California Court Clears Path for Lawsuit Over Stolen 'Gate Money'

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An Alameda County Superior Court judge has rejected the California Department of Corrections and Rehabilitation's (CDCR) attempts to dismiss a major class action lawsuit challenging the agency's decades-long practice of deducting clothing and transportation costs from the $200 'gate money' that state law requires be given to every person upon their release from prison. The ruling preserves the case's class action status, meaning it can seek relief for hundreds of thousands of people shortchanged over the last 30 years.

Why it matters

The ruling will have a significant impact on formerly incarcerated individuals in Orange County, where over 5,000 people were in the state prison system as of 2021. The $200 'gate money' is a critical 'lifeline' for many returning to one of the most expensive regions in the country, and losing half of that to 'clothing fees' can mean the difference between a bus ticket home and immediate homelessness.

The details

The case, Scholl v. CDCR, challenges the CDCR's practice of deducting clothing and transportation costs from the $200 'gate money' that state law requires be given to every person upon their release from prison. The Alameda County Superior Court judge rejected the CDCR's attempts to dismiss the case or strike the class allegations, ruling that the case is not 'moot' despite the agency's recent policy change, and that the plaintiffs have a 'plausible claim' that the CDCR exceeded its authority by dipping into these funds to cover its own expenses.

• The ruling was issued on April 1, 2026.
• The lawsuit was filed after the CDCR recently changed its policy to stop the deductions.

What’s next

The case now moves toward class certification and merits proceedings, where the court will decide exactly how much the state owes those it shortchanged. Estimates suggest the total could reach into the millions for former residents across the state.