Persaud Properties FL Investments, LLC v. Town of Fort Myers Beach, Florida

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

FORT MYERS DIVISION

PERSAUD PROPERTIES FL

INVESTMENTS, LLC,

Plaintiff,

v. Case No: 2:21-cv-384-JLB-NPM

TOWN OF FORT MYERS BEACH,

FLORIDA, and ROGER

HERNSTADT,

Defendants.

ORDER

Plaintiff Persaud Properties FL Investments, LLC (“Persaud”) has sued the

Town of Fort Myers Beach Florida (the “Town”) and the Town Manager, Roger

Hernstadt (“Mr. Hernstadt”, and together with the Town, “Defendants”) for myriad

due process and equal protection violations stemming from the Town’s regulation of

Persaud’s use of its commercial property, the Sunset Beach Tropical Grill (“Tropical

Grill”). The Town and Mr. Hernstadt have moved to dismiss Persaud’s operative

complaint, and Persaud has responded. (Doc. 37; Doc. 40). After carefully

reviewing the record, the Court GRANTS Defendants’ Motion to Dismiss and

dismisses Plaintiffs’ Fourth Amended Complaint (Doc. 36) with prejudice.

BACKGROUND1

The Tropical Grill is a beachfront restaurant in the Town of Fort Myers

Beach. (Doc. 36 at ¶¶ 7–8). In 1974, the owners of the Tropical Grill received

zoning approval to serve alcohol on the property, including the beachfront portion of

the Tropical Grill, which stretched to the shoreline of the Gulf of Mexico. (Id. at ¶

8.) The owners thereafter obtained a Florida state license issued by the Division of

Alcoholic Beverages and Tobacco (“DABT”), permitting the service of alcohol on the

property, including the beach portion. (Id. at ¶ 9). In 1984, the Tropical Grill was

sold to a new owner, and included in that sale was the state alcohol license and its

attendant zoning approval to serve alcohol on the entirety of the Tropical Grill. (Id.

at ¶ 10).

In 1995, the Town was incorporated, and with its incorporation came the

enactment of various zoning regulations impacting the sale of alcohol on the land on

which the Tropical Grill sits. (Id. at ¶ 11). The new zoning regulations effectively

split the Tropical Grill into two parts. While the part of the property zoned in the

“Downtown” area received approval to serve alcohol, the beach area of the property,

zoned “Environmentally Critical,” did not. (Id. at ¶¶ 11–12). A portion of the

Town’s zoning regulations established that zoning approval to serve alcohol runs

with the land. (Id. at ¶ 11(c)(1)). Thus, upon the sale of a property, the Tropical

1 “At the motion to dismiss stage, all well-pleaded facts are accepted as true, and

the reasonable inferences therefrom are construed in the light most favorable to the

plaintiff.” Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1273 n.1 (11th Cir. 1999)

(citation omitted). Accordingly, this background section relies on the facts recited in

the Fourth Amended Complaint. (Doc. 36).

Grill retained its permission to serve alcohol on the entirety of the property. (Id.)

In 2012, the Town adopted Ordinance No. 12-03, which allowed current

property owners in possession of “prior state alcohol licenses and zoning approval to

serve alcohol on the beach” the option of having their property “grandfathered” in as

a “non-conforming use.” (Id. at ¶ 13). The Town’s Ordinance also prescribed that

“[n]onconforming uses may continue until there is an abandonment [of the

permitted location] for a continuous nine-month period.” (Id. at ¶ 11(c)(2)). The

owners of the Tropical Grill elected to maintain their rights from the 1974 zoning

approval and state license and continued to serve alcohol on the beach. (Id. at ¶

14).

Two years later, on July 31, 2014, Persaud purchased the Tropical Grill in a

sale which included the state liquor license and the grandfathered 1974 approval to

serve alcohol on the entire property, including the beach. (Id. at ¶ 17). Three

months after purchase, Persaud began extensive renovations on the property. (Id.

at ¶ 18). Persaud requested that the DABT temporarily suspend its liquor license

while the renovations were ongoing. (Id.) The DABT granted Persaud’s request

and placed its liquor license in inactive status. (Id.) But a four-month renovation

plan stretched to more than nine months of work due, at least in part, to the Town’s

issuance of multiple stop-work orders, “which resulted in the increased time

required for completion of the renovations.” (Id. at ¶¶ 19-21).

Persaud completed its extensive renovations to the Tropical Grill property

approximately a year later. (Id. at ¶ 21). But Persaud had to obtain the Town’s

approval to reinstate the liquor license and begin selling alcohol. (Id. at ¶ 22). The

Town, however, would not permit Persaud to resume the Tropical Grill’s liquor

sales unless Persaud limited such sales to the areas of the property zoned

“Downtown.” (Id. at ¶ 23). Pointing to an ordinance that deemed any

nonconforming liquor license “abandoned” if the property did not sell alcohol for

nine months, the Town deemed Persaud’s grandfathered liquor license abandoned.

(Id. at ¶¶ 11(c)(2), 23). Despite the Town’s prohibition on the sale of liquor on the

beach portion of the Tropical Grill, Persaud pushed forward to re-open the Tropical

Grill and applied for a state license limiting its sale of alcohol to the Downtown

zoned area of the property. (Id. at ¶ 27). The license was activated on October 22,

2015. (Id. at ¶ 28). But the story does not end there.

On March 28, 2017, Persaud sued the Town in state court. (Doc. 1-4 at 3.)

The Town removed the case to federal court, but the federal court remanded the

case back to state court because Persaud had not exhausted its state law remedies.

See Persaud Props. FL Invs., LLC v. Town of Fort Myers Beach, No. 2:17-cv-227-

FTM-99CM, 2017 WL 4868908, at *3 (M.D. Fla. Oct. 26, 2017). Subsequently,

Persaud filed an Amended Complaint, consisting solely of state law issues, in state

court. (Doc. 1-4 at 171).

The state trial court entered a judgment finding that the Town had properly

determined that Persaud had abandoned the nonconforming use of the property.

(Doc. 1-6 at 145). Persaud appealed, however, and in a well-reasoned opinion

authored by Judge Anthony Black, the Florida Second District Court of Appeal

reversed and remanded, holding that Persaud is “entitled, under the applicable

provisions of the Town’s municipal code, to maintain the property’s status as a

grandfathered nonconforming use.” (Id. at 234–35). The Second District Court of

Appeal reasoned that the plain language of the Town’s ordinance requires a

showing that Persaud intended to abandon its nonconforming use of the property—

the sale of alcohol at the Tropical Grill—“with the intent that the cessation of such

use be permanent.” (Id. at 234). And because there was no dispute that Persaud

did not intend to abandon its nonconforming use permit, the trial court’s entry of

summary judgment in favor of the Town was in error as a matter of law. (Id. at

234). The Second District Court of Appeal therefore vacated the trial court’s denial

of Persaud’s declaratory relief count and remanded to the trial court for entry of an

order granting Persaud judgment on its declaratory relief count. (Id. at 235). Then,

on February 26, 2021, the state trial court issued an order granting declaratory

relief to Persaud, and Persaud’s permission to sell liquor on the beach portion of its

property was restored. (Id. at 246).

Persaud alleges that just after it filed suit against the Town in state court,

“the Town launched a malicious, retaliatory, and orchestrated campaign” at the

direction of Town Manager, Mr. Hernstadt. (Doc. 36 at ¶ 37). Specifically, the

Town cited Persaud for numerous property violations related to signs, beach chairs,

and parking lots, levied hundreds of thousands of dollars’ worth of fines against

Persaud, and placed liens on Persaud’s property. (Id. at ¶¶ 38–39, 42). The

conflicts between Persaud and the Town over the signs and parking spaces took

similar form to Persaud’s dispute with the Town over the liquor license. Namely,

Persaud had been renting parking spaces to the general public and placing

instructional signs on his property pursuant to zoning variances that, Persaud

alleges, have not been honored by the Town. (Id. at ¶¶ 43–46). Further, Persaud

has applied for permits consistent with the variances, but the Town has either

denied its applications or granted it “special exceptions” that Persaud alleges placed

unreasonable and unduly burdensome restrictions on the use. (Id.) Finally,

Persaud rented beach chairs to the public believing that its license to the premises

entitled it to rent the chairs, but the Town fined Persaud for such rentals and

continues to fine Persaud even though Persaud has since abated any chair rental

violations. (Id. at ¶¶ 47–48.)

Although there is no dispute between the parties that the nonconforming use

permitting the sale of alcohol on the beach portion of the Tropical Grill was restored

upon entry of the trial court’s final judgment granting the declaratory relief

requested by Persaud, and at no time was it completely deprived of the ability to

sell alcohol at the Tropical Grill property, Persaud nevertheless continued with its

litigation. (Doc. 22 at ¶¶ 4–5).

On April 16, 2021, Persaud filed a Second Amended Complaint in state court,

seeking declaratory, injunctive, and monetary relief for the Town’s refusal to restore

its liquor license for the beach portion of the property upon the Tropical Grill’s

reopening after its renovations in 2015. (Doc. 3). The Town moved to dismiss and

simultaneously removed the case to this Court. (Doc. 4).

Persaud then filed a Third Amended Complaint in this Court, seeking

declaratory relief and damages against the Town under the Takings and Due

Process Clauses of the United States and Florida Constitutions. (Doc. 15). The

Town subsequently filed a Motion to Dismiss. (Doc. 22). The Court granted the

Town’s Motion to Dismiss and allowed Persaud leave to amend. (Doc. 35).

Persaud’s Fourth Amended Complaint is the operative complaint here. (See Doc.

36).

LEGAL STANDARD

Defendants have moved to dismiss Persaud’s Fourth Amended Complaint

with prejudice. (Doc. 37 at 1). The Court presumes, based on Defendants’

pleadings, that Defendants seek to dismiss the Complaint under Federal Rule of

Civil Procedure 12(b)(6), although Defendants have not explicitly cited that rule.

Rule 12(b)(6) provides a defense to a claim for relief based on the moving party’s

failure to state a claim. See Fed. R. Civ. P. 12(b)(6).

When considering a Motion to Dismiss under Rule 12(b)(6), the Court must

accept all of the allegations set forth in the Complaint as true and draw all

reasonable inferences in the light most favorable to the Plaintiff. Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 555–56 (2007). Still, a Complaint offering mere “labels and

conclusions” or “a formulaic recitation of the elements of a cause of action” is

insufficient. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quotation omitted).

“[C]onclusory allegations, unwarranted deductions of facts or legal conclusions

masquerading as facts will not prevent dismissal.” Oxford Asset Mgmt., Ltd. v.

Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002). Put in the affirmative, a complaint

must “contain sufficient factual matter, accepted as true, to state a claim to relief

that is plausible on its face,” and the plaintiff must plead “factual content that

allows the court to draw the reasonable inference that the defendant is liable for the

misconduct alleged.” Iqbal, 556 U.S. at 678 (quotation marks and citations

omitted).

Even if the likelihood of the Plaintiff’s recovery appears minimal, a complaint

may nevertheless survive a Motion to Dismiss under Rule 12(b)(6), so long as the

Plaintiff alleges sufficient facts such that it is reasonable to expect that discovery

will lead to evidence supporting the claim. Twombly, 550 U.S. at 556; Iqbal, 556

U.S. at 678. At bottom, a motion to dismiss for failure to state a claim merely tests

the sufficiency of the complaint, and it does not decide the merits of the case.

Milburn v. U.S., 734 F.2d 762, 765 (11th Cir. 1984).

DISCUSSION

Persaud brings two claims against each of the Defendants. Against the

Town, Persaud first brings a claim for due process violations under the United

States and Florida Constitutions. (Doc. 36 at ¶¶ 51–57). Persaud also brings a

claim alleging that the Town violated his rights under the Equal Protection Clause

of the Fourteenth Amendment to the United States Constitution. (Id. at ¶¶ 58–78).

Against Mr. Hernstadt, Persaud brings a claim for due process violations under

Article I, Section 9 and Article X, Section 6(a) of the Florida Constitution as well as

a claim for violations of the Equal Protection Clause of the Fourteenth Amendment

to the United States Constitution. (Id. at ¶¶ 79–106.)

I. Persaud’s claims for due process violations under the United

States and Florida Constitutions (Counts I and III) are due to be

dismissed.

Persaud brings claims of due process violations under the United States and

Florida Constitutions against the Town, as well as claims of due process violations

under the Florida Constitution against Mr. Hernstadt. The basic due process

guarantee of the Florida and United States Constitutions is that no person shall be

deprived of life, liberty, or property by the government without due process of law.

U.S. Const., amend. XIV, § 1; Fla. Const. art. I, § 9. Because of the significant

similarities between the due process clauses of the United States and Florida

Constitutions, they can be analyzed together. See Dep’t of Law Enforcement v. Real

Prop., 588 So. 2d 957, 960 (Fla. 1991) (explaining that under both the Florida

Constitution and the United States Constitution, “procedural due process serves as

a vehicle to ensure fair treatment through the proper administration of justice

where substantive rights are at issue”) (citing State ex rel. Gore v. Chillingworth,

126 Fla. 645, 657–58 (1936) and Fuentes v. Shevin, 407 U.S. 67, 80 (1972)).

“Procedural due process imposes constraints on governmental decisions

which deprive individuals of ‘liberty’ or ‘property’ interests within the meaning of

the Due Process Clause.” Mathews v. Eldridge, 424 U.S. 319, 333 (1976). The Due

Process Clause requires “that a deprivation of life, liberty or property be preceded

by notice and opportunity for hearing appropriate to the nature of the case.”

Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 542 (1985) (quotation mark

omitted). “The government must provide the required notice and opportunity for a

hearing at a meaningful time and in a meaningful manner, although the notice and

hearing may be postponed until after the deprivation has occurred.” Catron v. City

of St. Petersburg, 658 F.3d 1260, 1266 (11th Cir. 2011) (quotation mark and citation

omitted).

A procedural due process claim requires a plaintiff to prove a deprivation of a

constitutionally protected interest, state action, and constitutionally inadequate

process. Grayden v. Rhodes, 345 F.3d 1225, 1232 (11th Cir. 2003). Due process “is

a flexible concept that varies with the particular circumstances of each case.” Id.

Courts must account for three distinct factors in identifying “the specific dictates of

due process.” Mathews, 424 U.S. at 335. These are: (1) “the private interest that

will be affected by the official action”; (2) “the risk of an erroneous deprivation of

such interest through the procedures used, and the probable value . . . of additional

or substitute procedural safeguards”; and (3) “the Government’s interest, including

the function involved and the fiscal and administrative burdens that the additional

or substitute procedural requirement would entail.” Id. (citation omitted).

Here, Persaud alleges that its private interest was its “right to use its State

License for the sale of alcohol at the Property for the entire Property under the non-

conforming use provisions of the Land Development Code.” (Doc. 36 at ¶52.)

Persaud alleges that the Town deprived it of this right and “failed to follow the

procedures mandated in [the Town’s Development] Code prior to revoking Persaud’s

grandfathered use,” and Mr. Hernstadt “limit[ed] Persaud’s use of its State License

at the Property and depriv[ed] Persaud of its right to the full use of its State License

at the Property.” (Id. at ¶¶ 56, 81.) Following the analyses outlined in Grayden and

Mathews, the Court must first determine whether Persaud’s liquor license

constitutes a property interest.

A. There is no indication that administrative approval to sell alcohol

via a non-conforming use is a constitutionally cognizable property

interest.

As the Eleventh Circuit has instructed, “[p]roperty interests subject to

procedural due process protection are not limited by a few rigid, technical forms.

Rather, property denotes a broad range of interests that are secured by existing

rules or understandings.” Barnes v. Zaccari, 669 F.3d 1295, 1303 (11th Cir. 2012)

(citation omitted). The Constitution does not enumerate particular property

interests; instead, such property interests are created or recognized by “independent

source[s] such as state law.” Town of Castle Rock v. Gonzalez, 545 U.S. 748, 756

(2005) (citations omitted).

Here, the Municipal Code of the Town of Fort Myers Beach provides that

“[t]he sale or service of alcoholic beverages for consumption on the premises shall

not be permitted until such location has been approved by the town.” Fort Myers

Beach, Fla., Code § 34-1264(a) (2022). “The director may administratively approve

the sale or service of alcoholic beverages for consumption on the premises” when

certain circumstances are present. Id. at § 34-1264(a)(1). But “[w]hen

circumstances so warrant the director may determine that administrative approval

is not the appropriate action and that the applicant must instead apply for approval

as a special exception.” Id.

Persaud has not directed the Court towards any case law supporting its

argument that administrative approval of the sale or service of alcoholic beverages

for consumption on the entirety of its premises is a property right or interest under

Florida law. The Court cannot find support for this contention either. As the Court

indicated in its earlier Order, government permission to sell alcohol is generally not

a recognized property right. (See Doc. 35 at 12–13.) The Supreme Court of Florida

has determined that “[a] liquor license is not property in a constitutional sense. It

is a pure privilege to engage in a business that would otherwise be unlawful.”

Holloway v. Schott, 64 So. 2d 680, 681 (Fla. 1953); see also U.S. v. McGurn, 596 So.

2d 1038, 1041 (Fla. 1992) (“We emphasize that a liquor license is not like other

‘general intangibles’ because it is issued as a matter of privilege, not as a matter of

right, by the government, and the government has total control of its use”); see also

Walling Enterprises, Inc. v. Mathias, 636 So. 2d 1294, 1296–97 (Fla. 1994) (“This

Court has specifically determined that a liquor license is not property in a

constitutional sense”) (quotation omitted). And while it is true that older Florida

caselaw has recognized certain property rights in liquor licenses in the commercial

context, see Kline v. State Beverage Dep’t, 77 So. 2d 872, 874 (Fla. 1955) (suggesting

that “a liquor license has come to have the quality of property”), Florida courts have

taken care to distinguish the commercial context from the constitutional. See

Yarbrough v. Villeneuve, 160 So. 3d 747, 747–48 (Fla. 1st DCA 1964) (holding that

while a liquor license has been recognized as property “in the commercial sense,” a

liquor license “under the laws of this state is but the grant of a privilege which

confers no vested rights in the licensee and as such is not property in the

constitutional sense”); see also Walling, 636 So. 2d at 1297 (noting that while a

liquor license possesses the “quality of property,” merely having property-like

attributes does not mean that a liquor license can be treated like property in all

circumstances and holding that a liquor license could not be considered property for

purposes of a landlord’s possessory lien”). In sum, the Court cannot find, nor has it

been directed to, a single Florida case stating that a liquor license constitutes a

constitutionally cognizable property right.2

Finally, in Lexra, Inc. v. City of Deerfield Beach, Fla., the Eleventh Circuit,

applying Walling, held that “a bar’s license to sell alcohol is not a property interest

in Florida for the purposes of a constitutional claim.” 593 F. Appx. 860, 864 (11th

Cir. 2014). In Lexra, several bars brought suit against the City of Deerfield Beach

after they became subject to a local municipal ordinance, which prevented the sale

of liquor past 2 a.m. Id. at 861. The bars, which had formerly been able to serve

2 It is also worth noting that Florida courts have held in all sorts of contexts that

administrative approval to conduct some privileged activity is not a protected

property interest. See Lite v. State, 617 So.2d 1058, 1060 (Fla. 1993) (explaining in

the context of driver’s licenses that “there is no property interest in possessing a

driver’s license. Rather, driving is a privilege and can be taken away or

encumbered as a means of meeting a legitimate legislative goal”); Sickon v. Sch. Bd.

of Alachua Cnty., Fla., 719 So.2d 360, 366 n.9 (11th Cir. 1998) (holding that a school

board did not deprive a band teacher of any right to property when the principal did

not renew the teacher as the band director—a title she had held in the previous

academic year); Reserve, Ltd. v. Twn. of Longboat Key, 933 F.Supp. 1040, 1043–44

(M.D. Fla. 1996) (holding that the purported property interest—a building permit

that had been revoked—was “created by state law and falls comfortably short of a

fundamental right”).

alcoholic beverages until 4 a.m., asserted that the local ordinance was a violation of

their Fourteenth Amendment procedural due process rights because it had deprived

them of the full use of their liquor licenses without notice. Id. Holding that because

the bar owners had not asserted a protected property interest which could be

deprived by the city, the Eleventh Circuit found that “Florida law does not provide a

basis for Appellants’ due-process theory.” Id. at 864. That is, because Florida law

does not support constitutionally protected property rights in a liquor license, a

procedural due process claim based on the deprivation of such alleged property

interests fails as a matter of law. See id. (holding the district court did not err in

dismissing such a claim).

A recent case from Florida’s Second District Court of Appeal is particularly

instructive. In Gulf Coast Trans., Inc. v. Hillsborough Cnty., a taxi company was

given property rights in its taxi medallion under special legislation authored by the

Hillsborough County in 2012, but in 2017, the County enacted a new regulation

scheme for the taxi business which “did not recognize or grandfather in medallions

issued by the PTC.” 352 So. 3d 368, 373 (Fla. 2d DCA 2022). Owners of the taxi

medallions challenged the new regulations arguing that they had rendered their

taxi medallions worthless and thereby constituted a deprivation of a

constitutionally protected property interest. Id. The court held that the taxi

drivers did not have a property interest in the medallions because the “property

interest in the medallions did not exist prior to the regulation of the taxicab

industry; rather the 2012 special legislation created an interest that would not

otherwise exist without it.” Id. at 381. Recognizing that to determine whether a

person has a property interest for purposes of the Due Process Clause, courts must

“look behind labels,” the Second District Court of Appeal found that even though the

legislature had declared the medallions to be personal property, that did not make

the medallions cognizable, constitutionally-protected property interests. Id. at 375

(citation omitted). “Government regulation involves the adjustment of rights for the

public good which often curtails some potential for the use or economic exploitation

of private property,” the Court held. Id. at 377 (quoting Andrus v. Allard, 444 U.S.

51, 65 (1979)).

Here, Persaud’s liquor license was administratively approved as a result of a

regulatory scheme put in place in 2012, when the Town adopted an ordinance

providing that “current property owners holding prior state alcohol licenses and

zoning approval . . . to comply with the [Town]’s new regulations or be

grandfathered as a non-conforming use.” (Doc. 36 at ¶ 13). Beginning in 2014,

Persaud suspended its liquor license for over a year, and in 2015, when it sought

the Town’s approval to reinstate its liquor license, the Town refused to grant

permission to sell alcohol on the beach portion of its property. (Id. at ¶¶ 18, 23).

But administrative approval to sell alcohol on the beach portion of Persaud’s

property is not a protected property interest under Florida law. Like the owners of

the taxi medallions in Gulf Coast Trans., Persaud had a license or privilege created

by a regulatory scheme, but it did not have a constitutionally cognizable right to

that license. Without legal authority supporting the notion that administrative

approval for liquor license is a property interest, the Court cannot find that

deprivation of non-conforming use permit violates the due process clause of either

the Florida Constitution or the United States Constitution.

B. Even if administrative approval to sell alcohol via a non-

conforming use constitutes a property interest, Persaud has failed

to state a cognizable claim that it was deprived of procedural due

process.

Even if a non-conforming use is a protected property interest, there is no

indication that Persaud was denied due process. Section 34-1264(i) of the Town of

Fort Myers Beach’s Code provides that the town council has the authority to revoke

an alcoholic beverage special exception on a number of different grounds. Further,

[P]rior to revoking an administrative approval, special exception, or

other approval for alcoholic beverages, the town council shall conduct a

public hearing at which the permit holder may appear and present

evidence and testimony concerning the proposed revocation. At the

hearing, the town council may revoke the permit if a violation

described in this subsection is established by a preponderance of the

evidence. The permit holder shall be notified of the grounds upon

which revocation is sought prior to any hearing, and shall be given

notice of the time and place of the hearing in the same manner as set

forth in article II of this chapter.

Section 34-1264(i)(2). After Persaud suspended its liquor license for more than a

year to finish construction on its property, Persaud requested that the Town

reinstate its liquor license. (Doc. 36 at ¶ 21). The Town refused to do so unless

Persaud agreed to limit the sale of alcohol to the portion of its property zoned in the

Downtown area. (Id. at ¶ 23.) Persaud argues that it did not receive fair notice or

an adequate opportunity to be heard as to the Town’s decision. (Id. at ¶¶ 25–26.) It

filed suit in state court, and on appeal, Persaud was granted declaratory judgement

that it was entitled to maintain the property’s status as a grandfathered

nonconforming use. (Id. at ¶¶ 32–34.) It is difficult to discern how this resulted in

a lack of due process for Persaud. See Dibbs v. Hillsborough Cnty., 67 F. Supp. 3d

1340, 1354 (M.D. Fla. 2014) (“The existence of a state judicial procedure to review,

remand, and/or set aside agency decisions, . . . and to [o]rder such ancillary relief as

the court finds necessary . . . is sufficient to redress [the plaintiff] for the

deprivation alleged and is sufficient to satisfy the Fourteenth Amendment’s Due

Process Clause.”) (citation omitted).

As the Eleventh Circuit held in McKinney, “the appropriate forum for

addressing [plaintiff]’s claim is . . . Florida state court possessing the ability to

remedy the alleged procedural defect.” 20 F.3d at 1561. In fact, where, as here, a

party is entitled as a matter of right to seek review in state court, the state court

“must determine whether procedural due process is accorded . . . [and] whether the

administrative findings and judgment are supported by competent substantial

evidence.” City of Deerfield Beach v. Vaillant, 419 So.2d 624, 626 (Fla. 1982)

(emphasis added). Here, the scope of the Florida courts’ review encompassed the

claim Persaud now brings in federal court—that he was denied procedural due

process because he did not receive fair notice or an adequate opportunity to be

heard before the Town refused to approve Persaud’s liquor license. Thus, even if

administrative approval of a liquor license constituted a property right, appeal to

the state court allowed Persaud to pursue all the relief warranted and, ultimately,

did provide Persaud with all of the relief warranted.

Again, Persaud received declaratory judgment from the state appellate court

that it did not abandon its non-conforming use of the property and that it could

continue selling alcohol on the beach portion of the property. The case was then

remanded to the state trial court. But before (and instead of) pursuing remedies

there, Persaud filed suit in this Court. This move was dubious because the state

remedies to which Persaud was clearly directed by the Florida District Court of

Appeal were due to be provided to him by the Florida trial court on remand. The

existence of such “satisfactory state remed[ies] mandates that [this Court] find that

no procedural due process violation occurred.” McKinney, 20 F.3d at 1564.

Accordingly, Persaud’s procedural due process claim against the Town under the

United States Constitution is due to be dismissed.

II. Persaud’s claims asserting that the Town and Mr. Hernstadt

violated his rights under the Equal Protection Clause (Counts II

and IV) are due to be dismissed.

Persaud alleges that the Town and Mr. Hernstadt violated Persaud’s

Fourteenth Amendment right to equal protection under the law by not treating

Persaud “equally as other similar residents of the Town.” (Doc. 36 at ¶¶ 58–78, 86–

106). These claims appear to pertain to the sign violations, beach chair rental

violations, and parking lot violations introduced by Persaud for the first time in this

Fourth Amended Complaint. (See id. at ¶ 42.) Defendants move to dismiss these

claims asserting that Persaud has failed to establish any similarly situated

comparators, Mr. Hernstadt is protected by qualified immunity, and Persaud’s

claims are barred by the statute of limitations. (Doc. 37 at 12–20). The Court finds

that Persaud has failed to state a prima facie “class of one” equal protection claim,

and accordingly, these new claims are due to be dismissed.

A. Persaud’s class of one equal protection claim against the Town is

due to be dismissed because Persaud has failed to identify any

similarly situated individuals who were allegedly treated more

favorably by the Town.

A “class of one” equal protection claim does not allege discrimination against

a protected class, but rather asserts that the plaintiff “has been intentionally

treated differently from others similarly situated and that there is no rational basis

for the difference in treatment.” Young Apts., Inc. v. Town of Jupiter, Fla., 529 F.3d

1027, 1032 n.1 (11th Cir. 2008) (quotation omitted). To prove a “class of one” claim,

the plaintiff must show (1) that he was treated differently from other similarly

situated individuals, and (2) that the defendant unequally applied a facially neutral

ordinance for the purpose of discriminating against him. Id. at 1045. That is, the

plaintiff alleges that it has been intentionally treated differently from others

similarly situated and that there is no rational basis for the difference in treatment.

See Sioux City Bridge Co. v. Dakota Cnty., 260 U.S. 441, 445 (1923). Here,

Persaud’s “class of one” claims against the Town and Mr. Hernstadt fail to meet

either requirement.

With respect to the first prong, the Eleventh Circuit has held that the

“similarly situated” requirement must be rigorously applied in the context of class

of one claims. Douglas Asphalt Co. v. Qore, Inc., 541 F.3d 1269, 1275 (11th Cir.

2008). Employing “[t]oo broad a definition of ‘similarly situated’ could subject

nearly all state regulatory decisions to constitutional review in federal court and

deny state regulators the critical discretion they need to effectively perform their

duties.” Griffin Indus. v. Irvin, 496 F.3d 1189, 1203 (11th Cir. 2007). Plaintiffs are

not permitted to “rely on broad generalities in identifying a comparator.” Id. at

1204. The Eleventh Circuit has made it clear that to be deemed similarly situated,

a plaintiff must demonstrate that it “and [its] proffered comparators were similarly

situated in all material respects.” Lewis v. City of Union City, Ga., 918 F.3d 1213,

1218 (11th Cir. 2019).

Persaud’s class of one claim falls short. Indeed, Persaud’s Complaint makes

only the barest conclusory assertion that he is “not being treated equally as other

similar residents of the [Town].” (Doc. 36 at ¶¶ 60, 88). Persaud believes that it

was discriminated against because “the [Town] has not treated anyone else in a

similar situation in a similar manner.” (Id. at ¶ 60). And “Persaud is being

intentionally treated differently from others similarly situated and the City has

substantial knowledge of these facts.” (Id. at ¶ 61). Nowhere, does Persaud allege

who its similarly situated comparators are or in what sense they are similarly

situated. The only thing that comes close to an allegation of a proffered comparator

is a list of four other commercial properties in the Town who were allegedly granted

permission from the Town to transfer their watersports vendor licenses. (Id. at ¶

47). But Persaud’s class of one equal protection claims pertain to sign violations,

beach chair rental violations, and parking lot violations, not to an inability to

transfer watersports vendor licenses. Thus, these businesses do not qualify under

the “nearly identical” or “same or similar” standards. Because Persaud has failed to

identify similarly situated comparators that were treated differently than Persaud,

Persaud has failed to make out a prima facie case for class of one discrimination

under the equal protection clause. See Lewis, 918 F.3d at 1231. Persaud’s claim for

equal protection clause violations against the Town are therefore due to be

dismissed.

B. Persaud’s class of one equal protection claim against Mr.

Hernstadt is also due to be dismissed because Mr. Hernstadt is a

public official entitled to qualified immunity.

Defendants have also moved to dismiss Persaud’s equal protection violation

claims against Mr. Hernstadt arguing that Mr. Hernstadt is entitled to qualified

immunity. Where a qualified immunity defense is asserted, courts must first

address such a defense before proceeding to defendant’s alleged liability for the

underlying constitutional claims. See Jacoby v. Baldwin Cnty., 835 F.3d 1338,

1343–44 (11th Cir. 2016). Qualified immunity shields public officials from civil

damages “as long as their actions could reasonably have been thought consistent

with the rights they are alleged to have violated.” Anderson v. Creighton, 483 U.S.

635, 638 (1987). It is uncontested that Mr. Hernstadt, as the Town Manager of Fort

Myers Beach, Florida, is a public official. (See Doc. 37 at 15–18; Doc. 40 at 15.)

“An official asserting that he is entitled to the protection of qualified immunity

must initially establish that he was acting within the scope of his discretionary

authority when the allegedly wrongful acts occurred.” Griffin Indus., Inc. v. Irvin,

496 F.3d 1189, 1199 (11th Cir. 2007). Once this showing has been made, the burden

shifts to the plaintiff. Id. Here, Persaud has not disputed that Mr. Hernstadt was

acting within the scope of his discretionary authority, (see Doc. 40 at 15), so Persaud

bears the burden of overcoming Mr. Hernstadt’s qualified immunity defense.

To defeat a public official’s qualified immunity defense, a plaintiff must

demonstrate first, that the defendant violated a constitutional right and second,

that the violation was clearly established. McClish v. Nugent, 483 F.3d 1231, 1237

(11th Cir. 2007). “If the official did not violate the law, the inquiry ends.” Griffin

Indus., 496 F.3d at 1200. And “[o]nly when the official violated the law and the

illegality of his conduct was clearly established must the court deny him the

protection of qualified immunity.” Id. (citing Vinyard v. Wilson, 311 F.3d 1340,

1355 (11th Cir. 2002)).

Here, there is no indication that Mr. Hernstadt violated the law in the first

instance. Persaud argues that Mr. Hernstadt enforced fines on Persaud for its sign,

beach chair, parking violations in a discriminatory manner and “based on animus

towards Persaud.” (Doc. 36 at ¶¶ 90–91). Persaud offers no substantiation for

these claims, however. As discussed above, Persaud has failed to make even the

barest allegation that it was treated differently than any other business on Fort

Myers Beach because it has not identified a single, comparable business that was

allegedly treated more favorably by the Town and Mr. Hernstadt with respect to

liquor licenses, beach chair rentals, signs, or parking. Ultimately, mere speculation

is insufficient to establish a constitutional violation. See Edwards v. Prime, Inc.,

602 F.3d 1276, 1291 (11th Cir. 2010) (explaining that a complaint must allege facts

from which the inference of a constitutional violation is plausible, not merely

speculative); McDowell v. Brown, 392 F.3d 1288, (11th Cir. 2004) (“To hold a

municipality liable for any conceivable constitutional violation, whether based on

past concrete injury or mere speculation, would erode its ability to manage and

govern.”). Accordingly, Persaud’s equal protection violation claim against Mr.

Hernstadt is also due to be dismissed.

CONCLUSION

For the foregoing reasons, Defendants’ Motion to Dismiss is GRANTED.

Persaud’s Fourth Amended Complaint is DISMISSED with prejudice. The Clerk

is DIRECTED to TERMINATE all existing deadlines and CLOSE the file.

Ordered at Fort Myers, Florida on February 21, 2023.

PLD bhallbwL:

JOHN L. BADALAMENTI

UNITED STATES DISTRICT JUDGE

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