Vanderbilt Law Review, Taking an Interest in Inmate Trust Accounts, 2020

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VanCleave, Anna 7/3/2021
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TAKING AN INTEREST IN INMATE TRUST ACCOUNTS, 73 Vand. L. Rev. En Banc 143

73 Vand. L. Rev. En Banc 143

Vanderbilt Law Review En Banc
2020
Note

Charlotte Elama1
Copyright © 2020 Vanderbilt University Law School; Charlotte Elam

TAKING AN INTEREST IN INMATE TRUST ACCOUNTS
The Fifth Amendment’s Takings Clause is generally unconcerned about the size of property taken. But is it more concerned
about the person from whom the property is taken? When that person is a prisoner, courts have found the relevance of the
Takings Clause less clear. The Supreme Court has held that the interest earned on private accounts held by the
state--however minimal--is protected by the Takings Clause. Circuits are split, however, on the question of whether that
protection extends to the interest earned on inmate trust accounts. This Note examines the circuit split and considers other
paths to recovery for inmates. Finally, this Note argues that both stare decisis and the notion of the “positivist trap” in the
procedural due process realm indicate that courts should consider the interest earned on inmate trust accounts no differently
than they would other trust accounts. In other words, courts should recognize that Takings Clause protection does not stop
short of the interest earned on inmate trust accounts.
INTRODUCTION

144

BACKGROUND

146

A. Takings Clause Jurisprudence

146

B. Prison Law

150

C. The Circuit Split: Do Inmates Have a Protectible Property Interest in the Interest Earned on Inmate Trust
Accounts?

152

1. The Ninth Circuit Approach: Interest on Inmate Trust Accounts is Protectible

152

2. The Majority Approach: Denying Protection for Interest on Inmate Trust Accounts

155

3. Recent Cases: Skirting the Question

157

II.

RECOVERING INTEREST

158

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A. Inmate Trust Accounts

158

1. Why Interest Differs from Other Deductions

158

2. Statutory Distinctions

159

B. Takings Analysis

161

1. Protectible Property Interest?

161

a. The Interest Constitutes a Protectible Property Interest

161

b. Arguments Against Finding a Protectible Property Interest

164

2. Just Compensation

165

C. Other Avenues to Recovery

167

1. Federal Procedural Due Process Clause

167

2. State Constitutional Provisions

169

a. State Takings Clauses

170

b. Prisoner-specific Provisions

172

III.

TAKING AWAY THE POSITIVIST TRAP

CONCLUSION

173
176

*144 INTRODUCTION
Eddie’s mother forgoes paying her bills to send a money order to her son in Virginia’s Bland Correctional Center.1 What
Eddie does not spend on toothpaste, toilet paper, and perhaps an appointment with the doctor, he places in a compulsory
savings account.2 When he is released from incarceration following a twenty-year sentence, Eddie can bring the remaining
funds with him.3 In the meantime, interest accrues on his account.4 But Eddie will not be able to add the earned interest to the
sum he brings back home; instead, the interest will benefit the Department of Corrections.5
Eddie’s situation is not uncommon. The majority of states have widened opportunities for inmates to earn or receive money
while behind bars.6 Approximately half of the 2.3 million individuals incarcerated in the United States work for private or
state-owned businesses, in work-release programs, or, most commonly, in prison jobs *145 supporting the facilities.7 Outside
of Alabama, Arkansas, Florida, Georgia, and Texas, inmates often can earn wages8--on average, a maximum daily wage of
$3.45.9 Furthermore, inmates can receive funds from friends and family members or through benefits like Social Security,
Veterans Administration (“VA”) payments, or workers’ compensation.10
For safety reasons, the vast majority of prisons prohibit inmates from carrying money on their persons.11 As such, many
Departments of Corrections (“DOCs”) utilize some form of account system for inmates to deposit their funds.12 Prison
authorities generally have wide latitude over the management of these funds, such that they are able to deduct various fees
and costs according to their policies.13 Nevertheless, the ability to accumulate funds during incarceration can make a

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significant difference for an inmate, who can purchase snacks, hygiene products, or phone cards at the prison canteen while
building savings to ease the transition to life outside prison walls.14
Some of these statutory programs require inmate funds to be pooled together so that the total amount can generate interest.15
While a state may provide inmates the ability to receive their proportionate share of the interest, minus the costs of
maintaining the account,16 most do not. Rather, most state statutes allow their DOCs to spend the interest elsewhere, typically
on a common fund benefiting general prisoner welfare.17
*146 The question of whether state and federal DOCs’ appropriation of the interest earned on inmate trust accounts
constitutes a taking without just compensation in violation of the Fifth Amendment of the U.S. Constitution has divided
courts since the early 2000s.18 More specifically, courts disagree as to whether inmates even have a protectible property
interest in the interest earned on their savings accounts.19 The First, Fourth, and Eleventh Circuits have denied the existence
of such a right,20 but the Ninth Circuit has recognized a protectible property right in the interest earned on inmate trust
accounts given the common-law principle that “interest follows principal.”21 The Ninth Circuit’s determination trailed behind
two Supreme Court decisions holding that the “interest follows principal” rule applies in the takings context;22 nevertheless,
the majority of circuits distinguished inmates’ claims from those of non-incarcerated individuals.23
Part I of this Note describes the takings jurisprudence culminating in the circuit split over the question of whether a prison’s
appropriation of the interest generated from inmates’ trust accounts constitutes a taking under the Fifth Amendment. Part II
assesses whether or not interest earned on inmate trust accounts is a protectible property interest under the Takings Clause, in
addition to exploring other avenues to recovery for prisoners, specifically through procedural due process and state
constitutional law. Finally, Part III argues that stare decisis and the “positivist trap” concept rejected in procedural due
process jurisprudence demand that courts adopt the Ninth Circuit’s approach and hold that interest earned on inmate trust
accounts constitutes a protectible property interest.
I. BACKGROUND
A. Takings Clause Jurisprudence
Incorporated against the states in 1897, the Fifth Amendment forbids the government from “tak[ing]” “private property ... for
public *147 use, without just compensation.”24 To successfully make a takings claim, a plaintiff must show that the
government has appropriated a protectible property interest before demonstrating public use and measuring just
compensation.25 A court must determine whether an asserted interest constitutes property based on sources of authority
outside of the Constitution itself.26
Takings claims decided by the Supreme Court were sparse in the nineteenth century, and of those few, all involved physical
encroachment of real property in some form.27 In 1922, the Supreme Court initiated modern “regulatory takings” doctrine in
Pennsylvania Coal Co. v. Mahon, recognizing the possibility that a regulation can “go[ ] too far” and establishing a test that
evolved into the three-factor test of Penn Central Transportation Co. v. City of New York.28 The Court has distinguished
regulatory takings from “per se takings” that involve a direct “physical appropriation of property,” but both real and personal
property may serve as the subject of a takings claim.29 The Supreme Court has increasingly made clear that money qualifies
as private property under the Takings Clause.30
*148 The Supreme Court’s decision in Webb’s Fabulous Pharmacies v. Beckwith (“Webb’s”) serves as the primary starting
point to analyze the Takings Clause’s applicability to interest on private accounts held by the government.31 The appellant,
Eckerd’s of College Park, Inc. (“Eckerd’s”), filed a complaint of interpleader under Florida law after Eckerd’s learned of
Webb’s Fabulous Pharmacies’ substantial debt during the closing of an agreement to purchase substantially all of Webb’s
Fabulous Pharmacies’ assets.32 As part of the interpleader action, Eckerd’s furnished the court with the purchase price.33
Although the county clerk charged a separate fee for servicing the funds, the County retained the interest generated from the

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account as its own, pursuant to a Florida statute.34
The Court rejected the County’s argument that the deposited fund constituted “public money” while in the County’s care, a
contention stemming from the Florida Supreme Court’s holding that because the clerk would not have been able to invest the
fund without Florida’s statutory intervention, the County “[took] only what [the statute] create[d].”35 Rather, the Court
recognized the “usual and general rule” that interest on an interpleader fund “follows the principal” and belongs to the
ultimate owners of the principal-- not the state.36 The Court further distinguished the County’s action from mere use of police
power, instead finding the retention of interest analogous to state appropriation of private air space for military usage.37 Thus,
the County’s appropriation of the interest earned on the interpleader fund constituted a per se taking in violation of the Fifth
and Fourteenth Amendments.38
Almost twenty years later, the Court returned to the question of ownership of interest generated from a privately owned
principal in the care of the state.39 In Phillips v. Washington Legal Foundation, Texas’s Interest on Lawyers Trust Account
(“IOLTA”) program, which had counterparts in forty-eight other states and the District of Columbia, *149 came under
review.40 IOLTA programs use the interest earned on client funds held in trust by attorneys to fund legal services for
low-income populations.41 Before the inception of IOLTA programs in 1981, lawyers typically pooled client funds into
non-interest bearing, federally insured checking accounts, unless the deposit was large enough for an interest-bearing savings
account to be cost-effective.42 Federal law barred federally insured financial institutions from offering interest-bearing
checking accounts until 1980, when Congress lifted the restriction for non-profit organizations.43 Soon after, the Federal
Reserve Board laid the groundwork for IOLTA programs by interpreting this change to allow corporate funds to be deposited
in such interest-bearing accounts as long as the interest benefitted only charitable organizations.44 In 1984, the Supreme Court
of Texas required attorneys to place “nominal” client funds or funds “held for a short period of time”-- those an attorney
would not otherwise place in an interest-bearing savings account--into an IOLTA account.45 The interest generated from the
IOLTA checking accounts then benefitted nonprofit organizations providing legal services to the poor.46
In Phillips, the Court held that the interest generated from IOLTA accounts qualified as “private property” under the Takings
Clause.47 To reach this conclusion, the Court reasoned that property interests protected under the Constitution are discernible
“by reference to ‘existing rules or understandings that stem from an independent source such as state law.”’48 As such, the
Court relied on the common-law “interest follows principal” rule, invoking Webb’s.49 The Court addressed a similar
contention as that in Webb’s, where the interest was generated as a result of a Florida statute’s authorization of the county
clerk to invest Eckerd’s interpleader deposit. As such, the Court rejected the argument that the interest did not belong to the
client simply because the client’s principal would be unable to earn net interest without the IOLTA program or based on any
notion that the *150 interest constituted “government-created value.”50 Because the principal belonged to the client, the
interest necessarily belonged to the client as well.51 Still, Phillips decided only the narrow question of whether the interest
constituted “private property” under the Takings Clause, leaving the two other components of a Takings Clause
claim--whether Texas had “taken” the interest or owed any “just compensation”--unaddressed.52
Five years later, the Court tackled the remaining takings issues for IOLTA programs in Brown v. Legal Foundation of
Washington.53 Brown again involved client funds held in trust that earned interest for the Legal Foundation of Washington;
the funds supported legal services for low-income individuals but would otherwise have generated no net interest for the
clients themselves.54 After rejecting the argument that requiring the principal to be held in an IOLTA account constitutes a
taking from the beginning,55 the Court held that the appropriation of interest constituted a per se taking, not a regulatory
taking.56 Nevertheless, the Court reasoned that the Fifth Amendment did not demand just compensation in this case,
calculating just compensation based on “the property owner’s loss rather than the government’s gain.”57 Because the plaintiffs
suffered no net loss, they were entitled to no just compensation.58
B. Prison Law
The prison context makes applying Phillips and Brown to questions regarding interest earned on inmate trust accounts a
unique challenge for asserting both common-law and constitutional rights. At common law, a prisoner convicted of a felony

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or treason forfeited his personal property to the King, as offending the King’s peace by violating *151 the criminal law
undermined an individual’s property rights.59 Today, inmates do not possess a protectible property interest in any wages
earned from their labor; unlike laborers outside the prison context, inmates have no constitutional right to compensation for
their work.60 Although prisoners retain many of the protections ensured by the Constitution, the “needs and exigencies of the
institutional environment” may warrant limiting those rights in a given circumstance.61 For due process claims evaluated
under rational basis review, a prison regulation “is valid if it is reasonably related to legitimate penological interests.”62 Upon
incarceration, prisoners do not lose the right to “some kind of hearing” for procedural due process claims pertaining to
deprivations of property.63
Because prisoners’ property interests in the inmate trust account realm are statutorily created, procedural due process claims
must rely on the line of cases stemming from Goldberg v. Kelly.64 In 1970, the Supreme Court first recognized “new
property”--state-created property interests beyond traditional property rights--in Goldberg.65 Two years later, the Court
clarified the meaning of “liberty” and “property” protected by due process in Board of Regents of State Colleges v. Roth
(“Roth”), reasoning that the plaintiff possessed no protectible interest in continued employment because he had no valid
expectation of employment renewal and the state did not harm his ability to procure future employment.66
Later, the Court distinguished between liberty interests and property interests in the prison context in Sandin v. Conner,
defining liberty narrowly as “freedom from restraint [that] ... imposes atypical and significant hardship on the inmate in
relation to the ordinary incidents of prison life,” and some circuits have extended this “atypical and significant hardship”
requirement to property interests.67 While a *152 post-deprivation remedy for both negligent and intentional deprivations of
property executed by prison employees is generally sufficient to satisfy procedural due process requirements,68 routine
deprivations provided for in official administrative policy may require additional process.69 Still, courts are likely to grant
significant deference to prisons’ determinations of adequate process for deprivations of property.70 While due process claims
often prove unsuccessful for prisoners seeking to recover the interest earned on their trust accounts, due process concepts can
be helpful in resolving the circuit split over prisoners’ rights to the interest generated from inmate trust accounts under the
Takings Clause.
C. The Circuit Split: Do Inmates Have a Protectible Property Interest in the Interest Earned on Inmate Trust Accounts?
The following Section describes the circuit split over extending Takings Clause protection to interest earned on inmate trust
accounts. This Section first introduces the Ninth Circuit’s approach holding that the interest earned on inmate trust accounts
constitutes a protectible property interest, before detailing the approach adopted by the majority of circuits, which refuses to
extend Takings Clause protection. Finally, this Section pinpoints two recent cases that address the circuit split but avoid
deciding whether the interest is protectible under the Takings Clause.
1. The Ninth Circuit Approach: Interest on Inmate Trust Accounts is Protectible
Soon after the Supreme Court’s decision in Brown, the Ninth Circuit in Schneider v. California Department of Corrections
(“Schneider IV”) faced a question that had been rebounding to and from the district court even before Phillips: whether the
California DOC’s failure to pay interest earned on inmate trust accounts, instead appropriating the interest for an Inmate
Welfare Fund, constituted an unconstitutional taking under the Fifth Amendment.71 Because California law prohibited
inmates from possessing money in prison, *153 inmates had two options for depositing personal funds: the Bank of
America-administered Inmate Passbook Savings Account (“IPSA”), which paid interest directly to the prisoner, and the
Inmate Trust Account (“ITA”), which did not pay interest to the inmate.72 While California did not require inmates to use an
ITA, inmates would need an ITA with a minimum balance of $25.00 in order to establish an IPSA, and inmates could only
use ITA funds for prison canteen purchases.73 Because California incentivized inmates to establish an ITA despite the fact
that interest earned on ITA funds directly benefitted the Inmate Welfare Fund rather than the individual inmate whose
principal generated the interest, prisoners were effectively forced to choose between canteen purchases or interest with any
given deposit.74

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In a previous ruling in this case, the Ninth Circuit held that the interest constituted a protectible property right belonging to
the inmates.75 The district court had initially dismissed the prisoners’ suit, finding that the inmates lacked a protectible
property interest because they retained the option of depositing funds into an IPSA instead of an ITA.76 The Ninth Circuit
acknowledged that California statutory law’s explicit mandate that interest be deposited into the Inmate Welfare Fund did not
confer upon inmates a property right in the interest accruing to ITAs.77 Nevertheless, the court relied on Webb’s and Phillips
to assert the existence of a property interest independent of statutory law.78 The court rejected California’s attempt to use Roth
to limit protectible property interests only to those created by positive law, stating that Roth’ s framework for determining
property interests applied only to the “elevat [ion]” of rights to “new property.”79 Instead, the court found that the
common-law principle that “interest follows principal” is an “old property” right that cannot be revoked by statute.80 *154
Reasoning that “traditional ‘background principles’ of property law” determine the “core” meaning of “property” under the
Takings Clause, the Ninth Circuit asserted that the early English roots of the “interest follows principal” rule, in combination
with its embrace by U.S. courts, indicated that the common-law rule applied to interest from ITAs.81 Thus, the court found a
protectible property right in the interest generated by inmate trust accounts.82
Five years later in Schneider IV, the court held that the California DOC’s removal and subsequent depositing of inmates’
interest into the common prisoner fund constituted a per se taking for public use, violating the Fifth and Fourteenth
Amendments.83 About a month before deciding Schneider IV, the Ninth Circuit decided an almost identical issue in McIntyre
v. Bayer.84 McIntyre, the prisoner plaintiff, was similarly required to deposit personal funds in a personal property trust
account maintained by the state under Nevada law; his funds were to be pooled together with the funds of other inmates in
order to generate interest.85 The generated interest would contribute to “the welfare and benefit of all offenders” and,
according to the discretion of the Department of Prisons director, to a victims’ fund.86
Following a Ninth Circuit decision finding a statutory right to the interest generated from inmate trust accounts,87 Nevada
revised the statute at issue, adding that “the provisions of this chapter do not create a right on behalf of any offender to any
interest or income that accrues on the money in the prisoner’s personal property fund.”88 In spite of this statutory language,
the Ninth Circuit relied on Schneider II and held that the State’s appropriation of interest on inmates’ funds for the benefit of
the general prison population constituted a taking.89 The question of just compensation, though, was more complicated:
applying Brown’s measurement for just compensation based on net loss to the individual plaintiff, the court remanded
McIntyre’s claim.90 If McIntyre’s individually earned interest surpassed the costs associated *155 with maintaining his share
of the otherwise pooled personal property fund, then the State would owe just compensation.91
Schneider IV closely tracked McIntyre to hold that a taking occurred when the DOC applied interest earned on inmate trust
accounts to the Inmate Welfare Fund rather than paying interest to the inmates. Directly quoting McIntyre, the Ninth Circuit
held that the determination of just compensation required the “individualized analysis” of Brown.92 Thus, the court remanded
the case to determine whether the individual plaintiffs suffered a net loss of interest on their ITAs.93
2. The Majority Approach: Denying Protection for Interest on Inmate Trust Accounts
Unlike the Ninth Circuit, a majority of circuits distinguished inmate trust accounts from the IOLTA program at issue in
Phillips and Brown. The First, Fourth, and Eleventh Circuits have denied the existence of a protectible property right in the
interest earned on inmate trust accounts and, consequently, rejected inmates’ takings claims.94
In 2000, the Fourth Circuit held that the Takings Clause did not protect interest generated from the inmate trust account of the
plaintiff, Washlefske.95 Washlefske’s principal consisted of wages earned from prison labor, pooled together with the funds of
all other prisoners’ accounts.96 The DOC Director then invested the funds at his own discretion and spent the interest income
pursuant to statutory direction that the earned interest “may be used by the Director for the benefit of the prisoners under his
care.”97
The Fourth Circuit asked whether Washlefske possessed a protectible property right in the interest under “traditional rules of

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property law.”98 Because inmates do not have a common-law right to either the compensation from prison labor or access to
any personal *156 property whatsoever, Washlefske’s only right to the “wages” from his labor stemmed from positive law.99
The Virginia statute at issue therefore infringed upon no constitutional property right; it only created a “limited property right
[ ] for penological purposes.”100 Because Washlefske never had a common-law private property interest in his wages, he never
had a common-law property interest in his account; thus, the common-law rule that “interest follows principal” could not
apply to his principal amount.101 The court seemed to vacillate on the question of whether the state could appropriate
Washlefske’s principal balance, first suggesting that a statutorily created property interest not previously existing in the
common law could be appropriated as long as the state provided due process.102 Later, the court indicated that the Takings
Clause was not triggered because Virginia never took Washlefske’s statutorily created right to the principal balance.103
Regardless, no additional common-law rights attached to the statutorily created property interest.104 Rejecting the Ninth
Circuit’s conclusion, the Fourth Circuit found no property interest to protect under the Takings Clause.105
The Eleventh and First Circuits followed the Fourth Circuit’s lead. Former Alabama inmate and work-release participant
Givens claimed that Alabama’s refusal to pay interest on his Prisoner Money on Deposit (“PMOD”) account, pursuant to the
DOC’s internal manual, violated both federal and Alabama state constitutional prohibitions on takings without just
compensation.106 The Eleventh Circuit rejected Givens’s claim, mirroring the Fourth Circuit’s reasoning that Givens could not
invoke the “interest follows principal” rule without any Alabama statute, regulation, or policy conferring a private property
right in his interest, given prisoners’ forfeiture of property rights at common law and Givens’s limited, statutorily created
property right in *157 the principal.107 Likewise, in 2011, the First Circuit found no protectible property right in the interest
on inmate trust accounts when the Rhode Island DOC halted its practice of paying inmates their proportionate shares of the
interest earned on their pooled principals.108 The First Circuit found no positive law creation of a property right in the interest
earned on inmate trust accounts, and Rhode Island’s prior official policy of paying interest to inmates was merely “an act of
administrative generosity” that did not bind the state following the policy’s replacement.109 Thus, the First, Fourth, and
Eleventh Circuits rejected the Ninth Circuit’s finding of a protectible property interest in the interest generated from inmate
trust accounts.110
3. Recent Cases: Skirting the Question
Recently, courts addressing the problem of inmate trust accounts have avoided weighing in on the circuit split.111 In the 2015
Debrew v. Atwood decision, the D.C. Circuit declined to address the question of whether the plaintiff had a protectible
property interest in the interest earned on his deposit account in the first instance.112 On remand two years later, the U.S.
District Court for the District of Columbia similarly sidestepped the question, dismissing the federal prisoner’s takings claim
for lack of standing and failure to state a claim against individual defendants.113 In the same year, the U.S. District for the
District of Kansas likewise avoided ruling on the merits of the circuit split in Stewart v. Norwood by finding that Kansas law
expressly created a property right in the interest on Stewart’s account.114
*158 These cases highlight the lingering disagreement over the relevance of the common-law rule to interest in the prison
context; it remains unclear how to properly address a takings claim over interest earned on inmate trust accounts. The lack of
consensus is troubling: inmates with trust accounts do not know if they have a path to recover the interest earned on trust
accounts, and states cannot maintain an inmate trust account system with general welfare funds without risking litigation.
Moreover, the issue extends beyond the context of inmate trust accounts as courts grapple with the scope of protection that
the Takings Clause offers to statutorily created property interests.
II. RECOVERING INTEREST
Part II first examines some of the intricacies of inmate trust accounts, addressing the question of why an appropriation of
interest differs from other government deductions, as well as various bases for distinguishing inmate trust account regimes on
statutory grounds. Next, this Part tackles the takings analysis triggering the circuit split. It analyzes various arguments for and
against finding a protectible property interest in the interest generated from inmate trust accounts before turning to the

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question of whether just compensation is warranted. Finally, it considers the use of procedural due process claims and state
constitutional provisions as alternative avenues to recovery of the interest earned on inmate trust accounts. This Part suggests
that, although prisoner plaintiffs should explore alternative options for recovery, the interest earned on inmate trust accounts
should receive protection under the Takings Clause.
A. Inmate Trust Accounts
1. Why Interest Differs from Other Deductions
Courts must answer a threshold question before finding a property right in the interest earned on inmate trust accounts: why
should interest receive greater protection than the various fees and contributions that states are permitted to deduct from
inmates’ accounts?115 The withdrawal of maintenance or administrative fees is *159 not limited to the prison context--the
Court in Webb’s did not question the county clerk’s exaction of a statutory fee for administrative services.116 Prison
authorities generally have substantial leverage with which to control inmates’ funds, and courts generally reject inmates’
claims, even after finding a statutorily created property interest in the inmates’ funds.117 Thus, prisons may constitutionally
limit inmates’ access to wages regardless of inmates’ protected property interest.118 The critical difference lies in the purpose
of the taking; deductions for administrative and prison service costs, victim restitution, and required withholdings for
inmates’ later use do not constitute appropriations for “public use” warranting payment of just compensation.119 Such
deductions are subject to procedural due process protections but typically survive scrutiny, as they are reasonably related to a
legitimate penological interest.120
2. Statutory Distinctions
Statutory schemes regulating inmate trust accounts vary; as such, an inmate plaintiff may grapple with jurisdiction-specific
challenges in seeking compensation for interest earned on her trust account. First, the source of the principal may serve as a
distinguishing factor. Statutes establishing inmate trust account systems are often accompanied by a provision enabling
inmates to earn wages from their prison work,121 but the funds comprising the principal may also consist *160 of work-release
income;122 benefits like Social Security, VA payments, or workers’ compensation;123 or gifts from family and friends.124 For
example, VA benefits receive distinct statutory protections from taxation, creditors, and “attachment, levy, or seizure ...
before or after receipt by the beneficiary.”125 For funds deriving from non-wage sources, inmates may have a stronger claim
of entitlement even in a court adopting the majority approach because inmates’ lack of a common-law rights to wages would
not apply.126
Further, the particular government action itself can be determinative. For example, the First Circuit’s decision in Young v.
Wall may be limited to a DOC’s decision to halt the accrual of interest by switching from a system of pooled funds to
separate accounts for each inmate.127 Thus, Young’s holding is narrow, deciding only that inmates “lack a constitutionally
protected property right in interest not yet paid.”128 In the same vein, a Connecticut district court rejected an inmate’s takings
claim because no state statute mandated depositing inmates’ non-wage funds into an interest-bearing account.129 The core
takings problem, however, arises when a state uses the interest generated by inmate trust accounts to benefit the general
prison population.130
*161 B. Takings Analysis
Part II.B will assess prisoners’ claims for a protectible property interest and for just compensation under the Takings Clause,
in addition to the policy implications of each position.131
1. Protectible Property Interest?

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a. The Interest Constitutes a Protectible Property Interest
The most prominent argument for a protectible property interest in inmate trust account interest stems, of course, from the
Ninth Circuit. In Schneider II and McIntyre, the Ninth Circuit applied the common-law “interest follows principal” rule
without regard to the plaintiff’s status as an inmate.132 Without explicitly referring to inmates’ lack of personal property rights
at common law,133 the court in Schneider II elucidated its interpretation of the relationship between property interests for the
purpose of due process and takings analyses. The Takings Clause does not restrict states from “confer[ring] ‘new property’
status on interests located outside the core of constitutionally protected property,” but it does prevent states from intruding on
traditional rights.134
As a policy matter, the Ninth Circuit approach is appealing. Prisoners have a dignitary interest in retaining the interest earned
on their inmate trust funds, based on the same reasoning that legislatures have drawn upon to permit prisoners to earn wages
for their labor.135 Still, any personhood value assignable to interest may be small: from a Lockean perspective, the interest is
not “earned” through labor in the same sense that wages are,136 and money is merely fungible, unlike a piece of personal
property “bound up” with an individual’s sense of *162 identity.137 More poignantly, though, allowing prisoners to retain
interest could further the important goals of prisoner reentry and recidivism reduction. Access to more funds before
reentering society can ease an inmate’s transition and thereby facilitate an inmate’s pursuit of a law-abiding life after prison,
in addition to instilling a sense of accomplishment and dignity.138
Moreover, under Professor William Treanor’s political process reading of the Takings Clause, prisoners represent a discrete
minority group most deserving of Takings Clause protection.139 Treanor emphasizes that the Founders originally designed the
Takings Clause to prevent a majoritarian decision to take property specifically from a minority group incapable of defending
itself using the political process.140 While the common-law rule that prisoners forfeit property rights may indicate that
prisoners should not be considered a group warranting Takings Clause protection,141 the general disenfranchisement of
prisoners should nonetheless warrant this protection.142
Furthermore, Isaac Colunga argues that an inmate has a common-law property interest stemming from the “possession, use,
and disposition” of the principal deposited in the inmate’s trust fund.143 This argument has limited application, however, as a
prisoner’s rights to possess and use money are generally subject to many statutory *163 restrictions that stop short of
appropriating the entire balance of the prisoner’s account.144 For example, states may limit the amount a prisoner can
withdraw and limit what a prisoner can purchase.145 In Stewart v. Norwood, the court rejected Stewart’s procedural due
process and takings claims stemming from his restricted ability to send money from his VA benefits to family members in
excess of $40 per pay period, despite VA benefits’ special statutory protection from “fines, fees or payments.”146 If VA
benefits can be subject to stringent constraints, inmates arguably are entitled to less control over the use of funds earned
through prison labor. Even if some states do grant prisoners substantial control over their funds, as Colunga argues, this
approach would not extend to states that grant fewer rights to inmates with regard to trust fund usage.
Despite attempting to provide an alternative common-law approach that works within states’ statutory frameworks,
Colunga’s argument encounters the same problems as those in Schneider: because inmates begin with no common-law rights
to property, any additional statutory property rights may be strictly limited to those statutorily defined.147 As prisoners possess
various other property rights formerly unattainable, it is possible that the common law has since been “updated” to also
include a property interest in the interest generated from an inmate trust account.148 An attenuated argument at best, a holding
relying solely on “updated” common law would be extremely vulnerable to legislative overruling. Further, the argument
skirts the reasoning of the majority approach, which is based not merely on common-law property rights but on “traditional”
property interests protected at the time of the founding.149
In either case, though, the argument seems to penalize states that offer inmates greater control of their finances, thereby
creating perverse incentives overall for proponents of expanding prisoners’ *164 rights.150 The more usage rights a state
grants to an inmate, the greater likelihood that the inmate can claim a property interest in the interest generated from his
account.151 Thus, states may resist conferring increased property rights to prisoners, for fear of unwittingly infringing on
additional property rights that the legislature did not intend to create and thereby becoming amenable to suit.152

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b. Arguments Against Finding a Protectible Property Interest
Under the majority approach, prisoners’ only protectible property rights are those expressly created by statute. Thus, the
inmate’s trust fund principal receives Takings Clause protection, but the generated interest does not.153 This approach reasons
that because prisoners lacked any right to personal property at common law, an inmate would have no property interest in
wages from prison labor without statutory intervention; common-law property rights would not apply to a limited, statutorily
created property interest.154 This analysis fails to recognize the full implications of refusing to apply common-law rights to a
statutorily created right. The majority approach invokes the common-law rule that a convicted criminal “forfeited all rights to
personal property,”155 yet fails to acknowledge that inmates today retain some rights over personal property.156 Further, the
majority approach does not account for the Court’s emphasis on government intervention; the mere fact that rights to a
principal would not exist without government action does not nullify common-law rights once the right to the principal
attaches.157
*165 Modern regulatory takings analysis reaches the same conclusion.158 In her Note advocating for the adoption of the
regulatory takings approach, Rebecca Rogers argues that courts should consider interest as merely a right attaching to the
principal.159 Drawing from Justice Breyer’s dissent in Phillips, Rogers contends that government appropriation of interest
should merely affect the overall economic value of owning the principal rather than constituting a total taking of a separate
property interest.160 The Phillips majority, however, rejected this analysis, instead reasoning that the common-law “interest
follows principal” rule indicates that the interest comprises a distinct property interest.161 Deeming the interest generated from
inmate trust accounts outside the purview of the Takings Clause could carry multiple policy benefits. In terms of institutional
capacity, such a finding would allow legislatures to grant rights to prisoners without incurring further unexpected duties to
prisoners, and it would allow prison administrators to make appropriate decisions regarding the safety and well-being of the
prison environment, a task for which courts are less equipped.162 Further, corrections facilities may benefit from increased
administrative efficiency. The interest funds could offset high incarceration costs for taxpayers or contribute to facilities for
prisoners themselves which otherwise may be unattainable.163 Such advantages, however, are always a consequence of a
government taking for public use, and the temptation to reap these benefits is largely the reason why individual protections
under the Takings Clause required constitutionalizing in the first place.164
2. Just Compensation
Even if a court recognizes inmates’ protectible property right in inmate trust accounts’ generated interest, a plaintiff would
still need to *166 prove “net harm” in order to receive just compensation.165 Because most courts have ended their takings
analysis after the property interest inquiry, the case law on just compensation in the context of inmate trust accounts is thin.166
The Ninth Circuit invoked Brown’s method of calculating just compensation when requiring an “individualized analysis” to
determine whether the specific claimant’s earned interest exceeded the costs of maintaining his share of the account, rather
than calculating the aggregate costs of managing inmate trust accounts, which contain the funds of many inmates.167 This
method of analysis, however, seems to contradict a component of Brown’s holding.168 The Brown Court found that the
plaintiffs suffered no “net loss” because the plaintiffs would not have otherwise been able to earn interest given the statutory
restrictions on attorney trust accounts.169 McIntyre and Schneider seem to ignore this facet of the just compensation analysis
for interest: at least in California prisons, inmates essentially had no other option but to place their funds in the California
DOC’s account system.170
Nevertheless, Professor Christopher Serkin’s reconciliation of Brown’s “net harm” rule with the standard assessment of fair
market value sheds light on this discrepancy.171 If the “net loss” rule is simply a “fact-specific application of fair market
value,” then the Ninth Circuit simply determined that the prison context is distinguishable from the statutory scheme for
IOLTA accounts.172 Under this view, a court need only calculate the valid deductions and administrative fees applied to an
inmate’s account to determine the individual’s share of interest.173 This approach salvages the “net loss” rule from
undermining not only *167 inmates’ takings claims for interest, but also potential claims for government appropriations of

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“new property,” as Justice Scalia iterated in his Brown dissent.174 A state, however, may still be able to deploy Brown:
because individual inmates would have no other way to earn interest on their accounts beyond those maintained by the state,
an inmate will have suffered no net loss.175 With inmates typically earning such low wages,176 it is likely that administrative
costs will frequently outweigh an inmate’s individualized earned interest. Where funds originate from other sources, though,
an inmate may actually build a substantial principal, especially when compared to other inmates’ savings.177 The Takings
Clause operates regardless of the size of compensation warranted, however.178
C. Other Avenues to Recovery
1. Federal Procedural Due Process Clause
A due process claim would likely face the same difficulties as a takings claim in the context of inmate trust accounts and,
even if successful, would only provide enhanced procedural protections rather than compensation.179 Like the Takings Clause,
procedural due process protects only preexisting property rights, including state-created property rights, from deprivation
without proper procedural requirements.180 In Vance v. Barrett, the Ninth Circuit found that an agreement conditioned upon
inmates’ waiver of net interest triggered procedural due process rights when a Nevada statute explicitly conferred upon
inmates the right to interest.181 In contrast, the First Circuit rejected the inmate plaintiff’s procedural due process claim where
the Rhode Island legislature had conferred no property right to *168 interest to prisoners.182 Similarly, the court in Stewart v.
Norwood, while ultimately rejecting any claimed right to the current use of the plaintiff’s funds, addressed the Tenth Circuit’s
ambiguity over the question of inmates’ property interest in the principal funds in their accounts by emphasizing the
distinctive protections afforded to VA benefits.183 Thus, in the absence of a statutory right to interest, a due process claim
poses the same challenges as the requirements for a takings claim.184
A potential due process claim may still provide hope for inmates seeking some form of redress if a court finds that the
interest earned on inmate accounts is a protectible property interest but that no just compensation is due, as in Schneider IV.185
Even if an inmate cannot receive just compensation, due process may afford the minimal protections of notice and hearing.186
While due process seems an unlikely avenue for prisoner plaintiffs to reclaim a property interest in the interest generated
from their trust accounts--let alone full compensation for the appropriated funds--the recognition of statutorily created
property rights in the due process context is significant in light of the circuit majority’s refusal to apply a common-law rule to
a statutorily created right.187
Indeed, due process analysis may provide a helpful analog by which to argue for the existence of a protectible right under the
Takings Clause. When determining the existence of a protectible property interest in the takings context, courts typically cite
Roth to hold that state law defines the boundaries of protectible property rights.188 Professor David Super suggests that courts
incorporate “new property” concepts into Takings Clause analyses to further the Takings Clause’s goal of protecting
dependent minority groups from majoritarian appropriations.189 He argues that the Court’s recent invocation of reliance
interests supports finding a property interest where a claimant relies upon a benefit conferred gratuitously by the legislature.190
Thus, *169 a creative litigant could invoke the Due Process Clause’s goal of protecting reliance interests that a state has
“created or helped to define” by contending that a state’s creation of a right to the principal inherently creates a reliance
interest in the ensuing interest.191 The Ninth Circuit in Schneider II, however, distinguished the concept of “new property”
from the “interest follows principal” rule, reasoning that the latter fell within the “core” of Takings Clause protection and
therefore did not face Roth’s limitations.192 Thus, a key issue is whether the “interest follows principal” rule can be applied to
new property, or whether the Due Process Clause and the Takings Clause each require distinct modes of analyzing whether a
claimed property interest warrants constitutional protections.193 This question likewise asks whether the problem of the
“positivist trap” applies in the takings context: in other words, whether novel state-created property interests can lie outside
the scope of the Takings Clause simply because they are the product of state creation.194 Ultimately, the problem of the
positivist trap provides a persuasive basis for recognizing Takings Clause protection for the interest earned on inmate trust
accounts.195

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2. State Constitutional Provisions
In Givens v. Alabama Department of Corrections, the Eleventh Circuit assumed that the federal and Alabama Takings
Clauses have the same meaning because they have “virtually identical wording” without providing further analysis.196 State
courts, however, began interpreting state constitutional provisions protecting citizens from government takings of private
property well before federal courts.197 *170 Thus, state constitutional law can serve as a fruitful avenue for making takings
claims beyond the reach of the circuit majority’s takings interpretation.198 State constitutional takings provisions, framed in
whatever form,199 however, do not constitute the sole resource for inmates seeking compensation for their appropriated funds,
as many state constitutions also include provisions directly related to prisoners’ labor and welfare.
a. State Takings Clauses
Many state Takings Clauses largely concern eminent domain and seem to limit protection to government appropriation of
real property.200 While the “interest follows principal” line of takings cases technically falls within federal Takings Clause
jurisprudence, inmate plaintiffs could argue that the “interest follows principal” rule likewise applies to state Takings
Clauses. Some state court decisions already evince a willingness to recognize interest as a protectible property interest. For
example, the Court of Appeals of Wisconsin distinguished from Webb’s a takings claim over interest generated by a
condemnation award held by a circuit court clerk pending appeal.201 The Court did not find a taking under the Wisconsin
Constitution because the interest retained under the challenged state law constituted only a service fee, and the owners of the
principal balance had a right to withdraw funds and invest elsewhere.202 Under this analysis, interest from an inmate trust
account is more closely related to that in Webb’s because in both cases the plaintiffs were required to deposit the principal
balance with the government, and both were charged separate services fees.203
*171 The Supreme Court of Montana’s decision in Siroky v. Richland County likewise provides hope for inmates seeking to
recover the interest earned on their trust accounts.204 The Court adopted the “interest follows principal” rule to find that a
county’s retention of the interest earned on a criminal defendant’s cash bond constituted a taking, in violation of Montana’s
Takings Clause.205 The court examined the statutory scheme regulating bail conditions, noting that the court was required to
return the cash deposit following the performance of the defendant’s obligations; the relevant statutes were silent as to the
interest earned on the cash deposit while in the County’s possession.206 Applying the Supreme Court’s reasoning in Webb’s,
the court determined that because the cash deposit remained the claimant’s private property the entire time the County held
the deposit, the interest must also belong to the claimant under the “interest follows principal” rule.207 While the court did
acknowledge that the claimant had not yet been convicted while the deposit earned interest, the court did not posit this factor
to contrast this case with a convicted inmate but rather to explain the court’s fear that allowing the county to retain the
interest would create perverse incentives by encouraging the county to delay trials in order to maximize profit for the State.208
Finally, the court compared the interest on the cash bond to “dividends on a deposit of stocks or bonds or the appreciated
value on a pledge of real estate,” noting that a State appropriation of either would be unconstitutional.209 State courts in
Michigan, North Carolina, and Ohio have likewise held that interest can be a protectible property interest under state Takings
Clauses.210
*172 While state Takings Clause protections for interest do not necessarily resolve the problem of inmates’ lack of
common-law rights, state constitutional law provides an alternate path to recovery for prisoners. Because state courts are not
bound to interpret their own constitutions in the same manner as the federal Constitution, the rationale underlying the Ninth
Circuit’s approach remains a feasible possibility for prisoner plaintiffs.211
b. Prisoner-specific Provisions
A prisoner-plaintiff may find state constitutional provisions specifically addressing prisoner treatment to provide an
additional avenue for attack. Some states include constitutional provisions delineating the specific goals of incarceration and
prescribing certain rights for prisoners. Illinois, Indiana, New Hampshire, and Wyoming identify rehabilitation as the central

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purpose of their criminal justice systems.212 A rule that enables prisoners to improve their financial stability, particularly upon
re-entry into society, and that encourages individual responsibility comports well with the goals of restoration and
reformation.213 Such a principle indicates acceptance of prisoners’ rights to the interest earned on their trust accounts.
Nevertheless, it is more likely that a prisoner-specific state constitutional provision will do little to assist an inmate seeking
compensation for interest earned on his trust account. New York, New Mexico, Kentucky, Mississippi, and Oregon
specifically regulate prison work programs in their constitutions.214 In New York, the legislature is constitutionally required to
“provide for the occupation and employment of prisoners”; the same provision allows the legislature to allow public
institutions to benefit from “the products of [prisoners’] labor.”215 New Mexico’s Constitution directly addresses inmate *173
earnings, explaining that “[t]he penitentiary is a reformatory and an industrial school” in which prisoners must be employed
in some capacity and that dependent families of prisoners should receive inmates’ net earnings.216 While these provisions may
reinforce a prisoner’s claim to interest in the sense that inmate employment is constitutionally required, such support would
likely be minor.
Kentucky and Mississippi’s provisions are generally neutral to a prisoner’s interest claim. The Kentucky Constitution limits
when and where prisoners may work217 and empowers the Commonwealth to “maintain control of the discipline, and provide
for all supplies, and for the sanitary condition of the convicts.”218 Mississippi’s Constitution similarly enables its legislature to
provide for inmate employment, delimiting the scope of such employment, in addition to allowing the state to institute
reformatory schools or “prison industries programs” employing inmates.219 Oregon specifically restricts the uses to which
inmate compensation can be applied-- none of which include an inmate’s personal use--and prescribes that any income
earned from prison work programs benefit only those work programs.220 Inmates’ rights to compensation itself are limited
beyond even those limitations intrinsic to legislatively facilitated deductions: thus, the provision seems to leave little room for
inmates seeking to claim a personal property in interest.221
III. TAKING AWAY THE POSITIVIST TRAP
Although state constitutional provisions and the federal Due Process Clause offer potential avenues to recovery, the interest
generated from inmate trust accounts should remain within the purview of the Takings Clause. Based on an application of
Phillips v. Washington Legal Foundation and the Supreme Court’s procedural due process jurisprudence, courts should adopt
the Ninth Circuit’s approach and find that a state’s appropriating interest from inmate trust accounts constitutes a taking in
violation of the Fifth Amendment.222 *174 Phillips involved essentially the same circumstances as the prison cases. Both a
lawyer’s client and a prisoner begin in the same situation: they are unable to place particular funds in an interest-bearing
account absent government intervention.223 Both Justice Souter’s and Justice Breyer’s Phillips dissents emphasized the fact
that without the IOLTA program, a client would otherwise be unable to earn any interest on her funds held in trust by her
attorney.224 By rejecting the Phillips dissenters’ reasoning, the Court refused to limit an individual’s right to interest based on
the fact that the individual could not have otherwise earned interest.225
Thus, in Phillips, once the legislature intervened, it could not subsequently limit the common-law rights attaching to the
account.226 Likewise, in the inmate trust account context, the legislature overrode prisoners’ lack of common-law rights to
property to create a property interest in the principal amount that could then generate interest.227 Once the legislature created
that property right, and the inmate’s right to interest vested through the building of a principal balance, the state should not be
able to choose which common-law rights then attach to the vested property right.228
By failing to recognize the attachment of common-law rights to statutorily created property, courts risk falling into the
“positivist trap” criticized in the procedural due process realm.229 The Supreme Court’s decision in Arnett v. Kennedy, which
held that the fulfillment of statutory procedures satisfied due process requirements prior to the termination of a statutorily
created liberty interest, exemplifies the *175 problem of the positivist trap.230 In Arnett, Justice Rehnquist’s plurality opinion
held that beneficiaries of statutorily created liberty--and, by inference, property-- interests “must take the bitter with the
sweet.”231 The Court later rejected this principle in Cleveland Board of Education v. Loudermill, holding instead that
constitutional procedural guarantees applied even to state-created property subject to statutory procedures.232 Justice Scalia

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invoked this problem in his Brown dissent, criticizing the majority for deciding that “there is no taking when ‘the State
giveth, and the State taketh away.”’233 He explicitly references the concept of new property, asking whether the “government
may now seize welfare benefits, without paying compensation, on the ground that there was no ‘net loss.”’234 While Justice
Scalia’s comment focused on the majority’s refusal to find just compensation for a taking, the principle extends to the finding
of a protectible property interest.235
The Phillips Court rejected in the Takings Clause context what would be called “tak[ing] the bitter with the sweet” in the
procedural due process context.236 Professor Thomas W. Merrill noted that the Phillips Court did not “look to all relevant
provisions of state law” under which the client would have no property in the interest: Texas Supreme Court rules already
provided that any funds that “would not earn net interest in a separate account must be placed in an IOLTA, and if placed in
an IOLTA, those funds would not earn interest for the client.”237 Thus, in Phillips, the Court looked first to whether state law
has created a property interest in the principal; if the answer is in the affirmative, common-law rights apply.238 By rejecting
inmates’ claims, the majority of circuits fall prey to the positivist trap by concluding that traditional property rights do not
apply to statutorily created rights. Recognizing prisoners’ common-law right to the interest generated from inmate trust
accounts both reflects Phillips’s reasoning and learns from the lessons taught by procedural due process jurisprudence.
*176 CONCLUSION
At first glance, the divide over interest earned on inmate trust accounts may appear trivial. The amount of interest at issue is
generally small--so small that an award of just compensation is unlikely because the costs of account administration probably
surpass the amount of interest itself.239 But relative size of encroachment is not a threshold requirement for application of the
Takings Clause in a per se takings context.240 Rather, the protection of inmates’ rights to the interest generated on trust
accounts administered by prisons strikes at the heart of the Takings Clause--defending an individual, particularly a politically
powerless minority, from the intrusions of the majority.
State constitutional law, through state Takings Clauses or prisoner-specific provisions, offers a potential alternative avenue to
vindicate the interests of prisoners. But prisoner plaintiffs should still prevail under the federal Takings Clause. An inability
to earn interest based on one’s status as a prisoner and an inability to earn interest based on regulations on client trust
accounts is not a meaningful distinction when considering the application of traditional property rights to statutorily created
property under the Takings Clause. The Ninth Circuit’s approach to whether the interest earned on inmate trust accounts
should constitute a protectible property interest under the Takings Clause avoids the positivist trap into which the circuit
majority falls.

Footnotes

J.D. Candidate, 2020, Vanderbilt University Law School; B.A., 2016, Vanderbilt University. Many thanks to my
husband John for unwavering patience and support; to my parents, Nick and Kathie; and my siblings, Caroline and
Nicholas. I am also grateful for Associate Dean for Academic Affairs Christopher Serkin for his feedback in
developing this Note, for Professor Daniel J. Sharfstein for his inspiring Property course, and for the members of
Vanderbilt Law Review En Banc.

Daniel Wagner, Meet the Prison Bankers Who Profit from the Inmates, TIME (Sept. 30, 2014),
http://time.com/3446372/criminal-justice-prisoners-profit/ [https://perma.cc/AY4A-VF25].

Id.

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Id.

See Wendy Sawyer, How Much Do Incarcerated People Earn in Each State?, PRISON POL’Y INITIATIVE (Apr.
10, 2017), https://www.prisonpolicy.org/blog/2017/04/10/wages/ [https://perma.cc/JA6J-B3KB].

Daniel Moritz-Rabson, ‘Prison Slavery’: Inmates Are Paid Cents While Manufacturing Products Sold to Government,
NEWSWEEK
(Aug.
28,
2018,
5:12
P.M.),
https://www.newsweek.com/prison-slavery-who-benefits-cheap-inmate-labor-1093729
[https://perma.cc/ZK69-YCBV]; Sawyer, supra note 6.

Moritz-Rabson, supra note 7.

Sawyer, supra note 6 (noting that the “average maximum daily wage for the same prison jobs has declined ... from
$4.73 in 2001 to $3.45 [in 2017]”).

See
Stewart v. Norwood, No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *7 (D. Kan. 2017)
(describing a Kansas DOC regulation prohibiting DOC collection of funds derived from social security benefits, VA
benefits, and workers’ compensation benefits); Wagner, supra note 1.

See, e.g.,

Schneider v. Cal. Dep’t of Corr. (Schneider II), 151 F.3d 1194, 1195 (9th Cir. 1998).

See, e.g., HAW. REV. STAT. ANN. § 354D-13(b) (LexisNexis 2018); TENN. CODE ANN. § 41-6-206(a)(5) (2018);
WYO. STAT. ANN. § 7-16-205 (2018).

See, e.g.,
Vance v. Barrett, 345 F.3d 1083, 1089-90 (9th Cir. 2003) (rejecting inmates’ takings claim for
deductions exacted from their accounts to compensate for “expenses incurred in creating and maintaining the inmates’
accounts”).

See Sawyer, supra note 6 (charting the wages paid to prisoners in different states).

See, e.g.,

f OSchneider v. Cal. Dep’t of Corr. (Schneider IV), 345 F.3d 716, 721 (9th Cir. 2003).

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E.g., KAN. STAT. ANN. § 76-175(b) (2018).
See, e.g.,

Schneider IV, 345 F.3d at 719.

U.S. CONST. amend. V;
(D. Kan. 2017).

Id.

Young v. Wall, 642 F.3d 49, 51-52 (1st Cir. 2011);
Givens v. Ala. Dep’t of Corr., 381 F.3d 1064, 1068-69
(11th Cir. 2004);
Washlefske v. Winston, 234 F.3d 179 (4th Cir. 2000).

Stewart v. Norwood, No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *27-28

Schneider v. Cal. Dep’t of Corr. (Schneider II), 151 F.3d 1194, 1201 (9th Cir. 1998).
See
Brown v. Legal Found. of Wash., 538 U.S. 216, 235 (2003);
164-66 (1998).
See

te.,Washlefske, 234 F.3d at 179;

U.S. CONST. amend. V;
See e.g.,

Phillips v. Wash. Legal Found., 524 U.S. 156,

Givens, 381 F.3d at 1068-69;

Young, 642 F.3d at 51-52.

Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226 (1897).

Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161 (1980).

See id. Most courts cite
Board of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972) as establishing the
standard by which to determine whether a particular property interest is protectible: “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.”

See William Michael Treanor, The Original Understanding of the Takings Clause and the Political Process, 95
COLUM. L. REV. 782, 794-96 (1995) (describing takings claims in the Supreme Court before 1870).

Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104 (1978);
(1922); see Treanor, supra note 27, at 798.

Pa. Coal Co. v. Mahon, 260 U.S. 393, 415

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Horne v. Dep’t of Agric., 135 S. Ct. 2419, 2427-28 (2015); see also
Loretto v. Teleprompter Manhattan Catv
Corp., 458 U.S. 419, 435 (1982) (reasoning that “a permanent physical occupation ... is perhaps the most serious form
of invasion of an owner’s property interests”).

See
Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155 (1980). Nevertheless, the disagreement in
Eastern Enterprises v. Apfel highlights the Court’s struggle to define the extent to which property interests in money
or net worth are protected by the Takings Clause.
524 U.S. 498 (1998) (plurality opinion) (recognizing money, in
the form of a statutorily imposed financial obligation, as a property interest protected by the Takings Clause over
Justice Kennedy’s and the dissenters’ view that the Due Process Clause controlled). Scholars wrangle with the
question of whether the government’s appropriation of money should be grounds for a takings claim. E.g., RICHARD
A. EPSTEIN, TAKINGS: PRIVATE PROPERTY AND THE POWER OF EMINENT DOMAIN 283-329 (1985)
(assessing and questioning the constitutionality of taxation and wealth redistribution programs); Thomas W. Merrill,
The Property Strategy, 160 U. PA. L. REV. 2061, 2064 (2012) (“An interesting question debated by contemporary
English philosophers is whether something that has exchange value and nothing else, such as a bank account balance,
should be regarded as ‘property.”’). Although an intriguing topic, this question is outside the scope of this Note.

Webb’s Fabulous Pharmacies, 449 U.S. 155.

Id. at 156-57.

Id. at 157.

Id. at 155-56. The Court “noted probable jurisdiction” based on two state supreme court cases involving
unconstitutional takings of private funds tendered in other interpleader actions.
Webb’s Fabulous Pharmacies, 449
U.S. at 159 (referencing
Sellers v. Harris County, 483 S.W.2d 242 (Tex. 1972) and
McMillan v. Robeson
County, 262 N.C. 413 (1964)).

Id. at 158-59, 163.

Id. at 162.

Id. at 163-64 (citing

Id. at 164-65.

United States v. Causby, 328 U.S. 256 (1946)).

Phillips v. Wash. Legal Found., 524 U.S. 156 (1998).

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Id. at 159-60.

Id. at 160.

Id. at 160-61.

Id.

Id. at 161.

Id. at 161-62 (citing Tex. State Bar Rule, Art. XI, § 5(A); Rules 4, 7 of the Texas Rules Governing the Operation of
the Texas Equal Access to Justice Program; Texas IOLTA Rule 6).

Id. at 162.

Id. at 160.

Id. at 164 (quoting

Id. at 165-66 (1998) (citing Beckford v. Tobin, 1 Ves. Sen. 308, 310, 27 Eng. Rep. 1049, 1051 (Ch. 1749)).

Id. at 169-71;

Bd. of Regents of State Colleges v. Roth, 408 U.S. 564, 577 (1972)).

Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 158-59, 163 (1980).

Phillips, 524 U.S. at 164-66.
Id. (citing U.S. CONST. amend. V).
Brown v. Legal Found. of Wash., 538 U.S. 216 (2003).
Id. at 229-30. The Court decided Phillips while Brown was pending appeal in the Ninth Circuit. A three-judge
panel on the Ninth Circuit initially held that the appropriation constituted a taking but remanded to determine just
compensation. Upon reconsideration en banc, however, a majority found no taking under the three-factor regulatory
takings analysis, or alternatively, no just compensation, even if there had been a taking.
Wash. Legal Found. v.
Legal Found. of Wash., 236 F.3d 1097 (9th Cir. 2001), rev’d en banc,
271 F.3d 835 (9th Cir. 2001), rev’d sub
nom,
Brown v. Legal Found. of Wash., 538 U.S. 216, 230-31 (2003).

WESTlAW

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Brown, 538 U.S. at 234.

Phillips, 524 U.S. at 231, 235; see

Brown, 538 U.S. at 235-36.

Id. at 237.

Loretto v. Teleprompter Manhattan Catv Corp., 458 U.S. 419 (1982).

Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 682 (1974) (citing 1 WILLIAM BLACKSTONE,
COMMENTARIES *299).

See, e.g.,
Washlefske v. Winston, 234 F.3d 179, 184-85 (4th Cir. 2000);
(8th Cir. 1995).

Wolff v. McDonnell, 418 U.S. 539, 555-56 (1974) (“There is no iron curtain drawn between the Constitution and
the prisons of this country.”); see also
Turner v. Safley, 482 U.S. 78, 89 (1987).

f O

Turner, 482 U.S. at 89.

Wolff, 418 U.S. at 557-58.

397 U.S. 254 (1970).

Jennings v. Lombardi, 70 F.3d 994

Id. (holding that a welfare recipient had a right to a hearing before the termination of his benefits); see Kaitlin Cassel,
Due Process in Prison: Protecting Inmates’ Property After Sandin v. Conner, 112 COLUM. L. REV. 2110, 2114
(2012); Charles A. Reich, The New Property, 73 YALE L.J. 733 (1964).

408 U.S. at 570-74.

Sandin v. Conner, 515 U.S. 472, 484 (1995); see Cassel, supra note 65, at 2133.

Hudson v. Palmer, 468 U.S. 517, 533 (1984).

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See Marianne Sawicki, Comment, Empathy for the Devil: How Prisoners Got a New Property Right, 116 PENN. ST.
L. REV. 1209, 1215 (2012) ( “When the state takes funds from inmate accounts under terms of an established policy,
courts usually require that policy to provide for predeprivation hearings.”).
See e.g.,

Sickles v. Campbell Cty., 501 F.3d 726 (6th Cir. 2007); Sawicki, supra note 69, at 1221.

0 345 F.3d 716, 718-19 (9th Cir. 2003).

Schneider II, 151 F.3d 1194, 1195 (9th Cir. 1998).

Id.

CAL. PENAL CODE § 5008 (West 1981) (amended 2009);
Schneider II, 151 F.3d at 1195-96. The Inmate
Welfare Fund, established “for the benefit, education, and welfare of inmates,” benefitted prison services such as
canteens and hobby shops. CAL. PENAL CODE § 5006 (West 1981) (amended 2014). As part of the ITA
authorization process, the inmate would also agree that any ITA interest would be placed into the Inmate Welfare
Fund.
Schneider II, 151 F.3d at 1195-96; 15 CAL. CODE REGS. tit. 15 § 3075.1(d)(3) (2012) (amended 2018).

Schneider II, 151 F.3d at 1201.

Schneider v. Cal. Dep’t of Corr. (Schneider I), 957 F. Supp. 1145, 1149 (N.D. Cal. 1997).

CAL. PENAL CODE § 5008 (West 1981) (amended 2009);
Schneider II, 151 F.3d at 1198- 99 (distinguishing the
California statute from the statute at issue in
Tellis v. Godinez, 5 F.3d 1314 (9th Cir. 1993)).

Schneider II, 151 F.3d at 1199.

Id. at 1200-01.

Id. (“States may, under certain circumstances, confer ‘new property’ status on interests located outside the core of
constitutionally protected property, but they may not encroach upon traditional ‘old property’ interests found within
the core.”); see
Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972).
Schneider II, 151 F.3d at 1201.

WESTlAW

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Id.

0 Schneider IV, 345 F.3d 716, 720-22 (9th Cir. 2003).

339 F.3d 1097 (9th Cir. 2003).

Id. at 1098; see

NEV. REV. STAT. § 209.241(1) (LexisNexis 1995).

NEV. REV. STAT. § 209.221(3),

209.463(1)(a) (LexisNexis 1995);

McIntyre, 339 F.3d at 1098.

Tellis v. Godinez, 5 F.3d 1314 (9th Cir. 1993).

NEV. REV. STAT. § 209.241(5) (LexisNexis 1995) (emphasis omitted);

McIntyre, 339 F.3d at 1100.

Id. at 1100-02.

McIntyre, 339 F.3d at 1098-99.

Id.

0 Schneider IV, 345 F.3d 716, 720-21 (9th Cir. 2003).

Id. at 722. For a later Ninth Circuit case in which prisoner plaintiffs’ otherwise valid takings claim for the
interest generated from inmate trust accounts was dismissed because the defendants were entitled to qualified
immunity, see Francis v. California, No. C 04-01309, 2004 U.S. Dist. LEXIS 16816, (N.D. Cal. 2004).

See
Young v. Wall, 642 F.3d 49, 51-55 (1st Cir. 2011);
Givens v. Ala. Dep’t of Corr., 381 F.3d 1064, 1068-69
(11th Cir. 2004);
Washlefske v. Winston, 234 F.3d 179 (4th Cir. 2000).

0 Washlefske, 234 F.3d at 180-81.

0 Id. at 181.

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Q c-1

VA. CODE ANN. § 53.1-44 (2018);
Washlefske, 234 F.3d at 181 (detailing the Director’s expenditures on
“library books, newspaper and magazine subscriptions, exercise equipment, items for family visiting day, and other
‘extras.”’).

Washlefske, 234 F.3d at 184.

Q r-i
Q r_-i

100

Id. at 185 (citing
Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 (1974);
Ruffin v.
Commonwealth, 62 Va. (21 Gratt.) 790, 796 (1871); 1 WILLIAM BLACKSTONE, COMMENTARIES *299; 4 id.
*385).

Id. at 185.

Id. at 53-55.

109

Young v. Wall, 642 F.3d 49, 51-52 (1st Cir. 2011).

108

Id. at 1068-70. The statutes establishing Alabama’s work-release program also did not address interest generated
from any wages earned from work release labor. Id.

107

106

Id. at 186.

105

See id. at 186 (noting that “he cannot claim that a property interest based on traditional principles of property law was
taken”).

104

Id. at 186 (“His property interest was that given by statute, and the State never took from him what was created by
statute. Therefore, there was not a taking of private property as addressed in the Fifth Amendment.”).

103

Id. at 184 (“[I]f a statute creates a property right not previously recognized or one broader than that traditionally
understood to exist, the property interest so created is defined by the statute and may be withdrawn so long as the
State affords due process in doing so.” (citing
Goldberg v. Kelly, 397 U.S. 254, 262 n.8)).

102

Id. at 185-86.

101

·l

Givens v. Ala. Dep’t of Corr., 381 F.3d 1064, 1065-66 (11th Cir. 2004).

M'lf1153M

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110

See
Young, 642 F.3d at 51-55;
Givens, 381 F.3d at 1068-69;
Washlefske v. Winston, 234 F.3d 179 (4th
Cir. 2000). This Note builds upon Emily Tunink’s compelling argument why the First Circuit’s decision is incorrect.
See Emily Tunink, Note, Does Interest Always Follow Principal?: A Prisoner’s Property Right to the Interest Earned
on His Inmate Account Under Young v. Wall, 642 F.3d 49 (1st Cir. 2011), 92 NEB. L. REV. 212 (2013).

111

Stewart v. Norwood, No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *29- 30 (D. Kan. 2017); Debrew
v. Atwood, 244 F. Supp. 3d 123, 130 (D.D.C. 2017); see also Edwards v. Arnone, 2012 U.S. Dist. LEXIS 34575,
*3-4 (D. Conn. 2012) (denying plaintiff’s takings claim when the plaintiff failed to allege any facts indicating that the
prison had ever received interest on the funds at issue).

112

f O

792 F.3d 118, 129 (D.C. Cir. 2015).

113

Debrew v. Atwood, 244 F. Supp. 3d 123, 130-32 (D.D.C. 2017).

114

No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *27-30 (D. Kan. 2017); KAN. STAT. ANN. § 76-175(b)
(2018) (“Interest earned on moneys invested under this section shall be regularly prorated ... and credited to the
individual ... inmate ... on the basis of the amount of money each ... has in the trust fund.”). The question of whether
Stewart’s individual earned interest exceeded his share of account maintenance costs remained; because it was still
unclear whether the prison had appropriated his excess interest for the “public use” of administering other prisoners’
accounts, the court denied the State’s motion to dismiss with regard to Stewart’s takings claim.
Stewart v.
Norwood, No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *31-34.

115

f OVance v. Barrett, 345 F.3d 1083, 1089-90 (9th Cir. 2003) (holding that reasonable expenses related to account
administration deducted from plaintiff’s inmate trust account did not violate the Takings Clause).

116

Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 158-59, 162 (1980).

117

See, e.g., Ward v. Ryan, 623 F.3d 807, 808-11 (9th Cir. 2010) (affirming the denial of an inmate’s takings and due
process claims over the withdrawal and subsequent deposit of prison wages into a discharge account to be returned
upon release, when the inmate was serving a 197-year sentence).

118

See, e.g., id.;
Allen v. Cuomo, 100 F.3d 253, 261-62 (2d Cir. 1996) (rejecting inmates’ due process challenges to a
prison’s “pay lag policy”).

119

See, e.g., Farias v. Hicks, No. 1:14-cv-01950-SKO, 2015 U.S. Dist. LEXIS 146449, at *3-8, *11-12 (E.D. Cal. 2015)
(denying an inmate’s takings claims following a prison’s assessment of healthcare and law library fees); Walters v.
Cate, No. EDCV 12-0137-JAK (DTB), 2013 U.S. Dist. LEXIS 63220, at *26-28 (C.D. Cal. 2013) (explaining why
plaintiff’s challenges to his restitution fine and account administrative fees are without merit).

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120

121

See, e.g.,
Rochon v. Louisiana State Penitentiary Inmate Account, 880 F.2d 845, 845- 46 (5th Cir. 1989) (holding
that a prisoner’s right to wages is limited by statute and that usage restrictions for “education, court costs, victim
repayment or the purchase of bonds” are “reasonably related to the valid goals of rehabilitation, restitution and
assessing against inmates ... the partial cost of prosecuting any future litigation”); Jones v. Skolnik, No.
3:10-cv-00162-LRH-VPC, 2010 U.S. Dist. LEXIS 139449, at *19-20 (D. Nev. 2010) (recognizing a plaintiff’s due
process claim for “excessive deductions” from his inmate trust account); see also
Turner v. Safley, 482 U.S. 78,
89 (1987); Part I.B.
See, e.g.,

VA. CODE ANN. §§ 53.1-42, .1-43 (2018).

122

See Sara Feldschreiber, Note, Fee at Last? Work Release Participation Fees and the Takings Clause, 72 FORDHAM
L. REV. 207 (2003).

123

See
Stewart v. Norwood, No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *7 (D. Kan. 2017)
(describing a Kansas regulation forbidding the state from collecting funds derived from social security benefits, VA
benefits, and workers’ compensation benefits).

124

See Wagner, supra note 1 (telling the story of prison inmate Eddie).

125

38 U.S.C. § 5301(a)(1) (2018). But see Roop v. Ryan, No. CV 12-0270-PHX-RCB, 2013 U.S. Dist. LEXIS 86864, at
*10-11, *13 (D. Ariz. 2013) (affirming a grant of summary judgment for the state because interest on VA benefits did
not receive the same protections as the VA benefits themselves).

126

127

See

Washlefske v. Winston, 234 F.3d 179, 184-85 (4th Cir. 2000).

642 F.3d 49, 51-52 (1st Cir. 2011).

128

Id. at 51. The Second Circuit faced a similar issue before Phillips and Brown when inmates claimed that a prison
regulation’s prescribed “pay lag” for inmate wages violated the Takings Clause because the withheld wages earned no
interest during the “lag” time.
Allen v. Cuomo, 100 F.3d 253, 256, 262 (2d Cir. 1996). After briefly citing Webb’s
Fabulous Pharmacies, the Second Circuit rejected inmates’ challenge using Penn Central’s regulatory takings
analysis.
Id. at 262.

129

Edwards v. Arnone, CV No. 3:11-cv-1537(AVC), 2012 U.S. Dist. LEXIS 34575, at *3- 4 (D. Conn. 2012); see also
Weeks v. Frank, CV No. 10-00235 DAE-RLP, 2011 U.S. Dist. LEXIS 63415, at *14-15 (D. Haw. 2011) (finding no
taking where the plaintiff’s funds were deposited in a noninterest-bearing account).

130

See, e.g.,

McIntyre v. Bayer, 339 F.3d 1097, 1100 (9th Cir. 2003).

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131

132

133

134

See U.S. CONST. amend. V. This analysis will exclude discussion of public use, as courts largely accept that the
depositing of interest into an inmate welfare fund or applying to other general prison expenditures beyond
maintenance costs or administrative fees constitutes a public use.
Schneider IV, 345 F.3d 716, 720 (9th Cir.
2003).
McIntyre v. Bayer, 339 F.3d 1097 (9th Cir. 2003);

Schneider II, 151 F.3d 1194, 1201 (9th Cir. 1998).

See
Givens v. Ala. Dep’t of Corr., 381 F.3d 1064, 1068-69 (11th Cir. 2004) (“Indeed, at common law an inmate
not only did not have a property right in the product of his work in prison, but he also could be forced to forfeit all
rights to personal property.”).
Schneider II, 151 F.3d at 1200.

135

See Kaitlin Cassel, Due Process in Prison: Protecting Inmates’ Property After Sandin v. Conner, 112 COLUM. L.
REV. 2110, 2114 (2012) (discussing the relationship between property rights and individual freedom).

136

See Margaret Jane Radin, Property and Personhood, 34 STAN. L. REV. 957, 958, 965 (1982) (briefly noting
Lockean labor-desert theory’s emphasis on individual autonomy).

137

See id. at 960 (describing “property that is bound up with a person and property that is held purely instrumentally” as
“theoretical opposites”).

138

See Beth M. Huebner & Mark T. Berg, Examining the Sources of Variation in Risk for Recidivism, 28 JUST. Q. 146,
165 (2011) (noting that “the largest risk for recidivism comes in the immediate months of release”); Joe Palazzolo, A
Shot at Banking Behind Bars: Can Financial Services for Inmates Reduce Recidivism, or Is It a Recipe for Trouble?,
WALL ST. J., (Jan. 30, 2014, 7:24 P.M.) https://www.wsj.com/articles/a-shot-at-banking-behind-bars-1391127801
[https://perma.cc/UJQ7-4UA3]; Sawyer, supra note 6 (“Making it hard for incarcerated people to earn real money
hurts their chances of success when they are released, too. With little to no savings, how can they possibly afford the
immediate costs of food, housing, healthcare, transportation, child support, and supervision fees?”).

139

See Treanor, supra note 27, at 784; see also Feldschreiber, supra note 122, at 247-48 (discussing Professor Treanor’s
work).

140

Treanor, supra note 27, at 784.

141

See
Washlefske v. Winston, 234 F.3d 179, 184-86 (4th Cir. 2000) (“Indeed, at common law a convicted felon
not only did not have a property right in the product of his work in prison, but he also forfeited all rights to personal
property.”).

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142

See Feldschreiber, supra note 122, at 247-48 (describing prisoners’ status as a minority lacking representation in the
political process).

143

Isaac Colunga, An Alternative Look at the Takings Clause and Inmate Trust Accounts, 39 U. TOL. L. REV. 791, 806
(2008). Although this Note agrees with Colunga’s “endorse[ment] of the Ninth Circuit’s position,” Colunga advocates
for a control-based test to determine whether the common-law “interest follows principal” analysis applies. Id. at 794,
810. Cf.
Burns v. Pa. Dep’t of Corr., 544 F.3d 279, 280-81 (3d Cir. 2011), aff’d,
642 F.3d 163 (3d Cir. 2011)
(holding that a prisoner whose inmate fund was assessed for an assault victim’s medical expenses had a protectible
property interest warranting procedural due process protections).

144

See
Washlefske, 234 F.3d at 186 (“His property interest was that given by statute, and the State never took from
him what was created by statute.”).

145

The Fourth and Eleventh Circuits explicitly rejected the notion that prisoners had “full rights of ‘possession, control,
and disposition”’ over the funds in their statutorily-created accounts.
Givens v. Ala. Dep’t of Corr., 381 F.3d
1064, 1069 (11th Cir. 2004);
Washlefske, 234 F.3d at 185 (citing
Phillips v. Wash. Legal Found., 524 U.S.
156, 170 (1998)).

146

No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *25-27 (D. Kan. 2017) (quoting IMPP 04-106A).

147

148

149

Washlefske, 234 F.3d at 184-86.
See Colunga, supra note 143, at 806 (“[A]n anomaly exists where courts mistakenly apply antiquated common law
doctrines regarding the denial of inmate property rights solely due to inmate status despite recognizing that the state
has granted its inmates substantial control over their deposited funds via statute and practice.”).
Washlefske, 234 F.3d at 181.

150

See David A. Super, A New New Property, 113 COLUM. L. REV. 1773, 1874 (2013) (discussing a criticism that
applying the Takings Clause to “the diminution or repeal of social programs might make legislatures reluctant to
enact them in the first place”); cf.
Goldberg v. Kelly, 397 U.S. 254, 278-79 (1970) (Black, J., dissenting) (arguing
that requiring the government to afford additional process to welfare recipients will hinder the government’s ability to
provide welfare benefits in general).

151

See Super, supra note 150, at 1874.

152

See id.

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153

See Colunga, supra note 143, at 806. But see supra notes 102-103 and accompanying text.

154

Washlefske, 234 F.3d at184-85 (referencing
Ruffin v. Commonwealth, 62 Va. (21 Gratt.) 790, 796 (1871); 1
WILLIAM BLACKSTONE, COMMENTARIES *299; 4 id. *385).

155

Id. at 185 (citing 1 WILLIAM BLACKSTONE, COMMENTARIES *299; 4 id. *385).

156

Wolff v. McDonnell, 418 U.S. 539, 556-57 (1974) (explaining that prisoners maintain due process protections over
property); see also Tunink, supra note 110, at 226 (2013) (“[T]he early common law regarding a prisoner as a slave
lacking property rights has been routinely repudiated.”).

157

See
Phillips v. Wash. Legal Found., 524 U.S. 156, 169-71 (1998);
Beckwith, 449 U.S. 155, 158-59, 163 (1980).

158

Rebecca Rogers, Note, Interest, Principal, and Conceptual Severance, 46 B.C. L. REV. 863, 879 (2005).

159

Id. at 867.

160

Id. at 878.

161

F Webb’s Fabulous Pharmacies, Inc. v.

524 U.S. at 165-67.

162

See
Turner v. Safley, 482 U.S. 78, 84-85 (1987) (explaining why courts should afford special deference to state
penal authorities).

163

See
Washlefske, 234 F.3d at 181 (describing the resources funded by interest earned on inmate trust accounts);
Schneider II, 151 F.3d 1194, 1195-96 (9th Cir. 1998) (describing California DOC’s Inmate Welfare Fund).

164

See Treanor, supra note 27, at 784 (noting that “the right against physical seizure received special protection ...
because of the framers’ concern with failures in the political process”).

165

See
Brown v. Legal Found. of Wash., 538 U.S. 216, 235-37 (2003) (“[N]either Brown nor Hayes is entitled to any
compensation for the nonpecuniary consequences of the taking of the interest on his deposited funds, and ... any
pecuniary compensation must be measured by his net losses ....”);
Schneider IV, 345 F.3d 716, 720-21 (9th Cir.
2003) (“For takings purposes ... the relevant inquiry is not the overall effect on fund administration but whether any of

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the individual inmates themselves have been deprived of their accrued net interest.”);
McIntyre v. Bayer, 339 F.3d
1097, 1100-02 (9th Cir. 2003) (“Just compensation ... is measured by the net value of the interest that was actually
earned by the owner of the principal” (internal quotation marks omitted) (quoting
Brown, 538 U.S. at 239 n.10
(emphasis added))).
166

See, e.g.,
Washlefske v. Winston, 234 F.3d 179, 186 (4th Cir. 2000) (ending the analysis after finding no
protectible property interest).

167

168

Schneider IV, 345 F.3d at 720-21.
See

Brown, 538 U.S. at 239-40 (discussing the holding).

169

Id.

170

See
Schneider IV, 345 F.3d at 718-19 (discussing a California prisoner’s options for personal funds held during
incarceration).

171

Christopher Serkin, Valuing Interest: Net Harm and Fair Market Value in Brown v. Legal Foundation of Washington,
37 IND. L. REV. 417, 418 (2004).

172

Id.

173

174

175

Schneider IV, 345 F.3d at 720-21.
Brown v. Legal Found. of Wash., 538 U.S. 216, 247 (2003) (Scalia, J., dissenting) (“May the government now
seize welfare benefits, without paying compensation, on the ground that there was no ‘net loss’ to the recipient?”
(citation omitted)).
Id. at 235-37 (majority opinion).

176

See Sawyer, supra note 6.

177

E.g.,
Stewart v. Norwood, No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *31-32 (D. Kan. Sept. 27,
2017) (“At one time, Plaintiff here had more than $8,000 in his inmate trust account, an amount that likely exceeds
the balance in many other inmate accounts by a significant margin.”).

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178

179

180

See, e.g.,
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 421 (1982) (holding that the
encroachment of a television cable was a taking).
Goldberg v. Kelly, 397 U.S. 254, 267-68 (1970).
Vance v. Barrett, 345 F.3d 1083, 1090-91 (9th Cir. 2003); see also Kaitlin Cassel, Note, Due Process in
Prison: Protecting Inmates’ Property After Sandin v. Conner, 112 COLUM. L. REV. 2110, 2115-17, 2133 (2012)
(discussing the concept of “new property”).

181

345 F.3d 1083, 1090-91 (2003).

182

Young v. Wall, 642 F.3d 49, 55 (1st Cir. 2011) (“[W]here, as here, there is no property interest, that procedural
prophylaxis [of notice and hearing] is not required.”).

183

No. 16-3189-JAR-DJW, 2017 U.S. Dist. LEXIS 158603, at *21-23 (D. Kan. Sept. 27, 2017).

184

See, e.g., id.

185

186

See

Schneider IV, 345 F.3d 716, 720-21 (9th Cir. 2003).

Goldberg v. Kelly, 397 U.S. 254, 267-68 (1970).

187

See Part I.C.2.

188

See, e.g.,
Phillips v. Wash. Legal Found., 524 U.S. 156, 164 (1998) (quoting
Colleges v. Roth, 408 U.S. 564, 577 (1972)).

189

Super, supra note 150 at 1873.

190

Id. at 1875-78 (pointing specifically to role of unconstitutional coercion in
Business v. Sebelius, 567 U.S. 519 (2012)).

191

Sandin v. Conner, 515 U.S. 472, 497-98 (1995) (discussing Roth); see also Cassel, supra note 180. Sandin v.
Conner’s heightened standard of review for Due Process claims for deprivations of liberty in the prison context
should not apply to deprivations of property.

Board of Regents of States

National Federation of Independent

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192

Schneider II, 151 F.3d 1194, 1200-01 (9th Cir. 1998).

193

Cf. Thomas W. Merrill, The Landscape of Constitutional Property, 86 VA. L. REV. 885, 893 (arguing that courts
should define “constitutional property” differently for procedural due process, takings, and substantive due process
claims).

194

See
Arnett v. Kennedy, 416 U.S. 134, 163 (1974) (holding that Congress’s creation of a statutory right for certain
employees not to be discharged except for “cause” did not create an expectancy of job retention protected by the Due
Process Clause).

195

See infra Part III.

196

381 F.3d 1064, 1066 (11th Cir. 2004); see also JEFFREY S. SUTTON, 51 IMPERFECT SOLUTIONS: STATES
AND THE MAKING OF AMERICAN CONSTITUTIONAL LAW 174-75 (2018) (describing state courts’ tendency
to impute interpretations of federal constitutional provisions onto state counterparts as “lockstepping,” including with
regard to takings clauses).

197

James W. Ely, Jr., ‘The Sacredness of Private Property:’ State Constitutional Law and the Protection of Economic
Rights Before the Civil War, 9 N.Y.U. J.L. & LIBERTY 620, 632 (2015) (referring specifically to eminent domain
proceedings); see also Treanor, supra note 27, at 789-91 (tracing the development of revolutionary era state
constitutional takings provisions).

198

See SUTTON, supra note 196, at 19 (2018) (“A modest standard for enforcing the Takings Clause works for national
taking-of-property claims, says the Court, but it is by no means clear that every State should embrace the same
approach in addressing similar challenges under its own constitution.” (footnotes omitted)); see also id. at 204-05
(noting that the Ohio and Oklahoma Supreme Courts expanded protections against eminent domain under their
respective state constitutions following the unpopular
Kelo v. City of New London, 545 U.S. 469 (2005) decision).

199

State constitutional provisions that can be considered state counterparts to the federal Takings Clause often vary in
language and form. See, e.g., MASS. CONST. art. X (“[B]ut no part of the property of any individual can, with
justice, be taken from him, or applied to public uses, without his own consent, or that of the representative body of the
people.”). For the sake of simplicity, this Note will refer generally to these provisions as “Takings Clauses.”

200

See, e.g., GA. CONST. art. I, § III, para. I.

201

Bronfman v. Douglas County, 476 N.W.2d 611, 615-16 (Wis. Ct. App. 1991) (citing
Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 164-65 (1980)).

202

Id.

Webb’s Fabulous

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203

Webb’s Fabulous Pharmacies, 449 U.S. at 155-57 (1980);

Schneider II, 151 F.3d 1194, 1196 (9th Cir. 1998).

204

894 P.2d 309 (Mont. 1995).

205

Id. at 312-13 (holding that the county’s retention of interest violated both Montana’s Takings Clause and Montana’s
due process clause); see also MONT. CONST. art. II, § 29 (“Private property shall not be taken or damaged for public
use without just compensation to the full extent of the loss having been first made to or paid into court for the
owner.”).

206

Siroky, 894 P.2d at 310.

207

Id. at 312-13.

208

Id.

209

Id. at 313.

210

E.g., Butler v. Mich. State Disbursement Unit, 738 N.W.2d 269, 270-72 (Mich. Ct. App. 2007) (holding that the
government’s retention of accrued interest earned on child support payments constituted a taking under both the
federal and Michigan Takings Clauses);
McMillan v. Robeson County, 137 S.E.2d 105, 108 (N.C. 1964) (“The
constitutional provision ... that no person shall be deprived of his property ‘but by the law of the land,’ applies to
earnings in the same manner, and with the same force, it applies to principal.”);
Sogg v. Zurz, 905 N.E.2d 187,
192 (Ohio 2009) (holding that Ohio’s statute allowing appropriation of interest earned on unclaimed funds violated
the Ohio Takings Clause). But see Weber v. Hvass, 626 N.W.2d 426, 435-36 (Minn. Ct. App. 2001) (applying
regulatory takings analysis to hold that a cost-of-confinement fee of 10% of “non-exempt, non-wage funds” did not
violate either the federal or state Takings Clauses).

211

See SUTTON, supra note 196, at 174-75 (discussing how state courts need not interpret state constitutional
guarantees in the same manner as federal constitutional guarantees).

212

ILL. CONST. art. 1, § 11 (“All penalties shall be determined both according to the seriousness of the offense and with
the objective of restoring the offender to useful citizenship.”); IND. CONST. art. 1, § 18 (“The penal code shall be
founded on the principles of reformation, and not of vindictive justice.”); N.H. CONST. pt. 1, art. 18N.H. CONST. pt.
1, art. 18 (“The true design of all punishments being to reform, not to exterminate mankind.”); WYO. CONST. art. 1,
§ 15 (“The penal code shall be framed on the humane principles of reformation and prevention.”); see also S.C.
CONST. art. XII, § 2 (dictating that the South Carolina General Assembly establish penal institutions and “provide
for the custody, maintenance, health, welfare, education, and rehabilitation of the inmates”).

213

See supra note 138 and accompanying text.

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214

215

Relatedly, the Vermont Constitution also encourages visible labor as a punishment to reduce “sanguinary
punishments” and to serve as a deterrent to crime. VT. CONST. § 64.

N.Y. CONST. art III, § 24.

216

N.M. CONST. art. XX, § 15.

217

KY. CONST. § 253.

218

Id. § 254.

219

MISS. CONST. art. 4, § 85; id. art. 10, § 224-26.

220

OR. CONST. art. 1 § 41(8)-(9).

221

See id. Interestingly, Oregon’s constitution explicitly provides that Oregon’s criminal justice system is based on more
than merely rehabilitation: “protection of society, personal responsibility, accountability for one’s actions and
reformation.” Id. art. I, § 15.

222

See
524 U.S. 156, 172 (1998) (“In sum, we hold that the interest income generated by funds held in IOLTA
accounts is the ‘private property’ of the owner of the principal.”);
Schneider II, 151 F.3d 1194, 1201 (9th Cir.
1998) (holding that a state may not appropriate “interest income” from inmate trust accounts “without implicating the
Takings Clause”); see also Tunink, supra note 110, at 230-33 (analyzing the circuit split in 2013--particularly the
First Circuit’s approach--and arguing that the Supreme Court should recognize a prisoner’s property interest in the
interest on an inmate trust account).

223

See
Phillips, 524 U.S. at 160-61 (discussing the creation of Texas’s IOLTA program);
Schneider II, 151 F.3d
at 1196 (“The State is not required by California law to place [Inmate Trust Account] monies in an interest-bearing
account. Rather, the Penal Code merely provides that the State ‘may deposit such funds in interest-bearing bank
accounts ....”’ (quoting CAL. PENAL CODE § 5008 (West 1981) (amended 2009)).

224

225

226

524 U.S. at 176-77 (Souter, J., dissenting);

See

id. at 180-81 (Breyer, J., dissenting).

524 U.S. 156, 172-79 (1998) (Souter, J., dissenting);

524 U.S. at 169-71 (1998);

id. at 179-83 (Breyer, J., dissenting).

Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 158-59, 163 (1980).

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227

Schneider II, 151 F.3d at 1195.

228

See
id. at 1200-01 (“States may ... confer ‘new property’ status on interests located outside the core of
constitutionally protected property, but they may not encroach upon traditional ‘old property’ interests found within
the core.”).

229

Merrill, supra note 193, at 922 (quoting Jerry L. Mashaw, Administrative Due Process: The Quest for a Dignitary
Theory, 61 B.U. L. REV. 885, 888 (1981)). Considering the role of the positivist trap in this context does not
necessarily require an analysis of an inmate’s level of control over his funds, as Isaac Colunga argues. Colunga, supra
note 143, at 810.

230

416 U.S. 134, 163 (1974); see also Merrill, supra note 193, at 923 (identifying Arnett v. Kennedy as the “most
notorious example of the positivist trap”).

231

416 U.S. at 154.

232

470 U.S. 532, 540-41 (1985).

233

Brown v. Legal Found. of Wash., 538 U.S. 216, 247 (2003) (Scalia, J., dissenting).

234

Id. (citing

235

See id.

236

237

238

Goldberg v. Kelly, 397 U.S. 254 (1970)).

Phillips v. Wash. Legal Found., 524 U.S. 156, 169-71 (1998);

Arnett, 416 U.S. at 154.

Merrill, supra note 193, at 897.
524 U.S. at 169-71.

239

See Sawyer, supra note 6 (highlighting the very low wages that incarcerated people earn).

240

See, e.g.,
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 421 (1982) (holding that a
government-authorized installment of a television cable constituted a per se taking).

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73 VNLRENB 143
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