Mario Reyes v. Robert Fishel ( 2021 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 19-1082 & 19-1084
MARIO REYES,
Plaintiff-Appellant,
v.
ROBERT FISHEL, et al.,
Defendants-Appellees.
____________________
Appeals from the United States District Court for the
Central District of Illinois.
Nos. 17-cv-3192 and 18-cv-3134 — Colin S. Bruce, Judge.
____________________
ARGUED MARCH 30, 2021 — DECIDED APRIL 29, 2021
____________________
Before KANNE, BRENNAN, and SCUDDER, Circuit Judges.
KANNE, Circuit Judge. Under the Prison Litigation Reform
Act (“PLRA”), prisoners filing petitions to proceed in a suit in
forma pauperis (“IFP”) can’t deliberately misrepresent their fi-
nancial status. If a prisoner does so, the case must be dis-
missed.
Mario Reyes, a prisoner in the Illinois Department of Cor-
rections, filed a § 1983 action in 2017 and another in 2018 in
2 Nos. 19-1082 & 19-1084
federal court and petitioned to proceed IFP in both cases. The
district court initially granted those IFP petitions but later dis-
missed both cases after the defendants presented evidence
showing that Reyes deliberately misled the court about his fi-
nances on his 2017 IFP application.
We affirm the dismissal of the 2017 case because the dis-
trict court did not clearly err in finding that Reyes was dishon-
est about his financial status. But as for the 2018 case, the court
did not give Reyes a chance to explain any potential issues
with his IFP application—and the defendants concede that he
should have been given that opportunity. We thus vacate the
order dismissing the second case and remand it for further
proceedings.
I. BACKGROUND
Mario Reyes is an inmate with the Illinois Department of
Corrections. In September 2017, Reyes filed a complaint in
federal court under 42 U.S.C. § 1983 along with an application
to proceed IFP. In the application, Reyes wrote that he was
“incarcerated, and receive[d] very minimal stipends in the
form of ‘money order’ and this stipend covers the basic neces-
sities and the cost of living for an inmate housed in IDOC.”
He did not state the amount of income that he received.
Reyes also attached to his IFP application a trust fund ac-
count ledger from Stateville Correctional Center dated June
14, 2017. The ledger reported transactions from January 15,
2017, to May 3, 2017. It showed that Reyes had received a total
of $120.00 from an individual during those four months and
that Reyes had $141.34 available to him as of June 14, 2017
(three months before he filed his lawsuit in September 2017).
Last, Reyes signed the application and thus declared that he
Nos. 19-1082 & 19-1084 3
was “unable to pay the costs of these proceedings” and was
“entitled to the relief requested.”
The district court granted Reyes’s petition, and the case
progressed over the next year. In December 2018, the state de-
fendants moved to dismiss the case under 28 U.S.C.
§ 1915(e)(2)(A), in part because Reyes did not disclose any in-
formation about his income in June, July, or August 2017. The
defendants attached records that filled in the gap. It turns out
that while Reyes was at Western Illinois Correctional Center
from June 2017 to September 2017, his account received trans-
fers and deposits totaling $1,692.10, the majority of which
came in the form of multiple gifts from two individuals.
Moreover, during that same time period, Reyes spent $785.89
at the commissary—$564.08 in one day—purchasing a televi-
sion, ear buds, Reebok basketball shoes, and boots, among
other items.
On December 28, 2018, the district court granted the de-
fendants’ motion and dismissed the 2017 case with prejudice.
It found that Reyes “was not honest with the Court regarding
his ability to pay the filing fee” and had “committed a fraud
upon the Court.”
Meanwhile, Reyes filed a second federal complaint and
petition to proceed IFP in June 2018 (while the 2017 case was
still progressing). In his second IFP application, Reyes indi-
cated that he had received no income from any sources in the
twelve preceding months, and he did not attach a trust fund
account ledger. The district court clerk, however, sent a letter
to Western requesting six months of records from Reyes’s
trust account, which showed that Reyes had received $26.32
between January 9, 2018, and May 17, 2018.
4 Nos. 19-1082 & 19-1084
The district court granted Reyes’s petition to proceed IFP,
assessed an initial partial filing fee, and ordered Reyes to pay
the full filing fee in installments pursuant to § 1915(b). It di-
rected “[t]he agency having custody of [Reyes]” to forward
the initial partial filing fee and subsequent payments to the
Clerk of Court. In November 2018, the initial partial filing fee
had not yet been paid, and the district court warned Reyes
that failure to pay within thirty days would result in the dis-
missal of the case.
Reyes did not meet the deadline, and, on December 28,
2018 (the same day that the court granted the defendants’ mo-
tion to dismiss the 2017 case), the district court sua sponte dis-
missed the 2018 case. In a text order, the court explained that
it was dismissing the case because Reyes had failed to pay the
initial filing fee and for the same reason that it had dismissed
the 2017 case—Reyes had failed to accurately disclose his fi-
nancial situation.
Reyes appealed both orders of dismissal, and we consoli-
dated the appeals.
II. ANALYSIS
There are two standards of review at play in this case. “We
review a district court’s finding that a plaintiff lied on an IFP
application for clear error.” Robertson v. French, 949 F.3d 347,
351 (7th Cir. 2020) (citing Thomas v. Gen. Motors Acceptance
Corp., 288 F.3d 305, 308 (7th Cir. 2002)). “A finding of fact is
clearly erroneous only when the reviewing court is left with
the definite and firm conviction that a mistake has been com-
mitted.” BRC Rubber & Plastics, Inc. v. Cont’l Carbon Co., 981
F.3d 618, 622 (7th Cir. 2020) (quoting Gaffney v. Riverboat Servs.
of Ind., Inc., 451 F.3d 424, 447 (7th Cir. 2006)). But we will only
Nos. 19-1082 & 19-1084 5
upset a district court’s decision to dismiss a case with preju-
dice if it was an abuse of discretion. Thomas, 288 F.3d at 308.
Under the PLRA, prisoners may proceed IFP if they
properly allege that they are unable to pay the fees in a law-
suit. 28 U.S.C. § 1915. Section 1915(a) of that Act requires that
a prisoner seeking to proceed without prepaying the fees in
full must “submit[] an affidavit that includes a statement of
all assets such prisoner possesses” and “a certified copy of the
trust fund account statement (or institutional equivalent) for
the prisoner for the 6-month period immediately preceding
the filing of the complaint.”
The statute then goes on to mandate that a district court
“shall dismiss the case at any time if the court determines
that … the allegation of poverty is untrue.” Id. § 1915(e)(2)(A).
An allegation of poverty is “untrue” if the prisoner’s state-
ments in an IFP form were “deliberate misrepresenta-
tion[s]”—“‘dishonest’ or ‘false’ rather than simply ‘inaccu-
rate.’” Robertson, 949 F.3d at 349, 351.
Here, the district court did not clearly err in finding that
Reyes was dishonest in his 2017 IFP application. It did err,
though, in making the same finding as to his 2018 application
without giving Reyes a chance to respond and in faulting
Reyes for the prison’s failure to forward the initial partial fil-
ing fee to the court.
A. The 2017 Case
The record supports the district court’s finding that Reyes
was dishonest about the state of his finances in his 2017 IFP
application: Reyes provided a trust fund account that failed
to cover the six-month period leading up to his court filing, as
required by statute. During the omitted months—June, July,
6 Nos. 19-1082 & 19-1084
August, and September 2017—Reyes received over $1,600
and spent over $700 in the commissary. On these facts, the
district court fairly concluded that Reyes was aware of this
income and chose not to disclose it to the court.
And Reyes failed to provide an adequate alternative ex-
planation for his omissions. On appeal, Reyes attached to his
brief a document titled “Plaintiff’s Reply to Defendant’s Mo-
tion to Dismiss and Take Judicial Notice” that appears to have
been stamped by Western as “scanned” and “e-mailed” on
December 7, 2018. But that document does not appear on the
district court’s docket and was not considered. Even if we as-
sume that this response was properly filed and should have
been considered, see Taylor v. Brown, 787 F.3d 851, 859 (7th Cir.
2015) (explaining that, under the “prison mailbox rule,” a
prisoner’s filing is deemed filed on the date that he submits it
for mailing), it would not make a difference in this case.
Under Robertson, a mere inaccuracy is not enough to show
that the prisoner’s allegation of poverty was untrue; it must
be a “deliberate misrepresentation.” 949 F.3d at 349. How-
ever, Reyes never demonstrated that the inaccuracies in his
IFP application were made unintentionally. Instead, he ar-
gued that his commissary expenditures were justified, ex-
plaining that he spent only what was necessary for living ex-
penses while in IDOC custody. But even if he is correct about
the necessity of his purchases (and we seriously doubt that
Reyes could not live without Reebok sneakers and a televi-
sion), Congress left that determination to the district court. See
Kennedy v. Huibregtse, 831 F.3d 441, 443 (7th Cir. 2016). As we
have previously explained, “[a]n applicant has to tell the
truth, then argue to the judge why seemingly adverse facts …
are not dispositive. A litigant can’t say, ‘I know how the judge
Nos. 19-1082 & 19-1084 7
should rule, so I’m entitled to conceal material information
from him.’” Id. We thus see no clear error in the district court’s
finding that Reyes deliberately misled the court through these
omissions.
In an attempt to rebut this conclusion, Reyes relies on the
statement in our nonprecedential case, Miller v. Hardy, that
“[t]he relevant inquiry is the state of the inmate’s finances at
the time of filing.” 497 F. App’x 618, 620 (7th Cir. 2012). But
we reiterate that the PLRA instructs prisoners to disclose to
the court all of their assets and trust fund account records for
the six months prior to filing suit. 28 U.S.C. § 1915(a). Section
1915(e)(2)(A) further mandates that “the court shall dismiss
the case at any time if the court determines that … the allega-
tion of poverty is untrue.” When making that determination,
it is well within a court’s discretion to consider the accounting
of the prisoner’s income and spending over the six months
prior to filing. Robertson, 949 F.3d at 350 (“[T]o ensure that this
snapshot of present assets is an accurate reflection of the pris-
oner’s financial situation, the PLRA calls for a six-month look-
back.”); see also Sultan v. Fenoglio, 775 F.3d 888, 891 (7th Cir.
2015) (explaining that a prisoner “intentionally depleting his
trust account to avoid paying his filing fee” would constitute
grounds for denying IFP status). The district court did not err
in doing so here.
The last question is whether the district court abused its
discretion by dismissing the case with prejudice. Dismissal
with prejudice is a permissible sanction where a prisoner has
made an untrue allegation of poverty. Kennedy, 831 F.3d at
443–44 (“[D]ismissal with prejudice may have been the only
feasible sanction for this perjury designed to defraud the gov-
ernment. Dismissal without prejudice would have been no
8 Nos. 19-1082 & 19-1084
sanction at all, unless perchance the statute of limitations had
run in the interim … . And a monetary sanction would prob-
ably be difficult to collect from a litigant assiduous in conceal-
ing assets.” (quoting Thomas, 288 F.3d at 306)). So it was not
an abuse of discretion for the district court here to dismiss the
2017 case with prejudice after finding that Reyes deliberately
misrepresented his financial condition to the court through
his omissions.
B. The 2018 Case
As for the 2018 case, the defendants side with Reyes and
ask us to vacate the district court’s order dismissing the case
and to remand the matter for further proceedings.
As a reminder, the district court dismissed the 2018 case
sua sponte after finding that Reyes failed to pay an initial par-
tial filing fee as ordered and for the same reason that it dis-
missed the 2017 case—Reyes was dishonest about his finan-
cial situation.
But we conclude that neither of those grounds supported
dismissal. First, Robertson clarifies that a prisoner’s responsi-
bility under § 1915 ends with his disclosure of his financial
situation; it is up to the prison to pay any filing fee according
to the court’s order. 949 F.3d at 353; see also Sultan, 775 F.3d at
890. It was thus error for the district court to penalize Reyes
for the prison’s failure to pay his partial filing fee.
Second, under Robertson, misstatements and omissions
must be intentional to support dismissal. 949 F.3d at 351–52.
But because the court dismissed the 2018 case sua sponte,
Reyes did not have a chance to offer—and thus the court did
not consider—explanations for why any errors in his 2018 IFP
application could have been unintentional.
Nos. 19-1082 & 19-1084 9
For these reasons, we remand the 2018 case to provide
Reyes with the opportunity to develop the record regarding
whether the omissions on his 2018 IFP application were delib-
erate.
III. CONCLUSION
We AFFIRM the district court’s order dismissing the 2017
case with prejudice, VACATE its order dismissing the 2018
case, and REMAND for further proceedings consistent with
this opinion.