STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AUDREY V. OBINYAN, )

)

Petitioner, )

)

vs. ) Case No. 98-5279RU

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal hearing was held in this case on January 14, 1999, in Tallahassee, Florida, before Patricia Hart Malono, the duly-designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Paul Sexton, Esquire

Thornton Williams and Associates

215 South Monroe Street, Suite 600-A Tallahassee, Florida 32301

For Respondent: Peter Fleitman

H. Wayne Mitchell Assistant General Counsel Department of Revenue Post Office Box 6668

Tallahassee, Florida 32314-6668

STATEMENT OF THE ISSUE

Whether the Department of Revenue has violated the requirements of Section 120.54(1)(a), Florida Statutes, by failing to adopt the June 1998 edition of its Code of Conduct and the July 1995 edition of its Disciplinary Procedures and

Standards as rules pursuant to the rulemaking procedures of Section 120.54, Florida Statutes.

PRELIMINARY STATEMENT

On December 4, 1998, Audrey V. Obinyan filed a Petition Challenging Agency Statements Defined as Rules with the Division of Administrative Hearings. In the petition, Ms. Obinyan contends that the July 1, 1989, edition of the Department of Revenue ("Department") Code of Conduct and the July 1995 edition of the Department Disciplinary Procedures and Standards are agency statements which constitute rules, as that term is defined in Section 120.52(15), Florida Statutes. Ms. Obinyan further contends that the Code of Conduct and the Disciplinary Procedures and Standards violate the rulemaking requirement in Section 120.54(1), Florida Statutes, because the Department has not adopted them as rules in conformance with the procedures set forth in Section 120.54. The case was set to be heard on December 29, 1998, but a continuance was granted on Ms. Obinyan's motion. The final hearing was held January 14, 1999.

At the hearing, the parties presented the testimony of William Fritchman, the Department's Intra-Departmental Projects Administrator. Joint Exhibits 1 and 2 were offered and received into evidence. Joint Exhibit 1 is the June 1998 edition of the Department Code of Conduct Guidelines, which was substituted without objection for the 1989 edition of the Code of Conduct identified in the petition as one of the agency statements at

issue. Joint Exhibit 2 is the July 1995 edition of the Disciplinary Procedures and Standards.

A transcript was filed with the Division of Administrative Hearings, and the parties filed proposed final orders, which have been duly considered.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, including the Prehearing Stipulation of the parties, the following findings of fact are made:

Facts which the parties admitted and which required no proof1

1. The Department of Revenue is an agency within the meaning of Section 120.52(1), Florida Statutes.

2. Ms. Obinyan was a career service employee of the Department until she was discharged on January 12, 1999. Ms. Obinyan has standing to challenge the June 1998 edition of the Code of Conduct Guidelines, Department of Revenue Policy Statement #1141-2 ("Code of Conduct"), and the July 1995 edition of the Disciplinary Procedures and Standards, Department of Revenue Policy Statement #1141-9.

3. The Code of Conduct and the Disciplinary Procedures and Standards are official policy statements of the Department.

4. The Code of Conduct and the Disciplinary Procedures and Standards are agency statements of general applicability that are generally and equally applicable to all Department employees and

   were applicable to Ms. Obinyan when she was an employee of the Department.

5. The Code of Conduct and the Disciplinary Procedures and Standards are agency statements that prescribe and implement policy.

6. The Code of Conduct and the Disciplinary Procedures and Standards are agency statements that are intended by their own effect to require compliance.

7. The Department has a policy and practice of requiring all of its employees to sign a written acknowledgement of receipt of the Code of Conduct and the Disciplinary Procedures and Standards and an acknowledgement that the employee understands that his or her violation of any of the conduct standards contained in the Code of Conduct or in the Disciplinary Procedures and Standards shall be grounds for disciplinary proceedings pursuant to the disciplinary action procedures contained in the Disciplinary Procedures and Standards.

8. It is the Department's policy and practice to require its employees to comply with the procedures and standards reflected in the Code of Conduct and the Disciplinary Procedures and Standards.

9. It is the Department's policy and practice, in administering discipline, to follow the disciplinary procedures set forth in the Disciplinary Procedures and Standards and to apply the disciplinary standards set forth therein to avoid

   disparity as to the type and severity of discipline administered for the violations specified in the Disciplinary Procedures and Standards.

10. It is the Department's policy and practice to take disciplinary action in accordance with the Disciplinary Procedures and Standards when an employee violates the Code of Conduct or the disciplinary standards contained in the Disciplinary Procedures and Standards.

11. The Department has taken disciplinary action against its employees, including Ms. Obinyan, pursuant to the disciplinary procedures and standards in the Disciplinary Procedures and Standards since its adoption in 1995.

12. The Department has not adopted the Code of Conduct or the Disciplinary Procedures and Standards as rules or initiated the rulemaking process to adopt either of these statements as a rule.

    Additional facts established by the evidence

    
    

13. The Code of Conduct compiles in one twenty-page document both conduct prescribed or proscribed in statutes and rules and conduct which is prescribed or proscribed by Department policy. It is not intended to be all-inclusive, but an employee is subject to disciplinary action if he or she fails to conform to the provisions contained in the Code of Conduct. The proposed Code of Conduct was submitted to the Governor and Cabinet, as agency head, for review prior to implementation.

14. The Department's Disciplinary Procedures and Standards contain forty-five standards, and violation of any of these standards is grounds for disciplinary action. The disciplinary procedures must be complied with whenever discipline is to be administered to career service employees of the Department. The proposed Disciplinary Procedures and Standards were submitted to the Department of Management Services for approval prior to implementation, as required by Rule 60K-9.002, Florida Administrative Code. The proposed procedures and standards were approved by the Department of Management Services after they were reviewed for consistency with the standards of other agencies and after they were submitted to the American Federation of State, County, and Municipal Employees (AFSCME) for review and comment.

15. The Code of Conduct and the Disciplinary Procedures and Standards do not apply to anyone other than the Department's employees and include disciplinary standards and conduct prescriptions and prohibitions unique to those employees.

16. The provisions of the Code of Conduct and the Disciplinary Procedures and Standards are detailed and precisely describe the disciplinary procedures, disciplinary standards, and prescribed and proscribed conduct which govern the Department's employees.

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of

    the parties thereto pursuant to Section 120.56(4), Florida Statutes (1997).

18. Section 120.52(15), Florida Statutes, states:

    
    

    "Rule" means each agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the procedure or practice requirements of an agency and includes any form which imposes any requirement or solicits any information not specifically required by statute or by an existing rule. The term also includes the amendment or repeal of a rule. The term does not include:

    1. Internal management memoranda which do not affect either the private interests of any person or any plan or procedure important to the public and which has no application outside the agency issuing the memorandum.

19. Based on the facts admitted by the Department in the Prehearing Stipulation, the Code of Conduct and the Disciplinary Procedures and Standards are agency statements of general applicability2 which prescribe and implement policy. Accordingly, unless they are excluded as internal management memoranda, the Code of Conduct and the Disciplinary Procedures and Standards are rules as defined in Section 120.52(15).

20. Based on the facts found herein, the Code of Conduct and the Disciplinary Procedures and Standards are not internal management memoranda. In the context of this case, the Code of Conduct and the Disciplinary Procedures and Standards would be internal management memoranda only if they "do not affect . . . the private interests of any person" and "have no application outside" the Department. Section 120.52(15)(a). Although they

    have no application outside the Department, the Code of Conduct prescribes and proscribes specified conduct and provides that failure to adhere to the prescriptions and proscriptions will subject the Department's employees to discipline. The Department's Disciplinary Procedures and Standards set forth the procedures by which a career service employee can potentially be deprived of his or her employment and include disciplinary standards the violation of which subject an employee to disciplinary action, up to and including dismissal.

    Consequently, the Code of Conduct and the Disciplinary Procedures and Standards affect the private interests of each of the Department's employees, and they are not, therefore, internal management memoranda. See Reiff v. Northeast Florida State Hospital, 710 So. 2d 1030, 1032-34 (Fla. 1st DCA 1998);

    Department of Highway Safety and Motor Vehicles v. Schluter, 705 So. 2d 81, 83 (Fla. 1st DCA 1997); Florida State University v.

    Dann, 400 So. 2d 1304, 1305.

    
    

21. Section 120.56(4)(b), Florida Statutes, provides in pertinent part that "if . . . the petitioner proves the allegations of the petition [challenging agency statements defined as rules], the agency shall have the burden of proving that rulemaking is not feasible and practicable under s. 120.54(1)(a)." Ms. Obinyan has met her burden of proving that the Department's Code of Conduct and its Disciplinary Procedures and Standards are rules, as alleged in her petition.

22. Section 120.54(1), Florida Statutes, provides in pertinent part:

    GENERAL PROVISIONS APPLICABLE TO ALL RULES OTHER THAN EMERGENCY RULES. -

    1. Rulemaking is not a matter of agency discretion. Each agency statement defined as a rule by s. 120.52 shall be adopted by the rulemaking procedure provided by this section as soon as feasible and practicable.

       1. Rulemaking shall be presumed feasible unless the agency proves that:

          1. The agency has not had sufficient time to acquire the knowledge and experience reasonably necessary to address a statement by rulemaking;

          2. Related matters are not sufficiently resolved to enable the agency to address a statement by rulemaking; or

          3. The agency is currently using the rulemaking procedure expeditiously and in good faith to adopt rules which address the statement.

       2. Rulemaking shall be presumed practicable to the extent necessary to provide fair notice to affected persons of relevant agency procedures and applicable principles, criteria, or standards for agency decisions unless the agency proves that:

          1. Detail or precision in the establishment of principles, criteria, or standards for agency decisions is not reasonable under the circumstances; or

          2. The particular questions addressed are of such a narrow scope that more specific resolution of the matter is impractical outside of an adjudication to determine the substantial interests of a party based on individual circumstances.

       
       

23. There is no persuasive evidence in the record to establish that, under the standards set forth in 120.54(1)(a)1. and 2., it is not feasible and practicable for the Department to adopt the Code of Conduct and the Disciplinary Procedures and Standards as rules.

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

ORDERED:

1. The June 1998 edition of the Department of Revenue Code of Conduct Guidelines, Policy Statement #1141-2, and the July 1995 edition of the Department of Revenue Disciplinary Procedures and Standards, Policy Statement #1141-9, violate Section 120.54(1)(a), Florida Statutes.

2. Pursuant to Section 120.595(4), Florida Statutes, Audrey

V. Obinyan is entitled to an award of reasonable costs and reasonable attorney's fees incurred in filing her petition. The parties are accorded thirty (30) days from the date of this order to resolve the amount of such award, subject to the approval by the Administrative Law Judge. If the parties have not resolved the amount of the award within such period of time, the parties shall so advise the Administrative Law Judge, and a hearing will be scheduled to resolve such issue.

DONE AND ORDERED this 15th day of March, 1999, in Tallahassee, Leon County, Florida.

PATRICIA HART MALONO

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1999.

ENDNOTES

1/ The parties included these facts in the Prehearing Stipulation filed with the Division of Administrative Hearings on January 13, 1999.

2/ The Department argues in its Proposed Final Order that the Code of Conduct and the Disciplinary Procedures and Standards are not rules because they permit supervisors and Department management to exercise a certain amount of discretion; because they are not self-executing; because they do not, in

and of themselves, create or adversely affect certain rights; and because they do not have the direct and consistent effect of law. The courts evaluate the factors discussed by the Department to determine if an agency statement is a statement of general applicability. As the court stated in McDonald v. Department of Banking and Finance, 346 So. 2d 569, 581 (Fla. 1st DCA 1977): "Section 120.54 rulemaking procedures are imposed only on policy statements of general applicability, i. e., those statements which are intended by their own effect to create rights, or to require compliance, or otherwise to have the direct and consistent effect of law." See also Department of Highway Safety and Motor Vehicles v. Schluter, 705 So. 2d 81, 83 (Fla. 1st DCA 1997).

In this case, the Department admitted in the Prehearing Stipulation that the Code of Conduct and the Disciplinary Procedures and Standards were "agency statements of general applicability." Even had the Department not made this categorical admission, it has admitted sufficient facts to support a conclusion that that these documents are statements of general applicability pursuant to the court's analysis in Schluter, 705 So. 2d at 83: It admitted that the Code of Conduct and the Disciplinary Procedures and Standards "are intended by their own effect to require compliance;" that it is the Department's "policy and practice to comply with the procedures and standards reflected in Policy Statement #1141-2 [Code of Conduct] and Policy Statement #1141-9 [Disciplinary Procedures and Standards];" that it is the Department's "policy and practice, in administering discipline, to follow the disciplinary procedures set forth in its Policy Statement #1141-9 [Disciplinary Procedures and Standards] and to apply the disciplinary standards set forth in that Policy Statement to avoid disparity as to the type and severity of discipline administered for the specified violations set forth in that

Policy Statement;" and that it is the Department's "policy and practice to take disciplinary action in accordance with the Disciplinary Procedures and Standards in Policy Statement #1141-9 when an employee violates the Code of Conduct contained in Policy Statement #1141-2 or the Disciplinary Standards contained in Policy Statement #1141-9, Florida Statutes, or other regulations." Prehearing Stipulation, Section E, paragraphs 7, 9, 11, 12, and 13.

3/ Joint Exhibit 1, Code of Conduct, Section 1, Introduction.

COPIES FURNISHED:

Paul Sexton, Esquire

Thornton Williams and Associates

215 South Monroe Street, Suite 600-A Tallahassee, Florida 32301

Peter Fleitman

H. Wayne Mitchell Assistant General Counsel Department of Revenue Post Office Box 6668

Carroll Webb

Executive Director and General Counsel Joint Administrative Procedures Committee Holland Building, Room 120

Tallahassee, Florida 32399-1300

Liz Cloud Chief

Bureau of Administrative Code The Elliott Building Tallahassee, Florida 32399-0250

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 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 thirty (30) days of rendition of the order to be reviewed.

1 The parties included these facts in the Prehearing Stipulation filed with the Division of Administrative Hearings on January 13, 1999.

2 . The Department argues in its Proposed Final Order that the Code of Conduct and the Disciplinary Procedures and Standards are not rules because they permit supervisors and Department management to exercise a certain amount of discretion; because they are not self-executing; because they do not, in

and of themselves, create or adversely affect certain rights; and because they do not have the direct and consistent effect of law. The courts evaluate the factors discussed by the Department to determine if an agency statement is a statement of general applicability. As the court stated in McDonald v. Department of Banking and Finance, 346 So. 2d 569, 581 (Fla. 1st DCA 1977): "Section 120.54 rulemaking procedures are imposed only on policy statements of general applicability, i. e., those statements which are intended by their own effect to create rights, or to require compliance, or otherwise to have the direct and consistent effect of law." See also Department of Highway Safety and Motor Vehicles v. Schluter, 705 So. 2d 81, 83 (Fla. 1st DCA 1997).

In this case, the Department admitted in the Prehearing Stipulation that the Code of Conduct and the Disciplinary Procedures and Standards were "agency statements of general applicability." Even had the Department not made this categorical admission, it has admitted sufficient facts to support a conclusion that that these documents are statements of general applicability pursuant to the court's analysis in Schluter, 705 So. 2d at 83: It admitted that the Code of Conduct and the Disciplinary Procedures and Standards "are intended by their own effect to require compliance;" that it is the Department's "policy and practice to comply with the procedures and standards reflected in Policy Statement #1141-2 [Code of

Conduct] and Policy Statement #1141-9 [Disciplinary Procedures and Standards];" that it is the Department's "policy and practice, in administering discipline, to follow the disciplinary procedures set forth in its Policy Statement #1141-9 [Disciplinary Procedures and Standards] and to apply the disciplinary standards set forth in that Policy Statement to avoid disparity as to the type and severity of discipline administered for the specified violations set forth in that Policy Statement;" and that it is the Department's "policy and practice to take disciplinary action in accordance with the Disciplinary Procedures and Standards in Policy Statement #1141-9 when an employee violates the Code of Conduct contained in Policy Statement #1141-2 or the Disciplinary Standards contained in Policy Statement #1141-9, Florida Statutes, or other regulations." Prehearing Stipulation, Section E, paragraphs 7, 9, 11, 12, and 13.

Docket for Case No: 98-005279RU

Orders for Case No: 98-005279RU