09-001973RX Brooklyn Luncheonette, Llc, D/B/A Del Tura Pub And Restaurant vs. Department Of Business And Professional Regulation, Division Of Alcoholic Beverages And Tobacco Status: Closed DOAH Final Order on Friday, October 23, 2009.

Summary: The contiguous square footage requirement in the Rule is an invalid exercise of delegated legislative authority because the statute does not confer specific power to adopt and enlarge the specific provision of the statute.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BROOKLYN LUNCHEONETTE, LLC, )

d/b/a DEL TURA PUB AND )

RESTAURANT, )

)

Petitioner, )

)

vs. ) Case No. 09-1973RX

)

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF ALCOHOLIC BEVERAGES )

AND TOBACCO, )

)

Respondent. )

)

SUMMARY FINAL ORDER

This matter came before the undersigned Administrative Law

Judge on Petitioner’s Motion for Summary Adjudication and

Respondent’s response thereto. The parties have filed a Pre-

hearing Statement and have waived the requirement for an

adjudicatory hearing relating to the companion case (Case No.

09-1218) until this rule challenge case is resolved. Being

fully advised in the premises, it is FOUND and DETERMINED, as

follows:

APPEARANCES

For Petitioner: Harold F. X. Purnell, Esquire

Rutledge, Ecenia & Purnell, P.A.

Post Office Box 551

Tallahassee, Florida 32302

For Respondent: Cecelia D. Jefferson, Esquire

Michael B. Golen, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2202

STATEMENT OF THE ISSUES

Whether Florida Administrative Code Rule 61A-3.0141(2)(a)2.,

and its directive that the square footage making up the licensed

constitutes a valid exercise of delegated legislative authority.

Whether a genuine issue of material fact exists, and, if

so, whether Petitioner’s Motion for Summary Adjudication should

be denied.

PRELIMINARY STATEMENT

Petitioner sought an SRX license from Respondent pursuant

to Subsection 561.20(2)(a)4., Florida Statutes (2007), 1 and

currently holds a temporary SRX license. Respondent noticed its

intent to deny the application for a permanent license on

October 30, 2007. Petitioner duly-sought an administrative

hearing thereon, pursuant to Subsection 120.57(1), Florida

Statutes, which matter is pending in the Division of

Administrative Hearings (DOAH) Case No. 09-1218. Respondent has

stipulated that the sole basis upon which it seeks to deny the

permanent license to Petitioner is the application of the

“contiguous” requirement contained in Florida Administrative

Code Rule 61A-3.0141(2)(a)2. Petitioner filed a Petition

Challenging Validity of Existing Rule 61A-3.0141(1)

and (2), on April 15, 2009, which was assigned DOAH Case

No. 09-1973RX. Petitioner alleges that the cited rule

constitutes an invalid exercise of delegated legislative

authority. By Motion to Cancel Hearing and Initially Resolve

the Issue of Rule Validity First, the parties agreed to have the

issue of the validity of the “contiguous” requirement of Florida

Administrative Code Rule 61A-3.0141(2)(a)2. considered initially

by summary adjudication. The parties have submitted a joint

Pre-hearing Stipulation and Petitioner filed the depositions of

Susan Doherty, chief of the Division’s Bureau of Licensing, and

Major Carol Owsiany, Respondent’s agency representative.

Respondent filed its response in opposition to the motion, and

both parties filed notices of filing supplemental authority.

The entire file has been carefully considered in the preparation

of this Final Order.

FINDINGS OF FACT

The following findings of facts are determined:

1. The State of Florida, Department of Business and

Professional Regulation (Respondent) is the state agency

responsible for adopting the existing rule which is the subject

of this proceeding.

2. Under the provisions of Section 561.02, Florida

Statutes, the Division of Alcoholic Beverages and Tobacco,

within the Department of Business and Professional Regulation,

is charged with the supervision and enforcement of all alcoholic

beverages manufactured, packaged, distributed and sold within

the state under the Beverage Law. The Division issues both

general and special alcoholic beverage licenses.

3. Petitioner, Brooklyn Luncheonette, LLC, d/b/a Del Tura

Pub and Restaurant is the owner/operator of a restaurant located

in North Fort Myers, Florida. It is seeking issuance of a

special restaurant license (SRX) pursuant to Subsection

561.20(2)(a)4., Florida Statutes, from the Division. Therefore,

Petitioner is substantially affected by the challenged rule.

4. Petitioner operates a restaurant on a leased parcel of

property consisting of two buildings with a dedicated pathway

between the two buildings. Petitioner’s restaurant premises

consist of two buildings which contain a minimum of 2,500 square

feet in the aggregate of service area. Petitioner’s restaurant

facility is equipped to serve 150 patrons full course meals at

tables at one time.

5. The sole reason asserted by Respondent for denial of

Petitioner’s application is the alleged noncompliance with the

“contiguous” requirement of Florida Administrative Code

Rule 61A-3.0141(2)(a)2.

6. The provision of general law, applicable to Petitioner,

which sets forth the specific criteria for an SRX license, is

Subsection 561.20(2)(a)4., Florida Statutes.

7. To these statutory criteria, Respondent has, by Florida

Administrative Code Rule 61A-3.0141(2)(a)2., added an additional

criteria: “The required square footage shall be contiguous and

under the management and control of a single establishment.”

Respondent has interpreted the provision to mean that the

buildings containing the square footage must physically touch.

8. Florida Administrative Code Rule 61A-3.0141 reflects

that the sole law implemented is Subsection 561.20(2)(a)4.,

Florida Statutes.

9. Susan Doherty is the chief of Respondent’s Bureau of

Licensing, whose duties include determining “if a license will

be issued based upon the qualifications of the applicant [and]

whether the premises meets all requirements based on the type of

license applied for.”

10. Ms. Doherty, whose deposition was taken on May 12,

2009, testified in pertinent part:

Q. All right. If I can direct your

attention to Subsection (2)(a)(2) of Rule

61A-3.0141, it says, “The required square

footage shall be contiguous and under the

management and control of a single licensed

restaurant establishment.” What does

“contiguous” mean?

A. Touching, actually connected, touching.

* * *

Q. Do you see anything in the statute that

prohibits a licensee from qualifying if the

square footage is in two buildings that the

applicant leases and they’re connected by a

pathway which the applicant leases? Do you

see anything in the statute that precludes

that?

A. In the statute, no.

Q. Do you see anything in the rule that

precludes that?

A. In my opinion, Section (2)(a)(2), the

contiguous would.

Deposition of S. Doherty, pp. 15 and 18.

11. Chief Doherty conceded, however, that she could not

point to any provision of the relevant statute that imposes a

“contiguous” requirement regarding the square footage.

12. Chief Doherty further noted that for special licenses

issued for hotels pursuant to Subsection 561.20(2)(a)1., Florida

Statutes, she was aware that there were numerous non-contiguous

buildings licensed pursuant to such section.

13. The deposition of Respondent’s agency representative,

Major Carol Owsiany, was taken on May 13, 2009. Major Owsiany

testified:

Q. . . . Isn’t it correct that there’s

2,500 square feet of service area located in

the two buildings that are currently the

subject of the [Petitioner’s] temporary SRX

license?

A. Yes, sir.

Q. Can you point to me any provision of

Section 561.20(2)(1)(4) that precludes the

petitioner from having the requisite square

footage in two buildings?

A. One second, sir. Not in the statute,

but I can in the rule.

Deposition of C. Owsiany, p. 8.

14. For purposes of this rule challenge case, there are no

genuine issues of material fact in dispute.

CONCLUSIONS OF LAW

Jurisdiction

15. DOAH has jurisdiction over the parties and the subject

matter of this proceeding pursuant to Subsections 120.56 (1)

and (3), Florida Statutes (2009).

16. Petitioner is a company whose substantial interests

are affected by the rule, and it has standing to bring this rule

challenge. Petitioner is seeking to challenge an existing rule

of Respondent, alleging that Section 561.11 and Subsection

561.20(2)(a), Florida Statutes, do not provide the necessary

authorization to promulgate the rule.

Burden of Proof

17. Petitioner “has a burden of proving by a preponderance

of the evidence that the existing rule is an invalid exercise of

delegated legislative authority as to the objections raised.”

§ 120.56(3)(a), Fla. Stat.

18. Florida Administrative Code Rule 61A-3.0141 cites as

its rule making authority Section 561.11, Florida Statutes,

which grants Respondent the “. . . authority to adopt rules

pursuant to Subsection 120.536(1) and Section 120.54, Florida

Statutes, to implement the provisions of the Beverage Law.

19. Under the authority granted by the above-noted

statutes, Respondent has adopted rules to regulate the sale of

alcoholic beverages throughout the state of Florida,

specifically the licensing of retail vendors.

20. Florida Administrative Code Rule 61A-3.0141(2)(a)2.,

which outlines the requirements for receiving an SRX alcoholic

beverage license, such as the one Petitioner had applied for,

provides that the 2,500 square feet required to make up the

licensed premises must be “contiguous and under the management

and control of a single establishment.”

21. Section 120.56, Florida Statutes, provides for

administrative challenges to agency rules on the ground that

they are invalid exercises of delegated legislative authority.

22. Subsection 120.52(8), Florida Statutes, provides:

“Invalid exercise of delegated legislative

authority" means action which goes beyond

the powers, functions, and duties delegated

by the Legislature. A proposed or existing

rule is an invalid exercise of delegated

legislative authority if any one of the

following applies:

(a) The agency 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.;

(d) The rule is vague, fails to establish

adequate standards for agency decisions, or

vests unbridled discretion in the agency;

(e) The rule is arbitrary or capricious. A

rule is arbitrary if it is not supported by

logic or the necessary facts; a rule is

capricious if it is adopted without thought

or reason or is irrational; or

(f) The rule imposes regulatory costs on

the regulated person, county, or city which

could be reduced by the adoption of less

costly alternatives that substantially

accomplish the statutory objectives.

23. The last paragraph of Subsection 120.52(8), Florida

Statutes, includes general standards for challenging a rule and

provides:

The grant of rule making authority is

necessary, but not sufficient, to allow an

agency to adopt a rule; a specific law to be

implemented is also required. An agency may

adopt only rules that implement or interpret

the specific powers and duties granted by

the enabling statute. No agency shall have

authority to adopt a rule only because it is

reasonably related to the purpose of the

enabling legislation and is not arbitrary

and capricious or is within the agency’s

class of powers and duties, nor shall an

agency have the authority to implement

statutory provisions setting forth general

legislative intent or policy. Statutory

language granting rule making authority or

generally describing the powers and

functions of an agency rule shall be

construed to extend no further than

implementing or interpreting the specific

powers and duties conferred by the enabling

statute.

24. This set of general standards is to be used in

determining the validity of a rule in all cases. Lamar Outdoor

Advertising – Lakeland v. Florida Department of Transportation ,

__ So. 3d __, 34 Fla. L. Weekly D1670, 2009 Fla. App. Lexis

11592 (Fla. 1st DCA August 19, 2009); Southwest Florida Water

Management District v. Save the Manatee Club, Inc. , 773 So. 2d

594, 597-98 (Fla. 1st DCA 2000).

25. Respondent is limited in its rulemaking authority only

to implementing or interpreting a specific power or duty

conferred by the enabling statute. Neither Subsection

561.11(1), nor 561.20(2)(a)4., Florida Statutes, provides any

such authority for the contiguous square footage requirement.

Lamar Outdoor Advertising – Lakeland v. Florida Department of

Transportation , supra .

26. Subsection 561.20(2)(a)4., Florida Statutes, provides

in pertinent part:

(2)(a) No such limitation on the number of

licenses as herein provided shall henceforth

prohibit the issuance of a special license

to:

* * *

(4) Any restaurant having 2500 square feet

of service area and equipped to serve 150

persons full course meals at tables at one

time, and deriving at least 51% of its gross

revenue from the sale of food and non-

alcoholic beverages . . . [2]

27. An SRX license permits the sale of distilled spirits

in addition to beer and wine. The Legislature has limited the

categories of licenses that may sell distilled spirits to only

quota licenses and certain special licenses, such as the

licenses for restaurants and the licenses for hotels. See

§ 561.20, Fla. Stat. It is readily apparent from the review of

Subsection 561.20(2)(a)4., Florida Statutes, that the

Legislature limited the grant of this privilege only to

restaurants meeting or exceeding a certain minimum size. The

restaurants have to meet a minimum of 2,500 square feet of

service area, must be equipped to serve at least 150 persons

full course meals at tables at one time, and derive at least 51

percent of its gross revenue from the sale of food and non-

alcoholic beverages.

28. In imposing these minimum size standards, the

Legislature did not delegate to Respondent an explicit power or

duty to implement or interpret such criteria. There is nothing

in Subsection 561.20(2)(a)4., Florida Statutes, that grants to

Respondent the power to add by rule a “contiguous” requirement

to the legislatively mandated minimum “2500 square feet of

service area” criteria.

29. Respondent has conceded that the required square

footage can be in two separate buildings, but by rule has added

the requirement that such buildings containing the square

footage must be contiguous, i.e. touch. This is clearly beyond

Respondent’s authority. The Legislature knows how to use the

word “contiguous” and has done so in other legislation, e.g.,

Subsection 497.380(1), Florida Statutes, requiring that a

funeral establishment must consist “of at least 1,250 contiguous

interior square feet.” Lamar Outdoor Advertising – Lakeland ,

supra .

30. In State, Department of Business Regulation v.

Salvation Limited, Inc. , 452 So. 2d 65, 66 (Fla. 1st DCA 1984),

involving a forerunner of the same special restaurant rule, the

court, holding it is “axiomatic” that a rule cannot enlarge,

modify or contravene a statute, found invalid a prior division

attempt to add additional criteria by rule to the special

restaurant license minimum standards:

Through section 561.20(2)(a)3., the

Legislature has enumerated specific criteria

for a special restaurant license. The

applicant or licensee must: (1) be a

restaurant, (2) have 2500 square feet of

service area, (3) be equipped to serve 150

persons full course meals at tables at one

time, and (4) derive at least 51% of its

gross revenue from the sale of food and non-

alcoholic beverages. To these fixed and

definite criteria, DABT added, by rule, a

fifth criterion: that meals be prepared and

cooked on the licensed premises. In so

doing, it enlarged upon the statutory

criteria and, thus, exceeded the “yardstick”

laid down by the Legislature.

* * *

The serving of food by a restaurant simply

does not require that the food be prepared

and cooked on the premises. If the

Legislature had intended to impose such a

requirement, it could easily have done so.

31. In Southwest Florida Water Management District v. Save

the Manatee Club , Inc., 773 So. 2d 594, 598-599 (Fla. 1st DCA

2000), the court noted that amendments to the APA have made

clear “that the authority to adopt an administrative rule must

be based on an explicit power or duty identified in the enabling

statute. Otherwise, the rule is not a valid exercise of

delegated legislative authority.” The court noted that the

authority for an administrative rule is not a matter of degree.

“Either the enabling statute authorizes a rule at issue or it

does not.”

32. In Florida Department of Highway Safety and Motor

Vehicles v. JM Auto, Inc. , 977 So. 2d 733, 734 (Fla. 1st DCA

2008), the court upheld the invalidation of an agency rule which

identified only general rulemaking authority as the specific

authority for the rule’s adoption. The court noted that the

general grant of authority was insufficient under Subsections

120.52(a)(d) and 120.536(1), Florida Statutes, which allow an

agency to adopt “only rules that implement or interpret the

specific powers and duties granted by the enabling statue.” The

court noted that its decisions “have recognized the

legislature’s intent to restrict the scope of agency rulemaking

and consequently have approved a rule only when there is

statutory language authorizing the agency to adopt rules to

implement the subject matter of the statute.”

33. Neither the specific authority, Section 561.11,

Florida Statutes, nor the law implemented, Subsection

561.20(2)(a)4., Florida Statutes, contains an explicit grant of

legislative authority for the “contiguous” rule.

34. Indeed, it is clear that the Legislature did not grant

any such specific power or duty since the detailed criteria for

the grant of the SRX license are expressly set forth in the

statute. State, Department of Business Regulation v. Salvation

Limited, Inc. , supra .

35. The contiguous square footage requirement of Florida

Administrative Code Rule 61A-3.0141(2)(a)2. constitutes an

invalid exercise of authority under the aforementioned

definitions (b) and (c). The rule provision has exceeded its

grant of rule making authority by adopting a rule for which the

agency has not conferred any specific power or duty by the

enabling statute. The rule improperly adds to the minimum

legislative square footage criteria a “contiguous” requirement

not provided by the Legislature.

36. Similarly, Respondent has enlarged, modified or

contravened the specific provision of Subsection 561.20(2)(a)4.,

Florida Statutes, by adding a requirement not provided or

authorized by the Legislature. The challenged rule provision

vests unbridled discretion in the agency since it usurps the

legislative function by adding a requirement not imposed by the

Legislature.

37. The rule, however, is not arbitrary and/or capricious

and is supported by both logic and the necessary facts.

38. Respondent’s position in regard to the rule, in that

somehow the lack of contiguity in the square footage of the

restaurant precludes a restaurant from complying with the

statutory criteria, is flawed.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED that Florida Administrative Code Rule 61A-

3.0141(2)(a)2. and its directive that the square footage making

up the licensed premises of an SRX license be “contiguous,”

constitutes an invalid exercise of delegated legislative

authority and cannot be relied upon by Respondent to deny the

issuance of an SRX license to Petitioner.

DONE AND ORDERED this 23rd day of October, 2009, in

Tallahassee, Leon County, Florida.

S

DANIEL M. KILBRIDE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 23rd day of October, 2009.

ENDNOTES

1/ Unless otherwise indicated, all references to the Florida

Statutes are to the 2007 codification.

2/ Petitioner was previously audited by Respondent and found to

have met the 51 percent requirement, and such is not at issue in

this proceeding.

COPIES FURNISHED :

Harold F. X. Purnell, Esquire

Rutledge, Ecenia & Purnell, P.A.

Post Office Box 551

Tallahassee, Florida 32302

Cecelia D. Jefferson, Esquire

Michael B. Golen, Esquire

Department of Business and

Professional Regulation

1940 North Monroe Street, Suite 42

Tallahassee, Florida 32399-2202

Ned Luczynski, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

William L. Veach, Director

Division of Hotels and Restaurants

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

F. Scott Boyd, Executive Director

and General Counsel

Joint Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399-1300

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 agency 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.