Perotti v. Corrections Corp. of America

WINFREE, Justice,

with whom STOWERS, Justice, joins, concurring.

I agree with today's decision. I write separately to express my hope that we now have completed the third-party-beneficiary detour and are back on the road contemplated by the Cleary Settlement.1

As today's decision discusses, the 1990 Cleary Settlement detailed the prison-condition rights of current and future prisoners held in correctional facilities owned or operated by the State of Alaska, Department of Corrections (DOC). The settlement also provided that in the event of prisoner overcrowding, DOC was to report to the superi- or court and present a plan to reduce the prison population. After being held in contempt for exceeding the allowable prison population, DOC sought to transfer prisoners to a private correctional facility in Arizona.2 The superior court ultimately conditioned approval of the prisoner transfer on "the state's continued compliance with [the Cleary Settlement] in the Arizona prison.3 This court affirmed the superior court's order as within its broad discretion under the Cleary Settlement,4 emphasizing that although the settlement provisions were a binding final judgment on DOC, material changes in cireumstances could lead to vacation or modification and that future implementation and enforcement would be based on the Cleary Settlement's intent in light of then-existing conditions.5

In obvious response to the condition imposed by the superior court, DOC's contract *412with the Arizona prison facility included a number of prison-condition provisions mirroring the Cleary Settlement.6 An Alaska inmate in the Arizona facility then sued the facility on a breach of contract theory, asserting third-party-beneficiary status under DOC's contract with the Arizona facility.7 The superior court dismissed the claim, concluding that the prisoner had rights under the Cleary Settlement but was not a third-party-beneficiary of DOC's contract with the facility.8 This court reversed, concluding that Alaska prisoners in the Arizona facility were third-party-beneficiaries of the DOC contract terms incorporating the prison-condition provisions in the Cleary Settlement.9 The court believed this conclusion was required to ensure "redress against the very institution charged with their day-to-day care and discipline,"10 and held that the prisoner had the right to sue the Arizona facility for violations of the Cleary Settlement provisions in the contract.11

It seems unlikely that DOC inserted the Cleary provisions in the contract with the private prison to benefit inmates-it is far more likely that DOC inserted those provisions to protect itself from liability for violations of the Cleary settlement.12 It also seems unlikely that this court intended prisoners in the Arizona facility to have more enforcement rights under the Cleary Settlement than prisoners in DOC's facilities, and the court did not discuss how it envisioned third-party-beneficiary enforcement or the remedies that might be available. But after today's decision it should be clear that the enforcement mechanism for prison conditions mandated by the Cleary Settlement is the settlement agreement itself, and that regardless of prisoner location, prisoners' enforcement rights should be against DOC, not a direct action against a particular facility or its staff.

DOC owes all Alaska prisoners legal duties under the Cleary Settlement, and facility compliance with the Cleary Settlement is DOC's responsibility.13 If a DOC facility or a private contracting facility outside of Alaska is not in compliance with the Cleary Settlement's prison-condition provisions, then, as today's decision recognizes, DOC should be subject to contempt sanctions or injunctive relief under the Cleary Settlement, in the Cleary case before the superior court.14 In my view Rathke's holding regarding third-party-beneficiary status is infirm at best, but now has little import in light of today's decision.15 The result is the same-Perotti has no claim for damages against the Arizona facility or its employees for alleged violations of the prison-condition provisions of the *413Cleary Settlement. Although today's decision did not need to reach the question of injunctive relief against the Arizona facility, a similar result seems logical.

. Cleary v. Smith, No. 3AN-81-05274, Final Settlement Agreement and Order (Alaska Super., Sept. 21, 1990).

. Smith v. Cleary, 24 P.3d 1245, 1247 (Alaska 2001).

. Id. at 1250.

. Id. at 1249-51.

. Id. at 1249, 1251. It nonetheless appears DOC has unilaterally modified at least one aspect of the Cleary Settlement without seeking court approval-DOC no longer honors the Cleary Settlement provision requiring payment of gate money to released prisoners. See Cleary v. Smith, No. 3AN-81-05274, Final Settlement Agreement and Order § VLJ (Alaska Super., Sept. 21, 1990); cf. Hertz v. State, Dep't of Corr., 230 P.3d 663, 664-65, 668 (Alaska 2010) (holding DOC's decision to stop issuing gate money as required by Cleary Settlement was not proper subject of action for prospective injunctive relief by individual prisoner in light of Alaska Prison Litigation Reform Act (AS 09.19.200)). The efficacy of DOC's unilateral modification of the Cleary Settlement has not come before us.

. See Rathke v. Corr. Corp. of Am., Inc., 153 P.3d 303, 309-11 (Alaska 2007).

. Id. at 307, 309-11.

. Id. at 307, 311.

. Id. at 311.

. Id.

. Id.

. See, e.g., Ennen v. Integon Indem. Corp., 268 P.3d 277, 284 (Alaska 2012) (addressing third-party beneficiary status in insurance contract context and explaining that "[the insured did not purchase the policy with the intention to benefit the tort victim; rather, the insured purchased the policy to protect the insured from tort liability. Thus, the tort victim is only an incidental beneficiary").

. Rathke, 153 P.3d at 311 ("The state owes legal duties to all Alaska inmates, including those housed like Rathke at the CCA's Florence, Arizona, facility. These duties are detailed in the Cleary [Settlement]... ."}.

. I do not foreclose the possibility of a separate direct cause of action against DOC for breach of specific terms of the Cleary Settlement providing for payments to be made to prisoners. See, e.g., Cleary v. Smith, No. 3AN-81-05274, Final Settlement Agreement and Order § VLJ (Alaska Super., Sept. 21, 1990) (providing for payment of gate money to released prisoners); cf. Hertz, 230 P.3d at 668 (holding inmate not entitled to prospective injunctive relief regarding gate money).

. I do not foreclose the remote possibility that DOC would enter into a contract with a prison facility outside of Alaska that requires the facility to fulfill the Cleary Settlement mandate for payment of gate money, in which case prisoners likely would be third-party-beneficiaries of that contract provision. Such a provision is not in the prison contract in this case, and, in light of DOC's decision to not honor the Cleary Settlement provision for payment of gate money, it seems unlikely that such a provision would find its way into a subsequent contract.