## Facts

- Dismas Charities, Inc., a nonprofit, operated community correction centers (CCCs) under contracts and subcontracts with the Federal Bureau of Prisons (BOP) to house federal inmates.
- For years, the BOP interpreted 18 U.S.C. § 3621(b) to allow placing inmates in CCCs either at the beginning of a sentence (“front-end”) or near the end (“back-end”).
- In December 2002, the Department of Justice Office of Legal Counsel issued a memorandum concluding § 3621(b) did not permit long-term CCC placement; instead, CCC placement was limited to the lesser of six months or 10% of the sentence under 18 U.S.C. § 3624(c).
- The BOP adopted a policy consistent with that memorandum, reducing the number of inmates eligible for CCC placement.
- Dismas alleged the policy change reduced its inmate population and revenues and sought declaratory and injunctive relief.
- The district court dismissed, concluding Dismas lacked prudential standing because it was outside the “zone of interests” protected by § 3621(b).

## Issues

1. Whether a CCC contractor’s economic injury places it within the zone of interests protected by 18 U.S.C. § 3621(b), permitting it to challenge the BOP’s revised interpretation.
2. Whether the BOP’s change in CCC-placement policy required notice-and-comment rulemaking under APA § 553, or was exempt as an interpretive rule or general policy statement.

## Decision

- The Sixth Circuit affirmed dismissal.
- Dismas lacked prudential standing to challenge the policy under § 3621(b) because its asserted injury was economic and not within that statute’s zone of interests.
- Dismas had standing to bring an APA procedural claim, but the claim failed as a matter of law because the BOP’s action was an interpretive rule or policy statement exempt from APA notice-and-comment requirements.

## Legal Principles

- Prudential standing requires that the plaintiff’s interests be arguably within the zone of interests protected or regulated by the statute invoked.
- A statute governing prisoner placement decisions (such as § 3621(b)) is directed to prisoner treatment and placement, not the economic interests of private contractors affected by those decisions.
- A party may have standing to assert an APA procedural injury even if it lacks standing under the substantive statute being interpreted.
- APA § 553 notice-and-comment does not apply to interpretive rules or general statements of policy; an agency’s revised interpretation of an existing statute may fall within this exemption when it does not create new binding obligations through delegated legislative authority.

## Conclusion

The court held that a CCC operator could not sue under § 3621(b) to contest the BOP’s revised CCC-placement interpretation because contractor economic interests are outside the statute’s zone of interests, and it further held that the policy change did not require APA notice-and-comment because it qualified as an interpretive rule or policy statement.


Dismas Charities, Inc. v. U.S. Dep’t of Just., Fed. Bureau of Prisons, 401 F.3d 666 (6th Cir. 2005)