Charles W. Florance v. Carol C. Barnett

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted October 24, 2023 *
Decided October 25, 2023
Before
DAVID F. HAMILTON, Circuit Judge
MICHAEL Y. SCUDDER, Circuit Judge
JOHN Z. LEE, Circuit Judge
No. 23-1453
CHARLES W. FLORANCE,
Plaintiff-Appellant,
v.
CAROL C. BARNETT, et al.,
Defendants-Appellees.
Appeal from the United States District
Court for the Northern District of
Indiana, South Bend Division.
No. 3:22-CV-399 JD
Jon E. DeGuilio,
Judge.
O R D E R
Charles Florance appeals the dismissal of his lawsuit about his attempts—
ultimately successful—to have his federal student loan canceled because he is disabled.
He sued under 42 U.S.C. §§ 1983 and 1985, alleging that his medical school’s
administrators violated, and conspired with outside attorneys to violate, his rights to
* We have agreed to decide the case without oral argument because the briefs and
record adequately present the facts and legal arguments, and oral argument would not
significantly aid the court. FED. R. A PP. P. 34(a)(2)(C).
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with FED. R. A PP. P. 32.1

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due process and equal protection. The district court granted the defendants’ motions to
dismiss, concluding that Florance was not deprived of any property and that
disability-based discrimination is not actionable under § 1985. We affirm.
Florance attended Indiana University School of Medicine in the fall of 2016,
financing his education with a Primary Care Loan under a program administered by the
United States Department of Health and Human Services (HHS). Florance withdrew
from school the following spring. In 2019, the University initiated collections
proceedings against Florance in state court, asserting that his student loan was
delinquent. Lawyers from a private firm represented the University. While the state
case was pending, Florance informed the University that the Department of Veterans
Affairs (VA) had recently rated him as having a permanent and total disability. He
asserted that this excused him from paying back his loan and asked the University to
recommend to HHS that his loan be canceled. The University took no action.
About seven months later, after some prodding by Florance, HHS requested a
recommendation from the University. The relevant administrators, concluding that
Florance did not meet the statutory requirements for cancelation because he appeared
to be gainfully employed, recommended that HHS deny the request. The administrators
did not mention Florance’s VA disability rating. When HHS denied the cancelation
request, Florance quickly disputed the decision. Within two months, the agency
changed its determination and canceled Florance’s loan. The University dismissed the
collection case shortly thereafter.
Florance brought this suit under 42 U.S.C. §§ 1983 and 1985 against several
University administrators and the attorneys who brought the University’s collection
case. Florance asserted that the defendants deprived him of property without due
process by failing to recommend his loan for cancelation and that they conspired to
violate his rights out of hostility toward persons with disabilities.
The University defendants and the attorney defendants separately moved to
dismiss the complaint. They supported their motions with seven documents from the
state-court record and two letters between the University and HHS about Florance’s
loan. The district court agreed with the defendants that it could take judicial notice of
the state-court documents and that it could consider the letters because they were
mentioned in, and central to, Florance’s complaint. The district court ultimately granted
the motions to dismiss and concluded that amending the complaint would be futile. The
court dismissed the complaint with prejudice and entered judgment.

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No. 23-1453 Page 3
On appeal, Florance first contests the district court’s reliance on extrinsic
documents in ruling on the motions to dismiss, but the court did not abuse its discretion
when it considered the defendants’ exhibits without treating the defendants’ motions as
motions for summary judgment. See Ronald D. Fosnight & Paraklese Techs., LLC v. Jones,
41 F.4th 916, 922 (7th Cir. 2022). The state court documents—which included the docket
sheet, court orders, and a stipulated partial dismissal—were matters of public record
and not subject to reasonable dispute, so the court could properly take notice of them.
See FED. R. EVID. 201(b); Olson v. Bemis Co., 800 F.3d 296, 305 (7th Cir. 2015). As for the
letters, Florance discussed them in his complaint, and they were central to his primary
grievance: One was the University’s recommendation to HHS, and the other was HHS’s
denial of cancelation. Therefore, the court properly considered them. See Brownmark
Films, LLC v. Comedy Partners, 682 F.3d 687, 690 (7th Cir. 2012).
As to the dismissal for failure to state a claim, we review the decision de novo,
accepting Florance’s factual allegations as true and drawing reasonable inferences in his
favor. Dix v. Edelman Fin. Servs., LLC, 978 F.3d 507, 512 (7th Cir. 2020).
Florance first contends that his complaint states a procedural due process claim,
but his allegations do not plausibly suggest that he had any protected interest, which is
a threshold question. See Booker-El v. Superintendent, Ind. State Prison, 668 F.3d 896, 900
(7th Cir. 2012). A “unilateral expectation” does not rise to the level of a property
interest. Bd. of Regents v. Roth, 408 U.S. 564, 577 (1972). Rather, an interest arises from an
independent source of substantive rights, such as a statute or public contract, see id., and
it triggers procedural protections only when the state’s discretion is so constrained that
it cannot deny a person the interest except under specific conditions. Booker-El, 668 F.3d
at 900; see Manley v. Law, 889 F.3d 885, 890 (7th Cir. 2018) (substantive interest can be
found in “federal positive law” and “must be a freestanding entitlement”).
Florance lacks any such substantive interest. He asserts that, because the VA
found him permanently and totally disabled, he had a property interest in the form of
an absolute right to the cancelation of his loan. But the statute governing Florance’s loan
program mandates cancelation if HHS—not another agency—determines that the
borrower has become “permanently, and totally disabled.” 42 U.S.C. § 292(r)(d). The
implementing regulations explain that a borrower who is “unable to engage in any
substantial gainful activity” because of a medical impairment is permanently and
totally disabled. 42 C.F.R. § 57.211(a). Neither provision demands cancelation upon a
finding of permanent and total disability by the VA, which defines that term differently.
See 38 C.F.R. § 3.340; cf. 20 U.S.C. § 1087(a)(2) (explaining that recipients of certain loans

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administered by the Department of Education shall be considered permanently and
totally disabled if the VA deems them unemployable). On the contrary, the Secretary of
HHS has discretion to decide whether a request for cancelation should be granted based
on statutory criteria. See Rock River Health Care, LLC v. Eagleson, 14 F.4th 768, 774
(7th Cir. 2021) (distinguishing “discretionary determination” from “entitlement”).
Florance therefore fails to state a claim for a violation of due process.
The same conclusion must hold for the alleged conspiracy to violate Florance’s
right of due process. To state a claim under § 1983 through a conspiracy theory, there
must be an actual deprivation of rights. See Dix, 978 F.3d at 518. No matter who the
defendants are, Florance lacks the protected property interest needed to state a claim.
Florance’s assertions of a conspiracy to violate his rights fare no better under
42 U.S.C. § 1985(2)–(3). Although Florance brings these claims against both sets of
defendants, “[t]he function of § 1985(3) is to permit recovery from a private actor who
has conspired with state actors,” so the § 1985 claims against the state defendants, who
can be sued directly under § 1983, are “superfluous.” See Fairly v. Andrews, 578 F.3d 518,
526 (7th Cir. 2009). Regardless, Florance’s allegations do not add up to a claim that
anyone conspired to interfere with his civil rights. As to § 1985(2), we agree with the
district court that only the second clause—which prohibits conspiracies to obstruct
justice in state courts with the intent to deny someone equal protection of the law—is
conceivably at issue. 1 A violation of either this clause or of § 1985(3)—which more
broadly prohibits conspiring to deprive a “person or class of persons of the equal
protection of the laws”—must involve animus against a suspect class. Milchtein v.
Milwaukee Cnty., 42 F.4th 814, 827 (7th Cir. 2022) (discussing subsection (3)); Kowalski v.
Boliker, 893 F.3d 987, 1001 (7th Cir. 2018) (discussing the second clause of subsection (2)).
Florance is not a member of a suspect class for purposes of § 1985 and therefore
cannot state a claim. His allegation that the defendants acted out of animus toward
persons with disabilities does not suffice because, as he concedes, the precedent in this
circuit precludes disability-based claims under § 1985. D’Amato v. Wis. Gas Co., 760 F.2d
1474, 1486 (7th Cir. 1985). And although Florance also contends that D’Amato does not
or should not apply to persons, like him, with total and complete disabilities, the line he
tries to draw does not amount to a “compelling reason” for us to overturn circuit
precedent. United States v. Lara-Unzueta, 735 F.3d 954, 961 (7th Cir. 2013). That is enough
1 The first clause prohibits conspiracies to intimidate parties or witnesses in
federal court.

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of a reason to reject Florance’s claim, and we need not consider whether, as the district
court concluded, his allegations of animus were insufficient. To the extent he intends to
seek further review, he has preserved his challenge to D’Amato.
Finally, we agree with the district court’s decision to dismiss with prejudice and
enter final judgment without affording Florance the chance to amend his pleadings
because amendment would be futile. Indeed, Florance has not offered any amendment
that could generate a legally viable claim. The problems we have described are matters
of law and cannot be remedied with new or augmented factual allegations. See Nowlin v.
Pritzker, 34 F.4th 629, 635 (7th Cir. 2022).
AFFIRMED

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