Florida Supreme Court Affirms That 48-Hour Post-Event Public Adjuster Solicitation Ban Is Unconstitutional
Jeffrey H. Atwater v. Frederick W. Kortum, Case No. SC11-133 (Fla. 2012).
On July 5, 2012, the Supreme Court of Florida affirmed a decision by the Florida First District Court of Appeal that the statutory ban on public adjusters initiating contact with a claimant within 48 hours of an event that may be the subject of an insurance claim is an unconstitutional restriction on the public adjusters’ right to engage in commercial speech.
A 2008 statute (s. 626.854(6), Fla. Stat.) provided that public adjusters could not “initiate contact or engage in face-to-face or telephonic solicitation” with an insured within 48 hours of an event that may be the subject of a claim. The statute attempted to alleviate perceived pressure by public adjusters on traumatized homeowners in the immediate aftermath of a hurricane.
In 2009, a public adjuster filed suit claiming that his constitutional right to free speech was violated by the statute as it precluded all communication from a public adjuster to an insured for 48 hours. The Department of Financial Services claimed the statute was permissible because it did not preclude written communication from a public adjuster to an insured during those 48 hours. The trial court agreed with the Department and upheld the statute after finding that it regulated the adjusters’ conduct, not speech. The First District reversed the trial court, holding that the statute regulated the adjusters’ commercial speech and applied to all forms of contact by the adjusters when it barred them from “initiat[ing] contact” with insureds. The First District concluded that the Department failed to establish that the 48-hour ban was justified by the chance that some public adjuster may unduly pressure hurricane victims or otherwise act unethically towards them immediately after a storm.
The Supreme Court of Florida first agreed with the First District that the statute barred all communications by public adjusters for the first 48 hours, not just oral or face-to-face communications. Then after citing U.S. Supreme Court precedent that business solicitation is protected commercial speech, it affirmed that the Department failed to show that the statute was no more “extensive than necessary to serve the State’s interests.” The State has an interest in protecting such insureds, but the statute was more extensive than necessary in protecting that interest at the expensive of the commercial speech rights of public adjusters.