STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DISCOVERY EXPERIMENTAL AND )

DEVELOPMENT, INC., )

)

Petitioner, )

)

vs. ) Case No. 99-1322F

)

DEPARTMENT OF HEALTH, )

)

Respondent. )

)

FINAL ORDER

This case was heard by David M. Maloney, Administrative Law Judge of the Division of Administrative Hearings, on August 20, 1999, in Tampa, Florida.

APPEARANCES

For Petitioner: R. Elliott Dunn, Jr., Esquire

29949 State Road 54, West West Chapel, Florida 33543

For Respondent: Robert P. Daniti, Esquire

Department of Health Bin A02

2020 Capital Circle, Southeast Tallahassee, Florida 32399-1703

STATEMENT OF THE ISSUE

Whether Discovery Experimental and Development, Inc. ("Discovery") is entitled to an award of reasonable attorney's fees and costs under the authority of Section 120.595(3), Florida Statutes?

PRELIMINARY STATEMENT

When the final order in DOAH Case No. 99-0005RX was entered, jurisdiction was reserved to determine an award of fees and costs pursuant to Section 120.595(3), Florida Statutes. Shortly thereafter, on March 24, 1999, Discovery filed its Motion to Determine Reasonable Fees and Costs. The motion was treated as a petition and assigned Case No. 99-1322F by the Division of Administrative Hearings. The undersigned, the Administrative Law Judge in Case No. 99-0005RX, was designated to conduct the proceedings in this case. After the Department of Health's motion for continuance was granted, the case was set to be heard on August 20, 1999, in Tampa, Florida.

At final hearing, Discovery presented the testimony of two witnesses, R. Elliott Dunn, Jr., Esquire and Sam Reiber, Esquire. Discovery offered two exhibits, identified as Petitioner's Exhibit No. 1 and 2. Both were received. As its witness, the Department of Health ("Department") presented Jerry Hill, Chief of the Department's Bureau of Pharmacy Services.

Both parties timely served their proposed final orders; Discovery's was filed the morning of September 13, 1999, and the Department's on the afternoon of the same day.

FINDINGS OF FACT

1. In Discovery Experimental and Development, Inc., v. Department of Health, DOAH Case No. 99-0005RX (the "rule challenge"), three existing rules of the Department were

   challenged by Discovery pursuant to Section 120.56(3), Florida Statutes. At final hearing, challenge to one of the three was dropped because it was no longer in effect.

2. On February 22, 1999, the Final Order was rendered in the case. Discovery prevailed as to one of the two rules still subject to the proceeding. Rule 69F-12.019, Florida Administrative Code (the "invalidated rule"), was determined to constitute an invalid exercise of delegated legislative authority. The determination of invalidity was made because the rule, in an unrestrained manner, purported to allow Department agents to inspect any property, building, or records in determining compliance with certain state drug laws. The statute which the rule attempts to implement circumscribes which property, building, or records may be inspected.

3. The Administrative Procedure Act mandates the following:

   
   

   If the . . . administrative law judge declares a rule or portion of a rule invalid pursuant to Section 120.56(3), Florida Statutes, a[n] . . . order shall be rendered against the agency for reasonable costs and attorney's fees, unless the agency demonstrates that its actions were substantially justified or special circumstances exist which would make the award unjust.

   Section 120.595(3), Florida Statutes.

   
   

   Substantial Justification or Special Circumstances

   
   

4. The Department's witness testified that the rule had been amended into its invalidated form, to make the "rule more understandable and easier to read." (Tr. 58). The amended rule

   is more expansive than its predecessor with regard to what buildings, property, and records are subject to inspection. Still, the procedures governing the Department's inspectors (outside of those provided by the challenged rule) remained consistent before and after the amendment: to inspect only establishments, commercial or otherwise, that "are involved in the drug, device and cosmetic industry" (Tr. 60), all in relation to compliance with Chapter 499, Florida Statutes. The Department's bureau chief responsible for supervising inspectors and for development of the invalidated rule thought that department inspections would be confined by the challenged rule itself to only those buildings, property, and records as allowed by statute since the rule in subsection (1) announces that "[i]nspections and investigations are conducted to determine compliance with the provisions of Chapter 499, [and] Chapter 893,

   F.S. . . ." This expectation defies the plain wording of the rule that allows inspectors access to any buildings, property, or records.

   Reasonable Costs and Attorney's Fees

   
   

5. Discovery was represented by its in-house counsel, R. Elliott Dunn, Esquire. As in-house counsel, Mr. Dunn is paid a salary. He does not normally keep records of time spent in matters representing Discovery, nor is he required to do so by his employer/client. He did not keep any contemporaneous records of time actually spent on the rule challenge.

6. DOAH Case No. 99-0005RX was the first proceeding pursuant to Section 120.56, Florida Statutes, in which Mr. Dunn had ever been involved. The challenge involved extensive research into the Fourth Amendment's impact on search and seizure cases in industries historically regulated in a pervasive manner by government. In addition to legal services expended in litigation, Mr. Dunn was required to review the law in relation to both Section 120.56, Florida Statutes, and the Fourth Amendment's relationship to regulatory inspections conducted within the drug and pharmaceutical manufacturing industry.

7. Mr. Dunn spent approximately 104 hours on the case, of which roughly 83 hours (80%) related directly to the invalidated rule. A rate of $175. per hour is a reasonable rate for attorney's fees in a case of this kind.

8. The petition in this case requests that fees be awarded for 52 hours of work at $175 per hour for a total fees award of

   $9,100.

   
   

9. Discovery also claims costs in the amount of $648 for air fare for both Mr. Dunn and Discovery's President, James T. Kimball, to travel to Tallahassee from Wesley Chapel via the Tampa International Airport for the final hearing. (Mr. Kimball appeared pro se in DOAH Case No. 99-0006RX, a case that was consolidated with Case No. 99-0005RX but dismissed for lack of standing.) Additional costs claimed by Discovery are $78 for automobile rental and parking.

10. No receipts for any of the costs claimed were presented by Discovery. The only supporting documentation is an exhibit to an affidavit sworn to by Mr. Dunn and attached to the petition.

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Section 120.595(3), Florida Statutes.

12. The Department's reasons offered for promulgation of the invalidated rule by way of an amendment do not constitute substantial justification for the agency's action nor do they constitute special circumstances which would make an award of fees and costs unjust.

13. In light of the time spent by Mr. Dunn on the portion of the case related to the invalidated rule and the reasonableness of a rate of $175 per hour, $9,100 (52 hours x

    $175 per hour) is a reasonable attorney's fee in this case.

    
    

14. Mr. Dunn's sworn statements about costs are credible. At the same time, it is difficult to assess the reasonableness of the costs claimed without any supporting documentation. Both Mr. Dunn and Mr. Kimball appeared at the final hearing in the rule challenge; both have offices in Wesley Chapel. The dismissal of Mr. Kimball's petition does not diminish the costs related to his appearance since as the corporate representative of Discovery it was appropriate for him to appear in DOAH Case No. 99-0005RX as well as Case No. 99-0006RX. Certainly, the two representatives

of Discovery incurred costs in travel. Under the circumstances, costs of $500 are reasonable.

ORDER

Based on the foregoing, it is hereby

ORDERED that Discovery Experimental and Development, Inc., be awarded attorney's fees in the amount of $9,100 and costs in the amount of $500 for a total award of $9,600.

DONE and ORDERED this 20th day of September, 1999, in Tallahassee, Leon County, Florida.

DAVID M. MALONEY

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 20th day of September, 1999.

COPIES FURNISHED:

R. Elliott Dunn, Jr., Esquire 29949 State Road 54, West Wesley Chapel, Florida 33543

Robert P. Daniti, Esquire Department of Health

Bin A02

2020 Capital Circle, Southeast Tallahassee, Florida 32399-1703

Angela T. Hall, Agency Clerk Department of Health

Bin A02

2020 Capital Circle, Southeast Tallahassee, Florida 32399-1701

Pete Peterson, General Counsel Department of Health

Bin A02

2020 Capital Circle, Southeast Tallahassee, Florida 32399-1701

Dr. Robert G. Brooks, Secretary Department of Health

Bin A00

2020 Capital Circle, Southeast Tallahassee, Florida 32399-0701

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 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: 99-001322F

Orders for Case No: 99-001322F