Standing in rule challenges after Office of Insurance Regulation & Financial Services Commission v. Secure Enterprises, LLC.

• Author: Long, Brittany Adams
• Position: Florida

Last fall, the First District Court of Appeal issued an opinion in Office of Insurance Regulation & Financial Services Commission v. Secure Enterprises, LLC, 124 So. 3d 332 (Fla. 1st DCA 2013), that, at least at first glance, appeared to depart from established precedent governing standing (1) in rule challenge proceedings under the Florida Administrative Procedure Act (APA). The court reversed a determination by Administrative Law Judge (ALJ) Robert Meale that a company had standing to challenge a form incorporated into a rule. (2) Following issuance of the opinion, in a subsequent rule challenge, Guardian Interlock, Inc. v. Department of Highway Safety & Motor Vehicles, Case No. 13-3685RX (DOAH Jan. 10, 2014), Judge Meale wrote an 80-page final order analyzing appellate caselaw concerning standing in rule challenges and outlining the courts' sometimes inconsistent application of the standing test.

Judge Meale's final order in Guardian Interlock should be reviewed by every practitioner grappling with standing issues in a rule challenge. He carefully chronicles each appellate court opinion that analyzes standing in a rule challenge proceeding between 1977 and 2013 and demonstrates how the doctrine of standing has evolved. This article summarizes some key themes found in Judge Meale's Guardian Interlock final order and in the cases he addresses and suggests how to approach a standing issue in a rule challenge.

Elements of Standing

The test for standing in a rule challenge appears to be relatively straightforward. F.S. [section] 120.56(1)(a) provides that "[a]ny person substantially affected by a rule or proposed rule may seek an administrative determination of the invalidity of the rule on the ground that the rule is an invalid exercise of delegated legislative authority." In Jacoby v. Florida Board of Medicine, 917 So. 2d 358, 360 (Fla. 1st DCA 2005), (3) the court explained that in order to establish that someone is "substantially affected," the person or entity must demonstrate: "(1) that the rule or policy will result in a real and immediate injury in fact, and (2) that the alleged interest is within the zone of interest to be protected or regulated." The application of this test has proved difficult for the courts. Judge Meale's analysis in Guardian Interlock highlights both some consistencies and some inconsistencies in the case law.

Historical Application of the Standing Test

In the majority of rule challenge cases, especially in recent years, Florida appellate courts have found that the party challenging the rule had standing. The facts and interests of the party vary widely in these cases, and often cases that seem factually similar result in different outcomes, even by the same court. However, some overarching themes have emerged.

Injury in Fact

The first, and most important, element to establish standing in a rule challenge is to prove that the rule or proposed rule will cause immediate and real injury in fact. The person/entity challenging the rule must be the one to suffer the actual injury as explained by the court in All Risk Corp. of Florida v. State, Department of Labor & Employment Security, Division of Workers' Compensation, 413 So. 2d 1200, 1202 (Fla. 1st DCA 1982). There are several categories of cases in which injury in fact is analyzed.

* Rules Subjecting a Person/Entity to a Penalty--In Ward v. Board of Trustees of the Internal Improvement Trust Fund, 651 So. 2d 1236, 1237 (Fla. 4th DCA 1995), the court explained that a sufficient and immediate injury exists when a person or entity will be subject to a penalty by a proposed rule. In Ward, an engineer contended that complying with the rules of the Board of Trustees of the Internal Improvements Trust Fund relating to the construction of docks on aquatic preserves would create unsafe docks, which would subject him to discipline under the engineering licensing statutes. (4) The court agreed that he would be subject to discipline and, thus, was substantially affected by the rule. (5) Similarly, in Lanoue v. Florida Department of Law Enforcement, 751 So. 2d 94, 98 (Fla. 1st DCA 1999), the court found that the party who failed a breathalyzer test could challenge the rules providing specifications for the breathalyzer test because he had been charged with driving under the influence, and if he were to be found guilty, he would be subject to penalties.

* Economic Injury--Before Secure Enterprises, it was generally assumed that economic injury was sufficient to confer standing in a rule challenge case. For example, in Florida Medical Association, Inc. v. Department of Professional Regulation, 426 So. 2d 1112, 1114-15 (Fla. 1st DCA 1983), the Florida Medical Association was found to have standing to challenge a rule promulgated by the Board of Optometry that would allow optometrists to prescribe certain drugs when the statutes in effect at that time permitted only physicians to prescribe drugs. Likewise, in Department of Professional Regulation, Board of Dentistry v. Florida Dental Hygienist Association, Inc., 612 So. 2d 646, 651-52 (Fla. 1st DCA 1993), the court found that the Dental Hygienist Association had standing to challenge a proposed rule of the Board of Dentistry that would permit board approval...