State, Bd. of Trustees of Internal Imp. Trust Fund v. Lost Tree Village Corp.

• Decision Date: 11 June 1992
• Docket Number: 91-1865,Nos. 91-1813,s. 91-1813
• Parties: 17 Fla. L. Weekly D1481 STATE of Florida, BOARD OF TRUSTEES OF the INTERNAL IMPROVEMENT TRUST FUND and Florida Audubon Society, Appellants, v. LOST TREE VILLAGE CORPORATION; Idlewyld Corporation, Inc.; Keewaydin Club Colony Joint Venture, John D. Remington & Bolton S. Drackett, Co-Trustees; Theodore Watrous, Thomas Munz, Warren Noden, Mariner Properties, Inc., and Roger Broderick, Appellees.
• Court: Florida District Court of Appeals

Page 1240

600 So.2d 1240

17 Fla. L. Weekly D1481

STATE of Florida, BOARD OF TRUSTEES OF the INTERNAL

IMPROVEMENT TRUST FUND and Florida Audubon

Society, Appellants, v. LOST TREE VILLAGE CORPORATION; Idlewyld Corporation, Inc.;

Keewaydin Club Colony Joint Venture, John D. Remington &

Bolton S. Drackett, Co-Trustees; Theodore Watrous, Thomas

Munz, Warren Noden, Mariner Properties, Inc., and Roger

Broderick, Appellees.

Nos. 91-1813, 91-1865.

District Court of Appeal of Florida,

First District.

June 11, 1992.

Kenneth J. Plante, Gen. Counsel, Debra W. Schiro, Kelly Brewton, Lanette M. Price, and John W. Costigan, Asst. Gen. Counsels, Dept. of Natural Resources, Tallahassee, for appellants Board of Trustees of Internal Imp. Trust Fund.

Joseph Z. Fleming, Miami, for appellant Florida Audubon Soc.

Robert A. Routa, Tallahassee, for appellee Lost Tree Village Corporation.

Anne Longman and Steve Lewis, of Messer, Vickers, Caparello, Madsen, Lewis, Goldman & Metz, Tallahassee, for appellees Idlewyld Corporation, Inc. and Keewaydin Club Colony Joint Venture.

M. Christopher Bryant, of Oertel, Hoffman, Fernandez & Cole, Tallahassee, for appellees Thomas Munz, Theodore Watrous, Warren Noden, Mariner Properties, Inc., and Roger Broderick.

SHIVERS, Judge.

Appellants seek reversal of a final order of the Division of Administrative Hearings (DOAH) finding a moratorium adopted by the Board of Trustees of the Internal Improvement Fund (Board) is an invalid rule constituting an invalid exercise of delegated legislative authority, due to the failure of the Board to materially follow applicable rulemaking procedures required by section 120.54, Florida Statutes (1989), a section of the Florida Administrative Procedure Act (APA). We reverse the final order of DOAH.

The Board, comprising the Governor and members of the Cabinet, is the agency authorized pursuant to section 253.03(1), Florida Statutes (1989), to acquire, manage, protect and dispose of state-owned lands, including properties owned by the state by right of its sovereignty. Section 253.03(7), Florida Statutes (1989), mandates that the Board "adopt rules and regulations" necessary to carry out its statutory duties. The responsibilities of the Board include the consideration of requests for activities on sovereign submerged lands.

Chapter 18-21, Florida Administrative Code, adopted by the Board in furtherance of the directive to promulgate rules, is titled "Sovereignty Submerged Lands Management." On August 22, 1989, the Board voted to defer consideration of applications for use of sovereign submerged lands adjacent to unbridged, undeveloped, or substantially undeveloped coastal barrier islands. The decision not to act was designated as a temporary "moratorium" on authorizations for use of said sovereign submerged lands, pending adoption of amendments to Rules 18-21.003 and 18-21.004, Florida Administrative Code.

The Board's decision to defer action on applications evolved from several key events. In June 1989, the Board considered whether to approve the recommendation of the Division of State Lands (Division) in favor of granting a five-year sovereign submerged land lease for a 42-slip, private residential docking facility on a coastal island in Levy County. Opponents of this development at Atsena Otie Key argued the lease would adversely impact natural resources. On the basis that it had no clear policy to evaluate such leases, the Board deferred the request and directed the Division to analyze natural resource issues and current protective measures, and to report its findings. The Division's report concluded the Board lacked a policy that would permit consideration of the impacts on coastal islands that could result from the granting of sovereign submerged land leases.

As a result of the report, the Board endorsed, "in concept," a policy precluding the use of sovereign submerged lands in any manner that would facilitate upland development of certain coastal islands and would cause impacts of a destructive nature on the islands. The Division was directed to develop a coastal island policy consisting of comprehensive guidelines to consider current levels of development, existing land authorizations, and impacts on submerged resources. On the basis that it would take time to develop a comprehensive policy of protective management of certain sovereign submerged lands, the Board approved the August 1989 moratorium on consideration of applications.

On December 19, 1989, and again on February 6, 1990, the Board deferred consideration of an interim policy governing the use of sovereign submerged lands adjacent to unbridged coastal islands. The Board extended and modified the temporary moratorium on May 8, 1990, and directed staff to begin rulemaking on a rule to serve as interim policy, pending adoption of a comprehensive policy and a rule governing coastal islands. Certain exceptions to the moratorium were allowed, concerning construction of two-slip private residential docks and repair or maintenance of existing utility lines. On June 12, 1990, the Board approved a draft of proposed rules related to leasing of state-owned lands adjacent to undeveloped coastal islands, and directed staff to notice the rules for adoption, hold a series of public hearings, and report to the Board for final action in September 1990.

On August 10, 1990, the Board officially noticed the proposed amendments to the above stated rules. On August 29, 1990, appellee Lost Tree Village Corporation filed a petition pursuant to section 120.54, Florida Statutes (1989), with the DOAH, challenging the proposed amendments. On September 4, 1990, the petition was consolidated with other similar challenges. Petitioners, including the instant appellees, also challenged the then year-old moratorium, contending it is a nonrule rule constituting an invalid exercise of the Board's delegated legislative authority. On September 17 1990, the Florida Audubon Society (Audubon) sought and eventually was granted intervenor status on behalf of the Board's position. On October 9, 1990, the Board accepted a status report on the proposed rule amendments. Prior to accepting the proposed changes, the Board approved the request of the Governor's Interagency Management Committee for additional time to review the proposals. On December 18, 1990, the Board approved the withdrawal of the original rule concerning development of coastal islands, authorized changes to the proposed rules, and directed staff to notice for adoption the proposals as amended. Additionally, the Board voted to continue the moratorium until adoption of a coastal barrier island rule.

On February 8, 1991, the Board published its notice of withdrawal of the proposed amendments, and several of the petitions were voluntarily dismissed. However, appellees remained parties to the suit to challenge the moratorium. On February 11, 1991, the parties met before the DOAH hearing officer. They agreed the issue was whether the Board's moratorium is a rule within the definition of the APA. In May 1991, DOAH issued the final order holding the moratorium to be an invalid rule, and the Board and Audubon appealed.

Appellants assert that the moratorium is consistent with the Board's duties under the public trust doctrine, that it is permissible under the applicable rules and statutes, and that the findings below suggest the hearing officer ignored McDonald v. Dep't of Banking & Finance, 346 So.2d 569 (Fla. 1st DCA1977), as it pertains to the implementation of a moratorium outside the requirements of the APA. The central issue is whether the hearing officer erred in determining the moratorium is an invalid "rule" and an invalid exercise of delegated legislative authority by the Board.

The Board is an "agency" as that term is defined in section 120.52(1), Florida Statutes (1989). See Decarion v. Martinez, 537 So.2d 1083 (Fla. 1st DCA 1989). Under Article X, section 11, of the Florida Constitution (1970), sovereign submerged lands are held in trust for the people of this state. Private use of those lands is permissible when authorized by law. As an administrative body not specifically created in the Florida Constitution, the Board is a statutory entity and derives only those powers specified therein. See sections 253.02(1) and 120.54(15), Florida Statutes (1989); Grove Isle, Ltd. v. State Dep't of Envir. Reg., 454 So.2d 571 (Fla. 1st DCA 1984). The Board is entrusted with the express constitutional duty to protect the public's interest in sovereign submerged lands. Appellants contend it was in furtherance of its duty that the Board decided in August 1989 not to act on certain applications for private preemptive use of state-owned lands. Although the Board, acting in its proprietary capacity as owner of sovereign submerged lands, "is different from other state agencies acting in a regulatory capacity," Board of Trustees v. Barnett, 533 So.2d 1202, 1206 (Fla. 3d DCA1988), the policies underlying the public trust doctrine do not of themselves exempt the Board from the operation of the APA. See id. at 1205. Likewise, the Board is not free to act arbitrarily in either its proprietary or regulatory role. Id. at 1206.

Our analysis of the issue on appeal begins with the pertinent sections of the APA defining "rule":

(16) "Rule" means each agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the organization, procedure, or practice requirements of an agency and includes any form which imposes any requirement or solicits any information not specifically required by statute or by an existing rule. The term also includes the amendment or repeal of a rule. The term does not include:

(a) Internal management memoranda which do not affect either the private interests of any person or any plan or procedure important to the public and which have no application outside the agency issuing the memorandum.

Section 120.52(16)(a...