Florida Dept. of Ins. and Treasurer v. Bankers Ins. Co., 96-3206
| Decision Date | 16 April 1997 |
| Docket Number | No. 96-3206,96-3206 |
| Citation | 694 So.2d 70 |
| Parties | 22 Fla. L. Weekly D965 FLORIDA DEPARTMENT OF INSURANCE AND TREASURER, Appellant, v. BANKERS INSURANCE COMPANY, Appellee. |
| Court | Florida District Court of Appeals |
Dennis Silverman and Daniel Y. Sumner of the Division of Legal Services, Tallahassee, for Appellant.
Douglas A. Mang, Wendy Russell Wiener, Connie Jo Pecori, and Robert E. Wolfe, Jr. of Mang Law Firm, P.A., Tallahassee, for Appellee.
The Department of Insurance and Treasurer (Department) issued investigatory subpoenas and a notice and order of investigatory hearing, which it later amended, to Bankers Insurance Company (Bankers) and certain individuals employed directly or indirectly by Bankers. When Bankers and all but one of the individuals refused to appear or honor the subpoenas, the Department filed in circuit court an emergency petition for enforcement of agency investigative hearing orders and subpoenas. The Department now appeals the circuit court's order denying petition for enforcement. We reverse.
In its emergency petition, the Department alleged that Bankers admitted hiring "by and through [a lawyer] ... a private investigator to conduct covert surveillance on a high-level Department employee." The order denying petition for enforcement finds that the "private investigator hired by Bankers illegally tapped the telephone of the employee and has pled guilty to federal wiretapping charges, and is awaiting sentencing on the conviction." Despite another finding that the Department "seeks to investigate whether [Bankers] attempted to alter Department policy by engaging a private investigator to follow a Department employee in order to uncover wrongdoing by the employee," the circuit court denied the Department's petition, effectively terminating the investigation.
In determining the extent of an agency's authority or jurisdiction, we start with the proposition that agencies are creatures of statute. Their legitimate regulatory realm is no more and no less than what the Legislature prescribes by law. Yet it is also true that an agency's own views on where its jurisdictional bournes lie reflect a putative expertise. "[I]nterpretation, made by the agency charged with enforcing a statute, should be accorded great deference unless there is clear error or conflict with the intent of the statute." Associated Mortgage Investors v. Department of Bus. Regulation, 503 So.2d 379, 380 (Fla. 1st DCA), review dismissed, 506 So.2d 1040 (Fla.1987). Where a statute draws an uncertain boundary, judicial deference to an agency's jurisdictional determination is appropriate.
Within its statutorily delimited sphere, an agency with investigative authority has been analogized to a grand jury investigating on reasonable suspicion a possible violation of the criminal law. Such an agency may also investigate to assure itself that no violation of laws it is charged with enforcing has occurred.
The only power that is involved here is the power to get information from those who best can give it and who are most interested in not doing so. Because judicial power is reluctant if not unable to summon evidence until it is shown to be relevant to issues in litigation, it does not follow that an administrative agency charged with seeing that the laws are enforced may not have and exercise powers of original inquiry. It has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function. It is more analogous to the Grand Jury, which does not depend on a case or controversy for power to get evidence but can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it, too, may take steps to inform itself as to whether there is probable violation of the law.
United States v. Morton Salt Co., 338 U.S. 632, 642-43, 70 S.Ct. 357, 364, 94 L.Ed. 401, 410-411 (1950). See also Martin v. Gard, 811 F.Supp. 616, 619 (D.Kan.1993)("In the exercise of their lawful investigatory powers, administrative agencies are conferred 'broad discretion to require the disclosure of information concerning matters within their jurisdiction.' ") (quoting Phillips Petroleum Co. v. Lujan, 951 F.2d 257, 260 (10th Cir.1991)).
Among other statutory provisions, the emergency petition for enforcement of agency investigative hearing orders and subpoenas invoked "sections 624.321 and 624.324, Florida Statutes." These provisions confer investigatory authority on the Department, which
may conduct such investigations of insurance matters, in addition to investigations expressly authorized, as it may deem proper to determine whether any person has violated any provision of this code or to secure information useful in the lawful administration of any such provision.
§ 624.307(3), Fla. Stat. (1995). As part of its investigative authority, the Department has the power to subpoena witnesses and documents.
(1) As to any examination, investigation, or hearing being conducted under this code, the Insurance Commissioner and Treasurer or his designee:
....
(b) Shall have the power to subpoena witnesses, compel their attendance and testimony, and require by subpoena the production of books, papers, records, files, correspondence, documents, or other evidence which is relevant to the inquiry.
§ 624.321, Fla.Stat. (1995). We are not concerned here with the virtually ministerial duty, under section 120.569(2)(i), Florida Statutes (Supp.1996), to enforce administrative subpoenas and other discovery orders judicially, when necessary to further the course of substantial interest proceedings.
In the present case, the Department seeks information about the activities of an entity doing business, under a license the Department has issued, in a manner the Department asserts it has reason to believe runs afoul of laws the Department is charged with enforcing. Bankers argues that the order denying petition for enforcement should be affirmed because "an allegation of an Insurance Code violation is a prerequisite to such an investigation." But this puts the cart before the horse. An administrative agency has many good reasons not to file an administrative complaint alleging a violation of law unless and until it has evidence to support the allegation.
The purpose of an administrative investigation is to uncover facts with an eye towards the potential initiation of an agency adjudication, see U.S. v. Morton Salt Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401 (1950); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614 (1946); cf. Genuine Parts Co. v. FTC, 445 F.2d 1382 (5th Cir.1971) (), or, more generally, for the purpose of facilitating an agency's regulatory goals.
United States Dep't of Labor v. Kast Metals Corp., 744 F.2d 1145, 1150 (5th Cir.1984). A rule that an agency could investigate before filing charges only if it already had all the information it needed to file charges has little to recommend it. The right to discovery once an adjudicatory proceeding begins is clear. § 120.569(2)(d) and (i), Fla.Stat. (Supp.1996). In investigating thoroughly beforehand, an agency acts responsibly. An agency "may take steps to inform itself as to whether there is probable violation of the law," Morton, 338 U.S. at 643, 70 S.Ct. at 364, without first alleging such a violation.
Bankers also argues that the Department seeks to investigate matters outside its regulatory purview and beyond its authority to consider. While we come to a different conclusion about the scope of the Department's authority, it is clear that the question of departmental authority is central to the present inquiry. We approve the Morton Salt formulation under which an...
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