Court stamps out Galaxy Fireworks case from '98 wildfires

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With a fierce drought sparking wildfires across the state, then-Gov. Lawton Chiles took the extraordinary step in 1998 of banning the sale and use of fireworks around the Fourth of July holiday.

And Wednesday, more than 14 years after the smoke cleared, an appeals court snuffed out a fireworks company’s arguments that it should receive more than $1 million from the state because of the ban.

The 2nd District Court of Appeal overturned a Hillsborough County circuit court ruling that found Galaxy Fireworks, Inc., should be compensated because the ban amounted to a government “taking” of property.

A three-judge panel said both sides in the case agreed that an executive order issued by Chiles was a “valid exercise of the state’s police power.” But in rejecting the arguments of Galaxy and siding with the state, it said the ban did not eliminate the value of the company’s property.

“Appellees (Galaxy) maintained their ownership of their fireworks inventories, had the right to transfer their inventories to an out-of-state location where sales were permitted, and in fact did sell the same inventories after the expiration of the two-week ban on sales,” the ruling said. “Appellees were not denied the value of their property, only the profits that might have been earned in the state of Florida during that specific time period — profits that ultimately were realized by the subsequent sale of the assets.”

In the case, Galaxy argued that it makes about 70 percent of its annual profits during the Fourth of July holiday season, which follows about two months of preparation. The ruling said Galaxy argued that the ban “deprived them of the economic benefit of their inventories. This, they argue, was a compensable taking in violation of the Fifth Amendment of the United States Constitution.”

The ruling, which came after years of litigation, overturned a circuit-court decision that would have led to Galaxy receiving about $1.1 million. Of that amount, the company would have recouped $1 million in damages, along with interest.

Chiles’s executive order banned the sale and use of fireworks and sparklers from June 25 through July 9, 1998, amid wildfires that burned hundreds of thousands of acres across Florida and caused evacuations of areas such as Palm Coast in Flagler County. Crews spent weeks trying to corral the fires, while shielding homes and residents from damage.

In the ruling Wednesday, appeals-court judges Charles Davis, Nelly Khouzam and Marva Crenshaw pointed to the dangerous conditions at the time Chiles issued the order.

“The need for the limitation was the dangerous conditions that temporarily existed in the state at that particular time,” they said in the seven-page ruling, written by Davis. “Such a temporary limitation on the right to sell required by the widespread dangerous conditions mitigates against this being considered a compensable taking.”

Also, regardless of the executive order, it said the fireworks industry is heavily regulated because of potential dangers.

“Appellees voluntarily invested in their inventories knowing that the regulation of the sale and use of such was subject to change from time to time and from locality to locality,” the ruling said. “The temporary limitation on the sale of the fireworks under these facts does not rise to such an interference with investment-backed expectations as to constitute a compensable taking.”

Via Jim Saunders of the News Service of Florida.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.