E-Copy Received Jul 19, 2010 2:19 PM

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FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA

FREDERICK W. KORTUM,

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Appellant,
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v. Case No. 1D1O-2459

L.T. Case No. 2009-CA-3926

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ALEX SINK, in her capacity as
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Chief Financial Officer and head
of the Department of Financial
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Services for the State of Florida,

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INITIAL BRIEF OF APPELLANT, FREDERICK W. KORTUM

George N. Meros, Jr.

Florida Bar No. 263321
Carlos G. Muñiz
Florida Bar No. 535001
GrayRobinson, P.A.
Post Office Box 11189
Tallahassee, Florida 32302
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Telephone (850) 577-9090

Facsimile (850) 577-3 3 Il
Attorneys for Appellant,
Frederick W Korturn

\255144\1 -#229921 vi
 TABLE OF CONTENTS

TABLE OF AUTHORITIES iii

PRELIMINARY STATEMENT
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STATEMENT OF CASE AND FACTS 1
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SUMMARY OF ARGUMENT
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ARGUMENT 15

STANDARD OF REVIEW
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I. The Statute Prohibits All Public Adjuster-Initiated Contact and

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Solicitation for 48 Hours 16

A.The plain text of the Statute prohibits all public adjuster-initiated

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contact, written and oral

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B. Traditional canons of statutory interpretation support Plaintiffs

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construction of the Statute 17
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interpretation 19
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D.The Department’s interpretation of the Statute contradicts its

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description of the Task Force’s draft legislative recommendations

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E. The Department’s interpretation of the Statute leads to absurd

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results
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II. The Statute Violates Plaintiff’s Right to Free Speech

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A.Because the Statute on its face regulates speech, the trial court
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erred by applying the 0 ‘Brien standard 22

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B.The correct standard for reviewing the Statute is the Central Hudson
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standard 23

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C. The Department has not carried its burden of proof under central

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1. The Department failed to prove that public adjuster solicitation in

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2. The Department failed to prove that the Statute is narrowly

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tailored to meet the state’s objectives

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3. This Court should follow the Pennsylvania Supreme Court’s decision

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striking down a 24-hour public adjuster solicitation ban

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4. The ‘lawyer cases” are inapposite

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III. The Statute Violates Public Adjusters’ Right to Equal Protection.

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IV. The Statute Violates Plaintiffs Right to be Rewarded for Industry.... 44

CONCLUSION 45

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CERTIFICATE OF SERVICE
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CERTIFICATE OF COMPLIANCE WITH FONT REQUIREMENT .47

\255144i -#229921 vi
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 TABLE OF AUTHORITIES

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Cases
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Beclcwith v. Department ofBusiness and Professional Regulation,

667 So. 2d 450 (Fla. 1st DCA 1996) 24, 25, 28, 29
Board of Trustees ofState University ofNew York v. Fox,
492 U.S. 469 (1989) 30,31
Bowen v. Georgetown University Hospital,
488 U.S. 204 (1988) 16
Central Hudson Gas & Electric C’orp. v. Public Service Comm ‘n ofNew York,
447 U.S. 557 (1980) passim
Craigmiles v. Giles,
312 F.3d 220 (th
6
Cir. 2002) 43

4
Department ofEducation v. Lewis,
416 So. 2d455 (Fla. 1982)

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24
Drake v. Walton County,
6So.3d717(Fla. 1t DCA2009) 15
Edenfield v. Fane,
507 U.S. 761 (1993) passim
Florida Bar v. Went-For-It, Inc.,
515U.S.618(1995) 24,36,40
Fraternal Order ofPolice v. Department ofState,
392 So. 2d 1296 (FIa. 1980) 44
Gore Newspaper o. v. Department ofRevenue,
398 So. 2d 945 (Fla. 4th
DCA 1981)

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18
Insurance Adjustment Bureau v. Insurance Commissioner,
542A.2d1317(Pa. 1988) 25,34,35
Jacques v. Department ofBusiness and Professional Regulation,
15 So. 3d 793 (Fla. 1st DCA 2009) 42
Leisure Resorts, Inc. v. Frank I Rooney, Inc.,
654 So. 2d 911 (Fla. 1995) 17
Level 3 Communications, LLC v. Jacobs,
841 So. 2d 447 (Fla. 2003) 42
Mason v. The Florida Bar,
208 F.3d 952 (1 1th
Cir. 2000) 30
New York State Ass ‘ii ofRealtors, Inc. v. Shaffer,
27 F.3d 834 (2d Cir. 1994) 28

\255144\1 -#22992! vi
 Ohraiik v. Ohio State Bar Association,

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436 U.S. 447 (1978)

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36, 37,38

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Pearson v. Edgar,

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153F.3
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d397(7 1998)

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25,33
Pruett v. Harris County Bail Bond Bd.,

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499 F.3d 403 ( th
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Cir. 2007)
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Rubin v. Coors Brewing Co.,
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514 U.S. 476 (1995)

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30
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State v. Bradford,
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787 So. 2d81l (Fla. 2001)

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22, 24, 36
State v. Conforti,
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688 So. 2d 350 ( th

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DCA 1997)
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23
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Sullivan v. Florida Department ofEnvironmental Protection,

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890 So. 2d417 (Fla. 1s DCA2004)

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Thompson v. Western States Medical Center,
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535 U.S. 357 (2002)

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United States v. 0 ‘Brien,
391 U.S. 367 (1968)
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12,21,22,23
Westerheide v. State,
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831 So. 2d93 (Fla. 2002)

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42
Statutes
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§ 626.854(5), Fla. Stat. (2009)

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5, 3 1
§ 626.8 54(6), Fla. Stat. (2009) 1, 6
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Other Authorities
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Merriam Webster ‘s Collegiate Dictionary, ]j1’1 Ed. (2009) 17

Task Force of Citizens Claims Handling & Resolution, Proposed Public Adjuster
Legislation 10-05-07 20
Task Force of Citizens Claims Handling & Resolution, Public Adjuster Legislation
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Final Draft 11-20-07

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7, 19
Constitutional Provisions
Art. I, § 2, Fla. Const 1, 44
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Art. I, § 4, Fla. Const 1

Laws of Florida
Ch. 2009-87, § 15, Laws of Fla
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27

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 PRELIMINARY STATEMENT

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On appeal, Appellant, Frederick W. Kortum, will be referred to as
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“Plaintiff.” Appellee, Alex Sink, in her capacity as Chief Financial Officer and

head of the Department of Financial Services for the State of Florida, will be

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referred to as “the Department.”
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Reference to the record on appeal shall be by “R” followed by the volume

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number and page number(s), e.g., (Rl25-26).

Reference to the trial transcript, contained within two volumes, shall be by

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“TT” followed by the page number(s), without regard to volume number, e.g., (TT
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145).

Reference to the trial exhibits shall be by “P1. Ex.” or “Def. Ex.” followed

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by the exhibit number, e.g., (P1. Ex. 6). CD

All emphasis is supplied unless otherwise indicated.

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 STATEMENT OF CASE AND FACTS

This case presents the question whether the state may impose a substantial
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restriction on public insurance adjusters’ commercial speech in the absence of any

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evidence that the state’s restriction alleviates a real harm.
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Plaintiff Frederick W. Kortum (“Plaintiff”), a licensed public adjuster, filed

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this lawsuit alleging that Section 626.854(6), Florida Statutes (the “Statute”),
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violates his rights under the Florida Constitution to free speech, to equal protection
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of the laws, and to be rewarded for his industry. See Art. I,

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a licensed public adjuster, Plaintiff is part of a profession that has been recognized
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in Florida for more than 50 years and that has grown significantly this decade.
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(R4-752). Defendant Alex Sink is the agency head of the Department of Financial
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Services (the “Department”), which regulates public adjusters and is tasked with
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enforcing the Statute.

The Statute provides as follows:

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person or entity initiate contact or engage in face-to-face or telephonic

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solicitation or enter into a contract with any insured or claimant under

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an insurance policy until at least 48 hours after the occurrence of an

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event that may be the subject of a claim under the insurance policy
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unless contact is initiated by the insured or claimant.

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Since the Statute took effect, Plaintiff has not initiated contact with or initiated
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solicitation of any claimant during the first 48 hours after a claim-inducing event.
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(R4-75 1).

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 Plaintiff presented evidence that the Statute’s restrictions have harmed his

business and made the practice of his business more difficult. (TT 139). Plaintiff

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testified that face-to-face solicitation is the most effective. (TT 212-13). Plaintiff

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further testified that policyholders are much more difficult to locate after the first
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(TT 184-85; 192).

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critical time for insurance policyholders. In the first 48 hours after a claim-
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inducing event (e.g., a fire or a hurricane), the policyholder might be contacted by

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the insurance company adjuster, cleaning services, contractors, roofers, and smoke-
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mitigation or water damage inspectors. (R4-752). As the Department stipulated,
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under Florida law, all of these persons and entities “may freely approach
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policyholders in the immediate aftermath of claim-producing events.” (R4-572).

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A key role of the public adjuster during this period (should the policyholder
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choose to hire one) is to help the policyholder make important decisions that could
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directly affect his financial recovery under his insurance policy. (TT 48). For
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example, the public adjuster advises the policyholder on how to avoid

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unnecessarily spending on mitigation and restoration efforts that are either overly
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aggressive or that are disproportionate to the policyholder’s likely recovery. (TT

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 63, 80). The public adjuster also helps the policyholder preserve evidence of any
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damaged property and even to find such property, which might be difficult to

locate in the wake of a disaster, and which the policyholder must preserve in order

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to prove and be compensated for a loss. (TT 65). In addition, the public adjuster

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advises the policyholder as to his rights and duties under the insurance policy,
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helps the policyholder interact with the insurance company adjuster, and helps the

policyholder identify options for appropriate temporary lodging. (TT 62-66).

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Policyholders can benefit from this information-sharing with a public adjuster soon

after a claim-inducing event even if the public adjuster’s interaction with the

policyholder does not result in a contract. (TT 69).

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proceeds. Nonetheless, the Department stipulated that a legislatively mandated

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study reported that “increases in settlements by Citizens policyholders who used
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public adjusters were such that, even after subtracting the maximum public
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adjuster fee allowed by statute, policyholders still received higher net recoveries.”
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(R4-756). Indeed, the study found that Citizens Property Insurance Corporation
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claim settlements related to Florida’s 2005 hurricanes were 747% higher and that
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non-catastrophe claim settlements were 574% higher when a public adjuster was

involved. (Pt. Ex. 6 at 7-8).

\255144\I -#22992 vi
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 Public Adjuster Regulation

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Among the entities seeking to do business with a policyholder in the

immediate aftermath of a claim-inducing event, the public adjuster is the only

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provider of goods or services who works exclusively as an advocate for the

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policyholder and who owes the policyholder a fiduciary duty. (R4-755). Public
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adjusters are subject to a host of laws and regulations, many of which are

specifically directed at consumer protection. (R4-756). Public adjuster contracts

are capped at 10% of the insurance settlement for claims arising out of state-of-

emergency events, and at 20% for all other claims. (R4-755). Public adjuster
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contracts must include anti-fraud provisions and are subject to unfair-and-

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deceptive-trade practices laws. (R4-757). Consumers have a statutory grace

period—five business days for state-of-emergency events, and three business days
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for all other events—during which they may cancel their contracts with a public
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adjuster. (R4-757). Finally, it is illegal in Florida to engage in the practice of
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public adjusting without a license, and all licensed public adjusters must post a

$50,000 surety bond, pass a written examination, and complete 24 hours of

biennial continuing education. (R4-753, 757).

The Statute is not the only solicitation-related law or regulation governing

public adjusters in Florida. Their administrative code of ethics requires public

adjusters to “refrain from attempting to negotiate [with] or obtain a statement from

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\255144\1 #22992I vi
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 any claimant who is or would reasonably be expected to be in shock or mental
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distress arising out of or resulting from a loss.” (R4-757-758). In addition, public

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adjusters may solicit claimants only Monday through Saturday and only between

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the hours of 8:00 a.m. and 8:00

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626.854(5), Fla. Stat.

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Public adjuster practices in Florida were the subject of extensive study by
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the legislatively created 2007 Task Force on Citizens Property Insurance Claims
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Handling & Resolution (the “Task Force”). The Department has stipulated that
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“no testimony or other evidence was presented to that task force demonstrating a
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statewide pattern of solicitation abuses by public insurance adjusters.” (R4-758).
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The Department further stipulated that “[v]ery few complaints against public II
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insurance adjusters received by [the Department of Financial Services] over the

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756). In addition, consistent with these stipulations, a 2010 study by the C

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Legislature’s Office of Program Policy Analysis & Government Accountability

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(“OPPAGA”) concluded that “the incidence of complaints, regulatory actions, and

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allegations of fraud involving public adjusters is generally low.” (P1. Ex. 6 at 1, 4).
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The Statute

As noted above, the text of the Statute is as follows:

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person or entity initiate contact or engage in face-to-face or telephonic

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solicitation or enter into a contract with any insured or claimant under

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an insurance policy until at least 48 hours after the occurrence of an

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event that may be the subject of a claim under the insurance policy

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unless contact is initiated by the insured or claimant.

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initiate contact” prohibits any type of public adjuster-initiated contact (including
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written contact) between a public adjuster and a claimant during the 48-hour

blackout period. Plaintiff understood this prohibition as being broader than, and

separate and distinct from, the Statute’s additional prohibition on “face-to-face or

telephonic solicitation.” Plaintiff based his interpretation on a plain reading of the

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the purported intent of the Task Force. The Department explained that its

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interpretation of the Statute was “based on comments made and amendments

approved at the November 16, 2007 Task Force Meeting.” (R4-763, n

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adjusters who attended the Task Force’s November 2007 meeting.

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Task Force of Citizens Claims Handling & Resolution, Public Adjuster Legislation

Final Draft 11-20-07, available at http://tinyurl.com/FinalDrafil 1-20-07.

\255144\l -#229921 vi
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 Most critically, the Task Force’s recommended language did not include the

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policy during the 48-hour blackout period. That restriction—the interpretation of

which is disputed by the parties here—was added by the Legislature, after the Task

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presented the testimony of four witnesses. Plaintiff called
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two witnesses: Plaintiff

himself, and Raymond Altieri. Mr. Altieri is a working public adjuster and the
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founding president of the Florida Association of Public Insurance Adjusters. (TT

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Insurance Adjusters in June 2011. (TT 40).
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importance of a public adjuster’s assistance of the policyholder during the first 48

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hours after a claim-inducing event. Altieri testified about the ways that an
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uninformed policyholder can make decisions that would substantially diminish

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recovery under the insurance policy—for example, by failing to preserve evidence,

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by failing to find damaged property, and by over-spending on mitigation or

restoration efforts. (TT 6 1-69; 112-14). More broadly, Mr. Altieri testified that:
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‘255144\1 -R229921 vi
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 “The public adjuster’s immediate involvement allows the policyholder to return to
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some semblance of normalcy of their lives so they can focus on their family’s
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immediate needs while the public adjuster handles the claim details.” (TT 68-

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69).

Both Plaintiff and Mr. Altieri testified about the ways public adjusters have

been harmed by the Statute. Each testified that, in response to the Statute, they
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have ceased initiating contact or communication (of any kind) with claimants
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during the 48-hour period. (TT 90; 136). Each testified that face-to-face
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communication is the most effective means of solicitation. (TT 90; 181). Each
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testified that claimants are often difficult to locate after 48 hours because by then
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they will have re-located to temporary housing. (TI 108; 192). Although neither
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put a dollar figure on the amount of his damages, each testified to having lost
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business as a result of the Statute’s solicitation and contact restrictions. (TT 60-61;
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138-39).
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The Department called two witnesses: Mr. Terry Butler, counsel to the Task

Force, to testify about the intent underlying the Task Force’s final recommendation

to the Legislature (TT 239); and Mr. Daniel Montgomery, an expert witness.
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contract with a public adjuster during the first 48 hours after a claim-inducing
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event (TT 257-64); that “in the hands of an unscrupulous public adjuster,” it could
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2551441 -#229921 vi
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 be unethical for solicitation to occur during the first 48 hours (TT 273); and that

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claimant’s insurance proceeds checks, while the latter generally protect their fees
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through the filing of a mechanic’s lien (TT 274).

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evidence depositions that related to three instances in which a public adjuster had
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engaged in improper conduct (two of the deponents testified about the same event).
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(TT 304). Plaintiff stipulated that the solicitation conduct described in those
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depositions was improper. (R4-758).
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judgment, the trial court first found that the Statute “is not clear and unambiguous”
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and that “either interpretation advanced by the parties is reasonable and logical.”
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(R5-866). The court did not analyze the language of the Statute in any detail or
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explain why it considered the Statute ambiguous.

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that, as the agency tasked with enforcing the Statute, the Department’s
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interpretation was entitled to deference. (R5-866). Applying that principle, the

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court concluded that, since the Department’s interpretation “is not ‘clearly
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 unauthorized or erroneous’ the Court must accept the Defendant’s interpretations
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of what the statute allows and what it prohibits.” (R5-867). The court went on to

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hold that: “The Court’s finding is that for the first 48 hours after a casualty, a
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public adjuster may not solicit face to face or by telephone with an insured who has
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sustained a loss. No other form of contact is prohibited by the statute during the

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first 48 hours and no prohibition of contact exists after 48 hours.” (R5-867).
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The trial court next addressed the standard under which to assess the

constitutionality of the Statute (as interpreted by the court). The court framed the
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threshold issue as whether the Statute regulates conduct (as argued by the
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Department) or speech (as argued by Plaintiff). (R5867). On that question, the

court concluded that the Statute “prohibits the ‘conduct’ of confronting the insured
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face to face and the ‘conduct’ of telephoning the insured during the 48 hour

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period.” (R5-867).

The trial court further found that the “primary legitimate government
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purpose of the statute is to provide a citizen that has been traumatized by a casualty
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loss with some breathing room before making the decisions that will be necessary
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to begin to put his or her life back together.” (R5-867). The court added that the
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Statute was “narrowly drawn, lasting only 48 hours;” that the Statute “does not
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attempt to curb any particular message;” and that the Statute prohibits only face-to
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face and telephonic communications. (R5-867). In making these findings, the

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255144l -ff229921 vi
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 court did not address the fact that the Legislature had not chosen to give
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policyholders “breathing room” from the other commercial actors that routinely
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contact them after a claim-inducing event.

The trial court then purported to apply its findings to the legal standard set
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forth in United States v. O’Brien, 391 U.S. 367 (1968), which governs First

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this case, the court simply cited a two-paragraph block quote from O’Brien. The

trial court’s final judgment mentions neither Central Hudson Gas & Electric Corp.

v. Public Service comm ‘n of New York, 447 U.S. 557 (1980), the seminal case that

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a “unique position with the insured.” (R5-869). Specifically, the court found that
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public adjusters are different from both company adjusters and tradespeople with

whom a claimant might contract. According to the court, company adjusters are
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different because they are already in a contractual relationship with the insured.

(R5-869). Tradespeople are different because they do not owe a fiduciary duty to
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\255144\1 -22992I vi
12
 the claimant and because they are paid differently (i.e., according to the court, they
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are not co-payees on the claimant’s insurance proceeds checks). (R5-869).

The trial court’s final judgment makes no mention of Plaintiffs claim that

the Statute violates his right to be rewarded for his industry.

\255144\l -#229921 vi
13
 SUMMARY OF ARGUMENT

“If the First Amendment means anything, it means that regulating speech

must be a last—not first—resort.” Thompson v. Western States Medical Center,

535 U.S. 357, 373 (2002). To give effect to this principle, the Supreme Court

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requires the state to prove that any such restriction (1) addresses a real harm and

(2) is narrowly tailored to further a substantial state interest. The Statute satisfies

neither of these criteria.

The evidence in this case—including the Department’s own stipulations—

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shows that Florida’s public adjusters do not engage in generalized solicitation-

related misconduct. On the contrary, a legislatively mandated OPPAGA study

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concluded that complaints and regulatory actions against public adjusters are

generally low. The Department thus fell far short of meeting its burden to prove
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that the Statute addresses a real harm.

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The evidence also shows that the Statute’s costs substantially outweigh its
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benefits and that the Statute’s restrictions go further than necessary to achieve the
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State’s legitimate objectives. The Statute cuts off contact between the public
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adjuster and the claimant when it is most critical, depriving the claimant of
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essential guidance and subjecting the claimant to the possibility of making

expensive and irreversible mistakes. The Statute’s costs are entirely avoidable,

\2551441 -#229921 vi
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 given that Florida law has in place other, less restrictive means of preventing

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solicitation misconduct and protecting claimants’ privacy.
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Finally, the Statute makes an irrational distinction between public adjusters

and other commercial actors who come into contact with the policyholder soon

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after a claim-inducing event. Many of those other actors are unlicensed individuals
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undermine the policyholder’s recovery. Without any justification, the Statute

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muzzles the speech of the one service provider who works exclusively as an

advocate for, and owes a fiduciary duty to, the claimant. The Statute thus depriv

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Plaintiff and other public adjusters of their rights to equal protection and to
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ARGUMENT

STANDARD OF REVIEW
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and its choice of the legal standards under which to review the Statute, are
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to de novo review by this Court. Drake v. Walton county, 6 So. 3d 717, 720 (Fla.
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Any factual findings of the trial court are reviewed to determine

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255144i -#229921 vi
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I. The Statute Prohibits All Public Adjuster-Initiated Contact and
Solicitation for 48 Hours.

To be clear: The Statute is an unconstitutional restriction on commercial

speech, even if one accepts the trial court’s and the Department’s interpretation of

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what the Statute does and does not allow.

Nonetheless, it is equally clear that the trial court erred by deferring to an

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unreasonable and implausible agency interpretation that ignores the Statute’s plain

meaning. See, e.g., Sullivan v. Florida Department ofEnvironmental Protection,

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890 So. 2d 417, 420 (Fla. 1st DCA 2004). Indeed, the trial court erred at the

threshold by assuming that the Department was entitled to any deference at all. As

the Department’s counsel repeatedly asserted at trial, administrative agencies speak

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authoritatively only through rules, declaratory statements, and final orders. (TT

50, 122). And it is an administrative agency—not its lawyers—that is entitled to

deference. Here, the Department’s proffered interpretation of the Statute was a

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mere litigating position, which is not entitled to deference. See, e.g., Bowen v.
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Georgetown University Hospital, 488 U.S. 204, 2 12-13 (1988) (“We have declined
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to give deference to an agency counsel’s interpretation of a statute where the

agency itself has articulated no position on the question. . . . Deference to what

appears to be nothing more than an agency’s convenient litigating position would

be entirely inappropriate.”)

2551441 -4229921 vi
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 A. The plain text of the Statute prohibits all public adjuster-initiated

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contact, written and oral.

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The Plaintiff has consistently maintained that the Statute prohibits public

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adjusters from initiating contact, including in writing, with a policyholder for 48
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hours afier a claim-inducing event. This follows from the plain language of the

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any other person or entity initiate contact . . ..“ In this context, “directly” means

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agency or step.” Merriam Webster’s Collegiate Dictionary, jjti’?

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word does not imply any particular means of communication—for example, “direct

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mail” is not a contradiction in terms. The Department’s argument that the Statute
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does not prohibit written contact ignores the plain, natural meaning of the Statute.
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B. Traditional canons of statutory interpretation support Plaintiff’s
construction of the Statute.

Plaintiffs position is confirmed by the application of the canon of

construction that “[w]hen the legislature has used a term

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statute but omits it in another section of the same statute, we will not imply it
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where it has been excluded.” Leisure Resorts, Inc. v. Frank I Rooney, Inc., 654

So, 2d 911, 914 (Fla. 1995). Here the Legislature chose to modify the restriction
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on “solicitation” with the adjectives “face-to-face or telephonic.” The Legislature

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 could have chosen to similarly limit the “initiate contact” prohibition by saying:

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initiate face-to-face or telephonic contact. But the Legislature chose not to,
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statute is presumed to have meaning.” Gore Newspaper co. v. Department of

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DCA 1981). “There is a strong presumption

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solicitation, enter into a contract). If the phrase necessarily implied oral or face-to-
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face communication, then it would have been unnecessary for the Legislature to
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include the adjectives “face-to-face or telephonic” in the Statute. In other words, it

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solicitation.” That the Legislature chose to modify the solicitation prohibition with
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the adjectives “face-to-face or telephonic” reflects the Legislature’s understanding

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that, without those modifiers, written solicitation would have been prohibited.
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And, of course, the Legislature did not so limit the “initiate contact” prohibition.

\255144\1 -#229921 vi
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 C. There is no legislative history to support the Department’s

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is “unblemished, unquestionable legislative intent that shows that this statute was

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not meant to affect written communication between a public adjuster and an .
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insured who may have just experienced a loss.” (TT 23). Counsel’s statement
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recommendations in November 2007. But the Legislature itself added to the Task
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the Statute’s prohibitions. Nothing in the record supports the notion that the
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Legislature made its changes to give effect to the Task Force’s intent.

Accordingly, the Department’s interpretation of the Statute is based on a false

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premise, i.e., that actions taken and comments made at the Task Force’s November
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2007 meeting are somehow determinative of the Statute’s true meaning.

D. The Department’s interpretation of the Statute contradicts its

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description of the Task Force’s draft legislative recommendations.

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 that: “A public adjuster shall not directly or indirectly through any other person or

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entity solicit.
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constitutionality, the Task Force changed this language so that the recommended

prohibition would apply only to “face-to-face or telephonic” solicitation.

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However, if the Task Force’s first draft prohibited all solicitation, then surely the
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Legislature’s final product—the Statute—prohibits all contact. Both the Task

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through any other person or entity” exactly the same way. The Department
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contradicts itself by suggesting otherwise.

E. The Department’s interpretation of the Statute leads to absurd

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results.

In its quest to manufacture ambiguity in the Statute, the Department adopts a

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position that should be anathema to the Legislature and to any regulator.

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does not “directly initiate contact” with that claimant. Also according to the

Department, a public adjuster who comes into contact with a claimant while

delivering a door hanger or a brochure does not “directly initiate contact” with that

claimant. Imagine the disruption to the law generally if this Court were to accept

\255144\1 -#229921 vi
20
 the notion that actions like these were not “direct contact” between
a conveyor and
a recipient of information.

The Department’s interpretation of the Statute also is unworkable in practic

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materials would not know whether to answer the homeowner’s questio
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say hello). If a claimant were to call the public adjuster soon after reading
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hand-delivered literature and seek to enter a contract, the public adjuste

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know whether that would be considered an adjuster-initiated or a

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claimant-initiated
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contract. It would be unreasonable for any court to ascribe to the
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intent to adopt such an irrational and unworkable regulatory scheme.
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II. The Statute Violates Plaintiff’s Right to Free Speech.

As will be explained below, the trial court should have assessed the
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constitutionality under the test set out in Central Hudson. Instead,
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without even
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rather than speech.

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Central Hudson, the court deprived Plaintiff of the substantial protect

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\255144 1 -#229921 vi
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 commercial speech. As the Florida Supreme Court concluded after reviewing the
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U.S. Supreme Court’s jurisprudence on solicitation restrictions: “The Supreme
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Court’s cases on professional advertising are unmistakably clear that such form of
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commercial speech is heavily protected.” State v. Bradford, 787 So. 2d 811, 826

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(Fla. 2001).

A. Because the Statute on its face regulates speech, the trial court

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erred by applying the O’Brien standard.
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United States v. O’Brien, 391 U.S. 367 (1968), is a well-known case in

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draft card. The statute challenged in 0 ‘Brieti did not on its face have anything to
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do with speech—it simply prohibited the knowing destruction of a Selective
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Service certificate, a prohibition that applied as much to destruction in private

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(with no intent to convey any message) as to destruction at a public demonstration.

See 0 ‘Brien, 391 U.S. at 375. As the Supreme Court noted, “[a] law prohibiting
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destruction of Selective Service certificates no more abridges free speech on its

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face than a motor vehicle law prohibiting the destruction of drivers’ licenses, or a
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tax law prohibiting the destruction of books and records.” Id. The issue before the
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when a statute facially unrelated to speech has the incidental effect of restricting an
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expressive act (in that case the burning of a draft card in an act of protest at a
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\255144\1 -#229921 vi
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 public rally). The Court settled on the relatively relaxed standard of review that

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the trial court applied here. See O’Brien, 391 U.S. at 376-77.

Incredibly, to persuade the trial court that it should apply the 0 ‘Brien

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standard, the Department cited State v. Conforti, 688 So. 2d 350 (
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See (R4-761). The defendants in C’onforti were erotic dancers who had been

convicted for violating a statute that prohibited “lewdness.” Conforti, 688 So. 2d
.

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at 353. Applying 0 ‘Br/en, the Fourth District concluded that the statute regulated
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conduct, not speech, and rejected the defendants’ constitutional challenge: “The
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sex acts prosecuted here—.., performed rhythmically to music before a paying
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customer in a dark, private room—do not amount to expressive conduct protected

by the First Amendment.” Id. at 355.

There is no comparison between the commercial speech engaged in by a

public adjuster, on the one hand, and burning a draft card or performing sex acts

for pay in a nightclub, on the other. Nor is there any comparison between the
2.

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and Conforti, which on their face had nothing to do with speech. It was clear error
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for the trial court to apply the 0 ‘Br/en standard here.

B. The correct standard for reviewing the Statute is the Central

Hudson standard.

When reviewing the constitutionality of restrictions on commercial speech,

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courts uniformly apply the test set out in Central Hudson Gas &Electric Corp. v.
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2551441 -p229921 vi
23
 Public Service Comm ‘is ofNew York, 447 U.S. 557 (1980). Central Hudson is

applicable here because: the Statute on its face restricts commercial speech; the

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free speech protections afforded by the Florida Constitution are co-extensive with

the First Amendment; and florida courts apply U.S. Supreme Court precedents in

free speech cases. See Department ofEducation v. Lewis, 416 So. 2d 455,461

(Ha. 1982).
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There is no shortage of cases in which courts across the spectrum—

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including this Court—have evaluated commercial solicitation restrictions under the

Central Hudson standard. The U.S. Supreme Court applied Central Hudson both

when it struck down a solicitation restriction aimed at certified public accountants

and when it upheld a solicitation restriction aimed at lawyers. See Edenfield v.

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Fane, 507 U.S. 761 (1993) (CPAs); Florida Bar v. Went-For-It, Inc., 515 U.S. 618 CD

(1995) (lawyers). The florida Supreme Court applied Central Hudson when it

struck down a restriction aimed at persons soliciting accident victims to file

personal injury protection insurance claims. See Bradford, 787 So. 2d at 811. This
00
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Court applied Central Hudson when it struck down a restriction aimed at hearing
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aid specialists. See Beckwith v. Department ofBusiness and Professional

Regulation, 667 So. 2d 450 (Fla. l DCA 1996). And the Pennsylvania Supreme

Court applied the Central Hudson standard when it struck down a 24-hour
0

solicitation ban aimed at public adjusters. See Insurance Adjustment Bureau v.

4255144i -#229921 vi
24
 Insurance Commissioner, 542 A.2d 1317 (Pa. 1988). See also Pruett v. Harris

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County Bail Bond Bd., 499 F.3d 403 (5t11

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Cir. 2007) (striking down bail bondsmen

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solicitation restriction); Pearson v. Edgar, 153 F.3d 397 (7 Cir. 1998) (striking

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down real estate agent solicitation restriction).
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Contrary to an argument the Department made before the trial court, Central

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Hudson would still be the correct legal standard even if the Statute were interpreted
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as allowing written solicitation. Ede,fIeld and Bec1c4’ith both dealt with
0

restrictions that prohibited only in-person or phone solicitation. See EdenJield, 507

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U.S. at 765; Beckwith, 667 So. 2d at 451. The Supreme Court and this Court

nonetheless reviewed those restrictions under Central Hudson.

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Where, as here, the commercial speech being restricted relates to lawful

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activity and is not misleading, Central Hudson requires courts to apply a three-
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prong test. First, the reviewing court must determine “whether the asserted L

governmental interest is substantial.” Thompson v. Western States Medical Center,

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535 U.S. 357, 367 (2002). Second, the court must determine “whether the
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regulation directly advances the governmental interest asserted.” Id. And third,

the court must determine whether the restriction “is not more extensive than

necessary to serve that interest.” Id.

The Department bears the burden of proving that the Statute satisfies all
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three of the Central Hudson criteria: “It is well established that the party seeking
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255144.1 -#229921 vi
25
 to uphold a restriction on commercial speech carries the burden ofjustifying it.”

EdenJield, 507 U.S. at 770 (internal quotes omitted). In this case, only the second

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and third prongs of Central Hudson are at issue, because Plaintiff concedes that the

interests purportedly served by the Statute—”to try to ensure more ethical behavior

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on the part of public adjusters generally” and “to ensure the privacy of people who
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have just suffered a calamity” (TT 324)—are substantial in the abstract.

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not enough to save the Statute, however, because it falls far short of satisfying

Central Hudson s other two prongs.

C. The Department has not carried its burden of proof under

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Central Hudson.

1. The Department failed to prove that public adjuster

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solicitation in Florida causes actual harm.
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had to prove that “the harms it recites are real and that its restriction will in fact

alleviate them to a material degree.” Edenfield, 507 U.S. at 771. The Department
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did not prove that “the harms it recites are real.” In fact, the record affirmatively
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proves the absence of harm from public adjuster solicitation. The Department’s

failure to prove that public adjuster solicitation causes actual harm dooms its

ability to satisfy the Central Hudson test.

Note, however, that the Department is limited to the interests it has identified.
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Under Central Hudson, unlike in rational basis review, the court may not supplant
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the state’s interests with “other suppositions.” Edenfield, 507 U.S. at 768.
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\255144\1 -#229921 vi
26
 H
The joint stipulations in this case, standing alone, are fatal to the

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Department’s case. The Department stipulated that “no testimon

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y or other

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evidence was presented to [the Task Force] demonstrating a statewide

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pattern of

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solicitation abuses by public insurance adjusters.” (R4-758). It furth
er stipulated

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that “very few complaints against public insurance adjusters received a.

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by [the

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Department] over the past five years (less than two percent) even
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mentioned early
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solicitation.” (R4-756).
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But there is even more evidence in the record showing that public adju
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solicitation in Florida does not cause actual harm. In Chapter 2009
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Florida, the Legislature directed OPPAGA to conduct a study of the
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laws
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governing public adjusters. The Legislature identified several
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areas of inquiry,

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including a review of “the effects on consumers of the laws of this

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state relating to
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public adjusters.” Ch. 2009-87,
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§ 15, Laws of Fla. OPPAGA concluded: “The

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number of complaints, investigations, and disciplinary actions

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against public
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adjusters is generally low.” (P1. Ex. 6 at 1, 4).

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The testimony of the Department’s expert witness did nothing to

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help the
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Department prove that public adjuster solicitation in Florida caus

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es actual harm.
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Counsel for the Department twice asked softball questions abou

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soliciting claimants who are in mental or emotional distress. (TT

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272; 297). The

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Department’s expert responded merely that, in that situation, “an

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unscrupulous
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\255144\1 -#229921 vi
27
 public adjuster” or “unethical people” could take advantage of the claimant But as

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this Court has held, “the First Amendment right to commercial speech may not be
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so significantly limited on mere speculation that [unethical] behavior might
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possibly occur.” Beclcwith, 667 So. 2d at 45 1-52 (emphasis in original). Indeed, if

testimony like this were enough to justify a speech restriction, the First
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Amendment would offer commercial speech little protection at all.

Moreover, as the Second Circuit Court of Appeals noted in a commercial

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speech restriction case, “[i]n evaluating this record, we cannot ignore what it does

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not contain.” New York State Ass ‘n ofReahors, Inc. v. Shaffer, 27 F.3d 834, 843
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(2d Cir. 1994). The Department’s expert offered no testimony about specific

examples of solicitation misconduct by public adjusters in Florida. Nor did he

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testify even in general terms about public adjuster solicitation in Florida. Nor did
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he testify about how Florida consumers perceive public adjusters. And the

Department itself offered no evidence of prosecutions or investigations involving

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solicitation-related misconduct by public adjusters.

The Department did offer depositions relating to three instances that, by

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Plaintiff’s stipulation, involved solicitation misconduct by public adjusters. (R4-

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758). This meager evidence does not come close to overcoming the Department’s
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stipulations and the OPPAGA report. In light of the growing numbers ofpublic
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adjusters, the extensive regulations to which they are subject, and the effort that the
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U55I44I -#22992! vi
28
 Task Force and OPPAGA put into studying the business of public adjusting in

Florida, it speaks volumes that the Department produced only these three instances

of misconduct.

This Court and the Supreme Court have not hesitated to strike down

commercial speech restrictions where the state failed to prove that the restrictions
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at issue responded to actual harm. In Beckwith, this Court invalidated a restriction
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on solicitation by hearing aid specialists, holding that the state’s mere “speculation
-I.

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as to possibilities” could not satisfy Central Hudson ‘s second prong. Beckwith,

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667 So. 2d at 452. Similarly, the Supreme Court in Edenfield struck down a

restriction on solicitation by CPAs, finding that the state had offered neither studies
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nor anecdotal evidence showing that the restriction addressed a real problem. See
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Edenfield, 507 U.S. at 771. See also Pruett v. Harris County Bail Bond Board, 499
(5t1
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F. 3d 403 Cir. 2007) (strking down prohibition on solicitation by bail

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bondsmen within 24 hours after arrest).

.

Consistency with these precedents

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demands that this Court declare the Statute an unconstitutional restriction on

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Plaintiff’s free speech.

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Because the Department has failed to prove that the Statute remedies actual
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harm, its strained efforts to limit the Statute’s reach are pointless. Under either
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side’s interpretation, the Statute at a minimum prohibits face-to-face or telephonic

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solicitation, but without any justification. As the 1 1

th
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Circuit Court of Appeals has

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\255[44\l -#229921 vi
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29
 held, “Even partial restrictions on commercial speech must be supported by a

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showing of actual hanm” Mason v. The Florida Bar, 208 F.3d 952, 958 (11th Cir.
(ID

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2000).

2. The Department failed to prove that the Statute is narrowly

U
tailored to meet the state’s objectives.

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The Department also failed to meets its burden under Central Hudson ‘s third
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prong. The Department was required to prove that the Statute’s commercial

speech restriction is “narrowly tailored to achieve the desired objective.” Board of

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Trustees of State University of New York v. Fox, 492 U.S. 469, 480 (1989). The
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Department had to show that the scope of the Statute’s restrictions is “in proportion
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to the interest served.” Id. -

The first reason the Statute fails Central Hudson ‘s narrow tailoring
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requirement is that there are other, less restrictive means to achieve the state’s
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ends. See Rubin v. Coors Brewing Co., 514 U.S. 476, 491 (1995) (availability of
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less restrictive alternatives shows statute is not narrowly tailored). The

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Department’s counsel stated at trial that, “[A] public adjuster that pops up on the
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scene and just nags and nags and nags the person until they sign a contract in
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exasperation, that’s not ethical and that’s not proper. And that’s what this statute is
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designed to prevent. We’re not trying to regulate ethical public adjusters.” (TT
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25-26).
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\255144\1 -#229921 vi
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30
 Actually, the Statute is not so limited. Even under the Department’s

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construction, the Statute prohibits all public adjuster-initiated in-person solicitation
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during the blackout period—it is not targeted at harassment or at vexatious
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conduct. The Department can fully address such harmful conduct simply by

enforcing the existing laws and administrative code of ethics that regulate public
.
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adjusters, including the restriction on soliciting claimants who are in emotional
.
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distress and the statutory requirement giving claimants a grace period within which
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they can cancel their contract with a public adjuster without any liability. (R4-

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757). Similarly, the state’s interest in protecting claimants’ privacy is enhanced by

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enforcing the statutory prohibition on soliciting claimants between the hours of

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8:00 p.m. and 8:00 a.m. and on Sundays. See § 626.854(5), Fla. Stat. As the

Department stipulated, “DFS has statutory authority to deal with unethical or

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fraudulent behavior by public adjusters.” (R4-758).
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The second reason the Statute fails the narrow tailoring requirement is that
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its restrictions are disproportionately onerous in relation to the ends served. To

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meet Central Hudson ‘s third prong, the Department had to prove that the state has
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“carefully calculated” the cost of a restriction on commercial speech. Fox, 492

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U.S. at 480. Even assuming for the argument that the Statute permits written
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solicitation during the first 48 hours after a claim-inducing event, the Department
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offered no evidence that the state had considered the effectiveness of written
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\255I441 -#229921 vi
31
 a.
acommunication in the public adjuster/claimant context. Indeed, Terry Butler,
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counsel to the Task Force, testified that he had not considered it. (TT 253).

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Moreover, in exchange for preventing purely hypothetical harms, the Statute

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deprives consumers of access to information from the public adjuster at the time

the consumer needs it the most. As Mr. Altieri’s testimony demonstrated, in the

immediate aftermath of a claim-inducing event, an uninformed policyholder can

take actions (e.g., by failing to preserve or locate evidence or by unnecessarily

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spending on mitigation efforts) that can significantly affect his ultimate recovery.

And it is quite conceivable that in many instances the policyholder will be unable
a.

a.

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to reverse these bad decisions after the initial 48-hour period. (TT 96-97).
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The Statute also deprives public adjusters of the most effective means of C
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communicating with potential clients and seeking business. The Department did
a
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not rebut Plaintiff’s and Altieri’s testimony that, after 48 hours, claimants are
a.

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frequently gone from their property and difficult to locate. (TT 108; 184-85). Nor a
a
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00
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did the Department rebut their testimony that face-to-face interaction is the most
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effective form of communication between a public adjuster and a policyholder.

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(TT 90). As the Fifth Circuit Court of Appeals has held, a restriction “which
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prevents speech when it is the most valuable for the speaker and the potential
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customer should be viewed with some skepticism.” Pruett, 499 F.3d at 415.

\255144\1 -t229921 vi
32
 Finally, the under-inclusiveness of the state’s approach to commercial

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solicitation in the first 48 hours after a claim-inducing event shows that there is not
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a reasonable fit between the Statute and the harms it purports to address. This
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point is illustrated by the holding in Pearson v. Edgar, 153 F.3d 397 (7 Cir.
00

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1998). That case involved a First Amendment challenge to a statute that gave
-a

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homeowners a legally enforceable option to block solicitation by real estate agents,

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but did not offer homeowners the same option to decline other types of commercial

solicitation. The State of Illinois justified the statute on the ground that it furthered

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residential privacy. The record in that case, however, showed no evidence of a

particularized harm to residential privacy caused by real estate agent solicitation.

H

The court held that, “[ajbsent such evidence, a mechanism whereby homeowners
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can reject real estate solicitation but not other kinds of solicitation cannot be said to

advance the interest in residential privacy ‘in a direct and material way.” Id. at
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404. In other words, the court determined, “the underinclusive nature of the statute
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indicates unreasonable fit.” Id. The court struck down the statute, concluding that
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it could not “place the interest in residential privacy above the interest in logical
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distinctions in speech restrictions absent some showing that the restriction

reasonably fits the justification.” Id. at 404.

Just so here. In the immediate afteriTlath of a claim-inducing event,

policyholders are solicited by myriad service providers—roofers, contractors,

‘255144\1 -#229921 vi
33
 mitigation experts, cleaning companies, etc. Yet, even in the absence of any

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evidence of wrongdoing, the Statute singles out public adjusters for a 48-hour

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solicitation ban. The arbitrariness of the Legislature’s distinction shows that the

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goal and the Statute’s discriminatory restrictions on public adjusters’ ability to

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communicate with policyholders.

3. This Court should follow the Pennsylvania Supreme

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solicitation ban.

The Pennsylvania Supreme Court’s decision in Insurance Adjustment

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Bureau should be highly persuasive here. Applying Central Hudson, the court in

that case struck down a law prohibiting public adjusters from soliciting business

for 24 hours after a claim-inducing event. See Insurance Adjustment Bureau, 542

A.2d at 1324. The court noted that there was no evidence of pervasive misconduct
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by public adjusters and that, in light of the state’s “arsenal of [administrative]

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remedies.. imposition of prior restraints on the speech of public adjusters and

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public adjuster solicitors is unjustifed.” Id. at 1323. The court rejected the

argument that the 24-hour ban was merely a reasonable time, place, and manner
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restriction, noting that “the period of time immediately following the disaster may
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be the only time during which the property owner can be located before moving to
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‘255144\1 -#229921 vi
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 an unknown address because of the disaster which has affected his property.” Id.

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If anything, Florida’s public adjuster solicitation restriction is even more

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is twice as long as the one struck down by the Pennsylvania Supreme Court.
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evidence that public adjuster speech is generally false or deceptive. See id. at 219
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n. 5. But there is no indication in the opinion that the record there included
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evidence affirmatively showing that there was no generalized misconduct by public

adjusters in the aftermath of a claim-inducing event. This case presents more than
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in the case actually disproves the notion that there is an actual harm that would be
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remedied by the Statute’s speech restrictions.

Second, the Pennsylvania law restricted only “solicititation.” By contrast,

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in-person or telephonic contact—cuts off a far broader flow of information from

the adjuster to the consumer. This is especially problematic in a context where, as

the record in this case shows, the consumer is likely to be uncertain of his rights
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and duties vis-à-vis his insurance carrier and might unwittingly take actions that
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harm his own interests.

\255144\1 -#229921 vi
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Third, the Pennsylvania opinion makes no mention of that state having in

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place something like Florida’s prohibition (unchallenged here) on public adjuster

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solicitation between 8:00 p.m. and 8:00 a.m. and on Sundays. This distinction
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shows that, in Florida, there are even more alternatives already available to further
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4. The “lawyer cases” are inapposite.

In Ohralik v. Ohio State Bar Association, 436 U.S. 447 (1978), the Supreme

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Court held that the state “may discipline a lawyer for soliciting clients in person,
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for pecuniary gain, under circumstances likely to pose dangers that the state has a
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right to prevent.” fd. at 449. Later, in Florida Bar v. Went-for-It, 515 U.S. 618

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(1995), the Supreme Court upheld a Florida Bar rule that “prohibit[ed] personal
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injury lawyers from sending targeted direct-mail solicitations to victims and their

relatives for 30 days following an accident or disaster.” [d. at 620. The Florida
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Supreme Court in State v. Bradford, 787 So. 2d 811 (Fla. 2001), noted that Ohralik

and Went-for-It stand out as the only cases in which the U.S. Supreme Court has

upheld restrictions on the advertising of professional services. See id. at 826-27.

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Department’s defense of the Statute—indeed, the lawyer cases only highlight the
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deficiencies in the Department’s position.

\255144\1 -#229921 vi
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 -A.
There are important distinctions between the record in Ohralik and the

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record here. First, the in-person solicitation restriction for lawyers dated back to

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1908 and had been re-adopted by the American Bar Association in 1969 afier a
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four-year study of the Association’s rules. See Ohraiik, 436 U.S. at 454 n.h. The
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inconsistent with the standards of the legal profession. There is no remotely

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solicitation by lawyers was heightened by the fact that a lawyer is a “professional

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trained in the art of persuasion.” Id. at 465. In Edenjield, the Court invoked this
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(who lacked training in persuasion and were therefore less able to unduly influence

potential clients). See Edenfleid, 507 U.S. at 775. Public adjusters are equally
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dissimilar from lawyers.

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their rights. Ohralik, 436 U.S. at 458. By contrast, the Statute—properly

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interpreted—prohibits all public adjuster-initiated contact with a claimant in the

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first 48 hours, a restriction that does not allow the public adjuster to convey any

information to the claimant. For example, it would violate the Statute’s “initiate
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\255144\1 -#229921 vi
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 contact” prohibition to have a conversation with a claimant in which the public
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pointers about how best to protect his rights under his insurance policy.

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that “Ohralik in no way relieves the State of the obligation to demonstrate that it is

regulating speech in order to address what is in fact a serious problem and that the

preventative measure it proposes will contribute in a material way to solving that

problem.” Edenfield, 507 U.S. at 776. In Ohralik, the Court determined that in the
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particular circumstances presented in that case, it was “not unreasonable for the

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injurious to the person solicited.” Ohralik, 436 U.S. at 466 (emphasis added).
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adjusters is “more often than not injurious” to claimants. The Department has
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The Department has further stipulated that the Task Force heard no evidence

suggesting that there is a statewide problem in Florida of solicitation misconduct

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by public adjusters. And these stipulations are reinforced by the OPPAGA report,
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which found that the incidence of complaints, regulatory actions, and allegations of
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\255144\J -#229921 vi
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 Went-for-It is inapposite for similar reasons. The Court in that case noted

that “[t]he purpose of the 30-day targeted direct-mail ban is to forestall the outrage

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and irritation with the state-licensed legal profession that the practice of direct
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solicitation only days after accidents had engendered.” Went-for-It, 515 U.S. at

631. To prove that the direct mail ban was addressing a real harm, the Florida Bar
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people; 27% of those surveyed reported that receipt of direct mail from lawyers
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lowered their regard for the profession. Id.

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case. Indeed, this case is the opposite of Went-for-It, because the study of public
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adjusters in Florida affirmatively indicates the absence of harm. Moreover, far

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from proving that public adjusters have damaged their profession’s reputation, the
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insured public doesn’t know about public adjusters.” (TT 191).

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ways that the restrictions on attorney solicitation are not. In the context of a

255144\l -#229921 vi
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 several-year-long statute of limitations period, not being contacted by a lawyer for

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hours after a claim-inducing event are critical. For the reasons already explained,

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without guidance from a public adjuster, the claimant can harm his or her interests

in ways that cannot be reversed after the 48-hour ban is over.

Relatedly, the Court in Went-for-It upheld the direct-mail restriction in part

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because there were ample alternative means for injured persons to find out about
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survey information suggesting that Floridians have little difficulty finding a lawyer
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when they need one.” Went-for-It, 515 U.s at 634. Here, there was no evidence
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that any type of solicitation other than face-to-face interaction is an effective way
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for claimants to learn about the services of a public adjuster. Indeed, as mentioned

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earlier, Plaintiff testified that “the vast majority of the insured public doesn’t know
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about public adjusters.” (TT 191).

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does not impose on similarly situated actors. In the aftermath of a claim-producing

event, a policyholder is likely to be contacted by the insurance company adjuster,

contractors, mitigation experts, cleaning companies, etc. None of these entities is

subject to any speech restriction. Yet solicitation by each of them has the same

\255144\1 -#229921 vi
40
 effect on policyholders’ privacy as solicitation by public adjusters, and each of

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them can obtain binding contractual agreements from the policyholder. Many of

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these contractors are unlicensed and can take actions that will significantly affect

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negotiating with claimants who are in emotional distress. Florida law gives
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adjuster contract, a right that does not attach to the other contracts the policyholder
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might enter. And of all the entities providing goods or services to the policyholder,

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only the public adjuster owes the policyholder a fiduciary duty. By contrast, as the
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policyholder is “entering into a new relationship with their insurance carrier, which
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is an adversarial relationship and a negotiation.” (TT 258).

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then it must also conclude that the Statute violates Plaintiffs right to equal
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protection of the laws. “When considering a statute that abridges a fundamental

right, courts are required to apply the strict scrutiny standard to determine whether

the statute denies equal protection.” Level 3 Communications, LLC v. Jacobs, 841
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\255144\I -#229921 vl
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 So. 2d 447, 454 (Fla. 2003). “To withstand strict scrutiny, a law must be necessary

to promote a compelling government interest and must be narrowly tailored to

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advance that interest.” Westerheide v. State, 831 So. 2d 93, 110 (Fla. 2002). There

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can be no dispute that the Statute’s discriminatory speech restriction on public

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adjusters neither serves a compelling interest nor is narrowly tailored.
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But even if this Court were to review the Statute under the more permissive

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rational basis standard, the Statute still violates public adjusters’ right to equal
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protection. The rational basis test demands that a statute’s classifications be both
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“non-arbitrary and rationally related to a legitimate state purpose.” Jacques v.

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Department ofBusiness and Frofrssionai Regulation, 15 So. 3d 793, 797 (Fla. 1

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DCA 2009). The Statute satisfies neither of these criteria. For the reasons
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explained above, the Statute’s discriminatory treatment is patently arbitrary—in

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the absence of any evidence that public adjusters’ solicitation practices harm
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consumers, the Statute restricts the speech of the one service provider that owes
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policyholders a fiduciary duty and is subject to a host of consumer-oriented

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regulations.
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Nor does the Statute’s classification serve any legitimate purpose. The

Statute is so nonsensical that it cries out for an explanation. The only purpose
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obviously served by the Statute is protectionism. As the OPPAGA report noted,

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“insurance company representatives suggested that [a 48-hour restriction] is

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 inadequate for insurance companies to prepare and offer policyholders a

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settlement.” (P1. Ex. 6 at 5). Insurance companies have every incentive to prevent

policyholders from hiring a public adjuster, since the evidence shows that

policyholders with public adjuster representation typically receive substantially

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higher settlements than those without public adjusters. See Id. at 7. Protecting a

special interest (insurance companies) by shielding them from the services of a

public adjuster is not a legitimate state purpose. See, e.g., Craigmiles v. Giles, 312
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F.3d 220, 224 Cir. 2002).

The trial court’s reasons for sustaining the Statute’s discriminatory

classifications are unpersuasive. Comparing the public adjuster to the insurance

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company adjuster, the court noted that the latter is already in a contractual
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relationship with the insured. That is true, but as the Department’s expert testified,
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the relationship between the policyholder and the insurance company after a claim-

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inducing event is adversarial. Thus, the existence of a contract between the

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policyholder and the insurance company hardly justifies giving the company
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adjuster more preferable speech rights.

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The trial court’s attempt to distinguish tradespeople from public adjusters is

even weaker. The court found that, unlike a public adjuster, a contractor is not a
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co-payee on the insured’s settlement check. But that consideration (assuming the
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court’s finding is correct) is irrelevant—the policyholder’s obligation to pay a

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 contractor is equally binding, and, in contrast to public adjusters, contractors’ fees

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are not capped by law. The court’s other distinction between public adjusters and

contractors—that a public adjuster is a fiduciary to the insured—actually argues

against singling out public adjusters for discriminatory treatment.

IV. The Statute Violates Plaintiff’s Right to be Rewarded for Industry.

The Statute violates the Florida Constitution’s guarantee of the Plaintiff’s

“inalienable right” “to be rewarded for industry.” Art. I, § 2, Fla. Const.

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Government action that limits this right must bear a rational relationship to a

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legitimate state objective. See Fraternal Order ofPolice v. Department ofState,

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392 So. 2d l296, 1301-02 (Fla. 1980). For the reasons already explained, the
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Statute is arbitrary and irrational and does not serve a legitimate state objective.

Indeed, to muzzle public adjusters at the very time their speech is most critical to

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policyholders absolutely hobbles the profession.

\255144\1 -#229921 vi
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 CONCLUSION

For all of the foregoing reasons, Plaintiff respectfully requests that this Court

reverse the trial court’s final judgment and order the entry ofjudgment in favor of

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Plaintiff.

Resectfully submitted,

Carlos G. Muñiz

\255144\l -#229921 vi
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 CERTIFICATE OF SERVICE

I certify that a copy of the foregoing was furnished by U.S. Mail on July 19,
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2010, to the following:
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Michael H. Davidson 0
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Department of Financial Services

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200 East Gaines Street
612 Larson Building
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Tallahassee, Florida 32399

Telephone (850) 413-4178
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EMail:
Michael .davidsonmyflori dacfo.com

,1 Ji
Gerge M&os, Jr. /
Florida Iar No. 263321
Carlos G. Mufliz
Florida Bar No. 535001
GrayRobinson, PA
301 South Bronough Street
Suite 600 (32301)
Post Office Box 11189
Tallahassee, FL 32302
Telephone (850) 577-9090
Facsimile (850) 577-33 11

Attorneys for Appellant,

-.4-

Frederick W Kortum

\255144\1 -#229921 vi
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 CERTIFICATE OF COMPLIANCE WITH FONT REQUIREMENT
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I certify that the font used in this brief is Times New Roman 14 point and in
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compliance with Rule 9.210, Florida Rules of Appellate Procedure.

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AZ ‘4/
Gerge N.iMeros, Ji
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Florida Bar No. 263321
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Carlos G. Mufliz
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Florida Bar No. 535001

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