11-001563RP Metro Traffic School vs. Department Of Highway Safety And Motor Vehicles Status: Closed DOAH Final Order on Wednesday, September 7, 2011.

Summary: The challenged proposed rule impermissibly enlarges and modifies the provisions of the statute being implemented, and is arbitrary and capricious.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

METRO TRAFFIC SCHOOL, )

)

Petitioner, )

)

vs. ) Case No. 11 - 1563RP

)

DEPARTMENT OF HIGHWAY SAFETY )

AND MOTOR VEHICLES, )

)

Respondent. )

___________________________________)

SUMMARY FINAL ORDER

This case involves a challenge to a proposed rule and is

resolved upon consideration of cross motions for summary final

order filed by Petitioner, Metro Traffic School (Metro), and

Respondent, Department of Highway Safety and Motor Vehicles (the

Department).

APPEARANCES

For Petitioner: Amy W. Schrader , Esquire

Gray Robinson, P.A.

Post Office Box 11189

Tallahassee, Florida 32302

For Respondent: Judson M. Chapman, Esquire

Department of Highway Safety

and Motor Vehicles

2900 Apalachee Parkway, Room A - 432

Tallahassee, Florida 32399 - 0504

STATEMENT OF THE ISSUES 1 /

I. Whether Metro has standing in this case; and

II. Whether Florida Administrative Code Proposed R ule 15A -

10.009 is an invalid exercise of the Department's delegated

legislative authority within the meaning of s ection 120.52(8),

Florida Statutes. 2 /

PRELIMINARY STATEMENT

On July 19, 2011, a telephonic hearing was held on the

parties' cross motions for summary final order. During the

hearing, the parties agreed that the attachments to the cross

motions, including the entire public hearing record for the

proposed rule, together with the deposition of Dana Reiding

filed in this case, could be considered as the stipulated record

for purposes of ruling on the cross motions. The parties also

stipulated that a determination whether the challenged change to

the proposed rule was merely a technical change or a substantive

change was an issue that could be determined as a matter of law.

FINDINGS OF FACT

1. Private probation services providers are authorized by

section 948.15, Florida Statutes, to provide probation services

to persons who have been placed on probation by a county court

for certain misdemeanors, including misdemeanors in which the

use of a lcohol is a significant factor.

2. Driving under the influence programs (DUI programs) are

authorized by Florida law to provide substance abuse courses to

persons who have been arrested for driving under the influence.

The Department is responsible for the regulation and licensing

of all DUI programs in Florida. See § 322.292, Fla. Stat.

3. Metro is an entity licensed by the Department to

operate DUI programs.

4. Some private probation services providers or their

affiliates have an ownership interest in DUI programs.

5. Metro is not owned in whole or in part by a private

probation services provider or affiliate. There are, however,

DUI programs owned by private probation services providers

serving some of the same counties where Metro operates its D UI

programs.

6. In 2009, the Florida Legislature added subsection 5 to

se ction 322.292, providing:

(5) A private probation services provider

authorized under s. 948.15 may not refer

probationers to any DUI program owned in

whole or in part by that probat ion services

provider or its affiliates. The department

shall establish rules to administer this

subsection.

7. On August 13, 2010, the Department published the

following preliminary text of the proposed rule development in

Volume 32, Number 32, of the Florida Administrative Law Weekly:

THE PRELIMINARY TEXT OF THE PROPOSED RULE

DEVELOPMENT IS:

15A - 10.009 Program Jurisdiction.

(1) through (3) No change.

( 4) DUI programs who are also authorized as

a private probation services provider under

Section 9 48.15, F.S., shall not distribute a

list of DUI programs in their service area

or self - refer persons who are probationers

to any DUI program owned in whole or in part

by that private probation services provider

or its affiliates. The DUI program shall

doc ument that the probationer was advised of

their right to choose a licensed DUI

program.

8 . Following an August 31, 2010, rule development

workshop, on November 24, 2010, the Department published the

full text of the proposed rule in Volume 36, Number 47, of the

Florida Administrative Law Weekly in a Notice of Proposed Rule,

as follows:

THE FULL TEXT OF THE PROPOSED RULE IS:

15A - 10.009 Program Jurisdiction

(1) through (3) No change.

(4) DUI programs that are also authorized as

private probation services providers under

Section 948.15, F.S., shall not distribute a

list of DUI programs in their service area

or self - refer persons who are probationers

to any DUI program owned in whole or in part

by that private probation services provider

or its affiliates. The DUI program shall

document in writing, signed by the

probationer, prior to the commencement of

any services, that the probationer was

advised of their right to choose any

licensed DUI program that serves the county

of their residence, employment or school

attendance and that the probationer has not

been referred by the private probation

services provider to their DUI program. No

DUI program information will be visible in

any common areas of a private probation

services facility, including the probation

offices, hallways and any other area open to

clients. This includes all forms of media

including but not limited to: posters,

brochures, pamphlets , and signage.

9. The "purpose and effect" paragraph published with the

notice of proposed rule on November 24, 2010, provides:

PURPOSE AND EFFECT: The purpose of the

proposed rule action is to add a paragraph

to the current rule to prohibit DUI programs

which are also authorized as priva te

probation services providers from

distributing a list of DUI programs in their

service area or to self - refer persons who

are probationers to a DUI program owned in

whole or in part by that private probation

services provider or its affiliates; also

requ ires DUI programs to document that the

probationer was advised of their right to

choose a licensed DUI program.

10. On December 21, 2010, a public hearing was held on the

proposed rule. A transcript of that hearing is attached as

Exhibit A - 5 to the Depa rtment's motion for summary final order.

11. On March 4, 2011, the Department published a notice of

change in Volume 37, Number 9, of the Florida Administrative Law

Weekly, which provided:

Notice is hereby given that the following

changes have been made t o the proposed rule

in accordance with subparagraph

120.54(3)(d)1., F.S., published in Vol. 36,

No. 47, November 24, 2010 issue of the

Florida Administrative Weekly.

(1) through (3) No change.

(4) A DUI programs that are also authorized

as private probat ion services provider,

authorized providers under Section 948.15,

F.S., shall not distribute a list of DUI

programs in their service area or self - refer

persons who are probationers to any DUI

program owned in whole or in part by that

private probation serv ices provider or its

affiliates. The DUI program shall document

in writing, signed by the probationer, prior

to the commencement of any services, that

the probationer was advised of their right

to choose any licensed DUI program that

serves the county of their residence,

employment or school attendance and that the

probationer has not been referred by the

private probation services provider to their

DUI program. No advertising materials for a

DUI program , including posters, brochures,

pamphlets, or signs, shall information will

be visible in any common areas of a private

probation services facility, including the

probation offices, hallways and any other

area open to clients. Interior directional

and exterior business signs are allowed.

This includes all forms of media including

but not limited to: posters, brochures,

pamphlets and signage.

12. Under the proposed rule as changed, a private

probation services provider would be allowed to post interior

directional and exterior business si gns in its common areas for

DUI programs in which the private probation services provider

has an ownership interest. Non - affiliated DUI program materials

would not be allowed to be posted.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding. §§ 120.56(1) and (2), 120.569(1), and 120.57(1),

Fla. Stat.

STANDING

14. Section 120.56(2)(a) provides that "[a] substantially

affected person may seek an administrative determinati on of the

invalidity of a proposed rule by filing a petition seeking such

a determination with the division . . . within 20 days after the

date of publicati on of the notice required by

s. 120.54(3)(d)[the notice required for substantive changes to a

propos ed rule])." As noted in the Order Denying Motion to

Dismiss entered in this case on April 20, 2011, the petition

filed in this case on March 24, 2011, was timely filed within 20

days from the Notice of Change published March 4, 2011.

15. As the P etitione r challenging a proposed rule, Metro

"must establish both that application of the rule will result in

a 'real and sufficiently immediately injury in fact' and that

the alleged interest is arguably within the zone of interest to

be protected or regulated." See , e.g. , Fla. Bd. of Med. v. Fla.

Acad. of Cosmetic Surgery, Inc. , 808 So. 2d 243, 250 (Fla. 1st

DCA 2002) (discussing standing requirements for challenge to a

rule or proposed rule). As explained below, Metro has met its

burden of establishing its sta nding to bring this case.

16. The Department contends that Metro lacks standing

because Metro is not "substantially affected" by the proposed

rule. In support, the Department argues that Metro does not

provide private probation services and the only enti ties

"encompassed" by the proposed rule are those that provide both

DUI programs and private probation services. The Department

also argues that the March 4, 2011, published changes to the

proposed rule are non - substantive as to Metro and, thus, Metro

is not substantively affected by the proposed rule.

17. The Department's contention that Metro is not

substantially affected because the changes only affect programs

providing both a DUI program and private probation services

ignores the fact that one of the challenged changes to the

proposed rule provides an exception allowing interior

directional and exterior business signs for DUI programs owned

by private probation service providers. The challenged changes

do not provide for such signage for DUI programs , such as Metro,

that are not owned by private probation service providers. In

other words, the Department's argument fails to consider the

advantage that the proposed rule changes would give co - owned DUI

programs over Metro.

18. The Department's argumen t that the changes to the

proposed rule between the full text version published

November 24, 2010, and the changes published March 4, 2011, are

non - substantive as to Metro is also without merit. The first

line of the November 24, 2010, version prohibited only co - owned

DUI programs from distributing a list of DUI programs in their

service area, whereas the March 4, 2011, changes prohibit all

private probation providers from distributing lists of DUI

programs in their service area, whether or not the DUI pro grams

are owned by a private probation provider.

19. Similarly, the change which granted an exception for

directional and business signage for only co - owned DUI programs

is a substantive change over the original version, which would

have prohibited such signs. As a non - affiliated DUI program,

unlike its co - owned competitors, Metro does not have the benefit

of the exception.

20. In sum, the changes to the p roposed rule published on

March 4, 2011, were substantive changes that substantially

affected Metr o, and Metro has standing to challenge those

changes.

WHETHER THE PROPOSED RULE IS AN INVALID EXERCISE

OF THE DEPARTMENT'S DELEGATED LEGISLATIVE AUTHORITY

21. Section 120.56(2)(a), Florida Statutes, requires that

a petition challenging a proposed rule "m ust state with

particularity . . . the reasons that the proposed rule is an

invalid exercise of delegated legislative authority."

22. "Invalid exercise of delegated legislative authority"

is defined in sect ion 120.52(8) as follows:

ÐInvalid exercise of de legated legislative

authorityÑ means action that 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) T he 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.

A grant of rulemaking authority is

necessary but not sufficient to allow an

agency to adopt a rule; a specif ic 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 agencyÓs

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 rulemaking authority or

generally describing the powers and

functions of an agency shall be construed to

extend no further than implementing or

interpreting the specific powers and duties

conferred by the enabling statute.

23. The arguments raised by Metro against the proposed

rule implicate subsections (a)[failed to follow rulemaking

procedures], (b)[exceeded rulemaking authority], (c)[enlarges,

modifies, or contravenes law implemented], and (e)[ is arbitrary

or capricious], of section 120.52(8), quoted above.

Rulemaking Procedures

24. Metro contends that the Department made the challenged

changes without complying with section 120.54(3)(d)1, Florida

Statutes. That section requires that any substantive changes to

a proposed ru le must be supported by one of the following: the

record of public hearings on the rule; in response to written

material submitted within certain time frames; or in response to

a proposed objection by the Joint Administrative Procedures

Committee.

25. Spe cifically, Metro alleges that the change which

altered the proposed rule to apply to private probation service

providers instead of DUI programs, and the new language

providing for directional and informational signage exceptions

for co - owned DUI programs are substantive changes that are not

supported by the record of public hearings on the rule.

26. In response, the Department argues that the challenged

changes are not substantive, and that they are otherwise

supported by the record. As noted under the h eading "Standing,"

above, it has been determined that the challenged changes are

substantive. The change providing for exceptions for

directional and informational signage, however, is supported by

the record of the public hearing. See pages 7 - 12 of the public

hearing held December 20, 2010, on the proposed rule, attached

to the Department's Motion for Summary Final Order as Exhibit A -

5 (Public Hearing Transcript).

27. Record support for the change in the first line of the

proposed rule is less clear. T hat change substituted the term

"private probation providers" in place of "DUI programs that are

also authorized as private probation services providers" as the

entities that would be prohibited by the proposed rule from

distributing a list of DUI programs in their service area.

Despite lack of clarity, there was at least some discussion at

the Rule Hearing questioning the appropriateness of directing

the responsibilities and prohibitions under the proposed rule to

the DUI programs as opposed to the probat ion providers, as

follows:

MR . CHENES: I am sorry. I -- he was

referring, he was making reference to the

fact that the probation officers were

sending the clients and were asking them to

sign paperwork that it was, you know, being

done freely and volunt arily type, and I was

just clarifying that the rule that is being

proposed states that the DUI program would

be doing that, not the probation officer.

* * *

MR. FORREST: No, I guess I have stated

everything in writing. It is all there. I

do think it s hould be noted one of the --

one of the new lines in this rule, I think

it is a really good example of just how

flawed the direction is that we are trying

to approach this from, in that the first

line in the new rule, I don't know if it is

the first line, that says, DUI programs

cannot provide a list, when in actuality,

the list started as the first draft of this

rule. [3 /]

So the current version of this rule

literally, it is a contradiction to the

original draft.

I think we are going to have that same

exa ct problem if we get it going down the

direction of trying to keep writing what a

referral is.

Public Hearing Transcript, pp. 13 - 14.

28. Therefore, based upon the Public Hearing Transcript,

it is concluded that there is enough in the record to support

th e changes in the proposed rule that are challenged in this

proceeding.

Rulemaking Authority

29. Metro also argues that the Department exceeded its

statutory rulemaking authority by proposing a rule that

regulates private probation service providers. Metr o's argument

fails in view of a plain reading of s ection 322.292 . That

section clearly prohibits private probation services providers

from referring probationers to co - owned DUI programs, and

provides that the Department "shall establish rules to

administ er this subsection." See Finding of Fact 6, supra

(quoting § 322.292); see also § 120.52(17), Fla. Stat.

("'Rulemaking authority' means statutory language that

explicitly authorizes or requires an agency to adopt, develop,

establish, or otherwise create a ny statement coming within the

definition of the term 'rule.'").

Law Implemented

30. Section 120.52 (8)(c), quoted above, includes within

its definition of "invalid exercise of delegated legislative

authority" a rule that " enlarges, modifies, or contravenes the

specific provisions of law implemented."

31. Metro, in its petition and cross motion, argues that

the proposed rule enlarges and modifies section 322.292 because

it prohibits otherwise permissible activities that are not

within the scope o f the proscriptions contemplated by that

statute.

32. Specifically, Metro complains that "[t]he proposed

rule would require private probation services providers to

refrain from distributing a list of DUI programs in their

service area" even if they are no t affiliated with a DUI

program. Metro's Motion for Summary Final Order, pp. 8 - 9.

33. In response, the Department argues that when the

entire proposed rule is read in pari materia it is clear that it

is only intended to apply to providers that have an ow nership

interest in a DUI program. The Department further "acknowledges

that it only has authority over those [private probation service

providers] which also own in whole or in part a DUI program."

Department's Motion for Summary Judgment, p. 14, ¶ 34.

34. The first sentence of the proposed rule as changed

(also quoted in Finding of Fact 10, above) states:

A DUI programs that are also authorized as

private probation services provider,

authorized providers under Section 948.15,

F.S. , shall not distribute a list of DUI

programs in their service area or self - refer

persons who are probationers to any DUI

program owned in whole or in part by that

private probation services provider or its

affiliates.

35. The Department's contention tha t it has no authority

over non - affiliated probation services providers does not change

the plain meaning of the first clause of the first sentence,

quoted above. This clause unambiguously applies the prohibition

against distributing a list of DUI programs to all private

probation services providers, whether or not they have an

ownership interest in a DUI program. The second clause does not

change the meaning of the first.

36. Given the plain and unambiguous language in the change

that restricts even non - affiliated probation providers from

distributing lists of DUI programs, it is concluded that the

challenged language of the proposed rule impermissibly enlarges

and modifies the provisions of sect ion 322.292(5) .

37. In addition, Metro alleges that the pro posed rule's

restriction on placing advertising materials for a DUI program

in the probation provider's common areas also impermissibly

enlarges or modifies section 322.292(5). While the same

restriction was in the proposed rule prior to the notice of

cha nge, the original prohibition was in the context of DUI

programs that are also authorized as private probation services

providers, so that the restriction prior to the notice of change

appeared to only restrict advertising for affiliated DUI

programs. Con sidering the context after the notice of change,

the restriction now prohibits DUI programs, whether or not they

are affiliated with a probation services provider, from posting

any form of advertising or information regarding their services

in the office o f a probation services provider.

38. It is concluded that the change in the first clause of

the first sentence and the change in the context which

effectively expands the restriction against DUI program

advertising both constitute impermissible enlargemen ts of the

proscriptions of section 322.292(5), in violation of section

120.56(8)(c), Florida Statutes. See also last paragraph of

§ 120.56(8), Fla. Stat. (often referred to as the "flush left"

paragraph); see , e.g. , Fla. Elections Comm'n v. Blair , 52 So. 3d

9, 12, n. 2 (Fla. 1st DCA 2010), citing Bd. o f Trs. Of the

Internal Improvement Trust Fund v. Day Cr u ise Ass'n, Inc. , 794

So. 2d 696, 700 - 01 (Fla. 1st DCA 2001), for the proposition that

"agencies are creatures of statute with only those powers

conferred by statute and that statutory provisions delegating

rulemaking authority must be interpreted in light of the

significant restrictions on such authority contained in the

'flush left' paragraph in section 120.52(8)."

Arbitrary or Capricious

39. Metro furth er alleges that the rule is an invalid

exercise of delegated legislative authority because it is

arbitrary and capricious under section 120.52(8)(e), Florida

Statutes. That section, also quoted in paragraph 23 above,

provides: "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."

40. In addition to broadening the proposed rule to

restrict activities of non - affiliated DUI programs and private

probatio n services providers as discussed above, the notice of

change also added an exception which would allow private

probation services providers with an ownership interest in DUI

programs to place interior directional and exterior business

signs in their facil ities for their affiliated DUI programs.

This exception, Metro contends, makes the proposed rule

arbitrary and capricious.

41. As conceded by the Department's Assistant Deputy

Director for Motorist Services, under the exception, private

probation service s providers without an affiliation with a DUI

program could not post directional or exterior business signs

for DUI programs. Rather, only affiliated probation services

providers could post such signs for those DUI programs in which

they have an ownership interest. Deposition of Dana Reiding,

p. 33, attached to Metro's cross motion as Exhibit E (Depo).

42. Therefore, instead of prohibiting referral by

affiliated probation providers, the challenged change provides

an exception that, in essence, allows ref erral via directional

and business signs only in facilities of probation providers for

their affiliated DUI programs. Such an effect is inconsistent

with the Department's published Purpose and Effect, 4 / is contrary

to the prohibition against self - referral in section 322.292(5),

and is "not supported by logic." See § 120.52(8)(e), Fla. Stat.

(quoted above).

43. Moreover, the exception does not limit the number of

directional or business signs that a private provider can post

for its affiliated DUI program s. In addition to being contrary

to logic, such an effect is also irrational because it would

contravene provisions in the same proposed rule which restrict

any form of advertising materials for DUI programs.

44. In sum, as a matter of fact and law, the challenged

exception is arbitrary and capricious within the meaning of

section 120.52(8)(e). Agrico Chem. Co. v. DepÓt Envir. Reg. ,

365 So. 2d 759 (Fla. 1st DCA 1998); St. Joseph Land & Dev. Co. v.

Fla. DepÓt of Nat. Resources , 596 So. 2d 137 (Fla. 1st DCA

1992).

CONCLUSION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is:

ORDERED that the Motion for Summary Final Order filed by

Metro is Granted; the proposed rule 15A - 10.009(4), as set forth

in the notice of change, is determined to be an invalid exercise

of delegated legislative authority; and the Department's Motion

for Summary Final Order is Denied.

DONE AND EN TERED this 7 th day of September, 2011, in

Tallahassee, Leon County, Florida.

S

W. DAVID WA TKINS

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 the

Division of Administrative Hear ings

this 7 th day of September, 2011.

ENDNOTES

1 / The issues set forth under heading "Statement of the Issues"

are derived from the parties' cross motions for summary final

order.

2 / All references to the Florida Statutes are to the 2010

versions.

3 / Indeed, the first line of the preliminary draft of the

proposed rule published August 13, 2010, provided:

DUI programs who are also authorized as a

private probation services provider under

Section 948.15, F.S., shall not distribute a

list of DUI pr ograms in their service area .

. . .

4 / See Finding of Fact 9, supra .

COPIES FURNISHED:

Amy W. Schrader , Esqu ire

Gray Robinson, P.A.

Post Office Box 11189

Tallahassee, Florida 32302

Judson M. Chapman, Esquire

Department of Highway Safety

and Motor Vehicles

2900 Apalachee Parkway, Room A - 432

Tallahassee, Florida 32399 - 0504

Julie L. Jones, Executive Director

D epartment of Highway Safety

and Motor Vehicles

Neil Kirkman Building

2900 Apalachee Parkway

Tallahassee, Florida 32399 - 0635

Steve Hurm, General Counsel

Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building

2900 Apalachee Parkway

Tallahassee, Florida 32399 - 0635

Liz Cloud, Program Administrator

Administrative Code

Department of State

R. A. Gray Building, Ste. 101

Tallahassee, Florida 32399

Jesslyn Krouskroup , Acting Coordinator

Joint Admin istrative Proced ural Committee

Room 680, Pepper Building

111 West Madison Street

Tallahassee, Florida 32399 - 1400

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Summary

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 proceeding are

commenced by filing one copy of a Notice of Administrative

Appeal with the agency clerk of the Division of Administrative

Hearings and a second copy, accompan ied 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 Administrative

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

be reviewed.