Politicians in Arkansas were not happy that the CARES Act might provide refunds to inmates. Accordingly, the Arkansas General Assembly passed Arkansas Act 1110. Act 1110 instructs Arkansas Department of Corrections ("ADC") officials to withhold any stimulus checks paid to inmates and instead use the funds in one of two ways. First, the funds must be used to pay off a prisoner's court fines, fees, costs, or restitution. Second, if a prisoner does not owe such debts, the funds must be distributed in equal parts to an “inmate welfare fund” and the Division of Correction Inmate Care and Custody Fund Account. Of $3.5 million collected so far, less than $500,000 have been applied to the first category. Inmates challenged the law as an unconstitutional taking. A federal judge found their arguments well taken with respect to the second category and issued a preliminary injunction on September 3, 2021. Some highlights from the order:
The State of Arkansas may not take private property for public use without just compensation.112 Money is property protected by the Takings Clause.113 When money is taken from a citizen pursuant to an official policy for public use, just compensation is required. This simple concept is one of the great bulwarks of freedom against state tyranny.
The ADC officials argue that confiscation of the prisoners' stimulus funds does not constitute a taking because there is no pecuniary loss for the prisoner. To the extent their position is decipherable, the ADC officials appear to be arguing that (1) using a prisoner's funds to force him to pay his outstanding debts provides him with a dollar-for-dollar benefit, and (2) using a prisoner's funds to bulk up the inmate welfare fund and the Inmate Care and Custody Fund Account provides a collective benefit that matches the individual monetary “contributions” from a prisoner.
The first argument misses the mark a little bit, but it is within the realm of reason. The dollar-for-dollar benefit is not relevant to whether a taking has occurred. But it is relevant to whether the taking is without just compensation. “Just compensation normally is to be measured by 'the market value of the property at the time of the taking.'”114 Here, the calculation is quite simple since the property to be taken is money. As far as the portion of the monies used by ADC officials to pay off Mr. Lamar's fines, fees, or restitution, he will be compensated with a dollar-for-dollar benefit. That qualifies as just compensation under our fairly loose precedents. This form of just compensation may not be to Mr. Lamar's liking, but the Constitution does not require Mr. Lamar to be happy with the form of the compensation provided.115
The ADC official's second argument is a different story entirely. Several words come to mind to describe this argument: dystopian, Orwellian, Kafkaesque. To state the obvious, which apparently needs stating, “a State, by ipse dixit, may not transform private property into public property without just compensation.”116 When ADC officials take a prisoner's money and put it into funds to be used by the ADC partially for the collective benefit of all prisoners and partially for ADC's general operating expenses, they commit a classic taking. It is no less a taking because some of the money goes into the “inmate welfare fund” and such fund “shall be used for the general benefit of the inmates.”117
The ADC's fallback position is basically a repackaging of the just-discussed argument. The ADC argues that, even if the Court considers the confiscation of the prisoners' funds a taking, there has been and will be just compensation for the taking. But the only “compensation” alleged by the ADC officials is that “the 'inmate welfare fund' shall be used for the general benefit of the inmates.”118 While the Constitution might not officially pick sides in the philosophical battle between communism and capitalism, this line of thinking is emphatically more Marx than Madison. There is no evidence whatsoever that shows that whatever personal benefits Mr. Lamar will receive in return for his forced “contribution” to the collective purse match or exceed the money he must give up.119 Thus, Mr. Lamar is more likely than not to succeed on the merits in proving that there will imminently be a taking without just compensation.
Footnotes to this portion of the order:
112 U.S. Const. am. V; Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 122 (1978) (The Fifth Amendment's Takings Clause “is applicable to the States through the Fourteenth Amendment.”).
113 See Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 616 (2013) (discussing “cases in which we treated confiscations of money as takings despite their functional similarity to a tax”). The ADC officials argue that prisoners have no property interest in money. That's absurd and not what either Arkansas law or Eighth Circuit precedent say. See supra notes 61-62 and accompanying text.
114 Horne v. Dep't of Agric., 576 U.S. 350, 369 (2015) (quoting United States v. 50 Acres of Land, 469 U.S. 24, 29 (1984)).
115 When the government exercises its power of eminent domain to take someone's house, the little money paid for it is usually cold comfort. But, at least under current Supreme Court precedent, the government nonetheless satisfies the Takings Clause when it pays that person the monetary equivalent of their real property.
116 Webb's Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 164 (1980).
117 Lamar Case Docket, Defs.' Br. in Supp. of Mot. to Dismiss (Doc. 16) at 8 (quoting Ark. Code Ann. § 12-29-107).
119 Even under the ADC officials' theory there is not full compensation. Only half of Mr. Lamar's excess stimulus funds will go to the inmate welfare fund. The other half goes to the Inmate Care and Custody Fund, which is essentially the ADC's general operating fund. Ark. Code Ann. § 19-5-302(1)(A) (2019) (“The Division of Correction Inmate Care and Custody Fund Account shall be used for the maintenance, operation, and improvement of the Division of Correction in carrying out those powers, functions, and duties relating to nonfarm or crop-producing programs as established by law.”).