21-001072RX Michael Allen Lerman vs. Department Of Business And Professional Regulation, Division Of Pari-Mutuel Wagering Status: Closed DOAH Final Order on Thursday, May 6, 2021.

Summary: Petitioner did not establish that the challenged rule violated 120.52(8)(b) or (c).

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

M ICHAEL A LLEN L ERMAN ,

Petitioner ,

vs. Case No. 21 - 1072RX

D EPARTMENT OF B USINESS A ND

P ROFESSIONAL R EGULATION , D IVISION OF

P ARI - M UTUEL W AGERING ,

Respondent .

/

S UMMARY F INAL O RDER

This case is before the undersigned on the partiesÔ Motions for Summary

Final Order. Based on the Motions filed, there is no dispute of material fact,

and a Summary Final Order determining the issues of law presented by the

Rule Challenge Directed to Rule 61D - 6.008, F.A.C. is appropriate.

S TATEMENT OF T HE I SSUE

The issue presented for resolution is whether Florida Administrative Code

Rule 61D - 6.008 is an invalid exercise of delegated legislativ e authority as

described in section 120.52(8)(c), Florida Statutes.

P RELIMINARY S TATEMENT

On March 18, 2021, Petitioner, Michael Lerman (Petitioner or

Mr. Lerman), filed a Rule Challenge Directed to Rule 61D - 6.008, F.A.C.

(Petition), asserting that rule 6 1D - 6.008 is an invalid exercise of delegated

legislative authority within the meaning of section 120.52(8)(b) and (c). The

case was assigned to Administrative Law Judge Suzanne Van Wyk and on

March 23, 2021, was scheduled for hearing on April 19, 2021, to be conducted

by means of Zoom technology.

On March 30, 2021, the Department of Business and Professional

Regulation (Respondent or the Department) filed a Motion for Summary

Final Order, to which Petitioner responded in part on April 6, 2021.

O n April 6, 2021, Respondent filed an Emergency Motion for Protective

Order, asserting that Petitioner was seeking to depose Dr. Cynthia Cole,

Director of the University of FloridaÔs Racing Laboratory, and anticipated a

request to depose the Assistant Lab Director, C raig Jones. Petitioner also

sought through discovery the laboratoryÔs determination of the testing

methodologies and measurement uncertainties for controlled therapeutic

medications between January 10, 2016 , and March 4, 2021. Respondent

asserted that all of this information was irrelevant to the determination of

whether rule 61D - 6.008 is an invalid exercise of delegated legislative

authority.

Judge Van Wyk agreed and issued a Protective Order and Order

Quashing Request for Production, which states in part :

The instant proceeding is a challenge to Florida

Administrative Code Rule 61D - 6.008, adopted on

January 10, 2016, titled ÑPermitted Medications for

Horses.Ò Communications between Respondent and

the laboratory in 2021 are not relevant to a rule

challenge to a rule adopted in 2016.

Rule 61D - 6.008 establishes the permitted

concentrations of an exhaustive list of prescription

medications which Ñshall not be reported by the

racing laboratory to the Division as a violation of

Section 550.2415, F.S.Ò As noted by Petitioner in its

ÑRule Challenge Directed to Rule 6.008, F.A.C.

(2016),Ò the subject rule does not establish either

the testing methodologies or the measurement

uncertainties for screening specimens to confirm

the presence of the listed medications. As such,

communications regarding the testing

methodologies and measurement of uncertainties

are irrelevant to PetitionerÔs contention that rule

61D - 6.008 is an Ñinvalid exercise of delegated

legislative authority. Ò (footnote omitted) .

On April 9, 2021, Pet itioner also filed a Motion for Summary Final Order. On

April 14, 2021, the parties filed a Joint Stipulation of Material Facts, and

those facts are included in the Findings of Fact below. On April 15, 2021, the

case was transferred to the undersigned, and both motions were heard in a

motion hearing conducted by Zoom on April 16, 2021.

The parties agree that, at this point, there are no disputed issues of fact,

and the case can be resolved based on the issues of law presented. The

parties were offered the opportunity to file proposed final orders after the oral

argument held on the motions, and both parties elected to rely on the motions

for summary final order and the argument s presented on those motions. The

parties also indicated in a Joint Response to Order that neither party

intended to file the transcript of the oral argument on the Motions for

Summary Final Order.

All statutory references are to the 2020 codification unless otherwise

indicated.

F INDINGS OF F ACT

1. Petitioner is a thoroughbred rac ehorse trainer holding a professional

occupational license issued by the Division of Pari - Mutuel Wagering (PMW).

2. Petitioner has standing to bring this rule challenge under chapter 120.

3. In 2015, the Legislature amended section 550.2415, Florida Statut es

(2015) , with respect to the DivisionÔs responsibility Ñto adopt certain rules

relating to the conditions of use of maximum concentrations of medications,

drugs, and naturally occurring substances.Ò C h. 2015 - 88, Laws of Fla. As

amended, section 550.2415( 7) provides in pertinent part:

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

racing animals and the integrity of the races in

which the animals participate, the division shall

adopt rules establishing the conditions of use and

maximum concentration s of medications, drugs,

and naturally occurring substances identified in the

Controlled Therapeutic Medication Schedule,

Version 2.1, revised April 17, 2014, adopted by the

Association of Racing Commissioners International,

Inc. Controlled therapeutic med ications include

only the specific medications and concentrations

allowed in biological samples which have been

approved by the Association of Racing

Commissioners International, Inc., as controlled

therapeutic medications.

(b) The division rules must des ignate the

appropriate biological specimens by which the

administration of medications, drugs, and naturally

occurring substances is monitored and must

determine the testing methodologies, including

measurement uncertainties, for screening such

specimens t o confirm the presence of medications,

drugs, and naturally occurring substances.

4. Rule 61D - 6.008 was adopted on January 10, 2016.

5. Subsections (1) through (3) of rule 61D - 6.008 contain conditions of use

and maximum concentrations of medications, d rugs, and naturally occurring

substances identified in the Controlled Therapeutic Medication Schedule,

Version 2.1, revised April 17, 2014, adopted by the Association of Racing

Commissioners International, Inc., as mandated by section 550.2415(7)(a).

6. Subsection (2) of the rule sets forth the Ñappropriate biological

specimens by which the administration of medications, drugs, and naturally

occurring substances is monitoredÒ as mandated by section 550.2415(7)(b).

7. Neither rule 61D - 6.008 nor any other rule of the Division, with the

exception of Emergency Rule 61DER21 - 2 (adopted March 4, 2021), contain a

provision that designates the testing methodologies, including measurement

uncertainties, for screening the designated biological specimens listed in

ru le 61D - 6.008(2) and (3) to confirm the presence of medications, drugs, and

naturally occurring substances in horses, as mandated by section

550.2415(7)(b).

8. The Department has noticed proposed rule 61D - 6.007, which Petitioner

is challenging, in DOAH Cas e No. 21 - 1292RP. The proposed rule provides

testing methodologies and measurement uncertainties, items that are absent

from rule 61D - 6.008. However, neither the emergency rule adopted prior to

the notice of the proposed rule nor any version of the proposed rule was in

existence when rule 61D - 6.008 was adopted in 2016.

9. PetitionerÔs challenge states the following with respect to rule 61D -

6.008:

8. Fla. Stat. 550.2415(7)(b) mandated that the

Division [of Pari - Mutuel Wagering] adopt rules

designating:

a) Ñthe appropriate biological specimens by

which the administration of medications, drugs,

and naturally occurring substances is monitoredÒ,

b) the Ñtesting methodologiesÒ, and

c) Ñmeasurement uncertaintiesÒ for screening

such specimens to confirm the pres ence of

medications, drugs, and naturally occurring

substances.

9. While the Rule does designate the

appropriate biological specimens to be monitored

for each permitted medication, the Rule does not

establish the Ñtesting methodologiesÒ and the

Ñmeasureme nt uncertaintiesÒ, for screening such

specimens to confirm the presence of medications,

drugs, and naturally occurring substances.

10. Instead of adopting a rule establishing the

Ñtesting methodologiesÒ and the Ñmeasurement

uncertaintiesÒ, for screening s pecimens to confirm

the presence of medications, drugs, and naturally

occurring substances as required by Fla. Stat.

550.2415(7)(b), the Division has instead, delegated

the determination of both the Ñtesting

methodologiesÒ and the Ñmeasurement

uncertaintie sÒ to the University of Florida Racing

Laboratory.

11. Petitioner is directly affected by the

DivisionÔs failure to include both the Ñtesting

methodologiesÒ and the Ñmeasurement

uncertaintiesÒ within the Rule, as both the

methodology used to test post - rac e serum samples

and the measurement uncertainty for each

permitted medication affects the determination of

whether there was an amount of permitted

medication in excess of the maximum quantum of

the permitted medication found in the post - race

same taken fr om the racehorse ÑCalinaÔs SongÒ.

C ONCLUSIONS OF L AW

10. The Division of Administrative Hearings has jurisdiction over the

parties to and the subject matter of this proceeding pursuant to sections

120.56, 12 0 .569, and 120.57(1), Florida Statutes.

11. S ection 120.56(1)(a) provides that any person substantially affected by

a rule or proposed rule may file a challenge on the ground that the rule or

proposed rule is an invalid exercise of delegated legislative authority. With

respect to existing rules, the petition must state Ñthe particular provisions

alleged to be invalid and a statement of the facts or grounds for the alleged

invalidity,Ò and Ñ facts sufficient to show that the petitioner is substantially

affected by the challenged rule.Ò £ 120.56(1)(b), F la. Stat.

12. The parties have stipulated that Petitioner has standing to bring this

challenge. Petitioner is a licensed trainer regulated by the Department who is

subject to discipline based, at least in part, on the rules adopted pursuant to

section 550 .2415.

13. Challenges to existing rules may be filed at any time during which the

rule is in effect, and a petitioner has the burden of proving by a

preponderance of the evidence that the existing rule is an invalid exercise of

delegated legislative autho rity as to the objections raised. § 120.56(3), Fla.

Stat.

14. A preponderance of the evidence has been defined as Ñthe greater

weight of the evidence,Ò or evidence that Ñmore likely than notÒ tends to

provide a certain proposition. Gross v. Lyons , 763 So. 276, 280 n.1 (Fla. 2000).

15. Section 120.52(8) defines Ñinvalid exercise of delegated legislative

authorityÒ as follows:

(8) ÑInvalid exercise of delegated legislative

authorityÒ 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 i n 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 enlarges, modifies, or contravenes the

specific provisions of law implemented, citation to

which is required b y 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 and capricious. A rule is

arbitrary if it is not supported by logic or the

nece ssary facts; a rule is capricious if it is adopted

without thought 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 a ccomplish the statutory

objectives.

A grant of rulemaking authority is necessary but

not sufficient to allow an agency to adopt a rule; a

specific law to be implemented is also required. An

agency may adopt only rules that implement or

interpret the speci fic 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

within the agencyÔs class of power s 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 any agency

shall be construed to extend no further than

implementing or interpreting the specific powers

and duties conferred by the enabling statute.

16. Petitioner alleges that rule 61D - 6.008 is an invalid exercise of

delegated legislative authority as defined in sect ion 120.52(8)(b), by

exceeding its grant of rulemaking authority, and section 120.52(8)(c), by

enlarging, modifying, or contravening the specific provisions of law

implemented. PetitionerÔs challenge fails for the reasons listed below.

17. First, as a pre liminary matter, the Petition does not identify

Ñparticular provisions alleged to be invalidÒ as required by section

120.56(1)(b). Petitioner is not challenging the current contents of the rule, but

rather, is challenging the omission of items required to be the subject of

rulemaking by section 550.2415(7). In short, he is challenging not what the

rule contains, but what it does not.

18. However, the plain meaning of section 120.56(1)(b) requires that a

petition identify the particular provisions of the ru le being challenged. The

only viable interpretation of this language is that a petitioner must actually

challenge something contained in the rule. The Petition in this case does not

comply with this basic requirement.

19. Second, section 550.2415(7) lists several items that the Department

must adopt by rule. It does not require that all of those items be in the same

rule. Section 550.2415(7) expressly states that Ñthe division shall adopt rulesÒ

and Ñ[t]he division rules must designateÒ the identified item s, including

testing methodologies and medical uncertainties. § 550.2415(7)(a) and (b),

Fla. Stat. Given the LegislatureÔs repeated use of the plural term, rules, as

opposed to the singular, rule, there is no requirement that all of the items

identified ar e required to be in the same rule.

20. To exceed the LegislatureÔs grant of authority in violation of section

120.52(8), an agency rule must go further than the grant of authority the

agency is given. See, e.g., MB Doral v. DepÔt of Business and ProfÔl Re g. 295

So. 3d 850, 853 - 5 4 (Fla. 1st DCA 2020); Ortiz v. DepÔt of Health , 882 So. 2d

402, 405 (Fla. 4th DCA 2004). Here, it appears that initially, the Department

did not go far enough. However, under the circumstances presented in this

case, failing to com plete the task does not invalidate the rule actually

adopted. Therefore, rule 61D - 6.008 is not an invalid exercise of delegated

legislative authority as defined in section 120.5 2 (8)(b).

21. Petitioner also alleges that rule 61D - 6.008 Ñenlarges, modifies, or

contravenes the specific provisions of law implemented,Ò in violation of

section 120.52(8)(c).

22. Where the Legislature has not specifically defined the words used in a

statute, the plain and ordinary meaning should govern, Greenfield v. Daniels ,

51 So. 3d 421, 426 (Fla. 2010), and it Ñis appropriate to refer to dictionary

definitions when construing statutes in order to ascertain the plain and

ordinary meaning of the words used there.Ò Id. at 426 (quoting Sch . Bd. of

Palm Beach Cty. v. Survivors Char ter Schs., Inc., 3 So. 3d 1220, 1223 (Fla.

2009). To ÑcontraveneÒ is to Ñgo or act contrary to: violateÒ or to Ñoppose in

argument: contradict.Ò Merriam - Webster Dictionary, at http://www.merriam -

webster.com (last visited May 3, 2021). In discussing the rig ht synonym for

the word contravene, Merriam Webster states:

DENY, GAINSAY, CONTRADICT, CONTRAVENE

mean to refuse to accept as true or valid. DENY

implies a firm refusal to accept as true, to grant or

concede, or to acknowledge existence or claims of. //

d enied the charges. // GAINSAY implies disputing

the truth of what another has said. // no one can

gainsay her claims. // CONTRADICT implies an

open or flat denial. // her account contradicts his. //

CONTRAVENE implies not so much an intentional

opposition as some inherent incompatibility. // law

that contravene tradition. //

23. Petitioner has not pointed to any part of rule 61D - 6.008 that is

incompatible with section 550.2415(7). Likewise, Petitioner has not pointed to

any provision contained in rule 61D - 6.008 that enlarges or modifies section

550.2415(7).

24. Neither party cited the recent decision in Southern Baptist Hospital of

Florida v. Agency for Health Care Administration , 270 So. 3d 488 (Fla. 1st

DCA 2019), which contains facts that are similar bu t not identical to what is

presented in this case. Southern Baptist involves a rule governing the

calculation of reimbursement to hospitals for outpatient services under

Medicaid. While the facts are somewhat convoluted, the Agency was required

to implemen t a recurring methodology in the Outpatient Plan that could

include certain enumerated factors. The Outpatient Plan was adopted by

reference in Florida Administrative Code Rule 59G - 6.030. Rule 59G - 6.030 did

not set out the methodology the Agency used to ca lculate the 2011 unit cost

base or the unit costs for subsequent years. Instead, the Agency used an

unadopted fraction methodology (which it referenced as Ñjust mathÒ), and at

some point changed the fraction methodology by using a different

denominator.

2 5. Several hospitals challenged the AgencyÔs rules because of the failure

to identify the methodologies used. In response, the Agency published a

proposed amendment to rule 59G - 6.030, and the Hospitals challenged both

the existing and proposed rules. The h ospitals argued, successfully, that the

Agency had not engaged in rulemaking to adopt the methodologies used into

the Outpatient Plan , as required.

26. Notably, the agency was required to adopt the recurring methodologies

in the Outpatient Plan, which wa s included in rule 59G - 6.030. The

administrative law judge made findings of fact that no recurring methodology

was provided, but that the existing and proposed rules did not enlarge,

modify, or contravene the specific provisions of law implemented. The Fir st

District Court of Appeal noted that the decision rested Ñentirely upon

deference to the AgencyÔs interpretation of the implementing statutes,Ò which

the Court found to be in error. Id. at 502. The First DCA found that, given

the recent constitutional am endment to Article V, Section 21 of the Florida

Constitution, the deference is not appropriate. The court stated that, even if

deference is appropriate, Ñjudicial adherence to the agencyÔs view is not

demanded when it is contrary to the statuteÔs plain mea ning.Ò Id. at 503. The

clear statutory directive was to implement a recurring methodology in the

Outpatient Plan. The court found that the existing rule contravened the

statute because it failed to adopt a methodology as required. The court also

found that the existing and proposed rules were vague, failed to establish

adequate standards for agency decisions, and vested unbridled discretion in

the Agency. 1

27. At first blush, Southern Baptist appears to mandate a finding in

PetitionerÔs favor. However, in Southern Baptist, the Agency was required to

identify the recurring methodology in a specific place, the Outpatient Plan. It

did not do so. The Hospitals could point to the Outpatient Plan contained in

the rule and clearly show where it was deficient and n ot compliant with the

1 Petitioner did not challenge rule 61D - 6.008 on these grounds.

statutory directive for the Plan. Section 550.2415(7), by contrast, simply

directs the Department to adopt rules identifying those items included in

paragraphs (1) and (2). Petitioner does not take issue with the contents of

rule 61 D - 6.008, whereas the hospitals in Southern Baptist took issue with the

absence of a ratemaking methodology in the Outpatient Plan. While, in

Southern Baptist , AHCA contravened the legislative directive to adopt a

ratemaking methodology in the Outpatient Pl an , r ule 61D - 6.008, as adopted,

does not go further than the Legislature intended, and does not enlarge,

modify, or contravene the statute.

28. There is no dispute that the Department was woefully late in

adopting a rule, be it an emergency rule or otherw ise, to address the

methodology for testing and the medical uncertainties, despite being directed

to do so in 2015. However, the remedy for such an oversight is not a challenge

aimed at invalidating the rule that addresses the other items the Legislature

i dentified for rulemaking.

29. Section 120.56(3)(b) provides that an administrative law judge may

declare all or part of a rule invalid, which is consistent with the directive in

section 120.56(1)(b)1. that a petition to invalidate the rule must state the

particular provisions alleged to be invalid. If a rule or portion of a rule is

declared invalid, the rule or portion thereof becomes void when the time for

filing an appeal expires. Here, Petitioner has not identified a portion of the

rule that is challeng ed, and invalidating the entire rule would result in a

situation where nothing the Legislature directed is accomplished.

30. A more appropriate remedy is contained in section 120.54(7) which

provides that where an agency has failed to adopt rules as direc ted, a

substantially affected person may file a petition to initiate rulemaking.

Petitioner did not pursue this avenue, and once the failure to address

methodologies and medical uncertainties was brought to the DepartmentÔs

attention, the Department began the rulemaking process. 2

31. In summary, the Department is not required to address all of the

issues identified in section 550.2415(7) in the same rule, and the failure to do

so does not render rule 61D - 6.008 an invalid exercise of delegated legislative

au thority in violation of section 120.52(8)(b) or (c).

O RDER

Based on the foregoing Findings of Fact and Conclusions of Law, it is

O RDERED that PetitionerÔs Rule Challenge Directed to Rule 61D - 6.008, F.A.C.

be dismissed.

D ONE A ND O RDERED this 6th day of Ma y , 2021 , in Tallahassee, Leon

County, Florida.

S

L ISA S HEARER N ELSON

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Divis ion of Administrative Hearings

this 6th day of May , 2021 .

2 Petitioner apparently did not challenge the emergency rule, but has challenged the validity

of the proposed rule addressing testing methodologies and medical uncertainties. See Lerman

v. DepÔt of Business and ProfÔl Reg., DOAH Case No. 21 - 1292RP. The merits of the challenge

to the proposed rule is not at issue in this proceeding.

C OPIES F URNISHED :

David Axelman, General Counsel Bradford J. Beilly, Esquire

Florida Department of Business Beilly and Strohsahl, P.A.

and Professional Regulation 1144 Southeast Third Avenue

2601 Blairstone Road Fort Lauderdale, Florida 33316

Tallahassee, Florida 32399 - 2202

Emily Ann Leiva, Esquire

Johnny P. ElHachem, Esqui re Department of Business

Department of Business and Professional Regulation

and Professional Regulation 2601 Blair Stone Road

2601 Blair Stone Road Tallahassee, Florida 32399

Tallahassee, Florida 32399

Louis Trombetta, Director

Julie I. Brown, Secretary Division of Pari - Mutuel Wagering

Department of Business Department of Business

and Professional Regulation and Professional Regulation

2601 Blair Stone Road 2601 Blair Stone Roa d

Tallahassee, Florida 32399 - 2202 Tallahassee, Florida 32399 - 2202

Ken Plante, C oordinator Ernest Reddick, Program Adminstrator

Joint Administrative Procedure Committee Any a Grosenbaugh

Room 680, Pepper Building Florida Administrative Code & Register

111 West Madison Street Department of State

Tallahassee, Florida 32399 - 1400 R.A. Gray Building

500 South Bronough Street

Tallahassee, Florida 32399 - 0250

N OTICE O F R IGHT T O J UDICIAL R EVIEW

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 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 cle rk of the d istrict c ourt of

a ppeal in the appellate district where the agency maintains its headquarters

or where a party resides or as otherwise provided by law.