STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JACKSONVILLE MARITIME )

ASSOCIATION, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 77-977RX

)

FLORIDA BOARD OF PILOT )

COMMISSIONERS, )

)

Respondent, )

and )

) FLORIDA PILOTS ASSOCIATION, INC.,)

)

Intervenor. )

)

FINAL ORDER

This proceeding came before the undersigned Hearing Officer on the Petitioner's challenge to the validity of a rule adopted by the Florida Board of Pilot Commissioners, Respondent, pursuant to Section 120.56, F.S. Petitioner has challenged Rule 2155-3.04, Florida Administrative Code, which has been adopted by the Respondent and which deals with procedures for setting rates for pilotage within the ports of the state of Florida.

APPEARANCES

For Petitioner: Hal P. Dekle, Esquire

700 Barnett Bank Building Tallahassee, Florida

John LaCapra, Esquire

Suite 712, Barnett Bank Building Tallahassee, Florida

Gary A. Bubb, Esquire

1000 Barnett Bank Building Jacksonville, Florida

For Respondent: David A. Barrett, Esquire

216 South Duval Street Tallahassee, Florida

For Intervenor: Jacob Varn, Esquire

Post Office Box 3239 Tampa, Florida 33601

1. The Petitioner is an association composed of various business interests in the maritime industry. It represents steamship companies with respect to

   many different matters including labor negotiations, tariffs, rates and other matters affecting shipping in the Port of Jacksonville. Pilots of the Port of Jacksonville are associate members of the petitioning organization. The rule in question sets up procedural guidelines for the Florida State Board of Pilot Commissioners to follow when they change the rates of pilotage to be charged by licensed state pilots for each particular port. A copy of the rule in question is attached as an appendix to this order.

   
   

2. The Respondent objects to the standing of the Petitioner to maintain this proceeding and claims that Petitioner is not sufficiently affected by the rule in question to qualify for the requirements contained in Section 120.56,

   F.S. That statute states that any person substantially affected by an agency rule may petition for an administrative determination of that rule's invalidity.

   
   

3. The question therefor is whether the Petitioner is substantially affected by the rule in question. That in turn depends on the type of impact the rule has on the Petitioner and on others similarly situated. The rule in question outlines procedures for the establishment of rate changes among harbor pilots. Those rate changes have a definite economic affect on all parties in the maritime industry, either directly or indirectly. Therefore, it is determined that the Petitioner has adequate standing to be entitled to an administrative ruling on the validity of the rule in question.

   
   

4. The Petitioner challenges the validity of the rule on two grounds. The first is that inadequate notice was given of the adoption of this rule and secondly that the rule conflicts with Section 120.57, F.S.

   
   

5. When the rule was proposed the Respondent noticed the intention to adopt the rule in an appropriate issue of the Florida Administrative Weekly as required by Section 120.54, F.S. The Petitioner maintains that it is a distinctive organization which should have been particularly noticed under the requirements of Section 120.54(1)(a) which requires an agency to give notice "to those particular classes of persons to whom the intended action is directed".

   No such notice was given to the Petitioner prior to the adoption of the rule.

   
   

6. Although the Petitioner represents various interests in the shipping industry this hearing officer cannot say that the failure to particularly provide Petitioner with an individual notice of intention to adopt the rule in question is a fatal and material defect in the adoption of this rule.

   
   

7. The rule treats the change in pilotage rates as if it involves the adoption of an order by the Board of Pilot Commissioners. In separate paragraphs the rule outlines how applications for rate changes are filed with the Board, the holding of hearings and the subpoenaing of witnesses, the issuance of rate changes, and the conduct of hearings including the appointment of Hearing Officers by the Board. The rule in question implements Section

   310.151 which gives the Board the power to "fix rates of pilotage to be charged by licensed state pilots."

   
   

8. The Board has taken the position that the adoption of rates of pilotage is the entry of an order and not a rule as defined in Section 120.52, F.S. It is the opinion of this Hearing Officer that this is a crucial question in this determination for Chapter 120 requires different procedures for the adoption of rules and orders. Any rule adopted by the Board must not conflict with the requirements of Chapter 120.

   "Rule" as defined in section 120.52(14), F.S., is:

   "Each agency statement of general applicability that implements, interprets, or prescribes law or policy Agency orders are defined in Section 120.52(9) as:

   "A final agency decision which does not have the effect of a rule

   
   

9. All final agency decisions therefore are either rules or orders. Dept. of General Services v. Willis, 344 So.2d 580 (Fla. 1st DCA 1977).

   
   

10. The Board has assumed that the adoption of rates of pilotage is an order and not a rule. Rule 2155-3.04, F.A.C., treats changes in pilotage rates as if it were the adoption of an order. If the setting of pilotage rates is truly the adoption of an order then it is indisputable that Rule 2155-3.04, F.A.C., is partially invalid. Several parts of that rule conflict with the requirements for the adoption of an order as contained in Chapter 120. For example, Subsection (2) requires that applications for rate changes be heard and disposed of by the Board within 90 days after the date of application. A Board cannot adopt an order until all substantially affected persons have had an adequate opportunity to present evidence and testimony at an administrative hearing if so requested. Gadsden State Bank v. Lewis, So.2d (Fla. 1st DCA)(Case No, FF-227). This procedure may take more than 90 days and the Board cannot by rule shorten the time available for such a hearing.

    
    

11. Subsection (3) of the rule states that the Board shall fix the time and place for hearing. This conflicts with Section 120.57(1)(b)(3) which requires the concurrence of a Hearing Officer to set the matter for hearing.

    
    

12. Subsection (6) of the rule states that if the Board is satisfied after a hearing that a rate change is required it shall "without further notice issue its order granting in whole or in part the application." This conflicts with Section 120.53, F.S., which requires agencies to take action at regular schedule meetings for which agendas are prepared and notice is given in the same manner as required for rule making.

    
    

13. Finally, Subsection (8) of the rule permits the Board to appoint Hearing Officers to conduct administrative hearings. The Board is an agency within the Department of Professional and Occupational Regulation and is specifically forbidden to conduct formal proceedings under Section 120.57 except by using a Hearing Officer of the Division of Administrative Hearings. The Board may conduct informal proceedings under Section 120.57(2), but the rule in question makes no such distinction, Winslow v. Bd. of Med. Examiners, So.2d (Fla. 1st DCA 1977)(Case No. FF-97). On the face of the rule it applies to all proceedings under Section 120.57; this is in conflict with the statute.

    
    

14. As can be seen by the above, the rule in question conflicts with many of the requirements in Chapter 120 regarding the adoption of an order. If setting harbor pilot rates results in the entry of an order and not a rule, then the rule in question has several defects. No rule may validly conflict with a statute. Dept. of Transportation v. Pan American Construction Co., 338 So.2d 1291 (Fla. 1st DCA 1976).

    
    

15. However, if the setting of these rates is actually the adoption of a rule and not an order, different requirements in Chapter 120 would apply. The standards for rule making and the entry of an order are quite different in many

    respects. After reviewing the evidence presented in this proceeding and considering the applicable statutory requirements and the briefs submitted by the parties it is the conclusion of this Hearing Officer that the setting of pilotage rates by the Board results in the adoption of a rule, not an order. When the Board issues changes in rates it is issuing an agency statement which is of general applicability and which implements a statute. The rate adopted applies to all pilots in each particular port. Although different rates are adopted for the various ports throughout the state, it does not defeat the definition of a rule merely because the agency statement applies to a particular geographic area. See City of Key West v. Askew, 324 So.2d 655 (Fla. 1st DCA 1975). Postal Colony, Inc. v. Askew, So.2d, (Fla. 1st DCA 1977)(Case No. Z-171). All harbor pilots that navigate vessels throughout the ports of this state are required to charge the rates set by the pilot commissioners, according to Section 310.151, F.S.

    
    

16. The rates then have the force of law and fit the definition of a rule as found in Chapter 120, F.S. To be valid, the actual rates must be adopted as rules pursuant to Section 120.54, F.S. Straughn v. O'Riordan, 338 So.2d 832 (Fla. 1976). The Board and the statute in question require the payment of a particular rate to each harbor pilot. When the agency adopts such a requirement it is making a policy statement that a particular rate is fair and appropriate. This does not materially differ from the situation in Straughn v. 0'Riordan, supra, where the Department of Revenue had a policy to require applicants for sale tax exemptions to post a bond. In that case the Supreme Court determined that such a policy was a rule and was invalid until it had been formally adopted as a rule.

    
    

17. Although rate changes are implemented on the application of a harbor pilot, there is a great distinction between this proceeding and a typical adjudicative proceeding. Normally, where a person applies to an agency for their receipt of a benefit the agency issues an order granting or denying the request. At first impression that appears to be what occurs when the Board changes pilotage rates. But the distinctive difference in this proceeding is that when the Board acts on the request it issues a determination that applies to the rates of all pilots in a port. The action of the Board has uniform application within each port. The adoption of such rates is an across-the-board regulation. This type of agency action is rule making, not adjudication.

    
    

18. In Polar Ice Cream Company v. Andrews, 147 So.2d 609 (Fla. 1st DCA 1962) and in Meiklejohn v. American Distributors, 210 So.2d 259 (Fla 1st DCA 1968) the court stated that a "rule" uniformly applies to members of the public or to other interested parties that came within the agency's jurisdiction. An "order" applied to only the parties before the agency in a particular proceeding. Under the definition in the present Chapter 120, the distinction described in the above two cases still appears to be valid,

    
    

19. Therefore, the validity of the rule in question must be examined in comparison with the statutory requirements for the adoption of an administrative rule. After examining the rule in question it does not appear in any manner to violate the statutory requirements for the adoption of an administrative rule. Unlike proceedings for the adoption of orders, agencies may preside over and conduct whatever hearings are required for the adoption of rules. Therefore, the requirements for such hearings as contained in Rule 2155-3.04, F.A.C., are valid even if they were adopted under the mistaken assumption that said proceedings were for the adoption of an order. Although the actual rate changes themselves, which have herein been determined to be rules, are not challenged in this proceeding, it is apparent that any rate adopted by the Board not ` in

    accordance with Section 120.54, F.S., which deals with rule making, is invalid. Straughn v. 0'Riordan, supra.

    
    

20. The distinctions between rules and orders is a basic and fundamental concept of the Administrative Procedure Act. Since all agency action is divided into these two categories it is imperative that the differences between these concepts do not become confused. Otherwise, the agency action will be reviewed under the requirements of laws which do not apply to such actions.

    
    

21. Under the rationale of McDonald v. Div. of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977), the undersigned Hearing Officer suggests that the Florida Board of Pilot Commissioners reevaluate its present proceedings and policies to determine whether its other rules and policies conform to the requirements of Chapter 120 consistent with the concept that the adoption of rates of pilotage involves the adoption of a rule, not an order.

In all other respects, the petition is denied.

DONE and ORDERED this 10th day of August, 1977, in Tallahassee, Florida.

KENNETH G. OERTEL, Director

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Hal P. Dekle, Esquire

700 Barnett Bank Building Tallahassee, Florida 32304

John LaCapra, Esquire

712 Barnett Bank Building Tallahassee, Florida

Gary A. Bubb, Esquire

1000 Barnett Bank Building Jacksonville, Florida

David A. Barrett, Esquire

215 South Duval Street Tallahassee, Florida 32034

Jacob Varn, Esquire

1. Box 3239

   Tampa, Florida 33601

   APPENDIX A

   
   

   Rule Section 21SS-3.04

   Florida Administrative Code 21AA-3.04 Rate Change

   1. Application for rate changes must be filed in writing with the Board at its administrative office in Tallahassee, Leon County, Florida and must include: a financial statement of the licensed state pilot, licensed state pilots or association making application including a profit and loss statement and a balance sheet prepared by a certified public accountant at the expense of the licensed state pilots or association submitting the application. Such profit and loss statement shall be prepared for a twenty-four month period, immediately preceding the month in which the application for rate change is filed and shall include all pilotage earned while subject to the authority of the Florida State Board of Pilot Commissioners as granted by the Congress of the United States to the State of Florida. There shall also be submitted an estimate of any additional expenses necessary for maintaining an efficient reliable and safe pilotage service as required by Florida Statutes Chapter 310.151(3)(d), including the projected costs of renewal and replacement of piloting equipment.

      
      

   2. All applications shall be heard and disposed of by the Board within 90 days after the date upon which they were received by the Board, unless said time is extended by the Board at the request of the applicant.

      
      

   3. The time and place of said hearing shall be fixed by the Board and shall be noticed as required by Chapter 120, Florida Statutes.

      
      

   4. For the purpose of the hearing upon application for rate change, the Board shall have the power, under the hand of the President, Vice President or Secretary, and the seal of the Board to require the production of books, papers or other documents and may issue subpoenas to compel the applicants or witnesses to testify and produce such books papers, or other documents in their possession as may be in the opinion of the Board, relevant to any hearing before it; said subpoenas to be served by the sheriff of the county where the witness resides or may be found, or any other person authorized by statutes or court rule for service of process. Such witnesses shall be entitled to the per diem and mileage as authorized by law. Any member of the Board may administer oaths or affirmation to witnesses appearing before the Board. Subpoenas may also be issued for and in behalf of the applicant.

      
      

   5. If any person shall refuse to obey any subpoena so issued or shall refuse to testify or produce any books, papers or other documents required by the Board, the Board may present its petition to enforce compliance to the circuit court of the county where any such person is served with the subpoena or where resides setting forth the facts and shall deposit with said court when such subpoena is issued in its behalf, the per diem and mileage to secure the attendance of such witness (the applicant may make like deposits).

      
      

   6. If at the hearing upon application for a rate change, the Board shall be satisfied from the evidence and proof submitted that a rate change is required, it shall thereupon without further notice issue its order granting in whole or in part the application of denying the application of denying the

      application. The records of the Board shall reflect the action of the Board upon the application.

      
      

   7. The Board shall preserve a record of such proceedings in a similar manner as records in court proceedings are kept and preserved in the circuit courts of this State.

      
      

   8. All hearings upon application for a rate change, shall be presided over by the Board or a hearing officer who shall be a member of the Board. The Board may designate one of its members to conduct an administrative hearing who shall be known as the hearing officer. The hearing officer shall submit a written report containing his findings of fact and recommended action to the Board. All parties to the proceeding shall have ten days within which to submit exceptions to a hearing officer's findings of fact and recommended action. The Board shall consider the report and thereupon issue its final order.

Specific Authority 310.091(4), 120.53(1) F.S. Law Implemented 120.53(1),

310.51, 120.58 F.S. History--New 1-19-77, Amended 5-4-77.

Docket for Case No: 77-000977RX

Orders for Case No: 77-000977RX