Florida bill would let businesses sue local governments if an ordinance hurts profits

City and county officials across the state warned against the bill.
Sen. Travis Hutson, a St. Augustine Republican, is the sponsor of the bill to allow businesses to sue local governments over lost profits.
Sen. Travis Hutson, a St. Augustine Republican, is the sponsor of the bill to allow businesses to sue local governments over lost profits. [ WILFREDO LEE | AP ]
Published Jan. 21, 2022|Updated Jan. 21, 2022

TALLAHASSEE — Despite warnings from a parade of city and county officials from across the state that a Senate preemption bill could put taxpayers on the hook for millions of dollars in damages when nuisance businesses face regulation, a Florida Senate committee Thursday approved the measure on a mostly party-line vote.

The Senate Appropriations Committee voted 11-7 for Senate Bill 620, which would allow businesses from pill mills to puppy mills to sue local governments if they lose up to 15 percent of their profits or revenues because of a local ordinance attempting to regulate them. Sen. Jeff Brandes of St. Petersburg was the only Republican to vote against the measure.

The bill is sponsored by Sen. Travis Hutson, a St. Augustine Republican, but is the brainchild of Senate President Wilton Simpson, a Trilby egg farmer and 2022 candidate for state agriculture commissioner. He has let senators know that because the measure is his priority, he expects them to be lockstep in support or face consequences.

The next stop for the measure will be the full Senate, as will a companion bill, Senate Bill 280. That bill is another Hutson measure that will require local governments to do an economic impact statement for ordinances on businesses before they adopt them and give any resulting legal challenge a fast-track priority in court.

SB 280 is the priority of Sen. Kathleen Passidomo, a Naples Republican and a lawyer who is designated to be the next Senate president. She said the goal of her bill was to put an end to the parade in each legislative session of requests from businesses that have been aggrieved by local governments and want lawmakers to reverse offensive ordinances by passing preemption bills.

“What this bill does is it provides the tools for local governments to take a look at what they’re doing to determine whether or not it is going to work or not work,” Passidomo said. “It creates a process so that we are out of the preemption business.”

In recent years, that has included blocking local governments from prohibiting items such as single-use plastic straws, sunscreen or plastic bags, banning natural gas hook-ups, restricting solar energy farms and even ordering the reversal of a Key West local referendum banning large cruise ships at its port.

Related: Florida legislators pass more restrictions on local regulations

After Hutson made revisions to the bill on Thursday, the Florida Association of Counties and the Florida League of Cities announced Thursday they now support the bill.

But it was Simpson’s priority bill, SB 620, that drew the wrath and the warnings.

Local officials speak out

“The vast majority of ordinances local governments passed deal with shutting down or mitigating bad behavior that creates a negative impact in our communities,” said Peter O’Bryan, Indian River county commissioner. “This bill will promote bad behavior, and local governments should not have to pay a business that’s causing a negative impact in our community.”

League of Cities lobbyist Rebecca O’Hara raised the point that if the Legislature had passed the bill years ago, it would have interfered with local government’s attempts to restrict pain management clinics that were operating as pill mills, drawing opioid addicts from all across the country to Florida communities, forcing local governments to enact policies that attempted to regulate their doctors and shut them down.

“In the early days, there was no state law that really addressed the issue of pill mills,” O’Hara told the Senate Appropriations Committee. “So in the interim, what was happening is local governments were trying for years to protect the lives of Floridians and visitors by regulating pills.”

Hutson responded that in the three months since he filed the bill, this was the first time someone mentioned it could have had an effect on pill mills, but he suggested that there might be room to narrow the intent of the bill before it comes up for a vote on the Senate floor.

“There may be times when doing something to the business is a greater public interest and is worth making that decision, even if it does cost (local governments) some of the revenue dollars to make that business whole.”

Sabrina Javellana, city commissioner in Hallandale Beach, told the committee that the bill would affect noise ordinances, vacation rentals, party houses, fertilizer regulation to protect waterways, parking fees and other “examples of things we could be sued for that are quality-of-life issues in our communities.”

Bob McKee, lobbyist for the Florida Association of Counties, warned that SB 620 will force local governments to raise taxes to pay for the business damages and attorneys fees from local businesses.

“A full third of the taxable value of the property taxes in the state is in commercial and industrial property, so this will be businesses having to pay more taxes so that other businesses can sue local governments,” he said.

Carl Zalak III, chair of the Marion County Commission and a small-business owner, called businesses “the bread and butter of our community” but said that to protect their communities they have to pass ordinances that occasionally shut down business. Last year, for example, internet cafes were taking advantage of loopholes in state statute and, absent any state enforcement, they passed an ordinance to shut them down,

“We shut them down. Our community didn’t want them,” Zalak said. “They brought all kinds of crime and indecent things.”

But had the bill been law, “our community would have paid those folks,” he said. “Taxpayer-funded lawsuits in that regard is not only wrong for the state of Florida, but it is wrong for our neighbors.”

A Republican in opposition

Before he voted against the bill, Brandes called it “a bad bill” and “Luddite in its thought process” because it discourages cities and counties from evolving. He warned that cities could face a very minor claim with massive litigation costs and noted that Hutson acknowledged no other state has a similar law.

“Why?” he asked. “Because the negative implications of this type of law would be profound. Cities and counties would be very hesitant to expand ordinances because they know that they could potentially never retract them.

“We should not be the experimental first case of this, and our small cities or small counties are ultimately the ones that are going to be the guinea pigs in this crazy experiment.”

In an effort to soften the bill, Hutson proposed an amendment that would allow a local government to grandfather any business in, so it doesn’t have a business damage claim. The amendment also gives local governments the ability to cure any ordinance that local officials were not aware hurt business by giving them 120 days after an ordinance was passed to revise it to avoid the lawsuits.

“If no one comes to speak up about it, they have the ability to cure it,” Hutson explained.

But local officials said it didn’t go far enough.

“Having to tax some members of our community to pay claims for other members of our community is the overarching concern of the bill,” said McKee of the Florida Association of Counties.

Hutson said after the meeting that the bill will likely need several more changes before it will come to a final vote on the Senate floor.

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