United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

Submitted March 19, 2014*

Decided March 19, 2014

Before

RICHARD A. POSNER, Circuit Judge

MICHAEL S. KANNE, Circuit Judge

JOHN DANIEL TINDER, Circuit Judge

No. 13‐3339

CRAIG J. CESAL,

Plaintiff‐Appellant,

v.

FEDERAL PRISON INDUSTRIES, INC.

and FEDERAL BUREAU OF PRISONS,

Defendants‐Appellees.

Appeal from the United States

District Court for the Southern District

of Illinois.

No. 11‐927‐GPM

G. Patrick Murphy,

Judge.

O R D E R

After Craig Cesal, a federal inmate, was injured at a prison job in 2008 at the

Federal Correctional Center in Pekin, Illinois, he received compensation while he was

unable to do heavy‐duty work. He sued Federal Prison Industries, Inc. (a government

corporation that employs federal inmates, see United States v. Demko, 385 U.S. 149,

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with

Fed. R. App. P. 32.1

*

After examining the parties’ briefs and the record, we have concluded that oral

argument is unnecessary. Thus, the appeal is submitted on the briefs and the record.

See FED. R. APP. P. 34(a)(2)(C).
No. 13‐3339 Page 2

149–50 (1966)) and the Federal Bureau of Prisons, contending that, under the Inmate

Accident Compensation Act, 18 U.S.C. § 4126(c)(4), they wrongly ended his accident

compensation when he was transferred to another prison. The district court dismissed

the case for failure to state a claim, reasoning that compensation for his injury

terminated when Cesal was transferred from Pekin. Because Cesal’s right to

compensation for his Pekin injury ceased after his transfer, we affirm the judgment.

According to Cesal, he injured his spine in 2008 while lifting a heavy door at his

metal‐welding job at Pekin. He received lost‐time wages for the four weeks he was

unable to work before he received a new, light‐duty job at the same pay rate. Three

years later he was transferred to the federal prison in Greenville, Illinois, for reasons

unrelated to his injury. He received a work assignment at Greenville’s electrical shop in

May 2011. But because he was still limited to a light‐duty job and no light‐duty

positions were available, he has been unable to work at Greenville. He applied twice for

lost‐time wages, and a prison administrator at Greenville denied both requests. He

administratively appealed those denials, but the prison rejected them as untimely.

Cesal then sued under the Inmate Accident Compensation Act and its

regulations, see 28 C.F.R. § 301.204(b), alleging that Greenville’s prison administrators

should not have denied his application for lost‐time wages, and requesting lost‐time

wages until a light‐duty work assignment becomes available at Greenville. The

defendants moved to dismiss, arguing that the Act does not create a private right of

action, that they had sovereign immunity, and that Cesal did not timely exhaust his

administrative remedies. Cesal responded by arguing that the federal common law

created a cause of action under the Act and that one of his two administrative appeals

was timely.

The district court dismissed the complaint after concluding that Cesal became

ineligible for lost‐time wages for his Pekin injury when he was transferred to

Greenville. It explained that inmates are entitled to lost‐time wages for an injury only

while they remain at the prison where they suffered that injury. See 28 C.F.R. §§ 301.202

to 301.204. Once an inmate, like Cesal, transfers to another prison for reasons unrelated

to the injury, the prisoner is no longer entitled to compensatory pay for that injury. 28

C.F.R. § 301.204(a)(2). Cesal moved the court to reconsider, arguing that the defendants

did not raise the ground that the court relied on and that he is eligible for lost‐time

wages so long as he is still in federal prison. The court denied his motion, reiterating its

earlier reasoning for dismissing the complaint.
No. 13‐3339 Page 3

On appeal Cesal argues that he is entitled to ongoing lost‐time wages because

Greenville has not been able to place him in a job that his work‐related injury allows

him to perform. He also argues that the district court improperly granted the

defendants’ motion to dismiss on a ground that the defendants did not raise.

We begin with two procedural observations. First, the district court permissibly

evaluated whether Cesal’s complaint fails to state a claim, even though the defendants

had not raised that specific ground for dismissal. Under 42 U.S.C. § 1997e(c)(1), a

district court may sua sponte dismiss for failure to state a claim a prisoner’s suit seeking

compensation for injuries during imprisonment, as this suit does. See Jones v. Bock, 549

U.S. 199, 214 (2007). Second, a prisoner who seeks judicial review of an administrative

denial of lost‐time wages may proceed only under the Administrative Procedures Act, 5

U.S.C. §§ 701–06. See Thompson v. United States, 492 F.2d 1082, 1084 n.5 (5th Cir. 1974).

Judicial review under that Act is confined to determining whether the administrative

decision to deny lost‐time wages was arbitrary and capricious. Id.

The district court correctly dismissed Cesal’s complaint because, based on his

own allegations, the prison administrator’s denial of compensation was not arbitrary

and capricious. The Inmate Accident Compensation Act provides compensation for

inmates injured “in any industry or in any work activity in connection with the

maintenance or operation of the institution in which the inmates are confined.” 18

U.S.C. § 4126(c)(4); see Demko, 385 U.S. at 152; Paschal v. United States, 302 F.3d 768, 769

(7th Cir. 2002). The regulations that govern the administration of the Act (which Cesal

does not challenge) mandate that “the inmate shall receive lost‐time wages until the

inmate . . . [i]s transferred to another institution for reasons unrelated to the work

injury.” 28 C.F.R. § 301.204(a)(2) (emphasis added). Cesal acknowledges that he was

transferred to Greenville for reasons unrelated to the injury, so by virtue of that transfer

his eligibility for benefits arising from his Pekin injury has been extinguished. He thus

cannot state a claim that the defendants’ denial of benefits was arbitrary or capricious.

Accordingly, the district court’s dismissal of his complaint is AFFIRMED.