[ PUBLISH] 

## In the 

# United States Court of Appeals For the Eleventh Circuit

____________________
No. 22

- 11951

____________________
BETTY M. SMITH, as personal representative of the estate of Shirley T. Cox, JUDITH A. BALLEW, Attorney

- in

- Fact of John E. Ballew, MARK F. LAPP, as personal representative of the estate of Roger J. Lapp,
Plaintiffs

- Appellants,

versus MARCUS & MILLICHAP, INCORPORATED,

Defendant, USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 1 of 152 Opinion of the Court 22

- 11951

MICHAEL BOKOR,

Defendant

- Appellee.

_______ _____________ Appeal from the United States District Court for the Middle District of Florida D.C. Docket No. 8:18

- cv

- 00381

- WFJ

- AAS

____________________ Before B RANCH , L UCK , and T JOFLAT , Circuit Judges.
T

JOFLAT , Circuit Judge : This appeal arises from a putative class action filed on behalf of Florida skilled nursing facility residents and their estates seeking to recover nearly a billion dollars of payments. 1 The Residents alleged that these facilities were improperly licensed unde r Florida law and therefore any services they rendered were “unbillable.” Rather than suing the facilities
, the facilities’ owners
, or the facilities’ license

- holders, the Residents sued Micha e l Bokor

— the purported owner of the nursing facilities’ management company

— and

1 For brevity we refer to putative class action members as “ the Residents. ” The named plaintiff

- appellants are: (1) Betty M. Smith, as personal representative of the Estate of Shirley T. Cox; (2) Judith A. Ballew, attorney

- in

- fact of John E. Ballew; and (3) Mark F. Lapp, as personal representative of the Estate of Roger J. Lapp. Shirley T. Cox, John E. Ballew, and Roger J

. Lapp were all short

- term residents of the nursing homes. USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 2 of 1522

- 11951 Opinion of the Court 3
Marcus & Millichap, Inc. 2 (MMI)

— a marketing company

— b oth of whom the Residents claim played a role in fraudulently obtaining the licenses.After adopting the Magistrate Judge’s Report and Recommendation (R&R), the Distri ct Court dismissed the Residents’ first amended complaint with prejudice . It also rejected the Residents’ objection to the Magistrate Judge’s order denying their motion for leave to file a second amended complaint . The Residents argue that the District C ourt erred . As to the dismissal of their first amended complaint, the Residents argue that the District Court misunderstood Bokor’s role and misinterpreted case law and statutory authority applicable to the case. A s to their motion to amend , the Residents argue that the District Court abused its discretion because their proposed amendments were not futile. After careful review, and with the benefit of oral argument,

we conclude that the Residents waived several objections to the Magistrate J udge’s R&R , which the District Court adopted when granting Bokor’s motion to dismiss. Particularly , the Residents failed to object to the Magistrate Judge’s recommendation that the circumstances warranted abstention under the Colorado River doctrine. Lik ewise, the Residents waived the right to challenge the denial of their motion to amend because their objection to the Magistrate Judge’s order was untimely. We therefore vacate the judgment of the D istrict C ourt and remand with instructions to

2 The Residents voluntarily dismissed their claims against MMI with prejudice during this appeal. USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 3 of 154 Opinion of the Court 22

- 11951

stay the Re sidents’ claims under the Colorado River abstention doctrine

. I. Background
The Residents were clients at twenty

- two short

- term skilled nursing facilities in Florida. According to the first amended complaint
, 3 operational control of these facilities w as dispersed among three entities . T he first owned the land and buildings, the second held the operating licenses, and the third managed the facilities. The Residents allege that these facilities improperly obtained licenses from th e Agency for Health Care Administration (AHCA) by omitting from their license applications that the facilities were operated by two management companies

— first Southern SNF Management, Inc. and then Reliant Health Care Services, Inc. Such information is re quired under Florida law. See Fla . Stat. § 408.806(1)(e) (2023).
Bokor owns SNF and Reliant. The Residents asserted that Bokor submitted the license applications for the facilities. AndMMI was the commercial broker that marketed and sold the facilities to several non

- party landlords
, despite knowing that the facilities were improperly licensed.
The Resident s alleged that all services provided by these facilities were performed by improperly licensed or unlicensed entities. Because of this, the Resident s believe that the facilities had no right to collect payments from residents or reimbursement from

3 Th e first amended complaint is the operative complaint

. USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 4 of 1522

- 11951 Opinion of the Court 5

Medicaid and Medicare. And, “as a result of the [licensing] scheme s ,” the Residents “were injured by being deceived into suffering substandard levels of care.”
On January 5, 2018, the named Residents filed a class actionin the Florida Circuit Court for the Thirteenth Judicial Circuit seeking damages. Shortly after, Bokor removed the ca se to federal

court and moved to dismiss

. T he Resident s then moved to remand

to state court

. They argu ed that the case fell within the local controversy exception to the Class Action Fairness Act (CAFA),
28 U.S.C. § 1332(d)(4) . After the District Court granted the Resident s’ motion, Bokor sought discretionary review and a direct appeal to our C ourt

. We denied Bokor’s application for discretionary review under 28 U.S.C. § 1453(c)(1) , but we permitted his direct appeal under 28 U.S.C. § 1291 to proceed. On direct appeal , we reversed the District Court’s remand order . We held that the Resident s failed to satisfy CAFA’s local controversy or discretionary exceptions. Smith v. Marcus & Millichap, Inc. ( Smith I ) , 991 F.3d 1145, 1161

– 63 (11th Cir. 2021). Following Smith I , t he Resident s moved to amend the complaint for the first time . And the District Court granted the Residents ’ motion

. Beyond swapping Florida Racketeer Influenced and Corrupt Organizations (RICO) Act claims for federal RICO claims, t he first amended complaint largely mirrored the original complaint

. Relevant here, the first amended complaint raise d two counts against Bokor : USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 5 of 156 Opinion of the Court 22

- 11951

• Count II alleged that the facilities and management companies owed a fiduciary duty to residents and breached those duties by operating unlawfully without properly obtained and valid licenses. It also alleged that Bokor aided and abetted the breach of fiduciary duties by preparing and submitting materially false license applications.

• Count IV allege d that Bokor agreed to engage in a pattern of criminal activity in violation the RICO Act, 18 U.S.C. § 1962(d)
, by submitting the false license applications.
Bokor moved to dismiss the first amended complaint arguing, among other things, that the District C ourt should abstain from hearing the case under the Colorado River abstention doctrine

. The Residents requested three extensions to respond to Bokor’s motion, all of which the District Court granted. Rathe r than respond
, the Resident s moved for leave to file a second amended complain t

. Bokor opposed the motion. On September 16, 2021, t he Magistrate Judge agreed with Bokor and denied the Residents’ motion to amend. The Magistrate Judge found that the propo sed second amended complaint was futile and did not address any issues raised in Bokor’s motion to dismiss

. The Magistrate Judge also noted that the only substantive change in the proposed second amended complaint was a new conspiracy count against Bokor, similar to the count already asserted against MMI. The Magistrate Judge further reasoned that the Resident s ’ motion was untimely. Not only was the motion filed at the last USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 6 of 1522

- 11951 Opinion of the Court 7

minute that their response to Bokor’s motion was du e , the Residents also provided no explanation why the conspiracy claimagainst Bokor could not have been added to the first amended complaint. Last, the Magistrate Judge concluded that allowing the amendment would prejudice Bokor . Allowing the amendment would require Bokor to move for dismissal a third time when the Residents had “only re

- organized and re

- numbered paragraphs” in the complaint. T he Residents did not object to the Magistrate Judge’s order within fourteen days under Federal Rule of Civil Pr ocedure 72(a) and 28 U.S.C. § 636(b)(1). In her order denying the Residents’ motion to amend , the Magistrate Judge also ordered the Residents to respond to Bokor’s motion to dismiss. Once briefing was complete, the Magistrate Judge held a two

- hour hearing and allowed post

- argument submissions. Finally, on January 24, 2022, the Magistrate Judge issued an R&R recommending that the District Court grant Bokor’s motion to dismiss. The Magistrate Judge based her recommendation on five independent b ases : (1) lack of standing, (2) failure to state a claim, (3) the primary administrative jurisdiction doctrine, 4 (4) res

4 The primary administrative jurisdiction doctrine is “ a doctrine specifically applicable to claims prope rly cognizable in court that contain some issue within the special competence of an administrative agency. It requires the court to enable a ‘referral’ to the agency, staying further proceedings so as to give the parties reasonable opportunity to seek an administrative ruling. ” Reiter v. Cooper , 507 U.S. 258, 268 (1993). USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 7 of 158 Opinion of the Court 22

- 11951
judicat a (as to Lapp), and (5) Colorado River abstention

. 5 On March 7, 2022, following several extensions, the Residents objected to the R&R. The Residents’ objections focused on the R&R’s rejection of their void ab initio license theory . They also objected to the R&R ’ s conclusion that the Residents lacked standing to recover allegedly improper claims submitted to Medicare and Medicaid and the R&R’s conclusion that the Residents failed to allege proximate causation for their RICO claims. Last, the Residents objected to the Magistra te Judge’s earlier denial of their motion to amend. The Residents did not object to the R&R ’ s other findings , including the recommendation of Colorado River abstention

. After another hearing, the District Court accepted and adopted the R&R i n full. The R esidents timely appealed. II. Legal Standards Generally, “ [w] e review a district court’s ruling on a motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) de novo .” Myrick v. Fulton County
, 69 F.4 th 1277 , 1294 (11 th Cir. 2023). “Likewise, we [generally] review a district court’s grant of a motion to dismiss for failure to

5 “ Colorado River abstention allows a federal court to stay a case only ‘whenfederal and state proceedings involve substantially the same parties and substantially the same issues.’” Taveras v. Bank of Am. , N.A. , 89 F.4th 1279, 1286 (11th Cir. 2024) (quoting Ambrosia Coal & Const r . Co. v. Pag é s Morales
, 368 F.3d 1320, 1 330 ( 11th Cir. 2004))

. S ee generally Colo

. River Water Conservation Dist. v. United States , 424 U.S. 800 (1976). USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 8 of 1522

- 11951 Opinion of the Court 9
state a claim under Federal Rule of Civil Procedure 12(b)(6) de

novo .” Id. “We accept the factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff.” Id. That said, a party who fails to object to a magistrate judge’s findings or recommendations in an R&R “waives the right to challenge on appeal the district court’s order based on unobjected

- to factual and legal conclusions if the party was informed of the time period for objecting and the consequences on appeal for failing to object.” 11 th Cir. R

. 3

- 1 . If necessary, we can revie w the unobjected

- to findings and conclusions of the magistrate judge for “ plain error or manifest injustice.” Res ol . Tr. Corp. v. Hallmark Builders, Inc. , 996 F.2d 1144, 1149 (11 th Cir. 1993) (per curiam)

.

“ Although we ordinarily review district court ord ers denying leave to amend a complaint for abuse of discretion, we review such decisions de novo when ‘ the denial is based on a legal determination that amendment would be futile

. ’ ” Taveras v. Bank of Am., N.A. , 89 F.4 th 1279, 1285 (11 th Cir. 2024) (first citing Andrx Pharms., Inc. v. Elan Corp. , 421 F.3d 1227, 1236 (11 th Cir. 2005) ; and then quoting Gonzale z v. City of Deerfield Beach , 549 F.3d 1331, 1332

– 33 (11 th Cir. 2008)). But “ where a party fails to timely challenge a magistrate [ j udge ’s ] nondispositive order before the district court, the party waive[s] his right to appeal those orders in this Court.” Smith v. Sch. Bd. O f Orange Cnty. , 487 F.3d 1361, 1365 (11 th Cir. 2007) (per curiam)

. USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 9 of 1510 Opinion of the Court 22

- 11951

III. Discussion
The Residents challenge both the District Court’s dismissal of their first amended complaint and the District C ourt’s denial of their motion to amend. We first address the District Court’s order on Bokor’s motion to dismiss and explain why the Residents waived any objection to the District C ourt’s conclusion on Colorado River abstention

. We then explain why the Residents waived their challenge to the District Court’s denial of their motion to amend.
A. Motion to Dismiss
T he Residents challenge the District Co urt’s order granting Bokor’s motion to dismiss mainly on standing and merits

- based grounds. Bokor argues that we should affirm the District Court’s order because the Residents waived their right to challenge most of the District Court’s reasons for dismis sal . That includes the District Court’s dismissal of Lapp’s claims on res judicata grounds and other class members ’ claims under Colorado River abstention and the primary administrative jurisdiction doctrine

. We agree with Bokor

. And w e do not find it necessary or appropriate to reach the legal issues the Residents raise because they waived arguments against the other reasons in the R&R that the District Court adopted. To begin, because Bokor raises both standing and abstention

concerns , and because we have an independent obligation to ensure standing exists, we must determine whether we may decide this appeal on Colorado River abstention grounds with out confirming the existence of constitutional standing. See FW/PBS, Inc. v. USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 10 of 1522

- 11951 Opinion of the Court 11
City of Dallas , 493 U.S. 215, 231 (1990)

. As the Supreme Court has explained, “a federal court has leeway ‘to choose among threshold grounds for denying audience to a case on the merits.’” Sinochem Int’l Co. v. Malaysia Int’l Shipping Cor p. , 549 U.S. 422, 43 1 ( 2007) (quoting Ruhrgas AG v. Marathon Oil Co. , 526 U.S. 574, 585 (1999) )

. Of course, that leeway “is not unbounded

. ” Fla. Wildlife Fed’n Inc. v. U.S. Army Corps of Eng’rs , 859 F.3d 1306, 13 2 4 (11th Cir. 2017) (Tjoflat, J., specially concurring)

. D eciding between threshold nonmerits grounds requires inquiry into a “non

- exhaustive and

case

- specific set of considerations,” including “convenience, fairness, the interests served by structural principles such as federalism and co mit y , and judicial economy and efficiency.” Id. ; see also Sinochem
, 549 U.S. at 4 32

. Here, these consideration s favor deciding this appeal on Colorado River abstention grounds

. 6 Th is is so

6 The Resident s also failed to object to the Magistrate Judge’s res judicata analysis. Whether res judicata is truly a “non

- merits ground for dismissal” and thus a threshold issue is debatable

. Compare Finneman v. Laidlaw , 57 F.4th 605, 608 & n.2 (8th Cir. 2023) ( declining to address res judicata because the plaintiffs lacked standing), with Env’t Conservation Org. v. City of Dallas , 529 F.3d 519, 525 (5th Cir. 2008) ( recognizing that a federal court may have leeway to dismiss on res judicata grounds before determining standing, but concluding that the
court had no such leeway because “the res judicata analysis [was] no less bu rdensome than the standing inquiry ”). W e need not resolve that debate here because, as discussed above, the Residents waived any argument against Colorado River abstention.Additionally, the Residents failed to object to the Magistrate Judge’s primary adm inistrative jurisdiction doctrine analysis . And their initial appellate brief contains no argument on t he primary administrative jurisdiction doctrine issue. We could just as eas ily affirm on this basis instead

. But

— g iven the Magistrate Judge’s finding that the Residents’ counsel has already “ brought USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 11 of 1512 Opinion of the Court 22

- 11951

because , as described below, the Residents waived th is issu e both before the District Court and on appeal

. Under Eleventh Circuit Rule 3

- 1, [a] party failing to object to a magistrate judge ’ s findings or recommendations contained in a report and recommendation in accordance with the provisions of 28 U.S.C. § 636(b)(1) waives the right to challengeon appeal the district court’s order based on unobjected

- to factual and legal conclusions if the party wasinformed of the time period for objecting and the consequences on appeal for failing to object

. That’s what happened here. Nowhere in the Residents’ objection to the R&R did they adequately challenge the Magistrate Judge’s Colorado River analysis

— despite being warned “of all of the consequences that would attach to [their] failure to object

. ” Harrigan v. Metro Dade Police Dep’t Station #4 , 977 F.3d 1185, 1191 (11th Cir. 2020). At best, they make a vague argument that the R&R “mischaracteriz[ed]

. . . other lawsuits which [the Residents] may have filed in state courts in Florida.” That objection failed to “clearly advise the [D]istrict [C]ourt and pinpoint specific findings that the [ Residents] disagree[d] with.” United States v. Schultz , 565 F.3d 1353, 1360 (11th Cir. 2009) (per curiam) . Because the Residents did “not lodg[e] specific objections to the [M]agistrate [J]udge’s reasoning in h[er] R&R

nearly thirty [substantially similar] cases in seven counties through out Florida” against Boko r

— we conclude that the above considerations caution against burdening AHCA in addition to the Florida state courts. USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 12 of 1522

- 11951 Opinion of the Court 13

about” Colorado River abstentio n , they have waived any argument against it

. See Club Madonna Inc. v. City of Miami Beach
, 42 F.4th 1231, 1259 (11th Cir. 2022). True, we can review waived obj ections “for plain error if necessary in the interests of justice.” 11th Cir. R

. 3

- 1. But review for plain error “rarely applies in civil cases.” Ledford v. Peeples
, 657 F.3d 1222, 1258 (11th Cir. 2011). “ Even when it does, we require a greater showing of error than in criminal appeals. ” Evans v. Ga. Reg’l Hosp. , 850 F.3d 1248, 1257 (11th Cir. 2017), abrogated on other grounds by Bostock v. Clayton County
, 590 U.S. 644 (2020)

. T hat

“ rare exception does n’t apply here because [ the Residents ] did n’t argue in [ their ] initial brief that review ing [ their ] waived objections was necessary and in the interests of justice.” Smith v. Dewberry
, No. 21

- 10607 , 2022 WL 1948947, at *2 (11 th Cir. June 6, 2022) (Luck, J., concurring in part and dissenting in part )

. What’s more, the Residents ’ initial appellate brief contains no discussion about Colorado River abstention. At oral argument,

t he Residents’ counsel all but admitted this and tried to explain that this argument was “subsumed” in the initial brief

. But we require parties to raise arguments plainly and prominently. See Sapuppo v. Allstate Floridian Ins. Co. , 739 F.3d 678, 681 (11 t h Cir. 2014)

. And the Residents’ attempt to resurrect any argument against Colorado River abstention in their reply brief comes too late. See id. a t 683. In sum, there is no sign that the interests of justice would be served b y conducting a plain

- error r eview of the dismissal. We therefore decline to review the District Court’s decision to dismiss USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 13 of 1514 Opinion of the Court 22

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the Residents’ first amended complaint on Colorado River abstention grounds.

B. Motion to Amend
T he Residents also argue that the District Court’s adoption of the Magistrate Judge’s order den y ing the ir motion to amend was “highly prejudicial and was improper as a matter of law.” They contend that the second amended complaint was the first pleading designed for federal court requirement s because the case was originally filed in state court. In response, Bokor explains that the Residents ’ objection was untimely and that the proposed second amended complaint was futile as it made only inconsequential changes

. W e agree with Bokor that the Residents’ ob jection c a me too late.

U nder Federal Rule of Civil Procedure 72(a), “[a] party may serve and file objections to the order within 14 days after being served with a copy. A party may not assign as error a defect in the order not timely objected to.” We hav e read Rule 72 to mean that“where a party fails to timely challenge a magistrate’s nondispositive order before the district court, the party waived his right to appeal those orders in this Court.” Smith , 487 F.3d at 1365.
T he Magistrate Judge’s September 1 6 , 2021 , order de nying the Residents ’ motion to amend was a nondispositive pretrial ruling. Under Rule 72(a), t he Residents had to object by September
30 , 2021. But

— as the Residents’ counsel conceded at oral argument

— they did not. Instead, t hey waited 173 days and objected at the tail

- end of the ir objection to the Magistrate Judge’s R&R on USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 14 of 1522

- 11951 Opinion of the Court 15

Bokor’s motion to dismiss

. Because the Residents did not timely object to the Magistrate Judge’s order, they have waived this issue.
IV. Conclusion

As to the District Court’s adopti on of the R&R and dismissal of the Residents’ complaint, we hold that t he Residents waived any objections to the Magistrate Judge’s reasoning in her R&R abo ut Colorado River abstention. We therefore VACATE the judgment of the D istrict C ourt and REMAND with instructions to stay the Residents’ claims under the Colorado River abstention doctrine

. As to the District Court’s denial of the Residents ’ motion to amend, we hold that the Residents failed to timely ob ject to the Magistrate Judge’s order . We therefore AFFIRM on that basis. USCA11 Case: 22-11951 Document: 57-1 Date Filed: 06/28/2024 Page: 15 of 15