First District Court of Appeal Considers Whether Florida’s 48-Hour Public Adjuster Contact Ban is Unconstitutional

 

The issue of whether Florida law, which prohibits public adjusters from initiating contact with insurance policyholders for 48 hours after a major loss, creates an unconstitutional restriction of commercial free speech and equal protection was heard by Florida’s First District Court of Appeal on November 9, 2010. 

During the proceedings, Judge William A. Van Nortwick Jr. injected that, in his view, the case hinged on two issues:

• How should the statute be interpreted?
• What type of scrutiny should be applied?

During arguments, the Florida Department of Financial Services (“DFS”) said that, by its interpretation, the statute only prohibits face-to-face contact with policyholders because of the use of the phrase “through any other person or entity.”  The Appellant emphasized that the DFS has no Rule, order or declaratory statement to support that interpretation, only counsel’s assertions during argument. 

It was further argued that, absent a Rule, order or declaratory statement, the statute had to be read literally. 

Judge Nikki Ann Clark then expressed her belief that the phrase “prohibit contact” used in the statute includes all contact, not just face-to-face contact.  The other judges indicated they agreed. 

Judge Joseph Lewis asked State of Florida-the Appellee-why only public adjusters should be prohibited from initiating contact. The State’s case was based in the idea that it is regulating public adjusters and commercial speech is only incidentally impacted. 

The State responded that public adjusters are the only entity with a fiduciary duty to the policyholder. 

Further, under the DFS’s interpretation, the statute allows for written and electronic communication and therefore, is not a total prohibition of commercial speech. 

When questioned about the agencies’ ability to interpret a statute without having adopted a Rule, order or declaratory statement, the attorney for the State said it is impossible to adopt regulations for every necessary statutory interpretation, inasmuch as the Florida Legislature provides limited rulemaking authority.

Overall, during the hearing, the First District Court judges seemed to lean toward the idea that the statute is a complete ban on contact by public adjusters for 48 hours after a major loss, and thus may be considered to be an unconstitutional restriction of commercial free speech.

The Court will consider this matter further and ultimately issue a decision on the appeal.

Colodny Fass will continue to monitor this issue and report on the proceedings. 

 

 

Should you have any comments or questions, please contact Colodny Fass.