By Emrys Yamanishi
This September, by an 8-3 vote, the U.S. 9th Circuit Court of Appeals struck down Assembly Bill (AB) 32, based on the reliance that California currently has on private prisons to house its large prison population. GEO Group Inc, one of the largest prison contractors in the country, brought the case back in 2020. Governor Newsom signed AB 32 back into law in 2019 and declared a phasing-out of all private prisons in the state by 2028. The bill notably included immigrant detention centers and prevented the California Department of Corrections and Rehabilitation from being in contract with private prisons after Jan. 1, 2020.
Text from the decision reveals the logic which California used to pass AB 32 in the first place, reading, “[t]he scope of a federal contractor’s protection from state law under the Supremacy Clause is substantially narrower than that of a federal employee or other federal instrumentality. . . . Absent federal law to the contrary, the Supremacy Clause therefore leaves considerable room for states to enforce their generally applicable laws against federal contractors. ‘[A] state law is [not] unconstitutional just because it indirectly increases costs for the Federal Government, so long as the law imposes those costs in a neutral, nondiscriminatory way.’” According to statements made by Governor Newsom and Assemblymember Rob Bonta, the bill was intended to counter over-incarceration and demonstrate California’s support of humane conditions for all, as private prisons are often considered to be even more inhumane and abusive than public prisons. Following the signing of AB 32, Governor Newsom also signed AB 3228 in the fall of 2020, which allows immigrants to sue private prisons for failing to adhere to minimal standards of care. These assembly bills mark a long disaccord between the state of California and the federal government over the presence of private prisons, which in 2020 held 8% of the US prison population.
The federal government has become increasingly reliant on private prisons. While the number of people held in private prisons in the US has increased by 14% since 2000, the number of federal prisoners held in private prisons specifically increased by 120% between 2000 and 2016. Notably, from 2000 to 2016, the private prison population increased five times faster than the prison population overall. Interestingly, a 2016 directive by the Obama Administration pushed to change this federal reliance on the private prison industry, proposing a gradual phase-out of private prisons. Following the inauguration of former President Trump, this was quickly reversed in the spring of 2017 under Attorney General Jeff Sessions on the grounds of “future need” for the facilities. In 2021, President Biden renewed former President Obama’s proposal, although some scholars have argued that the order is more symbolic than anything else, as states still have autonomy at the federal level to choose who they enter prison contracts with. This federal reliance on private prisons creates considerable revenue for the US government, as private prison contracting brought in $3.9 billion for the federal government in 2017 alone. Judge Jacqueline Nguyen hinted at this economic factor of federally run private prisons in Monday’s decision, when she said argued that “([courts] distinguish[ between] “generally applicable state tax laws, which resulted in merely an increased economic burden,” from state laws that “regulate what the federal contractors had to do or how they did it pursuant to their contracts.”)”
Even more striking than the privatization of other prisons, the private immigrant detention center population increased by 442%, from 4,800 in 2002 to 26,249 in 2017. This connection between immigrant detention and the private prison industry is not new, as a Migration Policy Institute report found in 2015: 62% of ICE detention bed centers were operated by private prisons following Congress and ICE’s 2009 “beds mandate”, which created a daily quota of beds that must be available to hold immigrants each day, frequently interpreted as around 34,000 beds.
One company which has especially profited from the “beds mandate”is the GEO Group. Just as there is a long history of conflict between California and the federal government over private prisons, the GEO Group has been in a legal battle with California over the presence of private prisons in the state for decades. Prior to 1994, there were virtually no private prisons in the state. The California Correctional Peace Officers Association, a union of federal prison workers, had widely opposed the building of private prisons in their state. However, the signing of AB 971 (better known as the “Three Strikes” law) by then Governor Wilson exacerbated California’s overcrowding crisis, and there was suddenly a need for far more prison capacity. The GEO Group, ever watchful of prison policy, had established themselves in California a month before the passage of AB 971, and quickly signed a $33.2 million contract with the California Department of Correction. Since then, the GEO Group has made over $2.3 billion in revenue.
Following the signing of AB 32, the GEO Group jumped[OM8] to file a lawsuit two days before the Bill took effect, on the basis that it was unconstitutional. A three-year legal battle followed, culminating in Monday’s decision and the downfall of AB 32. It should be noted here that although the decision was a major success for the GEO Group, AB 32 wasn’t all bad for the organization. An amendment to the legislation allowed for exemptions for “community corrections” or “reentry services” facilities run by private prison companies, which brings in over 20% of the GEO Group’s revenue. This amendment effectively created a $200 million loophole for companies such as the GEO Group and CoreCivic, another prominent private prison company.[OM9] The GEO Group continues to [OM10] hold 15 contracts with the Department of Corrections and Rehabilitation for $184.4 million. A few weeks before AB 32 took effect, the GEO Group also signed a contract with federal officials to continue operating immigrant detention centers through 2034.
In their 31-page complaint filed in response to the passage of AB 32, the GEO Group argued that the bill would cause the company to experience a loss of $4 billion in profits. For a company as rich as their own—and with the loopholes within and arrangements made around AB 32 to avoid any potential loss in revenue—it seems strange for the company to engage in such a long legal battle over the Bill. This is where the “for-profit” title becomes incredibly clear. l. For example, the GEO Group began pushing into the mental health services sector across the country as far back as 2006, contributing to the privatization of mental health services. The company also applied twice in 2015 and 2016 to build an $80 million federal detention center in Gary, Indiana, [OM11] on the grounds that it would boost the local economy, despite vehement protests from the community and local organizations.
Although AB 32 would not have caused a great deal of harm to the GEO Group in the long run, as a for-profit company, their business model relies on increasing the number of incarcerated people. The striking down of AB 32 triggered disappointed sentiments across California state Assemblymen, including from the California Attorney General’s office, and there is possibility the state will make a case with the US Supreme Court.
