The Issue The issue is whether Respondent engaged in an unlawful employment practice by discriminating against Petitioner and retaliating against him because he complained of racial discrimination.
Findings Of Fact Rogers' claim of racial discrimination in treatment is not supported by the evidence. His claim of a disparity in pay is supported by the fact that the three other shift managers who are not African-Americans earned more than he. In response, however, Calder showed legitimate differences in the qualifications and responsibilities of the shift managers, and that higher compensation for the other three was justified. Circumstantial evidence from which one could draw an inference of retaliatory intent consists of Lang's email and Kaminski's statement that his job was in jeopardy and the email did not help. But Lang's email also addressed legitimate business concerns. In the end, it was his unwillingness to act as a supervisor that caused Rogers to be demoted. (He was fired for insubordination on December 17, 2009, by Otero, the same person who had hired and promoted him.)
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the charge of discrimination filed by Petitioner in this case. DONE AND ENTERED this 23rd day of December, 2010, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of December, 2010.
Findings Of Fact In April, 1975 Mrs. Wright, an inspector assigned to the District Office in Panama City inquired of her supervisor regarding outside employment and was told she had to obtain permission from Tallahassee. She subsequently telephone Jack Pelham in Tallahassee who advised her the department would have no objection if it did not interfere with her state duties, but she would have to send a request in writing stating the details of her outside employment. On April 25, 1975 she submitted a letter (Exhibit 4) stating she had accepted outside employment on weekends at an amusement park starting at 6:00 P.M. on Friday afternoon, and requested she be advised if the employment constituted a conflict of interest. No response was received indicating objection on behalf of the Department. Some time in early June Petitioner commenced working on week days in addition to weekends. No request for authority to so work was submitted by Petitioner. Department regulations and policy require prior approval for outside employment. During the period from June 6, 1975 through June 27, 1975 time sheets certified by Mrs. Wright showed she worked from 8:00 to 12:00 and 1:00 to 5:00 Mondays through Friday. Time sheets on June 30 and July 1st showed work hours from 8:00 to 12:00 and 12:30 to 4:30. On July 2 and 3 time sheets showed work from 8:00 to 12:30 and annual leave for 3 hours on July 2 and 8 hours on July 3rd. From July 7 through 10 time sheets showed hours worked from 7:15 to 12:15 and 12:45 to 3:45. From July 14 through 17 time sheets showed hours worked from 7:30 to 12:00 and 12:30 to 4:00. Time sheets from Miracle Strip Amusement Park showed that on June 6, 9, 12, 18, 20, 23, 25, 26 and 30 Mrs. Wright commenced work at 4:30 and on July 7, 8, 9, 10, 11, 16, and 17 she commenced work at 2:45 P.M. Copies of Department policy manual and personnel rules and regulations are available in the District Office out of which Mrs. Wright worked, but she was not furnished a copy of the policy manual until October, 1975 after the incidents herein involved. Testifying in her own behalf Petitioner contends that she signs most of the time sheets in blank and the secretary filled in the hours for her the same as she did for the other inspectors. She further contends that she was unaware that she needed approval for changing the hours of outside employment from the weekend to include weekdays; that she had worked overtime on many occasions for which she had not made a claim; that her supervisor told her he had no objection to her working outside so long as she put in 8 hours for the state; and that she could work early hours if she desired. Except for about 4 days in July she contended that each day she worked the full 8 hours required by the Department. With respect to those 4 days in July for which attendance sheets show less than 8 hours per day worked, she contends she asked if she could take leave and was told it wasn't necessary. Her supervisor has no recollection of such a request and no leave slips were presented to him for approval.
The Issue The factual issues in this unadopted-rule challenge relate to whether Respondent, in connection with the administration of the state’s gaming laws, has formulated statements of general applicability that have the effect of giving each slot machine licensee the rights (i) to maintain and operate an outdoor live gaming facility for the conduct of pari-mutuel wagering activities, wherein slot machine gaming areas could not lawfully be located, so long as its slot machines are housed elsewhere, in an enclosed building; and (ii) to locate slot machine gaming areas in a separate, stand-alone building having no integral systems, structures, or elements, provided the building is located on the same parcel, and on the same side of the street, river, or similar obstacle, as the live gaming facility. If Respondent has developed such a statement or statements, then the ultimate issue is whether such statements meet the statutory definition of an unadopted rule.
Findings Of Fact PARTIES SCF is a Florida corporation whose principal place of business is located in Marion County. SCF has been in the business of breeding thoroughbred racehorses since 1996. The company also owns racehorses and, as an owner of racing animals, holds a Pari-Mutuel Wagering Business Occupational License, #PBU476648, from the Division. See § 550.105(2), Fla. Stat. As a licensed business owning racing animals, SCF is under the regulatory jurisdiction of the Division. In the three years preceding this action, SCF’s horses won approximately $120 thousand in purses from performing in race meets held at Florida pari-mutuel facilities.1 1 Although SCF is a licensed owner of racing animals, it is not a member of the Florida Horsemen’s Benevolent and Protective Association, Inc. (the “FHBPA”), a nonprofit corporation that advocates in support of Florida’s thoroughbred racing industry and represents the interests of the licensed owners and trainers who comprise its membership. This fact is relevant only to the question of whether SCF is precluded from maintaining this action, under the doctrine of administrative finality, by the Final Order entered in a case brought by the FHBPA in 2018 to challenge agency statements, similar to those at issue here, which the association alleged—but ultimately failed to establish—were unadopted Continued on next page... The Division is the state agency responsible for implementing and enforcing Florida’s gaming laws. It licenses and regulates pari-mutuel and slot machine gaming activities in Florida, as well as the professionals and businesses, such as SCF, that supply necessary goods and services to the gaming economy. The only places in Florida, in fact, where SCF’s thoroughbreds can legally perform in races upon which bets may be made are the several permitted pari-mutuel facilities, which are also subject to the Division’s regulatory jurisdiction; such tracks comprise the exclusive medium for live gaming activities. Calder is the holder of a pari-mutuel wagering permit and, in that capacity, owns a track called Calder Race Course, also known as Gulfstream Park West. As a permitholder, Calder must apply for an annual license to conduct pari-mutuel operations. See § 550.0115, Fla. Stat. This annual license gives the permitholder authority to conduct the pari-mutuel wagering activity authorized under its permit on the dates identified in the license. At all times relevant to this case, Calder has held a license to conduct thoroughbred horseracing performances, and SCF-owned horses have raced at Calder Race Course. In addition to its license to conduct pari-mutuel operations, Calder has held, at all times relevant hereto, a license to conduct slot machine gaming. SLOT MACHINE GAMING In 2004, voters approved an amendment to the Florida Constitution, which opened the door to the installation of slot machines at licensed pari- mutuel facilities in Miami-Dade and Broward counties. See Art. X, § 23, Fla. Const. During its next regular session, the legislature enacted chapter 551 to implement the constitutional amendment. Under the original definition of rules. For reasons discussed much later in this Final Order, the undersigned concludes that the previous Final Order, while favorable to the Division on similar issues, is not a bar to SCF’s claims in this proceeding, because SCF was neither a party to the FHBPA case, nor in privity with the FHBPA. “eligible facility” set forth in section 551.102(4), seven pari-mutuel permitholders potentially qualified for slot machine licensure; a later statutory amendment increased that number to eight. A slot machine license may be issued only to a permitted pari-mutuel facility. That is, to become and remain a slot machine licensee, an eligible facility must operate a pari-mutuel facility in accordance with the provisions of chapter 550, Florida Statutes. So, as a condition of initial slot-machine licensure, a permitholder must demonstrate its compliance with chapters 551 and, as applicable, chapter 550. § 551.104(4), Fla. Stat. To renew, which must be done annually, a slot machine licensee must “[c]ontinue to be in compliance with” chapter 551; “[c]ontinue to be in compliance with chapter 550, where applicable[;] and maintain [its] pari-mutuel permit and license in good standing pursuant to the provisions of chapter 550.” Id. In short, slot machine gaming is secondary to pari-mutuel wagering operations because it cannot exist, lawfully, in the absence of such operations. This means, among other things, that an applicant for a slot machine license is required to have a “current live gaming facility,” in which pari- mutuel wagering occurs in the physical presence of real-time races or games, and that a live gaming facility (“LGF”) must be maintained at the permitholder’s pari-mutuel facility during the life of the slot machine license, if issued. See § 551.114(4), Fla. Stat. In 2005, when chapter 551 was enacted, all seven of the facilities initially eligible for slot machine licensure had large existing grandstands or other buildings that created indoor, conditioned spaces; these “conditioned environments,” in other words, were separated from the outdoor elements and conditions (wind, rain, heat, cold, etc.) by sheltering walls and roofs. Simply put, each of these facilities had a building envelope or exterior shell and, thus, each such facility fell within the definition of a “building” under the common usage of that term. It is reasonable to infer, if not presume, that when section 551.114(4) was being written, the legislature, or at least the drafters of the legislation who coined the term “live gaming facility,” had in mind the buildings then currently in use as “live gaming facilities” at the relatively few eligible facilities that would be subject to the law. At the time chapter 551 took effect, moreover, the Division, in fact, considered these buildings to be the permitholders’ LGFs. A slot machine licensee must have a designated slot machine gaming area (“SMGA”) where “slot machine gaming may be conducted in accordance with the provisions of” chapter 551. §§ 551.102(2), 551.114, Fla. Stat. Section 551.114(4) specifies where the licensee is allowed to locate its SMGA: Designated slot machine gaming areas may be located within the current live gaming facility or in an existing building that must be contiguous and connected to the live gaming facility. If a designated slot machine gaming area is to be located in a building that is to be constructed, that new building must be contiguous and connected to the live gaming facility. For ease of reference, the term “slot machine building,” or “SMB,” will be used herein to refer to any building besides the LGF in which a licensee optionally locates its SMGA. As the statute makes clear, every SMB, whether previously existing, newly constructed, upgraded, refurbished, retrofitted, or freshly painted, must be “contiguous and connected to” the LGF. This will be called the “CCT Requirement.” THE DIVISION’S INTERPRETATION OF THE STATUTE Over time as it implemented section 551.114(4), the Division interpreted the text in ways which SCF alleges constitute unadopted rules. The circumstances surrounding the development of these interpretations are interesting, and a good deal of evidence was adduced in this proceeding establishing them, but it is not necessary, for present purposes, to make detailed findings concerning these historical facts. Readers who would like to know more about the events leading to this rule challenge may read the Recommended Order (“Calder RO”) that the undersigned issued in The Florida Horsemen’s Benevolent & Protective Association, Inc. v. Calder Race Course, Inc., et al., DOAH Case No. 18-4997, 2019 Fla. Div. Admin. Hear. LEXIS 283 (Fla. DOAH May 24, 2019) (the “License Challenge”). If the undersigned were to make extensive findings of historical fact in this Final Order, such findings would be substantially the same as, if not identical to, the findings set forth in the Calder RO. The primary relevance, to the instant case, of the historical facts relating to the Division’s approvals of SMBs at Calder and another track (Pompano Park/Isle of Capri), respectively, would be to show that, despite the absence of rulemaking or other written evidence of its statutory interpretations, the agency has formulated (but not formally adopted) governing principles for making regulatory decisions—”nonrule policies,” in other words—whose existence and contents can be deduced from the agency’s actions, namely the issuance of slot machine licenses or renewals manifesting underlying determinations that this SMB or that one is compliant, as a matter of ultimate fact, with the provisions of chapter 551, including the CCT Requirement. Recently, however, on February 3, 2020, the Division issued the Calder FO, wherein the agency expressed very clearly not only its understanding of what the relevant words of section 551.114(4) mean (the semantic content), but also what law is made thereby (the legal content). It is, therefore, no longer necessary to deduce the Division’s statutory interpretations from its actions; that these statements exist, and have specific linguistic content, are matters now beyond genuine dispute, the statements having been communicated in writing by the agency itself.2 2 This is what the undersigned meant when he wrote in the Order Regarding Official Recognition that, based on the Calder FO, the Division’s interpretive statements relating to section 551.114(4) “appear to be not genuinely disputable.” In other words, to be clear, the existence and contents of the Division’s interpretive statements are now beyond reasonable Continued on next page... From the Calder FO, the Division’s interpretive statements can be fairly, accurately, and concisely described.3 The first statement of interest dispute, although there might be some relatively insignificant disagreements at the margins regarding the meaning of the agency statements. Independent of all that, the question of whether the Division’s interpretation of section 551.114(4) is the best interpretation, or even a reasonable one, is sharply disputed. While the correctness of the Division’s interpretive statements is a matter of continued conflict, that particular dispute need not be decided in this proceeding, whose focus, instead, is on whether the statements meet the definition of a rule, a question that has little to do with whether the statements reflect the best, or correct, reading of the statutory text. (A statement that expresses nothing but a literal comprehension of the statutory text, reflecting only such meaning as is readily apparent without reading between or beyond the lines of the codified language, is not a rule by definition; nor, however, is it an “interpretation,” strictly speaking. Such a literal paraphrase could be called “correct,” though, and so, to the extent a decision is required regarding whether a statement adds legal content to the underlying statute’s straightforward semantic content, some consideration must be given to the correctness, in this narrow sense, of the statement at issue.) 3 So that no one can misinterpret what the undersigned is doing here, let it be clear. First, the undersigned is not implying that the Calder FO is itself an unadopted rule. The Calder FO is, of course, an order, which determines the substantial interests of specifically named parties, subject to judicial review. The undersigned is saying, however, because it is indisputably true, that the Calder FO contains statements that communicate—expressly, unambiguously, and in specific language (not by implication or through interpretation)— the Division’s interpretation of section 551.114(4). In fact, the Calder FO includes a section titled “Interpretation of Section 551.114(4), F.S.” Thus, while the Calder FO is not, per se, an unadopted rule, it is evidence of the Division’s interpretation of a section 551.114(4); indeed, it is convincing evidence thereof. (The agency’s interpretive statements are not hearsay because what makes them relevant is their existence and contents, not the “truth” of the matters asserted. See § 90.801(1)(c), Fla Stat.) Further, the Division’s interpretation of the statute is, obviously, highly relevant because agency statements that interpret law fall within the definition of a rule when, as SCF alleges here, they do so in ways which give the law meaning not readily apparent from the raw semantic content of the statutory text being implemented. It should also be noted that it makes no difference where or how an agency communicates a statement of general applicability that meets the definition of a rule. There is no “final order immunity” that somehow shields statements contained in a final order from examination in a section 120.56(4) proceeding. We are concerned here with three basic questions: (i) does the statement exist; (ii) if so, what is the content of the statement; and (iii) does the statement’s content meet the definition of a rule? The Calder FO persuasively proves both the existence of the statements at issue and the contents of the statements issue. Second, in describing the Division’s interpretive statements, the undersigned is not attempting to summarize the entire Calder FO. Nor is he purposefully adding to, or subtracting from, the agency’s statements. This is not an exercise in straw-man argumentation. To the extent possible, the undersigned is using the agency’s exact words; his intent, again, is to express the Division’s statutory interpretation accurately and fairly. The Calder FO is available for anyone to read, and the undersigned invites everyone who is interested to do just that and decide for him or herself whether the descriptions herein of the Continued on next page... concerns the CCT Requirement. As the undersigned reads the Calder FO, the Division has interpreted the statute to mean that a licensee’s SMB is “contiguous and connected to” its LGF if the SMB and LGF: (i) “share a common boundary,” for which simply “being located on the same piece of property” is sufficient; (ii) are no more than a “short distance” from one another; (iii) are not on opposite sides of “a public roadway, waterway, or any [similar] barrier”; and (iv) are “connected” by a walkway between the two, for which an outdoor sidewalk is sufficient. In its Response in Opposition to the Order Regarding Official Recognition, however, the Division stated that and (iv) “may not be required” in every instance and, thus, are not necessary conditions. In other words, the SMB and LGF might be farther than a “short distance” from each other and still be “contiguous”; and the two structures, if respectively self-contained, might be “connected” other than by a “walkway” between them. Making this correction, the agency statement becomes: A licensee’s SMB is “contiguous and connected to” the LGF if the SMB and LGF: (i) “share a common boundary,” for which “being located on Division’s interpretive statements are accurate and fair. (The Division expressed some minor disagreements with the undersigned’s original descriptions of the agency interpretations at issue, and these disagreements will be addressed in the text above.) Third, relatedly, the undersigned emphatically disclaims any intention of using unfair descriptions of the Calder FO to turn “narrow issues” into “more general” statements having a “broader scope of applicability” than the agency intends. The fact is, however, that there is nothing “fact-specific” about the Division’s interpretation of section 551.114(4), and the Division’s insisting otherwise will not make it so. This point will be discussed further above, but let it be emphasized in this footnote that a statement’s relative applicability is determined based upon the level of generality expressed by the statement’s language, that is, by the inclusiveness or exclusiveness of the semantic content of the text. The more inclusive the statement, the more generally applicable it is. A statement of general applicability, so framed, is not rendered “fact-specific” simply because it has been applied to the facts of a specific case in determining the substantial interests of a particular party. the same piece of property” is sufficient;4 and (ii) are not on opposite sides of “a public roadway, waterway, or any [similar] barrier.”5 What cannot be disputed, bottom line, is that the Division, in its own words, interprets “the plain statutory language” of section 551.114(4) as “contemplat[ing]” that the SMB may be “a stand-alone separate building” from the LGF. See Calder FO at 42. From this interpretation, it follows logically that having structural elements in common with the LGF, or sharing integrated systems therewith (e.g., exterior envelope, HVAC, electric, and plumbing), is not a necessary condition of an SMB’s satisfying the CCT Requirement; that is, even without such integration, the SMB and LGF may be deemed statutorily “contiguous and connected to” each other, according to the Division. The undersigned will call this the “nonintegration principle.” The nonintegration principle is the Division’s seminal insight regarding the meaning of section 551.114(4); if the nonintegration principle were deemed false (incorrect), such determination would guarantee the falsity (incorrectness) of the Division’s statement that “the plain statutory language” of section 551.114(4) “contemplate[s]” that the SMB may be “a stand-alone separate building” from the LGF. This is because, to state the obvious, “a stand-alone separate building” is, by that description, a self- 4 Because it is necessary that all of the permitholder’s pari-mutuel facilities be located on the property “specified in the permit,” see section 550.0115, Florida Statutes, and because slot machines must be located “within the property of the [permitholder’s] facilities,” see sections 551.101 and 551.114(1), part (i) of the agency statement makes “shar[ing] a common boundary” practically a given, and certainly a gimme. 5 It is usually unhelpful to define anything by describing what the thing being defined is not, which entails a process of elimination. Saying that being “contiguous and connected” means being not separated by a public roadway, etc., tells us nothing that we didn’t already know; it is the answer to a question that no one would ask, akin to saying that the CCT Requirement prohibits a permitholder from locating its SMB in a different city or state from the LGF. Like part (i) of the agency statement, part (ii) imposes a “requirement” that is a gimme, if not a given. Taken together, the two parts, (i) and (ii), comprising the agency statement under consideration, come very close to eliminating the CCT Requirement altogether, reducing it to the ineffectual status of “requirement in name only.” As the Division sees it, the CCT Requirement has little practical effect, if any, other than ensuring that the SMB and LGF have the same address, which is already assured. contained structure that is not integrated with another structure. So, the Division’s statement that the statute allows the use of a nonintegrated SMB is true only if SMB/LGF integration is not a necessary condition of compliance with the CCT Requirement. In its Response in Opposition to the Order Regarding Official Recognition, the Division states that the Calder FO “does not comment on whether it is ever necessary, to satisfy the [CCT] requirement, that the SMB and LGF ‘have any common structural elements or integrated systems, e.g., exterior envelope, HVAC, lighting, etc.’“ This is trivially true inasmuch as the Calder FO does not specifically describe the nonintegration principle as such. But the point is irrelevant because, as just explained, if section 551.114(4) permits locating an SMGA in a separate, stand-alone building, as the Division maintains, then the nonintegration principle must exist, and it must be true, regardless of whether the Division actually utters the words that communicate the concept. If the Division meant to say more, i.e., to imply that there might be an as-yet unrevealed exception or exceptions to the nonintegration principle, this possibility, whatever else might be said about it,6 does not negate the nonintegration principle itself. This is because the principle does not hold that nonintegration is a necessary condition of compliance with the CCT Requirement; that is, integration does not guarantee failure. Nor does it hold 6 One thing that can be said if there exists an exception to the nonintegration principle is that an SMB’s “being located on the same piece of property” as the LGF would not be a sufficient condition for finding that the two “share a common boundary,” contrary to what the Division has said elsewhere. If there were an exception, then sometimes (when the exception applies) integration would be required in order for the two structures to share a common boundary and be deemed contiguous to one another. To explain, locating a self- contained SMB on the same piece of property as the LGF guarantees compliance with the “common boundary” requirement—i.e., is a sufficient condition therefor—only if the nonintegration principle has no exceptions. (The undersigned takes for granted that integration would never be required to meet the only other identified requirement, namely that the SMB and LGF not be separated by a public roadway, waterway, or similar barrier, because that condition would be so easily met by putting the two structures on the same side of the street or river.) that nonintegration is a sufficient condition of compliance with the CCT Requirement; that is, nonintegration does not guarantee success. Rather, the nonintegration principle holds that integration is not a necessary condition of compliance with the CCT Requirement; or, put another way, that nonintegration is statutorily permissible. Why is this significant? Because if section 551.114(4) literally requires an integrated SMB/LGF in all cases where the SMGA is located outside the current LGF, then the Division’s interpretation of the CCT Requirement is not readily apparent from what is actually stated in the statutory text, even if it might conform to the legislature’s communicative intent,7 which would mean that the agency has declared what the law shall be (a legislative power), as opposed to applying the law as it is (an executive power). And, as we know, an agency is authorized to exercise delegated legislative authority only through formal rulemaking. The second statement concerns the meaning of the term LGF, which the Division defines as being any area, including an “open-aired, unenclosed place” or “space,” from which patrons can “view … and/or [be] within the physical presence of” contests occurring in real time, and at which they may engage in pari-mutuel betting on such contests using equipment designed to facilitate these “live gaming activities.” In its Response in Opposition to the Order Regarding Official Recognition, the Division asserts that the foregoing description of its definition of the term LGF is too narrow, because the Division defines LGF to include the racetrack as well. The undersigned accepts this assertion to be true, and revises his original description accordingly. 7 The legislature might have intended, for example, to communicate meaning beyond the plain semantic content of the statutory text, whose full linguistic content thus could not be understood without an appreciation of pragmatic considerations, such as programmatic goals, arguably better known to the agency than to the citizenry. If so, the necessary and proper, lawful agency response would be to take quasi legislative action and adopt a rule. The track, of course, is the “field of play” for live horse racing performances, analogous to the three-walled court (or cancha) on which jai alai players perform. Clearly, there can be no LGF without a track or cancha; this practically goes without saying. Including the live performance site, definitionally, as an element of the LGF, however, is inconsequential to this case because neither a track nor a cancha, by itself, could constitute an LGF; there must be something to accommodate patrons, who obviously cannot watch, or place wagers on, live contests while sitting or standing upon the track or jai alai court. The relevant question in this case is whether the statute literally requires that something to entail conditioned space within an enclosed building shell.8 Reduced to its undisputed essentials, the Division’s position is that while an LGF may be an enclosed building, it needn’t necessarily be. An open- air, unenclosed place or space will suffice, if properly equipped to facilitate wagering. It is this “open-air option” to which SCF objects as the instantiation of a policy that exceeds the raw semantic meaning of the term LGF and thus constitutes an unadopted rule. SCF alleges that the Division has formulated a third unadopted rule, extrinsic to the Calder FO, which is not interpretive in nature but rather is a prescriptive statement to the effect that certain ultimate facts are conclusively determinable as a matter of law if the basic facts are undisputed. To the point, SCF contends that the Division has decided that, if a hearing is requested to determine whether an SMB satisfies the CCT Requirement, the proceeding will be governed by section 120.57(2) unless the objective facts on 8 At times, the Division appears to imply that the LGF comprises entire pari-mutuel complex, so desirous is the agency to get across the idea that the term LGF must be read expansively. While warning of the dangers of defining LGF too narrowly, the Division seems unconcerned about the opposite problem, namely reading LGF so broadly that the term ceases to have relevant meaning. If the LGF is everything on the permitted premises, then it is nothing specifically identifiable. For the LGF to have discernible boundaries—a necessary condition of contiguity with another structure, by the way—there must be a limiting principle or Continued on next page... the ground are genuinely disputed. SCF contends that the Division is using this “gatekeeper mechanism” to deny SCF (and another party) the formal hearings they have requested, pursuant to sections 120.569 and 120.57(1), to challenge the renewal of Calder’s slot machine license, based on allegations that Calder does not have a statutorily compliant LGF and that its SMB fails to meet the CCT Requirement. The Division has not published a notice of rulemaking under section 120.54(3)(a) relating either to the open-air option, the nonintegration principle, or the gatekeeper mechanism. Nor has the Division presented evidence or argument on the feasibility or practicability of adopting any of these alleged statements of general applicability as a de jure rule. THE DIVISION’S IMPLEMENTATION OF THE ALLEGED UNADOPTED RULES As mentioned above, the historical facts giving rise to the agency interpretations at issue are not only, for the most part, undisputed, but also, more importantly, largely irrelevant for purposes of determining the merits of this action under section 120.56(4). The Division’s implementation of the alleged unadopted rules does have some bearing, however, on the question of SCF’s standing, which is a hotly contested issue in this case. Therefore, an abridged history follows. Of the eight pari-mutuel facilities eligible for slot machine licensure, only Pompano Park/Isle of Capri (“PPI”) and Calder have chosen the option contained in section 551.114(4) to erect a new building in which to locate their respective SMGAs. All of the other eligible permitholders opted to locate their SMGAs within their current LGFs; these were buildings, enclosing conditioned environments, not open-air places exposed to the elements. Because Broward County satisfied the local referendum requirement before Miami-Dade County did, PPI’s application for slot machine licensure was the principles to delimit the definitional scope. The Division has been reluctant to commit to such limiting principles. first to require the Division’s decision as to whether an SMB that was to be constructed would meet the CCT Requirement. The physical configuration of PPI’s SMB, as planned and built, was not “contiguous” to its existing LGF under any ordinary understanding of the word “contiguous,” which denotes actual contact along a common boundary; the buildings were in “reasonably” close proximity, but they did not communicate in the sense of opening into each other. Nor was PPI’s SMB “connected to” its LGF in accord with the image that readily comes to mind when thinking about how two contiguous structures would be connected to each other. The two separate, stand-alone buildings were “connected,” not physically, through any sort of direct contact, but figuratively, by basic transport infrastructure—i.e., a covered walkway between them.9 This apparent departure from the plain meaning of section 551.114(4) resulted from the Division’s desire to give the eligible permitholders some “leeway” in satisfying the strict statutory requirement that an SMB be “contiguous and connected to” the current LGF, according to David Roberts, who headed the Division from 2001 through 2009, and who was involved in making the decision.10 After Miami-Dade County satisfied the local referendum requirement in 2009, Calder applied for its initial slot machine license. Because Calder, 9 They were connected, that is to say, in the same way Tallahassee is connected to Jacksonville via Interstate 10. 10 On October 17, 2019, the agency head of DOAH began systematically reviewing every final order and recommended order prior to, and as a prerequisite of, its issuance. Pursuant to this review, the director makes written “comments and suggested edits” on some, but not all, orders. Although the presiding officer is not required to accept the director’s suggested edits, he is not given the option of declining the director’s review. As a result, the undersigned received two comments, one on the paragraph above and the other on paragraph 30 of this Final Order, which are, at least arguably, “relative to the merits,” and hence which are, or might be, ex parte communications prohibited by section 120.66(1)(a), Fla. Stat. (no “ex parte communication relative to the merits” shall be made to the presiding officer by “[a]n agency head,” among others). Erring on the side of caution and disclosure, the undersigned hereby places on the record the director’s comment concerning paragraph 24: “This is the crux of Continued on next page... like PPI, intended to place its SMGA in a self-contained casino, which would be newly constructed, Calder sought and received the Division’s permission to build a separate, stand-alone SMB pursuant to the same informal policy that had relaxed the strict CCT Requirement for PPI. The Division’s issuance to Calder of its initial slot machine license manifested the Division’s determination that Calder’s SMB and LGF, as initially configured after construction of the new SMB, were compliant with all of the statutory requirements for slot machine gaming licensure, including the CCT Requirement. In 2016, Calder demolished its grandstand building; as of this hearing, Calder has not replaced its former LGF with a new building of any kind. The demolition of the grandstand was one of several actions taken in furtherance of a business decision by Calder to distance itself from live racing activities at Calder Race Course. Other actions included slashing the number of annual performances during the race meet, from an average of 250 performances per year to 40 performances per year; the entry into a contract with Gulfstream Park to operate and manage Calder’s abbreviated race meet; and a reduction in the number of stalls available for the stabling and training of racehorses. There is an ongoing dispute as to whether Calder, without an enclosed building for live gaming, has a legally sufficient LGF. See License Challenge. What is not disputed is that Calder lacks an LGF capable of housing an SMGA in compliance with chapter 551, because an SMGA must be housed in a building. Calder’s “LGF,” such as it is, currently consists of open-air viewing areas where patrons can watch, and place wagers on, live races. The primary viewing area is located in front of the final stretch of the racetrack, at a spot called the “apron.” There are some outdoor seats and tiki huts on the apron, and, during the race meet, Calder erects a collapsible canopy tent, your most defensible finding.” Any party desiring to rebut this communication shall be allowed to do so in accordance with section 120.66(2). which, despite the absence of walls, provides a bit of shelter for wagering machines, video screens, and, of course, patrons, for whom additional outdoor seating is provided. The casino is at least 100 yards from the temporary “big tent.” It is possible to walk from the casino to the big tent, and return, on a concrete walkway, but the walkway is only partially covered, which means, when it rains, that patrons cannot go back and forth between the SMB and the “LGF” without getting wet. The walls of the SMB do not touch or abut the areas where patrons can view the live horse races and place bets. Indeed, a patron can walk into the main entrance of the casino, play the slot machines, and then leave, without once seeing, or being within a football field’s length of, an area that allows the viewing of live horse racing. At the time of the hearing, Gulfstream Park’s general manager was William Badgett. (Gulfstream Park, recall, operates Calder’s race meet pursuant to contract.) Mr. Badgett testified as follows regarding the decline in attendance and wagering after the demolition of Calder’s grandstand: [W]hat I’ve seen is—it’s, pretty much, in black and white. The numbers over the year—year to year to year[—]have declined mostly because this is the best that we can offer at the facility without building a permanent structure. … When it rains the water comes down the hill and people just leave. And what I’ve seen from the owners is they’ll come to watch a race. After the race they’ll leave. … [I]t has declined year to year to year in the handle and the amount of people that we see there. When asked whether, based upon his many years of experience in the horseracing industry as a trainer and as a track manager, he believed that the lack of a grandstand and of any protection from the elements has negatively affected the amount of live handle at the race meets at Calder Race Course, Mr. Badgett answered, “Yes, absolutely.” Describing the experience of watching a race at ground level on the apron, Mr. Badgett testified: What we do is we put televisions in the tent because it’s not as—You, more or less, have to walk down the apron if you want to see it live. There’s a structure in the middle of the—of the in-field, which is the tote board, which doesn’t work anymore. So, it’s a little bit of an obstruction. You can see [the race], but you’re better off watching it on television. The undersigned credits Mr. Badgett’s testimony on these points. DETERMINATIONS OF ULTIMATE FACT It is determined as a matter of ultimate fact that both the open-air option and the nonintegration principle have the effect of law because the Division, if unchecked, intends consistently to follow them in carrying out its responsibilities to administer chapters 550 and 551 generally, and section 551.114(4) specifically. Each statement creates rights (in the form of expanded locational options for SMBs and architectural options for LGFs) that are exercisable by slot machine licensees.11 While directly regulating the physical plant of a permitted pari-mutuel facility, these statements collaterally regulate live gaming licensees, including businesses owing racing animals such as SCF, whose licensed occupations require access to, and the use of, the permitholders’ LGFs and other pari-mutuel facilities. From the perspective of a licensed racehorse owner, the LGF (which it neither owns nor controls) is the environment for its audience, the spectators whose money (wagered on races) helps fund the purses and awards that compensate the licensee for its services. A law that allows an LGF to be an open-air place as opposed to a climate controlled 11 The undersigned hereby places on the record the director’s comment regarding paragraph 30: “Finding the agency’s future intent as a matter of fact is troubling.” Any party desiring to rebut this communication shall be allowed to do so in accordance with section 120.66(2). Continued on next page... building is detrimental to the interests of a business licensee whose success in a pari-mutuel occupation depends upon the continued presence of a large, paying audience, for the obvious reasons that an open-air place is unlikely to be as comfortable, or as amenity-rich, as a building; and, taken together, less comfort and fewer amenities, relatively speaking, are more likely to discourage potential customers from showing up.12 Similarly, the nonintegration principle negatively affects the interests of live gaming licensees such as SCF because it allows the permitholder literally to draw patrons away from the live gaming activities upon which the live gaming licensees depend, to a “nearby,” but physically separate and independent, SMB. The relative draw of the SMB, moreover, which must be an enclosed building, is enhanced if the LGF, pursuant to the open-air option, does not afford patrons a conditioned environment. That is, when the nonintegration principle works in tandem with the open-air option at the same pari-mutuel facility, the result is even more disadvantageous to live gaming licensees, because the disequilibrium in patron comfort, as between slot machine players and live game spectators, ratchets up as the LGF becomes more stripped-down. The bottom line is that the nonintegration principle and the open-air option are unadopted rules because, in the Division’s hands, they create legally protected opportunities for permitholders to design, configure, and construct their physical plants, in ways that predictably and substantially affect live gaming licensees. 12 The undersigned regards this as self-evident. Common, everyday experience informs the undersigned—who doubts that any reasonable person can genuinely deny—that an enclosed, dry, heated or cooled environment, separated from the outdoors, where a spectator can sit and watch a race without being exposed to direct sunlight, wind, or insects, is more attractive to potential customers, in the main, than an open-air place where the spectator might be uncomfortably hot or cold, windswept, and bitten by mosquitoes; thus, a building is a relatively stronger draw. Continued on next page... The gatekeeper mechanism, in contrast, while perhaps having some of the characteristics of a general principle, is primarily a quasi-judicial ruling, operative only in the context of a quasi-judicial administrative proceeding, and lacking any broad regulatory effect. While such a ruling plainly affects the interests of the party or parties to the particular proceeding, it is judicially reviewable without the mediation of yet another administrative proceeding (unlike an intended regulatory decision, which becomes final unless a hearing is requested).13 To be sure, the question of whether an agency statement to the effect that “formal hearings shall not be granted if the historical facts are undisputed, leaving for determination only the ultimate fact of compliance” (whose level of generality is somewhat higher than the gatekeeper mechanism at issue) could be deemed an unadopted rule is fairly debatable. Yet, even that apparently rule-like statement, which arguably “describes the procedure or practice requirements of an agency,”14 would be actionable only as an interlocutory order in a quasi-judicial proceeding, because only such a proceeding would give the agency an opportunity to use the statement. It is hard, therefore, to distinguish between 13 In other words, if a party disagrees with the agency’s decision under section 120.569(2)(a) to deny the party’s request for a formal hearing, that party does not need to request another administrative hearing to contest the decision. The agency’s decision to deny a formal hearing and proceed under section 120.57(2) is a nonfinal order, which may be immediately appealed under section 120.68(1)(b), see United States Service Industries-Florida v. Department of Health and Rehabilitative Services, 383 So. 2d 728 (Fla. 1st DCA 1980), or reviewed on plenary appeal from an adverse final order, see Spuza v. Department of Health, 838 So. 2d 676 (Fla. 2d DCA 2003). If the agency refuses to discharge its duty under section 120.569(2)(a), mandamus will lie. See Cmty. Health Charities v. Dep’t of Mgmt. Servs., 961 So. 2d 372 (Fla. 1st DCA 2007). 14 See § 120.52(16), Fla. Stat. (definition of “rule”). “policy” and “reversible error” in this instance.15 Ultimately, the undersigned determines that the gatekeeper mechanism is not a rule by definition.
The Issue Whether Respondent violated Florida Administrative Code Rule 61D-11.005(5)(b) and therefore also Section 849.086(14)(a), Florida Statutes, as alleged in the instant Administrative Complaint, and, if so, what penalty should be imposed.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: At all times material to the instant case, Respondent held a Department-issued cardroom employee occupational license that expired June 30, 2007. After his license expired, Respondent applied for a new cardroom employee occupational license. By letter dated October 22, 2007, the Department advised Respondent that his application had been denied based upon the same alleged wrongdoing with which he had been charged in the instant case. The afternoon of November 15, 2006, Respondent was working as a dealer in the cardroom at the Mardi Gras Racetrack and Gaming Center (Mardi Gras) in Hallandale, Florida. At approximately 3:00 p.m. on that date, Respondent was manning Table #7, one of the "20 regular[2] poker tables"3 in the Mardi Gras cardroom.4 On the table directly in front of Respondent was an "imprest tray" (also known as the "bank").5 To the right of the "imprest tray" was a slide-activated "drop box" used to collect and temporarily store the rake6 (that is, the house's take) for each hand.7 To Respondent's left was a "tip box," which had a "drop slot" through which only one chip at time could be dropped.8 Positioned above the table was a fixed, surveillance camera, which continuously captured and recorded the activities at the table.9 The images caught by the camera could be viewed in real-time on the monitors in the cardroom's surveillance room.10 At 3:06 p.m. the hand being played at Table #7 had just ended. After giving the winner his winnings and gathering the "mucked" (that is, discarded) cards on the table, Respondent, with his right hand, took the five one-dollar chips (representing the "rake") that were on the front "ledge" of the "drop box" and put them on the table in front of the "imprest tray." He then, again with his right hand, took a five-dollar chip from the "imprest tray" and placed it on the front "ledge" of the "drop box" to replace the five one-dollar chips that he had just removed (Removed Chips).11 As Respondent was getting the five-dollar chip from the "imprest tray," the winner of the hand tossed on the table a one-dollar chip as a tip for Respondent (Tip Chip), and it rolled to a stop right next to the Removed Chips. Using his right hand, Respondent moved the Tip Chip away from the Removed Chips. He then picked up the Removed Chips. As he was picking up the Removed Chips with his right hand, Respondent moved his left hand (which had been palm-down on the "mucked" cards he had gathered) to the "imprest tray," where it remained for approximately a second,12 before he placed it, in a semi-clenched position, on the table to the left of the "mucked" cards. As he was moving his left hand away from the "imprest tray," he did not hold it (the hand) palm-up to the camera to show that it was empty. In failing to do so, he violated "one of the rules at Mardi Gras" that dealers are expected to follow. As he was repositioning his left hand, Respondent took the Removed Chips in his right hand and placed them in the "imprest tray." He then, with his now-empty right hand, pulled the "drop box" slide. On his second try, the five-dollar chip on the box's "ledge"(representing the "rake") fell into the box. Respondent next turned his attention to the Tip Chip that was on the table. He picked it up with his right hand, transferred it to his left hand, and then dropped it in the "tip box." Christopher Fisher, the Mardi Gras' dayshift surveillance supervisor, was in the cardroom's surveillance room observing Respondent at the time.13 It appeared to Mr. Fisher that Respondent was depositing two chips in the "tip box."14 Mr. Fisher thereupon reviewed the video recording of the hand that had just concluded to "find out where [Respondent had] got[ten] that second chip from." When he "played it the third time," Mr. Fisher "came to the conclusion that [Respondent] had put his left hand into the bank and took the chip from there." Mr. Fisher immediately contacted his supervisor, Christopher Hock, Mardi Gras' surveillance director. After reviewing the video recording of the incident, Mr. Hock concurred with Mr. Fisher's conclusion that Respondent had taken a chip from the "imprest tray" and dropped it into the "tip box." Respondent was terminated from his dealer position at Mardi Gras for "theft," effective November 15, 2006.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department issue a Final Order dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 29th day of February, 2008, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of February, 2008.
The Issue The issue to be resolved in this proceeding concerns whether the Respondent set up, promoted or conducted a lottery for money or other thing of value in violation of Section 849.09, Florida Statutes.
Findings Of Fact On August 26, 1998, the Respondent, Personal Investments, Inc., d/b/a Personal Investments (Respondent) held license no. 77-00008, Series 2-COP, authorizing it to sell alcoholic beverages. On that date Mr. Stockton Hess was a corporate officer (Vice President). Mr. Hess was also a corporate officer of the Washington County Kennel Club, Inc. (WCKC) on the above date (President). The Respondent is a business regulated by the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (Division) because it sells alcohol. The Washington County Kennel Club (Club) is regulated by the same Department's Division of Pari-mutuel Wagering, because it operates a pari-mutuel wagering facility at the Ebro Greyhound Park Dog Track. The Ebro Greyhound Park is owned and operated by the Club. The Club is in the business of selling pari-mutuel tickets, programs and tip sheets. Personal Investments, Inc., sold alcohol at its concession stands and in the lounge and restaurant at Ebro Greyhound Park, located in Ebro, Washington County, Florida. The Respondent served as concessionaire for food and beverage services through its contract with the Club. The Club has held its pari-mutuel wagering permit and annual pari-mutuel licenses continuously for some forty years. They authorize greyhound racing operations at the Ebro track facility. On August 26, 1998, the Club conducted a game promotion at its greyhound track in which any person entering the facility, regardless of whether he or she paid an admission fee, was provided a split-ticket free of charge. One half of the ticket went into a drum located by the entrance way and the other half of the ticket was retained by the patron. Located next to the drum, and on the Club premises, was a wheel which contained representations of prizes such as t-shirts, magnets, key chains and so forth. Subsequent to the tenth race a Club employee, the front gate hostess, would draw a ticket and another employee, the track announcer, would announce the number drawn. The patron holding the other half of the selected ticket would then present himself to the front gate hostess to verify the number. The patron would then spin the wheel and win whatever prize was reflected at the point where the wheel stopped. The Club bought the wheel, paid for the prizes and its employees operated the game in question. Mr. Hess, an officer of both the Club and the Respondent corporation had knowledge of and intentionally participated in the running of the above-described game. On August 26, 1998, a drawing was conducted after the tenth, twelfth and thirteenth races. No patron responded to the number called out following the tenth race, but patrons responded after their announced numbers were called after the twelfth and thirteenth races. Each of those patrons presented a ticket, spun the wheel, and each won a T-shirt. The Division offered no evidence and was unaware, on August 26, 1998, or thereafter, including at hearing, whether those patrons entered the dog track premises by paying an admission ticket price. On August 26, 1998, three hundred ninety-one patrons attended the track. Two hundred eighty-eight of those patrons or approximately 75% attended the track for free, utilizing free passes made widely available by the Club throughout its market area. On a typical racing day or night in excess of 60% to 70% of the patrons entering the Ebro Greyhound Track facility enter utilizing such free passes, the availability of which is a matter of fairly common knowledge in the track's market area. In accordance with the Division of Pari-Mutuel Wagering requirements, the Club maintains a separate turnstile for patrons entering daily with free passes from those paying an admission fee. Respondent's Exhibit B in evidence is a daily report, submitted to the Division of Pari-Mutuel Wagering, of patrons entering for free as opposed to those who paid an admission fee, including the report for August 26, 1998. It was further the Club's policy that any patron who asks for a free pass at the cashier's window is given one and permitted to enter the track premises free. On August 26, 1998, Division Agent Lee went to the Ebro Greyhound Track, paid a $2.00 admission fee, and used his split- ticket to enter the game promotion. He observed the two patrons who had each won a T-shirt following the twelfth and thirteenth races. He made no attempt to obtain a free admission nor did he inquire as to whether the two patrons who won T-shirts had entered for free. Agent Lee testified that he was unaware at the time he visited the greyhound track on that date that the Club owned the track and conducted the Pari-Mutuel Wagering permit and license, despite the fact that the Division of Pari-Mutuel Wagering, a part of the same department, as the Division, was the source of the request to review the game promotion. Agent Lee thought that the Respondent, Personal Investments, Inc., was conducting the game promotion. In fact, that was not the case, the game promotion was conducted solely by the Club and its employees. Agent Lee testified that on August 26, 1998, as well as on the date of hearing, he had no knowledge or evidence that any agent, servant or employee of the Respondent had set up, promoted or conducted the game promotion or a lottery for money or "other thing of value." Agent Lee also testified that on August 26, 1998, and on the date of the hearing, he had no knowledge or evidence to offer to the effect that Personal Investments, Inc., or its agents, servants or employees attempted to operate, conduct or advertise any lottery scheme or device. Agent Lee was unaware of Division Training Bulletin 93-18 concerning game promotions. This was a memorandum to all District Supervisors of each district office of the Division noting that Section 849.094, Florida Statutes, authorizes game promotions in which the patron must be present to win, provided that the game promotion does not require an entry fee, payment or proof of purchase as a condition for entering the game promotion. Tickets to enter the game promotion are given away without charge by the Club to any patron attending the facility. It is the Division's apparent position that, since Agent Lee paid a $2.00 admission fee to the track and thereafter received his game promotion ticket, that such admission fee constitutes a fee, payment or proof of purchase required as a condition precedent to entering into the subject game promotion. Since almost 75% of the patrons attending the track on the date in question entered free, and since every person entering the track on that date received, without charge, a game promotion ticket, the game promotion ticket cannot be determined to have, as a condition precedent, any fee, payment or proof of purchase as a condition for entry into the game promotion. The "Bud Bowl '99 Sweepstakes" is a common type of game promotion used as an exemplar by the Respondent, the rules of which are depicted in Respondent's Exhibit C, in evidence. That game promotion is approved by the Florida Department of State pursuant to its authority in Section 849.094, Florida Statutes. It is a game promotion in which some but not all participants in fact pay a purchase price and, as part of the purchase, receive a game promotion ticket or piece. The rules of the game contained in Respondent's Exhibit C, reflect that of the 4,429,350, entry forms made available, approximately half are contained within specially marked packages of Anheuser-Busch beer products, which can only be obtained through purchases at stores holding alcoholic beverage licenses. However, one may also enter the "Bud Bowl '99" contest without a purchase and thus in accordance with Section 849.094(2)(e), Florida Statutes, the game promotion does not require, as a condition of entry into it, a fee, payment or proof of purchase. The Ebro game promotion did not award prizes greater than $5,000.00. Thus, unlike the "Bud Bowl '99" game promotion, it did not have to meet applicable requirements for a game promotion offering prizes in excess of such value, including registration with the Florida Secretary of State. It did, however, share the same common requirements as the "Bud Bowl '99" promotion, which is that any entry fee, payment or proof of purchase as a condition of entering the game promotion was not required. Mr. Hess, who testified at hearing for the Respondent, paid $7.48 for a twelve-pack of Anheuser-Busch beer, which contained a "Bud Bowl '99" sweepstakes game promotion ticket therein. He did so without that game promotion being in violation of Section 849.094, Florida Statutes, as determined by the Secretary of State in registration of that promotion. Similarly, Agenct Lee paid $2.00 to enter the Ebro Greyhound Track, and in doing so acquired no more or no less right and opportunity to participate in the Ebro game promotion than did the majority of patrons who entered without having to pay an admission fee. The rules of the "Bud Bowl '99" sweepstakes game promotion submitted to or approved by the Department of State clearly reflect that approximately 50% of entry fees would be contained within Anheuser-Busch product packages which can only be obtained by purchase. The remaining 50% of the entries were made available without a purchase requirement.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the pleadings and argument of the parties, it is RECOMMENDED: That the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco enter a final order dismissing the amended administrative action against Personal Investments, Inc. DONE AND ENTERED this 31st day of March, 1999, in Tallahassee, Leon County, Florida. P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1999. COPIES FURNISHED: Harold F. X. Purnell, Esquire 210 South Monroe Street, Suite 420 Tallahassee, Florida 32301 Bart Schneider, Esquire Department of Business and Profession Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007 Deborah R. Miller, Director Division of Alcoholic Beverages And Tobacco Department of Business and Profession Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007 Lynda Goodgame, General Counsel Department of Business and Profession Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007
The Issue The issue in this case is whether the Petitioner should revoke or suspend the Respondent's pari-mutuel occupational license for allegedly gambling out of his teller box in violation of F.A.C. Rules 61D-1.031(6) and 61D-1.002(18).
Findings Of Fact On or about July 6, 1994, the Respondent, Edward J. Tomczak, applied for a pari-mutuel occupational license as a teller at Tampa Jai Alai. According to the evidence, a one-year Unrestricted "M2" General license, number 0208239-1084, was issued to the Respondent, and the license is scheduled to expire on June 30, 1995. In the course of working as a teller at Tampa Jai Alai on the evening of August 29, 1994, the Respondent issued himself at least $1,427 of tickets for which he made no payment. In effect, he "borrowed" and used the fronton's money, against fronton policy, to gamble on his own account. As a result of his gambling, the Respondent was $1,427 "short" at the end of the evening. After closing out for the evening, the Respondent reported the $1,427 "short" to his supervisor. The Respondent explained that he was trying to win enough money to pay the claim of a woman whose winning December, 1992, Twin Trifecta ticket was cashed by the Respondent on August 11, 1993, after allegedly being found in the ladies room at Tampa Jai Alai by the Respondent's girlfriend. Notwithstanding the Respondent's attempt to explain his conduct of the previous evening, it was clearly understood between him and his supervisor that the Respondent's conduct on August 29, 1994, was a firing offense and that the Respondent no longer would be permitted to work as a teller at Tampa Jai Alai. (It was not the first time the Respondent reported a substantial "short" that summer. A previous "short" was in the neighborhood of $600-$700.) The next day, the Respondent cashed out his retirement account, repaid Tampa Jai Alai the $1,427 owed, and left. Whether he quit or was fired is unimportant to the issues in this case. A small "short" by a teller is not a firing offense at Tampa Jai Alai. There are many ways in which honest errors in the course of an evening can result in minor (less than $100) "shorts." Tampa Jai Alai's policy is that tellers must repay "shorts" and that "shorts" over $100 must be repaid before the teller can work again at the fronton. But "shorts" of the magnitude of $600-$700, much less $1,427, are considered highly unusual and are cause for concern that they are not the result of honest mistakes but rather of prohibited gambling "out of the box," as the Respondent was doing.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering, enter a final order: (1) imposing a $500 fine on the Respondent, Edward J. Tomczak; (2) revoking his license; and (3) declaring him ineligible for relicensure for a period of one year, with relicensure conditioned upon certification by a Florida licensed mental health practitioner that he has been evaluated for possible gambling addiction and either has been found not to be addicted or is being treated for such an addiction. RECOMMENDED this 22nd day of June, 1995, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 22nd day of June, 1995. COPIES FURNISHED: Joseph M. Helton, Jr. Esquire Department of Business and Professional Regulation 1940 N. Monroe Street Tallahassee, Florida 32399-1007 Edward J. Tomczak 6401 S. Westshore Blvd., Apt. 716 Tampa, Florida 33616 Royal H. Logan Acting Director Department of Business and Professional Regulation Division of Pari-Mutuel Wagering 1940 North Monroe Street Tallahassee, Florida 32399-0792 Lynda Goodgame General Counsel Department of Business and Professional Regulation Division of Pari-Mutuel Wagering 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The first issue in this case is the amount of attorneys' fees to assess against Respondent, Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering (Respondent or Division), pursuant to an Order of the First District Court of Appeal (First DCA) granting a motion by Petitioner, Ft. Myers Real Estate Holdings, LLC (Petitioner or Ft. Myers REH), for attorneys' fees pursuant to section 120.595(5), Florida Statutes (2010),1/ and remanding the case to DOAH to assess the amount. The second issue is whether Petitioner is entitled to recover attorneys' fees and costs incurred in this proceeding, and, if so, in what amount.
Findings Of Fact For reasons that the First DCA found to be a "gross abuse of agency discretion," the Division rendered a Final Order dismissing Ft. Myers REH's petition for a formal administrative hearing to contest the Division's denial of Ft. Myers REH's amended application for a quarter horse racing permit. The premise of the Division's Final Order was that Petitioner could not prove that it meets the requirements for a permit, hence its claimed injury was not "redressable." Ft. Myers REH appealed the Final Order. The Notice of Appeal to the First DCA was filed on April 5, 2010, signed by Cynthia Tunnicliff for Pennington, Moore, Wilkinson, Bell and Dunbar, P.A. (the Pennington firm). After two motions to extend the deadline for filing the initial brief, Ft. Myers REH filed its Initial Brief on July 26, 2010. With the Initial Brief, Ft. Myers REH filed a motion for an award of attorneys' fees under section 120.595(5), asserting that the agency action which precipitated the appeal was a gross abuse of the agency's discretion. The motion's prayer for relief asked for "entry of an order awarding the Appellant the attorneys' fees it has incurred prosecuting this appeal, pursuant to . . . Section 120.595(5)." As stated in the opinion, the First DCA found that the Division's Final Order was "contrary to the basic, settled principle of administrative law that a person whose substantial interests are determined by an agency is entitled to some kind of hearing . . . to challenge the agency's decision[.]" The court determined that the dismissal of Ft. Myers REH's petition was "so contrary to the fundamental principles of administrative law" that Petitioner was entitled to an award of attorneys' fees under section 120.595(5). To assess reasonable attorneys' fees, a starting place is necessarily the time records of Petitioner's appellate legal team. Although Judge Farmer offered his opinion that the time records had little to no significance in this case, nonetheless, even Judge Farmer accepted the time-based attorneys' fees shown on those time records as the base amount to which a multiplier should be applied. Therefore, the undersigned examined the time records in the context of the appellate record and considered the conflicting opinions of the parties' experts to assess whether the time incurred by Petitioner's legal team was reasonable in light of the steps needed to successfully prosecute the appeal. There was extensive motion practice in the appeal, which significantly increased the amount of time that might otherwise be considered reasonable for an appeal of an order summarily dismissing a petition for administrative hearing, with no record to speak of from proceedings below, such as would be developed in a trial or administrative hearing. Several motions were filed by the Division, including a motion to dismiss the appeal, which resulted in an Order to Show Cause directing Ft. Myers REH to demonstrate why the appeal should not be dismissed. The Division also filed two different motions to strike, one directed to Ft. Myers REH's response to the Order to Show Cause why the appeal should not be dismissed, and the other directed to the reply brief; both of these motions were denied. Ft. Myers REH filed even more motions than the Division. In addition to the motion for attorneys' fees pursuant to section 120.595(5) and two perfunctory motions for enlargement of time to file the initial brief, Ft. Myers REH also filed a motion for substitution of counsel, making the mid-stream decision that David Romanik, whose expertise was in gaming law, should be counsel of record instead of Cynthia Tunnicliff, whose expertise was in administrative and appellate law, even though both attorneys remained involved before and after the substitution. More substantively, in reaction to the Division's motion to dismiss, Ft. Myers REH filed a motion to supplement the record and a motion for judicial notice, which were denied; a motion to consolidate the appeal with a separate mandamus action it had filed, which was denied; and a motion to strike the Division's response to the motion to supplement the record, or, in the alternative, a motion for leave to respond to new legal issues raised in the Division's response, both of which were denied. The basis for the Division's motion to dismiss was that a newly enacted law rendered the appeal moot, because under the new law, Ft. Myers REH could no longer qualify for the quarter horse racing permit for which it had applied. The Division sought to invoke the general rule that the law in effect at the time of a final decision applies to determine whether to grant or deny an application for a permit or other form of license. See Lavernia v. Dep't of Prof'l. Reg., 616 So. 2d 53, 54 (Fla. 1st DCA 1993). Ft. Myers REH's motion flurry, even though unsuccessful, was a reasonable response to the Division's position in that Ft. Myers REH sought to demonstrate that one of the exceptions to the general rule, as recognized in Lavernia, was applicable. See, e.g., Dep't of HRS v. Petty-Eifert, 443 So. 2d 266, 267-268 (Fla. 1st DCA 1983)(under the circumstances of that case, applicants were entitled to have the law applied as it existed when they filed their applications). In its opinion, the First DCA acknowledged both the Division's mootness argument and Ft. Myers REH's contention that there were circumstances that would preclude the Division from applying the statutory changes to the permit application. The court deemed these issues more suitable for fleshing out in the administrative hearing on remand. See Ft. Myers, 53 So. 3d at 1162-1163. In addition to the other motions, Ft. Myers REH also filed a motion for an award of attorneys' fees and costs pursuant to section 57.105, in which Ft. Myers REH asserted that the Division's motion to dismiss the appeal was unsupported by material facts and then-existing law. The court considered and denied the section 57.105 motion. There were four attorneys who worked on the appeal on behalf of Ft. Myers REH: David S. Romanik from Oxford, Florida; and Cynthia Tunnicliff, Marc Dunbar, and Ashley Mayer, all of the Pennington firm in Tallahassee, Florida. The first three of these attorneys are long-time practitioners with substantial experience and particular areas of expertise. Mr. Romanik, who became the counsel of record in the middle of the appeal, is an attorney with 35 years' experience, gained in private practice and in executive, legal, and consulting positions in the racing/gaming industry. He was described as the "general counsel, sort of," for the Florida interests of Green Bridge Company, which is the parent company of, and primary investor in, Ft. Myers REH. While Mr. Romanik has some experience in administrative litigation and appellate practice, his primary area of expertise is in gaming law. Ms. Tunnicliff is a shareholder of the Pennington firm, with vast experience and a well-established excellent reputation for her expertise in administrative law and administrative litigation under the Administrative Procedure Act (APA), chapter 120, as well as in appellate practice. Ms. Tunnicliff's appellate experience is documented in well over 100 appeals in which she has appeared as counsel of record, spanning the last 25 years. Marc W. Dunbar has been practicing law for 17 years, and he also is a shareholder of the Pennington firm. Like Mr. Romanik, Mr. Dunbar's recognized area of legal expertise is in gaming law. For the last 13 years, he has been head of the firm's gaming law practice group, and he has substantial experience in gaming law and in providing consulting services to the pari-mutuel industry. Mr. Dunbar's testimony was that this has been the focus of his practice and has grown over the years such that it is now virtually all he does. Ashley Mayer was the lone associate who worked on the appeal. Ms. Mayer graduated in 2009 with high honors from Florida State University College of Law, where she was a member of the moot court team. Those who worked with her regularly at the Pennington firm, including Ms. Tunnicliff and Mr. Dunbar, thought very highly of her work as a one-year associate. Based on the expert opinions offered for and against the reasonableness of the time records for these four attorneys, including the hourly rates applied to the time entries, the undersigned finds as follows: there are some obvious flaws and less obvious insufficiencies in the time records that require adjustment; there is a large amount of duplication, which is tolerable to some extent given the stakes, but which exceeds a tolerable degree and requires some adjustment; the hourly rates for the two gaming law experts are too high for the non-gaming law legal services they each provided, requiring adjustment; and that the hourly rate for the one-year associate is too high, requiring adjustment. The time records of each of the four timekeepers will be addressed in turn, starting with the one-year associate, Ms. Mayer. As an example of an obvious flaw in the time records, the very first time entry is for researching and analyzing case law regarding bringing a civil rights lawsuit under 42 U.S.C. section 1983, for 2.8 hours. Another time entry described work related to a separate mandamus action, which Petitioner sought unsuccessfully to consolidate with the appeal. These entries are unrelated to the appeal. In addition, Ms. Mayer performed research regarding the process for assessing appellate attorneys' fees by remand to the lower tribunal. These entries do not relate to the appeal or to litigating over the entitlement to attorneys' fees. Several of Ms. Mayer's entries do not reflect legal work, but, rather, administrative or secretarial work, such as retrieving a law review article from the law library, conferring with a secretary regarding formatting briefs, and revising documents to conform to others' edits. Other than these entries, Ms. Mayer's time records seem generally appropriate, in that she performed a large amount of research before the initial brief, she performed drafting, and she continued to carry out research assignments throughout the appeal. Of the total 66.7 hours claimed, a reduction of 6.4 hours is warranted to account for the inappropriate entries. 60.3 hours are reasonable for Ms. Mayer. An hourly rate of $225 was applied to Ms. Mayer's time. Petitioner's expert attested, in general and in the aggregate, to the reasonableness of the hourly rates in Petitioner's time records for attorneys with comparable experience and skill, but gave no specific information regarding the basis for his opinions. Respondent's expert disagreed and testified that in her opinion, an hourly rate of $225.00 for a one-year associate was excessive. She based her opinion on The Florida Bar's 2010 Economics and Law Office Management Survey, which reported that for the north region of Florida, 47 percent of all attorneys at any experience level charge an hourly rate of $200.00 or less. In the opinion of Respondent's expert, a reasonable hourly rate for Ms. Mayer would be $150.00, instead of $225.00. While Respondent's expert's information was also somewhat generalized, the undersigned finds that based on the limited information provided, a reasonable rate for a highly skilled, but not very experienced attorney one year out of law school, would be $185.00 per hour. A reasonable attorney's fee for Ms. Mayer's legal work on the appeal is $11,155.50. Turning to Ms. Tunnicliff's time records, the hourly rate for Ms. Tunnicliff of $400.00, though high, is accepted as appropriately so. The rate is comparable to the rates charged by other attorneys of comparable skill and experience in the same locale, as ultimately agreed to by both parties' experts. Ms. Tunnicliff's time entries show that in general, she limited her hours appropriately to a high level of supervision, direction, and review, while allowing others, particularly Ms. Mayer, to conduct the more time-intensive research and drafting efforts. Based on the expert testimony and a review of the time record entries, a few adjustments to Ms. Tunnicliff's records are necessary. One-half hour is subtracted for an entry related to mandamus, because the mandamus action was separate and unrelated to work done to prosecute the appeal at issue. Another adjustment is necessary because of an error in the time records: The billing summary shows that Ms. Tunnicliff's total time was 31.6 hours, which was multiplied by the hourly rate to reach the fees sought for Ms. Tunnicliff's time. However, the individual time entries add up to a total of only 24.6 hours. With the additional deduction of one-half hour for work unrelated to the appeal, a total of 24.1 hours will be allowed for Ms. Tunnicliff's time. Applied to the agreed reasonable hourly rate, a reasonable attorney's fee for Ms. Tunnicliff's work on the appeal is $9,640.00. The time records for the two gaming law experts present more difficult issues, because the legal questions presented in the appeal were not gaming law questions; they were administrative law questions and, indeed, "basic, settled" administrative law questions. While certainly gaming law was the substantive, regulatory context in which these issues arose, it is clear from the time entry descriptions of exhaustive, duplicative legal research on rights to administrative hearings, party standing, and what law applies in license application proceedings, that at their core, the questions presented were general administrative law principles and were treated as such. Yet not only one, but two highly specialized gaming law experts whose experience and specialized expertise allow them to command hourly rates of $450 when practicing gaming law, spent most of the total attorney time prosecuting this administrative law appeal. Mr. Romanik's time records claim 195.5 total hours at $450 per hour, while Mr. Dunbar's time records claim 80.6 total hours, of which 30.2 were claimed at the rate of $450 per hour, while 50.4 additional hours were claimed at $300 per hour. The reduced $300 per-hour fee was an adjustment made at the urging of Petitioner's expert to account for research time spent not within Mr. Dunbar's area of expertise. Mr. Romanik's time records require adjustment. In general, many of the types of criticisms of these records by Respondent's expert are accepted, although the undersigned does not agree with the degree of adjustments deemed warranted by Respondent's expert. In general, Mr. Romanik's time entries reflect excessive hours spent by Mr. Romanik, doing tasks that were duplicative of tasks more appropriately performed by Ms. Mayer, which were, in fact, performed by Ms. Mayer, including research and initial drafting. Perhaps one reason for the sheer number of hours invested by Mr. Romanik was that he was performing research on basic, settled principles of administrative law, such as standing, hearing rights, licensing proceedings, what happens when the law changes while a license application is pending, and other questions of administrative procedure. Mr. Romanik's time records also reflect too many basic drafting tasks, such as initially drafting a request for oral argument. The time records also show excessive secretarial or administrative tasks, such as listing and downloading cases and uploading briefs. Not only did Mr. Romanik's specialized expertise in gaming law not facilitate his performing these tasks efficiently, but he inefficiently performed these tasks very expensively, i.e., at the claimed rate of $450 per hour. Nonetheless, Mr. Romanik apparently did the lion's share of work in redrafting the initial brief (initially drafted by Ms. Mayer), drafting the reply brief, drafting the numerous motions and responses to the Division's motions, and performing well at the oral argument. The high stakes and good outcome cannot be denied. Yet the total time claimed would be high at the hourly rate claimed, if Mr. Romanik were the sole attorney working on the appeal. Given his role as the "general contractor," it is conceivable that many of his hours were invested, or should be considered as having been invested, as "client" time in which Mr. Romanik was serving as the client liaison for the prosecution of the appeal to oversee the work done by the attorneys prosecuting the appeal. Regardless of how Mr. Romanik's hours are characterized, they were excessive and duplicative. To adjust for excessive time in tasks outside Mr. Romanik's area of expertise and for duplication, the undersigned finds that Mr. Romanik's time should be reduced by 83 hours. Reflecting the high stakes and good outcome, as well as the aggressive motion practice in the appeal, a reasonable--though still very high--number of hours for Mr. Romanik to have spent in prosecuting this appeal (with the substantial help of three other attorneys) is 112.50 hours. With almost all of the time Mr. Romanik spent in this appeal falling in areas outside of his recognized legal expertise, the undersigned finds that a high, but reasonable, hourly rate to apply to Mr. Romanik's time is $325.00. Essentially, Mr. Romanik's legal services fell more within the legal expertise of Ms. Tunnicliff. If $400.00 per hour is the acknowledged reasonable rate for someone of Ms. Tunnicliff's experience and expertise, the rate to apply to Mr. Romanik's time should be less, although not substantially so, recognizing that Mr. Romanik's gaming law expertise was a big advantage. If intricate issues of gaming law were involved in this appeal, as opposed to just being the substantive, regulatory context in which basic, settled principles of administrative law arose, then perhaps Mr. Romanik could command his standard hourly rate. Instead, with the predominant focus of Mr. Romanik's work, as reflected in his time entries on administrative and appellate law and procedure, the reasonable rate that will be applied to the reasonable time total found above is a blended rate that is discounted because of reduced expertise in the main area, but increased because of expertise in a collateral area. Applying the reasonable rate of $325.00 per hour to 112.50 hours for Mr. Romanik yields a reasonable attorney's fee of $36,562.50 for Mr. Romanik's prosecution of the appeal. Mr. Dunbar's time records suffer from the same essential problem as Mr. Romanik's--he is a gaming law expert, but his expertise was hardly utilized. If it was not necessary to tap into Mr. Romanik's gaming law expertise to any great extent, then it was not necessary and redundant to have a second gaming law expert substantially involved in the appeal. Additional problems with Mr. Dunbar's time records include several time entries with inadequate descriptions (e.g., "Research" or "Research re: key cite authority") and other entries with descriptions that did not seem to relate to the appeal (e.g., several entries two months after the initial brief was filed for "Research re: standards for appellate review of motion denial" when there was no denied motion for which appellate review was sought). Mr. Dunbar's time records had a large number of entries for performing basic research on questions of administrative law or appellate practice, such as standing, hearing rights, standards for supplementing the record on appeal, standards for motions to strike and to consolidate appeals, standards for reply briefs, and similar descriptions. Substantial adjustments are in order to remove the inadequately described time entries and the entries seemingly unrelated to this appeal and to substantially reduce the duplicative research done by Mr. Dunbar outside of his area that was also done by Ms. Mayer and/or Mr. Romanik and/or Ms. Tunnicliff. While some overlap is tolerable to ensure that all bases are covered, the time entries do not sufficiently establish what was added by Mr. Dunbar's substantial time- performing tasks outside his area of expertise to the already substantial time allowed for Mr. Romanik outside his area of expertise. Mr. Dunbar's reasonable time spent as a fourth attorney prosecuting this appeal is reduced by 43 hours, to 37.6 hours. A little more than half of the 37.6 hours found to be reasonable were in the non-research category, such as Mr. Dunbar's review and comment on the draft briefs and motions and assistance in preparation for oral argument. The research hours found reasonable were those that appeared to augment, but not duplicate, work by one or more other attorneys. As with Mr. Romanik, a blended reasonable hourly rate is applied, which recognizes that even for the non-research time allowed for Mr. Dunbar, his work was primarily outside his recognized legal expertise, although his expertise provided benefit in understanding the context in which the issues arose. An hourly rate of $300.00 is reasonable for 37.6 hours of work done by Mr. Dunbar in prosecuting this appeal, equaling a reasonable attorney's fee of $11,280.00. The following summarizes the number of hours, hourly rate, and resulting fee found to be reasonable for each of the four attorneys who aided in prosecuting the appeal: Attorney Hours Hourly Rate Fee Mayer 60.3 $185 $11,155.50 Dunbar 37.6 $300 $11,280.00 Romanik 112.5 $325 $36,562.50 Tunnicliff 24.1 $400 $ 9,640.00 Total hours by all attorneys: 234.50 Total time-based fees: $68,638.00 As previously alluded to, the stakes of this appeal were very high, in that without success in the appeal, Petitioner would have no chance of obtaining the quarter horse racing permit for which it had applied. While success in the appeal would not assure Petitioner that it would ultimately prevail in its effort to secure a permit, winning the appeal was a necessary step to keep the permit application alive and allow Petitioner to take the next step in the process. If, at the end of the long road ahead, Petitioner secures the sought-after permit, the value of that permit could be in the neighborhood of $70 million. Given the stakes, a higher amount of hours and greater degree of duplication were allowed than might normally be considered reasonable. The undersigned finds that there was not a huge risk factor with regard to the outcome of the appeal. While in a general sense and statistically speaking, odds always may be greatly against success in an appeal, those across-the-board statistics are mitigated in this case by such a clear violation of a "basic, settled" and "fundamental" principle of administrative law and due process. The complexity and novelty of the issues on appeal are reflected, as one would expect, in the number of hours found to be reasonable for Petitioner's team of attorneys to have spent in prosecuting this appeal. Even as reduced, the total hours found reasonable for this appeal are nearly three times the amount of time Respondent's expert would expect in the typical appeal. Thus, the hours found to have been reasonably invested were substantially higher than typical for an appeal, when one might have expected less hours than typical since this appeal did not follow a trial or administrative hearing. No evidence was presented to show that any of the four attorneys on Petitioner's appeal team were precluded from taking other work because of their role in the appeal or that there were any time constraints placed on the attorneys, either by the client or the circumstances. The evidence was not entirely clear regarding the nature of the arrangements with Ft. Myers REH for payment of attorneys' fees for the appeal. Two separate contingency fee agreements were admitted in evidence. One agreement, "[a]s of August 15, 2010[,]" was between Ft. Myers REH and Mr. Romanik (and his firm, David S. Romanik, P.A.). The operative term of the agreement provided that "[u]pon and after the execution of this fee agreement, the [Romanik] Firm shall handle this matter and all aspects of it on a contingent fee basis." The "matter" covered by the agreement was broadly described as "the pursuit of the issuance by the Division of Pari-Mutuel Wagering of a quarter horse racing and wagering permit . . . ." Therefore, from August 15, 2010, forward, Mr. Romanik and his firm agreed to be compensated on a contingent fee basis for not only the appeal, but also, any subsequent administrative hearings if the appeal was successful and any other administrative or judicial litigation required to secure the permit. Services would be considered successfully completed upon commencement of Ft. Myers REH's gaming operation pursuant to the permit. For such successful services, the Romanik firm would receive $5 million. In addition, the agreement provided that the firm would be entitled to "any and all fees that may be awarded" by any court or administrative tribunal. No evidence was presented regarding the prior fee arrangement that was in place until August 15, 2010, when the contingent fee arrangement took effect. Mr. Romanik and his firm entered into a separate contingency fee agreement with the Pennington firm to secure the Pennington firm's assistance, as a subcontractor, in prosecuting the appeal of the Division's dismissal of Ft. Myers REH's request for an administrative hearing to contest the denial of its quarter horse permit application. The agreement, dated September 1, 2010, was called "a revised representation agreement," which superseded "all prior agreements related to this matter." Payment for services under the agreement was contingent on success in the appeal and was set at "the greater of $100,000 or any fee award from the court, if any." No prior representation agreement for services provided by the Pennington firm in the appeal before September 1, 2010, either with Mr. Romanik and his firm or with Ft. Myers REH, was offered into evidence. However, Mr. Dunbar testified that before the Pennington firm entered into a contingency fee arrangement with Mr. Romanik and his firm, the Pennington firm provided services to Ft. Myers REH under a standard fee agreement by which the Pennington firm attorneys provided legal services for which they billed and were paid at their standard hourly rates. As of August 16, 2010, the standard fee agreement between Ft. Myers REH and the Pennington firm was apparently still in place, because in the motion for section 57.105 sanctions served on Respondent on August 16, 2010, and subsequently filed with the First DCA on September 20, 2010, Mr. Dunbar represented that Ft. Myers REH "had retained the [Pennington law firm] to represent it in this matter and has agreed to pay its attorneys a reasonable fee for their services." This statement was not qualified by any contingency, such as that Ft. Myers REH only agreed to pay a reasonable fee to the Pennington firm if the appeal was successful. Thus, although Mr. Dunbar seemed to indicate in his testimony that the September 1, 2010, contingent fee agreement was intended to apply retroactively, that testimony is inconsistent with the representation in the section 57.105 motion signed by Mr. Dunbar. The evidence establishes that contingency fee agreements were entered into midway through the appeal. The greater weight of the credible evidence was insufficient to prove that before August 15, 2010, the attorneys providing services in the Ft. Myers REH appeal would only be paid if the appeal was successful. Thus, the undersigned finds that the fee arrangements for the appeal were partially contingent. The contingent fee agreements were reached as an accommodation to Ft. Myers REH's desire for such arrangements, rather than as an enticement that had to be offered by Ft. Myers REH in order to secure competent counsel to represent it in the appeal. No evidence was presented detailing the nature and length of Petitioner's relationship with its team of attorneys. As noted, Mr. Romanik has a relationship with Petitioner and its parent that is akin to general counsel over the parent's Florida interests, though it is unknown how long this relationship has existed. The Pennington firm, likewise, has done work for Petitioner and its parent before and has sent invoices for legal services to Mr. Romanik for his review, approval, and transmittal to the parent for payment. It is unknown how extensive or over what period of time this relationship existed. Petitioner established that it incurred an additional $28,087.00 in attorneys' fees charged for litigating the reasonable amount of attorney's fees in this proceeding, plus $44,016.00 in expert witness fees. In addition, Petitioner incurred $1,094.43 for expense items, of which $409.50 represents the cost of the final hearing transcript, and the balance represents costs for copying, courier service, and postage. Respondent did not dispute the reasonableness of those attorneys' fees, expert witness fees, and costs.
Findings Of Fact On September 20, 1977, Victor Sosa, at the time an employee of petitioner, and Leroy Patten, then as now a field agent for the Department of Commerce, visited respondent's premises. A Mr. Chavez told the investigators that Jose Isidro Guillamo, respondent's sole corporate officer, was not on the premises and could not be reached. In response to Mr. Patten's questions, Mr. Chavez said he was ignorant of details about respondent's workmen's compensation insurance. Mr. Sosa asked Mr. Chavez to produce invoices reflecting purchases of alcoholic beverages. Mr. Chavez replied that most of the invoices were at an accountant's office, but joined Mr. Sosa in looking for invoices behind a counter at which customers sat. In the course of the search, Mr. Sosa noticed a clipboard hanging from a nail. The clipboard contained guest checks used as lottery slips. Nearby drawers yielded paper napkins similar employed. The search never uncovered any invoices on the premises. At no time did petitioner give respondent permission to store invoices off the premises. On September 20, 1977, and continuously until March 20, 1978, respondent did not maintain in force workmen's compensation insurance for its employees. On September 20, 1977, no notice of workmen's compensation insurance coverage was posted on the premises.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner suspend respondent's license for thirty days and thereafter until respondent shall secure compensation for its employees in accordance with Section 440.38 (1), Florida Statutes (1977). DONE and ENTERED this 26th day of June, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Dennis E. LaRosa, Esquire The Johns Building 725 South Bronough Street Tallahassee, Florida 32304 La Dominicana Corporation d/b/a La Dominicana Restaurant c/o Jose Isidro Guillama and Mario Cartas 1416 San Marco Coral Gables, Florida 33134
