08-000212RU Amy Cat, Inc., D/B/A Cypress Manor And Abkey, Ltd., D/B/A Fuddruckers vs. Department Of Business And Professional Regulation
 Status: Closed
DOAH Final Order on Wednesday, April 30, 2008.


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Summary: Respondent`s "new policy" of treating SR licenses that have not remained in "continuous operation" as invalid and nonrenewable is a "rule" that violates Section 120.54(1)(a), Florida Statutes; prospective injunctive relief and attorney`s fees awarded.

1STATE OF FLORIDA

4DIVISION OF ADMINISTRATIVE HEARINGS

8AMY CAT, INC., d/b/a CYPRESS )

14MANOR, and ABKEY, LTD, )

19d/b/a FUDDRUCKERS RESTAURANT, )

23)

24Petitioners, )

26)

27vs. ) Case No. 08-0212RU

32)

33DEPARTMENT OF BUSINESS AND )

38PROFESSIONAL REGULATION, )

41DIVISION OF ALCOHOLIC BEVERAGES )

46AND TOBACCO, )

49)

50Respondent. )

52__________________________________)

53FINAL ORDER

55Pursuant to notice, an evidentiary hearing was conducted in

64this case pursuant to Section 120.56, Florida Statutes, 1 before

74Stuart M. Lerner, a duly-designated administrative law judge of

83the Division of Administrative Hearings (DOAH), on January 25,

922008, in Tallahassee, Florida.

96APPEARANCES

97For Petitioners: Harold F. X. Purnell, Esquire

104Rutledge, Ecenia, Purnell

107and Hoffman, P.A.

110Post Office Box 551

114Tallahassee, Florida 32302-0551

117For Respondent: Michael J. Wheeler, Esquire

123Department of Business and

127Professional Regulation

129Northwood Centre, Suite 40

133Tallahassee, Florida 32399-2202

136STATEMENT OF THE ISSUE

140Whether Respondent's pronouncement that special restaurant

146licenses issued prior to January 1, 1958, that have not remained

157in "continuous operation" are thereby (as a result of their lack

168of "continuous operation") rendered invalid pursuant to Section

177561.20(5), Florida Statutes, and therefore not subject to

185delinquent renewal pursuant to Section 561.27, Florida Statutes

193(Challenged Statement) is a rule that violates Section

201120.54(1)(a), Florida Statutes, as alleged by Petitioners.

208PRELIMINARY STATEMENT

210On January 10, 2008, Abkey, Ltd., d/b/a Fuddruckers (Abkey)

219and Amy Cat, Inc. d/b/a Cypress Manor (Amy Cat) filed a petition

231with DOAH pursuant to Section 120.56(4), Florida Statutes,

239seeking an administrative determination that the Challenged

246Statement violates Section 120.54(1)(a), Florida Statutes, and

253further seeking an award of attorney's fees pursuant to Section

263120.595(4), Florida Statutes. The matter was docketed as DOAH

272Case No. 08-0212RU. On January 14, 2008, Abkey and Amy Cat

283(hereinafter referred to collectively as "Petitioners") filed a

292motion requesting that DOAH Case No. 08-0212RU be consolidated

301with three other cases that had previously been consolidated:

310DOAH Case Nos. 07-2508 (involving the proposed denial of Abkey's

320application for delinquent renewal of its SR license); 07-4602

329(involving the proposed denial of an application for delinquent

338renewal of the SR license of Nick Maneros, II, Inc., d/b/a

349Maneros of Hallandale); and 07-4692 (involving the proposed

357denial of Amy Cat's application for delinquent renewal of its SR

368license). On January 16, 2008, the Department of Business and

378Professional Regulation, Division of Alcoholic Beverages and

385Tobacco (DABT) filed a response to the motion, in which it

396stated the following:

399For the purpose of judicial economy and

406being that the parties and issues are

413similar, the Respondent defers to the

419discretion of the Court regarding [the]

425pending motion [to consolidate].

429On January 18, 2008, the undersigned issued an order, which

439provided as follows:

4421. DOAH Case No. 07-0212RU is consolidated,

449for purposes of hearing, with DOAH Case Nos.

45707-2508, 07-4602, and 07-4692 pursuant to

463Florida Administrative Code 28-106.108.

4672. The hearing in these four consolidated

474cases will be held on January 25, 2008, as

483more specifically described in the Notice of

490Hearing issued in DOAH Case Nos. 07-2508,

49707-4602, and 07-4692 on December 5, 2007.

504As noted above, the final hearing in DOAH Case Nos.

51407-2508, 07-4602, 07-4692, and 08-0212RU was held on January 25,

5242008, as scheduled. One witness, Eileen Klinger, the chief of

534DABT's Bureau of Licensing, testified at the hearing. In

543addition to Ms. Klinger's testimony, 20 exhibits (Petitioners'

551Exhibits 1 through 19, and Respondent's Exhibit 1) were offered

561and received into evidence.

565The deadline for the filing of proposed final orders in DOAH

576Case No. 07-0212RU was set at 15 days from the date of the filing

590with DOAH of the hearing transcript.

596The hearing Transcript (consisting of one volume) was filed

605with DOAH on February 8, 2008.

611On February 22, 2008, Petitioners filed an unopposed motion

620requesting an extension of the deadline for the filing of

630proposed final orders. By order issued February 25, 2008, the

640motion was granted, and the parties were given until March 14,

6512008, to file their proposed final orders.

658The parties timely filed their proposed final orders on

667March 14, 2008. They also, on that same date, filed a post-

679hearing stipulation, agreeing that "Petitioners' SR licenses in

687the above cases are per general law and not pursuant to any

699special or local act."

703The parties were subsequently given the opportunity to

711present oral argument in support of their respective positions

720in this case. Such argument was presented by telephone

729conference call on April 14, 2008.

735The parties were also given the opportunity to file post-

745oral argument supplements to their Proposed Final Orders,

753provided they did so no later than April 29, 2008. To date no

766such supplements have been filed.

771FINDINGS OF FACT

774Based on the evidence adduced at hearing, and the record as

785a whole, the following findings of fact are made:

7941. There are various types of DABT-issued licenses

802authorizing the retail sale of alcoholic beverages. Among them

811are quota licenses, SRX licenses, and SR licenses. All three of

822these licenses allow the licensee to sell liquor, as well as

833beer and wine.

8362. Quota licenses, as their name suggests, are limited in

846number. The number of quota licenses available in each county

856is based upon that county's population.

8623. SRX and SR licenses are "special" licenses authorizing

871the retail sale of beer, wine, and liquor by restaurants. There

882are no restrictions on the number of these "special" licenses

892that may be in effect (countywide or statewide) at any one time.

9044. SRX licenses are "special restaurant" licenses that

912were originally issued in or after 1958. 2

9205. SR licenses are "special restaurant" licenses that were

929originally issued prior to 1958.

9346. For restaurants originally licensed after April 18,

9421972, at least 51 percent of the licensed restaurant's total

952gross revenues must be from the retail sale of food and non-

964alcoholic beverages. 3

9677. Restaurants for which an SR license has been obtained,

977on the other hand, do not have to derive any set percentage or

990amount of their total gross revenues from the retail sale of

1001food and non-alcoholic beverages.

10058. DABT-issued alcoholic beverage licenses are subject to

1013annual renewal. 4

10169. License holders who have not timely renewed their

1025licenses, but wish to remain licensed, may file an Application

1035for Delinquent Renewal (on DABT Form 6015).

104210. Until recently, it was DABT's longstanding policy and

1051practice to routinely grant applications for the delinquent

1059renewal of SR and other alcoholic beverage licenses, regardless

1068of the reason for the delinquency.

107411. DABT still routinely grants applications to

1081delinquently renew alcoholic beverage licenses other than SR

1089licenses, but it now has a "new policy" in place with respect to

1102applications for the delinquent renewal of SR licenses. The

"1111new policy" is to deny all such applications based upon these

1122SR licenses' not having been in "continuous operation," action

1131that, according to DABT, is dictated by operation of Section

1141561.20(5), Florida Statutes, a statutory provision DABT now

1149claims it had previously misinterpreted when it was routinely

1158granting these applications.

116112. Relying on Section 561.20(5), Florida Statutes, to

1169blanketly deny all applications for the delinquent renewal of SR

1179licenses was the idea of Eileen Klinger, the head of DABT's

1190Bureau of Licensing. She directed her licensing staff to

1199implement the "new policy" after being told by agency attorneys

1209that this "was the appropriate thing [from a legal perspective]

1219to do."

122113. As applicants applying to delinquently renew their SR

1230licenses (which were both originally issued in 1956),

1238Petitioners are substantially affected by DABT's "new policy"

1246that SR licenses cannot be delinquently renewed because they

1255have not been in "continuous operation," as that term is used in

1267Section 561.20(5), Florida Statutes. Their applications for the

1275delinquent renewal of their licenses would have been approved

1284had the status quo been maintained and this "new policy" not

1295been implemented.

129714. Abkey filed its application (on DABT Form 6015) for

1307the delinquent renewal of its SR license (which had been due for

1319renewal on March 31, 2005) on February 21, 2007. On the

1330application form, Abkey gave the following "explanation for not

1339having renewed during the renewal period": "Building was sold.

1349Lost our lease."

135215. On April 2, 2007, DABT issued a Notice of Intent to

1364Deny Abkey's application. DABT's notice gave the following

1372reason for its intended action:

1377The request for delinquent renewal of this

1384license is denied. Florida Statute

1389561.20(5) exempted restaurant licenses

1393issued prior to January 1, 1958 from

1400operating under the provisions in 561.20(4)

1406as long as the place of business was in

1415continuous operation. This business failed

1420to renew its license on or before March 31,

14292005, therefore it did not comply with the

1437requirements and is no longer valid.

144316. Amy Cat filed its application (on DABT Form 6015) for

1454the delinquent renewal of its SR license (which had been due for

1466renewal on March 31, 1999) on December 6, 2006. On the

1477application form, Amy Cat gave the following "explanation for

1486not having renewed during the renewal period": "Building was

1496closed."

149717. On June 8, 2007, DABT issued a Notice of Intent to

1509Deny Amy Cat's application. DABT's notice gave the following

1518reason for its intended action:

1523The request for delinquent renewal of this

1530license is denied. Florida Statute

1535561.20(5) exempted restaurant licenses

1539issued prior to January 1, 1958 from

1546operating under the provisions in 561.20(4)

1552as long as the place of business was in

1561continuous operation. This business failed

1566to renew its license on or before March 31,

15751999, therefore it did not comply with the

1583requirements and is no longer valid.

1589SR licenses will not be allowed to be moved

1598from the location where the license was

1605originally issued.

1607CONCLUSIONS OF LAW

161018. The instant challenge is being made pursuant to

1619Section 120.56(4), Florida Statutes, which provides, in

1626pertinent part, as follows:

1630(a) Any person substantially affected by an

1637agency statement may seek an administrative

1643determination that the statement violates s.

1649120.54(1)(a). The petition shall include

1654the text of the statement or a description

1662of the statement and shall state with

1669particularity facts sufficient to show that

1675the statement constitutes a rule under s.

1682120.52 and that the agency has not adopted

1690the statement by the rulemaking procedure

1696provided by s. 120.54.

1700(b) The administrative law judge may extend

1707the hearing date beyond 30 days after

1714assignment of the case for good cause. If a

1723hearing is held and the petitioner proves

1730the allegations of the petition, the agency

1737shall have the burden of proving that

1744rulemaking is not feasible and practicable

1750under s. 120.54(1)(a).

1753(c) The administrative law judge may

1759determine whether all or part of a statement

1767violates s. 120.54(1)(a). The decision of

1773the administrative law judge shall

1778constitute a final order. [DOAH] shall

1784transmit a copy of the final order to the

1793Department of State and the committee. The

1800Department of State shall publish notice of

1807the final order in the first available issue

1815of the Florida Administrative Weekly.

1820(d) When an administrative law judge enters

1827a final order that all or part of an agency

1837statement violates s. 120.54(1)(a), the

1842agency shall immediately discontinue all

1847reliance upon the statement or any

1853substantially similar statement as a basis

1859for agency action.

1862* * *

1865(f) All proceedings to determine a

1871violation of s. 120.54(1)(a) shall be

1877brought pursuant to this subsection. A

1883proceeding pursuant to this subsection may

1889be consolidated with a proceeding under any

1896other section of this chapter. . . .

190419. Section 120.54(1)(a), Florida Statutes, the statutory

1911provision that Petitioners claim in their challenge DABT has

1920violated, provides as follows:

1924Rulemaking is not a matter of agency

1931discretion. Each agency statement defined

1936as a rule by s. 120.52 shall be adopted by

1946the rulemaking procedure provided by this

1952section as soon as feasible and practicable.

19591. Rulemaking shall be presumed feasible

1965unless the agency proves that:

1970a. The agency has not had sufficient time

1978to acquire the knowledge and experience

1984reasonably necessary to address a statement

1990by rulemaking;

1992b. Related matters are not sufficiently

1998resolved to enable the agency to address a

2006statement by rulemaking; or

2010c. The agency is currently using the

2017rulemaking procedure expeditiously and in

2022good faith to adopt rules which address the

2030statement.

20312. Rulemaking shall be presumed

2036practicable to the extent necessary to

2042provide fair notice to affected persons of

2049relevant agency procedures and applicable

2054principles, criteria, or standards for

2059agency decisions unless the agency proves

2065that:

2066a. Detail or precision in the

2072establishment of principles, criteria, or

2077standards for agency decisions is not

2083reasonable under the circumstances; or

2088b. The particular questions addressed are

2094of such a narrow scope that more specific

2102resolution of the matter is impractical

2108outside of an adjudication to determine the

2115substantial interests of a party based on

2122individual circumstances.

"2124When section 120.54(1)(a) is read together with section

2132120.56(4), it becomes clear that the purpose of a section

2142120.56(4) proceeding is to force or require agencies [that

2151desire to continue to rely on agency statements defined as

2161rules] into the rule adoption process. It provides [these

2170agencies] with incentives to promulgate [these statements as]

2178rules through the formal rulemaking process." Osceola Fish

2186Farmers Association, Inc., v. Division of Administrative

2193Hearings , 830 So. 2d 932, 934 (Fla. 4th DCA 2002).

220320. "An agency statement constituting a rule may be

2212challenged pursuant to Section 120.56(4), Florida Statutes, only

2220on the ground that 'the agency has not adopted the statement by

2232the rulemaking procedure provided by s. 120.54.'" Zimmerman v.

2241Department of Financial Services, Office of Insurance

2248Regulation , No. 05-2091RU, slip op. at 11 (Fla. DOAH August 24,

22592005)(Summary Final Order of Dismissal); see also Southwest

2267Florida Water Management District v. Charlotte County , 774 So.

22762d 903, 908-09 (Fla. 2d DCA 2001)("The basis for a challenge to

2289an agency statement under this section [Section 120.56(4),

2297Florida Statutes] is that the agency statement constitutes a

2306rule as defined by section 120.52(15), Florida Statutes (Supp.

23151996), but that it has not been adopted by the rule-making

2326procedure mandated by section 120.54. In the present case, the

2336challenges to the existing and proposed agency statement on the

2346grounds that they represent an invalid delegation of legislative

2355authority are distinct from a section 120.56(4) challenge that

2364the agency statements are functioning as unpromulgated rules.");

2373Florida Association of Medical Equipment Services v. Agency for

2382Health Care Administration , No. 02-1314RU, slip op. at 6 (Fla.

2392DOAH October 25, 2002)(Order on Motions for Summary Final

2401Order)("[I]n a Section 120.56(4) proceeding which has not been

2411consolidated with a proceeding pursuant to Section 120.57(1)(e),

2419the issue whether a rule-by-definition is substantively invalid

2427for reasons set forth in Section 120.52(8)(b)-(g), Florida

2435Statutes, should not be reached. That being so, the ultimate

2445issues in this case are whether the alleged agency statements

2455are rules-by-definition and, if so, whether their existence

2463violates Section 120.54(1)(a)."); and Johnson v. Agency for

2472Health Care Administration , No. 98-3419RU, 1999 Fla. Div. Adm.

2481Hear. LEXIS 5180 *15 (Fla. DOAH May 18, 1999)(Final Order of

2492Dismissal)("It is apparent from a reading of subsection (4) of

2503Section 120.56, Florida Statutes, that the only issue to be

2513decided by the administrative law judge in a proceeding brought

2523under this subsection is 'whether all or part of [the agency]

2534statement [in question] violates s. 120.54(1)(a),' Florida

2542Statutes . . . .").

254821. The sole remedy available under Section 120.56(4) for

2557such a violation is prospective injunctive relief. See

2565Zimmerman , slip op. at 11 ("The statute [Section 120.56(4),

2575Florida Statutes] is forward-looking in its approach. It is

2584designed to prevent future agency action based on statements not

2594adopted in accordance with required rulemaking procedures, not

2602to provide a remedy for final agency action (based on such

2613statements) that has already been taken."). If a violation is

2624found, the agency must, pursuant to Section 120.56(4)(d),

"2632immediately discontinue all reliance upon the statement or any

2641substantially similar statement as a basis for agency action."

2650See Agency for Health Care Administration v. HHCI Ltd.

2659Partnership , 865 So. 2d 593, 596 (Fla. 1st DCA 2004). In

2670addition, "unless the agency demonstrates that the statement is

2679required by the Federal Government to implement or retain a

2689delegated or approved program or to meet a condition to receipt

2700of federal funds," it must also pay the challenger's reasonable

2710costs and attorney's fees pursuant to Section 120.595(4),

2718Florida Statutes, which provides as follow:

2724CHALLENGES TO AGENCY ACTION PURSUANT TO

2730SECTION 120.56(4).

2732(a) Upon entry of a final order that all or

2742part of an agency statement violates s.

2749120.54(1)(a), the administrative law judge

2754shall award reasonable costs and reasonable

2760attorney's fees to the petitioner, unless

2766the agency demonstrates that the statement

2772is required by the Federal Government to

2779implement or retain a delegated or approved

2786program or to meet a condition to receipt of

2795federal funds.

2797(b) Notwithstanding the provisions of

2802chapter 284, an award shall be paid from the

2811budget entity of the secretary, executive

2817director, or equivalent administrative

2821officer of the agency, and the agency shall

2829not be entitled to payment of an award or

2838reimbursement for payment of an award under

2845any provision of law.

284922. Not every "agency statement" is a " rule " as defined by

2860Section 120.52(15), Florida Statutes, which provides as follows:

"2868Rule" means each agency statement of

2874general applicability that implements,

2878interprets, or prescribes law or policy or

2885describes the procedure or practice

2890requirements of an agency and includes any

2897form which imposes any requirement or

2903solicits any information not specifically

2908required by statute or by an existing rule.

2916The term also includes the amendment or

2923repeal of a rule. The term does not

2931include:

2932(a) Internal management memoranda which do

2938not affect either the private interests of

2945any person or any plan or procedure

2952important to the public and which have no

2960application outside the agency issuing the

2966memorandum.

2967(b) Legal memoranda or opinions issued to

2974an agency by the Attorney General or agency

2982legal opinions prior to their use in

2989connection with an agency action.

2994(c) The preparation or modification of:

30001. Agency budgets.

30032. Statements, memoranda, or instructions

3008to state agencies issued by the Chief

3015Financial Officer or Comptroller as chief

3021fiscal officer of the state and relating or

3029pertaining to claims for payment submitted

3035by state agencies to the Chief Financial

3042Officer or Comptroller.

30453. Contractual provisions reached as a

3051result of collective bargaining.

30554. Memoranda issued by the Executive Office

3062of the Governor relating to information

3068resources management.

3070Only agency statements of "general applicability," that is,

3078those statements which are intended by their own effect to

3088create or adversely effect rights, to require compliance, or to

3098otherwise have the direct and consistent effect of law, fall

3108within this definition. See Florida Department of Financial

3116Services v. Capital Collateral Regional Counsel-Middle Region ,

3123969 So. 2d 527, 530 (Fla. 1st DCA 2007); Department of Highway

3135Safety and Motor Vehicles v. Schluter , 705 So. 2d 81, 82 (Fla.

31471st DCA 1997); Department of Revenue v. Vanjaria Enterprises,

3156Inc. , 675 So. 2d 252, 255 (Fla. 5th DCA 1996); Balsam v.

3168Department of Health and Rehabilitative Services , 452 So. 2d

3177976, 977-978 (Fla. 1st DCA 1984); and McDonald v. Department of

3188Banking and Finance , 346 So. 2d 569, 581 (Fla. 1st DCA 1977).

320023. Such statements qualify as "rules" even if they have

3210not been reduced to writing. See Schluter , 705 So. 2d at 86

3222("[W]e find no support for Judge Benton's argument that an

3233agency's policy statement must be in writing before it can be

3244considered a nonadopted rule."); Department of Health, Board of

3254Pharmacy v. Rx Network of South Florida, LLC , Nos. 02-2976, 02-

32652977, 02-2978PL, and 02-2980PL, 2003 Fla. Div. Adm. Hear. LEXIS

32751024 *93 (Fla. DOAH January 10, 2003)(Recommended Order)("The

3284unwritten form of an agency statement does not prevent the

3294statement from satisfying the statutory definition of a rule in

3304Section 120.52(15)."); and Florida Association of Insurance

3312Agents and Professional Insurance Agents of Florida v.

3320Department of Insurance , No. 01-1427RU, 2001 Fla. Div. Adm.

3329Hear. LEXIS 2732 *43 (Fla. DOAH August 21, 2001)(Final

3338Order)("Because the focus is on effect rather than form, a

3349statement need not be in writing to be a rule-by-definition.").

336024. The "agency statement" Petitioners are challenging in

3368the instant case provides that SR licenses (that is, special

3378restaurant licenses issued prior to January 1, 1958) that have

3388not remained in "continuous operation" are thereby rendered

3396invalid pursuant to Section 561.20(5), Florida Statutes, and

3404therefore not subject to delinquent renewal pursuant to Section

3413561.27, Florida Statutes (Challenged Statement). This is (as

3421DABT itself described it in its Proposed Final Order) a "new

3432policy," 5 the product of DABT's having determined that its prior

3443practice of routinely granting applications for the delinquent

3451renewal of SR licenses was inconsistent with a proper

3460interpretation of Section 561.20(5), which for the past

3468approximately 50 years has provided as follows:

3475Provisions of subsections (2) and (4) as

3482amended by chapter 57-773, Laws of Florida,

3489shall take effect January 1, 1958, and shall

3497apply only to those places of business

3504licensed to operate after January 1, 1958,

3511and shall in no manner repeal or nullify any

3520license issued under provisions of law which

3527are now operating or will operate prior to

3535the effective date January 1, 1958; and all

3543such places of business shall be exempt from

3551the provisions of this law so long as they

3560are in continuous operation.

356425. Section 1 of Chapter 57-773, Laws of Florida, amended

3574Subsection (2) of Section 561.20, Florida Statutes, to read as

3584follows:

3585No such limitation of the number of licenses

3593as herein provided shall prohibit the

3599issuance of a special license to any bona

3607fide hotel, motel, or motor court of not

3615less than fifty (50) guest rooms or to any

3624bona fide restaurant containing all

3629necessary equipment and supplies for and

3635serving full course meals regularly and

3641having accommodations at all times for

3647service for two hundred (200) or more

3654patrons at tables occupying more than four

3661thousand (4000) square feet of space,

3667providing, however, that any restaurant

3672granted special license hereunder shall be

3678prohibited from selling alcoholic beverages

3683in packages for consumption off the

3689premises, and from operating as a package

3696store, and providing further that the

3702Beverage Director shall suspend any such

3708license if such restaurant ceases to be a

3716bona fide restaurant as required as a

3723prerequisite for obtaining such license, and

3729providing that no intoxicating beverage

3734shall be sold under such license after the

3742hours of serving food has ceased; provided

3749however, that any licenses heretofore or

3755hereafter issued to any hotel, motel, motor

3762court, or restaurant under the provisions of

3769general law shall not be moved to a new

3778location, such license being valid only on

3785the premises of such hotel, motel, motor

3792court or restaurant; provided, further, that

3798licenses issued to hotels, motels, motor

3804courts or restaurants under the general law

3811and held by such hotels, motels, motor

3818courts, or restaurants on May 24, 1947,

3825shall be counted in the quota limitation

3832contained in sub-section (1) herein; and

3838provided further that any license issued for

3845any hotel, motel, motor court or restaurant

3852under the provisions of this law shall be

3860issued only to the owner of said hotel,

3868motel, motor court or restaurant, or, in the

3876event the hotel, motel, motor court, or

3883restaurant is leased, to the lessee of the

3891hotel, motel, motor court, or restaurant and

3898the license shall remain in the name of said

3907owner or lessee so long as the license is in

3917existence. Any special license now in

3923existence heretofore issued under the

3928provision of this law cannot be renewed

3935except in the name of the owner of the

3944hotel, motel, motor court, or restaurant,

3950or, in the event the hotel, motel, motor

3958court, or restaurant is leased, in the name

3966of the lessee of the hotel, motel, motor

3974court, or restaurant, in which the license

3981is located and must remain in the name of

3990said owner or lessee so long as the license

3999is in existence. Any license issued under

4006this section shall be marked "Special."

4012After various subsequent amendments, Subsection (2) of Section

4020561.20 now reads, in pertinent part (that is, with respect to

4031restaurants), as follows:

4034(a) No such limitation of the number of

4042licenses as herein provided [in Subsection

40481] shall henceforth prohibit the issuance of

4055a special license to:

4059* * *

40624. Any restaurant having 2,500 square feet

4070of service area and equipped to serve 150

4078persons full course meals at tables at one

4086time, and deriving at least 51 percent of

4094its gross revenue from the sale of food and

4103nonalcoholic beverages; however, no

4107restaurant granted a special license on or

4114after January 1, 1958, pursuant to general

4121or special law shall operate as a package

4129store, nor shall intoxicating beverages be

4135sold under such license after the hours of

4143serving food have elapsed; or

4148* * *

4151However, any license heretofore issued to

4157any . . . restaurant . . . under the general

4168law shall not be moved to a new location,

4177such license being valid only on the

4184premises of such . . . restaurant. Licenses

4192issued to . . . restaurants under the

4200general law and held by such . . .

4209restaurants on May 24, 1947, shall be

4216counted in the quota limitation contained in

4223subsection (1). . . . Any special license

4231now in existence heretofore issued under the

4238provisions of this law cannot be renewed

4245except in the name of the owner of the . . .

4257restaurant or, in the event the . . .

4266restaurant is leased, in the name of the

4274lessee of the . . . restaurant in which the

4284license is located and must remain in the

4292name of the owner or lessee so long as the

4302license is in existence. Any license issued

4309under this section shall be marked

"4315Special," and nothing herein provided shall

4321limit, restrict, or prevent the issuance of

4328a special license for any restaurant . . .

4337which shall hereafter meet the requirements

4343of the law existing immediately prior to the

4351effective date of this act, if construction

4358of such restaurant has commenced prior to

4365the effective date of this act and is

4373completed within 30 days thereafter, or if

4380an application is on file for such special

4388license at the time this act takes effect;

4396and any such licenses issued under this

4403proviso may be annually renewed as now

4410provided by law. Nothing herein prevents an

4417application for transfer of a license to a

4425bona fide purchaser of any . . . restaurant

4434by the purchaser of such facility or the

4442transfer of such license pursuant to law.

4449* * *

445226. Section 2 of Chapter 57-773, Laws of Florida, amended

4462Subsection (4) of Section 561.20, Florida Statutes, to read as

4472follows:

4473The limitations herein prescribed shall not

4479affect or repeal any existing or future

4486local or special act relating to the

4493limitation by population and exceptions or

4499exemptions from such limitation by

4504population of such licenses within any

4510incorporated city or town or county that may

4518be in conflict herewith.

4522A second sentence, which reads as follows, has since been added

4533to Subsection (4) of Section 561.20:

4539Any license issued under a local or special

4547act relating to the limitation by population

4554shall be subject to all requirements and

4561restrictions contained in the Beverage Law

4567that are applicable to licenses issued under

4574subsection (1).

457627. As noted by the Third District Court of Appeal in

4587Davidson v. Coral Gables , 119 So. 2d 704, 707 (Fla. 3d DCA

45991960), prior to the effective date of Chapter 57-773, Subsection

4609(4) of Section 561.20, Florida Statutes, read as follows:

4618The limitations herein prescribed shall be

4624cumulative to and shall not affect or repeal

4632any existing or future local or special act

4640relating to the limitation by population of

4647such licenses within any incorporated city

4653or town or county that may be in conflict

4662herewith.

4663The Davidson court further observed:

4668The earlier law [the pre-Chapter 57-773

4674version of Subsection (4) of Section 561.20]

4681stated that the limitations (and that would

4688include exceptions to limitations) which the

4694Beverage Law prescribed were cumulative and

4700did not affect existing population

4705limitations, imposed by cities, which might

4711be in conflict therewith. It is important

4718to note that the earlier law did not state,

4727as does the present law [Subsection (4) of

4735Section 561.20, as amended by Chapter 57-

4742773], that the limitations therein shall not

4749affect or repeal "exceptions or exemptions

4755from such limitations by population" by

4761cities under their charters which are in

4768conflict therewith. Thus in the Abood case,

4775a limitation exception provided in the state

4782law, allowing licenses in restaurants

4787meeting certain requirements, was held to

4793prevail over a city's limitations which did

4800not make such an exception.

4805The present law presents a different

4811situation. First, the word cumulative,

4816which had appeared in the earlier law, was

4824left out, and, more important, where the

4831earlier law had said that the state

4838regulations would not affect or repeal city

4845limitations imposed by population, this

4850amendment added that a city's regulations as

4857to exceptions and exemptions to population

4863limitations were not thereby affected or

4869repealed.

4870Id. at 707-08; see also Miami Beach v. State , 129 So. 2d 696,

4883700 (Fla. 3d DCA 1961)("[T]he State Beverage Law provides that

4894its restrictions as to population and its exceptions to

4903population quotas, such as the created special licenses for

4912hotels or restaurants, shall not prevail over contrary

4920provisions relating thereto in municipalities. This was

4927expressly provided for in § 561.20(4), Fla. Stat., . . . . As

4940was pointed out by this court in Davidson v. City of Coral

4952Gables , Fla. App. 1960, 119 So.2d 704, supra , the holding in the

4964earlier case of Abood v. City of Jacksonville , Fla. 1955, 80

4975So.2d 443, that the provision of the State Beverage Law for a

4987special license in restaurants should prevail over a contrary

4996regulation within the City of Jacksonville, was no longer

5005applicable because of the subsequent amendment to the beverage

5014law, now appearing as subsection 4 of § 561.20, Fla. Stat.,

5025F.S.A. At the time the Abood case was decided, subsection 4 of

5037§ 561.20 of the Beverage Law provided the limitations of the

5048state law would not affect or repeal any conflicting local or

5059special act 'relating to the limitation by population . . . of

5071such licenses within any incorporated city.' Effective

5078January 1, 1958, subsection 4 of § 561.20 was amended to read

5090that it would not affect or repeal such conflicting local

5100provisions of incorporated cities which related not only to the

5110limitations by population but to 'exceptions or exemptions from

5119such limitation by population of such licenses within any

5128incorporated city.' By virtue of that change in 1958 in

5138subsection 4 of § 561.20, it was held in the Davidson case that

5151the exception to population limitation created by the State

5160Beverage Law which provided for special liquor licenses for

5169restaurants meeting certain stated requirements could not be

5177used as a basis for forcing the City of Coral Gables to issue

5190such a license to a restaurant applicant, when the city had made

5202provision for special licenses for hotels but had not provided

5212for such special licenses for restaurants.").

521928. The third and final section of Chapter 57-773, Laws of

5230Florida, initially just provided that "[t]his act shall take

5239effect January 1, 1958," but it was subsequently amended by

5249Chapter 57-1991, Laws of Florida, to read as follows:

5258This act shall take effect January 1, 1958,

5266and shall apply only to those places of

5274business licensed to operate after

5279January 1, 1958, and shall in no manner

5287repeal or nullify any license issued under

5294provisions of law which are now operating or

5302will operate prior to the effective date

5309January 1, 1958; and all such places of

5317business shall be exempt from the provisions

5324of this law so long as they are in

5333continuous operation.

5335This section of Chapter 57-773, as amended by Chapter 57-1991,

5345is now codified verbatim in Subsection (5) of Section 561.20,

5355Florida Statutes, except that the phrase, "Provisions of

5363subsections (2) and (4) as amended by chapter 57-773, Laws of

5374Florida" has been substituted for "This act," and there is a

5385semi-colon, instead of a comma, after the third and last

5395reference to January 1, 1958.

540029. DABT's "new policy" of routinely denying applications

5408for the delinquent renewal of SR licenses is premised on its

5419recently revised view of the meaning and effect of the language

5430in Subsection (5) of Section 561.20, Florida Statutes,

"5438exempt[ing] [these licenses] from operating under the

5445provisions [of Subsection (4) of the statute] as long as the

5456place of business was in continuous operation." DABT now takes

5466the position that, in light of this statutory language, if a

"5477business [has] failed to [timely] renew [its] SR license," it

5487is not in compliance with the "continuous operation" requirement

5496of Subsection (5) and such non-compliance automatically makes

5504the business' license "no longer valid" and therefore

5512nonrenewable.

551330. This "new policy" of DABT's, founded on its freshly

5523arrived-at interpretation of the provisions of Section 561.20,

5531Florida Statutes, is a "statement of general applicability," as

5540that term is used in Section 120.52(15), Florida Statutes. By

5550its own effect, it adversely affects the rights of SR licensees

5561seeking to delinquently renew their licenses, such as Abkey and

5571Amy Cat, whose licenses would have been renewed under the "old

5582policy" it replaced. Furthermore, it does not fall within any

5592of the exceptions set forth in Section 120.52(15)(a) through

5601(c), Florida Statutes. It therefore is a "rule," as defined in

5612Section 120.52(15). See Department of Natural Resources v.

5620Wingfield Development Co. , 581 So. 2d 193, 196 (Fla. 1st DCA

56311991)("In Balsam v. Department of Health and Rehabilitative

5640Services , 452 So.2d 976, 977-978 (Fla. 1st DCA 1984), this court

5651held that any agency statement is a rule if it purports in and

5664of itself to create certain rights and adversely affect others,

5674or if it serves by its own effect to create rights, or to

5687require compliance, or otherwise to have the direct and

5696consistent effect of law. The limitations, conditions and

5704requirements contained in the letter of April 4, 1988, adversely

5714affect the substantive rights of others. The letter implements,

5723interprets or prescribes law or policy, describes procedure or

5732practice requirements of the agency, and imposes requirements or

5741information not specifically required by statute or by existing

5750rule. The letter, therefore, constitutes a rule within the

5759meaning of the law . . . .").

576831. DABT argues that this "challenged agency statement

5776does not constitute a rule" because it merely repeats, and does

5787not "add[] to, take[] away [from] or otherwise alter" what

5797Section 561.20(5), Florida Statutes, already requires. It is

5805true that an agency statement "which simply reiterates the

5814legislature's statutory mandate and does not place upon the

5823statute an interpretation that is not readily apparent from its

5833literal reading, nor in and of itself purport[s] to create

5843rights, or require compliance, or to otherwise have the direct

5853and consistent effect of the law, is not an unpromulgated rule,

5864and actions based upon such an interpretation are permissible

5873without requiring an agency to go through rule making." St.

5883Francis Hospital, Inc. v. Department of Health and

5891Rehabilitative Services , 553 So. 2d 1351, 1354 (Fla. 1st DCA

59011989); see also National Foundation to Prevent Child Sexual

5910Abuse, Inc., v. Department of Law Enforcement , No. 07-4898RU,

59192007 Fla. Div. Adm. Hear. LEXIS 648 *40 (Fla. DOAH November 27,

59312007)(Summary Final Order)("Significantly, the Challenged

5937Statement does not, by its own terms, establish any new fee

5948requirements or procedures. Rather, it attempts merely to

5956summarize, for the benefit of interested members of the public,

5966existing requirements and procedures that have been established

5974elsewhere . . . ."); Reynolds v. Board Of Trustees of the

5987Internal Improvement Trust Fund , No. 03-4478RU, 2004 Fla. ENV

5996LEXIS 222 *15-16 (Fla. DOAH February 20,2004)(Final

6004Order)("Lastly, regarding the first statement challenged, the

6012history surrounding driving on the beach and regulation by the

6022BOT indicates that the Legislature has limited BOT's

6030jurisdiction to regulate driving on the beach by Section 161.58,

6040Florida Statutes. The challenged statement is [a] re-statement

6048of the scheme of statutory regulation, and not a statement of

6059BOT policy."); and Aloha Utilities, Inc. v. Public Service

6069Commission , No. 97-2485RU, 1998 Fla. Div. Adm. Hear. LEXIS 5497

6079*29 (Fla. DOAH 1998)(Final Order)("Statements simply

6086reiterating statutory or rule requirements also are not rules

6095under Sections 120.52(15) and 120.74(1)(d), Florida Statutes

6102(1997)."). The Challenged Statement in the instant case,

6111however, gives Section 561.20(5) a meaning that is not readily

6121apparent from a literal reading of the statute. Nowhere in

6131Section 561.20(5) does it specifically state that the necessary

6140consequence of an SR licensee's failure to satisfy the statute's

"6150continuous operation" proviso is the automatic invalidation of

6158its license, regardless of the existence or contents of any

6168local or special act governing the sale of alcoholic beverages

6178in the city, town, or county where the licensee's business is

6189located. To accept DABT's argument that the Challenged

6197Statement is a mere reiteration of Section 561.20(5) would

6206require the undersigned to disregard the language of the statute

6216and add words not placed there by the Legislature. This the

6227undersigned cannot do.

623032. Although the Challenged Statement is a "rule," as

6239defined in Section 120.52(15), Florida Statutes, it has not been

6249adopted in accordance with the rulemaking procedures set forth

6258in Section 120.54, Florida Statutes (nor has the rulemaking

6267process even commenced). DABT has neither argued, nor presented

6276evidence, that engaging in such rulemaking is now, or has at any

6288time been, either infeasible or impracticable. Accordingly,

6295the existence of the Challenged Statement violates Section

6303120.54(1)(a) and therefore, pursuant to Section 120.56(4)(d),

6310Florida Statutes, DABT must "immediately discontinue all

6317reliance upon the statement or any substantially similar

6325statement as a basis for agency action."

633233. There having been no showing made that the Challenged

6342Statement "is required by the Federal Government to implement or

6352retain a delegated or approved program or to meet a condition to

6364receipt of federal funds." Petitioners are entitled, pursuant

6372to Section 120.595(4)(a), Florida Statutes, to recover a

6380reasonable sum for the attorneys' fees and costs they have

6390incurred in the prosecution of this action. See Security Mutual

6400Life Insurance Co. v. Department of Insurance , 707 So. 2d 929,

6411930 (Fla. 1st DCA 1998).

6416ORDER

6417Based on the foregoing, it is

6423ORDERED:

6424The relief requested by Petitioner in its amended petition

6433filed with DOAH pursuant to Section 120.56(4), Florida Statutes

6442(to wit: an administrative determination that the Challenged

6450Statement violates Section 120.54(1)(a), Florida Statutes, and

6457an award pursuant to Section 120.595(4), Florida Statutes) is

6466granted.

6467The undersigned reserves jurisdiction to determine, if

6474necessary, the amount of attorneys' fees and costs Petitioners

6483should be awarded. Should the parties be unable to amicably

6493resolve this issue, Petitioners shall file with DOAH a written

6503request that the undersigned resolve the matter. No such

6512request filed more than 60 days of the date of this Final Order

6525will be considered.

6528DONE AND ORDERED this 30th day of April, 2008, in

6538Tallahassee, Leon County, Florida.

6542S

6543___________________________________

6544STUART M. LERNER

6547Administrative Law Judge

6550Division of Administrative Hearings

6554The DeSoto Building

65571230 Apalachee Parkway

6560Tallahassee, Florida 32399-3060

6563(850) 488-9675 SUNCOM 278-9675

6567Fax Filing (850) 921-6847

6571www.doah.state.fl.us

6572Filed with the Clerk of the

6578Division of Administrative Hearings

6582this 30th day of April, 2007.

6588ENDNOTES

65891 Unless otherwise noted, all references in this Final Order to

6600Florida Statutes are to Florida Statutes (2007).

66072 See Fla. Admin. Code R. 61A-3.0141(1)("The suffix 'SRX' shall

6618be made a part of the license numbers of all such [special

6630restaurant] licenses issued after January 1, 1958.").

66383 See Fla. Admin. Code R. 61A-3.0141(3).

66454 See Fla. Admin. Code R. 61A-3.0101(1).

66525 See Schlute r, 705 So. 2d at 83 ("The word 'policy,' used in

6668each of the three statements, is not a term of art. It has a

6682commonly understood meaning. It is defined by one source as 'a

6693principle, plan, or course of action, as pursued by a

6703government, organization, individual, etc.' Webster's New World

6710Dictionary 1102 (2d college ed. 1980). We therefore affirm the

6720ALJ's order as to his determination that the final three

6730policies constituted invalid, nonadopted rules.").

6736COPIES FURNISHED :

6739Scott Boyd, Executive Director

6743and General Counsel

6746Administrative Procedures Committee

6749Holland Building, Room 120

6753Tallahassee, Florida 32399-1300

6756Liz Cloud, Program Administrator

6760Administrative Code

6762Department of State

6765R. A. Gray Building, Suite 101

6771Tallahassee, Florida 32399

6774Harold F. X. Purnell, Esquire

6779Rutledge, Ecenia, Purnell and Hoffman, P.A.

6785Post Office Box 551

6789Tallahassee, Florida 32302-0551

6792Michael J. Wheeler, Esquire

6796Department of Business and Professional Regulation

6802Northwood Centre, Suite 40

6806Tallahassee, Florida 32399-2202

6809Cynthia Hill, Director

6812Division of Alcoholic Beverages and Tobacco

6818Department of Business and Professional Regulation

6824Northwood Centre, Suite 40

68281940 North Monroe Street

6832Tallahassee, Florida 32399-2202

6835Ned Luczynski, General Counsel

6839Department of Business and Professional Regulation

68451940 North Monroe Street

6849Tallahassee, Florida 32399-0792

6852NOTICE OF RIGHT TO JUDICIAL REVIEW

6858A party who is adversely affected by this Final Order is entitled

6870to judicial review pursuant to Section 120.68, Florida Statutes.

6879Review proceedings are governed by the Florida Rules of Appellate

6889Procedure. Such proceedings are commenced by filing the original

6898Notice of Appeal with the agency clerk of the Division of

6909Administrative Hearings and a copy, accompanied by filing fees

6918prescribed by law, with the District Court of Appeal, First

6928District, or with the District Court of Appeal in the Appellate

6939District where the party resides. The notice of appeal must be

6950filed within 30 days of rendition of the order to be reviewed.

Select the PDF icon to view the document.
PDF
Date
Proceedings
PDF:
Date: 01/05/2009
Proceedings: Transmittal letter from Claudia Llado forwarding the one-volume Transcript along with the Petitioner`s and Respondent`s exhbits to the agency.
PDF:
Date: 05/23/2008
Proceedings: (Joint) Stipulation filed.
PDF:
Date: 04/30/2008
Proceedings: DOAH Final Order
PDF:
Date: 04/30/2008
Proceedings: Final Order (hearing held January 25, 2008). CASE CLOSED.
PDF:
Date: 04/29/2008
Proceedings: Supplemental Proposed Recommended Order filed.
Date: 04/14/2008
Proceedings: CASE STATUS: Hearing Held.
PDF:
Date: 03/17/2008
Proceedings: Respondent`s List of Exhibits (exhibits not available for viewing) filed.
PDF:
Date: 03/14/2008
Proceedings: Letter to M. Wheeler from H. Purnell regarding Petitioners` SR Licenses filed.
PDF:
Date: 03/14/2008
Proceedings: Proposed Final Order filed.
PDF:
Date: 03/14/2008
Proceedings: Proposed Recommended Order filed.
PDF:
Date: 03/14/2008
Proceedings: Respondent`s Proposed Recommended Order filed.
PDF:
Date: 03/14/2008
Proceedings: Petitioner`s Proposed Final Order filed.
PDF:
Date: 03/13/2008
Proceedings: Notice of Oral Argument.
Date: 03/13/2008
Proceedings: CASE STATUS: Motion Hearing Held.
PDF:
Date: 02/25/2008
Proceedings: Order Granting Extension of Time (proposed recommended orders to be filed by March 14, 2008).
PDF:
Date: 02/22/2008
Proceedings: Motion for Extension of Time filed.
PDF:
Date: 02/08/2008
Proceedings: Transcript filed.
Date: 01/25/2008
Proceedings: CASE STATUS: Hearing Held.
PDF:
Date: 01/18/2008
Proceedings: Order of Consolidation (DOAH Case Nos. 07-2508, 07-4602, 07-4692, and 08-0212RU).
PDF:
Date: 01/17/2008
Proceedings: Pre-hearing Stipulation filed.
PDF:
Date: 01/16/2008
Proceedings: Respondent`s Answer to Petitioner`s Motion to Consolidate Petitioner`s Challenging Agency Statement Defined as a Rule filed.
PDF:
Date: 01/14/2008
Proceedings: Motion for Consolidation filed.
PDF:
Date: 01/11/2008
Proceedings: Order of Assignment.
PDF:
Date: 01/11/2008
Proceedings: Rule Challenge transmittal letter to Liz Cloud from Claudia Llado copying Scott Boyd and the Agency General Counsel.
PDF:
Date: 01/10/2008
Proceedings: Petition Challenging Agency Statement Defined as a Rule filed.

Case Information

Judge:
STUART M. LERNER
Date Filed:
01/10/2008
Date Assignment:
01/17/2008
Last Docket Entry:
01/05/2009
Location:
Tallahassee, Florida
District:
Northern
Agency:
Department of Business and Professional Regulation
Suffix:
RU
 

Counsels

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Related Florida Statute(s) (10):

Related Florida Rule(s) (3):