The Issue The issues for disposition in this case are whether proposed rules 61D-11.001(17) and 61D-11.002(5), Florida Administrative Code, which consist of the repeal of said rules, constitute an invalid exercise of delegated legislative authority as defined in section 120.52(8), Florida Statutes; and whether the Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering’s (Respondent), failure to prepare a statement of estimated regulatory costs constituted a material failure to follow the applicable rulemaking procedures or requirements set forth in chapter 120.
Findings Of Fact Respondent is the state agency charged with regulating pari-mutuel wagering pursuant to chapter 550, Florida Statutes, and cardrooms pursuant to section 849.086, Florida Statutes. Each Petitioner currently holds a permit and license under chapter 550 to conduct pari-mutuel wagering and a license under section 849.086 to conduct cardroom operations. Petitioners offer designated player games at their respective cardrooms. The rules proposed for repeal, rules 61D-11.001(17) and 61D-11.002(5), relate to the play of designated player games. Rule 61D-11.001(17) provides that “‘[d]esignated player’ means the player identified by the button as the player in the dealer position.” Rule 61D-11.002(5) provides that: Card games that utilize a designated player that covers other players’ potential wagers shall be governed by the cardroom operator’s house rules. The house rules shall: Establish uniform requirements to be a designated player; Ensure that the dealer button rotates around the table in a clockwise fashion on a hand to hand basis to provide each player desiring to be the designated player an equal opportunity to participate as the designated player; and Not require the designated player to cover all potential wagers. Both rules were adopted on July 21, 2014. Both rules list sections 550.0251(12), and 849.086(4) and (11) as rulemaking authority, and section 849.086 as the law implemented. Designated Player Games A designated player game is a subset of traditional poker games in which a designated player plays his or her hand against each other player at the table, instead of all players competing against each other. The term “designated player game” is used synonymously with “player banked games.”3/ However, a designated player is not a cardroom operator. In traditional “pool” poker games, each player bets into a central pool, with the winning hand(s) among all of the players collecting from the pool of bets, minus the cardroom rake. In designated player games, each player at the table makes an individual bet, and compares their hand against the designated player’s hand. If the player’s hand is better than the designated player’s hand, then the designated player pays the player from the designated player’s stack of chips. If the designated player’s hand is better than the player’s hand, then the designated player collects the player’s wager. At an eight- seat table, it is as though there are seven separate “player versus designated player” games. Designated player games were first played at the Ebro (Washington County Kennel Club) cardroom in 2011. The game, known as “double hand poker,” was demonstrated to Respondent, and subsequently approved for play. Though the internal control that describes the rules of game play was not offered in evidence, a preponderance of the evidence demonstrates that the game used a designated player. After Respondent’s approval of Ebro’s double hand poker, Respondent entered an order rescinding its approval due to concerns that the use of a designated player resulted in the establishment of a banking game. That decision was challenged, and subsequently withdrawn, with the result being that “Ebro may immediately resume play of Double Hand Poker as approved by the division.” In 2012, the Palm Beach Kennel Club cardroom began offering “tree card poker” with a designated player. Although tree card poker had been approved by Respondent, the designated player element had not. Thus, since the game was not being played in accordance with the approved internal control, it was unauthorized. Respondent investigated the playing of tree card poker at Palm Beach Kennel Club. A video demonstration was provided that showed two hands of tree card poker being played with a designated player. The video depicted a single designated player playing his hand against each other player at the table, and paying or collecting wagers based on each individual hand. After having reviewed the demonstration video, Respondent ultimately determined that the use of a designated player did not violate the prohibition against banking games as defined. The Adoption of the Designated Player Rules As requests for approval of internal controls for games using designated players became more common, Respondent determined that it should adopt a rule to establish the parameters under which designated player games would be authorized. On December 16, 2013, after having taken public comment at a series of rulemaking workshops, Respondent published proposed rule 61D-11.002(5) which provided as follows: 61D-11.002 Cardroom Games. * * * Card games that utilize a designated player that covers other players’ wagers shall: Allow for only one designated player during any single hand; Not require the designated player to cover all wagers that could be made by the other players in the game; Not allow other players to cover wagers to achieve winnings that the designated player could have won had he or she covered the same wagers; Not allow or require a player to buy in for a different amount than any other player in the game in order to participate as the designated player; and Rotate a button or other object to designate which player is the designated player. The button or other object shall rotate clockwise around the table to give each player the opportunity to participate as the designated player. On February 14, 2014, a challenge to the proposed rule was filed that objected to restrictions on the manner in which designated player games could be conducted. The rule challenge hearing was continued, and the case placed in abeyance pending negotiations between the parties. On March 14, 2014, Respondent filed a Notice of Change to the proposed rule 61D-11.002, which added the following provisions to proposed rule 61D-11.002: The designated player shall: Cover the table minimum for each participating player; and Pay each player an amount above the table minimum equal to their pro rata share of the pot in the event the designated player cannot cover all wagers. A public hearing on the changes to the proposed rule was held on May 8, 2014. As to the designated player provisions of the proposed rule, Respondent received the following comment: [I]f we could modify this . . . taking the existing paragraph 5 and come up with three new criteria, one being uniform requirements for a designated player included within the house rules; allowing for the dealer button to rotate on a hand-by-hand basis for qualified designated players; also, not requiring the designated player to cover all potential wagers, but nonetheless allowing the house rules to set a designated minimum buy-in amount or just a chip count. I think if we had those particular parameters, we would allow the preservation of this game to continue in its current fashion . . . . And . . . we’re going to avoid [] any argument that the department has somehow created a banked card game, because the biggest thing here is that we’re not requiring that the designated player meet all the theoretical payouts of the game. On May 19, 2014, written comments were submitted on behalf of several pari-mutuel facilities. Those comments included proposed language that is identical to the rule that was ultimately adopted, and included the following: Multiple jurisdictions have determined a key element to banked card games is the house requiring all wagers be covered. We propose this language to distinguish between lawful games and impermissible banked games. On June 9, 2014, Respondent filed a Notice of Change that adopted the industry’s proposed language, and changed proposed rule 61D-11.002 to its present form. On June 13, 2014, the challenge to proposed rule 61D-11.002(5) was voluntarily dismissed, and the case was closed. On July 21, 2014, rule 61D-11.002(5) became effective. There can be little doubt that Respondent understood that it was, by its adoption of rule 61D-11.002(5), recognizing player banked games in which a designated player plays his or her hand against each other player at the table. The rule is substantial evidence that, as of the date of adoption, Respondent had determined that designated player games did not violate the prohibition against “banking games” as that term is defined in section 849.086. Internal Controls Over the course of several years, beginning generally in 2011 and extending well into 2015, Respondent was presented with internal controls from cardrooms around the state for playing designated player games. Internal controls are required before a particular game may be offered, and describe the rules of the game and the wagering requirements. The internal controls submitted by the Jacksonville Kennel Club; the Daytona Beach Kennel Club; the West Flagler Associates/Magic City Poker Room; and the Naples/Ft. Myers Greyhound Track Cardroom, described games in which designated players played their hand against those of the other players at the table, and paid and collected wagers from the designated player’s chip stack based on the rank of the designated player’s hand against the individual players. The games described did not involve pooled wagers, and clearly described player banked games. Respondent approved the internal controls for each of the four facilities. The process of approving internal controls occasionally included the submission of video demonstrations of the games described in the internal controls for which approval was being sought. Approval of internal controls was never done without the review and assent of Respondent’s legal department or the division director. With regard to the rules of the designated player games that underwent review and approval by Respondent, “all of them are about the same, few differences.” From 2011 through mid-2015, Respondent approved internal controls for playing one-card poker, two-card poker, three-card poker, Florida Hold ‘Em, and Pai Gow poker using designated players at numerous cardroom facilities. A preponderance of the evidence establishes that Respondent was aware of the fact that, for at least several facilities, “eligible” designated players were required to meet minimum financial criteria, which ranged from a minimum of $20,000 in chips, up to $100,000 in chips. In the case of the Daytona Beach Kennel Club cardroom, internal controls called for a designated player to submit an application, agree to a background check, and submit a deposit of $100,000. Respondent approved those internal controls. DBPR Training In August 2015, Mr. Taylor was invited by the Bestbet cardroom in Jacksonville4/ to participate in a training session it was offering for its employees. Mr. Taylor is an investigator for Respondent, and visited the pari-mutuel facilities at least once per week. Mr. Taylor was invited by the facility to get an overview of how the cardroom games that had been approved by Respondent, including designated player games, were played. The games that were the subject of the training were substantially similar to those depicted in the April 2012 training video, and those he had observed during his weekly inspections. The designated player games for which training was provided had been approved by Respondent. In September 2015, training in designated player games was provided at Respondent’s Tallahassee offices to several of its employees. Mr. Taylor perceived the training “as an overview to give us an idea of what we are going to see.” Neither Mr. Taylor nor any other participant in the training offered any suggestion that the training was being provided in anticipation of a shift in Respondent’s practice of approving the internal controls for designated player games. Current Rulemaking On September 23, 2014, Respondent published a Notice of Development of Rulemaking. The notice cited 15 of the 30 subsections of chapter 61D-11 as being the subject areas affected by the notice, and provided that “[t]he purpose and effect of the proposed rulemaking will be to address issues discovered in the implementation and practical application of cardroom rules adopted on July 21, 2014.” There is nothing in the notice to suggest that Respondent had modified its position on designated player games, and its continued approval of institutional controls approving such games is strong evidence that it had not. On August 4, 2015, Respondent published a Notice of Meeting/Workshop Hearing for a rule workshop to be held on August 18, 2015. The Notice listed each rule in chapter 61D-11 as the “general subject matter to be considered,” including those related to games of dominos. Respondent asserted that it had “posted a version of amended cardroom rules that included the [repeal of rule 61D-11.005] on its website,” though such was not published, nor did Respondent provide a record citation in support of its assertion. On October 29, 2015, Respondent published its proposed amendments to chapter 61D-11. Rule 61D-11.001(17), which defines the term “designated player” as “the player identified by the button as the player in the dealer position,” was proposed for repeal. Rule 61D-11.002(5), as set forth above, which had established the standards for designated player games, was proposed for repeal. Rule 61D-11.005 was proposed for amendment to add subsection (9), which provided that “[p]layer banked games, established by the house, are prohibited.” On December 2, 2015, the Division held a public hearing on the proposed amendments. During the public hearing, Mr. Zachem made it clear that the intent of the proposed amendments was to change the Division’s long-standing and consistently applied construction of section 849.086 as allowing designated player games to one of prohibiting designated player games, and in that regard stated that: The rules pertaining to designated player games are now going to be correlated with the statute that is the prohibition against designated player games. The statute does not allow designated player games. There has to be a specific authorization for a type of game in statute, and there is none in 849.086 pertaining to designated player games . . . . When some of these definitions in other areas were created, I don’t think that the concept of what these games could even become was fathomed by the division. Given the process by which internal controls for designated player games were approved by Respondent, including written descriptions and video demonstrations of play, the suggestion that Respondent could not “fathom” the effect of its rules and decisions is not accepted. On December 11, 2015, Petitioners individually filed petitions challenging the validity of the proposed rules. The cases were consolidated and ultimately placed into abeyance pending efforts to resolve the issues in dispute. Agency Action Concurrent with Rulemaking After the December 2015 public hearing, and prior to the adoption of any amendments to chapter 61D-11, Respondent filed a series of administrative complaints against cardrooms offering designated player games. Those administrative complaints were very broadly worded, and reflected Respondent’s newly-developed position that designated player games constituted “a banking game or a game not specifically authorized by Section 849.086, Florida Statutes.” In that regard, Mr. Zachem testified that a cardroom could have been operating in full compliance with its Respondent-approved internal controls and still have been the subject of an administrative complaint.5/ The position of Respondent was made clear by Mr. Zachem’s statement that if a cardroom has an approved designated player game “where a banker is using their table, their dealer, their facility they [the cardroom] are establishing a bank.”6/ Thus, there can be little doubt that Respondent now construes section 849.086 to mean that player banked games constitute prohibited “banking games” because, by allowing the player banked game in its facility, the cardroom “establishes” a bank against which participants play. After the December public hearing, Ms. Helms was instructed that she was to no longer approve internal controls if they included provisions regarding designated players. That blanket instruction came with no conditions. Since that instruction, the internal controls for at least one facility have been disapproved, despite their being “about the same” as internal controls that had been previously approved for other facilities. Ms. Helms testified that after the December 2015 rule hearing, “things kind of turned around” with regard to Respondent’s position on designated player games. She then rethought her selection of words, stating instead that “things changed.” Given the totality of the evidence in this case, Ms. Helms’ statement that the position of Respondent towards designated player games “turned around” is the more accurate descriptor. Notice of Change On January 15, 2016, the Division published a Notice of Change/Withdrawal of proposed rules. Through the issuance of this notice, the Division withdrew proposed rule 61D-11.005(9). The proposed repeal of rules 61D-11.001(17) and 61D-11.002(5) remained unchanged. Since that notice of change, the preponderance of the evidence demonstrates that Respondent has stopped approving internal controls that propose the offering of designated player games, and has continued to take action against facilities that offer designated player games. Respondent’s statements and actions, including those made in the course of this proceeding, demonstrate that Respondent intends the repeal of rules 61D-11.001(17) and 61D-11.002(5), to effectuate the prohibition of designated player games despite the withdrawal of proposed rule 61D-11.005(9). Lower Cost Regulatory Alternative When it proposed the subject amendments to rule 61D-11 on October 29, 2014, Respondent had not prepared a statement of estimated regulatory costs. Rather, the notice of proposed rule provided that: The agency has determined that this rule will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency. The agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: the economic review conducted by the agency. Any person who wishes to provide information regarding the statement of estimated regulatory costs, or to provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice. On November 19, 2015, in conjunction with the rulemaking process described above, a number of licensed cardroom operators, including some of the Petitioners, timely submitted a good faith proposal for a lower cost regulatory alternative (“LCRA”) to the proposed amendments to chapter 61D-11 that would have the effect of prohibiting designated player games, citing not only the creation of rule 61D-11.005(9), but the repeal of rule 61D-11.002(5). A preponderance of the evidence demonstrates that the LCRA indicated that the rule was likely to directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. The LCRA, as described in the letter of transmittal, also concluded that regulatory costs could be reduced by not adopting the proposed rule amendments, thus maintaining Respondent’s previous long-standing interpretation of section 849.086, and thereby accomplishing the statutory objectives. Respondent employed no statisticians or economists, and there was no evidence to suggest that any such persons were retained to review the LCRA. Though Mr. Zachem did not “claim to be an expert in statistics,” he felt qualified to conclude that the LCRA was “a bit of a challenging representation.” Thus, Respondent simply concluded, with no explanation or support, that “the numbers that we received were unreliable.” Respondent did not prepare a statement of estimated regulatory costs or otherwise respond to the LCRA. Respondent argues that its abandonment of proposed rule 61D-11.005(9), which was the more explicit expression of its intent to prohibit designated player games, made the LCRA inapplicable to the rule as it was proposed for amendment after the January 15, 2016, notice of change. That argument is undercut by the fact that Respondent did not amend its statement of estimated regulatory costs as a result of the change in the proposed rule. Moreover, the evidence is overwhelming that Respondent, by its decision to disapprove internal controls that included designated player games, and its enforcement actions taken against cardrooms offering designated player games, specifically intended the amendments repealing the designated player standards to have the effect of prohibiting designated player games. Thus, despite the elimination of the specific prohibition on designated player games, there was no substantive effect of the change. Therefore, the LCRA remained an accurate expression of Petitioners’ estimated regulatory costs of the proposed rule. Ultimate Findings Respondent has taken the position that the repeal of rule 61D-11.005(9) was undertaken “[f]or clarity with the industry.” That position is simply untenable. Rather, Respondent has taken an activity that it previously found to be legal and authorized and, by repealing the rule and simply being silent on its effect, determined that activity to be prohibited. By so doing, Respondent has left it to “the industry” to decipher the meaning and effect of a statute that is, quite obviously, ambiguous and in need of the interpretive guidance that has been and should be provided by rule. The evidence is conclusive that, by its repeal of rule 61D-11.002(5), Respondent simply changed its mind as to whether playing with a designated player constituted the establishment of a prohibited banking game.7/ It previously determined that such games were lawful under the terms of section 849.086; it has now determined they are not. Though there is substantial evidence to suggest that the reason for the change was related to the renegotiation of the Seminole Compact, the reason is not important. What is important is that Respondent has taken divergent views of the statute in a manner that has substantially affected the interests of Petitioners. For Respondent to suggest that its repeal of the rules is a clarification, a simplification, or a reflection of the unambiguous terms of the statute, and that Petitioners should just tailor their actions to the statute without any interpretive guidance from Respondent, works contrary to the role of government to provide meaningful and understandable standards for the regulation of business in Florida. Respondent cannot, with little more than a wave and well-wishes, expect regulated businesses to expose themselves to liability through their actions under a statute that is open to more than one interpretation, when the agency itself has found it problematic to decipher the statute under which it exercises its regulatory authority.
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 Charles J. Evans and Inez P. Hamer, t/a Nezzers, hold beverage license No. 52-00669 and held this license at all times relevant hereto. On July 13, 1983, Beverage Agents Brown and Rozar, following up on a complaint of gambling at Nezzers, visited Nezzers around 7:30 p.m. It was a quiet night in the bar. Upon entry they observed two men playing pool at Table A (Exhibit 2), which is the nearest to the bar of the four pool tables in the room. Table A is a time table and the players pay based on the time the table is used. The other three tables are coin tables which are activated for play by depositing $.50 in coins in the table for each game. Brown and Rozar each bought a beer and commenced playing pool on Table D (Exhibit 2). Some 15 to 30 minutes later two other men started playing pool at Table B (Exhibit 2). At this time, in addition to the six pool players, the only people in the bar were the bartender, Marjorie Hamer, and two or three other patrons. Brown and Rozar observed the men at Table B, later identified as Valencourt and Mosely, flip a coin to see who would break. Thereafter, the agents several times observed Valencourt and Mosely exchange money at the conclusion of a game. One would toss a bill on the pool table and the winner [presumably] would pick it up and put it in his pocket. Hayman and Foreman playing at Table A were overheard to say one or the other was "one down" or "two down" and were seen putting a bill on the end of the bar away from the cash register from where it was picked up by the other player. On several occasions the players were observed getting change from Marjorie Hamer. Table A is closer to the bar than to Table D. Accordingly, Marjorie Hamer, setting behind the bar, was in as good or better position to observe the exchange of money as were agents brown and Rozar. Marjorie Hamer, the 22-year- old daughter of Inez Hamer, has worked at establishments dispensing alcoholic beverages and is generally familiar with beverage laws prohibiting gambling at a licensed establishment. Two large signs are conspicuously posted in the room which say "NO GAMBLING." On July 13, 1983, neither of the owners was present during the time the agents were in Nezzers. Inez Hamer had worked until 6:00 p.m. when she was relieved by Marjorie. Marjorie had earlier told her mother that she did not feel well and would like not to come in on July 13, but Inez told her it would be a quiet night without much business and Marjorie came in. Marjorie Hamer concurred with the testimony of Brown and Rozar that there were three pool tables occupied and few other people were in the bar. Marjorie spent most of the evening reading the paper and testified she did not see any of the pool players give money to his opponent at the end of a game or overhear any conversation that would lead her to believe gambling was going on.
The Issue Whether Section (2) of Rule 59C-1.012(2), Florida Administrative Code (the "CON Administrative Hearing Procedures Rule" or the "Rule") constitutes an invalid exercise of delegated legislative authority? Whether Section (2) of the Rule, in effect, was repealed July 1, 1998, by the adoption of the Uniform Rules of Procedure?
Findings Of Fact The Right to a Comparative Hearing Section (2) of the CON Administrative Procedures Rule provides a method by which a co-batched applicant whose CON application has been approved in a proposed decision by AHCA and then challenged by another party may invoke the right to a comparative hearing. The right to a comparative hearing in CON proceedings has as its source due process considerations found by the United States Supreme Court in a federal case that did not involve CONs but in a context that shared with the CON arena the need for comparative review: Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 66 S. Ct. 148, 90 L.ED. 108 (1945). These due process considerations have been described as follows: The so-called Ashbacker doctrine, enunciated by the Court has been adopted in Florida. When the decision on one application will substantially prejudice other simultaneously pending applications because all applicants are competing for a franchise to serve a market that only one of them in practical effect will be given authorization to serve the applications are mutually exclusive. In this situation, any of the applicants may request a comparative hearing in which the merits of all applications will be tried together and against each other. Section 2.32, Boyd, Overview of the Administrative Procedure Act, Florida Administrative Practice, Florida Bar, 6th Ed. (2001), p. 2-38. The Ashbacker doctrine has been applied by Florida Courts to CON proceedings involving co-batched applicants. See Bio-Medical Applications of Clearwater, Inc. v. Dept. of Health & Rehabilitative Services, 370 So. 2d 19 (Fla. 2d DCA 1979); Bio-Medical Applications of Ocala, Inc. v. Dept. of Health & Rehabilitative Services, 374 So. 2d 88 (Fla. 1st DCA 1979); and South Broward Hospital District v. Dept. of Health & Rehabilitative Services, 385 So. 2d 1094 (Fla. 4th DCA 1980). In the Second DCA's Bio-Medical decision, above, the Court found a due process right in co-batched applicants to comparative hearings involving the other co-batched applicants and recognized the flexibility of the Agency's predecessor, HRS to devise "administrative procedures [that] will be promulgated to deal with administrative problems in affording comparative hearings, if any such problems are anticipated." Bio-Medical Applications of Clearwater, Inc., above, at 25, e.s. The right to a comparative hearing in CON proceedings has been codified in statute. Section 408.039(5)(c), Florida Statutes, provides, "only applicants considered by the agency in the same batching cycle are entitled to a comparative hearing on their applications." Section 408.039(5)(c), Florida Statutes, is among the statutes implemented by the CON Administrative Procedures Rule. Section (2) of the Rule is the provision at issue in this proceeding. The Parties Baptist is a licensed hospital located in Duval County, Florida. In the second batching cycle for 2001, Baptist applied to the Agency for Health Care Administration (the "Agency" or "AHCA") for a certificate of need ("CON") to establish a new 92- bed satellite hospital also in Duval County. The CON was preliminarily awarded by AHCA in a proposed decision contained in a State Agency Action Report (the "SAAR") issued December 14, 2001. The Agency for Health Care Administration is responsible for administering the certificate of need program under the Health Facility and Services Development Act, Sections 408.031-408.045, Florida Statutes. It promulgated the Rule with which this proceeding is concerned: Rule 59C-1.012, Florida Administrative Code. St. Vincent's and St. Luke's, like Baptist, are licensed hospitals located in Duval County, Florida. Also like Baptist, the two are the beneficiaries of proposed decisions in the SAAR although St. Vincent's, as explained below, was not as successful preliminarily as it had hoped during the events that precipitated this rule challenge. Precipitating Events A number of other applications were co-batched with Baptist's application in the second 2001 batching cycle. Three of the other co-batched applications were filed by St. Vincent's and St. Luke's. St. Luke's application was for a replacement hospital. St. Vincent's filed two applications, one a partial application for a 135-bed hospital; the other a full application for a 170-bed hospital, both to be located in the facility St. Luke's would leave if it is ultimately successful in its attempt to gain approval for the replacement hospital. Following review and evaluation of the applications, AHCA issued its SAAR and notices of intent on December 14, 2001. A SAAR sets forth in writing AHCA's findings of fact and determination upon which decisions are made with regard to CON applications. If there are no challenges filed timely to any of the decisions in the SAAR, the proposed decisions in the SAAR become final agency action. If there is a challenge then all of the action of AHCA in the SAAR remains preliminary pending the outcome of further administrative proceedings although, as more fully explained below, there are occasions when a decision in a SAAR is challenged but nonetheless it or other decisions are severed from the SAAR. Upon severance, they become final agency action while administrative proceedings continue with regard to other decisions contained in the SAAR. In the December 14, 2001, SAAR, the Agency explained the four proposed decisions with regard to the four co-batched applications of the three hospitals in this proceeding. The Agency approved Baptist's application for a 92-bed acute care satellite hospital, granted St. Vincent's partial application for a new 135-bed acute care hospital, and granted St. Luke's application for a new replacement hospital. But it denied St. Vincent's full application for a new 170-bed acute care hospital. Two weeks after the issuance of the SAAR, on December 28, 2001, AHCA published its notices of intent. The publication informed the public of AHCA's proposed decisions on the four co-batched applications as announced in the SAAR. In accord with the requirement of Section 408.039(4)(c), Florida Statutes, the notices were published in the Florida Administrative Weekly (Vol. 27, No. 52). With regard to providing a point of entry into additional administrative proceedings and in accord with Section 408.039(5), the publication stated: A request for administrative hearing, if any, must be made in writing and must be actually received by this department within 21 days of the first day of publication of this notice in the Florida Administrative Weekly pursuant to Chapter 120, Florida Statutes, and Chapter 59C-1, Florida Administrative Code. On the twenty-first day after publication, Memorial Healthcare Group, Inc., d/b/a Memorial Hospital Jacksonville ("Memorial"), an existing provider of acute care hospital services in Duval County, filed a petition challenging AHCA's preliminary approval of St. Vincent's partial application. On the same date, January 18, 2002, St. Vincent's filed a petition challenging the preliminary denial of its full application for a new 170-bed hospital. No party challenged the decision to issue a certificate of need to Baptist or St. Luke's within the twenty-one day period set forth in the notice. Thirty-five days after publication of the proposed decisions, and fourteen days after the filing of the Memorial and St. Vincent's petitions but within the time period allowed for by Section (2) of the Rule, St. Vincent's filed a third petition related to the co-batched applications. This petition of St. Vincent's invoked its right to a comparative hearing in which all approved applications, including Baptist's, would be at issue. The second of St. Vincent's two petitions was filed well beyond the 21-day period provided by AHCA as a point of entry into administrative proceedings for challenging decisions announced in the SAAR. The authority for filing the petition later than the 21-day period provided for in AHCA's December 28, 2001, notice is the object of this proceeding: Section (2) of the CON Administrative Hearing Procedures Rule. The Rule and its Development Rule 59C-1.012, Florida Administrative Code, is entitled "Administrative Hearing Procedures." It is one of two chapters of AHCA Rules in Volume 59C of the Florida Administrative Code that appear under the caption, "CERTIFICATE OF NEED." See Volume 59C, Florida Administrative Code. The first chapter, 59C-1, which includes the Rule, is entitled: "Procedures For the Administration of Sections 408.031 -- 408.045, Florida Statutes, Health Facility and Services Development Act." Rule 59C-1.012 states in paragraph (a) of subsection (2): If a valid request for administrative hearing is timely filed challenging the noticed intended award of any certificate of need application in the batch, that challenged granted applicant shall have ten days from the date the notice of litigation is published in the Florida Administrative Weekly to file a petition challenging any or all other cobatched applications. Rule 59C-1.012(2)(a), Florida Administrative Code. There is no contention in this proceeding that St. Vincent's filed its petition challenging AHCA proposed decision to approve Baptist's application in anything other than a timely manner under Section (2) of the Rule, that is, within its ten-day period: "10 days from the date the notice of litigation [to be distinguished from an AHCA notice of intended action or of proposed decision] is published in the Florida Administrative Weekly." Baptist hopes to defeat St. Vincent's petition with a motion to dismiss (see DOAH Case No. 02-0943CON) that depends on the outcome in this case; if Section (2) of the Rule is invalidated then there is no authority for the filing of St. Vincent's request for comparative hearing later than the 21- day period during which the other petitions were filed. A ruling, therefore, on the motion awaits the conclusion of this proceeding. Subsection (2) of the Rule was added by an amendment to the Rule in December of 1992 (the "1992 Amendment"). The Rule has not been amended since. The certification package for the 1992 Amendment to add Subsection (2) to the Rule was submitted to the Bureau of Administrative Code under cover of a letter dated November 24, 1992. In the certification, signed by the Department's General Counsel, the "[s]pecific [r]ulemaking [a]uthority" for the amendment is "408.15(8), Florida Statutes." Petitioner's Exhibit 4. Under "Law Being Implemented, Interpreted or Made Specific" are listed "408.039(5), F.S." and "120.57, 120.59, F.S." Id. The language in the amendment that added the present Section (2) to the Rule is markedly different from language originally proposed in the process that culminated in the present language. The different language proposed earlier is contained in an Inter-Office Memorandum dated January 31, 1992. The memorandum references "proposed amendments to [the Rule] . . . circulated for internal office review and comment." See Petitioner's Exhibit 1. This earlier version of the amendment did not allow any additional time beyond twenty-one days from the publication of a notice of proposed decisions or a notice of intent for a co-batched CON applicant to request a comparative hearing. The proposal provided only a twenty-one day period from publication of the notice of the Agency's proposed decision as the time for requesting a comparative hearing. The language of this earlier version recognized the difficulty posed for granted applicants among a batch of applicants. There may be no reason for an approved applicant to seek further administrative proceedings with regard to a proposed decision that is favorable unless and until that proposed decision is challenged by another party. Such a challenge may not be filed until the last minute of the twenty- first day leaving the applicant without time to request a comparative hearing or requiring the applicant to draft a request for such a hearing and stand on watch in the AHCA Clerk's office, ready to file it in case a petition contesting the approval of its application is filed at the last minute. The earlier version, therefore, provided that once a petition challenging any proposed decision in a SAAR was filed that there were implications for the other applications in the same batch: (2) If any portion of the agency decision contained in the State Agency Action Report is challenged by any person authorized by s. 381.709(5)(b), F.S., all applications in the batch are at issue, with the following exceptions: [a denied applicant who has not challenged the denial]. [an application severed from the remainder of the batch by stipulation of the parties under other certain conditions] (Petitioner's Exhibit 1, 5th page of a ten-page document with no page numbers. The language in the quote, above, is underscored in the exhibit since it is language proposed to be added by a rule amendment. In order to emphasize part of that language, however, the underscoring has been eliminated with the exception of the language emphasized.) The import of this different version of what became the language in the Rule is that there are other ways (albeit ways that may not function as smoothly as the method provided by the Rule) that applicants could invoke their right to a comparative hearing. A challenge to the Rule as proposed to be amended in accord with the language in the interoffice memorandum of January of 1992 was filed. In order to settle the matter, the Agency made changes. These changes are reflected in a memorandum dated April 7, 1992, from "Lesley Mendelson" (the "Mendelson memorandum") to "Liz Dudek" and "Bob Pannel." After discussion of several proposals by interested parties, one of which is designed to cure problems posed by "the price extracted from granted applicants to enter into a stipulation which would allow the granted applicant to be severed from the batch" (Petitioner's Exhibit 2), the Mendelson Memorandum recommends the language the agency settles on eventually as "the new paragraph 2(b)": (b) If a timely petition is filed challenging one or more intents to grant an application in the same batching cycle, the challenged granted applicant(s) shall have 10 days to file a petition challenging any or all notices of intent in the same batching cycle. (Petitioner's Exhibit 2.) This language with changes not material to this proceeding eventually was incorporated into Section (2) of the Rule. Stamped received September 9, 1992, AHCA submitted a notice of proposed rulemaking to the Bureau of Administrative Code in the Department of State. The notice proposes with modification of language insignificant to this proceeding the concept proposed in the Mendelson's memorandum. The Agency describes the proposed changes to Rule 59C-1.012 (the "1992 Amendment") as procedural in nature: The purpose of the proposed amendments . . . is to clarify and revise the existing rule regarding the definitions and procedures relating to administrative hearings . . . . The proposed amendments . . . set forth administrative hearing procedures for batched Certificate of Need applications . . . . (Petitioner's Exhibit 3.) In answer to the question of what prompted the development of the 1992 Amendment now in the Rule, Elizabeth Dudek, AHCA Deputy Secretary for Managed Health Care and Health Quality, and the Director of the Certificate of Need Office at the time 1992 Amendment were proposed, testified: [I]t was not uncommon at that point [prior to the 1992 Amendments] to have a nursing home case with 20 or more applicants and try to deal with who filed what when, even with letters of intent, and not uncommon to have at that point after a CON decision was made, to have CON consultants, their attorneys, lining the halls to see who would . . . file a petition or challenge against one of the parties in the case. And also not uncommon that there were, in a large case, individuals who might have had an approval but basically were held captive by the entire process . . . . So there was not still a process that was as streamlined as it could have been and basically cut back on some of the uncertainty and just the volume of what was going on. So one of the things that we looked to do with this rule is try to further . . . narrow and clarify what the process would be with respect to outcomes of CON decisions; and then how people would progress further from that . . . (Tr. 117, 118). Ms. Dudek went on to testify that the problem addressed by the 1992 Amendment did not occur in cases where the issues were between one applicant and the Agency or in cases of expedited review. The issues the 1992 Amendment were intended to resolve relate to co-batched applicants and stem from the rights of co-batched applicants to comparative review. Comparative Review Under the statutory scheme for administration of the CON Program, a CON is required for the establishment of certain types of health care facilities (such as a hospital or nursing home), for the establishment of additional beds at an existing facility, and for the establishment of certain services. Persons seeking a CON must file an application in what is known as a "batching cycle." See Section 408.039(1), Florida Statutes, and Florida Administrative Code Rule 59C-1.010. In a batching cycle, all applications seeking approval for the same type of facility, beds, or services undergo "comparative review" by the Agency. "Comparative review" is defined as follows: "Comparative review" means the process by which Certificate of need applications, submitted in the same batching cycle for beds, services or programs for the same planning area, as defined by applicable rules, are competitively evaluated by the agency through final agency action for purposes of awarding a Certificate of Need. (Emphasis added.) See Florida Administrative Code Rule 59C-1.002(11). The Agency proposes a decision to approve or deny a CON application and then denied applicants are afforded rights to further administrative proceedings pursuant to Section 408.039, Florida Statutes. Existing facilities and programs may challenge also the Agency's proposed decision to approve a CON application for a competing facility or program. Section 408.039(5) contains the statutory provisions related to administrative hearings on CON decisions: Within 21 days after publication of notice of the State Agency Action Report and Notice of Intent, any person authorized under paragraph (c) to participate in a hearing may file a request for an administrative hearing; failure to file a request for hearing within 21 days of publication of notice shall constitute a waiver of any right to a hearing and a waiver of the right to contest the final decision of the agency. A copy of the request for hearing shall be served on the applicant. Hearings shall be held in Tallahassee unless the administrative law judge determines that changing the location will facilitate the proceedings. The agency shall assign proceedings requiring hearings to the Division of Administrative Hearings of the Department of Management Services within 10 days after the time has expired for requesting a hearing. Except upon unanimous consent of the parties or upon the granting by the administrative law judge of a motion of continuance, hearings shall commence within 60 days after the administrative law judge has been assigned. All parties, except the agency, shall bear their own expense of preparing a transcript. In any application for a certificate of need which is referred to the Division of Administrative Hearings for hearing, the administrative law judge shall complete and submit to the parties a recommended order as provided in ss. 120.569 and 120.57. The recommended order shall be issued within 30 days after the receipt of the proposed recommended orders or the deadline for submission of such proposed recommended orders, whichever is earlier. The division shall adopt procedures for administrative hearings which shall maximize the use of stipulated facts and shall provide for the admission of prepared testimony. * * * The applicant's failure to strictly comply with the requirements of s. 408.037(1) or paragraph (2)(c) is not cause for dismissal of the application, unless the failure to comply impairs the fairness of the proceeding or affects the correctness of the action taken by the agency. The agency shall issue its final order within 45 days after receipt of the recommended order. If the agency fails to take action within such time, or as otherwise agreed to by the applicant and the agency, the applicant may take appropriate legal action to compel the agency to act. When making a determination on an application for a certificate of need, the agency is specifically exempt from the time limitations provided in s. 120.60(1). The right to a comparative hearing is codified in paragraph (c) of the statute providing administrative proceedings related to CONs: (c) In administrative proceedings challenging the issuance or denial of a certificate of need, only applicants considered by the agency in the same batching cycle are entitled to a comparative hearing on their applications. Existing health care facilities may initiate or intervene in an administrative hearing upon a showing that an established program will be substantially affected by the issuance of any certificate of need, whether reviewed under s. 408.036(1) or (2), to a competing proposed facility or program within the same district. Section 408.039(5), Florida Statutes. It is this provision that statutorily confers on co-batched applications "entitle[ment] to a comparative hearing on their applications." Id. "Comparative hearing" is defined to mean: (10) "Comparative hearing" means a single hearing, conducted pursuant to s. 120.57, F.S., and s. 59C-1.012, F.A.C., held to review all pending applications in the same batching cycle and comparatively reviewed by the agency. (Emphasis added.) See Rule 59C-1.002(10), Florida Administrative Code. Participation in Comparative Review Proceedings Under current procedure, all co-batched applicants do not automatically participate in comparative review because of one of the applicants' request for administrative proceedings following issuance of the SAAR. If the request does not relate to the denial of another co-batched applicant and the denied applicant fails to challenge the denial within the 21-day period then the denied applicant has no right to participate. It participates only if its denial has been challenged by another, a rare event. (See tr. 124). The denied applicant, by failing to challenge its own denial waives its right to comparative review. Approved applicants, moreover, that are challenged are not invariably fated to endure a comparative hearing until it is completed. Once a co-batched applicant has challenged the approved application, the proceedings related to the comparative hearing commence. But under the Rule, if all challenges to the approval are subsequently voluntarily dismissed as well as any to the fixed need pool, the approved applicant is severed from the batch. The severed applicant then receives a CON separately from action with regard to its co-batched applicants by final agency action. The same happens if no one challenges an approved applicant and there is no challenge to the fixed need pool, yet other challenges are made to other proposed decisions announced by the SAAR. (This was the scenario with regard to Baptist prior to St. Vincent's request for a comparative hearing.) The approved unchallenged applicant is severed from the batch and receives the certificate of need awarded by the SAAR by separate final agency action. These processes are codified in sub-paragraphs(b) and (c) of Section (2) of the Rule. St. Vincent's Interest in a Comparative Hearing Applications for CONs in the same batching cycle are not necessarily mutually exclusive. It is possible, for example, that both St. Vincent's and Baptist's could emerge from administrative hearings with the CONs for which they applied. Nonetheless, their proposals might be mutually exclusive. In the proceeding brought against St. Vincent's, Memorial might be able to prove that the District has a need for a number of beds that would allow either St. Vincent's approval or Baptist's but not both. If the hearing is not a comparative hearing but simply Memorial versus St. Vincent's then in light of such proof of mutual exclusivity, St. Vincent's application would have to be denied since Baptist's had been approved. On the other hand, if a comparative hearing is held, and St. Vincent proved that its application is superior to Baptists and that it was otherwise entitled to a CON, then its application could still be granted in the face of Memorial's proof of mutual exclusivity. In such a case, Baptist's would have to be denied. St. Vincent's interests, therefore, propelled it to request a comparative hearing once Memorial challenged AHCA's proposed decision to approve the St. Vincent's CON application. Baptist, in turn, hopes to avoid a comparative hearing with St. Vincent's. Its hope is based on what it sees as the invalidity of Section (2) of the Rule against which it has launched a two-pronged attack. Baptist's Two-pronged Attack Baptist sees Section (2) of the Rule to be in contravention of statutory authority. It reads the applicable statutes to require the filing of a request for comparative hearing within the 21-day period following the publication of the notice of the SAAR without authority for the filing later in the 10-day window as authorized by Section (2) of the Rule. Baptist also argues that Section (2) of the Rule was repealed when the Uniform Rules of Procedure were adopted and AHCA failed to obtain an exception for the section by July 1, 1998. Subsumed in this argument is the contention that the provision of the 10-day window conflicts with one of the Uniform Rules: Rule 28-106.111, Florida Administrative Code, the "Uniform Point of Entry Rule." The Uniform Point of Entry Rule Rule 28-106.111, Florida Administrative Code, which became effective April 1, 1997, provides, in pertinent part: (2) Unless otherwise provided by law, persons seeking a hearing on an agency decision which does or may determine their substantial interest shall file a petition for hearing with the agency within 21 days of receipt of written notice of the decision. * * * (4) Any person who receives written notice of an agency decision and who fails to file a written request for a hearing within 21 days waives the right to request a hearing on such matters. The subject of the Uniform Point of Entry Rule is what is referred to in case law as "point of entry." Point of entry is that opportunity that must be provided by an agency to a party to participate in administrative proceedings after an agency decision has determined the party's substantial interests and through which the party enters administrative proceedings and thereby gains access to the decision-making process by which the agency determines the party's substantial interests. Indeed, the title of Chapter 28-106, is "Decisions Determining Substantial Interests." The Chapter is one set of what makes up an assemblage of rules required by the Administrative Procedure Act: the Uniform Rules of Procedure. Uniform Rules of Procedure In 1996, the Florida Legislature, in response to an ongoing examination of the Model Rules of Procedure (see Chapter 28-1 through 5 of the Florida Administrative Code, now repealed) initiated by the Governor's Office and as part of a revision of the Administrative Procedure Act, enacted Section 120.54(5), Florida Statutes. The section mandates adoption of "one or more sets of Uniform Rules of Procedure." Section 120.54(a)1., Florida Statutes. As a result of the mandate, the Uniform Rules of Procedure were adopted. Chapter 28-106 is one set of the Uniform Rules. Events that led up to the adoption of the Uniform Rules of Procedure were described at hearing by William E. Williams, a member of the Executive Council of the Administrative Law Section of the Florida Bar prior to 1996 and the Section Chair in 1996, when the Legislature mandated the adoption of the Uniform Rules of Procedure: The Model Rules of Procedure . . . had been in place for about 25 years and although the thought early on was to make them apply to all agencies, the Model Rules really did not. . . . they applied to the extent that agencies didn't adopt rules on the same subject; so the agency had the ability to essentially trump the Model Rules by adopting their own rules of procedure. * * * The administrative law section took a position . . . that by having each agency adopt its own procedural rules . . . was confusing to the practicing bar and the public because different time parameters were provided for in various agency rules. * * * [W]hat became 120.54(5) was essentially a product of the input of the administrative law section with regard to Uniform Rules of Procedure that would be uniformly applicable to all agencies in the absence of that agency seeking an exception under certain circumstances. (Tr. 50-52). Among the requirements in Section 120.54(5)(b)4., is one that rules be adopted for the "filing of petitions for administrative hearings pursuant to s. 120.569 or s. 120.57." This requirement stemmed from the concern of The Administrative Law Section of the Bar that differing points of entry times, one in the Model Rules, another in rules specific to an agency, could create a trap for the unwary. This concern was expressed in a white paper issued by the section entitled "Administrative Law Section Ideological and Legislative Position on APA 'Reform'": Uniform model rules of procedure that govern actions of every agency benefit the people by avoiding procedural traps and obstacles. Allowing agencies to create special procedural rules that vary from agency to agency defeats citizen participation in government and handicaps citizens who question agency actions. The agency rules are difficult for citizens and lawyers to locate. They are traps for the unwary. (Petitioner's Exhibit 7, p. 2-3.) To ease the concern expressed by the Administrative Law Section about "traps for the unwary" with regard to points of entry, the Uniform Rules of Procedure provide for a twenty- one day point of entry to seek a hearing on an agency decision (Rule 28-106.111, Florida Administrative Code). No exceptions are provided in the Uniform Rules. At the same time, exceptions were allowed by Section 120.54(5). Chapter 96-159, Laws of Florida, moreover, provided agencies a reasonable time period to review their procedural rules and seek exceptions as necessary. The statute is explicit with regard to exceptions: * * * [T]he uniform rules shall be the rules of procedure for each agency subject to this chapter unless the Administration Commission grants an exception to the Agency under this subsection. An agency may seek exceptions to the uniform rules of procedure by filing a petition with the Administration Commission. The Administration Commission shall approve exceptions to the extent necessary to implement other statutes, to the extent necessary to conform to any requirement imposed as a condition precedent to receipt of federal funds or to permit persons in this state to receive tax benefits under federal law, or as required for the most efficient operation of the agency as determined by the Administration Commission. The reasons for the exceptions shall be published in the Florida Administrative Weekly. Agency rules that provide exceptions to the uniform rules shall not be filed with the department unless the Administration Commission has approved the exceptions. Each agency that adopts rules that provide exceptions to the uniform rules shall publish a separate chapter in the Florida Administrative Code that delineates clearly the provisions of the agency's rules that provide exceptions to the uniform rules and specifies each alternative chosen from among those authorized by the uniform rules. Section 120.54(5)(a), Florida Statutes. After adoption of the Uniform Rules, the Office of the Governor sent a memorandum from "Debby Kearney" to "All Agency General Counsels" (the "Kearney Memorandum"). The Kearney Memorandum provided state agencies with a copy of the Uniform Rules and notified them of the requirement to file for exceptions if different procedures were necessary to conduct proceedings before their agency or as required by law. The memorandum was specific regarding the need to apply for exceptions. Even if an agency had specific statutory authority for a procedure different from that in the Uniform Rules, the agencies were reminded of the requirement that they seek approval of the exception: The working group on the Uniform Rules was quite emphatic that the intent evident in the statute is that every procedural rule that is different from or is in addition to a Uniform Rule, be included on the listings of exceptions. Obviously, if a difference is required by statute or case law, this will be the easier case; however, all must go through this procedure. (Petitioner's Exhibit 9, emphasis in original.) The Administration Commission followed up by providing forms to request an exception, and again reiterated the importance of requesting one, whether it be for something different, or something in addition to, the Uniform Rules: To assist agencies in requesting exceptions, the Administration Commission staff has prepared a model petition format outlining the information that will be necessary for the Commission to review the petitions and make a decision. As communicated in Ms. Kearney's memorandum, EVERY procedural rule that is different from or in addition to a Uniform Rule, must go through the exception process. The format is divided into two sections. Section I includes procedures that are covered by the Uniform Rules. Section II includes procedures that are not covered by the Uniform Rules; however, the procedure must be necessary and the agency must be authorized to have the procedure. (Petitioner's Exhibit 10, emphasis added.) Subsequent to these two memoranda, questions arose from agencies regarding the scope of application of the Uniform Rules of Procedure. In particular, agencies expressed concern regarding permit and license application procedures prior to intended agency action. To answer these concerns, on March 4, 1998, the Administration Commission under the signature of its Secretary, Bob Bradley, issued another memorandum (the "Bradley Memorandum"). The Bradley Memorandum explains that "free form" procedures (those that precede notification of agency action, entry into formal proceedings and the carrying out of challenges to agency action through resolution by final order) were not within the scope of the Uniform Rules and therefore did not require exceptions: Section 120.54(5)(b), Florida Statutes, requires the Commission to adopt uniform rules of procedure for specific subjects . . . . There are a myriad of other procedural matters, such as permit or license application procedures, which precede formal proposed agency action and, thus, are not addressed by the [Uniform Rules]. * * * Exceptions to procedural rules which lie beyond the scope of rules contained in the [Uniform Rules are] not required . . . . (Petitioner's Exhibit 11.) The Agency for Health Care Administration did not apply for, nor, consequently, did it receive, an exception to the Uniform Rules to cover the procedure for invoking an approved applicant's right to a comparative hearing contained in Section (2) of the Rule. At hearing, AHCA offered no evidence or explanation regarding its course of not seeking an exception to the Uniform Rules of Procedure. Restrictions to Agency Rule-Making Authority The 1996 amendments to Chapter 120 (Ch. 96-159, Laws of Florida, Petitioner Exhibit 14), in addition to requiring one or more sets of Uniform Rules of Procedure, also limited agency discretion in rule adoption. Prior to that time, agencies could adopt rules if there was a general grant of authority and the rule was reasonably related to the law being implemented. The 1996 amendments restricted agency rule-making authority to those which "implement, interpret, or make specific the particular powers and duties granted by the enabling statute." Prior to these amendments, agencies had broad discretion to adopt rules which were "reasonably related to the purpose of the enabling legislation." See Chapter 96-159, Section 9, Laws of Florida (Petitioner's Exhibit 14; Tr. Pages 93-96). In 1999, this rule-making authority was limited even further, rejecting the "class of powers and duties" analysis of St. Johns River Water Management District v. Consolidated-Tomoka Land Co., 717 So. 2d 72 (Fla. 1st DCA 1998), which interpreted agency rule-making authority more broadly than the Legislature had intended. (See "intent" language of Chapter 99-379, Laws of Florida.) Chapter 99-379, Section 3, Laws of Florida, amended Section 120.536, Florida Statutes, to clarify that: No agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious or is within the agency's class of powers and duties, nor shall an agency have the authority to implement statutory provision setting forth general legislative intent or policy. Statutory language granting rulemaking authority or generally describing the powers and functions of an agency shall be construed to extend no further than implementing or interpreting the specific the particular powers and duties conferred by the same statute. (Petitioner's Exhibit 15.) By both Chapters 96-159 and Chapters 99-379, Laws of Florida, agencies were provided a period of time to review and conform their rules to the stricter rule-making standards of that legislation (Tr. p. 96) The record reflects that AHCA took no action to modify Rule 59C-1.012, in light of these new legislative directives. Legislative Recognition of the Rule in 1997 In 1997, the Florida Legislature recognized all of AHCA's rules, including the CON Administrative Hearings Procedure Rule, that then implemented the CON statutes by declaring the rules effective and enforceable: The rules of the agency in effect on June 30, 1997 shall remain in effect and shall be enforceable by the agency with respect to ss. 408.031-408.045 until such rules are repealed or amended by the agency . . . . See Chapter 97-270, Laws of Florida. This law was codified as Section 408.0455, Florida Statutes, with an effective date of July 1, 1997, two months after the effective date of the adoption of the Uniform Rules of Procedure and exactly one year prior to the deadline for approval of exceptions to the Uniform Rules, July 1, 1998.
The Issue The Administrative Complaint, as amended, in this case alleges that Respondent engaged in or permitted gambling activity on the licensed premises in violation of Sections 849.14 and 561.29(1)(a), Florida Statutes. The issue for resolution is whether that violation occurred and, if so, what discipline is appropriate.
Findings Of Fact Petitioner is the agency responsible for issuing licenses permitting the sale of alcoholic beverages in Florida and is responsible for enforcing the beverage laws, Chapters 561-568, Florida Statutes. Respondent is a Florida corporation holding alcoholic beverage license number 15-00185, series 4COP, which authorizes it to sell alcoholic beverages at retail at the licensed premises, Bottoms Up Bar, located at 8400 US-1, South, Micco, in Brevard County, Florida. Lynette Tummolo is the president of Bottoms Up Bar, Inc. Ms. Tummolo's first bar was a restaurant and liquor bar in Palm Bay, Florida: Duke's Place. She and Robert Bench owned the bar as 50/50 partners. Duke's Place was moved to a new location after a hurricane and in August 1996, Ms. Tummolo and Mr. Bench sold their license to David Oliver. In March 1997, Ms. Tummolo started another business, a beer and wine bar, which opened in Micco, Florida. The Articles of Incorporation dated February 19, 1997, and filed with the Secretary of State for Bottoms Up Bar, Inc., list the incorporator as Lynette Tummolo, and the members of the board of directors as Lynette Tummolo and Robert Bench. The most recent annual report, dated March 23, 1998, and filed with the Secretary of State, reflects that Lynette Tummolo and Robert Bench are both directors of the corporation. In June 1997, after David Oliver defaulted on his payments for the license, Lynette Tummolo purchased back the liquor license and had it transferred to Bottoms Up Bar, Inc. Ms. Tummolo applied to the Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco (DABT) and had approved, a transfer of the liquor license and change of location to Bottoms Up Bar in Micco. The application submitted by Ms. Tummolo lists herself as president and 60% stockholder, Robert Bench as secretary and 40% stockholder, herself as treasurer, and Robert Bench as director. A personal questionnaire form for Robert Bench is attached to Ms. Tummolo's application. This form states that Mr. Bench is the director/manager of Bottoms Up Bar and that he was investing no funds in the business. At the hearing in this proceeding, Ms. Tummolo stated that Robert Bench was not an owner or officer of the corporation Bottoms Up Bar, Inc., but the only reason she put him on the application form was that a staff person from DABT told her that she had to put officers of the corporation and had to show a percentage of stock. Ms. Tummolo's testimony is inconsistent with her sworn affidavit at the end of the form. The testimony is also inconsistent with any established policy of DABT. Ann (Annie) Raftery works as manager of Captain Hiram's, a restaurant and lounge in Sebastian, Florida, near Micco. She regularly patronizes Bottoms Up Bar and is a friend of Robert Bench. She also sometimes helps clean up at Bottoms Up Bar after closing. In January 1998, Ms. Raftery decided on her own to start a football pool for the Super Bowl. She drew the grid and collected $20 for each square on the grid representing a wager. Individuals placing a wager wrote their names or some identification on the square they selected. Ms. Raftery carried the grid sheet around with her on a plastic clip-board. On the Friday night before Super Bowl Sunday 1998, Annie Raftery arrived at Bottoms Up Bar around 10:30 p.m. She handed the football pool sheet on the plastic clip-board, for safekeeping, to Robert Bench, who was working as bartender. He stashed it behind the bar for her. On that same Friday, January 23, 1998, in response to a complaint, Sergeant Sam Brewer (at that time, a DABT special agent) commenced an undercover investigation of Bottoms Up Bar. Late that evening he and other agents entered the bar, mingled with the crowd, played darts, and socialized. At one point, Special Agent Brewer asked an individual whether she knew of any pools for the upcoming Super Bowl football game. She responded that he would have to talk to "the boss" and pointed out Robert Bench behind the bar. Agent Brewer then sat at the bar and started talking to Mr. Bench. During the course of the conversation, Mr. Bench reached next to the cash register behind the bar and handed a plastic clip-board with the football pool sheet to a female patron sitting at the bar. This individual looked at it and handed it to another woman, later identified as Annie Raftery. Annie Raftery then gave the clip-board to Lynette Tummolo. Agent Brewer asked Robert Bench about the pool and Bench replied that it belonged to Captain Hiram's. Mr. Bench then got Ms. Raftery and directed her to Agent Brewer. Agent Brewer conversed with Ms. Raftery about the pool. She had the clip-board again and explained how to place a wager. Agent Brewer selected a square and put the name, Steve B., on the grid and paid Ms. Raftery $20. She told him she would be at Captain Hiram's or Bottoms Up Bar on Sunday, and he left, as it was closing time. Agent Brewer returned on Sunday, around half-time of the Super Bowl. He approached Mr. Bench at the bar and asked where he could see the football pool sheet to check his numbers. Mr. Bench replied that they had copies, but Ms. Raftery had the original and pointed her out at the end of the bar. Ms. Raftery showed Agent Brewer the pool sheet and he confirmed that it was the one he had marked earlier. He then made a covert telephone call to the other agents waiting outside. They, and assisting officers of the sheriff's office, arrested Mr. Bench and Ms. Raftery. They retrieved $1,200 from Ms. Raftery's car and $440 from her home. The remainder of the $2,000 she collected had already been paid out for the first quarter of the game. Ms. Tummolo is at Bottoms Up Bar every night, seven nights a week. She remembers Friday, January 23, 1998, was particularly busy. At the hearing she described a plastic clip- board kept at the bar with a sheet on which the bartenders must record the liquor they remove from the back stockroom. Ms. Tummolo insists that if she had been seen with a clip-board, it would have been the liquor record and not a football pool. Agent Brewer saw Ms. Tummolo with the football pool, however, the night he placed his wager. Bottoms Up Bar does not participate in the Responsible Vendors Program. Ms. Tummolo meets regularly with her bartenders and, at least since the Super Bowl Sunday event, she reminds them that gambling in any form is not tolerated.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the agency enter its Final Order finding Respondent guilty of violating Sections 561.29(1)(a), Florida Statutes, and 849.14, Florida Statutes, and assessing a penalty of $250.00. DONE AND ENTERED this 19th day of November, 1998, in Tallahassee, Leon County, Florida. MARY CLARK 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 Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 1998. COPIES FURNISHED: Thomas D. Winokur, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007 Joe Teague Caruso, Esquire 800 East Merritt Boulevard Merritt Island, Florida 32954-1271 Richard Boyd, Director Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
