Court grant defendants' motion for summary judgment dismissing the complaint. First, the Magistrate Judge held that the Pay Lag Policy does not violate any of the asserted constitutional protections. The Magistrate Judge found that while inmates have a property interest in wages they have earned, Report at 9-11, they have no such property interest in the timely payment of these wages, id. at 12-15. With respect to the Takings Clause claim, the Magistrate Judge found that since plaintiffs lack a vested property right in the prompt payment of inmate wages, there could be no compensable taking, and, furthermore, plaintiffs lack a reasonable investment-backed expectation in such prompt payment. Id. at 16-18. Finally, the Magistrate Judge determined that the Pay Lag Policy does not impair their contract rights under the Contracts Clause because there is no contract between plaintiffs and the state, and that even if such a contract exists, it does not provide for the timely payment of wages.
Second, the Magistrate Judge dismissed plaintiffs arguments with respect to the Disciplinary Surcharge Policy. Magistrate Judge Katz found that any interest on the part of adjudicating officers is far too remote to give rise to an inference of bias. Id. at 26-35. The Report also concludes that the Disciplinary Surcharge Policy does not involve a forfeiture without due process of law, and that even if such actions constitute a forfeiture, there is adequate statutory authority for the Disciplinary Surcharge Policy. Id. at 35-39. Finally, the Magistrate Judge found that the lack of an indigency waiver in the Disciplinary Surcharge Policy does not violate the Equal Protection Clause because plaintiffs were not similarly situated to those unincarcerated individuals who may obtain indigency waivers for other surcharges. Id. at 40-41. Furthermore, the Magistrate Judge found that the Disciplinary Surcharge is rationally related to a legitimate penological interest, and thus does not run afoul of equal protection guarantees. Id. at 42-44.
On July 7, 1995, plaintiffs filed objections to the Report, arguing that the Magistrate Judge reached incorrect conclusions of law and fact on nearly every issue. With respect to the Pay Lag Policy, plaintiffs argue that the Magistrate Judge erred by: (1) resolving disputed factual issues relating to the significant hardship that the Pay Lag Policy imposes on inmates; (2) holding that DOCS could withhold inmate wages for years without violating the Due Process Clause; (3) finding that no taking occurred within the meaning of the Takings Clause even though inmates are not compensated in any way for their withheld wages; and (4) holding that DOCS' unilateral alteration of the terms of inmate employment is permissible under the Contracts Clause.
As for the Magistrate Judge's findings vis-a-vis the Disciplinary Surcharge Policy, plaintiffs contend that he erred by: (1) resolving disputed factual issues relating to the significant discretion DOCS gives its employees in the operation of the DOCS disciplinary system; (2) holding that DOCS properly clarified the purpose of the Disciplinary Surcharge; (3) finding that DOCS' employment of improper incentives in the disciplinary process does not violate the Due Process Clause; (4) determining that the confiscation of inmate funds without express statutory authorization does not violate the Due Process Clause; and (5) holding that DOCS can deny inmates indigency waivers of the Disciplinary Surcharge without violating the Equal Protection Clause. The Court shall address these objections below.
I. Standard of Law
Rule 72(b) of the Federal Rules of Civil Procedure governs determinations by magistrate judges with respect to dispositive motions. See Fed. R. Civ. P. 72(b). Specifically, Rule 72(b) provides that, where a magistrate judge issues a Report and Recommendation that is dispositive of a claim or defense, the court must review de novo those portions to which the parties object.
Pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party must initially satisfy a burden of demonstrating the absence of a genuine issue of material fact, which can be done merely by pointing out that there is an absence of evidence in support of the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). The nonmoving party then must meet a burden of coming forward with "specific facts showing that there is a genuine issue for trial," Fed. R. Civ. P. 56(e), by "a showing sufficient to establish the existence of (every) element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. at 322.
The court "must resolve all ambiguities and draw all reasonable inferences in favor of the party defending against the motion." Eastway Constr. Corp. v. New York, 762 F.2d 243, 249 (2d Cir. 1985); see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970); Hathaway v. Coughlin, 841 F.2d 48, 50 (2d Cir. 1988); Knight v. United States Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987). But the court is to inquire whether "there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for the party," Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986), and to grant summary judgment where the nonmovant's evidence is merely colorable, conclusory, speculative or not significantly probative. Id. at 249-50; Knight v. United States Fire Ins. Co., 804 F.2d... at 12, 15; Argus Inc. v. Eastman Kodak Co., 801 F.2d 38, 45 (2d Cir. 1986), cert. denied, 479 U.S. 1088, 94 L. Ed. 2d 151, 107 S. Ct. 1295 (1987). To determine whether the nonmoving party has met his or her burden, the court must focus on both the materiality and the genuineness of the factual issues raised by the nonmovant. As to materiality, "it is the substantive law's identification of which facts are critical and which facts are irrelevant that governs." Anderson v. Liberty Lobby, Inc., 477 U.S. at 248. A dispute over irrelevant or unnecessary facts will not preclude summary judgment, id., but the presence of unresolved factual issues that are material to the outcome of the litigation mandates a denial of the summary judgment motion. See, e.g., Knight v. United States Fire Ins. Co., 804 F.2d at 11-12.
Once the nonmoving party has successfully met the burden of establishing the existence of a genuine dispute as to an issue of material fact, summary judgment must be denied unless the moving party comes forward with additional evidence sufficient to satisfy his or her ultimate burden under Rule 56. See Celotex Corp. v. Catrett, 477 U.S. at 330 n.2 (Brennan, J., dissenting). In sum, if the court determines that "the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986) (quoting First Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 289, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1969)).
II. The Pay Lag policy
A. Resolution of Disputed Factual Issues
It is not the role of a judge to resolve disputed issues of material fact on a summary judgment motion. Anderson v. Liberty Lobby, Inc., 477 U.S. at 249 (in determining whether summary judgment is appropriate, "the judge's function is not himself to weigh the evidence and determine the truth of the matter"); Rattner v. Netburn, 930 F.2d 204, 209 (2d Cir. 1991); Phillips v. Kidder, Peabody & Co., 782 F. Supp. 854, 859 (S.D.N.Y. 1991).
Plaintiffs allege that the Magistrate Judge erred in resolving factual disputes regarding whether the Pay Lag Policy imposed significant hardships on plaintiffs. Specifically, plaintiffs claim that the Magistrate Judge suggested that the effect of the Pay Lag Policy on the plaintiffs was insubstantial because "plaintiffs' food and shelter are supplied by the State." See Pls' Objs. at 4 n.1 (quoting Report at 20). Plaintiffs maintain that, in fact, DOCS had instituted a system in which inmates are expected to purchase necessities, and that the Magistrate Judge's disregard for this evidence vitiated his analysis of whether plaintiffs possessed a reasonable and legitimate expectation of prompt payment of their wages under the Due Process Clause.
In fact, the Magistrate Judge made no such finding with respect to the due process claim. In formulating their argument, plaintiffs have taken language from a portion of the Report out of context in which the Magistrate Judge was attempting to distinguish various cases relevant to the Contracts Clause claim. There is no evidence that this alleged "finding of fact" contaminated the Magistrate Judge's objectivity with respect to the due process issue in any way, and plaintiffs do not indicate the connection, if any, between this determination and the due process issue. Insofar as the Magistrate Judge could be deemed to have made a finding of fact with respect to this issue, there is no evidence that it has any impact whatsoever on the determination of the summary judgment issue. At any rate, since the Court reviews the Magistrate Judge's Report de novo, this Court will not adopt the Magistrate Judge's determination on this subject.
B. Due Process Claim
In order to sustain an action for the deprivation of property without due process of law, a plaintiff must "first identify a property right, second show that the state has deprived him of that right, and third show that the deprivation was effected without due process." Mehta v. Surles, 905 F.2d 595, 598 (2d Cir. 1990) (per curiam). There is, however, no constitutional right to prison wages and any such compensation is by the grace of the state. Hrbek v. Farrier, 787 F.2d 414, 416 (8th Cir. 1986). Thus, in order to succeed on their claim, plaintiffs must initially establish a property interest in prison wages protected by the Fourteenth Amendment. Such property interests are, of course, not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings. These rules or understandings stem from an independent source such as state law. Paul v. Davis, 424 U.S. 693, 709, 96 S. Ct. 1155, 47 L. Ed. 2d 405 (1976); Board of Regents v. Roth, 408 U.S. 564, 576-77, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972). Thus, the Court must examine whether state law created a property interest in prison wages earned and the timely payment of such wages.
1. Interest in Wages Earned
As a threshold matter, defendants claim that the Magistrate Judge erred in finding that there was any innate property interest in wages at all. Specifically, defendants argue that since inmates have no right to a job, Gill v. Mooney, 824 F.2d 192 (2d Cir. 1987), no right to be paid for their labor, Manning v. Lockhart, 623 F.2d 536, 538 (9th Cir. 1980), and state law gives DOCS discretion over whether to pay inmates for their work, there is no property interest in wages at stake, Davidson v. Kelly, No. 92-CV-44S, slip op. at 11 (N.D.N.Y. March 30, 1994).
The Magistrate Judge correctly separated from the question whether, as a general matter, inmates have a constitutional right to be paid wages from the issue implicated here, namely whether inmates have a right to wages already earned. Specifically, the Magistrate Judge found that the present case "does not present the question of whether inmates have a constitutional right to be paid wages. Here, they have already earned the wages and DOCS has acknowledged that this is money owed to the inmates." Report at 11. There is ample statutory guidance on the latter question. New York Correction Law Section 187 states, in part:
1. Every inmate . . . may receive compensation for work performed during his or her imprisonment. . . .
2. The department of correctional services shall adopt rules, subject to the approval of the director of the budget, for establishing in all of the state correctional facilities a system of compensation for the inmates confined therein. Such rules shall provide for the payment of compensation to each inmate . . . based upon the work performed by such inmates.