An Arkansas Supreme Court reversed and remanded a circuit court’s order granting reimbursement to the state the costs associated with Dexter Harmon’s incarceration. The court ruled that reimbursement from a §1983 settlement was improper because the circuit court failed to make findings as required by procedure or statute.

The facts show that Harmon, an Arkansas Department of Corrections (ADC) prisoner, was a member of a §1983 class-action suit against the city of Helena. In January 2016, he was awarded $7,200 in the settlement of the suit. He requested that the ADC send his funds directly to his legal representatives instead of depositing them into his prison trust fund. Over objection, the ADC deposited the settlement funds into his prison account and refused to allow withdrawal to pay legal fees or to meet financial obligations for his elderly father.

The State then filed a petition requesting permission to deposit Harmon’s settlement funds with the court for reimbursement of costs associated with his incarceration. Harmon moved to dismiss the petition. The petition was granted, so he moved to set aside the order. On June 28, 2016, a hearing was held. Harmon argued that the confiscation of the funds occurred in violation of equal protection, access to the courts, and due process rights. More specifically, he argued that he had a right to pay his legal fees and meet his financial obligations, and the court had a duty to conduct a “pre-deprivation” hearing before ordering reimbursement. He claimed that allowing the same agency, successfully sued in a 1983 lawsuit, to take the money awarded as compensatory damage defeated the purpose of the lawsuit.

Without addressing any of Harmon’s arguments, the circuit court ruled that the state was entitled to the reimbursement because the amount awarded in the settlement was less than the cost of care associated with his incarceration. On appeal, Harmon again asserted that he had a right to a “pre-deprivation” hearing before his settlement check was deposited into his prison account; he had a right to pay legal fees so that the confiscation resulted in unjust enrichment for the defendants. The court also failed to consider his financial obligations. He also argued that the State was preempted from confiscating monies awarded as compensatory damages in a §1983 settlement.

The Supreme Court found that procedures and statutes of the Arkansas Reimbursement Act did require a “pre-deprivation” hearing prior to exercising reimbursement. The court had an obligation to consider legal fees, financial obligations, and restitutions owed. Those expenses must be extracted, and the remainder deposited in the prisoners’ account. When Harmon presented evidence of legal fees and financial obligations, the circuit court had a duty to make a finding of amounts owed.

Since the court failed to make the required findings, the Supreme Court was obliged to reverse and remand for a written order on these claims. See: Harmon v. State, Supreme Court of Arkansas. 2017 Ark. 224, CV-16-898.              

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