ELEVEN FOOD STORES: )
1411-NO.23741 and 1406-NO.10038 ) and THE SOUTHLAND CORPORATION, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, this cause came on for administrative hearing before P. Michael Ruff, duly designated Hearing Officer of the Division of Administrative Hearings, on August 24, 1983, in Orlando, Florida. The appearances were as follows:
For Petitioner: Frank Graham, Esquire
Department of Agriculture Mayo Building
Tallahassee, Florida 32301
For Respondent: Debbie Hunn, Esquire
5500 Diplomat Circle
Suite 105
Orlando, Florida 32810
This cause involves a Stop Sale Notice filed by the Petitioner, the State of Florida, Department of Agriculture and Consumer Services, against the Respondent, Southland Corporation, d/b/a 7-Eleven Food Stores, with regard to alleged violations of Section 525.06, Florida Statutes (1980), and Rule 5F-2.01, Florida Administrative Code, concerning motor fuel sold at two food stores, the 7-Eleven Food Store 1411-No.23741, located in Tampa, Florida, and 7- Eleven Food Store 1406-No.10038, located in Winter Haven, Florida. The Petitioner contends that ethanol enriched gasoline was sold at the Tampa and Winter Haven stores on March 29 and March 8, 1983, respectively, without being properly labeled, so as to inform consumers of the content of the gasoline product offered for sale.
The Respondent was required to post a refundable bond of $1,000 pursuant to the above statutory authority, in lieu of confiscation of the fuel, pending resolution of this dispute.
At the hearing the Petitioner presented Composite Exhibits 1 and 2, which were admitted into evidence. The Respondent presented three witnesses.
The issue to be resolved in this proceeding concerns whether the Respondent sold ethanol enriched gasoline from the two outlets mentioned above in Tampa and minter Haven from pumps which were not labeled so as to disclose the contents of
the fuel in violation of the above authority and, concomitantly, whether all or a part of the $1,000 bond posted pending legal disposition of this matter should be retained by the Department.
FINDINGS OF FACT
The Petitioner, the State of Florida, Department of Agriculture and Consumer Services, is an agency of state government charged, among other responsibilities, with establishing and enforcing standards related to quality of motor fuels, as pertinent hereto, the standard for volatility contained in Rule 5F-2.01(1)(c) 2, Florida Administrative Code. The Petitioner has charged that the Respondent has technically not met this standard with fuel sold at the two stores, one in Tampa and one in Winter Haven, Florida, because the subject product (which contained ethanol) does not comply with that standard which states that the fuel should be 50 percent evaporated at a temperature of not less that 1700. There is no dispute that the fuel involved did not meet this standard because it was ethanol enriched and was intended to be sold as such by the Respondent. The notice of stop sale was filed herein because this product, which did not comply with the standard for regular or unleaded gasoline, was not labeled to disclose that it was other than unleaded gasoline, that is gasoline containing ethanol. The Petitioner however withdrew its allegation that "super unleaded gasoline" enriched with ethanol was sold in an unlabeled fashion. The Respondent is a corporation authorized to do business in Florida, headquartered in Dallas, Texas. It recently elected to convert many of its gasoline outlets to sell ethanol enriched gasoline, which is characterized by a higher per gallon profit-margin and a higher octane than regular unleaded gasoline. Thus, a memorandum was sent from the Respondent's home office in Dallas, Texas, to all the Respondent's district managers and zone managers providing them with detailed instructions for conversion of stations from selling non-enriched unleaded gasoline to ethanol enriched gasoline, including detailed instructions on preventing adulteration by water in underground tanks, as well as detailed instructions regarding proper labeling and disclosure of the contents of the new type fuel to consumers. Some 130 retail outlets in Florida were converted to sell the ethanol product and booklets were published and distributed to be provided to customers to explain the characteristics of the ethanol fuel to customers. There is no dispute that a good faith effort was consistently followed to adequately disclose the characteristics of the fuel to customers and to properly label the pumps. The Respondent's Tampa store converted to ethanol product on March 26, 1983, and received its first load of ethanol enriched gasoline that day. It was cited or notified to stop sale by the Petitioner on March 29, 1983, because the pumps through which the product was dispensed were mislabeled. The parties agree that this was due to a communication failure between the regional office in Orlando and that station and that the clerk at that Tampa store simply did not get notified to change the labeling on the pumps before the Petitioner observed the violation some two days later and ordered sale of the product stopped.
A similar situation is true of the Winter Haven retail outlet which sold ethanol enriched products without disclosure labeling on the pumps. In this instance the labeling had been placed on the pumps, but had been torn off by person unknown and the notice to stop sale was issued against the Respondent with regard to that store before new labeling could be properly placed on the pumps.
There is no question, and indeed the parties have stipulated, that the two violations which occurred were inadvertent, and due, with regard to the Tampa instance, to a lack of communication between the Respondent's regional
management office and the retail outlet involved, such that proper labeling did not get placed on the pumps timely. With regard to the Winter Haven facility, there is no dispute that the labeling was timely and properly done when the first load of fuel was placed in the underground tanks for sale, but that persons unknown wrongfully removed the labeling. There is no evidence to establish that any such violations have been committed by the Respondent in the past. There is no question that enough of the product was sold to the public to exceed the $1,000 bond posted in lieu of confiscation. It was also established that the violations were inadvertent and were not perpetrated through any intent or scheme to defraud the consuming public.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1981).
Section 525.06, Florida Statutes (1981), provides as follows: GASOLINE OR OIL BELOW STANDARD, SUBJECT
TO CONFISCATION. - All oils enumerated and designated in this chapter that are used
or intended to be used for power . . . when sold under a distinctive name that shall fall below the standard fixed by the Department of Agriculture and Consumer Services, are declared to be illegal and shall be subject
to confiscation and sale by order of the department. Instead of confiscation, a refundable bond in cash or by certified check in the amount of the value of the product subject to confiscation may be accepted by the department, pending legal disposition.
The amount of this bond shall be limited to
$1,000. If any of the product has been sold to retail customers, the department is authorized to make an assessment equal to the retail value of the product sold, not to exceed $1,000.
Rule 5F-2.01, Florida Administrative Code, provides as follows:
GASOLINE. The following specifications apply generally to all gasolines offered for sale in Florida. Specific variations or exemptions may be made for gasolines designed for special equipment or service, and for which it can be demonstrated that the distribution will be restricted to such uses.
The gasoline shall be volatile hydrocarbon fuel, with or without additives, visually free of undissolved water, sediment, and suspended matter, and shall be clear and bright at the ambient temperature of
700 degrees Fahrenheit (21 degrees Celsius), whichever is higher.
2. The 50 percent evaporated temperature
shall not be less than 170 degrees Fahrenheit (77 degrees Celsius) and shall not exceed
240 degrees Fahrenheit (116 degrees Celsius).
There is no dispute between the parties that the fuel dispensed from the pumps at the stores in question did not meet the standard for gasoline quoted last above. This is because it was ethanol enriched fuel and was not intended to comport with the above specific gasoline standard; however, it was not labeled to disclose to the consuming public that it did not comport with the gasoline standard quoted above, but rather consisted of ethanol enriched gasoline, which is entirely legal for sale in Florida, provided it is properly labeled. See, Rules 5F-2.03 and 5F-2.06, Florida Administrative
In consideration of the above Findings of Fact and the evidence in the record, it is thus concluded that the Respondent is in technical violation of the above authority with regard to appropriate disclosure of the contents of motor fuel dispensed and sold to the motoring public. The evidence in the record also establishes that these two violations were isolated ones, were of a technical nature and not related at all to any effort by the Respondent to sell adulterated or substandard fuel. The violations were clearly inadvertent and are not representative of the normal business practices of the Respondent and indeed no such other violations have been shown to have occurred in the past. The parties stipulated that in excess of $1,000 worth of the ethanol gasoline was sold to the motoring public. Inasmuch as the parties agreed that this violation was unintentional, that the Respondent had been totally cooperative with the Petitioner and had made immediate efforts to correct the mislabeling of the fuel when it was brought to its attention, and in view of the fact that the Respondent had no knowledge that illegal sales had occurred until informed by the Petitioner's representative, these factors obviate the necessity for the maximum forfeiture to be extracted from the Respondent. In consideration of these extenuating circumstances, substantial mitigation of the forfeiture sought from the Respondent is warranted.
