There’s been considerable teeth gnashing about a 2013 Florida law allowing politicians to hold their assets in blind trusts, and withhold from public disclosure specification of the assets held in those trusts. But the debate is only theoretical at this point, according to Florida’s First District Court of Appeal. For that reason, in its opinion issued today in Apthorp v. Detzner, the 1st DCA punted on the merits of a challenge to the constitutionality of the blind trust provisions.

Apthorp was an aide to former Governor Rubin Askew, who pushed the passage of the Sunshine Amendment, the first successful ballot initiative in Florida, which is now Article II, section 8 of the Florida Constitution. Among other things, the Sunshine Amendment requires full disclosure by public office-holders of their financial interests, to avoid conflicts of interest in their decision-making. With financial holdings public, if a politician voted in a way that benefitted his/her financial interests, that fact would be known to the public and subject to public scrutiny.  

In 2013, the Florida legislature passed section 112.31425, Florida Statutes, which allows public officials to hold their assets in “qualified blind trusts,” for ostensibly the same purpose — to avoid conflicts of interest. A statewide grand jury convened in 2010 had recommended the use of blind trusts for that purpose.

A public office-holder uses a blind trust by placing his/her money with a manager who has full power to buy and sell assets. In theory, then, the public office-holder would not know whether a decision affects his/her financial interests because he/she doesn’t know the identity of the companies in which the assets of the trust are currently invested.

According to the legislature, “if a public officer creates a trust and does not control the interests held by the trust, his or her official actions will not be influenced or appear to be influenced by private considerations.” Correspondingly, the legislature permitted public office-holders to publicly disclose only the total value of the assets held in a blind trust, and not the individual investments of the blind trust.

Apthorp apparently did not see the blind trust provisions as a positive development. He saw the blind trust reporting provisions as a way for public office-holders to essentially hold on to the assets and avoid public disclosure. Soon after the new provisions were enacted, Apthorp sought to block candidates from taking advantage of them by filing a Petition for Writ of Mandamus to the Supreme Court of Florida.

When the Supreme Court ruled that the case should be heard in circuit court, Apthorp sought a declaratory judgment from the circuit court that the blind trust provisions violated the Sunshine Amendment. The trial court ruled that they do not.

Apthorp challenged that ruling on appeal. But the 1st DCA didn’t reach the constitutional issue. Instead, the 1st DCA vacated the trial court’s declaratory judgment after finding that the trial court lacked jurisdiction to entertain the case at all because there was no justiciable controversy.

A bedrock principle of the court system is that courts are constitutionally empowered only to decide actual disputes between the parties. With few exceptions, courts don’t have jurisdiction to issue “advisory opinions,” i.e., to say how they would rule if a certain set of circumstances were presented to them. The plaintiff must assert an actual controversy: that the defendant violated (or is currently violating) the law, that the plaintiff has been injured by the alleged violation, and must seek redress for the alleged injury.

Suits for declaratory judgment are somewhat of an anomoly because they seek a declaration about a future action — before anyone has been harmed — rather than relief for an injury caused by a past or present harm. For example, in a common type of suit for declaratory judgment, an insurer seeks a declaration that its contract doesn’t require it to cover certain damages. That contrasts with the more traditional paradigm suit, in which, for example, an insured might sue the insurer after it had refused to cover damages, claiming the insurer had breached the contract in doing so.

But there are limits to courts’ ability to hear declaratory judgment suits as well, the 1st DCA explained. Under the Florida Supreme Court’s decision in Martinez v. Scanlan, 582 So. 2d 1167 (Fla. 1991), there must still be an actual controversy, “a bona fide, actual, present practical need for the declaration…” (Applying this principle to the insurer’s declaratory judgment suit, there’s a need for a declaration because there’s a present dispute between the insurer and insured over whether the insurer is required to pay for the damages. But if, for example, an insurer sought a declaration that a certain provision in its contract doesn’t require it to ever cover a certain type of damages, without reference to specific damages incurred by a specific insured, under Martinez, there would appear to be no actual present need for a declaratory judgment.)     

The 1st DCA held that there was no actual present need for a declaration regarding the constitutionality of the blind trust provisions because no candidate or public office-holder had yet sought to take advantage of those provisions. “Not only has no public officer ever used the type of ‘qualified blind trust’ authorized by the statute Apthorp is challenging, but his brief concedes that he knows of no constitutional officer or candidate who incorporated a blind trust in the most recent financial statements.” Until that happened, there would be no justiciable question for the court to decide, only a theoretical issue that might arise in the future.

Because it found the courts lacked jurisdiction to decide the issue, the 1st DCA vacated the trial court’s judgment as improperly entered, leaving the constitutional question open for challenge in a later case. In a special concurrence, Judge Thomas emphasized that the opinion should not be read to take a position on the constitutional issue, and hinted that he saw potential constitutional problems. But that issue will need to await a case in which the concerns are not merely theoretical.   

It is not easy to get the Supreme Court of Florida to hear a case. That is by design: the Florida Constitution was amended in 1980 to curtail the Supreme Court’s jurisdiction so that it may only review a limited number of cases that fall into discrete categories. 

But the Court has a catch-all jurisdictional authority known as “All Writs” jurisdiction. All Writs jurisdiction is derived from Article V, Section 3(b)(7) of the Florida Constitution, which allows the Florida Supreme Court to “issue all writs necessary to complete exercise of its jurisdiction.”     

This constitutional provision has traditionally been interpreted narrowly. It has been understood to confer something akin to supplemental jurisdiction, rather than an independent basis for jurisdiction, and is invoked only in rare cases. 

But disputes involving exceptionally important issues with great time sensitivity appear to fall into the category of rare cases in which the Florida Supreme Court is willing to invoke its All Writs power. In The League of Women Voters of Florida v. Data Targeting, Inc., released May 27, 2014, the Florida Supreme Court was asked to weigh in in a pre-trial dispute in litigation over whether the 2012 apportionment of Florida’s congressional districts was designed to advance partisan political objectives in violation of the Fair District Amendments to the Florida Constitution.  

A week before trial was to begin, the trial judge ruled that documents obtained from a political consultant, which the plaintiffs wanted to use to show that political consultants participated in the redistricting process, could be used as evidence in the trial but would remain confidential. On appeal, the First DCA issued a short order ruling that the documents could not be admitted into evidence, and stating that it would issue an opinion explaining its reasoning.

The plaintiffs filed an emergency petition asking the Florida Supreme Court to stay the 1st DCA’s order so that the evidence could be presented at the trial and the trial court could decide the dispute with the aid of that evidence before the 2014 midterm elections. With the trial about to begin, the Court would need to act immediately if its decision was going to have any impact.

But while the Court said it had reason to believe it would have jurisdiction to review the 1st DCA’s decision, it could not be certain as yet.  Because the First DCA had not explained its reasoning in a full opinion, the Florida Supreme Court could not determine whether it had jurisdiction to hear the petition under its more commonly used bases, such as when there are conflicting rulings between districts on a point of law.

Nonetheless, the Court predicted that the district court opinion was likely to construe a provision of the Florida or federal constitution. And it noted that the Court had previously exercised jurisdiction in the same case based on the direct effect on a class of constitutional officers, but said that it could not say for sure whether jurisdicition to review the 1st DCA’s decision on the admissibility of the documents could be obtained on that basis. In addition, there was a chance that the 1st DCA would certify a question of great public importance, given “the statewide importance of this litigation and the lack of Florida precedent regarding the associational privilege,” which the 1st DCA appeared to have relied on based on its citation to a 9th Circuit case addressing that issue.

Although the All Writs doctrine does not prove an independent basis for jurisdiction, the Supreme Court explained, “this Court may utilize the constitutional all writs provision as a means of ‘protecting jurisdiction that likely will be invoked in the future.'” Thus, due to the likelihood that the Supreme Court would have jurisdiction, and that it would not be able to provide effective relief by exercising jurisdiction after the 1st DCA issued its opinion (and the trial likely already completed, the Supreme Court held that it was appropriate to stay the 1st DCA’s order under the All Writs doctrine:

In order to maintain the status quo during the ongoing trial, preserve this Court’s ability to completely exercise the eventual jurisdiction it is likely to have to review the First District’s decision, and prevent any irreparable harm that might occur if the Petitioners are prevented from using the challenged documents, we conclude that we must grant the petition and stay the enforcement of the First District’s reversal of the circuit court, pending the completion of the trial.

Justice Lewis issued a concurring opinion to explain his view that the litigation’s importance to the “democratic system of government in Florida–and public faith in that system,” combined with the fact that the Court had to act now in order to issue effective relief, made the case a rare instance in which All Writs jurisdiction was appropriate. Chief Justice Polston dissented in an opinion joined by Justice Canady, explaining that in his view it was inappropriate to exercise All Writs jurisdiction because “an independent basis for jurisdiction does not currently exist.”

The 1st DCA apparently agreed that the Florida Supreme Court should review the case. As a twist, the 1st DCA’s opinion never came. Before the Supreme Court issued its decision, a 1st DCA judge had filed an internal motion for the court to review the panel’s order en banc. A majority of the judges ultimately voted to grant en banc review, and ruled that “the appeal should have been passed through to the supreme court,” as had been requested.

The court vacated the prior order and certified an issue of great public importance for immediate review by the Florida Supreme Court. And the Florida Supreme Court has accepted jurisdiction.

Meanwhile, the trial has ended, and the trial court has ruled on the merits. Although the ruling invalidated 2 congressional districts, the legislature has announced that it does not intend to appeal.

But the legislature has also asked that the congressional districts not be redrawn until after the 2014 midterm elections. Will the Florida Supreme Court have jurisdiction if it asked to rule on whether the map must be redrawn before the midterms? Given the importance of the issues and the time sensitivity, that seems likely.  

 

Gun rights advocates received a big win in Florida’s First District Court of Appeal on December 10, 2013. The 1st DCA took the unusual step of issuing seven separate opinions to explain the result.

Guns.jpg

Sitting en banc in Florida Carry, Inc. v. University of North Florida, the 1st DCA voted 12-3 to reverse the dismissal of a suit challenging the University of North Florida’s policy of prohibiting students from keeping firearms in their vehicles on campus. Judge Padovano, joined by Judges Van Nortwick and Clark, dissented.

The Facts

The suit was brought by Florida Carry, an advocacy group, and Alexandria Lainez, a UNF student, challenging a UNF policy that prohibited storage of a “weapon or destructive device,” including a gun, in a vehicle on UNF property, and subjected students to punishment and possible prosecution for violating that policy. Florida Carry argued that UNF has no power to regulate firearms, because by virtue of section 790.33(1), Florida Statutes, the Florida Legislature has “preempted the field” of firearms regulation, i.e., reserved for itself the exclusive right to regulate firearms in Florida. 

The Primary Issue: Is UNF a School District?

On the surface, the appeal required only the resolution of a straightforward question of statutory construction. UNF argued, and the trial court agreed, that despite the legislature’s reservation of the power to regulate firearms, it had delegated to UNF the power to regulate possession of firearms in parking lots on campus.

Under Section 790.115(2)(a)(3) and 790.25(5), the legislature declared that it is generally unlawful to carry firearms on school grounds, with certain exceptions, including carrying a firearm or other weapon in a vehicle if the weapon is “securely encased”: 

it is lawful…for a person 18 years of age or older to possess a concealed firearm or other weapon for self-defense or other lawful purpose within the interior of a private conveyance, without a license, if the firearm or other weapon is securely encased or is otherwise not readily accessible for immediate use…This subsection shall be liberally construed in favor of the lawful use, ownership, and possession of firearms and other weapons, including lawful self-defense…  

But Section 790.115(2)(a)(3) also gives “school districts” the power to “adopt written and published policies that waive” the exception allowing weapons in vehicles “for purposes of student and campus parking privileges.” So the primary issue was whether UNF is a “school district,” such that the legislature delegated to UNF the power to adopt a policy declining the privilege of carrying secured firearms in vehicles in UNF parking lots.

As a matter of statutory interpretation, the 1st DCA judges all agreed that UNF did not meet the definition of a “school district,” such that the legislature did not grant to UNF the power to waive firearms-in-vehicles exception. But that conclusion was not the end of the analysis.

The Tipsy Coachman Doctrine

 A fundamental aspect of appellate practice is that a party seeking to reverse (overturn) a lower court’s decision must confine his/her/its arguments to the issues and arguments that were raised before the lower court. In other words, the court of appeals will reverse a lower court only if it incorrectly ruled on the arguments that were presented to it, but will not fault a lower court for not making a different ruling that might have been mandated by a legal principle that the lower court did not have the opportunity to consider.

But the same is not true when it comes to affirming a lower court’s decision. Under a doctrine known in Florida jurisprudence as the “tipsy coachman” rule (so named based on a poem about a coach driver that reached the correct destination despite not knowing where he was going), an appellate court will affirm the lower court’s decision, even if the lower court’s reasons for reaching its decision were wrong, if the decision was correct for another reason. In other words, if the court of appeals concludes that the correct result was reached for the wrong reasons, the decision will be upheld.

Why So Many Opinions?

The tipsy coachman doctrine played a major role in causing the proliferation of separate opinions in Florida Carry. Judge Padovano concluded in his dissent that the trial court was correct to conclude that UNF had the power to regulate firearms on campus based on a different reason than the one argued by UNF and accepted by the trial court.

The correct reason for the result, Judge Padovano concluded, was the fact that article IX, section 7 of the Florida Constitution confers the powers to “operate, regulate, control, and be fully responsible for the management of the whole university system,” on the Board of Governors of the state university system.

He further concluded that UNF’s regulation, enacted through state universities’ constitutional power to regulate themselves, could not be trumped by the Legislature’s enactment of Section 790.115. Just as “a university has the power to prohibit a student from smoking in a dormitory or drinking an alcoholic beverage on campus even though smoking and drinking may be perfectly lawful in other circumstances,” it has the power to prohibit students from carrying a firearm in a vehicle, even though doing so is legal in other circumstances.

The numerosity of concurring opinions resulted mainly from disagreements among the judges who concurred in the court’s decision to reverse the trial court about how to address the tipsy coachman argument raised by Judge Padovano.

The majority opinion, authored by Judge Roberts, concludes that the power granted to universities under article IX, section 7 does not extend to the power to “deprive students attending UNF of their constitutional right to bear arms as provided by organic law and legislative enactment,” and that the right to bear arms can only be regulated by the Legislature.

Judge Wetherell wrote separately to express the view that the majority and dissent’s discussions of the constitutional powers of state universities is misguided, because the Constitution grants power to the Board of Governors, not universities, and there was no indication that the Board had delegated its power to UNF to pass the regulation at issue. Judge Makar wrote a concurring opinion “to emphasize that Florida’s legal history on the right to keep and bear arms makes this a straightforward case.” He also emphasized that whatever powers universities may have must be tempered by constitutional and legislative limitations.

In his concurrence, Judge Osterhaus departed from the majority’s decision to address Judge Padovano’s analysis of universities’ powers under article IX, section 7 because UNF based its regulation on the power it believed it had under Section 790.115, so that is the only lens through which its powers should be analyzed. Thus, in his view, the tipsy coachman rule did not apply.

Still other opinions resulted from judges wanting to emphasize that the court’s ruling was not the end of the story, and that despite the decision, UNF may still have the power to regulate firearms on campus. Judge Swanson expressed the view that UNF may have the power to regulate firearms on campus under a separate statutory delegation of power, but would have to follow certain procedures to do so. And Judge Benton wrote separately to emphasize that the court’s decision did not mean that “all UNF rules and administrative regulations regarding firearms are null and void.”

What Now?

None of the 1st DCA’s many opinions is likely to be the last word on the issues in the case, which seems almost certainly destined for review by the Supreme Court of Florida. If nothing else, the injection of the analysis of constitutional powers into the case created a basis for the Supreme Court to exercise jurisdiction. Given the public interest in and votality of issues of Second Amendment Rights, my guess is that the Supreme Court will not hesitate to take it up.              

Florida’s acupuncture physicians and massage therapists recently learned that they are (again) ineligible to be paid PIP benefits for treating automobile accident victims. Chiropractors learned that PIP coverage of their services has (again) been curtailed as well. But the changes may be temporary. 

They resulted from a loss suffered by acupuncture physicians, massage therapists, and chiropractors in their court battle against implementation of the 2012 PIP Act amendments to Florida’s No-Fault insurance law, a/k/a PIP. Among other things, the 2012 PIP Act excludes acupuncture and massage therapy from PIP, and limits coverage of chiropractic treatment. Those provisions of the 2012 PIP Act had been put on hold due to a preliminary injunction entered by the Leon County Circuit Court.  

The First District Court of Appeal set aside the preliminary injunction in its October 23, 2013 decision in McCarty v. Myers. But in appellate court decisions, as in many areas of life, the devil is often in the details. And the 1st DCA’s reasoning for overturning the injunction left room for acupuncture physicians, massage therapists, and chiropractors (and their patients) to be optimistic that their efforts to prevent the amendments from being implemented may eventually be successful.

Why? Because the decision came down to who was suing, not the merits of the claims. The litigation was brought by a group of practitioners who have banded together and hired attorneys to sue to block the 2012 PIP Act from going into effect.

Named as plaintiffs were three providers: an acupuncture physician, a chiropractic physician, and a massage therapist. Also named as a plaintiff was “Jane Doe,” who apparently is not a real person, but a fictitious person who was supposed to be a representive of “all those citizens of Florida that are, were, or will be injured as a result of a motor vehicle collision that were also required to purchase $10,000 . . . of PIP insurance coverage but may actually only receive no or $2,500 . . . in benefits.” 

Under the doctrine of “standing,” a person or entity can sue only to seek relief for an injury that he/she/it suffered. Conversely, a person lacks standing to bring a legal claim to enforce the rights of others or of the general public.

The provider plaintiffs asserted that the 2012 PIP Act violated several provisions of the Florida Constitution. In entering the injunction, the trial court seized on one of those asserted constitutional violations, finding that there was a significant possibility that the 2012 PIP Act was unconstitutional for denying to persons injured in accidents the constitutional right of access to courts.   

The problem with entering an injunction based on that claim, according to the 1st DCA, was not that the claim itself lacked merit, but that that the plaintiffs did not have standing to bring it. The plaintiffs were providers, not accident victims, so they were not injured by the asserted denial of access to courts. Even if they may have been injured in a different way, i.e., by losing revenue, the providers did not claim that they themselves had been denied access to courts, so they did not have standing to sue on that claim, or to obtain an injunction based on it — at least not “[w]ithout a showing of an actual denial of access to courts in a specific factual context…”

In a footnote, the court cast doubt on whether the providers could sue under a limited exception to general standing rules, in which a third party may have standing to remedy the rights of a person who is unable to pursue his/her own rights. But the court did not address whether the providers could sue as assignees of accident victims, as providers have done in other contexts–it is common for providers to have their patients assign their insurance benefits to the provider–apparently because the plaintiffs did not claim to have standing as assignees. 

The 1st DCA left open several options for the plaintiffs to continue to pursue their efforts to block implementation of the 2012 PIP Act. Chief among them would be to join as additional plaintiffs some injured patients who have had PIP coverage of acupunture, massage therapy, and chiropractic care denied due to the 2012 PIP Act, i.e., plaintiffs that suffered the asserted injury of being denied access to the courts. Barring that, it may be a viable option for the providers to continue as the only plaintiffs, but as assignees of their patients.

Either way, it seems likely that the providers will be able to find a way to overcome the issue of standing, and ultimately to obtain another injunction. Of course, it is possible that 1st DCA would reverse on the merits if a new injunction is entered and appealed. But its October 23, 2013 decision gives no indication that the court views the claims as unmeritorious.   

The Florida Supreme Court justices and District Court of Appeal judges who were up for retention votes this year had a great day yesterday. Congratulations go out to all of the retained justices and appellate judges:

Florida Supreme Court:

Justice R. Fred Lewis

Justice Barbara J. Pariente

Justice Peggy A. Quince

Despite facing organized opposition that was unprecedented in the history of retention elections in Florida, all three justices were retained by sizeable margins. As I wrote in my previous post, I view this as a victory for Florida’s non-partisan and generally non-political, merit-based system of selecting and retaining Supreme Court justices and appellate judges. A ballot initiative to give the state senate more power over appointments to the Supreme Court, via proposed Amendment Number 5, also failed.

From what I’ve heard, there were considerably fewer undervotes (ballots on which voters marked preferences in other races but left the merit retention questions blank) than in previous retention elections. So perhaps the contested retention elections had a subsidiary benefit — helping voters become more aware of, and educated about, our Supreme Court justices. Credit for that goes to the many attorneys, laypersons, and legal organizations who worked to educate voters about the retention elections.  

First District Court of Appeal:

Judge Simone Marstiller

Judge Stephanie W. Ray

Judge Ronald V. Swanson

Judge Bradford L. Thomas

Second District Court of Appeal:

Judge Anthony K. Black

Judge Darryl C. Casanueva

Judge Charles A. Davis, Jr.

Judge Edward C. LaRose

Third District Court of Appeal:

Judge Angel A. Cortinas

Judge Kevin Emas

Judge Ivan F. Fernandez

Judge Leslie B. Rothenberg

Judge Richard J. Suarez

Fourth District Court of Appeal:

Judge Burton C. Conner

Judge Carole Y. Taylor

Almost a quarter of DCA judges statewide were on the ballot, including 4 of the 1st DCA’s 15 judges, 4 of the 2nd DCA’s 14 judges, 5 of the 3rd DCA’s 10 judges, 2 of the 4th DCA’s 12 judges, and none of the 5th DCA’s 10 judges. All were easily retained.

Yes votes for retaining each of the 2nd DCA, 3rd DCA, and 4th DCA judges exceeded 72%. The 1st DCA judges were also retained by comfortable margins, although they received slightly less support, with yes vote percentages ranging from a little less than 62% to a little more than 66%. I’m not aware of there being organized opposition to retention of any of the DCA judges, or what accounts for the slightly lower numbers across the board in the 1st DCA retention elections.

Congratulations to all. I look forward to practicing before you in the coming years.

So much for easing back to work after the long weekend.  At least for judges in the First District and Fourth District Court of Appeal. 

As the Miami Herald reports, the 1st DCA is hearing consolidated oral argument this afternoon in Florida Gaming Centers, Inc. v. Florida Department of Business and Professional Regulation, and Calder Race Course, Inc. v. Florida Department of Business and Professional Regulation, two cases dealing with the effect of the 2004 amendment to the Florida Constitution that authorized certain existing parimutuel facilities in Broward and Miami-Dade counties (subject to voter approval in a county-wide referendum) to install slot machines.  Argument is set to begin at 2:00 PM in Courtroom One, before a panel consisting of Judges Davis, Van Nortwick, and Clark.  You can watch the argument live here.  If you miss it live, audio and video recordings of the argument should be available in the 1st DCA’s archives by no later than tomorrow morning.

[UPDATE: Here are some more details after watching the oral argument.  Former Florida Supreme Court justice Raoul Cantero argued on behalf of Hialeah Park and the other appellees, with Joel Perwin and Bruce Rogow arguing on behalf of the appellants, which are competitor parimutuels.  At issue is the validity of a 2010 law authorizing slot machines at Hialeah Park, and of the license to operate slot machines that the State granted to Hialeah Park last December, in light of the 2004 Constitutional Amendment. 

The 2004 amendment authorized slot machines only for parimutuels that were in operation from 2002-2004.  Hialeah Park didn’t qualify, so in 2010 the legislature separately authorized it to operate slot machines.  But the appellants, which stand lose business to Hialeah Park, argued that the 2004 amendment prohibited the legislature from enacting the 2010 statute. 

Counsel for the appellants conceded that prior to the 2004 amendment, the legislature had the power to authorize slot machines at Hialeah Park or anywhere else, and that it could still do so for facilities in any county except Broward and Miami-Dade, where Hialeah Park is located.  They argued, however, that by approving an amendment authorizing slot machines for Broward and Miami-Dade county parimutuels that met specified criteria, the voters impliedly prohibited the legislature from ever authorizing slot machines anywhere in Broward and Miami-Dade that did not meet those criteria. 

Appellees’ counsel countered that the amendment was merely an action by the voters to authorize slot machines in certain places.  It didn’t purport to prohibit anything, and couldn’t prohibit anything.  If that had been part of the amendment’s purpose, it would have violated the prohibition on multi-subject ballot initiatives, and the ballot materials that described the proposed amendment to voters in 2004, which said nothing about prohibiting anything, would have been misleading.

Handicapping appeals is always dangerous, but I’d put my money on the appellees in this one.  The appellants’ concession about the legislature’s power to authorize slots was probably necessary based on precedent, but it made the appellants’ argument tenuous. 

If the 2004 amendment had been the type of amendment that grants the legislature the power to do something it couldn’t previously do (i.e., to authorize slots in the first instance) then the appellants would have a strong argument for saying that the authorization was limited by its terms to entities that met the amendment’s specifications.  But I don’t see the court buying the argument that even though the legislature generally can authorize slots, an amendment authorizing slots in certain places actually took away the legislature’s power to authorize them in other places.  It takes a pretty big logical leap from the voters saying we’re only authorizing slots in certain places to the conclusion that they were really saying we’re prohibiting the legislature from ever authorizing slots anywhere else in these counties.]                 

A different panel, consisting of Judges Thomas, Wetherell, and Swan, heard oral argument this morning in Graham v. Haridopolos, which involves another Constitutional amendment adopted by ballot initiative, the 2002 amendment creating the Florida Board of Governors to be the central governing body for Florida’s state colleges and universities.  That case has something of a political history, as Democrat Graham, the former Governor and U.S. Senator, spear-headed the drive for passage of the ballot initiative after Republican then-Governor Jeb Bush signed legislation doing away with the former central governing body, the Florida Board of Regents.  Graham is the lead plaintiff/appellant and Mike Haridopolos, Republican and Florida Senate President, is the first named defendant/appellee in the case, although Graham’s co-plaintiff/appellant is former Republican Congressman Lou Frey.  The appellants assert that the Florida Legislature lacks the power to set tuition rates for state universities and colleges, because that power is vested in the Board of Governors.  Video and audio recordings of oral argument should be available in the 1st DCA’s archives shortly. 

And the 4th DCA heard oral argument yesterday in Bronner v. AMP Services, Limited, a case that is part of a multi-national litigation saga over the respective rights of heirs and charitable entities to the proceeds of the estate of Walter Bronner, a Columbian citizen and Jewish philanthropist who amassed a large estate after fleeing the Holocaust, and the estate of his widow, Anna.  According to Adolfo Pesquera’s coverage in the Daily Business Review (reg. req.’d), the Florida litigation came about, despite the Bronners having lived in Monaco prior to their deaths, based on the Bronners’ ownership of a residence in Fort Lauderdale.  Judges Hazouri and Taylor (and a third judge) sat on the panel.     

Losing at trial hurts. Getting hit with the bill for your adversary’s attorney’s fees makes it hurt ever-so-much more. That’s why fee-shifting under Florida Statutes Section 768.79 — available to parties that make a proposal for settlement under Rule 1.442 — can be such a powerful tool. It’s probably also why lawyers who refuse an offer for settlement – and get burned – fight so hard to avoid the consequences.

Many courts, including the Florida Supreme Court, aren’t too keen on this kind of fee-shifting either. Although common in many foreign legal systems, fee-shifting is an exception to the so-called “American Rule” that each party generally bears its own fees. That – and the fact that Rule 1.442 and Section 768.79 can be used to play “gotcha” – explains the judicial resistance.

Thus, Rule 1.442 in its current form contains very precise requirements for what must be included in a settlement proposal. Under longstanding precedent, specificity is required as to each of the required elements, and any ambiguity can nullify fee-shifting.

Proposals to settle the claims or liabilities of multiple parties, known as “joint proposals”, have proven particularly troublesome. Subsections (c)(3) and (c)(4) of Rule 1.442 specify how the Rule applies to such proposals:

3) A proposal may be made by or to any party or parties and by or to any combination of parties properly identified in the proposal. A joint proposal shall state the amount and terms attributable to each party.

(4) Notwithstanding subdivision (c)(3), when a party is alleged to be solely vicariously, constructively, derivatively, or technically liable, whether by operation of law or by contract, a joint proposal made by or served on such a party need not state the apportionment or contribution as to that party. Acceptance by any party shall be without prejudice to rights of contribution or indemnity.

Do Florida Supreme Court Decisions Make Joint Proposals Impossible?

The Florida Supreme Court has addressed these subsections in a series of cases since the current form of the Rule was adopted in 1996. It has concluded that a settlement offer made by or to multiple parties must always specify the amount attributable to each party, so that each party can individually decide whether to accept or reject the offer.

In a 2005 case, Lamb v. Matetzschk, 906 So. 2d 1037, the Court held that even in vicarious liability cases (to which subsection (c)(4) applies), a plaintiff’s offer to multiple defendants must still specify the amount attributable to each defendant. Then last year, in Attorneys’ Title Insurance Fund, Inc. v. Gorka, 36 So. 3d 646 (Fla. 2010), the Court held that a joint proposal from a defendant to multiple plaintiffs must allow each plaintiff to individually decide whether to settle.  So a proposal can’t condition the settlement of one plaintiff’s claims on the other’s agreement to settle as well.

In the wake of these cases, the 1st DCA recently wondered aloud [in Schantz v. Sekine, 60 So. 3d 444 (Fla. 1st DCA 2011)] whether a joint proposal to multiple plaintiffs can ever satisfy Rule 1.442. Agreeing with Justice Polston’s suggestion in his Gorka dissent, the Court lamented that the decision’s practical effect was to excise joint proposals from Rule 1.442 entirely.

Can A Proposal Release Claims Against Multiple Parties Without Being a Joint Proposal?

But pending word from the Florida Supreme Court (which is likely within the next year), there’s at least one context in which claims against multiple parties can be released in a single settlement proposal.  Relying on 2009 decisions of the 3rd and 4th DCAs, the Fifth District recently held in Andrews v. Frey, No. 5D10-2068 (released on July 29, 2011), that if one defendant is only alleged to be vicariously liable for the acts of a primary defendant, a settlement proposal by the primary defendant can provide for the release of the vicarious defendant as well.

Of course the 5th DCA didn’t characterize the proposal as a “joint proposal.”  Indeed, the court framed the dispositive issue as whether in that particular context, the proposal made by a single defendant, but requiring the release of a second defendant, is a “joint proposal” under Rule 1.442. The 5th DCA found that it was not, so the offering party was entitled to collect attorney’s fees after the trial resulted in a verdict of less than the amount offered in the settlement proposal. But since it wasn’t a “joint proposal,” the vicariously liable party, who would also have been released under the proposal, was not entitled to attorney’s fees.

Will the Supreme Court Embrace Individual Proposals That Release Multiple Parties?

Despite the holding in Andrews, fee-shifting based on these multi-party release, individually offered, settlement proposals may not survive for very long.  Andrews itself may end up in the Florida Supreme Court, as the 5th DCA certified  the question of whether a proposal made by one party that requires a release of claims against multiple parties is in fact a “joint proposal” under Rule 1.442(c)(3).

And the same question is included among three certified to the Florida Supreme Court by the 11th Circuit in Auto-Owners Insurance Co. v. Southeast Floating Docks, Inc., 632 F.3d 1195 (11th Cir. 2011), which the Court has set for oral argument on October 4, 2011. With 3 certified questions at issue, it’s possible that the Court may not reach the question that the 5th DCA was concerned with.  It’s also possible that the Court will reframe the certified questions.

And, of course, it’s possible that the Court will answer the question, but will be fine with imposing attorney’s fees on parties that refuse an individual proposal that requires a release of multiple parties. I wouldn’t count on it, though.

It’s hard to confuse the First District Court of Appeal of Florida (in Tallahassee) with its namesake in California. It’s even harder to confuse with that court’s San Francisco neighbor, the U.S. Court of Appeals for the Ninth Circuit.  The 9th Circuit has a reputation (deserved or not) for issuing controversial decisions on hot button issues – often to the displeasure of the U.S. Supreme Court.

The 1st DCA (of Florida) has no such reputation. So some might be surprised by the outcome of two recent worker’ compensation appeals (the 1st DCA has jurisdiction over all workers’ compensation appeals). In recent weeks, the 1st DCA has handed down decisions in two separate cases affirming the right of immigrants working in the U.S. illegally to receive workers’ comp benefits.

In the first of those decisions, HDV Construction Systems, Inc. v. Aragon, No. 1D10–6401 (handed down on June 28, 2011), the 1st DCA held that an employer was on the hook for permanent total disability (PTD) benefits for an unauthorized worker because it knew or should have known that he could not work legally in the U.S., but continued to employ him anyway until he was permanently injured.

In the second, Garcia-Lopez v. Affordable Plumbing/Vinings Insurance Company, No. 1D10–4949 (issued on July 18, 2011), the 1st DCA required an employer to cover workers’ comp benefits for a Mexican immigrant (employed through a third party with knowledge of his status) who was underage in addition to lacking authorization to work in the U.S., rejecting the argument that he could only be compensated for lost income if he proved that he reported his income to the IRS.

What happened?  Has the ideological outlook of San Francisco overtaken Tallahassee?! I don’t think so, as I’ll explain below.

Continue Reading Illegal Immigrant Workers’ Comp Claimants Win 2 Rounds in the 1st DCA

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The Florida Supreme Court’s precedential decision last Thursday in Kaaa v. Kaaa, No. SC09-967, could make life a bit more complicated Florida family lawyers.  Just what you needed, I’m sure!

The Court denied a petition for rehearing, and revised its September opinion, in an attempt to clarify a pretty confusing discussion.  The basic holding, which I think counsels a fairly common sense analysis of who owns what, remains unchanged. 

Here’s a thumbnail sketch of the facts:  

Mr. Kaaa bought a house for $36,500 just before marrying Mrs. Kaaa, put $2000 down and mortgaged the rest.  He was was the sole owner on the property deed.  Mr. and Mrs. K were married for 27 years, and like most couples, they used their marital funds to make mortgage payments.  They also used marital funds to improve the property by $14,400.  The Kaaas owed a little less than $13,000 in mortgage debt on the property at the time of distribution, having refinanced a few times.  The property had a stipulated value at that time of $225,000.

Here’s the Legal Issue

The house itself is non-marital property because Mr. K bought it before the marriage and held it in his own name.  But marital funds paid for all but $2000 of the house (that was also disputed) and enabled the Kaaas to continue living in the house and enjoy a tremendous value increase as a result of market forces.  Does Mr. K’s $2000 down payment entitle him to keep the $207,000 of the $225,000 present value of house?  The 2nd DCA (in Lakeland) said yes.  But under Stevens v. Stevens, a 1995 decision of the 1st DCA (in Talahassee), the answer would be no.  The Florida Supreme Court came down on the side of the 1st DCA.   

Here’s the Court’s Reasoning:

The Equitable Distribution Statute, Fla. Stat. §61.075, says “appreciation of nonmarital assets” is marital property if the appreciation is attributable to “the efforts of either party during the marriage” or “the contribution to or expenditure thereon of marital funds…”  Price increases due to market forces do not result from anyone’s efforts (in the way that, say, a value increase attributable to an addition that Mrs. K built herself would).

“Contribution[s] to or expenditure[s] thereon of marital funds” could be thought to refer to value increases resulting from actual improvements to the property that, instead of being created through the non-owner spouse’s efforts, are paid for with marital funds (as where the Ks use marital funds to pay a contractor to build the addition instead of having Mrs. K build it herself).  But the Supreme Court rejected that reading of the statute, finding that the literal meaning of the phrase also includes “expenditure…of marital funds” to make mortgage payments.  The Court particularly noted that equitable distribution is the default rule, and it was inclined to read ambiguous language in that light.  

Here’s the Rule:

Appreciation of nonmarital property that results solely from market fluctuations (which the Court referred to “passive appreciation”) can be marital property if:  (1) “marital funds were used to pay the mortgage”; and (2) “the nonowner spouse made contributions to the property”.  Once it is determined that a non-marital property’s value passively appreciated during the marriage and criteria (1) and (2) above are satisfied, trial courts should calculate how much of the appreciated value is subject to equitable distribution based on the percent of the property that was held unencumbered by the owner spouse at the time of the marriage. 

So, for example, suppose Mr. K had held equity equal to 50% of the property’s value at the time of marriage, with 50% mortgaged.  If the property value had increased by $100,000 during the marriage, $50,000 would be subject to equitable distribution, and the remaining $50,000 would go to Mr. K as his non-marital property.  The amount subject to equitable distribution is further reduced by any debt obligations remaining on the property.  So in this example, if the Kaaas still owed $40,000 on the mortgage, only $10,000 would be subject to equitable distribution.