Court Opinion

ID: 9814663
Source: CourtListenerOpinion
Date Created: 2023-09-01 00:00:51.420821+00
Date Added: 2024-06-11T15:42:15.456746
License: Public Domain

Case: 22-50634     Document: 00516880021        Page: 1    Date Filed: 08/31/2023

                             REVISED 8/31/2023

           United States Court of Appeals
                for the Fifth Circuit                                United States Court of Appeals
                                                                              Fifth Circuit

                               ____________                                 FILED
                                                                      August 30, 2023
                                No. 22-50634                           Lyle W. Cayce
                               ____________                                 Clerk

   Lana Calhoun,

                                                          Plaintiff—Appellant,

                                      versus

   Bryan Collier; Jennifer Cosby, and her successor in interest;
   Karen Stroleny,

                                           Defendants—Appellees.
                  ______________________________

                  Appeal from the United States District Court
                       for the Western District of Texas
                            USDC No. 6:20-CV-380
                  ______________________________

   Before Wiener, Graves, and Douglas, Circuit Judges.
   James E. Graves, Jr., Circuit Judge:
         The issue before the court is whether Linda Calhoun, an inmate
   incarcerated in Gatesville, Texas, has a right to be heard before the prison
   decides whether to approve or deny her request to transfer money from her
   inmate trust account to an outside bank account. The district court answered
   no and granted summary judgment to the Appellees. We REVERSE.
Case: 22-50634      Document: 00516880021           Page: 2    Date Filed: 08/31/2023

                                     No. 22-50634

                                Factual Background
          When entering the prison facility in Gatesville, Texas, all inmates are
   given a Texas Department of Criminal Justice (“TDCJ”) handbook which
   lays out the rules for transferring money from one offender to another
   through an outside person. Rule AD-14.62, authored by Bryan Collier—the
   executive director of the TDCJ—and not provided to inmates, states that
   offenders shall not provide money to other offenders. The TDCJ handbook
   “encourage[s]” inmates with extra savings “to open a savings account with
   a banking facility of their choice.” However, it also provides that a deposit
   from an offender to another offender, processed through an outside person,
   is a violation of TDCJ rules and will result in an investigation; confirmed
   violations may result in disciplinary action.
          Due to a settlement in a civil matter, Calhoun had an inmate trust fund
   worth nearly $100,000.00. In December of 2019, Calhoun made a suspicious
   withdrawal, and Appellee Jennifer Cosby, a former senior warden, notified
   her that she was under investigation for trafficking and trading by sending
   money to outside persons who were then depositing money to the trust fund
   accounts of other inmates. Shortly after, Calhoun was found guilty of the
   lowest level of rule violation. Calhoun now asserts that, years later, she has
   submitted approximately three or four separate withdrawal requests to
   TDCJ, which were all denied without notice or an opportunity to be heard in
   violation of her procedural due process rights.
                              Procedural Background
          Proceeding pro se, Calhoun filed this suit on May 11, 2020 and filed
   her amended complaint on June 11, 2020. On July 2, 2020, the district court
   dismissed the case for failure to state a claim on the ground that state tort law
   provided a meaningful post-deprivation remedy. On September 13, 2021, this

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   court vacated that judgment, determining Calhoun’s allegations may state a
   procedural due process claim.
          On October 19, 2021, Calhoun retained counsel who filed a notice of
   appearance in the district court. On November 15, 2021, Appellee Bryan
   Collier filed a motion to dismiss, which the court then converted to a motion
   for summary judgment. Following this, on February 14, 2022, all Appellees
   filed a joint motion for summary judgment. On May 26, 2022, the district
   court granted summary judgment to all Appellees and entered a final
   judgment. Shortly thereafter, Calhoun filed a motion for reconsideration
   pursuant to Rule 59(e) and a Rule 15(a) motion for leave to file a second
   amended complaint, which the district court denied. Calhoun timely
   appealed.
                                 Standard of Review
          The standard of review on summary judgment is de novo. Davidson v.
   Fairchild Controls Corp., 882 F.3d 180, 184 (5th Cir. 2018). The court should
   grant summary judgment where there is no genuine dispute of material fact
   “and the movant is entitled to judgment as a matter of law.” Id. (quoting
   FED. R. CIV. P. 56(a)). This court “may affirm [summary judgment] on any
   grounds supported by the record.” McGruder v. Will, 204 F.3d 220, 222 (5th
   Cir. 2000).
                                      Discussion
            I.    The Ex Parte Young exception applies to this case
          Under the Eleventh Amendment, “Federal courts are without
   jurisdiction over suits against a state, a state agency, or a state official in his
   official capacity unless that state has waived its sovereign immunity or
   Congress has clearly abrogated it.” Moore v. Louisiana Bd. of Elementary &
   Secondary Educ., 743 F.3d 959, 963 (5th Cir. 2014). But a relevant exception

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   here exists under Ex parte Young: “a federal court may enjoin a state official
   in his official capacity from taking future actions in furtherance of a state law
   that offends federal law or the federal Constitution.” Moore, 743 F.3d at 963.
   This exception only applies to state officials, and “[w]hether state
   defendants are entitled to sovereign immunity is a question of law, reviewed
   de novo on appeal.” Id.
          While the Ex parte Young doctrine is a “necessary exception to
   Eleventh Amendment immunity,” the “exception is narrow.” Puerto Rico
   Aqueduct & Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 146 (1993). “It
   applies only to prospective relief, does not permit judgments against state
   officers declaring that they violated federal law in the past, and has no
   application in suits against the States and their agencies, which are barred
   regardless of the relief sought” Id. (internal citations omitted). The Ex parte
   Young exception is “focused on cases in which a violation of federal law by a
   state official is ongoing as opposed to cases in which federal law has been
   violated at one time or over a period of time in the past . . . .” Papasan v.
   Allain, 478 U.S. 265, 277–78 (1986); see also Williams ex rel. J.E. v. Reeves,
   954 F.3d 729, 737 (5th Cir. 2020). “Plaintiffs must allege that ‘the defendant
   is violating federal law, not simply that the defendant has done so’ at some
   point in the past[.]” Reeves, 954 F.3d 729, 738 (quoting NiGen Biotech, L.L.C.
   v. Paxton, 804 F.3d 389, 394 (5th Cir. 2015)). However, actual threat of or
   imminent enforcement is “not required.” Air Evac EMS, Inc. v. Texas, Dep’t
   of Ins., Div. of Workers’ Comp., 851 F.3d 507, 519 (5th Cir. 2017).
          Any of Calhoun’s claims seeking declaratory relief based on purported
   constitutional violations occurring in the past, as well as any requests for
   monetary damages, are barred by the Eleventh Amendment. Reeves, 954 F.3d
   at 737; see also Clay v. Texas Women’s Univ., 728 F.2d 714, 715 (5th Cir. 1984)
   (“The [E]leventh [A]mendment clearly interposes a jurisdictional bar to
   suits against a state by private parties who seek monetary relief from the state

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   in the form of compensatory damages, punitive damages, or monetary awards
   in the nature of equitable restitution . . .”). However, her claims to enjoin a
   future action that might violate her constitutional rights may proceed.
   Papasan, 478 U.S. at 277–78.
               II.   Calhoun provides evidence that her procedural due process
                     rights were violated, which precludes summary judgment
           “[E]ven assuming Plaintiff could allege a continuing violation,” the
   district court held that “her claims fail in any event.” Calhoun, 2022 WL
   2823580, at *5. 1 Therefore, the district court denied Calhoun’s Rule 59(e)
   motion as futile. The district court held that “even if Plaintiff were to seek to
   amend her complaint or if the Court assumes that there is a threat that
   Plaintiff will continue to be denied some withdrawals from her account, she
   has failed to show that any such actions are constitutional violations.” Id. at
   *5.
           We disagree with the district court. Calhoun’s proposed second
   amended complaint alleges a continuing constitutional violation. 2 “A § 1983
   action may be brought for a violation of procedural due process. . . . In
   procedural due process claims, the deprivation by state action of a
   constitutionally protected interest in ‘life, liberty, or property’ is not in itself

           _____________________
           1
             We assume without deciding that Calhoun failed to provide enough factual
   evidence regarding an ongoing violation of her rights in her first amended complaint.
           2
             For example, in a supplemental response to the opposition to the summary
   judgment motion, Calhoun attached an affidavit attesting that she had been denied another
   withdrawal request without a hearing during the pendency of the summary judgment
   motion. Lester v. Wells Fargo Bank, N.A., 805 F. App’x 288, 291 (5th Cir. 2020) (“A non-
   conclusory affidavit can create genuine issues of material fact that preclude summary
   judgment, even if the affidavit is self-serving and uncorroborated.”); see also McClendon v.
   United States, 892 F.3d 775, 784 (5th Cir. 2018) (adopting the proposition that a
   “taxpayer’s self-serving and uncorroborated, but not conclusory, statements in an affidavit
   or deposition can create an issue of material fact”).

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   unconstitutional; what is unconstitutional is the deprivation of such an
   interest without due process of law.” Zinermon v. Burch, 494 U.S. 113, 125
   (1990). This type of protection is also referred to as “a guarantee of fair
   procedure.” Id. And it applies here because inmates have a protected
   property interest in the funds in their prison trust fund accounts, entitling
   them to due process with respect to any deprivation of the use of those funds.
   Morris v. Livingston, 739 F.3d 740, 750 (5th Cir. 2014) (“We assume arguendo
   that inmates have a protected property interest in the funds in their prison
   trust fund accounts, entitling them to due process with respect to any
   deprivation of these funds.”); see also Rosin v. Thaler, 417 F. App’x 432, 434
   (5th Cir. 2011) (“A prisoner has a protected property interest in the funds in
   his prison account.”); McCrae v. Hankins, 720 F.2d 863, 869 (5th Cir. 1983)
   (when a prisoner possesses personal property, “they enjoy a protected
   interest in that property that cannot be infringed without due process”),
   abrogated on other grounds by Augustine v. Doe, 740 F.2d 322 (5th Cir. 1984).
          Calhoun argues that she is entitled to an opportunity to be heard when
   she submits requests for withdrawals, but Appellees contend that Calhoun
   had the opportunity to be heard when she was subject to the original
   disciplinary hearing in December of 2019. The district court relied on Morris
   v. Livingston for the proposition that “the Fifth Circuit has implied the
   sufficiency of the due process procedure for inmate trust fund withdrawals”
   and that “the Fifth Circuit held that the prison system may take funds from
   an inmate’s trust fund account for medical care and specifically rejected any
   due process challenges.” Calhoun, 2022 WL 2823580, at *7 (discussing
   Morris, 739 F.3d at 750–51). Morris is distinguishable. As the Morris court
   noted, “Morris’s attack is on the statute itself. . . . He does not attack the
   regulation that the prison adopted . . . or the regulation’s effect on him.” 739
   F.3d at 750. “[B]ecause Morris does not challenge the regulation’s effect on
   him, we are not presented here with any question about . . . how the prison

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   has executed its policy.” Id. at 751 n.13. Before the court here, however, is a
   procedural due process challenge on how the prison has executed its policy.
          Calhoun does not contest that she was provided adequate due process
   during the disciplinary hearing in December of 2019. Appellees are using that
   hearing as a justification for why Calhoun is now not entitled to receive a
   hearing—or any due process—on her withdrawal denials. This cannot be so.
   One instance of providing due process in the past does not justify permanent
   deprivation of an inmate’s opportunity to be heard prior to the decision on a
   future withdrawal request.
          “Due process, as this Court often has said, is a flexible concept that
   varies with the particular situation.” Zinermon, 494 U.S. at 127. To
   determine what procedural protections the Constitution requires in a
   particular case generally requires consideration of three distinct factors:
                 First, the private interest that will be affected by
                 the official action; second, the risk of an
                 erroneous deprivation of such interest through
                 the procedures used, and the probable value, if
                 any, of additional or substitute procedural
                 safeguards; and finally, the Government’s
                 interest, including the function involved and the
                 fiscal and administrative burdens that the
                 additional or substitute procedural requirement
                 would entail.
   Mathews v. Eldridge, 424 U.S. 319, 335 (1976). “Applying this test, the Court
   usually has held that the Constitution requires some kind of a hearing before
   the State deprives a person of liberty or property.” Zinermon, 494 U.S. at 127.
   Calhoun’s property interests are undoubtedly at stake, and, considering the
   evidence that was before the district court, it cannot be said as a matter of law
   that the procedures were adequate, there were alternative safeguards, or that

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   the administrative burden would be too great. It is up to a factfinder to
   determine whether Calhoun can prove her case.
          III.   The court erred in not vacating the judgment and granting
                 Calhoun leave to amend her pleadings
          Calhoun litigated pro se through the first appeal. After remand,
   Calhoun then retained a lawyer about four months before Appellees filed
   their motion for summary judgment and around five months before Calhoun
   filed her opposition to the motion for summary judgment. During this time,
   Calhoun did not file a motion for leave to file a second amended complaint.
   Instead, she waited until after the district court granted Appellees’ summary
   judgment motion and entered final judgment in the case. Then she filed a
   motion for leave to file a second amended complaint and a Rule 59(e) motion
   to alter or amend the district court’s judgment.
                 In this Circuit, when a district court dismisses
                 the complaint, but does not terminate the action
                 altogether, the plaintiff may amend under Rule
                 15(a) with permission of the district court. When
                 a district court dismisses an action and enters a
                 final judgment, however, a plaintiff may request
                 leave to amend only by either appealing the
                 judgment, or seeking to alter or reopen the
                 judgment under Rule 59 or 60.
   Rosenzweig v. Azurix Corp., 332 F.3d 854, 864 (5th Cir. 2003) (internal
   citation omitted). Here, on the same day as issuing its summary judgment
   order, the district court issued a final judgment dismissing the case with
   prejudice. In Dussouy v. Gulf Coast Inv. Corp., the court dealt with a similar
   situation:

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                 In this case, a judgment of dismissal had been
                 entered at the time of the offered amendment.
                 Granting the plaintiff’s motion, therefore, would
                 require the trial court to vacate the judgment. On
                 the day of the judgment, the plaintiff properly
                 moved the court to do so. Where judgment has
                 been entered on the pleadings, a holding that the
                 trial court should have permitted amendment
                 necessarily implies that judgment on the
                 pleadings was inappropriate and that therefore
                 the motion to vacate should have been granted.
                 Thus the disposition of the plaintiff’s motion to
                 vacate under rule 59(e) should be governed by
                 the same considerations controlling the exercise
                 of discretion under rule 15(a). Consequently, our
                 discussion of the motion under rule 15(a) applies
                 equally to the motion under rule 59(e).
   660 F.2d at 596 n.1 (internal citation omitted). In short, “under these
   circumstances, the considerations for a Rule 59(e) motion are governed by
   Rule 15(a)[.]” Rosenzweig, 332 F.3d at 864. As the Court has held,
                 Rule 15(a) declares that leave to amend ‘shall be
                 freely given when justice so requires’; this
                 mandate is to be heeded. If the underlying facts
                 or circumstances relied upon by a plaintiff may
                 be a proper subject of relief, he ought to be
                 afforded an opportunity to test his claim on the
                 merits. In the absence of any apparent or
                 declared reason—such as undue delay, bad faith
                 or dilatory motive on the part of the movant,
                 repeated failure to cure deficiencies by
                 amendments previously allowed, undue
                 prejudice to the opposing party by virtue of
                 allowance of the amendment, futility of
                 amendment, etc.—the leave sought should, as
                 the rules require, be ‘freely given.’

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   Foman v. Davis, 371 U.S. 178, 182 (1962) (internal citation omitted). And as
   this Circuit has held, “A litigant’s failure to assert a claim as soon as he could
   have is properly a factor to be considered in deciding whether to grant leave
   to amend [but] [m]erely because a claim was not presented as promptly as
   possible, however, does not vest the district court with authority to punish
   the litigant.” Carson v. Polley, 689 F.2d 562, 584 (5th Cir. 1982). For example,
   “Amendment can be appropriate as late as trial or even after trial. Instances
   abound in which appellate courts on review have required that leave to amend
   be granted after dismissal or entry of judgment.” Dussouy, 660 F.2d at 598
   (internal citations omitted). While this court reviews the denial of the Rule
   59(e) or 15(a) motions for abuse of discretion—with a bias in favor of granting
   leave to amend—“‘Discretion’ may be a misleading term, for rule 15(a)
   severely restricts the judge’s freedom. . . . Thus, unless there is a substantial
   reason to deny leave to amend, the discretion of the district court is not broad
   enough to permit denial.” Id. at 597–98.
          Calhoun’s counsel could have filed an amended complaint before
   summary judgment, but “[m]erely because a claim was not presented as
   promptly as possible, however, does not vest the district court with authority
   to punish the litigant.” Carson, 689 at 584. As the Court has instructed,
   “leave to amend ‘shall be freely given when justice so requires’; this mandate
   is to be heeded.” Foman, 371 U.S. at 182. Calhoun pleads continuing
   constitutional harms in her second amended complaint, and she provides
   evidence in the form of a recent denial of a withdrawal request without a
   hearing. Considering the law and the allegations laid out in the proposed
   amended complaint, amendment is not necessarily futile. The district court
   erred in not granting Calhoun’s Rule 59(e) motion and permitting her to file
   an amended pleading.

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                                Conclusion
         The judgment is VACATED. The district court is REVERSED as
   to its denial of Calhoun’s Rule 59(e) motion and is directed to docket
   Calhoun’s second amended complaint.

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