Louis Del Favero Orchids, Inc. v. Scott Rivkees ( 2022 )

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[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 19-14930
____________________
LOUIS DEL FAVERO ORCHIDS, INC.,
Plaintiff-Appellant,
versus
SCOTT RIVKEES,
Individually and in his official capacity as
Surgeon General and Secretary of the
Florida Department of Health,
CHRISTIAN BAX,
Individually,
COURTNEY COPPOLA,
Individually,
LOUISE ST. LAURENT,
Individually,
CELESTE PHILLIP,
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2 Opinion of the Court 19-14930
Individually, et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Northern District of Florida
D.C. Docket No. 4:19-cv-00284-RH-MJF
____________________
Before WILSON, ROSENBAUM, and ED CARNES, Circuit Judges.
ROSENBAUM, Circuit Judge:
Despite initial appearances, this isn’t a case about medical
marijuana. Nor is this a case about the allegedly wrongful denial
of a license to dispense medical marijuana. This also isn’t a case
about a state agency that has allegedly ignored a state constitu-
tional directive to license medical marijuana dispensaries, either.
Instead, this is a case about whether there’s a federal constitutional
“property right” to process. There isn’t. To be sure, a federal con-
stitutional right to process to protect constitutional rights to life,
liberty, and property exists. But process itself is not a property
right—that would be circular.
Plaintiff-Appellant Louis Del Favero Orchids, Inc. (“Del
Favero”), applied for a license to dispense medical marijuana from
the Florida Department of Health (“the Department”). But the
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19-14930 Opinion of the Court 3
Department didn’t approve or deny Del Favero’s application. In-
stead, it told Del Favero that it wasn’t accepting applications (yet)
and that it would publish a notice in the Florida Administrative
Register when the application period opened. Del Favero didn’t
accept this answer and sued the Department, claiming that the De-
partment had deprived Del Favero—not of the right to a license—
but of the right to have its application for a license reviewed. The
district court dismissed Del Favero’s complaint.
After a thorough review of the record and with the benefit
of oral argument, we affirm the district court’s judgment because
the federal procedural-due-process clause doesn’t guarantee pro-
cess as an end in itself; it guarantees process only as process regards
a substantive right.
I. FACTUAL BACKGROUND
This dispute arises from interlocking Florida constitutional
and statutory provisions governing the licensing of Medical Mari-
juana Treatment Centers (“Centers”). So before we get to the mat-
ter at hand, we must first review (1) the Florida Compassionate
Medical Cannabis Act of 2014 (the “Act”); (2) Article X, Section 29
of the Florida Constitution; (3) a 2017 amendment to the Act; and
(4) some regulations promulgated under the Act.
A. Florida’s Medical Marijuana Regulatory Scheme
This case finds its origins in 2014, when Florida passed the
Act. The Act legalized cultivating, processing, and dispensing (to
qualified patients) medical marijuana. FLA. STAT. § 381.986(1)
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(2014). It also directed the Florida Department of Health to
“[a]uthorize the establishment of five dispensing organizations”
and ordered that the Department “shall develop an application
form” for potential dispensing organizations. Id. § 381.986(5)(b)
(2014). To accomplish these things, the Act empowered the De-
partment “[a]dopt [necessary] rules.” Id. § 381.986(5)(d) (2014).
Two years later, Florida voters approved a ballot initiative
amending the Florida Constitution to add deadlines for the Depart-
ment to fulfill its duties. The Amendment—codified as Article X,
Section 29 of the Florida Constitution—directed that the Depart-
ment “shall issue reasonable regulations necessary for the imple-
mentation of this section. . . . It is the duty of the Department to
promulgate regulations in a timely fashion.” FLA. CONST. art. X,
§ 29(d). More concretely, the new section of the Constitution re-
quired the Department to “promulgate[] no later than six (6)
months after the effective date of this section”—or by June 3,
2017—regulations establishing “[p]rocedures for the registration of
[Centers] that include procedures for the issuance, renewal, sus-
pension and revocation of registration[.]” Id. § 29(d)(1)c. Section
29 also provided that “[i]f the Department does not issue regula-
tions, or if the Department does not begin issuing identification
cards and registering [Centers] within the time limits set in this sec-
tion, any Florida citizen shall have standing to seek judicial relief to
compel compliance with the Department’s constitutional duties.”
Id. § 29(d)(3).
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Following the amendment, the Florida legislature modified
the Act to track the new constitutional language. The amended
Act required the Department to license Centers that fell into par-
ticular categories. FLA. STAT. § 381.986(8)(a)(1).
First, under the new version of the law, the Department of
Health had to—“[a]s soon as practicable, but no later than July 3,
2017”—relicense any Center that had a license before the amend-
ment and which continued to meet the statutory requirements. Id.
Second, the amended Act required the Department of
Health to distribute ten licenses to (1) applicants who, among other
requirements, had applied for a license under the predecessor law
and been denied and (2) applicants who were “a recognized class
member of Pigford v. Glickman, 185 F.R.D. 82 (D.D.C. 1999), or In
Re Black Farmers Litig., 856 F. Supp. 2d 1 (D.D.C. 2011).” Id.§ 381.986(8)(a)2a–b. Of these ten licenses, the Department had to
issue at least one to a member of the second category. Id. §
381.986(8)(a)2b. More specifically, under the amended law, the De-
partment had to, “[a]s soon as practicable, but no later than Octo-
ber 3, 2017 . . . license applicants that meet the requirements of this
section in sufficient numbers to result in 10 total licenses issued un-
der this subparagraph, while accounting for the number of licenses
issued under sub-subparagraphs a. and b.” Id. § 381.986(8)(a)2c.
And “[f]or up to two of the licenses issued under subparagraph 2.,
the amended Act required the “[D]epartment [to] give preference”
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to applicants planning to convert a citrus-fruit or citrus-molasses
facility to process marijuana. Id. § 381.986(8)(a)3. 1
To recap then, under the amended Act, the Department had
to relicense active Centers by August 1, 2017. The amended Act
also required the Department, by October 2017, to distribute up to
ten licenses to (1) formerly unsuccessful applicants and (2) mem-
bers of two specified litigation classes, and to give preference to ap-
plicants using converted citrus facilities.
As to the licensing process, the amended Act specified that
licensing applicants had to “apply to the department on a form pre-
scribed by the [D]epartment and adopted in rule.” Id. §
381.986(8)(b). And the amended Act required the Department to
“adopt rules pursuant to [sections] 1200.536(1) and 120.54 establish-
ing a procedure for the issuance and biennial renewal of licenses[.]”
Id. Subject to the initial limits of ten licenses and the designated
groups of recipients, the amended Act also provided that “the
[D]epartment shall issue a license to an applicant if the applicant
meets the requirements of this section and pays the initial applica-
tion fee.” Id.
1 The ten licenses were just the beginning. The new law also required the
Department to license four Centers within six months after the registration of
100,000 active qualified patients (and then four more Centers within six
months of the registration of every additional 100,000 patients). Id.
§ 381.986(8)(a)4.
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A couple of months after the law went into effect, the De-
partment promulgated an emergency administrative rule. FLA.
ADM. CODE R. 64ER17-2(1), (1)(e), (4). The emergency rule stated
that the Department “shall publish in the Florida Administrative
Register and on its website the date upon which the [D]epartment
will begin accepting applications and the deadline to receive all ap-
plications.” Id. Besides this directive, the emergency rule linked to
an application form and explained how applications would be
scored. Id. 2
B. State Court Litigation and Del Favero’s Efforts to Obtain a
Center License
In December 2017, a company other than Del Favero—Flo-
rigrown, LLC—challenged the constitutionality of the 2017 law
and the Department’s regulations. See Fla. Dep’t of Health v. Flo-
rigrown, LLC, 317 So. 3d 1101 (Fla. 2021). Del Favero intervened
in support of Florigrown.
In the course of those proceedings, on October 5, 2018, a
state trial court enjoined Florida’s Department of Health from is-
suing Center licenses “pursuant to the unconstitutional legislative
scheme set forth in” section 381.986; (2) required the Department
2In both July and November 2017, the Department published “Constitutional
Regulations” explaining that the Department would begin—but had not yet
begun—accepting applications and would publish a notice in the Florida Ad-
ministrative Register. See MedPure, LLC v. Dep’t of Health, 295 So. 3d 318,
321 n.3 (Fla. Dist. Ct. App. 2020).
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to start “registering [Centers] in accordance with the plain lan-
guage of the Medical Marijuana Amendment”; and (3) required the
Department to give Florigrown a license. Fla. Dep’t of Health v.
Florigrown, LLC, 320 So. 3d 195 (Fla. Dist. Ct. App. 2019), reversed
in part by Fla. Dep’t of Health v. Florigrown, LLC, 317 So. 3d 1101(Fla. 2021). Soon after, though, a state intermediate court stayed
the injunction.
While the state-court litigation was proceeding, Del Favero
bought a citrus-processing facility for three-quarters of a million
dollars—to capitalize on the preference afforded such applicants—
and applied for a Center license on October 8, 2018. Del Favero
didn’t receive a response. So it resubmitted its application—with
the full application fee of $60,830—on October 17, 2018.
Del Favero still didn’t get a response. So in January 2019,
Del Favero sent the Department a letter claiming a “default li-
cense” under Florida Statutes section 120.60(1). That section pro-
vides that, if the Department doesn’t approve or deny a license ap-
plication within ninety days of submission, and the applicant pro-
vides notice to the agency, then the applicant can claim use of a
“default license.” FLA. STAT. § 120.60(1).
The Department returned Del Favero’s application fee and
responded that Del Favero’s application was premature because
the Department had not yet published notice that it was accepting
applications. Del Favero, the Department warned, did not have a
default license.
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II. PROCEDURAL HISTORY
Del Favero sued the Florida Department of Health and sev-
eral Department officials for allegedly violating its Fourteenth
Amendment procedural-due-process rights under 42 U.S.C. § 1983.
In its complaint, Del Favero said that it “enjoy[ed] a state-created
property interest in having its application to be a [Center] reviewed
by the [Department].” The Department, it contended, “deprived
[Del Favero] of this property interest by refusing to review [Del
Favero’s] application in violation of these provisions.”
The Department and Department officials moved to dismiss
for five reasons. First, they said, the district court should abstain
from hearing the case because of the Pullman, Burford, and Colo-
rado River abstention doctrines. 3 Second, they argued that sover-
eign immunity and qualified immunity barred Del Favero’s official-
capacity claim against the Department and its individual-capacity
claims against the Department officials, respectively. Third, the
defendants asserted that Del Favero wasn’t an applicant for a li-
cense because the published regulations plainly stated that the ap-
plication period hadn’t yet opened. Fourth, the defendants con-
tended that Del Favero hadn’t stated a claim for the denial of pro-
cedural due process because—even assuming Del Favero was an
applicant—only license holders, not license applicants, possessed a
3See, e.g., R.R. Comm’n v. Pullman Co., 312 U.S. 496 (1941); Burford v. Sun
Oil Co., 319 U.S. 315 (1943); Colo. River Water Conservation Dist. v. United
States, 424 U.S. 800 (1976).
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property right protected by the Fourteenth Amendment. And fifth,
the Department concluded that, even if Del Favero had a property
interest in obtaining a license, its due-process rights weren’t vio-
lated because it could sue (and had, in fact, sued) in the Florida state
courts.
Upon review of the defendants’ motion, the district court
ordered Del Favero to address in its response whether “a person
has a constitutional right to due process in connection with an ap-
plication for a state license that, if issued, purportedly would au-
thorize the person to commit a federal crime.”
Del Favero responded that the Controlled Substances Act
didn’t prohibit possession of a license under state law. Rather, it
said, we determine property interests protected by the due-process
clause by reference to state law, so what federal law prohibited
didn’t affect the procedure a state needed to provide before depriv-
ing a citizen of a state-created property right. Then, in addressing
the defendants’ arguments, Del Favero contended that the district
court didn’t need to abstain because the pending state-court actions
wouldn’t resolve its federal-law challenges. As to the defendants’
immunity arguments, Del Favero argued both that (1) reviewing
its application wasn’t a discretionary function and that (2) the law
was clearly established that state officials couldn’t refuse to do their
jobs to review and approve or deny pending applications. On the
merits, Del Favero said that the Department had deprived it of a
property right—“a [s]tate-[c]reated [p]roperty [i]nterest in [h]aving
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its [Center] [a]pplication [r]eviewed.” Finally, Del Favero asserted
that state-court procedures didn’t provide an adequate remedy be-
cause Del Favero could obtain only injunctive relief—not damages
for the time and money it had lost in the meantime.
The district court dismissed Del Favero’s claims because fed-
eral law prohibited possessing, distributing, or manufacturing ma-
rijuana. So in the district court’s view, an interest in a license to
possess, distribute, or manufacture marijuana wasn’t a property in-
terest protected by the federal Constitution. Del Favero now ap-
peals.
III. STANDARD OF REVIEW
“We review de novo the district court’s grant of a motion to
dismiss under Rule 12(b)(6) for failure to state a claim, accepting
the allegations in the complaint as true and construing them in the
light most favorable to the plaintiff.” Am. Dental Ass’n v. Cigna
Corp., 605 F.3d 1283, 1289 (11th Cir. 2010) (quotations omitted).
IV. DISCUSSION
As we explain below, Del Favero’s complaint fails to state a
claim because it alleges a “property” interest—not in property—
but in procedure. That is, Del Favero’s claimed property interest
is not in a license, but in having its license application reviewed.
And the Supreme Court has repeatedly explained that the due-pro-
cess clause requires process only to protect certain rights (like prop-
erty) and doesn’t require process to protect process. For this rea-
son—and because we may affirm on any ground supported by the
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record, see Long v. Comm’r, 772 F.3d 670, 675 (11th Cir. 2014)—
we affirm the district court’s dismissal of the case.
The Fourteenth Amendment provides that states shall not
“deprive any person of life, liberty, or property, without due pro-
cess of law.” U.S. CONST. amend. XIV, § 1. The Supreme Court
construed this clause as protecting two concepts: (1) substantive
due process and (2) procedural due process. See Cleveland Bd. of
Educ. v. Loudermill, 470 U.S. 532, 541 (1985) (“The categories of
substance and procedure are distinct.”). As Del Favero alleges a
violation of procedural-due-process rights, we must “determine
whether [it] was deprived of a protected property interest, and if
so, what process was due.” Barnes v. Zaccari, 669 F.3d 1295, 1303
(11th Cir. 2012).
Del Favero’s claim fails because it hasn’t alleged the depriva-
tion of a property interest. “[P]roperty interests subject to proce-
dural due process protection are not limited by a few rigid, tech-
nical forms. Rather, property denotes a broad range of interests
that are secured by existing rules or understandings.” Id. (citation
omitted). Property interests don’t come from the Constitution; in-
stead, they are created (or recognized) by “independent source[s]
such as state law.” Town of Castle Rock v. Gonzales, 545 U.S. 748,
756 (2005) (quotation marks and citations omitted). The Supreme
Court has been clear that procedural due process requires adequate
procedures to protect “certain substantive rights.” Loudermill, 470
U.S. at 541. But procedural due process doesn’t create a standalone
right to process itself.
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Three cases illustrate this distinction. First, consider Olim v.
Wakinekona, 461 U.S. 238 (1983). There, the plaintiff sued a Ha-
waii state prison for transferring him to an out-of-state prison. Id.
at 249. The Supreme Court held that the plaintiff’s procedural-due-
process rights weren’t violated because the administrator enjoyed
“completely unfettered” discretion to transfer the plaintiff, so the
plaintiff didn’t have a substantive right at stake. Id. The Supreme
Court explained that the circuit court had erred by focusing on the
fact that the prison regulations “require[d] a particular kind of hear-
ing before the administrator can exercise his unfettered discretion.”
Id. at 250. But “[p]rocess is not an end in itself,” the Supreme Court
declared. Id. Rather, the Court continued, “[i]ts constitutional pur-
pose is to protect a substantive interest to which the individual has
a legitimate claim of entitlement.” Id. The Court concluded that
“[t]he State may choose to require procedures . . ., of course, but in
making that choice the State does not create an independent sub-
stantive right.” Id. at 250–51.
Second, we look at Loudermill. The plaintiff there was a
public employee who was fired, he asserted, without a meaningful
opportunity to contest the reason for his termination. Loudermill,
470 U.S. at 536. Before the Supreme Court, the city-defendant ar-
gued that, while public employment was a property interest, the
termination procedures laid out by statute defined (or limited) that
property interest. Id. at 539–40. The Supreme Court rejected that
view, explaining that “‘[p]roperty’ cannot be defined by the proce-
dures provided for its deprivation any more than can life or liberty”
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because otherwise the “[c]lause would be reduced to a mere tau-
tology.” Id. at 541.
And third, in Town of Castle Rock, the plaintiff argued that
the police had violated her procedural-due-process rights by failing
to enforce a protective order. 545 U.S. at 763. The Supreme Court
rejected this argument because the enforcement of the arrest war-
rant didn’t constitute property. Id. at 768. The Supreme Court said
that “the seeking of an arrest warrant would be an entitlement to
nothing but procedure—which we have held inadequate even to
support standing; much less can it be the basis for a property inter-
est.” Id. at 764 (cleaned up). As Justice Souter explained in his con-
currence, “the federal process protects the property created by
state law. But [plaintiff] claims a property interest in a state-man-
dated process in and of itself . . . . This argument is at odds with the
rule that ‘[p]rocess is not an end in itself.’” Id. at 771 (Souter, J.,
concurring) (citing Olim, 461 U.S. at 250). A different rule, Justice
Souter said, would “would federalize every mandatory state-law
direction to executive officers” and “work a sea change in the scope
of federal due process.” Id.Here, Del Favero may or may not have a property right in a
Center license, but it doesn’t have a property right in the process
of licensure. That is, we assume without deciding that Del Favero
could have had a property interest in a Center license. 4 So when
4Because we affirm the district court’s dismissal of this case since Del Favero
has no due-process right in process itself, we do not opine on either the district
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the Department reviews Del Favero’s application, as a license ap-
plicant, Del Favero might be entitled to certain process before the
Department grants or denies its application—for example, to have
its Center application evaluated by a neutral decisionmaker accord-
ing to publicly available objective criteria and with the opportunity
to respond. Cf. Henry Friendly, “Some Kind of Hearing”, 123 U.
PA. L. REV. 1267 (1975). But that isn’t the property right Del Favero
complains it lost. Rather, Del Favero insisted, over and over, that
it was deprived of its “property right” in having its application re-
viewed. But as we have explained, that isn’t a property right.
Loudermill, 470 U.S at 541 (“‘Property’ cannot be defined by the
procedures provided for its deprivation any more than can life or
liberty.”). Instead, procedural due process protects only substan-
tive rights, and “[p]rocess is not an end in itself. Its constitutional
purpose is to protect a substantive interest to which the individual
has a legitimate claim of entitlement.” Olim, 461 U.S. at 250.
There is a difference between a right to a license and the right to
have an application reviewed.
Against this, Del Favero points out that the Florida Consti-
tution provides “any Florida citizen . . . standing to seek judicial
relief to compel compliance with the Department’s constitutional
duties.” FLA. CONST. art. X, § 29(d)(3). And it’s true that the Florida
Constitution can recognize an interest as sufficient to support
court’s basis for dismissing this case or on the defendants’ alternative bases for
arguing that Del Favero’s claim fails.
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standing in Florida state courts. But when making a claim in fed-
eral court for violation of the federal Due Process clause, “federal
constitutional law determines whether that interest rises to the
level of a ‘legitimate claim of entitlement.’”” Memphis Light, Gas
and Water Div. v. Craft, 436 U.S. 1, 9 (1978) (quoting Bd. of Re-
gents v. Roth, 408 U.S. 564, 577 (1972)). And federal constitutional
law doesn’t recognize the right that Del Favero seeks here—a prop-
erty right to state process. In other words, Del Favero might have
a cause of action, but its cause of action would be under state law,
not under federal constitutional law. So it must therefore seek re-
lief in state court. 5
V. CONCLUSION
Because Del Favero doesn’t have a property interest in the
MMTC application process being opened, the district court cor-
rectly concluded that Del Favero’s procedural due process rights
were not violated.
AFFIRMED.
5 Del Favero said in passing that it had a property interest in the default license.
But it didn’t develop this argument before the district court, instead falling
back to its process-as-property arguments. In any event, a state court has since
ruled that the default licensure provisions do not apply to Center licenses. See
Louis Del Favero Orchids, Inc. v. Fla. Dep’t of Health, 2019-CA-1047 (Fla.
Leon Cnty. Ct. July 30, 2021).