STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHILDREN'S HOUR DAY SCHOOL,

Petitioner,

vs. Case No. 14-4724RX

DEPARTMENT OF CHILDREN AND FAMILIES,

Respondent.

/

FINAL ORDER

Pursuant to notice, an oral argument was held in this case on December 23, 2014, before Edward T. Bauer, an Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Howard J. Hochman, Esquire

Law Offices of Howard J. Hochman

7695 Southwest 104th Street, Suite 210

Miami, Florida 33156

For Respondent: Paul Sexton, Esquire

Department of Children and Families 1317 Winewood Boulevard

Building 2, Room 204

Tallahassee, Florida 32399 STATEMENT OF THE ISSUE

The issue in this case is whether Florida Administrative Code Rule 65C-22.010(2)(e)2.a. constitutes an invalid exercise of delegated legislative authority.

PRELIMINARY STATEMENT

On October 10, 2014, Petitioner Children's Hour Day School ("Petitioner") filed with the Division of Administrative Hearings a "Petition for Formal Administrative Determination of the Invalidity of Administrative Rule" ("Petition"). The Petition alleges that rule 65C-22.010(2)(e)2.a. constitutes an invalid exercise of delegated legislative authority in that it authorizes the Department of Children and Families ("the Department") to issue a formal warning letter——an action that, according to Petitioner, affects a licensee's substantial interests——without offering the licensee a point of entry into the administrative process.

In relevant part, rule 65C-22.010 provides (with the challenged language underlined for emphasis):

(1) Definitions.

* * *

1. "Violation" means a finding of noncompliance by the department or local licensing authority of a licensing standard.

   
   

   * * *

   
   

   2. "Class II Violation" is the second or subsequent incident of noncompliance with an individual Class II standard. Class

   II violations are less serious in nature than Class I violations, and could be anticipated to pose a threat to the health, safety or well-being of a child, although the threat is not imminent.

   
   

   * * *

   
   

2. Disciplinary sanctions for licensing violations that occur within a two year period shall be progressively enforced as follows:

* * *

2. Class II Violations

1. For the first violation of a Class II standard, the department shall issue a formal warning letter stating the department's intent to take administrative action if further violations of the standard occur. The violation will be classified as "Technical Support."

   
   

2. For the second violation of the same Class II standard, the department shall issue an administrative complaint . . . .

With the undersigned's leave, Petitioner subsequently filed an "Amended Petition for Administrative Determination of the Invalidity of Administrative Rule" ("Amended Petition"), the gravamen of which is identical to the original Petition.1/

Although initially scheduled for October 31, 2014, the final hearing was continued to December 5, 2014, at the request of Petitioner. On December 4, 2014, the parties notified the undersigned that an evidentiary hearing would not be necessary and that they had stipulated to the facts and exhibits necessary to resolve the Amended Petition. During a phone conference on the same date, the undersigned and the parties agreed that the final hearing should be canceled; that proposed final orders

would be submitted no later than December 19, 2014; that oral argument would be heard via telephone conference call on December 23, 2014; that the transcript of the oral argument would be filed by January 12, 2015; and that a final order would issue no later than January 19, 2015.

In preparing this Final Order, the undersigned has considered the parties' joint exhibits (numbered 1 through 6); the stipulated facts enumerated in the December 4, 2014, Joint Prehearing Stipulation; the arguments presented during the December 23, 2014, oral argument; and the proposed final orders,2/ which Petitioner and the Department filed, respectively, on December 18 and 19, 2014.

Unless otherwise indicated, all rule and statutory references are to the current versions.

FINDINGS OF FACT

1. The Parties

   
   

   1. Petitioner is a Florida corporation licensed by the Department to operate a child care facility at 11101 Southwest 184th Street, Miami, Florida.

   2. The Department is responsible for the licensure and regulation of child care facilities pursuant to sections 402.305 and 402.310, Florida Statutes.

   3. The Department is an "agency" for the purposes of the Administrative Procedure Act. § 120.52(1)(a), Fla. Stat.; Dep't

      
      

      of Child. & Fam. Servs. v. I.B., 891 So. 2d 1168, 1173 (Fla. 1st

      
      

      DCA 2005)("[T]he Administrative Procedure Act applies to DCFS, no less than to every other 'state department, and each departmental unit.'").

2. Background

   
   

   1. On or about August 6, 2014, a Department employee conducted an inspection of Petitioner's child care facility. Thereafter, on August 16, 2014, Petitioner received from the Department two formal warning letters.

   2. In addition to listing Petitioner's business name, address, and license number, each warning letter included the following language at the top of the page:

      This serves as a formal Administrative Warning that the next violation of a licensing standard outlined in this notice, will result in an administrative fine. The Department is authorized to impose administrative fines as provided in section 402.310, Florida Statute[s], 65C-20.012 or 65C-22.010, Florida Administrative Code.

      
      

      (emphasis added).

      
      

   3. Although the reference to a "next violation" plainly indicated that the Department had made conclusive findings——as opposed to allegations——of wrongdoing, any ambiguity on that point was dispelled by the "Violation Standard" sections of the warning letters. Indeed, the definitive-sounding verbiage of

      
      

      those sections, which is quoted below, found Petitioner in violation of numerous "Class II" standards:

      Ratio Sufficient rule 65C-22.001(4)(a)(b) & 402.305(4), F.A.C.

      Class 2, A ratio of (2) staff for (8) children is required. There were (2) staff for (22) children observed.

      
      

      Supervision rule 65C-22.001(5)(a)-(d), 65C- 22.001(6)(f), 65C-22.002(4)(c)2. & 65C-

      22.007(2), F.A.C.

      Class 2, Direct supervision of children in the (mixed) group was inadequate in that (there were 22 children left alone with 2 teachers).

      
      

      Child Discipline rule 65C-22.001(8)(a)(b), F.A.C. & 402.305(12), F.S.

      Class 2, The facility's discipline practice included the use of spanking or other form of physical punishment.

      
      

      Facility Environment rule 65C- 22.002(1)(a)(b) & (7)(e)(f), F.A.C.

      Class 2, An area of the facility was observed to be a serious health hazard to children in care.

      Class 2, Furnishings, equipment or plumbing were not clean and maintained in good repair, which pose a threat to the health, safety, or well-being of the children in care.

      Class 2, Fire hazard, such as, (gasoline canister being improperly stored), was observed in the facility.

      
      

      * * *

      
      

      Supplies Labeled/Stored rule 65C- 22.002(1)(f), F.A.C.

      Class 2, The storage of potentially harmful items such as knives and/or sharp tools allowed access by children in care.

      
      

      Fencing rule 65C-22.002(4)(d)(e), F.A.C. Class 2, The facility's outdoor play space was not enclosed with fencing or walls a minimum of 4 feet in height.

      
      

      Food Preparation Area 65C-22.002(8), F.A.C. Class 2, Staff working with food did not use gloves or utensils while working with food to limit the direct contact with food.

      
      

      Access/Child Abuse or Neglect/Misrepresentation ss. 402.319, F.S. & rule 65C-22.001(9), (11), F.A.C.

      Class 2, The owner, operator, employee or substitute failed to grant access to the child care facility during the hours of operation to the licensing authority or parent/legal guardian.

      
      

      (emphasis in original).

      
      

   4. These findings, which the Department concedes are available to the public,3/ did not sit well with Petitioner, who, undeterred by the absence of any language in the warning letters offering a point of entry into the administrative process, filed a "Petition for Hearing Involving Disputed Issues of Material Fact." The hearing request, which the Department received on September 8, 2014, disputed most, if not all, of the findings contained in the warnings. In addition, Petitioner alleged in its hearing request that the warning letters affected its substantial interests in that:

      [T]he imposition of an Administrative Warning constitutes a disciplinary action which can ultimately affect Petitioner's licensure when such administrative warnings are accumulated . . . and can affect the

      
      

      professional and business reputation of Petitioner.

      
      

   5. Thereafter, in an Order to Show Cause dated September 26, 2014, the Department's deputy general counsel

      opined that a "Notice of Administrative Warning regarding Class II violations is a pre-disciplinary 'technical support' violation of licensing standards . . . and not a disciplinary action triggering the application of Chapter 120, Florida Statutes." Consistent with this view, the Order to Show Cause directed the Petitioner to demonstrate why its request for hearing should not be dismissed. Thereafter, on October 28, 2014, the Department issued a final order dismissing Petitioner's formal hearing request.

3. Instant Litigation

1. Eschewing an appeal of the Department's final order, Petitioner instead brought the instant proceeding pursuant to section 120.56(1)(a), Florida Statutes. Refined to its bare essence, the Amended Petition alleges that the issuance of a formal warning letter for a first violation of a Class II standard affects a licensee's substantial interests, thereby obligating the Department to offer a timely point of entry into the administrative process; that rule 65C-22.010(2)(e)2.a. operates to deny such an offer; and that the rule constitutes an invalid exercise of delegated legislative authority. Before

   
   

   analyzing these questions, it is first necessary to address several preliminary issues, including standing and the burden of proof.

   CONCLUSIONS OF LAW

   
   

   1. Jurisdiction & Burden of Proof

      
      

2. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding pursuant to section 120.56(1) and (3), Florida Statutes.

3. Petitioner must demonstrate the invalidity of the challenged rule by a preponderance of the evidence. Dep't of Health v. Merritt, 919 So. 2d 561, 564 (Fla. 1st DCA 2006)

   (holding that "hearings held with respect to challenges to an existing or proposed rule shall be de novo in nature and that the standard of proof shall be the preponderance of the evidence")(internal quotation marks omitted).

   1. Standing

      
      

4. Although Respondent concedes this issue,4/ it is well settled that "standing in the administrative context is a matter of subject matter jurisdiction and cannot be conferred by the parties." Abbott Labs. v. Mylan Pharms., Inc., 15 So. 3d 642,

   651 n.2 (Fla. 1st DCA 2009).

   
   

5. To establish standing, Petitioner must demonstrate that it is substantially affected by the challenged rule. In

   
   

   particular, Petitioner must first prove that the rule will result in a real and sufficiently immediate injury in fact. Ward v. Bd. of Trs. of Int. Imp. Trust Fund, 651 So. 2d 1236,

   1237 (Fla. 4th DCA 1995). Petitioner must further establish that the alleged interest is arguably within the zone of interest to be protected or regulated. Id.

6. Beginning with the question of injury in fact, it is evident that the Department's issuance of the warning letters comprises the first step of a disciplinary process that features progressively more serious sanctions upon future violations of Class II standards. Indeed, barring a chapter 120 hearing to challenge the findings contained in the warnings, Petitioner's next (i.e., second) violation of the same Class II standard will result in the imposition of an administrative fine. See Fla.

   Admin. Code R. 65C-22.010(2)(e)2.b.("For the second violation of the same Class II standard, the department shall issue an administrative complaint imposing a fine of $50 for each violation."). Accordingly, Petitioner satisfies the immediate injury prong. See Jacoby v. Fla. Bd. of Med., 917 So. 2d 358,

   360 (Fla. 1st DCA 2005)(holding that appellate satisfied the immediate injury prong because he was "subject to the licensing rules and policies of the state . . . and [had] already suffered an immediate impact because of those rules and policies").

   
   

7. The second prong of the "substantially affected" test has also been met, for Petitioner is within the zone of interest to be protected or regulated. Id. at 360 ("[I]f an individual

   is affected by licensing rules because that individual works in the area that is regulated, the 'substantially affected' requirement is satisfied."). As such, Petitioner has standing in this proceeding.

   1. Petitioner's Challenge

   
   

8. As indicated previously, Petitioner's challenge to rule 65C-22.010(2)(e)2.a. rests on three premises: that the issuance of formal warning letter for a first violation of a Class II standard affects a licensee's substantial interests and, thus, a point of entry into the administrative process must be offered; that the rule denies a licensee an offer of a point of entry under such circumstances; and that, by denying an offer of a point of entry, the rule enlarges, modifies, or contravenes the specific law implemented and, therefore, constitutes an invalid exercise of delegated legislative authority. Each issue is addressed separately below.

   1. Substantial Interests

      
      

9. It is a bedrock principle that a party whose substantial interests are affected by agency action must be afforded a clear point of entry into formal or informal proceedings under chapter 120, which point of entry cannot be

   
   

   "so remote from the agency action as to be ineffectual as a vehicle for affording [the affected party] a prompt opportunity to challenge" the decision. Fla. League of Cities, Inc. v.

   Admin. Comm'n, 586 So. 2d 397, 413 (Fla. 1st DCA 1991); Capeletti Bros., Inc., v. Dep't of Transp., 362 So. 2d 346, 348

   (Fla. 1st DCA 1978)("[A]n agency must grant affected parties a clear point of entry, within a specified time after some recognizable event in investigatory or other free-form proceedings, to formal or informal proceedings under section 120.57.").

10. Notably for present purposes, an agency action can affect a licensee's substantial interests, thereby triggering the right to a point of entry, even though the action does not seek to suspend or revoke the licensee's right to practice, convert the license to probationary status, or impose an administrative fine. See Brown v. Dep't of Prof'l Reg., 602

    So. 2d 1337, 1340 (Fla. 1st DCA 1992). In Brown, the Department

    
    

    of Professional Regulation received a complaint asserting that a licensed psychologist had failed to meet the minimum standards of professional performance. Id. at 1338. Thereafter, a probable cause panel of the Board of Psychological Examiners convened a meeting to address the allegations, at the conclusion of which the panel found that probable cause existed to believe that the licensee had committed the charged violation. Id. In

    
    

    lieu of filing a formal administrative complaint, the panel instead elected, pursuant to the version of section 455.225(4), Florida Statutes, in effect at that time, to issue a "letter of guidance." Id. The letter provided:

    This letter is sent to inform you of the action in regard to the above-referenced complaint. This complaint concerned allegations that you failed to meet minimum standards of performance in professional activities in violation of Section 490.009(2)(s), Florida Statutes.

    
    

    It has been determined that probable cause exists to believe that you have violated the provisions governing the practice of psychology. In light of the circumstances presented, however, this case is closed with issuance of this Letter of Guidance in lieu of further administrative action.

    
    

    It has been noted that your professional care for the patient's children while involved with the patient on a personal basis, without disclosure to the father and the school falls below minimum standards.

    
    

    The Panel recommends that you review current literature regarding dual relationship issues.

    
    

    Id. at 1338.

    
    

11. Thereafter, the licensee filed a request for a formal hearing, which the agency ultimately denied on the basis that the letter of guidance did not affect the licensee's substantial interests and, therefore, no hearing was required. Id. at

    1338-39. The licensee appealed, contending that a probable cause determination "is a permanent, indelible public

    
    

    record . . . and that when anybody makes inquiry to the Department concerning his record, this determination may be revealed." Id. at 1339. As for the letter of guidance, the

    licensee argued that the document constituted an order determining guilt that could be used against him in the future. Id. at 1339-40. Indeed, the record contained comments from the panel members that the letter could be used to show that the licensee "knew what he was doing, he knew it was wrong." Id. at

    1340. Finally, the licensee asserted that, because each of these actions affected his substantial interests, he was entitled to an administrative hearing pursuant to section 120.57, Florida Statutes. Id. The first district agreed,

    holding:

    
    

    [A] letter of guidance affects the licensee's substantial interests as it can be accessed by members of the public as well as the Board and can be used against

    Dr. Brown in the event of future proceedings. We hold, therefore, that the probable cause determination and letter of guidance do affect Dr. Brown's substantial interests within the meaning of section 120.57, and that Dr. Brown adequately and timely advised the Board and the Department that this probable cause proceeding involved disputed issues of fact, and that Dr. Brown was thus entitled to a section 120.57 hearing as requested.

    
    

    Id. at 1340 (emphasis added); see also W. Frank Wells Nursing Home v. Ag. for Health Care Admin., 27 So. 3d 73, 74 (Fla. 1st

    
    

    DCA 2009)(holding that a statement of deficiencies constituted agency action requiring an administrative hearing).5/

12. Applying the foregoing authority to the instant case, it is evident that the issuance of a formal warning letter pursuant to rule 65C-22.010(2)(e)2.a. affects a licensee's substantial interests. First, as in Brown, the Department is obliged to release a copy of a warning letter to any inquiring member of the public. Moreover, a formal warning letter, like the letter of guidance in Brown, makes specific findings of misconduct. Finally, the issuance of the formal warning letter carries potential downstream consequences, as rule 65C- 22.010(2)(e) contemplates that subsequent violations of the same Class II standard within a two-year period expose a licensee to increasingly harsh penalties.

    1. Deprivation of a Point of Entry

    
    

13. Having concluded that a licensee's substantial interests are affected by the issuance of a formal warning letter for the first violation of a Class II standard, the undersigned turns next to Petitioner's assertion that rule 65C- 22.010(2)(e)2.a. operates to deny licensees an offer of a point of entry into the administrative process.

14. The undersigned begins with the relevant portions of rule 65C-22.010, which provide:

    
    

    65C-22.010 Enforcement.

    
    

    1. Definitions.

       
       

       * * *

       
       

       (d) "Violation" means a finding of noncompliance by the department or local licensing authority of a licensing standard.

       
       

       * * *

       
       

       2. "Class II Violation" is the second or subsequent incident of noncompliance with an individual Class II standard as described on CF-FSP Form 5316. Class II violations are less serious in nature than Class I violations, and could be anticipated to pose a threat to the health, safety or well-being of a child, although the threat is not imminent.

       
       

       * * *

       
       

    2. Disciplinary Sanctions.

       
       

       (a) Enforcement of disciplinary sanctions shall be applied progressively for each standard violation. In addition, providers will be offered technical assistance in conjunction with any disciplinary sanction. The department shall take into consideration the actions taken by the facility to correct the violation when determining the appropriate disciplinary sanction.

       
       

       * * *

       
       

       (e) Disciplinary sanctions for licensing violations that occur within a two year period shall be progressively enforced as follows:

       
       

       * * *

       
       

       2. Class II Violations.

       
       

       1. For the first violation of a Class II standard, the department shall issue a formal warning letter stating the department's intent to take administrative action if further violations of the standard occur. The violation will be classified as "Technical Support."

          
          

       2. For the second violation of the same Class II standard, the department shall issue an administrative complaint imposing a fine of $50 for each violation. This violation, and subsequent violations, of the same standard within a two year period will be classified as "Class II."

          
          

       3. For the third violation of the same Class II standard, the department shall issue an administrative complaint imposing a fine of $60 per day for each violation.

          
          

       4. For the fourth violation of the same Class II standard, the department shall issue an administrative complaint placing the provider's license on probation status for a period not to exceed six months, and the department shall also issue an administrative complaint imposing an additional fine of $75 per day for each violation.

          
          

       5. For the fifth and subsequent violation of the same Class II standard, the department shall issue an administrative complaint to suspend, deny, or revoke the license, and the department shall also issue an administrative complaint imposing an additional fine of $100 per day for each violation.

       
       

       (emphasis added).

       
       

15. It is true, as the Department has repeatedly noted, that the phrases "administrative hearing" and "point of entry"

    
    

    appear nowhere in the text of the rule. Nevertheless, it is evident from the rule's language and structure that a licensee will not be offered a point of entry in cases involving a first violation of a Class II standard.

16. To understand why this is so, it is helpful to consider first the language relating to second and subsequent violations of Class II standards. As quoted above, the rule provides that, under such circumstances, the Department "shall" issue an "administrative complaint"——language indisputably (and correctly) signaling that the licensee will be offered a point of entry into the administrative process. See Fla. Admin. Code

    R. 28-106.2015(4)(d)(requiring administrative complaints to include a statement that the licensee "has the right to request a hearing to be conducted in accordance with Sections 120.569 and 120.57, F.S."); see also Aaron Cox Constr., Inc., v. Dep't of Bus. & Prof'l Reg., Case No. 09-1611F, 2009 Fla. Div. Adm.

    Hear. LEXIS 1138, *16 (Fla. DOAH Sept. 2, 2009)(explaining that an agency's filing of an administrative complaint constitutes a "clear point of entry for administrative proceedings").

17. In contrast, the rule provides that, for a first violation of a Class II standard, the Department:

    [S]hall issue a formal warning letter stating the department's intent to take administrative action if further violations of the standard occur.

    
    

    Fla. Admin. Code R. 65C-22.010(2)(e)2.a.

    
    

18. Several aspects of the foregoing language are notable.

    
    

    First, the reference to "further violations" plainly indicates that a warning letter operates not to allege wrongdoing (as a charging instrument would) but, rather, to summarily adjudicate

    misconduct on the part of a licensee. Such a peculiar usurpation of DOAH's fact-finding role is a strong indication that, even in cases involving disputed factual issues, no administrative proceedings will follow.

19. Further, and more important, the phrase "to take administrative action if" denotes that, as far as the rule is concerned, the issuance of a formal warning letter does not constitute administrative action; and if a warning letter does not constitute administrative action (an erroneous premise, as explained in the preceding section of this Order), it necessarily follows that the letter would not include any language offering a point of entry into the administrative process.

20. If any doubt remains——and the undersigned has none——this understanding of the rule is consistent with, and bolstered by, the Department's course of performance. In particular, the Department's formal warning letters, including the one issued to Petitioner, contain no language offering a point of entry into the administrative process. Moreover, it is

    
    

    evident that the Department will deny, as it did in Petitioner's case, a request for an administrative hearing to dispute a warning letter's findings. Indeed, upon the filing of Petitioner's formal hearing request, the Department's deputy general counsel issued an "Order to Show Cause" that read:

    The two Notices of Administrative Warning

    . . . were not formal administrative complaints and the Department did not propose to take any action to deny, suspend, or revoke Respondent's license, convert that license to probation status or to impose an administrative fine. Per Rule 65C- 22.010(2)(e)2.a., F.A.C., the Notices of Administrative Warning were "formal warning letters stating the department's intent to take administrative action if further violations of the cited standards occur."

    
    

    A Notice of Administrative Warning regarding Class II violations is a pre-disciplinary "technical support" violation of license standards per Rule 65C-22.010(2)(e)2.a., F.A.C., and not a disciplinary action triggering the application of Chapter 120, Florida Statutes. . . . Accordingly, it does not appear petitioner is entitled to the hearing it has requested.

    
    

    (emphasis in original).6/

    
    

21. The foregoing passage leaves no doubt as to the Department's stance: a formal warning letter does not affect a licensee's substantial interests, so a point of entry need not be offered or granted. It should be no surprise, then, that rule 65C-22.010(2)(e)2.a. manifests this erroneous position.

    
    

22. For the reasons elucidated above, Petitioner has demonstrated by a preponderance of the evidence that rule 65C- 22.010(2)(e)2.a. operates to deny licensees an offer of a point of entry into the administrative process. In light of this determination, it is necessary to reach the third issue raised in the Petition: does the rule's denial of an offer of a point of entry constitute an invalid exercise of delegated legislative authority?

    C. Invalid Exercise of Delegated Legislative Authority

    
    

23. The undersigned begins with section 120.56(3)(a), Florida Statutes, which reads:

    1. CHALLENGING EXISTING RULES; SPECIAL PROVISIONS.

       
       

       1. A substantially affected person may seek an administrative determination of the invalidity of an existing rule at any time during the existence of the rule. The petitioner has a burden of proving by a preponderance of the evidence that the existing rule is an invalid exercise of delegated legislative authority as to the objections raised.

    
    

24. "Invalid exercise of delegated legislative authority" is defined to include, inter alia, situations where the existing rule:

    [E]nlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by

    s. 120.54(3)(a)1.

    
    

    § 120.52(8)(c), Fla. Stat.

    
    

25. Also included in section 120.52(8) is a concluding paragraph——sometimes called the "flush-left paragraph"——in which the legislature expressed a clear intent to curb agency rulemaking authority:

    A grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. An agency may adopt only rules that implement or interpret the specific powers and duties granted by the enabling statute. No agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious or is within the agency’s class of powers and duties, nor shall an agency have the authority to implement statutory provisions setting forth general legislative intent or policy. Statutory language granting rulemaking authority or generally describing the powers and functions of an agency shall be construed to extend no further than implementing or interpreting the specific powers and duties conferred by the enabling statute.

    
    

26. The flush-left paragraph has been the subject of numerous appellate decisions, perhaps the most notable being Southwest Florida Water Management District v. Save the Manatee Club, Inc., 773 So. 2d 594 (Fla. 1st DCA 2000). There, the

    court considered a challenge to rule provisions which granted exemptions to certain permitting requirements based upon prior governmental approval. By statute, the agency had been delegated the power to establish exemptions, but the power was limited: the agency could grant only those exemptions that did

    
    

    not "allow significant adverse [environmental] impacts to occur." Id. at 600.

27. Examining the then-recently revised flush-left paragraph, the court found clear and unambiguous the language prohibiting agencies from adopting any rules except those "that implement or interpret the specific powers and duties granted by the enabling statute." Id. at 599. The court observed that,

    "[i]n the context of the entire sentence, it is clear that the authority to adopt an administrative rule must be based on an explicit power or duty identified in the enabling statute.

    Otherwise, the rule is not a valid exercise of delegated legislative authority." Id.

28. In the opinion's most memorable paragraph, the court summarized its position as follows:

    [T]he authority for an administrative rule is not a matter of degree. The question is whether the statute contains a specific grant of legislative authority for the rule, not whether the grant of authority is specific enough. Either the enabling statute authorizes the rule at issue or it does not. [T]his question is one that must be determined on a case-by-case basis.

    
    

    Id. (emphasis in original). In other words, the relevant inquiry is whether the specific law being implemented evinces a legislative intent to grant the agency the specific power or specific duty behind the subject rule.

    
    

29. Against this framework, the court in Manatee Club held

    
    

    that, because the exemptions in question had been based "entirely on prior approval," and because, moreover, the enabling statute did "not provide specific authority for an exemption based on prior approval," the disputed rule provisions did "not implement or interpret any specific power or duty granted in the applicable enabling statute"; hence they were invalid. Id. at 600.

30. The first district revisited the flush-left language in Department of Children and Family Services v. I.B., 891 So.

    2d 1168 (Fla. 1st DCA 2005), a case with significant parallels to the instant proceeding. There, the department placed a child ("T.T.") in the temporary custody of I.B. and D.B., both of whom subsequently filed a joint application seeking to adopt T.T.

    Id. at 1169. The department later denied the application, approving instead the petition of two of the child's biological relatives. Id. At the time of the denial, I.B. and D.B. were

    advised, consistent with a rule in effect at that time (namely, rule 65C-16.008), that they had the right to an administrative hearing pursuant to chapter 120. I.B. and D.B. filed a timely request for a formal hearing, which the department forwarded to DOAH.

31. Shortly after I.B. and D.B.'s hearing request was referred to DOAH, a new version of rule 65C-16.008 took effect,

    
    

    which provided that "[a]doptive applicants do not have the right to appeal the department's decision on the selection of an[] adoptive home for a particular child." Id. at 1169. Almost

    immediately thereafter, the department moved to dismiss the DOAH proceeding on the ground that, pursuant to the amended rule,

    I.B. and D.B. were no longer entitled to a substantial interest hearing. Id.

32. In response, I.B. and D.B. challenged the amended rule language as an invalid exercise of delegated legislative authority, arguing that neither the "specific authority" nor the "law implemented" cited in rule 65C-16.008 authorized the department to suspend operation of the Administrative Procedure Act. The ALJ agreed and invalidated the rule. Id. at 1169.

33. On appeal, the department argued principally that the rule was valid because section 409.145, Florida Statutes, granted it broad powers and duties regarding the care of dependent children. The department also contended that, in light of the various statutory provisions that require expeditious adoptions, it was authorized to adopt any rule that accelerated the adoption process. See id. at 1171 n.4.

34. In rejecting these arguments and affirming the ALJ's order, the court explained first that, pursuant to the flush- left language of section 120.52(8), I.B. and D.B. did not have the burden to identify statutory language inconsistent with, or

    
    

    to the contrary of, the rule at issue; rather, the challengers "needed to meet only the less onerous burden of proving the absence of required statutory authority." Id. at 1171. With

    this understanding, the court held:

    
    

    Neither the "specific authority" nor the "law implemented" cited in Rule 65C-16.008 exempts the selection of adoptive homes from the Administrative Procedure Act or contemplates, much less authorizes, a rule that would have that effect. . . .

    
    

    [S]ection 409.145 confers broad powers and duties on DCFS regarding the care of dependent children and makes specific mention of "adoption placement," but has nothing to say about excluding the selection of adoptive homes from the discipline and protections the Administrative Procedure Act affords. The ALJ correctly determined that these statutes did not confer authority on DCFS to promulgate Rule 65C-16.008(2).

    
    

    In promulgating Rule 65C-16.008(2), DCFS sought to do nothing less than declare itself exempt from the Administrative Procedure Act, insofar as its decisions on applications for adoption are concerned.

    DCFS lacks this self-insulating authority. While "it is the department's rule to protect the children in the State's care and to select suitable and permanent placement for these children," absent any statutory exemption, the Administrative Procedure Act applies to DCFS, no less than to every other "state department, and each departmental unit."

    
    

    Id. at 1172-73 (internal citations omitted).

    
    

35. Returning to the case at hand, rule 65C-22.010 designates sections 402.305 and 402.310, Florida Statutes, as

    
    

    the "law implemented" and "rulemaking authority." Section

    
    

    402.305 is plainly of no help to the Department, for that provision merely prescribes a host of licensing standards; the statute contains no mention of administrative proceedings or their availability to licensees.

36. Section 402.310, the other purported basis of authority, provides, in relevant part:

    (1)(a) The department or local licensing agency may administer any of the following disciplinary sanctions for a violation of any provision of ss. 402.301-402.319, or the rules adopted thereunder:

    
    

    1. Impose an administrative fine not to exceed $100 per violation . . . .

       
       

    2. Convert a license or registration to probation status . . . .

       
       

    3. Deny, suspend, or revoke a license or registration.

    
    

    * * *

    
    

    (c) The department shall adopt rules to:

    
    

    1. Establish the grounds under which the department may deny, suspend, or revoke a license or registration or place a licensee or registrant on probation status for violations of ss. 402.301-402.319.

       
       

    2. Establish a uniform system of procedures to impose disciplinary sanctions for violations of ss. 402.301-402.319. The uniform system of procedures must provide for the consistent application of disciplinary actions across districts and a progressively increasing level of penalties from predisciplinary actions, such as

    
    

    efforts to assist licensees or registrants to correct the statutory or regulatory violations, and to severe disciplinary sanctions . . . .

    
    

    * * *

    
    

    (2) When the department has reasonable cause to believe that grounds exist for the denial, suspension, or revocation of a license or registration; the conversion of a license or registration to probation status; or the imposition of an administrative fine, it shall determine the matter in accordance with procedures prescribed in chapter 120.

    
    

    (emphasis added).

    
    

37. As reflected above, section 402.310(1)(c)2. directs the department to utilize "a progressively increasing" spectrum of penalties ranging from "predisciplinary actions" (at the low end) to revocation of the license (at the high end). Unremarkably, the statute further provides, in subsection (2), that any attempt by the Department to convert a license to probation, impose a fine, or suspend or revoke a license must be conducted in accordance with chapter 120. Nowhere does section

    402.310 specifically authorize the Department to deny an offer of a point of entry if it affects a licensee's substantial interests by some other means——e.g., the issuance of a formal warning letter.

38. The Department resists this conclusion. It argues that even if the rule operates to deny a point of entry (a question the undersigned has already settled), the rule is

    
    

    nevertheless valid because a formal warning letter constitutes "predisciplinary action," and section 402.310(2)——which, as noted above, provides that chapter 120 shall govern actions involving a fine, probation, suspension, or revocation——contains no reference to predisciplinary actions. The Department contends, in other words, that the rule passes muster because section 410.310(2) is silent concerning the applicability of

    chapter 120 to prediscipline.

    
    

39. Assuming, arguendo, that the issuance of a formal warning letter constitutes a form of "predisciplinary action" envisioned by the statute, the Department's position is foreclosed by Brown v. Department of Professional Regulation,

    602 So. 2d 1337 (Fla. 1st DCA 1992), discussed supra. There, the first district was called upon to interpret the 1989 codification of section 455.255(4), which read, in pertinent part:

    If the probable cause panel finds that probable cause exists, it shall direct the department to send the licensee a letter of guidance or to file a formal complaint against the licensee. The department shall follow the directions of the probable cause panel regarding the filing of a formal complaint. If directed to do so, the department shall file a formal complaint against the regulated professional . . . and prosecute that complaint pursuant to the provisions of chapter 120.

    
    

40. The agency in Brown contended that, because the

    
    

    foregoing language was silent concerning the availability of 120 proceedings in cases where a letter of concern is issued, and because the statute directed it to prosecute "administrative complaints" pursuant to chapter 120, a licensee receiving a letter of concern was not entitled to a point of entry. The court disagreed, rejecting the notion that a statue's silence concerning the applicability of chapter 120 authorizes the preclusion of administrative proceedings:

    The Department stated in the appealed order that while sub section 455.225(4) . . . provides for commencement of proceedings pursuant to chapter 120, Florida Statutes (1989), the subsection provides for such proceedings only upon the filing of a formal complaint. According to the Department, letters of guidance are neither formal complaints nor decisions affecting a licensee's substantial interests; thus, a licensee who receives a letter of guidance is not entitled to a section 120.57 Hearing. . . .

    
    

    Turning now to the express language of the statutes involved, subsection 455.255(4) expressly provides that if the Department files a formal complaint, such complaint shall be prosecuted pursuant to the provisions of chapter 120. This subsection does not, however, preclude a hearing pursuant to chapter 120 in the event the Probable Cause Panel decides, upon a finding of probable cause, to direct the Department to issue a letter of guidance rather than file a formal complaint.

    
    

    Id. at 1339-40 (emphasis added).

    
    

41. The short of it is this: a statute's silence concerning the applicability of chapter 120 to a particular matter does not authorize——let alone specifically authorize——an agency to disregard the fundamental requirements of the Administrative Procedure Act, even if the statute explicitly directs the agency to prosecute other matters pursuant to chapter 120. Thus, the absence of any reference to "predisciplinary actions" in section 410.310(2) does not entitle the Department to deny the protections of chapter 120 to a licensee who receives a formal warning letter.

42. For these reasons, rule 65C-22.010(2)(e)2.a. enlarges, modifies, or contravenes the specific provisions of law implemented insofar as it denies licensees an offer of a point

of entry into the administrative process. See Dep't of Child. &

Fam. Servs. v. I.B., 891 So. 2d 1168, 1172 (Fla. 1st DCA 2005).

The rule therefore constitutes an invalid exercise of delegated legislative authority, in violation of section 120.56(3)(a).

CONCLUSION

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

1. Florida Administrative Code Rule 65C-22.010(2)(e)2.a. constitutes an invalid exercise of delegated legislative authority insofar as it denies licensees an offer of a point of entry into the administrative process.

   
   

2. Petitioner shall have 30 days from the date of this Final Order to file a motion for attorney's fees and costs, to which motion it shall attach appropriate affidavits (attesting to the reasonableness of the fees) and essential documentation in support of the claim, such as time sheets, bills, and receipts.

DONE AND ORDERED this 20th day of January, 2015, in Tallahassee, Leon County, Florida.

S

Edward T. Bauer 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 20th day of January, 2015.

ENDNOTES

1/ The original Petition and Amended Petition also alleged that the rule unlawfully deprives licensees of "the assistance and technical guidance under Section 402.310." Petitioner subsequently abandoned this argument in its December 17, 2014, "Notice of Partial Voluntary Dismissal."

2/ Petitioner's Proposed Final Order is erroneously titled "Respondent's Proposed Final Order."

3/ OA Tr., pp. 15-18. The undersigned commends Respondent's counsel for his candor and professionalism.

4/ See Amended Joint Prehearing Stipulation, p. 8.

5/ In W. Frank Wells Nursing Home v. Agency for Health Care Administration, 27 So. 3d 73, 74 (Fla. 1st DCA 2009), the court held that the issuance of a statement of deficiencies "constituted Agency action requiring an administrative hearing." In so holding, the court emphasized that the test articulated in Agrico Chemical Co. v. Department of Environmental Regulation,

406 So. 2d 478 (Fla. 2d DCA 1981), "only applies to third parties," and noted that it had erroneously applied Agrico to a specifically named party (i.e., a party whose substantial interests were determined in the proceeding) in an earlier decision, Menorah Manor, Inc., v. Agency for Health Care Administration, 908 So. 2d 1100 (Fla. 1st DCA 2005).

6/ Oddly, the Department's Order to Show Cause further provided that if Petitioner again violated one of more of the Class II standards enumerated in the warnings, an administrative complaint would be filed alleging "both the occurrence of the violation(s) listed in the Notice of Administrative Warning and the subsequent violation(s) of the same standards. Thus,

Respondent's due process rights would be preserved." Joint Ex. 5. The undersigned notes that nothing in rule 65C-22.010 suggests that the "findings" contained in a formal warning letter will be litigated alongside subsequent violations of the same standard. Even assuming, however, that the rule so contemplates, such a procedure would not preserve a licensee's due process rights. Fla. League of Cities, Inc. v. Admin.

Comm'n, 586 So. 2d 397, 413 (Fla. 1st DCA 1991)("Simply providing a point of entry, however, is not enough if the point of entry is so remote from the agency action as to be ineffectual as a vehicle for affording a party whose substantial interests are or will be affected by agency action a prompt opportunity to challenge disputed issues of material fact in a

120.57 hearing.")(emphasis added).

COPIES FURNISHED:

Howard J. Hochman, Esquire

Law Offices of Howard J. Hochman

7695 Southwest 104th Street, Suite 210

Miami, Florida 33156

(eServed)

Paul Sexton, Esquire

Department of Children and Families 1317 Winewood Boulevard

Building 2, Room 204

Tallahassee, Florida 32399 (eServed)

Rebecca Kapusta, Interim General Counsel Department of Children and Families 1317 Winewood Boulevard

Building 2, Room 204

Tallahassee, Florida 32399-0700 (eServed)

Mike Carroll, Secretary

Department of Children and Families 1317 Winewood Boulevard

Building 1, Room 202

Tallahassee, Florida 32399-0700 (eServed)

Liz Cloud, Program Administrator Administrative Code

Department of State

R.A. Gray Building, Suite 101 Tallahassee, Florida 32399 (eServed)

Ken Plante, Coordinator

Joint Administrative Procedures Committee Room 680, Pepper Building

111 West Madison Street Tallahassee, Florida 32399-1400 (eServed)

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 the original notice of appeal with the Clerk of the Division of Administrative Hearings and a 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: 14-004724RX

Orders for Case No: 14-004724RX