Are Private Prisons Suing States for Millions of Contract Quotas?


A long-popular October 2018 Facebook post continued spreading through late 2019, alleging that private prisons were suing states over unmet contract quotas promising a minimum number of profitable inmates.

A status update read “SO WE JUST NOT GOING TO TALK ABOUT IT!” Alongside that commentary was the following image of an unidentified print article, suggesting that the clipping was reported as news in a newspaper:

A June 2015 post to Reddit’s r/politics featured the same headline with additional content:

Private prisons suing states for millions if they don’t stay full: “Those quotas can range from a mandatory occupancy of, for example, 70 percent occupancy in California to up to 100 percent in some prisons in Arizona.” from politics

That post linked to an editorial dated September 26 2013, published by the site did not feature an “about” page or a masthead, and we were unable to find any information via the site itself about the nature of its content.

In contrast with the newspaper-style version in the image, the actual title of the piece was:

What?!? Private prisons suing states for millions if they don’t stay full

A subheading matched the image:

Low crime rates bad for business for private prisons; they demand states keep them full

Based on the excerpted portion in the image, it seems reasonable to conclude that the piece reported on lawsuits lodged by private prisons against state governments after those governments failed to meet incarceration “lockup quotas,” since the headline claimed that private prisons were “suing states for millions if they don’t stay full.”

But what the article actually went on to say was:

The prison-industrial complex is so out of control that private prisons have the sheer audacity to order states to keep beds full or face their wrath with stiff financial penalties, according to reports. Private prisons in some states have language in their contracts that state if they fall below a certain percentage of capacity that the states must pay the private prisons millions of dollars, lest they face a lawsuit for millions more.

It would be reasonable to presume the claims were predicated on the existence of specific contracts with specific language mandating prisoner quotas, and that failure to meet those quotas resulted in private prisons suing state governments. However, that very first paragraph contained the slippery phrasing “according to reports” without mentioning whose, and the piece’s sole mention of lawsuits seemed to be speculative in tone (“lest they face…”) went on to reference (but not link anything related to) an investigation by a group called In the Public Interest; the article itself was written by a staffer who mainly covered entertainment. It mentioned a purported offer made by Corrections Corporation of America (CCA, now rebranded as CoreCivic) in 2012 “to governors of 48 states to operate their prisons on 20-year contracts.” Whether that offer was accepted or resulted in any business between the corporation and any or all 48 states was not reported.

The story continued:

In the Public Interest has reviewed more than 60 contracts between private prison companies and state and local governments across the country, and found language mentioning “quotas” for prisoners in nearly two-thirds of those contracts reviewed. Those quotas can range from a mandatory occupancy of, for example, 70 percent occupancy in California to up to 100 percent in some prisons in Arizona.

… The offer included a demand that those prisons remain 90 percent full for the duration of the operating agreement. You know what that means: if there are not enough prisoners then there will be an unspoken push for police to arrest more people and to have the courts send more to prison for petty, frivolous and nonviolent crimes. There will also be a “nudge” for judges to hand down longer or maximum sentences to satisfy this “quota.”

… When the crime rate drops so low that the occupancy requirements can’t be met, taxpayers are left footing the bill for unused facilities.

The report found that 41 of 62 contracts reviewed contained occupancy requirements, with the highest occupancy rates found in Arizona, Oklahoma and Virginia.

Despite the headline claims of “private prisons suing states for millions,” initially the article softened its claims to “lest [states] face” the purported lawsuits. In the Public Interest’s research purportedly “found language mentioning ‘quotas’” in some contracts they reviewed, but there was no information about whether those quotas were acted upon.

Finally, the story contained a claim that the offer included a “demand” that private prisons remain 90 percent full for the agreement’s duration (assuming any agreement was adopted in the first place.) Immediately thereafter, they go on to reference “an unspoken push” for the arrest and incarceration of non-violent offenders, stacking inferences and presenting them as existing occurrences in a headline that remained viral years later.’s editorial seemed to be based on a report from In the Public Interest titled “Criminal: How Lockup Quotas and “Low-Crime Taxes” Guarantee Profits for Private Prison Corporations.” As noted in the op-ed shown on Facebook, In the Public Interest maintained that the contracts included inmate quotas:

65 percent of the private prison contracts ITPI received and analyzed included occupancy guarantees in the form of quotas or required payments for empty prison cells (a “low-crime tax”). These quotas and low-crime taxes put taxpayers on the hook for guaranteeing profits for private prison corporations.

As the excerpt above shows, that was presented in the form of tax-funded shortfalls for under-occupancy prisons, not necessarily “private prisons suing states for millions” or convictions necessarily stemming from such contracts.

In the Public Interest highlighted three particular states in which quotas proved either costly, high, or both:

• Colorado: Though crime has dropped by a third in the past decade, an occupancy requirement covering three for-profit prisons has forced taxpayers to pay an additional $2 million.
• Arizona: Three Arizona for-profit prison contracts have a staggering 100% quota, even though a 2012 analysis from Tucson Citizen shows that the company’s per-day charge for each prisoner has increased an average of 13.9% over the life of the contracts.
• Ohio: A 20-year deal to privately operate the Lake Erie Correctional Institution includes a 90% quota, and has contributed to cutting corners on safety, including overcrowding, areas without secure doors and an increase in crime both inside the prison and the surrounding community.

Neither the original report nor its attendant long-form version [PDF] mentioned private prisons suing or private prison lawsuits over contract quotas. In its longer report, the group fairly notes that prison quotas inherently provide incentives incarceration, but also force the public to bear the brunt of the risks of prison population variances:

By contractually requiring states to guarantee payment for a large percentage of prison beds, the prison companies are able to protect themselves against fluctuations in the prison population. These provisions guarantee prison companies a consistent and regular revenue stream, insulating them from ordinary business risks. The financial risks are borne by the public, while the private corporations are guaranteed profits from taxpayer dollars. said In the Public Interest “reviewed more than 60 contracts between private prison companies and state and local governments across the country,” suggesting that an emphasis on states and a widespread sample. In their report, ITPI said it “identified 77 county and state-level private facilities nationwide and collected and analyzed 62 contracts from these facilities.” Although there are 50 states in the US, there are 3,007 counties alone (not to mention other jurisdictions). Overall, any given state has an average of 62 counties; Texas alone has has 254.

A large number of articles about prison quotas linked back to the 2013 ITPI report, citing its figures and details. One of those outlets was the Huffington Post, whose September 2013 report mentioned an instance of threatened legal action over unmet prison quotas:

[In 2011, private prison company] Management & Training Corp., threatened to sue the state. A line in their contract guaranteed that the prison would remain 97 percent full. They argued they had lost nearly $10 million from the reduced inmate population.

State officials renegotiated the contract, but ended up paying $3 million for empty beds as the company continued to address problems, according to state documents and local news accounts.

Circumstances of that legal dispute were slightly more complicated, though, and they involved an inmate transfer after a larger dispute over alleged mismanagement of one facility. In the ensuing months, Arizona’s Department of Corrections rehoused 200 inmates and refused to honor a contract, alleging that the private prison was improperly administrated:

In July 2010, three prisoners escaped from the Kingman facility, leading authorities on a two-week, multi-state manhunt that ended only after the escapees had brutally murdered an Oklahoma couple as they were driving through New Mexico. In the aftermath, the [Arizona Department of Corrections] found gross mismanagement at the Kingman prison complex, including malfunctioning alarms and other serious security breaches.

ADC Director Charles Ryan ordered over 200 “high-risk” prisoners removed from the Kingman complex, stopped sending new prisoners to the facility for nearly a year while MTC addressed security lapses and refused to honor the state’s contract with the company, which included a 97% bed guarantee.

In January 2011, MTC filed a claim against the ADC for failing to meet its contractual obligations related to the lockup quota, asking for almost $10 million to cover the company’s losses under the bed guarantee. State prison officials relented, agreed to honor the 97% quota beginning May 1, 2011 (although the empty beds were not filled by then) and paid MTC $3 million in damages.

All of which is not to say that there are not broader disputes over the ethics of privatizing prisons. A 2016 documentary by filmmaker Ava DuVernay called 13th examined private prisons in general, and the intersection of “race, justice, and mass incarceration in the United States.”

Similarly, the 2009 “kids-for-cash” scandal (resulting in a documentary of the same name) involved uncovered judicial corruption in Luzerne County, Pennsylvania. Before that corruption was uncovered, thousands of children were incarcerated across two private facilities. After the scheme came to light, two judges and a co-owner of the facilities were found guilty, and all juvenile convictions under one of the judges were expunged:

The scope of the violations of the children’s rights in Luzerne County turned out to be more egregious than anyone could have imagined. From 2003 to 2008, the Luzerne County judicial corruption scandal altered the lives of more than 2500 children and involved more than 6000 cases. Over 50 percent of the children who appeared before Ciavarella lacked legal representation; 60 percent of these children were removed from their homes. Many of them were sent to one or both of the two facilities at the center of the corruption scandal. Believed to be the largest judicial corruption scandal in our history, the story was featured in a 2009 episode of ABC’s “20/20.”

For their involvement in the “kids-for-cash” scandal, Judge Michael Conahan, the facilities’ former co-owner Robert Powell, and the developer Robert Mericle pled guilty to federal criminal charges; Judge Mark Ciavarella was found guilty of various federal crimes following his trial in 2011. In 2009, the Pennsylvania Supreme Court vacated the adjudications of all youth who appeared before Ciavarella between 2003-2008, dismissed their cases with prejudice and ordered all of their records expunged.

The closure of a for-profit prison in New Mexico in 2017 due to low inmate populations was reported as having an adverse effect on the local economy. Private prisons can pull up stakes and leave town more easily when fewer inmates leads to reduced profit, leading to the loss of 200 jobs in that instance alone. Corrections officer job security is, of course, not a good reason to jail people, but state corrections officers might be likelier to obtain a transfer or reassignment, and the effects reverberated in the small jurisdiction:

Following the company’s announcement [of the prison’s closure], the county released a statement lamenting the news. Two hundred prison employees would be laid off. The town of Estancia would lose $700,000 in annual tax and utility payments and the surrounding county, Torrance, would give up roughly $300,000. The sheriff’s office will have to find another facility to house the 50-75 county inmates usually held at the facility.

Belinda Garland, the county manager, told Quartz that 200 jobs are a significant loss for the county, where the median household income is $32,000 ($12,000 less than the state overall). The money the prison brings in for the town is roughly 60% of its annual budget. This means cuts for schools, roads, the fire and police departments, among other services. “The county is very concerned with this closure,” she said.

Prison privatization has also had an effect on immigration policy. An August 2018 report from criminal justice reform organization The Sentencing Project alluded to private prisons’ alarming impact on immigration and detention policy, with firm quotas in place:

In 2002, approximately 4,800 Immigration and Customs Enforcement (ICE) detainees were held in privately run facilities. By 2017, that number had jumped to 26,249 people. This expansion of detention was influenced by a shift in immigration policy enforcement.

Beginning in 2009, Congress established a quota for immigrant detention beds under appropriations law, requiring that the Department of Homeland Security’s (DHS) funding be linked to maintaining 33,400 immigration detention beds a day even if there were not a sufficient number of people in detention to fill them. By fiscal year 2013 the quota was raised to 34,000 beds. In 2014, a major influx of migrants from Central America led to an expansion of immigration detention under the Obama Administration. Individuals fleeing violence in Honduras, El Salvador and Guatemala crossed the Southern border in search of asylum; many families were held in privately-run family detention centers. Incidents of assault, hunger protests, and medical neglect were reported at these facilities.

A viral Facebook post depicted what looked like a newspaper article with the headline “Private prisons suing states for millions if they don’t stay full.” We found no indication that article was ever published in print, and its full text demonstrated a speculative view of the admittedly ethically dicey topic of private prisons. The ITPI report focused on the cost of quotas to state taxpayers versus the ephemeral and nebulous (but clearly incentivized) prospect of increased convictions to make up the contracted shortfall. Private prison quotas do exist, but typically result in taxpayer bills or prison closures if not met.

The only instance of a private prison suing a state over “quotas” was a 2011 dispute between Arizona and a private prison company over a large transfer of prisoners following an escape.

The post Are Private Prisons Suing States for Millions of Contract Quotas? appeared first on Truth or Fiction?.

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