Schneider

We are asked to decide whether the California Department of Corrections’ policy of withholding from prisoners the interest that is earned on their inmate trust accounts contravenes the Takings Clause of the Fifth Amendment.

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The appellants are inmates currently and formerly incarcerated at several California state prisons. For security reasons, inmates are not permitted under California law to possess money while in prison. See 15 C.C.R. § 3006(b). The California Department of Corrections (“State”) has therefore established two separate types of trust accounts into which prisoners may place personal funds during their incarceration. The first, an Inmate Passbook Savings Account (“IPSA”), is administered by Bank of America, and pays interest directly to the inmate. The second, an Inmate Trust Account (“ITA”), does’ not pay interest to the inmate. Each prisoner has the option of authorizing the State to establish and maintain an ITA on his behalf, but he is not required to do so. See 15 C.C.R. § 3075.1(d)(3) (“CDC Form 345”). There are, however, two obvious incentives to establish an ITA. First, in order to set up an IPSA interest-bearing account, an inmate is required to…