The Supreme Court of Alaska held that state prisoners incarcerated at a private prison in Arizona can enforce portions of the contract between the Alaska Department of Corrections (DOC) and Corrections Corporation of America (CCA) that incorporate provisions of Smith v. Cleary, 24 P.3d 1245 (Alaska 2001) [PLN, June 2003, p.26], the seminal case that set forth the duty that Alaska owes to its prisoners.

Gus Rathke, an Alaskan prisoner, was incarcerated at a private prison in Florence, Arizona run by CCA pursuant to the CCA/DOC contract when he received a disciplinary infraction after failing a drug test. He was given 30 days in isolation, prevented from having a paying job for 90 days, and removed from CCA’s substance abuse program. He consistently denied using drugs and requested retesting.

After Rathke was released from punitive segregation he filed a grievance over the drug test. His urine sample had tested positive for THC metabolites using a 20 nanograms per milliliter (ng/ml) cutoff point, the Arizona standard. The standard for Alaskan prisoners, as set forth in Cleary and the CCA/DOC contract, is 50 ng/ml. Rathke’s urine sample was retested at 50 ng/ml and he passed. The grievance officer recommended that the disciplinary infraction be removed from Rathke’s file and destroyed.

Rathke then filed a pro se complaint in Anchorage Superior Court against CCA, its employees and the testing company, alleging breach of contract and violations of his state constitutional rights. Without considering the constitutional claims, the trial court granted CCA’s motion to dismiss and the testing company’s summary judgment motion on the grounds that Rathke was not a third-party beneficiary of their contracts. Rathke appealed.

The Supreme Court of Alaska held that state prisoners in CCA facilities have a right to bring claims under the Alaskan constitution against CCA and named CCA employees.
This includes a right to rehabilitation, which may not be denied without due process.
Alaska owes legal duties to all of its prisoners, including those incarcerated in out-of-state private prisons. Such duties are detailed in the final settlement agreement (FSA) in Cleary, which was incorporated by reference into the CCA/DOC contract.

Many of the Cleary provisions are reiterated in the contract, and the Court found that prisoners are intended third-party beneficiaries of those portions of the CCA/DOC contract taken directly from the FSA. Therefore, Rathke could enforce the contract in state court. The Supreme Court specifically disagreed with the opposite conclusion that was reached in Miller v. CCA, 375 F.Supp.2d 899 (D.Alaska 2005).

However, the Court held that Rathke could not hold individual CCA employees liable for breach of contract; also, the drug testing company’s separate contract with CCA was not enforceable by Rathke because he was not an intended third-party beneficiary of that contract.

The Supreme Court thus reversed the dismissal of Rathke’s constitutional claims against CCA and its employees, reversed the dismissal of his contractual claims against CCA, affirmed the rest of the trial court’s judgment, and returning the case to the lower court for further proceedings. See: Rathke v. CCA, 153 P.3d 303 (Alaska 2007).

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