Modern, Inc. v. Florida, Dept. of Transp.

• Decision Date: 14 April 2004
• Docket Number: No. 6:03CV-718-ORL-31DAB.,6:03CV-718-ORL-31DAB.
• Citation: 381 F.Supp.2d 1331
• Parties: MODERN, INC., and First Omni Service Corp., Plaintiffs, v. State of FLORIDA, DEPARTMENT OF TRANSPORTATION, St. Johns River Water Management District, and United States Fish & Wildlife Service, Defendants.
• Court: U.S. District Court — Middle District of Florida

381 F.Supp.2d 1331

MODERN, INC., and First Omni Service Corp., Plaintiffs, v. State of FLORIDA, DEPARTMENT OF TRANSPORTATION, St. Johns River Water Management District, and United States Fish & Wildlife Service, Defendants.

No. 6:03CV-718-ORL-31DAB.

United States District Court, M.D. Florida, Orlando Division.

April 14, 2004.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Allan Paxton Whitehead, Frese, Nash & Hansen, P.A., Melbourne, FL, David Smolker, Matthew C. Lucas, Bricklemyer, Smolker & Bolves, P.A., Tampa, FL, for Plaintiffs.

Walter Kelly, Fla. Dept. of Transportation, Tallahassee, FL, Stanley J. Niego, William H. Congdon, Palatka, FL, Samuel D. Armstrong, Office of the U.S. Attorney, Orlando, FL, for Defendants.

ORDER

PRESNELL, District Judge.

This cause comes before the Court for consideration on the following:

1) the United States Fish and Wildlife Service's ("USFWS") Motion to Dismiss (Doc. 46), and Plaintiffs' Response in Opposition thereto (Doc. 56);

2) St. Johns River Water Management District's ("St.Johns") Motion to Dismiss (Doc. 47) and Memorandum of Law in Support thereof (Doc. 50);

3) State of Florida, Department of Transportation's ("FDOT") Motion to Dismiss (Doc. 51)¹ and Memorandum of Law in Support thereof (Doc. 52) 4) Plaintiffs' Response in Opposition to St. Johns' and FDOT's Motions to Dismiss (Doc. 57);

5) Attachments filed jointly (Doc. 61); and

6) Plaintiffs' Statement of Scope of Issues Relating to the Hacienda Road Mitigation Project (Doc. 64).

The Court heard oral argument on December 19, 2003 (Doc. 65),² following which St. Johns filed a Reply Memorandum (Doc. 67), and Plaintiffs filed a Surreply (Doc. 69).

I. Background

The following facts are gleaned from the Plaintiffs' Third Amended Complaint as well as the administrative and state proceedings' records.

Plaintiffs Modern and Omni own tracts of land ("the Properties") in North Brevard County near the intersection of I-95 and State Road 50. (See Doc. 45, Exs. A-E). The Properties originally were part of an area of land platted in 1911 called the Titusville Fruit and Farm Lands Company Subdivision. (See Doc. 45, Ex. F).³ The land — including Plaintiffs' Properties — was traditionally dry and thus suitable for commercial use and development. Plaintiffs allegedly enjoy express and common law easement rights in certain drainage canals and ditches adjacent to their Properties. Allegedly, these drainage easements are necessary to drain the Properties for continued use as drylands.

In the 1970s, in an effort to protect the now-extinct dusky seaside sparrow, USFWS took title to the St. Johns National Wildlife Refuge ("the Refuge").⁴ Plaintiffs, allege, however, that USFWS took title to the Refuge subject to existing rights of way and the drainage easements.

In the late 1980s, St. Johns permitted FDOT to fill several miles of drainage canals located in and adjacent to the Refuge's rights of way. FDOT filled these drainage canals to create wetlands in mitigation of the effects of the widening of State Road 50. Plaintiffs allege that neither FDOT nor St. Johns gave them notice prior to filling the drainage canals and that St. Johns failed to consider adequately the offsite effects of this mitigation project, known as the Hacienda Road Project.

Over the years, the capacity of the land to hold water decreased. In the mid-1990s, the Properties allegedly began to suffer from flooding due to increased water levels, rendering certain portions of the Properties unusable and/or diminished in use and value. Thinking that the Hacienda Road Project caused the flooding, Plaintiffs notified St. Johns and FDOT of its intent to file suit for restoration of its drainage easements. An agreement allegedly was reached between private property owners (including Plaintiffs), Brevard County, USFWS, St. Johns, and FDOT, under which inter alia Brevard County would clean out a portion of the drainage canal system. In addition, in January 1997, claiming to do "maintenance" work, Modern excavated two ditches on wetlands that allegedly had, in the past, drained the Properties. Modern did not have a permit for this work. Part of the excavation site was on Refuge land and included portions of the Hacienda Road Project. The site is entirely within St. Johns' jurisdiction.

In March 1997, USFWS complained to St. Johns that Modern's excavation was adversely impacting the Refuge's fish and wildlife by draining wetlands. St. Johns investigated the matter, and on May 14, 1997, held a meeting at which it agreed to issue an Emergency Order directing all drainage canal work to cease and ordering blockage of the system to recreate the wetlands. Plaintiffs allege that this meeting was held without notice to them or any other adjacent property owner. St. Johns issued an Emergency Order authorizing installation by USFWS of two earthen weirs within the Refuge's drainage canal system to return the water elevations to their pre-excavation levels and thus prevent further drainage. (See Doc. 50, Attach. B).

On May 29, 1997, Plaintiffs filed petitions for review of the Emergency Order pursuant to Florida Administrative Procedure Act Chapter 120. (Doc. 50, Attach.C). Plaintiffs sought rescission of the Emergency Order, corrective action, and allowance for continued "maintenance" work.

Thereafter, on August 20, 1997, St. Johns filed an administrative complaint and proposed order against Plaintiffs which, if granted, would have required Modern to undo all work on the system and to maintain permanent water levels exceeding a certain elevation. (Doc. 50, Attach.D). A few weeks later, on September 3, 1997, Plaintiffs filed a petition for a formal administrative hearing. (Doc. 50, Attach.E). All of these matters were consolidated into one administrative proceeding in October 1997.

Meanwhile, in May 1997, Plaintiffs filed suit in the Eighteenth Judicial Circuit Court for Brevard County, seeking both an injunction to reopen the drainage ditches and compensation for interference with their drainage easement rights.⁵ On January 9, 1998, however, the Circuit Court dismissed Plaintiffs' complaint for failure to exhaust administrative remedies and for failure to join USFWS as an indispensable party. (Doc. 50, Attach.F). The Circuit Court also ordered that the suit be held in abeyance pending the administrative outcome. (Doc. 69, Ex. A).⁶

The administrative proceedings thus went forward.⁷ The Administrative Law Judge ("ALJ") heard the consolidated cases in June 1998, and on June 15, 1999, issued a thorough and extensive Recommended Order⁸ (Doc. 50, Attach.I) essentially ruling on three main issues: 1) whether the issuance and underpinnings of the Emergency Order were valid; 2) whether Plaintiffs fell within one of three "maintenance" exemptions to the rule requiring a permit for the excavation; and 3) whether St. Johns' use of an agency statement to interpret the term "maintenance" constituted an invalid unadopted rule. Only the first two issues are relevant herein.

In his Recommended Order, the ALJ found that the Titusville Subdivision Plat established a drainage system of intersecting canals. (Id. at ¶ 17). The ALJ also found that Modern's excavation caused an emergency (id. at ¶ 105) and that there was evidence to support issuance of the Emergency Order as well as its legal and factual underpinnings. (Id. at ¶¶ 374-377). Further, the ALJ found that a permit was required for the excavation and that Plaintiffs had failed to obtain this permit. (Id. at ¶ 94). Plaintiffs argued that St. Johns was estopped from enforcing permit requirements against them, but the ALJ found that St. Johns did not make any misrepresentations of material fact on which Plaintiffs could have relied to their detriment. (Id. at ¶¶ 204-212, 399-402). The ALJ also found as a matter of fact that Plaintiffs were not treated disparately from others with regard to the permit rule. (Id. at ¶¶ 213-237).

During the proceedings, St. Johns and FDOT filed a Motion for Protective Order and Motion in Limine seeking to preclude Plaintiffs from discovering and introducing evidence of the Hacienda Road Project and its impact on the contested area. Defendants argued that the administrative body could not determine the nature or extent of easement rights or any other real property issue. Plaintiffs counterargued that such evidence was essential to their ability to exhaust their administrative remedies. The ALJ ultimately denied the Motion in Limine and allowed Plaintiffs to discover and introduce evidence regarding the Hacienda Road Project and its role in alleged flooding problems on their Properties. Ultimately, the ALJ found that the Hacienda Road Project did not decrease floodplain storage capacity and did not cause water to flood Plaintiffs' Properties. (Id. at ¶¶ 76, 77, 86).

To determine whether Plaintiffs' activities fell within the exemptions to the permit rule, Plaintiffs presented the evidence regarding their alleged easements within the drainage system. The ALJ again found that, even assuming arguendo that Plaintiffs had drainage easements, they still were not exempt from statutory permit requirements (id. at ¶ 263) and they had not met the requirements for the exemptions. (Id. at ¶¶ 419-420). Moreover, the ALJ held that St. Johns' and FDOT's regulations did not impair their use of and rights in those easements.⁹ (Id. at ¶¶ 404, 407). In making this decision, the ALJ expressly said he lacked jurisdiction to decide the "existence, nature, and extent of the property rights.... Jurisdiction over such matters lies in the circuit court." (Id. at ¶ 403 (citations omitted); accord id. at ¶ 423).

With regard to the weirs, the ALJ determined that they were reasonably necessary to protect Refuge life and uses (id. at ¶ 135) and that "Neither of the weirs caused flooding or other adverse impacts on nearby property." (Id. at ¶ 138). Rather, the ALJ found that the weirs had the same effect on water...