Judge blocks new property insurance law
TALLAHASSEE, Florida – A federal judge blocked the state from enforcing a key part of a new property insurance law designed to fight fraud that bars roofers from advertising to potential clients.
U.S. District Chief Justice Mark Walker upheld the appeal for a preliminary injunction from Brandon-based Gale Force Roofing & Restoration LLC, which argued that the law signed by Gov. Ron DeSantis on June 11 violates First Amendment rights by directly penalizing protected speech.
“It is also clear that the injuries threatened to the complainant to bar the complainant’s truthful commercial speech outweigh the state’s interest in preventing fraud, protecting consumers from exploitation and stabilizing the market. insurance, “Walker wrote in a ruling on Sunday.
Lawmakers passed the insurance measure on April 30 as property insurance rates skyrocketed and insurers abandoned policies in Florida.
Gale Force Managing Partner Alex Dewey praised Walker’s decision.
“Gale Force is absolutely against insurance fraud of any kind and agrees that the state should punish fraudulent actors, but this is no excuse to place draconian restrictions on companies like Gale Force who follow the rules.” and just help homeowners recover when Mother Nature strikes, ”Dewey said in a press release.
Representatives from the Florida Department of Business and Professional Regulation could not immediately be reached for comment on Tuesday. Department Secretary Julie Brown was a named complainant in the lawsuit.
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The new law, which came into effect on July 1, allows larger annual rate increases for clients of Citizens Property Insurance Corp., prevents contractors from soliciting homeowners to file insurance claims through a ” advertising prohibited “, takes steps to limit attorney fees and reduces the time to file claims.
Walker’s order dealt with the provisions of the law relating to communications by contractors. The new law would prevent contractors from soliciting homeowners to file roof damage claims through “prohibited advertising,” which could include items such as emails, door hangers, flyers and flyers. brochures.
While the state has the right to regulate entrepreneurs and protect Floridians from fraud, Walker wrote, “it must do so within the limits set by the Constitution.”
“Here, the legislator did not do it accordingly,” added the judge.
As part of the lawsuit, Gale Force Roofing and Restoration said it is urging homeowners to contact the company for storm damage inspections to roofs.
“The plaintiff (Gale Force Roofing and Restoration) will then honestly communicate to the owners the nature and extent of the damage,” the lawsuit said. “The claimant will then encourage homeowners to contact their insurance company to make a claim under their home insurance policy and sign a contract with the claimant to assign the benefits available under the homeowner’s insurance policy to the applicant.”
The company also argued that the new law is more about reducing insurance claims than preventing fraud, saying the law is a “thinly veiled attempt” to prevent homeowners from getting outside help to do so. valid insurance claims for home repairs.
Supporters of the bill and insurance industry officials have argued that dubious and even fraudulent claims for roof damage have played a significant role in driving costs up.
The state disputed that the restrictions in the law violate First Amendment rights, arguing that the law should be seen as a reasonable restriction on commercial speech fighting against exploitation and consumer fraud.
By law, “targeted digital advertisements or e-mails, door signs or brochures distributed in person are prohibited if, and only if, they encourage a homeowner to make a roof insurance claim”, have writes state attorneys.
“Radio and television ads are allowed because they do not target ‘a specific person’,” they argued.
But Walker disagreed.
Under the new law, licensed contractors “are not permitted to encourage, instruct or induce a consumer to contact a contractor or public adjuster for the purpose of making an insurance claim for roof damage by consumers. written or electronic means — and no “unlicensed person,” Walker wrote.
In person, the oral communication of the message “does not appear to violate the law as it is written,” the judge noted.
“However, this law effectively prohibits this specific message by contractors — whether or not authorized — in written or electronic form in the state of Florida,” he added.
Gale Force argued that the law limits its rights under the First Amendment because it requires the company to stop its written advertising that encourages consumers to contact it for the purpose of filing an insurance claim for roof damage.
“As a result, the plaintiff is self-censoring by refraining from advertising that arguably runs counter to the new law,” Walker wrote, adding that the facts are sufficient to warrant a preliminary injunction to prevent the entry into force of the law.
The state has attempted to bolster its argument that the new law advances state interests by including an anecdote about “how a payment order agreement left a landlord with a gutted house, work that didn’t. were never completed and a lien of $ 100,000. . “
But Walker called the state’s evidence “lackluster.”
Instead of “banning protected speech, couldn’t the legislature directly regulate agreements between owners and contractors or impose liability for incomplete performance?” he wrote in Sunday’s 44-page order, which detailed a list of other flaws in the state’s arguments.
In short, this court is not convinced that the impugned law directly favors any of the interests of the state. Instead, the defendant seems to suggest that, because the law prohibits advertising that exists in the same universe than the interests claimed by the state, it directly advances those interests. But the (American) Supreme Court has already rejected such a broad declaration, ”he admonished. To recap, the defendant has identified legitimate and substantial state interests. But none of those interests are directly involved by contractors advertising their roof repair services to homeowners and informing homeowners that they are could suffer damage from the storm that could be covered by insurance. “