06-003537RU Capital Collateral Regional Counsel-Middle Region And John W. Jennings vs. Department Of Financial Services Status: Closed DOAH Final Order on Thursday, January 11, 2007.

Summary: The statutory construction of Section 11.062, that Petitioner Capital Collateral is an executive agency prohibited from lobbying, is an invalid rule; it satisfies the definition of a rule, has not been promulgated, and rulemaking is feasible.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAPITAL COLLATERAL REGIONAL )

COUNSEL - M IDDLE REGION AND JOHN )

W. JENNINGS, CAPITAL COLLATERAL )

REGIONAL COUNSEL , )

)

Petitioners, )

)

vs. ) Case No. 06 - 3537RU

)

DEPARTMENT OF FINANCIAL )

SERVICES, )

)

Respondent. )

)

F INAL ORDER

Administrative Law Judge (ALJ) Daniel Man ry conducted the

formal hearing of this case on October 31, 2006 , in Tallahassee,

Florida , for the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioners: Peter J. Cannon, Esquire

3801 Corporex Park Drive, Suite 210

Tampa , Florida 33619

For Respondent: Richard T. Donelan , Jr., Esquire

M. Drew Parker, Esq uire

Florida Department of Financial Services

The Fletcher Building, Suite 464

200 East Gaines Street

Tallahassee, Florida 323 99 - 4247

STATEMENT OF THE ISSU ES

The issue s are whether R espondent's construction of S ection

11.062, Florida Statutes (2006 ) , i s an unadop ted rule , described

in Subsection 120 .56(4), Florida Statutes (2006); whether

rulema king is not feasible for a reason authorized in S ubsec tion

120.54(1 ) (a) , Florida Statutes ( 200 6 ) ; and whether either of the

petitioners is a person substantially affected by the unadopted

rule . (Sta tutory references are to Florida Statute s (2006) ) . 1

PRELIMINARY STATEMENT

On September 19 , 2006, Petitioners filed a rule - challenge

petition with DO AH pur suant to Subsection 120.56(4 ) . DOAH

assigned the matter to the undersigned on September 22, 2006 .

The ALJ scheduled the h earing for October 18, 2006, but

continued the hearing until October 31, 2006, pursuant to

Respondent's Unopposed Motion for Co ntinuance.

At the hearing, Petitioners presented the testimony of

three witnesses and submitted 13 exhibits for admission into

evidence. Respondent presented the testimony of three witness es

and submitted five exhibits for admission into evidence.

The ide ntity of the witnesses and exhibits, and the rulings

regar ding each, are reported in the two - volume Transcript of the

hearing filed with DOAH on November 28, 2006. The parties

timely filed their respective proposed final orders (PFOs) on

December 8, 2006.

FINDINGS OF FACT

1. Petitioner , Capital Collateral Regional Cou nsel - Middle

Region ( CCRC - MR) , is one of three governmental unit s authorized

in Section 27.701 to provide co llateral legal representation for

certain person s convicte d and sentenced to deat h in the state .

Each governmental unit functions in a distinct multi - county

region identified in the statute as either the northern, middle,

or southern region.

2. The middle region in which CCRC - MR is statutorily

required to function consists of eight j udicial c ircuits . The

judicial circuits are statutorily identified as the Fifth,

Sixth, Seventh, Ninth, Tenth, Twelfth, and Thirteenth Judicial

Circuits.

3 . Petitioner , John W. Jennings, is the Capital Collatera l

Regional Counsel with statutory responsib ility for administering

CCRC - MR. T he Supreme Court Judicial Nominating Committee

recommended Mr. Jennings to the Governor , the Governor appointed

Mr. Jennings, and the Florida Senate confirmed the appointment .

4. Each appointment is for a three - year peri od.

Mr. Jennings is currently subject to reappointment.

5 . The administra tion of CCRC - MR is supervised by the

Commission on Capital Cases ( Commission). The Commission has

exclusive statutor y responsibility for the oversight of each

regional office purs uant to Section 27.709.

6 . The Commission consists of six members each of who m

serve s a term of four years . The G overnor appoints two members

to the Commission. The President of the Senate and the Speaker

of the House each appoint two members. One of the two members

appointed by the President and Speaker , respectively, must be a

member of the majority party, and the other appointee must be a

member of the minority party. The Office of Legislative

Services is statutorily required to provide staff supp ort to the

Commission.

7. Salaries for each regi onal office must be submitted

annually to the Justice Administrative Commission and the

offices of the President of the Senate and the Speaker of the

House in accordance with Subsection 27.705 . However, Sec tion

27.702(1) provides, in relevant part:

The three capital collateral regional

counsels' offices shall function

independently and be separate budget

entities, and the regional counsels shall be

the office heads for all purposes. The

Justice Administrati ve Commission shall

provide administrative support and service

to the three offices to the extent requested

by the regional counsels. The three

regional counsels shall not be subject to

control, supervision, or direction by the

Justice Administrative Comm ission in any

manner, including, but not limited to,

personnel, purchasing, transactions

involving real or personal property, and

budgetary matters.

8 . Respondent is a state agency authorized in Section

17.002. Respondent is an executive agency describe d in

Subsection 20.121.

9 . Section 11.062, in relevant part, prohibits an

executive, judicial, or quasi - judicial department from using

public funds to retain a lobbyist other than a full - time agency

employee ( outside lobbyist ) to represent the department before

the legislative or executive branches of government (prohibited

lobbying) . If public funds are misused for prohibited lobbying,

t he statute provides that Respondent "shall" deduct the amount

of misused publ ic funds from the salary of the responsibl e state

employee and that the offending department will be barred from

authorized lobbying for two years . 2

10 . It is undisputed that Petiti on ers have registered and

paid outside lobbyists to lobby the legislative and executive

branches of government on behalf of CCRC - MR from 2001 through

2005 . The primary purpose of the lobbying eff ort has been to

ensure annual budgets that are adequate for effectiv e legal

representation of persons convicte d and sentenced to death in

those judicial circuit s that are wit hin the functional and

territorial purview of CCRC - MR.

11 . Between April 15, 2002, and June 22, 2005, Petitioners

submitted approximately 28 invoices to Respondent totaling

$119,000. Two invoices on April 15 and May 23, 2002, were for

$10,000 each. Fi ve invoices from August 25, 2003, through

January 26, 2004, were for $2,600 each. The remaining

21 invoices ranged from $3,400 to $7,500 each.

12. Each of the invoices were earmarked as payments for

"consulting services . " However, Respondent has been aware since

2001 that CCRC - MR has engaged outside lobbyists to represent

CCRC - MR before the legislative and executive branches of

government. Respondent approved all of the invoices .

13 . A primary dispute between the parties involves the

issue of whethe r CCRC - MR is an agency of the executive branch

of government (executive agency) or an agency of the legislative

branch (legislative agency). Respondent construes Section

11.062 to mean that CCRC - MR is an executive agency and that

Section 11.062 prohibits CCRC - MR from using public funds to

lobby the legislative or executive branches of government.

Petitioners construe Section 11.062 to mean that CCRC - MR is a

legislative agency that is not prohibited from using public

funds for prohibited lobby ing . 3

14 . A determination of whether CCRC - MR is an executive or

legislative agency is not necessary for the disposition of this

rule challenge. A rule challenge conducted pursuant Section

120.56(4) does not require a determination that Respondent's

statutory constru ct ion of Section 11.062 is invalid because it

exceeds the scope of delegated legislative authority or for any

of the other reasons described in Subsections 120.52(8)(b)

through (f ). The scope of this rule challenge is limited to a

determination of whether the challenged statutory construction

is invalid solely because Respondent has failed to promulgate

the statutory construction as a rule within the meaning of

Subsection 120.52(8)(a) .

15 . For Petitioners' rule challenge to succeed, Subsection

120.56(4) f irst requires the evidence to show that the

challenged statutory construction is a rule. Subsection

120.52(15) defines a rule , i n rel evant part, to mean :

. . . each agency statement of general

applicability that implements, interprets,

prescribes law or p olicy [but] . . . does

not include [the express exceptions in

Subsections 120.52(15)(a) - (c)].

16 . Subsection 120.52(15) imposes several requirements

that must be satisfied in order for Respondent's construction of

Section 11.062 to be defin ed as a rule . First, Respondent must

express the challenged statutory construction as an agency

sta tement. Second, the agency statement must satisfy the test

of gen eral applicability. Third, the stateme nt of general

applicability must, in relevant part, implement, in terpret, or

prescri be law or policy. Finally, the statement of general

applicability that implements, interprets, or prescribes law or

policy must not fall within one of the express exceptions to the

definition of a rule.

17 . Respondent has expressed the challenged construction

of Section 11.062 in several statements of longstanding agency

policy . T hat policy traces its roots to the early 1990s , and

Respondent has iterated its policy through various means of

government communication .

18 . Most recently, Respondent stated it s policy in a

letter to Mr. Jennings dated September 27, 2006, approximately

eight days after Petitioners filed the instant rule challenge.

In relevant part, the letter states:

This is in response to your letter to the

Bureau of State Payrolls dated September 20,

2006, regarding your W - 4 Form.

Whenever state employees are under

investigation for possible misuse of state

funds, we routinely flag their W - 4 record in

our payroll system; your payroll account was

flagged because of question s surrounding

lobbying expenditures you authorized.

Because of this action, however, our data

processing system automatically generated a

new W - 4 form that was inadvertently sent to

you twice. Please disregard both of these

W - 4 forms. No action of any k ind has ever

been taken by this office as a result of the

duplicate forms you received.

We apologize for any inconvenience that may

have been caused.

Petitioner's Exhibit (P) - 9.

19 . Respondent previously stated the challenged statutory

construction in an investigat ive report precipitated by several

complaints against the Capital Collateral Regional Counsel for

the Southern Region (CCRC - SR) , the last of which Respondent

received on March 29, 2005. Respondent's Office of Fiscal

Integrity (OFI) initiated a formal in vestigation of CCRC - SR and

subsequently expanded the scope of the investigation to include

the lobbying activities of CCRC - MR.

20 . Respondent issued a final report of the investigation

on August 29, 2006 . In relevant part, the report expres sed the

challenged statutory construction as follows :

CCRC officials have argued that CCRC's are

not part of the executive branch, claiming

this would make them exempt from the

provisions of Section 11.062. . . . A legal

opinion dated January 11, 2006, by DFS

counsel indicates that although CCRC's were

initially created in the judicial branch,

they were moved to the executive branch in

1997. The legal opinion noted that the

CCRC's have been repeatedly defined by

statute as executive branch agencies. . . .

Examples include Section 23.21(1). . . ,

which notes that CCRC's are included as

"principal administrative unit(s) within the

executive branch of state government. . . .

CCRC's are also defined by name in Section

186.003(6) . . . as state agencies, which

are in turn defined in this section as "any

official, officer, commission, board . . .

or department of the executive branch of

state government. [ 4 ]

* * *

In the case of the CCRC - Middle office, a

staff attorney working for Jennings wrote an

opinion saying essentially that the CCRC's

were exempt from the provisions of Section

11.062 . . . because in their opinion, they

are not part of the executive branch. In

Jennings sworn statement, he acknowledged

that he did not seek a legal opinion from

anyone o utside of his office. According to

Jennings' sworn statement, he continues to

pay . . . for lobbying services even though

the contract reflects "consulting services."

Jennings, on behalf of CCRC - Middle

authorized payments . . . totaling $119,000.

* * *

It is recommended that . . . DFS legal staff

initiate action against . . . Jennings to

recover . . . funds that were

inappropriately paid by Jennings to

lobbyist[s] in violation of Sections 11.062

and 216.311.

P - 1 at 19 and 20.

21 . Respondent has also stated the challen ged statutory

construction in an Interoffice Communication dated January 11,

2006, and in a memorandum to state agencies dated March 31,

2003. Respondent issued the latter memorandum as a direct

result of the lobbying expenditures o f CCRC - MR but did not

deliver the memorandum to CCRC - MR.

22. Respondent argues that it has not uttered an agency

statement, in relevant part, because the recommendation in the

Report of Investigation has no force or effect without the

authorization of t he agency head. 5 The argument ignores

substantial evidence of other iterations of the agency statement

over the years as well as the consistent interpretation by

agency witnesses of the force and effect of the statement in its

various iterations.

23 . The agency statement of the challenged statutory

construction satisfies the test of general applicability.

Respondent intends the agency statement to have the force and

effect of law. Respondent applies the statement in a manner

that requires compliance by all state agencies and employees

with the direct and consistent effect of law. The statement

creates enforcement rights in Respondent and imposes substantive

standards on state agenci es and employees who are not described

in the express terms of Section 1 1.062 .

24 . According to the Program Manager in charge of OFI, it

is unlawful for Petitioners to expend funds for outside lobbying

irrespective of whether CCRC - MR is an executive agency or

legislative agency. "The issue of whether they're an executive

ag ency is just an issue of collection." Respondent's Director

of the Division of Accounti ng and Auditing agrees with the

testimony of the Program Manager .

2 5 . The agency statement of general applicability

interprets and implements Section 11.062. Section 11.062 does

not expressly define an execut ive agency to include CCRC - MR. 6

The agency statement defining CCRC - MR as an executive agency

interpret s law within the meaning of Subsection 120.52(15) .

2 6 . The executive branch of government is constitutionally

and statutorily required to organize its executive agencies into

no more than 25 departments. 7 The executive departments

enumerated in Chapter 20 do not expressly identify CCRC - MR as an

executive agency. The agency statement that CCRC - MR is an

executive agency interpret s law within the meaning of Subsection

120.52(15) .

2 7 . Respondent relies on S ubs ection 23.21(1) to define

CCRC - MR as an executive agency for the purposes of Section

11.062. Subsection 23.21(1), in relevant part, defines the term

"departm ent" to include "a principal administrative unit within

the executive branch . . . and includes . . . the Capital

Collateral Representative. . . ." However, the quoted

definition is expressly limited to "the purposes of this part",

i.e., the Paper Reducti on provisions in Sections 23.20

through 23.22. Expanding the quoted definition for purposes

other than Paper Reduction, including the purposes of Section

11.062, interprets law within the meaning of Subsection

120.52(15).

28 . In similar fashion, Respond ent relies on Subsection

186.003(6) to define CCRC - MR as a state agency. Expanding the

definition beyond the purposes of Chapter 186 to include the

purposes of Section 11.062 interprets law within the meaning of

Subsection 120.52(15).

29 . Respondent sta tes in the alternative that CCRC - MR is

not an agency but is a subdivision of an executive agency. The

parties devoted a substantial amount of evidence in an effort to

dem onstrate that CCRC - MR is a unit of either a legislative or

executive agency of govern men t. As previously stated, the scope

of this proceeding does not require a resolution of the dispute

between the parties. The competing evidence, however, does

demonstrate that the challenged agency statement interprets law

within the mean ing of Subsect ion 120.52(15).

30 . The agency statement of general applicability that

interprets law and implements Section 11.062 does not fall

within an express exception to the definition of a rule in

Subsection 120.52(15). The iteration of th e agency statement in

t he letter to Mr. Jennings that followed the report of

investigation is not an internal management memorandum, legal

memorandum, or memorandum to other state agencies within the

meaning of Subsections 120.52(15)(a), (b), or (c). The

iteration of the agency statement in an internal management

memorandum issued as a d irect result of the lobbying efforts of

CCRC - MR affect s the private interests of Mr. Jennings, if for no

other reason, by subjecting his salary to garnishment.

31 . T he challenged statutory cons truction is a rule within

the meaning of Subsection 120.52(15). Respondent has not

promulgated the rule pursuant to the rulemaking procedures

prescribed in Section 120.54.

32 . A preponderance of evidence does not support a finding

that rulemaking is no t feasible within the meaning of

Subsection 120.54(1)(a)1. Respondent argued but offered no

factual evidence to support such a finding. Nor did Respondent

initiate rulemaking in accordance with Subsection 120.56(4)(e).

33 . Mr. Jennings is a person subs tantial ly affected by the

unpromulgated rule within the meaning of Subsection

120.56(4)(a). Subsection 11.062(1) requires Respondent to

garnish the salary of Mr. Jennings if Respondent determines that

Mr. Jennings violated the statutory prohibition agains t outside

lobbying .

34 . After Respondent concluded the administrative

investigation on August 29, 2006, the Director of the Division

of Accounting and Auditing directed the Bureau Chief for the

Division of State Payrolls to access the personal payroll

acc ount of Mr. Jennings on two occasions. Respondent

subsequently exercised prosecutorial discretion not to garnish

the salary of Mr. Jennings.

35 . Mr. Jennings is currently subject to reappointment to

his position of employment. Mr. Jennings must disclose to the

Supreme Court Judicial Nominating Committee that he is currently

under investigation by OFI . The disclosure subject s Mr.

Jennings to a potential loss of reappointment.

36 . CCRC - MR is a person substantially affected by the

unpromulgated rule. A change in leadership would impair the

institutional knowledge required to adequately represent per sons

in eight judicial circuits who have been convicted and sentenced

to death.

37 . Placement of CCRC - MR within the executive branch of

government creates a potential conflict of interest for CCRC - MR.

Such a placement arguably would make t he legal representative of

death row inmates responsible to the executive branch of

government which , in turn, must either execute the clients of

the representative or co mmut e their death sentences .

CONCLUSIONS OF LAW

38 . DOAH has jurisdiction over the subject matter and the

parties in this proceeding. §§ 120.569, 120.54, and

120.56(4)(a). DOAH provided the parties with adequate notice of

the administrative hearing.

39 . Petitioners have the burden of proving by a

preponderance of the evi dence that the challenged statutory

construction satis fies the definition of a rule in Subsection

120.52(15). § 120.56(4)(b). The burden then shifts to the

agency to prove that rulemak ing is not feasible. Id .

40 . Petitioners satisfied their burden of proof.

Petitioners showed by a preponderance of evidence that the

challenged statutory construction is a rule within the meanin g

of Subsection 120.52(15) and has not been promulgated pur suant

to the rulemaking procedures prescribed in Section 120.54.

41 . An agency statement defined as a rule may be expressed

through various means of communication . An agency statement is

not required to be re duced to writing in order to be defined as

a r ule . Department of Highway Safety and Motor Vehicles v.

Schluter , 705 So. 2d 81 (Fla. 1st DCA 1997).

42. An agency statement may be expressed in letters,

telephone calls, and other conventional communications of

government. Krestview Nursing Home v. D epartment of Health and

Rehabilitative Services , 381 So. 2d 240, 241 (Fla. 1st DCA

1979). An agency statement may be expressed in internal

practice manuals, proposed agency enforcement action, or any

other method that states substantive statutory requirem ents .

Cf. Reiff v. Northeast Florida State Hospital , 710 So. 2d 1030,

1032 (Fla. 1st DCA May 27, 1998)(enforcement of clinical

privileges in hospital by - laws is an invalid rule); Federation

of Mobile Home Owners of Florida, Inc. v. Florida Manufactured

Ho using Association, Inc. , 683 So. 2d 586, 591 - 592 (Fla. 1st DCA

1996)(unpromulgated policy of general applicability that repeals

an existing promulgated rule is itself a rule under former

Section 120.535 even when agency denies existence of the

unpromulgate d policy); Department of Revenue of State of

Florida v. Vanjaria Enterprises, Inc. , 675 So. 2d 252, 255

(Fla. 5th DCA 1996) (enforcement of tax assessment procedure in

training manual is an invalid rule); Christo v. Florida

Department of Banking and Fina nce , 649 So. 2d 318, 319 (Fla. 1st

DCA 1995)(enforcement of "CAMEL" ratings as a means to recover

costs of examination and supervision of an institution is an

invalid rule under former Section 120.535), rev. dismissed mem .,

660 So. 2d 712 (Fla. 1995); Flor ida Public Service Commission v.

Central Corporation , 551 So. 2d 568, 570 (Fla. 1st DCA

1989)(administrative order is invalid rule); McCarthy v.

Department of Insurance and Treasurer , 479 So. 2d 135, 136 (Fla.

2d DCA 1985)(letter establishing qualification s for eligibility

and revoking certification is invalid rule), reh'g denied ;

Department of Administration, Division of Personnel v. Harvey ,

356 So. 2d 323, 324 (Fla. 1st DCA 1977)(statement denying

application is an invalid rule), reh'g denied . Agency

enf orcement action may not be employed to prescribe substantive

standards. Albrecht v. Department of Environmental Regulation ,

353 So. 2d 883, 887 (Fla. 1st DCA 1977), cert. denied , 359 So.

2d 1210 (Fla. 1978).

43 . The issue of w hether an agency statemen t is a

statement of incipient non - rule policy or has emerged into a

statement of general applicability is determined by the effect

of the agency statement rather than the label ascribed to it by

the agency. Department of Revenue of State of Florida v.

Van jara Enterprises, Inc. , 675 So. 2d 252 (Fla. 5th DCA 1996);

Balsam v. Department of Health and Rehabilitative Services , 452

So. 2d 976 (Fla. 1st DCA 1984); Amos v. Department of Health and

Rehabilitative Services , 444 So. 2d 43 (Fla. 1st DCA 1983);

Departm ent of Administration, Division of Personnel v. Harvey ,

356 So. 2d 323 (Fla. 1st DCA 1977).

44. Agency statements satisfy the test of general

applicability if they:

. . . are intended by their own effect to

create rights, or to require compliance, or

ot herwise to have the direct and consistent

effect of law.

McDonald , 346 So. 2d at 580.

45 . The agency statement at issue in this proceeding

satisfies the test of general applicability. The statement

create s enforcement rights in Respondent and require s compliance

with substantive standards by state agencies and employees that

are not described in the express terms of Section 11.062 .

46 . The agency statement of general applicability

interprets law and implements Section 11.062. The legislature

did n ot include in Section 11.062 an express state ment of

legislative policy defining CCRC - MR as an executive agency that

is barred from retaining outside lobbyi s ts . Rather, the

legislature deleted from the final enactment of Chapter 27 draft

language that exp ressly provided that CCRC - MR is an executive

agency. 8 The challenged agency statement would interpret Section

11.062 to enforce a statement of legislative policy that the

legislature intentionally excluded from Chapter 27 .

47 . The separation of powers do ctrine prohibits an

executive agency such as Respondent from exercising the powers

of the legislature. Fla . Const ., Art. II, § 3. The doctrine

encompasses two prohibitions. First, no branch of government

may encroach upon the powers of another. Second, no branch may

delegate to another its constitutionally assigned power. The

second prohibition is the non - delegation doctrine. Chiles v.

Children A, B, C, D, E, and F , 589 So. 2d 260, 264 - 265 (Fla.

1991) .

48. The non - delegation doctrine prohibits the le gislature

from delegating legislative authority to an agency of the

exec utive branch . For example, the legislature cannot delegate

to the executive branch the power to reapportion the state

budget. See Chiles , 589 So. 2d at 267 - 268.

49. In Chiles , the court held , inter alia , that the

legislature could not delegate to the Administration Commission

the power to revise, reduce, or review the budget of the

judicial branch. The court viewed a statute defining the

judicial branch as a "stat e agency" subject to budgetary

oversight by the executive branch a s an attempt to make

legislators of the executive branch rather than an attempt to

make laws . See Chiles , 589 So. 2d at 267 - 269 .

50 . The non - delegation doctrine requires fundamental an d

primary policy dec isions to be made by a legislature that is

elected by the people to make such decisions. Chiles , 589 So.

2d at 266. The administration of legislative programs by

executive agencies such as Respondent must be pursuant to some

minimal standards and guideli nes that are ascerta inable by

reference to statutory terms enacted by the legislat ure , terms

enacted in Section 11.062 in this case. Id .

51 . Section 11.062 does not include express standards and

guideli nes that define CCRC - MR as an executive agency subje ct to

budgetary oversight by Respondent and enforcement of the

statutory prohibition against outside lobbying. However, the

challenged agency statement construes Section 11.062 to impose

such enforcement rights and standards.

52 . Any doubt concerning the proper interpretation of

Section 11.062 must be resolved in a manner that is consistent

with the non - delegation doctrine. Executive branch rulemaking

must be carried out in furtherance of, not in opposition to,

legislative policy. Willette v. Air Produc ts and Bassett and

Department of Labor and Employment Security, Division of

Workers' Compensation , 700 So. 2d 397, 399 (Fla. 1st DCA 1997).

53 . In Willette , the court rejected an agency's argument

that a validly adopted rule which contradicts a statute is

entitled to enfor cement in the absence of a Section 120.56 rule

challenge. As the c ourt expl ained:

Executive branch rulemaking is authorized in

furtherance of, not in opposition to,

legislative policy. Just as a court cannot

give effect to a statute (or administrative

rule) in a manner repugnant to a

constitutional provision, so a duly

promulgated rule, although "presumptively

valid until invalidated in a section 120.56

rule challenge" [citations omitted], must

give way . . . to any contradictory statute

that applies.

Willette , 700 So. 2d at 399.

54 . A n unado pted rule cannot accomplish that which is

prohib ited in an adopted rule. One of the principal purposes of

the Administrative Procedure Act (APA) is to eliminate unwritten

rules and invisible policy - making in the administration of laws

by the executive branch . Straughn v. O'Riordan , 338 So. 2d 832,

834 n. 3 (Fla. 1976), accord , Schluter , 705 So. 2d 81.

55 . In rejecting unwritten requirements as invalid rules,

the APA has as one of its principal goal s:

. . . the abolition of "unwritten rules" by

which agency employees can act with

unrestrained discretion to adopt, change and

enforce [legislative] policy. . . .

Id .

56 . The requirement to invalidate an unadopted rule is

intended to:

. . . close the g ap between what the agency

and its staff know about the agency's law

and policy and what an outsider can know.

(citations omitted)

McDonald , 346 So. 2d 569, 580 (Fla. 1st DCA 1977) .

57 . Respondent did not show by a preponderance of the

evidence that rul emaking is not feasible for a reason authorized

in Subsection 120.54(1)(a). Respondent offered no factual

evidence to support such a finding.

58 . Each of the petitioners is a person substantially

affected by the challenged agency statement. In Florida, unlike

the federal system, the doctrine of standing has not been

rigidly followed. Coalition for Adequacy of Fairness in School

Funding, Inc. v. Chiles , 680 So. 2d 400, 403 (Fla. 1996). The

APA is intended to expand, rather than con strain, public access

to the administrative process. NAACP, Inc. v. Florida Board of

Regents , 863 So. 2d 294, 298 and 300 (Fla. 2003).

59 . The parties submitted a substantial amount of evidence

during the hearing intended to prove that CCRC - MR is either an

executive agency or a legislative agency. Courts have w restled

over the years with similar issue s . See , e.g ., Office of the

State Attorney for the Eleventh Judicial Circuit v. Polites , 904

So. 2d 527 (Fla. 3d DCA 2005)( a state attorney carries out an

executive function when exercising prosecutorial discreti on but

a public defender does not exercise an executive function).

Compare Orlando - Orange County Expressway Authority v. Hubbard

Construction Co. , 682 So. 2d 566 (Fla. 5th DCA 1996)(territorial

test showed expressway authority operating in more than one

county is a state agency) , and Pepin v. Division of Bond

Finance , 493 So. 2d 1013 (Fla. 1986)(functional test showed

intra - county part of statewide system served a public purpose

and benefited the citizens of the state) , with Booker Creek

Preservation, Inc. v. Pinellas Planning Council , 433 So. 2d 1306

(Fla. 2d DCA 1983)(territorial test showed planning council was

a unit of local government and not a state agency because

council authority was limited to one county) , and Rubinstein v.

Sarasota County Public Hospital Board , 498 So. 2d 1012 (Fla. 2d

DCA 1986)(territorial test showed hospital board is not a state

agency because jurisdiction is confined to one county).

60 . A determination of whether CCRC - MR is an exec utive o r

legislative agency may have been necessary if Pet itioners were

to have pursue d the remedies in Subsection 120.57(1)(e). Such a

proceeding may have required DOAH to determine whether the

challenged agency statement is an invalid exercise of delegated

leg islative authority for one or more of the reasons described

in Subsection s 120.52(8)(b) through (f).

61 . Petitioners did not pursue the remedies in Subsection

120.57(1)(e). Rather, Petitioners seek the remedies authorized

in Subsection 120.56(4).

62 . The scope of this proceeding is limited to a

determination that the agency statement is a n invalid rule

within the meaning of Subsection 120.52(8)(a). The agency

statement challenged in this proceeding satisfies the statutory

definition of a rule, Respond ent violated the rulemaking

procedures prescribed in Section 120.54 , and the evidence did

not overcome the presumption that rulemaking is feasible.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED th at , pursuant to Subsec tion 120.56(4)(c), t he

challenged agency statement violates Subse ction 120.54(1)(a) .

DONE AND ORDERED this 1 1 th day of January , 200 7 , in

Tallahassee, Leon County, Florida.

S

DANIEL MANRY

Administrative Law 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 1 1 t h day of January , 200 7 .

ENDNOTES

1/ The relevant provisions of § 11.062 have remained unchanged

from at least 2001 to the date of the hearing.

2/ The statute does not prohibit the use of salaries, travel

expenses, and per diem by department employees to lobby the

legislative and executive branches of government. Section

11.062 provides:

11.062. Use of state funds for lobbying

prohibited; penalty

(1) No funds, exclusive of salaries, travel

expenses, and per diem, appropriated to, or

otherwise availa ble for use by, any

executive, judicial, or quasi - judicial

department shall be used by any state

employee or other person for lobbying

purposes, which shall include the cost for

publication and distribution of each

publication used in lobbying; other

print ing; media; advertising, including

production costs; postage; entertainment;

and telephone and telegraph. Any state

employee of any executive, judicial, or

quasi - judicial department who violates the

provisions of this section shall have

deducted from her or his salary the amount

of state moneys spent in violation of this

section.

(2)(a) A department of the executive

branch, a state university, a community

college, or a water management district may

not use public funds to retain a lobbyist to

represent i t before the legislative or

executive branch. However, full - time

employees of a department of the executive

branch, a state university, a community

college, or a water management district may

register as lobbyists and represent that

employer before the le gislative or executive

branch. Except as a full - time employee, a

person may not accept any public funds from

a department of the executive branch, a

state university, a community college, or a

water management district for lobbying.

(b) A department of the executive branch, a

state university, a community college, or a

water management district that violates this

subsection may be prohibited from lobbying

the legislative or executive branch for a

period not exceeding 2 years.

(c) This subsection shall not be construed

to prohibit a department of the executive

branch, a state university, a community

college, or a water management district from

retaining a lobbyist for purposes of

representing the entity before the executive

or legislative branch of the F ederal

Government. Further, any person so retained

is not subject to the prohibitions of this

subsection.

(d) A person who accepts public funds as

compensation for lobbying in violation of

this subsection may be prohibited from

registering to lobby befo re the legislative

or executive branch for a period not

exceeding 2 years.

(e) A person may file a written complaint

with the Commission on Ethics alleging a

violation of this subsection. The

commission shall investigate and report its

finding to the Pr esident of the Senate, the

Speaker of the House of Representatives, and

the Governor and Cabinet. Based upon the

report of the Commission on Ethics or upon

its own finding that a violation of this

subsection has occurred, a house of the

Legislature may di scipline the violator

according to its rules, and the Governor or

the Governor and Cabinet, as applicable, may

prohibit the violator from lobbying before

the executive branch for a period not

exceeding 2 years after the date of the

formal determination of a violation. The

Commission on Ethics shall adopt rules

necessary to conduct investigations under

this paragraph.

3/ Neither party asserts that CCRC - MR is a judicial or quasi -

judicial department of government within the meaning of Section

11.062. Comp are DFS Report of Investigation , Exhibit 55 with

Petitioners' Legal Memorandum in support of Rule Challenge

Petition Pursuant to 120.56(4).

4/ The statement that CCRCs were moved to the executive branch

of government is inconsistent with the legislative history of

Ch. 27. In 1985, CCRCs were organized as agencies in the

judicial branch of government. The legislature revised that

structure in 1997. While the draf t legislation in 1997 moved

CCRCs from the judicial to the executive branch of government,

the legislature deleted the provision that placed CCRCs within

the executive branch of government from the final version of the

bill enacted into law. See discussion and citations to

legislative history in Petitioners' Legal Memorandum attached to

the rul e - challenge petition.

5/ The argument may have relevance in a proceeding conducted

pursuant to Subsection 120.57(1)(e). In a proceeding conducted

pursuant to Subsection 120.56(4), however, evidence that the

agency head does not enforce an agency stateme nt in a particular

case demonstrates the exercise of prosecutorial discretion but

does not prove that the agency statement fails the test of

general applicability. By analogy, prosecutorial discretion not

to pursue a criminal prosecution does not prove th at the

crim inal statute lacks general applicability.

6/ The definitions in Subsections 11.045 and 11.45 do not

define the term "executive agency" and are limited,

respectively, to Subsections 11.045 and 11.40 through 11.515.

Expanding those statutory de finitions to include the definition

of an executive agency for the purposes of §11.062 interprets

law within the meaning of Subsection 120.52(15).

7/ § 20.02(2), Fla. Stat.

8/ See n. 4, supra .

COPIES FURNISHED:

Honorable Alex Sink

Chief Financial O fficer

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0300

Carlos G. Muñiz, General Counsel

Department of Financial Services

The Capitol, Plaza Level 11

Tallahassee, Florida 32399 - 0307

Scott Boyd, Executive Dire ctor/General Counsel

Joint Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399 - 1300

Peter J. Cannon, Esquire

CCRC - Middle Region

3801 Corporex Park Drive, Suite 210

Tampa, Florida 33619

Richard T. Donelan, Jr., Esquire

De partment of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

Marion Drew Parker, Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee, Florida 32399

Liz Cloud, Program Administrator

Administrative Code

Departm ent of State

R. A. Gray Building, Suite 101

Tallahassee, Florida 32399

NOTICE OF RIGHT TO JUDICIAL REVIEW

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

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Revie w proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original Notice of Appeal with the agency clerk of

the Division of Administrative Hearings and a copy, accompanied

by filing fees prescrib ed by law, with the District Court of

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

the Appellate District where the party resides. The notice of

appeal must be filed within 30 days of renditi on of the order to

be reviewed.