What is a bad faith administrative petition?

• Author: Ansbacher, Sidney F.

How should a court or administrative law judge determine what constitutes a petition brought for an improper purpose?

The First District Court of Appeal's recent decision in Friends of Nassau County, Inc., v. Nassau County, 25 Fla. L. Weekly D342 (Fla. 1st DCA Feb. 2, 2000), revisited a commonly raised but unsettled theme: What constitutes a bad faith or frivolous administrative petition under the Florida Administrative Procedure Act? Particularly, how should a court or administrative law judge determine what constitutes a petition brought for an improper purpose? The Friends majority panel opinion, written by Judge Robert Benton, held that Judge Benton's prior panel opinion in Procacci Commercial Realty, Inc. v. Department of Health and Rehabilitative Services, 690 So. 2d 603 (Fla. 1st DCA 1997), dictates an objective analysis. Conversely, Judge Philip Padovano's dissent in Friends urged a subjective analysis of the bad faith claims in that case. This article examines the extant case law in trying to ascertain whose view might prevail.

Current Relevant Administrative Statutes and Sanctions

The current Florida APA contains two statutes, F.S. [subsections] 120.569(2)(e) and 120.595, which provide for attorneys' fees awards if an administrative filing is "interposed for improper purposes." Additionally, common law precedent discussed below indicates that a collateral civil claim for damages is available in extreme cases. While both statutes list nonexclusive examples of improper purposes, neither section explains the standard for determining an improper purpose.

Case Law

* Friends of Nassau County

In Friends, the Florida First District Court of Appeal squarely faced the issue of how to interpret the APA's sanctions statute at [sections] 120.57(1)(b)5 (now [sections] 120.569(2)(e)), addressing actions brought for an "improper purpose." That statute stated (and in its current version substantially states) that anyone signing a pleading or other filing in an APA matter certifies:

that he or she has read the pleading, motion or other paper and that, to the best of his or her knowledge, information, and belief formed after reasonable inquiry, it is not interposed for any improper purposes, such as to harass or to cause unnecessary delay or for frivolous purpose or needless increase in the cost of litigation. If a pleading, motion, or other paper is signed in violation of these requirements, the hearing officer, upon motion or the officer's own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion or other paper, including a reasonable attorney's fee.

The court heard the appeal by a [sections] 501(c)(3) corporation, its president and sole director, as well as their lawyers, of an administrative law judge's sanctions under the above-noted statute. The appellant corporation had opposed a St. Johns River Water Management District permit in the underlying [sections] 120.57 (now [sections] 120.569) proceeding. The ALJ--and Judge Padovano in dissent--determined that the petitioner, its president, and its lawyers brought the action in bad faith. The majority disagreed and reversed as to the lawyers, agreed as to the petitioner and its president, and remanded to determine appropriate sanctions against the petitioner and its president.

The majority rejected the ALJ's conclusion that sanctions were appropriate under a subjective bad faith theory. The court noted that one of the law firms representing the petitioner also represented the developer of a nearby proposed shopping mall, which the ALJ found would gain an economic advantage over the applicant because of the delays caused by the administrative action...