The right to protest in America is a fundamental right guaranteed by the First Amendment to the United States Constitution, which protects both the “freedom of speech” and the “right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

The right to protest is, however, limited – “peaceable” being the operative word.

In response to recent demonstrations across the United States, Florida Governor DeSantis signed the “Combatting Public Disorder Act” on April 19, 2021. The most reported result of the new law is the creation of new criminal offenses and the enhancement of criminal penalties for applicable existing offenses. The potential chilling of First Amendment rights has already resulted in a judicial challenge.

Far less reported, however, is the potential impact of a separate provision in the Act that could have a significant financial effect on local governments and the insurance companies that insure them: namely, the waiver of sovereign immunity and establishment of a new cause of action for unlimited damages against local governments by any person who is killed, injured or suffers property damage as a result of the local government’s failure to provide reasonable law enforcement protection during a riot or unlawful assembly.

Specifically, the Act creates a duty on municipalities to allow its municipal law enforcement agency to respond “appropriately” to protect persons and property during a riot or an unlawful assembly based on the availability of adequate equipment to its municipal law enforcement officers. If the governing body of a municipality or a person authorized by the governing body of the municipality breaches that duty, the municipality is civilly liable for any damages, including damages arising from personal injury, wrongful death or property damage proximately caused by the municipality’s breach of duty.

Sovereign immunity for the municipality is specifically waived – the damages recoverable under the Act by a person who is killed, injured or suffers property damage is not barred by sovereign immunity, nor is any recovery limited by sovereign immunity caps of $200,000 per person and $300,000 per incident contained in Florida Law (Section 768.28).

And, as discussed below, there is a possibility these types of losses may be limited and/or excluded by insurance policies.

This new cause of action represents a major expansion of potential liability for municipalities. Historically, municipal decisions as to how to allocate police resources could not be challenged and second-guessed by courts.

The leading precedent on the issue is the 1970 decision of the Florida Supreme Court in Wong v. City of Miami. In that case, several merchants sued the City of Miami claiming that they had suffered over $100,000 in property damage because the city decided to withdraw police officers that had been stationed in their vicinity during public protests at the 1968 Republican National Convention in Miami Beach.

The Court rejected the claim, saying, “The sovereign authorities ought to be left free to exercise their discretion and choose the tactics deemed appropriate without worry over possible allegations of negligence. Here officials thought it best to withdraw their officers. Who can say whether or not the damage sustained by petitioners would have been more widespread if the officers had stayed, and because of a resulting confrontation, the situation had escalated with greater violence than could have been controlled with the resources immediately at hand?”

As the result of the passage of the Combatting Public Disorder Act, such decisions during stressful times will potentially expose municipalities to unlimited liability. What may seem reasonable to the local decision makers may be interpreted differently by plaintiffs seeking recompense for their damages. Even worse, because the Act became effective immediately, an affected municipality may in the short-term face potentially uninsured liabilities due to limitations and exclusions (such as riot or intentional act exclusions) in its existing insurance policies.

Just as the portions of the Act regarding criminal penalties potentially violates the U.S. Constitution, this aspect of the Act creating a new unlimited cause of action against municipalities may violate multiple sections of the Florida Constitution.

Article VII, Section 18 of the Florida Constitution generally provides that any law that requires a local government to expend funds must contain a specific legislative finding that the law fulfills an “important state interest.” The Florida Legislature must either provide sufficient funds or the legislation must be approved by two-thirds of the members of both the House of Representatives and the Senate.

The Act did not contain the legislative finding of an “important state interest” and did not obtain a two-thirds vote in either the House of Representatives (76 of the 120 voting yes) or the Senate (23 of the 40 voting yes). Instead, the staff analysis of the bill merely concluded that it “does not appear to require cities and counties to expend funds.” IT later conceded that it “may have an indeterminate impact on municipalities.”

It is, of course, difficult to determine the cost of this measure to municipalities because it is not known how many protests will take place in a given municipality, whether they will be “peaceful” and whether anyone will be injured or killed. However, given the new risk, municipalities that self-insure will need to set aside more funds to cover potential impacts, and those that purchase insurance could pay higher liability insurance premiums (or excess insurance). Municipalities would also incur additional training costs to implement the Act. Thus, a strong argument can be made that the enactment of the Act violated Article VII, Section 19 of the Florida Constitution.

In addition, Florida municipalities have historically been protected by governmental function immunity for planning level decisions, such as deciding how to allocate police resources. This immunity is premised upon the Separation of Powers provision of the Florida Constitution (Article II, Section 3), because, without it, the courts would be second guessing the police power and political decisions of other branches of the government. Given the constitutional foundation of governmental function immunity, municipalities could contend that it cannot be waived by the Florida Legislature and governor and thus the Act’s new cause of action is invalid.

Municipalities and insurance companies that insure local governments should carefully review the details of the new law and plan for the potential financial consequences of this new cause of action.

Insurance companies will need to evaluate the new risk in underwriting policies for local governments, and local government will need to either ensure that they have adequate coverage or otherwise budget accordingly.

Jamie A. Cole represents local officials and governments in matters that help to improve their communities and preserve home rule power.

Eric Stettin represents public and private entities throughout South Florida at both the trial and appellate levels in state and federal courts.

To read the original article in The Insurance Journal, click here.

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The lead plaintiff, the State-Boston Retirement System, brought a cause of action in federal court against BankAtlantic Bancorp, Inc. for damages resulting from the plaintiff’s failed investment in commercial real estate loans held by BankAtlantic Bancorp’s subsidiary, BankAtlantic. State-Boston alleged that BankAtlantic Bancorp, Inc. misrepresented the level of risk associated with the loans in paperwork that it filed with the SEC. Specifically, the complaint alleged that BankAtlantic Bancorp Inc. fraudulently misled the public about the deteriorating quality of its commercial real estate portfolio, including land acquisitions and development loans by not identifying the loans as substandard assets. Although BankAtlantic Bancorp Inc. had privately monitored many of these loans on a Loan Watch List, the company allegedly did not publicly reveal the declining credit quality of the loans until the company’s stock price dropped dramatically.

State-Boston sought to prove causation and damages with expert testimony from a financial analyst. The analyst had conducted an “event study,” a statistical technique which measures the effect of new information on market prices for securities. The purpose of the study was to show what kind of damages can be attributed to company disclosures as opposed to other factors in the market.

Applying the test used in Ledford v. Peeples, 657 F. 3d 1222 (11th Cir. 2011), the Court outlined the elements that State-Boston needed to prove in order to make a prima facie case of securities fraud: 1) material misrepresentation or omission; 2) scienter; 3) connection between the misrepresentation or omission with the purchase of a security; 4) reliance upon the misrepresentation or omission; 5) economic loss; and 6) loss causation. To prove loss causation, a plaintiff must show that the fraud was a substantial or significant contributing cause to the security’s decline in value. The Court rejected the evidence offered by the financial analyst as proof of loss causation. Specifically, the Court held that the analyst’s testimony did not account for the effects of the collapse of the Florida real estate market, which would have had an effect on the value of BankAtlantic’s land development loans. Because State-Boston failed to show that their financial loss was directly attributable to BankAtlantic’s malfeasance, it could not make a prima facie case of securities fraud.

Chaired by Matthew H. Mandel, our Litigation Division employs more than twenty litigators and trial attorneys with extensive experience representing private businesses, individuals and municipalities. Our litigators have prosecuted and defended a wide variety of general commercial and business dispute issues in both individual and class action settings, including fraud and civil RICO actions and claims alleging breach of fiduciary duty.

Author(s): Brooke P. Dolara

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Recently, federal prosecutors in Illinois filed an indictment against Atul Bisaria alleging that he engaged in a scheme to defraud two Chicago area banks and obtain money and property by means of materially false and fraudulent pretenses, representations, promises and material omissions. Mr. Bisaria allegedly persuaded Mutual Bank and Broadway Bank to loan him in excess of $9 million and $10 million each to renovate and hotels he owned in Boca Raton and Cincinnati. You can read a copy of the indictment here. Mr. Bisaria is also the former owner of a downtown Detroit hotel, which he used to secure a second loan from Mutual Bank. A default on this loan led to the deficiency judgment against him, his wife and Shubh Hotels Detroit, LLC in Michigan.

Relying upon their misinterpretation of Florida law, and ignoring the U.S. Constitution’s requirement that courts of sister States give “full faith and credit” to the judgments of other States, Shubh Hotels Detroit, LLC, Atul Bisaria, and Mihu Bisaria sought to reopen and relitigate virtually every issue previously determined by the Michigan court, including the appointment of a Michigan receiver.

Under both U.S and Florida law, judgments entered by sister state courts are entitled to full recognition and enforcement in all other courts of the United States, provided that the judgment debtor has had notice and an opportunity to be heard. Shubh Hotels Detroit, LLC, Atul Bisaria, and Mihu Bisaria all appeared and defended against the Michigan action over several years. Despite their allegations of improper decisions by the Michigan court, the deficiency judgment was never challenged properly in Michigan and is valid and enforceable in Florida accordingly. By her order, Judge Chernow Brown halted the effort by Shubh Hotels Detroit, LLC, Atul Bisaria, and Mihu Bisaria to turn Florida’s courts into a court of appeals for Michigan and ended the collateral attack on the $36,000,000 deficiency judgment against them.

WSH’s Litigation Division routinely represents private businesses and individuals in the prosecution and defense of a wide variety of general commercial and business dispute litigation in both individual and class action settings. Our attorneys have experience with Fraud and RICO litigation, securities litigation and fraudulent transfer litigation. Our representation of our clients does not end at the judgment stage; the attorneys in our Bankruptcy and Creditors’ Rights Group are skilled in enforcing and collecting domestic and foreign money judgments. The Group has directed collection efforts throughout the world, including Central and South America.

Author(s): Eric P. Hockman

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In September 2007, Christopher Milanese was arrested by Boca Raton police officers for a number of traffic violations. His car was impounded, and he was taken to the police station. The police thereafter issued him several citations and agreed to release him. The police called for a cab to pick up Milanese, escorted him to the front door, and released him. Unbeknownst to the City, Milanese did not get into the cab. Nearly one hour later, Milanese was struck and killed by a train about a mile from the police station. Milanese’s estate sued the City for negligence, alleging that the city had a “special relationship” that created the duty to insure Milanese’s safety, including releasing Milanese in a safe and reasonable manner. Specifically, the complaint alleged that the City should have escorted Milanese into the cab and not permitted him to wander the streets in an impaired condition. The City moved to dismiss, arguing that the City did not owe a duty of care to Milanese because 1) once released, he was no longer in custody, and 2) the City did not create a foreseeable zone of risk. The lower court granted the City’s motion to dismiss.

In ultimately affirming the lower court’s dismissal, the Fourth District on February 22, 2012 held that the City did not owe Milanese a duty of care once he was out of police custody because the City did not create or permit dangers to Milanese to exist, and did not otherwise subject Milanese to danger. Citing Lindquist v. Woronka, 706 So. 2d 358 (Fla. 4th DCA 1998), the Fourth District held that the Plaintiff’s “state-created danger” theory did not apply because the police played no part in creating any danger to Milanese, nor did they make him any more vulnerable to danger.

You can read a copy of the Fourth District’s February 22, 2012 decision here.

Author(s): Matthew H. Mandel

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The City of Homestead had terminated Johanna Faddis and her supervisor, City Manager Mike Shehadeh. Shehadeh brought suit against the city for breach of contract, and Faddis provided testimony in that case. In her deposition in Shehadeh’s case, Faddis explicitly stated that Shehadeh did not sexually harass her when she was employed by the City. However, she later testified in her own lawsuit that Shehadeh did sexually harass her. Judge Cueto concluded that Faddis had perjured herself and entered a Final Judgment Striking the Pleadings of Faddis, thereby dismissing the action.

Chaired by Matthew H. Mandel, WSH’s Litigation Division has extensive experience defending municipalities in all areas of liability. The Division has successfully defended elected officials, employees, individual departments, branches and divisions in both State and Federal court at the trial and appellate level. Our Appellate Practice Group, chaired by Edward G. Guedes (who provided significant support in the Faddis case), handles dozens of appeals generated each year by our trial practice. In addition, our Labor and Employment Law Group routinely represents public employers against claims brought under numerous State and Federal employment laws.

You can read a copy of the Final Order here.

To read more about the City’s victory in the Daily Business Review, please click here.

Author(s): Matthew H. Mandel & Brooke P. Dolara

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In 2005, Ashleigh Eminisor was struck by a Jacksonville Transit Authority (“JTA”) bus driven by Andreas Keck. Eminisor filed a negligence action against Keck, the JTA, and the Jax Transit Management Corporation (“JTM”), a nonprofit entity created to run JTA’s bus system and pay JTA’s unionized workers. Keck, who was employed by JTM, moved for summary judgment in the trial court, claiming immunity from suit and liability under F.S.A. 768.28(9)(a). The trial court denied Keck’s motion, finding that JTM was neither a “state agency or subdivision” or an agent of the state, and that Keck was therefore not entitled to immunity. Keck sought review of the trial court’s denial of his motion for summary judgment, and petitioned the First District Court of Appeal for a writ of certiorari. The First District declined to exercise certiorari review, concluding that certiorari review was improper. Keck appealed this decision to the Court.

In quashing the District Court’s decision, the Court held that an appellate court can review a non-final order where the trial court denied an employee’s motion for summary judgment based on a claim of immunity under F.S.A. 768.28(9)(a). Recognizing that its decision would require a change in the state’s appellate court rules, the Court requested the Florida Bar Appellate Court Rules Committee to submit a proposed amendment to the existing rule to accommodate the Court’s decision. The Court also reviewed the merits of Keck’s motion for summary judgment. In its analysis, the Court determined that JTM was indeed a “state agency or subdivision” because it primarily acts as an instrumentality of JTA, which is within the statutory definition of a state agency. Because Keck acted within the scope of his employment when he allegedly committed ordinary negligence, the Court held that Keck, as an employee of JTM, was entitled to individual immunity under F.S.A. 768.28(9)(a).

Chaired by Partner Matthew H. Mandel, WSH’s Litigation Division has extensive experience defending municipalities and governmental agencies in all areas of liability. The Division has successfully defended elected officials, employees, individual departments, branches and divisions in both State and Federal courts at the trial and appellate levels. The Firm specializes in cases involving negligence, tort liability, sovereign immunity, qualified immunity, civil rights, torts and common law claims. Our Appellate Practice Group, led by Partner Edward G. Guedes, handles dozens of appeals generated each year by our trial practice and successfully advocates regularly before the Florida Supreme Court and all of the Florida district courts of appeal.

You can read a copy of the Court’s Opinion here.

Author(s): Brooke P. Dolara

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In Delmonico, the lawyer had met privately with third-party witnesses as part of his investigation of a defamation claim asserted against his defendant client. The alleged defamation arose from assertions that the lawyer’s client had claimed that the plaintiff had provided prostitution services in order to lure clients away from the defendant. In the course of his investigation, the lawyer repeated to the witnesses (and perhaps elaborated upon) the assertion that the plaintiff had provided prostitution services and was even being prosecuted for prostitution. The plaintiff filed a second, separate lawsuit against the lawyer and his firm, asserting that the lawyer had also defamed the plaintiff and tortiously interfered with the plaintiff’s business relationships, causing a loss of several million dollars.

The trial court, upon motion of the lawyer, granted summary judgment and concluded that the lawyer’s conduct and statements as part of his investigation of the underlying defamation action were absolutely privileged, as being part of ongoing judicial proceedings. The Fourth District Court of Appeal affirmed, in a 2-1 decision. Judge Warner dissented, setting forth the basis for what would ultimately become the Supreme Court’s decision.

The Supreme Court agreed with Judge Warner’s “scholarly” dissent and concluded that the absolute privilege was not available to the lawyer under the facts of the case. Instead, since the comments made were arguably related to the subject matter of the underlying litigation, the lawyer would be permitted to invoke a qualified privilege, which in turn would force the plaintiff to prove not only that the comments were false, but that they were made with malice. The practical upshot of this new rule, however, is that the lawyer is subjected to having to litigate the secondary defamation claim against him or her, rather than effectively being immune from suit. The Court concluded that this represented a more appropriate balance between the competing policies of allowing a lawyer to freely investigate a claim asserted against his or her client and protecting individuals and companies from needless defamation and other tortious conduct.

At the heart of the Court’s announcement of this new rule was a concern about the ex parte nature of the communication, where opposing counsel would not have had an opportunity to respond to the assertions. As such, lawyers making comments in the course of hearings, depositions, mediations, etc., will continue to enjoy an absolute privilege. New care must be taken, however, with respect to comments made privately to potential witnesses in the course of investigating a client’s defense. As the cliché now applies to counsel: “Whatever you say may be used against you in a court of law.”

Attorneys in WSH’s Appellate Practice Group, led by Partner Edward G. Guedes, include Florida Board-certified experts, and have a record of success pursuing and defending appeals of final judgments and verdicts, as well as non-final, interlocutory appeals, on behalf of public and private sector clients throughout the State. In addition, the Group’s attorneys, with keen insight into appellate procedures and the current state of the law on various procedural and substantive issues, also provide invaluable trial/litigation support to our Litigation Division on a daily basis.

Author(s): Edward G. Guedes

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In 2010, a group of Philadelphia-area cable television subscribers sued Comcast, alleging that the company engaged in unlawful swap agreements with local competitor cable providers in violation of federal antitrust laws. The plaintiffs proposed four theories of antitrust impact, including the theory that Comcast’s activities reduced the level of competition from “overbuilders,” companies that build competing cable networks in the area where the incumbent provider already operates. The District Court accepted the “overbuilder” theory of antitrust impact, but rejected the other three theories. The District Court also found that the damages could be assessed on a classwide basis, relying on a regression model submitted by the plaintiffs. The model sought to establish a “but for” baseline – a figure that would show what competitive prices would have been if no antitrust violations had occurred. However, the model also incorporated all four theories of antitrust impact advanced by the respondents, and the lower courts only permitted the respondents to proceed under the “overbuilding” theory.

The Court held that the respondents’ class action was improperly certified under Fed. R. Civ. Pro. 23(b)(3). Specifically, the Court held that the regression model did not establish that damages are capable of measurement on a classwide basis because it was not based solely on the overbuilding theory, but incorporated elements of the three other theories that the District Court rejected. The Court further held that the Third Circuit erred in refusing to entertain arguments challenging the regression model at the class certification stage on the basis that they were pertinent to the merits of the case (specifically, the calculation of damages).

WSH’s Litigation Division routinely represents private businesses, governmental bodies, and individuals at every level of the justice system. In addition to the Litigation Division, our Appellate Practice Group uses its trial, negotiation and appellate skills to put our clients in the best leverage position at every phase of a lawsuit. Our attorneys try cases in front of juries, judges, administrative panels, arbitrators and appellate panels. We have prosecuted and defended a wide variety of general commercial and business dispute issues in both individual and class action settings, including those establishing law in the areas of business torts, class actions, fraudulent transfers, insurance and securities. Recent successes include Member and Miami-Dade Partner-In-Charge Michael S. Popok’s representation of Cantor Fitzgerald in a multimillion dollar suit involving the purchase of a life settlements firm, and a $10 million action concerning the attempt to broker the sale of life insurance policies in the secondary market, as well as Founding Member Joseph H. Serota’s defense of a South Florida municipality in a class action claim alleging violations under the Fair Labor Standards Act, and the defense of a municipality in a class action based upon an allegedly unconstitutional ordinance.

Author(s): Brooke P. Dolara

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Congratulations go out to Matthew H. Mandel (who handled the trial) and to Laura K. Wendell (who handled the appeal)!

Author(s): Brooke P. Dolara

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Plaintiffs John E.D. Grunow, Jr. and O.R. Golf Partners sued neighboring landowners Joel and Judy Harris for various tort claims, alleging that the couple ordered landscapers to cut down protected mangrove trees to improve the Harrises’ ocean view. After a two week trial, a jury rendered a verdict for the Harrises and the court entered a final judgment. The plaintiffs moved for a new trial and to set aside the jury verdict, and the trial court granted their motions. In doing so, the trial court concluded that a new trial was warranted for three reasons: 1) defendants’ counsel violated an order in limine concerning settlement with former defendants in the action; 2) introduced out-of-court statements to impeach its own witnesses; and 3) used improper “empty chair” commentary during closing argument by emphasizing that specific witnesses were not called by the plaintiffs.

The Order In Limine

The plaintiffs moved for an order in limine prohibiting evidence or testimony of settlement with other defendants in the case. The trial court granted the motion. During direct examination of plaintiff’s former landscaper, defense counsel asked the witness if he was concerned he would be “pulled into this case,” to which the witness responded “we already were.” In the plaintiff’s motion for a new trial, they argued, and the trial court agreed, that this statement violated the order in limine prohibiting testimony of plaintiff’s settlement. The District Court, however, rejected this argument. After noting Florida’s public policy encouraging settlement and preventing prejudice of a jury, as well as the statutory prohibitions against introducing evidence concerning settlement negotiations, the District Court concluded that neither the question nor answer violated the order in limine because evidence of another claim is not evidence of a settlement or compromise of the claim.

Impeachment

With regard to the out-of-court statements, defense counsel used prior statements made under oath during a deposition in another legal proceeding to impeach inconsistent answers to the same questions at trial. The District Court rejected plaintiffs’ assertion that the witness was called primarily for the purpose of introducing inadmissible hearsay since the record reflected additional substantive testimony by the same witness unrelated to the prior sworn statements. Therefore, use of the prior statements was appropriate for impeachment because the record reflected the inconsistency of the answers provided by the witness.

The District Court noted that when a witness is unable to recall facts at trial that the witness was able to recall when giving the prior sworn testimony, the proper procedure is to ask the witness to silently read the relevant parts of the prior statement in an effort to refresh the witness’s recollection before re-asking the question. If the witness remains unable to recall the event in question, then the prior sworn statement can be used to impeach the witness’s credibility.

“Empty Chair” Commentary

The District Court held that defense counsel’s closing argument, which criticized the plaintiffs’ failure to call relevant witnesses identified during trial, was not improper because the plaintiffs countered the argument during rebuttal. Moreover, assuming for the sake of argument the statements were improper, the plaintiffs did not object to the commentary during closing argument or move for a mistrial. The District Court noted four requirements that must be met before relief can be granted from improper, but unobjected-to, closing argument: (1) the challenged argument must be improper; (2) the improper argument must be harmful; (3) the improper argument must be incurable; and (4) proof that the improper argument so damaged the fairness of the trial that the public interest in our system of justice requires a new trial. The plaintiffs failed to satisfy any of these requirements.

You can read a copy of the Court’s decision here.

Author(s): Michelle Vos

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