Carter v. The City of Montgomery et al (JOINT ASSIGN)

Filing 97

MEMORANDUM OPINION, as further set out. Signed by Honorable Judge Royce C. Lamberth on 3/10/17. (djy, )

UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF ALABAMA
NORTHERN DIVISION
_______________________________________
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ALDARESS CARTER, et al.,
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Plaintiffs,
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v.
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Case No. 2:15-cv-555 (RCL)
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THE CITY OF MONTGOMERY, et al.,
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Defendants.
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_______________________________________)

MEMORANDUM OPINION
This case is one of several cases concerning the treatment of indigent persons in various
Alabama cities. In this particular case, plaintiffs maintain that the City of Montgomery violated
their rights by denying them due process and creating debtor’s prisons, where plaintiffs were made
to “sit out” the fines and fees they could not afford to pay. This was done, according to plaintiffs,
without due process or indigency determinations. Plaintiffs now seek to file suit on behalf of a
class against the City; a private company that ran the City’s probation services, Judicial
Correctional Services (JCS) 1 and other related corporate entities; and Branch Kloess, an attorney
hired by Montgomery to represent indigent defendants.
This case involves facts and legal arguments incredibly similar to or identical to those made
before this Court in McCullough v. City of Montgomery, 2:15-cv-463. For the sake of brevity, the
Court will not repeat its analysis here other than as necessary. Accordingly, this opinion should

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The Court notes that the name of this entity differs from brief to brief. The Complaint in this case lists a “Judicial
Correctional Services.” In McCullough the Complaint identifies the same company as “Judicial Correction Services.”
Additionally, the dockets in McCullough identify the party as “Judicial Corrections Services.” Additionally, the
plaintiffs identify several corporate entities and refer to them collectively as JCS. The Court will take the same
approach, only distinguishing between them as necessary.

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be read in conjunction with the opinion filed in that case as well as the other, similar, cases before
this Court.
Defendants filed motions to dismiss for failure to state a claim. For the reasons specified
both in the related opinions and herein, the Court GRANTS in part and DENIES in part defendants’
motions to dismiss.
I.

Background

As in the other cases, plaintiffs allege that the City of Montgomery had policies and
practices designed to increase revenue at the expense of indigents. Plaintiffs maintain that people
were arrested and placed on JCS probation, where they had to pay monthly fees in addition to the
fines levied against them. Those who did not pay were subject to arrest without an indigency
determination. Those individuals would sit in jail to pay off their debts with the “option” of
working off their debt at a rate of $25/day of labor.
The facts in this case overlap significantly with McCullough, so this section will only
address the pertinent unique allegations. Chief among them is that Branch Kloess, the attorney
hired to defend indigents, “fully participated” in the City’s policies, Am. Comp. ¶ 19, ECF No. 18,
and did not inquire into ability to pay, fill out hardship forms, or even maintain files on his clients.
Id. at ¶ 22. Indeed, the public defenders, including Kloess, allegedly told their clients to “pay or
stay,” that is, pay fines or stay incarcerated, as these defenders are funded out of the costs and fees
levied against those defendants. Id. at ¶ 23-24.
With respect to JCS, plaintiffs also allege that though a private company, JCS used a room
inside the city building, issued badges to JCS employees, and sat in the courtroom near the judge
and advised the judge. Id. at ¶ 46. Plaintiffs thus maintain that as JCS’s actions were interwoven
with City policies, they are liable for a number of constitutional violations.
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Additionally, plaintiffs allege that City policy allowed for the City itself to issue and
execute warrants. Id. at ¶ 48.
II.

Counts and Issues in this Case

The Complaint contains the following counts:
Count one, against the City and Kloess is for denial of due process. Count two against JCS
is for denial of due process. Count three, against the City, is for violations of the Fourth
Amendment. Count four, against JCS, is for violations of the Fourth Amendment. Count five,
against the City, is for violations of the Sixth Amendment. Count six is against JCS for violations
of the Sixth Amendment. Count seven is against the City for violations of the Eighth Amendment.
Count eight is against JCS for violations of the Eighth Amendment. Count nine is against the City
for denial of equal protection. Count ten is against JCS for denial of due process. Counts eleven
through fourteen are RICO claims against JCS. Count fifteen is for declaratory and injunctive
relief.
The Court has already addressed due process, the Fourth Amendment, the Sixth
Amendment, the Eighth Amendment, and RICO in McCullough, and will not repeat its analysis
here. The Court has also addressed equal protection in McCullough, but the arguments and basis
for the count presented in this case appear to be completely distinct from those presented there.
Accordingly, the Court will only address the following counts and issues in full: 1) JCS arguments
not raised in McCullough, including the relationship between JCS and the various other identified
corporate entities; 2) the equal protection counts; and 3) the count against Kloess.

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III.

Legal Standard for Motions to Dismiss

A motion to dismiss is appropriate when the complaint fails “to state a claim upon which
relief can be granted.” Fed. R. Civ. P. 12(b)(6). Such a failure occurs when the complaint is so
factually deficient that the plaintiff’s claim for relief is not plausible on its face. Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 570 (2007). Though facts in a complaint need not be detailed,
Rule 8 “demands more than an unadorned, the-defendant-harmed-me accusation.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). The Court must accept all factual statements as true when
deciding a Rule 12(b)(6) motion to dismiss. Id. at 678. However, conclusory legal allegations
devoid of any factual support do not enjoy the same presumption of truth. Id. at 679. “Factual
allegations must be enough to raise a right to relief above the speculative level.” Twombly, 550
U.S. at 555. This is not a high bar however, as plaintiffs need only plead facts sufficient to “nudge[]
their claims across the line from conceivable to plausible.” Id. at 547.
IV.

Analysis of Pending Issues

The Court is aware of the recent memorandum opinion issued in Ray v. Judicial
Corrections Services Inc., 2:12-cv-02819, in the Northern District of Alabama. In that case,
summary judgment was granted for the defendants in a case with a number of very similar claims.
While the Court looks at all relevant law, Ray is neither binding nor particularly applicable at this
stage of the proceedings. The court in Ray made its summary judgment determination after
reviewing specific facts about the JCS contract with the city in question, Childersburg. Before this
Court are motions to dismiss, which are governed by a different legal standard. Additionally, the
parties have not yet conducted discovery.

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1. Equal Protection
Where plaintiffs in McCullough discuss equal protection as associated with their claim that
minority residents of the city were being targeted, the equal protection count in this case is
premised wholly upon indigency. Am. Comp. ¶¶ 283-294.
In McCullough this Court wrote that it “recognizes that prior Supreme Court precedent has
spoken in the language of both due process and equal protection” when addressing indigency.
McCullough v. City of Montgomery, 2:15-cv-463, Mem. Op. n. 1. Here, the equal protection count
appears to do the same, overlapping significantly with plaintiffs’ due process counts. Thus, to the
extent that plaintiffs’ count is intertwined with due process, they have stated a claim for the reasons
specified in the due process section of McCullough.
However, the Court also notes that plaintiffs use language that could be interpreted to attack
all levying of surcharges or fees related to payment plans. The Court has addressed a similar issue
in Rudolph v. City of Montgomery, 2:16-cv-0057, Mem. Op. 14-16, and the same reasoning applies
here. It is not the case that all fees that affect indigents are a violation of equal protection. For
example, in one paragraph plaintiffs write: “[t]he policy at Montgomery was not uniform with the
procedures established by the Alabama Administrative Office of Courts because it added fees only
to ‘offenders’ who could not pay immediately and created its own ‘rules’ for penalizing individuals
who could not pay as directed.” Am. Comp. ¶ 196. The Court sees no legal basis to believe that
late fees or routine processing fees are violations of equal protection, though their impact may be
most visible to those without the means to pay. For example, if there is a processing fee of $1 each
time someone pays with a credit card, those on payment plans may end up paying more (a $1 fee
each time they make a payment) than those who had the means to pay in a single transaction. The

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Court sees no precedent nor basis for holding that such routine fees would be violations of equal
protection however.
Thus to the degree this Count seeks to invalidate any or all fees associated with probation
or payment plans as a matter of course, the Court sees no basis for such a claim. However, given
the broader context of this count and the Supreme Court’s language in Bearden v. Georgia, 461
U.S. 660, 664 (1983), plaintiffs have stated a claim.
2. JCS
While many of the arguments made by JCS are the same or very similar to the arguments
made in McCullough, some of the arguments are sufficiently distinct that they are addressed below.
a. The Motion to Dismiss by CHC Companies
Defendant CHC Companies, Inc. filed a motion [37] to dismiss arguing that the complaint
simply alleges that CHC Companies, Inc. (CHCC) wholly owns JCS or Correctional Healthcare
Companies, Inc. The amended complaint, however, does not argue that CHCC is an alter ego of
the other defendants nor, according to the motion to dismiss, are there any allegations that would
allow the Court to reach CHCC’s separate corporate structure.
This case is one of many similar cases being litigated in Alabama. Plaintiffs explain that
discovery in those cases has revealed that JCS merged with CHCC in 2011. Moreover, CHCC
entered into a “management services agreement” with Correctional Healthcare Companies, Inc.
that made employees of JCS also employees of CHCC and Correctional Healthcare Companies,
Inc. Pls.’ Response Mot. Dismiss 1-2, ECF No. 45.
In light of these facts, Judge Proctor allowed the plaintiffs in Ray to amend their complaint
to add CHCC. CHCC appears to have made very similar arguments both in Ray and this case in

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support of their motions to dismiss. Compare Ray v. Judicial Corrections Services Inc., 2:12-cv02819, Opp’n. Pls.’ Mot. File Am. Comp., ECF No. 229, with CHC Companies, Inc. Mot. Dismiss,
ECF No. 37. Given the overlapping facts in this issue, where the cases are dealing with the same
corporate entities and same factual relationship, the facts and arguments presented in Ray are
applicable here. While there are important distinctions between the cases, including the fact that
the allegations relate to different cities, there is no indication that the corporate structure or JCS
personnel are distinctly situated in this case as compared to Ray.
Thus, taken as true for the purposes of this motion, plaintiffs in this case have stated a claim
against CHCC. They have noted that CHCC directed JCS’s operations and that nominal JCS
employees identified themselves as employees of CHCC. Regardless of the precise employment
relationship any individual employees may have had with JCS or CHCC, plaintiffs’ claims are
sufficient at this point in the proceedings, as they are alleging that JCS employees are also
employees of CHCC, which in fact controls JCS.
b. Other Arguments Advanced by JCS
JCS’s motion to dismiss repeats the same, or similar, arguments advanced in McCullough.
The same reasoning articulated there applies equally here. JCS’s arguments center on their not
being responsible for various actions undertaken by other actors. However, as in McCullough,
plaintiffs maintain that the actions of the various defendants were “inextricably interwoven.” Am.
Comp. ¶ 33. The precise nature of the relationship between the defendants or the role—or lack
thereof—of JCS in any particular activity is likely to be relevant at later stages of this litigation.
However, given the nature of the complaint and the claims in this case, JCS’s arguments about its
limited role or activities are not persuasive.

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3. Due Process Claim Against Kloess
Kloess, identified as the public defender for the City of Montgomery, filed a motion [34]
to dismiss. Kloess is identified as a defendant only for count one, alleged violations of due process.
Kloess argues that he did not represent Carter, was not involved with JCS, and played no role in
many of the facts alleged in the complaint. He further argues that he was not a state actor who can
be liable under 42 U.S.C. § 1983. In the alternative, he argues that he is immune from liability
due to the doctrine of qualified immunity.
Given that this is a motion to dismiss, the Court takes the allegations in the complaint as
true for the purposes of determining if a claim has been stated. In this case, plaintiffs argue that
Kloess was an active participant in the City’s “pay or stay” program that gave indigent defendants
the option of paying fines they could not afford or remaining incarcerated. Pls.’ Resp. Kloess’
Mot. Dismiss 3, ECF No. 39. The complaint further alleges that Kloess filed a notice of appearance
in Carter’s case but did not introduce himself to Carter or speak on his behalf during the
proceeding. Am. Comp. ¶¶ 89-98. According to plaintiffs, this was part of a widespread practice,
as the “public defender” was funded through the fines that were levied against Carter and others.
Id. at ¶ 145 (“[B]oth the City and the ‘public defender’. . . are enriched by avoiding the
constitutional due process requirements and demanding money from the poor.”).
The Court also finds the reasoning in Powers v. Hamilton Cty. Pub. Def. Comm’n, both in
the district court’s opinion and in the Sixth Circuit’s opinion, to be persuasive. Powers v. Hamilton
Cty. Pub. Def. Comm’n, 501 F.3d 592, 608 (6th Cir. 2007). There, the court held that public
defenders could be liable under § 1983 for constitutional violations. Indeed, the facts in question
were strikingly similar to those presented here as they concerned the liability of a public defender
who failed to move for an indigency hearing. Kloess argues that the “court in Powers was wrong

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and that the case is not precedent,” Pls.’ Resp. Kloess’ Mot. Dismiss 7, and that Polk County v.
Dodson, 454 U.S. 312 (1981), “essentially overrules” Powers. Id.
Kloess is clearly correct that Powers is not binding. However, how exactly Polk, decided
in 1981, overrules Powers is much less clear. 2 See also Hamilton Cty. Pub. Def. Comm’n v.
Powers, 555 U.S. 813 (2008) (denying certiorari). The Court sees no reason to diverge from the
district or circuit court on this issue.
With regards to Kloess’ argument on qualified immunity, plaintiffs have argued that
dismissal is not proper at this stage as more facts are needed to conduct a proper functional
analysis. It appears Kloess did not file a reply brief. Kloess spends two paragraphs on qualified
immunity, both of which are conclusory. Kloess’ Mot. Dismiss 8-9. He states that he is a lawyer
who exercises discretion and therefore “is entitled to qualified immunity.” Id. He also states that
plaintiffs do not allege “any intentional acts were done by Kloess.” As noted above, this is not the
case—plaintiffs do allege Kloess acted intentionally. Given that the Court is not in a position to
analyze the scope of Kloess’ employment, the dearth of substantive arguments regarding qualified
immunity made thus far, and based on the allegations in this case, the arguments made in the briefs,
and the motions hearing held in August, 2016, the Court agrees with plaintiffs that in this case the
question of qualified immunity would be more appropriate at a later stage of the proceeding.
Accordingly, the complaint does state a claim against Kloess for violations of due process.

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The Court notes that Kloess writes “Polk County v. Dodson, 454 U.S. 312, 127 S.Ct. 1955, 2007 [sic] essentially
overrules Powers.” Pls.’ Resp. Kloess’ Mot. Dismiss 7. It is not clear if this was inadvertent but improper bluebooking
on Kloess’ part, or if Kloess was intentionally attempting to create a typographical error ending in “2007” to grant at
least temporal logic to the notion that Polk could have overruled Powers. Regardless, 127 S. Ct. 1955 is the citation
for Bell Atlantic Corp. v. Twombly—not Polk—and it does not continue onto page 2007. 127 S. Ct. 2007 is a page in
Winkelman ex rel. Winkelman v. Parma City Sch. Dist., 550 U.S. 516 (2007) which is largely the introduction to a
concurrence by Justices Scalia and Thomas in a case brought under the Individuals with Disabilities Education Act.

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V.

Conclusion

Counts One and Two, regarding Denial of Due Process, state a claim for the reasons
articulated above, in plaintiffs’ briefs, and in the previously referenced cases.
Counts Three and Four, concerning violations of the Fourth Amendment, state a claim for
the reasons stated in plaintiffs’ briefs and the referenced cases, particularly the discussion of Count
Three in the memorandum opinion issued by this Court in McCullough v. City of Montgomery,
2:15-cv-463.
Counts Five and Six, alleging violations of the Sixth Amendment, state a claim for the
reasons stated in plaintiffs’ briefs and in the previously referenced cases.
Counts Seven and Eight, concerning the Eighth Amendment, also state a claim. Though
the wording in this complaint and McCullough do not line up precisely, both address the issue of
the Eighth Amendment being violated by use of bail systems that do not take into account the
defendant’s ability to pay. While McCullough’s Eighth Amendment claim focuses on the fixedsum system and Carter’s places an increased emphasis on the resulting incarceration when the
fixed bail is not paid, the underlying law and logic is the same.
Counts Nine and Ten concern Equal Protection and state a claim for the reasons stated
above.
Counts Eleven through Fourteen allege RICO violations. Plaintiffs do not state a claim in
these counts for the reasons specified in defendant’s briefs and in the previously referenced cases.
Count Fifteen concerns Carter’s request for relief. Carter states a claim for declaratory or
injunctive relief for the same reasons articulated in McCullough. Defendants appear to focus on
changes to municipal policy, but as explained in the motions hearing, Montgomery’s current policy
is both unclear and subject to change. Moreover, the City did not accept liability in Mitchell, and

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the Court understands Count Fifteen as seeking to enjoin City action. The Court also notes that
this count is tied to a separate motion for summary judgment seeking to declare the contract
between the City and JCS void. For the purposes of the motion to dismiss, plain tiffs have stated a
claim. However, the Court notes that it reserves judgment on the pending motion [71] for partial
summary judgment along with subsequently filed motions to strike [75, 76].
A separate order shall issue on this date.

~c ~

Rc;c. Lamberth
United States District Judge

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