91-002591RP General Motors Corporation vs. Department Of Highway Safety And Motor Vehicles Status: Closed DOAH Final Order on Monday, July 8, 1991.

Summary: Rule challenge denied. Rule did not enlarge or contravene provisions of law. Legislative ommission of effective date didn't preclude administrative rule.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GENERAL MOTORS CORPORATION, )

)

Petitioner, )

and )

)

MOTOR VEHICLE MANUFACTURERS )

ASSOCIATION OF THE UNITED )

STATES, INC.; FORD MOTOR )

COMPANY; ASSOCIATION OF )

INTERNATIONAL AUTOMOBILE )

MANUFACTURERS, INC; and )

HYUNDAI MOTOR AMERICA, ) CASE NO. 91- 2591RP

)

Intervenors, )

)

vs. )

)

FLORIDA DEPARTMENT OF HIGHWAY )

SAFETY AND MOTOR VEHICLES, )

)

Respondent, )

)

vs. )

)

FLORIDA AUTOMOBILE DEALERS )

ASSOCIATION and SOUTH FLORIDA )

AUTO TRUCK DEALERS ASSOCIATION, )

)

Intervenors. )

__________________________________)

FLORIDA AUTOMOBILE DEALERS )

ASSOCIATION and SOUTH FLORIDA )

AUTO TRUCK DEALERS ASSOCIATION, )

)

Petitioners, )

)

vs. )

)

FLORIDA DEPARTMENT OF HIGHWAY )

SAFETY AND MOTOR VEHICLES, )

) CASE NO. 91-2821R

Respondent, )

)

vs. )

)

GENERAL MOTORS CORPORATION; )

MOTOR VEHICLE MANUFACTURERS )

ASSOCIATION OF THE UNITED )

STATES, INC.; FORD MOTOR )

COMPANY; ASSOCIATION OF )

INTERNATIONAL AUTOMOBILE )

MANUFACTURERS, INC; and )

HYUNDAI MOTOR AMERICA, )

)

Intervenors. )

__________________________________)

FLORIDA AUTOMOBILE DEALERS )

ASSOCIATION and SOUTH FLORIDA )

AUTO TRUCK DEALERS ASSOCIATION, )

)

Petitioners, )

)

vs. )

)

FLORIDA DEPARTMENT OF HIGHWAY )

SAFETY AND MOTOR VEHICLES, )

) CASE NO. 91-2822R

Respondent, )

)

vs. )

)

GENERAL MOTORS CORPORATION; )

MOTOR VEHICLE MANUFACTURERS )

ASSOCIATION OF THE UNITED )

STATES, INC.; FORD MOTOR )

COMPANY; ASSOCIATION OF )

INTERNATIONAL AUTOMOBILE )

MANUFACTURERS, INC; and )

HYUNDAI MOTOR AMERICA, )

)

Intervenors. )

__________________________________)

GENERAL MOTORS CORPORATION, )

)

Petitioner, )

and )

)

MOTOR VEHICLE MANUFACTURERS )

ASSOCIATION OF THE UNITED )

STATES, INC.; FORD MOTOR )

COMPANY; ASSOCIATION OF )

INTERNATIONAL AUTOMOBILE )

MANUFACTURERS, INC; ) CASE NO. 91-2899R

HYUNDAI MOTOR AMERICA; and )

ED MORSE CHEVROLET OF )

SEMINOLE, INC. )

)

Intervenors, )

)

vs. )

)

FLORIDA DEPARTMENT OF HIGHWAY )

SAFETY AND MOTOR VEHICLES, )

)

Respondent, )

and )

)

FLORIDA AUTOMOBILE DEALERS )

ASSOCIATION and SOUTH FLORIDA )

AUTO TRUCK DEALERS ASSOCIATION, )

)

Intervenors. )

__________________________________)

GENERAL MOTORS CORPORATION, )

)

Petitioner, )

and )

)

MOTOR VEHICLE MANUFACTURERS )

ASSOCIATION OF THE UNITED )

STATES, INC.; FORD MOTOR )

COMPANY; ASSOCIATION OF )

INTERNATIONAL AUTOMOBILE ) CASE NO. 91-2901R

MANUFACTURERS, INC; )

HYUNDAI MOTOR AMERICA; and )

ED MORSE CHEVROLET OF )

SEMINOLE, INC., )

)

Intervenors, )

)

vs. )

)

FLORIDA DEPARTMENT OF HIGHWAY )

SAFETY AND MOTOR VEHICLES, )

)

Respondent, )

)

vs. )

)

FLORIDA AUTOMOBILE DEALERS )

ASSOCIATION and SOUTH FLORIDA )

AUTO TRUCK DEALERS ASSOCIATION, )

)

Intervenors. )

__________________________________)

MOTOR VEHICLE MANUFACTURERS )

ASSOCIATION OF THE UNITED )

STATES, INC.; FORD MOTOR )

COMPANY; ASSOCIATION OF )

INTERNATIONAL AUTOMOBILE )

MANUFACTURERS, INC; and )

HYUNDAI MOTOR AMERICA; )

)

Petitioners, )

)

vs. ) CASE NO. 91-2902R

)

FLORIDA DEPARTMENT OF HIGHWAY )

SAFETY AND MOTOR VEHICLES, )

)

Respondent, )

and )

)

FLORIDA AUTOMOBILE DEALERS )

ASSOCIATION and SOUTH FLORIDA )

AUTO TRUCK DEALERS ASSOCIATION, )

)

Intervenors. )

__________________________________)

FINAL ORDER

Pursuant to written Notice, the Division of Administrative Hearings, by its

duly designated Hearing Officer, Daniel Manry, held a formal hearing in the

above-styled case on May 29, 1991, in Tallahassee, Florida.

APPEARANCES

FOR GENERAL MOTORS; Dean Bunch, Esquire

MOTOR VEHICLE Rumberger, Kirk, Caldwell,

MANUFACTURERS Cabaniss, Burke & Wechsler

ASSOCIATION OF THE 106 East College Avenue

UNITED STATES, INC.; Suite 700

FORD MOTOR COMPANY; Tallahassee, Florida 32301

ASSOCIATION OF

INTERNATIONAL AUTOMOBILE

MANUFACTURERS; and

HYUNDAI MOTOR AMERICA

FOR FLORIDA AUTOMOBILE Daniel E. Myers, Esquire

DEALERS ASSOCIATION and Myers & Forehand

SOUTH FLORIDA AUTO TRUCK 402 N. Office Plaza Drive

DEALERS ASSOCIATION Tallahassee, Florida 32301

FOR FLORIDA AUTOMOBILE William C. Owen, Esquire

DEALERS ASSOCIATION Loula M. Fuller, Esquire

Carlton, Fields, Ward,

Emmanuel, Smith & Cutler

410 First Florida Bank Bldg.

Tallahassee, Florida 32301

FOR SOUTH FLORIDA James D. Adams, Esquire

AUTO TRUCK DEALERS Feaman, Adams and Fernandez

ASSOCIATION 4700 N.W. 2nd Avenue

Suite 400

Tallahassee, Florida 33431

FOR ASSOCIATION OF Charles H. Lockwood, II, Esq.

INTERNATIONAL AUTOMOBILE Association of International

MANUFACTURERS, INC. Automobile Manufacturers

1001 19th Street North

Suite 1200

Rosslyn, Virginia 22209

FOR ED MORSE CHEVROLET Linda J. McNamara, Esquire

OF SEMINOLE, INC. Glenn, Rasmussen, Fogarty,

Merryday & Russo

100 South Ashley Drive

Suite 1300

Tampa, Florida 33601

FOR DEPARTMENT OF Michael J. Alderman, Esquire

HIGHWAY SAFETY AND MOTOR Mr. Neil C. Chamelin

VEHICLES Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building, A-432

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue for determination in this proceeding is whether Proposed Rules

15C-7.004(4)(a), (4)(b), and (7)(d) and Florida Administrative Code Rule 15C-

1.008 each constitute an invalid exercise of delegated legislative authority.

PRELIMINARY STATEMENT

Proposed Rule 15C-7.004 was published in the Florida Administrative Weekly

on April 19, 1991. Petitioner, General Motors Corporation ("GM"), filed a

petition challenging Proposed Rule 15C-7.004(a) with the Division of

Administrative Hearings on April 25, 1991 (Case No. 91- 2591RP). GM filed

challenges to Proposed Rule 15C-7.004(7)(d)(Case No. 91-2901R) and Florida

Administrative Code Rule 15C-1.008 on May 10, 1991 (Case No. 2899R)

Petitioners Florida Automobile Dealers Association (" FADA") and South

Florida Auto Truck Dealers Association (" SFATDA") filed petitions challenging

Proposed Rules 15C- 7.004(4)(a) and (7)(d) on May 8, 1991 (Case Nos. 91-2821R

and 91- 2822R, respectively). A petition challenging Proposed Rule 15C-

7.004(4)(b) was filed on May 10, 1991, by Petitioners, Motor Vehicle

Manufacturers Association of the United States, Inc. (" MVMA"), Ford Motor

Company ("Ford"), Association of International Automobile Manufacturers, Inc.

(" AIAM"), and Hyundai Motor America ("Hyundai")(Case NO. 91-2902R).

Ed Morse Chevrolet of Seminole, Inc., petitioned to intervene in GM's

challenges to Florida Administrative Code Rule 15C-1.008 and Proposed Rule 15C-

7.004(7)(d)(Case Nos. 91-2899R and 91-2901R, respectively). Petitioners in

each rule challenge also petitioned to intervene in each of the related rule

challenge proceedings. All of the petitions to intervene were granted and the

separate rule challenges were consolidated pursuant to the stipulation of the

parties and the order of the undersigned. 1/

There are no disputed issues of material fact in this proceeding. The

parties filed a prehearing stipulation with the undersigned on May 23, 1991.

The prehearing stipulation was supplemented by additional stipulations

entered into by the parties on the record during the formal hearing. Facts

concerning the identity and standing of Morse appear in its Petition to

Intervene. The Petition to Intervene and the representations of fact contained

therein were also stipulated to by the parties. Since there were no disputed

issues of material fact, no evidentiary hearing was held. The formal hearing

was limited to oral argument.

At the formal hearing, Florida Automobile Dealers Association (" FADA")

Exhibit 1 was identified as a report entitled A Review of Sections 320.27-

320.31, and 320.642, Florida Statutes, as prepared by the Staff of the Senate

Committee on Transportation. FADA's Exhibit 1 was submitted for admission in

evidence. General Motors ("GM") objected to the use of the document, which

pertained to Rule 15C-1.008. Ruling on the admissibility of FADA's Exhibit 1

was reserved for disposition in this Final Order. GM's objection to the

admissibility of FADA's Exhibit 1 is sustained. Contrary to the assertion of

FADA, the stipulation of the parties is not limited to issues of standing.

A transcript of the record of the formal hearing was filed with the

undersigned on June 6, 1991. Proposed Final Orders were timely filed by the

parties on June 7, 1991, and supplemented on June 10, 1991.

FINDINGS OF FACT

The Parties

1. The Department of Highway Safety and Motor Vehicles (the "Department")

is the agency responsible for promulgating and administering the rules

challenged in this proceeding. The Department administers Chapter 320, Florida

Statutes, 2/ which governs the operation of motor vehicle dealers and

manufacturers in Florida.

2. General Motors Corporation ("GM") is a corporation incorporated in

Delaware and registered to do business in Florida. GM's corporate address and

principal place of business is 3044 West Grand Boulevard, Detroit, Michigan

48202.

3. GM is licensed by the Department, pursuant to Section 320.60, Florida

Statutes, as a manufacturer of motor vehicles. GM has entered into and will

enter into dealer sales and service agreements to authorize motor vehicle

dealers to sell GM vehicles at locations in Florida.

4. The Florida Automobile Dealers Association (?? FADA??) and the South

Florida Auto Truck Dealers Association (" SFATDA") are trade associations

composed of both domestic and foreign line-make franchised motor vehicle

dealers. FADA is composed of more than 800 franchised motor vehicle dealers

licensed in the state. SFATDA is composed of virtually all franchised motor

vehicle dealers in Palm Beach, Broward, Dade, and Monroe Counties.

5. The Motor Vehicle Manufacturers Association of the United States, Inc.

(" MVMA") is a trade association whose member companies manufacture motor

vehicles produced in the United States. MVMA members include Chrysler

Corporation, Ford Motor Company, GM, Honda of America MFG., Inc., Navistar

International Transportation Corporation, PACCAR Inc., and Volvo North America

Corporation. The principal place of business for MVMA is 7430 Second Avenue,

Suite 300, Detroit, Michigan 48202. All of the members of MVVA, including Ford

Motor Company ("Ford"), are licensed pursuant to Section 320.61, Florida

Statutes.

6. The Association of International Automobile Manufacturers, Inc.

(" AIAM") is a trade association of manufacturers and manufacturer-authorized

importers which import motor vehicles for sale in the United States. AIAM

members and associates affected by the challenged rules include:

American Honda Motor Company, Inc.; America

Suzuki Motor Corporation; BMW of North

America, Inc.; Daihatsu America, Inc.; Fiat

Auto U.S.A., Inc.; Hyundai Motor America;

Isuzu Motors America, Inc.; Jaguar Cars,

Inc.; Mazda Motor of America, Inc.,

Mitsubishi Motor Sales of America, Inc.;

Nissan North America, Inc.; Peugeot Motors of

America, Inc.; Porsche Cars North America,

Inc., Rolls-Royce Motor Cars, Inc.; Rover

Group USA, Inc.; Saab Cars, USA, Inc.;

Subaru of America, Inc.; Toyota Motor Sales,

U.S.A., Inc.; Volkswagen of America, Inc.,

Volvo North America Corporation; and Yugo

America, Inc.

The principal place of business for AIAM is 1001 19th Street North, Suite 1002,

Arlington, Virginia 22209.

7. Each member of AIAM is either licensed as an importer, pursuant to

Section 320.61, Florida Statutes, or maintains a contractual relationship with a

distributor which is licensed pursuant to Section 320.61. Toyota Motor Sales,

U.S.A., Inc. ("Toyota"), for example, is not licensed in the state as an

importer. Toyota, however, maintains a contractual relationship with Southeast

Toyota, Inc., which is licensed as a distributor for the purpose of marketing

motor vehicles in Florida.

8. Hyundai Motor America ("Hyundai") is an importer of motor vehicles.

Hyundai's principal place of business is 10550 Talbert Avenue, Fountain Valley,

California 92728.

9. Members of MVMA and AIAM, as well as Ford and Hyundai, have entered

into and will continue to enter into dealer sales and service agreements to

authorize motor vehicle dealers to sell GM vehicles at locations in Florida.

10. Ed Morse Chevrolet of Seminole, Inc. ("Morse") is an applicant for a

license as a franchised motor vehicle dealer. The application of Morse was

approved after a hearing pursuant to Section 320.642, Florida Statues. Morse's

facility, however, is not yet completed and it would be adversely affected by

the enforcement of Proposed Rules 15C-7.004(7)(d) and Rule 15C-1.008.

11. The portions of the proposed and existing rules challenged in this

proceeding will affect the substantial interests of the parties to this

proceeding.

The Challenged Rules

12. Proposed Rule 15C-7.004 was published in the Florida Administrative

Weekly, Vol. 17, NO. 16, at page 1721, on April 19, 1991 (the "Proposed Rule").

The particular portions of the Proposed Rule challenged in this proceeding are

hereinafter identified by the underlining in the quoted portion of the Proposed

Rule.

13. Proposed Rule 15C-7.004(4)(a) provides:

(4) Application for Reopening or Successor

Dealership, or for Relocation of Existing

Dealership.

(a) If the license of an existing franchised

motor vehicle dealer is revoked for any

reason, or surrendered, an application for a

license to permit the reopening of the same

dealer or a successor dealer within twelve

months of the license revocation or surrender

shall not be considered the establishment of

an additional dealership if one of the

conditions set forth in Section 320.642(5) is

met by the proposed dealer. (emphasis added)

14. Proposed Rule 15C-7.004(4)(b) provides:

(4) Application for Reopening or Successor

Dealership, or for Relocation of Existing

Dealership.

(b) An application for change of address by

an existing dealer under this section shall

be filed on form HSMV 84712, Application For

Change of Location (Address) Of Dealer In

Motor Vehicles, Mobile Homes or Recreational

Vehicles, which is hereby adopted by

reference, provided by the Department. The

dealer shall indicate which provision of

Section 320.642(5) Florida Statutes, if any,

it contends exempts the proposed location

from consideration as an additional

dealership. (emphasis added)

15. Proposed Rule 15C-7.004(7)(d) provides:

(7) Hearing and Post-Hearing Procedures.

(d) If the proposed additional or relocated

dealership is approved construction on the

dealership shall begin within 12 months of

the date of the final order. The applicant

must complete construction and finalize its

preliminary application for license within

twenty-four months of the date of the final

order. This period may be extended by the

Department for good cause. (emphasis added)

16. Florida Administrative Code Rule 15C-1.008 provides:

Any person who contemplates the

establishment of a motor vehicle business for

the purpose of selling new motor vehicles,

for which a franchise from the manufacturer,

distributor or importer thereof is required,

shall, in advance of acquiring building and

facilities necessary for such an

establishment, notify the Director of the

Division of Motor Vehicles of his intention

to establish such motor vehicle business.

Such notice shall be in the form of a

preliminary filing of his application for

license and shall be accompanied by a copy of

any proposed franchise agreement with, or

letter of intent to grant a franchise from,

the manufacturer, distributor or importer,

showing the make of vehicle or vehicles

included in the franchise; location of the

proposed business; the name or names of any

other dealer or dealers in the surrounding

trade areas, community or territory who are

presently franchised to sell the same make or

makes of motor vehicles.

Upon receipt of such notice the

Director shall be authorized to proceed with

making the determination required by Section

320.642, Florida Statutes, and shall cause a

notice to be sent to the presently licensed

franchised dealers for the same make or makes

of vehicles in the territory or community in

which the new dealership proposes to locate,

advising such dealers of the provisions of

Section 320.642, Florida Statutes, and giving

them and all real parties in interest an

opportunity to be heard on the matters

specified in that Section. Such notice need

not be given to any presently licensed notice

dealer who has stated in writing that he will

not protest the establishment of a new

dealership which will deal in the make or

makes of vehicles to be included in the

proposed franchise in the territory or

community in which the new dealership

proposes to locate. Any such statements or

letters of no protest shall have been issued

not more than three months before the date of

filing of the preliminary application. The

Director may make such further investigation

and hold such hearing as he deems necessary

to determine the questions specified under

Section 320.642. A determination so made by

the Director shall be effective as to such

license for a period of twelve (12) months

from the date of the Director's Order, or

date of final judicial determination in the

event of an appeal, unless for good cause a

different period is set by the Director in

his order of determination. (emphasis added)

17. Rulemaking authority for Proposed Rule 15C-7.004 is found in Sections

320.011 and 320.27(3), Florida Statues. The law implemented by the proposed

rule is found in Sections 320.27 and 320.60-320.70. Rulemaking authority for

Florida Administrative Code Rule 15C-1.008 is found in Sections 320.011,

320.27(3), and 320.69. The law implemented by the existing rule is found in

Sections 320.27 and 320.642.

CONCLUSIONS OF LAW

18. The Division of Administrative Hearings has jurisdiction over the

parties and the subject matter in this proceeding. Sections 120.54 and 120.56,

Florida Statutes. 3/ The parties were duly noticed for the formal hearing.

19. The party challenging a proposed or existing rule has the burden of

proof. Florida League of Cities, Inc. v. Department of Insurance and Treasurer,

540 So.2d 850, 857 (Fla. 1st DCA 1989); Grove Isle, Ltd. v. Department of

Environmental Regulation, 454 So.2d 571, 573 (Fla. 1st DCA 1984).

The party challenging the validity of an

agency rule must show that the agency

adopting the rule has exceeded its authority,

that the requirements of the rule are not

appropriate to the ends specified in the

legislative act, and that the requirements

contained in the rule are not reasonably

related to the purpose of the enabling

legislation but are arbitrary and capricious.

Grove Isle, Ltd., 454 So.2d at 573.

20. The parties have challenged the proposed and existing rules in this

proceeding on the grounds that each challenged rule is an invalid exercise of

delegated legislative authority. A proposed or existing rule is an invalid

exercise of delegated legislative authority under Section 120.52(8), Florida

Statutes, if one or more of the following apply:

(a) The agency has materially failed to

follow the applicable rulemaking procedures

set forth in S. 120.54;

(b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by S. 120.54(7);

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required by

S. 120.54(7); or

(d) The rule is arbitrary or capricious.

21. An agency's interpretation of a statute, as evidenced by a challenged

rule, does not have to be the only possible interpretation. Florida League of

Cities, 540 So.2d at 857. Any interpretation that reasonably effectuates the

legislative intent for the statute is permissible. Id. The agency's

interpretation must be clearly erroneous in order to sustain the rule challenge.

Id. The challenged rules should be sustained as long as they are reasonably

related to the purposes of the enabling legislation, and are not arbitrary or

capricious. Grove Isle, Ltd, 454 So.2d at 573.

22. The statutory framework applicable to this proceeding is contained in

Chapter 320, Florida Statutes, and particularly Sections 320.61-320.70.

Legislative intent for the applicable statutory framework is:

. . . to protect the public health, safety,

and welfare of the citizens of the state by

regulating the licensing of motor vehicle

dealers and manufacturers, maintaining

competition, providing consumer protection

and fair trade and providing minorities with

opportunities for full participation as motor

vehicle dealers. Section 320.605.

23. Chapter 320, Florida Statutes, creates a complex relationship between

manufacturers and dealers. The issues in this proceeding must be determined in

a manner that gives purpose and effect to each of the various provisions in

Chapter 320, including Sections 320.61-320.70 and effectuates legislative

intent. D.B. v. State, 544 So.2d 1108, 1109-1110 (Fla. 1st DCA 1989); State v.

Zimmerman, 370 So.2d 1179 (Fla. 4th DCA 1979); Forehand v. Board of Public

Instruction of Duval County, 166 So.2d 668, 672 (Fla. 1st DCA 1964).

Proposed Rule 15C-7.004(4)(a)

24. Section 320.642, Florida Statutes, authorizes existing franchised

motor vehicle dealers to protest the establishment of an additional motor

vehicle dealership or the relocation of an existing dealer by a manufacturer

within a community where the same line-make vehicle is represented. Section

320.642(5) creates an exemption from the protest procedures and criteria

otherwise authorized in Section 320.642 by providing that:

The opening or reopening of the same or a

successor motor vehicle dealer within twelve

months shall not be considered an additional

motor vehicle dealer subject to protest .

Any other such opening or reopening

shall constitute an additional motor vehicle

dealer within the meaning of this section. 4/

25. The terms "opening" and "reopening" are not defined in Section

320.642(5), Florida Statutes. Similarly, the event that begins the 12 month

period of exemption from protest is not prescribed in Sections 320.60-320.70.

26. The "opening" or "reopening" of the same or successor dealer

implicitly requires the prior closing of the same or predecessor dealer. The

parties stipulated on the record during the formal hearing that the same or

predecessor dealer is closed for purposes of Section 320.642(5), Florida

Statutes, if:

(a) the dealership actually closes under

circumstances that are tantamount to

abandonment within the meaning of Section

320.641(4); 5/

(b) the dealer's license is revoked by the

Department in a proceeding brought pursuant

to Section 320.27, or the dealer otherwise

surrenders its license;

(c) the dealer's license expires without

renewal;

(d) the dealer's license is transferred in

connection with a buy-sell agreement and the

relocation of the dealership; or

(e) the franchise agreement between the

dealer and the manufacturer is terminated by

the manufacturer pursuant to Section 320.641.

27. Proposed Rule 15C-7.004(4)(a) begins the 12 month period of exemption

from the date that the dealer's license is either revoked or surrendered. FADA

and SFATDA assert that the 12 month period of exemption from protest should

begin from the date that the dealership closes under circumstances that are

tantamount to abandonment within the meaning of Section 320.641(4), Florida

Statutes. GM and the remaining parties assert that the 12 month period of

exemption from protest should begin from the date that a dealer's franchise

agreement with the manufacturer is cancelled pursuant to Section 320.641.

28. Revocation or surrender of the same or predecessor dealer's license

eventually occurs in each event of closing stipulated to by the parties for

purposes of Section 320.642(5), Florida Statutes. In practice, the revocation

or surrender almost always occurs subsequent to other events such as

abandonment, execution of a buy-sell agreement, and cancellation of a franchise

agreement. The Department can not assure itself of information sufficient to

determine when the 12 month period of exemption from protest begins if the 12

month period of exemption from protest begins upon abandonment or execution of a

buy-sell agreement. 6/

29. The Department is statutorily charged with responsibility for

administering Chapter 320, including the regulation of licenses pursuant to

Section 320.27, the protest procedures in Section 320.642, and the exemption

from protest in Section 320.642(5). The revocation or surrender of a dealer's

license is the only event of closing in which the agency charged with

responsibility for administering Sections 320.27, 320.642, and 320.642(5) has

unilateral access to information sufficient to determine the date for beginning

the 12 month exemption from protest.

30. Proposed Rule 15C-7.004(4)(a) does not preclude a manufacturer from

claiming the benefit of the statutory exemption in Section 320.642(5), Florida

Statutes, for the purpose of "reopening . . . the same . . . dealer." Since

the license for the same dealer would have been revoked or surrendered, the

manufacturer could not reopen the same dealer in any event. Any other "closing"

of the same dealer would not begin the 12 month period of exemption from

protest. In the event of such a "closing", the manufacturer would be free to

"reopen" the same dealer at any time. The adverse affect on the statutory

exemption in Section 320.642(5), if any, is limited to the exemption for

"opening . . . a successor . . . dealer

31. Section 320.641, Florida Statutes, prescribes procedures for the

cancellation of dealer franchise agreements by manufacturers. Section

320.641(7) prohibits a manufacturer from naming a "replacement" dealer prior to

the final adjudication by the Department in the franchise cancellation

proceeding. 7/

32. Section 320.641(7), Florida Statutes, does not have the effect of

precluding GM from availing itself of the 12 month period of exemption from

protest otherwise available in Section 320.642(5) if the license revocation or

surrender occurs after a final adjudication is entered in the franchise

cancellation proceeding. Section 320.641(7) would preclude GM from availing

itself of the 12 month period of exemption from protest if the license

revocation or surrender precedes the franchise cancellation by more than 12

months.

33. GM asserts that the revocation or surrender of a dealer's license more

than 12 months prior to the cancellation of the franchise effectively precludes

the manufacturer from claiming the benefit of the exemption from protest and

thereby denies GM a "clear point of entry" or otherwise deprives GM of its

rights without due process. GM claims that a license revocation proceeding or

license surrender is conducted between the Department and the dealer pursuant to

Section 320.27, Florida Statutes. GM has no statutory right to notice of the

revocation or surrender and has no right to be notified of when the 12 month

period of exemption from protest in Section 320.642(5) has begun. In addition,

GM asserts that it is prohibited by Section 320.641(7) from naming a replacement

dealer pursuant to Section 320.642(5) during the pendency of a franchise

cancellation proceeding. GM claims that Proposed Rule 15C-7.004(4)(a) ". . .

threatens, restricts, and may even eliminate the manufacturer' s exemption."

34. The more likely result in practice is that Proposed Rule 15C-

7.004(4)(a) will extenuate the 12 month period of exemption from protest

procedures. A license revocation or surrender almost always follows a franchise

cancellation proceeding. 8/

35. Even if the license revocation or surrender precedes the franchise

cancellation proceeding, Proposed Rule 15C-7.004(4)(a) does not deny GM a

substantial right without due process or a "clear point of entry." The 12 month

period of exemption from protest is not a ". . . substantial and vested right .

. ." which Section 320.642(5), Florida Statutes, "commands." The quoted language

is more accurately applied to the right of existing dealers to protest an

additional dealership. Even if the quoted language is equally applicable to the

statutory exemption in Sec. 320.642(5), the two "rights" must be balanced in a

manner that effectuates the statement of legislative intent in Sec. 320.605.

36. The 12 month period of exemption from protest is an exception to the

statutory right of dealers to protest an additional dealership or relocated

dealer. Statutory exceptions to general statutory provisions are to be strictly

construed against one attempting to take advantage of the exception. State v.

Nourse, 340 So.2d 966, 969 (Fla. 3d DCA 1976). Exemptions from general

statutory requirements are to be construed in the same manner as exceptions.

See, e.g., Tribune Company v. In re Public Records, P.C.S.O., 493 So.2d 480, 483

(Fla. 2d DCA 1986) (citing Cf. Nourse, which dealt with an exception, for the

proposition that exemptions from disclosure in Ch. 119 should be construed

narrowly); Haines v. St. Petersburg Methodist Home, Inc., 173 So.2d 176, 179

(Fla. 2d DCA 1965)(holding that exemptions from taxation are to be strictly

construed against the taxpayer and in favor of the sovereign). Any ambiguity in

the exception provided in Section 320.642(5) to the statutory right of existing

dealers to protest additional or relocated dealer is properly construed in a

manner that restricts the use of the exception. Nourse, 340 So.2d at 969.

37. The position asserted by GM is based upon the assumption that one

claiming the benefit of an exemption has a due process right to notice from the

agency that the period of exemption has begun. GM cites no authority for such

an assumption and no authority has been found by the undersigned. It is not

unreasonable for the Department to place the onus of determining when the

statutory exemption begins to run upon the person claiming the benefit of the

exemption. GM has access to public records maintained by the Department that

disclose any license revocation or surrender and can otherwise assure itself of

notice of a license revocation or surrender through the terms of the franchise

agreement.

38. Construing the statutory exemption in Section 320.642(5), Florida

Statutes, narrowly against GM effectuates the statement of legislative intent in

Section 320.605. The separate elements of legislative intent in Section 320.605

are balanced in the protest procedures and criteria prescribed in Section

320.642.

39. The procedures and criteria in Section 320.642, Florida Statutes, must

be followed in determining whether existing dealers are providing adequate

representation. The procedures and criteria prescribed in Section 320.642 are

susceptible to change and conditions that warrant an additional or replacement

dealer at a given point in time may not lead to a similar result at a later

point in time.

40. Proposed Rule 15C-7.004(4)(a) recognizes the fact that conditions

prescribed in Section 320.642, Florida Statutes, change over time and

effectuates the statement of legislative intent in Section 320.605. If the 12

month exemption period were to begin on the date the manufacturer cancel led the

franchise agreement, the manufacturer could effectively circumvent the statutory

right of dealers to protest an additional dealership by artificially delaying

the date of the franchise cancellation until the manufacturer was ready to open

or reopen the same or successor dealer within 12 months of the franchise

cancellation. 9/ Recognizing that conditions change, Proposed Rule 15C-

7.004(4)(a) eliminates any potential abuse by manufacturers and facilitates the

statutory right of existing dealers to protest an additional dealership or

replacement dealer on a recurring basis.

41. Proposed Rule 15C-7.004(4)(a) recognizes the fact that the agency

charged with responsibility for administering Chapter 320, Florida Statutes,

must have the means of assuring itself of information sufficient to determine

when the 12 month period of exemption from protest begins and whether the

opening or reopening of the same or successor dealer is subject to protest. If

the 12 month period of exemption from protest were to begin upon abandonment or

execution of a buy-sell agreement, the agency charged with responsibility for

administering the protest and exemption procedures in Section 320.642 would have

insufficient means of assuring itself of the information required to determine

when the 12 month period of exemption from protest began. Determining the 12

month exemption period by reference to the revocation or surrender of the

dealer's license defines both the protest period and exemption period by

reference to the only event of closing for which the agency charged with

responsibility for administering both periods maintains records.

42. The Department's interpretation of the time to begin the 12 month

period of exemption from protest in Section 320.642(5), Florida Statutes,

effectuates a reasonable balance of the separate elements of legislative intent

in Section 320.605. Those elements include regulating the licensing of motor

vehicle dealers and manufacturers, maintaining competition, and providing

consumer protection and fair trade.

43. The economic impact statement for Proposed Rule 15C-7.004(4)(a) is

valid. An economic impact statement is not required to state the exact economic

impact on each person affected. Department of Natural Resources v. Sail fish

Club of Florida, Inc., 473 So.2d 261, 265 (Fla. 1st DCA 1985) review denied 484

So.2d 9. An agency rule will not be declared invalid merely because the

economic impact statement is not as complete as possible. Health Care and

Retirement Corporation of America v. Department of Health and Rehabilitative

Services, 463 So.2d 1175, 1178 (Fla. 1st DCA 1984). An economic impact

statement is sufficient if it is implicit in the statement that there will be

some economic impact on the individual interests affected. Sailfish Club of

Florida, Inc., 473 So.2d at 265. Any deficiency in the economic impact

statement must be so grave as to impair the fairness of the proceeding. Health

Care and Retirement Corporation of America, 463 So.2d at 1178. Even if an

economic impact statement is less than thorough, the hearing officer is not

obliged to find the rule invalid absent a showing that the proceeding had been

rendered unfair or that the action taken was incorrect. Plantation Residents'

Association, Inc. v. School Board of Broward County, 424 So.2d 879 (Fla. 1st

DCA 1982) review denied 436 So.2d 100.

44. There are no facts of record to show that the fairness of this

proceeding has been impaired or that the action taken is incorrect as a result

of the alleged deficiency in the economic impact statement. The economic impact

statement discloses that there will be some economic impact on manufacturers.

It is not necessary for the Department to predict the incremental number and

cost of all hearings that will result from the proposed rule.

45. Proposed Rule 15C-7.004(4)(a) is not an invalid exercise of delegated

legislative authority within the meaning of Section 120.52(8), Florida Statutes.

The Department did not fail to follow applicable rulemaking procedures,

including an adequate economic impact statement. The Department did not exceed

its grant of rulemaking authority. The Department's interpretation of Section

320.642(5) does not enlarge, modify, or contravene the specific provisions of

law implemented. Proposed Rule 15C- 7.004 (4)(a) is not vague, does not fail to

establish adequate standards for agency decisions, and does not vest unbridled

discretion in the Department.

46. There may be other events of closure from which to begin the 12 month

exemption from protest. Alternatively, the Department could have decided to

begin the 12 month period of exemption from protest upon the occurrence of any

one of the five events of closure stipulated to by the parties in this

proceeding. The event of closure selected by the Department, however, is based

upon fact, logic, and reason and effects a reasonable balance of the separate

elements of legislative intent in Section 320.605, Florida Statutes. The

Department's interpretation is not clearly erroneous and is not arbitrary or

capricious.

Proposed Rule 15C-7.004(4)(b)

47. Proposed Rule 15C-7.004(4)(b) provides procedures by which an existing

dealer may change its address. The scope of Proposed Rule 15C-7.004(4)(b) is

limited to the relocation of an existing dealership. The proposed rule requires

the dealer to state the specific provision in Section 320.642(5), Florida

Statutes, which exempts the proposed location from consideration as an

additional dealership.

48. Proposed Rule 15C-7.004(4)(b) is not an invalid exercise of delegated

legislative authority within the meaning of Section 120.52(8), Florida Statutes.

The Department has not exceeded its grant of rulemaking authority. The proposed

rule does not enlarge, modify, or contravene the specific provisions of law

implemented.

49. Proposed Rule 15C-7.004(4)(b) merely reiterates what is permitted

under Section 320.642, Florida Statutes. Section 320.642 authorizes existing

dealers to protest the relocation of a dealer if the relocation meets or

satisfies one of the requirements or conditions in Section 320.642(3). Section

320.642(5) exempts the relocation of a dealer from the protest of an existing

dealer if the relocation satisfies the requirements for exemption under Section

320.642(5)(a)-(d). If a dealer relocates to a proposed location that does not

meet or satisfy the requirements or conditions for protest in Section 320.642(3)

or if the relocation satisfies the requirements for exemption in Section

320.642(5), the Department has no choice but to recognize the relocated dealer

as the franchised dealer of the authorizing manufacturer.

50. Proposed Rule 15C-7.004(4)(b) is not vague, does not fail to establish

adequate standards, and does not vest unbridled discretion in the Department.

The requirement that the dealer indicate the provision in Section 320.642(5),

Florida Statues, which exempts the proposed location from consideration as an

additional dealership imposes sufficient specificity and adequate standards to

preclude the exercise of unbridled discretion. The proposed rule must also be

construed in a manner that gives effect to the provisions of Section 320.642(3).

The requirements and conditions in Section 320.642(3) provide additional

specificity and standards for applying the proposed rule.

51. Proposed Rule 15C-7.004(4)(b) does not conflict with the terms of

Section 320.641(1), Florida Statutes. Section 320.641(1) requires a

manufacturer to give written notice to a dealer and the Department of the

manufacturer's intent to cancel or replace a franchise. 10/ Section 320.641(1)

is limited to the cancellation or replacement of a franchise agreement and does

not address the relocation of an existing dealer.

52. Proposed Rule 15C-7.004(4)(b) does not conflict with the terms of

Section 320.642, Florida Statutes. Section 320.642(1) requires a manufacturer

to give written notice to the Department of the manufacturer's intent to

establish an additional dealership or permit the relocation of an existing

dealership. The fact that Section 320.642(1) requires notice of the

manufacturer's intent to permit an existing dealer to relocate does not preclude

the dealer from relocating without the manufacturer's permission. The proposed

rule merely requires the same notice to the Department from a dealer who intends

to relocate without the permission of the manufacturer as Section 320.642(1)

requires from a manufacturer who intends permit the dealer to relocate. The

Department has no authority to prevent a relocation with or without the

permission of the manufacturer if the relocation either fails to satisfy the

conditions and requirements that precipitate the protest procedures in Section

320.642(3) or satisfies the conditions and requirements for exemption from

protest in Section 320.642(5)(a)-(d).

53. The fact that franchise agreements are entered into by manufacturers

for specific locations does not create a statutory impediment to the relocation

of a dealer without the permission of the manufacturer. If the manufacturer

determines that the relocation of a dealer without the permission of the

manufacturer violates the franchise agreement, the appropriate remedy for the

manufacturer is to institute a franchise cancellation proceeding pursuant to

Section 320.641, Florida Statutes.

54. The economic impact statement for Proposed Rule 15C-7.004(4)(b) is

valid for two reasons. First, the Department has no statutory authority to take

any action other than the action taken in the proposed rule. Second, the

economic impact statement satisfies the criteria generally applicable to such

statements. See discussion at Conclusions of Law, paras. 26 and 27, supra.

55. There are no facts of record to show that the fairness of this

proceeding has been impaired or that the action taken is incorrect as a result

of the alleged deficiency in the economic impact statement. The economic impact

statement discloses that there will be some economic impact on manufacturers.

There is no practical way to calculate with precision the economic impact that

the rule will have on manufacturers and dealers. There is no way to know how

many dealers will wish to move without their manufacturer's permission or how

many dealers would be prevented by a manufacturer from moving from an

unprofitable location in the absence of the rule.

56. Proposed Rule 15C-7.004(4)(b) is not an invalid exercise of delegated

legislative authority. The Department did not fail to follow applicable

rulemaking procedures, including an adequate economic impact statement. The

Department did not exceed its grant of rulemaking authority. The Department's

interpretation of applicable law does not enlarge, modify, or contravene the

specific provisions of law implemented. The proposed rule is not vague, does

not fail to establish adequate standards for agency decisions, and does not vest

unbridled discretion in the Department. The proposed rule is not arbitrary or

capricious.

Proposed Rule 15C-7.004(7)(d) and Florida Administrative Code

Rule 15C-1.008

57. Section 320.642(4), Florida Statutes, limits the life of an order

denying a proposed additional or relocated dealership to 12 months. Chapter

320, however, does not impose a limit on the life of an order entered pursuant

to Section 320.642 approving an additional or relocated dealership.

58. Proposed Rule 15C-7.004(7)(d) and Florida Administrative Code Rule

15C-1.008 limit the life of an order approving an additional or relocated

dealership. The proposed rule requires construction of an additional or

relocated dealership to begin within 12 months of the date of the order of

approval and requires such construction to be completed within 24 months of the

date of the order of approval. The existing rule provides that an order

approving an additional or relocated dealer is effective for a period of 12

months from the date of the final order, or in the event of an appeal, 12 months

from the date of the court's decision. A different period for the life of an

order may be established by the Director for good cause shown.

59. The interplay of the proposed and existing rules produces the

following effect. An order approving an additional or relocated dealership is

good for 12 months unless some other period is established for good cause or

unless the dealership approved must be constructed. If the dealership must be

constructed, construction must begin within 12 months of the date of the order

of approval and end within 24 months of the date of the order of approval unless

the period for beginning and completing construction is extended for good cause.

60. The proposed rule and the existing rule clearly limit the life of an

order approving an additional or relocated dealership to a period less than the

indefinite period created by legislative omission. The issue for determination

is whether the limitations imposed by the proposed rule and existing rule

effectuate legislative intent for Chapter 320.

61. Neither the proposed nor existing rule exceeds the grant of rulemaking

authority. The Department has implied statutory authority to impose limits on

the effective life of its orders entered under Section 320.642, Florida

Statutes. Authority which is indispensable or useful to the valid purposes of a

statute may be inferred or implied by authority expressly given. State v.

Atlantic Coast Line R. Co., 47 So 969 (Fla. 1908); State ex rel Railroad Com'rs.

v. Atlantic Coast Line R. Co., 54 So 394 (Fla. 1911). When authority is given

by a statute to accomplish a stated governmental purpose, there is also given by

implication the authority to do everything reasonably necessary to accomplish

any authorized purpose. Sylvester v. Tindall, 18 So.2d 892 (Fla. 1908).

62. The statement of legislative intent in Section 320.605, Florida

Statutes, includes separate elements that must be balanced in order to achieve

the overall objective of protecting ". . . the public health, safety, and

welfare of the citizens of the state . . . ." Legislative mandates to maintain

competition, provide consumer protection, and provide fair trade require that

the interest in providing adequate representation to manufacturers must be

balanced against the interest in avoiding dealer saturation ("over dealering")

in a given market or community.

63. Section 320.642(2), Florida Statutes, requires the Department to make

the determination of whether an additional or relocated dealer is justified.

Section 320.642(2)(b) describes the type of evidence that may be considered in

making such a determination. The type of evidence to be considered includes

economic conditions, impacts on consumers, and impacts on existing dealers.

64. Economic conditions and impacts change over time. A determination that

is valid today may not be valid five or ten years from now. GM urges that an

order approving an additional or relocated dealership has an indefinite

effective life by virtue of legislative omission. Under GM's approach, an

additional or relocated dealer approved in 1991 can be established in 1996,

2005, or at some later point without repeating the dealer protest procedures

legislatively authorized required in Section 320.642, Florida Statutes. The

protest procedures in Section 320.642, however, are required for the purpose of

determining whether there is adequate representation in the community, i.e.,

whether there is competition, consumer protection, and fair trade in the

community within the meaning of Section 320.605. Authority to limit the

effective life of an order approving an additional or relocated dealer is both

useful and indispensable to accomplishing the objectives of Sections 320.605 and

320.642, Florida Statutes.

65. Neither Proposed Rule 15C-7.004(7)(d) nor Florida Administrative Code

Rule 15C-1.008 is vague or fails to establish adequate standards for agency

decisions. The limit of 12 months established in the existing rule is stated in

terms of a specific period of time. A period of 12 months is consistent with

the statutory scheme in Sections 320.60-320.70, Florida Statutes, and is

appropriate to the statement of legislative intent in Section 320.605.

Exceptions to rule limiting orders of approval to 12 months are expressed in

terms of beginning and completing construction and in terms of good cause shown.

The beginning and completion of construction and good cause provide adequate

standards for extending the effective life of orders approving an additional or

relocated dealer.

66. Neither Proposed Rule 15C-7.004(7)(d) nor Florida Administrative Code

Rule 15C-1.008 enlarges, modifies, or contravenes the specific provisions of the

law implemented. Legislative omission of a limit on the effective date of an

order approving an additional or relocated dealer does not preclude the

imposition of such a limit by administrative rule. The imposition of a limit on

such orders by administrative rule is consistent with and effectuates the

statement of legislative intent in Section 320.605.

FINAL ORDER

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

ORDERED that:

1. Proposed Rules 15C-7.004(4)(a), (4)(b), and (7)(d), and Florida

Administrative Code Rule 15C-1.008 do not constitute an invalid exercise of

delegated legislative authority;

2. Each challenge to Proposed Rules 15C-7.004(4)(a), (4)(b), and (7)(d),

and each challenge to Florida Administrative Code Rule 15C-1.008 is DENIED, and

the petitions are hereby dismissed.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 8th day of July

1991.

_________________________

DANIEL MANRY

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 8th day of July 1991.

ENDNOTES

1/ The parties and their positions in each case are reflected in the style of

the case. A party who has intervened in support of the position asserted by a

primary party is joined to the name of the other party by the word "and". A

party who has intervened and asserts a different position than one or more of

the primary parties is joined to the primary party by the indication "vs.".

2/ Except for references to Sec. 320.27, Fla. Stat., all chapter and statutory

references are to Florida Statutes (1989) unless otherwise stated. Sec. 320.27

was amended in 1990 by Ch. 90-163, Laws of Florida. The amendments are set

forth in Sec. 320.27, Fla. Stat. (1990 Supp.).

3/ Except for references to Sec. 320.27, Fla. Stat., all chapter and statutory

references are to Florida Statutes (1989) unless otherwise stated. Sec. 320.27

was amended in 1990 by Ch. 90-163, Laws of Florida. The amendments are set

forth in Sec. 320.27, Fla. Stat. (1990 Supp.).

4/ Sec. 320.642(5)(a)-(d), Fla. Stat., imposes certain criteria that must be

met for the exemption from protest to apply. Those criteria, however, are not

at issue in this proceeding.

5/ A dealership closes each day that it closes its doors. The parties agreed,

however, that the closing that is implicit in Sec. 320.642(5), Fla. Stat.,

requires a substantial closing similar to an abandonment described in Sec.

320.641(4). Abandonment occurs under Sec. 320.641(4) whenever the dealer fails

to be engaged in business with the public for 10 consecutive business days

excluding acts of God, work stoppages, or delays caused by a strike, labor

difficulties, freight embargoes, or other causes over which the dealer has no

control, including a violation of Sections 320.60-320.70, Florida Statutes.

6/ The Department would have information sufficient to determine the date for

beginning the 12 month period of exemption from protest if the closing occurred

upon the cancellation of the franchise agreement. Section 320.641(1), Fla.

Stat., requires written notice to the Department of the manufacturer's intent to

cancel a franchise agreement. However, the potential for frustrating

legislative intent for Ch. 320 is greater if the 12 month period of exemption

from protest begins when the franchise agreement is cancelled. See discussion

at Conclusions of Law, paras. 20-25, infra.

7/ Sec. 320.641(3), Fla. Stat., also provides that franchise agreements and

certificates of appointment shall continue in effect until a final adjudication

is entered in the franchise cancellation proceeding.

8/ But see, General Motors Corporation, Chevrolet Motor Division, v. Florida

Department of Highway Safety and Motor Vehicles, Potamkin Chevrolet, Inc. and

Kelley Chevrolet, Inc., Division of Administrative Hearings Case NO. 91-0217, in

which the license revocation or surrender preceded the franchise cancellation

proceeding.

9/ There are two conjunctive requirements that must be met in order for a

manufacturer to avail itself of the statutory exemption in Sec. 320.642(5),

Fla. Stat. The first requirement is procedural in that it requires the opening

or reopening of the same or successor dealer within 12 months of an unspecified

event. The second requirement is substantive in that it requires objective

criteria prescribed in Sec. 320.642(5)(a)-(d) to be met in order for the

exemption to apply.

10/ Sec. 320.641(1), Fla. Stat., in relevant part, requires a manufacturer to:

. . . give written notice to the motor

vehicle dealer and the department of the

licensee's intention to discontinue, cancel,

or fail to renew a franchise agreement or of

the licensee's intention to modify a

franchise or replace a franchise with a

succeeding franchise . . .

APPENDIX

There are no disputed issues of material facts in this

proceeding. The facts stipulated to by the parties before and

during the formal hearing are accepted in the Findings of Fact in

this Final Order.

COPIES FURNISHED:

Charles J. Brantley, Director

Division of Motor Vehicles

Department of Highway Safety

and Motor Vehicles

Room B439, Neil Kirkman Building

Tallahassee, FL 32399-0500

Enoch Jon Whitney, Esquire

General Counsel

Department of Highway

Safety and Motor Vehicles

Neil Kirkman Building

Tallahassee, FL 32399-0500

Liz Cloud, Chief

Bureau of Administrative Code

The Capitol, Room 1802

Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director

Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399-1300

Dean Bunch, Esquire

Rumberger, Kirk, Caldwell,

Cabaniss, Burke & Wechsler

106 East College Avenue

Suite 700

Tallahassee, Florida 32301

Daniel E. Myers, Esquire

Myers & Forehand

402 N. Office Plaza Drive

Tallahassee, Florida 32301

William C. Owen, Esquire

Loula M. Fuller, Esquire

Carlton, Fields, Ward,

Emmanuel, Smith & Cutler

410 First Florida Bank Bldg.

Tallahassee, Florida 32301

James D. Adams, Esquire

Feaman, Adams and Fernandez

4700 N.W. 2nd Avenue

Suite 400

Tallahassee, Florida 33431

Charles H. Lockwood, II, Esq.

Association of International

Automobile Manufacturers

1001 19th Street North

Suite 1200

Rosslyn, Virginia 22209

Linda J. McNamara, Esquire

Glenn, Rasmussen, Fogarty,

Merryday & Russo

100 South Ashley Drive

Suite 1300

Tampa, Florida 33601

Michael J. Alderman, Esquire

Mr. Neil C. Chamelin

Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building, A-432

Tallahassee, Florida 32301

REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE

PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF

APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A

SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT

COURT OF APPEAL, FIRST DISTRICT, OR WITH THE DISTRICT COURT OF APPEAL IN THE

APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED

WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

=================================================================

DISTRICT COURT OPINION

=================================================================

IN THE DISTRICT COURT OF APPEAL,

FIRST DISTRICT, STATE OF FLORIDA

GENERAL MOTORS CORPORATION, NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED.

v. CASE NO. 91-2502

DOAH CASE NO. 91- 2591RP

FLORIDA DEPARTMENT OF HIGHWAY

SAFETY AND MOTOR VEHICLES;

FLORIDA AUTOMOBILE DEALERS

ASSOCIATION, and SOUTH FLORIDA

AUTO TRUCK DEALERS ASSOCIATION,

Appellees.

_______________________________/

ED MORSE CHEVROLET OF SEMINOLE,

INC.,

Appellant,

v.

FLORIDA DEPARTMENT OF HIGHWAY CASE NO. 91-2503

SAFETY AND MOTOR VEHICLES;

FLORIDA AUTOMOBILE DEALERS (CONSOLIDATED)

ASSOCIATION, and SOUTH FLORIDA

AUTO TRUCK DEALERS ASSOCIATION,

_______________________________/

Opinion filed September 22, 1993.

An appeal from an Order of the Division of Administrative Hearings.

Dean Bunch of Cabaniss, Burke & Wagner, P.A., Tallahassee, for General Motors

Corporation; Michael A. Fogarty and Richard E. Fee of Glenn Rasmussen & Fogarty,

Tampa; Lee Stracher of Stracher & Harmon, P.A., Plantation, for Appellant Ed

Morse Chevrolet of

Seminole, Inc.

Enoch J. Whitney, General Counsel; Michael J. Alderman, Assistant General

Counsel, Department of Highway Safety and Motor Vehicles, Tallahassee for

Appellee State of Florida Department of Highway Safety and Motor Vehicles;

William C. Owen of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A.,

Tallahassee, for Appellee Florida Automobile Dealers Association; James D. Adams

of Adams & Quinton, P.A., Boca Raton, for South Florida Auto Truck Dealers

Association.

WEBSTER, J.

In these two consolidated appeals, appellants seek review of a final order

entered by a Division of Administrative Hearings hearing officer. In that final

order, the hearing officer concluded that Florida Administrative Code Rule 15C-

1.008 and Proposed Rules 15C7.004(4)(a), (4)(b) and (7)(d) do not constitute

invalid exercises of authority delegated to the Department of Highway Safety and

Motor Vehicles (Department) by the legislature; and, accordingly, denied

appellants' challenges to those rules. On appeal, appellants address only rule

15C- 1.008, which they argue is inconsistent with chapter 320, Florida Statutes

(1989); and exceeds the rulemaking authority granted to the Department by the

legislature We affirm.

Rule 15C-1.008 is intended principally to implement section 320.642,

Florida Statutes, which addresses the procedure to be followed to determine

whether an application for a motor vehicle dealer license should be granted when

a manufacturer, factory branch, distributor or importer of motor vehicles

"proposes to establish an additional . . . dealership or permit the relocation

of an existing dealer to a location within a community or territory where the

same line-make vehicle is Presently represented by a franchised . . . dealer or

dealers." 320.642(1), Fla. Stat. (1989). Subsection (2) of that section

requires the Department to deny an application for a motor vehicle dealer

license when "[a] timely protest is filed by a presently existing franchised . .

. dealer with standing, and the manufacturer, factory branch, distributor or

importer "fails to show that the existing franchised dealer or dealers who

register new motor vehicle retail sales or retail leases of the same line-make

in the community or territory of the proposed dealership are not providing

adequate representation of such line-make motor vehicles in such community or

territory." 320.642(2)(a)1. & 2., Fla. Stat. (1989). Subsection (2) requires,

further, that, in making a determination regarding the adequacy of existing

representation in the community or territory, the Department consider evidence

directed to Certain enumerated issues, or "questions." 320.642(2)(b), Fla.

Stat. (1989).

Appellants object only to the last portion of rule 15C- 1.008, which reads:

The Director may make such further

investigation and hold such hearing as he

deems necessary to determine the questions

specified under Section 320.642. A

determination so made by the Director shall

be effective as to such license for a period

of twelve (12) months from the date of the

Director's Order, or date of final judicial

determination in the event of an appeal,

unless for good cause a different period is

set by the Director in his order of

determination.

(Emphasis added.) Appellants argue that, because no such time limit is

contained in section 320.642, the Department lacks the authority to adopt one by

rule. They do not argue on this appeal that the time limit chosen is

unreasonable and, therefore, arbitrary or capricious. Rather, they argue that

any such time limit is beyond the Department authority. We are unable to accept

appellants' argument.

The legislature's intent in adopting sections 320.60 through 320.70 is

expressed as follows:

It is the intent of the Legislature to

protect the public health, safety, and

welfare of the citizens of the state by

regulating the licensing of motor vehicle

dealers and manufacturers, maintaining

competition, providing consumer protection

and fair trade and providing minorities with

opportunities for full participation as motor

vehicle dealers.

320.605, Fla. Stat. (1989). As to chapter 320 generally, the legislature has

provided that "[t]he [D] epartment shall administer and enforce the provisions of

this chapter and may adopt such rules as it deems necessary or proper for the

administration hereof." 320.011, Fla. Stat. (1989). The legislature has

reiterated its intent in this regard in section 320.69, which relates

Specifically to sections 320.60 through 32070: "The [D] epartment may make such

rules and regulation as it shall deem necessary or proper for the effective

administration and enforcement of this law." 320.69, Fla. Stat. (1989).

"[R] ulemaking authority may be implied to the extent necessary to properly

implement a statute governing the agency's statutory duties and

responsibilities. Department of Professional Regulation, Board of Professional

Engineers v. Florida Society of Professional Land Surveyors, 475 So.2d 939, 942

(Fla. 1st DCA 1985). Accord Fairfield Communities v. Florida Land and Water

Adjudicatory Commission, 522 So.2d 1012 (Fla. 1st DCA 1988). Moreover,

[ i]t is well established in Florida that the

Legislature, having enacted a Statute

complete in itself which declares a

legislative policy or standard and operates

to limit the power delegated, may authorize

an administrative agency to prescribe rules

and regulations for its administration. . . .

Where the empowering provision of a statute

states simply that an agency may "make such

rules and regulations as may be necessary to

carry out the provisions of this Act", the

validity of regulations promulgated

thereunder will be sustained so long as they

are reasonably related to the purposes of the

enabling legislation, and are not arbitrary

or capricious.

Florida Beverage Corp. v. Wynne, 306 So.2d 200, 202 (Fla. 1st DCA 1975)

(citations omitted). Accord General Telephone Co. v. Florida Public Service

Commission, 446 So.2d 1063 (Fla. 1984). We believe that the portion of rule

15C-1.008 to which appellants object constitutes a valid exercise of the

Departments implied rulemaking authority

Sections 320.011 and 320.69 clearly give the Department the authority to

adopt such rules as it deems necessary effectively to administer and to enforce

the law, consistent with the legislative intent. The expressed intent is "to

protect the public health, safety, and welfare of the citizens of the state by

regulating the licensing of motor vehicle dealers and manufacturers, maintaining

competition, providing consumer protection and fair trade and providing

minorities with opportunities for full participation as motor vehicle dealers."

320.605, Fla. Stat. (1989).

"The purpose of [section] 320.642 . . . is to prevent powerful

manufacturers from taking unfair advantage of their dealers by overloading a

`market area with more dealers than can be justified by the legitimate interests

of the manufacturer and its dealers, existing and prospective." Bill Kelley

Chevrolet, Inc. v. Calvin, 322 So.2d 50, 52 (Fla. 1st DCA 1975), cert. denied,

336 So.2d 1180 (Fla. 1976). Accord Plantation Datsun, Inc. v. Calvin, 275 So.2d

26 (Fla. 1st DCA 1973). Consistent with that purpose, section 320.642(2)

requires the Department to determine whether an additional (either new or

relocated) dealership is justified, economically and otherwise, from the

viewpoints of the existing dealers and the public, respectively. The types of

evidence which the statute requires the Department to consider include

demographic and market data. Clearly, such data changes over time, as does the

economy. What may be a perfectly defensible determination based upon today's

data, might well prove to be indefensible at some point in the future. It seems

to us that, in order effectively to administer section 320.642, it is essential

that the Department have the authority to limit the life of a determination made

pursuant to that section. Accordingly, we conclude that the authority to adopt

rule 15C-1.008 is fairly implied from chapter 320 generally and, more

particularly, sections 320.60 through 320.70. Fairfield Communities, 522 So.2d

at 1014; Florida Society of Professional Land Surveyors, 475 So.2d at 942.

AFFIRMED.

ERVIN, J., CONCURS; BOOTH, J., DISSENTS WITH WRITTEN OPINION.

BOOTH, J., DISSENTING:

A careful review of chapter 320, Florida Statutes, fails to reveal any

basis for the challenged portion of Florida Administrative Code Rule 15C-1.008,

which provides for automatic expiration of a Previously approved application for

license. The following is the sum total of the rule on this matter:

A determination so made [granting an

application] by the Director shall be effective

as to such license for a period of twelve (12)

months from the date of the Director's Order,

or date of final judicial determination in

the event of an appeal, unless for good cause

a different period is set by the Director in

his order of determination.

This is no small "Procedural" matter, as the requirements for obtaining approval

of such application are among the most arduous and expensive of any under

Florida law. 2/

Briefly, the facts are that appellant obtained from General Motors in

December 1987 a statement of intent to authorize an additional dealership in

Seminole, Pinellas County, Florida. The dealership, to be operated by appellant

herein, was to have an annual sales volume of up to 1,360 cars and trucks, and

would require 213,825 square feet of property. In May 1988, appellant, after

complying with the requirements of Sections 320.27 and 320.642, Florida

Statutes, sent its Preliminary application for franchise motor vehicle license

to the Department. Thereafter, an existing Chevrolet dealer in the area filed a

protest contesting the need for appellant's new dealership. Following a lengthy

Department of Administrative Hearings hearing in May 1989, the hearing officer

concluded that - there was an existing need for appellant's dealership and

recommended that appellant's application be granted. The Department thereafter

issued a final order adopting the hearing officer's recommendation, and

Consequently, in November 1989, notified appellant of the pertinent provision of

rule 15C-1.008,

that the determination would be effective for a period of 12 months from the

date of the order or date of final judicial determination.

The Protesting Chevrolet dealer took an appeal from the final order, and on

June 18, 1990, the Second DCA affirmed the order without opinion. By this time,

appellant had spent two and a half years and well over one million dollars

acquiring the Site and obtaining approval. The Department informed appellant

that this approval would expire at the end of one year, unless appellants

complied with certain requirements which were not then explicated in any statute

or rule. 3/

The Department and the majority rely on section 320.642, Florida Statutes,

which rule 15C-1.008 purports to implement, as authority for the rule. That

statute, while setting forth in considerable detail the procedure and

evidentiary findings necessary for the Department's determination of whether an

application should be granted, has no provision which even remotely implies that

the Department has the authority to impose a time limit on an application it

chooses to grant. 4/

In pursuit of statutory authority, the majority cites section 320.605,

Florida Statutes, which is not cited in the Administrative Code as authority for

the rule and in fact is merely a statement setting forth the general intent of

the Legislature in adopting sections 320.60 through 320.70, Florida Statutes.

Two other statutes proposed as authority are sections 320.011 and 320.69,

Florida Statutes, which permit the Department to adopt such rules as it deems

"necessary or proper" for administration of the provisions of chapter 320.

It is axiomatic that an agency has certain implied rulemaking authority

limited to what is required or necessary to carry out the statutory purposes.

Equally basic is the rule of Board of Trustees v. Board of Professional Land

Surveyors, 566 So.2d 1358, 1360 (Fla. 1st DCA 1990), wherein this court held:

All rulemaking authority delegated to

administrative agencies is of course limited

by the statute conferring the power.

Department of Professional Regulation v.

Florida Society of Professional Land Surveyors,

475 So.2d 939, 942 (Fla. 1st DCA 1985).

According to section 120.52, Florida Statutes,

a proposed rule is an invalid exercise of

delegated legislative authority if it

goes beyond the powers, functions, and duties

delegated by the Legislature." If the agency

has exceeded its grant of rulemaking

authority, or if the rule enlarges, modifies,

or contravenes the specific provisions of law

implemented, such infractions are among those

requiring a conclusion that the proposed rule

is an invalid exercise of delegated legislative

authority. s. 120.52, F.S.

Section 120.54, Florida Statutes, provides that no agency has inherent

rulemaking authority. An agency cannot adopt by rule omitted statutory

provisions. Department of Business Regulation v. Salvation Limited, Inc., 452

So.2d 65, 66 (Fla. 1st DCA 1984). 5/

There is simply no Florida authority for the proposition that a statutory

provision setting forth legislative policy-or enabling an administrative agency

to enact rules as necessary confers upon the agency authority to make policy in

areas in which the Legislature has declined to act. Here, the Legislature

declined to impose a time limitation following approval of an application while

specifying a 12-month delay after denial before reapplication would be allowed.

The universally understood rule, stated in 1 Am. Jur. 2d 42 is as follows:

"General [statutory] language describing the powers and functions of an

administrative body may be construed to extend no further than the Specific

duties and powers conferred by the same statute." In Cataract Surgery Center v.

Health Care Cost Containment Board, 581 So.2d 1359 (Fla. 1st DCA 1991), the

agency claimed the power to adopt a rule requiring the Submission of certain

data from ambulatory Surgery centers. Chapter 407, Specifically conferred Such

authority upon the agency as to hospitals and nursing homes, but was absolutely

silent on the subject of data collection from ambulatory Surgery centers. This

court held that the general Statutory grant of rulemaking authority was nothing

more than a restatement of the agency's common-law powers, and granted no

authority to adopt the specific rule on collection of data from the surgery

centers. Indeed, it has been clear until now that a general grant of rulemaking

authority does not permit an agency to legislate by adopting Provisions omitted

from enabling Statutes. State Department of Insurance v. Insurance Service

Office, 434 So.2d 908, 910 (Fla. 1st DCA 1983); State Department of Health and

Rehabilitative Services v. McTigue, 387 So.2d 454 (Fla. 1st DCA 1980);

Department of Health and Rehabilitative Services v. Florida Psychiatric Society,

382 So.2d 1280 (Fla. 1st DCA 1980).

The majority seems to confuse the issue of whether the adoption of Florida

Administrative Code Rule 15C-1.008 was within the Department's delegated

rulemaking authority, with the issue raised by the Department that the rule is a

good idea." The latter is an issue to be addressed by the Legislature, not by

the Department or a panel of this court.

The Department's rule totally fails to inform applicants what must be done

to avoid the automatic one-year expiration. This rule not only permits but

encourages Precisely what the Administrative Procedure Act was intended to

prevent, to-wit: disparate treatment of similarly-situated applicants. Under

the rule, an applicant must spend substantial sums of money and then engage in

expensive Protracted litigation only to be rewarded with an "approval" which

will expire in one year unless certain unspecified conditions are met.

Appellant, after more than five years of litigation and vast expenditures, is

left with nothing under the Department's rule except the right to start over.

ENDNOTES

1/ Nothing in the rules effective at the time of this application provides any

notice to the applicant as to what is required to obtain an extension.

Subsequently, a rule was adopted to require commencement of construction within

12 months of application approval. Fla. Admin. Code R. 15C-7.004(7)(d)

(effective October 14, 1991).

2/ Section 320.27, Florida Statutes, sets forth lengthy and complex application

Procedures, and requires, inter alia, a substantial financial commitment, as

evidenced by:

Such application shall describe the exact

location of the place of business and shall

state whether the place of business is owned

by the applicant and when acquired, or, if

leased, a true copy of the lease shall be

attached to the application. The applicant

shall certify that the location provides an

adequately equipped office and is not a

residence; that the location affords sufficient

unoccupied Space upon and within which

adequately to store all motor vehicles offered

and displayed for sale; and that the location

is a suitable place where the applicant can in

good faith carry on such business and keep and

maintain books, records, and files necessary to

conduct such business, which will be available

at all reasonable hours to inspection by the

department or any of its inspectors or other

employees.

Section 320.642 sets forth detailed procedures governing notice to other

dealers. If an existing dealer protests, time- consuming, expensive litigation

follows in which the Department must weigh evidence relevant to eleven different

factors, in determining whether to grant the application. 320.642, Fla. Stat.

3/ Appellant's unsuccessful efforts to Satisfy these requirements are the

subject of a companion Suit now Pending in this court, case number 92-1420.

4/ Compare section 381.710(2)(b), which specifically provides for a one-year

expiration date for a certificate of need permitting construction of a health

care facility as defined in section 381.702, Florida Statutes.

5/ The converse of the rule prohibiting administrative agencies from

enlarging, modifying, or contravening provisions of statutes is that statutes

purporting to allow administrative agencies to do so are violative of Article

II, Section 3 of the Florida Constitution, which sets forth the principle of

separation of powers. Florida Home Builders Association vs. Division of Labor,

Bureau of Apprenticeship, 367 So. 2d 219 (Fla. 1979). An appellate court must

not adopt a construction of a statute which would render the statute

unconstitutional. State v. Hoyt, 609 So. 2d 744, 747 (Fla. 1st DCA 1992).

MANDATE

From

DISTRICT COURT OF APPEAL OF FLORIDA

FIRST DISTRICT

To the Honorable Daniel Manry, Hearing Officer,

WHEREAS, in that certain cause filed in this Court styled: Division of

Administrative Hearings

GENERAL MOTORS CORPORATION

v.

Case No. 91-2502

FLORIDA DEPARTMENT OF HIGHWAY

SAFETY AND MOTOR VEHICLES; Your Case No. 91- 2591RP, 91- 2821RP

FLORIDA AUTOMOBILE DEALERS 91- 2822RP, 91- 2899RP

ASSOCIATION, and SOUTH FLORIDA 91- 2901RP, 91- 2902RP

AUTO TRUCK DEALERS ASSOCIATION,

et al.

The attached opinion was rendered on September 22, 1993.

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said

opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable E. Earle Zehmer

Chief Judge of the District Court of Appeal of Florida, First District and

the Seal of said court at Tallahassee, the Capitol, on this 16th day of

December, 1993.

___________________________________________

Clerk, District Court of Appeal of Florida,

First District