published Friday, March 21st, 2014

Judge keeps Nashville-based private prison company lawsuit moving during FBI probe

This June 15, 2010, file photo, shows the Idaho Correctional Center south of Boise, Idaho. The FBI has launched a criminal investigation into Nashville, Tenn.-based private prison company Corrections Corporation of America, which ran what Idaho inmates called "Gladiator School" because of a violent reputation they say understaffing helped create.
This June 15, 2010, file photo, shows the Idaho Correctional Center south of Boise, Idaho. The FBI has launched a criminal investigation into Nashville, Tenn.-based private prison company Corrections Corporation of America, which ran what Idaho inmates called "Gladiator School" because of a violent reputation they say understaffing helped create.
Photo by Associated Press /Chattanooga Times Free Press.

BOISE, Idaho — A federal judge says he won't put a lawsuit against a major private prison company on hold while the FBI investigates the company for possible criminal fraud charges.

U.S. District Judge Edward Lodge made the ruling this week in a lawsuit brought by a group of Idaho inmates against the Nashville, Tenn.-based Corrections Corporation of America. The company had asked the judge to put the lawsuit on hold, contending that if its employees had to testify in the lawsuit, they could be at risk of incriminating themselves in the FBI investigation.

The FBI launched an investigation into CCA earlier this year, looking at whether the company violated federal fraud laws by falsifying reports to the state about staffing levels at the prison.

If the employees pleaded the Fifth Amendment during the civil case, CCA's attorneys feared it would cause a jury to unfairly infer that the company broke the law.

Eight inmates at the Idaho Correctional Center sued the prison company in 2012, contending they were attacked by a prison gang because there weren't enough guards on duty. The inmates also contend that CCA understaffed the prison by thousands of hours and then falsified reports to the state to cover up the understaffing. The prison company has acknowledged understaffing the prison by thousands of hours in 2012, but denies the claims in the lawsuit and contends that the housing unit the inmates lived in was not understaffed at the time of the gang attack.

In the Wednesday ruling, Lodge said that CCA's concerns were entirely speculative. The prison company hasn't offered any evidence that its employees would likely assert their Fifth Amendment rights, the judge said.

"Further, even if a witness does so, his or her refusal to testify does not necessarily mean that CCA, an entirely different entity, will be subject to a negative inference," Lodge wrote.

There is little burden on CCA in letting the lawsuit proceed while the FBI pursues the investigation, Lodge wrote. Besides, he said, that investigation could take years and it's possible that it could conclude with no charges filed. Meanwhile, the public has a high interest in the case, the judge found.

"This is a high-profile case, and the Court has determined that the interests of the public would be frustrated if a stay were issued," Lodge wrote. "Idaho's citizenry has a right to be informed about these serious issues of public concern."

CCA has operated Idaho's largest private prison for more than a decade under a $29 million annual contract with the state. But last year an Associated Press investigation uncovered anomalies in the prison company's monthly staffing reports to the state. The reports showed that some guards were listed as working as many as 48 hours straight to meet minimum staffing requirements.

The company subsequently acknowledged that it had understaffed the facility and that employees had falsified the staffing reports. CCA has agreed to pay the state $1 million to settle the understaffing issue.

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