                IN THE UNITED STATES COURT OF APPEALS
                         FOR THE FIFTH CIRCUIT     United States Court of Appeals
                                                            Fifth Circuit
                          ______________________
                                                                             FILED
                                     No. 04-10779                         November 8, 2007
                                ______________________
                                                                       Charles R. Fulbruge III
STEVEN M. GRIGGS                                                               Clerk
                                                         Plaintiff-Appellant

versus

UNITED STATES OF AMERICA, ET. AL.
                                                         Defendants-Appellees

                              ________________________

                   Appeal from the United States District Court
                        for the Northern District of Texas
                             USDC No. 4:04-CV-204A
                             ________________________

Before JOLLY, HIGGINBOTHAM, and DENNIS, Circuit Judges.

PER CURIAM:1

      Steven Griggs appeals the district court’s denial of his habeas petition under
28 U.S.C. § 2241. In denying the petition, the district court held that Griggs had
no protected liberty interest in his conditional release prior to the expiration of his
sentence under 18 U.S.C. § 3621(e). For the reasons below, we VACATE and
REMAND.
                                       Background
1. Statement of Facts


         1
            Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not
 be published and is not precedent except under the limited circumstances set forth in 5th Cir.
 R. 47.5.4.
                                                                                             1
      In 1994, Steven Griggs plead guilty to conspiracy to manufacture,
distribute, and possess 100 grams or more of methamphetamine, in violation of
21 U.S.C. §§ 841(a)(1), 846. He received a two-level enhancement at sentencing
because he possessed a firearm during the offense; his ultimate sentence was 292
months of imprisonment. In November of 1995, he agreed to participate in the 500
Hour Residential Drug Abuse Program (“DAP”) at the El Reno, Oklahoma Federal
Correctional Institution. He entered the residential phase on December 29, 1995.
      Four days later, on January 2, 1996, he was told he was ineligible for early
release under the DAP guidelines because his crime was considered a crime of
violence under 18 U.S.C. § 924(c)(3) and Program Statements 5162.02 and
5330.10. After completing the residential phase in January of 1997, Griggs filed
a Request for Administrative Remedy seeking a one-year sentence reduction
under 18 U.S.C. § 3621(e)(2)(B). The Bureau of Prisons (“BOP”) denied the request
on the ground that his drug conviction with a sentence enhancement for
possession of a firearm, constituted a crime of violence, rendering him ineligible
for early release. Griggs’s administrative appeals were unavailing.
      In January of 1998, Griggs filed a § 1983 suit in the United States District
Court for the District of Columbia, challenging the BOP’s ineligibility
determination. The case was transferred to the United States District Court for
the Western District of Oklahoma, as Griggs was then incarcerated at the Federal
Transfer Center in Oklahoma City. In December of that year, the Oklahoma
federal court dismissed his suit for failure to state: 1) a § 1983 claim because
defendants were not state officials; 2) a claim for compensatory damages because
defendants were entitled to sovereign immunity; and 3) a due process claim
because he had no protected liberty interest in his sentence reduction. The district
court construed his request for injunctive or declaratory relief as a 28 U.S.C. §
2241 petition. The Oklahoma federal court adopted the Magistrate’s Report and
Recommendation, which concluded that Griggs “is entitled to be considered for a
                                                                                  2
§ 3621 sentence reduction . . .” The Oklahoma court then “directed [the BOP] to
consider . . . whether Plaintiff should receive a sentence reduction under 18 U.S.C.
§ 3621 for his successful completion of the drug treatment program without
reliance upon sentencing factors.” In January of 1999, the Government filed a
response indicating that in October, 1998, prior to the Oklahoma court’s judgment,
“[p]laintiff’s eligibility for early release pursuant to 18 U.S.C. § 3621(e) was
reviewed and granted on October 20, 1998. Plaintiff’s projected satisfaction date
has been recalculated. . . .” (emphasis in the original).
      By September of 2001, Griggs had been transferred to the Federal Medical
Center in Fort Worth, Texas. At that time, he filed a motion in the Oklahoma
district court seeking to compel the BOP to perform its duty. According to Griggs,
after his transfer the BOP rescinded his eligibility for a sentence reduction. He
alleged that the BOP’s decision violated a constitutionally-protected liberty
interest in his early release, created at the time the BOP determined that he was
eligible under § 3621(e). The BOP, on the other hand, explained that its decision
to rescind was based on a recent United States Supreme Court decision upholding
the validity of the 1997 version of the regulations that permitted the BOP within
its statutory discretion to consider sentencing factors. See Lopez v. Davis, 531 U.S.
230, 235 (2001).
      Ruling on Griggs’ motion to compel, the Oklahoma federal court held that
no liberty interest in a sentence reduction had been created, and that Griggs could
not establish a violation of due process. In addition, the Oklahoma federal court
determined that the BOP’s decision did not constitute retroactive application of
a new BOP policy because the BOP had always maintained that offenders with
sentence enhancements for possession of a firearm at the time of the offense were
ineligible for § 3621(e) early release. On appeal, the Tenth Circuit construed
Griggs’ motion to compel as a § 2241 petition and determined that the Oklahoma

                                                                                   3
federal court lacked jurisdiction since Griggs was confined in Texas. The Tenth
Circuit took a “quick look” at the merits of Griggs’ claims, and “conclude[d] that
plaintiff's claims have sufficient merit to warrant a transfer to the Northern
District of Texas.” Griggs, 79 F. App’x at 363.
      Accordingly, the Tenth Circuit vacated the second Oklahoma federal court
judgment on the motion to compel and remanded the case with instructions to
transfer the case to the United States District Court for the Northern District of
Texas. The Texas district court adopted the reasoning of the Oklahoma district
court and denied the petition. Griggs timely appeals.
2. Conditional Release under 18 U.S.C. § 3621(e)
      As incentive for inmate participation in substance abuse treatment
programs, 18 U.S.C. § 3621(e)(2)(B) provides that prisoners convicted of
“nonviolent offenses who complete [such a program] may apply for a sentence
reduction of up to one year; the determination lies in the discretion of the director
of the Bureau of Prisons (“BOP”).” In May of 1995, the BOP promulgated 28 C.F.R.
§ 550.58, which defines “nonviolent offense” by excluding those offenders convicted
of offenses that meet the definition of “crime of violence” in 18 U.S.C. 924(c)(4). See
Warren v. Miles, 230 F.3d 688, 691 (5th Cir. 2000). In July of 1995, the BOP
issued Program Statement 5162.02, which defines “crime of violence” within the
context of § 3621. Id. BOP’s Change Notice CN-01 to Program Statement 5162.02,
clarified the definition of “crime of violence” by listing examples of ineligible
inmates and included inmates serving a sentence for drug conspiracy enhanced
for possession of a firearm, like Griggs. Id. at 691-92.
      We have held that, under the 1995 version of § 550.58, the BOP’s “exclusion
of . . . drug convictions with enhanced sentences due to possession of a weapon
from eligibility for early release after substance abuse treatment is consistent
with the letter and spirit of the [BOP]’s authority as derived from [§ 3621(e)].”

                                                                                     4
Venegas v. Henman, 126 F.3d 760, 761-62 (5th Cir. 1997). The Tenth Circuit,
however, takes a different approach. Faced with the same question in 1998, that
Circuit held that the language of the statute “does not permit resort to sentencing
factors or sentencing enhancements attached to the nonviolent offense[]” and that
the BOP’s construction of the 1995 version of the regulations was therefore
impermissible. Fristoe, 144 F.3d at 631. In essence, the 1995 regulations would
not apply in the Tenth Circuit, thus rendering inmates, like Griggs, eligible for
a sentence reduction; the regulations, however, would apply within the Fifth
Circuit rendering inmates, like Griggs, ineligible.
      The BOP published a new § 550.58 in 1997. While the new version of the
regulation still excluded offenders in possession of a firearm during the offense,
the 1997 regulation did not do so by defining “prisoner convicted of a nonviolent
offense” or “crimes of violence.” Lopez, 531 U.S. at 235. “Instead, the [1997]
regulation relie[d] upon ‘the discretion allotted to the Director of the Bureau of
Prisons in granting a sentence reduction to exclude [enumerated categories of]
inmates.’” Id. (quoting Drug Abuse Treatment and Intensive Confinement Center
Programs: Early Release Consideration, 62 Fed. Reg. 53,690 (Oct. 15, 1997)). In
2001, the Supreme Court upheld the validity of the 1997 version of § 550.58. See
Lopez, 551 U.S. at 244.
      According to the BOP’s Operations Memorandum,2 an inmate who
successfully completes the residential phase of a DAP in a Tenth Circuit
Institution remains eligible for his sentence reduction even if he is later
transferred out of the Tenth Circuit. The Memorandum states, however, that in



       2
        The Operations Memorandum states:
       To maintain eligibility upon transfer out of the Tenth Circuit, an inmate whose
       offense includes sentence enhancement factors must have completed the
       residential drug treatment program on or after April 28, 1998 [i.e., the date the
       Tenth Circuit issued its decision in Fristoe], in a Tenth Circuit institution.
                                                                                           5
order to maintain that eligibility “an inmate whose offense includes sentence
enhancement factors must have completed the residential drug treatment
program on or after April 28, 1998 in a Tenth Circuit institution.”                  Griggs
completed the residential program before April 28, 1998.
                                         Analysis
      On appeal,3 Griggs argues 1) that the BOP violated his due process rights
by retroactively applying a more restrictive version of 28 C.F.R. § 550.58, i.e., the
1997 regulations, in deciding to rescind the early release; 2) that his due process
rights were violated when the BOP rescinded the § 3621(e) sentence reduction
without any written notification or opportunity to be heard and 3) his rights to the
sentence reduction should be preserved as res judicata and/or collateral estoppel.
      The Government responds with several arguments: 1) the conditions of the
Operations Memorandum are not fulfilled, so Griggs did not maintain his
eligibility when he was transferred from the Tenth to the Fifth Circuit; 2) the BOP
official who denied Griggs eligibility erroneously relied solely on Lopez, but should
have relied on the Fifth Circuit’s opinion in Venegas, which upheld the BOP’s
1995 regulations; 3) even if the denial was based on Lopez, the BOP has always
maintained that felons like Griggs are ineligible, and therefore the 1997
regulation as applied to Griggs was no more restrictive than policies in existence
when it granted Griggs eligibility; and 4) res judicata is not applicable to
successive federal habeas petitions.
      We agree with Griggs that res judicata bars the BOP from raising any
arguments that Griggs must now be determined ineligible based on sentencing




        3
        Griggs satisfied administrative exhaustion requirements. See Griggs v. United States,
 2004 WL 1084816 *1 & n.2 (N.D. Tex. May 13, 2004) (unpublished).
                                                                                           6
factors.4 Since the BOP’s asserted bases below and on appeal for rescinding
Griggs’ eligibility rely on the applicability of sentencing factors, we now reinstate
Griggs’ eligibility and order the BOP to comply with the previous court order and
determine “whether Plaintiff should receive a sentence reduction under 18 U.S.C.
§ 3621 for his successful completion of the drug treatment program without
reliance upon sentencing factors.”
1. Standard of Review
      We review issues of law related to a denial of habeas relief under § 2241 de
novo. Royal v. Tombone, 141 F.3d 596, 599 (5th Cir. 1998). We also review pro se
briefs liberally. Johnson v. Quarterman, 479 F.3d 358, 359 (5th Cir. 2007) (citing
Haines v. Kerner, 404 U.S. 519, 520 (1972)).
2. Res judicata Demands BOP Determine Griggs’ Eligibility for a Sentence
Reduction Without Considering Sentencing Factors
      The dispositive question in this appeal is whether the BOP can consider
sentencing factors, such as the possession of a firearm during the commission of
the crime, in determining Griggs’ eligibility for a sentence reduction under 18


        4
            We may apply res judicata sua sponte. See Russell v. SunAmerica Sec., Inc., 962 F.2d
 1169, 1172 (5th Cir. 1992) (res judicata may be raised sua sponte because the court may not
 ignore the legal effect of uncontroverted facts or decline to consider application of controlling
 rules of law to dispositive facts). Moreover, in the pleadings below, the Government interprets
 Griggs’ argument as raising res judicata and collateral estoppel issues, and presents a
 counterargument that the “law of the case” should be the applicable doctrine. The Government
 states in the record below:
         Plaintiff argues he has been eligible for early release for nearly three years, and
         the Bureau of Prisons cannot now, on a whim, take away that vested interest,
         essentially arguing the principle of res judicata or issue preclusion. Defendant
         counters that the “law of the case” doctrine, and not issue preclusion, is
         applicable to this case.
 Defendant’s Response to Plaintiff’s Motion to Compel An Officer Or Agency Of the United States
 To Perform Its Duty, R. 391, 393-94 (Sept. 21, 2001). We agree with Griggs. Griggs’ claims
 below and on appeal are arguments based on the principles of res judicata to enforce a previous
 judgment and compel the satisfaction of that judgment. See “Motion To Compel An Officer or
 Agency Of The United States to Perform Its Duty.” R. at 376. Construed liberally, Griggs’
 motion requests a federal court to enforce the previous order and grant of habeas relief.
                                                                                                7
U.S.C. § 3621. This exact issue was already litigated between the parties. In the
original action before the Oklahoma district court, the district court considered
arguments from both Griggs and the BOP concerning the use of sentencing factors
in determining Griggs’ eligibility for a sentence reduction. See Defendant’s Motion
to Dismiss and Brief to Support, at R. 126-27 (May 26, 1998).
      The district court granted Griggs habeas relief and fully adopted the
Magistrate’s Report and Recommendation, which rejected BOP’s use of sentencing
factors to determine Griggs’ eligibility and concluded, as a matter of law, that
Griggs “is entitled to be considered for a §3621 sentence reduction . . . .” R. at 344.
To implement this decision, the district court granted habeas relief “to the extent
that the Bureau of Prisons is directed to consider . . . without reliance on
sentencing factors, whether plaintiff should receive a sentence reduction under 18
U.S.C. §3621.” R. at 364a. The BOP never appealed the district court’s adoption
of the Magistrate’s Report and Recommendation nor the order granting habeas
relief; therefore the report and order are final judgments with res judicata effect.
Royal Ins. Co. of Am. v. Quinn-L Capital Corp., 960 F.2d 1286, 1293 (5th Cir.
1992). We must now give full res judicata effect to this original final judgment.
United States v. Davenport, 484 F.3d 321, 327 n.10 (5th Cir. 2007).
      “Res judicata is appropriate if (1) the parties are identical or in
      privity; (2) the judgment in the prior action was rendered by a court
      of competent jurisdiction; (3) the prior action was concluded to a final
      judgment on the merits; and (4) the same claim or cause of action was
      involved in both suits. . . . If these conditions are satisfied res judicata
      prohibits either party from raising any claim or defense in the later
      action that was or could have been raised in support of or in
      opposition to the cause of action asserted in the prior action.”

Matter of Swate, 99 F.3d 1282, 1286 (5th Cir. 1996). The conditions for res
judicata are fulfilled here. The parties are identical; the Oklahoma district court
had competent jurisdiction over the original action; the prior action was concluded

                                                                                     8
to a final judgment (not appealed) on the merits; and the same cause of action is
asserted in both habeas petitions, i.e., whether determining Griggs’ eligibility
using sentencing factors is appropriate.5              Res judicata applies to any BOP
argument that use of sentencing factors is now appropriate in considering whether
to grant Griggs a sentence reduction.6

        5
          We read the Magistrate’s Report and Recommendation adopted by the district court
 as concluding that the use of sentencing factors in determining Griggs’ eligibility is not
 appropriate. “The effect of a decree, as an adjudication conclusive on the parties, is not
 determined by isolated passages in opinion, but by examination of issues made and intended
 to be submitted and decided.” State of Okla. v. State of Texas, 272 U.S. 21, 42-43 (1926).
        6
            The Government cites to Patrasso v. Nelson, 121 F.3d 297, 301 (7th Cir. 1997) to
 argue that res judicata categorically does not apply to federal habeas petitions. The
 Government misconstrues Patrasso because it is clear that Patrasso is discussing the res
 judicata effect of a state post-conviction judgment on a federal habeas petition. Id; Carter v.
 Estelle, 677 F.2d 427, 442 n.10 (5th Cir. 1982). Here, we are discussing the res judicata effect
 of a federal court decision on the same claim in a subsequent federal habeas action urging the
 court to enforce the previous decision.
         The Government is partially correct in that the res judicata doctrine applies differently
 in the habeas context; however, any differences are not applicable in this case. “Modified” res
 judicata applies in the habeas context. United States v. Orozco-Ramirez, 211 F.3d 862, 867-68
 (5th Cir. 2000); see also Schlup v. Delo, 513 U.S. 298, 319 (1995) (calling it a “qualified
 application of the doctrine of res judicata.”) In this “modified” form, res judicata does not fully
 apply in the habeas context when a previous court decision denies habeas relief. McCleskey v.
 Zant, 499 U.S. 467, 480-81 (1991); Sanders v. United States, 373 U.S. 1, 7 (1963) (“At common
 law, the denial by a court or judge of an application for habeas corpus was not res judicata.”).
         On the other hand, a judgment granting a petitioner habeas relief is res judicata on the
 issues of law and fact necessarily involved in the result. Collins v. Loisel, 262 U.S. 426, 430
 (1923); Anselmo v. Hardin, 253 F.2d 165, 169 (3d Cir. 1958); Harris v. Biszkowicz, 100 F.2d
 854, 856 (8th Cir. 1939); see also Younan v. Caruso, 59 Cal. Rptr. 2d 103, 109 (Cal. Ct. App.
 1996) (“While a final judgment granting habeas corpus relief is res judicata. . . . an order
 denying the writ is not.”) (internal citations omitted). An order granting habeas corpus, unlike
 a denial of habeas relief, is a “final judgment” and is res judicata on issues in subsequent
 habeas petitions, since the petitioner is now enforcing a final court order. Compare Patterson
 v. Haskins, 470 F.3d 645, 661 (6th Cir. 2006); In Re Moody, 817 F.2d 365, 368 (5th Cir. 1987)
 (“That further proceedings were necessary to enforce the judgment . . . . does not mitigate the
 effect of the order. A judgment becomes final despite the fact that it has not been executed. The
 finality of a decree is not impaired because some future order of the court may become
 necessary to carry it into effect.”), with Potts v. Zant, 638 F.2d 727, 738 (5th Cir. 1981) (“The
 doctrine of abuse of the writ has developed as a result of the familiar rule of law that a denial
 of an application for habeas corpus is not res judicata with respect to subsequent
 applications.”). The case-law permits the application of res judicata to successful habeas
 petitions as part and parcel of the power of this court to enforce a final judgment in subsequent
                                                                                                  9
      Since the BOP later rescinded Griggs’ eligibility based on sentencing factors
by citing to Lopez and Venegas, which are cases that upheld the BOP’s use of
sentencing factors in eligibility decisions, the BOP has failed to comply with the
binding effect of the previous judgment barring the use of sentencing factors. We
must now issue a remedy necessary to protect Griggs’ judgment in the original
district court decision. “Prevailing parties are entitled to the protection and fruits
of the judgments which become final.” Cliett v. Hammonds, 305 F.2d 565, 572 (5th
Cir. 1962).
      The intervening transfer of the case from the Tenth Circuit to the Fifth
Circuit does not affect the res judicata effect of the final Oklahoma court
judgment. See In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171,
1177 (D.C. Cir. 1987) (Ginsburg, D.H., J., concurring) (“[T]here are some
circumstances in which a federal court is bound to apply the decisions of another
circuit, but they are the rare instances where a preclusion doctrine so requires.
The doctrines of res judicata, collateral estoppel, and law of the case come to
mind.”); Skil Corp. v. Millers Falls Co., 541 F.2d 554, 558 (6th Cir. 1976) (applying
res judicata effect to decision from the Seventh Circuit). Morever, even if the
original basis for the Oklahoma district court decision was erroneous based on
changing intervening law, courts respect the finality of a previous judgment and
accord the judgment full res judicata effect. Fed. Dep’t Stores, Inc. v. Moitie, 452
U.S. 394, 398 (1981) (“Nor are the res judicata consequences of a final, unappealed
judgment on the merits altered by the fact that the judgment may have been
wrong or rested on a legal principle subsequently overruled in another case.”);



 proceedings, whereas unsuccessful habeas petitions are subject to the “abuse of the writ”
 doctrine empowering federal courts to control the potentially endless successive petitions
 attacking the conviction after an initial denial of habeas relief. Cf. In re Cain, 137 F.3d 234,
 235-36 & n.1 (5th Cir. 1998) (describing the federal court’s “gate-keeping” function under
 AEDPA and the “abuse of writ” doctrine).
                                                                                              10
RecoverEdge L.P. v. Pentecost, 44 F.3d 1284, 1296 (5th Cir. 1995) (“It is well
settled, however, that even arguably erroneous judgments have preclusive effect
if the requirements for collateral estoppel are satisfied.”) (citing numerous Circuit
cases for this proposition); Matter of Teal, 16 F.3d 619, 622 (5th Cir. 1994) (“This
conclusion comports with the well-known rule that a federal court may not
abrogate principles of res judicata out of equitable concerns . . . . Indeed, it must
give res judicata effect to a prior judgment even if it would be voidable on appeal
because of legal error.”); In re Atlas Sewing Centers, Inc., 437 F.2d 607, 614 (5th
Cir. 1971) (“[Res judicata] does not allow parties to await the event and then to
determine that a judgment acquiesced in earlier ought to have been challenged.”).
Therefore, even if the BOP may now challenge the basis for the district court
decision as arguably wrong under Fifth Circuit case-law or subsequent Supreme
Court decisions, the finality and binding effect of the decision is unaffected.
      The res judicata analysis also renders irrelevant the Government’s use of
the Operations Memorandum as a basis to bar Griggs from maintaining his
eligibility upon transfer outside of the Tenth Circuit.7                   The Operations



        7
           Moreover, the BOP concedes the agency decision to rescind Griggs’ eligibility was
 based solely (and erroneously) on Lopez. Reference to other reasons for the decision to rescind
 Griggs’ eligibility, including the Operations Memorandum, offered for the first time on appeal
 is a “post hoc rationalization” advanced by an agency seeking to defend past agency decision
 against attack. See Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69 (1962)
 (“The courts may not accept appellate counsel’s post hoc rationalizations for agency action;
 [SEC. v. Chenery Corp., 332 U.S. 194, 196 (1947)] requires that an agency’s discretionary order
 be upheld, if at all, on the same basis articulated in the order by the agency itself.”). In
 Chenery, the Court concluded that:
         [A] simple but fundamental rule of administrative law . . . is . . . that a
         reviewing court, in dealing with a determination or judgment which an
         administrative agency alone is authorized to make, must judge the propriety of
         such action solely by the grounds invoked by the agency. If those grounds are
         inadequate or improper, the court is powerless to affirm the administrative
         action . . . .
 Id. We can also reject the Operations Memorandum argument and other post-hoc
 rationalizations on this ground.
                                                                                             11
Memorandum is irrelevant to his appeal, because res judicata preserves his
eligibility after transfer. The Operations Memorandum offers Griggs a regulatory
route to “maintain” his eligibility, but Griggs does not need this regulatory
mechanism to maintain his eligibility. Res judicata provides an alternative and
sufficient mechanism that maintains his eligibility without the consideration of
sentencing factors.
      The Government’s cited reasons for rescinding Griggs’ eligibility are all
based on Griggs’ sentencing factors, which is a violation of the previous final court
order from the Oklahoma district court. Therefore, we now GRANT Griggs habeas
relief and REVERSE the Texas district court judgment and REMAND this case
to the Texas district court for it to enforce the previous final court order and
ensure the BOP determines “whether Plaintiff should receive a sentence reduction
under 18 U.S.C. § 3621 for his successful completion of the drug treatment
program without reliance upon sentencing factors” consistent with this opinion
and within a reasonable time period.




                                                                                  12
