TropiFlora, LLC v. Fla. Dep't of Health
| Decision Date | 07 September 2022 |
| Docket Number | 1D20-1372 |
| Citation | 346 So.3d 1271 |
| Parties | TROPIFLORA, LLC, as agent for MariJ Agricultural, Inc., and Dennis and Linda Cathcart, d/b/a TropiFlora Nursery, Appellant, v. FLORIDA DEPARTMENT OF HEALTH, Appellee. |
| Court | Florida District Court of Appeals |
Steven R. Andrews of the Law Office of Steven R. Andrews, P.A., Tallahassee; and Cynthia A. Myers of the Law Office of Cynthia A. Myers, P.A., Tallahassee, for Appellant.
Eduardo S. Lombard and Angela D. Miles of the Radey Law Firm, Tallahassee, for Appellee.
This appeal arises from a final judgment for the Florida Department of Health in an action brought by TropiFlora, LLC, as agent for MariJ Agricultural, Inc. and Dennis and Linda Cathcart d/b/a TropiFlora Nursery, seeking a declaration that it is entitled to licensure as a medical marijuana treatment center under section 381.986(8)(a)2.1., Florida Statutes (2019). For the reasons below, we affirm.
In July 2015, TropiFlora applied for one of five regional licenses in the state to cultivate and distribute medical marijuana as a dispensing organization ("DO") under the now-repealed Compassionate Medical Cannabis Act of 2014 (the "2014 Law"). Only nurseries meeting certain statutory criteria could apply for DO licensure. § 381.986(5)(b)1., Fla. Stat (2015). As part of the application process, the nurseries needed to provide certified financial statements to the Department to show "[t]he financial ability to maintain operations for the duration of the 2-year approval cycle." § 381.986(5)(b)5., Fla. Stat. Through negotiated rulemaking, the Department established procedures for DO application, approval, and authorization. Fla. Admin. Code R. 64-4.001(1), 64-4.002(2)(f)1. (2015). These rules included a warning that if applicants failed to provide the required documentation, their application would be denied prior to scoring. Fla. Admin. Code R. 64-4.002(4).
TropiFlora's application included a certificate of nursery registration issued to TropiFlora, but it did not include certified financial statements for TropiFlora itself. Instead, it relied on financial statements for MariJ, a separate corporate entity from TropiFlora. Neither MariJ nor the Cathcarts applied for licensure, and neither of them satisfies the requirements for licensure.
The Department notified TropiFlora that the company's application failed to include the statutorily required financial statements. Although the Department gave TropiFlora fourteen days to cure the deficiency, TropiFlora failed to do so. Instead, it contended that because MariJ was a "shareholder" of TropiFlora, it believed the financial statements of MariJ were enough to comply with the statute and rules. In November 2015, the Department notified TropiFlora that its application was denied for failure to cure the cited deficiency.
TropiFlora filed a formal written protest under chapter 120, Florida Statutes, challenging the denial of its license application (the "2015 Petition"). The Department referred the petition to the Division of Administrative Hearings, which consolidated TropiFlora's proceeding with the proceedings of other challengers for the same regional license. But two months before the scheduled final hearing, TropiFlora instituted the circuit court action at issue in this appeal and voluntarily dismissed its administrative petition, abandoning its administrative remedy before the process was completed.
TropiFlora later filed an amended complaint in circuit court "as agent for" MariJ and the Cathcarts. Both the complaint and amended complaint stemmed from chapter 2016-123, Laws of Florida (the "2016 Law"), a then-recent statutory amendment that authorized a limited expansion of available DO licenses within the five regions. In TropiFlora's view, the 2016 Law allowed an applicant that was previously denied DO approval to sue in circuit court and obtain a de novo determination on entitlement to licensure.
While the amended complaint was pending, the legislature completely rewrote section 381.986, Florida Statutes (the "2017 Law"), to implement a constitutional amendment approved by the voters in late 2016. The amendment allows qualifying patients to access medical marijuana with higher THC content and authorizes the use of medical marijuana to treat a broader range of medical conditions than the 2014 Law. See art. X, § 29(b)(1), (b)(4), Fla. Const.
Relevant to this appeal, the 2017 Law no longer provided for the licensure of DOs, replacing them with medical marijuana treatment centers (MMTCs) that have additional requirements. The 2017 Law provided for the conversion of existing DO licenses to MMTC licenses and for the Department to issue additional MMTC licenses to certain former DO applicants whose applications were "reviewed, evaluated, and scored by the Department" under the 2014 Law. § 381.986(8)(a) 2.a., Fla. Stat. (2017). The 2017 Law also retained (and moved) the requirement that applicants submit certified financial statements to the Department. § 381.986(8)(b) 7., Fla. Stat. (2017).
After the 2017 Law went into effect, TropiFlora filed a second amended complaint, this time seeking a declaratory judgment that TropiFlora, MariJ, and the Cathcarts, collectively, were entitled to MMTC licensure under the 2017 Law. TropiFlora contended that its application should have been scored by the Department in 2015 and if it were scored by the Department now, TropiFlora would be entitled to an MMTC license.
Then, in August 2018, while the declaratory judgment action was still pending, TropiFlora sent a formal request to the Department for MMTC licensure under the 2017 Law. The Department denied the request, and TropiFlora filed an administrative petition contesting that denial (the "2018 Petition"). In short, TropiFlora raised the same argument at issue in its circuit court action—that "but for" the Department's improper refusal to score its 2015 application, TropiFlora would be entitled to an MMTC license under the 2017 Law.
The Department dismissed TropiFlora's petition with prejudice and denied its request for MMTC licensure. The Department found that TropiFlora did not (and cannot) meet the criteria for MMTC licensure because its 2015 application was not "reviewed, evaluated, and scored," as required for MMTC licensure under the 2017 Law. The Department also concluded that by voluntarily dismissing its 2015 Petition, TropiFlora had waived any challenge to the Department's decision not to score its application. Although the final order included the statutorily required notice advising TropiFlora of its right to judicial review, TropiFlora let that right expire without filing an appeal.
About nine months later, the circuit court held a bench trial on TropiFlora's second amended complaint. In the end, the court concluded that TropiFlora was not entitled to relief based on five independent and alternative grounds. First, TropiFlora lacked standing to bring the action as an agent for MariJ and the Cathcarts. Second, TropiFlora's claim is barred by the doctrines of administrative finality and the exhaustion of administrative remedies. Third, TropiFlora does not and cannot satisfy the minimum statutory requirements for MMTC licensure under the 2017 Law. Fourth, the Department did not have to score incomplete applications. And fifth, the court could not compel the Department to score TropiFlora's application under the now-repealed 2014 Law. This appeal followed.
Of the five independent and alternative rulings of the trial court, we conclude that each was sufficient on its own to support an entry of final judgment in favor of the Department.
We turn first to the issue of standing; that is, whether TropiFlora could bring this action "as agent for" MariJ and the Cathcarts. Whether a party has standing is a pure question of law that we review de novo. McCarty v. Myers , 125 So. 3d 333, 336 (Fla. 1st DCA 2013). " Florida Rule of Civil Procedure 1.210(a), the real party in interest rule, ‘permits an action to be prosecuted in the name of someone other than, but acting for, the real party in interest.’ " Robinson v. Nationstar Mortg., LLC , 301 So. 3d 1059, 1062 (Fla. 2d DCA 2019) (quoting Russell v. Aurora Loan Servs., LLC , 163 So. 3d 639, 642 (Fla. 2d DCA 2015) ). The "real party in interest" is "the person in whom rests, by substantive law, the claim sought to be enforced." Fla. R. Civ. P. 1.210 cmt.
Here, TropiFlora sought to act as a nominal plaintiff, bringing the declaratory judgment action on behalf of or as the agent for MariJ and the Cathcarts. But the undisputed evidence showed that MariJ and the Cathcarts are not the real parties in interest. TropiFlora was the entity that applied for DO licensure in 2015, not MariJ or the Cathcarts. Neither MariJ nor the Cathcarts ever applied for a license. Nor could they, because they did not and cannot satisfy the requirements for either DO or MMTC licensure. Thus, individually, MariJ and the Cathcarts have no personal and individual stake in DO licensure, and the trial court correctly determined that TropiFlora cannot sue on their behalf. See Reibel v. Rolling Green Condo. A, Inc. , 311 So. 2d 156, 158 (Fla. 3d DCA 1975) ().
Even if TropiFlora had standing to sue on behalf of MariJ and the Cathcarts, we would affirm the order on appeal because TropiFlora failed to challenge all of the independent, alternative reasons the trial court relied on for granting final judgment in the Department's favor. See B.T. v. Dep't of Child. & Fams ., 300 So. 3d 1273, 1278–79 (Fla. 1st DCA 2020) ; see also Boggs v. Aetna Cas. & Sur. Co. , 341 So. 2d 1071, 1071 (Fla. 1st DCA 1977) (...
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