10-008197RU Macla Ltd, Ii, Limited Partnership; H. Joseph Hughes, As Trustee Of The Betty Price Hughes Qualified Vacation Residence Trust; And Kershaw Manufacturing Company, Inc. vs. Department Of Environmental Protection And Board Of Trustees Of The Internal Improvement Trust Fund Status: Closed DOAH Final Order on Thursday, November 4, 2010.

Summary: Petitioners did not prove standing to challenge as unadopted rules two conditions in a beach restoration permit and a position of DEP with regard to when erosion control lines must be established.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROLAND GUIDRY, AS CO - TRUSTEE OF )

THE GUIDRY LIVING TRUST, AND )

OCEANIA OWNER'S ASSOCIATION, )

INC. , )

)

Petitioners , )

)

vs. ) Case No. 10 - 5348RU

)

DEPARTMENT OF ENVIRONMENTAL )

PROTECTION AND BOARD OF )

TRUSTEES OF THE INTERNAL )

IM PROVEMENT TRUST FUND , )

)

Respondents . )

)

DAVID H. SHERRY, REBECCA R. )

SHERRY, AND JOHN S. DONOVAN, )

)

Petitioners, )

)

vs. ) Case No. 10 - 6205RU

)

DEPARTMENT OF ENVIRONMENTAL )

PROTECTION AND BOARD OF )

TRUSTEES OF THE INTERNAL )

IMPROVEMENT TRUST FUND, )

)

Respondents. )

_______________________________ )

MARCLA LTD, II, LIMITED )

PARTNERSHIP; H. JOSEPH HUGHES, )

AS TRUSTEE OF THE BETTY PRICE )

HUGHES QUALIFIED VACATION )

RESIDENCE TRUST; AND KERSHAW )

MANUFACTURING COMPANY, INC., )

)

Petitioners, )

)

vs. ) Case No. 10 - 8197RU

)

DE PARTMENT OF ENVIRONMENTAL )

PROTECTION AND BOARD OF )

TRUSTEES OF THE INTERNAL )

IMPROVEMENT TRUST FUND, )

)

Respondents. )

_______________________________ )

FINAL ORDER

These consolidated cases were heard by David M. Maloney,

Administrative Law Judge , on August 2 - 5, 2010, and August 24 - 25,

2010, in Fort Walton Beach, Flori da, and September 20, 2010, in

Tallahassee, Florida.

APPEARANCES

For Petitioners: D. Kent Safriet, Esquire

Joseph Brown, Esquire

Hopping Green & Sams, P.A.

119 South Monroe Street, Suite 300

Tallahassee, Florida 32301

For Respondents: Kelly L. Russell, Esquire

Doug las Beason, Esquire

Department of Environmental Protection

The Douglas Building, Mail Station 35

39 00 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

BACKGROUND

The Petitioners allege in these consolidated cases that the

Department made statements that violate Section 120.54(1)(a) ,

Florida Statutes . The cases a rise from a common source: the

application by Okaloosa County (the "County") to the Department

of Environmental Protection and the Board of Trustees of the

Internal Impro vement Trust Fund ( collectively, the "Department")

for authority to conduct beach restoration we st of Destin,

Florida (the "Western Destin Project" or the "Project").

In response to the application, the Department sent the

County a Consolidated Notice of Intent to Issue Joint Coastal

Permit, Variance and Authorization to Use Sovereign Submerged

Land s (the "NOI"). Attached was a Draft Consolidated Joint

Coastal Permit and Sovereign Submerged Lands Authorization (the

"Draft Permit") . The Draft Permit was revised on two occasions

during the course of the proceedings (the " First Revised Draft

Permit" a nd the "Second Revised Draft Permit" ).

The various draft permits contain "Specific Conditions . "

These consolidated cases concern two of them: Specific

Condition 1 as it appeared in the Draft Permit and the First

Revised Draft Permit ( " Original Specific Condition 1 " ) and

Specific Condition 5 as it appears in the First Revised Draft

Permit and the Second Revised Draft Permit .

Original Specific Condition 1 contains several

requirements. In general, the County must record a certificate

before the commencem ent of construction associated with the

restoration. The certificate is required to describe all upland

properties along the shoreline of the Project. T he certificate

must be accompanied by a survey of the pre - project Mean High

Water Line (the "Pre - proje ct MHWL") along the entire length of

the Project's shoreline.

In addition to allegations related to Original Specific

Condition 1, t he petition in Case No. 10 - 5348RU alleges tha t the

Department made a nother statement that is an unadopted rule :

" that an Er osion Control Line (the ' ECL ' ) is not required to be

established pursuant to Section 161.161, F lorida Statute , for a

beach restoration project unless ' state funds ' are used for the

construction (as opposed to just the design) of a beach

restoration project ." Case No. 10 - 5348RU, Petition for an

Administrative Determination Co ncerning Unadopted Rules, at 2 .

As found below, the Department developed a position with regard

to when ECLs are required in beach restoration projects (the

"Department ECL Positi on").

In general, the statement in Specific Condition 5 which is

alleged to constitute an unadopted rule in S pecific Condition 5

advises the County that no beach restoration work can be

performed on private upland property unless authorization from

the owner o f the property has been obtained and submitted to the

Department . There is an exception: the permitted party can

submit a judgment from a court that such an authorization is not

required.

Original Specific Condition 1, the Department ECL Position

and Sp ecific Condition 5 have not been adopted as rules pursuant

to Section 120.54, Florida Statutes.

STATEMENT OF THE ISSUES

All Three Cases

Whether the Petitioners have standing to bring their

respective challenges pursuant to Section 120.56(4), Florida

Statu tes?

Case No. 10 - 5348RU

Whether either or both Original Specific Condition 1 and

the Department ECL Position constitute a rule?

Case Nos. 10 - 6205 and 10 - 8197

Whether Specific Condition 5 constitutes a rule?

Attorney's Fees

Whether an order should be ent ered against the Department

for costs and attorney's fees under Section 120.595(4), Florida

Statutes?

PRELIMINARY STATEMENT

a. Posture of the Cases

On July 13, 2010, Roland Guidry, as Co - Trustee of the

Guidry Living Trust and Oceania Owners ' Associati on, Inc. (the

"Oceania Petitioners") filed their Petition for an

Administrative Determination Concerning Unadopted Rules. The

petition was assigned Case No. 10 - 5384RU.

On July 26, 2010, the Department filed a "Notice of Filing

Request for Modification an d Revised, Draft Joint Coastal

Permit " (the " First Revised Draft Permit"). The First Revised

Draft Permit made two changes to the Draft Permit .

The first change is summarized in a section of the Revised

Draft Permit entitled "Activity Location." It excl udes the

Oceania members' common elements property from the fill

placement area .

The second change adds the language to the Draft Permit's

Specific Condition 5 with regard to the required authorizations

from owners of private upland property on which work will be

performed during the restoration.

The Oceania Petitioners moved for the case to be

consolidated with two cases that challenged the Draft Permit:

DOAH Case Nos. 10 - 0515 and 10 - 0516 (th e "Permit Challenge

Cases"). The motion was granted .

On July 26, 2010, David H. Sherry, Rebecca R. Sherry, and

John S. Donovan, (the "Sherry Petitioners") filed pursuant to

Section 120.56(4), Florida Statutes, their Petition for

Administrative Determination Concerning Unadopted Rules. The

petition was assigned DOA H Case No. 10 - 6205 RU.

In a second order entered July 27, 2010, the Oceania

Petitioners were granted leave to amend their petition in Case

No. 10 - 5348RU to add the allegations in Case No. 10 - 6205 RU. A n

order was entered consolidating Case No. 10 - 62 0 5 RU wi th the

Permit Challenge Cases and Case No. 10 - 5348 RU. The cases

proceeded to final hearing with the two Permit Challenges and

the two Unadopted Rule Challenges (Case Nos. 10 - 5348 RU and 10 -

6205 RU) consolidated.

On August 18, 2010, during the course of the final hearing

of the four consolidated cases, the Department filed a notice of

a second set of revisions to the proposed joint coastal permit

(the "Second Revised Draft Permit") . The Department revised

Original Specific Condition 1 to delete references t o the

requirement of a Pre - project MHWL and instead to require that an

ECL be set in accordance with the procedures of S ection s

161.141 - 161.211, Florida Statutes, specifically recognizing that

the Oceania common elements had been excluded from the Project .

On August 23, 2 010, MACLA Ltd. II, Limited Partnership

("MACLA"), and Joseph H. Hughes as Trustee of The Betty Price

Hughes Qualified Vacation Residence Trust and Kershaw

Manufacturing Company, Inc. (the "MACLA Petitioners") filed

their Petition for an A dministrative Determination Concerning

Unadopted Rules. The petition alleges that Specific Condition 5

is an unadopted rule.

The petition was assigned Case No. 10 - 8197RU and was

consolidated with the two other Unadopted Rule Challenges and

the two Permit Challenges so that the five consolidated cases

continued together in the hearing that had commenced three weeks

earlier .

b. The Hearing

The final hearing in the four consolidated cases commenced

on August 2, 2010. The hearing took place over six days. The

final hearing on the three Unadopted Rule Challenges ended

September 20, 2010 , before the conclusion of the final hearing

in the Permit Challenge Cases .

After the County and the Holiday Isle Intervenors presented

their cases in the Permit Challenges, the Department presented

its case. Testimony relevant to the Unadopted Challenges came

from Ellen McLain Edwards, Ph.D. Petitioners called William

Dally, Ph.D; Roland Guidry ; David Sherry ; Rebecca Sherry ; John

Donovan ; and Michael Barnett.

Over the obj ection of the Department, the Petitioners re -

called Michael Barnett and called West Gregory in reference to

the Unadopted Rule Challenges. Petitioners called Dr. Joseph

Hughes, Royce Kershaw, and Louise Brooker, on August 25, 2010,

two days after the fi ling of the petition in Case No. 10 - 8197RU

to establish the standing of the petitioners in that case.

On September 20, 2010, the Department called Dr. Edwards in

rebuttal in the MACLA Unadopted Rule Challenge (Case

No. 10 - 8197RU).

c. Severance

The thre e Unadopted Rule Challenges remain consolidated but

they have been severed from the Permit Challenges .

FINDINGS OF FACT

The Draft Permit

1 . The Draft Permit (and its revisions) authorizes the

County "to construct the work outlined in the activity

descrip tion and activity location of this permit and shown on

the approved permit drawing s , plans and other documents attached

hereto." Joint Exhibit, Vol. III, Tab 9, page 3 of 26.

2 . The "activity description" and the "activity location"

are detailed on the first page of the Draft Permit. See Joint

Exhibit, Vol. III, Tab 9 (first page of 26). The drawings,

plans and other documents attached to the Draft Permit are

contained under Tab 10 of Volume III of the Joint Exhibit.

The Parties

3 . Petitioner Guidry is co - trustee of the Guidry Living

Trust (the "Guidry Living Trust") . He has independent authority

to protect, conserve, sell, lease, encumber or otherwise dispose

of trust assets. Th os e assets include a condominium unit in the

Oceania Condominium . The condominium unit owned by the Guidry

Living Trust includes an undivided interest held with all other

unit owners in the common property at the Oceania Condominium.

The common property includes real property that fronts the Gulf

of Mexico located at 720 G ulf Shore Drive in the City of Destin,

Florida. T he real property has the MHWL of the Gulf of Mexico

as its southern boundary .

4 . Petitioner Oceania is a condominium association

established pursuant to Florida's Condominium Act, Chapter 718,

Florida St atutes. It does not own any real property.

Mr. Guidry testified that he i s authorized in his capacity as

p resident of the Association to initiate and pursue this

administrative proceeding on its behalf . No documents were

entered in evidence reflecting t hat Oceania's Board of Directors

approved the filing of the petition.

5 . The owners of condominium units at the Oceania

Condominium , including the Guidry Trust, compr ise the membership

of Oceania. The unit owners all own undivided shares in the

Oceania Condominium common property including the real estate

that extends at its southern boundary to the MHWL of the Gulf of

Mexico. The owners did not vote on whether to file the petition

in Case No. 10 - 0 5 348 RU.

6 . Petitioners David and Rebecca Sherry are le aseholders

of real property where they reside . L ocated at 554 Coral Court,

Number 511, Fort Walton Beach, Florida 32548 , the property is in

an area in Okaloosa County on Santa Rosa Island that is known as

Okaloosa Island. The property leased by the Sherr y s is not

wi thin the Western Destin Project .

7 . Petitioner John Donovan is a leaseholder of real

property located at 909 Santa Rosa Boulevard, Numbers 131 - 132,

El Matador Condominium, Fort Walton Beach, F lorida 32548 , in t he

same area as the Sherry's res idence.

8 . Petitioner MACLA II, Ltd., is a Texas Limited

Partnership. Louise Brooker is its p resident. It owns real

property which fronts the Gulf of Mexico located at 620 Gulf

Shore Drive, Destin, F lorida . T he southern boundary of the

property is t he MHWL of the Gulf of Mexico. The MACLA property

is located adjacent to the shoreline that is the subject of the

Western Destin Project.

9 . The Betty Price Hughes Qualified Vacation Residence

Trust (the "Hughes Trust") owns real property at 612 Gulf Shor e

Drive. I ts southern boundary is deeded the MHWL of the Gulf of

Mexico. The property is located adjacent to the shoreline

subject to the Western Destin Project. Petitioner H. Joseph

Hughes is a trustee of the Hughes Trust.

10 . Petitioner Kershaw Manu facturing Company, Inc. , an

Alabama corporation, is the owner of real property located at

634 Gulf Shore Drive, Destin , F lorida . I ts southern boundary

the property is the MHWL of the Gulf of Mexico. The property is

located adjacent to the shoreline subje ct to the Western Destin

Project. Royce Kershaw is the p resident of the Kershaw

Manufacturing Company. He testified that as p resident of the

company, he has the authority to act on behalf of the company

and has the power to bind the corporate entity.

11 . The Department of Environmental Protection is

responsible for the administration of Chapter 161, Florida

Statutes, Parts I and II, the "Beach and Shore Preservation

Act." § 161.011, Fla. Stat. The Board of Trustees of the

Internal Improvement Fund is responsible for stewardship of its

public trust properties under Chapter 253, Florida Statutes .

Included among those properties is the sovereignty submerged

lands along the coast of the Gulf of Mexico .

The ECL and the MHWL

12 . In the context of the Beac h and Shore Preservation

Act , the MHWL and the ECL w ere discussed by the Florida Supreme

Court in Walton County v. Stop the Beach Renourishment, Inc . ,

998 So. 2d 1102 (Fla. 2008) (the "Walton County Supreme Court

Case") :

Pursuant to section 161.141, when a local

government applies for funding for beach

restoration, a survey of the shoreline is

conducted to determine the MHWL for the

area. Once established, any additions to

the upland property landward of the MHWL

that result from the restoration project

remain the property of the upland owner

subject to all governmental regulations,

including a public easement for traditional

uses of the beach. § 161.141.

After the MHWL is established, section

161.161(3) provides that the Board must

determine the area t o be protected by the

project and locate an ECL. In locating the

ECL, the Board "is guided by the existing

line of mean high water, bearing in mind the

requirements of proper engineering in the

beach restoration project, the extent to

which erosion or avu lsion has occurred, and

the need to protect existing ownership of as

much upla nd as is reasonably possible."

§ 161.161(5).

Pursuant to section 161.191(1), this ECL

becomes the new fixed property boundary

between public lands and upland property

after th e ECL is recorded. And, under

section 161.191(2), once the ECL has been

established, the common law no longer

operates "to increase or decrease the

proportions of any upland property lying

landward of such line, either by accretion

or erosion or by any ot her natural or

artificial process."

Walton County , at 1108.

The Pre - project MHWL in This Case and the ECL

13 . The Pre - project MHWL called for by Original Specific

Condition 1 was never established .

1 4 . No evidence was introduced as to where the Pre - p roject

MHWL would h ave been located had it been set and in particular,

where it would have been located in relation to an ECL .

15 . Rod Maddox is a long - time surveyor with the

Department's Division of State Land in the Bureau of Survey &

Mapping . See P - 2 44. Mr. Maddox testified about his experience

with pre - project MHWLs and where they are located in relation to

ECLs. F amiliar with the term "pre - project mean high water

line," Mr. Maddox defined it as the mean high water line prior

to the placement of fi ll used in a beach restoration project.

See id. at 29. He testified that pre - project MHWLs have been

required in the many beach restoration case s with which he is

familiar . He testified further that whe n it comes to location,

there is no difference betw een a pre - pro ject MHWL and an ECL.

The d en ominations may be different but Mr. Maddox testified "a s

to how . . . established, I see them as one and the same." Id.

at 30.

Original Special Condition 1: the Pre - project MHWL

1 6 . On December 31, 2009, the D epartment issued the NOI.

Attached to it was the Draft Permit. The Draft Permit contained

the following paragraph as Special Condition 1:

Prior to construction of the beach

restoration project, the Permittee must

record in the official records of Okaloos a

County a Certificate, approved by the

Department, which describes all upland

properties (including their owners of

record) along the entire shoreline of the

permitted project, with an attached

completed survey of the pre - project Mean

High Water Line ("M ean High Water Line

Survey") conducted along the entire

permitted project shoreline length. The

Mean High Water Line Survey must have been

completed in a manner complying with Chapter

177, Florida Statutes, as determined by the

Department. No constructio n work pursuant

to this joint coastal permit shall commence

until the Certificate and attached Mean High

Water Line Survey have been approved and

archived by the Department's Bureau of

Survey and Mapping, and the Department has

received proof of recording of such

documents (see Specific Condition No. 4.c.).

T he approved Certificate and attached Mean

High Water Line survey shall be attached to,

and kept as part of this joint coastal

permit and authorization to use sovereign

submerged lands. If in the futur e the

Permittee seeks reimbursement from the State

for costs expended to undertake (construct)

the permitted project, then, prior to, and

as a condition of receipt of any authorized

and approved reimbursement, the Board of

Trustees will establish an ECL co nsistent

with the provisions of Chapter 161, Florida

Statutes. The Permittee shall be required

to record such a line in the Okaloosa County

official records.

Joint Exhibit, Vol. III, No. 9.

17 . The Oceania Petitioners, as landowners within the

Project area, challenged the issuance of the Draft Permit on

January 14, 2010. See Case No. 10 - 0516. Among the bases for

the challenge was that the Department lacked authority to

implement Original Special Condition 1 and, in particular, its

requirement that th e County record a completed survey of the

pre - project MHWL in lieu of the establishment of an ECL.

1 8 . On July 26, 2010, the Department revised the Draft

Permit to eliminate from the Project the common property owned

by the unit owners o f the Oceania Con dominium. The change was

supported by a letter from Michael Trudnak, P.E., of Taylor

Engineering, Inc., on behalf of the County which stated: " On

behalf of Okaloosa County, Taylor Engineering submits this

request to modify the project area and Draft Join t Coastal

Permit for the Western Destin Beach Restoration Project [file

nos. excluded]. The applicant has decided to remove the Oceania

Condominium property from the beach fill placement area. " Joint

Exhibit, Vol. III, Tab 15, Exhibit A. The revised pro ject, as

described in permit drawings enclosed with Mrudnak's letter

includes two reaches: Reach 1 extends from the east jetty of

East Pass to approximately 600 ft east of FDEP reference

monument R - 22 (R22.6) and Reach 2 extends from approximately 200

ft east of R - 23 (R - 23.2) to R - 25.5. The Oceania Condominium

property is in the gap between the two b eaches . Additionally,

the letter request ed that the Department modify Specific

Condition 1 of the Draft Permit to reflect the modified project

area so th at th e MHWL Survey requirement of Specific Condition 1

would exclude the Oceania Condominium property.

1 9 . In accord with the request, Special Condition 1 was

amended to add the following language: "With respect to the

shoreline seaward of the Oceania O wner's [sic] Association,

Inc., members' common elements property, neither a pre - project

Mean High Water Line survey, nor a Certificate with a

description of the pre - project Mean High Water Line shall be

recorded in conjunction with this coastal permit." Joint

Exhibit, Vol. III, Tab 15, the First Revised Draft Permit, Page

5 of 26.

20 . On August 4, 2010, as the Department neared the end of

its case in the third day of the hearing , it announced that the

Revised Draft Permit would "be revised [again, this time] to

require the establishment of an ECL under the applicable

statute." Tr. 621.

21 . The draft p ermit, accordingly, was revised for a

second time (the "Second Revised Draft Permit") . The Department

carried out the second revision in a notice filed at the

Division of Administrative Hearings on August 18, 2010 (the

August 18, 2010 , Notice).

22 . The August 18, 2010 , Notice contains two changes to

the First Revised Draft Joint Permit.

23 . The first change delete s the existing language in

Original Sp ecific Condition 1 (the language challenged in

Case No. 10 - 5348 RU ) in its entirety. It substitute s the

following language:

Prior to construction of the beach

restoration project, the Board of Trustees

will establish an Erosion Control Line along

the sh oreline of the beach restoration

project. The Erosion Control Line shall be

established consistent with the provisions

of ss. 161.141 - 1 61.211, Florida Statutes.

An Erosion Control Line shall not be

established in conjunction with this joint

coastal permi t with respect to the shoreline

seaward of the Oceania Owner's [sic]

Association, Inc. members' common elements

property. In lieu of conducti ng a survey,

the Board of Trustees may accept and approv e

a survey as initiated, conducted, and

submitted by Okalo osa County if said survey

is made in conformity with the appropriate

principles set forth in ss. 161.141 - 161.211.

Department of Environmental Protection's and Board of Trustees

of the Internal Improvement Fund's Notice of Revisions to the

Proposed Joint C oastal Construction Permit, page 3 of 4.

24 . The second change is made with respect to Specific

Condition No. 4(c) of the First Revised Draft Permit , one of a

list of items to be submitted to the Department for approval

prior to the commencement of const ruction and the issuance of a

Notice to Proceed by the Department . The existing language i s

deleted in its entirety and the following language i s

substituted:

Written documentation that the Erosion

Control Line required by Special Condition

Number 1 has been filed in the public

records of Okaloosa County.

Id.

The Department ECL Position

a. Chapter 161: Beach and Shore Preservation

25 . Chapter 161 , Florida Statutes, governs "Beach and

Shore Preservation." "Parts I and II of this chapter may be

known and cited as the 'Beach and Shore Preservation Act.'"

§ 161.011, Fla. Stat.

26 . Part I governs "Regulation of Construction,

Reconstruction, and Other Physical Activity." Sections 161.011

through 161.241 comprise Part I. The Department developed it s

position on ECLs claimed by Petitioners to be an Unadopted Rule

by considering Part I, in particular Sections 161.088 (which

declares the public policy to properly manage and protect

Florida's beaches) through 161.211.

27 . At some point in 2009, the De partment saw a

distinction related to ECLs in S ections 161.088 - 161.211 between

beach restoration projects where state funding was used for

construction and projects w here no state funds were used. The

former seemed to require ECLs, the latter not.

28 . S everal statutory provisions were viewed as

particularly relevant. For example, Section 161.141, Florida

Statutes, declares that it is th e public policy of the state "to

cause to be fixed and determined, pursuant to beach restoration

. . . projects, the bo undary line between sovereignty lands

. . . and the upland properties adjacent thereto . . . ."

2 9 . The section that mainly governs ECLs is Sec tion

161.161 . It provides the procedure for approval of projects for

the restoration and maintenance of criti cally eroded beaches ,

subject to a beach management plan which is funded, in part, by

the state .

30 . With regard to ECLs , t he s tatute provides:

(3) Once a project [for the restoration and

maintenance of a critically eroded beach] is

determined to be und ertaken, a survey of all

or part of the shoreline within the

jurisdiction of the local government in

which the beach is located shall be

conducted in order to establish the area of

beach to be protected by the project and

locate an erosion control line.

* * *

(4) Upon completion of the survey depicting

the area of the beach erosion control

project and the proposed location of the

erosion control line, the board of trustees

shall give notice of the survey and the date

on which the board of trustees will h old a

public hearing for purpose of receiving

evidence on the merits of the proposed

erosion control line and, if approval is

granted, of locating and establishing such

requested erosion control line . . . in

order that any persons who have an interest

in the location of such requested erosion

control line can be present at such hearing

to submit their views concerning the precise

location of the proposed erosion control

line.

* * *

(5) The board of trustees shall approve or

disapprove the erosion contro l line for a

beach restoration project. In locating said

line, the board of trustees shall be guided

by the existing line of mean high water,

bearing in mind the requirements of proper

engineering in the beach restoration

project, the extent to which the erosion or

avulsion has occurred, and the need to

protect existing ownership of as much upland

as is reasonably possible.

§ 161.161, Fla. Stat.

b. D e velopment of the Department's Position on ECLs

31 . Prior to 2009, the Department's established ECLs fo r

beach restoration projects whether the project ' s construction

was supported by state funding or not. There was an exception :

when the property landward of the MHWL was owned by the s tate .

I n such a case, the Department saw no need to set an ECL since

b oth the sovereignty lands and the adjacent uplands property are

owned by the state.

32 . This position held at least through J anuary 15, 2009,

when the Department held a workshop and hearing pursuant to

Section 161.161, Florida Statutes, in Okaloosa Count y to

establish an ECL for the Western Destin Project. The hearing

officer who conducted the ECL hearing was West Gregory,

Departm ent Assistant General Counsel.

33 . While consideration of where the ECL should be

established for the Western Destin Project was underway, there

were ongoing discussions by e - mail and in briefing s of whether

the statute required an ECL . The discussion was prompted when

Mr. G regory, as Department Assistant General Counsel, drafted a

m emorandum (the "Draft Memorandum") to Michae l Barnett, Chief of

the Bureau of Beaches and Coastal Systems (the Bureau) to be

sent through Paden Woodruff, an Environmental Administrator .

The memorandum related to another beach restoration project in

Okaloosa County: a project in volving Eglin Air Fo rce Base .

34 . The Draft M emorandum shows a date of Ja nuary "XX",

2009 , and is stamped "DRAFT." P - 119. It presents the question

"Should . . . [the Department] require the United States Air

Force (USAF) to establish an erosion control line (ECL) for the

beach restoration project located on Eglin AFB?" Id.

35 . The Draft M emorandum provides a brief answer: "No,

. . . because the beach . . . is not critically eroded." Id.

36 . The memorandum recognize s the public policy of the

state to fix the boundary between public and private lands f or

beach restoration projects in Section 161.141, Florida Statutes ,

and a requirement that the Board of Trustees "must establish the

line of mean high water prior to the commencement of a beach

restoration project , " id. , leading to the suggestion that each

and every beach restoration project must establish an ECL.

37 . The Draft M emorandum, however, construes Section

161.141, Florida Statutes, with Section 161.161, Florida

Statutes, and draws support from an Attorney Gene ral Opinion and

the Walton County Florida Supreme Court case to conclude tha t it

is only when a project is undertaken with state funding that an

ECL must be established. In the case of the Eglin AFB beach

restoration projects, the Draft M emorandum conclud es:

This determination not to establish an ECL

on the Eglin AFB beach restoration project

would not preclude the USAF from obtaining a

JCP permit. Rather, it precludes the USAF

from receiving state funding assistance.

Id.

3 8 . The Draft M emorandum was not sent to the intended

recipients . It was s ubmitted to two other lawyers in the

Department. Mr. Gregory did not receive comments from them.

39 . Although no comments were made to Mr. Gregory after

the draft of the memorandum was sent to other members of the

legal staff, the subject remained under discussion in the

Department in early 2009 .

40 . Sometime in early 2009 , based on a legal analysis of

Department attorneys, the Department took the position that an

ECL is required to be set when state funds are used for the

construction of a project. The converse of this position, that

an ECL is not required to be set when no state funds are

involved, is the statement alleged to be an unadopted rule.

41 . Two permits were issued that did not require an ECL:

one for the Eglin AFB beach restoration project in March of

2009 , and an other that was an emergency permit for Holiday Isle.

As with Specific Condition 1 in the Western Destin Project, the

determination to not require an ECL was because of the lack of

s tate funding. As Mr. Barnett testified about the two permits,

there "is no State cost share for construction . . . [and]

that's the reason [the Department] didn't require establishment

of an ECL." Tr. 1279.

42 . Mr. Gregory's Draft Memorandum was never finalized .

The Department issued three permits or draft permits (including

for the Western Destin Project) with s pecific c onditions that

required pre - project MHWL s and that did not require ECLs.

Otherwise , the Department has not committed the Depar tment ECL

Position to writing. Nonetheless, the Department ECL Position

was stated in a deposition taken in this case on July 26, 2010.

43 . On July 26, 2010, the deposition of Janet Llewellyn,

the Director of Water Resources Management was taken by

Petitioner s. Director Llewellyn is "responsible ultimately for

all the projects that are processed and actions taken out of

[the] division." P - 223 at 10. These include permits issued by

the Bureau and in particular, the Draft Permit, First Revised

Draft Permit an d the Second Draft Permit for the Project.

44 . When asked about the Department's statement that an

ECL is not required when there is not state funding,

Ms. Llewellyn preferred to rephrase the Department position as

to when an ECL is required rather than when it is not required.

She then testified that an ECL is required when there is "state

funding involved through [the Department's] funding program."

Id. at 13.

45 . Ms. Llewellyn was unable to pinpoint the moment t he

Department reached such a position other than:

[t]he question came up sometime in the last

year or two -- I couldn't tell you when --

about what the statute actually required in

terms of when it was proper to set an

erosion control line or required. And our

attorneys did a legal analysis, again, of

the statute, and that was their legal

opinion of what the statute required.

Tr. 14 . Wh atever the date that such a position was precisely

firmed up, Ms. Ll e wellyn was able to testify on July 26, 2010,

"that if state funding is going to a projec t, than an ECL needs

to be set. That's what the statute requires." Id. This

statement was based on the opinions of Department attorneys

prior to their use in connection with the issuance of beach

restoration permits in Okaloosa County.

46 . The Departm ent has not initiated rule - making with

respect to its ECL Position. Whether r ule - making would be

initiated was not known by the Bureau Chief on August 24, 2010,

during his testimony in the final hearing.

Change of Position

47 . The Department modified it s position on ECLs that it

appeared to have at the time of Ms. Llewellyn's deposition on

August 4, 2010 . A s detailed above , it announced that an ECL

would be required for the Western Destin Project , after all .

The modification was formalized with the fil ing of the Second

Revised Draft Permit on August 18, 2010.

Specific Condition 5

48 . Before the challenged language in Specific Condition 5

was added by the First Revised Draft Permit, the Department had

relied on General Condition 6 to give notice to per mittees that

the permit did not allow trespass :

This permit does not convey to the Permittee

or create in the Permittee any property

right, or any interest in real property, nor

does it authorize any entrance upon or

activities on property which is not own ed or

controlled by the Permittee. The issuance

of the permit does not convey any vested

rights or any exclusive privileges.

Joint Ex. 9.

49 . Based on the petitions in the Permit Challenge Cases,

the Department proposed in the First Revised Draft Permi t to add

to Specific Condition 5 the language that is underscored in the

following:

The Permittee is advised that no work shall

be performed on private upland property

until and unless the required authorizations

are obtained. Sufficient authorizations

sh all included: (1) written evidence of

ownership of any property which will be used

in carrying out the project; (2)

authorization for such use from the property

owner which upland of mean high - water; (3)

construction and management easements from

upland p roperty owners; or (4) a judgment

from a court of competent jurisdiction which

reflects that such authorization, in whole

or in part, is not required.

The Permittee is also advised to schedule

the pre - construction conference at least a

week prior to the i ntended commencement

date. At least seven (7) days in advance of

a pre - construction conference, the Permittee

shall provide the written authorizations for

the portion of the project for which

construction is about to commence, as

required above , written n otification,

advising the participants (listed above) of

the agreed - upon date, time and location of

the meeting, and also provide a meeting

agenda and a teleconference number.

Joint Exhibit, Volume III, Tab 15, the First Revised Draft

Permit, Page 7 of 26 .

50 . There was no evidence that the language added to

Specific Condition 5 by the First Revised Draft Permit had been

in any other permits or that the Department intended to use the

language in any other beach restoration permits.

51 . Other than whate ver might be gleaned from the Draft

Permit, itself (and its revisions), t here was no evidence

offered that the property of any of the petitioners , in fact,

would be used in the Western Destin Beach Project.

CONCLUSIONS OF LAW

52 . The Division of Administ rative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding. § 120.56, Fla. Stat.

Standing

53 . "Any person substantially affected by an agency

statement may seek an administrative determination that the

statement violate s s. 120.54(1)(a)." § 120.56(4)(a), Fla. Stat.

54 . To e stablish standing to challenge an agency statement

under the "substantially affected" test, a party must show (1)

that the rule or policy will result in a real and immediate

injury in fact, and (2) that the alleged interest is within the

zone of interest to be protected or regulated. Jacoby v. Fla.

Bd. of Med. , 917 So. 2d 358, 360 (Fla. 1st DCA 2005).

a. Original Specific Condition 1

and the Department ECL Position

55 . Petitioners have failed to demonstrate that they are

substantially affected by either Original Specific Condition 1

or the Department ECL Position . They did not demonstrate that

Original Specific Condition 1 or the Department ECL Position

would result in a real and immediate injur y in fact.

56. They did not show where a pre - project MHWL would be in

relation to where an ECL wo uld be. Mr. Maddox' testimony,

moreover, indicated that there would be no difference in their

location; they would be in the same place. Without a

demonstr ation of where the two lines would be and how

Petitioners would be affected by the setting of a Pre - project

MHWL rather than an ECL , Petitioners have not demonstrated any

injury in fact to them caused by Original Specific Condition 1

or the Department ECL Position.

5 7 . Furthermore, United Wisconsin Life Insurance Company

v. Fla. Dep't of Life Ins. , 831 So. 2d 239 (Fla. 1st DCA 2002)

states the following:

United Wisconsin has no right to pursue a

separate, collateral challenge to an alleged

nonrule policy where an adequate remedy

exists through a section 120.57 proceeding.

United Wisconsin does not dispute the

assertion that it was free to make, and in

fact did make, the same arguments raised in

this case in the then - pending section 120.57

proceeding. Uni ted Wisconsin has an

adequate forum in the section 120.57,

Florida Statutes, proceeding and the now -

pending appeal of the Department's final

order in that case.

United Wisconsion at 240. This holding of the court seems to

have been approved by the Florid a Legislature when it amended

Section 120.57, Florida Statutes, to add the following language:

An agency or administrative law judge may

not base agency action that determines the

substantial interests of a party on an

unadopted rule. The administrative l aw

judge shall determine whether an agency

statement constitutes an unadopted rule.

§ 120.57(1)(e), Fla. Stat.

58 . These challenges to Specific Condition 1 were

litigated alongside the Section 120.57 Permit Challenges. Had

the requisite showings been made that Petitioners substantial

interests were affected by Original Specific Condition 1 and had

the condition been shown to meet the definition of a "rule" in

Section 120.52(16), Florida Statutes, the remedy called for by

Section 120.57(1)(e), Florida S tatutes, was achieved when the

Department changed Specific Condition 1 to require and ECL

rather than a Pre - project MHWL.

Specific Condition 5

5 9 . Petitioners have not demonstrated that their interests

will be substantially affected by Specific Condition 5.

60 . As a first step in showing that they are substantially

affected by Specific Condition 5, Petitioners must show that

their property will be used during the Western Destin Project.

61 . If they show that their property will be used by the

County d uring the beach restoration activity, then they must

show how they will be substantially affected if they are asked

for their authorization and any events that follow as the result

of their decision .

62 . The Sherrys and Mr. Donovan do not own property al ong

the shoreline that is within the Western Destin Project. The re

is no p otential for their property to be used for the Project.

There are no circumstances related to the Project , therefore,

w hen they will be asked for their authorization .

63 . The Oce ania Petitioners owned property along the

shoreline of the Project when the Draft Permit was issued. But

the shoreline adjacent to their property is now excluded

from the Project. The Oceania Petitioners offered no evidence

that their property in the gap between the two segments of the

beach to be restored would be used during the restoration.

64 . The MACLA Petitioners own property alo ng the shoreline

of the Project. Petitioners claim in their proposed recommended

order that "[t]he Western Destin Proje ct as designed and

approved in the Draft JCP contemplates that the private property

of Petitioners, MACLA, Hughes Trust and Kershaw will be used in

carrying out the project." Para. 50 of Petitioners' Proposed

Final Order at 19.

65 . A review of the Draft Permit indicat es that upland

property along the shoreline will be used to complete the

Project. There was no expert evidence, however, that explained

the actual mechanics and logistics of beach restoration and

whether or not all upland property along a s egment of beach to

be restored had to be used to construct the Project. Nor was

there evidence that if authorization was refused whether that

meant the Project could not go forward.

66 . On the assumption that the MACLA Petitioners' property

must be used for the Project to proceed, that showing alone is

not sufficient proof of standing . Okaloosa County is still

required to seek the authorization of the MACLA Petitioners .

T he MACLA Petitioners have the apparent right to refuse ( which

e ach profess they w i ll do ) . Being asked for authorization which

is refused can hardly be said to amount to their interests being

substantially affect ed .

67 . Specific Condition 5 contemplates satisfaction of the

condition if a court of competent jurisdiction rules that an

a uthorization is not required. On the state of this record,

however, it is speculative as to whether the County would sue

the MACLA Petitioners to obtain a judgment to that effect should

their property be needed for the Project and should they refuse

autho rity to the County to use it .

68 . Petitioners have failed to demonstrate any injury to

them caused by Specific Condition 5. None of the Petitioners

have proven that they have standing to seek a determination that

Specific Condition 5 is an Unadopted Rul e.

69 . In light of the rulings in this order on the standing

issues, there is no need to address the remaining issues related

to violations of Section 120.54(1)(a), Florida Statutes.

70 . Petitioners are not entitled to attorney ' s fees and

costs under S ection 120.595(4), Florida Statutes.

ORDER

The petitions in Case Nos. 10 - 5 348 RU, 10 - 6205RU, and 10 -

8197RU, are dismissed for lack of standing.

DONE AND ORDERED this 4th day of November, 2010, in

Tallahassee, Leon County, Florida.

S

DAVID M. MALONEY

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of th e

Division of Administrative Hearings

this 4th day of November , 2010.

COPIES FURNISHED :

D. Kent Safriet, Esquire

Hopping Green & Sams, P.A.

Post Office Box 6526

Tallahassee, Florida 32314

Kelly L. Russell, Esquire

Department of Environmental Protect ion

The Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

MiMi Drew, Secretary

Department of Environmental Protection

The Douglas Building

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

Tom Beaso n, General Counsel

Department of Environmental Protection

The Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

Lea Crandall, Agency Clerk

Department of Environmental Protection

The Douglas Building, Mail Stati on 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

Liz Cloud, Program Administrator

Administrative Code

Department of State

R.A. Gray Building, Suite 101

Tallahassee, Florida 32399

F. Scott Boyd, Executive Director and

General Counsel

Joint Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399 - 1300

NOTICE OF RIGHT OF JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

S tatutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice of appeal with the Clerk of the

Division of Administrative Hearings and a copy, accompanied by

filing fees prescribed by law, with the District Court of

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

the Appellate District where the party resides. The notice of

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

reviewed.