WRIGHT, et al v. CORRECTIONS CORP, et al
Filing
190
MEMORANDUM OPINION to the Order granting Plaintiffs' Motion for Leave to File a First Amended Class Action Complaint. Signed by Judge Gladys Kessler on 1/21/16. (CL)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
MARTHA WRIGHT, et al.
Plaintiffs,
v.
CORRECTIONS CORPORATION OF
AMERICA, et al.,
Defendants.
}
}
}
}
}
}
}
}
}
}
}
Case No. l:OO-cv-00293(GK}
~~~~~~~~~~~~~~~~>
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
( "Securus")
years.
Defendants
Securus
Technologies,
and Corrections Corporation of America
( "CCA")
Inc.
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
Order") .
Further Notice
Rates
for
under
its
Proposed Rulemaking
("Inmate
Interstate Inmate Calling Services,
Reg. 67956 (Nov. 13, 2013)
On November 14,
of
2013,
former name
Rate
7 8 Fed.
(to be codified at 47 C.F.R. pt. 64).
Securus,
Evercom,
a Defendant in this lawsuit
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.
FCC, 13-1280
Securus Tech.,
Inc. v.
(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,
of Appeals stayed the appeal on December 16,
2014.
the Court
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
deficiencies
dilatory
by
amendment." Id.
motive
[previous]
repeated
amendments
failure
[or]
to
cure
futility
of
(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.,
Gudavich v.
Dist.
221
F.R.D.
246,
of Columbia,
22
247
F.
(D.D.C.
App' x
17,
2004)
18
(citing
(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
unduly
in
delayed
the
seeking
to
initial
amend
Complaint,
their
( 2)
Plaintiffs
Complaint,
proposed amendments are unduly prejudicial to Defendants,
( 3)
the
(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'
the
allegations
First Amended Class Action Complaint contained
set
forth above
and
~
50,
which
included all
persons using Securus telephone systems at non-CCA facilities.
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-
It
II.
DISCUSSION
A.
The Proposed Amendments Do Not
Scope of the Original Complaint
A key issue to decide
Plaintiffs have
Improperly Expand the
in any Motion to Amend is whether
improperly expanded the
scope of
the original
Complaint.
Securus argues
"where
the
that
leave to amend should not be granted
proposed amendments
existing claims."
would expand the
scope
of
the
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[]
allegations beyond the scope of the initial complaint.'"
248 F.R.D. at 322 (emphasis added)
F.3d 761,
763
(5th Cir.
Lover,
(quoting Parish v. Frazier, 195
"Prejudice is likely if
1999)).
the
'the
amended complaint contain[s] new complex and serious charges which
would
undoubt [edly]
defendants to rebut.'"
require
Id.
additional
discovery
for
the
(quoting Ferguson v. Roberts, 11 F.3d
696, 706 (7th Cir. 1993)).
-6-
Securus
improperly
argues
expand
strongly
the
that
class.
The
Plaintiffs
initial
are
trying
Complaint,
as
to
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.
about
Securus Opp'n at 9.
Plaintiffs'
attempts
to
Securus is clearly incorrect
reach
back.
The
Complaint
specifically limits damages for the expanded class to May 15, 2013
and onward.
See Am. Compl.
Otherwise,
~
49.
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.
1
That Plaintiffs
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."
Opp'n at 5.
This argument overlooks the fact that Plaintiffs did
in fact allege improper fees in the original Complaint.
Complaint
~
Securus
37
(question of
"whether
the
fees
See,
~,
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,
-8-
such as
"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
jurisdiction
Significantly,
ruling.
See
in
light
Memorandum
of
this
Opinion
Court's
[Dkt.
primary
No.
94].
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.
explain why the
CCA Opp' n
at
7.
CCA does
not
Inmate Rate Order triggered an obligation for
Plaintiffs to immediately file their amended Complaint.
In
fact,
Defendant
position from CCA,
Securus
tellingly
takes
the
opposite
arguing that Plaintiff's Motion is premature
-9-
because the FCC's Inmate Rate Order,
Complaint
relies
in part,
is
on which the First Amended
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.
Broadcasting,
does
not
As
our court of Appeals
noted in Caribbean
148 F.3d at 1084,"the prolonged nature of a case
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
Plaintiffs
resolved,
from
Securus
amending
fails
their
to explain why this prevents
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.
Third
Report
to
the
Court
[Dkt.
CCA points to Plaintiffs'
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
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.
2
-11-
a formal complaint with the Enforcement Bureau is a prerequisite
to filing a damages claim. In addition, as Plaintiffs note, classwide
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,
required
to
seek
damages
before
the
Plaintiffs were not
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
February 16,
that Plaintiffs
1997,
"are trying to reach back to
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.
been on notice
of
the
potential
for
damages
Defendants have
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
because
next argument is that Defendants will be prejudiced
the
disappeared.
evidence
See
CCA
has
Opp'n
grown
stale
at
The
8.
and
witnesses
evidence
issue
have
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
plaintiff
violations
against
sought
of
the
to
former
include
federal
race
Administrative
agency
to
discrimination
Procedure
Act).
the
extent
claims
and
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
because
it
is not
that
Plaintiffs'. Motion should be denied
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,
Arkansas
Securus contends that Plaintiffs'
counsel
for Mojica,
complaints in both cases,
and the
cooperation with
similarities between the
is evidence of bad faith.
There is absolutely nothing to support this claim.
Id. at 7-8.
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
Without
the Western District of Arkansas.
predicting
the
merits
of
future
motions
Id.
to
at
11.
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
·i'
ability
to
proceed
in
this
Court,
and
therefore
is
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
contends
are
that
time-barred.
Plaintiffs
claims back to 2000.
I
.i
See
Securus
cannot
relate
Opp' n
their
at
13.
Securus
non-CCA facility
Plaintiffs do not seek to do so.
Because
Plaintiffs limit these claims to the 2-year statute of limitations
period,
which
Securus
arguments fail.
See Am.
acknowledges,
Compl.
~
49
Securus's
time-barred
(limiting non-CCA facility
class from May 15, 2013, to present); Securus Opp'n at 13-14 (nonCCA 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.
damages under 47 U.S.C.
§§
If and when the Court determines
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
arguments,
there
has
is
no
already
need
rejected
Defendants'
address
them again
to
prejudice
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-
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