The Issue Whether Respondent, Citrus Direct, LLC, owes Petitioner, Marvin Hajos, the sum of $5,397.00 for citrus that was purchased, but not harvested.
Findings Of Fact At all times material to the instant case, Petitioner and Citrus Direct were involved in the growing and marketing of citrus fruit in the State of Florida. On June 12, 2008, Citrus Direct agreed to purchase fruit from Petitioner. The terms of their agreement were reduced to writing. The "Fresh Fruit Contract" provided that Citrus Direct would purchase from Petitioner all of the varieties of citrus fruits of merchantable quality as delineated in the contract. More specifically, Citrus Direct was entitled to purchase "Valencia" oranges from Petitioner for "$3.00 on tree net" per box. The terms of the contract suggests that it is for "citrus fruit for the year 2005/2006 and merchantable at the time of picking. . . ." The contract does not identify a total amount of fruit expected from the grove. Prior to entering into the above-referenced contract, Petitioner had made arrangements with an unidentified third party to have the grove picked, but for some reason, that agreement fell through. Jason Cooper, known in the citrus business as a "bird dog," brought the parties together. Mr. Cooper is an independent contractor who finds grove owners who need to have their groves picked and refers them to buyers. The "Fresh Fruit Contract" was signed on June 12, 2008. The grove was picked on June 15, 17, 26 and 30, 2008. Two hundred and sixty-four boxes of fruit were picked from Petitioner's grove. Petitioner received payment of $603.00. Citrus Direct forwarded an additional check for $189.00 to Petitioner; however, Petitioner did not receive the check. No admissible evidence was received regarding the number of boxes of fruit that were anticipated from the grove. However, on June 30, 2008, all the fruit that was reasonably available to be picked in the grove had been picked.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department Agriculture and Consumer Services enter a final order dismissing Petitioner, Marvin Hajos', Amended Complaint, but requiring Respondent, Citrus Direct, LLC, to pay Petitioner $189.00, if that amount has not already been paid. DONE AND ENTERED this 27th day of April, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 27th day of April, 2009. COPIES FURNISHED: Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, Mail Station 38 Tallahassee, Florida 32399-0800 Marvin Hajos 3510 Northwest 94th Avenue Hollywood, Florida 33024 State Farm Fire and Casualty Company One State Farm Plaza Bloomington, Illinois Hans Katros Citrus Direct, LLC 61710 1406 Palm Drive Winter Haven, Florida 33884
The Issue The issue in this case is whether the licensure application filed by Petitioner, Sun and Earth Citrus, LLC ("Sun and Earth"), for licensure as a citrus fruit dealer should be denied or approved by the Florida Citrus Commission (the "Commission").
Findings Of Fact Sun and Earth is a Florida limited liability company formed for the purpose of buying and selling citrus products. Vazquez is the sole owner of Sun and Earth and serves as its president. The company was formed in January 2012. Vazquez formed the company partly in response to a series of events concerning his brother, William. A discussion of those facts is pertinent to the underlying facts in this case: William operated businesses named Zumoval Citrus Packer and Zumoval Trucking and Cold Storage. William obtained a license to operate a packinghouse after seeing other dealers acting in a way he believed to be illegal. He renewed the license each year for two years, but when he attempted to renew the third year, his application was denied. At the Commission meeting where William's renewal application was considered, Vazquez appeared on William's behalf because William could not adequately articulate his position. The meeting did not go well for William; Vazquez had to calm William down and keep him from yelling at the commissioners during the meeting. The meeting date was January 18, 2012. After the meeting at which William's license renewal was denied, Vazquez announced to Department employees that because his brother could not be licensed, Vazquez would seek his own license. Inasmuch as Vazquez had appeared on William's behalf, and they were siblings, the Department had some concern that Vazquez's application was a subterfuge and simply an attempt to allow William to operate using Vazquez's license. On March 2, 2012, Vazquez filed an application with the Department; it was received on March 6, 2012. The application, as filed, said the proposed business would include operation of a packinghouse, being a fruit broker, operating a roadside stand, and being a wholesaler. The application contained information about Sun and Earth, as well as its owner, Vazquez. An application fee of $25.00 and a cashier's check in the amount of $1,000.00 for a bond were included with the application. Upon its initial review of the application, the Department noticed several errors and omissions. Ms. Wiggins, a license and regulation specialist for the Department, contacted Vazquez via telephone on March 6, 2012, to discuss her findings concerning the application content. She told Vazquez that a substantially larger bond was required for a license that included a packinghouse. She also noted that if the proposed roadside stand was purchasing fruit directly from a grower, then it must also have a bond. If the fruit was being purchased from a packinghouse, no bond would be required. Ms. Wiggins asked Vazquez to identify the packinghouse(s) from whom he intended to purchase fruit. The purpose of her request was to verify that fruit was being purchased from a packinghouse, rather than from a grower. Vazquez sent Ms. Wiggins an email the very next day confirming the telephone discussion. Vazquez, in response, asked that the packinghouse designation be removed from his application. He also stated that according to everything discussed during their telephone conversation, it was his contention that the application was complete. He then questioned why his brother's company--which had recently been denied renewal of its license--was pertinent to his application for a citrus dealer license. Vazquez asked when his application would be considered by the Commission. Ms. Wiggins replied to the Vazquez email via an email dated March 8, 2012. The email noted that Ms. Wiggins had removed the packinghouse request from the application. It also addressed the need for different reference letters relating to Sun and Earth. Then the email set out five enumerated issues that still needed to be addressed, to wit: An explanation as to how he operated Zumoval Citrus, LLC, without a wholesaler license from 2009 to 2011. How Zumoval Citrus, LLC, continued doing business in 2011, when it became inactive in September 2010. An explanation of his probation or parole from New York State relating to a conviction for stolen property. A list of the packinghouses from which he would be purchasing fruit. An address for the roadside stand. Ms. Wiggins also advised Vazquez in her email that the Department could not grant a conditional approval of the application in that there were "unusual or questionable circumstances" surrounding the filing of the application. That is, the relationship between Vazquez and William caused some concern for the Department. Ms. Wiggins reminded Vazquez that the $1,000.00 bond submitted with the application would not be sufficient if Sun and Earth planned to purchase fruit from growers. She then advised Vazquez that if he would submit all the missing information at least five days prior to the Commission meeting scheduled for March 21, 2012, the application would be presented for review. Vazquez responded via email dated March 13, 2012. He provided responses to the five enumerated issues set forth in Ms. Wiggins' email as follows: He explained that neither of his companies continued to do business after they were declared inactive in September 2010. He explained that he had another business entity that was operating, but neither of the questioned businesses was in operation. Included in above response. Vazquez had presented evidence of his conviction in the application; he did not believe anything further was required. He was upset that Ms. Wiggins apparently had information from his other prior transgressions (more on this below) and wanted to know what information she had seen. Vazquez refused to provide names of the packinghouses with whom he planned to do business. He stated that the inquiry was outside of Ms. Wiggins' "scope of duties," and he did not have to comply with her request. He asked that the roadside stand designation be removed from the application. Vazquez's email then became somewhat belligerent and argumentative. He concluded with a demand that his application be presented to the Commission on March 21, 2012. The reason Ms. Wiggins had asked Vazquez for a list of the packinghouses he planned to do business with was two-fold: First, Vazquez had indicated he planned to have a roadside stand. If the stand was going to get its fruit from a grower, then a larger bond would be required. If the fruit was to come from packinghouses, then there would be no bond requirement. Ms. Wiggins attempted to ascertain whether Vazquez was planning to obtain fruit from packinghouses. Second, due to Vazquez first indicating he would operate a packinghouse and then removing that designation, Ms. Wiggins wanted to make sure he was being honest and truthful in his responses. Citrus dealers by and large police themselves, so it is important that the Department know they can trust entities to which they issue licenses. By striking the roadside stand item from his application, Vazquez still did not alleviate the basis for Ms. Wiggins' questions about packinghouses. The Department decided that because of the questionable and unusual circumstances surrounding Vazquez's application, it would not issue a conditional license. Rather, it would process the application and send it on to the Commission for review and approval or denial. After further review, the Department ultimately decided that it would recommend denial of the Sun and Earth application when it was forwarded to the Commission. Vazquez was notified of the decision by way of a letter dated May 3, 2012, sent by certified mail, return receipt requested. The letter advised Vazquez that he could challenge the decision in an administrative hearing. Vazquez chose to do so, thereby staying any further action on the application until a final order could be issued in the instant proceeding. The basis of the Department's decision was that the Sun and Earth application had misrepresented Vazquez's circumstances with respect to his work history, residence, and criminal background. Further, Vazquez had been reluctant to respond to requests for information after reasonable inquiry by the Department. As to Vazquez's reported work history as set forth in the application, Vazquez had initially provided a work history summary in response to question 18. The response indicated employment from March 2007 until January 2011 with Associated Produce in Bronx, New York. In fact, Vazquez was incarcerated in New York for most of that time period. An amended response to question 18 was submitted; it did not list Associated Produce as a former employer. Vazquez explained the erroneous information thusly: The dates of employment were taken directly from his resume. His resume was attached to the application only to show his employment duties, not as evidence of the dates he actually worked. It was simply a mistake, said Vazquez, not an attempt to mislead the Department. Vazquez's testimony in this regard was self-serving and not credible. As to his history of residence in the state, the application said Vazquez had lived at the same address in Florida for the past five years. In truth, Vazquez was in prison in New York and did not move to Florida until 2009. Again, Vazquez said that was simply a mistake and was not meant to mislead the Department. Again, the testimony provided by Vazquez as to this issue was not credible. The issues concerning Vazquez's criminal history are more complex. Question 10 in the application asks for information concerning investigations, charges, arrests or convictions "in the last 10 years." Vazquez provided information concerning an arrest in October 2010 for carrying a concealed weapon. He also provided the Order acquitting him of the charge. The arrest report references probation for a conviction of possession of stolen property in New York. The Department, during its background check of Vazquez, found that he was on parole. Vazquez was asked to clarify the probation versus parole discrepancy. He explained that between the arrest and acquittal, his parole officer had submitted a violation of parole, but that was lifted after his acquittal. The Department's concern about Vazquez's relationship with his brother was founded on the fact that Vazquez represented William before the Commission just prior to the filing of the Sun and Earth application. That representation preceded Vazquez's remark to a Department employee that if his brother could not have a license, he would seek one himself. The statement put the Department on notice that the brothers may be trying to circumvent William's loss of his license. At final hearing, it was evident the brothers had no such intent. In fact, William was not cooperative with Vazquez's efforts to obtain a license that would, in effect, compete with William's business. The Department also raised a concern about the letters of reference received in support of the Sun and Earth application. Normally, the Department would forward Letter of Reference forms to businesses, and they would be returned directly to the Department. In this case, Vazquez took the letters to business owners himself. There is nothing inherently improper about doing this, but it caused some concern to the Department in a case where red flags had already been raised. Ms. Wiggins had never had an applicant refuse to answer questions during the application process. When Vazquez raised his "scope of work" objections, Ms. Wiggins was taken aback. Vazquez, an admitted novice in the citrus business, basically told the Department how to do its job. Faced with this very unique situation, Ms. Wiggins then asked her supervisor to become involved in the application review so that it would be done completely in accordance with Department rules. After the March 13, 2012, email from Vazquez, it was decided that the Department legal counsel should also be involved. The Department was justifiably concerned about the propriety of the Sun and Earth application. Citrus dealers are generally self-governing, and the Department began to have concerns that Vazquez could not be trusted. That, in and of itself, was sufficient basis for the recommendation of denial of Vazquez's application. Vazquez admitted to being less than forthright with the Department on his application. He withheld information that he believed the Department could easily obtain on its own. He refused to answer questions that he did not believe were relevant. He would not cooperate with inquiries made into issues about his past. He disagreed that his affiliation with his brother's company was relevant, so he stonewalled all inquiries about that issue. All in all, Vazquez--the applicant for a license--refused to provide information and assistance to the entity which was reviewing his application. While he may have had his personal reasons for his actions, what he did was not conducive to obtaining approval from the Department. Thus, his application was given a recommendation for denial.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Citrus/Florida Citrus Commission, denying Sun and Earth's application. DONE AND ENTERED this 30th day of August, 2012, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 30th day of August, 2012.
The Issue The issue presented for decision is whether Proposed Rules 20-15.001, 20-15.002, and 20-15.003 constitute an invalid exercise of delegated legislative authority pursuant to Section 120.52(8)(a)-(e), Florida Statutes.
Findings Of Fact Based on the stipulated facts, and the entire record in this proceeding, the following findings of fact are made: The Florida Citrus Commission was established in 1935 to organize and promote the growing and sale of various citrus products, fresh and processed, in the State of Florida. The purpose of the Citrus Commission is today reflected in Section 601.02, Florida Statutes. The powers of the Florida Citrus Commission ("the Commission") and the Department, are set forth in full in Section 601.10, Florida Statutes. The powers of the Department include the power to tax and raise other revenue to achieve the purposes of the Department. In particular, Section 601.10(1) and (2), Florida Statutes, state: The Department of Citrus shall have and shall exercise such general and specific powers as are delegated to it by this chapter and other statutes of the state, which powers shall include, but shall not be confined to, the following: To adopt and, from time to time, alter, rescind, modify, or amend all proper and necessary rules, regulations, and orders for the exercise of its powers and the performance of its duties under this chapter and other statutes of the state, which rules and regulations shall have the force and effect of law when not inconsistent therewith. To act as the general supervisory authority over the administration and enforcement of this chapter and to exercise such other powers and perform such other duties as may be imposed upon it by other laws of the state. The Department is authorized to set standards by Section 601.11, Florida Statutes, as follows: The Department of Citrus shall have full and plenary power to, and may, establish state grades and minimum maturity and quality standards not inconsistent with existing laws for citrus fruits and food products thereof containing 20 percent or more citrus or citrus juice, whether canned or concentrated, or otherwise processed, including standards for frozen concentrate for manufacturing purposes, and for containers therefor, and shall prescribe rules or regulations governing the marking, branding, labeling, tagging, or stamping of citrus fruit, or products thereof whether canned or concentrated, or otherwise processed, and upon containers therefor for the purpose of showing the name and address of the person marketing such citrus fruit or products thereof whether canned or concentrated or otherwise processed; the grade, quality, variety, type, or size of citrus fruit, the grade, quality, variety, type, and amount of the products thereof whether canned or concentrated or otherwise processed, and the quality, type, size, dimensions, and shape of containers therefor, and to regulate or prohibit the use of containers which have been previously used for the sale, transportation, or shipment of citrus fruit or the products thereof whether canned or concentrated or otherwise processed, or any other commodity; provided, however, that the use of secondhand containers for sale and delivery of citrus fruit for retail consumption within the state shall not be prohibited; provided, however, that no standard, regulation, rule, or order under this section which is repugnant to any requirement made mandatory under federal law or regulations shall apply to citrus fruit, or the products thereof, whether canned or concentrated or otherwise processed, or to containers therefor, which are being shipped from this state in interstate commerce. All citrus fruit and the products thereof whether canned or concentrated or otherwise processed sold, or offered for sale, or offered for shipment within or without the state shall be graded and marked as required by this section and the regulations, rules, and orders adopted and made under authority of this section, which regulations, rules, and orders shall, when not inconsistent with state or federal law, have the force and effect of law. The Department is authorized to conduct citrus research by Section 601.13, Florida Statutes. To help pay for these duties of the Department, the Legislature first enacted the "box tax" in 1949. The box tax is now codified as Section 601.15(3), Florida Statutes. Section 601.15(3)(a), Florida Statutes, provides in relevant part: There is hereby levied and imposed upon each standard-packed box of citrus fruit grown and placed into the primary channel of trade in this state an excise tax at annual rates for each citrus season as determined from the tables in this paragraph and based upon the previous season's actual statewide production as reported in the United States Department of Agriculture Citrus Crop Production Forecast as of June 1. Section 601.15(3)(a), Florida Statutes, goes on to set forth specific rates for fresh grapefruit, processed grapefruit, fresh oranges, processed oranges, and fresh or processed tangerines and citrus hybrids. Section 601.15(1), Florida Statutes, sets forth the Department's authority to administer the box tax, as follows: The administration of this section shall be vested in the Department of Citrus, which shall prescribe suitable and reasonable rules and regulations for the enforcement hereof, and the Department of Citrus shall administer the taxes levied and imposed hereby. All funds collected under this section and the interest accrued on such funds are consideration for a social contract between the state and the citrus growers of the state whereby the state must hold such funds in trust and inviolate and use them only for the purposes prescribed in this chapter. The Department of Citrus shall have power to cause its duly authorized agent or representative to enter upon the premises of any handler of citrus fruits and to examine or cause to be examined any books, papers, records, or memoranda bearing on the amount of taxes payable and to secure other information directly or indirectly concerned in the enforcement hereof. Any person who is required to pay the taxes levied and imposed and who by any practice or evasion makes it difficult to enforce the provisions hereof by inspection, or any person who, after demand by the Department of Citrus or any agent or representative designated by it for that purpose, refuses to allow full inspection of the premises or any part thereof or any books, records, documents, or other instruments in any manner relating to the liability of the taxpayer for the tax imposed or hinders or in anywise delays or prevents such inspection, is guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. The box tax was challenged in 1936 under various provisions of the Florida Constitution as well as the Export Clause, Article 1, s. 9, cl. 5, of the United States Constitution. The Florida Supreme Court issued an opinion in 1937 upholding the validity of the box tax. C.V. Floyd Fruit Company v. Florida Citrus Commission, 128 Fla. 565, 175 So. 248 (1937). In 1970, the Legislature enacted the "equalization tax," codified as Section 601.155, Florida Statutes. The statute mirrored Section 601.15, Florida Statutes, but added certain processors who were mixing foreign citrus products with Florida products. The purpose of the equalization tax was to have all Florida processors of citrus products help pay for the costs of the Department, rather than have the burden fall entirely on the Florida growers subject to the box tax. Section 601.155, Florida Statutes, provides, in relevant part: The first person who exercises in this state the privilege of processing, reprocessing, blending, or mixing processed orange products or processed grapefruit products or the privilege of packaging or repackaging processed orange products or processed grapefruit products into retail or institutional size containers or, except as provided in subsection (9) or except if a tax is levied and collected on the exercise of one of the foregoing privileges, the first person having title to or possession of any processed orange product or any processed grapefruit product who exercises the privilege in this state of storing such product or removing any portion of such product from the original container in which it arrived in this state for purposes other than official inspection or direct consumption by the consumer and not for resale shall be assessed and shall pay an excise tax upon the exercise of such privilege at the rate described in subsection (2). Upon the exercise of any privilege described in subsection (1), the excise tax levied by this section shall be at the same rate per box of oranges or grapefruit utilized in the initial production of the processed citrus products so handled as that imposed, at the time of exercise of the taxable privilege, by s. 601.15 per box of oranges. In order to administer the tax, the Legislature provided the following relevant provisions in Section 601.155, Florida Statutes: Every person liable for the excise tax imposed by this section shall keep a complete and accurate record of the receipt, storage, handling, exercise of any taxable privilege under this section, and shipment of all products subject to the tax imposed by this section. Such record shall be preserved for a period of 1 year and shall be offered for inspection upon oral or written request by the Department of Citrus or its duly authorized agent. Every person liable for the excise tax imposed by this section shall, at such times and in such manner as the Department of Citrus may by rule require, file with the Department of Citrus a return, certified as true and correct, on forms to be prescribed and furnished by the Department of Citrus, stating, in addition to other information reasonably required by the Department of Citrus, the number of units of processed orange or grapefruit products subject to this section upon which any taxable privilege under this section was exercised during the period of time covered by the return. Full payment of excise taxes due for the period reported shall accompany each return. All taxes levied and imposed by this section shall be due and payable within 61 days after the first of the taxable privileges is exercised in this state. Periodic payment of the excise taxes imposed by this section by the person first exercising the taxable privileges and liable for such payment shall be permitted only in accordance with Department of Citrus rules, and the payment thereof shall be guaranteed by the posting of an appropriate certificate of deposit, approved surety bond, or cash deposit in an amount and manner as prescribed by the Department of Citrus. * * * (11) This section shall be liberally construed to effectuate the purposes set forth and as additional and supplemental powers vested in the Department of Citrus under the police power of this state. In March 2000, certain citrus businesses challenged Section 601.155(5), Florida Statutes, as being unconstitutional. At the time of the suit, Section 601.155(5), Florida Statutes, read as follows: All products subject to the taxable privileges under this section, which products are produced in whole or in part from citrus fruit grown within the United States, are exempt from the tax imposed by this section to the extent that the products are derived from oranges or grapefruit grown within the United States. In the case of products made in part from citrus fruit grown within the United States, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. The citrus businesses claimed the exemption in Section 601.155(5) rendered the tax unconstitutionally discriminatory, in that processors who imported juice from foreign countries to be blended with Florida juice were subject to the equalization tax, whereas processors who imported juice from places such as California, Arizona and Texas enjoyed an exemption from the tax. The case, Tampa Juice Service, Inc., et al. v. Department of Citrus, Case No. GCG-00-3718 (Consolidated) ("Tampa Juice"), was brought in the Tenth Judicial Circuit Court, in and for Polk County. Judge Dennis P. Maloney of that court continues to preside over that case. In a partial final declaratory judgment effective March 15, 2002, Judge Maloney found Section 601.155, Florida Statutes, unconstitutional because it violated the Commerce Clause of the United States Constitution due to its discriminatory effect in favor of non-Florida United States juice. In an order dated April 15, 2002, Judge Maloney severed the exemption in Section 601.155(5), Florida Statutes, from the remainder of the statute. The court's decision necessitated the formulation of a remedy for the injured plaintiffs. While the parties were briefing the issue before the court, the Florida Legislature met and passed Chapter 2002-26, Laws of Florida, which amended Section 601.155(5), Florida Statutes, to read as follows: Products made in whole or in part from citrus fruit on which an equivalent tax is levied pursuant to s. 601.15 are exempt from the tax imposed by this section. In the case of products made in part from citrus fruit exempt from the tax imposed by this section, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. Chapter 2002-26, Laws of Florida, was given an effective date of July 1, 2002. By order dated August 8, 2002, Judge Maloney set forth his decision as to the remedy for the plaintiffs injured by the discriminatory effect of Section 601.155(5), Florida Statutes. Judge Maloney expressly relied on the rationale set forth in Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 574 So. 2d 114 (Fla. 1991)("McKesson II"). In its initial McKesson decision, Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 524 So. 2d 1000 (Fla. 1988), the Florida Supreme Court affirmed a summary judgment ruling that Florida's alcoholic beverage tax scheme, which gave tax preferences and exemptions to certain alcoholic beverages made from Florida crops, unconstitutionally discriminated against interstate commerce. The Florida Supreme Court also affirmed that portion of the summary judgment giving the ruling prospective effect, thus denying the plaintiff a refund of taxes paid pursuant to the unconstitutional scheme. The decision was appealed to the United States Supreme Court. In McKesson Corporation v. Division of Alcoholic Beverages and Tobacco, 496 U.S. 18 (1990), the United States Supreme Court reversed the Florida Supreme Court's decision as to the prospective effect of its decision. The United States Supreme Court held that: The question before us is whether prospective relief, by itself, exhausts the requirements of federal law. The answer is no: If a State places a taxpayer under duress promptly to pay a tax when due and relegates him to a postpayment refund action in which he can challenge the tax's legality, the Due Process Clause of the Fourteenth Amendment obligates the State to provide meaningful backward-looking relief to rectify any unconstitutional deprivation. 496 U.S. at 31 (footnotes omitted). The United States Supreme Court set forth the following options by which the state could meet its obligation to provide "meaningful backward-looking relief": [T]he State may cure the invalidity of the Liquor Tax by refunding to petitioner the difference between the tax it paid and the tax it would have been assessed were it extended the same rate reductions that its competitors actually received. . . . Alternatively, to the extent consistent with other constitutional restrictions, the State may assess and collect back taxes from petitioner's competitors who benefited from the rate reductions during the contested tax period, calibrating the retroactive assessment to create in hindsight a nondiscriminatory scheme. . . . Finally, a combination of a partial refund to petitioner and a partial retroactive assessment of tax increases on favored competitors, so long as the resultant tax actually assessed during the contested tax period reflects a scheme that does not discriminate against interstate commerce, would render Petitioner's resultant deprivation lawful and therefore satisfy the Due Process Clause's requirement of a fully adequate postdeprivation procedure. 496 U.S. at 40-41 (citations and footnotes omitted). The United States Supreme Court expressly provided that the state has the option of choosing the form of relief it will grant. In keeping with the United States Supreme Court opinion, the Florida Supreme Court granted the Division of Alcoholic Beverages and Tobacco (the "Division") leave to advise the Court as to the form of relief the state wished to provide. The Division proposed to retroactively assess and collect taxes from those of McKesson's competitors who had benefited from the discriminatory tax scheme. McKesson contended that a refund of the taxes it had paid was the only clear and certain remedy, because retroactive taxation of its competitors would violate their due process rights. McKesson II, 574 So. 2d at 116. The Florida Supreme Court remanded the case to the trial court for further proceedings on McKesson's refund claim, with the following instructions: While McKesson may not necessarily be entitled to a refund, it is entitled to a "clear and certain remedy," as outlined in the Supreme Court's opinion. Because nonparties, such as amici, will be directly affected by the retroactive tax scheme proposed by the state, all affected by the proposed emergency rule must be given notice and an opportunity to intervene in this action. Therefore, on remand, the trial court not only must determine whether the state's proposal meets "the minimum federal requirements" outlined in the Supreme Court's opinion, it also must determine whether the proposal comports with federal and state protections afforded those against whom the proposed tax will be assessed. We emphasize that the state has the option of choosing the manner in which it will reformulate the alcoholic beverage tax during the contested period so that the resultant tax actually assessed during that period reflects a scheme which does not discriminate against interstate commerce. Therefore, if the trial court should rule that the state's proposal to retroactively assess and collect taxes from McKesson's competitors does not meet constitutional muster and such ruling is upheld on appeal, the state may offer an alternative remedy for the trial court's review. However, any such proposal likewise must satisfy the standards set forth by the Supreme Court as well as be consistent with other constitutional restrictions. 574 So. 2d at 116. In the Tampa Juice case, Judge Maloney assessed the options prescribed by the series of McKesson cases and concluded that the only fair remedy was to assess and collect back assessments from those who benefited from the unconstitutional equalization tax exemption. His August 8, 2002, order directed the Department to "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." On September 18, 2002, the Department promulgated the Emergency Rules that were at issue in DOAH Case No. 02-3648RE. The Emergency Rules were filed with the Department of State on September 24, 2002, and took effect on that date. Those emergency rules were held invalid in Peace River, and are not at issue in the instant case. In the November 15, 2002 issue of the Florida Administrative Weekly (vol. 28, no. 46, pp. 4996-4998), the Department published the Proposed Rules that were at issue in DOAH Case No. 02-4607RP. In the March 7, 2003, issue of the Florida Administrative Weekly (vol. 29, no. 10, p. 1036), the Department published amendments to the Proposed Rule. The Proposed Rules, as amended, read as follows: EQUALIZATION TAX ON NON-FLORIDA UNITED STATES JUICE 20-15.001 Intent. The Court in Tampa Juice Service, et al v. Florida Department of Citrus in Consolidated Case Number GCG-003718 (Circuit Court in and for Polk County, Florida) severed the exemption contained in Section 601.155(5), Florida Statutes, that provided an exemption for persons who exercised one of the enumerated Equalization Tax privileges on non-Florida, United States juice. The Court had previously determined that the stricken provisions operated in a manner that violated the Commerce Clause of the United States Constitution. On August 8, 2002, the Court ordered that the Florida Department of Citrus "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." It is the Florida Department of Citrus' intent by promulgating the following remedial rule to implement a non- discriminatory tax scheme, which does not impose a significant tax burden that is so harsh and oppressive as to transgress constitutional limitations. These rules shall be applicable to those previously favored persons who received favorable tax treatment under the statutory sections cited above. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, , 601.155 FS. History-- New . 20-15.002 Definitions. "Previously favored persons" shall be defined as any person who exercised an enumerated Equalization Tax privilege as defined by Section 601.155, Florida Statutes, but who was exempt from payment of the Equalization Tax due to the exemption for non-Florida, United States juice set forth in the statutory provision, which was ultimately determined to be unconstitutional and severed from Section 601.155(5), Florida Statutes. The "tax period" during which the severed provisions of Section 601.155(5), Florida Statutes, were in effect shall be defined as commencing on October 6, 1997, and ending on March 14, 2002. "Tax liability" shall be defined as the total amount of taxes due to the Florida Department of Citrus during the "tax period," at the following rates per box for each respective fiscal year: Fiscal Year Processed Rate Orange Grapefruit 1997-1998 .175 .30 1998-1999 .17 .30 1999-2000 .18 .325 2000-2001 .175 .30 2001-2002 .165 .18 Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, , 601.155 FS. History-- New . 20-15.003 Collection. The Florida Department of Citrus shall calculate the tax liability for each person or entity that exercised an enumerated Equalization Tax privilege outlined in section 601.155, Florida Statutes, upon non-Florida, United States juice based upon inspection records maintained by Florida Department of Agriculture and Consumer Services and the United States Department of Agriculture. Subsequent to adoption of this rule, the Florida Department of Citrus will provide to the previously favored persons by certified mail a Notice of Tax Liability which shall contain a demand for payment consistent with the above-referenced itemized statement. The Department will deem late payment of Equalization Taxes owed by previously favored persons to constitute good cause, and shall waive the 5 percent penalty authorized by Section 601.155(10), F.S., as compliance with either of the following is established by Department [sic]: Lump sum payment of the tax liability remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20-100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection 20-15.002(3), F.A.C., within 61 days of receiving Notice of Tax Liability; or Equal installment payments remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20- 100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection subsection [sic] 20-15.002(3), F.A.C., over a 60-month period, the first payment being due within 61 days of receiving Notice of Tax Liability pursuant to subsection 20- 15.003(2), F.A.C.; or The Good Cause provisions of 601.155(10), F.S., shall not apply to persons who do not comply with paragraph 20- 15.003(2)(a), F.A.C., or paragraph 20- 15.003(2)(b), F.A.C. Failure to pay the taxes or penalties due under 601.155, F.S. and Chapter 20-15, F.A.C., shall constitute grounds for revocation or suspension of a previously favored person's citrus fruit dealer's license pursuant to 601.56(4), F.S., 601.64(6), F.S., 601.64(7), F.S., and/or 601.67(1), F.S. The Florida Department of Citrus will not oppose the timely intervention of persons who previously enjoyed the subject exemption that wish to present a claim to the Court in the Tampa Juice Service, Inc., et al v. Florida Department of Citrus. However, the Florida Department of Citrus does not waive any argument regarding the validity of the calculation of the tax liability or that imposition of this tax is constitutional. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New . The Final Order in Peace River held that the Proposed Rules were not an invalid exercise of delegated legislative authority, for reasons discussed in the Conclusions of Law below. Judge Maloney has yet to rule on the backward-looking remedy proposed by the Department. On March 26, 2003, Judge Maloney entered an order extending until May 1, 2003, the time for interested parties to file motions to intervene with regard to the Department's proposed backward-looking relief. The order noted that the parties have stipulated to the suspension of the back tax as to plaintiffs and objecting non-parties until further order of the court. On February 19, 2003, Judge Maloney entered an "Order Granting Plaintiffs' Motion for Partial Summary Judgment-- Import-Export." The sole issue before Judge Maloney was "whether Section 601.155, Florida Statutes, (the 'Equalization Tax'), as it existed in 1997, violates Article I, Section 10, clause 2 of the Constitution of the United States (the 'Import- Export Clause')." (Emphasis in original) After setting forth the standard for analysis of whether a taxing scheme violates the Import-Export Clause under Michelin Tire Corp. v. Wages, 423 U.S. 276, 96 S. Ct. 535, 46 L.Ed.2d 495 (1976), Judge Maloney ruled as follows: It is precisely [the exemption for United States products found in 601.155(5), Florida Statutes] that causes the 1997 Equalization Tax to contravene the Import-Export Clause. Specifically, the court finds that because the statute exempts "citrus fruit grown within the United States," but does not exempt citrus fruit grown in foreign countries, the exemption causes the tax to "fall on imports as such simply because of their place of origin." Michelin, 423 U.S. at 286. Additionally, because the tax falls on foreign-grown citrus as such simply because of its origin but does not fall on domestic-grown citrus, the Equalization Tax, with the exemption, creates a "special tariff or particular preference for certain domestic goods." Id. (i.e. California, Arizona, and Texas citrus products). * * * In conclusion, because the court finds the exemption contained within the 1997 Equalization Tax violates both the first and third elements of the Michelin test,1 the court finds the 1997 Equalization Tax violates Article I, Section 10, clause 2 of the Constitution of the United States (the "Import-Export Clause"). On March 31, 2003, Judge Maloney entered an "Order Granting Plaintiffs' Motion for Partial Summary Judgment." In this order, Judge Maloney found that the box tax itself, Section 601.15, Florida Statutes, violates the First Amendment to the United States Constitution. Petitioners and Intervenor in the instant case are licensed citrus fruit dealers regulated by Chapter 601, Florida Statutes. As such, they are subject to the rules of the Department. Petitioners and Intervenor buy, sell, and manufacture citrus juices. They shipped products made with non- Florida U.S. juice during the tax period without paying equalization taxes. Petitioners and Intervenor have been notified by the Department that they are liable to pay back taxes pursuant to the Proposed Rules, as well as the invalid Emergency Rules.
The Issue The issue for determination is whether Department of Citrus Rules 20-1.009 and 20-1.010, Florida Administrative Code, are invalid exercises of delegated legislative authority, as alleged by Petitioners.
Findings Of Fact John Stephens, Inc., Petitioner, was at all times material hereto a Florida corporation duly licensed as a citrus fruit dealer in the State of Florida. J. A. Stephens, Inc., was a Florida corporation, and held a valid fruit dealer’s license in the State of Florida. At all times material to this proceeding, Petitioner, John A. Stephens, served as an officer and director of J. A. Stephens, Inc. John A. Stephens is not an officer, director or shareholder of John Stephens, Inc. John A. Stephens, Jr. is the president and sole director of John Stephens, Inc. and is not an officer, director nor shareholder of J. A. Stephens, Inc. On or about September 26, 1996, Petitioners, John Stephens, Inc., and John A. Stephens, applied to the Florida Department of Agriculture and Consumer Services to register John A. Stephens as an agent of John Stephens, Inc., pursuant to Section 601.601, Florida Statutes. The application form furnished by the Department of Agriculture and Consumer Services indicates that the licensed dealer seeking registration of an agent agrees to “... accept full responsibility for all his activities....” (Petitioners’ Exhibit 1) By letter dated December 26, 1996, Petitioners were advised by the Department of Agriculture and Consumer Services that their application for registration of John A. Stephens as an agent of John Stephens, Inc., had been denied on the basis of Rule 20-1.010, Florida Administrative Code. As indicated in the notice, that rule provides, in part, that an application for registration of a dealer’s agent can be disapproved if a proposed registrant has a “...record, either as an individual, co- partnership, corporation, association or other business unit, showing unsatisfied debts or orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit.” (Petitioners’ Exhibit 1.) Specifically, the Department of Agriculture and Consumer Services advised Petitioners that “...Mr. Stephens has not satisfied orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit...,” listing as the final orders in question Petitioners’ Exhibits 3 through 14. Between April 30, 1991, and September 30, 1992, the State of Florida, Department of Agriculture and Consumer Services entered a total of 12 final administrative orders in which it found that J. A. Stephens, Inc., was indebted to claimants for various sums arising from prior dealings in citrus fruit. (Petitioners’ Exhibits 3 through 14.) At the time of the action of the Department of Agriculture and Consumer Services denying Petitioners’ application, there remained amounts due and unpaid on each of the orders entered by the Department against J. A. Stephens, Inc. Petitioner, John A. Stephens was not named as a party respondent in any of the 12 proceedings culminating in final orders against J. A. Stephens, Inc., which formed the basis for the denial by the Department of the application for registration as a citrus dealer’s agent. (Petitioners’ Exhibits 2, and 3 through 14.) In denying a Motion for Relief for Final Order in the only Department of Agriculture and Consumer Services proceeding in which a claimant sought to join Mr. Stephens individually as a party, the Department found that: The complaint filed by Claimant named J. A. Stephens, Inc. as the respondent. Because the complaint was against J. A. Stephens, Inc., it was served on J. A. Stephens, Inc. J. A. Stephens, an individual, was never subjected to the jurisdiction of the Agency with regard to this matter. J. A. Stephens, an individual, was not afforded an opportunity to defend against the allegations of the complaint. There was no discussion at the hearing about whether J. A. Stephens, Inc. was or was not the proper respondent. There was no allegation at the hearing that J. A. Stephens, an individual, was the proper respondent. The Claimant has failed to express any legal basis for grant of his motion and this Agency could find no such basis. This Agency has no personal jurisdiction over J. A. Stephens, an individual, with regard to this matter and therefore cannot enter an order with respect to him. Further, even if such an order were to be entered, it would be of no force or effect because of the lack of personal jurisdiction. (Petitioners’ Exhibit 4, pg. 2.) The rules that are the subject of this proceeding had their inception in 1964, when the Florida Citrus Commission considered and adopted rules governing the registration of agents acting on behalf of licensed citrus dealers. These rules, which appear in the text of the minutes of the Commission as Regulation 105-1.05, are almost verbatim the same rules now found in Chapter 20-1, Florida Administrative Code. (Respondent’s Exhibits 1 and 2.) As reflected in the minutes of the Florida Citrus Commission, the rules were adopted to help protect the grower and shipper or processor in matters involving the normal movement of citrus fruit in all channels of distribution. The regulation was recommended by the Fresh Citrus Shippers Association and was endorsed by a resolution of the Florida Sheriffs Association. In presenting the Sheriffs’ resolution to the Commission, Sheriff Leslie Bessenger of the Florida Citrus Mutual Fruit Protection Division cited the results of a seven-month investigation that found 71 out of 200 registered agents with criminal records. Those two hundred agents represented only nine dealers. (Respondent’s exhibit 1, June 19, 1964, meeting.) Minutes of Commission meetings after rule adoption thoroughly explain the efforts to require accountability and curb abuse of the dealer- agent relationship. The rules, as they appear today in the Florida Administrative Code, have not been revised since July 1, 1975.
The Issue Whether Respondent A & J Pak Ship, Inc., owes Petitioner $551.16 for "gift fruit,” as alleged in Petitioner's Complaint.
Findings Of Fact Based upon the evidence adduced at the final hearing and the record as a whole, the following findings of fact are made: At all times material to the instant case, Petitioner and A & J have been licensed by the Department of Citrus as "citrus fruit dealers." As part of its operations, A & J sells "gift fruit" to retail customers. The "gift fruit" consists of oranges or grapefruits, or both, that are packaged and sent to third parties identified by the customers. In November and December of 1999, A & J took orders for "gift fruit" from retail customers that it contracted with Petitioner (doing business as Fresh Fruit Express) to fill. Under the agreement between A & J and Petitioner (which was not reduced to writing), it was Petitioner's obligation to make sure that the "gift fruit" specified in each order was delivered, in an appropriate package, to the person or business identified in the order as the intended recipient at the particular address indicated in the order. Among the intended recipients identified in the orders that Petitioner agreed to fill were: the Uthe family, the Weckbachs, Mr. and Mrs. T. Martin, Angelo's, Susan Booth, Mr. and Mrs. E. Coello, Mr. and Mrs. Dalbey, Carol Baker and family, the Tarvin family, Shelly and Mark Koontz, Pamela McGuffey, Jerome Melrose, Russell Oberer, Mrs. Josephine Scelfo, Curt and Becky Tarvin, Heidi Wiseman, Kay and Artie Witt, and the William Woodard family, who collectively will be referred to hereinafter as the "Intended Recipients in Question." A & J agreed to pay Petitioner a total of $438.18 to provide "gift fruit" to the Intended Recipients in Question, broken down as follows: $21.70 for the Uthe family order, $21.70 for the Weckbachs order, $22.82 for the Mr. and Mrs. T. Martin order, $27.09 for the Angelo's order, $21.70 for the Susan Booth order, $31.67 for the Mr. and Mrs. E. Coello order, $17.50 for the Mr. and Mrs. Dalbey order, $21.70 for the Carol Baker and family order, $27.09 for the Tarvin family order, $21.70 for the Shelly and Mark Koontz order, $21.70 for the Pamela McGuffey order, $32.44 for the Jerome Melrose order, $21.70 for the Russell Oberer order, $17.60 for the Mrs. Josephine Scelfo order, $21.70 for the Curt and Becky Tarvin order, $17.50 for the Heidi Wiseman order, $17.50 for the Kay and Artie Witt order, and $31.67 for the William Woodard family order. All of these orders, which will be referred to hereinafter as the "Intended Recipients in Question 'gift fruit' orders," were to be delivered, under the agreement between A & J and Petitioner, by Christmas day, 1999. On Sunday night, December 12, 1999, fire destroyed Petitioner's packing house and did considerable damage to Petitioner's offices. With the help of others in the community, Petitioner was able to obtain other space to house its offices and packing house operations. By around noon on Tuesday, December 14, 1999, Petitioner again had telephone service, and by Friday, December 17, 1999, it resumed shipping fruit. Scott Wiley, A & J's President, who had learned of the fire and had been unsuccessful in his previous attempts to contact Petitioner, was finally able to reach Petitioner by telephone on Monday, December 20, 1999. After asking about the status of the Intended Recipients in Question “gift fruit” orders and being told by the employee with whom he was speaking that she was unable to tell him whether or not these orders had been shipped, Mr. Wiley advised the employee that A & J was "cancelling" all "gift fruit" orders that had not been shipped prior to the fire. Mr. Wiley followed up this telephone conversation by sending, that same day, the following facsimile transmission to Petitioner: As per our conversation on 12-20-99, please cancel all orders sent to you from A & J Pak-Ship (Fresh Fruit Express). After trying to contact your company numerous times on December 13, I called the Davie Police Department, who [sic] informed me that you had experienced a major fire. I tried to contact you daily the entire week with no luck. Since I had no way to contact you, it was your responsibility to contact me with information about your business status. Without that contact, I had to assume that you were unable to continue doing business. With Christmas fast approaching and with no contact from anyone on your end, I had no choice but to begin to issue refunds. While I understand the fire was devastating for you, understand that my fruit business is ruined, and will take years to reestablish. Please note that I will not pay for any orders shipped past the date of your fire, 12-13-99, as I have already issued refunds, and I will need proof of delivery for all those orders delivered before the fire. Again, cancel all orders including the remainder of multi-month packages, and honeybell orders. Your lack of communication has put me in a very bad situation with my customers. One short phone call to me could have avoided all this difficulty. Had I not tried your phone on 12-20, I would still have no information from you. Petitioner did not contact Mr. Wiley and tell him about the fire because it did not think that the fire would hamper its ability to fulfill its obligations under its agreement with A & J. By the time Mr. Wiley made telephone contact with Petitioner on Monday, December 20, 1999, Petitioner had already shipped (that is, placed in the possession of a carrier and made arrangements for the delivery of) all of the Intended Recipients in Question "gift fruit" orders (although it had not notified A & J it had done so). Petitioner did not ship any A & J "gift fruit" orders after receiving Mr. Wiley's December 20, 1999, telephone call. On or about February 18, 2000, Petitioner sent A & J an invoice requesting payment for "gift fruit" orders it had shipped for A & J. Among the orders on the invoice for which Petitioner was seeking payment were the Intended Recipients in Question "gift fruit" orders (for which Petitioner was seeking $438.18). The invoice erroneously reflected that all of these orders had been shipped on December 25, 1999. They, in fact, had been shipped on December 18, 1999, or earlier. 1/ Mr. Wiley, acting on behalf of A & J, wrote a check in the amount of $858.26, covering all of the invoiced orders except the Intended Recipients in Question "gift fruit" orders, and sent it to Petitioner, along with the following letter dated February 22, 1999: As per my conversation on 12/20/90 at 11:20 a.m. with Yvette we cancelled all orders shipped after the fire, and also followed up with a certified letter. We had to reorder all of those orders and also refunded a lot of orders as they were not there in time for Xmas as all orders are required to arrive before Xmas. As I said in my certified letter to you it was a[n] unfortunate fire but all you had to do was to inform me what was going on and we could have worked something out. Our fruit business has been ruined by this incident, and quite possibly our entire company. It is unbelievable that more than sixty days after the fire we still have had no correspondence from you whatsoever. We have deducted those orders that were cancelled and arrived well after Xmas and remitted the remainder. A & J has not yet paid Petitioner the $438.18 for the Intended Recipients in Question "gift fruit" orders.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order dismissing Petitioner’s Complaint. DONE AND ENTERED this 12th day of September, 2001, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of September, 2001.
The Issue Whether there is substantial justification or special circumstances to preclude Petitioner from receiving an award of attorneys’ fees and costs pursuant to section 120.595(2), Florida Statutes (2017).1/
Findings Of Fact Based on the oral and documentary evidence, written submissions from the parties following issuance of ALJ McKibben’s Final Order, and the entire record in this proceeding, the following Findings of Fact are made: Section 381.986(8), Florida Statutes and the Proposed Rule Section 381.986(8), Florida Statutes, establishes a mechanism for the licensing of medical marijuana treatment centers (“MMTC”). The statute was amended in 2017 to provide, in pertinent part, that: (8) MEDICAL MARIJUANA TREATMENT CENTERS. (a) The department shall license medical marijuana treatment centers to ensure reasonable statewide accessibility and availability as necessary for qualified patients registered in the medical marijuana use registry and who are issued a physician certification under this section. * * * The department shall license as medical marijuana treatment centers 10 applicants that meet the requirements of this section, under the following parameters: [Previously denied applicants meeting certain requirements not relevant to the instant action.] [One applicant from a specific class pursuant to a federal lawsuit.] As soon as practicable, but no later than October 3, 2017, the department shall license applicants that meet the requirements of this section in sufficient numbers to result in 10 total licenses issued under this subparagraph, while accounting for the number of licenses issued under sub-subparagraphs a. and b. For up to two of the licenses issued under subparagraph 2., the department shall give preference to applicants that demonstrate in their applications that they own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of marijuana. (emphasis added). The Proposed Rule was intended to implement the changes to section 381.986; but, where section 381.986(8)(a)3., uses the term “facility,” the Proposed Rule substitutes the term “property.” For instance, the Proposed Rule provides, in pertinent part, that: (1)(f) For applicants seeking preference for registration as a medical marijuana treatment center pursuant to ss. 381.986(8)(a)3., F.S., the applicant must provide evidence that: The property at issue currently is or was previously used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses. In order to demonstrate the property meets this criteria, the applicant may provide documentation that the applicant currently holds or has held a registration certificate pursuant to section 601.40, F.S. A letter from the Department of Citrus certifying that the property currently is or was previously used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses will be accepted as sufficient evidence; The applicant as an individual holds, in his or her name, or the applicant as an entity holds, in the legal name of the entity, the deed to property meeting the criteria set forth in subparagraph 1. above; and A brief explanation of how the property will be used for purposes of growing, processing, or dispensing medical marijuana if the applicant is selected for registration. * * * Subject matter experts will substantively and comparatively review, evaluate, and score applications using [the Scorecard incorporated by reference]. * * * (a)7.(b) Scores for each section of the application will be combined to create an applicant’s total score. The department shall generate a final ranking of the applicants in order of highest to lowest scores. . . . (c) In accordance with ss. 381.986(8)(a)3., F.S., the two highest scoring applicants that own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of marijuana will receive an additional 35 points to their respective total score. Licenses will be awarded, subject to availability as set forth in ss. 381.986(8)(a)2. and 381.986(8)(a)4., F.S., based on the highest total score in the following manner: The highest scoring applicant that is a recognized member of Pigford or [African American Farmers Discrimination Litigation] will receive a license. The remaining highest scoring applicants, after the addition of the preference points for applicants pursuant to paragraph (7)(c) above, will receive licenses up to the statutory cap set forth in ss. 381.986(8)(a)2., F.S. The remaining highest scoring applications, after removing any preference points received under paragraph (7)(c), will receive licenses up to the statutory cap set forth in ss. 381.986(8)(a)4., F.S. (emphasis added). The Parties The Department is the state agency charged with implementing the Compassionate Medical Cannabis Act of 2014. See § 381.986, Fla. Stat. Del Favero has been incorporated since 1974 and has been primarily engaged in the business of growing orchids. At the time of the final hearing in this matter, Del Favero aspired to apply for licensure as a medical marijuana treatment center. After Senate Bill 8A became law and substantially rewrote section 381.986, Del Favero elected to seek the citrus preference described in section 381.986(8)(a)3. In order to accomplish that goal, Del Favero purchased the real property and facilities of a citrus processing business in Safety Harbor, Florida, for approximately $775,000. The purchase occurred prior to the Proposed Rule’s publication. Del Favero intends to convert the citrus processing facility located on the Safety Harbor property into a medical marijuana processing facility if Del Favero becomes a licensed MMTC. Pertinent Portions of ALJ McKibben’s Analysis In ruling that the Proposed Rule was invalid, ALJ McKibben made the following findings: The Legislature clearly intended to give a preference to applicants who “own . . . facilities that are, or were, used for canning, concentrating, or otherwise processing of citrus . . . and will use or convert the . . . facilities for the processing of medical marijuana.” The Legislature failed, however, to provide guidance by way of definitions. While the Legislature chose the words “facility or facilities” in the Preference Statute, the Department complicated the issue by using the word “property” for the most part, but also using the words “facility” and “facilities” at times. Favero contends that a property is much broader in scope than a facility, and the Department therefore exceeded its delegated legislative authority. The Department argues that facilities used to process citrus must be located on some property, obviously. But, facilities located on a property might be leased, so that the fee simple owner of the property is different from the leaseholder of that facility. Thus, if an applicant for a medical marijuana treatment center license wants to avail itself of the preference, it would need to own the facility. Whether that means the applicant must own the property on which the facility is located is not clear in the Preference Statute or in the Proposed Rule. The Department argues that the way to show ownership of a facility is by way of a deed to the property on which the facility is located. In fact, Favero will use a warranty deed to prove ownership of the facilities it purchased in order to obtain the preference. But if Favero purchased land on which citrus had been grown but not processed, i.e., if there had been no facilities on the land to can, concentrate or otherwise process the fruit, except in fresh fruit form, the preference would not apply. And if an applicant obtained a leasehold interest in a facility, it would not be able to “show ownership” by way of a deed to the property. The Preference Statute requires the applicant to convert the facility in order to gain the preference. It is unclear how a piece of unimproved property can be “converted” to another use; land is land. This begs the question of whether growing citrus on a piece of property, and then removing all the citrus trees in order to grow medical marijuana, is a “conversion” of a facility as contemplated by the Legislature. Neither the Preference Statute nor the Proposed Rule contain any definitional assistance to answer that question. An important question to be answered is whether the growing of citrus constitutes “processing” as alluded to by the Legislature. The Preference Statute provides no definition of the word. The Citrus Code (chapter 601, Florida Statutes) also does not define “processing,” but does describe a “processor” of citrus as: ‘[A]ny person engaged within this state in the business of canning, concentrating, or otherwise processing citrus fruit for market other than for shipment in fresh fruit form.” § 601.03(32), Fla. Stat. (Emphasis added) (sic). Processing must therefore mean something other than merely growing citrus and packing it up for shipment. That being the case, a property where citrus is grown that is “converted” to a property growing marijuana would not afford an applicant a preference. There must be some “facility” that is or has been used to process citrus, i.e., doing something more with the raw product, in order to constitute “processing.” Therefore, a “packinghouse,” i.e., “[a]ny building, structure, or place where citrus fruit is packed or otherwise prepared for market or shipment in fresh fruit form,” would not be engaged in “processing” citrus. See § 601.03(29), Fla. Stat. (emphasis added). ALJ McKibben then made the following Conclusions of Law: In this instance, the Department interprets the statutory language concerning “facility or facilities” to include “property.” It is impossible to reconcile that interpretation, especially in light of the fact the Legislature contemplated conversion of the facilities. The Department’s interpretation is hereby rejected as being outside the range of permissible interpretations. See Cleveland v. Fla. Dep’t of Child. & Fams., 868 So. 2d 1227 (Fla. 1st DCA 2004).[2/] The test is whether the agency’s proposed rule properly implements specific laws. See § 120.52(8)(f), Fla. Stat. The Preference Statute specifically provided a preference for using or converting citrus facilities, not properties. The Proposed Rule does not implement that specific provision of the law. (emphasis added). The Department’s Rationale for Substituting “Property” for “Facility” The Department asserted during the final hearing that it consulted with the Citrus Department on how to interpret the phrase “otherwise processing.”3/ See § 381.986(8)(a)3. (providing that “the department shall give preference to applicants that demonstrate in their applications that they own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit . . .”). (emphasis added). Ms. Shepp, the Citrus Department’s executive director, testified that activities such as picking, grading, sorting, polishing, and packing citrus fruit constitute “otherwise processing.” She also testified that a packinghouse conducts the aforementioned activities. Section 601.03(29), Florida Statutes, defines a “packinghouse” as “any building, structure, or place where citrus is packed or otherwise prepared for market or shipment in fresh form.” (emphasis added) See the Department’s Proposed Final Order at 9, 10, and 15. Because “a place” can be an area without a physical structure, the Department concluded that using the word “property” in the Proposed Rule rather than “facility” would enable applicants who engage in “otherwise processing” to be eligible for the preference. The Department also argued that this substitution is justified because “it is not uncommon in the citrus industry to conduct citrus operations in the open air or in a tent.” See Department’s Memorandum of Law in Opposition to Petitioner’s Motion for Attorney’s Fees at 9.4/ Ms. Coppola explained that the Department substituted “property” for “facility” in order to assist the distressed citrus industry. Finally, Ms. Coppola stated that using the term “property” serves the legislative intent to extend the preference to applicants that are not presently engaged in canning, concentrating, or otherwise processing but had been in the past.5/ As discussed below in the Conclusions of Law, the Department had no substantial justification for substituting the word “property” for “facility” and thus extending the citrus preference beyond what the Florida Legislature had intended. Moreover, there are no special circumstances that would make an award of attorneys’ fees to Del Favero unjust.
The Issue The Department of Professional Regulation charged Dr. Samy Hassan Helmy, D.V.M., with violation of Sections 474.215 and 474.214(1)(g), Florida Statutes, for failure to have a premises permit. The primary issue for factual determination is whether Citrus Fair Animal Hospital applied for licensure within thirty days subsequent to its opening. Both parties have submitted post-hearing Proposed Findings of Fact. A ruling has been made on each proposed finding of fact in the Appendix to this Recommended Order.
Findings Of Fact Dr. Helmy is, and has been at all times material herein, a licensed veterinarian in the State of Florida, having been issued license number 0028884 by the Florida Board of Veterinary Medicine. In January of 1985 the wife of Dr. Samy Hassan Helmy purchased real property in Inverness, Florida. Between January 1985 and April 1985 said facility was extensively remodeled to make it suitable as an animal hospital. Dr. Helmy frequently worked at this facility, supervising workmen and participating in the remodeling. On February 19, 1985 an investigator of the Department of Professional Regulation inspected Dr. Helmy's licensed facility in Wildwood, Florida. At that time, Dr. Helmy was not at the facility. Certain equipment required at an animal hospital was not found during this inspection. The inspector called and spoke with Dr. Helmy who was at the Inverness facility, hereinafter referred to as "Citrus Fair." Dr. Helmy advised the inspector that he had the equipment with him. Dr. Helmy told the inspector that he only treated animals at the Wildwood clinic. (See Transcript page 60, line 11-12.) After notice to their customers and the public, Dr. Helmy began to receive patients regularly at the Citrus Fair facility during the first part of April 1985. Dr. Helmy admitted that he had seen animals on an emergency basis at the facility prior to that date as opposed to transporting them to Wildwood; however, the Citrus Fair facility was not open to the public until the first part of April. A receipt for professional services dated April 9, 1985 was introduced into evidence as Respondent's exhibit #2. Although introduced by Respondent, this exhibit was part of the Petitioner's investigative file. An inspection was conducted of the Citrus Fair facility on April 12, 1985 by an employee of the Department of Professional Regulation. At the time of this inspection veterinary medicine was being practiced on the premises. An inspection of the Citrus Fair facility was conducted by an employee of the Department of Professional Regulation on April 19, 1985. At the time of said inspection, veterinary medicine was being practiced on the premises. The Citrus Fair facility is wholly owned by the wife of Dr. Helmy. Dr. Helmy is the professional veterinarian responsible for the Citrus Fair facility. On April 29, 1985, Dr. Helmy's application for licensure of the Citrus Fair facility was received by the Department of Professional Regulation. (See Petitioner's Exhibit #2)
Recommendation Based upon the foregoing findings of fact and conclusions of law, and having determined the Respondent did not violate any of the statutes as alleged, it is recommended that the administrative complaint be dismissed. DONE AND ORDERED this 19th day of February 1986 in Tallahassee, Leon County, Florida. _ STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32399 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of February 1986. COPIES FURNISHED: Mildred Gardner,Executive Director Board of Veterinary Medicine 130 North Monroe Street Tallahassee, FL 32301 Fred Roche,Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, FL 32301 Salvatore A. Carpino,General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, FL 32301 Cecilia Bradley, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, FL 32301 William E. Lackay, Esquire M. C. of Florida Building P. O. Box 279 Bushnell, FL 33513 APPENDIX Respondent's Findings of Fact Adopted. Adopted. Conclusion of Law. Adopted. Adopted. Adopted. Rejected as not relevant. Adopted. It appears Respondent erroneously labeled Conclusions of Law as Findings of Fact. Petitioner's Findings of Fact Adopted. Contrary to facts - rejected. Rejected to the extent the application was dated April 23, 1985. Adopted that application was received on April 29, 1985. Adopted. While true, this proposed finding lacks any reference to when this occurred which is the key issue and is therefore rejected. Rejected. No evidence was submitted showing that Citrus Fair was operated as a veterinary facility on February 18, 1985. Evidence to the contrary was received which is more credible. See TX-60, lines 11-12. Rejected as contrary to evidence on TX-61. The Respondent stated he carried the kits to both clinics, not that he used them at both clinics. Rejected. The proposed facts are not consistent with the testimony on TX 61 & 62 and the facts presented are not probative that veterinary medicine was practiced at the Citrus Fair facility. Rejected. The witness says nothing about going to Wildwood by appointment in TX-70. The statement by Respondent that "he was working between the two offices" is not inconsistent with the Respondent's testimony that he was remodeling the Citrus Fair facility. Adopted. Adopted. Rejected as cumulative of the fact that after April 9, 1985 veterinary medicine was practiced at Citrus Fair. Same as No. 12 above.
The Issue Whether Sunny Fresh Citrus Export and Sales, Co., LLC, is liable to Petitioner in the amount of $44,032.00 for delivery of fruit which remains unpaid.
Findings Of Fact Petitioner, DP Partners, Ltd. (Partners), is a Florida Limited Partnership located in Lake Placid, Florida, engaged in the business of citrus production. Daniel H. Phypers and Danielle Phypers Daum, brother and sister, and their father Drew Phypers, are limited partners in the business. Respondent, Sunny Fresh Citrus Export and Sales Co., LLC, (the LLC) is a Florida Limited Liability Company headquartered in Vero Beach, Florida, engaged in the business of exporting citrus for retail sale. The LLC was organized and registered with the State of Florida Division of Corporations on November 3, 2011. The members of the LLC are Kelly Marinaro and Jean Marinaro, husband and wife. Kelly Marinaro (Marinaro) formerly conducted business in the name of Sunny Fresh Citrus Export and Sales Co. (the DBA), a fictitious-name entity registered with the Florida Department of State, Division of Corporations, on October 23, 2007. The fictitious-name entity registration expired on December 31, 2012. Marinaro suffered a massive heart attack in November 2011 and was incapacitated. He did not return to work until the Spring of 2013. On November 4, 2011, after suffering the heart attack, and one day after organizing and registering the LLC, Marinaro conveyed durable power of attorney to Joseph Paladin (Paladin) as his Agent. Among the authority granted to Paladin, was the following: 2. To enter into binding contracts on my behalf and to sign, endorse and execute any written agreement and document necessary to enter into such contract and/or agreement, including but not limited to . . . contracts, covenants . . . and other debts and obligations and such other instruments in writing of whatever kind and nature as may be. * * * 9. To open, maintain and/or close bank accounts, including, but not limited to, checking accounts . . . to conduct business with any banking or financial institution with respect to any of my accounts, including, but not limited to, making deposits and withdrawals, negotiating or endorsing any checks . . . payable to me by any person, firm, corporation or political entity[.] * * * 12. To maintain and operate any business that I currently own or have an interest in or may own or have an interest in, in the future. In Marinaro’s absence, Paladin conducted the usual affairs of the business, including entering into contracts to purchase citrus from several growers. On October 19, 2012, Paladin entered into contract number 2033 with Partners to purchase approximately 6000 boxes of Murcots (a tangerine variety) at $12.00 per box.2/ The contract is signed by Paladin as the Agent of “Sunny Fresh Citrus Export & Sales Company, Licensed Citrus Fruit Dealer (Buyer).” On December 13, 2012, Sunny Fresh entered into contract number 2051 with Partners to purchase Hamlins (a different fruit variety) at $6.50 per box.3/ The contract price was for citrus “on the tree,” meaning it was the buyer’s responsibility to harvest the citrus. The contract is signed by Paladin as the Agent of “Sunny Fresh Citrus Export & Sales Company, Licensed Citrus Fruit Dealer (Buyer).” (Contract 2033 and 2051 are hereinafter referred to collectively as “the contracts”.) The contracts were prepared on pre-printed forms used by Marinaro’s businesses pre-dating Paladin’s involvement. The contract form is titled as follows: Citrus Purchase Contract & Agreement Sunny Fresh Citrus Export & Sales Company Cash Fruit Crop Buyer 2101 15th Avenue Vero Beach, Florida 32960 Paladin testified that he was not aware of more than one company for Marinaro’s fruit-dealing business. He testified that he was not aware of any difference between Sunny Fresh Citrus Export and Sales Company and Sunny Fresh Citrus Export and Sales Co., LLC. Paladin was not aware of when the LLC was created. Paladin’s testimony is accepted as credible and reliable. Paladin testified that his intent was to enter into the contracts for the benefit of “Sunny Fresh.” “Sunny Fresh,” written in twelve-point bold red letters over an image of the sun in yellow outlined in red, is a trademark registered with the Florida Division of Corporations. Marinaro first registered the trademark in February 1998. In his trademark application, Marinaro entered the applicant’s name as “Kelly Marinaro D/B/A Sunny Fresh Citrus.” Marinaro renewed the trademark registration in 2007. Marinaro testified that the “Sunny Fresh” trademark is “owned by the LLC.” On February 20, 2012, Paladin, Marinaro and a third partner, Gary Parris, formed another company, Sunny Fresh Packing, LLC, the purpose of which was to run a fruit-packing house in Okeechobee, Florida. Equipment for the packing house was obtained from a packing house in Ft. Pierce, Florida, which was indebted to Marinaro, in some capacity, and went “belly up.” In March 2013, the Okeechobee packing house was struck by lightning. Shortly after the lightning strike, Marinaro, Paladin, and Mr. Parris, signed a letter addressed “To our valued Growers.” The letter explained that, due to both the lightning strike, which shorted out all computers and electrical components at the packing house, and reduced demand for product due to severe weather in the northeastern United States, they had made a “business decision to end the year now and prepare for next year.” The letter further explained that, “rather than spending thousands of dollars all at once, we feel, it makes better sense to use our cash flow to pay our growers first . . . . We will be sending out checks every week or every other week until everyone is paid or until we receive supplemental cash infusions that we are working on. In that case we would just pay everyone in full, from that.” The letter was prepared on letterhead bearing the “Sunny Fresh” trademark logo. Paladin made a number of payments to Partners on the contracts during 2012 and 2013. Each check shows payor name as “Sunny Fresh” with an address of 2101 15th Avenue, Vero Beach, Florida 32960. Mr. Phypers met with Paladin a number of times to collect checks and understood that Paladin was making concerted efforts to pay all the growers. However, Partners did not receive full payment on the contracts. Paladin drafted a Release of Invoices Agreement (Agreement) by which creditor growers could receive partial payment on their outstanding contracts in exchange for a full release of liability from the buyer. The Agreement lists the following entities and persons as being released from liability: “Sunny Fresh Packing, LLC”; “Sunny Fresh Citrus Export and Sales Co., LLC”; and Kelly Marinaro. Paladin presented the Agreement to Partners with an offer to pay $36,449.45 in consideration for signing the Agreement. Partners did not sign the Agreement. The parties stipulated that the amount owed Partners under both contracts is $44,032.00. Respondent contends that Petitioner’s claim is filed against the wrong business entity. Respondent argues that Petitioner’s contracts were with the DBA, and that Petitioner’s claim is incorrectly brought against the LLC. Thus, Respondent reasons, the LLC is not liable to Petitioner for the monies owed. The DBA was registered with the State of Florida in 2007 and held an active fruit dealer’s license through July 31, 2012. Marinaro owned and operated the DBA at 2101 15th Avenue, Vero Beach, Florida 32960. The DBA filed a citrus fruit dealer’s bond with the Department of Agriculture for the 2008-2009 shipping season. Marinaro registered the trademark “Sunny Fresh” logo in the name of the DBA in 2007, and was still using the logo on his business letterhead in 2013. Marinaro formed the LLC in 2011, which holds an active citrus fruit dealer’s license. Marinaro and his wife, Jean, are the only members of the LLC. The principal address is 2101 15th Avenue, Vero Beach, Florida 32960. The LLC filed citrus fruit dealer’s bonds with the Department of Agriculture on June 28, 2012, for the shipping season ending July 31, 2013, and on May 2, 2013, for the shipping season ending July 31, 2014. Marinaro did not refile a bond for the DBA after forming the LLC. At all times relevant hereto, Marinaro’s fruit dealer’s business has been physically located at 2101 15th Avenue, Vero Beach, Florida 32960. The building at that address bears the name “Sunny Fresh.” Marinaro testified that he formed the LLC shortly after his heart attack to “protect his personal assets.” Marinaro explained that he had little revenue in the LLC “for the next two years,” and he planned for the LLC to conduct sales for the packing company. He expected the LLC would be purchasing fruit from other packing houses. In fact, he testified that, during his absence, he was not aware that either the DBA or the LLC were purchasing fruit. Marinaro was clearly upset about the financial state of his business when he resumed control in the Spring of 2013. He testified that, prior to his heart attack, he was running a business with a typical $10 to $12 million yearly revenue, but that he returned to a business in debt to the tune of roughly $790,000.00. Marinaro lamented that Paladin entered into contracts to buy citrus when that was not the plan for the LLC. Alternately, he blamed Paladin for taking too much money out of the LLC to set up the packing house. Marinaro’s testimony was inconsistent and unreliable. He first testified that Paladin had full authority to purchase fruit in his absence, but later professed to be “dismayed” that his company was purchasing fruit in his absence. The evidence does not support a finding that the LLC was formed for any reason other than to continue his fruit dealings in a legal structure that would protect his personal assets. Marinaro’s explanation that the purpose of the LLC was to conduct sales for the packing company also lacks credibility. The LLC was organized in November 2011, but the packing house in Ft. Pierce from which he acquired the equipment to set up a packing house in Okeechobee did not go “belly up” until February 2012. Marinaro would have had to be clairvoyant to set up an LLC for the sole purpose of sales to a packing house about which he was not aware until four months later. Marinaro’s testimony that he was in the dark about the running of his business and that he was somehow duped by Paladin is likewise unreliable. Marinaro testified that, during his absence, he was “concerned that Paladin was entering into contracts where a bond was required, but not secured.”4/ He could not have been concerned about contracts to buy fruit without posting the required bond if he was not even aware that his company was purchasing fruit. Further, Marinaro neither questioned Paladin about entering into the citrus contracts, nor suggested Paladin use a different contract form for the LLC. The evidence establishes that Marinaro knew Paladin was purchasing fruit during Marinaro’s absence to continue the regular fruit-dealer’s business, and further, that Marinaro knew Paladin was entering into contracts on behalf of the LLC, the company formed just one day prior to Marinaro granting Paladin full power of attorney to run his business. Finally, Marinaro knowingly participated in the formation of Sunny Fresh Packing, LLC, in February 2012, four months after he became incapacitated. This required his involvement in a complicated business scheme in which his company collected on a debt owed by a packing house in Ft. Pierce, and acquired the equipment to run the new packing house, with two partners, Parris and Paladin, located in Okeechobee on property owned by a third party, Mr. Smith, who is not a member of Sunny Fresh Packing, LLC. It is unlikely Marinaro was clueless as to the fruit dealings of the LLC in his absence. Further, it is disingenuous, at best, for Marinaro to suggest that the contracts entered into in 2012 are not with the LLC, the corporation he formed in 2011 to protect his personal assets from his business obligations.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order approving the claim of DP Partners, Ltd., against Sunny Fresh Citrus Export and Sales Co., LLC, in the amount of $44,032.00. DONE AND ENTERED this 30th day of October, 2014, in Tallahassee, Leon County, Florida. S Suzanne Van Wyk 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 30th day of October, 2014.
