STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OSCEOLA FISH FARMERS )

ASSOCIATION, INC., )

)

Petitioner, )

)

vs. ) Case No. 01-2900RP

)

SOUTH FLORIDA WATER )

MANAGEMENT DISTRICT, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal hearing was held in this case on August 31, 2001, in West Palm Beach, Florida, by Donald R. Alexander, the assigned Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: William E. Guy, Jr., Esquire

John S. Yudin, Esquire Guy & Yudin, LLP

Post Office Box 3386

Stuart, Florida 334995-3386

For Respondent: Luna Ergas Phillips, Esquire

Kathleen Jacques-Adams, Esquire

South Florida Water Management District 3301 Gun Club Road

West Palm Beach, Florida 33406-3007 STATEMENT OF THE ISSUES

The issues are whether the proposed amendment to Rule 40E-

2.041(1), Florida Administrative Code, exceeds the agency's

grant of rulemaking authority; enlarges, modifies, or contravenes the specific law implemented; or is vague, fails to establish adequate standards for agency discretion, and vests unbridled discretion in the agency.

PRELIMINARY STATEMENT

This matter began on July 20, 2001, when Petitioner, Osceola Fish Farmers Association, Inc., filed a Petition under Section 120.56(2), Florida Statutes (2000), challenging the validity of an amendment to existing Rule 40E-2.041(1), Florida Administrative Code. The amendment is proposed by Respondent, South Florida Water Management District, and provides that the drawdown of lakes for environmental, recreational, or flood control purposes is not subject to the permitting requirements of Chapters 40E-2 or 40E-20, Florida Administrative Code.

After the Petition was reviewed for legal sufficiency, it was referred to the undersigned on July 25, 2001, and was scheduled for final hearing on August 21, 2001, in West Palm Beach, Florida. Respondent then filed a Motion to Continue and Consolidate this case with Case No. 00-3651RU, a matter involving a challenge by Petitioner to a nonrule policy which preceded the proposed rulemaking. The Motion to Consolidate was denied, but the matter was rescheduled to August 31, 2001, at the same location. On August 7, 2001, Petitioner filed a Motion for Final Summary Order. On August 27, 2001, Respondent filed a

Motion for Partial Summary Final Order. Due to the proximity of the final hearing, a ruling on both Motions was reserved.

At the final hearing, Petitioner presented the testimony of Richard V. McLean, an environmental consultant, who was accepted as an expert in water management district regulation and water resources. Also, it offered Petitioner's Exhibits 1-3, which were received in evidence. Respondent presented the testimony of William S. Burns, Director of the Water Use Regulation Department, who was accepted as an expert in consumptive use permit and water policy. Also, it offered Respondent's Exhibits 1, 9, 11, and 17. All were received in evidence except Exhibit 17, on which a ruling was reserved. Finally, Respondent's Motion for Official Recognition of Parts I and II, Chapter 373, Florida Statutes; Chapter 40E-3, Florida Administrative Code; Chapter 40E-2, Florida Administrative Code; and Chapter 60-40, Florida Administrative, was granted. A ruling was reserved as to item 5 of that Motion.

The Transcript of the hearing was filed on September 19, 2001. Proposed Final Orders were filed by the parties on October 9, 2001, and they have been considered by the undersigned in the preparation of this Final Order.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of fact are determined:

1. Petitioner, Osceola Fish Farmers Association, Inc. (OFFA), is a non-profit corporation whose members consist of tropical fish farmers in Osceola County, Florida. The parties have stipulated that OFFA has standing to bring this action.

2. Respondent, South Florida Water Management District (District or Respondent), is a public corporation operating pursuant to Chapter 373, Florida Statutes, with its principal office in West Palm Beach, Florida. Among other things, the District has the authority to regulate the uses of water within its geographic boundaries, including Osceola County.

3. On an undisclosed date, the District began test drawdowns (a lowering of the elevation of the water through control structures) in the Alligator Chain of Lakes just east of St. Cloud in Osceola County, where OFFA's members are engaged in tropical fish farming. The drawdowns were undertaken for the purpose of allowing the Florida Fish and Wildlife Conservation Commission (FFWCC) to conduct demucking activities in the lakes to enhance aquatic habitat. Prior to beginning work, the FFWCC obtained an Environmental Resource Permit from the Department of Environmental Protection (DEP). However, the District did not require either itself or the FFWCC to obtain a consumptive use permit on the theory that a lake drawdown for demucking activities was not a consumptive use and therefore did not require a permit.

4. In an effort to halt future scheduled drawdowns, OFFA participated in a United States Army Corps of Engineers proceeding which culminated in the preparation of an Economic Impact Statement for FFWCC's drawdowns; filed a complaint with DEP under Section 373.219(2), Florida Statutes, alleging that an unlawful consumptive use (without a permit) was taking place (which complaint was found to be insufficient); filed an action for injunctive relief in circuit court under Section 403.412, Florida Statutes (which was dismissed or dropped for undisclosed reasons); and finally initiated a proceeding against the District under Section 120.56(4), Florida Statutes, alleging that the District had adopted "an incipient non-rule policy of exempting lake 'drawdowns' from water use permitting requirements" (DOAH Case No. 00-3615RU).

5. To avoid the consequences of an adverse ruling in the latter action, the District began rulemaking proceedings to adopt an amendment to Rule 40E-2.041(1), Florida Administrative Code, to codify its policy relative to lake drawdowns. As amended, the rule reads as follows:

   1. Unless expressly exempt by law or District rule, a water use permit must be obtained from the District prior to any use or withdrawal of water. The drawdown of lakes for environmental, recreational, or flood control purposes is not regulated by Chapter 40E-2 or 40E-20, F.A.C.

      (Underscored language represents amended language). Petitioner has challenged only the amendment, and not the existing rule. The effect of the rule is obvious - a lake drawdown for one of the three stated purposes in the rule will not require a permit, while all other lake drawdowns will.

6. As specific authority for the proposed amendment, the District cites Sections 373.044 and 373.113, Florida Statutes. The former statute authorizes the District to "adopt rules pursuant to [Chapter 120] to implement the provisions of this chapter," while the latter statute authorizes it to "adopt rules pursuant to [Chapter 120] to implement the provisions of law conferring powers or duties upon it."

7. The District has cited Sections 373.103(1), 373.219, and 373.244, Florida Statutes, as the specific laws being implemented. The first statute provides that if specifically authorized by DEP, the District has the authority to "administer and enforce all provisions of this chapter, including the permit systems established in parts II, III, and IV of [Chapter 373], consistent with the water implementation rule"; the second statute provides in relevant part that the District may "require such permits for consumptive use of water and may impose such reasonable conditions as are necessary to assure that such use is consistent with the overall objectives of the district or department and is not harmful to the water resources of the

   area"; and the third statute provides for the issuance of temporary permits while a permit application is pending.

8. In regulating the uses of water within its boundaries, the District administers a comprehensive consumptive water use permit program under Part II, Chapter 373, Florida Statutes. Both parties agree that under Section 373.219(1), Florida Statutes (2000), all "consumptive uses" of water require a permit, except for the "domestic consumption of water by individual users," which use is specifically exempted by the same statute. The global requirement for permits is also found in Rule 40E-2.041 (the rule being amended), as well as Rule 40E- 1.602(1), which provides in relevant part that unless expressly exempted by statute or rule, "[a] water use individual or general permit pursuant to Chapters 40E-2 or 40E-20, F.A.C., must be obtained prior to use or withdrawal of water "

9. The term "consumptive uses" is not defined by statute, but the District has promulgated a rule defining that term. By Rule 40E-2.091, Florida Administrative Code, the District has adopted by reference a document known as the "Basis for Review for Water Use Permit Applications with the South Florida Water Management District." Section 1.8 of that document contains definitions of various terms used in the permitting program, including "consumptive use," which is defined as "[a]ny use of water which reduces the supply from which it is withdrawn or

   diverted." The District's policy for lake drawdowns, as proposed in the rule amendment, is inconsistent with this definition. On this disputed issue, Petitioner's evidence is accepted as being the most persuasive, and it is found that a lake drawdown for any purpose is a consumptive use of water.

10. Section 373.219(1), cited as a specific law being implemented, provides that the District "may require such permits for consumptive use of water and may impose such reasonable conditions as are necessary to assure such use is consistent with the overall objectives of the district and department and is not harmful to the water resources of the area." The District construes this language as authorizing it to decide which uses of water are a "consumptive use," and which are not, and to implement a rule which codifies those decisions relative to lake drawdowns. Not surprisingly, Petitioner views the statute in a different manner and argues that the statute simply allows the District to create a permit program that is consistent with Chapter 373; that under the law a permit is required for all consumptive uses, including lake drawdowns; and that the District has no authority to carve out an exception for a lake drawdown from the permitting process, no matter what the purpose.

11. As noted above, the District has identified three instances (for environmental, recreational, and flood control

    purposes) when a lake drawdown does not require a consumptive use permit. These terms are not so vague that a person of common intelligence would have difficulty understanding them. However, the proposed rule contains no prescribed standards to guide the District in its administration of the rule.

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Section 120.56(2), Florida Statutes (2000).

13. Although the Petitioner has the burden of initially "going forward" with its proof, the District then has the burden "to prove by a preponderance of the evidence that the proposed rule is not an invalid exercise of delegated legislative authority as to the objections raised." Section 120.56(2)(a), Florida Statutes (2000).

14. The objections raised by Petitioner include allegations that the proposed rule amendment violates

    Section 120.52(8)(b), (c), and (d), Florida Statutes (2000). A claim by Petitioner that the rule is also arbitrary and capricious in violation of Section 120.52(8)(e) has been abandoned. Those provisions read in relevant part as follows:

    (8) A proposed or existing rule is an invalid exercise of delegated legislative authority if any one of the following applies:

    1. The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(3)(a)1.;

       
       

    2. The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(3)(a)1.;

       
       

    3. The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency.

    
    

15. Although not specifically referred to by Petitioner in its initial pleading, the same statute provides a set of "general standards" (also known as the "flush-left language") to be used in determining the validity of a rule in all cases. These standards are contained in the closing paragraph of the statute and read as follows:

    A grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. An agency may adopt only rules that implement or interpret the specific powers and duties granted by the enabling statute. No agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious or is within the agency's class of powers and duties, nor shall an agency have the authority to implement statutory provisions setting forth general legislative intent or policy. Statutory language granting rulemaking authority or generally describing the powers and functions of an agency shall be construed to extend no further than implementing or interpreting the specific powers and duties conferred by the same statute.

    Parallel language is also found in Section 120.536(1), Florida Statutes (2000). Under these general standards, the primary issue is "whether the statute contains a specific grant of legislative authority for the rule." Southwest Fla. Water Mgmt. Dist. v. Save the Manatee Club, Inc., 773 So. 2d 594, 599 (Fla. 1st DCA 2000). That is to say, a rule must be "based on an explicit power or duty identified in the enabling statute." Id. at 599. Thus, if a rule does not implement or interpret a specific power or duty conferred by statute, the rule is invalid. Id. at 600. Or, as stated in a more recent decision, "agencies have rulemaking authority only where the Legislature has enacted a specific statute, and authorized the agency to implement it, and then only if the (proposed) rule implements or interprets specific powers and duties." State of Fla., Bd. Of

    Trustees of the Internal Improvement Fund v. Day Cruise Ass'n., Inc., 794 So. 2d 696, 700 (Fla. 1st DCA 2001).

16. The District contends that the specific rulemaking authority (that is, the broad grant of rulemaking authority to promulgate rules) required at the bottom of all rules refers to the "specific rulemaking authority" required by Sections 120.52(8)(b) and 120.54(3)(a)1., Florida Statutes (2000); that this should not be confused with the substantive requirement in the general standards pertaining to "a specific law to be implemented"; and that there is no requirement that these laws

    be one and the same. It goes on to contend that as long as there is a broad grant of rulemaking authority to promulgate the challenged rule, the requirements of Section 120.52(8)(b) have been satisfied since no level of specificity is required by that statute. Under the District's rationale, if a challenger seeks to invalidate a rule on the ground that the general standards have been violated, such an allegation must be specifically pled, and it must be a part of its claim under Section 120.52(8)(c) on the theory that the agency lacks a "specific grant of legislative authority" and that the rule contravenes in some respect the specific law being implemented.

17. Depending on the nature of the allegation, the flush- left language will obviously apply to Section 120.52(8)(c), as Respondent correctly asserts; however, the contention that it does not apply to Section 120.52(8)(b) has been rejected. To begin with, Section 120.52(8), Florida Statutes (2000), provides that a rule is invalid only if "any one of the following [seven grounds] applies," none of which specifically includes the general standards. In light of this statutory scheme, it follows that in a rule proceeding, a challenger may only plead one of the seven grounds as a basis for invalidating a rule, and that if an allegation is made that a general standard has been violated, that allegation must necessarily be a part of one of the enumerated grounds in Section 120.52(8)(a)-(g).

18. When an agency lacks "a specific law to be implemented," the agency has exceeded its grant of rulemaking authority. Put another way, without a specific power or duty granted by the enabling statute to implement or interpret, an agency has no authority to promulgate a rule, and it has exceeded its rulemaking authority. Therefore, allegations that the agency has exceeded its rulemaking authority, that it lacks specific authority to adopt a rule, or that the general standards have been violated, should logically fall under Section 120.52(8)(b) since those allegations more closely fit within that provision. It also follows that even though a party fails to specifically plead that a general standard has been violated, as was the case here, a broad allegation that the agency has exceeded its grant of rulemaking authority is sufficient to include that claim.

19. This conclusion is supported by the reasoning of the court in Dep't of Bus. and Prof. Reg. v. Calder Race Course, Inc., 724 So. 2d 100 (Fla. 1st DCA 1998). In that case, the court affirmed a ruling by an administrative law judge that a proposed rule violated Section 120.52(8)(b) on the ground that the agency lacked a "specific grant of [rulemaking] authority," as required by the flush-left language. In construing the terms of Section 120.52(8)(b) under the 1996 version of the

    Administrative Procedure Act (Act), the court provided the following analysis:

    [T]he language in section 120.52(8)(b), providing that a rule may be determined invalid if "[t]he agency has exceeded its grant of rulemaking authority," applies to the adequacy of the grant of rulemaking authority. (citation omitted) This provision [section 120.52(8)(b)] should be read in pari materia with that in the closing paragraph of sections 120.52(8) and 120.536(1), empowering an agency to "adopt only rules that implement, interpret, or make specific the particular powers and duties granted by the enabling statute,"

    . . .

    
    

    Id. at 104. While the flush-left language was modified by the Legislature in 1999 by replacing the phrase "particular powers and duties" with the phrase "specific powers and duties," subparagraph (8)(b) was not changed, and the same reasoning in Calder Race Course should apply to the 1999 version of the Act. It necessarily follows, then, that at a minimum, the issue of whether the grant of rulemaking authority has been exceeded must be considered in conjunction with the flush-left language of the closing paragraph.

20. Finally, if the District's argument were correct, it would virtually insulate an agency against a challenge under Section 120.52(8)(b) since almost every agency, including the District, has some form of broad rulemaking authority. Therefore, Section 120.52(8)(b) would be rendered meaningless,

    except in the unusual or rare case like that presented in Day Cruise, where the agency's broad grant of rulemaking authority also contained specific limitations against adopting the challenged rule.

21. As specific authority for adopting the rule, the District has cited Sections 373.044 and 373.113, Florida Statutes (2000). Both statutes contain broad grants of rulemaking authority, and the parties agree that this satisfies the requirement that the agency have the necessary "grant of rulemaking authority" to adopt the amendment.

22. As noted earlier, however, a grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. Section 120.52(8); Save the Manatee at 599. To satisfy this requirement, the District relies upon Sections 373.103(1) and 373.219(1), Florida Statutes (2000), as the specific laws being implemented. The first statute provides that the District may be specifically authorized by DEP to

    administer and enforce all provisions of this chapter, including the permit systems established in parts II, III, and IV of [Chapter 373], consistent with the water resource implementation rule.

    In addition, Section 373.219(1) provides that the District may require such permits for consumptive use

    of water and may impose such reasonable

    conditions as are necessary to assure that

    such use is consistent with the overall objectives of the district or department and is not harmful to the water resources of the area. However, no permit shall be required for domestic consumption of water by individual users.

    Although Section 373.244 has also been cited as a specific law being implemented, it pertains to the issuance of "temporary permits" and appears to have no relevance here. The District concedes as much in its Proposed Final Order.

23. The fact that neither enabling statute cited by the District refers to a "lake drawdown," or the words "environmental, recreational, or flood control purposes," is not by itself fatal since "[a] rule that is used to implement or carry out a directive will necessarily contain language more detailed than that used in the directive itself." Id. Here, the question "is whether the statute confers a specific grant of legislative authority for the rule, . . . [a question] that must be determined on a case-by-case basis." Id. If the agency is merely "improvising in an area that can be said to fall only generally within some class of powers or duties the Legislature has conferred on the agency," the proposed rule must necessarily fail. Day Cruise at 700.

24. Section 373.103(1) provides that DEP may authorize the District to "administer and enforce" all provisions within Chapter 373, including the various "permit systems" under Parts

    II, III, and IV of that chapter. Assuming that such authorization has been given, the statute still lacks the "specific power or duty" required by the flush-left language. Nothing therein can be construed as a suggestion, much less a directive, to implement the challenged rule.

25. The second-cited statute [Section 373.219(1)] provides that the District "may require such permits for consumptive use of water and may impose such reasonable conditions as are necessary to assure that such use is consistent with the overall objectives of the district or department and is not harmful to the water resources of the area[,]" provided, however, that "no permit shall be required for domestic consumption of water by individual users." Under this general directive, the District has the power and duty to issue consumptive use permits (except for domestic consumption), subject to such conditions as are necessary to assure that the use is consistent with District policy and the public interest. In using the word "may," the Legislature has simply indicated that there may be certain circumstances in which a use of water, even though a consumptive use, will not require a permit. By way of example, and consistent with the testimony of Petitioner's expert and the overall purpose of the statute, a consumptive use may have such a de minimus impact, or be such a minor project, that it is unnecessary to require the user to file an application and

    establish that the proposed use satisfies the three-pronged test in Section 373.223(1), Florida Statutes (2000). Moreover, the enabling statute does not give "specific instructions on [the] treatment of [lake drawdowns] or contain any other specific directive that would provide support for the proposed rule." Day Cruise at 703. Therefore, the proposed rule exceeds the District's rulemaking authority and is invalid.

26. The test under Section 120.52(8)(c) "is whether a (proposed) rule gives effect to a 'specific law to be implemented,' and whether the (proposed) rule implements or interprets 'specific powers and duties.'" Day Cruise at 704. Because the amendment does not give effect to a specific law to be implemented, it necessarily enlarges the specific provisions of the laws being implemented. Therefore, the proposed rule violates the requirements of Section 120.52(8)(c).

27. Petitioner also contends that the rule fails to contain criteria or definitions to guide the District and confers standardless discretion on the District in violation of Section 120.52(8)(d), Florida Statutes (2000). The general test for vagueness is whether persons of common intelligence are required to guess at the rule's meaning and differ as to its application. Witmer v. Dep't of Bus. and Prof. Reg., 662 So. 2d 1299, 1302 (Fla. 4th DCA 1995).

28. The rule specifies only three kinds of lake drawdowns which would not be regulated by the District's permitting program - drawdowns for recreational, environmental, or flood control purposes. These terms are not so vague that persons of ordinary intelligence have difficulty understanding them. Moreover, it is not necessary for an agency to detail every potential circumstance that might arise under these three circumstances. Cole Vision Corp. v. Dep't of Bus. and Prof. Reg., 688 So. 2d 404, 410 (Fla. 1st DCA 1997). See also Fla. East Coast Industries, Inc. v. State of Fla., Dep't of Community

    Affairs, 677 So. 2d 357, 362 (Fla. 1st DCA 1996)("a [rule] may satisfy due process requirements [as to vagueness] even though it contains general terms and does not furnish detailed plans and specifications of the act or conduct proscribed").

29. The proposed rule does not contain any standards or criteria for guiding the District in administering the rule. In other words, even though the rule points to three instances when a permit is not required, it has no standards or criteria for making that type of determination. It necessarily follows that the rule vests unbridled discretion in the District and thus violates Section 120.52(8)(d).

30. Given the above conclusions, Petitioner's Motion for Summary Final Order and the District's Motion for Partial Summary Final Order are rendered moot. Also, the District's

    Exhibit 17 is received in evidence. In addition, official recognition is granted as to item number 5 (the legislative history of Part II, Chapter 373) in the District's Motion for Official Recognition.

31. Finally, jurisdiction is retained for the limited purpose of considering Petitioner's request that it be awarded reasonable attorney's fees and costs incurred in prosecuting this action.

It is, therefore,

ORDERED that the proposed amendment to Rule 40E-2.041(1), Florida Administrative Code, is determined to be an invalid exercise of delegated legislative authority for the reasons stated above.

DONE AND ORDERED this 6th day of November, 2001, in Tallahassee, Leon County, Florida.

DONALD R. ALEXANDER

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 6th day of November, 2001.

COPIES FURNISHED:

William E. Guy, Jr., Esquire John S. Yudin, Esquire

Guy & Yudin, LLP Post Office Box 3386

Stuart, Florida 34995-3386

Luna Ergas Phillips, Esquire Kathleen Jacques-Adams, Esquire

South Florida Water Management District 3301 Gun Club Road

West Palm Beach, Florida 33406-3007

Carroll Webb, Executive Director

Joint Administrative Procedures Committee Room 120, Holland Building

Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code 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 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: 01-002900RP

Orders for Case No: 01-002900RP