Shauntae Robertson v. Glendal French ( 2020 )

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 17-3579
SHAUNTAE ROBERTSON,
Plaintiff-Appellant,
v.
GLENDAL FRENCH, LIEUTENANT, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court for the
Central District of Illinois.
No. 1:14-cv-01272-CSB — Colin S. Bruce, Judge.
____________________
ARGUED SEPTEMBER 10, 2019 — DECIDED FEBRUARY 4, 2020
____________________
Before WOOD, Chief Judge, and KANNE and BRENNAN, Cir-
cuit Judges.
WOOD, Chief Judge. Hoping to find an effective way to curb
frivolous lawsuits by prisoners, Congress enacted the Prison
Litigation Reform Act (“PLRA”) in 1996. Central to the law is
its requirement that a prisoner who cannot pay a federal
court’s filing fee at the time he files a case must pay the fee in
installments out of his future income.
2 No. 17-3579
The PLRA painstakingly spells out the procedure for as-
sessing and collecting those payments. When a prisoner who
believes that he is eligible to proceed in forma pauperis (IFP)
files his case, he must submit an affidavit to the court, 28
U.S.C. § 1915(a); his affidavit must provide a detailed account
of all his assets, along with a copy of his prison trust-fund ac-
count statement. Id. Through the affidavit and account state-
ment, the prisoner must be able to demonstrate that he does
not have sufficient assets to pay the court’s filing fee. Id.
§ 1915(a)(1). If the court is persuaded that the prisoner has
met this burden, it so certifies. At that point, the PLRA re-
quires the prison having custody over the prisoner to forward
20% of the income credited to the prisoner’s trust account to
the court each month (subject to a floor not pertinent here)
until the full amount of the filing fee has been paid. Id.
§ 1915(b)(2). If at any time the court discovers that the pris-
oner’s “allegation of poverty [was] untrue,” the court must
dismiss the case. Id. § 1915(e)(2)(A).
The case before us requires us to decide whether a pris-
oner must disclose an expectation of future income on an IFP
application, and if so, whether a failure to do so automatically
makes an allegation of poverty “untrue” for purposes of the
PLRA, or if instead only deliberate misrepresentations have
that effect. We conclude that the best reading of the statute
requires only disclosure of assets that may currently be used
to pay the filing fee, and in the alternative, even if expected
payments should have been included, the affidavit is “un-
true” only if the prisoner’s statement was a deliberate misrep-
resentation.
No. 17-3579 3
I
Shauntae Robertson is a state prisoner at the Pontiac Cor-
rectional Center in Pontiac, Illinois. While he was incarcerated
there, he alleges, the guards confined him in deplorable con-
ditions. He says that he was isolated in a filthy cell, which was
covered with urine and human feces and infested with insects
and mice. Robertson further contends that the guards refused
to give him his prescription medications and denied his re-
peated requests for supplies to clean the cell. After six days of
confinement, Robertson attempted suicide. He received med-
ical care and survived. Once he recovered, he brought an ac-
tion under 42 U.S.C. § 1983 against the guards who allegedly
had violated his constitutional rights.
Along with his complaint, Robertson submitted a motion
for leave to proceed IFP. He furnished a handwritten affidavit
in which he attested that he had no assets apart from $219.36
in his prison trust account and that he had no income apart
from an occasional allowance from his mother. Because the
filing fee at the time was $350, the court found that he was
indigent and granted his motion to proceed IFP. After several
years of pre-trial proceedings, the court denied the state’s mo-
tion for summary judgment and set a date for a jury trial.
Eleven days before trial, the state moved to dismiss the
case because it had just discovered that Robertson had not dis-
closed in his affidavit a $4,000 settlement agreement he had
reached with the state. This was not a failure to disclose actual
dollars; it was a failure to disclose the fact that the state had
agreed to a future payment of $4,000 to resolve four earlier
cases Robertson had filed. At the time Robertson filed his IFP
affidavit, the settlement agreement had been finalized, but he
had not yet received the money. It showed up in his prison
4 No. 17-3579
trust account some 12 months after he filed his IFP affidavit.
The state’s motion to dismiss came along three-and-a-half
years after the affidavit. Robertson had neither disclosed the
expectation of receiving that money, nor the actual receipt
when it happened.
For reasons that are unclear on this record, there were big-
ger problems with Robertson’s payments—problems not of
Robertson’s making. It seems that the prison neither sent
along the initial filing fee nor any of the required later pay-
ments. (That initial fee should probably have been 20% of the
$219 Robertson had, see § 1915(b)(1)(B), or approximately
$44.) According to the district court’s docket, once the court
granted Robertson’s IFP application, it entered the usual or-
der directing the prison to pay the initial filing fee out of the
income in Robertson’s trust account. The court directed the
court clerk to mail a copy of that order to the Trust Fund Of-
fice of the Pontiac Correctional Center. Somehow that does
not seem to have happened. In their motion to dismiss, the
defendants submitted a declaration from Kimberly Verdun,
an employee in the Trust Fund Office, who stated that she had
performed a “diligent search” but “could not locate find [sic]
any record that the Illinois Department of Corrections was
served with the Court’s July 14, 2014 Order.”
After the state brought the settlement to the court’s atten-
tion, the court dismissed Robertson’s case with prejudice. It
concluded that “[t]he failure of a prisoner proceeding IFP to
disclose subsequently received income has been viewed as a
fraud upon the court.”
No. 17-3579 5
II
This case presents several questions about a prisoner’s
duty to inform a court about assets he does not yet possess at
the time he files his application to proceed IFP. In addition,
we consider whether a prisoner has a continuing obligation to
update the court about income he later receives if that income
is deposited in his prison trust account. (We do not address
new income that is held outside the prison; that situation is
materially different, for purposes of the PLRA, from the one
in which the prison itself knows exactly how much money the
prisoner has in his trust fund at any given time. No one alleges
that Robertson had any such outside income or assets.)
A
As we noted, the PLRA requires a prisoner applying to
proceed IFP to disclose all his assets to the court. 28 U.S.C.
§ 1915(a)(1). To facilitate that process, all of the nation’s dis-
trict courts provide IFP application forms that are designed to
guide that disclosure. Because the PLRA stipulates that a
court must dismiss an IFP plaintiff’s case whenever it discov-
ers that the plaintiff’s claim of poverty was untrue, a misrep-
resentation on an IFP application form is enough to support
dismissal of the case.
Turning to our first question—whether income or assets
expected in the future must be disclosed—we begin by look-
ing at the language of the statute. There we find the present
tense: the prisoner must furnish “a statement of all assets such
prisoner possesses.” Id. § 1915(a)(1). In addition, to ensure
that this snapshot of present assets is an accurate reflection of
the prisoner’s financial situation, the PLRA calls for a six-
month look-back. The prisoner must submit a “certified copy
6 No. 17-3579
of the trust fund account statement (or institutional equiva-
lent) for the prisoner for the 6-month period immediately pre-
ceding the filing of the complaint.” Id. § 1915(a)(2). Although
one could imagine statutory language that also requires infor-
mation about anticipated future receipts, the PLRA is silent
on that point.
Bearing in mind the fact that many people filling out IFP
applications are unsophisticated, we think that this is a time
to stick with the literal language of the Act. Even though an
agreement to pay an amount in settlement of a case is a con-
tract, it is not the same as cash in hand. At the time he filled
out his initial affidavit, Robertson did not “possess” the $4,000
in any sense relevant for the PLRA. He could not use that
money to pay the court’s filing fee, because he did not yet
have it. And it is highly unrealistic to think that someone in
Robertson’s position could treat that contract the same way a
business might treat accounts receivable, which can serve as
collateral for a loan. As a practical matter, Robertson had no
ability to convert his settlement award into cash. The PLRA
requires the affidavit in order to establish whether the pris-
oner-plaintiff is able to pay the filing fee at the time he begins
litigation. Robertson had no ability to use his anticipated set-
tlement for that purpose, and so the award was not relevant
to whether he could proceed IFP.
Although neither party suggested that we look to other
laws for guidance, we note that such an inquiry reveals that
each statute takes its own approach to the treatment of income
that has yet to be received. Under the bankruptcy laws, for
instance, debtors are expressly required to disclose “any rea-
sonably anticipated increase in income … over the 12-month
period following the date of filing the petition.” 11 U.S.C.
No. 17-3579 7
§ 521(a). See also Official Form 106A/B, Schedule A/B: Prop-
erty (requesting disclosure of “money or property owed to
you”). In contrast, cash-basis taxpayers must include in their
reported gross income only “items of income you actually or
constructively received during the tax year,” I.R.S. Pub. 538
(Jan. 2019), and it defines constructive receipt to include only
income that “is credited to your account or made available to
you without restriction.” Id. The PLRA contains nothing like
the command in bankruptcy law to include future expected
income. Moreover, since it is designed to inform the court
both about the person’s indigence and about the proper
amount of the initial payment, it makes sense to look at actual
income.
If, contrary to our conclusion, the PLRA should be con-
strued to require the disclosure of future income, then Rob-
ertson erred by failing to disclose his anticipated $4,000 pay-
ment. But that would not be the end of the matter. We would
then need to decide whether his omission made his affidavit
of poverty “untrue” within the meaning of Sec-
tion 1915(e)(2)(A). The answer would depend on what the
word “untrue” means. It could cover only a deliberate lie, or
it might sweep in an inaccuracy that was the product of con-
fusion or misunderstanding. We review a district court’s find-
ing that a plaintiff lied on an IFP application for clear error.
Thomas v. General Motors Acceptance Corp., 288 F.3d 305, 308
(7th Cir. 2002).
The PLRA does not define the word “untrue,” but the fact
that the penalty for an “untrue” allegation of poverty is not
simply an order requiring full payment, but instead is dismis-
sal of the entire action, suggests to us that Congress meant
something like “dishonest” or “false,” rather than simply
8 No. 17-3579
“inaccurate.” We have so understood the term in the past. See,
e.g., Kennedy v. Huibregtse, 831 F.3d 441, 442 (7th Cir. 2016) (de-
liberate failure to disclose $1400 in trust account outside the
prison); Thomas, 288 F.3d at 306 (deliberate misrepresentation
about expected ERISA distribution); Mathis v. New York Life
Ins. Co., 133 F.3d 546, 547 (7th Cir. 1998) (knowing provision
of inaccurate information). Other circuits also understand it
this way. See, e.g., Nottingham v. Warden, Bill Clements Unit, 837
F.3d 438, 441 (5th Cir. 2016) (initial IFP application contained
misrepresentations); Romesburg v. Trickey, 908 F.2d 258, 259
(8th Cir. 1990) (intentional misrepresentation in affidavit). For
the sake of completeness, we examine whether Robertson’s
failure to disclose the expected payment was a deliberate at-
tempt to conceal relevant information from the court.
The record evidence indicates that Robertson was not try-
ing to conceal anything. First, he did not fill out the form him-
self; because (as he alleges) he can neither read nor write, he
relied on another prisoner to fill out his affidavit for him. This
prisoner apparently relied upon the short form IFP applica-
tion that the Central District of Illinois makes available. The
short form requires that the applicant list “[a]ny automobile,
real estate, stock, bond, security, trust, jewelry, art work, or
other financial instrument or thing of value that I own.” Rob-
ertson did not at that time have $4,000, and at the rate some
states pay their bills, he had no idea when he would ever see
it. There is no reason to assume that a prisoner of limited fi-
nancial literacy understands that assets he has not yet re-
ceived qualify as assets he “owns.” Additionally, in previous
IFP cases Robertson had filed, he used the short form and dis-
closed settlement funds he already had received. The fact that
Robertson had disclosed received settlement monies in the
past further suggests that he did not intentionally mislead the
No. 17-3579 9
court about his financial circumstances here. On the basis of
this record, we conclude that the district court clearly erred in
concluding that Robertson engaged in an intentional misrep-
resentation.
The state contends that Robertson must have known that
the settlement agreement was itself a “thing of value” and
thus that his failure to disclose it was a deliberate lie. But that
argument would be correct only if the PLRA follows the bank-
ruptcy model, rather than the cash-taxpayer model, and we
have concluded that it does not. Even under the bankruptcy
laws, a debtor who makes a good faith omission on her peti-
tion may turn her claim over to the bankruptcy trustee.
Metrou v. M.A. Mortenson Co., 781 F.3d 357 (7th Cir. 2015). The
state also faults Robertson for failing to use the long form IFP
application, which requires a plaintiff to identify “every per-
son, business, or organization owing you … money, and the
amount owed.” But the PLRA does not require the use of the
long form, and Robertson is not responsible for any discrep-
ancies between the short and long forms.
To recap, our primary conclusion is that the PLRA calls
only for disclosure of current income that can be used to de-
fray the filing costs. Any further income that is deposited in
the prison trust account will automatically be available to the
custodian for later installment payments under section
1915(b)(2), and so no evasion is possible. While a prisoner
may incur additional disclosure obligations by using some-
thing akin to the Central District’s long form IFP application,
the statute itself does not require the disclosure of future in-
come. In the alternative, we conclude that dismissal is proper
only if the prisoner deliberately misrepresents his assets. At
this juncture, it does not appear that Robertson did so.
10 No. 17-3579
B
If we are correct in holding that the PLRA does not require
immediate disclosure of expected future payments, we must
also reach the question whether it imposes a continuing obli-
gation on a prisoner proceeding IFP to update the court about
changes in his financial condition. As long as any such new
assets are deposited in the prisoner’s institutional trust ac-
count, we conclude that the act of deposit is enough disclo-
sure to satisfy the statute. Although we do not need to address
what might happen if the assets were held outside the institu-
tion, we freely acknowledge that this would present a materi-
ally different problem.
Here, the district court concluded that the “failure of a
prisoner proceeding IFP to disclose subsequently received in-
come has been viewed as a fraud upon the court.” The court
relied upon our decision in Thomas v. General Motors Ac-
ceptance Corp., supra, but that case is distinguishable. It did not
involve a prisoner, and it did involve a deliberate, material lie
on an IFP application. The IFP form Thomas used expressly
required him to disclose any assets he was expecting to re-
ceive. He failed to reveal that just nine days earlier he had di-
rected his former employer to distribute $73,714 to him from
his retirement account. 288 F.3 at 306. We have no quarrel with
that holding, but it sheds little light on the question whether
the deposit of new funds into a prison account can suffice to
prove disclosure.
The system established by the PLRA envisions that after
the prisoner-plaintiff’s initial IFP affidavit, the prison admin-
istrator will pay the filing fee in increments out of the pris-
oner’s trust fund. 28 U.S.C. § 1915(b)(2). These monthly pay-
ments are not the responsibility of the prisoner. The custodial
No. 17-3579 11
agency simply calculates the monthly payment due—20% of
any income received the previous month—and forwards pay-
ment to the appropriate clerk of court each time that amount
exceeds $10, until the full filing fee is paid. Id.
We grant that in Robertson’s case, this procedure broke
down. Though it is not clear whether the court or the prison
made the error, no one says that Robertson did. Indeed, the
Trust Fund Office at Pontiac never forwarded any payment to
the court, either initial or later, in clear violation of the statute.
If this lapse had not occurred, then the moment Robertson’s
$4,000 in settlement funds landed in his account, the Pontiac
authorities would have forwarded whatever remained of the
balance of Robertson’s filing fee—substantially less than the
$800 representing 20% of the new income—to the court. Rob-
ertson should not lose the right to pursue his case because of
someone else’s mistake.
The state insists that, despite the PLRA’s procedures, the
prisoner still bears the burden of ensuring payment of the fil-
ing fee. It relies primarily on our decision in Lucien v. DeTella,
141 F.3d 773 (7th Cir. 1998). In Lucien, a prison failed to remit
the monthly 20% of a prisoner’s income, and in the meantime,
the prisoner spent a good deal of the balance of his trust ac-
count. We held that, in light of his own role in depleting the
account, the prisoner had to pay all of his income to the court
until the filing fee was satisfied, even if the payments ex-
ceeded 20% of his monthly account balance. Id. at 776. We rea-
soned that he should have watched his account more carefully
and should have “refrain[ed] from spending the funds on per-
sonal items until they [could] be applied properly.” Id. But
Lucien concerned only continued liability for the fee, not the
right to litigate a case at all. Moreover, Lucien said nothing
12 No. 17-3579
about a prisoner’s duty to update the court when new income
is deposited into his prison account. It held only that he
should watch his expenditures when he is already liable for a
filing fee.
Nothing in this opinion abrogates our earlier decisions
holding that a court has the power to monitor a prisoner’s fi-
nancial situation in order to ensure that the prisoner does not
deplete his trust account in order to avoid paying the filing
fee. See Sultan v. Fenoglio, 775 F.3d 888, 891 (7th Cir. 2015)
(“Our view would be different if there were evidence that Sul-
tan was intentionally depleting his trust account to avoid pay-
ing his filing fee. If that were happening, the district court
would be entitled to deny in forma pauperis status.” (citation
omitted)). While a court may maintain this oversight role to
prevent a prisoner from evading his obligation to pay, the
prisoner’s obligation to disclose is satisfied once he makes a
truthful statement of his financial condition at the time of fil-
ing.
We stress again that we have no comment on any ongoing
duty to disclose assets received outside of his prison trust ac-
count—assets that are not automatically disclosed by virtue
of their deposit in the prison’s own account. See Kennedy v.
Huibregtse, supra (holding that dismissal under the PLRA was
appropriate when a prisoner failed to disclose that he held
$1400 in a trust account outside the prison). We address only
assets that are promptly placed in the inmate’s prison trust
fund.
III
The critical question under the PLRA is the prisoner-liti-
gant’s financial position at the time he files his complaint.
No. 17-3579 13
Robertson truthfully disclosed all funds to which he had ac-
cess at the time he filed his IFP application. Moreover, taking
the current record in the light most favorable to Robertson,
any failure to disclose the expected $4,000 was at best inad-
vertent, which is not enough to make it “untrue.” Finally,
with respect to funds that are deposited into the prison trust
account, we are satisfied that this deposit is, in itself, adequate
disclosure to the prison authorities of changes in the pris-
oner’s income. We thus conclude that the district court should
not have dismissed Robertson’s case for an “untrue” allega-
tion of poverty. We REVERSE the judgment of the district
court and REMAND this case for further proceedings con-
sistent with this opinion.