16-006889RP Associated Industries Of Florida, Inc., Florida Farm Bureau Federation, Florida Retail Federation, Inc., Florida Trucking Association, Inc., And National Federation Of Independent Business, Inc. vs. Department Of Environmental Protection Status: Closed DOAH Final Order on Friday, December 30, 2016.

Summary: The proposed rule is invalid because the agency failed to follow rulemaking requirements, there is no statutory authority for the rule, it enlarges the law implemented, and it imposes invalid regulatory costs.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ASSOCIATED INDUSTRIES OF

FLORIDA, INC. ; FLORIDA FARM

BUREAU FEDERATION ; FLORIDA

RETAIL FEDERATION, INC. ; FLORIDA

TRUCKING ASSOCIATION, INC. ; AND

NATIONAL FEDERATION OF

INDEPENDENT BUSINESS, INC.,

Petitioners,

vs. Case No. 16 - 6889RP

DEPARTMENT OF ENVIRONMENTAL

PROTECTION,

Respondent.

_______________________________/

FINAL ORDER

At the request of the parties, the scheduled final hearing

was canceled and the case was submitted to Bram D. E. Canter,

Administrative Law Judge of the Division of Administrative

Hearings, for summary final order pursuant to section

120.57(1)(h), Florida Statutes (2016). Oral argument on the

partiesÓ motions for summary final order was heard on

Decem ber 20, 20 1 6, in Tallahassee, Florida.

APPEARANCES

For Petitioners: Gregory M. Munson, Esquire

Terry Cole, Esquire

Deborah Madden, Esquire

Gunster, Yoakley and Stewart, P.A.

215 South Monroe Street, Suite 601

Tallahassee, Florida 32301

For Respondent: Jeffrey Brown, Esquire

Francine Ffolkes, Esquire

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

STATEMENT OF THE ISSUE

The issue to be determined in this case is whether proposed

Florida Adm inistrative Code Rule 62 - 4.161 of the Department of

Environmental Protection (ÐDEPÑ) is an invalid exercise of

delegated legislative authority.

PRELIMINARY STATEMENT

On September 28, 2016, DEP caused to be published in the

Florida Administrative Register a notice of its intent to adopt

rule 62 - 4.161. On November 15, 2016, DEP caused to be published

in the Register a Notice of Change to the proposed rule.

Petitioners filed a timely petition to challenge the proposed

rule.

FINDINGS OF FACT

The Parties

1. D EP is the state agency granted regulatory and

enforcement powers in chapter 403, Florida Statutes, to control

air and water pollution.

2. Associated Industries of Florida, Inc. , is a non - profit

corporation. It is the largest association of business, trad e,

commercial, and professional organizations, partnerships, and

proprietorships in Florida .

3. Florida Farm Bureau Federation is a not - for - profit

agricultural organization. It is the StateÓs largest general -

interest agricultural association with about 1 45,000 members.

4. Florida Retail Federation, Inc., is a non - profit

corporation with over 4,000 members, which are retail companies

operating in Florida. The Florida Petroleum Marketers and

C onvenience Store Association is a division of the Federation.

5 . Florida Trucking Association, Inc. , is a non - profit

corporation whose members include about 26,000 trucking

companies.

6. National Federation of Independent Business, Inc. , is

the NationÓs leading small business association. It has about

10,500 member s operating in Florida.

7. A principal purpose of each Petitioner is to represent

the interests of its members before elected and appointed

officials of state government.

8. For each Petitioner, a substantial number of its members

are owners and operator s of installations or otherwise engaged in

activities capable of having Ðreportable releasesÑ as that term

is defined in the proposed rule.

The Proposed Rule

9. Proposed rule 62 - 4.161, entitled ÐPublic Notice of

Pollution,Ñ is lengthy and does not need to be set out here in

its entirety to understand the objections raised by Petitioners

or the defenses advanced by DEP. In summary, the proposed rule

requires a person who has a reportable release of a regulated

substance to inform DEP, the general public (via television and

newspaper), and the local government within 24 hours after the

release occurs. Within 48 hours of the release, additional

information must be provided to the same entities. If the

release goes beyond the property of the owner/operator , the

adjacent property owner must be notified within 24 hours, as well

as DEP and the local government. The proposed rule describes the

information that must be included in the notices and the penalty

for non - compliance with the ruleÓs requirements.

Rule making Authority

1 0 . The proposed rule identifies seven statutes as

authority for the rule.

(a) Section 377.22(2) . This provision grants authority to

DEP to adopt rules to implement and enforce the provisions of

chapter 377, which regulates oil and gas resources.

(b) Section 403.061(7) . This provision grants authority to

DEP to adopt rules to implement the provisions of the Florida Air

and Water Pollution Control Act, which is a part of chapter 403.

(c) Section 403.061(8) . This provision grants autho rity to

DEP to issue orders Ðnecessary to effectuate the control of air

and water pollution.Ñ

(d) Section 403.061(28) . This provision authorizes DEP to

ÐPerform any other act necessary to control and prohibit air and

water pollution.Ñ

(e) Section 403.06 2 . This provision grants DEP general

control over surface and ground waters under the jurisdiction of

the state insofar as their pollution may affect public health or

the public interest.

(f) Section 403.855(1) . This provision authorizes DEP to

adopt em ergency rules to protect the public health when DEP has

information that a contaminant may present an imminent hazard or

substantial danger to public or private water supplies.

(g) Section 403.861(9) . This provision authorizes DEP to

adopt rules to imple ment the provisions of the Florida Safe

Drinking Water Act, which is a part of chapter 403.

Law Implemented

1 1 . The proposed rule identifies eight statutes as the law

implemented by the rule. Two of these statutes, sections 403.62

and 403.861(9), have al ready been described above. The other six

statutes are described below.

(a) Section 377.21 . T his provision, in pertinent part,

authorizes DEP to collect data, make inspections, and Ð[p]rovide

for the keeping of records and making of reportsÑ related to oil,

gas, and other petroleum products.

(b) Section 403.061(16) . This provision requires DEP to

encourage voluntary cooperation to achieve the purposes of the

Florida Air and Water Pollution Control Act.

(c) Section 403.061(17) . This provision requires DEP to

encourage local government s to handle pollution problems on a

cooperative basis.

(d) Section 403.061(18) . This provision requires DEP to

conduct investigations and research related to pollution and its

causes, prevention, abatement, and control.

(e) Section 403.061(28) . This provision empowers DEP to

perform any act necessary to control and prohibit air and water

pollution.

(f) 403.855(3) . This provision authorizes DEP to establish

a program designed to prevent contamination or to minimize the

danger of contamination to potable water supplies.

1 2 . Within chapters 377 and 403, the only provisions that

specifically address reporting of spills or contamination require

that the report be made to DEP only. For example, section

377.371(2) , Florida Statutes, requires that a spill or leak of

oil, gas, other petroleum product, or waste material be reported

to the Division of Resource Management within DEP.

1 3 . Upon review of the proposed rule by the staff of the

Joint Administrative Procedures Committ ee (ÐJAPCÑ), DEP was asked

why the proposed rule was not an unlawful modification or

enlargement of section 377.371(2), which only requires notice to

DEP in the event of a spill or leak.

1 4 . Section 376.30702, entitled ÐContamination

notification,Ñ requir es notice only to DEP for several scenarios

where contamination is discovered:

The Legislature finds and declares that when

contamination is discovered by any person as

a result of site rehabilitation activities

[pursuant to statutes dealing with dry -

clean ing, petroleum storage, brownfields, and

other contamination], it is in the publicÓs

best interest that potentially affected

persons be notified of the existence of such

contamination. Therefore, persons

discovering such contamination shall notify

the dep artment . . . and the department shall

be responsible for notifying the general

public.

§ 376.30702(1), Fla. Stat.

1 5 . There are two other statutes that require notice to DEP

for actions which are somewhat analogous to a release of

pollution. Section 4 03.862(1)(b) provides that county health

departments must notify DEP of potential violations of standards

at any public water system. Section 403.93345(5) requires a

vessel owner or operator to notify DEP within 24 hours if the

vessel has struck or damage d a coral reef.

1 6 . For comparison, section 376.707(11) requires an

applicant for a DEP solid waste facility permit to notify the

local government and the general public by newspaper that it has

applied for the permit. This statute shows the Legislature has

require d broader notice when it want ed .

Lower Cost Regulatory Alternative

1 7 . DEP prepared a Statement of Estimated Regulatory Costs

(ÐSERCÑ) for the proposed rule and published notice of its

availability as required by section 120.541. In the SERC, it is

estimated that the total increased regulatory costs are $182,000

per year.

1 8 . On October 19, 2016, 27 regulated entities, including

Petitioners, submitted a Lower Cost Regulatory Alternative

(ÐLCRAÑ) to DEP. Florida Electric Power Coordinating Gro up,

Inc., also submitted a LCRA. Both LCRAs proposed that DEP be

responsible for notice to the general public, local governments

and adjacent property owners, which would result in lower costs

to the regulated community.

19 . In the SERC made available to the public in

November 2016, DEP stated that it reject ed the LCRA because

(1) the party who caused an unauthorized release of contaminants

is the more appropriate party to incur the reporting costs

imposed by the proposed rule, and (2) the party who relea ses

contaminants is in a better position to know details a bout the

substances th at were release d which must be included in the

report.

CONCLUSIONS OF LAW

2 0 . A party may move for summary final order when there is

no genuine issue as to any material fact. § 120.57(1)(h), Fla.

Stat. Petitioners and DEP moved for summary final order and the

Administrative Law Judge determined from the pleadings and

stipulated facts that there is no genuine issue of material fact

and the parties are entitled as a matter of l aw to a final order.

Standing

2 1 . 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 authority. § 120.56( 1)(a), Fla. Stat.

2 2 . Generally, to establish standing a party must show that

the challenged agency action would result in real and immediate

injury in fact. See Jacob v. Fla. Bd. o f Med. , 917 So. 2d 358,

360 (Fla. 1st DCA 2005). However, a less demandi ng test for

standing is applicable in rule challenge cases than in licensing

cases. In a rule challenge, the alleged injury does have to be

immediate. See NAACP v. Fla. Bd. o f Regents , 863 So. 2d 294, 300

(Fla. 2003).

2 3 . For association standing under chapter 120, it must be

shown that a substantial number of an associationÓs members, but

not necessarily a majority, have a substantial interest that

would be affected, that the subject matter of the proposed rule

is within the general scope of interests a nd activities for which

the association was created, and the relief requested is of the

type appropriate for the organization to receive on behalf of its

members. Fla. Home Builders AssÓn v. DepÓt of Labor and EmpÓt

Servs. , 412 So. 2d 351, 35 2 - 354 (Fla. 1 982) ( Refusing to allow a

trade or professional association to represent the interests of

its members in a rule challenge proceeding defeats th e

legislative purpose of chapter 120 to expand access to the

activities of governmental agencies b ecause it signif icantly

limit s the public's ability to contest the validity of agency

rules ) .

2 4 . DEP argues that Petitioners lack association standing

to challenge the proposed rule because PetitionersÓ members lack

individual standing. DEP contends that, because Petit ionersÓ

members do not know whether they will ever have a reportable

release that will require compliance with the proposed rule,

their alleged injury is speculative.

2 5 . DEPÓs argument is inconsistent with the law of standing

applied to quasi - legislative actions such as agency rules.

Proposed rule 62 - 4.161 is directed to identifiable persons who

handle the kinds of substances that are regulated by DEP . With

the proposed rule, DEP is pointing its finger directly at these

persons and telling them what the y must do and the penalty for

noncompliance . They have standing to point back and object. If

they lack standing, then no one would have standing. And because

Petitioners represent a substantial number of these members,

Petitioners have association stand ing to challenge the proposed

rule.

2 6 . DEP attempted to distinguish the NAACP case, but it is

strong support for PetitionersÓ standing. In NAACP , the Florida

Supreme Court held that the NAACP had association standing to

challenge a proposed rule related to university student

admissions because a substantial number of its members were

prospective applicants for admission to a Florida university and

each of them had individual standing to challenge the admissions

rule. The Supreme Court rejected the lower courtÓs opinion that

the impact to the prospective applicants was not a Ðreal and

sufficiently immediate injury in factÑ because they had not

applied for and been denied admission as a result of the

challenged rule. The Supreme Court did not interpret th e term

Ðsubstantially affectedÑ in section 120.56(1)(a) as requiring

more than being a person to whom the rule was directed and who

would be subject to the ruleÓs requirements if they applied for

admission. See also Ward vustees of the Internal Improv ement

Trust Fund , 651 So. 2d 1236, 1237 - 8 (Fla. 4th DCA 1995)(A real

and sufficiently immediate injury in fact arises when a

challenged rule directly regulates the challengerÓs occupational

field). Here, it is sufficient that a substantial number of

Petit ionersÓ members are persons to whom proposed

rule 62 - 4.161 is directed and who would have to comply with the

ruleÓs requirements if they ha ve a reportable release.

Burden and Standard of Proof

2 7 . A challenger has the burden of going forward with its

case for the invalidity of a proposed rule. § 120.56(2)(a), Fla.

Stat. Petitioners met this burden.

2 8 . The agency then has the burden to prove by a

preponderance of the evidence that the proposed rule is not an

invalid exercise of delegated legislative aut hority as to the

objection raised. Id.

29 . The proposed rule is not presumed to be valid or

invalid. § 120.56(2)(c), Fla. Stat.

PetitionersÓ Claims of Invalidity

3 0 . Whether a proposed rule serves a useful purpose is only

relevant when a challenger cla ims the rule is invalid because it

is arbitrary or capricious. Petitioners do not claim proposed

rule 62 - 4.161 is arbitrary or capricious. Therefore, whether the

proposed rule serves a useful purpose is irrelevant in this case.

3 1 . Petitioners invoke fo ur of the grounds for invalidity

that are outlined in section 120.52(8). Petitioners contend DEP

has Ðmaterially failed to follow the applicable rulemaking

procedures or requirementsÑ (section 120.52(8)(a)), DEP has

Ðexceeded its grant of rulemaking autho rityÑ

(section 120.52(8)(b)), the proposed rule Ðenlarges, modifies, or

contravenes the specific provisions of law implementedÑ

(section 120.52(8)(c)), and the proposed rule Ðimposes regulatory

costs on the regulated person, county, or city which could be

reduced by the adoption of less costly alternatives that

substantially accomplish the statutory objectives Ñ

(section 120.52(8)(f)).

Failure to Follow Rulemaking Procedures or Requirements

3 2 . PetitionersÓ argument in support of their claim that

DEP materi ally failed to follow applicable rulemaking procedures

or requirements arises from their claim that DEP wrongfully

rejected their LCRA. It is addressed later in the Final Order in

the discussion of the LCRA.

Exceeds Rulemaking Authority

3 3 . The seven sta tutes cited in the proposed rule as

rulemaking authority are general grants of authority. They are

inadequate authority for the proposed rule. Section 120.52(8)

states:

Statutory language granting rulemaking

authority or generally describing the powers

a nd functions of an agency shall be construed

to extend no further than implementing or

interpreting the specific powers and duties

conferred by the enabling statute.

In other words, only the specific powers and duties conferred by

statute reveal the allow able subjects of rulemaking. There is no

statute that specifically authorizes DEP to adopt a rule which

requires persons to notify entities other than DEP when there is

a release of a contaminant.

3 4 . DEP argues that the requirement to report pollution i s

so integral to DEPÓs ability to control pollution that DEPÓs

authority under section 403.061(7) to control pollution is

specific enough to authorize the proposed rule. However, as

explained in Southwest Florida Water Management District v. Save

the Mana tee Club, Inc. , 773 So. 2d 594 (Fla. 1st DCA 2000),

Ð [t] he question is whether the statute contains a specific grant

of legislative authority for the rule, not whether the grant of

authority is specific enough . Either the enabling statute

authorizes the r ule or not.Ñ Id. at 599 . See also DepÓt of

Health v. Bayfront Med . Ctr., Inc. , 134 So. 3d 1017 (Fla. 1st DCA

2013); Fla. DepÓt of High . Saf . & Motor Veh . v. JM Auto, Inc. ,

977 So. 2d 733 (Fla. 1st DCA 2008); State Bd. o f Tr ustees of the

Int ernal Imp rovem ent Trust Fund v. Day Cruise AssÓn, Inc. , 794

So. 2d 696 (Fla. 1st DCA 2001).

3 5 . Furthermore, because the statutes which a ddress the

reporting of contamination require only DEP to be notified, the

statutes which do not address reporting cannot reasonably be

interpreted to authorize a rule with broader notice requirements.

3 6 . DEP argues that its authority under section 403.061(8)

to Ðissue such orders as are necessary to effectuate the control

of air and water pollutionÑ is sufficient authority for the

p roposed rule, based on a theory that orders may evolve into

policies of general applicability and, thus, become rules. It

suffices to repeat that section 403.061(8) is a general grant of

authority and, therefore, insufficient to authorize the proposed

rul e.

3 7 . DEP argues that the Administrative Law Judge must give

deference to DEPÓs interpretation of the statutes it administers

as grant ing authority for the pr oposed rule. However, deference

to an agencyÓs interpretation is a judicial principle . It is n ot

required by any provision of the Administrative Procedure Act,

chapter 120, Florida Statutes. Deference to an agencyÓs

interpretation of law would be inconsistent with chapter 120Ós

emphasis on de novo proceedings and its prohibition against an

agencyÓ s rejection of an Administrative Law JudgeÓs conclusion of

law unless the agency makes a specific finding that its own

interpretation of law is Ðas or more reasonableÑ than the

rejected interpretation. See § 120.57(1)(l), Fla. Stat. (T here

would be no occ asion to reject an Administrative Law JudgeÓs

interpretation of a statute or rule if the ALJ was compelled to

defer to the interpretation advanced by the agency ) . In the

context of a challenge to a proposed rule, deference to an

agencyÓs interpretation wo uld conflict with chapter 120Ós

directive not to presume the validity of a proposed rule.

D eference to an agency is inappropriate when determining whether

there is specific authority for a rule. ÐEither the enabling

statute authorizes the rule or not.Ñ Save the Manatee Club,

Inc. , 773 So. 2d at 599.

3 8 . There is no rulemaking authority for proposed

rule 62 - 4.161. Therefore, the proposed rule is an invalid

exercise of delegated legislative authority under section

120.52(8)(b).

Enlarges the Specific Prov isions of Law Implemented

39 . The eight statutes cited in proposed rule 62 - 4.161 as

implemented by the rule do not contain specific language

regarding reporting requirements for the release of contaminants.

Therefore, the proposed rule is an invalid exer cise of delegated

legislative authority under section 120.52(8)(c) because it

enlarges the provisions of law implemented.

Imposes Unnecessary Regulatory Costs

40 . Petitioners contend that their LCRA proposal , which

calls for DEP to take responsibility for and incur the costs of

notifying the general public, local government, and adjacent

property owners , would reduce regulatory costs and, therefore,

DEP should have adopted the proposal. Petitioners also contend

that, because DEPÓs basis for rejecting the LCRA is not a valid

basis under section 120.541, DEP materially failed to follow

applicable rulemaking procedures and requirements.

41 . Petitioners argue that DEP could only reject the LCRA

if DEP did not agree that the LCRA would lower regulatory costs,

or because the LCRA would not substantially accomplish the

statutory objectives. DEP argues that no Ðmagic languageÑ is

required to reject a LCRA. However, it appears that

section 120.541 requires an agencyÓs stated reason s for rejecting

a LCRA to amount to one or both of the propositions stated above .

4 2 . It is reasonable inference that the phrase

Ðsubstantially accomplish the statutory objectivesÑ in section

120.52(8)(f) refers to the objectives in the rulemaking authority

for the proposed rule and in the law implemented by the rule.

4 3 . DEPÓs reasons for rejecting the LCRA, that (1) the

person who releases contaminants is the more appropriate party to

incur the associated costs since the release is unauthorized, and

(2) the person who releases contami nants is in a better position

to know details associated with the release that must be included

in the report, amount to a determination by DEP that the LCRA

would not substantially accomplish the statutory objectives.

4 4 . The analysis of whether a LCRA w as properly rejected is

a straightforward matter when the proposed rule is otherwise

valid. However, when, as in this case, it is determined there is

no rulemaking authority for a proposed rule and the rule

improperly enlarges the provisions of law implem ented, a SERC

versus LCRA analysis is pointless because the regulatory costs of

the proposed rule cannot be imposed. Th e proposed rule is an

invalid exercise of delegated legislative authority under section

120.52(8)(f) because it would impose unauthorize d regulatory

costs that c ould have b e e n reduced by the alternative of

withdrawing the rule .

4 5 . DEP materially failed to follow applicable rulemaking

procedures or requirements when it rejected the LCRA because the

LCRA proposed the only reporting require ment and associated cost

to the regulated community for which there is some statutory

authority. Therefore, the proposed rule is an invalid exercise

of delegated legislative authority under section 120.52(8)(a).

CONCLUSION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is concluded that proposed Florida Administrative Code

Rule 62 - 4.161 is an invalid exercise of delegated legislative

authority.

DONE AND ORDERED this 30th day of December , 2016 , in

Tallahassee, Leon County, Florida.

S

BRAM D. E. CANTER

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 30th day of December , 2016 .

COPIES FURNISHED:

Frederick L. Aschauer, Esquire

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahasse e, Florida 32399 - 3000

(eServed)

Gregory M. Munson, Esquire

Terry Cole, Esquire

Deborah Madden, Esquire

Gunster, Yoakley and Stewart, P.A.

Suite 601

215 South Monroe Street

Tallahassee, Florida 32301

(eServed)

Samantha Hunter Padgett, Deputy General Cou nsel

Florida Retail Federation

227 South Adams Street

Tallahassee, Florida 32301

(eServed)

Francine M. Ffolkes, Esquire

Department of Environmental Protection

The Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

(eServed)

Jeffrey Brown, Esquire

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

(eServed)

Deborah Madden, Esquire

Gunster, Yoakley and Stewart, P.A.

215 South Mon roe Street , Suite 601

Tallahassee, Florida 32301

Lee Crandall, Agency Clerk

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

(eServed)

Jonathan P. Steverson, Secretary

Department of Environmental Protection

Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399 - 3000

(eServed)

Ken Plante, Coordinator

Joint Administrative Procedures Committee

Room 680, Pepper Building

111 West Madison S treet

Tallahassee, Florida 32399 - 1400

(eServed)

Ernest Reddick, Chief

Alexandra Nam

Department of State

R. A. Gray Building

500 South Bronou g h Street

Tallahassee, Florida 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 Appellate Procedure. Such proceedings are commenced by filing

the original notice of adminis trative 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 App eal in the appellate

district where the agency maintains its headquarters or where a

party resides or as otherwise provided by law.