Standing to Appeal an Administrative Order: Cautions from Martin County Conservation Alliance v. Martin County
Administrative and civil litigators appreciate the paramount need to create an evidentiary record to present the best case possible, both in the first instance, and to properly preserve issues for appeal. In recent years, the importance of that record for purposes of establishing appellate standing has been the focus of two district court of appeal cases. The decisions highlight the important distinctions between initial standing to challenge an agency administrative decision, permit, or order, and standing to appeal an adverse decision thereafter.
As discussed in this article, many of Florida’s environmental statutes give parties liberal standing to contest development and environmental permits and land use approvals. The liberal standing requirement does not extend to appeals, however, leaving litigants at risk of failing to make the required record in the lower tribunal. For example, in Martin County Conservation Alliance v. Martin County, 73 So. 3d 856 (Fla. 1st DCA 2011),1 the First District Court of Appeal held that a party challenging an issued development order must make a prima facie showing of standing to appeal in the lower tribunal if it wants to preserve its right to appeal an adverse decision. Martin County also ups the ante for appellants by subjecting them to potential sanctions if they appeal when they failed to make an adequate record for appellate standing in the lower tribunal. But the Second District Court of Appeal reached a different result in Peace River/Manasota Regional Water Supply Authority v. IMC Phosphates Co., 18 So. 3d 1079 (Fla. 2d DCA 2009). The dichotomy between Martin County and Peace River, and in particular, the risk of sanctions being imposed by an appellate court, require the practitioner to thoughtfully approach the development of evidence at trial. These legal considerations, as discussed below, present unique challenges for environmental protection groups seeking to challenge environmental or development approvals on behalf of their members.
Appellate Administrative Standing: Higher Thresholds and Cautious Recommendations
F.S. §120.68(1) provides that a “party who is adversely affected by final agency action is entitled to judicial review.” In Legal Envtl. Assistance Foundation, Inc. v. Clark, 668 So. 2d 982, 986 (Fla. 1996), the Florida Supreme Court established a four-part test to determine an administrative appellant’s standing: 1) the agency action is final; 2) the Administrative Procedures Act (APA), F.S. Ch. 120, applies; 3) the appellant was a party to the administrative hearing; and 4) the appellant was adversely affected by the agency’s final action. Only the fourth element — adversely affected — is relevant to the present article.
The legislature created a single, narrow definition of appellate administrative standing in F.S. §120.68. Standing under §120.68 is narrower than standing to participate in the initial administrative hearing, and the APA’s definition of a “party” allows for a much broader zone of party representation at the administrative level than at the appellate level.2 Moreover, compared with appellate standing, there are numerous statutory and regulatory provisions that broadly confer a participant’s initial standing for purposes of the administrative hearing. These provisions can be separated into two general categories.
First, under the APA, any person “substantially affected” by agency action may participate in an administrative challenge to that action (APA standing).3 Second, various statutes and rules codify the criteria a party must satisfy to have standing for participation, and the criteria often include residency or property ownership (codified standing).4 If a party can establish both APA and codified standing, the party can rely upon either or both for purposes of participating in the initial administrative hearing. Importantly, however, a party need not establish “adverse effects” in order to have their day before the administrative tribunal.
Martin County reminds administrative practitioners to have the forethought to prove up appellate standing, and not just administrative standing, during the Ch. 120 administrative hearing process. When a party rests upon codified standing, it may not be necessary to show “harm” from the agency action because all that is required is to demonstrate that the standing allegations and evidence satisfy the statutory or regulatory criteria.5 the failure to submit additional evidence of harm may, however, inadvertently preclude a later appeal due to the absence of record evidence as to how the final agency decision “adversely affects” the party.6 Accordingly, cautious practitioners of administrative law should consider proving up APA standing in every proceeding, which can begin to develop the record necessary to satisfy the higher standing threshold required by §120.68. A party asserting APA standing submits evidence of how the agency action affected its substantial interests, and that “substantial interest” evidence will likely be sufficient to demonstrate appellate standing.7
For illustration, envision a Florida nonprofit organization challenging the issuance of an environmental permit, using the codified standing provision in F.S. §403.412(6). As required by the statute, the nonprofit proves it has 25 members residing within the relevant county and that it was formed one year prior to submittal of the permit application. It then submits evidence of the proposed permit’s noncompliance with relevant statutes. The administrative order acknowledges the nonprofit has codified standing, but rejects the merits of the nonprofit’s challenge, concluding the permit is in compliance. Such a scenario is a clear pitfall for the nonprofit wishing to pursue an appeal. The lack of affirmative record evidence regarding injury or harm to the nonprofit limits its ability to show how it is “adversely affected” by the final agency action.8 As a consequence, relying entirely on codified standing risks the court’s dismissal of an appeal for lack of standing and — as occurred in Martin County — the imposition of sanctions.
Sanctions: When, Why, and How?
Losing appellate rights is only the beginning for the uninitiated litigant. F.S. §§57.105 and 120.595, independent of each other, authorize the imposition of sanctions in administrative appellate proceedings. First, §57.105(1) permits an appellate court to impose sanctions for pursuing a claim or defense that “(a) was not supported by the material facts necessary to establish the claim or defense; or (b) would not be supported by the application of then-existing law to those material facts.”9 An award of fees and costs pursuant to §57.105(1) is “tantamount to a conclusion that the claim was frivolous when filed.”10
Second, §120.595 separately authorizes appellate courts and administrative law judges (ALJs) to award reasonable attorneys’ fees to the prevailing party. An appellate court can award attorneys’ fees “if the court finds that the appeal was frivolous, meritless, or an abuse of the appellate process….”11 F. S. §120.595(1)(b) also requires that a final order award attorneys’ fees and costs to the prevailing party if the nonprevailing party participated for an improper purpose.12 Improper purpose is participation “primarily to harass or to cause unnecessary delay or for frivolous purpose….”13 Florida law also creates a rebuttable presumption of an “improper purpose” if the nonprevailing party participates in two or more similar proceedings in which neither the factual or legal merits of its position were established.14 Though not directly authorizing an appellate court to impose sanctions, the Martin County opinion’s consideration of the appellant’s participation in other unsuccessful administrative appeals suggests appellate courts may be guided by this statutory language.
First District’s Consideration of Appellate Administrative Standing and Sanctions
In Martin County, the Martin County Conservation Alliance and 1000 Friends of Florida, Inc. (collectively, the alliance), challenged whether two Martin County ordinances were “in compliance” with the Martin County Comprehensive Growth Management Plan. The alliance alleged that the ordinances allowed urban sprawl, were unsupported by data and analysis, and created internal inconsistencies in the plan.15 Following the hearing, the ALJ determined that the alliance had APA standing as well as codified standing based upon F.S. §163.3184(1)(a).16 On the merits, the ALJ rejected the alliance’s allegations of harm and concluded that the ordinances were in compliance.17 the final order rejected the alliance’s exceptions and affirmed the recommended order in toto.18 the alliance appealed the final order, leading to two opinions from the First District Court of Appeal.
The First District’s initial opinion dismissed the appeal for lack of standing under §120.68 in Martin Cnty. Conservation Alliance v. Martin Cnty., 35 Fla. L. Weekly D1386b, 2010 WL 2472197 (Fla. 1st DCA 2010). The court concluded the alliance failed to demonstrate that the final order “adversely affected” it, or a sufficient number of its members, and, therefore, lacked appellate standing. After dismissal, the First District, sua sponte, issued an order to show cause as to why the alliance should not be sanctioned pursuant to F.S. §57.105(1) for pursuing an appeal not based in law or fact.19
The First District’s second opinion in the proceeding sanctioned the alliance and its counsel “for the filing of an appeal for which standing clearly is not present.”20 the opinion reasoned that sanctions were warranted because a meritless appeal must necessarily be frivolous, and, thus, sanctions must be imposed.21 Based on the final order, and using the alliance’s own phrasing that the land use amendments at stake “could” have caused environmental harm, the court concluded that the alliance “did not and cannot claim that the amendments will increase development density or otherwise adversely affect [its] identified environmental interest.”22 the court also rejected arguments that a subjective belief of harm was sufficient because a party “cannot transform a lack of evidence into a legitimate claim or argument by ‘belief.’”23 Instead, the First District viewed the appeal as an attempt to retry facts even though the alliance did not assert that the final order was unsupported by competent substantial evidence.24
The majority opinion also referenced the Fourth District’s two dismissals — also for lack of appellate standing — of similar administrative appeals filed by the alliance.25 Impliedly, the First District further justified its sanctions order based on the alliance’s prior conduct.26 Although there is no statutory provision requiring consideration of a party’s prior conduct when imposing sanctions, the First District’s consideration of other dismissals may be the genesis of a “prior conduct” factor in a court’s discretionary consideration of whether to impose sanctions and is something for practitioners to bear in mind.27
In dissent, Judge Van Nortwick agreed that the evidence submitted was insufficient to demonstrate appellate standing.28 Asserting that the majority opinion blurred the lines between a party’s standing and the merits of a case, he concluded that the “case is not close to providing a basis to impose sanctions.”29 In many respects, the dissenting analysis of the alliance’s appellate standing is similar to the framework utilized by the Second District’s consideration of appellate administrative standing in Peace River.30
Second District’s Consideration of Administrative Appellate Standing
In Peace River, the Second District considered the standing of an appellant without consideration of the ALJ’s determinations on the merits of the appellant’s claims.31 Challenging issuance of phosphate mining permits that would allegedly affect the flow of Horse Creek, the Peace River/Manasota Regional Water Supply Authority alleged that it was substantially affected because the permits would cause environmental harm that would affect the authority.32 the Second District determined that the authority had standing at both the administrative and appellate level.33
That appellate conclusion stood in stark contrast with the prior ruling of the ALJ. In the administrative proceeding, the ALJ concluded that the permits, with modification, would not cause harm, and because he rejected the allegations of harm, the ALJ also determined that the authority did not have standing in the initial administrative hearing.34 these conclusions were adopted in the final order.35
The Second District reversed the decision, holding that standing is a forward-looking concept that “cannot ‘disappear’ based on the ultimate outcome of the proceeding.”36 the opinion rejected the argument that the authority could not be adversely affected, premised upon the ALJ’s conclusions that the permits would not cause harm,37 And critiqued the appellee’s interpretation of F.S. §120.68:
[It] would result in a situation in which a party who unsuccessfully challenged a permit. . . could never appeal a final order issued by DEP because the permit cannot issue if there are adverse effects that are not mitigated. Because the [a]uthority presented evidence that supported its position that it would be adversely affected if the permit was issued, the determination of whether those permits were properly issued necessarily includes appellate review. Thus, on these facts, the [a]uthority has standing to appeal the ALJ’s and DEP’s rejections of its evidence, and its standing continues until the appellate process is tapped out.38
In sum, and in stark contrast to Martin County, a fact-finder’s rejection of a challenging party’s allegations of harm — which are the basis of the party’s initial standing — did not preclude the party from appealing an adversely decided administrative order.
Conclusions: Preserving the Administrative Appeal
Fundamentally, the courts in Martin County and Peace River disagreed over whether a nonprevailing party could use evidence submitted to but rejected by the ALJ as a basis for establishing standing on appeal. The appellants and their lawyers remain caught in the middle, and face a real risk of sanctions, too.
The divergence between the analysis employed in Martin County and Peace River cautions counsel to pursue the most conservative course of action, and the First District’s analysis warrants special attention because the First District hears a significant proportion of administrative appeals. Many agencies are headquartered in Leon County, and pursuant to the home-venue privilege, the First District most frequently is the appellate court involving final agency action.39 therefore, practitioners are advised to submit evidence and create a record establishing any adverse effects during the administrative hearing, a showing that is particularly important for any party who initially relied upon codified standing for the initial hearing. Alternatively, litigants jeopardize their ability to pursue an appeal and their bank account balance.
1 the First District withdrew Martin Cnty. Conservation Alliance v. Martin Cnty., 35 Fla. L. Weekly D2765 (Fla. 1st DCA Dec. 14, 2010), and replaced it with Martin Cnty. Conservation Alliance v. Martin Cnty., 73 So. 3d 856 (Fla. 1st DCA 2011), thereby denying the Martin County Conservation Alliance and 1000 Friends of Florida, Inc., motion for rehearing and motion for rehearing en banc. The alliance sought review by the Florida Supreme Court, which was granted by Martin Cnty. Conservation Alliance v. Martin Cnty., 90 So. 3d 272 (Fla. 2012), and subsequently dismissed by Martin Cnty. Conservation Alliance v. Martin Cnty., 113 So. 3d 837 (Fla. 2013).
2 Daniels v. Fla. Parole & Prob. Comm’n, 401 So. 2d 1351, 1453 (Fla. 1st DCA 1981) (the “APA’s definition of a party recognizes the need for a much broader zone of party representation at the administrative level than at the appellate level”), superseded on other grounds by statute, Ch. 83-78, §1, Laws of Fla. See also Bd. of Comm’rs of Jupiter Inlet Dist. v. Thibadeau, 956 So. 2d 529, 534 (Fla. 4th DCA 2007); Melzer v. Fla. Dep’t of Cmty. Affairs, 881 So. 2d 623, 625 (Fla. 4th DCA 2004); Sierra Club v. Suwannee Am. Cement Co., 802 So. 2d 520, 521 (Fla. 1st DCA 2001).
3 Fla. Stat. §§120.56(1)(a), 120.565(1), 120.569(1) (providing for administrative review of a final agency action for any substantially affected person).
4 See Fla. Stat . §§163.3184 (allowing persons or businesses owning property within local government boundaries to request administrative review of the local government’s comprehensive plan amendment);
Fla. Stat. §403.412(5) (allowing any political subdivision or citizen to intervene as a party in any administrative proceeding relating to protection of the air, water, or natural resources of the state). See also Gadsden State Bank v. Lewis, 348 So. 2d 343 (Fla. 1st DCA 1977) (considering a scope of standing provided in the administrative code).
5 See, e.g., Mid-Chattahoochee River Users v. Dep’t of Envtl. Prot., 948 So. 2d 794 (Fla. 1st DCA 2006); Friends of the Everglades v. Bd. of Trs., 595 So. 2d 186 (Fla. 1st DCA 1992).
6 E.g., Martin Cnty., 73 So. 3d at 862-63. Further, in Sierra Club, 802 So. 2d at 522, the appellate court recognized that one organization had standing to represent its members who individually had standing as citizens in the administrative proceeding, but dismissed the appeal because the organization failed to establish any “adverse effects” of the final agency action to demonstrate appellate standing. See Friends of Perdido Bay, Inc. v. Dep’t of Envtl. Prot., 44 So. 3d 650 (Fla. 1st DCA 2010); Thibadeau, 956 So. 2d at 534. See also Save Our Beaches, Inc. v. Fla. Dep’t of Envtl. Prot., 27 So. 3d 48, 55-56 (Fla. 1st DCA 2006), overruled on other grounds, Walton Cnty. v. Stop the Beach Renourishment, Inc., 998 So. 2d 1102 (Fla. 2008), aff’d, Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Envtl. Prot., ___ U.S. ___, 130 S. Ct. 2592 (2010); Dep’t of Corr. v. Van Poyck, 610 So. 2d 1333, 1334 (Fla. 1st DCA 1992).
7 Agrico Chemical Co. v. Dep’t of Envtl. Regulation, 406 So. 2d 478 (Fla. 2d DCA 1981).
8 E.g., Martin Cnty., 73 So. 3d at 862-63; Sierra Club, 802 So. 2d at 522.
9 In addition,
Fla. Stat. §57.105(5) requires an administrative law judge to award a reasonable attorneys’ fee in administrative proceedings in the same manner as the courts have discretion to make such awards.
10 E. Indus., Inc. v. Fla. Unemp’t Appeals Comm’n, 960 So. 2d 900, 901 (Fla. 1st DCA 2007).
11 Fla. Stat. §120.595(5). See generally Consultech of Jacksonville, Inc. v. Dep’t of Health, 876 So. 2d 731 (Fla. 1st DCA 2004); Procacci Commercial Realty, Inc. v. Dep’t of Health and Rehabilitative Servs., 690 So. 2d 603 (Fla. 1st DCA 1997).
12 Fla. Stat . §120.595(1)(c). A nonprevailing adverse party is a party that failed to substantially change the outcome of the final agency action. Fla. Stat. §120.595(1)(e)(3).
13 Fla. Stat . §120.595(1)(e)(1).
14 Fla. Stat. §120.595(1)(c) .
15 Martin Cnty. Conservation Alliance v. Martin Cnty., DCA Final Order No. DCA09-GM-299, (Fla. Dep’t of Cmty. Affairs Aug. 31, 2009) [hereinafter Martin Cnty. Final Order], adopting in toto, DOAH Case Nos. 08-1144 & 08-1465 (DOAH Apr. 10, 2009) [hereinafter Martin Cnty. Recommended Order]. Ordinance 777 is known as the Land Protection Incentives Amendment (LPIA). As approved by the Florida Department of Community Affairs (DCA), LPIA facilitates development of tracts over 500 acres in clusters of lots over two acres in size, if more than 50 percent of the tract is encumbered with an easement for conservation, open space, or agricultural use. Ordinance 781 (SUSDA) is an amendment to the county’s Secondary Urban Services District allowing property owners therein to apply and pay for connection to regional sewer service for water and wastewater utilities, instead of using individual potable wells and septic tanks. As initially passed, DCA found LPIA was not in compliance. DCA petitioned for administrative review of that decision in DOAH Case No. 08-1144GM, in which case the alliance intervened to challenge the compliance of LPIA. During the pendency of the proceeding, the county amended LPIA by Ordinance 795, which resulted in DCA finding LPIA in compliance. The alliance continued to challenge the amended LPIA after DCA was realigned from petitioner to respondent. Martin Cnty. Final Order at 2-3. The alliance filed a petition seeking review of DCA’s determination that SUSDA complied with the plan in DOAH Case No. 08-1465, and the alliance’s request for consolidation of DOAH Case Nos. 08-1144 and 08-1465 was granted. Id. at 3. The ALJ allowed Martin Island Way, LLC, and Island Way, LLC (intervenors) to intervene and align with DCA as respondents. Id.
16 Martin Cnty. Recommended Order at ¶98. Fla. Stat . §163.3184(1)(a) creates standing for categories of “affected persons” to challenge comprehensive plan amendments, including persons owning property, residing, or owning or operating a business within the boundaries of the local government. The alliance had standing as it operated a business in Martin County, and it had organization standing because a substantial number of its members were “affected persons,” the case was germane to the purposes of the organization, and the relief requested did not require individual member participation. Id. at ¶¶96-98. An organization can establish standing to assert an administrative challenge on behalf of its members if it can demonstrate its members would have standing in their own right, the interests the organization seeks to protect are germane to its purpose, and neither the claim or relief requested requires participation by the individual members. Fla. Home Builders Ass’n v. Dep’t of Labor, 412 So. 2d 351, 353 (Fla. 1982).
17 Martin Cnty. Recommended Order at ¶112.
18 Martin Cnty., 35 Fla. L. Weekly D2765 at 1-2.
19 Id. at 2.
21 Id. at 2-3 (citing Long v. AvMed, Inc., 14 So. 3d 1264, 1265 (Fla. 1st DCA 2009)) (discussing frivolousness); Id. at 16-18 (quoting de Vaux v. Westwood Baptist Church, 953 So. 2d 677 (Fla. 1st DCA 2007)) (reminding litigants of its “holding and admonition” that “‘section 57.105 expressly states courts ‘shall’ assess attorney’s fees….’”).
22 Id. at 11.
23 Id. at 12 (finding that the evidence “cannot show” any adverse effects, by relying upon on the ALJ’s findings on the merits of the alliance’s challenge).
24 Id. at 14-16 (“[T]here are no ‘material facts’ supporting an appeal, because [the alliance does] not even assert that the [ALJ’s] findings are unsupported by competent, substantial evidence.”).
25 Id. at 4, 17 (citing O’Connell v. Dep’t of Cmty. Affairs, 874 So. 2d 673 (Fla. 4th DCA 2004)); Melzer v. Dep’t of Cmty. Affairs, 881 So. 2d 623 (Fla. 4th DCA 2004).
26 Martin Cnty., 35 Fla. L. Weekly D2765 at 4. Though
Fla. Stat. §120.595(1)(c) permits award of attorneys’ fees to prevailing parties when “the nonprevailing adverse party has participated in two or more other such proceedings involving the same prevailing party and the same project as an adverse party and…the nonprevailing party did not establish either the factual or legal merits of its position,” the subsection is likely inapplicable because it was not invoked below. See generally Martin Cnty. Recommended Order; Martin Cnty. Final Order.
27 Compare Fla. Stat. §120.595(1)(c) with Fla. Stat. §120.595(5).
28 Martin Cnty., 35 Fla. L. Weekly D2765 at 19, 28 (Van Nortwick, J. dissenting).
29 Id. at 28 (arguing that the majority opinion “merges the issues relating to standing and the merits of the case” and also rejecting the majority’s discussion of a party’s subjective beliefs, explaining that “the sanction order confuses the terminology employed in advocating a conclusion [ i.e., the party ‘believes’ that the evidence shows ‘x’] with the conclusion itself. Every advocate who comes in good faith to this court believes in the correctness of his or her cause. Whether that belief is well founded is our decision to make; and it is often a complex one.”).
30 Id. at 24-26 (stating “facts supporting standing should be considered separately from the merits”). In doing so, the dissent relied upon cases addressing standing in the context of whether a party could bring the initial challenge. Id. (citing Reily Enters. LLC v. Fla. Dep’t of Envtl. Prot., 990 So. 2d 1248, 1251 (Fla. 4th DCA 2008); St. Martin’s Episcopal Church v. Prudential-Bache Sec., Inc., 613 So. 2d 108, 110 at n.4 (Fla. 4th DCA 1993); Peace River, 18 So. 3d at 1083; Sun States Utils., Inc. v. Destin Water Users, Inc., 696 So. 2d 994, 995 n.1 (Fla. 1st DCA 1977)).
31 Peace River, 18 So. 3d at 1082-85.
32 Id. at 1085-86.
33 Id. at 1083.
34 Peace River/Manasota Reg’l Water Supply Auth. v. IMC Phosphates Co., DEP Final Order Nos. 03-205, 03-206, 03-250, 03-287, 03-295, 03-297, 03-1661, 04-465, 04-466, 04-485, DOAH Case Nos. 03-0791, 03-0792, 03-0804, 03-0805, 03-1610, 04-1062 at 10-16 (Dep’t of Envtl. Prot. July 31, 2006).
36 Peace River, 18 So. 3d at 1082-85 (quoting Hamilton Cnty. Bd. of Cnty. Comm’rs v. Dep’t of Envtl. Regulation, 587 So. 2d 1378, 1383 (Fla. 1st DCA 1991)). Even though the authority was allowed to fully participate and the ALJ’s determination that it lacked standing had no effect, the Second District specifically addressed the issue because of the ALJ’s incorrect reasoning. Id. On February 18, 2011, the Fifth District issued an opinion relying upon the Second District’s analysis regarding the impropriety of mixing the issue of a party’s standing with the merits of the challenge in St. Johns Riverkeeper, Inc. v. St. Johns River Water Mgmt. Dist., 54 So. 3d 1051, 1054-55 (Fla. 5th DCA 2011).
37 Peace River, 18 So. 3d at 1086.
39 Fish & Wildlife Conservation Comm’n v. Wilkinson, 799 So. 2d 258, 260 (Fla. 2d DCA 2001) (“It is well established within the common law that venue in an action against a governmental agency lies in the county where the agency maintains its principal headquarters.”); Barr v. Fla. Bd. of Regents, 644 So. 2d 333, 335 (Fla. 1st DCA 1994).
Gary K. Hunter, Jr ., is a shareholder with Hopping Green & Sams, P.A., in Tallahassee, and focuses his practice on representing clients on issues related to land use permitting/entitlements, including comprehensive plan amendments, rezonings, variances, and development permits before the courts, administrative tribunals, local governments, and the Florida Legislature. He graduated, cum laude, from the University of Georgia College of Law and is a past chair of the Environmental and Land Use Law Section.
Julie M. Murphy is an attorney with the Office of the Attorney General in Denver, CO, and represents the Colorado Division of Reclamation, Mining and Safety. She previously practiced with Hopping Green & Sams, P.A. She graduated from the University of South Carolina School of Law and served as editor in chief for the Southeastern Environmental Law Journal.
This column is submitted on behalf of the Environmental and Land Use Law Section, Erin Lee Deady, chair, and Tara Duhy and Keith W. Rizzardi, editors.