16-005683F Daytona Beach Kennel Club, Inc. vs. Department Of Business And Professional Regulation, Division Of Pari-Mutel Wagering Status: Closed DOAH Final Order on Friday, April 20, 2018.

Summary: Petitioners were jointly entitled to an award of attorney's fees up to the statutory cap of $50,000, and to cost exclusive of a pre-litigation lower cost regulatory alternative.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DANIA ENTERTAINMENT CENTER,

LLC,

Petitioner,

vs. Case No. 16 - 5682F

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

/

DAYTON A BEACH KENNEL CLUB,

INC.,

Petitioner,

vs. Case No. 16 - 5683F

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

/

JACKSONVILLE KENNEL CLUB, INC.,

Petitioner,

vs. Case No. 16 - 5684F

DEPARTMEN T OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

/

MELBOURNE GREYHOUND PARK, LLC,

Petitioner,

vs. Case No. 16 - 5685F

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - M UTUEL

WAGERING,

Respondent.

/

BONITA - FORT MYERS CORPORATION,

Petitioner,

vs. Case No. 16 - 5686F

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

/

INVESTMENT CORPORATION OF PALM

BEACH,

Petitioner,

vs. Case No. 16 - 5687F

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

/

WEST FLAGLER ASSOCIATES, LTD.,

Petitio ner,

vs. Case No. 16 - 5688F

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

/

TAMPA BAY DOWNS, INC.; AND TBDG

ACQUISITION, LLC , d/b/a TGT

POKER AND RACEBOOK,

Petitioners,

vs. Case No. 16 - 5689F

DE PARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

/

FINAL ORDER AWARDING ATTORNEYÓS FEES AND COSTS

This cause is before the undersigned upon the entry of two

O rders by th e First District Court of Appeal (First DCA)

granting m otions for attorneyÓs fees and costs and remanding the

matter to the Division of Administrative Hearings ( DOAH ) to

assess the amount pursuant to section 120.595(2) .

Preliminary Statement

On September 26, 2016, after entry of a Final Order

determining several proposed rules of the Department of Business

and Professional Regulation, Division of Pari - mutuel Wagering

(DBPR or Respondent) , relating to Ðdesignated playerÑ card

games , Florida Administrative C ode R ules 61D - 11.001(17) and

61D - 11.002(5), to have been invalid exercises of delegated

legislative authority , The Lockwood Law Firm filed separate

Motion s for AttorneyÓs Fees and Costs pursuant to section

120.595(2) with DOAH on behalf its clients in DOA H Case

Nos. 15 - 7010RP (Petitioner Dania Entertainment Center, LLC) ;

15 - 7011RP (Petitioner Daytona Beach Kennel Club, Inc.) ;

15 - 7012RP (Petitioner Jacksonville Kennel Club, Inc.) ; 15 - 7013RP

(Petitioner Melbourne Greyhound Park, LLC) ; 15 - 7014RP

(Peti tioner Bonita - Fort Myers Corporation) ; 15 - 7015RP

( Petitioner Investment Corporation of Palm Beach) ; and 15 - 7016RP

(Petitioner West Flagler Associates, Ltd.) (the ÐLockwood

Petitioners Ñ ) . On the same day, the Foley & Lardner law firm

filed a Motion for Atto rneyÓs Fees and Costs on behalf of its

clients in DOAH Case No. 15 - 7022RP (Petitioners Tampa Bay Downs,

Inc. , and TBDG Acquisition, LLC , d/b/a TGT Poker and

Racetrack) (the ÐFoley & Lardner PetitionersÑ) . The Lockwood

Petitioners and the Foley & Lardner Pe titioners shall be

collectively referred to as ÐPetitioners.Ñ

On October 7, 2016, the Motions for AttorneyÓs Fees and

Costs, by then reassigned as DOAH Case Nos. 16 - 5682F, 16 - 5683F,

16 - 5684F, 16 - 5685F, 16 - 5686F, 16 - 5687F, 16 - 5688F, and 16 - 5689F ,

were c onsolidated and placed in abeyanc e pending the resolution

of DBPRÓs appeal of the F inal O rder.

On November 8, 2017, the c ourt entered its written opinion

in Department of Business and Professional Regulation, Division

of Pari - mutuel Wagering v. Dania E ntertainment Center, LLC,

et al. , 229 So. 2d 1259 (Fla. 1st DCA 2017) , affirming the F inal

O rder . T he c ourt also entered two separate O rder s granting the

motion s for attorneyÓs fees and costs filed by the Lockwood

Petitioners and the Foley & Lardner Pe titioners , and remanded

the matters to DOAH to assess the amount .

The final hearing was bifurcated into two phases, with the

first phase being a hearing to determine how the $50,000 cap on

attorneysÓ fees established by section 120.595(2) would be

applied in the consolidated multi - party litigation, and the

second phase to determine the amount of reasonable costs and

attorneysÓ fees to be awarded .

The bifurcated hearing on the effect of the $50,000 cap was

held on January 16, 2018, as scheduled . Facts w ere stipulated

by the parties, and the hearing was limited to argument taken to

supplement previously filed memoranda of law.

On January 26, 2018, a Partial Final Order (PFO) on Effect

of Statutory Cap on Fees was entered. Th e PFO provided that,

under the facts of this case, the $50,000 cap on attorneyÓs fees

established in section 120.595(2) establishes the maximum amount

that may be awarded to Petitioners, collectively, in this

proceeding.

After entry of the PFO, the parties agreed, subject to the

r ight to appeal the issue of the statutory cap upon entry of the

Final Order, that the capped amount of $50,000 was adequately

supported and should be awarded in compliance with the O rder of

the First DCA. The parties further agreed that Petitioners

would file their accounting of costs, w ith Respondent reserving

the right to contest whether such costs are properly taxable.

On March 30, 2018, Peti ti oners filed an Aff idavit and

Accounting of Taxable Costs , and an Affidavit of Joshua M.

Hawkes R egarding Amoun t of Costs setting forth the costs

asserted to have been incurred by Petitioners. Petitioners also

filed a supporting Memorandum of Law. On April 9, 2018,

Respondent countered with its Memorandum of Law Disputing the

Taxability of Certain Portions of Pet itionersÓ Claim for

AttorneyÓs Costs .

An Order Requiring Status Report was then entered inquiring

as to whether the parties believed an evidentiary hearing to be

necessary. On April 18, 2018, the parties filed a Joint Status

Report in which they stipul ated that: (1) the only remaining

issue for disposition by the undersigned is the taxability of

the costs associated with the Lower Cost Regulatory Alternative ,

which disposition would be appropriately based on the pleadings

filed; (2) all costs associate d with the deposition of Mr. Chuck

Taylor a re not taxable; and (3) all remaining costs sought by

Petitioners are taxable .

FINDINGS OF FACT

1. The Findings of Fact set forth in the Final Order

entered in DOAH Case Nos. 15 - 7010 through 15 - 7016 and 15 - 7022

are hereby adopted in this Final Order.

2. The PFO is hereby adopted and incorporated in this

Final Order as though set forth in full.

3. During the course of the rulemaking proceedings

regarding Ðdesignated playerÑ card games , Petitioners submi tted

a good - faith proposal for a lower cost regulatory alternative

(LCRA) indicating that the proposed rules would have a

significant monetary impact on Petitioners , which required

Respondent to prepare a statement of estimated regulatory costs

(SERC) purs uant to sections 120.54(3)(b) and 120.541 , Florida

Statutes.

4. Respondent did not prepare a SERC. That failure was

determined to be a material failure to foll o w applicable

rulemaking procedures and became a basis for the invalidation of

the proposed ru les.

CONCLUSIONS OF LAW

5 . Section 120.595(2) provides:

(2) CHALLENGES TO PROPOSED AGENCY RULES

PURSUANT TO SECTION 120.56(2). Ï If the

appellate court or administrative law judge

declares a proposed rule or portion of a

proposed rule invalid pursua nt to

s. 120.56(2), a judgment or order shall be

rendered against the agency for reasonable

costs and reasonable attorneyÓs fees . . . .

6. The Florida Supreme Court has established Statewide

Uniform Guidelines for Taxation of Costs in Civil Ac tions (Ðthe

GuidelinesÑ). App. II, Fla. R. Civ. P. Although not directly

adopted in the Uniform Rules of Procedure that govern

administ rative proceedings, they are nonetheless instructive and

persuasive in determining an award of costs under chapter 120.

7. The Guidelines place the burden of proof on the moving

party to show that Ðall requested costs were reasonably

necessary either to defend or prosecute the case at the

time the action precipitating the cost was taken.Ñ Id.

8. The Guidelines furt her classify litigation costs as

those Ð that s hould b e t axed, Ñ those Ðthat may be taxed,Ñ and

Ðthose that should not be taxed.Ñ Among the costs that should

be taxed, and the category closest to providing support for the

LCRA , are Ð[t] he costs of copies of documents filed (in lieu of

Ò actually cited Ó ) with the court, which are reasonably necessary

to assist the court in reaching a conclusion. Ñ

9. The LCRA w as prepared in an effort to compel Respondent

to prepare a SERC during the rulemaking proceeding. It was not

prepared in direct support of the challenge to the proposed rule

that ultimately emerged from the rulemaking. A determination

that such a cost was Ð reasonably necessary Ñ to prosecute the

rule challenge w ould be akin to concluding that the cost s of

drafting a contract are subject to an award in an action for its

breach. The undersigned is not prepared to extend reasonable

costs for a rule challenge proceeding to that degree.

See , e.g. , Citizens Prop. Ins. Corp. v. River Oaks Condo. II

Ass'n , 19 0 So. 3d 1110 (Fla. 2d DCA 2016) .

10. Likewise, the authors of the LCRA did not testify at

the final hearing, though they did testify at the rulemaking

hearing. Their expenditure of time in the development of the

LCRA was done for the direct purpose o f influencing the

direction of the rulemaking, not for reasons directly related to

the rule challenge , and their costs are not taxable . See , e.g. ,

McCoy v. City of Alachua , 991 So. 2d 983 (Fla. 1st DCA 2008) .

11. For the reasons set forth herein, it is concluded that

the costs associated with the LCRA are not taxable pursuant to

section 120.595(2).

CONCLUSION

Based on the foregoing Findings of Fact and Conclusions of

Law , and on the stipulations of the parties as set forth in the

April 18, 2018, Join t Status Report , the undersigned awards the

following to Petitioners, to be paid by Respondent :

a. $50,000.00 in attorneyÓs fees ;

b. $2,588.30 in costs associated with the depositions of

Jonathan Zachem, Steven Kogan, Joe Dillmore, Lisa Helms, Deborah

Gi ardina, and Jamie Shelton , as set forth in the Affidavit and

Accounting of Taxable Costs ; and

c. $1,576.87 in costs as set forth in the Affidavit of

Joshua M. Hawkes Regarding Amount of Costs .

DONE AND ORD ERED this 20th day of April , 201 8 , in

Talla hassee, 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 wit h the Clerk of the

Division of Administrative Hearings

this 20th day of April , 201 8 .

COPIES FURNISHED :

Caitlin R. Mawn, Esquire

Department of Business and

Professional Regulation

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2202

(eServed)

Thoma s J. Morton, Esquire

The Lockwood Law Firm

Suite 810

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

John M. Lockwood, Esquire

The Lockwood Law Firm

Suite 810

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Christopher M. Kise , Esquire

Foley & Lardner LLP

106 East College Ave, Suite 900

Tallahassee, Florida 32301

(eServed)

Kala Kelly Shankle, Esquire

The Lockwood Law Firm

Suite 810

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Joshua M. Hawkes, Esquire

Foley & Lardner LLP

Suite 900

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

James A. McKee, Esquire

Foley & Lardner LLP

Suite 900

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Devon Nunneley, Esquire

The Lockwood Law Firm

Su ite 810

106 East College Avenue

Tallahassee, Florida 32301

(eServed)

Louis Trombetta, Esquire

Department of Business and

Professional Regulation

Capital Commerce Center, Fifth Floor

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2202

(eServed)

Jame s A. Lewis, Esquire

Department of Business and

Professional Regulation

2601 Blair Stone Road

Tallahassee, Florida 32399

(eServed)

Robert Ehrhardt, Director

Division of Pari - Mutuel Wagering

Department of Business and

Professional Regulation

Capital C ommerce Center

2601 Blair Stone Road

Tallahassee, Florida 32399

(eServed)

Jason Maine, General Counsel

Department of Business and

Professional Regulation

Capital Commerce Center

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2202

(eServed)

Jonath an Zachem, Secretary

Department of Business and

Professional Regulation

Capital Commerce Center

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2202

(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 Appellate Procedure. Such proceedings are commenced by

filing one copy of a Notice of Administrative Appeal with the

agen cy clerk of the Division of Administrative Hearings and a

second copy, accompanied by filing fees prescribed by law, with

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

District Court of Appeal in the appellate district where the

party resides. The Notice of Administrative Appeal must be

filed within 30 days of rendition of the order to be reviewed.