06-000260RX Brent A. Moody vs. Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco Status: Closed DOAH Final Order on Friday, June 9, 2006.

Summary: The evidence did not show that Respondent`s rule was valid since similar eligibility requirements were not treated the same.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BRENT A. MOODY, )

)

Petitioner, )

)

vs. ) Case No. 06 - 0260RX

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal administrative hearing was

held in this case in Tallahassee, Florida, before

Diane Cleavinger, Administrative Law Judge of the Division of

Administrative Hearings, on March 7, 2006.

APPEARANCES

For Petitioner: Harold F. X. Purnell, Esquire

Maggie Schultz, Esquire

Rutledge, Ecenia, Purnell and Hoffman

Post Office Box 551

Tallahassee, Fl orida 32302 - 0551

For Respondent: John Merritt Lockwood, Qualified

Representative

Sorin Ardelean, Esquire

Department of Business and

Professional Regulation

Office of the General Counsel

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

STATEMENT OF THE ISSUE

Whether the age requirement for entry into the double

random drawing for general liquor licenses is an invalid rule.

PRELIMINARY STATEMENT

This matter was initiated on January 18, 2006 , when

Petitioner filed a Petition Challenging Agency Statement Defined

as a Rule (Petition). Regardless of the title of the pleading,

the Petition alleges that the Division’s existing Rules 615A -

5.0105(2), 61A - 5.747, and 61A - 2.019, regarding an age cutoff for

applications to enter a double random drawing for general liquor

licenses, constitute an invalid exercise of delegated

legislative au thority as defined in Section 120.52(8), Florida

Statutes (2005) .

At the hearing, Petitioner offered 12 exhibits into

evidence. Respondent presented the testimony of one witness and

offered one exhibit into evidence.

After the hearing, Petitio ner filed a Proposed Final Order

on April 3, 2006. Respondent filed a Proposed Final Order on

April 4, 2006.

FINDINGS OF FACT

1. The Division of Alcoholic Beverages and Tobacco

(Division) is vested with general regulatory authority over the

alcoholi c beverage industry within the state and the creation of

double random selection drawing s for beverage licenses.

§ 561.11, Fla. Stat (2005) .

2. The Division issues both general and special alcoholic

beverage licenses. See Chapter 561 - 565, Fla. Stat . and

§§ 561.11, 561.17, and 561.19, Fla. Stat. (2005).

3. General licenses, also known as quota licenses permit

the sale or consumption of various types of beer, wine or

distilled spirits on the licensed premises. General licenses

are 1 - COP license s, 2 - COP licenses and 4 - COP licenses

Ultimately licenses are issued after an application for

licensure has been filed and investigated by the Division.

§§ 561.17 and 561.18, Fla. Stat. (2005) . Section 561.17,

Florida Statutes, only requires an “ applican t ” to be a person or

legal entity. The section does not place an age limitation on

the applicant.

4. The Beverage Law bars the issuance of an alcoholic

beverage license to a person less than 21 years old.

§ 561.15(1), Fla. Stat. (2005) . The statu te also prohibits the

issuance of a license to people who have committed certain

crimes, violated the beverage law or have had their beverage

license revoked or suspended. Similarly law enforcement

officers cannot be issued a liquor license. Section 561. 15(1),

Florida Statutes (2005) , applies only to the issuance of a

beverage license. The statutes do not specifically bar a person

under 21 years of age from entering the double random drawing

process or applying for a beverage license.

5. General be verage licenses are issued under a quota

system based on the population of the county and are limited in

number. § 561.20(1), Fla. Stat. (2005). To issue a quota

license, the Division conducts a double random drawing pursuant

to Section 561.19(2), Florid a Statutes (2005) . The drawing

determines the order in which individuals may apply for issuance

of available licenses in each county. Section 561.19 does not

use the term ”entrant,” but only uses the term “applicant.”

6. Florida Administrative Co de Rule 61A - 5.0105 establishes

a list of procedures that shall be followed when entry forms are

accepted for the issuance of new state liquor licenses.

7. This rule outlines time deadlines, what forms shall be

utilized for making an application for a n alcoholic beverage

license, how notification of winners will be conducted, how

alternates are selected, and defines certain terms.

8. Subsection (2) of Rule 61A - 5.0105 provides for the use

of DBPR Form 4000 - 033L, titled “Quota License Entry Form, ” and

the instructions that accompany it. This form and the

accompanying instructions state that an applicant must be 21

years of age in order to gain entry into the quota license

drawing. This form is not the form used to apply for a quota

license. Thi s form is simply an entry form to the quota license

drawing.

9. Under the system established by the Division, when

additional quota licenses become available by reason of an

increase in the population of a county or by reason of existing

licenses bei ng revoked and re - included in the available license

pool, the Division annually publishes a notice in the Florida

Law Weekly of the number of licenses available and establishes

the 90 - day application period for entry into the double random

drawing. Entry into the double random drawing does not mean

that the entrant has applied for or may receive a quota license.

The entry form only permits the applicant to participate in the

drawing to determine the order of the entrants that will later

receive the opport unity to apply for a quota license. If a

person or entity files a properly completed entry form and pays

a nonrefundable $100.00 entry fee, the entrant is included in

the quota drawing if the entry application does not disclose on

its face any matter rend ering the entrant ineligible.

§ 561.19(2)(d), Fla. Stat. (2005).

10. After the 90 - day application period ends, the Division

publishes notice in the Florida Administrative Weekly of the

date scheduled for the quota drawing. There is no set time

after the application period that the Division holds the quota

drawing. The interim period is used to process the various

entry applications. Drawings held during the last three years

have been delayed from 7 to 10 months after the close of the

application pe riod. In this case, the drawing has not been

held.

11. After the drawing, the Division notifies the person

selected first of their entitlement to apply for a quota

license. Under Section 561.19(2)(c), Florida Statutes (2005) ,

the selected person ha s 45 days from the date of the Division’s

mailing of the notice of selection to file an application for a

quota license. At this point, the Division investigates the

person ’ s eligibility to possess a quota license and either

grants or denies the applicati on. Depending on the action

taken, the Division proceeds down the list, notifying each

entrant of his or her right to apply for a quota license.

12. For example, a felony conviction does not necessarily

render an applicant ineligible to hold an alco holic beverage

license. Thus the simple disclosure of such would not render

the application ineligible on its face. There are circumstances

in which an individual with a felony conviction may hold an

alcoholic beverage license. Such a person may enter t he quota

drawing.

13. Likewise, a previously revoked alcoholic beverage

license would also not necessarily render the application

ineligible on its face. The determination would be based on the

type of license revoked, and the date of the revocation .

14. On August 12, 2005, the Division published notice in

Volume 31, Number 32 of the Florida Administrative Weekly that

quota licenses were available in several Counties. The entry

period was established from August 15, 2005 through November 12,

2 005. Entry could only be made using DBPR Form ABT 4000 - 033L.

The instructions to this form prohibit a person who is under 21

years old at the close of the application period from entering

the quota drawing.

15. The Petitioner, Brent A. Moody, is a resident of

Tallahassee, Florida. He was born on December 11, 1984.

16. On November 1, 2005, the Petitioner properly completed

and filed entry applications with the Division for the year 2006

quota license drawings for Bay, Duval, Franklin, Indian R iver,

Lee, Lake, Manatee, Polk, Walton, Volusia, Sarasota, St. Johns,

Palm Beach, Orange, Martin, Leon, Broward, Dave, Collier,

Hillsborough, Hernando, and Brevard.

1 7 . At the end of the application period for the 2006

quota license drawing, the Peti tioner was 29 days shy of his

21 st birthday. He is now over 21 years old.

1 8 . The applications filed by the Petitioner were rejected

for the year 2006 quota license drawing because he would not be

21 years old by the close of the entry period. Ther e is no

dispute that the Petitioner would have been 21 years old by the

time any opportunity to apply for a 2006 quota license might

have been extended to him.

1 9 . The Division relies upon an in par i materia reading of

Sections 561.15, 561.17 and 561 .19, Florida Statutes (2005) , for

the authority to require an individual to be 21 years of age in

order to submit an application for entry into the quota license

drawing.

CONCLUSIONS OF LAW

20 . The Division of Administrative Hearings has

jurisdicti on over the parties to and the subject matter of this

proceeding. § 120.56, Fla. Stat. (2005).

21 . The Petitioner has challenged as an invalid exercise

of delegated legislative authority, the Division’s Florida

Administrative Code Rule 61A - 5.0105(2) , which adopts form ABT

4000 - 033L, entitled Quota License Entry Form, based upon the

form’s adopted instruction sheet that requires an applicant for

inclusion in the Section 561.19 quota drawing to be 21 years of

age by the end of the drawing application p eriod.

2 2 . In order to establish that the existing rule is

invalid, the Petitioner bears the burden of proving by a

preponderance of the evidence that the rule is an invalid

exercise of delegated legislative authority. § 120.56(3)(a),

Fla. Stat. ( 2005).

2 3 . The Petitioner's burden to establish an invalid

exercise of delegated legislative authority "is a stringent

one." Cortes v. State Bd. Of Regents , 655 So. 2d 132, 136 (Fla.

1st DCA 1995) quoting Agrico Chemical Co. v. State Dep't of

Envt l. Regulation , 365 So. 2d 759, 763 (Fla. 1979) cert. denied ,

376 So. 2d 74 (Fla. 1979). Great weight will be given to rules

which have been in effect over an extended period and the

meaning assigned to them by officials charged with their

administration u nless such construction is clearly erroneous.

State, Dept. of Commerce, Div. Of Labor v. Matthews Corp. , 358

So. 2d 256, 260 (Fla. 1st DCA 1978).

2 4 . The ultimate question in an existing rule challenge is

whether the rule is "an invalid exercise of delegated

legislative authority." § 120.56(1), Fla. Stat. (2005).

Section 120.52(8), Florida Statutes, defines an invalid exercise

of delegated legislative authority as an "action which goes

beyond the powers, functions, and duties delegated by the

Legis lature," by enlarging or modifying specific statutes or by

being arbitratry or capricious. A rule is arbitrary or

capricious if it is adopted without thought or reason or is

irrational. Id.

2 5 . To be valid a rule must comply with Section 120 .52(8),

Florida Statutes. Section 120.52(8), provides:

A grant of rulemaking authority is necessary

but no sufficient to allow an agency to

adopt a rule; a specified law to be

implemented is also required. An agency may

adopt only rules that implement or interpret

the specific powers and duties granted by

the enabling statute. No agency shall have

authority to adopt a rule only because it is

reasonable related to the purpose of the

enabling legislation and is not arbitrary

and capricious or is within the agency's

class of powers and duties, nor shall an

agency have the authority to implement

statutory provision setting fort the general

legislative intent or policy. Statutory

language granting rulemaking authority or

generally describing powers and functi ons of

an agency shall be construed to extend no

further than implementing or interpreting

the specific powers and duties conferred by

the same statute.

§ 120.52(8), Fla. Stat (2005) (emphasis supplied). See Bd. Of

Trustees of the Internal Improvement Trust Fund v. Day Cruise ,

794 So. 2d 696 (Fla. 1st DCA 2001); see also Sw. Fla. Water

Mgmt. Dist. v. Save the Manatee Club, Inc. , 773 So. 2d 594 (Fla.

1st DCA 2000).

2 6 . The test for invalid delegation of legislative

authority is whether a rule gives effect to a "specific law to

be implemented," and whether the rule implements or interprets

"specific powers and duties." Day Cruise , 794 So. 2d 15 704.

2 7 . The court in Day Cruise discussed the 1999

Administrative Procedure Act ("Act") amendments as follows:

Under the 1996 and 1999 amendments to the

APA, it is now clear, agencies have

rulemaking authority only where the

Legislature has enacted a specific statute,

and authorized the agency to implement it,

and then only if the . . . rule implements

or interprets specific powers or duties , as

opposed to improvising in an area that can

be said to fall only generally within some

class of powers or duties the Legislature

has conferred on the agency.

Day Cruise , 794 So. 2d at 700. See generally Save th e Manatee

Club, Inc. , 773 So. 2d at 598 - 599.

2 8 . The court in Save the Manatee Club, Inc. , found that a

rule that "implements or interprets" will necessarily contain

language that is more specific and detailed than the language

that is used in the di rective itself. Save the Manatee Club,

Inc. , 773 So. 2d 594, 599 (Fla. 1st DCA 2000).

2 9 . In this case, the Division has the general and

specific authority to create rules governing a double random

drawing process. §§ 561.11 and 561.19, Fla. Stat. (2005) .

Section 561.19(2) is the sole statutory authority governing the

legislative criteria for double random selection drawings by the

Division. The Section provides:

( a) When beverage licenses become available

by reason of an increase in the populati on

of a county, by reason of a county

permitting the sale of intoxicating

beverages when such sale had been

prohibited, or by reason of the revocation

of a quota beverage license, the division,

if there are more applicants than the number

of available lice nse, shall provide a method

of double random selection by public drawing

to determine which applicants shall be

considered for issuance of licenses. The

double random selection drawing method shall

allow each applicant whose application is

complete and do es not disclose on its face

any matter rendering the applicant

ineligible an equal opportunity of obtaining

an available license . After all

applications are filed with the director,

the director shall then determine by random

selection drawing the order i n which each

applicant’s name shall be matched with a

number selected by random drawing, and that

number shall determine the order in which

the applicant will be considered for a

license . . . .

(c) Subject to this selection process, an

app licant shall, after a drawing is held,

have 45 days from the date the division

mails the notice of selection to file an

applicant is found by the division to be

qualified, a license shall be issued. The

application shall be filed pursuant to s.

561.17, an d the license shall be issued upon

the payment of the applicable license fees .

If the applicant is not prepared to use the

license at a business location, the license

shall be held in an inactive status by the

division, and the licensee shall be required

to activate the license at a location in

accordance with s. 561.29. Nothing

contained herein, however, shall prohibit

the division from revoking a license issued

to a person, firm, or corporation that would

not qualify for the issuance of a new

license or the transfer of an exiting

license. (Emphasis added)

(d) The director shall not include more

than one application from any one person,

firm, or corporation in the random selection

process, nor may she or he consider more

than one application for any one person,

firm, or corporation when there are fewer

applications than available licenses.

(e) Each applicant for inclusion in the

drawing shall pay to the division a filing

fee of $100.

(3) In the event that the number of

applications does not ex ceed the number of

licenses available, the drawing provided in

subsection (2) shall not be held, but the

licenses shall be issued in accordance with

the provisions of subsection (2).

(4) The issuance of licenses pursuant to

subsection (2) or subsection (3) shall not

be governed by the provision of s. 120.60.

The issuance of any such license shall occur

no later than 180 days after a drawing is

held pursuant to notice in the Florida

Administrative Weekly or, in the event no

drawing is held, within 180 d ays of the

final date for filing applications. Any

applicant who is not included in the pool

for drawing to determine priority shall

file, within 30 days of the date of mailing

of notice to such applicant, a challenge to

such action pursuant to ss.120.569 and

120.57, or the right to file any action as

to such matter shall be forever lost. Any

applicant whose name is included in the pool

for drawing to determine priority but who is

not issued a license shall be entitled to

request a hearing on the denial p ursuant to

ss. 120.569 and 120.57 only on the grounds

that the selection process was not conducted

in accordance with law or that the licensee

selected does not possess the qualifications

required by law.

30 . Florida Administrative Code Rule 61A - 5 .0105(2),

provides that:

All persons seeking to apply for a new

license shall file DBPR form ABT 4000 - 033L,

Quota License Entry Form, effective 1/98 and

incorporated herein, together with the non -

refundable filing fee stated on the form. .

. .

* * *

Speci fic Authority 561.11 FS. Law

Implemented 120.57, 561.14, 561.17, 561.18,

561.19, 561.20 FS. History - New 1 - 20 - 97,

Amended 1 - 8 - 98.

The general instructions included as part of the adopted form,

provide that:

An application must be typed or legibly

print ed in ink and all questions must be

answered. Incomplete applications will be

denied. Only completed applications will be

accepted for filing with the Division. All

applicants listed on the application must be

21 years of age by the end of the

applicati on period in order for the

application to be accepting for filing. If

the application is accepted for filing, you

will be included in the drawing.

31 . Section 561.17, Florida Statutes , only requires

“applicants” to be a “legal or business entity, person or

persons . . . . ” Section 561.15(1), Fl orida Stat utes, l ists the

requirements a person or entity must meet to receive a beverage

license. Section 561.15 provides that:

[l]icenses shall be issued only to persons

of good moral character who are no t less

than 21 years of age. (emphasis supplied)

3 2 . In addition to the requisite age requirement to be

issued a liquor license, Section 561.15(2), Florida Statutes,

provides that liquor licenses shall not be issued to persons who

have had a prior conviction of certain crimes:

[A]ny person who has been convicted within

the last past 5 years of any offense against

the beverage laws of this state, the United

States, or any other state; who has been

convicted within the last past 5 years in

this state or any other state or the Un i ted

States of soliciting for prostitution,

pandering, letting premises for

prostitution, or keeping a disorderly place

or of any criminal violation of chapter 893

or the controlled substance act of any other

state or the Federa l Government; or who has

been convicted in the last past 15 years of

any felony in this state or the United

States. . . .

3 3 . However, an applicant’s qualifications to be issued a

quota liquor license are not determined until the S ection 561.17

li quor license application is filed with the Division. Indeed,

a police officer can enter the quota drawing and be issued a

liquor license if he or she resigns his or her position as a

police officer after the drawing but before the S ection 561.17

applicati on is filed. A convicted felon can enter the drawing

and be issued a liquor license, if the period of ineligibility

lapses or if he or she has a restoration of civil rights after

the drawing but before the S ection 561.17 application is filed.

Age howev er, is not treated the same as other eligibility

criteria. The Division , through an in par i materia reading of

its statutes , has interpreted those statutes to mean that a

person not yet 21 by the end of the application period, but who

will be 21 by the ti me of filing the Se ction 561.17 application

is ineligible to apply for a liquor license because he or she is

ineligible for the issuance of a liquor license.

3 4 . The First D istrict Court of Appeal in Day Cruise and

Save the Manatee Club Inc. w as cons istent in invalidating rules

because the enabling statutes were void of language that

contained a specific grant of legislative authority and not

because the enabling statute was not specific enough. See Save

the Manatee Club Inc. , 773 So. 2d at 599 ("The question is

whether the statute contains a specific grant of authority is

specific enough") . See also Day Cruise , 794 So. 2d at 704 ("in

the absence of a specific power or duty enabling or requiring

the Trustees to regulate gambling or to regulate on the basis of

activities occurring aboard vessels after they leave sovereignty

submerged lands and adjacent waters, the Trustees' proposed rule

exceeds the Trustees' rulemaking authority and is an invalid

exercise of delegated legislative authority as defined in

Section 120.52(8)(c)") .

3 5 . Section 561.01, Florida Statutes, relating to

definitions, does not expressly define what an applicant in the

quota drawing is. In the absence of a statutory definition, the

Division is allowed to resort to related sta tutory provisions

and read them in par i materia in order to ascertain the proper

meaning. See State v. Christie , 2005 WL 2861101, 2 (Fla. 3rd

DCA 2005) ("[W]hile the legislature may direct that statutes be

read in pari materia , the absence of such a direc tive does not

bar construing two statutes in that manner.") quoting DuFresne

v. State , 826 S o. 2d 272, 275 (Fla. 2002). However, the

Division’s interpretation must flow logically from those

statutes and the reading thereof.

3 6 . The problem is that t he Division’s interpretation

varies because it does not treat all eligibility requirements

the same. The distinction between an eligibility requirement of

age, that is changeable over time, and the other eligibility

requirements, that are likewise changea ble over time , is not

logical. Nor did the evidence demonstrate that the differing

treatment of such changeable eligibility requirements is either

integral to and/or necessary for the quota license drawing

system developed by the Division. Given this ill ogical and

inconsistent interpretation , the age requirement for entry into

the quota license drawing is not a valid exercise of delegated

legislative authority.

ORDER

Based on the forgoing, it is hereby determined that

the Department of Business and Professional Regulation

Rule 61A - 5.0105 is an invalid exercise of delegated legislative

authority.

DONE AND ORDERED this 9 th day of June , 2006 , in

Tallahassee, Leon County, Florida.

S

DIANE CLEAVINGER

Administrative La w Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9 th day of June , 2006 .

COPIES FURNISHED :

Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Purnell &

Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302 - 0551

Sorin Ardelean, Esquire

Department of Business and

Professional Regu lation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

John Lockwood, Qualified Representative

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Ma ggie M. Schultz, Esquire

Rutledge, Eceni, Purnell, & Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302 - 0551

Josefina Tamayo, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallaha ssee, Florida 32399 - 0792

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

Simone Marstiller, Secretary

Department of Business and

Professional Regulation

Northwood Centre

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 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 th e party resides. The notice of

appeal must be filed within 30 days of rendition of the order to

be reviewed.