Recently, a group of Chinese citizens living in Florida and a real estate brokerage firm—whose clients are primarily Chinese and Chinese American—have 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 new foreign ownership law, Senate Bill 264 (“SB 264”), violates the United States Constitution. According to the plaintiffs, SB 264 violates their equal protection rights promised under the Constitution because the law restricts their ability to purchase real property because of their race. They also allege SB 264 violates the Due Process Clause and the Supremacy Clause of the Constitution and the Fair Housing Act (“FHA”). The plaintiffs are seeking an injunction against the implementation of SB 264 before it goes into effect on July 1, 2023.

This is the second of two articles discussing the legal arguments raised by the plaintiffs in Shen. The first article explained the plaintiff’s equal protection and due process claims. This article discusses the plaintiffs’ claims that SB 264 violates FHA and the Supremacy Clause.


On May 8, 2023, Governor Ron DeSantis signed into law SB 264, which seeks to restrict certain foreign purchases and investments in specific types of real property located within the state. Specifically, the law restricts a “foreign principal” from directly or indirectly owning, holding, or acquiring “by purchase, grant, devise, or descent agricultural land or any interest…in such land, and land within 10 miles of any military installation or “critical infrastructure facility” located within the state.

A “foreign principal” includes governments, governmental officials, and political parties and its members of a “foreign country of concern.” The countries considered as a “foreign country of concern” under the law include China, Russia, Iran, North Korea, Cuba, Venezuela’s Nicolás Maduro regime, and Syria. Further, a business entity organized or having a principal place of business in a foreign country of concern is a foreign principal under the law. An individual “who is domiciled in a foreign country of concern” and is not a U.S. citizen or lawfully permitted to reside in the U.S. is a foreign principal subject to the restriction prescribed under the law. Last, any “entity or subsidiary formed for the purpose of owning real property” is a foreign principal when a controlling interest in the entity or subsidiary is held by a party that qualifies as a foreign principal.

Aside from the restriction on foreign principals, Florida’s new foreign ownership law restricts certain Chinese investments in the state’s real estate. Specifically, SB 264 restricts the Chinese government and its members, Chinese business entities, and individuals “domiciled in” China who non-U.S. citizens or lawfully permitted to reside in the U.S. from acquiring any interest in real property within the state. However, individual persons may purchase one residential property that is up to 2 acres if (1) the property is not within 5 miles of a military installation, (2) the individual has been granted asylum in the U.S. or holds a valid U.S. visa that is not limited to tourist-based travel, and (3) the purchase is in the name of the individual holding the visa or asylum documentation.

Foreign principals and Chinese investors that acquired an interest in real property before July 1, 2023, may continue holding that interest, but they may not acquire any additional real property within the state.

Chinese investors that hold or acquire an interest in Florida real property on or after July 1, 2023, are required to report this interest to the Florida Department of Economic Opportunity (“FDEO”). Foreign principals that hold or acquire an interest in agricultural land are required to report this interest to the Florida Department of Agriculture and Consumer Services (“FDACS”), and landholdings within 10 miles of a military installation or critical infrastructure are to be reported to FDEO. Parties that fail to file a disclosure are subject to a penalty of $1,000 each day the disclosure is late.

Land held by foreign principal or a restricted Chinese purchaser in violation of the restriction under SB 264 is subject to forfeiture to the state, meaning the state acquires title to the property. Further, it is a second-degree misdemeanor for foreign principals to purchase land and for persons to knowingly sell land to foreign principals in violation of SB 264. Additionally, Chinese purchases of land in violation of SB 264 constitutes a third-degree felony and persons that knowingly sell land to a Chinese purchaser in violation of the restriction law are subject to first-degree misdemeanor charges.

Shen v. Simpson

On May 22, 2023, four Chinese citizens—which hold nonimmigrant visas—who reside in Florida and Multi-Choice Realty, a Florida-based real estate firm, came together to bring a lawsuit against FDACS, FDEO, and the Florida Real Estate Commission (“FREC”) to challenge the state’s restriction on certain foreign investments in land created under SB 264. The plaintiffs claim, as discussed in the first article of this series, that the Florida law is unconstitutional because it violates the plaintiffs’ rights to equal protection and due process. Further, the plaintiffs argue that SB 264 violates FHA and is preempted by federal law. Accordingly, the plaintiffs are seeking the court to issue an injunction to prevent the state from implementing SB 264.

FHA Claim

Next, the plaintiffs assert Florida’s new foreign ownership law violates FHA. Specifically, the plaintiffs claim SB 264 permits sellers of real estate to discriminate against foreign purchasers, particularly Chinese purchasers, and would establish a “discriminatory housing practice” in violation of FHA.

Under FHA, someone that has been or believes they will be injured by a “discriminatory housing practice” can make a claim under FHA. A person engages in an unlawful discriminatory housing practice when they refuse to sell, offer, or negotiate for the sale of a dwelling or discriminate against someone “in the terms, conditions, or privileges” in the sale of a dwelling because of that person’s race, color, or national origin. 42 U.S.C. § 3604(a)-(b). It is also unlawful for a business that engages in “residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color,…or national origin.” 42 U.S.C. § 3605(a).

SB 264, according to the plaintiffs, discriminates against and “invidiously targets” purchasers of residential property based on their race, color, and national origin, particularly Chinese persons, thus creating a “discriminatory housing practice.” Additionally, plaintiff Multi-Choice Realty argues that SB 264 will prevent them from closing on transactions and selling certain properties after July 1, 2023, to certain foreign purchasers because of their race, color, or national origin, resulting in discriminatory practices that violates FHA.

Supremacy Clause Claim

Last, the plaintiffs contend that SB 264 violates the Supremacy Clause of the Constitution. Essentially, the Supremacy Clause provides that federal law typically preempts or supersedes state law that conflicts with federal law, or where state law regulates activity that is exclusively reserved for federal regulation. Sometimes, Congress passes legislation with the intent that the federal government will regulate the entire “field” of an issue, which is known as field preemption. When federal regulation “occupies an entire field,” there is no room for additional state laws regulating activity in that field, and the federal law supersedes the state laws.

According to the plaintiffs, federal law preempts SB 264 because the U.S. Constitution designates the federal government to regulate foreign commerce and foreign affairs. See U.S. Const., Art. I, Sec. 8, Cl. 3; Sec. 10, Cl.1, 3. Further, the plaintiffs assert that Congress has authorized the federal government to manage foreign affairs, foreign investments, and national security through the Committee on Foreign Investment in the United States (“CFIUS”) and the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”).

CFISU is an interagency committee that is authorized by the Defense Production Act (50 U.S.C. § 4565) to serve the President in reviewing certain transactions involving foreign investments and acquisitions of American companies and real estate, including investments in close proximity to military installations, to determine whether a transaction presents a threat to U.S. national security. OFAC is a financial intelligence agency that administers and enforces economic and trade sanctions against certain countries, business entities, and groups of individuals “to accomplish foreign policy and national security goals” of the U.S., according to the Treasury Department. In doing so, OFAC prevents “prohibited transactions,” which are “trade or financial transactions and other dealings in which U.S. persons may not engage unless authorized by OFAC or expressly exempted by statute.”

The plaintiffs claim that it is “unquestionable” that the federal government has exclusive power to manage foreign affairs and transactions. Because the federal government regulates and controls foreign affairs and real estate investments as it relates to national security, the federal government occupies the entire field and supersedes SB 264, according to the plaintiffs. In addition, the plaintiffs contend that SB 264 interferes with the federal government’s power to govern foreign affairs because it seeks to “establish its own foreign policy” by classifying several countries as “foreign countries of concern.” Last, federal law preempts SB 264 because the Florida law “burdens international commerce” by prohibiting some foreign investors from acquiring certain property within the state, according to the plaintiffs.


Shen v. Simpson is the first lawsuit filed that challenges a foreign ownership law enacted in 2023, but it is not the first time foreign ownership laws have been challenged. Foreign ownership laws that sought to restrict Asian acquisitions of farmland enacted by several states—particularly Pacific coast states—during the 1920’s and World War II faced multiple challenges throughout this period. Most states ultimately repealed their laws in the 1950s likely due, in part, to two U.S. Supreme Court decisions that concluded these laws specifically restricting Asian land ownership were vulnerable to equal protection and due process challenges. See Oyama v. California, 332 U.S. 633 (1948); Takahashi v. Fish & Game Comm’n, 334 U.S. 410 (1948). Additionally, some state courts invalided their foreign ownership laws targeting Asian land acquisitions. See Kenji Namba v. McCourt, 185 Ore. 579, 204 P.2d 569 (1949); Fujii v. State, 38 Cal. 2d 718, 242 P.2d 617 (1952); State v. Oakland, 129 Mont. 347, 287 P.2d 39 (1955). However, each of these cases involved “resident aliens” permanently residing in the U.S., not foreign individuals that have a temporary right to reside in the country.

An update to this article will be published as this lawsuit moves forward.


To read the plaintiffs’ complaint, click here.

To read SB 264, click here.

To read the first article in this series, click here.

For compilation of state laws governing foreign ownership of agricultural land, click here.

To learn more about foreign ownership of agricultural land, click here.

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