June 6 (Bloomberg) -- Corizon Health Inc.’s five-year, $230 million contract to provide services for inmates in Florida prisons was found valid by a state appeals court that said a judge shouldn’t have blocked the deal last year.
The First District Court of Appeal in Tallahassee ruled yesterday that the state validly entered into the contract with Corizon and that the 14-member Legislative Budget Commission didn’t err when it approved an amendment to move funds within the corrections department’s budget to help fund the contract.
The ruling overturns a December decision by a lower court in Tallahassee that blocked the contract from being implemented. State Circuit Judge John Cooper had ruled the lawmakers’ budget commission broke the law when it approved a transfer of $57.6 million to help fund the contract with Brentwood, Tennessee-based Corizon.
“The LBC simply moved funds from different line items within the Department’s Health Services’s program, providing additional funds for contracts that the Department otherwise had the authority to enter,” the appeals court said in its 21-page ruling.
The move to privatize prison health care has been a priority for Florida Governor Rick Scott, the former chief executive officer of Columbia/HCA Healthcare Corp. who promised while campaigning for office to cut prisoner costs by $1 billion. The Republican governor’s privatization efforts have been met with a series of legal challenges.
The lawsuit targeting the Corizon contract was brought by AFSCME Florida and the Federation of Physicians and Dentists/Alliance of Healthcare and Professional Employees.
Alma Gonzalez, a lawyer for AFSCME, called the appeals court ruling a “disappointment” in a phone interview. She said no decision has been made whether to seek further court review.
Ann Howard, a spokeswoman for the Florida Department of Corrections, said the state is pleased with today’s ruling.
“It will help save taxpayer money as we move forward,” she said in an e-mail.
Brian Fulton, a spokesman for Corizon, had no immediate comment on the ruling.
The Florida Legislature in 2011 authorized prison health-care privatization in its annual general appropriations act. A lawsuit against that action was declared moot in July by a state court judge, who said the privatization authority expired at the end of the fiscal year, June 30, 2012.
The Legislature this year again authorized prison health-care privatization.
The case is Crews v. Florida Public Employers Council 79, 1D12-5808, Florida First District Court of Appeal, Tallahassee.
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