Clarifying “Legally Responsible” in Florida’s Health Care Clinic Act Wholly Owned Exemption

Introduction

State Farm Mutual Automobile Insurance Company v. Michael LaRocca (11th Cir. 2025) presented a novel question under Florida’s Health Care Clinic Act, Fla. Stat. § 400.991 et seq.: what does it mean for a clinic owner to be “legally responsible for the entity’s compliance with all federal and state laws” under the Act’s “wholly owned exemption” (Fla. Stat. § 400.9905(4)(g))? At issue were twelve Tampa Bay chiropractic clinics owned by Dr. Michael LaRocca. After operating unlicensed for years, LaRocca obtained exemption certificates by attesting that he “supervise[d] the business activities and [was] legally responsible for [the clinics’] compliance with all federal and state laws.” When State Farm sued for alleged fraud, kickback and patient‐brokering violations, it advanced two theories: (1) that the clinics provided medically unnecessary treatment, and (2) that LaRocca’s failure to “ensure” compliance with statutes—particularly Florida’s Anti‐Kickback Statute and Patient Brokering Act—voided every charge under Fla. Stat. § 400.9935(3). The district court rejected the second theory, and on appeal the Eleventh Circuit certified the precise meaning of “legally responsible” to the Florida Supreme Court.

Summary of the Judgment

The Eleventh Circuit panel, per Judge Lagoa, held that the phrase “legally responsible” in § 400.9905(4)(g) is subject to competing interpretations and that—due to the importance of the issue in Florida insurance law and the absence of controlling state precedent—the Florida Supreme Court should decide its meaning. Rather than guess, the Eleventh Circuit respectfully certified the question:

Under Florida law, what does it mean to be “legally responsible” within the meaning of Fla. Stat. § 400.9905(4)(g)?

The court transmitted the full record and the parties’ briefs, emphasizing that certification promotes comity, avoids “absurd results,” and respects state courts as the ultimate interpreters of their own statutes.

Analysis

Precedents Cited

Allstate Ins. Co. v. Vizcay, 826 F.3d 1326 (11th Cir. 2016): The Eleventh Circuit construed “legal responsibility” for a medical director under Fla. Stat. § 400.9935(1) to require “substantial compliance” with enumerated duties, but limited to those statutory activities.
Steele v. Comm’r of Soc. Sec., 51 F.4th 1059 (11th Cir. 2022): Emphasized federalism doctrines and comity when interpreting state law with significant local impact, leading to certification.
WM Mobile Bay Env’t Ctr. v. City of Mobile Solid Waste Auth., 972 F.3d 1240 (11th Cir. 2020): Reaffirmed deference to state supreme courts and the value of certification for unsettled state‐law questions.
Storey Mountain, LLC v. George, 357 So. 3d 709 (Fla. 4th DCA 2023): Presumed that legislative differences in language are intentional, guiding statutory interpretation.

Legal Reasoning

At the heart of the dispute is one phrase: “legally responsible.” Two dictionary definitions were in tension:

A legal-liability sense: answerable, liable, or accountable for violations, without necessarily implying proactive control or supervision.
An exercise-of-control sense: charged with overseeing, ensuring, or “taking charge” of compliance.

State Farm argued that “legally responsible” imposed an affirmative duty to ensure “substantial compliance” with all laws—thus any violation would revoke the exemption and render all charges noncompensable. Dr. LaRocca countered that “legally responsible” merely created a potential civil or administrative liability for violations, without transforming an incidental infraction (e.g., a balloon‐release fine under Fla. Stat. § 403.413) into a license revocation or retroactive voiding of thousands of insurance claims.

The district court agreed with LaRocca, noting the absurdity of imposing perfect compliance as a licensure precondition and distinguishing the narrower supervisory duties imposed on a licensed medical director under § 400.9935(1). The Eleventh Circuit found both interpretations plausible but recognized that Florida’s highest court must say which one is correct.

Impact

The Florida Supreme Court’s forthcoming decision will resolve:

Whether clinic owners seeking the wholly owned exemption must adopt an affirmative compliance program for every federal and state law, under threat of automatic reimbursement forfeiture for any breach.
The degree of deference insurance carriers and clinics owe to exemption certificates once properly issued.
The interplay between regulatory compliance, licensure exemptions, and insureds’ rights under Florida’s no‐fault insurance statutes.

A broad reading (imposing an “ensure compliance” duty) could chill clinic expansions and complicate risk management for provider‐owners. A narrow reading (imposing only remedial liability) would preserve the exemption’s original purpose: to relieve truly owner‐supervised clinics from licensing burdens while holding owners accountable for deliberate or knowing violations.

Complex Concepts Simplified

Wholly Owned Exemption (Fla. Stat. § 400.9905(4)(g)): Allows health‐care entities owned entirely by licensed practitioners to forgo licensing if an owner supervises operations and is “legally responsible” for legal compliance.
Certification to State Court: When a federal appeals court faces a pivotal, unsettled question of state law, it may pause its own decision and formally ask the state supreme court to clarify, ensuring uniformity and respecting state judicial authority.
Anti-Kickback & Patient Brokering Acts: Florida statutes that prohibit payment or reward schemes to induce patient referrals, carrying civil or criminal penalties.
Substantial Compliance: A pragmatic standard—less than perfection—that some statutes require when describing an official’s duty to follow specified procedures or regulations.

Conclusion

State Farm v. LaRocca underscores the delicate balance between regulatory flexibility for clinic owners and the need to safeguard patients and insurers against unlawful practices. By certifying the meaning of “legally responsible” to the Florida Supreme Court, the Eleventh Circuit protected Florida’s prerogative to interpret its own statutes and avoided an Erie‐based misstep. The forthcoming state‐court answer will shape Florida’s no‐fault insurance landscape, clarify owners’ supervisory duties, and ensure that exemptions serve legislative intent without producing perverse “automatic forfeiture” outcomes.