STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CORPORACION DE EXPORTACIONES ) MEXICANAS USA, INC., )

)

Petitioner, )

)

vs. ) CASE NOS. 93-5300

) 94-0057

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

TOBACCO, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in these consolidated cases on May 24 and 25, 1995, in Miami, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Marvin Feldman, President

Dr. Mark Feldman, Registered Agent Corporacion de Exportaciones

Mexicanas USA, Inc. 1/ 15529 Bull Run Road

Miami Lakes, Florida 33014

For Respondent: Thomas A. Klein, Chief Attorney

Miguel Oxamendi, Senior Attorney Department of Business and

Professional Regulation

Division of Alcoholic Beverages and Tobacco

Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-1007

STATEMENT OF THE ISSUES

Case No. 93-5300

Whether Petitioner's applications for brand/label and primary American source of supply registration should be disapproved for the reason given by Respondent in its June 30, 1993, letter to Petitioner?

Case No. 94-0057

Whether Petitioner's application for an alcoholic beverage license (KLD series) should be disapproved for the reason given by Respondent in its September 27, 1993, letter to Petitioner?

PRELIMINARY STATEMENT

By letter dated June 30, 1993, the Division of Alcoholic Beverages and Tobacco (hereinafter referred to as "DABT") advised Petitioner that a preliminary determination had been made to deny Petitioner's "4 applications for Individual Brand and Primary American Source Registrations for the fiscal year 1993-94 . . . . for the following products: Bacardi 'White Rum;' Bacardi 'Gold Rum;' Bacardi 'Dark Diluted Rum;' and Bacardi 'Diluted Rum.'" The letter contained the following explanation for DABT's proposed action:

565.095, Florida Statutes; 7A-4.056, Florida Administrative Code; The applicant, Corporacion De Exportaciones Mexicanas USA Inc. (Cemusa) nor any of its officers, directors or stockholders have been designated as the Primary American Source of Supply for any Bacardi Products by

the manufacturer or owner.

On or about July 23, 1993, Petitioner filed with DABT a written request for a formal administrative hearing on the proposed disapproval of its applications. The matter was referred to the Division of Administrative Hearings (hereinafter referred to as the "Division") on September 13, 1993, for the assignment of a Division hearing officer to conduct the formal hearing Petitioner had requested. The case was docketed as DOAH Case No. 93-5300.

By letter dated September 27, 1993, DABT notified Petitioner that a preliminary determination had been made to disapprove Petitioner's application for an alcoholic beverage license (KLD series). The letter contained the following explanation for DABT's proposed action:

561.18, Florida Statutes and 7A-5.010, Florida Administrative Code. Application incomplete as applicant has failed to provide proof of right of occupancy to the premise[s] sought to

be licensed. The Division is, therefore, unable to fully investigate the application in accordance with Florida law.

On or about October 3, 1993, Petitioner filed with DABT a written request for a formal administrative hearing on the proposed disapproval of its application. The matter was referred to the Division of Administrative Hearings on January 4, 1994, for the assignment of a Division hearing officer to conduct the formal hearing Petitioner had requested. The case was docketed as DOAH Case No. 94-0057.

On January 5, 1994, DABT, on behalf of itself and Petitioner, requested in writing that DOAH Case Nos. 93-5300 and 94-0057 be consolidated. On January 7, 1994, DABT, again on behalf of both parties, filed a motion requesting that the final hearing previously scheduled in DOAH Case No. 93-5300 be continued and that DOAH Case Nos. 93-5300 and 94-0057 be held in abeyance pending the outcome of a lawsuit that Petitioner had filed in the United States District Court for

the Southern District of Florida in which it, among other things, challenged the constitutionality of Section 565.095, Florida Statutes. By order issued January 12, 1995, the Hearing Officer granted the motion to consolidate and the motion to continue and abate.

On October 20, 1994, pursuant to Petitioner's request, the abeyance previously in effect was vacated and the final hearing in DOAH Case Nos. 93-5300 and 94-0057 was set for March 30 and 31, 1995. On January 17, 1995, Petitioner filed a Motion to Reschedule Hearing Date[s] in these consolidated cases. The motion was granted by order issued January 24, 1995.

At the formal hearing, which was held on May 24 and 25, 1994, a total of nine witnesses testified: Edward Pfitzenmaier, a DABT special agent; Thomas Wheeler, currently the acting chief of DABT's Southern Region and formerly the chief of DABT's Miami District Office; Carlos Arnoldson, the audit group supervisor in DABT's Miami District Office; Caridad Beckerman, a professional regulation supervisor in DABT's Miami District Office; Marvin Feldman, Petitioner's president and its sole shareholder; Enrique Martinez, the owner of a bonded warehouse located at 6998 Northwest 25th Street in Miami, Florida; Steven Naclerio, the president of Bacardi Service North America, Inc.; Barry Schoenfeld, the former chief of DABT's Bureau of Licensing and Records; and Mark Feldman, Petitioner's registered agent in Florida. In addition, the following exhibits were offered and received into evidence at hearing: Petitioner's Exhibits 1 through 36, 38 through 55, 57, 58, 61, 63 through 66,

68, 70 through 72, 75, 83 through 93, 96 through 101, 104 through 113, 115

through 121, 123, 124, 126, 128, 129, 132, 133, 500 through 506, 508, 509 and

514; and Respondent's Exhibits 1 through 35. Petitioner's exhibits included a copy of the transcript of a deposition of Richard Scully, DABT's former Director, which was offered and received into evidence (as Petitioner's Exhibit

502) in lieu of Scully's live testimony at hearing.

At the close of the evidentiary portion of the hearing on May 25, 1995, the Hearing Officer advised the parties of their right to file post-hearing submittals and he established a filing deadline for these submittals. DABT filed its post-hearing submittal on July 7, 1995. On July 24, 1995, Petitioner filed an unopposed motion requesting that it be given until August 21, 1995, to file its post-hearing submittal. The motion was granted by order issued July 28, 1995. Petitioner filed its post-hearing submittal on August 11, 1995. Ten days later, on August 21, 1995, it filed a "corrected" post-hearing submittal.

The parties' post-hearing submittals have been carefully considered by the Hearing Officer. Each contain, what are labelled as, "findings of fact." These "findings of fact" are specifically addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made:

1. Marvin Feldman (hereinafter referred to as "Marvin") has lived in Mexico for the past 25 years.

   
   

2. Since 1982, he has been in the import/export business.

3. Marvin is the sole shareholder, president, secretary and treasurer of both Petitioner and Corporacion de Exportaciones Mexicanas, S.A. (hereinafter referred to as "CEMSA").

   
   

4. Petitioner is a United States corporation.

   
   

5. CEMSA is a Mexican corporation.

   
   

6. Marvin's twin brother, Dr. Mark Feldman (hereinafter referred to as Dr. Feldman), is Petitioner's registered agent in the State of Florida.

   
   

7. On or about May 5, 1992, Marvin, on behalf of Petitioner, filed with DABT a Petition for Declaratory Statement, in which he stated the following:

   
   

   1. Petitioner desires to become an importer of alcoholic beverages in Florida.

   2. Petitioner desires to pay all applicable state and federal taxes on alcoholic beverages imported within the State of Florida.

   3. Petitioner desires to sell said imported alcoholic beverages on the wholesale level within the State of Florida.

   4. Petitioner desires to import and sell "Ba[]cardi" rum as described in letter from U.S. Customs dated Aug. 14, 1991.

   5. Petitioner requests a declaratory statement from the Department . . . as to whether he will be allowed to import, pay taxes and sell "Ba[]cardi" rum within the State of Florida.

   6. Petitioner respectfully requests that the Department . . . review anti-trust laws and specifically the 1988 Supreme Court decision [i]n the affirmative for K-Mart 47th St. Photo before rendering the declaratory statement.

      
      

8. On or about July 22, 1992, Marvin filed a supplement to his previously filed Petition for Declaratory Statement, in which he stated the following:

   
   

   Refer[r]ing to 564.045 [sic], there is no primary American source of supply for Mexican manufactured Ba[]cardi rum. We, Marvin and Mark Feldman, are intent on becoming that legal entity within the State of Florida. We, as the importer-distributor within the State of Florida would be the closest American source of supply from which this product/ item could be secured.

   
   

   We evidence three (3) examples to support the fact that this product/item of universal quality, manufactured by a legally distinct entity, is legally distinct.

   
   

   1. Label: . . . .

      
      

   2. Specific Reference, Letter, U.S. Customs,

      14.8.91 . . . .

   3. Specific Reference, Letter from Ba[]cardi and Company Limited, 6.25.91 . . . .

      
      

      Thus, understanding that this legally distinct product/item is manufactured in a legally distinct place, Mexico, and commercially distinguished and labeled; our partnership becomes the primary American Source for the distribution of this legally distinguished product: Mexican Ba[]cardi rum.

      
      

      In the unlikely event that Florida law would be concerned with the Mexican distribution process, we would like to non[e]the[]less inform you that we purchase this legally distinct product/item from a wide variety of Mexican suppliers such as Mexican wholesalers, Mexican price clubs, volume

      distributors[, a]ll within the territory of Mexico. When we export, the Mexican government returns all corresponding taxes to us, thus allowing for competitive pricing within the Florida market.

      
      

9. Appended to the supplement were the label and the two letters that Marvin referred to in the supplement.

   
   

10. The first of these two letters, the August 14, 1991, letter from the United States Customs Service, was addressed to Marvin and read as follows:

    
    

    This is in response to your letter dated July 29, 1991, requesting information concerning the importation of gray market products from Mexico.

    
    

    Title 19 U.S.C. 1526(a) provides that it is unlawful to import merchandise of foreign manufacturers bearing an American-owned trademark that is registered with the U.S. Patent and Trademark Office ("PTO") and recorded with Customs unless written consent of the trademark owner is

    produced at the time of entry. Articles that arrive in the U.S. bearing restricted "genuine" trademarks, owned and recorded by a citizen of the United States or a corporation or association created or organized within the United States, as explained in 19 C.F.R. 133.21(b), are subject to seizure and forfeiture under 19 U.S.C. 1526(b).

    
    

    Your company wishes to import from Mexico, without the consent of the trademark owner, merchandise bearing the genuine "Bacardi" trademark. The trademark is recorded with Customs. The trademark owner, Bacardi and Company Ltd., is a corporation organized under the laws of the Principality of Liechtenstein. The "Bacardi" trademark is entitled to protection against the importation of merchandise bearing confusingly similar or counterfeit marks (19

    C.F.R. 133.21(a) and (b)). However, because Bacardi and Company Ltd. is not a corporation created or

    organized under the laws of the United States, the "Bacardi" trademark is not entitled to Customs protection against the importation of merchandise bearing the genuine trademark (gray market).

    
    

    Therefore, the importation of genuine Bacardi merchandise will not be restricted.

    
    

11. The June 25, 1991, letter from Bacardi and Company Limited, which was also appended to the supplement to the Petition for Declaratory Statement was signed by Manuel Cutillas, the president of the company, 2/ and read as follows:

    
    

    As you speak perfect English, I am taking the liberty of writing to you in that language.

    
    

    First of all, I must thank you for your visit together with Messrs. Gamez and Favel and for your letter of June 17.

    
    

    I am also very pleased that I had the opportunity to explain to you our position regarding the unofficial exports of our rum from Mexico. Even though the exports are done within the framework of the law and international commerce, we cannot be happy with it, as it disrupts our normal marketing and sales activities in the countries where the product is finally sold. As I expressed to you, our distributors in those countries have invested heavily in the market creating demand for our products. This investment is not only in the form of advertising and promotional activities, but also reflected in the distributors' sales and administrative facilities and organization.

    Therefore, every case of our product that is sold from outside their organization impacts very negatively on them in both profits and discipline. Again, I think it is our duty as a responsible brand owner to protect our distributors around

    the world.

    
    

    I wish to take this opportunity to express to you my thanks for your having come to Nassau and for the frank exchange of viewpoints your visit afforded us. Please give Messrs. Gamez and Favela my best regards.

    
    

12. On October 2, 1992, in response to Marvin's petition, DABT issued a Declaratory Statement in which it "declare[d] that, based upon and limited to [Petitioner's] representations that it is the closest source of Mexican Bacardi Rum, [Petitioner] qualifies as a primary American source under Section 565.095, Florida Statutes." The Declaratory Statement was signed by then DABT Director Richard Scully.

13. On or about November 11, 1992, Steven Naclerio, in his capacity as senior vice president and general counsel of Bacardi Imports, Inc., wrote the following letter to Scully:

    
    

    Bacardi Imports, Inc. is the Primary American Source of Supply for Bacardi rum in the United States. As you may know, we have registered the BACARDI brand and labels with the Division of Alcoholic Beverages and Tobacco for as long as these requirements have been in place.

    
    

    Yesterday, we attempted, without success, to communicate with Nancy C. Waller regarding a Declaratory Statement made October 1 [sic], 1992, which came to us from sources outside of Florida regarding this product.

    
    

    That Declaratory Statement signed by you (1) states that Mexican Bacardi rum is a distinct product, when, in fact, it is made according to the same standards and secret formulation of the trademark owner which are uniform throughout the

    world, and (2) does not mention that the petitioner has established that he is the "exclusive agent"

    of the manufacturer, owner or bottler as required by Section 565.095(1) of Florida Statutes. Neither Marvin Feldman nor [Petitioner] have been appointed by Bacardi y Cia S.A. de C.V. or any other Bacardi entity to import rum into the United States.

    
    

    As can be seen from a document attached to our copy of the Declaratory Statement, Bacardi rum in Mexico is bottled in standards of fill which do not comply with U.S. standards of fill regulations.

    
    

    We respectfully request an opportunity to meet with you to discuss this matter. Please call me at your earliest convenience.

    
    

14. On November 24, 1992, Francisco Gil, the president of Seven Seas Brokers, Inc., issued the following written announcement concerning its newly- established relationship with Petitioner:

    
    

    "To Whom It May Concern"

    
    

    By this letter we proudly announce [to] you that

    Seven Seas Brokers, Inc., is the Customs Broker[] for:

    
    

    Corporacion De Exportaciones Mexicanas, U.S.A. Inc.

    
    

    and we will be handling all the paperwork for entry purposes, as well as warehouse entries, etc.

    
    

    The bonded merchandise (liquors) will be storaged at: Impex Bonded Warehouse Inc., 6941 N.W. 42nd St. Miami, FL. 33166 and at: World Terminal Distributing Corp.,

    6998 N.W. 25th St. Miami, FL. 33122, after all customs and A.T.F. documents have been processed, accepted and cleared.

    
    

    If you need any further information, please do not hesitate to contact us.

    
    

15. On or about December 23, 1992, Naclerio, on behalf of Bacardi Imports, Inc., filed with DABT a Petition for Declaratory Statement, in which he stated the following:

    
    

    We, Bacardi Imports, Inc. located at 2100 Biscayne Boulevard, Miami, Florida 33137, petition the Department of Business Regulation for a Declaratory Statement finding that Bacardi Imports, Inc. is the "primary American source of supply" as defined by Section 565.095 of the Florida Statutes for all BACARDI rum imported into Florida. The following facts support this petition:

    1. All BACARDI rum is made according to the same standards and secret formulation of the trademark owner which are uniform throughout the world.

    2. In a Declaratory Statement issued by the Department, Case No. 91L-0240, a petitioner by the name of Marvin Feldman, [Petitioner], asserts that he and/or [Petitioner] is the "exclusive agent" of the manufacturer, owner or bottler as required by Section 565.095(1) of the Florida

       Statutes. Neither Marvin Feldman nor [Petitioner] have been appointed by Bacardi y Cia, S.A. de C.V. or any other Bacardi entity as their agent to import BACARDI rum into the United States or for any other purpose whatsoever. A letter from Bacardi y Cia,

       S.A. de C.V. will be forwarded under separate cover attesting to this fact.

    3. For as long as Section 565.095 of the Florida Statutes, or any other statute or regulation designating "primary American source of supply"

    has been in effect in the state of Florida, Bacardi Imports, Inc. has been registered as such primary American source of supply. (See attached copy of letter from brand owner.)

    
    

    We respectfully request the Department issue a declaratory statement declaring that Bacardi Imports, Inc. remains the primary American source of supply for all BACARDI rum imported into Florida and to set aside or declare invalid its Declaratory Statement dated October 1 [sic], 1992, regarding [Petitioner's] petition, case No. 91L-0240

    
    

    If you have any questions or need further information, please contact me and we will supplement this petition. Thank you.

16. On or about December 30, 1992, DABT sent Naclerio a letter advising him that his Petition for Declaratory Statement had been forwarded to the agency's General Counsel with instructions to "prepare a response to [the] petition." Deputy DABT Director John Harris, who was second in command at DABT at the time, prepared and signed the letter for DABT Director Scully.

    
    

17. The letter from Bacardi y Cia S.A. de C.V. that Naclerio had promised in numbered paragraph 2. of his Petition for Declaratory Statement was filed with DABT on or about January 14, 1993. The letter was signed by the executive vice president of Bacardi y Cia S.A. de C.V. and read as follows:

    
    

    We Bacardi y Compania S.A. de C.V., located at autopista Mexico-Queretaro Num 4431, Tultitlan Estado de Mexico, Mexico, declare that we have not appointed Mr[.] Martin [sic] Feldman or [Petitioner] as our agent to import Bacardi Rum or any of the products we manufacture into the United States or for any purpose whatsoever.

    
    

    If you have any questions or need any further information, please contact me and we will supplement this petition. Thank you.

    
    

18. On January 13, 1993, Petitioner received an original Basic Permit (Number FL-I-1224) from the federal Bureau of Alcohol, Tobacco and Firearms authorizing it to engage in "[i]mporting into the United States the following alcoholic beverages: DISTILLED SPIRITS and while so engaged, to sell, offer to deliver for sale, contract to sell or ship, in interstate or foreign commerce, the alcoholic beverages so imported."

    
    

19. On or about February 1, 1993, DABT sent the following Notice of Petition for Declaratory Statement to Liz Cloud, Chief of the Department of State's Bureau of Administrative Code, for publication "in the next edition of the Florida Administrative Weekly:"

    
    

    NOTICE IS HEREBY GIVEN, pursuant to section 120.565, Florida Statutes, that the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, has received a Petition

    [for] Declaratory Statement from Steven Naclerio, Ba[]cardi Imports, Inc., 2100 Biscayne Boulevard, Miami, Florida 33137. The Petitioner requests the Department to issue a declaratory statement

    on the following issue: Whether Ba[]cardi Imports, Inc., is the "primary American source of supply"

    as defined by Section 565.095, Florida Statutes for all Ba[]cardi Rum imported into Florida.

    
    

    A copy of the Petition may be obtained by writing Rebecca Hollingsworth, Clerk, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, 725 South Bronough Street, Tallahassee, FL 32399-1020. Pursuant to rules

    28-5.111 and 7-3.001, Florida Administrative Code, and section 120.57, Florida Statutes, all persons who have a substantial interest in this proceeding may petition the Department for a hearing within 21

    days of the date of this publication. All requests for hearing should be directed to Rebecca Hollings- worth at the address listed above.

    
    

20. On March 19, 1993, DABT issued a Declaratory Statement in which it "declare[d] that, based upon and limited to Bacardi Imports' representations, as set forth in [its] petition . . . , that Bacardi Imports is the source closest to the manufacturer, that is, the primary American source for all Bacardi rum products under Section 565.095, Florida Statutes." The Declaratory Statement was signed by DABT Director Scully.

    
    

21. On March 23, 1993, Petitioner received certificates of label approval from the federal Bureau of Alcohol, Tobacco and Firearms for the labels it intended to use on the bottles of Bacardi "Gold Rum" and "White Rum" it planned to import into the United States. Approximately three weeks later, it received certificates of label approval for the labels it intended to use on the bottles of Bacardi "Diluted Rum" and "Dark Diluted Rum" it planned to import into the United States. Each of the approved labels reflected that the product in question was made in Mexico by Bacardi y Cia S.A. de C.V. and was imported by Petitioner.

    
    

22. On or about April 11, 1993, Petitioner imported into Florida from Mexico 143 cases of Mexican-made Bacardi rum (bearing the aforementioned federally-approved labels, which partially covered the original labels affixed by Bacardi y Cia S.A. de C.V.). Petitioner had obtained the rum from CEMSA, which had purchased it from various retailers and distributors in Mexico not connected with the Bacardi family of companies. The product was stored at World Terminal Distributing Company's bonded warehouse at 6998 N.W. 25th Street in Miami, Florida.

    
    

23. On or about April 29, 1993, Petitioner submitted to DABT's Miami District Office 3/ an application (hereinafter referred to as the "KLD application") for an alcoholic beverage license (KLD series). 4/ Petitioner appropriately used DBR Form 42-001 (Rev. 2/91) to make its application for licensure. On the form, Petitioner indicated that the location of the business for which the license was sought was "5453 N.W. 72nd Avenue, Miami, Fl 33166" and that it had "a legal right of occupancy to the premises" by virtue of "1 year $250/monthly" rental agreement it had with Seven Seas Brokers, Inc. This location complied "with zoning requirements for the sale of alcoholic beverages," according to that portion of the application form that, in accordance with the instructions on the form, Petitioner had the "Local Zoning Authority" complete. A sketch of the premises was included in Petitioner's application.

    
    

24. On the same day that it submitted its KLD application, Petitioner was granted a temporary KLD license (Number 23-12212) subject to the following terms:

    
    

    THIS LICENSE/PERMIT IS FOR A SINGLE PLACE OF BUSINESS INDICATED HEREON, NOT TRANSFERABLE

    AND expires on 7/26/93 or expires 14 days after approval of the permanent application; the date the permanent license is issued; or the date the application is disapproved, whichever occurs first.

    
    

    The "single place of business" indicated on the temporary license was 5453 N.W. 72nd Avenue, Miami Florida 33166.

25. On or about May 3, 1993, Petitioner submitted applications (hereinafter referred to as the "applications for registration") for "Individual Brand/Label Registration for Fiscal Year 1993 to 1994" and "Primary American Source" registration for Bacardi "White Rum," Bacardi "Gold Rum," Bacardi "Dark Diluted Rum," and Bacardi 5/ "Diluted Rum." 6/ Appended to Petitioner's applications for registration were: the labels the federal Bureau of Alcohol, Tobacco and Firearms had previously approved for these products pursuant to Petitioner's request; the certificates evidencing such approval; the Basic Permit (Number FL-I-1224) Petitioner had received from the federal Bureau of Alcohol, Tobacco and Firearms; and the Declaratory Statement Petitioner had received from DABT on October 2, 1992.

    
    

26. Bacardi y Cia S.A. de C.V. is the manufacturer, rectifier, and bottler of the Bacardi rum products referenced in Petitioner's applications for registration. It is also the owner of these spirituous liquors at the time they become marketable products. Neither Bacardi y Cia S.A. de C.V. nor any other Bacardi company has designated Petitioner to be the primary American source of supply of these products or to otherwise act as its agent in their distribution and sale in the United States.

    
    

27. On May 6, 1993, Naclerio, in his capacity as Bacardi Imports, Inc.'s General Counsel, sent a letter to DABT Director Scully, which read as follows:

    
    

    It has come to our attention that a distributor named Corporacion de Exportaciones Mexicanas U.S.A., Inc. has been attempting to sell BACARDI rum produced in Mexico to retailers in the state of Florida.

    
    

    We are also aware that the above referenced distributor has not registered this brand or registered as its primary American source of supply, as required by Florida statutes.

    
    

    We are the primary American source of supply for BACARDI rum in Florida and have been registered for as long as the registration requirements have

    been in effect. A declaratory statement was issued by your office on March 19, 1993 confirming that BACARDI Imports, Inc. is the primary American source of supply for all BACARDI rum imported into Florida.

    
    

    We do not agree that any other corporation has the legal right to register this brand or qualify as its primary American source of supply. Kindly let us know if the Department ever comes to a different conclusion in advance of its final action.

    
    

28. Later that same day, Deputy DABT Director Harris telephoned Thomas Wheeler, who was in charge of DABT's Miami District Office at the time. Harris directed Wheeler to provide Petitioner with written notice that it was in violation of the requirements of Section 565.095, Florida Statutes.

29. Such a written notice was prepared and given to Special Agent Edward Pfitzenmaier to deliver to Petitioner at the 72nd Avenue address listed in Petitioner's KLD application as its business location. Pfitzenmaier had already been asked to visit the location to verify the information contained in the KLD application concerning the premises.

    
    

30. Upon Pfitzenmaier's arrival at the 72nd Avenue address on May 6, 1993, he met Francisco Gil, who identified himself as the landlord and the owner of Seven Seas Brokers, Inc. Pfitzenmaier told Gil that he wanted to speak with Marvin. Gil responded that Marvin was not at the location. He further informed Pfitzenmaier that "all [Marvin] has here is a desk." In addition, in a signed, written statement that he gave Pfitzenmaier, Gil asserted that Petitioner did not occupy any space on the premises for the purpose of engaging in any business activity connected with the sale or shipment of alcoholic beverages.

    
    

31. After meeting with Gil, Pfitzenmaier proceeded to 15529 Bull Run Road, Miami Lakes, Florida, which Petitioner had identified in its KLD application as its mailing address. There, he met with the Feldmans and handed them the notice of violation he had been instructed to deliver. The notice contained the following advisements:

    
    

    1. As per FSS 565.095(2), no person, firm corporation, or other entity, may sell, offer for sale, accept orders for sale, ship or cause to be shipped into this State, any spirituous liquors to any Distributor within the State without having first registered as a primary American source of supply on forms provided by the Division.

    2. As per FSS 565.095(3), no holder of a Distributor license as classified by FSS 561.14(2) may ship or cause to be shipped into this State, or accept delivery of from another state or a foreign country, any spirituous liquors except directly from a primary source o[f] supply, registered as such as required herein for the brands of spirituous liquors being shipped.

    
    

32. The following day, May 7, 1993, Pfitzenmaier met the Feldmans at the Miami District Office and then went with them to the bonded warehouse at 6998

    N.W. 25th Street in Miami, Florida (hereinafter referred to as the "25th Street warehouse"), where Petitioner was storing the 143 cases of Mexican-made Bacardi rum it had imported into Florida on April 11. Pursuant to an oral agreement with the owner of the 25th Street warehouse, Petitioner had, and it continues to have, the right to occupy space in the 25th Street warehouse for the purpose of storing alcoholic beverages.

    
    

33. In accordance with the instructions he had received from Wheeler, Pfitzenmaier constructively seized the 143 cases of Mexican-made Bacardi rum Petitioner was storing in the warehouse.

34. On or about May 7, 1993, DABT's Miami District Office sent Petitioner a Notice of Intent to Disapprove its KLD application. The notice read as follows:

    
    

    The purpose of this letter is to notify you of our intent to recommend disapproval of your application for an alcoholic beverage license.

    We are giving you 10 days in which to correct any deficiencies and or supply additional documentation as indicated below.

    
    

    The response must be received or postmarked no later than 10 days from the date of this letter. Any documents submitted after this period will be returned.

    
    

    Review and investigation of the application or premises indicate the application is deficient and should be disapproved as indicated below.

    
    

    It has been brought to our attention that you do not have right of occup[]ancy [of] your business address listed on your application. Please provide this office with proof that you do have right of

    occupancy 7/ within the time allowed in this letter.

    
    

    If you have any questions, please do not hesitate to contact this office and speak to Carie Beckerman at 305-470-6787.

    
    

    DABT Director Scully's and Wheeler's names appeared at the bottom of the notice.

    
    

35. On or about the same day, May 7, 1993, Barry Schoenfeld, the then Chief of DABT's Bureau of Licensing and Records, sent Petitioner the following written correspondence concerning its applications for registration:

    
    

    I have this date received your applications for registration of brands, and registration as the "primary American source of supply" for those brands as follows:

    
    

    BARCARDI "WHITE RUM" BARCARDI "GOLD RUM" BARCARDI "DARK DILUTED RUM" BARCARDI "DILUTED RUM"

    
    

    The named applicant is Corporacion de Exportaciones Mexicanas USA, Inc. I am requesting that you provide this office with the following information in order for these applications to be complete for review. Please provide documentation, pursuant to Rule 7A-4.056, Florida Administrative Code, that the applicant has been designated as the primary American source of supply by the manufacturer or owner of the spirituous liquor at the time the same became a marketable product.

    With regard to brands registration, our files indicate that Bacardi Rum is a currently registered brand. [The labels attached to your applications name Bacardi, but the application forms spell it differently, Barcardi - - please clarify] Based upon the labels provided, it appears that the brands sought to be registered would be duplicative of currently existing products. Please provide information which establishes that these products are distinct.

    
    

    We will be prepared to review the applications upon receipt of the requested information, and will be available to provide any assistance or information you may require. Please reference Chapter 565, Florida Statutes and Chapter 7A, Florida Administrative Code for governing provisions regarding these registrations.

    
    

    Please understand that this request for additional information is being made after only a cursory review of these applications. At your request,

    we have expedited this initial review and response. We will continue to process the applications as expeditiously as possible, but would reserve the right to make additional reasonable requests for supplemental information if necessary.

    
    

    Thank you for your applications.

    
    

36. Marvin responded by sending the following letter, written on CEMSA stationary, to Schoenfeld on or about May 8, 1993:

    
    

    We are replying through the fax of Mr. Donald Conn, Chief Counsel, because we do not have yours.. In answer[] to your fax of 7.5.93, I will, under oath, declare:

    
    

    We are the pri[m]ary American source of supply for Bacardi rum made in Mexico. We have been designated so by the Declaratory Statement which you have. My company, as this letterhead indicates, buys the Bacardi legally in Mexico and ships to my company in Miami. Documentation to this effect, well founded, was provided to Mr. Conn as basis in part for his ruling. Additional internal Bacardi document was provided to him last week. Please refer to your file.

    
    

    We have provided to Mr. Conn documentation establishing the distinct and separate entity and corporate structure as distinct and therefore qualifies us as

    the primary American [s]ource for Mexican Bacardi. As an example, we would intend to import a 76 proof Bacardi which is not, I think, available in the USA. This is but a single example.

    We have had our KLD license for 7 days, and as a result have committed substan[t]ial sums of money in efforts to begin our operations.

    
    

    As a result of the "constructive seizure" we have been caused irr[ep]arable harm. Please exp[e]dite the resolution of this situation no later than Tuesday the 11th.

    
    

37. On May 11, 1993, Marvin went to Tallahassee to meet in person with DABT representatives.

    
    

38. Before the meeting began, he visited DABT Director Scully's Tallahassee office and handed Scully's clerk, Rebecca Hollingsworth, a letter he had written to Scully in response to the May 7, 1993, Notice of Intent to Disapprove Petitioner's KLD application. The letter (hereinafter referred to as "Marvin's May 11, 1993, letter"), which Hollingsworth accepted and subsequently gave DABT Director Scully, read as follows:

    
    

    Since I have an appointment this afternoon with Mr. Donald Conn and Mr. L.B. Schoenfeld, I am personally delivering this response to your letter of May 7.

    
    

    Yes, there is an error in our address where our Mexican rum is stored and we thank you for bringing it to our attention. I hope the information herein clears the problem.

    
    

    ADDRESS OF CORPORATION:

    15529 Bull Run Road Miami Lakes, Fla. 33014 Marvin Feldman

    (305) 557-8600

    ADDRESS OF BROKER: 5453 N.W. 72ND AVE.

    Miami, Fla. 33166-1109 Francisco Gil

    (305) 883-5644

    ADDRESS OF BONDED WAREHOUSE:

    WTDC Bonded Whse. 6998 N.W. 25th St.

    Miami, Fla. 33166

    
    

    I am enclosing a copy of our Dade County occupancy license which also has the error in the address and which as I write is being corrected. These corrections are being made immediately today by

    my C.P.A. Evelyn Prado, 7601 West Flagler, Suite 204, Miami, Fla. 33144-2453, (305) 267-6625,

    264-3378, 267-9097 fax.

    Please consider that we are beginning, 13 days in business. The required "paper-trail["] for proper tax payment will be met.

    
    

    Marvin's May 11, 1993, letter, was never transmitted to the DABT'S Miami District Office.

    
    

39. The afternoon of May 11, 1993, Marvin met for approximately two hours with Schoenfeld and John Gilroy, a member of DABT's legal staff. During the meeting, Marvin attempted to persuade Schoenfeld and Gilroy that Petitioner was the primary American source of supply of Mexican-made Bacardi rum under Section 565.095, Florida Statutes, as DABT had earlier held in the October 2, 1992, Declaratory Statement it had issued at Petitioner's request.

    
    

40. On or about May 13, 1993, Marvin sent DABT Director Scully another letter concerning the proposed disapproval of Petitioner's KLD application. The letter read as follows:

    
    

    We are enclosing a copy of the "Permanent Certificate of Use and Occupancy" which we received this morning with the change of address correction.

    
    

    Please ask those who advise you to be certain, before you sign letters. The enclosed notice from the Metro-Dade Finance Department[], informs that since 1972 an occupational license [has not been] issued for beer, wine and liquor.

    
    

    We went to considerable expense and effort. It would seem that in 20 years all in the licensing department [you] would know by now. Again, we will cooperate and furnish all data required and requested. Therefore, re[s]c[i]nd your "Notice of Intent to Disapprove."

    
    

    The "Permanent Certificate of Use and Occupancy" that accompanied Marvin's letter was issued by Metropolitan Dade County's Building and Zoning Department and it reflected that Petitioner's "business address" was 6998 N.W. 25th Street and that Petitioner operated at said location as a "wholesale distributor" of imported alcoholic beverages.

    
    

41. On or about May 19, 1993, Marvin wrote the following letter to DABT's legal staff explaining why, in his opinion, Petitioner was, under Section 565.095, Florida Statutes, the primary American source of supply of Mexican-made Bacardi rum:

    
    

    Nice to talk with you today. Forthwith:

    
    

    "Primary American source of supply means the owner of spirituous liquors at the time same become[s] a marketable product, who, is the source closest to the manufacturer in the channel of commerce from whom the product can be secured by an American distributor."

    
    

    We are it.

    Florida law cannot extend itself outside the United States of America. As we discussed,

    Jack Daniels is within the context of the intent of 565.095 because, in my view, the 21st Amendment gave the states the right to the paper trail for proper tax collection purposes. CEMSA USA [Petitioner] is the source closest to the manufacturer in the channel of commerce because CEMSA Mexico is the exporter and CEMSA USA is the importer distributor.

    
    

    For the explicit purpose of discussion, as Don would say, "I'm gonna talk lawyer talk[.]" The intent of the law, in my view, is that the channel

    of commerce can only refer to the shores of the USA. Mexico is a sover[eign] nation to which the laws of the State of Florida cannot extend.

    
    

    Non[e]the[]less, as further evidence of, we are enclosing documentation reflecting the return of taxes from the Mexican government when alcoholic beverages and tobaccos are exported. That is what makes my business a reality and is what makes the cost of the Bacardi lower to me than to any dis- tributor or club from whom I purchase, before, during, or after such exports are made and taxes are returned.

    
    

    Am in Mexico as you read this. If needed, will return again to Tallahassee.

    
    

42. By letter dated June 30, 1993, DABT advised Marvin that it had "disapproved" Petitioner's applications for registration. The letter read as follows:

    
    

    This letter is in reference to your 4 applications for Individual Brand and Primary American Source Registrations for the fiscal year 1993-94. The registrations are for the following products:

    
    

    Bacardi "White Rum" Bacardi "Gold Rum"

    Bacardi "Dark Diluted Rum" Bacardi "Diluted Rum."

    
    

    This is to notify you that your registrations have been disapproved. The reason(s) for the disapproval are as follows:

    
    

    565.095, Florida Statutes; 7A-4.056, Florida Administrative Code; The applicant, Corporacion De Exportaciones Mexicanas USA Inc. (Cemusa) nor

    any of its officers, directors or stockholders have been designated as the Primary American Source of Supply for any Bacardi Products by the manufacturer or owner.

    As a disapproved applicant you are entitled to a hearing pursuant to 120.57, Florida Statutes, Florida Administrative Procedure Act, provided you file a written request for an administrative review of this decision within twenty-one (21) days of the date of this letter. If you desire such a hearing, you must direct your written request to: The Department of Business Regulation, Director of the Division of Alcoholic Beverages and Tobacco, 725 South Bronough Street, The Johns Building, Tallahassee, Florida 32399-1021.

    
    

    This notification of your right to an administrative hearing reviewing our decision is pursuant to 120.60(2) Florida Statutes.

    
    

    Enclosed you will find refund forms for monies received for your 1993-94 registrations. Please sign the forms where indicated and return them to this office so we may process a refund for you.

    
    

43. By letter dated September 27, 1993, DABT advised Petitioner that Petitioner's KLD application had also been "disapproved." The letter read as follows:

    
    

    This letter is to notify you the Division of Alcoholic Beverages and Tobacco has disapproved your application for a license as referenced above. The reason(s) for the disapproval are outlined on the attached sheet.

    
    

    As a disapproved applicant you are entitled to a hearing pursuant to 120.57, Florida Statutes, Florida Administrative Procedure Act, provided you file a written request for an administrative review of this decision within twenty-one (21) days of the date of this letter. If you desire such a hearing, you must direct your written request to: The Department of Business Regulation, Director of the Division of Alcoholic Beverages and Tobacco, 725 South Bronough Street, The Johns Building, Tallahassee, Florida 32399-1021.

    
    

    Also, if you were issued a temporary license pursuant to 561.181 or 561.331, Florida Statutes, you are hereby advised that this license has expired as of this date, based on the disapproval of the application. The temporary license may not be continued or extended beyond this date. This is

    by authority of the applicable issuing Statute just referenced. A representative of our agency will contact you about taking possession of any temporary license issued.

    
    

    All copies of the application are being retained

    by the Division of Alcoholic Beverages and Tobacco.

    This notification of your right to an administrative hearing reviewing our decision is pursuant to 120.60(2), Florida Statutes.

    
    

    The "attached sheet" referenced in the letter indicated that Petitioner's KLD application had been "disapproved" for the following reason:

    
    

    561.18, Florida Statutes and 7A-5.010, Florida Administrative Code. Application incomplete as applicant has failed to provide proof of right of occupancy to the premise[s] sought to be licensed. The Division is, therefore, unable to fully investigate the application in accordance with Florida law.

    
    

    CONCLUSIONS OF LAW

    
    

44. DABT is the state agency vested with the authority to administer and enforce the provisions of Florida's Beverage Law, which are found in Chapters

    561 though 568, Florida Statutes.

    
    

45. Such authority includes the power to approve or disapprove applications for required licenses and registrations.

    
    

46. "Any person, before engaging in the business of manufacturing, bottling, distributing, selling, or in any way dealing in alcoholic beverages, [must] file, with the district supervisor of the district of [DABT] in which the place of business for which a license is sought is located, a sworn application in duplicate on forms provided to the district supervisor by [DABT]." Section 561.17(1), Fla. Stat. (Pursuant to Section 561.08, Florida Statutes, DABT is authorized to "prescribe forms . . . to be used under and in the execution and enforcement of the provisions of the Beverage Law," such as application forms to be used by applicants for alcoholic beverage licenses.)

    
    

47. "When any person has filed a properly completed application which does not on its face disclose any reason for denying an alcoholic beverage license, [DABT must] issue to such person a temporary initial license of the same type and series for which the application has been submitted." Section 561.181(1)(a), Fla. Stat.

    
    

48. "The temporary initial license [is] good for a period up to 90 days as specified by DABT, which period may be extended in the discretion of DABT for up to an additional 90 days upon a finding by [DABT] that such extended period is necessary to complete the license investigation process. [DABT has] until the end of any such 90-day period . . . to grant or deny the license being applied for." Section 561.181(2), Fla. Stat.

    
    

49. "A temporary initial license . . . expire[s] and shall not be continued or extended beyond the date [DABT] denies the application for license, beyond 14 days after [DABT] approves the application for license, beyond the date the applicant pays the license fee for and [DABT] issues the license applied for, or beyond the date the temporary initial license otherwise expires by law, whichever occurs first." Section 561.181(3), Fla. Stat.

50. "After the application has been filed with the local district office supervisor, the district supervisor [must] cause the application to be fully investigated, both as to qualifications of the applicants and a manager or person to be in charge and the premises and location sought to be licensed." Section 561.18, Fla. Stat. (Pursuant to Section 562.06, Florida Statutes, "[e]ach license application [must] describe the location of the place of business where [the alcoholic] beverage[s] may be sold." Furthermore, Section 561.01(11), Florida Statutes, requires that a "sketch" of the premises sought to be licensed appear on, or be attached to, the license application.)

    
    

51. "Upon completion of the investigation of an application, [DABT must] approve or disapprove the application." Section 561.19(1), Fla. Stat.

    
    

52. DABT also registers those who qualify as "primary American sources of supply" under Section 565.095, Florida Statutes, as well as the brands (and labels) of the spirituous liquors they supply.

    
    

53. Section 565.095, Florida Statutes, provides as follows:

    
    

    1. DEFINITION.- "Primary American source of supply" means the manufacturer, rectifier, or owner of spirituous liquors at the time same become a marketable product, or bottler, or the exclusive agent of any such person, who, if the product cannot be secured directly from the manufacturer by an American distributor, is the

       source closest to the manufacturer in the channel of commerce from whom the product can be secured by an American distributor, or who, if the product can be secured directly from the manufacturer by an American distributor, is the manufacturer.

    2. TAX CONTROL REGISTRATION REQUIRED.- For purpose of tax revenue control, beginning January 1, 1979, no person, firm, corporation, or other entity which is the primary American source of supply as defined herein may sell, offer for sale, accept orders for sale, ship, or cause to be shipped into this state any spirituous liquors to any distributor within this state without having first registered as a primary American source of supply on forms provided by, and in such manner

       as prescribed by, [DABT].

    3. CERTAIN INTERSTATE AND FOREIGN SHIPMENTS PROHIBITED.- Beginning January 1, 1979, no holder of a distributor's license as classified by s. 561.14(2) may ship or cause to be shipped into this state, or accept delivery of from another

       state or a foreign country, any spirituous liquors, except directly from a primary American source of supply, registered as such as required herein for the brand of spirituous liquors being shipped.

    4. PRIVATE LABELS.- Nothing herein shall prohibit the ownership by vendors of brand names of distilled spirits and vinous beverages commonly known as private labels; provided that such ownership and use thereof does not otherwise violate the Beverage Law.

54. Pursuant to its authority under Section 561.11, Florida Statutes, to "adopt . . . rules . . . to carry out the purposes of the Beverage Law," DABT has adopted a rule, Rule 61A-4.056 (formerly 7A-4.056), Florida Administrative Code, that implements Section 565.095, Florida Statutes, as interpreted by DABT. The rule provides as follows:

    
    

    1. One primary American source of supply shall be designated for each brand of spirituous liquors and wines handled in this state by any Florida distributor. The manufacturer or owner of the spirituous liquor or wine at the time same became a marketable product shall designate the

       primary American source of supply and such primary American source of supply shall file a registration application with [DABT] on forms provided by [DABT]. Each brand of such spirituous liquor or wine shall be individually listed on such registration.

    2. No manufacturer, owner, agent of such person or primary American source of supply shall ship or cause to be shipped into Florida nor shall any Florida distributor receive any spirituous liquors or wines unless the primary American source of supply for such spirituous liquor or wine has filed an application for registration as primary American

       source which application has been approved by [DABT].

    3. [DABT] shall register only one primary American source of supply for any one brand of spirituous beverages or wine.

    4. Distributors licensed in the State of Florida shall not purchase, receive or be in possession of any spirituous liquors or wines unless the same were obtained directly from a registered primary American source of supply and the invoice to the distributor for such product is from the registered primary American source of supply.

    5. Nothing in this rule shall prohibit subsequent intrastate sales, transfer, and invoicing of spirituous liquor or wine between licensed Florida distributors.

    6. It shall be the responsibility of the primary American source to report on forms provided by [DABT] all shipments of product to any Florida distributors and to provide copies of invoices going to such distributors.

    
    

55. This rule has "the full force and effect of law." Section 561.11, Fla. Stat.; cf. City of Palm Bay v. Department of Transportation, 588 So.2d 624, 628 (Fla. 1st DCA 1991)("duly promulgated agency rules . . . will be treated as presumptively valid until invalidated in a section 120.56 rule challenge"); 8/ Decarion v. Martinez, 537 So.2d 1083, 1084 (Fla. 1st DCA 1989)("[u]ntil amended or abrogated, an agency must honor its rules").

    
    

56. An applicant for licensure or registration whose application DABT preliminarily determines to disapprove is entitled to notice of the grounds for DABT's proposed disapproval of its application and an opportunity to have a Section 120.57 hearing on the proposed action. Section 120.60(3), Fla. Stat.

57. At the Section 120.57 hearing, the applicant has the burden of proving by a preponderance of the evidence that it is entitled to the license or registration it has requested. 9/ See Pershing Industries, Inc., v. Department of Banking and Finance, 591 So.2d 991, 994 (Fla. 1st DCA 1991); Cordes v. Department of Environmental Regulation, 582 So.2d 652, 654 (Fla. 1st DCA 1991); Department of Transportation v. J.W.C., Co., 396 So.2d 778, 787 (Fla. 1st DCA 1981); Department of Health and Rehabilitative Services v. Career Service Commission, 289 So.2d 412, 414-15 (Fla. 4th DCA 1974). The applicant's evidentiary presentation, however, need address only those entitlement issues raised in DABT's notice of intended disapproval. See Woodholly Associates v. Department of Natural Resources, 451 So.2d 1002 (Fla. 1st DCA 1984).

    
    

58. The Section 120.57 hearing is a de novo proceeding "intended to formulate final agency action, not to review action taken earlier and preliminarily." Hamilton County Board of County Commissioners v. Department of Environmental Regulation, 587 So.2d 1378, 1387 (Fla. 1st DCA 1991); Beverly Enterprises-Florida v. Department of Health and Rehabilitative Services, 573 So.2d 19, 23 (Fla. 1st DCA 1990); McDonald v. Department of Banking and Finance, 346 So.2d 569, 584 (Fla. 1st DCA 1977). Accordingly, in determining whether the applicant has met its burden of proof, the hearing officer "is not limited to consideration of the record made by [DABT] during its preliminary investigation of the [applicant's] application and may freely consider any and all additional evidence presented by the parties, including evidence of changed conditions since the preliminary review, so long as [the evidence] is relevant" to the issues raised in DABT's notice of intended disapproval. Gulf Court Nursing Center v. Department of Health and Rehabilitative Services, 483 So.2d 700, 710 (Fla. 1st DCA 1985).

    
    

59. In DOAH Case No. 93-5300, DABT's notice of its proposed disapproval of Petitioner's applications for brand/label and primary American source of supply registration cited Petitioner's failure to "have been designated as the Primary American Source of Supply for any Bacardi Products by the manufacturer or the owner," as required by Section 565.095, Florida Statutes, and Rule 7A-4.056 (now 61A-4.056), Florida Administrative Code, as the reason for DABT's proposed action.

    
    

60. The evidence adduced at the Section 120.57 hearing held, at Petitioner's request, on such proposed action affirmatively establishes (1) that Bacardi y Cia S.A. de C.V. is the manufacturer, rectifier, and bottler of the Bacardi rum products referenced in Petitioner's applications for registration, as well as the owner of these brands of spirituous liquors at the time they become marketable products, 10/ and (2) that neither Bacardi y Cia S.A. de

    C.V. nor any other Bacardi company has designated Petitioner to be the primary American source of supply of these products or to otherwise act as its agent in their distribution and sale in the United States. Not having been so designated, Petitioner does not qualify, under Section 565.095, Florida Statutes, as interpreted by DABT in Rule 61A-4.056, Florida Administrative Code, 11/ as the primary American source of supply of these brands of Bacardi rum. Accordingly, DABT should disapprove Petitioner's applications to be registered as the primary American source of supply of these brands and to have, as such primary American source of supply, these brands (and their labels) 12/ registered. 13/

61. In DOAH Case No. 94-0057, DABT's notice of its proposed disapproval of Petitioner's KLD application cited Petitioner's failure to "provide proof of right of occupancy to the premises sought to be licensed" as the reason for DABT's proposed action.

    
    

62. The preponderance of the evidence adduced at the Section 120.57 hearing held, at Petitioner's request, on such proposed action establishes that, although Petitioner does not have the right to occupy the premises which, according to its KLD application, it seeks to have licensed, it does have the right to occupy the premises it actually desires to have licensed (those located at 6998 N.W. 25th Street, Miami, Florida). Through the delivery of Marvin's May 11, 1993, letter, to DABT Director Scully's office in Tallahassee, 14/ Petitioner made a reasonable and good faith effort to apprise DABT that it was these latter premises, not those indicated in its KLD application, that it sought to have licensed. At no time, however, has Petitioner, in accordance with the requirements of Section 561.17 Florida Statutes, submitted to the Miami District Office, on the appropriate DABT-prescribed form, a complete and accurate amended KLD application which identifies the "location address" of the premises sought to be licensed as 6998 N.W. 25th Street, Miami, Florida, and provides the required information regarding these premises. Petitioner, though, may very well have been lulled into such inaction by the absence of any DABT response to Marvin's May 11, 1993, letter suggesting that Petitioner needed to file such an amended application with the Miami District Office. Under such circumstances, before DABT issues its final order disposing of Petitioner's KLD application, it should allow Petitioner a reasonable opportunity to file the necessary amended application with the Miami District Office. Any such amended application so filed should be investigated and reviewed in accordance with the applicable provisions of Chapter 561, Florida Statutes. If Petitioner fails to file an amended application within the time allotted, DABT should disapprove the unamended application on the ground that Petitioner does not have the right to occupy the premises sought, through the application, to be licensed.

RECOMMENDATION

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

RECOMMENDED that DABT (1) issue a final order in DOAH Case No. 93-5300, disapproving, for the reason given in its June 30, 1993, letter to Petitioner, Petitioner's applications for registration, and (2) before issuing a final order in DOAH Case No. 94-0057 disposing of Petitioner's KLD application, give Petitioner a reasonable opportunity to submit to the Miami District Office, on the appropriate DABT-prescribed form, a complete and accurate amended application which identifies the "location address" of the premises sought to be licensed as 6998 N.W. 25th Street, Miami, Florida, and provides the required information regarding these premises.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 12th day of September, 1995.

STUART M. LERNER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 12th day of September, 1995.

ENDNOTES

1/ Petitioner is representing itself in these proceedings through the Feldmans. Such self-representation is permissible in administrative proceedings. See Magnolias Nursing and Convalescent Center v. Department of Health and Rehabilitative Services, 428 So.2d 256, 257 (Fla. 1st DCA 1982).

2/ Cutillas is presently president of the holding company, Bacardi, Ltd., that owns over one hundred Bacardi companies worldwide.

3/ Applications for alcoholic beverage licenses are reviewed and investigated by the local DABT office for the district in which the place of business for which the license is being sought is located.

4/ Such a license authorizes the holder to distribute alcoholic beverages in Florida.

5/ On the applications, the word "Bacardi" was misspelled.

6/ Petitioner asserts that it "applied only for brand registration" and "did not apply for registration as [the] PASS [primary American source of supply]." An examination of Petitioner's applications, however, reveals that Petitioner did "apply for registration as [the] PASS for the brands listed on the applications."

7/ DABT did not, for Petitioner's benefit, define what it meant by the phrase "right of occupancy."

8/ The instant proceedings are Section 120.57 licensure/registration proceedings, not "[S]ection 120.56 rule challenge" proceedings.

9/ An applicant seeking a permanent alcoholic beverage license has the burden of proof regardless of whether it has been granted a temporary initial license pursuant to Section 561.181, Florida Statutes, pending the outcome of the license investigation and hearing process.

10/ Petitioner claims that it, not Bacardi y Cia S.A. de C.V., is the "owner," as that term is used in Section 565.095, Florida Statutes, of these brands of Bacardi rum inasmuch as it owns the rum when it first enters Florida. To so hold would be to effectively rewrite the statute. This DABT may not do. See In re Order on Prosecution of Criminal Appeals by Tenth Judicial Circuit Public Defender, 561 So.2d 1130, 1137 (Fla. 1990)("[c]ourts should not add additional words to a statute not placed there by the legislature"); Chaffee v. Miami Transfer Company, Inc., 288 So.2d 209, 215 (Fla. 1974)(tribunal may not "invoke a limitation or . . . add words to the statute not placed there by the Legislature"); Board of County Commissioners of Monroe County v. Department of Community Affairs, 560 So.2d 240, 242 (Fla. 3d DCA 1990)("in construing a statute, courts cannot attribute to the legislature an intent beyond that expressed"); Devin v. City of Hollywood, 351 So.2d 1022, 1025 n.6 (Fla. 4th DCA 1976)(courts must "refuse to tack additional words on a statute").

11/ In its proposed recommended order, Petitioner challenges the constitutionality of Section 565.095, Florida Statutes, and Rule 61A-4.056, Florida Administrative Code. The Hearing Officer, however, is without authority to consider the merits of such a challenge. See Department of Revenue v.

Magazine Publishers of America, Inc., 604 So.2d 459, 462 n.3 (Fla. 1992), citing with approval, Cook v. Florida Parole and Probation Commission, 415 So.2d 845 (Fla. 1st DCA 1982)("Division of Administrative Hearings does not have jurisdiction to dispose of constitutional issues [even] in a section 120.56 proceeding"); Palm Harbor Special Fire Control District v. Kelly, 516 So.2d 249, 251 (Fla. 1987)("[i]t is axiomatic that an administrative agency has no power to declare a statute void or otherwise unenforceable"); Myers v. Hawkins,

362 So.2d 926, 928 n.4 (Fla. 1978)("[g]enerally speaking, administrative agencies are not the appropriate forum in which to consider questions of constitutional import"); Metropolitan Dade County v. Department of Commerce,

365 So.2d 432, 434-35 (Fla. 3d DCA 1978)("the Administrative Procedure Act cannot relegate matters of constitutional proportions to administrative agency resolution, nor can it impair judicial jurisdiction to determine constitutional disputes").

12/ Although these labels have been approved by the federal Bureau of Alcohol, Tobacco and Firearms as meeting federal labeling requirements, such approval, standing alone, does not provide DABT with an adequate basis upon which to approve the applications for registration which are the subject of DOAH Case No. 93-5300 inasmuch as DABT must measure these applications against requirements imposed by Florida law that Petitioner did not have meet to obtain federal government approval. (As noted above, the question of whether this Florida law is, as Petitioner argues, constitutionally infirm is one that must be left to the judiciary to decide.)

13/ That, in 1992, DABT issued a Declaratory Statement in which it "declare[d] that, based upon and limited to [Petitioner's] representations that it is the closest source of Mexican Bacardi Rum, [Petitioner] qualifies as a primary American source under Section 565.095, Florida Statutes," does not estop DABT from now determining, based upon the record evidence in these proceedings, that Petitioner is not, under Section 565.095, Florida Statutes, as interpreted by DABT in Rule 61A-4.056, Florida Administrative Code, the primary American source of supply of these Bacardi rum products and therefore should not be registered as such. See Department of Revenue v. Anderson, 403 So.2d 397, 400 (Fla.

1981)("state cannot be estopped through mistaken statements of the law"); Glass

v. Department of Revenue, 650 So.2d 684, 686 (Fla. 5th DCA 1995)(alleged representations made to taxpayer by agency employees regarding tax exempt status of certain transaction did not estop agency from subsequently assessing taxes

against taxpayer inasmuch as "[e]ven if DOR employees supplied this misinformation, the statements were statements of law based upon details supplied by [taxpayer] not mistakes of material fact. [Taxpayer] testified that he gave a scenario to the DOR employees and they told him whether the transaction was taxable"); T & L Management, Inc. v. Department of Transportation, 497 So.2d 685, 687 (Fla. 1st DCA 1986)(agency not estopped from revoking previously issued permits where "it was the applicant- not the agency- which made the initial representations upon which the department relied, when originally approving the permits"); Austin v. Austin, 350 So.2d 102, 105 (Fla. 1st DCA 1977)(agency not bound by erroneous statement of law it made in pamphlet on retirement benefits; "[a]dministrative officers of the state cannot estop the state through mistaken statement of the law").

Petitioner argues that there is an additional reason why DABT is barred from disapproving its applications for registration. Its argument, which is set forth in its proposed recommended order, is as follows:

During the discovery phase of this case in preparation for the Administrative Hearing, Petitioner in its discovery request asked Respondent to produce through the concept of stare decisis all orders from the FDBPR and/or FDABT in which other cases had been decided with respect to: 1) the denial of licensure, as happened to Petitioner; 2) refusal to register brands, as happened to Petitioner; and 3) denials of PASS designations or revocation of PASS designation. The Respondent asserted that no such decisions could be located as they do not maintain records of their decisions.

Petitioner asserts that this failure on the part of FDBPR and/or FDABT violates Fla. Stat. 120.53(2) and 120.68(8). The FDBPR/FDABT's failure to comply with the statute violates Petitioner's equal protection guarantees of both the Florida and the United States Constitutions. The cornerstone case of GESSLER V. DEPT. OF BUSINESS & PRO. REG., 627 So.2d 501 (Fla. App. 4 Dist. 1993)

provides sufficient law for the Court to rule that FDBPR /FDABT['s] failure to comply with Fla. Stat 120.53 makes the ruling of the FDABT in its refusal to register Petitioner's brands and the seizure of Petitioner's products an error as a matter of law.

Petitioner makes this argument for the first time in its proposed recommended order. It did not raise the issue of DABT's alleged failure to comply with the requirements of Section 120.53, Florida Statutes, in its proposed prehearing stipulation or in any other prehearing pleading. Moreover, the record fails to establish that DABT violated Section 120.53, Florida Statutes, as alleged by Petitioner, much less that Petitioner was prejudiced by any such violation. Under such circumstances, DABT should decline to follow Petitioner's suggestion that it approve Petitioner's applications for registration on the ground that such a violation was committed. See Carter v. Department of Professional Regulation, Board of Optometry, 633 So.2d 3 (Fla.

1994)(burden is on licensee alleging that administrative complaint should be dismissed based upon agency's violation of procedural requirements to show that licensee was prejudiced by violation); Prestressed Decking Corp. v. Medrano,

556 So.2d 406, 409 (Fla. 1st DCA 1989)(issue not raised in notice of hearing or pretrial stipulation should not have been considered); Philpot v. City of Miami, 541 So.2d 680, 684 (Fla. 1st DCA 1989)(decision may not be based upon "material which was not made a part of the record"); Sanders v. Bureau of Crimes Compensation, Division of Workers' Compensation, Department of Labor and Employment Security, 474 So.2d 410, 411 (Fla. 5th DCA 1985)(parties' stipulation that issue not in dispute was conclusive and binding; "a finder of fact may not rule upon issues which are outside the record and beyond the scope of the hearing"); Lotspeich v. Neogard Corp., 416 So.2d 1163, 1165 (Fla. 3d DCA 1982)("[p]retrial stipulations prescribing the issues on which a case is to be tried are binding upon the parties and the court, and should be strictly enforced").

14/ DABT Director Scully's name appeared at the bottom of the May 7, 1993, Notice of Intent to Disapprove Petitioner's KLD application to which Marvin was responding in his May 11, 1993, letter.

APPENDIX

The following are the Hearing Officer's specific rulings on the "findings of facts" proposed by the parties in their post-hearing submittals:

Petitioner's Proposed Findings

1. Rejected as a finding of fact because it is more in the nature of legal argument.

2. Before the word "entry:" Accepted and incorporated in substance, but not necessarily repeated verbatim, in this Recommended Order; After the word "entry:" Not incorporated in this Recommended Order because, even if true, it would add only unnecessary detail to the factual findings made by the Hearing Officer.

3. Accepted and incorporated in substance.

4. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

5. Not incorporated in this Recommended Order because, even if true, it would add only unnecessary detail to the factual findings made by the Hearing Officer.

6. Accepted and incorporated in substance.

7. First sentence: To the extent that this proposed finding states that the rum in question would be "legally imported," it has been rejected as a finding of fact because it is more in the nature of legal argument. Otherwise, it has been accepted and incorporated in substance; Second and third sentences: Not incorporated in this Recommended Order because, even if true, they would add only unnecessary detail to the factual findings made by the Hearing Officer; Fourth sentence: To the extent that this proposed finding states that, pursuant to an oral agreement with the owner of the 25th Street warehouse, Petitioner had the right to occupy space in the warehouse, it has been accepted and incorporated in substance. Otherwise, it has been rejected as a finding of fact because it is more in the nature of argument concerning the credibility and significance of testimony adduced at hearing.

8. Not incorporated in this Recommended Order because, even if true, it would add only unnecessary detail to the factual findings made by the Hearing Officer.

9. First through fourth sentences: Accepted and incorporated in substance; Fifth and sixth sentences: To the extent that these proposed findings state that DABT "designated [Petitioner] PASS on October 2, 1992," they have been rejected because they lack sufficient evidentiary/record support. To the extent that they state that on October 2, 1992, DABT declared, based upon Petitioner's representations that it was "the closest source of Mexican Bacardi Rum," that Petitioner "qualifie[d]" as the primary American source of supply of this rum under Section 565.095, Florida Statutes, they have been accepted and incorporated in substance. To the extent that the fifth sentence also states that Naclerio requested that DABT set aside or declare invalid the October 2, 1992, Declaratory Statement, it has been accepted and incorporated in substance; Seventh sentence: Not incorporated in this Recommended Order because, even if true, it would add only unnecessary detail to the factual findings made by the Hearing Officer.

10. First sentence: Accepted and incorporated in substance; Second sentence: To the extent that this proposed finding states that then Deputy DABT Director Harris signed the December 30, 1992, letter, it has been accepted and incorporated in substance. Otherwise, it has been rejected as a finding of fact because it is more in the nature of argument concerning the credibility and significance of testimony adduced at hearing.

11. Accepted and incorporated in substance.

12. To the extent that this proposed finding states that Petitioner received certificates of label approval from the federal Bureau of Alcohol, Tobacco and Firearms for the labels it intended to use on the bottles of Mexican-made Bacardi "Gold Rum," "White Rum," "Diluted Rum" and "Dark Diluted Rum" it planned to import into the United States and that the certificates for the "Gold Rum" and "White Rum" labels were received on March 23, 1993, these proposed findings have been accepted and incorporated in substance. To the extent that it states that the certificates for the "Diluted Rum" and "Dark Diluted Rum" were also received on March 23, 1993 (as opposed to approximately three weeks later), it has been rejected because it lacks sufficient evidentiary/record support. To the extent that it states that the labels made the "Mexican Bacardi Rums legally distinct products," it has been rejected as a finding of fact because it is more in the nature of legal argument.

13. To the extent that this proposed finding states that Petitioner had a "designation as PASS" (as opposed to a Declaratory Statement from DABT that, based upon Petitioner's representations, Petitioner "qualifie[d]" as the primary American source of supply of Mexican-made Bacardi rum), it has been rejected because it lacks sufficient evidentiary/record support. Otherwise, it has been accepted and incorporated in substance.

14. First and second sentences: Accepted and incorporated in substance; Third sentence: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer; Fourth sentence: Rejected as a finding of fact because it is more in the nature of a summary of testimony than a finding of fact; Fifth sentence: To the extent that this proposed finding states that Petitioner's KLD application was approved, it has been rejected because it lacks sufficient evidentiary/record support. To the extent that it states that Petitioner was granted a temporary initial license pending a determination as to whether its application should be approved, it has been accepted and incorporated in substance.

1. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

2. To the extent that this proposed finding states that Petitioner had a "designation as PASS" (as opposed to a Declaratory Statement from DABT that, based upon Petitioner's representations, Petitioner "qualifie[d]" as the primary American source of supply of Mexican-made Bacardi rum), it has been rejected because it lacks sufficient evidentiary/record support. Otherwise, it has been accepted and incorporated in substance.

3. First and third sentences: Accepted and incorporated in substance; Second sentence: To the extent that this proposed finding states that DABT, in its October 2, 1992, Declaratory Statement, did anything more than declare that, based upon Petitioner's representations, Petitioner "qualifie[d]" as the primary American source of supply of Mexican-made Bacardi rum, it has been rejected because it lacks sufficient evidentiary/record support. Otherwise, it has been accepted and incorporated in substance; Fourth sentence: To the extent that this proposed finding states that DABT preliminarily determined to disapprove Petitioner's applications for registration, it has been accepted and incorporated in substance. To the extent that it states that DABT did so "in spite of the Federal Supremacy Doctrine," it has been rejected as a finding of fact because it is more in the nature of legal argument.

4. To the extent that this proposed finding states that the rum in question was "legally imported," it has been rejected as a finding of fact because it is more in the nature of legal argument. Otherwise, it has been accepted and incorporated in substance.

5. First, second and fourth sentences and sixth sentence, before comma: Accepted and incorporated in substance; Third sentence and sixth sentence, after comma: Not incorporated in this Recommended Order because, even if true, they would add only unnecessary detail to the factual findings made by the Hearing Officer; Fifth sentence: Rejected as a finding of fact because it is more in the nature of a summary of testimony than a finding of fact.

6. First sentence: To the extent that this proposed finding states that the rum in question was "legally imported [and] distinct," it has been rejected as a finding of fact because it is more in the nature of legal argument. Otherwise, it has been accepted and incorporated in substance; Second sentence: Rejected as a finding of fact because it is more in the nature of legal argument.

7. First sentence: To the extent that this proposed finding states that "Petitioner had previously been designated on October 1, 1992, as PASS for Mexican Made Bacardi Rum" (as opposed to being the recipient, on October 2, 1992, of a Declaratory Statement wherein DABT declared, based upon Petitioner's representations, that Petitioner "qualifie[d]," under Section 565.095, Florida Statutes, as the primary American source of supply of these rum products), it has been rejected because it lacks sufficient evidentiary/record support. To the extent that it states that on May 6, 1993, Naclerio wrote to DABT Director Scully stating that Petitioner had not registered as the primary American source of supply of Mexican-made Bacardi rum, it has been accepted and incorporated in substance; Second sentence: Rejected because it lacks sufficient evidentiary/record support.

8. First sentence, second sentence, before comma, and fourth sentence: Accepted and incorporated in substance; Second sentence, after comma: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer; Third sentence: To the extent that this proposed finding states that DABT Director Scully's signature (as opposed to his name) appeared on the May 7, 1993, Notice of Intent to Disapprove Petitioner's KLD application, it has been rejected because it lacks sufficient evidentiary/record support. Otherwise, it has been accepted and incorporated in substance; Fifth sentence: Not incorporated in this Recommended Order because, even if true, it would add only unnecessary detail to the factual findings made by the Hearing Officer; Sixth sentence: Rejected as a finding of fact because it is more in the nature of a summary of evidence than a finding of fact.

9. First and second sentences: Accepted and incorporated in substance; Third sentence: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer; Fourth sentence: Not incorporated in this Recommended Order because, even if true, it would add only unnecessary detail to the factual findings made by the Hearing Officer.

10. First and third sentences: Accepted and incorporated in substance; Second sentence: Rejected as a finding of fact because it is more in the nature of a summary of testimony than a finding of fact; Fourth sentence: Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

11. First sentence: This proposed finding has been accepted and incorporated in substance to the extent that it states that on June 30, 1993, DABT gave written notice of its intention to disapprove Petitioner's applications for registration based upon its determination that, contrary to what it had declared in its October 2, 1992, Declaratory Statement, Petitioner

    did not qualify, under Section 565.095, Florida Statutes, as the primary American source of supply of any Bacardi products. To the extent that this proposed finding states that, at the time such notice was given, Petitioner had a permanent (as opposed to a temporary) KLD license and was the "designated" primary American source of supply of Mexican-made Bacardi rum, it has been rejected because it lacks sufficient evidentiary/record support; Second and third sentences: To the extent that these proposed findings state that the 143 cases of Mexican-made Bacardi rum Petitioner imported into Florida were constructively seized on May 7, 1993, they have been accepted and incorporated in substance. To the extent that they state that the rum was "legally imported" and that it was seized "without substantive or procedural due process," they have been rejected as findings of fact because they are more in the nature of legal argument. To the extent that they state that the seizure "was sufficient to bankrupt the company," they have not been incorporated in this Recommended Order because, even if true, they would add only unnecessary detail to the factual findings made by the Hearing Officer.

12. Not incorporated in this Recommended Order because it would add only unnecessary detail to the factual findings made by the Hearing Officer.

13. To the extent that this proposed finding states that on September 27, 1993, DABT gave written notice of its intention to disapprove Petitioner's KLD application based upon its determination that Petitioner had failed to "provide proof of right of occupancy to the premises sought to be licensed," it has been accepted and incorporated in substance. Otherwise, it has been rejected because it lacks sufficient evidentiary/record support.

DAB

Docket for Case No: 93-005300

Orders for Case No: 93-005300