California not paying released inmates $200 could cost taxpayers $5 billion

(The Center Square) San Francisco’s former district attorney is leading a class action lawsuit requiring the state to follow through on a 1973 statute signed into law by then-governor Ronald Reagan to pay prisoners who have served more than six months $200 upon their release as “gate money.” Including interest, the case could cost taxpayers $5 billion.

With former SF DA Chesa Boudin, now Executive Director at UC Berkeley’s Criminal Law & Justice Center, estimating California releases approximately 30,000 prisoners each year, his case says the class action body “exceeds hundreds of thousands of individuals.” Boudin says the legislature’s statute was quite clear in providing $200 (worth almost $1,500 in current dollars when it first went into effect) to prisoners when they exit prison if they aren’t being transferred to federal prison or another state .

“CDCR’s practice of routinely withholding gate money and applying unlawful and unauthorized deductions violates the law and undermines the integrity of the justice system,” wrote Boudin and the two other lawyers representing in the plaintiffs. “CDCR, which is charged with incarcerating those who break the law, is itself breaking the law every day.”

Boudin says the California Department of Corrections and Rehabilitation objected to the law before it was signed and lobbied for it to have authority over how much gate money would be provided to released inmates, and that the passed law’s clear language establishes $200 shall be provided upon release in nearly all circumstances.

Boudin then continues to outline how the CDCR “promulgated a regulation that directs its employees to deduct the cost of release apparel and transportation from people’s release money, which results in people receiving far less than the $200 required by law.”

The two plaintiffs representing the class are Colin Scholl, who spent 14 years at a CDCR prison and was provided $70 upon release after $130 deducted in clothing and transportation, and John Vaeseau, who spent 33 years at a CDCR prison before being transferred to a San Francisco jail and not receiving any gate money — which the case claims violates the gate money law given that Vaeseau was not being transferred to another state, or to federal prison, as “CDCR’s own policy guidelines acknowledge that people released from prison are entitled to gate money even when they are transferred into the custody of local law enforcement.

For relief, the suit is demanding re-evaluation of the payments made with unlawful deductions and payment of the deducted amounts to released prisoners, ending of the deductions, a judgment that CDCR violated state law, award pre-judgment interest and post-judgement interest on sums withheld from plaintiffs, awarding of attorneys’ fees and costs of the lawsuit, and “such other and further relief as the Court deems just and proper.”

In California, the default judgment interest rate is set by statute at 10%. This means an individual who did not receive his or her $200 gate money in 1973, perhaps due to, like Vaeseau, being transferred to another facility in the state but not within the state prison system, would receive need to be paid $25,625.99 in pre-judgement awards and interest.

Assuming there have been 30,000 prisoners released per year in the 51 years from 1973 to 2024, that the typical inmate has received only $100 of the $200 owed, that 3,000 of those inmates each year do not receive any money at all due to the non-payment of many transferred prisoners, at a 10% annual compounding interest rate, the prejudgment interest and payments would be nearly $5 billion; at $3,300,000 of new debt to prisoners per year, and 10% interest on the debt, the state could owe $4.65 billion. Given typical attorneys fees of 25-40% on class action settlements, and Boudin’s partnership in this case with Edleson, a leading for-profit class-action law firm, the joint legal team could take home over $1 billion on a $4.65 billion settlement.