United States: Probation Company Is Not A Government Entity For The Purpose Of CAFA

Last Updated: August 20 2014
Article by CAFA Law Blog

McGee v. Sentinel Offender Servs., LLC, 2013 WL 2436658 (11th Cir. June 6, 2013).  

A question arose before the Eleventh Circuit if a probation company is a government entity so that it could not assert federal jurisdiction under CAFA.  The Eleventh Circuit held that the probation company who is contracted by the state for services was an officer of court like private attorneys, and not a government entity for the purpose of CAFA.

The plaintiff, a convict, brought an action in Superior Court of Richmond County, asking the Court to hold the defendant in criminal contempt of court for resisting the Superior Court's order granting the plaintiff a writ of habeas corpus and using its position as a probation company to attempt to collect a debt that was not owed or due by threatening to have the plaintiff jailed without bond.  The plaintiff also alleged that the defendant engaged in a pattern of racketeering activity as defined by the Georgia Racketeer Influenced and Corrupt Organization Act (RICO), O.C.G.A. § 16-14-1 et seq.

Earlier, in a misdemeanor action, the plaintiff had been sentenced to prison.  His sentence was later suspended and he was placed on probation.  When the plaintiff stopped reporting and failed to pay supervision fees to the defendant, a private probation services, his probation was revoked.  The plaintiff was instructed to pay the due, but when he failed to do so, he was sent to jail.

Thereafter, the Superior Court of Richmond County granted the plaintiff's petition for habaeus corpus, holding that the plaintiff lacked the mental competence to waive his right to counsel at his probation revocation hearing, and that the plaintiff's continued confinement would be unlawful.  After the plaintiff's release, the defendant sent him two letters stating that he had failed to report to his probation officer and that he must pay his dues failing which the defendant would petition the court to revoke his probation.

The defendant removed this action to the District Court pursuant to the diversity jurisdiction, and the District Court denied the plaintiff's motion to remand.

Subsequently, the District Court issued a permanent injunction forbidding the defendant from taking any action to collect any fee or to have any arrest warrant issued that would interfere with the habeas relief granted.  The District Court also acknowledged that the plaintiff had withdrawn his petition for contempt.

The defendant asserted a counterclaim seeking a declaration affirming the constitutionality of

O.C.G.A § 42-8-100(g), and moved for summary judgment, asserting that the RICO claim and constitutional challenge to O.C.G.A. § 42-8-100(g) failed as a matter of law.  The plaintiff also moved for partial summary judgment on his constitutional challenge to O.C.G.A. § 42-8-100(g).  The District Court granted the defendant's motion and denied the plaintiff's motion.

On appeal, the Eleventh Circuit affirmed the order of the District Court.

First, the plaintiff argued that the action was improperly removed from state court because the defendant did not satisfy its burden of establishing the $5 million amount-in-controversy requirement under CAFA.  Because the plaintiff's complaint did not plead a specific amount of damages, the Eleventh Circuit observed that the defendant must prove by a preponderance of the evidence that the amount in controversy exceeded the jurisdictional requirement.

The defendant submitted a declaration from its Chief Operating Officer indicating that it had collected $5,675,639.20 in supervision fees from individuals who had been convicted of misdemeanor or ordinance violations and were presently under probation supervised by the defendant as well as $2,086,811.08 in electronic-monitoring fees and $183,049.00 in drug-screening fees from the same population for a total of $7,945,499.28.

The plaintiff equated the defendant's declaration with the insufficient affidavit in Miedema v. Maytag Corp., 450 F.3d 1322 (11th Cir. 2006), wherein the court held that the affidavit submitted by Maytag was insufficient to establish CAFA jurisdiction because the amount in controversy was based on an estimate rather than actual sales data.  The Eleventh Circuit, however, noted that the defendant's declaration unequivocally provided the amount of fees collected from the relevant probationers, and that the plaintiff failed to show or even suggest that these amounts were uncertain, erroneous, or otherwise based on guesswork.  

Further, although the plaintiff asserted that the declaration was insufficient because it did not show exactly when the fees were collected and during what applicable statute of limitations, the Eleventh Circuit stated that when determining the amount in controversy, a court does not consider whether some damages claimed by the plaintiff might be precluded by a statute of limitations.

Finally, the plaintiff contended that because the defendant was a governmental entity, it could not assert federal jurisdiction under CAFA.  The plaintiff claimed that the defendant was a governmental entity because the Georgia Court of Appeals in Huzzie v. State, 253 Ga. App. 225, 226, (Ga. Ct. App. 2002) had determined that private probation companies were officers of the court.

The Eleventh Circuit, however, remarked that the plaintiff had overlooked that the same court also recognized that the probation company in that case was a private entity with whom the State of Georgia contracted for services.  The Eleventh Circuit opined that just as private attorneys are officers of the court yet could not remotely be considered governmental entities, so did the defendant carry out its responsibility to the court without adopting the trappings of the state.

Next, the Eleventh Circuit noted that without any evidence suggesting that an employee of the defendant had the requisite intent to commit theft by deception, the Eleventh Circuit opined that the plaintiff could not present a genuine issue of material fact regarding the defendant's intent, and that summary judgment therefore was appropriate.

Accordingly, the Eleventh Circuit affirmed the order of the District Court denying remand and granting summary judgment in favor of the defendant.  – JR

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