Zen Group, Inc. v. State of Florida Agency for Health Care Administra ( 2023 )

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[PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-10319
____________________
ZEN GROUP, INC.,
CARLOS OTAMENDI,
Plaintiffs-Appellants,
versus
STATE OF FLORIDA AGENCY FOR HEALTH
CARE ADMINISTRATION,
SECRETARY, STATE OF FLORIDA, AGENCY
FOR HEALTH CARE ADMINISTRATION,
KELLY BENNETT,
individually and in her official capacity as
Chief of the Office of Medicaid Program
Integrity within the State of Florida, Agency
for Health Care Administration,
SHEVAUN HARRIS,
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2 Opinion of the Court 22-10319
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 1:20-cv-23218-DPG
____________________
Before WILLIAM PRYOR, Chief Judge, and LUCK and HULL, Circuit
Judges.
WILLIAM PRYOR, Chief Judge:
This appeal involves alleged retaliation by officials of the
Florida Agency for Health Care Administration against Zen Group,
Inc., a Medicaid provider. Zen Group asserts that the officials made
baseless referrals for investigation of fraud and suspended pay-
ments to Zen Group in retaliation for its previous exercise of its
constitutional rights in an administrative proceeding. Zen Group
complained that the officials’ retaliation violated its due-process
right under the Fourteenth Amendment and its speech and petition
rights under the First Amendment. It sought both damages and in-
junctive relief. The district court dismissed the complaint. We hold
that Zen Group’s due-process and First Amendment claims for
damages are both barred by qualified immunity. And Zen Group
lacks standing to seek injunctive relief. So we affirm.
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22-10319 Opinion of the Court 3
I. BACKGROUND
Zen Group, Inc., is “a Florida Medicaid provider of services
to developmentally-disabled minors.” Carlos Otamendi is its
owner. Zen Group alleges that beginning in 2018, the Florida
Agency for Health Care Administration wrongfully attempted to
recoup payments rendered under the Agency’s “Behavior Analysis
[S]ervices [P]rogram.” In its final audit report, the Agency de-
manded more than $1.5 million from Zen Group. The Agency con-
cluded that it had overpaid Zen Group by more than $1.3 million
for services not covered under Medicaid. The Agency determined
that the Zen Group employees who rendered the services at issue
were not qualified or had not properly documented their qualifica-
tions. It also assessed a fine of $276,067.95 for failing to furnish
proper records and filing an improper claim. See FLA. ADMIN. CODE
r. 59G-9.070(7)(c), (e). The Agency explained that it intended to
withhold payments for Medicaid services if necessary to cover the
recoupment and fine. The report advised Zen Group of its right
under state law to request an administrative hearing.
Zen Group filed a petition for a formal hearing to challenge
the recoupment and fine. Zen Group alleged that the Agency had
wrongfully issued “overpayment demands based on newly-created
retroactively-applied provider qualification[] [requirements].” Dur-
ing the administrative proceedings, Zen Group served the Agency
with a motion for sanctions. But the Agency enjoyed a 21-day safe-
harbor period before the motion could be publicly docketed. See
FLA. STAT. § 57.105(4). Within that period, the parties settled.
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4 Opinion of the Court 22-10319
Under the terms of the settlement, the Agency paid Zen Group
about $667,000 of the funds it had withheld.
According to Zen Group, the Agency officials—particularly
Kelly Bennett, Chief of the Office of Medicaid Program Integ-
rity—retaliated against Zen Group for its administrative challenge
and for its criticism of the Agency in its motion for sanctions. The
day after the Agency paid the withheld funds, Zen Group asserts,
Bennett “embarked on a course of conduct to retaliate against Zen
Group and to put Zen Group out of business.” The Agency notified
Zen Group that it was being investigated for fraud and that “gen-
eral allegations [against Zen Group] include[d] billing for services
not rendered.” Zen Group maintains that it “did not in fact commit
any fraud and [the Agency] and Defendant Bennett were aware
that Zen Group did not commit any fraud.” It further asserts that
it provided “[d]ocumentary and testimonial evidence” to the inves-
tigator that “establishe[d] Zen Group did not commit any fraud.”
Zen Group received periodic updates from the Medicaid
Fraud Control Unit of the Florida Attorney General’s Office, which
is responsible for determining whether prosecution is warranted.
See FLA. STAT. § 409.920(9)(d). In February 2020, the assigned inves-
tigator told Zen Group that “[e]veryone in the Chain of Command
ha[d] Approved the Closing [of the investigation] for Lack of Evi-
dence.” They awaited the approval of only the Chief Assistant At-
torney General. In the meantime, the Unit received two new fraud
referrals from the Agency’s Office of Medicaid Program Integrity.
One referral related to the fraud claim that had previously been
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settled. The other referral related to billings for a single patient in
2017.
During the pendency of the allegedly retaliatory investiga-
tions, “the Agency [again] suspended Medicaid payments to Zen
Group.” Federal regulations provide that “[t]he State Medicaid
agency must suspend all Medicaid payments to a provider after the
agency determines there is a credible allegation of fraud for which
an investigation is pending.” 42 C.F.R. § 455.23(a)(1). Zen Group
continued “providing services to Medicaid patients without receiv-
ing payment from [the Agency].” From January 10 to April 15,
2020, it allegedly “accumulate[d] over $1,000,000 in accounts re-
ceivable from the Agency.” Eventually, the payment suspension
took a financial toll on Zen Group. On April 15, Zen Group had to
suspend its services. Zen Group alleges that it “completely ceased
operations” on June 1 but “remain[ed] a Florida Medicaid provider
subject to” the Agency’s authority.
On July 1, an assistant attorney general emailed counsel for
Zen Group requesting information “pertaining to a ‘list of individ-
uals and dates’ compiled by the [Fraud Control Unit].” Zen Group
alleges that the requested information “ha[d] nothing to do with
any of the three fraud referrals from [the Agency] that Zen Group
ha[d] been made aware of.” It inferred that the Agency had made a
“fourth separate referral.”
On August 3, Zen Group filed a complaint in the district
court against three defendants: the Agency for Health Care Admin-
istration; Mary Mayhew, Secretary of the Agency; and Kelly
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6 Opinion of the Court 22-10319
Bennett, Chief of the Office of Medicaid Program Integrity. On
August 21, Bennett informed Zen Group that the investigation was
closed and “[t]he Agency [was] hereby discontinuing the payment
suspension.” Zen Group described the reversal as “far too little, far
too late.”
Zen Group then filed an amended complaint. It alleged that
its payments should not have been suspended because there was no
credible allegation of fraud. The amended complaint raised six
claims, including a violation of the Fourteenth Amendment’s Due
Process Clause and a violation of the First Amendment’s Free
Speech and Petition Clauses. It sought money damages and injunc-
tive relief for both of those claims. The district court dismissed
both claims for failure to state a claim.
Zen Group appealed. After oral argument, we requested
that the parties submit supplemental briefing on the question of
whether Zen Group had standing to seek injunctive relief. We also
invited the Attorney General of Florida to file a brief as amicus cu-
riae addressing standing as well as the merits.
II. STANDARD OF REVIEW
We review de novo a dismissal for failure to state a claim. Ho-
ever v. Marks, 993 F.3d 1353, 1357 (11th Cir. 2021) (en banc). And
we “may affirm on any ground supported by the record, regardless
of whether that ground was relied upon or even considered be-
low.” PDVSA US Litig. Tr. v. LukOil Pan Ams. LLC, 65 F.4th 556, 562
(11th Cir. 2023).
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III. DISCUSSION
We divide our discussion into three parts. First, we explain
that Zen Group’s request for damages for retaliation in violation of
the Due Process Clause is barred by qualified immunity. Second,
we explain that its request for damages under the First Amendment
is also barred by qualified immunity. Finally, we explain that Zen
Group lacks standing to seek injunctive relief.
A. Zen Group’s Request for Damages for Retaliation Under the Due Pro-
cess Clause is Barred by Qualified Immunity.
Zen Group asserts that officials violated its right to be free
from retaliation after it exercised its right under the Due Process
Clause of the Fourteenth Amendment. See U.S. CONST. amend.
XIV, § 1. The officials allegedly retaliated—by making a “baseless
fraud referral” and suspending Medicaid payments—after Zen
Group exercised its due-process right by administratively challeng-
ing the Agency’s recoupment demand and civil fine. The district
court dismissed this claim because it concluded that Zen Group
had failed to assert any due-process right underlying its retaliation
claim: because Zen Group did not have a protected “property in-
terest in the money the Agency paid to Zen Group [for Medicaid
services],” Zen Group had no due-process right to bring an admin-
istrative challenge in the first place. And absent this due-process
right, Zen Group could not state a claim that the officials had retal-
iated after it had exercised any constitutional right.
We disagree with the district court in part. Zen Group did
have a predeprivation right to due process to challenge the
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8 Opinion of the Court 22-10319
Agency’s imposition of a civil fine. But because neither the Su-
preme Court nor we have held that there is a separate constitu-
tional right to be free from retaliation for the exercise of a due-pro-
cess right, Zen Group’s claim is barred by qualified immunity.
Zen Group’s petition for administrative review was an exer-
cise of its due-process right because, at a minimum, it had a consti-
tutional right to challenge a $276,067.95 civil fine. Zen Group
sought “[a] finding that the Agency abused its discretion and acted
arbitrarily in imposing a fine in the amount of $276,067.95.” The
Agency assessed the fine on the ground that Zen Group had com-
mitted “violation(s) of Medicaid policy [that] constitute[d] fraud or
abuse” under Florida law. And the Agency assessed that fine over
and above the value of the $1.3 million in Medicaid overpayments it
sought to recoup. The assessment of the $276,067.95 fine threat-
ened to invade a cognizable property interest distinct from the
overpayments: Zen Group’s money.
To be clear, we need not decide whether Zen Group had a
property interest in the $1.3 million in disputed overpayments sub-
ject to recoupment. Like our concurring colleague, we recognize
that other circuits have ruled that providers lack a property interest
in Medicaid payments subject to recoupment or final administra-
tive review. See Pers. Care Prods., Inc. v. Hawkins, 635 F.3d 155, 159
(5th Cir. 2011); Yorktown Med. Lab’y, Inc. v. Perales, 948 F.2d 84, 89
(2d Cir. 1991). But those decisions address only whether providers
have a cognizable interest in “reimbursements . . . withheld pending
a fraud investigation”—not whether an additional fine deprives a
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provider of a property interest. Pers. Care Prods., 635 F.3d at 158 (em-
phasis added); see also Yorktown, 948 F.2d at 89 (finding that provid-
ers had no property interest in “[Medicaid] payment[s] for services
rendered”).
Zen Group had at least a due-process right to challenge a
$276,067.95 fine because the fine would deprive Zen Group of
money on top of the recoupment of Medicaid payments for services
rendered. See FLA. ADMIN. CODE r. 59G-9.070(7) (treating separately
recoupment and the imposition of sanctions). And Zen Group’s ad-
ministrative hearing request represented its final opportunity to
challenge the assessed fine. Because Florida had issued a Final Audit
Report, only ministerial steps remained before the fine would be
levied. The Final Audit Report informed Zen Group that it had 21
days to initiate an administrative hearing before any challenge was
“waived” and sanctions became “conclusive and final.” See also FLA.
ADMIN. CODE r. 59G-9.070(2) (defining sanctions as “imposed”
upon the filing of a Final Order with the Agency Clerk—a ministe-
rial task—after a final audit report is issued).
Florida may not “deprive any person of life, liberty, or prop-
erty, without due process of law.” U.S. CONST. amend. XIV, § 1. The
Supreme Court has recognized that “[its] precedents establish the
general rule that individuals must receive notice and an oppor-
tunity to be heard before the Government deprives them of prop-
erty.” United States v. James Daniel Good Real Prop., 510 U.S. 43, 48
(1993) (emphasis added) (assessing whether adequate process was
afforded during civil forfeiture). And our precedents establish that
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10 Opinion of the Court 22-10319
a due-process right attaches to the imposition of civil or adminis-
trative penalties. We have held that “individuals whose property
interests are at stake due to government actions are entitled to no-
tice of the proceedings and an opportunity to be heard.” Mesa Val-
derrama v. United States, 417 F.3d 1189, 1196 (11th Cir. 2005) (citing
Dusenbery v. United States, 534 U.S. 161, 167–68 (2002)) (assessing
whether plaintiff was afforded due process during the administra-
tive forfeiture of a $100,000 check); see also Robinson v. United States,
734 F.2d 735, 738–39 (11th Cir. 1984) (holding that the failure to
timely initiate civil forfeiture proceedings was a denial of due pro-
cess); United States v. Castro, 883 F.2d 1018, 1021 (11th Cir. 1989)
(recognizing that undue delay in initiating civil forfeiture proceed-
ings could “demonstrate[] a denial of . . . due process”). And the
Supreme Court has stated “[t]he general rule” is that “a party can-
not invoke the power of the state to seize a person’s property with-
out a prior judicial determination that the seizure is justified.”
United States v. $8,850 in U.S. Currency, 461 U.S. 555, 562 n.12 (1983)
(citing Boddie v. Connecticut, 401 U.S. 371, 378–379 (1971)); see James
Daniel, 510 U.S. at 53 (recognizing that due process ordinarily re-
quires “predeprivation notice and hearing”).
Although Zen Group enjoyed a due-process right to chal-
lenge the fine, whether its claim for unconstitutional retaliation is
barred by qualified immunity is another matter. Qualified immun-
ity “shields officials from civil liability so long as their conduct does
not violate clearly established statutory or constitutional rights of
which a reasonable person would have known.” Mullenix v. Luna,
577 U.S. 7, 11 (2015) (citation and internal quotation marks
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22-10319 Opinion of the Court 11
omitted). To determine whether a right is clearly established, “we
look for ‘fair warning’ to officers that the conduct at issue violated
a constitutional right.” Gaines v. Wardynski, 871 F.3d 1203, 1208
(11th Cir. 2017) (citation omitted). Specifically, we determine
whether “a materially similar case” has been decided, a “broader,
clearly established principle . . . control[s] the novel facts of the sit-
uation,” or “the conduct involved . . . so obviously violate[s] the
constitution that prior case law is unnecessary.” Id. Only holdings
of “the Supreme Court, the Eleventh Circuit or the law of [the Su-
preme Court of Florida] . . . can ‘clearly establish’ constitutional
rights” for purposes of qualified immunity. Amnesty Int’l, USA v.
Battle, 559 F.3d 1170, 1184 (11th Cir. 2009) (citation omitted).
Zen Group’s right to be free from retaliation for its previous
exercise of its due-process right was not clearly established. No
“materially similar case” from the Supreme Court, this Circuit, or
the Supreme Court of Florida has established an anti-retaliation
right under the Due Process Clause. Nor does a “broader, clearly
established principle . . . control the novel facts of the situation.”
Gaines, 871 F.3d at 1208. Zen Group argues that our First and
Fourth Amendment retaliation precedents establish the principle
that any claim for unconstitutional retaliation may be brought un-
der section 1983. See Leslie v. Ingram, 786 F.2d 1533, 1537 (11th Cir.
1986), abrogated on other grounds by Graham v. Connor, 490 U.S. 386,
399 (1989), as recognized in Stephens v. DeGiovanni, 852 F.3d 1298,
1324 n.28 (11th Cir. 2017); see also Cate v. Oldham, 707 F.2d 1176,
1189 (11th Cir. 1983); Bennett v. Hendrix, 423 F.3d 1247, 1255–56
(11th Cir. 2005). But these precedents cabin the scope of the anti-
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12 Opinion of the Court 22-10319
retaliation right to specific constitutional provisions—most often
the First Amendment. See Cate, 707 F.2d at 1189 (finding that “re-
taliation by the state for having exercised First Amendment free-
doms in the past is particularly proscribed by the First Amend-
ment”); Wood v. Kesler, 323 F.3d 872, 883 (11th Cir. 2003) (finding
that a claim for retaliatory prosecution sounded under the First
Amendment); Rehberg v. Paulk, 611 F.3d 828, 847 n.18 (11th Cir.
2010), aff’d, 566 U.S. 356 (2012); accord Leslie, 786 F.2d at 1537 (find-
ing that “retaliation against [the plaintiff’s] assertion of his right to
insist upon arrest by warrant” under the Fourth Amendment was
unconstitutional). We have never recognized a general, free-float-
ing right to be free from retaliation.
As we explained in Ratliff v. DeKalb County, the existence of
an anti-retaliation right is specific to the underlying protected con-
duct triggering retaliation. 62 F.3d 338, 340–41 (11th Cir. 1995). In
Ratliff, the plaintiff alleged that public officials had violated her
rights under the Equal Protection Clause by retaliating because of
her complaints of gender discrimination. Id. at 340. We reversed a
denial of qualified immunity because we found that no “clearly es-
tablished right exists under the equal protection clause to be free
from retaliation.” Id. We explained that although a claim for retal-
iation “may be brought under 42 U.S.C. § 1983 pursuant to the first
amendment,” that anti-retaliation right did not exist in the equal-
protection context. Id. at 341; see also Watkins v. Bowden, 105 F.3d
1344, 1354 (11th Cir. 1997) (“A pure or generic retaliation claim,
however, simply does not implicate the Equal Protection Clause.”).
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Zen Group fails to identify any precedent recognizing an
anti-retaliation right under the Due Process Clause. Because we
have never recognized an anti-retaliation right in the due-process
context, nor recognized any broadly applicable anti-retaliation
principle, we cannot say that the officials’ conduct violated clearly
established law. Because the officials are entitled to qualified im-
munity, we affirm the dismissal of Zen Group’s due-process claim
for damages.
B. Zen Group’s Request for Damages Under the First Amendment is
Barred by Qualified Immunity.
Zen Group alleges that the officials “violated [its] First
Amendment rights to petition the government for redress and to
free speech” by retaliating against Zen Group for defending itself
against the recoupment and fine and for criticizing the Agency in
its sanctions motion. See U.S. CONST. amends. I, XIV. As a prelimi-
nary matter, a plaintiff has a viable First Amendment retaliation
claim only when speaking “as a citizen” rather than as a govern-
ment employee. King v. Bd. of Cnty. Comm’rs, 916 F.3d 1339, 1345
(11th Cir. 2019) (citation omitted). Although Zen Group is a gov-
ernment contractor, the officials do not contend that Zen Group
was speaking in its role as a government agent rather than as a cit-
izen. So we need not decide whether a contractor not bound by an
employment relationship is subject to different constraints in bring-
ing a First Amendment claim.
To state a First Amendment retaliation claim, Zen Group
must establish that (1) it “engaged in constitutionally protected”
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14 Opinion of the Court 22-10319
speech or petition activity, (2) the officials’ alleged “retaliatory con-
duct adversely affected that protected speech and right to petition,”
and (3) “a causal connection exists between the . . . retaliatory con-
duct and the adverse effect on [Zen Group’s] speech and right to
petition.” DeMartini v. Town of Gulf Stream, 942 F.3d 1277, 1289
(11th Cir. 2019). The officials contest only the first element:
whether Zen Group’s speech and petition activities were constitu-
tionally protected.
Zen Group’s speech and petition activities are constitution-
ally protected only if they relate to a matter of public concern. As
Zen Group acknowledges, the Supreme Court has held that gov-
ernment contractors’ speech is constitutionally protected only
when that speech relates to a matter of public concern. Bd. of Cnty.
Comm’rs v. Umbehr, 518 U.S. 668, 673–77, 685 (1996). And it has held
that public employees’ petitions are likewise constitutionally pro-
tected only with respect to matters of public concern. Borough of
Duryea v. Guarnieri, 564 U.S. 379, 388–89, 393 (2011).
Zen Group argues that the public-concern test should not be
further extended to Petition Clause claims brought by government
contractors. But the logic of the Supreme Court’s decisions easily
extends to this context. The Court has explained that “[t]he simi-
larities between government employees and government contrac-
tors with respect to [speech rights] are obvious.” Umbehr, 518 U.S.
at 673–74. And it has stated that although “Speech Clause prece-
dents [do not] necessarily . . . resolve Petition Clause claims,”
“claims of retaliation by public employees do not call for [a]
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22-10319 Opinion of the Court 15
divergence” in interpretation. Guarnieri, 564 U.S. at 388–89. In the
light of the close connection between government employee and
government contractor speech claims—as well as government em-
ployee speech and petition claims—it follows that the public-con-
cern test controls the government contractors’ petition claims. See
L.L. Nelson Enters., Inc. v. Cnty. of St. Louis, 673 F.3d 799, 808 (8th Cir.
2012) (holding that government contractors’ petitions are constitu-
tionally protected only if they involve matters of public concern).
To determine whether speech or a petition involves a matter
of public concern, we “must examine three sub-factors—namely,
the ‘content, form, and context’ of the [contractor or] employee’s
statement.” O’Laughlin v. Palm Beach Cnty., 30 F.4th 1045, 1051 (11th
Cir. 2022) (citation omitted). Among these three, content is “un-
doubtedly the most important.” Id. (citation omitted). At a high
level of generality, “[t]o fall within the realm of public concern, an
employee’s speech must relate to any matter of political, social, or
other concern to the community.” Alves v. Bd. of Regents of the Univ.
Sys. of Ga., 804 F.3d 1149, 1162 (11th Cir. 2015) (citation and inter-
nal quotation marks omitted). It may also qualify if it relates to “a
subject of legitimate news interest; that is, a subject of general in-
terest and of value and concern to the public.” Lane v. Franks, 573
U.S. 228, 241 (2014). The goal is to protect the employee or contrac-
tor’s right, as a citizen, to speak on matters of public concern. See
O’Laughlin, 30 F.4th at 1051.
The district court concluded that “[i]n its petition, Zen
Group did not challenge the Behavior Analysis Services Program
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16 Opinion of the Court 22-10319
or Agency policies generally; rather, Zen Group’s petition per-
tained only to its individual grievance.” The district court did not
address the sanctions motion. We conclude that although the con-
tent of the petition for a formal hearing does not implicate a matter
of public concern, the content of the motion for sanctions does.
The petition for a formal hearing relates to Zen Group’s pri-
vate dispute with the Agency. One sentence in the prayer for relief
questions the legal validity of rules that, according to Zen Group,
were improperly promulgated. Zen Group sought “[a] finding that
[the Agency’s] conclusions are un-promulgated rules and without
any force and effect.” But that sentence is hardly sufficient to trans-
form a petition for a formal hearing that otherwise addresses only
a private dispute into a petition on a matter of public concern. We
need not address the form or context of the petition.
By contrast, the content of the motion for sanctions relates
to a matter of public concern. In a section entitled “Agency Disar-
ray In Interpreting And Applying Rule 59G-4.125 Leads To Prohib-
ited Arbitrary And Capricious Agency Action,” the motion charac-
terized the approval process for behavioral assistants as “rudder-
less” and “ad hoc” and protested “the lack of any clear rules or
standards regarding their required qualifications.” It alleged that a
single employee had been tasked with reviewing thousands of ap-
plications without clear guidelines. And it accused the Agency of
“re-writing post hoc the experience qualification requirement to im-
pose myriad requirements not included in the duly adopted Agency
rules or the coverage policies incorporated therein.”
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Whether speech and petitions by government employees
and contractors constitute matters of public concern can be diffi-
cult to discern. “[V]irtually all speech which is made in and about a
public employment [or contracting] setting will have some public
significance . . . .” Ferrara v. Mills, 781 F.2d 1508, 1515 (11th Cir.
1986). But “a public employee [or contractor] may not transform a
personal grievance into a matter of public concern by invoking a
supposed popular interest in the way public institutions are run.”
Id. at 1516.
Much of our caselaw about identifying matters of public
concern arises in the public-education context, and these prece-
dents are instructive. We have explained that “speech that concerns
internal administration of the educational system and personal
grievances will not receive constitutional protection” but that
“teachers whose speech directly affects the public’s perception of
the quality of education in a given academic system find their
speech protected.” Maples v. Martin, 858 F.2d 1546, 1552–53 (11th
Cir. 1988). For example, salary levels, course assignments, syllabi,
tenure decisions, course registration, job sharing, teaching meth-
ods, and evaluation criteria are not matters of public concern. Id.But school funding, university admissions policies and student-
body sizes, adherence to federal law respecting students with disa-
bilities, educational standards and accreditation, curriculum weak-
nesses, facility adequacy, faculty-to-school ratio, and the poor per-
formance of graduates on professional licensing exams do consti-
tute matters of public concern. Id. at 1553.
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Although the underlying grievance in this case is particular
to Zen Group, the problems described in the sanctions motion re-
late to the functioning of a public agency. The motion addresses
whether the Agency is operating efficiently and according to law.
The description of an Agency where provider approval decisions
are made by a single, overburdened employee without proper
guidelines more closely resembles the concerns that we have deter-
mined “affect[] the public’s perception of the quality of education
in a given academic system” than it does those that relate to “inter-
nal administration of the educational system.” Cf. id. at 1552–53.
And the information found in the motion would help citizens
“make informed decisions about the operation of their [state] gov-
ernment.” Alpha Energy Savers, Inc. v. Hansen, 381 F.3d 917, 924 (9th
Cir. 2004) (citation omitted). So, the content of the motion relates,
at least in part, to a matter of public concern.
That only a portion of the motion relates to a matter of pub-
lic concern is not fatal to Zen Group’s claim. A document may re-
late to a matter of public concern even if only a fraction is devoted
to that issue. See Connick v. Myers, 461 U.S. 138, 149 (1983). But the
portion that does relate to a matter of public concern must be “di-
rected to such concerns” and may not merely “touch up against
matters of public concern.” Alves, 804 F.3d at 1167. “[V]ague and
sweeping references”—for example, to “the safety and well-being
of students” or “an adverse impact on client care”—“without refer-
ence to specific instances” in which those issues have arisen are in-
sufficient, particularly when coupled with “great detail” and “spe-
cific examples” regarding “personal grievances.” Id. In the relevant
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22-10319 Opinion of the Court 19
section of its motion, Zen Group cites emails, depositions, and
other evidence reflecting the Agency’s “[d]isarray” in a way that is
not specific to Zen Group’s individual grievance.
The “form” of the sanctions motion, O’Laughlin, 30 F.4th at
1051, also supports the conclusion that it relates to a matter of pub-
lic concern. “A court may . . . consider the employee’s attempt to
make her concerns public,” but that consideration is “not disposi-
tive.” Alves, 804 F.3d at 1162; see also Kurtz v. Vickrey, 855 F.2d 723,
727 (11th Cir. 1988). The Supreme Court has explained that “[p]eti-
tions to the courts and similar bodies can . . . address matters of
great public import.” Guarnieri, 564 U.S. at 397. Zen Group’s sanc-
tions motion was intended to be a public filing; it was never pub-
lished on a public docket only because the parties settled during the
state-mandated grace period before publication. See FLA. STAT.
§ 57.105(4) But such speech and petitions may still be protected. Cf.
Ballou v. McElvain, 29 F.4th 413, 431 (9th Cir. 2022) (explaining that
a “state tort notice,” which a party must serve before suing a local
government entity in Washington, is “a form of speech protected
by the Petition Clause” because those “notices are part and parcel
of formal litigation proceedings”). And Zen Group’s motion, if
granted, would have secured more than “individual compensa-
tion.” Deremo v. Watkins, 939 F.2d 908, 911 n.6, 912 (11th Cir. 1991).
Sanctions would have included public censure, in addition to any
monetary compensation to the opposing party.
Finally, the “context” of the sanctions motion, O’Laughlin,
30 F.4th at 1051, offers little insight. That speech is “motivated by
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20 Opinion of the Court 22-10319
. . . personal interest” does not necessarily “deprive[] the[] speech
of its publicness.” Id. at 1052–53 (internal quotation marks omit-
ted). For example, “using [a] petition [in an internal grievance pro-
cedure] to appeal the termination of [one’s] employment as any
employee . . . would do” does not suggest that the problem is a
matter of public concern, but “using the petition . . . as a platform
to publicly air [one’s] concerns about [a public official’s] conduct”
implies that the topic is one of broader interest. Harmon v. Dallas
Cnty., 927 F.3d 884, 895 (5th Cir. 2019) (citation omitted). Zen
Group appeared to pursue relief both to further its private interests
and to air a grievance about official conduct.
Ordinarily, our next step would be to determine whether the
relevant speech and petition interests outweigh the government’s
interests in serving the public. See Pickering v. Bd. of Educ., 391 U.S.
563, 568 (1968) (establishing the balancing test); O’Laughlin, 30 F.4th
at 1051 (identifying the steps of the balancing test). But we need
not reach this issue, because Zen Group’s claim for damages is
barred by qualified immunity. Zen Group’s request for damages
against Bennett in her personal capacity is barred because Zen
Group’s First Amendment rights are not clearly established. See
Gaines, 871 F.3d at 1208.
That a government agency cannot retaliate against a con-
tractor for exercising its First Amendment rights is clearly estab-
lished. See Umbehr, 518 U.S. at 686. But the Supreme Court has “re-
peatedly told courts . . . not to define clearly established law at a
high level of generality.” Kisela v. Hughes, 138 S. Ct. 1148, 1152
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22-10319 Opinion of the Court 21
(2018). It must be clear with respect to the facts of this case that
Zen Group was exercising its First Amendment rights. Cf. Anderson
v. Creighton, 483 U.S. 635, 641 (1987) (“The relevant question . . . is
the objective (albeit fact-specific) question whether a reasonable of-
ficer could have believed Anderson’s warrantless search to be law-
ful . . . .”). “If it is unclear whether [Zen Group’s] complaints were
of the kind held to involve a matter of public concern, then [Ben-
nett’s] alleged actions did not violate clearly established First Amend-
ment rights and [she] is entitled to qualified immunity.” Badia v. City
of Miami, 133 F.3d 1443, 1445 (11th Cir. 1998). Even when the topic
of the speech is “obviously a matter of important social interest,”
“we must focus on what [the officials] knew” or should have known
about the facts and the law. Johnson v. Clifton, 74 F.3d 1087, 1093
(11th Cir. 1996); Gaines, 871 F.3d at 1207.
The parties failed to identify a “materially similar case” or a
“broader, clearly established principle” delineating matters of pub-
lic concern that “control[s] the novel facts of the situation,” and the
conduct does not “so obviously violate the constitution that prior
case law is unnecessary.” Gaines, 871 F.3d at 1208 (citation omitted).
A reasonable official would not necessarily have been on notice that
Zen Group’s motion for sanctions involved a matter of public con-
cern.
As we acknowledged in our analysis of the merits, whether
the motion for sanctions involved a matter of public concern pre-
sented a close question. We determined that the content of the mo-
tion related to a matter of public concern by analogy to caselaw
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22 Opinion of the Court 22-10319
from the public-education context, where our decisions make clear
that “speech [that] directly affects the public’s perception of the
quality of education in a given academic system” is constitutionally
protected. Maples, 858 F.2d at 1553. We concluded that the motion
for sanctions, which would have impacted the public’s perception
of the operation of the state Medicaid program, is likewise pro-
tected. But a reasonable official might not have anticipated that out-
come. The form of the motion—a sanctions motion in an admin-
istrative action that was never publicly docketed—was also unique.
We relied upon the censuring function of a sanctions motion as
well as persuasive, out-of-circuit authority to conclude that the mo-
tion was public in form. Cf. Ballou, 29 F.4th at 431. Again, a reason-
able official might not have anticipated this result. So, the alleged
retaliation did not violate clearly established law.� See Badia, 133 F.3d
at 1445.
C. Zen Group Lacks Standing to Seek Injunctive Relief.
Zen Group also seeks injunctive relief against the officials in
their official capacities. It requested an injunction “directing that
Defendant Bennett and the [Agency] Secretary not make any fraud
referrals . . . (or issue any related Medicaid payment suspensions)
without first conducting a preliminary investigation and otherwise
verifying any allegations of fraud.” But Zen Group lacks standing
to seek this relief.
“The federal courts are under an independent obligation to
examine their own jurisdiction, and standing is perhaps the most
important of the jurisdictional doctrines.” Bischoff v. Osceola Cnty.,
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22-10319 Opinion of the Court 23
222 F.3d 874, 878 (11th Cir. 2000) (alteration adopted) (citation
omitted). To have standing, a “plaintiff must have (1) suffered an
injury in fact, (2) that is fairly traceable to the challenged conduct
of the defendant, and (3) that is likely to be redressed by a favorable
judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). “To
establish injury in fact, a plaintiff must show that he or she suffered
‘an invasion of a legally protected interest’ that is ‘concrete and par-
ticularized’ and ‘actual or imminent, not conjectural or hypothet-
ical.’” Id. at 339 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560
(1992)). “[A] plaintiff must demonstrate standing for each claim and
for each form of relief that is sought.” J W ex rel. Williams v. Bir-
mingham Bd. of Educ., 904 F.3d 1248, 1264 (11th Cir. 2018) (citation
and internal quotation marks omitted). “And when plaintiffs seek
prospective relief to prevent future injuries, they must prove that
their threatened injuries are certainly impending.” Jacobson v. Fla.
Sec’y of State, 974 F.3d 1236, 1245 (11th Cir. 2020) (citation and in-
ternal quotation marks omitted).
Zen Group argues that it has alleged an injury in fact capable
of supporting injunctive relief on two bases. It contends, first, that
the original complaint alleged an ongoing violation, and second,
that the amended complaint alleged a credible threat of future
harm. But Zen Group cannot assert standing on either basis.
Zen Group argues that it has standing because “at the time
Zen Group and Otamendi commenced this action and filed their
original Complaint, the constitutional violations were ongoing.” The
original complaint did not request injunctive relief. Instead, it
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24 Opinion of the Court 22-10319
sought a declaration that “[d]efendants must immediately termi-
nate the illegal payment suspension.” The officials then terminated
the payment suspension. Zen Group amended its complaint to re-
quest injunctive relief from future harm. “[W]hen a plaintiff files a
complaint in federal court and then voluntarily amends the com-
plaint, courts look to the amended complaint to determine juris-
diction.” Pintando v. Miami-Dade Hous. Agency, 501 F.3d 1241, 1243
(11th Cir. 2007) (citation omitted). Because Zen Group dropped its
claim for relief based on the officials’ ongoing activity and asserted
a new claim for prospective relief against future harm in the
amended complaint, it cannot now rely on the defunct original
complaint as a basis for jurisdiction. Id. at 1243–44 (“When [the
plaintiff] amended his complaint and failed to include . . . any . . .
federal claim, the basis for the district court’s subject-matter juris-
diction ceased to exist . . . .”).
Zen Group also asserts that it has standing to seek prospec-
tive relief because an injury is “certainly impending.” Jacobson, 974
F.3d at 1245. In its amended complaint, Zen Group alleged that it
“completely ceased operations” in June 2020. It also stated that it
“remains a Florida Medicaid provider subject to the authority of
Defendants Bennett and Mayhew[] and has a credible fear of fur-
ther retaliatory conduct, not least in the form of another un-
founded and false fraud referral to [the Fraud Unit] and another
debilitating Medicaid payment suspension.” In response to our re-
quest for supplemental briefing on standing, Zen Group explained
that after the Agency terminated its payment suspension and be-
fore it filed the amended complaint, Zen Group resumed providing
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22-10319 Opinion of the Court 25
Medicaid services. Zen Group now argues that, “[a]s a current
Medicaid provider . . . subject to Agency Defendants’ power to
make unreviewable fraud referrals and Medicaid payment suspen-
sions based on nothing but retaliatory animus, . . . [p]laintiffs face
an imminent threat of harm redressable by” injunctive relief.
Zen Group lacks standing to pursue injunctive relief because
we are constrained to rely only on the facts that it alleged in its
amended complaint. Zen Group alleged that it had “completely
ceased operations” in June 2020. It did not allege that it had re-
sumed providing services to Medicaid recipients. In that context,
the most that we can fairly infer from the assertion that Zen Group
“remains a Florida Medicaid provider” is that Zen Group remains
an active corporation authorized by the state to provide Medicaid
services, even though it is not currently doing so. “[A] court’s duty
to liberally construe a plaintiff’s complaint in the face of a motion
to dismiss is not the equivalent of a duty to re-write it for [the plain-
tiff].” Peterson v. Atlanta Hous. Auth., 998 F.2d 904, 912 (11th Cir.
1993). The allegations in the amended complaint do not support
the inference that Zen Group faces anything more than a specula-
tive risk of future injury if it resumes providing services or the offi-
cials decide to engage in retaliatory fraud referrals against an inac-
tive provider with respect to services rendered in the past. See Wor-
thy, 930 F.3d at 1215 (“[A] plaintiff must allege facts from which it
appears there is a substantial likelihood that he will suffer injury in
the future.” (emphasis altered) (citation omitted)); J W ex rel. Wil-
liams, 904 F.3d at 1264 (“A party has standing to seek injunctive re-
lief only if the party alleges, and ultimately proves, a real and
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26 Opinion of the Court 22-10319
immediate—as opposed to a merely conjectural or hypothetical—
threat of future injury.” (emphasis omitted) (citation omitted)).
IV. CONCLUSION
We AFFIRM.
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22-10319 WILLIAM PRYOR, C.J., Concurring 1
WILLIAM PRYOR, Chief Judge, Concurring:
I write separately to add a thought about the right to be free
from retaliation after a person exercises his right to due process un-
der the Fourteenth Amendment. This Court has yet to recognize
an anti-retaliation right under the Due Process Clause. But our
opinion today does not prevent us from one day recognizing that
the government violates the Fourteenth Amendment when it retal-
iates against a person for invoking his right to due process.
The Fourteenth Amendment prohibits the government
from depriving “any person of life, liberty, or property, without due
process of law.” U.S. CONST. amend. XIV, § 1. The Due Process
Clause creates procedural safeguards against state invasions of pro-
tected interests. Its fundamental promise is the opportunity to be
heard; that is, the Fourteenth Amendment guarantees proceedings
to “afford [persons] an opportunity to present their objections” to
the deprivation of liberty or property. Mullane v. C. Hanover Bank &
Tr. Co., 339 U.S. 306, 314 (1950). A due-process hearing helps “secure
the individual from the arbitrary exercise of the powers of govern-
ment.” Hurtado v. California, 110 U.S. 516, 527 (1884).
The opportunity to be heard means little if the government
may, without consequence, punish persons for availing themselves
of a hearing. The Constitution bars retaliation against individuals
who exercise their First Amendment freedoms because of the
“chilling effect” on protected speech and petition activity. Cate v.
Oldham, 707 F.2d 1176, 1189 (11th Cir. 1983); see also Bennett v. Hen-
drix, 423 F.3d 1247, 1254 (11th Cir. 2005) (finding that retaliatory
USCA11 Case: 22-10319 Document: 70-1 Date Filed: 09/13/2023 Page: 28 of 43
2 WILLIAM PRYOR, C.J., Concurring 22-10319
conduct is unconstitutional if it would “likely deter a person of or-
dinary firmness from the exercise of First Amendment rights”); ac-
cord Thaddeus-X v. Blatter, 175 F.3d 378, 394 n.9 (6th Cir. 1999) (“The
reason why such retaliation offends the Constitution is that it
threatens to inhibit exercise of the protected right.”) (citing Craw-
ford-El v. Britton, 523 U.S. 574, 588 n.10 (1998)). That rationale of
deterrence has equal force in the due-process context. Because the
government is the only entity that can provide a due-process hear-
ing, a person must put himself at the government’s mercy to exer-
cise his right at all.
That retaliation violates the Due Process Clause flows from
the Clause itself. The Supreme Court has explained that “[t]o pun-
ish a person because he has done what the law plainly allows him
to do is a due process violation of the most basic sort.” Bordenkircher
v. Hayes, 434 U.S. 357, 363 (1978); see also Blackledge v. Perry, 417 U.S.
21, 28 (1974) (“[D]ue process . . . requires that a defendant be freed
of apprehension of . . . retaliatory motivation.”) (citation omitted).
It would be odd if that anti-retaliation principle, itself grounded in
the Fourteenth Amendment, failed to guarantee the right to be
heard—that “fundamental requisite of due process.” Grannis v. Or-
dean, 234 U.S. 385, 394 (1914).
We should, in an appropriate case, recognize that a person
has the right to be free from retaliation for invoking his right to be
heard before a proposed deprivation of his property. Acknowledg-
ing that anti-retaliation right would help ensure that future due-
process violations do not go unredressed.
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22-10319 HULL, J., Concurring in part and Dissenting in part 1
HULL, Circuit Judge, concurring in part and dissenting in part:
I concur in the Court’s opinion except for Section III.A
concerning Zen Group’s claim for damages for unconstitutional
retaliation brought under the Due Process Clause. As to Section
III.A, I join its judgment affirming the dismissal of Zen Group’s
anti-retaliation claim under the Due Process Clause. I agree that
“Zen Group fails to identify any precedent recognizing an anti-
retaliation right under the Due Process Clause,” 1 and the defendant
officials are entitled to qualified immunity. Maj. Op. at 13.
As all know, to overcome qualified immunity, Zen Group
must show: (1) the defendant violated a constitutional right and
(2) that right was clearly established. I agree with the Majority’s
approach of ruling on only the clearly-established prong and
leaving for another day the first prong as to whether a
constitutional anti-retaliation right exists under the Due Process
1 To some extent, Appellees argue that our precedent counsels otherwise. See
Ratliff v. DeKalb Cnty., 62 F.3d 338, 340–41 (11th Cir. 1995) (explaining that
although a claim for retaliation “may be brought under 42 U.S.C. § 1983pursuant to the first amendment,” that anti-retaliation right did not exist in the
equal-protection context); Watkins v. Bowden, 105 F.3d 1344, 1354–55 (11th
Cir. 1997) (“A pure or generic retaliation claim, however, simply does not
implicate the Equal Protection Clause.”); Wood v. Kesler, 323 F.3d 872, 883
(11th Cir. 2003) (“Although Wood attempts to rely on the Fourth
Amendment, there is no retaliation claim under the Fourth Amendment
separate and distinct from Wood’s malicious prosecution and false arrest
claims. Instead, the only cause of action for retaliation that arguably applies
here is retaliatory prosecution in violation of the First Amendment.” (footnote
omitted)); Rehberg v. Paulk, 611 F.3d 828, 847 n.18 (11th Cir. 2010) (same), aff'd,
566 U.S. 356 (2012).
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2 HULL, J., Concurring in part and Dissenting in part 22-10319
Clause. 2 Maj. Op. at 10–13; Chief Judge Pryor Concurrence at 1–
2.
Although unnecessary to do so, the Majority takes the first
step in answering that constitutional question by addressing
whether a medical provider, like Zen Group, had an underlying
“constitutionally protected” property interest in a Medicaid fine
imposed for fraudulent overpayments, even though the state
Agency’s overpayments and fine determination was only a
“probable cause” determination, was not final, and was still under
a fraud investigation and administrative review when Zen Group
entered into a favorable settlement with no fine. While the
Majority limits its opinion to the Medicaid fine, I would bypass the
entire first prong of qualified immunity altogether. I write to set
forth six good reasons why we should leave the constitutional
property-interest issue as to this Medicaid fine, tied to fraudulent
overpayments, for another day. 3
2 See Brown v. City of Huntsville, 608 F.3d 724, 734 (11th Cir. 2010) (“Both
elements of th[e qualified immunity] test must be present for an official to lose
qualified immunity, and th[e] two-pronged analysis may be done in whatever
order is deemed most appropriate for the case.”).
3 To be clear, I agree with the well-established constitutional principles under
the Due Process Clause that: (1) Florida may not deprive any person of
property without due process of law; (2) individuals must receive notice and
an opportunity to be heard before the government may deprive them of
property; and (3) the Due Process Clause creates fundamental safeguards
against state invasions of constitutionally protected property interests. See
Maj. Op. at 9 (citing, inter alia, U.S. Const. amend. XIV, § 1). Nonetheless, to
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22-10319 HULL, J., Concurring in part and Dissenting in part 3
Alternatively, because the Majority elects to decide that
question, I set forth why Zen Group had no such property interest
and why I dissent in part as to Section III.A. As explained in detail
herein, the Agency audit made only a “probable cause”
determination as to the overpayments and related fines, and in the
routine administrative-review process no fine was imposed, much
less finalized, levied, or paid. My six reasons equally support this
conclusion as they include a review of the Majority’s flawed
citations and analyses and demonstrate why Zen Group had no
such constitutionally protected property interest in the
preliminary, “probable cause” determination of the overpayment
fine involved here.
The Majority states the assessment of the fine “threatened
to invade a cognizable property interest distinct from the
overpayments: Zen Group’s money.” Maj. Op. at 8. For sure, Zen
Group has a property interest in money it owns in its bank account.
But what Zen Group does not have is a property interest in
government Medicaid money that Zen Group is not yet legally
owed by the Medicaid Agency. As discussed herein, the
contractual relationship between the Medicaid Agency and Zen
Group is governed by complex state and federal Medicaid statutes
and regulations. Pursuant thereto, the Medicaid Agency pays up
invoke the Due Process Clause, the plaintiff must demonstrate it has a
constitutionally protected property interest. If a plaintiff has no such property
interest under the facts of a case, there is no constitutional due process right.
Bd. of Regents v. Roth, 408 U.S. 564, 569–70 (1972).
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4 HULL, J., Concurring in part and Dissenting in part 22-10319
front, then audits for overpayments, makes a “probable cause”
determination of fraudulent overpayments and 20% of those
overpayments as a fine, and withholds both sums from current
reimbursements. Later in an administrative-review process, a
calculation is made of the amount Zen Group is actually owed.
Before that calculation, this case settled without any fine. The
Majority points to no source of law that entitles Zen Group to
receive Medicaid’s money unfettered by government audits and
overpayment fines. I now turn to the Majority’s cited cases.
Majority’s Cited Cases
First, the Majority’s cited cases do not address whether a
property right or interest existed, but involve only whether the due
process afforded was adequate. The Majority summarily states:
“And our precedents establish that a due-process right attaches to
the imposition of civil or administrative penalties,” citing our Mesa
Valderrama v. United States, 417 F.3d 1189, 1196 (11th Cir. 2005)
(citing Dusenbery v. United States, 534 U.S. 161, 167–68 (2002));
Robinson v. United States, 734 F.2d 735, 738 (11th Cir. 1984); and
United States v. Castro, 883 F.2d 1018, 1021 (11th Cir. 1989). Maj.
Op. at 10. It also cites United States v. James Daniel Real Property, 510
U.S. 43, 48 (1993). Id. at 11. Yet, none of these cases addresses
whether a cognizable property interest existed because each
plaintiff patently had one.
For example, in Mesa Valderrama, customs officers seized a
$100,000 check payable to the plaintiff and other personal property.
417 F.3d at 1192. In Robinson, the customs officers seized $82,603
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22-10319 HULL, J., Concurring in part and Dissenting in part 5
in currency. 734 F.2d at 736. In Castro, the government seized two
cars and a boat. 883 F.2d at 1019. In James Daniel, the government
seized a home and a four-acre parcel. 510 U.S. at 49. The issues in
these cited cases were about the adequacy of the due process
afforded—not whether a cognizable property interest existed.
Second, none of the Majority’s cited “precedent” addresses
Medicaid overpayments and/or fines, and the Majority does not
discuss how Medicaid audits and administrative reviews work. As
outlined below, complex federal and state rules (statutory and
regulatory): (1) govern Medicaid reimbursements, fraudulent
overpayments, and related fines; (2) permit Florida’s Medicaid
Agency to audit providers and make a “probable cause
determination” as to overpayments and fines; (3) allow the Agency
to recoup overpayments and fines by withholding current
payments during the fraud investigation; but (4) grant providers
full administrative review and a formal hearing to challenge both
the overpayment and fine determinations in the audit before they
are final. See generally 42 U.S.C. § 1396b (setting forth, inter alia,
requirements of state Medicaid fraud units); Fla. Stat. § 409.913(explaining Florida’s oversight of Medicaid providers and its
interim recoupment authority after a “probable cause
determination” and pending administrative review, and its ability
to collect the money owed “upon entry of a final agency order, a
judgment or order of a court of competent jurisdiction, or a
stipulation of settlement”). None of the Majority’s cited cases
involve this federal and state labyrinth governing Medicaid.
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6 HULL, J., Concurring in part and Dissenting in part 22-10319
Medicaid’s Reimbursement Process
Third, two circuit courts have concluded medical providers
do not have a property interest in contingent Medicaid
reimbursements, overpayments, or fines, pending a fraud
investigation and final administrative determination. Pers. Care
Prods., Inc. v. Hawkins, 635 F.3d 155, 159 (5th Cir. 2011); Yorktown
Med. Lab’y, Inc. v. Perales, 948 F.2d 84, 89 (2d Cir. 1991). Before
reviewing these cases, some Medicaid background is necessary.
Medicaid processes over a billion claims each year, and each
claim is not inspected but paid if facially valid. As in this case, the
Medicaid Agency by rote pays up front and later conducts
postpayment audits to detect any overpayments or errors. Federal
law requires state Medicaid plans to provide for procedures of
prepayment and postpayment claims review. See 42 U.S.C.
§ 1396a(a)(37)(B). In compliance with that requirement, Florida
promulgated laws authorizing the Agency to audit, verify, and
withhold payment for claims submitted by Medicaid providers
pending a final administrative determination. See Fla. Stat.
§ 409.913.
Accordingly, if the state Agency’s audit makes “a probable
cause determination” that a Medicaid provider was fraudulently
overpaid in the past and owes a related fine, the Agency can
withhold that money and related fine from current, legitimate
payments owed to the same provider. 42 C.F.R. § 455.23; Fla. St.
§ 409.913(27). That process is called recoupment in the Medicaid
world but, practically speaking, is an interim contractual offset by
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22-10319 HULL, J., Concurring in part and Dissenting in part 7
the state payor against current reimbursements due the medical-
provider payee. And if the Agency pursues recoupment or an
offset, the provider has extensive statutory and regulatory
processes to contest the Agency’s probable cause determination as
to overpayments and fines. The Agency’s determination of
overpayments and fines is contingent and not final until that
administrative-review process is complete with a Final Order, or
the provider elects not to contest them.
Second and Fifth Circuits’ Decisions
Medicaid’s specialized reimbursement and recoupment
processes have led two sister circuits to hold that a Medicaid
provider does not have a constitutionally protected property
interest in Medicaid reimbursements that are subject to
recoupment (for overpayments and/or fines) until the fraud
investigation and the administrative process are complete. See Pers.
Care Prods., 635 F.3d at 159 (“Nothing in Texas or federal law
extends a property right in Medicaid reimbursements to a provider
that is the subject of a fraud investigation . . . . Texas regulations
plainly permit current reimbursements to be withheld pending
investigation on prior payments, noting that ‘payments for future
claims’ may be withheld and stating that payment holds are ‘used
to withhold payments to providers that may be used subsequently
to offset the overpayment or penalty amount when an
investigation is complete.’” (alteration adopted) (emphasis added));
Yorktown Med. Lab’y, 948 F.2d at 89 (“[The New York State
Department of Social Services (‘DSS’)] promulgated regulations
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8 HULL, J., Concurring in part and Dissenting in part 22-10319
authorizing it to audit, verify, and withhold payment for claims
submitted by Medicaid providers pending a DSS final
determination. Thus, [the plaintiff] has no property interest
grounded in either the Medicaid Act or New York regulations to
payment for claims pending investigation to determine illegality.”).
In its property interest discussion, the Majority ignores that
in these circuit cases current legitimate reimbursements were
withheld to recoup or offset both prior overpayments and fines
until the related fraud investigation and administrative process
were completed with a Final Order; yet the circuit courts held the
provider had no property interest in those current reimbursements
despite their use to recoup the penalty. It seems to me that if there
is no cognizable property interest in current withheld
reimbursements—a more tangible consequence—to recoup or
offset a fine, then there is no property interest in the “probable-
cause” fine itself before the administrative review is completed and
a Final Order issues. The Majority fails to recognize how
Medicaid’s contractual process works: rote payments up front,
postpayment audits that yield only a “probable cause
determination,” followed by a routine administrative review to
sort out any overpayments and related fines, and only then a Final
Order as to overpayments and related fines. 4
4 As aptly observed by the Firth Circuit in Personal Care Products, “[p]roperty
interests ‘are not created by the Constitution. Rather they are created and
their dimensions are defined by existing rules and understandings that stem
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22-10319 HULL, J., Concurring in part and Dissenting in part 9
Medicaid Process as to Zen Group
Fourth, this case involved the same Medicaid process of
audits, recoupment, and administrative review as that before our
sister circuits. Here, on February 14, 2019, the Agency issued its
“Final Audit Report,” which notified Zen Group that: (1) “[t]he
Final Audit Report constitutes a probable cause determination by
the Agency that you were overpaid by the Medicaid program”;
(2) “you were overpaid $1,367,839.74 for services that in whole or
in part are not covered by Medicaid”; (3) $495 is owed for the audit
cost; and (4) the Agency has assessed a “fine of $273,567.95”
representing 20% of the overpayment amount and $2,500.00 for
failure to furnish Medicaid records related to overpayments. Fla.
Admin. Code r. 59G-9.070(4)(a), (7) (prescribing 20% of the
overpayment amount as a fine for a first offense and a $2,500 fine
for a first records violation). 5
In addition to instructing Zen Group to remit these
amounts, the Report notified Zen Group that the Agency may
collect money owed (1) pursuant to Fla. Stat. § 409.913(25)(d) by
from an independent source such as state law rules’. . . .” 635 F.3d at 158(quoting Bd. of Regents, 408 U.S. at 577). How Medicaid works, under federal
and state law, impacts the existence of a constitutionally protected property
interest. No doubt at the conclusion of Florida’s Medicaid administrative
process, a fine imposed in a Final Order would be a wholly different matter
than what we have in this case.
5 These two separate amounts total the $276,067.95 fine referenced in the
Majority Opinion. For simplicity, I also refer to them as the fine but, as shown
above, both are directly tied to the overpayments.
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10 HULL, J., Concurring in part and Dissenting in part 22-10319
exercising the option to collect money from Medicare that is
payable to the provider and (2) pursuant to Fla. Stat. § 409.913(27)
by withholding Medicaid reimbursements to the provider during
the pendency of an administrative hearing.
The Report also clarified that “all information obtained
pursuant to this [audit] review is confidential” until the Agency
“takes final agency action” and “requires repayment of any
overpayment or imposes an administrative sanction [the fine] by
Final Order.” The Report advised that Zen Group had twenty-one
days to file a petition and initiate an administrative challenge before
the sanctions became “conclusive and final.” In fact, Florida law
provides that the Agency’s notice in this Final Audit Report about
the application of sanctions “shall be the point of entry for
administrative proceedings.” Fla. Admin. Code r. 59G-9.070(2).
On March 7, 2019 (twenty-one days after the Report), Zen
Group filed a Petition for a formal administrative hearing to
challenge the Agency’s probable cause determination of
$1,367,839.74 in overpayments and the related fine. 6
As the above history well demonstrates, the Majority is flatly
wrong when it represents to the reader: “Because Florida had
issued a Final Audit Report, only ministerial steps remained before
the fine would be levied.” Maj. Op. at 9. The Final Audit Report is
6 During the pendency of the administrative proceedings, and as authorized
by federal and state law, the Agency withheld payments of over $737,000 to
Zen Group for services rendered to Medicaid patients by Zen Group unrelated
to the Agency’s claims in the Report.
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22-10319 HULL, J., Concurring in part and Dissenting in part 11
only a “probable cause determination,” an initial step in the fraud
investigation, and the Report basically gives notice of the audit’s
“probable cause determination” as a point of entry to the
administrative process, a formal hearing, and a later Final Order,
which may or may not impose a fine.
What happened here proves my point. During those
administrative proceedings, Zen Group served its own sanctions
motion on the Agency. Settlement then stopped both Zen Group’s
Petition and the Agency’s interim recoupment efforts. The Agency
paid Zen Group back about $667,000 of the $737,000 in withheld
reimbursements, and no fine was imposed. Indeed, the fulsome
administrative process led to a favorable settlement for Zen Group.
It makes perfect sense that the Agency conducts an audit and
advises the provider of its probable cause determinations as to
overpayments and fines, and then the provider can challenge them,
and nothing is finished, or close to it, until a “Final Order.” This
again illustrates why there is no need to decide the property-
interest issue here. However, given the Majority elects to decide
the issue, this further shows that Zen Group had no property
interest in the audit’s probable cause fine determination under the
facts and procedural history here. No fine was imposed, much less
finalized, levied, or paid.
District Court’s Order
Fifth, and also contrary to the Majority’s assertion, the
district court did not rule that “Zen Group had no due-process right
to bring an administrative challenge in the first place.” Maj. Op. at
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12 HULL, J., Concurring in part and Dissenting in part 22-10319
7. Rather, following the lead of, and citing, our sister circuits, the
district court ruled Zen Group had failed to demonstrate a
constitutionally protected property interest in Medicaid
reimbursement payments, reasoning:
Florida state law permits the Agency to withhold
Medicaid reimbursement payments from Zen Group,
a provider, if the Agency makes a probable cause
determination that overpayment occurred. See
§ 409.913(27)(a), Fla. Stat. Federal regulations also
require that the Agency suspend payments to Zen
Group during the fraud investigation if there is a
credible allegation of fraud unless there is good cause
to continue payments. See 42 C.F.R. § 455.23(a)(1).
Because Zen Group’s reimbursement payments are
contingent on payment determinations by the
Agency, as prescribed by state and federal rules,
Plaintiffs do not have a property interest in the
payments.
Dist. Ct. Order at 10 (emphasis added). The district court
concluded “[b]ecause plaintiffs have not alleged a constitutionally
protected property interest, plaintiffs have not stated a § 1983 claim
for Fourteenth Amendment violations.” Dist. Ct. Order at 11. The
district court never indicated Zen Group did not have a due process
right to bring an administrative challenge, which Zen Group did
successfully.
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22-10319 HULL, J., Concurring in part and Dissenting in part 13
Tellingly too, the district court’s order addressed only
fraudulent overpayments and current reimbursements and did not
mention the fraud fine. Fortunately, the Majority does not address
whether Zen Group had a property interest in fraudulent
overpayments or the withheld current payments to recoup or
offset them. Unfortunately, the Majority does address the
“probable cause” determination of a fine, despite it being
unnecessary to do so and despite the Agency’s withdrawal of any
fine during the administrative proceedings. I do not suggest the
fine issue was waived. But the fact that we have no district court
ruling on it is yet another reason for my reluctance to address it in
the first instance.
Final Observation
A sixth and final observation about the Majority’s
conclusion that Zen Group had a civil due process right “to
challenge the Agency’s imposition of a civil fine.” Maj. Op. at 8. It
glides over the threshold requirement of a constitutionally
protected property interest to state a constitutional Due Process
claim. It emphasizes the $276,067.95 fine is “over and above the
value of the $1.3 million in Medicaid overpayments” and severs the
fine from the fraudulent overpayments, although the fine was tied
to them. Maj. Op. at 8 (emphasis in original). It ignores the
administrative process and that the fine was never final nor close
to it. And its cited precedent does not address whether a
cognizable, constitutionally protected property interest exists,
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14 HULL, J., Concurring in part and Dissenting in part 22-10319
which is necessary to trigger a due process right. Above I already
demonstrated that. Here is yet another example.
The majority’s text quotes footnote 12 from the Supreme
Court’s decision in United States v. $8,850 in U. S. Currency, 461 U.S.
555, 562 n.12 (1983) (citing Boddie v. Connecticut, 401 U.S. 371, 378–
379 (1971)), but that case also did not address whether a
constitutionally protected property interest existed because federal
Customs officials seized $8,850 in cash and plaintiff patently had
one.
I recognize the Majority cites $8,850 in U.S. Currency mainly
for this proposition: “And the Supreme Court has stated ‘[t]he
general rule’ is that ‘a party cannot invoke the power of the state
to seize a person’s property without a prior judicial determination
that the seizure is justified.’” Maj. Op. at 10 (emphasis in original).
But the next sentences in that same footnote 12 state (1) “an
extraordinary situation exists when the government seizes items
subject to forfeiture” and (2) “Pearson Yacht clearly indicates that
due process does not require federal Customs officials to conduct a
hearing before seizing items subject to forfeiture.” $8,850 in U.S.
Currency, 461 U.S. at 562 n.12 (citing Colero-Toledo v. Pearson Yacht
Leasing Co., 416 U.S. 663 (1974)). My only point is this cited
precedent also has nothing to do with cognizable property
interests, much less Medicaid fines still under administrative
review in connection with a fraud audit and investigation. What
we are left with is an ipse dixit decree that a Medicaid fine, no
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22-10319 HULL, J., Concurring in part and Dissenting in part 15
matter the facts, context, or finality, is a cognizable,
constitutionally protected property interest.
Conclusion as to Section III.A
In my view, the threshold constitutional property-interest
question here is not as simplistic as the Majority treats it and, like
the alleged constitutional anti-retaliation claim based on the Due
Process Clause, should be deferred until another day.
Alternatively, because the Majority elects to decide that
question, I have set forth why I conclude Zen Group had no
constitutionally protected property interest in the Final Audit
Report’s “probable cause” determination as to the overpayment
fine that was subject to the routine administrative process and was
never imposed, much less finalized, levied, or paid. Thus, as to
Section III.A, I join the judgment affirming the dismissal of Zen
Group’s anti-retaliation claim under the Due Process Clause, but I
respectfully dissent from the Majority’s ruling that Zen Group had
a constitutionally protected property interest in the overpayment
fine under the facts and circumstances of the case.