On October 1, 2015, a group of indigent Rutherford County, Tennessee residents who received sanctions for failing to pay probation fees, filed a class action suit against the county and Providence Community Corrections, Inc. (PCC), a private contractor overseeing probation. The plaintiffs alleged that: 1) the arrangement between PCC and Rutherford County constituted racketeering; 2) PCC's personal financial interest in the outcome of judicial proceedings violated the plaintiffs' due process rights; 3) the contract between PCC and the county was void under Tennessee law; 4) PCC's threats to jail plaintiffs over nonpayment of debts are unduly harsh and punitive; 5) PCC's further actions of placing debts, issuing arrest warrants, and jailing individuals solely based on wealth status or nonpayment of debts was a violation of the Fourteenth Amendment; and 8) Rutherford County and PCC’s actions were a general abuse of the legal process. On the same day that plaintiffs filed their complaint, they moved the court for a Temporary Restraining Order and Preliminary Injunction. The case was assigned to Judge Kevin Sharp.

The action arose under 18 U.S.C. § 1964(c) (RICO), and 28 U.S.C. § 2201, et seq. and 42 U.S.C. § 1983 because of alleged violations of the plaintiff’s Fourth, Sixth, and Fourteenth Amendments rights. Plaintiffs sought a declaratory judgment that Defendants' conduct was unlawful, an injunction against enforcing the illegal policies on their proposed class, which consisted of “[a]ll persons who currently owe or who will incur debts to Rutherford County from fines, feed, costs, or surcharges arising from traffic and misdemeanor cases in the County Court and who have been placed on probation with PCC Inc. pursuant to the Contract between defendants Rutherford County and PCC, Inc.” The plaintiffs also requested treble damages, and attorneys’ fees.

Specifically, the complaint arose because Rutherford County had entered into a contract with the private company (PCC) to provide probation services. According to the contract, PCC had to earn its profit solely and directly from the people that it supervised by operating a “user funded” model in which probationers were ordered to pay, under threat of arrest and revocation of their probation, a variety of fees and surcharges to PCC in addition to their court costs. The county did not provide any compensation for PCC's services.

If probationers could not pay their fees in full, they would be placed on “supervised probation.” This supervision agreement required probationers to, among other things, pay additional supervision fees to PCC, obey all orders of PCC officers, and allow warrantless property searches. Any violation of these “conditions,” notwithstanding the individual's history or the nature of the offense, would result in PCC petitioning for their probation to be revoked and for the issuing of a warrant for their arrest.

The Plaintiffs had two primary civil rights contentions with this model. First, Plaintiffs alleged that PCC did not consider whether the probationer was indigent when making recommendations based on unpaid fees, and second, that the under policy, it was possible to be arrested and jailed solely for failure to pay a debt. In many cases, PCC officers did not inform eligible applicants about the available indigency waiver, or officers gave out misinformation that some fees had to be paid before an individual could apply for the indigency waiver. This led to indigent probationers failing to comply with the supervised probation conditions, which often resulted in jail time.

On October 1, 2015, Plaintiffs moved for both a Temporary Restraining Order (“TRO”) and Preliminary Injunction (“PI”) enjoining Defendants from “serving and executing any warrant sought and issued on the basis of violation of probation.” On October 13, 2015 the court converted the TRO into a PI. On October 21, 2015, Plaintiffs moved for second PI to “prevent their imminent and unlawful jailing by the defendants.”

On December 2, 2015, defendants moved for the court to dismiss the claim based on their alleged qualified immunity as probation officers.

On December 17, 2015, Judge Kevin Sharp granted the Plaintiffs' motion for a preliminary injunction. The injunction required Rutherford County through PCC to inquire into indigency whenever setting the amount of bond during supervised probation. It also mandated that an individual could not serve jail time if the only probation violation is a nonpayment of funds. The judge called the Defendants' actions towards the indigent Plaintiffs an “extraordinary” injustice.

On January 15, 2016, Defendants filed an appeal of the preliminary injunction and requested a stay of the order before a ruling on the appeal. However, on March 15, 2016, both parties filed for voluntary dismissal of the appeal because defendants terminated the contract under which PCC has supervised misdemeanor probationers in Rutherford County.

On June 9, 2016, the district court granted in part and denied in part the Defendants' motion to dismiss, filed on December 2, 2015. On June 28, 2016 the court stayed any remaining motions so that the parties could continue to mediate their case.

On July 11, 2016, Defendants appealed the parts of the motion to dismiss that were denied to the United States Court of Appeals for the Sixth Circuit. In the meantime, the parties continued to work toward a settlement agreement.

On October 5, 2017, the parties submitted a settlement agreement to the court. Part of that settlement agreement requested a settlement with a class, specifically “all persons who, at any time from October 1, 2011 to [October 5, 2017], (1) incurred court-imposed financial obligations arising from a traffic or misdemeanor case in Rutherford County General Sessions or Circuit Court; and (2) were supervised on probation in that case by Providence Community Corrections, Inc. or Rutherford County’s Probation Department. Part of that settlement agreement was approved on October 5, 2017, and allowed for the payment of $14,300,000 to the class, with attorneys’ fees coming out of that payment as well. $14,000,000 WAS to be paid by PCC while the remaining $300,000 is to be paid by Rutherford county (though PCC agreed to pay Rutherford County 350,000 to supply this amount). The court certified the class, but, due to missing information about the amount of money each member of the class had incurred as a result of their probation, denied the settlement. The court then allowed the parties to file a new settlement agreement on or before October 18, 2017.

On October 18, 2017 the parties filed a second settlement agreement with the court. This was approved on July 18, 2018 by Judge David Lawson approved the final settlement agreement. Each named plaintiff received $10,000. Class members whose probation ended prior to October 1, 2014 was to receive 125% of the amount they paid to PCC from October 1, 2011 to October 1, 2014. Class members whose probation ended after October 1, 2014 were to receive 125% of fees actually paid and an additional $50 per month for each month on probation after October 1, 2014. The agreement also called for payments to the settlement fund administrator, and for attorneys fees and costs amounting to $1,395,761.39. Any remaining funds were to be distributed on a pro rata basis to class members.

The county also agreed to the issuance of a permanent inunction that prohibited an individual from being "held in jail for nonpayment of fines, fees, costs or a pre-probation revocation money bond imposed by a court without a determination, following a meaningful inquiry into the individual's ability to pay, that the the individual has the ability to pay such that any nonpayment is willful. The meaningful inquiry into the individual's ability to pay includes, but is not limited to, notice, an opportunity to present evidence, and assistance of appointed counsel." The court retained jurisdiction for purposes of enforcement.

The case is now closed.

Dan Hofman - 02/18/2016
Dan Hofman - 02/24/2016
Cianan Lesley - 11/08/2017
Anna Belkin - 10/29/2018


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