                              In the

United States Court of Appeals
                For the Seventh Circuit

No. 10-1490

S AMMIE L. B OOKER-E L,
                                                 Plaintiff-Appellant,
                                  v.

S UPERINTENDENT, INDIANA S TATE P RISON and
A LL A GENTS,
                                     Defendants-Appellees.


              Appeal from the United States District Court
       for the Northern District of Indiana, South Bend Division.
             No. 3:10-CV-017—Robert L. Miller, Jr., Judge.



    A RGUED N OVEMBER 29, 2011—D ECIDED F EBRUARY 9, 2012




 Before P OSNER and K ANNE, Circuit Judges, and P RATT,
District Judge.
  K ANNE, Circuit Judge. Sammie L. Booker-El, an inmate
incarcerated in Indiana State Prison, alleges that prison
officials misappropriated funds intended by statute to



  The Honorable Tanya W. Pratt, District Judge for the
Southern District of Indiana, sitting by designation.
2                                                   No. 10-1490

be used for the inmates’ benefit without due process of
law. The district court dismissed Booker-El’s complaint,
finding that he did not have a protected property
interest in the funds. We affirm.


                       I. B ACKGROUND
  As required by state law, Indiana State Prison main-
tains an inmates’ recreation fund. See Ind. Code § 4-24-6-
6(a)(3). The inmates’ recreation fund was designed to
accrue money from sources outside of the state budget,
such as profits from a prison commissary.1 Prison
officials are to then utilize this money for the inmates’
benefit by purchasing recreational items or using the
funds for a purpose not already covered under existing
state appropriations. Specifically, § 4-24-6-6 provides
that once money has accrued to the fund, it “shall be
used, at the discretion of the superintendent or warden . . .



1
  Section 4-24-6-7 provides that “[m]oney may accrue” to the
fund from the following sources: “(1) Gifts to the fund.
(2) Profits from the operation of a commissary or canteen.
(3) Interest earned by deposit of trust funds in public deposito-
ries, or income derived from trust funds invested in United
States government securities . . . . (4) Sale of items produced
in occupational therapy. (5) Income derived from any kind
of benefit entertainment for the inmates or patients.
(6) Any other money derived from any source that is not
legally prohibited. (7) Any money derived from the income
of any trust fund which has been deposited in any special
fund of the institution.”
No. 10-1490                                                    3

for the direct benefit of persons who are inmates or pa-
tients in such institutions, and shall not be used for
any purposes which are covered by state appropria-
tions.” Id. § 4-24-6-6(b). The statute then provides a non-
exhaustive list of acceptable expenditures for the fund.2
  Booker-El claims that for the past ten years, prison
officials have misappropriated proceeds from the fund.
These alleged misappropriations range from prison
officials diverting money in the fund for their own per-
sonal uses, to using the fund for purposes already
covered under existing state allocations—such as the
purchase of cameras and other devices enhancing
prison security.
  Accordingly, Booker-El filed a pro se prisoner com-
plaint pursuant to 42 U.S.C. § 1983 in the Northern
District of Indiana, suing the Superintendent charged
with managing operations of the Indiana State Prison
and his current and former employees. In his complaint,
Booker-El claimed that the prison officials’ misappro-
priation of the inmates’ recreation fund denied him of



2
  These possible expenditures include: “(1) purchased entertain-
ment; (2) magazine subscriptions for the libraries, wards,
or units of such institutions; (3) special recreational equipment
and supplies; (4) special foods for parties or celebrations;
(5) educational materials; (6) phonograph records, televisions,
radios, and similar items when the items cannot be pur-
chased from regular appropriations; and (7) any other pur-
poses not covered by regular appropriations.” Ind. Code § 4-24-
6-6(c).
4                                                 No. 10-1490

his property interest in the fund without due process
of law.
  On January 22, 2010, the district court screened and
dismissed the complaint pursuant to 28 U.S.C.
§ 1915A(b)(1) for failure to state a claim upon which
relief can be granted. The court held that Booker-El
did not have a statutorily protected property interest in
the inmates’ recreation fund and, consequently, there
was no basis on which it could review his claim.
The district court reasoned that because neither the Con-
stitution nor the laws of the United States mandated
that state penal facilities maintain an inmates’ recreation
fund or dictate how money in such funds be spent, Booker-
El could only state a claim if Indiana law provided
the inmates with a property interest in the fund. After
examining § 4-24-6-6, the court concluded that the
statute did not give inmates a property interest in the
fund, and thus dismissed the case. See Booker v. Superin-
tendent, No. 3:10-CV-017, 2010 WL 339093 (N.D. Ind.
Jan. 22, 2010). Booker-El now appeals.


                        II. A NALYSIS
  We review de novo the district court’s dismissal for
failure to state a claim under § 1915A, Maddox v. Love, 655
F.3d 709, 718 (7th Cir. 2011), and apply the same
standard used for evaluating dismissals under Rule
12(b)(6), Santiago v. Walls, 599 F.3d 749, 756 (7th Cir. 2010).
We must accept the facts alleged in the complaint as true
and draw all reasonable inferences in Booker-El’s favor.
No. 10-1490                                                 5

Rodriguez v. Plymouth Ambulance Serv., 577 F.3d 816, 820
(7th Cir. 2009).


A. Standing
  Although the district court did not specifically address
the matter, Booker-El wisely raises the issue of standing
in his opening brief. See Rhodes v. Johnson, 153 F.3d 785,
787 (7th Cir. 1998) (“[W]e hope that litigants will be
mindful of our obligation to satisfy ourselves of our
jurisdiction and when, in cases like this, standing is an
obvious issue, they will cite to the relevant parts of the
record to avoid wasting judicial time and resources.”); see
also Schirmer v. Nagode, 621 F.3d 581, 584 (7th Cir. 2010)
(“[W]e must consider this jurisdictional issue even
though the parties have not raised it.”).
  Article III of the Constitution confines the federal
courts to adjudicating actual “Cases” or “Controversies.”
U.S. Const. art. III, § 2, cl. 1. “[T]he requirements of
Article III case-or-controversy standing are threefold:
(1) an injury in-fact; (2) fairly traceable to the
defendant’s action; and (3) capable of being redressed by
a favorable decision from the court.” Parvati Corp. v. City
of Oak Forest, Ill., 630 F.3d 512, 516 (7th Cir. 2010) (citing
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).
  Here, the main issue for standing purposes is whether
Booker-El has suffered an injury in-fact. “[T]he in-
jury-in-fact requirement can be satisfied by a threat
of future harm or by an act which harms the plaintiff
only by increasing the risk of future harm that the
6                                               No. 10-1490

plaintiff would have otherwise faced, absent the defen-
dant’s actions.” Pisciotta v. Old Nat’l Bancorp, 499 F.3d
629, 634 (7th Cir. 2007). Momentarily assuming that § 4-24-
6-6 confers a property interest to the inmates, as alleged
in the complaint, Booker-El would have a high prob-
ability of receiving benefits under a properly ad-
ministered recreation fund. Because Booker-El would
face a substantial risk in losing benefits to which he was
entitled, misappropriation of these funds thus creates
a substantial risk of harm.
   The Indiana Attorney General, as amicus curiae in
support of the prison officials, argues that Booker-El
lacks standing because he has no property interest in the
inmates’ recreation fund. Without a property interest,
amicus curiae contends, Booker-El has no remedy in
federal court and thus no standing to bring a claim. But
this argument conflates standing with the merits of the
case. See Arreola v. Godinez, 546 F.3d 788, 794-95 (7th Cir.
2008) (“Although the two concepts unfortunately are
blurred at times, standing and entitlement to relief
are not the same thing. Standing is a prerequisite to
filing suit, while the underlying merits of a claim . . .
determine whether the plaintiff is entitled to relief.”); see
also Bond v. Utreras, 585 F.3d 1061, 1073 (7th Cir. 2009)
(“[W]hile a litigant need not definitively establish that
a right of his has been infringed, he must have a colorable
claim to such a right to satisfy Article III.”) (internal
quotation marks omitted). Booker-El has a colorable
claim to a property interest in the inmates’ recreation
fund. Were we to require more than a colorable claim,
we would decide the merits of the case before satisfying
ourselves of standing.
No. 10-1490                                                   7

B. Property Interest
  In order to state a claim for a procedural due process
violation of a property right, Booker-El must establish:
(1) a protected property interest; (2) a deprivation of
that property interest by someone acting under the color
of state law; and (3) a denial of due process. Tenny v.
Blagojevich, 659 F.3d 578, 581 (7th Cir. 2011). In any due
process case alleging a deprivation of property, “the
threshold question is whether a protected property
interest actually exists.” Cole v. Milwaukee Area Technical
Coll. Dist., 634 F.3d 901, 904 (7th Cir. 2011).
   “To claim a property interest protected by the
Fourteenth Amendment, a person must have more than
a unilateral expectation of the claimed interest. He
must, instead, have a legitimate claim of entitlement to
it.” Khan v. Bland, 630 F.3d 519, 527 (7th Cir. 2010) (internal
quotation marks and punctuation omitted) (quoting Bd.
of Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972)). A
legitimate claim of entitlement is “defined by existing
rules or understandings that stem from an independent
source such as state law.” Roth, 408 U.S. at 577; Tenny,
659 F.3d at 581. A protected property interest exists only
when the state’s discretion is “clearly limited such that
the plaintiff cannot be denied the interest unless specific
conditions are met.” Brown v. City of Michigan City, Ind.,
462 F.3d 720, 729 (7th Cir. 2006) (internal quotation marks
omitted).
  Booker-El argues that the district court erred in dis-
missing his complaint because Indiana state law creates
a protected interest in the inmates’ recreation fund.
8                                              No. 10-1490

He contends that § 4-24-6-6 imposes a mandatory obliga-
tion for prison officials to spend the fund for the benefit
of inmates. Specifically, Booker-El points to the direc-
tion that “[t]hese funds shall be used . . . for the direct
benefit of persons who are inmates” in § 4-24-6-6(b).
The word “shall,” absent some other clearly expressed
intent, is a mandatory term that does not confer discre-
tion upon an administrative decision maker interpreting
such language. See Lexecon, Inc. v. Milberg Weiss Bershad
Hynes & Lerach, 523 U.S. 26, 35 (1998) (“[T]he mandatory
‘shall’ . . . normally creates an obligation impervious to
judicial discretion.”). Because § 4-24-6-6 mandates
that the funds be spent for the benefit of the inmates,
Booker-El concludes, the discretion of prison officials
is sufficiently limited to create a protected property
interest. We disagree.
  The text of § 4-24-6-6 requires only that, if prison
officials in their discretion decide to utilize money from
the inmates’ recreation fund, then it must be spent for
the direct benefit of prisoners. What § 4-24-6-6 does not
impose, however, is any obligation for prison officials
to expend these funds within a given period of time.
Conceivably, prison officials could decline to use
money from the recreation fund indefinitely. Thus,
prison officials were under no obligation to ever use
the money in the inmates’ recreation fund for the benefit
of Booker-El or any other inmate in Indiana State Prison.
  Moreover, § 4-24-6-11 gives prison officials discretion
to transfer a recreation fund established by § 4-24-6-6
from one institution to another without consulting any
No. 10-1490                                                 9

inmate.3 Therefore, prison officials were free to transfer
the entirety of the inmates’ recreation fund at the Indiana
State Prison to another institution at any time without
notice. Given this discretion, Booker-El has no legitimate
expectation to any benefit derived from the inmates’
recreation fund, and thus no protected property interest.
  Booker-El also points to a decision by the United States
Court of Appeals for the Fifth Circuit in Eubanks v.
McCotter, 802 F.2d 790, 794 (5th Cir. 1986), to support his
argument that he has a property right in the inmates’
recreation fund. In Eubanks, a Texas prisoner claimed
that the state misappropriated the inmates’ property
interest in an “Education and Recreation Fund” without
affording due process. The Texas regulation provided
that the funds “are used to complement treatment pro-
grams for the inmates.” 37 Tex. Admin. Code § 61.26
(1989) (repealed 1994). The district court dismissed the
case as frivolous, but the Fifth Circuit held that the
claim was “not frivolous on its face” and reversed.
Eubanks, 802 F.2d at 794. But in so holding, the Fifth Cir-
cuit found only that the prisoner’s claims were “mini-
mally sufficient to require a decision on the merits,” and
expressly declined to address the merits of the prisoner’s
claim. Id. Thus, it is not clear how Eubanks supports


3
   Under § 4-24-6-11, prison officials “may transfer money
from the institution’s fund to one (1) or more other funds
established under section 6 of this chapter.” The only condi-
tion placed on these transferred funds is that “[t]he institu-
tion receiving the transferred money shall use the transferred
money in conformity with section 6 of this chapter.” Id.
10                                             No. 10-1490

Booker-El’s claim to a property interest; Eubanks held
only that the inmate in question was entitled to a decision
on the merits, and that is exactly what Booker-El received.


                    III. C ONCLUSION
  Because we find that Booker-El has no property
interest in the inmates’ recreation fund, we A FFIRM the
judgment of the district court.




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