Opinion
Civil No. 04-498-HA.
May 28, 2004
OPINION AND ORDER
Petitioner brings this petition for writ of habeas corpus pursuant to 28 U.S.C. § 2241, 1331, and 1343(4). For the following reasons, the petition (Doc. #1) is GRANTED.
FACTUAL AND PROCEDURAL BACKGROUND
Petitioner is a federal inmate being housed by the Bureau of Prisons (BOP) at the Federal Prison Camp located at Sheridan, Oregon, a part of the Federal Correctional Institution (FCI) Sheridan. Petitioner is in custody pursuant to a 1997 conviction in the District of Minnesota of conspiracy to distribute and posses with intent to distribute cocaine base in violation of 21 U.S.C. § 841(a)(1) and 846. In July 1997, petitioner was sentenced to 130 months of imprisonment and five years of post-prison supervision.
In January 1998, petitioner was accepted into the BOP's residential substance abuse treatment program (DAP), but was denied eligibility for the sentence reduction based on a two-point sentencing enhancement because he possessed a firearm during the commission of his offense. In June 1999, petitioner successfully completed the treatment program. Two months later, petitioner filed a request with the warden for early release pursuant to 18 U.S.C. § 3621(e). The warden denied petitioner's request. Petitioner appealed the warden's decision and the appeal was denied. On January 27, 2004, petitioner filed a request for an administrative remedy with the warden regarding his release status. This request was denied. On February 19, 2004, petitioner appealed the warden's denial of his request to the regional director. The regional director denied petitioner's appeal. On April 5, 2004, petitioner appealed the regional director's denial. This appeal is still pending. On April 12, 2004, petitioner filed this action.
Petitioner asserts that his rights are being violated by the BOP personnel at FCI Sheridan. Petitioner argues that the BOP personnel are unlawfully finding him ineligible for a one-year reduction of his sentence. See Bohner v. Daniels, 243 F. Supp.2d 1171 (D. Or. 2003). ANALYSIS
"[E]very prisoner with a substance abuse problem [shall] have the opportunity to participate in appropriate substance abuse treatment. . . ." 18 U.S.C. § 3621(e). As an incentive for prisoners to seek treatment, Congress made one-year sentence reductions available to prisoners convicted of nonviolent offenses who successfully completed the substance abuse treatment programs. 18 U.S.C. § 3621(e)(2)(B).
Prior to 1997, the BOP's regulation and program statements defined a "nonviolent" offense to exclude any conviction accompanied by the possession of a firearm or other dangerous weapon. The Ninth Circuit rejected the BOP's interpretation, holding that the BOP cannot define "nonviolent offense" to exclude firearm possession when Congress defines "nonviolent offense" in precisely the opposite way. Davis v. Crabtree, 109 F.3d 566, 569 (9th Cir. 1997); see also Downey v. Crabtree, 100 F.3d 662, 667 (9th Cir. 1996).
Accordingly, the BOP amended its regulation and program statements governing prisoners' eligibility for early release. See 28 C.F.R. § 550.58; P.S. 5162.04 (Oct. 9, 1997); P.S. 5330.10 (Oct. 9, 1997) (the "1997 rule and program statements"). Relying instead on its discretion rather than on an interpretation of the term "nonviolent offense," the BOP's 1997 rule and program statements excluded exactly the same prisoners from early release eligibility who were ineligible under the old rules. Id.
The courts upheld this exercise of the BOP's discretion, but declined to consider whether the October 1997 rule and program statements were invalid because they were not implemented in accordance with the notice and comment provisions of the Administrative Procedures Act (APA). Lopez v. Davis, 531 U.S. 230, 244 (2001); Grassi v. Hood, 251 F.3d 1218, 1221 (9th Cir. 2001); Bowen v. Hood, 202 F.3d 1211 (9th Cir. 2000), rev'g Gavis v. Crabtree, 28 F. Supp.2d 1264 (D. Or. 1998) (holding that the BOP's new interpretation conflicted with the unambiguously expressed intent of Congress, meriting no deference).
In May 2003, this court held in Bohner v. Daniels, 243 F. Supp.2d 1171 (D. Or. 2003), that the 1997 rules were invalid because they were promulgated in violation of the APA. The court granted relief to prisoners who had been accepted into the program prior to the promulgation of the final rules in December 2000. The court's decision has been appealed to the Ninth Circuit. At the date of this opinion and order, the Ninth Circuit has yet to render an opinion.
1. The 1997 Rule Violates the APA
The Supreme Court has stated that if an agency, such as the BOP, violates 5 U.S.C. § 553(d)'s requirement that an agency publish a substantive rule "not less than 30 days before its effective date," the rule is invalid as to persons disqualified prior to the issuance of the final rule. See Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 225 (1988) (Scalia, J., concurring); see also Buschmann v. Schweiker, 676 F.2d 352, 358 (9th Cir. 1982).
In Bohner, this court found that:
Based on the undisputed facts as to the procedural history of the rule promulgation, it is apparent that the procedures utilized to adopt the regulation did not comply with the APA. The Bureau violated the APA's thirty-day advance notice requirement by making the 1997 regulation effective as of October 9, 1997, rather than as of November 14, 1997, thirty days after the October 15, 1997 publication in the Federal Register. Thus, based on the undisputed facts, the requirements of the APA were not observed. Bohner, 243 F. Supp.2d at 1174-75.
Furthermore, this court found that the BOP violated Section 553(b)'s general notice requirement:
The purpose [of Section 553(b)] is both (1) to allow the agency to benefit from the expertise and input of the parties who file comments with regard to the proposed rule, and (2) to see to it that the agency maintains a flexible and open-minded attitude towards its own rules, which might be lost if the agency had already put its credibility on the line in the form of "final" rules.Id. at 1175; see Nat'l Tour Brokers' Ass'n v. United States, 591 F.2d 896, 902 (D.C. Cir. 1978); see also Buschmann, 676 F.2d at 357 (9th Cir. 1982) (observing that the notice and comment procedures protect "the right of the people to present their views to the government agencies which increasingly permeate their lives" and that "the interchange of ideas between the government and its citizenry provides a broader base for intelligent decision-making and promotes greater responsiveness to the needs of the people. . . .").
In Bohner, this court found the BOP's violation of Section 553(b) just as evident as its violation of Section 553(d). The BOP referred to the 1997 rule as an "interim rule" and invited the public to submit comments. As with most interim rules, the 1997 rule became effective immediately. In fact, the BOP published nothing in the Federal Register until October 15, 1997, while the effective date of the regulation was October 9, 1997. Bohner, 243 F. Supp.2d at 1175. Additionally, the court found that no statutory exceptions to Section 553(b)'s notice and comment requirements applied. Id. at 1175-76.
The BOP asserted in Bohner that even if the 1997 rule is invalid, the 1997 program statements provide separate grounds for excluding petitioner from eligibility for early release. This court rejected that argument. According to Grassi, regardless of the invalidity of the BOP's 1997 rule, its 1997 program statement stands. Grassi, 251 F.3d at 1221. However, Grassi declined to analyze the regulation under the APA, holding instead that regardless of whether the 1997 regulation violated the APA, the program statement has continuing validity. Id.
In Gunderson v. Hood, 123 F. Supp.2d 1219, 1220 n. 1 (D. Or. 2000), this court vacated judgment and stayed the case pending the Ninth Circuit's mandate in Bowen. Petitioner Gunderson moved to lift the stay on grounds that the new program statements were in conflict with the BOP's new regulation, denying him a benefit that the regulation standing alone would not. Id. at 1220-21. Affirming this court's denial of relief to Gunderson, the Ninth Circuit held that "[b]ecause, in this instance, Program Statement 5162.04 did no more than `clarify or explain existing law,' it was interpretive and thus not subject to the rigors of the APA." Gunderson, 268 F.3d at 1149, 1155 (9th Cir. 2001).
This court originally granted Gunderson's writ for habeas corpus under the controlling law in this circuit at that time. However, as a result of Bowen, the law regarding the BOP's ability to deny inmates one-year sentence reduction changed substantially, and the court's original grounds for granting the petition were no longer valid. Accordingly, the court vacated the judgment and stayed the case pending the Ninth Circuit's mandate in Bowen.
Grassi's holding is in direct conflict with Gunderson's holding that the program statement merely interprets the regulation, and thus the program statement cannot be viable on its own. In Bohner, this court found that the precedents cannot be reconciled, and that it was without power to decide which should govern. Bohner, 243 F. Supp.2d at 1178-79; Atonio v. Wards Cove Packing Co., Inc., 810 F.2d 1477, 1478 (9th Cir. 1987) (appropriate mechanism for resolving an irreconcilable panel conflict is an en banc decision).
Nonetheless, in Bohner, this court concluded only one outcome was possible: the program statements may not be used to deny a petitioner early release. Bohner, 243 F. Supp.2d at 1179. If Grassi is correct, the 1997 program statements would deny a petitioner a sentence reduction independent of the 1997 rule. Accordingly, the program statements should have been classified as legislative rules, and promulgated in compliance with the APA's notice and comment requirements. However, because they were not, they cannot be relied upon to deny a petitioner early release. Id.
Alternatively, if Gunderson is correct, the 1997 program statements only interpret the 1997 rule. As explained in Bohner, the 1997 rule is invalid, leaving no rule for the 1997 program statements to interpret. Thus, the 1997 program statements cannot be relied upon to deny a petitioner early release. Id. 2. Application of Bohner to Petitioner
Petitioner was convicted of a nonviolent offense and claims he is eligible for reduction of his period of custody under 18 U.S.C. § 3621(e). Petitioner was accepted into the DAP program in January 1998. At that time, the BOP deemed petitioner ineligible under the invalid 1997 interim rules. Petitioner argues that he is entitled to be treated as eligible under the statute and former regulation because promulgation of a rule without following the APA "renders it ineffective so far as extinguishing rights of those otherwise within the class of beneficiaries. . . ." Morton v. Ruiz, 415 U.S. 199, 235-36 (1974). In addition, petitioner argues that an improperly promulgated interim rule cannot be cured by a properly promulgated final regulation, and that relief is available to the class of persons adversely affected by the interim rule. See Bohner, 243 F. Supp.2d at 1176.
Respondent argues that petitioner's reliance on the APA is misplaced because the APA applies to substantive rules and not to general statements of policy. This argument was rejected in Bohner and is likewise rejected here. The BOP's program statements would have been subject to the APA notice-and-comment requirements as legislative rules and, under Gunderson, the 1997 regulations were procedurally invalid. Id. at 1178-79.
Respondent alternatively argues that even if the BOP violated the APA by not complying with the notice requirement, petitioner is not entitled to relief because he was not prejudiced by that non-compliance. Respondent asserts that to demonstrate such prejudice, petitioner must show how he was harmed by the BOP's decision to make the 1997 interim regulation effective prior to the thirty day waiting period required under the APA. In Bohner, this court considered a similar argument and rejected it on the grounds that an improperly promulgated interim rule is invalid as to persons disqualified prior to the issuance of the final rule. Id.; see also Morton, 415 U.S. at 235-36. Otherwise, "agencies would be free to violate the rulemaking requirements of the APA with impunity if, upon invalidation of the rule, they were free to `reissue' that rule on a retroactive basis." Bowen, 488 U.S. at 225 (Scalia, J., concurring) (citation omitted). The BOP's final rule was issued in December 2000. Petitioner was deemed ineligible in January 1998. Accordingly, the 1997 interim regulation may not be applied to petitioner.
In addition, respondent's contention that petitioner has not exhausted his administrative remedies is without merit. After exhausting his administrative remedies in 1999, petitioner filed a second round of appeals. At the time of this opinion and order, petitioner is awaiting a response from the appeals administrator. Respondent urges dismissal on the ground that petitioner has not exhausted the second round of administrative remedies. This court disagrees. The BOP had an opportunity to review petitioner's request for reconsideration of his Section 3621(e) disqualification in 1999. A prisoner need not exhaust administrative remedies twice.
CONCLUSION
For these reasons, petitioner's petition for writ of habeas corpus (Doc. #1) is GRANTED and it is ORDERED that the BOP grant a reduction of one year from petitioner's sentence.
IT IS SO ORDERED.