The 2016 amendments to the APA: say goodbye to United Wisconsin - and more.

Author:Brown, H. French, IV
Position:Florida's Administrative Procedure Act

During the 2016 session, the Florida Legislature considered a number of bills affecting the Florida Administrative Procedure Act (APA) and the practice of administrative law. Among the bills that passed were 1) House Bill 183, which is a comprehensive APA bill that is similar to a bill that was vetoed last year; 2) House Bill 981, which clarifies the timeframe for an agency's evaluation of a proposed rule's economic impact; 3) House Bills 307 and 1313, which expedite the dispensing of medical marijuana and may also impact pending litigation involving medical marijuana; and 4) House Bill 7099, the annual "tax package," which includes provisions that may impact recent litigation involving tax regulation. Other bills died but may be back in the future, including one that would have created a sunset review process for agency rulemaking authority.

Bills That Passed

* House Bill 183 Allows Rule Challenges Associated with F.S. [section] 120.57 Proceedings. Relating to Administrative Procedures (C.S./C.S./C.S./H.B. 183). After previous attempts, (2) including a veto last year, (3) the legislature passed H.B. 183 sponsored by Representative Janet Adkins. This bill was designed to protect regulated persons from an agency's use of an invalid or unadopted rule in enforcement, licensing, or other [section] 120.57 proceedings. Among other things, the bill creates a new legal defense and allows a collateral rule challenge to such proceedings. The bill also requires agencies to publish a list of rules that, if violated, would constitute minor violations. In addition, the bill expedites administrative hearings on temporary special events permits.

1) New Legal Defense: H.B. 183 permits a person challenging an agency action involving disputed issues of material fact to contemporaneously raise as a defense that the agency's rule was an invalid exercise of delegated legislative authority or that the agency's statement was an unadopted rule. (4) Effectively, the amendment allows a party to bring a rule challenge that can be applied retroactively to the specific case. (5) Having this ability to challenge the validity of an adopted rule in a [section] 120.57 proceeding has the potential to be a powerful remedy. (6)

Similar legislation passed during the 2015 regular session,7 but was vetoed by the governor. That legislation provided that the administrative law judge's conclusions of law regarding a rule challenge defense under [section] 120.57 could never be rejected by an agency in the final order. (8) The governor's veto message stated "the bill has the potential to inflict more harm on an agency's ability to operate in an efficient and accountable manner ... [and] alters the long-standing deference granted to agencies by shifting final action authority to an administrative law judge." (9) Under the 2016 legislation, the conclusions of law associated with a challenge to the validity of an existing rule under [section] 120.57 may be rejected if the agency states with particularity that the conclusions are clearly erroneous.

2) Authorizes Collateral Rule Challenges: Additionally, H.B. 183 allows a person challenging an agency action involving disputed issues of material fact to bring a separate rule challenge under F.S. [section] 120.56(4). This provision of the legislation directly impacts the ruling in United Wisconsin Life Insurance Co. v. Florida Department Insurance Regulation, 831 So. 2d 239, 240 (Fla. 1st DCA 2002). That case started as an enforcement proceeding. While the proceeding was pending, the insurance company brought a separate [section] 120.56(4) action to challenge certain agency statements as nonrule policy. The administrative law judge concluded, and the First District Court of Appeal affirmed, that a petitioner "has no right to pursue a separate, collateral challenge to an alleged nonrule policy where an adequate remedy exists through a [[section]] 120.57 proceeding." H.B. 183 expressly allows a petitioner to bring separate [section][section] 120.56 and 120.57 actions. One potential benefit to bringing a collateral rule challenge pursuant to [section] 120.56 is that the administrative law judge issues a final order (as opposed to a recommended order) in such cases.

The newly created defense combined with the express statement that a petitioner may bring a collateral rule challenge will provide petitioners options to ensure that invalid rules or unpromulgated statements are not used against them in enforcement or licensing cases. When evaluating these options, a petitioner should also consider the availability of an award of reasonable costs and attorneys' fees. If a petitioner successfully brings a collateral rule challenge or argues a defense to a [section] 120.57 action based on a determination that the agency's action was an unadopted rule, reasonable costs and attorneys' fees may be awarded. However, an award of reasonable costs and attorneys' fees is not available for a successful determination regarding an existing rule, under the newly amended [section] 120.57. (10)

3) Minor Violations: H.B. 183 also requires that by July 1, 2017, all agencies must review and publish a list of all rules that the agency has designated as rules that constitute a minor violation under F.S. [section] 120.695, if violated. A violation of a rule is a minor violation if it does not result in economic harm, physical harm, the significant threat of harm, or adversely affect the public health, safety, or welfare. If an agency believes a person violated such a rule, the agency's first response is limited to a notification. The notification must identify the specific rule that is being violated, provide information on how to comply with the rule, and specify a reasonable time for the person to comply with the rule. The notice of noncompliance may not be accompanied by a fine or other disciplinary penalty.

4) Publication: Under F.S. [section] 120.54(7), any person may petition an agency to adopt, amend, or repeal a rule. Within 30 days from receiving such a petition, the agency must initiate rulemaking and hold a hearing to consider public comments or deny the petition. H.B. 183 requires agencies to publish a notice of rule development within 30 days after the initial public hearing. (11) The agency must then publish a notice of proposed rule within 180 days of the notice of rule development, unless the agency files a statement in the Florida Administrative Register (FAR) justifying its reasons for failing to publish the notice. If rulemaking is initiated, the agency may not rely on the unadopted rule unless it publishes a statement in the FAR explaining why rulemaking is neither feasible nor practicable until the conclusion of the rulemaking proceeding. Additionally, agencies are required to publish a list in the FAR of any rules filed for adoption in the previous seven days and a list of all rules currently pending legislative ratification. H.B. 183 states each agency providing email notification services to its licensees or other...

To continue reading