15-004359RP North Florida Horsemen&Apos;S Association, Inc. vs. Department Of Business And Professional Regulation, Division Of Pari-Mutuel Wagering Status: Closed DOAH Final Order on Thursday, December 17, 2015.

Summary: Proposed rules 61D-2.024 & 2.025 (the "track" rules) are not invalid exercises of delegated legislative authority. Proposed rules 61D-2.028 (the "jockey" rules) & 61D-2.029 (the "publication" rule) are invalid exercises of delegated legislative authority.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NORTH FLORIDA HORSEMEN ÓS

ASSOCIATION, INC. ,

Petitioner ,

vs. Case No. 1 5 - 4359RP

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION ,

DIVISION OF PARI - MUTUEL

WAGERING ,

Respondent ,

and

FLORIDA QUARTER HORSE RACING

ASSOCIATION, INC. ,

Intervenor.

/

FINAL ORDER

A final hearing was conducted in this case on December 17,

2015 , in Tallahassee, Flo rida, before E. Gary Early, an

administrative law j udge with the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Donna E. Blanton , Esquire

Angela D. Miles , Esquire

Radey Law Firm , P.A.

301 South Bronough Street , Suite 200

Tallahassee, Florida 32301

For Respondent: W i lliam D. Hall , Esquire

Caitlin R. Mawn , Esquire

Department of B usiness and

P rofessional Regulation

Division of Pari - Mutuel Wagering

1940 North Monroe Stree t , Suite 40

Tallahassee, Florida 32399

For Intervenor: Michael John Barry, E squire

J. Stephen Menton , Esquire

Rutledge Ecenia, P.A.

119 South Monroe Street , Suite 202

Tallahassee, Florida 32301

STATEMENT OF THE ISSUES

The issue s for disposition in this case are whet her

proposed rules 61D - 2.024(5); 61D - 2.025(1), (2), (4), (7), and

(8)(a ); 61D - 2.028(2)(a) - (d), (6), (7), and (8) ; and 61D - 2.029

are invalid exercises of delegated legislative authority as

defined in section 120.52(8), Florida Statutes.

PRELIMINARY STATEMENT

On July 30, 2015, Petitioner , North Florida Ho rsemenÓs

Association, Inc. ( Petitioner or NFHA) , filed a Petition to

Determine Invalidity of Proposed Rules. On August 24, 2015,

Petitioner filed an Unopposed Motion for Leave to File Amended

Petition. PetitionerÓs Unoppos ed Motion was granted on

August 26, 2014.

On September 18, 2015, the Florida Quarter Horse Racing

Association, Inc. ( Intervenor or FQHRA), filed a Motion to

Intervene. The Motion to Intervene was granted on September 22,

2015.

The case was scheduled to be heard on December 17 and 18,

2015. On December 8, 2015, the parties filed a Joint Motion for

Oral Argument In Lieu of Evidentiary Hearing and Joint

Prehearing Stipulation, by which the parties agreed that

disputed issues of fact no longer exist ed in the case and that

only legal issu es remain ed to be litigated. Accordingly, the

parties advised that an evidentiary hearing was no longer

necessary and requested that the final hearing be limited to

oral argument on the legal issues framed by the partiesÓ j oint

p rehearing s tipulation.

I n the Joint Prehearing Stipulation, the parties identified

the Stipulated Facts, Stipulated Exhibits, and legal issues

remaining in the case. The legal issues remaining were

identified as: (i) whet her proposed rules 61D - 2.024(5); 61D -

2.025(1), (2), (4), (7), and (8)(a); 61D - 2.028(2)(a) - (d), (6),

(7), and (8); and 61D - 2.029 exceed the agencyÓs grant of

rulemaking authority in violation of section 120.52(8)(b); (ii)

whet her proposed rules 61D - 2.024(5); 61D - 2.025(1), (2), (4),

(7), and (8)(a) ; 61D - 2.028(2)(a ) - (d), (6), (7), and (8); and

61D - 2.029 enlarge, modify, or contravene the specific provisions

of law implemented in violation of section 120.52(8)(c); (iii)

whet her proposed rules 61D - 2.024(5); 61D - 2.025(1), (2), (4),

(7), and (8)(a); 61D - 2.028(2)(a) - (d), (6), (7), and (8); and

61D - 2.029 violate the Ðflush leftÑ language in section

120.52(8); and (iv) whether proposed rules 61D - 2.028(2)(a) - (d),

(6), (7), and (8); and 61D - 2.029 are vague in violation of

section 120.52(8)(d).

The Joint Motion for Oral Argu ment In Lieu of Evidentiary

Hearing was granted on December 8, 2015. The f inal h earing was

held on December 17, 2015. At the final hearing, the parties

presented legal argument. The parties did not order a

transcript. At the close of the final h earing, the ALJ directed

that PFOs be filed by January 12, 2016 , to address the legal

issues identified in the joint prehearing stipulation or the

stipulated record.

The stipulated facts have been accepted and considered in

the preparation of this Final Order.

Petitioner has requested an award of attorneyÓs fees

pursuant to section 120.595(2), Florida Statutes.

References to statutes are to Florida Statutes (201 5 ) ,

unless otherwise noted.

FINDINGS OF FACT

1. Petitioner is the horsemenÓs association that

r epresents the majority of the quarter horse owners and trainers

at Gretna Racing, LLC (ÐGretna RacingÑ). Gretna Racing holds a

pari - mutuel permit and annual operating license that authorizes

Gretna Racing to conduct pari - mutuel wagering on q uarter horse

r aces pursuant to c hapter 550, Florida Statutes. The HorsemenÓs

Agreement between Petitioner and Gretna Racing has been filed

with the Division in accordance with sections 550.002(11) and

849.086(13)(d)3 . As the organization representing the majority

of t he horsemen participating in horse racing events conducted

at Gretna Racing, NFHA is the statutorily - entitled recipient to

the purses paid for the performances at Gretna Racing.

2 . Petitioner has approximately 200 members, the majority

of whom are owners , trainers , and jockeys of American Quarter

Horses and other breeds that are authorized to participate in

pari - mutuel quarter horse races. The Division has issued

occupational licenses to the majority of PetitionerÓs members.

3 . Respondent , Department o f Business and Professional

Regulation, Division of Pari - Mutuel Wagering (Respondent or

Division) , is the state agency charged with regulating pari -

mutuel wagering activities in Florida pursuant to c hapter 550.

4 . Intervenor is tasked by statute with ce rtain functions

concerning the conduct and promotion of pari - mutuel quarter

horse racing at racetracks throughout Florida. Intervenor is

the Florida affiliate of the American Quarter Horse Association

(AQHA), which is the national quarter horse membership

organization responsible for maintaining uniform standards for

A merican quarter horse racing worldwide.

5 . NFHAÓs members engage in non - traditional quarter horse

racing, including Ðbarrel matchÑ and Ðflag dropÑ racing. Barrel

match racing involves two adjacent rectangular tracks on which

the horses and riders complete a cloverleaf pattern around

preset barrels. Flag drop racing involves two or more horses

racing simultaneously on a common, straight course of

approximately 100 yards in length that is st arted by a flag

drop, rather than a starting box or gate. Gretna RacingÓs

existing track configuration supports these forms of quarter

horse racing. NFHAÓs members and their horses are specifically

trained for barrel match and flag drop racing and most w ould

require extensive additional training to participate in other

racing formats.

6 . Barrel match racing and flag drop racing , as they have

been conducted at Gretna Racing , will not be capable of being

run on quarter horse tracks that meet the standards to be

adopted by proposed rules 61D - 2.024 and 61D - 2.025. Many of

PetitionerÓs mem b ers will not meet the jockey requirements to be

adopted by proposed rule 61D - 2.028 without additional training,

and would be required to purchase racing uniforms under the

proposed rule.

7 . On October 19, 2011, the Division issued an annual

operating license to Gretna Racing, which authorized it to

conduct racing pe rformances under its previously - issued quarter

horse racing permit during the 2011/2012 season. For reasons

best explained by Administrative Law Judge John Van Laningham in

Fl orida Quarter Horse Racing Ass ociatio n , Inc. v. Department of

Business & Professiona l Reg ulation , Case No. 11 - 5796RU (Fla.

DOAH May 6, 2013), the annual operating license had the effect

of approving the conduct of barrel races at Gretna Racing.

8 . Following the DivisionÓs issuance of the annual

operating license to Gretna Racing, FQHRA challenged the

DivisionÓs approval of pari - mutuel barrel match racing as an

unadopted rule . After an evi dentiary hearing, a Final Order was

issued on May 6, 2013, determining that Ðthe policy of the

Division pursuant to which "Gretna - style" barrel match racing is

treated as the legal equivalent of traditional quarter horse

racing, so that a quarter horse rac ing permitholder is able to

obtain an annual license authorizing pari - mutuel wagering

operations on barrel match racing, is an unadopted rule which

violates section 120.54(1)(a), Florida Statutes.Ñ F lorida

Quarter Horse Racing AssÓn , Inc. v. Dep Ót of Bus . & ProfÓl Reg . ,

DOAH Case No. 11 - 5796RU at 78 .

9. The Final Order was affirmed by the First District

Court of Appeal , quoting Judge Van Laningham with approval ,

that:

To be legal and enforceable, a policy which

operates as law must be formally adopted in

public, through the transparent process of

the rulemaking procedure set forth in

section 120.54 . In sum, the Division's

policy of licensing the conduct of pari -

mutuel wagering on [barrel match racing], on

the ground that [barrel match racing] is

legall y equivalent to quarter horse racing,

constitutes an unadopted rule . As such, it

violates section 120.54(1)(a).

Fl a . Quarter Horse Track AssÓn , Inc. v. DepÓt of Bus. & ProfÓl

Reg. , 133 So. 3d 1118 , 1119 - 1120 (Fla. 1st DCA 2014).

10 . Following the entry of that Final Order, NFHA entered

into a Consent Order with the Division that allows match races

started by a flag drop as a pari - mutuel event pending the

adoption of rules establishing standards for quarter horse

racing.

11 . As a result of the Final O rder, the Division began its

rule development process for the proposed rules at issue in this

proceeding when a Notice of Development of Rulemaking was

published on September 6, 2013 , in Volume 39, Number 174 of the

Florida Administrative Register. A rule development workshop

was held on October 16, 2013, in Fort Lauderdale , Florida . A

second Notice of Development of Rulemaking was published on

August 6, 2014 , in Volume 40, Number 152 of the Florida

Administrative Register. Another rule development works hop was

held on August 27, 2014, in Orlando , Florida . T he Division

published a third Notice of Development of Rulemaking on

December 24, 2014 , in Volume 40, Number 248 of the Florida

Administrative Register. A final rule development workshop was

held on January 14, 2015, in Tallahassee , Florida .

R epresentatives of numerous entities, including NFHA and FQHRA,

participated in the workshops.

12 . On June 30, 2015, the Division published Notice of

Proposed Rules 61D - 2.024 through 61D - 2.029 in Volume 41, Num ber

126 of the Florida Administrative Register. A public hearing

was held on July 20, 2015, where representatives of numerous

interested entities spoke and submitted written comments.

13 . On July 28, 2015, the Division published a Notice of

Change to th e proposed rules in Volume 41, Number 145 of the

Florida Administrative Register.

14 . NFHA filed a petition challenging several of the

proposed rules on July 30, 2015. On August 21, 2015, NFHA filed

an Amended Petition to Determine Invalidity of Propos ed Rules,

which was accepted by the ALJ.

15 . FQHRA filed a Motion to Intervene in the case on

September 18, 2015 . That motion was granted on September 22,

2015.

16 . NFHAÓs Amended Petition challenge d the following rules

propose d by the Division: 61D - 2 .024(5); 61D - 2.025(1), (2), (4),

(7) and (8)(a); 61D - 2.028(2)( a) - (d), (6), (7), and (8); and 61D -

2.029.

17 . T he challenged rules purp ort to implement provisions

of c hapter 550, which governs pari - mutuel wagering.

18 . NFHA contends that the challenged rules are an invalid

exercise of the DivisionÓs delegated legislative authority

because, in violation of section 120.52(8)(b), the Division is

exceeding its grant of rulemaking authority in adopting the

rules and, in violation of section 120.52(8)(c), the challenged

rules enlarge, modify , or contravene the law implemented . NFHA

further contends that each of the challenged rules violates the

Ðflush leftÑ language in section 120.52(8) . Finally, NFHA

asserts that proposed rules 61D - 2.028(2)(a) - (d), (6), (7) , and

(8) ; and 61D - 2.029 are vague in violation of section

120.52(8)(d).

CONCLUSIONS OF LAW

19 . The Division of Administrative Hearings has

jurisdiction of the subject matter and the parties to this

proceeding. §§ 120.569 and 120.57(1), Fla. Stat . (2015 ) .

20 . Section 120.56(1)(a) provides that Ð any person

substantially affected by . . . a proposed rule may seek an

administrative determination of the invalidity of the rule on

the ground that the rule is an invalid exercise of delegated

legislative auth ority.Ñ

Standing

21 . The parties have stipulated that all parties have

standing to participate in this proceeding. If allowed to

become effective, NFHA and FQHRA and their respective members

would be governed by the proposed rules and therefore each is

substantially affected in a manner and degree sufficient to

confer administrative standing in this case. See , e . g . , Abbott

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

2009); Dep't of Prof'1 Reg., Bd. o f Dentistry v. Fla. Dental

Hygienist Ass'n , 612 So. 2d 646, 651 (Fla. 1st DCA 1993); see

also Cole Vision Corp. v. Dep't of Bus. & Prof'l Reg. , 688

So. 2d 404, 407 (Fla. 1st DCA 1997) (recognizing that Ð 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 ).

22 . Associations have standing to bring a rule challenge

when:

a substantial number of [the associationÓs]

members, although not necessarily a

majority , are Ðsubstantially affectedÑ by

the challenged rule . Further, the subject

matter of the rule must be within the

associationÓs general scope of interest and

activity, and the relief requested must be

the type appropriate for a trade association

to receiv e on behalf of its members.

Florida Home Builders AssnÓ v . DepÓ t of Labor and Emp. Sec. , 412

So. 2d 351, 353 - 54 (Fla. 1982) ; see also NAACP, Inc. v. Bd. of

Regents , 863 So. 2d 294, 298 (Fla. 2003) .

23 . Although t he parties have stipulated to Petitione rÓs

and IntervenorÓs standing, it is concluded that, based on the

stipulated facts and the affidavits filed by representatives of

each, that Petitioner and Intervenor , NFHA and FQHRA , meet the

standards for associational standing.

Burden of Proof

24 . In a challenge to a proposed agency rule , t he

petitioner has the burden of Ðgoing forward,Ñ and the agency

then has the burden of proving by a preponderance of the

evidence that the proposed rule is not an invalid exercise of

delegated legislative authority as to the objections raised.

§ 120.56(2)(a), Fla. Stat. Petitioner met its burden of Ðgoing

forwardÑ in this case.

25 . When a substantially affected person seeks a

determination of the invalidity of a proposed rule pursuant to

section 120.56(2), the proposed rule is not presumed to be valid

or invalid . § 120.56(2)( c ), Fla. Stat.

Rulemaking Standards

26 . Section 120.52(8) defines an Ðinvalid exercise of

delegated legislative authority . Ñ By stipulation of the

parties, only sections 120.52(8)(b), (8 )(c), and (8)(d), and the

"flush left" paragraph at the end of subsection (8), are at

issue in this proceeding. Those provisions establish that a

rule is an invalid exercise of delegated legislative authority

under the following circumstances:

(8) ÐInva lid exercise of delegated

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 followin g applies:

* * *

(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 req uired

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;

A grant of rulemaking authority is necessary

but not sufficient to allow an agency to

adopt a r ule; a specific law to be

implemented is also required . An agency may

adopt only rules that implement or interpret

the specific powers and duties granted by

the enabling statute . No agency shall have

authority to adopt a rule only because it is

reasonabl y 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 s tatute.

27 . The extensively cited cases of Southwest Florida Water

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

594 (Fla. 1st DCA 2000) , and Board of Trustees of the

Internal Improvement Trust Fund v. Day Cruise Ass ociatio n , Inc. ,

794 So. 2d 696 (Fla. 1st DCA 2001), recognize that the flush -

left paragraph of section 120.52(8) was intended to restrict and

narrow the scope of agency rulemaking. As established in Day

Cruise :

It is now clear, agencies have rulemaking

authority only where the Legislature has

enacted a specific statute, and authorized

the agency to implement, and then only if

the (proposed) rule implements or interprets

specific powers or duties, as opposed to

improvising in an area that can be said to

fall only generally wi thin some class or

powers or duties the Legislature has

conferred on the agency.

794 So. 2d at 700. Nonetheless, Ð[i]t follows that the

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

The question is whether the statute contains a speci fic grant of

legislative authority for the rule, not whether the grant of

authority is specific enough .Ñ S w. Fla. Water Mgmt. Dist. v.

Save the Manatee Club, Inc. , 773 So. 2d at 600.

28 . The D ivision 's interpretation of chapter 550 , a

statute it is cha rged with administering, is entitled to Ð great

deference unless there is clear error or conflict with the

intent of the statute . Ñ Lakeland Reg'l Med. Ctr., Inc. v. Ag.

for Health Care Admin. , 917 So. 2d 1024, 1029 (Fla. 1st DCA

2006); see also Level 3 CommcÓns, LLC v. Jacobs , 841 So. 2d 447,

450 (Fla. 2003) ; Verizon Fla., Inc. v. Jacobs , 810 So. 2d 906,

1 4

908 (Fla. 2002); Fla. Ho sp. (Adventist Health) v. Ag. for Health

Care Admin. , 823 So. 2d 844, 847 (Fla. 1st DCA 2002).

The basis for such deference has been described as follows:

Agencies generally have more expertise in a

specific area they are charged with

overseeing . Thus, in deferring to an

agency's interpretation, courts benefit from

the agency's technical and/or practical

experience in its fiel d.

Rizov v. Bd. of ProfÓl EngÓrs , 979 So. 2d 979 (Fla. 3d DCA

2008) , see also Avatar Dev. Corp. v. State , 723 So. 2d 199, 207

(Fla. 1998) (ÐUnder the complexities of our modern system of

government, the Legislature has recognized that [the Department

of E nvironmental Protection], as a specialized administrative

body, is in the best position to establish appropriate standards

and conditions . . . .Ñ).

29 . Ð[I]t is well established that the legislature has

broad discretion in regulating and controlling p ari - mutuel

wagering and gambling under its police powers.Ñ Div. of Pari -

Mutuel Wagering , Dep't of Bus. Reg. v. Fl a . Horse Council, Inc. ,

464 So. 2d 128, 130 (Fla. 1985). Thus, the authority of the

legislature to empower the Division to adopt pari - mutuel rules

to establish standards for Ð holding, conducting, and operating

of all racetracks, race meets, and races held in this stateÑ is

recognized by the undersigned.

Statutory Authority for the Proposed Rules

30 . Among the statutory provisions cited by t he division

as authority for some or all of its rules are s ection s 550.2415,

550.235, and 550.0425. Those sections, both by stipulation of

the parties and by review thereof by the undersigned, are

determined to provide no authority for the challenged prov isions

of the proposed rules, and are not implemented by the challenged

provisions of the proposed rules. Therefore, they do not merit

further discussion.

31 . By consensus of the parties, s ection 550.0251 (3) ,

entitled Ð[t]he powers and duties of the Di vision of Pari - mutuel

Wagering of the Department of Business and Professional

Regulation,Ñ provides the primary rulemaking authority and law

implemented for each of the challenged rules. That section

provides that :

The division shall administer this chap ter

and regulate the pari - mutuel industry under

this chapter and the rules adopted pursuant

thereto, and:

* * *

(3) The division shall adopt reasonable

rules for the control, supervision, and

direction of all applicants, permittees, and

licensees and fo r the holding, conducting,

and operating of all racetracks, race meets,

and races held in this state . Such rules

must be uniform in their application and

effect, and the duty of exercising this

control and power is made mandatory upon the

division.

32 . In addition to the foregoing, s ection 550.105 ,

entitled Ð[o] ccupational licenses of racetrack employees; fees;

denial, suspension, and revocation of license; penalties and

fines , Ñ is cited as the law implemented by proposed rule 61D -

2. 028, Jockey Requireme nts, with s ections 550.105(3) and (10 ) (a)

cited as the rulemaking authority. Having reviewed the statute

in its entirety, the undersigned concludes that those sections

of the statute that could in any way be construed as be ing

implemented by the proposed rules are the following:

(1) Each person connected with a racetrack

or jai alai fronton, as specified in

paragraph (2)(a), shall purchase from the

division an occupational license . All

moneys collected pursuant to this section

each fiscal year shall be deposited into the

Pari - mutuel Wagering Trust Fund. Pursuant

to the rules adopted by the division, an

occupational license may be valid for a

period of up to 3 years for a fee that does

not exceed the full occupational license fee

for each of the years for which the license

is purchas ed. The occupational license

shall be valid during its specified term at

any pari - mutuel facility.

(2)(a) The following licenses shall be

issued to persons or entities with access to

the backside, racing animals, jai alai

playersÓ room, jockeysÓ room, driversÓ room,

totalisator room, the mutuels, or money

room, or to persons who, by virtue of the

position the y hold, might be granted access

to these areas or to any other person or

entity in one of the following categories

and with fees not to exceed the following

amounts for any 12 - month period:

* * *

2. Professional occupational licenses:

professional person s with access to the

backside of a racetrack or playersÓ quarters

in jai alai such as . . . jockeys and

apprentices, . . . who might have access to

the jockeysÓ room, the driversÓ room, the

backside, racing animals, kennel compound,

or managers or supervis ors requiring access

to mutuels machines, the money room, or

totalisator equipment: $40.

* * *

The individuals and entities that are

licensed under this paragraph require

heightened state scrutiny, including the

submission by the individual licensees or

persons associated with the entities

described in this chapter of fingerprints

for a Federal Bureau of Investigation

criminal records check.

(b) The division shall adopt rules

pertaining to pari - mutuel occupational

licenses, licensing periods, and renew al

cycles.

(3) Certified public accountants and

attorneys licensed to practice in this state

shall not be required to hold an

occupational license under this section

while providing accounting or legal services

to a permitholder if the certified public

a ccountantÓs or attorneyÓs primary place of

employment is not on the permitholder

premises.

* * *

(10)(a) Upon application for an

occupational license, the division may

require the applicantÓs full legal name; any

nickname, alias, or maiden name for the

applicant; name of the applicantÓs spouse;

the applicantÓs date of birth, residence

address, mailing address, residence address

and business phone number, and social

security number; disclosure of any felony or

any conviction involving bookmaking, illegal

gambling, or cruelty to animals; disclosure

of any past or present enforcement or

actions by any racing or gaming agency

against the applicant; and any information

the division determines is necessary to

establish the identity of the applicant or

to establ ish that the applicant is of good

moral character. Fingerprints shall be

taken in a manner approved by the division

and then shall be submitted to the Federal

Bureau of Investigation, or to the

association of state officials regulating

pari - mutuel wagerin g pursuant to the Federal

Pari - mutuel Licensing Simplification Act of

1988 . The cost of processing fingerprints

shall be borne by the applicant and paid to

the association of state officials

regulating pari - mutuel wagering from the

trust fund to which the processing fees are

deposited . The division, by rule, may

require additional information from

licensees which is reasonably necessary to

regulate the industry . The division may, by

rule, exempt certain occupations or groups

of persons from the fingerpri nting

requirements.

The ÐTrackÑ Rules - Proposed Rule 61D - 2.024(5) and Proposed Rule

61D - 025(1), (2), (4), (7) and (8)(a)

33 . Petitioner has challenged proposed rule 61D - 2.024(5) ,

which provides that:

A race course shall not require the racing

animal t o change its course in response to

any obstacles on the racing surface during

the race.

34 . Petitioner has challenged proposed rule s 61D - 025(1),

(2), (4), (7) and (8)(a), which provide that:

(1) Each race must have at least five

entrants with a minimu m of two contestants.

(2) Each race, with the exception of a

harness race and a steeplechase race, must

start by use of a box or gate.

* * *

(4) Each quarter horse or any statutorily

authorized substitute breed race other than

thoroughbred conducted u nder a quarter horse

permit:

a. Must be conducted on a track that is at

least 50 feet in width; and

b. Must not be shorter than 330 feet in

length.

* * *

(7) For each race, all racing contestants

must compete simultaneously on a common

track with a common start and finish line.

(8) Horse races must be recorded by at

least three video cameras if the race

includes turns or two video cameras if the

race is on a straight track.

(a) Cameras must be located to provide

clear panoramic and head - on vi ews of each

race. Separate monitors, which

simultaneously display the images received

from each camera and are capable of

simultaneously displaying a synchronized

view of the recordings of each race for

review, shall be provided in the stewardsÓ

stand.

35 . The rulemaking authority for both rules is cited as

sections 550.0251(3) and 550.2415(12). The law implemented by

proposed rule 61D - 2.024 i s cited as sections 550.0251 and

550.2415. The law implemented by proposed rule 61D - 2.025 is

cited as section s 550.235, 550.0251, and 550.2415. As set forth

above, the relevant authority for the challenged provisions of

the proposed rules is limited to section 550.0251.

36 . Petitioner cites to Department of Business &

Professional Regulation v. Calder , 724 So. 2d 100 (Fla. 1st DCA

1998) , as authority for its argument that the Division lacks

specific rulemaking authority for the proposed rules. The

courtÓs opinion in Calder must b e read in light of the proposed

rules at issue, which authorized warrantless searc hes of persons

and places within a permitted pari - mutuel wagering facility. In

that case, the Court correctly determined that

It is clear, however, that the statutory

provisions fail to convey the requisite power

to the agency to conduct searches .

Subse ction 550.0251(3) merely empowers the

Division to "adopt reasonable rules for the

control, supervision, and direction of all

applicants, permittees, and licensees and for

the holding, conducting, and operating of all

racetracks, race meets, and races held in

this state. Ñ This general grant of

rulemaking authority, while necessary, is not

sufficient to validate rule 61D - 2.002 under

the 1996 amendment to section 120.52(8) . A

specific law to be implemented was also

required, and nothing in this subsection

id entifies the power that the rule attempts

to implement, i.e., to search.

D ept. of Bus. & ProfÓl Reg. v. Calder , 724 So. 2d at 102.

37 . In further explaining its opinion , and the extent to

which Constitutional liberties may have played a role, the

Calder court concluded by ruling that:

In St. Johns we interpreted the above

language to mean that the rule or proposed

rule could be considered "a valid exercise

of delegated legislative authority [only] if

it regulates a matter directly within the

class of pow ers and duties identified in the

statute to be implemented. Ñ 1998 Fla. App.

LEXIS 9592, *22 - 23 (emphasis added) .

Obviously, there is nothing in the class of

powers and duties identified in section

550.0251 that delegates to the Division the

right to sear ch persons or places within

pari - mutuel wagering facilities, or any

provision in the statute deeming a licensee

of same to have waived the protections of

the Fourth Amendment by consenting to such

searches.

Id. at 105 - 106.

38 . Unlike the warrantless sea rch rules at issue in

Calder , the second clause of section 550.0251(3) provides a

grant of authority specifically tailored to the adoption of

standards for racetracks, race meets, and races. Section

550.0251(3) further provides an expression of the scope of the

legislative grant of authority, providing that Ð[s]uch rules

must be uniform in their application and effect, and the duty of

exercising this control and power is made mandatory upon the

division.Ñ

39 . T he challenged sections of propose d rules 61 D - 2.024

and 61D - 2.025, establishing racetrack and race standards, do not

enlarge, modify, or contravene the DivisionÓs ÐmandatoryÑ

authority to adopt rules for Ðholding, conducting, and operating

of all racetracks, race meets, and races held in this state. Ñ

40 . The second clause of section 550.0251(3), combined

with the legislative mandate of exercising that rulemaking power

and control, establishes the Ðspecific powers and dutiesÑ to be

implemented and interpreted by the Division.

41 . As with Calder , the restriction on agency rulemaking

as described in Board of Trustees of the Internal Improvement

Trust Fund v. Day Cruise Associatio n , supra, should be read in

light of the fact that the proposed rule in that case had,

essentially, no support in the rule making authority of the

Trustees. The Day Cruise opinion took into account the nature

of the proposed rule at issue as establishing Ða selective

prohibition based not on the use vessels make of sovereignty

lands but on the use to which certain vessels are put once they

have steamed offshore. Ñ Id. at 697 - 698. The court recognized

that the L egislature limited Ðthe TrusteesÓ submerged lands

rulemaking authority to rules governing physical changes to or

other effects on sovereignty lands and proximate waters and

provides that any such rules the Trustees may adopt Òmust not

interfere with commerce or the transitory operation of vessels

through navigable water.ÓÑ Id. at 702. Thus, the agencyÓs

effort to restrict offshore gambling by restricting otherwise

lawf ul mooring under the standards applicable to the use of

sovereignty lands exceeded the TrusteesÓ grant of rulemaking

authority . With regard to section 120.52(8)(c), the court

conclude d that Ð[t]he provisions purportedly to be implemented

here are complete ly silent about day cruises and about gambling,

and confer no authority to bar day cruise vessels -- or any other

vessels -- from sovereignty submerged lands based on lawful

activities occurring outside Florida's territorial

jurisdiction.Ñ

42 . Contrary to the situation confronted by the court in

Day Cruise , the Legislature in this case empowered the Division

to adopt rules establishing standards for racetracks, race

meets, and races, under a specific statute authorizing the same,

and furthermore made the du ty of exercising that power mandatory

on the Division. Thus, the proposed ÐtrackÑ rules Ð implement[]

or interpret[] specific powers or duties, as opposed to

improvising in an area that can be said to fall only generally

within some class of powers or duti es the Legislature has

conferred on the agency.Ñ Bd. of Trs. of the Int. Impust

Fund v. Day Cruise AssÓn , 794 So. 2d at 700.

43. The sufficiency of the rulemaking authority in this

case, and the validity of the challenged rules regarding

racetracks, race meets, and races , also finds support in United

Faculty of Florida v. Florida State Board of Educ ators , 157 So.

3d 514 (Fla. 1st DCA 2015), in which the court held that:

it is not necessary under Save the Manatee

Club and its progeny for the statutes to

delineate every aspect of tenure that the

Board is authorized to address by rule;

instead, all that is necessary is for the

statutes to specifically authorize the Board

to adopt rules for college faculty contracts

and tenure, which the statutes clearly do.

Id. at 517 - 518.

44 . Without the ability to set track and race standards,

the legislative authority in section 550. 0 251(3) would have

little purpose or meaning. Thus, with regard to proposed rules

61D - 2.024 and 61 - 2.025, the undersigned concludes, a s did the

court in United Faculty of Fla. , that Ðthe Legislature has

clearly delegated the agency authority to adopt rules on the

issue and the agency complie [d] with the rulemaking process. Of

course, if the Legislature believes that the new standa rds and

criteria for [ holding, conducting, and operating of all

racetracks, race meets, and races] that are embodied in the

challenged rule are too onerous or do not comport with its

intent, it is free to legislate accordingly.Ñ Id. at 519.

The ÐJockeyÑ Rules - Proposed Rule 61D - 2.028(2)(a) - (d), (6),

(7), and (8)

45 . Petitioner has challenged p roposed rule s 61D -

2.028 (2)(a) - (d), (6), (7), and (8), which p rovide that:

(2) The horserace permitholder shall

maintain documentation confirming all

jockeys a llowed to ride at its race track

have demonstrated riding ability. The

demonstration of riding ability is defined

at a minimum as:

a. Breaking with a horse in company from

the starting gate;

b. Working a horse in company around the

turn and down the stretch ;

c. Switching the riding crop from one hand

to the other while maintaining control of

the horse in a stretch drive; and

d. Causing a horse to switch leads coming

out of the turn.

* * *

(6) During the conduct of a pari - mutuel

race, each j ockey shall wear white pants and

unique racing colors registered with the

horserace permitholder.

(7) The racing colors to be worn by each

jockey in a race shall be described in the

program, and any temporary substitution of

racing colors shall be annou nced prior to

the start of the race.

(8) Jockeys and exercise riders must wear a

properly secured protective helmet, vest,

and boots which have been specifically

designed for horse racing when riding in

races or when exercising horses.

46 . Rulemakin g authority for proposed rule 61D - 2.028 is

cited as sections 550.0251(3), 550.105(3) and (10)(a), and

550.2415(12) . The law implemented by proposed rule 61D - 2.028 is

cited as sections 550.0251, 550.0425, 550.105, and 550.2415 . As

set forth above, the rele vant authority for the challenged

provisions of the proposed rules is limited to sections 550.0251

and 550.105.

47 . There is nothing in the rules cited as authority by

the Division that specifically applies to jockeys, or authorizes

the development of ru les regulating the qualifications or

uniforms of jockeys.

48 . Applying the rulemaking standards, and the case law

set forth herein, the undersigned concludes that the proposed

ÐjockeyÑ rule s do not find specific authority in section

550. 0 251(3) regardi ng the adopt ion of rules related to Ðholding,

conducting, and operating of all racetracks, race meets, and

races held in this state.Ñ

49 . The proposed ÐjockeyÑ rules do not find specific

authority in section 550.105(3), which applies to occupational

lic enses for certified public accountants and attorneys, and

section 550.105(10)(a) , which identifies the information

necessary to establish the identity and good moral character of

an applicant for an occupational license.

50 . P roposed rules 61D - 2.028(2)(a ) - (d), (6), (7), and (8)

exceed the DivisionÓs grant of rulemaking authority, enlarge and

modif y the specific provisions of law implemented, and fail to

implement or interpret the specifi c powers and duties granted by

s ection s 550.0251 and 550.105 , and are therefore invalid

exercises of delegated legislative authority as defined in

sections 120.52(8)(b) and (c), and the flush left paragraph.

51 . The proposed ÐjockeyÑ rules are straight - forward and

understandable . No evidence was offered as to any

misund erstanding of their terms. Thus, the p roposed ÐjockeyÑ

rule s are not Ðso vague that persons of common intelligence must

guess at its meaning and differ as to [their] application.Ñ

DepÓt of Fin. Servs. v. Peter R. Brown Constr., Inc. , 108 So. 3d

723, 728 (Fla. 1st DCA 2013); see also S w. Fla. Wa ter Mgmt.

Dist. v. Charlotte C nty . , 774 So. 2d 903, 915 (Fla 2d DCA 2001).

Based thereon, proposed rules 61D - 2.028(2)(a) - (d), (6), (7), and

(8) are not invalid exercises of delegated legislative authority

as define d in section 120.52(8)(d).

The ÐPublicationÑ Rule - Proposed Rule 61D - 2.029

52 . Proposed rule 61D - 2.029 provides that:

B efore a horse is allowed to start, the

horserace permitholder shall ensure that at

least the three most recent published past

runnin gs, whether in races or workouts, are

available to the public for review. At

least one published running must be from

within 45 days of that race.

53 . Rulemaking authority for proposed rule 61D - 2.029 is

cited as section 550.0251(3). The law implemente d by proposed

rule 61D - 2.029 is cited as section 550.0251.

54 . Proposed rule 61D - 2.029 is challenged as being in

violation of section 120.52(8) (b), (c), and (d), and the flush -

left paragraph.

55 . As established by testimony taken at the July 20,

2015 , public hearing, i nformation regarding past performance of

horses is designed to aid the betting public as to the

qualifications of race entrants .

56 . Applying the rulemaking standards, and the case law

set forth herein, the undersigned concludes that t he proposed

Ð publication Ñ rule does not find specific authority in the

requirement to adopt rules related to Ð holding, conducting, and

operating of all racetracks, race meets, and races held in this

state . Ñ Thus, proposed rule 61D - 2.029 exceeds the Divi sionÓs

grant of rulemaking authority, enlarges and modifies the

specific provisions of law implemented , and fails to implement

or interpret the specifi c powers and duties granted by s ection

550.0251 , and is therefore an invalid exercise of delegated

legisl ative authority as defined in sections 120.52(8)(b) and

(c), and the flush left paragraph.

57 . Petitioner argued convincingly that proposed rule 61D -

2.029 is impermissibly vague. The proposed rule does not define

what is meant by Ðpast performances,Ñ o r the means or location

of publication. The comments provided at the public hearing

expressed confusion as to what was meant by the term Ðat least

three published past performances,Ñ and whether publication

meant publication in a track program, or publica tion to a

national database , with a witness testifying that Ðif we leave

this as written, itÓs extremely vague, and itÓs not reliable

information.Ñ The Division has not explained what is meant by

the rule, offering at oral argument only that interpretive

guidance could be distributed to quell any confusion. G iven the

requirement that the terms in a proposed rule be given Ðtheir

common and ordinary meaning,Ñ proposed rule 61D - 2.029 is Ðso

vague that persons of common intelligence must guess at its

meaning and differ as to its application.Ñ Dep Ó t of Fin. Servs .

v. Peter R. Brown Constr., Inc. , 108 So. 3d at 723 ; see also

S w. Fla. Water Mgmt. Dist. v. Charlotte County , 774 So. 2d at

915 . Based thereon, proposed rule 61D - 2.029 is an invalid

exercise of deleg ated legislative authority as defined in

section 120.52(8)(d).

ORDER

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is ORDERED that:

1. Proposed rule 61D - 2.024(5) and proposed rule s 61D -

025(1), (2), (4), (7) and (8)(a) are not inva lid exercises of

delegated legislative authority. Accordingly, North Florida

HorsemenÓs Association, Inc.Ó Amended Petition to Determine

Invalidity of Proposed Rules as to those proposed rules is

dismissed.

2. Proposed r ule s 61D - 2.028(2)(a) - (d), (6), ( 7), and (8) ;

and proposed rule 61D - 2.029 are invalid exercise s of delegated

legislative authority .

3. Jurisdiction is retained for the purpose of determining

reasonable attorneyÓs fees and costs pursuant to section

120.595(2). Any motion to determine fe es and costs shall be

filed within 60 days of the issuance of this Final Order.

D ONE AND ORD ERED this 29th day of January , 201 6 , in

Tallahassee, Leon County, Florida.

S

E. GARY EARLY

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 29th day of January , 201 6 .

COPIES FURNISHED :

William N. Spicola, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Avenue

Tallahassee, Florida 32399

(eServed)

William D. Hall, Esquire

Caitlin R. Mawn, Esquire

Department of Business and

Profes sional Regulation

Suite 40

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

Donna E. Blanton, Esquire

Angela D. Miles, Esquire

Radey Law Firm, P.A.

Suite 200

301 South Bronough Street

Tallahassee, Florida 32301

(eServed)

Michael John Barry , Esquire

J. Stephen Menton, Esquire

Rutledge Ecenia, P.A.

Suite 202

119 South Monroe Street

Tallahassee, Florida 32301

(eServed)

Jonathan Zachem, Director

Division of Pari - Mutuel Wagering

Department of Business and

Professional Regulation

Northwood Ce ntre

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

Ken Lawson, Secretary

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399

(eServed)

Ken Plante, Coordinator

Joint Admin istrative Proced ures Committee

Room 680, Pepper Building

111 West Madison Street

Tallahassee, Florida 32399 - 1400

(eServed)

Ernest Reddick, Chief

Alexandra Nam

Department of State

R. A. Gray Building

500 South Bronough Street

Tallahassee, Flo rida 32399 - 0250

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is

entitled to judicial review pursuant to Section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of App ellate Procedure. Such proceedings 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 prescribed by law, with

the District Co urt 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.