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Ninth Circuit: Freezing Prisoner’s Funds Requires Pre-deprivation Process

Prison officials must provide a pre-deprivation hearing before freezing substantial prisoner assets, the Ninth Circuit Court of Appeals held on April 6, 2015.

Under Oregon’s “pay-to-stay” law, prisoners are fully liable for their incarceration costs. The Oregon Department of Corrections (ODOC) calculates the incarceration cost by multiplying the daily cost of care by the number of days a prisoner is incarcerated. Cost of care is determined by dividing the ODOC’s budget – excluding some items – by its prisoner population.

Before collecting incarceration costs, prison officials must consider the prisoner’s ability to pay and “need for funds for personal support after release.” OAR 291-203-0040(5). Collection may be waived in “the best interest of the inmate or the department.” OAR 291-203-0080.

Lester Shinault was incarcerated from May 19, 2005 until February 5, 2007, and from October 23, 2008 to August 14, 2009. During his second sentence, Shinault settled a medical product liability lawsuit for $107,416.48.

The suit was unrelated to Shinault’s imprisonment, but ODOC officials quickly took interest after the settlement check was deposited in his prison trust account.

Shinault’s daily incarceration cost was $77.78, before increasing to $83.55 on July 1, 2009. The ODOC issued an order on May 29, 2009 that required Shinault to pay $65,353.94 for his current and previous periods of incarceration.

In response to Shinault’s request for a hearing, the ODOC transferred $65,353.94 from his trust account into a “reserved miscellaneous” sub-account, blocking him from accessing or using those funds.

The ODOC did not serve Shinault with its filings or exhibits until the morning of the October 23, 2009 hearing. He was denied a continuance or opportunity to retain another attorney after his lawyer withdrew before the hearing, and an Administrative Law Judge ordered him to pay the reduced amount of $61,352.39.

Shinault then filed suit in federal court, alleging several constitutional violations. The district court granted summary judgment to the defendants on all claims, and he appealed.

Relying on Quick v. Jones, 754 F.2d 1521 (9th Cir. 1985), the Ninth Circuit noted there is no question that prisoners have a protected liberty interest in their prison trust accounts. A “state must provide a hearing prior to freezing a significant sum in the inmate’s account,” the Court of Appeals held. Accordingly, “Shinault received insufficient due process as a result of Oregon’s actions.”

The ODOC was not required to “provide each inmate with a formal, judicial-like hearing prior to freezing inmate accounts,” the appellate court clarified. “Neither do we observe that the administrative hearing that preceded the withdrawal of Shinault’s funds was deficient, apart from the process afforded prior to freezing his assets. Rather, prior to such a freeze, Oregon must give notice and provide a meaningful opportunity to object.”

Despite finding the ODOC had violated Shinault’s due process rights, the Ninth Circuit held the defendants were entitled to qualified immunity because the law was not clearly established at the time, since “numerous material differences distinguish [the ruling in] Quick.” The district court’s judgment was therefore affirmed, and the ODOC was allowed to keep the $61,352.39 it had removed from Shinault’s prison trust account. See: Shinault v. Hawks, 782 F.3d 1053 (9th Cir. 2015), cert. denied. 

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Related legal case

Shinault v. Hawks