by Derek Gilna

An order entered by Western District of Arkansas federal judge Timothy L. Brooks on September 28, 2017 gave a mixed result to both sides in a hotly-contested lawsuit over excessive costs for prison and jail phone calls.

In this case, one of the nation’s largest prison phone companies, Global Tel*Link (GTL), was defending yet another in a series of lawsuits filed by prisoners and their families who have long had to pay inflated phone rates. The plaintiffs alleged “that GTL charged them excessive rates to cover the costs of site commissions it paid to correctional facilities, and charged them deposit fees that unreasonably exceeded the cost of processing deposits into prepaid accounts.”

Complicating the litigation was the fact that it was one of four lawsuits pending in the Western District of Arkansas raising various claims related to prison phone services – including whether phone calls made by prisoners were intrastate (in-state) or interstate (long distance). GTL was named as a defendant in two of the cases while its competitor, Securus Technologies, was named in the other two.

GTL, Securus and other prison phone providers have a simple business model: exploit the desire of prisoners’ families to maintain contact with their incarcerated loved ones by charging excessive rates and ancillary fees. That model has been extensively covered by Prison Legal News, which has repeatedly exposed the practice of phone companies giving thinly-disguised kickbacks, euphemistically called “commissions,” to prisons and jails in exchange for lucrative monopoly phone service contracts. [See, e.g.: PLN, Dec. 2013, p.1; April 2011, p.1].

As it always does, GTL fought the lawsuit and filed numerous motions in an attempt to force the plaintiffs into arbitration, which would have effectively ended the case. The plaintiffs responded by seeking class-action certification. After reviewing the pleadings and hearing extensive oral argument, Judge Brooks denied the motion to dismiss but also declined to certify the class.

The class-action portion of the lawsuit was clearly a close decision. “Plaintiffs’ proposed class definitions satisfy the ascertainability requirement,” the judge wrote. “Plaintiffs allege that GTL recoups the site commissions it pays incarceration facilities through the rates it charges users of its inmate calling services, that GTL charges fees for depositing funds in inmate prepaid accounts that grossly exceed the cost of processing those deposits, and that these practices are the result of nationwide policies rather than of ad hoc negotiations with individual consumers of GTL’s services.”

However, the district court noted that while there were factual circumstances “common to the class” that would support granting class-action status, enough factual differences existed that made certification inappropriate, at least at this point in the litigation.

The court was not persuaded by GTL’s argument that the case should be stayed and the complaints of the individual plaintiffs submitted to arbitration, noting that “‘A party waives its right to arbitration if it “(1) knew of an existing right to arbitration; (2) acted inconsistently with that right; and (3) prejudiced the other party by these inconsistent acts.”’” Judge Brooks concluded that “[w]hether these elements are met is an issue for this Court – not an arbitrator – to decide,” and held that GTL was not entitled to arbitration.

This case remains pending a decision on the merits. See: Chruby v. Global Tel*Link, U.S.D.C. (W.D. Ark.), Case No. 5:15-cv-05136-TLB; 2017 U.S. Dist. LEXIS 159740.