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ABC Charters, Inc. v. Bronson

District Court, S.D. Florida
2008 WL 4500352, 2008 U.S. Dist. LEXIS 80091, 591 F. Supp. 2d 1272 (2008)
ELI5:

Rule of Law:

A state law that imposes unique and burdensome regulations on businesses engaged in travel to specific foreign nations intrudes upon the federal government's exclusive authority over foreign affairs and foreign commerce and is preempted by comprehensive federal law under the Supremacy Clause.


Facts:

  • Florida enacted the Sellers of Travel Act Amendments, which imposed exceptionally harsh regulations specifically on businesses providing travel services to Cuba and other federally-designated 'terrorist states'.
  • The amendments required targeted travel providers to post bonds of $100,000 to $250,000, compared to a $25,000 bond for other travel agencies.
  • The law made any violation of federal law related to travel to these countries a third-degree felony under Florida law and required the disclosure of proprietary business information.
  • The Plaintiffs are federally-licensed travel agencies and charter companies, many of which are small, Cuban-American-owned businesses whose lawful primary business is facilitating travel to Cuba.
  • Prior to the amendments, many Plaintiff companies had excellent consumer records, to the point where the state had waived previous, much smaller bond requirements.
  • There was no legislative history or evidence presented indicating that these companies posed a particular risk to consumers that would justify the new, stringent regulations.
  • The amendments would force many of the Plaintiffs out of business due to the unaffordable bond requirements and the severe threat of felony prosecution for minor infractions of complex federal regulations.

Procedural Posture:

  • Plaintiffs, a group of travel agencies and charter companies, filed a complaint in the U.S. District Court for the Southern District of Florida against Charles H. Bronson, in his official capacity as Commissioner of the Florida Department of Agriculture and Consumer Services.
  • Plaintiffs sought a declaratory judgment that the Florida Sellers of Travel Act Amendments are unconstitutional and injunctive relief to prevent their enforcement.
  • The court entered a temporary restraining order on July 1, 2008, to prevent the law from taking effect.
  • Defendant Bronson filed a Motion to Dismiss for Lack of Jurisdiction and Lack of Standing.
  • Plaintiffs filed a Motion for a Preliminary Injunction.
  • The court held an evidentiary hearing on the motion for a preliminary injunction.

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Issue:

Do the Florida Sellers of Travel Act Amendments, which impose unique and burdensome requirements on travel providers dealing with Cuba and other federally-designated 'terrorist states,' violate the U.S. Constitution by infringing upon the federal government's exclusive powers over foreign affairs and commerce and by being preempted by federal law?


Opinions:

Majority - Alan S. Gold

Yes, the Florida Sellers of Travel Act Amendments are unconstitutional. The amendments are not a legitimate consumer protection measure but rather an impermissible attempt by a state to conduct its own foreign policy, a power reserved exclusively for the federal government. The court found that the law is preempted by federal law and violates several constitutional principles. The federal government has established a comprehensive and carefully calibrated regulatory scheme for travel to Cuba, and the state law stands as an obstacle to the execution of federal foreign policy objectives. Furthermore, the Airline Deregulation Act expressly preempts state laws 'relating to a price, route, or service of an air carrier,' which includes the Plaintiff travel agencies as 'indirect air carriers.' The Florida law directly impacts the services and prices of these carriers, thus falling squarely within the scope of express preemption. The law also impermissibly burdens foreign and interstate commerce, interfering with the federal government's power to speak with one voice on matters of foreign relations.



Analysis:

This decision strongly reinforces the doctrine that states may not create their own foreign policy, even under the guise of consumer protection laws. It affirms that the federal government's power over foreign affairs and foreign commerce is exclusive and will preempt conflicting state legislation. The ruling solidifies the broad preemptive scope of the Airline Deregulation Act over 'indirect air carriers' like travel agencies. This case serves as a significant barrier to other states that might consider enacting similar laws to impose state-level sanctions on businesses that deal with foreign nations disfavored by state legislatures.

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