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Hummel v. Minnesota Department of Agriculture

United States District Court, D. Minnesota

January 2, 2020

MINNESOTA DEPARTMENT OF AGRICULTURE; THOM PETERSEN, in his official capacity as Commissioner of the Minnesota Department of Agriculture; DOUG SPANIER, in his individual and official capacities; MARGARET WIATROWSKI, in her individual and official capacities; ANTHONY CORTILET in his individual and official capacities; and JANE AND JOHN DOE in their individual capacities, Defendants.


          Christina M. Brown and Colin Patrick O'Donovan, OFFICE OF THE MINNESOTA ATTORNEY GENERAL, for defendants.


          Patrick J. Schiltz United States District Judge

         Plaintiff Luis Miguel Hummel operates 5th Sun Gardens, LLC-an industrial hemp farm located in Lanesboro, Minnesota. Hummel and 5th Sun Gardens (collectively, “Hummel”) were licensed to participate in the Industrial Hemp Pilot Program (“Pilot Program”) that is administered by the Minnesota Department of Agriculture (“MDA”). MDA revoked Hummel's license after receiving a report from a law-enforcement agency that Hummel had violated federal and state law and program guidelines. After MDA denied Hummel's request for a hearing, Hummel brought this lawsuit, alleging (among other things) that MDA and several of its employees had deprived him of property without due process. This matter is before the Court on defendants' motion to dismiss. For the reasons that follow, defendants' motion is granted in part and denied in part.

         I. BACKGROUND

         Federal law authorizes each state to establish “a pilot program to study the growth, cultivation, or marketing of industrial hemp.” 7 U.S.C. § 5940(a)(1). Pursuant to this authorization, the Minnesota Legislature enacted the Industrial Hemp Development Act, Minn. Stat § 18K.01 et seq. Section 18K.09 of the Act establishes a pilot program administered by MDA.[1] Someone who wishes to participate in the Pilot Program must obtain a license-and, to obtain a license, he must enter into a memorandum of understanding (“MOU”) with MDA. As the MOU explains, the Pilot Program “establishes an agency relationship with Pilot Participants, who operate as extensions of MDA for purposes of researching the growth, cultivation, and marketing of industrial hemp.” ECF No. 19 at 4. A license to participate in the program is effective until the last day of the calendar year in which it is issued, at which point participants must reapply and enter into a new MOU. Id. at 7.

         In January 2019, Hummel was issued a license to grow and process industrial hemp as a participant in the Pilot Program. On March 15, 2019, a Fillmore County sheriff's deputy conducted a traffic stop on an individual who claimed to be transporting and marketing hemp products on Hummel's behalf. The deputy seized the products, which included “wax” and “vape tips.” The products were later tested and found to have delta-9 tetrahydrocannabinol (“THC”) concentrations of 3.6 percent and 3.11 percent respectively-far in excess of the 0.3 percent maximum concentration allowed by program guidelines and federal and state law. See 7 U.S.C. § 5940(a)(2); Minn. Stat. § 18K.02, subd. 3; ECF No. 19 at 8-14. Fillmore County notified MDA, and MDA revoked Hummel's license to grow industrial hemp. ECF No. 19 at 26. MDA also directed Hummel to destroy his current crop. Id.

         Hummel learned that his license had been revoked in a letter that was dated May 1, 2019, and signed by defendant Doug Spanier, Department Counsel for MDA. In response, Hummel invoked his constitutional right to due process and demanded that MDA conduct an evidentiary hearing regarding the events that had led to the revocation. Id. at 29-30. Hummel's demand for a hearing was rejected. Id. at 32-33.

         Hummel then filed this action under 42 U.S.C. § 1983, alleging that MDA and its employees had violated his rights to both substantive and procedural due process under both the United States and Minnesota Constitutions. Hummel seeks a declaratory judgment, injunctive relief, and monetary damages. Defendants have moved to dismiss Hummel's amended complaint under Fed.R.Civ.P. 12(b)(1) and 12(b)(6).

         II. ANALYSIS

         A. Standard of Review

         In ruling on a motion to dismiss for lack of subject-matter jurisdiction, a court is free to weigh the evidence in order to decide whether that evidence establishes that it has jurisdiction. See Osborn v. United States, 918 F.2d 724, 730 (8th Cir. 1990). In reviewing a motion to dismiss for failure to state a claim, a court must accept as true all factual allegations in the amended complaint and draw all reasonable inferences in favor of the non-moving party. Aten v. Scottsdale Ins. Co., 511 F.3d 818, 820 (8th Cir. 2008). The allegations must be sufficient to “raise a right to relief above the speculative level” and to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). In assessing the plausibility of a claim, the Court need not accept as true any allegation that is merely “conclusory.” Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009).

         Hummel argues that, pursuant to Fed.R.Civ.P. 12(d), defendants have converted their motion to dismiss into a summary-judgment motion by introducing matters outside of the pleadings. But in ruling on a motion to dismiss, the Court may consider documents necessarily embraced by the amended complaint and matters of public record without converting the motion into one for summary judgment. See Zean v. Fairview Health Servs., 858 F.3d 520, 526 (8th Cir. 2017). Those are the only matters that the Court has considered, and thus the Court will not treat defendants' motion to dismiss as a summary-judgment motion.

         B. Jurisdiction

         Hummel has sued MDA and four of its employees: Thom Petersen, Doug Spanier, Margaret Wiatrowski, and Anthony Cortilet. The employees are sued in both their official and individual capacities, with the exception of Petersen, who is sued only in his official capacity.

         Under the Eleventh Amendment, the State of Minnesota and its agencies (including MDA) are immune from suit in federal court unless the State has consented to be sued or Congress has expressly abrogated the State's immunity. See Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 100 (1984) (“[A] suit in which the State or one of its agencies or departments is named as the defendant is proscribed by the Eleventh Amendment.”). Hummel points to no evidence of consent or abrogation, and thus all of his claims against MDA are dismissed for lack of subject-matter jurisdiction. See Quern v. Jordan, 440 U.S. 332, 339-41 (1979) (holding that § 1983 does not abrogate States' Eleventh Amendment immunity); Eaton v. Minn. Att'y Gen.'s Office, No. 10-CV- 1804 (JRT/FLN), 2011 WL 1195777, at *3 (D. Minn. Mar. 28, 2011) (“The State of Minnesota has not waived its Eleventh Amendment immunity from suit in federal court for federal constitutional claims.” (citing DeGidio v. Perpich, 612 F.Supp. 1383, 1388-89 (D. Minn. 1985))).

         The Eleventh Amendment also bars claims seeking damages from State officials sued in their official capacities. See Kentucky v. Graham, 473 U.S. 159, 169 (1985). Such claims are barred because “a judgment against a public servant in his official capacity imposes liability on the entity that he represents.” Id. (quotations and citations omitted). The Court therefore does not have subject-matter jurisdiction over the official-capacity claims against the employees insofar as those claims seek damages.[2] Under Ex parte Young, 209 U.S. 123 (1908), however, the Court does have subject-matter jurisdiction over the official-capacity claims insofar as those claims seek declaratory or injunctive relief in order to end a continuing violation of federal law. See Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 73 (1996). Specifically, the Court has subject-matter jurisdiction over Hummel's official-capacity claims insofar as he seeks an injunction “precluding the Defendants from further impugning” his constitutional rights and a declaration that “Defendants must provide the Plaintiffs with notice and opportunity to be heard.” ECF No. 15 at 10.

         The Eleventh Amendment does not bar claims for damages against state officials sued in their individual capacities-as such claims do not seek to impose liability on the state agency that employs those individuals-and thus the Court can exercise subject- matter jurisdiction over the individual-capacity claims against defendants Spanier, Wiatrowski, and Cortilet. See Nix v. Norman, 879 F.2d 429, 433 n.3 (8th Cir. 1989) (claims seeking damages from state officials in their individual capacities are not barred by Eleventh Amendment).

         C. Merits

         To survive defendants' motion to dismiss his official-capacity claims seeking prospective declaratory or injunctive relief, Hummel must plausibly allege that defendants are depriving him of his constitutional right to due process. Hummel's burden with respect to his individual-capacity claims is higher, as defendants have qualified immunity from those claims unless Hummel can plausibly allege that defendants deprived him of a “‘clearly established statutory or constitutional right[] of which a reasonable person would have known.'” Pearson v. Callahan, 555 U.S. 223, 231 (2009) (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982)).

         Hummel alleges that he was deprived of his rights to procedural and substantive due process under the Fourteenth Amendment to the United States Constitution[3] and under Article 1, Section 7 of the Minnesota Constitution. In response, defendants argue that, when Hummel executed the MOU, he waived his right to sue for violations of his constitutional rights. Defendants further argue that, even if Hummel did not waive his right to sue, his ...

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