Hirzel Dreyfuss & Dempsey, PLLC
NEWS AND INFORMATION
A Title III Trial in Miami Shows What the Supreme Court's Two Rulings Actually Unlocked
The short answer
A Helms-Burton Title III case went to trial in Miami federal court in late August 2026 against a travel booking company, over hotel reservations on Cuban land confiscated from the plaintiff's family in 1960. It is the second such trial against that defendant in eighteen months. This is what the Supreme Court's May and June decisions look like on the ground.
What happened
The New York Times reported that Mario Echevarria, now ninety-one, is seeking damages against Expedia Group for failing to obtain his permission when reserving rooms in hotels built on Cayo Coco, a cay off Cuba's north coast where his father ran a cattle and charcoal business before the property was confiscated in 1960. Asked at trial who had authorized the bookings, he testified that authorization came from "the dictatorship."
Expedia's position, as reported, is that the company believed it was acting lawfully. It entered Cuba in 2017, after the Obama administration issued rules permitting American hotel chains to operate there. The Times describes the case as one of a surge of claims by Cuban families over assets confiscated since 1959, and reports that dozens of such suits have been filed since the right to sue was restored in 2019.
Our take: the defendants are ordinary companies, and the defense is reliance
Two things about this case deserve attention from anyone assessing exposure.
The defendant profile. The public conversation about Helms-Burton tends to focus on the Cuban government and its state enterprises. The litigation does not. The defendants are American companies that made commercial decisions during a period of federal encouragement: cruise lines that docked in Havana, hotel operators, and now a travel booking platform that never touched Cuban soil at all. The alleged trafficking is the reservation, not the occupation.
The defense is reliance, and its strength is now the central question. Every one of these defendants entered Cuba under authorizations issued by the United States government during the 2016 to 2019 opening. Title III excludes uses of property "incident to lawful travel to Cuba," and the Supreme Court's May remand in the cruise line case put that exclusion squarely before the lower courts. How it is construed will do more to determine outcomes across this docket than either of the two decisions the Court has already issued.
The candid point is that reliance on a federal authorization is not obviously a defense to a private statutory claim. The authorization permitted the transaction under the sanctions regime. It did not purport to extinguish a private right of action Congress created in 1996 and left dormant. Defendants will argue the two cannot be squared. Plaintiffs will argue Congress wrote a specific exclusion and courts should not enlarge it. That is a genuinely open question, and a defendant who assumes the answer is favorable is making an expensive assumption.
Note also what a second trial against the same defendant in eighteen months tells you. These claims are not consolidating into a single global resolution. They are being tried family by family, property by property, which means the cost of defense is a function of the number of claimants rather than the number of properties.
What it means practically
If your company had commercial contact with Cuban property during or after the 2016 opening, the questions to answer now, before a demand letter arrives, are what property was involved, whether a certified claim exists against it, what federal authorization you relied on, and whether you can document that reliance contemporaneously. Certification matters because it drives treble damages, and documentation matters because the reliance defense is only as good as the record supporting it.
When to call a lawyer
Before responding to a Title III demand. These claims can carry enhanced damages, but not automatically. Under 22 U.S.C. 6082(a)(3), the enhanced measure applies where the claimant holds a claim certified by the Foreign Claims Settlement Commission, or where the claimant gave the statutory written notice at least 30 days before suit and the defendant continued trafficking after that period. Even then the statute trebles the value of the claim and adds the interest component rather than trebling the whole figure. Which route applies changes the exposure substantially, so establish it before pricing the demand.
Sources
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
UPDATE, September 10, 2026. This post was published while the trial described below was underway. The jury returned a verdict for Expedia on August 31, 2026. According to reporting on the verdict, the jury found that the claimants had not proved ownership of the confiscated land, and therefore never reached the defense that the bookings were incident to lawful travel authorized by the federal government. The significance of the outcome is that the case turned on proof of title rather than on whether booking hotel rooms constitutes trafficking. A claim certified by the Foreign Claims Settlement Commission is conclusive proof of ownership and amount by statute; an uncertified claimant must prove ownership of Cuban property as it stood in 1960. That evidentiary burden, rather than the merits of the trafficking theory, is what decided this case. The analysis below remains accurate as to the law; the reliance defense discussed in it is still undecided and is pending on remand in the cruise line litigation.
The Question the Supreme Court Did Not Answer Is the One That Decides the Cruise Line Cases
The short answer
When the Supreme Court decided the Havana Docks case in May, it resolved what counts as confiscated property and left three defenses undecided. The most important is whether use of confiscated property incident to lawful travel to Cuba is excluded from liability. That question is now before the Eleventh Circuit on remand, and it, not the Supreme Court's holding, will determine whether roughly $439 million in judgments is ever collected.
Why it comes up
Between 2016 and 2019, American companies entered Cuba under federal authorizations issued during a deliberate opening of relations. Cruise lines docked in Havana. Hotel and booking platforms sold rooms. Those authorizations are the entire factual predicate for the largest Title III cases now pending, and Congress wrote an exclusion into the statute for uses of property incident to lawful travel to Cuba.
What the Supreme Court did and did not decide
The Court held, 8 to 1, that Title III reaches the confiscated property itself and not merely the claimant's interest in it, so the expiration of Havana Docks' 1905 concession in 2004 did not defeat liability. Justice Thomas wrote for the Court. Justice Sotomayor concurred, joined by Justice Kavanaugh, flagging the arithmetic of a certified loss of roughly $9 million producing recoveries measured in the hundreds of millions. Justice Kagan dissented alone.
Justice Thomas expressly reserved the lawful travel question, noting that the cruise lines had argued their use of the docks fell within the exception for uses of property incident to lawful travel, and that the district court had rejected that argument based on the general ban against travel to Cuba for tourist activities. The judgment was vacated and the case remanded to the Eleventh Circuit. The Court's judgment issued June 22, 2026, and the record was returned to the Southern District of Florida on August 5, 2026.
Our take: this is the heart of the case now
Nearly everything else in the cruise line litigation has been decided against the defendants. The principal unresolved question is one of statutory construction that has never been resolved by an appellate court, and the stakes could not be more lopsided: if the exclusion applies, the judgments disappear entirely.
The competing readings are both serious.
The claimants' reading is that Congress wrote a narrow exclusion for travel, that a cruise line's commercial use of a pier is not travel by the cruise line, and that reading the exclusion broadly would let any company launder trafficking through a licensed travel program.
The defendants' reading is that the United States government affirmatively authorized precisely this conduct, that the exclusion exists to protect people and companies operating under those authorizations, and that imposing treble damages for doing what federal regulators permitted is not a result Congress intended.
Our own view is that the defendants have the better of the equities and the harder textual argument. The exclusion is written in terms of uses of property incident to lawful travel, and a cruise line docking to disembark authorized travelers is a plausible fit. But the district court has already rejected it once, and the Eleventh Circuit has not been notably receptive to Title III defendants this year.
Two other defenses also survive for the remand: whether the concession was nonexclusive and limited to cargo services, and other defenses not reached below.
What it means practically
If your company operated in Cuba during the 2016 to 2019 opening, preserve now, in an organized form, every federal authorization you relied on, every legal opinion you obtained, and the contemporaneous record showing what you understood the authorization to permit. That record is the reliance defense, and it is worth nothing if it cannot be produced.
When to call a lawyer
Before responding to a Title III demand, and before assuming that a federal authorization resolves the question. It has not been resolved.
Sources
● Havana Docks Corp. v. Royal Caribbean Cruises, Ltd., No. 24-983, Supreme Court docket
● Havana Docks Corp. v. Royal Caribbean Cruises, Ltd., opinion via Justia
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
Two Florida Restaurant Franchisees, Two Chapter 11 Filings, One Pattern Worth Understanding
The short answer
Two large Florida restaurant franchisees filed Chapter 11 in the Southern District of Florida within seven months of each other. Sailormen Inc., a Miami based Popeyes franchisee with 136 locations, filed January 15, 2026. Quality Fresca I, a Palm Beach based Moe's Southwest Grill franchisee, filed August 4, 2026. Neither case is unusual on its facts. Both illustrate how quickly a franchisee's Chapter 11 converts from a reorganization into a sale, and what that means for the landlords, vendors and franchisors left behind.
Why it comes up
Franchisee bankruptcies rarely stay reorganizations. A franchise agreement is an executory contract, and a franchisee's ability to assume its own franchise agreement is constrained in ways that a typical debtor's contract rights are not. That structural fact pushes distressed franchisees toward a sale of the going concern rather than a stand alone plan, and it pushes creditors toward a compressed timeline.
What happened
Sailormen. Court filings reported by Franchise Times put liabilities at $342 million against $232 million in assets, with BMO Bank owed $112 million in unpaid principal plus $17 million in interest and fees. Sailormen attributed its position in part to a failed 2023 sale of sixteen Georgia restaurants. By June, an auction had produced buyers for 97 of the 136 locations, and 52 had drawn no bidder. Nation's Restaurant News reported the results: Pulse Restaurant Group took 50 locations for $2.69 million, RFI Ventures 23 for $2.5 million, Popeyes corporate 16 Miami area locations for $9.6 million, 61 Biscuits three West Palm Beach locations for $1.11 million, and SBH Foods five in Savannah for $650,000. The USA Today Network reported that a June 27 order extended the list of locations to be vacated to 22, with a June 30 deadline, and quoted the debtor's filing that the unsold stores "now constitute a burden on the Debtor's estate."
Quality Fresca. The Real Deal reported the petition listed liabilities between $10 million and $50 million, assets between $1 million and $10 million, and 200 to 999 creditors. Approximately $16 million is owed to secured lender GR Loanco 1, which holds liens on all assets. Revenue was $58.9 million last year and $26.4 million through mid June. Among the first day motions was a request to reject the leases at sixteen closing locations retroactive to the filing date, affecting centers owned by Brixmor, Regency Centers, Publix and Benderson. Fast Company published the full closing list, fourteen in Florida plus one each in Virginia and Georgia.
Our take: the auction is the case
Read the two dockets together and the same shape appears. A first day motion rejects the leases at the locations nobody will buy. An auction runs on a short timeline. The going concern locations transfer. The unsold locations become rejection damages claims, and the landlords who held those leases move from collecting rent to standing in line as general unsecured creditors.
Two observations that follow, neither of which is obvious from the headlines.
First, the franchisor is a bidder, not a bystander. Popeyes corporate paid $9.6 million for sixteen Miami area locations, which is more than three of the four other buyers paid combined for far more units. A franchisor that wants to protect a market will buy into it, and that changes the auction dynamics for everyone else.
Second, insider affiliated purchasers are common and are not automatically improper. Nation's Restaurant News reported that Pulse Restaurant Group, which acquired 50 locations, was established by Sailormen's chief executive. That structure invites scrutiny under the Bankruptcy Code's provisions governing sales to insiders, and creditors who intend to object need to be organized before the bid procedures order, not after the auction.
What it means practically
● If you are a landlord, the window to protect yourself is the first day motions, not the claims bar date. Rejection is frequently sought retroactive to the petition date, which affects the administrative rent you can recover.
● If you are a vendor, examine payments received in the ninety days before filing. Preference exposure in these cases is real and it arrives long after the case appears to be over.
● If you are a franchisee considering a filing, understand before you file that your franchise agreement may not be yours to keep.
● If you are a franchisor, decide early whether you intend to consent to an assumption and assignment, because that decision drives the entire sale process.
When to call a lawyer
The moment a franchisee in your system stops paying, or the moment you receive a bankruptcy notice naming a tenant, customer or franchisee. Nearly every meaningful right in these cases is exercised in the first thirty days.
Sources
● Franchise Times, 136-unit Popeyes franchisee files for bankruptcy (January 16, 2026)
● The Real Deal, Moe's Southwest Grill franchisee bankruptcy to close stores (August 6, 2026)
● Fast Company, Moe's Southwest Grill closing locations, full list (August 10, 2026)
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
Bidding on a Competitor's Trademark Is Not Infringement. What You Put in the Ad Still Is.
The short answer
On August 4, 2026, the Eleventh Circuit held that buying a competitor's trademark as a search keyword cannot by itself support an infringement claim, because consumers never see the purchase. It affirmed a disgorgement award of more than $12.1 million on the visible uses, reversed a false advertising verdict that had never been pleaded, and vacated the actual damages award. All three holdings are useful, and the reason for each is worth understanding.
Why it comes up
Competitive keyword advertising is standard practice and it generates a steady stream of demand letters. Businesses receive them, panic, and either stop a lawful practice or keep doing something genuinely unlawful because the letter did not distinguish between the two.
What the court held
The case arose from a dispute over the mark "Battery Tender," tried in the Middle District of Florida.
On keyword bidding. Purchasing a competitor's mark as an invisible ad keyword is not infringement standing alone. The consumer never sees the purchase, only the resulting advertisement. Visible use of the mark in the resulting listings and advertisements was infringing.
On genericness. The mark was not generic. Registration created a presumption of validity, and the record showed descriptiveness plus secondary meaning.
On disgorgement. The court affirmed $12,135,943.70 on a finding of willfulness, resting heavily on the defendant's internal communications acknowledging that it could not use the mark in its messaging.
On false advertising. The verdict was reversed because the theory was never pleaded and the defendant never consented to try it.
On actual damages. The award of roughly $1.3 million was vacated because the lump sum could not be separated from theories that had now failed.
Our take: the money came from the emails
The disgorgement figure is the part that will get attention, and the reason for it is the part worth acting on. Willfulness was established by the defendant's own internal communications. The company knew it could not use the mark and used it anyway, and it wrote that down.
That is how nearly every large trademark award happens. Liability is usually a close question. Willfulness usually turns on a document. It is not a precondition to disgorging the infringer's profits: in Romag Fasteners, Inc. v. Fossil, Inc., 590 U.S. 212 (2020), the Supreme Court held that a plaintiff need not show willful infringement to obtain a profits award under 15 U.S.C. 1117(a) for a section 1125(a) violation. The defendant's mental state remains a highly important equitable consideration, and in practice it is decided by what is in the emails. Any business running a competitive advertising program should assume that its internal discussion of a competitor's mark will be read to a jury.
Two other lessons are less dramatic and more likely to matter to an ordinary case.
Plead your theories separately. A false advertising claim under a different subsection of the statute is a different claim from infringement. Trying it by implication and winning is not the same as pleading it, and the Eleventh Circuit will not save it.
Do not put your damages theories in one bucket. A single lump sum that depends on four theories dies if one of them fails. Ask for separate findings.
What it means practically
For a brand owner: keyword bidding by a competitor is not, by itself, a case in this circuit. Look at what the resulting ad says. That is where the exposure is.
For an advertiser: your keyword program is probably defensible. Your ad copy and your marketplace listings may not be, and your internal emails about the competitor are the highest-risk documents in the file.
When to call a lawyer
On receipt of a keyword advertising demand letter, before changing a lawful program or continuing an unlawful one, and before any internal discussion of a competitor's brand is committed to writing.
Sources
● Deltona Transformer Corp. v. The NOCO Co., No. 24-13590 (11th Cir. Aug. 4, 2026), via Justia
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
You Can Now Sue the Cuban Government. Collecting Is a Different Problem.
The short answer
In June the Supreme Court held that the Helms-Burton Act itself strips Cuban state entities of sovereign immunity, so a claimant need not also satisfy an exception under the Foreign Sovereign Immunities Act. Claimants have already begun using it, including the holder of the largest certified claim against Cuba. But immunity from suit and immunity from execution are different doctrines, and the second one was not disturbed.
What the Court held
In Exxon Mobil Corp. v. Corporación Cimex, S.A., decided June 23, 2026, the Court held 6 to 3, in an opinion by Justice Kavanaugh, that the Act abrogates the sovereign immunity of Cuban agencies and instrumentalities directly. Stacking a Foreign Sovereign Immunities Act requirement on top, the majority reasoned, "would thwart Congress's design," because the embargo would make those exceptions nearly impossible to satisfy, and "Congress does not ordinarily enact self-defeating statutes." Justice Kagan dissented, joined by Justices Sotomayor and Jackson, on the ground that abrogating sovereign immunity requires unmistakable clarity that the statute's text does not supply.
Standard Oil's Cuban assets, later Exxon's, included a refinery, product terminals and 117 service stations, all seized in 1960. An American commission certified the loss at nearly $72 million in 1969.
What has happened since
The case is active again before Judge Amit Mehta in the District of Columbia. The court of appeals recalled its earlier mandate in July and issued a new one on August 28, 2026. Judge Mehta ordered a joint status report and held a status conference on September 9, 2026.
Separately, the holder of the largest certified claim against Cuba filed suit in Washington in late July 2026, seeking roughly $267.6 million plus sixty years of interest at six percent, over the confiscated electric utility.
Our take: the judgment is the easy part
Commentators have identified two obstacles that the decision did not address, and both are serious.
Personal jurisdiction. The Foreign Sovereign Immunities Act contains a mechanism by which proper service establishes personal jurisdiction. If Helms-Burton abrogates immunity without routing through that statute, it is not obvious what supplies personal jurisdiction over a Cuban entity, or how service is accomplished. No court has answered this.
Execution. Sovereign immunity from execution is governed by a separate framework, and the decision did not touch it. Property of a Cuban instrumentality remains largely protected from attachment. A claimant may obtain a judgment and find nothing to levy against.
There is a serious argument that a judgment has value even when it cannot be collected. It is a public adjudication that the confiscation was wrongful, it can be leveraged in any future normalization negotiation, and for families who lost everything it is a record. That is a real reason to litigate. It is not the same as a recovery, and any lawyer who describes it as one is doing the client a disservice.
Layered on top is a sanctions problem. Treasury designated the Cuban state oil company in June 2026, and it is a party in this very case. A blocked counterparty complicates any settlement, because the mechanics of paying or receiving value from a designated entity require their own authorization.
What it means practically
If you hold a certified claim, this decision materially changed what is possible, and the timing question is now live given the two-year limitations period discussed in our post on the threshold questions in every Helms-Burton case. If you are a foreign company operating in Cuba's energy, mining, financial services or security sectors, you should expect to be named alongside Cuban state entities, and you should assume the sanctions and litigation analyses will run together.
When to call a lawyer
Before filing, so the collection analysis is done first rather than last.
Sources
● Exxon Mobil Corp. v. Corporación Cimex, S.A., No. 24-699, Supreme Court slip opinion
● Transnational Litigation Blog, Cimex (June 30, 2026)
● U.S.-Cuba Trade and Economic Council, reporting on the Cuban Electric filing (July 31, 2026)
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
Cuba Exposure Is Now Two Problems at Once, and They Do Not Have the Same Answer
The short answer
In the space of six months the United States built an entirely new Cuba sanctions program on top of the decades-old embargo, designated the state military conglomerate, the state oil company and a publicly traded foreign hotel investor, and authorized tariffs against any country that sells oil to Cuba. For a company with Cuba exposure, the sanctions analysis and the Helms-Burton analysis now have to be run together, and a transaction can be lawful under one and catastrophic under the other.
What changed, in order
January 29, 2026. Executive Order 14380 declared a national emergency and authorized additional duties on imports from any country that directly or indirectly supplies oil to Cuba. Commerce identifies the countries, State recommends the rate.
May 1, 2026. Executive Order 14404 created a new Cuba sanctions program under the International Emergency Economic Powers Act, separate from and additional to the Cuban Assets Control Regulations, authorizing blocking sanctions on foreign persons operating in identified sectors of the Cuban economy including energy, defense, metals and mining, financial services and security.
May 7, 2026. Treasury designated the Cuban military conglomerate GAESA under the new order, tagged the Sherritt joint venture Moa Nickel, and issued Cuba General License 1 so that transactions already authorized or exempt under the older regulations do not become prohibited by the new order. Six guidance items confirmed that the two authorities function in parallel and that being blocked under one does not automatically block a person under the other.
June 11, 2026. Treasury designated the state oil and gas company.
July 23, 2026. Eleven further designations, including a Guernsey-domiciled, publicly traded Cuba hotel and real estate investor, with general licenses authorizing wind-down and securities transactions in that company.
Our take: the two analyses point in opposite directions
Here is the trap, and it is not hypothetical.
The traditional embargo regime is built around authorizations. A company asks whether a transaction is licensed, and if it is, it proceeds. That instinct is correct as far as sanctions go, and it is exactly backwards for Helms-Burton. A federal authorization to do business in Cuba is not an authorization to traffic in confiscated property. Whether it is even a defense is the open question on the Havana Docks remand. Meanwhile the designations are landing on precisely the entities that hold confiscated property, because the Cuban state took that property and put it into these enterprises.
So a company evaluating a Cuban hotel, port, refinery or telecom asset now has to answer two questions that do not have the same answer:
● Is the counterparty blocked, or owned or controlled by a blocked person, and is the transaction authorized?
● Was this property confiscated from a United States national, and does using it constitute trafficking?
A yes to the first question does not resolve the second. The designation of the hotel investor is the clearest illustration: a foreign investor in Cuban hotel real estate is now simultaneously an SDN counterparty and a plausible Title III defendant, and the two exposures have different triggers, different defenses and different remedies.
The doctrinal shift underneath is that sector participation alone now justifies blocking sanctions, which creates a template for future designations across transportation, finance, telecommunications, logistics and mining.
What it means practically
Any company with Cuba contact should be running a combined screen: who owns the counterparty, whether the property has a certified claim against it, what authorization the activity rests on, and whether that authorization is documented contemporaneously. Companies that have run only the sanctions screen have answered half the question.
When to call a lawyer
Before any transaction touching Cuban property or Cuban counterparties, and on receipt of a demand letter, because the two analyses need to be run together and neither one alone is a defense to the other.
Sources
● Executive Order 14380, Federal Register (February 3, 2026)
● OFAC recent actions, May 7, 2026
● OFAC frequently asked questions added May 7, 2026
● OFAC recent actions, July 23, 2026
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
The American Franchise Act Clears Committee, and the Vote Tells You More Than the Bill Does
The short answer
A bill that would fix the federal joint employer standard for franchising cleared the House Committee on Education and Workforce on July 23, 2026, by a vote of 18 to 15. It now goes to the House floor. Franchisors should not change anything yet, because a bill out of committee is not law, and because the vote itself suggests the durable fix the industry wants may not arrive on this pass.
Why it comes up
The joint employer question is the single largest unresolved liability exposure in franchising. It asks when a franchisor becomes legally responsible for the employment decisions of an independent franchisee, and therefore exposed to that franchisee's wage and hour claims, discrimination claims and union obligations. According to Franchise Times, the standard has changed four times in thirteen years, moving with each change in presidential administration. The 2023 rule was struck down in federal court, and the National Labor Relations Board reaffirmed the 2020 standard in February 2024.
That instability is the actual problem. A franchisor cannot build a brand standards program around a test that changes every few years.
What the bill does
The American Franchise Act, H.R. 5267, would codify a control-based test. As reported, a franchisor would be a joint employer only if it "possesses and exercises substantial, direct and immediate control" over essential terms of employment, which the bill identifies as wages, benefits, hours, hiring, discipline, supervision and direction.
Two amendments offered by ranking member Bobby Scott failed, each by 15 to 18. One would have preserved the Board's ability to consider indirect control. The other would have given franchisees a right of action against franchisors. Representatives James Moylan and Virginia Foxx spoke in support of the bill. Representative Scott said it would "radically rewrite" the law and "severely curtail workers' ability to enforce their rights." The International Franchise Association, the American Association of Franchisees and Dealers, and the Coalition of Franchisee Associations support the bill.
Our take: read the vote, not the co-sponsor list
The bill was introduced in September 2025 by Representative Kevin Hern with six Republican and seven Democratic sponsors, and it now carries 142 co-sponsors. That is a genuinely bipartisan face. But the committee vote was straight party line, and both minority amendments failed on the same party line split.
That gap matters, and it is the part of this story worth a franchisor's attention. A statute enacted on a party line vote is a statute that a future Congress can repeal on a party line vote. The industry's complaint is not that the current standard is wrong. The complaint is that the standard keeps moving. A narrowly partisan enactment addresses the first problem and leaves the second one intact.
What it means practically
Nothing about a franchisor's operating posture should change on the strength of a committee vote. The operative standard today remains the Board's 2020 standard, and the practical protections remain the ones a franchisor builds itself:
● Reserve authority over brand standards, which protect the trademark and the customer experience. Recipes, approved vendors, hours of operation and system specifications are ordinarily defensible.
● Leave hiring, scheduling, supervision, discipline and compensation with the franchisee, in the franchise agreement and, more importantly, in actual practice. Courts look at what a franchisor does, not only at what the agreement says it may do.
● Audit the gap between the two. The exposure in most systems is not in the agreement. It is in the field consultant who tells a franchisee to fire someone.
When to call a lawyer
Before a system-wide rollout of any program that touches franchisee personnel practices, and immediately upon service of any charge or complaint naming both the franchisor and a franchisee as joint employers. The pleading stage is where the joint employer question is usually won or lost.
Sources
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
Florida Said Collection Emails Are Fine After 9 p.m. Federal Law Did Not.
The short answer
A 2025 Florida law added one sentence to the state's debt collection statute, exempting email from the prohibition on communicating with a debtor between 9 p.m. and 8 a.m. That is a real change and it eliminates a real category of state-law claims. It does not make after-hours collection emails lawful. For any business that is a debt collector under federal law, the Consumer Financial Protection Bureau's Regulation F still treats an email sent at 11 p.m. as sent at an inconvenient time, and federal law is a floor that state law cannot lower.
Why it comes up
Collection communication has moved to email and text, and the statutes were written for telephone calls. Courts then had to decide when an email "communicates" with someone: when it is sent, or when it is read. Those two answers produce completely different compliance regimes, because a collector controls when it sends and does not control when anyone reads.
Florida's legislature answered the question by removing email from the timing rule entirely. The federal regulator had already answered it the other way.
What Florida did
CS/CS/SB 232 (2025), titled Debt Collection, was sponsored by Senator Ana Maria Rodriguez with committee substitutes from Banking and Insurance and from Commerce and Tourism. The House companion, CS/CS/HB 147, was sponsored by Representative Peggy Gossett-Seidman and was laid on the table in favor of the Senate bill. The Senate passed it 36 to 0 on April 16, 2025 and the House 116 to 0 on April 29, 2025. It was approved by the Governor on May 16, 2025 as Chapter 2025-23, Laws of Florida, and it took effect upon becoming law, which is to say May 16, 2025.
One point of care. The committee analyses of earlier versions state a July 1, 2025 effective date. The enrolled bill changed it. The operative date is May 16, 2025.
What the amendment actually did was add a single sentence to Fla. Stat. 559.72(17). The subsection now reads, in relevant part, that in collecting consumer debts a person may not communicate with the debtor between the hours of 9 p.m. and 8 a.m. in the debtor's time zone without the prior consent of the debtor, and that "This subsection does not apply to an e-mail communication that is sent to an e-mail address and that otherwise complies with this section."
The time-zone presumptions in paragraphs (a) and (b), which are written entirely around telephone calls, are unchanged.
The drafting history is worth one line, because it shows the choice that was made. Earlier versions of the bill would have narrowed the prohibition to telephone calls. The enrolled version abandoned that and instead left the general prohibition on communication intact while carving out a defined class of email. What passed is an email-specific exception, not a telephone-only rule.
Our take: three things this does not do
One. It does not exempt text messages. The carve-out reaches only an email communication "sent to an e-mail address." A text message is not sent to an email address. The general prohibition on communicating with the debtor between 9 p.m. and 8 a.m. continues to cover SMS. Nothing in Chapter 2025-23 changes that, and a business that reads the amendment as a general electronic-communications exemption has misread it.
The statute does not define "e-mail address," which leaves at least one genuine open question: an email sent to a carrier gateway address that arrives on the recipient's phone as a text is literally sent to an email address. No Florida court appears to have construed the new sentence.
Two. It does not exempt the email from the rest of the statute. The carve-out applies only to an email "that otherwise complies with this section." Every other prohibition in Section 559.72 still applies to that email. If it is harassing in frequency, abusive in language, asserts a right the sender knows does not exist, simulates legal process, or goes to a debtor known to be represented by counsel, it remains actionable. The 9 p.m. clock is simply no longer an independent hook.
Three, and this is the one that costs money. It does not displace federal law.
The FDCPA's timing rule at 15 U.S.C. 1692c(a)(1) is not a fixed window. It prohibits a debt collector from communicating at any unusual time or place, or a time or place known or which should be known to be inconvenient to the consumer, and provides that in the absence of knowledge to the contrary the collector shall assume that the convenient time is after 8 a.m. and before 9 p.m. local time at the consumer's location. The hours are a presumption about inconvenience, not the rule itself. A collector with actual knowledge that a different time is inconvenient violates the section even at midday.
Regulation F carries that forward and is medium-neutral. 12 C.F.R. 1006.6(b)(1)(i) prohibits communicating at any unusual time, or at a time the debt collector knows or should know is inconvenient, and provides that in the absence of knowledge to the contrary a time before 8:00 a.m. and after 9:00 p.m. local time at the consumer's location is inconvenient. It applies to emails and texts, not only calls.
And the Bureau's Official Interpretations answer the question Florida's legislature answered the other way. Comment 6(b)(1)(i)-1 provides that an electronic communication occurs when the debt collector sends it, not when the consumer receives or views it.
Preemption runs one direction only. 15 U.S.C. 1692n provides that the federal act does not annul, alter, or affect state debt collection laws except to the extent those laws are inconsistent, and then only to the extent of the inconsistency, and that a state law is not inconsistent if the protection it affords is greater than the federal protection. Florida reinforces the point internally at Fla. Stat. 559.552, which provides that nothing in the state law limits the continued applicability of the federal act in this state.
Federal law is a floor. A state law that is less restrictive than the federal standard does not displace it; it simply leaves the federal standard as the operative one.
So the practical outcome is this. An email sent to a Florida consumer at 11 p.m. may well be immune from a claim under Section 559.72(17) after May 16, 2025. If the sender is a debt collector under federal law, that same email is sent at a presumptively inconvenient time under Regulation F, and the send-based timing rule means the sender cannot point to when the consumer opened it.
What it means practically
Know which category you are in. A third-party collection agency is a debt collector under federal law, is subject to Regulation F, and gets no benefit from Florida's amendment for timing purposes. A creditor collecting its own consumer accounts in its own name is generally outside the federal act, as our companion post on the Florida Consumer Collection Practices Act explains, and for that business the Florida amendment is a genuine and useful change.
That is a strange result and it is worth saying plainly: the Florida amendment helps most precisely the businesses that Florida law, not federal law, is the only thing regulating.
Do not extend the carve-out past its text. Email only, to an email address only, and only as to the time window.
Remember Regulation F's other requirements. Electronic communications require a clear and conspicuous statement describing a reasonable and simple method to opt out of further electronic communications to that address or number. A medium-specific opt-out request must be honored. The call frequency presumption at 12 C.F.R. 1006.14(b)(2), seven calls in seven consecutive days for a particular debt and no call within seven days of a telephone conversation about that debt, is a call rule and does not cap emails, but the general harassment prohibition does not disappear because the medium changed.
And watch the Florida remedies. A violation of Section 559.72 carries actual damages plus statutory damages up to $1,000, court costs and reasonable attorney's fees, and in a class action an aggregate award capped at the lesser of $500,000 or one percent of net worth. The limitations period is two years.
When to call a lawyer
When you are designing or changing a collection communications program, and before adopting any after-hours sending practice on the strength of the 2025 amendment.
Why this is not a do-it-yourself problem
The amendment is one sentence, it is written in plain English, and reading it correctly requires knowing four things that are not in it: that it carves out email but not text, that it leaves the rest of Section 559.72 fully applicable to the carved-out email, that federal law reaches the same conduct on a different and medium-neutral standard, and that federal preemption protects more-protective state law without displacing more-protective federal law. A business that reads the sentence and changes its send schedule has done exactly what the sentence appears to permit and may have walked straight into the federal rule. The compliance question is not what Florida allows. It is which of two overlapping regimes governs the business, and that turns on a definitional question about the business itself, not about the communication.
Talk to us
HDD Law Firm represents businesses in commercial disputes and litigation in the Florida state courts, the Southern, Middle and Northern Districts of Florida, and the Eleventh Circuit. If your business communicates with consumers about accounts receivable, contact us to discuss your matter.
Sources
● CS/CS/SB 232 (2025), Debt Collection, bill history and votes (The Florida Senate)
● CS/CS/SB 232 (2025), enrolled bill text (The Florida Senate)
● Chapter 2025-23, Laws of Florida
● Fla. Stat. 559.72, Prohibited practices generally, current text
● Fla. Stat. 559.72 (2024), prior text of subsection (17)
● Fla. Stat. 559.77, Civil remedies
● Fla. Stat. 559.552, Relationship of state and federal law
● 15 U.S.C. 1692c, Communication in connection with debt collection
● 15 U.S.C. 1692n, Relation to State laws
● 12 C.F.R. 1006.6, Communications in connection with debt collection (eCFR)
● 12 C.F.R. 1006.14, Harassing, oppressive, or abusive conduct (eCFR)
● Supplement I to Part 1006, Official Interpretations (Regulation F) (eCFR)
● CFPB, Debt Collection Practices (Regulation F) final rule
● Florida Office of Financial Regulation, Consumer Collection Agencies
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm’s position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
The Florida Supreme Court Just Invalidated a Large Number of Outstanding Settlement Proposals
The short answer
On July 2, 2026, the Florida Supreme Court held that a joint proposal for settlement must apportion the amount among the parties, and eliminated the exception some courts had recognized for proposals addressing a single unified claim. Any outstanding unapportioned joint proposal is now unlikely to support a fee award, and this is worth checking against every open file this week.
Why it comes up
The proposal for settlement is the principal fee-shifting device in Florida civil litigation, and it is how most cases get valued. Rule 1.442 requires that a proposal made by or to multiple parties state the amount and terms attributable to each party. Some courts had excused apportionment where the claim was unified and indivisible.
What the court held
The case arose from a residential renovation dispute. The owners sued a design company that had left the job; the company counterclaimed. Before trial the owners served a joint, unapportioned proposal of $10,000. The Fourth District held the proposal valid under the unified claim exception.
The Florida Supreme Court quashed that decision and approved the contrary decision of the Second District, holding that the rule requires apportionment in every joint proposal, whether or not the claim is unified.
Our take: this is a housekeeping emergency, not an academic development
Fee-shifting rules are technical and it is tempting to treat a decision like this as a detail. It is not. A proposal for settlement is often the single most valuable piece of paper in a case, because the prospect of fee exposure is what moves a defendant. A proposal that turns out to be invalid does not merely fail to shift fees. It removes the leverage the case was being litigated on, usually at the moment the case is being valued for settlement or trial.
The joint proposals that are now invalid are common in this firm's practice areas: spouses jointly asserting a construction defect claim, an association together with individual unit owners, affiliated developer entities, a contractor and its surety, business partners suing jointly.
The fix is simple where the proposal can still be reissued: state a dollar amount for each offeror and each offeree. The problem is the proposals already served, where the acceptance period has run and the case is heading to trial on the assumption that fee exposure attaches. Those need to be identified now, and in some cases served again.
What it means practically
Audit every open file for outstanding proposals for settlement involving more than one party on either side. Where the proposal is unapportioned, assume it will not support a fee award and decide whether a new, properly apportioned proposal should be served. Where the deadline has passed, the case may need to be revalued.
When to call a lawyer
Now, if you have a pending case with an outstanding joint proposal. This is a deadline-sensitive problem.
Sources
● Trace Elements, Inc. v. Mackensen, No. SC2024-1274 (Fla. July 2, 2026), via Justia
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.
Your Employees Want the Service Charge Reclassified as a Tip. Doing It Creates a Wage and Hour Problem.
The short answer
Final Treasury and Internal Revenue Service regulations implementing the deduction for tip income published April 13, 2026 and took effect June 12, 2026. They define which payments qualify, and they exclude automatic gratuities and service charges. Hospitality employers across South Florida are being asked by staff to reclassify service charges as tips so the money qualifies. Doing that does not make it a tip for tax purposes, and it can create a wage and hour problem that did not exist before.
What the regulations do
The final regulations establish a list of occupations that customarily and regularly received tips on or before December 31, 2024, and require that a qualified tip be voluntary, determined by the payor, and not subject to negotiation. They cover card and electronic tips, address tip pools and the participation of managers and supervisors, and exclude tips arising from specified service businesses. The deduction is capped at twenty-five thousand dollars with a phase-out based on income.
Most importantly for an operator: automatic gratuities and service charges are excluded.
Our take: the tax question and the wage question are different questions with different answers
The distinction the regulations draw is the same one wage and hour law has drawn for decades, and that is not a coincidence.
A tip is money the customer decides to give, in an amount the customer chooses. A service charge is money the house imposes. Under wage and hour law, that difference determines whether the money belongs to the employee, whether it can be counted toward the minimum wage through a tip credit, who may share in it, and how overtime is calculated. Service charges are generally the employer's revenue, which the employer may distribute, and amounts distributed are wages that must be included in the regular rate for overtime.
So an employer that responds to staff pressure by relabeling a mandatory service charge as a tip is making three changes at once, only one of which was intended:
● It does not achieve the tax result. The regulations look at the substance. A charge the house imposes is not voluntary and not payor-determined, whatever it is called on the check.
● It may create a tip credit problem. If the employer takes a tip credit, the composition of the tip pool and who participates in it are regulated. Adding house-imposed money to that pool, or adding participants, can invalidate the credit and expose the employer to the difference for every hour worked.
● It may create an overtime problem. Service charge distributions are wages that belong in the regular rate. Recharacterizing them as tips removes them from that calculation, and if the recharacterization is wrong, the overtime was underpaid.
There is a further trap worth naming. The Department of Labor's public fact sheet on tipped employees still recites the twenty percent and thirty continuous minute limits from a rule that was vacated in litigation, with no mention of the vacatur. An employer relying on that fact sheet for tip credit compliance is relying on a document that does not reflect current law.
We should be clear about scope. This is a tax development, not a wage and hour rulemaking, and we found no Department of Labor tip credit rulemaking in the past year. The reason it belongs on an employment page is that the tax change is driving employers to make wage and hour decisions.
What it means practically
If staff have asked about reclassifying service charges, the answer is that the label does not control and the change carries risk in a different body of law. If you want employees to capture the deduction, the route is to make the payment a genuine tip, which means making it voluntary and customer-determined, and that is a pricing and operations decision, not a payroll relabeling.
When to call a lawyer
Before changing how any charge appears on a guest check or in payroll, and before revising a tip pool.
Why this is not a do-it-yourself problem
Here the client is being asked by their own employees to make a change that sounds like payroll administration and is actually a decision under two statutes at once. Whether a payment is a tip or a service charge determines who owns it, whether a tip credit survives, and how overtime is calculated, and the label on the check does not control any of it. This is also an area where the government's own published guidance is out of date, which means the compliance answer cannot be looked up.
Talk to us
This firm defends employers in wage and hour litigation, including Fair Labor Standards Act collective actions, and advises on the pay practices that generate them. Before you change how a charge appears on a guest check or in payroll, discuss your matter with our attorneys.
Sources
● Internal Revenue Bulletin 2026-18, containing T.D. 10044
● Department of Labor Fact Sheet 15A, tipped employees under the FLSA
Disclaimer
This post discusses publicly reported legal developments for general informational purposes. It is not legal advice, it does not create an attorney client relationship, and it does not reflect the firm's position in any pending matter. Outcomes depend on the specific facts and the governing law of the relevant jurisdiction.