Young v. Wall

United States Court of Appeals
For the First Circuit

No. 10-1862

EDWARD EUGENE YOUNG, SR.,

Plaintiff, Appellant,

v.

ASHBEL T. WALL,
INDIVIDUALLY AND IN HIS CAPACITY AS THE DIRECTOR OF THE
RHODE ISLAND DEPARTMENT OF CORRECTIONS,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. William E. Smith, U.S. District Judge]

Before

Boudin, Circuit Judge,
Souter,* Associate Justice,
and Selya, Circuit Judge.

Andrew B. Prescott, with whom Gauri A. Patil and Nixon Peabody
LLP were on brief, for appellant.
Thomas A. Palombo, Assistant Attorney General, with whom
Patrick C. Lynch, Attorney General, was on brief, for appellee.

April 14, 2011

*
Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
 SELYA, Circuit Judge. This appeal requires us to

determine whether a prison's unilateral suspension of its internal

policy of paying interest on inmate accounts violated the

constitutional rights of an affected inmate. The district court

thought not. Weighing in on an issue that has split the circuits,

we conclude that prison inmates lack a constitutionally protected

property right in interest not yet paid. Accordingly, the

defendant was at liberty to abrogate the policy prospectively.

The material facts are not in dispute. By statute, Rhode

Island authorizes inmates to pursue gainful, in-prison employment

while incarcerated. R.I. Gen. Laws § 42-56-22. Their wages are

deposited into inmate accounts maintained by the Rhode Island

Department of Corrections (RIDOC).

RIDOC places twenty-five percent of an inmate's earnings

(up to a maximum of $1,000) into what is known as an "encumbered

account." This sum is retained until the inmate's release, at

which time it is tendered to him. Id. § 42-56-22(a). The balance

of the inmate's earnings is deposited in what is known as an

"available account." That account may be supplemented through

other sources (e.g., gifts from family and friends). An inmate has

the option of transferring any unencumbered funds to a commercial

bank account.

Despite the nomenclature, there are limits on what an

inmate may do with the money in his available account. In

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accordance with Policy No. 2.17 (the Policy), some uses are

permitted (e.g., purchasing items at the prison commissary) and

others are prohibited (e.g., purchasing proscribed merchandise).

Inmates also are prohibited from making cash withdrawals.

There is a set procedure for transferring funds from

inmate accounts for approved expenditures.1 Inmates get monthly

statements detailing their transactions and confirming their

account balances.

In bygone days, the funds in the individual inmate

accounts were pooled and invested. Any return on this investment

was then allocated to individual inmate accounts based on average

daily balances. The Policy memorialized the practice of crediting

interest, stipulating that interest on funds in inmate accounts

would "accrue[] to the depositing inmates in an equitable fashion."

It is the putative right to the continued accrual of interest that

is at the epicenter of this appeal.

In 2001, RIDOC decided to outsource management of a wide

swath of back-room systems. Comments from prospective vendors

prompted RIDOC to reevaluate the feasibility of paying interest on

inmate accounts. As a result, the pooling arrangement was scrapped

and, on June 1, 2002, RIDOC stopped paying interest. A few weeks

later, RIDOC posted notices advising of this change in practice

1
The details of this procedure are not relevant to the issues
on appeal.

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throughout the prison. A similar notice appeared in the prison

newsletter.

During August, RIDOC formally suspended those provisions

of the Policy that addressed interest on inmate accounts. Withal,

it was not until May 6, 2003, that RIDOC promulgated a new policy,

which stated explicitly that no interest would accrue on funds held

in inmate accounts.

This about-face troubled plaintiff-appellant Edward

Eugene Young, Sr., who was incarcerated at the prison both before

and after the policy changed. While serving his sentence, he had

performed various jobs for which he was paid; RIDOC had deposited

his earnings in inmate accounts; and RIDOC had paid him interest

until June 1, 2002 (when it stopped paying interest on inmate

accounts). The plaintiff learned about this reversal of position

on or about June 20, 2002.

Nearly a year later, the plaintiff sued RIDOC's director,

individually and in his official capacity. It would serve no

useful goal to track the tortuous travel of the case — including

the morphing of the original action into a second action — as it

wended its way through the district court. Suffice it to say that,

after several years of legal wrangling, the case narrowed for all

practical purposes to two federal claims: (i) that the denial of

interest constituted an unconstitutional taking of the plaintiff's

property and (ii) that RIDOC's failure to afford the plaintiff

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notice and an opportunity to be heard before abandoning the

practice of accruing interest violated his right to procedural due

process.2 In a series of rulings, the district court dismissed the

taking claim, see, e.g., Young v. Wall, 359 F. Supp. 2d 84, 94

(D.R.I. 2005), and granted summary judgment for the defendant on

the due process claims, see Young v. Wall, No. 07-34, 2010 WL

2553572, at *3 (D.R.I. June 18, 2010). This timely appeal ensued.

In this court, as in the district court, the plaintiff

claims that RIDOC's decision to stop paying interest on inmate

accounts amounted to both an unconstitutional taking and a due

process violation. That the district court disposed of the former

claim on a motion to dismiss, Fed. R. Civ. P. 12(b)(6), and the

latter claim on summary judgment, Fed. R. Civ. P. 56, is of no

particular moment; after all, the material facts are uncontroverted

and the appeal turns on questions of law.

Our review is de novo. See Ungar v. Palestine Lib. Org.,

599 F.3d 79, 83 (1st Cir. 2010); ConnectU LLC v. Zuckerberg, 522

F.3d 82, 91 (1st Cir. 2008). In this undertaking, we are not

wedded to the district court's reasoning but may affirm its rulings

on any ground made manifest by the record. See InterGen N.V. v.

Grina, 344 F.3d 134, 141 (1st Cir. 2003); Houlton Citizens' Coal.

v. Town of Houlton, 175 F.3d 178, 184 (1st Cir. 1999).

2
Along the way, the plaintiff raised a gallimaufry of state-
law claims, none of which is implicated in this appeal.

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 Our inquiry is simplified because both of the plaintiff's

claims hinge on the existence vel non of a property right in the

accrual of interest on inmate accounts. As we explain below, the

plaintiff lacks such a right. Consequently, his claims fail.

It is axiomatic that "the Constitution protects rather

than creates property interests." Phillips v. Wash. Legal Found.,

524 U.S. 156, 164 (1998). This means that a court charged with

determining the existence of a constitutionally protected property

interest must look to "existing rules or understandings that stem

from an independent source such as state law." Bd. of Regents of

State Colls. v. Roth, 408 U.S. 564, 577 (1972). Some such source

must give rise to a "legitimate claim of entitlement" to the

property in question. Centro Medico del Turabo, Inc. v. Feliciano

de Melecio, 406 F.3d 1, 8 (1st Cir. 2005) (quoting Roth, 408 U.S.

at 577). A unilateral expectation, by itself, is not sufficient to

create a constitutionally protected property interest. Webb's

Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161 (1980);

URI Student Senate v. Town of Narragansett, 631 F.3d 1, 11 (1st

Cir. 2011).

In this instance, the plaintiff posits that state law

creates the requisite claim of entitlement three times over. In

the pages that follow, we explore the three avenues to which he

alludes: common law, statutory law, and policy and practice. Each

proves to be a dead end.

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 Before embarking on this odyssey, we pause to explain

that this case is not about either principal or interest previously

credited to inmate accounts. It is clear beyond hope of

contradiction that an inmate has a property interest in the

balances held in his accounts. See Reynolds v. Wagner, 128 F.3d

166, 179 (3d Cir. 1997) (collecting cases). This case is about

interest not yet credited to an inmate's account.

The plaintiff's reliance on state common law as a source

of his supposed property right is mislaid. He notes that he had a

property right in the principal balances in his inmate accounts and

adds that, at common law, interest follows principal. See

Phillips, 524 U.S. at 165; Webb's Fabulous Pharmacies, 449 U.S. at

162. In his view, the combination of these two facts signifies

that he has a legitimate claim of entitlement to interest on an

ongoing basis. We do not agree.

The most jagged rent in the fabric of the plaintiff's

argument is his failure to recognize the highly idiosyncratic

context that prison presents. Although criminals do not forfeit

all of their constitutional rights upon conviction and

incarceration, Wolff v. McDonnell, 418 U.S. 539, 555-56 (1974),

they traditionally enjoy a more modest constellation of rights than

other persons. See, e.g., Turner v. Safley, 482 U.S. 78, 91, 93

(1987); Hudson v. Palmer, 468 U.S. 517, 525-26 (1984); French v.

Butterworth, 614 F.2d 23, 24 (1st Cir. 1980). This distinction has

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particular force when it comes to property rights. See Givens v.

Ala. Dep't of Corr., 381 F.3d 1064, 1068 (11th Cir. 2004)

(explaining that "[a]lthough non-inmates enjoyed an assortment of

property rights at common law, inmates did not"); see also Calero-

Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 682 (1974);

United States v. 221 Dana Ave., 239 F.3d 78, 90 n.16 (1st Cir.

2001).

At common law, prison inmates possessed no right to

profit from their labors; they could be compelled to work without

any recompense. See Washlefske v. Winston, 234 F.3d 179, 184-85

(4th Cir. 2000) (holding that a policy of non-payment "would not

violate any traditional principle of property law"). Rhode Island

common law echoes this theme. See Anderson v. Salant, 96 A. 425,

432 (R.I. 1916); see also R.I. Council 94 v. State, 714 A.2d 584,

592 (R.I. 1998) (acknowledging that "[e]mployment of prisoners at

hard labor existed before the adoption of the Rhode Island

Constitution"). The reported decisions of the Rhode Island courts

do not offer the slightest indication that the common law creates

a property right enabling inmates to demand interest on RIDOC-held

accounts. We conclude, therefore, that the common law does not

spawn the property right that the plaintiff envisions.

To be sure, this conclusion is at odds with the holding

in Schneider v. Cal. Dep't of Corr., 151 F.3d 1194, 1201 (9th Cir.

1998). But two other courts of appeals have rejected the Ninth

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Circuit's reasoning, see Givens, 381 F.3d at 1068-69; Washlefske,

234 F.3d at 186, and we share their view. The Schneider court

mechanically applied the mantra that interest follows principal

without giving due weight to the truncation of prisoners' property

rights that is characteristic of the common law. We think that

this limitation easily tips the balance.

State statutory law proves no more accommodating to the

plaintiff's cause. The pertinent provision allows an inmate to

receive a modest wage for his labors. See R.I. Gen. Laws § 42-56-

22(a) (stating that inmates "may be permitted to labor in the

discretion of the director . . . and in that case may be paid not

more than three dollars [per] day"). To that extent, the statute

creates a limited property right in inmate wages, once paid, that

did not exist at common law.3 The statute is silent, however, on

the subject of interest. This silence undermines the plaintiff's

claim that the statute creates a parallel property right in

interest on inmate accounts. See Givens, 381 F.3d at 1070;

Washlefske, 234 F.3d at 185.

In an effort to resist this conclusion, the plaintiff

notes that the language of the Rhode Island statute differs from

the language of the state statutes considered in Givens and

Washlefske, respectively. This is true as far as it goes, but it

3
We say "limited" because there are formidable restrictions
on an inmate's ability to use his money. See Givens, 381 F.3d at
1069; Washlefske, 234 F.3d at 185.

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does not take the plaintiff very far.

Specifically, the plaintiff points to language in section

42-56-22 making clear that encumbered funds are the prisoner's

property and are "to be turned over to the prisoner" upon his

release. But this language refers only to principal balances, not

to any as-yet-uncredited interest. The difference in wording,

then, is of no assistance to the plaintiff.

The last avenue that the plaintiff pursues in search of

a property right features a claim that the Policy and RIDOC's

practice under it resulted in a shared understanding that interest

would accrue on inmate accounts.

The basic premise on which this line of argument rests —

that a state's policies and practices can underpin a

constitutionally protected property interest — is correct. See,

e.g., Wilkinson v. Austin, 545 U.S. 209, 221-22 (2005); Wolff, 418

U.S. at 556-58; Givens, 381 F.3d at 1069; cf. Perry v. Sindermann,

408 U.S. 593, 603 (1972) (concluding that a plaintiff "must be

given an opportunity to prove the legitimacy of his claim of such

entitlement in light of the policies and practices of the

institution") (quotation omitted). But careful perscrutation

discloses that this premise is inapposite here.

To begin, the Policy reflected an act of administrative

generosity, authorizing RIDOC to pay interest for so long as the

Policy was in effect. It did not, however, obligate RIDOC to

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follow that course indefinitely. A policy, once implemented, need

not be continued in perpetuity but, rather, in the absence of

special circumstances (say, detrimental reliance), may be modified

or abandoned prospectively. See, e.g., Bova v. City of Medford,

564 F.3d 1093, 1097 (9th Cir. 2009) (explaining that the city may

alter or abandon retirement policy); Biggers v. Wittek Indus.,

Inc., 4 F.3d 291, 295 (4th Cir. 1993) (holding that employer was

under no obligation to continue severance benefits policy). This

principle applies with full force in the prison context. See

Murphy v. Shaw, 49 F. App'x 711, 714 (9th Cir. 2002); Clark v.

Perego, 39 F.3d 320 (5th Cir. 1994) (table). It follows that RIDOC

was under no continuing obligation to pay interest on inmate

accounts.

The short of it is that RIDOC met its obligations under

the Policy for as long as the Policy remained in effect. It

accrued interest on inmate accounts until it abandoned the Policy

and changed its preexisting practice. The plaintiff received that

interest.

When RIDOC halted this practice, it did so prospectively

and uniformly. Hence, the plaintiff was treated the same as every

other similarly situated inmate. He was not singled out and

excluded from the operation of a general policy or practice that

continued in force. This distinguishes the case at bar from those

cases in which a continuing policy or practice has been deemed

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sufficient to create a constitutionally protected property

interest. See, e.g., Perry, 408 U.S. at 602-03; Concepcíon

Chaparro v. Ruíz-Hernández, 607 F.3d 261, 265 (1st Cir. 2010); cf.

Dasey v. Anderson, 304 F.3d 148, 161 (1st Cir. 2002) (finding no

property interest where employer's custom and practice did not

provide employee with "reasonable expectation of continued

employment"); Rosario-Torres v. Hernández-Colón, 889 F.2d 314, 319-

20 (1st Cir. 1989) (en banc) (similar).

That ends this aspect of the matter. We hold that

RIDOC's forward-looking change in policy and practice did not

deprive the plaintiff of any constitutionally protected property

right.

As a fallback, the plaintiff suggests that he was

entitled to notice and an opportunity to be heard before RIDOC

could effectuate the change in its policy and practice. See, e.g.,

Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542 (1985);

Roth, 408 U.S. at 570 n.7. This suggestion puts the cart before

the horse.

With exceptions not relevant here, the Due Process Clause

requires notice and an opportunity to be heard when a state seeks

to deprive a person of a property interest. Loudermill, 470 U.S.

at 542; Goldberg v. Kelly, 397 U.S. 254, 263 (1970). But where, as

here, there is no property interest, that procedural prophylaxis is

not required.

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 We need go no further. For the reasons elucidated above,

we affirm the entry of judgment in favor of the defendant.

Affirmed.

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