If new local rules hurt revenue, Florida businesses will be allowed to sue for damages

Businesses whose revenues decline by 15% or more as a result of a local ordinance or local citizens initiative will now be allowed to sue cities and counties for damages under a measure passed by lawmakers on Wednesday and sent to the governor for approval.

The proposal is one of a series of measures passed this legislative session in the aftermath of the COVID-19 standoffs between Republican Gov. Ron DeSantis and more progressive big city governments.

In recent years, conservative legislators have used state law to reverse or prevent local government decisions restricting natural gas hookups, regulating vacation rentals and party houses, banning plastic drinking straws and certain sunscreens, and imposing rules on where utility companies can set up solar farms.

Proponents called it a “pro-business” bill designed to protect private property rights. Opponents said it will be an expensive burden for taxpayers, encourage frivolous lawsuits, prevent efforts to crack down on such things as puppy mills and to restrict bans on products that harm the environment.

“This is just going to give the bad actors another opportunity to threaten local governments to get their ways,” said Rep. Christine Hunschofsky, a Democrat and a former mayor of Parkland.

Businesses have to be open for 3 years

The bill, SB 620, would apply to businesses that have been in operation for at least three years. It allows them to file lawsuits seeking to recover lost profits for seven years or the number of years the businesses have been in operation, whichever is less.

If the bill becomes law, the impact could have substantial impact on local governments’ budgets. Florida TaxWatch, the business-backed research organization, has estimated that the legislation will “lead to a number of financially motivated and malicious lawsuits, costing local governments over $900 million annually” because local governments will be forced to increase taxes or reduce services to cover legal fees.

If the bill had been in effect in 2020, Key West residents who voted to ban cruise ships with more than 1,300 passengers from docking at the city ports would have been subject to paying the cruise lines for lost business during the months the ban was in force.

If it had been law last year, Miami-Dade County, which imposed a fertilizer ban on lawns and plants during the rainy season to prevent algae blooms and fish kills, could have been forced to pay businesses that saw big drops in fertilizer sales.

And if the bill becomes law this year, Miami Beach residents, who voted in a non-binding referendum last year to impose earlier last-call hours for alcohol sales at local bars, could be held liable for damages if the new law leads to lost business.

The bill is a priority of Senate President Wilton Simpson, a Trilby Republican and candidate for agriculture commissioner. He has defended the proposal as a way to stop the practice of businesses flocking to the Republican-controlled Legislature to reverse decisions by elected officials at the local level.

“There is a segment of our local government that has taken an openly hostile position towards businesses,’’ said Rep. Spencer Roach, a North Fort Myers Republican who sponsored the bill to reverse the Key West ordinances last year.

House sponsor Lawrence McClure, R-Dover, said the bill would cause local governments to “pause before they enact ordinances that would hurt jobs and businesses.” He said that businesses have a more difficult time operating than anytime in history, and the state should favor businesses over government.

“The tie should absolutely go to the risk taker,” he said. “It should go to the private sector.”

But Rep. Dianne Hart, a Tampa Democrat, warned that it will have a “major chilling effect on local governments’ ability to enact meaningful, popular ordinances,’’ she said.

She noted that Florida will be the first state in the nation with such a policy. “Why do we always have to be the first in the nation to do bad things?” she asked.

“This is my favorite bill by far,” Rep. Juan Alfonso Fernandez-Barquin, R-Miami-Dade County, said. “It’s a great bill.”

How the new law would work

The original version of the bill was fiercely opposed by local government officials who warned it would lead to an avalanche of lawsuits when cities and counties pass noise ordinances, zoning rules or public safety measures aimed at regulating businesses the community considers dangerous or a nuisance. Faced with widespread opposition, Senate sponsors amended the bill, limiting when businesses may file lawsuits and providing options for the city or county to avoid paying damages by doing one of three things:

▪ Repeal the offending ordinance.

▪ Amend the ordinance in a way that removes the offending provision.

▪ Grant the business a hardship waiver, which would be determined by the local government.

After the change, the Florida League of Cities, which had opposed the original bill, announced it was neutral.

The House passed the bill 69-45 and it will be sent to the governor. Six House Republicans joined most of the House Democrats to oppose the bill. Those Republicans were Reps. Thad Altman of Indialantic, Melony Bell of Fort Meade; Sam Killebrew of Winter Haven, Patt Maney of Shalimar, Jim Mooney of Islamorada, and David Smith of Winter Springs. Rep. Anika Omphroy, D-Lauderdale Lakes, voted for the bill.

The House is awaiting final passage of a related piece of legislation, SB 280, that will require local governments to do an economic impact statement for ordinances before they adopt them and give any resulting legal challenge a fast-track priority in court.

This story was originally published March 9, 2022 at 4:42 PM.