Schwartz, Esquire. The Respondent, the Department of Professional Regulation, Board of Hearing Aid Specialists, was represented by Patricia V. Russo, Assistant Attorney General.
On December 21, 1987, the Petitioner filed a Petition for the Determination of the Invalidity of a Rule. In this Petition, the Petitioner challenged the validity of the Respondent's Rules 21JJ-7.007(2), (3) and (3)(a), Florida Administrative Code.
At the formal hearing the Petitioner presented the testimony of Alan L. Lowell and Donald H. Ellsworth. The parties stipulated that Len Yordon, if he had testified, would have verified the testimony of Mr. Lowell and Mr.
Ellsworth. Petitioner's exhibits 1-3 were accepted into evidence.
The Respondent presented the testimony of Mr. Ellsworth, LouElla Cook and Ray Shope, Esquire. The Respondent offered eight exhibits. Respondent's exhibits 1-5 were rejected. Respondent's exhibits 6-8 were accepted into evidence. The parties agreed that, although Respondent's exhibits 1-5 were not accepted into evidence, portions of those exhibits would be included in the record of this case and a copy of those portions would be made by the Respondent. Therefore, the Respondent retained possession of its exhibits 1-5. Subsequent to the conclusion of the formal hearing the Respondent submitted a copy of those portions of its exhibits 1-5 which pertained to this proceeding.
Prior to the commencement of the formal hearing, the Respondent filed a Motion to Dismiss for Lack of Jurisdiction. Initially, the Motion was granted as to paragraph IV of the Petition. Subsequently, however, the Motion was denied. The denial of this Motion is discussed, infra.
The parties have filed proposed final orders containing proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Final Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto.
Whether Rules 21JJ-7.007(2), (3) and (3)(a), Florida Administrative Code, are invalid pursuant to Sections 120.54(2) and 120.56, Florida Statutes (1987)?
Section 484.0401, Florida Statutes (1987), provides the following:
The Legislature recognizes that the dispensing of hearing aids requires particularized knowledge and skill to ensure that the interests of the hearing-impaired public will be adequately served and safely protected. It recognizes that a poorly selected or fitted hearing aid not only will give little satisfaction but may interfere with hearing ability and, therefore, deems it necessary in the interest of the public health, safety, and welfare to regulate the dispensing of hearing
aids in this state. Restrictions on the fitting and selling of hearing aids shall be imposed only to the extent necessary to *protect the public from physical and economic harm*, and restrictions shall not be imposed in a manner which will unreasonably affect the competitive market. [Emphasis added].
The Legislature amended Section 484.0401, Florida Statutes (1987), during the 1986 Session to provide for the protection of the public against economic harm and to include the public welfare within the scope of the protection of Chapter 484, Florida Statutes.
Section 484.044, Florida Statutes (1987), authorizes the Board of Hearing Aid Specialists (hereinafter referred to as the "Board"), to adopt rules it deems necessary to carry out the provisions of Chapter 484, Florida Statutes.
On April 24, 1987, the Board caused to be published Rule 21JJ-7.007, Florida Administrative Code, in Volume 13, Number 17, Florida Administrative Weekly.
On May 20, 1987, a public hearing was held to allow comments concerning the challenged rule. Following this meeting and a meeting before the Board on July 10 and 11, 1987, a Notice of Change, changing the challenged rules was published in the July 24, 1987, edition of the Volume 13, Number 30, Florida Administrative Weekly.
Rule 21JJ-7.007, Florida Administrative Code, was filed with the Department of State on July 23, 1987. Volume 13, Number 31, Florida Administrative Weekly. It was effective August 12, 1987.
Rule 21JJ-7.007(2), Florida Administrative Code, provides the following:
Fraudulent, False, Deceptive or Misleading Advertising. An advertisement or advertising is fraudulent, false, deceptive or misleading, if it:
(2) Conveys the impression that the licensee or trainee possesses qualifications, skills, or other attributes which are false, other than a simple listing of earned professional achievements and degrees.
Rule 21JJ-7.007(3) and (3)(a), Florida Administrative Code, provide the following:
Fraudulent, False, Deceptive or Misleading Advertising. An advertisement or advertising is fraudulent, false, deceptive or misleading, if it:
Is misleading or deceptive because its content or the context in which it is presented makes only a partial disclosure of relevant facts.
Specifically, it is misleading and deceptive to advertise a discounted price, without identifying the specific product or service against which the discounted price applies, and without specifying the usual price for the product or service identified.
Advertising is an extremely important part of the hearing aid business. It is the principal manner in which hearing aid licensees attract clients. Advertising may assist consumers in making an educated decision about hearing aid products and services.
It is common for licensed hearing aid specialists and businesses employing licensed hearing aid specialists to include information such as the following in advertisements:
The length of service in a particular community or in the hearing aid profession. Such advertisements can be an indication of the stability of a hearing aid business;
Statements such as the following: "trust your hearing to the professionals", "ethical professional practice", "ask the expert" and "factory- trained";
Other types of training, such as factory training; and
Educational experiences, including research and teaching experiences.
The type of information listed in finding of fact 10 may be beneficial to the public and is not necessarily false, deceptive or misleading.
Advertisements used by licensed hearing aid specialists do not include every bit of information about a product. For example, the following type of information may be included in an advertisement:
One of the smallest hearing aids, designed for nerve deafness to 40 db. Model E-50 complete with one year warranty.
This type of advertisement is not false, deceptive or misleading. It does not, however, contain all the relevant facts concerning the product advertised. Additional relevant information concerning the product may be voluminous, technical and of no use to a consumer. To include all information which may be relevant could require a very large advertisement which would be expensive.
Advertisements used by licensed hearing aid specialists commonly indicate a reduction of a certain dollar amount or a percentage reduction for individual hearing aids, lines of hearing aids or all products carried by a specialist. Such advertisements do not necessarily list the specific product or service to which a discount applies or the price for each product or service before the discount.
Where discounts apply to several products or services, to list each product and the price before discount would require a large advertisement which would be expensive.
As of May 15, 1987, there were 1,016 licensed hearing aid specialists in the State of Florida. Two hundred and forty-four of the total number of licensed hearing aid specialists were on inactive status. Of the 772 active licensed specialists, 670 were members of the Petitioner as of December 4, 1987, or approximately 88 percent of all active licensed practitioners.
The Petitioner has an ethics committee and a grievance committee which are active in reviewing advertising used by hearing aid specialists. Members of the Petitioner are subject to discipline, including expulsion from the Petitioner, for improper advertising.
The following Summary of Estimate of Economic Impact of the Rule was published by the Department:
The implementation of this proposal will have minimal impact upon the Board or the Department other than the costs involved in promulgation. There should be no adverse economic impact or benefit to current licensees or potential applicants as a direct result of the proposed rules. The Board feels the rule is imperative to clarify statutory provisions within Section 484.056(1)(f),
F.S., by delineating for the activities which constitute fraudulent, false, deceptive or misleading advertising. It is therefore impossible to determine exactly what impact the proposed rule will have upon current or potential licensees. It is not foreseeable that the proposal will place an economic impact upon competition among current licensees, the open market for employment, or upon entities falling within the definition of "small entities" as defined in Section 288.703(1), F.S.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1987).
The Respondent's Motion to Dismiss for Lack of Jurisdiction.
Prior to the commencement of this case the Respondent filed a Motion to Dismiss for Lack of Jurisdiction in which it alleged that "[u]pon examination, the allegations contained in SOCIETY'S Petition are, in fact, constitutional issues erroneously denominated `exceeding delegated legislative authority.'" The Respondent further argued that the Division of Administrative Hearings lacks jurisdiction to dispose of constitutional issues in a Section 120.56, Florida Statutes, proceeding. Therefore, the Respondent requested that the case be dismissed.
A review of the Petition filed in this case indicates that the Petitioner has challenged the validity of certain portions of Rule 21JJ-7.007, Florida Administrative Code, pursuant to Section 120.56, Florida Statutes, as constituting an invalid exercise of legislative authority. Additionally, the Petitioner has challenged the economic impact statement issued in conjunction with this Rule pursuant to Section 120.54, Florida Statutes. These challenges do not raise constitutional issues. Therefore, the Division of Administrative Hearings has jurisdiction over the proceeding.
It is true that the Petitioner has also challenged the portions of Rule 21JJ-7.007, Florida Administrative Code, at issue in this proceeding as invalid under the United States Constitution and the Constitution of the State of Florida. Although the Division of Administrative Hearings has no jurisdiction to dispose of those issues, Cook v. Florida Parole and Probation Commission, 415 So.2d 845 (Fla. 1st DCA 1982), the Petitioner is entitled to raise, and to proffer evidence concerning, those issues to preserve the record.
Based upon the foregoing, the Respondent's Motion to Dismiss for Lack of Jurisdiction is denied.
The Petitioner's Standing.
The first issue to be disposed of in this case is whether the Petitioner has standing to institute and maintain this proceeding. This issue
is controlled by the tests established in Florida Home Builders Association v. Department of Labor and Employment Security, 412 So.2d 351 (Fla. 1982). See also, Federation of Mobile Home Owners of Florida v. Department of Business Regulation, 479 So.2d 252 (Fla. 2d DCA 1985); and Farmworker Rights Organization, Inc. v. Department of Health and Rehabilitative Services, 417 So.2d 753 (Fla. 1st DCA 1982). The facts in this case support the conclusion that the Petitioner has standing.
Rule 21JJ-7.007(2), Florida Administrative Code.
The Petitioner has challenged Rule 21JJ-7.007(2), Florida Administrative Code, as an invalid exercise of delegated authority. An "invalid exercise of delegated legislative authority" is defined by Section 120.52(8), Florida Statutes (1987), as follows:
action which goes beyond the powers, functions, and duties delegated by the Legislature. A proposed or existing rule is an invalid exercise of delegated legislative authority if any one or more of the following apply:
The agency has materially failed to follow the applicable rulemaking procedures set forth in s. 120.54;
The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(7);
The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7);
The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or
The rule is arbitrary and capricious.
Rule 21JJ-7.007(2), Florida Administrative Code, is an invalid exercise of delegated legislative authority under this definition. Pursuant to Sections 484.0401 and 484.044, Florida Statutes (1987), the Board has the authority to protect the public from economic harm. Based upon this authority the Board has the authority to regulate advertising and prevent "false, deceptive or misleading" advertising. Although Rule 21JJ- 7.007(2), Florida Administrative Code, is an attempt to carry out this authority, the purpose and effect of the Rule is totally unclear. The Rule, on its face, simply makes no apparent sense.
The Respondent has suggested that the Rule should be interpreted to provide that an advertisement is fraudulent, false, deceptive or misleading if it falsely conveys the impression that one "possesses qualifications, skills, or other attributes" but that "a simple listing of earned professional achievements and degrees" is permitted. This may be what the Board was attempting to do and, if the language of the Rule was similar to the construction suggested by the Respondent, the Rule would be valid. The Respondent adduced no testimony or other evidence at the formal hearing to indicate that the Board intended such a construction of Rule 21JJ-7.007(2), Florida Administrative Code. Even if
evidence had been presented to indicate that the Board intended this "reasonable construction" in promulgating the Rule, the language of the Rule is so vague that such a construction cannot reasonably be accepted.
The Petitioner has suggested a number of interpretations of Rule 21JJ- 7.007(2), Florida Administrative Code. All of those interpretations are conceivable and support the conclusion that the Rule is so vague that it fails to establish adequate standards for Board decisions and has the effect of vesting unbridled discretion in the Board. Rule 21JJ-7.007(2), Florida Administrative Code, is, therefore, an invalid exercise of delegated legislative authority.
Rules 21JJ-7.007(3) and (3)(a), Florida Administrative Code.
The Petitioner has challenged Rules 21JJ-7.007(3) and (3)(a), Florida Administrative Code, contending that these Rules are invalid because they exceed delegated legislative authority. The Respondent has argued that Rule 21JJ- 7.007(3), Florida Administrative Code, is "merely a requirement that relevant facts be disclosed in an advertisement." The problem with this argument is that the terms "relevant facts" by themselves is too vague. This conclusion, however, does not mean that the Rule is invalid. Rule 21JJ-7.007(3), Florida Administrative Code, provides that an advertisement is fraudulent, false, deceptive or misleading if its "content or the context in which it is presented makes only a partial disclosure of relevant facts" and then goes on in subparagraphs to specify the circumstances under which an advertisement will be considered to not disclose the relevant facts. Assuming that subsections (a) and (b) are valid, they provide sufficient guidance to the meaning of Rule 21JJ- 7.007(3), Florida Administrative Code, to conclude that it is valid. The Petitioner has, therefore, failed to prove that Rule 21JJ-7.007(3), Florida Administrative Code, is an invalid exercise of delegated legislative authority.
The Petitioner's challenge to Rule 21JJ-7.007(3)(a), Florida Administrative Code, hinges on a conclusion that this Rule requires that the information which must be disclosed with regard to discount prices must be included in the advertisement which announces the discount. If the Rule could only be interpreted to mean that the specific product or service against which a discounted price applied and the usual price for the product or service had to be included in the advertisement which includes the discount price, the Rule might be beyond the scope of delegated legislative authority. The Rule, however, can be interpreted to mean that the required information must be identified to a customer either in the advertisement or in some other reasonable manner. For example, the information could be provided to customers at the store or other location where sales of products or services take place. Such an interpretation of Rule 21JJ-7.007(3)(a), Florida Administrative Code, renders the Rule consistent with the authority delegated to the Board.
Based upon the foregoing, it is concluded that it has not been established that Rule 21JJ-7.007(3), Florida Administrative Code, or Rule 21JJ- 7.007(3)(a), Florida Administrative Code, are invalid exercises of delegated legislative authority.
The Effect of Chapter 455, Florida Statutes.
The Petitioner has argued that the challenged Rules are invalid because they are "unreasonably restrictive on competition and the availability of services pursuant to Chapter 455 . . ., Florida Statutes . . . ." Section
455.211, Florida Statutes (1987), authorizes the Department of Professional Regulation to challenge rules of various boards, including the Respondent Board, if the rule, among other things, "[u]nreasonably restricts competition "
That Section does not establish a ground to declare a rule invalid or a cause of action which the Petitioner may proceed under in this proceeding. This proceeding has been instituted pursuant to Sections 120.54 and 120.56, Florida Statutes (1987), and not Chapter 455, Florida Statutes.
The Economic Impact Statement.
The final issue in this case is whether the challenged Rules are invalid because of the alleged failure of the economic impact statement to comply with Section 120.54(2), Florida Statutes (1987). In particular, the Petitioner has argued that the economic impact statement is invalid because "(1) said statement does not state the method employed nor the data utilized in preparing said statement, (2) no attempt was made to determine the actual economic impact of Rule 21JJ-7.007(3)(A), [sic] and (3) the statement is erroneous in its conclusions, and, consequently, said economic impact statement is not competent evidence of the facts recited therein."
The evidence presented in this proceeding was insufficient to support the Petitioner's arguments concerning the economic impact statement. Additionally, any deficiency in the economic impact statement was not "so grave as to have impaired the fairness of the proceedings." Health Care and Retirement Corporation of America v. Department of Health and Rehabilitative Services, 463 So.2d 1175, 1178 (Fla. 1st DCA 1984). See also, Humhosco, Inc. v. Department of Health and Rehabilitative Services, 476 So.2d 258 (Fla. 1st DCA 1985).
ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, it is ORDERED:
Rule 21JJ-7.007(2), Florida Administrative Code, is an invalid exercise of delegated legislative authority and is therefore invalid;
The Petitioner has failed to prove that Rule 21JJ- 7.007(3), Florida Administrative Code, is an invalid exercise of delegated legislative authority. The Petitioner's request to declare Rule 21JJ-7.007(3), Florida Administrative Code, invalid is denied;
The Petitioner has failed to prove that Rule 21JJ- 7.007(3)(a), Florida Administrative Code, is an invalid exercise of delegated legislative authority. The Petitioner's request to declare Rule 21JJ-7.007(3)(a), Florida Administrative Code, invalid is denied;
To the extent that the Petitioner has challenged the Respondent's Rules as contrary to Chapter 455, Florida Statutes (1987), the Petitioner's challenge is dismissed;
The Petitioner has failed to prove that the economic impact statement promulgated with Rules 21JJ-7.007(2), (3) and (3)(a), Florida Administrative Code, fails to comply with the requirements of Section 120.54(2), Florida Statutes (1987), or that any deficiency in the economic impact statement is so grave as to have impaired the fairness of the proceedings. The Petitioner's
request to declare Rules 21JJ-7.007(2),(3) and (3)(a), Florida Administrative Code, invalid because of deficiencies in the economic impact statement is denied; and
The Respondent's Motion to Dismiss for Lack of Jurisdiction is denied.
