                                    ___________

                                    No. 95-1960
                                    ___________


John K. Hake,                           *
                                        *
              Appellant,                *
                                        *
     v.                                 *
                                        *
Harold W. Clarke, Director,             *
Nebraska Department of                  *
Correctional Services; Karen            *
Shortridge, Associate, Director         *    Appeal from the United States
Adult Institutions, Nebraska            *    District Court for the
Department of Correctional              *    District of Nebraska.
Services; Terry Ewing, Security         *
Coordinator, Nebraska Department*           [PUBLISHED]
of Correctional Services; Larry         *
Tewes, Associate Director,              *
Adult Classification and                *
Programs, Nebraska Department           *
of Correctional Services,               *
                                        *
              Appellees.                *

                                    ___________

                     Submitted:     December 18, 1995

                           Filed:   August 2, 1996
                                    ___________

Before WOLLMAN, MAGILL, and HANSEN, Circuit Judges.
                               ___________

PER CURIAM.


     John K. Hake appeals from the district court's sua sponte dismissal,
under Federal Rule of Civil Procedure 12(b)(6), of his 42 U.S.C. § 1983
complaint.    We reverse and remand for further proceedings.


     In April 1994, Nebraska inmate Hake filed a civil rights complaint
in forma pauperis (IFP) against Nebraska Department of
Correctional Services Director Harold Clarke, Associate Director Karen
Shortridge, and the Director's Review Committee members Terry Ewing and
Larry Tewes (defendants), claiming he was unconstitutionally denied a
transfer from minimum security to community custody.             Hake alleged that,
after his parole was revoked for alcohol-related reasons in 1991, he was
returned to Hastings Correctional Center, and in 1992 he satisfied the
requirements for placement in community custody.          He alleged that the unit
classification committee members supported his reclassification to work
release, but that defendants denied him such an assignment without giving
him the opportunity to appear before them to rebut any adverse aspects of
the record.    Hake claimed defendants subjected him to cruel and unusual
punishment by punishing him for being an alcoholic, handicapped person;
denied him due process; relied on impermissible guidelines to deny him
community custody and work release; retaliated against him for exercising
his right of access to the courts; and denied him equal protection.                   Hake
sought    declaratory     relief,   and    damages.     Hake    attached    copies     of
correspondence from Shortridge explaining that he was denied community
custody   because   his    continued      alcohol   problem   posed   a   risk   to   the
community.    Hake paid the full filing fee in June 1994.


     Under the mistaken impression that Hake was proceeding IFP,                      the
magistrate judge reviewed the complaint under 28 U.S.C. § 1915(d) and the
district court's Local Rule 83.10,1 and concluded Hake failed to state a
claim upon which relief could be granted, but gave Hake leave to amend his
complaint to cure the deficiencies.           The magistrate judge also concluded
Hake's Eighth Amendment claim was frivolous.


     Hake amended his complaint, additionally noting that he had




        The magistrate judge noted that Local Rule 83.10(d)(2)
provided for initial sua sponte review of all pro se complaints
pursuant to Fed. R. Civ. P. 12(b)(6), whether they are fee-paid or
IFP.

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since been reclassified for work release, but that he continued to seek
monetary damages for the delay.   The magistrate judge reviewed the amended
complaint under Local Rule 83.10(d), and suggested in his report and
recommendation, inter alia, that Hake had failed to identify which portions
of the inmate handbook created a protected liberty interest.     Hake filed
objections and attached portions of the Adult Inmate Classification Manual
(Manual).   The district court dismissed the Eighth Amendment claim as
frivolous, and concluded the magistrate judge should reconsider his
recommended dismissal of the other claims under Rule 12(b)(6) in light of
the then-recently decided Carney v. Houston, 33 F.3d 893 (8th Cir. 1994)
(per curiam).


       Concluding on reconsideration that Hake's equal protection, due
process, and retaliation claims were not frivolous, the magistrate judge
ordered the issuance of summonses upon all defendants, but informed
defendants they were "not required to answer or otherwise respond unless
and until further notified to do so by order of this court upon completion
of its initial review of plaintiff's non-frivolous claims."   Simultaneously
with   the order for summonses, the magistrate judge issued a report
recommending that Hake had abandoned his equal protection and retaliation
claims, and that because Hake had not quoted the relevant language which
allegedly created a protected liberty interest, his due process claim
should be dismissed under Rule 12(b)(6).   Hake objected to the report.   The
summonses were issued approximately two weeks later.


       The district court waited until service of process had occurred
before ruling on the magistrate judge's report and Hake's objections.     The
district court conducted de novo review, noted that this now was no longer
a sua sponte dismissal prior to service because defendants had been served,
and concluded that Hake had failed to state an equal protection or
retaliation claim.   The court concluded, however, that Hake should be
granted leave to




                                    -3-
submit another amended complaint setting forth his due process claim and
should include specific quotations to the regulations or statutes which he
believed established a due process right to reclassification.


     Hake filed a second amended complaint which incorporated a copy of
the Manual.      The magistrate judge again recommended Hake's due process
claim be dismissed under Rule 12(b)(6), concluding that the Manual did not
create    a   protected   liberty   interest.   Hake   again   objected.   After
conducting de novo review, the district court adopted the magistrate
judge's report and dismissed the action under Rule 12(b)(6).          Hake filed
a timely notice of appeal.


     On appeal, Hake argues only that the district court erred in denying
his due process claim.2     Appellees, in what is their first involvement in
the case, argue that the Manual's provisions do not contain language which
satisfies the two elements necessary for the creation of a liberty interest
under Kentucky Department of Corrections v. Thompson, 490 U.S. 454, 464-65
(1989).


I.   Procedural Irregularities


     In Carney v. Houston, 33 F.3d at 895, we disapproved the district
court's practice of dismissing a complaint under Rule 12(b)(6) prior to
service of process, and pointed out that the district court's Local Rule
and procedures did not conform to the




     2
      Although Hake does not appeal the dismissal as frivolous of
his Eighth Amendment claim, we note that the district court erred
in conducting such a frivolousness review, because Hake had paid
the filing fee. See In re Funkhouser, 873 F.2d 1076, 1077 (8th
Cir. 1989) (per curiam) (dismissal of section 1915(d) complaint as
frivolous after payment of filing fee not contemplated by Federal
Rules of Procedure). The section 1915(d) dismissal, however, is
not a dismissal on the merits and would not prejudice the filing of
a paid complaint making the same allegations.        See Denton v.
Hernandez, 504 U.S. 25, 34 (1992).

                                        -4-
procedures for reviewing IFP complaints set forth in Gentile v. Missouri
Department     of   Corrections,       986    F.2d    214,      217    (8th     Cir.   1993).
Understanding that nonfrivolous claims could not be dismissed prior to
service of process under Rule 12(b)(6), the magistrate judge here ordered
the complaint to be served, and simultaneously recommended dismissal under
Rule 12(b)(6) before defendants filed any responsive pleadings.


        We   conclude   that    ordering      service      of    process      but   deferring
defendants' obligation to respond was not a procedure contemplated by the
Federal Rules of Civil Procedure or supported by case law.                  Implicit in the
requirement of service of process before dismissal under Rule 12(b)(6) was
that the parties, not the court, would litigate the issues, and that these
cases would proceed in the ordinary manner.                The Rules contemplated that
after    a   fee-paid   complaint     was    filed,   it   was    to   be     served   on   the
defendants; that defendants either answered or filed responsive pleadings,
giving notice to plaintiffs of any defenses or pleading deficiencies; and
that plaintiffs could then respond or seek leave to amend their pleadings,
which leave was to be freely given when justice required.                           The Rules
contemplated a litigant-directed process at the initial stages, but the
procedure at issue in this case interjected a review by a judicial officer
into the process.         Although plaintiffs may have been provided certain
"legal advice" which may have proved valuable in saving their actions from
ultimate dismissal, this judicial intervention placed the judicial officer
in the role of defense counsel, plaintiff's counsel, and judge, and
deprived     plaintiffs    of   the   "considerable        benefits    of     the   adversary
proceedings contemplated by the Federal Rules."                 Neitzke v. Williams, 490
U.S. 319, 330 (1989).           To order service of process but not require
defendants to respond ignored the spirit, and undermined the purpose, of
the service requirement.        Thus, we conclude that issuance of "no-answer"
summonses was improper, and that defendants should have been directed to
answer or file responsive pleadings in accordance with the Federal Rules.




                                             -5-
        Notwithstanding our admonition in Carney v. Houston, 33 F.3d at 895,
that Local Rule 83.10(d) authorized the magistrate judge to act in a manner
contrary to the Federal Rules, the district court continued to proceed
under it.    Neither Neitzke nor section 1915(d) authorized courts initially
to review claims filed by a fee-paying pro se litigant in the same way that
they reviewed IFP complaints.     We find no support for the district court
to have conducted a frivolousness review of non-IFP pro se complaints, or
to have conducted an initial review of all pro se complaints under Rule
12(b)(6) before service of process and responsive pleadings.3   Accordingly,
we conclude that the procedures set forth in Local Rule 83.10(d)(2) did not
comply with the Federal Rules nor with our circuit's precedents.


II.     Merits


        Since the district court's order, the Supreme Court decided Sandin
v. Conner, 115 S. Ct. 2293 (1995), which discussed the historical shift in
"focus of the liberty interest inquiry to one based on the language of a
particular regulation, and not the nature of the deprivation."        Id. at
2299.    The Court concluded that "[t]he time ha[d] come to return to the due
process principles" enunciated in those cases recognizing that States may
create liberty interests protected by the Due Process Clause, but generally
limiting those interests to freedom from restraint which imposed "atypical
and   significant hardship on the inmate in relation to the ordinary
incidents of prison life."     Id. at 2300.
        Although the due process right Hake asserts here is an alleged




     Effective April 26, 1996, courts have the authority to screen
a prisoner complaint to determine if the complaint is frivolous or
malicious, fails to state a claim upon which relief can be granted,
or seeks monetary relief from a defendant who is immune from such
relief. See Prison Litigation Reform Act, Pub. L. No. 104-134,
§ 805, 110 Stat. 1321, ____ (1996) (to be codified at 28 U.S.C.
§ 1915A).

                                     -6-
right to greater freedom, rather than protection from greater restraint,
we believe the same "nature of the interest" analysis is required, and the
Thompson test, on which the district court relied in determining whether
the State had created a liberty interest, may no longer be good law.   Thus,
we remand for further proceedings, including an analysis of Sandin in the
first instance by the district court.


     Accordingly, we reverse and remand this case to the district court
for further proceedings consistent with this opinion.


     A true copy.


           Attest:


                 CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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