SFALP Case Secures Court Victory Against Unlawful Diversion Program

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<p>San Francisco City Hall, Photographed by Mike Hofmann.</p>

After nearly two years, the San Francisco Affirmative Litigation Project (SFALP) recently won an important victory in court against the Corrective Education Company (CEC) over its diversion program to suspected shoplifters.

As part of its “corrective education” scheme, CEC shows accused shoplifters a video in an isolated room that offers them the option of either criminal prosecution or admitting their guilt and agreeing to pay CEC up to $500 for a six-hour “cognitive restructuring” and “behavior modification” course. Faced with this choice, approximately 90 percent of the 20,000 people CEC and its partners have accused of shoplifting have chosen to enroll in CEC’s program, according to the lawsuit. After obtaining the signed confessions, the city found that CEC follows up with phone calls and letters to again threaten the accused shoplifters with criminal prosecution unless they pay CEC. 

“We felt strongly that no one should use misleading threats of criminal prosecution to make a profit—especially when the victims are among the most vulnerable in our society,” said SFALP student Ryan Yeh ’18.

CEC, which operates in more than 25 states across the country, calls its program “restorative justice.” The San Francisco City Attorney’s Office, however, asserted CEC’s practices amount to extortion and false imprisonment. San Francisco Superior Court Judge Harold Kahn agreed with that assessment.

“This is textbook extortion under California law, and has been so declared for at least 125 years,” Judge Kahn wrote in his August 14, 2017 order granting summary adjudication against CEC on these two central issues in the case.

SFALP students have worked directly with the City’s attorneys litigating this case.

“We felt strongly that no one should use misleading threats of criminal prosecution to make a profit—especially when the victims are among the most vulnerable in our society,” said SFALP student Ryan Yeh ’18.

“SFALP students have been involved at every stage of this case, and in particular, played a vital role in researching and developing the legal theories on which the court granted summary judgment,” said Deputy City Attorney Jeremy Goldman. “That outcome shows the real contribution SFALP students make to the City Attorney's mission to protect the public from unlawful business practices.”

For SFALP students, contributing to this case has been both personally and professionally meaningful.

“I became particularly invested in this case after reading phone call transcripts in which victims pleaded to have their fees reduced. $500 may not seem like much to some, but it was an enormous sum to many of CEC's victims,” said Yeh. “I was inspired by the attorneys at the San Francisco City Attorney's Office, who fought hard throughout this case. They are amazing role models for public lawyering, constantly motivating me to be more rigorous in my research and writing.”

The San Francisco Affirmative Litigation Project (SFALP) is a partnership between Yale Law School and the San Francisco City Attorney’s Office. The clinic is led by Yale Law School Dean and Sol & Lillian Goldman Professor of Law Heather Gerken. SFALP students work with San Francisco Deputy City Attorneys to conceive, develop, and litigate some of the most innovative public-interest lawsuits in the country—lawsuits that tackle problems with local dimensions but national effects.