telephone systems at a CCA facility
in order to make or receive telephone calls involving
a person incarcerated in any state in the United States
(the "Class").
-5-
II. DISCUSSION
A. The Proposed Amendments Do Not Improperly Expand the
Scope of the Original Complaint
A key issue to decide in any Motion to Amend is whether
Plaintiffs have improperly expanded the scope of the original
Complaint.
Securus argues that leave to amend should not be granted
"where the proposed amendments would expand the scope of the
existing claims." Securus Opp'n at 5 (citing Lover v. District of
Columbia, 248 F.R.D. 319, 322 (D.D.C. 2008). This is far too broad
a reading of Lover.
That case does not prevent amendment of a complaint whenever
the scope of the original claims is expanded. Rather, Lover
acknowledges that an amendment "may unduly prejudice a defendant
if [the] amendment would delay litigation or 'expand[] the
allegations beyond the scope of the initial complaint.'" Lover,
248 F.R.D. at 322 (emphasis added) (quoting Parish v. Frazier, 195
F.3d 761, 763 (5th Cir. 1999)). "Prejudice is likely if 'the
amended complaint contain[s] new complex and serious charges which
would undoubt [edly] require additional discovery for the
defendants to rebut.'" Id. (quoting Ferguson v. Roberts, 11 F.3d
696, 706 (7th Cir. 1993)).
-6-
Securus argues strongly that Plaintiffs are trying to
improperly expand the class. The initial Complaint, as it
pertained to Securus, was limited to those CCA facilities to which
Securus provided ICS. The new Complaint expands the scope to all
correctional facilities in the country served by Securus. While
Securus is correct that the First Amended Complaint does greatly1
increase the proposed class size, a mere .increase in class size is
neither complex nor inherently prejudicial.
Securus alleges that Plaintiffs are trying to reach back to
1998 for creation of the expanded class and that the proposed
amendment expands the case so significantly as to be prejudicial
to Defendants. Securus Opp'n at 9. Securus is clearly incorrect
about Plaintiffs' attempts to reach back. The Complaint
specifically limits damages for the expanded class to May 15, 2013
and onward. See Am. Compl. ~ 49.
Otherwise, Securus offers little in the way of explaining
what prejudice it would suffer from the expanded class, other than
the magnitude of the expansion. Given the fact that the expanded
class is limited to the two-year statute of limitations, Plaintiffs
have gained no unfair advantage from the stay. That Plaintiffs
1 The First Amended Complaint does not provide an exact figure as
to the number of correctional facilities it encompasses, but does
allege that Securus has had exclusive contracts with "thousands of
correctional facilities." Am. Compl. ~ 21.
-7-
could have merely filed a separate case at the time of the Motion
on behalf of an expanded class supports this conclusion.
Nor does the expanded class introduce "new complex and serious
charges" or delay the litigation. In Lover, the proposed amendment
would have further delayed the completion of discovery and the
resolution of the case. That is not the situation here. The'case,
though stayed for many years, is still in the very early stages of
litigation and discovery has barely begun, if at all.
Securus also contends that Plaintiffs want to expand the scope
by "add[ing] the vague category of 'fees' to the claim." Securus
Opp'n at 5. This argument overlooks the fact that Plaintiffs did
in fact allege improper fees in the original Complaint. See, ~,
Complaint ~ 37 (question of "whether the fees imposed by the
defendants represent a fair market value for the services or the
exploitation of an illegal monopoly"); Id. at 75 (describing rates
and surcharges as "a regulatory fee that bears no relation to the
actual administrative and enforcements costs incurred"). Though
fee allegations are more prominent in the First Amended Complaint,
they are not "new complex and serious charges," Lover, 248 F.R.D.
at 322 (quoting Ferguson, 11 F.3d at 706).
B. Amendment Would Not Cause Undue Delay
As already noted, while leave to amend a complaint is left to
the discretion of the court, it is an abuse of that discretion to
deny leave to amend unless there is sufficient reason, such as
-8-
"undue delay, bad faith or dilatory motive ... repeated failure to
cure deficiencies by [previous] amendments ... [or] futility of
amendment." Firestone, 76 F.3d at 1208 (quoting Foman, 371 U.S. at
182) .
Defendant CCA argues that Plaintiffs unduly delayed seeking
to amend their Complaint and "should not have waited 13 years."
CCA Opp'n at 6. CCA contends that it is no excuse that the case
was and remains stayed and then referred to the FCC. Id. The Court
disagrees. It was entirely reasonable for Plaintiffs to wait to
amend their Complaint until the FCC acted upon their rulemaking
petitions, particularly in light of this Court's primary
jurisdiction ruling. See Memorandum Opinion [Dkt. No. 94].
Significantly, Defendants have not suggested a more appropriate
window of time in which Plaintiffs should have sought to amend
their Complaint nor did Defendants file any motions to dismiss the
Complaint. While thirteen years is obviously a long time, the
timing of the Motion is through no fault or delay by the Plaintiffs.
CCA further argues that, at the very least, the 13 months
that elapsed between the FCC's Inmate Rate Order and Plaintiffs'
Motion constitutes undue delay. CCA Opp' n at 7. CCA does not
explain why the Inmate Rate Order triggered an obligation for
Plaintiffs to immediately file their amended Complaint.
In fact, Defendant Securus tellingly takes the opposite
position from CCA, arguing that Plaintiff's Motion is premature
-9-
because the FCC's Inmate Rate Order, on which the First Amended
Complaint relies in part, is currently on appeal to the D. C.
Circuit (and was stayed on December 16, 2014). See Securus Opp'n
at 17-19. By definition, Plaintiffs' Motion cannot be both
dilatory and premature.
Plaintiffs have consistently pursued their case before this
Court and the FCC. Plaintiffs were under no obligation to file
their First Amended Complaint within a certain period of time after
issuance of the Inmate Rate Order, and Defendants have not shown
now they have suffered any prejudice from the passage of those
thirteen months. As our court of Appeals noted in Caribbean
Broadcasting, 148 F.3d at 1084,"the prolonged nature of a case
does not itself affect whether the plaintiff may amend its
complaint."
Nor is Plaintiffs' Motion premature. The fact that the Inmate
Rate Order, as already noted, is currently on appeal and stayed at
the request of the FCC, does not prevent Plaintiffs from amending
their Complaint at this time. Even though it is possible that this
case cannot be fully resolved until the appeal of the Inmate Rate
Order is resolved, Securus fails to explain why this prevents
Plaintiffs from amending their Complaint. Securus claims that
"[a]llowing Plaintiffs to reopen this case now only invites waste
and expense," Securus Opp'n at 18, but gives no specifics as to
what they would be. Moreover, Plaintiffs are not seeking to lift
-10-
the stay entirely; it has only been lifted temporarily in order to
seek the filing of their amendment of their Complaint.
CCA also argues that Plaintiffs abandoned their claim for
damages 13 years ago, when Plaintiffs sought only injunctive relief
from the FCC and did not submit complaints to the Enforcement
Bureau. 2 See CCA Opp'n at 6. CCA also argues that Plaintiffs'
failure to file a formal enforcement claim with the Enforcement
Bureau is indicative of undue delay. CCA points to Plaintiffs'
Third Report to the Court [Dkt. No. 132] ("Third Report"),
submitted on February 24, 2004, in which Plaintiffs expressed their
intention to bifurcate their claim. Plaintiffs stated that they
would file a formal complaint with the FCC's Enforcement Bureau,
"limited to claims regarding unreasonable inmate calling rates and
unlawful rebates." They also planned to file a separate petition
with the FCC's Wireline Competition Bureau challenging exclusive
dealing arrangements between prisons and res providers, and the
practice of providing only collect calling services without the
option of using debit and calling services. Third Report at 2.
Moreover, an enforcement claim is not a prerequisite to
seeking damages and CCA fails to cite any case law indicating that
2 CCA is incorrect to characterize this case as "always about
injunctive relief, not damages," from its inception. CCA Opp'n at
6 n.1. Plaintiffs clearly sought damages in their original
Complaint, see Compl. at 51. CCA argues that Plaintiffs abandoned
their damages claim, which obviously supports Plaintiffs' answer
that they did in fact seek such changes.
-11-
a formal complaint with the Enforcement Bureau is a prerequisite
to filing a damages claim. In addition, as Plaintiffs note, class-
wide relief is unavailable before the Enforcement Bureau and
therefore an enforcement action would not have resolved Plaintiffs'
class damages claims. See Pls.' Reply at 8.
For these reasons, the Court finds that Plaintiffs did not
unduly delay in filing their First Amended Complaint.
C. The Proposed Amendments Are Not Unduly Prejudicial to
Defendants
Defendants next argue that allowing Plaintiffs to amend their
Complaint would result in prejudice to them. To determine if the
threat of prejudice to the opposing party is great enough to
warrant denying leave to amend, courts consider "the hardship to
the moving party if leave to amend is denied, the reasons for the
moving party failing to include the material to be added in the
original pleading, and the injustice resulting to the party
opposing the motion should it be granted." Childers v. Mineta, 205
F.R.D. 29, 32 (D.D.C. 2001) (quoting 6 Charles Alan Wright, Arthur
R. Miller & Mary Kay Kane, Federal Practice & Procedure, § 1487 at
621, 623 (3d ed. 2001)).
CCA contends, as it did in its undue delay argument, that it
will suffer prejudice because Plaintiffs deprived the parties of
the opportunity to resolve damages in a timely manner when they
did not file a formal complaint for damages with the Enforcement
-12-
Bureau. CCA Opp'n at 8. As discussed above, Plaintiffs were not
required to seek damages before the Enforcement Bureau as a
prerequisite to seeking damages in this case. See supra, 7-8. In
addition, since Plaintiffs requested damages in their original
Complaint, Defendants were on notice of the claim. Thus, Defendants
have shown no resulting prejudice.
CCA alleges that Plaintiffs "are trying to reach back to
February 16, 1997, for damages that include the entire 13-year
period of the stay." CCA Opp'n at 8. Again, Plaintiffs' original
Complaint already included requests for damages and the expanded
class is limited to the two-year statute of limitations. Defendants
are not prejudiced by Plaintiffs seeking damages. Defendants have
been on notice of the potential for damages since the first
Complaint was filed. Whether damages--for the entire period of the
stay, a shorter time period, or any at all--are appropriate will
be decided at a later time and are not cause for denial of
Plaintiffs' Motion to Amend.
CCA' s next argument is that Defendants will be prejudiced
because the evidence has grown stale and witnesses have
disappeared. See CCA Opp'n at 8. The evidence issue exists
regardless of whether Plaintiffs amend their Complaint or not.
Similarly, CCA argues that it will be prejudiced in its
ability to discover evidence and prepare its defense. Id. at 8-9.
CCA contends that it is not an ICS provider and does not keep or
-13-
maintain billing records that might show who accepted and received
ICS calls, or if the charges were actually paid by Plaintiffs. Id.
Again, this is not a problem that is unique to the First Amended
Complaint; CCA will face these issues under the current Complaint.
Securus argues that Plaintiffs are seeking "to transform their
case into something entirely new" through the proposed amendments.
Securus Opp'n at 9 (quoting Mississippi Ass'n of Cooperatives v.
Farmers Home Admin., 139 F.R.D. 542, 544 (D.D.C. 1991)). Securus
cites to several cases in which amendment was denied. In those
cases, the proposed amendments were unrelated or only tangentially
related to the original case. Id. at 9-10; see e.g., Mississippi
Ass'n of Cooperatives, 139 F.R.D. at 544-45 (denying leave to amend
FOIA complaint against former federal agency to the extent
plaintiff sought to include race discrimination claims and
violations of the Administrative Procedure Act). Plaintiffs'
proposed amendments here are more than tangentially related to the
original Complaint and are readily distinguishable from the cases
cited by Securus.
For all the reasons discussed above, the Court finds that
Defendants will not be prejudiced by the proposed amendments to
the Complaint.
-14-
D. Plaintiffs Proposed Amendments Were Not Brought In Bad
Faith
Securus contends that Plaintiffs'. Motion should be denied
because it is not brought in good faith. Securus argues that
Plaintiffs' Motion exhibits bad faith because: (1) it is an attempt
•:
to obtain rehearing of the denial of Plaintiffs' Motion to
Transfer; and (2) the Motion's goal is to assist the Mojica case
in Arkansas rather than seek relief from this Court. Securus Opp'n
at 6-7.
Securus's first contention is easily disposed of, as
Plaintiffs' Motion was filed before the Court denied Plaintiffs'
Motion to Transfer. Therefore it cannot be "an attempt to re-
litigate the issue of transfer and circumvent the Court's May 18
decision," as the First Amended Complaint was filed on May 15,
2015. See Securus Opp'n at 6.
Second, Securus contends that Plaintiffs' cooperation with
Arkansas counsel for Mojica, and the similarities between the
complaints in both cases, is evidence of bad faith. Id. at 7-8.
There is absolutely nothing to support this claim. Cooperation
among attorneys with similar cases and aspirations of transferring
a case are relatively commonplace and the Court does not find them
to be indicative of bad faith.
-15-
E. The Proposed Amendments Are Not Futile.
Securus argues first that Plaintiffs' proposed amendments are
futile because the proposed amendments will not cure the
circumstances which caused this Court to deny Plaintiffs' Motion
for Transfer to the Western District of Arkansas. Id. at 11.
Without predicting the merits of future motions to transfer,
whether or not the case becomes transferable has no bearing on the
futility of the case. Securus's argument says nothing about the
case's ability to proceed in this Court, and therefore is
·i'
irrelevant to futility.
Next, Securus argues that the six "Inmate" Plaintiffs in the
First Amended Complaint lack standing to lodge the rate claim
against Securus. See Securus Opp'n at 11. Securus does not allege
that all Plaintiffs lack standing, only a subset of them. The First
Amended Complaint does not become futile because some Plaintiffs
lack standing, so long as the remaining Plaintiffs have it.
Therefore, even if Securus was correct that the Inmate Plaintiffs
lack standing, others do have standing, which means that the
Amended Complaint is not futile.
Securus also argues that the "Bill Payer" Plaintiffs did not
receive calls from non-CCA facilities, and therefore they cannot
support the newly expanded rate claim as it pertains to non-CCA
facilities. See Securus Opp'n at 13. Securus fails to explain why
this results in the Bill Payers lacking standing or why it renders
-16-
the First Amended Complaint futile. Id. Plaintiffs are correct
that this issue is more pertinent to class certification and the
class representatives' ability to represent the broader class,
rather than standing. Pls.' Reply at 12.
Securus next argues that Plaintiffs' claims regarding non-CCA
facilities are time-barred. See Securus Opp' n at 13. Securus
contends that Plaintiffs cannot relate their non-CCA facility
claims back to 2000. Plaintiffs do not seek to do so. Because
I
.i
Plaintiffs limit these claims to the 2-year statute of limitations
period, which Securus acknowledges, Securus's time-barred
arguments fail. See Am. Compl. ~ 49 (limiting non-CCA facility
class from May 15, 2013, to present); Securus Opp'n at 13-14 (non-
CCA facilities claims can reach back only to 2013).
Lastly, Securus argues that any allegations that it failed to
comply with the Inmate Rate Order are futile because the Inmate
Rate Order has future effect only. See Securus Opp' n at 16.
Plaintiffs counter that they are not seeking to have the Inmate
Rate Order applied retroactively. If and when the Court determines
damages under 47 U.S.C. §§ 206 and 207, the Court will be able to
rely on the guidance and expertise provided by the FCC. See Pls.'
Reply at 14-15. Because Plaintiffs have not asked for the Inmate
Rate Order to be applied retroactively and, in any event, because
their requests for damages do not rely exclusively on the Inmate
-17-
Rate Order, Defendants have not shown that amendment of the
Complaint would be futile.
F. Equity Does Not Bar Relief
CCA contends that equity estops Plaintiffs from amending their
Complaint. See CCA Opp' n at 9-10. CCA' s main argument is that
Plaintiffs represented to the Court in 2001 when seeking a stay of
the case, that Defendants would not be prejudiced by the stay, and
that the present Motion does indeed prejudice the Defendants. Id.Since the Court has already rejected Defendants' prejudice
arguments, there is no need to address them again under the
umbrella of equity.
IV. CONCLUSION
For the foregoing reasons, Plaintiffs' Motion for Leave to
Amend their Complaint shall be granted. An Order shall accompany
this Memorandum Opinion.
January 21, 2016 G~~~
GladysKeier
United States District Judge
Copies to: attorneys on record via ECF
-18-