Bilke v. State
| Decision Date | 29 May 1997 |
| Docket Number | CA-CV,No. 1,1 |
| Citation | 189 Ariz. 133,938 P.2d 1134 |
| Parties | , 4 Wage & Hour Cas.2d (BNA) 22, 244 Ariz. Adv. Rep. 15 Mitchell Paul BILKE; Charles Roberts; Kenneth Ashelman; Felton Hale; Richard S. Berry; Mervin L. Davis; and Damon D. Fisher, individually and as members of a class, Plaintiffs-Appellants, v. STATE of Arizona; ARCOR Enterprises, a subdivision of the state; Arizona Correctional Industries, a subdivision of the state; James Ricketts, former director of the Arizona Department of Corrections (DOC); Samuel Lewis, director of the DOC; Marilyn Wilkins, director of the Arizona Correctional Industries; Thomas Lescault, director of ARCOR; Tony West, David Tierney, Earl Cobb, Thomas Donnelly, Henry Evans, Marcus Englemen, Delbert Householder, and Ray Shaffer, members of the board of directors, ARCOR Enterprises, Defendants-Appellees. Larry Lynn HAMON, a single man, Plaintiff-Appellant, v. STATE of Arizona; Arizona Department of Corrections, a department of the State of Arizona; Samuel Lewis and Jane Doe Lewis, his wife; Marilyn Wilkens and John Doe Wilkens, her husband; Daniel Wilkins and Jane Doe Wilkins, his wife; ARCOR Enterprises, a division of the State of Arizona; Arizona Correctional Industries, a division of the State of Arizona, Defendants-Appellees. John COYLE; Jeffrey L. Wadsworth; and Saul Gonzales, Plaintiffs-Appellants, v. STATE of Arizona, Defendant-Appellee. 96-0326. |
| Court | Arizona Court of Appeals |
This case originates in a suit filed by current and former inmates against the State of Arizona, the Department of Corrections, ARCOR Enterprises, Arizona Correctional Industries, and various individuals named in their official capacities. We will refer to the defendants collectively as "the Department." The inmates claim that they should have been paid the minimum wage for work they did as part of the Department's industries program. We disagree, and we affirm the summary judgment entered against the inmates.
In 1969, the legislature created "ARCOR," Arizona Correctional Enterprises, and the correctional industries program. 1969 Ariz. Sess. Laws Ch. 81, § 12, codified at Ariz.Rev.Stat. Ann. ("A.R.S.") §§ 41-1621 to 41-1630. The program was designed to provide opportunities to use prisoners' labor in the production of products to be used by the state or to be sold to the public. See A.R.S. § 41-1622. ARCOR later became "ACI," Arizona Correctional Industries. 1987 Ariz. Sess. Laws Ch. 358, § 2.
A number of inmate plaintiffs brought this suit. Summary judgment was entered using representative facts pertaining to three of them. Larry Lynn Hamon was employed in the correctional industries program from August 1985 to December 1986 as a skilled sheet metal worker. His job included supervising inmate employees assigned to the sheet metal shop, organizing and assigning work orders to inmate employees, setting up and adjusting product lines, designing product patterns and layouts, and the fabrication of these products. His initial pay was forty cents an hour, and over time he was given raises to eighty-five or ninety cents an hour. Many of the products Hamon produced were fabricated for private contractors, and went to companies in Tucson, the State of Washington, and New York. Some went to governments of other states and to county governments in California. Raw materials used to produce the products in the sheet metal shop were regularly purchased from out-of-state suppliers.
Richard S. Berry worked for a company called C/A Buckles. C/A Buckles was an IOBE--"Inmate Operated Business Enterprise"--established under ARCOR. IOBE has been described thus:
As the name suggests, selected inmates in the IOBE program organize and operate their own businesses under ARCOR's supervision. Workers are selected by the inmate-owner and then apply to the Department of Corrections ("DOC") for the right to work. The profits from the businesses belong to the inmate owners, and the businesses can be sold. The businesses market their goods to the private sector. The DOC monitors the businesses and exacts a portion of the profits along with a monthly rent. Inmate wages are paid to the DOC, which in turn pays the inmates by depositing the funds into their commissary accounts. Inmates are paid 50 cents an hour for their work.
Hale v. Arizona, 967 F.2d 1356, 1360 (9th Cir.1992), vacated, 993 F.2d 1387 (9th Cir.) (en banc), cert. denied, 510 U.S. 946, 114 S.Ct. 386, 126 L.Ed.2d 335 (1993).
C/A Buckles manufactured and sold custom belt buckles. While Berry worked for C/A Buckles, it had three telephone lines to the outside world. Berry worked principally in retailing and office administration. He took customer orders and shipped products, received supplies and managed the office. He was paid fifty dollars per month, working approximately forty hours a week. The business regularly purchased tools, office and production supplies from gem companies, handicraft manufacturers, metal plants and other suppliers, in and out of state. C/A Buckles had customers in Arizona, California, Kansas, Nevada, and England. It also sold buckles to other retailers, both within and without the state. All goods and supplies C/A Buckles sold and bought were shipped via U.S. Mail or United Parcel Service. Berry's job regularly entailed handling these shipments.
Kenneth Ashelman worked for a private business, Cutter Biological, a division of Script Miles Laboratories. Cutter operated a blood plasma center on prison grounds. Ashelman initially performed menial tasks for twelve dollars per week. He was eventually promoted to centrifuge operator, and was paid twenty dollars per week for forty hours of work.
In 1985, the inmates sued the state and various correctional industries officials in federal court, seeking the federal minimum wage for work they performed, based on federal and state law. The federal court ruled against them on their claim under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. §§ 201 to 219. See Hale v. Arizona, 993 F.2d 1387 (9th Cir.) (en banc), cert. denied, 510 U.S. 946, 114 S.Ct. 386, 126 L.Ed.2d 335 (1993); Gilbreath v. Cutter Biological, Inc., 931 F.2d 1320 (9th Cir.1991).
The inmates also filed these actions in state court seeking redress under state law. The parties filed cross-motions for summary judgment. The trial court ruled that Ashelman was entitled to the minimum wage, but declined to award him treble damages. It ruled against all claims represented by Berry and Hamon. The inmates appealed, and the state cross-appealed the court's ruling as to Ashelman. The state subsequently dismissed its cross-appeal so we need not discuss further the issue raised by the facts of his employment.
The Plaintiffs base their claims on A.R.S. sections 31-254 and 41-1623(E) (now repealed). We address them in order. At the time the complaint was filed, A.R.S. section 31-254 provided:
A. Each prisoner who is engaged in productive work in any state prison or institution under the jurisdiction of the department of corrections as a part of the prison industries program shall receive for his work such compensation as the director of the department of corrections shall determine. Such compensation shall be in accordance with a graduated schedule based on quantity and quality of work performed and skill required for its performance, but in no event shall such compensation exceed fifty cents per hour unless the prisoner is employed in an ARCOR enterprise pursuant to title 41, chapter 11, article 3. If the director enters into a contract pursuant to § 41-1624.01 with a private person, firm, corporation or association the compensation shall be as prescribed by the person, firm, corporation or association but shall not be below the minimum wage. Compensation shall not be paid to prisoners for attendance at educational training or treatment programs, but compensation may be paid for work training programs.
A.R.S. § 31-254, amended by 1985 Ariz. Sess. Laws Ch. 265, § 1 (footnote omitted) (emphasis added).
Berry and Hamon argue that they worked for ARCOR pursuant to private contracts and are therefore covered by this section. Their theory is that the prison sheet-metal program and C/A Buckles both sold some of their products to, and purchased supplies from, private entities. They reason that without the customer contracting and paying for the product, they would have had no jobs.
Under the clear language of A.R.S. section 31-254(A), the minimum wage requirement applies only when there is a contract between the director of the Department "pursuant to § 41-1624.01 with a private person, firm, corporation or association." Section 41-1624.01(B) allows the director to contract with "any private person, firm, corporation or association to provide services or labor rendered by prisoners." The minimum wage requirement of section 31-254(A) is clearly tied to that limited situation. It does not provide for the minimum wage just because a prisoner's work is a component of a product that is sold to a private person or entity.
Hamon worked for the Department, not for a private business. Berry worked for a fellow prisoner; the DOC did not provide his labor to a private person. The inmates are simply wrong in asserting that they are entitled to the minimum wage merely because the entities they worked for had contracts with private parties.
Berry makes another somewhat confusing argument in which he alludes to, without actually invoking, the Ashurst-Sumners Act, 18 U.S.C. §...
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