Appeal Weighed In Prison Furniture Lawsuit

June 13, 2002
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GRAND RAPIDS — A decision is expected this week on whether three office furniture manufacturers will appeal the dismissal of their lawsuit that accused a federal agency that produces a variety of goods using prison labor of illegally cutting into their markets.

Taking the case against Federal Prison Industries (FPI) to the U.S. Court of Appeals is the next option for Herman Miller Inc., Haworth Inc. and East Greenville, Pa.-based Knoll Inc., should the companies decide to pursue the litigation further.

“We’re disappointed and we’re examining our options,” said Washington, D.C., attorney Stephen Ryan, who represents Herman Miller, Haworth and Knoll.

The three firms, working through a coalition that sells to the federal government, sued FPI in late 1999, claiming the agency failed to go through a public-review process and conduct the proper market analyses required when it expanded production of office furniture between 1991 and 1996 beyond pre-set limits. Those limits are designed to prevent the government corporation from generating an undue burden on a particular industry in the private sector.

U.S. District Court Judge Robert Holmes Bell on Aug. 8 granted the government’s motion to dismiss the case, accepting government arguments that FPI neither improperly expanded office furniture production nor represented an undue burden on the industry.

Even if it did, the court must balance any burden against “providing productive work for the idle hands of the federal prison system,” Bell wrote in his ruling.

FPI is an arm of the U.S. Bureau of Prisons that teaches prisoners work skills they can use when released from custody. FPI employs more than 21,000 federal inmates to produce a myriad of products, including office furniture, that it markets under the Unicor brand name to federal agencies. FPI sold $546.3 million in goods in 2000, including $118.9 million in office furniture.

Bell also wrote that Congress granted FPI broad authority to carry out its mission. Siding with the plaintiffs in the case “would trespass across those lines of authority set up by the framers in the Constitution. Because of those boundaries, the federal courts simply cannot serve as a succor for every perceived injustice inflicted by the policy-making arm of the legislative branch of government.”

The judge’s dismissal of the case gives greater emphasis to efforts in Congress to reform FPI.

Both U.S. Rep. Pete Hoekstra, R-Holland, and U.S. Sen. Carl Levin, D-Michigan, have legislation pending in Congress to eliminate FPI’s mandatory-source status, a provision that requires federal agencies to buy from FPI, unless they’re granted a waiver.

The bills have strong support among office furniture makers who contend that mandatory-source status unfairly prevents them from bidding government contracts, as well as from a bipartisan coalition in Congress, labor unions and business advocates.

“We’ve been pursuing that and continue to pursue that with a lot of confidence and determination,” Herman Miller spokesman Mark Schurman said. “Obviously we’re disappointed by the judge’s decision and we disagree with it. We and our colleagues in the industry are studying our options going forward.”

Working legislatively in Congress is exactly where Bell believes the office furniture industry needs to seek resolution of the issue. Government’s role in competing with the private sector is best settled legislatively, he said.

“The floor of the U.S. Congress, not the court chambers, is the proper place to determine the balance between mutually exclusive public policies,” Bell wrote in his ruling. 

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