By Tracy M. Evans, Esq., Associate, Saxon Gilmore & Carraway, P.A.
Published in FAHROGRAM, November/December 2017
Under Florida law, housing authorities can claim limited sovereign immunity as instrumentalities of the state. Housing authorities are expressly authorized by statute to create for profit or not for profit corporate entities to develop, acquire, lease, construct, rehabilitate, manage or operate multifamily or single-family residential projects. The question of whether a housing authority’s corporate entities can also claim limited sovereign immunity has not yet been directly addressed by the Florida Legislature or the judiciary. Recent case law supporting the extension of limited sovereign immunity to statutorily authorized entities created by the state, its subdivisions or agencies, may have equal application to a housing authority and its corporate entities. This case law could be used to support an argument that corporate entities created by a housing authority to fulfill its public purpose should also receive limited sovereign immunity.
In Keck v. Eminisor, 104 So.3d 359 (Fla. 2012), the Florida Supreme Court determined the issue of whether an employee of a transit management corporation (the “Management Corporation”), wholly controlled by a transit authority (the “Authority”), was entitled to limited sovereign immunity. It was undisputed that the Authority was an independent establishment of the state entitled to limited sovereign immunity, but the question was whether the Management Corporation, as an instrumentality of the Authority, could also be considered an instrumentality of the state. The Court determined that because the state acts through its agencies and independent establishments, a corporate instrumentality of an agency or independent establishment must also be an instrumentality of the state. Because the Management Corporation was determined to be an instrumentality of the state, its employee was entitled to individual sovereign immunity for acts performed within the scope of her employment.
In the case of Pagan v. Sarasota County Public Hosp. Bd., 884 So.2d 257 (Fla. 2d DCA 2004), the governing board of a hospital district (the “Hospital Board”) created a physicians group (the “Physicians Group”) that operated as a nonprofit corporation and provided medical services to the public. The Hospital Board, which had limited sovereign immunity under Florida law, created the Physicians Group under the Hospital Board’s express statutory authority to establish, operate or support subsidiaries and affiliates to assist the Hospital Board in fulfilling its public purpose. As a result of a malpractice lawsuit filed against the Physicians Group and several of its physicians, the Hospital Board, the Physicians Group, and the physicians filed a separate declaratory judgment, seeking a definitive ruling that the Physicians Group and its physicians were entitled to limited sovereign immunity as a matter of law, as an instrumentality of the Hospital Board. The trial court determined that the Physicians Group and its employees had sovereign immunity because the Hospital Board created the Physicians Group and had structural control over the group. The appeals court affirmed the trial court’s ruling, but clarified that the ruling was restricted to the Physicians Group and the one doctor who remained active in the declaratory judgment action, and declined to extend the ruling to all employees of the Physicians Group because they were not parties to the declaratory judgment action.
More recently, in the case of Plancher v. UCF Athletics Ass’n, Inc., 175 So.3d 724 (Fla. 2015), the Florida Supreme Court addressed the question of whether a direct-support athletics association (the “Association”) was entitled to limited sovereign immunity as an instrumentality of a state university (the “University”). In determining the Association was entitled to limited sovereign immunity, the Court looked at several factors which established that the University had sufficient control over the Association’s day-to-day operations. These factors included the University’s right to control the Association’s board of directors, the University’s sole authority to dissolve the Association, the University’s right to control the Association’s operations and activities, the University’s control of the Association’s budget and finances, and pursuant to state law, the Association’s inability to pursue financing mechanisms without University approval.
While the above case law does not address the issue directly in the context of a housing authority and its corporate entities, these holdings could be equally applicable. A housing authority may be able to successfully argue that its statutorily authorized corporate entities created to fulfill its public purpose, over which it maintains sufficient control, are entitled to the same limited sovereign immunity granted to the housing authority under Florida law. However, until such time that the Florida Legislature or the judiciary directly addresses the issue, a corporate entity seeking to apply these arguments and claim sovereign immunity as an instrumentality of the housing authority should always consult with its general counsel.
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