14-005334RU Harmony Environmental, Inc. vs. Department Of Business And Professional Regulation, Drugs, Devices And Cosmetics Program Status: Closed DOAH Final Order on Thursday, May 7, 2015.

Summary: Respondent's statements that prescription drugs retain their status as such after disposal as Uniform Pharmaceutical Waste substantially affected Petitioner and, as unpromulgated rules, violated section 120.54(1)(a).

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HARMONY ENVIRONMENTAL, INC.,

Petitioner,

vs. Ca se No. 14 - 5334RU

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION, DRUGS,

DEVICES AND COSMETICS PROGRAM,

Respondent.

_______________________________/

FINAL ORDER

A final hearing was held in this matter before Robert S.

Cohen, Administrative Law Judge with the Division of

Administrative Hearings, on December 8 , 2014, in Tallahassee,

Florida.

APPEARANCES

For Petitioner: Edwin A. Bay ó, Esquire

Grossman, Furlow and Bayó, LLC

2022 - 2 Raymond Diehl Road

Tallahassee, Florida 32308

For Respondent: Bart O. Moore, Esquire

Beth A. Miller, Esquire

Kathryn E. Price, Esquire

Division of Drugs, Devices, and Cosmetics

Department of Business and

Professional Regulation

1940 North Monroe Street , Suite 26A

Tallahassee, Florida 32 399

STATEMENT OF THE ISSUE S

Whether Petitioner has been substantially affected by agency

statements made by Respondent, and, if so, whether the statements

violate section 120.54(1)(a), Florida Statutes?

PRELIMINARY STATEMENT

Petitioner filed a Petition t o D etermine Invalidity of

Agency Statements Defined as Rules on November 13, 2014. An

Order of Assignment was entered, notifying the parties that the

undersigned was assigned as the administrative law judge (ALJ) on

the matter. A Notice of Hearing was is sued on November 17, 2014,

setting the matter for December 8, 2014. The parties

subsequently engaged in and exchanged discovery. On November 2 5 ,

2014, Respondent filed a Motion for More D efinite S tatement.

Petitioner filed a response to that motion on D ecember 1, 2014.

Thereafter, Respondent filed a Motion to Dismiss or, in the

Alternative, Motion for Summary Final Order, as well as a Motion

to Take Official Recognition, requesting the ALJ to take official

recognition of c hapter 499, Florida Statu tes ; F lorida

Administrative Code Chapter 61N ; and a Notice of Intent to D eny

Permit dated August 18, 2014, directed to Petitioner. On

December 4, 2014, Petitioner filed a Motion to Take Official

Recognition of Florida Administrative Code Rule 62 - 730.186;

21 C.F .R. pt. 1317; and an October 17, 2014 Ð Dear Practitioner Ñ

letter from the U.S. Drug Enforcement Administration (DEA). On

December 5, 2014, Respondent filed a Motion in Limine to Exclude

Evidence and T estimony (Motion in Limine) . Petitioner filed a

respon se to that motion on December 5, 2014. The parties

subsequently filed u nilateral p re - h earing s tatements.

The matter proceeded to hearing on December 8, 2014.

Respondent Ó s Motion for More Definite Statement was denied based

upon Petitioner Ó s response. Bo th Motions to Take Official

Recognition were granted. The Motion in Limine was denied, and

the ALJ reserved ruli n g on the Motion for Summary Final Order ,

notifying the parties that if he was still in doubt at the

conclusion of the hearing, he would reques t a memorandum related

to the summary final order. No memorandum was requested at the

conclusion of the hearing. The motion is denied.

At the hearing, Petitioner presented the testimony of two

witnesses , Reginald Dixon, Division Director and party

repres entative for Respondent; and Michelle Chambers, the unpaid

Director of Compliance and Regulatory Affairs and registered

agent for Petitioner. Ms. Chambers was accepted as an expert in

universal pharmaceutical waste and related state and federal

regulation s. Petitioner also offered eight exhibits, numbered 2

through 4 and 9 through 13 , all of which were admitted into

evidence , except for Exhibit 9 . Respondent presented the

testimony of two witnesses , Dram Vu, a d rug i nspector for

Respondent, and David Laven, a d rug i nspector for Respondent.

Both Dr. Vu and Mr. Laven were accepted as experts in pharmacy

and in conducting investigations under chapter 499 for

Respondent. Respondent offered four exhibits, all of which were

admitted into evidence.

A two - volume T ranscript of the hearing was filed with the

Division on December 22, 2014. The parties noted some errors in

the T ranscript and requested that the court reporter issue a

corrected transcript which was done . A Motion for Enlargement of

Time to Sub mit Proposed Final Order was filed by Respondent on

December 23, 2014, and Petitioner did not object. A corrected

transcript was filed on December 29, 2014. On December 31, 2014,

Respondent Ó s Motion for Enlargement of Time to Submit Proposed

Final Order was granted. Petitioner and Respondent filed their

proposed findings of fact and conclusions of law on January 8,

2015 .

References to statutes are to Florida Statutes (201 4 ) unless

otherwise noted.

FINDING S OF FACT

1. Petitioner, Harmony Environmenta l (Harmony) , is duly -

licensed as a Universal Waste T ransporter Facility (UWTF) with

the Florida Department of Environmental Protection (FDEP),

holding EPA ID No. FLR000202424. Additionally, Harmony is

registered as a Hazardous W aste Transporter by FDEP as well as

the U.S. Department of Transportation (USDOT); a Used Oil Handler

by FDEP; a Biomedical Waste Transporter by the Florida Department

of Health; and as a Waste Transporter by Broward and Miami - Dade

c ounties.

2. Respondent is the state department charged with

regulating drugs, devices, and cosmetics pursuant to

section 20.165 and chapter 499, Florida Statutes. Respondent

does not have jurisdiction over the permitting of universal waste

transporters or over Florida Administrative Code C hapter 62 - 73 0.

Respondent has not issued any permits or licenses to Petitioner.

3. On May 20, 2014, Respondent Ó s Inspector Dr. Tram Vu

inspected Petitioner. The Entry Notice and On - Site Inspection

Report was included as an exhibit to the Petition filed in this

matt er. It makes reference to the ÐinspectionÑ by Dr. Vu as one,

Ð conducted under Ch. 499.051, F.S., and Rule 61N - 1.019, F.A.C.,

to assess firm Ó s activities and compliance. Ñ Respondent admitted

the May 20 th inspection was conducted under the authority cited

in the report.

4. On July 16 and 17, 2014, Dr. Vu again inspected

Petitioner. A number of photographs were taken during the

inspection. The photographs depict two large white containers

referred to in the Petition and at the hearing as Ð yard super

sacks . Ñ Inspector Vu testified that the yard super sacks were

sealed and that none of the Ð prescription drugs Ñ photographed

were found outside of the sealed Universal Pharmaceutical W aste

(UPW) containers.

5. Dr. Vu subsequently requested Petitioner to

Ð volun tarily Ñ quarantine the super sacks and a black tote, and a

voluntary quarantine form was prepared and executed. The

voluntary quarantine form states that it is Ð an alternative to

the Florida Department of Business and Professional Regulation

( Ò DBPR Ó ) remo ving some or all of the products for examination and

sampling pursuant to Section 499.065(2), Florida Statutes. Ñ

6. Respondent issued a Notice of Intent to Deny (NOID) to

Petitioner on August 18, 2014, regarding its application for a

restricted drug distr ibutor/destruction permit. The NOID

concluded that Petitioner acted as a restricted drug

distributor/destruction establishment without a license. The

NOID cited rule 61N - 1.023(4), which provides that such a permit

is required for a person to take possess ion in Florida of a

prescription drug for the purpose of arranging for its

destruction.

7. When asked by Petitioner in an interrogatory , Ð Are there

any facts or circumstances that would cause the DDC to consider

that a prescription drug has become UPW and no longer subject to

its authority? If so, state or identify each and every such fact

or circumstance. Ñ Respondent answered , Ð No. The term Ò UPW Ó is a

term that is within the jurisdiction of another Florida state

agency, the Department of Environmental Protection ( DEP ) . A

prescription drug is no longer a prescription drug when the

nature of the prescription drug is altered or changed in a way

that the active ingredient which causes the prescription drug to

be a prescription drug is no longer active. Ñ

8. Reginald Dixon, the Director of the Division of Drugs,

Devices , and Cosmetics (DDC), acknowledged that in his two years

as Director, Respondent Ó s chapter 61N - 1 has not contain ed any

definition that addresses the difference between viable drugs and

non - vi able drugs and that it contains no reference to UPW.

9. Mr. Dixon further acknowledged that chapter 61N - 1 does

not contain the statement that Ð [a] prescription drug is no

longer a prescription drug when the nature of the prescription

drug is altered or ch anged in a way that the active ingredient

which causes the prescription drug to be a prescription drug is

no longer active. Ñ He further acknowledged that he is not aware

of any federal or Florida law, rule, or regulation that provides

the same or similar statement ; and that chapter 61N - 1 does not

contain any definition or explanation as to how the change or

alteration that may render the active ingredient inactive takes

place.

10. Respondent Ó s policy that a drug continues to be a

prescription drug until i ts nature is altered or changed so that

the active ingredient that makes it a prescription drug is no

longer active applies not only to Petitioner. Such policy would

apply to other entities engaged in a similar business, as well as

to pharmacies, drug who lesalers, and hospitals when considering

how to legally dispose of prescription drugs.

11. Respondent takes the position that the UPW rule Ð is not

a rule that belongs to DBPR Ñ ( HrÓg Tr. 62 ) ; that Respondent Ð does

not have any jurisdiction over the DEP rul es Ñ ( HrÓg Tr. 75 ) ; and

that Respondent does Ð not look at the DEP rules to determine or

use their determination of whether or not a drug is viable . . .

or nonviable Ñ ( HrÓg Tr. 75 ) . Ð To the extent that [the UPW] rule

talks about viable and nonviable pharma ceuticals, that Ó s not

something within our jurisdiction and we don Ó t deal with it Ñ

(HrÓg Tr. 78).

12. Respondent admitted that it is important for regulated

entities to know when the agency considered that a drug is no

longer under its jurisdiction. Resp ondent also admitted that if

other regulations exist that do not call prescription drugs

Ð prescription drugs Ñ anymore, but instead call them Ð solid waste,

universal pharmaceutical waste or hazardous waste, Ñ those

statutes and regulations may Ð possibly Ñ hav e a bearing on

chapter 499 and chapter 61N - 1 .

13. In response to Petitioner Ó s Request for Admissions,

Respondent claimed to be Ð without knowledge Ñ of whether the

hazardous waste program under the Federal Resource Conservation

Recovery Act (RCRA) establish ed a Ð cradle to grave Ñ system for

controlling hazardous waste; and whether pursuant to 40 C.F.R.

§ 272.501, the Federal EPA approved the hazardous waste

management program administered by the FDEP pursuant to

chapter 403, Florida Statutes. Moreover, Respo ndent was Ð without

knowledge Ñ of whether the U.S. Food and Drug Administration (FDA)

does not regulate drugs that have been discarded as hazardous or

pharmaceutical waste; and that the FDA does not regulate

generators or handlers of hazardous or pharmaceut ical waste.

14. Respondent also claimed to be Ð without knowledge Ñ that

some UPW is generated by hospitals during surgical procedures

when a vial containing a standard dose of medication is not fully

used because of the patient Ó s size or condition, with th e unused

dose Ð wasted Ñ by placing it in a sealed, properly labeled UPW

container; that hospitals that dispose of non - controlled and

non - viable drugs in a properly labeled UPW container pursuant to

r ule 62 - 730.186, do not routinely create a list or invento ry of

the drugs being wasted or placed in the container that includes

the name of the manufacturer, the name of the drug, the quantity,

lot number, expiration date, or any combination of these

elements ; and that hospitals wasting non - viable controlled

subs tances maintain a log that identifies the name and quantity

of the controlled substance wasted, but not the manufacturer, the

lot number, or the expiration date; and that such controlled

substance log complies with DEA regulations as well as

chapter 893, F lorida Statutes.

15. Mr. Dixon testified that the act of disposing of the

unused portion of a prescription drug in a UPW container at a

hospital that also contains sharps, broken glass, tissue, and

bloody gauzes could constitute the adulteration of that

p rescription drug. Further, Mr. Dixon testified that when

hospitals dispose of drugs in UPW containers they are Ð possibly Ñ

adulterating drugs, and when Petitioner picks up the UPW

container, Petitioner may likewise Ð possibly Ñ be holding

adulterated drugs.

16. Petitioner Ó s witness, Michelle Chambers, was accepted

as an expert witness on UPW and related regulations, both state

and federal. Although unpaid for her work due to being the

spouse of Petitioner Ó s owner , she is the compliance coordinator,

bookkeep er, and registered agent for Petitioner. Mrs. Chambers

trains drug wholesalers how to manage their UPW by directing them

to Ð utilize a return if they can get credit for the drug, but

that once a drug becomes waste it falls under the guidelines of

UPW and those drug wholesalers need to create a separate area

that can handle UPW containers. Ñ When discussing the process of

sending UPW to a reverse distributor regulated by Respondent,

Mrs. Chambers referred to the FDEP Ó s pharmaceutical waste

guidelines, which state :

O nly pharmaceuticals with a reasonable

expectation of credit can be sent to a

reverse distributor. Drop pills, non -

credible items, formulated mixtures, items

with patient Ó s names, and raw chemicals

cannot be sent to a reverse distributor for

credi t; thereafter, a waste determination is

required and the decision must be made to

manage this waste as hazardous waste or UPW

waste.

Mrs. Chambers stated she had knowledge of unexpired drugs, still

in the original packaging that were declared waste by t he

wholesaler. She asserted that drug wholesalers abandoned or

discarded the unexpired drugs in their original packaging because

Ð they couldn Ó t send it back to a reverse distributor to get

credit. There was just no value to it, whatsoever, so they

decide d to make that waste determination that this is waste,

UPW. Ñ

17. Mrs. Chambers stated that UPW labels are attached to

UPW containers in Petitioner Ó s facility, according to the FDEP

rule regarding UPW. These labels represent the characteristics

of the haz ardous waste and other waste inside those containers.

Some of the notations on the label refer to a substance,

material, or a chemical product that is a prescription drug. She

also testified that several documents may be created in the UPW

process, such as a hazardous - waste manifest and a bill of lading.

In records that a UPW handler is expected to maintain under FDEP

rules, a UPW handler is not required to have those records

contain the name of the drugs that are in the UPW containers, the

manufacturer Ó s information, or the expiration date of the drugs

in the UPW container. She asserted that P etitioner could not

reasonably create inventories of all the drugs inside a UPW

container because Ð some of the labels have been poured on by

other elements within the container; some are unidentifiable;

some are broken . . . it would be very difficult to create an

inventory. Ñ Based upon her audits of more than 200 hospitals,

Mrs. Chambers stated that if a hospital has a procedure to put

non - viable drugs in a UPW co ntainer, it is because they are

trained to do so. She testified that no hospital she has ever

audited has ever kept records that include drug names,

manufacturers, or expiration dates for anything they have placed

in the UPW containers . Petitioner picks up these containers and

brings them to its facility. A UPW handler can add waste to the

container, as well as consolidate those containers.

18. Mrs. Chambers also discussed consumer packaging under

rule 62 - 730.186 (4)(a) , which states :

Ð C onsumer packaging Ñ means the packaging that

surrounds and encloses a container , in a form

intended or suitable for a healthcare or

retail venue, or rejected during the

manufacture process as long as it is enclosed

in its bottle, jar, tube, amp o ule, or package

for final dis tribution to a healthcare or

retail venue.

Further, UPW handlers can conduct activities , including

disassembling packages containing several pharmaceuticals into

individual pharmaceuticals from consumer packaging.

19. In her experience in the auditing o f hospitals for UPW,

as well as with Petitioner, Mrs. Chambers stated that controlled

substances are put into UPW containers from time to time, yet

Petitioner has never been cited or received a notice of violation

from the DEA regarding the possession of a controlled substance.

To her knowledge, the DEA has never notified any UPW handler in

Florida of any violations for possessing controlled substances.

20. Dr. Vu conducts inspections and investigations pursuant

to chapter 499 , specifically investigating unlicensed activities

as well as inspecting facilities that are attempting to obtain a

DDC permit. Dr. Vu was tendered and accepted as an expert in

pharmacy and conducting inspections for Respondent pursuant to

chapter 499. She testified that during her inspection of

Petitioner on July 14, 2014, she pulled drugs from UPW containers

to inspect them. She admitted there were no prescription drugs

outside the UPW containers on Petitioner Ó s premises. She stated

that Petitioner Ó s agents or employees volunteer ed to open the UPW

containers for her inspection. The scant evidence Dr. Vu relied

upon that Petitioner had any controlled substances on the

premises was based upon documents she obtained from a third party

as well as from Petitioner. She admitted there was no evidence

of controlled substances on Petitioner Ó s premises.

21. While Dr. Vu stated she is able to recognize

prescription drugs when she sees them, she is not able to

recognize UPW since she is Ð not trained in universal

pharmaceutical waste. Ñ She also stated she is not able to

recognize a non - viable drug when she sees it. Dr. Vu has

received no training from Respondent on the opening of UPW

containers, and even though she has not been trained in UPW rules

and definitions, she strongly asserted tha t Petitioner Ð [c]learly

was in possession of prescription drugs, Ñ and that Petitioner had

no permit or authorization to possess prescription drugs. When

asked about her understanding of when a prescription drug ceases

to be a prescription drug, she replie d that Ð a prescription drug

is always a prescription drug unless it Ó s inactivated or loses

its drug ability Î - characteristics. Ñ Dr. Vu noted that this

understanding is not stated in chapter 61N - 1 or chapter 499.

22. David Laven, another drug i nspector f or Respondent, was

tendered and accepted as an expert in pharmacy and issues related

to the inspection for Respondent under chapter 499. He testified

that Petitioner is not allowed to possess prescription drugs

without a DDC permit. On cross - examination, however, he admitted

he had not read the rule on UPW, has no knowledge of EPA rules

and requirements, and that he is not trained to recognize a

non - viable drug. He testified that he considers a prescription

drug that is discarded in a UPW container stil l to be a

prescription drug because Ð there Ó s still a possibility, depending

on how that drug has been disposed of, the container may be

partially full Î - it can be a full container sometimes. Drugs

are thrown in a container for a number of reasons, doesn Ó t

necessarily mean that the drug is no longer viable or can be used

in any way. Ñ Regarding the definition of prescription drugs,

Mr. Laven stated that Ð [a] drug is no longer viable or useable if

it Ó s out of date, it Ó s been damaged in some way, compromised ,

mis - branded, [or] adulterated. Ñ

23. On October 6, 2014, Petitioner sent a Notice of

Unadopted Rules l etter to R espondent, stating that the conduct

and statements set forth above constitute unpromulgated rules and

that, according to section 120.595(4)( b), Florida Statutes, they

have 30 days to begin proposed rulemaking in order to rectify the

actions and statements made. Respondent did not begin proposed

rulemaking in that 30 - day period. Respondent presented no

evidence or testimony to establish that rulemaking was not

feasible or practicable.

CONCLUSIONS OF LAW

24 . The Division of Administrative Hearings has

jurisdiction over the subject matter and parties to this action

in accordance with sections 120.56(4), 120.569, and 120.57(1),

Florida Statutes.

25 . Section 120.56(4)(a) authorizes any person who is

substantially affected by an agency statement to seek an

administrative determination that the statement is actually a

rule whose existence violates section 120.54(1)(a) because the

agency has not for mally adopted the statement. Section

120.54(1)(a) declares that Ð [r]ulemaking is not a matter of

agency discretion Ñ and directs that Ð [e]ach agency statement

defined as a rule by s. 120.52 shall be adopted by the rulemaking

procedure provided by this sect ion as soon as feasible and

practicable. Ñ

26 . The statutory term for an informal rule - by - definition

is Ð unadopted rule, Ñ which is defined in section 120.52(20) to

mean Ð an agency statement that meets the definition of the term

Ò rule, Ó but that has not be en adopted pursuant to the

requirements of s. 120.54. Ñ

27 . Section 120.52(16) defines the term Ð rule Ñ to mean each

agency statement of general applicability that implements,

interprets, or prescribes law or policy or describes the

procedure or practice r equirements of an agency and includes any

form which imposes any requirement or solicits any information

not specifically required by statute or by an existing rule. The

term also includes the amendment or repeal of a rule. The

statutory definition exclu des several types of agency statement s

from its operation, but none of these exclusions is applicable

here.

28 . To be a rule, a statement of general applicability must

operate in the manner of a law. Thus, if the statement Ó s effect

is to create stabilit y and predictability within its field of

operation; if it treats all those with like cases equally; if it

requires affected persons to conform their behavior to a common

standard; or if it creates or extinguishes rights, privileges, or

entitlements, then t he statement is a rule. As the First

District Court of Appeal explained, the breadth of the definition

in s ection 120.52(1) indicates that the legislature intended the

term to cover a great variety of agency statements regardless of

how the agency designa tes them. Any agency statement is a rule

if it Ð purports in and of itself to create certain rights and

adversely affect others, Ñ State, Dep artment of Admin istration v.

Stevens , 344 So. 2d 290, 296 (Fla. 1st DCA 1977), or serves Ð by

[its] own effect to cre ate rights, or to require compliance, or

otherwise to have the direct and consistent effect of law. Ñ

McDonald v. Dep Ó t of Banking & Fin. , 346 So. 2d 569, 581 (Fla.

1st DCA 1977). State Dep Ó t of Admin. v. Harvey , 356 So. 2d 323,

325 (Fla. 1st DCA 1977); s ee also Jenkins v. State , 855 So. 2d

1219 (Fla. 1st DCA 2003); Amos v. Dep Ó t of Health &

Rehabilitative Servs. , 444 So. 2d 43, 46 (Fla. 1st DCA 1983).

29 . An agency statement is any declaration, expression, or

communication. It does not need to be in wri ting. See Dep Ó t of

High. Saf. & Motor Veh. v. Schluter , 705 So. 2d 81, 84 (Fla. 1st

DCA 1997). To be a rule, however, the statement or expression

must be an Ð agency statement, Ñ that is, a statement which

reflects the agency Ó s position with regard to law or policy.

Therefore, the offhand comment of an agency employee, without

more, is not an Ð agency statement Ñ ; rather, the statement must be

Ð attributable to [the agency Ó s] collegial head . . . or some duly

authorized delegate. Ñ Id . at 87 (Benton, J., conc urring and

dissenting); see also , State, Dep Ó t of Admin. v. Stevens , 344 So.

2d 290, 296 (Fla. 1st DCA 1977) (The procedures at issue were

Ð issued by the agency head for implementation by subordinates

with little or no room for discretionary modification. Ñ ).

Further, a statement made in error should not ordinarily

constitute a rule, unless the agency has actually enforced or

implemented the allegedly mistaken statement (in which case it

would cease being an erroneous statement, though it might have

been su ch originally). See Filippi v. Dep Ó t of Educ. , Case

No. 07 - 4783RU, 2008 Fla. Div. Adm. Hear. LEXIS 700 (Fla. DOAH

June 20, 2008).

30 . Because the definition of the term Ð rule Ñ expressly

includes statements of general applicability that implement or

inte rpret law, an agency Ó s interpretation of a statute that gives

the statute a meaning not readily apparent from its literal

reading and purports to create rights, require compliance, or

otherwise have the direct and consistent effect of law, is a

rule, but o ne which simply reiterates a statutory mandate is not.

See State Bd. of Admin. v. Huberty , 46 So. 3d 1144, 1147 (Fla.

1st DCA 2010); Beverly Enterprises - Florida, Inc. v. Dep Ó t of

Health & Rehabilitative Servs. , 573 So. 2d 19, 22 (Fla. 1st DCA

1990); St. F rancis Hosp., Inc. v. Dep Ó t of Health &

Rehabilitative Servs. , 553 So. 2d 1351, 1354 (Fla. 1st DCA 1989).

31 . A statement which, by its terms, is limited to a

particular person or singular factual situation is not generally

applicable, nor is one whose a pplicability depends on the

circumstances. Such ad hoc directives are orders, not rules. By

contrast, Ð general applicability Ñ requires that the scope of the

statement -- its field of operation -- be sufficiently

encompassing as to constitute a principle; there must be, in

other words, a comprehensiveness to the statement, which

distinguishes the statement from the more narrowly focused,

individualized orders that agencies routinely issue in

determining the substantial interests of individual persons. A

g enerally applicable statement purports to affect, not just a

single person or singular situations, but a category or class of

persons or activities. See McCarthy v. Dep Ó t of Ins. , 479 So. 2d

135 (Fla. 2d DCA 1985) (letter prescribing Ð categoric

requiremen ts Ñ for certification as a fire safety inspector was a

rule).

32 . To be generally applicable, a statement need not apply

universally to every person or activity within the agency Ó s

jurisdiction. It is sufficient, rather, that the statement apply

uniform ly to a class of persons or activities over which the

agency may properly exercise authority. See Schluter , 705 So. 2d

at 83 (policies that established procedures pertaining to police

officers under investigation were said to apply uniformly to all

police officers and thus to constitute statements of general

applicability); see also Disability Support Serv., Inc. v. Dep Ó t

of Child. & Fams. , Case No. 97 - 5104RU, 1997 Fla. Div. Adm. Hear.

LEXIS 5331, *11 (Fla. DOAH June 4, 1997) ( Ð [The agency Ó s]

arguments equ ate generally applicable with universally

applicable. It is unnecessary for Petitioner to show that the

[statements] apply to all parties contracting with [the agency]

for the provision of any sort of service or product subject to

Medicaid reimbursement. It is enough to show that the

[statements] are generally applicable to classes of providers. Ñ ).

33 . On the other hand, if the class of persons or

activities is too narrow, a statement pertaining solely to that

category might be considered not Ð generally applicable. Ñ For

example, in Agency for Health Care Administration v. Custom

Mobility, Inc. , 995 So. 2d 984 (Fla. 1st DCA 2008), it was

alleged that AHCA Ó s statistical formula for cluster sampling,

which the agency used in some cases to calculate Medicai d

overpayments, was an unadopted rule. The court found, however,

that the formula was not a statement of general applicability

because it did not apply to all Medicaid providers, or even to

all providers being audited, but rather only to some of the

provi ders being audited. Id. at 986. The category of Ð all

providers being audited using cluster sampling Ñ -- which

comprised about ten percent of all auditees -- was too specific

to support a finding of general applicability.

34 . If in challenging an allege d unadopted rule the

petitioner proves at hearing that the agency statement is a rule,

the agency then has the burden of overcoming the presumptions

that rulemaking was both feasible and practicable.

35 . Section 120.54(1)(a)1. provides as follows:

Rulem aking shall be presumed feasible unless

the agency proves that:

a. The agency has not had sufficient time to

acquire the knowledge and experience

reasonably necessary to address a statement

by rulemaking; or

b. Related matters are not sufficiently

res olved to enable the agency to address a

statement by rulemaking.

In this context, therefore, Ð feasibility Ñ is essentially a

ripeness concern. What the agency must show is that the time to

make a rule has not yet come.

3 6. Section 120.54(1)(a)2. provi des as follows:

Rulemaking shall be presumed practicable to

the extent necessary to provide fair notice

to affected persons of relevant agency

procedures and applicable principles,

criteria, or standards for agency decisions

unless the agency proves that:

a. Detail or precision in the establishment

of principles, criteria, or standards for

agency decisions is not reasonable under the

circumstances; or

b. The particular questions addressed are of

such a narrow scope that more specific

resolution of the matter is impractical

outside of an adjudication to determine the

substantial interests of a party based on

individual circumstances.

37 . Section 120.56(4)(c) authorizes the ALJ to enter a

final order determining that all or part of a challenged

stateme nt violates section 120.54(1)(a). The ALJ is not

authorized to decide, however, whether the statement is an

invalid exercise of delegated legislative authority as defined in

section 120.52(8)(b) through (f). Thus, in a section 120.56(4)

proceeding, it is not necessary or even appropriate for the ALJ

to decide whether the unadopted rule exceeds the agency Ó s grant

of rulemaking authority, for example, or whether it enlarges,

modifies, or contravenes the specific provisions of law

implemented, or is otherwis e Ð substantively Ñ an invalid exercise

of delegated legislative authority.

38 . Section 120.56(4) is forward - looking in its approach.

It is designed to prevent future or recurring agency action based

on an unadopted rule, not to provide relief from final agency

action that has already occurred. Thus, if a violation of

section 120.54(1)(a) is found, the agency must, pursuant to

section 120.56(4)(d), Ð immediately discontinue all reliance upon

the statement or any substantially similar statement as a basis

for agency action. Ñ See , e.g. , Ag ency for Health Care Admin. v.

HHCI Ltd. , 865 So. 2d 593, 596 (Fla. 1st DCA 2004).

39 . In order for Petitioner to bring a rule challenge,

Petitioner must have standing. In administrative proceedings,

standing is a matt er of subject matter jurisdiction. Abbott

Labs. v. Mylan Pharms., Inc. , 15 So. 3d 642, 651 n.2 (Fla. 1st

DCA 2009). In order t o have standing to challenge an agency

statement defined as a rule in a proceeding before an

administrative law judge, a person must be Ð substantially

affected Ñ by the statement in question. § 120.56(4)(a), Fla.

Stat. ( Ð Any person substantially affected by an agency statement

may seek an administrative determination that the statement

violates s. 120.54(1)(a). Ñ ).

40 . Generally sp eaking, the petitioner must show that he or

she will suffer an immediate Ð injury in fact Ñ within the Ð zone of

interest Ñ protected by the statute the challenged unadopted rule

is implementing or by other related statutes. See , e.g. , Fla.

Medical Ass Ó n, Inc . v. Dep Ó t of Prof Ó l Reg. , 426 So. 2d 1112,

1114 (Fla. 1st DCA 1983). In NAACP, Inc. v. Fl orid a Board of

Regents , 863 So. 2d 294, 300 (Fla. 2003), however, the Florida

Supreme Court held that student members of the NAACP who were

genuine prospective candi dates for admission to a state

university were substantially affected by rules which eliminated

certain affirmative action policies; thus, they had standing to

challenge these rules without showing Ð immediate and actual

harm , Ñ such as the rejection of an a pplication for admission.

41 . There is Ð a difference between the concept of

Ò substantially affected Ó under section 120.56(1), and

Ò substantial interests Ó under section 120.57(1). Ñ Dep Ó t of

Prof Ó l Reg., Bd. of Dentistry v. Fla. Dental Hygienist Ass Ó n , 6 12

So. 2d 646, 651 (Fla. 1st DCA 1993). Thus, for example,

Ð decisions in licensing and permitting cases[, which] have made

it clear that a claim of standing by third parties based solely

upon economic interests is not sufficient unless the permitting

or l icensing statute itself contemplates consideration of such

interests, or unless standing is conferred by rule, statute, or

based on constitutional grounds[,] Ñ are not controlling in

actions brought under section 120.56. Id. ; see also Cole Vision

Corp. v. Dep Ó t of Bus. & Prof Ó l Reg. , 688 So. 2d 404, 407 (Fla.

1st DCA 1997) ( Ð [T]his court has recognized that a less demanding

standard applies in a rule challenge proceeding than in an action

at law, and that the standard differs from the Ò substantial

interest Ó standard of a licensure proceeding. Ñ ).

42. Petitioner has the burden of proving, by a

preponderance of the evidence, that the challenged statement or

policy has the effect of a rule. Goodman v. Dep Ó t of Banking &

Fin. , Case No. 00 - 4920RU (Fla. DOAH Ja n. 17, 2001). Under

section 120.56(4)(b), once Petitioner has met its burden of

proof, the burden shifts to the agency to prove that the

rulemaking is not feasible or practicable under section

120.54(1)(a). For the reasons set forth below, Petitioner has

proved its standing to bring this challenge to what it describes

as unpromulgated rules by Respondent , and has proved that the

agency statements complained of herein constitute unpromulgated

rules . Finally, Respondent has failed to prove that rulemaking

was neither feasible nor practical.

43. As part of its broad jurisdiction, FDEP regulates the

activities of generators and transporters of hazardous waste

under chapter 62 - 730. These rules incorporate by reference

federal regulations promulgated by the U.S. Department of

Environmental Protection (USDEP), found at 40 C.F.R. pt. 260.

The federal rules provide requirements for hazardous waste

identification, classification, generation, management, and

disposal. 40 C.F.R. § 261(2)(b) provides that materia ls are

solid waste if they are abandoned by being : 1) disposed of;

2) burned or incinerated; or 3) accumulated, stored, or treated

(but not recycled) before, or in lieu of, being abandoned by

being disposed of, burned, or incinerated.

44. FDEP rule 62 - 730.186 is entitled Ð Universal

Pharmaceutical Waste Ñ (UPW). The UPW rule provides comprehensive

regulations for UPW handlers, including training of personnel.

UPW must be contained in appropriately labeled closed containers.

Records must be created and maintained which allow other UPW

handlers to make knowledgeable decisions about the safe handling

or proper disposal of the UPW. Petitioner is prohibited from

sending or taking UPW to a place other than to another UPW

handler or an approved reverse distri butor; a destination

facility as defined in 40 C.F.R. § 273.9; or a foreign

destination in accordance with the requirements of the rule.

45. Petitioner and other UPW handlers must retain records

of any shipment of UPW at their place of business for at l east

three years from the date of shipment. The record can be a

written receipt, manifest, bill of lading, or other written

documentation , which must include: a) The name and address of

the handler, reverse distributor, destination facility, or

foreign d estination to which the UPW w as sent; b) The quantity of

UPW sent; and c) The date the shipment of UPW left the handler Ó s

facility.

46. Rule 62 - 730.186 cites extensively to the applicable

federal rules and is intended to ensure that Petitioner and other

UPW handlers comply with both the FDEP and USDEP requirements.

47. The UPW rule defines Ð viable Ñ and Ð non - viable Ñ

pharmaceuticals. A Ð viable Ñ pharmaceutical is one that can be

sold ; returned to the manufacturer, wholesaler, or reverse

distributor with a reasonable expectation of credit ; or donated

to a charitable organization meeting the definition in the

Internal Revenue Code and permitted in accordance with

chapter 61N - 1.

48. A non - viable pharmaceutical is defined by

r ule 62 - 730.186(4)(i):

Ð Non - v iable Ñ means a pharmaceutical that

cannot be sold, returned to the manufacturer,

wholesaler or reverse distributor with a

reasonable expectation of credit, or donated

to a charitable organization.

Pharmaceuticals that are obviously Ð waste -

like Ñ , such as p artial intravenous

formulations; partial vials used in the

preparation of intravenous (IV) formulations;

outdated samples; other outdated items

repackaged at the pharmacy; partial vials or

vials used on the unit and not emptied (such

as insulin and epineph rine dispensing

devices); partial ointments, creams and

lotions; partial inhalants; partial

containers that are not empty as defined in

40 CFR 261.7 [as adopted in subsection 62 -

730.030(1), F.A.C.]; patient Ó s personal

medications that have been left at the

hospital; filled finished products that are

rejected during the manufacturing process, so

long as they are in their consumer package

(such as bottle, jar, tube, or ampule), do

not support a reasonable expectation of

credit and therefore are non - viable

pha rmaceuticals.

49. Rule 62 - 730.186 (4) (e) provides:

Ð Hazardous waste pharmaceutical Ñ means a

Ð non - viable Ñ Ð pharmaceutical Ñ [as defined in

paragraphs 62 - 730.186(4)(i) and 62 -

730.186(4)(h), F.A.C., respectively] that

exhibits a characteristic as described in 40

CFR Part 261, Subpart C or is listed

hazardous waste pursuant to 40 CFR Part 261,

Subpart D. If the waste formulation includes

a commercial chemical product listed in

Subpart D as the sole active ingredient, then

the entire formulation is considered a

hazardous waste pharmaceutical, unless

excluded by 40 CFR 261.3(g). A

pharmaceutical becomes a waste when it is no

longer Ð viable Ñ [as defined in paragraph 62 -

730.186(4)(n), F.A.C.]; when a decision is

made to discard the pharmaceutical; or when

the phar maceutical is abandoned as described

in 40 CFR 261.2(b). A pharmaceutical does

not meet the definition of a Ð solid waste Ñ

under 40 CFR 261.2 and is considered product

as long as it is viable, a decision to

discard it has not been made, and it is not

aband oned as described in 40 CFR 261.2(b).

Pharmaceuticals that are produced by a

pharmaceutical manufacturer without

reasonable expectation of sale, returned or

delivered without a reasonable expectation of

credit to a manufacturer, wholesaler, reverse

distri butor or any type of waste broker, are

non - viable and are discarded. Once a

decision has been made to discard a viable

pharmaceutical, it becomes non - viable. Non -

viable pharmaceuticals that are hazardous

waste may be handled as universal waste under

this rule. 40 CFR Part 261 and all sections

thereof as cited in this paragraph have been

adopted by reference as state regulations in

subsection 62 - 730.030(1), F.A.C.

50. Rule 62 - 730.186 (4) (j) defines Ð pharmaceutical reverse

distribution system Ñ as the esta blished practice of shipping

expired or other unusable prescription drugs from pharmacies,

medical practitioners, over - the - counter pharmaceutical retailers,

and pharmaceutical wholesalers to pharmaceutical reverse

distributors and then to manufacturers wit h the intent of

receiving credit. Reverse distributors are regulated by

Respondent. They must obtain a permit and are subject to Ð audit

trail Ñ documentation requirements under chapter 61N - 1. As a part

of the audit trail, their records must identify at a minimum the

name of the prescription drug product and whether it is a

prescription drug sample, the manufacturer, and the quantity for

each prescription drug removed from the establishment.

Petitioner does not handle any viable drugs for credit or

destru ction. Petitioner only handles UPW and arranges for UPW Ó s

disposal.

51. Petitioner has established with particularity

statements and conduct by Respondent that constitute an

unpromulgated rule. Respondent asserts, through its expert

inspectors , that i t has jurisdiction over prescription drugs that

have been abandoned and meet the definitions of Ð solid waste Ñ and

Ð non - viable pharmaceuticals, Ñ and have been legally committed to

the UPW process in compliance with state and federal rules and

regulations. Respondent has accomplished this by deeming all

prescription drugs to continue to be prescription drugs under its

jurisdiction until Ð the nature of the prescription drug is

altered or changed in a way that the active ingredient which

causes the prescriptio n drug to be a prescription drug is no

longer active. Ñ Respondent admits that its rules do not contain

any similar statement, nor do they contain any definition that

addresses how the change or alteration that renders the active

ingredient inactive takes place. Respondent Ó s rules do not

address the difference between viable and non - viable drugs, nor

contain any reference to UPW.

52. Respondent has applied its unpromulgated rule to

interpret the definition of Ð prescription drug Ñ in section

499.003(43) a nd, by doing so, appl ies every requirement and

definition applicable under chapter 499 to Petitioner. Based

upon the unpromulgated rule, R espondent inspected Petitioner,

requested Ð audit trail Ñ documentation applicable to drug

wholesalers, and forced the quarantine of non - viable

pharmaceuticals that had been legally discarded and committed to

the UPW process in compliance with FDEP and USDEP rules and

regulations that govern the process. Respondent acknowledge d

this unpromulgated rule applies not only to Petitioner, but to

other UPW handlers, pharmacies, drug wholesalers, and hospitals

when considering how to legally dispose of prescription drugs.

Petitioner has proven it is substantially affected by the

unpromulgated rule and has standing to initiate thi s challenge.

53. Section 499.002 provides, in part:

(1) This part is intended to:

(a) Safeguard the public health and promote

the public welfare by protecting the public

from injury by product use and by

merchandising deceit involving drugs,

devices, and cosmetics.

(b) Provide uniform legislation to be

administered so far as practicable in

conformity with the provisions of, and

regulations issued under the authority of,

the Federal Food, Drug, and Cosmetic Act and

that portion of the Federal Trade Com mission

Act which expressly prohibits the false

advertisement of drugs, devices, and

cosmetics.

(c) Promote thereby uniformity of such state

and federal laws, and their administration

and enforcement, throughout the United

States.

54. Respondent admits it is unaware of any federal or

Florida law, rule, or regulation similar to its unpromulgated

rule, and admits it is without knowledge as to state and federal

hazardous waste regulations. Respondent admits it is without

knowledge as to how hospitals gener ate UPW or how partially used

drugs are Ð wasted Ñ during surgical procedures by being discarded

into a sealed and properly labeled UPW container. Respondent Ó s

unpromulgated rule requires the creation of audit trail documents

that are not required to be cre ated during the UPW process and

that could not be reasonably created after the fact by

Petitioner.

55. Respondent agrees it is important for regulated

entities to know when it considers a drug is no longer under its

jurisdiction, and that rules and regula tions from other state and

federal agencies that address solid waste and UPW may Ð possibly Ñ

have a bearing on chapter 499 and chapter 61N - 1. The application

of the UPW rule is more than Ð possibly Ñ relevant here.

Respondent has been aware of the UPW rule for years, yet

considers it a rule they need not Ð look at Ñ or Ð deal with. Ñ

Respondent Ó s inspectors, experts in pharmaceuticals, should at

least have a working knowledge of the UPW rule in order to know

in what circumstances and to which entities it applie s. Not

being trained in UPW or to recognize Ð non - viable drugs Ñ is not a

sufficient excuse for expert investigators to raise when

attempting to regulate activity not within their agency Ó s

jurisdiction.

56. Section 499.006(2) states that a drug is consider ed

adulterated Ð [i]f it has been produced, prepared, packed, or held

under conditions whereby it could have been contaminated with

filth or rendered injurious to health. Ñ Respondent Ó s

unpromulgated rule produces the illogical result of considering

hospita ls discarding wasted or non - viable drugs in a sealed and

properly labeled UPW container as Ð possibly Ñ adulterating drugs,

and that licensed UPW handlers may Ð possibly Ñ be holding

adulterated drugs, thereby subjecting them to possible criminal

penalties und er section 499.0051(12).

57. By the statements it made which have been deemed by the

undersigned to be unpromulgated rules, Respondent mistakenly

attempted to expand its jurisdiction to include UPW that is

regulated by both the FDEP and the USDEP. It did this by

determining that drugs contained in UPW might still be considered

viable drugs for purposes of its agency regulation under

chapter 499. I ts attempt to expand its jurisdiction to include

UPW in its definitions of Ðprescription drugsÑ or Ðadulterat ed

drugsÑ was misplaced.

58. Petitioner has met its burden of proof in this

proceeding. The statements by Respondent violate

section 120.54(1)(a) and constitute an unpromulgated rule .

Respondent relies on the unpromulgated rule to assert

jurisdiction an d control over UPW in a manner that confers

standing on Petitioner in this proceeding .

5 9 . In a proceeding brought pursuant to section 120.56(4)

to determine a violation of section 120.54(1)(a), if the ALJ

issue s a final order determining that all or part of an agency

statement constitutes an unadopted rule, the agency must

Ð immediately discontinue all reliance upon the statement or any

substantially similar statement as a basis for agency action. Ñ

§ 120.56(4)(d), Fla. Stat.

60 . Pursuant to section 120.5 95(4)( a ) , when an :

[A] dministrative law judge determines

that . . . an agency statement violates

s. 120.54(1)(a) . . . a[n] . . . order shall

be entered against the agency for reasonable

costs and reasonable attorneyÓs fees, unless

the agency demonstrate s that the statement is

required by the Federal Government to

implement or retain a delegated or approved

program or to meet a condition to receipt of

federal funds.

Respondent has not made the demonstration required to avoid an

order of attorneyÓs fees and costs. Reasonable attorney Ós fees

and costs, to be determined, therefore are hereby entered against

Respondent .

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is ORDERED that the conduct and statements by Respondent

constitute u npromulgated rule s and Respondent shall pay

PetitionerÓs reasonable attorneyÓs fees and costs .

DONE AND ORDERED this 2 6 th day of February , 2015 , in

Tallahassee, Leon County, Florida.

S

ROBERT S. COHEN

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 Hearings

this 2 6 th day of February , 20 15 .

COPIES FURNISHED:

Edwin A. Bay ó , Esquire

Grossman, Furlow and Bayó, LLC

2022 - 2 Raymond Diehl Road

Tallahassee, Florida 32308

(eServed)

Bart O. Moore, Esquire

Beth A. Miller, Esquire

Kathryn E. Price, Esquire

Division of Drugs, Devices, and Cosmeti cs

Department of Business and

Professional Regulation

1940 North Monroe Street , Suite 26A

Tallahassee, Florida 32399

(eServed)

Ken Lawson, Secretary

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallaha ssee, Florida 32399

(eServed)

William N. Spicola , General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

Reginald D. Dixon, Executive Director

Division of Drug s, Devices, and Co s metics

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

Ernest Reddick, Chief

Alexandra Nam

Department of State

R. A. Gray Building

500 South Bronough S treet

Tallahassee, Florida 32399 - 0250

(eServed)

Ken Plante, Coordinator

Joint Administrative Procedures Committee

Room 680, Pepper Building

111 West Madison Street

Tallahassee, Florida 32399 - 1400

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party w ho 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 o riginal

notice of administrative appeal with the agency clerk of the

Division of Administrative Hearings within 30 days of rendition

of the order to be reviewed, and a copy of the notice,

accompanied by any filing fees prescribed by law, with the clerk

of the District Court of Appeal in the appellate district where

the agency maintains its headquarters or where a party resides or

as otherwise provided by law.