Rathke v. Corrections Corp. of America
Alaska Supreme Court
153 P.3d 303 (2007)
Rathke (plaintiff), an Alaska inmate incarcerated in an Arizona prison run by Corrections Corporation of America (C.C.A.) (defendant) under a contract between C.C.A. and the State of Alaska, sued C.C.A. for violating inmate-discipline provisions that closely mirrored language from the Cleary Final Settlement Agreement (FSA) — a separate, enforceable agreement between Alaska and its inmates establishing legal duties owed to prisoners, including a presumption of innocence until proven guilty at a hearing. The Alaska superior court ruled that inmates like Rathke could not sue C.C.A. as third-party beneficiaries of its contract with the state, and Rathke appealed.
Whether a beneficiary may enforce a contract where recognition of a right to performance will effectuate the intention of the parties and the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance.