Pearson v. Hodgson
Pearson v. Hodgson
Opinion of the Court
I. Introduction
This case challenges costs imposed by a provider of inmate telephone services on the recipients of telephone calls made by inmates in Bristol County, Massachusetts, and paid by the provider as commissions to the Bristol County Sheriff's Office. Before the court is Defendant Thomas M. Hodgson's ("Sheriff Hodgson") Motion to Dismiss [# 26] and Defendant Securus *200Technologies, Inc.'s ("Securus") Motion to Dismiss [# 28]. Finding that the Complaint [# 1-1] states claims upon which relief may be granted, but that certain matters alleged may not proceed, the motions are ALLOWED in part and DENIED in part.
II. Factual Background
The facts alleged in the Complaint [# 1-1] are as follows. Thomas M. Hodgson is the Sheriff and head of the Bristol County Sheriff's Office (the "Sheriff's Office"). Compl. ¶ 4 [# 1-1]. In May 2011, the Sheriff's Office issued a "Request for Responses" seeking bids to operate the inmate telephone calling services ("Inmate Calling Services") at the Bristol County Jail, Bristol County House of Correction, Bristol County Sheriff's Office Women's Center, Carlos Carreiro Immigration Detention Center, and Ash Street Jail and Regional Lock-Up (collectively, "Bristol County Correctional Facilities").Id. ¶¶ 18, 28. Section 5.1.21 of the Sheriff Office's Request for Responses required each bidder to include in its bid site "commissions" or other "compensations" that the bidder would pay to the Sheriff's Office based on gross revenues that the bidder receives from operating its Inmate Calling Services. Id. ¶¶ 29-30.
On May 23, 2011, Securus responded to the Sheriff Office's Request for Responses and offered to pay to the Sheriff's Office monthly site commission payments in the amount of 48% of Securus's gross revenues from the Inmate Calling Services at the Bristol County Correctional Facilities if Securus was awarded the contract. Id. ¶¶ 31, 34. On August 8, 2011, the Sheriff's Office awarded Securus a five-year exclusive contract to operate the Inmate Calling Services at the Bristol County Correctional Facilities through a Coinless Inmate & Public Telephone System. Id. ¶ 32. The contract included Securus's payment of site commissions as one of its contractual terms and provided options for four additional one-year contract renewals. Id. ¶¶ 2, 33-34.
From August 2011 to June 2013, Securus operated the Inmate Calling Services for the Bristol County Correctional Facilities and paid the Sheriff's Office monthly site commissions totaling $ 1,172,748.76. Id. ¶ 35. This amounted to nearly half of all gross revenues that Securus received from collect and debit calls made from the Bristol County Correctional Facilities. Id. ¶ 23. Securus passed on the cost of these site commission payments to the recipients of telephone calls from the Bristol County Correctional Facilities, including inmates' families, friends, attorneys, and others, by nearly doubling the cost of receiving credit and debit telephone calls made from the Bristol County Correctional Facilities. Id. ¶¶ 1-2, 24. The additional charge was used to pay these site commissions and bears no relationship to the actual cost of providing Inmate Calling Services or the quality of the Inmate Calling Services. Id. ¶¶ 21-25. This contract remained in effect for over four years. Id. ¶¶ 32, 41.
In 2013-2014, the Federal Communications Commission ("FCC") limited interstate site commissions by requiring that rates for inmates' interstate telephone calls be based on the cost of operation, and finding that site commission payments are not a legitimate cost of providing Inmate Calling Services. See Id. ¶¶ 36-37. In August 2016, the FCC attempted to set rate caps for local and long-distance inmate calling, but those rates were stayed by a court order. Id. ¶ 40 (citing Order, Securus Techs. v. FCC, No. 16-1321,
On October 21, 2015, the Sheriff's Office and Securus amended the contract by altering the form and timing of the site *201commission payments. Id. ¶ 42. In lieu of monthly site commission payments, the amendment provided that Securus would pay the Sheriff's Office a lump-sum payment of $ 820,000 for the duration of the contract term, ending June 30, 2020. Id. ¶¶ 42-43. In exchange, Securus retained its exclusive contract with the Sheriff's office for an additional four years. Id. ¶ 44. While the form and timing of the site commission payments differed, Securus continues to increase the cost of calls from Bristol County Correctional Facilities and uses the additional charge to compensate the payment to the Sheriff's Office. Id. at ¶ 46. The contract remains in effect today. See id. ¶¶ 42-43, 46.
Up until June 2016, Securus filed a tariff, or a filing of its Inmate Calling Services call rates, with the Massachusetts Department of Telecommunications and Cable ("DTC"). In June 2016, the DTC limited intrastate calling rates to the same rates set by the FCC for interstate Inmate Calling Services. Id. ¶ 47. On August 1, 2016, Securus withdrew and cancelled its tariff with the DTC, claiming exemption from regulation under Mass. Gen. Laws c. 25C, § 6A. Id. ¶ 48. Since then, Securus has charged Inmate Calling Service consumers more than the DTC rates for intrastate calls. Id. ¶ 49.
Plaintiff Kellie Pearson ("Pearson") received and paid for phone calls from her deceased fiancé, Michael T. Ray, while he was incarcerated at the Bristol County House of Corrections from September 2015 to June 2017. Id. ¶ 12. While incarcerated, Mr. Ray regularly called to speak to Pearson and their daughter. Id. Pearson states that the high cost of Securus phone calls placed a financial strain on her, forced her to decide whether to pay to receive her fiancé's calls or pay other bills, and caused stress to both her and Mr. Ray. Id.
Plaintiff Roger Burrell ("Burrell") was previously incarcerated at the Bristol County House of Corrections, where he used the Inmate Calling Services operated by Securus to call his mother, sister, and legal counsel, all of whom are Massachusetts residents. Id. ¶ 13. Burrell could not write letters by hand due to a medical issue. Id. The cost of Securus phone calls subjected his mother and sister to financial hardship and prevented them from having more regular contact with Burrell. Id.
Plaintiff Brian Givens ("Givens") was previously incarcerated at the Bristol County House of Corrections, during which time he called his attorney and his friend to coordinate his medical, financial, and legal needs. Id. ¶ 14. Both his attorney and his friend were Massachusetts residents. Id. He also regularly called his grandmother. Id. Givens felt anxious and alone when he was unable to reach his loved ones, and the cost of the phone calls was a source of hardship for himself and the recipients of his calls. Id.
Plaintiff The Law Offices of Mark Booker is a criminal defense law firm in Boston that receives and pays for calls from its incarcerated clients. Id. ¶ 15. Those calls include calls from clients at Bristol County Correctional Facilities. Id.
III. Procedural History
On May 2, 2018, Plaintiffs filed this putative class action Complaint [# 1-1] in the Massachusetts Superior Court alleging that payments made by Securus to the Sheriff's Office violate Massachusetts state law and the Massachusetts Constitution. See Compl. [# 1-1]. Defendants removed the case to this court later that month, basing subject matter jurisdiction on the Class Action Fairness Act,
Plaintiffs seek injunctive relief on their own behalf and on behalf all Massachusetts residents who reasonably anticipate or expect to use Securus's Inmate Calling Services to make or receive phone calls from Bristol County facilities in the future.
Counts I through IV of Plaintiffs' Complaint [# 1-1] are brought against Sheriff Hodgson. Count I seeks a declaratory judgment that the monthly site commissions and lump sum payments included in Securus's contract with the Bristol County contract is contrary to Massachusetts State law and the Supreme Judicial Court's Decision in Souza v. Sheriff of Bristol County,
Counts V and VI are brought against Securus. Count V alleges that Securus committed the tort of conversion by taking the class members' money through coercion and without legal authority to do so.
Sheriff Hodgson and Securus moved to dismiss. Sheriff Hodgson's Mot. to Dismiss ("Sheriff's MTD") [# 26]; Securus's Mot. to Dismiss ("Sec. MTD") [# 28].
IV. Preliminary Matters
First, a bit of housekeeping. Plaintiffs' Complaint [# 1-1] is unclear as to the relief being sought against Sheriff Hodgson. Plaintiffs stated in their Opposition to Sheriff [ ] Hodgson's Motion to Dismiss ("Pls.' Opp'n to Sheriff's MTD") [# 34] and at the hearing on these motions that they only seek equitable relief against Sheriff Hodgson. Plaintiffs further stated at the hearing that, despite naming Sheriff Hodgson in both his individual and official capacity, they do not object to dismissal of claims against Sheriff Hodgson in his individual capacity. Accordingly, to the extent that the Plaintiffs assert claims against Sheriff Hodgson in his individual capacity or seek monetary damages from Sheriff Hodgson in either his individual or official capacity, such claims are DISMISSED.
Next, Plaintiffs Burrell and Givens, two former inmates at Bristol County Correctional Facilities, seek injunctive relief. Defendants argue that because Plaintiffs Burrell and Givens were released from custody prior to the filing of this Complaint [# 1-1], their claims for injunctive relief are moot. Therefore, they lack standing to bring these claims. Plaintiffs concede that Plaintiffs Burrell and Givens were released from custody and that their claims for injunctive relief are moot. In light of this concession, any claims for injunctive relief on behalf of Plaintiffs Burrell or Givens are also DISMISSED.
*203V. Standard of Review
To survive a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the Plaintiffs' Complaint [# 1-1] must "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550. U.S. 544, 570,
VI. Sheriff Hodgson's Motion to Dismiss
A. Count I - Contravenes Souza
In count 1, Plaintiffs contend that Sheriff Hodgson violated state law, as construed by Souza,
In Souza, the plaintiffs challenged the imposition of certain fees that the sheriff of Bristol County imposed on inmates in his custody for their "cost of care," medical care, haircuts, and GED testing.
Sheriff Hodgson argues that Plaintiffs read Souza too broadly, and that the comprehensive statutory scheme alleged to have been violated in Souza does not apply to the site commissions for three reasons. Sheriff Hodgson's Mem. in Support of its Mot. to Dismiss ("Sheriff's Mem.") 7-8 [# 27]. He argues first that unlike the fees at issue in Souza, the Sheriff's Office is not deducting money from inmate funds but instead collecting payments contractually agreed to by Securus. Id. at 8. He also contends that Souza is in applicable because the Sheriff's Office is not the one charging any fees to Plaintiffs. Id. Third, he argues that the fees at issue in Souza related to fees that sheriffs could charge "in the performance of their duties," whereas the site commissions at issue here are simply a contractual arrangement with a private telecommunications company. Id.
*204Sheriff Hodgson's argument that Souza's framework does not apply falters for several reasons. First, while the fees invalidated in Souza were deducted directly from inmates' accounts, Souza's holding was not limited to determining what fees sheriffs may deduct from inmates' accounts. See
Second, although it is Securus, and not the Sheriff's Office, that is collecting telephone fees from the Inmate Calling Services call recipients, Plaintiffs challenge is to the Sheriff's Office's collection of revenue in the performance of the Sheriff's duties, see 103 Code Mass. Regs § 948.10 -and not Securus's collection of the telephone fees that it does not pass back to the Sheriff. Allowing county correctional facilities to collect fees in excess of those allowed by the legislature by hiring a third-party vendor to collect those fees runs afoul of Souza. See
Finally, Sheriff Hodgson's claim that the Sheriff's Office is not collecting any fees "in the performance of [its] duties," but rather that he is exercising his right to enter into a private contract, is to no avail. Providing the Bristol County correctional facility inmates reasonable access to public telephone calls is one of the sheriff's duties, see 103 Code Mass. Regs. § 948.10, and the contract with Securus-including the requirement that Securus make commission payments to the Sheriff's Office-was done in executing that duty. "The Legislature has expressly authorized sheriffs to charge certain fees in the performance of their duties." Souza,
Sheriff Hodgson contends that even if the site commission payments fall within the legislative scheme addressed in Souza, receiving site commissions to fulfill his duty cannot be inconsistent with that scheme as Massachusetts has indicated a policy choice in favor of site commissions. Sheriff's Mem. at 1 [# 27]. Sheriff Hodgson notes that there are no Massachusetts laws, regulations, or rules prohibiting site commissions at the county level, and the Massachusetts legislature has explicitly approved them in state prisons. Id. at 1, 9 (citing
*205But, as the Supreme Judicial Court made clear in Souza, simply because the legislature has allowed a state-level official to engage in certain actions or collect certain fees does not grant a county sheriff the same authority. See, e.g.,
The Sheriff's reliance on the lack of an express prohibition on his collection of site commissions is the same argument that was rejected in Souza, where the sheriff argued that he could collect the challenged fees because "nothing in the statutory scheme proscribes them."
Accordingly, "in the absence of specific legislative authority for the challenged [site commissions], they are invalid."
B. Counts II - Improper Collection of Revenue
In counts II, III, and IV, Plaintiffs further challenge the legal status of payments made by Securus to the Sheriff's Office, to the extent that they are funded by increasing the cost of Inmate Calling Services well beyond the true cost of providing the service. Plaintiffs allege that Sheriff Hodgson is improperly collecting revenue, in the form of an unlawful fee or unlawful tax on the end users, through a third-party intermediary without having the statutory authority to do so.
Sheriff Hodgson states that these claims must be dismissed because the site commissions were voluntary payments by Securus not associated with any government benefit and therefore, because they were not mandatory, are not an unlawful tax. Sheriff's Mem. 10-11 [# 27]. Sheriff Hodgson further argues that the contractual terms with Securus were not fees because the payments were not in exchange for a governmental service, and, even if construed as fees, were not unlawful.
Regardless of whether they are considered a fee or a tax, Plaintiffs' allegations provide plausible grounds that the site commissions and lump sum payments were unlawful monetary payments exacted from them and other Inmate Calling Services consumers without legislative authority. See Bell Atl., 550 U.S. at 555-58,
Given these allegations, in light of the court's finding as to count 1, see supra Part V (A), Plaintiffs have complied with Federal Rule of Civil Procedure 8(a)(2)'s pleading requirement that Plaintiffs plead factual content which "allows the court to draw the reasonable inference that [D]efendant[s] [are] liable for the misconduct alleged." Iqbal,
For the foregoing reasons, Sheriff Hodgson's Motion to Dismiss [# 26] is also DENIED as to counts II, III, and IV.
VII. Securus's Motion to Dismiss
A. Count V - Conversion
In count V, Plaintiffs allege that Securus coerced or otherwise took Plaintiffs' money, in the amount of the inflated cost for the Inmate Calling Services from the Bristol County Correctional Facilities, without the legal authority to do so. Compl. ¶¶ 91-93 [# 1-1]. Securus argues that count V must be dismissed because Plaintiffs' allegations do not meet the necessary elements of the tort of conversion. Specifically, Securus argues that their conduct is not wrongful because Plaintiffs voluntarily accepted and paid for Securus's Inmate Calling Services without any misrepresentation or fraud by Securus. Securus' Memorandum in Support of Mot. to Dismiss ("Sec. Mem.") 6-9 [# 29].
To prove the tort of conversion under Massachusetts law, Plaintiffs must show that Securus (1) exercised ownership or control over the plaintiffs' personal property; (2) intentionally and wrongfully; and (3) at the time when the Securus had no legal right of possession over that property. Beliveau v. Ware,
Plaintiffs concede that Inmate Calling Services consumers agreed to pay for Inmate Calling Services phone calls, but cite Commonwealth v. DeCotis,
*207Plaintiffs citation to DeCotis does not stand for the proposition for which they offer it. In DeCotis, the Massachusetts Attorney General brought suit pursuant to M.G.L. ch. 93A, § 4 against defendants that managed a mobile home park and required their tenants to pay the defendants a resale fee when those tenants sold their mobile homes.
Here, while Plaintiffs may, and do, argue that the increased rate was unfair, see infra Part VI(B), they have failed to sufficiently plead that Securus committed the tort of conversion. The court need not accept as true Plaintiffs' charge that Securus coerced them in to paying the charged fee for Inmate Calling Services without appropriate factual support to establish a plausible claim of conversion. See Air Sunshine, Inc. v. Carl,
Accordingly, Securus's Motion to Dismiss [# 28] is ALLOWED in regard to count V.
B. Count VI - Chapter 93A
Finally, Plaintiffs claim that Securus engaged in unfair or deceptive acts or practices including, but not limited to, charging inflated amounts from the putative monetary relief class in order to make unlawful payments to the Sheriff's Office, taking Plaintiffs' money through coercion, and using funds derived from inmates' telephone calls to make payments to the Sheriff's Office that contravene Massachusetts statutes and regulations. Compl. ¶ 97 [# 1-1]. Plaintiffs allege that Securus's actions violate Mass. Gen. Laws ch. 93A, § 2, and 940 C.M.R. § 3.16(2), and that Plaintiffs have suffered monetary harm as a result of these unfair and deceptive practices. Id. ¶¶ 96, 99.
Securus argues that Plaintiffs' chapter 93A claim must be dismissed as a matter of law. As reasons therefore, Securus first states that because Plaintiffs' claim is dependent on their legally invalid claim for conversion and does not allege that Securus made any misrepresentations other than those asserted in count V, their chapter 93A claim cannot stand on its own. Sec. Mem. 10 [# 29]. Next, Securus says that Plaintiffs should not be able to allege unfair or wrongful conduct where Massachusetts has expressly allowed site commission, and where Plaintiffs admit that Securus was simply passing on its costs of doing business with the Sheriff's Office. Id. at 12-14. Finally, Securus states that because it filed tariffs with the DTC from 2011 until it withdrew the tariff in August 2016, the filed rate doctrine bars recovery for any challenged conduct that occurred prior to August 1, 2016. Id. at 14.
"Although whether a particular set of facts constitutes unfair or deceptive acts or practices ordinarily is a question of fact, the boundaries of what may qualify for consideration as a chapter 93A violation is a question of law."
*208Indus. Gen. Corp. v. Sequoia Pac. Sys. Corp.,
While a chapter 93A claim may fail when the cause of action upon which it is based is not legally viable, Sec. Mem. 10-11 [# 29] (citing cases), the case law makes clear that this need not be the case. See Mass. Farm Bureau,
In DeCotis, in finding the resale fees for mobile homes located in the defendants' mobile home park to be unfair for purposes of chapter 93A, the Massachusetts Supreme Judicial Court highlighted the fact that the defendants furnished no goods or services to the plaintiffs in connection with the resale of the mobile homes located in defendants' mobile home park, that the defendants imposed the resale provision on persons of limited means and with limited choices for housing, and that the defendants were able to enforce the resale fee only because the tenants had no reasonable alternatives but to agree to pay.
Securus's second argument fairs no better because, even where the Massachusetts has allowed the Department of Corrections *209to collect site commissions, no such law expressly allows county sheriffs to do the same. Therefore, Sheriff Hodgson's collection of revenue from Securus in the form of site commissions or lump sum payments violates Massachusetts state law as construed in Souza. See supra Part V (A). And, while Securus may simply be passing on the cost of its contractual obligations, Plaintiffs allegations establishing that Securus is doing so in a manner that helps Sheriff Hodgson circumvent state law is enough to survive a motion to dismiss.
Finally, at this stage, the filed rate doctrine provides Securus no more protection than the prior two arguments. The filed rate doctrine "limits attacks outside the regulatory process on tariffed rates filed with ... regulatory agencies." Town of Norwood v. New Eng. Power Co.,
However, this is not a case in which Plaintiffs are alleging that a contractual rate that they had with Securus differed from the rates that Securus filed with the DTC. While parts of Plaintiffs' Complaint [# 1-1] may implicate the cost of Inmate Calling Services that Securus charged Plaintiffs, at least part of Plaintiffs' chapter 93A claim makes clear that Plaintiffs are challenging Securus's act of "using funds derived from the telephone calls [to] pay 'commissions' and prearranged lump-sum payments to the [Sheriff's Office] in violation of Massachusetts statutes and regulations." Compl. ¶ 97(c) [# 1-1]. Therefore, Plaintiffs' challenge to Securus's payments to the Sheriff's Office under the contract stands independent of any challenges to the specific rates charged. See, e.g., Stote,
On the circumstances of this case, the court finds that Plaintiffs have pled sufficient facts that the additional fees charged by Securus to pay the Sheriff's Office unlawful site commissions or lump sum payments violates Mass. Gen. Laws ch. 93A. Securus's Motion to Dismiss [# 28] is DENIED as to Plaintiff's chapter 93A claim (count VI).
VIII. Conclusion
For the foregoing reasons, the court ALLOWS in part and DENIES in part *210Sheriff Hodgson's Motion to Dismiss [# 26] and Securus's Motion to Dismiss [# 28].
As the motions pertain to claims for injunctive relief on behalf of Plaintiffs Burrell and Givens, both motions are ALLOWED. To the extent that Plaintiffs' Complaint [# 1-1] asserts claims against Sheriff Hodgson in his individual capacity or seeks monetary damages from Sheriff Hodgson in either his individual or official capacity, Sheriff Hodgson's motion is ALLOWED. Sheriff Hodgson's motion is otherwise DENIED. Securus's motion is ALLOWED as it relates to count V for conversion, but is DENIED as it pertains to count VI under Mass. Gen. Laws ch. 93A.
IT IS SO ORDERED.
In his reply, Sheriff Hodgson contends further that Plaintiffs do not have standing to argue that these were unlawful fees or taxes on Securus. Sheriff's Rep. 7 [# 41]. But Plaintiffs are contending that this fee or tax is imposed on the end user, and that they are directly affected by the requirement that Securus make such payments. See Spokeo, Inc. v. Robins, --- U.S. ----,
Reference
- Full Case Name
- Kellie PEARSON, Roger Burrell, Brian Givens, and the Law Offices of Mark Booker, on Behalf of Themselves and Those Similarly Situated v. Thomas M. HODGSON, Individually and His Official Capacity as Sheriff of Bristol County, and Securus Technologies, Inc.
- Cited By
- 1 case
- Status
- Published