STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BREAKERS OF PANAMA CITY BEACH, ) INC., d/b/a BREAKERS RESTAURANT ) AND LOUNGE, )

)

Petitioner, )

)

vs. ) CASE NO. 84-2120RX

)

DEPARTMENT OF BUSINESS ) REGULATION, DIVISION OF ALCOHOLIC ) BEVERAGES AND TOBACCO, )

)

Respondent. )

)

FINAL ORDER

This matter came on for hearing in Tallahassee, Florida, before the Division of Administrative Hearings on July 10, 1984. Arnold H. Pollock, the Hearing Officer named in the Order of Assignment entered June 20, 1984, was unavailable, on account of illness, and Robert T. Benton, II, presided in his stead. The record closed on August 7, 1984, with the filing of Petitioner's Exhibit No. 4.

The parties filed proposed final orders on August 28 and September 4, 1984. Also on September 4, 1984, respondent filed a motion to supplement record, which was met, on September 6, 1984, with a response in opposition and petitioner's motion to strike so much of respondent's proposed order as incorporated the material proposed as a supplement to the record. Respondent filed a response to motion to strike on September 15, 1984. By order entered September 19, 1984, the motion to supplement record was denied and the motion to strike was granted.

APPEARANCES

For Petitioner: Jeannette M. Andrews, Esquire

Chris H. Bentley, Esquire Post Office Box 1739 Tallahassee, Florida 32302

For Respondent: William Averell Hatch, Esquire

725 South Bronough Street Tallahassee, Florida 32301

By its petition, as limited and refined by stipulation at hearing, petitioner alleges that certain of respondent's "policy and procedure guidelines" and certain provisions of its Policy and Procedure Manual amount to administrative rules which were never duly promulgated.

ISSUE

Whether parts of respondent's Proposed Guidelines For Setting Civil Penalties, Section 501 and/or Section 503 of its Policy and Procedure Manual should be declared invalid exercise(s) of delegated legislative authority?

FINDINGS OF FACT

1. Petitioner holds an alcoholic beverage license, No. 13-292 SRX 5 COP, issued by respondent. On January 31, 1984, respondent entered a final order revoking petitioner's license, Petitioner's Exhibit No. 2, which recites that petitioner's "agent, servant or employee did sell, give or serve an alcoholic beverage" to a 16-year-old; that records reflect three "prior violations of the beverage laws concerning illegal sale or service of alcoholic beverages to minors"; and that

   
   

   The policy and procedure guidelines of the Division provide that a license may be revoked any time a license has 2 or more prior minors violations against it.

   Petitioner's Exhibit No. 2.

   
   

   The order of revocation has been stayed, pending disposition of the appeal in Breakers of Panama City Beach, Inc. d/b/a The Breakers Restaurant and Lounge v. State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, No. AX-440 (Fla. 1st DCA; filed Feb. 28, 1984).

   
   

2. A separate notice to show cause directed to petitioner, alleging other sales to minors, has resulted in a separate proceeding, now pending in the Division of Administrative Hearings, Division of Alcoholic Beverages and Tobacco

   v. Breakers of Panama City Beach, Inc. d/b/a The Breakers Restaurant and Lounge, No. 83-3217.

   
   

3. Respondent's Policy and Procedure Manual contains policies which, the parties have stipulated, "are applicable throughout the entire Division of Alcoholic Beverages and Tobacco and to all licensees, including the petitioner." Respondent's Exhibit No. 1. In pertinent part, the Policy and Procedure Manual states:

   
   

   501.1-Use of Guidelines

   
   

   In an effort to assure consistency in civil penalties in settling administrative charges against beverage licenses, the following guidelines are offered as reasonable penalties for the violations listed. The recommendations listed do not consider mitigating or aggravating circumstances which are important . . . [and] may increase or decrease the penalty. . . Mitigating or aggravating circumstances should not vary the penalty from the recommended normal without written justification . . .

   
   

   503-SALE TO UNDERAGE PERSONS

   
   

   In cases involving sale to or serving underage

   persons where an employee violated the law without knowledge by the licensee and with no prior like violations, a minimum $500 civil penalty should be considered. Failure to pay civil penalty within the time specified should result in a minimum 10 day suspension of the beverage license. In the event there is a prior violation, a minimum of $1,000 or 20 days should be considered. In the event there are two or more prior violations, revocation is appropriate. In cases where the licensee participated in or had direct knowledge of the violation, the penalty for the first offense should be a minimum of $1,000 or 20 days suspension.

   
   

   The second such violation should result in a consideration of revocation of the beverage license.

   
   

   Petitioner's Exhibit No. 4.

   
   

   These policies "took effect" only after the order of revocation was entered. At the time the order was entered, Proposed Guidelines For Setting Civil Penalties (Proposed Guidelines) Petitioner's Exhibit No. 3, had been distributed to respondent's personnel "for the purpose of guidance at the district level," (T.

   33) in response to an audit by the Auditor General. The order of revocation makes reference to the Proposed Guidelines, which state, in pertinent part:

   
   

   PROPOSED GUIDELINES FOR SETTING CIVIL PENALTIES

   
   

   In an effort to assure consistency in civil penalties in settling administrative charges against beverage licenses, the following guideline is offered as a reasonable penalty for the violation listed. The recommendation listed does not consider mitigating or aggravative circumstances which are an important part of the consideration when valid. The circumstances, when considered, may increase or decrease the penalty accordingly.

   Usual mitigating or aggravating circumstances to be considered are: 1) past record, 2) whether or not violation appears to be willful,

   3) participation by licensee and/or his employees, 4) events that led to violation,

   5) prior verbal or written warnings by any law enforcement officer and 6) whether or not the licensee should have known that the act committed was a violation of law or rule. Mitigating or aggravating circumstances should not vary the penalty from the recommended normal without written justification. A

   revised stipulation transmittal sheet (Form DBR 965) allows ample room for comments by the District Supervisor and the Assistant Chief of Law Enforcement.

   
   

   On every disapproved stipulation, the District Supervisor will be advised why it was disapproved and what is acceptable.

   * * *

   
   

   SALE TO MINORS

   
   

   In cases involving minors where an employee violated the law without knowledge by licensee and with no prior like violations, a $250 civil penalty should be considered. In the event there is a prior violation $500 should be considered. In the event there are two or more prior violations a $1,000 civil penalty and 30 day suspension and/or revocation is appropriate. In cases where the licensee participated or had direct knowledge of the violation, the penalty for a first offense should be $500 with subsequent penalties increased accordingly.

   
   

   SALE TO MINORS - ADOPTED CASES

   
   

   In the case of adopted minor violations, each adopted case should be considered on its own merit under the same criteria mentioned above. Before consideration is given, it must be determined that a Beverage Officer has investigated the allegations, including interviewing the principal witnesses.

   
   

   In the event minors were used to make such case, consideration for: 1) Did the minor look to be of age? (Photo of minor should be available.) Was there prior complaints or information on the licensed premises which was involved? 2) Was there corroborating witness?

   3) Was the investigation conducted in the interest of deterring and stopping the sale of alcoholic beverages to minors? Based on these factors and the feeling of the investigating Officer with respect to the licensed premises and the Division's responsibility, the minor case should be adopted and handled accordingly as outlined.

   
   

   Petitioner's Exhibit No. 3.

   
   

   The parties stipulated that neither the Policy and Procedure Manual nor the Proposed Guidelines have been duly promulgated as rules.

   CONCLUSIONS OF LAW

   
   

4. The Division of Administrative Hearings has jurisdiction over these parties and of the subject matter of this proceeding, a challenge to putative, unpromulgated rules. Section 120.56, Florida Statutes (1983).

STANDING

Petitioner relies on the language of the order of revocation in asserting that it has been substantially affected by respondent's Proposed Guidelines.

Respondent contends that the Proposed Guidelines do not substantially affect petitioner, within the meaning of Section 120.56, Florida Statutes (1983) because (a) the Proposed Guidelines "were for use in settlement ne[go]tiations only," and because (b) the Policy and Procedure Manual has superseded the Proposed Guidelines.

Under the holding in Florida Real Estate Commission v. Webb, 367 So.2d 201 (Fla. 1978), agencies have broad discretion in imposing penalties, and have no obligation to specify their reasons. In entering this order of revocation, however, respondent invoked the Proposed Guidelines. By their terms, the Proposed Guidelines only applied "in settling administrative charges," Petitioner's Exhibit No. 3, and so lacked direct application to petitioner, which never agreed to revocation of its license, or otherwise entered into a settlement. But the standard for settlement evidently proved persuasive, and was cited in support of revocation. Its effect was substantial, even if indirect. The fact that respondent no longer uses the Proposed Guidelines in dealings with other licensees does not in itself insulate the Proposed Guidelines from challenge as an unpromulgated rule. Here, as in State Dept. of Transportation v. Pan American Construction Co., 338 So.2d 1291 (Fla. 1st DCA 1976), the substantial effects of superseded language have outlived the language itself.

With respect to the charge still pending in the Division of Administrative Hearings, it is clear that settlement, to which the Policy and Procedure Manual concededly applies, is a possible disposition. The parties stipulated, moreover, that the Policy and Procedure Manual is "applicable . . . to . . . petitioner."

MERITS

The evidence showed the Policy and Procedure Manual and the Proposed Guidelines to be "agency policy statements of general applicability . . . intended to be applied with the force of a rule of law." State Department of Administration v. Stevens, 344 So.2d 290, 296 (Fla. 1st DCA 1977). Although they are in the form of "internal management memoranda," it cannot be said that they "do not affect the private interests of any person or any plan or procedure important to the public." 344 So.2d at 296. The parties' stipulation that neither the Proposed Guidelines nor the Policy and Procedure Manual has been promulgated as an administrative rule in accordance with Chapter 120, Florida Statutes (1983), is dispositive on the merits, without regard to the substance of any of the challenged provisions. State Department of Administration v.

Stevens, 344 So.2d 290 (Fla. 1st DCA 1977).

It is, accordingly,

ORDERED:

1. So much of the Proposed Guidelines For Settling Civil Penalties as has been quoted above is declared invalid as a rule.

   
   

2. Sections 501 and 503 of the respondent's Policy and Procedure Manual are declared invalid as a rule.

DONE and ENTERED this 26th day of September, 1984, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 26th day of September, 1984.

COPIES FURNISHED:

Jeannette M. Andrews, Esquire Chris H. Bentley, Esquire

P. O. Box 1739 Tallahassee, Florida 32302

William Averell Hatch, Esquire 725 South Bronough Street Tallahassee, Florida 32301

Liz Cloud, Chief

Bureau of Administrative Code 1802 Capitol Bldg.

Tallahassee, Florida 32301

Carroll Webb, Executive Director Administrative Procedures Committee

120 Holland Building Tallahassee, Florida 32301

Gary Rutledge, Secretary Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32301

Howard M. Rasmussen, Director Department of Business Regulation Division of Alcoholic Beverages and

Tobacco

725 South Bronough Street Tallahassee, Florida 32301

Docket for Case No: 84-002120RX

Orders for Case No: 84-002120RX