FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

WILLIAM W. CASTLE,

Plaintiff-Appellant,

v.

EUROFRESH, INC., AKA Eurofresh

Farms; ARIZONA DEPARTMENT OF

CORRECTIONS, an agency of the

State of Arizona; DORA B. SCHRIRO,

Warden, former Director, Arizona

Department of Corrections;

CHARLES L. RYAN, Director,

Arizona Department of Corrections;

STATE OF ARIZONA,

Defendants-Appellees.

No. 11-17947

D.C. No.

3:09-cv-08114-

JWS

OPINION

Appeal from the United States District Court

for the District of Arizona

John W. Sedwick, District Judge, Presiding

Argued and Submitted

April 11, 2013—Pasadena, California

Filed September 24, 2013

Before: Marsha S. Berzon, Richard C. Tallman,

and Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.;

Concurrence by Judge Berzon
2 CASTLE V. EUROFRESH, INC.

SUMMARY*

Prisoner Civil Rights

The panel affirmed in part and reversed in part the district

court’s summary judgment and remanded in an action

brought by an Arizona state prisoner who alleged that

defendants violated the Americans with Disabilities Act,

42 U.S.C. §§ 12131–12134, and the Rehabilitation Act of

1973, 29 U.S.C. § 794, by failing to reasonably accommodate

his disability at a prison job.

The panel held that plaintiff’s claims against Eurofresh,

a private company that contracted with the Arizona

Correctional Industries for a convict labor force, were

properly dismissed. The panel held that plaintiff was not

Eurofresh’s “employee” under Title I of the ADA because his

labor belonged to the State of Arizona, which put him to work

at Eurofresh in order to comply with its statutory obligations. 

The panel further held that because Eurofresh did not receive

federal financial assistance, either directly or indirectly, it

was not subject to the requirements of the Rehabilitation Act.

The panel reversed the judgment in favor of the State

Defendants because it determined that those defendants could

be held liable for acts of disability discrimination committed

by Eurofresh, its contractor. The panel stated that the law

was clear—State Defendants may not contract away their

obligation to comply with federal discrimination law. The

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
CASTLE V. EUROFRESH, INC. 3

panel remanded to the district court to determine in the first

instance whether any such discrimination occurred.

Concurring, Judge Berzon stated that this circuit’s

precedent compelled the conclusion that plaintiff was not an

employee under Title I of the ADA. Judge Berzon stated that

the notion that prisoners who work for covered employers can

never be “employees” for purposes of federal employeeprotective statutes undermines those statutes as applied to

employees generally and misconstrues the reach of the

“employee” designation.

COUNSEL

Candace Carroll and certified law students Sara Belvill

(argued), Austin Berger, Allison Capozzoli, and Lauren

Presser, University of San Diego Legal Clinics, San Diego,

California, for Plaintiff-Appellant.

Jeffrey Willis and Melissa A. Marcus (argued), Snell &

Wilmer L.L.P., Tuscon, Arizona, for Defendant-Appellee

Eurofresh Inc.

Joseph D. Estes, Assistant Attorney General, and Katherine

E. Watanabe (argued), Arizona Attorney General’s Office,

Phoenix, Arizona,forDefendants-Appellees State of Arizona,

Arizona Department of Corrections,Dora Schriro and Charles

Ryan.
4 CASTLE V. EUROFRESH, INC.

OPINION

M. SMITH, Circuit Judge:

William Castle, formerly an Arizona state prisoner,1

appeals the district court’s entry of judgment in favor of

defendants Eurofresh Inc., the State of Arizona (the State),

the Arizona Department of Corrections (ADC), and certain

officials of the ADC.2 Castle alleges that the defendants

violated the Americans with Disabilities Act (ADA),

42 U.S.C. §§ 12131–12134, and the Rehabilitation Act of

1973 (RA), 29 U.S.C. § 794, by failing to reasonably

accommodate his disability. We conclude that Castle’s

claims against Eurofresh were properly dismissed. Castle

was not Eurofresh’s “employee” under Title I of the ADA,

and Eurofresh does not receive federal financial assistance, as

it must in order to subject it to the requirements of the RA. 

However, we reverse the judgment in favor of the State

Defendants, because those defendants may be held liable for

acts of disability discrimination committed by one of their

contractors. We therefore remand Castle’s claims against the

State Defendants for further proceedings required by this

opinion.

BACKGROUND

Castle was convicted of theft and perpetuating a scheme

or artifice to defraud in violation of Ariz. Rev. Stat. §§ 13-

 

1

 Castle was released from prison on April 22, 2013.

2 Throughout this opinion we refer collectively to the State, the ADC,

and the individual defendants as the State Defendants.
CASTLE V. EUROFRESH, INC. 5

1802, 13-2310. He was sentenced to a ten-year prison term

and placed in the custody of the ADC.

Arizona law requires all able-bodied inmates in ADC’s

custody to “engage in hard labor for not less than forty hours

per week.” Ariz. Rev. Stat. § 31-251(A). Most inmates

satisfy this requirement by participating in the ADC’s Work

Incentive Pay Program (WIPP). Inmate wages under the

WIPP range from ten to fifty cents per hour, although inmates

can earn raises for good performance. Some inmates,

however, receive significantly more remunerative work

assignments through a separate convict labor program run by

Arizona Correctional Industries (ACI).3

See Ariz. Rev. Stat.

§§ 41-1621–1630. ACI contracts with private companies to

provide them with a convict labor force. One company that

contracts with ACI is Eurofresh, which describes itself as

“America’s largest greenhouse operation,” capable of

growing 200 million pounds of “hydroponic tomatoes” each

year.

Castle began picking tomatoes for Eurofresh in July 2008

at a greenhouse located approximately sixty miles from the

prison where he was incarcerated. The job was physically

strenuous—Castle was required to be on his feet for his entire

seven hour shift and often had to push a 600 pound tomato

3 ACI is a statutorily created entity that operates under the

“organizational auspices of the ADC,” but is funded solely “through its

own operations.” See Ariz. Rev. Stat. § 41-1624. ACI describes its

mission as creating “opportunities for offenders to develop marketable job

skills and good work habits through enterprises that produce quality

products and services for [ACI’s] customers.” Those customers have

included firms that produce “clothing, fabricated steel, livestock, dairy

products, and hotel reservations for Best Western motels.” Hale v. State

of Arizona, 993 F.2d 1387, 1390 (9th Cir. 1993) (en banc).
6 CASTLE V. EUROFRESH, INC.

cart. Toward the end of August 2008, Castle began

experiencing “intolerable pain and swelling” in his left ankle

after working for two or more hours at Eurofresh. Castle had

seriously injured his ankle decades earlier during a parachute

accident that occurred while Castle attended the United States

Army Airborne School.4

Because of his pain, Castle asked a Eurofresh supervisor

if he could take short breaks during the work day to rest his

ankle. According to Castle, the supervisor indicated that

Castle would be fired if he insisted on taking breaks. Castle

continued working at Eurofresh, but sought medical treatment

for his injury from the ADC. One of Castle’s medical

providers suggested that he ask for a job change or

accommodation.

In October 2008, Castle sent certified letters to both ACI

and Eurofresh informing them that he could not walk or stand

for long periods without experiencing extreme pain. He

asked to be provided with a position at Eurofresh “that does

not require walking for long periods of time, as well as

pushing heavy carts.” Castle later met with representatives of

both Eurofresh and ACI to discuss his disability. He again

suggested that he be reassigned to a different job, such as

operating box or label machinery in the “pack house.” A

Eurofresh manager responded that there were no other

positions available to inmate laborers,5

but that Eurofresh and

 

4

 The Department of Veterans Affairs has assigned Castle a 20 percent

service-connected disability rating as a result of the accident.

5 Defendants claim that Castle could not be reassigned to another job,

such as a job in the pack house, because civilian workers were employed

in those positions, and “the inmate-to-security personnel ratio was not
CASTLE V. EUROFRESH, INC. 7

ACI would take Castle’s request “under advisement.” Castle

claims that he was later informed that no accommodation

would be made, and that his only option was to quit his

position at Eurofresh. Defendants claim that Eurofresh

offered to promote Castle to a “de-leafer” position,6but that

Castle refused the offer. No party disputes, however, that the

ADC eventually reassigned Castle to a WIPP job in the prison

motor pool. Castle’s new job paid 50 cents per hour. Castle

had been receiving more than $2.25 per hour picking

tomatoes at Eurofresh.

After pursuing a grievance with the ADC, Castle filed a

discrimination claim with the Equal EmploymentOpportunity

Commission (EEOC). After the EEOC issued Castle a Notice

of Suit Rights letter, Castle brought suit against Eurofresh and

the State Defendants.

In his initial complaint, Castle alleged that Eurofresh and

the State Defendants violated his rights under Titles I and II

of the ADA, Section 504 of the RA, and the Arizona Civil

Rights Act, by failing to reasonably accommodate his

disability. Castle also claimed that Eurofresh had breached

its contractual obligations with the State, which required that

Eurofresh comply with all applicable federal and state

adequate” to have inmates work alongside non-convict laborers. Castle

disputes this claim, and contends that inmates regularly worked among

Eurofresh’s civilian employees in the pack house and elsewhere.

6 Defendants acknowledge that the de-leafer position also requires

walking and standing, but claim the job is less physically taxing than

picking tomatoes because the carts used for the de-leafing job are lighter

than those used by the tomato pickers.
8 CASTLE V. EUROFRESH, INC.

employment laws.7 Castle sought moneydamages but did not

request reinstatement at Eurofresh.

The district court dismissed Castle’s Title I claim against

Eurofresh with prejudice. The court found that Castle lacked

standing to sue under the ADA because, as a prisoner, he did

not have an employment relationship with Eurofresh. The

district court also dismissed Castle’s RA claim against

Eurofresh, reasoning that Castle had not adequately alleged

that Eurofresh is the direct or indirect recipient of federal

financial assistance. Castle was given leave to amend his RA

claim against Eurofresh.

In the same order, the district court also dismissed

Castle’s ADA and RA claims against the State Defendants. 

The court concluded that Castle could not state a claim under

either statute because “plaintiff’s own evidence shows that he

was given a different work assignment [in the motor

pool]—one that does not require prolonged standing and

walking.” Castle was granted leave to amend his complaint

against the State Defendants.

After Castle twice amended his complaint, Eurofresh and

the State Defendants filed motions seeking dismissal of

Castle’s remaining claims. The district court granted

Eurofresh’s motion with prejudice, again concluding that

Castle failed to adequately allege that Eurofresh received

federal financial assistance. The district court denied the

State Defendants’ motion, however, and ordered them to

answer Castle’s allegations that they violated Title II of the

ADA and Section 504 of the RA.

7 Castle only appeals the district court’s determinations regarding his

ADA and RA claims.
CASTLE V. EUROFRESH, INC. 9

The State Defendants filed their answer in October 2010. 

In June 2011, the State Defendants filed a motion for

summary judgment on Castle’s remaining claims against

them. The district court granted the motion in November

2011. The court reasoned that the State Defendants did not

violate either the ADA or the RA because: (1) the State

Defendants lacked the power to reassign or otherwise

accommodate Castle within Eurofresh; and (2) the State

Defendants had accommodated Castle by reassigning him to

a job in the prison motor pool. Castle timely appealed.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to review the district court’s entry of

judgment under 28 U.S.C. § 1291. We review an order

granting a motion to dismiss de novo. Cousins v. Lockyer,

568 F.3d 1063, 1067 (9th Cir. 2009). “All well-pleaded

allegations of material fact in the complaint are accepted as

true and are construed in the light most favorable to the nonmoving party.” Faulkner v. ADT Sec. Servs., Inc., 706 F.3d

1017, 1019 (9th Cir. 2013) (citations omitted). However, a

complaint must allege “enough facts to state a claim to relief

that is plausible on its face.” Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007). “A claim has facial plausibility

when ‘the plaintiff pleads factual content that allows the court

to draw the reasonable inference that the defendant is liable

for the misconduct alleged.’” Faulkner, 706 F. 3d at 1019

(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).

We similarly review a grant of summary judgment de

novo. Cameron v. Craig, 713 F.3d 1012, 1018 (9th Cir.

2013). We “must determine whether, viewing the evidence

in the light most favorable to the nonmoving party, there are

any genuine issues of material fact and whether the district
10 CASTLE V. EUROFRESH, INC.

court correctly applied the relevant substantive law.” Id.

(quoting Lopez v. Smith, 203 F.3d 1122, 1131 (9th Cir. 2000)

(en banc)).

DISCUSSION

I. Castle’s ADA Claim Against Eurofresh

Title I of the ADA prohibits discrimination “against a

qualified individual on the basis of disability in regard to . . .

[the] privileges of employment.” 42 U.S.C. § 12112(a)

(emphasis added). Thus the first question we must resolve is

whether Castle, an inmate required to work under Arizona

law, had an employment relationship with Eurofresh within

the meaning of the ADA.

The ADA defines an “employee” as “an individual

employed by an employer.” 42 U.S.C. § 12111(4). All

parties agree that Eurofresh is an “employer” under the

ADA.8 But the parties vigorously dispute whether Castle was

“employed” by Eurofresh. While this specific issue appears

to be one of first impression under the ADA, we do not write

on a wholly blank slate: we, as well as a number of our sister

circuits, have previouslyconsidered whether prisoners should

be treated as “employees” under various other federal

statutes.9

 

8

See 42 U.S.C. § 12111(5)(A).

9

See, e.g., Hale, 993 F.2d at 1395 (prisoner is not an employee under

the Fair Labor Standards Act (FLSA)); Morgan v. MacDonald, 41 F.3d

1291, 1293 (9th Cir. 1994) (same); Alexander v. Sara, Inc., 721 F.2d 149,

150 (5th Cir. 1983) (per curiam) (same); Coupar v. Dep’t of Labor,

105 F.3d 1263, 1267 (9th Cir. 1997) (prisoner not an employee within the

meaning of the whistleblower provisions of the Clean Air Act and the
CASTLE V. EUROFRESH, INC. 11

The leading case in our circuit is our en banc decision in

Hale, 993 F.2d 1387. There, we addressed whether certain

Arizona state prisoners were “employees” within the meaning

of the FLSA. Id. at 1389–90. Like the plaintiff in this case,

the appellants in Hale participated in labor programs

administered by ACI for the purpose of implementing

Arizona’s requirement that all able-bodied prisoners perform

hard labor.10 Id. We concluded that the appellants were not

“‘employees’ of the prison entitled to be paid a minimum

wage under the FLSA.” Id. at 1395.

In reaching our holding in Hale, we first acknowledged

the “general rule” that we must consider the “economic

reality” of a labor relationship when determining whether it

is an employment relationship under federal law. Id. at

1393–94. In this circuit, we typically evaluate the “economic

reality” of a labor relationship by considering the factors laid

out in Bonnette v. California Health and Welfare Agency,

704 F.2d 1465 (9th Cir. 1983).11In Hale, however, we

determined that the Bonnette factors “are not a useful

Toxic Substances Control Act); Williams v. Meese, 926 F.2d 994, 997

(10th Cir. 1991) (prisoner not an employee under Title VII or the Age

Discrimination in Employment Act). But see Baker v. McNeil Island

Corr. Ctr., 859 F.2d 124, 128 (9th Cir. 1988) (prisoner potentially an

employee under Title VII); Carter v. Dutchess Comm. Coll., 735 F.2d 8,

14 (2d Cir. 1984) (prisoner may be an employee under FLSA).

10 The appellants in Hale worked for ARCOR Enterprises, ACI’s

predecessor entity. See Hale, 993 F.3d at 1389.

11 Those factors include “whether the alleged employer has the power to

hire and fire the employees, supervises and controls employee work

schedules or conditions of employment, determines the rate and method

of payment, and maintains employment records.” Hale, 993 F.3d at 1394

(citing Bonnette, 704 F.2d at 1470).
12 CASTLE V. EUROFRESH, INC.

framework in the case of prisoners who work for a prisonstructured program because they have to.” Hale, 993 F.2d at

1394; see also Vanskike v. Peters, 974 F.2d 806, 809 (7th Cir.

1992) (noting that the Bonnette factors are useful where “it is

clear that some entity is an ‘employer’ and the question is

which one,” but not where the question is more basic: can

prisoners “plausibly be said to be ‘employed’ in the relevant

sense at all”). We concluded that “[r]egardless of how the

Bonnette factors balance . . . the economic reality of the

relationship between the worker and the entity for which

work was performed lies in the relationship between prison

and prisoner. It is penological, not pecuniary.” Hale,

993 F.2d at 1394–95; see also Gilbreath v. Cutter Biological,

Inc., 931 F.2d 1320, 1331 (9th Cir. 1991) (Rymer, J.

concurring) (reasoning that “inmate labor belongs to the

institution”).

A few years after Hale, in Coupar v. Department of

Labor, 105 F.3d 1263 (9th Cir. 1997), we once again had the

opportunity to consider a prisoner’s employment status under

federal law. Douglas Coupar was a federal inmate obligated

to work as a condition of his sentence. Id. at 1264. Coupar

filed environmental complaints against the government

corporation where he worked, claiming that he subsequently

faced discrimination in violation of the whistleblower

provisions of the Clean Air Act and the Toxic Substances
CASTLE V. EUROFRESH, INC. 13

Control Act.12Id. We found that Coupar was not protected

by either statute. Id.

Coupar relied on Baker v. McNeil Island Corrections

Center, 859 F.2d 124 (9th Cir. 1988), to argue that he was an

employee for the purposes of obtaining whistleblower

protection. Coupar, 105 F.3d at 1266. In Baker, we left open

the possibility that a prisoner could state a claim for

employment discrimination under Title VII, and remanded to

the district court for further findings regarding the precise

labor relationship between the plaintiff and his jailors. See

Baker, 859 F.2d at 128 (holding that it was not “beyond doubt

that no set of facts could be proven to entitle Baker to relief”). 

The plaintiff in Baker, however, had not alleged that the

position he sought was “one that fulfilled a prison work

requirement.” Coupar, 105 F.3d at 1266. Coupar, on the

other hand, was obligated to work—just like the plaintiffs in

Hale. We found this to be the crucial fact that

“differentiate[d] Baker from Coupar’s case.” Id. 

Consequently, we held that where an inmate is obligated to

work at some job pursuant to a prison work program, “[t]hat

fact [alone] brings him within the rule of Hale.” Id. at 1265.

Like the plaintiff in Coupar, Castle cites Baker for the

proposition that he should be treated as Eurofresh’s employee

under the ADA. But as we did with the plaintiff in Coupar,

we must reject Castle’s claim: Castle “was obligated to work

12 Those provisions state that “[n]o employer may discharge any

employee or otherwise discriminate against any employee with respect to

. . . compensation, terms, conditions, or privileges of employment”

because the employee engages in protected activities related to the

enforcement of the Acts. 15 U.S.C. § 2622(a) (Toxic Substances Control

Act); 42 U.S.C. § 7622(a) (Clean Air Act).
14 CASTLE V. EUROFRESH, INC.

at some job pursuant to a prison work program,” id., and this

fact alone brings Castle’s claims within the rule of Hale.

13

Baker is inapposite.

We are equally unpersuaded byCastle’s other attempts to

distinguish this case from Hale and Coupar. For example,

Castle notes that he worked for a private corporation, while

the plaintiffs in Hale and Coupar toiled for governmentcontrolled entities. Castle further argues that one of the

supporting rationales for the Hale decision is not present here,

because the purpose of the ADA is different than that of the

FLSA.14 While these distinctions have some substance, they

are ultimately irrelevant. Coupar identifies one factor that

triggers application of the Hale rule—an inmate’s legal

obligation to work. That factor is indisputably present in this

case. The absence of other elements, therefore, has no

bearing on Castle’s standing under the ADA. Castle is not

Eurofresh’s employee under the ADA because his labor

belongs to the State of Arizona, which put him to work at

Eurofresh in order to comply with its statutory obligations. 

See Hale, 993 F.2d at 1395; Coupar, 105 F.3d at 1267.

13 Castle argues that he did not “work for a prison-structured program

because he had to,” and notes that he had a choice whether or not to work

for Eurofresh. This argument misses the mark. While Castle did not have

to work for Eurofresh specifically, he was nevertheless obligated to work

for some prison-structured labor program. See Ariz. Rev. Stat. § 31-

251(A). In any event, we rejected the same argument in Coupar. See

Coupar, 105 F.3d at 1265. (“Although Coupar did not have to work for

FPI in particular, as an inmate he was obligated to work at some job

pursuant to a prison work program.”).

14 In Hale, we noted that the primary concern of the FLSA—ensuring

laborers’ minimum standards of living—“does not apply to prisoners, for

whom clothing, shelter, and food are provided by the prison.” Hale,

993 F.2d at 1396.
CASTLE V. EUROFRESH, INC. 15

II. Castle’s RA Claim Against Eurofresh

“The Rehabilitation Act is materially identical to and the

model for the ADA, except that it is limited to programs that

receive federal financial assistance . . . .” Armstrong v. Davis,

275 F.3d 849, 862 n.17 (9th Cir. 2001) (internal quotations

omitted), abrogated on other grounds by Johnson v.

California, 543 U.S. 499, 504–05 (2005); see also Gilstrap v.

United Air Lines, Inc., 709 F.3d 995, 999 (9th Cir. 2013). 

The district court dismissed Castle’s RA claim against

Eurofresh because it concluded that Castle could not

plausibly allege that Eurofresh received federal financial

assistance, either directly or indirectly. We find no error in

the district court’s conclusion.

In United States Department of Transportation v.

Paralyzed Veterans of America, the Supreme Court held that

Congress intended to strictly limit the scope of the RA solely

“to those who actually ‘receive’ federal financial assistance.” 

477 U.S. 597, 605 (1986), superseded by statute on other

grounds, Air Carrier Access Act of 1986, Pub. L. No. 99-435

(1986). The Court explained that “[b]y limiting coverage to

recipients, Congress imposes the obligations of § 504 upon

those who are in a position to accept or reject those

obligations as a part of the decision whether or not to

‘receive’ federal funds.” Id. at 606 (emphases added); see

also Greater L.A. Council on Deafness, Inc., v. Zolin,

812 F.2d 1103, 1111 (9th Cir. 1987) (recognizing that the RA

“does not prohibit discrimination against the handicapped as

such; it simply bars the use of federal funds to support

programs or activities that so discriminate”). Consequently,

while those who affirmatively choose to receive federal aid

may be held liable under the RA, liability will “not extend as

far as those who benefit from it,” because application of
16 CASTLE V. EUROFRESH, INC.

§ 504 to all who benefit economically from federal assistance

would yield almost “limitless coverage.” Paralyzed

Veterans, 477 U.S. at 607–08.

Castle argues that Eurofresh is the indirect recipient of

federal financial assistance. Specifically,Castle contends that

ACI is a direct recipient of federal financial assistance, and

that Eurofresh indirectly receives federal financial assistance

through its contract with ACI, which provides that ACI, and

not Eurofresh, will paySocial Security and Medicare taxes on

the wages of Eurofresh’s prison laborers. These allegations

are insufficient to survive a motion to dismiss.

First, it is unclear what connection, if any, exists between

ACI’s receipt of federal funds and its decision to assume

responsibility for the federal tax liabilities related to

Eurofresh’s use of prison laborers. But even if such a

connection exists, it is not enough to establish Eurofresh’s

liability under the RA. To state a claim, Castle must do more

than simply show that Eurofresh benefits from federal

monies—he must show that Eurofresh has affirmatively

chosen to “provid[e] employment for the handicapped as a

quid pro quo for the receipt of federal funds.” Id. at 605; see

also Nat’l Collegiate Athletic Ass’n v. Smith, 525 U.S. 459,

468 (1999). This Castle has not done. Indeed, Castle has

presented no evidence that Eurofresh affirmatively chose to

receive federal monies, and in so doing accepted the

concomitant responsibilities of complying with certain

federal mandates, such as those contained in the RA. See

Paralyzed Veterans, 477 U.S. at 605 (placing substantial

emphasis on the “contractual nature of the receipt of federal

moneys”). Nor has Castle plausibly alleged that Eurofresh is

the intended recipient of federal funds, and that ACI is a

“mere conduit[] of the aid to its intended recipient[].” Id. at
CASTLE V. EUROFRESH, INC. 17

607. Because Castle has not alleged facts which plausibly

demonstrate that Eurofresh receives federal financial

assistance, Castle’s RA claim against Eurofresh was properly

dismissed.

III. Castle’s ADA and RA Claims Against the State

Defendants

We next consider the potential liability of the State

Defendants. The State Defendants may be liable under Title

II of the ADA even though Eurofresh may not be sued under

Title I. See, e.g., Disabled Rights Action Comm. v. Las Vegas

Events, Inc., 375 F.3d 861, 883–84 (9th Cir. 2004) (noting

that plaintiffs often sue multiple defendants under separate

titles of the ADA); Johnson v. City of Saline, 151 F.3d 564,

571–72 (6th Cir. 1998) (“Even though the [private]

businesses may be subject to Title III of the ADA . . . the city

is simultaneously subject to Title II because it is a landlord.”). 

Moreover, unlike Eurofresh, the State Defendants cannot

plausibly deny that they receive federal financial assistance,

and thus they are obligated to comply with the RA.

The State Defendants concede, as they must, that Title II

applies to the operation of state prisons. See Penn. Dep’t of

Corr. v. Yeskey, 524 U.S. 206, 213 (1998) (“[T]he plain text

of Title II of the ADA unambiguously extends to state prison

inmates.”). Consequently, State Defendants must ensure that

disabled prisoners are not discriminated against with regard

to the provision of “the benefits of [their] services, programs,

or activities” on account of a prisoner’s disability. 42 U.S.C.

§ 12132; see also Yeskey, 524 U.S. at 210 (finding that prison

vocational programs are “benefits” of a public entity). 

Nevertheless, the State Defendants contend that Title II does

not apply in this case, because “[the State Defendants] had no
18 CASTLE V. EUROFRESH, INC.

authority to determine which jobs or job duties were available

to inmates at Eurofresh, nor could they overturn [Eurofresh’s]

decision to refuse a request for a job modification.” The State

Defendants are mistaken.

In Armstrong v. Schwarzenegger, 622 F.3d 1058,

1065–67 (9th Cir. 2010), we rejected the State of California’s

argument that it could not be held liable for ADA violations

committed by county jails that were housing state prisoners

pursuant to contracts with the state. We found it wholly

irrelevant that the ADA violations occurred at county jails,

rather than at state prisons under California’s immediate

control. Rather, we clarified that Title II’s obligations apply

to public entities regardless of how those entities chose to

provide or operate their programs and benefits. See id. at

1065 (“[A] public entity, in providing any aid, benefit, or

service, may not, directly or through contractual, licensing,

or other arrangements, discriminate against individuals with

disabilities.” (quoting 28 C.F.R. § 35.130(b)(1)) (emphasis

added)).

The State Defendants admit that ACI contracts with

Eurofresh to provide “benefits” to state inmates, including

paid labor and vocational training. The State Defendants are

free to enter into such contracts, and likely reap numerous

benefits from such arrangements. But one benefit State

Defendants may not harvest is immunity for ADA violations:

State Defendants are obligated to ensure that Eurofresh—like

all other State contractors—complies with federal laws

prohibiting discrimination on the basis of disability.

15

See

15 We note with interest that while State Defendants disclaim this

obligation on appeal, ACI’s contract with Eurofresh explicitly requires

Eurofresh to complywith all federal and state employment laws, including
CASTLE V. EUROFRESH, INC. 19

Armstrong, 622 F.3d at 1065–67; see also Henrietta D. v.

Bloomberg, 331 F.3d 261, 286 (2d Cir. 2003) (“All

governmental activities of public entities are covered, even if

they are carried out by contractors. For example, a State is

obligated by [T]itle II to ensure that the services, programs,

and activities of a State park inn operated under contract by

a private entity are in compliance with [T]itle II’s

requirements.”) (citation omitted)). The same principle

applies to RA violations committed by contractors. 

Henrietta D., 331 F.3d at 286 (holding that a state is “liable

to guarantee that those it delegates to carry out its programs

satisfy the terms of its promised performance, including

compliance with the Rehabilitation Act”). The law is

clear—the State Defendants may not contract away their

obligation to comply with federal discrimination laws.

Nevertheless, we cannot determine on this record whether

a violation actually occurred in this case. Federal law

requires public entities to “make reasonable modifications in

policies, practices, or procedures when the modifications are

necessary to avoid discrimination on the basis of disability,

unless the public entity can demonstrate that making the

modifications would fundamentally alter the nature of the

service, program, or activity.” 28 C.F.R. § 35.130(b)(7). 

Determining whether a modification is reasonable (or even

required) is necessarily a fact-specific inquiry, requiring

“analysis of the disabled individual’s circumstances and the

accommodations that might allow him to meet the program’s

the ADA. In district court, Castle alleged that ACI breached its contract

for failing to comply with such statutes. The court dismissed this claim,

reasoning that Castle had not alleged elements necessary to establish

himself as a third-party beneficiary. Castle does not object to that

dismissal on appeal and we express no opinion on the matter.
20 CASTLE V. EUROFRESH, INC.

standards.” Wong v. Regents of Univ. of Cal., 192 F.3d 807,

818 (9th Cir. 1999). Specifically in the prison context, we

have held that a district court may consider “with deference

to the expert views of facility administrators, a detention or

correctional facility’s legitimate interests (namely, in

maintaining security and order and operating an institution in

a manageable fashion) when determining whether a given

accommodation is reasonable.” Pierce v. Cnty. of Orange,

526 F.3d 1190, 1217 (9th Cir. 2008) (citations and internal

quotation marks omitted).

Likely because the district court erroneously concluded

that the State Defendants are not liable under either Title II or

the RA, the court made insufficient findings regarding

whether a reasonable modification was made. Instead, the

district court simply concluded without analysis that Castle’s

reassignment to a different job in the WIPP program was

reasonable. While that may ultimately be correct, where the

district court makes no findings regarding the reasonableness

of a proposed modification or accommodation, we must

remand to the district court to perform the necessary analysis. 

See McGary v. City of Portland, 386 F.3d 1259, 1270 (9th

Cir. 2004) (citing Crowder v. Kitagawa, 81 F.3d 1480, 1485

(9th Cir. 1996)).

CONCLUSION

Castle’s claims against Eurofresh were properlydismissed

because Castle and Eurofresh were not in an employment

relationship, and Eurofresh does not receive federal financial

assistance. However, judgment was improperly granted to

the State Defendants. The State Defendants are liable for

disability discrimination committed by a contractor. We
CASTLE V. EUROFRESH, INC. 21

consequently remand to the district court to determine in the

first instance whether such discrimination occurred.

Each party shall be responsible for its own costs on

appeal. Fed. R. App. P. 39(a)(4).

AFFIRMED IN PART, REVERSED IN PART, AND

REMANDED.

BERZON, Circuit Judge, concurring:

I concur in Part II and Part III of the majority opinion, and

also, reluctantly, in Part I.

Part I holds Castle not an employee under Title I of the

Americans with Disabilities Act (“ADA”). 42 U.S.C.

§§ 12111(4), 12112(a). The sweep of Hale v. Arizona,

993 F.2d 1387 (9th Cir. 1993), and Coupar v. Department of

Labor, 105 F.3d 1263 (9th Cir. 1997), compels that

conclusion. But the notion that prisoners who work for

covered employers can never be “employees” for purposes of

federal employee-protective statutes undermines those

statutes as applied to employees generally and misconstrues

the reach of the “employee” designation.

Castle labored for a private employer, off prison grounds,

under compulsion of a sentence requiring work. Hale, by

contrast, concerned prison labor that shared only the latter

two of these three characteristics, and so did not expressly

decide the employee status of prisoners working on behalf of

private employers. Hale, 993 F.2d at 1390. That distinction,

I would like to think, matters: A profit-seeking firm that
22 CASTLE V. EUROFRESH, INC.

hires convicts at its own worksite should not be shielded from

the costs of compliance with the ADA. Those costs can be

substantial, as the ADA requires employers to make

“reasonable accommodation,” allowing disabled employees

to complete a job’s “essential functions,” 42 U.S.C.

§§ 12111(8), 12112(a), unless such accommodation “would

impose an undue hardship” on the employer’s business,

42 U.S.C. §§ 12112(b)(5)(A). Permitting private employers

to escape those costs while profiting from the use of prison

labor markets undermines the enforcement of the statutory

requirements generally, by creating incentives for competing

employers to shirk compliance with regard to non-prison

labor—and therebyeconomicallydisadvantaging competitors

of those employers using prison labor.

Precedent, however, forecloses consideration of such

concerns when deciding whether prison laborers are covered

by federal statutes protecting employees. Hale proclaimed

broadly that the usual standard for evaluating employee

status—the economic reality test described by Bonnette v.

California Health & Welfare Agency, 704 F.2d 1465, 1470

(9th Cir. 1983)—is inapplicable “in the case of prisoners who

work for a prison-structured [labor] program because they

have to.” Hale, 993 F.2d at 1394. In that circumstance, we

held, “the economic reality of the relationship between the

worker and the entity for which work was performed lies in

the relationship between prison and prisoner. It is

penological, not pecuniary.” Id. at 1395. In other words, “the

economic reality is that [prisoner] labor belong[s] to the

institution.” Id.

Hale recognized the problem of unfair competition

through the use of prison labor. But it viewed the AshurstSumners Act, 18 U.S.C. §§ 1761–1762, as Congress’ entire
CASTLE V. EUROFRESH, INC. 23

response to the adverse effects of “unfair competition in the

products market from prison-made goods.” Hale, 993 F.2d

at 1397. That Act criminalizes the distribution of prisonermade products in interstate commerce, 18 U.S.C. § 1761(a),

with exceptions for certain classes of goods, 18 U.S.C.

§ 1761(b)–(c), including agricultural commodities, 18 U.S.C.

§ 1761(b). But it does not reimburse firms not employing

prison labor, or the workers at such firms, for the bottom-line

impact (through intrastate sales and services or sales and

services of excepted products) of the cost-savings achieved

by ignoring federal employee protection for prison laborers. 

Mandatory labor may be “penological, not pecuniary,” for

prisoners and their jailers. Hale, 993 F.2d at 1395. But it is

assuredly a matter of dollars and cents to firms seeking profit

in a competitive market and law-abiding citizens vying to

work for them.

Hale’s broad language is all the more disturbing because

that case concerned prisoner wages under the Fair Labor

Standards Act (“FLSA”), 29 U.S.C. § 201 et seq., not the

ADA. The FLSA regulates matters that are, on their face,

pecuniary. Williamson v. Gen. Dynamics Corp., 208 F.3d

1144, 1154 (9th Cir. 2000) (“[T]he Supreme Court and the

Ninth Circuit have consistently found that the central purpose

of the FLSA is to enact minimum wage and maximum hour

provisions designed to protect employees.”). The ADA, by

contrast, prohibits discrimination, with an eye toward the

“conditions . . . of employment,” 42 U.S.C. § 12112(a)

(emphasis added). “[T]he mere fact of discrimination offends

the dignitary interest that the statute[ is] designed to protect,

regardless of whether the discrimination worked any direct

economic harm to the plaintiffs.” Shaver v. Indep. Stave Co.,

350 F.3d 716, 724 (8th Cir. 2003). The non-pecuniary

character of prison labor thus tells us little about the
24 CASTLE V. EUROFRESH, INC.

applicability of the ADA, which addresses non-economic

harms. Indeed, habituating prisoners to the sort of

discrimination that Congress has outlawed elsewhere in the

economy hardly rehabilitates them to our national norms or

prepares them to participate in the workforce once released. 

See Hale, 993 F.2d at 1398 (listing rehabilitative goals of

hard labor); City of S. Tuscon v. Indus. Comm’n of Ariz.,

753 P.2d 1199, 1205 (Ariz. Ct. App. 1988) (same).

Yet our primary case interpreting Hale rejects this

commonsense distinction between purely economic employee

protections and protections with a dignitary aspect. Coupar

applied Hale to a prisoner seeking the protection of the antiretaliation provisions of the Clean Air Act, 42 U.S.C.

§ 7622(a), and the Toxic Substances Control Act, 15 U.S.C.

§ 2622(a), notwithstanding the non-pecuniary policies that

animate those Acts. See Coupar, 105 F.3d at 1265. It

reasoned that Congress “extend[ed] whistleblower protection

only to ‘employees,’” and not “retaliation by any violator

against any whistleblower.” Id. at 1266 (emphasis in

original). A prisoner “obligated to work at some job pursuant

to a prison work program” falls “within the rule of Hale,” no

matter the policies the statute addresses, when that statute

applies to “employees.” Id. at 1265.

Like the whistleblower protections in Coupar, the

protections of the ADA’s Title I run only to “employees.” 

42 U.S.C. §§ 12111(4), 12112(a). Given Coupar’s gloss on

Hale, I cannot avoid the conclusion that Castle is not an

“employee.” Consequently, although I would support

reconsideration of Hale, or at least of Coupar’s reading of

Hale, I concur in the majority’s application of those cases to

this one.
CASTLE V. EUROFRESH, INC. 25

As today’s opinion demonstrates, however, Castle—and

the commonsense congressional policies he seeks to

vindicate—is not without recourse. Because his jailers

cannot contract away their obligations under Title II of the

ADA, the majority holds them liable for any violation of

Castle’s right to accommodation under the ADA. See Maj.

Op. Part III. To the extent the state passes along any such

liability—and the costs of avoiding it in the future by

accommodating disabled employees—to the private

employers with whom it contracts, today’s holding will also

dampen the competitive advantages of hiring convict labor.

Other anti-discrimination statutes might be amenable to

a similar solution to the problem our cases have created. 

Many violations of Title VII, for example, may be actionable

against the prison authorities under 42 U.S.C. § 1983. Cf.

Williams v. Meese, 926 F.2d 994, 998 (10th Cir. 1991)

(observing that a federal prisoner may be able to bring a

Bivens action if prison officials “discriminate against him on

the basis of his age, race, or handicap, in choosing whether to

assign him a job or in choosing what job to assign him”).

This observation, along with the majority’s Title II

holding, somewhat reduces my concern about the adverse

consequences of today’s rulings—but only if the prison’s

ADA responsibilities are fully met. To meet their ADA Title

II obligations, prison officials cannot simply provide some

job to disabled prisoners, at whatever rate of pay and

whatever working conditions. Rather, Title II requires “that

persons with disabilities have the opportunity to receive the

same benefits as non-disabled” people who are similarly

situated, Castellano v. City of New York, 142 F.3d 58, 70

(2d Cir. 1998), so long as such opportunity can be provided

via “‘reasonable modifications’ that would not fundamentally
26 CASTLE V. EUROFRESH, INC.

alter the nature of the service provided,” Tennessee v. Lane,

541 U.S. 509, 532 (2004). That means, to me, that, if the

prison is going to farm out prison labor to offsite private

employers, at higher pay and a more favorable location than

are available to prisoners within the prison’s walls, the prison

must ensure that the ADA standards are met with regard to

that opportunity.

With those observations, I concur in the opinion.