Florida Capital Update: September 2011
Capital Policy Making
Redistricting will dominate the regular legislative session. The House Redistricting Committee is chaired by Will Weatherford (R) and vice-chaired by Stephen Precourt (R). The Senate Reapportionment Committee is chaired by Don Gaetz (R) and vice-chaired by Gwen Margolis (D). Both committees have been holding public hearings across the state. For meeting locations and dates, see http://www.flsenate.gov/session/redistricting/hearings and http://censusvalidator.blob.core.windows.net/mydistrictbuilderdata/Public%20Participation/Public_Meeting_Schedule.pdf
Due to redistricting, the 2012 regular session convenes early on January 10, 2012. Accordingly, the dates for interim committee meetings also have been moved up, and are now scheduled for September 19; October 3, 17 and 31; November 14; and December 5. If you have a policy initiative to press, the time to think about it is now. Some of the bill filing deadlines follow:
Statewide Health Information Network
Florida’s Agency for Health Care Administration (AHCA), through its Florida Center for Health Information Policy Analysis, is actively promoting the formation of a statewide health information network and the widespread adoption of electronic health record systems. The first participants in this state health information exchange were announced on July 12, 2011. AHCA has also developed universal patient authorization forms that may be used by providers and patients in a variety of situations. More information is available at http://www.fhin.net/.
Juvenile Justice Education
In advance of the 2012 session, the Florida Legislature has formed the DJJ Education Workgroup, the purpose of which is to reform how the State of Florida delivers public education to juveniles. Sen. Stephen Wise (R) considers the issue an important part of his legacy during his last term in office.
Class Action Certification Approved for Knowing Statutory Violation Although Premium Triggering Violation Returned
In Sosa v. Safeway Premium Fin. Co., SC 09-1849 (Fla. July 7, 2011), the Florida Supreme Court reversed the Third District Court of Appeal’s decision that the plaintiff failed to satisfy the requirements of commonality and predominance needed for class certification under Florida Rule of Civil Procedure 1.220. The plaintiff claimed that the defendant violated Sections 627.840(3)(b) and 627.835, Florida Statutes (2003), by knowingly overcharging him an additional service charge of $20 twice in a 12-month period in two premium finance agreements which he entered into with the defendant.
A threshold question was whether the plaintiff had standing to represent the putative class members, despite the defendant crediting the plaintiff $20 on his third premium finance agreement equaling the amount he was overcharged on his second premium finance agreement. The court determined that he did have standing because the plaintiff’s economic injury for which he may pursue redress is in the form of a damage recovery of the entire premium finance charge plus twice the amount under section 627.835.
As to class certification, the court held that Smith v. Glen Cove Apartments Condo. Master Ass’n, Inc., 847 So. 2d 1107 (Fla. 4th DCA 2003) “provides a proper analysis of rule 1.220’s commonality and predominance requirement,” and Olen Props. Corp. v. Moss, 981 So. 2d 515 (Fla. 4th DCA 2008) “provides a proper analysis of rule 1.220’s commonality requirement.” The Florida Supreme Court held that the Third District erred by not applying the abuse of discretion standard of review to the trial court’s grant of class certification. It disagreed with the Third District when it held that “there would be different circumstances for each individual member of the class which would serve as the bases for and as defenses to the additional premiums charged such that the class action requirement of commonality cannot be met.”
The Florida Supreme Court said the Third District “diverted the proper focus from the common and routine course of conduct and billing practice of [the defendant] overcharging its customers to the mere factual differences surrounding each putative class member’s claim.” The Florida Supreme Court also disagreed with the Third District when it found that the individual claims of the plaintiff and of each class member predominated over any common allegations of an overcharge and negated a class action. The court ruled that the common questions for the plaintiff and the class “pervade the individualized claims because they are based on the common question of whether [the defendant] engaged in a common course of conduct and business practice that resulted in it overcharging [the plaintiff] and the putative class members in violation of Florida law, which is a claim that requires generalized, class-wide proof.”
Last, the Third District interpreted section 627.835’s “knowingly” requirement as requiring the plaintiff to allege facts that implicated the defendant’s specific intent to overcharge not only the plaintiff, but also each class member on an individual basis. But the Florida Supreme Court ruled that the Third District conflated rule 1.220’s class certification requirements with a question for the trier of fact whether the defendant “knowingly” overcharged the plaintiff. In dissent, Justice Canady, joined by Justices Quince and Polston, objected that the court had no basis to exercise jurisdiction and argued that the need to establish knowing statutory violations set this case apart from Glen Cove and Olen Properties.
Governor’s Executive Orders Relating to Rulemaking Held Unconstitutional
In Whiley v. Scott, SC11-592 (Fla. Aug. 16, 2011), the Florida Supreme Court granted the petitioner’s petition for quo warranto (“by what authority”) and held that the Governor exceeded his constitutional authority claimed under article IV, section 1(a) of the Florida Constitution by enacting Executive Orders 11-01 and 11-72, the first of which suspended rulemaking, established the Office of Fiscal Accountability and Regulatory Reform (OFARR) within the Executive Office of the Governor to review all rules prior to promulgation, and prohibits the Secretary of State from publishing notices of rulemaking except at the direction of OFARR. Executive Order 11-72 was issued after Whiley filed her petition.
The court rejected the dissent’s conclusion (Polston, JJ. and Canady, CJ., dissenting) that the second order lifted the suspension of the first order, and instead concluded “the only relevant distinction we can discern between the two orders is that Executive Order 11-01 established OFARR, while Executive Order 11-72 continues operation of OFARR.” The court ruled that quo warranto “does not require that a petition have a real and personal interest in the public official’s action at issue,” and that the Governor’s actions violated separation of powers by usurping a legislative rulemaking power entrusted to agency heads under the Administrative Procedure Act.
The court rejected the Governor’s and dissents argument that the Governor’s “power to remove” agency heads is analogous to the “power to control” their rulemaking decisions. The court withheld issuance of the writ of quo warranto on the assumption “that any provision in Executive Order 11-72 suspending agency compliance with the APA, i.e., rulemaking, will not be enforced against an agency at this time, and until such time as the Florida Legislature may amend the APA or otherwise delegate such rulemaking authority to the Executive Office of the Governor.”
Constitutional Challenge Filed Against Legislators to “Process” of Enacting Impact Fee Statute Dismissed
In Haridopolos v. Alachua County, Fla., Case No. 1D10-6433 (Fla. 1st DCA July 7, 2011), the First District Court of Appeal rejected the constitutional challenge that a group of municipalities, the Association of Counties, Florida League of Cities and Florida School Boards Association filed against the President of the Senate and Speaker of the House of Representatives to what the plaintiffs characterized as the “process” by which section 163.31801(5), Florida Statutes (2009), was enacted. Section 163.31801(5) provides that:
In any action challenging an impact fee, the government has the burden of proving by a preponderance of the evidence that the imposition or amount of the fee meets the requirements of state legal precedent or this section. The court may not use a deferential standard.
The plaintiffs challenged this law as violating article V, section 2 (providing that legislative changes to a court rule of practice and procedure must be adopted by a two-thirds vote in each chamber); article II, section 3 (providing for the separation of powers); article VII, section 18(a) (providing that “[n]o county or municipality shall be found by any general law requiring such county or municipality to spend funds or take an action requiring the expenditure of funds” unless the legislature has, among other things, adopted the bill by a two-thirds vote in each chamber); and article VII, section 18(b) (providing that “the legislature may not enact, amend, or repeal any general law if the anticipated effect of doing so would be to reduce the authority that municipalities and counties have to raise revenues in the aggregate[,]” unless such law is adopted by a two-thirds majority in each chamber).
But the court rejected the plaintiffs’ effort to distinguish precedent to the effect that legislators are not proper parties to actions seeking a declaration of rights under a particular statute on the theory that their challenge was to the process by which the statute was adopted, rather than a challenge to the statute’s constitutionality. The court held, in reality, the challenge was to the statute itself – especially in light of the article II, section 3 challenge. The court granted the President and Speaker’s petition and quashed the trial court’s order denying their motion to dismiss.
Statutory Bond Cap Benefiting Tobacco Companies Not a Special Law or Impingement on Florida Supreme Court’s Rulemaking Authority
In R.J. Reynolds Tobacco Co. v. Hall, Case No. 1D10-2820 (Fla. 1st DCA 2011), the First District Court of Appeal rejected the appellee’s constitutional challenges to section 569.23(3), Florida Statutes, which provides for an automatic stay of a civil judgment for any member of decertified class action and caps the bond that a signatory to the tobacco settlement agreement (known as the “FSA”) must post in order to obtain the stay. The appellee who obtained a $15.75 million judgment against R.J. Reynolds argued that section 569.23(3) is a special law because it applies only to the five tobacco companies that signed the FSA and the plaintiffs in select cases. The appellee also argued that section 569.23(3) violated the separation of powers mandate in article II, section 3 by impinging upon the Florida Supreme Court’s exclusive rulemaking authority under article V, section 2(a). The court rejected both arguments.
First, the court deferred to the legislature’s findings that “the State of Florida itself would be at risk in its continued receipt of settlement payments [under the FSA] if the ability of participating manufacturers to make the payments were threatened by a requirement that the manufacturers immediately pay massive awards of punitive damages.” Payments to the state have been as high as $765 million and are projected to be roughly $350 million per year in the upcoming fiscal years. They fund various state agencies and programs including the comprehensive statewide tobacco education and prevention program required by article X, section 27.
With respect to separation of powers, the court held that the establishment of limits on the amount of the bond required for a stay pending appeal is a substantive matter within the purview of the legislature and, thus, section 569.23(3) does not impermissibly intrude on the authority granted to the Florida Supreme Court by article V, section 2(a). However, the court also certified to the Florida Supreme Court the question whether section 569.23(3) violates the State Constitution.
Constitutional Challenge to 2009 Growth Management Act Dismissed
In Atwater v. City of Weston, Fla., Case No. 1D10-5094 (1st DCA May 2, 2011), several Florida cities and counties sought a declaratory judgment invalidating chapter 2009-96, Laws of Florida, “[a]n act relating to growth management,” for violating the single subject and unfunded mandate provisions of the Florida Constitution. The court determined that none of the four named defendants including the Governor or legislators were proper parties, and it therefore reversed the grant of summary judgment invalidating chapter 2009-96 and remanded to the trial court to dismiss the complaint. The motions for rehearing were denied on June 28, 2011.
Capital Rules and Variances
The Agency for Health Care Administration is considering adoption of Rule 59G-4.085, F.A.C. incorporating by reference the Florida Medicaid Early Intervention Services Coverage and Limitations Handbook. This amendment updates the early intervention services policy, clarifies existing policy and incorporates Medicaid early intervention services forms. See https://www.flrules.org/gateway/ruleNo.asp?id=59G-4.085
The Department of Education is considering adopting Rule 6A-7.0712, the purpose of which is to administer section 1006.281, Florida Statutes, and establish minimum standards for local instructional improvement systems implemented by school districts. A rule development workshop will soon be noticed. See https://www.flrules.org/gateway/ruleNo.asp?id=6A-7.0712
Unions and others have filed a series of cases challenging privatization of prisons by the Department of Corrections; a ballot proposal that would strike the so-called no-aid clause of article I, section 3 of the Florida Constitution; legislation requiring state employees to contribute 3 percent of their annual salaries to the state pension fund; and other actions. See http://htpolitics.com/2011/07/22/state-capital-a-lollapalooza-of-litigation/