COASTAL PETROLEUM V. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION AND BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND (Lease 224A)

– On November 15, 2002, Leon County Circuit Judge J. Ralph Smith rejected Coastal Petroleum Company’s inverse condemnation claim concerning an oil and gas lease in the Gulf of Mexico. The alleged taking concerned 400,000 acres of sovereign submerged lands leased from the Board of Trustees of the Internal Improvement Trust Fund to Coastal in 1947. The lease was later amended, limited and modified by a 1976 Memorandum of Settlement between the parties. Paragraph six of the 1976 Agreement requires that Coastal secure “permits from all appropriate state environmental protection agencies in compliance with the then existing laws and regulations, prior to any drilling or mining.” Therefore, Coastal’s right to drill is a conditional right. Coastal applied for and in 1998 the Department denied a permit to drill in one location within the 400,000 acres.

Judge Smith considered the factors from Graham v. Estuary Properties, 399 So.2d 1374 (Fla. 1981) to determine whether Coastal had a right to recover from the state. Because Coastal had no reasonable expectation that it could drill without a permit or that the state could not deny the permit, the Court found that there was no diminution in value of Lease 224A. Additionally, the permit denial did not curtail any reasonable investment backed expectations that Coastal had of drilling. The Court was also persuaded by the fact that there was no evidence to support the presence of drillable oil or gas in the area of the permit application. Coastal has appealed this decision to the First DCA.

The lease area held by Coastal is in two tracts each beginning about six miles from the Florida coastline. Lease 224A covers sovereign submerged land stretching from Franklin County in the eastern panhandle to Pasco County near Tampa. A takings claim concerning the second tract, lease 224B, covering sovereign submerged land located between Tampa and Naples, is still pending in Leon County Circuit Court.

CHARLOTTE COUNTY, FLORIDA, V. IMC-PHOSPHATES COMPANY; FLORIDA DEPARTMENT OFENVIRONMENTAL PROTECTION; MANASOTA-88, INC. ET. AL (1st District. Case No. 1D02-1366. Opinion filed August 22, 2002. Cite as 824 So.2d 298).

After a four-week hearing, an Administrative Law Judge (ALJ) recommended that an environmental resource permit be issued allowing IMC-Phosphates to conduct phosphate mining activities. In this opinion, the First DCA granted a writ of prohibition sought by Charlotte County, one of the parties that challenged the permit, requiring Secretary Struhs to recuse himself from considering the exceptions to the Recommended Order and writing the Final Order. Charlotte County’s claim was based on a statement given by Secretary Struhs the day the ALJ issued his Recommended Order. The statement suggested that the public should be comforted that an impartial arbiter has affirmed the Department’s decision. Additionally, the Department pledged to continue an internal review of the phosphate mining process in accordance with the ALJ’s order.

Section 120.665, Florida Statutes, provides for the disqualification of an agency head for bias, prejudice, or interest. Because Charlotte County offered a facially sufficient claim of bias or prejudice, the Court ruled that the Motion should be granted. The Court relied on Department of Agriculture v. Broward County, 810 So. 2d 1056, 1058 (Fla. 1st DCA 2002) and asked whether the facts alleged would prompt a reasonably prudent person to fear that they will not obtain a fair and impartial hearing. The Court was particularly concerned about the timing of the Secretary’s statement. Judge Charles Kahn, who dissented, felt the majority stripped DEP’s Secretary of his “duty and obligation to serve as the agency head in review of the recommended order issued by an ALJ in a regulatory matter.” There is no precedent in Florida case law for the issuance of this writ of prohibition. Judge Kahn went on to state that he would deny the dramatic remedy because the majority has superimposed the standard for disqualification of a judge (including an administrative law judge) upon the distinct statutory standard that controls disqualification of an agency head. Judge Kahn also felt that even under the standards applied to judges in cases where judges are accused of preliminary comment on the merits of a case, the present facts would not meet the disqualification standard.

EVERGLADES PHOSPHORUS CRITERION RULE MAKING

- Phosphorus criterion for the Everglades Protection Area - The Environmental Regulation Commission (ERC) held a public meeting on December 3 & 4, 2002, at the Capitol to continue the rule adoption hearing on proposed phosphorus criterion for the Everglades Protection Area, Section 62-302.540, Florida Administrative Code, as required by Section 73.4592(4)(d), Florida Statutes. Future hearing continuations are expected to be held during ERC meetings on January 23-24, 2003, February 26-27, 2003, and March 26-27, 2003. There is also a Technical Workshop scheduled on January 17, 2003, which will be moderated by a neutral, scientific moderator.

WASTE RULE WORKSHOPS

The following waste rule workshops were held in December:

• Contaminant Cleanup Target Levels, 62-777, F.A.C. and a discussion of an arsenic bio-availability adjustment factor December 17, 2002, in Tallahassee.
   

• Hazardous Waste, 62-730, F.A.C. is December 9, 2002, in Tallahassee.
   

• Storage Tanks, 62-761, F.A.C. is December 11, 2002, in Tallahassee.
  
  For more information please see DEP’s website at http://www.dep.state.fl.us/waste.