Court Probes Federal Preemption in Test of Florida Property Ban

An appeals court panel’s consideration of the legality of Florida legislation restricting property purchases by Chinese immigrants focused on its potential clash with federal law and whether the plaintiffs had standing to sue.

During oral arguments over the law (SB 264) at the US Court of Appeals for the Eleventh Circuit on Friday, Judge Charles R. Wilson, a Clinton appointee, asked whether Florida was arguing that every state could adopt its own restrictions on foreign property investment.

Plaintiffs, including H-1B specialty occupation visa holders, say the law interferes with the president’s ability to set foreign policy and discriminates based on national origin in violation of the Fair Housing Act and Equal Protection Clause.

“The problem that I’m having is the district court seems to make a distinction between national security and foreign affairs,” Wilson said. “It seems to me that national security is even more a prerogative of the president.”

But SB 264 “reflects a limited effort on a particular basis,” said Nathan Forrester, senior deputy solicitor general at the Florida Office of the Attorney General, who argued on behalf of the state.

The case presents the biggest legal test so far for a recent flurry of state legislation restricting land ownership by foreign individuals or entities. Florida is one of 16 states that enacted such laws last year, and lawmakers introduced bills to regulate foreign property ownership in another 20 states, the Congressional Research Service found.

The Florida law prohibits noncitizens whose “domicile” is in China from purchasing any property in the state with limited exceptions. Less restrictive bans also apply to immigrants from several other “countries of concern:" Cuba, Venezuela, Iran, North Korea, Syria, and Russia.”

A group of potential homebuyers sued over the law, and a federal district court denied an injunction request last year. A separate Eleventh Circuit panel earlier this year approved a limited injunction for two of the plaintiffs.

But the lower court relied on 1920s case law that’s been superseded by subsequent rulings, Ashley Gorski, senior staff attorney at the American Civil Liberties Union and attorney for the plaintiffs, told the Eleventh Circuit panel Friday. SB 264 goes even further than that case, Terrace v. Thompson, in its explicit discrimination, she said.

“This case involves a state law that in an extraordinary way singles out individuals from certain foreign countries,” she said.

Judge Robert J. Luck, a Trump appointee, pressed Gorski on whether the immigrant plaintiffs should be considered “domiciled” in China.

Several of them, Luck said, “in one form or another seem to indicate a plan, a hope, an intent—and actually in some cases acts—of indefinite or permanent residence here, correct?” If they shouldn’t be considered domiciled in China as a result, they would lack standing to challenge the law.

But a subjective hope for permanent residency"doesn’t translate into the ability to form the requisite legal intent,” Gorski said. Multi-Choice Realty LLC, a real estate agency that also joined the legal challenge, has customers who are indisputably domiciled in China, she said.

The appeals panel also included Trump appointee Barbara Lagoa.

The case is Shen v. Comm’r Fla. Dep’t of Agric., 11th Cir., No. 23-12737, oral arguments 4/19/24.