an ITA account because otherwise, she "could not get food items
[from] the prison store"). Plaintiffs also have not stated that
they expected to earn interest on the money deposited in their
Additionally, as noted above, the uncontradicted evidence
shows that plaintiffs would receive very little interest on
their ITA deposits and that the costs of administering such a
system, if charged back to the inmates, would more than consume
the interest earned. Accordingly, any investment expectations
plaintiffs may have would not be met by the institution of an
interest-bearing ITA system. Therefore, plaintiffs have not
proffered evidence sufficient to raise a triable issue of fact
which could defeat summary judgment.
C. Character and Benefit of the Governmental Action
Though the plaintiffs do not argue this point, their claim of
an unconstitutional taking implies the argument that plaintiffs
have been singled out to bear the burden of providing funding
for the IWF program. However, in light of the uncontradicted
evidence that any interest earned by plaintiffs would be
swallowed by fees, the Court finds that plaintiffs "are in fact
bearing no burden at all." Texas Equal Access, 86 F. Supp.2d at
646 (finding that, because plaintiffs funds could not generate
interest without IOLTA, the "program costs Plaintiffs nothing").
It should be noted that at of October 1998, in apparent
response to the takings claims made in this lawsuit, defendant
ceased transferring the excess ITA funds in order to generate
interest for the IWF program. When that program was in effect,
however, the pooling of interest earned in the IWF offered
plaintiffs benefits that each individual prisoner's interest —
were it distributed — would not be able to provide. See Flores
Decl. ¶¶ 7, 9 (stating the IWF funds are used to improve prison
conditions and to provide library and visiting materials). More
importantly, IWF offers these benefits to the prisoners
themselves rather than transferring the benefits to a population
outside of the prison. See Washlefske, 60 F. Supp.2d at 541-43
(noting that the VDOC-administered accounts provided greater
benefit to prisoners than they would receive from their
individual interest payments); compare Texas Equal Access,
86 F. Supp.2d at 646-47 (upholding the constitutionality of IOLTA,
which transfers a paying client's interest benefit to the Texas
Equal Access to Justice Foundation in order to provide legal
services to poor);. Therefore, the Court concludes that
application of the interest earned on excess ITA funds to the
use of the Inmate Welfare Fund provided plaintiffs with a
benefit rather than an unwarranted burden.
2. Qualified Immunity
Terhune argues that he is entitled to qualified immunity from
damages because it was unclear whether plaintiffs had a
constitutional right to have ITA funds placed in interest
bearing accounts. Plaintiffs respond that the Constitution's
prohibition against governmental taking without just
compensation has been clearly established for centuries, and
that, as a trustee, Terhune has a fiduciary duty to assure that
funds in his care are invested productively. Therefore,
plaintiffs argue, their due process right to trust account
interest was well-established at all relevant times.
The defense of qualified immunity protects "government
officials . . . from liability for civil damages insofar as
their conduct does not violate clearly established statutory or
constitutional rights of which a reasonable person would have
known." Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct.
2727, 73 L.Ed.2d 396 (1982). The rule of qualified immunity
"`provides ample protection to all but the plainly incompetent
or those who knowingly violate the law.'" Burns v. Reed,
500 U.S. 478, 494-95, 111 S.Ct. 1934, 114 L.Ed.2d 547 (1991)
(quoting Malley v. Briggs, 475 U.S. 335, 341, 106 S.Ct. 1092,
89 L.Ed.2d 271 (1986)).
"Therefore, regardless of whether the constitutional violation
occurred, the [official] should prevail if the right asserted by
the plaintiff was not `clearly established' or the [official]
could have reasonably believed that his particular conduct was
lawful." Romero v. Kitsap County, 931 F.2d 624, 627 (9th Cir.
1991). The plaintiff bears the burden of proving the existence
of a "clearly established" right at the time of the allegedly
impermissible conduct. See Maraziti v. First Interstate Bank,
953 F.2d 520, 523 (9th Cir. 1992). If the plaintiff meets this
burden, then the defendant bears the burden of establishing that
his actions were reasonable, even if he violated the plaintiffs
constitutional rights. Doe v. Petaluma City Sch. Dist.,
54 F.3d 1447, 1450 (9th Cir. 1995); Neely v. Feinstein,
50 F.3d 1502, 1509 (9th Cir. 1995); Maraziti, 953 F.2d at 523.
In a similar action, Washlefske v. Winston, 60 F. Supp.2d 534
(E.D.Va. 1999), the court was presented with the comparable
issue of whether funds from prisoners' individual accounts and
funds in excess of the inmates' day-to-day expenses could be
pooled and the interest used to acquire items such as prison
library materials and exercise equipment. See id. at 534. In
that case, pursuant to Phillips, the court found that the
plaintiffs did in fact have a property interest in the interest
earned on their trust accounts. However, the Washlefske court
held that because use of the "minuscule amount of interest
earned" coupled with the facts that the Virginia Department of
Corrections both did not charge a fee for administering the
accounts and used the total interest for the benefit of the
inmates as a whole (rather than for the advantage of a
"third-party beneficiary"), there was not a taking in violation
of the Fifth and Fourteenth Amendments. See 60 F. Supp.2d at
Plaintiffs have not directed the Court's attention to any
other cases which hold that it is unconstitutional for the state
department of corrections to withhold de minimis interest
accruals in lieu of charging an administrative service fee or to
pool minimal interest accruals to provide funds for the
collective benefit of inmates. Therefore, the Court concludes
that defendant Terhune could have reasonably believed that
failure to account for any interest accrued on funds from ITAs
did not violate a clearly established constitutional right.
Accordingly, the Court finds that defendant is entitled to
qualified immunity from damages in the present suit.
3. Equal Protection Violation
Plaintiffs allege that state parolees are offered ITA accounts
which earn interest, while inmates are denied interest payments.
This difference in treatment between inmates and parolees,
plaintiffs assert, constitutes an equal protection violation.
Defendant argues that plaintiffs have neither presented evidence
that the state maintains ITA for parolees, nor met their burden
of showing an equal protection violation.
To establish an equal protection violation, plaintiffs must
show that the alleged actions taken by the state (1) had a
disparate impact on a suspect class and (2) was motivated by
discriminatory intent. See Washington v. Davis, 426 U.S. 229,
238-239, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976).
Plaintiffs' complaint contends that the state "gives parolees
interest on any accounts in the Inmate Trust Account, but not to
time-serving inmates." Compl. ¶ 40. However, plaintiffs have not
proffered evidence to the Court either that parolees are
provided with ITAs that earn interest or that ITAs are
maintained for parolees at all. Accordingly, the Court concludes
that there exists no genuine dispute of material fact and GRANTS
summary judgment for the defendant.
4. Preliminary Injunction
The Court has the authority to grant a preliminary injunction
exercise of its equitable powers. See Fed.R.Civ.P. 65. As the
Court is acting in equity, the decision to enter a preliminary
injunction is largely left to its discretion. See Big Country
Foods, Inc. v. Board of Educ. of Anchorage School Dist.,
868 F.2d 1085, 1087 (9th Cir. 1989). Traditionally, this rule has
been interpreted to require the trial court to consider the
likelihood that plaintiff will prevail on the merits and the
possible harm to the parties from granting or denying the
injunctive relief. See Arcamuzi v. Continental Air Lines,
Inc., 819 F.2d 935, 937 (9th Cir. 1987); Sierra On-Line, Inc.
v. Phoenix Software, Inc., 739 F.2d 1415, 1421 (9th Cir. 1984).
At the extremes, the party seeking injunctive relief must show
either (1) a combination of probable success on the merits and
the possibility of irreparable harm, or (2) that serious
questions are raised and the balance of hardships tips sharply
in the moving party's favor. See Miss World (UK) Ltd. v. Mrs.
America Pageants, Inc., 856 F.2d 1445, 1448 (9th Cir. 1988);
Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217
(9th Cir. 1987). "These are not two distinct tests, but rather
the opposite ends of a single continuum in which the required
showing of harm varies inversely with the required showing of
meritoriousness.'" Miss World, 856 F.2d at 1448 (quoting
Rodeo Collection, 812 F.2d at 1217). However, in any
situation, the Court must find that there is some threat of an
immediate irreparable injury, even if that injury is not of
great magnitude. Big Country, 868 F.2d at 1088 (citations
omitted); Oakland Tribune, Inc. v. Chronicle Publishing Co.,
Inc., 762 F.2d 1374, 1376 (9th Cir. 1985) (citations omitted).
In light of the Court's disposition on defendant's motion for
summary judgment, the Court concludes that plaintiffs have not
met their burden of showing a probability of success on the
merits. Nor have plaintiffs presented any evidence of the
possibility of irreparable harm or that the balance of hardships
tips in plaintiffs favor. Accordingly, plaintiffs' motion for
preliminary injunction is DENIED.
For the foregoing reasons, the Court GRANTS defendant's motion
for summary judgment and DENIES plaintiffs' motion for
IT IS SO ORDERED.