Court Opinion

ID: 2967325
Source: CourtListenerOpinion
Date Created: 2015-09-22 02:21:35.115971+00
Date Added: 2024-06-11T11:43:13.262397
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

WILLIAM F. WASHLEFSKE,                
               Plaintiff-Appellant,
                 v.
                                                  No. 99-7321
ANDREW J. WINSTON; RONALD J.
ANGELONE,
             Defendants-Appellees.
                                      
           Appeal from the United States District Court
          for the Eastern District of Virginia, at Norfolk.
                 Rebecca B. Smith, District Judge.
                           (CA-98-1466)

                      Argued: September 29, 2000

                      Decided: December 6, 2000

 Before WIDENER, NIEMEYER, and TRAXLER, Circuit Judges.

Affirmed by published opinion. Judge Niemeyer wrote the opinion,
in which Judge Traxler joined. Judge Widener wrote a concurring
opinion.

                             COUNSEL

ARGUED: Neal Lawrence Walters, UNIVERSITY OF VIRGINIA
SCHOOL OF LAW APPELLATE LITIGATION CLINIC, Char-
lottesville, Virginia, for Appellant. Mark Ralph Davis, Senior Assis-
tant Attorney General, Criminal Law Division, OFFICE OF THE
ATTORNEY GENERAL, Richmond, Virginia, for Appellees. ON
2                       WASHLEFSKE v. WINSTON
BRIEF: Terry McGarrity, Third Year Law Student, UNIVERSITY
OF VIRGINIA SCHOOL OF LAW APPELLATE LITIGATION
CLINIC, Charlottesville, Virginia, for Appellant. Mark L. Earley,
Attorney General, Criminal Law Division, OFFICE OF THE
ATTORNEY GENERAL, Richmond, Virginia, for Appellees.

                               OPINION

NIEMEYER, Circuit Judge:

   We are presented with the important question of whether William
Washlefske, an inmate in the custody of the Virginia Department of
Corrections, was deprived of his private property without just com-
pensation in violation of the Fifth Amendment’s Takings Clause
when Virginia expended the interest earned from Washlefske’s prison
accounts for the general benefit of inmates under the State’s care.
This question is one of first impression in this circuit. The district
court concluded that although Washlefske had a property interest in
the interest earned on his prison accounts, an unconstitutional taking
did not occur because Washlefske voluntarily chose to place his funds
in the accounts and because he received the benefits of the State’s
expenditure of the interest.1

   We affirm the judgment of the district court, but we do so for dif-
ferent reasons. Because Washlefske’s limited right to the funds in his
prison accounts does not derive from any traditional principle of com-
mon law but from a Virginia statute, he was not deprived of any prop-
erty, for the purposes of a Takings Clause analysis, when the
Department of Corrections followed the dictates of that statute in
using the interest generated from these accounts. In reaching this con-
clusion, we recognize the unfortunate conflict we create with the
    1
    Three other decisions in the Eastern District of Virginia have resolved
similar claims against prisoners using substantially the same reasoning
relied upon by the lower court in this case. See Chalmers v. Winston, 95
F. Supp. 2d 536, 542-45 (E.D. Va. 2000); Gilreath v. Winston, No.
3:98CV757, slip op. at 6-13 (E.D. Va. Mar. 16, 2000); Titus v. Winston,
No. 2:98CV1428, slip op. at 6-10 (E.D. Va. Jan. 5, 2000).
                       WASHLEFSKE v. WINSTON                         3
Ninth Circuit in Schneider v. California Department of Corrections,
151 F.3d 1194 (9th Cir. 1998), in which the court held, without con-
ducting an inquiry under traditional principles of property law, that a
convicted felon enjoyed a private property interest in the funds held
in his prison account.

                                   I

   Washlefske was committed to the custody of the Virginia Depart-
ment of Corrections in 1992 and has since been confined by the
Department at the Powhatan Correctional Center. For labor performed
while in prison, Washlefske "earns" an average of $108.76 each
month, which is credited to his "spend account." He maintains an
average monthly closing balance in this account of $67.05. He also
has a $25 standing balance in his "hold account," which is maintained
to provide him a discharge allowance. These accounts are created and
maintained pursuant to the terms of Virginia statutes and regulations.

   According to Virginia law, inmates under the jurisdiction of the
Department of Corrections receive an allowance for each day of labor
performed in a manner satisfactory to State officials. See Va. Code
Ann. §§ 53.1-42, 53.1-43. As the parties acknowledged at oral argu-
ment, inmates receive approximately $.90 per hour. The amounts
credited to each inmate accumulate in a "spend account" maintained
by the State Board of Corrections and may be drawn upon by the
inmate for purposes authorized by the Board. The inmates may use
the funds in their "spend accounts" to purchase items from the prison
commissary or from approved outside sources. They may also have
funds sent outside the prison to designated persons, to be invested for
the prisoners’ benefit in interest-bearing accounts. Amounts that the
inmates do not spend while incarcerated are given to them when they
are discharged, provided that they have served at least eight months.
See Va. Code Ann. § 53.1-190. While in prison, however, the inmates
are not given any cash, but enjoy only a right to draw upon these
funds to purchase a limited number of approved items. Cash in Vir-
ginia prisons is contraband. See Hanvey v. Blankenship, 631 F.2d 296,
297 (4th Cir. 1980) (per curiam); Va. Code Ann. § 53.1-26.

   Pursuant to regulations promulgated by the State Board of Correc-
tions, ten percent of an inmate’s allowance is placed in a "hold
4                      WASHLEFSKE v. WINSTON
account" until $25 accumulates. See State Bd. of Corrections Policy
No. 20-7.1. This sum is held until the inmate is discharged, and only
then is it paid to him. See Va. Code Ann. § 53.1-190. And if $25 does
not accumulate in this account, each prisoner is nevertheless given a
minimum of $25 upon his discharge from prison, paid from Depart-
ment of Corrections funds. See id.

   The funds in the "spend" and "hold" accounts of all prisoners are
pooled, and those amounts that are not needed to meet the immediate
requests of prisoners are invested at the discretion of the Director of
the Department of Corrections. See Va. Code Ann. § 53.1-44. Income
earned in this pooled account "may be used by the Director for the
benefit of the prisoners under his care." Id. At Powhatan Correctional
Center, where Washlefske is incarcerated, this income has been used
to purchase library books, newspaper and magazine subscriptions,
exercise equipment, items for family visiting day, and other "extras."

   During 1998, the pooled account containing funds from all Depart-
ment of Correction facilities produced income for Powhatan Correc-
tional Center in the amount of $5,479.45. The Powhatan Correctional
Center also earned an average of $59.86 of interest per month on its
own checking account maintained with "spend" and "hold" account
funds held to address the day-to-day requests of inmates.

   Washlefske commenced this action in December 1998 under 42
U.S.C. § 1983, alleging that the State’s use of interest income derived
from his "spend" and "hold" accounts without just compensation to
him violates the Takings Clause of the Fifth Amendment as applied
to the States through the Fourteenth Amendment. He requested a
declaratory judgment that the State’s use of his interest income vio-
lated his Constitutional rights, restitution of interest taken, and an
injunction requiring the State to credit his accounts with any interest
earned in the future.

   On cross motions for summary judgment, the district court entered
judgment in favor of the State. See Washlefske v. Winston, 60 F.
Supp. 2d 534, 543 (E.D. Va. 1999). The court ruled that although
Washlefske had a property interest in the interest earned on his prison
accounts, the State’s actions did not result in an unconstitutional tak-
ing because (1) Washlefske "voluntarily cho[se] to place funds in the
                       WASHLEFSKE v. WINSTON                          5
accounts administered by the prison," and (2) he received just com-
pensation in the form of benefits from the items that the Department
of Corrections purchased with the income from the pooled funds. Id.

  This appeal followed.

                                   II

    At the outset, we review our jurisdiction to consider whether
Washlefske’s Takings Clause claim is sufficiently ripe for federal
judicial consideration under 42 U.S.C. § 1983. Ripeness in this con-
text does not refer to Article III’s "case or controversy" requirement,
for that is plainly satisfied here: Washlefske claims that money
belonging to him was taken from his prison accounts. The conduct
Washlefske challenges is undisputed and arises from an ongoing
application of Virginia statutes. Rather, the question is one of pruden-
tial ripeness — whether we should exercise federal jurisdiction. See
Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. 725, 733 n.7
(1997). This issue springs from the decision in Williamson County
Regional Planning Commission v. Hamilton Bank, 473 U.S. 172
(1985), where the Supreme Court held that a landowner’s claim —
that State land-use regulations as applied to him had effected an
uncompensated taking of his property — was premature and, there-
fore, not yet ripe for consideration in federal court. The Supreme
Court reasoned that because the State agencies had not yet "arrived
at a definitive position on the issue that inflicts an actual, concrete
injury," Williamson County, 473 U.S. at 193, there had been no final
decision on the nature and impact of the State’s actions, and the plain-
tiff’s injury in fact was too uncertain to satisfy the requirements of
prudential ripeness. In Suitum, however, the "final decision" require-
ment of Williamson County was found to have been satisfied when
the state regulatory process had come to an end and the landowner
had to take no further administrative steps to obtain the state’s final
position. "The demand for finality [was] satisfied by Suitum’s claim,
. . . there being no question there about how the ‘regulations at issue
[apply] to the particular land in question.’" Suitum, 520 U.S. at 739
(quoting Williamson County, 473 U.S. at 191) (second alteration in
original).

   In this case, the finality of the State’s position has not been ques-
tioned; the statute’s language is clear and its impact upon Washlefske
6                       WASHLEFSKE v. WINSTON
is uncontroverted. According to Washlefske’s complaint, he claims a
property interest in the principal in his prison accounts and, as an inci-
dent thereto, a property interest in the interest earned on that princi-
pal. Not only is the State’s use of the interest uncontroverted, but also
its amount is readily calculable, more than satisfying the Supreme
Court’s prudential ripeness requirements. Cf. Suitum, 520 U.S. at 740-
42 (finding claim ripe when value of property taken had not been
determined, but the right to the property was certain); see also Duke
Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S. 59, 71 n.15
(1978) (noting that the Declaratory Judgment Act authorizes a federal
suit declaring a taking unconstitutional "before potentially uncompen-
sable damages are sustained"); Eastern Enterprises v. Apfel, 524 U.S.
498, 521 (1998) (plurality opinion) (noting that prudential ripeness is
not applicable where "the challenged statute, rather than burdening
real or physical property, requires a direct transfer of funds to the
government"); In re Chateaugay Corp., 53 F.3d 478, 493 (2d Cir.
1995) (finding declaratory judgment action for unconstitutionality of
government takings ripe when only money has been taken). The only
question to be determined therefore is the legality of the State’s pro-
gram. If we were, in this circumstance, to require Washlefske to file
his claim first in a Virginia court, we would be transforming William-
son County’s finality rule into a rule of exhaustion. This result would
be in diametric opposition to a foundational decision of modern
§ 1983 jurisprudence, Monroe v. Pape, which held that "[t]he federal
remedy is supplementary to the State remedy, and the latter need not
be first sought and refused before the federal one is invoked." 365
U.S. 167, 183 (1961).

   It is not surprising, therefore, that the Supreme Court, when faced
with a similar claim that had reached an identical state of maturity as
the claim before us, exercised jurisdiction over the claim without
expressing any reservation that jurisdiction was proper. See Phillips
v. Washington Legal Found., 524 U.S. 156, 172 (1998) (holding that
clients had a protected property interest in the interest in their attor-
neys’ trust accounts). As a Supreme Court plurality observed in East-
ern Enterprises, "‘while we are not bound by previous exercises of
jurisdiction in cases in which our power to act was not questioned but
was passed sub silentio, neither should we disregard the implications
of an exercise of judicial authority assumed to be proper’ in previous
                        WASHLEFSKE v. WINSTON                          7
cases." 520 U.S. at 522 (quoting Brown Shoe Co. v. United States,
370 U.S. 294, 307 (1962)).

   We therefore conclude that Washlefske’s Taking Clause claim is
sufficiently mature, defined, and immediate to be ripe for consider-
ation within our jurisdiction.

                                   III

   The Takings Clause of the Fifth Amendment provides, "nor shall
private property be taken for public use, without just compensation,"
and this limitation on governmental power has been imposed on the
States through the Fourteenth Amendment, see Phillips, 524 U.S. at
163; Chicago, Burlington & Quincy R.R. v. Chicago, 166 U.S. 226,
239 (1897). The Takings Clause protects private property; it does not
create it. See Phillips, 524 U.S. at 164. Thus, in identifying a property
interest so protected, we must look to "existing rules or understand-
ings that stem from an independent source such as state law." Board
of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972). Even
though fundamental principles of State property law may define prop-
erty rights, the Takings Clause nevertheless limits a State’s authority
to redefine preexisting property rights. Thus, "a State, by ipse dixit,
may not transform private property into public property without com-
pensation," Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S.
155, 164 (1980), nor can it "sidestep the Takings Clause by disavow-
ing traditional property interests long recognized under state law,"
Phillips, 524 U.S. at 167.

   In short, we look outside the Takings Clause to traditional rules of
property law to determine whether a constitutionally protected prop-
erty interest exists, and only when a State, through legislation, rule,
decision, or other action deprives an owner of such an interest, must
it provide just compensation. But, if a statute creates a property right
not previously recognized or one broader than that traditionally
understood to exist, the property interest so created is defined by the
statute and may be withdrawn so long as the State affords due process
in doing so. See Goldberg v. Kelly, 397 U.S. 254, 262 n.8 (1970)
(observing that constitutional restraints apply to withdrawal of wel-
fare rights, which "[i]t may be realistic today to regard . . . more like
‘property’ than a ‘gratuity’"); see also Zinermon v. Birch, 494 U.S.
8                      WASHLEFSKE v. WINSTON
113, 125 (1990) (noting that the deprivation of interests protected by
the procedural component of the Due Process Clause are lawful so
long as the deprivation occurs consistent with the "guarantee of fair
procedure"); Carey v. Piphus, 435 U.S. 247, 259 (1978) ("Procedural
due process rules are meant to protect persons not from the depriva-
tion, but from the mistaken or unjustified deprivation of life, liberty,
or property").

   Washlefske argues that the Supreme Court’s decision in Phillips
establishes conclusively that because the maxim "interest follows
principal" is a traditional common law rule, the interest generated
from the investment of money constitutes "private property" for pur-
poses of the Takings Clause. See Phillips, 524 U.S. at 172 (holding
that interest on clients’ funds held in attorneys’ trust accounts was
property of the clients). Virginia does not take issue with the proposi-
tion that at common law interest follows principal. It argues more fun-
damentally that Washlefske, as a prisoner, does not enjoy the same
common law property rights in his prison accounts as did the Phillips’
plaintiffs in their attorney trust accounts. Stated otherwise, the State
maintains that the Phillips Court never "intended its conclusion . . .
to translate to the prison environment." The parties’ positions thus
require us to determine the nature and extent of Washlefske’s interest
in his prison accounts.

   To promote Virginia’s important interest in managing its inmate
population and in pursuing rehabilitation efforts, Virginia provides
various work programs, which include prison-sponsored programs,
see Va. Code Ann. § 53.1-41; publicly or privately affiliated pro-
grams in the prisons, see id. § 53.1-45.1; and work-release programs
outside of the prisons, see id. § 53.1-60. The State Board of Correc-
tions believes that its work programs are "beneficial to the successful
adjustment to incarceration by the prisoner and to his ultimate reinte-
gration within the community. In order that prisoners may become
self-sufficient crime-free members of society, participation in these
programs is encouraged by the Board." State Bd. of Corrections Pol-
icy No. 20-7.1. Although private citizens ordinarily have a constitu-
tionally protected property interest in the wages earned from their
labor under employment contracts,2 see Lynch v. United States, 292
    2
   Cf. John Locke, The Second Treatise of Government ¶ 27 (1690)
("[Y]et every man has a property in his own person . . . . The labor of
                        WASHLEFSKE v. WINSTON                           9
U.S. 571, 579 (1934) (holding that valid contract rights are property
that may not be taken by the government without just compensation
under the Fifth Amendment), inmates do not. Inmates can be put to
work without compensation, and such a policy would not violate any
traditional principle of property law. See Ruffin v. Commonwealth, 62
Va. (22 Gratt.) 790, 796 (1871). Indeed, at common law a convicted
felon not only did not have a property right in the product of his work
in prison, but he also forfeited all rights to personal property. See 1
William Blackstone, Commentaries *299; 4 id. *385; see also
Calero-Toledo v. Pierson Yacht Leasing Co., 416 U.S. 663, 682
(1974). The common law is carried forward in Virginia "insofar as it
is not repugnant to the principles of the Bill of Rights and the Consti-
tution of this Commonwealth." Va. Code Ann. § 1-10; see also Cole-
man v. Moody, 14 Va. (4 Hen. & M.) 1 (1809). Thus, under traditional
rules of property law in Virginia, an inmate has no property interest
in any "wages" from his work in prison except insofar as the State
might elect, through statute, to give him rights. Cf. Jennings v. Lom-
bardi, 70 F.3d 994, 995-96 (8th Cir. 1995) (holding that because Mis-
souri law did not create an entitlement to compensation and because
its regulation described prisoner wages as "a positive behavior incen-
tive," the prisoner had no property interest in wages); Hrbek v. Far-
rier, 787 F.2d 414, 415-16 (8th Cir. 1986) (concluding that the pris-
oner had no constitutionally protected property right to full amount of
wages earned while incarcerated).

   In this case, Virginia statutes create limited rights to funds given
to prisoners for work performed while serving their prison terms.
These statutes do not take away any preexisting property right; rather,
they create a limited property right, defined by the terms of the stat-
ute, which do not give him full rights of "possession, control, and dis-
position" over the amounts "earned" and credited to his accounts.
Phillips, 524 U.S. at 170. Thus, Washlefske is credited with pay at the
rate of $.90 per hour, but he is not entitled to have this money paid
to him in cash. He can spend his credits only on items provided in the

his body and the work of his hands, we may say, are properly his. What-
soever then he removes out of the state that nature has provided and left
it in, he has mixed his labor with, and joined to it something that is his
own, and thereby makes it his property").
10                      WASHLEFSKE v. WINSTON
prison’s commissary, and he may direct that funds be sent outside of
prison to designated persons or for the purchase of outside items, but
only subject to the approval of prison authorities. Because Virginia
empowers the Director of the Department of Corrections, in his sole
discretion, to invest portions of the prisoner’s funds in investments for
the benefit of inmates, Washlefske does not enjoy the right to exclude
others from the use of funds credited to his accounts, nor is he entitled
to the interest or other income earned from them. On the contrary, the
right-creating statute vests the right to control such interest or income
in prison authorities, with the limitation that such funds be used for
the benefit of inmates generally. See Va. Code Ann. § 53.1-44.

   In so limiting an inmate’s interest in the funds generated from
prison work and held in prison accounts, the Virginia statutes do not
deprive inmates of any preexisting property rights. To the contrary,
they create limited property rights for penological purposes.

   While it is true that at common law interest follows principal, it
does so only "as a property right incident to the ownership of the
underlying principal." Phillips, 524 U.S. at 168. The holding in Phil-
lips, 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
(noting its 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 (beginning its analysis
with the observation that the "principal sum deposited in the registry
of the law plainly was private property"). Under Virginia law, how-
ever, Washlefske had no traditional private property interest in wages
"earned" for work in prison. Because Washlefske never had a private
property interest in these accounts as defined by common law, but
only an interest defined by statute — a statute that gives him limited
rights to those funds — he cannot claim that a property interest based
on traditional principles of property law was taken. His property inter-
est was that given by statute, and the State never took from him what
was created by statute. Therefore, there was not a taking of private
property as addressed in the Fifth Amendment.

   In reaching this conclusion, we recognize that we reach a result dif-
ferent from that reached by the Ninth Circuit in Schneider v. Califor-
                        WASHLEFSKE v. WINSTON                           11
nia Department of Corrections, 151 F.3d 1194, 1201 (9th Cir. 1998),
in which the court held that inmates have a property interest in the
interest earned on the funds in their prison accounts. The court in
Schneider applied the Phillips rule that interest follows principal, rec-
ognizing interest as a property interest of "common law pedigree" that
a state cannot take without just compensation. Id. at 1201. But the
court never determined who "owned" the principal and to what extent.
We believe that an investigation into that question by the Ninth Cir-
cuit would have produced the same conclusion that we reach today.

  Accordingly, we affirm the judgment of the district court.

                                                             AFFIRMED

WIDENER, Circuit Judge, concurring:

   Although I concur in the result reached in Part II of the opinion of
the panel, and all of the balance of the opinion without reservation,
I write separately to indicate my opinion that there is no discretion
regarding the exercise of jurisdiction to hear this case.

   Ripeness, like other justiciability doctrines, is rooted in the case or
controversy requirement of Article III. See U.S. Const. Art. III, § 2.
Ripeness doctrine addresses whether a dispute has matured to a point
that warrants decision because an actual, concrete injury has occurred.
See Wright, Miller & Cooper, Federal Practice and Procedure:
Jurisdiction 2d, § 3532, at 112 (Supp. 2000). In my opinion, there is
no question but that the dispute addressed in this decision is ripe.

   In Williamson County Reg’l Planning Comm’n v. Hamilton Bank,
the Court held that a regulatory takings claim under the Fifth Amend-
ment is premature until the state has failed to provide adequate com-
pensation. See 473 U.S. 172, 186, 194-95 (1985). In this regard, the
Court stated, "[A] claim that the application of government regula-
tions effects a taking of a property interest is not ripe until the govern-
ment entity charged with implementing the regulations has reached a
final decision regarding the application of the regulations to the prop-
erty at issue." Williamson County, 473 U.S. at 186 (emphasis added).
12                      WASHLEFSKE v. WINSTON
   In this case, Washlefske claims he is injured by the ongoing appli-
cation of a Virginia law that contravenes a right to interest earned on
his prison account. The statute’s terms make it clear that interest does
not necessarily accrue to the prisoners’ accounts, thus satisfying the
final decision requirement in Williamson County. See Va. Code Ann.
§ 53.1-44 (2000) ("Any income or increment of increase received
from the bonds or investments may be used by the Director for the
benefit of the prisoners under his care."). No additional state proceed-
ings are necessary to establish that prisoners are not, in fact, entitled
to any amount of interest on their prison accounts. And the fact that
the State has taken the interest leaves no remaining question as to how
the statute is applied. See Suitum v. Tahoe Reg’l Planning Agency,
520 U.S. 725, 739 (1997) (holding that demand for finality was satis-
fied because there were no remaining questions about how the regula-
tions at issue applied). Because the Virginia statute is clear that
prisoners are not entitled to interest earned on their prison accounts,
and any such interest has been disposed of by the State, I think juris-
diction to hear the case attached, and its exercise was not discretion-
ary. Cf. Phillips v. Washington Legal Found., 524 U.S. 156, 160-63
(1998) (exercising jurisdiction over takings claim with similar proce-
dural history and similar factual background without discussing Wil-
liamson County ripeness inquiry).