COLUMNS

           Florida Caselaw Update

    T. Kent Wetherell, II, Gabriel Nieto, and Robert A. Manning

Property owners' association does not have standing to appeal a DRI development order under section 380.07(2), F.S. Grand Dunes, Ltd. v. Walton County, 23 Fla. L. Weekly D1228 (Fla. 1st DCA, May 12, 1998).

Edgewater Beach Owners Association (EBOA) appealed a DRI development order to the Florida Land and Water Advisory Commission (FLWAC) pursuant to section 380.07(2), F.S. FLWAC entered a final order upholding EBOA's challenge over a contrary recommendation of an administrative law judge. The developer appealed.

The 1st DCA reversed the final order and remanded the case to FLWAC with directions to dismiss EBOA's appeal for lack of standing. The court held that section 380.07(2), F.S., allows only the owner, developer or Department of Community Affairs to appeal a DRI development order to FLWAC. EBOA does not fall within one of those categories and, therefore, had no standing to appeal the development order. The court disregarded the parties' stipulation that EBOA had standing to appeal the development order, and held that "[a] stipulation to jurisdiction over the subject matter where none exists is ineffectual."

Basin-specific permitting standards established by the St. Johns River Water Management District are within the "class of powers" granted to the districts under Chapter 373, F.S., and do not exceed the district's rulemaking authority under the 1996 Administrative Procedure Act. St. Johns River Water Management District v. Consolidated-Tomoka Land Co., 23 Fla. L. Weekly D1787 (Fla. 1st DCA July 29, 1998).

In February, 1997, the St. Johns River Water Management District (SJRWMD) proposed rules to establish more stringent permitting criteria for development within the hydrologic basins encompassing the Tomoka River and Spruce Creek in Volusia County. The proposed rules established more stringent standards for aquifer recharge, floodplain storage and stormwater management as part of the environmental resource permit (ERP) within the proposed basins. The proposed rules also established an upland riparian habitat protection zone along the two water courses. The proposed rules were challenged by affected property owners and were invalidated by an administrative law judge as exceeding the SJRWMD's rulemaking authority. SJRWMD appealed the order invalidating the proposed rules.

The 1st DCA reversed the ALJ and upheld the proposed rules. The case provides the first interpretation of the new rulemaking standard adopted as part of the 1996 Administrative Procedure Act reform. The court broadly interpreted the requirement that an agency may only adopt rules to implement the "particular powers and duties" granted by the Legislature. The court held that the test under the new rulemaking standard is whether the proposed rule is within the "class of powers" granted to the agency by the Legislature. Applying this test to the SJRWMD's proposed rules, the court held that the proposed rules were within the broad "class of powers" granted to water management districts by the Legislature in Chapter 373, F.S.

National Oceanic and Atmospheric Administration charts which delineate the Florida coastline based upon a low-tide elevation establish the landward extent of "nearshore or inshore Florida waters" for purposes of implementing the constitutional limitation on marine net fishing. Darbie v. Florida, 23 Fla. L. Weekly D1252 (Fla. 3d DCA May 20, 1998).

Darbie was charged with violating the marine net fishing limitations in the Florida Constitution and implementing statutes. He filed a motion to dismiss the charge, conceding that he was using a prohibited net but arguing that he was not using the net "in nearshore or inshore Florida waters." The Constitution defines that phrase to mean in the Atlantic Ocean within one mile of the coastline or in the Gulf of Mexico within 3 miles of the coastline.

At the time of the alleged violation, Darbie was fishing in the Gulf of Mexico approximately 6 miles seaward of the nearest continually dry land mass, East Bahia Honda Key. However, the State argued that Darbie was within 3 miles of Horseshoe Bank which is above water at low-tide and met the definition of "coastline" even though it was submerged at high-tide.

The trial court denied the motion to dismiss. The Third DCA affirmed. The court first noted that the definition of a State's coastline is determined by Federal law. Federal law defines the coastline as the line of ordinary low water. Moreover, the National Oceanic and Atmospheric Administration (NOAA), the Federal agency charged with mapping the coastline of the United States in the course of its duty of preparing navigation charts, has defined the coastline in the relevant area based upon the location of Horseshoe Bank.

Ineligibility to participate in the Florida Drycleaning Contamination Cleanup Program because of a "willful violation of local law ... regulating the operation of drycleaning facilities" requires proof of an intentional and purposeful violation. Metropolitan Dade County v. Department of Environmental Protection, 23 Fla. L. Weekly D1393 (Fla. 3d DCA June 10, 1998).

The Department of Environmental Protection (DEP) determined that Sekoff Investments, Inc., was eligible to participate in the Florida Drycleaning Contamination Cleanup Program (Program). Dade County challenged this determination based upon Sekoff's alleged failure to remedy the contamination from its property in accordance with notices of violation (NOVs) issued by the County. The County argued that Sekoff's failure to comply with the NOVs constituted a "willful violation of local law ...regulating the operation of dry-cleaning facilities" thereby rendering Sekoff ineligible for the Program. DEP rejected the County's argument, concluding that the provision requires a showing of an intentional and purposeful violation of local laws. The 3rd DCA affirmed. The court concluded that the facts stipulated by the parties not only demonstrated no "willful violation" but, to the contrary, demonstrated that Sekoff acted immediately on the County's NOVs. The Court also rejected the County's argument that sites with existing contamination were ineligible to participate in the program as contrary to the plain language and legislative intent of the statutes creating the Program. Finally, the court noted that DEP's interpretation of "willful violation" is consistent with a 1998 amendment to the statutes governing the Program.

Ownership rights granted under the Butler Act to a party that made improvements to submerged lands are limited to the area upon which permanent structures were erected. No title vests for dredged areas surrounding such structures. City of West Palm Beach v. Board of Trustees of the Internal Improvement Trust Fund, 23 Fla. L. Weekly (FLA. 4th DCA, June 10, 1998).

The City of West Palm Beach brought a quiet title action against the Trustees, claiming fee simple ownership of 26 acres of submerged lands in the Palm Harbor Marina. This marina was built by the city in 1949 and consisted of four concrete piers, a dredged boat basin surrounding the piers, and a dredged channel to the intercoastal waterway. Under the Butler Act, a riparian owner that erected permanent improvements on submerged lands was granted fee simple title to the improved area. When that Act was repealed, such owners' rights to submerged lands were grandfathered. All parties agreed that the Butler Act was applicable to the determination of ownership of the lands at issue. However, the Trustees argued that the Butler Act only vested the city with title to the "footprint" of the marina. In essence, the Trustees argued that the city owned the land underneath the piers, but had no right to the dredged boat basin or channel.

Previously, in Internal Improvement Trust Fund v. Key West Coach Harbor, Inc., 683 So.2d 144 (Fla. 3d DCA 1996), the Third DCA held that dredging of land adjacent to a marina was sufficient to vest title to the dredged areas under the Butler Act. Similarly, Jacksonville Shipyards v. Department of Natural Resources, 466 So.2d 389 (Fla. 2d DCA 1985) held that title to the dredged submerged land surrounding various structures erected on submerged lands vested to a riparian owner under the Butler Act. The Fourth DCA departed from these holdings and announced a policy of strictly construing the Butler Act in favor of the Trustees. Applying this strict-construction policy, the Court held that, for title to pass, the Butler Act required, at a minimum, erection of a permanent structure on the specific submerged lands at issue; no title vests as a result of mere dredging of the area surrounding such structures. The Court upheld a trial court's determination that title to the dredged areas surrounding the marina piers did not vest in the city.

There is no right to reimbursement from the Inland Petroleum Trust Fund for financing costs or general contractors' markups. Agencies may promulgate rules that apply retroactively, if those rules are interpretations of previous rules. Environmental Trust v. Department of Environmental Protection, 23 Fla. L. Weekly D1344 (Fla. 1st DCA, June 3, 998).

The ET&SEI challenged DEP's denial of reimbursement from the Inland Petroleum Trust Fund for certain expenses. The ET&SEI performed several environmental remediation projects for which reimbursement was sought from the fund. These projects were financed by a factoring arrangement whereby funding was advanced on a discounted basis. Invoices for the full cost of the work were then submitted to DEP for reimbursement. DEP developed and applied a non-rule policy of denying payment of the difference between the invoice cost and the amount advanced by the factoring company, characterizing this difference as "interest," for which reimbursement is unavailable. It also applied a similar policy to deny payment of general contractors' markups. DEP's policies, in effect, limited payment to the costs paid to subcontractors and then only to the extent of the time-discounted value advanced by a financing company. The ET&SEI challenged DEP's application of these policies. The ALJ upheld DEP's denial of reimbursement for these financing costs in a recommended order that was subsequently adopted by the agency. The ALJ also dismissed related proceedings brought under section 120.535, Florida Statutes, for a determination that DEP's policies operated as an unadopted rule, due to DEP's initiation of rulemaking proceedings to promulgate these policies as rules.

When DEP promulgated its factoring and markup policies as rules, ET&SEI initiated rule challenge proceedings resulting in another ALJ invalidating DEP's factoring and markup rules. The ALJ reasoned that these rules had no prospective effect because the legislature had abolished the reimbursement program, and could not be applied retroactively because the statutory scheme created a vested right to reimbursement. DEP appealed that order; this appeal was consolidated with the earlier appeals filed by ET&SEI in relation to the previously discussed section 120.57 and section 120.535 proceedings.

The First DCA upheld DEP's non-rule policy based denial of reimbursement, holding that there is no statutory entitlement to payment of financing costs or contractor's markups and that DEP's application of incipient policy was justified by existing rules and statutes.

Regarding DEP's rulemaking, the Court held that DEP's factoring and markup rules could be applied retroactively because they restated a settled interpretation of certain existing rules. The Court supported this position, and distinguished the well-established principle that Florida administrative rules have only prospective effect, by citing several federal APA cases allowing retroactive application of rules that interpret previously promulgated rules. This holding has the potential to allow agencies to freely promulgate retroactive rules, whenever they can claim that such rules merely codify prior interpretive policies based on existing rules.

Gabriel E. Nieto is an Associate with Hopping Green Sams & Smith in Tallahassee practicing in the areas of environmental, land use and administrative law. He received his J.D., with honors, from the University of Florida College of Law.