Florida Statute That Taxed Cable And Satellite Service At Different Rate Violates Dormant Commerce Clause

In Directv Inc., et al v. Florida Department of Revenue, et al (1D13-5444 & 1D14-0292), a divided three judge panel of the First District Court of Appeal held that Florida's imposition of a higher tax on satellite customers than on cable customers violates the dormant Commerce Clause. The court began its opinion as follows:

This appeal arises from a final summary judgment finding that section 202.12(1), Florida Statutes, which imposes a higher tax rate on satellite services than on cable services, is constitutional. The Appellants, Directv, Inc. and Echostar, L.L.C. (“the satellite companies”), contend that the statute unconstitutionally discriminates against interstate commerce in both effect and purpose, which is in violation of the Commerce Clause. We agree and reverse.

Generally, the complaint arises from a legislative change, "the Communications Services Tax Simplification Law (“the CST”), which imposed a differential tax rate for cable and satellite services." When that law was enacted, codified at § 202.12(1), Fla. Stat. (2001), cable service began being taxed at 6.8 percent and satellite service at 10.8 percent. " (taxing cable service at 6.8 percent and satellite service at 10.8 percent). Currently, cable service is taxed at a rate of 6.65 percent, and satellite service is taxed at a rate of 10.8 percent."

"It is this difference in taxation rates that the satellite companies allege[d] violates the dormant Commerce Clause," and the court agreed.

The court first addressed the state's argument that "the satellite companies cannot seek a tax refund because they failed to exhaust the available administrative remedies." The court agreed that the satellite companies had failed to exhaust their administrative remedies but noted that "[i]f a taxpayer is seeking a refund pursuant to section 215.26, Florida Statutes, and the sole basis for the refund is that the statute imposing the tax is facially unconstitutional, the circuit court will have jurisdiction despite the taxpayer’s failure to exhaust administrative remedies. Sarnoff v. Fla. Dep’t of Highway Safety & Motor Vehicles, 825 So. 2d 351, 357 (Fla. 2002). This exception is known as the direct-file exception. Id."

The state argued that the direct-file exception, discussed above, did not apply because "this is not a facial challenge to the statute." The court disagreed, concluding that "[a] party can pose a facial challenge to a statute by arguing that there is no set of circumstances where it could apply constitutionally because of its discriminatory purpose or its discriminatory effect on interstate commerce."

To the merits of the dispute, the court stated that the "The Commerce Clause states, 'The Congress shall have power to . . . regulate Commerce with foreign Nations, and among the several states.' Article I, § 8, cl. 3, U.S. Const. Attendant with this grant of authority to Congress, the United States Supreme Court has recognized a dormant Commerce Clause, which limits the states’ power to regulate interstate commerce. Simmons v. State, 944 So. 2d 317, 329 (Fla. 2006). A state or local regulation violates the dormant Commerce Clause if the regulation treats out-of-state commerce differently from in-state commerce. Reinish v. Clark, 765 So. 2d 197, 211 (Fla. 1st DCA 2000)."

"There are three ways in which a statute can discriminate against out-of-state interests: (1) it may be facially discriminatory; (2) it may discriminate in its practical effect; or (3) it may have a discriminatory intent." Citing Amerada Hess Corp. v. Dir., Div. of Taxation, N.J. Dep’t of Treasury, 490 U.S. 66, 75 (1989).

Applying this test, the court disagreed with the trial court and concluded that the cable and satellite providers, stating:

Here, cable and satellite companies provide multichannel television programming to Florida subscribers. As such, they operate in the same market and are direct competitors within that market. They differ in the deployment of technology, the need for local infrastructure, and the additional services offered. However, mere differences in how a service is provided is not enough to overcome the fact that the companies compete in the same market and sell virtually identical products at retail. 

Next, the court turned to whether there were "in-state interests," stating that "[i]n addition to a finding the companies at issue are similarly-situated entities, courts must also find in-state interests to be present in order for the Commerce Clause to be implicated." The court stated that the "Commerce Clause analysis focuses not on the domiciles of particular corporations, but on whether a law results in differential treatment of in-state and out-of-state economic interests." In this case, "[b]ecause the sales tax portion of the CST burdens interstate commerce by imposing a higher tax rate on those communication companies that do not invest in local economies, it violates the Commerce Clause."

The court then turned to "effect case law," arguments concerning the "aggregate tax rate," and the state's arguments regarding operational differences. All three arguments made by the state were rejected, and the court concluded that "[b]ecause the CST has a discriminatory effect on satellite companies, it violates the Commerce Clause, and the trial court erred in finding otherwise."

After concluding that the legislation had a discriminatory effect, the court next analyzed whether the statute had a discriminatory purpose. "To determine whether there is discriminatory purpose, courts look to the language and the legislative history of the statute in question." Concluding that the trial court correctly limited its review to information in the actual legislative history, the court affirmed the conclusion that the record did not support a finding of discriminatory intent.

Based upon the finding of discriminatory effect, the court reversed the judgment of the trial court. The court's opinion was written by Judge Roberts, and Judge Swanson concurred. A dissenting opinion was filed by Judge Marstiller.

Judge Marstiller's dissenting opinion stated, in part, as follows:

I do not agree the satellite and cable providers are similarly situated entities for purposes of dormant Commerce Clause analysis; in my view, the majority opinion fails to fully consider all the differences between the two.3 Mainly, however, I disagree with the majority’s characterizing the cable providers’ use of local infrastructure, reliance on local rights-of-way and employment of Florida workers as in-state economic interests giving rise to the proscriptions of the dormant Commerce Clause. As the trial court found based on the undisputed facts brought out below, “[t]he cable companies may have more of a presence in the state because of the nature of the technology they utilize in providing their services, but the satellite companies have a significant presence in the state as well.” Indeed, DirecTV and Echostar filed verified statements below averring that each has employees based in Florida—DirecTV has independent contractors here, as well—who are responsible for “sale of its services and installation, servicing, and/or maintenance of its property.” I do not believe we can properly ignore or discount these facts. Inasmuch as the cable providers and the satellite providers both have human and physical assets in Florida which they use to provide services to their customers, they both have significant in-state economic interests. I fail to see how, under these facts, the cable providers have local economic interests, but the satellite providers do not. And I find nothing in dormant Commerce Clause jurisprudence that would justify invalidating Florida’s CST based on one group’s comparatively greater economic investment in the state where both groups have economic investment here.

***

I also believe the majority opinion, in focusing solely on the extent of instate economic investment by cable providers and disregarding in-state investment by satellite providers, misapprehends the purpose of the dormant Commerce Clause. Relying primarily on the fact that the cable providers use local rights-of way, the majority opinion discounts the decisions of the Sixth Circuit Court of Appeals, the Ohio Supreme Court and the North Carolina Court of Appeals holding that the pertinent distinction between satellite providers and cable providers is operational and not geographical. 

***

The bottom line is that the dormant Commerce Clause does not protect satellite TV providers from differential tax treatment simply because their technology is not land based. It does not protect “the particular structure or methods of operation in a retail market.” Exxon Corp., 437 U.S. at 127. The majority’s decision to invalidate Florida’s CST is inconsistent with this principle and contrary to dormant Commerce Clause jurisprudence. I understand the concern over a taxing scheme that appears to favor one group of industry competitors over another. But “‘applying the dormant Commerce Clause in cases that do not present the equivalent of a protective tariff’—i.e., where the tax does not draw geographic lines, favor local products, or promote local companies—[ ] ‘dramatically increase[s] the clause’s scope.’” Levin, 941 N.E.2d at 1194 (quoting Treesh, 487 F.3d at 481). The majority’s decision takes that dramatic step, and I  am not prepared to follow.

U.S. Supreme Court Upholds Florida Ban on Judges Soliciting Campaign Contributions

Today, in Williams-Yulee v. Florida Bar, the United States Supreme Court affirmed Florida Supreme Court's opinion upholding the Florida Bar's ban on judicial candidates soliciting campaign contribution. The opinion is broken into numerous parts, as described by the Court below:

ROBERTS, C. J., delivered the opinion of the Court, except as to Part II. BREYER, SOTOMAYOR, and KAGAN, JJ., joined that opinion in full, and GINSBURG, J., joined except as to Part II. BREYER, J., filed a concurring opinion. GINSBURG, J., filed an opinion concurring in part and concurring in the judgment, in which BREYER, J., joined as to Part II. SCALIA, J., filed a dissenting opinion, in which THOMAS, J., joined. KENNEDY, J., and ALITO, J., filed dissenting opinions.

The majority opinion began as follows:

CHIEF JUSTICE ROBERTS delivered the opinion of the Court, except as to Part II.

Our Founders vested authority to appoint federal judges in the President, with the advice and consent of the Senate, and entrusted those judges to hold their offices during good behavior. The Constitution permits States to make a different choice, and most of them have done so. In 39 States, voters elect trial or appellate judges at the polls. In an effort to preserve public confidence in the integrity of their judiciaries, many of those States prohibit judges and judicial candidates from personally soliciting funds for their campaigns. We must decide whether the First Amendment permits such restrictions on speech.

 We hold that it does. Judges are not politicians, even when they come to the bench by way of the ballot. And a State’s decision to elect its judiciary does not compel it to treat judicial candidates like campaigners for political office. A State may assure its people that judges will apply the law without fear or favor—and without having personally asked anyone for money. We affirm the judgment of the Florida Supreme Court.

And, the majority opinion concluded:

The desirability of judicial elections is a question that has sparked disagreement for more than 200 years. Hamilton believed that appointing judges to positions with life tenure constituted “the best expedient which can be devised in any government to secure a steady, upright, and impartial administration of the laws.” The Federalist No. 78, at 465. Jefferson thought that making judges “dependent on none but themselves” ran counter to the principle of “a government founded on the public will.” 12 The Works of Thomas Jefferson 5 (P. Ford ed. 1905). The federal courts reflect the view of Hamilton; most States have sided with Jefferson. Both methods have given our Nation jurists of wisdom and rectitude who have devoted themselves to maintaining “the public’s respect . . . and a reserve of public goodwill, without becoming subservient to public opinion.” Rehnquist, Judicial Independence, 38 U. Rich. L. Rev. 579, 596 (2004).

It is not our place to resolve this enduring debate. Our limited task is to apply the Constitution to the question presented in this case. Judicial candidates have a First Amendment right to speak in support of their campaigns. States have a compelling interest in preserving public confidence in their judiciaries. When the State adopts a narrowly tailored restriction like the one at issue here, those principles do not conflict. A State’s decision to elect judges does not compel it to compromise public confidence in their integrity.

The judgment of the Florida Supreme Court is Affirmed.

Justice Breyer’s concurrence is found on page 29. Justice Ginsburg’s opinion concurring in part and concurring in judgment, an opinion joined by Justice Breyer as to Part II, begins on page 28. Justice Scalia’s dissent, joined by Justice Thomas, begins on page 33. Justice Kennedy’s dissent begins on page 46. Finally, Justice Alito’s dissent begins on page 52.

Fourth District On The Retroactive Application of Section 768.0755 (Conflict Certified), Jury Interviews, & Non-Delegable Duty of Care

 In Pembroke Lakes Mall LTD v. McGruder (4D11-4005), the Fourth District affirmed in part, reversed in part, and certified conflict with the Third District’s decision in Kenz v. Miami-Dade County, 116 So. 3d 461 (Fla. 3d DCA 2013). The court “conclude[d] the trial court properly denied the Mall’s motion for directed verdict and the court did not abuse its discretion by denying the motion for mistrial following McGruder’s improper arguments. We also affirm the trial court’s decision to not apply section 768.0755 retroactively, and we certify conflict with the Third District on that issue. We reverse on the issues of the juror interviews and the cross-appeal, and remand for the court to allow Pembroke Lakes and Millard to conduct interviews of the jurors.”

Retroactive Application of Statute

The court first addressed “whether section 768.0755, Florida Statutes (2010), applies retroactively.” In 2001, in a slip and fall case, the Florida Supreme Court held that “all premises owners owe a duty to their invitees to exercise reasonable care to maintain their premises in a safe condition.” Owens v. Publix Supermarkets, Inc., 802 So. 2d 315, 320 (Fla. 2001). The Fourth District stated that “in 2002, apparently in response to Owens, the Florida Legislature enacted section 768.0710, Florida Statutes (2002), establishing the ‘burden of proof in claims of negligence involving transitory foreign objects or substances against persons or entities in possession or control of business premises.’” However, in 2010, the legislature again amended the statute in a substantial way. "The legislature repealed section 768.0710 and replaced it with section 768.0755, Florida Statutes (2010) and therein provided an effective date of July 1, 2010. In revising the law and repealing section 768.0710, the legislature did not state the new statute should apply retroactively. Section 768.0755 is entitled ‘Premises liability for transitory foreign substances in a business establishment’.”

The issue was whether the 2002 version of the law, or the 2010 version enacted after the alleged incident, would apply to this claim. To determine whether a statute can be applied retroactively:

The Florida Supreme Court has set a two-prong test for determining whether a statute applies retroactively: “‘First, the Court must ascertain whether the Legislature intended for the statute to apply retroactively. Second, if such an intent is clearly expressed, the Court must determine whether retroactive application would violate any constitutional principles.’” Fla. Ins. Guar. Ass’n v. Devon Neighborhood Ass’n, 67 So. 3d 187, 195 (Fla. 2011) (quoting Menendez v. Progressive Express Ins. Co., 35 So. 3d 873, 877 (Fla. 2010)).

“As to the first prong, legislative intent, the legislature gave no indication in section 768.0755 that the statute was to be applied retroactively.” However, “the general rule against retroactive application of statutes does not apply to procedural or remedial changes.” "Thus, the issue is whether section 768.0755 is procedural or substantive. ‘ S]ubstantive law prescribes duties and rights and procedural law concerns the means and methods to apply and enforce those duties and rights.' Alamo Rent-A-Car, Inc. v. Mancusi, 632 So. 2d 1352, 1358 (Fla. 1994) (citation omitted).”

As to this specific change, and contrary to the Third District’s conclusion in Kenz, the court stated that “the shift from 768.0710 to 768.0755 was far more than a simple procedural change to the burden of proof.” The court also “respectfully disagree[d] with the Kenz court’s conclusion that applying section 768.0755 retroactively would not abolish a plaintiff’s cause of action.” Therefore, the statute could not be applied retroactively.and held that “for these reasons, we affirm the trial court’s decision to apply the 2002 statute (section 768.0710) rather than the 2010 law (section 768.0755), and certify conflict with the Third District’s Kenz decision.”

Post-Trial Jury Interviews

The court also addressed the trial court’s denial of a motion to conduct post-trial jury interviews. "Where, as here, the basis of a request for post-trial interviews is the jurors’ alleged nondisclosure of information during voir dire, “the motion should demonstrate entitlement to a new trial under the three-part test” of De La Rosa v. Zequeira, 659 So. 2d 239, 241 (Fla. 1995).” The court stated that:

Applying these principles to the instant case, we must conclude that the trial court abused its discretion by denying the motion to interview the jurors. “Although generally post-verdict juror interviews are disfavored, where there is adequate proof that a juror may have failed to disclose material information on voir dire, a party is entitled to conduct an interview of the juror.” Hillsboro Mgmt., LLC v. Pagono, 112 So. 3d 620, 624 (Fla. 4th DCA 2013).

The court stated that while the disclosure of prior litigation by a juror is always relevant, it is not always material. "Here, the prior litigation was potentially material to this slip and fall litigation. At least one of the jurors, Jorge, was involved in a personal injury protection lawsuit and may have participated in other litigation that was relevant and material to the instant case.” 

After establishing the information was material, the movant was still required to establish that the juror concealed the information and that the concealment was not the fault of the movant. On those issues, the court stated: 

The concealment prong is met when the juror is “squarely asked for” the information and the juror fails to speak the truth…. The concealment prong may be met if the juror fails to respond to questions from either the court or the parties. … The nondisclosure need not be intentional to constitute concealment. Here, the concealment prong was met because the court unambiguously asked the challenged jurors whether they or their families were involved in or had been involved in any litigation apart from divorces, and all four categorically answered that they had not.

Finally, the third prong addresses whether the cause of the failure to elicit the information was due to the fault of the complaining party. If a juror mentions involvement in litigation and the complaining party does not ask follow-up questions, the party cannot then obtain a new trial because of undisclosed information relating to the litigation. … However, if the juror unambiguously denies involvement in prior litigation, counsel need not ask follow-up questions. Here, the jurors categorically answered that they had not been involved in prior litigation, in response to a clear question posed by the court. The parties were entitled to rely on the sacrosanct underpinnings of voir dire. The jurors’ answers and nondisclosures were not due to the fault of Pembroke Lakes or Millard.

Non-Delegable Duty of Care

The final issue addressed in the court’s 16 page opinion relates to “McGruder’s claim that the trial court erred by refusing to hold Pembroke Lakes liable for the negligence attributed to Millard.” The court’s opinion provides more analysis than is included here but, generally, the court held as follows:

Section 768.0710 imposes a non-delegable duty of care on business owners to maintain their premises in a reasonably safe condition for invitees ….The premises owner cannot avoid liability for the breach of its statutory duty by contracting the maintenance and cleaning function at the [premises] to others. …. When an owner owes a non-delegable duty of care to a plaintiff who obtains a verdict assigning negligence to the owner and a party contracted by the owner, the owner is jointly and severally liable for the negligence attributed to the contracted party. …. Pembroke Lakes raises numerous arguments in opposition to imposing liability against it for the negligence attributed to Millard. We reject each argument

One of the three arguments discussed, and rejected by the court relates to the difference between a non-delegable duty and vicarious liability. Because it is apparently a source of confusion, the court’s clarification is copied below:

Pembroke Lakes’ argument that a finding of agency is required to impose liability against a premises owner for a breach of a non-delegable duty is incorrect. Pembroke Lakes, like many parties and some courts, erroneously conflates the concepts of non-delegable duty and vicarious liability. … Vicarious liability is a form of indirect liability in which a party, who may have not been negligent, can be held liable for the acts of another party. … In contrast, a breach of a non-delegable duty is a form of direct liability, in which a business owner may be liable to the plaintiff for negligently failing to take reasonable efforts to maintain the premises in a safe condition.  

Supreme Court Reverses Florida Supreme Court in Takings Case

In Koontz v. St. Johns River Water Management District, the United States Supreme Court revered THIS Florida Supreme Court decision. In conclusion, the Supreme Court stated:

We hold that the government’s demand for property from a land-use permit applicant must satisfy the requirements of Nollan and Dolan even when the government denies the permit and even when its demand is for money. The Court expresses no view on the merits of petitioner’s claim that respondent’s actions here failed to comply with the principles set forth in this opinion and those two cases. The Florida Supreme Court’s judgment is reversed, and this case is remanded for further proceedings not inconsistent with this opinion.

From the opinion, "ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SCALIA, KENNEDY, and THOMAS, JJ., joined. KAGAN, J., filed a dissenting opinion, in which GINSBURG, BREYER, and SOTOMAYOR, JJ., joined."

A complete listing of the opinions below, briefs, and timeline is available from the SCOTUSblog.

Unanimous Supreme Court On One Person One Vote

In Tennant v. West Virginia Secretary of State, a unanimous Supreme Court reversed a three judge district court's decision that agreed with the plaintiff's "claim that West Virginia’s 2011 congressional redistricting plan violates the “one person, one vote” principle that we have held to be embodied in Article I, §2, of the United States Constitution."

Supreme Court's Health Care Opinion & "Who Joined What"

The opinion is below. If you are reading the opinion, here is a guide:

• 1-6: Syllabus;
• 7-21: Chief Justice Roberts joined by Justice Ginsburg, Justice Breyer, Justice Sotomayor, and Justice Kagan  (labeled pages 1-15 in the opinion);
• 22-38: Chief Justice Roberts alone (labeled pages 16-32 in the opinion);
• 
  

  39-50: Chief Justice Roberts joined by Justice Ginsburg, Justice Breyer, Justice Sotomayor, and Justice Kagan  (labeled pages 33-44 in the opinion);
• 50-51: Chief Justice Roberts alone (labeled pages 44-45 in the opinion);
• 51-65: Chief Justice Roberts joined by Justice Breyer and Justice Kagan (labeled pages 45-59 in the opinion);
• 
  

  66-103: Justice Ginsburg joined by Justice Breyer, Justice Kagan, and Justice Sotomayor;
• 103-126: Justice Ginsburg joined by Justice Sotomayor;
• 127-191: Justice Scalia, Justice Kennedy, Justice Thomas, and Justice Alito; and
• 191-192: Justice Thomas dissenting.

All of the page numbers refer to the page number in the .pdf and the red page numbers are clearly added by me.
HCA Opinion 11-393c3a2

Fifth Amendment Protections Apply When Requiring Decryption of Hard Drive

In In re: Grand Jury Subpoena Duces Tecum Dated March 25, 2011, the Eleventh Circuit released a published opinion and reversed a district court's order finding Doe in civil contempt. 

Doe was subpoened to testify before a grand jury and to bring his external hard drives with him. "The subpoena required Doe to produce the 'unencrypted contents' of the digital media, and 'any and all containers or folders thereon.'” In total, there were approximately 5TB of hard drives and they were encrypted with TrueCrypt. "Federal Bureau of Investigation forensic examiners analyzed the digital media, but were unable to access certain portions of the hard drives" and "the forensic examiners were unable to recover any data." As the court noted, "[e]ssentially, TrueCrypt can make certain data inaccessible; in doing so, the program can create partitions within a hard drive so that even if one part of the hard drive is accessed, other parts of the hard drive remain secured."

After Doe informed the  United States Attorney that he would not decrypt the hard drives, the U.S. Attorney sought and obtained an order providing Doe "immunity for the act of production of the unencrypted drives, but [did] not convey immunity regarding the United States’ [derivative] use of the decrypted contents of the drives." 

Doe appeared before the grand jury and refused to decrypt the hard drives. "The U.S. Attorney immediately moved the district court for an order requiring Doe to show cause why Doe should not be held in civil contempt. The court issued the requested order, requiring Doe to show cause for his refusal to decrypt the hard drives. Doe, responding, explained that he invoked his Fifth Amendment privilege against self-incrimination because the Government’s use of the decrypted contents of the hard drives would constitute derivative use of his immunized testimony, use not protected by the district court’s grant of immunity...The court rejected Doe’s alternative explanations, adjudged him in contempt of court, and ordered him incarcerated."

The court stated:

We turn now to the merits of Doe’s appeal. In compelling Doe to produce the unencrypted contents of the hard drives and then in holding him in contempt for failing to do so, the district court concluded that the Government’s use of the unencrypted contents in a prosecution against Doe would not constitute the derivative use of compelled testimony protected by the Fifth Amendment privilege against self-incrimination. This is so, the court thought, because Doe’s decryption and production of the hard drives would not constitute “testimony.” And although that was the Government’s view as well, the Government nonetheless requested act-of-production immunity. The district court granted this request.

For the reasons that follow, we hold that Doe’s decryption and production of the hard drives’ contents would trigger Fifth Amendment protection because it would be testimonial, and that such protection would extend to the Government’s use of the drives’ contents. The district court therefore erred in two respects. First, it erred in concluding that Doe’s act of decryption and production would not constitute testimony. Second, in granting Doe immunity, it erred in limiting his immunity, under 18 U.S.C. §§ 6002 and 6003, to the Government’s use of his act of decryption and production, but allowing the Government derivative use of the evidence such act disclosed.

$80 Million Punitive Award Unconstitutional; $10 Million Compensatory Award Affirmed In Smoker Case

In R.J. Reynolds Tobacco Company v. Townsend (1D10-4585), the First District upheld a jury verdict against the R.J. Reynolds Tobacco Company for $10.8 million in compensatory damages (prior to deducting due to the 49% of fault attributed to the smoker) but rejected an $80 million punitive damage award as being excessive. Judge Van Nortwick wrote the majority opinion and Judge Marstiller. Judge Wetherell wrote an opinion concurring in part and dissenting in part. The court stated:

The Supreme Court has been “reluctant to identify concrete constitutional limits on the ratio between harm . . . to the plaintiff and the punitive damages award,” State Farm, 538 U.S. at 424. Nevertheless, it has identified a circumstance in which caution is required: “When compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” State Farm, 538 U.S. at 425. As the Supreme Court noted in Gore, however, there is no “simple mathematical formula” that marks the constitutional line. Gore, 517 U.S. at 582. See also State Farm, 538 U.S. at 425 (“We decline again to impose a bright-line ratio which a punitive damages award cannot exceed.”); Martin, 53 So. 3d at 1072 (rejecting RJR’s argument that the United States Supreme Court adopted a bright-line 1 to 1 ratio as a limit on punitive damages).

***

Here, the $10.8 million compensatory damage award—which is substantial by any measure—justifies a lower ratio than 3.7 to 1. Although we find the $40.8 punitive damage award excessive under the Gore and State Farm criteria, a 1 to 1 ratio is unwarranted, however, because the evidence of the extreme reprehensibility and wantonness of RJR’s conduct was substantial. See Gore, 517 U.S. at 575 (noting that “the most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant’s conduct”).

In sum, applying the Gore and State Farm criteria, in view of the substantial compensatory damages awarded here, we agree with RJR that the $40.8 million punitive damage award in this case is constitutionally excessive. Thus, it was error to deny RJR’s motion for new trial or remittitur. Accordingly, we reverse and remand the punitive damages award for the limited purpose of permitting Appellee to choose between a new jury trial solely to determine punitive damages or acceptance of a remittitur judgment on the punitive damages award to be established by the trial court.

Judge Wetherell agreed with the majority as to three challenges not discussed here but would have also reversed the $10.8 million compensatory damages award which was solely comprised of non-economic pain and suffering damages. 

First DCA Certifies Question About Constitutional Guarantee To Adequate Education

In Haridopolos, et al v. Citizens for Strong Schools, Inc., et al (1D10-6285), a divided First District, sitting en banc, denied a petition for writ of prohibition. However, both the majority opinion and the dissent agreed that the following question should be certified to the Supreme Court of Florida as one of great public importance:

DOES ARTICLE IX, SECTION 1(A), FLORIDA CONSTITUTION, SET FORTH JUDICIALLY ASCERTAINABLE STANDARDS THAT CAN BE USED TO DETERMINE THE ADEQUACY, EFFICIENCY, SAFETY, SECURITY, AND HIGH QUALITY OF PUBLIC EDUCATION ON A STATEWIDE BASIS, SO AS TO PERMIT A COURT TO DECIDE CLAIMS FOR DECLARATORY JUDGMENT (AND SUPPLEMENTAL RELIEF) ALLEGING NONCOMPLIANCE WITH ARTICLE IX, SECTION 1(A) OF THE FLORIDA CONSTITUTION?

Chief Judge Benton wrote the majority opinion which was joined by Judge Davis, Judge Van Nortwick, Judge Padovano, Judge Lewis, Judge Clark, and Judge Marstiller. Judge Wolf filed an opinion specially concurring with the majority opinion. Judge Roberts wrote a dissenting opinion which was joined by Judge Hawkes, Judge Thomas, Judge Wetherell, Judge Rowe, Judge Ray, and Judge Swanson.

Majority Opinion

The majority opinion began:

After the trial judge denied their motion to dismiss respondents’ amended complaint for declaratory and supplemental relief, the President of the Florida Senate, the Speaker of the Florida House of Representatives, the Commissioner of Education, and the State Board of Education filed a petition for writ of prohibition, initiating original proceedings here in an effort to bring further proceedings in the circuit court to a halt. Because the present case lies at the intersection of well established rules governing writs of prohibition and significant, but unsettled, questions about Florida’s “paramount duty” to provide “for the education of all children residing within its borders,” Art. IX, § 1(a), Fla. Const., we deny the petition for writ of prohibition, but certify a question of great public importance to the Supreme Court of Florida.....

In the course of its 135 paragraphs, respondents’ amended complaint alleges a failure to make adequate provision “for a uniform, efficient, safe, secure, and high quality system of free public schools” by, e.g., providing insufficient funding for public education, shifting responsibility for educational funding to local governments, providing inadequate resources for teachers’ salaries in particular, and adopting a so-called accountability policy that is an obstacle to high quality. 

The amended complaint alleges that Florida’s public schools are not safe and secure, that graduation rates are too low, that student promotion and retention policies are ineffective, that results of achievement tests reveal various inadequacies, and much more. Petitioners moved to dismiss the amended complaint, relying on Coalition for Adequacy and Fairness in School Funding, Inc. v. Chiles, 680 So. 2d 400, 407 (Fla. 1996), for the proposition that the amended complaint raises only nonjusticiable “political” questions, see Baker v. Carr, 369 U.S. 186, 209 (1962), questionswhich the trial court—and, indeed, any court (according to the petitioners)—lacks jurisdiction to entertain. Rejecting petitioners’ argument that it lacked jurisdiction to decide any facet of any one of the respondents’ claims, the trial court denied the motion to dismiss.

Because “‘In this state, circuit courts are superior courts of general jurisdiction, and nothing is intended to be outside their jurisdiction except that which clearly and specially appears so to be.’”.....The petitioners’ apprehension at the prospect of burdensome discovery demands unduly discounts the protections they and all litigants will enjoy because any discovery that may occur will take place under the supervision of the able trial judge, if and as needed. More fundamentally, the petitioners’ asserted concerns about discovery do not speak to the only issue that is germane in prohibition proceedings: the nature and extent of the lower tribunal’s jurisdiction. A court of general jurisdiction, the circuit court has statutory authority to entertain claims for declaratory judgment." [emphasis is mine]. 

In this case, the majority denied the writ of prohibition because "Prohibition lies to redress an inferior tribunal’s usurpation of jurisdiction, but it does not lie to prevent mere error in the exercise of the inferior tribunal’s jurisdiction.....Prohibition is unavailable to divest a lower tribunal of jurisdiction to hear and determine its own jurisdiction, or to test the correctness of a jurisdictional determination that depends on fact finding the lower tribunal is charged with making.....The writ is narrow in scope, is to be employed with great caution, and, our supreme court has even said, is to be utilized only in 'emergencies.'” [emphasis is mine]. That being said, the majority concluded "There is no emergency here." There is no emergency, according to the majority, because "the trial court has been asked to construe the Florida Constitution, not the constitution of any other state. But analogous questions have arisen under the constitutions of other states, and the majority rule is that educational adequacy provisions in state constitutions are judicially enforceable."

Judge Wolf, Specially Concurring

Judge Wolf wrote an opinion specially concurring with the majority opinion that began:

This is a difficult case because it involves a clash of two extremely important precepts: the concept of separation of powers enumerated in article II, section 3 of the Florida Constitution, and the right of the people to have their will concerning the adequacy of the state’s education system, as expressed in an amendment to article IX, section 1 of the constitution, implemented....On the other hand, the Florida Constitution is a document of the people......The people’s will is expressed through the adoption of constitutional language. The difficult issue is when do the people have a right to enforce their will, as it is expressed in the constitution, through the court system.

Judge Wolf concluded: "In the instant case, the allegations of the complaint, taken as true, indicate a clear failure of the Legislature over a reasonable period of time to assure the fundamental values identified within the amendment were being met. While the remedy suggested by this opinion was not specifically requested by the respondents, they did ask for any other 'relief the court deems proper.' In addition, the complaint requested the adoption of a “remedial plan . . . which includes necessary studies to determine what resources and standards are necessary to provide a high quality education to Florida students.' A request for implementing legislation is necessarily contained within these requests for relief."

Dissenting Opinion

The dissent began: "In Coalition for Adequacy & Fairness in School Funding, Inc. v. Chiles, 680 So. 2d 400, 402 (Fla. 1996), the plaintiffs filed a complaint seeking declaratory relief challenging the funding of the state school system of K-12 education. They alleged that the funding and policies adopted by the legislature did not meet the requirements of article IX, section 1 of the Florida Constitution. They asked the trial court to declare that an adequate education was a fundamental right under the Constitution and that the state had failed to make adequate provision for a uniform system of free public schools as provided for in the Constitution. The trial court dismissed the complaint with prejudice finding that, to grant relief, it would have to usurp or intrude upon the appropriation power exclusively reserved to the legislature. The trial court also found that the complaint presented a non-justiciable political question. Id. On appeal, the Florida Supreme Court affirmed the trial court’s dismissal. Id. at 402, 408."

Later, the dissent stated:

Further, the respondents seek a declaration that would mandate a change in educational policy consistent with their policy views. In their amended complaint, they allege that the state’s current accountability policy is an obstacle to obtaining a high quality education. Education policy matters such as the state’s accountability policies involve thousands of interested persons, including parents, teachers, administrators, and locally elected officials. As in matters of appropriations, under our constitution’s strict separation of powers, only the legislature is properly equipped to balance the competing interests involved in education debates, in addition to other vitally important issues such as criminal justice, health care, economic and environmental regulation, and other matters. Thus, it is solely in the legislative branch that the constitutional values of an “efficient, safe, secure and high quality” school system can be constitutionally defined and implemented. In other words, this question is quintessentially political and thus not justiciable, and the writ of prohibition must issue as the trial court did not have jurisdiction to consider this question.....See generally, The Fla. Senate v. Fla. Public Employees Council 79, 784 So. 2d 404 (Fla. 2001). In Florida Senate, the court recognized that the judiciary has no power to encroach on the legislative process and stated that it is the “final product” of legislation that is subject to judicial review. Id. at 408. Here, however, the respondents seek a declaratory judgment to order the legislature to make policy and appropriation changes in futuro. Thus, while the respondents purport to challenge present appropriations and policies, their prayer for relief seeks to order the legislature to enact policies and increase appropriations, and such relief cannot be granted without interfering in internal legislative affairs, by necessity.

Florida Supreme Court Removes Judge; Discusses Free Speech & Campaign Contributions

In Inquiry Concerning A Judge, No. 09-01 Re: N. James Turner (09-1182), the Florida Supreme Court released an opinion and held "that Judge Turner is unfit to hold judicial office and that removal is the only appropriate sanction. For the reasons stated above, N. James Turner is hereby removed as a judge of Florida‘s Ninth Judicial Circuit." The opinion is interesting and details the facts leading to his removal. Articles can be read in the Orlando Sentinel (Florida Supreme Court permanently removes hugging judge); Miami Herald (State Supreme Court removes central Florida judge); and another in the Orlando Sentinel (Supremes remove Turner from the bench).

The court determined that the conduct was sufficient to warrant removal from the bench without even addressing all of the charges against the judge. The court stated "We need not reach the other specific charge—a charge regarding the solicitation of campaign contributions, which Judge Turner challenges on constitutional grounds." Chief Justice Canady, in an opinion concurring in result and joined by Justice Polston, would have reached the constitutional issue. Chief Justice Canady's opinion stated:

I would address the merits of Judge Turner‘s argument that Canon 7C(1)‘s prohibition of all personal solicitation of campaign contributions by judicial candidates violates the First Amendment of the United States Constitution, hold that prohibition unconstitutional, reject the Panel‘s finding of guilt regarding count 5, but nonetheless remove Judge Turner from office based on his other misconduct.

Chief Justice Canady continued:

Proper judicial restraint does dictate that when legislative or executive action is challenged on constitutional grounds, the courts should avoid the constitutional issue if the case can be decided on other grounds. This principle of judicial restraint has no proper application where the constitutional challenge is to a judicially adopted rule which trenches on constitutional rights. This Court was responsible for the adoption of Canon 7C(1) and is responsible for its continuing existence. To the extent that Canon 7C(1) infringes on speech rights protected by the First Amendment, this Court bears responsibility for the ongoing constitutional violation. When presented with a case which properly presents a constitutional challenge to a rule we have adopted, we should not decline to address it but should use the opportunity to ensure that we have exercised our rule-making power in a way that is consistent with constitutional requirements. If Canon 7C(1) violates the First Amendment, Florida state judges who wish to vindicate their First Amendment rights should not be required to seek relief in federal court or in state circuit court while the Florida Supreme Court remains silent.

After discussing, Carey v. Wolnitzek, 614 F.3d 189, 200 (6th Cir. 2010), Chief Justice Canady concluded:

I similarly conclude that Florida‘s interest in preserving the actual and apparent impartiality of Florida‘s judiciary is not significantly protected by Canon 7C(1). Canon 7C(1) completely chills a candidate‘s speech regarding contributions while providing only marginal protection against actual or perceived judicial bias. I therefore conclude that Canon 7C(1) encroaches on the free speech rights of judicial candidates in violation of the First Amendment of the United States Constitution.

Supreme Court To Hear Exhausting 5.5 Hours Of Oral Argument On Health Care Law

There are many articles about the Supreme Court's order granting certiorari in the health care challenge cases. Some of the articles are linked below:

• New York Times - "Supreme Court to Hear Case Challenging Health Law;" 
• The Miami Herald - "Supreme Court Will Hear Health Care Case This Term;" 
• Wall Street Journal - "Supreme Court Agrees to Rule on Health Law;" 
• Boston Globe - "With national health law under review by Supreme Court, planning in MA 'full steam ahead';" 
• Detroit Free Press  - "Supreme Court justices poised to tackle health care;" and
• Washington Post - "Supreme Court hears health care case, but not Virginia’s."

The Supreme Court's order appears below and all of the briefs filed in the Supreme Court can be viewed at THIS link (via the Supreme Court's website):

U.S. Supreme Court Order List - 11-14-2011

Last week the D.C. Circuit released an opinion regarding the Patient Protection and Affordable Care Act which was discussed HERE. In his dissenting opinion, Circuit Judge Kavanaugh addressed whether jurisdiction is barred by the Anti-Injunction Act which the Supreme Court has now ordered counsel to address in case 11-398. 

The SCOTUSBlog has a lot of coverage as does the ACA Litigation Blog.

D.C. Circuit Upholds Constitutionality Of Health Care Act

In an opinion that begins by indicating the court would "be sparing in adding to the production of paper" already released by "our sister circuits," the U.S. Court of Appeals for the D.C. Circuit released a 103 page opinion upholding the constitutionality of the Patient Protection and Affordable Care Act. Senior Circuit Judge Silberman wrote the opinion for the court and Senior Circuit Judge Edwards concurred with an opinion. Circuit Judge Kavanaugh dissented with an opinion and would have held the court did not have jurisdiction and should not decide the merits. The Court's opinion can be viewed below:

Seven-Sky v. Holder (11-5047)

Articles about the opinion can be read on the Washington Times website, "Appeals Court upholds Obama's health care law," the ACA Litigation Blog, "Breaking News: D.C. Circuit Upholds ACA," and many others including Time Magazine's "In D.C. Circuit Health Reform Ruling, A Big Get For White House."

In the opinion, the court noted that other circuits have already addressed the issue: Thomas More Law Ctr. v. Obama, 651 F.3d 529, 534-35 (6th Cir. 2011); Florida v. U.S. Dep’t of Health and Human Servs., 648 F.3d 1235, 1249-62 (11th Cir. 2011) [HERE at page 3]. Additionally, the Fourth Circuit released opinions on the issue in Virginia v. Sebelius and Liberty University v. Geithner. Other circuit opinions can be viewed at the following links: Third Circuit (New Jersey Physicians v. President of the United States), Sixth Circuit (U.S. Citizens Assoc. v. Sebelius, pending), Ninth Circuit (Baldwin v. Sebelius).

If interested, the ACA Litigation Blog is a great resource and hosted by Santa Clara University Professor of Law Brad Joondeph and Brandon Douglass, Judicial Extern/Office of Staff, Attorneys United States Court of Appeals for the Ninth Circuit. The ACA Litigation Blog has a spreadsheet that updates the status of the 28 lawsuits involving challenges to the Patient Protection and Affordable Care Act. That spreadsheet can be downloaded by clicking on the link at the top of the ACA Litigation Blog. The United States Department of Justice also has a page with the briefs and opinions from the various circuits. That page can be viewed HERE. Finally, the United States Supreme Court has a page, HERE, listing all of the filings in the Supreme Court relating to the Patient Protection and Affordable Care Act. The filings existing on the Supreme Court's page at the time of this blog post are copied below (click the "Read More" link if viewing this post on the main page):

Florida Supreme Court Addresses Takings Clause Of Fifth Amendment

In St. Johns River Water Management District v. Koontz (SC09-713), the Florida Supreme Court applied the United States Supreme Court's case law interpreting the takings clause of the United States Constitution and held:

Accordingly, we hold that under the takings clauses of the United States and Florida Constitutions, the Nollan/Dolan rule with regard to “essential nexus” and “rough proportionality” is applicable only where the condition/exaction sought by the government involves a dedication of or over the owner‟s interest in real property in exchange for permit approval; and only when the regulatory agency actually issues the permit sought, thereby rendering the owner‟s interest in the real property subject to the dedication imposed.

*******

It is both necessary and logical to limit land-use exactions doctrine to these narrow circumstances. Governmental entities must have the authority and flexibility to independently evaluate permit applications and negotiate a permit award that will benefit a landowner without causing undue harm to the community or the environment. If a property owner is authorized to file an inverse condemnation claim on the basis of the exactions theory any time regulatory negotiations are not successful and a permit is denied, two undesirable outcomes inevitably ensue. First, the regulation of land use, deemed by the United States Supreme Court to be “peculiarly within the province of state and local legislative authorities,” would become prohibitively expensive.......Second, and as a result of the first consequence, agencies will opt to simply deny permits outright without discussion or negotiation rather than risk the crushing costs of litigation. Property owners will have no opportunity to amend their applications or discuss mitigation options because the regulatory entity will be unwilling to subject itself to potential liability. Land development in certain areas of Florida would come to a standstill. We decline to approve a rule of law that would place Florida land-use regulation in such an unduly restrictive position.

Based on the above analysis, we conclude that the Fifth District in Koontz IV erroneously applied the Nollan/Dolan exactions test to the offsite mitigation proposed by St. Johns. Since St. Johns did not condition approval of the permits on Mr. Koontz dedicating any portion of his interest in real property in any way to public use, this analysis does not apply. Further, even if we were to conclude that the Nollan/Dolan test applied to non-real property exactions—which we do not—Mr. Koontz would nonetheless fail in his exactions challenge because St. Johns did not issue permits, Mr. Koontz never expended any funds towards the performance of offsite mitigation, and nothing was ever taken from Mr. Koontz. As noted by the United States Supreme Court, Nollan and Dolan were not designed to address the situation where a landowner‟s challenge is based not on excessive exactions but on a denial of development......Here, all that occurred was that St. Johns did not issue permits for Mr. Koontz to develop his property based on existing regulations and, therefore, an exactions analysis does not apply.

Justice Lewis wrote the opinion for the court and was joined by Justice Pariente, Justice Labarga, and Justice Perry. Justice Quince concurred in result only. Justice Polston wrote an opinion concurring in result only and was joined by Chief Justice Canady.

Florida's Medical Malpractice Limits Do Not Violate U.S. Constitution

In Estate of Michelle Evette McCall v. USA (09-16375), the Eleventh Circuit released a published opinion addressing the constitutionality of the limits in Florida on noneconomic medical malpractice damages. The Court held the limit on noneconomic damages is constitutional under the United States Constitution and the takings clause of the Florida Constitution but certified other issues to be determined by the Florida Supreme Court. The court stated:

The central question presented in this appeal is whether Florida’s cap on noneconomic medical malpractice damages, Fla. Stat. § 766.118, violates the Florida or United States Constitutions. The Estate of Michelle McCall, Ms. McCall’s parents, and the father of Ms. McCall’s son (collectively “Plaintiffs”) also appeal the District Court’s application of that statutory cap. After thorough review and having had the benefit of oral argument, we conclude that the District Court did not err in applying the cap. We also conclude that Florida’s statutory cap passes muster under the Equal Protection Clause of the Fourteenth Amendment and the Takings Clause of the Fifth Amendment of the United States Constitution as well as the Takings Clause of Article X, § 6(a) of the Florida Constitution. Because no Florida Supreme Court decisions provide controlling guidance to resolve Plaintiffs’ other challenges to this cap on noneconomic medical malpractice damages under that state’s Constitution, we grant, in part, Plaintiffs’ motion to certify questions to the Florida Supreme Court.

*****

We certify the following questions to the Supreme Court of Florida:

1. Does the statutory cap on noneconomic damages, Fla. Stat. § 766.118, violate the right to equal protection under Article I, Section 2 of the Florida Constitution?
2.  Does the statutory cap on noneconomic damages, Fla. Stat. § 766.118, violate the right of access to the courts under Article I, Section 21 of the Florida Constitution?
3. Does the statutory cap on noneconomic damages, Fla. Stat. § 766.118, violate the right to trial by jury under Article I, Section 22 of the Florida Constitution?
4. Does the statutory cap on noneconomic damages, Fla. Stat. § 766.118, violate the separation of powers guaranteed by Article II, Section 3 and Article V, Section 1 of the Florida Constitution?

VI.

We affirm the district court’s application of Florida’s statutory cap on noneconomic damages. We also conclude that the cap comports with the Equal Protection and Takings Clauses of the United States Constitution. We conclude that the statute does not constitute a taking in violation of the Takings Clause of the Florida Constitution, and we grant Plaintiff’s motion to certify questions regarding Plaintiffs’ remaining challenges to the cap under state constitutional law to the Florida Supreme Court.

*Disclaimer: GrayRobinson, P.A. was involved in the above-referenced action.

Fifth District Rejects Homeowners Association's Attempt To Retroactively Apply § 720.3085

In Ecoventure WGV, Ltd. v. Saint Johns (5D10-542), the Fifth District addressed "whether section 720.3085, Florida Statutes (2007), may be applied to impose joint and several liability on it for the unpaid homeowner's association assessments incurred by its mortgagor."

After Ecoventure foreclosed on a mortgage, the association sought to impose back assessment incurred by the prior owner on Ecoventure.

The trial court rejected Ecoventure's argument that imposing liability was a retroactive application of the statute because liability only attached for unpaid assessments that were due at the time title was transferred and Ecoventure obtained title after the statute's effective date. The trial court also found that applying the statute did not impair Ecoventure's rights under its mortgage with DMHB because the statute permitted it to seek recovery from DMHB of any amounts it paid.

The Fifth District addressed the contract impairment issue and stated:

Of the arguments raised by Ecoventure, the one we find dispositive is whether applying section 720.3085 impaired its contract rights. The trial court concluded the statute could be applied because it did not impair Ecoventure's rights under its mortgage with DMHB. This, however, is not the appropriate contract on which to focus....

When Ecoventure extended its mortgage to DMHB in 2001, its rights under the Declaration vested. Imposing section 720.3085, which was enacted after the mortgage was extended, completely alters Ecoventure's vested rights by making it jointly and severally liable with the "previous parcel owner for all unpaid assessments that came due up to the time of transfer of title." § 720.3085(2). The court in Coral Lakes Community Association, Inc. v. Busey Bank, N.A., 30 So. 3d 579, 584 (Fla. 2d DCA 2010), recently addressed the very issue raised in this appeal and concluded the enactment of "section 720.3085 cannot disturb that prior, established contractual relationship." We likewise agree that imposing the statute on Ecoventure "would operate to severely, permanently, and immediately change the parties' economic relationship . . . a circumstance not supportable under the law.

First District Holds That Public Adjuster Solicitation Ban Is Unconstitutional

In Kortum v. Sink (1D10-2459), the First District reversed the trial court's decision and held that section 626.854(6), Florida Statutes (2008) "unambiguously bans all solicitation for 48 hours and that this restriction on commercial speech violates Article I, § 4 of the Florida Constitution under the standards of Central Hudson Gas & Electric Corp. v. Public Service Commission of New York, 447 U.S. 557 (1980)."   The statute at issue "bans solicitation by public adjusters for a period of 48 hours."  The court stated:

During its 2007 special session, the Florida Legislature created the Task Force on Citizens Property Insurance Claims Handling and Resolution (Task Force) to make recommendations regarding the 2004-2005 hurricane claims of Citizens Property Insurance Corporation.  During its work, the Task Force became aware of the impact that public adjusters have on the insurance claims process following a hurricane. The Task Force identified abuses on the part of certain public adjusters and proposed legislation to revise the statutes governing public adjusters. Pertinent to this appeal, with respect to solicitation by public adjusters, the Task Force recommended that the legislature enact the following statutory provision:

A public adjuster shall not directly or indirectly through any other person or entity engage in face-to-face or telephonic solicitation or enter into a contract with any insured or claimant under an insurance policy until at least 72 hours after the occurrence of an event that may be the subject of a claim under the insurance policy unless contact is initiated by the insured or claimant.

The language of the statute enacted by the legislature, see § 626.854(6), Florida Statutes (2008), differed from the recommendation and provides as follows:

A public adjuster may not directly or indirectly through any other person or entity initiate contact or engage in face-to-face or telephonic solicitation or enter into a contract with any insured or claimant under an insurance policy until at least 48 hours after the occurrence of an event that may be the subject of a claim under the insurance policy unless contact is initiated by the insured or claimant.

(emphasis added). The legislature changed the language recommended by the Task Force by adding the phrase “initiate contact or” and reducing the temporal length of the solicitation restriction from 72 to 48 hours.

Kortum, a public adjuster, filed a complaint for declaratory and injunctive relief alleging that section 626.854(6) violates his constitutional rights to free speech, equal protection of the laws, and to be rewarded for his industry. Because we agree with Kortum that section 626.854(6) unconstitutionally burdens the commercial free speech rights of public adjusters, we do not address his further contention that the statute violates his right to equal protection of the law or his right “to be rewarded for industry” guaranteed by Article I, § 2 of the Florida Constitution.

Finally, the Court concluded as follows:

In sum, we are persuaded that the Department has failed to prove that section 626.854(6) is narrowly tailored to meet the state’s objectives. “While a statute regulating commercial speech need not be the least restrictive means of achieving the state’s asserted goal objective, it must be narrowly tailored to achieve the desired objective.” Cronin, 774 So. 2d at 875. The Department has not demonstrated that prohibiting property owners from receiving any information from public adjusters for a period of 48 hours is justified by the possibility that some public adjuster may unduly pressure traumatized victims or otherwise engage in unethical or unprofessional behavior. Nor has the Department demonstrated that the other provisions of section 626.854 and the Rules of Professional Conduct and Ethics governing the Florida Association of Public Insurance Adjusters governing public adjusters are insufficient to regulate unduly coercive or misleading solicitation by public adjusters.

You can view the briefs filed in this case by clicking on the following links:

• Initial Brief;
• Answer Brief;
• Amicus Brief filed by Florida Property and Casualty Association;
• Amicus Brief filed by Property Casualty Insurers Association of America;
• Reply Brief;

Fourth DCA Denies Petition Challenging Constitutionality Of Section 57.011, Florida Statutes For Lack Of Jurisdiction

In Achord v. Osceola Farms Co. (4D09-1906), a divided panel of the Fourth District released an opinion relating to the $100 bond an out of state plaintiff is required to post for defense costs in accordance with section 57.011, Florida Statutes.  The majority opinion was written by Judge Warner.  With regard to the statute, the majority stated:

Section 57.011 was first enacted in 1828, well before the enactment of even the earliest Florida constitution containing a provision for access to the courts. Art I, § 9, Fla. Const. (1838). The practical reason for such a statute is to obtain security for a suit being prosecuted by a nonresident plaintiff.

Notably, the court stated:

Further, section 57.011 does not set a condition precedent to filing a cause of action. Only the defendant may invoke its provisions. A defendant may also not opt for dismissal of the claim and instead rely on the alternative provided of looking to the plaintiff’s attorney to cover the cost amount.

The court's conclusion:

Petitioners seek second-tier certiorari review of a decision of the circuit court sitting in its appellate capacity affirming a county court’s order dismissing approximately 1500 non-resident plaintiffs from a county court suit, because none of the plaintiffs posted the $100 bond for defense costs in accordance with section 57.011, Florida Statutes. We deny the petition as we conclude that we do not have jurisdiction under these facts.

***

The foregoing explains why we cannot say that the circuit court departed from the essential requirements of law or violated clearly established principles of law. Even the supreme court decisions appear to diverge when analyzing minimal fees or expenses involved in the litigation process. In a proper case brought to us on direct appeal, this issue would be ripe for our consideration. Our scope of review on second-tier certiorari is much narrower. Because there is no clearly established law to apply to this provision, we must decline jurisdiction.

In a concurring opinion, Judge Levine stated:

Petitioners make a compelling case for the merits of their position. In our constitution, access to the courts is one of the fundamental rights in the Declaration of Rights. Art. I, § 21, Fla. Const. (“The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial or delay.”). It would be very easy to brush aside the requirements for second-tier certiorari jurisdiction to get to the merits of this action. But, we are constrained by the law and the limits of our jurisdiction. “There is a great temptation in a case like this one to announce a ‘miscarriage of justice’ simply to provide precedent where precedent is needed.” Stilson, 692 So. 2d at 983. That temptation also exists in this case, but we do not have the authority to succumb to that temptation and exercise jurisdiction. 

The contours of jurisdiction are not so malleable for us to vindicate the rights of petitioners. As Justice Cardozo stated, “Jurisdiction exists that rights may be maintained. Rights are not maintained that jurisdiction may exist.” Berkovitz v. Arbib & Houlberg, 130 N.E. 288, 291 (N.Y. 1921).

In dissent, Chief Judge Gross stated:

I agree with Judge Cox’s well-reasoned dissent below that section 57.011, Florida Statutes (2009) is unconstitutional. An unconstitutional statute that barricades the courthouse to a group of indigent defendants is a violation of a “clearly established law” that results in a miscarriage of justice under Allstate Insurance Co. v. Kaklamanos, 843 So. 2d 885, 890 (Fla. 2003). 

Gag Order Reversed By Fourth District

In E.I. Du Pont De Nemours and Company v. Aquamar, S.A. (4D09-5166), the Fourth District reversed an order preventing the parties, their counsel or anyone associated with the parties or their counsel from talking to the press and specifically stated they could not "participate, encourage, assist, or abet in the dissemination of any out-of-court publicity in this matter.”  The Fourth District stated:

“In Florida, the limitations imposed by the court on communications between the media and lawyers and/or litigants must be for good cause to assure fair trials." Rodriguez ex rel. Posso-Rodriguez v. Feinstein, 734 So. 2d 1162, 1164 (Fla. 3d DCA 1999). Thus, a gag order should be supported by evidence and findings that any extrajudicial statements made by counsel or the parties pose a substantial or imminent threat to a fair trial. Id.; see also News-Press Publ’g Co. v. Hayes, 493 So. 2d 1, 2 (Fla. 2d DCA 1986) (quashing order restricting extrajudicial statements because it was entered sua sponte without a proper evidentiary hearing). As in Rodriguez, the order on review was not supported by any showing that it was necessary to preclude a substantial likelihood of material prejudice to the trial of the case. Furthermore, there was no evidence presented and there were no findings made that any out-of-court publicity posed a substantial and imminent threat to the fairness of the trial proceedings. Finally, the injunction was entered without proper notice, and is unrestricted in scope and time limit. See Rodriguez, 734 So. 2d at 1165. 

Not Bound By Answer To Certified Question, 11th Circuit Holds Contract Violates Contract Clause

In Reliable Tractor, Inc. v. John Deere Construction & Forestry Company (09-16152), the Eleventh Circuit reversed the district court's summary judgment order that was entered after certifying a question to the Maryland Court of Appeals and stated:

And, we are bound to accept the Maryland Court of Appeals’ conclusion that, under Maryland law, the Act’s good cause provision applies to the agreements. Even so, we conclude that application of the good cause provision would violate the Contracts Clause of the United States Constitution.

The court analyzed the Contracts Clause as follows:

Article I, § 10 of the United States Constitution provides that no state shall pass any law impairing the obligation of contracts. In determining whether a state law violates the Contracts Clause, we ask “whether there is a contractual relationship, whether a change in law impairs that contractual relationship, and whether the impairment is substantial.” General Motors Corp. v. Romein, 503 U.S. 181, 186, 112 S. Ct. 1105, 1109 (1992)....While the Maryland Court of Appeals held that for purposes of Maryland law the dealer agreements in this case should be considered a series of 120 contracts, we are not bound to adopt this interpretation. Rather, we must conduct an independent federal law analysis of the agreements for purposes of the Contracts Clause inquiry.

***

Because the original 1984 dealer agreements were in force in 1998 when the Maryland Act’s good cause provision became law, the Act effected a change in law that impaired an existing contractual relationship—it limited a contractual right to terminate the dealer agreements. And, we conclude that this impairment was substantial. The Maryland Act impairs the contractual right of one party, John Deere, to terminate the contract without cause on 120 days notice. Applying the Act would effectively extend the dealer agreements indefinitely unless John Deere can meet the terms of the Act’s good cause provision. We conclude that this would substantially impair the contractual relationship between John Deere and Reliable Tractor and would violate the Contracts Clause.