STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FREEPORT SULPHUR COMPANY, )

Division of FREEPORT MINERALS ) COMPANY, and SULPHUR TERMINALS, ) INC., )

)

Petitioner, )

)

vs. ) CASE NO. 78-527

) DEPARTMENT OF ENVIRONMENTAL ) REGULATION, and AGRICO )

CHEMICAL COMPANY, )

)

Respondent. )

)

RECOMMENDED ORDER

After Freeport Sulphur Company (Freeport) and Sulphur Terminals, Inc. (STI) filed an amended petition for formal proceeding under Section 120.57, Florida Statutes, respondent Agrico Chemical Company (Agrico) moved to dismiss the amended petition. Respondent Department of Environmental Regulation (DER), even though it referred Freeport's and STI's initial petition to the Division of Administrative Hearings, originally filed a similar motion to dismiss, but DER subsequently withdrew its motion. On September 19, 1978, Agrico's motion to dismiss the amended petition came on for hearing in Tallahassee, Florida. At the hearing, the parties were represented by counsel:

APPEARANCES

For Petitioner: William L. Earl, Esquire

One Biscayne Tower, Suite 3636 Two South Biscayne Boulevard Miami, Florida 33131

For Respondent: Joe W. Fixel, Esquire

(DER) Department of Environmental Regulation Twin Towers Office Building

2600 Blair Stone Road Tallahassee, Florida 32301

For Respondent: John T. Allen, Jr., Esquire (Agrico) 4508 Central Avenue

St. Petersburg, Florida 33711

and

Edward P. de la Parte, Jr., Esquire

403 N. Morgan Street, Suite 102 Tampa, Florida 33602

By amended petition for formal proceeding under Section 120.57, Florida Statutes, filed July 14, 1978, Freeport and STI allege that Agrico proposes to

build a sulphur handling facility that will pollute the waters of Tampa Bay in violation of applicable statutes and rules; that Freeport owns land fronting on Sparkman Channel, an arm of Tampa Bay; that Freeport and STI have their own sulphur handling facilities in Florida, which were built at great expense so as to avoid the environmental problems Agrico's proposed facility will entail; that Freeport and STI will suffer financial and competitive injury if Agrico is permitted to build the facility it proposes to build; and that Agrico cannot build its facility until the conclusion of proceedings on its application for an air pollution permit, in any event.

In addition, the amended complaint alleges that, on two separate occasions during the pendency of Agrico's application for a permit to construct a water pollution source, Freeport and STI made written requests to DER "to be kept informed as to the status and progress of permits for the Agrico facility and to be given notice of any proposed action concerning same;" that DER issued a permit to Agrico to construct an industrial wastewater treatment and disposal system on December 14, 1977, without prior notice, that on two occasions thereafter Freeport and STI made written requests to DER for information as to the status of Agrico's permit applications without being advised by DER that it had already issued the water pollution permit; and that:

On December 23, 1977, January 17, 1978,

and February 2, 1978, representatives of Freeport and Sulphur Terminals appeared at DER's Southwest District Office and requested to inspect the Agrico files.

Despite the fact that the water permit had already been issued, on December 14, 1977, neither the permit nor any other indication of issuance of the water permit was provided, and DER personnel failed to inform Freeport of the issuance of the water permit, although they were well aware of Freeport's and Sulphur Terminals' substantial and previously expressed interests in any such agency action.

According to the amended complaint, only on February 27, 1978, when they received a motion filed by Agrico in another proceeding, did Freeport and STI learn that DER had issued the permit. Promptly on March 9, 1978, they filed with DER their original petition challenging the permit, according to the administrative complaint. The administrative complaint also alleges that "DER's action in issuing the water permit to Agrico . . . constitutes 'proposed agency action' as expressly provided by DER Rule 17-1.62, Florida Administrative Code, and prior agency policy and procedure."

ISSUE

Whether applicable law authorizes the Division of Administrative Hearings to conduct a hearing on the merits of issuing a permit, where the referring agency issued the permit almost three months before the objectors' petition for hearing was filed?

CONCLUSIONS OF LAW

1. Agrico's motion to dismiss the amended petition on grounds "[that the granting of the . . . permit is final agency action," is appropriately addressed to a hearing officer. Nelson v. State Board of Accountancy, Division of Professions, Department of Professional and Occupational Regulation, 355 So.2d 216 (Fla. 1st DCA 1978). For purposes of deciding Agrico's motion to dismiss, facts well pleaded in the amended petition must be assumed to be true. See Holiday Dinner Theatres of America, Inc. v. Bartke, 281 So.2d 376 (Fla. 2d DCA 1973). For this reason and because no evidence has been adduced, findings of fact are properly omitted from the recommended order.

   
   

2. Freeport and STI allege in their amended petition that DER's issuance of the permit to Agrico "constitute[d] 'proposed agency action,'" as distinguished from "final agency action." The question whether agency action is proposed or final is, however, a matter of law, not simply a question of fact. Here, whether agency action is proposed or final is a question to be decided on the basis of facts well pleaded. It is not a question that petitioners can foreclose by their pleading.

   
   

3. DER adopted Rule 17-1.62, Florida Administrative Code, several weeks after it had issued the water permit to Agrico, but before Freeport and STI filed their original petition. Although DER has since repealed Rule 17-1.62, Florida Administrative Code, it was in effect at the time Freeport and STI filed their original petition. Pertinent subsections of Rule 17-1.62, Florida Administrative Code, provided:

   
   

   1. The proposed agency action to which this section applies shall be letters of intent to issue or deny licenses, and issuances or denials of licenses not preceded by letters of intent to issue

      or deny.

   2. Failure of a substantially affected person to request a hearing within fourteen

      (14) days after his receipt of actual notice of proposed agency action shall constitute a waiver by that person of any right to a

      hearing under Section 120.57, Florida Statutes.

      
      

      Petitioners Freeport and STI rely on Rule 17-1.62, Florida Administrative Code, in asserting that DER's issuance to Agrico of a permit to construct an industrial wastewater treatment and disposal system constituted proposed, rather than final, agency action. Since the permit DER issued to Agrico was not preceded by any notice of intent to issue and since their original petition was filed within fourteen days of actual notice, argue Freeport and STI, they are entitled, pursuant to Sections 120.60 (2) and 120.57, Florida Statutes (1977), and by clear implication of Rule 17-1.62, Florida Administrative Code, to an administrative hearing, before DER takes final agency action.

      
      

4. Rule 17-1.62, Florida Administrative Code, was not, however, in existence at the time Agrico applied for the water permit or at the time DER issued the permit to Agrico. See Sexton Cove Estates, Inc. v. State Pollution Control Board, 325 So.2d 468 (Fla. 1st DCA 1976). Although the amended petition may be read as alleging that DER treated Agrico's water permit as proposed rather than final agency action, as a matter of policy and procedure, even before the adoption of Rule 17-1.62, Florida Administrative Code, there is no

   allegation that Agrico was aware of any such practice or procedure at any pertinent time.

   
   

5. But the fundamental difficulty with petitioners' position is that it implies that "issuances . . of licenses not preceded by letters of intent to issue," Rule 17-1.62(1), Florida Administrative Code, can never ripen into final agency action. Any rule, policy or procedure which would cause the finality of agency action to depend upon the silence of certain persons for a period of time after notice of the action must have as a corollary a requirement that such persons be given notice of the action at some specified time. This requirement is not found in Rule 17-1.62, Florida Administrative Code, and was not alleged to exist in DER's prior practice or procedure. In this case, interested parties allegedly learned of DER's issuance of the permit almost three months after the fact. In the next case, the time may be three years. In another case, it might be three decades. Such uncertainty with respect to permits DER issues is plainly intolerable. Permittees take far reaching, sometimes irremediable action and expend millions of dollars, in reliance on DER permits. As a practical matter, DER's alleged treatment of permits not preceded by notices of intent to issue would be wholly unworkable. As a technical matter, it would be at odds with the whole scheme of the Administrative Procedure Act and would insulate from judicial review, pursuant to Section 120.68(1), Florida Statutes (1977), permits not preceded by notices of intent to issue. In short, on the basis of the facts alleged in the amended complaint, DER's issuance to Agrico of the water permit constituted final agency action on Agrico's application for the permit.

   
   

6. This is not to say that an administrative agency can defeat the right of a substantially interested party to a hearing pursuant to Section 120.57(1), Florida Statutes (1977), simply by taking final agency action without affording such a hearing. Capeletti Brothers, Inc. v. State of Florida Department of Transportation, No. KK-19 (Fla. 1st DCA; August 9, 1978); Gadsden State Bank v. Lewis, 348 So.2d 343 (Fla. 1st DCA 1977). but, when final agency action deprives a party of a right to an administrative hearing, the hearing officer has no authority to supply the omission. "Nothing in the [Administrative Procedure] Act gives hearing officers collateral review power over final agency action. . . ." State Department of Health and Rehabilitative Services v. Barr, 359 So.2d 503, 505 (Fla. 1st DCA 1978). For that matter, nothing in the Administrative Procedure Act gives DER collateral review power over final agency action. On the other hand, the Legislature has lavished broad powers on reviewing courts to order "whatever relief is appropriate." Section 120.58, Florida Statutes (1977). Once agency action is final, "[a]n agency's failure .

. . to afford a hearing . . . is an occasion for judicial review," Harris v. Florida Real Estate Comm'n, 358 So.2d 1123, 1125, not for ad hoc improvisation within the executive branch.

RECOMMENDATION

Upon consideration of the foregoing, it is RECOMMENDED:

That DER enter a final order dismissing with prejudice the amended petition for formal proceeding under Section 120.7, Florida Statutes, filed by Freeport and STI.

DONE and ENTERED this 25th day of September, 1978, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

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

(904) 488-9675

COPIES FURNISHED:

William L. Earl Esquire

One Biscayne Tower, Suite 3636 Two South Biscayne Boulevard Miami, Florida 33131

Joe W. Fixel, Esquire Department of Environmental

Regulation

Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32301

John T. Allen, Jr., Esquire 4508 Central Avenue

St. Petersburg, Florida 33711

Edward P. de la Parte, Jr., Esquire

403 N. Morgan Street, Suite 102 Tampa, Florida 33602

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION

FREEPORT SULPHUR COMPANY,

Division of FREEPORT MINERALS COMPANY, and SULPHUR TERMINALS, INC.,

Petitioner,

vs. CASE NO. 78-527

DEPARTMENT OF ENVIRONMENTAL REGULATION, and AGRICO CHEMICAL COMPANY,

Respondent.

/

FINAL ORDER

BY THE DEPARTMENT:

1. INTRODUCTION

   
   

   On September 25, 1978, the Division of Administrative Hearings ("DOAH") hearing officer assigned to conduct a Section 120.57, Florida Statutes, hearing in the above styled cause submitted his Recommended Order to the Department of Environmental Regulation ("Department"). A copy of the Recommended Order is attached hereto as Exhibit I.

   
   

   Subsequent to submittal of the Recommended Order, the parties have submitted exceptions, pursuant to Section 120.57 (1)(b)4., Florida Statutes, together with a barrage of various motions, requests, memoranda of law, and proposed findings of fact and conclusions of law.

   
   

   After due notice, oral arguments, in support of and opposition to the exceptions and related motions, were presented to the Secretary of the Department by attorneys for the parties on November 3, 1978.

   
   

   1. Motions

      
      

      The parties below have filed five separate motions in support of their exceptions or against pleadings filed by the other parties. Those motions capable of disposition without argument of counsel were ruled upon at the outset of oral arguments. After oral arguments were presented on the remaining two motions, ruling was reserved.

      
      

   2. Issues

      
      

      This cause raises two important legal issues for resolution. First, in his Recommended Order, the DOAH hearing officer framed and considered one legal issue:

      
      

      "Whether applicable law authorizes the Division of Administrative Hear- ings to conducts a hearing on the merits of issuing a permit, where the referring agency issued the per- mit almost three months before the objectors' petition for hearing was filed?" (Exhibit I, page 3.)

      
      

      He resolved this issue by determining that DOAH had no jurisdiction to conduct the requested Section 120.57, Florida Statutes, hearing, and recommended that the amended petition for hearing, filed by Freeport Sulphur Company, et al. ("Freeport"), be dismissed with prejudice.

      
      

      Second, both the Department and Agrico have raised, by their exceptions to the Recommended Order, the legal issue of whether or not Freeport has shown

      standing, as a party, to invoke a Section 120.57, Florida Statutes, formal proceeding. The question may be framed as follows:

      
      

      Whether Freeport's petition for hearing contains sufficient allega- tions to establish Freeport's stand- ing, as a party, pursuant to Section 120.52(10), Florida Statutes, thereby according it the right to invoke a Section 120.57 formal proceeding on the Department's issuance of a permit to Agrico to construct an industrial wastewater treatment system for a proposed solid sulphur terminal facility at Big Bend, Hillsborough County, Florida.

      
      

      The parties to this proceeding have filed various exceptions to the hearing officer's Recommended Order, seeking rejection or modification of the hearing officer's conclusions of law and recommendation.

      
      

2. DISCUSSION OF MOTIONS

   
   

   1. Freeport's Motion to Strike Exceptions

      
      

      As announced at oral arguments, Freeport's Motion to Strike Exceptions of the Department and Agrico, dated October 10, 1978, is denied. In its Motion, Freeport argues that standing is not at issue, and cannot now be lawfully raised by the Department or Agrico.

      
      

      The record below reflects that Agrico filed its Motion to Dismiss Freeport's Petition for Formal Proceeding, dated April 3, 1978, upon the grounds, inter alia, that Freeport lacked standing as a party whose substantial interests will be determined by issuance of a Department permit to Agrico authorizing construction of an industrial wastewater treatment and disposal system. This Motion was never acted upon or disposed of by the DOAH hearing officer below.

      
      

      In failing to dispose of Agrico's Motion in opposition to Freeport's Petition for Formal Proceedings, the hearing officer failed to comply with the Model Rules of Procedure, Section 28-5.25(2), Florida Administrative Code, and Section 17-1.19, Florida Administrative Code, which incorporates the Model Rules of Procedure as the Department's Rules of Practice and Procedure pursuant to Section 120.53, Florida Statutes.

      
      

      By failing to dispose of the standing issue, properly and timely raised below, the hearing officer's submittal is also deficient in light of Section 120.57(1)(b)8., Florida Statutes, which requires hearing officers to submit information required by law or applicable rule to be contained in the final order. The scheme of Section 120.57(1), Florida Statutes, authorizes the agency head, under certain conditions, to reject or modify findings and conclusions submitted by a hearing officer to the agency. This procedure requiring agency review of hearing officer action below presupposes that the hearing officer will address and rule on substantive issues properly raised before him.

      
      

      Furthermore, Section 17-1.68(1), Florida Administrative Code, of the Department's Rules of Practice and Procedure, specifically authorizes parties to

      file exceptions to recommended orders based upon the hearing officer's erroneous omission of required findings of fact, conclusions of law, or a recommendation. Agrico, and the Department in a supporting role, have timely filed such exceptions which now require resolution of the standing issue properly raised below.

      
      

      Standing to institute an administrative or judicial action is jurisdictional and a threshold question which may be raised at any time. Sarasota County v. Department of Administrative Hearings, 350 So.2d 802 (Fla. 2d DCA 1977); See 59 Am.Jur. 2d Parties ss. 26-30. In this case, sub judice, the standing of Freeport to initiate a formal proceeding was timely raised, but not disposed of, below, and is a proper matter to be considered in issuance of the Department's final order.

      
      

   2. Agrico's Motion to Strike Freeport's Notice of Intention to Assess Costs and Attorneys' Fees

      
      

      As announced at oral arguments, Agrico's Motion to Strike Freeport's Notice of Intention to Assess Costs and Attorneys' Fees, dated October 15, 1978, is granted. Freeport's Notice of Intention is both irregular and inappropriate.

      The Department's final action in this case is based on its examination of the record, and its determination to decide the substantial issues raised in an evenhanded manner in accordance with the applicable law.

      
      

   3. Freeport's Motion to Strike Irrelevant and Untimely Submittals by Agrico

      
      

      Freeport's Motion to Strike Irrelevant and Untimely Submittals, dated October 18, 1978, was, likewise, denied at oral arguments. The record reflects that Agrico filed its exceptions to the Recommended Order in a timely manner, within the ten (10) day period allowed by Section 17-1.68, Florida Administrative Code, and Section 120.57(1)(b)8., Florida Statutes. The requirement that exceptions be filed within the specified time period does not preclude subsequent submittal of motions or supporting memoranda of law.

      Indeed, Freeport, itself, filed three motions and one "request" after the expiration of the ten (10) day period allowed for exceptions.

      
      

   4. Agrico's Motion for Official Recognition, and Freeport's Motion to Strike Agrico's Motion for Official Recognition

      
      

      Oral argument was offered by the parties in support of and in opposition to Agrico's Motion for Official Recognition and Freeport's Motion to Strike Agrico's Motion for Official Recognition, and ruling was reserved.

      
      

      Agrico's Motion for Official Recognition is based on Section 120.61, Florida Statutes. The documents which Agrico attached to its Motion appear to be authentic copies of discovery documents included in the record of a pending collateral case, styled Freeport Sulphur Company, Petitioner vs. Agrico Chemical Company and Department of Environmental Regulation, and Sulphur Terminals, Inc., Petitioner vs. Agrico Chemical Company and Department of Environmental Regulation, DOAH Case No. 78-315. That collateral case is presided over by the same DOAH hearing officer, and includes the same parties, represented by the same attorneys, involved in the case, sub judice. The subject matter of that pending proceeding is whether Agrico qualifies for the issuance of a permit to construct an air pollution source under Chapter 403, Florida Statutes, and applicable Department rules. The specific source is described as an open air

      solid-form sulphur unloading, transfer, storage and loading facility at Big Bend, Hillsborough County, Florida. (See Exhibits "F" and "G", attached to Agrico's Motion.)

      
      

      Agrico orally argued that "official recognition", as authorized by Section 120.61, Florida Statutes, is similar, in nature, to judicial notice -- that rather than allow judicial notice to be taken in administrative proceedings, the Legislature used the phrase "official recognition" to allow the same action.

      Since judicial notice may be taken by a court of records of proceedings in a companion case, Agrico reasoned the Department could give "official recognition" to documents, of record, in a companion administrative formal proceeding conducted on behalf of the Department. Stark v. Frayer, 67 So.2d 237, 239 (Fla. 1953).

      
      

      In Section 120.57, Florida Statutes, proceedings, the Department, not the Division of Administrative Hearings, is the "administrative tribunal". The Division merely acts in the agency's stead to conduct a hearing and forward a recommended order to the agency for its final action. Bank of Port St. Joe v. St. of Fla., Dept. of Banking and Finance, So.2d 1978 Fla.L. Weekly Dist. Cts. App. 1172 (1st DCA, Case No. JJ-484, August 17, 1978). Agrico argues, therefore, that both Case No. 78-527 and Case No. 78-315 are cognizable by the Department.

      
      

      Freeport has been given notice of Agrico's request for official recognition and had adequate opportunity to examine the subject materials, primarily including its own answers to Agrico's interrogatories served and filed in companion DOAH Case No. 78-315. However, Freeport has not challenged or denied the authenticity of the exhibits attached to Agrico's Motion for Official Recognition, all of which are on file in the official records of DOAH Case No.

      78-315.

      
      

      The appellate courts have not yet furnished judicial interpretation of the concept "official recognition", as used in Section 120.61, Florida Statutes.

      The question appears to be one of first impression.

      
      

      Under the circumstances of this case, the consideration by the undersigned and subsequent reviewing authorities of the described materials does not offend administrative due process embodied in the Administrative Procedure Act. See, General Dev. Util., Inc. v. Hawkins, 357 So.2d 408, 409 (Fla. 1978). In fact, the inclusion in the record of Freeport's own prior sworn answers to Agrico's interrogatories directed to standing would ordinarily be expected to rebound to Freeport's benefit on that legal issue now in question.

      
      

      For the reasons above stated, Agrico's Motion for Official Recognition is granted, but only insofar as it offers the attached exhibits for consideration by the Department in entry of this Final Order. To the extent Agrico's Motion attempts to characterize the meaning, truth, or significance of the attached exhibits, such Motion is expressly rejected.

      
      

      Conversely, Freeport's Motion to Strike Agrico's Motion for Official Recognition is, necessarily, denied.

      
      

3. DISCUSSION OF ISSUES

   
   

   1. Standing of Freeport to Initiate This Section 120.57, Florida Statutes, Formal Proceeding Section 120.57, Florida Statutes, provides:

      "The provisions of this section shall apply in all proceedings in which the substantial interests of a party are determined by an agency. Unless waived by all parties, sub- section (1) shall apply whenever

      the proceeding involves a disputed issue of material fact. Unless otherwise agreed, subsection (2) shall apply in all other cases."

      (emphasis supplied)

      
      

      In order to have standing to invoke the formal proceedings of Section 120.57.(1), Florida Statutes, a person must allege and show that it is a "party", as defined in Section 120.52(10), Florida Statutes.

      
      

      Freeport claims standing, in its Amended Petition for Formal Proceeding ("Amended Petition"), under Section 120.57(10)(b) and (c), Florida Statutes.

      
      

      1. Section 120.52(10)(b), Florida Statutes

         
         

         Section 120.52(10)(b), Florida Statutes, requires, inter alia, that a person's "... substantial interests will be affected by proposed agency action Freeport's allegations that the proposed issuance of a permit to Agrico to construct a wastewater treatment and disposal system will affect Freeport's substantial interests may be summarized in the following manner:

         
         

         • Freeport, as operator (Sulphur Terminals) of a liquid sulphur importing facility, is affected by the Department's issuance of permits to other sulphur importing facilities. (Paragraphs 27, 28, Amended Petition)

           
           

         • Freeport transports large amounts of liquid sulphur into and out of Florida. (Paragraph 29, Amended Petition)

           
           

         • The issuance of a wastewater treatment system construction permit to Agrico "will result in pollution of the ... waters of the state" and will result in "financial and competitive injury" to Freeport. (Paragraph 30, Amended Peti- tion)

           
           

         • Liquid-form sulphur facilities are "environmentally superior" to solid- form facilities. (Paragraph 31, Amended Petition)

           
           

         • Agrico's proposed facility, which will handle and transport less expensive solid-form sulphur, will have a "sub- stantial adverse economic impact" on existing liquid-form facilities, will

           adversely affect the amortized value of present liquid-form sulphur facilities, and may result in future conversion of solid-form facilities, with associated "cumulative adverse environmental impacts". (Paragraphs 32, 33, Amended Petition.)

           
           

           Freeport also argues that, as a member of a regulated industry, it has a right to insist that its competitors comply with environmental laws and rules, and that Department licensing decisions consider "economic impacts upon existing, environmentally superior facilities". (Paragraph 36, Amended Petition)

           
           

           Taken as a whole, it is clear that the thrust of Freeport's standing claim is that the licensing of a competing solid-sulphur facility will have adverse economic impacts upon its own, higher priced, liquid-sulphur operations. The recitation of several generalized claims of "pollution" or the environmental "superiority" of liquid-form sulphur is not sufficient to establish standing on environmental grounds, or alter the economic basis upon which Freeport claims standing.

           
           

           Accepting all allegations in Freeport's Amended Petition as true, Freeport has failed to identify its substantial environmental interests, cognizable under Chapter 403, Florida Statutes, which will be affected by the issuance of a wastewater treatment and disposal construction permit to Agrico in this cause.

           Freeport furnishes no nexus, whatsoever, between the construction of the proposed wastewater treatment and disposal system and anticipated harm to its legitimate environmental interests.

           
           

           If a person pleads allegations which satisfy the requirement of Section 120.52(10)(b), Florida Statutes, the presence of primary or secondary economic motives or interests does not affect that person's otherwise lawful status as a "party". The Department cannot, and will not, look behind facial allegations to determine intent, motive, or ulterial purposes, such as delay, of a petitioner.

           
           

           Freeport's Answers to Agrico's Third Interrogatories, (DOAH companion Case No. 78-315) of which official recognition has been given above, add additional clarity to the nature of Freeport's "substantial interests" claimed to be affected by the Department's proposed action. Pages A1-A4 are replete with descriptions of adverse economic impacts projected by Freeport should Agrico be able to handle the lower priced solid-form sulphur, including loss of profits, "unfair competitive advantage", and diminution in value of liquid-sulphur facilities. Freeport does little further than characterize its projected noneconomic damage as "general environmental injury ..." (A-1).

           
           

           In its Amended Petition, as further supported by its answers to interrogatories in companion DOAH Case No. 78-315, supra, Freeport has simply failed to allege or show standing as a party under Section 120.57 and Section 120.52(10)(b), Florida Statutes. The Courts have ruled that, absent incorporation by statute or Department rule, potential economic competitive injury is not a matter cognizable under the Florida Administrative Procedure Act ("APA").

           
           

           In A.S.I., Inc. v. Florida Public Service Commission, 334 So.2d 594, at 596 (Fla. 1976), the Florida Supreme Court held that a competitor, objecting to the issuance of a permit, had no standing as a substantially interested party within the meaning of Section 120.57, Florida Statutes:

           ... we are unable to conclude that the Commission's grant of a permit to Airco constitutes "substantial interests of [A.S.I. being] determined by an agency" within the

           intendment of Section 120.57, Florida Statutes (1975), even assuming that

           A.S.I. will experience competition from Airco, operating under its new for-hire permit. The fact is that

           A.S.I. has no legally recognized

           interest in being free from competition." (emphasis supplied)

           
           

           In Gadsden State Bank v. Lewis, 348 So.2d 343, 346 (Fla. 1st DCA 1977), the First District Court of Appeal found a competitor bank had standing to challenge the approval of a nearby branch bank only because potential competitive injury was made a licensing concern by agency rule. The Court, in Florida Dept. of Offender Rehab. v. Jerry, 353 So.2d 1230, 1233 (Fla. 1st DCA 1977), reiterated this controlling element in Gadsden State Bank, at page 233:

           
           

           However, the opinion [Gadsden State Bank] carefully pointed out

           that the potential competitive injury to Gadsden by a branch bank is not explicitly a matter of statutory con- cern under the APA, but it was made so by the Department's rule, requir-

           ing, as a condition to branch banking, that local conditions assure reason- able promise of successful operation for the proposed branch

           
           

           Neither Chapter 403, Florida Statutes, the substantive environmental licensing statute being here implemented, nor Department rules promulgated thereunder, make potential competitive economic injury a matter of cognizable concern in the issuance of environmental permits.

           
           

           In Florida Dept. of Offender Rehab., supra, the First District Court of Appeal discussed the question of standing in light of the phrase "substantially affected", contained in Sections 120.54(4)(a) and 120.56, Florida Statutes.

           After analyzing federal cases on standing, the Court concluded that Jerry lacked standing to institute the Section 120.56, Florida Statutes, rule challenge, based on his failure to show injury-in-fact, and his speculative allegations of future injury which lacked "sufficient immediacy and reality". In the case, sub judice, Freeport has similarly failed to allege environmentally related injury- in-fact with sufficient immediacy and reality.

           
           

           As cited with apparent approval, in Florida Dept. of Offender Rehab., federal law on standing requires that a plaintiff allege, in addition to injury- in-fact, injury to an interest within the zone of interests to be protected under the statutory framework under which the claim arises. See, Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed. 2d 636 (1972); Association of Data

           Processing Serv. Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25

           L.Ed. 2d 185 (1970); Barlow v. Collins, 397 U.S. 159, 90 S.Ct. 832, 25 L.Ed. 2d,

           192 (1970). Freeport's alleged future economic injuries, caused by Agrico's

           solid-sulphur competition in the marketplace, are not within the zone of interests sought to be protected by Chapter 403, Florida Statutes, Florida's Air and Water Pollution Control Act.

           
           

           The numerous federal court decisions arising under the National Environmental Policy Act ("NEPA"), 42 U.S.C. s. 4321 et seq., illustrate the importance of the "zone of interests" test. Under NEPA, proposed federal agency actions which will have a significant effect upon the environment require the agency to prepare and file an environmental impact statement.

           
           

           The federal courts have refused to allow NEPA to be used as a device whereby plaintiffs with strictly economic interests would be allowed to thwart governmental activity under the guise of environmental interest. In Churchill Truck Lines, Inc. v. United States, 533 F. 2d 411 (8th Cir. 1976), a group of carriers filed petitions seeking to set aside an Interstate Commerce Commission order which had allowed an applicant to perform certain operations as a contract carrier in interstate commerce. The Eighth Circuit Court of Appeals sustained defendant's objection to plaintiffs' standing to raise the NEPA claim by noting:

           
           

           "Petitioners, whose sole motiva- tion in this case was their own economic self-interest and welfare, are singularly inappropriate parties to be entrusted with the responsibility of asserting the public's environmental interest in proceedings concerning the issu-

           ance of operating authority to motor carriers. Petitioners do not allege any environmental injury to them- selves. Their interest in their economic well-being vis-a-vis their competitors is clearly not within

           the zone of interests to be protected by the National Environmental Policy Act. Clinton Community Hospital Corp.

           v. Southern Maryland Medical Center, 510 F. 2d 1037, 1038 [7 ERC 1665]

           (4th Cir.), cert. denied, 422 U.S. 1048, 95 S.Ct. 2666, 45 L.Ed. 2d 700 (1975);

           Convoy Co. v. United States, Civil No. 74-757 (D.Ore., March 21, 1975). This

           Act was not designed to prevent loss of profits but was intended to promote governmental awareness of and action concerning environmental problems.

           533 F. 2d at 416]" (emphasis supplied)

           
           

           In Clinton Community Hospital Corp., supra, one hospital sought to enjoin the construction of another hospital two miles away. The alleged "injury-in- fact" was that construction of the second hospital would put the plaintiff hospital out of business. The Fourth Circuit Court of Appeals found no standing:

           
           

           "If it has in fact suffered

           an injury, appellant's economic well-being vis-a-vis its com-

           petitors is certainly not "argu- ably within the zone of interests to be protected" by the Federal Environmental laws."

           (510 F. 2d at 1038)

           
           

           Finally, in Cummington Preservation Committee v. F.A.A., 8 ERC 1121, 1123 (D.Mass. 1975), the federal district court concluded:

           
           

           "NEPA was formulated to protect conservational, environmental, and esthetic interests. None of

           its admittedly broad terms protect individuals from economic loss.

           Congress did not intend this law to be a general enabling statute allowing opponents of federal projects to sue solely by invoking the magic word "environment" when their injury has factually nothing to do with the environment."

           
           

           Chapter 403, Florida Statutes, was enacted to ensure control, regulation, and abatement of activities which cause pollution of the air and water resources of the state to the detriment of its citizens. Section 403.021, Florida Statutes. No statutory or Department rule provision envisions that the Department's environmental licensing decisions should hinge on the economic effects that may be projected for an applicant's competitor. Sections 403.087, 403.088, Florida Statutes.

           
           

           In sum, Freeport has not sufficiently alleged or shown that its "substantial interests" will be affected by proposed agency action as required by Sections 120.57 and 120.52(10)(b), Florida Statutes. Its few generalized allegations about pollution are so attenuated, so speculative, and so obviously subordinate to its economic interests that it cannot be concluded that its environmental interests which may be properly cognizable under Chapter 403, Florida Statutes, will be affected by proposed agency action.

           
           

           Its economic concerns are not within the zone of interests to be protected by the environmental licensing provisions of Florida's landmark environmental law.

           
           

           Under the APA, and Florida Dept. of Offender Rehab., supra, Freeport has not alleged injury-in-fact with sufficient "immediacy and reality". Neither does the APA grant Freeport a legally recognized interest in being free from competition, or from competitors which may outsell or underprice Freeport's product in the marketplace. Unlike Gadsden State Bank, neither Florida Statutes nor Department rule make potential competitive injury to Freeport a proper matter of concern in the issuing of environmental permits.

           
           

      2. Section 120.52(10)(c), Florida Statutes

      
      

      Section 120.52(10)(c), Florida Statutes, defines a "party" as any other person allowed by the agency to intervene or participate in the proceeding as a party.

      Freeport asserts that, when the Department elected to forward Freeport's petition to the Division of Administrative Hearings, it recognized Freeport as a party in this proceeding. (Paragraph 35, Amended Petition)

      
      

      Freeport's assertion is misplaced. The act of forwarding a petition to the Division of Administrative Hearings does not, in and of itself, constitute agency recognition of petitioner as a party". Neither does the forwarding of a petition constitute an admission by the agency as to the legal sufficiency of the petition, or the allegations contained therein. The widely used Chapter 120, Florida Statutes, practitioner's manual, Florida Administrative Practice - Forms, recognizes this fact. Its author, Kenneth G. Oertel, former Director of the Division of Administrative Hearings, suggests forms for a variety of motions attacking the petition that may be filed by the agency after it has forwarded the petition to the Division. See, K. Oertel, Florida Administrative Practice - Forms, s. 6-20, at 158.

      
      

      There are sound policy reasons that support this practice. It is preferable that an experienced, and independent, hearing officer initially rule on an agency's legal challenges to the sufficiency of a Section 120.57, Florida Statutes, petition which challenges agency action. In this way, the parties are ensured of an impartial ruling on their challenge, without the intrusion of real, or imagined, agency bias or predisposition. Our Department has steadfastly adhered to this practice since passage of the 1974 Administrative Procedure Act. Rarely has a petition been so lacking in prima facia compliance with the Model Rules that the request must be denied and the petitioner asked to resubmit a proper petition.

      
      

      In sum, Freeport was not allowed to participate, and was not recognized as a party to these proceedings by the Department merely because its petition was referred to the Division of Administrative Hearings. Such a reading of Sections

      120.52 (10)(c) and 120.57, Florida Statutes, would endanger the functional integrity of the APA, and force an agency to initially decide the sufficiency of petitions, and associated questions of law, without the assistance of independent and experienced DOAH hearing officers. Absent appellate court guidance on this question, our Department does not accept the construction placed on these two provisions of the APA by Freeport.

      
      

   2. Whether, Upon Timely Petition the Division of Administrative Hearings May Conduct a Section

      120.57 Hearing to Consider a Department Permit Previously Issued

      
      

      Having determined that Freeport lacks standing to invoke the formal proceedings of Section 120.57, Florida Statutes, and that, therefore, its petition must be dismissed, it is unnecessary to address the issue framed by the hearing officer's Recommended Order.

      
      

      However, inasmuch as the DOAH hearing officer's disposition of the legal issue in question contravenes prior Department final orders, and practice, it is necessary to reject and modify the hearing officer's rulings.

      
      

      The hearing officer concluded that the prior issuance by the Department of the wastewater permit in question constituted "final agency action". A fortiori, even though, according to the hearing officer, upon timely petition, the agency wishes to provide a party an opportunity for a Section 120.57 hearing, it is foreclosed from doing so. (Recommended Order, pp. 3-7)

      Infrequently, a Department permit may be inadvertently or mistakenly issued, without affording a party an opportunity to file the appropriate Section

      120.57 petition prior to issuance of the permit. In such cases, if, as is true in this case, the petitioner is without fault, and the applicant has not constructed pursuant to, or relied on the permit, to its detriment, it is the Department's practice, upon petition, to subject the contested permit to a Section 120.57 hearing.

      
      

      In Booker Creek Preservation, Inc. v. City of St. Petersburg, DOAH Final Order Case No. 78-1053, the Department reversed a DOAH Recommended Order similar to the one, sub judice, and remanded the case to the hearing officer to conduct the requested hearing. See Freeport's Memorandum of Law in Opposition to Recommended Order dated October 5, 1978.

      
      

      The appellate courts have consistently allowed parties, whose substantial interests will be determined by an agency, a clear point of entry into a Section

      120.57 proceeding. Doubts have been resolved in favor of petitioners. Capeletti Brothers, Inc. v. Department of Transportation, Fla. Law Weekly 1130 (1st DCA, August 9, 1978).

      
      

      In Gadsden State Bank v. Lewis, supra, at 347, the First District Court of Appeal stated:

      
      

      "Without the prior benefit of our McDonald decision, the Department [of Banking] misconceived the APA's hearing provisions are applicable only after the agency acts. While that application of these provisions is a permissible one, Section 120.57 (2)(a)1, public and private interest will frequently be better served by hearing before the agency decides." See McDonald, 346 So.2d at 578 (emphasis supplied)

      
      

      Even prior to the McDonald decision, supra, this Department followed a practice of issuing proposed agency actions for the purpose of triggering Section 120.57, Florida Statutes, proceedings prior to the actual issuance or denial of a Department permit. The Department will continue to follow this preferred procedure.

      
      

      In the case, sub judice, the DOAH hearing officer remarked, upon granting Agrico's Motion to Dismiss:

      
      

      It also would surprise me if the First District did anything other than send this thing back for a hearing, so that's just that much more delay (Transcript of Hear- ing, September 19, 1978)

      
      

      Any other result would apparently surprise all parties to this proceeding.

      
      

      To require Freeport to seek appellate court relief on this question would be unfair, unduly burdensome, and cause further unnecessary delay. The Section

      120.57 hearing remedy is within the delegated power of the Department to grant.

      Furthermore, an affirmative duty is placed on the licensing agency, by Section 120.60(2), to "... conduct the proceedings required with reasonable dispatch and with due regard to the rights and privileges of all affected parties or aggrieved persons "

      
      

      Therefore, although not required to reach the issue of "final agency action" framed by the hearing officer's Recommended Order, in order to ensure consistent agency interpretation of law on this question, the hearing officer's conclusions of law which conflict with the above are expressly rejected, and modified accordingly.

      
      

4. CONCLUSION

   
   

   Agrico, the applicant for the wastewater treatment and disposal system permit at issue in this proceeding, moved to dismiss Freeport's Amended Petition on grounds, inter alia, that Freeport lacked standing to invoke Section 120.57(1), Florida Statutes. Rather than dispose of this pending Motion, the DOAH hearing officer entered a Recommended Order granting Agrico's other pending motion on grounds that a Section 120.57 hearing could not be held on a prior permit issued by the Department.

   
   

   Agrico and the Department filed exceptions, asking the undersigned to consider and dispose of the standing question in this Final Order. Freeport filed exceptions asking that the Department reject the hearing officer's Recommended Order and direct the conducting of the requested Section 120.57 hearing. Agrico and Freeport have also filed proposed final orders for consideration. Rulings on the above exceptions and findings in the proposed final orders, in accordance with Stuckys of Eastman, Ga. v. Dept. of Transportation, 340 So.2d 119 (Fla. 1st DCA 1976), are contained in the appendix to this Final Order, attached as Exhibit II.

   
   

   Agrico's and the Department's exceptions, and memoranda of law on the question of standing, are persuasive. After careful examination of the above pleadings, review of the record and documents officially recognized, and inquiry of various counsel at oral arguments, for the reasons above stated, it is determined that, as a matter of law, Freeport lacks standing to initiate a Section 120.57(1), Florida Statutes, formal proceeding in this cause. Although this is a difficult question, commentators have observed that the question of standing under the APA necessitates definition, first by the agencies, and ultimately by the appellate courts. The Florida Administrative Procedure Act: 1974 Revisions and 1975 Amendments, 29 U. Miami L. Rev. 617, 658 (1975). See also Reporter's Comments on Proposed Administrative Procedure Act for the State of Florida, pages 10-11 and 17-18.

   
   

   The Amended Petition should, therefore, be dismissed, and the prior issuance of the contested permit to Agrico, confirmed.

   
   

   In his Recommended Order, however, the hearing officer entered conclusions of law concerning APA jurisdiction when a prior agency permit has been issued. These conclusions, which contravene prior Department rulings in Final Orders on this question, must be rejected, and modified accordingly.

   
   

5. STATEMENT ON EX PARTE COMMUNICATIONS

In considering and acting upon the Recommended Order in this cause, the undersigned has been mindful of and strictly adhered to the statutory

prohibitions of ex parte communications to the agency head after submission of a recommended order. Section 120.66(1), Florida Statutes.

No communication proscribed by Section 120.66(1) has been made to the undersigned. In fact, the General Counsel of our Department, who asked questions of counsel at oral arguments and functioned as my advisor in this matter, has not discussed the merits of this case with the Assistant General Counsel who represented the Department below. Neither is that Assistant General Counsel directly supervised or evaluated by the Department's General Counsel.

These precautions have been taken to ensure that both the letter, and the spirit, of administrative due process are observed in this cause. This deliberate insulation of the undersigned and the Department's General Counsel, from the parties and their counsel below, was intended to ensure maximum impartiality and even handedness in taking final agency action in this cause. It was such insulation which necessitated the lengthy questioning of counsel at the approximately three (3) hours of oral arguments.

O R D E R

WHEREFORE, upon consideration of the DOAH Recommended Order, dated September 25, 1978, submitted in this cause, together with the record presented and all subsequent exceptions, pleadings, and memoranda, for the reasons above given, it is hereby ORDERED that:

1. Freeport's Motion to Strike Exceptions of the Department and Agrico, Motion to Strike Irrelevant and Untimely Submittals by Agrico, and Motion to Strike Agrico's Motion for Official Recognition be, and hereby are, denied;

   
   

2. Agrico's Motion to Strike Freeport's Notice of Intention to Assess Costs and Attorneys Fees, and Motion for Official Recognition be, and hereby are, granted, subject to any limitation set forth above;

   
   

3. The hearing officer's Conclusions of Law and Recommendation set forth in the Recommended Order be, and hereby are, rejected and modified in accordance with paragraph 111.2. above;

   
   

4. Agrico's pending Motion to Dismiss Freeport's petition on the ground of lack of standing must be, and hereby is, granted in accordance with paragraph

   111.1. above. Freeport's Amended Petition for Formal Proceeding under section 120.57, Florida Statutes, is, therefore, dismissed;

   
   

5. The Department permit previously issued to Agrico to construct a wastewater treatment and disposal system in connection with a proposed solid- form sulphur terminal facility (DER Permit No. IC295955) at Big Bend Terminal, Hillsborough County, Florida, be, and hereby is, issued, confirmed, and in full force and effect.

DONE AND ENTERED this 9th day of November, 1978, in Tallahassee, Florida.

STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION

JOSEPH W. LANDERS, JR.,

Secretary

Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32301

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true copy of the foregoing Final Order was furnished to William L. Earl, Esquire, One Biscayne Tower, Suite 3636, Two South Biscayne Boulevard, Miami, Florida 33131; Edward P. de la Parte, Jr., Esquire,

403 North Morgan Street, Suite 102, Tampa, Florida 33602; John T. Allen, Jr., P.A., 4508 Central Avenue, St. Petersburg, Florida 33711, by United States Mail; and Joe W. Fixel, Esquire, Assistant General Counsel, Department of Environmental Regulation, 2600 Blair Stone Road, Tallahassee, Florida 32301, by Hand Delivery; and that the original Final Order was filed in the official records of the Department on November 9, 1978.

Docket for Case No: 78-000527

Orders for Case No: 78-000527