article: This is a case about the unfair business practices of Global Tel*Link, a private company with a state granted monopoly on telephone services in New Jersey's prison systems. On August 20, 2013 the plaintiffs, people incarcerated in New Jersey prisons and people who created accounts with Global Tel*Link to receive calls from New Jersey prisoners, filed this class action lawsuit in the United States District Court for the District of New Jersey, where it was assigned to United States District Judge William J. Martini. The plaintiffs sued Global Tel*Link and several associated companies, alleging violations of New Jersey's Consumer Fraud and Public Utilities statutes, the Federal Communications Act (42 U.S.C. § 201), the Takings Clause of the Fifth Amendment under 42 U.S.C. § 1983, and the Declaratory Judgment Act (28 U.S.C. § 2201). They plaintiffs also brought a common law unjust enrichment claim. In their § 1983 count, the plaintiffs alleged that the defendants, acting on behalf of the State of New Jersey, imposed unconscionable fees and rates on plaintiffs, which amounted to a violation of the Fifth Amendment's prohibition on the taking of property without just compensation. Represented by private counsel, the plaintiffs sought compensatory damages, disgorgment, restitution, and prejudgment interest, as well as injunctive relief and attorneys' fees. Specifically, they claimed that the defendant's billing policies were "abusive, discriminatory, and unreasonable." In 2006, Global Tel*Link, an Alabama company that provides telecommunications services and surveillance technology to correctional institutions, bought the contractual right to be the sole provider of telecommunications for prisons and many county jails in New Jersey. The plaintiffs in this case alleged that Global Tel*Link abused its monopoly power by charging plaintiffs exorbitant rates, forcing friends and family of incarcerated people to create prepaid accounts with minimum payments of $25 to receive calls from their loved ones, forfeiting money from prepaid accounts when they went unused for 90 days, and failing to disclose rates, fees, and billing practices. The defendants paid commissions, sometimes exceeding 50% of their revenue, to the correctional agency they contracted with. To turn a profit the defendants charged exceedingly high rates for calls and imposed numerous fees, such a 19% fee on deposits to the prepaid accounts. On November 22, 2013, the defendants moved to dismiss the case, arguing that it should have been brought as a complaint to the Federal Communications Commission (FCC) instead. At that time, the FCC had been in the process of determining whether the defendants' business practices were violations of the Federal Communications Act, as alleged in this lawsuit. On September 8, 2014, the court issued an opinion denying the motion to dismiss, but staying the case until the conclusion of the FCC's proceedings. The plaintiffs responded on September 19, 2014 by withdrawing their Federal Communications Act claim, as well as their claim under New Jersey Public Utilities Statutes. After close to a year of discovery disputes, on August 7, 2015, the defendants moved to compel arbitration based on arbitration clauses in their products' terms of use. On February 11, 2016, Judge Martini denied the motion with respect to all but one of the plaintiffs. He found that the recorded message notifying Global Tel*Link users of its terms of use, including the arbitration provision, did not inform most of the plaintiffs that they would have to abide by Global Tel*link's terms of use to use its services. Consequently, the court held the plaintiffs did not enter into a legally enforceable contract with the defendants. One of the named plaintiffs who created their account through the defendants' website, which used a different system, was forced to arbitrate their claim. On June 15, 2016, the defendants filed a motion with the Judicial Panel for Multidistrict Litigation to consolidate this case with several others on which prisoners and their families were suing Global Tel*Link. The Panel denied that request in an October 13, 2015 order, docketed as JPML No. 2651, Entry 23. The defendants appealed Judge Martini's arbitration decision to the United States Court of Appeals for the Third Circuit on March 9, 2016. On March 29, 2017, the Third Circuit affirmed Judge Martini's ruling in an opinion by Judge Thomas M. Hardiman. James v. Global Tel*Link Corp. 852 F.3d 262 (3d Cir. 2017). The Circuit agreed with Judge Martini that because the plaintiffs did not receive the defendants' terms of use or were informed that use of the defendants' services constituted assent to the terms, the plaintiffs were not bound by them or the arbitration clause they contained. While the appeal was pending, the case lay mostly dormant in the district court. The litigation continued to move slowly until the plaintiffs moved for class certification on their New Jersey Consumer Fraud Act and § 1983 Fifth Amendment Takings Clause claims on February 27, 2018. On August 6, 2018, Judge Martini granted that motion and certified a class consisting of all people incarcerated in New Jersey prisons or correctional institutions who used a phone system provided by the defendants and people who received calls from a person incarcerated in New Jersey or established an advance pay account to receive calls from such a person from 2006 to June 2011 (with the exception of people calling from or to Essex County). On March 27, 2018 the defendants moved for summary judgment and on May 4, the plaintiffs filed a cross-motion on their § 1983 Takings claim. Judge Martini denied both motions on August 6 in a separate opinion from the one addressing the class certification question.The court rejected several of the defendants' legal claims, including the assertion that they were not state actors amenable to suit under § 1983 and finding issues of material fact for others. On April 2, 2018, Judge Martini referred the case to mediation and took the step of scheduling a settlement conference on December 10, 2019. However, the parties were unable to reach an agreement and the case was scheduled for trial in March of 2020. On January 24, 2020, the defendants moved for judgment on the pleadings and to decertify the plaintiffs' class. Judge Martini granted the defendants' motion and dismissed plaintiffs' Fifth Amendments Takings claims on March 2, 2020. He found that denying the plaintiffs reasonably priced calling options did not amount to a taking as it lacked legal compulsion. The court did not resolve the decertification motion. This case was scheduled to go to trial on March 16, 2020. However, in a March 3 settlement conference the parties reached an agreement on the broad terms of a settlement and the trial was canceled. After more negotiation, the plaintiffs moved for preliminary approval of a proposed settlement on May 28, 2020, which Judge Martini granted on July 15, 2020. The settlement provided that the defendants would pay $25 million to a settlement fund. That money would be distributed to members of the plaintiffs' class based on the amount each member spent on the defendants' services, with a maximum recovery of $5,000 per account. While the class certified by the court included people who used the defendants' services in New Jersey after 2006, the settlement only allowed for payment to class members who used the defendants' services from 2006 to 2016. The settlement also allowed the plaintiffs to apply for a maximum of $8,332,500 in attorneys' fees. It also provided that class members who were still incarcerated in New Jersey would receive their payments in the form of credits on the phone accounts without filing a proof of claim. However, the settlement did not enjoin the defendants from continuing to engage in unfair business practices, as the plaintiffs had requested in their complaint. After the proposed settlement was filed, on September 21, 2020, several plaintiffs from a separate class action against the defendants in the Northern District of Georgia moved to intervene in this case. The plaintiffs in the Georgia case also challenged some of the defendants' business practices, but on behalf of a putative class of individuals across the country who used the defendants' services. On October 22, 2020, Judge Martini denied this motion, finding that the Georgia plaintiffs did not have a sufficient direct interest in this case to intervene, but allowing them to appear as amicus curiae at the fairness hearing. That hearing happened on October 15, 2020 and a week on October 22, 2020 later Judge Martini issued an opinion approving the settlement. He found that the settlement met all the relevant tests for approval and that he could not address the Georgia plaintiffs' concerns about the settlement, as their class had not yet been certified. The case was closed the day of the order approving the settlement, though the settlement provides that the court will retain jurisdiction over the settlement and its enforcement. The is case ongoing as of November 2020 for settlement enforcement purposes.
summary: In 2013 New Jersey prisoners and their loved ones filed this class action complaint against Global Tel*Link, a major prison telecommunications provider, in the United States District Court for the District of New Jersey. The plaintiffs alleged that the defendants high billing rates and unjust billing practices violated New Jersey law, the Federal Communications act, and the Fifth Amendment's Takings clause through 42 U.S.C. § 1983. In October of 2020, the parties reached a settlement in which the defendants agreed to pay $25 million to the plaintiffs and other class members. This case remains open for settlement enforcement purposes.