On March 12, 2015, three residents of Clanton, Alabama, filed this lawsuit in the U.S. District Court for the Middle District of Alabama. Represented by attorneys from the Southern Poverty Law Center, the plaintiffs sued the Judicial Correction Services, Inc. ("JCS") and the City of Clanton. The plaintiffs filed their complaint pursuant to 8 U.S.C. § 1964(c) (RICO). They alleged that Clanton and JCS had entered into a contract where individuals who were unable to pay fines or court costs resulting from an arrest for a traffic violation or misdemeanor must enter "pay-only probation." Pay-only probation required these individuals to make regular payments to JCS and regularly report to a JCS employee in order to avoid being arrested again. The plaintiffs claimed that this effectively created a racketeering enterprise that extorted money from impoverished individuals under threat of jail and misused the criminal justice system for profit. As such, the plaintiffs requested declaratory and injunctive relief, voiding the contract between Clanton and JCS, as well as monetary damages.

The plaintiffs struggled to pay the monthly fees under the direct and indirect threats of incarceration by JCS employees. In order to pay, the plaintiffs skipped meals, stopped paying their other bills, and took out high-interest predatory loans.

On March 30, 2015, the plaintiffs filed an amended complaint and also moved for class certification and a preliminary injunction. On April 21, 2015, both JCS and the City of Clanton moved to dismiss for failure to state a claim and lack of jurisdiction. The court denied this motion on April 28, 2015.

On June 16, 2015, the plaintiffs moved to dismiss the City of Clanton as a defendant, noting in an attached exhibit that the plaintiffs had reached a settlement agreement with Clanton. The agreement stipulated that Clanton had terminated its contract with JCS and that those with JCS pay-only probation would instead report directly to the Clanton Municipal Court. The agreement was set to be effective for five years. The settlement agreement required that if the City of Clanton enter into a contract with any probation-related or money-collection-related services within five years of June 16, 2015, the City must provide notice to the plaintiff's counsel. The plaintiffs waived any claim for costs or fees including attorney's fees in the settlement. On June 19, 2015, District Judge Myron H. Thompson entered judgment dismissing the City of Clanton and denying the City's motion to dismiss as moot. The case against JCS continued. The plaintiffs also moved to withdraw their motion for a preliminary injunction and class certification, which the court granted on July 7, 2015.

On August 19, 2016, the plaintiffs filed notice that the parties had reached a settlement agreement in principle. The court stayed further proceedings on August 24, 2016, as the parties finalized their settlement agreement. In a status report filed on December 7, 2016, the parties indicated they had finalized a settlement agreement, which was awaiting approval by the Bankruptcy Court where a plaintiff currently had proceedings. The status report indicated the parties would file a stipulation of dismissal once the Bankruptcy Court approved the settlement.

In Bankruptcy Court, Dwight H. Williams, Jr. approved a settlement agreement on December 8, 2016. The terms of the settlement agreement with JCS were confidential. Back in Civil District Court, on December 13, 2016, the parties filed a stipulation of dismissal. The court dismissed the case with prejudice the next day, December 14, 2016.

Following this suit, JCS was no longer being contracted by the state of Alabama. 115 other U.S. cities stopped contracting with JCS after the foreign company was identified as a predatory and illegal business.

As of November 21, 2019, there was no additional activity on this case, though the plaintiffs’ settlement with the City of Clanton remained in effect. The settlement is ongoing and set to expire in June 2020. As of June 1, 2020, there has been no additional activity.

John He - 10/19/2015
Virginia Weeks - 02/04/2018
Emma Himes - 06/01/2020


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