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4th Circ. Revives Prison Phone Price-Fixing RICO Claims


May 26, 2023

The families of prisoners will get another shot at seeking damages on their racketeering claim against three companies accused of conspiring to inflate the cost of calls made from U.S. prisons, after the Fourth Circuit ruled Thursday that the claims alleged direct injury to thousands of families as well as the government.

The unanimous published opinion will allow the families to move forward on their Racketeer Influenced and Corrupt Organizations Act claims against Securus Technologies LLC, Global Tel*Link Corp. and 3Cinteractive Corp. after the U.S. District Court for the District of Maryland trimmed the complaint to only focus on antitrust violations in September 2021.

The three-judge panel determined that the district court erred when it held that the families’ RICO claim couldn’t establish that they were a “more direct victim” as it was contingent on harm suffered by the contracting governments.

Even though the companies’ alleged conspiracy to charge prisons higher rates for calls happened before it impacted the families, “this doesn’t make the governments more direct victims,” U.S. Circuit Judge Albert Diaz wrote in the opinion.

“As plaintiffs point out, the governments’ injuries could be cured if defendants paid higher site commissions — even if plaintiffs paid the same inflated price,” Judge Diaz said. “So plaintiffs’ injuries aren’t derivative of those suffered by the governments. Rather, plaintiffs and the governments are both direct victims.”

The families launched the proposed class action in June 2020, accusing mobile marketing company 3CI and inmate calling companies Securus and GTL of scheming to hike the price of collect calls from prisons by thwarting the competition.

The scheme impacted thousands of overcharged families, the underlying complaint alleges.

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The plaintiffs are represented by George F. Farah of Handley Farah & Anderson PLLC and Benjamin D. Brown and Robert A. Braun of Cohen Milstein Sellers & Toll PLLC.

Read 4th Circ. Revives Prison Phone Price-Fixing RICO Claims.