STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FREEPORT SULPHUR COMPANY, ) DIVISION OF FREEPORT MINERALS ) COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 78-1103RX

) DEPARTMENT OF ENVIRONMENTAL ) REGULATION, )

)

Respondent, )

and )

)

AGRICO CHEMICAL COMPANY, )

)

Intervenor. )

)

FINAL ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on July 24, 1978, in Room 103 of the Collins Building, Tallahassee, Florida.

APPEARANCES

For Petitioner: William L. Earl

Peeples, Earl and Blank, P.A. One Biscayne Tower, Suite 3636 Two South Biscayne Boulevard Miami, Florida 33131

For Respondent: Joe W. Fixel

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

For Intervenor: Edward P. de la Parte, Jr.

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

and John T. Allen

4508 Central Avenue

St. Petersburg, Florida 33711 FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. In accordance with the provisions of Florida Statutes, Section 120.56, petitioner seeks a determination of the validity of the Respondent's Rule 17-

   1. , Florida Administrative Code. This rule provides for administrative review by the respondent's Secretary of certain interim rulings made by a Hearing Officer with the Division of Administrative Hearings upon a showing that review of the Hearing Officer's recommended order would not provide an adequate remedy. The rule challenged herein reads as follows:

      
      

      "17-1.60 Petitions for Interlocutory Review.

      1. In Department proceedings before a hearing officer, interlocutory review may be taken, prior to commencement of the final hearing, to the Secretary from rul- ings on or interpretations of the statutes or rules administered by the Department. Such review will be entertained by the Secretary only upon a showing that review of the hearing officer's recommended order would not provide an adequate remedy.

         
         

      2. Petitions for interlocutory review shall be served within ten (10) days of rendition and service upon the parties

   of the ruling being appealed. Such peti- tions shall set forth concisely the ruling or interpretation of which review is sought and the argument thereon. Copies of the

   petition shall be served on all other parties (respondents) and the hearing officer.

   Respondents shall have five (5) days from the date of service of the petition to serve responses thereto. Specific Authority

   120.53 F.S. Law Implemented 120.53 F.S. History - New 2-6-78."

   
   

2. Both the petitioner and the intervenor are currently involved in administrative hearings before Hearing Officers with the Division of Administrative Hearings wherein interlocutory appeals have been taken to the Secretary of the Department of Environmental Regulation under the rule at issue. As such, and all parties herein have so stipulated, both are substantially affected by Rule 17-1.60,

   
   

3. It is petitioner's contention in this proceeding that Rule 17-1.60 constitutes an invalid exercise of delegated legislative authority. Specifically, petitioner argues that there is no statutory authority for the challenged rule, that the rule is not in compliance with the Model Rules of Procedure, that the rule directly conflicts with F.S., Section 120.68, and that the rule conflicts with the statutory scheme of Chapter 120 for hearings before independent and impartial Hearing Officers of the Division of Administrative Hearings. Respondent and the intervenor contend that F.S. Section 120.53 provides the statutory authorization for this rule of practice and procedure.

   It is further contended that the rule providing for administrative interlocutory review does not conflict with or usurp F.S. Section 120.68(1) inasmuch as the Courts have recognized and sanctioned administrative review of final agency action. Finally, respondent and the intervenor urge that the rule at issue will avoid costly delays and does not conflict with either the Model Rules of Procedure or with the scheme of the Administrative Procedure Act. It is argued that the agency can always modify or reject the Hearing Officer's

   recommendations regarding conclusions of law or interpretations of rules or statutes.

   
   

4. The undersigned Hearing Officer has carefully considered the various and opposing contentions of the parties herein. It is concluded that Rule 17- 1.60, Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority for the following reasons:

   
   

   1. there is no statutory authorization for the rule;

   2. the rule is not in compliance with the Model Rules of Procedure and therefore violates F.S. Section 120.54(10);

   3. the rule is in conflict with the statutory scheme set forth in F.S. Section 120.57(1);

   4. the rule does not avoid costs and delays (the stated purpose for the rule's existence); and

   5. the rule conflicts with F.S. Section 120.68.

      
      

      STATUTORY AUTHORITY

      
      

5. As specific authority for the rule in question, respondent relies upon

   F.S. Section 120.53, subsections (1)(b) and (1)(c). This statute is also cited as being the law implemented by the rule. Section 120.53(1)(b) requires each agency to adopt rules of practice setting forth the nature and requirements of all formal and informal procedures. Subsection (1)(c) of Section 120.53 requires agencies to adopt rules of procedure appropriate for the presentation of arguments concerning issues of law or policy and for the presentation of evidence on pertinent disputed facts. These sections of Chapter 120 must be read in conjunction with other sections of the Administrative Procedure Act in order to determine whether they provide authority for respondent's Rule 17-1.60.

   
   

6. No agency has inherent rulemaking authority. F.S. Section 120.54(14). Administrative agencies are creatures of statutes and have only such powers as those statutes confer. State ex rel. Greenburg v. Fla. State Bd. of Dentistry,

   297 So.2d 628 (Fla. App. 1st, 1974). An administrative rule which is inconsistent with or exceeds statutory authorization is void as an invalid exercise of delegated legislative authority. 4245 Corporation, Mother's Lounge, Inc. v. Div. of Beverage, So.2d , Case No. FF-381, July 18, 1978 (Fla. App. 1st, 1978).

   
   

7. It is argued by petitioner, and the undersigned agrees and so concludes, that respondent may only adopt those rules of practice and procedure envisioned by F.S. Section 120.53 for those substantive matters for which enabling legislation exists. The rule in dispute herein creates an otherwise nonexistent substantive right of interlocutory appeal to the Secretary of the Department of Environmental Regulation from a preliminary order of an administrative Hearing Officer. It authorizes the Secretary to conduct appellate functions when no such authority is provided by statute. The legislature alone has the power to create the substantive right of appeal, which it has done by the enactment of F.S. Section 120.68 and by certain other statutes relating to appeals to administrative bodies from final actions of certain agencies. For example, the Legislature has provided for the substantive right to an appeal of final actions of the respondent to the Environmental

   Regulation Commission. F.S. Section 403.804(1). Accordingly, respondent has adopted extensive rules relating to the practice and procedure applicable to the ERC in the exercise of such statutory authority. F.A.C., Rules 17-1.69 through 17-1.86. The court cases which have recognized administrative remedies and required the exhaustion thereof prior to judicial review have spoken in terms of administrative procedures created by the Legislature. See, for example, Phillips v. Santa Fe Junior College, 342 So. 2d 108 (Fla. App. 1st, 1977).

   
   

8. There being no enabling legislative authority which grants the Secretary of the Department of Environmental Regulation appellate jurisdiction over interim rulings of Hearing Officers designated by said Secretary to conduct Section 120.57(1) proceedings, Rule 17-1.60 constitutes an invalid exercise of delegated legislative authority.

   
   

   MODEL RULES OF PROCEDURE

   
   

9. Rules which derive their authority solely from F.S. Section 120.53 must comply with the Model Rules of Procedure. F.S. Section 120.54(10) specifically provides that "agency rules adopted to comply with Sections 120.53 and 120.565 must be in substantial compliance with the model rules." In pertinent part Section 120.54(10) further provides that the Model Rules of Procedure

   
   

   "shall be the rules of procedure for each agency subject to this act to the extent that each agency does not adopt a specific

   rule of procedure covering the subject matter contained in the model rules applicable to that agency."

   
   

   The statute goes on to direct how and under which circumstances the agency may seek a modification of the model rules.

   
   

10. The Model Rules of Procedure for decisions determining substantial interests, contained in Chapter 28-5, Florida Administrative Code, contain no rule relating to interlocutory appeals to agency heads. (Indeed, under the conclusions reached earlier in this Order, the Administrative Commission would have no statutory authority to enact such a rule.) Thus, while DER may have the authority to adopt specific rules of procedure under the authority of F.S. Sections 120.53 and 120.565, those adopted rules may only relate to the subject matter contained in the model rules, unless some other specific statutory authority is relied upon. The respondent has relied solely upon Section 120.53. Its Rule-17-1.60 is not "in substantial compliance with the model rules," and is therefore contrary to F.S. Section 120.54 (10).

    
    

    SECTION 120.57

    
    

11. It is argued by the respondent and the intervenor that Rule 17-1.60 simply provides a method for the agency to apply its existing authority and enforce its existing duty set forth in F.S. Section 120.57 to review a Hearing Officer's recommendations regarding conclusions of law or interpretations of rules. The rule, according to respondent, just allows the Secretary to exercise the powers he already possesses under Section 120.57(1)(b)(9) to review a Hearing Officer's conclusions of law and either accept, reject or modify them. First, it should be noted that the respondent has not cited Section 120.57 as being either the specific authority for nor the law implemented by the challenged rule. Second, even if it had, a careful reading of F.S. Section 120.57(1) illustrates that such reliance would have been misplaced.

12. A petition for a formal proceeding under Section 120.57(1) is first filed with the agency. The agency, within fifteen days of receipt of the petition, either grants or denies the request for hearing. F.S. Section 120.57(1)(b)(1). The agency next makes an election, if it is not otherwise precluded by law, whether to conduct the hearing before the agency head or to request a Hearing Officer with the Division of Administrative Hearings to conduct the proceedings. F.S. Section 120.57(1)(b)(3). Once the election is made as to who will conduct the proceedings, the statute does not contemplate that the cause will be bounced back and forth between the agency and the Hearing Officer prior to the conclusion of the hearing. This scheme is illustrated clearly by the express language in F.S. Section 120.57(1)(b)(9), which the respondent mistakenly relies upon in support of its position. That statute reads, in pertinent part, as follows: "The agency in its final order may reject or modify the conclusions of law and interpretation of administrative rules in the recommended order . . . ." A "recommended order" is the official recommendation of a Hearing Officer assigned by the Division of Administrative Hearings, or of any other duly authorized presiding officer other than an agency head or member thereof, for the final disposition of a proceeding under Section

    120.57. F.S. Section 120.52(13), as amended by Ch. 78-425, Laws of Florida. Thus, it is clear that the Legislature intended that, if a Hearing Officer is requested by the agency to conduct the proceedings, the proceedings before such Hearing Officer be brought to a close prior to the exercise of final agency action on questions of law and interpretations of rules. Had it intended otherwise, it would have been a simple matter for the Legislature to include language in Section 120.57 relating to interlocutory review of orders of Hearing Officers.

    
    

13. The courts have clearly recognized the authority of Hearing Officers to render preliminary rulings and continue to conduct the proceedings in accordance therewith, subject to the review procedures provided by statute. Nelson v. State Board of Accountancy, 355 So.2d 216 (Fla. App. 1st, 1978); Mullin v. State Dept. of Administration, etc. et al., 354 So. 2d 1216 (Fla. App. 1st, 1978). Also, note the Model Rules of Procedure, Rule 28-5.25, Florida Administrative Code. To hold otherwise would destroy the concept of independent Hearing Officers conducting impartial due process hearings. A corollary to the respondent's position would allow the agency and its counsel to control every hearing assigned to the Division of Administrative Hearings. It must be assumed that the attorneys in a proceeding are representing and advocating the legal position of their clients. The attorney for the agency naturally represents that agency and advocates that agency's position on all matters in the proceeding. If the preliminary matters and motions of the proceeding are to be controlled by the agency head, even after the case has been assigned to a Hearing Officer with the Division of Administrative Hearings, the Hearing Officer should always accept and comply with the arguments and motions of counsel representing the agency. This would, of course, destroy the total concept of the due process, adversary hearing envisioned by Section 120.57 when a Hearing Officer is requested to conduct the proceeding.

    
    

    COSTS AND DELAYS

    
    

14. At the hearing, respondent's general counsel testified that Rule 17-

    1.60 was promulgated in order to avoid delays and more costly, time-consuming proceedings when a Hearing Officer makes an erroneous interpretation of the laws administered by the Department of Environmental Regulation. This rationale is difficult to comprehend. Section 120.68(1) provides for immediate judicial review of a preliminary, procedural or intermediate agency action or ruling if

    review of the final agency decision would not provide adequate relief. Under the respondent's Rule 17-1.60, a party must first seek review by the Secretary. He may also have to seek review, in certain cases, of the Secretary's order before the Environmental Regulation Commission. Only then could the party seek redress from the tribunal to which the Legislature has directed him to go initially -- the district courts of appeal. Where is the savings-in time and money to the litigant?

    
    

15. It should be remembered that if the agency head is truly concerned with a savings of time and money to the litigants when a question of law or interpretation of rules is dispositive of the issue, there are simple and authorized mechanisms for so disposing of the proceeding. The agency is the first to see the petition for a hearing. A request for a hearing is then granted or denied by the agency. F.S. Section 120.57(1)(b)(1). If the request is granted, an election is then made by the agency as to who will conduct the proceedings. A Hearing Officer with the Division of Administrative Hearings does not become involved in the process until the agency grants request for a hearing and requests the assignment of a Hearing Officer. Thus, the agency has available to it two options or opportunities to quickly terminate the proceedings when it believes that a question of law or regulatory interpretation would be dispositive. It may either initially deny the request for a hearing or it may conduct the hearing itself and enter the dispositive preliminary rulings. To allow the agency head a third opportunity by, as respondent states it, partially recouping his delegation of authority to conduct the hearing, does not result in a savings of cost or time to the litigants. Rather, it subverts the time requirements set forth throughout the Administrative Procedure Act for a speedy and efficient resolution of administrative disputes.

    
    

    SECTION 120.68

    
    

16. This, then, leads to a discussion of whether the challenged rule directly conflicts with F.S. Section 120.68. That statute, in subsection (2), provides that:

    
    

    "Except in matters for which judicial review by the supreme court is provided by law, all proceedings for review shall be instituted by filing a petition in the district court of appeal

    (Emphasis supplied)

    
    

    Thus, in the vast majority of cases, the sole method of challenging agency action as it affects the substantial interests of a party is by petition for review to the appropriate District Court of Appeal. As noted above, the judicial cases which have required the exhaustion of administrative appellate remedies prior to the commencement of judicial review have been buttressed by administrative remedies or procedures created by the Legislature.

    
    

17. Subsection (1) of Section 120.68 provides that:

A preliminary, procedural, or intermediate agency action or ruling is immediately reviewable if review of the final agency decision would not provide an adequate remedy."

To allow the agency to make the determination as to whether review of the final agency decision would or would not provide an adequate remedy would seem to conflict with Section 120.68(1). Under this section, non-final orders are reviewable only if the District Court of Appeal finds that review of the final agency decision would not provide an adequate remedy.

WHEREFORE, IT IS HEREBY ORDERED THAT the respondent's Rule 17-1.60, Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority.

DONE and ENTERED this 21st day of August, 1978, in Tallahassee, Florida.

DIANE D. TREMOR

Hearing Officer

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

(904) 488-9675

COPIES FURNISHED:

William L. Earl

Peeples, Earl and Blank, P.A. One Biscayne Tower, Suite 3636 Two South Biscayne Boulevard Miami, Florida 33131

Joe W. Fixel

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

Edward P. de la Parte, Jr.

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

John T. Allen

4508 Central Avenue

St. Petersburg, Florida 33711

Liz Cloud, Chief

Bureau of Administrative Code Room 1802, The Capitol Tallahassee, Florida 32304

Carroll Webb, Executive Director Administrative Procedures Committee Room 120, Holland Building Tallahassee, Florida 32304

Docket for Case No: 78-001103RX

Orders for Case No: 78-001103RX