11-002433RU North Star Associates, Llc, A Florida Limited Liability Company And Philip J. Stoddard, As Managing Member vs. Department Of Financial Services Status: Closed DOAH Final Order on Friday, July 1, 2011.

Summary: Summary Final Order issued finding that the challenged agency statement is not an unadopted rule and Petitioner was otherwise without standing to bring an action challenging the alleged unadopted rule.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NORTH STAR ASSOCIATES, LLC, A )

FLORIDA LIMITED LIABILITY )

COMPANY AND PHILIP J. STODDARD, )

AS MANAGING MEMBER, )

) Case No. 11 - 2433RU

Petitioner, )

)

vs. )

)

DEPARTMENT OF FINANCIAL )

SERVICES , )

)

Respondent. )

)

SUMMARY FINAL ORDER

A n administrative hearing was conducted in this case on

June 21, 2011 , in Tallahass e e , Florida, before

James H. Peterson, III, Administrative Law Judge with the

Divis ion of Administrative Hearings.

APPEARANCES

For Petitioner: Philip J. Stoddard

North Star Associates, LLC

258 Laguna Court

St. Augustine, Florida 32086

For Respondent: Richard T. Donelan, Jr. , Esquire

Paul C. Stadler, Jr., Esquire

Department of Financial Services

200 East Gaines Street

Tallahassee , Florida 32399 - 4247

STATEMENT OF THE ISSUE

W hether the Department of Financial Service s ' (Department

or Responde nt) statement that registrations as a claimant's

representative under section 717.1400, Florida Statutes, 1 / are

licenses subject to section 120.60(1), Florida Statutes, is an

unadopted rule that may be challenge d by Petitioner under

section 120.56(4).

PREL IMINARY STATEMENT

At the hearing, it was established that there were no

genuine issues of material fact, and that it was appropriate to

enter an order granting the Department's pending Motion to

Dismiss and for Summary Judgment (Department's Motion) as a

m atter of law . The ruling on the Department's Motion was

announced at the hearing, subject to being reduced to writing as

set forth below. In addition, Petitioner's Motion for Discovery

Sanctions was denied, and the Department withdrew its pending

request for attorney Ó s fees pursuant to section 120.569(2).

ORDER GRANTING DEPARTMENT'S MOTION

Upon consideration of Respondent's Motion, Petitioner's

response thereto, and the parties' arguments, it is Ordered that

Respondent's Motion is GRANTED on the following grounds:

1. In order to have standing to bring an action

challenging an agency statement as an unadopted rule, the person

bringing the action must be "substantially affected" by the

agency statement. To demonstrate that he is or will be

"substantially a ffected" by the alleged unadopted rule,

Petitioner "must establish both that application of the

[alleged] 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 p rotected 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).

At the administrative hearing, Petitioner conceded that

he had already successfully registered as a claimant's

representative with the Department , and that, under current law,

no further registration is required. Therefore , Petitioner ha s

no standing to bring the abov e - styled rule challenge becau se the

alleged rule will not result in a real or immediate injury to

Petitioner and Petitioner is not otherwise within the zone of

interest to be protected or regulated.

2. Even if Petitioner had standing to bring this action,

it is found, as a matter o f law, that the registration at issue

is a license within the meaning of the definition set forth in

section 120.52(10), which states:

"License" means a franchise, permit,

certification, registration, charter, or

similar form of authorization required by

law, but it does not include a license

required primarily for revenue purposes when

issuance of the license is merely a

ministerial act.

In other words, the challenged statement simply reiterates the

statutory definition of the term "license." As stated by the

First District Court of Appeal in State Bd. o f Admin. v .

Huberty , 46 So. 3d 1144, 1147 (Fla. 1st DCA 2010):

As we said in St. Francis Hospital, Inc. v.

Dep Ó t of HRS , 553 So. 2d 1351, 1354 (Fla.

1st DCA 1989) :

[A]n agency interpretation of a

statute which simply reiterates

the legislature's statutory

mandate and does not place upon

the statute an interpretation that

is not readily apparent from its

literal reading, nor in and of

itself purport to create certain

rights, or require compliance, or

to otherwise have the direct and

consistent effect of the law, is

not an unprom ulgated rule, and

actions based upon such an

interpretation are permissible

without requiring an agency to go

through rulemaking.

3. The registration at issue does not qualify for the

exception to the definition of a license because:

a. The registration is not required primarily for

"revenue purposes " as that term is used in the exception to the

definition of license. Petitioner argues that his "registration

is primarily for revenue because, by law, [R]espondent pays

locator fees directly to the locator by direct deposit into the

locator's bank account." In support of his argument, Petitioner

urges a broad definition of "revenue purposes" by using a

definition of the term "revenue" in Black's Law Dictionary , 1319

(6th ed. 1990) , which , in the first para graph of the definition,

defines revenue as "[t]he gross receipts of a business,

individual, government, or other reporting entity. " Petitioner

fails to recite, however, the next paragraph in th at definition ,

which states:

As applied to the income of a go vernment, a

broad and general term, including all public

moneys which the state collects and

receives, from whatever source and in

whatever manner.

Id. Further, Petitioner did not to point out the definition of

"revenue law or measure" found in the same edition of Black's

Law Dictionary , which states:

Any law which provides for the assessment

and collection of a tax to defray the

expenses of the government. Such

legislation is commonly referred to under

the general term "revenue measures" or

"revenue bil ls , " and those measures include

all laws by which the government provides

means for meeting its expenditures.

Id. Moreover, as pointed out by the Department, "Florida courts

have associated the phrase 'revenue purpose s ' with taxes. " See

Department's Exp lanation as to Why No Agreement was Reached on

the Stipulation filed June 16, 2011 , p. 7, ( citing Tamiami Trail

Tours, Inc. v. City of Orlando , 1 20 So. 2d 170, 172 (Fla.

1960) ) ; Sandstrom v. City of Ft. Lauderdale 133 So. 2d 755, 757

(Fla. 2d DCA 1961). Consistent with th ose case s and the other

definitions of revenue set from above that were not recited by

Petitioner, as well as the plain meaning of the statute, it is

found that "revenue purposes" as used in the exception to the

definition of a license me ans those types of licenses or

registrations, for example, automobile registrations, which are

issued on a ministerial basis and primarily raise revenue for

the government.

b. In addition, issuance of the license is not merely

a ministerial act . That is because the Department has the

statutory discretion in both the registration process as well as

on an ongoing basis to place either a registrant or applicant

for registration on probation and subject to conditions the

Department may specify, including perm anent restrictions or

conditions on the issuance or maintenance of the registration.

See § 717. 1322 , Fla. Stat.

4. In sum, the Department's statement that registrations

as a claimant's representative under section 717.1400 are

licenses subject to section 120.60(1), is not an unadopted rule,

but is rather reflective of the provisions in the statutory

definition of "license" found in section 120.52(10). Petitioner

does not have standing to challenge that statement under section

120.56(4).

THEREFORE, consist ent with the forgoing, it is further

ORDERED that the petition initiating this case is hereby

DISMISSED.

DONE AND ENTERED this 1st day of July , 2011 , in

Tallahassee, Leon County, Florida.

S

JAMES H. PETERSON, III

Administ rative 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 Hearings

this 1st day of July , 20 11 .

ENDNOTE

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

versions.

COPIES FURNISHED :

Paul C. Stadler, Jr., Esquire

Department of Financial Services

200 East Gaines Street

Tallahas see, Florida 32399 - 0333

Philip J. Stoddard

North Star Associates, LLC

258 Laguna Court

St. Augustine, Florida 32086

Julie Jones, Agency Clerk

Department of Financial Services

Division of Legal Services

200 East Gaines Street

Tallahassee, Florida 32 399 - 0390

Liz Cloud, Program Administrator

Department of State

R. A. Gray Building, Suite 101

500 South Bronough Street

Tallahassee, Florida 32399

Jesslyn Krouskrop, Executive Director

and General Counsel

Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32399 - 1300

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 1 20.68, Florida

Statutes. Review proceedings are gov erned 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, accompanied by filing fees prescri bed 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 reviewe d.