Reviving Terrace and Rational-Basis Review for Alienage-Based Real-Property Rules: Eleventh Circuit Narrows Challenges to Florida’s SB 264

Introduction

In Shen v. Commissioner, Florida Department of Agriculture and Consumer Services (11th Cir. Nov. 4, 2025), a published opinion authored by Judge Luck (joined by Judges Lagoa and Wilson in part, with Judge Wilson dissenting on core merits), the Eleventh Circuit largely affirmed the district court’s denial of a preliminary injunction against portions of Florida’s Senate Bill 264 (“SB 264”) regulating real property interests connected to persons domiciled in the People’s Republic of China. SB 264 is one of several measures enacted by Florida in 2023 under the banner “Interests of Foreign Countries,” with seven broad components; this appeal concerns three of them: (1) a purchase/ownership restriction, (2) a property registration requirement, and (3) an affidavit requirement for all purchasers.

Plaintiffs—four Chinese citizens lawfully in the United States without permanent residency (on H-1B, asylum-pending, and F-1 statuses) and a Chinese-serving real estate brokerage—brought Equal Protection, Fair Housing Act, Due Process/Vagueness, and federal-preemption challenges. The district court denied preliminary relief on the merits; on appeal, the Eleventh Circuit:

• Reversed and remanded as to the purchase restriction, but only because no plaintiff had standing to challenge it at this stage;
• Affirmed denial of a preliminary injunction as to the registration requirement and the affidavit requirement, holding plaintiffs were not substantially likely to succeed on any of their theories.

Beyond its immediate effect, the opinion is notable for two doctrinal moves: (i) a robust reliance on the Supreme Court’s “alien land law” cases—especially Terrace v. Thompson—to keep heightened scrutiny at bay in the land-ownership context or, alternatively, to apply rational-basis review to alienage classifications that exclude U.S. citizens and lawful permanent residents; and (ii) a careful insistence that the Committee on Foreign Investment in the United States (CFIUS)/FIRRMA regime does not preempt Florida’s property registration and affidavit mechanisms. The dissent would have applied strict scrutiny to the alienage classification and found conflict preemption.

Summary of the Opinion

• Standing:
  • Purchase restriction (Fla. Stat. § 692.204(1)): No plaintiff showed an imminent intention to engage in conduct arguably proscribed, chiefly because most were domiciled in Florida (not China) and/or already held equitable title before July 1, 2023. Standing dismissed without prejudice.
  • Registration requirement (Fla. Stat. § 692.204(4)(a); also § 692.203(3)(a) as discussed): Plaintiff Wang (F-1 student) plausibly must register; injury-in-fact shown (compliance cost/time), and credible threat of enforcement inferred.
  • Affidavit requirement (Fla. Stat. § 692.204(6)): Plaintiff Liu intends to buy property post–July 1, 2023; thus he will have to sign the affidavit—again, compliance cost/time suffices for injury-in-fact.
• Equal Protection:
  • National origin: No facial national-origin classification; “domiciled in China” is not shown (on this record) to be a proxy for Chinese national origin.
  • Alienage:
    • Affidavit requirement: Applies to all buyers; no alienage classification.
    • Registration requirement: Does classify by alienage (noncitizens/non-LPR domiciled in China must register). The court relied on Terrace and related cases to conclude no strict scrutiny applies in the land context; alternatively, under Eleventh Circuit (Estrada) and sister-circuit precedent (LeClerc, Bredesen), alienage classifications affecting non–LPR noncitizens draw rational-basis review. National security/food/land-security interests supply a rational basis.
  • Arlington Heights intent theory
  • —plaintiffs failed to show discriminatory purpose or disparate impact for either the registration or affidavit provisions.
• Fair Housing Act (FHA):
  • Section 3604(a) prohibits making a dwelling “unavailable” because of protected characteristics. Registration and affidavit provisions do not refuse sales or rentals nor “make unavailable” dwellings; thus they are not “discriminatory housing practices” invalidated by § 3615.
• Due Process/Vagueness:
  • Terms “military installation” and “critical infrastructure facility” are statutorily defined; “domiciled” is a well-settled legal term. No unconstitutional vagueness.
• Preemption:
  • CFIUS/FIRRMA does not expressly or impliedly preempt Florida’s registration and affidavit provisions; they do not bar or alter transactions, piggyback federal “countries of concern,” and at most complement federal review.

Analysis

Precedents Cited and Their Influence

The opinion draws on several doctrinal pillars:

• Standing/Pre-enforcement challenges: Spokeo v. Robins, TransUnion v. Ramirez, Susan B. Anthony List v. Driehaus, Dream Defenders v. Governor of Florida, and Eleventh Circuit cases on concreteness (e.g., Drazen, Hunstein, Common Cause/Georgia) to require a plaintiff-specific showing of intended conduct arguably proscribed and a credible threat of enforcement, plus concrete compliance burdens.
• Domicile under Florida law: The panel leans on Florida sources—Perez v. Perez; Nicolas v. Nicolas; Meisman v. Hernandez—to hold that domicile equals presence plus intent to remain permanently or indefinitely; nonpermanent immigration status does not preclude Florida domicile.
• Property “interest” and equitable title: Citing Black’s Law Dictionary, Klein v. Meza, White v. Brousseau, and Accardo v. Brown, the court treats equitable title, acquired upon executing a land-sale contract, as an “interest” owned pre–July 1, 2023—disqualifying the purchase-ban as to those transactions.
• Equal Protection—Alienage and the “Terrace” line:
  • Terrace v. Thompson and its California counterparts (Porterfield, Frick, Webb v. O’Brien) upheld state power to restrict alien land rights under non-strict scrutiny.
  • Modern cases often apply strict scrutiny to alienage laws affecting lawful permanent residents (LPRs)—e.g., Graham, In re Griffiths, Flores de Otero, Nyquist—but the panel emphasizes that only the Supreme Court may overrule Terrace, and that Florida’s registration provision targets non–LPR aliens, invoking Eleventh Circuit precedent (Estrada v. Becker) and sister-circuit cases (LeClerc, Bredesen) to apply rational-basis review.
  • Trump v. Hawaii supplies further support that national-security rationales satisfy rational-basis review.
• Intentional discrimination: The Arlington Heights framework, elaborated in Eleventh Circuit cases (League of Women Voters, Greater Birmingham Ministries), guides the analysis of impact, history, contemporaneous statements, foreseeability, knowledge, and less-discriminatory alternatives; the court finds the plaintiffs’ record insufficient.
• FHA scope: By focusing on § 3604(a), the court holds these procedural requirements neither “refuse” nor “make unavailable” a dwelling.
• Vagueness: Williams, Duran, Hedges, and Eleventh Circuit case law on statutory clarity and mens rea presumptions (Giorgetti) underpin the rejection of the vagueness claim.
• Preemption: The court distinguishes Crosby v. NFTC (state Burma sanctions preempted) and Odebrecht v. FDOT (Florida’s Cuba procurement ban preempted), aligning this case with Faculty Senate of FIU v. Winn (upholding a narrower state restriction keyed to federal designations). By “piggybacking” on federal adversary lists and not prohibiting transactions, Florida’s provisions are not obstacles to FIRRMA’s purposes.

The dissent contests two pillars: it would apply strict scrutiny to the alienage classification (treating Terrace as obsolete or inapposite) and find conflict preemption with FIRRMA, emphasizing that Florida’s regime targets named nationalities and (at least as to the purchase ban) sweeps broader than federal review (which excludes single housing units).

Legal Reasoning in Depth

A. Standing: “Not dispensed in gross,” and domicile/equitable title matter

The court’s standing discussion is methodical and plaintiff-specific:

• Credible threat exists when a lawsuit is filed soon after enactment and the state vigorously defends the law.
• Purchase restriction:
  • Domicile: Plaintiffs Shen (H-1B), Liu (H-1B), and Xu (asylum-pending) are domiciled in Florida (presence + intent to remain indefinitely), not China; thus their planned or ongoing purchases are not “arguably proscribed.”
  • Pre–July 1 equitable title: Shen and Xu contracted in April 2023; equitable title gives a pre-effective-date “interest.”
  • Specific intent: “Some day” plans are insufficient; Wang, though arguably domiciled in China (F-1 and no stated indefinite intent), had no concrete plan to purchase beyond her preexisting property.
  • Broker standing: The brokerage’s business-loss theory was too speculative; its one identified client (Zhou) also held equitable title pre–July 1, 2019 contract.
• Registration: Wang is plausibly domiciled in China, owns Florida property (within 10 miles of military/critical infrastructure), and will incur compliance costs and time; injury-in-fact is satisfied.
• Affidavit: Liu’s intent to purchase post–July 1 triggers the affidavit; compliance burdens supply injury-in-fact.

B. Equal Protection

1) Facial classification by national origin: No

“National origin” refers to a person’s country of birth or ancestry. The registration provision turns on domicile in China, not place of birth or ancestry; the affidavit requirement applies to all buyers. Plaintiffs’ proxy theory (that “domicile in China” is a fig leaf for Chinese national origin) failed for lack of evidentiary “fit” in the record presented.

2) Facial classification by alienage: Limited, and not subject to strict scrutiny here

• Affidavit: No alienage classification—it binds all purchasers uniformly.
• Registration: Does classify based on alienage by imposing registration on noncitizens/non-LPRs domiciled in China while exempting citizens and LPRs.

The court identifies two routes to reject strict scrutiny:

1. Terrace controls in the land-ownership space: Until the Supreme Court overrules it, lower courts must apply its deferential standard to alien land restrictions. If states can bar noncitizens from owning land, they can require registration as a lesser burden, absent arbitrariness.
2. Even aside from Terrace, rational-basis review applies to non–LPR aliens: Following Estrada (11th Cir.) and sister circuits (LeClerc, Bredesen), alienage classifications affecting nonimmigrant/non–LPR categories are reviewed for a rational relationship to legitimate state interests, reserving strict scrutiny for LPRs (“virtual citizens”).

Applying rational basis, national and food/land security rationales—grounded in federal designations of “foreign adversaries” and evidence of significant foreign acquisitions—are “reasonably conceivable.” The court also cites Trump v. Hawaii to underscore the breadth of deference when national-security rationales are asserted.

3) Intentional discrimination (Arlington Heights): Insufficient record

Evaluating impact, history, sequence, procedural/substantive departures, statements of key legislators, foreseeability/knowledge of disparate impact, and less-discriminatory alternatives, the panel finds:

• No credible evidence of disparate impact on Asians or persons of Chinese origin at the group level;
• Statements by the Governor and one legislative sponsor evince national-security motives, not ethnic/national-origin animus; isolated sponsor statements are weak indicators of collective legislative intent;
• Foreseeability and knowledge of disparate impact were not shown; assumptions about domicile equating to national origin are not evidence;
• Legislature narrowed the bill (e.g., exempting LPRs in the final version) and need not adopt plaintiffs’ preferred alternatives to show lack of discriminatory purpose.

C. Fair Housing Act

The plaintiffs’ preliminary-injunction motion relied solely on § 3604(a). The court held that a registration requirement and a universal affidavit attestation do not “refuse,” “deny,” or “make unavailable” dwellings within the meaning of § 3604(a). Section 3615 thus does not “invalidate” these provisions. (Notably, the court did not address other FHA theories or subsections not raised at this stage.)

D. Vagueness

The statutory definitions of “military installation” and “critical infrastructure facility” provide “clearly perceived boundaries.” “Domicile” has a well-understood common-law meaning under Florida law. Florida courts presume a mens rea unless the legislature clearly eliminates it. It is not a vagueness defect that factual application may sometimes be difficult; what matters is whether the statute defines the incriminating facts—which it does.

E. Preemption

The court treated the overlap between “field” and “conflict” preemption in foreign-affairs contexts by comparing Crosby (preempted Massachusetts Burma sanctions) and Odebrecht (preempted Florida Cuba procurement ban) with Faculty Senate (upheld Florida travel-funding limits). Florida’s registration and affidavit provisions neither:

• prohibit transactions that FIRRMA/CFIUS would allow;
• undermine executive discretion in managing the federal regime; nor
• create a conflicting sanctions program.

Instead, they complement federal review by collecting information and keying “countries of concern” to federal designations. The dissent’s preemption critique largely targets the purchase ban (e.g., federal exclusion of single-home purchases from CFIUS review), but the majority did not—and could not—reach that issue because no plaintiff had standing to challenge it.

Impact and Practical Implications

1) Litigation posture going forward

• Purchase restriction remains largely untested on the merits in the Eleventh Circuit. Future plaintiffs must establish standing with concrete, imminent plans proscribed by the statute and factual predicates showing domicile in China and no pre–July 1, 2023 equitable title.
• Brokerage standing: Generalized business harms are insufficient; identify clients who are domiciled in China, noncitizens/non-LPRs, and who intend to purchase post–July 1 without preexisting equitable title.
• Proxy and Arlington Heights theories require evidence: show statistical impact at the group level and a meaningful “fit” between domicile and national origin; locate probative legislative history if any exists.

2) Substantive law: A notable revival of Terrace and a widened rational-basis lane

Within the Eleventh Circuit, states invoking alienage in regulating land interests—at least for non–LPR noncitizens—can expect rational-basis review, whether by direct reliance on Terrace in the land context or by the Estrada/LeClerc/Bredesen line for non–LPR aliens. That is a significant doctrinal development for states experimenting with foreign-ownership recording/registration schemes. The dissent directly invites reexamination of Terrace, setting the stage for possible en banc or Supreme Court interest.

3) FHA challenges narrowed—at least as to registration/attestation

Because the court limited its FHA analysis to § 3604(a) and to the registration/affidavit provisions, it leaves open whether other provisions (e.g., a purchase ban) or other FHA sections might support a different outcome on a fuller record. But procedural mechanisms that neither refuse nor make housing unavailable face a high bar under § 3604(a).

4) CFIUS/FIRRMA preemption narrowed

The decision signals that state information-gathering and attestation provisions keyed to federal categories—and which do not themselves bar transactions—will generally survive obstacle-preemption challenges. States contemplating registries or certification obligations now have a blueprint to align with federal designations and avoid sweeping prohibitions that invite Crosby/Odebrecht-type conflicts.

5) Compliance guidance (Florida practitioners)

• Who likely must register: Noncitizens who are not LPRs and are domiciled in China and own more than a de minimis indirect interest in Florida real property (with additional triggers for property within 10 miles of a military installation or critical infrastructure, including holdings acquired before July 1, 2023, as described in the opinion).
• What must be filed: Name, address, parcel number, and legal description.
• Universal affidavit: All purchasers post–July 1, 2023 must attest compliance with SB 264; failing to implement this in closings risks criminal exposure. Title companies and brokers should standardize the affidavit in closing packages.
• Equitable title matters: Clients who executed land-sale contracts before July 1, 2023 acquired an “interest,” insulating those transactions from the purchase ban’s effective date.
• Domicile assessment: Do not equate “visa category” with “domicile.” Under Florida law, presence plus intent to remain indefinitely can establish Florida domicile even for nonpermanent statuses. Conversely, students or short-term visitors without an indefinite intent may be treated as domiciled abroad.

Complex Concepts Simplified

• Domicile vs. Residence: Domicile is your “true, fixed home”—presence plus intent to stay permanently or indefinitely. You can have many residences, but only one domicile.
• Equitable Title: When you sign a contract to buy real property, you get equitable title immediately; the seller holds legal title as security. Equitable title is a real “ownership interest.”
• Pre-enforcement Standing: To sue before being prosecuted, you must intend to do something arguably prohibited and face a credible threat of enforcement. General worry or someday plans are not enough.
• Strict Scrutiny vs. Rational Basis: Strict scrutiny requires a “compelling” state interest and narrow tailoring; rational basis asks only whether the law is reasonably related to a legitimate interest.
• Arlington Heights: A framework to test if a facially neutral law was passed with discriminatory intent. Courts look at impact, history, statements, departures from norms, foreseeability, knowledge, and alternatives.
• FIRRMA/CFIUS: A federal process to review certain foreign-involved transactions (including some real-estate deals) for national-security risks. It does not automatically preempt all state-level reporting or attestation requirements that don’t themselves bar transactions.
• Vagueness: A criminal law is unconstitutionally vague if people can’t tell what it prohibits or if it invites arbitrary enforcement. Using defined terms or well-understood legal concepts usually cures vagueness.

Conclusion

Shen is a consequential waypoint in the new wave of litigation over state regulation of foreign real-property interests. The Eleventh Circuit:

• Refused to address the purchase restriction on the merits due to standing deficiencies, signaling to future challengers the need for concrete, plaintiff-specific facts (domicile in China; post–July 1 purchases without preexisting equitable title; credible enforcement threat).
• Upheld, at the preliminary-injunction stage, Florida’s registration and attestation mechanisms against Equal Protection, FHA, Vagueness, and Preemption attacks—relying on Terrace and, alternatively, rational-basis review for non–LPR noncitizens, rejecting proxy and Arlington Heights theories on the current record, narrowing § 3604(a)’s reach, and finding the measures complementary to FIRRMA/CFIUS.

The dissent presses for strict scrutiny and conflict preemption, highlighting a fault line that may invite further review. For now, Shen sets two practical guideposts in the Eleventh Circuit: (1) alienage-based recording rules tied to federal “countries of concern” and framed as compliance obligations are likely to withstand preliminary attacks under rational-basis review; and (2) plaintiffs must carefully build standing and evidentiary records to reach the merits of purchase bans, where the most substantial constitutional questions remain open.