                                                           F I L E D
                                                     United States Court of Appeals
                                                             Tenth Circuit
                 UNITED STATES COURT OF APPEALS
                                                            JAN 17 2003
                        FOR THE TENTH CIRCUIT
                                                       PATRICK FISHER
                                                                 Clerk


MICHAEL CLARK,

           Plaintiff - Appellant,

v.

NEW MEXICO DEPARTMENT OF
CORRECTIONS; ROBERT PERRY,
Secretary of the New Mexico
Corrections Department; JOHN
SHANKS, Director, New Mexico
Corrections Department; FRANK
MARCELL, Administrator, Security
Threat Group, New Mexico
Corrections Department; JEFF                   No. 02-2042
SERNA, Administrator, Corrections     D.C. No. CIV-01-1191-WJ/LCS
Compact or Chief of Classification,         (D. New Mexico)
New Mexico Corrections Department;
DONNA MARTINEZ, Administrator,
Corrections Compact or Chief of
Classification, New Mexico
Corrections Department;
LAWRENCE TAFOYA, Warden,
Southern New Mexico Correctional
Facility; JIM MOORE, Lt., Southern
New Mexico Correctional Facility;
TIM LEMASTER, Warden,
Penitentiary of New Mexico; DAVID
TRUJILLO, Associate Warden
Program Director, Penitentiary of
New Mexico; WILL JARAMILLO,
Major, Security Threat Group,
Penitentiary of New Mexico; JAMES
VAN LOAN, Caseworker,
Penitentiary of New Mexico;
EDWARD CHAVEZ, Classification
Officer, Penitentiary of New Mexico;
C.B. SENNA, Caseworker,
Penitentiary of New Mexico,

               Defendants - Appellees.


                            ORDER AND JUDGMENT           *




Before KELLY , BALDOCK , and LUCERO , Circuit Judges.



       After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination of

this appeal.   See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

       Michael Clark, appearing pro se, appeals from the entry of judgment and

dismissal of all but one of his thirty-two federal civil-rights and supplemental

state-law claims pursuant to 28 U.S.C. § 1915(e)(2) and Federal Rule of Civil

Procedure 12(b)(6). He also appeals from the court’s order removing his case

from under seal. The district court entered final judgment as to the dismissed




*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

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claims under Federal Rule of Civil Procedure 54(b), thus our jurisdiction arises

under 28 U.S.C. § 1291. We affirm in part and reverse in part.

       The district court fully summarized Mr. Clark’s allegations in its January

23, 2002 order, and we need not repeat them. Mr. Clark raises several issues on

appeal. He claims that the district court erred by (1) erroneously applying

New Mexico law to his state-law “contract” claims; (2) dismissing his state-law

claims for failure to state a claim; (3) dismissing his federal civil-rights claims;

and (4) unsealing his court file. We review de novo the district court’s decision

to dismiss a complaint under § 1915(e)(2) or to grant judgment pursuant to

Rule 12(b)(6) for failure to state a claim.    Curley v. Perry , 246 F.3d 1278, 1281

(10th Cir.), cert. denied , 122 S. Ct. 274 (2001). We review the decision to unseal

the file for abuse of discretion.   Cf. United States v. McVeigh , 119 F.3d 806, 811

(10th Cir. 1997).

       The district court dismissed with prejudice twenty-two claims against

New Mexico officials that alleged breach of California statutes and breach of

the contract between New Mexico and California for the implementation of the

Interstate Corrections Compact adopted by both states [hereinafter “the

compact”]. See N.M. Stat. Ann. § 31-5-17; Cal. Penal Code § 11189;        and see

R. Doc. 9, Ex. 1 (copy of the New Mexico/California contract implementing the

Interstate Corrections Compact, attached to Clark’s complaint). Apparently


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because Clark’s state-law breach-of-contract claims cited only California statutes

codifying the Compact in the heading above each claim, the court held that

California statutes have no extraterritorial effect governing the conduct of

New Mexico residents, and that all state-law claims for violations of California

statutes by New Mexico corrections officials should be dismissed with prejudice.

R. Doc. 13, at 3. Citing   Haines v. Kerner , 404 U.S. 519, 520-21 (1972), and

Curley , 246 F.3d at 1283-84, Clark argues on appeal that, because he attached the

contract demonstrating that he also relied on New Mexico law, the district court

should have liberally construed his petition and allowed him to amend his

complaint so that he could have cited the correct provisions of New Mexico law.

Even if Clark is correct, however, we conclude that the district court properly

dismissed the claims.

       At most, Clark seeks a declaration holding that New Mexico officials failed

to conform their conduct to requirements encompassed only in state law. “[T]he

Compact’s procedures are a purely local concern and there is no federal interest

absent some constitutional violation in the treatment of these prisoners.”     Ghana

v. Pearce , 159 F.3d 1206, 1208 (9th Cir. 1998);     Stewart v. McManus , 924 F.2d

138, 142 (8th Cir. 1991) (accord). The Eleventh Amendment provides absolute

immunity in federal court to state officials for suits alleging breach of contract

under state law.   See Pennhurst State Sch. & Hosp. v. Halderman       , 465 U.S. 89,


                                            -4-
106 (1984) (stating that there is no “greater intrusion on state sovereignty than

when a federal court instructs state officials on how to conform their conduct to

state law”). Even though Clark apparently tried to avoid the Eleventh

Amendment bar by suing the officials in their individual capacities, we conclude

that the states are the real, substantial parties in interest on the breach of contract

claims alleged.   1
                      The court properly dismissed the claims, but they should have

been dismissed without prejudice. We therefore remand for entry of an order

dismissing the contract claims without prejudice.

      Clark argues that the district court erred in dismissing his claim alleging

that New Mexico defendants unlawfully took a percentage of his wages in

violation of the Due Process and Takings Clauses. He claims that, because he had

no New Mexico victims and no restitution was required by his California

conviction, the New Mexico Crime Victims Reparations Act does not apply to

him. We agree with the district court’s analysis of this claim. We add that the

California/New Mexico compact also specifically provides that, when a

transferred prisoner earns compensation in the receiving state, compensation

“shall be paid to the inmates of the sending state on the same basis as to inmates

[of] the receiving state.” R. Doc. 9, Ex. 1 ¶ 17(a).


1
      We express no opinion on the viability of a breach of contract claim based
on an Interstate Compact by a prisoner claiming right to sue as a third-party
beneficiary.

                                            -5-
       For substantially the same reasons cited by the district court, we conclude

that the court properly dismissed the remainder of Clark’s claims.

       Finally, we address Clark’s concerns that his safety could be jeopardized by

the district court’s removal of his case from under seal. Clark moved to place his

case under seal so that his location and information about his cooperation as an

informant and in internal affairs investigations against prison staff and inmates

could not be discovered by known enemies. He supported the motion with proof

that he had been transferred to New Mexico because of threats against his life

after he defected from the Aryan Brotherhood. R. Doc. 3. The magistrate judge

ordered the case sealed without prejudice to consideration of motions to unseal

the file. Id. Doc. 4. No motions to unseal the file have been made.

       The district court, sua sponte , removed the seal from Clark’s files on its

finding that the remaining retaliation claim against Defendant Tafoya was

“unrelated to [Clark’s] earlier activities in California.”    Id. Doc. 13, at 8. The

court did not address Clark’s concerns about concealing information regarding his

transfers and continuing activity as an informant in New Mexico, however.

Further, the court unsealed the file before Defendant Tafoya’s       Martinez report

was filed. The report contains information that has the potential to seriously

jeopardize Clark’s and other inmates’ safety in any prison in the United States.

Because the court unsealed the file     sua sponte , before the court saw the   Martinez


                                              -6-
report, and without determining whether any unspecified right to access was

outweighed by Clark’s interests favoring nondisclosure of his location and

undercover activities,   see McVeigh , 119 F.3d at 811, we reverse the decision to

unseal the file.

       Clark’s motion to proceed on appeal         in forma pauperis is granted.

We remind Clark that he must continue making partial payments until the entire

fee has been paid.

       The judgment of the United States District Court for the District of

New Mexico is AFFIRMED IN PART AND REVERSED IN PART, and the case

is REMANDED for entry of judgment in conformity with this order and for

resealing of the file.


                                                           Entered for the Court



                                                           Paul J. Kelly, Jr.
                                                           Circuit Judge




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