California Court Issues Ruling against CEC Diversion Program, Calling It “Extortion”

CEC is “shocked and dismayed,” saying, “This is a sad day for Californians.”

In a lawsuit filed in 2015 against Corrective Education Company (CEC), Judge Harold Kahn of the Superior Court of California granted summary judgment against CEC’s restorative justice diversion program, calling it “unlawful because that program violates California’s extortion and false imprisonment laws.”

In his ruling filed August 14, Judge Kahn wrote, “No matter how well-intentioned, progressive, efficacious and/or thoughtfully designed or implemented, CEC’s diversion program has been, is now – and as long as it involves payment of money to CEC or the retailer – will always be extortion per California law.”

Several loss prevention executives testified as to the benefits to first-time offenders, law enforcement, and retailers of the programs run by CEC in their stores.

San Francisco City Attorney Dennis Herrera, who filed the lawsuit, used harsh language in a statement issued by his office: “We should all be concerned about privatizing our justice system, especially when a business like Corrective Education Company uses the threat of criminal prosecution to intimidate and extort people.”

A spokesperson for CEC, Laura Barnett of Spaeth Communications, provided the following response: “This is a sad day for Californians. For five years, Corrective Education Company has partnered with local law enforcement to provide a cost-effective diversion program that has produced excellent results by removing 10,000 people from the criminal justice system.

“Shoplifting is a gateway crime. Between 60-80 percent of those who go through the criminal justice system reoffend; however, our recidivism rate is less than 2 percent. Our program costs less than resolving a red light ticket in the City of San Francisco and prevents people from a lifelong scarlet letter that hinders them from getting a job, a mortgage or renting an apartment.

“We are shocked and dismayed at Tuesday’s ruling regarding our business operations in California. Currently, more than 130,000 people are behind bars [in the state], and thousands of cases clog the legal system daily. Given Tuesday’s decision, it is likely that police will be inundated with calls from retailers, as a result.

“California has typically been a progressive leader for restorative justice. We believe this ruling goes against the values of Californians. We are disheartened for our partners and even more importantly for those Californians who face a lifelong scarlet letter because of one bad choice. We stand resolute in our belief that everyone deserves a second chance.”

The case in question is People of the State of California v. Correction Education Company, San Francisco Superior Court case no. CGC-15-549094 filed Nov. 23, 2015.

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