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No. 96-344
IN THE SUPREME COURT OF THE STATE OF MONTANA
1997
DANIEL OROZCO,
Plaintiff and Appellant,
v.
RICK DAY, Director off the Department of
Corrections and Human Services, MIKE
MAHONEY, Section Warden, MYRON BEESON,
Section Warden, CANDYCE NEUBAUER,
Classification Manager, DAVE LANNING,
Unit Manager, MONTANA DEPARTMENT OF
CORRECTIONS AND HUMAN SERVICES, MONTANA
STATE PRISON.

Defendants and Respondents.

APPEAL FROM: District Court of the Third Judicial District,
In and for the County of Powell,
The Honorable Ted L. Mizner, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Daniel Orozco, Pro Se, Deer Lodge, Montana

For Respondents:

Lois Adams, David L. Ohler, Diana P. Leibinger,
Attorneys at Law, Department of Institutions,
Helena, Montana

Submitted on Briefs: October 10, 1996
Decided: March 10, 1997Filed:
Clerk
Justice Karla M. Gray delivered the Opinion of the Court.
Daniel Orozco (Orozco), appearing pro se, appeals from the
opinion and order of the Third Judicial District Court, PowellCounty, dismissing his complaint for failure to state a claim uponwhich relief could be granted. We affirm in part, reverse in part
and remand for further proceedings consistent with this opinion.We restate the issues on appeal as follows:
1. Did the District Court err in concluding that the
Department of Corrections and the individual defendants are not"persons" under 42 U.S.C. 1983?
2. Did the District Court err in concluding that theindividual defendants have qualified immunity?Factual and Procedural BackgroundOrozco is an inmate at the Montana State Prison (MSP). On March 26, 1995, Unit Manager Dave Lanning notified Orozco, via a
document entitled "Due Process Notifications," that an ongoinginvestigation indicated that he was involved in a conspiracy totraffic drugs within the MSP. The notice further stated that a classification hearing would be held to address Orozco's custodylevel and job assignment and that Orozco could present evidence onhis own behalf at the hearing. On the same day, Orozco was placed
in temporary lock-up in maximum security for investigation purposespursuant to MSP Policy No. 15-002.Orozco was not provided with a hearing investigator to assist
in his defense at the classification hearing held on March 28,1995. As a result of the hearing, Orozco was reclassified tomaximum security and was unable to continue earning thirteen daysper month good time credits.
Orozco subsequently filed a 42 U.S.C. 1983 civil rightsaction against Rick Day, Director of the Department of Corrections;Mike Mahoney, Section Warden; Myron Beeson, Section Warden; Candyce
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Neubauer, Classification Manager; Dave Lanning, Unit Manager forClose Unit One; the Department of Corrections (Department); and theMSP. Orozco requested a declaratory judgment that the defendantshad violated his due process rights under the Fifth and FourteenthAmendments to the United States Constitution by failing to assigna hearing investigator to assist in his defense during theclassification hearing which could, and did, result in hisinability to continue to earn thirteen days per month good timecredits. He also sought a preliminary and permanent injunctionrequiring the defendants to adequately train and supervisepersonnel in established policy and discipline personnel forfailure to comply with such policy; to place him back in thegeneral prison population; and to credit him with thirteen days permonth good time which was lost due to his placement in maximumsecurity. Finally, Orozco requested an award of money damages
against each of the defendants.The defendants moved to dismiss Orozco's complaint pursuant to
Rule 12(b)(6), M.R.Civ.P., for failure to state a claim upon whichrelief could be granted. The District Court held a hearing inDecember of 1995 and, thereafter, granted the defendants' motion to
dismiss. Orozco appeals.Additional facts are set forth below where necessary to ourresolution of the issues. Standard of Review The District Court dismissed the entirety of Orozco's
complaint pursuant to Rule 12(b)(6), M.R.Civ.P. In evaluating aRule 12(b)(6) motion to dismiss, courts are required to construe acomplaint in the light most favorable to the plaintiff. The court should not dismiss the complaint unless it appears that theplaintiff is not entitled to relief under any set of facts whichcould be proved in support of the claims. Loney v. Milodragovich,Dale & Dye, P.C. (1995), 273 Mont. 506, 509, 905 P.2d 158, 160.
The issues Orozco raises on appeal assert error in theDistrict Court's conclusions of law. We review a district court's conclusions of law to determine whether the court's interpretationof the law is correct. Werre v. David (1996), 275 Mont. 376, 385,
913 P.2d 625, 631.Discussion
1. Did the District Court err in concluding that theDepartment and the individual defendants are not"persons" under 42 U.S.C. 1983?
Orozco based his claim against the Department and each
individual defendant on 42 U.S.C. 1983, which provides:Every person who, under color of any statute, ordinance,regulation, custom, or usage, of any State or Territoryor the District of Columbia, subjects, or causes to besubjected, any citizen of the United States or other
person within the jurisdiction thereof to the deprivation
of any rights, privileges, or immunities secured by the
Constitution and laws, shall be liable to the party
injured in an action at law, suit in equity, or other
proper proceeding for redress.

In order to prevail on a 1983 claim, the plaintiff must
establish:
(1) a violation of rights protected by the [United
States] Constitution or created by federal statute, (2)
proximately caused (3) by conduct of a "person" (4)
acting under color of state law.

Crumpton v. Gates (9th Cir. 1991), 947 F.2d 1418, 1420.The District Court concluded that the Department and theindividual defendants are not "persons" within the meaning of1983. Orozco contends that the court erred. Department of CorrectionsThe United States Supreme Court has held that municipalitiesand local government units are among those "persons" to whom 42
U.S.C. 1983 applies. See Monell v. New York City Dep't of SocialServ. (1978), 436 U.S. 658, 690, 98 S.Ct. 2018, 2035, 56 L.Ed.2d611, 635. States and other governmental entities, on the otherhand, are considered "arms of the state" and, as a result, they arenot "persons" within the meaning of 1983. See Will v. MichiganDep't of State Police (1989), 491 U.S. 58, 70, 109 S.Ct. 2304,2312, 105 L.Ed.2d 45, 57. The exclusion of states and "arms of the state" from the term "person" contained in 1983 is based on the immunity from suit provided to states by the Eleventh Amendment tothe United States Constitution. See Will, 491 U.S. at 66.The Department is an entity within the executive branch ofgovernment in the State of Montana (State). See 2-15-102(4) and2-15-2301, MCA. Thus, it is a governmental entity which isconsidered an "arm of the state" and not a "person" for 1983 purposes. See Will, 491 U.S. at 70.Orozco argues that 2-9-305(2), MCA, required him to join theDepartment in this action and, therefore, that the District Courterred in concluding that it was not a proper 1983 defendant. The Department did not respond to Orozco's argument but, in any event,Orozco misreads the statute. Section 2-9-305(2), MCA, requires governmental entityemployers to defend and indemnify employees sued for misconductcommitted in the course and scope of the employees' office oremployment, including employees against whom a 1983 action is brought. It does not refer to, or require, joinder of agovernmental entity when an employee of that entity is sued. See
2-9-305(2), MCA. Although the heading of 2-9-305, MCA,contains the language "Governmental entity to be joined as
defendant," nothing in the text of the statute relates to orsupports that portion of the heading. We have held that the text of the statute takes precedence over the title in matters ofstatutory interpretation. See ISC Distrib., Inc. v. Trevor (1995),
273 Mont. 185, 196, 903 P.2d 170, 177.Orozco's contention that, under 2-9-305(2), MCA, the
Department was a proper party in his 1983 action is also without merit. The statute addresses actions brought against employees; itdoes not relate to the propriety or impropriety of suinggovernmental entities, and the law is clear that 1983 does not apply to arms of the state. See 2-9-305(2), MCA; Will, 491 U.S.at 70.
We hold that the District Court correctly concluded that theDepartment is not a "person" within the meaning of 42 U.S.C.1983. Individual Defendants State officials sued for money damages in their official
capacities also are not "persons" within the meaning of 1983,because the suit is not a suit against the state officials, but isa suit against the officials' offices. Therefore, an action formoney damages against a state official in his or her officialcapacity is no different than a suit against the state itself.Will, 491 U.S. at 71.
State officials are "persons" within the meaning of 1983,however, if sued for money damages in their individual capacitiesfor actions taken under color of state law. See Trout v. Bennett
(1992), 252 Mont. 416, 425, 830 P.2d 81, 85-86 (following Hafer v.Melo (1991), 502 U.S. 21, 112 S.Ct. 358, 116 L.Ed.2d 301). Orozco argues on appeal that, because he sued the individual defendants intheir individual capacities, the District Court erred in concluding
that the individual defendants are not "persons" under 1983. Generally, where state officials are sued for damages under
1983, it is presumed that the officials are sued in their
individual capacities. See Shoshone-Bannock Tribes v. Fish & Game
Comm'n, Idaho (9th Cir. 1994), 42 F.3d 1278, 1284 (citation
omitted).
Any other construction would be illogical where the
complaint is silent as to capacity, since a claim for
damages against state officials in their official
capacities is plainly barred.

Shoshone-Bannock Tribes, 42 F.3d at 1284. In cases where the
complaint does not clearly specify whether state officials are sued
in their individual or official capacities, the course of the
proceedings will indicate the type of liability sought to be
imposed. Larez v. City of Los Angeles (9th Cir. 1991), 946 F.2d
630, 640 (citation omitted).

Here, Orozco's complaint does not clearly indicate in which capacity he sued the individual defendants. The caption of thecomplaint, in which the individual defendants' names are followedby an identification of their positions within the Department or atthe MSP, suggests that Orozco sued them in their officialcapacities. In addition, the complaint contains a section entitled"DEFENDANT'S [sic]" which sets forth the name of each defendant andhis or her position, followed by a description of the defendant'sofficial duties.
On the other hand, Orozco's complaint also containsindications that Orozco intended to sue the individual defendants in their individual, rather than their official, capacities. For
example, the complaint asserts that the Eleventh Amendment does notbar actions against officials who, acting under color of state law,deprive a plaintiff of constitutionally protected rights. This assertion appears to reflect an awareness by Orozco that, whileEleventh Amendment immunity applies to state officials sued intheir official capacity (see Will, 491 U.S. at 70-71), it "providesno shield for a state official confronted by a claim that he haddeprived another of a federal right under the color of state law"(see Scheuer v. Rhodes (1974), 416 U.S. 232, 237, 94 S.Ct. 1683,1687, 40 L.Ed.2d 90, 97).
Orozco's complaint also states that the individual defendants
are "not entitled to the protection of the good faith immunity."Such a defense for the individuals named in Orozco's complaint onlybecomes an issue, however, when they are sued in their individualcapacities, because personal immunity defenses may be asserted onlyby officials sued in their personal, rather than their official,capacities. See Hafer, 502 U.S. at 25. Thus, the reference inOrozco's complaint to personal immunity defenses suggests an intentto sue the defendants in their individual capacities. Otherwise,inclusion of such a reference would be meaningless.
Orozco's complaint further states that the defendants "acted
with malicious intent, outside [the] scope of their authority." In this regard, Orozco's complaint is similar to those in Scheuer,where the plaintiffs alleged that the defendants actedintentionally, recklessly, willfully and wantonly either undercolor of state law or outside the scope of their authority. See Scheuer, 416 U.S. at 235. Faced with such allegations in thecontext of a trial court's decision to dismiss the complaints atthe pleading stage, the United States Supreme Court concluded thatthe plaintiffs' allegations demonstrated that they were seeking toimpose individual liability on the named defendants. Scheuer, 416
U.S. at 238. Orozco's complaint does not clearly and consistently establishwhether he is suing the individual defendants in their official orindividual capacities. We conclude, however, that a fair reading
of the complaint suggests an intent by Orozco to sue the individualdefendants in their individual capacities. We hold, therefore, that the District Court erred in concluding at the pleading stageof this case that the individual defendants were not "persons"under 42 U.S.C. 1983.
2. Did the District Court err in concluding that theindividual defendants have qualified immunity?
The District Court also concluded that the individual defendants were entitled to qualified immunity. Orozco contends that the court erred in this conclusion as well. We recently discussed qualified immunity at length in Boreen
v. Christensen (Mont. 1996), 930 P.2d 67, 53 St.Rep. 1450.Qualified immunity shields government officials performingdiscretionary functions from civil damages "'insofar as theirconduct does not violate clearly established statutory orconstitutional rights of which a reasonable person would haveknown.'" Boreen, 930 P.2d at 70 (quoting Harlow v Fitzgerald(1982), 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396). "Qualifiedimmunity 'gives ample room for mistaken judgments by protecting allbut the plainly incompetent or those who knowingly violate thelaw.'" Boreen, 930 P.2d at 70 (quoting Hunter v. Bryant (1991),
502 U.S. 224, 229, 112 S.Ct. 534, 537, 116 L.Ed.2d 589, 596).Courts apply a two-pronged test in determining whether an
official is entitled to qualified immunity. First, the court mustdetermine whether a clearly established right has been violated;and second, the court must determine whether a reasonable person orofficial would have known that his or her conduct violated that right. Sacco v. High Country Indep. Press (1995), 271 Mont. 209,216, 896 P.2d 411, 415 (citation omitted).
The threshold inquiry in applying the qualified immunity test,
therefore, is whether the constitutional right allegedly violated-

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