STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
ALICE P. and SUSAN A., )
Individually and behalf of all ) others similarly situated, )
)
Petitioners, )
)
JEANNETTE R.; ) CASE NO. 77-1974RP JACKSONVILLE WOMEN'S HEALTH )
ORGANIZATION, INC., and CENTRAL ) FLORIDA WOMEN'S HEALTH )
ORGANIZATION, INC., )
)
Intervenors, )
)
vs. )
)
DEPARTMENT OF HEALTH AND )
REHABILITATIVE SERVICES, )
)
Respondent. )
)
FINAL ORDER
By this proceeding proposed rules of the Department of Health and Rehabilitative Services are sought to be declared invalid pursuant to Section 120,54(4), F.S.
APPEARANCES
For Petitioners: Terry L. DeMeo, Esquire
Jerry Traynham, Esquire Ben Patterson, Esquire
For Intervenors: Frank Susman, Esquire For Respondent: George Waas, Esquire
The original petition filed on behalf of Alice P. and Susan A. challenges the validity of proposed amendments to Rules 10C-7.38 and 10C-7.39, Florida Administrative Code, of the Department of Health and Rehabilitative Services, which deal with payment for Physician Services under the Medicaid Services Program. The department proposes to amend the above rules to limit payments for abortions to instances where "the attending physician certifies the abortion is necessary because the life of the mother would be endangered if the fetus were carried to term or if the procedure is necessary to terminate an ectopic pregnancy."
The Petition is this proceeding was later amended to include two individuals denominated as Jane Doe and Janet Woe and Samual J. Barr, M.D. In
addition the Jacksonville Women's Health Organization, Inc. and Central Florida Women's Health Organization, Inc. were permitted to intervene. The Department of Health and Rehabilitative Services objected to having Petitioners proceed under assumed names. This, the department claimed, prevented them from being able to pursue discovery as to the adequancy of the Petitioners' standing.
After hearing all the testimony in this proceeding it is the determination of this Hearing Officer that all women of childbearing age who are Medicaid recipients are substantially affected by the proposed rule and have adequate standing to challenge it pursuant to Chapter 120, F.S. Since that class of women is apparently numbered in the thousands and the Petitioners who did testify in this proceeding adequately demonstrated such standing it can be seen the Respondent was not in any manner prejudice by allowing several parties to proceed under assumed names to protect their identity.
The Respondent also objected to permitting additional parties to join this proceeding after fourteen (14) days had elapsed since the publication of its notice of intention to adopt said rules in the Florida Administrative Weekly. Although Section 120.54(4)(b), F.S., requires that requests for determinations under that subsection be filed within fourteen (14) days after the publication of this notice, it is also clear that subsection (d) of that section specifically permits other substantially affected persons to join the proceedings "as parties or intervenors on appropriate terms which will not substantially delay the proceeding." It seems clear therefore that an intervenor to this proceeding need not petition to become party only within the fourteen (14) day time period after the filing of the original petition. It is also apparent that doctors who are providers of medical services are substantially affected by the proposed rules.
This matter went to final hearing on November 29, 1977, at which time evidence and argument was heard on behalf of all parties. After the hearing was adjourned the parties were given approximately ten (10) days to file proposed findings and other argument which they consider to be relevant to this proceeding.
The Petitioners challenge the proposed rule amendments on the following grounds:
That the rule attempts to restrict a payment for services already authorized by the legislature in the current appropriations bill and therefore is contrary to Florida Statutes;
That the department prepared a faulty Economic Impact Statement as required by Section 120.54(4), F.S.;
That the rules are arbitrary, vague and impose an impossible standard; and
That the rules otherwise do not comply with the requirements of law.
Since these issues are separate and unrelated they will be considered individually.
The Withholding of Federal Funds.
The Department of Health and Rehabilitative Services seeks to amend the above rules in response to action taken by the federal government. In the summer
of this year the federal government cut off federal funds which were previously paid to Medicaid recipients for non-therapeutic abortions. Prior to that the federal government had been sharing expenses with the state for this Medicaid Program which is administered by the Respondent, Department of Health and Rehabilitative Services. The cutting off of federal funds precipitated the rule changes which are the subject of this proceeding. The present rule permits payments by the department for a host of treatments under the Physician Services account, including non-therapeutic abortions.
The department maintains that is has no choice but to stop payments on non-therapeutic abortions when the federal government cuts off its share of such funding. According to the Respondent, the funds for Physician Services which were approved by the legislature in the appropriations bill for the Department of Health and Rehabilitative Services was passed as a joint expenditure with the federal and state government both participating in the payment of all covered expenses.. Thus, argues the Respondent, when the federal government withholds payments for a particular service the state is obligated to eliminate such service.
Article 3, Section 12 of the Florida Constitution provides: "Laws making appropriations for salaries of
public officers and other current expenses of the state shall contain provisions on no other subject."
This part of Florida's constitution was interpreted in Dickinson v. Stone, 251 So.2d 268 (Fla. 1971), where the Supreme Court indicated that in certain situations appropriations may be made on a contingent basis, but such contingency must be specifically spelled out in the appropriation. In this proceeding the department maintains that the expenditure of state funds for the payment of non-therapeutic abortions is contingent upon the availability of federal funds for this purpose. Apparently, nowhere in Florida's legislative budgetary enactment is any such contingency contained or expressed. Therefore, the department's position is actually a presumption based upon an inference.
However, what is certain is that the legislature appropriated funds for Medicaid recipients to be used toward all "Physician Services", of which the performance of abortions is but one of many types of medical procedures which have been reimbursable. Without an express statement in the budgetary enactment that such funds are to be disbursed contingent upon the availability of matching federal funds the department's position is not consistent with state law. As the Supreme Court stated in Dickinson v. State, supra,
"It is a violation of an elemental principle in the administration of public funds for one who is charged with the trust of their proper expenditure not to apply those finds to the purposes for which they are raised."
If the legislature had intended to make the expenditure of funds it specifically appropriated contingent upon the availability of matching federal funds it must specifically express its intention in the budgetary enactment. No evidence was presented at this hearing that the legislature had done so with regard to the Physician Services account although express contingencies appear in other parts of the state budget. Since the legislature did not do so the
Department of Health and Rehabilitative Services may not impound funds which have been raised and appropriated.
The Economic Impact Statement.
As a part of its rule adoption proceeding the department prepared an Economic Impact Statement as is required by Section 120.54(2)(a), F.S. The Economic Impact Statement was submitted into the record as Petitioners' Exhibit No. 4. The statement prepared by the department concluded that the adoption of the proposed rules would require no additional expenditures of state funds, would result in a savings of somewhat over $500,000 to the state and would have no other determinable economic impact.
The Economic Impact Statement was prepared by Michael Morton, a social and economic services program consultant of the department. Mr. Morton had no prior training in statistics or economics. He used no outside references, no sources of information or data, nor did he consult any other knowledgeable workers in this area. Although the department of Health and Rehabilitative Services has a statistical section which is at the same location as Mr. Morton's office he did not consult with anyone in that section before he prepared the Economic Impact Statement.
Mr. Morton testified that he read Section 120.54(2), F.S., which deals with the preparation of Economic Impact Statements and although he believes he understood the requirements of the statute he was generally unfamiliar with the meaning of several terms used in the law. For example, he stated he thought he understood what "professionally accepted methodology" was, but he was unaware if there were any standards which could be used for such a statement as he was required to prepare or what those standards were.
After reviewing the evidence presented it is evident that the department's Economic Impact Statement does not comply with any of the statutory requirements. Not only did the department make no effort to seek available data which might aid in a projection of the consequences of its proposed action, but the conclusions reached by the department are totally invalid.
As even William Page, Secretary of the Department of Health and Rehabilitative Services, testified, the cutting off of funds for abortions for Medicaid recipients will undoubtedly result in an increased birth rate among those recipients. That will require the expenditure of funds for the actual birth itself and will further require additional monthly assistance payments for those families. No attempt was made by the department to evaluate the statistical probabilities or consequences which would attend those events. It is entirely conceivable, as Secretary Page testified, that the failure of the state to fund non-therapeutic abortions to Medicaid recipients would actually result in greater state expenditures when one considers that the state will reimburse the provider for the birth of a child and become responsible for monthly maintenance payments. Although this is recognized by the head of the department, the department's Economic Impact Statement does not mention this as a possible economic consequence of its proposed action. Without belaboring the point it is sufficient to say that the department's Economic Impact Statement is inaccurate, incomplete and in complete contradiction with the requirements of Section 120.54(2)(a), F.S.
The First District Court of Appeal has considered the question of the failure of an agency to comply with the requirements for the preparation of an Economic Impact Statement in rule adoption proceedings. In DER v. Leon County,
344 So.2d 297 (Fla 1st DCA 1977) it is concluded that this requirement is a material aspect of the rule adoption proceeding and the failure of an agency to comply with the statutory requirements will render the rule adoption proceedings invalid. For this reason alone the department's proposed rules must be declared invalid.
The purpose of having an agency prepare an Economic Impact Statement in conjunction with rule adoption proceedings is to require it to intelligently understand the consequences of its actions. The law requires an intelligent and thorough study of the probable long and short term consequences. The obvious intention of this design is to prevent the agency from operating in a vacuum and to avoid unforeseen events which might occur when the agency acts in partial ignorance of who is affected by its actions. In this situation the department not only did not attempt to gather relevant data as required by law but it did not even inquire as to what data was already available.
The Respondent, Department of Health and Rehabilitative Services has presented a position that unless it can have been shown to have intentionally failed to prepare an adequate statement it has complied with the statute. But the department's intentions are irrelevant to a determination of the adequacy or accuracy of the Economic Impact Statement. The department has failed to comply with an essential requirement for the lawful adoption of a rule.
For whatever reason, this jeopardizes the validity of the action it seeks to achieve, regardless of the department's good intentions.
The Vagueness Issue.
The Petitioners also allege that the proposed rule change seeks to impose a standard that is so vague and arbitrary that it defies rational or reasonable interpretation and is therefore invalid.
Two witnesses, both medical doctors who specialize in obstetrics and gynecology, were called by the Petitioners. Both doctors have substantial experience in performing abortions. The rule in question seeks to deny Medicaid payments for abortions "except when the attending physician certifies the abortion as necessary because the life of the mother would be endangered. . ." The witnesses testified that pregnancy itself to some degree endangers the life of the mother and that in addition to the inherent dangers of the pregnancy itself there often arise many intervening situations which further jeopardize the life of the expectant mother. Thus, according to the witnesses it is impossible to comply with the proposed rule without resorting to guess work as to which procedures will eventually be reimbursable and which will be considered to be excluded under the proposed rule.
After considering the evidence and argument on this issue it is the decision of the undersigned Hearing Officer that the rules do not impose an impossible standard. Although it certainly opens the door to arguments of almost a metaphysical nature, it is the opinion of the undersigned the rules apply a standard that is capable of reasonable interpretation.
The Florida Supreme Court in Walsingham v. State, 250 So.2d 857 (Fla. 1971) struck down language in the Florida Statutes similar to the rule in question as being impermissibly vague, but that case dealt with a criminal charge of conspiracy to commit abortion. The standard of the statute which charges a crime is necessarily higher than that for a rule which only limits reimbursement. Similarly, in State v. Baruet 262 So.2d 431 (Fla. 1972) a
similar result was reached, but also in an appeal from an order from a criminal court.
The rule in question here does not proscribe conduct. It sets a standard which determines which medical procedures will be reimbursed for Medicaid recipients. Unquestionably, the standard will be a difficult one with which to comply, however, the state has a right to limit assistance payments.
Other Allegations of Illegality.
The Petitioners have raised numerous other grounds in their combined objections to the proposed rules. Without considering them separately in this order it is sufficient to state that these remaining allegations which include lack of notice, failure to submit the rules to a review board, conflict with the Social Security Act are either not supported in the record or are without merit.
In addition, the undersigned Hearing Officer has reviewed all the proposed findings submitted by the Petitioners and the Respondent. Those proposed findings which are not resolved in this order have been found to be either without merit or wholly irrelevant.
CONCLUSION
For the above reason it is ORDERED:
That the proposed rules 10C-7.38 and 10C-7.39 as amended by the Department of Health and Rehabilitative Services are invalid.
DONE and ORDERED this 23rd day of December, 1977 in Tallahassee, Florida.
KENNETH G. OERTEL, Director
Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304
(904) 488-9675
COPIES FURNISHED:
Terry L. DeMeo, Esquire 7210 Red Road
South Miami, Florida 33143
Jerry Traynham, Esquire Ben Patterson, Esquire 1215 Thomasville Road
Tallahassee, Florida 32303
Frank Susman, Esquire 7733 Forsyth Boulevard
Suite 1100
St. Louis, Missouri 63105
George Waas, Esquire Dept. of Health and
Rehabilitative Services 1323 Winewood Boulevard
Tallahassee, Florida 32301
Carroll Webb, Executive Director Administrative Procedure Committee Room 110, Holland Building Tallahassee, Florida 32304
Ms. Liz Cloud Department of State
403 East Gaines Street Tallahassee, Florida 32304
================================================================= DISTRICT COURT OPINION
=================================================================
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
STATE OF FLORIDA DEPARTMENT NOT FINAL UNTIL TIME EXPIRES TO OF HEALTH AND REHABILITATIVE FILE MOTION FOR REHEARING AND SERVICES, DISPOSITION THEREOF IF FILED.
Petitioner,
vs. CASE NO. II-259
DOAH CASE NO. 77-1974RP
ALICE P., SUSAN A., JEANNETTE R., SAMUEL BARR, M.D., and JACKSONVILLE WOMAN'S HEALTH ORGANIZATION, INC., and CENTRAL FLORIDA WOMEN'S HEALTH ORGANIZATION, INC.,
Respondents.
/
Opinion filed January 30, 1979.
A Petition for Review, original jurisdiction.
George L. Waas and Charles T. Collette; and Kenneth G. Oertel, for Petitioner.
Terry L. DeMeo; Jerry Traynham and Ben Patterson; and Frank Susman, for Respondents.
BOYER, Acting Chief Judge,
By Petition for Review pursuant to F.S. 120.68 and Rule 4.5(c) Fla. App.
R., the State of Florida Department of Health and Rehabilitative Services (hereinafter referred to as the Department) seeks review of a Final Order issued by a hearing officer of the Division of Administrative Hearings. Numerous points and sub-points are posed for our consideration. For clarity we will depart from our customary format of opinions and state the issues as we consider them following a recitation of the essential facts, which are not in dispute.
The Department administers the Medicaid program for the State of Florida pursuant to F.S. 409.266 and Chapters 10C-7 and 10C-8 of the Florida Administrative Code. (F.A.C.) That program is jointly funded by state and federal funds. Under the program, the Department makes payments for physicians' services and for inpatient hospital services rendered to Medicaid recipients.
Rules 10C-7.38 and 10C-7.39, F.A.C., are the Department's rules which describe physicians' services and inpatient services, respectively.
As a result of actions taken by the federal government federal funds for elective non-therapeutic abortions were terminated in the summer of 1977 and the Department subsequently received no federal funds to pay for such abortions.
Federal funds thereafter could only be used to pay for Medicaid abortions when "the attending physician certifies the abortion is necessary because the life of the mother would be endangered if the fetus were carried to term or if the procedure is necessary to terminate an ectopic pregnancy."
In an effort to harmonize its rules with the changes made by the federal government, the petitioner promulgated emergency rules on or about September 1, 1977, and initiated proceedings for the adoption of permanent rules by publishing a notice of proposed amendments to the subject rules on October 14, 1977.
A petition was thereupon filed pursuant to F.S. 120.54(4) on behalf of Alice P. and Susan A., individually and as representatives of a class on October 28, 1977, 14 days after publication of the notice, asserting in part that the proposed amendments constituted an impoundment of funds appropriated by the Legislature and that the notice of the summary of the estimate of economic impact was incorrect or erroneous.
The Department moved to dismiss the petition on the grounds of lack of standing and the unavailability of class actions in an F.S. 120.54(3) proceeding.
At a pre-hearing conference, the hearing officer denied the motion to dismiss as to standing, reserved ruling as to the motion to dismiss the class action and set the hearing date for November 30, 1977.
On or about November 13, 1977, a petition for intervention on behalf of Jacksonville Women's Health Organization, Inc., and Central Florida Women's Health Organization, Inc., and similarly situated providers was filed. That petition was filed by an out-of-state attorney not admitted to The Florida Bar and not then associated as co-counsel with a member of The Florida Bar.
On or about November 17, 1977, an amended petition was filed on behalf of anonymous petitioners Jane Doe and Janet Woe and petitioner Samuel J. Barr, M.D., together with a motion for leave to amend.
The Department opposed the petition for intervention by the corporate intervenors on the grounds that it expanded the issues presented in the original petition and was filed by an out-of-state lawyer contrary to Fla. R. Civ. P.
1.030. The Department also opposed the amended petition on the grounds that, as to Barr, the amended petition raised new issues and established a new cause of action and, as to Jane Doe and Janet Woe, the amended petition failed to demonstrate adequate statutory standing and the process was insufficient.
On or about November 23, 1977, Jeannette R. sought to intervene. On the same day, the other anonymous petitioners (Alice P., Susan A., Jane Doe and Janet Woe) moved for a protective order or partial in camera inspection to prevent their identities from become public record in an administrative hearing.
Based upon Alice P. and Susan A.'s response to the Department's first set of interrogatories that they were no longer pregnant, the Department again moved to dismiss the original petition premised upon a demonstrable lack of standing in that, not being pregnant, they could not challenge the proposed amendments to the subject rules. On the same day (November 28, 1977--two days before the scheduled hearing), the Department moved in opposition to the motion for protective order or partial in camera proceedings on the ground that, among others, a hearing officer has no authority to seal public records and moved to dismiss Jeannette R.'s petition for lack of standing and untimeliness, urging the inequity of multiple filings on behalf of anonymous petitioners and others seeking to expand the issues beyond the original petition.
A second pre-hearing conference was held on November 30, 1977. Although counsel for the anonymous petitioners admitted that the purpose of the amended petition was "to include some expanded allegations and two new parties," the hearing officer stated that he was not concerned with the technicalities of standing but was "interested in reaching the merits in this case." To that end, the hearing officer ruled that "any woman of childbearing age and regardless of whether they are pregnant or not entitles them to pursue this action." However, he subsequently amended his finding to embrace only "women of childbearing age who are Medicaid recipients."
The Department's motion to dismiss on the grounds that anonymous petitioner Alice P. and Susan A. had procured abortions, thereby vitiating any claim of standing, and that an inadequate petition cannot be revised by subsequent untimely filed pleadings was denied. During the hearing, Alice P., was dismissed as a party without evidence having been adduced regarding her standing.
At the final hearing, Jeannette R. and Janet Woe stated that they were pregnant Medicaid recipients. Both had attempted to use their Medicaid benefits to obtain desired abortions, but were denied them because of the funding cutoff.
Respondent Dr. Samuel Barr, testified generally about the effects of the Medicaid abortion ban from his perspective as a provider and as a physician.
Michael Morton, who prepared the Department's Economic Impact Statement, testified concerning his qualifications to properly prepare such a study and his understanding of the meaning of the statute. He testified concerning how he prepared the statement, and that, in his opinion, the statute was impossible for any one to comply with.
Dr. Howard Gitlow, a statistician from the University of Miami who specializes in research in the economics of abortion, explained the technical requirements of the statute. He testified as to those respects in which the Department's statement did not comply with the statutory requirements, and concluded that the Department's statement was very poor.
On December 23, 1977, the hearing officer issued the Final Order here sought to be reviewed invalidating the Department's proposed amendments to Rule Sections 10C-7.38 and 10C-7.39, Florida Administrative Code (F.A.C.), on the grounds that the proposed amendments constituted an impoundment of legislatively appropriated funds and the Department's economic impact statement was inadequate and incomplete.
The Department phrases the points argued in its briefs as follows:
I.
WHETHER THE HEARING OFFICER ERRED IN EXERCISING JURISDICTION AS TO A PETITION CHALLENGING PROPOSED AMENDMENTS TO RULES UNDER SECTION 120.54(4), F.S., FILED BY FICTITIOUS PETITIONERS, ALICE P. AND SUSAN A., WHO COULD NOT DEMONSTRATE STANDING WITHIN THE STATUTORY 14-DAY TIME LIMIT IN WHICH TO CHALLENGE A PROPOSED RULE.
II.
WHETHER THE HEARING OFFICER ERRED IN EXERCISING JURISDICTION AS TO PETITIONS FILED AFTER THE PASSING OF THE 14-DAY TIME LIMIT WHEN THESE PETITIONS RAISE NEW ISSUES AND FICTITIOUS PETITIONERS-INTERVENORS CANNOT AND DO NOT DEMONSTRATE STANDING.
III.
WHETHER THE HEARING OFFICER ERRED IN CONFERRING STANDING UPON FEMALE MEDICAID RECIPIENTS OF CHILDBEARING AGE WHEN THE CHALLENGED PROPOSED AMENDMENTS DEAL EXCLUSIVELY WITH TERMINATION OF FUNDS FOR ELECTIVE ABORTIONS.
IV.
WHETHER THE HEARING OFFICER ERRED IN ALLOWING THIS CASE TO PROCEED AS A CLASS ACTION
V.
WHETHER THE HEARING OFFICER ERRED IN RULING THAT THE DEPARTMENT'S PROPOSED AMENDMENTS
CANNOT BE PROMULGATED UNDER ANY CIRCUMSTANCES BECAUSE THESE AMENDMENTS CONSTITUTE THE IMPOUNDMENT OF LEGISLATIVELY APPROPRIATED FUNDS.
VI.
WHETHER THE HEARING OFFICER ERRED IN RESTRICTING THE DEPARTMENT'S EXAMINATION AS TO THE VALID AVAILABLE DEFENSE OF CHAMPERTY AND MAINTENANCE.
VII.
WHETHER THE HEARING OFFICER ERRED IN DECLARING INVALID THE DEPARTMENT'S ECONOMIC IMPACT STATEMENTS WHEN THE CHALLENGE THERETO WAS NOT CONTAINED IN THE ORIGINAL PETITION AND THE DEPARTMENT FOLLOWED THE COMMANDS OF SECTION 120.54(2), F.S.
We do not find it necessary to consider the points in the order presented. As to class action status, we hold that a proposed rule challenge is not,
under Florida law, a proper proceeding for the maintenance of a class action.
In Cordell v. World Ins. Co., 355 So.2d 479 (Fla. 1st DCA 1978), we discussed the requisites of a class action and there referred to the leading Florida cases on the subject, quoting from Harrell v. Hess Oil and Chemical Corporation, 287 So.2d 291 (Fla. 1973) in which the Supreme Court of Florida succinctly summarized the requisites of a class action, citing Port Royal, Inc.
v. Conboy, 154 So.2d 734 (Fla. 2nd DCA 1963), as follows:
"The standards which must be met in order properly to plead a class action have been stated many times, but are perhaps set out best in Port Royal, Inc. v. Conboy, 154 So.2d 734 (Fla. App.2d 1963). As noted there, a complaint in a class action suit must:
"(1) show the necessity for bringing the action as a class suit;
"(2) show plaintiff's right to represent the class;
"(3) allege that plaintiff brought suit
on behalf of himself and all others similarly situated;
"(4) allege the existence of a class, described with some degree of certainty;
"(5) allege that the members of the class were so numerous as to make it impracticable to bring them all before the court;
"(6) make it clear that plaintiff adequately represents the class; and
"(7) show that the interests of the plaintiff were co-extensive with the interests of the other members of the class." (Harrell v. Hess Oil and Chemical Corporation, 287 So.2d 291, 293-294 (Fla.
1973) (355 So.2d at page 480)
Sub judice, neither the original petition filed by the anonymous complainants, the amendments thereto nor the subsequent proceedings properly complied with standards (1), (2), (4), (6), nor (7) as above quoted. Indeed, it is obviously impossible in a proposed rule challenge proceeding to ever comply with standard (1), viz: Show the necessity for bringing the action as a class suit.
In an administrative proceeding wherein a proposed rule is challenged, if a single challenger successfully attacks the proposed rule then it does not become operational as to any other person similarly situated. Accordingly, there is simply no necessity for a class action. An agency may not enforce an invalid rule as to any person substantially affected by it even if the successful challenger is a single individual.
Whether or not a rule adopted following an unsuccessful challenge during the adoption process may be subsequently challenged by the unsuccessful challenger after adoption, or by others similarly situated or similarly interested or affected, is not an issue here presented and will not therefore be addressed by us. (But see State Department of Health, etc. v. Barr, 359 So.2d 503, (Fla. 1st DCA 1978).
Addressing the point relative to champerty and maintenance, we note the holding of the Supreme Court of Florida in Cone v. Benjamin, 27 So.2d 90 (Fla. 1946), wherein the court stated:
"The general rule seems to be that a suit will be dismissed because of champerty only when the champertous assignment or other champertous contract is the basis of plaintiff's claim and is directly involved in the action, and not when the champertous contract is one between the plaintiff and his attorney, collateral in its nature, and which in no wise affects the obligation of the defendant to the plaintiff. It is the champertous contract which is void, and the right of action of the plaintiff is not affected thereby, but must stand or fall upon its own merits or demerits. See 14 C.J.S., Champerty and Maintenance, Section 38, p.
382, and cases cited." (27 So.2d at pages 107-108)
Although a court or hearing officer should be ever vigilant of unprofessional or unethical conduct and should be liberal in allowing questions framed to determine whether "the cause is following the client or the client is following the cause" we do not find, under the facts and circumstances of this particular case, that the hearing officer erred in refusing to permit extended questions in that regard.
Turning now to the issue of standing: The Final Order here challenged contains the following recitation:
"* * * After hearing all the testimony in this proceeding it is the determination of this Hearing Officer that all women of
childbearing age who are Medicaid recipients are substantially affected by the proposed rule and have adequate standing to challenge it pursuant to Chapter 120, F.S."
That holding is clearly erroneous. Whatever the law may be in Federal courts or other jurisdictions, the Florida law on the subject has been clearly and unambiguously settled by this court's opinion (which the respondents characterize as a "somewhat restrictive view") in Florida Dept. of Offender Rehab. v. Jerry, 353 So.2d 1230 (Fla. 1st DCA 1978), cert. denied 359 So.2d 1215 (Fla. 1978). In that case this court refused standing to a prison inmate to challenge a rule even though he had prior to the challenge been directly affected by its operation. Clearly under the rationale of the Jerry case the hearing officer's holding that all women of childbearing age, whether pregnant or not, who are Medicaid recipients are substantially affected by the proposed rule and therefore have standing, is much too broad to countenance our approval. No useful purpose will be here achieved by attempts to paraphrase the holding in the Jerry case nor by lengthy quotations therefrom. The opinion is clearly and lucidly written, numerous authorities are cited and the court's reasoning allows no room for doubt.
Nor does the hearing officer's holding find support in this court's opinion, Gadsden State Bank v. Lewis, 348 So.2d 343 (Fla. 1st DCA 1977). The observation of the author of the Jerry case distinguishing the Gadsden State Bank case wherein he stated "Finally we note that Jerry has not been made a party by agency rule as in Gadsden State Bank v. Lewis, supra" (353 So.2d at page 1236) is equally applicable here.
Respondents seek to distinguish the Jerry decision on the basis that the court was there concerned with a rule challenge pursuant to F.S. 120.56 whereas sub judice respondents were challenging a proposed rule in accordance with F.S. 120.54(4), urging that the test for standing to challenge a proposed rule is easier to meet than that for the challenge of an adopted rule. The thrust of respondents' argument is that although both statutes contain the "substantially affected" test, F.S. 120.56(2) requires that a petition challenging an adopted rule show the person seeking relief is substantially affected by the rule while
F.S. 120.54(4)(b) requires only a showing that the challenger of the proposed rule would be substantially affected by it; concluding that the difference between the present tense "is" employed by the legislature in F.S. 120.56(2) as compared to the future tense "would be" contained in F.S. 120.54(4)(b) is significant and indicates a lower threshhold of standing in the latter than in the former. We reject that reasoning. It is clear that the legislature adopted the verb tense applicable to the subject under consideration. As to an already adopted rule a person otherwise having standing must demonstrate that he or she "is" substantially affected by the rule. On the other hand, the present tense is inapplicable to a rule which has not yet come into existence since it is only proposed. Under those circumstances the legislature quite properly and logically provided that a challenger who surely cannot show that he "is" affected by the proposed rule because it has not yet even come into existence, must show that he "would be" substantially affected by it. There is no difference between the immediacy and reality necessary to confer standing whether the proceeding is to challenge an existing rule or a proposed rule.
As we held in Agrico Chemical Co., et al., v. State of Florida, Department of Environmental Regulation, et al., So.2d (Fla. 1st DCA 1978), opinion filed December 1, 1978, the burden is upon the challenger of a proposed
rule to demonstrate its invalidity. The burden is also upon the challenger, when standing is resisted, to prove standing.
Notwithstanding the erroneous standard adopted by the hearing officer, we must determine whether or not the several challengers in fact had standing. As already recited the challenge was initially made by Alice P. and Susan A. Alice
P. was dismissed as a party without standing having been proved and that dismissal is not an issue her.
Unlike Roe in Roe v. Wade, 410 U.S. 113 (1973), the record in the case sub judice reveals that Susan A. was not pregnant at the time the rule challenge was filed. It is apparent, therefore, that she did not meet the test for standing required by the Jerry decision. 1/ The record is silent as to the standing of Jane Doe. Janet Woe and Jeannette R. both testified that they were pregnant Medicaid recipients desiring abortions and unable to obtain same because of the "cutoff" of Medicaid funds. Samuel Barr, M.D., testified that he had been a Medicaid provider for five years, that he was the Director of an abortion clinic and had held that position for the past four and one-half years, that approximately thirteen per cent of the clinic's abortions in that period were Medicaid funded, and that since the Medicaid funding was cutoff the number of Medicaid eligible patients patronizing the clinic had decreased significantly.
Other than the allegations of the unsworn petition to intervene, the record reflects no basis for a finding of standing of Jacksonville Women's Health Organization, Inc. and Central Florida Women's Health Organization, Inc.
The query, then, is whether Janet Woe and Samuel J. Barr, M.D., who came into the proceeding by way of an amended petition and Jeannette R., an intervenor, all of whom meet the threshhold test, 2/ otherwise have standing.
F.S. 120.54(4)(b) requires that one seeking an administrative determination of the invalidity of a proposed rule must file his petition or request with the Division within fourteen days after the date of publication of the notice required by subsection (1) of the statute. That fourteen day period is jurisdictional. Failure to file a valid petition or request within that fourteen day period is grounds for dismissal upon proper motion directed to jurisdiction. F.S. 120.54(4)(d) provides that: "Other substantially affected persons may join the proceeding as parties or intervenors on appropriate terms which will not substantially delay the proceedings."
The Department contends that since Janet Woe and Samuel J. Barr, M.D., came into the case via an amended petition filed November 18, 1977, and Jeannette R. by motion to intervene filed November 23, 1977, both substantially beyond the fourteen day jurisdictional period for the contest of a proposed rule, they are without standing. We agree.
Whether or not the above quoted portion of F.S. 120.54(4)(d) allowing other substantially affected person to join as parties or intervenors should be construed as permitting such joinder after expiration of the fourteen day jurisdictional period provided by paragraph (b) of the statute we need not here determine for the reason that obviously such joinder contemplates the existence of a valid proceeding. It was never intended by the legislature that such provision be construed as being a vehicle for the breathing of life or validity into an otherwise dead or invalid proceeding. Sub judice, as we have held, the original remaining petitioner, Susan A. (Alice P. having been dismissed) was without standing. She was the only party (other than Alice P.) who filed within the fourteen day jurisdictional period. Susan A., being without standing, that filing was a nullity. There was therefore no validly existing proceeding to
which the other persons (or corporations) could become parties or intervenors. The Department's several motions to dismiss should have been granted.
We gratuitously observe that dismissal of a petition pursuant to F.S.
120.54(4) for failure to comply with the statutory jurisdictional requirement is not fatal to any rights of the challenger as to the proposed rule after its adoption because such dismissal for lack of jurisdiction has no affect upon the availability of a rule challenge pursuant to F.S. 120.56 after the rule has been adopted.
We have heretofore declined to hold the issues herein raised to have been rendered moot by the passage of time and the expiration of the fiscal year for which the allegedly impounded funds were appropriated because the controversy is "capable of repetition, yet evading review." (See Southern Pacific Terminal Co. v. ICC, 219 U.S. 498, 515 (1911); Roe v. Wade, 410 U.S. 113, 125 (1973) and U.S.
v. New York Telephone Company, U.S. , 98 S.Ct. 364,54 L.Ed.2d 376.) However, the Department has now furnished us with a copy of the relevant portions of an issue of the Florida Administrative Weekly, dated December 15, 1978, revealing a notice that the Department has withdrawn "the proposed amendments to Rules 10C-7.38 and 10C-7.39 relating to Medicaid funding for abortions, which amendments were noticed in the October 14, 1977 issue of the Florida Administrative Weekly" (said proposed rules being those which re the subject matter of this proceeding). That information is attached as an exhibit to a Suggestion of Mootness. In view of the withdrawal of said proposed rules, whether they are "an invalid exercise of delegated legislative authority" (F.S. 120.54(4)(a)) is moot and the controversy here is not therefore now capable of repetition, yet evading review.
Having so resolved the case, it is unnecessary for us to decide whether a party claiming monetary benefits (as here) or damages, as distinguished from declaratory relief (as in Roe v. Wade, supra), is entitled to maintain the action anonymously or under a pseudonym.
The Department's motion to dismiss the Petition for Administrative Determination of Proposed Rules, as amended, should have been granted. The remaining issues raised by this proceeding are moot.
IT IS SO ORDERED.
SMITH and BOOTH, JJ., CONCUR
ENDNOTES
1/ Neither did she meet the standard of Roe v. Wade because, as specifically recited by the author of that opinion, Roe was pregnant at the time the suit was filed.
2/ Janet Woe and Jeannette R. were both pregnant medicaid recipients at the time each sought to become a party. Barr's testimony established that he was "substantially affected" prior to, and at the time of, the filing of the amended petition.
| Issue Date | Proceedings |
|---|---|
| Dec. 23, 1977 | CASE CLOSED. Final Order sent out. |
| Issue Date | Document | Summary |
|---|---|---|
| Jan. 30, 1979 | Opinion | |
| Dec. 23, 1977 | DOAH Final Order | Rules are invalid--can't fail to disburse state funds based on availability of federal funds unless specified and improper economic impact statement. |
