Findings Of Fact At all times pertinent to the allegations herein, Respondent, Leslie G. Hessings, held Florida Alcoholic Beverage License Series Number 2-COP, License Number 60-351, for the Twilight Inn located at 121 Southwest Fifth Street, Belle Glade, Florida. The Palm Beach County Sheriff's Department, based on information received from street sources indicating the presence of narcotics on the Respondent's premises, on January 25, 1983, undertook an investigation of Respondent's operation through the use of a confidential informant subsequently identified as Samuel Colman. During the early part of the day on January 25, 1983, Sergeant Richard Browning of the Belle Glade office of the Palm Beach County Sheriff's Department, conducted a formal briefing of the confidential informant, Mr. Colman, as to his duties in the impending investigation. Mr. Colman was a professional informant who had worked for the Sheriff's Department before. Consequently their briefing was primarily to tell him where to go as he was already familiar with the procedures. His person and his vehicle were thoroughly searched for drugs and found to be completely clean. He then was furnished a hidden transmitter that would permit everything he said and did to be heard by Sheriff's Department agents who would be posted nearby with a receiver. Robinson and Hallar gave Colman $20.00 in money belonging to the police department and sent him to attempt to make a purchase of a controlled narcotic in the Respondent's establishment. At all times from the instant Mr. Colman was searched and wired until such time as he entered the establishment approximately 400 or 500 feet down the street from where Robinson and Hallar were parked in their car, Colman was in their sight. They saw Colman enter the bar; heard him carry on small talk with some other individuals; and order a beer. After ordering the beer he engaged in conversation with some individual about buying reefers. It appeared to Hallar and Robinson that this individual with whom Colman spoke regarding buying marijuana was the same individual from whom he purchased the beer, the bartender but neither knew who the voice belonged to. In fact he did make a purchase in the bar and after finishing his beer, left. From the time Colman left the bar until he arrived at the car where Browning and Hallar were sitting, he again was constantly in sight. When he got to the car, he pulled from his pocket two (2) bags of what was subsequently identified by the Palm Beach County Sheriff's Department Crime Lab as marijuana, and gave them to Sergeant Browning. Browning and Hallar, accompanied by Mr. Colman went back to the bar area later in the afternoon just about dusk and sent Colman back to the bar to try and buy from the owner/manager whom they knew to be Shirley Hessings. Before going in the second time, the informant was again thoroughly searched, as was his vehicle, and he was provided with police money. From the time he left the two officers until he entered the bar he was constantly in their sight. Colman was again wearing the radio transmitter and when he entered the bar the officers heard the juke box and heard Colman speak to several unidentified individuals. They also heard him speak to someone identified to them as Shirley and heard him say after leaving the bar that he bought a $8.00 bag from a black female who was identified to him as Shirley. The officers were unable to hear any of the conversation between Colman and the individual identified as Shirley because of the background noise on the tape caused by the juke box. However, when he arrived at the car where the officers were located, after being in constant sight after he left the bar until arriving at the car, he turned over to them an $8.00 bag of what was subsequently identified by the Palm Beach County Sheriff's Department Crime Lab as marijuana. Samuel Colman is dead and therefore did not testify at the hearing. The testimony of both Sergeant Browning and Detective Hallar concerning what Colman told them as to the identity of the individuals from whom he purchased the marijuana is hearsay and, as such cannot, without corroboration, serve as the basis for a finding of fact. It must be concluded therefore that while there is no doubt that Colman purchased marijuana while he was in the Twilight bar on January 25, it cannot be established who he purchased it from. Based on the two (2) buys, however, the police obtained a search warrant for the premises that was used as the basis for a search conducted on January 26 or 27, 1983. When they entered the Twilight bar pursuant to the warrant, the only individual present at the time was a black female identified as Beverly Hessings. Beverly Hessings is Respondent's sister. Detective Hallar was involved in the search of the Twilight Inn on January 26. When he entered the bar he found nineteen (19) $8.00 bags of a substance, subsequently identified as marijuana, packaged for sale in the store room. The little bags were hidden from plain view and were located in a candy box lid. They were identical with those previously given him by Samuel Colman after his two (2) controlled buys. Officer Hallar left the little baggies where they were and called the evidence custodian, Sergeant Braido, who took custody of them. Officer Dowdell of the Belle Glade Police Department was also a participant in the search on January 26 or 27. During the search he found a brown paper bag containing twenty-one (21) small manila envelopes which was under a hole in the cushion on a bench which was located on the north side of the dance floor. Dowdell took the paper bag to Detective Simons who in turn immediately released it to Detective Braido. These twenty-one (21) bags, each contained a substance which was subsequently identified as marijuana. When Dowdell entered the bar he observed between ten (10) and twenty (20) patrons. The officers had the patrons stand up against the wall while the search was going on. The bar is dark even during the day time, but it is lighted on the inside, though dimly, and it is possible to see. While the search was going on a policeman was stationed at each exit and it is unlikely any of the patrons or staff were able to exit the bar from the time the search was commenced. Another participant in the search was DABT Investigator Clark Raby, who was present because of a request from the Palm Beach County Sheriff's Department due to the fact the premises were licensed by Petitioner. Raby's area to search was the kitchen and laid out on a table in the kitchen he found what appeared to be several lottery tickets which he confiscated and maintained until he was able to relinquish them to the evidence custodian. These tickets, which appeared to be yellow sales slips bearing no proprietory identification - the kind of check one might get in a hardware store - had numbers printed on the bottom, but also had a series of numbers written on the check along with amounts of money written thereon. These tickets were in plain view on the table in the kitchen and Raby identifies them as bolita lottery tickets by virtue of his experience with such kinds of tickets in the past. At the close of Petitioner's case, respondent moved to dismiss the Notice To Show Cause on the basis that Petitioner had failed to establish that Respondent had a license on the dates alleged on the Notice To Show Cause. He contended that the actual license or a copy thereof was not admitted into evidence, which is true, and that the testimony of Lieutenant Smith indicated only that Respondent had a license in January, 1983. This testimony was adequate, absent a showing that Respondent held a license for less than an entire month, to establish jurisdiction and the motion was denied. Respondent also moved to dismiss on the basis that the testimony of the investigating officers as well as the sheets upon which the chemist's analysis of the substances was recorded reflected dates other than those alleged in the Notice To Show Cause as being the dates on which the offenses took place. It was obvious from an examination of the analysis sheets that they reflected, as to the individual buys, the correct date. As to the substance discovered during the search, the analysis sheet reflected January 27, which is one day later than the date listed in the Notice To Show Cause. The Notice to Show Cause reflected that the substance was on the license premises on or about January 26, which is sufficiently related in time to the evidence to support a denial of the motion to dismiss.
The Issue Whether the Respondent, the Florida Department of the Lottery, discriminated against the Petitioner, Oscar Jacobs, on account of his race in denying him equal opportunity for training, compensation, use of new equipment, time off from work, leave, retention and advancement?
Findings Of Fact The Parties. The Petitioner, Oscar Jacobs, is an Afro-American. His race is black. The Respondent, the Florida Department of the Lottery (hereinafter referred to as the "Department"), is an agency of the State of Florida. District 2 of the Department. In the fall of 1987 the Department created a district office in Panama City, Florida. The Panama City office of the Department was part of District 2 (hereinafter referred to as the "District"). The District consisted of Bay, Calhoun, Gulf, Jackson, Holmes and Washington Counties. Steve Sumner was hired as the District Manager for the District in October of 1987. Mr. Sumner hired the staff of the District in November of 1987. The District had the following type of positions: District Manager. The District Manager was in charge of the District office and was the immediate supervisor of the employees in the District. Among other things, the District Manager was responsible for: (1) the assignment of the geographic areas LSRs were responsible for including the designation of retailers located therein that the LSRs were to service; (2) the approval of leave; and (3) the assignment of vans. Lottery Sales Representative II (hereinafter referred to as an "LSR II"). LSR IIs were responsible for inventorying lottery ticket stock sold at retail locations, settling accounts with retailers for all lottery tickets sold, ordering lottery ticket books, reviewing settlement calculations, training retailers, completing paperwork necessary for retailers to become a lottery outlet, completing paperwork upon the termination of a retailer as a lottery outlet, ensuring that retailers operated within Department rules, soliciting, conducting and monitoring retailer promotions and recruiting new retail accounts. See Petitioner's exhibit 4 for a complete description of an LSR II's job description. Lottery Sales Representative I (hereinafter referred to as an "LSR I"). LSR Is were responsible for delivering lottery tickets, picking up redemption envelopes from retailers and comparing them with issuance/settlement forms, assisting retailers, maintaining paperwork and daily activity reports and filling in for, and assisting, LSR IIs. See Petitioner's exhibit 4 for a complete description of an LSR I's job description. Each LSR I was assigned to work with one particular LSR II. Storekeepers. Storekeepers were responsible for receiving, verifying and sorting incoming orders for lottery tickets, receiving and verifying ticket redemption envelopes and ticket returns, and insuring that materials were distributed. See Petitioner's exhibit 4 for a complete description of a Storekeeper's job description. A Receptionist. An Accountant I. An Administrative Assistant I. Clerical positions. Relevant History of Mr. Jacobs' Employment at the District. In November of 1987, Mr. Sumner hired three LSR IIs (Sandra Doll, Linda Gray and Debra Chason). All three are white. Mr. Sumner also hired two LSR Is. On November 15, 1987, Mr. Sumner hired the Mr. Jacobs as an LSR I. John Stevens was the other LSR I. Mr. Stevens is white. Danny Edwards was hired in 1987 as the Storekeeper, and Mary Jane Silcox was hired as an Administrative Assistant. Mr. Edwards and Ms. Silcox are white. At the time that Mr. Jacobs was hired, he was married. Mr. Jacobs' wife's race is white. Although Mr. Jacobs subsequently separated and eventually obtained a divorce from his wife, Mr. Sumner was not aware of these events until sometime after he had hired Mr. Jacobs. Mr. Sumner was responsible for evaluating Mr. Jacobs' performance. For the fiscal years November 16, 1987 to November 16, 1988, November 16, 1988 to November 16, 1989 and November 1989 to November 1990, Mr. Sumners rated Mr. Jacobs' performance with an overall rating of "Exceeds At Least One Standard." The possible ratings, from lowest to highest, were "Below Standards," "Achieves Standards," "Exceeds at Least One Standard," "Exceeds Most Standards," and "Sustained Superior Performance." In April of 1988, Mr. Edwards was promoted by Mr. Sumner from Storekeeper to LSR I. In May of 1988, Larry Kissinger was hired by Mr. Sumner as the Storekeeper. Mr. Sumner also hired Hannah Davis as an LSR I. Mr. Kissinger and Ms. Davis are white. In March of 1990, one of the LSR IIs, Sandra Doll, went on maternity leave. Mr. Sumner selected Mr. Jacobs to fill the LSR II position of Ms. Doll during her absence. Mr. Jacobs was selected out of the three LSR Is then working for the District. Mr. Sumner arranged for Mr. Jacobs to receive a 10 percent increase in pay. The increase in pay was to be payable while Mr. Jacobs temporarily filled the LSR II position. At about the same time that Ms. Doll went on maternity leave, another LSR II, Ms. Gray, resigned. Mr. Sumner assigned Ms. Gray's duties jointly to one of the other LSR Is, Ms. Davis, and the Storekeeper, Mr. Kissinger. Ms. Davis and Mr. Kissinger did not receive any increase in pay for their services. During the time that Mr. Jacobs served as a temporary LSR II, he performed satisfactorily, with assistance from other District staff. Prior to August of 1990, Ms. Doll resigned. In August of 1990, Mr. Sumner decided to promote Mr. Jacobs permanently to the position of LSR II. The Department's Personnel Office, however, informed Mr. Sumner that Mr. Jacobs did not appear to meet the minimum qualifications for the position. Therefore, Mr. Sumner assisted Mr. Jacobs to supplement his resume by expanding the description of his prior sales experience in order for Mr. Jacobs to meet the minimum requirements. Mr. Jacobs was subsequently determined to be qualified and Mr. Sumner's decision to promote Mr. Jacobs was accepted. Mr. Jacobs' salary was reduced to the amount he had been paid before he was given the temporary 10 percent increase. Mr. Sumner recommended, and Mr. Jacobs received, a permanent 7 percent increase, the maximum pay increase he could be awarded upon his permanent promotion to LSR II. As of August of 1990, Mr. Jacobs became the highest paid LSR II in the District. Mr. Jacobs remained the highest paid LSR II while he was employed as an LSR II and as an LMR. Mr. Kissinger, the Storekeeper, was promoted in August of 1990 to fill the LSR I position vacated by Mr. Jacobs. Ms. Davis was promoted in September of 1990 to fill the other LSR II position. Ms. Silcox, the Administrative Assistant, was promoted to fill Ms. Davis' LSR I position in September of 1990. Charles Frederick, whose race is black, was hired by Mr. Sumner in February of 1991, as the Storekeeper. In December of 1990, Mr. Jacobs remarried. The woman that Mr. Jacobs married in December of 1990 was white. From the time that Mr. Sumner hired Mr. Jacobs until approximately May of 1991, Mr. Sumner was satisfied with Mr. Jacobs' performance. In March of 1989 Mr. Sumner nominated Mr. Jacobs to the Department as the District employee of the month. In approximately May of 1991, however, Mr. Sumner began to lose faith in Mr. Jacobs. Mr. Jacobs believes that Mr. Sumner's attitude toward him began to change in 1991 and he attributes this change to the fact that he had married a white woman in December of 1990. Mr. Jacobs' belief is not, however, supported by the record. In light of the fact that Mr. Jacobs was married to a white woman when Mr. Sumner initially hired him and during at least part of the time that Mr. Sumner found Mr. Jacobs' performance to be satisfactory, Mr. Jacobs' belief is unfounded. A more logical explanation for the change in the relationship of Mr. Sumner and Mr. Jacobs is Mr. Jacobs' decline in performance and Mr. Sumner's criticism of Mr. Jacobs' performance as an LSR II. After being promoted to the permanent LSR II position, Mr. Sumner found Mr. Jacobs' performance to be lacking. In September of 1990, Mr. Sumner wrote four critical memorandums to Mr. Jacobs. Mr. Jacobs, based upon these memoranda and other comments from Mr. Sumner, began to believe that Mr. Sumner was treating him unfairly. This combination of lesser performance and criticism at least contributed to the rift between Mr. Sumner and Mr. Jacobs. By approximately May of 1991 Mr. Sumner concluded that Mr. Jacobs' performance had noticeably deteriorated and he seemed to lose interest in his job. In September of 1991 Mr. Jacobs and his wife became foster parents of two infants. The infants both suffered from severe medical problems. Mr. Jacobs' relationship with Mr. Sumner became more strained as a result of the stress on Mr. Jacobs caused by the children's condition. In the summer of 1991, a new sales director for the District was hired by the Department. SEE 23. For the November, 1990 to November, 1991 fiscal year, Mr. Sumner evaluated Mr. Jacobs' performance as "Achieves Standards." This rating was one rating lower than the previous ratings Mr. Jacobs had received from Mr. Sumner. The rating was for Mr. Jacobs' first full year as an LSR II and reflected the drop in his performance as an LSR II. The following comment, among others, was made by Mr. Sumner on the evaluation: Over the past years Jake has been an enthusiastic and productive worker. This previous year has seen a deterioration of skills that he is normally capable of doing. I feel this maybe [sic] in part to environmental pressures outside of work. Many changes have been made to improve work environment, yet employee doesn't appear to enjoy his work. This change became more evident after first full year as an LSR II. Petitioner's exhibit 11. At the time of the 1990-1991 evaluation of Mr. Jacobs, Mr. Sumner was not aware that changes in the number of LSR positions in the District would be made by the Department in 1992. Effective January 1, 1992, the Department eliminated the LSR I and LSR II classifications. A single classification, Lottery Marketing Representative (hereinafter referred to as "LMR"), was created. The evidence failed to prove that Mr. Sumner was involved in the decision to make this change. Mr. Jacobs, Ms. Chason and Ms. Gray were reclassified from LSR II to LMR. Mr. Edwards, Mr. Kissinger and Ms. Silcox were reclassified from LSR I to LMR. In March of 1992 Mr. Sumner was notified by the Department that the sales staff of the District was being reorganized. As a consequence, the District LMR positions were to be reduced from six positions to four. As a part of the reorganization, the District was to receive one new position: a Telemarketing Representative, a newly created employee classification. As a result of the reorganization, Mr. Sumner was faced with reclassifying/demoting one LMR and possibly terminating one LMR. Mr. Sumner was only given two weeks to make the changes. In order to minimize the impact of the reorganization on employees of the District, Mr. Sumner successfully convinced the Department to locate the new Telemarketing Representative position at the District office. Mr. Sumner informed the LMRs of the reorganization and sought volunteers to take the Telemarketing Representative position in a meeting of all LMRs. Ms. Silcox subsequently volunteered to take the Telemarketing Representative position. At the time that Mr. Sumner was deciding how to comply with the Department's reorganization, the Administrative Assistant position in the District became vacant. Ms. Silcox subsequently agreed to take the Administrative Assistant position when Mr. Sumner asked her to. As a result of Ms. Silcox taking the Administrative Assistant position, Mr. Sumner did not have to terminate any LMR. The person in the other LMR position eliminated could move into the Telemarketing Representative position. Mr. Sumner spoke to the remaining four LMRs seeking a volunteer to take the Telemarketing Representative position. Mr. Edwards indicated that he would consider taking the position but delayed a decision over night. Mr. Jacobs did the same. Ultimately, none of the remaining five LMRs volunteered to take the Telemarketing Representative position. Mr. Sumner was required to select one of the five LMRs (Ms. Chason, Mr. Edwards, Ms. Gray, Mr. Jacobs or Mr. Kissinger) to be placed in the Telemarketing Representative position. Mr. Sumner decided that Mr. Jacobs should be reassigned/demoted to the Telemarketing Representative position. Mr. Jacobs was informed of the decision and was given the choice of accepting the Telemarketing Representative position with no reduction in salary or moving to Gainesville or Tampa as an LMR. Mr. Jacobs elected to take the Telemarketing Representative position so that he would not have to move. Mr. Jacobs was placed in the Telemarketing Representative position and continued to be paid the same salary he was receiving as an LMR. Mr. Jacobs received no reduction in pay or benefits. The Basis for Mr. Sumner's Decision to Reassign/Demote Mr. Jacobs. Mr. Sumner's decision to place Mr. Jacobs in the Telemarketing Representative position was based on his perception of the performance of the four other remaining LMRs (after Ms. Silcox had agreed to take the Administrative Assistant position) under Mr. Sumner's supervision compared to Mr. Jacobs' performance. Mr. Sumner took into account the past performance of each of the five LMRs and their progress in the various positions they had held under Mr. Sumner's supervision. Mr. Sumner did not base his decision on or consider seniority. Mr. Sumner selected Mr. Jacobs based upon the decline in Mr. Jacobs' performance since being promoted to LSR II, and his perception of the relatively slower development of Mr. Jacobs' abilities as an LSR II when compared with the other LMRs. All of the LMRs (while employed in the various positions under Mr. Sumner's supervision) had experienced problems in their performance and had been criticized by Mr. Sumner. There were no exceptions. Except for Mr. Jacobs, all of the LMRs had received consistently high evaluations of "Exceeds at Least One Standard" or "Exceeds Most Standards" each year while under Mr. Sumner's supervision. These ratings were based on their overall performance and the evidence failed to prove that the ratings were not reasonable. Only the rating given to Mr. Jacobs for his last evaluation period prior to his assignment to the Telemarketing Representative position had declined below those ratings. Two of the five LMRs had held LSR positions for a shorter period of time than Mr. Jacobs: Mr. Edwards: Storekeeper from 1987 to April of 1988, LSR I from April of 1988 to January of 1992, and LMR from January of 1992; and Mr. Kissinger: Storekeeper from May of 1988 to August of 1990, LSR I from August of 1990 to January of 1992 and LMR from January of 1992. Mr. Edwards and and Mr. Kissinger were not selected to be placed in the Telemarketing Representative position because of their consistently high evaluations and because they had both continued to progress and improve in their performance consistently after being employed in the District. Mr. Jacobs had not continued to progress and improve. The Impact of Routes on Mr. Jacobs' Performance. In the fall of 1987, the District was divided into three geographic areas (hereinafter referred to as "Routes"), by Mr. Sumner. Each LSR II was assigned to one of the three Routes and was responsible for servicing the retailers located therein. Each of the three Routes contained a part of Panama City, the largest city in the District, and a part of the rural areas of the District. Ms. Doll was assigned the eastern portion of the District, Ms. Gray was assigned the western portion and Ms. Chason was assigned the rest. Mr. Jacobs was assigned to work with Ms. Chason on the Route assigned to her. When Ms. Doll left the District and Mr. Jacobs was temporarily assigned to replace her, Mr. Jacobs took over Ms. Doll's Route plus a part of Ms. Gray's Route. Mr. Jacobs satisfactorily performed his duties as an LSR I on Ms. Chason's Route and while temporarily replacing Ms. Doll as an LSR II on Ms. Doll's Route. These Routes did not adversely affect Mr. Jacobs' performance. In September of 1990, when Mr. Jacobs was permanently promoted to LSR II and Ms. Davis was promoted to an LSR II position, the Routes were restructured by Mr. Sumner. Mr. Jacobs continued to serve the eastern portion of the District previously serviced by Ms. Doll and by him as a temporary LSR II, Ms. Chason was assigned Panama City Beach and the accounts along part of the Florida border with Georgia and Alabama, and Ms. Davis was assigned the western portion of the District. All three Routes continued to include portions of the greater Panama City area (Lynn Haven, Parker, Callaway and Springfield). The accounts on Panama City Beach were more productive during the summer months. The accounts along the Florida border also tended to be more productive. Ms. Chason was assigned these more productive accounts because she had evidenced greater skills in sales/marketing than the other LSR IIs. Not because she was white. The Routes were not totally restructured again until the January, 1992 consolidation of LSR positions. Prior to January of 1992 changes were, however, made to the Routes. These changes were made because of frequent changes in retailers participating in lottery sales and, on a few occasions, when Mr. Sumner was requested to make changes by the LSR IIs, including Mr. Jacobs. The Route assigned to Mr. Jacobs in September of 1990 was more rural than the other Routes and Mr. Jacobs was required, on average, to drive more miles than the other LSR IIs. The last relevant restructuring of Routes took place in January of 1992 after the consolidation of LSR I and II positions. At that time, the three Routes served by the LSR IIs were divided essentially in half, creating six Routes, one for each LMR. Each LSR II was allowed to select the half of the Route he or she was previously responsible for and the other half was assigned to the LSR I that had previously been assigned to the Route. Immediately prior to January of 1992, Mr. Jacobs was assisted by Ms. Silcox. When their Route was divided, Mr. Jacobs selected the half of the Route he desired and Ms. Silcox was assigned the other half. The evidence failed to prove that Mr. Sumner's evaluation of Mr. Jacobs was unfairly affected by the Route he was assigned to or that Mr. Sumner treated Mr. Jacobs unfairly in the assignment of Routes based upon his race. Sales figures contained on evaluations performed by Mr. Sumner were not always seen by Mr. Sumner when he completed an evaluation. In at least one year, those figures were added to the evaluation after Mr. Sumner completed his part of the evaluation. The suggestion that Mr. Jacobs' Route adversely impacted his evaluations was contradicted by the fact that for three years, Mr. Jacobs and Ms. Chason, who allegedly had the most favorable Route, received the same overall evaluation: "Exceeds at Least One Standard." In the first full year that Mr. Jacobs served as an LSR II, although his overall evaluation declined, the "Other Category," which included Route statistics, on Mr. Jacobs' evaluation was rated "Exceeds at Least One Standard." The suggestion that some LSRs were able to dictate their Routes was also not supported by the evidence. All of the LSRs had some input into the Routes that they handled. For example, Mr. Jacobs and Ms. Davis both requested the assignment of retailers near the Florida border. These requests were honored by Mr. Sumner. Mr. Jacobs was assigned Bascom and Malone, Florida, and Ms. Davis was assigned Campbellton, Florida. Mr. Jacobs accepted the new accounts despite the fact that the mileage he was required to travel increased. All of the LSRs were also allowed to choose between half of their prior Routes in 1992. These incidents did not prove that white LSRs were allowed to select their Routes. Sales generated in each Route had minimal impact on Mr. Sumner's evaluation of Mr. Jacobs or the other LSR's performance. No sales quotas were established and LSRs were not compensated on the basis of their sales during the period of time relevant to this proceeding. While sales had to be taken into account to some extent, performance was evaluated based upon each person's general marketing skills and efforts. Sales goals were established during the summer of 1991 by the new sales director. Each LSR was assigned a sales quota based upon a percentage increase from their last year sales figures. If an LSR failed to meet the quota, there was no consequence. Employees were commended if they did achieve their quota. LSRs were given quotas of new retailers they were to attempt to add each month. All LSR Is were given a quota of one new retailer and all LSR IIs were given a quota of two new retailers. Recruitment of retailers was not necessarily a product of the length of a Route. See Petitioner's exhibit 36. The evidence failed to prove that the Routes assigned to Mr. Jacobs adversely impacted Mr. Sumner's evaluation of his ability to recruit. Based upon the weight of the evidence, Mr. Jacobs failed to prove that the assignment of Routes was made in a discriminatory manner or that Mr. Jacobs' Routes adversely affected his performance because of difficulty caused by the Routes in meeting sales or recruitment quotas. Leave Policies. Mr. Sumner's policy concerning requests for annual leave made was that District employees should request approval at least two weeks in advance of when the employee intended to be off work. The two week notice policy was well known to all employees, including Mr. Jacobs. Mr. Sumner issued several memoranda setting out the policy. Mr. Sumner also notified employees that a telephone call was all that was necessary to take annual leave if there was an emergency. Mr. Sumner's policy concerning giving two weeks notice was not strictly adhered to or enforced. Mr. Sumner recognized there were reasonable circumstances when an employee was not able to request permission to take annual leave two weeks or more in advance. As long as an employee made a reasonable effort and the operation of District would not, in Mr. Sumner's opinion, be harmed by an employee's absence, Mr. Sumner approved leave even when two weeks notice was not given. The two week notice requirement was waived for virtually every employee, including Mr. Jacobs. On one occasion Mr. Sumner denied a request by Mr. Jacobs for annual leave. The evidence failed to prove that Mr. Sumner denied the request without just cause or based upon Mr. Jacobs' race. During the period between April of 1990 and April of 1992, Mr. Sumner approved approximately 400 hours of leave, annual and sick, for Mr. Jacobs. The evidence failed to prove that Mr. Jacobs was treated differently because of his race with regard to leave requests he made while employed by the Department. Part of the leave taken by Mr. Jacobs was attributable to the illness of his two foster care infants. Mr. Jacobs had taken time off on numerous occasions due to their poor health. Mr. Jacobs had been required to take annual leave, rather than sick leave, for the infants because the Department's personnel office had informed Mr. Sumner and Mr. Jacobs that State leave policies did not allow sick leave for foster care children. Mr. Sumner did not strictly enforce the notice policy for annual leave when Mr. Jacobs took annual leave for the foster care children. Nor did Mr. Sumner give Mr. Jacobs any reasonable reason to expect that Mr. Sumner would not approve the use of annual leave when the children were ill because Mr. Jacobs had not given two weeks advance notice. Nor was it reasonable for Mr. Jacobs to not realize that a simple telephone call to the office to inform the office of an emergency with the children would not be sufficient. Between March 17, 1992 and March 18, 1992, one of Mr. Jacobs' foster care infants became extremely ill. This was not the first time that the child had experienced the type of problem experienced at that time, but the problem was more severe. Although Mr. Jacobs could have simply telephoned the office the next morning and reported that there was an emergency, Mr. Jacobs reported to work. Mrs. Jacobs took the infant to a hospital where it was to be determined whether the child would be admitted to the hospital. After arriving at the office, Mr. Jacobs, who was visibly shaken, spoke with Mr. Sumner. What took place during that discussion was disputed by Mr. Jacobs and Mr. Sumner. Mr. Jacobs testified that Mr. Sumner was clearly informed that he wanted to go to the hospital to be with the child but was told he had to attend to his Route first. Mr. Sumner testified that Mr. Jacobs did not specifically request time off, that he had indicated he might be require to go to the hospital sometime during the day, and that Mr. Sumner told Mr. Jacobs to service his five biggest accounts scheduled for that day and then take the rest of the day off even if it was not necessary for him to go to the hospital. Shortly after the conversation between Mr. Sumner and Mr. Jacobs, and after Mr. Jacobs had left on his Route, the child died. Mr. Jacobs was informed at his first stop and he left for the hospital. Based upon the weight of the evidence, it is concluded that Mr. Jacobs, who was tired from the events of the night before and under a great deal of stress because of his concern for the child, was not denied approval of leave by Mr. Sumner to immediately go to the hospital and was not told that he had to complete his Route. At most, there appears to have been an unfortunate miscommunication between Mr. Jacobs and Mr. Sumner about the urgency of the situation. Mr. Sumner's belief that the matter was not as urgent as it turned out to be was supported by the fact that the infants had experienced similar difficulties in the past; the fact that the child had not been taken to the hospital earlier; the fact that Mr. Jacobs had come to the office that morning instead of telephoning; and the fact that Mr. Mr. Jacobs did not insist on going to the hospital immediately. Assignment of Department Vehicles. LSRs were assigned Department vehicles, (vans) for use in servicing Routes. In approximately November of 1987, the District was temporarily assigned one less van than needed. Mr. Jacobs volunteered to drive his personal vehicle, for which he was reimbursed by the State. Mr. Jacobs drove his personal vehicle until approximately December 24, 1987, when he received a new van. Other LSRs were required to use their personal vehicles on occasion, for which they were also reimbursed by the State. Pursuant to a replacement schedule instituted by the Department, 1/3 of all vans were to be replaced every year. In this way, every van would be used a maximum of three years. This schedule was based upon estimates of the time necessary for vans to have accumulated sufficient mileage (80,000 miles) to warrant replacement. To insure that a van was ready for replacement at the end of three years, it was Department policy to assign vans with lower mileage after a year or two years use to high mileage drivers. In November of 1991, five vans in the District exceeded 80,000 miles and were to be replaced with new vans. The District, however, only received three new vans. The other two vans were replaced with two lower mileage vans scheduled to be replaced the next fiscal year. Consistent with Department policy Mr. Sumner was suppose to assign the new vans to persons who drove less miles and the older vans should have been assigned to persons who drove greater miles. In November of 1991, the mileage driven in the previous year by each LSR was as follows: Silcox 16,327 miles Chason 16,426 miles Davis 21,000 miles Jacobs 23,717 miles Edwards 24,000 miles Kissinger 30,000 miles Pursuant to Department policy, the new vans should have been assigned to Ms. Silcox, Ms. Chason and Ms. Davis. The new vans, however, were assigned to Ms. Chason, Ms. Davis and Mr. Kissinger. The vans assigned to Ms. Chason and Ms. Davis were assigned consistent with Department policy. Ms. Silcox, Mr. Jacobs and Mr. Edwards were assigned older vans. The assignment of an older van to Ms. Silcox was inconsistent with Department policy. The assignment of older vans with less mileage to Mr. Jacobs and Mr. Edwards was consistent with Department policy. Had Department policy been followed completely and the third new van had been assigned to Ms. Silcox and not Mr. Kissinger, Mr. Jacobs would still not have received a new van. Mr. Sumner asked Mr. Kissinger and Mr. Edwards if they would drive to another district to pick up two vans. Mr. Sumner indicated that one of the new vans would be assigned to one of them if they agreed. They agreed, and Mr. Sumner awarded a new van to Mr. Kissinger. Mr. Sumner did not give Mr. Jacobs or Ms. Wilcox the opportunity to pick up the two vans located in another district. Marketing Promotions. LSRs, as part of their marketing responsibility, could conduct various types of promotions at retailers intended to increase sales of lottery tickets. LSRs were expected to conduct promotions. Quotas were assigned to each LSR II. They were expected to conduct one promotion per month. Promotions generally did not require much of a financial investment by the retailer and smaller retailers were generally as interested in conducting promotions as larger retailers. The evidence failed to prove that the Route assigned to Mr. Jacobs adversely affected his ability to conduct promotions. The evidence also failed to prove that Mr. Sumner's evaluations of Mr. Jacobs' performance while supervised by Mr. Sumner were adversely impacted by a lack of promotions caused by Mr. Jacobs' Route. Mr. Sumner believed that Mr. Jacobs performed a sufficient quantity of promotions but that he was slow about doing them. Conducting some promotions required overtime. Overtime, however, was required to be requested and approved in writing. Approval of overtime came from the Department and not Mr. Sumner. Mr. Jacobs was aware of this requirement. In December of 1991, Mr. Jacobs requested permission to conduct a promotion which involved the giving away of coffee mugs with the Department logo on them to each customer that bought a minimum number of lottery tickets. This promotion did not involve overtime and none was requested by Mr. Jacobs. Mr. Jacobs claimed that the promotion was changed to one that would require overtime, and that he was told by Mr. Sumner that approval would be obtained from the Department. The weight of the evidence failed to support this claim. In August of 1991, Ms. Chason sought approval to conduct a promotion at a seafood festival to be held in October of that year. The festival required overtime for two employees plus Ms. Chason. Ms. Chason asked for volunteers and accepted the first two persons. Mr. Jacobs did not volunteer and, consequently, was not one of the two persons selected by Ms. Chason. The evidence failed to prove that Mr. Sumner was involved in the failure to select Mr. Jacobs, that the failure to select Mr. Jacobs was somehow unfair or that Mr. Jacobs was not selected by Ms. Chason because of his race. Mr. Jacobs also claimed that he was not given credit for two new retailers he obtained because the forms signing up the retailers were lost. The evidence, however, proved that, although the retailers were lost as Department customers, Mr. Jacobs was given credit for signing them up by Mr. Sumner. The evidence failed to prove that Mr. Sumner was involved with the loss of the forms signing up the retailers or that they were lost to cause Mr. Jacobs to fail to meet his quota for new retailers. The evidence failed to prove that Mr. Sumner or the Department awarded bonuses or that Mr. Jacobs was denied bonuses because of his race. Miscellaneous Charges. The evidence failed to prove that Mr. Jacobs was denied training provided to white employees because of his race. The evidence failed to prove that Mr. Jacobs was denied the use of new equipment provided to white employees because of his race. Mr. Jacobs' Charge of Discrimination. Mr. Jacobs filed a Charge of Discrimination against the Department with the Florida Commission on Human Relations. Mr. Jacbos alleged that he had been discriminated against based upon his race. On March 29, 1993, the Commission issued a "Determination: No Cause" finding "no reasonable cause to believe that an unlawful employment practice has occurred " Mr. Jacobs filed a Petition for Relief with the Commission requesting a formal administrative hearing. In the Petition for Relief filed with the Commission Mr. Jacobs alleged, in response to questions 3, 4 and 5 on the Petition for Relief, the following: Respondent has violated the Human Rights Act of 1977, as amended, in the manner specifically described below: My supervisor, Steve Sumner has systematically and intentionally denied me equal opportunities because of my race (black) for training, compensation, use of new equipment, time off from work, leave and retention and advancement in my position as an LSR. See the attached charge of discrimination incorporated herein. The disputed issues of material fact, if any, are as listed below: Mr. Sumner allowed every other LSR (all who are white) to pick their own routes which were the best routes, leaving the most difficult to me. He has also allowed other LSR's to work for bonuses during promotions but has not allowed me to do so. Mr. Sumner has misplaced some new applications for lottery retailers that I obtained so that my quotas of achievement would be lower. Mr. Sumner retained a coworker in the LSR position when he had been promoted to LSR long after me. Mr. Sumner denied my taking leave when one of my foster children was critically ill and the child died while I was at work. The ultimate facts alleged and entitlement to relief are as listed below: I wish to have a formal post-investigative proceeding. I wish to be reinstated in my LSR position with seniority back to the date of my demotion or receive adequate compensation for the harms I have suffered and reasonable attorneys fees and costs. I am a member of a protected class and Mr. Sumner has singled me out for arbitrary and negative treatment based on my race (black). All the responses Mr. Sumner has provided are pretextual or simply not true. The Commission requested that the Division of Administrative Hearings assign a Hearing Officer to conduct the hearing requested by Mr. Jacobs. At the commencement of the proceeding, Mr. Jacobs indicated that he was seeking a "general injunction", an apology from the Department, monetary compensation for damages in the form of payment for pain and suffering, attorney fees and reinstatement as an LSR II. Alleged Race Discrimination. The evidence in this case failed to prove that any action of Mr. Sumner or the Department was based upon Mr. Jacobs' race. He was not held to any standard or requirement based upon his race and he was not treated in a manner different from the treatment afforded employees of other races. The evidence proved that Mr. Sumner had hired Mr. Jacobs, that Mr. Sumner had given him high evaluations for the first three years he worked, he had temporarily promoted Mr. Jacobs to a higher position with a temporary increase in pay not afforded white employees, he had promoted him with a permanent increase in pay which made Mr. Jacobs the highest paid employee in his class at the District, and he had assisted Mr. Jacobs in insuring that he was qualified for the promotion. Only after Mr. Jacobs' performance began to decline did Mr. Sumner take actions which were somewhat adverse to Mr. Jacobs. Those actions did not take place until after three years of working together. The reasons for taking those actions were reasonably explained by Mr. Sumner and the Department. Mr. Jacobs was unable to explain the foundation for his belief that Mr. Sumner began treating him differently in 1991 on the basis of his race.
Findings Of Fact Petitioner Auburn Ford, Jr., was employed by Respondent as a Lottery Investigator from November 1987 until his demotion to the position of Security Officer on August 23, 1991. Respondent admits that Petitioner was the only black Lottery Investigator and that he was replaced by a white male. Petitioner's demotion, as a disciplinary action by Respondent, was detailed in a letter dated August 23, 1991, to Petitioner from Respondent's representative. In that letter, it was asserted that Petitioner's demotion was the result of his entry into a high security area without legitimate business reasons on July 14, 1991; his entry into a high security area through use of an access card of a subordinate Security Officer, as opposed to use of his own card; his untruthful response concerning use of a telephone in the high security area; and his inaccurate reporting of hours worked in the month of June, 1991. As a Lottery Investigator, Petitioner's duties included implementation of lottery procedures and policies; maintaining controlled access where appropriate; as well as providing training, guidance and supervision of lottery Security Officers. Lottery Investigators are sworn or certified law enforcement officers while Security Officers are unsworn. At the time of his demotion, Petitioner worked the 11 p.m. to 7 a.m. shift along with Linda Koss, another Lottery Investigator. Along with Koss, he jointly supervised the Lottery Security Officers assigned to that shift. The building housing the lottery department is a secure facility in that all persons entering the building must have access authority evidenced by an access badge. In the absence of an access badge, a temporary or visitor's badge allows access to the building in the company of an escort. Within the lottery building, there are areas which are subject to additional security. Access to these areas is limited to the individuals working in those areas and others who have a work-related need to be there. Each employee's access area is determined by the employee's supervisor. An employee's access badge is then programmed for that particular employee's approved access. Lottery Investigators and Security Officers have access to all areas within the building. Each employee is required to sign an access card receipt form upon receipt of the individual employee's access badge. The receipt states that access privileges accompanying the badge are to be used only by that particular employee and that improper or unauthorized use of the badge could subject the employee to termination or other disciplinary action. Security personnel, including Petitioner, signed such a receipt form and knew that exchanging access cards was a violation of security policies. Policies and procedures of Respondent governing access badges establish a comprehensive scheme designed to ensure lottery security through controlled access to the lottery building and areas within the building. Allen Dees was head of Respondent's Bureau of Security and supervisor of Lottery Investigators and Security Officers, during Petitioner's tenure as a Lottery Investigator. Dees orally instructed employees subject to his supervision to refrain from interfering with items on desks throughout the building. The instruction was repeated emphatically after an incident where the theft of personal employee items resulted in the resignation from employment by one Division of Security employee and termination of another's employment. Since Division of Security employees are alone in the lottery building after normal working hours, any unexplained interference with or use of employees' desks, equipment or property often results in the visitation of suspicion upon security employees. In the course of performing their duties, Lottery Investigators and Security Officers periodically conduct watch tours. These tours consist of walking through specified areas of the building to check for security or safety violations. A watch tour of the executive offices is appropriately called The Executive Watch Tour. This tour includes the entire second floor of the lottery building where the executive offices are located, as well as an area known as the On-Line Game area. Watch tours have a minimum and maximum length of time for completion. The length of allotted time for these tours is established to permit an unhurried but consistent inspection of the areas on the tour. Lottery Investigators and Security Officers conducting a tour are to proceed steadily during that activity and not dawdle. Within the On-Line Game area is located the computer system which runs and maintains the integrity of the on-line gaming system of the Lottery, as well as other sensitive and confidential information. Access to this area is controlled by an access card or badge reader which allows entry only to those persons involved in the gaming operation and to security personnel. Security personnel are instructed to use their access badges to enter the area and remain only long enough to permit a determination that there are no safety or security problems in the area. Entering and remaining in this high security area for reasons other than determining the existence of safety or security problems is unauthorized. On the night of July 14, 1991, Petitioner approached Ed Maxwell, a Security Officer subject to Petitioner's supervision, and demanded Maxwell's access badge. Maxwell, who was monitoring the security computer console at the time and saw that Petitioner's own badge was in Petitioner's shirt pocket, knew that allowing another person to use his access badge was a violation of security policy, but complied since Petitioner was his supervisor. Maxwell later observed from the computer console that his access badge was being used to open the access-controlled door to the On-Line Game Area. When Petitioner later returned his badge, Maxwell asked why Petitioner had not used his own badge. Petitioner simply responded that he was the supervisor and expected Maxwell to do what he requested. Maxwell reported the incident to Linda Koss, the other Lottery Investigator on duty in the building at the time and met later with security chief Dees on July 23, 1991. After the meeting, Maxwell filed a written report dated July 24, 1991, with Dees regarding the incident. On July 31, 1991, Frank Carter, Director of Respondent's Division of Security, wrote a memorandum to Petitioner. In the memorandum, Carter detailed several allegations of misconduct by Petitioner, including Petitioner's use of Security Officer Maxwell's card to the enter the On-Line Games Area and Petitioner's entry into the closed office of Respondent's Deputy Secretary of Marketing. Carter's memorandum requested a response from Petitioner. Petitioner's written response stated that the allegations were untrue. Petitioner's presence in the On-Line Game Area on the date in question was confirmed by a copy of a real-time print out of telephone calls made from that location. A telephone call lasting approximately 16 minutes had been made from the On-Line Game Area to Petitioner's home on July 14, 1992. On August 3, 1991, Maxwell again wrote a memorandum to Dees, complaining about what he perceived as harassment from Petitioner for reporting the previous badge borrowing incident. In the memorandum, Maxwell detailed altercations where Petitioner had called him a "dishonest honkey" and a "liar", as well as attempting to instigate a physical confrontation with Maxwell. Further, Maxwell related that Ford had called his home at midnight when Maxwell was out sick, demanding that Maxwell bring in a doctor's excuse or suffered a loss of pay for the sick time. On August 5, 1991, Koss wrote a memorandum to Dees in which she supported Maxwell's version of the events occurring on the midnight shift and voiced her concern that the effectiveness of the shift was deteriorating. On August 14, 1991, both Petitioner and Koss wrote memorandums to Dees. Each blamed the other for an escalating atmosphere of hostility between two factions on the midnight shift: One faction comprised of Koss and Maxwell, and the other faction comprised of Ford and two other Security Officers. On August 15, 1991, Carter, along with Respondent's Deputy Secretary of Operations and Director of Personnel Administration, met with the midnight shift personnel. During the course of the meeting, Petitioner admitted to use of Maxwell's card in entering the On-Line Game area as well as entry of the Deputy Secretary of Marketing's office. When asked directly if he had ever made a personal call from the On Line Game area, Petitioner stated that he had not. Later Petitioner conceded he had made the July 14, 1992 telephone call from the On-Line Game Area to his home. Petitioner began working the midnight shift in April of 1991. At that time, Koss was already working the midnight shift and was warned by another Lottery Investigator that Petitioner was not always accurate in his report of his hours worked. Koss began keeping track of Petitioner's attendance by noting his absences on her personal calendar. She had no knowledge of whether absences were approved or unauthorized. Koss observed Petitioner's June 1991 time sheet on the desk of an assistant and noticed that he reported having worked on June 12 and June 13, 1991. She had noted on her calendar that Petitioner had been absent on those days with the exception of four hours of excused absence to attend firearms training. She reported the discrepancy to Dees. Dees in turn consulted system computer records to determine if Petitioner had signed into the system on those days and determined that he had not. Consequently, it was determined that Petitioner had falsified his time sheet by recording his presence on both days. The exchange of access badges by Security Officers was a frequent occurrence even though it was known to be a security violation. The practice was frequent with the midnight shift and went unreported to the chief of security, who would have instituted disciplinary proceedings had he known of the practice. Testimony was presented by Randy Ringpfiel, a Security Officer, to the effect that the practice was also widespread among Lottery Investigators and known to management, but Ringpfiel's testimony is rejected in view of his demeanor and lack of credibility while testifying. Previously, in February of 1991, Petitioner accompanied a shipment of lottery tickets to an incinerator facility in Panama City, Florida, where lottery materials were to be destroyed in accordance with a contract between Respondent and the incinerator facility. An argument occurred with personnel at the incinerator. Petitioner perceived that the argument and disagreement with the incinerator workers resulted from the fact that they were white and he was black. Petitioner reported to Dees that the incinerator personnel were discriminating against him. A subsequent meeting was held between Respondent's management officials and management personnel from the incinerator facility. Respondent's management informed the incinerator management that racial discrimination toward its employees would not be tolerated. The attitude of incinerator personnel was not a result of racism. Instead, employees at the facility simply disliked dealing with shipments from Respondent since those shipments required special consideration in the process of destruction by burning. For instance, Respondent's security personnel were required to observe and oversee the actual destruction of all lottery materials. Often, the material from scratch off tickets complicated matters because the level of pollutants in these materials would exceed air quality and heat restrictions under which the facility was constrained to operate. Assured by incinerator management personnel that the altercations with Petitioner were not racial in nature, Respondent's management later transferred Petitioner, at his request, to the midnight shift which did not require performance of any duties associated with the incinerator facility. Carter, along with Respondent's Deputy Secretary of Operations and Respondent's General Counsel, met following the August 15, 1991 meeting with personnel of the midnight shift. The purpose of the meeting was to consider the appropriate disciplinary action to be imposed on Petitioner in view of the infractions committed by him. Since, in addition to violation of lottery security policies, the infractions involved dishonesty both in answering questions and in completing time sheets accurately, the options of termination and demotion were considered. Demotion to the position of Security Officer was determined to be the appropriate penalty after a review of Petitioner's past work performance and prior disciplinary actions. The consensus of management was that a great deal had been invested in the training of Petitioner and he had proven in the past that he could be a satisfactory employee, although not as a supervisor. It was felt that supervisors must be dependable and honest and permit upper level management to rely on their representations. This is particularly important with regard to security personnel assigned to supervisory positions on the night shift where there is no direct supervision beyond the Lottery Investigators on duty. In order to permit Petitioner to be considered for promotion back to the position of Lottery Investigator if his performance improved, the demotion of Petitioner from a sworn or certified law enforcement officer position to an unsworn position was not reported to the Florida Department of Law Enforcement. An action that very likely prevented an investigation and possible removal of Petitioner's law enforcement officer certification by that agency. Prior to his demotion, Petitioner received three performance evaluations. The first of these was an evaluation covering the period of November 13, 1987 to November 13, 1988, where Petitioner received an overall rating of "achieves standards". The evaluation included individual ratings in the categories of reliability, punctuality, and technical application which were "exceeds standards". Petitioner received a "below standards" rating in the category of communication skills. The second evaluation of Petitioner's performance covered the period November 13, 1988 to November 13, 1989. He again received an overall rating of "achieves standards." The evaluation showed that he exceeded standards in the area of technical application, and was deficient or below standards in the category of reliability and punctuality. Petitioner's third evaluation covered the period November 13, 1989 to November 13, 1990. Again, he achieved overall standards and exceeded standards in the area of technical application. He was deficient or below standards in the category of reliability and punctuality, as well as a category termed "other" where his attitude was noted to be poor regarding his work. His comments that he had no incentive were also documented in the evaluation. Petitioner was placed on a performance improvement plan from January 30, 1991, through April 30, 1991, which he satisfactorily completed. Respondent's discipline policy provides that discharge is an appropriate penalty for the first offense of a security policy violation. Penalties for the first offense of falsification of documents range from a written warning to discharge. There is no listed penalty for failing to truthfully answer questions posed by a superior.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered dismissing the Petition for Relief. DONE AND ENTERED this 10th day of November, 1992, in Tallahassee, Leon County, Florida. DON W.DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Fl 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 1992. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Petitioner's Proposed Findings Rejected to the extent that this proposed finding seeks to establish that management had prior knowledge of a generalized practice of violation of security procedures through the exchange of access badges by employees. Such a finding is not supported by weight of the evidence. Rejected, Petitioner's entry into a restricted area and use of a telephone for non-work related purposes is undisputed. Also, the evidence supports a finding that Petitioner was untruthful when questioned regarding the matter. 3.-4. Rejected, subordinate to Hearing Officer's findings on these matters. Respondent's Proposed Findings 1.-22. Accepted and addressed in major part, although not verbatim. COPIES FURNISHED: Auburn Ford, Jr. 727 Circle Drive Quincy, Florida 32351 Louisa H. Warren, Esquire Department of the Lottery Capitol Complex Tallahassee, Florida 32399-4011 Margaret Jones Clerk Florida Commission On Human Relations 325 John Knox Road Suite 240 / Building F Tallahassee, FL 32399-1925 Dana Baird, Esq. General Counsel Florida Commission on Human Relations 325 John Knox Road Suite 240 / Building F Tallahassee, FL 32399-1925
The Issue The central issue in this case is whether the Respondent is guilty of the violations alleged in the Emergency Order of Suspension; and, if so, what penalty should be imposed.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: At all times material to this matter, the Respondent, Robert L. Seamans, held alcoholic beverage license no. 23-00987, series 4-COP, for the licensed premises located at 11425 S.W. 40th Street, Miami, Dade County, Florida, known as the Lucky Lady. Respondent, age 64, has held alcoholic beverage licenses in the states of New York or Florida since 1963. Respondent has never been charged or reprimanded for a beverage law violation until these proceedings. At all times material to this case, the Respondent employed a barmaid at the Lucky Lady who was known as "Stella." Also present at the Lucky Lady during relevant time periods was a drifter known to the bar patrons as "Tom". In exchange for food and/or the use of the bar kitchen, Tom assisted the barmaids by carrying out trash, stocking the beer cooler, or filling the ice bins. Although Tom was not an employee at the Lucky Lady, he, like many of the regular patrons, had unrestricted use of the Lucky Lady's kitchen area. Sometime prior to April, 1990, a bar located near the Lucky Lady was closed by the Department following an investigation and a determination that controlled substances were being either sold or possessed on the licensed premises. Respondent was aware of the action taken to close the local bar and was further aware that undesirable persons from that bar might attempt to patronize the Lucky Lady. Respondent had considered joining the Department's Responsible Vendors Program but did not. Respondent's policy was to exclude any customer suspected of improper conduct whether related to drugs or other inappropriate activities. To effect that policy Respondent maintained a "barred" list which listed those individuals either by name or description who were not welcome at the Lucky Lady. Employees were instructed to request any person on the barred list to leave the facility. In the event such person refused, the police were to be summoned. On numerous occasions not described below, patrons of the Lucky Lady have observed Respondent escorting persons from the bar who were suspected of, or were known to have exhibited, improper conduct. Respondent relied on his wife, Tanya, to assist him to monitor the interior areas of the Lucky Lady. It was Mrs. Seamans' custom to remain in the licensed premises throughout the evening hours and to watch for any improper conduct. If she observed anything suspicious, she would either report the activity to her husband or to an employee for further investigation and/or action. Unfortunately, Mrs. Seamans sustained a broken hip on April 29, 1990, and was unable to supervise the licensed premises after that date. The Respondent did not obtain a replacement to perform Mrs. Seaman's monitoring function. During May, 1990, Vincent Weiner, a law enforcement investigator employed by the Department, conducted an undercover narcotics investigation of the Lucky Lady. To effect his purpose, Mr. Weiner assumed the name "Vinnie Capio" and began to patronize the licensed premises. On May 5, 1990, Mr. Weiner and a confidential informant went to the Lucky Lady and asked Stella if cocaine were available. Stella directed the two men to the restroom. Once there, they proceeded to complete the transaction with Tom based upon the price which had been negotiated with Stella ($25.00). On this occasion, in exchange for the $25.00, Mr. Weiner received a clear baggie containing a substance which was later analyzed and found to be cocaine. On May 8, 1990, Mr. Weiner returned to the Lucky Lady and again inquired if cocaine were available for purchase. On this date, Stella went to the kitchen and returned with a packet which was exchanged with Mr. Weiner across the bar counter for $25.00. This packet was later analyzed to be cocaine. At all times when Mr. Weiner was seated at the bar counter, other patrons were also present at the counter during the course of the transactions. Mr. Weiner attempted to make a second purchase of cocaine on May 8, 1990. Similar to the prior transaction of that date, Stella went to the kitchen but returned with a written message for Mr. Weiner which she handed to him (instead of another packet). Tide message stated, "he's OUT he got rid of all of them already." Stella did not identify the "he" noted in the message. On May 15, 1990, Mr. Weiner purchased two packets of cocaine at the Lucky Lady. During the first transaction, Stella advised Mr. Weiner to enter the kitchen where he met Tom. Tom then took a packet from an envelope on the kitchen shelf and exchanged it for $25.00. Later in the evening, Mr. Weiner gave $25.00 to Stella while Tom removed another packet from the envelope and handed it to the investigator. This second exchange also took place in the Lucky Lady kitchen. Both of the packets purchased on this date were later analyzed and found to be cocaine. On May 18, 1990, the investigator returned to the Lucky Lady and purchased two packets from Stella and Tom. Again, the exchange took place within the kitchen and the amount for these transactions totalled $50.00. The substance obtained on this date was later analyzed and found to be cocaine. On May 22, 1990, Mr. Weiner was seated at the bar when Stella asked him if he would be needing anything that evening. The investigator placed $25.00 on the bar while Stella went to her purse (located behind the bar counter) and retrieved a packet which she then exchanged for the money. This transaction took place in front of the other patrons seated at the bar. Later in the evening, in the same manner as described above, Mr. Weiner purchased a second packet from Stella. Both of the packets obtained on this date were later analyzed and found to be cocaine. On May 29, 1990, Stella was again behind the bar at the Lucky Lady. On this date, Mr. Weiner negotiated for one packet (which she obtained from her purse located within the bar area) in exchange for $25.00. This packet was later analyzed and found to be cocaine. The Respondent was present within the premises at the Lucky Lady during at least one of the transactions described above. There is no evidence that Respondent was personally involved in the exchanges nor that he was aware of the sales. The Respondent does not dispute that the substance purchased by Mr. Weiner on each of the occasions described above was cocaine. During the course of the investigation Mr. Weiner observed video poker games located within the licensed premises. The games were coin operated and required the player to choose a hand for five card draw poker. By discarding any or all of his original hand, the player attempts to, by the chance of the game, receive a winning hand. The game awards points for Winning hands and subtracts points for losing hands. If a player accrues more points than he paid for, he finishes ahead of the machine. On May 22, 1990, Mr. Weiner finished playing the video poker game with a total of 36 points. That total was 16 more than he had originally purchased. Mr. Weiner consulted Stella regarding the results and she wrote his name and the point total on a piece of paper which she then placed near the cash register. On May 23, 1990, Mr. Weiner returned to the Lucky Lady and requested his "mail." He intended to obtain his winnings related to the video game he had played the day before. He received $9.00 which he believed was the amount he was due for accruing the 36 points. No other explanation as to why Mr. Weiner would receive $9.00 from the bar (except in connection with video game results) was suggested by either party. On May 31, 1990, an Emergency Order of Suspension was executed by the Director of the Division of Alcoholic Beverages and Tobacco. That order was served on the Respondent on June 1, 1990, and the licensed premises have been closed since that time. On June 1, 1990, an inspection of the Lucky Lady premises was conducted by agents of the Department. The Respondent had keys to the video poker games described in Paragraphs 16 and 17.
Recommendation Based on the foregoing, it is recommended that the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco enter a final order revoking the Respondent's alcoholic beverage license no. 23-00987, series 4-COP, for the premises located at 11425 S.W. 40th Street, Miami, Dade County, Florida. RECOMMENDED this 17th day of July, 1990, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of July, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-3447 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE DEPARTMENT: Paragraphs 1 through 3 are accepted. To the extent the drug transactions are outlined in findings paragraphs 7 through 13, the Department's paragraphs 4 through 12 are accepted; otherwise rejected as irrelevant. To the extent the video poker games are addressed in findings paragraphs 16 and 17, the Department's paragraphs 13-15 are accepted; otherwise rejected as irrelevant. Paragraphs 16 through 18 are accepted. But see also finding paragraphs 3 and 4. Except as addressed in finding paragraph 2, paragraph 19 is rejected as irrelevant. Paragraph 20 is accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT: Paragraphs 1 through 3 are accepted. Paragraph 4 is rejected as irrelevant, comment or argument not constituting a factual finding. Paragraph 5 is rejected as recitation of testimony. The video poker games were games of chance in that the machine, of its own design (not a player's choosing) dictated the hand received by the player. Paragraphs 6 through 9 are accepted. It is accepted that Respondent did not personally engage in the illegal sales recounted in the order; otherwise, paragraph 10 is rejected a irrelevant, argument or comment. Paragraphs 11 and 12 are accepted. COPIES FURNISHED: Henry A. Amoon Continental National Bank Building Suite 408 400 Southwest 107th Avenue Miami, Florida 33174 John B. Fretwell Assistant General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1007 Stephen R. MacNamara Secretary Department of Business Regulation The Johns Building 725 South Bronough Street Tallahassee, Florida 32399-1000 Leonard Ivey, Director Division of Alcoholic Beverages and Tobacco Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000 Joseph A. Sole General Counsel Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32399-1000
The Issue Whether Leroy Smith and/or Alice Longwood are entitled to the $5,000.00 prize for a winning lottery ticket presented by Leroy Smith to the Lottery for collection?
Findings Of Fact On March 7, 1988, Mr. Smith completed a Lottery Winner Claim Form (hereinafter referred to as the "Form") and submitted the Form and a Cool Million instant-winning lottery ticket (hereinafter referred to as the "Ticket"), number 02-114569-303, good for a prize of $5,000.00 for collection. On the back of the Ticket Mr. Smith listed his name and address on the spaces provided for the person claiming the prize and signed the Ticket. The space on the back of the Ticket where the first name of the person claiming the prize was to be listed had been covered with a "white-out" material and "Leroy" written in. At the bottom of the Form Mr. Smith indicates that this was done to replace his first name for a nickname that had previously been entered on the ticket. Mr. Smith also listed his name, Social Security Number, address and phone number on the Form. Mr. Smith signed the Form as the "Claimant." In a letter dated March 8, 1988, DHRS notified the Lottery that Mr. Smith owed $7,478.20 in Title IV-D child support arrearages and $150.00 in court-ordered costs, a total of $7,628.20, as of March 8, 1988. By letter dated March 18, 1988, Mr. Smith was notified that the $5,000.00 prize for the Ticket he submitted was being transferred to the Comptroller for possible payment of his Title IV-D child support arrearages and court costs. The $5,000.00 prize was forwarded from the Lottery to the Comptroller on March 22, 1988. Mr. Smith was notified by the Comptroller by letter dated March 23, 1988, that the Comptroller intended to apply the $5,000.00 prize toward his unpaid obligation. Mr. Smith requested a hearing to contest the proposed action of the Comptroller. The Title IV-D child support arrearages and court costs owed by Mr. Smith are related to two child support cases involving Mr. Smith. First, on December 1, 1981, Mr. Smith was ordered to pay child support to Deidah Brown in an Order of Dependency and Support issued by the Circuit Court, Seventh Judicial Circuit, in and for Flagler County, Florida. On November 6, 1984, Mr. Smith was ordered to pay child support to Patti Victoria Smith by the same court. Mr. Smith's total obligation as of the date of the formal hearing was $7,348.20: $3,578.20 in public assistance arrearage, $3,620.00 in non-public assistance arrearage and $150.00 in court-ordered costs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, It is RECOMMENDED that a final order be Issued providing for payment of the $5,000.00 prize attributable to the Ticket to DHRS. DONE and ENTERED this 22nd day of November, 1988, in Tallahassee, Florida. LARRY J. SARTIN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1743 The Petitioners have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioners' Proposed Findings of Fact Proposed Finding Paragraph number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1-2 1. 3 1-4. 4 5. 5 6. 6 7-8. 7 10. 8 Statement of law COPIES FURNISHED: Jo Ann Levin Senior Attorney Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Leroy Smith Post Office Box 1465 Bunnell, Florida 32010 Patrick Loebig, Esquire Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Louisa Hargrett, Esquire Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Alice Longwood Post Office Box 1753 Bunnell, Florida 32010 Rebecca Paul, Secretary Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Tom Bell, General Counsel Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301
Findings Of Fact Background On March 12, 1991, the Department of Lottery (Department) issued Request for Proposal No. 91-007-LOT/TEN/P entitled "Request for Proposal for the Provision of Advertising and Related Services to the Florida Lottery" (hereafter "the RFP"). The deadline for submitting sealed proposals in response to the RFP was established as April 22, 1991, but extended to April 29, 1991, by Amendment 3 to the RFP. At the time of the deadline, ten proposals had been filed, including those of petitioner, Bozell, Inc. (Bozell), and intervenors, Earle Palmer Brown (EPB) and BBDO South (BBDO). By "Notice of Selection of Finalists," dated May 1, 1991, and posted at the Department's headquarters, the Department advised all bidders that: After review of written proposals submitted in response to the subject RFP, the Florida Department of the Lottery's Evaluation Committee has ranked the responsive proposals in the following order of preference: Ogilvy & Mather Earle Palmer Brown BBDO South Bozell W.B. Doner Fahlgren Martin Benito West & Company Beber Silverstein LMPM The Ad Team In accordance with Section 5.3 of the RFP, the Department intends to conduct oral presentations with the following firms for the purpose of determining final rankings: Ogilvy & Mather Earle Palmer Brown BBDO South Bozell W.B. Doner Pursuant to Florida Statute and Rule 53ER87-16, failure to file a formal written protest and the bond required by Section 287.042(2)(c), Fla. Stat., with the Secretary within 72 hours shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Here, there was no showing that any protest was timely filed to contest the Department's selection of the five finalists. The five finalists made oral presentations to the evaluation committee on May 7 and 8, 1991, and their cost proposals were opened and scored on May 8, 1991. At the conclusion of its work, the committee awarded EPB an average total score of 174.550 and Bozell an average total score of 171.150; 200 points was the maximum total possible. By notice dated Wednesday, May 8, 1991, at 8:07 p.m., the Department issued its "Notice of Intent to Negotiate a Contract" ranking the top five firms in the following order of preference: (1) EPB, (2) Bozell, (3) Ogilvy & Mather; BBDO; and (5) W.B. Doner. Bozell filed its formal written protest and petition for formal administrative hearing with the Department of Monday, May 13, 1991, at 4:29 p.m. The Request for Proposals The RFP consists of the original RFP issued by the Department, three amendments, and the Department's response to various written questions submitted by potential bidders. Pertinent to this case, the RFP provided: SECTION 1: GENERAL INFORMATION Introduction. This Request for Proposal ("RFP") has been issued by the Florida Department of Lottery ("Lottery") to obtain sealed proposals from qualified firms for the provision of advertising and related services to the Florida Lottery. This RFP, and all other activities leading toward the execution of a contract per this RFP, are conducted under the Lottery policies set forth in Rules 53ER87-10 through 53ER87-19, Florida Administrative Code, and Chapter 24, Fla. Stat. The Lottery considers it in the best interest of the State of Florida to procure the commodities/services described herein through a competitive process. All responding firms should read and be familiar with the Florida Public Education Lottery Act [Chapter 24, Fla. Stat.] to ascertain an understanding of the purposes and requirements placed on the Lottery. A copy of Chapter 24, Fla. Stat., is attached to this RFP. This proposed purchase is a Major Procurement as defined in Section 24.103, Fla. Stat. (1989). Glossary of Terms. * * * Responsive Proposal - Refers to a proposal which contains, in the manner required by this RFP, all documentation, drawings, information, plans, materials, certifications and affirmations, regardless of which section of the RFP sets forth the particular requirements. * * * Questions About This RFP. * * * If revisions to this RFP are necessary after the closing date for submitting proposals, the revisions will be provided to only those Respondents who have submitted Responsive Proposals and have met the basic requirements of this RFP. Such Respondents will then have the opportunity to modify their proposals in conformance with the revisions. Timetable The following timetable will be strictly adhered to in all actions relative to this procurement. * * * All proposals will be opened by Lottery employees at 2:00 p.m. on April 22, 1991 [extended to April 29, 1991, by Amendment 3] in the Purchasing Office at the aforesaid Lottery Headquarters. The public may attend the opening but may not review any proposals submitted. The evaluation process will begin immediately following the proposal opening. The Evaluation Committee will rank the proposals in order of preference based on the evaluation of the technical proposals in accordance with the criteria specified herein. Notice of selection of finalists shall be posted at the Lottery's headquarters. If more than five Responsive Proposals are submitted, at least the five top firms which have submitted Responsive Proposals will be selected for oral presentations to be made in Tallahassee, Florida, at the Lottery's Headquarters. Oral presentations are tentatively scheduled for the week of April 29, 1991 [extended to the week of May 6, 1991, by Amendment 3] . . . . The Evaluation Committee will score the oral presentations and then open and score the cost proposal. The final rankings will be determined based on the evaluation of the technical proposals, oral presentations and cost proposals. Notice of Intent to negotiate with the highest ranked firm will be posted at the Lottery's headquarters. If negotiations with the highest ranked firm are not successful, the Lottery may negotiate with the other listed firms in descending order of rank. Upon successful conclusion of negotiations with a Respondent, a Notice of Award of Contract will be posted at the Lottery's headquarters. * * * 1.12. Proposal Submission. It is the Respondent's responsibility to ensure that its proposal is delivered by the proper time at the place of the proposal opening.... * * * 1.14 Correction or Withdrawal of Proposal. A correction to, or withdrawal of, a proposal may be requested within 72 hours after the proposal opening time and date. Requests received in accordance with this provision may be granted by the Lottery upon proof of the impossibility to perform based upon an obvious error. The Lottery, in its sole discretion, will determine whether a bid may be corrected or withdrawn. Interpretations/Disputes. Any questions concerning conditions and specifications of this RFP shall be directed in writing to the Issuing Officer in the manner provided in Sections 1.8 and 1.9 of this RFP. Inquiries must reference the bid number and the date of proposal opening. No interpretation shall be considered binding unless provided in writing by the Lottery. Any prospective Respondent who disputes the reasonableness or appropriateness of the terms, conditions, and specifications of this RFP shall file a formal written protest in appropriate form within 72 hours of the availability of answers to questions as provided in Section 1.9 of this RFP. Any Respondent who disputes the Lottery's Notice of Selection of Finalists, Notice of Intent to Negotiate, or Notice of Award of Contract, shall file a formal written protest in appropriate form within 72 hours of the notices. Any person who files a formal written protest shall, at the time of filing the formal written protest, post a bond as set forth in Section 287.042(2)(c), Fla. Stat. Failure to file both a protest and bond within the time prescribed in Rule No. 53ER87-16, Florida Administrative Code, shall constitute a waiver of proceedings under Chapter 120, Fla. Stat. Legal Requirements. Applicable provisions of all federal, state, county, and local laws and administrative procedures, regulations, or rules shall govern the development, submittal and evaluation of all proposals received in response hereto and shall govern any and all claims and disputes which may arise between persons submitting a proposal hereto and the Lottery. Lack of knowledge of the law or applicable administrative procedures, regulations or rules by any Respondent shall not constitute a cognizable defense against their effect. * * * Purpose and Overview. A. In accordance with Chapter 24, Fla. Stat., the Florida Department of the Lottery has been charged with the responsibility "to operate the state lottery . . . so as to maximize revenues in a manner consonant with the dignity of the state and the welfare of its citizens." The Contractor will support the Lottery in its mission by providing the advertising services set forth in Section 2.2. The goal of these services is to maximize the sale of tickets, enhance the public image and visibility of the Lottery, and assist in communicating the intent that Lottery proceeds enhance education . . . . Scope of Services. The Contractor shall be the principal advisor and provider to the Lottery for the following advertising and services: Development of strategic advertising plan; Creative strategy, creation and production of all advertising (including television, radio, print, transit and outdoor); Placement of all print, radio, television, transit and outdoor advertising at the lowest competitive rate; Coordination of and contracting for televised broadcasts of lottery drawings; Ticket design; Creation and production of point-of- sales material; Media plans; Educational, promotional and other related activities as directed. The Technical Proposal. The objective of the technical proposal is to demonstrate the Respondent's understanding and proposed method of rendering the requested services. Each Respondent shall provide a written statement of the firm's understanding of the services requested herein as well as a detailed written plan outlining how the firm proposes to go about providing the services set forth in Section 2.2. At a minimum, the technical proposal shall consist of the following information and materials: * * * E. Firm Qualifications. At a minimum, each Respondent must provide the following information which demonstrates the Respondent's ability to provide the services requested: * * * 4. Resumes not to exceed one page each in length of all personnel who would be assigned major roles in the fulfillment of the work obligation outlined in Section 2.2, with a statement identifying the percentage of time, calculated annually, of each person who will work on the Lottery account. * * * 12. Certified financial statements in customary form for the last three (3) fiscal years including an auditor's report. Certified financial statements must be the result of an audit of the Respondent's records in accordance with generally accepted auditing standards by a certified public accountant . . . . * * * 18. List of type and number of additional employees that may be needed if awarded contract. * * * 33. Disclosure information required by and listed in Section 24.111, Fla. Stat. * * * Section 3: INFORMATION REQUIRED FROM RESPONDENT 3.1. GENERAL INSTRUCTIONS. * * * D. Technical proposals must include the following information, be limited to not more than 100 pages (not including cover sheet, table of contents, divider pages, creative materials or resumes) and be presented in the following sequence: * * * Vendor Information Form (Attachment B). * * * Performance bond commitment letter required by Section 6.6. All material or information required to be submitted as part of the technical proposal required by Section 2.3. * * * 13. Any other material or information required by this RFP. * * * 3.4 Use of Subcontractors. If a Respondent proposes to use one or more subcontractors, the proposal must identify the contemplated subcontractor(s) and the scope of the subcontractor's services, and must include evidence of each subcontractor's ability to fulfill its respective duties on behalf of the Respondent. Respondent must also provide the information required by Section 24.111(2), Fla. Stat., for each subcontractor as if the subcontractor were itself a vendor. * * * 3.6 Additional Information and Comments. Respondent shall not submit with their written proposals material beyond that which is covered in the 100-page technical proposal (not including cover sheet, table of contents, divider pages, creative materials or resumes), plus creative comps and samples, resumes of key personnel and the separate cost proposals. The Lottery reserves the right to request additional information from a Respondent in order to make a thorough review and fair comparison of all proposals submitted.... Section 4: MANDATORY REQUIREMENTS Terms. The Lottery has established certain mandatory requirements which must be included as part of any proposal. The use of the terms "shall," "must" or "will" (except to indicate simple futurity) in this RFP indicate a mandatory requirement or condition. The words "should" or "may" in this RFP indicate desirable attributes or conditions, but are permissive in nature. Deviation from, or omission of, such a desirable feature will not by itself cause rejection of a proposal. 4.2 Non-responsive Proposals. Proposals which do not meet all material requirements of the RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and without which an adequate analysis and comparison of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery. SECTION 5: PROPOSAL REVIEW AND CRITERIA FOR SELECTION 5.1. Proposal Submission. Only proposals submitted in the time frame stated herein and with the content required above will be reviewed and considered by the Lottery. A copy of Chapter 24, Florida Statutes, was attached to the RFP, and Section 24.111, Florida Statutes, was specifically referenced in Sections 2.3.E.33 and 3.4 of the RFP. The vendor information form itself referenced the requirements of Section 24.111(2), Florida Statutes. In accordance with RFP Section 1.8, EPB submitted the following question, among others, to the Department: "Does Attachment B [Vendor Information Form] need to be completed by all company officers?" The Department answered "Yes, see question #8, BBDO Atlanta, letter dated March 26, 1991." The referenced answer to BBDO Atlanta emphasized that "a vendor information form must be completed by each person listed in the instructions on the form [all officers, all directors, all owners, all partners, all trustees, all stockholders holding five percent or more, executive director and chairman of the board]." Even section 1.27 of the RFP required that vendor information forms be submitted to the Department prior to or at the time of submitting the proposal. Responsiveness of proposals Under the terms of the RFP, Sections 5.1 and 5.2, the Department was not to consider and evaluate non-responsive proposals. Non-responsive proposals are defined by Section 4.2 of the RFP as follows: Proposals which do not meet all material requirements of this RFP or which fail to provide all required information, documents, or materials will be rejected as non- responsive. Material requirements of the RFP are those set forth in Section 3.1 and without which an adequate analysis and comparison of proposals is impossible. The Lottery reserves the right to determine which proposals meet the material requirements of the RFP and to accept proposals which deviate from the requirements of the RFP in a minor or technical fashion as determined by the Lottery. At the time it submitted its proposal, EPB did not submit the vendor information forms required by subsections 2.3E33, 3.1 and 3.4 of the RFP and by Section 24.111(2), Florida Statutes, for at least three of its corporate officers or directors (Sally Brown, Louise Smoak, and Robert Morse), and did not submit any vendor information forms for its designated subcontractor, Premier Maldonado & Associates. The Department, through its counsel, first requested submission of these forms from EPB on May 8, 1991, the date on which the Notice of Intent to Negotiate was posted. EPB did not supply the missing forms for Premier Maldonado & Associates until May 14, 1991, and for the three corporate officers or directors until on or about May 29, 1991. The RFP required that the vendor information forms be submitted with the proposal, and Section 24.111(2), Florida Statutes, provided in mandatory language that: The Department shall investigate the financial responsibility, security, and integrity of any person who submits a bid proposal or offer as part of a major procurement. Any person who submits a bid proposal or offer as part of a major procurement must, at the time of submitting such bid proposal or offer, provide the following: A disclosure of the vendor's name and address and, as applicable, the name and address of the following: If the vendor is a corporation, the officers, directors, and each stockholder in such corporation, except that in the case of owners of equity securities of a publicly traded corporation, only the names and addresses of those known to the corporation to own beneficially 5 percent or more of such securities need be disclosed. If the vendor is a trust, the trustee and all persons entitled to receive income or benefit from the trust. If the vendor is an association, the members, officers, and directors. If the vendor is a partnership or joint venture, all of the general partners, limited partners, or joint ventures. If the vendor subcontracts any substantial portion of the work to be preformed to a subcontractor, the vendor shall disclose all of the information required by this paragraph to the subcontractor as if the subcontractor were itself a vendor. (Emphasis added) The Department, at hearing offered proof that it did not consider the language of the RFP or Section 24.111(2), Florida Statutes, to require that all such forms be submitted at the time the proposal is submitted, and that it had been the Department's policy to allow bidders to submit additional forms after bid submission. The articulated rationale for such policy is that based solely on the proposals or, stated differently, absent investigation, the Department is unable to assure itself that forms for all required individuals are submitted with any proposal. Accordingly, the Department considers the omission of such forms a technical deficiency that can be cured up to the point of contracting, and limits its investigation to the successful bidder. While the Department may find it difficult, absent investigation, to assure itself that the vendor information mandated by section 24.111(2) is submitted with the proposal, the mandate of section 24.111(2) and the RFP is clear and unequivocal: such information "must" be submitted with the proposal. Notably, under the provisions of the statute and RFP, the onus is on the bidder, the party privy to such information, to assure that its disclosure is complete and where, as here, its disclosure is not complete its bid is non-responsive, since it is at variance with the mandate of section 24.111(2) and the RFP. Importantly, under the requirements of section 24.111(2), the Department is precluded from contracting with any bidder who fails to submit the required vendor information. Accordingly, a successful bidder who, wittingly or unwittingly, failed to make the required disclosure (such as EPB in the instant case) could subsequently decline to provide the Department with the information and thereby effectively withdraw its bid, contrary to the provisions of section 1.14 of the RFP. Such renders the failure to submit the required information at the time of bid submittal a material defect, since it accords such bidder an advantage not enjoyed by other bidders that submitted the required information. In accordance with subsection 3.1D9 of the RFP, each bidder was required to submit with its technical proposal the performance bond commitment letter required by section 6.6 of the RFP. Section 6.6, as amended by Amendments 1 and 3, provided, in pertinent part: The successful Respondent shall be required, at the time of executing the Contract with the Lottery, to post an appropriate performance bond or other security acceptable to the Lottery in the amount of $2.5 million . . . The other acceptable forms of security are: irrevocable letter of credit; Certificate of Deposit assigned to the Lottery (which must be obtained from a financial institution having its principal place of business in the State of Florida) . . . . Respondents must submit with their proposal evidence that they will be able to provide the performance bond or other security. Such evidence may include, but is not limited to, a letter from an authorized agent of a bonding company committing to provide the performance bond or indicating that the bond underwriter is processing a request to provide the bond and stating unequivocally that the bond will be available upon execution of the Contract. At the time it submitted its proposal, EPB submitted an April 25, 1991, letter addressed to it from Sovran Bank as evidence of its ability to provide the required security. That letter provided: As follow up to our conversation yesterday, the company can restrict its revolving line of credit by $2,500,000 (Two Million Five Hundred Thousand Dollars) for a Letter of Credit of the same amount. The alternative is to apply for the Letter of Credit as a separate facility. The particular terms and conditions of the Letter of Credit would be worked out at the time of application . . . . While of the opinion that the Sovran letter evidenced EPB's ability to provide the required security, the Department likewise felt that the letter failed to evidence any commitment on EPB's part to restrict its line of credit to secure the subject letter of credit. Accordingly, it requested additional information from EPB, and by letter of May 1, 1991, EPB responded: This is to clarify the language in the Sovran Bank letter of April 25, 1991, included as Page 9 in Earle Palmer Brown's Proposal . . . Should Earle Palmer Brown be a successful respondent we will, at the time of executing the contract with the Lottery, either restrict our revolving line of credit with Sovran Bank by $2,500,000.00 for an irrevocable letter of credit, or will provide the Lottery with a surety bond for a like amount. The letter of May 1, 1991, adds more confusion than enlightenment regarding EPB's commitment to provide a letter of credit. Clearly, under the provisions of subsection 6.6 of the RFP, EPB's bare assurance that it would, alternatively, provide the Department with a surety bond was not acceptable evidence of its ability to provide such bond. As importantly, by phrasing its proposal as an alternative, to be exercised at its discretion, EPB lent confusion to the issue of what form of security it would provide. Notwithstanding, the requirement of the RFP was that the bidders "submit with their proposals evidence that they will be able to provide the . . . security," and the letter of April 25, 1991, while perhaps sparse, is facially adequate in that regard. Notably, the proof in this case confirms that EPB does have an adequate credit line with Sovran Bank which could be so restricted for a $2.5 million irrevocable letter of credit. In accordance with section 2.3E12 of the RFP, each bidder was required to submit with its technical proposal "certified financial statements in customary form for the last three (3) fiscal years including an auditor's report." In response to a question submitted pursuant to section 1.8 of the RFP, which asked: "If a company does not have certified financial statements for the last three years as required by Section 2.3.E.12 of the RFP, will it be disqualified from submitting a proposal?", the Department answered: "No. Although the absence of certified financial statements would render the proposal nonresponsive." At the time EPB submitted its proposal, it submitted certified financial statements for fiscal years 1986, 1987, 1988 and 1989. As EPB's fiscal year is the calendar year, its auditors had not yet completed their audit for fiscal 1990 by the response deadline. When EPB's certified financial statement for its fiscal 1990 became available on May 14, 1991, it promptly delivered a copy to the Department. While the RFP required financial statements for the last three fiscal years, the Department understood that a bidder's ability to provide such statements would depend on when its fiscal year closed. In this regard, it is common for an independent audit to require up to six months following the close of a fiscal year. Here, EPB was faced with exactly such a dilemma, specifically disclosed such dilemma in its proposal, and provided the financial statements for the last four fiscal years that were available to it. Under such circumstances, it cannot be concluded that the Department departed from the essential requirements of law when it declined to declare EPB's proposal non- responsive for its failure to include a certified financial statement for fiscal 1990, and accepted, as satisfying the requirements of the RFP, financial statements for the last three fiscal years that were reasonably available to EPB. In accordance with the RFP, each bidder was to identify all personnel who would be assigned major roles in the fulfillment of work under the contract. Pertinent to this case, subsection 2.3E provided: At a minimum, each Respondent must provide the following information which demonstrates the Respondent's ability to provide the services requested: * * * 4. Resumes not to exceed one page each in length of all personnel who would be assigned major roles in the fulfillment of the work obligation outlined in Section 2.2, with a statement identifying the percentage of time, calculated annually, of each person who will work on the Lottery account. * * * 18. List of type and number of additional employees that may be needed if awarded contract. At the time EPB submitted its proposal, it identified twenty-four key positions in account service, creative, media and several other categories. As to the management supervisor, the employee is identified as "selected," and as to an account executive and public relations supervisor, the employee is identified as "TBD" (To Be Determined). All other positions were identified with specific individuals and resumes were included for each. Here, Bozell contends that EPB's proposal is non-responsive because EPB did not name and include resumes for the foregoing three positions. Such contention is, however, unpersuasive. Section 2.3E18 clearly contemplated that some bidders would have to hire additional personnel if awarded the contract, and EPB complied with that section of the EPB by identifying such positions. Accordingly, EPB's proposal was not at material variance from the RFP in this regard. Although the Department's "Notice of Selection of Finalists," dated May 1, 1991, discussed supra, purported to rank the "responsive proposals" in order of preference, the proof demonstrates that the evaluation committee, who was charged with such responsibility, did not, by consensus or otherwise, ever determine the responsiveness of any proposal. Here, for the reasons heretofore set forth, EPB's proposal was non-responsive to the RFP, and the committee's failure to address the issue of responsiveness prior to scoring the proposals, for reasons discussed infra, materially affected the fairness of the evaluation process. Bozell's proposal was, however, responsive to the RFP. 2/ The evaluation committee Pursuant to Rule 53ER87-13(5)(i)(2), Florida Administrative Code, and Section 5.3 of the RFP, the Secretary of the Department appointed an evaluation committee, consisting of six members, to evaluate the proposals which were received from interested firms. Regarding the composition of such committee, the Department advised all prospective bidders, in response to a question posed pursuant to Section 1.8 of the RFP, that: The Evaluation Committee will be comprised of Lottery staff and volunteers from a cross- section of Florida business and academic communities. Subsequently, by notice of April 16, 1991, the Department advised all prospective bidders that the members of the evaluation committee would be as follows: Bernard Edwards Deputy Secretary Marketing Department of the Lottery Tallahassee, Florida Ben Johnson Newspaper Columnist Homles Beach, Florida Robert W. McKnight Assistant Secretary Department of Lottery Tallahassee, Florida Richard Mizerski Professor Tallahassee, Florida John Ruchalski Retired Businessman Jupiter, Florida Alan Sawyer Professor Gainesville, Florida Of the six committee members, only two, Bernard Edwards and Robert W. McKnight, were employees of the Department. No objection to the composition of the committee was lodged until the filing of the subject protest; however, there was likewise no point of entry provided by the Department to challenge the composition of the committee. Robert W. McKnight, who chaired the committee, has been employed by the Department as Assistant Secretary since March 4, 1991, and in such capacity has been responsible for the day-to-day operations of the Department. Mr. McKnight holds a B.S. and M.B.A. degree in business administration, with concentrations in advertising, and has in excess of fifteen years experience in marketing. Throughout the course of such employments, as well as his tenure as a Florida legislator, he has had the opportunity to monitor or supervise the work of advertising agencies employed to advance his products or person. Bernard Edwards, currently Deputy Secretary for Marketing of the Department, has been with the Department since 1988. During that tenure, he has filled, at various times, all three deputy secretary positions (operations, administration and marketing), and has participated in the advertising operations of the Florida lottery. Prior to his employment with the Department, Mr. Edwards was Executive Director of the Washington, D.C., lottery, and from 1983 to 1987 Deputy Executive Director of the Pennsylvania State lottery. During the course of such employments, Mr. Edwards has acquired significant experience in the marketing of lottery products, and the advertising incident thereto. Alan Sawyer is a Professor of Marketing and Chairman of the Department of Marketing of the University of Florida in Gainesville, and holds a Ph.D. from Stanford University in marketing. In addition to his teaching and research, Dr. Sawyer has worked with the Federal Trade Commission, as well as numerous other clients, on advertising matters, including matters of advertising deception, and is a recognized expert in advertising and marketing. Ben Johnson is a Doctoral Teaching Associate and Adjunct Professor at the University of South Florida where he teaches upper division and graduate College of Education courses in methods of teaching English, reading, and learning skills. In addition to teaching, Mr. Johnson has, for some years, been researching the lottery operations of various states. As a consequence of the knowledge he has gained concerning those operations he has written a book, The Lottery Book, scheduled for publication in September 1991, which provides general information for players of various state lotteries, and has a nationally syndicated newspaper column called "The Lottery Column" wherein he answers readers' questions regarding lottery operations. From such experience, Mr. Johnson has developed a knowledge of lottery operations, as well as an appreciation for effective lottery marketing and advertising. John Ruchalski, currently retired, holds a degree in business and marketing, and has 35 years of retail management experience. Of those years, 17 were spent as Senior Vice President of Burdines, three as Chief Executive Officer of Bullock's, and two as president of Bloomingdale's. Mr. Ruchalski's past activities have also included service as president of the Florida Chamber of Commerce and chairman of the board of the Florida Retail Federation. In all, the proof shows that Mr. Ruchalski has a strong marketing background, and a familiarity with the advertising needs incident to such operations. The final member of the committee, Richard Mizerski, is a Professor of Marketing at Florida State University, and holds a Ph.D. from the University of Florida in Economics and Business Administration, with a major concentration in marketing and a minor concentration in advertising. Dr. Mizerski, like Dr. Sawyer, has, in addition to his teaching and research, extensive consulting experience in marketing and advertising, and is a recognized expert in the field. Overall, the proof demonstrates that the composition of the evaluation committee was appropriate for the work it was tasked to do, and that it had adequate time to perform an appropriate evaluation. Each committee member had experience and knowledge in marketing, and advertizing incident thereto, and lent to the evaluation process common and diverse experiences in such areas which helped provide a balanced consideration of the proposals. As importantly, each was shown to be committed to the integrity of the process, and complied with the provisions of Section 286.011, Florida Statutes, by assuring that all committee meetings at which official acts were to be taken were conducted publicly, and by not discussing any matter pertaining to their evaluations with any other member except during meetings that had been properly noticed. Market research data Prior to reviewing the proposals, one or more of the committee members requested information from the Department that would accord them insight into the program area. In response to such request, the Department provided each committee member with the market research data it had available. Such data provided demographic insight into Florida lottery marketing operations. At hearing, Bozell complained that it was never informed that the market research data had been provided to the committee, and offered proof, if credited, that had it known such fact it would have drafted its proposal differently. Such proof was not, however, persuasive, nor was the provision of such information to the committee inappropriate. Here, the proof demonstrates that the data provided by the Department was a matter of public record, and many of the committee members, through their research and training, were already familiar with it prior to their appointment. Bozell, as the current provider of advertising services to the lottery, was very familiar with the data, its subcontractor had complied it, and Bozell used it extensively in its proposal. In sum, Bozell was not disadvantaged by the provision of such data to the committee, and it was not treated any differently than any other bidder in this regard. As importantly, the provision of such information to the committee to lend insight into the program area for which services were being sought was quite appropriate to the evaluation process. Technical proposed evaluation Section 2.3 of the RFP describes the items required to be submitted with a firm's technical proposal, and was designed to assess a firm's understanding and proposed method of rendering the services requested by section 2.2 of the RFP. It provides that, "at a minimum," the proposal shall contain the information and materials requested by subsections 2.3A through 2.3E. Subsection 2.3A required submittal of a proposed advertising approach for the Florida lottery which addresses a three-year summary outline advertising plan, to include recommendations for advertising and promotion, and a proposed one-year timetable for advertising, showing development of creative, production, approval, placement and run-time. Subsection 2.3B required comprehensive artistic representations consisting of a detailed media plan for an eight-week Florida lottery instant game within a $1,250,000 budget; a name, ticket design and prize structure for the instant game; a 30-second radio spot for the instant game; a print ad for newspaper or magazine placement for the game; and a point- of-sale example for the game. Subsection 2.3C required one complete advertising campaign representative of the firm's work, including budget, creative strategy, positioning, media strategy and execution, and post-buy analysis. Subsection 2.3D required creative samples previously produced by key members of the proposed creative team consisting of TV ads, radio ads, print ads, outdoor campaigns, and point-of-sale samples. Finally, subsection 2.3E, entitled "firm qualifications," required, "at a minimum," information concerning 33 specific items, "which demonstrates the [firm's] ability to provide the services requested." Among the items for which information was required were the following: 3. Brief and concise statement of Respondent's advertising philosophy, taking into consideration the following points and others that you may feel are appropriate: Method the Respondent uses for developing advertising. How the Respondent currently measures the effectiveness of its advertising. * * * Evidence of any work done for a state, multi-state, national or provincial lottery. Information regarding any advertising or other experience with state agencies and other governmental entities. * * * 12. Certified financial statements in customary form for the last three (3) fiscal years including an auditor's report . . . . * * * 29. Discussion of contributions that your firm could make toward the growth of the Lottery. Section 5.4 of the RFP set forth the general criteria by which a firm's response to subsections 2.3A-E would be evaluated. Such general criteria were the overall qualifications, experience and abilities of the firm, its staff, and contractors to provide timely and professional advertising and related services, determined by evaluating the information contained in subsection 2.3E; and, the relative creativity, approach, quality and thoroughness of the firm's proposed plans directed toward subsections 2.3A-D of the RFP. Such section concluded: "The evaluation worksheet for the technical proposal is attached as Attachment F." Attachment F to the RFP set forth the specific criteria by which a firm's response would be evaluated. That attachment provided as follows: This evaluation considers information submitted in the technical proposal. Emphasis is placed on the firm's qualifications and ability to do the work, which is addressed in the Technical Proposal. A total of 80 points is obtainable. The Technical Proposal shall be evaluated in accordance with the following criteria: Overall Ability - 40 points maximum Do the resumes of the account team support the Respondent's competency to provide the services required by Section 2.2? Proposed Account Team: Is the team make-up appropriate for the work? Do the team members have experience with comparable work? Are there any sub-contracted firms involved? Are minority sub-contractors utilized? Are the hours assigned to the various team members for each task appropriate? Has the Respondent provided advertising services of the scope required in the past? Experience of the Respondent and staff providing advertising service within the State of Florida. Experience of the Respondent and staff in providing Lottery, pari- mutuel, or other gaming related advertising. Financial stability of the firm and financial capability to provide the entire scope of services. Experience of the firm in providing advertising services to accounts in excess of $10 million. Experience of the firm in placing large volumes of electronic media in all media markets in Florida. Based on 1-3, award points, as follows: 20-30 points for exceptional experience 10-20 points for average experience 0-10 points for minimal experience Has the Respondent provided advertising services to other state or governmental entities? If the work was acceptable, award up to 3 points. If the firm has not done such work, award zero points. Does the Respondent possess unique abilities which would make a noticeable (positive) impact on the project? If the answer is yes, award up to points and note reasons. If the answer is no, award zero points. Does the team composition and each member's percentage of involvement, the use of subcontractors (if any), office location, and/or information contained in the proposal indicate that the Respondent will meet time and budget requirements? If the answer is yes, award up to points and note reasons. If the answer is no, award zero points. Does the Respondent's current workload make it likely the Respondent can provide timely and complete service? If the answer is yes, award up to 2 points and note reasons. If the answer is no, award zero points. Advertising approach and creative samples required by Sections 2.3A-D = 40 points The relative creativity, approach, quality and thoroughness of the firm's proposed plan for providing the requested services required by Section 2.3(A). Value: 10 points The relative creativity, approach, quality and thoroughness of the comprehensive artistic representations required by Section 2.3(B). Value: 10 points The relative creativity, approach, quality and thoroughness of the advertising campaign required by Section 2.3(C). Value: 5 points The relative creativity, approach, quality and thoroughness of samples required by Section 2.3(D). Value: 15 points The criteria for evaluating the creativity, approach, quality and thoroughness of above items B-1 through B-4 are as follows: Creativity Were the ideas and approach exciting and interesting? Did the samples evoke positive and appropriate emotions? Did the samples capture and hold attention? Did the samples demonstrate fresh and original thought or were they banal and mundane? Approach Was the approach germane and appropriate? Was the approach unified and integrated? Was the approach clear, direct and unambiguous? Quality Were images crisp, sharp, and distinct except where the intention is clearly otherwise? Was the production professional? Was sound free of distortion and visual free of unnecessary clutter? Thoroughness Did the advertising show an appropriate consideration for all facets of the market? Was the advertising comprehensive and balanced? Did the advertising use a full range of tools and techniques to ensure maximum penetration and retention? By memo to all committee members, entitled "Instructions and Timetable for Evaluation Committee Members," and again at the commencement of their deliberations, all committee members were advised that they must evaluate the proposals based on the criteria set forth in the RFP, and to utilize their own individual expertise in applying the criteria. In this regard, the proof demonstrates that the members of the committee abided such directive, and scored the proposals based on the established criteria, except as hereinafter discussed, as applied through their own background and experience. 3/ At the commencement of their deliberations, the committee members agreed that the format they would follow in evaluating the technical proposals would be to first review all the proposals, and then score the proposals individually. This procedure was followed although, not unexpectedly, some members made preliminary assessments as they progressed through the various proposals. Upon completion of their review, the members then scored each proposal and, as appropriate, made adjustments to preliminary assessments they had made based on the perspective they had acquired after their review of all the proposals. Here, Bozell complains that the RFP did not permit the scoring of proposals relative to each other but, rather, required that the proposals be evaluated and scored solely by applying the criteria independently to each proposal, and that the failure of all committee members to so evaluate the proposals is a fundamental flaw in the evaluation process. Bozell's complaint is not, however, persuasive. Here, the RFP required, among other things, a determination of the relative creativity, approach, quality and thoroughness of a firm's plans for providing the services requested by subsections 2.3A-D of the RFP. Under such circumstances, considering the subjective nature of the evaluation, it would not be unreasonable to assign points based on relative merit. And, considering the fact that the proposals were not scored until all proposals had been reviewed that, more likely than not, is what was done by each committee member, consciously or subconsciously. As importantly, each member of the committee scored the proposals independent of any other member of the committee, and was consistent with the approach he took as to each firm's proposal. 4/ Accordingly, it cannot be concluded, based on the proof in this case, that the evaluation process was fundamentally flawed because of the manner in which points were awarded. However, because points were awarded on a relative basis, the inclusions of non-responsive proposals in the evaluation process could have materially affected the scoring of proposals and the Department's failure to exclude non-responsive proposals from the scoring process, as required by section 5.1 of the RFP, was a material departure from the requirements of the RFP. Bozell also complains that Mr. Johnson evaluated the technical proposals in light of his knowledge about the success of other states' lottery advertising. The application of such expertise to the criteria contained in the RFP was, however, appropriate, as discussed supra. As noted by Mr. Johnson: . . . That's my frame of reference against which I measured all of the companies. I could tell that some of the companies really didn't know what they were talking about, because they were suggesting things that were failing in other states. And I was aware of that from my general information background. [Tr. 471] As heretofore noted, selection of committee members with knowledge of the program area, and the exercise of that expertise in applying the criteria, is most appropriate to a reasoned evaluation of a proposal. Finally, with regard to the evaluation of the technical proposals, Bozell offered proof that some committee members failed to apply specific criteria mandated by the RFP, or otherwise scored the proposals in a manner at variance with that called for by the RFP. In this regard, the proof demonstrates that while proposals were to be evaluated, at least in part, based on the different games and formats that were presented in the technical proposals (see subsection 2.3B of the RFP), Mr. Ruchalski did not do so because he had no knowledge upon which to base a decision. Regarding subsections A5-8 of Attachment F (the scoring criteria), Mr. Johnson did not award points in the manner mandated by each subsection. Finally, notwithstanding that an evaluation of the overall ability of the applicant, as set forth in section A of Attachment F to the RFP, required an examination of the "financial stability of the firm and financial capability to provide the entire scope of services," no evaluation of the financial integrity and responsibility of any of the firms was made, and such criteria were not applied in the evaluation process. 5/ In its proposed recommended order, the Department suggests that it would be unnecessarily burdensome to require a detailed financial review by the agency at the initial bid analysis stage since, ultimately, only one firm will be awarded the contract, and because security and financial investigations will be done before a contract is awarded. While such may be the case, it was the Department's election to provide for an analysis of financial stability and capability as part of the review criteria. Oral presentation evaluation The second phase of the evaluation process was the scoring of the oral presentations. Pertinent to this case, section 5.3 of the RFP provided: . . . The oral presentations must be made by the account service, creative and media personnel who would work on the account. There will be no limitation on the information and materials pertinent to this RFP which may be utilized . . . . Section 5.5 of the RFP provided that presentations would be scored based on the following general criteria: Understanding of services requested -- up to 20 points, account team -- up to 25 points, responsiveness to questions -- up to 15 points, and overall impression -- up to 20 points. Finally, Attachment G to the RFP provided that the evaluation relative to the account team would be scored as follows: Account Team = 25 points maximum Did the proposed account team participate? Creativity, quality, uniqueness demonstrated by account team? Respondent's advertising philosophy demonstrated, long term image building? Did account team members prepare samples submitted? EPB's oral presentation was made by Jeb Brown, the chief executive officer of EPB; Craig Davis, the president of EPB's Florida operations; Mike Knaisch, account group head; Kandi Kirkland, account supervisor; Bruce Ayers, media director; Scott Mackey, associate creative director; Pat Hanlon, creative director; Tom Hall, chairman of EPB; and Jeff Tucker, president of public relations. Each of the presenters were identified by EPB as key personnel to be assigned to the Florida lottery account, except Jeb Brown and Tom Hall. As part of its oral presentation, EPB utilized a video tape, which presented favorable comments by the head of the Virginia lottery concerning EPB's performance for it. Addition-ally, EPB included in such video a character it utilizes for the Virginia lottery, "Lady Luck," who also said "nice things" about EPB. Here, Bozell complains that the participation of Jeb Brown and Tom Hall, in the oral presentation, as well as the use of the video which included comments by the head of the Virginia lottery and "Lady Luck," was improper under the provisions of the RFP because they were not members of the account team. Such compliant is, however, unpersuasive. While section 5.3 of the RFP did require that the oral presentation be made by the account, creative, and media personnel who would work on the account, it did not expressly preclude others from participating, and the RFP placed no restrictions on the information and materials pertinent to the RFP that could be utilized. Accordingly, EPB's oral presentation was not at variance from the RFP and, if it were, it was not shown to be a significant deviation. As heretofore noted, the evaluation relative to the account team allowed an award of up to 25 points, and required, among other things, a determination of whether the account team participated; the creativity, quality and uniqueness demonstrated by the account team; and whether the account team members prepared the samples that were submitted. The committee members did not, however, make any specific inquiry regarding whether the account team participated or prepared the samples, although the bidders generally made it a practice to introduce the account team members, but assumed such to be the case for purposes of scoring the presentations. Here, Bozell contends that the committee's failure to expressly inform itself as to whether the account team participated and prepared the samples, as opposed to indulging the assumption that they did, constitutes a significant failing in the evaluation process. However, Bozell failed to demonstrate, at hearing, that the committee's assumption was misplaced. Finally, Bozell offered proof that Dr. Sawyer awarded Bozell 21 points and EPB 22 points for "overall impression," when 20 points were the maximum contemplated by the RFP. Such error was, however, inadvertent, it simply being the intention of Dr. Sawyer to award EPB one more point than Bozell, and was harmless since it did not affect the overall outcome. Cost proposal evaluation Section 5.6 of the RFP provided the criteria for evaluation of the cost proposals and provided that: Finalists' cost proposals will be given points based on an evaluation of the proposed compensation and the experience and qualifications of the proposed staff. A maximum value of 40 points was established for this part of the evaluation. The cost proposals, which the committee members were to evaluate, were contained in a "sealed cost proposal envelope" and were, pursuant to subsection 2.4B of the RFP, to contain: The cost proposal shall include a calculation of the Respondent's proposed compensation for undertaking and completing all phases of the services requested and outlined in this RFP. The cost proposal shall be prepared in the same format as illustrated on Attachment "E" and shall be completed as follows: The Respondent shall provide an aggregate gross salary by work category and position classification for all personnel who will work on the Lottery's account. The aggregate gross salary shall include only that portion of each individual staff member's time that will be attributable to the Lottery account. The portion of time proposed in the cost proposal shall match the labor hour percentages proposed for each individual as required in Section 2.3(E)(4). The Respondent shall also include a proposed multiplier of the type described in paragraph A above. The Respondent shall multiply the aggregate gross salary by the multiplier and the product shall be included in the cost proposal. The Respondent shall also include, in the sealed cost proposal envelope, resumes for all personnel whose salary, or portion thereof, was included in the calculation of the proposed aggregate gross salary resumes shall be included regardless of whether the resumes have also been included in the technical proposal envelope. While the RFP contemplated that all three sections of the proposal (technical, oral presentation, and cost) would be evaluated and scored independent of each other, and that the evaluation of the cost proposal would be limited to an evaluation of the information contained in the "sealed cost proposal envelope," not all committee members so limited their evaluation. Rather, some committee members utilized the knowledge they had gleaned from evaluating the technical proposals and oral presentations, as well as the scores they had assigned during the course of those evaluations, to assist them in assessing the qualifications and experience of the proposed personnel and weighing the firms' proposed compensation. Indeed, it is difficult to imagine how any committee member could ignore the knowledge he had acquired during the course of his evaluations that was reflective of the quality and experience of the proposed staff, any more than he could ignore the expertise he had acquired through his life experiences, in evaluating the cost proposal. Notably, the RFP, as it related to the cost proposals, provided that "the portion of time proposed in the cost proposal shall match the labor hour percentages proposed for each individual as required by section 2.3(E)(4)" of the RFP [the key personnel], and the committee had, as part of their evaluation of the technical proposal, previously evaluated the proposed account team, as well as the relative creativity, approach, quality and thoroughness of their proposals relative to subsections 2.3A-D of the RFP. At the oral presentation, the committee had an opportunity to put faces with names, and broaden their knowledge of the individuals involved. Accordingly, when it came time to evaluate the cost proposals, which involved a consideration of staffing and salary, the members of the committee had certainly formulated opinions regarding the quality of the staff proposed by the respective firms, and balanced that opinion against the proposed compensation to derive the most cost effective proposal. While it may seem unreasonable to restrict the committee to the bare resumes and costs set forth in the cost proposal, as the basis for their evaluation, the reasonableness of the provisions the Department formulated are not at issue in this proceeding. Accordingly, it is concluded that by going beyond the information contained within the cost proposal, the members of the committee materially deviated from the requirements of the RFP. This conclusion prevails, since those bidders who were favored in the evaluation of the technical proposals or oral presentation were, by the consideration of the opinions derived from such evaluations, accorded an unfair advantage over other bidders.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered which rejects all bids, and that a new invitation to bid be extended. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 25th day of July 1991. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of July 1991.
The Issue The issue is whether the word, "internal," in Florida Administrative Code Rule 61D-14.041(1) is an invalid exercise of delegated legislative authority because Respondent exceeded its grant of rulemaking authority or because this word enlarges, modifies, or contravenes the law implemented, in violation of sections 120.56(3) and 120.52(8)(b) and (c). In sum, Petitioner and Intervenor challenge rule 61D-14.041(1) only to the extent that this rule requires that each slot machine contain an internal random number generator.
The Issue The issue in this case concerns the application of Section 24.115(4), Florida Statutes, to a claim for payment of a $5,000.00 lottery prize where the winning lottery ticket was purchased by two individuals, one of whom has a substantial court-ordered child support arrearage, one of whom does not, and the prize claim form is submitted by the individual who owes child support. The Petitioners contend that only half of the prize should be subject to the outstanding child support debt. The Respondents contend that the entire prize should be subject to the outstanding child support debt. Shortly after the filing of the request for hearing in this case, the Office of the Comptroller filed a Motion To Join Indispensable Parties, by means of which it sought to join the Department of the Lottery and the Department of Health and Rehabilitative Services as parties to this case. Both of the last mentioned agencies agreed to being joined as parties and neither Petitioner objected to the joinder. Accordingly, the Department of the Lottery and the Department of Health and Rehabilitative Services were joined as parties respondent. At the hearing both Petitioners testified and also offered exhibits. The Respondents presented the testimony of several witnesses and also offered several exhibits. At the conclusion of the hearing, the parties were allowed ten days within which to submit proposed recommended orders. All parties filed post-hearing submissions containing proposed findings of fact. All proposed findings of fact are specifically addressed in the appendix to this recommended order.
Findings Of Fact Based on the testimony of the witnesses and the exhibits received in evidence at the hearing, I make the following findings of fact. Shortly after the Florida Department of the Lottery began selling lottery tickets, the two Petitioners, Lawrence R. Lindbom and Donald Johnston, began the regular practice of buying lottery tickets together. They agreed that they would make equal contributions to the cost of the lottery tickets and that they would share equally in the proceeds of any lottery prizes resulting from their co-purchased lottery tickets. On January 26, 1988, consistent with the foregoing agreement, Petitioner Lindbom purchased four instant game lottery tickets. Petitioner Johnston had contributed funds to pay half of the cost of the four tickets. Lindbom retained two of the tickets and gave the other two tickets to Johnston. At Johnston's place of employment, Lindbom scratched the two lottery tickets he had retained. One of the two was a $5,000.00 winning ticket. At the suggestion of some third party, Lindbom wrote his name on the winning ticket. He then showed the ticket to Johnston, and the other people present congratulated the two of them on their good fortune. The two Petitioners agreed that Lindbom would submit the ticket for payment in both of their names. On January 27, 1988, Lindbom traveled to the Jacksonville District Office of the Department of the Lottery, where he inquired about filling out a claim form in two names. He also inquired as to whether any money would be deducted from the prize. Upon being advised that only one name could be placed on the claim form and that no money would be deducted from the prize, Petitioner Lindbom called Petitioner Johnston to advise him of what he had been told at the Jacksonville District Office. Johnston told Lindbom to go ahead and file the claim in Lindbom's name and they would split the prize when it was received. Thereupon, Petitioner Lindbom filled out a Florida Lottery Winner Claim Form. The information he placed on the claim form included information about the lottery ticket and Lindbom's name, address, telephone number, and social security number. At the bottom of the claim form, Lindbom signed a printed statement reading as follows, in pertinent part. "Under penalty of law, I swear that to the best of my knowledge and belief, the name, address, and social security number correctly identify me as the recipient of this payment." The claim form and winning ticket were submitted to the Tallahassee office of the Department of the Lottery for validation and payment in accordance with that Department's procedures. The Department of the Lottery provided the Department of Health and Rehabilitative Services a list of $5,000.00 winners which contained the name of Lawrence Lindbom. DHRS determined from its records that there was an arrearage in child support payments by Lawrence Lindbom in the amount of $12,014.65. On February 1, 1988, DHRS certified the child support arrearage to the Department of the Lottery in accordance with Section 24.115(4), Florida Statutes (1987). On February 5, 1988, the Department of the Lottery forwarded the entire $5,000.00 claimed by Lindbom to the Office of the Comptroller of the State of Florida. On February 8, 1988, the Office of the Comptroller notified Lindbom by certified mail of its intention to apply the entire $5,000.00 prize toward Lindbom's unpaid court-ordered child support, with the result that no payment would be made to Lindbom. Following receipt of the letter from the Office of the Comptroller, Lindbom and Johnston jointly wrote a letter to the Comptroller protesting the proposed disposition of the prize and requesting a hearing. At all times material to this case, the Department of the Lottery had in effect Rule No. 53ER87-43, F.A.C., titled "Procedure for awarding prizes." That rule reads as follows, in pertinent part: (6) Until such time as a name is imprinted or placed upon the back portion of the lottery ticket in the designated area a lottery ticket shall be owned by the physical possessor of such ticket. When a name is placed on the rear of the ticket in the designated place, the person whose name appears in that area shall be the owner of the ticket and shall be entitled to any prize attributable thereto.
Recommendation For all of the foregoing reasons, it is recommended that the Office of the Comptroller issue a final order in this case providing for payment to the Department of Health and Rehabilitative Services of the entire $5,000.00 prize originally claimed by Petitioner Lindbom. DONE AND ENTERED this 9th day of June, 1988, at Tallahassee, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of June, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-1176 The following are my specific rulings on all proposed findings of fact submitted by all parties. Findings proposed by the Petitioners The Petitioners' proposal consisted of a letter in which they assert three specific reasons that entitle them to the relief sought. The factual aspects of those three reasons are addressed below. The legal aspects have been addressed in the conclusions of law. Reason 1. Accepted as finding of fact. Reason 2. Rejected as subordinate and unnecessary details. Reason 3. Rejected as constituting argument rather than facts. Findings proposed by the Respondents The Respondents filed a joint proposed recommended order. The paragraph references which follow are to the paragraphs of the Findings of Fact section of the Respondents' proposed recommended order. Paragraphs 1 and 2) Accepted in substance, with the exception of the implication that the Petitioners were not co- purchasers of the lottery tickets. Paragraph 3: First sentence accepted. Second sentence rejected as inconsistent with the evidence. Paragraphs 4, 5, 6, and 7: Accepted. Paragraph 8: Omitted as unnecessary procedural details covered by introduction. Paragraph 9: Accepted. Paragraph 10: Accepted in substance. First unnumbered paragraph following Paragraph 10: Rejected as constituting subordinate and unnecessary details. Second unnumbered paragraph following Paragraph 10: Accepted. Third unnumbered paragraph following Paragraph 10: Rejected as irrelevant. Fourth unnumbered paragraph following Paragraph 10: Rejected as irrelevant or subordinate and unnecessary details. Fifth unnumbered paragraph following Paragraph 10: First sentence accepted. The reminder is rejected as argument rather than proposed findings of fact. COPIES FURNISHED: Mr. Lawrence R. Lindbom 3542 Tiara Way, West Jacksonville, Florida 32217 Mr. Donald Johnston 12888 Beaubien Road Jacksonville, Florida 32225 Jo Ann Levin, Esquire Senior Attorney Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399 Chriss Walker, Esquire Department of Health and Rehabilitative Services 1317 Winewood Blvd. Tallahassee, Florida 32399-0700 Thomas A. Bell, Esquire Department of Lottery 250 Marriott Drive Tallahassee, Florida 32301 The Honorable Gerald Lewis Comptroller The Capitol Tallahassee, Florida 32399-0350
The Issue The issues to be resolved in this proceeding concern whether the Emergency Rule 53ER99-48, Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority, whether it was promulgated pursuant to a true emergency and whether certain agency statements contained in letters promulgated by the agency constitute an unadopted rule, in purported violation of Section 120.54(1)(a), Florida Statutes.
Findings Of Fact The Petitioner is a corporation incorporated in the Commonwealth of Virginia as a "not-for-profit" corporation. It is registered to do business in the State of Florida. NALP is an association of six member companies. It became organized following the passage of a change to the Internal Revenue Service (IRS) tax code enacted on October 21, 1998. That provision, I.R.C. Section 451(h), the so called "transitional rule" provided that if state lotteries offered to "cash-out" previous prize winners on a limited basis, then the tax payer would not be subject to the so called "constructive receipt doctrine." NALP's members purchase large lottery payment streams in every state that has a lottery, including Florida. The winners assign their right to the annual payments in return for a lesser amount than their payments would total over, in Florida, the twenty-year time span for pay-outs, in return for receiving the immediate cash lump-sum. In Florida this is accomplished pursuant to Section 24.1153, Florida Statutes (1999). One of NALP's main purposes is to protect the interests of its member companies through monitoring and participating in the formulation of federal legislation as well in rulemaking before various state agencies including the Florida department, as well as to provide educational materials and functions for members and for the various state lottery agencies. Each of the member companies owns at least one Florida Lottery prize and in the aggregate they own dozens of Florida large lottery prize payment streams worth over fifty million dollars. The Respondent is the Florida Department of The Lottery (Respondent or Department). It is a state agency authorized under Chapter 24, Florida Statutes, to organize, regulate and administer the operation of the state lottery and to properly account for, deposit in trust and invest lottery ticket sale proceeds and to pay related prizes from funds received from ticket sales and through investments of such lottery department revenues, all pursuant to Chapter 24, Florida Statutes, and related rules. Petitioner's Standing: The Petitioner has standing to pursue its challenge to the rule and agency statements in this case. Each of its members owns Florida lottery prizes. That is, by operation of assignment under Section 24.1153, Florida Statutes, they have assumed the interests of the actual lottery prize winners who have assigned their prizes to the members of NALP by assignment agreements enacted pursuant to the terms of this statute. The prize winners (winning ticket holders) received discounted amounts, lump-sum settlements, in lieu of prizes paid in equal annual installments over twenty years. Therefore, each of the companies who are members of NALP and hold assignment rights to the lottery prizes, are eligible for the lottery's one-time, cash-out opportunity under the subject Emergency Rule 53ER99-48, Florida Administrative Code. The Emergency Rule applies by its own terms to the Petitioner's members, as they are assignees of the prizes involved. Through the Emergency Rule as well, the Department, in effect, is competing for the same clientele, that is, past lottery prize winners who won the lottery during the relevant time period, and the same cash flow from the prize winners' annual payments as are all of the Petitioner's members by virtue of the above-referenced assignment statute. The only real difference is that the Department, by the terms of the rule, does not have to comply with the extensive "Consumer Protection" provisions of the statute which include court proceedings, explicit disclosures of purchase price and discount rate and the ultimate mandate of court orders on proposed assignments, all of which is required by Section 24.1153, Florida Statutes, of private assignment companies. In short, the Petitioner has established a sufficient substantial interest "injury and fact" which occurs within the zone of interest carved out by the lottery prize payment, revenue investment and trust fund management scheme established by Chapter 24, Florida Statutes. Emergency Rule 53ER99-48 and Agency statements Purported To be Rules. Prior to October of 1998, all large lottery prize winners could receive their prize only in equal annual installments over a period of twenty years. They were not given the choice of an immediate lump-sum, cash settlement. This was because, under the federal tax law prevailing at the time, the ability to make a choice of receiving a lump-sum prize award or payments over time automatically triggered the "constructive receipt doctrine" which thereupon allowed the Internal Revenue Service (IRS) to assume the taxpayer had constructive receipt over the entire prize money and therefore, owed income tax on the entire prize in one year. However, assignments of prize payment streams to private investment companies for a cash lump-sum settlement in return were allowed through the aegis of state circuit court orders without violating the constructive receipt doctrine. Section 24.1153, Florida Statutes (1999), was enacted to provide for such assignments to third-party, private investment companies with court approval. On October 21, 1998, Congress passed an amendment to Section 451(h) of the I.R.C., henceforth called the "transitional rule." This amendment provided that if state lotteries offered, on a limited basis, to "cash-out" past prize winners, the taxpayer would not be subject to the constructive receipt doctrine for IRS tax purposes. This federal tax exception provision is only effective for a limited period of time, however, from July 1, 1999 through December 31, 2000. This change in the federal tax law does not itself authorize the Department to do anything, rather it only changes the tax consequences to individual tax payers who are lottery winners. When change in the tax code allowing state lotteries to cash-out past winners became known, Mr. Shapiro, General Counsel for a NALP member company, met with attorneys for the Florida Department in 1998 to discuss the Florida Lottery's intentions following passage of Section 451(h) (the amendment in question). In November of 1998, the Department began its examination of the federal transition rule in order to determine whether it would adopt a rule regarding cash-outs of past prize winners. There is no federal or state requirement that the Department adopt such a rule. There is no testimony of any need created by changing market conditions to adopt such a rule. The NALP sent information regarding the transition rule including memoranda and legal analysis to all the state lotteries in January of 1999. Many months elapsed during which time the Department was apparently contemplating whether or not to adopt a rule accommodating the above-referenced federal tax law change. On September 13 and September 28, 1999, letters were issued by the Department which offered a cash-out option and announced a methodology available to all previous large lottery prize winners as an alternative to the normal twenty-year, equal annual installment method of payment of prizes. These letters were sent to all eligible winners and predated the issuance of the Emergency Rule adopted by the Department and under consideration in this case. Even though the Emergency Rule was adopted after the mailing of the letters, the Department still takes the position that it relied on the letters as supplemental to the terms of the offers contained in the Emergency Rule itself. Thereafter, and almost one year after it first considered adopting a rule to accommodate the advent of the federal transitional rule, and almost a month after the first cash-out option letter went to previous lottery winners, the Department, on October 8, 1999, published its Emergency Rule 53ER99-48, entitled "Florida Lottery Prize Payment Option Election." That rule provides in pertinent part as follows: From October 1, 1999 through November 30, 1999, the Florida Lottery is providing a one-time opportunity for eligible prize winners to elect to voluntarily cash out their remaining annual installment payments and receive a single lump-sum cash payment. In order to be eligible for this opportunity, the prize winner must have won a Florida Lottery prize before October 22, 1998, which is payable over a period of at least ten years, and the prize winner must not have assigned the prize to another person or entity pursuant to Section 24.1153, Florida Statutes (1999). * * * All prize winners who elect to cash out will be paid in one lump-sum cash payment and the payment shall be calculated as follows: For all prizes, other than WIN FOR LIFE prizes, the lump-sum payment amount will be the accreted value of the Lottery's investment (original cost plus accrued interest) as determined on a date certain (the "trade date"), unless the market value of the investment is less than the accreted value determined on the trade date. In that case, the market value of the investment will be paid. If a prize winner elects to cash out, the Lottery's investment will be liquidated. . . . According to department witnesses, the delays in adopting the subject Emergency Rule were attributable to changes in the executive administration of the state due to the 1998 election of the Governor and concomitant changes in the person of the Secretary of the Lottery as well as changes in the prize payment process for new lottery winners (as opposed to past lottery winners), embodied in Rule 53-28.007, Florida Administrative Code (not here under challenge). The Department conceded that it did not make the promulgation of the Emergency Rule its highest priority and took almost a year, from October 21, 1998 to October 8, 1999, for adoption of the rule even as an Emergency Rule. No market conditions were described in the evidence which would have prevented the adoption of a regular rule proposed in the normal fashion rather than an Emergency Rule. No evidence propounded by the Department explains why regular rulemaking would not have been practicable in this matter and in dealing with the subject matter of the Emergency Rule. No reason stated by the Department at hearing will support a factual finding of any emergency existing which required the promulgation of the prize payment option election as an Emergency Rule rather than in a regularly proposed and enacted rule proposed in accordance with Section 120.53, Florida Statutes. In fact, the Internal Revenue Code transition rule option which gave rise to the purported Emergency Rule is valid through December 31, 2000, almost thirteen months after actual promulgation of the Emergency Rule. Any urgency perceived by the Department at this point was not shown to be anything other than a sense of urgency in the perceived need to adopt the past prize winner cash pay-out "Emergency Rule" caused by the Department's own delay since October 21, 1998, in promulgating a rule on the subject, emergency or otherwise. While this delay might be for legitimate, understandable reasons, the fact remains that the delay was the Departments' own responsibility and does not militate in favor of a finding that there is any emergency necessitating the adoption of an emergency rule because of changes in market conditions or for other reasons. Once a large lottery drawing produces a winner or winners and a monetary prize, the Department transfers the prize funds to the State Board of Administration (SBA) for investment pursuant to Section 24.120(2), Florida Statutes, and in accordance with a Trust Agreement executed between the Department and the SBA. The Department and the SBA hold those past funds in trust pursuant to Section 24.120(2), Florida Statutes, for the benefit of that Lottery prize winner so that the winner will be assured of receiving the prize payments in equal amounts over a twenty-year period. Under the statutorily required payments system, when a prize is awarded, the Department and the SBA calculate the amount of money needed to purchase U.S. Treasury Securities (Treasury Strips) which will generate enough funds to meet the prize payment requirements for each year of the pay-out period. The investment is then done in a manner designed to preserve capital and to ensure the integrity of the lottery disbursement system by eliminating risk of payment of funds when due and to produce annual sums of money over the required term of investments. Once the prize monies are in the Section 24.120(2), Florida Statutes, trust fund, the prize is deemed awarded and paid by the Department. Thereafter, the annual payments to the lottery winner are a matter of privity between that winner and the trust fund. Section 24.120(2), Florida Statutes, was enacted at a time when only annual payments were statutorily authorized. Section 24.120, Florida Statutes, has not been amended since new lottery winners (post October 1998) were given the choice of annual payments or a lump-sum payment pursuant to Rule 53-28.007, Florida Administrative Code. Moreover, money for those lump-sum prize payments pursuant to that rule do not get deposited into the Section 24.120(2), Florida Statutes, trust fund, but are always deposited in the trust fund called the Administrative Trust Fund pursuant to Section 24.120(1), Florida Statutes. They are not deposited in the Section 24.120(2), Florida Statutes, trust because that trust was designed by the Legislature to provide investment instruments securing only equal annual installment prize payments. The Emergency Rule 53ER99-48 does not actually effectuate payment of a prize. Rather, it has the effect of changing Lottery prizes already first awarded and already transferred to the Section 24.120(2), Florida Statutes, trust fund. Winners of large Lottery prizes prior to October 1998, were entitled to equal annual prize payments over a twenty-year period. The Department's Emergency Rule has the effect of changing that prize to allow a single cash payment of the funds produced from the sale of the investment held and designed by the Legislature to fund only the annual prize payments. The Department thereby would instruct the SBA to liquidate the "Treasury Strips" held in trust for the benefit of the Lottery prize winner and designed to secure payment of equal annual installments to the prize winner over twenty-years, in order to fund the lump-sum payment provided for under the Emergency Rule at issue. The Emergency Rule allows the Department to sell the trust investment which supports the twenty-year pay-out of a prize, on a "trade date" before the required term of the investments lapses. The "trade date", while it might presumably be the date of sale of the trust investment which supported installment payments of the prize in question, is not clearly defined in the rule as to what the trade date is or how it is determined. The Department would then pay the prize winner the lesser of the "market value" or the "accreted value." This lump- sum amount is not the same as the total amount of the installments the prize winner would be entitled to over the entire twenty-year period calculated as the winner's entitlement when the prize is initially awarded. The lump-sum also does not represent the liquidated value of the investment held in trust for the winner. If the accreted value is less than the market value on the trade date then the lottery winner would only get the accreted value and the Department would get the balance, presumably the difference between accreted value and market value. Thus, through this Emergency Rule the Department proposes to sell the investments before the required term lapses and potentially pay the winner only a portion of that money, thus retaining additional proceeds for the Lottery. The Emergency Rule does not specify how the Department would determine what the winner's share would be under the lump-sum arrangement, nor how much the Department would keep after payment of the lump-sum amount when the supporting investments in the trust are liquidated for a given prize winner. In this connection the Emergency Rule does not clearly define certain critical terms necessary for a lay person to be able to understand the cash-out offer from the Department. The terms include "accreted value", "original cost" and "accrued interest." Accreted value is described as being the difference in the sum of the original cost of the investment and the accrued interest earned thereon. How one determines "original cost" and "accrued interest" is not specified in the rule, however. While financial experts might easily determine how to define those terms and determine the relevant sums attributable to them, the rule is vague in these particulars in terms of adequately defining how these critical terms relate to the amount a lottery prize winner could expect from a lump-sum pay-out and in providing such a prize winner a clear understanding of how the lump-sum is calculated. Thus the rule has not been shown to be engendered by a true emergency and, in the particulars referenced last above, it is vague. Agency statements Defined As A Rule: On September 13 and 28, 1999, the Department issued letters to previous lottery prize winners setting forth the terms and conditions concerning the formulae and method in which the pricing, timing and other terms and conditions of cash pay-outs would be determined. Those letters pre-dated the promulgation of the subject Emergency Rule. Several of the Petitioner's member companies received the cash-out offer letters similar to those attached to the Petitioner's petition. The letter stated, in pertinent part: If you elect to cash out, however, you will receive a single, smaller lump-sum payment. This amount will be the accreted value of the Lottery's investment (original cost plus accrued interest) as determined on a date certain (the "trade date"), unless the market value of the investment is less than the accreted value determined on the trade date. In that case, you will receive the market value of the investment. . . . The Department's letters thus contain a formula for determining the amount of the cash-out offer. That formula is not disclosed or contained in the Emergency Rule, even though it purports to apply to all previous lottery winners eligible under the rule. Be that as it may, the Respondent has asserted in its Proposed Final Order that the Petitioner's challenge to the letters as agency statements amounting to a rule is now moot with the enactment of the subject Emergency Rule. This appears to amount to a recession by the Department from reliance on the statements and content of those letters in defining and implementing its cash pay-out program for previous Lottery winners. Nevertheless, in the context of resolving all issues raised by the Petitioner, the question of those letters having the quality of an unpromulgated rule will be addressed below. The Department has cited Sections 24.105(10)(j), 24.115(1) and 24.109(1), Florida Statutes, as the source of its rule-making authority. Section 24.105(10)(j), Florida Statutes, provides the Department with authority to adopt rules concerning the manner of payment of prizes to holders of winning tickets and such other matters necessary or desirable for the efficient or economical operation of the lottery or for the convenience of the public. See also Section 24.105(10)(e), Florida Statutes. Section 24.105(10)(j), Florida Statutes, however, does not specifically authorize cash pay-outs to previous lottery winners already determined to be eligible to receive payment as holders of winning tickets and who have already received awards of payments in equal annual installments pursuant to Section 24.120(2), Florida Statutes. Section 24.115(1), Florida Statutes, authorizes the Department to adopt rules "to effect payment of . . . prizes." However, the payment of prizes to the relevant past winners was effected when the Department made its initial one-year payment to the pertinent prize winners and then paid the remaining cash represented by the winning tickets to the SBA in the trust established by the Legislature for the lottery winners, for investment in securities supportive of equal annual installment payments to the winners pursuant to the trust arrangement established in Section 24.120(2), Florida Statutes. Section 24.109(1), Florida Statutes, while it authorizes the Department to adopt emergency rules in general when such emergency rulemaking power " . . . is necessary for the preservation of the rights and welfare of the people in order to provide additional funds to benefit the public . . . " does not specifically authorize any particular emergency rule subject matter, including cash pay-outs to prior Lottery winners already determined eligible to receive prize payments in equal annual installments pursuant to Section 24.120(2), Florida Statutes. The Department, pursuant to Section 24.104(2), Florida Statutes, and Section 24.121(2), Florida Statutes, has a mandate "to maximize revenues consistent with the dignity of the state and the welfare of its citizens" in order to provide, among other things, improvement of the Educational Enhancement Trust Fund each year. The Department has not shown any specific authority to adopt a rule which changes a prize previously awarded, even though it might create new revenues as a result of the difference between lump-sum awarded to a past winner and the accreted value of the investment supportive of the prize, or the market value as the case may be. There is no specific authority to have such funds previously invested to support annual installment payments of prize money being diverted from the trust fund set up by the Legislature by Section 24.120(2), Florida Statutes, instead of, for instance, the "Administrative Trust Fund," constituted under Section 24.120(1), Florida Statutes. These findings in conjunction with the reasons given in the Conclusions of Law below show that the Department exceeded its rulemaking authority in enacting the Emergency Rule and the agency statements at issue. Enlargement Modification or Contravention of the Implemented Law: Section 24.120(2), Florida Statutes (1999), provides for a payment of prizes on a deferred basis and for the safe investment of the prize monies set aside in the trust fund under that section for payment of deferred prize payments. That section also provides for production of equal annual sums of money over the required term of the investment (twenty years). The Emergency Rule and the agency statements at issue depart from the terms of the trust relationship set up by the Legislature through Section 24.120(2), Florida Statutes, by changing the prize awarded to allow the early liquidation of prize monies invested on behalf of the prize winners in the trust fund constituted under that section. Such a change in the prize awarded and manner of award is not authorized by the terms of that statute. The Emergency Rule and agency statements thus enlarge, modify and contravene Section 24.120(2), Florida Statutes, by departing from the terms of the trust created by the Florida Legislature designed to ensure a safe investment of lottery monies so as to produce annual prize payments over twenty years. The Emergency Rule, by allowing a liquidation of trust investments before the statutorily required term and by allowing the trustee of the Section 24.120(2), Florida Statutes, trust (the Department) to intentionally profit from liquidation of the trust investments and concomitant change in the prize awarded departs from the conditions of the Section 24.120(2), Florida Statutes, trust, and the purposes for which it was established. In the enactment of this rule, the Department stands in the position of a trustee varying the terms of a trust in terms of the benefits to be afforded the beneficiary of that trust and the method of calculation and payment. While the beneficiary (the prize winner) in the trust analogy might agree with that course of action, the settlor has not assented to variance from the terms of the trust arrangement. The Florida Legislature is in a position analogous to the settlor of the trust created pursuant to Section 24.120(2), Florida Statutes. Since that law, implemented purportedly by the Emergency Rule and agency statements, does not itself provide authority for the change in the award of prizes and methods of paying prizes embodied in the rule and in the agency statements, it would appear that the settlor, the Legislature, must first assent to the new arrangement (ipso facto by an amendment to the statute). Moreover, it should be pointed out that the new arrangement contemplated by the Emergency Rule would be accomplished without any disclosure to a lottery winner of the discount rate or dollar amount that the state would retain, in the sense that the terms in the rule of "trade date," "market value," "original cost" plus accrued interest or "accreted value" are not adequately defined on the face of the rule. They are thus amenable to varying interpretations, leading potentially to ad hoc policy decisions by the agency or necessitating further illumination by the agency through an additional rule enactment, thus rendering the rule, in the sense of the employment of these terms and any disclosure to the lottery winner, vague. There are various "consumer protection" standards set forth in Section 24.1153, Florida Statutes (1999), which are directed to the third-party assignment arrangement whereby lottery winners may assign their right to the annual installment payments of their prizes to third-party entities and thus obtain from those entities a discounted, lump-sum payment of a prize. Those standards or restrictions include oversight by a circuit court and include the necessity of approval of the assignments and lump-sum payments through third-party entities by an appropriate circuit court order. They also include a provision allowing the prize winner a three-day cancellation period opportunity. The Emergency Rule and agency statements at issue in this case modify, contravene or depart from the provisions of that law because the Department in the so-called emergency cash pay-out provision in the subject rule is not required to adhere to the "consumer protection restrictions" mandated by Section 24.1153, Florida Statutes (1999). Although the end result of what the Department proposes by the Emergency Rule achieves a lump-sum, cash payment to the lottery winner, unlike the arrangement to be set up by the Emergency Rule, the "cash-out" assignment arrangement authorized by Section 24.1152, Florida Statutes, was mandated by the Legislature. The Emergency Rule is potentially arbitrary and capricious (meaning not adequately supported by facts or enacted without adequate support as to reason or rationale) 1/ The impetus for the Emergency Rule, as found above was a change in the Internal Revenue Code concerning the "constructive receipt doctrine". The relevant I.R.C. provision Section 451(h), contains the "qualified prize option" test. The Emergency Rule purports to meet that test but does not. A qualified prize option must contain three things: (1) A clear statement that it is only an offer; (2) A statement of the offer methodology; and (3) A disclosure of the discount rate that makes equivalent the present value of the prize previously awarded and the Department's new offer (lump-sum pay-out). The Emergency Rule does not adequately disclose the methodology of the offer since critical terms enabling a lay prize winner to understand the offer are not clearly defined, as referenced in the Findings of Fact above. The Emergency Rule does not require, on its face, any disclosure of the discount or amount of the prize valued as of an identified date. In its Executive Summary regarding its decision to adopt the Emergency Rule, the Department stated that it would meet the requirements of Section 451(h), by providing full and clear disclosure "as described in the Federal Tax Conference Report on Section 451(h)." The rule has the potential of being arbitrary and capricious in its operation since it does not in fact meet the qualified prize option test in the I.R.C. provision by clearly disclosing the discount rate or the methodology used in arriving at the offer, even though it purports to disclose those matters. Agency statements As Rules: The agency statements, the letters mailed to each prior prize winner contain financial information specific to each individual prize winner but they also contain general formulae to be applied by the Department to all eligible winners in cashing out prizes under the Emergency Rule. Thus the letters expand the cash-out procedure by providing cash-out formulae and other critical conditions beyond those which are stated and disclosed in the rule itself. This is necessary information for the prize winners to make decisions on accepting the Department offers but was not adopted as a rule and is not contained in the Emergency Rule. It is meant by the Department to apply to the entire universe of eligible prior prize winners.
