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Standing in Florida administrative proceedings.

"Standing" to sue in court is generally defined as a "sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy."(1) Standing in Florida administrative proceedings generally requires a similar stake in the outcome. The more particular nature of that stake, as defined in the Florida Statutes and interpreted in case law, is the subject of this article.(2)

Decisions Which Affect "Substantial Interests," and "Party" Who May Contest

Statutory construction--F.S. [sections] 120.569 ("Decisions which affect substantial interests") is the provision by which an individual or entity, aggrieved by an unfavorable agency determination, may petition for an administrative hearing.(3) Section 120.569(1) states that "[t]he provisions of this section apply in all proceedings in which the substantial interests of a party are determined by an agency, unless the parties are proceeding under [sections] 120.573 or [sections] 120.574." (emphasis added). Thus, in considering whether [sections] 120.569 applies to an individual or entity, allowing them to pursue an administrative hearing, it must first be asked who a "party" is, and what their "substantial interests" may be.

"Party" is defined in F.S. [sections] 120.52(12). The most significant provisions are in [sections] 120.52(12)(a), referring to "[s]pecifically named persons whose substantial interests are being determined in the proceeding," and [sections] 120.52(12)(b), referring to "[a]ny other person who, as a matter of constitutional right, provision of statute, or provision of agency regulation, is entitled to participate in whole or in part in the proceeding, or whose substantial interests will be affected by proposed agency action, and who makes an appearance as a party."(4)

Section 120.52(12)(a)'s reference to "[s]pecifically named persons whose substantial interests are being determined in the proceeding" is, as a practical matter, somewhat redundant of the due process already given by [sections] 120.60 for persons who are directly subject to licensing/permitting and enforcement determinations.(5) These "specifically named" parties would, for example, include the petitioner challenging the denial of an application for licensure, and would include the named respondent in an agency's administrative complaint. However, [sections] 120.52(12)(a) does have independent significance: It can, in a given instance, be used to "join" a co-respondent in the midst of an administrative proceeding,(6) somewhat similarly to adding a defendant in civil proceedings.

Section 120.52(12)(b) may best be analyzed by parsing its significant phrases, beginning with "any other person." Read together with [sections] 120.52(12)(a), [sections] 120.52(12)(b)'s "any other person" is a reference to what we may loosely call "third parties" to the administrative process. These third parties may, but do not always, appear in administrative litigation in the form of a petitioner seeking to intervene in pending proceedings between the agency and a first party. The third party may in fact commence the administrative proceedings, filing a petition alleging that its "substantial interests" have been affected by an agency's determination in favor of a first party, and naming the agency and the first party as co-respondents.(7)

Construing [sections] 120.52(12)(b) further, it might be asked whether a showing of "substantial interests" is always necessary for third-party standing. That is, [sections] 120.52(12)(b) provides for "Any other person who, as a matter of constitutional right, provision of statute, or provision of agency regulation, is entitled to participate in whole or in part in the proceeding, or whose substantial interests will be affected by proposed agency action, and who makes an appearance as a party." (Emphasis added.) The disjunctive "or" in [sections] 120.52(12)(b) implies that "any other person" could conceivably be a "party" (and thus participate in administrative proceedings) if entitled to do so by, for example, a provision of agency regulation, regardless of "substantial interests." However, when the terms of [sections] 120.569(1) are read in pari materia with [sections] 120.52(12)(b), it appears that "any other person" who is a "party" by way of the constitution, a statute, or an agency regulation must nevertheless demonstrate "substantial interests" to participate in administrative proceedings.(8)

Section 120.52(12)(b) uses the term "substantial interests," which is also found in [sections] 120.569(1). "Substantial interests" is not defined in the Administrative Procedure Act. The meaning of "substantial interests" is found in case law, interpreting both [sections] 120.52(12)(b) and, relatedly, [sections] 120.569(1).

Agrico Chemical Company and "Substantial Interests"

Agrico Chemical Company v. DER, 406 So. 2d 478 (Fla. 2d DCA 1981), is the seminal case concerning the meaning of "substantial interests" and standing to challenge decisions which affect them. The case involved two entities, Freeport Sulphur Company and Sulphur Terminal Company, which filed petitions to contest the Department of Environmental Regulation's grant of construction permits to Agrico Chemical Company. Freeport and Sulphur Terminal each had a distinct business interest in the sale and handling of liquid sulphur: Freeport supplied it to Agrico, and Sulphur Terminal handled it at its own Tampa facility. Agrico sought the construction permits to build its own terminal facility in Tampa, in order to handle less expensive, solid sulphur. Neither Freeport nor Sulphur Terminal could be said to be entitled to participate in the administrative determination "as a matter of constitutional right, provision of statute, or provision of agency regulation."(9) This left the Second District Court of Appeal to determine whether either of the petitioners had "substantial interests" which would "be affected by proposed agency action."(10)

In adjudicating the issue, the court stated, "We believe that before one can be considered to have a substantial interest in the outcome of the proceeding he must show 1) that he will suffer injury in fact which is of sufficient immediacy to entitle him to a [sections] 120.57 hearing, and 2) that his substantial injury is of a type or nature which the proceeding is designed to protect." (Emphasis added.).(11) A two-part test was thus established for adjudicating the standing of "any other person" to participate in administrative proceedings.(12) The court then held that, "While petitioners ... were able to show a high degree of potential economic injury, they were wholly unable to show that the nature of the injury was one under the protection of chapter 403 [Florida Statutes, dealing with environmental, not economic, interests]."(13) Freeport and Sulphur Terminal, therefore, had no standing; the agency's order to the contrary was reversed; and the petitions were dismissed.

The interest of a third party ("any other party") in administrative proceedings often will be (though by no means always) economic in nature. On that point, Agrico is sometimes misunderstood by administrative practitioners as denying standing to a petitioner whose interest is "merely economic." The inquiry must be made into whether the petitioner's "substantial interests" (claimed through F.S. [subsections] 120.52(12)(b) and 120.569(1)) are to be found in the "zone of interest" gleaned from the substantive regulatory scheme (statutes external to Ch. 120). A petitioner's standing may indeed be predicated upon economic injury--if the "zone of interest," inferred from the substantive statute (or statutes), accounts for economic injury.(14) Economic injury in itself is insufficient only where the regulatory scheme addresses matters other than competitive economic considerations.(15)

A fair number of post-Agrico standing decisions have been generated by third parties with noneconomic "substantial interests,"(16) or mixed economic and noneconomic interests.(17) In such cases, a close reading of the substantive statute(s) is imperative, in order to discern whether the "substantial interests" claimed by the would-be party are within the "zone of interest."(18) This is especially true where the interest is noneconomic, and appears more "public" in nature.(19)

Certain practical observations should be made concerning the Agrico test. In its application, the test is not limited to the adjudication of petitions to intervene in administrative proceedings.(20) Further, the Agrico test plays a role where the agency attempts, in a given proceeding, to settle with fewer than all of the parties.(21) (The question arises as to whether an agency can settle administrative litigation with a first party, in which a third-party petition to intervene has been merely filed, but not ruled upon.(22)) Finally, Agrico has been invoked, with varied success, by agencies in dismissing first-party petitions for administrative hearings.(23) It is safe to say that the test applies generally, in determining standing under [sections] 120.569.

In analyzing a third party's standing, one must also consider restraints imposed in statutes external to the Administrative Procedure Act. Examples include F.S. [sections] 408.039(5)(c) (certificates of need),(24) and F.S. [sections] 320.642(3)(b) (motor vehicle dealer licenses).(25) The specific provisions of such statutes supersede the general provisions found in Ch. 120.

Administrative Rules and "Any Person Substantially Affected" by Them

F.S. [sections] 120.56 is the statute by which a proposed or existing administrative rule may be challenged. Section 120.56(1) provides that "Any person substantially affected by a rule or a 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." (Emphasis added.) As with [sections] 120.569(1)'s "substantial interests," [sections] 120.56(1)'s "substantially affected" is not defined in the Administrative Procedure Act, and its meaning requires a review of case law.

Department of Offender Rehabilitation v. Jerry, 353 So. 2d 1230 (Fla. 1st DCA 1978), was the first decision to wrestle with the term "substantially affected," following the 1974 amendments to the APA. The petitioner was an inmate who, while incarcerated, committed an unarmed assault, causing him to be placed in disciplinary confinement and potentially costing him "gain time" under Fla. Admin Code Rule 33-3.08. The record of the rule challenge indicated that Jerry had served his disciplinary confinement at the time of his petition challenging Rule 33-3.08; it did not indicate whether Jerry had in fact lost "gain time" by application of the rule.(26) The hearing officer found that Jerry had standing, mentioning, inter alia, "petitioner's interest in loss of gain-time having real substance."(27) However, the First District Court of Appeal reversed, finding in pertinent part that Jerry "failed to demonstrate, either at the time his petition for administrative relief was filed or at the time of hearing, that he was then serving disciplinary confinement or that his existing prison sentence had been subjected to loss of gain-time."(28)

In Jerry, the First District Court of Appeal noted that former [sections] 120.30 (repealed by the 1974 amendments) used the term "affected party," in providing for rule challenges; by contrast, [sections] 120.56 employed the more restrictive term, "substantially affected." With little Florida case law to guide it at the time, the Jerry court looked to federal case law in attempting to define Florida's new standard for challenges to administrative rules. The court held that there must be "sufficient immediacy and reality" to a rule challenger's allegations of prospective injury, in order to show standing.(29) Jerry's "sufficient immediacy and reality" test in turn begs its own interpretation, but is nevertheless routinely cited in post-Jerry cases on rule challenge standing, and remains good law.(30)

In an attempt to make the "sufficient immediacy and reality" test more real, it is useful to categorize the rule challenge standing cases subsequent to Jerry as follows: 1) those where the petitioner's livelihood is not directly affected by the administrative rule in question; and 2) those where the petitioner's livelihood is directly affected, due to the petitioner being a licensee or contract provider of the agency involved, or otherwise having a profession or occupation tied in some manner to the administrative rule. In those rule challenge cases where the petitioner is a trade association, some or all of the association's members may fall into one or the other of the two categories.

When the rule challenge petitioner's livelihood is not directly affected by the administrative rule, the petitioner must be that much more particular in alleging and proving facts required for standing. Jerry itself falls into this category.(31) A more common example, and one involving a trade association, is Board of Optometry v. Society of Ophthalmology, 538 So. 2d 878 (Fla. 1st DCA 1989), in which the Society of Ophthalmology, the Florida Medical Association, and assorted physicians took on Fla. Admin. Code Rule 21Q-10.001, which had been adopted by the Florida Board of Optometry pursuant to F.S. [sections] 463.0055 (1987). Section 463.0055 authorized optometrists licensed under Ch. 463 and duly certified by the board to administer certain topical ocular drugs in the diagnosis and treatment of the eye.(32) The First District Court of Appeal found instructively as follows:

Petitioners, representing or being physicians licensed under chapters 458 or 459, are not subject to regulation or control under chapter 463, are not subject to regulation or control by the rule, and cannot predicate standing on the notion that the application of the challenged rule will prevent or obstruct their practicing ophthalmic medicine. Cf., Professional Firefighters of Florida, Inc. v. DHRS, 396 So. 2d 1194 (Fla. 1st DCA 1981). Whether application of the challenged rule will cause the petitioning physicians, or any physicians represented by the petitioning associations, an injury of sufficient immediacy and reality under the criteria set forth in Jerry is purely a matter of speculation and conjecture.(33) (Emphasis added.)

Board of Optometry v. Society of Opthalmology is also notable for the court's finding that an invalidated administrative rule is not void ab initio, but rather is invalidated only prospectively, under [sections] 120.56(3).(34) Agency action taken upon a rule prior to its invalidity would, therefore, remain of effect. This being the case, it may be asked whether the inmate in Jerry would have had standing even had he demonstrated lost "gain time," or whether any rule-challenge petitioner in this category would have standing based solely upon a showing of past adverse experience under the rule challenged.

Where the rule challenge petitioner's livelihood is directly affected by the administrative rule, it is clear that the petitioner has an easier time demonstrating standing. The proposition has its origins in DHRS v. Alice P., 367 So. 2d 1045 (Fla. 1st DCA 1979).(35)

In Alice P., HRS filed an emergency rule restricting Medicaid funds for elective abortions, following federal legislation proscribing such funds. HRS then embarked upon permanent (nonemergency) rulemaking in the same subject, which was timely challenged by two Medicaid recipients, "Alice P." and "Susan A." A petition to intervene was thereafter filed by Samuel Barr, M.D. By the time of the administrative hearing, neither of the two women was pregnant, and their lack of standing under Jerry was clear. However, Dr. Barr testified that he was the director of an abortion clinic and had held that position for the preceding four and one-half years, that approximately 13 percent of the clinic's abortions in that period were Medicaid-funded, and that since the Medicaid funding was cut off the number of Medicaid-eligible patients patronizing the clinic had decreased significantly.(36) The First District Court of Appeal found Dr. Barr to lack standing only inasmuch as his petition to intervene was not timely filed; otherwise, he was affirmatively found by the court to be a "substantially affected person" and, as such, to meet the standing threshold.(37)

Professional Firefighters of Florida, Inc. v. DHRS, 396 So. 2d 1194 (Fla. 1st DCA 1981), decided by the First District Court of Appeal shortly after Alice P., made clear that the "sufficient immediacy and reality" test would be more easily met where the petitioner's livelihood was affected. In Professional Firefighters, a trade association and two individual, named paramedic members of the association challenged HRS' Rule 10D-66.36, which provided for state certification and licensing of paramedics. Standing was premised generally upon HRS' regulation of paramedics. DOAH granted HRS' motion to dismiss for lack of standing, finding that neither of the two paramedic parties had applied for state certification, or alleged or established that Rule 10D-66.36 would disqualify them from certification.(38) The First District Court of Appeal reversed, finding in pertinent part as follows:

In both Jerry and Alice P., supra, the challengers were not subject to the rule or immediately affected by it at the time suit was filed and were unlikely to be affected in the future. In contrast, in this case, the individual appellants are presently affected by the licensing rules because they currently work in the area to be regulated. When an agency sets up a new licensing or certification requirement for an occupation or profession not previously subject to state-wide regulation or licensing, persons engaged in that occupation or profession have standing to challenge the proposed regulation. This is true regardless of whether submission to certification or licensing is termed "voluntary" or not. There is a clear, direct effect on those concerned individuals being able to continue to earn their livelihood.(39)

The greater deference given to regulated or similarly affected parties concerning standing has been demonstrated many times since Professional Firefighters.(40) A number of these cases has indicated that rule challenge standing requires a lesser showing than that required to challenge agency decisions affecting substantial interests under [sections] 120.569;(41) however, in cases where the rule-challenge petitioner's livelihood is not at issue under the administrative rule, the requirements for standing should be thought of as no less than those under [sections] 120.569.

The peculiar requirements of associational standing deserve a brief mention. The common practice of including at least one individual named member of the trade association, in addition to the association itself, in a rule-challenge petition stems from Florida Department of Education v. Florida Education Association/United, Inc., 378 So. 2d 893 (Fla. 1st DCA 1979). The court there held that a teacher's union was without standing to challenge a disciplinary rule when no individual teacher was a party. The seminal case on association standing is Florida Home Builders Ass'n v. DLES, 412 So. 2d 351, 353 (Fla. 1982), which articulates the general rule that a trade association has standing for a rule challenge so long as "a substantial number of its members, although not necessarily a majority, are `substantially affected' by the challenged rule." Cases since Florida Home Builders have not attempted to be more specific concerning the percentage of an association's members required to be "substantially affected" in order for the association itself to have standing, and it may be inferred that associational standing issues will be taken case-by-case.(42)

Conclusion

Every Florida administrative practitioner must have at least a working knowledge of standing to pursue and maintain Florida administrative proceedings. While standing is (unlike administrative rulemaking) not a politically current topic, it is of considerable interest to agency attorneys (who hope to keep access to administrative proceedings in accord with the purpose of regulatory schemes), and to parties affected by individual agency determinations or by administrative rules.

(1) BLACK'S LAW DICTIONARY (Sixth Edition); citing, Sierra Club v. Morton, 405 U.S. 727 (1972).

(2) "Standing" is a subject technically narrower in scope than "access" to Florida administrative proceedings. An understanding of "access" would begin with [sections] 120.52(2)'s definition of "agency action," and the cases which interpret it. Further "access" may be found in [sections] 120.54, which addresses administrative rulemaking, and [sections] 120.60, which addresses the twofold, related functions of licensing and enforcement.

(3) Formerly [sections] 120.57(1).

(4) There are two other categories given for "party" in [sections] 120.52(12)(c) and (d), which are immaterial for most Florida administrative proceedings and, thus, for this article.

(5) The subject of [sections] 120.60 is, nominally, "Licensing" (the statute's title), but its content is far broader. The key term, "license," is defined by [sections] 120.52(9) to include licenses, permits, and all manner of other indicia of authority conferred by agencies upon regulated parties. Section 120.60 also provides generally for the process due in the event of agency action against a licensee (enforcement).

(6) See Amalgamated Transit Union, Local 1593 v. International Brotherhood of Firemen and Oilers, Local 1220, 497 So. 2d 665 (Fla. 1st D.C.A. 1986).

(7) As in the case of an existing health facility that challenges an intended award of a certificate of need for a similar facility to be located in the same service area. See, e.g., [sections] 408.039(5)(c) and cases thereunder.

(8) See Phibro Resources Corp. v. DER, 579 So. 2d 118 (Fla. 1st D.C.A. 1991), in which the court acted on the assumption that the denied petitioner was a "party" by way of provision of agency regulation, but still analyzed whether and to what extent petitioner's "substantial interests" were affected. On "any other person" being a party by way of agency regulation, see also Gadsden State Bank v. Lewis, 348 So. 2d 343 (Fla. 1st D.C.A. 1977); compare, Agrico Chemical Company v. DER, 406 So. 2d 478 (Fla. 2d D.C.A. 1981).

(9) FLA. STAT. [sections] 120.52(12)(b) (formerly [sections] 120.52(10)(b)).

(10) Id.

(11) Agrico, 406 So. 2d at 482.

(12) Id.

(13) Id.

(14) See, e.g, Florida Medical Center v. DHRS, 484 So. 2d 1292 (Fla. 1st D.C.A. 1986) (economic interests of hospitals could suffice for standing in certificate-of-need proceedings, where statutes required HRS to determine impact of proposed project upon "like and existing health care services" in same service area).

(15) City of Sunrise v. South Florida Water Management District, 615 So. 2d 746 (Fla. 4th D.C.A. 1993) (held, competitive economic considerations do not fall within the "zone of protection" that the district was authorized to consider under FLA. STAT. Ch. 373).

(16) See, e.g., Kruer v. Board of Trustees of the Internal Improvement Trust Fund, 647 So. 2d 129 (Fla. 1st D.C.A. 1994); Friends of the Everglades v. Board of Trustees of the Internal Improvement Trust Fund, 595 So. 2d 186 (Fla. 1st D.C.A. 1992).

(17) See, e.g., Edgewater Beach Owners Association, Inc. v. Board of County Commissioners, 645 So. 2d 541 (Fla. 1st D.C.A. 1994); Royal Palm Square Association v. Sevco Land Corporation, 623 So. 2d 533 (Fla. 2d D.C.A. 1993); Town of Palm Beach v. Dept. of Natural Resources, 577 So. 2d 1383 (Fla. 4th D.C.A. 1991); see also Florida Optometric Association v. DPR, 567 So. 2d 928 (Fla. 1st D.C.A. 1990).

(18) Witness the exercise undertaken by the court in Edgewater Beach Owners Association.

(19) Friends of the Everglades v. Board of Trustees of the Internal Improvement Trust Fund, 595 So. 2d 186 (Fla. 1st D.C.A. 1992).

(20) The third party may in fact commence the administrative proceedings, as noted in the text.

(21) See Florida Medical Center v. DHRS, 484 So. 2d 1292 (Fla. 1st D.C.A. 1986; see also Phibro Resources Corp. v. DER, 579 So. 2d 118 (Fla. 1st D.C.A. 1991). It should be specifically noted that the Phibro court was not persuaded by DER's arguments as to the "speculative" nature of appellant's regulatory liability, and that any future liability could be appropriately addressed at a later time. Judge Barfield was sympathetic in dissent, complaining that, "The effect of the majority opinion is to confer a veto right on any objecting party." 579 So. 2d at 125.

(22) This question is not answered by Florida Medical Center, or Phibro Resources Corp. In administrative practice, there can be an order unconditionally granting intervention (within DOAH's recommended order); an interlocutory order granting intervention contingent upon the intervenor demonstrating standing at hearing (a common DOAH practice); or a mere petition to intervene, not ruled upon at the time of the agency's stipulation for settlement with the first-party. The argument can be made that, having timely filed a facially sufficient petition to intervene, the intervenor-petitioner must be given an opportunity to prove standing, and cannot be "cut out" of proceedings by settlement with the first party prior to a ruling on the petition to intervene.

(28) See, e.g., Metsch v. University of Florida, 550 So. 2d 1149 (Fla. 3d D.C.A. 1989); compare, Baker County Medical Services, 700 So. 2d 404 (Fla. 1st D.C.A. 1997).

(24) See Public Health Trust of Miami-Dade County v. AHCA, 751 So. 2d 112 (Fla. 3d D.C.A. 2000).

(25) See Braman Cadillac, Inc. v. Dept. of Highway Safety and Motor Vehicles, 584 So. 2d 1047 (Fla. 1st D.C.A. 1991).

(26) Jerry, 353 So. 2d at 1232.

(27) Id.

(28) Id. at 1236.

(29) Id.

(30) Jerry was partially disapproved by the Florida Supreme Court in Florida Home Builders Association v. DLES, 412 So. 2d 351 (Fla. 1982), but not in a manner pertinent to the "sufficient immediacy and reality test."

(31) In a similar vein, see also Dept. of Corrections v. Van Poyck, 610 So. 2d 1333 (Fla. 1st D.C.A. 1993).

(32) Board of Optometry v. Society of Opthalmology, 538 So. 2d at 879.

(33) Id. at 881. For a similar result, see, Florida Board of Optometry v. Florida Board of Medicine, 616 So. 2d 581 (Fla. 1st D.C.A. 1993).)

(34) Board of Optometry v. Society of Opthalmology, 538 So. 2d at 889.

(35) See also DPR v. Sherman College of Straight Chiropractic, 682 So. 2d 559, 561 (Fla. 1st D.C.A. 1996), citing, Alice P.

(36) Alice P., 367 So. 2d at 1052.

(37) Id. at 1054, n.2.

(38) Professional Firefighters, 396 So. 2d at 1195.

(39) Id. at 1196.

(40) See, e.g., Reiff v. Northeast Florida State Hospital, 710 So. 2d 1030 (Fla. 1st D.C.A. 1998); Cole Vision Corporation v. DBPR, 688 So. 2d 404 (Fla. 1st D.C.A. 1997); DPR v. Sherman College of Straight Chiropractic, 682 So. 2d 559 (Fla. 1st D.C.A. 1996); Ward v. Board of Trustees of the Internal Improvement Trust Fund, 651 So. 2d 1236 (Fla. 4th D.C.A. 1995); DPR v. Florida Dental Hygienist Association, Inc., 612 So. 2d 646 (Fla. 1st D.C.A. 1993).

(41) Ward v. Board of Trustees of the Internal Improvement Trust Fund, 651 So. 2d 1236 (Fla. 4th D.C.A. 1995); DPR v. Florida Dental Hygienist Association, Inc., 612 So. 2d 646 (Fla. 1st D.C.A. 1993).

(42) See, e.g., Florida League of Cities, Inc. v. DER, 603 So. 2d 1363 (Fla. 1st D.C.A. 1992).

Richard M. Ellis is a senior attorney with the Department of Insurance. He was formerly a senior attorney with the Agency for Health Care Administration, and is the author of "Access to Emergency Services and Care in Florida," published in the January 1998 Florida Bar Journal. He received his B.A. from the University of Florida in 1983 and his J.D. from New York Law School in 1989.
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Author:Ellis, Richard M.
Publication:Florida Bar Journal
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Date:Jan 1, 2001
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