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Businesses Get Rich Off Black and Latinx Inmates, Counties Get a Cut

Inmates in county jails and state prisons do not generally evoke widespread sympathy. Thus, there is no political will to address issues that inmates face. Nor is there a political will to rein in private businesses who get rich off them.

Among these businesses are private telecommunications companies that provide telephone services to inmates.

An inmate telecommunications company works by entering into a contract with a county, which gives the company the exclusive right to set up and maintain an inmate calling system in that county’s jails. Inmates in that county’s jails are required to use that calling system, and any relatives who wish to speak with the inmates must establish an account with the telecommunications company.

The counties that enter into these telecommunications contracts do so because the cost of maintaining an inmate calling system is shifted to telecommunications companies and away from taxpayers. Also, the contracts are a source of revenue for county jails. Telecommunications companies pay to county jails a “commission,” which is a guaranteed fee against a percentage of the call charges that are generated. The Los Angeles County Jail, pursuant to the contract it has entered into is guaranteed $15 million annually or 67.5 percent of call charges that are billed, whichever is greater.

While this arrangement financially benefits counties and the companies who contract with them, the problem is that the rates charged for inmate calls are significantly greater than those paid for ordinary telephone service.

These exorbitant rates – a cut of which, as noted, is taken by counties – typically must be paid by relatives who wish to speak with inmates. This poses an extraordinary financial strain on inmates’ families. Some inmates’ families do not have the financial means to set up the prepaid account that inmate telecommunications companies require. The upshot for these families is that their family member is held from them incommunicado.

In 2016, a group of inmates and family members filed a class action lawsuit against nine counties (including Los Angeles County) alleging that the “commissions” they receive under contracts with inmate telecommunications companies are unlawful. The inmates and family members alleged that even though these commissions are, pursuant to Penal Code section 4025, deposited into inmate welfare funds, they constitute an unlawful tax to which they are entitled a refund.

The counties that were sued sought to dismiss the class action arguing that inmates and family members did not have legal standing to contend the commissions are an unlawful tax. The trial court accepted the counties’ argument and dismissed the class action.

Recently, the Court of Appeal for the Second Appellate District affirmed the dismissal. The Court of Appeal’s decision is available at this link:

In our view, both the trial court and the Court of Appeal grievously erred. The counties’ “standing” argument was couched in the fact that inmates’ relatives make their payments to the telecommunications companies as opposed to the counties themselves. Therefore, according to the counties, even though they receive a portion of the payments, the payments cannot be considered a tax.

We vehemently disagree with the counties’ argument. Put another way, the counties’ argument is that they can impose any tax they want, and the tax cannot be disputed even if it is blatantly unconstitutional as long as payments are funneled through a private company. This is how fraudulent shell companies operate. It should not be how government agencies function.

More fundamentally, inmate calling systems constitute a legalized form of price gouging. This is predatory behavior that is always wrong, and in the age of COVID-19, which has brought severe economic hardship upon millions, should categorically be deemed illegal. It should be all the more illegal given that jail populations are disproportionately African American, Latinx, and persons with mental illnesses or substance abuse problems.

What counties are essentially doing is allowing private companies to prey upon minorities and the most vulnerable in our society. Government agencies should be trying to prevent this predatory behavior, not actively participating in and profiting from it.

Is your loved one in jail?

In light of the COVID-19 crisis, bail schedules have recently been modified. Inmates who were previously ineligible for release (or whose bail was set at an unaffordable level) are now eligible for release on no or low bail.

If your loved one is jail, contact one of our experienced attorneys today. We will guide you through your options to seek your loved one’s release – options including, but not limited to, a petition for a writ of habeas corpus.