The state of Connecticut and three people formerly imprisoned have agreed to dismiss a proposed class action challenging a 1997 law that allowed the state to bill people in prison nearly $118,000 per year for their incarceration, a figure said to result in the highest pay-to-stay bills nationwide.

The Oct. 6 stipulation followed a September dismissal motion filed by the state. According to that motion, the state decided to stop recovering money from estates earmarked for the three people who sued, rendering their lawsuit moot.

"The resolution of this case marks a significant win for our clients and for current and future inmates in Connecticut," Hurwitz Sagarin Slossberg & Knuff LLC, which represents Teresa Beatty, Natasha Tosado and Douglas Johnson alongside the American Civil Liberties Union of Connecticut, said in a statement. "The plaintiffs' inheritances are now secure, and the broader class of formerly incarcerated individuals has gained important protections through statutory amendments."

The three plaintiffs sued in March 2022, seeking to represent a class of all people who are incarcerated and affected by the pay to stay law. But a ruling required an individualized assessment of each incarcerated person's case, making class certification virtually impossible, said David A. Slossberg of Hurwitz Sagarin.

The operative pleading, a third amended complaint filed July 9, asked the court to declare the pay-to-stay statute unconstitutional under the Eighth Amendment's ban on excessive fines. It also sought to void the debts of the three plaintiffs.

It alleged that the state's reimbursement formulas skyrocketed from $59,925 per year in 2015 to $117,895 per year in 2021, the most recent figure available.

"Connecticut's prison debt rates are the highest in the country by far," the complaint said. "Meanwhile, some states have abolished prison debt entirely, and others collect rarely, if ever. Even those that do collect, do so for negligible amounts. New York, for example, charges $1 per week, and only if a person is working and paying will not cause hardship."

Slossberg said the litigation shifted significantly when the Connecticut General Assembly in 2022 amended the pay-to-stay law by exempting the first $50,000 of an incarcerated person's assets and deciding civil judgments favoring formerly imprisoned people could not be touched.

Dan Barrett, the ACLU's Connecticut legal director, said the new statute also protects individuals whose convictions have been erased by pardon or by the operation of a subsequent statute, such as laws that wipe away minor marijuana convictions.

Barrett said officials notified Beatty, Tosado and Johnson that they believed the state could no longer target inheritances under the amended statute.

"We just hope that the defendants' reading of the statute is one they will apply to everyone from whom they are demanding payment of prison debts because it seems their reading of the statute is very, very generous," Barrett told Law360, echoing language in a recent response to the state's dismissal bid.

U.S. District Judge Jeffrey A. Meyer in March 2023 dismissed an earlier version of the complaint, cautioning the plaintiffs to "carefully consider" whether a resurrected complaint might trigger a showdown over whether the Connecticut General Assembly's 2022 adjustments, which Judge Meyer called a "legislative victory" for the plaintiffs, resulted in a law that contradicted itself.

At issue then was whether the state believed it could chase inheritances despite the amendments.

"I trust ... that if the law has been narrowed as the attorney general claims, then the attorney general — in his capacity as a legal counselor to state agencies and officials ... will make clear that previously filed liens and other claim enforcement efforts should be withdrawn against those prisoners who are no longer within the scope of the statute," Judge Meyer told the state.

Left open is whether the state will heed that warning or apply the logic that scuttled Beatty, Tosado and Johnson's claims to others, their attorneys indicated.

"We forced the Legislature to amend the statute," Slossberg said. "We did the very best we could. As far as I'm concerned, this is called progress. We'll have made an impact on the lives of thousands of former inmates."

A spokesperson for the attorney general's office did not respond to a request for comment.

Beatty, Tosado and Johnson are represented by Dan Barrett and Elana Bildner of the ACLU of Connecticut and David A. Slossberg and Erica O. Nolan of Hurwitz Sagarin Slossberg & Knuff LLC.

The state is represented by Robert J. Deichert, Krislyn Launer and Benjamin Abrams.

The case is Beatty et al. v. Lamont et al., case number 3:22-cv-00380, in the U.S. District Court for the District of Connecticut.

--Editing by Leah Bennett.

Correction: A previous version of this story included incorrect counsel information and misstated the nature of the dismissal. The errors have been corrected.