There has been litigation on the prisoner-census issue, but not related to
voting. You are thinking of D.C. v. Commerce 789 F. Supp. 1179 (1992) where
the District of Columbia sued the Census Bureau after-the-fact because the
Census counted D.C. prisoners (in a D.C. owned facility) as residents of the
town where the facility was located: Lorton, Virginia. Predictably, the
court held that the Census Bureau was not being "arbitrary and capricious."
Above the level of county legislatures -- where the outcome is mixed -- I do
not believe this issue has ever been litigated as a voting rights issue. My
argument has been that while the Census Bureau is fulfilling its
constitutional mandate to count the population of each state, legislatures
that rely on Census Bureau data as currently collected may be running afoul
of the 14th Amendment and their own state constitutions.
(See: Importing Constituents: Prisoners and Political Clout in New York
http://www.prisonpolicy.org/importing/importing.shtml)
Incidentally, the impact on federal funds is far smaller than people had
expected. I have a piece written with Eric Lotke in a forthcoming Pace Law
Review that includes a discussion of the impact on federal funds. The short
version is that the bulk of the federal government's "population-based"
funds don't directly follow bodies. Rather, population is typically one
factor in a series of grant formulas that often disburse in block form for
re-granting by lower-level officials. The end result is quite small, and the
benefit to rural prison towns tends to come at the expense not of urban
areas but of similarly situated rural non-prison communities.
The electoral impact is different in that it's quantifiable, comes at the
expense of the community that loses population and implicates a fundamental
right. I've been working on the policy and research side of the issue for
about 4 years, now as an Open Society Institute Soros Justice fellow. I've
developed a lot of demographic data and a fair amount of legal research, but
because the issue is so new, I have not yet discovered someone looking to
lead a litigation effort.
PLUG: I also run a website on the issue, PrisonersoftheCensus.org. If you'd
like to be included on the weekly newsletter for the site, just le me know.
-Peter Wagner