106 F.4th 1091
11th Cir.2024Background
- Florida nursing facility residents and their estates sued Michael Bokor, owner of the facilities’ management company, and Marcus & Millichap, Inc. (MMI), a marketing broker, claiming nearly $1 billion in improper payments due to allegedly improper licensing of 22 skilled nursing facilities.
- Plaintiffs alleged that the facilities’ license applications omitted required management company information, violating Florida law and rendering all services “unbillable.”
- Plaintiffs did not sue the facilities or license-holders directly but focused claims on Bokor and MMI for allegedly participating in fraudulent licensing schemes.
- After several procedural moves, including removal to federal court, initial remand, and reversal, Plaintiffs amended their complaint to assert federal RICO claims and breach of fiduciary duty.
- The district court, adopting a magistrate judge’s report and recommendation (R&R), dismissed the case with prejudice on several grounds, including Colorado River abstention, because similar issues were pending in state courts.
- Plaintiffs’ efforts to amend the complaint again were denied as untimely and futile, and their objections to the magistrate's orders were either late or insufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Colorado River abstention | Magistrate erred in invoking abstention; state actions misstated | Plaintiffs waived objection; abstention correct | Objection waived; abstention applies; stay claims |
| Timeliness of motion to amend | Should be allowed to amend; changes needed for federal pleading | Amendment untimely and futile | Objection untimely; denial affirmed |
| Standing and merits of RICO claim | Had standing under RICO and injury from "void" licenses | No standing, no proximate causation | Court declined to reach on waiver grounds |
| Primary administrative jurisdiction | Not specifically contested | Should defer to AHCA (admin. agency) | Objection waived; separate grounds for dismiss |
Key Cases Cited
- Colo. River Water Conservation Dist. v. United States, 424 U.S. 800 (establishes the Colorado River abstention doctrine allowing federal courts to stay cases in favor of parallel state proceedings)
- Ambrosia Coal & Constr. Co. v. Pagés Morales, 368 F.3d 1320 (clarifies circumstances for applying Colorado River abstention)
- Sinochem Int’l Co. v. Malaysia Int’l Shipping Corp., 549 U.S. 422 (federal courts can choose among threshold non-merits grounds to dismiss)
- FW/PBS, Inc. v. City of Dallas, 493 U.S. 215 (Article III standing as a jurisdictional prerequisite)
- Reiter v. Cooper, 507 U.S. 258 (explains primary administrative jurisdiction doctrine)
- Smith v. Marcus & Millichap, Inc., 991 F.3d 1145 (prior appellate history of this dispute regarding CAFA exceptions)