07-001857RX Florida Fine Wine And Spirits, Llc, D/B/A Total Wine And More vs. Department Of Business And Professional Regulation Status: Closed DOAH Final Order on Friday, July 20, 2007.

Summary: Petitioner was barred from challenging the 1997 repeal of Florida Administrative Code Rule 61A-4.058 because its challenge was untimely. Petitioner did not prove that Rule 61A-1.010 was an invalid exercise of delegated legislative authority.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA FINE WINE AND SPIRITS, )

LLC, d/b/a TOTAL WINE AND MORE, )

)

Petitioner, )

)

vs. ) Case Nos. 07 - 1857RX

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Respondent, )

)

an d )

)

ABC LIQUORS, INC., d/b/a ABC )

WINE AND SPIRITS, )

)

Intervenor. )

)

FINAL ORDER

By agreement of the parties, the case was submitted to

Administrative Law Judg e Bram D.E. Canter to be decided on the

parties ' Pre - Hearing Stipulation, Joint Exhibits, and Proposed

Final Orders , without a formal evidentiary hearing.

APPEARANCES

For Petitioner: William E. Williams, Esquire

Amy W. Schrader, Esquire

Gray R obinson, P.A.

Post Office Box 11189

Tallahassee, Florida 32302 - 3189

Robert F. Lewis, Esquire

Gray Robinson, P.A.

Post Office Box 2328

Ft. Lauderdale, Florida 33303 - 9998

For Respondent: Joseph M. Helton, Jr., Esqui re

Ralf E. Michels, Esquire

Charles T. "Chip" Collette, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

For Intervenor: Harold F. X. Purnell, Esq uire

Maggie M. Schultz, Esquire

Rutledge, Ecenia, Purnell

& Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302 - 0551

John F. Bennett, Esquire

Fishback, Dominick, Bennett, Stepter,

Ardaman, Alh ers and Bonus, LLP

1947 Lee Road

Winter Park, Florida 37289

STATEMENT OF THE ISSUES

The issues in this case are whether Florida Administrative

Code Rule 61A - 1.010 1/ is an invalid exercise of delegated

legislative authority , and whether the 19 97 repeal of Rule

61A - 4.058 was an invalid exercise of delegated legislative

authority .

PRELIMINARY STATEMENT

On April 25, 2007, Petitioner Florida Fine Wine & Spirits,

LLC d/b/a Total Wine and More (TWM), filed a Petition Seeking an

Administrative Determ ination of the Invalidity of an Existing

Rule to challenge the validity of Rule 61A - 1.010, entitled

" Approved Advertising and Promotional Gifts. " TWM subsequently

amend ed its petition to add a challenge to ABT ' s 1997 repeal of

Rule 61A - 4.058, entitled " Pr omotional Displays and Advertising. "

This case was consolidated with a related case (DOAH Case

No. 07 - 1858RU) initiated by TWM ' s simultaneous filing of a

Petition Seeking an Administrative Determination of the

Invalidity of an Agency Statement Defined as a Rule. In this

Petition, TWM alleges that ABT established a new policy to

prohibit in - store servicing of distilled spirits, as evidenced

by statements made by two ABT officials in email messages sent

to TWM and others in April 2007, and that the new poli cy meets

the definition of a rule and violates Subsection 120.54(1),

Florida Statutes (2006) , 2/ because it was not adopted as a rule.

The unopposed petition of ABC Liquors, Inc. , d/b/a ABC Fine

Wine & Spirits (ABC) , to intervene in the consolidated cases was

granted.

A final hearing was scheduled within 30 days as required by

S ubs ection 120.56 (1)(c) , Florida Statutes, but the hearing was

continued by agreement of the parties. Thereafter, the parties

waived the final hearing in the consolidated cases and agreed to

have the cases decided based on the parties ' Pre - Hearing

Stipulation, Joint Exhibits, and Proposed Final Orders. A

separate Final Order is being issued for each of the cases.

The Parties ' Joint Exhibits 1 through 49 were admitted into

evidence. The Joint Exhibits include the t ranscripts of the

depositions of Steven Hougland, ABT ' s d irector, and Renee

Alsobrook, d eputy g eneral c ounsel of the Department of Business

and Professional Regulation. The parties filed Proposed Final

Orders, which have b een duly considered.

FINDINGS OF FACT

A. The Parties

1. Petitioner TWM is a licensed retail vendor of alcoholic

beverages. It operates nine stores in Florida that sell

alcoholic beverages, including distilled spirits, by the

package. TWM was created i n March 2005.

2. Respondent ABT is the state agency authorized by

Section 561.02, Florida Statutes, to regulate the alcoholic

beverage industry, including manufacturers, distributors and

vendors of alcoholic beverages within the State of Florida.

3. In tervenor ABC is a licensed retail vendor of alcoholic

beverages, holding in excess of 100 licenses authorizing the

sale of alcoholic beverages, including distilled spirits, by the

package.

B. The Governing Statutes

4. Florida has a three - tiered system of alcoholic beverage

distribution. Manufacturers produce the product and sell to

distributors, distributors sell the product at wholesale to

licensed vendors, and vendors sell the product to the general

public at retail. § 561.14(1) - (3), Fla. Stat.

5. Th e federal government and many states, including

Florida, enacted " Tied House Evil " laws to prevent the " evils "

that arose from relationships between vendors of alcoholic

beverages and manufacturers and distributors which caused the

vendors to be controlled by or " tied " to the distributors and

manufacturers. Winn Dixie Stores, Inc., v. Schenck Co. , 662

So. 2d 1021, 1023 (Fla. 5th DCA 1995); Musleh v. Fulton

Distributing Co. of Florida , 254 So. 2d 815, 817 (Fla. 1st DCA

1971).

6. Florida ' s Tied House Evil l aw, set forth in Subsection

561.42(1), Florida Statutes, provides:

No licensed manufacturer or distributor of

any of the beverages herein referred to

shall have any financial interest, directly

or indirectly, in the establishment or

business of any vendor licensed under the

beverage laws; nor shall such licensed

manufacturer or distributor assist any

vendor by any gifts or loans of money or

property of any description or by the giving

of any rebates of any kind whatsoever. No

licensed vendor shall accept, directly or

indirectly, any gift or loan of money or

property of any description or any rebates

from any such licensed manufacturer or

distributor; provided, however, that this

does not apply to any bottles, barrels, or

other containers necessary for the

l egitimate transportation of such beverages

or to advertising materials and does not

apply to the extension of credit, for

liquors sold, made strictly in compliance

with the provisions of this section.

7. " In - store servicing " of alcoholic beverages refers

generally to distributors or manufacturers placing stock on

shelves, rotating stock, and affixing prices on the vendor ' s

premises. ABT interprets Subsection 561.42(1), Florida

Statutes, as prohibiting in - store servicing of alcoholic

beverages because it constitutes a gift of " free labor " to the

vendor. TWM does not dispute ABT ' s interpretation of Subsection

561.42(1), Florida Statutes, as prohibiting in - store servicing ,

but TWM contends that subsequent legislation resulted in the

removal of the prohibiti on.

8. In 1975, Section 561.423, Florida Statutes, created an

exception for in - store servicing of beer and malt beverages:

Nothing in s. 561.42 or any other provision

of the Beverage Law shall prohibit a

distributor of beer or malt beverages from

providin g in - store servicing of malt

beverages. " In - store servicing " as used

herein means quality control procedures

which include, but are not limited to:

rotation of malt beverages on the vendor ' s

shelves, rotation and placing of malt

beverages in vendor ' s coo lers, proper

stacking and maintenance of appearance and

display of malt beverages on vendor ' s

shelves, price stamping of malt beverages on

vendor ' s licensed premises, and moving or

resetting any product or display in order to

display a distributor ' s own pr oduct when

authorized by the vendor.

9 . In 1977, Subsection 561.424(2), Florida Statutes,

created an exception for in - store servicing of wine:

Nothing in s. 561.42 or any other provision

of the Alcoholic Beverage Law shall prohibit

a distributor of wine from providing

in - s tore servicing of wine sold by such

distributor to a vendor. " In - store

servicing " as used herein means: placing

the wine on the vendor ' s shelves and

maintaining the appearance and display of

said wine on the vendor ' s shelves in the

ve ndor ' s licensed premises; placing the wine

not so shelved or displayed in a storage

area designated by the vendor, which is

located in the vendor ' s licensed premises;

rotation of vinous beverages; and price

stamping of vinous beverages in a vendor ' s

licens ed premises. This section shall not

apply to distilled spirits . ( E mphasis

added)

10. No similar statute was created to expressly authorize

in - store servicing of distilled spirits by distributors.

1 1 . The Legislature ' s creation of express exception s for

in - store servicing of beer and wine and the use of the wording,

" This section shall not apply to distilled spirits, " in

Subsection 561.424(2), Florida Statutes, indicate a legislative

intent to treat distilled spirits differently and to prohibit

in - store servicing of distilled spirits. 3/

1 2 . The only evidence in the record that tends to explain

why distilled spirits w ere treated differently from beer and

wine with regard to in - store servicing is a statement made by

Charles Bailes of ABC in a letter to Ms . Alsobrook that,

" Historically, in - store servicing of perishable products such as

wine and beer have been allowed so as to maximize freshness and

minimize the chances of consumers purchasing spoiled

merchandise. " Mr. Bailes goes on to state that distille d

spirits are not perishable.

C. Rule 7A - 4.058

1 3 . In 1984, Subsection 561.42(12), Florida Statutes, was

amended to add the following:

The D ivision shall make reasonable rules

governing promotional displays and

advertising which rules shall not conflict

with or be more stringent than the federal

regulations pertaining to such promotional

displays and advertising furnished vendors

by distributors and manufacturers.

1 4 . ABT responded to the 1984 directive in Subsection

561.42(12), Florida Statutes, by pr omulgating Rule 7A - 4.058,

entitled " Promotional Displays and Advertising, " which became

effective in January 1985. The rule adopted certain federal

regulations by reference:

(1) The Division adopts by reference the

provisions of subpart D, Chapter 6, of Title

27, Code of Federal Regulations, regulations

6.81 through 6.101 inclusive.

(2) It shall be a violation of Section

561.42, F.S., for any vendor to accept or

for any manufacturer or distributor to give

a retailer promotional displays, advertising

or other such items, services or assistance

governed by the regulations adopted by

subsection (1) when given in a manner not in

strict conformity with the adopted

regulations.

1 5 . Subpart D was entitled " Exceptions " and established

exceptions to the federa l Tied House Evil l aw. It included

exceptions that clearly relate d to promotional displays and

advertising, such as " Product Displays, " " Inside Signs, "

" Retailer Advertising Specialties, " " Consumer Advertising

Specialties, " and " Advertising Services. " Ho wever, Subpart D

also included exceptions on subjects that did not appear to

involve promotional displays or advertising, such as

" Educational Seminars " (for the employees of vendors),

" Participation in Retailer Association Activities, " " Joint

Ventures, " " Coil Cleaning Service, " and " Stocking, Rotation and

Pricing Services. "

1 6 . Section 6.99 of the federal regulations, entitled

" Stocking, Rotation and Pricing Services, " provided:

Industry members may, at a retail

establishment, stock, rotate and affix the

price to distilled spirits, wine, or malt

beverages which they sell, provided products

of other industry members are not altered or

disturbed. The rearranging or resetting of

all or part of a store or liquor department

is not hereby authorized.

Because s tocking, rotation, and pricing services are synonymous

with in - store servicing, ABT ' s adoption of Section 6.99 by

reference in Rule 7A - 4.058, authorized in - store servicing of

distilled spirits by distributors and manufacturers in Florida ,

in apparent confl ict with the governing statutes.

1 7 . The adoption by reference of Section 6.99 also

conflicted with Section 561.423 and Subsection 561.424(2),

Florida Statutes, because these statutes only authorized

in - store servicing of beer and wine by distributors, bu t the

federal regulation authorized in - store servicing by " industry

members, " a term that includes manufacturers.

1 8 . Soon after the adoption of Rule 7A - 5.048, ABT ' s 1986

compliance guidelines included a statement that " 27 CFR 6.99 and

F.S.S. 561.424 " aut horize " manufacturers or distributors of

distilled spirits or wine to stock, rotate and affix the price

to their products at a licensed retailer ' s premises. " ABT ' s

1988, 1993, and 1995 compliance guidelines contained the same

statement. 4/

E. Promotional Displays and Advertising

1 9 . The term " promotional displays and advertising " is not

defined in Chapter 561, Florida Statutes, but insight into the

Legislature ' s intended meaning for the term can be gleaned from

the 1985 amendment of Subsection 561.42(12), Florida Statutes.

Following the sentence that directs ABT to adopt rules regarding

promotional displays and advertising, the 1985 amendment added

" provided, however, " followed by eight new paragraphs dealing

with specific situations involving promotional displays and

advertising: "

(a) If a manufacturer or distributor of

malt beverage provides a vendor with

expendable retailer advertising specialties

such as trays, coasters, mats, menu cards,

napkins, cups, glasses, thermometers, and

the like, such items shall be sold at a

price not less than the actual cost to the

industry member who initially purchased

them, without limitation in total dollar

value of such items sold to a vendor.

(b) Without limitation in total dollar

value of such items provided to a vendor, a

manufacturer or distributor of malt beverage

may rent, loan without charge for an

indefinite duration, or sell durable

retailer advertising specialties such as

clocks, pool table lights, and the like,

which bear advertising matter.

(c) If a manufacturer or distributor of

malt beverage provides a vendor with

consumer advertising specialties such as

ashtrays, T - shirts, bottle openers, shopping

bags, and the like, such items shall be sold

at a price not less than the actual cost to

the industr y member who initially purchased

them, but may be sold without limitation in

total value of such items sold to a vendor.

(d) A manufacturer or distributor of malt

beverage may provide consumer advertising

specialties described in paragraph (c) to

consu mers on any vendor ' s licensed premises.

(e) Coupons redeemable by vendors shall

not be furnished by distributors of beer to

consumers.

(f) Manufacturers or distributors of beer

shall not conduct any sampling activities

that include tasting of their product at a

vendor ' s premises licensed for off - premises

sales only.

(g) Manufacturers and distributors of

beer shall not engage in cooperative

advertising with vendors.

(h) Distributors of beer may sell to

vendors draft equipment and tapping

acce ssories at a price not less than the

cost to the industry member who initially

purchased them, except there is no required

charge, and a distributor may exchange any

parts which are not compatible with a

competitor ' s system and are necessary to

dispense th e distributor ' s brands. A

distributor of beer may furnish to a vendor

at no charge replacement parts of nominal

intrinsic value, including, but not limited

to, washers, gaskets, tail pieces, hoses,

hose connections, clamps, plungers, and tap

markers.

Non e of the examples in the statute suggest that in - store

servicing of alcoholic beverages comes within the Legislature ' s

intended meaning of promotional displays and advertising.

20 . The common meanings of the words " stocking, "

" rotation, " and " pricing " do not match up with the common

meanings of the words " promotional displays " and " advertising. "

As noted above, there were other federal exceptions adopted by

reference in Rule 7A - 4.058 that involved neither promotional

displays nor advertising. ABT offered no explanation for the

agency ' s indiscriminate adoption by reference of all the federal

regulations in Subpart D, including those regulations that were

not related to promotional displays and advertising . A BT now

acknowledges that the 1985 rule was " non - c ompliant " with

statutory law.

2 1 . TWM presented no evidence to show that stocking,

rotation, and pricing are, as a matter of fact, forms of

promotional displays or advertising. Instead, TWM argues that

ABT ' s 1985 adoption by reference of Section 6.99 an d ABT ' s

subsequent representations that in - store servicing of distilled

spirits was authorized in Florida, " determined " and " defined "

in - store servicing as a promotional display or advertising.

22. The evidence shows that from 1985 to 1995 , ABT's

actions were consistent with the agency's interpretation of the

term " promotional displays and advertising " as including in -

store servicing. However, ABT changed its position sometime

after 1995. In 1997, ABT repealed Rule 7A - 4.058 (which had been

renumbered Ru le 61A - 4.058) . In the same year, ABT adopted Rule

61A - 1.010 , which did not adopt any federal regulations by

reference and abandoned the subject of stocking, rotation, and

pricing services, along with some of the other subjects covered

by the federal regul ations previously adopted by reference. In

1998, ABT issued an industry bulletin to industry

representatives on the specific subject of in - store servicing,

in which ABT explained that in - store servicing of distilled

spirits was not authorized.

2 3 . TWM al leg es that ABT admit ted there have been no

change s in relevant law or policy since 1995 , but the evidence

cited by TWM shows no such admissions. The repeal of Rule

61A - 4.058, the adoption of Rule 61A - 1.010, and the 1998 industry

bulletin are obvious chang es in relevant law and policy. The

governing statutes did not change, but their interpretation by

ABT changed.

F. The Repeal of R ule 61A - 4.058 (formerly Rule 7A - 4.058)

2 4 . TWM claim s that the repeal of Rule 61A - 4.058 was

invalid because ABT misrepresen ted the effect of the repeal in a

document it file d with the Joint Administrative Procedures

Committee (JAPC) in conjunction with the repeal. TWM has made

no claim that the repeal of Rule 61A - 4.058 violated any other

applicable procedural requirement in S ection 120.54, Florida

Statutes.

2 5 . The alleged misrepresentation was the following

statement :

Rule 61A - 4.058, FAC, concerning promotional

displays and advertising of alcoholic

beverages, has been incorporated into the

proposed amendment of Rule 61A - 1.01 0, FAC

(to be proposed simultaneously with this

recommended repeal).

2 6 . TWM claims this statement by ABT was a

misrepresentation because ABT did not incorporate all of Rule

61A - 4.058 into Rule 61A - 1.010. The new rule did not incorporate

Section 6.99 o f the federal regulations pertaining to stocking,

rotation, and pricing services, which was adopted by reference

in the old rule. ABT contends that the statement was not a

misrepresentation because it accurately informs JAPC that Rule

61A - 1.010 incorporat e s that part of Rule 61A - 4.058 dealing with

promotional displays and advertising, and Section 6.99 did not

pertain to promotional displays and advertising.

2 7 . Subsection 120.536(2), Florida Statutes (1996) ,

required each state agency to submit a report t o the Department

of State by October 1, 1997, identifying each rule adopted

before October 1, 1996 , that exceeded the agency ' s rulemaking

authority. ABT did not identify Rule 61A - 4.058 in the report it

filed pursuant to this statute. TWM asserts that bec ause ABT

did not identify Rule 61A - 4.058 in the report, ABT must have

considered Rule 61A - 4.058 in its entirety to be compliant with

the governing statutes in 1997 . ABT responds by noting that

R ule 61A - 4.058 was repealed before the report was filed, and

t here was no need for the report to mention a rule that no

longer existed. The evidence on this point is ambiguous and

in sufficient to show ABT ' s inten t when it repealed Rule

61A - 4.058 in 1997.

2 8 . Because the author of the subject statement was not

depos ed, the parties ' arguments about the statement ' s intended

meaning are matters of speculation. ABT ' s interpretation of the

statement is supported by the undisputed fact that the new rule

did not incorporate all of the federal regulations formerly

adopted b y reference. However, the statement did not fully

describe the effect of the repeal of Rule 61A - 4.058 because the

statement d id not identify the federal regulations previously

adopted by reference that were not being incorporated into the

new rule.

G. Ru le 61A - 1.010

2 9 . Rule 61A - 1. 0 1 0 was a dopted in 1997 after two public

hearings attended by industry representatives. TWM has made no

claim that the required rulemaking procedures were not followed

in the adoption of the rule.

30 . The rule states in relev ant part:

61A - 1.010 Approved Advertising and

Promotional Gifts

(1) The division hereby adopts the

" Approved Advertising and Promotional Gifts

Chart, " herein incorporated by reference and

effective 6/5/97. This chart, produced by

the division, provides f or the description,

special conditions, and restrictions on

items which shall not be considered unlawful

gifts, loans of money or property, or

rebates for purposes of Section 561.42, F.S.

This chart is available from the Division of

Alcoholic Beverages an d Tobacco, 1940 North

Monroe Street, Tallahassee, FL 32399 - 1020.

(2) Any other gifts, loans of money or

property, or rebates not included in the

" Approved Advertising and Promotional Gifts

Chart " , or specifically authorized by

Florida Statutes, shall not be provided to a

vendor.

The rule cites S ection 561.11, Florida Statutes , as the specific

authority for the rule . The rule cites Sections 561.08 and

561.42, Florida Statutes , as the law being implemented .

31 . There is no dispute that in - store servicing of

distilled spirits is not listed on the chart that Rule 61A - 1.010

incorporates by reference. TWM refers to the rule as a " de

facto " prohibition of in - store servicing of distilled spirits

and claims the rule is invalid because it conflicts with

Subsecti on 561.42(12), Florida Statutes, which TWM contends

authorizes in - store servicing of distilled spirits.

H. The 1998 Industry Bulletin

3 2 . In 1998, ABT issued Industry Bulletin 98 - 04 to

industry representatives on the specific subject of in - store

servicin g. The 1998 bulletin points out that there is no

statutory exception for in - store servicing of distilled spirits

as there is for beer and wine. The bulletin states

" Unauthorized services to a vendor would be considered a gift of

financial assistance, unl ess the vendor paid for the services

provided to them [sic]. "

3 3 . The 1998 bulletin concludes by stating that because of

the " confusion about these in - store servicing provisions, " no

enforcement action would be taken against a vendor, distributor,

or manu facturer for unauthorized services provided before the

date of the bulletin.

3 4 . However, the 1998 bulletin and any other efforts made

by ABT to inform and educate the regulated industry about its

change of position were not completely successful. In - sto re

servicing of distilled spirits by distributors continues to some

extent today. 5/

CONCLUSIONS OF LAW

3 5 . The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding pursuant to Section 120.56, Florida Statutes.

3 6 . Subsections 120.56(2) and (3), Florida Statutes,

respectively, provide that any person substantially affected by

a proposed rule or an existing agency rule may seek an

administrative determination of the invalidity of the rule.

Standing was not a disputed issue in this case , and the parties '

factual stipulations in the Joint Pre - hearing Stipulation are

sufficient to establish TWM ' s standing to initiate these

proceedings and ABC ' s standing to participate as a party.

3 7 . T he agency has the bu rden to prove by a preponderance

of the evidence that its proposed rule is not an invalid

exercise of delegated legislative authority . § 120.56(2)(a),

Fla. Stat. The petitioner has the burden to prove by

preponderance of the evidence that an existing rul e is an

invalid exercise of delegated legislative authority.

§ 120.56(3)(a), Fla. Stat.

3 8 . Subsection 120.52(8), Florida Statutes, defines

" invalid exercise of delegated legislative authority " to include

the following relevant circumstances:

(a) The a gency has materially failed to

follow the applicable rulemaking procedures

or requirements set forth in this chapter;

(b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by s. 120.54 (3)(a)1.;

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required

by s. 120.54 (3)(a)1.

The Repeal of Rule 61A - 4.058

3 9 . Subsection 120.52(16), Florida Statutes, defines the

term " rule " to include the repeal of a rule. A n agency ' s repeal

of a rule constitutes rulemaking and must be accomplished in

accordance with the rulemaking requirements applicable to

proposed rules in S ubs ection 120.54 (2) , Florida Statutes , if the

effect of the repeal is to implement, interpret, or prescribe

law or policy . Federation of Mobile Home Owners of Fla., Inc.

v. Fla. Manuf. Housing Ass ' n, Inc. , 683 So. 2d 586, 5 9 1 (Fla.

1st DCA 1996) .

40 . The logical corollary to the principle that the repeal

of a rule is a rule, is that a person who challenges the repeal

of a rule is subject to the same requirements as a person who

challenges a proposed rule. One such requirement is that the

challenge must be filed within 21 days after the date of

publication of the notice of the repeal in the Florida

Administrati ve Weekly . § 120.56(2), Fla. Stat. TWM ' s challenge

of ABT ' s repeal of Rule 61A - 4.058 was filed ten years after the

publication of the notice and is, therefore, barred .

41 . Even if TWM ' s challenge of the repeal of Rule

61A - 4.058 w as timely, it is conclud ed that the alleged

misrepresentation in the rulemaking documents filed with JAPC

d oes not constitute a material failure of ABT to follow the

rulemaking requirements of Section 120.54, Florida Statutes. It

was not material because (1) the contemporaneous rulemaking

proceedings for Rule 61A - 1.010 served to inform interested

persons of the effect of the repeal of R u le 61A - 4.058 , and (2)

TWM did not exist at the time the alleged misrepresentation was

made, so TWM was not misled by the statement.

4 2 . TWM also contends that the repeal of Rule 61A - 4.058

was invalid because ABT did not cite a statute that directed ABT

to repeal the incorporation by reference of federal regulations

on promotional displays and advertising. This basis for

invalidating the re peal wa s not identified in TWM ' s Petition or

in the parties ' Joint Pre - Hearing Stipulation. It is improper

for TWM to raise the issue for the first time in its Proposed

Final Order.

4 3 . ABT pr ove d that t he 1997 repeal of Rule 61A - 4.058 was

not an invalid exer cise of delegated legislative authority.

The Challenge to Rule 61A - 1.010.

4 4 . TWM ' s claim that Rule 61A - 1.010 is an invalid exercise

of legislative authority depends on TWM 's argument that th e rule

conflicts with Rule 61A - 4.058 ( which TWM argues is still in

effect because its repeal in 1 997 was invalid) , or with

Subsection 561.42(12 ) , Florida Statutes, because , according to

TWM, the statute authorize s in - store servicing of distilled

spirits.

4 5 . It was concluded above that the repeal of Rule

61A - 4.058 w as not invalid. It is also concluded that ABT's

interpretation of Subsection 561.42(12 ) , Florida Statutes, as

not authoriz ing in - store servicing of distilled spirits , is a

reasonable interpretation .

4 6 . Subsection 561.42(12), Florida Statutes, did not

di rect ABT to adopt all the federal exceptions to the federal

Tied House Evil l aw. It only directed ABT to adopt rules

governing promotional displays and advertising that were not in

conflict with or more stringent than the federal regulations on

the same s ubject. ABT asserts that in - store servicing is not

encompassed by the term " promotion al displays and advertising "

in Subsection 561.42(12), Florida Statutes. As the party with

the burden of proof, TWM was required to demonstrate that ABT is

wrong and in - store servicing is , in fact, a form of promotional

display or advertising. TWM did not make this demonstration.

4 7 . TWM is correct in asserting that evidence of past

agency action that does not conform with the agency ' s current

interpretation of a statut e, or evidence that an agency

communicated a different interpretation of a statute in the

past, is important and merits careful consideration. The

historical evidence was carefully considered by the undersigned

to determine whether the governing statutes are ambiguous. It

is concluded that the governing statutes are not ambiguous. It

is ABT ' s 1985 adoption by reference of federal regulations not

related to promotional displays and advertising that is

difficult to understand, not ABT ' s subsequent and curr ent

interpretation of the governing statutes as prohibiting in - store

servicing of distilled spirits.

4 8 . TWM ' s argument that ABT ' s past actions control the

statutory meaning of the term " promotional displays and

advertising " is, in essence, an argument th at because ABT called

the Legislature ' s apple an orange, it became an orange, and it

can never be treated as an apple again. However, an agency can

correct its mistakes, including its past misinterpretations of

statutory law. An agency has the right to c hange its mind for

any reason, so long as its decision comports with Chapter 120,

Florida Statutes. Agency for Health Care Administration v.

Florida Coalition of Professional Laboratory Organizations , 718

So. 2d 869, 872 (Fla. 1 st DCA 1998).

4 9 . Each ag ency rule must be accompanied by " a reference

to the specific rulemaking authority pursuant to which the rule

is adopted and a reference to the section or subsection of the

Florida Statutes or the Laws of Florida being implemented,

interpreted, or made spe cific. " § 120.54(3)(a)1. Fla. Stat.

TWM contends that Rule 61A - 1.010 does not comply with this

requirement because the rule c ites no authority for its omission

of in - store servicing as an authorized activity. However,

Subsection 561.42, Florida Statutes , is cited as the law being

implemented by the rule and, as explained above, that statute is

sufficient authority for the rule's omission of in - store

servicing as an approved activity.

50 . T WM failed to prove that Rule 61A - 1.010 is an invalid

exercise of delegated legislative authority.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that :

1. The 1997 repeal of Florida Administrative Code Rule

61A - 4.058 was not an invalid exercise of delegated legislative

authority ; a nd

2. Florida Administrative Code Rule 61A - 1.010 is not an

invalid exercise of delegated legislative authority.

DONE AND ORDERED this 20th day of July , 2007 , in

Tallahassee, Leon County, Florida.

S

BRAM D. E. CANTER

Administrative Law Judge

Division of A dministrative 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 20th da y of July , 2007 .

ENDNOTES

1/ All references to " Rule " in this Final Order are to rules

published in the Florida Administrative Code.

2 / Unless otherwise noted, all references to the Florida

Statutes are to the 2006 codification.

3 / TWM asserts that ABT " admits " that there is no statute which

prohibits in - store servicing of distilled spirits, but, in

context, ABT was merely acknowledging that no statute contains

the words " in - store servicing of distilled spirits is

prohibited. "

4/ N o compliance gui delines produced after 1995 were offered

into evidence .

5 / No evidence was presented to quantify the extent of the

current practice of in - store servicing of distilled spirits.

COPIES FURNISHED :

William E. Williams, Esquire

Amy W. Schrader, Esquire

Gra y Robinson, P.A.

Post Office Box 11189

Tallahassee, Florida 32302 - 3189

Robert F. Lewis, Esquire

Gray Robinson, P.A.

Post Office Box 2328

Fort Lauderdale, Florida 3330 3 - 9998

Ralf E. Michels , Esquire

Department of Business

and Professional Regulation

1 940 North Monroe Street

Tallahassee, Florida 32399 - 0750

Joseph M. Helton, Jr., Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Charles T. " Chip " Collette, Esquire

Department of Busin ess and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Harold F. X. Purnell, Esquire

Maggie M. Schultz, Esquire

Rutledge, Ecenia, Purnell

& Hoffman, P.A.

Post Office Box 551

Tallahassee, Florida 32302 - 0551

John F. Bennett, Esquire

Fishback, Dominick, Bennett, Stepter,

Ardaman, Alhers and Bonus, LLP

1947 Lee Road

Winter Park, Florida 32789

Holly Benson, Secretary

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 3 2399 - 0792

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Scott Boyd, Executive Director

and General Counsel

Joint Administrative Procedures Committee

120 Hol land Building

Tallahassee, Florida 32399 - 1300

Liz Cloud, Program Administrator

Bureau of Administrative Code

Department of State

R.A. Gray Building, Suite 101

Tallahassee, Florida 32399 - 0250

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 the party resides. The notice of

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

be reviewed.