Nimrod T. Solomon, Petitioner-appellee, v. Charles L. Benson, Warden, et al., Respondents-appellants, 563 F.2d 339 (7th Cir. 1977)

The question raised in this appeal is whether a federal prisoner is entitled to a due process hearing prior to being labeled as a special offender.¹  Although this court recently concluded in Holmes v. United States Board of Parole, 541 F.2d 1243 (7th Cir. 1976), that a due process hearing is required, the Government urges that we reconsider that decision in light of the Supreme Court's ruling in Moody v. Daggett, 429 U.S. 78, 97 S. Ct. 274, 50 L. Ed. 2d 236 (1976). Upon reconsideration of this question, we conclude in light of Moody that for the following reasons Holmes must be overruled to the extent that procedural due process was held to apply to classification as a special offender.

Briefly, the facts are as follows:

Petitioner-Appellee Nimrod T. Solomon (hereinafter referred to as petitioner) was sentenced to two consecutive prison terms of ten years following two jury trial convictions. Petitioner was first convicted on June 17, 1968, for conspiracy and transportation of forged securities in violation of 18 U.S.C. §§ 371 and 2314. On April 24, 1970, petitioner was also convicted under a separate indictment for counterfeiting, concealing, selling, transferring and receiving United States Treasury Notes. See United States v. Solomon, 468 F.2d 848 (7th Cir. 1972), cert. denied, 410 U.S. 986, 93 S. Ct. 1513, 36 L. Ed. 2d 182. Petitioner was incarcerated at the Federal Correctional Institution at Terre Haute, Indiana. Pursuant to Bureau of Prison Policy Statement No. 7900.47, petitioner was classified as a special offender because of his association with organized crime.

Upon serving one-third of the two sentences, petitioner became eligible for parole. Petitioner received a parole hearing on December 17, 1974. At the close of that hearing, petitioner was advised that the examiner panel of the United States Board of Parole would recommend that his case be heard as an original jurisdiction matter pursuant to 28 C.F.R. § 2.17.²  As a result, the matter was referred to the Regional Director of the National Board of Parole. On February 11, 1975, the Regional Director voted to deny parole to petitioner. Petitioner appealed this determination to the United States Parol Commission pursuant to 28 C.F.R. § 2.27. The Commission affirmed the denial of parole on April 14, 1975.

Thereafter, petitioner filed a petition for habeas corpus pursuant to 28 U.S.C. § 2241. Insofar as is relevant, the petition alleged that the original jurisdiction classification which was based on the special offender classification resulted in the denial of parole to petitioner. The petition also alleged that the special offender classification resulted in petitioner not being placed on the Terre Haute farm camp.

In view of the affidavits and documentary matter submitted by the Government, the district court treated the Government's motion to dismiss as a motion for summary judgment. The district court first concluded that the special offender classification did not affect petitioner's opportunity for parole. The court found that although petitioner was designated an original jurisdiction case because his was a "stamped file,"³  petitioner's eligibility for parole was not thereby affected. The district judge stated that designation as an original jurisdiction case did not result in delay of eligibility or application of a more stringent standard. The lower court also found, however, that classification as a special offender adversely affected eligibility for transfers, furloughs, and minimum security programs. The district judge concluded, therefore, that classification as a special offender results in a grievous loss requiring the protection of procedural due process. As relief, the district judge ordered the Bureau of Prisons to give petitioner a due process hearing of the sort required by the Second Circuit in Cardaropoli v. Norton, 523 F.2d 990 (2d Cir. 1975), within sixty days or cease to utilize the special offender classification.

The Government asserts that the district court erred in concluding that procedural due process is required prior to classification as a special offender. According to the Government, the special offender classification does not result in a deprivation of a liberty or property interest since transfers, furloughs, and minimum security treatment programs are not rights guaranteed to a prisoner by the Constitution, a federal statute or a federal regulation. On the contrary, the Government contends that conditions of confinement are wholly discretionary with the Bureau of Prisons. The Government, also contends that the only effect of the special offender classification is procedural since decisions relating to these prisoners are merely made by a different group of decision makers higher up in the agency. The Government relies on Moody v. Daggett, 429 U.S. 78, 97 S. Ct. 274, 50 L. Ed. 2d 236 (1976), and Marchesani v. McCune, 531 F.2d 459 (10th Cir. 1976), cert. denied, 429 U.S. 846, 97 S. Ct. 127, 50 L. Ed. 2d 117, and asserts that Holmes v. United States Board of Parole, 541 F.2d 1243 (7th Cir. 1976), was erroneously decided.

This court in Holmes, supra, found that the special offender classification hinders or precludes eligibility for important rehabilitative programs. The court found that the special offender classification adversely affected an inmate's eligibility for transfer, furlough, parole and participation in community programs. The court held "that such (alteration) created by the special offender classification constitutes a 'grievous loss' . . . and, therefore, requires the basic elements of due process." Holmes, 541 F.2d at 1251. The court distinguished Meachum v. Fano, 427 U.S. 215, 96 S. Ct. 2532, 49 L. Ed. 2d 451 (1976), and Montayne v. Haymes, 427 U.S. 236, 96 S. Ct. 2543, 49 L. Ed. 2d 466 (1976), as follows:

The nature of Holmes' interest in furlough and parole also differs from the state prisoners' interest in preventing transfer in Meachum and Montayne. Unlike transfer in which the Court held the prisoners possessed no interest once duly convicted, parole and furlough are held out as rehabilitative programs by the Bureau of Prisons. Guidelines have been promulgated to aid officials in the exercise of their discretion. While there may exist no right to furlough or parole as there exists no right to incarceration in a particular prison, the extension to prisoners by established prison policy of the opportunities of parole and furlough, constitutes a cognizable benefit to prisoners. No such cognizable benefit was bestowed upon the prisoners in Meachum or Montayne and we do not read those cases to eliminate due process where cognizable benefits have been established by prison policy itself and eligibility for the benefits is precluded or significantly reduced by the occurrence of a specified event, that is, the special offender classification.

Holmes, 541 F.2d at 1252-53.

In Moody v. Daggett, 429 U.S. 78, 97 S. Ct. 274, 50 L. Ed. 2d 236 (1976), the Court ruled that a parolee imprisoned for a crime committed while on parole is not entitled to a due process hearing promptly on the issuance of a parole violator warrant and detainer. One of the arguments advanced by petitioner in Moody was that protected liberty interests in both length and conditions of confinement were disregarded since the outstanding detainer adversely affected petitioner's classification status. The Court rejected petitioner's argument as follows:

Petitioner also argues that the pending warrant and detainer adversely affect his prison classification and qualification for institutional programs. We have rejected the notion that every state action carrying adverse consequences for prison inmates automatically activates a due process right. In Meachum v. Fano, . . . for example, no due process protections were required upon the discretionary transfer of state prisoners to a substantially less agreeable prison, even where that transfer visited a "grievous loss" upon the inmate. The same is true of prisoner classification and eligibility for rehabilitative programs in the federal system. Congress has given federal prison officials full discretion to control these conditions of confinement, 18 U.S.C. § 4081, and petitioner has no legitimate statutory or constitutional entitlement sufficient to invoke due process.

Moody, 429 U.S. at 88 n.9, 97 S. Ct. at 279.

Thus, the Court in Moody stated that even though an outstanding detainer may adversely affect prison classification and qualification for rehabilitative programs, a prisoner has no statutory or constitutional entitlement in classification and rehabilitative programs sufficient to invoke due process. Moody, therefore, undercuts the rationale of Holmes.⁴  Although, as we have found in Holmes, classification as a special offender may hinder or preclude eligibility for rehabilitative programs, a prisoner according to Moody does not possess sufficient statutory or constitutional entitlement in his classification or eligibility for institutional programs to trigger due process protection. Absent such entitlement, the fact that the interests of a prisoner are adversely affected and that a grievous loss is suffered does not warrant constitutional protection.⁵  The mere extension to prisoners of institutional programs by established prison policy is, therefore, not a sufficient basis after Moody to invoke due process.⁶ 

Thus, we must overrule our decision in Holmes insofar as we stated in that case that procedural due process applies to classification as a special offender because the classification adversely affects an inmate's eligibility for transfers, furloughs, and minimum security programs.⁷  Accordingly, the judgment by the district court is hereby reversed. Because of our ruling, we need not consider the additional arguments raised by the Government.⁸