Cole et al v. Warren County, Kentucky et al
MEMORANDUM OPINION AND ORDER by Chief Judge Joseph H. McKinley, Jr. on 5/29/2012. For the reasons set forth, IT IS HEREBY ORDERED that SCB Defendants' motion to dismiss (DN 6 ) and County Defendants' motion for summary judgment (DN 7 ) a re GRANTED as to the 42 U.S.C. 1983 claim. The State law claims are DISMISSED without prejudice. Plaintiffs' motion for leave to file surreply (DN 18 ) is GRANTED and was taken into consideration in the Court's decision. Plaintiffs' motion for leave to file an amended class action complaint (DN 21 ) is DENIED. Plaintiffs' motion for leave to file supplemental response to motions to dismiss and for summary judgment (DN 22 ) is DENIED AS MOOT. cc: Counsel (CDF)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
BOWLING GREEN DIVISION
CIVIL ACTION NO. 1:11-CV-00189-JHM
STUART COLE and
WARREN COUNTY, KENTUCKY, et. al.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on Defendants South Central Bank of Bowling Green, Inc.,
Ellen Bale, and Tommy Ross’ motion to dismiss [DN 6], Defendants Warren County, Kentucky,
Mike Buchanon, Jackie T. Strode, Jeff Robbins, Pat Watt, Misse Cooper-Edmonds, and Gayle
Eston’s motion for summary judgment [DN 7], and Plaintiffs Stuart Cole and Loren Patterson’s
motion for leave to file an amended class action complaint [DN 21]. Fully briefed, this matter is ripe
for decision. For the following reasons, the Court GRANTS the Defendants’ motion to dismiss and
motion for summary judgment.
The Plaintiffs, Stuart Cole and Loren Patterson, bring this class action complaint on behalf
of persons lodged in the Warren County Regional Jail (“Jail”), challenging various policies
concerning the seizure of property upon admission into the jail and the assessment of various fees
of incarceration. Plaintiff Cole was arrested for the first time on October 25, 2003 and booked into
the Jail. At the time of his arrest, Cole had a check made payable to him in the amount of $33.00.
The check was taken by the Jail and stamped “For Deposit Only, Warren County Jail, Inmate
Account” and deposited into the South Central Bank Inmate Account and $33.00 was credited to
Cole’s Inmate Canteen Account. Cole was assessed a $20 processing fee and a $20 daily housing
fee. These fees were deducted from Cole’s inmate account. After Cole posted bond and was
released, a $5 bond fee was also charged to his inmate account. At the time of his release, Cole
owed a balance of $12 to the Jail which remained unpaid.
On March 12, 2009, Cole was again arrested and booked into the Jail. This time, Cole had
two checks written to him, one in the amount of $200 and the other in the amount of $59.55. He also
had $4 in cash on him. The checks were taken by the Jail and stamped with “For Deposit Only,
Warren County Jail, Inmate Account.” The cash was also deposited. Cole’s account was charged
with the negative $12 balance from his arrest in 2003, as well as a $75 fee, which Defendants state
is a $50 processing fee and a $25 daily housing fee. When Cole was released on Bond he signed a
Prisoner Property Receipt that stated:
I hereby certify that I have received all items listed on this receipt as well as
information regarding the funds within my inmate account and the appropriate
procedures for recouping the same.
(Warren County Regional Jail, Prisoner Property Receipt [DN 7-7].) Cole also signed a Rights Form
when he was admitted to the Jail which advised him:
If due a refund and you fail to come by the jail, or fail to return the bottom of the
letter given to you at the time of your release, to the jail within ninety (90) days, you
will have forfeited your refund and it will become the property of the jail.
(Warren County Jail Inmate Rights & Rules and Services Offered to Inmates [DN 7-8].) At the time
of his release, Cole was due a refund of $172.70. Cole did not claim his refund within the time
period and the Jail has retained the funds.
Plaintiff Loren Patterson was arrested on September 5, 2011, and booked into the Jail
possessing a check for $150 that was made payable to Patterson. Consistent with policy, his check
was taken from him and stamped “For Deposit Only, Warren County Jail, Inmate Account” and
deposited in the South Central Inmate Account. The Jail deducted $100 as a booking fee, which the
County Defendants claim is a $70 administrative processing fee and a $30 daily housing fee.
Patterson was released on bond and charged a $5 bond fee. Patterson’s check was returned to the
Jail due to a “Stop Payment” order and a $5 handling fee was charged to his inmate account, leaving
a negative balance of $110.
The Plaintiffs bring a § 1983 claim alleging violations of the Fourth and Fourteenth
amendments, as well as various state law claims. Plaintiffs chiefly complain that their checks were
deposited in the South Central Bank Inmate Account without their knowledge, consent or
endorsement and thus, they were deprived of their property without due process of law. Plaintiffs
argue that the charges were made and their property taken before they had an opportunity to a
hearing before a sentencing court. Plaintiffs maintain that according to KRS 441.265(1), only a
sentencing court may require a prisoner to reimburse the county for costs associated with
South Central Bank of Bowling Green, Inc., Ellen Bale, and Tommy Ross (collectively “SCB
Defendants”) have moved the court to dismiss the action against them. Warren County, Mike
Buchanon, Jackie T. Strode, Jeff Robbins, Pat Watt, Misse Cooper-Edmonds, and Gayle Eston
(collectively “County Defendants”) have moved for summary judgment. All Defendants argue that
the county governing body was authorized by KRS 441.045 to implement rules for operating the jail
and KRS 441.265 authorizes the jailer to impose prisoner fees which “may be automatically
deducted from the prisoner’s property or canteen account.” KRS § 441.265(1);(6).
II. STANDARD OF REVIEW
The SCB Defendants have filed a motion to dismiss stating that all of Plaintiffs’ claims fail
as a matter of law. While they have not specifically referenced Fed. R. Civ. P. 12(b)(6), this Court
will analyze the motion under that standard. In addition, the SCB Defendants and the County
Defendants have adopted each other’s applicable arguments under their motion to dismiss and the
motion for summary judgment. As the Court has relied on purely legal arguments, it will analyze
both the County Defendants and SCB Defendants’ arguments under a motion to dismiss standard.
Upon a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6), a
court “must construe the complaint in the light most favorable to plaintiff,” League of United Latin
Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007) (citation omitted), “accept all well-pled
factual allegations as true[,]” id., and determine whether the “complaint states a plausible claim for
relief[,]” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Under this standard, the plaintiff must provide
the grounds for its entitlement to relief, which “requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007). A plaintiff satisfies this standard only when it “pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678. A complaint falls short if it pleads facts “merely consistent with a
defendant's liability” or if the alleged facts do not “permit the court to infer more than the mere
possibility of misconduct.” Id. at 678, 679. Instead, the allegations must “‘show[ ] that the pleader
is entitled to relief.’” Id. at 679 (quoting Fed. R. Civ. P. 8(a)(2)).
If “matters outside the pleadings are presented to and not excluded by the court” when ruling
upon a motion under Rule 12(b)(6), the Federal Rules require that “the motion must be treated as
one for summary judgment under Rule 56.” Fed. R. Civ. P. 12(d). This Rule does not require the
Court to convert a motion to dismiss into a motion for summary judgment every time the Court
reviews documents that are not attached to the complaint. Greenberg v. Life Ins. Co. of Va., 177
F.3d 507, 514 (6th Cir. 1999). “[W]hen a document is referred to in the complaint and is central to
the plaintiff’s claim . . . [,] the defendant may submit an authentic copy [of the document] to the
court to be considered on a motion to dismiss, and the court’s consideration of the document does
not require conversion of the motion to one for summary judgment.” Id. (quotation omitted).
“Courts may also consider public records, matters of which a court may take judicial notice, and
letter decisions of governmental agencies.” Jackson v. City of Columbus, 194 F.3d 737, 745 (6th
Cir. 1999), abrogated on other grounds, Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002).
A. 42 U.S.C. § 1983 Claims
Section 1983 creates no substantive rights, but merely provides remedies for deprivations
of rights established elsewhere." Flint ex rel. Flint v. Ky. Dep't of Corr., 270 F.3d 340, 351 (6th Cir.
2001). Two allegations are required to state a claim under § 1983. Gomez v. Toledo, 446 U.S. 635,
640 (1980). First, "a plaintiff must allege the violation of a right secured by the Constitution and
laws of the United States," West v. Atkins, 487 U.S. 42, 48 (1988), and second, he "must show that
the alleged deprivation was committed by a person acting under color of state law." Id. "Absent
either element, a section 1983 claim will not lie." Christy v. Randlett, 932 F.2d 502, 504 (6th Cir.
In their Complaint, Plaintiffs have alleged that (1) “[t]he policy, custom and/or practice at
the Jail of endorsing, cashing and retaining all proceeds from checks in the possession of persons
admitted to the Jail other than sentenced prisoners without the payees’ knowledge, approval,
endorsement or consent;” (2) “[t]he policy custom and/or practice of accepting and honoring such
checks by South Central Bank of Bowling Green, Inc.;” and (3) “[t]he policy, custom and/or practice
at the Jail of retaining cash and proceeds from checks of persons admitted to the Jail other than
sentenced prisoners without their consent, and/or in violation of and/or in excess of sums permitted
under KRS § 441.265, and/or without providing an accounting of same” are in violation of the
Fourth and Fourteenth Amendment of the United States Constitution.
1. Fourth Amendment
Both the SCB Defendants and the County Defendants argue that there were no violations of
Plaintiffs’ Fourth Amendment rights. The SCB Defendants argue that an exception to the Fourth
Amendment’s prohibition against warrantless searches and seizures includes searches incident to
custodial arrests and searches when booked at a jail. The County Defendants state that the Jail is
required by 501 KAR § 3:120(3)(1)-(3) “to conduct a search of each prisoner and his possession to
search for contraband in such a manner which jail personnel reasonably determines is necessary to
protect the safety of fellow prisoners, jail personnel, and institutional security.” (County Defs.’ Mot.
Summ. J., 9 [DN 7].) Additionally, the County Defendants state that the Jail had a “legitimate
interest in searching for and seizing money which inmates may carry inside the jail, in order to
maintain a safe and orderly facility.” (Id.)
Plaintiffs acknowledge the exception and state that they do not complain of being searched
at booking or at having property removed from their possession and held until their release. Nor do
they challenge the constitutionality of the Jail’s reimbursement for statutorily-authorized fees in the
manner proscribed by KRS § 441.265. Instead, Plaintiff complains that the “[s]eizure of these
monies offends the reasonableness requirement of the Fourth Amendment to the extent such seizure
violates the provisions of KRS § 441.265 - the statute’s prescription for satisfying procedural due
process, and its limitation, effected through the Fiscal Court ordinance, of how much can be seized,
and for what.” (Pls.’ Memo in Opposition to Mot. to Dismiss, 13 [DN 10].) Stated another way,
the seizure of the monies is not unreasonable under the Fourth Amendment provided the provisions
of KRS § 441.265 are followed. Thus, this issue is dependent upon the analysis below.
2. Fourteenth Amendment
The Fourteenth Amendment guarantees that no State will deprive a person of life, liberty,
or property without due process of law. U.S. Const. amend XIV, § 1. The guarantee of procedural
due process “assures the deprivation of life, liberty, or property will not be effectuated without
‘notice and opportunity for hearing appropriate to the nature of the case.’” Barachkov v. 41B Dist.
Court, 311 F.App’x 863, 871 (6th Cir. 2009) (quoting Cleveland Bd. of Educ. v. Loudermill, 470
U.S. 532, 542 (1985)). A procedural due process claim raises two questions: (1) “whether there
exists a liberty or property interest which has been interfered with by the State” and (2) “whether
the procedures attendant upon that deprivation were constitutionally sufficient.” Ky. Dept. Of Corr.
v. Thompson, 490 U.S. 454, 460 (1989).
Both the County Defendants and the SCB Defendants agree that the Plaintiffs had a property
interest in their money, answering the first question affirmatively. As to the second question, the
Plaintiffs insist they are not arguing they are entitled to a pre-deprivation hearing before the Jail
seizes cash and checks in their possession to reimburse costs authorized pursuant to KRS § 441.265.
Instead, Plaintiffs contend they are entitled to a hearing in front of the sentencing court before the
Jail can collect any funds for reimbursement of prisoner confinement expenses. The statute states:
[A] prisoner in a county jail shall be required by the sentencing court to reimburse
the county for expenses incurred by reason of the prisoner’s confinement as set out
in this section, except for good cause shown.
KRS § 441.265(1) (emphasis added)
The same argument was made to Judge Bertelsman in Sickles v. Campbell Co., Ky., 439 F.
Supp. 2d 751 (E.D. Kentucky, July 13, 2006) and it was rejected. Judge Bertelsman’s decision was
upheld by the Sixth Circuit in Sickles v. Campbell Co., Ky., 501 F.3d 726 (6th Cir. 2007). Plaintiffs
argue that Judge Bertelsman interpreted the statute incorrectly and that the Sixth Circuit’s holding
Plaintiffs fault Judge Bertelsman for not looking to the legislative history after finding that
the statute was ambiguous. Although the word “ambiguous” was used in Judge Bertelsman’s
opinion, it is clear that he did not find the statute ambiguous after it was considered as a whole.
Therefore, it would have been improper for him to have referred to the legislative history. The Court
agrees with Judge Bertelsman and finds no ambiguity in the statute.
Judge Bertelsman cited the automatic deduction provisions of KRS § 411.265(6), and the
definition of “prisoner” found in KRS § 441.005(3)(c), to conclude that the correct reading of the
statute is that fees may be imposed and periodically collected as soon as the prisoner is booked into
the jail. The reference to the “sentencing court” in subparagraph (1) was found by Judge Bertelsman
to allow the court to impose a judgment for any deficiency at sentencing which was not defrayed by
the automatic deduction.1
On appeal, the Sixth Circuit held that a jail may withhold a portion of an inmate’s account
in order to cover costs without providing the inmate with a hearing before it withholds the money.
Additionally, the provisions of subparagraph (1) would seem to provide a prisoner a
mechanism to ask the sentencing court to excuse the payment of expenses for good cause,
particularly if the charges are acquitted or dismissed.
The Sixth Circuit determined that there was a property interest at stake, and then addressed what
process is due by balancing “ the private interest that will be affected by the official action; . . .
 the risk of an erroneous deprivation[;] . . .  the probable value, if any, of additional or
substitute procedural safeguards; and . . .  the Government’s interest, including the function
involved and the fiscal and administrative burdens that the additional or substitute procedural
requirement would entail.” Id. at 730 (quoting Mathews v. Eldridge, 424 U.S. 319, 335 (1976)).
After analyzing the four factors, the Sixth Circuit held that “[i]n view of the modest private interests
at stake, the small risk of error, the limited benefits of additional safeguards and the unchallenged
government interests in the policy,” there was no need for a pre-deprivation hearing before Campbell
County and Kenton County withheld funds from inmates’ accounts. Id. at 730-31.
The Plaintiffs attempt to distinguish their argument here from that which the Sixth Circuit
has already rejected in Sickles. However, the Court sees no difference. Here, the Plaintiffs claim
that KRS § 411.265(1) requires that any withholding be delayed until after the sentencing court
conducts a hearing. That precise claim was made, acknowledged, discussed, and rejected by the
Sixth Circuit when it quoted the language of KRS § 411.265(1) and stated that “to say that a
sentencing court must do one thing (requiring reimbursement even after the inmate’s release) is not
to say that another government entity (the county jail) may not do another (collecting room-andboard fees from inmates while they remain in jail).” Id. at 732. Therefore, the Court concludes that
Sickles is controlling on the issue of whether KRS § 411.265(1) requires withholdings to be delayed
until after a hearing before the sentencing court.
However, there are claims made in this case which are different from those made in Sickles.
Plaintiffs challenge the practice of seizing personal checks made payable to a prisoner, depositing
them into the Jail account without the prisoner’s endorsement, knowledge or consent; not providing
the prisoner with a billing statement upon release as required by KRS § 411.265(7); and the charging
of fees not authorized by KRS § 411.265(2)(a). The Court will address each of these in turn.
First, as to the practice of seizing personal checks made payable to a prisoner and depositing
them into the Jail account without the prisoner’s endorsement, knowledge, or consent, the Court
does not find a Due Process violation. While it has already been noted that the Plaintiffs have a
property interest in the checks, this property interest is no different from the interest they have in
the cash that is in their possession upon arrest. The funds (made up of both cash and checks) are
deposited into the inmates’ account for safe keeping, which, under Sickles is not a due process
violation. SCB converts the checks to cash in the inmates’ account. However, with the exception
of the Jail withdrawing fees that it is constitutionally allowed to withdraw, Plaintiffs have access to
these funds while in jail and once they are released from Jail. Plaintiffs were not deprived of their
funds. See Sickles, 501 F.3d 726; Browder v. Ankrom, 2005 WL 1026045 (W.D.Ky. April 25,
2005) (holding that inmates are not deprived of their property because the money is deducted in
exchange for services rendered or goods provided.). See also Lawson v. Clarke, 2007 WL 2778259
(W.D. Wash., Sept. 21, 2007) (“While plaintiff alleges that his private funds have been ‘converted,’
he offers no evidence that he was ever denied access to the funds on deposit in his personal account,
or that any such funds were ever withheld from him, except to the extent that funds received for
deposit in plaintiff’s personal account were subject to mandatory deductions under” state law.)
While the Plaintiffs claim the Jail’s endorsement and SCB’s acceptance of the checks violates
Kentucky state law, it does not violate their Due Process since Plaintiffs were not deprived of their
property. The Fourteenth Amendment “is not violated every time a county violates a state law.”
Sickles, 501 F.3d at 731.
Second, the Plaintiffs claim they were not provided with a billing statement upon release as
required by KRS § 441.265(7) and, therefore, their Fourteenth Amendment Due Process was
violated. By statute, upon release “the prisoner shall be presented with a billing statement produced
by the jailer or designee.” KRS § 441.265(7). The Plaintiffs claim they never received this
statement, although the record reflects that both Plaintiffs signed Prisoner Property Receipts which
I hereby certify that I have received all items listed on this receipt as well as
information regarding the funds within my inmate account, and the appropriate
procedures for recouping the same.
(Warren Count Regional Jail Prisoner Property Receipt [DN 7-7, 7-13]).
The third claim is similar to the second in that it alleges the violation of a state statute.
Plaintiffs argue that the Defendants have violated the Fourteenth Amendment by deducting fees
from the Plaintiffs’ inmate account not authorized by KRS 441.265, including the collection of a
bond fee; the initial charge of a combined processing and per diem fee; and the deduction of an
amount that is labeled “Posted to Fines/Cost/Med”.
Despite the fact that the County Defendant’s response seems to address all of Plaintiff’s
claims of unauthorized fee assessments, the Court will assume for purposes of this motion that some
fees collected were unauthorized and that the Plaintiffs never actually received a copy of their billing
statement. Thus, the allegations support a claim that the jail violated the state statute that provides
the process for assessing prisoner fees. The question presented here is whether such allegations
support a section 1983 constitutional claim.
“Although the Fourteenth Amendment requires a State to provide a fundamentally fair
process ‘at a meaningful time and in a meaningful manner,’ Armstrong v. Manzo, 380 U.S. 545, 552,
85 S.Ct. 1187,14 L.Ed.2d 62 (1965), it is not violated every time a county violates a state lawparticularly a state law that does not purport to define a property interest or a pertinent liberty
interest, see, e.g., Collins v. City of Harker Heights, 503 U.S. 115, 119 112 S.Ct. 1061, 117 L.Ed.2d
261 (1992) (Section 1983 ‘does not provide a remedy for abuses [of state power] that do not violate
federal law.’).” Sickles, 501 F.3d at 732. The billing statement requirement is part of Kentucky’s
procedure for releasing prisoners, it is not constitutionally required. And even if the Jail assessed
unauthorized fees, and arguably violated Plaintiff’s Due Process, the Plaintiffs should have taken
advantage of their post-deprivation remedies provided by the Jail. “[A]n unauthorized intentional
deprivation of property by a state employee does not constitute a violation of the procedural
requirements of the Due Process Clause of the Fourteenth Amendment if a meaningful
postdeprivation remedy for the loss is available.” Hudson v. Palmer, 468 U.S. 517 (1984) (citing
Parratt v. Taylor, 451 U.S. 527 (1981)); See also Bailey v. Carter, 15 Fed. Appx. 245, 251 (6th Cir.
2001) (“Even if the copayment charge does deprive the inmates of property within the meaning of
the Due Process Claim, the inmates failed to allege that the post-deprivation procedure is
inadequate.”); McMillan v. Fielding, 136 Fed. Appx. 818 (6th Cir. 2005) (The Sixth Circuit affirmed
a decision dismissing a prisoner’s 42 U.S.C. § 1983 allegations for failure to state a claim. The
prisoner alleged that an officer took a check from the prisoner’s legal mail and put it into the
prisoner’s trust fund account against his wishes. The district court held “that 42 U.S.C. § 1983 is
not a remedy for addressing the taking of property if a post-deprivation remedy is available.”)
In Sickles, the Sixth Circuit found that the plaintiffs had adequate post-deprivation remedies
because the inmates were informed about the county removing money from their canteen account
and the inmates were provided notice regarding the jail’s internal grievance procedures. 501 F.3d
at 731. In the present case, upon admittance to the jail, Plaintiffs signed an Inmate Rights & Rules
and Services Offered to Inmates form stating that they understood the rules and regulations of the
jail and received their own copy of the rules and regulations. [DN 7-8, 7-12.] In those rules and
regulations there are sections regarding the amount of fees assessed a prisoner and the proper
procedure to file grievances. Under 501 K.A.R. 3:120, the Jail must return property that was not
legally confiscated and the prisoners are required to sign a receipt for their property at the time of
release. If a prisoner has a complaint, he or she must “submit [it] in writing with specific details
within twenty-four (24) hours from the time of release.” 501 K.A.R. 3:120(5)(8). It is Warren
County’s policy that the Jail provides information regarding the funds in their inmate account and
allows a 90-day window to collect any excess funds. Plaintiffs were provided adequate postdeprivation and thus, a section 1983 claim is not the proper remedy.
While Plaintiffs argue that their failure to avail themselves of any post deprivation remedy
does not bar this action, the law in the Sixth Circuit states that “in § 1983 damage suits claiming the
deprivation of a property interest without procedural due process of law, the plaintiff must plead and
prove that state remedies for redressing the wrong are inadequate.” Filipelli v. Hopkins County Jail,
2011 WL 5555682, *2 (W.D. Ky. Nov. 15, 2011) (quoting Vicory v. Walton, 721 F.2d 1062 (6th
Cir. 1983)). The Plaintiffs have not pursued any post-deprivation remedies and, therefore, can not
allege that their post-deprivation remedies were inadequate to remedy the deprivation. In addition,
Plaintiffs have alleged several state law tort claims which have been found to be adequate postdeprivation remedies. See Wagner v. Higgins, 754 F.2d 186, 191 (6th Cir. 1985) (the Sixth Circuit
affirmed a holding that there was no section 1983 claim as “a common law action for conversion
was available . . . in the state courts of Kentucky”); Vicor, 721 F.2d at 1065 (“Policy considerations
do not require a federal hearing in procedural due process cases that can be corrected in state court.”)
Therefore, this Court holds that a 42 U.S.C. § 1983 claim is not the appropriate remedy for Plaintiffs
and their allegations concerning their Fourteenth Amendment rights must be dismissed for failure
to state a claim upon which relief may be granted.
3. SCB as State Actors
As mentioned, to bring a 42 U.S.C. § 1983 claim “a plaintiff must allege the violation of a
right secured by the Constitution and laws of the United States,” West v. Atkins, 487 U.S. 42, 48
(1988), and second, he “must show that the alleged deprivation was committed by a person acting
under color of state law.” Id. The SCB Defendants argue that Plaintiffs’ § 1983 claim must also fail
because SCB Defendants did not act under the color of state law. The Supreme Court has stated that
“acting under color of state law requires that the defendant in a § 1983 action have exercised power
‘possessed by virtue of state law and made possible only because the wrongdoer is clothed with the
authority of state law.’” Id. at 49 (quoting United States v. Classic, 313 U.S. 299, 326 (1941)). As
a bank, SCB accepts checks and cash, crediting that money to customers’ bank accounts on a daily
basis, in its ordinary course of business. SCB Defendants reason that performing these routine acts
for a county jail does not clothe them with the authority of state law.
In response, Plaintiffs state the Supreme Court has “consistently held that a private party’s
joint participation with state officials in the seizure of disputed property is sufficient to characterize
that party as a ‘state actor’ for purposes of the Fourteenth Amendment.” Lugar v. Edmondson Oil
Co., 457 U.S. 922, 941 (1982). Plaintiffs state that the case at present is unique because it involves
a seizure of disputed property, conversion to state ownership, and the SCB Defendants’ “willful
participation in an illegal process by which checks written to Plaintiffs were permitted by the SCB
Defendants to be deposited in an account for the Jail without Plaintiffs’ knowledge, endorsement
or consent.” (Pls’ Response to SCB Defs.’ Mot. Summ. J., 2 [DN 10].)
“The Sixth Circuit applies three tests for determining whether private action is fairly
attributable to the state: the nexus test, the public function test, and the state compulsion test.”
Wittstock v. Mark A. Van Sile, Inc., 330 F.3d 899, 902 (6th Cir. 2003) (citing Tahfs v. Proctor, 316
F.3d 584, 590 (6th Cir. 2003)). First, the nexus test “requires that a sufficiently close relationship
exist between the state and the private actor (through regulation or by contract) so that private action
may be attributable to the state.” Id. Plaintiffs can not establish that SCB was a state actor under
the nexus test. There were no contracts involved, and “[m]erely because a business is subject to
state regulation does not by itself convert its action into state action.” Wolotsky v. Huhn, 960 F.2d
1331, 1335 (6th Cir. 1992). The Jail was just another customer to SCB. SCB was not working
under the Jail’s direction, only holding checks and cash in an account for the Jail.
Next, Plaintiffs can not establish that SCB Defendants were state actors through the public
function test which “requires that the private actor exercise powers that are traditionally reserved
to the state.” Wittstock, 330 F.3d at 902. These powers include holding elections and eminent
domain. See Wolotsky, 960 F.2d 1335. Providing banking services is not a power that has been
traditionally reserved to the state.
Lastly, the Plaintiffs can not establish that SCB Defendants were state actors through the
state compulsion test. “The state compulsion test requires that a state exercise such coercive power
or provide such significant encouragement, either overt or covert, that in law the choice of the
private actor is deemed to be that of the state.” Id. The choice of the SCB Defendants to accept cash
and checks from the Jail was the SCB Defendant’s choice. No allegation has been made that Warren
County exercised power over the bank in order to force them to hold prisoner funds in an account,
the Jail was simply a customer of the bank. Therefore, the Court holds that SCB Defendants were
not acting under the color of state law for purposes of a § 1983 claim.
B. Amended Complaint
The Plaintiffs have filed a motion for leave to file an Amended Class Action Complaint in
order to (1) add a plaintiff and class representative; (2) specify that SCB acted under color of state
law; and (3) add a claim under the Fair Debt Collection Practices Act. [DN 21]. This motion for
leave to file an Amended Complaint is governed by Fed. R. Civ. P. 15(a)(2) which states that, “a
party may amend its pleading only with the opposing party’s written consent or the court’s leave.”
A district court should freely grant a plaintiff leave to amend a pleading “when justice so requires.”
Fed. R. Civ. P. 15(a)(2). However, a district court may deny a motion to amend where there is
“undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of
allowance of the amendment, futility of amendment, etc.” Foman v. Davis, 371 U.S. 178, 182
The County Defendants object to the Amended Complaint on grounds that Plaintiffs had the
opportunity to add any new plaintiffs and assert all claims and allegations in their original Complaint
and failed to do so. SCB Defendants also object to the Amended Complaint stating that the original
Complaint already alleged that SCB Defendants were state actors and the parties have already
briefed the topic, making it an unnecessary amendment to the original Complaint. As to the Fair
Debt Collection Practices Act (“FDCPA”) claim, the SCB Defendants argue that this claim is futile
because the statutes apply only to “debt collectors” which are defined as:
Any person who uses any instrumentality of interstate commerce or the mails in any
business the principal purpose of which is the collection of any debts, or who
regularly collects or attempts to collect, directly or indirectly, debts owed or due or
asserted to be owed or due another...
15 U.S.C. § 1692a(6). In addition, the SCB Defendants contend that the cash and checks that were
confiscated from the prisoners are considered contraband inside the Jail and the bank was
safeguarding the monies, which the Jail collected incarceration-related fees from. These fees, the
SCB Defendants argue, do not fit the FDCPA definition of “debt” which is
Any obligation or alleged obligation of a consumer to pay money arising out of a
transaction in which the money property, insurance, or services which are the subject
of the transaction are primarily for personal, family, or household purposes, whether
or not such obligation has been reduced to judgment.
15 U.S.C. § 1692a(5). SCB Defendants reason that the incarceration-related fees are not the subject
of transactions that are “primarily for personal, family or household purposes.” Id.
While the Sixth Circuit has stated that “the Fair Debt Collection Practices Act is an
extraordinarily broad statute,” it is inapplicable to the case at present. Bridge v. Ocwen Federal
Bank, FSB, 2012 WL 1470146, at *4 (6th Cir. April 30, 2012) (citation omitted). SCB was not
acting as a debt collector for the Jail. Monies and checks were deposited into the canteen account
for safekeeping and Jail had access to those funds to collect fees. Regardless of whether or not the
checks were properly or improperly endorsed, SCB was not acting as a third party debt collector for
Jail and it can not be said that the SCB Defendants’ principal purpose is collecting debts. Banks
have been found to be debt collectors, but these cases involve debts that the banks purchased from
credit card companies or mortgages that were assigned to a third-party bank. See Bridge, 2012 WL
1470146; Gamby v. Equifax Information Services LLC, 2012 WL 447491 (6th Cir. Feb. 14, 2012).
The Court agrees with the SCB Defendants’ argument that allowing the Amended Complaint would
be futile. As stated above, the Court determined that there was no deprivation of Plaintiffs’
constitutional rights, and SCB Defendants did not act under color of state law. The Fair Debt
Collection Practices Act is inapplicable to this situation and, as a matter of law, the amendment is
futile. Lastly, the facts regarding the additional plaintiff do not alter the Court’s finding as to the
deprivation of constitutional rights. Therefore, the Court denies Plaintiffs’ motion for leave to file
an Amended Class Action Complaint.
C. State Law Claims
In their Complaint, Plaintiffs have also alleged in Count II that the County and SCB
Defendants were negligent and grossly negligent; in Count III, that the County and SCB Defendants
engaged in a conspiracy to wrongfully deprive Plaintiffs of their property; in County IV, a violation
of Section 10 of the Kentucky Constitution, Articles 355.3 and 355.4 of the Kentucky Uniform
Commercial Code, sections 506.040 et seq., 514.030, 514.070, 522.020 and 522.030 of the Kentucky
Penal Code, as well as section 501 KAR § 3:120 of the Administrative Regulations of the
Commonwealth of Kentucky; in Count V, the County and SCB Defendants acted in bad faith; in
Count VI, the County and SCB Defendants converted the property of the Plaintiffs; and in Count
VI, the County and SCB Defendants fraudulently deprived the Plaintiffs of their property. SCB
Defendants contend that because the sole federal claim under Section 1983 fails as a matter of law,
the Court should decline to exercise supplemental jurisdiction over the remaining state law claims.
Section 1367(c) of Title 28 of the United States Code provides, in pertinent part, as follows:
“The district courts may decline to exercise supplemental jurisdiction over a claim . . . if . . . the
district court has dismissed all claims over which it has original jurisdiction.” 28 USC § 1367(c)(3).
In Carnegie-Mellon University v. Cohill, 484 U.S. 343 (1988), the Supreme Court discussed the
propriety of exercising supplemental jurisdiction over pendent state-law claims following its
decision in United Mine Workers v. Gibbs, 383 U.S. 715 (1966).
The Gibbs Court recognized that a federal court’s determination of state-law claims
could conflict with the principle of comity to the States and with the promotion of
justice between the litigating parties. For this reason, Gibbs emphasized that
“pendent jurisdiction is a doctrine of discretion, not of plaintiff's right.” Ibid. Under
Gibbs, a federal court should consider and weigh in each case, and at every stage of
the litigation, the values of judicial economy, convenience, fairness, and comity in
order to decide whether to exercise jurisdiction over a case brought in that court
involving pendent state-law claims. When the balance of these factors indicates that
a case properly belongs in state court, as when the federal-law claims have dropped
out of the lawsuit in its early stages and only state-law claims remain, the federal
court should decline the exercise of jurisdiction by dismissing the case without
prejudice. Id., at 726-27.
Carnegie-Mellon, 484 U.S. at 349-50.
Given that the remaining claims are state-law claims, and that this case is in its infancy, the
Court finds that the balance of judicial economy, convenience, fairness, and comity all point toward
declining supplemental jurisdiction. Therefore, the Court declines to exercise supplemental
jurisdiction over Plaintiffs’ state-law claims. Accordingly, Plaintiffs’ pendent state-law claims are
DISMISSED without prejudice.
For the reasons set forth above, IT IS HEREBY ORDERED that SCB Defendants’ motion
to dismiss [DN 6] and County Defendants’ motion for summary judgment [DN 7] are GRANTED
as to the 42 U.S.C. § 1983 claim. The State law claims are DISMISSED without prejudice.
Plaintiffs’ motion for leave to file surreply [DN 18] is GRANTED and was taken into consideration
in the Court’s decision. Plaintiffs’ motion for leave to file an amended class action complaint [DN
21] is DENIED. Plaintiffs’ motion for leave to file supplemental response to motions to dismiss and
for summary judgment [DN 22] is DENIED AS MOOT.
May 29, 2012
cc: counsel of record
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?