On February 1, 2024, the U.S. Court of Appeals for the Eleventh Circuit granted a partial injunction in favor of two individuals challenging a Florida law that restricts certain foreign investments in real property. In May 2023, a group of Chinese citizens living in Florida and a real estate brokerage firm filed a lawsuit (Shen v. Simpson, No. 4:23-cv-208 (N.D. Fla. 2023)) against the state of Florida alleging that the state’s newly enacted foreign ownership law violates the United States Constitution. After the district court denied the plaintiff’s motion to prevent the state from implementing and enforcing their foreign ownership law, the plaintiffs appealed to the Eleventh Circuit who granted a partial preliminary injunction. As a result, the state of Florida currently cannot enforce its restriction against two individual plaintiffs.


In 2023, Florida Governor Ron DeSantis signed into law Senate Bill 264 (codified under Fla. Stat. Ann. §§ 692.201 to 692.205), restricting certain foreign investments in real property located within the boundaries of the state. Specifically, the law restricts certain land investments from purchasers that are domiciled in China, Cuba, Iran, North Korea, Russia, and Venezuela. Further, the state law restricts, which some exceptions, certain individuals and entities “domiciled in” China from acquiring an interest in real property.

Shortly after Senate Bill 264 was signed into law, four Chinese citizens, holding nonimmigrant visas and residing in Florida, as well as a Florida-based real estate firm came together to bring a lawsuit against the state of Florida in its challenge to it. Specifically, the plaintiffs claim the state’s law is unconstitutional based on constitutional protections of equal protection and due process, as well as rights granted to them under the Fair Housing Act “FHA”). Finally, they claimed that it was preempted by federal law.

After filing the lawsuit, the plaintiffs asked the court to issue a preliminary injunction to prevent the state from enforcing the restrictions under the foreign ownership law. Before a case goes to trial, some litigants file a motion to a court asking the judge for a preliminary injunction. Essentially, a preliminary injunction, if granted by the judge, restrains a party from beginning or continuing an action. Preliminary injunction may be issued by a judge before or during trail, and these injunctions typically remain in effect until the case is fully resolved. Generally, a party asking for a preliminary injunction must satisfy four factors:

  1. A likelihood they can win the lawsuit based on the facts and evidence of the case;
  2. They will suffer irreparable injury if the preliminary injunction is denied;
  3. The threat of their injury outweighs any damage to the opposing party; and
  4. Granting the preliminary injunction will not harm the public interest.

A judge’s denial of a motion for preliminary injunction does not signify the ultimate outcome of the case or that the party is unable to win on the merits of the case. This is because the standard for granting an injunction is higher than what the party must prove during trial. For example, a judge can deny a motion for an injunction even if the party proves they would face irreparable harm. Accordingly, the party seeking an injunction must convince the judge that they will suffer harm that cannot be remedied once the harm occurs.

When a litigant is asking for an injunction under this four-part test, the judge balances factors (1) and (2) against (3) and (4). If the first two outweigh the last two factors, a judge will most likely grant the party’s motion for an injunction. In the Shen plaintiffs’ motion for a preliminary injunction, they claim the judge must grant their motion because factors (1) and (2) outweigh factors (3) and (4).

Ultimately, the district court denied the plaintiffs’ request for injunctive relief. The plaintiffs appealed this decision, and the Eleventh Circuit granted a preliminary injunction for only two of the plaintiffs named the case.

Order Granting Injunction

Although the Shen plaintiffs claim that the Florida law is unconstitutional for several reasons, the court’s order granting the partial injunction rests solely on the plaintiffs’ preemption argument. According to the Eleventh Circuit’s order, two of the Shen plaintiffs have shown a substantial likelihood that the federal government’s role in monitoring certain foreign acquisitions of real property located within the U.S. preempts Florida’s foreign ownership law.

In their motion, the Shen plaintiffs assert Florida’s foreign ownership law violates the Supremacy Clause of the U.S. Constitution by conflicting with the federal government’s system of regulating land purchases by foreign investors. The federal law at issue is the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”) (50 U.S.C. § 4565).  Through FIRRMA, Congress authorized the federal government to review certain transactions involving foreign investments and acquisitions of American businesses and real property. The review is conducted by the Committee on Foreign Investment in the United States (“CFIUS”), and is meant to determine whether a transaction presents a threat to U.S. national security. If a transaction is determined to pose a threat, CFIUS has mitigation options to minimize risk. The plaintiffs argue that by passing FIRRMA Congress reserved, for the federal government, exclusive power to regulate foreign investments in the U.S..

In agreeing with the plaintiffs, the Eleventh Circuit held, without further analysis, that the plaintiffs satisfied the first factor of the four-part test by showing they are likely to succeed on their preemption claim in their lawsuit against the state. As for the other factors of the four-part test, the court concluded that each factor weighs in favor of granting preliminary injunction. However, according to the court, a litigant is not entitled to a preliminary injunction even when they satisfy each of the requirements, and the court retains discretion to decide whether to grant such relief. In exercising this discretion, the Eleventh Circuit granted the plaintiffs’ motion for only two plaintiffs because the absence of the preliminary injunction would create the “most imminent risk of irreparable harm” because of their recent real estate investments in Florida. As a result, the state is currently restrained from prohibiting these two individual plaintiffs from completing their real property transactions within the state of Florida.

Judge Nancy Abudu, a federal judge serving the United States Court of Appeals for the Eleventh Circuit, agreed with the court’s grant of the preliminary injunction, but she wrote a concurring opinion to explain that she would have granted the injunction based on the plaintiffs’ claim that the Florida law violates their right to equal protection. She highlighted that the statutory language of the state’s law establishes “a blanket ban against Chinese non-citizens from purchasing land within the state,” and such a “prohibition blatantly violates the Fourteenth Amendment’s protection against discrimination.”


The Eleventh Circuit’s order granting a partial preliminary injunction pending appeal for two individual plaintiffs which means the provisions of the Florida’s foreign ownership law being challenged by the Shen plaintiffs cannot be enforced against those two individuals. However, because the court granted the injunction pending appeal, the injunction is not binding on other appellate courts that preside over the Shen case.  Further, the injunction is limited to two individuals, which means the state may continue to enforce its restriction against all other investors subject to their foreign ownership law, including other Shen plaintiffs.

Oral arguments for the Shen case are expected to be set for April 2024, at which time the appellate court will hear arguments on the merits of the case.  This means that the court will consider whether the plaintiff will prevail on the case as a whole, which is a significantly different standard than that applied to a preliminary injunction. Continued updates to this article will be published as this lawsuit moves forward.


To read the court’s order, click here.

To read Florida’s foreign ownership law (Fla. Stat. Ann. §§ 692.201 to 692.205), click here.

NALC articles discussing the Shen v. Simpson case are available here, here, here, and here.

For NALC articles discussing Florida’s foreign ownership law, click here and here.

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