The way I understand the interstate commerce laws on the books (and in the courts), there is no way California could preclude PZN from bringing in federal prisoners to fill up California City and other facilities. The tougher argument would be whether a state can prevent PZN from bringing in state prisoners from outside of California - this would be a tough fight PZN might lose. But with federal prisoners, a law prohibiting such would clearly impugn the commerce clause of the Constitution and be found unconstitutional. I would expect any union lead legal challenge to such (which would be very foolish) to be short-lived and highly unsuccessful. They would be wasting money to try such a tactic.
It not only would fail, it would be a hopeless waste of time and money by the unions, who frankly I am not sure would even have standing to bring such a suit. Probably the state would be the only entity to have standing. And, if their lawyers are worth a plug nickel, they would advise Davis it would be a total waste of time to try to do that. Where we stand today, down again in an up market, makes me ponder again why management does not shift to a "fill up all of our beds, add on at existing facilities, get an SI willing to buy in to some form of convertible with an exercise price of around $14 or $15, and BUY BACK GOBS OF STOCK DOWN HERE." I welcome anyone on this board, with their debt to capital ratio still well under 50%, to tell me a better use of capital than buying back stock with an indicated yield of well over 20% - I don't see any better use. The yield level right now is obscene and absurd, and although we will see some sort of dividend cut next year, the yield will still be too high. They should be using capital for add-ons at current facilities and buying back stock. They have got to get their stock back up to be able to issue more debt and equity capital in the future, and the only way to do that is through getting facilities close to 100% full, and buying back stock. Aggressive expansion is a bad idea right now, it's not in the cards, and their lack of aggressiveness in realizing this state of affairs and taking dynamic steps to fix it pronto is hard to fathom for me. Hopefully the cc will provide some insight and some positive news/developments/and-or steps. We will see.