The Issue The issue in this case is whether Petitioner’s application for continuing education course approval should be granted by the Board of Chiropractic Medicine.
Findings Of Fact Respondent, Board of Chiropractic Medicine, is the state agency responsible for the licensure and regulation of chiropractic medicine in the State of Florida. Section 456.013(6) and Chapter 460, Florida Statutes. The Board has the responsibility to approve continuing education courses sponsored by chiropractic colleges. Section 460.408, Florida Statutes. Continuing education providers established through medical osteopathic or chiropractic colleges send their initial courses to the Board for approval. Ordinarily, once the course is approved they become an approved provider and do not send subsequent continuing courses to the Board for approval. Petitioner is an approved continuing education course provider. On July 24, 2001, Petitioner submitted an application of an online course to the Board for approval. The submitted course, ChiroCredit.com, is a 13-hour course consisting of nine regular hours, two HIV/AIDS hours, and two risk management hours. With the application, Petitioner submitted a letter dated July 19, 2001, by Drs. Richard Saporito and Paul Powers, Petitioner’s representative. The letter requested the Board “to review the issue of acceptance of distance based online education credits for Chiropractors continuing education requirements in the State of Florida.” On August 22, 2001, Stephanie Baxley, Regulatory Specialist for the Board, sent a memorandum to Dr. Gene Jenkins, D.C., chair of the Continuing Education Committee, requesting continuing education review. Dr. Jenkins signed and marked the memorandum "approved" on August 29, 2001. On the same date, Dr. Jenkins also indicated approval of an online course offered by another provider, Logan College. Ms. Baxley wrote to Dr. Richard Saporito notifying him that ChiroCredit.com had been approved for continuing education credit. Vicki Grant is a programs operations administrator with the Department of Health. Her responsibilities include managing the licensing and discipline of four professions, including chiropractic medicine. Ms. Grant received a phone call from Dr. Jenkins who informed her that he had made a mistake by indicating approval of the online course offered by Petitioner. In response to his inquiry as to how to proceed, she advised him to notify the continuing education staff, tell them he had made a mistake, and ask that the matter be presented to the full board. She also spoke to Sharon Guilford regarding the matter. Ms. Guilford is Ms. Baxley's supervisor. Sharon Guilford is a program operations administrator with the Department of Health. One of her responsibilities is serving as the administrator for the continuing education section that consists of six professions, including chiropractic medicine. Ms. Guilford and Ms. Grant spoke about Dr. Jenkins' phone call. On September 11, 2001, Ms. Guilford wrote a note on a copy of the August 29, 2001 letter from Ms. Baxley to Dr. Saporito that stated as follows: "Per Dr. Jenkins-course should've never been approved. Send letter correcting the error of approval." On September 11, 2001, Ms. Baxley sent a letter to Dr. Saporito advising him that the approval letter of August 29, 2001, was sent in error and that the Board would take up the matter at their October 2001 meeting.1/ The Board did address the matter at their October 1, 2001 meeting which was held via teleconference. Dr. Saporito and Dr. Paul Powers spoke to the Board on behalf of Petitioner. During the last part of the Board's consideration of this matter, various board members expressed concern that the Board did not have enough information to vote for an approval of the course and discussed having an opportunity to receive more information. After much discussion, the Board unanimously voted to deny Petitioner's application for approval of the course for continuing education purposes. At the same meeting, the Board also denied an application of Logan College to provide continuing education via an online course. The Notice of Intent to Deny states the grounds for denial: As grounds for denial, the Board found that the course did not meet the requirements of Florida Administrative Code Rule 64B2- 13.004. Specifically, the rule does not contemplate the awarding of credit for virtual courses or those taken online by use of a computer. The Board opined that 'classroom hours' as used in the rule means in-person education and not time spent in front of a computer. The course offered by the applicant is an online offering. Additionally, the Board expressed concerns about the educational merit and security protocols used by online course providers, but welcomes more information regarding these topics. The Board has never approved an online, homestudy, or video-taped presentation for continuing education course credit. The courses presented to the Board by Petitioner and Logan College were the first online courses to be presented for Board approval. The Board interprets its applicable rule, which requires each licensee to obtain 40 classroom hours of continuing education, to require live and in-person classroom hours. Petitioner offered the testimony of two expert witnesses, Dr. Terry Heller and Dr. Joseph Boyle. Dr. Heller has knowledge regarding theories of learning and education, but lacks knowledge about chiropractors, chiropractic education, or chiropractic continuing education and does not appear to be very familiar with Petitioner’s particular online course. Dr. Boyle is familiar with both chiropractic continuing education and Petitioner's course. He disagrees with the Board's interpretation that the term "classroom hours" must mean a lecture or live format. However, Dr. Boyle described the broadest definition of "classroom" to be "anywhere, anyplace, at any pace, anytime." He acknowledged that the Board could set up criteria for online courses that differ from the criteria for traditional classrooms. Respondent’s expert witness, Dr. David Brown, noted that most chiropractors practice in isolation and very few have staff privileges at hospitals. In his opinion, a legitimate policy reason for requiring chiropractors to obtain a certain amount of in-person continuing education is that they can “rub shoulders with their peers” and learn from one another. Dr. Brown noted that many states impose restrictions on the number of online hours that may be taken or on the type of licensees who are eligible to receive credit. Dr. Brown interpreted the word "classroom" within the context of the rule containing the requirement of 40 classroom hours of continuing education to mean ". . . to physically sit in a room, in a classroom type environment which could be an auditorium or some other environment, with your peers who are also taking the class in order to obtain course credit. I think that's a traditional type of view." Dr. Brown's interpretation of "classroom" within the context of the Board's rule is more persuasive than those of Petitioner's experts.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a Final Order be entered denying Petitioner’s application for continuing education course approval.2/ DONE AND ENTERED this 5th day of March, 2002, in Tallahassee, Leon County, Florida. BARBARA J. STAROS 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 5th day of March, 2002.
The Issue Whether the Petitioner's challenge to the licensure examination should be sustained.
Findings Of Fact The Petitioner is a candidate for optometry licensure. He took the examination for licensure in August 1999. The Respondent is the state agency charged with the responsibility of administering license examinations. In September 1999, the results of the August 1999 examination were provided to Petitioner. The examination grade report advised Petitioner that he had failed two portions of the licensure examination. A candidate must pass all portions of the exam to become licensed. As to the clinical portion of the examination, the Petitioner challenged the results due to what he maintained were "discrepancies" in the grading system. As to each question challenged in the clinical portion, the Petitioner cited the differing grades from the two examiners as the basis for his dispute. When the Petitioner received credit for the question from one examiner, he believed he should have received credit from the second as well. The clinical portion of the exam was scored by two examiners who independently reviewed the candidate's work. Typically, the candidate for licensure indicates when the examiner is to evaluate the work by stating "grade me now." As to each task, the candidate receives two scores. The scores are added together and divided by two to reach the overall clinical score. Based upon when the candidate directs the examiner to grade, it is possible to receive conflicting results in the scoring process. It is the overall score that determines whether a candidate receives a passing grade on the clinical portion. According to Dr. Liebetreu, a marginal candidate may well be able to correctly perform the task for one examiner yet do so incorrectly for the second reviewer. The method of scoring therefore gives the marginal candidate some credit. As to the questions challenged in the pharmacological portion of the exam, the Petitioner argued that the questions were misleading or had multiple correct answers. Each question challenged offered one most correct answer that the Petitioner should have selected in order to receive full credit. The Petitioner has failed to established that the answers he provided were "more correct" than the ones used by the Respondent to grant credit. The photographs used in the examination were of sufficient quality to provide the candidate with appropriate views to answer questions. The questions challenged were not ambiguous or misleading. The candidates were provided adequate time to complete all portions of the examination. Persons scoring the Petitioner's work during the clinical portion of the exam were not permitted to confer. Their scores were to be based solely on the work they observed. The overall scores issued by persons scoring the Petitioner's work were within acceptable statistical standards.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health, Board of Optometry, enter a final order denying the Petitioner's challenge to the August 1999 examination. DONE AND ENTERED this 20th day of June, 2000, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 20th day of June, 2000. COPIES FURNISHED: Navin Singh, O.D., pro se 103 Knights Court Royal Palm Beach, Florida 33411 Amy M. Jones, Esquire Office of the General Counsel Department of Health 2020 Capital Circle Southeast, Bin A02 Tallahassee, Florida 32399-1703 Eric G. Walker, Executive Director Board of Optometry Department of Health 1940 North Monroe Street Tallahassee, Florida 32399-0750 William W. Large, General Counsel Department of Health 4052 Bald Cypress Way Bin A00 Tallahassee, Florida 32399-1701 Angela T. Hall, Agency Clerk Department of Health 2020 Capital Circle Southeast, Bin A02 Tallahassee, Florida 32399-1703
The Issue The issues for determination are: (1) whether Petitioner, Amr Sallam's, education meets the "substantially equivalent" criteria as set forth in Florida Administrative Code Rule 61G15-20.007; and, if so, (2) whether, by virtue of its reviews of Petitioner's education and the grounds listed in the two related previously issued notices of denial, Respondent, Board of Professional Engineers, is estopped from denying Petitioner's application.
Findings Of Fact Petitioner is an applicant to take the Fundamentals Examination. Unless an applicant is otherwise exempted, the Fundamentals Examination is the first of two examinations an applicant must pass to be licensed as a professional engineer in Florida. Prior to applying to take the Fundamentals Examination, on two previous occasions, Petitioner applied to take the Principles and Practice Examination, the second examination required for licensure as a professional engineer in Florida. Petitioner's Educational Credentials and Teaching Experience Petitioner received a bachelor's degree in engineering from Alexandria University in Egypt in 1994. Petitioner received a master's degree in engineering from Alexandria University in Egypt in 1998. Petitioner received a doctorate degree in engineering from the University of South Florida (USF) in Tampa, Florida, in 2004. After completing his undergraduate degree, Petitioner began teaching at Alexandria University. Petitioner taught there for seven years, including the time he was in the master's degree program. In 2002, prior to receiving his doctorate degree, Petitioner taught geotechnical engineering at USF, which has an engineering program that is accredited by the Accreditation Board for Engineering and Technology, Inc. (ABET). In the summer of 2006, after receiving his doctorate degree, Petitioner taught a geotechnical design course at the University of Central Florida (UCF). The engineering program at UCF is accredited by ABET. At the time of this proceeding, Petitioner was employed by an engineering company. However, until Petitioner is licensed as a professional engineer, he cannot get a promotion within that company. "Substantial Equivalency" Requirement for Applicants with Degrees from Foreign Institutions Florida Administrative Code Rule 61G15-20.0071/ requires that applicants for licensure as professional engineers, who have foreign degrees, document that the engineering program they completed is substantially equivalent to an ABET accredited engineering program. Pursuant to Rule 61G15-20.007(4), Petitioner obtained an evaluation of his education in Egypt through an evaluation service, Joseph Silny and Associates (Silny). The evaluation conducted by Silny was a course-by- course evaluation of Petitioner's academic credentials at Alexandria University, in relation to the United States courses and semester credit hours. However, the Silny evaluation was limited to courses that Petitioner took in order to earn his bachelor of science degree in civil engineering. The Silny evaluation did not have Petitioner's transcript from USF, and, thus, none of those courses was considered or included in that evaluation. Based upon a review of Petitioner's academic credentials from Alexandria University from 1989 to 1994, the Silny evaluation concluded that Petitioner's bachelor's degree in civil engineering was not substantially equivalent to such degrees earned at a regionally accredited institution of higher learning in the United States. Specifically, the Silny evaluation determined that Petitioner had 27.5 of the required 32 semester credit hours in the Mathematics and Basic Sciences area and 1.5 credits of the required 16 semester credit hours in the Humanities and Social Sciences area. To satisfy the requirements in Mathematics and Basic Sciences, the Silny evaluation indicated that Petitioner needed 4.5 semester credit hours, "including a course in probability and statistics and an additional course in either general chemistry or calculus-based physics." The Silny evaluation awarded Petitioner 1.5 semester credit hours in Humanities and Social Sciences based on an English course he completed during his undergraduate studies. To satisfy the requirement in this area, the Silny evaluation found that Petitioner needed an additional 14.5 semester credit hours. The Silny evaluation indicates that Petitioner took 5.5 semester credit hours in physics and lists the course as a one-class and not a two-class sequence. Although the Silny evaluation listed the physics course as one course, the credible testimony of Petitioner was that he took two classes, one after the other, to receive the 5.5 semester credit hours. Moreover, the credible testimony of both Petitioner and the Board's executive director was that they have never seen and are unaware of any physics course that offers 5.5 semester credit hours. Given this undisputed testimony, the weight of the evidence established that the 5.5 semester credit hours for physics were not for one physics course, but for a two-class sequence. Despite the deficiencies noted in the Silny evaluation, Petitioner was not concerned. First, with respect to the deficiencies cited in Mathematics and Basic Sciences, Petitioner knew that the Silny evaluation did not include a review of his transcript from USF, which showed six additional hours of higher mathematics. Second, when Petitioner applied to take the Principles and Practice Examination and his application was being considered, the Board's Rule 61G15-20.007(5) waived the Humanities and Social Sciences requirement for applicants, such as Petitioner, who had a post baccalaureate degree in engineering from a university in the United States that had an accredited undergraduate engineering degree program. The Silny evaluation report dated March 31, 2005, was advisory. Pursuant to Rule 61G15-20.007(3), the Board's Education Advisory Committee (EAC) makes the final decision regarding equivalency of programs and recommends to the Board whether an applicant should be approved for admittance to the examination. Petitioner's Initial Application Filed on April 2005 On April 14, 2005, Petitioner submitted his initial application to the Board. This application was to take the Principles and Practice Examination. At the time Petitioner submitted his initial application, he had not taken the Fundamentals Examination. The Silny evaluation was forwarded to and considered by the Board in its determination of whether Petitioner's bachelor's degree from Alexandria University was substantially equivalent to a degree from an ABET accredited engineering program at a regionally accredited institution of higher learning in the United States. Prior to the Board taking final action on Petitioner's initial application, Petitioner's educational credentials were reviewed by the Board's EAC. The EAC is responsible for reviewing and evaluating the educational credentials of applicants holding foreign degrees. Typically, members of the EAC are engineering educators who have special expertise in discerning and comparing education courses. Dr. Anderson was the evaluator for the EAC that considered Petitioner's educational credentials in connection with his April 2005 application. Dr. Anderson has a doctorate degree in engineering and has been in education for many years and testifies as an expert for the Board. Like the Silny evaluation, Dr. Anderson determined that in the Mathematics and Basic Sciences area, Petitioner had 27.5 semester credit hours from courses taken at Alexandria University. However, in addition to those 27.5 semester credit hours in Mathematics and Basic Sciences, Dr. Anderson also determined that Petitioner had an additional six semester credit hours for two, three-semester credit hours of mathematics courses he took at USF, as part of his doctorate degree program. These mathematics classes, Numerical Methods III and Vector Analysis III, were higher level courses. The EAC's July 2005 evaluation determined that Petitioner should receive credit for the higher level mathematics courses taken at USF. Dr. Anderson's evaluation determined that Petitioner had a total number of 33.5 semester credit hours in Mathematics and Basic Sciences (27.5 from Alexandria University and six from USF), 1.5 credits more than the required number. However, Dr. Anderson noted on the educational credential review form that to satisfy the Mathematics and Basic Sciences course requirement, Petitioner still needed to take a course in "Prob [Probability] and Stat [Statistics]." Initially, Dr. Anderson wrote on the educational credentials review form that to meet the Mathematics and Basic Sciences requirements, Petitioner "needs 4.5 hours of Math and Bas Sci [Basic Science], which must include a Prob [Probability] & Stat [Statistics] course and a second course in chem [Chemistry] and phy [Physics]." However, Dr. Anderson crossed out that entire statement and wrote that Petitioner "[n]eeds to take a course in Prob [Probability] & Stat [Statistics]." The EAC educational credentials review form listed the following courses in Humanities and Social Sciences for which Petitioner could be given credit: English, 1.5 credits; American Civilization, three credits; Introduction to Music, three credits; and The Family, three credits. Although Petitioner did not have the 16 semester credit hours required in Humanities and Social Sciences to document "substantial equivalency," the EAC determined that this was not an impediment to Petitioner's satisfying this requirement. On the educational credentials review form, in the Humanities and Social Sciences section, Dr. Anderson wrote, "Ph.D. 2004." This notation reflected the Board's Rule 61G15- 20.007(5), in effect when Petitioner submitted his application, which waived the Humanities and Social Science requirements for applicants who had a doctorate degree in engineering from an institution with an ABET accredited undergraduate engineering degree program. On July 13, 2005, Dr. Anderson and Gerry Miller, Ph.D., P.E., a Board member, signed a form on which they recommended that the Board deny Petitioner's application because he needed a course in probability and statistics. The Board accepted the EAC's determination regarding Petitioner's educational deficiencies and recommendation that Petitioner's April 2005 application be denied. By letter dated July 15, 2005, the Board denied Petitioner's application to take the Principles and Practice Examination. Petitioner received the letter by certified mail on August 1, 2005. The letter cited three reasons for the denial: (1) Petitioner's educational deficiencies; (2) his lack of engineering experience; and (3) his failure to take the Fundamentals Examination. With regard to educational deficiencies, the Board's letter stated only that Petitioner was deficient in Mathematics and Basic Sciences. The letter stated the basis of this determination and indicated how this deficiency could be satisfied, as follows: Based on the evaluation from JSA&A [Silny] and review for compliance with 61G15-20.007, Florida Administrative Code, it was determined that you [Petitioner] were deficient in the following areas: 1.0 semester credit hours in Mathematics & Basic Sciences-A course in Probability & Statistics is needed. Except for the deficiencies in Mathematics and Basic Sciences, the Board's July 15, 2005, letter indicated that Petitioner had satisfied the requirements in Rule 61G15-20.007. The letter expressly stated that Petitioner had "satisfied" the 16-semester credit hour requirement in Humanities and Social Sciences. According to the letter, the second reason Petitioner's application was denied was that he had not taken the Fundamentals Examination. The Board noted that Petitioner had applied for consideration of "waiving the Fundamentals Examination under Section 471.013(3)(d)[sic],"2/ but was ineligible for such waiver. In explaining the reason Petitioner was not entitled to a waiver, the letter stated the following: Section 471.013(3)(d),[sic][3/] F.S. addresses Licensure in Florida by examination requires Ph.D. waiver applicants to have an ABET accredited Ph.D., along with having taught full time for a minimum of three years, in order to qualify for the Fundamental Waiver. The teaching requirement has not been met, therefore, your waiver was denied. The denial letter explained that eligibility for waiver of the Fundamentals Examination required applicants to have a doctorate degree and three years of full-time teaching experience. However, the letter failed to state that waiver provisions required that the full-time teaching experience be after Petitioner received his doctorate degree. Third, and finally, the letter indicated that Petitioner's application was considered under Subsection 471.013(1)(a)1., Florida Statutes (2006), which requires four years of engineering experience. The letter stated, Your application was considered under the provision of Section 471.013(1)(a)1[.], Florida Statutes (F.S.). Under that provision, you receive credit of four (4) years for your degree, and you must verify four (4) years of engineering experience. The Board has determined that you do not evidence four years of experience at this time. Petitioner received the denial letter and assumed that the information contained therein was correct. In a Petition dated August 18, 2005, Petitioner responded to the Board's denial letter. In regard to his teaching experience, Petitioner indicated he had taught geotechnical engineering at USF for one year. He also indicated that prior to that, he taught Geotechnical Engineering I and II, college-level courses in Egypt for five years (from 1996 through 2001). Petitioner did not state whether these teaching positions were full-time or part-time, but the teaching experience in Egypt and at the USF was before he received his doctorate degree. In the Petition dated August 18, 2005, Petitioner also noted that based on his calculations, he had more than the four years of engineering experience required in Subsection 471.013(1)(a)1., Florida Statutes (2006). Rule 61G15-20.002 sets out the criteria for determining engineering experience. The mere assertions in the Petition did not establish that Petitioner had the prescribed engineering experience. Petitioner did not dispute that he needed a statistics course. Instead, in reliance on the Board's July 15, 2006, letter regarding his educational deficiencies, Petitioner enrolled in a three-semester credit hour statistics course at USF in August 2005. After Petitioner completed the statistics course in December 2005, a copy of the Petitioner's transcript reflecting such completion was sent to the Board. The Board's executive director testified that it was reasonable for Petitioner to rely on the July 15, 2005, denial letter. Had the July 15, 2005, denial letter indicated that Petitioner was missing any additional courses, he would have taken all such courses during the fall of 2005, the same semester he took the statistics class. Petitioner's Second Application Filed January 2006 In or about January 2006, after completing a three- semester credit hour statistics course, Petitioner submitted an application to the Board to take the Principles and Practice Examination. As of January 2006, Petitioner had never applied for or taken the Fundamentals Examination, although he did not meet the eligibility requirements to waive that examination. Specifically, he did not have at least three years of full-time teaching experience at the baccalaureate level or higher after receiving his doctorate degree. See § 471.013(1)(d), Fla. Stat. (2006). By letter dated March 29, 2006, the Board denied Petitioner's second application to take the Principles and Practice Examination. According to the Board's March 29, 2006, letter, Petitioner's application was considered under Subsection 471.013(1)(a) and (c), Florida Statutes (2006), but was denied because Petitioner lacked the requisite engineering experience and had not passed the Fundamentals Examination. The letter states in relevant part the following: Your application was considered for eligibility under Section 471.013(1)(a)[and](c), and [sic] Florida Statutes. Under these provisions, you receive credit of four (4) years for your degree. You must demonstrate 4 years of engineering experience and a passing score on the Fundamentals of Engineering exam. Your application was denied for failure to evidence having passed the NCEES 8 hour Fundamentals examination. Additionally, pursuant to Section [Rule] 61G15-20.002(11), F.A.C. you must evidence experience at the time of application. The Board has determined that you have not demonstrated four years of professional experience at the time of application. The Board's March 29, 2006, letter did not indicate that Petitioner had any educational deficiencies in the areas listed in Rule 61G15-20.007(2). After reading the March 29, 2006, letter, Petitioner was assured that his education had been approved, since no deficiencies were mentioned in the letter. Moreover, Petitioner had successfully completed the statistics course, which the denial letter dated July 15, 2005, indicated he needed to take to satisfy the Mathematics and Basic Sciences requirements.4/ Petitioner's Third Application Filed in April 2006 Relying on information in the March 29, 2006, letter, on or about April 19, 2006, Petitioner submitted an application to take the Fundamentals Examination. On or about May 17, 2006, the Board's EAC evaluated Petitioner's educational credentials and recorded information pertinent to its evaluation on an educational credential review form.5/ This evaluation was performed by Board members, Chris Bauer, Ph.D., P.E., and David Bloomquist, Ph.D., P.E. According to the form, the EAC used the Silny evaluation and transcripts from USF and the University of North Carolina for its course-by- course evaluation. Based upon its course-by-course evaluation, the EAC concluded that Petitioner's application should be denied because its review indicated the educational criterion is not substantially comparable to EAC/ABET and Rule 61G15-20.007. In the comment section of the May 17, 2006, educational credentials review form, the EAC noted that Petitioner needed 1.5 semester credit hours in Mathematics and Basic Sciences and 2.5 semester credit hours in Humanities and Social Sciences. The EAC specified that in Mathematics and Basic Sciences, Petitioner needed 1.5 hours in chemistry or physics "for sequence." No specific courses were listed as needed to satisfy the Humanities and Social Sciences requirements. The Board adopted the EAC's findings made on May 17, 2006, regarding Petitioner's educational deficiencies and also followed the EAC's recommendation that Petitioner's April 2006 application be denied. By letter dated May 18, 2006, the Board denied Petitioner's application to take the Fundamentals Examination based on a determination that Petitioner had educational deficiencies in Mathematics and Basic Sciences and in Humanities and Social Sciences. The letter stated that because Petitioner has a bachelor's degree from Egypt, the Board reviewed the Silny evaluation to determine substantial equivalency to EAC/ABET and compliance with Rule 61G15-20.007. With regard to the educational deficiencies, the Board's May 18, 2006, letter stated, in relevant part, the following: [Rule] 61G15-20.007, F.A.C., states that to document substantial equivalency to an ABET accredited engineering degree, the candidate must demonstrate: 32 semester credit hours in Mathematics and Basic Sciences - Deficient * * * 16 semester credit hours in Humanities and Social Sciences - Deficient * * * The areas of deficiencies noted above are identified as follows: 1. [Rule] 61G15-20.007, F.A.C. requires 32 semester credit hours of Mathematics & Basic Sciences. In reviewing the evaluation from Josep Silny & Associates [Silny]; [sic] the Board determined that you have evidenced 30.5 semester credit hours in Mathematic [sic] and Basic Sciences. You are deficient in 1.5 semester credit hours in Mathematics and Basic Sciences including a secondary course in Chemistry and/or Calculus based Physics. [5/] 2. Rule 61G15-20.007 requires 16 semester credit hours in Humanities and Social Sciences. You have evidenced 13.5 semester hours. In reviewing the evaluation from Josep Silny & Associates, the Board determined that you are deficient 2.5 semester credit hours in Humanities and Social Sciences. . . . The 13.5 semester credit hours in Humanities and Social Sciences was based on a 1.5-semester credit hour English class Petitioner took at Alexandria University and four, three- semester credit hour classes that were listed on a University of North Carolina transcript. The Board's May 18, 2006, letter denied Petitioner's application because it concluded that he was deficient by 1.5 semester credit hours in Mathematics and Basic Sciences, including a secondary course in chemistry and/or calculus-based physics and by 2.5 semester credit hours in Humanities and Social Sciences. The Board's determination, relative to Petitioner's educational deficiencies, in the May 18, 2006, letter is contrary and inconsistent with the Board's two prior decisions. In the first denial letter dated July 15, 2005, the Board ratified the EAC's July 13, 2005, educational credential review and decision, which determined that Petitioner needed one semester credit hour in Mathematics and Basic Sciences, including a probability and statistics course.7/ Prior to May 1, 2005, and when Petitioner initially applied to take the Principles and Practice Examination, Rule 61G15-20.007(5) waived the Humanities and Social Sciences requirements for applicants with post-baccalaureate degrees. The Board's March 29, 2006, letter did not indicate that Petitioner had any educational deficiencies, even though the waiver provision for Humanities and Social Sciences requirements was no longer in effect. According to the second denial letter, Petitioner's application was denied because he lacked the required engineering experience and had not passed the Fundamentals Examination. The deficiency in Mathematics and Basic Sciences noted in the Board's third denial letter dated May 18, 2006, was based on the Silny evaluation that indicated Petitioner was 4.5 semester credit hours short in Mathematics and Basic Sciences. After reducing the 4.5-semester credit hour deficiency by the three semester credit hours Petitioner earned in the statistics course, the Board concluded that Petitioner needed 1.5 semester credit hours in Mathematics and Basic Sciences. This calculation was erroneous in that Petitioner was not granted credit for two higher level mathematic courses he took at the USF as part of his doctorate program. These two courses, Numerical Methods III and Vector Analysis III, were each three semester credit hours. Therefore, Petitioner should have been given credit for an additional six semester credit hours. By appropriately giving Petitioner credit for 27.5 semester credit hours for courses completed at Alexandria University and three semester credit hours each for Numerical Methods III, Vector Analysis III, and Statistics, he has a total of 36.5 semester credit hours in Mathematics and Basic Sciences, 4.5 semester credit hours more than the 32 hours required. Deficiency in Humanities and Social Sciences is Discovered After May 2006 Denial Letter During this proceeding, the Board's executive director revealed that "sometime this past summer" (the summer of 2006), he discovered that an error had been made regarding Petitioner's credits/deficiencies in Humanities and Social Sciences. This error came to light after it was discovered that the Board had erroneously given Petitioner credit for four courses listed on a University of North Carolina transcript, which had been mistakenly placed in Petitioner's file. The four, three semester-hour courses for which Petitioner was given credit were English, American Civilization, The Family, and Introduction to Music. There was no evidence or testimony to indicate that Petitioner was responsible in any way for this "transcript" error. In fact, none of Petitioner's various applications to the Board listed the University of North Carolina as a school Petitioner ever attended. Petitioner acknowledged that he never attended the University of North Carolina or took any of the courses listed on that transcript. As noted on the Silny evaluation, Petitioner has completed only one course in the Humanities and Social Sciences area, the 1.5-semester credit hour English class he completed at Alexandria University. The waiver of Humanities and Social Sciences requirement for applicants with doctoral degrees is no longer in effect. That wavier provision was deleted from Rule 61G15- 20.007 pursuant to an amendment, which became effective on May 1, 2005. As a result of the transcript error, Petitioner has a deficiency of 14.5 semester credit hours in the Humanities and Social Sciences area, and not the 2.5-semester credit hour deficiency noted in the Board's May 18, 2006, letter. Therefore, Petitioner needs an additional 14.5 semester credit hours in appropriate courses to satisfy the Humanities and Social Sciences requirement. As of the date of this proceeding, the Board had not notified Petitioner of the mistake in its May 18, 2006, letter, regarding his deficiencies in Humanities and Social Sciences. Action on Petition for Formal Hearing Petitioner filed a Petition for Formal Hearing with Respondent on June 13, 2006. The Board held a duly-noticed meeting on July 26 and 27, 2006. Respondent did not act on the Petition for Formal Hearing. Thereafter, on July 30, 2006, Petitioner filed a Petition for Writ of Mandamus with the First District Court of Appeal. The Board did not advance any legitimate explanation as to why Petitioner's Petition for Formal Hearing filed six weeks prior to the July 26 and 27, 2006, meeting was not placed on that agenda. The Board's agendas are usually set about one month before the meeting. By letter dated August 24, 2006, the Board notified Petitioner that his Petition for Formal Hearing would be considered by the Board of Professional Engineers on October 26, 2006. On September 13, 2006, the First District Court of Appeal granted Petitioner's Petition for Writ of Mandamus and directed the Board to rule on the Petition for Formal Hearing within 15 days of the date of the Order. On or about September 25, 2006, the Board forwarded Petitioner's Petition for Formal Hearing to the Division of Administrative Hearings. This was more than three months after the Petition was filed with the Board.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent, Board of Professional Engineers, enter a final order which (1) finds that Petitioner has met the Mathematics and Basic Sciences requirement; (2) conditionally approves Petitioner's application to take the Fundamentals Examination in accordance with Florida Administrative Code Rule 61G15-21.007(5); and (3) allows Petitioner to take the Fundamentals Examination the next time it is administered. DONE AND ENTERED this 19th day of March, 2007, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 19th day of March, 2007.
The Issue The issue in the case is whether the application of Anne L. Kruppa (Petitioner) for a Florida Educator's Certificate should be denied for the reasons set forth in the Notice of Reasons issued on July 13, 2004, by Jim Horne, Commissioner of Education (Respondent).
Findings Of Fact By an application dated July 7, 2000, Petitioner applied for a teaching position with the Hillsborough County School District. In the application, the Petitioner identified her college degree as "B.S. Zoology" from the University of South Florida (USF). Above Petitioner's signature, the application states that Petitioner certified that the information provided on the application was "true and correct without any falsifications, omissions, or misleading statements of any kind whatsoever." The application contained a space where the date of Petitioner's college graduation was to be provided. Petitioner's application did not include a graduation date. A handwritten question mark appears in the space where the date was to be set forth. Petitioner was employed as a teacher by the Hillsborough County School District for the 2000-2001 school year. At the time of her employment, Petitioner was instructed to obtain her college transcript from USF and provide it to the Hillsborough County School District. The evidence establishes that Petitioner did not have a bachelor's degree in zoology from USF when she completed the employment application. By an application dated July 31, 2000, Petitioner applied for a Florida Educator's Certificate. In the application, Petitioner stated that she had received a bachelor's degree in zoology from USF in 1998. According to the application, by her signature, Petitioner certified that "all information pertaining to this application is true, correct, and complete." At the time of the certification application, Petitioner was directed to obtain her college transcript and provide it to the Florida Department of Education. The evidence establishes that Petitioner did not have a bachelor's degree in zoology from USF when she completed the certification application. By spring of 2001, Petitioner had not provided a transcript to either the Hillsborough County School District or to the Florida Department of Education. At that point, the Hillsborough County School District contacted USF to assist in obtaining Petitioner's transcript, at which time the district learned that Petitioner did not have a bachelor's degree. In April 2001, the Hillsborough County School District terminated Petitioner's employment because she could not obtain a Florida Educator's Certificate without a college degree, and the employment required such certification. After the termination of employment by the Hillsborough County School District, Petitioner worked with the Hillsborough County School District as a substitute teacher and attended Hillsborough Community College in the fall semester 2001. After completing a course at the community college, Petitioner received a bachelor's degree in zoology from USF on December 14, 2001, and returned to teaching full-time for the school district. The evidence establishes that prior to December 14, 2001, Petitioner did not have a bachelor's degree, contrary to the information set forth on her application for employment with the Hillsborough County School District or the application to obtain a Florida Educator's Certificate from the Florida Department of Education. At the hearing, Petitioner testified that at the time she filed the applications she believed that she had received her bachelor's degree from USF in the summer of 1997 after taking a course called Elementary Calculus II during the summer term. The USF summer term included three separate sessions. Session A and Session B were six-week terms. Session C, a ten- week term, is not at issue in this case. The records of the 1997 USF summer term indicate that the Petitioner was enrolled in "MAC 3234 Elem Clclus II" (Elementary Calculus II) during the Summer Session A. According to the transcript, she received an "F" in the course. Petitioner testified that she thought she had enrolled in the course for Summer Session B. Petitioner testified that she paid another person to attend the classes and take notes for Petitioner. Petitioner testified that Petitioner took "a bunch of the tests" and "was figuring I had roughly a B something in the course." The note-taker testified by deposition and recalled taking notes for Petitioner during July and August of 1997 for a fee of ten dollars per hour. There is no evidence that the note-taker took any tests. Classes for the 1997 USF Summer Session B commenced on June 30 and ended on August 8. Classes for the 1997 USF Summer Session A commenced on May 12 and ended on June 20. Petitioner testified that at some point after the summer session was completed, she saw the course instructor and spoke to him about her performance in the class. The instructor did not testify at the hearing. Petitioner testified that she did not receive her grade for Elementary Calculus II, but presumed that she had passed the course and received her degree. Review of Petitioner's USF transcript establishes that at various times Petitioner took courses identified as "MAC 3233 Elem Clclus I" (Elementary Calculus I) and "MAC 3234 Elem Clclus II" (Elementary Calculus II). Petitioner enrolled in Elementary Calculus I in the fall term of 1994, but withdrew. In the fall term of 1995, Petitioner re-enrolled in Elementary Calculus I and received a grade of "A." Petitioner first enrolled in Elementary Calculus II in the spring term of 1996 and received a grade of "F." Petitioner again enrolled in the course in the summer term of 1996 and received a grade of "D." In the fall term of 1996, Petitioner re-took the Elementary Calculus I course and received a grade of "F." Petitioner's testimony regarding her presumed performance in the summer 1997 course lacks credibility based on review of the transcript. Based on the performance in the referenced calculus courses, it is unlikely that Petitioner reasonably presumed without further inquiry that she passed the Elementary Calculus II course and received her degree after the summer term of 1997. Petitioner also testified that she believed her admission to the USF graduate school indicated that she had completed her undergraduate requirements, and that further inquiry was apparently not required. The Official Acceptance that was mailed to Petitioner and was required to be presented to USF officials in order to register for courses clearly states that the admission was "provisional." The Official Acceptance required that Petitioner submit to the graduate school her undergraduate transcript indicating that the degree had been conferred. Nothing provided to Petitioner by the USF graduate school indicated that the undergraduate degree had been awarded. Petitioner was in the USF graduate program for one semester and was enrolled for five classes, four of which were undergraduate-level classes. In the fifth class (identified as "EDF 6432 Fndtns Measrmnt") she received a grade of "F."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Jim Horne, as Commissioner of Education, enter a final order denying Petitioner's pending application for a Florida Educator's Certificate and providing that Petitioner may not reapply for such certification for a period of two years. DONE AND ENTERED this 17th day of September, 2004, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 17th day of September, 2004.
The Issue Whether the Education Practices Commission should revoke or suspend the Respondent's Florida teaching certificate, or impose any other penalty provided by law, for the violations alleged in an Administrative Complaint of November 9, 1993.
Findings Of Fact The Respondent. The Respondent, Melody Spruell, holds Florida teaching certificate number 334670. The certificate was issued by the Florida Department of Education and authorizes Ms. Spruell to work in the areas of English, Administration and Guidance Counseling. The certificate is valid through June 30, 1997. Ms. Spruell earned an undergraduate degree in English Education in 1972 from the University of Georgia. She also earned a masters degree in Administration and Supervision in 1977 and a masters degree in Guidance in 1982, from the University of North Florida. Ms. Spruell has completed the required course work toward a doctorate degree and is revising her dissertation. Ms. Spruell's doctorate work has been with the University of Florida. Ms. Spruell taught English from 1972 through 1985, and was on sabbatical leave from 1985 through 1986. Beginning with the 1986-1987 school year and ending in 1993, Ms. Spruell was employed at Terry Parker Senior High School (hereinafter referred to as "Terry Parker"), in the Duval County School District. Ms. Spruell was an English and Peer Counseling teacher during the 1986- 1987 school year. Since the 1987-1988 school year, Ms. Spruell has been a guidance counselor at Terry Parker. In February of 1990 Ms. Spruell was appointed as the head of the guidance department of Terry Parker. Ms. Spruell received very good evaluations from James H. Jaxon, Principal of Terry Parker from the 1990-1991 school year through the 1992-1993 school year. Charges Relating to Michael Christeas. During the 1991-1992 school year, Michael Christeas was a junior at Terry Parker. As the result of a conversation between Mr. Christeas and Ms. Spruell, Mr. Christeas did not believe that it was necessary that he take Algebra II in order to qualify for colleges that he was interested in attending after high school. Mr. Christeas played football at Terry Parker. During his senior year, the 1992-1993 school year, several universities expressed interest in Mr. Christeas playing football for them. At least one of the schools that was interested in Mr. Christeas informed him that he would need credit for Algebra II in order to qualify for admission. Mr. Christeas, based upon his understanding of Ms. Spruell's advice to him during his junior year, had not taken Algebra II during the first semester of his senior year. When he learned that some schools would require Algebra II, he so informed Ms. Spruell. During the periods of time relevant to this proceeding, Terry Parker operated on a semester schedule. The first semester of the 1992-1993 school year began August 25, 1992 and ended January 20, 1993. The second semester was began January 21, 1993 and ended June 9, 1993. The first semester was further divided into the first and second quarters: August 25, 1992 to October 28, 1992 was the first quarter, and October 29, 1992 to January 20, 1993 was the second quarter. The second semester was further divided into the third and fourth quarters: January 21, 1993 to March 26, 1993 was the third quarter, and March 30, 1993 to June 9, 1993 was the fourth quarter. Mr. Christeas' conversation with Ms. Spruell about needing Algebra II took place some time during the end of the second quarter/first semester. Ms. Spruell was concerned that she had misinformed Mr. Christeas about whether he needed to take Algebra. Therefore, Ms. Spruell offered to create a class just for him so that he could obtain credit for Algebra II. She led Mr. Christeas to believe that he would be awarded passing grades for the "class." She asked Mr. Christeas not to say anything about the class to anyone else. Ms. Spruell asked Doris K. Blanford, an Algebra teacher, if she would tutor Mr. Christeas during the rest of the first semester and then teach a one- on-one Algebra II course to Mr. Christeas during the second semester. Ms. Blanford agreed. During the first and second quarters, first semester, Mr. Christeas did not take Algebra II. While he was tutored some by Ms. Blanford a few days a week during the morning, neither Ms. Blanford or Mr. Christeas believed that he was taking Algebra II during the first semester. Ms. Blanford did not award Mr. Christeas any grade during the first semester. Nor did Mr. Christeas attend any "classes" with Ms. Blanford during the first semester of the 1992-1993 school year. On or about October 28, 1992, at the end of the first quarter, first semester, Mr. Christeas' report card did not indicate that he was taking Algebra II and did not include any grade for Algebra II or any class for the fifth period of the school day. See PE exhibit 2A. Mr. Christeas' class schedule as of January 15, 1993, indicated that Mr. Christeas was scheduled to take Law Studies during the fifth period. See PE exhibit 1A. Algebra II was not listed on the January 15, 1992 copy of Mr. Christeas' class schedule. On a class schedule of January 20, 1993, Mr. Christeas was inaccurately listed as taking an Algebra II class from Ms. Blanford during the fifth period of the first and second quarters of the first semester. PE exhibit 1B. Ms. Blanford did not teach Algebra II during the fifth period. Nor did she teach an Algebra II course to Mr. Christeas at any time. Ms. Spruell caused Mr. Christeas' schedule to reflect that he was taking Algebra II. On Mr. Christeas' report card issued on January 21, 1993, at the end of the second quarter, first semester, it incorrectly reflects that Mr. Christeas took Algebra II during both quarters and that he earned a grade of "C" during each quarter. Ms. Spruell caused Mr. Christeas to be awarded these grades. Mr. Christeas did not take or complete Algebra II during the second semester of the 1992-1993 school year. The time that Mr. Christeas spent with Ms. Blanford during the first and second semesters was sporadic and irregular. At some point during the second semester, Mr. Christeas quit coming to see Ms. Blanford. Despite having agreed to teach Mr. Christeas in a one-on-one "class" during the second semester, Ms. Blanford took no action when Mr. Christeas quit coming to see her. The alleged "class" was never disclosed to, or approved by, Mr. Jaxon or any other official of Terry Parker. At the request of Mr. Christeas, Ms. Spruell caused a "mid-year update" to be sent to a university on behalf of Mr. Christeas. In the update, Ms. Spruell stated: "Please note that his schedule reflects the grades for Algebra II which he added first quarter." This information was incorrect and is inconsistent with Ms. Spruell's explanation of her intent that Mr. Christeas only receive credit for Algebra II if he took a one-on-one class. Ms. Spruell knew that Mr. Christeas had not taken Algebra II during the first quarter. Mr. Jaxon became aware of the Algebra II "class" for Mr. Christeas during March of 1993. On or about March 5, 1993, before report cards for the third quarter were issued, Mr. Jaxon confronted Ms. Spruell. Mr. Jaxon had at least three meetings with Ms. Spruell concerning Mr. Christeas (hereinafter referred to as the "March Meetings"). Two of the March Meetings were also attended by Laurel Anderson, a Vice-Principal. During the first of the March Meetings, Ms. Spruell was confronted with PE exhibits 1 and 2. Ms. Spruell admitted that she had created the "class" for Mr. Christeas and that she had done so because he needed Algebra II to be considered for a football scholarship by some schools. According to Ms. Anderson, Ms. Spruell admitted that "it had been a foolish thing to do but that she was trying to best assist the student." During the second of the March Meetings, which was also attended by Mr. Christeas' mother, Ms. Spruell took sole responsibility for the incident. During the third of the March Meetings, Ms. Spruell indicated that Josephine Mary Howard, a Computer Clerk I, had added the Algebra II class for Mr. Christeas into the computer maintained at Terry Parker. Ms. Howard denied this assertion. During the March Meetings, Ms. Spruell admitted that: She had created a "class" in Algebra II for Mr. Christeas. The gist of her admission to Mr. Jaxon was that she had created the Algebra II class "on paper." She did so because Mr. Christeas needed Algebra II to get a football scholarship from some schools that were interested in him. She added the class to the computer at Terry Parker herself. She knew Ms. Blanford was meeting with Mr. Christeas but not for the required number of hours for a class at Terry Parker. She knew Ms. Blanford was not meeting with Mr. Christeas at the time scheduled for the class. She "had assigned grades herself for the first two grading periods." Page 170, lines 1-2, transcript of final hearing. See also page 184, lines 9-11, transcript of final hearing. She had prepared the mid-year report that indicated that Mr. Christeas was getting "Cs" in Algebra II. She said it was a "mistake." The explanation of the events surrounding Mr. Christeas which Ms. Spruell gave during the final hearing was not raised by Ms. Spruell at any time during the March Meetings. Ms. Spruell's explanation has been rejected. Paragraph J, Page 30, of the Duval County Public Schools' Pupil Progression Plan, Respondent's exhibit N, provides the "Criteria for Earning Credit/Student Evaluation." That paragraph provides the following: In order to earn standard course credit for a standard diploma and unless otherwise stated in this policy, each student, including those designated as exceptional, shall demonstrate mastery of the specific objectives for all required courses in which the student is enrolled, as determined by the teacher. This determination shall include the averaging of grade points derived from the student's performance on the applicable district-level criterion- referenced test for that required course. (Refer to Appendix F). Appropriate procedures shall be followed by teachers to observe and assess each student's performance continuously throughout the school year to determine if expected achievement standardso are being met (s232.2454, F.S.) Mastery of the specific objectives for all other courses in which the student is enrolled, as determined by the teacher, shall be the criterion for passing those courses and earning course credit. A mandatory final examination in each subject shall be given to all students and shall count as part of the student's classroom final average. Paragraph B, Page 39, of the Duval County Public Schools' Pupil Progression Plan, Respondent's exhibit N, provides the "Hourly Instructional Requirement for Credit." That paragraph provides the following: Hourly Instructional Requirement for Credit: Pursuant to s232.2462, F.S., for the purposes of requirements for high school graduation, one full credit means a minimum of 150 hours of bona fide instruction in a designated course of study. The hourly requirements for one-half the requirements specified for a full-credit (75 hours). Students in grades 9-12 shall be in attendance for 135 hours of instruction, unless they have demonstrated mastery of the student performance standards in the course of study as provided by school board rules. Unless otherwise provided by district school board rule, the difference between the 135 hour minimum requirement and the 150 hour definition of full credit may at the discretion of the secondary school principal be used for non-instructional extracurricular activities. Charges Relating to Amy Spruell. Amy Spruell is the daughter of the Respondent. Amy Spruell was a student at Terry Parker during the 1991-1992 school year. During the 1991-1992 school year Amy Spruell took Algebra II Honors and English Honors. Amy Spruell's teachers awarded her "Bs" in both classes. The permanent record of grades for Amy Spruell incorrectly reflects that she received an "A" in both courses. The change in Amy Spruell's grades from "Bs" to "As" took place some time after June 6, 1992. Ms. Spruell had access to the permanent computer record of grades and the knowledge of how to change grades on that record. The evidence failed to prove that Ms. Spruell changed her daughter's grades for Algebra II Honors or English Honors. Charges Relating to Vonda Callis. Between 1989 and 1990, Vonda Callis' permanent records were changed. A grade of "F" Ms. Callis had received in World History and General Math II was changed to "D". The evidence failed to prove who made the change in Ms. Callis' grades. Loss of Effectiveness. In light of Ms. Spruell's impropriety concerning Mr. Christeas, Ms. Spruell has lost her effectiveness as a teacher.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner enter a Final Order finding that Melody Spruell is guilty of the charges contained in the First, Second, Third, Fifth, Sixth, and Seventh Counts of the Administrative Complaint based upon the allegations of paragraphs 1, 2 and 3(a) and (b) of the Administrative Complaint. It is further RECOMMENDED that the Petitioner dismiss the charges contained in the Fourth and Eighth Counts of the Administrative Complaint based upon the allegations of paragraphs 1, 2 and 3(a) and (b) of the Administrative Complaint. It is further RECOMMENDED that the Petitioner dismiss the charges based upon the allegations of paragraphs 3(c) and (d) against Ms. Spruell. It is further RECOMMENDED that Ms. Spruell be issued a letter of reprimand, that her certificate be suspended for a period of two years and that she be placed on probation for a period of three years upon her reemployment. DONE AND ENTERED this 16th day of June, 1994, in Tallahassee, Florida. LARRY J. SARTIN 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 16th day of June, 1994. APPENDIX Case Number 93-6936 The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The EPC's Proposed Findings of Fact Accepted in 1. Accepted in 5 and 7. Accepted in 27 Accepted in 20. Accepted in 21. Accepted in 19. Accepted in 22. 8-9 Accepted in 21. Accepted in 18 and 23-24. Accepted in 11. Accepted in 9. Accepted in 10. Accepted in 16. Accepted in 17. Subordinate. See 11 and 16. Accepted in 16 and 22. Accepted in 18 and 24. Subordinate finding of fact. Not supported by the weigh of the evidence. See 42-43. Accepted in 42. Accepted in 37-38. Accepted in 37. Accepted in 38. Accepted in 37. Accepted in 40. 25-26 Accepted in 44. Ms. Spruell's Proposed Findings of Fact Accepted in 2-7 and hereby accepted. Not supported by the weight of the evidence. The portions of the Duval County Pupil Progression Plan referred to are taken out of context. See 18 and 21. Not supported by the weight of the evidence. See 16, 22 and 31. Accepted in 24 and hereby accepted. Not supported by the weight of the evidence. See 26. Although this proposed finding correctly summarizes some of Ms. Spruell's testimony, that testimony has been rejected. Accepted in 37-39. Hereby accepted except the proposed finding that Ms. Spruell did not go back to Parker until Summer School Graduation. See 4. The quotation is not relevant to this proceeding. Accepted in 43. Hereby accepted. Not supported by the weight of the evidence. 13-14 Hereby accepted. 15 Not supported by the weight of the evidence. COPIES FURNISHED: William H. Maness, Esquire 112 West Adams Street, Suite 808 Jacksonville, Florida 32202 Robert J. Boyd, Esquire Post Office Box 26 Tallahassee, Florida 32302 Karen B. Wilde Florida Department of Education The Florida Education Center Room 301 Tallahassee, Florida 32399 Jerry Moore, Administrator Professional Practices Services 352 Florida Education Center 325 West Gaines Street Tallahassee, Florida 32399-0400
The Issue At issue in this proceeding is whether proposed Florida Administrative Code Rule 69O-125.005 is an invalid exercise of delegated legislative authority.
Findings Of Fact Petitioners AIA is a trade association made up of 40 groups of insurance companies. AIA member companies annually write $6 billion in property, casualty, and automobile insurance in Florida. AIA's primary purpose is to represent the interests of its member insurance groups in regulatory and legislative matters throughout the United States, including Florida. NAMIC is a trade association consisting of 1,430 members, mostly mutual insurance companies. NAMIC member companies annually write $10 billion in property, casualty, and automobile insurance in Florida. NAMIC represents the interests of its member insurance companies in regulatory and legislative matters throughout the United States, including Florida. PCI is a national trade association of property and casualty insurance companies consisting of 1,055 members. PCI members include mutual insurance companies, stock insurance companies, and reciprocal insurers that write property and casualty insurance in Florida. PCI members annually write approximately $15 billion in premiums in Florida. PCI participated in the OIR's workshops on the Proposed Rule. PCI's assistant vice president and regional manager, William Stander, testified that if the Proposed Rule is adopted, PCI's member companies would be required either to withdraw from the Florida market or drastically reorganize their business model. FIC is an insurance trade association made up of 39 insurance groups that represent approximately 250 insurance companies writing all lines of insurance. All of FIC's members are licensed in Florida and write approximately $27 billion in premiums in Florida. FIC has participated in rule challenges in the past, and participated in the workshop and public hearing process conducted by OIR for this Proposed Rule. FIC President Guy Marvin testified that FIC's property and casualty members use credit scoring and would be affected by the Proposed Rule. A substantial number of Petitioners' members are insurers writing property and casualty insurance and/or motor vehicle insurance coverage in Florida. These members use credit-based insurance scoring in their underwriting and rating processes. They would be directly regulated by the Proposed Rule in their underwriting and rating methods and in the rate filing processes set forth in Sections 627.062 and 627.0651, Florida Statutes. Fair Isaac originated credit-based insurance scoring and is a leading provider of credit-based insurance scoring information in the United States and Canada. Fair Isaac has invested millions of dollars in the development and maintenance of its credit-based insurance models. Fair Isaac concedes that it is not an insurer and, thus, would not be directly regulated by the Proposed Rule. However, Fair Isaac would be directly affected by any negative impact that the Proposed Rule would have in setting limits on the use of credit-based insurance score models in Florida. Lamont Boyd, a manager in Fair Isaac's global scoring division, testified that if the Proposed Rule goes into effect Fair Isaac would, at a minimum, lose all of the revenue it currently generates from insurance companies that use its scores in the State of Florida, because Fair Isaac's credit-based insurance scoring model cannot meet the requirements of the Proposed Rule regarding racial, ethnic, and religious categorization. Mr. Boyd also testified that enactment of the Proposed Rule could cause a "ripple effect" of similar regulations in other states, further impairing Fair Isaac's business. The Statute and Proposed Rule During the 1990s, insurance companies' use of consumer credit information for underwriting and rating automobile and residential property insurance policies greatly increased. Insurance regulators expressed concern that the use of consumer credit reports, credit histories and credit-based insurance scoring models could have a negative effect on consumers' ability to obtain and keep insurance at appropriate rates. Of particular concern was the possibility that the use of credit scoring would particularly hurt minorities, people with low incomes, and young people, because those persons would be more likely to have poor credit scores. On September 19, 2001, Insurance Commissioner Tom Gallagher appointed a task force to examine the use of credit reports and develop recommendations for the Legislature or for the promulgation of rules regarding the use of credit scoring by the insurance industry. The task force met on four separate occasions throughout the state in 2001, and issued its report on January 23, 2002. The task force report conceded that the evidence supporting the negative impact of the use of credit reports on specific groups is "primarily anecdotal," and that the insurance industry had submitted anecdotal evidence to the contrary. Among its nine recommendations, the task force recommended the following: A comprehensive and independent investigation of the relationship between insurers' use of consumer credit information and risk of loss including the impact by race, income, geographic location and age. A prohibition against the use of credit reports as the sole basis for making underwriting or rating decisions. That insurers using credit as an underwriting or rating factor be required to provide regulators with sufficient information to independently verify that use. That insurers be required to send a copy of the credit report to those consumers whose adverse insurance decision is a result of their consumer credit information and a simple explanation of the specific credit characteristics that caused the adverse decision. That insurers not be permitted to draw a negative inference from a bad credit score that is due to medical bills, little or no credit information, or other special circumstances that are clearly not related to an applicant's or policyholder's insurability. That the impact of credit reports be mitigated by imposing limits on the weight that insurers can give to them in the decision to write a policy and limits on the amount the premium can be increased due to credit information. No evidence was presented that the "comprehensive and independent investigation" of insurers' use of credit information was undertaken by the Legislature. However, the other recommendations of the task force were addressed in Senate Bills 40A and 42A, enacted by the Legislature and signed by the governor on June 26, 2003. These companion bills, each with an effective date of January 1, 2004, were codified as Sections 626.9741 and 626.97411, Florida Statutes, respectively. Chapters 2003-407 and 2003-408, Laws of Florida. Section 626.9741, Florida Statutes, provides: The purpose of this section is to regulate and limit the use of credit reports and credit scores by insurers for underwriting and rating purposes. This section applies only to personal lines motor vehicle insurance and personal lines residential insurance, which includes homeowners, mobile home owners' dwelling, tenants, condominium unit owners, cooperative unit owners, and similar types of insurance. As used in this section, the term: "Adverse decision" means a decision to refuse to issue or renew a policy of insurance; to issue a policy with exclusions or restrictions; to increase the rates or premium charged for a policy of insurance; to place an insured or applicant in a rating tier that does not have the lowest available rates for which that insured or applicant is otherwise eligible; or to place an applicant or insured with a company operating under common management, control, or ownership which does not offer the lowest rates available, within the affiliate group of insurance companies, for which that insured or applicant is otherwise eligible. "Credit report" means any written, oral, or other communication of any information by a consumer reporting agency, as defined in the federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681 et seq., bearing on a consumer's credit worthiness, credit standing, or credit capacity, which is used or expected to be used or collected as a factor to establish a person's eligibility for credit or insurance, or any other purpose authorized pursuant to the applicable provision of such federal act. A credit score alone, as calculated by a credit reporting agency or by or for the insurer, may not be considered a credit report. "Credit score" means a score, grade, or value that is derived by using any or all data from a credit report in any type of model, method, or program, whether electronically, in an algorithm, computer software or program, or any other process, for the purpose of grading or ranking credit report data. "Tier" means a category within a single insurer into which insureds with substantially similar risk, exposure, or expense factors are placed for purposes of determining rate or premium. An insurer must inform an applicant or insured, in the same medium as the application is taken, that a credit report or score is being requested for underwriting or rating purposes. An insurer that makes an adverse decision based, in whole or in part, upon a credit report must provide at no charge, a copy of the credit report to the applicant or insured or provide the applicant or insured with the name, address, and telephone number of the consumer reporting agency from which the insured or applicant may obtain the credit report. The insurer must provide notification to the consumer explaining the reasons for the adverse decision. The reasons must be provided in sufficiently clear and specific language so that a person can identify the basis for the insurer's adverse decision. Such notification shall include a description of the four primary reasons, or such fewer number as existed, which were the primary influences of the adverse decision. The use of generalized terms such as "poor credit history," "poor credit rating," or "poor insurance score" does not meet the explanation requirements of this subsection. A credit score may not be used in underwriting or rating insurance unless the scoring process produces information in sufficient detail to permit compliance with the requirements of this subsection. It shall not be deemed an adverse decision if, due to the insured's credit report or credit score, the insured continues to receive a less favorable rate or placement in a less favorable tier or company at the time of renewal except for renewals or reunderwriting required by this section. (4)(a) An insurer may not request a credit report or score based upon the race, color, religion, marital status, age, gender, income, national origin, or place of residence of the applicant or insured. An insurer may not make an adverse decision solely because of information contained in a credit report or score without consideration of any other underwriting or rating factor. An insurer may not make an adverse decision or use a credit score that could lead to such a decision if based, in whole or in part, on: The absence of, or an insufficient, credit history, in which instance the insurer shall: Treat the consumer as otherwise approved by the Office of Insurance Regulation if the insurer presents information that such an absence or inability is related to the risk for the insurer; Treat the consumer as if the applicant or insured had neutral credit information, as defined by the insurer; Exclude the use of credit information as a factor and use only other underwriting criteria; Collection accounts with a medical industry code, if so identified on the consumer's credit report; Place of residence; or Any other circumstance that the Financial Services Commission determines, by rule, lacks sufficient statistical correlation and actuarial justification as a predictor of insurance risk. An insurer may use the number of credit inquiries requested or made regarding the applicant or insured except for: Credit inquiries not initiated by the consumer or inquiries requested by the consumer for his or her own credit information. Inquiries relating to insurance coverage, if so identified on a consumer's credit report. Collection accounts with a medical industry code, if so identified on the consumer's credit report Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the home mortgage industry and made within 30 days of one another, unless only one inquiry is considered. Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry and made within 30 days of one another, unless only one inquiry is considered. An insurer must, upon the request of an applicant or insured, provide a means of appeal for an applicant or insured whose credit report or credit score is unduly influenced by a dissolution of marriage, the death of a spouse, or temporary loss of employment. The insurer must complete its review within 10 business days after the request by the applicant or insured and receipt of reasonable documentation requested by the insurer, and, if the insurer determines that the credit report or credit score was unduly influenced by any of such factors, the insurer shall treat the applicant or insured as if the applicant or insured had neutral credit information or shall exclude the credit information, as defined by the insurer, whichever is more favorable to the applicant or insured. An insurer shall not be considered out of compliance with its underwriting rules or rates or forms filed with the Office of Insurance Regulation or out of compliance with any other state law or rule as a result of granting any exceptions pursuant to this subsection. A rate filing that uses credit reports or credit scores must comply with the requirements of s. 627.062 or s. 627.0651 to ensure that rates are not excessive, inadequate, or unfairly discriminatory. An insurer that requests or uses credit reports and credit scoring in its underwriting and rating methods shall maintain and adhere to established written procedures that reflect the restrictions set forth in the federal Fair Credit Reporting Act, this section, and all rules related thereto. (7)(a) An insurer shall establish procedures to review the credit history of an insured who was adversely affected by the use of the insured's credit history at the initial rating of the policy, or at a subsequent renewal thereof. This review must be performed at a minimum of once every 2 years or at the request of the insured, whichever is sooner, and the insurer shall adjust the premium of the insured to reflect any improvement in the credit history. The procedures must provide that, with respect to existing policyholders, the review of a credit report will not be used by the insurer to cancel, refuse to renew, or require a change in the method of payment or payment plan. (b) However, as an alternative to the requirements of paragraph (a), an insurer that used a credit report or credit score for an insured upon inception of a policy, who will not use a credit report or score for reunderwriting, shall reevaluate the insured within the first 3 years after inception, based on other allowable underwriting or rating factors, excluding credit information if the insurer does not increase the rates or premium charged to the insured based on the exclusion of credit reports or credit scores. The commission may adopt rules to administer this section. The rules may include, but need not be limited to: Information that must be included in filings to demonstrate compliance with subsection (3). Statistical detail that insurers using credit reports or scores under subsection (5) must retain and report annually to the Office of Insurance Regulation. Standards that ensure that rates or premiums associated with the use of a credit report or score are not unfairly discriminatory, based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence. Standards for review of models, methods, programs, or any other process by which to grade or rank credit report data and which may produce credit scores in order to ensure that the insurer demonstrates that such grading, ranking, or scoring is valid in predicting insurance risk of an applicant or insured. Section 626.97411, Florida Statutes, provides: Credit scoring methodologies and related data and information that are trade secrets as defined in s. 688.002 and that are filed with the Office of Insurance Regulation pursuant to a rate filing or other filing required by law are confidential and exempt from the provisions of s. 119.07(1) and s. 24(a), Art. I of the State Constitution.3 Following extensive rule development workshops and industry comment, proposed Florida Administrative Code Rule 69O-125.005 was initially published in the Florida Administrative Weekly, on February 11, 2005.4 The Proposed Rule states, as follows: 69O-125.005 Use of Credit Reports and Credit Scores by Insurers. For the purpose of this rule, the following definitions apply: "Applicant", for purposes of Section 626.9741, F.S., means an individual whose credit report or score is requested for underwriting or rating purposes relating to personal lines motor vehicle or personal lines residential insurance and shall not include individuals who have merely requested a quote. "Credit scoring methodology" means any methodology that uses credit reports or credit scores, in whole or in part, for underwriting or rating purposes. "Data cleansing" means the correction or enhancement of presumed incomplete, incorrect, missing, or improperly formatted information. "Personal lines motor vehicle" insurance means insurance against loss or damage to any motorized land vehicle or any loss, liability, or expense resulting from or incidental to ownership, maintenance or use of such vehicle if the contract of insurance shows one or more natural persons as named insureds. The following are not included in this definition: Vehicles used as public livery or conveyance; Vehicles rented to others; Vehicles with more than four wheels; Vehicles used primarily for commercial purposes; and Vehicles with a net vehicle weight of more than 5,000 pounds designed or used for the carriage of goods (other than the personal effects of passengers) or drawing a trailer designed or used for the carriage of such goods. The following are specifically included, inter alia, in this definition: Motorcycles; Motor homes; Antique or classic automobiles; and Recreational vehicles. "Unfairly discriminatory" means that adverse decisions resulting from the use of a credit scoring methodology disproportionately affects persons belonging to any of the classes set forth in Section 626.9741(8)(c), F.S. Insurers may not use any credit scoring methodology that is unfairly discriminatory. The burden of demonstrating that the credit scoring methodology is not unfairly discriminatory is upon the insurer. An insurer may not request or use a credit report or credit score in its underwriting or rating method unless it maintains and adheres to established written procedures that reflect the restrictions set forth in the federal Fair Credit Reporting Act, Section 626.9741, F.S., and these rules. Upon initial use or any change in that use, insurers using credit reports or credit scores for underwriting or rating personal lines residential or personal lines motor vehicle insurance shall include the following information in filings submitted pursuant to Section 627.062 or 627.0651, F.S. A listing of the types of individuals whose credit reports or scores the company will use or attempt to use to underwrite or rate a given policy. For example: Person signing application; Named insured or spouse; and All listed operators. How those individual reports or scores will be combined if more than one is used. For example: Average score used; Highest score used. The name(s) of the consumer reporting agencies or any other third party vendors from which the company will obtain or attempt to obtain credit reports or scores. Precise identifying information specifying or describing the credit scoring methodology, if any, the company will use including: Common or trade name; Version, subtype, or intended segment of business the system was designed for; and Any other information needed to distinguish a particular credit scoring methodology from other similar ones, whether developed by the company or by a third party vendor. The effect of particular scores or ranges of scores (or, for companies not using scores, the effect of particular items appearing on a credit report) on any of the following as applicable: Rate or premium charged for a policy of insurance; Placement of an insured or applicant in a rating tier; Placement of an applicant or insured in a company within an affiliated group of insurance companies; Decision to refuse to issue or renew a policy of insurance or to issue a policy with exclusions or restrictions or limitations in payment plans. The effect of the absence or insufficiency of credit history (as referenced in Section 626.9741(4)(c)1., F.S.) on any items listed in paragraph (e) above. The manner in which collection accounts identified with a medical industry code (as referenced in Section 626.9741(4)(c)2., F.S.) on a consumer's credit report will be treated in the underwriting or rating process or within any credit scoring methodology used. The manner in which collection accounts that are not identified with a medical industry code, but which an applicant or insured demonstrates are the direct result of significant and extraordinary medical expenses, will be treated in the underwriting or rating process or within any credit scoring methodology used. The manner in which the following will be treated in the underwriting or rating process, or within any credit scoring methodology used: Credit inquiries not initiated by the consumer; Requests by the consumer for the consumer's own credit information; Multiple lender inquiries, if coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry or the home mortgage industry and made within 30 days of one another; Multiple lender inquiries that are not coded by the consumer reporting agency on the consumer's credit report as being from the automobile lending industry or the home mortgage industry and made within 30 days of one another, but that an applicant or insured demonstrates are the direct result of such inquiries; Inquiries relating to insurance coverage, if so identified on a consumer's credit report; and Inquiries relating to insurance coverage that are not so identified on a consumer's credit report, but which an applicant or insured demonstrates are the direct result of such inquiries. The list of all clear and specific primary reasons that may be cited to the consumer as the basis or explanation for an adverse decision under Section 626.9741(3), F.S. and the criteria determining when each of those reasons will be so cited. A description of the process that the insurer will use to correct any error in premium charged the insured, or in underwriting decision made concerning the insured, if the basis of the premium charged or the decision made is a disputed item that is later removed from the credit report or corrected, provided that the insured first notifies the insurer that the item has been removed or corrected. A certification that no use of credit reports or scores in rating insurance will apply to any component of a rate or premium attributed to hurricane coverage for residential properties as separately identified in accordance with Section 627.0629, F.S. Insurers desiring to make adverse decisions for personal lines motor vehicle policies or personal lines residential policies based on the absence or insufficiency of credit history shall either: Treat such consumers or applicants as otherwise approved by the Office of Insurance Regulation if the insurer presents information that such an absence or inability is related to the risk for the insurer and does not result in a disparate impact on persons belonging to any of the classes set forth in Section 626.9741(8)(c), This information will be held as confidential if properly so identified by the insurer and eligible under Section 626.9711, F.S. The information shall include: Data comparing experience for each category of those with absent or insufficient credit history to each category of insureds separately treated with respect to credit and having sufficient credit history; A statistically credible method of analysis that concludes that the relationship between absence or insufficiency and the risk assumed is not due to chance; A statistically credible method of analysis that concludes that absence or insufficiency of credit history does not disparately impact persons belonging to any of the classes set forth in Section 626.9741(8)(c), F.S.; A statistically credible method of analysis that confirms that the treatment proposed by the insurer is quantitatively appropriate; and Statistical tests establishing that the treatment proposed by the insurer is warranted for the total of all consumers with absence or insufficiency of credit history and for at least two subsets of such consumers. Treat such consumers as if the applicant or insured had neutral credit information, as defined by the insurer. Should an insurer fail to specify a definition, neutral is defined as the average score that a stratified random sample of consumers or applicants having sufficient credit history would attain using the insurer's credit scoring methodology; or Exclude credit as a factor and use other criteria. These other criteria must be specified by the insurer and must not result in average treatment for the totality of consumers with an absence of or insufficiency of credit history any less favorable than the treatment of average consumers or applicants having sufficient credit history. Insurers desiring to make adverse decisions for personal lines motor vehicle or personal lines residential insurance based on information contained in a credit report or score shall file with the Office information establishing that the results of such decisions do not correlate so closely with the zip code of residence of the insured as to constitute a decision based on place of residence of the insured in violation of Section 626.9741(4)(c)(3), F.S. (7)(a) Insurers using credit reports or credit scores for underwriting or rating personal lines residential or personal lines motor vehicle insurance shall develop, maintain, and adhere to written procedures consistent with Section 626.9741(4)(e), F.S. providing appeals for applicants or insureds whose credit reports or scores are unduly influenced by dissolution of marriage, death of a spouse, or temporary loss of employment. (b) These procedures shall be subject to examination by the Office at any time. (8)(a)1. Insurers using credit reports or credit scoring in rating personal lines motor vehicle or personal lines residential insurance shall develop, maintain, and adhere to written procedures to review the credit history of an insured who was adversely affected by such use at initial rating of the policy or subsequent renewal thereof. These procedures shall be subject to examination by the Office at any time. The procedures shall comply with the following: A review shall be conducted: No later than 2 years following the date of any adverse decision, or Any time, at the request of the insured, but no more than once per policy period without insurer assent. The insurer shall notify the named insureds annually of their right to request the review in (II) above. Renewal notices issued 120 days or less after the effective date of this rule are not included in this requirement. The insurer shall adjust the premium to reflect any improvement in credit history no later than the first renewal date that follows a review of credit history. The renewal premium shall be subject to other rating factors lawfully used by the insurer. The review shall not be used by the insurer to cancel, refuse to renew, or require a change in the method of payment or payment plan based on credit history. (b)1. As an alternative to the requirements in paragraph (8)(a), insurers using credit reports or scores at the inception of a policy but not for re-underwriting shall develop, maintain, and adhere to written procedures. These procedures shall be subject to examination by the Office at any time. The procedures shall comply with the following: Insureds shall be reevaluated no later than 3 years following policy inception based on allowable underwriting or rating factors, excluding credit information. The rate or premium charged to an insured shall not be greater, solely as a result of the reevaluation, than the rate or premium charged for the immediately preceding policy term. This shall not be construed to prohibit an insurer from applying regular underwriting criteria (which may result in a greater premium) or general rate increases to the premium charged. For insureds that received an adverse decision notification at policy inception, no residual effects of that adverse decision shall survive the reevaluation. This means that the reevaluation must be complete enough to make it possible for insureds adversely impacted at inception to attain the lowest available rate for which comparable insureds are eligible, considering only allowable underwriting or rating factors (excluding credit information) at the time of the reevaluation. No credit scoring methodology shall be used for personal lines motor vehicle or personal lines residential property insurance unless that methodology has been demonstrated to be a valid predictor of the insurance risk to be assumed by an insurer for the applicable type of insurance. The demonstration of validity detailed below need only be provided with the first rate, rule, or underwriting guidelines filing following the effective date of this rule and at any time a change is made in the credit scoring methodology. Other such filings may instead refer to the most recent prior filing containing a demonstration. Information supplied in the context of a demonstration of validity will be held as confidential if properly so identified by the insurer and eligible under Section 626.9711, F.S. A demonstration of validity shall include: A listing of the persons that contributed substantially to the development of the most current version of the method, including resumes of the persons, if obtainable, indicating their qualifications and experience in similar endeavors. An enumeration of all data cleansing techniques that have been used in the development of the method, which shall include: The nature of each technique; Any biases the technique might introduce; and The prevalence of each type of invalid information prior to correction or enhancement. All data that was used by the model developers in the derivation and calibration of the model parameters. Data shall be in sufficient detail to permit the Office to conduct multiple regression testing for validation of the credit scoring methodology. Data, including field definitions, shall be supplied in electronic format compatible with the software used by the Office. Statistical results showing that the model and parameters are predictive and not overlapping or duplicative of any other variables used to rate an applicant to such a degree as to render their combined use actuarially unsound. Such results shall include the period of time for which each element from a credit report is used. A precise listing of all elements from a credit report that are used in scoring, and the formula used to compute the score, including the time period during which each element is used. Such listing is confidential if properly so identified by the insurer. An assessment by a qualified actuary, economist, or statistician (whether or not employed by the insurer) other than persons who contributed substantially to the development of the credit scoring methodology, concluding that there is a significant statistical correlation between the scores and frequency or severity of claims. The assessment shall: Identify the person performing the assessment and show his or her educational and professional experience qualifications; and Include a test of robustness of the model, showing that it performs well on a credible validation data set. The validation data set may not be the one from which the model was developed. Documentation consisting of statistical testing of the application of the credit scoring model to determine whether it results in a disproportionate impact on the classes set forth in Section 626.9741(8)(c), A model that disproportionately affects any such class of persons is presumed to have a disparate impact and is presumed to be unfairly discriminatory. Statistical analysis shall be performed on the current insureds of the insurer using the proposed credit scoring model, and shall include the raw data and detailed results on each classification set forth in Section 626.9741(8)(c), F.S. In lieu of such analysis insurers may use the alternative in 2. below. Alternatively, insurers may submit statistical studies and analyses that have been performed by educational institutions, independent professional associations, or other reputable entities recognized in the field, that indicate that there is no disproportionate impact on any of the classes set forth in Section 626.9741(8)(c), F.S. attributable to the use of credit reports or scores. Any such studies or analyses shall have been done concerning the specific credit scoring model proposed by the insurer. The Office will utilize generally accepted statistical analysis principles in reviewing studies submitted which support the insurer's analysis that the credit scoring model does not disproportionately impact any class based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence. The Office will permit reliance on such studies only to the extent that they permit independent verification of the results. The testing or validation results obtained in the course of the assessment in paragraphs (d) and (f) above. Internal Insurer data that validates the premium differentials proposed based on the scores or ranges of scores. Industry or countrywide data may be used to the extent that the Florida insurer data lacks credibility based upon generally accepted actuarial standards. Insurers using industry or countrywide data for validation shall supply Florida insurer data and demonstrate that generally accepted actuarial standards would allow reliance on each set of data to the extent the insurer has done so. Validation data including claims on personal lines residential insurance policies that are the result of acts of God shall not be used unless such acts occurred prior to January 1, 2004. The mere copying of another company's system will not fulfill the requirement to validate proposed premium differentials unless the filer has used a method or system for less than 3 years and demonstrates that it is not cost effective to retrospectively analyze its own data. Companies under common ownership, management, and control may copy to fulfill the requirement to validate proposed premium differentials if they demonstrate that the characteristics of the business to be written by the affiliate doing the copying are sufficiently similar to the affiliate being copied to presume common differentials will be accurate. The credibility standards and any judgmental adjustments, including limitations on effects, that have been used in the process of deriving premium differentials proposed and validated in paragraph (i) above. An explanation of how the credit scoring methodology treats discrepancies in the information that could have been obtained from different consumer reporting agencies: Equifax, Experian, or TransUnion. This shall not be construed to require insurers to obtain multiple reports for each insured or applicant. 1. The date that each of the analyses, tests, and validations required in paragraphs (d) through (j) above was most recently performed, and a certification that the results continue to be applicable. 2. Any item not reviewed in the previous 5 years is unacceptable. Specific Authority 624.308(1), 626.9741(8) FS. Law Implemented 624.307(1), 626.9741 FS. History-- New . The Petition 1. Statutory Definitions of "Unfairly Discriminatory" The main issue raised by Petitioners is that the Proposed Rule's definition of "unfairly discriminatory," and those portions of the Proposed Rule that rely on this definition, are invalid because they are vague, and enlarge, modify, and contravene the provisions of the law implemented and other provisions of the insurance code. Section 626.9741, Florida Statutes, does not define "unfairly discriminatory." Subsection 626.9741(5), Florida Statutes, provides that a rate filing using credit reports or scores "must comply with the requirements of s. 627.062 or s. 627.0651 to ensure that rates are not excessive, inadequate, or unfairly discriminatory." Subsection 626.9741(8)(c), Florida Statutes, provides that the FSC may adopt rules, including standards to ensure that rates or premiums "associated with the use of a credit report or score are not unfairly discriminatory, based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence." Chapter 627, Part I, Florida Statutes, is referred to as the "Rating Law." § 627.011, Fla. Stat. The purpose of the Rating Law is to "promote the public welfare by regulating insurance rates . . . to the end that they shall not be excessive, inadequate, or unfairly discriminatory." § 627.031(1)(a), Fla. Stat. The Rating Law provisions referenced by Subsection 626.9741(5), Florida Statutes, in relation to ensuring that rates are not "unfairly discriminatory" are Sections 627.062 and 627.0651, Florida Statutes. Section 627.062, Florida Statutes, titled "Rate standards," provides that "[t]he rates for all classes of insurance to which the provisions of this part are applicable shall not be excessive, inadequate, or unfairly discriminatory." § 627.062(1), Fla. Stat. Subsection 627.062(2)(e)6., Florida Statutes, provides: A rate shall be deemed unfairly discriminatory as to a risk or group of risks if the application of premium discounts, credits, or surcharges among such risks does not bear a reasonable relationship to the expected loss and expense experience among the various risks. Section 627.0651, Florida Statutes, titled "Making and use of rates for motor vehicle insurance," provides, in relevant part: One rate shall be deemed unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the difference in expected losses and expenses. Rates are not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expense factors, or like expense factors but different loss exposures, so long as rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if averaged broadly among members of a group; nor are rates unfairly discriminatory even though they are lower than rates for nonmembers of the group. However, such rates are unfairly discriminatory if they are not actuarially measurable and credible and sufficiently related to actual or expected loss and expense experience of the group so as to assure that nonmembers of the group are not unfairly discriminated against. Use of a single United States Postal Service zip code as a rating territory shall be deemed unfairly discriminatory. Petitioners point out that each of these statutory examples describing "unfairly discriminatory" rates has an actuarial basis, i.e., rates must be related to the actual or expected loss and expense factors for a given group or class, rather than any extraneous factors. If two risks have the same expected losses and expenses, the insurer must charge them the same rate. If the risks have different expected losses and expenses, the insurer must charge them different rates. Michael Miller, Petitioners' expert actuary, testified that the term "unfairly discriminatory" has been used in the insurance industry for well over 100 years and has always had this cost-based definition. Mr. Miller is a fellow of the Casualty Actuarial Society ("CAS"), a professional organization whose purpose is the advancement of the body of knowledge of actuarial science, including the promulgation of industry standards and a code of professional conduct. Mr. Miller was chair of the CAS ratemaking committee when it developed the CAS "Statement of Principles Regarding Property and Casualty Insurance Ratemaking," a guide for actuaries to follow when establishing rates.5 Principle 4 of the Statement of Principles provides: "A rate is reasonable and not excessive, inadequate, or unfairly discriminatory if it is an actuarially sound estimate of the expected value of all future costs associated with an individual risk." In layman's terms, Mr. Miller explained that different types of risks are reflected in a rate calculation. To calculate the expected cost of a given risk, and thus the rate to be charged, the insurer must determine the expected losses for that risk during the policy period. The loss portion reflects the risk associated with an occurrence and the severity of a claim. While the loss portion does not account for the entirety of the rate charged, it is the most important in terms of magnitude. Mr. Miller cautioned that the calculation of risk is a quantification of expected loss, but not an attempt to predict who is going to have an accident or make a claim. There is some likelihood that every insured will make a claim, though most never do, and this uncertainty is built into the incurred loss portion of the rate. No single risk factor is a complete measure of a person's likelihood of having an accident or of the severity of the ensuing claim. The prediction of losses is determined through a risk classification plan that take into consideration many risk factors (also called rating factors) to determine the likelihood of an accident and the extent of the claim. As to automobile insurance, Mr. Miller listed such risk factors as the age, gender, and marital status of the driver, the type, model and age of the car, the liability limits of the coverage, and the geographical location where the car is garaged. As to homeowners insurance, Mr. Miller listed such risk factors as the location of the home, its value and type of construction, the age of the utilities and electrical wiring, and the amount of insurance to be carried. 2. Credit Scoring as a Rating Factor In the current market, the credit score of the applicant or insured is a rating factor common to automobile and homeowners insurance. Subsection 626.9741(2)(c), Florida Statutes, defines "credit score" as follows: a score, grade, or value that is derived by using any or all data from a credit report in any type of model, method, or program, whether electronically, in an algorithm, computer software or program, or any other process, for the purpose of grading or ranking credit report data. "Credit scores" (more accurately termed "credit-based insurance scores") are derived from credit data that have been found to be predictive of a loss. Lamont Boyd, Fair Isaac's insurance market manager, explained the manner in which Fair Isaac produced its credit scoring model. The company obtained information from various insurance companies on millions of customers. This information included the customers' names, addresses, and the premiums earned by the companies on those policies as well as the losses incurred. Fair Isaac next requested the credit reporting agencies to review their archived files for the credit information on those insurance company customers. The credit agencies matched the credit files with the insurance customers, then "depersonalized" the files so that there was no way for Fair Isaac to know the identity of any particular customer. According to Mr. Lamont, the data were "color blind" and "income blind." Fair Isaac's analysts took these files from the credit reporting agencies and studied the data in an effort to find the most predictive characteristics of future loss propensity. The model was developed to account for all the predictive characteristics identified by Fair Isaac's analysts, and to give weight to those characteristics in accordance to their relative accuracy as predictors of loss. Fair Isaac does not directly sell its credit scores to insurance companies. Rather, Fair Isaac's models are implemented by the credit reporting agencies. When an insurance company wants Fair Isaac's credit score, it purchases access to the model's results from the credit reporting agency. Other vendors offer similar credit scoring models to insurance companies, and in recent years, some insurance companies have developed their own scoring models. Several academic studies of credit scoring were admitted and discussed at the final hearing in these cases. There appears to be no serious debate that credit scoring is a valid and important predictor of losses. The controversy over the use of credit scoring arises over its possible "unfairly discriminatory" impact "based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence." § 626.9741(8)(c), Fla. Stat. Mr. Miller was one of two principal authors of a June 2003 study titled, "The Relationship of Credit-Based Insurance Scores to Private Passenger Automobile Insurance Loss Propensity." This study was commissioned by several insurance industry trade organizations, including AIA and NAMIC. The study addressed three questions: whether credit-based insurance scores are related to the propensity for loss; whether credit- based insurance scores measure risk that is already measured by other risk factors; and what is the relative importance to accurate risk assessment of the use of credit-based insurance scores. The study was based on a nationwide random sample of private passenger automobile policy and claim records. Records from all 50 states were included in roughly the same proportion as each state's registered motor vehicles bear to total registered vehicles in the United States. The data samples were provided by seven insurers, and represented approximately 2.7 million automobiles, each insured for 12 months.6 The study examined all major automobile coverages: bodily injury liability, property damage liability, medical payments coverage, personal injury protection coverage, comprehensive coverage, and collision coverage. The study concluded that credit-based insurance scores were correlated with loss propensity. The study found that insurance scores overlap to some degree with other risk factors, but that after fully accounting for the overlaps, insurance scores significantly increase the accuracy of the risk assessment process. The study found that, for each of the six automobile coverages examined, insurance scores are among the three most important risk factors.7 Mr. Miller's study did not examine the question of causality, i.e., why credit-based insurance scores are predictive of loss propensity. Dr. Patrick Brockett testified for Petitioners as an expert in actuarial science, risk management and insurance, and statistics. Dr. Brockett is a professor in the departments of management science and information systems, finance, and mathematics at the University of Texas at Austin. He occupies the Gus S. Wortham Memorial Chair in Risk Management and Insurance, and is the director of the university's risk management and insurance program. Dr. Brockett is the former director of the University of Texas' actuarial science program and continues to direct the study of students seeking their doctoral degrees in actuarial science. His areas of academic research are actuarial science, risk management and insurance, statistics, and general quantitative methods in business. Dr. Brockett has written more than 130 publications, most of which relate to actuarial science and insurance. He has spent his entire career in academia, and has never been employed by an insurance company. In 2002, Lieutenant Governor Bill Ratliff of Texas asked the Bureau of Business Research ("BBR") of the University of Texas' McCombs School of Business to provide an independent, nonpartisan study to examine the relationship between credit history and insurance losses in automobile insurance. Dr. Brockett was one of four named authors of this BBR study, issued in March 2003 and titled, "A Statistical Analysis of the Relationship between Credit History and Insurance Losses." The BBR research team solicited data from insurance companies representing the top 70 percent of the automobile insurers in Texas, and compiled a database of more than 173,000 automobile insurance policies from the first quarter of 1998 that included the following 12 months' premium and loss history. ChoicePoint was then retained to match the named insureds with their credit histories and to supply a credit score for each insured person. The BBR research team then examined the credit score and its relationship with prospective losses for the insurance policy. The results were summarized in the study as follows: Using logistic and multiple regression analyses, the research team tested whether the credit score for the named insured on a policy was significantly related to incurred losses for that policy. It was determined that there was a significant relationship. In general, lower credit scores were associated with larger incurred losses. Next, logistic and multiple regression analyses examined whether the revealed relationship between credit score and incurred losses was explainable by existing underwriting variables, or whether the credit score added new information about losses not contained in the existing underwriting variables. It was determined that credit score did yield new information not contained in the existing underwriting variables. What the study does not attempt to explain is why credit scoring adds significantly to the insurer's ability to predict insurance losses. In other words, causality was not investigated. In addition, the research team did not examine such variables as race, ethnicity, and income in the study, and therefore this report does not speculate about the possible effects that credit scoring may have in raising or lowering premiums for specific groups of people. Such an assessment would require a different study and different data. At the hearing, Dr. Brockett testified that the BBR study demonstrated a "strong and significant relationship between credit scoring and incurred losses," and that credit scoring retained its predictive power even after the other risk variables were accounted for. Dr. Brockett further testified that credit scoring has a disproportionate effect on the classifications of age and marital status, because the very young tend to have credit scores that are lower than those of older people. If the question is simply whether the use of credit scores will have a greater impact on the young and the single, the answer would be in the affirmative. However, Dr. Brockett also noted that young, single people will also have higher losses than older, married people, and, thus, the use of credit scores is not "unfairly discriminatory" in the sense that term is employed in the insurance industry.8 Mr. Miller testified that nothing in the actuarial standards of practice requires that a risk factor be causally related to a loss. The Actuarial Standards Board's Standard of Practice 12,9 dealing with risk classification, states that a risk factor is appropriate for use if there is a demonstrated relationship between the risk factor and the insurance losses, and that this relationship may be established by statistical or other mathematical analysis of data. If the risk characteristic is shown to be related to an expected outcome, the actuary need not establish a cause-and-effect relationship between the risk characteristic and the expected outcome. As an example, Mr. Miller offered the fact that past automobile accidents do not cause future accidents, although past accidents are predictive of future risk. Past traffic violations, the age of the driver, the gender of the driver, and the geographical location are all risk factors in automobile insurance, though none of these factors can be said to cause future accidents. They help insurers predict the probability of a loss, but do not predict who will have an accident or why the accident will occur. Mr. Miller opined that credit scoring is a similar risk factor. It is demonstrably significant as a predictor of risk, though there is no causal relationship between credit scores and losses and only an incomplete understanding of why credit scoring works as a predictor of loss. At the hearing, Dr. Brockett discussed a study that he has co-authored with Linda Golden, a business professor at the University of Texas at Austin. Titled "Biological and Psychobehavioral Correlates of Risk Taking, Credit Scores, and Automobile Insurance Losses: Toward an Explication of Why Credit Scoring Works," the study has been peer-reviewed and at the time of the hearing had been accepted for publication in the Journal of Risk and Insurance. In this study, the authors conducted a detailed review of existing scientific literature concerning the biological, psychological, and behavioral attributes of risky automobile drivers and insured losses, and a similar review of literature concerning the biological, psychological, and behavioral attributes of financial risk takers. The study found that basic chemical and psychobehavioral characteristics, such as a sensation-seeking personality type, are common to individuals exhibiting both higher insured automobile losses and poorer credit scores. Dr. Brockett testified that this study provides a direction for future research into the reasons why credit scoring works as an insurance risk characteristic. 3. The Proposed Rule's Definition of "Unfairly Discriminatory" Petitioners contend that the Proposed Rule's definition of the term "unfairly discriminatory" expands upon and is contrary to the statutory definition of the term discussed in section C.1. supra, and that this expanded definition operates to impose a ban on the use of credit scoring by insurance companies. As noted above, Section 626.9741, Florida Statutes, does not define the term "unfairly discriminatory." The provisions of the Rating Law10 define the term as it is generally understood by the insurance industry: a rate is deemed "unfairly discriminatory" if the premium charged does not equitably reflect the differences in expected losses and expenses between policyholders. Two provisions of Section 626.9741, Florida Statutes, employ the term "unfairly discriminatory": (5) A rate filing that uses credit reports or credit scores must comply with the requirements of s. 627.062 or s. 627.0651 to ensure that rates are not excessive, inadequate, or unfairly discriminatory. * * * (8) The commission may adopt rules to administer this section. The rules may include, but need not be limited to: * * * (c) Standards that ensure that rates or premiums associated with the use of a credit report or score are not unfairly discriminatory, based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence. Petitioners contend that the statute's use of the term "unfairly discriminatory" is unexceptionable, that the Legislature simply intended the term to be used and understood in the traditional sense of actuarial soundness alone. Respondents agree that Subsection 626.9741(5), Florida Statutes, calls for the agency to apply the traditional definition of "unfairly discriminatory" as that term is employed in the statutes directly referenced, Sections 627.062 and 627.0651, Florida Statutes, the relevant texts of which are set forth in Findings of Fact 18 and 19 above. However, Respondents contend that Subsection 626.9741(8)(c), Florida Statutes, calls for more than the application of the Rating Law's definition of the term. Respondents assert that in the context of this provision, "unfairly discriminatory" contemplates not only the predictive function, but also "discrimination" in its more common sense, as the term is employed in state and federal civil rights law regarding race, color, religion, marital status, age, gender, income, national origin, or place of residence. At the hearing, OIR General Counsel Steven Parton testified as to the reasons why the agency chose the federal body of law using the term "disparate impact" as the test for unfair discrimination in the Proposed Rule: Well, first of all, what we were looking for is a workable definition that people would have some understanding as to what it meant when we talked about unfair discrimination. We were also looking for a test that did not require any willfulness, because it was not our concern that, in fact, insurance companies were engaging willfully in unfair discrimination. What we believed is going on, and we think all of the studies that are out there suggest, is that credit scoring is having a disparate impact upon various people, whether it be income, whether it be race. . . . Respondents' position is that Subsection 626.9741(8)(c), Florida Statutes, requires that a proposed rate or premium be rejected if it has a "disproportionately" negative effect on one of the named classes of persons, even though the rate or premium equitably reflects the differences in expected losses and expenses between policyholders. In the words of Mr. Parton, "This is not an actuarial rule." Mr. Parton explained the agency's rationale for employing a definition of "unfairly discriminatory" that is different from the actuarial usage employed in the Rating Law. Subsection 626.9741(5), Florida Statutes, already provides that an insurer's rate filings may not be "excessive, inadequate, or unfairly discriminatory" in the actuarial sense. To read Subsection 626.9741(8)(c), Florida Statutes, as simply a reiteration of the actuarial "unfair discrimination" rule would render the provision, "a nullity. There would be no force and effect with regards to that." Thus, the Proposed Rule defines "unfairly discriminatory" to mean "that adverse decisions resulting from the use of a credit scoring methodology disproportionately affects persons belonging to any of the classes set forth in Section 626.9741(8)(c), F.S." Proposed Florida Administrative Code Rule 69O-125.005(1)(e). OIR's actuary, Howard Eagelfeld, explained that "disproportionate effect" means "having a different effect on one group . . . causing it to pay more or less premium than its proportionate share in the general population or than it would have to pay based upon all other known considerations." Mr. Eagelfeld's explanation is not incorporated into the language of the Proposed Rule. Consistent with the actuarial definition of "unfairly discriminatory," the Proposed Rule requires that any credit scoring methodology must be "demonstrated to be a valid predictor of the insurance risk to be assumed by an insurer for the applicable type of insurance," and sets forth detailed criteria through which the insurer can make the required demonstration. Proposed Florida Administrative Code Rule 69O-125.005(9)(a)-(f) and (h)-(l). Proposed Florida Administrative Code Rule 69O-125.005(9)(g) sets forth Respondents' "civil rights" usage of the term "unfairly discriminatory." The insurer's demonstration of the validity of its credit scoring methodology must include: [d]ocumentation consisting of statistical testing of the application of the credit scoring model to determine whether it results in a disproportionate impact on the classes set forth in Section 626.9741(8)(c), F.S. A model that disproportionately affects any such class of persons is presumed to have a disparate impact and is presumed to be unfairly discriminatory.11 Mr. Parton, who testified in defense of the Proposed Rule as one of its chief draftsmen, stated that the agency was concerned that the use of credit scoring may be having a disproportionate effect on minorities. Respondents believe that credit scoring may simply be a surrogate measure for income, and that using income as a basis for setting rates would have an obviously disparate impact on lower-income persons, including the young and the elderly. Mr. Parton testified that "neither the insurance industry nor anyone else" has researched the theory that credit scoring may be a surrogate for income. Mr. Miller referenced a 1998 analysis performed by AIA indicating that the average credit scores do not vary significantly according to the income group. In fact, the lowest income group (persons making less than $15,000 per year) had the highest average credit score, and the average credit scores actually dropped as income levels rose until the income range reached $50,000 to $74,000 per year, when the credit scores began to rise. Mr. Miller testified that a credit score is no more predictive of income level than a coin flip. However, Respondents introduced a January 2003 report to the Washington State Legislature prepared by the Social & Economic Sciences Research Center of Washington State University, titled "Effect of Credit Scoring on Auto Insurance Underwriting and Pricing." The purpose of the study was to determine whether credit scoring has unequal impacts on specific demographic groups. For this study, the researchers received data from three insurance companies on several thousand randomly chosen customers, including the customers' age, gender, residential zip code, and their credit scores and/or rate classifications. The researchers contacted about 1,000 of each insurance company's customers and obtained information about their ethnicity, marital status, and income levels. The study's findings were summarized as follows: The demographic patterns discerned by the study are: Age is the most significant factor. In almost every analysis, older drivers have, on average, higher credit scores, lower credit-based rate assignments, and less likelihood of lacking a valid credit score. Income is also a significant factor. Credit scores and premium costs improve as income rises. People in the lowest income categories-- less than $20,000 per year and between $20,000 and $35,000 per year-- often experienced higher premiums and lower credit scores. More people in lower income categories also lacked sufficient credit history to have a credit score. Ethnicity was found to be significant in some cases, but because of differences among the three firms studied and the small number of ethnic minorities in the samples, the data are not broadly conclusive. In general, Asian/Pacific Islanders had credit scores more similar to whites than to other minorities. When other minority groups had significant differences from whites, the differences were in the direction of higher premiums. In the sample of cases where insurance was cancelled based on credit score, minorities who were not Asian/Pacific Islanders had greater difficulty finding replacement insurance, and were more likely to experience a lapse in insurance while they searched for a new policy. The analysis also considered gender, marital status and location, but for these factors, significant unequal effects were far less frequent. (emphasis added) The evidence appears equivocal on the question of whether credit scoring is a surrogate for income. The Washington study seems to indicate that ethnicity may be a significant factor in credit scoring, but that significant unequal effects are infrequent regarding gender and marital status. The evidence demonstrates that the use of credit scores by insurers would tend to have a negative impact on young people. Mr. Miller testified that persons between ages 25 and 30 have lower credit scores than older people. Petitioners argue that by defining "unfairly discriminatory" to mean "disproportionate effect," the Proposed Rule effectively prohibits insurers from using credit scores, if only because all the parties recognize that credit scores have a "disproportionate effect" on young people. Petitioners contend that this prohibition is in contravention of Section 626.9741(1), Florida Statutes, which states that the purpose of the statute is to "regulate and limit" the use of credit scores, not to ban them outright. Respondents counter that if the use of credit scores is "unfairly discriminatory" toward one of the listed classes of persons in contravention of Subsection 626.9741(8)(c), Florida Statutes, then the "limitation" allowed by the statute must include prohibition. This point is obviously true but sidesteps the real issues: whether the statute's undefined prohibition on "unfair discrimination" authorizes the agency to employ a "disparate impact" or "disproportionate effect" definition in the Proposed Rule, and, if so, whether the Proposed Rule sufficiently defines any of those terms to permit an insurer to comply with the rule's requirements. Proposed Florida Administrative Code Rule 69O-125.005(2) provides that the insurer bears the burden of demonstrating that its credit scoring methodology does not disproportionately affect persons based upon their race, color, religion, marital status, age, gender, income, national origin, or place of residence. Petitioners state that no insurer can demonstrate, consistent with the Proposed Rule, that its credit scoring methodology does not have a disproportionate effect on persons based upon their age. Therefore, no insurer will ever be permitted to use credit scores under the terms of the Proposed Rule. As discussed more fully in Findings of Fact 73 through 76 below, Petitioners also contend that the Proposed Rule provides no guidance as to what "disproportionate effect" and "disparate impact" mean, and that this lack of definitional guidance will permit the agency to reject any rate filing that uses credit scoring, based upon an arbitrary determination that it has a "disproportionate effect" on one of the classes named in Subsection 626.9741(8)(c), Florida Statutes. Petitioners also presented evidence that no insurer collects data on race, color, religion, or national origin from applicants or insureds. Mr. Miller testified that there is no reliable independent source for race, color, religious affiliation, or national origin data. Mr. Eagelfeld agreed that there is no independent source from which insurers can obtain credible data on race or religious affiliation. Mr. Parton testified that this lack of data can be remedied by the insurance companies commencing to request race, color, religion, and national origin information from their customers, because there is no legal impediment to their doing so. Mr. Miller testified that he would question the reliability of the method suggested by Mr. Parton because many persons will refuse to answer such sensitive questions or may not answer them correctly. Mr. Miller stated that, as an actuary, he would not certify the results of a study based on demographic data obtained in this manner and would qualify any resulting actuarial opinion due to the unreliability of the database. Petitioners also object to the vagueness of the broad categories of "race, color, religion and national origin." Mr. Miller testified that the Proposed Rule lacks "operational definitions" for those terms that would enable insurers to perform the required calculations. The Proposed Rule places the burden on the insurer to demonstrate no disproportionate effect on persons based on these categories, but offers no guidance as to how these demographic classes should be categorized by an insurer seeking to make such a demonstration. Petitioners point out that even if the insurer is able to ascertain the categories sought by the regulators, the Proposed Rule gives no guidance as to whether the "disproportionate effect" criterion mandates perfect proportionality among all races, colors, religions, and national origins, or whether some degree of difference is tolerable. Petitioners contend that this lack of guidance provides unbridled discretion to the regulator to reject any disproportionate effect study submitted by an insurer. At his deposition, Mr. Parton was asked how an insurer should break down racial classifications in order to show that there is no disproportionate effect on race. His answer was as follows: There is African-American, Cuban-American, Spanish-American, African-American, Haitian- American. Are you-- you know, whatever the make-up of your book of business is-- you're the one in control of it. You can ask these folks what their ethnic background is. At his deposition, Mr. Parton frankly admitted that he had no idea what "color" classifications an insurer should use, yet he also stated that an insurer must demonstrate no disproportionate effect on each and every listed category, including "color." At the final hearing, when asked to list the categories of "color," Mr. Parton responded, "I suppose Indian, African-American, Chinese, Japanese, all of those."12 At the final hearing, Mr. Parton was asked whether the Proposed Rule contemplates requiring insurers to demonstrate distinctions between such groups as "Latvian-Americans" and "Czech-Americans." Mr. Parton's reply was as follows: No. And I don't think it was contemplated by the Legislature. . . . The question is race by any other name, whether it be national origin, ethnicity, color, is something that they're concerned about in terms of an impact. What we would anticipate, and what we have always anticipated, is the industry would demonstrate whether or not there is an adverse effect against those folks who have traditionally in Florida been discriminated against, and that would be African-Americans and certain Hispanic groups. In our opinion, at least, if you could demonstrate that the credit scoring was not adversely impacting it, it may very well answer the questions to any other subgroup that you may want to name. At the hearing, Mr. Parton was also questioned as to distinctions between religions and testified as follows: The impact of credit scoring on religion is going to be in the area of what we call thin files, or no files. That is to say people who do not have enough credit history from which credit scores can be done, or they're going to be treated somehow differently because of that lack of history. A simple question that needs to be asked by the insurance company is: "Do you, as a result of your religious belief or whatever [sect] you are in, are you forbidden as a precept of your religious belief from engaging in the use of credit?" When cross-examined on the subject, Mr. Parton could not confidently identify any religious group that forbids the use of credit. He thought that Muslims and Quakers may be such groups. Mr. Parton concluded by stating, "I don't think it is necessary to identify those groups. The question is whether or not you have a religious group that you prescribe to that forbids it." Petitioners contend that, in addition to failing to define the statutory terms of race, color, religion, and national origin in a manner that permits insurer compliance, the Proposed Rule fails to provide an operational definition of "disproportionate effect." The following is a hypothetical question put to Mr. Parton at his deposition, and Mr. Parton's answer: Q: Let's assume that African-Americans make up 10 percent of the population. Let's just use two groups for the sake of clarity. Caucasians make up 90 percent. If the application of credit scoring in underwriting results in African-Americans paying 11 percent of the premium and Caucasians paying 89 percent of the premium, is that, in your mind, a disproportionate affect [sic]? A: It may be. I think it would give rise under this rule that perhaps there is a presumption that it is, but that presumption is not [an irrebuttable] one.[13] For instance, if you then had testimony that a 1 percent difference between the two was statistically insignificant, then I would suggest that that presumption would be overridden. This answer led to a lengthy discussion regarding a second hypothetical in which African-Americans made up 29 percent of the population, and also made up 35 percent of the lowest, or most unfavorable, tier of an insurance company's risk classifications. Mr. Parton ultimately opined that if the difference in the two numbers was found to be "statistically significant" and attributable only to the credit score, then he would conclude that the use of credit scoring unfairly discriminated against African-Americans. As to whether his answer would be the same if the hypothetical were adjusted to state that African-Americans made up 33 percent of the lowest tier, Mr. Parton responded: "That would be up to expert testimony to be provided on it. That's what trials are all about."14 Aside from expert testimony to demonstrate that the difference was "statistically insignificant," Mr. Parton could think of no way that an insurer could rebut the presumption that the difference was unfairly discriminatory under the "disproportionate effect" definition set forth in the proposed rule. He stated that, "I can't anticipate, nor does the rule propose to anticipate, doing the job of the insurer of demonstrating that its rates are not unfairly discriminatory." Mr. Parton testified that an insurer's showing that the credit score was a valid and important predictor of risk would not be sufficient to rebut the presumption of disproportionate effect. Summary Findings Credit-based insurance scoring is a valid and important predictor of risk, significantly increasing the accuracy of the risk assessment process. The evidence is still inconclusive as to why credit scoring is an effective predictor of risk, though a study co-authored by Dr. Brockett has found that basic chemical and psychobehavioral characteristics, such as a sensation-seeking personality type, are common to individuals exhibiting both higher insured automobile losses and poorer credit scores. Though the evidence was equivocal on the question of whether credit scoring is simply a surrogate for income, the evidence clearly demonstrated that the use of credit scores by insurance companies has a greater negative overall effect on young people, who tend to have lower credit scores than older people. Petitioners and Fair Isaac emphasized their contention that compliance with the Proposed Rule would be impossible, and thus the Proposed Rule in fact would operate as a prohibition on the use of credit scoring by insurance companies. At best, Petitioners demonstrated that compliance with the Proposed Rule would be impracticable at first, given the current business practices in the industry regarding the collection of customer data regarding race and religion. The evidence indicated no legal barriers to the collection of such data by the insurance companies. Questions as to the reliability of the data are speculative until a methodology for the collection of the data is devised. Subsection 626.9741(8)(c), Florida Statutes, authorizes the FSC to adopt rules that may include: Standards that ensure that rates or premiums associated with the use of a credit report or score are not unfairly discriminatory, based upon race, color, religion, marital status, age, gender, income, national origin, or place of residence. Petitioners' contention that the statute's use of "unfairly discriminatory" contemplates nothing more than the actuarial definition of the term as employed by the Rating Law is rejected. As Respondents pointed out, Subsection 626.9741(5), Florida Statutes, provides that a rate filing using credit scores must comply with the Rating Law's requirements that the rates not be "unfairly discriminatory" in the actuarial sense. If Subsection 626.9741(8)(c), Florida Statutes, merely reiterates the actuarial requirement, then it is, in Mr. Parton's words, "a nullity."15 Thus, it is found that the Legislature contemplated some level of scrutiny beyond actuarial soundness to determine whether the use of credit scores "unfairly discriminates" in the case of the classes listed in Subsection 626.9741(8)(c), Florida Statutes. It is found that the Legislature empowered FSC to adopt rules establishing standards to ensure that an insurer's rates or premiums associated with the use of credit scores meet this added level of scrutiny. However, it must be found that the term "unfairly discriminatory" as employed in the Proposed Rule is essentially undefined. FSC has not adopted a "standard" by which insurers can measure their rates and premiums, and the statutory term "unfairly discriminatory" is thus subject to arbitrary enforcement by the regulating agency. Proposed Florida Administrative Code Rule 69O-125.005(1)(e) defines "unfairly discriminatory" in terms of adverse decisions that "disproportionately affect" persons in the classes set forth in Subsection 626.9741(8)(c), Florida Statutes, but does not define what is a "disproportionate effect." At Subsection (9)(g), the Proposed Rule requires "statistical testing" of the credit scoring model to determine whether it results in a "disproportionate impact" on the listed classes. This subsection attempts to define its terms as follows: A model that disproportionately affects any such class of persons is presumed to have a disparate impact and is presumed to be unfairly discriminatory. Thus, the Proposed Rule provides that a "disproportionate effect" equals a "disparate impact" equals "unfairly discriminatory," without defining any of these terms in such a way that an insurer could have any clear notion, prior to the regulator's pronouncement on its rate filing, whether its credit scoring methodology was in compliance with the rule. Indeed, Mr. Parton's testimony evinced a disinclination on the part of the agency to offer guidance to insurers who attempt to understand this circular definition. The tenor of his testimony indicated that the agency itself is unsure of exactly what an insurer could submit to satisfy the "disproportionate effect" test, aside from perfect proportionality, which all parties concede is not possible at least as to young people, or a showing that any lack of perfect proportionality is "statistically insignificant," whatever that means. Mr. Parton seemed to say that OIR will know a valid use of credit scoring when it sees one, though it cannot describe such a use beforehand. Mr. Eagelfeld offered what might be a workable definition of "disproportionate effect," but his definition is not incorporated into the Proposed Rule. Mr. Parton attempted to assure the Petitioners that OIR would take a reasonable view of the endless racial and ethnic categories that could be subsumed under the literal language of the Proposed Rule, but again, Mr. Parton's assurances are not part of the Proposed Rule. Mr. Parton's testimony referenced federal and state civil rights laws as the source for the term "disparate impact." Federal case law under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, has defined a "disparate impact" claim as "one that 'involves employment practices that are facially neutral in their treatment of different groups, but that in fact fall more harshly on one group than another and cannot be justified by business necessity.'" Adams v. Florida Power Corporation, 255 F.3d 1322, 1324 n.4 (11th Cir. 2001), quoting Hazen Paper Co. v. Biggins, 507 U.S. 604, 609, 113 S. Ct. 1701, 1705, 123 L. Ed. 2d 338 (1993). The Proposed Rule does not reference this definition, nor did Mr. Parton detail how OIR proposes to apply or modify this definition in enforcing the Proposed Rule. Without further definition, all three of the terms employed in this circular definition are conclusions, not "standards" that the insurer and the regulator can agree upon at the outset of the statistical and analytical process leading to approval or rejection of the insurer's rates. Absent some definitional guidance, a conclusory term such as "disparate impact" can mean anything the regulator wishes it to mean in a specific case. The confusion is compounded by the Proposed Rule's failure to refine the broad terms "race," "color," and "religion" in a manner that would allow an insurer to prepare a meaningful rate submission utilizing credit scoring. In his testimony, Mr. Parton attempted to limit the Proposed Rule's impact to those groups "who have traditionally in Florida been discriminated against," but the actual language of the Proposed Rule makes no such distinction. Mr. Parton also attempted to limit the reach of "religion" to groups whose beliefs forbid them from engaging in the use of credit, but the language of the Proposed Rule does not support Mr. Parton's distinction.
Findings Of Fact Petitioner is licensed by the State of Florida as a laboratory technologist. Petitioner applied to the Respondent for licensure as a supervisor. On February 2, 1982, Respondent denied Petitioner's application to take the supervisory examination for the stated reason that Petitioner did not have ten years of experience. Petitioner holds a Bachelor's degree in Fine Arts from Florida International University. Petitioner has supplemented his education by taking additional science courses. The science courses taken before and after Petitioner received his Bachelor's degree total 26 semester credits. The courses taken after receipt of his degree have been specifically related to his field. Petitioner has been employed by the Miami Heart Institute since July 11, 1976, except for the period between September, 1976, and August, 1977. Dr. Jerome Benson is a pathologist and is the Director of Laboratories at the Miami Heart Institute. He is also Vice Chairman of the National Accreditation for Clinical Laboratory Sciences, the organization which accredits approximately 1,000 programs in the medical technology field and which is responsible for the Committee on Higher Education and Accreditation of the United States Office of Education, which accredits laboratories. He is familiar with accreditation of medical technology programs throughout the country and locally. He serves on the Advisory Committee at Miami-Dade Community College, and he planned the curriculum for the medical technology programs at both Miami- Dade Community College and at Florida International University. He was recognized as an expert by both parties. Dr. Benson believes that Petitioner is qualified to sit for the supervisory examination in terms of education, in terms of experience time, in terms of intent of the law, and in terms of protecting the public safety. He further believes that the science courses Petitioner has taken, both pre-baccalaureate and post-baccalaureate, qualify Petitioner for a Bachelor's degree in medical technology. Norman Bass was formerly Petitioner's immediate supervisor. He evaluates Petitioner's performance in the laboratory as excellent and believes that Petitioner is qualified through experience and academic courses to sit for the supervisory examination. At the time of the formal hearing in this cause, Petitioner had a total of 12,935 hours of work time at the Miami Heart Institute. Respondent considers 37.5 hours as constituting a full work week. George S. Taylor, Jr., reviewed Petitioner's application on behalf of Respondent. The application was received on January 18, 1982, and was denied on February 2, 1982, for the reason that Petitioner did not have ten years' experience. At the time, Respondent did not have current transcripts reflecting courses taken by Petitioner. Respondent did not request any, but simply used transcripts on file with Respondent which had been filed when Petitioner applied for his technologist's license, even though Petitioner's application for licensure as a supervisor reflected that he had taken various science courses at Miami-Dade Community College. Taylor is of the opinion that an applicant with 120 college credits must have between 25 and 30 of those credits in science courses in order to have a major in science; an applicant with 90 semester hours in college is required to have 17 to 24 credits in science in order to have a science major.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's application to take the examination for a supervisor's license. DONE and RECOMMENDED this 14th day of January, 1983, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1983. COPIES FURNISHED: Samuel S. Forman, Esquire The Counsel Building 2016 Harrison Street Hollywood, Florida 33020 Morton Laitner, Esquire Dade County Health Department 1350 North West 14th Street Miami, Florida 33125 David H. Pingree, Secretary Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue The issue in this case is whether the Petitioner's academic record meets the academic requirements that are prerequisites to taking the Fundamentals of Engineering examination.
Findings Of Fact The Petitioner submitted an application for approval to take the Fundamentals of Engineering examination. The Petitioner studied engineering at the Tongji University in the People's Republic of China from 1991 to 1995. He majored in Building Engineering and was awarded the degree of Bachelor of Engineering on July 10, 1995. Beginning in September of 1995, the Petitioner studied engineering at the graduate level at Tongji University. His graduate studies lasted until April of 1998, at which time he was awarded the degree of Master of Engineering with a major in Structural Engineering. During the course of his graduate studies at Tongji University from September of 1995 until April of 1998, the Petitioner completed a total of 38 semester credit hours. Those semester credit hours included the following courses with their indicated semester credit hours: Applied Statistics 2 credit hours Numerical Analysis 3 credit hours The courses titled Applied Statistics and Numerical Analysis are both higher mathematics courses. In the fall of 2000, the Petitioner began further graduate studies in engineering at Auburn University. He studied at Auburn University through the spring of 2002. The courses taken by the Petitioner at Auburn University included the following, with the indicated number of semester credit hours: Advanced Structural Analysis 3 credit hours Advanced Stress Analysis 3 credit hours Structural Dynamics I 3 credit hours Finite Element Methods in Structural Mechanics 3 credit hours The course titled Finite Element Methods in Structural Mechanics is a higher mathematics class. The other three Auburn courses listed immediately above, if not pure mathematics courses, are certainly courses which involve the application of advanced principles of mathematics. To successfully complete such courses, a person would have to be well-grounded in higher mathematics. In the fall of 2002, the Petitioner transferred to the University of Florida where he continued his graduate studies in engineering. On December 20, 2003, the University of Florida awarded the Petitioner the degree of Master of Engineering with a major in Civil Engineering. Pursuant to Florida Administrative Code Rule 61G15- 20.007 the Petitioner submitted his educational credentials to an educational evaluator approved by the Board. The evaluator selected by the Petitioner was Josef Silny & Associates, Inc. (Silny). Following its evaluation of the Petitioner's educational credentials, Silny prepared a Report of Evaluation of Educational Credentials (Silny Report) dated June 15, 2005. The Silny Report reached the conclusion that the Petitioner's undergraduate education at Tongji University was not the equivalent of a degree in engineering earned from a program approved by ABET. Silny was of the view that the Petitioner's undergraduate course of study at Tongji University was not equivalent because his curriculum was deficient five semester credit hours in higher mathematics and basic sciences and was deficient one semester credit hour in humanities and social sciences.1 The conclusions reached in the Silny Report were based on an evaluation of the Petitioner's undergraduate course work at Tongji University from 1991 to 1995. The Silny Report did not take into consideration any of the courses taken by the Petitioner during his graduate studies at Tongji University from 1995 to 1998, during his graduate studies at Auburn University from 2000 to 2002, or during his graduate studies at the University of Florida from 2002 to 2003. During his undergraduate engineering studies at Tongji University, the Petitioner completed 36 semester hour credits of course work in the areas of higher mathematics and basic sciences. Silny is of the opinion that semester credit hours completed at Tongji University represent less study than semester credit hours completed at an accredited engineering school in a university in the United States of America. Specifically, Silny is of the opinion that semester credit hours completed at Tongji University are the equivalent of only 75 percent of semester credit hours earned in accredited engineering programs in the United States of America. Accordingly, when Silny evaluated the Petitioner's undergraduate education credentials, Silny multiplied the 36 semester credit hours the Petitioner had completed at Tongji University in the areas of higher mathematics and basic sciences by a factor of 0.75, and concluded that those 36 semester credit hours were equivalent to only 27 semester credit hours at an accredited engineering program in the United States of America.2 Florida Administrative Code Rule 61G15-20.007 includes the following requirements regarding applicants with degrees from foreign institutions: Applicants having degrees from foreign institutions shall be required to document “substantial equivalency” to the 2002 ABET Accreditation Yearbook for Accreditation Cycle Ended September 30, 2002 engineering criteria. This document is hereby incorporated by reference. In order to document “substantial equivalency” to an ABET accredited engineering program, the applicant must demonstrate: 32 college credit hours of higher mathematics and basic sciences. The hours of mathematics must be beyond algebra and trigonometry and must emphasize mathematical concepts and principles rather than computation. Courses in probability and statistics, differential calculus, integral calculus, and differential equations are required. Additional courses may include linear algebra, numerical analysis, and advanced calculus. As for the hours in basic sciences, courses in general chemistry and calculus-based general physics are required, with at least a two semester (or equivalent) sequence of study in either area. Additional basic sciences courses may include life sciences (biology), earth sciences (geology), and advanced chemistry or physics. Computer skills and/or programming courses cannot be used to satisfy mathematics or basic science requirements. 16 college credit hours in humanities and social sciences. Examples of traditional courses in this area are philosophy, religion, history, literature, fine arts, sociology, psychology, political science, anthropology, economics, and no more than 6 credit hours of languages other than English or other than the applicant’s native language. Courses in technology and human affairs, history of technology, professional ethics and social responsibility are also acceptable. Courses such as accounting, industrial management, finance, personnel administration, engineering economics and military training are not acceptable. Courses which instill cultural values are acceptable, while routine exercises of personal craft are not. 48 college credit hours of engineering science and engineering design. Courses in this area have their roots in mathematics and basic sciences but carry knowledge further toward creative application. Examples of traditional engineering science courses are mechanics, thermodynamics, electrical and electronic circuits, materials science, transport phenomena, and computer science (other than computer programming skills). Courses in engineering design stress the establishment of objectives and criteria, synthesis, analysis, construction, testing, and evaluation. In order to promote breadth, at least one engineering course outside the major disciplinary area is required. In addition, evidence of attainment of appropriate laboratory experience, competency in English, and understanding of the ethical, social, economic and safety considerations of engineering practice must be presented. As for competency in English, transcripts of course work completed, course content syllabi, testimonials from employers, college level advanced placement tests, Test of English as a Foreign Language (TOEFL) scores of at least 550 in the paper- based version, or 213 in the computer-based version, will be accepted as satisfactory evidence.
Recommendation On the basis of the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be issued concluding that the Petitioner has met the requirements of Florida Administrative Code Rule 61G15-20.007, and is eligible to take the Fundamentals of Engineering examination. DONE AND ENTERED this 29th day of March, 2006, in Tallahassee, Leon County, Florida. S MICHAEL M. PARRISH 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 March, 2006.
Findings Of Fact Respondent Union for Experimenting Colleges and Universities--Miami Center (hereinafter "UECU") is a foreign corporation authorized by the Florida Secretary of State to transact business in the State of Florida. Founded in 1964, UECU is an independent non-profit university incorporated in Ohio and authorized by the Ohio Board of Regents to award Bachelor of Arts, Bachelor of Science and Doctor of Philosophy degrees. UECU first began its graduate program and shortly thereafter started its undergraduate program known as the University Without Walls (hereinafter "UWW"). UECU provides an alternative to campus-based higher education and is geared primarily toward the adult student. On March 7, 1984, UECU submitted an application to Petitioner State Board of Independent Colleges and Universities (hereinafter "the Board") for a license to operate a student service center in Miami; Florida. At the time of its application to the Board, UECU was a candidate for accreditation with the North Central Association of Colleges and Schools and offered its educational program through student service centers located in Cincinnati and Los Angeles. In its application, UECU identified Lorenzo Battle, Ph.D., as the Dean/Director of the Miami Center; Sheila Costello as the Administrative Assistant to the Dean; and Wayne Leaver, Ph.D.; and Carolyn Miller as the full-time members of the core faculty. The relationship between the central office of UECU in Cincinnati and the student service centers was set forth in a memorandum from the National Dean contained in the application: The Central Office will house all permanent records for all the learners. . . . Financial Aid will be administered through the Central Office. . . . Registration forms and materials will be made up in the Central Office and sent to the Student Service Centers to be signed by the students. Student accounts will be maintained in Cincinnati at the Business Office. . . . Academic policy and implementation procedures must be designed through the office of the UWW Vice President and National Dean. All policies and procedures must be cleared through this office first, and must have the approval of the national Faculty and Deans. Student Service Center Deans are to implement these policies through the faculty at their centers. Thus, the application made clear that the Central Office in Cincinnati had primary responsibility for the academic programs and the finances of the Miami Center. The application contained a budget for the Miami Center for 1984-85 as well as UECU's audited financial statements for the fiscal year ending June 30, 1983. The application stated the Miami Center " . . . will be funded by student fees and tuitions as well as by the main campus in Ohio." The Executive Director of the Board, C. Wayne Freeberg, Ed.D., prepared a staff report on UECU's application for the Board's meeting on September 14, 1984, when UECU's application was scheduled to be reviewed. In his report he noted the location of UECU as Cincinnati and in the space designated for "Name/Title of Chief Administrative Official" he listed Dr. Robert R. Conley, President Dr. Sean Warner, Vice President for Academic Affairs; and Battle, Director of the Miami Center. Freeberg recommended that the Board grant UECU a temporary license subject to two conditions: (1) it file monthly financial reports, and (2) it not include the "Environmental Dimension" in its academic program. The Board followed Freeberg's recommendation, and on September 14, 1984, granted UECU a temporary license to operate a center in Miami, Florida, having determined that UECU met the requirements for temporary licensure. Although President Conley, Vice President Warner and Miami Director Battle were present at that meeting, on September 17, 1984, Freeberg wrote Battle a letter confirming that the Board had determined that UECU-Miami Center met the requirements for temporary licensure. The Miami Student Service Center Budget for 1984-85 submitted with the application showed projected enrollment in the summer of 70, in the fall of 110, in the winter of 130, and in the spring of 130; for an average quarterly enrollment of 110 students. It showed a projection of revenue over expenditures of minus $19,635 for summer, plus $2,295 for fall, plus $23,145 for winter, and plus $23,145 for spring, for a fiscal year total revenue over expenditures of plus $28,950 by the end of the first year of operation. Total expected tuition was $572,000. A contingency fund of $50,000 as a "reserve for enrollment fluctuations and unanticipated development expense" was built into that budget. In compliance with the conditions of temporary licensure, UECU filed financial reports with the Board during its first year of licensure. Conley sent Freeberg the first financial report on October 9, 1984, with a cover letter stating, "If you have any questions on this report, please do not hesitate to call me or drop me a note." Freeberg does not remember calling Conley about that report. On November 28, 1984, Conley sent Freeberg a letter with an attached financial report. In the letter, Conley stated: A word of caution in the interpretation of these reports is in order. The monthly report indicates a cash shortfall of $23,082, which is being funded by UECU from its developmental subsidy fund. The Center is new, the enrollment low, and the front-end costs are higher than one might expect in terms of an on-going, established unit. We expect this situation to change overtime as the enrollment grows and the Center matures. As of September 30, 1984, the end of the first quarter of our 1984-85 fiscal year, UECU had expended 5155,350 in development subsidies supporting the center. At its meeting on December 3, 1984, the Board received the financial reports which Conley had submitted to Freeberg. On January 2, 1985, Conley sent Freeberg a letter with an attached financial report. Freeberg did not call Conley about this report. On January 17, 1985, Conley sent Freeberg a letter with an attached financial report. In that letter, Conley stated, "During the first half-year UECU provided developmental funding for the center in the amount of $103,785. We expect that amount to decline over subsequent quarters as the enrollment grows. Dr. Battle's enrollment forecasts have unfortunately, been overly optimistic." Although Freeberg read the report, he did not call Conley to ask him any questions about it. On February 26, 1985, Conley sent Freeberg a letter with attached financial reports. Freeberg did not call Conley about these reports. In his report to the Board for the March 11, 1985 meeting, Freeberg recommbnded, with respect to the financial reports submitted by Conley on January 2 and January 17, 1985, that they "be received and approved for the record". At the Board's meeting on March 11, 1985, the Board received and approved the financial reports which had been submitted by Conley. On March 18, 1985, Freeberg wrote Battle a letter stating, "The Board received and approved the Special Report on Standard 5 [sic]; Finance; and noted the financial support provided by the Union." Freeberg sent Conley a copy of this letter. On April 1, 1985, Conley sent Freeberg a letter with an attached financial report. The letter stated, "If you have any questions concerning this report, please let me know. We would be most happy to supply any additional information that may be needed in clarification." Freeberg did not call Conley about this report. On April 22, 1985, Conley sent Freeberg a letter with an attached financial report. In the letter Conley stated, "If you have any questions concerning this report, please let me know." Freeberg did not call Conley about this report. On April 24, 1985, Conley sent Freeberg a letter with an attached interim report concerning UECU's operations in Florida during the period of temporary licensure. Enclosed with the interim report was a copy of the notification of accreditation, dated February 27, 1985, from the North Central Association of Colleges and Schools, Commission on Institutions of Higher Education. North Central is a regional accrediting agency recognized by the United States Department of Education. Regarding "Standard 6: Finances", UECU reported: "No changes in the sources of revenue have occurred during this period. The Center's operation is funded from essentially two sources: tuition and fee revenues and development funding from UECU. The current financial situation at the center is a healthy one and moving ahead according to our financial plans." Page 8 of the interim report -showed a development subsidy as of March 31, 1985 in the amount of $195,961 and a fund balance deficit of $179,930. Freeberg never spoke to Conley about the interim report. For the Board's meeting on June 7, 1985, Freeberg prepared two staff reports. One contained excerpts from UECU's UECU's annual report. Freeberg's report noted the campus as being in Cincinatti, Ohio and also listed Conley's name first in the space for "Name/Title of Chief Administrative Official". In the staff comment section of the report it is noted that the Board's visit to the Miami Center would occur in early October of 1985. Freeberg recommended " . . . that the Temporary License granted to the Center be continued for three (3) months pending the onsite evaluation report by the visiting committee", and that the Board receive UECU's Annual Report. interim report, and the other attached the financial information which Conley had submitted on April 1 and April 22, 1985. Both reports listed Conley's name first in the space for "Name/Title of Chief Administrative Official." On June 17, 1985, Freeberg sent Battle a letter confirming the Board's action at the meeting on June 7, 1985, receiving UECU's interim report and UECU's financial reports. The letter also advised that the Board would conduct an annual review of UECU's temporary license at its meeting on September 12, 1985. Freeberg did not send Conley a copy of this letter or any of the enclosures. On July 18, 1985, Conley submitted to Freeberg an annual report for the UECU Miami Center. According to the financial information included in the annual report: as of April 30, 1985 the developmental subsidy was $157,198 and the fund balance deficit was $114,819 as of May 31, 1985, the developmental subsidy was $152,686 and the fund balance deficit was $134,943 as of June 30, 1985, the developmental subsidy was $158,647 and the fund balance deficit was $159,208. Regarding "Standard 6: Finances", UECU stated in the annual report, "No changes in the sources of revenue have occurred during this period. The Center's operation is funded from essentially two sources: tuition and fee revenues and developmental funding from UECU. The current financial situation at the center is a healthy one and moving ahead according to our financial plans." Although Freeberg had some concern about the completeness of the information submitted in the annual report, no "completeness summary" or other written request for additional information was ever submitted to UECU with respect to UECU's annual report. In connection with the Board's meeting on September 12, 1985, Preeberg prepared a staff report regarding UECU's annual report. Freeberg's report noted the campus as being in Cincinatti, Ohio and also listed Conley's name first in the space for "Name/Title of Chief Administrative Official." In the staff comment section of the report it is noted that the Board's visit to the Miami Center would occur in early October of 1985. Freeberg recommended ". . . that the Temporary License granted to the Center be continued for three (3) months pending the onsite evaluation report by the visiting committee," and that the Board receive UECU's Annual Report. In none of his staff reports to the Board during the term of UECU's licensure, including his written report to the Board for its meeting on September 12, 1985, did Freeberg advise that UECU had violated any standard for temporary licensure or that UECU's temporary license should be revoked or suspended. At the end of June, 1985, UECU placed Battle on probation and an addendum was attached to his employment contract for unsatisfactory performance. Battle retained legal counsel in connection with his dispute with UECU regarding the terms of his continued employment. In July, 1985, Freeberg received a call from the UECU Cincinnati office in which the National Dean asked Freeberg if he had any concerns about the Miami Center under Battle. After that call, however, Freeberg never contacted the main office of UECU about any concerns he may have had about the operation of the UECU Miami Center. Battle caused a letter to be delivered on September 12, 1985, to the office of the Rev. Dr. Patrick H. O'Neill, at St. Thomas University in Miami where the Board's meeting was being held. O'Neill, President of St. Thomas University and the Chairman of the Petitioner Board, gave the letter to Freeberg. Though hand-delivered on September 12, 1985, the letters bears the date of September 3, 1985. Freeberg read the letter to the Board. The letter states: Fr. O'Neill: Please inform the Board that I have notified President Conley of my resignation as Dean of UECU Miami Center. Consequently, I am no longer the official agent in the State of Florida for UECU of Cincinnati, Ohio. Thank you for your support in the past. Very truly yours. Lorenzo Battle III September 3, 1985 Freeberg concluded from his review of Battle's letter that Battle had resigned as the Dean of the UECU Miami Center as of September 3, 1985. Freeberg did not call the Cincinnati office of UECU to find out whether Battle had notified the Cincinnati office of his resignation or whether Battle's resignation was effective as of September 3, 1985. No representative of UECU was present at the Board's meeting. The main office of UECU had not been notified of the Board's meeting. At the meeting Board Chairman O'Neill stated, "The program's obviously bankrupt here." This statement is incorrect. UECU presented unrebutted testimony that there are no unpaid obligations at the UECU Miami Center. At the meeting O'Neill also stated, "It doesn't have students." This statement is also incorrect. As set forth in Freeberg's report to the Board, there were 63 students enrolled in the UECU Miami Center at the time of the Board's meeting on September 12, 1985. In response to a comment by Freeberg about UECU " . . . not having a person there to head the thing up," Board member Peterson queried, "When you say no one there to head it up, is that just on the basis of the fact that no one was identified there?" Chairman O'Neill responded, "No one is there." O'Neill's statement was incorrect. UECU presented unrebutted testimony that the Administrative Assistant to the Dean was there at the time of the Board meeting and core faculty were there regularly throughout the month of September. After further discussion, and notwithstanding the recommendation of Freeberg's staff report that UECU's temporary license be continued for three months pending an onsite evaluation report by the visiting committee, the Board voted to suspend immediately the temporary license of the UECU--Miami Center on the basis of alleged violations of standards relating to finances and administrative organization, set forth in Rules 6E-2. 04 (3) (a) and 6E-2. 04 (6) (a), Florida Administrative Code. In response to the Board's action, on September 20, 1985, Conley sent Freeberg a letter informing him that at the time Battle delivered his letter to O'Neill on September 12, 1985, he had not told UECU that he had resigned. In fact, Battle's resignation letter to UECU, though dated September 3, 1985, was not delivered to Conley until September 16, 1985. Furthermore, the letter states, "My resignation will be effective upon resolution of details with Attorney Robert Beatty." Although Freeberg and apparently the Board concluded on September 12 that Battle had resigned on September 3, 1985, Conley's letter further advised that "it is not correct that Dr. Battle had relinquished his tasks or his responsibilities. " Battle was in and out of the UECU Miami Center during the first two weeks of September. When he was not there he left a telephone number where the Administrative Assistant to the Dean could reach him. Battle also called into the UECU Miami Center during the first two weeks of September to check in on operations. Battle's intermittent presence in the office during the first two weeks of September is, in any event, of no consequence because no students came into the office requesting to see Battle at a time when he was not there. The Administrative Assistant to the Dean, who testified she was at the Miami Center office from 9 a.m. to 5 p.m. during the first two weeks of September, did not know of any student who came into the Miami office with a problem or question which was not answered or addressed because of Battle's absence from the office. In addition to the Administrative Assistant to the Dean, Wayne Leaver, Ph.D., one of the core faculty members, was also physically present in the UECU Miami Center until September 10, 1985, when he left for a National Faculty Meeting at UECU in Cincinnati. Leaver saw Battle physically present at the Miami Center on September 3, 4, 6 and 9. Further, the chronological file at the UECU Miami Center shows memos and letters under Battle's signature were sent out on the 5th, 6th, 11th and 12th of September. Battle last worked for UECU on September 16, 1985, and he was present in the Miami Center office on that day. As a member of the core faculty, Leaver's usual hours were between 1:00 p.m, and 8:00 p.m. The other core faculty member at the time, Carolyn Miller, worked primarily from 9:00 a.m. until 4:00 p.m. Carolyn Miller and Wayne Leaver attempted to schedule their hours so one member of the core faculty was in the office and available to the learners at all times. No student problems arose between September 3 and September 9, 1985, which could not be resolved because of Battle's absence. At no time was UECU's provision of educational services to students registered at the Miami Center interrupted because of Battle's resignation. During the period of September 3, 1985 through October 1, 1985 the UECU Miami Center office functioned properly and the learners were served. Leaver has been the Acting Administrator at the Miami Center since approximately October 1, 1985. Leaver holds two doctoral degrees and has prior experience serving as an administrator. On September 13, 1985, Lauren Millikin, Ph.D. the Acting National Dean, first learned of Battle's alleged resignation, and she immediately advised Conley. Conley flew to Miami on September 15, 1985 and was at the UECU Miami Center office until Wednesday, September 18, 1985. Also present at the Miami Center the week of September 16 was Dr. Catherine Cannon, Cincinnati's Dean. During the week of the 23rd, UECU's Vice President for Institutional Advancement directed the Miami Center, and Dr. Cannon returned to spend the following week training Leaver for his new duties. Additionally, Acting National Dean Milliken spent three days at the Miami Center during the week of the 23rd while the Vice President for Institutional Advancement was there. Accordingly, the UECU Miami Center was properly staffed at all times for September 16, 1985 through the appointment of the new Acting Administrator on approximately October 1, 1985. When the Board met on September 12, 1985, it had no proof that Battle's resignation had interfered with the delivery of educational services to the students registered at the UECU Miami Center. At the final hearing in this matter, the Board offered no proof that Battle's resignation had in any way interfered with the delivery of educational services to students registered at the UECU Miami Center. In July, 1978, UECU filed a petition for an arrangement pursuant to Chapter 11 of the Federal Bankruptcy Act. The Court approved a plan of reorganization under which UECU agreed to pay the 511 claimants, composed primarily of faculty and students. In 1980 and 1981, UECU continued to operate at a deficit. By July, 1982, UECU had amassed debts of $1,577,000. At this point, the Trustees of UECU hired Conley. The financial problems Conley faced at that time included: payment of creditors under the Chapter 11 Plan of Reorganization: a $1,039,168 Department of Education claim for matters of noncompliance regarding financial aid transactions for the two year period ended June 30, 1978 a high rate of uncollectible accounts receivable and an unrestricted fund deficit of $730,078. Within six months Conley's administration was able to turn UECU's financial problems around. During fiscal 1983 UECU reduced its unrestricted fund deficit by $628,606, from $730,078 to $101,472. UECU included in its application for licensure by the Board a copy of its audited financial statements and the auditor's opinion letter for the fiscal years ending June 30, 1983 and June 30, 1982. UECU's audited financial statements disclosed the financial difficulties challenging Conley's administration. The application advised the Board of UECU's 1978 Bankruptcy, financial aid matters of noncompliance, the high rate of uncollectible accounts receivable, and the unrestricted fund deficits. Significantly, UECU's auditors' opinion letter for the fiscal year ended June 30, 1983, contained a qualification "as to the Institution's ability to continue operations on a going concern basis." On September 14, 1984 the Board granted UECU a temporary license, concluding on the basis of the information provided in UECU's application, that UECU satisfied the temporary licensure standard relating to finances. During the fiscal years ending June 30, 1984 and June 30, 1985, UECU's financial condition improved dramatically. Ironically, UECU's financial condition was much better at the time the Board summarily suspended its license than it was a year earlier when the Board concluded UECU had met the financial standard for temporary licensure. UECU disclosed its 1978 bankruptcy in its application for a Florida license. The face value of the Chapter 11 claims at the time UECU filed its application with the Board was $156,707. As of the date of the final hearing; the total face value of the Chapter 11 claims of UECU was $97,000. On February 21, 1985, UECU was accredited by the North Central Association of Colleges and Schools. Prior to granting accreditation to UECU, an evaluation team from the Commission on Institutions of Higher Education of the North Central Association of Colleges and Schools visited UECU. The North Central evaluation team reviewed UECU's books and records, financial statements, accounting work papers, and met with UECU's accountants and attorneys. The evaluation team spent three days analyzing and reviewing UECU's financial status. The evaluation team published a report which addressed the financial resources of UECU as well as the effects of the July 1978 Chapter 11 bankruptcy. The evaluation team's report, which recommended accreditation for UECU, stated, "Today the Chapter XI proceedings are substantially a matter of history. . . . From an original gross amount of $442,122, the balance of the indebtedness had, as of June 30, 1984, been reduced to $120,556. . . .". The Board's reliance upon UECU's 1978 bankruptcy as a ground for revoking UECU's license is specious. In UECU's application for a Florida license it notified the Board of its auditors' "going concern" qualification in the audited financial statement filed with the Board for the fiscal year ended June 30, 1983. UECU's audited financial statements for the fiscal year ended June 30, 1984, which Conley submitted to Freeberg in October, 1984, do not contain a "going concern" qualification. Rather, the auditors' opinion states, "The financial statements of the Institution as of June 30, 1984 and for the year then ended, indicate an overall improvement in the financial position and operations of the Institution such that the continued existence of the Institution is apparent. Accordingly, our present opinion on the 1983 financial statements, as presented herein, is different from that expressed in our previous report." UECU's audited financial statements for the fiscal year ended June 30, 1985 also contain no "going concern" qualification. The Board granted UECU a temporary license at a time when the auditors' opinion contained a "going concern" qualification yet, it summarily suspended UECU's temporary license when the "going concern" qualification had been removed and there was no longer a question as to the continued existence of the Union. The State Board's reliance upon UECU's auditors' opinions as a basis for revoking UECU's temporary license is unjustified. In its application, UECU notified the Board of certain contingent liabilities regarding federal financial aid matters. The contingent liabilities represent matters of alleged noncompliance resulting from a Department of Health and Human Services audit of UECU's Federal Education Grants. In response, UECU has done a re-audit of the financial aid accounts for the periods of 1978, 1982 and 1984 and has retained an attorney to negotiate these items with the government. Conley's uncontradicted testimony was that UECU's potential liability for the exceptions noted by the Department of Education will be between $75,000 to $150,000. Indeed, the North Central evaluation team concluded, "The data made available to the visiting team support this optimistic prognosis. The financial aid office has made a case-by-case analysis of the student files to which exceptions had been taken. Over 90% of the missing documentation which was the basis for the exceptions has been located. This alone would support [UECU's] prognosis." In recent years, there has been a dramatic improvement in the administration and documentation of the federally supported student aid program at UECU. If in the auditors' opinion the contingent liabilities threatened the continued existence of UECU the auditors would have maintained the "going concern" qualification in their opinion letter. Instead, they eliminated it in 1984. The existence of the financial aid contingent liabilities was made known to the Board when UECU applied for a license. Yet Freeberg never asked to review UECU's audits of the 1978, 1982, and 1984 financial aid accounts, and the Board approved UECU's application. The Board's reliance on the contingent liabilities as a basis for license revocation is unjustified. In its application to the Board, UECU showed a large allowance for doubtful accounts as a se :off to its accounts receivable. Since the date of its application, UECU's collectability of accounts receivable has dramatically improved. Outside users of UECU's financial statements should not be concerned with the write-off of bad debts. The write-off of doubtful accounts is a conservative practice which serves to fairly state accounts receivable. A large allowance for doubtful accounts in budget or financial statement is no basis for finding financial instability. The Board failed to show that UECU's practice of characterizing as doubtful a large percentage of its account receivables was anything other than a conservative, prudent practice. The financial report contained in UECU's application to the Board showed an unrestricted fund deficit as of June 30, 1983 of $101,472. UECU's unrestricted fund balance as of June 30, 1985 was a positive $123,660. Conley testified the fund balance as of September 30, 1985 was a positive $233,000. The Board failed to introduce any evidence showing that UECU's current fund balance was in any way "inadequate." The audited financial statements submitted to the Board during the first year of licensure and the Statement of Change in Fund Balance prepared at the final hearing clearly show that there has been improvement in UECU's financial position. Accounting for non-profit colleges and universities is not comparable to accounting for for-profit corporations. According to the Industry Audit Guide For Audits of Colleges and Universities, "Service, rather than profits is the objective of an educational institution: thus, the primary obligation of accounting and reporting is one of accounting for resources received and used rather than for the determination of net income." And, as Dr. Conley testified, "In fact, fund balances as they go are generally not built up to be huge dollar values. In fact, from my experience in institutions of higher education, you don't like to have large fund balances recorded. [I]t does not behoove an institution to publish a large fund balance. It's bad politics." Conley's testimony was unrefuted. One of the grounds for revocation identified by the Board in the statement of its position in the Prehearing Stipulation is UECU's failure to provide the Board with a budget for fiscal year 1985-86. But the Board never requested a copy of the budget from the UECU Cincinnati office where all the financial reports including the budget had been prepared. UECU prepared a budget for fiscal year 1985-86 in February, 1985. Academic personnel and officers were appropriately involved in the preparation of the budget. The budget was reviewed and approved by the Board of Trustees on April 9, 1985. Had the Petitioner Board requested a copy of the budget, Conley would have immediately provided it. In fact, Conley prepared an updated Miami Center budget during his testimony. In suspending UECU's temporary Iicense the Board in part relied upon UECU's alleged failure to set aside funds for the Miami Center. The evidence showed, however, that UECU has, within its budget, provided for funds for the Miami Center. The funds expended by UECU for the development of the Miami Center are accounted for by a "developmental subsidy." UECU had estimated the development of the Miami Center would cost $250,000. As of April 30, 1985, UECU had expended approximately $155,000 of the developmental subsidy for the development of the Miami Center. The balance of approximately $95,000 was budgeted for the 1985-86 fiscal year. In addition to the approximate $95,000, UECU budgeted an additional $12,000 for a total development fund for the fiscal year ending June 30, 1986 of $107,000. The budgeting of these funds is substantiated by the budget worksheet entitled "2/11/85 Expense Forecast--Program Expense". As shown by the monthly financial reports Conley filed during the period of licensure, the developmental subsidy operates like a revolving line of credit, increasing or decreasing during the course of the year depending upon cash flow at the Center. Freeberg testified he would have been more comfortable if the developmental subsidy for the UECU Miami Center had been shown as a separate line-item in the restricted fund of UECU's financial statements although he admitted he did not know whether that would have been in accord with generally accepted accounting principles. In fact, it would have been improper for UECU to account for the developmental subsidy in a restricted fund. The Industry Audit Guide, published by the American Institute of Certified Public Accountants is the authoritative promulgation of generally accepted accounting principles and generally accepted auditing standards applicable to colleges and universities. The Industry Audit Guide provides at page 16: The restricted current funds group consists of those funds expendable for operating purposes but restricted by donors or other outside agencies as to the specific purpose for which they may be expended. Such externally imposed restrictions are to be contrasted with internally created designations imposed by the governing board on unrestricted funds. Nevertheless, the distinction between the balances of externally restricted and internally designated, but otherwise unrestricted funds, must be maintained in the accounts and disclosed in the financial reports. The $107,000 budgeted for the Miami Center developmental subsidy is an internal allocation made by the UECU Board of Trustees. There are no external restrictions imposed on the Miami Center developmental subsidy by either donors or government agencies. Therefore, UECU properly accounted for these funds in the unrestricted fund. The accounting for the subsidy which Freeberg would have felt more comfortable with would have conflicted with generally accepted accounting principles. In the event student enrollment is not as large as anticipated, UECU has budgeted $107,000 in the form of a developmental subsidy to support the Miami Center during fiscal 1985-86. In addition to the developmental subsidy, UECU has about $250,000 in contingency reserves, and a $100,000 line of credit which could be used to fund the Miami Center. In total, UECU has approximately $457,000 available to provide prospective students reasonable assurance that the Miami Center's program will be offered as planned, in the event student enrollment is not as large as anticipated. The Board in its Order of Summary Suspension of Licensure stated, "A substantial negative working capital is no indication of financial health" and cited to a deficit of $159,208. The Board continues to rely upon the $159,000 fund deficit as a basis for revoking UECU's license. The Board has misinterpreted the information contained in the June 30, 1985, Miami Center financial report. The Miami Center "Balance Sheet" as of June 30, 1985, is not a balance sheet as that term is typically understood. The report is actually a cost center report and reflects UECU's investment in the Miami Center. The Board interpreted the Miami Center Balance Sheet as reflecting a negative net working capital of $159,208. This was an incorrect interpretation because the financial statement made no attempt to reflect working capital. The working capital of the Miami Center as of June 30, 1985 is accurately reflected by the Statement of Working Capital. The Statement of Working Capital reflects a net negative working capital position as of June 30, 1985, of $561.00, an insignificant amount. As of the final hearing UECU had no unpaid obligations for its Miami Center. Although Conley had advised as early as November, 1984, that "A word of caution in the interpretations of these reports is in order," the Board, without: (A) calling Conley about the financial reports: (B) consulting a CPA about their proper interpretation or (C) conducting the scheduled on-site evaluation which might have disabused the Board of its misconceptions about the Miami Center, summarily suspended UECU's license on an emergency basis in order to protect the public from this "financially embarrassed" institution.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a Final Order be entered dismissing the Administrative Complaint filed against Respondent herein and reinstating Respondent's temporary license. DONE AND RECOMMENDED this 8th day of January, 1986, at Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301l (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of January, 1986. COPIES FURNISHED: C. Wayne Freeberg State Board of Independent Colleges and Universities Department of Education Tallahassee, FL 32301 Ralph D. Turlington Commissioner of Education The Capitol Tallahassee, FL 32301 William R. Dorsey, Jr. Deputy General Counsel State Board of Education Knott Building Tallahassee, FL 32301 Douglas M. Halsey, Esquire 4900 Southeast Financial Center 200 South Biscayne Boulevard Miami, FL 33131-2363 APPENDIX Petitioner's proposed findings of fact numbered 1-4, 6 (except for the first sentence), 7-9, and 19 (except for the first sentence) have been adopted verbatim or have been adopted as modified to conform to accuracy or style. Petitioner's proposed findings of fact numbered 5, 23, and 25-27 have been rejected as being contrary to the evidence. Petitioner's proposed findings of fact numbered 6 (first sentence), 19 (first sentence), 21, and 22 have been rejected as not being supported by the evidence. Petitioner's proposed findings of fact numbered 10, and 14-17 have been rejected as being immaterial. Petitioner's proposed findings of fact numbered 11-13, and 18 have been rejected as being irrelevant. Petitioner's proposed findings of fact numbered 20 and 24 have been rejected as constituting argument of counsel. Respondent's proposed findings of fact numbered 1, 2, 3 (first sentence), 4-8, 10-23, 25-72, 73 (except last sentence), and 74-86 have been adopted verbatim or have been adopted as modified to conform to accuracy or style. Respondent's proposed findings of fact numbered 3 (second sentence), and 9 have been rejected as being irrelevant. Respondent's proposed finding of fact numbered 24 has been rejected as being redundant. The last sentence of Respondent's proposed finding of fact numbered 73 has been rejected as constituting a conclusion of law.
The Issue Whether Respondent committed an unlawful employment practice against Petitioner in violation of chapter 760, Florida Statutes (2012),1/ and Title VII of the Civil Rights Act.
Findings Of Fact Mr. Sims is an African-American man who worked as an adjunct professor for Valencia College from August 31, 2009, until August 6, 2011. During his employment with Valencia College, Mr. Sims taught pre-algebra and introduction to algebra. Valencia College is a two-year community college located in Central Florida, and is comprised of several different campuses. Mr. Sims was an adjunct professor of mathematics for the Osceola campus. Mr. Sims' Charge of Discrimination, initially filed with the Commission, alleged that he was terminated from his employment as an adjunct professor based on his race. After the Commission's determination that there was no cause to believe that a discriminatory practice had occurred, Mr. Sims filed his Petition for Relief. In the Petition for Relief, Mr. Sims alleged that Valencia College had discriminated against him based on race by: 1) not renewing his employment as an adjunct professor; 2) scheduling him fewer class assignments; and 3) paying him less than other adjunct professors. According to Ms. Washington, the math coordinator for Valencia College, an adjunct professor is one that enters into a contract to teach a specific class for a semester. Usually, an adjunct professor teaches between one and two classes a semester. Adjunct professors are paid by the hour for the number of classes. All adjunct professors in the mathematics department were paid pursuant to a scale based on the individual's educational background and number of hours taught. For example, as shown by Respondent's Exhibit 5, all adjunct professors, who had a bachelor's degree in mathematics, were paid $525.00 for one contract hour course. An adjunct professor does not receive any payment if he or she is not on the teaching schedule. Further, as Dr. Perdone, the head of Valencia College's math and science department at the Osceola campus explained, Valencia College uses adjunct professors as a means of controlling costs, and providing flexibility for meeting its students' needs. Mr. Sims did not bring forward any evidence showing that Valencia College engaged in a discriminatory employment practice. Part of Ms. Washington's responsibilities is collecting data concerning the adjunct professor's effectiveness at the end of each semester. In evaluating an adjunct professor's performance, Valencia College's math department examines the "test-taker pass rate," "overall retention," and "overall pass rate." Ms. Washington and Dr. Perdone explained the definitions of each of these terms as follows: "test-taker pass rate" means percentage of students that passed the exam out of those who took the final exam; "overall retention rate" means percentage of students that sat through the entire course and attempted the final out of the total number of students that began the class; and "overall pass rate" is the successful completion rate, the percentage of students who actually passed the class at the end from of the number of students that begin the class. Ms. Washington explained that the "overall retention rate" is important because it indicates that students remained in the classroom for the entire semester, and that the students, if they initially failed, are more likely to pass the class the following semester. Dr. Perdone explained that in reviewing an adjunct professor, she was most interested in the "overall pass rate" which showed the student's successful completion of the course. In a developmental math class, such as pre-algebra or introduction to algebra, the students must successfully complete the class before being enrolled in a college credit math class. The data compiled by Ms. Washington showed that Mr. Sims' teaching performance in his pre-algebra and introduction to algebra classes for the spring and summer semesters 2011 was substandard. Specifically, the evidence showed that the "overall retention rate" for Mr. Sims' developmental math classes for the Spring Semester 2011 were at 50 percent and 35 percent. Further, the percentage of students successfully completing the two classes taught by Mr. Sims had an "overall pass rate" of 35 percent. These numbers represented the lowest for all adjunct math professors on the Osceola campus. Further, Mr. Sims' teaching performance for the Summer 2011 semester also showed a 41 percent "overall retention rate" and a 36 percent “overall pass rate.” Again, Mr. Sims had the lowest percentage of students successfully completing his class out of all the adjunct professors for the math department. The data compiled by Ms. Washington was provided to Dr. Perdone, and Ms. Washington recommended that Valencia College not continue hiring Mr. Sims as an adjunct professor. Dr. Perdone credibly testified in relation to reviewing the data concerning Mr. Sims' teaching that "when we're not seeing enough students getting through the course, sitting for the exam, and passing the exam was my primary concern." Further, Dr. Perdone credibly testified that she had received student complaints about Mr. Sims? teaching not being a "positive experience," and him being condescending to students. In June 2011, Dr. Perdone provided Mr. Sims with an evaluation for the Spring Semester 2011. The evaluation states that Mr. Sims was satisfactory in the areas of "Effectiveness of Teaching/Learning Process," "Scope and Content" of material presented, "Departmental Communication and Support," and in "Testing and Evaluation." However, Dr. Perdone rated Mr. Sims as unsatisfactory in the area of "Review Prior Session Student Assessment Data." Specifically, Dr. Perdone's comments on the evaluation state: Prof. Sims had a challenging year in the math department. He had prior improvements but his successful completion rates and student feedback have taken a negative turn. The rate of students making it successfully through the entire course has dropped to 35 percent. Also, students have visited the office to express their concerns that Prof. Sims does not show a caring and supportive demeanor with students in class. These issues cannot continue if Prof. Sims would like to continue to teach in the math department. On receiving this evaluation, Mr. Sims became upset and spoke with Dr. Perdone. Mr. Sims was upset and questioned why he was being held accountable for students withdrawing from his class. Dr. Perdone explained that Valencia College kept track of the data, and that she was concerned about the number of students successfully completing the class. She found the conversation with Mr. Sims argumentative about Valencia College's keeping track of the data on student withdrawals. It was Mr. Sims' contention that he should not be held responsible for students withdrawing from his class. Dr. Perdone credibly testified that her discussion with Mr. Sims did not progress past his displeasure with Valencia College keeping track of student withdrawals. At the heat of the discussion, and during the presentation of the evidence in this case, Mr. Sims claimed he never understood how the "retention rate" and "overall pass rate" were calculated. Further, Dr. Perdone credibly testified that at no point in their discussion did Mr. Sims ask or seek guidance on how to improve his teaching. Finally, Dr. Perdone credibly testified that her conversation with Mr. Sims confirmed the student complaints about his teaching being condescending. For example, Dr. Perdone took exception to Mr. Sims? negative characterization of the students in the "remedial" math classes.” There is no direct evidence of discrimination. Further, there is no evidence showing that similarly situated adjunct professors, who were not African American, were treated differently than Mr. Sims in scheduling classes, pay, or renewing the adjunct professor contract. Mr. Sims' testimony was often confusing and did not support his contention that he was the victim of racial discrimination. For example, in one instance, in attempting to prove that he was discriminated against in class scheduling, Mr. Sims testified that he believed in the Spring 2011 semester, Ms. Washington and Dr. Perdone discriminated against him by not scheduling him to teach. Then, according to Mr. Sims' testimony, at the "eleventh hour" he was asked to teach a developmental class when an adjunct professor was not available. Mr. Sims contended that in scheduling him to teach this particular class, Dr. Perdone knew before assigning him to the class that students would either withdraw or not successfully complete the class. Therefore, under Mr. Sims? theory, Valencia College discriminated against him both by not scheduling him to teach, and then by scheduling him to teach. Contrary to Mr. Sims' assertions, Ms. Washington credibly testified that Mr. Sims, as well as other adjunct professors, was sent an e-mail in the fall of 2010 asking if the professors would be available to teach in the Spring. Further, Ms. Washington and Dr. Perdone credibly testified that because Mr. Sims did not respond to the e-mail, he was not placed on the schedule. Mr. Sims did not bring forward any evidence showing that Dr. Perdone's explanation that she decided not to contract with him as an adjunct professor, based on his poor classroom performance was pretextual.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order finding that Petitioner failed to show that Respondent engaged in an unlawful practice in violation of the Florida Civil Rights Act, and dismissing the Petition for Relief. DONE AND ENTERED this 21st day of September, 2012, in Tallahassee, Leon County, Florida. S THOMAS P. CRAPPS 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 21st day of September, 2012.
