Manasota-88, Inc. v. Gardinier, Inc.

• Decision Date: 07 January 1986
• Docket Number: Nos. BD-124,MANASOTA-88,BD-296 and BE-22,INC,s. BD-124
• Citation: 11 Fla. L. Weekly 178,481 So.2d 948
• Parties: 11 Fla. L. Weekly 178 , et al., Appellants, v. GARDINIER, INC., the Florida Phosphate Council, Inc., and State of Florida, Department of Environmental Regulation, Appellees., Appellant, v. GARDINIER, INC., and State of Florida, Department of Environmental Regulation, Appellees. Dan LYONS and Manasota-88, Inc., Appellants, v. STATE of Florida, DEPARTMENT OF ENVIRONMENTAL REGULATION, Appellee.
• Court: Florida District Court of Appeals

Page 948

481 So.2d 948

11 Fla. L. Weekly 178

MANASOTA-88, INC., et al., Appellants, v. GARDINIER, INC., the Florida Phosphate Council, Inc., and State of Florida, Department of Environmental Regulation, Appellees.

MANASOTA-88, INC., Appellant, v. GARDINIER, INC., and State of Florida, Department of Environmental Regulation, Appellees.

Dan LYONS and Manasota-88, Inc., Appellants, v. STATE of Florida, DEPARTMENT OF ENVIRONMENTAL REGULATION, Appellee.

Nos. BD-124, BD-296 and BE-22.

District Court of Appeal of Florida,

First District.

Jan. 7, 1986.

Thomas W. Reese, St. Petersburg, for appellants.

Robert L. Rhodes, Jr., Lawrence E. Sellers, Jr. and Lynn H. Townsend of Holland & Knight, Lakeland, for Gardinier, Inc. and Florida Phosphate Council.

Charles G. Stephens and Clare E. Gray, Tallahassee, for Dept. of Environmental Regulation.

MILLS, Judge.

Manasota-88, Inc. (M-88) appeals final administrative orders of the Department of Environmental Regulation (DER) denying its petitions for a hearing pursuant to Section 120.57, Florida Statutes (1983), and for a declaratory statement pursuant to Section 120.565, Florida Statutes (1983). Dan Lyons joins M-88 in an appeal of a final order denying a second petition for declaratory statement. We affirm in part and reverse in part.

Gardinier, Inc. (Gardinier) filed with DER in 1981 an application for an industrial waste permit to construct a phosphogypsum disposal field, specifically seeking a Chapter 17-3 ground water permit and determination of compliance with surface water standards. During the pendency of this application, in response to a request from DER, Gardinier submitted a written report on estimated airborne radioactive emissions from the waste pile which would be created. DER requested and received review of the report from HRS. M-88, a non-profit environmental organization, submitted further data of the emissions, to which DER solicited and received Gardinier's response.

In November 1983, M-88 received formal notice of DER's intent to issue the water pollution permits sought by Gardinier. Section 403.061, Florida Statutes (1983), gives DER the power and duty to "establish a permit system whereby a permit may be required for the operation, construction or expansion of any installation that may be a source of air ... pollution;" Section 403.087(1) states that "no stationary installation which will reasonably be expected to be a source of air ... pollution shall be operated ... without an appropriate and currently valid permit." DER provided M-88 with informal, telephonic notice that Gardinier would not be required to obtain an air pollution permit pursuant to these statutes.

M-88 thereupon filed a petition to intervene in Gardinier's permit proceeding, and requested a Section 120.57 hearing on the air pollution issue. Although the hearing officer held that M-88 had "adequately alleged its standing to request a hearing concerning [DER's] notice of intent to issue an industrial waste permit to Gardinier, Inc.," he struck the air pollution issue on the ground that no "agency action" had been taken on such permits. A recommended order to this effect was issued. M-88 filed exceptions, arguing that DER's decision constituted agency action implementing a nonrule policy, i.e., that no air pollution permits would be required from any company with similar phosphate operations. The final order adopted the recommended order, rejecting the exception on the ground that no agency action implementing the alleged nonrule policy had occurred.

During the pendency of the Section 120.57 request, M-88 sought a declaratory statement from DER pursuant to Section 120.565 as to the applicability of the air pollution permit statutes to the phosphate industry in general; M-88, with Lyons, then sought a second declaratory statement as to their applicability to Gardinier in particular. Both petitions were denied because they sought a declaration as to the effect of the statutes on third parties, contrary to Section 120.565.

The petitions for declaratory statement were correctly denied. Section 120.565 provides for an agency's opinion "as to the applicability of a specified statutory provision ... as it applies to the petitioner in his particular set of circumstances only." Lyons and M-88 sought DER's opinion as to the applicability of statutory provisions to Gardinier, contrary to unambiguous statutory language. We affirm on this issue.

We reverse, however, as to the agency's denial of M-88's request for a Section 120.57 hearing. We do not agree with DER's contention that its action with regard to the air pollution issue was not "agency action" within Section 120.52(2), Florida Statutes (1983). The agency relies on the nature of the original permit proceeding into which M-88 intervened, arguing that its only purpose was to determine Gardinier's entitlement to water pollution permits. However, DER itself, with Gardinier's acquiescence and cooperation, created the air pollution issue in the context of that proceeding by its collection and consideration of numerous reports and other information on radioactive emissions. It then made an affirmative decision, which was communicated to M-88, that Gardinier's proposed operation did not require air pollution permits. We hold that, given the circumstances, this communication is the equivalent of an order, and constitutes agency action as defined by Section 120.52(2).

In its exceptions to the recommended order, M-88 argued that DER's action implemented a nonrule policy against requiring air pollution permits for any operation similar to Gardinier's. To the extent an agency may intend to rely upon or refer to such a policy, it must be established by expert testimony, documentary opinion, or other evidence appropriate to the nature of the issue involved and the agency must expose and elucidate its reasons for its discretionary action. Florida Medical Center v. Department of Health and Rehabilitative Services, 463 So.2d 380 (Fla. 1st DCA 1985), citing E.M. Watkins & Co. v. Board of Regents, 414 So.2d 583, 588 (Fla. 1st DCA 1982). Countervailing evidence and argument is permitted. Mcdonald v. Department of Banking and Finance, 346 So.2d 569, 577 (Fla. 1st DCA 1977).

DER did not deny the existence of the nonrule policy in its final order and does not do so before this court. It relies solely on the lack of "agency action" implementing the policy to deny M-88's entitlement to a hearing. Because we find that agency action did occur, the final order denying M-88's request for hearing is quashed, and the case is remanded for proceedings wherein the agency shall explicate its nonrule policy and permit M-88 to present relevant countervailing evidence and argument.

THOMPSON, J., concurs.

SMITH, J., specially concurs with opinion.

SMITH, Judge, specially concurring.

I agree with the results reached by the majority. DER's order dismissing the petitions for declaratory statement should be affirmed for the reasons stated in the majority opinion. I agree also with the majority's conclusion that DER erred in dismissing Manasota-88's petition for a formal hearing on the issue of whether Gardinier should be ordered to apply for an air pollution permit, but I would base this decision on grounds different from those stated by the majority.

As noted by the majority, the hearing officer's order dismissing Manasota-88's petition for a hearing on the air pollution permit issue agreed that Manasota-88 had adequately alleged its standing to request a hearing on the industrial waste water permit, but not as to an air pollution permit. The reasoning of the hearing officer on this point (approved by DER's final order) appears in her order:

It is, however, concluded that the petitioner has no standing to contest the DER's determination that an air pollution permit for this project is not required. There being no pending "proceeding" or application for air pollution permit, there is likewise no agency action concerning which petitioner is entitled to request a hearing.

The majority's opinion does not squarely address the above-stated basis for the hearing officer's (and DER's) ruling. Instead the majority resolves the controversy by finding that "agency action" occurred, giving Manasota-88 the right to a formal hearing, by reason of DER's actions in requesting, receiving and considering air pollution information from Gardinier, and from Manasota-88, followed by DER's communication, both to Gardinier and to Manasota-88, of its decision not to require an air pollution permit. In deciding the issue on this basis, I believe the majority has perhaps unintentionally enlarged the concept of "agency action" for Section 120.57 hearing purposes beyond the parameters of our prior decisions. At the same time, it appears to me that the majority has also failed to deal with the hearing officer's (and DER's) ruling that air pollution issues cannot be raised by an intervening objector such as Manasota-88 in connection with a water pollution permitting proceeding.

First, as to the "agency action" issue, in the prior appearance of this case, Manasota-88, Inc. v. Department of Environmental Regulation, 441 So.2d 1109 (Fla. 1st DCA 1983), we held that Section 403.412(5), Florida Statutes (1983), does not permit intervention "during the free-form, informal process between the time an application is filed and the notice of proposed agency action is issued." ¹ Id. at 1111. We further explained that, until an agency proposes to issue a license or permit, it cannot be said that the objectionable activity is to be "licensed or permitted," as required for Section 403.412(5) to apply. "Thus, licensing proceedings do not commence for purposes of § 403.412(5) until DER issues its notice of proposed action." Id. at 1111. This decision, in my view, indicates that the agency's determination not to require a permitting or licensing application does not authorize intervention by objecting...