Palm Beach comptroller calls for dismissal of Israel bonds suit

Palm Beach County Clerk and Comptroller Joseph Abruzzo last week asked a Florida court to dismiss a lawsuit by pro-Palestinian county residents contesting his investment of county money in Israel bonds.

Abruzzo said the suit ignores his sovereign immunity as a county official and would require the court to ignore the doctrine separating his powers as comptroller from the powers of the court hearing the case, the Palm Beach County Circuit Court.

The plaintiffs’ attempts to gain standing by alleging the investments have caused them anxiety, depression and post-traumatic stress disorder are without precedent, he said.

“The logical end of any finding of standing through alleged psychological harms would open the floodgates for a virtually endless stream of disgruntled citizen lawsuits,” he said through his lawyers.

The plaintiffs are wrong to equate Abruzzo’s government role to that of a trustee in a trust, he said.

To pursue action as taxpayers in the court the plaintiffs must show “damages differing in kind rather than in degree from the damages suffered by the people as a whole.” However, “changes to the county’s investment revenue do not have impacts of a different kind upon different citizens,” Abruzzo’s attorneys said.

No Florida case has ever found psychological harm can be the “requisite ‘special injury’ to satisfy the standing requirement” of a suit, Abruzzo said.

The separation of powers doctrine says the court shouldn’t infringe on a government’s control over public money, he said.

Abruzzo asked the judges Thursday to dismiss the suit with prejudice.

David Piña, attorney for the group of residents filing the case, Break the Bonds, said in a statement, “The comptroller of Palm Beach County has violated his legal obligation to Palm Beach taxpayers in two primary ways: by making poor financial decisions with taxpayer money and by making financial decisions with taxpayer money based on his own political beliefs.”

S&P Global Ratings downgraded Israel’s bond to A from A-plus in October and Moody’s downgraded them to Baa1 from A2 in September. Break the Bonds said these are below the county’s investment policy for acceptable ratings. However, the policy says the ratings of the bonds “at time of purchase” must be at least A, which they were.

The plaintiffs are in part pointing to a law enacted by Gov. Ron DeSantis in 2023 aimed at ending the practice of “placing politics above the fiduciary duty to make the best financial decisions for beneficiaries.”