Dismas Charities, Inc. v. U.S. Dept. of Justice, 03-6502.

Citation401 F.3d 666
Decision Date11 March 2005
Docket NumberNo. 03-6502.,03-6502.
PartiesDISMAS CHARITIES, INC., Plaintiff-Appellant, v. UNITED STATES DEPARTMENT OF JUSTICE, Federal Bureau of Prisons, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

ARGUED: James R. Adams, Frost, Brown & Todd, Cincinnati, Ohio, for Appellant. Michael E. Robinson, United States Department of Justice, Washington, D.C., for Appellee. ON BRIEF: David S. Kaplan, Sheryl G. Snyder, Frost, Brown & Todd, Louisville, Kentucky, for Appellant. Michael E. Robinson, Michael Jay Singer, United States Department of Justice, Washington, D.C., for Appellee.

Before: SILER, BATCHELDER, and ROGERS, Circuit Judges.

OPINION

ROGERS, Circuit Judge.

Dismas Charities, Inc. appeals the district court's dismissal of its challenge to a Bureau of Prisons policy that reduced the number of federal prisoners eligible to serve all or part of their sentences in a community correction center. Dismas's interests do not fall within the zone of interests protected by the primary basis for their challenge to the policy, 18 U.S.C. § 3621(b). Moreover, while Dismas does have standing under the notice and comment requirements for informal rulemaking contained in § 553 of the Administrative Procedure Act ("APA"), its alternative claim brought under that section fails as a matter of law. Accordingly, we affirm.

I. Introduction

Dismas Charities, Inc. ("Dismas") filed suit on March 10, 2003, seeking declaratory and injunctive relief against the Bureau of Prisons ("BOP"). The controversy stems from a recent change in the BOP's interpretation of 18 U.S.C. § 3621(b), which governs the BOP's assignment of federal prisoners. The new interpretation curtails the circumstances in which federal prisoners are eligible to serve all or part of their sentences in a community correction center ("CCC").1 Dismas alleges that the new interpretation of § 3621(b) is arbitrary and capricious, and that before changing its interpretation of § 3621(b), the BOP failed to abide by the notice and comment provisions contained in § 553 of the Administrative Procedure Act.2 The district court dismissed Dismas's claims, finding that Dismas was not within the zone of interests protected by § 3621(b), and therefore lacked standing. Dismas appeals the dismissal, arguing that its mission and ;values are within the zone of interests protected by § 3621(b).

We affirm the district court's judgment. Dismas lacks standing under § 3621(b) because it is not within the zone of interests sought to be protected by Congress when enacting the statute. Although this does not dispose of Dismas's claim under § 553 of the APA, for which Dismas does have standing, the latter claim fails because the APA does not require notice and comment in the circumstances alleged in this case.

II. Background

Dismas Charities, Inc. is a nonprofit corporation that owns and operates eighteen CCCs in seven states. The majority of Dismas CCCs house only federal inmates. CCCs, such as Dismas, provide an alternative to traditional incarceration and attempt to facilitate the successful transition of prisoners back into society. While in a CCC, offenders must obtain employment, pay fines, restitution, child support, and subsistence, establish a budget, save money, and, if applicable, seek treatment of substance abuse and mental health issues, as well as attend classes in life skills, anger management, and wellness.

The Department of Justice's Bureau of Prisons chooses which inmates are sent to Dismas facilities. Before the change in policy, Dismas received two types of inmates — those on the "front end" of their sentences and those on the "back end." Front end placements usually involve offenders with relatively short sentences who serve their entire sentence at the CCC. Back end designations, by contrast, involve prisoners who have served the majority of their sentences in prison, but are sent to a CCC for a time before their release in order to provide transition of the offender back into society.

18 U.S.C. § 3621(b) grants the BOP discretion to designate a prisoner's place of incarceration in "any available penal or correctional facility that meets minimum standards of health and habitability...." On March 25, 1992, the Department of Justice's Office of Legal Counsel ("OLC") issued an opinion that interpreted § 3621(b) to allow the BOP unlimited authority to place prisoners in any appropriate facility for incarceration, including those operated by the private sector. 16 Op. Off. Legal Counsel 65, 67 (1992).

On December 13, 2002, however, the OLC changed its interpretation of § 3621(b). Op. Off. Legal Counsel, slip. op., 2002 WL 31940146 (December 13, 2002). The OLC determined first that U.S.S.G. § 5C1.1 did not permit the BOP to substitute confinement in a CCC for a minimum term of imprisonment imposed under that guideline. The OLC also concluded that § 3621(b) does not give the BOP general authority to place an offender in community confinement from the outset of his sentence or to transfer the offender from prison to community confinement at any time the BOP chooses during the course of the offender's sentence. Instead, under the new interpretation of § 3621(b), front end placements are not authorized and back end offenders are only eligible for confinement in CCCs for the lesser of (i) ten percent of their sentence or (ii) six months — periods specifically authorized by 18 U.S.C. § 3624(c) (2000). The OLC reasoned that, while § 3621(b) gave the BOP the discretion to choose an inmate's place of imprisonment generally, a CCC did not constitute a place of imprisonment for purposes of that section. Op. Off. Legal Counsel, 2002 WL 31940146 (December 13, 2002). Instead, the OLC determined that the authority to transfer a prisoner to a CCC came solely from § 3624(c), which limits the time a prisoner may spend in a CCC to "a reasonable part, not to exceed six months, of the last 10 per centum of the term." Id.

Shortly after the 2002 OLC opinion was issued, a memorandum written by Deputy Attorney General Larry Thompson instructed the BOP to transfer all offenders residing in CCCs with more than 150 days remaining on their sentence to a traditional prison facility because the use of CCCs was "unlawful." Memorandum of Deputy Attorney General Larry D. Thompson, December 16, 2002, at 1. The operative language of the Thompson memorandum is as follows:

OLC has now issued a formal opinion finding that BOP's policy is unlawful. Accordingly, BOP immediately should take all steps necessary to ensure that its sentencing placement decisions are in full compliance with the governing law. In addition, BOP should transfer to an actual prison facility all federal offenders currently residing in a CCC who, as of today, have more than 150 days remaining on the imprisonment component of their sentence. BOP shall give at least 30 days written notice to each such offender prior to the transfer.

Id. The Thompson memorandum proceeded to describe the conclusions of the OLC memorandum. Id. at 1-2. The Thompson memorandum concluded by explaining that a concern regarding the BOP's previous CCC placement policy was its "potentially disproportionate, and inappropriately favorable, impact on so-called `white-collar' criminals." Id. at 2-3.

On December 20, 2000 the Director of the BOP issued a memorandum to all federal judges stating that the BOP would no longer honor judicial recommendations to place inmates in CCCs for the imprisonment portions of their sentences. Memorandum of BOP Director Kathleen Hawk Sawyer, December 20, 2002, at 1. "Effective immediately, this practice will no longer be followed. The Bureau will not use CCCs as a substitute for imprisonment." Id. The memorandum explained briefly:

This procedure change follows recent guidance from the U.S. Department of Justice's Office of Legal Counsel (OLC), finding that the term "community confinement" is not synonymous with "imprisonment." OLC has determined that the Bureau's practice of using CCCs as a substitute for imprisonment contravenes well-established caselaw, and is inconsistent with U.S.S.G. § 5C1.1.

Id.

The change in the interpretation of § 3621(b) has had a severe impact on Dismas. For example, in the time period between January 2001 and May 2003, the number of front end offenders housed at CCCs operated by Dismas was drastically reduced, resulting in a revenue loss of $467,315. The number of back end prisoners was also reduced, resulting in a loss of revenue of $121, 351. In addition, the BOP cancelled the designations of many back end prisoners from January to May 2003 for an additional loss of $625,933 in revenue. All told, the lost revenue amounted to $1,214,599. Dismas further argues that the BOP instruction interferes with its ability to help prisoners adjust to life outside prison, contending that offenders need at least 90-120 days in a CCC to adjust to outside life. Under the new policy, only people sentenced to imprisonment for 60 months or more can benefit from six months in a CCC, and many prisoners with sentences of less than 60 months would not be able to stay at a CCC for the necessary 120 days.

III. Standing

Dismas argues that the BOP's new interpretation of § 3621(b) is unlawful because the new interpretation was arbitrary and capricious, and because the BOP did not comport with the notice and comment requirements for informal rulemaking contained in § 553 of the APA. The district court did not reach the merits of these claims; instead, it dismissed the suit after finding that Dismas lacked standing.

We review de novo a district court's decision to dismiss a case for lack of standing. Courtney v. Smith, 297 F.3d 455, 459 (6th Cir.2002). "`For purposes of ruling on a motion to dismiss for lack of standing, a complaint must be viewed in the light most favorable to the plaintiff; all material allegations of the...

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