STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SCOTT PARKER and SCANDALS OF ) PANAMA CITY BEACH, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 88-6028RU

)

DEPARTMENT OF BUSINESS )

REGULATION, DIVISION OF )

ALCOHOLIC BEVERAGE AND )

TOBACCO, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal Section 120.57 administrative hearing and a rule challenge proceeding were heard on December 23, 1988, at Tallahassee, Florida, before Veronica E. Donnelly, a duly designated Hearing Officer of the Division of Administrative Hearings. Appearances for the parties at the hearing were as follows:

For Petitioner: Edward S. Stafman, Esquire

317 East Park Avenue Tallahassee, Florida 32301

For Respondent: Harry Hooper, Esquire

Department of Business Regulation 720 South Bronough Street Tallahassee, Florida 32399-1000

On December 6, 1988, the Petitioners, Scott Parker and Scandals of Panama City Beach, Inc. (hereinafter Parker and Scandals), filed a petition to challenge the Respondent, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco's (hereinafter DABT) unpromulgated rules and unfiled forms which were used by the DABT as a basis for its decision to refuse three applications for an alcoholic beverage license submitted by the Petitioner.

This petition was amended on December 19, 1988, to include a challenge to an emergency rule adopted by the DABT as an interim measure because the unpromulgated rules in dispute and the unfiled forms did not sustain a recent administrative challenge preceding in John Harry Michaels v. DABT, DOAH Case No. 88-3977R (Final Order dated October 18, 1988).

On December 6, 1988, the Petitioners filed a petition for a formal Section

1. administrative hearing to contest the DABT's refusal to accept the Petitioners' two applications for an alcoholic beverage license. The Petitioners' contend that the applications should have been accepted and approved by the DABT because the applications meet all of the requirements the

   DABT is entitled to require by rule and statute. This petition was amended on December 19, 1988, to include the Petitioners' third application, which the Respondent intends to disapprove if the county does not approve the zoning of the location.

   
   

   Pursuant to agreement, the formal Section 120.57 administrative hearing was consolidated with the rule challenge proceeding. As the hearing officer has final order authority in the 120.54 rule challenge proceedings and recommended order authority in the 120.57 formal administrative hearing, the orders are filed separately.

   
   

   Prior to hearing, the parties stipulated to all of the material facts which will constitute the findings of fact in this proceeding. The only disputed facts involve the agency's Emergency Rule 7A-5.700. This emergency rule is not part of the subject matter addressed in this Final Order or the Recommended Order in the companion case. The parties agreed to defer hearing on the emergency rule until after the Final Order is entered on the other matters addressed in Case No. 88-6028RU, and the Recommended Order in Case No. 88-6137 is filed by the hearing officer.

   
   

   During the evidentiary portion of the consolidated proceedings, each party called one witness. The Petitioners submitted sixteen exhibits which were admitted into evidence. The Respondent submitted ten exhibits which were also admitted into evidence. Both parties submitted proposed recommended orders on the disputed issues of law. These proposed recommended orders were to be considered by the hearing officer in both proceedings. As there is no need for rulings by the hearing officer on the factual matters, the join stipulation of facts will be attached to the Final Order, and no rulings will be made by the hearing officer upon them.

   
   

   In the rule challenge proceedings, the Petitioners seek a determination that Sections 301 and 302 of DABT's policy manual for field officers and the form application for an alcoholic beverage license (form DBR 700L) are invalid rules. It is alleged that the policy manual has not been validly promulgated, and that the application form DBR 700L has not been properly filed with the Secretary of State.

   
   

   It is further alleged that the policies and rules which are the subject of the rule challenge proceedings constitute an invalid exercise of delegated legislative authority in that they delegate the task of approving the application from the Respondent agency to the county in which the Petitioners will located the business where alcoholic beverages will be sold. The Petitioners contend that the agency's requirement that an application submit evidence of local zoning approval before an application for a state alcoholic license is approved by the agency is improper because there is not statute which specifically permits the DABT to require this information from an applicant in the alcoholic beverage licensing process. Based upon all of these allegations, the Petitioners seek a determination that the cited sections of the policy manual, the application form, and the policy of requiring county zoning approval in the application process are invalid rules.

   
   

   ISSUES

   
   

   Whether Sections 301 and 302 of the DABT's policy manual and form DBR 700L are unpromulgated rules which cannot be used as a basis for the DABT's decision to refuse three applications for alcoholic beverage licenses submitted by the Petitioners.

   Whether the agency's requirement that an applicant have county zoning approval before a state alcoholic beverage license will be granted is an invalid exercise of delegated legislative authority, under Chapter 120, Florida Statutes.

   
   

   Whether form DBR 700L is an invalid rule because of DBR's failure to file forms with the Secretary of State.

   
   

   FINDINGS OF FACT

   
   

   1. The joint stipulation of facts entered into by the parties on December 21, 1988, are adopted as the findings of fact in this proceeding. A copy of the stipulation is attached and made part of this Final Order.

      
      

      CONCLUSIONS OF LAW

      
      

   2. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding as the petition challenges the provisions of existing administrative rules as invalid exercises of delegated legislative authority. Section 120.56, Florida Statutes. Petitioners' allegations that written policies and forms never promulgated as rules amount to illicit rules and are thereby subject to administrative challenge are also within the Division's jurisdiction. State Department of Administration, Division of Personnel v. Harvey, 356 So.2d 323 (Fla. 1st DCA 1977).

      
      

   3. The parties are in agreement that the Petitioners have standing to bring this rule challenge proceeding before the Division of Administrative Hearings.

      
      

      Sections 301 and 302 of the Policy Manual

      
      

   4. The Petitioners challenge the Respondent's policy statements in Sections 301 and 302 of the policy manual, as revised on February 2, 1987.

      These sections of the manual establish standardized procedures to be followed by all applicants who apply for alcoholic beverage licenses. The Petitioners seek to have these sections of the manual declared invalid as DABT rules as the entire policy manual was not validly promulgated as required by Section 120.52(16), Florida Statutes.

      
      

   5. In John Harry Michaels v. DABT, DOAH Case No. 88-3977R (Final Order dated October 18, 1988), Hearing Officer Robert T. Benton addressed the same legal issue and made the following conclusions of law in regard to Section 302 of the policy manual:

      
      

      The Administrative Procedure Act defines the term rule "broadly . . . to reach. . . invisible policy-making." Straughn v.

      O'Riodan, 338 So.2d 832, 834 n.3 (Fla. 1976). Rules are defined to include any "agency statement of general applicability that implements, interprets or prescribes law or policy . . . ." Section 120.56(16), Florida Statutes (1987). Whether an agency statement is a rule turns on the effect of the statement, not on the agency's characterization of the statement by some

      appellation other than "rule." State Department of Administration, Division of Personnel v. Harvey, 356 So.2d 323, 325 (Fla. 1st DCA 1977) (Reh. den. 1978). To the same effect, see Amos v. Department of Health and Rehabilitative Services, 444 So. 2d 43, 46 (Fla. 1st DCA 1983).

      
      

      Insofar as Section 302 of DABT's standardized policy and procedure specified

      when applications are sufficiently documented or otherwise adequate to be deemed complete, it constitutes more than an internal management memorandum which does "not affect either the private interests of any person or any plan or procedures important to the public." Section 120.52(16)(a), Florida Statutes (1987). Because pertinent provisions require that certain applications be rejected, they constitute an "agency statement of general applicability that implements . . . law or policy . . . [and has] application outside 120.52(16), Florida Statutes (1987). Because the completeness provisions of Section 302 have the force and effect of a rule but were never promulgated as a rule, they are invalid as a rule.

      
      

   6. These conclusions of law are adopted by the undersigned as being applicable to both Sections 301 and 302 of the policy manual as revised in February 2, 1987, and as applied to the Petitioners in this case. The DABT's refusal of the Petitioners' applications for an alcoholic beverage license because of the applications were "incomplete" was improper because Section 301 and 302 of the policy manual are invalid rules to the extent that they define a "completed application" and the DABT's right to refuse to accept an application if it is "incomplete."

      
      

      Failure to File Forms with the Secretary of State

      
      

   7. DABT never promulgated form DBR 700L as an official form because it never filed a copy with the Secretary of State, as required by Section 120.55(4), Florida Statutes. This unfiled form imposes requirements upon a beverage license applicant and solicits information not specifically required by statute or an existing written law. The agency's failure to file the application form with the Secretary of State places a burden upon the agency to establish that it has the authority to require zoning approval prior to issuing a beverage license by some other legal authority.

      
      

      Statutory Review

      
      

      Section 562.45(2), Florida Statutes, sets for the relationship between the DABT, counties, and municipalities. This action of the Beverage Law reads as follows:

      
      

      (2)(a) Nothing contained in the Beverage Law shall be construed to affect or impair the power or right of any incorporated

      municipality of the state to enact ordinances regulating the hours of business and location of place of business, and prescribing sanitary regulations therefor, of any licensee under the Beverage Law within the corporate limits of such municipality.

      (b) Nothing in the Beverage Law shall be construed to affect or impair the power or right of any county or incorporated municipality of the state to enact ordinances regulating the type of entertainment and conduct permitted in any establishment licensed under the Beverage Law to sell alcoholic beverages for consumption on the promises which is located within such county or municipality.

      
      

      Although Section 562.45(2)(a), Florida Statutes, speaks to a municipality's right to regulate locations where alcohol is served, the law is silent on the question of whether a county has the right to regulate such locations.

      Section 120.52(16), Florida Statutes, defines a "rule" as follows: "Rule" means each agency statement of general

      applicability that implements, interprets, or prescribes law or policy or describes the organization, procedure or practice requirements of an agency and includes any form which imposes any requirement or solicits any information not specifically required by statute or by an existing rule...

      
      

      Section 120.52(8), Florida Statutes, defines an "invalid exercise of delegated legislative authority" as follows:

      
      

      "Invalid exercise of delegated legislative authority" means 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:

      1. The agency has materially failed to follow the applicable rulemaking procedures set forth in s. 120.54;

      2. The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(7).

      3. The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7).

      4. The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; or

      5. The rule is arbitrary or capricious.

As the DABT does not have specific statutory authority or a valid rule which allows it to require an applicant to have county approval of a location before a state alcoholic beverage license can be approved, such a requirement is an invalid exercise of delegated legislative authority. This invalid rule cannot be used as a basis upon which to deny the Petitioners' applications. By creating such a rule or requirement, the DABT modified the provisions of Section 562.45(2)(a), Florida Statutes, which gives municipalities, as opposed to counties, the power or right to regulate locations where alcoholic beverages are to be served. Accordingly, the requirement cannot withstand as administrative challenge under Section 120.56, Florida Statute.

Based upon the foregoing, it is ORDERED:

1. Insofar as Sections 301 and 302 of DABT's standardized policy manual define which applications are "complete" and which shall be refused for filing as "complete", it is an invalid rule and an invalid exercise of delegated legislative authority. This rule cannot be used as a basis for the DABT's decision to refuse three applications for alcoholic beverage licenses submitted by the Petitioners.

   
   

2. Form DBR 700L is an unpromulgated and invalid rule in its requirement that a county must approve a zoning location before an alcoholic beverage license is issued by DABT. The Petitioners' failure to have the portion of the application form entitled "zoning" completed before any of the applications were submitted, cannot be considered in the review of the applications which the DABT is required to accept.

   
   

3. The DABT's requirement that an applicant for an alcoholic beverage license obtain county zoning approval prior to the DABT's acceptance and approval of the submitted application is an invalid exercise of delegated legislative authority. This rule cannot be used as a basis for a decision by the DABT to approve or disapprove the Petitioners' applications in the formal Section 120.57 administrative hearing.

DONE AND ORDERED this 19th day of January 19, 1989, at Tallahassee, Florida.

VERONICA E. DONNELLY, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of January, 1989.

COPIES FURNISHED:

Edward S. Stafman, Esquire

317 East Park Avenue Tallahassee, Florida 32301

Harry Hooper, Esquire Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1000

Leonard Ivey, Director Division of Alcoholic

Beverages and Tobacco 725 South Bronough Street

Tallahassee, Florida 32399-1000

Van B. Poole, Secretary Department of Business

Regulation

725 South Bronough Street Tallahassee, Florida 32399-1000

Liz Cloud, Chief

Bureau of Administrative Code Room 1802, The Capitol Tallahassee, Florida 32399-0250

Carroll Webb, Executive Director Administrative Procedures Committee Room 120, Holland Building Tallahassee, Florida 32399-1300

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT OR WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE ORDER TO BE REVIEWED.

Docket for Case No: 88-006028RU

Orders for Case No: 88-006028RU