STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA PETROLEUM MARKETERS AND ) CONVENIENCE STORE ASSOCIATION, )

)

Petitioner, )

)

vs. )

) DEPARTMENT OF ENVIRONMENTAL ) PROTECTION, )

)

Respondent. )

Case No. 05-2343F

)

FINAL ORDER

Pursuant to notice, a final hearing was conducted in this case on November 8, 2005, in Tallahassee, Florida, before Charles A. Stampelos, the assigned Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Robert D. Fingar, Esquire

Frank & Gramling

3323-C Thomasville Road Tallahassee, Florida 32308

For Respondent: W. Douglas Beason, Esquire

Department of Environmental Protection The Douglas Building, Mail Station 35 3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

STATEMENT OF THE ISSUE

The issue is whether Florida Petroleum Markers and Convenience Store Association (Florida Petroleum) is entitled to reasonable attorney’s fees and costs pursuant to Section 120.595(2), Florida Statutes, and if so, in what amount.1

PRELIMINARY STATEMENT

A Summary Final Order and an Amended Summary Final Order were entered in the rule challenge case, Florida Petroleum Marketers and Convenience Store Association v. Department of Environmental Protection, DOAH Case No. 05-0529RP (DOAH Summary Final Order, June 16, 2005; Amended Summary Final Order,

July 13, 2005)(Summary Final Order). During the course of those proceedings, the Department of Environmental Protection (Department) reserved the right to an evidentiary hearing on Florida Petroleum's entitlement to reasonable attorney’s fees and costs should it prevail.

On June 29, 2005, Florida Petroleum filed a Motion to Enforce Attorney's Fees pursuant to Section 120.595(2), Florida Statutes; an amended motion on August 30, 2005; and a second amended motion on September 14, 2005.

On June 29, 2005, Florida Petroleum filed an Affidavit in Support of Attorney’s Fees. On September 14, 2005, Florida Petroleum filed its Second Affidavit in Support of Attorney’s Fees. On September 19, 2005, Florida Petroleum filed the

affidavit of Lawrence E. Sellers, Jr., in support of its request for attorney’s fees.

On August 3, 2005, the Department filed a Motion to Dismiss, which was denied by Order dated August 31, 2005. On September 8, 2005, the Department filed a Motion for Partial Summary Final Order, which was denied by Order dated September 14, 2005.

The case was set for hearing to commence on September 7, 2005, and later rescheduled for the week of September 19, 2005, and thereafter rescheduled for November 8, 2005, in Tallahassee, Florida.

The parties filed a Joint Pre-Hearing Stipulation and a Supplemental Joint Pre-hearing Stipulation. The parties stipulated that the requested hourly rate of $160.00, the 80 hours expended in support of the successful portion of the rule challenge, and the ultimate amount of $12,600.00 for attorney's fees were reasonable. Florida Petroleum did not request an award of costs.

At the commencement of the final hearing, the Department raised the issue of whether Florida Petroleum waived the right to challenge whether there was a reasonable basis in fact for the agency action contemplated under Section 120.52(8)(e), Florida Statutes. This argument is addressed in the Conclusions of Law, Endnote 7.

During the hearing held November 8, 2005, the Department's Exhibits numbered 1-7 were received into evidence. The Department presented the testimony of Michael Wilson Sole, the Department's Chief of Staff and Barney James (Jack) Chisolm, Jr., the Department's Deputy General Counsel for the waste/air programs in the Department's Office of General Counsel. Florida Petroleum's Exhibits numbered 1 and 2 were received into evidence. Florida Petroleum did not offer any witnesses.

The undersigned took official recognition of the pleadings and record on file in DOAH Case No. 05-0529RP.

The Transcript (T) of the proceeding was filed on November 29, 2005. The parties filed proposed final orders on December 13, 2005, which have been considered.

FINDINGS OF FACT

Introduction

1. Florida Petroleum is the prevailing party in the underlying rule challenge and requests an award of reasonable attorney's fees pursuant to Section 120.595(2), Florida Statutes.2

2. Florida Petroleum prevailed in DOAH Case No. 05-0529RP on one of two challenged proposed rule revisions to Florida Administrative Code Chapter 62-770, which governs cleanup of petroleum contamination. Proposed rule 62-770.220(3)(b) was held to be an "invalid exercise of delegated legislative

   authority." Proposed rule 62-770.220(4), was "not an invalid exercise of delegated legislative authority, except insofar as notice must be given every five years to persons other than 'local governments and owners of any property into which the point of compliance is allowed to extend,' as provided in Section 376.3071(5)(b)2., Florida Statutes."3

3. The Department argues that its actions were "substantially justified" because there was a reasonable basis in law and fact at the time its actions were taken. The proposed rules were approved by the Environmental Regulation Commission (ERC) on February 2, 2005, which is the time when the Department's "actions were taken." The Department does not argue that special circumstances exist that would make the award of fees unjust.

   Department Contamination Programs

   
   

4. The Department's Division of Waste Management is comprised of the Bureau of Petroleum Storage Systems, the Bureau of Waste Cleanup, and the Bureau of Solid and Hazardous Waste.

5. The Bureau of Petroleum Storage Systems administers the state's petroleum contamination cleanup program. This cleanup program encompasses the technical oversight, management, and administrative activities necessary to prioritize, assess, and cleanup sites contaminated by discharges of petroleum and

   petroleum products from petroleum storage systems. There are approximately 23,000 petroleum-contaminated sites statewide.

6. Florida Administrative Code Chapter 62-770 establishes petroleum contamination site cleanup criteria. These criteria are established for the purposes of protecting the public health and the environment and for determining, on a site-specific basis, the rehabilitation program tasks that comprise a site rehabilitation program and the levels at which a rehabilitation program task and site rehabilitation program may be deemed complete. Fla. Admin. Code R. 62-770.160(8).

7. The petroleum contamination cleanup program incorporates risk-based corrective action (RBCA) principles to achieve protection of human health, public safety, and the environment in a cost-effective manner. The phased RBCA process is iterative and tailors site rehabilitation tasks to site-specific conditions and risks. Fla. Admin. Code R. 62-770.160(8).

8. The Bureau of Waste Cleanup administers the state's drycleaning solvent cleanup program. This program is for the cleanup of property that is contaminated with drycleaning solvents as a result of the operations of a drycleaning facility or wholesale supply facility.

9. Florida Administrative Code Chapter 62-782 establishes drycleaning solvent cleanup criteria, established for the purposes of protecting the human health, public safety and the

   environment under actual circumstances of exposure and for determining, on a site-specific basis, the rehabilitation program tasks that comprise a site rehabilitation program and the levels at which a rehabilitation program task and site rehabilitation program may be deemed complete. Fla. Admin. Code

   R. 62-782.150(1). The drycleaning solvent cleanup program, like the petroleum contamination cleanup program, the brownfield site rehabilitation program, and the global RBCA contamination cleanup program mentioned below, incorporates RBCA principles to achieve protection of human health and the environment in a cost-effective manner. Fla. Admin. Code R. 62-782.150(1) and 62-785.150(1).

10. In 2003, the Legislature adopted Section 376.30701, Florida Statutes, which authorizes the Department to adopt rule criteria for the implementation of what is referred to as "global RBCA," which extends the RBCA process to contaminated sites where legal responsibility for site rehabilitation exists pursuant to Chapter 376 or Chapter 403, Florida Statutes.

11. Global RBCA is a cleanup program for contaminated sites that do not fall within one of the Department's other contamination cleanup programs.

    Department Rulemaking Efforts

    
    

12. After the passage of Section 376.30701(2), Florida Statutes, the Department initiated rulemaking to develop Florida

    Administrative Code Chapter 62-780 (global RBCA). Section 376.30701(2) established July 1, 2004, as the date the Department was to adopt rule criteria to implement the global RBCA contamination cleanup program. At the same time, the Department initiated rulemaking with respect to revisions to Florida Administrative Code Chapters 62-770 (petroleum), Chapter 62-782 (drycleaning solvents), and Chapter 62-785 (brownfields). This decision was predicated on the similarities among the four waste cleanup programs and the Department's desire to ensure a consistent approach across the four programs and pursuant to one large rulemaking effort. As such, the Department sought to include the same notification provisions in each rule for consistency purposes. (T 33-34, 55).

13. However, the Department also recognized at the time that the notice provision for RBCA for petroleum contamination cleanups, i.e., Section 376.3071(5)(b)2., was different from the notice provisions for RBCA cleanups for the drycleaning solvent (Section 376.3078(4)(b)), brownfields (Section 376.81(1)(b)), and global RBCA (Section 376.30701(2)(b)) programs. (T 69, 115, 126-129). In each of these three statutes, the Legislature expressly expanded the class of persons to whom notice is required to be given and expressly referred to a specific type of notice to be given (actual or constructive) depending on the class of persons designated to receive notice. Each of the

    latter statutes was enacted after, and presumably with knowledge of Section 376.3071(5)(b)2., which was materially amended in material part in 1996 to add, in part, the notice provision.

    See Ch. 96-277, § 5, at 1131, 1135-1136, Laws of Fla.

    
    

14. In May 2004, the Department became aware of concerns with regard to on-going efforts to assess the groundwater contamination at the former American Beryllium plant in Tallevast, Manatee County, Florida. (The party's refer to the city as Tallavast, whereas the Transcript (T 36) and DEP Exhibit

    1 refer to the city as Tallevast.) For approximately two years, the owner of the plant, Lockheed Martin, had been conducting an on-going assessment of the extent of the solvent (trichloroethylene) contamination. The Department was concerned that there were residential areas located adjacent to and in the immediate vicinity of the former industrial plant.

15. In May 2004, it became apparent that there were problems with certain assumptions concerning the assessment of the groundwater contamination. First, there had been an erroneous assumption that the contamination plume was small and located predominantly on-site. Second, based on well surveys, there was an assumption that there were no human health exposure points in the form of contaminated off-site potable water wells. Significant concerns arose when it became apparent the contamination plume was more extensive than anticipated and had

    migrated off-site. These concerns were exacerbated when it became apparent that groundwater contamination was impacting off-site potable water wells.

16. Tallevast residents raised concerns that they were being exposed to contamination and that they were never properly notified by the Department, upon the initial discovery of the groundwater contamination. Tallevast residents were also concerned about whether the Department had failed to properly notify then once it was discovered the groundwater contamination had migrated off-site.

17. The problems experienced at Tallevast emphasized to the Department the need to explore available avenues to enhance public notification procedures as a whole.4, 5

18. The Department asserted as to a reasonable basis in fact for the proposed rules, that contamination affecting Tallevast residents provided an impetus for the Department in May 2004 to address notification of contamination to affected off-site property owners. The situation in Tallevast arose because well surveys failed to indicate the extent of the contamination plume and that residents were using private wells for potable water. The Department's objective was to make sure that if there was exposure potential, the potentially affected parties should be notified.

19. The Department seems to agree that the failure to discover the contamination of the potable wells in Tallevast occurred during the assessment phase of the cleanup and that it had not yet gotten to the stage of determining the remediation strategy. (T 45-46). The Department's stated concerns regarding Tallevast are not specifically addressed by proposed rule 62-770.220(3)(b) and (4). (T 74-75, 95-96).

20. The Department’s procedure for granting a temporary extension of the point of compliance is that the responsible party will propose such an extension in its remedial action plan. (The four cleanup programs provide for the establishment of a TPOC.) The Department will then issue its notice of intended agency action, notice of the agency action will be provided to the enumerated persons, and the persons receiving notice will have a 30-day comment period. (T 149-155). (Pursuant to proposed rule 62-770.220(3)(a), the person responsible for site rehabilitation (PRSR) "shall provide" actual notice "to the appropriate County Health Department and all record owners of any real property into which the point of compliance is allowed to extend . . . ." In this regard, as Mr. Chisolm testified, the process is "similar to a permit.")

21. Mr. Sole testified that, in the course of rulemaking, Florida Petroleum argued to the Department that the "petroleum statute under 376.3071 is different as it addresses the

    temporary point of compliance. It's not as prescriptive as the other statutory provisions for Risk-Based Corrective Action and the dry-cleaning, the Brownfields, and now the Global RBCA [statutes]. And their concern was that because it's not as prescriptive, [the Department] should not be establishing these additional notice provisions, such as constructive notice . . . But their fear was or concerns . . . were that you're going to engender a lot of litigation that's unnecessary because, as soon as you say the word 'contamination,' somebody is going to want to sue me . . . . And I understood that position. But at the same time, the lessons that we learned were that failure to provide that notice, unfortunately, can cause exposure and can cause a public health concern; and [the Department] needed to balance the two." (T 63-64, 122).

22. Mr. Chisolm testified, in part, about the development of the constructive notice provision in proposed rule 62- 770.220(3)(b) and explained that the global RBCA, brownfields, and drycleaning solvent statutes required constructive notice to residents and business tenants of impacted properties.6 Mr. Chisolm further explained:

    So, if you're going to give notice to the legal owners of a piece of property, many cases there are tenants there. And they may not get the word, and they may be the ones that are drinking the water. The same with business tenants. So the idea was let's give notice to the people who are going to

    be or potentially going to be affected by this contamination, which is, after all, under the property which they may be inhabiting and using. So that was the purpose for the rule change in this case. Let's give notice to everybody who could potentially be affected by the rule, by the contamination beyond the property boundaries

    . . . . The whole idea behind RBCA, Risk- Based Corrective Actions, is that, if there's no exposure, there's no risk.

    There's no danger to the individual, to any individual.

    
    

    (T 116-117).

    
    

    CONCLUSIONS OF LAW

    
    

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

    § 120.595(2), Fla. Stat.

    
    

24. Section 120.595(2), Florida Statutes, provides:

    
    

    If the court or administrative law judge declares a rule or a portion of a rule invalid pursuant to s. 120.56(3), a judgment or order shall be rendered against the agency for reasonable costs and reasonable attorney’s fees, unless the agency demonstrates that its actions were substantially justified or special conditions exist which would make the award unjust. An agency’s actions are "substantially justified" if there was a reasonable basis in law and fact at the time the actions were taken by the agency.

    
    

25. Section 120.595(2), Florida Statutes, requires the entry of an order "against the agency" for reasonable costs and attorney's fees when a court or administrative law judge declares a proposed rule invalid unless the agency demonstrates

    that its actions were substantially justified or that special circumstances exist. See generally Security Mutual Life Ins.

    Co. of Lincoln, Nebraska v. Department of Insurance and State Treasurer, 707 So. 2d 929, 930 (Fla. 1st DCA 1998)(award of fees and costs "mandatory" when agency statement invalidated under Section 120.595(4), Florida Statutes).

26. The Department argues that it was "substantially justified" in promulgating proposed rule 62-770.220(3)(b) and (4). The Department does not contend there are special circumstances that would make an award of fees unjust.

27. Because the term "substantially justified" was apparently borrowed from the Florida Equal Access to Justice Act (FEAJA) codified in Section 57.111, Florida Statutes, the same standards developed in case law under the FEAJA are useful here. In Helmy v. Department of Business and Professional Regulation, 707 So. 2d 366, 370 (Fla. 1st DCA 1998), the court followed the test for "substantially justified" set forth by the United States Supreme Court in Pierce v. Underwood, 487 U.S. 552, 565 (1988) under the analogous attorney's fees statute in the Federal Equal Access to Justice Act (federal act). Quoting from Pierce, the court construed "substantially justified" in the federal act:

    "justified in substance or in the main" – that is, justified to a degree that could satisfy a reasonable person. That is no

    difference [sic] the "reasonable basis in both law and fact" formulation adopted by...the vast majority of other Courts of Appeals that have addressed this issue....

    To be "substantially justified" means, of course, more than merely undeserving of sanctions for frivolousness; that is surely not the standard for Government litigation of which a reasonable person would approve.

    
    

    Helmy, 707 So. 2d at 368 (quoting Pierce, 487 U.S. at 565).

    
    

28. Thus, "in terms of Florida law, the 'substantially justified' standard falls somewhere between the no justiciable issue standard of section 57.105, Florida Statutes (1991), and an automatic award of fees to a prevailing party." Helmy, 707 So. 2d at 368(citations omitted). Further, the agency "must have a solid though not necessarily correct basis in fact and law for the position it took" and here, when the ERC approved the proposed rules on or before February 2, 2005, Department of

    Health and Rehabilitative Services v. S.G., 613 So. 2d 1380, 1386 (Fla. 1st DCA 1993)(quoting McDonald v. Schweiker, 726 F.2d 311, 316 (7th Cir. 1983)), Casa Febe Retirement Home, Inc. v.

    Agency for Health Care Administration, 892 So. 2d 1103, 1105 (Fla. 2d DCA 2004), and "an agency must, at the very least, have a working knowledge of the applicable statutes under which it is proceeding." Helmy, 707 So. 2d at 370. See also Department of Insurance v. Florida Bankers Associations, 764 So. 2d 660, 662 (Fla. 1st DCA 2000)(approving of the Helmy analysis applied to a

    request for fees and costs pursuant to Section 120.595(2), Florida Statutes).

29. The Department has the burden of showing that it was substantially justified in promulgating the proposed rule. See Helmy, 707 So. 2d at 368.7

30. Rulemaking is not a matter of agency discretion. Each agency statement defined as a rule by Section 120.52(15), Florida Statutes, shall be adopted by the rulemaking procedure provided by Section 120.54, Florida Statutes. § 120.54(1)(a), Fla. Stat. For example, unless excluded, "each agency statement of general applicability that implements, interprets, or prescribes law or policy" is a rule by definition and must be adopted as a rule. § 120.52(15), Fla. Stat.

31. But "[n]o agency has inherent rulemaking authority."

    
    

    § 120.54(1)(e), Fla. Stat. In fact,

    
    

    1. 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 statutes. 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 considered to extend no further than implementing or interpreting the specific powers and duties conferred by the same statutes.

       
       

       § 120.52(8), Fla. Stat. (flush left language).

       
       

32. In 1996, the Legislature clarified "significant restrictions on agencies' exercise of rulemaking authority." Board of Trustees of the Internal Improvement Trust Fund v. Day

    Cruise Association, Inc., 794 So. 2d 696, 700 (Fla. 1st DCA 2001), rev. denied, 823 So. 2d 123 (Fla. 2002).

33. A proposed rule which enlarges "the specific provisions of law implemented" is an invalid exercise of delegated legislative authority." § 120.52(8)(c), Fla. Stat.

34. In the rule challenge proceeding, Florida Petroleum conceded that the Department has general rulemaking authority to support the adoption of the proposed rule and also that the Department was implementing or interpreting a specific power and duty when it attempted to adopt the proposed rules. See Summary Final Order at 15, paragraph 29. The sole issue was whether the Department went too far, and it was concluded that it had.

35. In 1996, the Legislature amended Section 376.3071(5), Florida Statutes, by adding many of the factors set forth in Section 376.3071(5)(b)1.-9., including Section 376.3071(5)(b)2., which provides, in part: "Temporary extension of the point of compliance beyond the property boundary, as provided in this

    subparagraph, shall include notice to local governments and owners of any property into which the point of compliance is allowed to extend."(emphasis added).

36. In context, the use of the word "include" in a statute can suggest legislative intent to enlarge rather than limit the class mentioned. See generally Miami County Day School v.

    Bakst, 641 So. 2d 467, 469 (Fla. 3d DCA 1994), rev. denied, 651 So. 2d 1195 (Fla. 1995). The Department applied this general principle and concluded that Section 376.3071(5)(b)2. did not restrict the class to whom notice was to be given. When this section is read as a whole, only the Department may authorize the extension of the TPOC. However, as interpreted by the Department in proposed rule 62-770.220(3), notice shall be provided by the person responsible for site rehabilitation prior to the Department's authorization. The provision of notice is part and parcel of the process to extend the TPOC. The use of the term "include" in context is not clear and unambiguous and required further inquiry as to the intent of this subsection.

37. Next, while not used by the Department as a rationale for its construction of Section 376.3071(5)(b)2., the term "owners of any property" is also not clear and unambiguous, although it was ultimately concluded that "owners" meant "the person having the legal and rightful title to the property and does not include a resident or business tenant of the real

    property." See Summary Final Order at 16-18, paragraphs 33-35. (Although not dispositive, the staff analysis, discussed in Endnote 2 of the Summary Final Order, assisted somewhat in reaching this conclusion.)

38. The Department also considered subsequent enactments of sister statutes. Generally, "[c]ourts are permitted to consider subsequent legislation as evidence of the legislature's intent in construing a statute. Equity Corp. Holdings, Inc. v. Department of Banking and Finance, Division of Finance, 772

    So. 2d 588, 590 n.7 (Fla. 1st DCA 2000). Also, "[s]ubsequently enacted legislation may indicate the Legislature's intent to clarify the law rather than change it." G.E.L. Corporation v. Department of Environmental Protection, 875 So. 2d 1257, 1262-

    1263 n.2 (Fla. 5th DCA 2004).

    
    

39. In 1997, 1998, and 2003, while borrowing substantially from Section 376.3071(5)(b), the Legislature established notice provisions for the brownfield RBCA, drycleaning solvent RBCA, and global RBCA programs. In each statute, the Legislature expanded and expressly provided for the type of notice to be given, i.e., actual and constructive, and the class of persons to whom constructive notice shall be given, e.g., to residents and business tenants. §§ 376.81(1)(b), 376.3078(4)(b), and 376.30701(2)(b), Fla. Stat. In pursuing the adoption of the proposed rule, the Department believed that these subsequent

    amendments, and particularly the 2003 enactment of global RBCA, were evidence that the Legislature intended to clarify the meaning of Section 376.3071(5)(b)2.

40. The Department was aware of these statutory changes and was trying to "make sure they are consistent based upon the consistent law, and pursue them as one large rulemaking effort." (T 34). As such, the Department sought to include the same notification provisions in each rule for consistency. However, the Department also recognized the enabling authority for RBCA for petroleum contamination cleanups is not consistent with the enabling authority for RBCA cleanups for drycleaning solvents, brownfields, and global RBCA programs.

41. Each of these provisions (for the three programs) was enacted after Section 376.3071(5)(b)2. and presumably with knowledge of same. (In 2005, as originally filed, House Bill (HB) 937 incorporated the notice provisions of the proposed rules, but the final bill did not contain these proposed changes. Ch. 2005-50, Laws of Fla. Official recognition was taken of original HB 937, but no conclusion was reached as to its applicability. See Summary Final Order at 3.8)

42. "Like other administrative agencies, DEP 'is afforded wide discretion in the interpretation of a statute which it is given the power and duty to administer.'" Sullivan v. Florida Department of Environmental Protection, 890 So. 2d 417, 420

    (Fla. 1st DCA 2004)(citation omitted). Further, [i]f the agency's interpretation is within the range of possible and reasonable interpretations, it is not clearly erroneous and should be affirmed." Id. (citation omitted). See also Lakeland Regional Medical Center, Inc. v. State of Florida, Agency for Health Care Administration, Case No. 1D04-5585, at 7 (Fla. 1st DCA Jan. 6, 2006)("Although judicial adherence to the agency's view is not demanded when it is contrary to the statutes' plain meaning, an administrative agency's construction of a statute it administers should be accorded great deference unless there is clear error or conflict with the intent of the statute.").

43. Based on its experience with the Tallevast situation, the Department felt that notice to all affected property owners in case of the initial discovery of contamination and thereafter, including rehabilitation and the extension of the TPOC, would benefit the public, with little or no downside.

44. The Department also considered existing maxims/canons of statutory construction which ultimately led to an unreasonable interpretation of Section 376.3071(5)(b)2.

45. The Department desired to protect the public, by and through the required notice provisions at issue in the rule challenge. Nevertheless, "[a]n administrative rule is valid only if adopted under a proper delegation of legislative authority" and it follows "that the Legislature is free to

    define the standard for determining whether a rule is supported by legislative authority." Southwest Florida Water Management

    District v. Save the Manatee Club, Inc., 773 So. 2d 594, 598 (Fla. 1st DCA 2000)(citations omitted).

46. Here, there was no challenge to proposed Department rules which clarified the person responsible for giving notice and the type and manner of notice to be given. See proposed rule 62-770.220(3)(a)1.-5. The Department required additional notice to be sent every five years. See proposed rule 62- 770.220(4). Also, the determination to require constructive notice was not an impediment. In other words, the Department included several details omitted from Section 376.3071(5)(b)2. without enlarging this section.9

47. If the only issue here was whether the Department had a reasonable basis in law and fact when it interpreted solely Section 376.3071(5)(b)2. without regard for the subsequent amendments to sister statutes, this fee case would be decided in the Department's favor, for the main reason that this section is not clear and unambiguous.

48. However, over the course of almost seven years (1996- 2003), in the important arena of cleanup of contamination sites and, in particular, when the TPOC may be extended, the Legislature made policy decisions to require notice to a broader class of persons in three, subsequently enacted sister programs,

    and not in Section 376.3071(5)(b)2. This alone should have led the Department to conclude that the Legislature intended to limit the class of persons entitled to notice pursuant to Section 376.3071(5)(b)2. This is where the Department went awry and why the Department's interpretation of Subsection 376.3071(5) was unreasonable and ultimately resulted in the proposed rule being declared invalid.

49. The policy decision to limit the class of persons to whom notice must be given when the TPOC is extended was made by the Legislature and the proposed rule enlarged this policy decision beyond the expectations of Sections 120.52(8)(c) and 376.3071(5)(b)2. The Department's decision to adopt the proposed rule, while well intentioned, was not supported by a reasonable basis in law and fact.

ORDER

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

ORDERED that the Motion to Enforce Attorney’s Fees, as amended, is granted and Florida Petroleum is awarded $12,600.00 in attorney's fees.

DONE AND ORDERED this 19th day of January, 2006, in Tallahassee, Leon County, Florida.

S

CHARLES A. STAMPELOS

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 19th day of January, 2006.

ENDNOTES

1/ All citations are to the 2004 version of the Florida Statutes.

2/ The parties stipulated that the requested hourly rate of

$160.00, the 80 hours expended in support of the successful portion of the rule challenge, and the ultimate amount of

$12,600.00 for attorney's fees are reasonable.

3/ Proposed rule 62-770.220(3)(b) and (4) provided:

1. Subsequent Notice of Contamination Beyond Source Property Boundaries for Establishment of a Temporary Point of Compliance (TPOC) – Prior to the Department authorizing a temporary extension of the point of compliance beyond the boundary of the source property (i.e., the location from which the contamination originates) in conjunction with Natural Attenuation Monitoring pursuant to Rule 62-770.690, F.A.C., or Active Remediation pursuant to Rule 62-770.700, F.A.C., the PRSR hall provide the following notices:

   * * *

   
   

   (b) Constructive notice to residents [if different from the real property owner(s) notified pursuant to paragraph 62- 770.220(3)(a), F.A.C.] and business tenants of any real property into which the point of compliance is allowed to extend. Such constructive notice, which shall include the same information as required in the actual notice, shall be provided by complying with the following:

   
   

   * * *

   
   

2. Status Update 5-Year Notice – When utilizing a TPOC beyond the boundary of the source property to facilitate natural attenuation monitoring or active remediation, an additional notice concerning the status of the site rehabilitation shall be similarly provided every fine years to[the class of] those persons who received notice pursuant to subsection 62-770.220(3), F.A.C., unless in the intervening time, such persons have been informed that the contamination no longer affects the property into which the point of compliance was allowed to extend.

* * *

(The language in brackets was added pursuant to the Department’s Notice of Change and "those" was deleted.) The proposed rule purported to implement Section 376.3071, Florida Statutes. The specific authority for the proposed rule was Sections 376.303 and 376.3071, Florida Statutes.

4/ Department Exhibit 1 is a June 17, 2004, memorandum from Allan Bedwell, Deputy Secretary, Regulatory Programs and Energy, to Mr. Sole, who at the time was the Director, Division of Waste Management. Mr. Bedwell references the Tallevast situation and the 2003 enactment of global RBCA. He notes, in part, that the Department is drafting proposed rule 62-780 (global RBCA), which "will require responsible parties to survey all public wells within a half mile and private wells within a quarter mile of the contamination source; to notify those affected when

contaminants migrate onto their property; and to notify local governments with jurisdictions over the area. The rule will also require notification of affected parties once cleanup plans are developed for sites with off-site contamination. The experience at the American Berrylium site has underscored the need to put this rule in place without delay."

5/ At the time the Tallevast problem arose in and around May 2004, the Department had been engaged in rulemaking with respect to proposed revisions to Florida Administrative Code Chapter 62- 770, for approximately one year. The Department had already conducted a series of rule development workshops with respect to developing revisions to Chapter 62-770. These workshops were conducted jointly and in conjunction with rule development workshops for Chapters 62-780, 62-782, and 62-785.

On August 3, 2004, the Department conducted the sixth combined rule development workshop with respect to proposed revisions to Chapter 62-770. At this rule workshop, the Department presented the Workshop 6 Draft which reflected for the first time a new proposed rule 62-770.220(3), pertaining to notice requirements for the extension of the TPOC beyond the boundary of the source property. This draft provided for actual notice to local governments and to the record owners of any real property into which the TPOC was allowed to extend.

The Workshop 6 Draft also provided for constructive notice to residents and business tenants of any real property into which the TPOC was allowed to extend.

The Workshop 6 Draft also reflected for the first time a new proposed rule 62-770.220(6), pertaining to additional notice of the status of site rehabilitation. This proposed rule language provided that when "utilizing a TPOC beyond the boundary of the source property to facilitate natural attenuation monitoring or active remediation, an additional notice concerning the status of the site rehabilitation shall be similarly provided every five years to those persons . . . who received notice pursuant to subsection 62-770.220(3), F.A.C." The Department felt that the additional notice of the status of site rehabilitation addressed the concern that residents and business tenants may change during the interim and therefore be unaware of the existence of the contamination.

On October 8, 2004, the Department published on its internet web-site a Notice of Rule Development Workshop for Chapters 62- 713, 62-770, 62-777, 62-780, 62-782, and 62-785. Pursuant to

the notice, discussion at the combined rule workshop was to concentrate on "new notice requirements to be fulfilled when contamination has migrated into any medium beyond the boundary of the source property. The combined rule development workshop was scheduled for October 28, 2004.

On October 28, 2004, the Department conducted the seventh and final combined rule development workshop with respect to proposed revisions to Chapter 62-770. At this rule workshop, the Department presented the Workshop 7 Draft which carried forwarded the substance of the notice provisions originally proposed in the Workshop 6 Draft. Proposed rule 62- 770.220(3)(b) of the Workshop 7 Draft provided for constructive notice to residents and business tenants of any real property into which the TPOC was allowed to extend. Proposed rule 62- 770.220(4) of the Workshop 7 Draft also provided for a "Status Update 5-Year Notice" similar to the language in proposed rule 62-770.220(6) of the Workshop 6 Draft.

On December 7, 2004, the Environmental Regulation Commission (ERC) reviewed the Division of Waste Management's briefing package with respect to the status of the proposed revisions to Chapter 62-770. As part of the presentation, the ERC was provided a draft of proposed rule 62-770.220(3)(b) and (4).

The purpose of the briefing was to provide the ERC with as much information as possible prior to the ERC conducting the formal rule adoption hearing. At this meeting, there was discussion of the notice provisions in proposed rule 62- 770.220(2) as well as the constructive notice provisions in proposed rule 62-770.220(3)(b).

On December 23, 2004, the Department published a Notice of Proposed Rulemaking regarding the amendments to Chapter 62-770, including the proposed rule.

The December 23, 2004, the "Final Statement of Estimated Regulatory Cost For Proposed Revisions to: Chapter 62-770, F.A.C., Petroleum Contamination Cite Cleanup Criteria" stated in part: "The new notice requirements in Rule 62-770.220 received the largest share of comments. Many comments questioned the Department's statutory authority to impose these notice requirements and the practicality of meeting the notification deadlines in the workshop drafts. A more general comment was that the notification of the general population of the area, as opposed to notification of the owners of off-site contaminated property, would likely attract third party lawsuits. DEP has

addressed these concerns with further revisions of Rule 62- 770.220."

On February 2, 2005, the ERC held a public hearing on the proposed rules. Prior to the meeting, the Division of Waste Management provided the ERC with a rule adoption package which included proposed rule 62-770.220(3)(b) and (4). On February 2, 2005, the ERC approved the proposed rules with certain amendments.

6/ As the Department proceeded with the implementation of the directives in the Mr. Sole's memorandum dated June 17, 2004, see Endnote 4, there was debate and discussion within the agency as whether there was specific rulemaking authority to make the notice provisions consistent across all four waste cleanup programs. The Bureau of Petroleum Storage Systems consulted with the Department's Office of General Counsel with respect to the legal question of whether proposed rule 62-770.220(3)(b) and (4), were consistent with the provisions of Section 376.3071(5)(b)2.

Specifically, the Bureau consulted with Mr. Chisolm, the Deputy General Counsel for the Office of General Counsel's waste/air section. The waste/air section provides programmatic support for Division of Waste Management which includes the Bureau of Petroleum Storage Systems.

Mr. Chisolm researched the legal issue of whether the proposed rules were consistent with Section 376.3071(5)(b)2. This legal research included a review of Section 376.3071(5)(b), which provides specific authority for the Department to adopt criteria by rule for the purpose of determining, on a site- specific basis, the rehabilitation program tasks that comprise a site rehabilitation program. This statute also requires the Department to establish criteria by rule for determining, on a site specific basis, the level at which a rehabilitation program task and a site rehabilitation program may be deemed completed. Mr. Chisolm concluded that, as a matter of law, providing notice to individuals potentially affected by off-site contamination was an appropriate program tack within the legislative grant of specific rulemaking authority.

Mr. Chisolm considered the language of Section 376.3071(5)(b)2., which provides that the extension of a temporary point of compliance "shall include notice to local governments and owners of any property into which the point of compliance is allowed to extend." For Mr. Chisolm, the relevant issue of statutory interpretation was whether the language in

Section 376.3071(5)(b)2., as to actual notice was meant to limit as opposed to enlarge the class of persons entitled to notice.

Mr. Chisolm reasoned that the term "include" as used in the subsection was a term of expansion as opposed to limitation. Mr. Chisolm concluded that the subsection set forth the minimum requirements for actual notice in the event the Department proposed the extension of a TPOC.

Mr. Chisolm also examined the language of Section 376.81(1)(b), pertaining to the extension of a TPOC in the brownfields rehabilitation program; Section 376.3078(4)(b), pertaining to the extension of a TPOC in the drycleaning solvents cleanup program; and Section 376.30701(2)(b), pertaining to the extension of a TPOC in the global RBCA cleanup program. All three statutes were adopted subsequent to the adoption of Section 376.3071(5)(b)2. Each statute required actual notice to local governments as well as the owner of any real property into which the temporary point of compliance is allowed to extend. Each statute also required constructive notice to residents and business tenants of the real property into which the temporary point of compliance is allowed to extend.

Based on his review, Mr. Chisolm concluded that the subsequently adopted statutes reflected a maturation of knowledge and experience with respect to the implementation of the risk based corrective action cleanup programs. Mr. Chisolm did not interpret these more prescriptive statutes to place a limitation on the types of persons entitled to notice under Section 376.3071(5)(b)2. Thus, he interpreted Section 376.3071(5)(b)2. to establish "minimum requirements" for the temporary extension of the point of compliance.

Prior to the ERC rule adoption hearing, Mr. Chisolm formed the legal opinion that the proposed rules were not violative of Section 120.52(8)(c). Ultimately, the decision was reached that there was specific statutory authority for the Department to proceed with the rulemaking necessary to address the lessons learned from Tallevast.

7/ As a preliminary matter, the Department argues that Florida Petroleum is precluded from arguing that the Department did not have a reasonable basis in fact for the proposed rule because Florida Petroleum did not challenge the rule as being "arbitrary and capricious" under Section 120.52(8)(e), Florida Statutes.

The Department's argument is rejected. Under Section 120.595(2), once a proposed rule is determined to be an "invalid

exercise of delegated legislative authority" for any reason, the burden shifts to the agency to show either that "special circumstances" exist or that there was a "reasonable basis in law and fact" for the proposed rule in order to avoid an award of fees. There is no statutory requirement that a party, successful in a rule challenge proceeding, must prevail, in part or in whole, on a finding that the proposed rule was arbitrary or capricious, in order to receive an award of fees and costs.

8/ Although contrary authority exists, a reported failure in a subsequent legislative session to amend a statute in a certain way is of dubious assistance in determining legislative intent. See generally Duer v. Moore, 765 So. 2d 743, 745 (Fla. 1st DCA 2000). See also Day Cruise Association, Inc., 794 So. 2d at 704

n.8 and cases cited therein.

9/ It is expected that agency rules will not merely track the language of the implementing statute. Save the Manatee Club, Inc., 773 So. 2d at 599 ("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. Likewise, the use of the term 'interpret' suggests that a rule will be more detailed than the applicable enabling statute. There would be no need for interpretation if all of the details were contained in the statute itself.").

COPIES FURNISHED:

Robert D. Fingar, Esquire Frank & Gramling

3323-C Thomasville Road Tallahassee, Florida 32308

W. Douglas Beason, Esquire

Department of Environmental Protection Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

Lea Crandall, Agency Clerk

Department of Environmental Protection Douglas Building, Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

Greg Munson, General Counsel Department of Environmental Protection Mail Station 35

3900 Commonwealth Boulevard

Tallahassee, Florida 32399-3000

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 the original notice of appeal with the Clerk of the Division of Administrative Hearings and a 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: 05-002343F

Orders for Case No: 05-002343F