What tactics do banks use to stall their foreclosure actions?

I haven�t talked to a single person (other than my banker) who doesn�t want to either (a) make banks pay more back assessments to community associations in which they hold mortgages or (b) make banks expedite their foreclosure actions.

We are obviously at cross purposes with most banks who have absolutely no incentive whatsoever to take back title to these properties. What happens when the bank takes back title especially to a property that has no equity?

1. The bank must first pay the statutorily required back assessments (6 months in a condominium association and 12 months in a homeowners� association);

2. The bank must start paying regular and special assessments on that property like every other owner in the community; and

3. The bank must incur additional liability as a property owner to maintain, insure and repair that property and market it for sale.

What happens when the bank delays taking title back to the property?

1. The rest of the owners in the community continue to maintain the value of the bank�s collateral by paying to maintain and insure the overall community (fixing the roof, maintaining the landscaping, etc.); and

2. The property is waiting for them to take back when the market rebounds.

The question then is how are banks managing to stall their foreclosure actions? Some are using the judicial process cleverly by filing ex parte motions. An ex parte motion asks for a court order before the other party (the association) has an opportunity to be heard on the request. An ex parte motion in a child custody hearing where a parent could flee the jurisdiction is one thing but an ex parte motion to set aside the bank�s Final Judgment because there is no equity in the unit??

What other tactics are lenders� counsel employing lately? They are moving to vacate the certificate of title, moving to vacate final judgments (discussed above), moving multiple times to reschedule the foreclosure sales or simply not showing up to scheduled sales or canceling the sale date unilaterally by putting these options into their Final Judgments. Of course, there are defenses to these tactics that the association can raise but most don�t have the money or energy to fight the banks.

Interestingly, lender�s counsel usually must convince the Court that no defendant will be prejudiced by the granting of the ex parte motion being requested. An association not hurt after years of waiting for the bank to foreclose and to have a new owner start paying its fair share of assessments only to be delayed once again by legal maneuvering? It�s hard to believe any trier of fact would easily buy that argument.

Posted by
Donna D. Berger, Esq.
7:53 AM on November 24, 2009

October 31, 2009 - For some Galt Mile Community Association members, this information may represent an opportunity to bring closure to a painful, abusive and unrequited process endured several years ago on the heels of Florida�s devastating serial hurricanes. For others, it might offer a last pull at their property insurance slot machine. Notwithstanding the motive, it could seriously enhance the association�s fiscal viability.

Following the serial hurricanes of 2004 and 2005, many Galt Mile associations entered into a long slow waltz with their property insurance carriers. Dozens of damage claims were submitted since the summer of 2004, when the State was suddenly subjected to insurance industry convulsions that trebled windstorm rates overnight. Over the next few years, associations detailed their claims progress at monthly GMCA Presidents Council meetings, a strategy implemented to share tactics useful for expediting benefits.

Some fortunate associations never sustained enough damage to reach their deductible limit while those that barely exceeded their deductibles filed relatively modest claims. Others were heavily victimized by the storms, with damage in the $millions. In 2004 and 2005, the insurance industry issued an ultimatum to Tallahassee, threatening to leave the State unless approved for virtually unlimited rate increases. When state regulators balked, almost every admitted windstorm carrier hit the road, abandoning the Florida property and casualty market.

By the end of 2005, Australian carrier QBE was the only admitted alternative to Citizens Property Insurance Corporation, Florida�s taxpayer-supported carrier of last resort. When QBE constricted their eligibility requirements, their only Galt Mile client qualified to renew was Regency Tower, having installed impact rated windows and doors throughout. Insurance carriers pay most legitimate claims expeditiously to maintain good will � ordinarily a competitive necessity. As the only game in town, QBE had nothing to lose by continuously delaying claims via incessant requests for irrelevant documentation, purposely valuing damage loss below the hurricane deductible or denying legitimate claims due to eligibility exemptions not listed in the policy.

Firmly ensconced in the catbird seat, QBE began requiring evidentiary documentation far in excess of that ordinarily submitted. They also summarily rejected marginally defective claims, such as those with minor �typos�. When the rebuffed claims were meticulously prepared anew by professionals and resubmitted, QBE rejected them out of hand, arbitrarily shifting eligibility standards. On March 13, 2006, the Florida Department of Financial Services (DFS) organized a condominium mediation program which provided a forum to discuss outstanding claims directly with a representative of the Association�s insurance carrier. A mediator detailed exactly what the client had to provide in order to receive their benefit. Although associations fully complied with the mediator�s requisites, QBE continued to disallow claims with impunity.

BUCKLEY TOWERS WINS $20 MILLION

Ultimately, frustrated associations settled for a fraction of their damage costs. Others unconditionally capitulated upon learning that carriers had been dodging payment without consequence for years. A few doggedly persistent associations such as Coral Ridge Towers East, Southpoint and Galt Ocean Club, which played claims ping-pong with the company from 2004 to 2007 with little progress, finally negotiated settlements.

Last week, Managing Partner Donna Berger of Katzman Garfinkel Rosenbaum (KGR), who also serves as the Executive Director of the Community Advocacy Network (CAN), wrote an article offering forsaken associations a second (or third) bite at the apple. According to Berger, even damages sustained in 2004 are still recoverable. Last February, KGR partner Daniel Rosenbaum won a $20 million verdict against QBE for Buckley Towers, a 40-year old Miami-Dade condominium facing county condemnation for structural deficiencies caused by Hurricane Wilma. In September of 2007, the Chalfonte Condo Apartment Association of Boca Raton was similarly awarded $8.14 million. Located a few blocks south of the Galt Mile, Vantage View also won a $1.5 million jury verdict for hurricane-related damages.

The article is as follows: [editor]

Association Financial Problems:

Pursuing Unresolved Casualty Claims May Be the Solution

By: Donna D. Berger, Esq.

DONNA BERGER ESQ

If your community is struggling today to meet its financial obligations in light of a growing number of delinquencies, it might be time to revisit the issue of any storm damage that may have impacted you several years ago. Many associations do not readily see the connection between storm damage that hurt them several years ago and their current economic woes but that connection may be closer than you think.

The following hurricanes battered the State of Florida:

1. Charlie - August 13, 2004;

2. Frances - September 4, 2004;

3. Ivan - September 16, 2004;

4. Jeanne - September 26, 2004;

5. Katrina - August 24, 2005; and

6. Wilma - October 25, 2005

Many boards submitted claims for storm damage and were told that their claims did not reach their deductible level. Others received some money from their carriers but not nearly enough to pay for repairs and were forced to specially assess their members for those costs that weren�t covered. Incredibly, a few associations never even made claims because they either felt they did not meet the deductible or they feared having their coverage canceled or their rates raised. Quite simply, a board of directors cannot accurately assess the amount of damage that a community may have suffered without a thorough inspection by properly trained experts.

For far too many communities, the storms that ravaged Florida in 2004 and 2005 created a hole from which they never dug out. The special assessments that their members were forced to pay for damage that should have been covered by their insurance carriers made them less able to bear the current real estate market conditions.

However, all is not lost for those communities who understand the insurance process and take the time to pursue their rights. Typically you have five (5) years to make a claim with your insurance company after a casualty loss so even the oldest storm claim listed above is STILL RIPE unless your claim was cut short by a FIGA deadline, an appraisal award or a release agreement you signed which specifically used the word �release�.

In order to understand whether or not your association walked away from insurance proceeds that were rightfully owed to you, it is important to understand how most insurance companies operate. It does not benefit the insurance company�s bottom line to make you whole for any claim you may submit so they are hoping you will accept less money than you deserve or they are hoping that you will simply forget that you still have rights to assert a substantial claim for money that you may be owed. It is even better for them if you do not submit a claim at all. The way insurers achieve these goals is to perpetuate the following myths:

1. CHALFONTE IN BOCA RATON AWARDED $8.14 MILLION

   If you file a claim you will be dropped. This is false. It is illegal under Florida law for insurance companies to drop policyholders for filing claims. Specifically, Section 627.4133(3) provides: �Claims on property insurance policies that are a result of an act of God may not be used as a cause for cancellation or nonrenewal, unless the insurer can demonstrate, by claims frequency or otherwise, that the insured has failed to take action reasonably necessary as requested by the insurer to prevent recurrence of damage to the insured property.�

   The reality is that if you do not file a claim and the neighboring property owner files a dozen, you both have the same chance of being dropped if your insurance company decides to reduce its exposure in the State. The neighboring property owner, however, at least had the benefit of filing a claim;

2. If you file a claim your insurance rates will go up. Again, this is the same issue as #1. Insurance companies must submit rate increases to the State for approval. Whether or not you make a claim will not impact the carrier's business decision to move forward with a proposed rate increase;

3. Your damage did not come close to exceeding your deductible. This is a common tactic to ensure that policyholders simply give up and pay for insured damage out of their own pockets. Damage visible to the naked eye does not tell the whole story of damage which your personal and real property may have suffered. Trained experts can properly advise you on the full extent of the damage inflicted including structural damage, mold, loss of power, relocation expenses, cleanup and dumpster costs, etc. If your community endured a special assessment to pay for storm damage you may have been on the receiving end of the deductible excuse; and

4. LOCALLY - VANTAGE VIEW GETS $1.5 MILLION

   If you already received a check from your insurance company it is too late to revisit your claim. Unless you signed a release, receiving funds alone does not prevent you from pursuing your carrier for the full extent of damage you suffered.

Unfortunately, a volunteer board of directors is a particularly easy target for the scare tactics outlined above. Many boards simply do not know their rights with regard to casualty claims or are bullied into accepting less than the community, which is ultimately the individual members, deserves.

The statutory deadlines for most of these storm events are nearing. Boards, particularly new ones who were not seated at the time any damage was incurred, would be well advised to have their property inspected as soon as possible in order to provide themselves with the reassurance that they were paid in full by their carrier or to arm themselves with the ammunition needed to recover any amounts still owed.

If you were lucky enough not to suffer any storm damage over the last four tumultuous storm seasons, please keep in mind that every board member bears a fiduciary duty to the membership and that duty includes the proper handling of insurance claims.

While Donna Berger is well respected by Galt Mile Community Association members � having participated in many local and statewide actions favorable to condominiums and cooperatives � pursuing a dated insurance claim can be performed by many competent association attorneys. The next time you contact your attorney about the resident that breeds and sells plague rats, ask about reviving any rejected claims. Given the recent court victories against carriers for capricious claims management, the resulting new precedents have substantially improved the legal landscape. When Rosenbaum found the key to QBE�s courthouse roller skates, he unlocked a door that any victimized association can now open. If the Finance Committee expresses concern about legal expenditures, arranging commission-based compensation will fiscally insulate the association and motivate the lawyer. Good luck! � [editor]

October 16, 2009 - The 2009 legislative session unveiled a bill containing a plethora of insurance provisions filed to undo unworkable laws enacted in earlier sessions. Those laws, such as a requirement for condo owners to purchase nonexistent insurance products (special assessment coverage???) or the one that vests associations with the dubious right to force place individual condo insurance policies (HO-6) are unfortunately still on the books.

It didn�t matter that Senate Bill 714 - AKA the �Association Glitch Bill� - was resoundingly applauded in both the Statehouse and Senate. Neither did the blizzard of support for the bill demonstrated by hundreds of thousands of association members from across the state. In the end, all that mattered were the potential threats it posed to Charlie Crist�s Senatorial campaign stats.

The bill contained a provision that postponed a $multi-million sprinkler retrofit for condo associations until 2025. A law passed in 2002 mandated that associations be fully retrofitted with a building-wide sprinkler system. Due to a state-wide outcry, lawmakers enacted an �opt-out� provision in 2003 (Senate Bill 592), allowing associations to instead install a scaled down �Minimum Alternative Life Safety System� that limited the sprinkler installations to association common areas and the entrance foyer of each unit.

REPRESENTATIVE CARL DOMINO

In 2006, House Bill 391 by Representative Carl Domino extended the deadline to retrofit high rise projects with sprinklers from the currently mandated 2014 to 2025. The extra decade would afford unit owners an opportunity to recover from the 2004 and 2005 hurricane repair assessments, mega-deductibles and huge windstorm insurance increases that often required long and/or short term financing. Unit owners in these leveraged associations sought to first amortize their bloated debt service before paying another sizable assessment.

FORMER GOVERNOR JEB BUSH VETOES HB 391

After successfully surviving comprehensive committee reviews in both legislative bodies, HB 391 was passed out of the House by a vote of 113 Yeas vs. 0 Nays and was passed out of the Senate by a vote of 40 Yeas vs. 0 Nays. Retrofit lobbyists failed to convince lawmakers that investing scarce association resources in limited sprinklers would yield a more productive safety benefit than a comparable investment in hurricane protection. Despite its unanimous support and passage, lame duck Governor Jeb Bush angered condo owners by vetoing the bill, blaming the absence of any official study examining how retrofit costs will impact condominium owners.

ELLYN BOGDANOFF FILES HB 419

Several years passed before Statehouse Representative Ellyn Bogdanoff filed House Bill 419, a bill addressing a wide range of association issues including back-up generators for elevators, board elections, fire sprinklers, fire alarm systems and Timeshare Condominiums. It sought to correct inequitable insurance provisions, such as the right of an association to force every unit owner to purchase HO-6 insurance (condominium unit insurance) and name the association as a beneficiary. The bill contained the long anticipated postponement of the multi $million fire sprinkler retrofit - similar to the bill vetoed in 2006. Like the earlier legislation, it delayed an onerous mandated condominium assessment from 2014 to 2025.

SENATOR DENNIS L. JONES

Seeking a comparable vehicle in the Senate, Bogdanoff asked Senator Dennis L. Jones to add her bill�s language to his Senate Bill 714, allowing it to be successfully vetted in both houses. Her HB 419 was ultimately folded into Jones�s SB 714 and whizzed through the Florida Statehouse and Senate virtually unchallenged. Legislative pundits in Tallahassee predicted that Crist would sign the critically important bill.

CHUCK AKERS - EXECUTIVE DIRECTOR - FFMIA & AFSA

Discounting authoritative surveys and studies substantiating that thousands of associations crippled by foreclosures were fighting for solvency, Crist opted to play the odds. The Governor�s advisors surmised that by the time the retrofits decimated condo budgets in 2013 and 2014, he would be long gone from Tallahassee, hopefully ensconced in Washington D.C. Of greater immediacy was a prospective campaign endorsement by the Fire Marshals and Inspectors union. He also wasn�t averse to tapping the bottom line generosity of the deep pocketed Fire Sprinkler Associations.

FFMIA's & NFSA's BUDDY DEWAR

Although he lobbied Governor Crist as Executive Director of the Florida Fire Marshals and Inspectors Association (FFMIA), Chuck Akers is also the Executive Director of the American Fire Sprinkler Association, an industry trade group responsible for boosting sprinkler sales. Key Fire Marshals Association officials are also employed by the National Fire Sprinkler Association, another sprinkler trade organization behind the original legislation. FFMIA Past President and lifetime member Steven Randall was also the South Central Regional Manager of the National Fire Sprinkler Association (AKA Florida Fire Sprinkler Association) until he retired on July 16, 2009. As for FFMIA lifetime member Buddy Dewar, in addition to pulling a salary as the National Fire Sprinkler Association�s Director of Regional Operations, he�s employed as the Florida Fire Sprinkler Association�s Lobbyist and Legislative Liaison. In a marginally literate final legislative company report, he wrote �The key House sponsor Ellyn Bogdanoff, Ft. Lauderdale, could care less about the safety of her constituents,� whom he maliciously characterized as �rich condo owners in Galt Ocean Mile who wish not to spend one penny on fire safety.� If you want to read it for yourself, Click Here (page 2). Despite Dewer�s antipathy for the Galt Mile and vilification of our Statehouse Representative, the 24,000-member Florida Professional Firefighters Association repudiated his pejorative conjecture, endorsing Bogdanoff�s candidacy for Jeff Atwater�s open District 25 Senate seat on October 20^th.)

GOVERNOR CRIST ANNOUNCES SB 714 VETO

A student of history, Crist took a page from former Governor Jeb Bush�s playbook. He vetoed the bill and ordered the Department of Business and Professional Regulations (DBPR) to study a retrofit�s cost impact on condos and coops. Hoping that the study would help justify his controversial veto, the Governor�s veto message also directed the DBPR�s Division of Florida Condominiums, Timeshares, and Mobile Homes (Division) to research any insurance cost reductions that he presumed were associated with these installations.

DBPR SECRETARY CHUCK DRAGO

On September 28, 2009, DBPR Secretary Chuck Drago notified Governor Crist that his Department wrapped up their study. DBPR invited input from Florida�s fire service industry, condominium community advocacy organizations, the Office of the State Fire Marshal, the Office of Insurance Regulation, Citizens Property Insurance Company, fire sprinkler installers and representatives of insurance companies. Two participating association advocacy groups were the Community Advocacy Network (CAN) and the Community Association Leadership Lobby (CALL). The Community Advocacy Network (CAN) represents 2500 associations and is headed by Donna Berger, an association attorney with Katzman Garfinkel Rosenbaum. Berger also originally initiated the Community Association Leadership Lobby while employed by Becker Poliakoff - which represents approximately 4,500 condominium associations. When she left for Katzman Garfinkel Rosenbaum and started CAN, Yeline Goin and David G. Muller succeeded Berger as CALL�s Co-Directors. Also testifying on behalf of cash-strapped condos and coops was Harry Charles, President Emeritus of the Space Coast Communities Association, an umbrella organization with 269 member associations on central Florida�s east coast.

Based upon a DBPR database review of condominium construction dates, the Division learned that of the 5600 projects affected by the mandated retrofit, only a handful had already complied. The database demonstrated the costs attendant to the two prospective installation options - a full sprinkler retrofit and the partial retrofit (AKA the �Minimum Alternative Life Safety System�) � varied widely, ranging from $503 per unit to $8633 per unit. While impacted by a structure�s layout, material construction, existing standpipe locations, and other structural factors, costs depended primarily on whether the water lines were simply dropped from the ceiling as exemplified by low-income public housing, or effectively hidden to meet the association�s aesthetic objectives. It is highly unlikely that Galt Mile associations will tolerate the exposed pipes that earmark the more modest estimates.

CAN DIRECTOR DONNA BERGER

CALL Co-Director Yeline Goin wasn�t surprised by the sparse association participation, stating �Many associations are taking a wait and see approach, hoping the Legislature will provide relief by extending the date or removing the requirement altogether.� The primary reason for this resistance is the cost. CAN Executive Director Donna Berger agreed that retrofit costs are the limiting factor, noting �Many associations have held off retrofitting because they simply do not have the funds to do so," citing foreclosures as having constricted the fiscal capabilities of many associations.

GARY POLIAKOFF

In a letter he wrote to the Governor blasting the advice Crist received prompting a veto of SB 714, Condo Attorney Gary A. Poliakoff asked, �With all due respect, exactly who did your advisors assume will be forced to pay the special assessments to retrofit a condominium where 40 percent to 50 percent of the units are in default in payment of their assessments, or in mortgage foreclosure?�

CALL CO-DIRECTORS YELINE GOIN AND DAVID MULLER

Pursuing Crist�s strategy ofsoftening public reaction to the prohibitive cost, DBPR hoped Citizens Insurance and the Office of Insurance Regulation would demonstrate that retrofitted buildings would realize an offsetting savings in insurance premiums. Citizens reported that �A 5% sprinkler credit is applied if a building is fully sprinklered and the ISO (Insurance Services Office), a leading provider of information about property and liability risk, confirms the building has an approved sprinkler system.� A condominium with sprinklers in the common areas only (one of the two legal options) may or may not realize any benefit, depending in part on whether they are rated specifically or as a class by ISO. Since specific rates are based on the individual risk characteristics of a building (construction, layout, materials, occupancy, protection, exposure, etc.), prospective reductions are arbitrary at best � depending primarily on the innate altruism of the insurance actuary. If rated as component to a construction class, they would be summarily rejected.

FORMER DEPUTY INSURANCE COMMISSIONER LISA MILLER

However, when insurance carriers granted reductions for Florida associations fully retrofitted with fire sprinklers, the price impact on their overall policies was insignificant because the discounts applied only to the modest �all other perils� portion of their property and casualty policies, not the expensive windstorm portion. After confirming that the 5% premium discount described by Citizens is negligible since it applies only to the �all other perils� portion of an insurance policy, former Deputy Insurance Commissioner Lisa Miller added �An ISO considers a building that is partially sprinklered the same as a building without sprinklers, from a rating perspective.� As a result, ISO will recommend that partially retrofitted Associations receive no discount and fully sprinklered buildings see a small break on their minor multi-peril costs. Additionally, since heeding the advice of ISO is voluntary, subject to the proprietary policies of individual insurance companies, carriers perceiving a captive clientele will be predisposed to blowing off any reduction.

Having failed to provide the cost offsets sought by the Governor, the Division segued to three conclusions and recommendations that supposedly facilitate compliance, starting with an alternative explanation for the perfunctory posture of associations confronted by the retrofit deadline. In the report�s Executive Summary, the DBPR frames how association budgeting practices affect any decision to retrofit by explaining, �Inherently focused on the challenges of the present, a mandate five (5) years from now for many associations likely appears to be in the distant future. Further, considering that in five years, with two year staggered terms, an association�s board could be entirely different than the membership elected this winter. Addressing a mandate not realized until five (5) years from now is likely a lesser priority than the challenges of today�most notably collecting regular assessments and addressing a significant wave of foreclosures.� The Division ultimately defines the stumbling block, �Under the circumstances, the prospect of adding any additional costs for most associations would be difficult to propose, and perhaps result in a recall of the association�s board.�

To cure this obstacle, the Division enigmatically recommends, �Over the next five (5) years the Division via inserts in the billing statements, educational presentations, and electronic communication, will significantly increase awareness of the impending sprinkler retrofit mandate.� Having admitted that despite awareness of the mandate, association boards are unavoidably preoccupied with financial survival, how does sending an insert in the annual billing statement and email reminders that the deadline is approaching resolve an association�s fiscal constraints? Perhaps when a board announces that the building�s water is being shut off to save up for a sprinkler head in every unit foyer, they can simultaneously distribute copies of those inserts and emails to their members. Strike one.

Secondly, the Division concludes �that installation costs vary depending on multiple factors including the initial condition of the association�s standpipe, the type of installation performed (common areas only or common areas and units), and any aesthetic considerations the association may want to incorporate into the existing d�cor.�

Admonishing that �Multiple variables impact the costs of installing a fire sprinkler system and understanding that the statute provides an alternative to a fire sprinkler system in the form of an �other engineered lifesafety system�,� the Division recommends that �best management practices for condominium associations retrofitting with a fire sprinkler system should be established as associations consider their options.� Basically, if you can�t cough up the money to bury the pipes, acclimate to the prospect of living in a tenement. Strike two.

While the first two recommendations rise to the level of tepid drivel, the third effort offers the illusion of merit. Spotlighting the insurance industry�s refusal to confer any rate benefit for installing the less expensive partial sprinkler system, the DBPR suggests that �The Legislature may wish to address the uncertainty of a premium discount when associations opt to install sprinklers in the common areas only.� Every scrap of testimony supports that premium discounts for partial installations are hardly �uncertain�, they are nonexistent.

The DBPR acknowledges that �if a fire sprinkler system has been installed in accordance with nationally accepted fire sprinkler design standards adopted by the Office of Insurance Regulation and if the fire sprinkler system is maintained within nationally accepted standards, Chapter 627.0654, Florida Statutes, mandates a premium discount.� Since the �Minimum Alternative Life Safety System� provided for in Chapter 718.112(2)(l) of the Florida Statutes doesn�t rise to the standard described in Chapter 627.0654, the DBPR suggests �the Legislature may want to harmonize the two chapters,� hopefully providing a modicum of relief for associations installing fire sprinklers only in the common areas.

Two adamantine obstacles burden the DBPR�s proposition. Unless the rate reduction targeted by their recommendation can be applied to the overall insurance premium and not just the anorectic multi-peril portion of the association�s policy, it will never serve as anything more than a shallow public relations gesture. Secondly, since the State is still desperately trying to lure admitted carriers back to Florida�s largely abandoned property & casualty market (despite a 28% rate increase, State Farm is dropping 800,000 property policies and hitting the road), prospects for such costly legislation surviving industry opposition are reasonably comparable to those of a snowball in hell.

SEN GELLER, REP SEILER, GOV CHARLIE CRIST, SPEAKER RUBIO AND SEN JEFF ATWATER PASS INSURANCE BILL

On January 16, 2007, Governor Charlie Crist�s new Administration prompted Senate President Ken Pruitt and Statehouse Speaker Marco Rubio to convene a special legislative session on property insurance. Despite the Governor�s pre-Election Day campaign promises of premium relief for homeowners and significant progress toward re-establishing a competitive insurance environment, the lawmakers were unilaterally stonewalled by the well-organized insurance industry. If not for Jeff Atwater�s eleventh hour reshuffling of Citizens� policy mission from safety net to full-service carrier and the temporary postponement of two scheduled statewide Citizens assessments, the Governor would have come away empty handed. In exchange for these face-saving concessions, the State had to loosen the CAT fund�s purse strings, adding $12 billion to the existing $16 billion in below market reinsurance for carriers (wholly underwritten by taxpayers) with the caveat that the savings be passed to ratepayers. The session produced an 8% premium discount on the heels of a 300% increase.

GOVERNOR CRIST AND COMMISSIONER MCCARTY ANNOUNCE ALLSTATE SUBPOENAS

At Senatorial insurance hearings a few months later, when executives in Allstate�s Florida �dummy� corporations (Allstate Floridian Insurance Co., Allstate Floridian Indemnity Co., etc.) were subpoenaed to explain the evidentiary documentation for a requested 41.9% rate increase, they openly admitted to drawing on relationships with insurance trade associations, insurance rating organizations, affiliated reinsurers and risk modeling companies to �reverse engineer� support for hiking rates. Since more than 33% of Florida�s rated carriers had requested similarly outrageous increases despite experiencing lower costs, the hearings had dramatically outed bald-faced non-compliance with the year-old Statute. After receiving a slap on the wrist, some carriers accepted more modest rate increases although most skipped town, abandoning the Florida property insurance market. It is highly unlikely that this same insurance lobby will suddenly succumb to legislative pressure and pass out discounts. You do the math. Strike three.

In summary, two of the three recommendations restate and then ignore the problem. Having established that associations can ill afford to pass $billions to the fire sprinkler industry, DBPR will pointlessly send out emails to remind association boards that the deadline is 2014 and more emails to remind them that they can choose between a full or partial retrofit. The third recommendation is an unfunded excursion to Fantasy Island. Notwithstanding, the report provides ample political distraction for the Governor to spin this as a serious treatment of the issues at campaign events.

If a special legislative session is convened to ratify a controversial tribal gaming agreement, an SB 714 veto reversal is possible. Don�t hold your breath. It appears that we will have to endure another legislative gauntlet before realizing relief from this big time payday for plumbing contractors and sprinkler distributers. At least the next Governor will not be able to rationalize another veto by claiming the absence of a condo cost impact study. Welcome to Florida!

Related Links

If you would like to let Governor Crist know that his veto of SB 714 was ill advised, click the following email link: [email protected].

• Click Here for the Governor Bush's veto message for SB 391
• Click Here for the Governor Crist's veto message for SB 714
• Click Here for the DBPR's Sprinkler Retrofit Impact Report for Associations
• Click Here to read what the Florida Sprinkler Association thinks about YOU - (see page 2)

REPRESENTATIVE ELLYN BOGDANOFF

September 18, 2009 - In late 2003, fate handed former District 91 Statehouse Representative Connie Mack IV an opportunity to expedite his planned pursuit of political stardom. When President George W. Bush appointed District 14 Congressman Porter Goss to head the Central Intelligence Agency, Mack closed up shop in Fort Lauderdale and elbowed his way to the empty Congressional seat in Fort Myers, where Mack grew up. Despite being outgunned in name recognition and political support by most of the 6 other candidates for Mack�s vacated House seat, Ellyn Bogdanoff eked out a 12-vote margin of victory, slipping by 8-year Lauderdale-by-the-Sea Mayor Oliver Parker in the January 6, 2004 Special Election. Within two years, the neophyte rookie blossomed into a Statehouse anchor, squaring out a formidable reputation for unrelenting tenacity, fiscal diligence, natural networking skills and a disarming facility for achieving consensus. Few of her Tallahassee peers were surprised when Statehouse Speaker Marco Rubio named Ellyn as his Majority Whip, wherein she shepherded through the Statehouse every major component of Governor Crist's property insurance and tax program. She also singlehandedly revamped and rescued the State�s broken No-Fault insurance legislation just days before its intended dissolution would have burdened every vehicle owner with an additional insurance expense.

HOUSE SPEAKER LARRY CRETUL

When lawmakers confronted last session�s intimidating $6 billion budgetary shortfall, the Statehouse leadership again summoned Representative Bogdanoff, installing her as Chair of the Finance and Tax Council and Vice Chair of the Rules & Calendar Council - the legislative gatekeeper. In August, House Speaker Larry Cretul asked Florida Tax Watch and concerned legislators to research as yet unexplored cost-cutting measures in preparation for another recessionary budget. Cretul exclaimed �We need to identify efficiencies, where they can be found, maybe some systemic and process changes. I know it�s a high-altitude description, but that�s on our radar screen. I�m going to ask Representative Bogdanoff to be very involved.� When Senate President Jeffrey Atwater threw his hat into the ring for CFO Alex Sink�s job, Ellyn concomitantly targeted Jeff�s District 25 Senate seat. Given the significant political capital she�s amassed in her brief but meteoric legislative career, other prospective candidates will be hard pressed to convince voters that they are better positioned to represent district interests than Bogdanoff.

In her Autumn Newsletter, Bogdanoff describes some of the challenges undertaken during the 2009 legislative session and measures their success from several objective perspectives. One such outlook heralds from the American Legislative Exchange Conference, a 501(c)3 non-profit organization committed to �Jeffersonian principles of free markets, limited government, federalism, and individual liberty.� In a report entitled �State Winners and Losers�, the ALEC measures 15 policy variables that have a proven impact on the migration of capital � both investment capital and human capital � into and out of states. Explaining that the 15 factors are influenced directly by state lawmakers through the legislative process, they are 1) Highest Marginal Personal Income Tax Rate, 2) Highest Marginal Corporate Income Tax Rate, 3) Personal Income Tax Progressivity, 4) Property Tax Burden, 5) Sales Tax Burden, 6) Tax Burden From All Remaining Taxes, 7) Estate Tax/Inheritance Tax (Yes or No), 8) Recent Tax Policy Changes 2007-08, 9) Debt Service as a Share of Tax Revenue, 10) Public Employees Per 1,000 Residents, 11) Quality of State Legal System, 12) State Minimum Wage, 13) Workers� Compensation Costs, 14) Right-to-Work State (Yes or No) and 15) Tax or Expenditure Limit. In stark contrast with the waves of ominous decline that emanate daily from virtually every media source, the study concludes that the State�s 2009 legislative changes have improved its economic outlook, moving Florida�s national rank from number 16 to number 11 out of 50. In essence, the report summarizes how people will essentially flood from the Northeast into the rest of the country, motivated by the prospect of �living better for less.�

BROWARD SCHOOL BOARD BLEW 100s OF $MILLIONS ON 10s OF THOUSANDS OF EMPTY CLASSROOMS

Bogdanoff casts this year�s increase in Florida sales tax revenues as an economic indicator, supporting her contention that Floridians are spending more and tourism continues to flourish. Transitioning to a subject in which Bogdanoff has long nourished an emotional investment, she reviews the boost to education inherent in the State budget. Her admonition that how the money is spent is as important as the amount made available should touch a nerve in Broward residents. Having learned that their school board cycled out hundreds of $millions for the construction of tens of thousands of new classrooms in districts where they can�t fill the existing classrooms, Broward taxpayers are rightfully leery about placing more money into the system before the political rat�s nest undergoes a thorough housecleaning.

Local scandals aside, Ellyn takes pride in the findings of a meritorious scholastic evaluation by Education Week magazine, which makes reference to the remarkable qualitative enhancement of education in Florida. Over the past three years, the State�s national educational ranking in the journal�s �The 50 State Report Card� improved from number 31 to number 10. Bogdanoff acknowledges the painful adjustments that remain and the need to fuel job growth, given the State�s painful 10.7% unemployment rate. Characterizing local input as the centerpiece of her legislative policies, our Statehouse Representative invites constituents to sign on for legislative email updates. Read On! - [editor]

�Dear Neighbor:

Until next time,�

SENATOR MIKE FASANO

During the 2009 regular legislative session, Tallahassee experienced the immense thumbprint wielded by the banking lobby. By delaying assumption of title, banks forestall assessment obligations to the association for foreclosed units, forcing the other unit owners to pay the bank�s share. Although thousands of associations pleaded for legislative relief from the banking industry�s dilatory foreclosure strategy, House and Senate leaders warned lawmakers that any bill threatening banks with additional costs will suffer an inauspicious death on the calendar. Following the announcement, several fast-moving, popular bills became MIAs.

SENATOR JEREMY RING

Senator Mike Fasano, a Republican from New Port Richey, filed Senate Bill 880 (SB 880), extending lender liability to the lesser of 12 months of past due fees and special assessments or 20 percent of the mortgage amount if payment to the association is made within 30 days of taking title. The cap would vanish after the 30-day deadline. Senator Jeremy Ring, a Parkland Democrat, filed Senate Bill 998 (SB 998), requiring lenders to take title on investor-owned units within 12 months of filing foreclosure, with no penalty for that year of engineered delay. As the session progressed, at least a dozen other bills providing similar relief options were folded into the major filings best positioned for passage.

J. THOMAS CARDWELL - FLA BANKERS ASSN COUNSEL

In a monument to contradiction, after first exclaiming that he hadn�t seen any evidence of bank delays in taking title, general counsel J. Thomas Cardwell of the Florida Bankers Association wagged the dog, enumerating several reasons for the �nonexistent� delays. Cardwell said �Lenders are only trying to help keep homeowners in their properties,� asserting that the foreclosure foot-dragging is simply the industry�s way of actualizing altruistic foreclosure moratoriums. He also blamed homeowners for mounting time-consuming defenses that bogged down the court system with capricious filings.

Contending that the relief bills were squelched to benefit Condominium owners, Cardwell stated �These bills could severely damage the ability to obtain financing on condos, and because of that, would do much more damage to condos and condo associations than they would do good.� Mid-way through the session, after the bills had clearly gained sufficient support and momentum for passage, bank lobbyists handed legislative leaders a non-negotiable ultimatum. The industry threatened to hike interest rates on Florida condo loans or stop writing condo mortgages altogether if changes were made to the current law. Overnight � and despite its penalty-free construction � Ring�s bill withered and died. Since lenders were unprepared to risk losing any amount incremental to losses already incurred through foreclosure, Fasano�s bill also bit the dust.

Although the banking lobby has thus far successfully thwarted legislation forcing banks to expeditiously execute foreclosures and assume their statutory assessment obligations, the courts have recently provided associations with some sorely needed relief. When the Real Estate slot machine stopped paying off, and units lost any marketing semblance to hotcakes, overextended investors desperately sought alternatives to a speculative implosion. Hundreds of thousands of units were stuffed into the rental market. Some were placed there by investors hoping to weather the recession until Real Estate values moderated. The rental market also became an interim repository for units mired in �short sale� delays, wherein banks often stretch closings from six months to a year � or longer.

The resulting patchwork quilt of unit rentals has fostered a virtual underground economy with $millions changing hands every month. Speculators who have stopped paying their mortgages and association fees often continue to pocket rental income while awaiting either the bank axe or a buyer. Unfortunately, the association is legally an impotent frustrated witness to these black market-style transactions. Understandably angry unit owners are forced to subsidize units in various stages of foreclosure while watching their delinquent neighbors continue to collect rent. Depending on the number of non-contributing units in each association, the impact on members ranges from moderate fiscal strain to utter devastation. Many of the local associations en route to insolvency from ballooning foreclosure rates could be salvaged by recapturing the cash fueling these non-contributing rental agreements.

Chapter 718 of the Florida Statutes � The Condominium Act � provides for a modicum of relief, affording associations the right to apply for a court-appointed independent custodian empowered to collect rent directly from the tenants and disburse the condo fees as required. Section 718.116(6)(c), Florida Statutes, provides, in relevant part, as follows: �If the unit owner remains in possession of the unit after a foreclosure judgment has been entered, the court, in its discretion, may require the unit owner to pay a reasonable rental for the unit. If the unit is rented or leased during the pendency of the foreclosure action, the association is entitled to the appointment of a receiver to collect the rent. The expenses of the receiver shall be paid by the party which does not prevail in the foreclosure action.�

Until recently, two drawbacks deterred the law�s implementation. The process entails legal fees and court costs prerequisite to a resolution, further burdening the delinquent�s neighbors. If the association is plagued with many foreclosures, the cumulative legal costs could be prohibitive. Additionally, many of these short-term rental agreements stand to expire either during or shortly after the court proceedings yield a receiver.

MIAMI CIRCUIT COURT JUDGE ELLEN LEESFIELD

Threatened with increasing monthly deficits, The Oaks at Miami Gardens Condominium Association in Opa-locka retained the North Bay Village-based Association Law Group to seek a blanket receivership in a last ditch attempt to salvage the community�s fiscal viability. On March 23, 2009, lead attorney David C. Arnold filed an �Emergency Petition for Appointment of Receiver� in the Circuit Court of the Eleventh Judicial Circuit in Miami-Dade County. In a decision based on Arnold�s innovative interpretation of the statute as applicable to any number of units, Miami circuit court judge Ellen Leesfield approved one of the first requests for a blanket receivership, allowing a single, master receiver to collect rents for all association units in foreclosure. In approving Seth Heller of Heller & Company Inc. to act as �receiver for all the units�, the March 24^th ruling enabled the association to access that shadow rental economy via a single court proceeding instead of filing separate actions for each delinquent unit.

THE OAKS AT MIAMI GARDENS CONDO ASSOCIATION

According to Association Manager Javier Lopez, The Oaks was running a 75% monthly shortfall, collecting only $3,000 of the $11,000 required to keep the wolf from the door. Only 22 of the 61 units were current in paying their assessments. �Trash hauler Choice Environmental noticed the association for their last pickup date. The water and electricity were in final default.� Having failed to correct violations uncovered during the annual statutory fire prevention and County health inspections, imposition of access restrictions by both the Fire and Health Departments were imminent.

ATTORNEY BEN SOLOMON ASSOCIATION LAW GROUP

Attorney Ben Solomon of the Association Law Group explained �Once the order came down, we made demand on all of the tenants in units under foreclosure by the association to pay the rent directly to a receiver, and that money comes directly into the association as an immediate income stream.� Illustrating the tactic�s palliative impact, Solomon said �After the receivership was ordered, they doubled their income to over $6,000 within 30 days. By the second month, they were getting back more than $11,000.�

ATTORNEY DAVID ARNOLD ASSOCIATION LAW GROUP

If provided for in its Condominium Documents, an association can collect rent directly from tenants without court participation, saving the attendant expense. Associations aspiring to subsequently add the provision by a vote by all the members are likely to encounter an obstacle. Since the problem is often a consequence of the association�s large number of investor-owned units, enlightened self-interest would prompt those speculators to vote against passage. Associations can also execute a three-party understanding, wherein the owner, renter and association agree that rental payments from the tenant go directly to the association, which addresses the delinquency and passes any balance to the owner.

VILLAGE AT DADELAND CONDOMINIUM IN MIAMI

Unfortunately, if unit owners and their tenants refuse participation in these or similar strategies and continue to exclude the association, despite mandates in the authorizing documents, the association can do little in response. Alternatively, a blanket receivership program can be enforced by the court, giving it teeth. Evasive unit owners who refuse to pay allocated shares of maintenance while collecting rent during the foreclosure process are compelled by court order to pay past due and current maintenance assessments and, in some cases, 12 months of accelerated maintenance assessments.

CHIEF JUDGE DAVID GERSTEN 3rd DIST. COURT OF APPEALS

Since the March ruling, circuit courts in Miami-Dade and Broward counties have authorized 20 similar receiverships. A challenge to the ruling was filed on June 29, 2009, in the 3^rd District Court of Appeals by a Village at Dadeland unit owner � Robert J. Wolfarth � who protested the appointment of a receiver on the grounds that he was not given proper notice. Motions filed by the Village at Dadeland Condominium Association allege that despite collecting rent on 17 units, Wolfarth stiffed the association for assessment fees, prompting the Village at Dadeland to file foreclosure proceedings. Attacking the Circuit Court�s interpretation of the statute that resulted in a blanket receivership, Wolfarth�s attorney (Sergio A. Pagliery of Shook, Hardy & Bacon L.L.P.) held that separate petitions for receiver should have been filed for each of their client�s delinquent units. On July 23^rd, the Court unanimously denied Wolfarth�s Petition for a Writ of Prohibition. By upholding the original ruling, the Court paved the way for wider utilization of master receiverships by associations suffering from nonpaying landlords who lease their units. The legal validation finally allows associations to penetrate the furtive rental environment and relieve the incremental fiscal burden it places on the general membership.

While this is clearly a no-brainer for communities predominated by investor-owners, it is also being productively implemented by associations with a more traditional membership composition. For those few Galt Mile associations with two or three delinquent member-landlords, the resulting deficit might be considered manageable. However, those with a half dozen or more leased units in various stages of foreclosure would increase monthly income by several thousand dollars via a blanket receiver. Once a master receivership is set up for a particular association, explains attorney David Arnold, �any unit that goes into foreclosure that has a renter in it is automatically included under the umbrella...on behalf of the association.� He neglected to mention that the Receiver is only empowered to collect funds for tenanted units against which a foreclosure was filed by the Association, not a bank or other lien holder.

SENATORS JOHN McCAIN AND RUSSELL FEINGOLD

July 28, 2009 - Concerned by the growing perception that legislative seats were essentially commodities with price tags, in 2002 U.S. Senators Russell Feingold (D-WI) and John McCain (R-AZ) collaborated across the aisle to sponsor the Bipartisan Campaign Reform Act of 2002 (BCRA, McCain�Feingold Act, Pub.L. 107-155, 116 Stat. 81, enacted March 27, 2002). Effective as of November 6, 2002, this United States federal law amended the Federal Election Campaign Act of 1971, which regulates the financing of political campaigns. The Act was designed to address two issues.

By prohibiting national political party committees from raising or spending any funds not subject to federal limits, the Act was anticipated to stigmatize the increased role of soft money in campaign financing, even for state and local races or issue discussion. Not surprisingly, a wide variety of unaccountable interest groups and PACs subsequently filled the finance vacuum created by the Act�s soft money deterrent.

Seeking to stem the proliferation of issue advocacy ads, it defined any broadcast ads that name a federal candidate within 30 days of a primary or caucus, or 60 days of a general election, as �electioneering communications�. The Act prohibited payment for such ads either by corporations or by unincorporated entities using corporate or union funds. In debating the bill, Congress perfunctorily approved an amendment sponsored by the late Senator Paul Wellstone, (D-MN), that reconstituted the Act�s definition of �corporations� to include nonprofits. The prohibition against sponsoring ads therefore applies to non-profit issue advocacy organizations such as Right to Life, Save the Whales, Planned Parenthood, the American Heart Association or the Children�s Defense Fund. The law draws no distinction between General Motors and the ACLU.

From its outset, provisions of the legislation were challenged as unconstitutional by political parties and public interest �watchdog� organizations. Aware of its inherent First Amendment baggage, when President George Bush signed the bill into law, he expressed �reservations about the constitutionality of the broad ban on issue advertising� and suggested that the courts would clean up the legislation down the road.

One conflict took the form of complaints filed with the Federal Election Commission (FEC) concerning the raising and spending of soft money by so-called �527 organizations� � organizations claiming tax-exemption as �political organizations� under Section 527 of the Internal Revenue Code (26 U.S.C. � 527), but not registering as �political committees� under the Federal Election Campaign Act, which deploys a different legal standard. High profile 527 organizations on both sides of the aisle such as the pro-John Kerry �Media Fund� and the anti-John Kerry �Swift Boat Veterans for Truth� drew the ire of traditional political organizations that couldn�t exploit the loophole.

SENATOR MITCH McCONNELL

When the law was first tested in the Supreme Court by a group of the Act�s opponents led by Kentucky Senator Mitch McConnell (McConnell v. Federal Election Commission), the court surprisingly upheld the constitutionality of most of the Act�s provisions by a 5 - 4 decision. Since �educating voters influences them� and the prohibitions also extended to constitutional watchdogs, the ACLU had to stop running ads challenging President Bush on civil liberties issues respondent to the war on terror.

When Wisconsin Right to Life (WRTL) later asked the Supreme Court to exempt grassroots lobbying campaigns from the law�s �electioneering� rules (Federal Election Commission v. Wisconsin Right to Life, Inc.), the court distinguished between �express advocacy ads� and WRTL�s �issue ads� that didn�t specifically advocate any particular candidate. Exclaiming �Enough is enough,� Chief Justice John Roberts acknowledged the slippery slope facing the court, which found that the FEC lacked a compelling interest to further interfere with the First Amendment and handed WRTL a favorable 5 � 4 decision.

The vast majority of advocacy organizations and citizens� groups are organized as nonprofit corporations. Complying with electioneering communications laws imposes large costs on nonprofits, diverting scarce resources from their core objectives. In addition to facing an expensive regulatory burden, most organizations will be forced to compromise donor privacy if they speak about politics, thereby risking financial support. While few nonprofits have an explicitly political mission, many at least occasionally communicate with the public about policy issues. These groups unexpectedly find themselves subject to regulation when the issues they care about inadvertently become part of an election campaign. Ironically, as soon as the central issue for which any group was created enters any political arena, they are legally enjoined from even educating the public about that issue.

Under McCain�Feingold, the Federal Election Commission banned the airing on cable TV of a film entitled �Hillary: The Movie�, produced by the nonprofit Citizens United. If the group ran TV ads for the film, they would be required to �name names� of the film�s backers by disclosing detailed personal information about donors to the government. When Citizens United challenged the decision, a U.S. District Court upheld the FEC�s ruling. Following contentions that the film was nonpartisan and fact-based, the Supreme Court docketed the case on August 18, 2008 and heard oral arguments on March 24, 2009.

Instead of handing down an expected early summer decision, on June 29^th, the Court charged the parties to address whether the previous cases supportive of bans on corporate-funded political speech, including nonprofit corporations such as Citizens United, should be overturned. The parties were first charged with submitting briefs on the larger issues, after which they would reargue the case on September 9, 2009. The Court also wanted to consider whether McConnell v. FEC, the hallmark case upholding the �electioneering communications� ban in McCain-Feingold, should likewise be overturned, thereby striking down the ban altogether.

The Institute for Justice, which filed an amicus brief on behalf of Citizens United, argued that if the government could ban corporate-funded films about candidates, it could also ban books and movies. In order to afford the Government an opportunity to clarify whether that hypothesis was credible, Justice Samuel Alito asked the government whether the ban on corporate funding of advertisements would logically apply to a book that called for the election or defeat of a politician. The government confirmed that it would. In a Twilight Zone moment, the government agreed that it is not actually banning advertisements, movies or books, but simply precluding anyone from paying for them.

Seemingly excited by the prospect of turning the First Amendment into sugar-water, certain State legislators around the country viewed the court�s original decision as a green light to further restrict politically inconvenient speech. Since 2003, 15 states have passed substantially more constitutionally egregious adaptations of the federal template, affecting every civic organization that even mentions the name of a candidate or discusses an issue. Although largely unknown to Florida citizens, the nation�s most restrictive rendition was passed in Tallahassee.

Under Florida�s �electioneering communications� law, any group of people that simply mentioned a candidate�s name or a ballot issue in a public newsletter or on a website had to register with the government, listing all banks, safe-deposit boxes, or other depositories wherein their funds are located and disclosing personal information about donors, even those who never intended their contribution for political speech. This included homeowners associations, neighborhood associations, condominium associations, taxpayers groups, civic clubs, health-related support organizations from cancer survivors to cerebral palsy victims, senior groups, or nonprofit organizations of any stripe. Groups that failed to comply faced fines and possible jail time for their speech. Individuals were also subject to burdensome reporting requirements if they spent just $100 of their own money to speak, post to their web site or print a newsletter.

BROWARD COALITION CHIEF CHARLOTTE GREENBARG

AThese regulations also require groups to report all of their donations and/or expenditures, maintain a registered office and a registered agent, appoint a campaign treasurer, designate a campaign depository, and take other steps consumptive of time and money. No advocacy is required to violate the law. The mere mention of generic issues like controlled development, foreclosures, public safety, beach renourishment, or ballot issues such as property taxes, school choice, same-sex marriage or land conservation could trigger prosecution. While taxing political speech by ordinary citizens� and issue-based groups, the law specifically exempts newspapers, radio stations, television stations, or other recognized media organizations. Even this poorly drafted provision treats corporations inconsistently; General Electric and Disney are exempt since they own television networks while General Motors gets the horn.

Last October, the Institute for Justice filed a First Amendment challenge to Florida�s law on behalf of the Broward Coalition of Condominiums, Homeowners Associations and Community Organizations, the University of Florida College Libertarians and the National Taxpayers Union, as well as the leaders of each organization. The law made it impossible for them to discuss candidates and issues with their members and the public. After reviewing the statute�s chilling impact on free speech, U.S. District Judge Stephan Mickle issued a preliminary injunction just prior to last November�s election, preventing Florida from enforcing the law. Explaining his action, Mickle said, �No court has ever upheld such a sweeping regulation of political speech.�

U.S. DISTRICT JUDGE STEPHAN MICKLE

After hearing arguments in Gainesville, where the Act sought to punish University of Florida student groups for political education, Mickle issued an opinion on May 22, 2009, finally striking down Florida�s controversial �electioneering communications� law. Ruling the law unconstitutional, Mickle wrote, �While it is true that the legislature has the power to regulate elections, it does not have the power to regulate purely political discussions about elections.� By failing to appeal Mickle�s federal court ruling within 30 days, Florida Secretary of State Kurt Browning waived the State�s opportunity for judicial reconsideration. �This ruling, consistent with the preliminary injunction entered last October, enjoins the Division of Elections and the Florida Elections Commission from enforcing all laws relating to �electioneering communications� in Chapter 106,� said Elections spokesperson Jennifer Krell Davis.

FLORIDA SECRETARY OF STATE KURT BROWNING

Except for speech promulgated for the express purpose of creating mayhem, the courts have mostly defended the First Amendment from popular prohibitions against unpopular speech. As proclaimed by Daniel Webster, if he would have to sacrifice all his rights save one, it would be the right to speak, because through it, he could recover all the others. The enigmatic interpretations of McCain-Feingold as supported by McConnell v. FEC and subsequent decisions - along with the Florida Legislature�s statutory mutation - fatally eroded the very right for which the First Amendment was originally conceived and implemented to protect - political speech. The Florida version functionally circumscribed what is arguably the most important of all civil rights in a democracy� the right of citizens to criticize their government.

�This is a tremendous victory for the First Amendment right to speak about politics without the government getting in the way,� said Institute for Justice Senior Attorney Bert Gall upon hearing Mickle�s ruling. �Florida�s law put everyday political speech under the thumb of campaign finance bureaucrats. But with today�s ruling, all Floridians � not just political insiders � can now discuss important political issues without fear of being punished or forced to submit to onerous regulations.�

The reason offered by Secretary of State Browning for reversing his original intention to appeal Mickle�s ruling frames the controversy surrounding any electioneering communications law. Browning let the deadline pass �in order to provide the legislature additional flexibility in addressing the court�s concerns with the law.� While there remains a need to confine the ill effects of aggregated wealth on politics and promote campaign finance transparency, if the enabling legislation consequently silences ordinary political expression, the impending constitutional collision will rightfully send lawmakers back to the drawing board.

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