After smacking down Disney, Ron DeSantis might give the company a big gift
The Trade Show (2023 ed.), Vol. 5
This is “The Trade Show,” a weekly collection of shorter news nuggets and stories from other outlets around the state and country about the special interest-driven issues that lawmakers spend most of their time working on. These are issues that ultimately have enormous impact on everyday Floridians. But they don’t get nearly enough attention outside of Tallahassee, because politicians use culture wars to distract everyone’s attention. The name comes from something a mentor once told me before I covered my very first legislative session more than 20 years ago: “Ninety percent of what goes on up here is a trade show.
Two weeks ago, Florida Gov. Ron DeSantis made the state’s Republican-controlled Legislature punish the Walt Disney Co.
But now, DeSantis wants lawmakers to do something that Disney lobbyists have been dreaming about for years.
At a press conference last week in Jacksonville, DeSantis called on lawmakers to pass a package of laws imposing new restrictions on civil lawsuits that, taken together, would make it much harder for consumers to sue businesses.
One of the key pieces in DeSantis’ plan is a concept that corporate lobbyists sometimes call “Truth in Damages” or “Transparency in Damages.” It would rewrite the rules that juries must follow when determining how much a negligent business should pay to cover an injured person’s medical bills. The changes would lead to smaller payouts for victims.
Businesses have been pressuring Florida politicians to pass a Truth in Damages law for more than a decade now. Two big businesses in particular launched this lobbying campaign.
One is Publix Super Markets Inc., the giant grocery chain.
Cutting off civil lawsuits — or “tort reform,” as business lobbyists call it — is an enormous issue for Disney and Publix, which are two of the most frequently sued companies in the state, whether by a customer who slips and falls in the aisle of a grocery store or a tourist hurt on a theme-park ride. Any laws that result in fewer lawsuits, friendlier pre-trial settlements, and smaller jury awards would save these companies millions.
In fact, back in 2013, when I was covering Disney full-time for the Orlando Sentinel, I wrote about Disney and Publix leading the charge for the Truth in Damages legislation. As part of that, I obtained some records that showed Publix alone expected to save at least $1 million a year in legal expenses — and potentially much more.
Disney and Publix are not, of course, the only businesses that would save money if their customers have a harder time suing them.
But there aren’t many businesses who would save more.
Read: Publix, Disney aim to cut lawsuit awards for accident victims (Orlando Sentinel – 2013)
‘Do we want to be DeSantis’ punching bag?’
Ron DeSantis’ embrace of tort reform also helps explain why Disney has responded so meekly to the rhetorical lashings the governor has been giving the company for nearly a year now, and why the company has seemingly rolled right over for his takeover of the soon-the-to-be-renamed Reedy Creek Improvement District.
Because as much as he might use Mickey Mouse as a campaign-trail villain, DeSantis also has the power to deliver so much of what Disney wants as a company.
The governor can muscle tort reform through the Florida Legislature. He can tell the Legislature to double public spending on tourism advertising. He can get Disney carveouts from laws it doesn’t like. He can sign tax breaks written by company lobbyists, and help them get even more in the future. And he can ignore calls to close corporate tax loopholes that Disney exploits.
And that’s even before DeSantis takes control over everything from road construction to utility easements at Disney World, via the new political appointees he will pick to run Reedy Creek.
The entertainment-business news publication TheWrap explored Disney’s internal calculus in a piece last week:
“…Disney asked itself a huge question, according to an individual with knowledge of the situation: Do we want to be DeSantis’ punching bag for the next two — or four — years? Is that worth whatever economic benefit comes from controlling the Reedy Creek Improvement District? The consensus was ‘No.’”
Read: Why Disney Ceded Control of Its Florida Empire to Gov. Ron DeSantis (TheWrap)
This slippery slope turned out to be a cliff
The “Truth in Damages” stuff is one of three Big Things in Ron DeSantis’ plan to shut down many civil lawsuits against businesses. All three of them have been on the Big Business lobby’s wish list for more than a decade.
The second Big Thing would make it much harder for consumers to bring what are known as “bad faith” lawsuits against insurance companies, in which they can win extra damages from insurers that drag out or deny claims without good reason to do so.
The third Big Thing — and probably the biggest of the three Big Things — would repeal a longstanding law that allows a policyholder who wins a lawsuit against an insurance company to make that insurance company pay their legal bills, too.
It’s known as Florida’s “one-way attorney fee” law, and it’s meant to level the playing field between an individual customer, who might not have the money to hire a competent attorney on their own, and their insurance company, which probably has an entire team of lawyers.
If this rings a bell, that’s because DeSantis and the Legislature recently eliminated one-way attorney fees specifically for lawsuits involving property insurance policies. It was a centerpiece of the legislation they passed during a December special session on insurance.
It didn’t take a rocket scientist to figure out where this was headed next. As I wrote before that bill passed, “Now, this legislation (HB 1A, SB 2A) only eliminates one-way attorney fees in lawsuits involving property insurance policies. But you can bet that lobbyists for auto insurers and health insurers and all the rest will soon be pressing lawmakers to give them the same break, too.”
So good luck to families trying to get an insurer to cover the cost of a decent nursing home or the mom-and-pop restaurants trying to get their business-interruption claims paid.
Read: Ron DeSantis and the Florida Legislature are about to leave Floridians at the mercy of their insurance companies (Seeking Rents)
Another way Florida leaders stuck it to customers of Citizens
Speaking of that property insurance special session, one of the more subtle changes DeSantis and the Florida Legislature made involved Citizens Property Insurance Corp., the state-run insurance company.
When Citizens was initially created, it was explicitly required by law to charge rates that were both actuarially sound and “non-competitive” with prices charged by private insurance companies.
But after the busy hurricane seasons of 2004 and 2005 sent private prices soaring, former Gov. Charlie Crist had the Legislature make a bunch of changes meant to keep Citizens’ own rates from skyrocketing beyond the reach of many Floridians.
Under Crist, the Legislature temporarily froze Citizens’ rates. They set caps on how much Citizens’ rates could rise each year once the freeze expired. And they removed the requirement that Citizens’ rates be “non-competitive” with the private market.
But DeSantis had the Legislature reinstate that non-competitive rule.
At first glance, this might not seem like a big deal. After all, Citizens rates have been climbing every year just to get them back to the point where they are actuarially sound.
But this change means that, once Citizens’ rates are actuarially sound, they’ll keep keep going up even more.
Citizens officials explained the impact in a white paper provided to the Legislature before the special session, which turned up in a recent public-records request:
“Due to Citizens’ status as a tax-exempt government entity, even if Citizens were able to achieve actuarially sound rates those rates would, in many cases, be cheaper than those in the private market,” Citizens wrote in the document. “As the insurer of last resort, Citizens should not be competing with the private market.”
Remember that every time you read another story about how private insurance prices are still soaring.
Read: Florida property reinsurance rates expected to jump 40% to 50% in June (WFLA)
The governor’s growing power
The Legislature’s annual session begins in less than three weeks. An interesting game this year might be to count how many times lawmakers give Ron DeSantis control of a formerly independent entity.
Read: Florida lawmakers move to give DeSantis control over school athletics board (Tampa Bay Times)
‘People got screwed’
Lobbyists for a big financing company have been trying hard to get the Florida Legislature to expand a controversial program that bankrolls certain kinds of home-construction projects using charges that get added to the homeowner’s property tax bill.
But maybe they ought to fix the glaring consumer-protection problems first?
Read: ‘People got screwed.’ Despite troubles, green energy lender seeks restart in Florida (Miami Herald)
and
Read: Other states have fixed consumer protection problems with PACE loans. Why not Florida? (Miami Herald)
Cities and counties are in Tallahassee’s crosshairs
We’re all sailing in uncharted waters this session, with Republicans controlling two-thirds supermajorities in both the House and Senate.
For instance, it takes a two-thirds vote in each chamber to significantly cut taxes that fund city or county operations or to force those local governments to take on unfunded mandates.
That’s something Republicans can do now without the vote of a single Democrat.
Read: In push to the right, Florida cities and counties become focus for DeSantis and lawmakers (Palm Beach Post)
Meanwhile, in Maryland…
There aren’t many ideas that scare large corporations more than tax transparency.
Corporate executives and their lobbyists know that if their companies were forced to publicly disclose how little many of them actually pay in taxes, the ensuring uproar would generate a groundswell of support for reform.
Just think about how much attention it gets when watchdog groups reveal that Amazon avoided $5 billion in taxes or that Netflix’s tax rate is just 1 percent. They’re the sort of scandals that make it into presidential speeches.
The companies and their lobbyists always scream that these reports are misleading, because they are based on information from investor filings rather than actual tax returns. But these companies never actually reveal the real numbers. And nobody can fact-check them because their tax returns are secret.
But that might change, at least in some states. The Legislature in Maryland, for instance, is considering a bill this year that would require publicly traded corporations to disclose what they actually pay in state corporate taxes, along with details about the various tax breaks they use.
Maybe the idea will catch on in Florida, too.
And while we’re on the subject of tax transparency, check out the latest story in ProPublica’s groundbreaking series, “The Secret IRS Files,” which stars a Microsoft CEO, a Walmart heir, and a Facebook co-founder.
Read: How the wealthy save billions in taxes by skirting a century-old law (ProPublica)
Just a wealth of information that every Florida voter should read and understand. Unfortunately, too many do not read anything or latch on to the right-wing news sources that support their thinking, ignoring important, truthful facts.
Good job!