07-001858RU 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: Respondent`s statements were challenged as invalid exercises of delegated legislative authority because they had not been promulgated as a rule; they were not rules since they did not, of their own effect, implement, interpret, or prescribe law or policy.

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 - 185 8 R U

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION , )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Respondent , )

)

a nd )

)

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

WINE AND SPIRITS, )

)

Intervenor . )

)

FINAL ORDER

By agreement of the parties, the case was submitted to

Administrat ive Law Judge 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 Robinson, 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., Esquire

Ralf E. Michels, Esquire

Charles T. Collette, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

For Intervenor: Harold F. X. Purnell, Esquire

Maggie M. Schultz, Esquire

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

Post Office Box 551

Tallahassee, Florida 32302

John F. Bennett, Esquire

Fishback, Dominick, Bennett, Stepter,

Ardaman, Alhers and Bo nus, LLP

1947 Lee Road

Winter Park, Florida 37289

STATEMENT OF THE ISSUE

The issue in this case is whether certain statements by

officials of Respondent Department of Business and Professional

Regulation, Division of Alcoholic Beverages and T obacco (ABT),

constitute an unpromulgated rule that is invalid pursuant to

Subsection 120.54(1)(a), Florida Statutes (2006). 1 /

PRELIMINARY STATEMENT

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

LLC , d/b/a Total Wine and More (TWM), filed a P etition Seeking

an Administrative Determination of the Invalidity of an Agency

Statement Defined as a Rule. In its Petition, TWM alleges that

ABT established a new policy to prohibit in - store servicing of

distilled spirits, an activity that the agency did not

previously prohibit. TWM contends that the new policy is

evidenced by statements made by two ABT officials in two email

messages sent to TWM and others in April 2007. TWM further

contends that ABT ' s new policy meets the definition of a rule

and viol ates Subsection 120.54(1), Florida Statutes, because ABT

has not adopted the policy as a rule.

This case was consolidated with a related case (DOAH Case

No. 07 - 1857RX) initiated by TWM ' s simultaneous filing of a

Petition Seeking an Administrative Determin ation of the

Invalidity of an Existing Rule. The existing rule challenged by

TWM is Florida Administrative Code Rule 61A - 1.010, entitled

" Approved Advertising and Promotional Gifts. " TWM was

subsequently granted leave to amend its petition challenging th e

existing rule to include a challenge of ABT ' s 1997 repeal of

Florida Administrative Code Rule 61A - 4.058, entitled

" Promotional Displays and Advertising. "

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

Wine & Spirits (ABC) , to intervene in th e 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 it 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 transcripts 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 (DBPR). The parties filed Proposed

Final Or ders, which have been 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.

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. Intervenor ABC i s 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 Alleged Unpromulgated Rule

4. Florida has a three - tier ed system of alco holic 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. The te rm " in - store servicing " refers generally to

activities by distributors or manufacturers on the vendor ' s

premises , such as placing stock on shelves, rotating stock, and

affixing prices.

6. On April 4, 2007, Renee Alsobrook emailed a message to

John Harris, a governmental consultant, which included the

following statement:

In researching the coupon rule, I reviewed

prior opinions I had provided and determined

that this opinion provided to you in March,

2006, was wrong. I WAS WRONG. Section

561.424, F.S., c learly excludes in - store

servicing of distilled spirits. Please

communicate the position of ABT to your

wholesalers and Trone.

7. On April 24, 2007, Stephen Hougland emailed the

following message to Mr. Harris:

John, after considerable research and

con sultation, ABT ' s opinion is that FL law

does not permit in - store servicing for

spirits. I ' d be glad to talk to you about

the decision as I am sure you are concerned

about the impact on your clients.

8. These two email messages were cited by TWM in its

P etition as expressions of a new policy that has not been

adopted as a rule and is, therefore, invalid and unenforceable.

In the course of discovery, other written statements by ABT

employees were found that were also made in April 2007, which

TWM contends are expressions of the new policy.

9. In a letter dated April 9, 2007, from Lisa Comingore,

a ssistant g eneral c ounsel for DBPR, to Charles Bailes of ABC,

Ms. Comingore states:

Wholesalers and manufacturers of distilled

spirits are not authorized to provi de in -

store servicing by section 561.424, Florida

Statutes and would be providing aid to

retailers in the form of providing labor for

the retailer. Such aid to the retailer

could constitute a violation of section

561.42, Florida Statutes.

10. In a lett er dated April 30, 2007, from Director

Hougland to Mr. and Mrs. John Schaeffer of Great Spirits

Liquor & Fine Wine, Director Hougland states:

Florida law allows in - store servicing of

beer and malt beverages as well as vinous

beverages, however, in - store se rvicing of

distilled spirits is not authorized . . .

Section 561.424(2), Florida Statutes,

specifically excludes in - store servicing of

distilled spirits.

Wholesalers and manufacturers of distilled

spirits are not authorized to provide in -

store servicing by section 561.424, Florida

Statutes and would be providing aid to

retailers in the form of providing labor for

the retailer. Such aid to the retailer

could constitute a violation of section

561.42, Florida Statutes.

C. The Governing Statutes

11. The 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).

12. 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.

13. ABT contend s that Subsection 561.42(1), Florida

S tatutes, prohibits in - store servicing of alcoholic beverages by

distributors or manufacturers 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 as a form of gift , but TWM

cont ends that subsequent legislation resulted in the removal of

the prohibition.

1 4 . 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

providing in - store servicing of malt

beverages. " In - store servicing " as used

herein means quality control procedures

which include, but ar e not limited to:

rotation of malt beverages on the vendor ' s

shelves, rotation and placing of malt

beverages in vendor ' s coolers, proper

stacking and maintenance of appearance and

display of malt beverages on vendor ' s

shelves, price stamping of malt bever ages on

vendor ' s licensed premises, and moving or

resetting any product or display in order to

display a distributor ' s own product when

authorized by the vendor.

1 5 . In 1977, Subsection 561.424(2), Florida Statutes,

created an exception for in - store ser vicing 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 -

store servicing of wine sold by such

distributor to a vendor. " In - store

servicing " as used herein means: pla cing

the wine on the vendor ' s shelves and

maintaining the appearance and display of

said wine on the vendor ' s shelves in the

vendor ' s licensed premises; placing the wine

not so shelved or displayed in a storage

area designated by the vendor, which is

locat ed in the vendor ' s licensed premises;

rotation of vinous beverages; and price

stamping of vinous beverages in a vendor ' s

licensed premises. This section shall not

apply to distilled spirits . ( E mphasis

added)

1 6 . No similar statute was created to expre ssly authorize

in - store servicing of distilled spirits by distributors.

1 7 . A fter the enactment of Section 561.423 and Subsection

561.424(2), Florida Statutes, there should have been little

doubt that the Tied House Evil l aw was intended by the

Legislatur e to prohibit in - store servicing of alcoholic

beverages and that only by express exception was in - store

servicing of beer and wine by distributors permitted. 2/

1 8 . The only evidence in the record that tends to explain

why distilled spirits w ere treated d ifferently 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 maximi ze freshness and

minimize the chances of consumers purchasing spoiled

merchandise. " Mr. Bailes goes on to state that distilled

spirits are not perishable.

D . Florida Administrative Code Rule 7A - 4.058

19 . The main cause of the current confusion about

in - store servicing of distilled spirits can be traced to a

rule adopted by ABT in 1985. The year before, Subsection

561.42(12), Florida Statutes, was amended to add the

following directive:

The Division shall make reasonable rules

governing promotional disp lays 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.

2 0 . ABT responded by promulgating Flo rida Administrative

Code Rule 7A - 4.058, entitled " Promotional Displays and

Advertising, " effective January 2, 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.

2 1 . Subpart D was entitled " Exceptions " and established

exceptions to the feder al Tied House Evil l aw. It included

exceptions clearly related to promotional displays and

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

" Retailer Advertising Specialties, " " Consumer Advertising

Specialties, " and " Advertising Services. " Howeve r, 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. "

2 2 . 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

pri ce 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 stoc king, rotation, and pricing services are synonymous

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

reference in Florida Administrative Code Rule 7A - 4.058

authorized in - store servicing of distilled spirits by

distributors and manufacturers in Fl orida , in apparent conflict

with the governing statutes.

23. 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, but the

federal regulation authorized in - store servicing by "industry

members," a term that includes manufacturers.

2 4 . Soon after the adoption of Florida Administrative Code

Rule 7A - 5.048, ABT's 1986 compliance guidelines included a

statement that "27 CFR 6.99 and F.S.S. 561.424" authorize

"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 guideli nes contained the same statement. 3/

E. Promotional Displays and Advertising

2 5 . 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 glean ed 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 dea ling

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, cu ps, 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 limitat ion 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 t he 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 industry 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 advertis ing

specialties described in paragraph (c) to

consumers 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 an y 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 m ay sell to

vendors draft equipment and tapping

accessories 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

c ompetitor’s system and are necessary to

dispense the 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 c onnections, clamps, plungers, and tap

markers.

None 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.

2 6 . 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 Florida Administrative Code Rule 7A - 4.058 that

involve d 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 promotiona l

displays and advertising . ABT now acknowledges that the 1985

rule was "non - compliant" with statutory law.

2 7 . 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 and 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 .

2 8 . ABT changed its position sometime after 1995. In

1997, ABT repealed Florida Administrative Code Rule 7A - 4.058

(which had been renumbered 61A - 4.058). Although ABT replaced

that rule with a new rule that regulated promotional displays

and advertising, the new rule did not adopt any federal

regulations by reference and the subject of stocking, rotation,

and pricing services was abandoned , along with some of the other

subjects covered by the federal regulations previously adopted

by refe rence. 4/

29 . ABT ' s repeal of Florida Administrative Code Rule

61A - 4.058 and its adoption of Florida Administrative Code Rule

61A - 1. 0 1 0 in 1977 w as announced in public notice s published in

the Florida Administrative Weekly and through industry

bulletins. Two public hearings were held on Florida

Administrative Code Rule 61A - 1.01 0 , which were attended by

industry representatives. The rule prohibit ed any gift from

distributors or manufacturers to vendors that was not

specifically identified in the rule or sp ecifically authorized

by statute. In - store servicing of distilled spirits is not

listed in the rule and, as discussed above, is not specifically

authorized by statute.

3 0 . In 1998, ABT issued an i ndustry b ulletin to industry

representatives on the specif ic subject of in - store servicing.

The bulletin notes that there is no statutory exception for

in - store servicing of distilled spirits as there is for beer and

wine and state s that " Unauthorized services to a vendor would be

considered a gift of financial assistance, unless the vendor

paid for the services provided to them [sic]. "

3 1 . 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, distr ibutor,

or manufacturer for unauthorized services provided before the

date of the bulletin.

3 2 . After the 1997 repeal of Florida Administrative Code

Rule 61A - 4.058, the main cause of confusion on the subject of

in - store servicing of distilled spirits had been removed .

However, the 1998 bulletin and any other efforts ABT made to

inform and educate the regulated industry about its change of

position were not completely successful. In - store servicing of

distilled spirits by distributors continues to some ex tent

today. 5/

3 3 . ABT does not dispute that the prohibition of in - store

servicing of distilled spirits has general statewide application

and that rulemaking on the subject is not infeasible or

impractical. ABT ' s position is that the prohibition of in - sto re

servicing of distilled spirits does not require a rule because

the prohibition is established by statute.

CONCLUSIONS OF LAW

3 4 . The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding pursuant t o Subsection 120.56(4), Florida Statutes.

3 5 . Subsection 120.56(4), Florida Statutes, provides in

part that any person substantially affected by a rule or a n

agency statement may seek an administrative determination that

the statement violates Subsection 120.54(1)(a), Florida

Statutes. 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 parti cipate as

a party .

3 6 . TWM, as t he petitioner , bears the burden of

establishing by a preponderance of the evidence that the

challenged agency statements meet the definition of a rule as

defined by Subsection 120.52(15), Florida Statutes.

§ 120.56(4)(b), Fla. Stat.; Agrico Chemical Co. v. Dept. of

Environmental Regulation , 365 So. 2d 759, 763 (Fla. 1st DCA

1978) .

3 7 . Subsection 120.52(15), Florida Statutes, defines a

rule as " each agency statement of general applicability that

implements, interprets, or prescribes law or policy or describes

the procedure or practice requirements of an agency. "

3 8 . An agency statement that is the equivalent of a rule

must be adopted according to the rulemaking procedures set forth

in Section 120.54, Florida Statutes. § 120.54(1), Fla. Stat.

39 . Subsection 120.52(8)(a), Florida Statutes, provides

that it is an invalid exercise of delegated legislative

authority for an agency to materially fail to follow applicable

rulemaking procedures or requirements. TWM claims that t he

challenged agency statements are invalid exercises of delegated

legislative authority because they meet the definition of a

rule, but have not been adopted as a rule.

4 0 . However, n ot every agency statement is a rule. An

agency statement is a rule if it " purports in and of itself to

create certain rights and adversely affect others " or serves " by

its own effect to create rights, or to require compliance, or

otherwise to have the direct and consistent effect of law. " See

Jenkins v. State , 855 So. 2d 12 19, 1225 (Fla. 1st DCA 2003);

Balsam v. Dep artment of Health and Rehabilitative Services , 452

So. 2d 976, 977 - 78 (Fla. 1st DCA 1984); State Dep artment . of

Administration, Division of Personnel v. Harvey , 356 So. 2d 323,

325 (Fla. 1st DCA 1977) .

41 . The le gal principle that an agency statement is not a

rule unless, by its own effect, the statement creates rights ,

requires compliance , or otherwise has the effect of law, is

equally applicable to statements that convey an agency's

interpretation of the statute s it administers . A n agency's

interpretation of a statute must be adopted as a rule when the

interpretation adds details that are not otherwise apparent from

a reading of the statute. See Southwest Florida Water

Management District v. Save the Man a tee Cl ub, Inc. , 773 So. 2d

594, 599 (Fla . 1st DCA 2000) ( u se of the term " interpret " in

Subsection 120.52(8), Florida Statutes , suggests that a rule

will be more detailed than the applicable enabling statute ). On

the other hand, a n agency in terpretation that add s nothing to

the statute is not a rule.

4 2 . T he statements made by ABT in April 2007 do not , of

their own effect, establish the prohibition against in - store

servicing of distilled spirits, nor do the statements add

details regarding the prohibition. The statements only convey

the prohibition that is established with reasonable clarity by

the governing statut es , specifically Subsection 561.42(1) ,

Section 561.423 and Subsection 561.424(2), Florida Statutes.

4 3 . Subsection 561.42(12), Florida Statutes, did not

direct 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 or more stringent than the federal regulations on the

same subject. 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, i n fact, in - store servicing is a form of promotional

display or advertising. TWM did not make this demonstration.

44. TWM is correct in asserting that evidence of past

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

interpretation of a statu te 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 5 . 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 mistake s , including its past misinterpretation s o f

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 ).

46. W hen an agency corrects a past misinterpretation of

its governing statutes an d applies a new interpretation that is

consistent with and adds nothing to the statutory law, the

agency can convey the correct interpretation in its agency

statements to the public witho ut the need to first adopt the

statements by rule.

4 7 . TWM failed to meet its burden to prove that the

challenged agency statements constitute a rule required to be

promulgated pursuant to the rulemaking requirements of

Section 120.54, Florida Statutes.

O RDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that the statements of Respondent, Department of

Business and Professional Regulation, Division of Alcoholic

Beverages and Tobacco, set forth as Exhibit A to the Petition ,

do not constitute 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 Administrative Hearings

The DeSoto Build ing

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 day of July , 2007 .

ENDNOTES

1/ Unless otherwise noted, all references to the Florida

Statutes are to the 2006 codification.

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

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

context, ABT was merely acknowledging that no sta tute contains

the words " in - store servicing of distilled spirits is

prohibited. "

3 / No ABT compliance guidelines produced after 1995 were entered

into the record.

4 / TWM has challenged the 1997 repeal in the companion case as

invalid because it claims ABT ' s explanation for the repeal was

misleading in that the explanation suggested that all of the

federal regulations adopted by reference in the Florida rule,

including the authorization for stocking, rotation and pricing

service , was being incorporated i nto the new ABT rule. However,

the undersigned has concluded in the companion case that the

repeal was not invalid.

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

current practice of in - store servicing of distilled spirits.

COPIES FURNISHE D :

William E. Williams, Esquire

Amy W. Schrader, Esquire

Gray 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

1940 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 Business 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

Profession al Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399 - 0792

Scott Boyd, Executive Director

and Gen eral Counsel

Joint Administrative Procedures Committee

120 Holland 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 pro ceedings 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.