U.S. District Court: INMATE FUNDS INTEREST.

Schneider v. California Dept. of Corrections. 91 F.Supp.2d 1316 (N.D.Cal. 2000). Current and former state inmates brought a [sections] 1983 action alleging that the California Department of Corrections (CDC) violated the takings clause and the equal protection clause by failing to pay constructive interest on funds deposited by inmates into inmate trust accounts (ITA). The district court dismissed the action but the appeals court reversed and remanded. On remand the district court entered summary judgment for the defendants. The district court held that the CDC failure to pay interest on funds that inmates placed in non-interest bearing ITAs did not violate the takings clause. The court found that the CDC practice of applying interest earned on excess ITA funds for use in the Inmate Welfare Fund was not an unconstitutional taking, but rather provided the inmates with a benefit rather than an unwarranted burden. The court acknowledged that inmates hold a property interest that is protected by the takings claus e both in funds that they deposit into ITAs and in any interest income earned therefrom. (Pelican Bay State Prison, California Correctional Institution, and Central California Women's Facility)