Lead Opinion
OPINION OF THE COURT
Between 1996 and 2007, the Department of Correctional Services (DOCS) contracted with MCI Worldcom Communications Inc. (MCI) for the provision of telephone services in state prisons. Under the agreement, MCI charged the recipients of inmate collect calls a certain rate and paid a percentage of the revenues generated on each call to DOCS as a commission. The payment of these commissions was later restricted by statute. But this proceeding was commenced by petitioners—family members and legal services providers of inmates incarcerated in DOCS facilities—before such legislative action. Their verified petition and complaint alleges that the portion of the telephone charge allocated as a DOCS commission constituted an illegal tax or fee, amounted to a government taking without just compensation and violated petitioners’ equal protection and free speech and association rights. We agree with the Appellate Division that petitioners’ allegations fail to assert cognizable claims under the New York Constitution and we therefore affirm.
As detailed in our prior decision (see Walton v New York State Dept. of Correctional Servs.,
Because MCI is a telephone services provider, the rates or tariffs it charges customers require approval from the Federal Communications Commission (interstate calls) and the New York Public Service Commission (PSC) (intrastate calls). In 1998, the PSC approved in their entirety the variable rates that DOCS and MCI had agreed to in their 1996 contract, including a 60% per call commission payment.
In 2003, DOCS concluded that the existing variable rate structure was unfair to most families receiving calls and, as a result, DOCS and MCI amended their contract to provide for a flat rate (a $3 surcharge per call plus $.16 per minute) but continued the DOCS commission at 57.5%. MCI submitted a revised tariff filing with the PSC and a rate review proceeding ensued in which petitioners challenged the total rate as unjust and unreasonable, particularly the portion attributable to the DOCS commission. The PSC approved MCI’s rate change in October 2003 but, because DOCS is a government agency and not a telephone services provider, the PSC concluded that it lacked jurisdiction to assess the propriety of the DOCS commission. Thus, it reviewed only the “jurisdictional portion” of the rate—i.e., the 42.5% retained by MCI—and determined that it was just and reasonable. In doing so, the PSC referenced the fact that, outside the prison context, AT&T assessed a $2.25 surcharge plus a flat rate of $.30 per minute for station-to-station collect calls—a rate resulting in substantially greater call costs than the MCI “jurisdictional rate.” The PSC therefore directed that MCI file the new rate in a bifurcated form that
In this action, petitioners are two legal services providers who represent prisoners and three individuals who have accepted collect calls from family members incarcerated in DOCS facilities and paid the total rate charged by MCI under the inmate calling plan, including the DOCS commission.
First, petitioners alleged that, by collecting a commission, DOCS was taxing them to pay for Family Benefit Fund services without legislative authorization to impose such a tax. Second, they characterized the DOCS commission as a governmental taking of property (money) without just compensation. Third, they argued that the inclusion of the commission in the rates charged for telephone services violated their right to the equal protection of the law. Finally, they claimed that the call system impeded their freedom to associate with and speak to their loved ones and clients. Based on these causes of action, petitioners sought an injunction precluding MCI from charging more than the 42.5% “jurisdictional rate” reviewed by the PSC; a declaration that DOCS’ actions were illegal; and refunds from DOCS for the commissions that had been collected by MCI and forwarded to DOCS.
Respondents DOCS and MCI moved to dismiss the verified petition and complaint as untimely and asserted that the causes of action failed to state cognizable claims for relief. As a separate ground for dismissal, respondents contended that petitioners’ challenge to the rate collected by MCI was barred by the filed rate doctrine, which constituted a total defense even if petitioners’ allegations would otherwise be actionable. Supreme Court and the Appellate Division dismissed petitioners’
While Walton I was pending in this Court, Governor Eliot Spitzer announced a change in executive policy and required DOCS to discontinue the practice of collecting commissions on inmate calls. The Legislature also acted, adopting Correction Law § 623 which, effective April 1, 2008, made it unlawful for DOCS to accept or receive revenue in excess of its reasonable operating costs for administering an inmate calling system (see L 2007, ch 240). The parties agree that these executive and legislative actions render petitioners’ claims for injunctive relief academic and that any decision in this case will affect the rights and liabilities of these parties only to the extent of determining petitioners’ entitlement to refunds.
After we decided Walton I, this matter was remitted to Supreme Court to address the arguments raised in the motions to dismiss that had not been reached due to the dismissal on the threshold statute of limitations issue. Supreme Court reviewed each of petitioners’ state constitutional arguments— the assertion that the DOCS commission constituted an unlawful tax, that it amounted to a governmental taking without just compensation, that it violated petitioners’ equal protection and free speech/association rights—but concluded that petitioners failed to state cognizable claims for relief, warranting dismissal of the verified petition and complaint (
We begin by clarifying what issues are not before us. Petitioners and the amici curiae urge that DOCS’ decision to seek a commission on calls made by inmates was, to say the least, ill-advised. They contend that the inclusion of a commission
With the caveat that, by its nature, incarceration restricts the ability of a prisoner to associate with family and friends, petitioners’ public policy arguments are clearly substantial. But the expedience of the contract design by this executive agency is not before us for review; our task is limited to determining whether our State Constitution precluded DOCS from entering into a telephone services arrangement that included a commission. Petitioners and the amici appropriately presented their concerns to the other branches of government and successfully influenced a change in state policy, first by gubernatorial directive and then by statute. Petitioners were therefore able to achieve the primary relief they sought in this litigation—a change in the inmate calling system, resulting in a significant reduction in costs incurred by call recipients.
The issue that remains for us to decide is whether the now-defunct DOCS policy violated the New York Constitution, a determination that is necessary because petitioners continue to seek refunds for the commission portion of the telephone charges they paid while the former plan was in effect. In reviewing a motion to dismiss, “the court will accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (Nonnon v City of New York,
I. The Illegal Tax or Fee Claim
Petitioners begin with the premise that the DOCS commission is a tax and, since taxes can be levied only by legislative bodies, DOCS’ contractual decision to collect a commission was illegal as it violated the Separation of Powers Doctrine embedded in the New York Constitution (see generally NY Const, art III, § 1; art XVI, § 1). In the same vein, petitioners assert that,
A tax is a charge that a government exacts from a citizen to defray the general costs of government unrelated to any particular benefit received by that citizen (see generally American Ins. Assn, v Lewis,
Beyond imposing taxes and engaging in regulatory activities that generate fees, governmental entities can and do participate in other economic activities through voluntary contractual arrangements with the private sector. For instance, they buy, sell and lease real property, they purchase furniture, computers and other commodities, they sell surplus goods, they operate hospitals and colleges, and they enter into agreements with consultants, contractors and service providers. Although petitioners contend that the DOCS commission constituted exaction of a tax or fee, we conclude that MCI’s contractual obligation fell into this other permissible category of governmental activity.
For security reasons, DOCS chose to implement an inmate calling plan facilitated by the installation of coinless payphones used by inmates to place station-to-station collect calls.
In the telephone services industry, a per-call commission is a standard method of compensating the owner of the property where a payphone is located. These commissions have been deemed “business expense paid to compensate for the rental and maintenance of the space occupied by the payphone and for access to the telephone user” (Matter of AT & T’s Private Payphone Commn. Plan, 3 FCCR 5834, 5836 [1988]). Whether the payphone is positioned in a public airport or a private shopping mall, the owner of the property is entitled to reasonable compensation for allowing the telephone services provider access to its property. And, although other ways of calculating the value of the rent or access charge could certainly be devised, per-call commissions have apparently become the industry standard.
Even though this per-call calculation methodology invites the argument that the commission is an additional rate that the provider will undoubtedly pass along to the consumer, commissions have not been viewed by regulatory bodies as a separate tariff. Rather, they are expenses incurred by the telephone services provider, comparable to other types of operating costs, that are encompassed within the tariff ultimately filed with the regulatory agencies and charged to customers (see e.g. id.). Not only were such commissions common in the payphone industry but, during the period relevant to this lawsuit, they were often included in other state inmate calling plans where the commission typically ranged from 20% to 63% (In re Implementation of Pay Tel. Reclassification & Compensation Provisions of Telecom. Act of 1996, 17 FCCR 3248, 3253 n 34 [2002]).
Given that no tax or fee has been imposed on MCI—the company that is actually obligated to pay the commission—we are not persuaded that the commission was transformed into a tax or fee just because MCI passed this cost on to call recipients along with its other reasonable operating expenses. If the State leased public property that it owned to a commercial retail business at a profitable rent, would customers be able to complain that they had been “taxed” when the business tenant passed on its rental costs by charging higher prices for its goods? This Court has never held that the government is precluded under the Constitution from charging market rents for its properties, nor have we suggested that, when it does so, its revenues can be no greater than the amount necessary to cover the actual costs associated with ownership or maintenance. Moreover, it is significant that DOCS had no “enforcement” authority vis-a-vis the call recipient and could not attempt to collect the commission from that consumer if MCI failed to do so, another fact that distinguishes this scenario from a tax (see e.g. Tax Law § 1133 [b], [c] [allowing State to recover unpaid sales and use taxes from consumers]). Petitioners were given the choice of accepting or rejecting the calls and were charged only if they decided to receive telephone services from MCI.
Finally, even if the DOCS commission is viewed as a tax as petitioners maintain, their claim for refunds would be barred because they failed to pay the rate under protest (Video Aid Corp. v Town of Wallkill,
II. The “Taking” Cause of Action
Article I, § 7 (a) of the State Constitution provides that “[p]rivate property shall not be taken for public use without just compensation.” Invoking this provision, petitioners claim that DOCS’ collection of a commission is a “taking” without just compensation. Petitioners do not assert that the State has created a property interest in low-cost telephone services for inmate call recipients or anyone else. Rather, the property at issue here is the money petitioners paid for the services provided by MCI.
Petitioners’ takings argument suffers from the same disability as their illegal taxation contention—a “taking” cannot occur in the absence of government compulsion. Typically, takings claims involve the appropriation or occupation of property without the owner’s consent or, in the case of a regulatory taking, the enactment of legislation or an ordinance that is alleged to have destroyed the commercial value of a particular property (see e.g. Matter of Smith v Town of Mendon,
Nor was there any appropriation of private property without “just compensation” because, in exchange for their payments, petitioners received telephone services. Notably, although they assert that DOCS should have arranged for more affordable rates, petitioners do not allege that the rate charged by MCI was exorbitant from a market perspective. As the PSC determination indicated, during the same time frame and with the approval of the PSC, another telephone services provider was charging comparable if not higher rates for station-to-station collect calls in New York outside the inmate calling context. Essentially, petitioners’ takings claim boils down to the contention that DOCS had a constitutional obligation to ensure that the family members and legal services providers of inmates received telephone services at the lowest possible expense. While this might be a desirable policy decision, it was not an obligation mandated by the New York Constitution.
III. The Free Speech and Association Claim
Article I, § 8 of the New York Constitution provides: “Every citizen may freely speak, write and publish his or her sentiments on all subjects, being responsible for the abuse of that right; and no law shall be passed to restrain or abridge the liberty of speech or of the press.” Relying on this provision, petitioners contend that the increased cost of inmate calls resulting from the DOCS commission impaired their constitutionally protected right to speak to and associate with their incarcerated loved ones or clients.
In reviewing the propriety of limitations impacting the free speech and association rights of prisoners, we have employed the same analysis as the United States Supreme Court (see Matter of Lucas v Scully,
Thus, to state a viable claim under the Free Speech and Association Clause in this context, petitioners must allege that the DOCS commission was so high that it substantially impaired the limited right of inmates to contact and associate with family members or legal services providers and that the commission bore no reasonable relationship to legitimate penological aims. Even assuming their allegations to be true, petitioners do not meet this threshold.
While inmates unquestionably have a constitutional right to communicate with the outside world in a manner and to an extent consistent with their incarcerative status, petitioners point to no persuasive authority for the proposition that this equates to a right to use a specific means for such communication—the telephone—much less to guarantee telephone services at a particular cost. Virtually every court to have addressed this issue has held that there is no constitutionally guaranteed right of inmates to use a telephone (see e.g. United States v Footman,
Given that alternate means of communication remain available to New York inmates and their families (including mail and visitation), with mail offered at low or no cost (in fact, revenues from the DOCS commission were used to fund a free postage program), the additional expense associated with the DOCS commission on telephone calls did not imperil the right of inmates to communicate with others. Indeed, petitioners in this case indicate that they continued to accept collect calls from their loved ones despite the rate charged by MCI, albeit less frequently. Although we do not doubt that petitioners would have engaged in more of the real-time, verbal communication afforded by telephone technology if prices had been lower (and the value of such personal communication was certainly a motivation for the eventual legislation addressing this practice), the hardship they allege is not a constitutionally significant curtailment of the free speech and association guarantee, particularly given the limited nature of that right in prison settings.
IV The Equal Protection Claim
The New York Equal Protection Clause (NY Const, art I, § 11), modeled after its federal counterpart (see Under 21, Catholic Home Bur. for Dependent Children v City of New York,
In fact, there is no category of individuals situated similarly to petitioners that may be used as a basis of comparison. This is not a case where prison administrators have devised multiple calling programs, offering inmates in one facility rates more favorable than another. All recipients of inmate calls were treated the same way under the DOCS/MCI contract. Even comparing petitioners to the class they most closely resemble— recipients of station-to-station collect calls from non-inmates— they fail to state a cognizable equal protection claim.
Furthermore, petitioners have not alleged that recipients of station-to-station collect calls from non-inmates pay less than the rate they paid MCI. At best, the record suggests the costs were roughly equivalent because, when reviewing MCI’s rate, the PSC noted that AT&T imposed a surcharge of $2.25 per call plus $.30 per minute—a rate comparable to the inmate calling plan ($3 surcharge plus $.16 per minute). Indeed, a 10-minute non-inmate collect call on AT&T’s service would cost $5.25— $.65 more than MCI charged for the same call from an inmate. Petitioners point out that, beyond the prison environment,
In closing, we stress that our holding that petitioners’ constitutional challenges to the inclusion of a commission in the DOCS contract for inmate telephone services were lacking in merit should not be misinterpreted as an endorsement of the former DOCS policy. The Executive and the Legislature, the two branches of government responsible for evaluating the penological value of the system’s design and the accompanying economic impact on call recipients, have determined that commission charges in excess of actual expenses incurred by DOCS are not a proper cost to be passed on to the families and legal representatives of inmates. We do not doubt the wisdom of that public policy determination.
Having concluded that each of the constitutional claims was properly dismissed, we have no occasion to address DOCS’ alternative ground for affirmance—that petitioners’ request for refunds was barred by the filed rate doctrine defense.
Accordingly, the order of the Appellate Division should be affirmed, without costs.
Notes
. Different but similarly-situated litigants pursued state-court challenges to the 1996 contract but their claims were dismissed (see Bullard v State of New York,
. Because petitioners did not sue the PSC, the propriety of that agency’s decision not to review the total rate to assess whether it was just and reasonable is not before this Court for review.
. Petitioners have expressed an intent to seek class action certification.
. Petitioners articulated seven causes of action in their complaint. The Appellate Division rejected three of those—the claims for “enforcement” of the PSC determination, an accounting and for relief under General Business Law § 349—on additional grounds unrelated to timeliness and this Court upheld the dismissal of those claims Walton I,
. Since only the constitutional claims were reinstated and the relief potentially available was limited to refunds from DOCS, MCI ceased participating in this case and has not filed a brief in this appeal.
. The decision to implement a collect-call system was plainly within DOCS’ authority. Although, by enacting, the Legislature has foreclosed DOCS from collecting a commission that exceeds the costs incurred for operation of an inmate telephone service, it has clarified that DOCS has the discretion to determine whether to employ “a ‘prepaid’ or ‘collect call’ system, or a combination thereof’ (Correction Law § 623 [2]).
. Similar constitutional challenges to the commissions received by prison administrators in connection with other states’ inmate calling plans have not succeeded (see e.g. Arsberry v Illinois,
. The commission has been analogized to the user charges imposed by public airports on rental car companies and shuttle services who seek access to the customer base provided by such facilities. Claims that these constitute an illegal tax or fee have also been rejected (see e.g. A & E Parking v Detroit Metro. Wayne County Airport Auth.,
. While the dissent is correct that an expense associated with government regulation can be transformed into a tax if it substantially exceeds the costs incurred in administering the program or the government benefits received by the applicant, that analysis is inapplicable here since DOCS is not engaged in regulation of the telephone services industry, nor are telephone services a government benefit. In addition, DOCS has not imposed the commission—it was the product of a voluntary contractual arrangement. This case is therefore unlike the precedent relied on by the dissent involving fees imposed by a state or municipal agency engaged in regulatory activity (see American Ins. Assn., supra [“capping” fee imposed on insurers as a condition of doing business in New York constituted an unlawful tax where it bore no relationship to cost of administering licensing program or the benefits received by insurers]; Suffolk County Bldrs. Assn., supra [inspection fees imposed by health department with respect to issuance of permits were legitimate because there was a reasonable concurrence between the fees and regulatory program expenses]; Jewish Reconstructionist Synagogue of N. Shore v Incorporated Vil. of Roslyn Harbor,
. The dissent’s list of hypothetical examples of circumstances when the State might abuse its authority (dissenting op at 500-501) misses the mark since there is no analogy in the private sector for any of the hypothetical charges. In contrast, commissions on telephone services are a standard means of calculating rental costs in the payphone services industry—a private-sector business—and, in this case, MCI voluntarily entered into a contractual agreement to pay them to DOCS.
. This comparison is, however, also imperfect because, for reasons unrelated to the commission, it is to be expected that inmate calls will be more costly than non-inmate calls due to the many security features that must be implemented—features petitioners have not challenged in this lawsuit. And because prisoners initiate the calls, their family members are constrained by those security measures. Petitioners do not dispute that the bundle of security capabilities in the MCI plan need not, and generally is not, provided in regular calling plans involving non-inmates.
Concurrence Opinion
I would affirm the Appellate Division’s order on the ground that petitioners’ claims are barred by the filed rate doctrine. Thus, I do not reach the constitutional issues that engage the majority.
“The considerations underlying the [filed rate] doctrine . . . are preservation of the [ratesetting] agency’s primary jurisdiction over reasonableness of rates and the need to insure that regulated companies charge only those rates of which the agency has been made cognizant” (Arkansas Louisiana Gas Co. v Hall,
On October 30, 2003, the Public Service Commission (PSC) approved a modified rate structure permitting MCI Worldcom Communications, Inc. (MCI) to charge specified rates for inmate collect calls. As a result, petitioners paid the only rate that MCI was legally authorized to charge for these calls (see Public Service Law § 92 [2] [d] [utilities may collect only charges that are filed with the PSC and in effect]). On the importance of the PSC’s action, the Appellate Division’s decision in Bullard v State of New York (
Here, the PSC declined to review and approve the portion of the inmate collect call rate attributable to DOCS’s commission when it ruled on MCI’s proposed modified rate structure. This fact does not cut the ground from under the filed rate doctrine in this case, though, because the PSC nonetheless directed MCI to file the total rate—including the commission—which thereby became binding law and “the only lawful charge” that MCI
Further, the PSC, in fact, established the reasonableness of the total rate despite its disclaimer with respect to DOCS’s commission. In reviewing and approving just that portion of the rate to be retained by MCI, the PSC considered the rates charged by AT&T for non-inmate station-to-station collect calls. The evidence showed that the total cost of a 10-minute inmate collect call (including the commission) was $4.60 ($3 surcharge plus 16 cents per minute), which was significantly less than the $5.25 that AT&T charged for a 10-minute station-to-station collect call outside the prison context ($2.25 surcharge plus 30 cents per minute). As one of the amici points out, there are good reasons to encourage inmates to maintain their ties to family and the community, and an economical inmate call rate makes this easier. But an inmate call rate is not unreasonable just because it is not as low as it might be.
The dissent appears troubled by the notion that the filed rate doctrine might mandate dismissal of what remains of this lawsuit—a claim for refunds of the commissions (the allegedly excessive portion of the rate) from October 30, 2003 onward. I am hardly the first judge to understand the filed rate doctrine to preclude claims against state-operated prisons or telephone companies arising from the rates charged for inmate collect
And to be clear, I am not somehow taking the position that “a rate . . . placed in a regulatory agency’s file [is] unchallengeable, whether the agency has authority to regulate that rate or not” (dissenting op at 498). I am simply saying that petitioners were required to raise their constitutional and any other objections to the inmate collect call rate in a CPLR article 78 proceeding brought against the PSC to challenge its October 30, 2003 order. If successful, they would have been entitled to prospective relief only (see Matter of Burke v New York State Pub. Serv. Commn.,
. The dissent suggests that the PSC did not act within its “jurisdiction” as required by the filed rate doctrine because it did not have the “power to decide” whether DOCS’s commission was reasonable or lawful (dissenting op at 498). But whether or not the PSC possessed this particular “power to decide” makes no difference: the PSC clearly acted within its jurisdiction to approve telephone tariffs—which is to say it acted within its jurisdiction for purposes of the filed rate doctrine—when it ordered MCI to file the total rate.
. Petitioners participated extensively in the administrative proceedings before the PSC, which culminated in the October 30, 2003 order (see In re MCI WorldCom Communications, case 03-C-1058,
Dissenting Opinion
In Arsberry v Illinois (
I
The Public Service Commission (PSC) held that it had no power to decide whether DOCS acted reasonably or unreasonably, lawfully or unlawfully, in demanding that MCI pay to the State an extortionate commission on inmates’ telephone calls. The portion of MCI’s rates that resulted from the State’s commission was labeled by the PSC as “non-jurisdictional.” This ruling seems right to me; why should the constitutionality of the State’s practice be a matter for the PSC to decide? And if the PSC was right to disclaim jurisdiction, it seems obvious that the filed rate doctrine has no application here.
That doctrine states that a regulated entity may not “charge rates for its services other than those properly filed with the appropriate . . . regulatory authority” (Arkansas Louisiana Gas Co. v Hall,
Surprisingly, my concurring colleague never says whether she thinks the PSC’s disclaimer of jurisdiction in this case was right
If I have correctly understood the concurrence’s position, I disagree with it because, as I have said, the constitutional issues seem inappropriate for PSC consideration. Walton I provides no support for the contrary view, despite our remark, to which the concurrence refers (concurring op at 496), that the PSC “could have determined that MCI’s call rate and surcharge as a whole” were unlawful (Walton v New York State Dept. of Correctional Servs.,
II
It is plain from the complaint that the State charged petitioners—indirectly, through MCI—sums far in excess of what it cost the State to provide the service from which petitioners benefitted. The complaint says that the costs of maintaining and operating the prison telephone system were less than 8% of the money the State received from it. A document in the record suggests that the disproportion was even greater—that costs were less than 2% of revenues. It is also plain that the State was able to make this huge profit because it had imprisoned the people that petitioners wanted to talk to—that the State was, as Judge Posner put it, exploiting its monopoly of the “inmate market.” I think these allegations are sufficient to sustain petitioners’ claims of unconstitutional taxation, unlawful taking, and denial of equal protection. (I agree with the majority that petitioners’ free speech and association claims are legally insufficient.)
It is undisputed that if the payments at issue in this case are properly characterized as taxes, the State has violated the Constitution. Taxation is the province of the Legislature (see NY Const, art III, § 1; art XVI, § 1) and DOCS makes no claim that it may levy taxes without legislative authorization.
Taxation is, of course, the normal means by which states raise revenue, but two others have been recognized, which may be labeled as “user fees” (e.g., the State can charge for licenses to defray the cost of a regulatory program) and “market transactions” (e.g., the State can rent its unused office space, or sell its surplus property, for whatever it can get). (Perhaps there are still other valid ways of raising revenue, but no one has claimed that they are applicable in this case.) The payments in issue here cannot be defended as user fees, because the power to charge such fees is limited by the rule “that the fees charged be reasonably necessary to the accomplishment of the regulatory program” (Suffolk County Bldrs. Assn, v County of Suffolk,
Thus, DOCS either unconstitutionally exercised the taxing power or it engaged in legitimate market transactions. I conclude that it did the former.
The majority holds that DOCS was engaging in market transactions, drawing an analogy to a per-call commission that might be charged by an owner of real property for use of a pay telephone “in a public airport or a private shopping mall” (majority op at 486). The majority overlooks an obvious distinction: the people who use the phones at airports and shopping malls are not prevented from leaving the premises by armed guards. The owner of the shopping mall is ordinarily a private entity; the owner of the airport may be a public one, but in allowing use of its premises for a pay telephone it is acting essentially as a private market participant. It is not exploiting, to quote Judge Posner once more, “the monopoly of force that is the definition of government” (Arsberry,
Here, the State has used its imprisonment of inmates as a source of economic leverage. I cannot accept this as legitimate market activity. If the State can do this, why could it not charge for in-person visits to prison inmates—at a rate 50 times the cost of making such visits possible? Why could it not charge
A tax is “a compulsory contribution for the purpose of defraying the cost of government” (.American Ins. Assn. v Lewis,
I would hold that where, as in this case, the State has leveraged its police power for a profit, enough coercion is present to make the transaction involuntary—a tax, not an innocent marketplace exchange.
Unconstitutional Taking
The issue of coercion is likewise critical to the takings claim. The majority oversimplifies in saying that “a ‘taking’ cannot occur in the absence of government compulsion” (majority op at 489)—indeed, if it means “compulsion” literally, it misstates the law. The United States Supreme Court has held that surrenders of property rights not literally compelled by the government are nevertheless “takings” if they are exacted in exchange for
Equal Protection
If I were to view the payments made by petitioners here as no more than voluntary payments for telephone service, I would agree with the majority that petitioners have not been deprived of equal protection. It is true that petitioners are not similarly situated to any other group of telephone users. But the merit of petitioners’ equal protection claim becomes apparent when the State’s conduct is viewed as a tax, an exaction of money to defray the expenses of government.
The equal protection argument would be essentially the same if the Legislature, seeking to raise funds to operate the prison system, had enacted a tax payable by those people who happened to receive telephone calls from prisoners. I would not think there was an equal protection violation if the State levied such a tax (or user fee) on the prisoners themselves. It is not arbitrary or unfair to require those who have made an expenditure necessary to pay the cost of it. But a tax on everyone who chooses to talk to an inmate on the telephone is arbitrary. There is no rational basis for choosing those people, rather than either the inmates or the State’s citizens in general, to keep the prison system solvent. The majority concludes otherwise only by overlooking the fact that the State’s practice was, essentially, a coercive fiscal measure.
Accordingly, I would reinstate petitioners’ unlawful tax, unlawful taking and equal protection claims.
Order affirmed, without costs.