United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 05-3490
                                    ___________

Dennis Fults,                         *
                                      *
           Plaintiff - Appellee,      *
                                      * Appeal from the United States
      v.                              * District Court for the Eastern District
                                      * of Arkansas.
Linda Sanders, Warden, FCI - FC,      *
                                      *
           Defendant - Appellant.     *
                                 ___________

                           Submitted: December 15, 2005
                               Filed: April 6, 2006
                                   ___________

Before RILEY, LAY, and MELLOY, Circuit Judges.
                            ___________

MELLOY, Circuit Judge.

       The Bureau of Prisons (BOP) passed a regulation that limits the portion of an
inmate’s sentence that can be served in a Community Corrections Center (CCC),
commonly known as a halfway house. Dennis Fults, an inmate who wished to be
transferred to a CCC, petitioned for a writ of habeas corpus arguing that this
regulation is invalid. The district court1 struck down the regulation on the basis that
it conflicts with 18 U.S.C. §3621(b), and the BOP appealed. We affirm.


      1
       The Honorable George Howard, Jr., United States District Judge for the
Eastern District of Arkansas.
                                          I.

       On January 21, 2005, Fults was sentenced to an eighteen-month term of
incarceration for concealment of assets in violation of 18 U.S.C. § 152. According to
a BOP regulation put into place on February 14, 2005, Fults would have become
eligible for pre-release placement in a CCC on January 6, 2006, if he earned all
possible credits for good conduct.2 This regulation limits Fults’ time in a CCC to ten
percent of his sentence–forty-seven days. Fults sought to be transferred to a CCC for
180 days. Fults filed suit contending that the regulation misconstrues the discretion

      2
          28 C.F.R. § 570.20 states:

      (a) This subpart provides the Bureau of Prisons’ (Bureau) categorical
      exercise of discretion for designating inmates to community
      confinement. The Bureau designates inmates to community confinement
      only as part of pre-release custody and programming which will afford
      the prisoner a reasonable opportunity to adjust to and prepare for re-entry
      into the community.

      (b) As discussed in this subpart, the term “community confinement”
      includes Community Corrections Centers (CCC) (also known as
      “halfway houses”) and home confinement.

28 C.F.R. § 570.21 states:

      (a) The Bureau will designate inmates to community confinement only
      as part of pre-release custody and programming, during the last ten
      percent of the prison sentence being served, not to exceed six months.

      (b) We may exceed these time-frames only when specific Bureau
      programs allow greater periods of community confinement, as provided
      by separate statutory authority (for example, residential substance abuse
      treatment program (18 U.S.C. § 3621(e)(2)(A)), or shock incarceration
      program (18 U.S.C. § 4046(c)).


                                         -2-
granted to the BOP by § 3621(b) and violates the Ex Post Facto Clause. Solely on the
basis of the former argument, the district court ordered the BOP to consider in good
faith whether to transfer Fults to a CCC to serve the final 180 days of his sentence.

                                          II.

      Prior to December 2002, the BOP allowed an inmate to be placed in a CCC for
up to six months, regardless of the total length of the inmate’s sentence. On
December 13, 2002, the Office of Legal Counsel for the Department of Justice issued
a memorandum stating that this practice was inconsistent with § 3624(c) which, in its
opinion, limited an inmate’s placement in a CCC to the lesser of six months or ten
percent of the inmate’s sentence. Section 3624(c) states:

      The Bureau of Prisons shall, to the extent practicable, assure that a
      prisoner serving a term of imprisonment spends a reasonable part, not to
      exceed six months, of the last 10 per centum of the term to be served
      under conditions that will afford the prisoner a reasonable opportunity
      to adjust to and prepare for the prisoner’s re-entry into the community.
      The authority provided by this subsection may be used to place a
      prisoner in home confinement. The United States Probation System
      shall, to the extent practicable, offer assistance to a prisoner during such
      pre-release custody.

The BOP adopted the Office of Legal Counsel’s interpretation of this statute, but we
later rejected that interpretation and invalidated the December 2002 policy in Elwood
v. Jeter, 

(8th Cir. 2004). We stated that the BOP has the discretion to
transfer an inmate to a CCC at any time, but only the duty to consider a transfer to a
CCC in the last six months of a sentence. 

      In February 2005, in response to Elwood and a similar decision from the First
Circuit, Goldings v. Winn, 

(1st Cir. 2004), the BOP created new
regulations governing the placement of inmates in CCCs. These regulations state that

                                          -3-
the BOP was engaging in a “categorical exercise of discretion” and choosing to
“designate inmates to [CCC] confinement only . . . during the last ten percent of the
prison sentence being served, not to exceed six months.” 28 C.F.R. § 570.20-21. The
BOP contends that this exercise of discretion is permissible under § 3621(b) which
states:

      The Bureau shall designate the place of the prisoner’s imprisonment.
      The Bureau may designate any available penal or correctional facility
      that meets minimum standards of health and habitability established by
      the Bureau, whether maintained by the Federal Government or otherwise
      and whether within or without the judicial district in which the person
      was convicted, that the Bureau determines to be appropriate and suitable,
      considering--
      (1) the resources of the facility contemplated;
      (2) the nature and circumstances of the offense;
      (3) the history and characteristics of the prisoner;
      (4) any statement by the court that imposed the sentence--
             (A) concerning the purposes for which the sentence to
             imprisonment was determined to be warranted; or
             (B) recommending a type of penal or correctional facility as
             appropriate; and
      (5) any pertinent policy statement issued by the Sentencing Commission
      pursuant to section 994(a)(2) of title 28.

      In designating the place of imprisonment or making transfers under this
      subsection, there shall be no favoritism given to prisoners of high social
      or economic status. The Bureau may at any time, having regard for the
      same matters, direct the transfer of a prisoner from one penal or
      correctional facility to another. The Bureau shall make available
      appropriate substance abuse treatment for each prisoner the Bureau
      determines has a treatable condition of substance addiction or abuse.


                                      -4-
                                         III.


       “We review the district court’s statutory interpretation de novo.” Haug v. Bank
of America, N.A., 

, 835 (8th Cir. 2003). Although an agency’s
interpretation of a statute that it is entrusted to administer is generally entitled to
deference, Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 

, 844
(1984), if the intent of Congress is clear, there is no need to defer to the agency’s
interpretation. 

, 838-39. We believe that the BOP’s
interpretation of the statute is contrary to the statute’s unambiguous language. As
such, we do not give deference to the BOP’s interpretation.


                                         IV.


       There is no question that §3621(b) provides the BOP with broad discretion to
choose the location of an inmate’s imprisonment. This case requires us to determine
whether that discretion can be exercised on a categorical basis. The BOP argues that
its exercise of discretion is consistent with the Supreme Court’s opinion in Lopez v.
Davis, 

(2001).


        In Lopez, the Supreme Court addressed the BOP’s categorical exercise of
discretion under 18 U.S.C. § 3621(e)(2)(b), which stated that an inmate convicted of
a non-violent offense could have his or her period of incarceration reduced after
successfully completing a drug treatment program. The BOP had issued a regulation
excluding inmates from early release under this provision if they were convicted of
non-violent crimes involving firearms. 28 C.F.R. § 550.58(a)(1)(vi)(B). The Supreme
Court upheld the regulation stating that nothing in the statute at issue prohibited
“categorical exclusions.” 

.




                                         -5-
       We believe that Lopez is distinguishable from this case. As the Lopez Court
noted, “constraints . . . requiring the BOP to make individualized determinations based
only on postconviction conduct–are nowhere to be found in § 3621(e)(2)(b).” 

In fact, the subsection at issue in Lopez offers no specific criteria to be
considered–other than the overarching criterion that only nonviolent offenders are
eligible for early release. Accordingly, the BOP can make categorical decisions
within that class of offenders without violating that subsection.


       Subsection 3621(b) is different from § 3621(e)(2)(b) in that the former lays out
criteria that must be considered by the BOP in making placement determinations.
Three of these factors–the nature and circumstances of the offense, the history and
characteristics of the prisoner, and any statement by the court that imposed the
sentence–cannot be fully considered without evaluating inmates on a case-by-case
basis. Accordingly, Lopez, which dealt with a subsection void of any individual
criteria, is not controlling.


      The Third Circuit is the only Court of Appeals to have ruled on the validity of
the BOP’s February 2005 regulation. See Woodall v. Fed. Bureau of Prisons, 

(3d Cir. 2005). In holding that the regulation was invalid, the Woodall court
said:




      3
       18 U.S.C. § 3621(e)(2)(b) states: “The period a prisoner convicted of a
nonviolent offense remains in custody after successfully completing a treatment
program may be reduced by the Bureau of Prisons, but such reduction may not be
more than one year from the term the prisoner must otherwise serve.”




                                         -6-
       The regulations do not allow the BOP to consider the nature and
       circumstances of an inmate’s offense, his or her history and pertinent
       characteristics, or most importantly, any statement by the sentencing
       court concerning a placement recommendation and the purposes for the
       sentence. And yet, according to the text and history of § 3621, these
       factors must be taken into account. The regulations are invalid because
       the BOP may not categorically remove its ability to consider the explicit
       factors set forth by Congress in § 3621(b) for making placement and
       transfer determinations.

.


        The BOP offers a number of counter-arguments. First, it contends that §
3621(b) provides the BOP with the discretion to consider the enumerated factors, but
not the duty to do so. Second, it claims that it did consider the enumerated factors
in making the decision to categorically exclude from CCC placement those inmates
not within the last ten percent of their sentences. Third, it asserts that it will consider
the enumerated factors on an individualized basis when making placement decisions
for inmates who are in the last ten percent of their sentences. These arguments were
all also raised in the Woodall case, and we reject them for the same reasons discussed
at length in that opinion. 

. Those reasons are
summarized below.


       The BOP’s first argument hinges on the use of the word “may,” rather than
“shall,” at the beginning of § 3621(b).4 We agree with the Woodall Court that the


       4
         18 U.S.C. § 3621(b) states: “The Bureau may designate any available penal or
correctional facility that meets minimum standards of health and habitability
established by the Bureau, whether maintained by the Federal Government or
otherwise and whether within or without the judicial district in which the person was
convicted, that the Bureau determines to be appropriate and suitable, considering
. . . .”

                                           -7-
term “may” describes the BOP’s discretionary ability to place an inmate in any penal
facility that meets the appropriate standards. The term does not modify the BOP’s
duty to consider the five enumerated factors when making placement decisions. The
word immediately preceding the factors is “considering.” This implies that the BOP
must consider all of the factors that follow. This implication is bolstered by the
statute’s legislative history as discussed in Woodall. 

.
Nothing in § 3621(b) suggests that consideration of the factors is optional.


       The BOP’s contention that it considered all of the factors in making its
categorical exercise of discretion is without merit. Three of the five factors relate to
an inmate’s individual circumstances. Accordingly, it would not have been possible
for the BOP to consider all of the factors when it promulgated the regulations.


       The BOP’s most persuasive argument is that the § 3621(b) factors need not be
considered until the BOP considers whether a specific individual should be
transferred. This interpretation of the statute was the main focus of the dissent in
Woodall. 

(Fuentes, J. dissenting) (“[T]he § 3621(b)
factors need not be considered by the BOP until an inmate is actually considered for
a transfer, and . . . the BOP is not required to consider any inmate for transfer to a
CCC until the lesser of six months or ten percent of an inmate’s sentence remains.”).
The BOP asserts that there is no temporal requirement in § 3621(b) and that §
3624(c) requires the consideration of a transfer to a CCC only in the last ten percent
of an inmate’s sentence.


      We disagree with this interpretation. A BOP decision to not transfer an
inmate–or, as in this case, a group of inmates–requires the same consideration of the
§ 3621(b) factors as does the decision to transfer an inmate to a CCC. It is
impossible for the BOP to consider all five factors on a categorical basis. As such,


                                          -8-
the BOP’s regulation necessarily conflicts with § 3621(b) by excluding an entire class
of inmates–those not serving the final ten percent of their sentences–from the
opportunity to be transferred to a CCC.


      The district court stated that while “the BOP labeled the [February 2005
regulation] a ‘categorical exercise of discretion’ it did not exercise its discretion at
all.” We agree that the BOP’s regulation removed the opportunity for the BOP to
exercise discretion for all inmates not serving the last ten percent of their sentences.
Section 3621(b) requires that discretion be exercised on an individual basis. Thus,
the BOP’s regulation conflicts with § 3621(b) and is invalid.


                                          V.


       Because we agree with the district court that the BOP’s regulation is in
violation of § 3621(b), we need not address Fults’s Ex Post Facto Clause arguments.


                                          VI.


      For the foregoing reasons, we affirm the judgment of the district court.




RILEY, Circuit Judge, dissenting.


      I respectfully dissent. Almost two years ago, this same panel entertained a
challenge to the temporal limitations of 18 U.S.C. § 3624(c). See Elwood v. Jeter,


                                          -9-


(8th Cir. 2004). The majority in Elwood interpreted 18 U.S.C.
§§ 3621(b) and 3624(c), and held the Bureau of Prisons (BOP) has discretion to
transfer a prisoner to a community confinement center (CCC) at any time during a
prisoner’s incarceration, notwithstanding section 3624(c)’s express six-month
limitation for such confinements. 

In my dissenting opinion, I concluded
the specific limitation of authority to transfer prisoners to CCCs was mandated by
Congress in section 3624(c), and the express six-month limitation did not conflict
with the general authority Congress gave in section 3621(b). 

(Riley, J.,
dissenting). This construction of the two statutes harmonized the law, did not render
any terms in either statute meaningless, comported with the canon of statutory
construction “the specific governs the general,” and carried out Congress’s intent.

(Riley, J., dissenting).


       On February 14, 2005, in response to Elwood and similarly decided cases, the
BOP implemented regulations identifying a category of inmates who are ineligible
for transfer to CCCs under section 3621(b): those inmates whose remaining sentence
exceeds the lesser of six months or 10% of their original sentence. 28 C.F.R.
§ 570.20, .21. These regulations use the BOP’s discretionary authority under section
3621(b) to bring the BOP’s procedures into compliance with section 3624(c). The
majority, however, believes the BOP’s regulations conflict with section 3621(b).


       I am convinced the BOP’s categorical rules governing transfer of inmates to
CCCs, and implementing section 3624(c), do not conflict with the factors enumerated
in section 3621(b). My conviction coincides with Judge Fuentes’s dissenting opinion
in Woodall v. Federal Bureau of Prisons, 

, 251-52 (3rd Cir. 2005).
Judge Fuentes concluded that until the lesser of six months or 10% of an inmate’s
sentence remains, the BOP may categorically preclude the consideration of any
inmate for CCC transfer. 

, dissenting and citing three similar opinions
upholding the regulations).


                                         -10-
       Section 3621(b)’s requirement that the BOP make individualized assessments
when transferring inmates to CCCs applies only when the BOP elects to consider
whether to make a transfer. The BOP is not required to consider transferring any
inmate under its custody before the point in an inmate’s sentence identified by
statute. In Lopez v. Davis, 

(2001), the Supreme Court held the BOP
is authorized to create categorical rules, because “[e]ven if a statutory scheme
requires individualized determinations . . . the decisionmaker has the authority to rely
on rulemaking to resolve certain issues of general applicability unless Congress
clearly expresses an intent to withhold that authority.” 

(internal
quotation omitted). The statute is clear, see section 3624(c), and the applicable
Supreme Court holding is unmistakable, see 

-44. The BOP’s
regulations properly follow and implement the law.


      Accordingly, I dissent.
                       ______________________________




                                         -11-