by David M. Reutter

On November 11, 2024, private prison and jail healthcare contractor Wellpath LLC filed for bankruptcy protection from debtors collectively owed $544 million, casting doubt on its ability to continue in business, much less pay settlements and verdicts owed in suits for poor medical care filed by prisoners, detainees or their estates.

One of the many cases still pending against the firm was filed by the family of a Virginia detainee who died of “salt wasting” after being denied medication necessary to control the disorder by officials at Henry County Adult Detention Center (HCADC), where Wellpath held the healthcare contract. Deborah Sue Damron, a firm nurse responsible for Brad Steven Hensley’s care, was not only named a defendant in the civil case but also criminally charged after his death with involuntary manslaughter.

Hensley, 42, was born with Congenital Adrenal Hyperplasia, which caused him to suffer from “salt wasting” when his body failed to produce cortisol needed to regulate blood pressure and blood sugar, among other things. Hensley’s condition was treated with twice daily doses of prescribed Prednisone and Fludrocortisone, which was noted at booking into HCADC on August 22, 2022. It was further noted that Hensley had ...

In June 2024, after Oklahoma failed to meet a $3 million pay hike demanded by The GEO Group, Inc., the private prison operator gave notice to terminate its contract to run Lawton Correctional and Rehabilitation Facility (LCRF), the state’s last private prison—giving the Oklahoma Department of Corrections (DOC) just three months to find another home for 2,375 prisoners. Unsurprisingly, the state Board of Corrections (BOC), which provides oversight for DOC, then approved a one-year extension for GEO Group to continue running the prison.

Three prisoners died at LCRF in 2023: Matthew Treat, 36, suffered a fatal fentanyl overdose on March 21; Loren Dean Tucker was fatally stabbed by fellow prisoners on May 6, four days after turning 31; and Raymond Bailey, 45, was found dead in a trash can on October 26, gagged, hogtied and stabbed multiple times. After getting rid of 10 guards, GEO Group blamed them for a laundry list of contractual failures which contributed to the deaths: prisoners who were allowed to roam unsupervised and not locked in their cells; mandatory security checks that were skipped; and records that were falsified in all three deaths—a crime under state law, though none of the former employees was referred ...

In a suit filed on September 30, 2024, attorney Daniel Horwitz accused four judges in the federal court for the Middle District of Tennessee of violating his First Amendment rights with a gag order that was issued in a case he was litigating against private prison giant CoreCivic. As PLN reported, the Court’s July 2022 order silenced Horwitz’s criticism of the company and even required him to delete related tweets from his social media account on Twitter, now known as X. [See: PLN, Feb. 2023, p.42.]

CoreCivic settled that case, along with four others Horwitz had pending against the firm, leading the judges in each to dismiss his appeal to the gag order as moot. That left only a lawsuit to continue his challenge to the Court’s local rule, under which the order was issued. “Mr. Horwitz needs to know the extent to which Rule 83.04 restricts his speech about his litigation in the Middle District because he continues to litigate in this Court, and he continues to do so against CoreCivic—a party that has already invoked Rule 83.04 to silence Mr. Horwitz’s speech and has demonstrated that it will do so again each time Mr. Horwitz asserts his right ...

On September 30, 2024, Utah-based Management & Training Corp. (MTC) ended its contract to operate the Giles W. Dalby Correctional Facility in Garza County, Texas. The lockup is owned by the county, which confirmed that most of some 170 employees were out of work.

MTC operated Dalby to hold federal detainees for U.S. Marshals until a ban issued in 2021 by the administration of Pres. Joseph R. Biden, Jr. (D). Garza County officials quickly brought the lockup in line with Texas Jail Commission (TJC) standards as MTC inked contracts to hold overflow from jails in Harris County and Tarrant County.

But after a failed inspection, TJC issued Dalby a notice of non-compliance on December 18, 2023. The problems were corrected, Garza County Judge Lee Norman said. However, no one notified Tarrant County, whose blindsided Commissioners voted to end their contract on February 6, 2024. Harris County also pulled out its detainees and sent them to other lockups; one, Louisiana’s Natchitoches Parish Correctional Center, inked a new contract with private jail operator LaSalle Corrections for a five-year term beginning November 1, 2024—the same day that Harris County detainees were due to arrive. It was unclear where other overflow detainees went, but ...

Under the terms of a settlement announced in the bankruptcy of former prison medical contractor Corizon Health on July 17, 2024, the firm’s creditors will receive almost 39% more than the amount they originally negotiated. However, that brings the total settlement to just $75 million, far too little to satisfy hundreds of creditors—including several hundred prisoners and their estates owed settlement payouts from medical negligence and wrongful death suits.

As PLN reported, Corizon Health re-­incorporated in Texas as two firms in 2023, keeping $200 million in contracts for prison and jail medical care in one company called YesCare. At the same time, nearly $1.2 billion in liabilities—including unpaid prisoner lawsuit payouts—got dumped into another firm called Tehum Care Services. The latter then filed for bankruptcy to avoid paying what was owed, completing a shady-­yet-­legal maneuver known as the “Texas Two Step.” [See: PLN, Aug. 2023, p.35.]

The original settlement would have paid creditors just $54 million, including $8.5 million to resolve prisoner claims for an average of just $5,000 each. But that deal fell apart in April 2024, when Judge Christopher M. Lopez of the U.S. Bankruptcy Court for the Southern District of Texas chastised lawyers at both tables for ...

by David M. Reutter

On September 30, 2024, the federal court for the District of Oregon sanctioned private prison and jail medical contractor Wellpath, LLC for destroying evidence in a suit filed over a detainee death at the Josephine County Jail (JCJ). It was the second time in just over a year that the firm was hit with sanctions in an Oregon jail death case. More sanctions were issued for discovery violations in earlier suits—three in 2020 in Washington, Michigan and Arkansas plus another in 2022 in California, as PLN reported. [See: PLN, Aug. 2023, p.69.]

The two suits filed in the U.S. District Court for the District of Oregon claimed that Wellpath was deliberately indifferent to the needs of pretrial detainees, resulting in their deaths. Rocky Stewart was found dead in his Coos County Jail cell on December 2, 2017, only one day after booking. Janelle Marie Butterfield committed suicide at JCJ on July 27, 2018, after 40 days of incarceration.

In both cases, attorneys representing Plaintiffs notified Wellpath shortly after the deaths to “preserve all evidence and information” related to the cases. The district court eventually found that Wellpath’s retention policy for electronically stored information (ESI), which it ...

by Douglas Ankney

As PLN readers know, medical care in America’s prisons and jails is horrific even by the low standard courts have set to determine what is constitutionally sufficient. In yet another case, the State of Maryland and Wexford Health Sources, the privately contracted medical provider for its Department of Public Safety and Correctional Services (DPSCS), agreed on April 3, 2024, to pay prisoner Nathaniel Appleby-­El $200,000 for denied medical care that left him blind in his right eye.

On May 23, 2016, while Appleby-­El was awaiting transfer from Patuxent Correctional Institution in Jessup, he suddenly went blind in his right eye. He was promised treatment, but he did not see an eye doctor before his transfer two days later to Branch Correctional Institution (BCI) in Cumberland. During intake there, Appleby-­El reported to Wexford Registered Nurse Dawn Hawk what he believed was a detached retina. Hawk dismissed the concern and explained standard “sick call procedures” to him. Beginning on May 26, 2016, Appleby-­El submitted four sick-­call requests over the next two weeks, each time calling his condition a medical emergency requiring an ophthalmologist. Eventually, he ran into Registered Nurse James Hunt and complained about his unanswered medical requests. Hunt ...

On August 2, 2024, Florida-­based Armor Health Management LLC petitioned the Miami-­Dade County Circuit Court to liquidate its assets to Enhanced Management Services (EMS), as part of a global settlement with creditors. That will free EMS and its owner, Dr. Jose Jesus Armas, of the bulk of debt owed by Armor—which Armas also founded.

The company’s original petition to assign its assets, filed in the circuit court on October 11, 2023, disclosed that $1.455 million was owed to secured creditors, including BankUnited, plus $319,714.68 in outstanding payroll and related expenses; another $153.5 million in unsecured debt included unpaid bills owed to pharmacies, consultants, diagnostic services, clinics and other subcontractors. It also included $12 million in verdicts and settlements in over 100 lawsuits filed by current and former prisoners or their estates.

Armor named Daniel J. Sterner with Development Specialists, Inc. as its assignee to “liquidate the assets of [its] estate” and then “pay and discharge in full, to the extent that funds are available … all of the debts and liabilities now due.” BankUnited sold its note to Merrick Bank, which negotiated a $3 million loan balance that was included in the assets EMS agreed to buy. Under the settlement ...

The Northwest ICE Processing Center (NWIPC) in Tacoma, Washington, owned by private prison giant The GEO Group, Inc., is the sole detention facility in the state of Washington for federal Immigration and Customs Enforcement (ICE). In 2023, state lawmakers targeted it with House Bill 1470, imposing numerous requirements on private detention facilities in the state. GEO Group sued in federal court for the Western District of Washington and moved to preliminarily enjoin enforcement of HB 1470, arguing that its provisions violate the Supremacy Clause and Contract Clause of the U.S. Constitution. In a series of March 2024 orders, the Court agreed and enjoined enforcement of most of the law.

The doctrine of intergovernmental immunity derives from the Supremacy Clause, freeing federal government activity from regulation by states. Private entities that deal with the federal government may also assert immunity under this doctrine, and they may sue to block discrimination when state law treats private entities worse than others are treated.

GEO Group asserted that HB 1470 violated this doctrine because, by its plain terms, it applied only to NWIPC, regulating it in ways that no other facility in the state is regulated. The Court agreed that although the statute defines ...

Miami-­based Armor Correctional Health had virtually no experience in providing medical care to prisoners when Dr. Jose Jesus Armas started the firm in 2004, but over the next few years it amassed millions of dollars in contracts with county jails through apparent political maneuvers and promises of huge financial savings, as PLN reported. [See: PLN, Aug. 2006, p.29.]

Those promises turned out too good to be true. Armor racked up more debts than it could repay, much of it from settlements and judgments for inadequate medical care. That has now led to liquidation proceedings in a Miami court, from which firm founder Dr. Jose Jesus Armas currently stands to benefit, as reported elsewhere in this issue. [See: PLN, Nov. 2024, p.51.]

Wisconsin’s Milwaukee County also got stuck with a tab that Armor owed for denying medication to a mentally ill detainee in the county jail. That $1.05 million was paid by the county on September 29, 2023, to Omar Wesley.

Diagnosed with paranoid schizophrenia at age 21, Wesley was arrested for attempted bank robbery but found not guilty by reason of his mental illness. After treatment with clozapine in a mental health facility, he was transferred to the county’s Criminal ...