NJ Can't Ban Private Prisons From Profiting Off ICE Contracts, Federal Court Rules

An appeals court has struck down part of a state law that bans prisons from profiting off federal immigration detention contracts in New Jersey.

On Tuesday, the Third Circuit Court of Appeals invalidated a key clause in New Jersey’s law, which was passed in 2021. Under the law, all prisons in the state – public or private – are banned from making new contracts with ICE to hold federal detainees. Prisons also can’t expand or renew old agreements.

According to the ACLU of New Jersey, this week’s ruling only impacts the law’s prohibition on private detention contracts.

Third Circuit judges argued that the civil detention of immigrants is a “core function” of the United States government.

President Donald Trump has claimed that a nationwide crackdown is needed to push back against a “large-scale invasion” of illegal immigration. On the first day of his second term, the White House announced a sweeping wave of presidential actions and executive orders.

“Over the last four years, the United States has endured a large-scale invasion at an unprecedented level,” Trump said. “Millions of illegal aliens from nations and regions all around the world successfully entered the United States where they are now residing.”

“This cannot stand,” the president added.

New Jersey’s law has seen pushback since Gov. Phil Murphy signed it in 2021. Two of the world’s largest private prison companies, the GEO Group and CoreCivic, have challenged the state ban in court. The administration of former president Joe Biden took the side of private prison companies in that case, arguing that ICE needed detention centers near airports to expedite operations. A judge ruled in 2023 that CoreCivic could keep its jail in Elizabeth open.

Federal authorities are now seeking to add more detention space in New Jersey, despite the state’s ban.

The recent opening of a controversial, new immigrant detention facility in Newark under the administration of President Trump – which is run by the GEO Group – has thrown more gas on the fire.

• See Related: ICE Detention Center In NJ Is First To Open Under Trump's New Term

‘A WIN FOR THE CORPORATE OVERLORDS’

New Jersey Attorney General Matthew Platkin said he was disappointed with this week’s ruling.

“As the dissenting judge noted, states retain broad latitude to protect the health and safety of people within their borders – particularly where, as here, there is no conflict with federal legislation,” Platkin said.

“We will continue to do all we can to defend these important goals and are evaluating our next steps in this case,” the attorney general added.

Advocates also blasted Tuesday’s ruling, arguing that it guts New Jersey’s law, which was introduced and approved by the state’s Legislature.

The New Jersey Alliance for Immigrant Justice – a coalition of several pro-immigrant groups – was among those criticizing the court’s decision.

“Cloaked in constitutional formalism, the ruling overrides the will of New Jersey residents and their elected representatives to regulate an industry that has been notorious for abuse, neglect and wrongful deaths,” the coalition said.

The group noted that the decision comes just weeks after Congress passed the “One Big Beautiful Bill,” signed into law by President Trump on July 4.

“The bill allocates roughly $170.7 billion in immigration enforcement, detention, and deportation, making the Immigrations and Customs Enforcement (ICE) agency the largest federal enforcement agency in our nation’s history,” advocates said.

“Today’s ruling will be a boon for private prison corporations like CoreCivic – which brought the initial challenge to AB5207 – as well as corporations like the GEO Group, which operates Delaney Hall in Newark,” advocates charged.

The GEO Group, which is valued at $4 billion, and CoreCivic, which is valued at $2.2 billion, are part of a massive industry that is expected to grow significantly while Trump is in office, Open Secrets previously reported.

According to Open Secrets, the GEO Group spent $1.38 million lobbying the federal government in 2024, and CoreCivic spent $1.77 million. Much of their focus was the appropriations bill funding the Department of Homeland Security, which includes the budget for ICE.

The day after Trump was reelected to his second term, the companies’ stock prices soared: GEO Group’s by about 41 percent and CoreCivic’s by nearly 29 percent.

• See Related: 2 Companies With NJ Ties May Score Big Profits From Trump Deportations

New Jersey Alliance for Immigrant Justice executive director Amy Torres said this week’s ruling sets a disturbing national precedent.

“This is a win for the corporate overlords who have already made a mockery of the federal government,” Torres said. “Now the Third Circuit has given them the greenlight to go after every statehouse in the country to challenge their democratic authority.”

Nedia Morsy, director of Make the Road New Jersey, alleged that large private prison corporations like CoreCivic and GeoGroup will now be allowed to “operate with impunity – with little transparency or accountability.”

“We will continue to organize, fight, and demand the end of New Jersey’s entanglement with private detention once and for all,” Morsy said.

Other groups that criticized the ruling included First Friends of New Jersey and New York, the American Friends Service Committee (NJIRP), the Ironbound Community Corporation, Movimiento Cosecha, CAIR-NJ, New Jersey Policy Perspective, PACC-NJ, and the Pennsylvania Immigration Coalition.

• See Related: Here’s How ICE Detainees Escaped Prison In New Jersey, Feds Say
• See Related: Prisons, Profits, Protests: Controversy Rages Over New ICE Detention Center
• See Related: Accused NJ Congresswoman Enters Plea After Clash Outside ICE Prison

'A LIMITED BUT IMPORTANT ROLE'

A spokesperson with CoreCivic provided Patch with the following statement when asked to comment on Tuesday’s court ruling:

“For more than 40 years, CoreCivic has played a limited but important role in America’s immigration system, which we have done for every administration – Democrat and Republican, including more than 25 years at Elizabeth Detention Center. We appreciate that we've had the opportunity to present our positions to the courts and are grateful to the 3rd Circuit Court of Appeals for reaffirming the federal government's discretion to rely on the Elizabeth Detention Center to support its vital mission.”

“It's important to note that we have a long-standing, zero-tolerance policy not to advocate for or against any legislation that serves as the basis for – or determines the duration of – an individual’s detention,” he continued.

“CoreCivic does not enforce immigration laws, arrest anyone who may be in violation of immigration laws, or have any say whatsoever in an individual’s deportation or release,” the statement added. “CoreCivic also does not know the circumstances of individuals when they are placed in our facilities. Our responsibility is to care for each person respectfully and humanely while they receive the legal due process that they are entitled to.”

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