Opinion
No. 1D20-4
05-19-2021
ABC FINE WINE AND SPIRITS, Florida Independent Spirits Association, and Publix Supermarkets, Appellants, v. DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION, DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO, Walmart Inc., Wal-Mart Stores East, L.P., and Target Corporation, Appellees.
William D. Hall of Dean Mead & Dunbar, Tallahassee, for Appellants. Joseph Yauger Whealdon, III, Chief Legal Counsel for the Department of Business and Professional Regulation, Tallahassee, for Appellee. Elliot H. Scherker, Brigid F. Cech Samole, and Katherine M. Clemente of Greenberg Traurig, P.A., Miami, for Appellees Walmart Inc. and Wal-Mart Stores East, L.P. William N. Spicola of William Spicola PA, Tallahassee, for Appellees Target Corporation and Walmart Inc.
William D. Hall of Dean Mead & Dunbar, Tallahassee, for Appellants.
Joseph Yauger Whealdon, III, Chief Legal Counsel for the Department of Business and Professional Regulation, Tallahassee, for Appellee.
Elliot H. Scherker, Brigid F. Cech Samole, and Katherine M. Clemente of Greenberg Traurig, P.A., Miami, for Appellees Walmart Inc. and Wal-Mart Stores East, L.P.
William N. Spicola of William Spicola PA, Tallahassee, for Appellees Target Corporation and Walmart Inc.
M.K. Thomas, J. Appellants challenge a final order declaring proposed Florida Administrative Code Rule 61A-3.055 (the proposed rule) invalid. The proposed rule attempts to define items "customarily sold in a restaurant" as that term is used in section 565.045, Florida Statutes, for the purpose of issuing Consumption of Premises (COP) liquor licenses. The proposed rule was created after the existing rule was found to be invalid. See Fla. Dep't of Bus. & Prof'l Regulation, Div. of Alcoholic Beverages & Tobacco v. Target Corp. , No. 1D18-5311, 321 So.3d 320 (Fla. 1st DCA May 19, 2021). Appellants intervened in a rule challenge brought by Walmart and Target (Petitioners) in support of the proposed rule. We affirm the Administrative Law Judge's (ALJ) holding that the proposed rule is an invalid exercise of delegated legislative authority for the reasons set forth in Florida Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco v. Walmart, Inc. , No. 1D19-4599, 323 So.3d 786 (Fla. 1st DCA May 19, 2021). In addition to challenging the merits of the ALJ's ruling, Appellants argue the ALJ erred in determining that Florida Independent Spirits Association (FISA), an independent association of alcoholic beverage retailers, lacked standing to intervene in the rule challenge. We agree. However, contrary to Appellant's claim otherwise, we find no error in the ALJ's holding that Petitioners had standing to challenge the proposed rule.
Pursuant to section 565.045, a COP licensee may not sell "anything other than the beverages permitted, home bar and party supplies and equipment (including but not limited to glassware and party-type foods), cigarettes, and what is customarily sold in a restaurant ." § 565.045(2)(a), Fla. Stat. (emphasis added). In both the existing rule and the proposed rule, the Division attempts to provide clarification as to what is considered "customarily sold in a restaurant." The proposed rule provides as follows:
(1) As used in section 565.045, Florida Statutes, items customarily sold in a restaurant shall only include the following:
(a) Food cooked or prepared on the licensed premises; or
(b) Hot or cold beverages; or
(c) Souvenirs bearing the name, logo, trademark, or location of the licensed vendor operating the licensed premises; or
(d) Gift cards or certificates pertaining to the licensed premises.
(2) For the purpose of consumption on premises regulations set forth in section 565.045, Florida Statutes, items customarily sold in a restaurant shall include services or sales authorized in the "Florida Public Lottery Act", section 24.122(4), Florida Statutes.
After Petitioners sought invalidation of the proposed rule, Appellants attempted to intervene in support of the proposed rule. Petitioners challenged Appellants standing to intervene. The ALJ granted the intervention, subject to proof of standing at the final hearing. Ultimately, the ALJ found Publix and ABC Fine Wine & Spirits had standing to intervene as COP license holders. However, he determined FISA lacked associational standing, finding that a substantial number of its members were not affected by the proposed rule and that the evidence did not prove that participating in the proceeding was within the authority of the President or FISA. The ALJ also found that Walmart and Target had standing to challenge the proposed rule as applicants for COP licenses. Appellants now appeal those findings.
Standing is a question of law subject to de novo review. See Office of Ins. Regulation & Fin. Servs. Comm'n v. Secure Enters., LLC , 124 So. 3d 332, 336 (Fla. 1st DCA 2013) (citing Palm Beach Cty. Envtl. Coal. v. Fla. Dep't of Envtl. Prot. , 14 So. 3d 1076, 1077 (Fla. 4th DCA 2009) ). Pursuant to section 120.56(1)(e), Florida Statutes, a substantially affected party may intervene in proceedings. To establish standing under the "substantially affected" test, a party must show: (1) that the rule or policy will result in a real or immediate injury in fact; and (2) that the alleged interest is within the zone of interest to be protected or regulated. Jacoby v. Fla. Bd. of Med. , 917 So. 2d 358, 360 (Fla. 1st DCA 2005). The first prong of the test examines the degree of injury. The second focuses on the nature of injury. Agrico Chemical Co. v. Dep't of Envtl. Prot. , 406 So. 2d 478, 482 (Fla. 2d DCA 1981). To satisfy the sufficiently real and immediate injury in fact element, an injury must not be based on pure speculation or conjecture. Lanoue v. Fla. Dep't of Law Enforcement , 751 So. 2d 94, 97 (Fla. 1st DCA 1999). Associational standing for administrative challenges requires an organization to demonstrate that many of its members may be affected by the rule. NAACP, Inc. v. Fla. Bd. of Regents , 863 So. 2d 294, 299 (Fla. 2003).
Generally, the fact that a party is regulated by a rule "is alone sufficient to establish that their substantial interests will be affected." Coalition of Mental Health Prof. v. Dep't of Prof. Regulation, 546 So. 2d 27, 28 (Fla. 1st DCA 1989) ; see also Televisual Communications, Inc. v. Dep't of Labor & Emp't Sec./Div. of Workers’ Comp. , 667 So. 2d 372 (Fla. 1st DCA 1995) (holding that where a proposed rule has the collateral effect of regulating an industry, representatives of that industry have standing to challenge the proposed rule). Additionally, this Court has held that participation in a rule challenge proceeding is not limited to those parties seeking to intervene on behalf of the petitioner; rather, a party may intervene on behalf of the agency. Fla. Elec. Power Coordinating Grp., Inc. v. Manatee Cty. , 417 So. 2d 752, 752 (Fla. 1st DCA 1982).
Here, the ALJ held that FISA did not have standing because the President of the association did not prove he had the authority to participate in the proceedings on behalf of FISA members or what injuries would be suffered as a result of the proposed rule. We disagree.
First, FISA proved that a "substantial number of its members" are affected by the proposed rule. See NAACP , 863 So. 2d at 298 ; Fla. Home Builders Ass'n v. Dep't of Labor & Emp't Security , 412 So. 2d 351, 353–54 (Fla. 1982). FISA was not seeking to intervene on behalf of ABC as ABC appeared in their own right and clearly had standing to do so. Rather, FISA was seeking to intervene on behalf of their remaining members. The President of FISA testified that the organization has 206 members, including ABC stores. Not including ABC stores, there are only 85 members. The parties stipulated that the 206 FISA members hold a total of 61 COP licenses, and that ABC holds 25 of the 61 COP licenses. Therefore, of FISA's 85 remaining members, 36 hold COP licenses. This equates to 42% of FISA's non-ABC membership holding COP licenses, which qualifies as a "substantial number" of its members. See Fla. Home Builders , 412 So. 2d at 353–54 (noting that a majority of an association's members is not required to establish standing).
FISA also proved that those members that are COP license holders are affected by the proposed rule. Generally, the fact that a party is regulated by the challenged rule is sufficient to establish standing, as it was with ABC stores and Publix. See Coalition of Mental Health Prof., 546 So. 2d at 28. There is no question that those 36 COP license holders would be regulated by the proposed rule. Additionally, the president of FISA opined that any rule that the Division enacted could result in a loss of business. He also opined that FISA members would benefit from having clear guidance from the Division, which the proposed rule would provide. Therefore, FISA established that they would be impacted by the proposed rule.
Lastly, FISA proved that "the rule is within the association's general scope of interest and activity," which is a requirement for associational standing. See Fla. League of Cities, Inc. v. Dep't of Envtl. Regulation , 603 So. 2d 1363, 1366 (Fla. 1st DCA 1992) (citing Home Builders Ass'n , 412 So. 2d at 353–54 ). The parties stipulated that FISA "exists to represent the interest of its members before the Division, in the Legislature, and otherwise." Thus, the proposed rule is within FISA's general scope of interest—to represent its members before the Division. FISA's activity is also clear—to represent alcoholic beverage retailers. Because those members holding a COP license would be regulated under the proposed rule, and because the rule falls within FISA's scope of interest, we find the ALJ erred in concluding FISA lacked standing to intervene. Thus, we reverse that portion of final order on appeal.
Lastly, Appellants argue that Petitioners lost standing when the ALJ entered a narrower ruling than that sought in the petitions. Specifically, Petitioners argued that because they are restaurants, what they sell is what is "customarily sold in a restaurant," and because not all such items are included in the proposed rule, the proposed rule is invalid. Instead of ruling on this objection, the ALJ held that the proposed rule is invalid in part because it does not include food prepared offsite, which Appellants are correct has no impact on the Petitioners’ ability to obtain COP licenses. However, standing in an administrative proceeding is a forward-looking concept and cannot disappear based on the ultimate outcome of the proceeding. See Palm Beach Cty. Envtl. Coal. , 14 So. 3d at 1078. It is sufficient that a petitioner proves that its interest "could reasonably be affected" by the rule, which they did here. See id. The ALJ properly determined the Petitioners’ standing based on the petitions filed, and not on its decision to enter a narrower ruling than what was requested. Therefore, we affirm the ALJ's holding that Petitioners had standing to challenge the proposed rule.
AFFIRMED in part, REVERSED in part.
Lewis, J., concurs; Winokur, J., concurs in part and dissents in part with opinion.
Winokur, J., concurring in part and dissenting in part.
To the extent the majority opinion affirms the ALJ's decision that the proposed rule is an invalid exercise of delegated authority, I dissent for the reasons set forth in my dissent in Fla. Dep't of Bus. & Pro. Regul. v. Walmart Inc. , No. 1D19-4599, 323 So.3d 786 (Fla. 1st DCA May 19, 2021). I concur in all other respects.