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Corrections Corporation of America Message Board

  • gseay22 gseay22 Nov 5, 1999 9:34 AM Flag

    Interstate Commerce

    Ladies and gentlemen:

    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.

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    • The FBOP is not the INS or US Marshal. The FBOPs would require PZN/CCA to establish the authority to lock up federal inmates in CA. See Cornel in PA as example. Thanks 4 thinking of me folks.

    • I believe you are correct. I believe that they could bring in federal prisoners, and the burden of filing suit would fall upon the state. Which you accurately surmise would fail.

      • 1 Reply to pascoe6
      • 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.

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