Judge blocks important part of Florida property insurance law
TALLAHASSEE – A federal judge prevented the state from enforcing an important part of a new anti-fraud property insurance law that bans roofers from soliciting potential customers.
Senior District Judge Mark Walker backed calls for an injunction from Brandon-based Gale Force Roofing & Restoration LLC, which argued that the law, signed by Governor Ron DeSantis on June 11, violated the rights of the First Amendment by the punish protected speech directly.
“It is also clear that the threatened violations of plaintiff by prohibiting plaintiff’s truthful commercial speech outweigh the state’s interest in preventing fraud, protecting consumers from exploitation and stabilizing the insurance market,” Walker wrote in a Sunday issued Judgment.
The legislature passed the insurance measure on 30.
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Alex Dewey, managing partner of Gale Force, welcomed Walker’s decision.
“Gale Force is absolutely against insurance fraud of any kind and agrees that the state should punish fraudulent actors, but that is no excuse to impose draconian restrictions on companies like Gale Force that follow the rules and simply help owners recover, when Mother Nature goes on strike. ”“ Dewey said in a press release.
Florida Department of Business and Professional Regulation officials were not immediately available Tuesday for comment. Department Secretary Julie Brown was a named plaintiff in the lawsuit.
The new law, which went into effect July 1, allows larger annual rate increases for Citizens Property Insurance Corp. clients, prevents contractors from “advertising” homeowners to solicit insurance claims, takes steps to limit legal fees and reduces the time to file claims.
Walker’s engagement focused on legal requirements related to communications from contractors. The new law would prevent contractors from soliciting homeowners’ roof damage claims through “prohibited advertisements” that could include emails, door hangers, flyers and brochures.
While the state has the right to regulate contractors and protect Floridians from fraud, Walker wrote, “it must do so within the limits set by the constitution”.
“Here the legislature has not done this accordingly,” added the judge.
In the lawsuit, Gale Force Roofing and Restoration said it is soliciting homeowners to contact the company for inspections of storm damage to roofs.
“The plaintiff (Gale Force Roofing and Restoration) will then truthfully tell the homeowners the type and extent of the damage,” the lawsuit said. “The plaintiff will then encourage homeowners to contact their insurance company to make a claim under their home insurance policy and contract with the plaintiff to transfer the benefits available under their home insurance policy to the plaintiff.”
The company also argued that the new law is aimed more at reducing insurance claims than preventing fraud. The law serves as a “thinly veiled attempt” to prevent homeowners from getting outside help to make valid insurance claims for home repairs.
Proponents of the bill and insurance industry officials argued that questionable, if not fraudulent, roof damage claims played a large role in the increase in costs.
The state denied that the law’s restrictions violated the rights of the First Amendment, arguing that the law should be viewed as an appropriate restriction on commercial speech aimed at combating consumer exploitation and fraud.
According to the law, “targeted digital advertising or e-mails, door hangers or personally distributed brochures are prohibited if and only if they encourage a homeowner to claim roof insurance,” write the country’s lawyers.
“Radio and television advertising is allowed because it doesn’t target ‘a specific person’,” they argued.
But Walker disagreed.
Under the new law, licensed building contractors may “not ask, instruct or induce a consumer to contact a building contractor or appraiser to file a roof damage insurance claim in writing or electronically – and it is not a” not licensed person, ‘”wrote Walker.
The face-to-face verbal communication of the message “does not appear to be against the written law,” the judge stated.
“However, this law effectively prohibits this specific communication from contractors – licensed or not – in writing or electronic form in the state of Florida,” he added.
Gale Force argued that the law restricts his First Amendment rights because it forces the company to stop its written advertising, encouraging consumers to contact it to file a roof damage insurance claim.
“Accordingly, the plaintiff is self-censoring by avoiding advertising that appears to be in violation of the new law,” Walker wrote, adding that the facts are sufficient to support an injunction to block the law from going into effect.
The state tried to back up its argument that the new law is promoting the interests of the state by including an anecdote about “how a ‘direction-to-pay’ ‘arrangement left a homeowner with a’ burned out house ‘, a job which was never completed and a lien of $ 100,000. “
But Walker called the state’s evidence “lackluster”.
Instead of prohibiting protected speech, could the legislature not directly regulate agreements between homeowners and contractors or impose liability for incomplete services? he wrote in Sunday’s 44-page order, which listed other flaws in the state’s arguments.
“In short, this court is not convinced that the challenged law directly serves any state interests. Instead, the defendant appears to be suggesting that the law prohibits advertising that exists in the same universe as the state’s alleged interests, directly promoting those interests. But the (US) Supreme Court has already rejected such a broad proclamation, ”he said. “To sum up, the defendant has identified legitimate, vital government interests. But none of these interests are directly implied by contractors promoting their roof repair services to homeowners and informing homeowners that they may have storm damage that can be covered by insurance. “
By Jim Turner and Dara Kam, Florida Intelligence Service