Civil Regulatory Enforcement in Florida’s Water Management Districts: Consistency Within Shifting Tides
A wise king named Solomon once wrote, “History merely repeats itself. It has all been done before. Nothing under the sun is truly new.”1 In some ways, this is true of environmental regulatory enforcement. Environmental law practitioners and the regulated public have seen the ebb and flow of enforcement as the helm of state government changes hands. Laws are enacted, amended, and sometimes repealed. Yet, the basic structure of environmental regulation remains substantially unchanged. In a typical regulatory scenario, permits are required for various activities that impact the environment, including the water resources. And, environmental regulatory agencies have a wide array of tools at their disposal in order to enforce the related laws and rules. The Florida Legislature has given these entities considerable discretion in the choice of remedies that may be used in a given case. Thus, while the intensity and vigor of environmental regulation has varied depending on the philosophy of the governor, the procedure for administrative and civil environmental enforcement2 has remained largely unchanged.
Since the inception of modern environmental protection in the 1970s, there have been multiple levels of government that may have an environmental regulatory role with regard to a given property, facility, or activity. Excluding federal agencies, in Florida, these regulators include the Department of Environmental Protection (DEP), water management districts, and local governments, especially those with approved delegated programs. Since there are excellent articles on the DEP and local government enforcement programs in the Florida Environmental and Land Use Law Treatise,3 this discussion deals primarily with water management districts, although some of the concepts may be more broadly applicable.
With their authority based in F.S. Ch. 373, the districts have jurisdiction over such issues as water supply, flood protection, water quality, and protection of natural systems.4 The districts’ major sources of authority to protect the state’s water resources are found in Parts II and IV of Ch. 373, dealing with consumptive use of water and environmental resource permitting, respectively. Unless certain limited exemptions apply, permits are required prior to undertaking the regulated activity. Consumptive use or water use5 permits are required prior to withdrawals of water from surface or groundwater sources.6 And, prior to creating or altering a surface water management system, or impacting wetlands, an environmental resource permit must be obtained.7 For the most part, once land development reaches a certain size, it will likely require an environmental resource permit. Failure to obtain one of these permits, or to comply with the terms and conditions of a permit, will usually trigger enforcement efforts by the district if discovered.
Informal Warning Letters
District personnel frequently attempt to resolve violations through cooperative means. An initial point of contact with an alleged violator is typically a warning letter (or notice). These letters or notices describe the observed violation, explain why the described activity violates Florida law or district rules, and may include corrective actions to be taken in order to resolve the violation. The warning letter should be taken seriously. It is imprudent to ignore these communications, hoping that the agency will forget about the situation and go away. Quite the contrary is true. If there is no response to the warning letter, another letter is likely to follow or more formal administrative or civil measures may be used. The warning letter presents an opportunity to define the nature and scope of the alleged violation, possibly avoid penalties or fines, and reduce any mitigation or restoration effort that may be required. In some rare cases, the respondent may be able to demonstrate that the district has made a mistake, i.e., that there was not a violation, that an exemption applies, or that the water management district has served the wrong party. The recipient of a warning letter would be wise to promptly initiate an informal dialog with district enforcement staff.
Administrative and Civil Remedies
If the informal warning letter does not prove effective in resolving a violation, the district may elect to escalate using the administrative process, civil litigation, or criminal sanctions.8 The method used will vary from case to case depending on the nature and extent of the violation. Some of the factors that a district may evaluate in choosing a remedy include the nature and magnitude of the violation, the environmental harm, whether the violation is intentional, the costs involved, and the likelihood of success with a particular course of action. The DEP and the districts use matrices to calculate civil penalties. In the South Florida Water Management District, the two principal components that are used to determine a penalty are: “(a) The actual or potential harm to the public and the environment that may occur as a result of the violation; and (b) [t]he extent of deviation from statutory or regulatory requirements….”9 These two factors comprise the axis of the matrix. Then, each axis has three subcategories: major, moderate, and minor. The intersection of these factors on the matrix provides a guideline for determining the severity of the violation and the amount of the proposed penalty.
Once a penalty amount is determined from the matrix, other factors may be taken into consideration to increase or decrease the penalty. For example, the district may weigh a respondent’s good faith attempts to comply or willingness to cooperate as a basis for reducing the penalty. However, a refusal to stop an ongoing violation, failure to cooperate, or economic benefit gained by violation of the law or rules may justify increasing the penalty from the amount calculated with the matrix.10 The South Florida Water Management District has distinct matrices for consumptive use and environmental resource enforcement cases and has incorporated these matrices by reference into its rule that addresses civil penalty calculation.11 The Southwest Florida Water Management District also uses two matrices, one for enforcement of consumptive use permitting and another for environmental resource permit cases. While the details of the various matrices may vary, the overall concept is similar. That is, the matrices attempt to determine a penalty based on the actual or potential harm to the public and the environment, and the extent of deviation from law, rule, or permit conditions.
The regulated public sometimes finds the administrative process to be rather confusing. Failure to understand this scheme may result in severe prejudice to the unwary. While this overview is not intended to be an exhaustive discussion of the administrative process, it is critical, at a minimum, to have a basic understanding of the concepts of exhaustion of administrative remedies, point of entry, and consent orders.
• Exhaustion of Administrative Remedies — While the districts are given wide discretion to pursue enforcement actions, the regulated public is, for the most part, constrained by the district’s choice of forum.12 For example, if the district serves an alleged violator with an administrative complaint, the respondent must defend the action in an administrative proceeding. An attempt to move the case to circuit court would likely be met with dismissal for failure to exhaust administrative remedies .13 In other words, if the case does not settle, the respondent must first litigate in an administrative forum, and then may appeal the final order to the appropriate district court of appeal.14
• Point of Entry — The date that one receives an administrative complaint15 from an agency is a significant procedural event. It begins the timeframe in which one must respond by filing a petition for administrative hearing or face a complete and final waiver of the right to contest all matters alleged in the administrative complaint.16 The recipient of an administrative complaint should read the included notice of rights very carefully. For example, the notice of rights in an administrative complaint from the Southwest Florida Water Management District may include the following provisions:
• In accordance with F.S. §373.119(1), this order shall automatically become final unless a request for hearing as provided in F.S. Ch. 120 is filed with (received by) the district no later than 14 days after the date this order is served. No further notice of the order becoming final will be given by the district.
• Respondent is advised that the terms of this administrative complaint and order, once final, shall be subject to judicial enforcement. Respondent is further advised that the imposition of the district’s costs of litigation, reasonable attorneys’ fees, expert witness fees, and additional civil penalties (beyond the penalties being sought for violations that have occurred to date) may be sought by the district for violations of this order.
• Nothing in this administrative complaint and order shall preclude the district from administering or enforcing its rules and any permit issued hereunder as provided by law.
• Any person whose substantial interests are affected by this administrative complaint and order may request an administrative hearing in accordance with F.S. §§120.569 and 120.57 and F.A.C. Ch. 28-106. A request for hearing must 1) explain how the substantial interests of each person requesting the hearing will be affected by the district’s action; 2) state all material facts disputed by the person requesting the hearing or state that there are no disputed facts; and 3) otherwise comply with F.A.C. Ch. 28-106. A request for hearing must be filed with (received by) the agency clerk of the district at the district’s Brooksville address17 no later than 14 days after the date this order is served. Failure to file a request for hearing within this time period shall constitute a waiver of any right such person may have to request a hearing under F.S. §§120.569 and 120.57.
• If the order becomes final automatically by operation of F.S. §373.119(1), it constitutes final agency action and a party may be entitled to judicial review. A party who is adversely affected by final agency action may seek review of the action in the appropriate district court of appeal, pursuant to F.S. §120.68, by filing a notice of appeal pursuant to Fla. R. App. P. 9.110, within 30 days of the date this order becomes final pursuant to F.S. §373.119(1).18
Counsel for a recipient of, or someone substantially affected by, an administrative complaint should review closely and understand the notice of rights that is located at the end of the document.
The first and most important word of caution to one who either receives or is substantially affected by an administrative complaint is do not miss the deadline to file a petition for administrative hearing. When a respondent fails to timely request an administrative hearing, an administrative complaint becomes a final order by operation of law.19 For example, F.S. §373.119(1) provides that, “[a]ny such order shall become final unless the person or persons named therein request by written petition a hearing no later than 14 days after the date such order is served.” An untimely filed petition will be dismissed.20 And, the Uniform Rules of Procedure21 provide that, “[a]ny 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.”22
Note the conflict between the statutory and rule provisions relating to point of entry. The statute allows a window of 14 days, yet F.A.C.R. 28-106.111(4) provides a 21-day point of entry. With some exceptions, the Uniform Rules of Procedure apply to all agencies governed by the Administrative Procedure Act.23 However, a statutory deadline normally would prevail over the rule. Thus, when dealing with an agency, such as DEP, one might have 21 days in which to file a petition for hearing. However, in response to a water management district administrative complaint, one would need to “request by written petition a hearing”24 within the 14-day window to avoid a waiver of rights. Again, it is critical to review carefully the particular notice of rights.
For those unfamiliar with administrative law, confusion sometimes arises regarding whether the petition for hearing must be served or filed. For example, attorneys who litigate in the courts are accustomed to filing a complaint prior to the expiration of the statute of limitations, or filing of a notice of appeal within the 30-day window. Failure to timely file the complaint or notice of appeal will likely bar the action or appeal. However, trial lawyers are also familiar with the concept of service, which simply means that the pleading is deposited in the mail in a timely fashion. It is crucial to be very clear that the districts view the request for a hearing as a filing deadline. And, the districts strictly apply the requirement contained in the notice of rights that the request for hearing must be filed with (received by) the agency clerk within 14 days of receipt of the notice.25
• Administrative Hearings — Hearings that are requested in response to an administrative complaint are governed by F.S. Ch. 120.26 The hearing is usually conducted by an administrative law judge assigned by the division of administrative hearings.27 After the conclusion of the hearing, the administrative law judge submits a recommended order to the district governing board, which in turn enters the final order in the case.28 The final order may be appealed to the appropriate district court of appeal.29
• Consent Orders — Settlement of enforcement cases is generally done through a document called a consent order,30 the administrative version of a judicial consent decree. It is a legal document that binds the regulated party to perform certain actions and usually provides penalties for violation of its terms. A consent order is essentially a formal settlement agreement that states the facts of the violation, conclusions of law explaining why the activity described in the facts is a violation of law or rules, and the corrective actions necessary to bring the respondent into compliance. Conversely, the agency agrees not to pursue any further remedy against the party for the alleged violations listed in the consent order. This mechanism is used frequently to resolve enforcement cases, and may be entered following receipt of a warning letter, administrative complaint, or civil complaint.
• Default on Administrative Complaint — As noted, when a respondent fails to timely request an administrative hearing, an administrative complaint may become a final order by operation of law.31 However, this will depend on the approach taken by a particular district. For example, the Southwest Florida Water Management District issues an administrative complaint and order with the intent that it becomes a final order upon default by the respondent.32 With a default, the respondent has waived all rights to challenge the terms of the administrative complaint or to request a hearing.33 Once the agency has the matter before the court, the facts alleged in the administrative complaint are effectively deemed admitted, and the case may be tried only as to penalties and remedy. This sometimes has been a rather unpleasant and costly surprise to parties that do not timely file a petition for administrative hearing, mistakenly assuming that the merits of the case can be addressed in circuit court.
• Petitions for Enforcement — law, agencies may bring an enforcement action in the courts by filing a petition for enforcement.34 Generally, there are three situations when an agency may use this avenue. First, an agency may decide to bypass the administrative process and go directly to court. Secondly, an agency can seek enforcement of a consent order in circuit court. Finally, and a sometimes misunderstood enforcement power of an agency, is the ability to seek circuit court enforcement of a defaulted administrative complaint.
Enforcement in the Courts
Failure to obtain a required permit, or to comply with law, rules, or permit conditions, may trigger a large array of enforcement mechanisms available to the districts. Rules and orders may be enforced by mandatory injunction or other appropriate action in the courts.35 In addition to commencing an action to enjoin or abate violations, a district may recover civil penalties, not to exceed $10,000 per offense, plus costs and attorneys’ fees — and each day that the violation occurs constitutes a separate offense.36
While there are few reported cases, a good example is Southwest Florida Water Management District v. James Waibel, Case No. GC-G-90-1341 (10th Cir. 1992). Waibel had a 10-acre plot of land that he cleared of trees and shrubs and employed two draglines to excavate a pit one acre in size and 20 feet deep. The material removed from the pit was spread over the property and a drainage ditch was filled. The elevation of the land was raised three to four feet to allow for development. Waibel also destroyed four and a half acres of wetlands on his property and an undetermined amount of wetlands off his property. The court found that his activities constituted a willful alteration or construction of a surface water management system without a required permit. The court found that a $25,000 civil penalty was fair and reasonable under the circumstances. Additionally, the circuit court awarded the district $55,957.25 for attorneys’ fees and $11,450.77 for costs. Moreover, the court required restoration of the wetlands in accordance with an after-the-fact permit. On appeal,37 the district court of appeal affirmed the injunction and penalty but reversed on attorneys’ fees and costs because there was no evidence in the record that the district had paid those bills. However, the implication is clear that if attorneys’ fees and costs had been documented, the circuit court decision on those items may have been affirmed as well.
The Fifth District Court of Appeal addressed the issue of costs and attorneys’ fees in St. Johns River Water Management District v. Lake Pickett Limited, 543 So. 2d 883 (Fla. 5th DCA 1989). In Lake Pickett, the circuit court had awarded civil penalties but denied the district’s post-judgment motion to tax court costs and assess investigative costs and attorneys’ fees.38 The appellate court held that if the district was awarded judgment under §373.129,39 then §57.04140 required the award of costs to the district.41 Since §373.129(6) specifically mentions recovery of attorneys’ fees, presumably, they would also be part of the award.
In South Florida Water Management District v. RLI Live Oak, LLC, 139 So. 3d 869 (Fla. 2014), the Florida Supreme Court clarified the requisite burden of proof necessary to establish an alleged violation prior to the imposition of a civil penalty by a court. RLI Live Oak (RLI) is a developer that owns property in Osceola County. In an unusual twist to an enforcement case, RLI brought a declaratory judgment action in circuit court seeking a determination that the property it owned did not contain any wetlands and that the South Florida Water Management District, accordingly, lacked jurisdiction over RLI’s property.42 The district then counterclaimed, contending that RLI had conducted “unauthorized dredging, construction activity, grading, diking, culvert installation, and filling of wetlands without first obtaining the [d]istrict’s approval. After a nonjury trial, the court found for the [d]istrict on all counts and awarded the [d]istrict $81,900 in civil penalties.”43 The trial court had used the preponderance of the evidence standard as the burden of proof required to impose a civil penalty, but, on appeal, the Fifth District reversed, ruling that Department of Banking & Finance v. Osborne Stern & Co., 670 So. 2d 932 (Fla. 1996), required the district to prove the alleged violation by clear and convincing evidence.
At the district’s request, the Fifth District certified the question of the appropriate standard of proof to the Florida Supreme Court. The court reversed the Fifth District, holding:
[W]here the [l]egislature statutorily authorizes a state governmental agency to recover a “civil penalty” in a “court of competent jurisdiction” but does not specify the agency’s burden of proof, the agency is not required under Osborne to prove the alleged violation by clear and convincing evidence, but rather by a preponderance of the evidence.44
The court distinguished its holding in Osborne because that case was decided in the context of securities violations. And, the operative statute authorized the Department of Banking and Finance to “impose and collect an administrative fine. ”45 The court in RLI Live Oak concluded the district court of appeal had extended Osborne too far and that the “clear and convincing” standard did not apply in the imposition of civil penalties by a court.46
Conclusion
In light of the wide array of environmental enforcement powers vested in the districts, what is the best course of action in response to a warning letter? Obviously, each case will have to be evaluated on its particular facts. The reactions of a respondent may range from wanting to ignore a warning letter, hoping it will go away, or at the opposite extreme, a desire to litigate. While ignoring a warning letter is not wise, litigation is available as a last resort, after taking into consideration the cost and uncertainty of results. Accordingly, the best place to start is to make an appointment with district staff to begin good-faith negotiations. This is frequently the best and most productive alternative, regardless of the prevailing political tide.
1 The Bible, Ecclesiastes 1:9.
2 Since this article focuses on administrative and civil enforcement, the criminal process will not be discussed.
3 See Aliki Moncrief, State Enforcement of Environmental Laws and Regulations, Florida Environmental and Land Use Law Treatise (June 2010); William L. Earl, Local Government Environmental Enforcement and Compliance Programs, Florida Environmental and Land Use Law Treatise (Feb. 2001).
4 See Fla. S tat. §373.016, (2014); see also A. Duda & Sons, Inc. v. St. Johns River Water Mgmt. Dist., 17 So. 3d 738, 740 (Fla. 5th DCA 2009).
5 Although F.S. Ch. 373 uses the term “consumptive use permit,” the rules of the Southwest Florida Water Management District use the term “water use permit”; compare Fla. S tat. §373.219 with F.A.C.R. 40D-2.041.
6 Fla. Stat. §§373.219, 373.223 (2014); see, e.g., F.A.C. R. 40D-2.041.
7 Fla. Stat. §§373.413, 373.4131 (2014); see, e.g., F.A.C. R. 40D-4.041, Ch. 62-330.
8 See, e.g., Fla. S tat. §§373.613, 373.430 (with regard to criminal enforcement, although not discussed in this article).
9 F.A.C.R. 40E-1.715.
10 Id.
11 Id.
12 See, e.g., Fla. S tat. §§373.119, 373.129 (2014).
13 See Department of Agriculture and Consumer Services v. City of Pompano Beach, 792 So. 2d 539 (Fla. 4th DCA 2001). The limited exceptions to the exhaustion doctrine include: 1) no adequate administrative remedy exists; 2) an agency is acting without authority and clearly in excess of its legislatively delegated powers; or 3) to invoke the power of the circuit court to decide constitutional issues. Additionally, it should be noted that certain statutes may provide an exception to the general rule. For instance, Fla. Stat. §72.011(1)(a) provides, in part: “A taxpayer may contest the legality of any assessment or denial of refund of tax, fee, surcharge, permit, interest, or penalty provided for under…[certain specified sections of the Florida Statutes]…by filing an action in circuit court; or, alternatively, the taxpayer may file a petition under the applicable provisions of [Ch.] 120”; see also JES Publishing Corporation v. Florida Department of Revenue, 730 So. 2d 854 (Fla. 1st DCA 1999).
14 See Fla. Stat. §§120.569(1), 120.68 (2014); Fla. R. App. P. 9.110; see also Fla. S tat. §373.114 (2014), with regard to appeals to the Florida Land and Water Adjudicatory Commission.
15 Fla. Stat. §373.119 (2014); see also Fla. S tat. §403.121(2), where DEP’s enabling statute uses the terminology “notice of violation.”
16 See Fla. Stat. §§120.569(2) (c), 373.119(1) (2014); F.A.C.R. 28-106.111(4).
17 The designation of the district clerk and the address for filing should be verified in each case, since deputy clerks may be designated at one or more of the various district offices.
18 See Southwest Florida Water Management District v. Milmack, Inc., Administrative Complaint and Order No. SWF 2010 (Aug. 19, 2010).
19 Fla. Stat. §373.119(1) (2014).
20 Fla. Stat. §120.569(2)(c) (2014).
21 F.A.C. R. 28-106.
22 F.A.C. R. 28-106.111(4).
23 Fla. Stat. Ch. 120 (2014).
24 Fla. Stat. §373.119(1) (2014).
25 Fla. Stat. §§373.119(1), 120.569(2)(c) (2014).
26 See Fla. Stat. §§120.569, 120.57 (2014).
27 See Fla. Stat. §120.569(1) (2014).
28 Fla. S tat. §§120.569(2)(l)2, 120.57 (k)-(l) (2013); F.A.C. R. 28-106.216(1).
29 Fla. Stat. §120.68 (2013); Fla. R. App. P. 9.110.
30 Fla. Stat. §120.57(4) (2014).
31 Fla. Stat. §373.119(1) (2014).
32 See, e.g., Southwest Florida Water Management District v. Milmack, Inc., Administrative Complaint and Order No. SWF 2010 (Aug. 19, 2010).
33 Fla. S tat. §373.119 (2014); F.A.C. R. 28-106.111(4).
34 Fla. Stat. §120.69 (2014).
35 See Fla. Stat. §§373.044, 373.136, 373.433 (2014).
36 Fla. Stat. §373.129 (2014). Criminal enforcement is available for certain violations, which are deemed misdemeanors or felonies, and fines of up to $50,000 and/or imprisonment of up to five years per offense; again, each day the violation continues constitutes a separate offense; see Fla. S tat. §§373.430, 373.603, 373.613 (2014).
37 Waibel v. Southwest Florida Water Management District, 620 So. 2d 232 (Fla. 2d DCA 1993).
38 Lake Pickett Limited, 543 So. 2d at 884.
39 Fla. Stat. §373.129 (2014).
40 Fla. Stat. §57.041 (2014).
41 Id.
42 RLI Live Oak, 139 So. 3d at 870.
43 Id. at 871 (quoting the facts from the opinion of the Fifth District Court of Appeal).
44 Id. at 875.
45 Id. at 874 (emphasis added).
46 Id. at 875.
Daniel P. Fernandez has practiced law in the areas of administrative, environmental, and water law for more than 30 years. In addition to private law practice, he previously served as general counsel for the Southwest Florida Water Management District and staff director for the Florida Senate Natural Resources Committee. He is currently an assistanta professor of business law at Florida Gulf Coast University.
This column is submitted on behalf of the Administrative Law Section, Daniel Elden Nordby, chair, and Stephen Emmanuel, editor.
