Hale v. State of Ariz.
| Citation | 993 F.2d 1387 |
| Decision Date | 04 May 1993 |
| Docket Number | 89-15162,Nos. 88-15785,s. 88-15785 |
| Parties | , 125 Lab.Cas. P 35,819, 1 Wage & Hour Cas.2d (BNA) 601 Felton HALE and Richard S. Berry, Plaintiffs-Appellants, v. STATE OF ARIZONA; ARCOR Enterprises, a subdivision of the state; James Ricketts, former director of the Arizona Department of Corrections (DOC); Samuel Lewis, director of the DOC; Marilyn Wilkens, director of Arizona Correctional Industries; Thomas Lescault, director of ARCOR; Tony West, David Tierney, Earl Cobb, Thomas Donnelly, Henry Evans, Marcus Englemen, Delbert Householder, and Ray Shaffer, members of the Board of Directors, ARCOR Enterprises, Defendants-Appellees. John Leroy FULLER, et al., Plaintiffs-Appellants, v. STATE OF ARIZONA; ARCOR Enterprises, a subdivision of the state; James Ricketts, former director of the Arizona Department of Corrections (DOC); Samuel Lewis, director of the DOC; Marilyn Wilkens, director of Arizona Correctional Industries; Thomas Lescault, director of ARCOR; Tony West, David Tierney, Earl Cobb, Thomas Donnelly, Henry Evans, Marcus Englemen, Delbert Householder, and Ray Shaffer, members of the Board of Directors, ARCOR Enterprises; Richard Orberg, ARCOR Vice President of Operations; Kenneth Van De Veer, ARCOR Vice President of Business and Finance; John F. Wright, former interim CEO, ARCOR; James Kinsella, former ARCOR Vice President of Business and Finance; Gilbert Evans, former ARCOR director of operations; Ralph Cluff, ARCOR operations and control officer; Michael Ullery, former interim ARCOR operations and control officer, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (9th Circuit) |
Michael E. St. George, St. George and Reed, Tempe, AZ, for plaintiffs-appellants.
Anthony B. Ching, Sol. Gen., State of Ariz., Phoenix, AZ, for defendants-appellees.
Appeal from the United States District Court for the District of Arizona.
Before: BROWNING, SCHROEDER, FLETCHER, ALARCON, POOLE, NORRIS, BRUNETTI, NOONAN, LEAVY, RYMER, and T.G. NELSON, Circuit Judges.
Felton Hale, John Leroy Fuller and other inmates in Arizona correctional facilities who have worked for state prison industries programs seek to be paid the federal minimum wage on the ground that they are "employees" of the prison under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201, et seq. They filed complaints against the State of Arizona, ARCOR Enterprises (ARCOR) and its successor Arizona Correctional Industries (ACI), and officials of the Arizona Department of Corrections (DOC), ARCOR, and ACI for damages and injunctive relief under the FLSA, 42 U.S.C. § 1983, and Arizona law. The district court in Hale granted summary judgment in favor of all defendants because it found no employer-employee relationship under the FLSA and no jurisdiction over state claims or retrospective federal claims because of the Eleventh Amendment. The district court in Fuller dismissed all claims for lack of jurisdiction except the § 1983 claim for injunctive relief against state officers; as to it, the district court retained jurisdiction but stayed further proceedings pending resolution of this appeal. The prisoners do not pursue their state law claims. 1
This appeal requires us to decide whether the FLSA applies to prisoners, whether the inmates here are "employees" who are entitled to be paid a minimum wage under the FLSA, and whether the prisoners have identified a property interest that is protected under the due process clause and gives rise to a claim under 42 U.S.C. § 1983. We must also determine to what extent the prisoners' claims are barred by the Eleventh Amendment.
We consider these questions en banc to resolve the tension between our decision in Gilbreath v. Cutter Biological, Inc., 931 F.2d 1320 (9th Cir.1991), and the panel opinion in this case, Hale v. Arizona, 967 F.2d 1356 (9th Cir.1992). In Gilbreath, we held that prisoners working within the prison for a private plasma treatment center were not "employees" of Cutter, which ran the lab. 2 The panel in these consolidated appeals held that prisoners working for a state prison industries program and for a prisoner-owned enterprise within that program were "employees" of the state under the FLSA. 3 While we do not believe that prisoners are categorically excluded from the FLSA, we hold that the inmates in this case, who worked for programs structured by the prison pursuant to the state's requirement that prisoners work at hard labor, are not "employees" of the state within the meaning of the FLSA. The Eleventh Amendment affords no immunity to the state from suit for violations of the FLSA; however, the state is not a "person" within § 1983 and the Eleventh Amendment shields its officials from claims for damages under § 1983. As there is no factual basis for the injunctive relief sought in Hale, we affirm both decisions.
Arizona prisoners are required by statute to "engage in hard labor for not less than The prison labor program in Hale, also offered through ARCOR, allows the establishment of an Inmate-Operated Business Enterprise (IOBE). The IOBE program permits an inmate to organize and operate a business under ARCOR supervision. ARCOR retains a portion of IOBE gross sales to pay for utilities and collects a monthly rent. Inmate wages are paid to ARCOR, which makes disbursements to inmate workers out of the ARCOR revolving fund. Berry, the only Hale plaintiff who appeals, worked as a bookkeeper and office manager for C/A Buckles, an IOBE enterprise which made and sold western and logo belt buckles to various entities including the United States Marine Corps, Mountain Bell, U-Haul, and Speed-O-Fam in London, England. ARCOR leased space for the business, outside the prison walls, to the inmate-owner. C/A Buckles employed a dozen inmates, exhibited and sent catalogs to prospective buyers, and shipped hundreds of buckles monthly. 6
forty hours per week." 4 Ariz.Rev.Stat. § 31-251(A). Pursuant to this requirement, Arizona prison authorities have structured various programs for convict labor, including the two programs involved in this case. The Fuller inmates worked for ARCOR (known as ACI since 1987), which is organized pursuant to Ariz.Rev.Stat. §§ 41-1621 et seq. and operated by the Department of Corrections. ARCOR sets up and supervises "industries or enterprises ... for the employment of prisoners in the manufacture ... of such ... products as may be needed ... by a state ... or for sale to the public." Ariz.Rev.Stat. § 41-1622. Ten to twenty percent of Arizona prisoners work for the ARCOR correctional industries program, whose goods and services include clothing, fabricated steel, livestock, dairy products, and hotel reservations for Best Western motels. Revenue from ARCOR enterprises is placed in a revolving fund, and ARCOR pays the inmates who work for it out of that fund. See Ariz.Rev.Stat. § 41-1624. 5
We have jurisdiction over these appeals under 28 U.S.C. § 1291. The district court in Hale entered summary judgment as to all claims. The district court in Fuller dismissed all claims except the claim for prospective relief under 42 U.S.C. § 1983, over which it retained jurisdiction. The court found no just reason for delay and entered final judgment on the remaining claims, which suffices to make its order final and appealable under Fed.R.Civ.P. 54(b). See Continental Airlines v. Goodyear Tire & Rubber Co., 819 F.2d 1519, 1524-25 (9th Cir.1987) (). Thus, we have jurisdiction over all claims in these matters except the § 1983 claim for prospective relief in Fuller.
The Fuller appellees contend that the notice of appeal in that case does not "specify the party or parties taking the appeal" as required by Fed.R.App.P. 3(c) and that this court therefore lacks appellate jurisdiction as to all parties except John Leroy Fuller. We disagree. All plaintiffs in the Fuller action were consolidated pursuant to court order. The notice of appeal in Fuller refers in its caption to "JOHN LEROY FULLER Plaintiffs" and in its text to "plaintiff consolidated in the captioned cause." In Gilbreath, we construed substantially identical language as adequately identifying consolidated plaintiffs We review de novo a district court's grant of either a motion for summary judgment or a motion to dismiss. Kruso v. International Tel. & Tel. Corp., 872 F.2d 1416, 1421 (9th Cir.1989), cert. denied, 496 U.S. 937, 110 S.Ct. 3217, 110 L.Ed.2d 664 (1990). In reviewing the summary judgment in Hale, we determine, viewing the evidence in the light most favorable to the non-moving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989). When reviewing dismissal of the Fuller complaint, we examine the allegations of the complaint and determine whether there is any set of facts which could entitle the plaintiffs to the relief they seek. Buckey v. County of Los Angeles, 968 F.2d 791, 794 (9th Cir.), cert. denied, City of Manhattan Beach v. Buckey, --- U.S. ----, 113 S.Ct. 599, 121 L.Ed.2d 536 (1992).
on appeal. See id., 931 F.2d at 1322-23. The notice of appeal here is similarly sufficient
We must first resolve Arizona's argument that the Eleventh Amendment bars a suit under the FLSA against a state or its employees. It contends that amendments which extended FLSA coverage to state employees did not abrogate the states' Eleventh Amendment immunity. Arizona further argues that the power of the federal government to subject the states to regulation does not extend to subjecting a state to the jurisdiction of the federal courts.
Congress has the power under the Commerce Clause to annul a state's Eleventh Amendment immunity. See ...
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