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Fluid Dynamics Holdings LLC v. City of Jacksoville

United States District Court, M.D. Florida, Jacksonville Division

August 29, 2017

FLUID DYNAMICS HOLDINGS LLC, A Delaware Limited Liability Company, Plaintiff,
CITY OF JACKSOVILLE, et al., Defendants.



         Is JEA, the City of Jacksonville's independent electric authority, entitled to sovereign immunity such that Florida Statute § 768.28, which governs tort claims against governmental entities, applies to tort actions against JEA? The answer is yes.

         This case is before the Court on Defendant JEA's Motion for Partial Summary Judgment on the Affirmative Defense of Sovereign Immunity (Doc. 53), to which Plaintiff Fluid Dynamics Holdings LLC has responded (Doc. 56). With the Court's permission, JEA filed a reply (Doc. 59), and Fluid Dynamics filed a sur-reply (Doc. 60). On January 3, 2017, the Court held a hearing on this issue, (See Docs. 46, 47, 54), the record of which is incorporated by reference.

         I. BACKGROUND

         According to its Complaint, Fluid Dynamics manufactured the “Precision Flow System, ” a product engineered to “[conserve] water and substantially [reduce] water bills.” (Doc. 1 ¶ 13). Mid-America Apartment Communities, Inc. (“MAA”) entered into an agreement with Fluid Dynamics to place Precision Flow System valves on some of MAA's properties. (Id. ¶¶ 16-17). Under this agreement, Fluid Dynamics installed Precision Flow System valves on eight MAA properties in Jacksonville, Florida. (Id. ¶ 17). Both the City of Jacksonville and JEA knew that Fluid Dynamics installed these valves at MAA properties. (Id. ¶ 18).

         In November 2012, JEA discovered that Fluid Dynamics installed two Precision Flow Systems on fire lines at MAA properties. (Id. ¶ 21). On December 3, 2012, representatives of JEA, Fluid Dynamics, and MAA met to discuss what to do about the Precision Flow System valves installed on fire lines, and Fluid Dynamics “agreed to remove its installations from the two fire lines.” (Id. ¶¶ 22-25).

         The next day, First Coast News, a Jacksonville news outlet, published a negative story about MAA, Fluid Dynamics, and the Precision Flow System. (Id. ¶ 26). The story was titled “Apartment Company's Efforts to Trim Water Bills could be Putting Jacksonville Tenants in Danger.” (Id.). In the story, JEA accused Fluid Dynamics of “meter tampering” and stated that the Precision Flow System “can be a safety issue in the case of a fire.” (Id. ¶¶ 28-29).

         The news story damaged Fluid Dynamics' business relationship with MAA. (Id. ¶¶ 37-41). After it aired, MAA terminated its contract with Fluid Dynamics and removed all previously installed Precision Flow System valves from MAA's properties in Jacksonville. (Id. ¶ 37). Shortly thereafter, the City of Jacksonville provided a multimillion dollar incentive and subsidy package to MAA. (Id. ¶¶ 39-40).

         Fluid Dynamics also alleges that JEA interfered with Fluid Dynamics' business relationship with Saint John's County, Florida. (See id. ¶¶ 87-94). In January 2013, Fluid Dynamics agreed to sell the Precision Flow System to St. John's County. (Id. ¶¶ 87-94). Fluid Dynamics alleges that when JEA learned of this relationship, JEA “threatened to remove municipal and utility cooperation and assistance from St. John's County if St. John's County continued its business relationship with” Fluid Dynamics. (Id. ¶ 61)

         Fluid Dynamics alleges that JEA made defamatory statements about Fluid Dynamics and the Precision Flow System (Count I); that JEA tortiously interfered with Fluid Dynamics' contractual relationship with MAA (Count II); and that JEA intentionally interfered with Fluid Dynamics' business relationship with St. John's County (Count III). (Id.). On January 2, 2017, after the Court set a hearing on JEA's Motion for Protective Order (Doc. 46), [1] JEA moved for partial summary judgment on the affirmative defense of sovereign immunity. (Doc. 53). JEA seeks a dispositive ruling to determine whether it “is immune from tort liability except to the extent that it is waived in Fla. Stat. § 768.28.” (Id. at 2).

         II. ANALYSIS

         A. Sovereign Immunity and Florida Law

         Sovereign immunity is a common law doctrine that developed in medieval England. Cauley v. City of Jacksonville, 403 So.2d 379, 381 (Fla. 1981). The doctrine comes “from the concept that one could not sue the king in his own courts; hence the phrase ‘the king can do no wrong.'” Id. In the United States, both the states and the federal government “fully embraced the sovereign immunity theory.” Id. (citing Restatement (Second) of Torts § 895B, comment a at 400 (1979)). Thus, at common law, “state governments, their agencies, and their subdivisions could not be sued in state courts without state consent.”[2] Id.

         In 1973, the Florida legislature enacted section 768.28, Florida Statutes, waiving “sovereign immunity for liability for torts.” Fla. Stat. § 768.28(1). The statute's waiver specifically applies to “the state or any of its agencies or subdivisions.” Id. The statute provides that “state agencies or subdivisions include . . . independent establishments of the state, including . . . counties and municipalities; and corporations acting primarily as instrumentalities or agencies of the state, counties, or municipalities.” Id. § 768.28(2).[3]

         However, Florida's waiver of sovereign immunity is limited. See Id. § 768.28(5). Tort liability for the state, its agencies, or its subdivisions “shall not include punitive damages or interest for the period before judgment.” Id. Neither will the state, its agencies, nor its subdivisions “be liable to pay a claim or a judgment by any one person which exceeds the sum of $200, 000.” Id.[4] Therefore, a plaintiff who pursues a tort claim against Florida or one of Florida's ...

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