08-000212RU Amy Cat, Inc., D/B/A Cypress Manor And Abkey, Ltd., D/B/A Fuddruckers vs. Department Of Business And Professional Regulation Status: Closed DOAH Final Order on Wednesday, April 30, 2008.

Summary: Respondent`s "new policy" of treating SR licenses that have not remained in "continuous operation" as invalid and nonrenewable is a "rule" that violates Section 120.54(1)(a), Florida Statutes; prospective injunctive relief and attorney`s fees awarded.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AMY CAT, INC., d/b/a CYPRESS )

MANOR, and ABKEY, LTD, )

d/b/a FUDDRUCKERS RESTAURANT, )

)

Petitioners, )

)

vs. ) Case No. 08-0212RU

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Respondent. )

__________________________________)

FINAL ORDER

Pursuant to notice, an evidentiary hearing was conducted in

this case pursuant to Section 120.56, Florida Statutes, 1 before

Stuart M. Lerner, a duly-designated administrative law judge of

the Division of Administrative Hearings (DOAH), on January 25,

2008, in Tallahassee, Florida.

APPEARANCES

For Petitioners: Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Purnell

and Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302-0551

For Respondent: Michael J. Wheeler, Esquire

Department of Business and

Professional Regulation

Northwood Centre, Suite 40

Tallahassee, Florida 32399-2202

STATEMENT OF THE ISSUE

Whether Respondent's pronouncement that special restaurant

licenses issued prior to January 1, 1958, that have not remained

in "continuous operation" are thereby (as a result of their lack

of "continuous operation") rendered invalid pursuant to Section

561.20(5), Florida Statutes, and therefore not subject to

delinquent renewal pursuant to Section 561.27, Florida Statutes

(Challenged Statement) is a rule that violates Section

120.54(1)(a), Florida Statutes, as alleged by Petitioners.

PRELIMINARY STATEMENT

On January 10, 2008, Abkey, Ltd., d/b/a Fuddruckers (Abkey)

and Amy Cat, Inc. d/b/a Cypress Manor (Amy Cat) filed a petition

with DOAH pursuant to Section 120.56(4), Florida Statutes,

seeking an administrative determination that the Challenged

Statement violates Section 120.54(1)(a), Florida Statutes, and

further seeking an award of attorney's fees pursuant to Section

120.595(4), Florida Statutes. The matter was docketed as DOAH

Case No. 08-0212RU. On January 14, 2008, Abkey and Amy Cat

(hereinafter referred to collectively as "Petitioners") filed a

motion requesting that DOAH Case No. 08-0212RU be consolidated

with three other cases that had previously been consolidated:

DOAH Case Nos. 07-2508 (involving the proposed denial of Abkey's

application for delinquent renewal of its SR license); 07-4602

(involving the proposed denial of an application for delinquent

renewal of the SR license of Nick Maneros, II, Inc., d/b/a

Maneros of Hallandale); and 07-4692 (involving the proposed

denial of Amy Cat's application for delinquent renewal of its SR

license). On January 16, 2008, the Department of Business and

Professional Regulation, Division of Alcoholic Beverages and

Tobacco (DABT) filed a response to the motion, in which it

stated the following:

For the purpose of judicial economy and

being that the parties and issues are

similar, the Respondent defers to the

discretion of the Court regarding [the]

pending motion [to consolidate].

On January 18, 2008, the undersigned issued an order, which

provided as follows:

1. DOAH Case No. 07-0212RU is consolidated,

for purposes of hearing, with DOAH Case Nos.

07-2508, 07-4602, and 07-4692 pursuant to

Florida Administrative Code 28-106.108.

2. The hearing in these four consolidated

cases will be held on January 25, 2008, as

more specifically described in the Notice of

Hearing issued in DOAH Case Nos. 07-2508,

07-4602, and 07-4692 on December 5, 2007.

As noted above, the final hearing in DOAH Case Nos.

07-2508, 07-4602, 07-4692, and 08-0212RU was held on January 25,

2008, as scheduled. One witness, Eileen Klinger, the chief of

DABT's Bureau of Licensing, testified at the hearing. In

addition to Ms. Klinger's testimony, 20 exhibits (Petitioners'

Exhibits 1 through 19, and Respondent's Exhibit 1) were offered

and received into evidence.

The deadline for the filing of proposed final orders in DOAH

Case No. 07-0212RU was set at 15 days from the date of the filing

with DOAH of the hearing transcript.

The hearing Transcript (consisting of one volume) was filed

with DOAH on February 8, 2008.

On February 22, 2008, Petitioners filed an unopposed motion

requesting an extension of the deadline for the filing of

proposed final orders. By order issued February 25, 2008, the

motion was granted, and the parties were given until March 14,

2008, to file their proposed final orders.

The parties timely filed their proposed final orders on

March 14, 2008. They also, on that same date, filed a post-

hearing stipulation, agreeing that "Petitioners' SR licenses in

the above cases are per general law and not pursuant to any

special or local act."

The parties were subsequently given the opportunity to

present oral argument in support of their respective positions

in this case. Such argument was presented by telephone

conference call on April 14, 2008.

The parties were also given the opportunity to file post-

oral argument supplements to their Proposed Final Orders,

provided they did so no later than April 29, 2008. To date no

such supplements have been filed.

FINDINGS OF FACT

Based on the evidence adduced at hearing, and the record as

a whole, the following findings of fact are made:

1. There are various types of DABT-issued licenses

authorizing the retail sale of alcoholic beverages. Among them

are quota licenses, SRX licenses, and SR licenses. All three of

these licenses allow the licensee to sell liquor, as well as

beer and wine.

2. Quota licenses, as their name suggests, are limited in

number. The number of quota licenses available in each county

is based upon that county's population.

3. SRX and SR licenses are "special" licenses authorizing

the retail sale of beer, wine, and liquor by restaurants. There

are no restrictions on the number of these "special" licenses

that may be in effect (countywide or statewide) at any one time.

4. SRX licenses are "special restaurant" licenses that

were originally issued in or after 1958. 2

5. SR licenses are "special restaurant" licenses that were

originally issued prior to 1958.

6. For restaurants originally licensed after April 18,

1972, at least 51 percent of the licensed restaurant's total

gross revenues must be from the retail sale of food and non-

alcoholic beverages. 3

7. Restaurants for which an SR license has been obtained,

on the other hand, do not have to derive any set percentage or

amount of their total gross revenues from the retail sale of

food and non-alcoholic beverages.

8. DABT-issued alcoholic beverage licenses are subject to

annual renewal. 4

9. License holders who have not timely renewed their

licenses, but wish to remain licensed, may file an Application

for Delinquent Renewal (on DABT Form 6015).

10. Until recently, it was DABT's longstanding policy and

practice to routinely grant applications for the delinquent

renewal of SR and other alcoholic beverage licenses, regardless

of the reason for the delinquency.

11. DABT still routinely grants applications to

delinquently renew alcoholic beverage licenses other than SR

licenses, but it now has a "new policy" in place with respect to

applications for the delinquent renewal of SR licenses. The

"new policy" is to deny all such applications based upon these

SR licenses' not having been in "continuous operation," action

that, according to DABT, is dictated by operation of Section

561.20(5), Florida Statutes, a statutory provision DABT now

claims it had previously misinterpreted when it was routinely

granting these applications.

12. Relying on Section 561.20(5), Florida Statutes, to

blanketly deny all applications for the delinquent renewal of SR

licenses was the idea of Eileen Klinger, the head of DABT's

Bureau of Licensing. She directed her licensing staff to

implement the "new policy" after being told by agency attorneys

that this "was the appropriate thing [from a legal perspective]

to do."

13. As applicants applying to delinquently renew their SR

licenses (which were both originally issued in 1956),

Petitioners are substantially affected by DABT's "new policy"

that SR licenses cannot be delinquently renewed because they

have not been in "continuous operation," as that term is used in

Section 561.20(5), Florida Statutes. Their applications for the

delinquent renewal of their licenses would have been approved

had the status quo been maintained and this "new policy" not

been implemented.

14. Abkey filed its application (on DABT Form 6015) for

the delinquent renewal of its SR license (which had been due for

renewal on March 31, 2005) on February 21, 2007. On the

application form, Abkey gave the following "explanation for not

having renewed during the renewal period": "Building was sold.

Lost our lease."

15. On April 2, 2007, DABT issued a Notice of Intent to

Deny Abkey's application. DABT's notice gave the following

reason for its intended action:

The request for delinquent renewal of this

license is denied. Florida Statute

561.20(5) exempted restaurant licenses

issued prior to January 1, 1958 from

operating under the provisions in 561.20(4)

as long as the place of business was in

continuous operation. This business failed

to renew its license on or before March 31,

2005, therefore it did not comply with the

requirements and is no longer valid.

16. Amy Cat filed its application (on DABT Form 6015) for

the delinquent renewal of its SR license (which had been due for

renewal on March 31, 1999) on December 6, 2006. On the

application form, Amy Cat gave the following "explanation for

not having renewed during the renewal period": "Building was

closed."

17. On June 8, 2007, DABT issued a Notice of Intent to

Deny Amy Cat's application. DABT's notice gave the following

reason for its intended action:

The request for delinquent renewal of this

license is denied. Florida Statute

561.20(5) exempted restaurant licenses

issued prior to January 1, 1958 from

operating under the provisions in 561.20(4)

as long as the place of business was in

continuous operation. This business failed

to renew its license on or before March 31,

1999, therefore it did not comply with the

requirements and is no longer valid.

SR licenses will not be allowed to be moved

from the location where the license was

originally issued.

CONCLUSIONS OF LAW

18. The instant challenge is being made pursuant to

Section 120.56(4), Florida Statutes, which provides, in

pertinent part, as follows:

(a) Any person substantially affected by an

agency statement may seek an administrative

determination that the statement violates s.

120.54(1)(a). The petition shall include

the text of the statement or a description

of the statement and shall state with

particularity facts sufficient to show that

the statement constitutes a rule under s.

120.52 and that the agency has not adopted

the statement by the rulemaking procedure

provided by s. 120.54.

(b) The administrative law judge may extend

the hearing date beyond 30 days after

assignment of the case for good cause. If a

hearing is held and the petitioner proves

the allegations of the petition, the agency

shall have the burden of proving that

rulemaking is not feasible and practicable

under s. 120.54(1)(a).

(c) The administrative law judge may

determine whether all or part of a statement

violates s. 120.54(1)(a). The decision of

the administrative law judge shall

constitute a final order. [DOAH] shall

transmit a copy of the final order to the

Department of State and the committee. The

Department of State shall publish notice of

the final order in the first available issue

of the Florida Administrative Weekly.

(d) When an administrative law judge enters

a final order that all or part of an agency

statement violates s. 120.54(1)(a), the

agency shall immediately discontinue all

reliance upon the statement or any

substantially similar statement as a basis

for agency action.

* * *

(f) All proceedings to determine a

violation of s. 120.54(1)(a) shall be

brought pursuant to this subsection. A

proceeding pursuant to this subsection may

be consolidated with a proceeding under any

other section of this chapter. . . .

19. Section 120.54(1)(a), Florida Statutes, the statutory

provision that Petitioners claim in their challenge DABT has

violated, provides as follows:

Rulemaking is not a matter of agency

discretion. Each agency statement defined

as a rule by s. 120.52 shall be adopted by

the rulemaking procedure provided by this

section as soon as feasible and practicable.

1. Rulemaking shall be presumed feasible

unless the agency proves that:

a. The agency has not had sufficient time

to acquire the knowledge and experience

reasonably necessary to address a statement

by rulemaking;

b. Related matters are not sufficiently

resolved to enable the agency to address a

statement by rulemaking; or

c. The agency is currently using the

rulemaking procedure expeditiously and in

good faith to adopt rules which address the

statement.

2. Rulemaking shall be presumed

practicable to the extent necessary to

provide fair notice to affected persons of

relevant agency procedures and applicable

principles, criteria, or standards for

agency decisions unless the agency proves

that:

a. Detail or precision in the

establishment of principles, criteria, or

standards for agency decisions is not

reasonable under the circumstances; or

b. The particular questions addressed are

of such a narrow scope that more specific

resolution of the matter is impractical

outside of an adjudication to determine the

substantial interests of a party based on

individual circumstances.

"When section 120.54(1)(a) is read together with section

120.56(4), it becomes clear that the purpose of a section

120.56(4) proceeding is to force or require agencies [that

desire to continue to rely on agency statements defined as

rules] into the rule adoption process. It provides [these

agencies] with incentives to promulgate [these statements as]

rules through the formal rulemaking process." Osceola Fish

Farmers Association, Inc., v. Division of Administrative

Hearings , 830 So. 2d 932, 934 (Fla. 4th DCA 2002).

20. "An agency statement constituting a rule may be

challenged pursuant to Section 120.56(4), Florida Statutes, only

on the ground that 'the agency has not adopted the statement by

the rulemaking procedure provided by s. 120.54.'" Zimmerman v.

Department of Financial Services, Office of Insurance

Regulation , No. 05-2091RU, slip op. at 11 (Fla. DOAH August 24,

2005)(Summary Final Order of Dismissal); see also Southwest

Florida Water Management District v. Charlotte County , 774 So.

2d 903, 908-09 (Fla. 2d DCA 2001)("The basis for a challenge to

an agency statement under this section [Section 120.56(4),

Florida Statutes] is that the agency statement constitutes a

rule as defined by section 120.52(15), Florida Statutes (Supp.

1996), but that it has not been adopted by the rule-making

procedure mandated by section 120.54. In the present case, the

challenges to the existing and proposed agency statement on the

grounds that they represent an invalid delegation of legislative

authority are distinct from a section 120.56(4) challenge that

the agency statements are functioning as unpromulgated rules.");

Florida Association of Medical Equipment Services v. Agency for

Health Care Administration , No. 02-1314RU, slip op. at 6 (Fla.

DOAH October 25, 2002)(Order on Motions for Summary Final

Order)("[I]n a Section 120.56(4) proceeding which has not been

consolidated with a proceeding pursuant to Section 120.57(1)(e),

the issue whether a rule-by-definition is substantively invalid

for reasons set forth in Section 120.52(8)(b)-(g), Florida

Statutes, should not be reached. That being so, the ultimate

issues in this case are whether the alleged agency statements

are rules-by-definition and, if so, whether their existence

violates Section 120.54(1)(a)."); and Johnson v. Agency for

Health Care Administration , No. 98-3419RU, 1999 Fla. Div. Adm.

Hear. LEXIS 5180 *15 (Fla. DOAH May 18, 1999)(Final Order of

Dismissal)("It is apparent from a reading of subsection (4) of

Section 120.56, Florida Statutes, that the only issue to be

decided by the administrative law judge in a proceeding brought

under this subsection is 'whether all or part of [the agency]

statement [in question] violates s. 120.54(1)(a),' Florida

Statutes . . . .").

21. The sole remedy available under Section 120.56(4) for

such a violation is prospective injunctive relief. See

Zimmerman , slip op. at 11 ("The statute [Section 120.56(4),

Florida Statutes] is forward-looking in its approach. It is

designed to prevent future agency action based on statements not

adopted in accordance with required rulemaking procedures, not

to provide a remedy for final agency action (based on such

statements) that has already been taken."). If a violation is

found, the agency must, pursuant to Section 120.56(4)(d),

"immediately discontinue all reliance upon the statement or any

substantially similar statement as a basis for agency action."

See Agency for Health Care Administration v. HHCI Ltd.

Partnership , 865 So. 2d 593, 596 (Fla. 1st DCA 2004). In

addition, "unless the agency demonstrates that the statement is

required by the Federal Government to implement or retain a

delegated or approved program or to meet a condition to receipt

of federal funds," it must also pay the challenger's reasonable

costs and attorney's fees pursuant to Section 120.595(4),

Florida Statutes, which provides as follow:

CHALLENGES TO AGENCY ACTION PURSUANT TO

SECTION 120.56(4).

(a) Upon entry of a final order that all or

part of an agency statement violates s.

120.54(1)(a), the administrative law judge

shall award reasonable costs and reasonable

attorney's fees to the petitioner, unless

the agency demonstrates that the statement

is required by the Federal Government to

implement or retain a delegated or approved

program or to meet a condition to receipt of

federal funds.

(b) Notwithstanding the provisions of

chapter 284, an award shall be paid from the

budget entity of the secretary, executive

director, or equivalent administrative

officer of the agency, and the agency shall

not be entitled to payment of an award or

reimbursement for payment of an award under

any provision of law.

22. Not every "agency statement" is a " rule " as defined by

Section 120.52(15), Florida Statutes, which provides as follows:

"Rule" means each agency statement of

general applicability that implements,

interprets, or prescribes law or policy or

describes the procedure or practice

requirements of an agency and includes any

form which imposes any requirement or

solicits any information not specifically

required by statute or by an existing rule.

The term also includes the amendment or

repeal of a rule. The term does not

include:

(a) Internal management memoranda which do

not affect either the private interests of

any person or any plan or procedure

important to the public and which have no

application outside the agency issuing the

memorandum.

(b) Legal memoranda or opinions issued to

an agency by the Attorney General or agency

legal opinions prior to their use in

connection with an agency action.

(c) The preparation or modification of:

1. Agency budgets.

2. Statements, memoranda, or instructions

to state agencies issued by the Chief

Financial Officer or Comptroller as chief

fiscal officer of the state and relating or

pertaining to claims for payment submitted

by state agencies to the Chief Financial

Officer or Comptroller.

3. Contractual provisions reached as a

result of collective bargaining.

4. Memoranda issued by the Executive Office

of the Governor relating to information

resources management.

Only agency statements of "general applicability," that is,

those statements which are intended by their own effect to

create or adversely effect rights, to require compliance, or to

otherwise have the direct and consistent effect of law, fall

within this definition. See Florida Department of Financial

Services v. Capital Collateral Regional Counsel-Middle Region ,

969 So. 2d 527, 530 (Fla. 1st DCA 2007); Department of Highway

Safety and Motor Vehicles v. Schluter , 705 So. 2d 81, 82 (Fla.

1st DCA 1997); Department of Revenue v. Vanjaria Enterprises,

Inc. , 675 So. 2d 252, 255 (Fla. 5th DCA 1996); Balsam v.

Department of Health and Rehabilitative Services , 452 So. 2d

976, 977-978 (Fla. 1st DCA 1984); and McDonald v. Department of

Banking and Finance , 346 So. 2d 569, 581 (Fla. 1st DCA 1977).

23. Such statements qualify as "rules" even if they have

not been reduced to writing. See Schluter , 705 So. 2d at 86

("[W]e find no support for Judge Benton's argument that an

agency's policy statement must be in writing before it can be

considered a nonadopted rule."); Department of Health, Board of

Pharmacy v. Rx Network of South Florida, LLC , Nos. 02-2976, 02-

2977, 02-2978PL, and 02-2980PL, 2003 Fla. Div. Adm. Hear. LEXIS

1024 *93 (Fla. DOAH January 10, 2003)(Recommended Order)("The

unwritten form of an agency statement does not prevent the

statement from satisfying the statutory definition of a rule in

Section 120.52(15)."); and Florida Association of Insurance

Agents and Professional Insurance Agents of Florida v.

Department of Insurance , No. 01-1427RU, 2001 Fla. Div. Adm.

Hear. LEXIS 2732 *43 (Fla. DOAH August 21, 2001)(Final

Order)("Because the focus is on effect rather than form, a

statement need not be in writing to be a rule-by-definition.").

24. The "agency statement" Petitioners are challenging in

the instant case provides that SR licenses (that is, special

restaurant licenses issued prior to January 1, 1958) that have

not remained in "continuous operation" are thereby rendered

invalid pursuant to Section 561.20(5), Florida Statutes, and

therefore not subject to delinquent renewal pursuant to Section

561.27, Florida Statutes (Challenged Statement). This is (as

DABT itself described it in its Proposed Final Order) a "new

policy," 5 the product of DABT's having determined that its prior

practice of routinely granting applications for the delinquent

renewal of SR licenses was inconsistent with a proper

interpretation of Section 561.20(5), which for the past

approximately 50 years has provided as follows:

Provisions of subsections (2) and (4) as

amended by chapter 57-773, Laws of Florida,

shall take effect January 1, 1958, and shall

apply only to those places of business

licensed to operate after January 1, 1958,

and shall in no manner repeal or nullify any

license issued under provisions of law which

are now operating or will operate prior to

the effective date January 1, 1958; and all

such places of business shall be exempt from

the provisions of this law so long as they

are in continuous operation.

25. Section 1 of Chapter 57-773, Laws of Florida, amended

Subsection (2) of Section 561.20, Florida Statutes, to read as

follows:

No such limitation of the number of licenses

as herein provided shall prohibit the

issuance of a special license to any bona

fide hotel, motel, or motor court of not

less than fifty (50) guest rooms or to any

bona fide restaurant containing all

necessary equipment and supplies for and

serving full course meals regularly and

having accommodations at all times for

service for two hundred (200) or more

patrons at tables occupying more than four

thousand (4000) square feet of space,

providing, however, that any restaurant

granted special license hereunder shall be

prohibited from selling alcoholic beverages

in packages for consumption off the

premises, and from operating as a package

store, and providing further that the

Beverage Director shall suspend any such

license if such restaurant ceases to be a

bona fide restaurant as required as a

prerequisite for obtaining such license, and

providing that no intoxicating beverage

shall be sold under such license after the

hours of serving food has ceased; provided

however, that any licenses heretofore or

hereafter issued to any hotel, motel, motor

court, or restaurant under the provisions of

general law shall not be moved to a new

location, such license being valid only on

the premises of such hotel, motel, motor

court or restaurant; provided, further, that

licenses issued to hotels, motels, motor

courts or restaurants under the general law

and held by such hotels, motels, motor

courts, or restaurants on May 24, 1947,

shall be counted in the quota limitation

contained in sub-section (1) herein; and

provided further that any license issued for

any hotel, motel, motor court or restaurant

under the provisions of this law shall be

issued only to the owner of said hotel,

motel, motor court or restaurant, or, in the

event the hotel, motel, motor court, or

restaurant is leased, to the lessee of the

hotel, motel, motor court, or restaurant and

the license shall remain in the name of said

owner or lessee so long as the license is in

existence. Any special license now in

existence heretofore issued under the

provision of this law cannot be renewed

except in the name of the owner of the

hotel, motel, motor court, or restaurant,

or, in the event the hotel, motel, motor

court, or restaurant is leased, in the name

of the lessee of the hotel, motel, motor

court, or restaurant, in which the license

is located and must remain in the name of

said owner or lessee so long as the license

is in existence. Any license issued under

this section shall be marked "Special."

After various subsequent amendments, Subsection (2) of Section

561.20 now reads, in pertinent part (that is, with respect to

restaurants), as follows:

(a) No such limitation of the number of

licenses as herein provided [in Subsection

1] shall henceforth prohibit the issuance of

a special license to:

* * *

4. Any restaurant having 2,500 square feet

of service area and equipped to serve 150

persons full course meals at tables at one

time, and deriving at least 51 percent of

its gross revenue from the sale of food and

nonalcoholic beverages; however, no

restaurant granted a special license on or

after January 1, 1958, pursuant to general

or special law shall operate as a package

store, nor shall intoxicating beverages be

sold under such license after the hours of

serving food have elapsed; or

* * *

However, any license heretofore issued to

any . . . restaurant . . . under the general

law shall not be moved to a new location,

such license being valid only on the

premises of such . . . restaurant. Licenses

issued to . . . restaurants under the

general law and held by such . . .

restaurants on May 24, 1947, shall be

counted in the quota limitation contained in

subsection (1). . . . Any special license

now in existence heretofore issued under the

provisions of this law cannot be renewed

except in the name of the owner of the . . .

restaurant or, in the event the . . .

restaurant is leased, in the name of the

lessee of the . . . restaurant in which the

license is located and must remain in the

name of the owner or lessee so long as the

license is in existence. Any license issued

under this section shall be marked

"Special," and nothing herein provided shall

limit, restrict, or prevent the issuance of

a special license for any restaurant . . .

which shall hereafter meet the requirements

of the law existing immediately prior to the

effective date of this act, if construction

of such restaurant has commenced prior to

the effective date of this act and is

completed within 30 days thereafter, or if

an application is on file for such special

license at the time this act takes effect;

and any such licenses issued under this

proviso may be annually renewed as now

provided by law. Nothing herein prevents an

application for transfer of a license to a

bona fide purchaser of any . . . restaurant

by the purchaser of such facility or the

transfer of such license pursuant to law.

* * *

26. Section 2 of Chapter 57-773, Laws of Florida, amended

Subsection (4) of Section 561.20, Florida Statutes, to read as

follows:

The limitations herein prescribed shall not

affect or repeal any existing or future

local or special act relating to the

limitation by population and exceptions or

exemptions from such limitation by

population of such licenses within any

incorporated city or town or county that may

be in conflict herewith.

A second sentence, which reads as follows, has since been added

to Subsection (4) of Section 561.20:

Any license issued under a local or special

act relating to the limitation by population

shall be subject to all requirements and

restrictions contained in the Beverage Law

that are applicable to licenses issued under

subsection (1).

27. As noted by the Third District Court of Appeal in

Davidson v. Coral Gables , 119 So. 2d 704, 707 (Fla. 3d DCA

1960), prior to the effective date of Chapter 57-773, Subsection

(4) of Section 561.20, Florida Statutes, read as follows:

The limitations herein prescribed shall be

cumulative to and shall not affect or repeal

any existing or future local or special act

relating to the limitation by population of

such licenses within any incorporated city

or town or county that may be in conflict

herewith.

The Davidson court further observed:

The earlier law [the pre-Chapter 57-773

version of Subsection (4) of Section 561.20]

stated that the limitations (and that would

include exceptions to limitations) which the

Beverage Law prescribed were cumulative and

did not affect existing population

limitations, imposed by cities, which might

be in conflict therewith. It is important

to note that the earlier law did not state,

as does the present law [Subsection (4) of

Section 561.20, as amended by Chapter 57-

773], that the limitations therein shall not

affect or repeal "exceptions or exemptions

from such limitations by population" by

cities under their charters which are in

conflict therewith. Thus in the Abood case,

a limitation exception provided in the state

law, allowing licenses in restaurants

meeting certain requirements, was held to

prevail over a city's limitations which did

not make such an exception.

The present law presents a different

situation. First, the word cumulative,

which had appeared in the earlier law, was

left out, and, more important, where the

earlier law had said that the state

regulations would not affect or repeal city

limitations imposed by population, this

amendment added that a city's regulations as

to exceptions and exemptions to population

limitations were not thereby affected or

repealed.

Id. at 707-08; see also Miami Beach v. State , 129 So. 2d 696,

700 (Fla. 3d DCA 1961)("[T]he State Beverage Law provides that

its restrictions as to population and its exceptions to

population quotas, such as the created special licenses for

hotels or restaurants, shall not prevail over contrary

provisions relating thereto in municipalities. This was

expressly provided for in § 561.20(4), Fla. Stat., . . . . As

was pointed out by this court in Davidson v. City of Coral

Gables , Fla. App. 1960, 119 So.2d 704, supra , the holding in the

earlier case of Abood v. City of Jacksonville , Fla. 1955, 80

So.2d 443, that the provision of the State Beverage Law for a

special license in restaurants should prevail over a contrary

regulation within the City of Jacksonville, was no longer

applicable because of the subsequent amendment to the beverage

law, now appearing as subsection 4 of § 561.20, Fla. Stat.,

F.S.A. At the time the Abood case was decided, subsection 4 of

§ 561.20 of the Beverage Law provided the limitations of the

state law would not affect or repeal any conflicting local or

special act 'relating to the limitation by population . . . of

such licenses within any incorporated city.' Effective

January 1, 1958, subsection 4 of § 561.20 was amended to read

that it would not affect or repeal such conflicting local

provisions of incorporated cities which related not only to the

limitations by population but to 'exceptions or exemptions from

such limitation by population of such licenses within any

incorporated city.' By virtue of that change in 1958 in

subsection 4 of § 561.20, it was held in the Davidson case that

the exception to population limitation created by the State

Beverage Law which provided for special liquor licenses for

restaurants meeting certain stated requirements could not be

used as a basis for forcing the City of Coral Gables to issue

such a license to a restaurant applicant, when the city had made

provision for special licenses for hotels but had not provided

for such special licenses for restaurants.").

28. The third and final section of Chapter 57-773, Laws of

Florida, initially just provided that "[t]his act shall take

effect January 1, 1958," but it was subsequently amended by

Chapter 57-1991, Laws of Florida, to read as follows:

This act shall take effect January 1, 1958,

and shall apply only to those places of

business licensed to operate after

January 1, 1958, and shall in no manner

repeal or nullify any license issued under

provisions of law which are now operating or

will operate prior to the effective date

January 1, 1958; and all such places of

business shall be exempt from the provisions

of this law so long as they are in

continuous operation.

This section of Chapter 57-773, as amended by Chapter 57-1991,

is now codified verbatim in Subsection (5) of Section 561.20,

Florida Statutes, except that the phrase, "Provisions of

subsections (2) and (4) as amended by chapter 57-773, Laws of

Florida" has been substituted for "This act," and there is a

semi-colon, instead of a comma, after the third and last

reference to January 1, 1958.

29. DABT's "new policy" of routinely denying applications

for the delinquent renewal of SR licenses is premised on its

recently revised view of the meaning and effect of the language

in Subsection (5) of Section 561.20, Florida Statutes,

"exempt[ing] [these licenses] from operating under the

provisions [of Subsection (4) of the statute] as long as the

place of business was in continuous operation." DABT now takes

the position that, in light of this statutory language, if a

"business [has] failed to [timely] renew [its] SR license," it

is not in compliance with the "continuous operation" requirement

of Subsection (5) and such non-compliance automatically makes

the business' license "no longer valid" and therefore

nonrenewable.

30. This "new policy" of DABT's, founded on its freshly

arrived-at interpretation of the provisions of Section 561.20,

Florida Statutes, is a "statement of general applicability," as

that term is used in Section 120.52(15), Florida Statutes. By

its own effect, it adversely affects the rights of SR licensees

seeking to delinquently renew their licenses, such as Abkey and

Amy Cat, whose licenses would have been renewed under the "old

policy" it replaced. Furthermore, it does not fall within any

of the exceptions set forth in Section 120.52(15)(a) through

(c), Florida Statutes. It therefore is a "rule," as defined in

Section 120.52(15). See Department of Natural Resources v.

Wingfield Development Co. , 581 So. 2d 193, 196 (Fla. 1st DCA

1991)("In Balsam v. Department of Health and Rehabilitative

Services , 452 So.2d 976, 977-978 (Fla. 1st DCA 1984), this court

held that any agency statement is a rule if it purports in and

of itself to create certain rights and adversely affect others,

or if it serves by its own effect to create rights, or to

require compliance, or otherwise to have the direct and

consistent effect of law. The limitations, conditions and

requirements contained in the letter of April 4, 1988, adversely

affect the substantive rights of others. The letter implements,

interprets or prescribes law or policy, describes procedure or

practice requirements of the agency, and imposes requirements or

information not specifically required by statute or by existing

rule. The letter, therefore, constitutes a rule within the

meaning of the law . . . .").

31. DABT argues that this "challenged agency statement

does not constitute a rule" because it merely repeats, and does

not "add[] to, take[] away [from] or otherwise alter" what

Section 561.20(5), Florida Statutes, already requires. It is

true that an agency statement "which simply reiterates the

legislature's statutory mandate and does not place upon the

statute an interpretation that is not readily apparent from its

literal reading, nor in and of itself purport[s] to create

rights, or require compliance, or to otherwise have the direct

and consistent effect of the law, is not an unpromulgated rule,

and actions based upon such an interpretation are permissible

without requiring an agency to go through rule making." St.

Francis Hospital, Inc. v. Department of Health and

Rehabilitative Services , 553 So. 2d 1351, 1354 (Fla. 1st DCA

1989); see also National Foundation to Prevent Child Sexual

Abuse, Inc., v. Department of Law Enforcement , No. 07-4898RU,

2007 Fla. Div. Adm. Hear. LEXIS 648 *40 (Fla. DOAH November 27,

2007)(Summary Final Order)("Significantly, the Challenged

Statement does not, by its own terms, establish any new fee

requirements or procedures. Rather, it attempts merely to

summarize, for the benefit of interested members of the public,

existing requirements and procedures that have been established

elsewhere . . . ."); Reynolds v. Board Of Trustees of the

Internal Improvement Trust Fund , No. 03-4478RU, 2004 Fla. ENV

LEXIS 222 *15-16 (Fla. DOAH February 20,2004)(Final

Order)("Lastly, regarding the first statement challenged, the

history surrounding driving on the beach and regulation by the

BOT indicates that the Legislature has limited BOT's

jurisdiction to regulate driving on the beach by Section 161.58,

Florida Statutes. The challenged statement is [a] re-statement

of the scheme of statutory regulation, and not a statement of

BOT policy."); and Aloha Utilities, Inc. v. Public Service

Commission , No. 97-2485RU, 1998 Fla. Div. Adm. Hear. LEXIS 5497

*29 (Fla. DOAH 1998)(Final Order)("Statements simply

reiterating statutory or rule requirements also are not rules

under Sections 120.52(15) and 120.74(1)(d), Florida Statutes

(1997)."). The Challenged Statement in the instant case,

however, gives Section 561.20(5) a meaning that is not readily

apparent from a literal reading of the statute. Nowhere in

Section 561.20(5) does it specifically state that the necessary

consequence of an SR licensee's failure to satisfy the statute's

"continuous operation" proviso is the automatic invalidation of

its license, regardless of the existence or contents of any

local or special act governing the sale of alcoholic beverages

in the city, town, or county where the licensee's business is

located. To accept DABT's argument that the Challenged

Statement is a mere reiteration of Section 561.20(5) would

require the undersigned to disregard the language of the statute

and add words not placed there by the Legislature. This the

undersigned cannot do.

32. Although the Challenged Statement is a "rule," as

defined in Section 120.52(15), Florida Statutes, it has not been

adopted in accordance with the rulemaking procedures set forth

in Section 120.54, Florida Statutes (nor has the rulemaking

process even commenced). DABT has neither argued, nor presented

evidence, that engaging in such rulemaking is now, or has at any

time been, either infeasible or impracticable. Accordingly,

the existence of the Challenged Statement violates Section

120.54(1)(a) and therefore, pursuant to Section 120.56(4)(d),

Florida Statutes, DABT must "immediately discontinue all

reliance upon the statement or any substantially similar

statement as a basis for agency action."

33. There having been no showing made that the Challenged

Statement "is required by the Federal Government to implement or

retain a delegated or approved program or to meet a condition to

receipt of federal funds." Petitioners are entitled, pursuant

to Section 120.595(4)(a), Florida Statutes, to recover a

reasonable sum for the attorneys' fees and costs they have

incurred in the prosecution of this action. See Security Mutual

Life Insurance Co. v. Department of Insurance , 707 So. 2d 929,

930 (Fla. 1st DCA 1998).

ORDER

Based on the foregoing, it is

ORDERED:

The relief requested by Petitioner in its amended petition

filed with DOAH pursuant to Section 120.56(4), Florida Statutes

(to wit: an administrative determination that the Challenged

Statement violates Section 120.54(1)(a), Florida Statutes, and

an award pursuant to Section 120.595(4), Florida Statutes) is

granted.

The undersigned reserves jurisdiction to determine, if

necessary, the amount of attorneys' fees and costs Petitioners

should be awarded. Should the parties be unable to amicably

resolve this issue, Petitioners shall file with DOAH a written

request that the undersigned resolve the matter. No such

request filed more than 60 days of the date of this Final Order

will be considered.

DONE AND ORDERED this 30th day of April, 2008, in

Tallahassee, Leon County, Florida.

S

___________________________________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of April, 2007.

ENDNOTES

1 Unless otherwise noted, all references in this Final Order to

Florida Statutes are to Florida Statutes (2007).

2 See Fla. Admin. Code R. 61A-3.0141(1)("The suffix 'SRX' shall

be made a part of the license numbers of all such [special

restaurant] licenses issued after January 1, 1958.").

3 See Fla. Admin. Code R. 61A-3.0141(3).

4 See Fla. Admin. Code R. 61A-3.0101(1).

5 See Schlute r, 705 So. 2d at 83 ("The word 'policy,' used in

each of the three statements, is not a term of art. It has a

commonly understood meaning. It is defined by one source as 'a

principle, plan, or course of action, as pursued by a

government, organization, individual, etc.' Webster's New World

Dictionary 1102 (2d college ed. 1980). We therefore affirm the

ALJ's order as to his determination that the final three

policies constituted invalid, nonadopted rules.").

COPIES FURNISHED :

Scott Boyd, Executive Director

and General Counsel

Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32399-1300

Liz Cloud, Program Administrator

Administrative Code

Department of State

R. A. Gray Building, Suite 101

Tallahassee, Florida 32399

Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Purnell and Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302-0551

Michael J. Wheeler, Esquire

Department of Business and Professional Regulation

Northwood Centre, Suite 40

Tallahassee, Florida 32399-2202

Cynthia Hill, Director

Division of Alcoholic Beverages and Tobacco

Department of Business and Professional Regulation

Northwood Centre, Suite 40

1940 North Monroe Street

Tallahassee, Florida 32399-2202

Ned Luczynski, General Counsel

Department of Business and Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pursuant to Section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the original

Notice of Appeal with the agency clerk of the Division of

Administrative Hearings and a copy, accompanied by filing fees

prescribed by law, with the District Court of Appeal, First

District, or with the District Court of Appeal in the Appellate

District where the party resides. The notice of appeal must be

filed within 30 days of rendition of the order to be reviewed.