How ‘Bankruptcy’ Lets Private Prison Contractors Evade Accountability

Private jail medical contractors have made a business out of avoiding consequences for civil rights violations. They offer local governments inexpensive, substandard medical care for their jails and then find creative ways to avoid litigation.

Wellpath, the country’s largest private medical contractor, provides healthcare to hundreds of facilities across dozens of states. The company generated more than $2 billion in revenue in 2023. It is also the latest firm to employ a concerning new tactic to evade accountability: In November, Wellpath filed for bankruptcy, halting more than a thousand cases—many by people who say they were harmed by the company’s medical abuse and neglect. Not only will this process delay or deny people from getting vital compensation—it could also leave local governments holding the bag for Wellpath’s inhumane treatment in these cases. 

Private correctional contractors deliver worse services than public providers and have documented patterns of refusing to diagnose and treat people to cut costs. Wellpath’s critics say the company maintains troubling practices, including refusing necessary care, medications, and hospitalization to people detained pretrial. People allege they have suffered devastating and avoidable consequences, including pregnancy loss, life-altering injuries, and death.

One reason Wellpath and its ilk have such harrowing track records: The legal system lets private companies dodge accountability in ways public entities cannot.

Filing for bankruptcy is an increasingly common tactic for multi-billion dollar companies to evade responsibility for civil rights violations. After a company files for bankruptcy, courts generally pause all active civil lawsuits against the organization until the proceedings end. From there, bankruptcy courts can potentially wipe out further debt judgments against the company. In recent years, major corporations, including Johnson & Johnson and Purdue Pharmaceuticals, have filed for bankruptcy amid allegations that they’d harmed people en masse.

Wellpath’s critics say the company also hides behind corporate law to avoid justice. Backed by the private equity company H.I.G. Capital, Wellpath has divided its business into various corporate entities (e.g., Wellpath LLC and Wellpath Management, Inc.), making it difficult to determine which company is responsible for alleged harms. 

Alleged victims and families face much more difficult, uncertain futures. Wellpath’s filing forces those harmed to proceed with their complaints in bankruptcy court, where they may get far less compensation—or none at all.

Meanwhile, this same bankruptcy process enables Wellpath to eliminate claims against it by discharging them as debt or severely limiting remedies for the people whose loved ones have died or have been otherwise harmed in their care.

Corizon was another private medical contractor that, like Wellpath, faced many civil rights lawsuits and other debts. In 2023, Corizon filed for bankruptcy. While that case is ongoing, Corizon has proposed creating a new company to continue engaging in the same business while paying less for its existing claims.

During an earnings call this month, the CEO of CoreCivic, another major private prison contractor, said President Trump’s latest election had ushered in “one of the most exciting periods” of his career. In his first days in office, Trump reversed a Biden Administration executive order directing the U.S. Department of Justice not to renew contracts with private prison providers. Trump’s aggressive deportation strategies will also increase reliance on private detention centers and local jails, both of which often employ Wellpath and other private actors like it.

Privatization has harmed civil rights, undermined accountability, and frustrated reforms. Private companies have wholly different incentives from the public agencies that would otherwise handle these functions—particularly the prioritization of profit over public safety. For-profit companies are also not always subject to open record and meeting laws. And private firms can use their relatively deep pockets to game legal proceedings in their favor.

Although privatization often stymies the democratic process, points of intervention exist—even under a hostile federal administration. Local laws usually require elected officials to publish “requests for proposals,” which let interested companies bid on the opportunity to provide carceral services. Concerned community members can intervene during the request-for-proposal and contract-approval stages.

Moreover, local governments can set minimum standards for jail operations and medical services. They can also prohibit their localities from contracting with companies with histories of neglect or misconduct. Constituents can and should contact their elected officials to express their concerns.

Bringing and winning civil rights cases is difficult enough, and the bankruptcy process further shows how easy it is for large companies to evade accountability. As such, there is only one way to prevent these injustices from occurring: Ending our reliance on private medical contractors altogether.

Devontae Torriente is a legal fellow at the National Police Accountability Project, where he litigates police, prison, and jail misconduct cases in federal courts across the United States. A graduate of the University of Pennsylvania Law School, he is based in Philadelphia.

ICYMI—From The Appeal

Arizona lawmakers re-filed a bill to limit the use of “felony murder”—a technique that lets prosecutors charge people with murder even if they haven’t killed anyone. In 2019, prosecutors charged three young people with murder after a Phoenix cop killed their friend, 19-year-old Jacob Harris.