Another Day, Another Dollar
Biden's DOJ Gives GEO and the Private Prison Industry the Bailout Trump Wouldn't
Another Day, Another Dollar
April 2024
R. Andrew Free1
For nearly ten years, the U.S. government stood by while one of its biggest and most powerful private immigration detention contractors faced a succession of suits challenging how the company makes a buck. Despite desperate pleas for intervention from a set of 18 powerful Congressional republicans, the Trump DOJ sat on the sidelines. When Trump’s political donors from GEO flew to D.C. and spent corporate money at the Trump Hotel before begging ICE officials for help in the lawsuits as they continued to succeed in courts around the country, the previous administration didn’t intervene. As GEO told two separate courts of appeal class certification, in the labor cases could be a ‘death knell’ for its business model, ICE stayed out.
GEO’s counsel told a federal judge on the eve of trial in Tacoma, Washington in 2021 that the court’s failure to force then-ICE Acting Director Tae Johnson to obey the company’s subpoena and appear to testify before the jury, or to allow ICE and GEO to hand-pick a replacement ICE witness at the eleventh hour, would mean GEO loses its case. The court rejected the new witness, leaving GEO to enforce its subpoena. The company didn’t do so, and ICE stayed out. GEO’s lawyer was right. The trial ended in an historic $23.6 million verdict against the company after a jury found Washington’s Minimum Wage Act applied to the work program it ran inside its private detention center on the tideflats.
GEO’s experience has not been unique. State minimum wage and unjust enrichment cases have survived dismissal, obtained class certification, proceeded to summary judgment, or been cleared for jury trial in federal courts from California to Georgia, New York to Illinois, Colorado to Texas, Wisconsin to Washington. The only previous appellate court activity offering an official brief from the federal government stating its position on the merits of the claims and defenses in the case was a friend of the court brief filed with the U.S. Court of Appeals for the Eleventh Circuit noting federal immigration detention contractors are not exempt from the Trafficking Victims Protection Act’s prohibition on forced labor. The Court agreed with DOJ’s position, and the Fifth Circuit later followed suit.
The Biden Justice Department abruptly reversed course in February—ten years into class action litigation challenging ICE contractors’ exploitative labor practices in civil immigration detention centers. Biden’s DOJ told a federal appeals court it should reverse a landmark $23.6 million verdict that detained immigrants and the State of Washington secured in 2021 after an historic, month-long trial. After consulting the Solicitor General, the DOJ asked the US Court of Appeals for the Ninth to enter a judgment of dismissal in favor of The GEO Group, Inc.—a publicly traded, private, for-profit prison corporation based in Florida. The government’s brief marks the first official attempt by DOJ to halt the largest certified immigrant detention wage theft class actions in US history. It represents a drastic, largely unacknowledged, and thus, unexplained change in the government’s position and an important point of departure from its previous legal positions and the facts underlying the cases.
Practically speaking, the Biden DOJ is seeking to bail out The GEO Group and the rest of its detention contractors. It does so by avoiding the stubborn reality that its legal position has no historical support or doctrinal legitimacy; it’s just . . . vibes.
DOJ’s amicus brief came at the invitation of a three-judge 9th Circuit panel reviewing GEO’s appeal of the verdicts formerly detained immigrants and the Washington Attorney General’s Office secured against it. The same appellate panel previously certified a set of three state-law questions to the Washington Supreme Court in 2022. The state high court answered these questions by upholding a federal jury verdict that Washington’s minimum wage law covers work GEO permits people locked inside the company’s Northwest Detention Center in Tacoma to perform. The Washington justices also upheld the federal judge’s verdict in favor of the State that GEO unjustly enriched itself by paying detainee workers just $1 per day, instead of the minimum wage.
With these state-law merits issues resolved firmly in favor of upholding the historic verdict, all that stands between GEO and paying what it owes are two lingering federal defenses it lost in the court below: Preemption and Inter-Governmental Immunity (IGI). The government says both defenses apply, and consequently, both cases must be dismissed. All courts to answer the question thus far – nearly half a dozen in total – concluded unanimously that these defenses lack merit.
The government’s position isn’t just new. It’s one it could have raised at any point in the past decade, but didn’t. That’s because the government’s new position is also wrong.
2024 marks the tenth anniversary of the first modern class action suit challenging exploitative labor practices in ICE lockups. It’ll be 10 years this May since The New York Times published Ian Urbina’s authoritative Sunday cover on the so-called “voluntary” work program in civil migrant detention spaces, where ICE contractors pad their margins by paying immigrants just $1 per day, and sometimes nothing at all, for essential labor necessary to render their contracts profitable.
Urbina’s article set shockwaves through the detention system. It catalyzed a vanguard of detained immigrant laborers who survived a privately operated ICE prison outside Denver to explore the nature of the work they performed. They filed a first-of-its-kind class action suit for forced labor, unjust enrichment, and wage theft against one of the agency’s largest for-profit contractors, Boca Raton-based giant The GEO Group, Inc. (GEO). Their case survived half a dozen attempts at dismissal, and the court certified a class of as many as 60,000 formerly detained immigrants. The certification decision, in turn, survived review at the traditionally conservative Tenth Circuit. As a result of appealing, GEO’s white-shoe lawyer told the panel solitary confinement was a legitimate disciplinary consequence for a detainee’s refusal to work, so the choice to work wasn’t forced. One judge responded, to the shock of nearly everyone in the room, “Well, slaves had a choice, didn’t they?” GEO’s appeal claimed in its brief the case would be a “death-knell” for its detention business, and that a skeleton of the suit could be adopted and filed at every one of its detention centers around the country. In late summer of 2018, the Colorado class action survived Supreme Court review.
Elsewhere, immigrant workers locked inside the Northwest Detention Center in Tacoma worked with organizers to document the inner workings of GEO’s labor programs. Lawyers in the Washington Attorney General’s Office later decided to sue the private prison firm for minimum wage violations and unjust enrichment. Along with a 9,000-person certified class action filed by detainees, the State brought GEO to trial and won, in part because of the records ICE created in response to Urbina’s reporting. Those records, obtained by Northwestern University Professor Jacqueline Stevens through the Freedom of Information Act, revealed a patchwork scheme of varying compensation levels for work at ICE detention facilities across the country that ranged from $1-$4 per day at some GEO centers to extra food, phone cards, or time out of cells at other ICE facilities.
Since Urbina’s piece ran in the Times, at least 15 federal lawsuits challenged ICE contractors’ labor abuses in federal courts around the nation. In all, for-profit prison companies and county jails filed at least 40 dispositive motions aimed at stopping the cases dead in their tracks. Nearly all of them failed, and then detained workers’ cases keep on keeping on. They’ve survived at least eight trips to federal appeals courts, mostly in jurisdictions like the Fifth, Tenth, and Eleventh Circuits that some observers might presume would be hostile to immigrants. Hostility to a disfavored litigant class, as it turns out, does not trump fealty to the plain language of statutes–at least for each federal court to consider the trafficking, state minimum wage, and state unjust enrichment claims. Critically, these cases have survived at least two trips to the Supreme Court in the past seven years, despite opposition in one of them from the US Chamber of Commerce. That is because the text of the laws says what it means and means what it says. And that text does not exempt or immunize the contractors from their obligations to follow the law simply because they chose to make a buck (or a billion) imprisoning migrants for profit.
The single, notable outlier in the detainees’ steady stream of appeals court wins relied entirely on an old litigation theory rooted in the federal Fair Labor Standards Act (FLSA). That case–Ndambi–withered and died at the Fourth Circuit, as it previously did in the Fifth and Federal Circuits back in the 1990s. But in doing so, it showed why the rest of the cases, which are rooted in different, more fertile doctrinal soil, and clearer statutory text persist so stubbornly and resiliently–much to the chagrin of the for-profit prison industry and its new ally, Biden’s DOJ.
When the DOJ filed its brief in the Ninth Circuit in February, ICE’s largest detention contractor, CoreCivic, faced a nationwide certified forced labor class pending in the Southern District of California. Another forced labor and unjust enrichment suit pending against CoreCivic in Georgia settled on the eve of trial last year after a federal judge refused to grant CoreCivic summary judgment. GEO faces potential trials in two other single-facility certified class actions in California and Colorado where collectively more than 100,000 detained workers stand to benefit. These cases are on hold pending resolution of GEO’s federal defenses in the company’s interminable string of appeals. Putative class actions against GEO, LaSalle Corrections, Akima Government Services, and two county jails remained pending in California, Georgia, New York, Illinois and Wisconsin, respectively.
All told, as many as a half million current and formerly detained immigrants could recover as much as half a billion dollars from ICE’s contractors based on the exploitative labor practices Urbina’s NY Times article revealed in 2014.
Despite sustained, public lobbying efforts, and more stealthy, private entreaties to high-level officials in the Trump administration, the companies never managed to convince the federal government to throw its hat in the ring. For years, the former ICE officials who passed through the revolving door out of ICE and DHS and into GEO’s C-Suite told the government it should intervene, or at the very least, indemnify the company, because federal law preempts the Washington-based lawsuits and other class actions immigrants filed against the company in Colorado and California.
And for years, the government refused to intervene or indemnify GEO.
Then-Acting ICE Director Tae Johnson, who previously filed a sworn declaration in the Washington cases, refused GEO’s subpoena to testify at the Tacoma trial. The company declined to enforce the subpoena by holding Johnson in contempt. GEO’s new CEO, Brian Evans (formerly the CFO), testified during the second Tacoma trial (the first ended in a hung jury) that although GEO tried and failed to get the federal government to intervene on its behalf, the company didn’t sue the government to enforce its legal position because it did not want to anger its biggest customer–ICE.
From 2017 to 2018, GEO, ICE, and the DOJ exchanged thousands of pages of records debating whether the government should intervene. Professor Stevens later obtained heavily redacted copies of those records through FOIA. They included drafts of declarations and filings prepared for the government by GEO’s counsel. They show two different Trump Homeland Security secretaries requesting briefings on the litigation, and Rod Rosenstein’s office reviewing ICE’s proposed intervention. But the government did not intervene.
ICE witnesses have been deposed or provided declarations on at least six separate occasions in six cases over the course of this ten-year litigation history. Its lawyers and the DOJ have attended discovery hearings and objected during depositions. They have filed briefs and negotiated protective orders. At one point, ICE’s lawyer conceded that its failure to provide a privilege log despite repeated extensions meant the agency waived any privileges it could assert. Collectively, ICE’s Government Information Law Division lawyers have conservatively expanded more than 3,000 hours of attorney time on these cases, which ICE now says never belonged in court in the first place.
Several detention centers the contractor-defendants operate on the agency’s behalf have been physically inspected by multiple litigation teams in the labor cases. One federal judge is considering allowing a jury to visit a GEO facility and view its segregation, i.e., solitary confinement, area. Federal judges have heard disputes over the scope of those inspections. By contract, and often, by court order, almost every shred of discovery contractors gave the plaintiffs in many of these cases has either been something the federal government reviewed and approved, or had the opportunity to keep confidential.
In fact, as late as December 2023, an ICE official swore under oath in a federal filing that contractors have the discretion to pay more than $1 per day for detained immigrants’ labor inside a federally owned facility in Batavia, so long as they don’t seek more than $1 from the government for reimbursement.
Despite its decade-long awareness of these cases, the $23.6M verdict, and tens of millions more in attorneys fees contractors have racked up defending themselves, it wasn’t until March that ICE or the DOJ asserted in court document, signed and filed by a DOJ attorney, that federal law preempts minimum wage and unjust enrichment claims.
The single, passing reference by the DOJ to GEO’s alleged qualification for an IGI defense in the past came in the Washington cases. It was not even filed by DOJ. GEO filed it. As an attachment to a reply brief. Neither the US Attorney nor Main Justice came to court to defend the position. The trial court rightly disregarded it, and issued judgment against GEO on that defense. The Plaintiffs’ verdict followed.
If DOJ’s answer to the ‘Why now?” question is ‘Because we haven’t been ordered to weigh in before,’ that still doesn’t answer the question of ‘Why not then?’
Nothing in federal law has changed since the company raised these defenses 5-6 years ago and courts rejected them. The same text, history, and context exists today that existed when ICE rejected GEO’s plea for the government to intervene, or at the very least, reimburse the $20M in mounting legal costs of defending a federal government’s labor program.
The answer to “why not then?” is simple: DOJ’s new position is legally incorrect and factually untenable. History forecloses DOJ’s post-hoc account of ICE’s authority to set a $1 a day rate, and dooms its preemption argument. Two courts already concluded as much in denying GEO’s preemption defense.
The history and the law are clear: Congress—not ICE—has the sole power to set the rate of detainee wages. Everyone agrees Congress hasn’t done so since 1979. What ICE and the DOJ get painfully, demonstrably, embarrassingly wrong is the impact of the legislative branch’s silence ever since.
For 45 years, INS and ICE have incorrectly asserted the $1 per day rate is still a binding instruction to the agency. An INS General Counsel opinion cooked up in 1992–the last time detained immigrant workers sued for the minimum wage-says as much: Congress last set the rate at $1 per day, and INS/ICE continue to abide by that rate. That’s what DOJ briefs say, too.
Except that’s not what Congress did, and that’s not what black-letter federal appropriations law allows. The Constitution allocates the power to appropriate to Congress–not the Executive. Congress exercises that power in two steps: an authorization, and an appropriation. Absent both steps, the executive branch has no constitutional power to make spending decisions, and doing so can violate the Anti-Deficiency Act Congress passed to protect its power of the purse.
When it comes to paying detained immigrants, Congress took the first step – the authorization – in 1950 when it passed 8 USC 1555(d), which authorizes payments for allowances for civil immigration detainees to compensate them for the work they perform while in civil government custody. As Professor Stevens has documented, Congress did this because the Supreme Court said in the 1890s the civil nature of detention precludes forcing immigrant detainees to work, and the Geneva Conventions require payments to “enemy aliens” in government custody, as well as immigrant detainees.
The same law Congress passed in 1950 authorizing the payment of allowances to civil immigration detainees also specifies who gets to set the rate of pay–Congress–and how often–“from time to time in the appropriations act involved.” That constitutes Congress’s definition of the process for the second step it would need to take–the appropriation. The last time Congress set the rate of pay at $1 per day was in the antepenultimate Appropriations Act of the Carter Administration. The $1 per day rate in this appropriation was the same as it was in every year in every appropriations bill since 1950, when Congress passed the authorization (step 1) to appropriate funds for that purpose (step 2).
So Congress set $1 per day from 1950-1978. The next year, Congress stopped. And that cessation terminated both the $1 per day rate for detainee allowances and INS’s authority claim there was a binding rate of pay from the government to detained immigrant workers. Why is that so? Because unless Congress says otherwise, the appropriated funds and any stipulations that come with them end with the end of the fiscal year. This principle plays out in the familiar, painful reality of federal workers and anyone who does business with agencies who face seemingly annual threats of a government shutdown.
Congress holds the power to make appropriations terms permanent, relieving future Congresses of the obligation of reenacting them each year. It can say things like, “notwithstanding any other provision of law,” and follow that language with things like, “now and in the future”. An entire body of federal appropriations case law has emerged to determine when the language Congress uses binds future Congresses and creates continuity from year-to-year within agencies. Enduring appropriations are the exception, though–not the rule. And there is not a scintilla of evidence or text indicating that Congress in FY79 took any step to make the $1/day rate last even one day longer than that fiscal year. Without that evidence, the history and law are clear: the $1 per day rate Congress set for detainee allowances for nearly 40 years after 1950 ended before Ronald Reagan took office.
But because most INS lawyers are either unfamiliar with or willfully ignorant of these basic principles of federal appropriations law, the agency continued setting $1 per day as the rate. Congress likely didn’t notice because the agency wasn’t asking for money to pay that amount. In essence the INS and ICE went on for the next forty years violating the separation of powers and the Anti-Deficiency Act, to the extent that they claimed the $1 per day rate was binding or had any Congressional approval. Perhaps that’s why when Urbina asked ICE about its pay practices in 2014, a shockingly wide set of variations from facility to facility, contractor to contractor, and year to year became apparent in the materials ICE itself prepared to answer the Times’ inquiries.
The modern Congress knows how to set a rate if it wants to. In both the FY22 and FY23 appropriations cycles, Congress considered language that would set a rate of pay for detained immigrants’ labor. Ultimately, it did not end up in the final spending package. This failure to pass a new rate further confirms that Congress believes none currently exists. That, as courts have held, is how the law works.
Indeed, the Congressionally mandated rate was never a ceiling on detainee pay in the first place. Rather, it was, and according to many current contracts, is, the maximum the federal government would reimburse a contractor paying detained immigrants for work. ICE standards expressly contemplate that the contractor can pay more—officially changing the rate of pay to “at least $1 per day” during the Obama administration.
As GEO admitted under oath long ago, and as the parties stipulated at the 2021 Tacoma trial, GEO can and does pay more for labor it obtains in work programs at its other facilities. ICE’s records and GEO’s records both prove this. At the facility’s South Texas ICE facility in Pearsall, the company sent ICE invoices showing it paid more than $1 but only billed the government for that amount. In its Jena, Louisiana facility, the ICE-approved detention handbook says laundry workers can get up to $4. CoreCivic has paid as much as $8 to detained immigrants to perform certain critical tasks.
So, not only is there no current Congressionally mandated rate of pay (much less the obsolete rate of $1/day), there is also no executive-branch authority to set one.
Rather, there is simply a federal sub-regulatory standard that sets a floor on federal reimbursements for work performed by civil immigration detainees, and contract language setting a reimbursement rate. That rate would only constrain how much ICE must reimburse contractors for detained immigrants’ labor. It would not be a ceiling on how much private companies must pay people who do the work that allows them to operate at a 15-20% profit margin, as the Tacoma trial showed GEO does.
The contractual reimbursement rate is also, by its own terms in the Tacoma contract, subject to the obligation of the contractor to know and comply with all applicable federal, state, and local labor laws. The contract also provides that in the event of a conflict between competing obligations, the “more stringent standard” applies. GEO, and now DOJ, are effectively claiming (apparently with a straight face) that this unlegislated, sub-regulatory reimbursement rate conflicts with Washington’s minimum wage act, and that paying only $1 per day meets ICE’s definition of “the more stringent” standard. This contention is laughable on its face.
In the face of this indisputable history, text, and context, the Biden Administration seeks to wave a magic wand of plenary immigration authority. Invoking and relying on a counter-textualist doctrine cooked up post Civil War by the Dred Scott court to provide the legal imprimatur for white supremacist exclusion, indigenous, genocide and imperialist conquest and subjugation, Biden’s DOJ asks the Ninth Circuit to ignore federal appropriations and displace law states’ traditional police power to regulate wages and working conditions.
This argument has failed at least six times so far, and it should fail again. Because it is wrong. Embarrassingly, astoundingly, stupefyingly (and to the extent it brazenly misstates historical facts and seeks to rewrite and litigate from an alternative history, sanctionably?) wrong. Then why make it?
Perhaps because the Justice Department is hoping to get the Ninth Circuit or the Supreme Court to expand the federal government’s preemptive authority over immigration in general. Maybe Biden wants the federal government’s preemptive power to cross the borders of current law as a means of eliminating Texas and other states’ efforts to ratchet up parallel enforcement efforts. Or maybe the donors in the corporate federal contractor lobby convinced the Justice Department of the financial benefits of displacing state laws of general applicability using federal contracts—vertical and horizontal separation of powers be damned.
Or maybe–and there’s an ample and growing body of evidence for this hypothesis–the private, for-profit detention contractors simply enjoy a cozier and more agency-captured relationship with Biden than they did Trump. Biden promised to end their detention contracts before expanding them when he took office. Trump’s performative violence against migrants fueled state Attorneys General to intervene and galvanized successful ESG campaigns to de-bank and divest from both GEO and CoreCivic. Ultimately, each had to suspend dividends and restructure their tax-favored REIT status amidst single-digit stock values. But both are now back to double-digits prices and buoyed by billion dollar increases in ICE’s detention budgets and bed capacity.
Trump’s ICE officials may have welcomed GEO executives into friendly private meetings following lengthy, expensive sojourns at the Trump Hotel paid for on GEO’s corporate credit cards. But his DOJ never intervened. Biden’s ICE officials, by contrast, are issuing press release readouts of meetings with private prison company executives at deadly facilities saying private immigration detention contracts are vital to the government’s detention mission. Detention populations are consistently more than double over what they were when Trump left.
That brings us to the DOJ’s inter-governmental immunity argument. In its February filing, the federal government essentially invites the Ninth Circuit to hold that if GEO becomes marginally less profitable, it will harm ICE, and in turn, the US government.
As reductive as this claim sounds, it is an inescapable and irreducible premise of DOJ’s IGI argument. If GEO has to pay minimum wage like every other employer, it will, necessarily, charge the federal government (or, implicitly, profit less). This, in turn, will mean the State of Washington is discriminating against the federal government by applying its minimum wage law to a for-profit business operating in its jurisdiction. Yet the same history that dooms DOJ’s preemption argument combines with the lived reality of ICE detention today, and every day since Urbina’s article ran ten years ago, to foreclose the IGI gambit as well.
ICE is not the constitutional protector of GEO’s profits; and GEO’s profitability is not among ICE’s legitimate regulatory aims. A Motion GEO filed to intervene in a federal lawsuit that reduced the population of its 1940-bed Adelanto, California facility to double digits during COVID confirms both propositions. GEO attempted to intervene in the suit and move to dissolve the court’s injunction. Its lawyers said that was because ICE wasn’t adequately protecting the company’s bottom line with its litigation positions. The court rejected that argument. GEO didn’t pull out of the contract. And ICE was able to continue carrying out its statutory obligations.
ICE told GEO when it rejected its request for an equitable adjustment to increase contract reimbursements in 2018 that its defense to these labor lawsuits was a defense to the company’s contract performance. In layman’s terms, that means the two parties agreed on a price the government would pay GEO, and on specific terms GEO would comply with to receive that pay. One of these terms was bearing the risk and cost of performance. The government does not indemnify its contactors for things they’re responsible for doing. Another of these terms is ensuring the company complies with all applicable federal, state, and local labor laws. In the Washington trial, the jury determined the Washington Minimum Wage applied, and the court agreed that none of GEO’s federal defenses — including preemption or IGI — could upset that conclusion. GEO bore the risk of ensuring it paid the right amount for all the work it obtained—not the federal government. Consequently, forcing GEO to bear that risk by paying Washington’s minimum wage cannot discriminate against the federal government.
If federal detention contracts are unprofitable without the nearly free labor of unfree people, that is a problem for the publicly traded corporations looking to profit from them—not the federal government. The Justice Department’s assertion that Washington cannot regulate wages private companies pay because it might render government contractors less profitable is one that finds no support in existing Supreme Court case law. What the Biden DOJ is doing, then, is positioning the Supreme Court to change the judge-made law of intergovernmental immunity to strengthen federal power to immunize private corporations and weaken state power to apply laws of general applicability to all who conduct business in their territory.
Whether the Court accepts this invitation or not, the very act of making it has invited disastrous, likely unanticipated consequences for the federal immigration bureaucracy and the DOJ. Specifically, because the DOJ’s brief flatly contradicts its contracting officers’ statements in rejecting GEO’s 2018 equitable adjustment requests, the government has effectively invited the company to seek reimbursement not only of its legal fees ($20M) up until that date, but also for the considerable fees it incurred after. Every other contactor will follow suit, and ICE will face a $50-$75M bill because of DOJ’s erroneous, late-to-the-party legal position. What’s more, once DOJ’s position fails, the contractors will be able to nonetheless seek indemnification from the federal government for the costs of the verdicts in all the wage theft and unjust enrichment cases, because the government has now stuck itself with a legal position that implies it’s responsible for their misfortunes.
Biden could have simply done what Trump did when it came to these cases: Nothing.
Instead, his Justice Department adopted a flagrantly incorrect legal position that will do exactly what it warns the plaintiffs are doing by applying the minimum wage laws of the State of Washington to ICE detention: increasing the cost of detention to the federal government by adding to the charges ICE contractors can seek compensation for.
It is no small irony, then, that the Biden DOJ brief will likely cost the federal government more in contractor legal fee reimbursements than the Plaintiffs’ combined $35M in verdicts and attorneys fees. The filing is a profoundly unwise decision that will have far-reaching negative consequences for the federal government and the people in its care. The Administration would do well to withdraw the brief and abandon its position before it does any more damage.
As a matter of full disclosure, I previously represented the class that secured the Tacoma verdict, as well as several other classes whose cases I discuss. If the Tacoma verdict for the plaintiffs is upheld, I would potentially stand to receive the attorneys fees I earned litigating the case which Judge Bryan determined were reasonable and awarded in post-trial proceedings, plus post-judgment interest. GEO has appealed those fees as well. I also represented Prof. Stevens in FOIA matters.