Issue 17: June 23, 2008
Topic 1: The Drilling Debate
Last week, lawmakers and voters across the country discussed the possibility of lifting both the federal ban on offshore drilling and exploring oil reserves in Alaska’s Arctic National Wildlife Refuge (ANWR). With oil reaching $135 per barrel ($68 more than last summer), President Bush called on federal lawmakers to consider all options, and both Presidential nominees weighed in on the issue.
Senator McCain called for lifting the federal moratorium that prohibits offshore drilling, allowing states to choose whether or not to permit exploration. The Senator also renewed his call for a federal gas tax holiday to help low income Americans through the summer months. Senator Obama, visiting Florida last week, expressed his support for maintaining the federal moratorium, arguing that drilling off of Florida’s coast will not provide any near term relief at the pump.
Governor Crist, Senator Martinez and many of Florida’s 25-member congressional delegation voiced their support for lifting the ban in favor of allowing individual states to make the call. State lawmakers initially appear less willing. If the federal ban is lifted, it would take an action by the Florida Legislature to allow drilling to begin off Florida’s shores.
Senator McCain’s proposal comes at a time when our dependence on foreign oil has increased our trade deficit and weakened the dollar. Petroleum payments comprise 41 percent of the nearly $800 billion U.S. trade deficit. Taking control of the price of oil for the short term is necessary to implement a long term energy policy that will reduce and hopefully someday eliminate our dependence on foreign oil.
With the high price of oil has come increased demand for exploration across the world, tying up oil rigs capable of reaching deep water oil reserves and increasing operational costs for existing rigs. The New York Times reported this week that the world’s existing drill ships are booked for the next five years, and companies are postponing exploration while waiting for a drilling rig. While the demand for ships has spurred ship construction, one wonders if new exploration is even logistically possible in the near or medium term?
Bottom Line: The people of Florida and America, are suffering with gasoline at $4 a gallon and moving higher. Public officials have a responsibility to respond to problems vexing their constituents, even if it means changing course from a prior position. No Governor in Florida’s history has a better environmental reputation than Governor Crist. His record in public life has earned him the benefit of the doubt from the environmental community that any proposal to allow drilling off of Florida’s coast will be safe and will protect Florida.
Look for the Governor’s Climate Change Summit, this week in Miami, to switch the energy conversation back to a more well-rounded debate on the challenges and opportunities facing Florida’s energy future. Exploration of all options for relief in the short term, as well as diversification in alternative and renewable energy strategies for the long term, is the key to solving this crisis.
Topic 2: Florida’s Fortune 500 Companies
CNNMoney.com has released an interesting breakdown of the 2008 Fortune 500 companies, of which Florida is home to 14. Clearwater’s Tech Data holds the state’s highest ranking at 105. Tech Data is one of the world's largest distributors of technology products with over $23 billion in revenue.
Publix Super Markets, headquartered in Lakeland, ranked 107, Ft. Lauderdale’s AutoNation ranked 138, Office Depot of Delray Beach ranked 164, and FPL Group of Juno Beach rounded out Florida’s top five on the list, coming in at 168.
Additionally, Fortune interviewed 100,000 employees from 406 different companies to determine the top 50 companies to work for. Google ranked first, with Starbucks, Smuckers, Adobe Systems, AFLAC, CarMax, and Nordstrom also making the list. JM Family Enterprises, a Deerfield Beach Toyota distributor, ranked 23rd on the list.
Florida tied with North Carolina at number 11 among states with the largest number of Fortune 500 companies. Texas (58), New York (55) and California (52) were the top three.
Bottom Line: When Fortune’s list is expanded to include the top 1000 companies, Florida is home to 33. However, for the fourth largest state by population, Florida’s lack of any top 100, let alone top 50, companies should provide further encouragement to Florida’ elected officials to stress economic development and job growth. Government efforts to create tax incentives for companies to locate and expand in the Sunshine State should help Florida grow, recruit and retain America’s largest companies.
Topic 3: Salmonella Scare
Which state is the largest producer of tomatoes? You may have not guessed Florida. Florida ranks number one in tomato production, and tomatoes are Florida’s largest vegetable crop. The Food and Drug Administration (FDA) recently issued a warning to consumers nationwide that an outbreak of an uncommon type of salmonella had been linked to some raw red plum, red Roma, round red tomatoes, and other products containing these types of raw tomatoes.
FDA investigators have begun the arduous task of tracing the origin of the tomatoes eaten by hundreds of people, most recently 552, who had reported cases of salmonella. In order to determine farms associated with the outbreak, investigators must first determine at which local retailer an infected tomato was purchased, and then follow the line of distribution backwards to the farm at which the tomatoes were actually grown.
The FDA opined last week that the tomatoes in question originated in Florida and Mexico, and sent teams into Florida over the weekend to further isolate the infected tomatoes. As of this past weekend, the FDA admitted error on Mexico as the origin. The FDA has looked less than stellar in its directive to protect the American food supply stirring CNN commentator Lou Dobbs to conclude on his Sunday evening program that grounds for impeachment exist for President Bush’s failure to properly staff the agency.
Tomatoes grown in Jackson, Gadsden, Leon, Jefferson, Madison, Suwannee, Hamilton, Hillsborough, Polk, Manatee, Hardee, DeSoto, Sarasota, Highlands, Pasco, Sumter, Citrus, Hernando and Charlotte Counties have been cleared for consumption, provided they receive a certificate issued by the Florida Department of Agriculture and Consumer Services. Cherry tomatoes, grape tomatoes, and tomatoes with the vine still attached have not been linked to the salmonella scare. In total, more than $40 million of tomatoes will be lost due to the salmonella scare.
Bottom Line: The salmonella scare comes during already tough economic times for Florida, a state reliant on income generated from agriculture. The effects of such a scare can be more long-lasting than the initial impact, as weakened consumer confidence in Florida’s agricultural products could reach millions more than those affected by the salmonella. Hopefully, the FDA will find the source of the infestation this week, and if not Florida, can clear her good name.
Topic 4: Crime in the Sunshine State
FloridaPerforms.com, the state Website designed to provide a running scorecard on a broad range of issues and initiatives that reflect trends in key area of concern in the Sunshine State, lists crime slightly on the rise.
A well-rounded view of the issue indicates that the crime rate is holding steady after bottoming out at a 36-year low. The crime rate is derived from the number of Part I offenses reported for each 100,000 unit of the state’s population. Part I offenses include murder, violent sex offenses, robbery, aggravated assault, burglary, larceny and motor vehicle thefts. In Florida, violent crimes comprise about 15 percent of total crime, only slightly higher than the national rate of 13 percent.
An interesting story in the July/August issue of The Atlantic magazine has one explanation of rising crime rates across America. According to research, an unfortunate causality exists between the demolition of urban public housing projects and the spread of crime into suburbia, where former tenement residents take Section 8 rent subsidy vouchers into historically low crime neighborhoods.
Crime rates are also affected by the economy and job availability, with crime routinely increasing as the economy declines and unemployment rises. Last week, the Agency for Workforce Innovation announced that Florida’s seasonally adjusted unemployment rate for May 2008 is 5.5 percent, representing 512,000 jobless out of a labor force of 9,261,000. The agency noted that Florida’s May 2008 unemployment rate is the highest since January 2003, with the state’s rate now equal to the national unemployment rate.
Bottom Line: Despite a small uptick in crime, Florida leaders continue to proactively address the situation. The Governor’s Anti-Murder Bill and Attorney General McCollum’s efforts to fight child predators and gangs continue to keep the level of crime at historic lows. Additionally, even in a tight budget year, the Florida Legislature approved a plan to add more than 10,000 prison beds, ensuring that inmates continue to serve at least 85 percent of their sentences.
Topic 5: Supreme Court on Allstate
A few weeks ago, the LeMieux Report noted that the battle between Allstate Insurance Company and the Office of Insurance Regulation (OIR) had subsided as Allstate signed an affidavit certifying that the company had fully complied with the state's request for documents related to an investigation aimed at uncovering why the company's rates had not dropped following the insurance reforms passed in early 2007.
Until now, judicial review of the case had reached the First District Court of Appeal, which held that OIR has the authority to suspend Allstate from conducting new business in Florida for failing to produce documents under subpoena. When OIR lifted the ban that prohibited Allstate from writing insurance in Florida, further judicial review of the case became moot for the time being.
Last week the Florida Supreme declined to accept jurisdiction in an order of dismissal. In denying the petition to review, the Court wrote that no motion for rehearing will be entertained at this level.
Bottom Line: With the Florida Supreme denying review of the case, the ruling of the First District Court of Appeal will stand. The decision confirms that the Office of Insurance Regulation has full access to insurers’ books and records in its efforts to protect consumers.
Sustainability Column
Climate change and sustainability law is undoubtedly emerging as the new direction for environmental law in Florida. This is the first of a new monthly series by the LeMieux Report, authored by Luna E. Phillips, an environmental and law use attorney of counsel to Gunster Yoakley. The column is focused exclusively the emerging role of sustainability, climate change and other related environmental initiatives and their legal, policy and economic impacts to Florida’s environment and economy.
Last year brought unprecedented attention to the emerging issues of climate change and sustainability, not only in Florida, but also across the nation. Many are wondering whether the heightened focus on climate change is just a passing fad or if we are witnessing the start of a revolutionary new era in the environmental field.
Click here to read more.
Click here to download a printable pamphlet on Gunster Yoakley’s Climate Change and Sustainability Team.
Things to Watch
Who’s on the ballot?
This past Friday was the deadline for candidates to qualify for elected state office. To see who qualified, who is unopposed, and how much has been raised or spent in contested elections, go to On 3 Public Relations’ new Website.
Age Discrimination
The United States Supreme Court ruled that employers have the burden of proof when laying off older workers. In a 7-1 ruling, Justice Souter wrote that the language of the Age Discrimination in Employment Act of 1967 indicates that Congress intended the burden to be on the employer.
Civil Rights
At the Florida Restoration of Civil Rights Summit last week, Governor Crist announced that the Florida Department of Corrections and Florida Parole Commission have completed a review of all pre-2008 cases of ex-offenders eligible for automatic restoration of civil rights. Since Governor Crist introduced a change to the Rules of Executive Clemency last April, 115,232 individuals have had their civil rights restored. More than half of all the individuals who have had their rights restored during the past 14 years have done so in the past 14 months, streamlining the process has helped eliminate a backlog in the system, enabling government to operate more efficiently.
Supreme Court to Rule on Ballot Access
Florida’s Supreme Court will hear arguments regarding ballot access for two citizen initiatives. One sets standards designed to prevent gerrymandering in legislative redistricting, while the second limits annual property taxes to 1.35 percent of the highest value, a petition advocated by Florida House Speaker Marco Rubio. As of now, neither amendment will be placed on the ballot until 2010, unless courts rule in favor of a challenge against this year’s February 1st petition deadline.
