The Points of Entry for Rule Challenges Post Florida Pulp & Paper
Prior to the 1996 revision, the Florida Administrative Procedures Act (APA), F.S. Ch. 120, provided a single “point of entry” or “window of time” for filing a challenge to a proposed rule — 21 days after publication of proposed rulemaking.1 In explaining the underlying purpose behind providing the rule challenge remedy, the late Patricia A. Dore, professor of law at Florida State University, acknowledged that while its “history…offers little insight into legislative intent,” it was “intended to create an opportunity for a citizen-initiated check on rulemaking that exceeded delegated statutory authority” and “implements the ‘ideal of participatory democracy.’”2
The 1996 revision of the APA fortified the rule challenge remedy by creating three additional points of entry — 1) 10 days after the final public hearing is held on the proposed rule; 2) 20 days after the statement of estimated regulatory costs (SERC) or revised SERC has been prepared and made available; and 3) 20 days after publication of a notice of change.3 The rationale for the establishment of these new points of entry was to 1) provide a meaningful opportunity to challenge where the existing timelines related to SERCs and public hearings made the filing of a challenge triggered by these activities “virtually impossible”; 2) “minimize unnecessary challenges to proposed rules” where an agency has addressed comments or objections during a public hearing; and 3) permit challenges in the circumstance when an agency has made changes to its rule such that it is altered from its initial introduction to the public.4
This article reviews the four points of entry provided by the APA and the recent decision of Fla. Pulp & Paper Ass’n Envtl. Affairs, Inc. v. Dep’t of Envtl. Prot. and Fla. Envtl. Regulation Comm’n, 223 So. 3d 417 (Fla. 1st DCA 2017) (Florida Pulp & Paper).
The Four Points of Entry
As set forth above, 120.56(2)(a) governs the time frames for when a rule challenge may be filed, and provides:
“A petition alleging the invalidity of a proposed rule shall be filed within 21 days after the date of publication of the notice required by s. 120.54(3)(a); within 10 days after the final public hearing is held on the proposed rule as provided by s. 120.54(3)(e)2.; within 20 days after the statement of estimated regulatory costs or revised statement of estimated regulatory costs, if applicable, has been prepared and made available as provided in s. 120.541(1)(d); or within 20 days after the date of publication of the notice required by s. 120.54(3)(d).…A person who is not substantially affected by the proposed rule as initially noticed, but who is substantially affected by the rule as a result of a change, may challenge any provision of the resulting proposed rule.”5
Each of the four points of entry correlates to and is triggered by distinctive activities within the rule adoption process as found in F.S. 120.54(3).
Via 120.54(3)(a)1, the APA requires agencies to provide notice of intended action prior to the adoption, amendment, or repeal of any rule (other than an emergency rule). This notice initiates the adoption process, and the publication of this notice triggers the first point of entry.6
The second window opens following the final public hearing as provided by F.S. 120.54(3)(e)2. Notably, the term “public hearing” is broadly defined within 120.54(3)(e)2 to encompass “any public meeting held by any agency at which the rule is considered.” Within the adoption procedures, F.S. 120.54(3)(c) provides an agency may schedule a public hearing on the proposed rule; however, it is required to do so if an affected party requests a public hearing within 21 days of the publication of the notice of intended action.7 Thus, the statutory text permits circumstances in which a rule could reach adoption without the occurrence of a public hearing, thereby leaving the second window unopened.
A point of contrast between this second window of time and the other three is the noticing scheme. While the uniform rules adopted pursuant to F.S. 120.54(5) address notice for a public hearing, both the uniform rules and the APA lack an explicit notice requirement for the final public hearing as contemplated by the second point of entry. As a practical matter, such a specific notice requirement may well be unworkable because there are instances in which an agency would not know whether a hearing/workshop constitutes the “final” public hearing until the conclusion of that particular hearing/workshop. However, requiring notice to convey the occurrence of the final public hearing would be more consistent with the contemporaneous noticing associated with the other points of entry and may bring more clarity to this part of the rulemaking process.
The preparation or revision of a SERC triggers the third point of entry. The rule adoption procedures “encourage” agencies to prepare a SERC of the proposed rule; however, under 120.54(3)(b)1, agencies must prepare a SERC in two instances: if the proposed rule will have an adverse impact on a small business or if the proposed rule is likely to directly or indirectly increase total regulatory costs in excess of $200,000 within one year after the implementation of the rule.8 Section 120.541 generally addresses SERCs and sets forth a third circumstance in which an agency is obligated to prepare (or revise) a SERC — in response to a lower cost regulatory alternative (LCRA) submitted by a substantially affected person.9 The agency’s failure to respond to the LCRA or prepare a SERC is a material failure to follow required procedures; thus, it constitutes an invalid exercise of legislative authority.10 To contest a rule based on this material failure, the SERC provision of 120.541(1)(f) imposes a one-year challenge limitation from the effective date of the rule and requires the challenger be substantially affected by the rule’s regulatory costs.11
In turn, 120.541(1)(g) restricts a challenger’s ability to invalidate a rule based on 120.52(8)(f) that the rule imposes regulatory costs that could be reduced by the adoption of less costly alternatives. Specifically, this subsection authorizes the use of 120.52(8)(f) as a basis for invalidating a rule only in those instances in which the challenger raises the issue of a less costly alternative in an administrative proceeding, within one year of the effective date of the rule; contests the agency’s rejection of a LCRA; and the challenger’s substantial interests are materially affected by the rejection.12
The fourth point of entry is triggered by the publication of the notice “required by F.S. 120.54(3)(d).”13 Section 120.54(3)(d) provides agencies with three options after the time for requesting a hearing has expired or after the final public hearing: 1) if the rule has not been changed, the agency notifies the Joint Administrative Procedures Committee (JAPC)14; 2) if there has been only a technical or nonsubstantive change to the rule, the agency notifies JAPC; and 3) if there was a nontechnical or substantive change, the agency must file a notice of change with JAPC and publish it in the Florida Administrative Register (FAR).15 With this in mind, it is clear the only “notice” envisioned under the final point of entry is a notice of change.
A challenge triggered by a notice of change comes with an important limitation.16 The last sentence within 120.56(2)(a) provides that “[a] person who is not substantially affected by the proposed rule as initially noticed but who is substantially affected by the rule as a result of a change, may challenge any provision of the resulting proposed rule.” Put differently, if one is substantially affected by the initially proposed rule, and that party waits to challenge after the notice of change, that challenger is limited to challenging only the changed provisions of the rule.17 This limitation can leave challengers, agencies, and administrative law judges with the task of sifting through strike-through versions of rules to arrive at a conclusion regarding what has changed in a rule and what has not.18
Florida Pulp & Paper — the “Nanny Nanny Boo Boo” Decision19
On July 11, 2017, the First District Court of Appeal, in Florida Pulp & Paper, reversed an order of an administrative law judge (ALJ) dismissing a rule challenge as untimely and remanded for consideration of the petition on its merits.20 Before the court, was whether the last two points of entry were triggered by the revised SERC and notice of change.21 The court, relying on the plain language of 120.56(2)(a), found the revised SERC triggered the third point of entry and that “a person who is substantially affected by a proposed rule who fails to take advantage of the first available point of entry is not necessarily precluded from taking advantage of one of the later points of entry.”22
The Facts of Florida Pulp & Paper
On June 30, 2016, the Department of Environmental Protection published its notice of intended action in the FAR to revise existing F.A.C. Rules 62-302.530 and 62-302.400.23 In response to this notice and related rule materials, JAPC sent the department a letter on July 20, 2016, commenting the “strike-though/underline version of proposed Rule 62-302.530 that appeared in the FAR notice made the changes to the rule ‘incomprehensible.’”24
A public hearing on the proposed rule revisions was held on July 26, 2016, before the Environmental Regulation Commission, which approved the proposed revisions to Rule 62-302.530 as initially noticed and approved the proposed amendments to Rule 62-302.400 with changes.25
On August 4, 2016, the department published two notices in the official publication of the FAR: a Notice of Change/Withdrawal for Rule 62-302.400 and a Notice of Change/Withdrawal for Rule 62-302.530, which included a subheading, “Notice of Correction,” a few lines down.26 The notice of correction included statements by the department that the correction was made “in response to comments submitted by the [JAPC],” and the SERC was being revised to show a LCRA had been received “but was immediately withdrawn.”27
Four separate petitions challenging Rule 62-302.530 were filed with DOAH in August 2016 by 1) the Seminole Tribe of Florida (August 8)28; 2) the City of Miami (August 19); 3) Florida Pulp & Paper Association Environmental Affairs, Inc. (August 23); and 4) Martin County (August 24).29 The tribe originally claimed its petition was timely filed under the second point of entry — 10 days after the final hearing.30 However, it subsequently amended the basis for timeliness to the fourth point of entry — within 20 days of the notice of change.31 The city and the association contended timelines via the revised SERC and notice of change — the third and fourth points of entry.32 Martin County claimed timeliness under the notice of change.33
The department filed motions to dismiss all four petitions on the basis that the petitions were untimely and each party lacked standing.34 The petitions were consolidated into a single proceeding and oral argument, on the issue of timeliness, was held before the ALJ on September 7, 2016.35
The ALJ’s Order
On September 13, 2016, the ALJ entered a corrected order of dismissal concluding all four petitions were untimely because neither the notice of correction nor the revised SERC provided points of entry.36 In addressing timeliness by way of the notice of correction, the ALJ acknowledged that while the APA does not refer to a “notice of correction” nor a “correction,” the Department of State, the agency charged with publishing the FAR, specifically includes a notice of correction among the type of notices it publishes within III of the FAR, which is entitled “Notice of Changes, Corrections and Withdrawals.”37 The ALJ looked beyond the title to the text within the “Notice of Change/Withdrawal” to find no change was made to the rule and the “Department of State’s organization of the Register cannot transform all notices of correction into notices of change that provide new points of entry for persons to challenge unchanged rules.”38
In addressing the revised SERC, the ALJ stated the revised SERC could not be used by petitioners as a point of entry because they “do not allege, and cannot allege, that they are substantially affected by the revised SERC.”39 The ALJ noted 120.541(1) limits challenges regarding SERCs and rejected LCRAs to those persons who are “materially affected by the rule’s regulatory costs or by the rejection of the LCRA.”40 Accordingly, the ALJ concluded it would be “inconsistent” to read 120.56(2)(a) to “provide a new point of entry when a revised SERC has been issued, to persons who are not substantially affected by the revised SERC.”41 The ALJ went on to characterize the revised SERC as “misidentified” by the department.42 The ALJ determined the revised SERC did not qualify as such because it was a “change in the narrative accompanying the estimated costs” and not a “revision to estimated costs” as contemplated by 120.541.43 Accordingly, because the revised SERC had “no effect on the costs,” it could not create a point of entry.44
The ALJ, in rejecting both the notice of correction and the revised SERC as valid points of entry for petitioners, specifically endorsed a reading of 120.56(2)(a) to include a standing requirement such that a challenger must be “substantially affected” by a notice of change or a revised SERC to take advantage of the related points of entry.45
Following entry of the corrected order of dismissal, the association appealed to the First District Court of Appeal, and the city and the tribe appealed to the Third District Court of Appeal; Martin County did not appeal.46
The Florida Pulp & Paper Opinion
The First District Court of Appeal found, through a straightforward textual analysis, the revised SERC referred to in the department’s notice of correction opened the third window of time because it was prepared and made available in accordance with 120.541(1)(d).47 Having found the association’s petition timely under the third point of entry, the court did not address whether the fourth point of entry was triggered by the notice of correction.48
The department argued the APA requires an agency to make a “substantive response” when it makes a revision to a SERC.49 The department also contended the ALJ’s conclusion that 120.541 contemplates “a revision to the estimated costs, not a change in the narrative” was wholly consistent with the relevant statutory provisions.50 The association maintained the triggering event for the third point of entry is a “revised SERC,” not a revision to the regulatory costs, and to require a change in the costs of the SERC in order to trigger a challenge is “contrary to the plain language.”51 The court found the department’s argument that revised SERC did not qualify as the type of “revision” proscribed by the statute unpersuasive.52 In dispensing with whether a mere “change in the narrative” could be the type of revision contemplated by 120.541(1)(a), the court noted the SERC provision provides for a broader type of “revision” by allowing a revision to be just a “statement of the reasons for rejecting the alternative in favor of the proposed rule.”53
The department also argued it was not required to prepare a revised SERC because the LCRA was “immediately withdrawn.”54 The court declined to resolve this issue because, under the facts presented, the department “did prepare a revised SERC and did make it available to the public on its website.”55 Thus, in meeting the statutory requirements, the department “triggered the third point of entry in 120.56(2)(a).”56
The association contended the ALJ had placed the additional “premature burden of standing” within the timeliness requirements of the rule challenge provision contrary to the plain language.57 The department urged, as the ALJ found, the related provisions within the APA — the SERC provisions of 120.541 and the points of entry of 120.56(2)(a) — “require a person to be substantially affected by a…revised SERC in order to use the corresponding point of entry.”58 The court found this argument to “erroneously conflate the issues of standing and timeliness.”59 It further stated “had the legislature intended there to be a different standing requirement” when a challenge is filed “after the point of entry created by the preparation of a revised SERC” or intended to restrict the “grounds upon which a person could challenge a proposed rule based on the point of entry after the petition was filed, it would have said so.”60
Lastly, the court addressed the issue of whether it would be “inequitable to allow the [a]ssociation to take advantage of a point of entry that was ‘serendipitously’ created by the preparation of the revised SERC” when the association could have filed a validity challenge after one of the first two points of entry.61 The court stated this argument “ignores the fact that the points of entry listed in 120.56(2)(a) are separated” by the word “or,” “which indicates that they are mutually exclusive alternatives.”62 Thus, a challenger “is not necessarily precluded” from availing itself to any one of the four points of entry.63 Judge Wetherell, who wrote the opinion, in footnote six, stated that the court “agree[d] with the ALJ’s comment in the dismissal order that a prudent person will file a rule challenge petition at the first available opportunity.”64
The Lingering Issue of Notices of Correction
The issue of whether a notice of correction constitutes a notice of change triggering the fourth point of entry was left unresolved in Florida Pulp & Paper. The arguments raised in Florida Pulp & Paper indicate notices of correction are routinely filed by agencies in response to JAPC’s comments received following its review of the initial rule package.65 However, such usage distorts the process when the statutory language is clear that only substantive changes are required to be published.
Several months after the decision in Florida Pulp & Paper, on February 8, 2018, JAPC sent a letter of inquiry to the Department of State asking for the department’s “authority for a notice of correction” and for an explanation of how the “term is defined for purposes of Rule 1-1.009(11).”66 The Department of State responded that “[a] [n]otice of [c]orrection is ‘deemed useful’67…[and] [a]lthough not required by statutes to be filed, it is recommended that agencies utilize the notice of corrections to communicate any technical changes to the [n]otice of [p]roposed [r]ules.”68 The frequent usage of the notice of correction by agencies suggests it is a useful means to respond to JAPC and/or convey nonsubstantive changes to the public. At the same time, this practice is adrift from the text of the APA creating uncertainty.
While some may view the decision in Florida Pulp & Paper as an example of the axiom “no good deed goes unpunished,” others will likely see it as a clear implementation of the plain language of the statute. In finding the points of entry of 120.56(2)(a) to be “mutually exclusive alternatives,” the court opens the door for persons substantially affected by a proposed rule to take advantage of points of entry once thought foreclosed.69 Moreover, it honors the “participatory democracy” function of the rule challenge provision.
1 Fla. Stat. 120.54(4)(b)(1995).
2 Patricia A. Dore, Access to Administrative Proceedings, 13 Fla. St. U. L. Rev. 965, 1014-1015 (1986) (footnotes omitted). The validity challenge provision at that time was found in 120.54(4) (1985).
3 Fla. Stat. 120.56(2)(a)(1996).
4 Lawrence E. Sellers, The Third Time’s the Charm: Florida Finally Enacts Rulemaking Reform, 48 U. Fla. L. Rev. 923, 122 (1996).
5 Fla. Stat. 120.56(2)(a) (2017) (emphasis added).
6 Fla. Stat. 120.56(2)(a) (2017); Fla. Stat. 120.54(3)(a)2.(2017).
7 Fla. Stat. 120.54(3)(c)1 (2017)(emphasis added).
8 Fla. Stat. 120.54(3)(b)1 (2017).
9 Fla. Stat. 120.541(1)(a) (2017).
10 Fla. Stat. 120.541(1)(e) (2017); Fla. Stat. 120.52(8)(a)(2017).
11 Fla. Stat. 120.541(1)(f) (2017).
12 Fla. Stat. 120.541(1)(g) (2017).
13 Fla. Stat. 120.45(2)(a) (2017).
14 Pursuant to 120.545(1), JAPC is charged with reviewing proposed rules as a “legislative check on legislatively created authority.”
15 Fla. Stat. 120.54(3)(d) (2017) (emphasis added).
16 Fla. Stat. 120.56(2)(a) (2017).
17 See Fla. Medical Ass’n., Inc., Fla. Osteopathic Medical Ass’n., and Fla. Podiatric Medical Ass’n. v. Dep’t of Health, Bd. of Nursing, Case No. 12-1545RP at 67-68 (DOAH Nov. 2, 2012), aff’d per curiam, 132 So. 3d 225 (Fla. 1st DCA 2014) (agreeing that generally a person who is substantially affected by a proposed rule and who only changes that rule after a notice of proposed change is limited to challenging the proposed change); The Seminole Tribe of Florida; City of Miami; Fla. Pulp & Paper Ass’n Envtl. Affairs, Inc.; and Martin County v. Dep’t of Envtl. Prot. and Fla. Envtl. Regulation Comm’n, Case Nos. 16-4431RP, 16-4836RP, 16-4875RP, 16-4912RP (DOAH Sept. 13, 2016), rev’d on other grounds, 223 So. 3d 417 (Fla. 1st DCA 2017) (The failure to challenge the provisions of a proposed rule that substantially affect a party when that rule is initially proposed would prevent that party from challenging those provisions after the notice of change.).
18 See Fla. Medical Ass’n., Inc., Fla. Osteopathic Medical Ass’n., and Fla. Podiatric Medical Ass’n. (noting a determination of what had changed in the proposed rule at issue and what had not would be a “somewhat tortured analysis” because the “changes were woven throughout like fabric”).
19 Oral Argument at 3:59; Seminole Tribe of Fla. and City of Miami v. Dep’t of Envtl. Prot. and Fla. Envtl. Regulation Comm’n, 230 So. 3d 544 (2017), available at http://3dca.flcourts.org/archived_video.shtml/ (During oral argument, Judge Luck, in jest, characterized the Florida Pulp & Paper decision a bit like “it’s their [the department’s] fault nanny nanny boo boo….”).
20 Fla. Pulp & Paper, 223 So. 3d at 420-421.
21 Id. at 419.
22 Id. at 420-421.
23 Id. at 417-418.
24 Brief of Appellees at 3, Fla. Pulp & Paper,223 So. 3d at 417 [hereinafter Brief of Appellees].
25 Fla. Pulp & Paper, 223 So. 3d at 418.
26 Id. at 418; see Brief of Appellant at 2, Fla. Pulp & Paper,223 So. 3d at 417 [hereinafter Brief of Appellant].
27 Fla. Pulp & Paper, 223 So. 3d at 418.
28 The tribe’s petition was received by DOAH at 5:02 p.m., on Friday, August 5, 2016, on the 10th day after the final public hearing. Accordingly, pursuant to Florida Administrative Code Rule 28- 106.104(3), the petition was given an official filing date of the next business day, Monday, August 8, 2016.
29 The Seminole Tribe of Florida; City of Miami; Fla. Pulp & Paper Ass’n Envtl. Affairs, Inc.; and Martin County, v. Dep’t of Envtl. Prot. and Fla. Envtl. Regulation Comm’n, Case Nos. 16-4431RP, 16-4836RP, 16-4875RP,16-4912RP at 3-4 (DOAH Sept. 13, 2016), rev’d on other grounds, 223 So. 3d 417 (Fla. 1st DCA 2017).
30 Id. at 3.
31 Petitioner’s Response in Opposition to Respondents’ Motion to Dismiss Petition for Administrative Determination of Invalidity of Proposed Rule at 1, The Seminole Tribe of Florida; City of Miami; Fla. Pulp & Paper Ass’n Envtl. Affairs, Inc.; and Martin County, v. Dep’t of Envtl. Prot. and Fla. Envtl. Regulation Comm’n, Case Nos. 16-4431RP, 16-4836RP, 16-4875RP,16-4912RP (DOAH Sept. 13, 2016).
32 The Seminole Tribe of Florida; City of Miami; Fla. Pulp & Paper Ass’n Envtl. Affairs, Inc.; and Martin County, v. Dep’t of Envtl. Prot. and Fla. Envtl. Regulation Comm’n, Case Nos. 16-4431RP, 16-4836RP, 16-4875RP,16-4912RP at 3 (DOAH Sept. 13, 2016), rev’d on other grounds, 223 So. 3d 417 (Fla. 1st DCA 2017).
33 Id. at 4.
34 Id. at 1.
36 Id. at 8.
37 Id.at 6.
38 Id. at 6-7.
39 Id. at 7-8.
40 Id. at 8.
46 On October 18, 2017, a little over three months after the First District Court of Appeal rendered its decision, the Third District Court of Appeal entered an order agreeing with and adopting the First District Court of Appeal’s decision. See The Seminole Tribe of Florida and City of Miami v. Dep’t of Envtl. Prot. and Fla. Envtl. Regulation Comm’n, 230 So. 3d 544 (Fla. 3d DCA 2017).
47 Fla. Stat. 120.56(2)(a) (2017).
48 Fla. Pulp & Paper, 223 So. 3d at 418.
49 Brief of Appellees at 12.
51 Brief of Appellant at 19.
52 Fla. Pulp & Paper, 223 So. 3d at 420.
54 Id. at 419.
55 Id. at 419-420.
57 Brief of Appellant at 18.
58 Brief of Appellees at 13.
59 Fla. Pulp & Paper, 223 So. 3d at 420.
64 Id. at n.6.
65 See G.B.;Z.L., Through His Guardian K.L.; J.H.; and M.R., v. Agency for Persons with Disabilities, DOAH Case No. 15-5903RP (June 3, 2016), rev’d on other grounds, 143 So. 3d 454 (Fla. 1st DCA 2014) (noting JAPC advised the agency that the legislative ratification statement was missing from the notice of proposed rulemaking and asked the agency publish a notice of correction); Life Insurance Settlement Association, v. Financial Service Commission and Office of Insurance Regulation, Case No. 09-0386RP (DOAH May 7, 2009), aff’d in part and rev’d in part on other grounds, 31 So. 3d 953 (Fla. 1st DCA 2010) (stating a notice of correction was filed in response to comments from the JAPC).
66 Letter from Sharon Jones, senior attorney, Joint Administrative Procedures Committee (Feb. 8, 2018)(on file with author).
67 Fla. Stat. 120.55(1)(a)8 (2017) (providing the notices the Department of State must include in the FAR and permitting “[a]ny other material required or authorized by law or deemed useful by the department”).
68 Letter from Carlos A. Rey, assistant general counsel, Florida Department of State, to Sharon Jones, senior attorney, Joint Administrative Procedures Committee (March 14, 2018) (on file with author).
69 Fla. Pulp & Paper, 223 So. 3d at 420.
VIRGINIA PONDER is an associate attorney with the Office of Public Counsel in Tallahassee.
This column is submitted on behalf of the Administrative Law Section, Garnett Wayne Chisenhall Jr., chair, and Stephen Emmanuel, editor.