01-004257RU Florida Electric Power Coordinating Group, Inc. vs. Department Of Environmental Protection Status: Closed DOAH Final Order on Monday, April 22, 2002.

Summary: Closing of files and dismissal of petitions appropriate where agency initiates rulemaking and adopts rule after agency statement challenged under Section 120.56(4), Florida Statutes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE FLORIDA ELECTRIC POWER )

COORDINATING GROUP, INC., )

)

Petitioner, )

)

vs. ) Case Nos. 01 - 4018

) 01 - 4019

DEPARTMENT OF ENVIRONMENTAL ) 01 - 4020

PROTECTION, ) 01 - 4021

) 01 - 4257RU

Respondent. )

____________________ ____________)

FINAL ORDER

These matters came before the undersigned after Respondent

filed a Status Report on March 28, 2002, requesting that an

order be entered dismissing the five petitions and closing these

files. A Response in opposition to the req uest was filed by

Petitioner on March 29, 2002. Further argument was filed by

Respondent and Petitioner on April 5 and 15, 2002, respectively.

The procedural history of these cases is as follows.

Respondent has issued a wastewater facility permit under

C hapter 62 - 620, Florida Administrative Code, to Petitioner’s

members. Rule 62 - 620.610, Florida Administrative Code, sets

forth 23 general conditions which apply to all wastewater

facility permits. Those conditions are found in paragraphs (1) -

(23) of the R ule and are repeated verbatim as general conditions

in each member’s permit. Paragraph (20) prescribes the

reporting requirements for each permittee for “any noncompliance

which may endanger health or the environment.”

In November 2000, the Department i ssued a Notice of Minor

Permit Revision (Notice) to all wastewater facility permittees

in Florida, including Petitioner’s members. Among other things,

the Notice advised the permittees that the Department was

“revising [their] wastewater permit[s] to incl ude instructions

for reporting certain spills or unauthorized discharges”; that

the “clarifying instructions are contained in paragraph b. of

the enclosed permit revision”; and that “[t]he enclosed revision

shall be attached to your existing Wastewater Per mit.” Page 3

of the Notice contained a revised permit condition entitled

“Minor Permit Revision for Reporting Noncompliance,” which

tracked verbatim the existing language in paragraph (20) of the

Rule. However, the Notice modified that general condition in

each permit by renumbering subparagraph b. as subparagraph c.

and adding a new subparagraph b. To this extent, the language

in the Notice differed from the language found in paragraph (20)

of the Rule.

In May 2001, Petitioner filed Petitions under Sect ion

120.569, Florida Statutes, seeking rescission of the new

language in the Notice. These cases were later referred to the

Division of Administrative Hearings (DOAH) on October 17, 2001,

and were assigned Case Nos. 01 - 4018 through 01 - 4021. In

addition, on October 30, 2001, Petitioner filed with DOAH a

Petition under Section 120.56(4), Florida Statutes, contending

that the language modifying the general condition in each permit

constituted an unpromulgated rule in violation of Section

120.54(1)(a), Florid a Statutes. That matter has been assigned

Case No. 01 - 4257RU. All cases were consolidated by Order dated

November 6, 2001. By agreement of the parties, the requirement

that a final hearing in the rule challenge be held within 30

days was waived, and a c onsolidated final hearing in all cases

was scheduled on December 14, 2001.

On November 29, 2001, Petitioner filed its Motion for

Summary Final Order in Case No. 01 - 4257RU. On December 7, 2001,

Respondent filed its Response to the Motion and a Motion for

F inal Order of Dismissal. On the same date, Respondent

published its Notice of Proposed Rule Development to address the

challenged agency statement, and a Notice of Proposed Rulemaking

was filed with the Department of State on December 14, 2001.

Publicati on of the latter Notice was made on December 21, 2001.

Prior to the final hearing, the parties agreed that a hearing

was unnecessary, and that Case No. 01 - 4257RU could be resolved

on the basis of the papers filed by the parties.

Given Respondent’s publi cation of a proposed rule which

addressed the challenged statement, on December 28, 2001, the

undersigned entered an Order abating the cases pending the

outcome of the rulemaking process, and concluding that a ruling

on the pending Motions was unnecessary. The Order also denied

Petitioner’s request for attorney’s fees and costs on the ground

that the request was premature, but "without prejudice to

Petitioner renewing its request in the event the requirements of

Section 120.56(4)(e) [were] not met." Final ly, to ensure

compliance with the requirements of the statute, the Order

required that Respondent file a status report within 90 days

advising the status of the rulemaking process.

On March 28, 2002, Respondent filed a Status Report

advising that on the sa me date, new Rule 62 - 620.610(20), Florida

Administrative Code, which addressed the agency statement, had

been adopted. The new Rule became effective on April 17, 2002,

or 20 days after filing with the Department of State. Because a

rule addressing the ag ency statement has now been adopted,

Respondent has asked that the pending cases be dismissed and an

order entered closing the files.

In its Response to that filing, Petitioner generally

contends that even though Respondent has proceeded expeditiously

and in good faith to adopt a rule to address the challenged

statement, the undersigned is still required to keep the cases

open, conduct such further proceedings in Case No. 01 - 4257RU as

are necessary to determine if the agency statement is a rule,

and to then award Petitioner reasonable attorney’s fees and

costs, if appropriate. It also contends that the doctrine of

collateral legal consequences applies under the circumstances

presented here, and that under relevant case law construing that

doctrine, a mandat ory award of attorney’s fees under Section

120.595(4) is a collateral legal consequence that precludes

dismissal of the underlying action for mootness. Underpinning

both of these arguments is Petitioner’s primary concern that "an

agency can avoid attorney ’s fees after all of the legal work on

an unpromulgated rule challenge case has been completed, merely

by publishing a proposed rule." To this end, Petitioner has

also filed a Motion for Reconsideration of Denial of Attorney’s

Fees.

Petitioner’s challenge in Case No. 01 - 4257RU was filed

under Section 120.56(4), which allows any person substantially

affected by an agency’s statement to seek an administrative

determination that the statement violates Section 120.54(1)(a).

In Section 120.54(1)(a), the Legis lature has expressed an

intent that "[r]ulemaking 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." This legislative preference

is reinforced because an administrative law judge is required,

subject to the single exception cited in Section 120.595(4)(a),

to award reasonable attorney’s fees to the challenger upon the

entry of a final order concluding that all or part of an

agency’s statement violates Section 120.54(1)(a).

Former Section 120.535, Florida Statutes (1995), permitted

persons to challenge agency statements as unpromulgated rules.

That statute provided in part that "subsequent to a

determination t hat an agency statement violates subsection (1),"

an agency could still avoid costs and attorney’s fees if the

"agency publishe[d] proposed rules and proceed[ed] expeditiously

and in good faith to adopt such rules under subsection (5)."

In 1996, the Legi slature repealed Section 120.535, but

incorporated into Section 120.54(1), Florida Statutes (Supp.

1996), those provisions requiring that each agency statement

defined as a rule be adopted as a rule as soon as feasible and

practicable. Also, the rule chal lenge provisions of Section

120.535 were transferred to Section 120.56(4), Florida Statutes

(Supp. 1996), and provided in part that "prior to entry of a

final order that all or part of an agency statement violates s.

120.54(1)(a), if an agency publishes, p ursuant to s.

120.54(3)(a), proposed rules which address the statement and

proceeds expeditiously and in good faith to adopt rules," then

the agency may rely upon the statement as a basis for agency

action and avoid the consequences of an adverse ruling. Thus,

after 1996, an agency was required to publish the statement

prior to any final disposition of the rule challenge in order to

avoid the consequences of an adverse ruling.

In 1996, the Legislature also consolidated most attorney’s

fees provisions into a new Section 120.595, Florida Statutes

(Supp. 1996). Among them was a new provision in Section

120.595(4) for the award of attorney’s fees and costs in

challenges to agency statements under Section 120.56(4). This

provision enhanced the prior fees and costs provision in former

Section 120.535(6), and apparently was "a direct result of the

criticism of the former Section 120.535, which allowed an agency

to avoid payment of attorney’s fees and costs simply by

initiating the rulemaking proceeding." Hoppin g and Wetherall,

The Legislature Tweaks McDonald (Again): The New Restrictions on

the Use of "Unadopted Rules" and "Incipient Policies" by

Agencies in Florida’s Administrative Procedure Act , 48 Fla. L.

Rev. 135, 150 (Jan. 1996).

Here, Petitioner has rece ived the result it requested in

its Petition filed on October 30, 2001 - - that Respondent

proceed to adopt a rule addressing the statements made in the

Notice. Indeed, a rule was adopted on March 28, 2002, and it

became effective on April 17, 2002.

In re ading Sections 120.54 and 120.56(4) in pari materia ,

it is apparent that the Legislature’s preference for rulemaking

is satisfied if the agency publishes a proposed rule pursuant to

Section 120.56(4)(e) and proceeds to expeditiously and in good

faith adopt the rule.

While Petitioner seeks to have Case No. 01 - 4257RU remain

open and a "label" placed on Respondent’s statement (so that it

can be awarded attorney’s fees), the label is of no legal

consequence in light of Respondent’s compliance with Section

120.5 6(4)(e). That is to say, Respondent has now published a

proposed rule and proceeded expeditiously and in good faith to

adopt the rule. As a matter of law, then, Petitioner is

entitled to no further relief. Therefore, dismissal of the

Petitions and closu re of the files is the appropriate course of

action. Savona v. Agency for Health Care Admin. , 717 So. 2d

1120 (Fla. 1st DCA 1998); Osceola Fish Farmers Assoc., Inc. v.

S. Fla. Water Mgmt. Dist. , Case No. 00 - 3615RU (DOAH Final Order

Denying Amended Petitio n December 10, 2001); Johnson v. Agency

for Health Care Admin. , Case No. 98 - 3419RU, 1999 WL 1483785

(DOAH Final Order of Dismissal May 18, 1999). This same

conclusion has been reached by several legal commentators who

analyzed the 1996 revisions to the Ad ministrative Procedure Act.

See Hopping and Wetherall, 48 Fla. L. Rev. at 150 ("The agency

can still avoid payment of attorneys’ fees and costs by

initiating the rulemaking process after a challenge to its

policy has been filed pursuant to the new section 120.56(4), but

before the Administrative Law Judge issues a final order on the

challenge. Once rulemaking is initiated, the challenge is

essentially moot."); Hopping, Sellers, and Wetherall, Rulemaking

Reforms and Nonrule Policies: A "Catch - 22" for State Agencies ,

71 Fla. B. J. 20, 25 (Mar. 1997)("The agencies can still avoid

payment of fees and costs by initiating the rulemaking process

after a challenge to its policy has been filed pursuant to new

s. 120.56(4), but before the administrative law judge is sues a

final order on the challenge.") 1

Petitioner also cites the doctrine of collateral legal

consequences as a basis for denying the relief requested by

Respondent. Under that doctrine, an otherwise moot case will

not be dismissed if collateral legal c onsequences that affect

the rights of a party flow from the issue to be determined.

Godwin v. State , 593 So. 2d 211, 212 (Fla. 1992). Relying upon

that doctrine, Petitioner contends that the "mandatory"

attorney’s fees provision in Section 120.595(4) is a collateral

legal consequence that precludes dismissal of these matters on

grounds of mootness.

For the doctrine to apply, Section 120.595(4) would have to

provide for a mandatory award of attorney’s fees whenever an

action under Section 120.56(4) is fi led, and the agency then

resorts to rulemaking to address that challenge. Under the

statutory scheme in place, however, the Legislature has

specifically provided that there is no mandatory right to

attorney’s fees under Section 120.595(4) unless there is an

"entry of a final order that all or part of an agency statement

violates s. 120.54(1)(a)." See Section 120.595(4)(a), Florida

Statutes. Otherwise, as a matter of law, an award of fees and

costs is not warranted. Because there has been no entry of a

f inal order making such an adjudication, nor is one required in

light of Respondent’s adoption of a rule addressing the

challenged statement, the attorney’s fees provision does not

come into play. Under these circumstances, there is no

collateral legal con sequence, and thus the doctrine does not

apply. It is, therefore,

ORDERED that the Petitions filed in these cases are

dismissed, and Case Nos. 01 - 4018, 01 - 4019, 01 - 4020, 01 - 4021, and

01 - 4257RU are hereby closed.

DONE AND ORDERED this 22nd day of April, 20 02, in

Tallahassee, Leon County, Florida.

___________________________________

DONALD R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNC OM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 22nd day of April, 2002.

ENDNOTE

1/ In reaching this conclusion, the undersigned has again

considered the case of Central Stat es Health and Life Co. of

Omaha v. Dep’t of Insur. and Treas. , 21 F.A.L.R. 2460 (DOAH

1998), in which the agency apparently failed to proceed

expeditiously and in good faith to adopt a rule within 180 days

after initiating rulemaking. Even if it had done so, the Final

Order supports the view that the agency would still be liable

for attorney's fees and costs. Nothwithstanding this contrary

administrative ruling, the undersigned finds the cases and

analysis cited in the main text of this Order to be more

p ersuasive. Petitioner has also cited the case of Chancy v.

Dep't of Highway Safety and Motor Vehicles , Case No. 97 - 1627RU

(DOAH Final Order July 16, 1997). While the case does not

address the issue of whether attorney's fees are mandatory under

the circu mstances presented here, to the extent it may arguably

contain language favorable to Petitioner’s position, the case is

not deemed to be persuasive.

COPIES FURNISHED:

Richard S. Brightman, Esquire

Hopping, Green & Sams, P.A.

Post Office Box 6526

Tallaha ssee, Florida 32314 - 6526

Francine M. Ffolkes, Esquire

Department of Environmental Protection

3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399 - 3000

Carrol Webb, Executive Director

Joint Administrative Procedures Committee

120 Holla nd Building

Tallahassee, Florida 32399 - 1300

Liz Cloud

Bureau of Administrative Code

The Elliott Building, Room 201

Tallahassee, Florida 32399 - 0250

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled t o 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 Clerk of the

Division of Administ rative Hearings and a copy, accompanied by

filing fees prescribed by law, 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.