Florida’s attempt to punish companies with business ties to Cuba or Syria has been blocked by the courts.

In May 2012, the state adopted the Cuba Amendment, which banned businesses from receiving state and local contracts if they had dealings in Cuba or Syria, or maintained connections with companies that did so.

The law also required companies to certify that they did not have business operations in any of the two countries when bidding on a government job or renewing a contract with a government agency. Any businesses caught lying about their Cuban or Syrian connections were subject to a penalty of $2 million or twice the amount of the contract.

A month after the law’s adoption, Odebrecht Construction sued the Florida Department of Transportation to prevent it from enforcing the amendment against the company. Odebrecht, a subsidiary of a Brazilian firm that had unrelated foreign subsidiaries that did business in Cuba, was one of more than 200 Florida businesses potentially affected by the amendment.

Odebrecht’s lawyers argued, among other things, that the law violated the supremacy clause of the U.S. Constitution because it conflicted directly with federal sanctions against Cuba. A federal judge agreed and blocked the amendment before it took effect.

The state then appealed to Eleventh Circuit, where a three-judge panel refused to lift the injunction, saying the Cuba Amendment conflicted with the U.S. government’s previous economic sanctions and “stands as an obstacle to the carefully calibrated federal regime” pertaining to Cuba.

Florida’s law would have penalized economic conduct allowed by federal laws, as well as impose broader and more severe sanctions than the federal ones.

-Noel Brinkerhoff

To Learn More:

Cuba Embargo in Florida Goes Too Far, Court Says (by Julia Filip, Courthouse News Service)

Federal Appeals Court deals blow to Florida’s so-called “Cuba amendment” (by Duane Morris, Marco A. Gonzalez, Jr. and Jose A. Aquino, Lexology)

Odebrecht Construction v. Florida Department of Transportation (Eleventh Circuit Court of Appeals)

Federal Court Halts Florida’s Random Drug Testing of Welfare Applicants (by David Wallechinsky and Noel Brinkerhoff, AllGov)

Federal Judge Halts Florida Law Prohibiting Doctors from Talking about Guns (by Noel Brinkerhoff, AllGov)

Florida Drug Testing of Welfare Recipients Cost more than it Saved (by Noel Brinkerhoff and David Wallechinsky, AllGov)