STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

1. PROPERTIES, LLC, )

   )

   Petitioner, )

   )

   vs. ) Case No. 10-2334

   ) SHANNON SUE, LLC, JUPITER HILLS ) LIGHTHOUSE MARINA, INC., JOHN ) AND BARBARA CANONICO, AS )

   TRUSTEES OF THE BARBARA )

   CANONICO REVOCABLE TRUST, ) DEPARTMENT OF ENVIRONMENTAL ) PROTECTION, AND BOARD OF )

   TRUSTEES OF THE INTERNAL )

   IMPROVEMENT TRUST FUND, )

   )

   Respondents. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Pursuant to notice, this matter was heard before the Division of Administrative Hearings by its assigned Administrative Law Judge, D. R. Alexander, on August 18 and 19, 2010, in West Palm Beach, Florida.

   APPEARANCES

   
   

   For Petitioner: James M. Porter, Esquire

   James M. Porter, P.A.

   2950 Sun Trust International Center One Southeast Third Avenue

   Miami, Florida 33131-1712

   
   

   For Respondents: Kirk S. White, Esquire

   (Department and Department of Environmental Protection Board) 3900 Commonwealth Boulevard

   Mail Station 35

   Tallahassee, Florida 32399-3000

   
   

   For Respondents: John S. Yudin, Esquire (all others) Guy Yudin & Foster, LLP

   55 East Ocean Boulevard Stuart, Florida 34994-2214

   (appearance on August 18 only) STATEMENT OF THE ISSUE

   The issue is whether a Consent Order executed by Respondents on March 25, 2010, and by the Department of Environmental Protection (Department) and the Board of Trustees of the Internal Improvement Trust Fund (Board) on April 1, 2010, is a reasonable exercise of the Department's enforcement authority.

   PRELIMINARY STATEMENT

   
   

   On March 25 and April 1, 2010, respectively, Respondents, who own and operate a commercial marina in Tequesta, Florida, and the Department and Board executed a Consent Order to resolve outstanding violations associated with the operation of the marina. On March 31, 2010, Petitioner, M.A.B.E. Properties, LLC (MABE), which owns property immediately adjacent to the marina, filed its Petition for Formal Administrative Hearing (Petition) challenging the Consent Order on numerous grounds and requesting that it be modified or set aside as being arbitrary and capricious. The matter was referred by the Department to the Division of Administrative Hearings on April 27, 2010, with a

   
   

   request that an administrative law judge conduct a formal hearing.

   By Notice of Hearing dated May 5, 2010, a final hearing was scheduled on June 28, 2010, in Tequesta, Florida. By agreement of the parties, the matter was rescheduled to August 18-20, 2010, in West Palm Beach, Florida. A Joint Pre-Hearing Stipulation (Stipulation) was filed by the parties on August 13, 2010.

   By Order dated May 26, 2010, the Department's Motion to Strike Portions of the Petition that sought to modify the Consent Order, or to incorporate other alleged or known violations in the calculation of the penalty, was granted. By Order dated August 13, 2010, three more allegations seeking to modify the Consent Order were stricken from the Petition.

   At the final hearing, Petitioner's principal, Edmund Brennen, testified and presented the testimony of

   Jason Andreotta, Joseph Luriz, Paul A. Wierzbicki, Leslie A. Smith, and John J. Long, Jr., all employees in the Department's Southeast District Office (District Office) in West Palm Beach. Also, it offered Petitioner's Exhibits 1-17, 20-30, 33, 35, 37, 38, and 41, which were received in evidence. The deposition of Donald H. Keirn, Jr., and deposition exhibits 13-39, were also proffered as an exhibit for the purpose of establishing other violations that MABE contends should have been considered by the

   
   

   Department before executing the Consent Order. The Department and Board presented the testimony of Donald H. Keirn, Jr., a Department Environmental Specialist III and accepted as an expert. Also, they offered Department Exhibits 1-3, which were received in evidence. The other Respondents did not participate in the hearing. Finally, the undersigned granted the Department's Request for Official Recognition of Florida Administrative Code Rule Chapter 62-780.1

   The Transcript of the hearing (two volumes) was filed on September 21, 2010. Proposed Findings of Fact and Conclusions of Law were filed by Petitioner and jointly by the Department and Board on October 22, 2010, and they have been considered in the preparation of this Recommended Order.

   FINDINGS OF FACT

   
   

   Based upon all of the evidence, the following findings of fact are determined:

   1. History of the Proceeding

      
      

      1. A lengthy history precedes the execution of the Consent Order and can be summarized as follows. Shannon Sue, LLC (Shannon Sue) is a Florida limited liability company and the current owner of property located at 18261 Southeast Federal Highway, Tequesta, Florida, just north of the Martin County-Palm Beach County line. The property consists of 0.482 acres, is on the western bank of the Indian River Lagoon, and is adjacent to

         
         

         the Jensen Beach - Jupiter Inlet Aquatic Preserve, an Outstanding Florida Water. A commercial marina has been located on the upland property since at least the mid or late-1980s.

      2. The Department has the power and duty to administer and enforce Chapters 373, 376, and 403, Florida Statutes (2009),2 and the rules promulgated thereunder, including Chapter 62-780. The marina lies within the District Office's regulatory jurisdiction.

      3. MABE is a Florida limited liability corporation with its principal place of business in Martin County. It owns a small parcel of property located at 18245 Southeast Federal Highway, Tequesta, which is adjacent to, and immediately north of, the marina. Edmund Brennen is an officer and director of MABE and has resided at that site for twenty years. Besides his residence, Mr. Brennan has two boat slips for rent and two floors of commercial office space on the property, which is zoned commercial/residential. Over the last twenty years, MABE has had tenants who have historically used the dock and the aquatic preserve for fishing, boating, and other recreational activities. Although currently vacant, MABE plans to continue to lease its property to residential or commercial tenants.

      4. Shannon Sue currently leases the marina property to Jupiter Hills Lighthouse Marina, Inc. (JHLM), a Florida

         
         

         corporation with its principal place of business in Martin County. JHLM has operated the marina since at least the 1990s.

      5. The property was owned by John and Barbara Canonico (husband and wife), as Trustees of the Barbara Canonico Revocable Trust, from 1988 until November 21, 2002, when title was transferred to Shannon Sue. John Canonico is an officer, director, and registered agent of JHLM and Barbara Canonico is a manager and registered agent of Shannon Sue.

      6. The record reflects that a dock and slips were located on the property for a number of years. On July 29, 1992, JHLM applied for a wetland resource permit to expand the existing dock to provide for additional mooring and to substantially reconfigure the existing dock. On December 13, 1994, the Department issued an Intent to Issue Permit No. 432170499 (Permit) to JHLM allowing the expansion of the existing dock from 6 to 18 slips. See Petitioner's Exhibit 1.3 The Permit was eventually issued on July 1, 1996. See Petitioner's Exhibit 2. The Permit included a number of general and specific conditions, including Specific Conditions 8 and 12, which required the installation of a stormwater exfiltration system to provide treatment for the first inch of runoff, and prohibited any boat maintenance or repair activities except those that were "minor" or necessitated by "emergency conditions." There is no record

         
         

         of any objection to the issuance of the permit being filed by any person.

      7. Although authorized to do so, for unknown reasons, JHLM did not make the changes authorized by the Permit. In March 1998, it submitted a new application for a Standard General Environmental Resource Permit (ERP) seeking to expand the number of wet slips from six to twelve and to reconfigure the existing dock. See Petitioner's Exhibit 3. One-half of the slips would be used by powerboats while the other six would be for sailboat mooring only. Under the new permit, the applicant would be allowed to remove the existing docks and construct a new access dock and terminal platform and add six new finger piers. On August 16, 1999, the Department approved the application and issued Standard General ERP No. 43-0114838-001. See Petitioner's Exhibit 4. Like Specific Condition 8 in the 1996 permit, Specific Condition 14 was included in the new permit for the purpose of improving water quality and required the applicant to "install a stormwater exfiltration system" to "provide treatment for [the first inch of runoff from] all paved surfaces on the property." The system was to be constructed and certified as complete by a registered professional engineer before the permit became effective; it was to be cleaned monthly or after major rainfall events and inspected annually by a professional engineer; and annual reports were to be filed each

         
         

         year by that engineer. Also, Specific Condition 24 prohibited any boat repair work other than minor or emergency repairs.

         Acting on behalf of the Board, which has the responsibility for overseeing state owned lands, the Department also entered into a five-year lease with the Canonico Trustees (Trustees) to use sovereign submerged lands. See Petitioner's Exhibit 5. Among others, Condition 1 of the lease specifically prohibited the mooring of commercial vessels at the facility. Id. Again, the Permit was not opposed by any third party.

      8. In 2001, Chris Baker, identified as a "purchaser of the site" but more than likely a prospective purchaser, authorized a firm known as Environmental Matters to conduct a "Phase I and Limited Phase II Environmental Site Assessment" of the property. The consultant's Environmental Assessment Report (Report), dated June 2001, indicated, among other things, that there were concentrations of metals and petroleum hydrocarbons on the site; that some of the concentrations exceeded Department standards; that the soils were "contaminated throughout the Site"; an abandoned water well and septic tank system were on the site; and that a 1,000-gallon aboveground unleaded gasoline storage tank had been installed in 2001 without the required secondary containment, but no leaks were observed. See Petitioner's Exhibit 38. The report noted that during the assessment,

         Mr. Canonico acknowledged that all types of boat maintenance

         
         

         took place on the site, including scraping boat hulls, and that the waste was discharged (or allowed to run off) into the basin.

      9. On March 14, 2003, former counsel for MABE sent a three-page letter to the District Office advising that since JHLM received a permit in 1994, the marina had been operated in a manner that constituted violations of the permit conditions and lease. The letter described in detail what the author perceived to be violations of the law. In addition, a copy of the 2001 Report was enclosed with the letter. The letter asked that the Department initiate an enforcement action against the marina and that the unlawful practices be halted.

      10. A Department memorandum dated March 28, 2003, indicates that the letter and Report were reviewed by a District employee, who considered the Report to be incomplete in certain respects, and that "without appropriate measurement tools and additional information, it is not possible to state that the site is contaminated based upon the sludge analysis." See Petitioner's Exhibit 37. The memorandum conceded, however, that further investigation was needed and that the report "provides an indication of a petroleum related discharge." Id. The memorandum recommended that JHLM be given a copy of the Report and the District Office memorandum, that JHLM submit a Discharge Reporting Form pursuant to Rule 62-761.900(1), that the marina's stormwater drain be cleaned, and that JHLM contact the District

          
          

          Office to discuss the voluntary implementation of Best Management Practices for on-site operations. Id. Because the Report "[had] no laboratory reports and no method detection limits," the District Office decided not to conduct any follow- up inspections of the marina property at that time.

      11. In response to the Department's memorandum and Report, on June 3, 2003, Mr. Canonico filed a Discharge Report Form indicating that there was "no known discharge" on the property. He also enclosed a copy of a letter he signed on December 7, 1994, presumably in conjunction with his application for Permit No. 432170499, in which he described the maintenance schedule for the facility's stormwater exfiltration system and agreed to conform to that schedule, as generally required by Specific Condition 7 of the original permit. Also, on August 5, 2003, the facility's contractor advised the District Office by letter that "[t]he work authorized in Permit #43-0114834-001 has [been] commenced and completed in full, with the exception of the demolition of the finger pier, which we seek to remain." See Petitioner's Exhibit 6. This was probably in reference to the facility's intent to file an application to modify its 1999 ERP. There is no indication that any further action was taken by the Department in response to the MABE complaint.

      12. In November 2003, JHLM filed an application with the District Office seeking to modify its 1999 ERP by allowing an

          
          

          existing 4-foot by 24-foot finger pier to remain in place (the 1999 ERP required that it be removed), and to install a retractable wheelchair ramp to allow vessel access for wheel- chair bound individuals. The application was unopposed. On January 22, 2004, the Department approved the application. See Petitioner's Exhibit 7. Except for the addition of three specific conditions (32, 33, and 34), all other terms and conditions remained the same. Id. The finger pier was intended to be used for passenger loading of rental vessels stored on the uplands.

      13. Even though ownership of the property had been transferred to Shannon Sue in 2002, on August 26, 2004, the Department, on behalf of the Board, renewed submerged land lease 43003006 with the Trustees for another ten years, or until August 16, 2014. See Petitioner's Exhibit 8. The renewed lease contains the same terms and conditions as the 1999 lease, including the condition that the facility be restricted to mooring recreational vessels.

      14. On July 3, 2008, MABE, through its former counsel, sent the Department a verified complaint against the marina under Section 403.412, Florida Statutes (2008). See Petitioner's Exhibit 25. The complaint sought to compel the Department to take action to address alleged violations of the ERP conditions and the submerged land lease. Under the statute,

          
          

          an agency has 30 days after receipt of a complaint in which "to take appropriate action" against the alleged violator, or the complaining party may then institute judicial proceedings.

      15. Following receipt of the complaint, on July 10, 2008, representatives of the District Office conducted an inspection of the marina property. The case manager was Donald H. Keirn, Jr., an Environmental Specialist III, who is responsible for, among other things, compliance enforcement in a large, heavily- populated multi-county area. Another inspection was conducted on July 22, 2008. During those visits, Mr. Keirn noted significant evidence of major boat repairs on the premises, freshly spilled oil, and hull scraping. In fact, Mr. Canonico admitted to Mr. Keirn that the facility had been performing major boat repairs since the original permit had been issued.

      16. Based on these inspections, on July 29, 2008, the District Office initiated an enforcement action by sending a Warning Letter to the Canonicos advising them that Specific Conditions 11, 14, 15, and 24 of the ERP had been violated, and that the lease of submerged lands must be transferred to the current owner. See Petitioner's Exhibit 9. Condition 11 required the placement of channel markers; Conditions 14 and 15 required an exfiltration system to be constructed, certified by a professional engineer as complete as indicated on the permit drawings, maintained for the life of the system, cleaned

          
          

          monthly, and inspected by a professional engineer annually with follow-up annual reports; and Condition 24 prohibited repairs to vessels other than minor or emergency repairs, so as to prevent the discharge of hazardous materials into the aquatic preserve. The record does not show what action, if any, Respondents took after receiving the Warning Letter.

      17. Frustrated by Respondents' inaction, and their repeated disregard of Permit and Lease conditions over the years, in the fall of 2008 MABE hired an outside consulting firm (E Sciences, Inc.) to collect and analyze samples of soil and water from both the MABE property as well as Shannon Sue's property. (Authorization to enter Shannon Sue's property was pursuant to a court order.) The report was completed on

          October 16, 2008, and concluded that since the 2001 assessment was performed, the concentrations of petroleum and metals had increased. It further concluded that the marina activities during those years had adversely impacted the soil and sediment at both the marina and MABE's adjacent property. See Petitioner's Exhibit 37. A copy of the report was provided to both the District Office and Shannon Sue.

      18. After receiving the report, on November 14, 2008, the District Office staff conducted another inspection to "identify any potential hazardous waste material discharge(s) or source(s) of contamination at the property." The staff found evidence of

          
          

          leaking containers, an engine "bone yard" along the fence line with the MABE property, unlabeled containers, and stains under the fuel tank. The inspection essentially confirmed the findings of E Science, Inc.; accordingly, the District Office concluded that a Site Assessment Report (SAR) under Chapter 62- 780 was necessary in order to determine the extent of contaminants on the property. A SAR assesses and describes the extent of contamination and makes recommendations as to how to address it. On February 24, 2009, the District Office sent a letter to the Canonicos, as registered agents for Shannon Sue and JHLM, advising them that "contaminants may have been released or discharged into the environment." The letter required Shannon Sue and JHLM to initiate a site assessment within 60 days, and to file a SAR that complied with the requirements of Chapter 62-780 no later than July 13, 2009. See Petitioner's Exhibit 26. The District Office subsequently extended the due date for the SAR to October 1, 2009.

      19. By letter dated April 24, 2009, the Department also advised the Canonicos that an "ongoing investigation," preliminary to agency action, revealed the possible mooring of commercial vessels at the dock on two occasions, which was prohibited under the submerged land lease. (Based upon visual sightings confirmed by photographs, MABE had earlier advised the District Office that this occurred on a frequent basis, but

          
          

          subsequent inspections by the District Office resulted in only two observations of commercial vessels at the dock.) The letter further reminded the Canonicos that, pursuant to Specific Condition 24, boat repairs with the potential to discharge pollutants or hazardous substances into the adjacent waters were prohibited under the ERP. See Petitioner's Exhibit 21. As noted above, during the July 2008 inspections, Mr. Canonico admitted to Mr. Keirn that there were "multiple violations" of that condition, including multiple discharges of oil and grease associated with engine repairs.

      20. Assuming that the matter could be resolved by consent order, on November 18, 2009, Mr. Keirn submitted for review by his supervisor a "Civil Penalty Authorization Southeast Florida District," which outlined the nature of the violations observed and proposed penalties for those violations. See Petitioner's Exhibit 12. By now, additional violations had been observed through more inspections, including, as noted above, the mooring of commercial vessels at the marina; a failure by JHLM to construct an "exfiltration trench" as required by the original 1996 permit, file annual reports for that system, and regularly maintain the system; a failure to notify staff of the commencement of construction; and a failure to maintain used oil storage containers within secondary containment structures and to legibly label them.

          
          

      21. The Department has issued an Administrative Directive entitled Settlement Guidelines for Civil and Administrative Penalties (Settlement Guidelines), effective July 17, 2007, which contains guidelines that "are intended to provide a rational, fair and consistent method for determining the appropriate amount of civil and administrative penalties the Department should seek from responsible parties in settling enforcement actions." See Department Exhibit 3. They are intended only "for internal staff guidance," and the District Office is authorized "to deviate from these guidelines . . . when doing so will result in better compliance and better capability for carrying out the mission of the agency." Id. at

      1. Relying in part upon that document, Mr. Keirn recommended a

         
         

         $27,500.00 civil penalty for violations of permit conditions,

         
         

         $2,500.00 for the lease violation, and $500.00 for investigative costs, or a total civil penalty of $30,500.00. The Penalty Rationale is found on page 3 of that exhibit. This recommendation was approved by the District Office Director on December 11, 2009, and was incorporated into a proposed consent order. As pointed out by Mr. Keirn, the purpose of the proposed settlement was not to collect fines, but to restore and protect the environment.

         1. By email dated January 11, 2010, Mr. Keirn provided the Canonicos with a copy of the draft consent order. See

            
            

            Petitioner's Exhibit 13. He asked that they review it and be prepared to discuss the violations and penalties the following week. A series of emails between the parties ensued over the next month or so for the purpose of discussing the cited violations and related penalties. Mr. Keirn's email also advised them to "get [the SAR] in ASAP" by mail, hand-delivery, or email. The next day, January 12, 2010, the Canonicos submitted a SAR to the Department.

         2. On January 26 and February 1, 2010, the Canonicos sent emails to Mr. Keirn providing their explanation for each violation "in the hope of reducing the penalties outlined in the Consent Order." See Petitioner's Exhibits 14 and 15. One explanation for violating the prohibition against major repairs (Specific Condition 24) was a statement that the Canonicos believed that engine repairs, scraping of boat hulls, and the like were "minor" repair work. Mr. Keirn noted in an email to his supervisor that the Canonicos' proposed "amounts are seriously too low[,]" that "the statements are skewed to their position," and that "[the explanations] are not a logical reason for reduction." See Petitioner's Exhibit 15.

         3. By letter dated March 29, 2010, the Department advised the Canonicos that the SAR submitted on January 12, 2009, contained a number of deficiencies, that additional work must be undertaken, and that an Addendum to the SAR must be submitted

            
            

            within sixty days, or by the end of May 2010. See Petitioner's Exhibit 28.

         4. Around the same time that the Department requested an Addendum to the SAR, on March 25 and April 1, 2010, Respondents executed a Consent Order to resolve all outstanding violations. John and Barbara Canonico signed the Consent Order on behalf of the non-agency Respondents.

         5. In general terms, the Consent Order noted that Respondents collectively had failed to comply with the ERP conditions in the following respects: they failed to construct the stormwater system in accordance with the permit; they failed to maintain the stormwater system, have it inspected by an engineer on an annual basis, or have an engineer file annual reports; they repeatedly conducted non-minor repairs, maintenance, and painting of vessels resulting in unauthorized discharges of contaminants; they failed to install channel markers; they failed to notify the Department of the ownership transfer to Shannon Sue; they failed to submit written notice to the Department at least 48 hours prior to the commencement of construction of the project; they failed to limit the use of the marina to the mooring of recreational vessels; and they failed to properly contain or maintain the used oil disposal storage containers within a secondary storage structure. See Department Exhibit 2 at 3. In addition, the Consent Order noted that based

            
            

            upon the E Science, Inc. report, there were concentrations of total recoverable hydrocarbons in soils that would reasonably leach into groundwater; that a polluting condition had occurred; and that Respondents had failed to submit a SAR by the

            October 1, 2009 deadline. Id. at 4. Finally, the Consent Order noted that Shannon Sue had failed to obtain the required lease since acquiring ownership of the property in 2002. Id.

         6. Rather than imposing the $30,500.00 penalty originally recommended by Mr. Keirn, as a result of negotiations between the parties, the Department agreed to reduce the penalties in the Consent Order to $17,750.00 as settlement of the matter, including $500.00 in costs and expenses for investigating the matter. The penalties were to be paid in installments, with the first installment of $5,000.00 due immediately. This installment has been paid. The Consent Order required additional corrective action, the filing of a SAR, and the obtaining of a lease by Shannon Sue within certain timeframes.

         7. Because the Department's primary goals when resolving enforcement actions are remediation and avoiding protracted litigation rather than collecting fines, it is not unusual for a final consent order to have a lower civil penalty than that originally proposed. As explained by a Department witness, in this case its goals were (a) to avoid protracted litigation that would delay the implementation of corrective actions; (b) to

            
            

            require Respondents to quickly assess and begin the cleanup of contamination; (c) to restore and protect the environment as quickly as possible; and (d) to require Respondents to remove and contain all activities on the property that are prohibited by the Permit and Lease. All of these considerations were taken into account in arriving at the terms and conditions of the final Consent Order.

         8. Immediately after the Consent Order was executed, MABE timely filed its Petition challenging it on numerous grounds including a failure by the Department to address all violations in the Consent Order; a failure to recognize continuing violations; a failure to impose an adequate penalty; a failure to incorporate language into the Consent Order to ensure that all conditions will be met; and a failure to consider all relevant information at the time the Consent Order was executed.

         9. By letter dated June 29, 2010, the Department advised the Canonicos that no response to its March 29, 2010, letter had been received, and that the SAR Addendum had not yet been filed. The letter noted that even though the Consent Order had been challenged, which "placed the timeframes contained therein in a 'proposed' status," the SAR Addendum was overdue and that it must be submitted "immediately." See Petitioner's Exhibit 29. The Canonicos did not respond to this letter. At hearing, a Department employee interpreted the language in the June 29

            
            

            letter to mean that until this proceeding has been concluded, the fine and corrective action are temporarily stayed.

            Apparently, the Canonicos have assumed the same thing and have not performed any remedial action or paid any further penalties while this action is pending.

   2. Rationale for the Consent Order

1. The Consent Order addressed the violations described in Finding of Fact 26, supra, and required Respondents to pay a civil penalty of $2,000.00 for their failure to construct the stormwater system in accordance with the Permit. There was no negotiated reduction or increase in the $2,000.00 amount. This amount was based on a provision in the Environmental Litigation Reform Act (ELRA) codified in Section 403.121, Florida Statutes. That statute prescribes the penalties that must be imposed when the Department pursues administrative remedies for violations of Chapter 403. A Notice of Violation (NOV) must be issued to trigger the ELRA process. In this case, the ELRA process was not required since a NOV was never issued, but the Department elected to impose that penalty.

2. The Consent Order requires Respondents to repair the stormwater system and submit to the Department an as-built certification form signed and sealed by a professional engineer that the system meets or exceeds the requirements of the permitted activity. In essence, Respondents are required to

   
   

   re-build the system and certify that it is built consistent with the Permit.

3. No water quality data was introduced indicating any degradation of water quality at the marina from the exfiltration system not being built according to the Permit.

4. To address Respondents' failure to maintain the stormwater system, inspect it, and submit reports to the Department, enforceable conditions were added to the Consent Order, including the filing of reports that the Permit did not previously contain, and a stipulated penalty of $100.00 per day for each day they fail to submit the required reports.

5. The Consent Order requires Respondents to pay a civil penalty of $3,500.00 for their failure to maintain the stormwater system, inspect it, and submit reports to the Department. This amount was reduced in negotiations from an initial amount of $7,000.00. Exercising its discretion, the Department did not consider economic gain by Respondents in assessing the penalty. As noted earlier, the Department's primary goal in negotiating the Consent Order was to avoid a long and uncertain litigation process that would delay an enforceable order requiring Respondents to immediately implement a Chapter 62-780 waste assessment and cleanup.

6. In order to address the finding that Respondents were conducting repairs and maintenance of vessels at the upland

   
   

   portion of the marina in violation of the Permit, the Department included language in the Consent Order that specifically defined a "major repair," which was not included in the existing Permit. This will make enforcement easier by clarifying any ambiguity regarding what activities are prohibited. It also required that any such activity must be conducted off-site, an additional requirement that was not included in the existing Permit.

7. The Consent Order assessed a penalty of $5,000.00 for the finding that Respondents were conducting repairs and maintenance of vessels at the upland portion of the marina.

   This amount was obtained using the Settlement Guidelines. Under the Penalty Matrix in that document, which classifies violations at three levels of potential for harm (major, moderate, and minor), the violation was identified as major, resulting in an amount of $10,000.00. This amount was later reduced to

   $5,000.00 during negotiations. However, the Department achieved its goal of binding Respondents to an enforceable agreement that would require them to immediately implement a Chapter 62-780 assessment and cleanup.

8. In order to address the violation that Respondents failed to install channel markers, the Consent Order contained a provision that required them to apply for the required permits and install the markers within 30 days of receipt of the permits. The Consent Order also contained a stipulated penalty

   
   

   paragraph where Respondents would pay $100.00 per day for each day of failing to comply with the marker requirements. The Department is not precluded by the stipulated penalties from pursuing any statutory remedies or other penalty options available to it.

9. The Consent Order assessed a $750.00 penalty for Respondents' failure to install the channel markers, which was less than the original proposed fine of $2,000.00 based on ELRA guidelines. To avoid uncertain and costly litigation, however, and to get Respondents under an enforceable agreement to implement a Chapter 62-780 assessment and cleanup, the Department reduced the penalty.

10. In order to address the finding that Respondents failed to notify the Department of its ownership transfer to Shannon Sue, the Consent Order required payment of $250.00. Although ELRA guidelines specified a $1,000.00 penalty, this amount was lowered during negotiations to avoid protracted litigation and to get Respondents under an enforceable agreement to implement Chapter 62-780. The Consent Order also requires submission of a $555.00 processing fee along with supporting documents for assignment of the lease to the proper party. In addition, a penalty of $500.00 was assessed for failure to obtain the required lease after ownership transfer, along with stipulated penalties of $100.00 per day for failure to do so.

    
    

11. For Respondents' failure to notify the Department within 48 hours prior to commencing construction at the marina, there is no corrective action required. However, the Department assessed a $250.00 penalty, which was lowered during negotiations from the ELRA penalty of $1,000.00 for the reasons expressed above.

12. For Respondents' unauthorized mooring of commercial vessels, the Consent Order requires a penalty of $2,500.00, which was based on a second violation under Rule 18-14.002(4). Although MABE submitted an affidavit, dated photographs, and testimony to establish multiple violations of the rule, the Department opted to rely only upon the two violations that its inspector observed.

13. For Respondents' used oil violation, the Consent Order requires removal of all containers, material, or equipment at the marina that handle or contain petroleum or hazardous substances greater than one quart in quantity, unless they are maintained in their original container or an independent and secondary containment system which is designed to contain discharges to the environment and is secure from the weather. The assessed penalty of $2,000.00 was lowered from the ELRA penalty of $4,000.00 during negotiations for the reasons expressed above.

    
    

14. To address the finding that a polluting condition had occurred at the marina and a SAR was not timely submitted, the Department negotiated an enforceable agreement that requires Respondents to commence and complete all tasks required under Chapter 62-780 within certain timelines. A penalty was not assessed because the Department desired to get Respondents under an enforceable agreement to immediately implement the assessment and cleanup corrective actions. In addition, by not imposing a fine, the violator has more resources to assess and remediate any contamination, which is often a very expensive undertaking.

15. Under Rule 18-14.002, a person is subject to a fine of up to $10,000.00 for each offense constituting a knowing refusal to comply or a willful violation of the provisions of Chapter 253, Florida Statutes. The Department may impose fines not to exceed $2,500.00 for the first offense; otherwise, approval of the Board is required. Subsequent offenses carry a fine of

    $1,000.00 to $10,000.00. In this case, the Consent Order imposed a $2,500.00 fine for violation of the Lease and a

    $500.00 fine for violating Section 253.77, Florida Statutes. Neither fine was shown to be unreasonable under the circumstances.

16. The penalty amounts, plus $500.00 for Department costs, were mistakenly summed as $17,750.00 in paragraph 25 of the Consent Order. The correct amount is $17,250.00.

    
    

17. In summary, the Consent Order was issued to settle existing outstanding violations of law and requires Respondents to pay penalties, reimburse Department costs, and take corrective measures. It also establishes a framework for compliance. Taking into consideration all of the circumstances, the terms are a reasonable exercise of the Department's enforcement discretion.

18. Having incurred substantial expenditures in legal fees and site assessment costs in attempting to bring its neighbor into compliance (which probably total much more than the civil penalties assessed against Respondents), and waiting years for the Department to take action, MABE is understandably dissatisfied with many of the terms and conditions of the Consent Order. One of MABE's concerns is that given Respondents' history of failing to comply with ERP and lease conditions for more than a decade, they will not comply with the assessment and remediation requirements of Chapter 62-780. However, the Consent Order is an enforceable agreement that compels immediate compliance with those rules. The Consent Order spells out in clear terms the ability of the Department to seek the judicial imposition of damages or civil penalties, or other appropriate relief, for any violations of the Consent Order. Because of Respondents' prior conduct, which amounted to a clear disregard of permit terms and conditions, it is presumed

    
    

    that the Department will respond quickly to reported violations, if any occur, and take appropriate action.

19. MABE also questions the adequacy (and accuracy) of the penalties. As explained in the Conclusions of Law, this issue is a matter solely within the discretion of the agency. In the same vein, MABE contends that the District Office did not take into account all of the violations that have occurred over the years, made mistakes in calculating the penalties, and failed to consider the fact that Respondents have continued to violate certain Permit and Lease conditions since the enforcement action began. Although some violations were not addressed, some errors in calculating penalties were made, and in some instances multiple violations were counted as a single violation for purposes of calculating a penalty, the Consent Order requires that the violator undertake corrective actions that are designed to remediate all prior violations, strictly comply with new terms and conditions, and subject it to stern penalties should future violations occur.

    CONCLUSIONS OF LAW

    
    

20. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

21. MABE is required to present evidence showing how its substantial interests are affected by the terms and conditions

    
    

    of the Consent Order. The evidence establishes that the activities at the marina may have resulted in contamination of MABE's property, particularly at the fence line. MABE has standing to initiate this proceeding.

22. A consent order is a consensual administrative order authorized under Section 120.57(4), Florida Statutes, that is agreed to by the Department and one or more respondents. There are two types of consent orders, one that is a substitute for a permit, the other that is designed to bring a violator back into compliance with the law. See, e.g., Williams v. Moeller and Dep't of Envtl. Reg., Case Nos. 86-1095 and 86-1096 (DOAH Aug. 6, 1986; DER Nov. 4, 1986). In the latter type of case, the scope of review focuses on whether the action taken by the Department is a reasonable exercise of its enforcement discretion. See Sarasota Cty. v. Dep't of Envtl. Reg. & Falconer, Case No. 86-2462 (DOAH Jan. 22, 1987; DER March 8, 1987). When a third party challenges a consent order, the Department has the burden of proving the consent order is a reasonable exercise of its enforcement discretion. The appropriate standard of review is whether the Department abused its enforcement discretion in agreeing to the settlement. If the Department is found not to have abused its discretion, the consent order is adopted; if that burden of proof is not met, then the consent order is voided. See Lambou, et al. v. Dep't

    
    

    of Envtl. Protection, et al., Case No. 02-4601, 2003 Fla. ENV LEXIS 209 at *4 (DOAH June 23, 2003; DEP Sept. 22, 2003). If

    the consent order is voided, the parties must re-enter negotiations before a replacement consent order can be entered. Id. at *6.

23. The abuse of discretion standard does not turn on whether the consent order embodies the best possible settlement or even whether a better settlement could have been reached. Rather, the settlement that was reached must only be reasonable under the circumstances. It merely needs to be appropriate given all of the factors that must be considered by the agency in reaching an agreement. In exercising its discretion, the Department can consider factors such as the nature of the violation, the sufficiency of any penalty, the availability of Department resources, Department enforcement priorities, and the harm that might result from restoration. Id. at * 7. Depending on those circumstances, the Department may or may not seek total restoration of damage caused by a violation. Enforcement discretion also includes the decision to pursue enforcement in the first instance.

24. The more persuasive evidence establishes that the terms of the Consent Order are a reasonable exercise of the Department's enforcement discretion under the proven circumstances. MABE did not present any evidence that the

    
    

    corrective measures outlined in the Consent Order were unreasonable.

25. MABE contends that, given Respondents flagrant disregard of the law, the civil penalties in the Consent Order are insufficient to deter Respondents from future violations of the ERP and Lease. In its Proposed Recommended Order, it devotes considerable argument for the purpose of demonstrating that the penalties were improperly calculated, including deviations from the Settlement Guidelines, mathematical errors, the treatment of multiple violations as a single violation, and a failure to address all violations. While Respondents' conduct was clearly reprehensible and even egregious at times, and should have been curtailed years ago when first brought to the attention of the Department in 2003, the adequacy of penalties lies within the discretion of the agency, rather than the undersigned. See North Fort Myers Homeowners Ass'n v. Dep't of

    Envtl. Reg., Case No. 91-0235 (Recommended Order of Dismissal Oct. 31, 1991), adopted, 1992 Fla. ENV LEXIS 14 (DER Jan. 29,

    1992). Moreover, the Settlement Guidelines used by the Department are not binding and allow the Department to deviate from them whenever this will result in better compliance. As to a contention that the Department failed to consider all violations, and thus lacked the necessary information to make an informed decision before executing the Consent Order, "with

    
    

    regard to [a Consent Order's] claimed failure to address violations not covered under the Consent Order or potential future violations, . . . [t]he decision to initiate enforcement action is a matter that rests within the enforcement discretion of the Department." Id. at *7.

26. The evidence supports a conclusion that the Consent Order is a reasonable exercise of the Department's enforcement discretion and should not be voided.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that the Department of Environmental Protection enter a final order ratifying and approving Consent Order OGC No. 08-1823 as final agency action of the Department.

DONE AND ENTERED this 4th day of November, 2010, in Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 4th day of November, 2010.

ENDNOTES

1/ All rule references are to the current version of the Florida Administrative Code.

2/ Unless otherwise noted, all statutory references are to the 2009 version of the Florida Statutes.

3/ The Intent to Issue indicates that when the application was filed, 12 wet slips and 25 dry storage slips existed at the project site, and that 6 of the slips were in a marina basin and would not be changed, while the other 6 wet slips were at a dock outside the basin.

COPIES FURNISHED:

Lea Crandall, Clerk

Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

Thomas M. Beason, General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

James M. Porter, Esquire James M. Porter, P.A.

2950 SunTrust International Center One Southeast Third Avenue

Miami, Florida 33131-1712

Francine M. Ffolkes, Esquire Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

John S. Yudin, Esquire Guy, Yudin & Foster, LLP

55 East Ocean Boulevard Stuart, Florida 34994-2214

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days of the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will render a final order in this matter.

Docket for Case No: 10-002334

Orders for Case No: 10-002334