[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 03-14086 ELEVENTH CIRCUIT
________________________ August 18, 2004
THOMAS K. KAHN
D. C. Docket No. 03-00484-CV-S-NE CLERK
JOSEPH G. GIVENS, an individual,
Plaintiff-Appellant,
versus
ALABAMA DEPARTMENT OF CORRECTIONS,
MICHAEL W. HALEY,
individually, et al.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
_________________________
(August 18, 2004)
Before BLACK and KRAVITCH, Circuit Judges, and STROM*, District Judge.
BLACK, Circuit Judge:
*
Honorable Lyle E. Strom, United States District Judge for the District of Nebraska,
sitting by designation.
Alabama inmates participating in work release have part of their wages
deposited by the state’s Department of Corrections (the Department) in bank
accounts in their names. Although interest accrues on these accounts, Department
policy prohibits inmates from receiving it. Appellant Joseph G. Givens, a former
work release participant, filed suit under 42 U.S.C. § 1983, claiming the
Department’s policy violated both federal and state law. In particular, Givens
argued the Department’s policy constituted an unlawful taking. The district court
dismissed the action for failure to state a claim, and we affirm.
I. BACKGROUND
Alabama statutorily authorizes the Department to adopt regulations and
policies establishing a work-release program for persons incarcerated by the state.
See Ala. Code § 14-8-2. This authority is constrained by several relevant
limitations. First, any wages earned by an inmate must be paid directly to the
Department. Id. § 14-8-6. Second, the Department may withhold part of the
wages received, but the withholding cannot exceed a set percentage of the total
wages earned. Id. Third, the remainder of an inmate’s earnings—less any
withdrawals made by the inmate during incarceration—must be paid to the inmate
upon release. Id.
2
Pursuant to its statutory authority, the Department implemented a work
release program. This program is described in Administrative Regulation No. 410,
which provides that, after the Department has withheld its percentage of an
inmate’s earnings,1 the remainder is to be deposited in a Prisoner Money on
Deposit (PMOD) account in the inmate’s name. Dep’t of Corr. Admin. Reg. No.
410, § VII.B (Sept. 2, 1997).
In Alabama, PMOD accounts are administered in accordance with the
Department’s Manual of Accounting Procedures for Institutions and Community
Based Facilities, which specifically states that “inmates are not entitled to receive
interest on PMOD accounts.”2 Ala. Dep’t of Corr. Manual of Accounting
Procedures for Insts. and Cmty. Based Facilities, ch. 5, at 26.
Givens was incarcerated in Alabama from 1986 until his release in 2002.
During this time, he participated in the Department’s work-release program. The
wages he earned were paid directly to the Department, and, after the Department
withheld its percentage, the remainder was deposited in a PMOD account in his
name. Upon his release, Givens was paid the amount that had been deposited in
1
At present, the Department is authorized to withhold up to 40 percent of each inmate’s
earnings. Ala. Code § 14-8-6. Prior to 1992, this percentage was lower.
2
The Department uses the interest that accrues on the PMOD accounts to (1) offset the
costs of administering the accounts, and (2) fund various recreational activities for the inmates.
3
his PMOD account less the withdrawals he had made while incarcerated. In
accordance with Department policy, Givens did not receive any of the interest that
had accrued on his account.
Givens commenced this action against the Department and assorted state
officials by filing a complaint in the Northern District of Alabama. Givens alleged
the Department’s refusal to allow him to collect the interest that had accrued on
his PMOD account (1) constituted a wrongful taking under both federal and state
law, and (2) violated § 14-8-35(4) of the Alabama Code, which prohibits the
exploitation of inmates. The district court dismissed the takings claims,
concluding Givens had no property interest in the interest on his account. The
district court also dismissed the claim based on the alleged violation of § 14-8-
35(4) on the ground it was simply not “cognizable.” This appeal followed.
II. STANDARD OF REVIEW
We review the district court's dismissal of a complaint for failure to state a
claim de novo. Behlen v. Merrill Lynch, 311 F.3d 1087, 1090 (11th Cir. 2002).
4
III. DISCUSSION
We are asked to decide only whether the district court erred in dismissing
Givens’s claims that an unlawful taking occurred.3
The Takings Clause in the Fifth Amendment, which was made applicable to
the States through the Fourteenth Amendment, provides that “‘private property
shall not be taken for public use without just compensation.’” Phillips v.
Washington Legal Found., 524 U.S. 156, 163–64, 118 S. Ct. 1925, 1930 (1988)
(quoting U.S. Const. amend. V). The Alabama Constitution contains virtually
identical wording. See Ala. Const. art. 1, § 23. Thus, to state a Takings claim
under either federal or Alabama law, a plaintiff must first demonstrate that he
possesses a “property interest” that is constitutionally protected. See Ruckelshaus
v. Monsanto Co., 467 U.S. 986, 1000–01, 104 S. Ct. 2862, 2871 (1984); Penn
Cent. Transp. Co. v. New York, 438 U.S. 104, 125, 98 S. Ct. 2646, 2659 (1978);
Jackson v. Birmingham Foundry & Mach. Co., 45 So. 660, 662–63 (Ala. 1908).
Only if the plaintiff actually possesses such an interest will a reviewing court then
determine whether the deprivation or reduction of that interest constitutes a
3
Givens initially claimed the Department’s conduct also violated § 14-8-35(4) of the
Alabama Code. Given that (1) the district court concluded this claim was not cognizable, and (2)
Givens did not mention it in the argument section of his brief, we conclude he has abandoned it.
See KMS Rest. Corp. v. Wendy’s Int’l, Inc., 361 F.3d 1321, 1328 n.4 (11th Cir. 2004).
5
“taking.” Schneider v. California Dep’t of Corr., 151 F.3d 1194, 1198 (9th Cir.
1998).
The Takings Clause protects private property; it does not create it. See
Phillips, 524 U.S. at 164, 118 S. Ct. at 1930. Thus, to determine whether a
particular property interest is protected, we look to “existing rules or
understandings that stem from an independent source such as state law.” Id.
(internal quotation marks and citation omitted); Webb’s Fabulous Pharmacies v.
Beckwith, 449 U.S. 155, 161, 101 S. Ct. 446, 451 (1980).
Here, Givens argues that, as an Alabama inmate, he had a property interest
in the interest that accrued on his PMOD account. Given that whether an Alabama
inmate possesses such a property interest is a question of first impression in this
Circuit, we find it helpful to begin by setting forth the cases that shape our
analysis.
A. Relevant Precedent
We commence by briefly mentioning two relevant Supreme Court decisions.
In Webb’s Fabulous Pharmacies, the Supreme Court held that a state violated the
Takings Clause when it took for itself—pursuant to statutory authority—the
interest that accrued on an interpleader fund deposited in the registry of a county
court, where a fee—prescribed by a different statute—was also charged for the
6
clerk’s services in receiving the fund into the registry. 449 U.S. at 164, 101 S. Ct.
at 452. More recently, in Phillips, the Court held that the interest paid on IOLTA
accounts4 is the property of the client. 524 U.S. at 160, 118 S. Ct. at 1928.
We next turn to the relevant published decisions from our sister Circuits.
In Schneider, the Ninth Circuit held inmates have a protected property interest in
the interest that accrues on their accounts, even where state statute provides
otherwise. 151 F.3d at 1201. In reaching this conclusion, the Ninth Circuit relied
on both Phillips and Webb’s Fabulous Pharmacies. 151 F.3d at 1199. And, as
did the Supreme Court, the Ninth Circuit stressed the pedigree of the common law
maxim that interest should follow principal. See id. at 1200–01.5
The Fourth Circuit reached the opposite result in Washlefske v. Winston,
234 F.3d 179 (4th Cir. 2000) . In that case, Virginia had directed its Department
of Corrections to invest prisoner funds at its discretion and to use any interest
4
Phillips involved a state that had adopted an Interest on Lawyers Trust Account
(IOLTA) program in which certain client funds held by an attorney were deposited in bank
accounts. 524 U.S. at 159–160, 118 S. Ct. at 1927–28. The interest generated was given to
foundations financing legal services for low income persons. Id. at 160, 118 S. Ct. at 1928.
5
The Ninth Circuit later clarified that, where a state statute establishes the interest earned
on inmate accounts is to be used to cover the costs of administering them, there is no “taking”
when the interest is used for that purpose. See McIntrye v. Bayer, 339 F.3d 1097, 1101–02 (9th
Cir. 2003) (concluding that there must be “net loss” to the inmate for a “taking” to have
occurred). The Fifth Circuit reached the same result on similar facts in Hatfield v. Scott, 306
F.3d 223 (5th Cir. 2002), concluding there was no need to determine whether the state statute at
issue established a property interest, given that there was no “taking” and the inmate had waived
whatever right to the interest he had. Id. at 229.
7
earned for the benefit of the general prison population. Id. at 181. The Fourth
Circuit ultimately held Virginia inmates did not have a protected property interest
in the interest on their accounts. Id. at 185–86. In reaching this conclusion, the
Fourth Circuit noted that, because inmates at common law traditionally had no
right to earn wages, any rights they currently possessed extended only so far as
Virginia statute or regulation provided. Id. at 184–86 (distinguishing Phillips and
Webb’s Fabulous Pharmacies). The Fourth Circuit further noted that, because
neither statute nor regulation provided that inmates were to receive the interest on
their accounts, inmates had no property right in any interest that accrued. Id. at
185–86. Rather, all the inmates had was a limited property right in the amounts
deposited in their names—specifically, the inmates possessed the limited right to
access their deposits when permitted by statute, regulation, or policy. See id.
B. Analysis
Here, like the Ninth Circuit in Schneider and the Fourth Circuit in
Washlefske, we are presented with a state scheme—Alabama’s—that prohibits
inmates from receiving the interest that accrues on their accounts. Our task is thus
to determine whether an Alabama property interest is implicated—i.e., either one
8
that existed at the time Alabama adopted the common law of England, or one that
Alabama subsequently created.6
1. Whether a Property Interest Existed at Common Law
We now address whether Alabama inmates have a common law property
right in the interest that accrues on their accounts. See Washlefske, at 184–85;
Schneider, 151 F.3d at 1200–01. Certainly, non-inmates have such a property
right. See, e.g., Phillips, 524 U.S. at 165–66 & n.5, 118 S. Ct. at 1930–31 & n.5
(listing cases applying the common law maxim that interest should follow
principal); Freeman v. Young, 507 So. 2d 109, 110 (Ala. Civ. App. 1987) (quoting
Webb’s Fabulous Pharmacies and holding that, where one party in an interpleader
action receives half of the amount deposited with the court, that party is entitled to
half of the interest as well). Givens argues the interest-follows-principal maxim
should apply to inmate accounts. We disagree for three reasons.
6
Since Alabama adopted the common law of England many years ago, see Ala. Code §
1-3-1 (adopting English common law to the extent it was not inconsistent with “the Constitution,
laws, and institutions” of Alabama); see also Neville v. Cheshire, 50 So. 1005, 1006 (Ala. 1909)
(observing that the common law of Alabama is rooted in ancient English common law), there are
two likely grounds for arguing that a particular property interest is recognized in the state: (1) the
property interest existed in England at the time Alabama adopted English common law and is
therefore part of Alabama law; or (2) Alabama subsequently created the property interest by—for
example—enacting a statute, adopting a regulation, or implementing a policy. See, e.g.,
Washlefske, 234 F.3d at 185; Schneider, 151 F.3d at 1200–01.
9
First, Givens’s argument ignores both his status as an inmate and the fact
that, at common law, such status was significant. Although non-inmates enjoyed
an assortment of property rights at common law, inmates did not:
[A]ll property is derived from society, being one of those civil rights
which are conferred upon individuals, in exchange for that degree of
natural freedom which every man must sacrifice when he enters into
social communities. If therefore a member of any national
community violates the fundamental contract of his association, by
transgressing the municipal law, he forfeits his right to such
privileges as he claims by that contract; and the state may very justly
resume that portion of property, or any part of it, which the laws have
before assigned him.
1 William Blackstone, Commentaries *299. Indeed, at common law an inmate not
only did not have a property right in the product of his work in prison, but he also
could be forced to forfeit all rights to personal property. See Calero-Toledo v.
Pearson Yacht Leasing Co., 416 U.S. 663, 682, 94 S. Ct. 2080, 2091 (1974):
The convicted felon forfeited his chattels to the Crown and his lands
escheated to his lord; the convicted traitor forfeited all of his
property, real and personal, to the Crown. The basis for these
forfeitures was that a breach of the criminal law was an offense to the
King's peace, which was felt to justify denial of the right to own
property.
(citations omitted); 4 William Blackstone, Commentaries *385 (explaining the
extent to which a convicted felon could be forced to forfeit various property
interests); see also United States v. Kozminski, 487 U.S. 931, 943–944, 108 S. Ct.
10
2751, 2760 (1988) (observing that requiring inmates to work without pay does not
violate the Thirteenth Amendment’s prohibition against involuntary servitude);
Downey v. Bituminous Casualty Corp., 349 So. 2d 1153, 1155 (Ala. 1977)
(observing that inmate labor does not have to be voluntary). Thus, under
traditional common law in Alabama, an inmate had no property rights.
Accordingly, we cannot accept Givens’s suggestion that the common law maxim
that interest follows principal applies where an inmate is involved.
Second, the only case directly on point that favors Givens is Schneider, and
that case frames the common-law inquiry too broadly. See 151 F.3d at 1200–01.
Rather than merely asking whether interest followed principal at common law, see
id., the Ninth Circuit should have instead analyzed the extent to which inmates at
common law enjoyed property rights. Because the Ninth Circuit did not do this,
we are reluctant to construe Schneider as persuasive authority in this Circuit.
Third, as the Fourth Circuit noted in Washlefske, the Supreme Court’s
holdings in Phillips and Webb’s Fabulous Pharmacies—on which Givens
relies—assumed that a complete private property right existed in the principal:
The holding in Phillips, as well as that in Webb’s Fabulous
Pharmacies, assumes that the claimants had a traditional private
property right in the principal and concludes only that, as an incident
to that ownership, the claimants also had a property right in the
interest. See Phillips, 524 U.S. at 164, 118 S. Ct. 1925 (noting its
11
assumption that clients’ funds deposited in attorneys’ trust accounts
remained “freely available to the clients upon demand”); Webb's
Fabulous Pharmacies, 449 U.S. at 160, 101 S. Ct. 446 (beginning its
analysis with the observation that the “principal sum deposited in the
registry of the law plainly was private property”).
234 F.3d at 185. By contrast, in this case, Givens has at most a limited property
right in the principal. Like the inmate in Washlefske, Givens is not free to receive
the amounts deposited in cash, make withdrawals whenever he wants, or spend
money without the Department’s approval. See id.; Ala. Code § 14-8-6 (limiting
the extent of an Alabama inmate’s property interest in his earnings); Dep’t of
Corrs. Admin. Reg. No. 410, § VII (Sept. 2, 1997) (same). Thus, in regards to his
interest-bearing account, Givens lacks the full rights of “possession, control, and
disposition” a non-inmate would enjoy. See Phillips, 524 U.S. at 170, 118 S. Ct.
at 1933. Therefore, neither Phillips nor Webb’s Fabulous Pharmacies stand for
the proposition that Givens has the same right as a non-inmate to receive interest.
For these reasons, we conclude Alabama inmates do not have a common law
property right to the interest that accrues on their accounts.
2. Whether Alabama Created a Property Interest by Enacting a Statute,
Adopting a Regulation, or Implementing a Policy
Although common law does not vest Givens with a property interest in the
interest on his account, Alabama could still have created a property interest by
12
enacting a statute, adopting a regulation or implementing a policy. See Tellis v.
Godinez, 5 F.3d 1314, 1316–17 (9th Cir. 1993) (holding that because Nevada
statute provided that the state’s inmates were entitled to the interest on their
accounts, the inmates had a property interest in any interest that accrued); see also
Washlefske, 234 F.3d at 185 (stating that if no right existed at English common
law, a state may subsequently create one); Schneider, 151 F.3d at 1200–01 (noting
same but also commenting that, in doing so, a state may not encroach upon
“traditional ‘old property’ interests”). In this case, however, we conclude
Alabama created no such property interest.
So far as inmates of the state are concerned, §§ 14-8-1 to 14-8-10 of the
Alabama Code are the only statutory provisions that bear on work release. None
of these sections mention interest. The only provision even tangentially related is
§ 14-8-6, which provides:
The employer of an inmate involved in work release shall pay the
inmate's wages directly to the Department of Corrections. The
department may adopt regulations concerning the disbursement of
any earnings of the inmates involved in work release. The
department is authorized to withhold from an inmate's earnings the
cost incident to the inmate's confinement as the department shall
deem appropriate and reasonable. In no event shall the withheld
earnings exceed 40 percent of the earnings of the inmate. After all
expenses have been deducted by the department, the remainder of the
inmate's earnings shall be credited to his or her account with the
13
department. Upon his or her release all moneys being held by the
department shall be paid over to the inmate.
Ala. Code § 14-8-6 (emphasis added). The only property interest this provision
could be said to provide an inmate is a limited property interest in the amount of
his wages that remains after the Department has deducted a portion that is
(1) “appropriate and reasonable,” and (2) not in excess of 40% of the total wages
earned. See id. In short, the Alabama statutes are silent as to what is to become of
any interest earned. Alabama statutory law thus does not vest Givens with a
property interest in the interest that accrues on his account. See Washlefske, 234
F.3d at 185 (noting that, where a state statute creates a property right, the right
extends only so far as the statute expressly provides).
We next consider whether Alabama regulation or policy vests inmates with
a property right in the interest earned on their accounts. Given that the relevant
regulation is silent regarding interest, see Dep’t of Corrs. Admin. Reg. No. 410
(Sept. 2, 1997), and Department policy provides that inmates are not to receive
any such interest, Ala. Dep’t of Corr. Manual of Accounting Procedures for Insts.
and Cmty. Based Facilities, ch. 5, at 26, we conclude that neither regulation nor
policy vests Alabama inmates with such a right either.
14
In sum, we conclude Alabama has not created a property interest for its
inmates in the interest that accrues on their accounts.
IV. CONCLUSION
For the foregoing reasons, we conclude that, at common law, Alabama
inmates do not have a property interest in the interest that accrues on their
accounts. We further conclude Alabama has not created such an interest via
statute, regulation, or policy. Accordingly, no recognized property interest is
implicated here, and, absent such an interest, there is no “taking.”
AFFIRMED.
15