FILED
                           NOT FOR FULL-TEXT PUBLICATION                            Feb 04, 2010
                                 File Name: 10a0071n.06                       LEONARD GREEN, Clerk

                                           No. 08-2310

                          UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT

DAVID PICKELHAUPT,

       Plaintiff-Appellee,

v.

ANDREW JACKSON, Warden,                              ON APPEAL FROM THE
Mound Correctional Facility;                         UNITED STATES DISTRICT
RAYMOND BOOKER, Warden,                              COURT FOR THE EASTERN
                                                     DISTRICT OF MICHIGAN
       Defendants,

and

CONSTANCE BANKS, in her official
and individual capacities; MONTINA
MALONE, former Acting Classification
Director, in her official and individual
capacities,

      Defendants-Appellants.
_________________________________________/

BEFORE: SUHRHEINRICH, COLE, and GILMAN, Circuit Judges.

       SUHRHEINRICH, Circuit Judge. Defendants Constance Banks and Montina Malone,

prison officials at the Michigan Department of Corrections (MDOC), bring this interlocutory appeal

to challenge the district court’s decision to deny their motion to dismiss on the basis of qualified

immunity. We REVERSE.

                                         I. Background
        MDOC policy directives and operating procedures authorize the Classification Director to

assign prisoners jobs and to set their wages according to standardized pay scales. MDOC Policy

Directive (PD) 05.02.110, “Prisoner Work Assignment Pay and School Stipend,” states that

“[p]risoners in Correctional Facilities Administration (CFA) who are assigned to work . . . shall be

paid . . . for the assignment as set forth in this policy.” Prisoners working in a position for which

they have provided proof of being currently or previously licensed by a state agency “shall be paid

at the third level of the license pay scale.”

        Plaintiff David Pickelhaupt is an inmate in the custody of the MDOC. He has been

incarcerated at the North Ryan Facility (NRF or Mound) since May 15, 1997. In April 2001,

Pickelhaupt accepted a position performing physical plant maintenance. The Classification Director

at that time, Ava Roby, determined that Pickelhaupt should be paid at the third level of the licensed

pay scale, $3.04 per day (plus an additional $0.30 because Pickelhaupt worked in numerous

hazardous situations), because he had a state certified mechanics license, a certificate of completion

in auto mechanics from a local community college, and over 1000 hours of training.

        In April 2005, the new Classification Director, Montina Malone, audited the pay rates for

prisoners. She concluded that Pickelhaupt should have been paid the standard pay scale rate of $1.77

per day, not the advanced pay scale rate of $3.04 per day, because he was not using his license in the

performance of his prison duties. She reduced his rate accordingly. This reduction occurred without

any notice or hearing.1




        1
            Effective, January 1, 2009, Pickelhaupt’s wage rate was increased from $1.77 to $3.04 per
day.

                                                  -2-
        Pickelhaupt filed a pro se complaint on December 8, 2005, against the NRF. On June 15,

2006, Defendant Andrew Jackson, the Warden at NRF, moved to dismiss the complaint on the

ground that Pickelhaupt failed to exhaust his administrative remedies prior to filing suit as required

by 42 U.S.C. § 1997e(a). On December 4, 2006, the district court ordered that counsel be appointed,

and that Pickelhaupt thereafter have an opportunity to file an amended complaint. On May 25, 2006,

Pickelhaupt filed an amended complaint through counsel against Raymond Booker (former warden

at NRF), Andrew Jackson (former warden at NRF who retired in 2006), John Jeffries (the current

Classification Director at NRF), Ava Roby (the Classification Director at NRF from 2001 to

February 2005), Dr. Constance Banks (the School Principal at NRF), and Montina Malone (the

Classification Director at NRF from April 2005 to October 2005), alleging that they violated his

rights under the Due Process Clause of the Fourteenth Amendment. He also alleged a state-law

claim of promissory estoppel. He sought back pay.

        Defendants moved for summary judgment, arguing they were entitled to qualified immunity.2

The magistrate judge recommended that Defendants’ motion be granted on the ground that

Pickelhaupt had not alleged the violation of a constitutional right because he did not have a property

interest in prison employment. The district court adopted the report and recommendation in part and

rejected it in part.3




        2
         Originally the parties agreed to dismiss Jeffries and Malone, so the summary judgment
motion was filed by Booker, Jackson, Jeffries, Roby, and Banks. Later, the parties agreed to
reinstate Malone as a party and to dismiss Roby.
        3
         The district court otherwise agreed with the magistrate’s recommendations to dismiss the
other claims and defendants.

                                                 -3-
       The district court concluded that Pickelhaupt had created a genuine issue of material fact

regarding whether he had a protected property interest based on the language of the MDOC policies.

Thus, the district court held that “it would have been apparent that procedural due process requires

notice and a hearing before the deprivation.” Pickelhaupt v. Booker, No. 05-74660, U.S. Dist.

LEXIS, at *7 (W.D. Mich., Sept. 30, 2008) (citing Cleveland Bd. of Educ. v. Loudermill, 

, 542 (1985)).

       Banks and Malone filed this timely appeal. The district court subsequently issued an order

staying the case pending resolution of this appeal.

                                    II. Appellate Jurisdiction

       Initially, we consider our jurisdiction to hear this appeal. It is well settled that an order

denying qualified immunity is immediately appealable pursuant to the “collateral order” doctrine if

the denial is based on a pure issue of law. Chappell v. City of Cleveland, 

, 905 (6th

Cir. 2009).4

                                      III. Qualified Immunity

       Government officials acting within the scope of their authority are entitled to immunity from

suit unless their conduct violates the plaintiff’s clearly-established constitutional rights. Harlow v.

Fitzgerald, 

, 818 (1982); Jones v. Byrnes, 

, 974 (6th Cir. 2009) (per

curiam). Qualified immunity involves a two-step analysis: First, the court asks whether the

official’s conduct violated a constitutional right, and if so, the question becomes whether that right

was “clearly established” at the time of the violation. 

. If the answer to either



       4
         Defendants have conceded Pickelhaupt’s version of the facts so that only a question of law
is presented.

                                                 -4-
question is no, then the official is entitled to qualified immunity. 

Court recently

made clear in Pearson v. Callahan, – U.S. – , 

(2009), that the courts are free to

answer these questions in any order. See 

.

       “The Fourteenth Amendment protects an individual from deprivation of life, liberty or

property, without due process of law.” Bazetta v. McGinnis, 

, 801 (6th Cir. 2005). To

establish a Fourteenth Amendment procedural due process violation, a plaintiff must show that one

of these interests is at stake. Wilkinson v. Austin, 

, 221 (2005). Thus, procedural due

process analysis involves two steps: “[T]he first asks whether there exists a liberty or property

interest which has been interfered with by the State; the second examines whether the procedures

attendant upon that deprivation were constitutionally sufficient.” Ky. Dep't of Corrs. v. Thompson,

, 460 (1989) (citations omitted); 

. In other words, the question

of what process is due is relevant only if the inmate establishes a constitutionally protected interest.

See 

.

       Pickelhaupt claims that he has a constitutionally protected property interest in the wage Roby

contracted to pay him based on the authority delegated to the Classification Director in the MDOC

policies and regulations. Defendants contend that Pickelhaupt has no such property interest, based

on the rule of Sandin v. Conner, 

(1995). In Sandin, the Supreme Court held that state

prison regulations do not create protected liberty interests unless they impose restraints “which,

while not exceeding the sentence in such an unexpected manner as to give rise to protection by the

Due Process Clause of its own force, nonetheless imposes atypical and significant hardship on the

inmate in relation to the ordinary incidents of prison life.” Sandin v. Conner, 

, 484

(1995) (citations omitted).


                                                  -5-
        The issue in Sandin was whether the prisoners had a right to procedural due process prior to

their placement into segregated confinement as punishment for disruptive behavior. The Sandin

Court noted that some of its earlier cases, particularly Hewitt v. Helms, 

(1983), used

a methodology for identifying state-created interests that emphasized “the language of a particular

[prison] regulation” rather than “the nature of the deprivation.” 

, 482. The

Sandin Court criticized this approach because it created a disincentive for states to codify prison

management procedures, and it involved the federal courts in the day-to-day managment of prisons.

The Sandin Court therefore rejected the Hewitt methodology of parsing the language

of particular regulations and stated that the relevant inquiry must focus on the nature of the

deprivation imposed on a prisoner, and whether it imposes an “atypical and significant hardship . .

. in relation to the ordinary incidents of prison life.” 

See also 

(“After Sandin, it is clear that the touchstone of the inquiry into the existence of a protected,

state-created liberty interest in avoiding restrictive conditions of confinement is not the language of

regulations regarding those conditions but the nature of those conditions themselves “in relation to

the ordinary incidents of prison life.” (citing 

)).

        Under this “refined inquiry,” the Sandin Court held that the prisoners did not have a liberty

interest protecting against a thirty-day assignment to segregated confinement because it did not

“‘present a dramatic departure from the basic conditions of [the inmate’s] sentence.’” 

(quoting 

) (alteration in Wilkinson). Cf. 

(holding that

prisoners “have a liberty interest in avoiding assignment to [a super-maximum security prison]”).

        Defendants argue that the Sandin test applies equally to both liberty and property interests.

The Circuits are split on this question. The Second and Fifth Circuits hold that Sandin does not


                                                  -6-
apply to property interests. Handberry v. Thompson, 

, 353 n.6 (2d Cir. 2006) (“Sandin

was concerned with the proper definition of liberty interests, not property interests.”); Bulger v. U.S.

Bureau of Prisons, 

, 50 (5th Cir. 1995) (remarking that Sandin “did not instruct on the

correct methodology for determining when prison regulations create a protected property interest”).

       On the other hand, the Tenth Circuit has flatly rejected this view, holding that Sandin applies

to both liberty and property interests in the prison context:

       [W]e do not see how the Supreme Court could have made clearer its intent to reject
       the Hewitt analysis outright in the prison context. Indeed, if we are to avoid Hewitt’s
       “two undesirable effects” ((1) creating disincentives for states to codify management
       procedures and (2) entangling the federal courts in the day-to-day management of
       prisons) in the context of prison property interests, 

, . . . and
       return the focus of our due process inquiry from “the language of a particular
       regulation” to “the nature of the deprivation” as Sandin mandates, 

. . . we
       must conclude that the Supreme Court foreclosed the possibility of applying the
       Hewitt methodology to derive protected property interests in the prison conditions
       setting. The Supreme Court mandate since Sandin is that henceforth we are to
       review property and liberty interests claims arising from prison conditions by asking
       whether the prison condition complained of presents “the type of atypical significant
       deprivation in which a State might conceivably create a liberty [or property] interest.”
       

Cosco v. Uphoff, 

, 1223-24 (10th Cir. 1999) (rejecting Bulger) (footnotes omitted).

See also Murdock v. Washington, 

, 513 (7th Cir.1999) (suggesting but not expressly

holding that Sandin applies to property interest claims brought by prisoners); Abdul-Wadood v.

Nathan, 

, 1025 (7th Cir.1996) (same).

       Both this Court and the Ninth Circuit have suggested but not directly held that Sandin does

not apply to Hewitt-type property interests. See Woodard v. Ohio Adult Parole Auth., 

,

1182-83 (6th Cir. 1997) (noting “the Supreme Court has made it clear that both state law and the Due

Process Clause itself may create [a liberty] interest,” while the prevailing doctrine instructs that



                                                  -7-
“state law controls as to the existence of a property interest”; and noting that “state law plays a role

in determining the existence of property or liberty interests”), rev’d on other grounds, 

(1998); Martin v. Upchurch, 

, 

, at *2 n.2 (9th Cir. Sept. 22, 1995)

(unpublished) (concluding that under Sandin a prisoner had no liberty interest in his prison job, but

ruling that the prisoner had no property interest in the prison job because state law made prisoner

employment a discretionary decision by prison officials). See also 

n.3

(discussing Sixth Circuit’s and Ninth Circuit’s view). However, in several unpublished decisions,

this Court, citing Sandin, held that the plaintiff prisoner had “no property interest in his prison job

created under state law and protected by due process.” Clarkston v. Powers, No. 00-5065, 

(6th Cir. Nov. 2, 2000); Perry v. Rose, No. 99-5240, 

(6th Cir. Feb. 7, 2000); see

also Izard v. Blair, No. 97-6098, 

(6th Cir. Feb. 3, 1999) (citing Bulger for proposition

that a prisoner has no constitutionally protected right to a job or wage, and noting that BOP

regulations did not create a liberty interest, citing Sandin).

        In any event, we need not decide today whether Sandin applies to protected property interests,

because Pickelhaupt has failed to demonstrate that this purported right was clearly established.

Although, as the district court held, if a property interest existed, it was clearly established in 2005

that a predeprivation hearing was required, it was not clearly established in 2005 that Pickelhaupt

had a constitutionally protected property interest in a prison job at a set wage based on state

regulations. As explained above, the Supreme Court’s 1995 Sandin decision casts doubt on Hewitt-

type property interests. For this reason, Pickelhaupt’s reliance on this court’s 1989 decision in

Newsom v. Norris, 

(6th Cir. 1989), is equally unavailing, since Sandin cast doubt on

the validity of that decision. See 

(stating that “[e]xisting precedent


                                                  -8-
confirms that the Constitution does not create a property or liberty interest in prison employment .

. . and that any such interest must be created by state law by language of an unmistakably mandatory

character,” and that “[e]xisting precedent has recognized that ‘prison officials’ policy statements and

other promulgations’ can create constitutionally protected interests in favor of the prisoners”

(internal quotation marks, alterations, and citations omitted)). Indeed, as noted above, several panels

of this court have relied on Sandin to hold that a prisoner lacked a state-created property interest in

employment, despite Newsom. Thus, the district court erred in ruling that Defendants were not

entitled to qualified immunity for Pickelhaupt’s Fourteenth Amendment procedural due process

claim.

                                 IV. Promissory Estoppel Claim

         Although the exercise of supplemental jurisdiction under 28 U.S.C. § 1367 is discretionary,

when a federal claim is properly dismissed before trial, it is customary to dismiss the state-law

claims without prejudice. See Harper v. AutoAlliance Int’l., Inc., 

, 210 (6th Cir. 2004).

Dismissal of Pickelhaupt’s state-law promissory estoppel claim for resolution in the state courts is

in the best interests of both the federal and state courts here. See 

         For the foregoing reasons, we REVERSE the decision of the district court as to Defendants

Banks and Malone and REMAND with instructions to dismiss the action against these defendants

on the basis of qualified immunity. The district court is further instructed to DISMISS Pickelhaupt’s

state-law promissory estoppel claim against them without prejudice.




                                                  -9-