Gale Force Roofing & Restoration, LLC v. Brown

• Decision Date: 11 July 2021
• Docket Number: Case No.: 4:21cv246-MW/MAF
• Parties: GALE FORCE ROOFING & RESTORATION, LLC, Plaintiff, v. Julie I. BROWN, in her official capacity as Secretary of the Florida Department of Business and Professional Regulation, Defendant.
• Court: U.S. District Court — Northern District of Florida

548 F.Supp.3d 1143

GALE FORCE ROOFING & RESTORATION, LLC, Plaintiff,

v.Julie I. BROWN, in her official capacity as Secretary of the Florida Department of Business and Professional Regulation, Defendant.

Case No.: 4:21cv246-MW/MAF

United States District Court, N.D. Florida, Tallahassee Division.

Signed July 11, 2021

Joseph Patrick Kenny, Kyle D. Bass, Jeremy David Bailie, Weber Crabb & Wein PA, St. Petersburg, FL, for Plaintiff.

Edward M. Wenger, Holtzman Vogel Baran et al., Washington, DC, David Axelman, Florida Department of Business and Professional Regulation, Mohammad Omar Jazil, Holtzman Vogel Baran et al., Tallahassee, FL, for Defendant.

PRELIMINARY INJUNCTION ¹

Mark E. Walker, Chief United States District Judge This Court finds itself in the eye of the storm of Florida's most recent attempt to regulate the business practices of contractors. Specifically, Plaintiff Gale Force Roofing & Restoration, LLC, moves for a preliminary injunction enjoining Defendant Secretary of the Florida Department of Business and Professional Regulation ("DBPR" or "the Department") from enforcing section 489.147, Florida Statutes. This Court set an expedited briefing schedule with respect to Plaintiff's motion and held an in-person preliminary injunction hearing on July 9, 2021. This Court has considered Plaintiff's motion, ECF No. 20, Defendant's response, ECF No. 25, Plaintiff's reply, ECF No. 26, all attachments, and the arguments both parties presented at the hearing on the motion.

The issue in this case is whether the new law's ban on written or electronic communication that encourages, induces, or instructs someone to contact a contractor or public adjuster for the purpose of filing an insurance claim for roof damage violates the First Amendment.² Plaintiff alleges the law violates the First Amendment on its face. In short, Plaintiff claims the law amounts to a content-based restriction on speech, is presumptively unconstitutional, and fails strict scrutiny review. In the alternative, Plaintiff asserts the law fails intermediate scrutiny review as a regulation on commercial speech.³

On the other hand, Defendant asserts the new law is not subject to strict scrutiny review and survives intermediate scrutiny as a reasonable restriction on commercial speech combating consumer exploitation and fraud, "ensuring that the line between contractor and insurance adjuster is not blurred," and protecting Florida homeowners from "skyrocketing insurance premiums, or, worse, the inability to secure homeowner's insurance at all." ECF No. 25 at 14-17.

This Court agrees with Defendant that intermediate scrutiny applies to the law at issue. However, this Court finds that it fails this less-onerous test. To be clear, this Court recognizes that the State of Florida has a valid and weighty interest in regulating contractors and protecting Floridians from fraud, exploitation, and the deleterious effects that fraud and exploitation have on the insurance market in Florida. And it is within the Legislature's purview to address these concerns. But it must do so within the bounds set by the Constitution.⁴ Here, the Legislature failed to do so. Accordingly, Plaintiff's motion for preliminary injunction, ECF No. 20, is GRANTED.

I

First, some background information is helpful. This action implicates the Department's regulatory framework governing the contracting profession in Florida. Accordingly, this Court will lay the foundation with a brief description of that framework. Next, this Court will sketch out the blueprint for the new law, which Plaintiff claims violates the First Amendment. Finally, this Court will address Plaintiff's factual allegations concerning the speech it alleges the new law prohibits.

A

Florida's Legislature deems it necessary for the public health, safety, and welfare of its citizens to regulate the construction industry. See § 489.101, Fla. Stat. To that end, the State has implemented professional licensing requirements to operate as a contractor in Florida. See § 489.113(1), Fla. Stat. (requiring certification to engage in contracting on a statewide basis or registration to engage in contracting "on other than a statewide basis"). The Department oversees these licensing requirements, see id. § 489.111(1) ("Any person who desires to be certified shall apply to the department in writing."), and enforces its regulations by issuing cease and desist orders and instituting disciplinary proceedings against licensed contractors, see e.g. , §§ 489.113(2)(a) & (4)(d), Fla. Stat. Disciplinary penalties can include administrative fines, reprimands, probation, suspension, and revocation of a licensed contractor's certification or registration. § 489.129(1), Fla. Stat.

In addition to regulating licensed contractors, the Department investigates and enforces licensing requirements against unlicensed contractors. See § 489.130, Fla. Stat. Disciplinary action can include fines up to $10,000 per violation and being included on the Department's webpage "dedicated solely to listing any known information concerning unlicensed contractors." Id. §§ 489.130(3), (6).

The Florida Legislature has outlawed several false or fraudulent business activities, including to falsely hold oneself out as or falsely impersonate a licensed contractor, to present the credentials of another contractor as one's own, to knowingly give false or forged evidence to the licensing board, or to use or attempt to use a license that has been suspended or revoked. See § 489.127(1), Fla. Stat. Any unlicensed person who violates these provisions commits an enhanceable offense—in other words, the penalties escalate following the first conviction. Specifically, a first offense constitutes a first-degree misdemeanor, punishable by up to eleven months and 29 days in county jail and a $1,000 fine. Id. § 489.127(2)(a). A second offense—following conviction for the first offense—constitutes a third-degree felony, punishable by up to five years in state prison and a $5,000 fine. Id. § 489.127(2)(b). In addition, Florida has criminalized insurance fraud, see § 817.234, Fla. Stat., which consists of, among other things, presenting any written or oral statement as part of a claim for payment, knowing that such statement contains false, incomplete, or misleading information concerning any fact or thing material to such claim, id. § 817.234(1)(a).

B

During the 2021 legislative session, the Florida Legislature passed a new law that prohibits speech encouraging someone to contact a contractor or public adjuster for purposes of filing an insurance claim for roof damage. See Ch. 2021-77, § 1, Laws of Fla. Governor DeSantis signed the bill into law on June 11, 2021. And it went into effect on July 1, 2021, creating section 489.147, Florida Statutes, which provides in pertinent part:

489.147 Prohibited property insurance practices:

(1) As used in this section, the term:

(a) "Prohibited advertisement" means any written or electronic communication by a contractor that encourages, instructs, or induces a consumer to contact a contractor or public adjuster for the purpose of making an insurance claim for roof damage. The term includes, but is not limited to, door hangers, business cards, magnets, flyers, pamphlets, and e-mails.

(b) "Soliciting" means contacting:

1. In person;

2. By electronic means, including, but not limited to, e-mail, telephone, and any other real-time communication directed to a specific person; or

3. By delivery to a specific person.

§ 489.147(1)(a)-(b), Fla. Stat.

The law prohibits any "contractor" from "directly or indirectly" "soliciting a residential property owner by means of a prohibited advertisement." Id. § 489.147(2)(a). "A contractor who violates this section is subject to disciplinary proceedings" and "may receive up to a $10,000 fine for each violation of this section." Id. § 489.147(3). The law also decrees that any "unlicensed person" who engages in prohibited speech is guilty of "unlicensed contracting," and subject to civil penalties through Department disciplinary action and fines up to $10,000 per violation. Id. § 489.147(4)(b).

Accordingly, licensed contractors are not allowed to encourage, instruct, or induce any consumer to contact a contractor or public adjuster for the purpose of making an insurance claim for roof damage by written or electronic means—and neither is any "unlicensed person." In-person, oral communication of this message does not appear to violate the law as written.⁵ However, this law effectively bans this specific message by contractors—licensed or not—in written or electronic form in the state of Florida.

C

Plaintiff asserts the challenged law effectively derails its current business practices and bars it from providing truthful information to consumers. See ECF No. 20-1 ¶ 12 ("Gale Force will have to stop communicating to homeowners accurate, truthful information about the availability of insurance coverage for the work Gale Force stands ready to perform."). Specifically, Alexander Dewey, Plaintiff's authorized representative, provided an affidavit attesting to Plaintiff's business practices, which include "repairing homes (mainly roof systems) that have been damaged by hurricanes or other natural disasters in the state of Florida." Id. ¶ 4. "Gale Force advertises to homeowners in the state of Florida that it is willing to inspect property (mainly the roof system) that has been damaged by hurricanes or other natural disasters and advises it will accept the insurance proceeds as payment for its services repairing that damaged property." Id. ¶ 6. After completing inspections, Gale Force contacts homeowners "and offers to enter into a contract assigning to Gale Force the insurance proceeds payable under a residential insurance policy in exchange for Gale Force performing the necessary remedial work." Id. ¶¶ 8-9.

Plaintiff has attached to its motion for preliminary injunction a copy of one of its printed advertisements and a copy of a proposed assignment of...