Hatfield v. Scott

• Decision Date: 11 September 2002
• Docket Number: No. 01-11364.,01-11364.
• Parties: Gary Lee Hatfield; et al., Plaintiffs, Gary Lee Hatfield, Plaintiff-Appellee, v. Wayne SCOTT, etc.; et al., Defendants, Wayne Scott, Executive Director Texas Department of Criminal Justice, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 223

306 F.3d 223

Gary Lee Hatfield; et al., Plaintiffs Gary Lee Hatfield, Plaintiff-Appellee, v. Wayne SCOTT, etc.; et al., Defendants Wayne Scott, Executive Director Texas Department of Criminal Justice, Defendant-Appellant.

No. 01-11364.

United States Court of Appeals, Fifth Circuit.

September 11, 2002.

Larry Spain (argued), Texas Tech University, School of Law, Lubbock, TX, for Plaintiff-Appellee.

Charles Kenneth Eldred (argued), Susan M. Stith, Asst. Atty. Gen., Austin, TX, for Defendant-Appellant.

Appeal from the United States District Court for the Northern District of Texas.

Before JOLLY, DeMOSS and PARKER, Circuit Judges.

ROBERT M. PARKER, Circuit Judge:

Appellant Wayne Scott appeals the district court's denial of his motion for summary judgment. We reverse and remand.

I. Background.

Appellee Gary Lee Hatfield is an inmate of the Texas Department of Criminal Justice ("TDCJ") who, as a prisoner since September 1997, opened an inmate trust account to be able to make purchases in the prison commissary. Inmates are not allowed to carry cash for that purpose, or any other.

These individual trust accounts are centrally managed by TDCJ's Inmate Trust Fund Department. They are used solely for the purpose of allowing inmates to make commissary purchases and are funded by the periodic deposit of money by the inmate's arrangement. The accounts are not intended to be a substitute for a savings account at a financial institution. Before opening an account, an inmate is informed that no interest is paid to the inmate on the account and that by depositing funds into an account controlled by the Inmate Trust Fund Department, they and their depositors agree to abide by the rules governing the establishment of the account.

Inmates are not required to open an account. Inmates who do open an account are encouraged to only keep a sufficient balance in it to cover their day-to-day commissary expenses. Those who keep an excessive balance are cautioned via their monthly account statements that interest is not paid on trust fund account balances and that they should consider depositing excess funds in a savings account of their choice. Those few inmates who keep an account balance of $1000 or more receive a specific notice quarterly.

The inmate trust fund was established under TDCJ Administrative Directive 14.62, as authorized under TEX. GOV'T CODE § 501.014. Under the terms of the fund, interest accruing to the fund is used to offset the cost of maintaining the consolidated accounts. If excess interest is earned above the cost of maintenance, it is invested in United States Treasury bills and any interest earned is appropriated to TDCJ to partially fund the cost to operate the Inmate Trust Fund Department. For the year ending August 31, 2001, however, only $199,438.59 was earned in interest on the consolidated account, which totaled $11,606,800, and the fees assessed on the TDCJ to maintain the account amounted to $228,627.25. The cost of operating the Inmate Trust Fund Department was $871,971 and the interest earned on the already-accrued Treasury bills was only $738,839.68. Individual inmates are not charged any fee to maintain their own trust fund accounts. Without such accounts, inmates would be unable to purchase the items that the TDCJ makes available in the commissary on a day-to-day basis.

Hatfield sued the TDCJ and Scott under 42 U.S.C. § 1983 for a violation of the Takings Clause of the Fifth Amendment because interest is not paid to his account. Scott moved for summary judgment on Eleventh Amendment immunity grounds in September 2000.

On September 20, 2001, the district court issued a brief Order denying Scott's motion for summary judgment "because genuine issues of material fact remain and Respondent Scott has failed to demonstrate that he is entitled to judgment as a matter of law." A similar lawsuit by another prisoner, Billy Ray Cinnamon, was consolidated with Hatfield's at the same time. Scott then filed this interlocutory appeal.

II. Jurisdiction.

We first must determine whether we have jurisdiction to consider this interlocutory appeal. Ordinarily, denial of a summary judgment motion does not provide grounds for federal appellate review under 28 U.S.C. § 1291 because it is not a final judgment. Palmer v. Johnson, 193 F.3d 346, 350 (5th Cir.1999). A district court's denial of qualified immunity on a motion for summary judgment is immediately appealable under the collateral order doctrine, however, if it is based on an issue of law. Palmer, 193 F.3d at 350 (citing Johnson v. Jones, 515 U.S. 304, 115 S.Ct. 2151, 132 L.Ed.2d 238 (1995) and Mitchell v. Forsyth, 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985)). If the denial is based on a genuine issue of material fact, it is not appealable. Palmer, 193 F.3d at 351; Naylor v. State of Louisiana, Dep't of Corrections, 123 F.3d 855, 857 (5th Cir. 1997)(per curiam).

Regardless, appellate review of an issue of law is not precluded because the district court determined that there are also genuine issues of fact. "[T]o the extent that a district court order denying qualified immunity determines an issue of law, such an order is appealable in spite of the existence of genuine issues of material fact." Naylor, 123 F.3d at 857 (citing Behrens v. Pelletier, 516 U.S. 299, 313, 116 S.Ct. 834, 133 L.Ed.2d 773 (1996); Coleman v. Houston Independent School District, 113 F.3d 528, 531 (5th Cir.1997)). When reviewing the purely legal question of whether the plaintiff alleges a violation of a clearly established right of which a reasonable person would have known, "we can review the materiality of any factual disputes, but not their genuineness." Wagner v. Bay City, 227 F.3d 316, 320 (5th Cir.2000)(emphasis in original). "In making this legal determination on the materiality of the facts at issue, we review the complaint and record to determine whether, assuming that all of [Plaintiff's] factual assertions are true, those facts are materially sufficient to establish that defendants acted in an objectively unreasonable manner." Chiu v. Plano Indep. Sch. Dist., 260 F.3d 330, 341 (5th Cir.2001).

Hatfield argues that we are limited to determining whether the district court properly denied qualified immunity to Scott without addressing the merits of the case. Under the framework just set forth, we must review the facts of the case as they apply to a determination under law whether there was a violation of some constitutional or statutory right fueling Hatfield's claim.

The district court did not file a memorandum opinion providing its analysis of Scott's motion for summary judgment. The court did, however, file an order that stated in full:

The Court has considered Respondent Scott's Motion for Summary Judgment and finds that it should be denied in all things because genuine issues of material fact remain and Respondent Scott has failed to demonstrate that he is entitled to judgment as a matter of law.

See Hatfield v. Scott, No. 5:99-CV-200-C (N.D.Tex. Sept. 20, 2001). Scott argues that Hatfield does not have a property interest in the interest on his Inmate Trust Account, that using the interest in the manner that TDCJ uses it does not violate the Takings Clause of the Fifth Amendment, and that Hatfield is compensated for such use, all as a matter of law. To the extent that the district court considered those issues of law when deciding Scott's motion for summary judgment, we may examine whether there existed a violation of Hatfield's constitutional rights, while reviewing the materiality of the facts in the record. Therefore, we hold jurisdiction over this appeal.

III. Standard of Review.

We review de novo a district court's denial of a summary judgment motion, including those ruling on claims of qualified immunity. Chiu, 260 F.3d at 342. We do not apply the same FED.R.CIV.P. 56(c) standard as the district court because we do not determine whether the record establishes genuine factual issues. Compare Wagner, 227 F.3d at 320 (review of materiality of factual issues is permitted, but not their genuineness), supra, with Walker v. Thompson, 214 F.3d 615, 624 (5th Cir.2000)("summary judgment will be affirmed only when [we are] convinced, after an independent review of the record, that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.")(Internal quotations omitted). The proper inquiry here is whether the district court was correct in determining that the facts alleged by Hatfield were materially sufficient to establish that Scott's conduct was objectively unreasonable in light of the requirements of the Takings Clause of the Fifth Amendment. This inquiry is purely a legal one.

IV. Analysis.

The Fifth Amendment, made applicable to the States through the Fourteenth Amendment, provides that "private property" shall not "be taken for public use, without just compensation." Phillips v. Washington Legal Foundation, 524 U.S. 156, 163-64, 118 S.Ct. 1925, 141 L.Ed.2d 174 (1998). The existence of a property interest is determined not by the Constitution itself, but by reference to "existing rules or understandings that stem from an independent source such as state law." Id. at 154, 118 S.Ct. 1925 (quoting Board of Regents of State Colleges v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972)).

Hatfield relies heavily on Phillips¹ to argue that he has a property interest in the interest attributable to his inmate trust account, which was created under Texas state law.

The [TDCJ] shall take possession of all money that an inmate has on the inmate's person or that is received with the inmate when the inmate arrives at a facility to be admitted to the custody of the department and all money the inmate receives at the department during confinement and shall credit the money to an account created for the inmate. The department may spend money from an inmate account on the written order of...