After the 1999 Amendments to Administrative Procedure Act, One Aspect of Consolidated-Tomoka Still R
The Florida Legislature and certain courts have in recent years engaged in an ongoing dialogue over the construction of provisions in Florida’s Administrative Procedure Act regarding the scope of agency rulemaking authority. In 1996 and 1999, the Florida Legislature amended the APA to limit agency rulemaking authority. Recent judicial decisions issued subsequent to both amendments suggest, however, that agency discretion in administrative rulemaking should not be so limited,1 and, more broadly, that administrative agencies should have more autonomy than that contemplated by the legislature.2
In 1996, the legislature revised the rulemaking standard in the APA to significantly curtail agency administrative rulemaking authority and to expand the definition of an invalid exercise of delegated legislative authority.3 The rulemaking standard after 1996 could be found in F.S. §120.536(1). This language provided:
A grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. An agency may adopt only rules that implement, interpret, or make specific the particular powers and duties granted by the enabling statute. 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, nor shall an agency have the authority to implement statutory provisions 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 the particular powers and duties conferred by the same statute.4 ( Emphasis added.)
To be certain its intent to limit agency rulemaking authority was clear, the legislature added identical language to F.S. §120.52(8), which sets forth the definition of an invalid exercise of delegated legislative authority.
The 1996 amendments implicitly overruled case law establishing the standard that rules and regulations would be upheld so long as they are reasonably related to the purpose of the enabling legislation and are not arbitrary or capricious.5 In 1998, the First District Court of Appeal interpreted the new 1996 APA rulemaking standard in St. Johns River Water Management District v. Consolidated-Tomoka Land Co., 717 So. 2d 72 (Fla. 1st DCA 1998). The First District construed the term “particular” in §§120.52(8) and 120.536(1) to restrict rulemaking authority to matters “directly within the class or powers and duties identified in the enabling statute.”6 Under this interpretation of the new standard, the court upheld rules proposed by the St. Johns River Water Management District as a valid exercise of delegated legislative authority.7
The 1999 Amendments
The First District’s interpretation of the 1996 amendments to the rulemaking standard did not sit well with lawmakers.8 In the legislative session immediately following the First District’s decision, the legislature amended the APA to clarify the rulemaking standard and expressly reject the “powers and duties” analysis conducted in Consolidated-Tomoka.9 Indeed, the stated purpose of the 1999 amendments as provided in the footnote to §§120.52(8) and 120.536 was “to reject the class of powers and duties analysis.”10 Lawmakers qualified this rejection by stating that “[h]owever, it is not the intent of the Legislature to reverse the result of any specific judicial decision.”11
Before the 1999 revision, §120.536(1) read that “[a]n agency may adopt only rules that implement, interpret, or make specific the particular powers and duties granted by the enabling statute.”12 (Emphasis added.) In 1999, the legislature deleted the term “particular” so that the statute presently reads that “[a]n agency may adopt only rules that implement or interpret specific powers and duties granted by the enabling statute.”13 (Emphasis added.) Thus, it appears as if the legislature thought it safest to remove the term “particular” from the statute altogether to prevent courts from focusing on that term in the future. Every reference in the legislation to the term “particular” was stricken and either replaced with the word “specific,” or the word “specific” that already existed in the language in several places was left in place.14
Later in §120.52(8), the legislature added the phrase providing that an agency does not have the authority to adopt a rule because it is “within the agency’s class of powers and duties.”15 (Emphasis added.) The legislation added identical language to the rulemaking standard set forth in §120.536(1).
Commentator has argued that the 1999 amendments’ rejection of the interpretation of the rulemaking standard in Consolidated-Tomoka means that Consolidated-Tomoka, unlike other landmark administrative law cases, will not “survive the test of time.”16 While the 1999 amendments to the APA may have indeed trumped the “powers and duties” analysis, the Florida Supreme Court’s recent decision in Florida Department of Business and Professional Regulation v. Investment Corp. of Palm Beach, 747 So. 2d 374 (Fla. 1999), suggests that Consolidated-Tomoka will survive the test of time, and that its true legacy may be as a reminder of the need for agency discretion in rulemaking authority.
Investment Corp. Decision
On November 4, 1999, the Florida Supreme Court issued the Investment Corp. decision, in which it impliedly endorsed the interpretation of the 1996 amendments as construed by the First District Court of Appeal in Consolidated-Tomoka. In this case, issued on the heels of the 1999 amendments, the Florida Supreme Court declared that the “lesson drawn” from Consolidated-Tomoka’s interpretation of the 1996 amendments to the APA is that “the Legislature will not micromanage Florida’s administrative agencies.”17
The case began when Investment Corp. of Palm Beach, Calder Race Course, Inc., Tropical Park, Inc., and Gulfstream Park Racing Association petitioned the Florida Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering for a declaratory statement regarding the applicability of statutory provisions in determining the distribution of uncashed tickets and breaks.18 The question asked of the division was, in its simplest terms, who among the petitioners got to keep the money? The department issued a statement that said the money belonged to the State of Florida, and also read, in pertinent part: “The Division is cognizant that a similar fact pattern may exist between other tracks in Florida and that the same dispute may reoccur between one of these Petitioners and a non-Petitioner. Therefore, the Division will initiate rulemaking to establish an agency statement of general applicability.”19
Understandably upset with the declaration by the division, the petitioners appealed. The Third District Court of Appeal held that once the Division of Pari-Mutuel Wagering determined that the questions presented by the petitioners in their request for a declaratory statement had general applicability to the pari-mutuel industry, rulemaking would be required and the division could not issue a declaratory statement addressing the petitioners’ particular set of facts.20 The Third District held that in issuing the declaratory statement, the division “overstepped administrative bounds” and the court cited F.S. §120.565, which governs declaratory statements. The court interpreted §120.565 to mean that “declaratory statements are appropriate when they deal with a petitioner’s particular factual situation, but are not appropriate when they would result in agency statements of general applicability interpreting law and policy.”21 The Third District set aside the declaratory statement.22
In a dissenting opinion, Judge Cope focused on subsection (3) of §120.565, which requires that an agency give notice of the filing of each petition in the Florida Administrative Weekly, and that upon the agency’s issuance of a declaratory statement or a denial to do so, the agency must notice its action in the next issue of the Florida Administrative Weekly.23 According to Judge Cope, the legislature contemplated that an agency’s response to a petition could have an effect on others who are regulated by the agency when the legislature provided that the notice as well as the agency’s declaratory statement must be published in the Florida Administrative Weekly.24 Judge Cope concluded the legislature required publication of the declaratory statement for the exact reason it recognized that the declaratory statement could be applied to others in similar situations.25 Judge Cope cited to the First District’s decision in Chiles v. Department of State, 711 So. 2d 151 (Fla. 1st DCA 1998), for the proposition that a person is entitled to a declaratory statement (or a denial), even though that statement may be applicable to many others in the same circumstances.26 Therefore, Judge Cope concluded, the declaratory statement should be affirmed.27
When the case came before the Florida Supreme Court, the court rejected the Third District’s majority opinion and adopted Judge Cope’s dissenting opinion.28 The court found that the majority opinion elevated form over substance by asserting that an agency may not issue a declaratory statement addressing a petitioner’s particular set of circumstances while simultaneously announcing its intention to initiate rulemaking to establish an agency statement of general applicability.29 The court denounced the majority opinion as a “hypertechnical interpretation of section 120.565 which serves no logical end.”30 The court then held that an agency may issue a declaratory statement at the same time it announces its intention to initiate rulemaking.31
In Investment Corp., the issue was whether to read the statute’s plain language and accept its literal effect, or to apply principles of statutory construction.32 To answer this question, the court examined, among other things, the First District’s decision in Consolidated-Tomoka.
The critical part of the Investment Corp. opinion is the court’s reasoning that contains an implied endorsement of the First District’s interpretation of the rulemaking standard in the wake of the 1996 amendments to the APA. The court called Consolidated-Tomoka “an important case” in which the rulemaking standard that was amended in 1996 was interpreted for the first time by an appellate court.33 The Supreme Court then quoted at length passages from the First District’s decision regarding its reasoning why the legislature intended the term “particular” to restrict rulemaking to “subjects that are directly within the class of powers and duties identified in the enabling statute,” rather than that the statute must “detail” the powers and duties that would be the subject matter of the rule.34
The Supreme Court impliedly endorsed the First District’s interpretation of the 1996 amendments to the APA when it stated that “[t]he First District’s caselaw is helpful here, in that the lesson drawn from its interpretation of various statutes of the revised APA in Consolidated—Tomoka and Chiles is that the Legislature will not micromanage Florida’s administrative agencies and that the public’s interest is served in encouraging agency responsiveness in the performance of their functions.”35
The Florida Supreme Court’s pronouncement in Investment Corp. that the legislature is not to micromanage administrative agencies continues the theme of judicial deference to administrative agencies articulated by Chief Judge Robert P. Smith in Department of Health and Rehabilitative Services v. Framat Realty, Inc., 407 So. 2d 238 (Fla. 1st DCA 1981). Framat held that as long as an agency’s interpretation of a statute was within the range of permissible interpretations of the statute, the judiciary should defer to the agency’s interpretation.36 Judge Smith opined that:
When as here an agency has responded to rulemaking incentives and has allowed affected parties to help shape the rules they know will regulate them in the future, the judiciary must not, and we shall not, overly restrict the range of an agency’s interpretive powers. Permissible interpretations of a statute must and will be sustained, though other interpretations are possible and may even seem preferable according to some views.37
Although case law such as Consolidated-Tomoka, Investment Corp. and Framat suggests deference toward agency interpretation of statutes, the recent changes to the APA that restrict agency rulemaking authority and that, in turn, restrict agency discretion with respect to statutory construction, suggest otherwise. Thus, there appears to be a conflict between the legislature’s curtailment of agency rulemaking authority in the APA and the jurisprudential policy of deferring to reasonable agency statutory interpretation. While in the past the courts have been content with defining their role, in Investment Corp. there is a statement to the legislature that attempted micromanagement of executive branch agencies is not favored.
of the 1999 Amendments
Save the Manatee Club, Inc. v. Southwest Florida Water Management District, DOAH Case No. 99-3885RX, Final Order (Dec. 8, 1999),38 involved a challenge to a rule allowing exemptions from certain permitting criteria as an invalid exercise of delegated legislative authority under §120.52(8)(b) and (c) of the 1999 APA.39 The exemptions were based on the grandfathering concept and dated back to 1984, the year the implementing statute was created. Although the statute in question did authorize the agency to create exemptions by rule, and although at one time the statute had authorized exemptions based on grandfathering, after a very thorough review of the statute and its history, the administrative law judge held that because the statute did not now specifically authorize grandfathering exemptions, the exemptions were an invalid exercise of delegated legislative authority.40 In setting forth the reasoning, the ALJ stated that “[t]he 1999 amendments to Section 120.52(8) make it clear that agencies. . . have limited authority to adopt rules. When administrative agencies do so, the rules must implement powers and duties that are more detailed than a general class of power or duty provides” and thus that after the 1999 amendments, the Consolidated-Tomoka “powers and duties” analysis was not applicable to rule challenges.41 The ALJ made reference to the First District’s statement in Consolidated-Tomoka that “[a] standard based on the sufficiency of detail in the language of the enabling statute would be difficult to define and even more difficult to apply,” but the ALJ concluded that “[h]owever difficult, the standard of the 1999 Amendments must be applied in this case.”42
Supporters of the legislature’s efforts to curtail agency rulemaking authority will applaud the Save the Manatee decision. The ALJ followed the letter of the APA, and struck down an agency rule that was not specifically authorized by the legislature. Critics of this movement, however, may point out that the legislature has gotten what it asked for the responsibility of micromanaging Florida’s agencies by detailed lawmaking.
No matter which side one takes in the debate, there obviously is a conflict between the legislative attempts to curtail agency discretion in rulemaking and judicial deference to agency interpretation of enabling statutes. While impossible to predict at this point, decisions such as Save the Manatee may likely bring about a movement to amend the APA once again. Perhaps it is time to reexamine Consolidated-Tomoka and its endorsement by the Florida Supreme Court in Investment Corp. as having a broader, lasting meaning—that is, the pronouncement that Consolidated-Tomoka means the legislature is not to micromanage agencies. q
1 See St. Johns River Water Mgmt. Dist. v. Consolidated-Tomoka Land Co., 717 So. 2d 72 (Fla. 1st D.C.A. 1998).
2 See Department of Bus. & Prof. Reg. v. Investment Corp. of Palm Beach, 747 So. 2d 374, 384 (Fla. 1999) (stating that “the legislature will not micromanage Florida’s administrative agencies”).
3 See Fla. H.R. Comm. on Streamlining Govtl. Regs., CS for SBs 2290 & 2288 (1996) Staff Analysis 23 (final June 14, 1996) (on file with comm.) [hereinafter 1996 APA Staff Analysis].
4 Fla. Stat. §120.536(1) (Supp. 1996) (emphasis added).
5 See 1996 APA Staff Analysis, supra note 3 (quoting General Telephone Co. of Florida v. Public Serv. Comm’n, 446 So. 2d 1063, 1067 (Fla. 1984); Department of Labor & Employ. Sec. v. Bradley, 636 So. 2d 802 (Fla. 1st D.C.A. 1994); Florida Waterworks Ass n v. Public Serv. Comm’n, 473 So. 2d 237 (Fla. 1st D.C.A. 1985); Department of Prof. Reg. v. Durrani, 455 So. 2d 515 (Fla. 1st D.C.A. 1984); Agrico Chemical Co. v. Department of Envtl. Prot., 365 So. 2d 759 (Fla. 1st D.C.A. 1978); Florida Beverage Corp. v. Wynne, 306 So. 2d 200 (Fla. 1st D.C.A. 1975).
6 Consolidated-Tomoka, 717 So. 2d at 79.
7 See id. at 81.
8 See Fla. H.R. Comm. on Govtl. Rules & Regs., CS/HB 107 (1999) Staff Analysis 5 (June 30, 1999) [hereinafter 1999 Analysis] (on file with comm. at www.state.leg.fl.us/session/1999/bills/100.html>) (explaining that the intent of the1999 amendments was to reject judicial interpretation of the rulemaking standard set forth in Consolidated-Tomoka); David M. Greenbaum and Lawrence E. Sellers, Jr., 1999 Amendments to the Florida Administrative Procedure Act: Phantom Menace or Much Ado About Nothing?, 27 Fla. St. U. L. Rev. 499, 506 (2000) (stating that the judicial interpretation of the rulemaking standard was “not well received in the Legislature”); Marcia Gelbart, Development Law Used in Senate Battle, Palm Bch. Post, Mar. 6, 2000, at 4B (reporting that the First District s decision in Consolidated-Tomoka was the reason Representative Ken Pruitt sponsored the 1999 legislation amending the APA to impose new restrictions on agency rulemaking authority).
9 See 1999 Analysis, supra note 8, at 5.
10 Fla. Stat. §§120.52(8) and 120.536(1) (1999).
11 Fla. CS for HB 107, §1 (1999) (First Engrossed) (Act effective June 18, 1999, ch. 99-379, 1999 Fla. Laws 3788).
12 Fla. Stat. §120.52(8) (Supp. 1996).
13 Fla. CS for HB 107, §2 (1999).
14 See id. at §§2–3.
15 See id. at §2 (emphasis added).
16 See Kent Wetherell, Sour Grapes Make Sweet Wine, Envtl. & Land Use L. Sec. Rep., Dec. 1999 (citing McDonald v. Dept. of Bank. & Fin., 346 So. 2d 569 (Fla. 1st D.C.A. 1977); Key Haven Associated Enterprises, Inc. v. Board of Trustees of the Internal Improvement Trust Fund, 427 So. 2d 153 (Fla. 1983); Department of Transp. v. Groves-Watkins Constructors, 530 So. 2d 912 (Fla. 1988); and Askew v. Cross Key Waterways, 372 So. 2d 913 (Fla. 1979)).
17 Investment Corp., 747 So. 2d at 384.
18 See id. at 375.
19 Id. at 376.
20 See Investment Corp. of Palm Beach v. Division of Pari-Mutuel Wagering, 714 So. 2d 589, 590-91 (Fla. 3d D.C.A. 1998).
21 Investment Corp., 714 So. 2d at 591.
22 See id.
23 See id. at 593 (Cope, J., dissenting).
24 See id.
25 See id.
26 See id. at 593-94.
27 See id. at 594.
28 See Investment Corp., 747 So. 2d at 386.
29 See id. at 385.
30 Id. at 385.
31 See id.
32 See id. at 378.
33 Id. at 379.
35 Id. at 384 (citing Consolidated-Tomoka, 717 So. 2d at 80).
36 Framat, 407 So. 2d at 241.
37 Id. at 242.
38 Case on file with Clerk, Fla. Div. of Admin. Hearings. As of the time of submittal for publication, the case was pending before the First District Court of Appeal, case no. 99-4819, and oral argument had been requested.
39 See Save the Manatee at 2.
40 See id. at 5.
41 See id. at 47.
42 See id. at 49.
Leslie E. Bryson will begin her third year at Florida State University College of Law this fall, where she expectsed to receive a J.D. in April 2001. She received her B.A. in political economy from Newcomb College of Tulane University in 1992.
This column is submitted on behalf of the Administrative Law Section, Mary F. Smallwood, chair, and Robert C. Downie II, editor.