21-002495RX Ne 32 Street Llc; Hillsboro Inlet Investments, Llc; Broward Icw Investments, Llc; And South Spanish Trail, Llc vs. The Board Of Trustees Of The Internal Improvement Trust Fund And The Florida Department Of Environmental Protection Status: Appeal.

Summary: Petitioners have standing to challenge existing rules, but failed to prove rules violated sections 120.52(8)(d) or (e).

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

N E 32 ND S TREET LLC; H ILLSBORO I NLET

I NVESTMENTS , LLC; B ROWARD I CW

I NVESTMENTS , LLC; A ND S OUTH S PANISH

T RAIL , LLC ,

Petitioners ,

vs. Case No. 21 - 2495RX

T HE B OARD OF T RUSTEES OF T HE

I NTERNAL I MPROVEMENT T RUST F UND

A ND T HE F LORIDA D EPARTMENT OF

E NVIRONMENTAL P ROTECTION ,

Respondents .

/

F INAL O RDER

This case came before Administrative Law Judge (ÑALJÒ) Darren A.

Schwartz of the Division of Administrative Hearings (ÑDOAHÒ) for final

hearing on November 12, 2021, at a site in Tallahassee, Florida, and by Zoom

conference.

A PPEARANCES

For Petitioner s : J ohn J. Fumero, Esquire

Susan Roeder Martin, Esquire

Nason, Yeager, Gerson, Harris, & Fumero, P.A.

750 Park of Commerce Boulevard , Suite 210

Boca Ra ton, Florida 33487

For Respondent s : Jeffrey Brown, Esquire

Ronald Woodrow Hoenstine, Esquire

Department of Environmental Protection

Office of the Ge neral Counsel

3900 Commonwealth Boulevard , Mail Stop 35

Tallahassee, Florida 32399 - 3000

S TATEMENT O F T HE I SSUE S

Whether Petitioners, NE 32nd Street LLC, Hillsboro Inlet Investments,

LLC, Broward ICW Investments, LL C, and South Spanish Trail, LLC, have

standing to challenge specified portions of Florida Administrative Code

C hapter 18 - 21 ; and, if so, whether existing rules 18 - 21.002 ; 18 - 21.003(2), (3),

(23), (29), (32), (33), (34), (35), (39), (62), (64), (66), (67), (68), (69), (75), (76),

(77) ; 18 - 21.004(1)(a), (b), (e), (g), (h), (i), (j), (k), (2)(a), (b), (e), (g), (h), (i),

(4) (a) , (b)2.e, (5)(b), (8); 18 - 21.005(1)( c), (d), (e), (f), (2), (3); 18 - 21.0056(1)(a),

(2)(a) ; 18 - 21.008(1) (a), (b), (2); 18 - 21.0082(2)(a)9 .; 18 - 21. 009(1)(g), (h), (2), (3);

18 - 21.010(1)(h), (4); 18 - 21.011 , and 18 - 21.019 (Ñchallenged rulesÒ) , are an

invalid exercise of delegated legislative authority in violation of section s

120.52(8)(d) and (e), Florida Statutes (2021), because they are vagu e, fail to

establish adequate standards for agency decisions, vest unbridled discretion

in the agency, and are arbitrary or capricious.

P RELIMINARY S TATEMENT

On August 17, 2021, Petitioners filed a p etition challenging a Ñportion of

chapter 18 - 2 1, Fl orida Administrative Code. Ò On August 18, 2021, Petitioners

filed a corrected petition . On August 19, 2021, a telephonic status conference

w as held with counsel for the parties , d uring which the parties agreed to

waive the 30 - day requirement to conduct the final hearing and requested

that the final hearing not be scheduled.

On August 26, 2021, Petitioners filed an amended petition. On

September 2, 2021, Respondents, The Board of Trustees of the Internal

Improvement Trust Fund , and Florida Department of En vironmental

Protection , filed a motion to dismiss the amended petition. On September 9,

2021, Petitioners filed a response in opposition to the motion. On

September 10, 2021, the undersigned entered an Order denying the motion. 1

On September 16 , 2021, a telephonic pre - hearing conference was held

with counsel for the parties participating in the conference. Following the

conference, the undersigned entered an Order setting the final hearing for

November 12, 2021. On November 10, 2021, Respondents filed a motion for

official recognition.

The final hearing was held on November 12, 2021 , at a site in

Tallahassee, Florida, and by Zoom conference . At the outset of the hearing,

the undersigned addressed the motion for official recognition , grant ing the

motion in part , and den ying it in part. Respondents also made a separate ore

tenus motion for official recognition, which was unopposed and granted. Joint

Exhibit 1 was received into evidence. Petitioners presented the testimony of

William Swaim and Rod Maddox. P etitionersÔ Exhibits 1 through 11 were

received into evidence upon stipulation of the parties . Respondents presented

the testimony of Richard Malloy. The DepartmentÔs Exhibit 13 was received

into evidence upon stipulation of the parties . 2

At the hearin g, the parties waived the requirement under section

12 0 .56(1)(d) for the undersigned to render this Final Order within 30 days of

the hearing , and the deadline for filing proposed final orders was set for no

1 Throughout this Final Order, Petitioners will be referred to either by a shortened version of

their individual names (ÑNE 32nd Street,Ò ÑHillsboro Inlet,Ò ÑBroward ICW,Ò ÑSouth Spanish

TrailÒ), or , collectively, as ÑPetitioners.Ò Respondents will be referred to either by a shortened

version of their individual names (ÑBOT,Ò or ÑDepartment Ò ), or , collectively , as

Ñ Respondents. Ò

2 PetitionersÔ Exhibits 10 and 11 are transcripts of the depositions of Mr. Ma lloy and

Mr. Ma ddox , take n by Petitioners in this case , and filed at DOAH on January 28 , 2022 . The

DepartmentÔs Exhibit 13 is the transcript of Mr. SwaimÔs deposition taken in this case and

filed at DOAH on November 12, 2021 .

later than 30 days after the filing of the fin al hearing T ranscript . The two -

volume final hearing Transcript was filed at DOAH on December 13, 2021 ,

and , therefore, the partiesÔ proposed final orders were due by January 12,

2022 . Respondents timely filed their P roposed F inal O rder on January 12,

2022. However, Petitioners did not file their P roposed F inal O rder until

January 13, 2022, one - day late. There is no prejudice to Respondents because

of PetitionersÔ late - filed Proposed Final Order. Ac cordingly, the parties Ô

Proposed Final Orders have been cons idered in the preparation of this Final

Order.

On November 9, 2021, the parties filed their Joint Pre - Hearing

Stipulation, in which they stipulated to certain facts. These facts have been

in corporated into this Final Order to the extent indicated below . Unless

otherwise indicated, all statutory and rule references are to th e 2021

versions.

F INDINGS O F F ACT

Parties and Standing

1. There are between 9 ,000,000 and 11 ,000,000 acres of s tate lands in the

s tate of Florida. The BOT is a state agency holding title to s tate lands Ñ in

trust for the use and benefit of the people of the state pursuant to s. 7, Art. II,

and s. 11, Art. X of the State Constitution.Ò § 253.001, Fla. Stat.

2. The Department is a state agency with delegated legisl ative authority

to perform certain duties and functions on behalf of the BOT. §§ 253.01,

253.02 , and 253.002 , Fla. Stat .

3 . Chapter 18 - 21 governs the Ñ management Ò of sovereign ty submerged

lands (ÑSSLÒ) , including the issuance of leases, easements, an d other

authorizations over SSL.

4 . Rule 18 - 21.003(67) provides the following definition of SSL:

(67) ÑSovereignty submerged landsÒ means those

lands including but not limited to, tidal lands,

islands, sand bars, shallow banks, and lands

waterward of the ordinary or mean high water line,

beneath navigable fresh water or beneath tidally -

influenced waters, to which the State of Florida

acquired title on March 3, 1845, by virtue of

statehood, and which have not been heretofore

conveyed or alienated. For t he purposes of this

chapter sovereignty submerged lands shall include

all submerged lands title to which is held by the

Board.

5 . Chapter 18 - 21 addresses how and when the Department may approve

applications or requests to use SSL . However, c hapter 18 - 21 does not provide

a methodology for determining if submerged lands are, in fact, SSL and ,

therefore, owned by the State of Florida.

6 . In fact, n o administrative rule provid e s a methodology for determining

if submerged lands are, in fact, SSL. In th eir amended petition, Petitioners

allege th e challenged rules are an invalid exercise of delegated legislative

authority in violation of sections 120.52(8)(d) and (e), b ecause the y fail to

provide a methodology for determining if submerged land s are , in fa ct, SSL .

7 . Petitioners are limited liability co mpanies registered to do business in

Florida , f ormed for the purpose of developing real estate. William Swai m is

the owner and a member of Petitioners.

8 . NE 32nd Street claims ownership of approximately s even acres of

property on NE 32nd Street in Boca Raton, Florida, located within

submerged lands west of the Int ra coastal Waterway and within the

Int ra coastal Waterway. NE 32nd Street plan s to bulkhead , fill , and sell some

lots and build boat docks in the s ubmerged lands located within the

Intracoastal Waterway .

9 . Pursuant to chapter 18 - 21, th e Department issued easements and

authorizations over NE 32nd StreetÔs property . At hearing, Mr. Swaim

testified that NE 32nd Street is restricted on selling or devel oping the

property because of a cloud on the title of the property created by the

DepartmentÔs issuance of easements and authorizations pursuant to

chapter 18 - 21. NE 32nd Street is currently involved in circuit court litigation

against Respondent s in Palm Beach County, Florida, involving a disput e over

the ownership of submerged lands within the property.

1 0 . Broward ICW claims ownership of several parcels of property located

within submerged lands within the Intracoastal Waterway in Broward

County, Florid a , Ñnorth and south of the bridge to the ocean at the Hillsboro

Inlet on the west side of the Intracoastal.Ò Broward ICW a c quired the

property Ñfor purposes of maximizing its property rights,Ò which include s

easements for utilities, density rights, drainag e rights, dockage rights, and

mineral rights. Broward ICW plans on developing a portion of the property

seaward of the erosion control line.

1 1 . Pursuant to chapter 18 - 21, the BOT issued leases on Broward ICWÔs

property . A t hearing, Mr. Swaim testified th at Broward ICW is restricted on

developing the property because of a cloud on the title of the property created

by the DepartmentÔs issuance of the leases pursuant to chapter 18 - 21.

Broward ICW is currently involved in circuit court litigation against

Resp ondents in Broward County, Florida, involving a dispute over the

ownership of submerged lands within the property.

1 2 . Hillsboro Inlet claims ownership of property located within submerged

lands in Broward County, Florida. Hillsboro Inlet acquired the property for

purposes of development .

1 3 . Pursuant to chapter 18 - 21, the BOT issued public easements and

leases on Hillsboro InletÔs property. At hearing, Mr. Swaim testified that

Hillsboro Inlet is restricted on developing the property because of a clou d on

the title of the property created by the DepartmentÔs issuance of the leases

and easements pursuant to chapter 18 - 21. Hillsboro Inlet is currently

involved in circuit court litigation against Respondents in Broward County,

Florida, involving a dispute over the ownership of submerged lands within

the property.

1 4 . South Spanish Trail claims ownership of several parcels of property

located within submerged lands west of the ÑICW waterway in Porto Mar

Subdivision,Ò south of Bel Meadow Park Bridge. South Spanish Trail

acquired the property to obtain drainage and density rights, similar to the

business purpose of Broward ICW.

1 5 . Pursuant to chapter 18 - 21, the Department issued authoriz ations to

allow third parties to install fiberoptic cables and conduits on the property.

South Spanish Trail is currently involved in circuit court litigation against

Respondents in Palm Beach County, Florida, involving a dispute over the

ownership of submerged lands within the property.

1 6 . Petitioners have st anding to ch allenge the subject rules. Petitioners

are substantially affected by the challenged rules because the Department

issued leases, easements, and other authorizations over PetitionersÔ

properties pursuant to the challenged rules .

The Challenged Rules A re Not an Invalid Exercise of Delegated

Legislative Authority in Violation of Section s 120.52(8)(d) and (e)

17. Turning to the merits of PetitionersÔ rule challenge, w ithin the

DepartmentÔs Bureau of Survey and Mapping is the Title and Land Recor ds

section (ÑTLRS Ò ). The TLRS receives requests to make title determinations

on behalf of the BOT, and the TLRS makes title determinations on behalf of

the BOT.

1 8 . Requests to the TLRS for title determinations are typically received

from multiple sources , including Department district offices and water

management district offices, when evaluating a permit request, and from

private individuals. Between approximately 2,000 and 3,000 SSL title

determinations are made by the TLRS on an annual basis.

19 . When making submerged land title determinations, Department staff

research whether the water body itself is considered sovereign. To this end,

one basic question is the issue of whether a given water body was navigable

at the time Florida became a state. This issue may be more or less complex

given the specific water body at issue. There is no dispute as to the

navigability of the Gulf of Mexico or Atlantic Ocean. However, researching

the navigability of bays, estuaries, or smaller water bodies may be complex.

2 0 . There is no one - size - fits - all for making SSL title determination s . SSL

t itle determinations require a n individualized, case - by - case analysis and

determination , with unique factors and considerations applicable to each

case.

2 1 . A n SSL title determina tion may require a consideration of a multitude

of factors and a review of many sources, such as original deeds or patents,

historical aerial photographs, surveys, maps and charts, and any other

pertinent information that might address the sovereignty of s tate land.

22 . Staff regularly con fer and collaborate with Department legal counsel

regarding legal issues and consider existing case law . There are occasions

where the interpretation offered by the DepartmentÔs legal counsel differs

from the interpretati on offered by an attorney for an interested party. In

those situations where the parties do not agree, the title dispute is resolved

by a circuit court , and the outcome of the litigation in the judicial forum is

binding and accepted by the BOT and the Depa rtment, as staff for the BOT.

2 3 . Staff may also confer with the United States Bureau of Land

Management, coastal engineers, coastal geologists, and soil scientists to

evaluate certain site - specific issues. Staff may also confer with outside

historians and review newspaper accounts, journals, diaries of the early

settlers of Florida, and similar information.

2 4 . Different sources of information regarding title issues, such as

geodetic surveys and field notes to surveys, may be more or less persuasive in

a given set of factual circumstances.

2 5 . Given the complexities and site - specific nature of title determinations

involving submerged lands , it is understandable that no rule exists requiring

a methodology for determining how Department staff make title

determinations for SSL .

2 6 . Requiring a rule that provides a methodology for determining title to

SSL is not practicable.

C ONCLUSIONS O F L AW

2 7 . Under section 120.56(1)(a), Ñ[a]ny person substantially affected by a

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.Ò An existing rule may be challenged at any time during its

existence. £120.56(3)(a), Fla. Stat. ÑThe administrative law judg e may declare

all or part of a rule invalid.Ò £120.56(3)(b), Fla. Stat.

2 8 . A party is substantially affected if the rule will result in a real or

immediate injury in fact and the alleged interest is within the zone of interest

to be protected or regulate d. Jacoby v. Fla. Bd. of Med. , 917 So. 2d 358, 360

(Fla. 1st DCA 2005). Generally, t he fact that a party is subject to a rule has

been held to be sufficient to demonstrate that the party is substantially

affected by the rule. ABC Fine Wine and Spirits v. D epÔt of Bus. a nd Pro.

Reg ul . , 323 So. 3d 794, 797 (Fla. 1st DCA 2021).

2 9 . In the instant case, Petitioners are substantially affected by the

challenged rules and have standing to challenge the m . As detailed above,

Petitioners are substantially affected b y the challenged rules because they

are subject to the rules . Respondents relied on the rules in issuing easements,

leases, or other authorizations involving title to , and the use of, PetitionersÔ

propert ies .

30 . Turning to the merits, Petitioners have the burden of proving by a

preponderance of the evidence that the challenged rules are an invalid

exercise of delegated legislative authority as to the objections raised.

§120.56(3)(a), Fla. Stat.

3 1 . The definition of Ñinvalid exercise of delated legislativ e authorityÒ is

set forth in section 120.52(8), which provides , in pertinent part:

( 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 fol lowing applies:

***

(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

necess ary facts; a rule is capricious if it is adopted

without thought or reason or is irrational;

3 2 . An administrative rule is invalid under section 120.52(8)(d) if it

requires the performance of an act in terms that are so vague that persons of

common intelligence must guess at its meaning. State DepÔt of Elder Affs . v.

Fla. Senior Liv. Assoc., Inc. , 295 So. 3d 904, 914 (Fla. 1st DCA 2020); Sw. Fla.

Water Mg m t. Dist. v . Charlotte C n ty. , 774 So. 2d 903, 915 (Fla. 2d DCA 2001).

An administrative rule is a rbitrary under section 120.52(8)(e) if it is not

supported by logic or the necessary facts , and capricious if it is adopted

without thought or reason or is irrational.

3 3 . In the instant case, Petitioners failed to prove by a preponderance of

the ev idence that the challenged rules are vague, fail to establish adequate

standards for agency decisions, vest unbridled discretion in the agency, or are

arbitrary or capricious, because they fail to provide a methodology for

determining title to SSL. The cha llenged rules properly provid e a m echanism

for manag ing the use of SSL . The challenged rules are not designed to

provide a method ology for determining whether certain lands are, in fact,

SSL . As detailed above, there are many factors involved in making a

s ubmerged land title determination, each depending upon the facts of the

specific case and applicable law. It would be impracticable to require a

methodology in the challenged rules for making submerged land title

determinations.

34. PetitionersÔ relia nce on Florida Department of Business and

Professional Regulation v. Target Corporation , et. al ., 321 So. 3d 320 (Fla. 1st

DCA 2021), and other cases cited in their Proposed Final Order , are

misplaced. In Target , a statute expressly required that a ÑConsum ption on

Premises (COP) liquor license eÒ not sell items other than those Ñcustomarily

sold in a restaurant,Ò and the statute listed items customarily sold in a

restaurant. The statute further provided that a licensee could petition the

Division for permiss ion to sell products other than those listed in the statute,

provided the licensee could show the Ñitem is customarily sold in a

restaurant.Ò The agency attempted to clarify by rule what items are

Ñcustomarily sold in a restaurant , Ò but t he c ourt determine d the rule was

vague because the rule did not provide direction regarding what items the

Division would consider as being Ñcustomarily sold in a restaurant.Ò Because

no sufficient standard was provided in the rule, the c ourt held the rule was

vague and ves ted unbridled discretion in the Division. Id . at 325.

35. On the other hand, t he determination of the rights of parties involved

in a title dispute is ultimately subject to judicial resolution in circuit court

under all applicable law . Art. V., § 20 (c)(3), Fla. Const.; § 26.012(2)(g), Fla.

Stat.; Bd . of Trs . v. Bd . of Pro . Land Surveyors , 566 So. 2d 1358, 1361 (Fla.

1st DCA 1990) .

3 6 . As detailed above, Petitioners have been embroiled in many years of

litigation against Respondents in circuit c ourt over title to the submerged

lands. Any dispute involving issues relating to the t itle of the submerged

lands are not issue s to be resolved i n an administrative forum , but are

instead properly reserved for circuit courts applying the applicable law t o the

particular facts of each case. Bd . of Trs . v. Fla . Pub . Utils . Co. , 599 So. 3d

1356, 1358 (Fla. 1st DCA 1992).

O RDER

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

O RDERED that the Amended Petition is Dismissed.

D ONE A ND O RDERED this 3rd day of February , 2022 , in Tallahassee, Leon

County, Florida.

S

D ARREN A. S CHWARTZ

Administrative Law Judge

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 3rd day of February , 2022 .

C OPIES F URNISHED :

Susan Roeder Martin, Esquire Ronald Woodrow Hoenstine, Esquire

Nason, Yeager, Gerson, Harris, Department of Environmental Protection

& Fumero, P.A. Office of the General Counsel

Suite 210 Mail Stop 35

750 Park of Commerce Boulevard 3900 Commonwealth Boulevard

Boca Raton, Florida 33487 Tallahassee, Florida 32399 - 3000

Justin G. Wolfe, General Counsel Jeffrey Brown, Esquire

Department of Environmental Protection Depa rtment of Environmental Protection

Legal Department, Suite 1051 - J Office of the General Counsel

Mail Station 35 Mail Stop 35

D ouglas Building 3900 Commonwealth Boulevard

3900 Commonwealth Boulevard Tallahassee, Florida 32399 - 3000

Tallahassee, Florida 32399 - 3000

Lea Crandall, Agency Clerk Shawn Hamilton, Secretary

Department of Environmental Protection Department of Environmental Protection

Mail Station 35 Douglas Building

Douglas Building 3900 Commonwealth Boulevard

3900 Commonwealth Boulevard Talla hassee, Florida 32399 - 3000

Tallahassee, Florida 32399 - 3000

John J. Fumero, Esquire

Anya Owens, Progr am Administrator Nason, Yeager, Gerson, Harris,

Florida Administrative Code & Register & Fumero, P.A.

Department of State Suite 210

R. A. Gray Building 750 Park of Commerce Boulevard

500 South Bronough Street Boca Raton, Florida 33487

Tallahassee, Florida 32399 - 0250

Margaret Swain

Ken Plante, Coordinator Florida Administrative Code & Register

Joint Admin istrative Department of State

Proced ures Committee R. A. Gray Building

Room 680 500 South Bronough Street

Pepper Building Tallahassee, Florida 32399 - 0250

111 We st Madison Street

Tallahassee, Florida 32399 - 1400

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 clerk 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.