Florida Bar Journal

To Stay or Not to Stay: The Florida Supreme Court Clarifies in Ybor the Applicability of the Presumptive Stay Provision in F.S. §120.68(3)

The first sentence of F.S. §120.68(3), located within Florida’s Administrative Procedure Act (APA) or F.S. Ch. 120, creates a presumption that a person who appeals an “agency decision [that] has the effect of suspending or revoking a license” is entitled to a stay “as a matter of right upon such conditions as are reasonable, unless the court, upon petition of the agency, determines that a supersedeas would constitute a probable danger to the health, safety, or welfare of the state.” In the past, there has been uncertainty as to which agency actions have the effect of suspending or revoking a license. But recently, when the Florida Supreme Court decided the case of Agency for Health Care Administration v. Ybor Medical Injury & Accident Clinic, Inc., 334 So. 3d. 596 (Fla. 2022), many of those questions were put to rest.

This article provides a brief discussion of the difference between the discretionary and presumptive stays afforded by Ch. 120, the two main license types addressed under Ch. 120, background on the licensing process at issue in Ybor, reviews the cases that preceded and led to the Florida Supreme Court’s Ybor decision, discusses Ybor, and analyzes its effect going forward.

Stays Afforded by the Administrative Procedure Act

Parties who appeal agency actions can move for a stay of the agency actions they are contesting while their appeals are pending.^[1] Parties can file motions for stay with the lower tribunal (agency) or, for good cause shown, the appellate court.^[2] The lower tribunal may grant a stay upon appropriate terms, including the posting of a bond, and its decision on a motion for stay is reviewable by the appellate court.^[3]

The granting of a stay is up to the discretion of either the lower tribunal or the appellate court. “Factors which are considered…in deciding whether to grant a stay include the moving party’s likelihood of success on the merits, and the likelihood of harm should a stay not be granted.”^[4] When a requested stay would have the effect of enjoining agency action, the court or lower tribunal should also consider whether the moving party has demonstrated: 1) irreparable harm; 2) a clear legal right to a stay; 3) an inadequate remedy at law; and 4) consideration of the public interest.^[5]

However, when a party appeals agency action that has the effect of suspending or revoking a license, F.S. §120.68(3) states the party has a presumptive right to a stay when it moves for one, unless the agency petitions the court to not grant one, and, in doing so, demonstrates that the granting of a stay would constitute a probable danger to the health, safety, or welfare of the public.

When a party moves for a presumptive stay under §120.68(3), the agency may file a response to the motion within 10 days of the filing of the motion, or within a shorter time period set by the court.^[6] The court must grant the motion unless the agency demonstrates a stay would constitute a probable danger to the health, safety, or welfare of the stay, but an agency can apply to the court for a modification or dissolution of the presumptive stay if circumstances change during the pendency of the appeal.^[7]

The Two License Types Mentioned by Florida’s APA

There are two main types of licenses under Florida’s APA: licenses that, once given, do not expire until a triggering event, such as revocation or voluntary relinquishment by the licensee; and licenses that have statutory expiration dates.^[8] For licenses with no expiration date, the APA affords greater protections to the licensee. For example, under F.S. §120.60(4), a license with no expiration date does not expire until a renewal application has been finally acted upon, which would include the finalization of an appeal from agency action withdrawing or denying the renewal application.

For licenses with statutory expiration dates, an existing license is treated separately from a renewal application. Thus, under certain circumstances, an existing license may expire and a licensee may be forced to cease operating while a final decision reached on its renewal application. The APA does not afford an automatic extension of the license while the renewal application is pending, although license-type specific authorizing statutes may do so. As described further below, the health-care provider license that was at issue in Ybor had a statutory expiration date. However, the authorizing statutes for that license automatically extended the expiration date during the pendency of the renewal application.

A Summary of the Health-Care Provider Licensing Process at Issue in Ybor

The Florida Agency for Health Care Administration (AHCA) is charged with licensing and regulating many different types of health-care providers operating in Florida.^[9] The licenses issued by AHCA expire two years after their date of issue, and health-care providers must re-apply to AHCA for a new license for each subsequent two-year period.^[10] Health-care providers are required to submit their licensure renewal application to AHCA prior to the expiration of its existing license; if the application is submitted less than 60 days prior to the expiration date, fines apply but the application will be processed.^[11] The filing of the licensure renewal application tolls the expiration date of the health-care provider’s existing license while the application remains pending before AHCA.^[12]

Upon receiving a licensure renewal application, AHCA has 30 days to review the application and notify the health-care provider applicant in writing of any errors or omissions.^[13] If AHCA notifies the applicant of an error or omission, the applicant has 21 days from the date AHCA provided such notice to correct the problem.^[14] If the applicant fails to correct the problems within this period, then AHCA is statutorily required to deem the application incomplete and withdraw it from further consideration.^[15]

Deeming a health-care provider’s licensure renewal application incomplete and withdrawn from review affects the substantial interests of the applicant. Thus, under the APA, AHCA is required to give the applicant notice of its intent to deem the application incomplete and withdrawn from review and the opportunity to request an administrative hearing to dispute the intended action. If AHCA ultimately enters a final order^[16] deeming the licensure renewal application incomplete and withdrawn from review, then it has the discretion to, in the text of the final order, extend the termination date of the existing license (which, again, was tolled during the pendency of the application) for an additional 30 days “for the sole purpose of allowing the safe and orderly discharge of clients.”^[17]

If AHCA enters a final order denying a licensure renewal application, only the licensure renewal application is affected. The health-care provider may immediately reapply to AHCA for initial licensure, and the application will be granted if it is complete and the applicant completes a satisfactory licensure inspection and is otherwise deemed fit for licensure.

Cases that Laid the Groundwork for Ybor

The question of when the presumptive stay provision of §120.68(3) should apply has been debated for quite some time. The First and Fourth district courts of appeal weighed in on the question in Terrell Oil Company v. Department of Transportation, 541 So. 2d 713 (Fla. 1st DCA 1989), Silver Show, Inc. v. Department of Business and Professional Regulation, 763 So. 2d 348 (Fla. 4th DCA 1998), and Beach Club Adult Center, LLC v. Agency for Health Care Administration, 303 So. 3d 582 (Fla. 1st DCA 2018).

• Terrell Oil — In Terrell Oil, a business that was certified by the Florida Department of Transportation (DOT) as a disadvantaged business enterprise (DBE) applied for the renewal of its certification.^[18] DOT denied the renewal application and notified Terrel Oil of its decision.^[19] Terrell Oil timely requested an administrative hearing, and DOT referred the matter to the Division of Administrative Hearings (DOAH) for further proceedings.^[20] A recommended order and final order were entered denying Terrell Oil’s application, and Terrell Oil timely appealed to the First DCA.^[21] While the appeal was pending, Terrell Oil unsuccessfully moved DOT for a stay. Terrel Oil then moved the First DCA for a stay of DOT’s final order under the presumptive stay provision of F.S. §120.68(3).^[22]

The First DCA in Terrell Oil found the presumptive supersedeas provision of §120.68(3) was inapplicable “because we do not find that the order appealed is one that ‘has the effect of suspending or revoking a license.’” The First DCA reasoned “it is clear under the applicable statute and the rules implementing it that a DBE certification is of finite duration and that the enterprise must submit a complete updated application in order to remain certified”^[23] and found there is “a qualitative difference between the type of order…that denies renewal of a license that has expired or is about to expire and one which suspends or revokes an active license.”^[24]

• Silver Show — In Silver Show, applicants for initial alcoholic beverage licenses appealed a final order denying their license applications and moved the Fourth DCA for a stay pending review so they could continue to operate under their temporary licenses while the appeal progressed.^[25] In moving for a stay, the applicants claimed they were entitled to a stay as a matter of right, citing to §120.68(3).^[26]

The Fourth DCA disagreed that the applicants were entitled to a stay under §120.68(3)’s presumptive supersedeas provision. The Fourth DCA reasoned there was nothing in the applicable statutory scheme that would suggest that a decision on a licensure application had the effect of suspending or revoking a license. The Fourth DCA noted that applications for licensure were addressed in different statutes than licensure disciplinary proceedings.^[27]

Further,

[t]he licensing statutes deal with the question whether a person is qualified to receive the license in the first instance, while the disciplinary statutes are penal in nature and concern whether a license already granted should be suspended or revoked. A licensee may have a valuable property right in an existing license, but a mere applicant for a beverage license has at best the hope of qualifying.

In support, the Fourth DCA pointed out that the Florida Supreme Court had recognized the distinction between licensing and disciplinary proceedings in Department of Banking and Finance v. Osbourne, Stern & Co., 670 So. 2d 932 (Fla. 1996), and the considerable discretion afforded to licensing agencies to determine the fitness of applicants in Astral Liquors, Inc. v. Department of Business Regulation, 463 So. 2d 1130 (Fla. 1985).

• Beach Club — In Beach Club, an adult day care center applied to AHCA to renew its license.^[28] There were problems with the application, so AHCA issued Beach Club an omissions notice. Beach Club did not timely respond to the omissions notice, and so AHCA notified Beach Club of its intent to deem the licensure renewal application incomplete and withdrawn from further consideration.^[29] Beach Club requested an informal administrative hearing to dispute AHCA’s intended action and the case was referred to an informal hearing officer for further proceedings.^[30] Thereafter, Beach Club failed to comply with two of the informal hearing officer’s orders, and the informal hearing officer issued a recommended order of dismissal. In accordance with this recommendation, AHCA rendered a final order dismissing the proceedings and upholding its decision to deem the application incomplete and withdrawn from further review.^[31] However, AHCA’s final order also extended the expiration date of the existing license for 30 days for the safe and orderly discharge of clients.^[32]

Beach Club appealed and sought a stay of AHCA’s final order from the First DCA pursuant to the presumptive supersedeas provision of §120.68(3).^[33] In a published order, the First DCA found Beach Club was not entitled to stay under §120.68(3)’s presumptive supersedeas provision “because the final order does not revoke [Beach Club’s] license. Instead, the final order deemed the application withdrawn.”^[34] The First DCA pointed out that §120.68(3) and Florida Rule of Appellate Procedure 9.190(e)(2)(C) “only apply ‘if the agency decision has the effect of suspending or revoking a license.’” The First DCA cited and relied on the reasoning in Terrell Oil and Silver Show in support of its ruling.^[35]

In Ybor, the Second District Took the Opposite Position

In 2019, Ybor Medical Injury and Accident Clinic, Inc. (Ybor), a licensed health-care clinic, filed an application with AHCA to renew its license. AHCA found the application was incomplete and issued an omissions notice, but Ybor failed to file a timely response. Accordingly, AHCA issued a notice of intent to deem the application incomplete and withdrawn from further consideration.^[36] Ybor timely requested an informal administrative hearing, and the case was referred to an informal hearing officer who issued a recommended order that recommended AHCA enter a final order upholding its decision to deem the license renewal application incomplete and withdraw it from further consideration.^[37] AHCA entered the final order on September 3, 2020, in accordance with this recommendation, and extended the expiration date of Ybor’s existing license for 30 days to allow for the safe and orderly discharge of clients.^[38]

Ybor appealed to the Second DCA and filed an expedited motion for a stay of the final order pursuant to §120.68(3)’s presumptive supersedeas provision. Ybor argued it was entitled to a presumptive stay because the final order forced Ybor “to close its doors just as if its license had been revoked or suspended.”^[39] AHCA responded in opposition.^[40] The Second DCA issued an order granting the stay under §120.68(3)’s presumptive supersedeas provision, and then issued a second published order explaining its reasoning and certifying conflict with the First DCA’s published order in Beach Club.

In the published order, the Second DCA “acknowledge[d] that the order on appeal…does not ‘suspend or revoke’ the Clinic’s license per se,” but “conclude[d] that it does ‘have the effect of suspending or revoking [that] license.”^[41] The Second DCA reasoned:

[Ybor] wants to maintain its license and continue its operations; that is why it submitted a renewal application and contested AHCA’s notice of intent. AHCA’s final order “withdraw[s]” [Ybor]’s renewal application. We view that act as “ha[ving] the effect of,” i.e., producing the same “result” as, a revocation. Alternatively, and to the extent that AHCA argues in response to [Ybor]’s motion that [Ybor] can, after its current license lapses, apply for a new license, the order on appeal can be seen as “ha[ving] the effect of” suspending [Ybor]’s license to operate.^[42]

The Second DCA said if the legislature had intended to limit the availability of a stay to revocations and suspensions, it would have used language more restrictive than “has the effect of”; and

to the extent that the legislature provided an opportunity for a licensee to maintain its license pending appeal in the face of agency action as serious as revocation or suspension of its license, it seems reasonable that the same opportunity would be available when the agency takes some lesser action against the license that, as here, “has the effect of” a suspension or revocation.^[43]

In reaching its decision, the Second DCA attempted to distinguish Terrell Oil and Silver Show. It stated the “qualitative difference” between an order that denies or withdraws a licensure renewal application and one that outright suspends or revokes a license that was observed by the First District Court of Appeal in Terrell Oil “does not necessarily inform whether the former [order] ‘has the effect of’ the latter [order].”^[44] It distinguished Silver Show by observing it had involved an initial licensure application instead of a renewal application, and was, thus, not applicable to the matter at hand.^[45]

The Florida Supreme Court Steps in to Settle the Issue in Ybor

AHCA appealed the Second DCA’s published order in Ybor to the Florida Supreme Court. After jurisdictional briefing, and considering the certified conflict, the Florida Supreme Court accepted jurisdiction in April 2021.^[46] In Agency for Health Care Administration v. Ybor Medical Injury & Accident Clinic, Inc., 334 So. 3d 596 (Fla. 2022), the Florida Supreme Court heard both written and oral argument from the parties, and from the solicitor general, who appeared as amicus curiae. As the solicitor general noted in its amicus brief, the court’s decision in Ybor had the potential to affect not only the 48,000-plus licensees that AHCA regulated, but also other agencies’ licensees as well.^[47]

In a five-page written opinion, the court held that §120.68(3)’s presumptive supersedeas provision was inapplicable to an agency’s decision to administratively withdraw an incomplete renewal license application. After recounting the case history and quoting the relevant portion of §120.68(3), the court focused its analysis on the text of the statute and concluded that, under their dictionary definitions, “suspending” and “revoking” are “actions that temporarily or permanently take away something already granted — in this case, one’s right or privilege to a license.”^[48]

The court next noted that “the label an agency attaches to its decision does not control whether the statute’s presumptive stay provision applies,”^[49] pointing out that the APA, particularly at F.S. §120.60(5)-(6) refers to “agency decisions that annul, withdraw, restrict, or limit a license.” Instead, the appropriate standard, per the court for “[w]hat matters under [§]120.68(3) is that the agency decision be the functional equivalent of a suspension or revocation and that the decision act on an existing license.”^[50]

The court applied this standard to the case at hand to find that AHCA’s administrative withdrawal of an incomplete licensure application does not satisfy the terms of §120.68(3)’s presumptive supersedeas provision. The court reasoned, “[b]y law, Ybor Clinic’s existing license was valid for two years and would expire at that time.” The court noted “that existing license and a renewal license as distinct instruments,” “[d]uring all stages of the renewal process, AHCA considers a facility’s application and fitness for a new license[,]” and “[t]he existing license is not the subject of the renewal license application.”^[51]

The court discounted the position taken by Ybor and the Second DCA that §120.68(3)’s presumptive supersedeas provision should apply because AHCA’s decision affected Ybor’s business in the same way a suspension or revocation action would.^[52] The court noted that, while “[i]t is true that an agency decision to administratively withdraw a renewal license application might have severe consequences for a licensee[,]” “the text of [§]120.68(3) directs our focus to an agency decision’s effect on an existing license.” Since “[a] decision on a renewal license application does not act on an existing license at all,” “it is not reasonable to characterize that decision as one that ‘has the effect of suspending or revoking a license’” for purposes of the presumptive supersedeas provision.

The court noted, commensurate with AHCA’s position, that while §120.68(3)’s presumptive supersedeas provision was not applicable, “a licensee whose renewal application has been administratively withdrawn remains able to seek a discretionary stay from the reviewing court.”^[53] The court quashed the Second DCA’s decision in Ybor and approved the First DCA’s decision in Beach Club, “to the extent the latter decision is consistent with this opinion.”^[54]

Questions that Ybor did not Explicitly Answer

Ybor was focused on the withdrawal of a licensure renewal application. Should denials of licensure renewal applications for the same type of license be treated differently when it comes to the application of the presumptive stay provision? According to the court’s reasoning, a denial, like a withdrawal, does not have any effect on the existing license, which would expire by operation of law regardless of the agency action. Nevertheless, the court did not specifically address denials in its opinion.

Another interesting question the Ybor court raised but did not answer is whether a discretionary stay would give a license applicant the relief it sought, i.e., the extension of its current license. Toward the end of the Florida Supreme Court’s opinion in Ybor, the court said “[a] licensee whose renewal license application has been administratively withdrawn remains able to seek a discretionary stay from the reviewing court.”^[55]

For Ybor, it was too late to seek a discretionary stay when the court rendered its opinion because its current license had long-since expired. But what if Ybor had sought a discretionary stay within the 30-day period between when the final order was entered and when it appealed the final order? If a court had granted a discretionary stay, would Ybor have been allowed to continue operating during the pendency of the appeal? There is no clear answer to the question, and only time will tell if there will be more clarity on this issue in the coming years.

Conclusion

Until recently, there has been some confusion between the district courts of appeal as to whether the presumptive stay provision is applicable to cases involving licenses with statutory expiration dates when an agency decides to withdraw a licensee’s renewal application. The Florida Supreme Court brought clarity to the issue with its recent opinion in the Ybor case. It will be interesting to see how courts treat motions for stay going forward considering their inability to extend the life of a license that has already expired by operation of law.

This column is submitted on behalf of the Administrative Law Section, Stephen C. Emmanuel, chair, and Lyyli Van Whittle, editor.