15-005037 Kirk Ziadie vs. Department Of Business And Professional Regulation, Division Of Pari-Mutuel Wagering Status: Closed Recommended Order on Wednesday, November 25, 2015.

Summary: Respondent failed to prove violation of section 550.2415(1)(a), Florida Statutes, because the procedures followed in conducting drug tests constituted an unadopted rule and were contrary to the adopted rule.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KIRK ZIADIE,

Petitioner,

vs. Case No. 15 - 5037

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

_______________________________/

RECOMMENDED ORDER

This case came before Administrative Law Judge F. Scott

Boyd for final hearing by video teleconference on September 30

and October 1 , 201 5 , at sites in Lauderdale Lakes and

Tallahassee, Florida .

APPEARANCES

For Petitioner: Bradf ord J. Beilly, Esquire

Bradford and Strohsahl, P.A.

1144 Southeast Third Avenue

Fort Lauderdale, Florida 33316

For Respondent: Caitlin R. Mawn, Esquire

Marisa G . Button, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 40

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue is w hether Petitioner ' s application for renewal

of his professional occupational license as a thoroughbred horse

trainer should be granted.

PRELIMINARY STATEMENT

By letter dated August 26, 2015, the Department of Business

and Professional Regulation, Division of Pari - Mutuel Wagering

(D ivision or Respondent) , notified Mr. Kirk Ziadie (Mr. Ziadie

or Petitioner) that his application for renewal of his pari -

mutuel professional occupational license would be denied based

upon alleged violations of Florida S tatutes and implementing

administrative rules .

Petitioner disputed material facts alleged in the denial

and timely requested an administrative hearing on August 2 8,

2015 . T he case was forwarded to the Division of Administrative

Hearings (DOAH) for assign ment of an administrative law judge on

September 14, 2015.

The parties stipulat ed to certain facts , which w ere

accepted at hearing and are included among those set forth

below. Petitioner testified and presented the live testimony of

Mr. Kevin Scheen, a s tate s teward of the Division; and Mr. Kent

St i rling, the e xecutive d irector of the Florida Horsemen ' s

Benevolent and Protective Association. Petitioner offered two

exhibits at hearing , P - 1 and P - 2, and late - filed E xhibit P - 3

( the stipulated testimony of Dr. Steven A. Barker , a

neurochemist and s ection h ead of the Louisiana Animal Disease

Diagnostic Laboratory at the Louisiana State University School

of Veterinary Medicine, unavailable as a witness ) , all of which

were admitted into evidence . Respondent pr esented the live

testimony of Division employees: Ms. Tamm i e Erskine, a

detention barn supervisor ; Dr. William Milton Watson, III,

v eterinary m anager ; Ms. Jill Blackman, c hief o perations o fficer;

and Mr. Ivan Irrutia, a c hief v eterinarian ' s a ssistant .

Respondent offered t en exhibits , R - 1 (a transcript of former

testimony and curriculum vitae of Dr. Cynthia Cole, a

veterinarian pharmacologist and d irector of r esearch and

d evelopment at Mars Veterinary , admitted by stipulation ) through

R - 10, all of which were admitted into evidence. O fficial

recognition was given to the provisions of chapter 550, Florida

Statutes , and Florida Administrative Code Rules 61D - 2.002, 61D -

6.005, 61D - 6.008, and 61D - 6.011.

The two - volume Transcript of the hearing was filed at DOAH

on October 7 , 201 5 . Both parties timely filed p roposed

r ecommended o rders that were carefully considered in the

preparation of this Recommended Order .

FINDINGS OF FACT

1. The Division is the state agency charged with

regulating pari - mutuel wagering in the s tate of Florida,

pursuant to chapter 550, Florida Statutes (2015) . 1/

2 . At all times material hereto, Mr. Ziadie held a pari -

mutuel wagering individual occupational license, number 4267 75 -

1021, issued by the Division.

3 . At all times material hereto, Mr. Ziadie raced horses

at Gulfstream Park, a facility operated by a permitholder

a uthorized to conduct pari - mutuel wagering.

4 . At all times material hereto, Mr. Ziadie was subject to

chapter 550 and implementing rules in Florida Administrative

Code Chapter 61D - 6 .

5 . Mr. Zaidie applied for renewal of his professional

occupational license . That application was denied by the

D iv ision by letter dated August 26, 2015. The letter stated

that denial was based on Mr. Ziadie ' s violation of section

550.2415(1)(a)(relating to the racing of animals with restricted

drugs) and rule 61D - 6.002(1)(holding the trainer of record as an

" absolute insurer " of the condition of his horses) on

February 6, 2015, April 24, 2015, and May 9, 2015.

6 . As stipulated by the parties at hearing, but for the

alleged offenses, Mr. Ziadie met all requirements for renewal ,

and the D ivision would have renewed his license .

7 . Mr. Ziadie will be unable to continue as a thoroughbred

horse trainer in Florida if his license is not renewed . H e is

substantially affected by the D ivision ' s intended action.

8 . The equine detention barn is the sit e at each licensed

racetrack in Florida where employees of the Division obtain

urine and blood samples from racehorses.

9. At all times material hereto, the 2010 Equine Detention

Barn Procedures Manual (the Manual) was in effect.

10 . The Manual prescri bes detailed procedures for

collecti ng blood samples from race horses, spinning the blood in

the centrifuge to extract the serum, pouring of the serum into

the evergreen tube, sealing of the evergreen tube with evidence

tape, and mailing of the s pecimen to the laboratory for testing.

11 . The Division p ublishes the Manual under the direction

of its deputy director and distributes it to every employee that

works at a detention barn , including the state veterinarian, the

chief veterinary assistant, other v eterinary a ssistants ,

d etention b arn s ecurity g uards, and d etention b arn s upervisors.

The Manual is not made available to the general public. The

Manual is an official publication of the Division used at all

horse racing facilities in the s tate of Florida and was last

updated on June 25, 2010.

12 . At all times material hereto, Mr. Ziadie was the

trainer of record of the thoroughbred horse " GET CREATIVE. "

13 . On or about February 6, 2015, " GET CREATIVE " finished

in first place in the third race at Gulfstream Park .

14 . As stipulated at hearing, a blood sample was taken

from " G ET CREATIVE " after the race using the procedures

described in the Manual . After processing, extracted serum from

the blood was numbered as sample number 798044.

15 . The lab tested serum sample number 798044 and found

that it contained phenylbutazone, an anti - inflammatory and a

class 4 drug under the Uniform Classification Guidelines for

Foreign Substances, as promulgated by the Association of Racing

Commissioners Internationa l.

16 . The concentration of phenylbutazone in sample

number 798044 was 3.4 micrograms per milliliter, which is in

excess of the 2 micrograms per milliliter threshold established

in r ule 61D - 6.008 . 2 /

17 . The results of the lab ' s analysis of sample

number 798044 were issued to Mr. Ziadie in a report dated

February 26, 2015.

18 . At all times material hereto, Mr. Ziadie was the

trainer of record of the thoroughbred horse " AT LARGE. "

1 9 . On or about April 24, 2015, " AT LARGE " finished in

first place i n the first race at Gulfstream Park .

20 . As stipulated at hearing, a blood sample was taken

from " AT LARGE " after the race using the procedures described in

the Manual . After processing, extracted serum from the blood

was numbered as sample number 028949 .

21 . The lab tested serum sample number 028949 and found

that it contained phenylbutazone, an anti - inflammatory and a

class 4 drug under the Uniform Classification Guidelines for

Foreign Substances, as promulgated by the Association of Racing

Commissioners International.

22 . The concentration of phenylbutazone was 2.3 micrograms

per milliliter, which is in excess of the 2 micrograms per

milliliter threshold established in r ule 61D - 6.008.

23 . The results of the lab ' s analysis of sample

number 028949 were issued to Mr. Ziadie in a report dated May 6,

2015.

24 . At all times material hereto, Mr. Ziadie was the

trainer of record of the thoroughbred horse " CREATIVE LICENSE. "

25 . On or about May 9, 2015, " CREATIVE LICENSE " finished

in first place in the seventh race at Gulfstream Park .

26 . As stipulated at hearing, a blood sample was taken

from " CREATIVE LICENSE " after the race using the procedures

described in the Manual . After processing, extracted serum from

the blood was numbered as sample number 031421.

27 . The lab tested serum sample number 031421 and found

that it contained clenbuterol, a bronchodilator and a class 3

drug under the Uniform Classification Guidelines for Foreign

Substances, as promulgated by the Asso ciation of Racing

Commissioners International.

28 . The concentration of clenbuterol in serum sample

number 031421 was 8.9 picograms per milliliter. Rule 61D - 6. 00 8

does not permit clenbuterol in the body of a r acing animal on

race day.

2 9. The results of the lab ' s analysis of sample

number 031421 were issued to Mr. Ziadie in a report dated

May 20, 2015.

30 . At the time of these races, r ule 61D - 6.005, effective

November 19, 2001, 3 / govern ed the procedures for the taking of

urine and blood samples from the horses . Subsection (3)

provide d in part :

The specimen shall be sealed in its

container, assigned an official sample

number which is affixed to the specimen

container, and the correspondingly numbered

information portion of the sample tag shall

be detache d and signed by the owner,

trainer, groom, or the authorized person as

a witness to the taking and sealing of the

specimen.

31 . Subsection 4.5 of the Manual describes the sample tag

in greater detail :

RL 172 - 03 is a self - adhesive sequentially

numbered bar - coded, three part form (blood

label, urine label and card) provided by the

University of Florida Racing Laboratory that

is used to catalog specimens by assigning

them " Specimen Numbers. " As specimens are

collected, information regarding the animal

fr om which the sample was collected is

written on the bottom of this form. The top

two portions of the form (Blood, Urine) are

completed with the Track Number and

Collection Date. The applicable top

portions of the form are then separated and

applied to th e urine specimen cup and/or

evergreen blood tube. The bottom portion,

or Specimen Card is completed and

appropriately signed and is sent to the

Tallahassee Office of Operations to be

filed.

32 . The sample tag thus consists of three portions: the

numbe red portion designated for the blood specimen ( " blood

label " ), the numbered portion designated for the urine specimen

( " urine label " ) , and the numbered portion containing information

about the animal and trainer that is to be signed by the witness

( " card " ) . In the sampling procedures followed in this case, the

blood label was not affixed to the collection tube. The blood

label , from which the card portion was " detached , " was affixed

to the evergreen blood tube . Th is was consistent with the

governing rule a s well as the Manual . Th e evergreen tube is the

specimen container for the serum .

33 . The sampling procedures followed on February 6, 2015,

April 24, 2015, and May 9, 2015, were in compliance with the

procedures set forth in the Manual.

34 . As stated in s ubsection 4.4 of the Manual, " [s]ealing

the sample ensures the specimen does not spill during shipment

to the laboratory and assures all parties that the sample has

not been tampered with. " The same purposes are served by

sealing the seru m s pecimen .

35 . After the blood s amples were taken by the

veterinarian, they were not " sealed " in the collection tubes.

The fact that the collection tubes are air tight prior to and

after the taking of the blood and initially contain a partial

vacuum to facilitate collection , does not constitute " sealing "

of the specimen in its container for purposes of the rule. The

three collection tubes are not the specimen container , but the

last three digits of the number from the blood label affixed to

the specimen container were also written on each blood

collection tube with a black " S harpie " type marking pen to

ensure control of the sample.

36 . After the blood was centrifuged, and the serum was

poured into the evergreen tube, the serum was sealed with

evidence tape, as described in s ubsection 4.6 of the Manual , and

the chief veterinary assistant put his initials over the seal .

This constitute d " sealing " of the s pecimen in its container.

S ubsection 4.6 of the Manual provides:

S erum is poured into applicable (numbered)

" evergreen " tubes. Each " evergreen " tube is

immediately properly sealed with evidence

tape.

37 . Rule 61D - 6.005 does not make any reference to spinning

the blood in the centrifuge to extract serum, the pouring of

serum into an evergreen tube, the sealing of the evergreen

tube with evidence tape , or the freezing of the specimen .

Subsection 4.6 of t he Manual establishes additional Division

policies and procedures not contained in the rule.

38 . The serum must be separated from the blood because

whole blood cannot be frozen without damage that would affect

its usefulness in laboratory testing. Centri fuging facilitates

the separation of the serum from the whole blood. The transfer

of the serum from the glass collection tubes to the plastic

evergreen tube saves shipping weight and reduces the incidence

of breakage during shipping.

3 9. As testified to by Mr. Urrutia, a c hief v eterinarian ' s

a ssistant, the centrifuged collection tubes are stored in a

locked refrigerator, the opening of the centrifuged collection

tubes and the pouring of the serum into a correspondingly

numbered evergreen specimen container is carefully performed

with the intent to avoid cross - contamination, and the sealed

evergreen specimen containers remain in a locked freezer until

they are shipped to the laboratory. The evidence was clear and

convincing that the serum specimens in the evergreen containers

with the full " Specimen Number " marked on them were derived from

the blood sample tubes bearing the same last three numbers . The

serum specimens came from Mr. Ziadie ' s horses.

40 . Dr. Barker ' s testimony indicated that the " free pour "

of the serum was the point at which the specimen was most

vulnerable, and that contamination or tampering was possible.

He stated he would have preferred more supervision, witnessing,

and documentation as to who was doing what, at what time.

Dr . Cole concurred that there is always a possibility of

contamination when a sample is transferred from one container to

another. However, t he free - pour method used to transfer the

serum from the collection tubes into the evergreen specimen

container is on e of the better approaches, as opposed to using a

pipette or method that would put something into the sample.

Contamination from the free pour of the serum is unlikely.

There was no evidence introduced to suggest that any tampering

with, or contamination of, the specimens was likely or probable.

41 . The state veterinarian who took the blood sample from

each horse signed PMW Form 504, a Daily Record of Sample

Collection, indicating that this was done. After centrifuging

the whole blood in the collectio n tubes, at the end of the day

the state veterinarian usually leaves the collection tubes with

the chief veterinary assistant, who pours the separated serum

from each collection tube into the correspondingly numbered

evergreen container and seals it. Sometimes, the state

veterinarian stays to observe the transfer of the serum to the

evergreen specimen container .

42 . There is no signature indicating the time t he state

veterinarian leaves the samples at the detention barn or the

time that the chief ve terinary assistant opens the collection

tubes and transfers the serum . The custody of the samples

remains with Division personnel throughout this process . No

transfer of custody takes place until the specimen containers

are shipped to the laboratory.

43 . In each instance of sampling in this case , t he owner ' s

witness signed the card portion of the sample tag (Form RL 172 -

03) after the taking of the urine and blood samples.

44 . In each instance of sampling in this case , the owner ' s

witness signed the car d portion of the sample tag (Form RL 172 -

03) after the sealing of the urine specimen in its container ,

but before the sealing of the serum specimen in its container,

the evergreen tube.

45 . In each instance of sampling in this case , the owner ' s

witness did not observe the extraction of the serum or the

sealing of the serum s pecimen in its container with the evidence

tape . T he witnesses could have remained to w atch those

procedures had they requested to do so. Subsection 4.6 of the

Manual states, " the o wner, trainer of record or designated

authorized witness may leave with the released animal or may

elect to witness the conclusion of the collected blood specimen

processing and sealing cycle. " Two sign s posted in the

detention barn similarly advise owner ' s witnesses that they may

remain to witness the centrifuge process and sealing of the

sample.

46 . Mr. Urrutia credibly testified t hat in the six years

he performed the duties of the chief veterinary assistant, no

one ever stayed to watch him transfer t he serum or sealing of

the specimen container . The pouring of the collection tubes

into the specimen container takes place at the end of the racing

day, after all of the horses have departed from the detention

barn. It would be very inconvenient for an a uthorized witness

to remain until the serum specimens were sealed.

47 . The procedures that were followed -- set forth in the

Manual -- which allow ed the owner ' s witness to sign the sample tag

after witnessing the taking of the blood but before the sealing

of the s pecimen , were not in compliance with rule 61D - 6.005(3) ,

quoted above, which require d the owner ' s representative to sign

as a witness to both the ta k ing and sealing of the specimen.

T he p osting of signs advising that the owner ' s representative

was all owed to stay and witness the sealing of the specimen

container did not bring the procedure being followed into

compliance with rule 61D - 6.005(3). The requirement that the

authorized representative must witness not only the taking, but

also the sealing of specimens, is a provision directly related

to maintaining integrity in the sample collection process. Such

deliberate disregard of the plain language of the rule directly

affects the fairness of the entire sampling procedure.

48 . The Manual is applicable to every horseracing facility

within the s tate of Florida. It has been in effect in its

current form since 2010 and , by its own terms, is mandatory. It

provides that veterinary assistants, chief veterinary

assistants, detention barn security guards, and detention barn

supervisors " study , become completely familiar with, and put

into practice " the procedures outlined in the Manual. It

describes seven steps in chain - of - custody procedures, three of

which are " collecting the specimen, sealing the specimen, and

completing the required forms , " and describes detailed

procedures in this " strict sequence of events that must be

followed. "

4 9. Testimony at hearing confirmed t hat D ivision employees

are required to follow the procedures it sets forth. Although

s ome employees stated that the Manual was a " guideline, " to the

extent that th is testimony was intended to s uggest that

employees need not comply with the Manual ' s provis ions , it is

rejected as not credible. As Ms. Erskine, a detention barn

supervisor , testified, employees do not have discretion not to

follow the procedures set forth in the Manual. She testified

that if employees did not follow the procedures, they would be

subject to sanctions. Ms. Blackman similarly testified that the

provisions of the Manual are mandatory and that regional

managers of the Division had the responsibility to visit

racetrack s to ensure t hat each track was following the Manual.

Th is testimony of Ms. Erskine and Ms. Blackman is credited.

50 . As Ms. Blackman testified, the sampling procedures set

forth in the Manual are important to the Division, to the

trainers, and to the public.

51 . State S teward Scheen credibly testified that , although

he has acted as a judge in hearings before the Board of Stewards

in cases alleging violations of section 550.2415 for ten years,

he was unaware of the process that was routinely followed to

centrifuge blood and extract the serum to create a specimen for

shipment to the laboratory.

52 . Mr. Stirling credibly testified that in his capacity

as executive director of the Florida Horseman ' s Benevolent and

Protective Association, a position he has held for 20 years, he

was an advocate for the horsemen . He attended all of the

workshops for rules relating to medication overages as one of

his primary duties. Th e centrifuging process, extraction of the

serum, and sealing of the serum specimen as described in detail

in s ubsection 4.6 of the Manual w ere never discussed at a

rulemaking hearing. These procedures are not a part of

rule 61D - 6.005 , adopted in 2001 . As he testified , Mr. Stirling

was not even aware of these procedures until a month or two

before the final hearing in this case. Subsection 4.6 of

t he Manual has not been adopted under the procedures of

section 120.54 , Florida Statutes .

53 . Subsection 4.6 of t he Manual is an unadopted rule.

54 . Rule 61D - 6.005(8) provided:

The division may proceed when other evidence

exists that an illegal or impermissible

legend or proprietary drug, medication, or

medicinal compound (natural or synthetic)

may have been a dministered to a racing

animal. Otherwise, no action shall be taken

unless and until the laboratory under

contract with the division has properly

identified the legend or proprietary drug,

medication, or medicinal compound (natural

or synthetic) in a samp le or specimen

collected pursuant to this chapter .

(Emphasis added) .

55 . As discussed, the serum specimen s w ere not collected

pursuant to the requirements of chapter 61D - 6 . Other than the

sample testing, no other evidence was introduced that an illegal

drug or medication had been administered to the horses.

56 . In the absence of the test results, the Division

failed to show even by a preponderance of the evidence that

horses trained by Mr. Ziadie were raced with drugs on

February 6, 2015, April 24, 2015, and May 9, 2015.

CONCLUSIONS OF LAW

57 . The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding pursuant to sections 120.569 and 120.57(1), Florida

Statutes (201 5 ).

58 . The substantial interests of Petitioner are being

determined by Respondent , and Petitioner has standing in this

proceeding.

5 9. Petitioner has the initial burden of proving by a

preponderance of the evidence that he meets the requirements to

have his pari - mutuel wagering occupational license renewed.

However, since Respondent proposes to deny renewal based on

alleged misconduct, Respondent assumes t he burden of proving the

specific acts of misconduct that it c ontends demonstrate

Petitioner ' s lack of fitness. Dep ' t of Banking & Fin. v.

Osborne, Stern & Co. , 670 So. 2d 932, 934 (Fla. 1996); Dept. of

Transp . v. J.W.C. Co., Inc. , 396 So. 2d 778, 787 (Fl a. 1st DCA

1981).

Standard of Proof

60 . The standard of proof that Respondent must meet is not

completely settled , however . In Ferris v. Turlington , 510 So.

2d 292, 294 (Fla. 1987), the court determined that the

revocation of a professional license requ ired evidence that was

clear and convincing , stating that, " where the proceedings

implicate the loss of livelihood, an elevated standard is

necessary. " On the other hand, in Osborne Stern , supra at 934,

the court de termined that in an initial license application

proceeding, preponderance of the evidence was the appropriate

standard , stating th at " an agency has broad discretion in

determining the fitness of applicants seeking to engage in an

occupation the conduct of which is a privilege rather than a

right . " An agency decision not to renew an existing license

based upon alleged misconduct that took place during the

previous period of licensure is a " hybrid " which involves both

of these important principals to some extent .

61 . Respondent asser ts that it has proved the alleged

misconduct by a preponderance of the evidence, but offers no

argument or citation to authority to show that this is the

standard of proof that should be applied . T he court in M.H. v.

Dep artmen t of Child ren and Family Serv ices , 977 So. 2d 755, 761

(Fla. 2d DCA 2008) , did find that in rejecting the renewal of a

foster care license, the Department of Children and Family

Services had the burden of proving the alleged misconduct by

only a preponderance of the evidence . Some DO AH recommended

orders have determined likewise. Rising Stars & Roslyn Smith v.

Dep ' t of Child. & Fams. , Case No. 11 - 4315 (Fla. DOAH Nov. 4,

2015), adopted with modification , Case No. DCF - 12 - 045FO (Fla.

DCF Feb. 8, 2012); Robert ' s Large Fam . Daycare Home v . Dep ' t of

Child. & Fam. S er vs. , Case No. 08 - 3027 (Fla. DOAH Sep. 5, 2008 ;

DCF Jan. 5, 2009).

62 . In Dep artment of Child ren and Families v. Davis Family

Day Care Home , 160 So. 3d 854, 856 (Fla. 2015), the court set

forth an important principle distinguish ing a license

application from a revocation. The court, quoting Osborne

Stern , noted that it had declined to extend the clear and

convincing standard to license application proceedings:

In so holding, we explained that the denial

of the application based upon violations of

a statute governing the profession " is not a

sanction for the applicant ' s violation of

the statute, but rather the application of a

regulatory measure, " and that applying the

clear and convincing evidence standard would

be " inconsistent with the discretionary

authority granted by the Florida legislature

to administrative agencies responsible for

regulating professions under the State ' s

police power. "

The court also cited Astral Liquors, Inc. v. Dep artment of

Bus iness Reg ulation , 463 So. 2d 1130, 1132 (Fla. 1985) , for the

proposition that such discretionary authority is particularly

necessary where an agency regulates occupations which are

practiced by privilege , rather than by right , and which are

potentially injurious to the public welf are. A p ari - mutuel

horse racing trainer i s such an occupation .

63 . Petitioner contends that Respondent has failed to

prove its allegations by clear and convincing evidence, but

cites no authority to show that this is the appropriate standard

of proof. T he court in Coke v. Department of Children and

Family Services , 704 So. 2d 726 (Fla. 5th DCA 1998), did find

that in denying the renewal of a family day care license , the

agency had the burden of proving allegations of wrongdoing by

clear and convincing evidence . Some DOAH recommended orders

have determined likewise. Senior Lifestyles, LLC v. Ag. for

Health Care Admin. , Case No. 13 - 4660 (Fla. DOAH June 10, 2014),

rej ected in part , Case No. 2013009388 (Fla. AHCA Jul. 29, 2014);

Ag. for Pers. with Disab. v. Help Is On The Way, Inc. , Case

No. 11 - 1620 (Fla. DOAH Feb. 2, 2012; Fla. APD Apr. 16, 2012).

64 . Some court cases have given consider ation to the fact

that after a license has been issued, there is at least some

degree of expectation that it will be renewed. Vocelle v.

Riddell , 119 So. 2d 809, 811 (Fla. 2d DCA 1960), involved the

renewal of a license to operate a private employment agency.

The governing statute pro vided in part:

License for the next succeeding year shall

be issued upon written request on the form

prescribed by the commission and it shall be

accompanied by the required fee. When made

in proper form such request shall not be

denied or unreasonably de layed.

The court, relying on the policy and intention of th at statute,

concluded that under the facts of that case that " once an

applicant becomes licensed, the annual renewal of his license

follows as a ministerial duty of the Commission and a matter of

right; and that if violations occur the Commission is required

to resort to the provisions for revocation. "

65 . In Wils on v. Pest Control Commission , 199 So. 2d 777

(Fla. 4th DCA 1967), the court recognized that there was no

property interest 4 / in a license to conduct a business, but

stressed that once issued , a business license took on some

qualities of property. Reviewing the provisions of the

licensing act, and especially the provisions of Florida ' s ( pre -

1975) Administrative Procedure Act, the court determined that a

license should be renewed unless the licensee by its conduct has

forfeited the privilege. The court concluded that " the decision

of the commission not to renew petitioner ' s license was

tantamount to imposing upon the petitioner a penalty. " Wilson

v. Pest Control Com. , 199 So. 2d 777, 781 (Fla. 4th DCA 1967).

66 . In Dubin v. Department of Business Regulation , 262 So.

2d 273 (Fla. 1st DCA 1972), the Department notified a horse

trainer that the reason his license was not being renewed was

that he " lacked the integrity required to be had by all

applicants " but set fo rth no specific charges as the basis for

denial. At hearing, the agency put on no evidence, relying on

the well - accepted principle that Mr. Dubin, as an applicant for

licensure, had the burden to demonstrate his qualifications.

The court remanded , findin g that the Department had the burden

to prove the misconduct and stat ing that a revocation proceeding

should have been in itiated .

67 . N either party here has cited to any provision of

chapter 550 prescribing the standard of proof applicable in a

license renewal proceeding, and no such provision was found.

Section 120.57(1)(j) provides that findings of fact shall be

" based upon a preponderance of the evidence, except in penal or

licensure disciplinary proceed ings or except as otherwise

provided by statute. "

68 . It may not be possible to c ategorically conclude

either that all denials of licensure renewal are penal or

disciplinary in nature or that none of them are . T he nature of

the license involved and the provisions of the applicable

licensing statute must be carefully examined .

6 9. Section 550.105, entitled " Occupational licenses of

racetrack employees; fees; denial, suspension, and revocation of

license; penalties and fines , " provides in paragraph (5):

(a) The division may:

1. Deny a license to or revoke, suspend, or

place conditions upon or restrictions on a

license of any person who has been refused a

license by any other state racing commission

or racing authority;

2. Deny, suspend, or place conditions on a

license of any person who is under

suspension or has unpaid fines in another

jurisdiction; if the state racing commission

or racing authority of such other state or

jurisdiction extends to the division

reciprocal cou rtesy to maintain the

disciplinary control.

(b) The division may deny, suspend, revoke,

or declare ineligible any occupational

license if the applicant for or holder

thereof has violated the provisions of this

chapter or the rules of the division

governi ng the conduct of persons connected

with racetracks and frontons. In addition,

the division may deny, suspend, revoke, or

declare ineligible any occupational license

if the applicant for such license has been

convicted in this state, in any other state,

o r under the laws of the United States of a

capital felony, a felony, or an offense in

any other state which would be a felony

under the laws of this state involving

arson; trafficking in, conspiracy to traffic

in, smuggling, importing, conspiracy to

smuggl e or import, or delivery, sale, or

distribution of a controlled substance; or a

crime involving a lack of good moral

character, or has had a pari - mutuel license

revoked by this state or any other

jurisdiction for an offense related to pari -

mutuel wagering.

(c) The division may deny, declare

ineligible, or revoke any occupational

license if the applicant for such license

has been convicted of a felony or

misdemeanor in this state, in any other

state, or under the laws of the United

States, if such felony o r misdemeanor is

related to gambling or bookmaking, as

contemplated in s. 849.25, or involves

cruelty to animals. If the applicant

establishes that she or he is of good moral

character, that she or he has been

rehabilitated, and that the crime she or he

w as convicted of is not related to pari -

mutuel wagering and is not a capital

offense, the restrictions excluding

offenders may be waived by the director of

the division.

(d) For purposes of this subsection, the

term " convicted " means having been found

guil ty, with or without adjudication of

guilt, as a result of a jury verdict,

nonjury trial, or entry of a plea of guilty

or nolo contendere. However, the term

" conviction " shall not be applied to a crime

committed prior to the effective date of

this subsecti on in a manner that would

invalidate any occupational license issued

prior to the effective date of this

subsection or subsequent renewal for any

person holding such a license.

(e) If an occupational license will expire

by division rule during the period of a

suspension the division intends to impose,

or if a license would have expired but for

pending administrative charges and the

occupational licensee is found to be in

violation of any of the charges, the license

may be revoked and a time period of lice nse

ineligibility may be declared. The division

may bring administrative charges against any

person not holding a current license for

violations of statutes or rules which

occurred while such person held an

occupational license, and the division may

decla re such person ineligible to hold a

license for a period of time. The division

may impose a civil fine of up to $1,000 for

each violation of the rules of the division

in addition to or in lieu of any other

penalty provided for in this section. In

additio n to any other penalty provided by

law, the division may exclude from all pari -

mutuel facilities in this state, for a

period not to exceed the period of

suspension, revocation, or ineligibility,

any person whose occupational license

application has been de nied by the division,

who has been declared ineligible to hold an

occupational license, or whose occupational

license has been suspended or revoked by the

division.

These provisions of section 550.105 do not clearly distinguish

denials from revocations, suspensions, restrictions,

administrative charges, or fines when authorizing these agency

actions, yet do consider licensees seeking renewal as

" grandfathered in " for purposes of the definition of conviction

in paragraph (d).

70 . Although not cited by Respondent in its letter of

denial or in its Proposed Recommended Order, section

550.2415(3) ( a) must also be considered. It provides:

Upon the finding of a violation of this

section, the division may revoke or suspend

the license or permit of the violator or

deny a license or permit to the violator;

impose a fine against the violator in an

amount not exceeding $5,000; require the

full or partial return of the purse,

sweepstakes, and trophy of the race at

issue; or impose against t he violator any

combination of such penalties. The finding

of a violation of this section in no way

prohibits a prosecution for criminal acts

committed.

71. Taken as a whole, the provisions of chapter 550, w hen

considered in light of the language of sec tion 120.57(1)(j), are

interpreted to require proof of violations of section 550.2415

that form the basis for denial of renewal of a professional

occupational license by clear and convincing evidence. 5/

7 2 . The clear and convincing standard of proof has been

described by the Florida Supreme Court:

Clear and convincing evidence requires that

the evidence must be found to be credible;

the facts to which the witnesses testify must

be distinctly remembered; the testimony must

be precise and explicit and the witnesses

must be lacking in confusion as to the facts

in issue. The evidence must be of such

weight that it produces in the mind of the

trier of fact a firm belief or conviction,

without hesitancy, as to the truth of the

allegations sought to be establis hed.

In re Davey , 645 So. 2d 398, 404 (Fla. 1994)(quoting Slomowitz

v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA 1983)).

7 3 . Section 550.2415 (1)(a) provides in part :

T he racing of any animal with any drug,

medication, stimulant, depressant, hypnotic,

l ocal anesthetic, or drug - masking agent is

prohibited. It is a violation of this

section for any person to administer or

cause to be administered any drug,

medication, stimulant, depressant, hypnotic,

narcotic, local anesthetic, or drug - masking

agent to an animal which will result in a

positive test for such substance based on

samples taken from the racing animal

immediately prior to or immediately after

the racing of the animal.

7 4 . Section 55 0 .2415(1)(c) provides that " [t]he finding of

a prohibited substance in a race - day specimen constitutes prima

facie evidence that the substance was administered and was

carried in the body of the animal while participating in the

race. " I f Respondent prove s that these prohibited substances

were found in race - day specimens, this prima facie case will be

sufficient. Respondent will have proved a violation of section

550.2415(1)(a) , for there was no contrary evidence at hearing to

show that phenylbutazone and clenbuterol were not administered

or that these substance s were not carried in the bodies of the

horses in their respective races .

7 5 . The statute also provides that when a race horse has

been impermissibly medicated or drugged, action may be taken

" against an occupational licensee responsible pursuant to rule

of the division " for the horse ' s condition. § 550.2415(2), Fla.

Stat. Consistent with this statute, Respondent has adopted

rule 61D - 6.002, the " absolute insurer rule , " making trainers

strictly responsible.

License Denial and Penalties

7 6 . Petitioner a rgues that the alleged violations of

section 550.2415 are not a sufficient legal basis for Respondent

to deny the license renewal application. More specifically,

Petitioner maintains that Respondent may not base licensure

denial on alleged statutory vio lations for which disciplinary

guidelines only authorize fines , but must instead follow a

disciplinary process , citing Dubin v. Dep artmen t of Bus iness

Reg ulation , supra .

7 7 . Florida ' s Administrative Procedure Act affords a

hearing on an agency ' s intende d action to deny a license renewal

and cases decided since Dubin have determined that when such

action is based upon specifically alleged violation s in the

prior licensure period, an agency is not required to institute a

separate disciplinary proceeding. However, in a chapter 120

hearing challenging the intended agency action to deny renewal

of the license, the agency bears the burden to prove the

violations. Coke v. Dep ' t of Child. & Fam. Servs. , 704 So. 2d

726 (Fla. 5t h DCA 1998).

7 8 . Unl ike Mr. Dubin, Petitioner here has been advised of

the specific charges, been given notice of hearing, been allowed

to call and cross - examine witnesses, and otherwise been afforded

a quasi - judicial hearing at which the burden to prov e the

alleged violations by clear and convincing evidence was placed

upon Respondent. Under these circumstances, t he concern of

Dubin that no less process be afforded for denial of a trainer ' s

license renewal than for a disciplinary proceeding has been

addressed .

7 9 . Petitioner extends his argument further, arguing that

denial of licensure is not authorized because it is not listed

among the penalties for violation of section 550.2415 in

Respondent ' s disciplinary guidelines.

80 . S ection 550.2415(12) a uthorizes Respondent to adopt a

classification system for prohibited substances and a

corresponding penalty schedule for violations. Cf. § 455.2273 ,

Fla. Stat. Respondent has done so in r ules 61D - 6.008 and 61D -

6.011 . In so expl icating the way in which i t will exercise its

statutory authority, an agency becomes bound to follow those

guidelines in disciplinary proceedings . Fernandez v. Bd . of

Nursing , 82 So. 3d 1202 (Fla. 4th DCA 201 2 ).

8 1 . However, Respondent has not chosen to institute

disciplinary proceedings and has not include d denial of

licens ure renewal as a possible penalty in its guidelines f or

violation of section 550.2415 , but instead has chosen to pursue

denial of renewals outside of disciplinary proceeding s. It may

do so. T he provisions of section 550.105(5)(b) explicitly

provide that Respondent may " deny . . . any occupational license

if the applicant for or holder thereof has violated the

provisions of this chapter or the rules of the division

governing the conduct of persons connected with racetracks and

frontons. " P etitioner ' s argument that a hearing challenging the

denial of a license is transformed into a disciplinary

proceeding requiring application of the disciplinary guidelines

is rejected.

Chain - of - Custody

8 2 . Petitioner argues that Respondent failed to show that

the serum samples that were tested came from Petitioner ' s horses

because the chain - of - custody from the whole blood samples was

broken. However, the testimony regarding the procedures that

were followed in taking the blood samples, centrifuging them,

and pouring the extracted serum from the numbered blood

collection tubes into the correspondingly numbered specimen

container was clear and convincing. While Dr. Barker ' s

testimony indicated that contamination or tampering was

possible, he never concluded that either of these things was

likely or probable . The mere possibility of tampering or

contamination is not sufficient to require proof of a strict

chain - of - custody ; there must be a probab ility. Hildwin v.

State , 141 So. 3d 1178, 1187 (Fla. 2014); Armstrong v. State , 73

So. 3d 155, 171 (Fla. 2011); Murray v. State (Murray I) , 838 So.

2d 1073, 1082 - 83 (Fla. 2002).

Violation of Rule 61D - 6.005(3)

8 3 . Petitioner maintains that Respondent di d not follow

the procedures set forth in rule 61D - 6.005 for collecting,

sealing, and testing the samples , as required by rule 61D -

6.005(8) . Any suggestion that the taking of the blood sample in

a partial vacuum tube constituted the " sealing " of the specim en

required by the rule has been rejected. The rule refers to the

sealing of the specimen in its container, which has the " blood

label " affixed. Petitioner clearly show ed that the sampling

procedures followed here , as set forth in the Manual , had the

wit ness sign the card before the sealing of the serum specimen.

84. A procedural error in agency action is not necessarily

fatal to agency action unless the "fairness of the proceedings

or the correctness of the action" may have been impaired. Cases

consider errors made before, as well as during, quasi - judicial

proce edings. Putnam Cnty. Envtl. Council v. St. Johns River

Water Mgmt. Dist. , 136 So. 3d 766, 768 (Fla. 1st DCA

2014)(action by Secretary rather than FLWAC in determining

whether a request for review met statutory jurisdictional

grounds affected the correctne ss of the action and so was not

harmless error); Matar v. Fla. Int'l Univ. , 944 So. 2d 1153,

1158 (Fla. 3d DCA 2006)(university's failure to strictly comply

with its rule requiring that student be given a specific waiver

form was harmless error where unive rsity substantially complied

by advising the student of his rights).

8 5 . It is beyond question that Respondent must exercise

broad powers to regulate and control the unique challenges of

legalized pari - mutuel racing activities. The courts have long

and c onsistently held that Respondent has authority to adopt

necessary rules, including the " absolute insurer " rule,

rule 61D - 6.002:

The trainer of record shall be responsible

for and be the absolute insurer of the

condition of the horses or racing

greyhounds, he/she enters to race.

Trainers, kennel owners and operators are

presumed to know the rules of the division.

Hennessey v. Dep ' t of Bus. & Prof ' l Reg. , 818 So. 2d 697 (Fla.

1st DCA 2002); Solimena v. State , 402 So. 2d 1240 (Fla. 3d DCA

1981); State ex rel. Mason v. Rose , 1 65 So. 347 (1936).

8 6 . However, attendant with th e broad power to adopt rules

heavily regulating rac es and impos ing such strict accountability

is the necessary obligation on Respondent to precisely and

fair ly abide by those same rul es.

8 7 . R ule 61D - 6.005(8), quoted above, expressly state s that

in the absence of other evidence that an illegal drug has been

administered to a race horse, no action shall be taken unless

the laboratory identifies the drug in a sample or specimen

collected " pursuant to this chapter " (chapter 61D - 6 ) .

8 8 . Respondent ' s argument that it cannot " force " the

authorized representative to witness the sealing of the specimen

is unpersuasive. The rule clearly states that " the sample tag

shall be detached an d signed by the owner, trainer, groom, or

the authorized person as a witness to the taking and sealing of

the specimen. " A witness ' s refusal to do so would be one thing,

but here the procedure followed -- as established in great detail

by the Manual -- routin ely secures the signature of the witness

long before the s erum is even extracted.

89. Under all of the circumstances of this case, it is not

difficult to conclude that the systematic and regular violation

of the rule's requirement that the authorized repr esentative

witness the sealing of the serum sample constituted a

significant procedural error that affected the fairness of the

proceeding.

90 . The evidence was clear that Respondent failed to

identif y restricted drugs in specimen s collected in the manner

required by its rules.

Unadopted Rule

91 . Petitioner finally contends that th e intended agency

action to deny the renewal of his pari - mutuel wagering

individual occupational license is based upon the Manual , that

the Manual is an unadopted rule , and that the test results may

therefore not be considered . 6 /

9 2 . Section 120.52(20) provides that an unadopted rule is

an agency statement that meets the definition of the term

" rule, " but has not been adopted pursuant to the requirement of

s ection 120.54.

9 3 . Section 120.52(16), in relevant part, defines the term

" rule " 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 age ncy and includes any

form which imposes any requirement or

solicits any information not specifically

required by statute or by an existing rule.

9 4 . The courts have considered several elements of this

statutory definition in determining whether a statement

constitutes an unadopted rule. Perhaps the most fundamental

element is that it must be an " agency " statement, that is, an

expression of policy by the agency. First, it must be a

statement of the agency as an institution, not merely the

position of a single employee. It must be properly attributable

to the agency head or some duly - authorized delegate. Dep ' t of

High. Saf. & Motor Veh. v. Schluter , 705 So. 2d 81, 87 (Fla. 1st

DCA 1997)(Benton, J., concurring and dissenting). Second, to be

a statement attributable to the agency, it must go beyond the

mere reiteration or restatement of policy already established by

a properly a dopted rule or by the implemented statute. St.

Francis Hosp., Inc. v. Dep ' t of HRS , 553 So. 2d 1351 (Fla. 1st

DCA 1989). Here, the general policy of taking blood and urine

samples for testing to determine possible violations of

section 550.2415 is establ ished by the statute and by properly

adopted rules. The Manual adds mostly technical or

administrative detail necessary to execution of that policy.

9 5 . However, as noted earlier, the rule explicitly

requires that the owner ' s representative witness the sealing of

the sample and says nothing of serum extraction procedures.

Because the witnessing of the sealing of the sample is not

merely a matter of technical implementation, the Manual ' s

restructuring of this important rule requirement constitutes an

imp ortant policy change that constitutes an " agency statement. "

9 6 . While rare, courts have recognized that de facto

policy established by procedures may constitute an unadopted

rule. See Dep ' t of Bus. & Prof ' l Reg. v. Harden , 10 So. 3d 647,

649 (Fla. 1st DCA 2009)(committee procedure by which license

applications were reviewed was unadopted rule); Dep ' t of Rev. v.

Vanjaria Enters., Inc. , 675 So. 2d 252, 254 (Fla. 5th DCA 1996)

(assessment procedure to determine tax exemption contained in

training manual w as unadopted rule). Subsection 4.6 of the

Manual is an agency statement.

9 7 . The requirement that a statement be " general ly

applicable " involves the field of operation of the statement.

Dep ' t of Com. v. Matthews Corp. , 358 So. 2d 256 (Fla. 1st DCA

1978)(wage rates applicable to public works contracts held not

to be rules because they applied only to the construction of a

particular public building and did not establish wages elsewhere

in the state into the future). Subsection 4.6 of the Manual

appl ies to every state licensed horseracing facility i n the

s tate of Florida.

9 8 . The concept of general applicability also involves the

force and effect of the statement itself. An agency statement

that requires compliance, creates or adversely affects r ights,

or otherwise has the direct and consistent effect of law is a

rule. State Bd. of Admin. v. Huberty , 46 So. 3d 1144, 1147

(Fla. 1st DCA 2010). Subsection 4.6 of the Manual describes

procedures that directly affect a trainer accused of racing

thoroughbred horses that are impermissibly medicated or drugged.

These procedures directly affect the rights of a trainer charged

with a violation, especially given that the statutory

presumption, in conjunction with the " absolute insurer " rule,

instills the test results with such a significant, almost

determinative, effect. Subsection 4.6 of t he Manual directly

affects rights and has the effect of law.

99 . An agency statement must also be consistently

applic able. In Department of Highway Safety and Motor Vehicles

v. Schluter , supra , the court found three of the challenged

policies not to be generally applicable because an employee ' s

supervisor was not required to apply them, and therefore they

could not be c onsidered to have the " direct and consistent

effect of law. " See also , Coventry First, LLC v. Off . of Ins.

Reg. , 38 So. 3d 200, 205 (Fla. 1st DCA 2010)(examination manual

provided to examiners of the Office of Insurance Regulation not

generally applicable because examiners had discretion not to

follow it). The Manual by its own terms requires compliance by

Respondent ' s employees. The employees of the detention barn

would be subject to discipline if they did not follow the

procedures set out in the Manual . Subsection 4.6 of t he Manual

is generally applicable.

100 . Subsection 4.6 of the Manual has not been adopted

under the rulemaking pro cess set forth in section 120.54.

101 . Petitioner clearly showed that s ubsection 4.6 of the

Manual is an agency statement of general applicability that

describes the procedure requirements of Respondent and

constitutes an unadopted rule .

10 2 . Section 120.57(1)(e)1., Florida Statutes (2015),

provides:

An agency or an administrative law judge ma y

not base agency action that determines the

substantial interests of a party on an

unadopted rule. The administrative law

judge shall determine whether an agency

statement constitutes an unadopted rule.

This subparagraph does not preclude

application of adopted rules and applicable

provisions of law to the facts.

10 3 . In Dep artment of Revenue v. Vanjaria Enter prises ,

supra , the Department of Revenue assessed tax based on a square

footage comparison pursuant to a procedure set forth in its

sales and use tax training manual . The court rejected the

Department of Revenue ' s argument that the audit calculation

formula merely represented a direct application of the statute

and concluded that the training manual constituted an unadopted

rule, stating at page 25 5:

Furthermore, the tax assessment procedure

creates DOR ' s entitlement to taxes while

adversely affecting property owners. The

Training Manual was created to be used as

the sole guide for auditors in their

assessment of multiple - use properties. In

determining exempt versus nonexempt uses of

multiple - use properties, DOR ' s auditors

strictly comply with the procedure set forth

in the Training Manual for all audits

performed. Moreover, DOR auditors are not

afforded any discretion to take action

outside the scope of the Training Manual.

The court affirmed the decision below that the training manual

procedure was void and could not increase appellee ' s tax

liability.

10 4 . The public in general, and trainers in particular, in

light of their " absolute liability, " have a right to be fully

advised of all of th e basic procedures that are to be followed ,

and through the rulemaking process, even participate in their

formulation. D enial of Petitioner ' s application for license

renewal may not be based upon th e test results of serum obtained

pursuant to the unadopted procedures of s ubsection 4.6 of the

Manual and not pursuant to the adopted rule .

10 5 . Failing to follow the procedures set forth in

rule 61D - 6.005(3) for collecting and sealing the blood specimen,

and instead relying upon an unadopted rule, Respondent is

foreclosed from reliance on the test results, and failed to

prove , even by a preponderance of the evidence, that Petitioner

violated section 550.2415(1)(a) or r ule 61D - 6.002(1) on

February 6, April 24, or May 9, 2015, as alleged in the letter

of denial dated August 26, 2015.

10 6 . T he parties stipulated that, but for the allegations

that Petitioner was in violation of section 550.2415(1),

Petitioner meets all requirements for license renew al.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED :

T hat the Department of Business and Professional

Regulation, Division of Pari - Mutuel Wagering, enter a final

order granting Mr. Kirk Ziadie ' s application for renewal of his

pari - mutuel professional occupational license.

DONE AND ENTERED this 25th day of November , 2015 , in

Tallahassee, Leon County, Florida.

S

F. SCOTT BOYD

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 25th day of November , 2015 .

ENDNOTES

1/ Except as otherwise indicated, statutory references in this

Recommended Order are to the 201 4 Florida Statutes .

2/ Except as otherwise indicated, references to Florida

Administrative Code rules are to the rules in existence at the

time the alleged violations occurred in early 2015.

Petitioner ' s application for license renewal is governed by the

law in effect at the time the final licensure decision is made.

See Agency for Health Care Admin. v. Mount Sinai Med. Ctr. , 690

So. 2d 689, 691 (Fla. 1st DCA 1997), where specific allegations

of misconduct are the basis of denial, i t is Respondent ' s burden

to show violations of the statutes or rules that were in

existence at th e time of the alleged misconduct.

3/ Rule 61D - 6.005 was amended , effective June 15, 2015. The

amended rule is not applicable to this proceeding.

4 / A few Florida cases involving revocation or denial of

permits have cited constitutional concerns. The United States

Supreme Court has noted tha t, in some contexts, individuals may

have constitutionally - protected property interests in " state -

issued licenses essential to pursuing an occupation or

livelihood. " Cleveland v. United States , 531 U.S. 12, 25, n. 4,

121 S. Ct. 365, 148 L. Ed. 2d 221 (200 0). Due process applies

to the deprivation of interests encompassed within the

Fourteenth Amendment ' s protection of liberty and property -- i.e. ,

interests to which a person has a legitimate claim of

entitlement, as opposed to a mere unilateral expectation. Bd.

of Regents v. Roth , 408 U.S. 564, 566, 92 S. Ct. 2701, 2703

(1972)( U . S . Constitution does not require opportunity for a

hearing before the nonrenewal of a nontenured teacher ' s

contract, unless he can show that the decision somehow deprived

him of a p rotected interest in continued employment). If a

Florida licensing statute creates a protected interest, a person

may not be deprived of that interest except pursuant to

constitutionally adequate procedures. Cleveland Bd. of Educ. v.

Loudermill , 470 U.S. 532, 541, 105 S. Ct. 1487, 1493 (1985).

Constitutionally adequate procedures do not necessarily require

application of the clear and convincing standard of proof at

hearing, however. As explained in Herman and Maclean v.

Huddleston , 459 U.S. 375, 389 - 90, 103 S. Ct. 683, 691 (1983):

Thus, we have required proof by clear and

convincing evidence where particularly

important individual interests or rights are

at stake. See, e.g. , Santosky v. Kramer ,

455 U.S. 745 (1982) (proceeding to terminate

parent al rights); Addington v. Texas , supra

(involuntary commitment proceeding); Woodby

v. INS , 385 U.S. 276, 285 - 286 (1966)

(deportation). By contrast, imposition of

even severe civil sanctions that do not

implicate such interests has been permitted

after proo f by a preponderance of the

evidence. See, e.g. , United States v.

Regan , 232 U.S. 37, 48 - 49 (1914) (proof by a

preponderance of the evidence suffices in

civil suits involving proof of acts that

expose a party to a criminal prosecution).

Thus, in interpret ing a statutory provision

in Steadman v. SEC , supra , we upheld use of

the preponderance standard in SEC

administrative proceedings concerning

alleged violations of the antifraud

provisions. The sanctions imposed in the

proceedings included an order perman ently

barring an individual from practicing his

profession.

In the last referenced case, Steadman v. SEC , 450 U.S. 91, 92,

101 S. Ct. 999, 1003 (1981), there had been a disciplinary

hearing before an Administrative Law Judge , followed by review

by the Securities and Exchange Commission , in which the

preponderance - of - the - evidence standard was employed. The

Commission found that petitioner had violated antifraud,

reporting, conflict of interest, and proxy provisions of the

federal securities laws, and en tered an order permanently

barring petitioner from associating with any investment adviser

or affiliating with any registered investment company. The

Court affirmed the Fifth Circuit ' s determination that in an

administrative disciplinary proceeding by the Commission ,

violations could be established by preponderance of the

evidence. The Court noted that courts had supplied standards of

proof in various proceedings, but concluded that wherever

Congress had established the standard, it was controlling. In

t he absence of countervailing constitutional considerations, the

Federal Administrative Procedure Act ' s preponderance standard

applied.

5/ Department of Children and Families v. Davis Family Day Care

Home , 160 So. 3d 854 (Fla. 2015), does not dictate otherwise. A

careful reading of that case, which involved not only the

renewal of a family day care home license, but also the initial

application for a large family child care home license,

indicates that ap plication of the clear and convincing standard

of proof in adjudicating the administrative fine and misconduct

in the license renewal action was not contested. The Florida

Supreme Court reaffirmed that an agency must prove alleged

violations of law that f orm the basis of an initial license

application denial by a preponderance of the evidence.

6 / No petition under section 120.56(4) was filed, and the

arguments made in Petitioner ' s Proposed Recommended Order that

are a ppropriate to such a rule challenge p roceeding are instead

considered under section 120.57(1)(e) , to the extent applicable .

COPIES FURNISHED:

Bradford J. Beilly, Esquire

Bradford and Strohsahl, P.A.

1144 Southeast Third Avenue

Fort Lauderdale, Florida 33316

(eServed)

Caitlin R. Mawn, Esq uire

Marisa G. Button, Esquire

Department of Business and

Professional Regulation

1940 N orth Monroe Street , Suite 40

Tallahassee, Florida 32399

(eServed)

Jonathan Zachem, Director

Division of Pari - Mutuel Wagering

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

William N. Spicola, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399

(eServe d)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.