STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JESUS VALDEZ, )

)

Petitioner, )

)

vs. ) CASE NO. 89-3946

) FLORIDA DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written Notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Daniel Manry, held a formal hearing in the above-styled case on December 11, 1991, in Miami, Florida.

APPEARANCES

For Petitioner: Edward S. Schwartz, Esquire

100 Chopin Plaza, Suite 1310 Miami, Florida 33131

For Respondent: Lisa M. Raleigh, Esquire

Assistant Attorney General

Department of Legal Affairs, Tax Section The Capitol

Tallahassee, Florida 32399-1050 STATEMENT OF THE ISSUES

The issue for determination in this proceeding is whether Petitioner is liable for the tax imposed pursuant to Section 212.0505, Florida Statutes, on controlled substances.

PRELIMINARY STATEMENT

Respondent issued a Notice Of Assessment And Jeopardy Findings against Petitioner on May 16, 1989. Petitioner timely reguested a formal hearing, and the matter was referred to the Division of Administrative Hearings for assignment of a hearing officer.

A formal hearing was initially scheduled for September 22, 1989. At the reguest of the parties, the matter was placed in abeyance pending a decision of Petitioner's appeal in the criminal case in federal district court involving the same transaction as that at issue in this proceeding. Petitioner filed a motion to suppress evidence in the criminal case based upon the allegation that the evidence was unlawfully seized. The district court denied the motion to suppress, and Petitioner appealed. On June 13, 1991, The United States Court of Appeal for the Eleventh Circuit reversed the district court and remanded the case for further proceedings. The district court granted the motion to suppress

and scheduled Petitioner's trial for the two week period beginning September 23, 1991. At that time, Petitioner represented to the undersigned that he had no position on the subject of further abeyances in this proceeding. Accordingly, a formal hearing was scheduled for December 11, 1991.

At the formal hearing, the parties filed two prehearing stipulations. In the Joint Pretrial Stipulation, the parties agreed that there would be no objections to the chain of custody of evidence, that Petitioner would not testify, that Respondent withdrew its Motion To Compel Discovery, that Respondent agreed to cancel its scheduled depositions, and that arguments pertaining to the illegality of the search and the application of the exclusionary rule of evidence in this proceeding would be made after the conclusion of the formal hearing. The Supplemental Pretrial Stipulation recited the testimony that would have been given if the police officers and custodians of evidence in the criminal case had been called as witnesses in this proceeding. Petitioner did not, however, concede the truth of the matters to which they would testify. Resolution of the truth of the matters set forth in the Supplemental Pretrial Stipulation was left to the province of the hearing officer.

Prior to the presentation of evidence, Petitioner made an ore tenus motion in limine to exclude all evidence obtained from an allegedly illegal police search of Petitioner's automobile. Respondent reguested that the undersigned hear the evidence, reserve ruling, and dispose of the motion in limine in this Recommended Order. Respondent's reguest was granted without objection by Petitioner.

Petitioner presented no testimony and no exhibits for admission in evidence. Respondent presented the testimony of three witnesses 1/ and submitted three exhibits for admission in evidence. 2/ Respondent's exhibits were admitted in evidence without objection.

A transcript of the formal hearing was reguested and filed with the undersigned on December 30, 1991. The parties' proposed findings of fact and conclusions of law were timely filed on January 17, 1992. 3/ The parties' proposed findings of facts are addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Respondent issued a Notice Of Assessment And Jeopardy Findings against Jesus Abauza, also known as Jesus I. Valdez, on May 16, 1989, (the "assessment"). The assessment was made for the tax imposed on the unlawful transportation of approximately 90 kilograms of cocaine.

   
   

2. The tax base in the assessment is the retail value of the cocaine. The retail value of the cocaine was estimated in the amount of $1,341,000 by multiplying the weight of the cocaine by the retail price listed in the Florida Department Of Law Enforcement ("FDLE") memorandum in effect at the time for Broward and Dade counties. The price per kilogram listed in the FDLE memorandum was $14,900. The FDLE memorandum became effective on May 4, 1988, and was the current price list used by the FDLE on May 8, 1989, when Petitioner was arrested and charged with possession of a controlled substance.

   
   

3. Tax was assessed against the tax base at the rate of 50 percent and in the amount of $670,500. A 25 percent surcharge was assessed in the amount of

   $335,250. The total tax assessed in the amount of $1,005,750 is the sum of the

   amount of tax due at the rate of 50 percent and the amount of tax due for the 25 percent surcharge. An additional 50 percent penalty was assessed in the amount of $502,875. The total tax and penalty assessed in the amount of $1,508,635 is the sum of the tax due ($1,005,750) and the penalty ($502,875).

   
   

4. A Warrant For Collection Of Delinquent Sales and Use Tax (the "warrant") and a Corrected Warrant (the "corrected warrant") was issued against Petitioner on the same day as the assessment. The warrant and corrected warrant are identical except for the addition of Petitioner's social security number in the the top right corner of the corrected warrant and a note in the right margin of the corrected warrant stating:

   
   

   This CORRECTED WARRANT is being re-recorded to reflect the correct amount of tax lien as being $1,005,750.00. Interest will accrue at the rate of $330.66 per day beginning 6/2/89 thru date of satisfaction of lien.

   11/26/91[.]

   
   

5. The amount stated in the assessment, warrant, and corrected warrant as the tax due is $1,005,750. The amount stated as the penalty due in all three documents is $502,875. The amount stated as the total and grand total due in all three documents is $1,508,625. The note in the right margin of the corrected warrant, however, eliminates the 50 percent penalty by stating that the corrected amount of the "tax lien" is $1,005,750.

   
   

6. Interest accrues on the tax due at the rate of one percent per month. The amount stated in the bottom left corner of the assessment, warrant, and corrected warrant, as the "Daily Interest Rate" is $329.86. The correct per diem amount of interest is $330.66. 5/ Interest begins accruing on the 21st day of the month following the month for which the tax is due.6 The tax was initially due in May, 1989, when the assessment was issued. Although the corrected warrant states that interest accrues from "6/2/89", interest actually began accruing on June 21, 1989.

   
   

7. The assessment was mailed to Petitioner by certified mail, return receipt requested. Petitioner received the assessment, but the date of receipt cannot be determined from the evidence of record. 7/

   
   

8. Petitioner unlawfully transported approximately 90 kilograms of cocaine. Petitioner was arrested by officers in the Metropolitan Dade County Police Department (the "Police Department") on May 8, 1989, and charged with possession of cocaine. In the criminal case against him, Petitioner filed a motion to suppress the evidence seized by the Police Department based upon the alleged illegality of the police officer's investigatory stop of the car Petitioner was driving. The district court denied the motion to suppress, and Petitioner successfully appealed the trial court's ruling to the United States Court of Appeals, Eleventh Circuit. The district court's denial of the motion to suppress was reversed in United States v. Valdez, 931 F.2d 1448 (11th Cir. May 22, 1991), and the case was remanded for further proceedings. The district court granted the motion to suppress and scheduled the criminal case for trial during the two week period beginning September 23, 1991. 8/

   
   

9. Petitioner stipulated in the Supplemental Pretrial Stipulation that he did not admit or stipulate that any of the matters set forth in the stipulation were factually correct. The findings of fact made in this Recommended Order, however, are substantially the same as the factual account contained in the

   official transcript of the criminal proceedings and reported by the appellate court in Valdez as the basis for its reversal of the trial court's denial of Petitioner's motion to suppress.

   
   

10. On the afternoon of May 8, 1989, Detective Jerry Houck and Special Agent Steven Hills were conducting the surveillance of a residence (the "residence" or "house") located in Miami, Florida from an unmarked police car. Detective Houck and Special Agent Hills were part of a Police Department narcotics investigative team led by Detective Francisco Trujillo. Detective Trujillo was not personally present at the residence but monitored the events which occurred at the residence over the police radio in his unmarked vehicle. Detective Trujillo was assisted by Officer Douglas Almaguer, a uniformed police officer for the Police Department who was in a marked patrol car.

    
    

11. Detective Houck observed a Honda Accord automobile (the "Honda") driven by Petitioner stop in front of the residence. Petitioner got out of the car, knocked on the front door of the house, and entered the residence. Detective Houck was unable to observe the events which took place inside the house.

    
    

12. While Petitioner remained inside the house, two men later identified as Jose and Jorge Fernandez came out of the residence. They moved two cars parked in the yard and positioned the Honda so that its trunk was in close proximity to the front door of the residence.

    
    

13. Jose and Jorge Fernandez opened the trunk of the Honda, reentered the residence, and reappeared within the next few minutes outside the house carrying plastic garbage bags which appeared to Detective Houck to be fairly heavy. The two men placed the garbage bags with their contents in the trunk of the Honda. They reentered the residence and quickly reappeared carrying additional bags which they also placed in the trunk of the Honda. Shortly thereafter, Valdez came out of the residence, got into the Honda, and drove away.

14. Detective Trujillo advised Officer Almaguer that: [W]e were conducting an investigation and we

    had a vehicle we wished for him to follow, and if that person was to commit a traffic infraction which he normally cites somebody for, we wished for him to stop the vehicle. If that occurred, and he did stop the vehicle, I wanted him to ask the occupant of the vehicle for consent to search the vehicle, and I instructed him to ask if he would consent to a search.

    
    

    Officer Almaguer did not recall that he had been directed by Detective Trujillo to stop the Honda only for something which constituted the kind of traffic offense for which he would ordinarily stop a driver.

    
    

15. Over the police radio, Detective Houck provided Detective Trujillo with the description and tag number of the Honda and notified Detective Trujillo when Petitioner drove away from the house. Detective Houck left his surveillance position at the residence and followed the Honda to 122nd Avenue. At that point, Detective Trujillo identified the Honda and Detective Houck confirmed the identification.

16. As Petitioner approached the intersection of 8th Street and 122nd Avenue, Detective Trujillo was positioned across the intersection. Officer Almaguer was directly behind Detective Trujillo in his marked patrol car.

    
    

17. Petitioner made a right turn against a red traffic light signal and violated the right-of-way of a vehicle approaching through the green traffic light signal. The approaching vehicle slowed abruptly in order to avoid a collision with Petitioner's Honda. Neither Detective Trujillo nor Officer Almaguer were able to state the speed at which the approaching vehicle was traveling before it slowed down, and neither officer heard any screeching of the tires of the approaching vehicle.

    
    

18. Detective Trujillo advised Officer Almaguer that Petitioner was the subject of the narcotics investigation. Officer Almaguer followed the Honda for

    18 blocks from the intersection where the traffic violation had occurred and then stopped Petitioner. Detective Trujillo parked two blocks away from the point of the stop and observed Officer Almaguer conduct the stop.

    
    

19. Officer Almaguer approached Petitioner and asked for Petitioner's driver's license and registration. Petitioner produced his driver's license but stated that the car was loaned to him by a friend. Officer Almaguer asked Petitioner if Petitioner knew why he had been stopped. Petitioner answered "yes."

    
    

20. Officer Almaguer requested permission to search the car, and Petitioner consented. Officer Almaguer found five sealed trash bags inside the trunk of the Honda. Officer Almaguer asked Petitioner what was inside the bags. Petitioner replied that it was cocaine. Officer Almaguer arrested Petitioner, handcuffed him, and placed him in the back seat of the patrol car until Detective Trujillo arrived at the point of the stop. Officer Almaguer issued Petitioner a citation for violation of the right-of-way. Detective Trujillo then advised Petitioner of his Miranda rights.

    
    

21. Officer Almaguer's stop of Petitioner's vehicle was unreasonably pretextual, and Petitioner's consent to search was not voluntarily given. Officer Almaguer would not have pursued Petitioner's Honda, stopped it, and issued a traffic citation, but for Detective Trujillo's instructions that the Honda was the car which the narcotics investigation team wanted stopped. Officer Almaguer ordinarily did not search a vehicle for a violation of right-of-way, or even ask its driver for consent to search the vehicle. Officer Almaguer had no reason to ask for permission to search the vehicle based solely on the traffic violation he observed. Petitioner's consent to the search was tainted by the illegal, pretextual stop and detention.

    
    

22. The contents of the five bags seized by the Police Department when Petitioner was arrested were tested by a chemist for the Police Department. The contents of the five bags weighed approximately 90 kilograms. Samples of each kilogram from the bags were tested and found to contain cocaine. The percentage of cocaine and purity of the cocaine was not determined.

    
    

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this proceeding pursuant to Section 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

24. Petitioner has the burden of proof in this proceeding. The Notice Of Assessment And Jeopardy Findings (the "assessment") is deemed to be prima facie correct pursuant to Section 212.0505(5), Florida Statutes. Petitioner has the burden of overcoming that statutory presumption. Harris v. State, Department of Revenue, 563 So.2d 97, 99 (Fla. 1st DCA 1990). Petitioner must show by a preponderance of the evidence that Respondent departed from the requirements of law or that the assessment was not supported by any reasonable hypothesis of legality. Id.

    
    

25. Petitioner failed to satisfy its burden of proof in this proceeding. Several factual discrepancies, which need not be repeated here, 9/ existed between the assessment, the Warrant For Collection Of Delinquent Sales and Use Tax (the "warrant") and the Corrected Warrant (the "corrected warrant"). However, Petitioner did not show by a preponderance of the evidence that Respondent failed to follow proper procedures prescribed by applicable statutes and administrative rules, including affording Petitioner notice and a hearing in which to contest the assessment and any factual inaccuracies contained therein. Irrespective of the fact that the lab test did not determine the percentage and purity of cocaine seized by the Metro-Dade County Police Department (the "Police Department"), the assessment was supported by a reasonable hypothesis of legality in the form of the lab results and the most current retail price memorandum issued by the Florida Department of Law Enforcement ("FDLE").

    
    

26. Petitioner's motion in limine to exclude evidence seized in the criminal case from this proceeding is denied. Petitioner asserts that the exclusionary rule of evidence applies to this proceeding. Petitioner argues that evidence of the amount and value of the cocaine assessed by Respondent should not be admitted in evidence in an administrative proceeding because it was obtained pursuant to an illegal search by the Police Department during their criminal investigation.

    
    

27. The exclusionary rule of evidence does not forbid the use in an administrative proceeding of evidence illegally seized by a criminal law enforcement agent employed by a local police department where there is no evidence that applying the rule in the administrative proceeding would have any deterrent effect on the local police department or that the deterrent effect, if any, would outweigh the public interest in obtaining relevant facts and enforcing valid laws. In United States v. Janis, 428 U.S. 433 (1976), the Supreme Court held that the exclusionary rule of evidence is not properly extended to forbid the use in a civil proceeding of one sovereign (the federal government) of evidence illegally seized by a criminal law enforcement agent of another sovereign (the state government).

    
    

28. The fact that this proceeding does not involve different sovereigns does not render the decision in Janis inapplicable to this proceeding. In Tirado v. Commissioner of Internal Revenue, 689 F.2d 307, 314-315 (5th Cir. 1982), the court held that evidence seized unlawfully by federal narcotics agents for use in a federal narcotics prosecution was not barred by the exclusionary rule in a subsequent federal tax proceeding where the evidence was not seized with participation or collusion of, or in contemplation of use by, agents in the civil tax proceeding.

29. In Janis, police in Los Angeles, California seized $4,940 in cash and wagering records owned by the respondent in that case. The arresting officer advised the Internal Revenue Service ("IRS") that respondent had been arrested for bookmaking activity. Using a calculation based upon the evidence seized by the local police, the IRS assessed respondent for wagering excise taxes and levied upon the entire $4,940 in partial satisfaction.

    
    

30. In the state criminal proceeding, the trial court quashed the search warrant and ordered the seized items returned to the respondent except for the

    $4,940 against the IRS. Respondent filed a claim for refund of the $4,940. The IRS counterclaimed for the unpaid balance of the original assessment. Respondent filed the action in Janis, moved to suppress the evidence illegally seized in the state criminal proceeding, and moved to quash the assessment made by the IRS. The federal district court held that respondent was entitled to a refund because the assessment was based upon illegally procured evidence in violation of respondent's Fourth Amendment rights. The Court of Appeals affirmed the federal district court. The Supreme Court reversed and remanded the case.

    
    

31. The Supreme Court based its decision in Janis on the following analysis:

    
    

    the `prime purpose' of the

    [exclusionary] rule, if not the sole one, `is to deter future unlawful police conduct.' (citations omitted) . . . `[T]he rule is a judicially created remedy designed to safeguard Fourth Amendment rights .

    through its deterrent effect, rather than a personal constitutional right of the party aggrieved.' (citations omitted) `[A]s with any remedial device, the application of the rule has been restricted to those areas where its remedial objectives are thought most efficaciously served.' (citations omitted)

    In the present case we are asked to create judicially a deterrent sanction by holding that evidence obtained by a state criminal law enforcement officer in good-faith reliance on a warrant that later proved to be defective shall be inadmissible in a federal civil tax proceeding. Clearly, the enforcement of admittedly valid laws would be hampered by so extending the exclusionary rule, and, as is nearly always the case with the rule, concededly relevant and reliable evidence would be rendered unavailable.

    In evaluating the need for a deterrent sanction, one must first identify those who are to be deterred. In this case it is the state officer who is the primary object of the sanction. It is his conduct that is to be controlled. Two factors suggest that a sanction in addition to those that presently exist is unnecessary. First, the local law enforcement official is already `punished' by the exclusion of the evidence in the state criminal trial. That, necessarily, is of

    substantial concern to him. Second, the evidence is also excludable in the federal criminal trial . . . (citation omitted), so that the entire criminal enforcement process, which is the concern and duty of these officers, is frustrated.

    * * *

    the additional marginal deterrence

    provided by forbidding a different sovereign from using the evidence in a civil proceeding surely does not outweigh the cost to society of extending the rule to that situation.

    
    

    Janis, 428 U.S. at 446-448, and 453-454.

    
    

32. The analyses of the Supreme Court in Janis and the appellate court in Tirado are equally applicable in this proceeding. Petitioner presented no evidence of collusion or cooperation between the Police Department and Respondent such that the application of the exclusionary rule in this proceeding would deter the Police Department from illegally obtaining evidence in subsequent criminal investigations for use in tax cases. 10/ As the court stated in Tirado:

If the agents here had doubts about whether the seizures would withstand Fourth Amendment scrutiny, there is insufficient likelihood that those doubts would have led to a decision to forego the seizures simply because there was a legal rule that any illegality would imperil efforts to force Tirado to pay his back taxes. Nor would knowing that the opposite were true - that the evidence could be used in a tax proceeding - by itself have dispelled those doubts, overcoming the agents' primary concern for their own narcotics case. Under the circumstances, the deterrent purpose of the exclusionary rule would not have been served by applying the rule in this . proceeding.

Tirado, 689 So.2d at 315.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order upholding the assessment of

tax and interest in the amount determined by Respondent.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1992.

DANIEL MANRY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 1992.

ENDNOTES

1/ Respondent's three witnesses were Mr. Paul Delesdernier, a Revenue Investigator for Respondent, Mr. Robert Dimarzo, a Chemist for the Metro-Dade Police Department, and Ms. Sherald Gomez, a manager in the records section for the Division of Criminal Investigation, Florida Department of Law Enforcement.

2/ Respondent's Exhibit A is a copy of a Memorandum dated May 4, 1988, Director Robert E. Cummings, Division of Criminal Investigations, concerning Drug Prices. Respondent's Exhibit B is a composite exhibit consisting of the Notice of Assessment and Jeopardy Findings issued on May 16, 1989, the executed return receipts, and warrants for collection of delinquent sales and use tax.

Respondent's Exhibit C is a composite exhibit consisting of copies of three laboratory analysis reports and a property receipt.

3/ Proposed findings of fact and conclusions of law were originally due on January 10, 1992. The time for filing proposed findings of fact and conclusions of law was extended to January 17, 1992, pursuant to the Order Granting Enlargement Of Time entered on January 15, 1993.

4/ The criminal charges against Petitioner were for possession of a controlled substance. See Petitioner's Proposed Findings Of Fact And Conclusions Of Law, page 4, para. 21. The assessment issued against Petitioner in this proceeding was for the unlawful " . . . sale, use, consumption, distribution, manufacture, derivation, production, transportation, or storage of . . . ." The Revenue Investigator testified, however, that assessment was made for transportation of a controlled substance. See Transcript ("TR") at 14.

5/ Interest on the tax due ($1,005,750) accrues at the annual rate of 12 percent. The amount of interest that accrues annually is $120,690. The amount of per diem interest is determined by dividing the amount of annual interest ($120,690) by the number of days in the year (365). The quotient is $330.657. If the quotient is rounded to the nearest hundredth, the amount of per diem interest is $330.66.

6/ See Sec. 212.12(3), Fla. Stat.

7/ There is no way to determine from the face of the assessment, warrant, and corrected warrant what was mailed to Petitioner. The copies of the return receipt bear the same Department of Revenue case number as that which appears on the assessment, warrant, and corrected warrant. However, the article number used by the U.S. Postal service, P-164-757-031, does not appear on either the assessment, the warrant, or the corrected warrant. The Revenue Investigator testified that he sent the assessment by certified mail and had a signed receipt for it. See TR at 15. The Revenue Investigator's testimony did not confirm that the copy of the return receipt included in Respondent's Exhibit B (the assessment) was a copy of the signed receipt referred to by the Investigator in his testimony.

8/ See United States v. Valdez, 931 F.2d 1448 (11th Cir. May 22, 1991). No evidence was presented during the formal hearing regarding the outcome of Respondent's criminal trial.

9/ See discussion at Findings of Fact, paras. 4-7.

10/ See also, United States v. Lynch, 934 F.2d 1227, 1234-1237 (11th Cir. July 1, 1991) (holding that defendant's acquittal on charge of possession of firearms during drug trafficking offense does not preclude consideration of illegally seized evidence in the form of defendant's possession of handguns for purposes of sentencing) ; Jonas v. City of Atlanta, 647 F.2d 580, 587-588 (5th Cir. 1981) (holding that for exclusionary rule was not applicable in civil rights action where deterrent effect did not outweigh public interest in providing fact finders with all relevant testimony).

APPENDIX TO RECOMMENDED ORDER CASE NO. 89-3946

Petitioner submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

15-16 Accepted in Findings 14, 18

17 Accepted in Finding 19 18-21 Accepted in Finding 20

1. Accepted in Finding 22

2. Accepted in Finding 1

Respondent submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

Respondent's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for

Rejection

1. Rejected as procedural but included in the Preliminary Statement

2. Accepted in Finding 10

3-4 Accepted in Findings 19-20

5-6 Accepted in Finding 22

1. Accepted in Finding 1

2. Accepted in Finding 2

3. Accepted in Finding 3 10-11 Accepted in Findings 4-5

COPIES FURNISHED:

J. Thomas Herndon Executive Director Department of Revenue

104 Carlton Building Tallahassee, FL 32399-0850

Vicki Weber, Esquire General Counsel Department of Revenue Room 212

Tallahassee, FL 32399-0100

Lisa M. Raheigh, Esquire Assistant Attorney General Department of Legal Affairs,

Tax Section The Capitol

Tallahassee, Florida 32399-1050

Edward S. Schwartz, Esquire

100 Chopin Plaza, Suite 1310 Miami, Florida 33131

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

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

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

STATE OF FLORIDA DEPARTMENT OF REVENUE

JESUS VALDEZ,

Petitioner,

vs. DOAH Case No. 89-3946

DEPARTMENT OF REVENUE,

Respondent.

/

FINAL ORDER

This matter came before the Governor and Cabinet as collegial head of the Department of Revenue for the purpose of considering a Recommended Order. The Hearing Officer assigned by the Division of Administrative Hearings submitted a Recommended Order to the Department of Revenue. A copy of that Recommended Order is attached hereto and is incorporated as if fully set forth herein.

Petitioner timely filed certain exceptions to legal argumentation found in the Hearing Officer's Conclusions of Law, in the Recommended Order. In accordance with Rules 12-3.004 & 12-3.005, F.A.C., these exceptions are rejected as indicated below. For the reasons expressed herein, the Department adopts the Hearing Officer's recommendation that the assessment be sustained.

PRELIMINARY STATEMENT

The Department adopts and incorporates by reference the Hearing Officer's Preliminary Statement of the Recommended Order as if fully set forth herein.

FINDINGS OF FACT

1. through 22. The Department hereby adopts and incorporates by reference the Findings of Fact set forth in paragraphs 1 through 22 of the Recommended Order.

CONCLUSIONS OF LAW

1. through 4. The Department hereby adopts and incorporates by reference Conclusions of Law numbers 1 through 4 as set forth in the Recommended Order.

5. through 10. The Department hereby adopts and incorporates by reference Conclusions of Law numbers 5 through 10 as set forth in the Recommended Order. Petitioner takes exception by way of legal argument to those Conclusions of Law, where the Hearing Officer's ruled that the exclusionary rule is inapplicable and consequently evidence suppressed in the taxpayer's criminal case not be excluded from use in this civil tax action. For the reasons stated herein and by the Hearing Officer in his Recommended Order, Petitioner's exceptions in this regard are rejected.

RULING ON EXCEPTION

The U. S. Supreme Court and U. S. Second Circuit Court of Appeals have articulated a balancing test to determine if the exclusionary rule applies in a civil case. See United States v. Janis, 96 S.Ct. 3021 (1976), and Tirado v.

C.I.R., 689 F.2d 307, (2nd Cir. 1982). See also Harris v. State Department of Revenue, 563 So.2d 97 (Fla. 1st DCA 1990), upholding suppressed evidence for use in civil tax assessment. The test expressed in those cases, balances the likely social benefits of exclusion of the evidence which would deter continued unlawful police conduct, against the likely costs of exclusion, primarily the loss of probative evidence. Janis.

The Hearing Officer in his Recommended Order concluded no evidence was presented that application of the exclusionary rule in this civil tax case would deter the police from further violations. There being no deterrent value in suppression of the evidence, the Hearing Officer held that the probative value of the evidence in determining actual tax liability was of greater weight and therefore the evidence would not be precluded from use in this case. Accordingly under Janis, he declined to prohibit the use of the suppressed evidence in this civil tax case. See Conclusion of Law numbers 9 and 10. In short, the police have no stake in the outcome of this case, and would not be deterred by the suppression of the evidence in this case.

The Petitioner cites Immigration and Naturalization Service v. Lopez- Mendosa, 104 S.Ct 3479 (1984), and Adamson v. C.I.R, 745 F.2d 541 (9th Cir. 1984), and argues that regardless of the outcome of the balancing test contained in Janis, if the evidence is obtained as the result of an egregious violation that transgresses fundamental fairness, the Hearing officer should nevertheless prohibit its use in this civil case. In both Lopez-Mendosa, and Adamson, the court upheld the use of the suppressed evidence and found no egregious violation where there as no intentional bad faith on the part of the police violation.

Both of these cases cite and rely upon Rochin v California, 72 S.Ct. 205, (1952), as the basis of this reasoning. However, this case is unlike Rochin, where the police intentionally and forcibly induced vomiting in order to obtain evidence, clearly a bad faith intentional violation of the individual's rights. According to the Findings of Fact as provided in the Hearing Officer's Recommended Order and to which Petitioner has taken no exception, a valid traffic violation by the taxpayer, although a pretext, was the basis of the police stop and subsequent search. See Findings of Fact Numbers 17 and 18.

Here as in Lopez-Mendoza, and Adamson, no intentional or bad faith constitutional violation occurred which would preclude the use of the suppressed

evidence by the Respondent in support of its assessment against Petitioner. Therefore, for the above reasons and the reasons expressed by the Hearing Officer in his Recommended Order, Petitioner's exceptions are rejected.

CONCLUSION

The Department, based upon the Preliminary Statement, Findings of Fact, and Conclusions of Law, set forth by the Hearing Officer in her Recommended Order and adopted herein, sustains the assessment against Petitioner in full. Based upon the foregoing, it is ORDERED:

That the subject assessment against Petitioner is sustained in full.

Any Party to this Order has the right to seek judicial review of the Order as provided in Section 120.68, Florida Statutes, by the filing of a Notice of Appeal as provided in Rule 9.110, Florida Rules of Appellate Procedure, with the Clerk of the Department in the Office of General Counsel, Post Office Box 6668, Tallahassee, Florida 32314-6668 and by filing a copy of the Notice of Appeal accompanied by the applicable filing fees with the appropriate District court of Appeal. The Notice of Appeal must be filed within 30 days from the date this Order is filed with the Clerk of the Department.

DONE AND ENTERED in Tallahassee, Leon County, Florida this 23rd day of April, 1992.

STATE OF FLORIDA DEPARTMENT OF REVENUE

J. Thomas Herndon Executive Director

CERTIFICATE OF FILING

I HEREBY CERTIFY that the foregoing Final Order has been filed in the official records of the Department of Revenue, this 23rd day of April, 1992

JUDY LANGSTON, AGENCY CLERK

Copies: Lisa M. Raleigh

Assistant Attorney General Department of Legal Affairs

Tax Section, The Capitol Building Tallahassee, FL. 32399-1050

Daniel Manry, Hearing Officer Division of Administrative Hearings

The DeSoto Building 1230 Apalachee Parkway

Tallahassee, FL. 32399-1550

Edward S. Schwartz, Esquire

100 Chopin Plaza, Suite 1310 Miami, FL. 33131

Victoria L. Weber, General Counsel

Eric A. de Moya, Assistant General Counsel Department of Revenue

Room 204, Carlton Building Tallahassee, FL. 32301

Attachment

Hearing Officer's Recommended Order Petitioner's Exceptions

================================================================= DISTRICT COURT OPINION

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

IN THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, STATE OF FLORIDA

JESUS I. VALDEZ, NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED.

v. CASE NO. 92-1770

DOAH CASE NO. 89-3946

DEPARTMENT OF REVENUE, STATE OF FLORIDA,

Appellee.

/ Opinion filed July 19, 1993.

An Appeal from an order of the Department of Revenue.

Edward S. Schwartz, of Philip M. Gerson, P.A., Miami, for appellant.

Robert A. Butterworth, Attorney General; Lisa M. Raleigh and Ralph H. Jaeger, Assistant Attorneys General, Tallahassee, for appellee.

PER CURIAM.

We are called to evaluate the final order of the Department of Revenue sustaining a civil tax assessment against Jesus Valdez under the provisions of section 212.0505, Florida Statutes (1988) on the unlawful transportation of approximately 90 kilograms of cocaine. The issue raised is whether the Department erred in concluding that the exclusionary rule did not apply in the

instant administrative proceedings challenging the tax assessment. Although the exclusionary rule is generally inapplicable to such collateral civil proceedings, United States v. Janis, 428 U.S. 433, 96 S. Ct. 3021, 49 L. Ed. 2d

1046 (1976); Tirado v. Commissioner of Internal Revenue, 689 F.2d 307 (2d Cir. 1982), a narrow exception to this rule may be found under circumstances involving "egregious violations of Fourth Amendment or other liberties that might transgress notions of fundamental fairness and undermine the probative value of the evidence obtained" [footnote omitted]. Immigration and Naturalization Service v. Lopez-Mendoza, 468 U.S. 1032, 1050-51, 104 S. Ct.

3479, 82 L. Ed. 2d 778, 793 (1984); see also Adamson v. Commissioner of Internal Revenue, 745 F.2d 541 (9th Cir. 1984). However, the facts as referenced in the Eleventh Circuit Court of Appeals' decision in United States

v. Valdez, 931 F.2d 1448 (11th Cir. 1991), and in the Department's final order do not transgress the narrow exception articulated in either Lopez-Mendoza or Adamson.

AFFIRMED.

ERVIN, WOLF, JJ., and WENTWORTH, SENIOR JUDGE, CONCUR.

Docket for Case No: 89-003946

Orders for Case No: 89-003946