The Issue There are three legal issues which remain for determination: (1) Whether Florida Petroleum has standing in this case; (2) Whether proposed rule 62-770.220(3)(b), requiring constructive notice to residents or business tenants of real property into which the temporary point of compliance is allowed to extend is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8)(c), Florida Statutes; and (3) Whether proposed rule 62-770.220(4), requiring additional constructive notice of the status of site rehabilitation is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8)(c), Florida Statutes.i
Findings Of Fact On December 23, 2004, the Department published a Notice of Proposed Rulemaking regarding amendments to Florida Administrative Code Chapter 62-770. In particular, proposed rule 62-770.220(3)(b) and (4), provides: Subsequent Notice of Contamination Beyond Source Property Boundaries for Establishment of a Temporary Point of Compliance (TPOC) - Prior to the Department authorizing a temporary extension of the point of compliance beyond the boundary of the source property (i.e., the location from which the contamination originates) in conjunction with Natural Attenuation Monitoring pursuant to Rule 62-770.690, F.A.C., or Active Remediation pursuant to Rule 62-770.700, F.A.C., the PRSP shall provide the following notices: * * * (b) Constructive notice to residents [if different from the real property owner(s) notified pursuant to paragraph 62- 770.220(3)(a), F.A.C.] and business tenants of any real property into which the point of compliance is allowed to extend. Such constructive notice, which shall include the same information as required in the actual notice, shall be provided by complying with the following: * * * Status Update 5-Year Notice - When utilizing a TPOC beyond the boundary of the source property to facilitate natural attenuation monitoring or active remediation, an additional notice concerning the status of the site rehabilitation shall be similarly provided every five years to [the classes of] those persons who received notice pursuant to subsection 62-770.220(3), F.A.C., unless in the intervening time, such persons have been informed that the contamination no longer affects the property into which the point of compliance was allowed to extend. * * * (The language in brackets was added pursuant to the Department's Notice of Change and "those" was deleted.) The proposed rule implements Section 376.3071, Florida Statutes. The specific authority for the proposed rule is Sections 376.303 and 376.3071, Florida Statutes. On February 2, 2005, the Environmental Regulation Commission held a public hearing on the proposed rules and approved the proposed rules with certain amendments. On February 14, 2005, Florida Petroleum filed a Petition for Determination of Invalidity of Proposed Rule (Petition) challenging the validity of proposed amendments to proposed rule 62-770.220(3)(b) and (4). The Petition was filed pursuant to Section 120.56(1) and (2), Florida Statutes, and in each instance, Florida Petroleum alleges that the proposed rule violates Section 120.52(8)(c), Florida Statutes. On March 4, 2005, the Department published a Notice of Change regarding the above-referenced Notice of Proposed Rulemaking. With respect to the pending proceeding, the Notice of Change reflects revisions to language of proposed rule 62- 770.220(4), which are not subject to challenge. See Finding of Fact 1. On May 16, 2005, without objection, official recognition was taken of the Department's Notice of Proposed Rulemaking and Notice of Change. Florida Petroleum is a Florida voluntary, non-profit trade association, which comprise, in part, approximately 194 Marketer Members who own and/or operate petroleum storage system facilities in Florida. Florida Petroleum’s purposes include providing representation on behalf of its members in legislative and regulatory matters before the Florida legislature and agencies. Florida Petroleum routinely represents its members in rule development proceeding and other regulatory matters before the Department of Environmental Protection, Department of Revenue, and Department of Agriculture and Consumer Services. Florida Petroleum’s By-Laws state that its purposes include advancing the business concerns of its members, pooling the energy and resources of its members, and communicating with elected officials at the national, state, and local levels of government. Towards those ends, Florida Petroleum has represented it members before the Florida Legislature in matters relating to the regulation of petroleum facilities under Chapter 376, Florida Statutes, and has appeared before the Department in rulemaking proceedings involving the regulation of petroleum cleanups, and the various state restoration funding assistance programs. The subject matter of the rule at issue is within the general scope of interest and activity of Florida Petroleum, in particular, its marketer members, who own or operate facilities that store petroleum products for consumption, use, or sale. Florida Petroleum submitted oral and written comments, recommendations, objections, and proposed amendments to the Department and the Environmental Regulation Commission in connection with the rules at issue in this case. A substantial number of Florida Petroleum marketer members are "persons responsible" for assessment and remediation of one or more petroleum-contaminated sites. Florida Administrative Code Chapter 62-770, governs the remediation of petroleum-contaminated sites. A substantial number of Florida Petroleum’s marketer members are "persons responsible" for assessment and remediation of sites identified by the Department as "confirmed" or "suspected" sources of contamination beyond the boundary of the facility (i.e., "off-site contamination"). In certain instances, the Department's rules allow for the use of No Further Action with Conditions procedures in cases of petroleum contamination where applicable regulatory requirements are met because the use of conditions, such as institutional and engineering controls, may be more cost- effective than active remediation. As of February 2005, the Department estimated that it had reports of approximately 23,000 petroleum-contaminated sites. In 2004, the Department received an estimated 539 Discharge Report Forms in connection with petroleum storage facilities. As of March 2005, the Department had information indicating that approximately 2,000 "off-site" properties have been affected by contamination. Assessment Reports filed with the Department indicate that a substantial number of these sites may have been affected by discharges of petroleum or petroleum products. Petroleum discharges will in all likelihood continue to occur in the future at petroleum facilities. Petroleum discharges will in all likelihood continue to affect off-site properties in the future.
Findings Of Fact Puckett reported a discharge of used oil at its site when it filed an early detective incentive program notification application with DER. Puckett, thus, advised DER that it would clean up its site and apply for reimbursement of the costs of that cleanup in accordance with Section 376.3071(12), Florida Statutes (Supp. 1986). When it received Puckett's application, DER conducted an investigation of the site and determined that a discharge of used automotive crankcase oil had occurred there. DER was advised by Puckett that the discharge had occurred when used automotive crankcase oil was drained into a service bay floor drain. Puckett and the site operator placed the used oil in the drain in the belief that a storage tank was connected to the floor drain to receive and safely store the used oil. Unknown to Puckett, however, the storage tanks previously connected to that floor drain had been removed by a former site owner or operator. The Recommended Order entered by the Hearing Officer contains findings to the effect that Puckett was unaware that storage tanks did not any longer connect with the floor drain in question, in part, at least, because it is the custom and practice in the service station business that used oil collecting persons or entities collect from such storage tanks after the service station hours of operation. Therefore, it was customary for the operator of a service station not to be aware of when used oil was removed from storage tanks. Upon learning that used oil had been spilled at the site due to the lack of a storage tank, where formerly one had been in place, the subject application was filed. DER conducted its site investigation and after it was concluded, on April 16, 1987, issued an order denying reimbursement eligibility to Puckett. DER took this position because it opined that used oil is not "petroleum" or a "petroleum product", as those terms and substances are defined in Subsections 376.301(9)(10), Florida Statutes (Supp. 1986). Puckett then filed a timely petition for administrative hearing as a result of that denial of eligibility. The cause was duly transmitted to the undersigned Hearing Officer for conduct of a Section 120.57, Florida Statutes, formal proceeding. In the discovery phase of that proceeding, requests for admissions were served by Puckett upon DER, in response to which DER admitted that the sole basis for denial of reimbursement eligibility was the fact that the substance discharged was used oil, which, DER contended was not "petroleum" or a "petroleum product". DER, thus, took the position that the used oil in question was beyond the scope of reimbursement eligibility allowed by the "Super Act," the statutory provisions cited above. The cause was duly scheduled for hearing for September 9-10, 1987. Shortly prior to the hearing, on August 31, 1987, DER filed a motion for continuance seeking an opportunity thereby to have time to explore the question of whether Puckett was "grossly negligent" in the maintenance of its facility, which is a ground for disqualification from Super Act reimbursement eligibility. This was an issue which had not theretofore been raised in the proceeding. See Section 376.3071(9)(b)3., Florida Statutes (Supp. 1986). That motion for continuance was denied, as found and discussed in the Recommended Order in the underlying proceeding. The cause then came on for hearing as scheduled on September 9-10, 1987. A motion in limine filed by Puckett was granted at the hearing so as to preclude DER from raising any issue concerning "gross negligence" at hearing. The basis for the ruling was that DER had known of the circumstances surrounding the discharge for nearly one year, but that during the discovery process, DER assured Puckett that its position was that gross negligence would not be an issue in the proceedings and that the sole basis for its denial of the reimbursement application was that the substance discharged, being used oil, was not, in its view, "petroleum" or a "petroleum product". Following the hearing, the Hearing Officer issued the Recommended Order in question finding that used crankcase oil was, indeed, "petroleum", as well as being a "petroleum product", for the purposes of the definitions in the above- cited statutory provisions. It was thus recommended that Puckett be determined to be eligible to apply to DER for reimbursement of the cleanup costs involved. Puckett, 10 FALR at 5540. Certain findings and conclusions made in the Recommended Order are germane to the question of whether DER's actions with respect to the initial and final denial of Super Act eligibility had a reasonable basis in law and fact at the time the agency action was initiated and finally taken in the Final Order. Those findings include the findings in the Recommended Order that used crankcase oil consists of "petroleum", as that term is defined by Section 376.301(9), Florida Statutes (Supp. 1986), with particular emphasis on those findings and conclusions in the Recommended Order, incorporated by reference herein, concerning crankcase oil coming within the definition of "other hydrocarbons" for the reasons delineated in the Recommended Order. Further, DER's own expert witness admitted, and it was found by the Hearing Officer, that the predominant use of used oil is as a fuel, just as is gasoline, diesel, kerosene and certain other grades of fuel oil, which are specifically included in the statutory definition of "petroleum product". See page 20 of the Recommended Order and the transcript of the proceeding below, pages 362-363. It was also established without question that used oil is a "liquid," a "commodity" and a liquid fuel commodity for the reasons delineated in the Recommended Order. It was established further by the record in the proceeding on the merits, and found in the Recommended Order that used oil has no meaningful similarity to the substances specifically, statutorily excluded from the definition of "petroleum product", and that DER has had a policy encouraging the collection and recycling of used oil as a fuel. This was well-known and accepted by DER's own experts before the "policy makers" at DER, who engendered the subject initial agency action, took the position that used oil did not constitute petroleum or a petroleum product. Used oil has not been otherwise regulated as a hazardous waste. DER's interpretation of the statutory definition of "petroleum product" to the effect that the product, as it was initially produced, must be sold or used as a fuel in order to meet that definition, in fact, imposes an additional inconsistent criteria for determining what types of substances are included within the meaning of the term, which criteria is not enunciated in the statute, either expressly or implicitly. DER's restrictive interpretation of the statute further disregards the language of the Super Act. Sections 376.3071(12)(a) and 376.315, Florida Statutes (Supp. 1986), which requires it to give "such liberal construction to the statute as will accomplish the purposes set forth in this subsection", in other words, to promote the cleanup of as many contamination sites as possible. Further, it was established by the record in the proceeding on the merits and concluded in the Recommended Order that the restrictive interpretation of the statute adopted by DER was inconsistent with existing agency policy which encourages used oil collection and recycling and that the interpretation "is clearly not one expressed or reasonably implied on the face of the statute" and "would frustrate the clear, legislative impetus of the Super Act" and is "illogical". More significantly, DER's policy makers responsible for the initial agency action and decision that used oil is not "petroleum" or a "petroleum product" did not take counsel with certain key expert personnel in DER's own used oil section concerning whether used oil is "petroleum" or a "petroleum product" prior to the initial denial of eligibility and the proceeding and hearing before the Hearing Officer. In fact, the policy makers were apparently unaware of facts critical to the subject determination and to the fact that DER's proposed (and, indeed, final) action was inconsistent with agency policy concerning treatment and definition of used oil, which DER's "in- house" experts had been aware of all along. These findings and conclusions in the Recommended Order demonstrate clearly and in detail why DER's initial agency action and position through the conclusion of the hearing, concerning rejection of Puckett's reimbursement eligibility, did not have a reasonable basis in law and fact. Those findings and conclusions appearing at pages 18-36 of the Recommended Order, which has been stipulated into the record of the instant proceeding, are incorporated by reference and adopted in the findings of fact and conclusions of law in this Final Order. Despite the findings and conclusions in the Recommended Order, DER, in its Final Order, ultimately denied reimbursement eligibility. Puckett at page 5505. DER found in its Final Order that Super Act coverage is limited to "incidents related to storage", as opposed to incidents where a contaminant is discarded. DER also found that because Puckett did not have a "petroleum storage system" at the site, the discharge was not "related to storage", despite the facility operator's proven and found intention and belief, when he dumped the product in the floor drain, that he was "storing" the used oil in question. DER acknowledged the Hearing Officer's granting of Puckett's motion in limine, which precluded denial of reimbursement eligibility on "gross negligence" grounds, but stated that it was not denying eligibility on this ground at page 18 of its Final Order. Although DER acknowledged in its Final Order that its denial of eligibility did not depend on a finding of gross negligence, this acknowledgment, which appears to re- state its position, taken in the discovery phase, that gross negligence would not be raised as an issue by DER, and is an apparent acknowledgment of the ruling on the motion in limine, is somewhat belied by the following language from the Final Order: Although my decision to deny eligibility for reimbursement to Puckett does not depend on a finding of gross negligence on the part of Puckett, any site owner who fails to ascertain whether an oil drain fitting on site is actually connected to an operational used oil system now has clear notice that it allows used oil discharges to that drain fitting only at its own peril. It is not appropriate that state funds be expended to remediate contamination caused by reckless disregard for elementary waste disposal regulations. In the future, the department will continue to deny eligibility to any site where contamination has resulted from used oil discharges to land in the complete absence of a used oil storage system. (emphasis supplied) See pages 18 and 19 of the Final Order. Puckett then appealed that denial of reimbursement eligibility. The District Court of Appeals reversed DER, finding as follows: DER's assertion that Puckett's eligibility for cleanup reimbursement of the used oil discharge was dependent on whether storage was involved and whether the used oil would be reused or recycled was never made until the final agency order was entered. These issues were not raised by the pleadings, were not litigated at the hearing, were not considered by the Hearing Officer, and were not considered by the Hearing Officer's Recommended Order. In addition, the pleadings reflect that DER was asked in a written request for admission to admit the following: 'The Department's only basis for denial of Super Act eligibility for Puckett is that the reported discharge was used oil.' DER admitted that statement. This was the only issue created by the pleadings, and it was the only issue tried and determined by the Hearing Officer. DER cannot raise and decide for the first time in the final agency order issues not previously raised or considered. See Puckett, 549 So.2d at 722 (emphasis in original). The Court then remanded the proceeding to DER for entry of an order determining Puckett to be eligible to apply for reimbursement. Puckett also petitioned the appellate court for appellate attorney's fees pursuant to Section 120.57(1)(b)5., Florida Statutes, arguing that the Final Order was a "gross abuse" of agency discretion, a standard for granting of appellate attorney's fees under that statutory provision. The Court denied that motion on the basis that gross abuse of agency discretion had not been demonstrated. Although reliance on issues improperly raised for the first time in the Final Order may not have been a "gross abuse" of agency discretion supportive of an award of appellate costs and fees pursuant to the above- referenced statutory provision, it is found that DER has not justified as reasonable its rejection of eligibility on additional non-litigated or properly raised grounds in the Final Order. Therefore, DER's reliance on the new issues in the Final Order to deny reimbursement eligibility was not "substantially justified". After issuance of the Court's mandate, Puckett filed a petition for costs and fees pursuant to Section 57.111, Florida Statutes, initiating the instant proceeding. DER filed an untimely response conceding that Puckett was a "prevailing small business party" and the other criteria for award of fees and costs provided for in Section 57.111, Florida Statutes, with the exception that it did not concede that its denial of reimbursement eligibility in the related proceeding was not "substantially justified". DER did not dispute that the reasonable amount of costs and fees incurred by Puckett exceeded $15,000.00 nor did it assert that any special circumstances exist which would make an award of costs and fees unjust nor that it was a nominal party only. Since Puckett's petition was not timely responded to and since its Motion for Summary Final Order thereon was not answered by DER, the Hearing Officer issued a Summary Final Order awarding $15,000.00 in costs and fees to Puckett. DER appealed and the First District Court of Appeals reversed the award and remanded the proceedings to the Hearing Officer to consider DER's position on the issue of award of fees and costs, based generally upon the Court's view that DER's non- timely response to the petition for fees and costs should be excused, as more particularly delineated in the Court's opinion in Department of Environmental Regulation v. Puckett Oil Company, Inc., 16 FLW D.926 (Fla. 1st DCA April 3, 1991). The cause involving fees and costs, thus, became at issue before the Hearing Officer once again. In the prehearing filings, the parties limited the issues to that concerning whether DER's action on the reimbursement eligibility question was "substantially justified". On July 30, 1991, a hearing was held on this matter, during which the parties presented their arguments and stipulated that the record in this proceeding would be the record on appeal, including the Hearing Officer's Recommended Order in the reimbursement eligibility case.
The Issue Whether Petitioner's site, Hughes Supply, Inc. located at 2920 Ford Street, Fort Myers, Lee County, Florida is eligible for restoration under Section 376.3072, Florida Statutes.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Hughes is a Florida Corporation in good standing and authorized to do business in the State of Florida. The Department's facility no. 36-8519331 (the Facility), owned and operated by Hughes and the subject matter of this proceeding, is located at 2920 Ford Street, Ft. Myers, Lee County, Florida, and is a "Facility" as defined in Section 376.301(5), Florida Statutes. The Facility consisted of (a) two underground storage tanks (USTs), one 4000 gallons UST (gasoline tank) and one 8000 gallons UST (diesel tank), and (b) four monitoring well, and is a "petroleum storage system" as defined in Section 376.301(15), Florida Statutes. At all times material to this proceeding, Hughes held, and was the name insured of, an effective third party pollution liability insurance policy (No. FPL 7622685 - Renewal No. FPL 7621566) applicable to the Facility that was issued in accordance with, and qualified under, Section 376.3072, Florida Statutes. Hughes paid annual premiums exceeding $20,000.00 for the above insurance. In accordance with Sections 376.3072, Florida Statutes, and Chapter 17- 769, Florida Administrative Code; the Department issued to Hughes a Notice of Eligibility pertaining to the Facility and the third party pollution liability insurance referred to in Finding of Fact 4 above. Lee County, Florida has a local program approved by the Department pursuant to Section 376.3073, Florida Statutes, to provide for the administration of the Department's responsibilities under certain sections of Chapter 376, Florida Statutes. Diesel fuel was placed into the diesel tank at the Facility on August 12, 1991, and no diesel fuel has been placed in the diesel tank at the Facility since that date. On Thursday, August 29, 1991, a contractor bidding on the removal of the tanks detected free product in one of the monitoring wells at the Facility and told Larry Carman, the Warehouse Manager for Hughes. Mr. Carman told Phillip Ross, the Branch Manager for Hughes, who in turn informed Gene Kendall, the Operations Coordinator for Hughes. All of this occurred on August 29, 1991. On Friday, August 30, 1991, an employee of IT Corporation, acting upon the request of Gene Kendall, sampled the four monitoring wells at the Facility and found six inches of free product in the northwest monitoring well. On Tuesday, September 3, 1991, Fred Kendall discussed the discharge with Bill W. Johnson, Supervisor, Lee County Storage Tank Local Program. During this discussion, Johnson learned that the diesel tank had not been emptied. Johnson advised Kendall that the diesel tank had to be emptied of its product and placed out of service. On Tuesday, September 3, 1991 Mr. Kendall completed the Discharge Reporting Form (DRF) pertaining to the discharge and mailed the DRF to Johnson on September 4, 1991. The DRF indicated August 30, 1992, the day that IT Corporation confirmed the discharge, as the day of discovery of the discharge. The discharge was diesel fuel as indicated by the DRF and a "petroleum product" as defined in Section 376.3-1(14), Florida Statutes. The discharge reported in the DRF constitutes a "discharge" as defined in Section 376.301(4), Florida Statutes, which constitutes an "incident" as defined in Section 376.3072(2)(c), Florida Statutes, and as described in Rule 17-769.600, Florida Administrative Code. On Wednesday, September 4, 1991, Mr. Kendall also mailed a letter to Johnson stating Hughes' intent to seek restoration coverage for the Facility, pursuant to Policy No. FPL 762285, Renewal No. FPL 7621566. On September 13, 1991 when Hooper, Inspector for the Lee County Storage Tank Local Program, inspected the Facility the diesel tank contained a total of 39 5/8 inches of diesel and water, of which 4 3/4 inches was water. On September 16, 1991 when Hooper again inspected the Facility, the diesel tank contained a total of 36 1/2 inches of diesel and water, of which 4 1/2 inches was water. On this date, Hooper advised Hughes that the diesel tank had to be emptied of its product. The inspection report issued on September 16, 1991 by Hooper advised Hughes that the Facility was not in compliance with Chapter 17-761, Florida Administrative Code. On September 17, 1991, Hughes had the diesel tank emptied of all its product. Although Hughes was in the process of emptying the diesel tank by giving diesel away, at no time between August 30, 1991 and September 16, 1991 was the diesel tank completely empty of its product. Between August 30, 1991 and September 16, 1991 Hughes did not test the diesel tank to determine if the diesel tank was leaking and, if so, to pinpoint the source of the leak. There was no evidence that either the Department or Lee County Storage Tank Local Program personnel ever informed Hughes before September 16, 1991 that there was a time frame within which the diesel tank had to be emptied of all of its product, and placed out of service in order for Hughes to be in compliance and eligible for reimbursement for restoration under the FPLIRP. Likewise, Hughes did not request any information from the Department or the Lee County Local Program personnel concerning any time frames within which the diesel tank had to be tested for leaks or emptied of its contents to prevent any further discharge in order to be eligible for reimbursement for restoration under the FPLIRP. Between August 29, 1991 and September 17, 1991 Hughes bailed the monitoring wells at the Facility on a daily basis, removed the free product from the monitoring wells, and placed the free product in a sealed 55-gallon drum. When the discharge was discovered, Hughes made the decision to close the Facility by tank removal, and at this point did not intend to repair or replace the Facility. As a result of an inspection of the Facility by the Lee County Local Program personnel in May, 1991, Hughes was made aware that the Facility was not in compliance with Chapter 17-761, Florida Administrative Code, since the gasoline tank had not been used in over three years, and there had been no closure of the gasoline tank. This noncompliance with Chapter 17-761, Florida Administrative Code, concerning the gasoline tank was also a portion of the noncompliance report filed by Hooper on September 16, 1991. The gasoline tank comes within the definition of "unmaintained" as defined by Rule 17-761.200(2), Florida Administrative Code. Both the diesel tank and the gasoline tank were removed on October 28, 1991 by a Florida licensed storage tank system removal contractor, and the Facility permanently closed by IT Corporation on October 29, 1991. In December, 1991, Hughes filed a tank closure assessment report pertaining to the removal of the diesel and gasoline tanks from, and closure of, the Facility. The tank closure assessment report was prepared by IT Corporation upon a request made by Hughes to IT Corporation on September 3, 1991 for a tank closure assessment proposal which was submitted by IT Corporation to Hughes on September 4, 1991. In April or May, 1992, Hughes filed with Lee County a contamination assessment report prepared by IT Corporation pertaining to the removal of the USTs from and closure of the Facility. Subsequent to discovery of the discharge. Hughes has expended approximately $60,000.00 as of June 10, 1992, on the Facility in connection with the USTs. Site rehabilitation costs for the Facility have been estimated in a range of $220,000.00 to $245,000.00 as of June 10, 1992. In the early part of 1991 water was present in the diesel tank, and approximately six months before discovering the discharge in August, 1991, Hughes had the water pumped out of the diesel tank. Hughes gave no explanation for the presence of water in the diesel tank. Neither the Department nor the Lee County Local Program personnel were notified of this unexplained presence of water in the diesel tank.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is recommended that the Department enter a Final Order denying Hughes application for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program. DONE and RECOMMENDED this 24th day of September, 1992, at Tallahassee, Florida. WILLIAM R. CAVE, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of September, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 91-8334 The following constitutes my specific rulings, pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner The following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the Proposed Finding(s) of Fact:(1); 2-3(2); 4-5(3); 6- 8(4); 9(5); 10(6); 11(8,9); 12(10,11); 14(15,22); 15(10); 16(19); 18(10); 19(13); 20-21(7); 22-23(24); 24(21); 25(17); 26-29(20); 30(15); 31(16); 32(22); 33(23); 35(23); 36(7); 37(23); 38(24); 39(25); 40(26); 41(27); 42-43(27); and 44(15,22). Proposed Findings of Fact 13, 17 and 34 are neither material nor relevant to the conclusion reached in the Recommended Order. Rulings on Proposed Findings of Fact Submitted by the Respondent 1. The following Proposed Findings of Fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the Proposed Finding(s) of Fact:1-2(2); 3(3); 4-6(5); 7(6); 8(22); 9(7); 10(8); 11(9); 12(10); 13-16(11); 17(12); 18(13): 19(18); 20(17); 21-22(14); 23-24(15); 25-26(28); 27(16); and 28(23). COPIES FURNISHED: Scott E. Wilt, Esquire Maguire, Voorhis and Wells 2 South Orange Plaza Orlando, Florida 32801 Brigette A. Ffolkes, Esquire Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Carol Browner, Secretary Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, Esquire General Counsel Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400
The Issue Are test results skewed by the use of sample bottles containing residue from earlier samples?
Findings Of Fact The Department of Agriculture and Consumer Services took unleaded gasoline samples from the Union Service Station No. 166191 located on US Highway 29 North in Century, Florida. The petroleum products provided this station were supplied by Northrop Oil Company, Inc., whose president is James W. Ash. The Department analyzed the samples taken in its mobile laboratory. The unleaded gasoline samples were found to have an elevated End Point, i.e. the maximum boiling point allowed by the rules of the Department for unleaded gasoline, which is 437 degrees Fahrenheit. Sample No. 1 had an End Point of 482 degrees Fahrenheit, and Sample No. 2 had an End Point of 464 degrees Fahrenheit. 4 The elevated End Point means that the samples contained contaminants in excess of the amounts permitted by the Department's rules. A Stop Sale Notice was issued by the Department. A bond of $1,000 was paid by Petitioner in lieu of confiscation of the remaining unleaded gasoline and as a precedent for the formal hearing. Petitioner requested and received a formal hearing. It was agreed that the contaminant did not contain lead and was most probably diesel fuel or kerosene. Mr. Ash testified concerning deliveries to the station in question and other deliveries made by the same truck. On the Monday the samples were taken, the gasoline transport delivered unleaded gasoline to Davis' Grocery, the Union Service Station, and Ross', in that order. The Department also tested the unleaded gasoline at Davis' and Ross' but found no contaminants in their unleaded gasoline tanks. On the preceding Friday, the truck delivered unleaded gasoline to the Union Service Station and two Alabama stations. The Alabama authorities checked the unleaded gasoline at those stations and found no contaminants; however, Mr. Ash did not know how much additional gasoline had been delivered to those stations before their testing. The Union Service Station in question keeps its unleaded gasoline tanks locked, and its diesel fuel tank is located on the opposite side of the station. Petitioner uses separate trucks to deliver diesel fuel and gasoline and does not mix loads. It would have been highly unlikely that the diesel truck driver and the station's operators would have permitted the introduction of diesel fuel into the unleaded gasoline storage tanks. The percentage of contaminant necessary to raise the End Point the amount it was raised in this instance would have been three to five percent of the total volume. The sample bottles used by the Department are approximately the size of a quart milk bottle. The inspector separates the bottles he uses to take diesel fuel samples from those he uses to take gasoline samples. He stores the bottles upside dawn. This was the procedure he followed in taking the samples involved in this case. Tests conducted by the Department to determine the effects of residue in sample bottles indicated that the residue from earlier samples is an insignificant factor in elevating the End Point test results. An inverted sample bottle could not retain the three-to-five percent of the bottle's total volume necessary to raise the test, results of the samples in question approximately 40 degrees Fahrenheit. The contaminant was not introduced into the samples from the bottles used to take the samples. The Department calculated that 570 gallons of contaminated unleaded gasoline were sold at $1.40 per gallon.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law the Hearing Officer recommends release of the contaminated fuel in question and return of the $1,000 bond by the Department of Agriculture and Consumer Services upon payment by Petitioner to the Department of $722.84. DONE and ORDERED this 30th day of July, 1981, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN 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 30th day of July, 1981. COPIES FURNISHED: Mr. James W. Ash, President Northrop Oil Company, Inc. c/o Union Service Station US Highway 29 North Century, Florida 32535 Leslie McLeod, Jr., Esquire Department of Agriculture and Consumer Services Mayo Building, Room 513 Tallahassee, Florida 32301 Doyle Conner, Commissioner Department of Agriculture and consumer Services Mayo Building Tallahassee, Florida 32301
The Issue The issue in this case is whether or not Petitioner is entitled to a refund of the bond it posted in lieu of confiscation of allegedly mislabelled gasoline products.
Findings Of Fact Petitioner, AGI Service Corporation, owns and operates a Citgo service station located at 1599 West Flagler Street in Miami, Florida. The service station sells regular unleaded, unleaded plus and unleaded premium gasoline to the public. On February 18, 1991, James Carpinelli, the Respondent's inspector, visited the station to conduct an inspection and obtain samples of the gasoline Petitioner was offering for sale to the consuming public from its tanks and related gasoline pumps. Mr. Carpinelli took samples of all three types of gasoline offered for sale by Petitioner. The samples were forwarded to the Respondent's laboratory and were tested to determine whether they met Departmental standards for each type of gasoline. The Petitioner's "premium unleaded" pump indicated the octane or Anti Knock Index of the gasoline was 93. The "regular unleaded" pump indicated that the octane level was 87. The laboratory analysis of the samples revealed that the octane level of the gasoline taken from the "premium unleaded" pump was 87.4. The octane level of the gasoline taken from the "regular unleaded" pump was 93.0. Upon discovering the discrepancy in the octane levels, the Respondent seized the gasoline and immediately allowed the Petitioner to post a bond in the amount of $1,000. Upon the posting of the bond, the product was released back to the possession of the Petitioner and was allowed to be sold after the pumps were relabelled. Petitioner acquired ownership of the service station four days prior to the time of the inspection. At the time they opened the station, the new owners labelled the pumps based upon the information provided to them by the prior owners. The new owners had limited experience in the petroleum business and followed the guidance of the prior owners regarding labelling the pumps. It is clear that the pumps were inadvertently mislabelled based upon the information provided by the prior owners. The new owners sold "premium unleaded" at the price of "regular unleaded" and visa versa. Because more "premium unleaded" was sold at the price for regular, Petitioner lost money as a result of the mislabelling. The Department seeks to assess the full amount of the bond against the Petitioner in this proceeding. Respondent calculated the number of gallons of mislabelled gasoline that was sold based upon a delivery date of February 13, 1991. Those calculations indicate that 2,498 gallons were sold at a price of $1.259 per gallon. However, Respondent's calculations appear to begin at a time prior to Petitioner's ownership of the station. No evidence was presented as to how many gallons were sold while Petitioner owned the station. In addition, it is not clear when the mislabeling was done. Thus, no clear evidence was presented as to how many mislabeled gallons were sold by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Department of Agriculture and Consumer Services enter a Final Order granting the request of the Respondent for a refund of the bond posted and that the Department rescind its assessment in this case. DONE and ENTERED this 4th day of October, 1991, at Tallahassee, Florida. J. STEPHEN MENTON 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 4th day of October, 1991. COPIES FURNISHED: LOUIS PASCALI AND DONATO PASCALI QUALIFIED REPRESENTATIVES AGI SERVICE CORPORATION 1599 WEST FLAGLER STREET MIAMI, FL 33147 JAMES R. KELLY, ESQUIRE DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES ROOM 514, MAYO BUILDING TALLAHASSEE, FL 32399-0800 HONORABLE BOB CRAWFORD COMMISSIONER OF AGRICULTURE DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES THE CAPITOL, PL-10 TALLAHASSEE, FL 32399-0810 RICHARD TRITSCHLER, GENERAL COUNSEL DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES 515 MAYO BUILDING TALLAHASSEE, FL 32399-0800 BRENDA HYATT, CHIEF BUREAU OF LICENSING & BOND DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES 508 MAYO BUILDING TALLAHASSEE, FL 32399-0800
Findings Of Fact On July 14, 1982, Jimmy Haywood Nixon, an employee of petitioner, took samples of gasoline offered for sale at respondent's Beacon Store No. 7 in Milton, Florida, including a sample of regular gasoline mixed with alcohol, known as "regularhol." Pat Flanagan, a chemist employed by petitioner, performed various tests on the sample of regularhol, including ASTM method 86, and determined that the 50 percent evaporated distillation temperature of the mix as a whole was 150 F. His testimony to this effect was uncontroverted. When he learned the test results, Mr. Nixon locked the regularhol pump at respondent's store in Milton, only unlocking the pump to release the mixture when a thousand dollar bond was posted on July 16, 1982. Respondent began mixing regular gasoline with ethanol and selling it as regularhol in 1978 at the same price as regular gasoline. Until recently, Mocar made less on regularhol sales than on sales of regular gasoline. It originally offered regularhol as its way of helping to reduce the national consumption of petroleum. The Phillips' terminal in Pensacola was respondent's source of the regular gasoline it mixed to make regularhol. This gasoline reached Pensacola by barge, and petitioner's employees sampled and tested each barge's cargo. The 50 percent evaporated distillation temperature of the regular gas Mocar bought from Phillips varied over a range of more than 30 degrees Fahrenheit upwards from 180 F. Mixing ethanol with the gasoline lowered its distillation temperature, but until the batch sampled on July 14, 1982, Mocar's regularhol had passed the testing petitioner has regularly conducted.
Recommendation Respondent has not been shown to be more blameworthy than any of the fuel owners involved in the cases cited above, each of whom regained part of the bond that had been posted. It is, accordingly, RECOMMENDED: That petitioner retain four hundred dollars ($400.00) and return six hundred dollars ($600.00) to the respondent. DONE and ENTERED this 19th day of December, 1982, in Tallahassee, Florida. ROBERT T. BENTON Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of December, 1982. COPIES FURNISHED: Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Room 513 Mayo Building Tallahassee, Florida 32301 James Milton Wilson, Esquire 201 East Government Street Pensacola, Florida 32598 The Honorable Doyle Conner Commissioner of Agriculture The Capitol, Plaza Level Tallahassee, Florida 32301
Findings Of Fact On June 3, 1982, William Cate, an inspector for Petitioner Department of Agriculture and Consumer Services, obtained a sample of the product identified as 500 Ethohol from a pump at the United 500 station owned by Respondent in Brooksville, Florida. The sample was shipped to Petitioner's laboratory in Tallahassee where it was analyzed under the supervision of John Whitton, Chief Bureau of Petroleum Inspection, using standard methods, and found to be in violation of Petitioner's Rule 5F-2.01(c)2 in that the 50 percent evaporated temperature of the product was 1580F which did not comply with the rule's requirement that such temperature not be less than 1700F. On June 11, 1982, a stop sale notice was issued against Respondent directing it to immediately stop the sale of the product listed below pending further instructions from Petitioner. Inspector Cate sealed the pump in question, and Respondent elected to post a $1,000 cash bond in order that he could return the product for upgrading in lieu of confiscation and sale. The stop sale notice was directed to 2475 gallons of the product which had a value of over $1,000. "Ethohol" is a blend of regular leaded gasoline which contains a percentage of alcohol, and sometimes is known as "gasohol." (Testimony of Cate, Whitton, Petitioner's Composite Exhibit 1) On June 14, 1982, Curtis E. Hardee, an inspector for Petitioner, took samples of 500 Ethohol from a pump located at Respondent's United 500 station at 6815 Sheldon Road, Tampa, Florida. The samples were sealed and shipped to Petitioner's laboratory in Tallahassee where they were analyzed under the supervision of John Whitton, Chief Bureau of Petroleum Inspection, and found to be in violation of Rule 5F-2.01(-1)(c)2, Florida Administrative Code, in that the 50 percent evaporated temperature of the product was l520F, and therefore violated the rule's requirement that such temperature not be less than l700F. A stop sale notice was issued against sale of the product on June 17, 1982, and Respondent elected to post a cash bond in lieu of confiscation or sale of 3,449 gallons of the product. The amount of the bond was $625 which represented 481 gallons of the product that had been sold since the last time a load of gas had been delivered to the station. Under the provisions of the release notice, Respondent agreed to pump the remaining product out of its storage tank and return it to their bulk plant for upgrading. (Testimony of Hardee, Whitton, Petitioner's Composite Exhibit 2) Although Respondent's representative did not dispute the foregoing facts, he maintained that forfeiture of the entire amount of the cash bonds would be excessive. (Testimony of McRae)
Recommendation It is recommended that a Final Order be issued assessing Respondent the sum of $625 to be effected by forfeiture of the bond posted in the same amount pursuant to stop sale notice issued on June 17, 1982 at Tampa, Florida, and that the $1,000 bond posted by Respondent to gain release of the gasoline product which was the subject of the stop sale notice of June 11, 1902 at Brooksville, Florida also be forfeited. DONE and ENTERED this 24th day of September, 1982, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings The Oakland Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of September, 1982. COPIES FURNISHED: Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 T.D. McRae, President United Petroleum, Inc. 680 South May Avenue Brooksville, Florida 33512 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
