Williams v. Zions First National Bank

Filing 60

CORRECT VERSION OF MEMORANDUM DECISION RE-FILED AS 61 MEMORANDUM DECISION - MEMORANDUM DECISION AND ORDER granting in part and denying in part 42 Motion to Dismiss Parties for Failure to State a Claim: motion is granted as to all claims, except the retaliation claim and its related conspiracy allegations, and as to all Defendants, except M. Anderson, Turley, Bussio, Gardner, Smith, A. Anderson, and Casper (Remaining Defendants). Signed by Judge David Nuffer on 9/29/17 (alt) (Additional attachments and refiling info added on 9/29/2017: # 1 Main Document/document indicating replacement, # 2 original, incorrect memorandum decision) (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
REGINALD WILLIAMS,
Plaintiff,
v.

MEMORANDUM DECISION
AND ORDER
• GRANTING MOTION TO DISMISS
CERTAIN DEFENDANTS AND
• DENYING MOTION TO DISMISS
REMAINING DEFENDANTS

UTAH DEP’T OF CORRS. et al.,
Defendants.

Case No. 2:13-cv-319-DN
District Judge David Nuffer

Plaintiff Reginald Williams (Plaintiff) filed a Complaint 1 alleging that, the Inmate Trust
Fund Account (ITFA) administered by the Utah Department of Corrections (UDOC) must pay
interest earned on inmate funds to inmates during imprisonment. Plaintiff named multiple
defendants, categorized into groups: Zions Defendants and UDOC Defendants. 2
On June 14, 2014, the Zions Defendants filed a Motion and Memorandum to Dismiss All
Claims Against the Zions Defendants. 3 The Motion to Dismiss was granted. 4
UDOC Defendants now seek dismissal, for failure to state a claim, on all claims against
them. 5 These claims include: (1)takings and due process violations for withholding interest on
ITFA funds; (2) antitrust violations to establish a monopoly, and (3) retaliation for raising these

1

Complaint, Docket No. 6, filed May 10, 2013.

2

Id.

3

Docket No. 40, filed June 16, 2014.

4

Memorandum Decision & Order Dismissing Zions Bank Defendants with Prejudice, Docket No. 58, filed June 19,
2017.
5

State Defendants’ Motion to Dismiss and Memorandum in Support (Motion to Dismiss), Docket No. 42, filed June
16, 2014.

issues. 6 For the reasons stated in this order, Defendants’ Motion to Dismiss 7 is GRANTED as to
all claims, except the retaliation claim and its related conspiracy allegations, and as to all
Defendants, except M. Anderson, Turley, Bussio, Gardner, Smith, A. Anderson, and Casper
(Remaining Defendants).
In Plaintiff’s Memorandum in Opposition to the State Defendants’ Motion to Dismiss
(Plaintiff’s Opposition), Plaintiff states he “does not oppose [UDOC] Defendants’ motion insofar
as it relates to his antitrust claims.” 8 Therefore the antitrust claims are considered withdrawn and
the other three claims of due-process and takings violations as to misappropriated earnings of
monies in the ITFA and retaliation for raising the trust-fund issues will be considered.

STANDARDS FOR REVIEW ....................................................................................................... 3
DUE PROCESS AND TAKINGS CLAIMS .................................................................................. 4
RETALIATION CLAIM ................................................................................................................ 7
ORDER ......................................................................................................................................... 11

6

Complaint at 3A and 3D.

7

Motion to Dismiss.

8

Docket No. 50 at p. 7, filed January 6, 2017. Plaintiff’s response was drafted by his court-appointed counsel,
Wesley Fox.

2

STANDARDS FOR REVIEW
In evaluating the propriety of dismissing claims for failure to state a claim upon which
relief may be granted, all well-pleaded factual assertions as taken as true and regarded in a light
most advantageous to the plaintiff. 9 Dismissal is appropriate when, viewing those facts as true,
the plaintiff has not posed a "plausible" right to relief. 10 "The burden is on the plaintiff to frame a
'complaint with enough factual matter (taken as true) to suggest' that he or she is entitled to
relief." 11 When a civil rights complaint contains "bare assertions," involving "nothing more than
a 'formulaic recitation of the elements' of a constitutional . . . claim," the Court considers those
assertions "conclusory and not entitled to" an assumption of truth. 12 In other words, "the mere
metaphysical possibility that some plaintiff could prove some set of facts in support of the
pleaded claims is insufficient; the complaint must give the court reason to believe this plaintiff
has a reasonable likelihood of mustering factual support for these claims." 13
Pro se pleadings are construed "'liberally,' applying a less stringent standard than is
applicable to pleadings filed by lawyers. Th[e] court, however, will not supply additional factual
allegations to round out a plaintiff's complaint or construct a legal theory on a plaintiff's
behalf." 14 In the Tenth Circuit reasoned it can reasonably read the pleadings "to state a valid
claim on which the plaintiff could prevail, it should do so despite the plaintiff's failure to cite
proper legal authority, his confusion of various legal theories, his poor syntax and sentence

9

Ridge at Red Hawk L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir. 2007).

10

See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Robbins v. Oklahoma, 519 F.3d 1242, 1247-48
(10th Cir. 2008).

11

Robbins, 519 F.3d at 1247 (quoting Twombly, 550 U.S. at 556).

12

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1951 (2009) (quoting Twombly, 550 U.S. at 554-55).

13

Red Hawk, 493 F.3d at 1177 (italics in original).

14

Whitney v. New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997) (citations omitted).

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construction, or his unfamiliarity with pleading requirements." 15 Still, it is not "the proper
function of the district court to assume the role of advocate for the pro se litigant." 16
DUE PROCESS AND TAKINGS CLAIMS
Plaintiff asserts that Utah Code Ann. § 64-13-23 (Utah Statute) regarding ITFAs requires
“that inmate funds will accrue interest whether in a joint account or in a an account administered
by the department of corrections.” 17 Plaintiff further alleges “because the State Defendants do
not credit the ITFA accounts with monies earned on the funds,” his Fourteenth Amendment right
to due process and his Fifth Amendment right to be free from takins of private property without
just compensation were violated. 18
In Plaintiff’s Opposition, he correctly points out that other circuits have noted, “it is clear
that inmates have a property interest in funds held in prison accounts.” 19 However, Plaintiff is
arguing that the Utah Statute mandates UDOC Defendants place inmate funds into an interest
bearing account and that interest earned should be paid to inmates. 20
The Fifth and Fourteenth Amendments’ guarantees “’apply only when a constitutionally
protected liberty or property interest is at stake.’” 21 “To establish such a protected property

15

Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991).

16

Id.; see also Peterson v. Shanks, 149 F.3d 1140, 1143 (10th Cir. 1998) (citing Dunn v. White, 880 F.2d 1188, 1197
(10th Cir. 1989) (per curiam)).
17

Plaintiff’s Opposition at p.3.

18

Id. at 3, 5.

19

Id. at p. 2, citing Reynolds v. Wagner, 128 F.3d 166, 179 (3d Cir. 1997)

20

Id. at 3.

21

Petrick v. Fields, No. 96-6076, 1996 U.S. App. LEXIS 31338, at *4 (10th Cir. Dec. 6, 1996) (unpublished)
(quoting Tellis v. Godinez, 5 F.3d 1314, 1316 (9th Cir. 1993) (citing Board of Regents v. Roth, 408 U.S. 564, 569
(1972)).

4

interest, [Plaintiff] must have a ‘legitimate claim of entitlement’ to interest earned on funds in his
accounts.” 22 Roth goes on to say that
property interests . . . are not created by the Constitution. Rather,
they are created and their dimensions are defined by existing rules
or understandings that stem from an independent source such as
state law--rules or understandings that secure certain benefits and
that support claims of entitlement to those benefits. 23
Thus, it must be determined whether Utah Statute or another independent source entitles Plaintiff
to earn and receive interest on his prison account funds. 24
The statute 25 upon which Plaintiff bases the entitlement upon is under the title,
“Offender’s income and finances.” It states in relevant part: “If the funds are placed in a joint
account at a federally insured financial institution: any interest accrues to the benefit of the
offender account.” 26 The statute goes on to say, “If the funds are placed in an account
administered by the department, the department may by rule designate a certain portion of the
offender’s funds as interest-bearing savings, and another portion as noninterest-bearing to be
used for day-to-day expenses.” 27

22

Roth, 408 U.S. at 577.

23

Id.

24

Petrick, 1996 U.S. App. LEXIS 31338, at * 4-5 (“[B]ecause neither Oklahoma state law nor any other
‘independent source’ provide [Plaintiff] a constitutionally protected property interest in interest earned on funds in
his draw or mandatory savings accounts, his claim must fail.”); see, e.g., Givens v. Alabama Dep’t of Corr., 381
F.3d 1064 (11th Cir. 2004) (determining Alabama law created no property interest in inmate’s account interest).

25

Utah Code Ann. § 64-13-23 (2017).

26

Id. § 64-13-23(2)(a) (2017) (emphasis added).

27

Id. § 64-13-23(3) (emphasis added).

5

Tenets of statutory construction counsel, if possible, to construe the statute “in such
fashion that every word has some operative effect.” 28 Further, the “statute is to be read as a
whole, since the meaning of statutory language, plain or not, depends on context.” 29
Giving each word in the Utah Statute operative effect, the overall words and tone are
deferential, not commanding. These words separately and in context have the connotation of
yielding to UDOC’s judgment on how to handle the money.
The Utah Statute 30 certainly gives the UDOC Defendants the authority to choose whether
to put the funds in an interest bearing account, but it does not require it. 31 In fact the funds were
placed in a non-interest bearing account. 32 Because the UDOC Defendants put inmate funds in a
non-interest-bearing account, there is no interest for Plaintiff to claim. Where there is no property
interest, there can be no taking of property, nor can there be a property deprivation without due
process. 33
Plaintiff also alleges that any monies earned on the funds, interest or otherwise, if not
credited to the ITFA accounts violates Plaintiff’s due process rights. 34 Even if Zions Bank used

28

Tellis, 5 F.3d at 1316.

29

King v. St. Vincent’s Hosp., 112 S. Ct. 570,574 (1991) (citations omitted).

30

Id.

31

In Plaintiff’s Opposition at p 3, he cites Schneider v. Cal. Dept. of Corrections, 151 F.3d 1194, 1200 (9th Cir.
1998) in which the Ninth Circuit held that prisoners have a constitutionally protected property right in interest on
prison trust funds even in the face of contrary state statute. However, in Schneider there was a question as to
whether any interest accrued on the funds. The Ninth Circuit remanded the case to the district court to permit
discovery to determine whether or not any interest actually accrued on the prisoner funds. In this case, the UDOC
Defendants placed prisoner funds in an account where there was no interest, only investment income made by Zions
Bank.
32

Motion to Dismiss at 7. The UDOC Defendants placed funds in an account where “there is no ‘interest’ (only
investment income made by Zions).”

33

Petrick, 1996 U.S. App. LEXIS at *7.

34

Plaintiff Opposition at 3. Plaintiff cites to Tellis v. Godinez, 5 F.3d 1314, 1316 (9th Cir. 1993) (“The earnings of a
fund are incidents of ownership of the fund itself and are property just as the fund itself is property.”)(quoting
Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 164 (1980). The Nevada statute at issue in Tellis, is
different than the Utah Statute in that the Nevada statute specifically provides that interest and income earned on

6

the funds to make a profit for itself does not mean there was “interest” on the account or that the
UDOC Defendants violated the Utah Statute. As UDOC Defendants point out in practicality “a
bank may allow us to deposit money with it, which it will use to invest and generate profit. But
our account will still be a 0% interest account.” 35 For the reasons stated above, UDOC
Defendants are not liable to Plaintiff regarding ITFA interest—constructive or otherwise. These
claims are dismissed.
RETALIATION CLAIM
Under this claim, Plaintiff asserts that, because he was pursuing this very litigation,
certain UDOC Defendants unconstitutionally conspired and retaliated against him through such
targeted activities as confiscating his legal materials. 36
“Prison officials cannot harass or retaliate against inmates for the inmate’s exercise of his
First Amendment right to access the courts.” 37
[T]o establish a First Amendment retaliation claim, the following
elements must be shown: (1) that the plaintiff was engaged in a
constitutionally protected activity; (2) defendant’s actions caused
injury to plaintiff that would chill a person of ordinary firmness
from continuing to engage in the activity; and (3) the adverse
action was substantially motivated as a response to the plaintiff’s
exercise of constitutionally protected conduct. Shero v. City of
Grove, Okla., 510 F.3d 1196, 1203-04 (10th Cir. 2007). Given that
“an inmate is not inoculated from the normal conditions of
confinement experienced by convicted felons . . . merely because
he has engaged in protected activity[,] . . . a plaintiff must prove
that but for the retaliatory motive, the incidents to which he refers,
including the disciplinary action, would not have taken place.”

money in the fund must be credited to the fund. More importantly in Tellis, there was interest provided to the prison
and officials withdrew the interest instead of crediting the interest to the account.
35

Id. at 6.

36

Complaint at 4T.

37

Smith v. Maschner, 899 F.2d 940, 947-48 (10th Cir. 1990).

7

Peterson v. Shanks, 149 F.3d 1140, 1144 (10th Cir. 1998) (internal
quotation marks omitted) (quoting Smith, 899 F.2d at 949-50). 38
In their Motion to Dismiss, Defendants argue that Plaintiff has not provided enough
specificity on this claim to state a claim upon which relief may be granted. 39 The Court
disagrees.
Through several pages of his Complaint, Plaintiff sets forth his efforts to find evidentiary
support for his allegations about the way trust-fund accounts were managed. And then he
specifies certain defendants that allegedly retaliated toward his efforts by seizing Plaintiff’s
sensitive legal materials (supporting his litigation in this very case) “in violation of UDC
policy.” 40 He further describes some of their alleged retaliation efforts:
Bussio and Gardner recommended the BOP give Williams
three year rehearing if Williams successfully complete a therapy
program. Williams completed 17-months of the 18-month program
at the time of the recommendation. Said recommendation served
no legitimate penological interest other than to retaliate for
exercising speech rights.
But for the retaliatory intent of Bussio and Gardner,
Williams would have received a favorable recommendation before
the BOP. Bussio and Gardner submitted the adverse BOP
recommendation to intimidate and chill Williams’ First
Amendment rights to (1) seek redress from the OCC as described
above; (2) seek redress from Utah State Courts regarding ITFA
records as described above; and (3) file grievances regarding the
ITFA and seizure of Williams’ privileged legal materials. 41
Thus, the Complaint states a claim upon which relief may be granted regarding Plaintiff’s
retaliation claim and the related conspiracy allegations. Therefore Defendants’ Motion to
Dismiss as to these claims and correlating defendants is denied.
38

Thornton v. GEO Group, Inc., No. CV 14-893 MCA/CG, 2016 U.S. Dist. LEXIS 140710, at *30 (D.N.M. May
16, 2016).

39

Motion to Dismiss at 17.

40

Complaint at 4N.

41

Id. at 4N-4V.

8

The remaining defendants in this case are named in the retaliation and related conspiracy
claims: M. Anderson, Turley, Bussio, Gardner, Smith, A. Anderson, and Casper (Remaining
Defendants). These defendants must move beyond their answers and motion to dismiss to the
next stage of the litigation. Every other defendant is dismissed with prejudice and is no longer
part of this case.
The Court now orders the Remaining Defendants to file a Martinez report 42 and
dispositive motion as follows:
(A) If Defendants wish to assert the affirmative defense of Plaintiff's failure to exhaust
administrative remedies in a grievance process, Defendants must,
(i)

within 90 days, prepare and file a Martinez report limited to the exhaustion
issue; and,

(ii)

within 120 days, file a separate summary judgment motion, with a supporting
memorandum.

(B) If Defendants choose not to rely on the defense of failure to exhaust and wish to
pierce the allegations of the Complaint, Defendants must,

42

See Martinez v. Aaron, 570 F.2d 317 (10th Cir. 1978) (approving district court’s practice of ordering prison
administration to prepare report to be included in pleadings in cases when prisoner has filed suit alleging
constitutional violation against institution officials).
In Gee v. Estes, 829 F.2d 1005 (10th Cir. 1987), the Tenth Circuit explained the nature and function of a
Martinez report, saying:
Under the Martinez procedure, the district judge or a United States magistrate
[judge] to whom the matter has been referred will direct prison officials to
respond in writing to the various allegations, supporting their response by
affidavits and copies of internal disciplinary rules and reports. The purpose of
the Martinez report is to ascertain whether there is a factual as well as a legal
basis for the prisoner's claims. This, of course, will allow the court to dig
beneath the conclusional allegations. These reports have proved useful to
determine whether the case is so devoid of merit as to warrant dismissal without
trial. Id. at 1007.

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(i) within 90 days, prepare and file a Martinez report addressing the substance of
the complaint; and,
(ii) within 120 days, file a separate summary judgment motion, with a supporting
memorandum.
(C) If Defendants wish to seek relief otherwise contemplated under the procedural rules
(e.g., requesting an evidentiary hearing), Defendants must file an appropriate motion
within 90 days of filing their answer.
The parties shall take note that local rules governing civil cases are in effect. The
Approved Amendments to the Local Rules and Updated Rules are posted on the Court's website.
This Court will order the parties to refile summary-judgment motions which do not follow the
standards. 43
Plaintiff is notified that Plaintiff may, within 30 days of its filing, respond to a Martinez
report if desired. Plaintiff is further notified that Plaintiff must, within 30 days of its filing,
respond to the summary-judgment motion. Plaintiff is finally notified that, when Defendants
move for summary judgment, Plaintiff may not rest upon the mere allegations in the complaint.
Instead, as required by Federal Rule of Civil Procedure 56(e), to survive a motion for summary
judgment Plaintiff must allege specific facts, admissible in evidence, showing that there is a
genuine issue remaining for trial.
No time extensions for either party will be granted between now and the time when the
Martinez report is produced and the summary-judgment motion and related responses and
objections are filed.

43

See, e.g., D. Utah Civ. R. 5-2 (Filing Cases and Documents under Court Seal); id. 7-1 (Motions and Memoranda);
Id. 26-2 (Standard Protective Order and Stays of Depositions); id. 56-1 (Summary Judgment: Motions and
Supporting Memoranda).

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ORDER
Accordingly, IT IS HEREBY ORDERED that:
(1) Defendants’ Motion to Dismiss is GRANTED as to all claims, except the retaliation
claim and its related conspiracy allegations, and as to all Defendants, except M. Anderson,
Turley, Bussio, Gardner, Smith, A. Anderson, and Casper (Remaining Defendants).
(1) Remaining Defendants must within 90 days file a Martinez report.
(2) When served with a Martinez report, Plaintiff may submit a response within 30 days
of the report’s filing date.
(3) Remaining Defendants must within 120 days file a summary-judgment motion.
(4) When served with a summary-judgment motion, Plaintiff must submit a response
within 30 days of the motion’s filing date.
(5) If requesting relief otherwise contemplated under the procedural rules, Remaining
Defendants must do so within 90 days.
(6) The parties are on notice that no extensions of time will be granted during the period
between now until when the Martinez report is produced and the summary-judgment motion and
related responses and objections are filed.
DATED this 29th day of September, 2017.
BY THE COURT:

CHIEF JUDGE DAVID NUFFER
United States District Court

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