17-005882RX The Florida Horsemen&Apos;S Benevolent And Protective Association, Inc. vs. Department Of Business And Professional Regulation, Division Of Pari-Mutuel Wagering Status: Closed DOAH Final Order on Friday, April 12, 2019.

Summary: Department's drug classification and penalty rule is an invalid exercise of delegated legislative authority as described in section 120.52(8)(b) & (c), but is not arbitrary and capricious as described in section 120.52(8)(e).

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE FLORIDA HORSEMEN'S

BENEVOLENT AND PROTECTIVE

ASSOCIATION, INC.,

Petitioner,

vs. Case No. 17 - 5882RX

DEPARTMENT OF BUSINESS AND

PROFESSIONAL REGULATION,

DIVISION OF PARI - MUTUEL

WAGERING,

Respondent.

____ ___________________________/

FINAL ORDER

On January 29, 2018, Administrative Law Judge Lisa Shearer

Nelson held the first portion of a rule challenge pursuant to

section 120.56, Florida Statutes (2017), for the purpose of

issu ing a partial final order in this proceeding, which was

issued March 13, 2018, and affirmed by the First District Court

of Appeal on March 7, 2019. By O rder dated May 25, 2018, the

hearing scheduled to hear evidence related to the issues

remaining in the proceeding was canceled and outstanding issue s

have been determined based upon deposition testimony and other

exhibits filed by the parties.

APPEARANCES

For Petitioner: Bradford J. Beilly, Esquire

Bradford and Strohsahl, P.A.

1144 Southeast Third Av enue

Fort Lauderdale, Florida 33316

For Respondent: Louis Trombetta, Esquire

Department of Business and

Professional Regulation

2601 Blair Stone Road

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue for determinat ion in this proceeding is whether

Florida Administrative Code Rule 61D - 6.011 is an invalid exercise

of delegated legislative authority, in violation of section

120.52(8).

PRELIMINARY STATEMENT

On October 26, 2017, Petitioner, The Florida HorsemenÓs

Benevol ent and Protective Association, Inc. (FHBPA or

Petitioner), filed a Petition to Challenge Rule 61D - 6.011, F.A.C.

(2016) (Petition). On October 31, 2017, Chief Judge Robert S.

Cohen issued an Order of Assignment, assigning the matter to the

undersigned. O n November 7, 2017, a Notice of Hearing was

issued, scheduling the hearing for November 28, 2017.

On November 13, 2017, Respondent filed a Stipulated Motion

for Continuance, based upon pre - planned travel plans by

RespondentÓs counsel. After a scheduling c onference with the

parties on November 14, 2017, the continuance was granted and the

case was rescheduled for December 18, 2017. On December 8, 2017,

Respondent again requested a continuance, based upon attorney

resource issues. Although Petitioner origi nally objected to the

continuance, it withdrew its objection and the case was

rescheduled for January 29, 2018.

On January 12, 2018, Respondent moved for a stay of the

proceedings, citing its intention to amend the rule and the

conduct of rule development workshops. Petitioner opposed the

motion, noting that workshops had taken place over a yearÓs time

with no Notice of Proposed Rulemaking. A telephonic hearing was

conducted, after which an Order was entered bifurcating the

proceeding in order to consider the issue of whether Respondent

was required to adopt the recommended penalties of the

Association of Racing Commissioners International, Inc. (ARCI),

(ARCI Recommended Penalties) provided in the ARCI Uniform

Classification Guidelines for Foreign Substanc es and Recommended

Penalties and Model Rule, version 8 (ARCI Document) in its rule.

It was agreed at that time that, depending on the ruling made in

the Partial Final Order, a separate hearing would be conducted to

address the remaining issues raised in t he Petition.

On January 25, 2018, the parties filed a Joint Pre - hearing

Stipulation that contained a limited number of facts for which no

evidence at hearing would be required, and those stipulated facts

have been incorporated into the f indings of f act b elow. The

hearing for the first issue was co nducted as scheduled on

January 19, 2018, at which time Petitioner presented the

testimony of Edward Martin by telephone. Joint Exhibits 1

through 6, PetitionerÓs Exhibit 7, and RespondentÓs Exhibit 8

were admi tted into evidence.

On February 1, 2018, Respondent filed a copy of the

Notice of Proposed Rule, which includes language to amend

rule 61D - 6.011, which was published in the Florida Administrative

Register, Volume 44, Number 22, on February 1, 2018.

The Tr anscript of the proceeding was filed February 9, 2018.

Both parties timely filed their proposed partial final orders on

February 19, 2018.

On March 13, 2018, a Partial Final Order was issued which

found that the rule constituted an invalid exercise of

legislatively delegated authority, in that it contravenes section

550.2415(7)(c), Florida Statutes, by failing to incorporate by

reference the ARCI Recommended Penalties. The Partial Final

Order directed the parties to file a status report no later than

M arch 22, 2018, advising whether a hearing was still required to

address the remaining issues alleged in the Petition to Challenge

Rule 61D - 6.011, F.A.C. ; and, if so, provide mutually agreeable

dates for holding that hearing. Jurisdiction was retained for

the purpose of determining whether attorneyÓs fees and costs are

warranted , and, if so, the amount.

On April 6, 2018, the Department appealed the Partial Final

Order to the First District Court of Appeal, where it was

docketed as Case No. 1D18 - 1434.

Th e remaining issues alleged in the Petition were scheduled

for hearing to take place on May 23, 2018. However, because of a

series of unprecedented storms occurring down the e astern

s eaboard of the United States, PetitionerÓs witnesses were unable

to appea r at the hearing because of canceled and/or delayed

flights. A status conference was held on May 22, 2018, wherein

the parties advised of the flight dilemma, and after discussion

with the parties, it was agreed that Petitioner would submit the

testimony o f its witnesses by deposition, the hearing would be

canceled, and the remaining issues in the case would be decided

based upon the deposition testimony and other exhibits submitted.

The depositions of the witnesses were filed on June 20,

2018, and after a n unopposed motion f or extension of time, the

partiesÓ Proposed Partial Final Orders were filed on July 13,

2018. Because a portion of the case remained on appeal, thus

preventing the issuance of a Final Order while the appeal

remained pending, the case w as placed in abeyance by O rder dated

August 16, 2018.

On March 7, 2019, the First District Court of Appeal issued

an O pinion affirming the Partial Final Order, and after issuance

of the M andate on March 28, 2019, an Order to Show Cause was

issued directing the parties to show cause, given that the rule

in question has since been amended, why the remaining issues are

not moot. After review of both responses, a determination on the

merits of PetitionerÓs claim is included in this Final Order.

All references to the Florida Statutes are to the 2017

codification.

FINDING S OF FACT

1. Petitioner, FHBPA, is a Florida not - for - profit

corporation created to advance, foster, and promote the sport of

thoroughbred horse racing in the State of Florida. FHBPAÓs

membersh ip includes over 200 Florida - licensed horse trainers and

over 5,000 Florida - licensed horse owners, and has associational

standing to file and prosecute actions on behalf of its members.

Respondent has not challenged FHBPAÓs standing to bring this

proceedi ng.

2. Respondent, Department of Business and Professional

Regulation, Division of Pari - Mutuel Wagering (PMW), is the state

agency charged with the regulation of pari - mutuel wagering in the

State of Florida, pursuant to section 20.165 and chapter 550,

Flo rida Statutes.

3. The question to be decided in this proceeding is what

the Legislature meant when it amended section 550.2415(7) in

2015, and whether rule 61D - 6.011 carries out the legislative

directive it contains.

4. Before the 2015 legislative sessio n, section 550.2415

stated, in pertinent part:

(3)(a) Upon the finding of a violation of

this section, the division may revoke or

suspend the license or permit of the violator

or deny a license or permit to the violator;

impose a fine against the violator in an

amount not exceeding $5,000 ; require the full

or partial return or the purse, sweepstakes,

and trophy of the race at issue; or impose

against the violator any combination of such

penalties. The finding of a violation of

this section in no way prohi bits a

prosecution for criminal acts committed.

* * *

(7)(e) The division may, by rule, establish

acceptable levels of permitted medications

and shall select the appropriate biological

specimens by which the administration of

permitted medication is monitored.

* * *

(12) The division shall adopt rules to

implement this section. The rules may

include a classification system for

prohibited substances and a corresponding

penalty schedule for violations.

(13) Except as specifically modified by

s tatute or by rules of the division, the

Uniform Classification Guidelines for Foreign

Substances, revised February 14, 1995, as

promulgated by the Association of Racing

Commissioners International, Inc., is hereby

adopted by reference as the uniform

classi fication system for class IV and V

medications. (Emphasis added).

5. During the 2015 legislative session, the Legislature

substantially amended section 550.2415. Ch. 15 - 88, § 1, Laws of

Fla. Not all of the changes made are germane to the challenge at

issue here, but the amendments to subsections (3) and (7) are

critical:

(3)(a) Upon the finding of a violation of

this section, the division may revoke or

suspend the license or permit of the violator

or deny a license or permit to the violator;

impose a fine against the violator in an

amount not exceeding the purse or sweepstakes

earned by the animal in the race at issue or

$10,000, whichever is greater; require the

full or partial return of the purse,

sweepstakes, and trophy of the race at issue;

or imp ose against the violator any

combination of such penalties. The finding

of a violation of this section does not

prohibit a prosecution for criminal acts

committed.

* * *

(7)(a) In order to protect the safety and

welfare of racing animals and the in tegrity

of the races in which the animals

participate, the division shall adopt rules

establishing the conditions of use and

maximum concentrations of medications, drugs,

and naturally occurring substances identified

in the Controlled Therapeutic Medicatio n

Schedule, Version 2.1, revised April 17,

2014, adopted by the Association of Racing

Commissioners International, Inc. Controlled

therapeutic medications include only the

specific medications and concentrations

allowed in biological samples which have be en

approved by the Association of Racing

Commissioners International, Inc., as

controlled therapeutic medications.

* * *

(c) The division rules must include a

classification system for drugs and

substances and a corresponding penalty

schedule for vi olations which incorporates

the Uniform Classification Guidelines for

Foreign Substances, Version 8.0, revised

December 2014, by the Association of Racing

Commissioners International, Inc. The

division shall adopt laboratory screening

limits approved by t he Association of Racing

Commissioners International, Inc., for drugs

and medications that are not included as

controlled therapeutic medications, the

presence of which in a sample may result in a

violation of this section. (Emphasis added).

6. The tit le page of the ARCI Document states, ÐUniform

Classification Guidelines for Foreign Substances and Recommended

Penalties and Model Rule.Ñ Each of the remaining pages of the

ARCI Document, including those pages that encompass the ARCI

Recommended Penalties , identifies the ARCI Document as the

ÐUniform Classification Guidelines for Foreign Substances.Ñ The

Notes Regarding Classification Guidelines, found at page ii,

states that ÐWhere the use of a drug is specifically permitted by

a jurisdiction, then the j urisdictionÓs rule supersedes these

penalty guidelines .Ñ (Emphasis added).

7. Rules 61D - 6.011 and 61D - 6.008 were amended in 2016, in

response to the amendments to section 550.2415. Rule 61D - 6.008

addresses permitted medications allowed for horses, and r ule 61D -

6.011 addresses the penalties to be imposed for drug violations.

Relevant portions of rule 61D - 6.011 provide:

(1) The penalties in this rule shall be

imposed when the stewards or the Division

finds that the following substances have

been identifi ed by the state laboratory in a

urine sample or blood sample collected from

a horse participating in a pari - mutuel

event:

(a) Any medication listed in subsection

61D - 6.008(2), F.A.C.

[1. - 3. provide penalty ranges for first,

second, and third offenses]

( 2) The penalty for any medication or drug

which is not described in subsection (1)

above shall be based upon the classification

of the medication or drug found in the

Uniform Classification Guidelines for Foreign

Substances, revised December 2014, as

prom ulgated by the Association of Racing

Commissioners International, Inc., which is

hereby incorporated and adopted herein by

reference, https://flrules.org/Gateway/

reference.asp?No=Ref - 06400,

www.myfloridalicense.com/dbpr/pmw or by

contacting the Department of Business and

Professional Regulation, 2601 Blair Stone

Road, Tallahassee, Florida 32399.

The penalty schedule shall be as follows:

(a) Class I substances:

1. First violation of $3,000 to $5,000 fine

this chapter and suspension of

license 90 days to

o ne year, or

revocation of

license;

2. Second violation of $4,000 to $5,000 fine

this chapter and suspension of

license of no less

than one year, or

revocation of

license.

3. Third or subsequent $5,000 to $10,000

violation of this chapter fine and revoc ation

of license.

(b) Class II substances:

1. First violation of $250 to $1,000 fine

this chapter and suspension of

license zero to 180

days;

2. Second violation of $500 to $1,000 fine

this chapter and suspension of

license of no less

than 180 d ays, or

revocation of

license;

3. Third or subsequent $1,000 to $5,000 fine

violation of this chapter and suspension of

license of no less

than one year, or

revocation of license

(c) Class III substances:

1. First violation of $300 to $ 500 fine;

this chapter

2. Second violation of $500 to $750 fine and

this chapter suspension of license

zero to 30 days, or

revocation of

license;

3. Third or subsequent $750 to $1,000 fine

violation of this chapter and suspension of

license zero to 180

days, or rev ocation

of license.

(d) Class IV or V

substances:

1. First violation of $100 to $250 fine;

this chapter

2. Second violation of $250 to $500 fine and

this chapter suspension of license

zero to 10 days;

3. Third violation of $500 to $1,000 fine

this chapter and suspension of

license zero to 60

days.

(3) The Division may consider mitigation or

aggravation to deviate from these penalty

guidelines.

* * *

(5) Absent mitigating circumstances, the

stewards or the Division shall order the

retur n of any purse, prize, or award from any

pari - mutuel event for redistribution when a

positive test for a drug or medication

described in paragraphs (1)(a), (1)(b),

(2)(a), or (2)(b) is reported by the state

laboratory and confirmed through the hearing

proc ess.

(6) The stewards or the Division may order

the return of any purse, prize, or award for

redistribution when the positive test of a

drug or medication reported by the state

laboratory is not described in paragraphs

(1)(a), (1)(b), (2)(a), or (2)(b) of this

rule. In the event the stewards or Division

orders the return of the purse, prize, or

award for redistribution as described in this

subsection, the reason(s) for the

redistribution shall be provided in writing.

(Emphasis added).

8. Rule 61D - 6.011 varies from the penalty provisions in the

ARCI Recommended Penalties in several respects. First, in the

drug classification tables in the ARCI Document, which the rule

incorporates by reference, there are columns to identify the drug

or substance; trade name, if any; drug class; and penalty class.

Not all drugs in a drug class are in the same penalty class. For

example, all class 1 drugs are in penalty class A, with the

exception of cocaine, morphine, and strychnine, which are in

penalty class B. The m ajority of class 2 drugs are also in

penalty class A, with the exception of caffeine, carisoprodol,

diazepam, hydroxyzine, ketamine, levamisole, lidocaine,

mepivacaine, and romifidine, which are in penalty class B.

Class 3 drugs are generally split betwee n penalty classes A and

B, and class 4 drugs include both penalty classes B and C.

Similarly, class 5 drugs are split between penalty classes C

and D. It is clear from the text of the ARCI Document that the

drug classifications and the penalty guidelines are intended to

work together as a comprehensive approach to the impermissible

drugging of racing horses.

9. In the Recommended Penalty and Model Rule portion of the

ARCI Document, there are separate penalties recommended for

licensed trainers and for o wners. For trainers, class A

penalties include a minimum fine of $10,000 or 10% of the total

purse, whichever is greater, absent mitigating circumstances, to

a maximum of $25,000 or 25% of the purse with aggravating factors

for a first offense. For a sec ond offense in any jurisdiction,

the fine amount is $25,000 or 25% of the total purse, whichever

is greater, absent mitigating circumstances, and may increase

with aggravating circumstances to a maximum of $50,000 or 50% of

the purse, whichever is greater. For a third offense in any

jurisdiction, the minimum fine is $50,000 or 50% of the total

purse, whichever is greater, absent mitigating circumstances, and

may increase with aggravating circumstances to a maximum of

$100,000 or 100% of the purse, whicheve r is greater.

10. For owners, the first and second offenses include

disqualification and loss of purse. The penalty for a third

offense includes disqualification, loss of purse, and a $50,000

fine.

11. For owners and trainers, the monetary penalties m ay

exceed the maximum permitted under section 550.4215(3), which

authorizes a fine not exceeding the purse or sweepstakes earned

by the animal, or $10,000, whichever is greater.

12. The parties have submitted the House and Senate Bill

analyses that addre ss the amendment to section 550.2415 at issue

here. 1/ The House of Representatives Final Bill Analysis for

CS/HB 239 includes the following statements:

The bill changes the maximum fine for

violations from $5,000 to $10,000 or the

amount of the purse, whi chever is greater.

The bill also reduces the time for the

division to begin administrative prosecutions

for violations from 2 years to 90 days.

The bill requires the division to adopt

the Association of Racing Commissioners

International (ARCI) rules re garding the

medications, drugs, and naturally occurring

substances given to race animals, including

a classification system for drugs that

incorporates ARCIÓs Penalty Guidelines

for drug violations, and updates current

methodologies used in testing

proce dures. . . .

* * *

Effect of Proposed Changes

* * *

The bill requires that the penalty schedule

for violations must incorporate the Uniform

Classification Guidelines for Foreign

Substances, Version 8.0, revised

December 2014, by the ARCI. Thes e guidelines

are Ðintended to assist stewards, hearing

offices and racing commissioners in

evaluating the seriousness of alleged

violations of medication and prohibited

substance rules. . . .Ñ

13. The bill analysis for CS/SB 226 contains similar

provisi ons stating that the ARCI Penalty Guidelines must be

incorporated into a rule adopted by Respondent.

14. The penalty guidelines included in rule 61D - 6.011 do not

incorporate the ARCI Recommended Penalties.

15. The PMWÓs website includes a listing of st atutes and

rules, with links to the rules. Included in that list is a

statement that ÐThe Association of Racing Commissioners

International, Inc. ÒUniform Classification Guidelines for Foreign

Substances and Recommended Penalties and Model RuleÓ is adopte d

and incorporated by rule.Ñ

16. Notwithstanding this statement, the ARCI Recommended

Penalties are not incorporated into rule 61D - 6.011 or any other

rule identified in this proceeding.

17. The rule provides for consideration of a number of

aggravat ing and mitigating circumstances, when warranted, that

allow for deviation from the identified penalty guidelines.

18. As noted above, rule 61D - 6.011(1) refers to the

medications listed in rule 61D - 6.008. Rule 61D - 6.008 provides in

pertinent part:

Permi tted medications for horses:

(1) The prescription medications defined in

this rule shall be permitted under the

conditions set forth to conserve and protect

the health of the horse which is entered to

race. All such medications shall be

procured and admi nistered by a licensed

veterinarian, except where a valid

prescription or dispensing occurs in

compliance with the requirements of Chapter

474, F.S.

(2) The following permitted medications at

concentrations less than or equal to the

following schedule sha ll not be reported by

the racing laboratory to the Division as a

violation of Section 550.2415, F.S.

[list of medications and concentration

levels for each one].

Thus, subsection (1) of rule 61D - 6.011 addresses violations where

too much of a permitted me dication is found in a race day sample,

whereas subsection (2) addresses violations based upon prohibited

medications.

19. Petitioner presented the testimony of Scott Hay and

Edward Martin in support of its contention that the penalty

guidelines adopted by PMW are arbitrary and capricious. Dr. Scott

Hay is a veterinarian who has worked with thoroughbred racehorses

since 1988. He is a member of the American Association of Equine

Practitioners, the American Veterinary Medical Association, and

the Florida Veterinary Association. He serves as co - chair on the

scientific advisory committee for the Racing Medication and

Testing Consortium, which worked on the development of the ARCI

Document. Dr. Hay was familiar with the ARCI Document and

described the proce ss used to determine threshold levels for

medications. He testified that the scientific advisory committee

relied extensively on the expertise of some of its members to

determine the appropriate levels of medications that would be

appropriate under the dr ug classifications. On the other hand,

while he is familiar with PMW Ós rules and was involved in the

rulemaking workshops when the rules were first amended after the

2015 statutory change, he did not believe that he made any

comments on these particular r ules during that process. He did

not provide any testimony that provided information on what

methodology PMW used when formulating its penalty guidelines.

20. Mr. Martin works for the Association of Racing

Commissioners International as its president and has done so since

2005. He testified that the Racing Medication and Testing

Consortium is a consortium of racing industry organizations that

advises ARCI and regulatory entities on medication and anti - doping

policies. He described the process by whic h the scientific

advisory committee meets and considers recommendations on changes

to policies. According to Mr. Martin, the scientific advisory

committee relies on the collective judgment of the

pharmacologists, chemists, toxicologists, and veterinarians to

provide advice and expertise about appropriate public policy. The

controlled therapeutic medication schedule is an attempt to

provide some consistency in the regulation of some commonly used

medications that are considered appropriate for equine care. The

schedule recommends a threshold for testing, and only if that

threshold is exceeded , is there a violation of the rules of

racing.

2 1 . Mr. Martin pointed to the reference in rule 61D - 6.011 to

rule 61D - 6.008. He testified that what Ðstruck himÑ ab out the

Florida rules is that rule 61D - 6.008 encompasses the controlled

therapeutic list, but rule 61D - 6.011(1) appears to provide the

same penalty for any violation of a substance itemized in 61D -

6.008. This treatment is not consistent with ARCIÓs penalt y

schedule, but Mr. Martin did not know whether Florida made a

conscious decision to impose a different recommended penalty than

what is contained in the ARCI Document, and did not know the

intent of the drafters with respect to the rule.

CONCLUSIONS OF L AW

2 2 . The Division of Administrative Hearings has

jurisdiction over the parties and the subject matter of this

proceeding pursuant to sections 120.56, 120.569, and 120.57(1),

Florida Statutes.

2 3 . Petitioner has standing to participate in this case.

Se ction 120.56 allows a person who is substantially affected by a

rule or agency statement to initiate a challenge. To establish

standing under the Ðsubstantially affectedÑ test, generally a

party must demonstrate that: 1) the rule will result in a real

an d immediate injury in fact, and 2) the alleged interest is

within the zone of interest to be protected or regulated. Jacoby

v. Fla. Bd. of Med. , 917 So. 2d 358 (Fla. 1st DCA 2005); see also

Fla. Bd. of Med. v. Fla. Acad. of Cosmetic Surgery, Inc. , 808 So.

2d 243, 250 (Fla. 1st DCA 2002), superseded on other grounds ,

DepÓt of Health v. Merritt , 919 So. 2d 561 (Fla. 1st DCA 2006).

2 4 . With respect to associational standing, the Supreme

Court of Florida has stated that to meet the requirements of

section 120 .56(1), an association must demonstrate that a

substantial number of its members, although not necessarily a

majority, are Ðsubstantially affectedÑ by the challenged rule.

The subject matter of the rule must be within the associationÓs

general scope of in terest and activity, and the relief requested

must be of the type appropriate for a trade association to

receive on behalf of its members. NAACP, Inc. v. Fla. Bd. of

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

AssÓn v. DepÓt of Labor & Em p. Sec. , 412 So. 2d 351 (Fla. 1982).

That standard has been met here, and the parties do not dispute

PetitionerÓs standing to participate in this proceeding.

25 . Petitioner is challenging an existing, as opposed to a

proposed, rule. Section 120.56(3) re quires Petitioner to prove

by a preponderance of the evidence that the existing rule is an

invalid exercise of delegated legislative authority as to the

objections raised.

26 . A preponderance of the evidence has been defined as

Ðthe greater weight of the evidence,Ñ or evidence that Ðmore

likely than notÑ tends to prove a certain proposition. Gross v.

Lyons , 763 So. 2d 276, 280 n.1 (Fla. 2000).

27 . Section 120.56(1)(a) provides that any person

substantially affected by a rule may seek an administrative

de termination of the invalidity of the rule on the ground that

the rule is an invalid exercise of delegated legislative

authority. Section 120.52(8) defines Ðinvalid exercise of

delegated legislative authority.Ñ It provides:

(8) ÐInvalid exercise of deleg ated

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 following applies:

(a) The agency has materially failed to

follow the applicable rulemaking procedures

or requirements set forth in this chapter;

(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 enlarge s, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required 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;

(e) The rule is arbitrary or capricious. A

rule is arbitrary if it is not supported by

logic or the necessary facts; a rule is

capricious if it is adopted without thought

or reason or is irrational; or

(f) The rule imposes 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.

A grant of rulemaking authority is necessary

but not sufficient to allow an agency to

adopt a rule; a specif ic 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

reasonably 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 statute.

28 . In its Petition, Petitioner identified three bases in

section 120.52(8) for invalidating the rule: that PMW exceeded

its grant of authority within the meaning of section

120.52(8)(b); that the rule modifies and contravenes the express

directive of sectio n 550.2415(7)(c), in violation of section

120.52(8)(c); and that the rule is arbitrary and capricious in

violation of section 120.52(8)(e). As provided by the Order

dated January 19, 2018, th e Partial Final Order only addresse d

whether rule 61D - 6.011 is a n invalid exercise of delegated

legislative authority in violation of section 120.52(8)(c).

Whether Section 550.2415(7)(c) is Ambiguous

29 . In order to resolve whether rule 61D - 6.011 modifies or

contravenes the directive in section 550.2415(7)(c) in vi olation

of section 120.52(8)(c), it must be determined whether the

directive in section 550.2415(7)(c) is ambiguous. A statute is

ÐambiguousÑ when its language is subject to more than one

reasonable interpretation and may permit more than one outcome.

Ni carry v. Eslinger , 990 So. 2d 661, 664 (Fla. 5th DCA 2008). As

stated by the Supreme Court of Florida:

The polestar of a statutory construction

analysis is legislative intent. See Borden

v. East - European Ins. Co . , 921 So. 2d 587,

595 (Fla. 2006). To discern legislative

intent, this Court looks first to the plain

and obvious meaning of the statute's text,

which a court may discern from a dictionary.

See Rollins v. Pizzarelli , 761 So. 2d 294,

297 - 98 (Fla. 2000) . If th at language is

clear and unambiguous and conveys a clear and

definite meaning, this Court will apply that

unequivocal meaning and not resort to the

rules of statutory interpretation and

construction. See Holly v. Auld , 450 So. 2d

217, 219 (Fla. 1984). If , however, an

ambiguity exists, this Court should look to

the rules of statutory construction to help

interpret legislative intent, which may

include the examination of a statute's

legislative history and the purpose behind

its enactment. See, e.g. , Gulfs tream Park

Racing Ass'n v. Tampa Bay Downs, Inc . , 948

So. 2d 599, 606 - 07 (Fla. 2006) .

W. Fla. RegÓl Med. Ctr., Inc. v. See , 79 So. 3d 1, 9 (Fla. 2012);

see also Kasischke v. State , 991 So. 2d 803, 807 (Fla. 2008);

Daniels v. Fla. DepÓt of Health , 898 So. 2d 61, 64 - 65 (Fla.

2005); DepÓt of Rev. v. Cent . Dade Malpractice Trust Fund , 673

So. 2d 899, 900 (Fla. 1st DCA 1996).

3 0 . Respondent argues that the legislative intent can be

discerned from the plain language of section 550.2415(7)(c), and

focuses on th e LegislatureÓs use of the word ÐaÑ before the

phrase Ðpenalty schedule.Ñ PMW contends that because the word

ÐaÑ connotes Ðnot identified,Ñ Ðundetermined,Ñ or Ðunspecified,Ñ

it could then adopt its own penalty schedule as opposed to the

one in the ARCI Do cument.

3 1 . It is noted that the word ÐaÑ is used before both the

reference to the penalty schedule and the classification system

for drugs, and yet Respondent clearly recognizes its

responsibility to incorporate by reference into its rules the

drug clas sifications in the ARCI document.

3 2 . More importantly, RespondentÓs argument ignores the

order of the terms used in section 550.2415. Subsection (7)(c)

states that the Ðdivision rules must include a classification

system for drugs . . . and a corresp onding penalty schedule for

violations which incorporates the Uniform Classification

Guidelines for Foreign Substances.Ñ (Emphasis added). PMWÓs

reading of this provision would have the phrase Ðwhich

incorporates the Uniform Classification Guidelines for Foreign

SubstancesÑ omit the reference to penalty guidelines in order to

describe only the classification system. Such a strained reading

ignores the doctrine of the last antecedent, which provides,

"relative and qualifying words, phrases and clauses are to be

applied to the words or phrase immediately preceding, and are not

to be construed as extending to, or including, others more

remote." Kasischke v. State , 991 So. 2d 803, 811 (Fla. 2008)

(quoting City of St. Petersburg v. Nasworthy , 751 So. 2d 772, 774

(Fla. 1st DCA 2000)); Jacques v. DepÓt of ProfÓl Reg. , 15 So. 3d

793, 796 (Fla. 1st DCA 2009).

3 3 . Such an interpretation not only strains the rules of

grammar, but requires a rewording of section 550.2415, something

that an administrative law judg e is not empowered to do. It is

not within the province of this administrative law judge to write

the language related to penalty schedules out of the statute, or

to reword the statute to suit RespondentÓs interpretation. A

Ðstatute should be interpreted to give effect to every clause in

it, and to accord meaning and harmony to all of its parts.Ñ Fla.

DepÓt of Envtl. Prot. v. ContractPoint Fla. Parks, LLC , 986 So.

2d 1260, 1265 (Fla. 2008).

3 4 . Respondent also contends that because section

550.2415(7 )(c) omits the words Ðand Recommended Penalties and

Model RulesÑ in its description of the ARCI Document, this

omission is an indication that PMW need not incorporate the

penalty schedules. As noted by Petitioner, the shortened title

of the ARCI Document used by the Legislature appears on every

page of the ARCI Document. The LegislatureÓs use of the

shortened name does not indicate an intention to only require

incorporation of the drug classifications portion of the ARCI

Document. If that had been the ca se, the Legislature would not

have placed the reference to the penalty schedules immediately

prior to the phrase, Ðwhich incorporates the Uniform

Classification Guidelines for Foreign Substances.Ñ

35 . It is found that the plain language of section

550. 2415(7)(c) requires the incorporation of the entire ARCI

Document, and not just the drug classifications.

Legislative Intent

36 . Even if it was determined that the language of section

550.2415(7)(c) was ambiguous, which it is not, the staff analyses

of both the House and the Senate reinforce the finding that the

intent of both chambers was for the penalty schedules to be

incorporated by reference into PMWÓs rules. The Final Bill

Analysis specifically states that Ðthe bill requires that the

penalty sched ule for violations must incorporate the Uniform

Classification Guidelines for Foreign Substances, Version 8.0,

revised December 2014, by the ARCI.Ñ While it is not necessary

to resort to evidence of legislative intent to determine the

meaning of section 5 50.2415(7)(c), the staff analyses submitted

by the parties clearly supports the finding that the Legislature

intended that the entire ARCI Document must be incorporated by

reference in RespondentÓs rules.

Conflict between Subsections (3) and (7)(c)

37 . Respondent points out that some of the monetary

penalties included in the ARCI Recommended Penalties may exceed

the statutory limit for fines provided in section 550.2415(3).

That section authorizes fines Ðin an amount not exceeding the

purse or sweepstak es earned by the animal in the race at issue or

$10,000, whichever is greater.Ñ The ARCI Recommended Penalties

for c lass A penalties with respect to trainers provide for a

maximum of $25,000 or 25% of purse for a first offense, to a

maximum of $100,000 or 100% of purse for a third offense. No

evidence was provided with respect to the monetary value of

purses awarded in races in Florida.

38 . Rules of statutory construction require that a statute

should be interpreted to give effect to every clause in it and to

accord meaning and harmony to all of its parts. Larimore v.

State , 2 So. 3d 101, 106 (Fla. 2008). A statutory subsection

cannot be read in isolation, but must be read within the context

of the entire section in order to determine legislative inten t

for the provision. Id. at 114. If one portion of a statute

appears clear, when read in isolation, but is inconsistent with

other parts of the same statute, then the entire statute must be

examined in order to ascertain the overall legislative intent.

ContractPoint Fla. Parks , 986 So. 2d at 1265 - 1266.

39 . Assuming for the sake of discussion that there are

purses that are less than $10,000, then there may be instances

where imposing the penalty identified in the ARCI Recommended

Penalties would exceed the authority granted in section

550.2415(3).

40 . The undersigned is required to construe two apparently

contradictory statements in harmony if there is any Ðfair,

strict, or liberal constructionÑ that can achieve a reasonable

field of operation for bo th without destroying their evident

intent and meaning. There must be a hopeless inconsistency

between the two provisions before rules of construction are

applied to defeat the plain language of one of them. DepÓt of

Educ. v. Educ. Charter Found. of Fla. , Inc. , 177 So. 3d 1036,

1039 (Fla. 1st DCA 2015); Knowles v. Beverly Enters. - Fla., Inc. ,

898 So. 2d 1, 9 (Fla. 2004).

41 . Respondent points to the conflict between subsections

(3) and (7)(c) as a basis for not incorporating the ARCI

Recommended Penaltie s into its rule. This option, however, is

unnecessary when a less intrusive compromise can be reached.

Respondent can give credence to both provisions by specifying in

its rule that, to the extent the recommended penalty identified

in the ARCI Recommende d Penalties exceeds the penalty allowed in

section 550.2415(3), then the limit provided in section

550.2415(3) would prevail. In any event, the perceived conflict

does not divest Respondent of its responsibility pursuant to

section 550.2415(7)(c) to incor porate the entire ARCI Document

into its rules.

42 . Rule 61D - 6.011 is an invalid exercise of legislatively

delegated authority as defined in section 120.52(8)(c), in that

it contravenes section 550.2415(7)(c) by failing to incorporate

by reference the ARCI Recommended Penalties. For the same

reasons, the rule exceeds the PMW Ós grant of authority in

violation of section 120.52(1)(b). 2/

Arbitrary and Capricious

4 3 . Section 120.52(8)(e) also declares that a rule is an

invalid exercise of delegated legi slative authority when it is

arbitrary and capricious. The statute incorporates a long -

standing definition of the term, stating that a rule is arbitrary

if it Ðis not supported by logic or the necessary facts.Ñ A rule

is capricious Ðif it is adopted with out thought or reason or is

irrational.Ñ See Dravo Basic Materials Co. v. DepÓt of Transp. ,

602 So. 2d 632, 634 (Fla. 1st DCA 1992).

4 4 . The Petition gives limited guidance in explaining why

Petitioners contend the rule is arbitrary and capricious. It

alleges at paragraph six that:

6. The Ðpenalties set forth in the

DivisionÓs Penalty Rule are contrary to, and

in most instances more severe, than the

penalties set forth in ARCI Version 8.

Petitioner FSBPAÓs members are substantially

affected by the Div isionÓs Penalty Rule.

PetitionerÓs trainer members are

substantially affected to the extent that

the DivisionÓs Penalty Rule is not

consistent with the Penalty Guidelines and

requires harsher penalties than those set

forth in the ARCI Penalty Guidelines.

PetitionerÓs owner members are substantially

affected by the DivisionÓs Penalty Rule to

the extent that it requires purses earned by

horses they own to be forfeited when the

ARCI Penalty Guidelines would not require

forfeiture of purses earned.

* * *

10. Furthermore, the DivisionÓs adoption of

the DivisionÓs Penalty Rule, as set forth in

Rule 61D - 6.011, was an Ðinvalid exercise of

delegated legislative authorityÑ within the

meaning of Fla. Stat. 120.52(8)(e) as the

rule is arbitrary and capricious.

45 . The fact that the penalties imposed by the rule are

different than the penalties imposed under the ARCI Document does

not make the rule arbitrary and capricious. Moreover, while the

evidence presented provided insight into process for drafting the

ARCI Document, it did not shed light on the process used for

formulating rule 61D - 6.011. While the rule is invalid because it

violates section 120.52(8)(b) and (c), there is insufficient

evidence to find that the rule is arbitrary and capricious.

46 . P etitioner has requested attorneyÓs fees and costs

pursuant to section 120.595(3), and the First District Court of

Appeal has ordered appellate attorneyÓs fees. The issues related

to fees will be considered in Case Numbers 18 - 2733F and 19 -

1661FC.

ORDER

Bas ed on the foregoing Findings of Fact and Conclusions of

Law, it is ORDERED that rule 61D - 6.011 is an invalid exercise of

delegated legislative authority.

DONE AND ORDERED this 12th day of April , 2019 , in

Tallahassee, Leon County, Florida.

S

LISA SHEARER NELSON

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 C lerk of the

Division of Administrative Hearings

this 12th day of April , 2019 .

ENDNOTE S

1/ The House version of the bill, CS/HB 239, is the bill that

became chapter 2015 - 88 , Laws of Florida . The Senate version,

CS/SB 226, contained the same requirement with respect to

adoption of the ARCI classification guidelines and penalty

schedule.

2/ The alleged violation of section 120.52(1)(b) was not

discussed in the Partial Final Order. However, as noted in Board

of Trustees of the Internal Improvement Tru st Fund v. Day Cruise

Association , 794 So. 2d 696, 701 (Fla. 1st DCA 2001), subsections

(b) and (c) are interrelated. Finding that both were violated in

this instance adds nothing to the analysis already expressed in

the Partial Final Order, but the findi ng is included in order to

fully dispose of the issues raised in the Petition.

COPIES FURNISHED:

Bradford J. Beilly, Esquire

Beilly and Strohsahl, P.A.

1144 Southeast Third Avenue

Fort Lauderdale, Florida 33316

(eServed)

Louis Trombetta, Esquire

Depar tment of Business and

Professional Regulation

2601 Blair Stone Road

Tallahassee, Florida 32399

(eServed)

Jett Lee Baumann, Esquire

Department of Business and

Professional Regulation

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2202

(eServed)

Ro ss Marshman, Esquire

Department of Business and

Professional Regulation

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2202

(eServed)

Jason Walter Holman, Esquire

Division of Pari - Mutuel Wagering

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

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2202

(eServed)

Ray Treadwel l, General Counsel

Office of the General Counsel

Department of Business and

Professional Regulation

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2202

(eServed)

Halsey Beshears, Secretary

Department of Business and

Professional Regulation

2601 B lair Stone Road

Tallahassee, Florida 32399 - 2202

(eServed)

Ken Plante, Coordinator

Joint Administrative Procedures Committee

Room 680, Pepper Building

111 West Madison Street

Tallahassee, Florida 32399 - 1400

(eServed)

Ernest Reddick, Program Administrato r

Anya Grosenbaugh

Florida Administrative Code and Register

Department of State

R. A. Gray Building

500 South Bronough 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 administrative appeal wi th 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 appell ate district where

the agency maintains its headquarters or where a party resides or

as otherwise provided by law.