STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CERTIFIED OPERATORS OF SW ) FLORIDA, INC. and LAN MAC PEST ) CONTROL - ENGLEWOOD, INC., )

)

Petitioners, )

)

vs. ) CASE NO. 94-4921F

) DEPARTMENT OF AGRICULTURE AND ) CONSUMER SERVICES, BUREAU OF ) ENTOMOLOGY AND PEST CONTROL ) (CAROL ANN RODRIGUEZ), )

)

Respondent. )

) CERTIFIED OPERATORS OF SW ) FLORIDA, INC. and LAN MAC PEST ) CONTROL - ENGLEWOOD, INC., )

)

Petitioners, )

)

vs. ) CASE NO. 94-6609F

) DEPARTMENT OF AGRICULTURE AND ) CONSUMER SERVICES, BUREAU OF ) ENTOMOLOGY AND PEST CONTROL ) (JACQUELINE V. DILWORTH), )

)

Respondent. )

) CERTIFIED OPERATORS OF SW ) FLORIDA, INC. and LAN MAC PEST ) CONTROL - ENGLEWOOD, INC., )

)

Petitioners, )

)

vs. ) CASE NO. 95-4782F

) DEPARTMENT OF AGRICULTURE AND ) CONSUMER SERVICES, BUREAU OF ) ENTOMOLOGY AND PEST CONTROL ) (SUSAN L. MAXWELL), )

)

Respondent. )

) CERTIFIED OPERATORS OF SW ) FLORIDA, INC. and LAN MAC PEST ) CONTROL - FT. MYERS, INC., )

)

Petitioners, )

)

vs. ) CASE NO. 95-4783F

) DEPARTMENT OF AGRICULTURE AND ) CONSUMER SERVICES, BUREAU OF ) ENTOMOLOGY AND PEST CONTROL ) (CARRIETTA KELLY), )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing in the above- styled consolidated cases on December 19, 1995 in Tallahassee, Florida.

APPEARANCES

For Petitioners: Lance M. McKinney, Esquire

Post Office Box 88

4635 South Del Prado Boulevard Cape Coral, Florida 33910

For Respondents: Robert G. Worley, Esquire

Mayo Building, Room 515 Tallahassee, Florida 32399-0800

STATEMENT OF THE ISSUES

Petitioners seek attorney's fees and costs from Respondent, Department of Agriculture and Consumer Services, pursuant to Section 57.111, Florida Statutes. The parties have stipulated that Petitioners are "small business parties" under that section, and that the fees and costs being sought are "reasonable." The issues remaining for disposition, therefore, are:

1. Whether Petitioners "prevailed" in all four underlying cases, including the two that were settled prior to final hearing;

2. Whether the Department "initiated" the procedures, or was merely a "nominal party";

3. Whether the Department had a "reasonable basis in law and fact" at the time that it initiated the proceedings;

4. Whether special circumstances exist which would make an award unjust; and

5. Whether the statutory $15,000 cap should be applied collectively or separately to the four underlying cases.

PRELIMINARY STATEMENT

These requests for fees and costs arise from Petitioners' successful efforts in four underlying cases in which individuals were denied registration as "especially pesticide-sensitive." The individuals' names appear in the above styles of the cases only for the purpose of distinguishing the cases. The individuals are not subject to payment of fees and costs pursuant to Section 57.111, Florida Statutes.

After disposition of each of the cases, by settlement or final order after formal hearing, the Petitioners timely filed their petitions for fees as follows:

No. 94-4921F (Carol Ann Rodriguez) Petition filed September 2, 1994; amended petition

filed September 28, 1995.

No. 94-6609F (Jacqueline V. Dilworth) Petition filed November 23, 1994.

No. 95-4782F (Susan L. Maxwell) Petition filed September 28, 1995.

No. 95-4783F (Carrietta Kelly) Petition filed September 28, 1995.

The four cases were consolidated and considered in a single proceeding conducted as described above.

At the hearing, Petitioners presented the testimony of Larry McKinney. The Hearing Officer admitted, by stipulation, the record of the underlying consolidated cases (including the four at issue here), Florida Pest Control Association., Inc. et al. v. Department of Agriculture and Consumer Services, et al., DOAH Case Nos. 94-2801, et al. In addition, the parties stipulated to the admission into evidence of deposition of John R. Mulrennan, Jr., taken July 14, 1994.

After hearing, the parties submitted proposed orders with proposed findings of fact and memoranda of law. These have been considered and the proposed findings of fact are specifically addressed in the attached appendix.

FINDINGS OF FACT

(The facts are substantially uncontroverted and the facts established in the underlying cases nos. 94-2801, et al are incorporated by reference. The following facts are recounted to establish a background for the contested issues of law.)

1. As stipulated, the Petitioners are small business parties within the meaning of Section 57.111, Florida Statutes. They are Florida corporations, with their principal offices in Florida, with less than 25 full-time employees and net worth of less than $2 million.

   
   

2. The Department of Agriculture and Consumer Services (department) is the state agency responsible for administering and maintaining the pesticide- sensitive and especially pesticide-sensitive person registries as provided in Section 482.2265(3), Florida Statutes (1993).

   
   

3. Carol Ann Rodriguez, Jacqueline V. Dilworth, Susan L. Maxwell and Carrietta Kelly are four individuals, among approximately twenty-seven individuals, who applied to the department for designation as "especially pesticide-sensitive" pursuant to subsection 482.2265(3), Florida Statutes, (1993).

   
   

4. The pesticide-sensitive and especially pesticide-sensitive registries are described in the department's final order entered August 4, 1995, adopting all but two findings of fact in the Hearing Officer's recommended order in Case No. 94-2801, et al. These findings, and the findings related to the

   department's review of applications, need not be repeated here. In summary, however, the department did not investigate the merits of the applications but merely determined whether the certifying physicians were qualified according to the department's liberal interpretation of its own rule. That review function was delegated primarily to the secretary for the administrator of the department's pest control section.

   
   

5. After review, the department published quarterly notices in the Florida Administrative Weekly of its intent to grant applications of especially pesticide-sensitive persons. The notices listed the names and addresses of the applicants and described the process for pest control operators to request hearings pursuant to Section 120.57, Florida Statutes. These were clear points of entry.

   
   

6. Petitioners here, and the Florida Pest Control Association, Inc. filed their requests for hearings, challenging the department's proposed action. The underlying consolidated cases resulted.

   
   

7. Prior to the formal hearing, several individual applicants, including Carol Ann Rodriguez and Jacqueline Dilworth, settled their cases by withdrawing their applications and agreeing to be placed on the less restrictive pesticide- sensitive registry. This outcome was favorable to Petitioners because they were thereby relieved of the more onerous notification requirements which attach when an individual is designated "especially pesticide-sensitive." This was the relief Petitioners sought.

   
   

8. After vigorous prehearing motion and discovery activity, approximately twenty consolidated cases proceeded to formal hearing. Among those were the individual cases of Susan L. Maxwell and Carrietta Kelly.

   
   

9. The department, through counsel, participated in the formal hearing. It presented evidence through exhibits and witnesses, and cross-examined witnesses presented by other parties.

   
   

10. Evidence to support Susan Maxwell's application was limited to a certification signed by Dr. Albert Robbins, an osteopathic physician. The certification was not supported by any non-hearsay evidence.

    
    

11. Evidence to support Carrietta Kelly's application was limited to Dr. Robbins' testimony that he signed her certificate after she and her physician husband called him and wrote him a letter. Mrs. Kelly was never Dr. Robbins' patient and he never met her.

    
    

12. The outcome of the formal hearing was a recommended order which found that no individual in the multiple cases presented adequate proof of the need for notification at greater distance than that specified for pesticide-sensitive persons. In other words, the applicants failed to prove entitlement to designation as "especially pesticide-sensitive."

    
    

13. The department entered its final order on August 4, 1995, and adopted all but two findings by the hearing officer. The first rejected finding was that nothing in evidence indicated that one of the certifying individuals, "Roy

    P. Doyle," was a physician. The second finding rejected by the department was that the department had failed to justify or explicate its policy for qualifying physicians other than those specified in its own rule. The department's final order removed all of the individual parties from the registry as "especially pesticide-sensitive" and left them on the pesticide-sensitive list.

14. Petitioners thus prevailed on the central issue in dispute: whether the individuals were entitled to designation as "especially pesticide- sensitive."

    
    

15. The fees and costs incurred by Petitioners in their successful defense, as well as fees incurred in pursuing the instant claims, are appropriately described in affidavits filed with the petitions and amended petitions. The department accedes to the reasonableness of the fees and costs, except where they are duplicated in more than one case.

    
    

16. The affidavits establish that the Petitioners incurred $22,348.70 in attorney's fees and $4,085.26 in costs related to the four underlying cases. In addition, and not included in the above total, are minor fees incurred in individual cases:

    
    

    Rodriguez	$374.00
    Dilworth	$368.50
    Maxwell	$115.50
    	$858.00

    
    

    Petitioners also claim $2,530.00 (23 hours x $110/hour) for fees incurred in their Section 57.111 cases here. These costs and fees are reasonable, and amount to a total of $29,821.96.

    
    

17. The calculation which leads to that total avoids duplication (charges for the same work computed more than once). The calculation also reflects that the three Petitioners joined together, two Petitioners each, in the four underlying cases, hired a single attorney and avoided duplication of effort by separate attorneys for each Petitioner.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction in this proceeding pursuant to Section 57.111, Florida Statutes and Section 120.57(1), Florida Statutes.

    
    

19. Section 57.111, Florida Statutes, mandates an award of attorney's fees and costs to a prevailing small business party in any administrative proceeding pursuant to Chapter 120 initiated by a state agency, unless the actions of the agency were substantially justified or special circumstances exist which would make the award unjust. No award may be made in any case in which the state agency was a nominal party and no award may exceed $15,000 in a single action.

    
    

    Prevailing Small Business Party

    
    

20. Petitioners established, and it was further stipulated, that they are "small business parties" as defined in subsection 57.111(3)(d), Florida Statutes.

    
    

21. The issue in the underlying proceeding was whether multiple individual applicants, including Rodriguez, Dilworth, Maxwell and Kelly, were entitled to registration as "especially pesticide-sensitive." The two cases which settled before hearing resulted in removal of the individuals from that registry. The two cases which proceeded to formal hearing and the entry of a final order also achieved that salutary result in favor of the pest control operators, including Petitioners.

22. Petitioners "prevailed," as described in subsection 57.111(3)(c)1. and 2., Florida Statutes.

    
    

    Initiated by a State Agency

    
    

23. Section 482.2265(3), Florida Statutes (1993) requires that the department "maintain a current registry of pesticide-sensitive persons." The department must register any person who pays a specified fee and who submits a physician's certificate as described in the statute.

    
    

24. Persons on the pesticide-sensitive registry are entitled to notification by pest control operators of pesticide applications on property contiguous with or adjacent to the residences of the pesticide-sensitive persons.

    
    

25. In 1992 the legislature created more onerous notice requirements for persons designated as "especially pesticide-sensitive." Subsection 482.2265(3)(d), Florida Statutes (1993) provides:

    
    

    (d) The department may designate a particular person as especially pesticide-sensitive if the person, in addition to submitting the documentation and fees required by paragraph (a), submits clear and convincing proof that he has a hypersensitivity to pesticides to such an extent that the notification required by paragraph (c) would not be adequate to prevent his health from being endangered and that notification of pesticide application at a greater distance from his residence is necessary to protect his health. Any person registered under this paragraph must be provided notification of a pesticide appli- cation at a greater distance from the person's residence as fixed by the department based on the proof submitted by the registrant. How- ever, the department may not require notifi- cation of pesticide application at a distance greater than one-half mile from the boundaries of the property where a hypersensitive person

    resides, and it shall limit such extra-distance notifications to instances of use of the pesti- cide or pesticide class to which sensitivity is documented, or for which the department deter- mines sensitivity is scientifically probable.

    Additionally, the department may limit notifi- cation requirements with respect to the appli- cation of a pesticide in excess of a stipulated quantity. Further, a distance requirement must be set at the minimum distance required to prevent the health of the registrant from

    being endangered. Such notification shall include the specific vicinity to which the pest- icide is to be applied. The department's deter- mination with respect to an application to designate a person under this paragraph as

    especially pesticide-sensitive is subject

    to the procedure set forth in s. 120.57, and pest control operators conducting business

    in the general area of the person's residence have standing to participate as parties to such proceeding.

    
    

26. Subsection 482.2265(3)(b), Florida Statutes (1993) required that the department provide notice to pest control operators at least quarterly of the names and addresses of the pesticide-sensitive persons, their particular sensitivities and the special notification requirements described in subsection (d), above.

    
    

27. From this statutory scheme it is obvious that the department "initiated" the administrative proceeding, as defined in subsection 57.111(3)(b)3., because it

    
    

    [w]as required by law or rule to advise a small business party of a clear point of entry after some recognizable event in the invest- igatory or other free-form proceeding of the agency.

    
    

    The department published notice and Petitioners responded with their Chapter 120 challenges to the proposed designations. (See paragraph no. 5, above)

    
    

    Not a Nominal Party

    
    

28. The department was required to make several levels of determination before exercising its discretion to designate a particular person as "especially pesticide-sensitive" under subsection (d), cited above. That designation imposed on pest control operators a duty of notification well beyond that already established for persons merely "pesticide-sensitive." The department's role in the process was not simply ministerial. It was not a "nominal" party.

    
    

29. At every stage of the formal proceeding, discovery through hearing, the department was represented by counsel who competently and vigorously presented the agency's position. The department presented witnesses and cross- examined the witnesses of the other parties.

    
    

30. There are other types of cases in which the department is appropriately considered a "nominal party." See, for example, Fresh Pick Farms, Inc. v. Department of Agriculture and Consumer Services, DOAH Case No. 94-1760F (Final Order by Claude B. Arrington, Hearing Officer, entered 9/12/94), involving the complaint, investigation and hearing process described in Section 604.21, Florida Statutes, for persons claiming to be damaged by breach of agreement given by a licensed dealer in agricultural products. The function of the department in processing and providing a forum for those complaints is decidedly more perfunctory and is easily distinguished from its role in administering the especially pesticide-sensitive registry.

    
    

    No Reasonable Basis in Law or Fact

    
    

31. A proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time it was initiated. Subsection 57.111(3)(e), Florida Statutes. The burden shifts to the department to prove a reasonable basis after

    Petitioners carry their initial burden of establishing that they were prevailing small business parties. DBPR, Department of Real Estate v. Toledo Realty, Inc., 549 So2d 715 (Fla. 1st DCA 1989).

    
    

32. Despite the clear language of subsection (d), requiring substantially more than the documentation and fees submitted by persons seeking placement on the pesticide-sensitive registry, the department relied only on the face of the applications and performed no investigation into the merits of the individuals' claims before initiating the underlying proceedings with its notices in the Florida Administrative Weekly.

    
    

33. An agency's duty to initiate administrative proceedings only when it has substantial justification to do so is non-delegable. State, Department of Health and Rehabilitative Services v. South Beach Pharmacy, Inc., 635 So2d 117 (Fla. 1st DCA 1994). Even though the department had no medical staff of its own and even if it could rely on hearsay statements of physicians, those statements in the files of the department were woefully deficient. Although the department had guidelines, it did nothing to determine that its guidelines were followed by the certifying physicians. The application forms and certifications did not address all of the statutory elements. The department could have, but did not, place the burden on the applicant to produce documentation of the type described in subsection (d). The department, in summary, did nothing more than it was already doing with regard to the pesticide-sensitive registry. Without more, it lacked any reasonable basis in law or fact to declare its intent to find the individuals eligible for especially pesticide-sensitive designation.

    
    

    Special Circumstances

    
    

34. Section 57.111(2), Florida Statutes, provides:

    
    

    (2) The Legislature finds that certain per- sons may be deterred from seeking review of, or defending against, unreasonable govern- mental action because of the expense of civil actions and administrative proceedings.

    Because of the greater resources of the

    state, the standard for an award of attorney's fees and costs against the state should be different from the standard for an award against a private litigant. The purpose of this section is to diminish the deterrent effect of seeking review of, or defending against, governmental action by providing in certain situations an award of attorney's fees and costs against the state.

    
    

35. There are special circumstances in these cases, but not such to defeat the public purposes stated above or to defeat an award of fees and costs. The underlying cases were the first cases arising under the "especially pesticide- sensitive" designation process established in subsection 482.2265(3)(d), Florida Statutes (1993). They also may be the last, as the 1995 Legislature amended and streamlined the process. See, Section 482.2267, Florida Statutes (1995). The department, and not the small business parties, should bear the burden of flawed administration of the short-lived law.

    
    

36. The department could have denied the applications as submitted and required that the individuals meet their statutorily-imposed burden of proving

    hypersensitivity to the extent that extra notification was necessary to protect their health. Such denial may not have precluded all of the administrative cases consolidated in the underlying proceeding, but such denial would have been an obvious "special circumstance" barring recovery of fees and costs by any prevailing small business parties aligned with the department in opposition to the applications.

    
    

37. The fact that two individuals settled and withdrew their applications prior to hearing reduces the liability for fees and costs in those cases but does not bar recovery. Favorable settlement is expressly provided as a means of "prevailing" pursuant to subsection 57.111(3)(c), Florida Statutes.

    
    

    The $15,000 Cap

    
    

38. Subsection 57.111(4)(d)2., Florida Statutes, provides:

    
    

    No award of attorney's fees and costs for an action initiated by a state agency shall exceed $15,000.

    
    

39. The $15,000 cap applies to the four cases here, individually, and not collectively. The underlying proceeding originally involved approximately 27 individual cases, consolidated for economy and convenience, but without prejudice to any party's substantive rights. Each individual had the burden of proving his or her entitlement to the "especially pesticide-sensitive" designation; as to Petitioners, here, there were four actions initiated by a state agency. (Arguably, there were eight actions, since each Petitioner had standing and a clear point of entry.) The case cited by Respondent, White v. Department of Health and Rehabilitative Services, DOAH Case No. 93-7160F (1994), is inapplicable because it involved two underlying cases with the same parties and precisely the same issue, suspension or renewal of White's day care license.

    
    

40. Apportionment, as argued by Petitioners, is reasonable and effectively avoids the windfall or duplication addressed by the court in Department of Insurance and Treasurer v. The Administrators Corporation, 603 So2d 1359 (Fla. 1st DCA 1992). Under apportionment, with due consideration for the fact that less fees were incurred in the two cases which settled before hearing, the fees and costs incurred in none of the four individual actions exceed $15,000.

ORDER

Based on the foregoing, it is hereby ORDERED:

That the Department of Agriculture and Consumer Services pay to Petitioners

$29,821.96.

DONE and ORDERED this 7th day of February, 1996, in Tallahassee, Florida.day of February, 1996.

MARY CLARK, 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 7th day of February, 1996.

APPENDIX TO FINAL ORDER, CASE NOS. 94-4921 et al.

The following constitute specific rulings on the findings of fact proposed by the parties:

Petitioners' Proposed Findings.

12.-14. Adopted by reference to the Final Order in Cases 94- 2801, et al, paragraph 4.

15.-21. The review function is summarized in paragraph 4, otherwise rejected as unnecessary. Although the department rejected in its final order the findings of the hearing officer regarding its rule interpretation, the credentials of the certifying physician are now specifically prescribed by statute. See, Section 482.2267, Florida Statutes (1995).

Respondent's Proposed Findings.

Respondent proposes, by reference, the facts in the department's Final Order dated August 4, 1995. Respondent also proposes that Petitioners are small business parties within the meaning of Section 57.111, Florida Statutes. These proposals are adopted in their entirety.

COPIES FURNISHED:

Lance M. McKinney, Esquire PAVESE, GARNER, HAVERFIELD, DALTON, HARRISON & JENSEN

Post Office Box 88

Cape Coral, Florida 33910

Robert G. Worley, Esquire Department of Agriculture and

Consumer Services

515 Mayo Building

Tallahassee, Florida 32399-0800

Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10

Tallahassee, Florida 32399-0810

Richard Tritschler General Counsel The Capitol, PL-10

Tallahassee, Florida 32399-0810

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this final order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the agency clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the District Court of Appeal in the appellate district where the party resides. The notice of appeal must be filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 94-004921F

Orders for Case No: 94-004921F