Findings Of Fact At all times pertinent to the issues considered at this hearing, Respondent, Dale's Package Store and Lounge, Inc., was issued 6-COP alcoholic beverage license No. 20-0012, which permits the on-premises consumption or sealed package sales of beer, wine, and liquor and the carry out sales of open malt or vinegar spirits, but not mixed drinks. On May 13, 1983, Investigator Robert W. Cunningham visited the licensed premises based on an anonymous phone call he had received at home to the effect that a lottery was being conducted there. When he entered the lounge, he saw a poster sitting on the first table inside the door. This poster contained a list of items of merchandise or services to be given as prizes and a notation of the prices for tickets. While he was looking at this display, he was approached by a patron, Edward Hanson, who asked if Cunningham wanted a ticket. When Cunningham said he did, Hanson went to the bar, where he spoke with Cindy, the bartender, and came back with a large roll of tickets, telling Cunningham to take as many as he wished. Cunningham took three and paid the $2 which the poster indicated was the price for the tickets. Half of each ticket was put in the box for the drawing. After the ticket transaction, Cunningham went up to Cindy and asked her who was in charge. When told it was Mickey (Naomi Hunt), he went into the back room, where he found her and told her it was an illegal lottery that had to stop. He also talked at that time with Susan Roberts, a representative of the local Multiple Sclerosis Foundation chapter for whom the lottery was being conducted. Ms. Roberts advised Cunningham she had discussed the matter with one of the local assistant state attorneys, who said it was all right, but she could not recall his name. Cunningham had advised Naomi Hunt to call Mr. Eggers initially, and Eggers said he would come down. Cunningham also called his district supervisor, Capt. Caplano, because, due to the size of the crowd in the bar at the time, between 200 and 250 people, he felt he needed a backup. Caplano agreed to come down to the lounge, as well. Caplano also advised Cunningham that the procedure was an unlawful lottery and the tickets and money should be seized. When Eggers got there, he told Cunningham that the entire activity was for the benefit of the Multiple Sclerosis Foundation and that his employees had been out soliciting the donation of the prizes for months. Respondent admits the conduct of the operation as the Roadhouse Inn's participation in the fund-raising campaign of the North Florida Chapter of the Multiple Sclerosis Foundation. Respondent has been approached by that agency with a kit of fund-raising activities and ideas. Before participating in the lottery, Mr. Eggers asked and was advised by both Ms. Hunt, his employee, and Ms. Roberts of the Foundation that they had inquired into and were advised of the project's legality. If the law was violated, it was done without criminal intent and without malice. A well-intentioned effort to do some good was in error. It should be noted, however, that in January 1977, this licensee was cited by Petitioner's Agent R. A. Boyd for operating a bowling machine on the premises. If the customer bowled a high score on the machine, he or she would win something, such as a drink or a snack. This was considered gambling by Petitioner, however; and upon issuance of the citation, Respondent immediately stopped the activity. No charge was laid against the licensee for that activity. Several days after Cunningham closed down the lottery, on May 19, 1983, Beverage Officer Reeves went to the licensed establishment based on a complaint received that alcoholic beverages were being served by the drink at the curb. He went to the drive-in window of the Inn and ordered a scotch and water from Naomi. She brought him a drink in a plastic cup. From his experience, he recognized the substance as scotch and water. After getting the drink, he parked the car and went inside, where he talked with Naomi and Eggers. They indicated they did not know it was illegal to sell a drink this way. Eggers indicated at the hearing that he thought that since he could sell open beer drinks out the drive-in window, he could do the same with mixed drinks. He does not have any copy of the beverage laws, thought he was operating legally, and has been doing it without objection since 1977. Since Reeves' visit, the sale of distilled spirits by the drink through the window has ceased.
The Issue Whether proposed rules 61D-7.021(5)(f) and 61D-7.021(5)(g) are invalid exercises of legislative delegated authority pursuant to Subsection 120.52(8), Florida Statutes (2004),2 and, if so, whether Petitioner is entitled to an award of costs and attorney's fees pursuant to Subsection 120.595(2), Florida Statutes.
Findings Of Fact Calder is a Florida corporation and a pari-mutuel permitholder permitted and licensed by the Department pursuant to Chapter 550, Florida Statutes. Calder seeks to challenge proposed amendments to Florida Administrative Code Rule 61D-7.021. Specifically, Calder challenges Subsection (5)(f), as noticed in the Florida Administrative Weekly, Volume 30, Number 32, August 6, 2004, and Subsection (5)(g), as noticed in the Florida Administrative Weekly, Volume 30, Number 21, May 21, 2004.3 The challenged amendments shall be referred to as the "Proposed Rules." The Proposed Rules provide: For tickets cashed more than 30 days after the purchase of the ticket, the ticket may not be cashed at any type of patron- operated machine or terminal. The totalisator system must be configured to instruct patrons on how to cash the ticket. The totalisator system must have the ability to identify such tickets and indicate to a teller that the ticket falls within this category. Calder is a licensed and permitted pari-mutuel facility which sells tickets and uses totalisator machines, and the Proposed Rules would govern the operation of such facility. The Proposed Rules have the effect of directly regulating the operation of Calder's pari-mutuel facility, and, as such, Calder is substantially affected by the Proposed Rules. The parties have stipulated that Calder "may properly challenge both Proposed Rules 61D-7.021(5)(f) and 61D-7.021(5)(g)." A pari-mutuel ticket evidences participation in a pari-mutuel pool. A winning or refundable pari-mutuel ticket belongs to the purchaser and may be claimed by the purchaser for a period of one year after the date the pari-mutuel ticket was issued. An "outs" or "outs ticket" is a winning or refundable pari-mutuel ticket which is not redeemed. If a ticket remains unclaimed, uncashed, or abandoned after one year from the date of issuance, such uncashed ticket escheats to the state unless the ticket was for a live race held by a thoroughbred permitholder such as Calder, in which case the funds are retained by the permitholder conducting the race. A totalisator machine is "the computer system used to accumulate wagers, record sales, calculate payoffs, and display wagering data on a display device that is located at a pari- mutuel facility." § 550.002(36), Fla. Stat. The Department was prompted to begin the rulemaking process for the Proposed Rules by two major cases involving fraud, one Florida case and one national case. The Florida case involved two totalisator employees named Dubinsky and Thompson, who allegedly accessed outs ticket information in the totalisator's central computer system, counterfeited outs tickets based on the information, and cashed the tickets at self-service machines at two pari-mutuel wagering facilities. The fraudulent conduct involved approximately $13,000. In the Florida case the fraudulent tickets were cashed several months after the tickets were said to have been issued. The fraud came to light when the ticketholder who held the true ticket attempted to cash the ticket, but could not because the fraudulent ticket had been cashed. The national case also involved a totalisator employee who cashed fraudulent outs tickets. In the national case, the fraudulent tickets were cashed less than 30 days after the date the tickets were purportedly issued. The purpose of the Proposed Rules is to deter the cashing of fraudulent tickets. The Department received comments from AmTote International, a totalisator company, at the rule workshop held during the rulemaking process and received written comments submitted by AmTote International after the workshop, indicating that the majority of tickets are cashed within six to nine days after the date of issuance. The older a ticket gets the less likely it becomes that the ticket will be cashed, and the less likely that it becomes that the cashing of a fraudulent ticket would be revealed by the true owner attempting to cash the ticket. Staff of the Department felt that by requiring that outs tickets older than 30 days be cashed by a live person, a thief would be deterred because he would be dealing with a person rather than a machine. The only thing that the self- service machine requires to redeem a ticket is a bar code, so it would be possible to submit a ticket containing nothing but the bar code and receive a voucher which could be submitted to a teller for money.4 If the fraudulent ticket looks different in anyway from a valid ticket, a teller may be able to spot the difference and question the transaction. Calder argues that the way to deter the fraud which has occurred is to stop totalisator employees from being able to print fraudulent tickets. However, the Department is also concerned about computer hackers potentially getting into the computer system which contains the outs tickets numbers and copying the bar code which could be submitted to a self-service machine. By regulating the method of cashing outs tickets, the Department is attempting to deter fraud by totalisator employees and others who may be able to access outs tickets information which could be used in producing counterfeit tickets. During the rule making process, the Department held a workshop, received written comments from the public, and held a hearing to receive comments from the public after the Proposed Rules were first noticed. The Department considered the comments it received and modified the Proposed Rules as noticed in the Notice of Change published on August 6, 2004, to accommodate some of the comments. Calder did not submit a good faith, written proposal for a lower cost regulatory alternative within 21 days after the notice of the Proposed Rules was published in the Florida Administrative Weekly on May 21, 2004, or after the Notice of Change was published.
The Issue abetting bookmaking on its licensed premises. If so, what disciplinary action
Recommendation Based on the foregoing, it is RECOMMENDED: That the charges against Rickey's Restaurant and Bar, Inc., be DISMISSED. DONE AND RECOMMENDED this 5th day of February, 1982, in Tallahassee, Florida. R. L. Caleen, Jr. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675
Findings Of Fact Leroy Wise, Jr.'s Mother purchased lottery ticket number 1888-3620-9444 (hereinafter referred to as the "Ticket") on approximately July 6, 1989. The Ticket was a Fantasy 5 ticket with four correct numbers. The Ticket winnings amounted to $805.00. Mr. Wise took his Mother to the Department of the Lottery's offices in Tallahassee, Florida on July 10, 1989. Mr. Wise's Mother did not have proper identification required by the Department of the Lottery to cash in the Ticket. Therefore, she allowed Mr. Wise to present the ticket for collection because Mr. Wise had proper identification. On July 10, 1989, Mr. Wise completed a Florida Lottery Winner Claim Form (hereinafter referred to as the "Form") and submitted the Form and the Ticket to the Lottery. On the back of the Ticket Mr. Wise listed his name and address on the spaces provided for the person claiming the prize and signed the Ticket. Mr. Wise listed his name, Social Security Number, address and phone number on the Form. Mr. Wise signed the Form as the "Claimant." In a letter dated July 10, 1989, the DHRS notified the Lottery that Mr. Wise owed $4,690.00 in Title IV-D child support arrearages as of July 10, 1989.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be issued providing for payment of the $805.00 prize attributable to the Ticket owed by Mr. Wise as child support arrearages as of the date of the Final Order to DHRS. DONE and ENTERED this 21st day of February, 1990, 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 21st day of February, 1990. APPENDIX 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 Petitioners' Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 1-4 2 6. 3 Not supported by the weight of the evidence. The Petitioner's did not offer any evidence at the formal hearing concerning these proposed findings of fact. Mr. Wise's Proposed Findings of Fact Paragraph Number in Recommended Order Sentence in Letter of Acceptance or Reason for Rejection 1, 13-20 Not proposed findings of fact. 2-3 6. 4-6, 11-12 Not supported by the weight of the evidence. 7-10 Not relevant to this proceeding. Copies Furnished To: Jo Ann Levin Senior Attorney Office of Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Louisa E. Hargrett Senior Attorney Department of the Lottery 250 Marriott Drive Tallahassee, Florida 32301 Chriss Walker Senior Attorney Department of Health and Rehabilitative Services 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Leroy Wise, Jr. 1526-A Patrick Avenue Tallahassee, Florida 32310 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350 William G. Reeves General Counsel Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350
The Issue The first issue in this case is the amount of attorneys' fees to assess against Respondent, Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering (Respondent or Division), pursuant to an Order of the First District Court of Appeal (First DCA) granting a motion by Petitioner, Ft. Myers Real Estate Holdings, LLC (Petitioner or Ft. Myers REH), for attorneys' fees pursuant to section 120.595(5), Florida Statutes (2010),1/ and remanding the case to DOAH to assess the amount. The second issue is whether Petitioner is entitled to recover attorneys' fees and costs incurred in this proceeding, and, if so, in what amount.
Findings Of Fact For reasons that the First DCA found to be a "gross abuse of agency discretion," the Division rendered a Final Order dismissing Ft. Myers REH's petition for a formal administrative hearing to contest the Division's denial of Ft. Myers REH's amended application for a quarter horse racing permit. The premise of the Division's Final Order was that Petitioner could not prove that it meets the requirements for a permit, hence its claimed injury was not "redressable." Ft. Myers REH appealed the Final Order. The Notice of Appeal to the First DCA was filed on April 5, 2010, signed by Cynthia Tunnicliff for Pennington, Moore, Wilkinson, Bell and Dunbar, P.A. (the Pennington firm). After two motions to extend the deadline for filing the initial brief, Ft. Myers REH filed its Initial Brief on July 26, 2010. With the Initial Brief, Ft. Myers REH filed a motion for an award of attorneys' fees under section 120.595(5), asserting that the agency action which precipitated the appeal was a gross abuse of the agency's discretion. The motion's prayer for relief asked for "entry of an order awarding the Appellant the attorneys' fees it has incurred prosecuting this appeal, pursuant to . . . Section 120.595(5)." As stated in the opinion, the First DCA found that the Division's Final Order was "contrary to the basic, settled principle of administrative law that a person whose substantial interests are determined by an agency is entitled to some kind of hearing . . . to challenge the agency's decision[.]" The court determined that the dismissal of Ft. Myers REH's petition was "so contrary to the fundamental principles of administrative law" that Petitioner was entitled to an award of attorneys' fees under section 120.595(5). To assess reasonable attorneys' fees, a starting place is necessarily the time records of Petitioner's appellate legal team. Although Judge Farmer offered his opinion that the time records had little to no significance in this case, nonetheless, even Judge Farmer accepted the time-based attorneys' fees shown on those time records as the base amount to which a multiplier should be applied. Therefore, the undersigned examined the time records in the context of the appellate record and considered the conflicting opinions of the parties' experts to assess whether the time incurred by Petitioner's legal team was reasonable in light of the steps needed to successfully prosecute the appeal. There was extensive motion practice in the appeal, which significantly increased the amount of time that might otherwise be considered reasonable for an appeal of an order summarily dismissing a petition for administrative hearing, with no record to speak of from proceedings below, such as would be developed in a trial or administrative hearing. Several motions were filed by the Division, including a motion to dismiss the appeal, which resulted in an Order to Show Cause directing Ft. Myers REH to demonstrate why the appeal should not be dismissed. The Division also filed two different motions to strike, one directed to Ft. Myers REH's response to the Order to Show Cause why the appeal should not be dismissed, and the other directed to the reply brief; both of these motions were denied. Ft. Myers REH filed even more motions than the Division. In addition to the motion for attorneys' fees pursuant to section 120.595(5) and two perfunctory motions for enlargement of time to file the initial brief, Ft. Myers REH also filed a motion for substitution of counsel, making the mid-stream decision that David Romanik, whose expertise was in gaming law, should be counsel of record instead of Cynthia Tunnicliff, whose expertise was in administrative and appellate law, even though both attorneys remained involved before and after the substitution. More substantively, in reaction to the Division's motion to dismiss, Ft. Myers REH filed a motion to supplement the record and a motion for judicial notice, which were denied; a motion to consolidate the appeal with a separate mandamus action it had filed, which was denied; and a motion to strike the Division's response to the motion to supplement the record, or, in the alternative, a motion for leave to respond to new legal issues raised in the Division's response, both of which were denied. The basis for the Division's motion to dismiss was that a newly enacted law rendered the appeal moot, because under the new law, Ft. Myers REH could no longer qualify for the quarter horse racing permit for which it had applied. The Division sought to invoke the general rule that the law in effect at the time of a final decision applies to determine whether to grant or deny an application for a permit or other form of license. See Lavernia v. Dep't of Prof'l. Reg., 616 So. 2d 53, 54 (Fla. 1st DCA 1993). Ft. Myers REH's motion flurry, even though unsuccessful, was a reasonable response to the Division's position in that Ft. Myers REH sought to demonstrate that one of the exceptions to the general rule, as recognized in Lavernia, was applicable. See, e.g., Dep't of HRS v. Petty-Eifert, 443 So. 2d 266, 267-268 (Fla. 1st DCA 1983)(under the circumstances of that case, applicants were entitled to have the law applied as it existed when they filed their applications). In its opinion, the First DCA acknowledged both the Division's mootness argument and Ft. Myers REH's contention that there were circumstances that would preclude the Division from applying the statutory changes to the permit application. The court deemed these issues more suitable for fleshing out in the administrative hearing on remand. See Ft. Myers, 53 So. 3d at 1162-1163. In addition to the other motions, Ft. Myers REH also filed a motion for an award of attorneys' fees and costs pursuant to section 57.105, in which Ft. Myers REH asserted that the Division's motion to dismiss the appeal was unsupported by material facts and then-existing law. The court considered and denied the section 57.105 motion. There were four attorneys who worked on the appeal on behalf of Ft. Myers REH: David S. Romanik from Oxford, Florida; and Cynthia Tunnicliff, Marc Dunbar, and Ashley Mayer, all of the Pennington firm in Tallahassee, Florida. The first three of these attorneys are long-time practitioners with substantial experience and particular areas of expertise. Mr. Romanik, who became the counsel of record in the middle of the appeal, is an attorney with 35 years' experience, gained in private practice and in executive, legal, and consulting positions in the racing/gaming industry. He was described as the "general counsel, sort of," for the Florida interests of Green Bridge Company, which is the parent company of, and primary investor in, Ft. Myers REH. While Mr. Romanik has some experience in administrative litigation and appellate practice, his primary area of expertise is in gaming law. Ms. Tunnicliff is a shareholder of the Pennington firm, with vast experience and a well-established excellent reputation for her expertise in administrative law and administrative litigation under the Administrative Procedure Act (APA), chapter 120, as well as in appellate practice. Ms. Tunnicliff's appellate experience is documented in well over 100 appeals in which she has appeared as counsel of record, spanning the last 25 years. Marc W. Dunbar has been practicing law for 17 years, and he also is a shareholder of the Pennington firm. Like Mr. Romanik, Mr. Dunbar's recognized area of legal expertise is in gaming law. For the last 13 years, he has been head of the firm's gaming law practice group, and he has substantial experience in gaming law and in providing consulting services to the pari-mutuel industry. Mr. Dunbar's testimony was that this has been the focus of his practice and has grown over the years such that it is now virtually all he does. Ashley Mayer was the lone associate who worked on the appeal. Ms. Mayer graduated in 2009 with high honors from Florida State University College of Law, where she was a member of the moot court team. Those who worked with her regularly at the Pennington firm, including Ms. Tunnicliff and Mr. Dunbar, thought very highly of her work as a one-year associate. Based on the expert opinions offered for and against the reasonableness of the time records for these four attorneys, including the hourly rates applied to the time entries, the undersigned finds as follows: there are some obvious flaws and less obvious insufficiencies in the time records that require adjustment; there is a large amount of duplication, which is tolerable to some extent given the stakes, but which exceeds a tolerable degree and requires some adjustment; the hourly rates for the two gaming law experts are too high for the non-gaming law legal services they each provided, requiring adjustment; and that the hourly rate for the one-year associate is too high, requiring adjustment. The time records of each of the four timekeepers will be addressed in turn, starting with the one-year associate, Ms. Mayer. As an example of an obvious flaw in the time records, the very first time entry is for researching and analyzing case law regarding bringing a civil rights lawsuit under 42 U.S.C. section 1983, for 2.8 hours. Another time entry described work related to a separate mandamus action, which Petitioner sought unsuccessfully to consolidate with the appeal. These entries are unrelated to the appeal. In addition, Ms. Mayer performed research regarding the process for assessing appellate attorneys' fees by remand to the lower tribunal. These entries do not relate to the appeal or to litigating over the entitlement to attorneys' fees. Several of Ms. Mayer's entries do not reflect legal work, but, rather, administrative or secretarial work, such as retrieving a law review article from the law library, conferring with a secretary regarding formatting briefs, and revising documents to conform to others' edits. Other than these entries, Ms. Mayer's time records seem generally appropriate, in that she performed a large amount of research before the initial brief, she performed drafting, and she continued to carry out research assignments throughout the appeal. Of the total 66.7 hours claimed, a reduction of 6.4 hours is warranted to account for the inappropriate entries. 60.3 hours are reasonable for Ms. Mayer. An hourly rate of $225 was applied to Ms. Mayer's time. Petitioner's expert attested, in general and in the aggregate, to the reasonableness of the hourly rates in Petitioner's time records for attorneys with comparable experience and skill, but gave no specific information regarding the basis for his opinions. Respondent's expert disagreed and testified that in her opinion, an hourly rate of $225.00 for a one-year associate was excessive. She based her opinion on The Florida Bar's 2010 Economics and Law Office Management Survey, which reported that for the north region of Florida, 47 percent of all attorneys at any experience level charge an hourly rate of $200.00 or less. In the opinion of Respondent's expert, a reasonable hourly rate for Ms. Mayer would be $150.00, instead of $225.00. While Respondent's expert's information was also somewhat generalized, the undersigned finds that based on the limited information provided, a reasonable rate for a highly skilled, but not very experienced attorney one year out of law school, would be $185.00 per hour. A reasonable attorney's fee for Ms. Mayer's legal work on the appeal is $11,155.50. Turning to Ms. Tunnicliff's time records, the hourly rate for Ms. Tunnicliff of $400.00, though high, is accepted as appropriately so. The rate is comparable to the rates charged by other attorneys of comparable skill and experience in the same locale, as ultimately agreed to by both parties' experts. Ms. Tunnicliff's time entries show that in general, she limited her hours appropriately to a high level of supervision, direction, and review, while allowing others, particularly Ms. Mayer, to conduct the more time-intensive research and drafting efforts. Based on the expert testimony and a review of the time record entries, a few adjustments to Ms. Tunnicliff's records are necessary. One-half hour is subtracted for an entry related to mandamus, because the mandamus action was separate and unrelated to work done to prosecute the appeal at issue. Another adjustment is necessary because of an error in the time records: The billing summary shows that Ms. Tunnicliff's total time was 31.6 hours, which was multiplied by the hourly rate to reach the fees sought for Ms. Tunnicliff's time. However, the individual time entries add up to a total of only 24.6 hours. With the additional deduction of one-half hour for work unrelated to the appeal, a total of 24.1 hours will be allowed for Ms. Tunnicliff's time. Applied to the agreed reasonable hourly rate, a reasonable attorney's fee for Ms. Tunnicliff's work on the appeal is $9,640.00. The time records for the two gaming law experts present more difficult issues, because the legal questions presented in the appeal were not gaming law questions; they were administrative law questions and, indeed, "basic, settled" administrative law questions. While certainly gaming law was the substantive, regulatory context in which these issues arose, it is clear from the time entry descriptions of exhaustive, duplicative legal research on rights to administrative hearings, party standing, and what law applies in license application proceedings, that at their core, the questions presented were general administrative law principles and were treated as such. Yet not only one, but two highly specialized gaming law experts whose experience and specialized expertise allow them to command hourly rates of $450 when practicing gaming law, spent most of the total attorney time prosecuting this administrative law appeal. Mr. Romanik's time records claim 195.5 total hours at $450 per hour, while Mr. Dunbar's time records claim 80.6 total hours, of which 30.2 were claimed at the rate of $450 per hour, while 50.4 additional hours were claimed at $300 per hour. The reduced $300 per-hour fee was an adjustment made at the urging of Petitioner's expert to account for research time spent not within Mr. Dunbar's area of expertise. Mr. Romanik's time records require adjustment. In general, many of the types of criticisms of these records by Respondent's expert are accepted, although the undersigned does not agree with the degree of adjustments deemed warranted by Respondent's expert. In general, Mr. Romanik's time entries reflect excessive hours spent by Mr. Romanik, doing tasks that were duplicative of tasks more appropriately performed by Ms. Mayer, which were, in fact, performed by Ms. Mayer, including research and initial drafting. Perhaps one reason for the sheer number of hours invested by Mr. Romanik was that he was performing research on basic, settled principles of administrative law, such as standing, hearing rights, licensing proceedings, what happens when the law changes while a license application is pending, and other questions of administrative procedure. Mr. Romanik's time records also reflect too many basic drafting tasks, such as initially drafting a request for oral argument. The time records also show excessive secretarial or administrative tasks, such as listing and downloading cases and uploading briefs. Not only did Mr. Romanik's specialized expertise in gaming law not facilitate his performing these tasks efficiently, but he inefficiently performed these tasks very expensively, i.e., at the claimed rate of $450 per hour. Nonetheless, Mr. Romanik apparently did the lion's share of work in redrafting the initial brief (initially drafted by Ms. Mayer), drafting the reply brief, drafting the numerous motions and responses to the Division's motions, and performing well at the oral argument. The high stakes and good outcome cannot be denied. Yet the total time claimed would be high at the hourly rate claimed, if Mr. Romanik were the sole attorney working on the appeal. Given his role as the "general contractor," it is conceivable that many of his hours were invested, or should be considered as having been invested, as "client" time in which Mr. Romanik was serving as the client liaison for the prosecution of the appeal to oversee the work done by the attorneys prosecuting the appeal. Regardless of how Mr. Romanik's hours are characterized, they were excessive and duplicative. To adjust for excessive time in tasks outside Mr. Romanik's area of expertise and for duplication, the undersigned finds that Mr. Romanik's time should be reduced by 83 hours. Reflecting the high stakes and good outcome, as well as the aggressive motion practice in the appeal, a reasonable--though still very high--number of hours for Mr. Romanik to have spent in prosecuting this appeal (with the substantial help of three other attorneys) is 112.50 hours. With almost all of the time Mr. Romanik spent in this appeal falling in areas outside of his recognized legal expertise, the undersigned finds that a high, but reasonable, hourly rate to apply to Mr. Romanik's time is $325.00. Essentially, Mr. Romanik's legal services fell more within the legal expertise of Ms. Tunnicliff. If $400.00 per hour is the acknowledged reasonable rate for someone of Ms. Tunnicliff's experience and expertise, the rate to apply to Mr. Romanik's time should be less, although not substantially so, recognizing that Mr. Romanik's gaming law expertise was a big advantage. If intricate issues of gaming law were involved in this appeal, as opposed to just being the substantive, regulatory context in which basic, settled principles of administrative law arose, then perhaps Mr. Romanik could command his standard hourly rate. Instead, with the predominant focus of Mr. Romanik's work, as reflected in his time entries on administrative and appellate law and procedure, the reasonable rate that will be applied to the reasonable time total found above is a blended rate that is discounted because of reduced expertise in the main area, but increased because of expertise in a collateral area. Applying the reasonable rate of $325.00 per hour to 112.50 hours for Mr. Romanik yields a reasonable attorney's fee of $36,562.50 for Mr. Romanik's prosecution of the appeal. Mr. Dunbar's time records suffer from the same essential problem as Mr. Romanik's--he is a gaming law expert, but his expertise was hardly utilized. If it was not necessary to tap into Mr. Romanik's gaming law expertise to any great extent, then it was not necessary and redundant to have a second gaming law expert substantially involved in the appeal. Additional problems with Mr. Dunbar's time records include several time entries with inadequate descriptions (e.g., "Research" or "Research re: key cite authority") and other entries with descriptions that did not seem to relate to the appeal (e.g., several entries two months after the initial brief was filed for "Research re: standards for appellate review of motion denial" when there was no denied motion for which appellate review was sought). Mr. Dunbar's time records had a large number of entries for performing basic research on questions of administrative law or appellate practice, such as standing, hearing rights, standards for supplementing the record on appeal, standards for motions to strike and to consolidate appeals, standards for reply briefs, and similar descriptions. Substantial adjustments are in order to remove the inadequately described time entries and the entries seemingly unrelated to this appeal and to substantially reduce the duplicative research done by Mr. Dunbar outside of his area that was also done by Ms. Mayer and/or Mr. Romanik and/or Ms. Tunnicliff. While some overlap is tolerable to ensure that all bases are covered, the time entries do not sufficiently establish what was added by Mr. Dunbar's substantial time- performing tasks outside his area of expertise to the already substantial time allowed for Mr. Romanik outside his area of expertise. Mr. Dunbar's reasonable time spent as a fourth attorney prosecuting this appeal is reduced by 43 hours, to 37.6 hours. A little more than half of the 37.6 hours found to be reasonable were in the non-research category, such as Mr. Dunbar's review and comment on the draft briefs and motions and assistance in preparation for oral argument. The research hours found reasonable were those that appeared to augment, but not duplicate, work by one or more other attorneys. As with Mr. Romanik, a blended reasonable hourly rate is applied, which recognizes that even for the non-research time allowed for Mr. Dunbar, his work was primarily outside his recognized legal expertise, although his expertise provided benefit in understanding the context in which the issues arose. An hourly rate of $300.00 is reasonable for 37.6 hours of work done by Mr. Dunbar in prosecuting this appeal, equaling a reasonable attorney's fee of $11,280.00. The following summarizes the number of hours, hourly rate, and resulting fee found to be reasonable for each of the four attorneys who aided in prosecuting the appeal: Attorney Hours Hourly Rate Fee Mayer 60.3 $185 $11,155.50 Dunbar 37.6 $300 $11,280.00 Romanik 112.5 $325 $36,562.50 Tunnicliff 24.1 $400 $ 9,640.00 Total hours by all attorneys: 234.50 Total time-based fees: $68,638.00 As previously alluded to, the stakes of this appeal were very high, in that without success in the appeal, Petitioner would have no chance of obtaining the quarter horse racing permit for which it had applied. While success in the appeal would not assure Petitioner that it would ultimately prevail in its effort to secure a permit, winning the appeal was a necessary step to keep the permit application alive and allow Petitioner to take the next step in the process. If, at the end of the long road ahead, Petitioner secures the sought-after permit, the value of that permit could be in the neighborhood of $70 million. Given the stakes, a higher amount of hours and greater degree of duplication were allowed than might normally be considered reasonable. The undersigned finds that there was not a huge risk factor with regard to the outcome of the appeal. While in a general sense and statistically speaking, odds always may be greatly against success in an appeal, those across-the-board statistics are mitigated in this case by such a clear violation of a "basic, settled" and "fundamental" principle of administrative law and due process. The complexity and novelty of the issues on appeal are reflected, as one would expect, in the number of hours found to be reasonable for Petitioner's team of attorneys to have spent in prosecuting this appeal. Even as reduced, the total hours found reasonable for this appeal are nearly three times the amount of time Respondent's expert would expect in the typical appeal. Thus, the hours found to have been reasonably invested were substantially higher than typical for an appeal, when one might have expected less hours than typical since this appeal did not follow a trial or administrative hearing. No evidence was presented to show that any of the four attorneys on Petitioner's appeal team were precluded from taking other work because of their role in the appeal or that there were any time constraints placed on the attorneys, either by the client or the circumstances. The evidence was not entirely clear regarding the nature of the arrangements with Ft. Myers REH for payment of attorneys' fees for the appeal. Two separate contingency fee agreements were admitted in evidence. One agreement, "[a]s of August 15, 2010[,]" was between Ft. Myers REH and Mr. Romanik (and his firm, David S. Romanik, P.A.). The operative term of the agreement provided that "[u]pon and after the execution of this fee agreement, the [Romanik] Firm shall handle this matter and all aspects of it on a contingent fee basis." The "matter" covered by the agreement was broadly described as "the pursuit of the issuance by the Division of Pari-Mutuel Wagering of a quarter horse racing and wagering permit . . . ." Therefore, from August 15, 2010, forward, Mr. Romanik and his firm agreed to be compensated on a contingent fee basis for not only the appeal, but also, any subsequent administrative hearings if the appeal was successful and any other administrative or judicial litigation required to secure the permit. Services would be considered successfully completed upon commencement of Ft. Myers REH's gaming operation pursuant to the permit. For such successful services, the Romanik firm would receive $5 million. In addition, the agreement provided that the firm would be entitled to "any and all fees that may be awarded" by any court or administrative tribunal. No evidence was presented regarding the prior fee arrangement that was in place until August 15, 2010, when the contingent fee arrangement took effect. Mr. Romanik and his firm entered into a separate contingency fee agreement with the Pennington firm to secure the Pennington firm's assistance, as a subcontractor, in prosecuting the appeal of the Division's dismissal of Ft. Myers REH's request for an administrative hearing to contest the denial of its quarter horse permit application. The agreement, dated September 1, 2010, was called "a revised representation agreement," which superseded "all prior agreements related to this matter." Payment for services under the agreement was contingent on success in the appeal and was set at "the greater of $100,000 or any fee award from the court, if any." No prior representation agreement for services provided by the Pennington firm in the appeal before September 1, 2010, either with Mr. Romanik and his firm or with Ft. Myers REH, was offered into evidence. However, Mr. Dunbar testified that before the Pennington firm entered into a contingency fee arrangement with Mr. Romanik and his firm, the Pennington firm provided services to Ft. Myers REH under a standard fee agreement by which the Pennington firm attorneys provided legal services for which they billed and were paid at their standard hourly rates. As of August 16, 2010, the standard fee agreement between Ft. Myers REH and the Pennington firm was apparently still in place, because in the motion for section 57.105 sanctions served on Respondent on August 16, 2010, and subsequently filed with the First DCA on September 20, 2010, Mr. Dunbar represented that Ft. Myers REH "had retained the [Pennington law firm] to represent it in this matter and has agreed to pay its attorneys a reasonable fee for their services." This statement was not qualified by any contingency, such as that Ft. Myers REH only agreed to pay a reasonable fee to the Pennington firm if the appeal was successful. Thus, although Mr. Dunbar seemed to indicate in his testimony that the September 1, 2010, contingent fee agreement was intended to apply retroactively, that testimony is inconsistent with the representation in the section 57.105 motion signed by Mr. Dunbar. The evidence establishes that contingency fee agreements were entered into midway through the appeal. The greater weight of the credible evidence was insufficient to prove that before August 15, 2010, the attorneys providing services in the Ft. Myers REH appeal would only be paid if the appeal was successful. Thus, the undersigned finds that the fee arrangements for the appeal were partially contingent. The contingent fee agreements were reached as an accommodation to Ft. Myers REH's desire for such arrangements, rather than as an enticement that had to be offered by Ft. Myers REH in order to secure competent counsel to represent it in the appeal. No evidence was presented detailing the nature and length of Petitioner's relationship with its team of attorneys. As noted, Mr. Romanik has a relationship with Petitioner and its parent that is akin to general counsel over the parent's Florida interests, though it is unknown how long this relationship has existed. The Pennington firm, likewise, has done work for Petitioner and its parent before and has sent invoices for legal services to Mr. Romanik for his review, approval, and transmittal to the parent for payment. It is unknown how extensive or over what period of time this relationship existed. Petitioner established that it incurred an additional $28,087.00 in attorneys' fees charged for litigating the reasonable amount of attorney's fees in this proceeding, plus $44,016.00 in expert witness fees. In addition, Petitioner incurred $1,094.43 for expense items, of which $409.50 represents the cost of the final hearing transcript, and the balance represents costs for copying, courier service, and postage. Respondent did not dispute the reasonableness of those attorneys' fees, expert witness fees, and costs.
The Issue Whether Respondent, Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering (“Division”), relied on an unadopted rule when it renewed a license to operate slot machines to Intervenor Calder Race Course, Inc. (“Calder”) for the 2017-2018 fiscal year, and whether Petitioner, Florida Horsemen’s Benevolent and Protective Association, Inc. (“Petitioner” or “FHBPA”), has standing to bring the instant action.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, including the parties’ Joint Pre-hearing Stipulation, the following Findings of Fact are made: The FHBPA is a Florida not-for-profit corporation representing licensed horse trainers and horse owners in Florida. The FHBPA’s stated purpose is to advance and promote the sport of thoroughbred horse racing and the thoroughbred horse racing industry in the state of Florida, and to assist its members in all matters that affect their interests in the racing industry. The Division is the state agency responsible for implementing and enforcing Florida’s pari-mutuel laws, including the licensing and regulation of all pari-mutuel activities conducted in the state. The Division’s regulatory duties include the adoption of “reasonable rules for the control, supervision, and direction of all applicants, permittees, and licensees and for the holding, conducting, and operating of all racetracks, race meets, and races held in this state.” § 550.0251(3), Fla. Stat. The Division is also responsible for the administration and regulation of slot machine gaming in Florida. § 551.103, Fla. Stat. Calder is the holder of a thoroughbred horse racing pari-mutuel permit and a slot machine license in Miami-Dade County, Florida. Calder is one of eight Florida pari-mutuel facilities authorized to operate slot machines and has continuously held a slot machine license since 2009. Gambling is generally prohibited under Florida law. See chapter 849, Florida Statutes, establishing criminal penalties for many forms of gambling.1/ However, certain types of pari-mutuel activities, including wagering on horse racing, have been authorized. In recent years, the Legislature has expanded the gambling activities that may occur at the facilities of licensed pari-mutuel permit holders by authorizing the operation of slot machines at pari-mutuel facilities. Article X, section 23 of the Florida Constitution, adopted in 2004, allows the governing bodies of Miami-Dade and Broward Counties to hold a county-wide referendum “on whether to authorize slot machines within existing, licensed parimutuel facilities (thoroughbred and harness racing, greyhound racing, and jai-alai) that have conducted live racing or games in that county during each of the last two calendar years before the effective date of this amendment.” Article X, section 23 also requires the Legislature to adopt implementing legislation. Chapter 551, Florida Statutes, originally enacted in 2005, is the implementing legislation for Article X, section 23. Section 551.104(10)(a)1. requires slot machine licensees, who are also thoroughbred racing permit holders to enter into a “binding written agreement” with the FHBPA governing the payment of purses on live thoroughbred races conducted at the licensee’s pari-mutuel facility, and to file that agreement with the Division. The statute provides that the agreement may direct the payment of purses “from revenues generated by any wagering or gaming the applicant is authorized to conduct under Florida law.” Calder has filed with the Division a binding written agreement with the FHBPA governing the payment of purses on live thoroughbred races conducted at Calder’s pari-mutuel facility. The agreement provides for direct payment of purses from revenues generated from Calder’s pari-mutuel wagering activities and Calder’s slot machine gaming activities.2/ Calder operated its first live thoroughbred horse racing meet on May 6, 1971, at the current location of the pari- mutuel facility. The facility’s legal description is unchanged since Calder’s initial racing permit was issued in 1969. A race meet has been conducted at the Calder pari- mutuel facility every year from 1971 through 2017. Since at least 1992, Calder has been operating live pari-mutuel activities on the racetrack apron, in front of the grandstand. In July 2009, Calder filed for and obtained a slot machine license, pursuant to the provisions of Article X, Section 23, and sections 551.101 and 551.102(4). Section 550.105(1) provides that a slot machine license is effective for one year after issuance and must be renewed annually. Calder has renewed its slot machine license every year since 2009. At the time Calder sought its initial slot machine license, and just prior to constructing its slot machine facility, Calder’s pari-mutuel facility included: a large main dirt race track, and a smaller turf course; a paddock area, including a patron viewing area of the paddock, and a walking ring in the paddock area; 1,850 stables and a barn area (the backside); a detention barn; state veterinary offices; a totalizator board; a winner’s circle; outdoor pari-mutuel wagering areas; a large grandstand building built in 1971 which housed: a grandstand seating area, which had a capacity in excess of 10,000 seats; several restaurants and lounges; pari-mutuel wagering betting areas; freestanding pari-mutuel machines; stewards’ offices; state offices; a money room; restrooms; and elevators to access the various floors of the building; outdoor concessions (tiki huts), outdoor patron seating, and an outdoor pari-mutuel wagering area to accommodate patrons who sat outside the grandstand building; and parking lots, sidewalks to connect to the various areas, and other physical components associated with the conduct of live thoroughbred racing. All of the above-mentioned areas combined to support the live pari-mutuel wagering activities conducted by Calder and together constituted Calder’s pari-mutuel facility as defined in section 550.002(23). Calder’s designated slot machine gaming area was built in a separate building, hereinafter referred to as the “Casino,” located within the boundaries of Calder’s facility. The Casino opened for business in 2010. Calder built a covered sidewalk between the grandstand and the Casino to facilitate the movement of patrons between the two parts of the property. While the indoor grandstand was a dedicated location for patrons to watch the races and place bets, patrons were also able to watch the races and place bets outside on the racetrack apron, in front of the grandstand. As noted above, Florida law currently authorizes eight licensed pari-mutuel facilities to operate slot machine gaming facilities. These facilities consist of two thoroughbred permit holders (Calder Race Course and Gulfstream Park); one harness horse track permit holder (Pompano Park); one quarter horse permit holder (Hialeah Race Track); two dog track permit holders (Hollywood and Flagler dog tracks); and two jai alai permit holders (Dania and Miami Jai Alai). Section 551.114(4), Florida Statutes, provides: Designated slot machine gaming areas may be located within the current live gaming facility or in an existing building that must be contiguous and connected to the live gaming facility. If a designated slot machine gaming area is to be located in a building that is to be constructed, that new building must be contiguous and connected to the live gaming facility. Calder is the only one of the eight slot machine licensees that chose to locate its slot machine facility in a separate, newly constructed building. All seven of the other licensees operate their slot machine facilities within the same buildings as their previously existing pari-mutuel facilities. When it issued Calder’s initial slot machine license, the Division determined that Calder’s newly built Casino was in compliance with the statute’s requirement that it be “contiguous and connected” to the existing pari-mutuel facility. This determination was not challenged by the FHBPA or any other entity. The Casino has remained in the same location on the Calder property since it opened in 2010. Calder’s grandstand was built in 1971 and was approximately 420,000 square feet, seven stories tall, and seated approximately 15,575 people. Calder’s live thoroughbred racing attendance and revenues began to decline in 2004 and continued to drop throughout the next decade. By 2013, attendance at Calder for thoroughbred racing had dropped to a total of 118,000 patron visits, or an average of 439 patrons per day. This contrasts with 2004, when total attendance was 841,000, for an average daily attendance of 3,351. Horsemen’s purses similarly declined, from $26,707,755 in 2004 to $7,751,215 in 2013. In an effort to cut costs, Calder began closing off floors of its grandstand in 2008. By the 2013 and 2014 seasons, only about half the grandstand remained in use. Calder’s grandstand building did not have a traditional central air conditioning system; rather, it had cooling towers at either end of the building. The design of the air conditioning system was such that it continued to cool all seven floors even when some had been closed off from use. Therefore, the only savings Calder could realize from closing off floors was in labor costs. Calder’s air conditioning costs for the grandstand were around $55,000 per month. Calder was also required by law to maintain elevator service to all floors, at a maintenance cost of about $140,000 per year. These costs were incurred whether or not the track was conducting a race meet. A further blow to Calder’s thoroughbred racing fortunes came when Gulfstream Park decided to race year-round, thereby coming into direct competition with Calder’s winter race meet. By 2013, Calder was losing more than $5 million per year on its pari-mutuel activities. In 2014, Calder decided to cut its losses by demolishing the grandstand building. Calder did not request permission from the Division to tear down the grandstand. However, Division personnel visited Calder regularly and were well aware of Calder’s plans. No one from the Division advised Calder that tearing down the grandstand would create a slot machine compliance issue. Also in 2014, Calder entered into a contract with Gulfstream Park to outsource the operation of its race meets. Since July 1, 2014, Gulfstream Park and its racing personnel have conducted Calder’s full schedule of live racing at the Calder facility. Gulfstream Park’s first season of operating the Calder race meet began in October 2014. Gulfstream Park initially intended to operate the race meet from the racetrack apron, thereby foregoing a lease on Calder’s still-standing grandstand. However, due to the short time between execution of the lease and commencement of the race meet, Gulfstream Park was forced to lease the first floor of the grandstand to run the meet and part of the seventh floor to house the race officials. The 2014 race meet was the last time that patrons placed bets in the Calder grandstand building. In 2015, Calder’s race meet was conducted exclusively on the apron. In addition to the outdoor areas Calder has historically maintained on the apron, a tent was erected to house the wagering machines, video screens, and seating for patrons. The grandstand was being prepared for demolition and was not used during the 2015 Calder race meet. Demolition of the grandstand began in 2015 and was completed in 2016. At present, Calder’s live viewing locations include areas in front of where the former grandstand building stood, as well as to the east of the former grandstand area. These areas still contain outdoor seating and tiki huts where patrons can get food and drinks, view the race track, and wager on live racing events. The distance a patron must travel from the Casino to the pari-mutuel wagering area is roughly the same as it was when the grandstand building existed. The difference is that prior to closure of the grandstand, patrons could exit the Casino, walk a short distance on the covered walkway, and then enter the air-conditioned grandstand building, through which they could proceed the hundred yards or so to the wagering area. Now, patrons wishing to go from the Casino to the outdoor pari-mutuel wagering area must take a walkway that proceeds around the fenced-off footprint of the old grandstand building. For a portion of the path, the walkway is not covered. The Casino remains where it was in 2010. The wagering area on the racetrack apron has not moved. The only change in the Calder facility is the demolition of the grandstand building. Calder’s plan is to convert the former grandstand area into a greenspace. The entire property remains under the control of Calder. Nothing obstructs passage between the Casino and any other portion of the Calder property. Since Calder opened the Casino in 2010, the Division has renewed its slot machine license annually, without objection from any third party, through the renewal for the fiscal year commencing July 1, 2016. Even the instant case is not a direct challenge to Calder’s 2017-2018 license renewal. Commencing on October 5, 2016, the FHBPA began writing to various Division personnel complaining that the demolition of the grandstand caused the Calder Casino to no longer be “contiguous and connected to a live gaming facility” as required by section 551.114(4), and requesting the Division to commence enforcement action against Calder. In October 2016, the Division’s Office of Investigations conducted an inspection of Calder and did not find any violation related to section 551.114(4). Finding no violations during its inspection, the Office of Investigations saw no need to make a written report and did not initiate a formal investigation. Calder applied for its 2017-2018 slot machine license renewal on May 9, 2017. On June 20, 2017, the FHBPA served the Division with a 30-day notice of its intention to file an unadopted rule challenge against the Division “for its willful failure to enforce the requirements of [section 551.114(4)] by continuing to allow [Calder], as a Division licensee, to maintain its license while it clearly operates its Slots Building in violation of said statute.” On July 9, 2017, the Division renewed Calder’s slot machine license for the license year commencing July 1, 2017, without any further analysis as to whether the Casino was in compliance with section 551.114(4). The FHBPA contends that it has standing to challenge the Division’s purported unadopted rule because a substantial number of its members would be substantially affected by the Division’s regulatory actions. The FHBPA notes that it is specifically named in the statutes at issue in this proceeding and is itself substantially affected by agency decisions regarding Calder’s compliance with regulatory statutes because the FHBPA receives a percentage of the total horse racing purse pools awarded at Calder. The Legislature has enacted specific conditions to be met by applicants for slot machine licenses to ensure the promotion of horse racing in Florida. The FHBPA concludes that compliance with the relevant statutes, which is intended to promote horse racing in the state, directly affects it and its members. The Petition states that the necessary effect of compliance with section 551.114(4) is to expose slot machine players to the live thoroughbred racing being conducted elsewhere on the premises. This exposure necessarily increases the chance of patrons wagering on horseracing, thereby increasing the monies being directed to the purse pool for the benefit of FHBPA members. The Petition alleges that the current configuration at Calder’s premises fails to expose the slot machine patrons to the horseracing being conducted and decreases the chances those patrons will wager on horseracing. In contrast, the Division observes that this proceeding relates to a slot machine license and neither the FHBPA nor its members are licensed or regulated under chapter 551, nor do they promote or participate in the slot machine industry. The Division concedes the FHBPA’s interest in Calder’s thoroughbred horseracing activities under chapter 550, and the slot machine revenues the FHBPA receives to supplement racing purses pursuant to chapter 551. However, the Division points out that if the FHBPA receives the relief it seeks, the prospective effect would be to deprive its members of the revenues they derive from Calder’s slot machine operations. The Division suggests that the FHBPA lacks standing because its asserted scope of interest and activity--the maximization of purses to be paid out to its members--is irreconcilably adverse to the relief its requests in this proceeding. In the Petition, the FHBPA asserted that its interest in the agency statement is lost revenues. The alleged lack of “contiguity and connectedness” will fail to expose the slot machine patrons to the horseracing being conducted elsewhere on the Calder premises, thereby decreasing the chance that these slot machine players will wager on horseracing. The FHBPA did not directly address the loss of slot machine revenues its members would suffer if Calder’s slot machine license were not renewed. The FHBPA’s chief concern is that slot machine wagering was originally approved only as an adjunct to existing, licensed pari-mutuel facilities, with the promise that slot machine revenues would support and enhance Florida’s horseracing, greyhound racing, and jai alai industries. Now, at least at Calder, the tail is wagging the dog: casino revenues far outstrip live thoroughbred racing revenues. Calder is actively disinvesting in its thoroughbred racing business, outsourcing its operation to Gulfstream and tearing down its grandstand. Maureen Adams, Calder’s president and general manager, candidly testified that Calder would get out of the live horseracing business altogether if the Legislature would “decouple” the slot machine operations from the pari-mutuel operations. It is found that the FHBPA has articulated a sufficient interest to establish standing to bring this unadopted rule challenge as part of its effort to preserve what it contends is the purpose of the constitutional amendment and implementing legislation establishing slot machine operations in Miami-Dade and Broward Counties: the promotion of and economic support for the pari-mutuel gaming industry, including thoroughbred horseracing. The FHBPA’s asserted interest in this proceeding is consistent with the organization’s stated purpose. As to whether the Division’s action constituted an unadopted rule, the Petition alleged: The Division's approval and issuance of a renewed slot machine gaming license to Calder reflects and implements a statement of agency policy interpreting the "connected and contiguous" requirement of Fla. Stat. 551.114 so as to allow the issuance of slot machine gaming license to permitholders whose designated slot machine gaming area is contained at a location that is a distance from and physically apart from the area where a live gaming facility is located. This new policy, which has not been promulgated as a rule, is a statement of general applicability because it announces an inclusive interpretation of the term "connected and contiguous" that will serve as the basis for other pari-mutuel wagering permitholders to operate a slot machine gaming facility. The evidence presented at the hearing established that the operation of slot machines is limited to the eight pari- mutuel facilities in Broward and Miami-Dade Counties that were in existence at the time of and had conducted live racing or games in the two calendar years prior to the adoption of Article X, Section 23. Absent a further constitutional amendment, the class of slot machine licensees cannot expand beyond these eight pari-mutuel facilities. Even if it were conceded that the Division’s statement is one of general applicability, its potential application would be limited to these eight entities. Section 550.114(4) provides three options for the location of “designated slot machine gaming areas.”3/ First, the slot machine gaming area may be located “within the current live gaming facility.” Second, the slot machine gaming area may be placed “in an existing building that must be contiguous and connected to the live gaming facility.” Third, the slot machine gaming area may be located in a newly constructed building, provided that new building is contiguous and connected to the live gaming facility. The evidence presented at the hearing established that seven of the eight eligible pari-mutuel facilities chose option one for their slot machine gaming areas; that is, they located the slot machine gaming area within their current live gaming facilities. No one chose option two. Only Calder chose option three and constructed a new building to house its slot machine gaming area. As matters stood at the time of the hearing, Calder was the only licensee that could possibly be affected by a Division interpretation of the “contiguous and connected” requirement of the statute. Unless another pari-mutuel facility in the future undertakes to construct a new building for its slot machine gaming area or to move its slot machine gaming area to a different existing building, the alleged unadopted rule is applicable only to Calder. The evidence indicated that the Division did not give much thought to the question whether demolishing the grandstand could affect Calder’s slot machine licensure until the FHBPA began complaining about it. The Division then considered the FHBPA’s objections and concluded that Calder’s slot machine license should be renewed.4/ The Division’s reasoning was essentially that the Casino had not moved, the racetrack had not moved, and no impediment had been placed between them. The demolition of the grandstand had the effect of forcing patrons to take a slightly different path between the Casino and the pari-mutuel facility, and to walk part of the way in the elements rather than briefly under a covered walkway and then through an enclosed air conditioned grandstand. The Casino has never been physically attached to the pari-mutuel facility; it has always been linked by a sidewalk. The demolition of the grandstand did nothing to change the position of the Casino in relation to the pari-mutuel facility. Both facilities are on the Calder property and are still linked by a sidewalk. The loss of the grandstand only made the passage from the Casino to the racetrack less comfortable for those who prefer air conditioning to a walk outdoors. The Division concluded that the Casino is now as “contiguous and connected” to Calder’s pari-mutuel facility as it ever was. The FHBPA contends that the absence of an air conditioned grandstand building is critical. Because section 551.114(4) states that a designated slot machine gaming area may be located within the current live gaming facility, the Legislature “is necessarily stating that a ‘live gaming facility’ is a structure that is able to house the operation of a slot machine gaming area.” If an area cannot house a slot machine gaming area, then it cannot be a “live gaming facility” within the terms of the statute. The FHBPA next points to the testimony of Casey Smith, the Division’s Chief of Slot Operations, who stated that a tent on the apron of a racetrack would not be a viable option for a slot machine operation because “slot machines would be sensitive to temperature, humidity, stuff like that, so you know, doing anything long term in a tent like that probably is not something that’s going to work.” Mr. Smith also noted the necessity of security and a surveillance system. The FHBPA argues that Mr. Smith’s testimony, read together with the “live gaming facility” language of section 551.114(4), “make it clear that a ‘live gaming facility’ must necessarily be an air conditioned structure with enclosed walls, a roof and electricity that is capable of having a surveillance system installed.” In the case of Calder, the “live gaming facility” must be an air conditioned structure with enclosed walls and a roof that allows the public to view and wager on thoroughbred horseraces being conducted “live and in plain view.” The FHBPA contends that to interpret “live gaming facility” to mean anything less than an air conditioned structure with enclosed walls and a roof would render the first part of section 551.114(4) “meaningless.” The FHBPA’s argument would have some force if the first part of section 551.114(4) stood alone, i.e., if a pari- mutuel licensee’s only option were to place the slot machine gaming area within the current live gaming facility. As noted above, however, the plain language of the statute gives a licensee two other options: to place the slot machine gaming area in an existing building that is contiguous and connected to the live gaming facility, or to construct a new building that is contiguous and connected to the live gaming facility. The FHBPA’s contention is that the statute requires a live gaming facility to be fully capable of housing slot machines, even where the slot machines are in fact housed elsewhere. The language of section 551.114(4) does not support this reading.5/ It is found that the Division’s action in approving the renewal of Calder’s slot machine license was based on facts specific to Calder, applied only to Calder, and constituted an order, not an unadopted rule. “Contiguous and connected” is an undefined term in the statute. Without belaboring the dictionary definitions of these common words, the undersigned finds that the Division was entitled to some exercise of discretion in applying the term “contiguous and connected” to the unique facts on the ground at Calder, without going through the process of adopting a rule that would apply only to Calder. Because the Division’s issuance of a slot machine license renewal to Calder was not an unadopted rule, there is no need to further address the correctness of the Division’s interpretation of “contiguous and continuous.”
The Issue Whether Respondent violated Section 112.3148(3), Florida Statutes, by committing the acts alleged in the Order Finding Probable Cause and, if so, what penalty is appropriate.
Findings Of Fact Respondent, John Pollet (Pollet), served continuously as Mayor of Kissimmee from November 1, 1991, until he was suspended in 1995. As Mayor, Pollet was a voting member of the City Commission and signed contracts the city entered. At all times relevant to the instant case, George Geletko was employed as the Municipal Marketing Manager with Waste Management, Inc. Mr. Geletko's primary responsibility was to make sure that contracts between Waste Management, Inc., and its municipal customers were properly administered. Waste Management, Inc., had a contract with the City of Kissimmee to provide waste disposal services that was scheduled to expire in 1994. However, on September 6, 1994, the City of Kissimmee renewed its contract with Waste Management, Inc. Mr. Geletko was responsible for administering Waste Management's contract with the City of Kissimmee and was the contact person between Waste Management, Inc., and the City of Kissimmee. As the Municipal Marketing Manager for Waste Management, Inc., Mr. Geletko sought to influence or encourage the Kissimmee City Commission and Pollet to do business with his company. In order to accomplish this, Mr. Geletko, in his position with Waste Management, Inc., took actions that directly or indirectly furthered or communicated his intention to influence or encourage the Kissimmee City Commission and Pollet to do business with Waste Management, Inc. In the spring of 1994, during a telephone conversation, Pollet asked Mr. Geletko if Waste Management, Inc., had any tickets to an Orlando Magic basketball game. Mr. Geletko did not respond directly to Pollet's inquiry, but stated that "whatever we did, we would have to be in compliance with all ordinances and the State Code of Ethics." Pollet told Mr. Geletko that he would get back with him. However, no further inquiry regarding Orlando Magic tickets was made by Pollet to Mr. Geletko. At the time Pollet asked about Orlando Magic basketball tickets, he believed Mr. Geletko had taken former City Commissioner Richard Herring to a Magic game at some point prior to his inquiry. Pollet testified that the inquiry regarding Orlando Magic basketball tickets was made based on personal political considerations involving former City Commissioner Herring, who was sometimes an ally and sometimes a foe of Respondent in matters relating to City politics. However, Pollet gave no such explanation to Mr. Geletko during their conversation involving Orlando Magic basketball tickets. Based on Pollet's inquiry, Mr. Geletko felt that Pollet was asking him for tickets to the Orlando Magic game. Mr. Geletko, as a representative of Waste Management, Inc., gave gifts, including golf games and meals, to Pollet both before and after Respondent asked him about the Orlando Magic Tickets. Pollet's approach to Mr. Geletko was a solicitation for tickets. At all times relevant to the instant case, Charles Voss was a vice president with Camp, Dresser, and McKee, an environmental engineering firm. Camp, Dresser, and McKee had two contracts with the City of Kissimmee to provide engineering services. The City of Kissimmee and Camp, Dresser, and McKee entered into one such contract on November 2, 1993. Mr. Voss was responsible for marketing Camp, Dresser, and McKee's services to the City of Kissimmee. Mr. Voss sought to influence or encourage the Kissimmee City Commission and Pollet to do business with Camp, Dresser and McKee. To this end, Mr. Voss took actions that directly or indirectly furthered or communicated his intentions to influence or encourage the Kissimmee City Commission and Pollet to do business with Camp, Dresser, and McKee. In March 1993, Pollet called Mr. Voss and asked him if Camp, Dresser, and McKee had any tickets to the Nestle Invitational Golf Tournament. Mr. Voss told Pollet that his firm did not have tickets to the 1993 Nestle Invitational Golf Tournament. Based on Respondent's question, Mr. Voss thought Respondent was asking him for tickets to the golf tournament. Pollet testified that he asked about the passes because he wanted to know if Mr. Voss was going to attend the tournament. According to his testimony, Pollet thought that if Mr. Voss were going to the golf tournament, they could meet there. Notwithstanding his testimony, Pollet never asked Mr. Voss whether he was going to the tournament. In both 1994 and 1995, Pollet accepted passes to the Nestle Invitational Golf Tournament as gifts from Mr. Voss and Camp, Dresser, and McKee. Mr. Voss gave these golf tournament passes to Pollet because Pollet expressed an interest in the tournament in 1993. Pollet did not pay for the golf tournament passes he received from Mr. Voss in 1994 and 1995. Mr. Voss, as a representative of Camp, Dresser, and McKee, had given Pollet various gifts in the past. Except for partial payment for certain tickets, Pollet has never paid for any of these gifts. Respondent's approach to Mr. Voss was a solicitation for tickets to the 1993 Nestle Invitational Golf Tournament. Respondent admits he has accepted gifts from both Waste Management, Inc., and Camp, Dresser, and McKee.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order and Public Report be entered finding that Respondent, John Pollet, violated Section 112.3148(3), Florida Statutes; imposing a civil penalty of $1,000.00 per violation; and issuing a public censure and reprimand. DONE and ENTERED this 1st day of November, 1996, in Tallahassee, Florida. CARLOYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-647 Filed with the Clerk of the Division of Administrative Hearings this 1st day of November, 1996. COPIES FURNISHED: Eric S. Scott, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Mark Herron, Esquire 216 South Monroe Street Tallahassee, Florida 32301 Bonnie Williams, Executive Director 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Phil Claypool, General Counsel 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Kerrie J. Stillman Complaint Coordinator Post Office Drawer 15709 Tallahassee, Florida 32317-5709
