SW Fla. Water Mgmt. Dist. v. Save the Manatee Club, Inc., 1D99-4819.

• Decision Date: 01 December 2000
• Docket Number: No. 1D99-4819.,1D99-4819.
• Citation: 773 So.2d 594
• Parties: SOUTHWEST FLORIDA WATER MANAGEMENT DISTRICT, Appellant, v. SAVE THE MANATEE CLUB, INC., and South Shores Properties Partners, Ltd., Appellees.
• Court: Florida District Court of Appeals

773 So.2d 594

SOUTHWEST FLORIDA WATER MANAGEMENT DISTRICT, Appellant, v. SAVE THE MANATEE CLUB, INC., and South Shores Properties Partners, Ltd., Appellees.

No. 1D99-4819.

District Court of Appeal of Florida, First District.

December 1, 2000.

William S. Bilenky, Interim General Counsel; Karen E. West, Senior Attorney; Anthony J. Mutchler, Assistant General Counsel, Southwest Florida Water Management District, Brooksville, for Appellant.

Robert Goodwin, Maitland and Steven A. Medina of Steven A. Medina, P.A., Ft. Walton Beach, for Appellee Save the Manatee Club, Inc.

Frank E. Matthews and Eric T. Olsen of Hopping, Green, Sams & Smith, P.A., Tallahassee, for Appellee South Shores Property Partners, Ltd.

Kathryn L. Mennella, Palatka, for Amicus Curiae St. Johns River Water Management District.

Teri L. Donaldson, General Counsel and Robert G. Gough, Administrative Law Counsel, Tallahassee, for Amicus Curiae Florida Department of Environmental Protection.

Mary Ann Stiles and Rayford H. Taylor of Stiles, Taylor & Grace, P.A., Tallahassee, for Amicus Curiae Associated Industries of Florida, Inc.

Roy C. Young of Young, Van Assenderp, Varandoe & Anderson, P.A., Tallahassee, for Amicus Curiae The Florida Chamber of Commerce.

PADOVANO, J.

The Southwest Florida Water Management District appeals a final order declaring portions of rule 40D-4.051, Florida Administrative Code, invalid. The challenged sections of the rule purport to create certain exemptions from the environmental permitting requirements that otherwise apply to land developments within the District. We conclude that the sections of the rule at issue are an invalid exercise of legislative authority because they do not implement or interpret a specific power granted by the applicable enabling statute. Therefore, we affirm.

South Shores Partners, Ltd., applied to the District for a permit to develop a 720-acre tract of land in Southwest Hillsborough County. The property has an existing canal system that is adjacent to Tampa Bay but is separated from the Bay by an earthen berm. As a part of the project, South Shores proposed to excavate a portion of the land to build a connecting waterway between the canal system and the Bay. The Save the Manatee Club feared that this waterway would cause an increase in power boat traffic into the Bay and that the boat traffic would endanger the manatee and its habitat.

The impact a proposed development will have on wildlife is one of the factors the District must consider in determining whether to issue an environmental resource permit. However, South Shores took the position that it was not required to obtain an environmental resource permit to go forward with the proposed development. Instead, South Shores maintained that it was entitled to proceed with only a standard general permit for minor surface water management systems. Potential harm to wildlife is not among the criteria for issuing a standard general permit.

In support of its claim that the project requires only a general permit, South Shores relied on rule 40D-4.051, Florida Administrative Code. Sections (3), (5), and (6) of this rule grant exemptions from the environmental resource permitting requirements for various kinds of developments approved before October 1, 1984. The District agreed that South Shores was entitled to an exemption based on one or more of these grandfather provisions in the rule. In its conceptual permit, the District stated that it would not address the potential impact the project might have on the wetlands or on the fish and wildlife habitats.

The Save the Manatee Club filed a petition with the Division of Administrative Hearings on September 17, 1999, to invalidate the material parts of rule 40D-4.051. Among other points made in the petition, the Club argued that the grandfather provisions in the rule were invalid because the enabling statute, section 373.414(9), Florida Statutes, does not authorize exemptions from the permitting requirements based solely on prior governmental approval.

South Shores intervened, and the case proceeded to a formal hearing. On December 9, 1999, after the parties had filed their proposed findings and conclusions, the administrative law judge entered a final order declaring sections (3), (5), and (6) of rule 40D-4.051 invalid. The judge concluded that the exemptions in these sections of the rule were invalid because they do not implement or interpret any specific power granted by the applicable enabling statute. The District filed a timely appeal to this court, and South Shores has adopted the District's position in the appeal.

Judicial review of final administrative orders is authorized by section 120.68(1), Florida Statutes. The standard of review that applies in a given case depends on the nature of the issue adjudicated. A decision that rests on a finding of fact must be affirmed on appeal if the finding is supported by competent substantial evidence. See § 120.68(7)(b), Fla. Stat. (1999); De Groot v. Sheffield, 95 So.2d 912 (Fla.1957). Likewise, a discretionary decision must be affirmed on appeal if the agency has not exceeded the scope of its discretionary authority. See § 120.68(7)(e), Fla. Stat. (1999). In contrast to these restrictive standards, the appellate courts are free to disagree with an agency on a point of law. Section 120.68(7)(d) provides in material part that the court may "set aside agency action" when it finds that the agency has "erroneously interpreted a provision of law." See Metropolitan Dade County v. Department of Envtl. Protection, 714 So.2d 512 (Fla. 3d DCA 1998); Schrimsher v. School Bd. of Palm Beach County, 694 So.2d 856 (Fla. 4th DCA 1997).

In the present case, the administrative law judge examined the rule in light of the enabling statute and determined that it was an invalid exercise of legislative power. He arrived at this conclusion by interpreting the 1999 version of section 120.52(8), the statute that defines and limits an agency's rulemaking authority. The adjudicatory process did not involve the resolution of a factual dispute or the exercise of discretion. Consequently, we are not required to defer to the administrative law judge. Because the case involves a pure issue of law, we review the order by the de novo standard of review.

An affected party may challenge an administrative rule on the ground that it is "an invalid exercise of delegated legislative authority." This phrase is defined in section 120.52(8), Florida Statutes as an "action that goes beyond the powers, functions, and duties delegated by the Legislature." Section 120.52(8) then lists seven circumstances in which a rule is an invalid exercise of delegated legislative authority:

(1) The agency has materially failed to follow the applicable rulemaking procedures or requirements;

(2) The agency has exceeded its grant of rulemaking authority;

(3) The rule enlarges, modifies, or contravenes the specific provision of law implemented;

(4) The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency;

(5) The rule is arbitrary or capricious;

(6) The rule is not supported by competent substantial evidence;

(7) The rule imposes regulatory costs on the regulated person, county or city which could be reduced by the adoption of less costly alternatives that substantially accomplish the statutory objectives.

In addition to the seven enumerated grounds for challenging a rule, section 120.52(8) provides a set of general standards to be used in determining the validity of a rule in all cases. These standards are contained in the closing paragraph of the statute.

The disposition of this case turns on the proper application of the 1999 revision of the closing paragraph, but, to put the issue in the proper context, we must first discuss the previous version of the statute and the applicable case law. In 1996, the closing paragraph of section 120.52(8) stated:

A grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. An agency may adopt only rules that implement, interpret, or make specific the particular powers and duties granted by the enabling statute. No agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious, nor shall an agency have the authority to implement statutory provisions setting forth general legislative intent or policy. Statutory language granting rulemaking authority or generally describing powers and functions of an agency shall be construed to extend no further than the particular powers and duties conferred by the same statute. (emphasis added)

In St. Johns River Water Management District v. Consolidated-Tomoka Land Co., 717 So.2d 72 (Fla. 1st DCA 1998), we interpreted the phrase "particular powers and duties" to mean that the legislative authority for a rule must be identified in the applicable enabling statute. In summary of our decision on this point, we concluded that "[a] rule is a valid exercise of delegated legislative authority if it regulates a matter directly within the class of powers and duties identified in the statute to be implemented." Id. at 80.

After our decision in Consolidated-Tomoka, the Legislature changed the general standards set out in the closing paragraph of section 120.52(8), Florida Statutes. As revised in 1999, the closing paragraph reads:

A grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. An agency may adopt only rules that implement or interpret the specific powers and duties granted by the enabling statute. No agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious or is within the

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