The expanded availability of declaratory statements in administrative law.

Most practitioners are familiar with the use of declaratory judgments to clarify the rights, status, and other equitable and legal positions of their clients. This statutorily created tool[1] has served as an effective means of settling controversies without the time and expense of traditional litigation. However, fewer may be aware of the availability of a similar tool for use when a client's interests are governed by a state agency. This article compares the use of declaratory judgments to the relief available from the declaratory statement mechanism found at F.S. [sections] 120.565 and notes a recent Florida Supreme Court opinion which will have the effect of broadening that mechanism's use.

The Declaratory Judgment Act was intended to render practical help in ending controversies which have not reached a stage where other legal relief is available.[2] Cases interpreting the act have held that the use of declaratory judgments "should be liberally construed and their boundaries elastic."[3] Declaratory statements are intended to have a similar effect in the administrative arena, when a party's rights are in the hands of a state agency. Thus, courts have held that judicial opinions interpreting declaratory judgments may be used to interpret declaratory statements.[4] However, the requirements and relief available from each of these tools differ.

Circuit and county courts may issue declaratory judgments to resolve the rights of parties to a contract or other writing, or to construe a statute or any regulation or ordinance issued pursuant to a statute.[5] The breadth of such proceedings is expansive.

Declaratory statements were intended to be used even more commonly than declaratory judgments. In 1985, a primary authority on the Administrative Procedure Act, Professor Patricia Dore, suggested that the declaratory statement mechanism was intended to be more widely available than declaratory judgments "and that [their] use not be unduly restricted by artificial access barriers that would frustrate its primary purpose."[6] Nevertheless, the broad use of this tool has been curtailed by judicial interpretations of the law creating the mechanism.

Declaratory statements are available pursuant to F.S. [sections] 120.565. An earlier version of that law provided: "A declaratory statement shall set out the agency's opinion as to the applicability of a specified statutory provision or of any rule or order of the agency as it applies to the petitioner in his particular circumstances only.[7] Courts have long held that this language prohibited the issuance of a declaratory statement when the statement would apply to any individual other than the petitioner.[8] With this restriction, a declaratory statement was only appropriate when it addressed an entirely unique situation. Declaratory statements were inappropriate when they rendered statements of broad applicability interpreting law or policy.[9]

In part, decisions limiting the availability of declaratory statements were based on an interpretation of the declaratory statement's enabling legislation which required opinions to reach only the petitioner in her or his "particular circumstances only." These holdings were also based on the duty of agencies to initiate rulemaking when issuing statements of law or policy with broad applicability.[10] Agencies are charged with the duty of publishing all statements of general applicability in the form of rules. Affected parties then have a forum to challenge such rules pursuant to the APA. By limiting the use of declaratory statements to those occasions when "only" the petitioner's interests would be affected, the courts, and perhaps the legislature, clearly segregated the remedies related to rulemaking from the relief afforded by declaratory statements. However, their actions had the practical effect of severely limiting the use of declaratory statements because almost any such statement could be declared applicable to more than one particular set of circumstances.

In 1996, the Administrative Procedure Act was substantially revised.[11] Among the revisions, the legislature deleted the word "only" from the requirement that a declaratory statement address a petitioner's particular circumstances. At the same time, the legislature created a new limitation on the ability of agencies to initiate rulemaking. Whereas once rules would pass muster if they were "reasonably related" to the legislation which served as their basis,[12] the new law prohibited any rule from regulating more than the "particular powers and duties" set forth in organic legislation.[13]

With this backdrop, the First District Court of Appeal began to chip away at that line of cases which restricted the usefulness of declaratory statements in Chiles v. Department of State, Div. of Elections, 711 So. 2d 151 (Fla. 1st DCA 1998). In Chiles, the Commissioner of Education filed a declaratory statement with the Division of Elections in order to clarify a use of public funds. Arguing that the declaratory statement broadly regulated other candidates for statewide public office, Governor Chiles and Commissioner Milligan appealed the statement.

The court upheld the oft-stated edict that, if a declaratory statement raises an issue which is properly the subject of rulemaking, the agency should decline to issue the statement and initiate rulemaking instead.[14] However, the court clarified that a declaratory statement should not be rejected simply because it may address a subject of interest to more than just the petitioner. The court noted that the declaratory statement provision, [sections] 120.565, includes a requirement that the agency publish notice of its receipt of petitions and issuance of declaratory statements.[15] The court reasoned that such notice is required because the legislature anticipated that declaratory statements would be of interest to others beyond the petitioner.

Only a few weeks later, the Third District Court of Appeal revisited the debate over whether a declaratory statement violated its policy against broad applicability in Investment Corp. of Palm Beach v. Division of Pari-Mutuel Wagering, Dep't of Bus. and Professional Regulation, 714 So. 2d 589 (Fla. 1st DCA 1998). Although recognizing the Chiles decision, the court again found that a declaratory statement must be set aside because it was broadly applicable. However, Judge Cope dissented.

Judge Cope reasoned that the declaratory statement mechanism was intended to be widely available in order to address citizen complaints.[16] Suggesting that this purpose should not be frustrated by "artificial barriers" to access, Judge Cope argued that citizens should have the opportunity to have a clear, binding agency interpretation of how an agency's statements and rules apply to that individual. Additionally, Judge Cope suggested that it was highly debatable as to whether the declaratory statement provision was ever intended to be limited to one petitioner's circumstances, arguing instead that the "particular circumstances" requirement was intended only to make certain that an actual matter in controversy existed. Like the court in Chiles, Judge Cope remarked upon the notice requirement in [sections] 120.565 and concluded that the legislature clearly understood that declaratory statements may have an impact on others regulated by the agency.

The Supreme Court recognized the conflict between Chiles and Investment Corp. and addressed this debate in Florida Dep't of Bus. and Professional Regulation, Div. of Pari-Mutuel Wagering v. Investment Corp. of Palm, Beach, 24 Fla. Law Weekly S520, 1999 WL 1018661 (Fla. 1999). The court sided with the First District and with Judge Cope's well-reasoned dissent.

Declaratory statements are meant to address a pending crisis which is particular to the circumstances. Rules are intended to provide clear guidance in order to avoid potential disputes. However, the court held that "one approach should not and now does not absolutely foreclose the other."[17] In a decision intended to avoid hypertechnical interpretation of [sections] 120.565, the court looked to the plain meaning of the statute and to another First District opinion interpreting the new requirement that rules stem from the "particular" powers and duties of their enabling legislation.[18]

In St. John's River Water Management District v. Consolidated-Tomoka Land Co., 717 So. 2d 72 (Fla. 1st DCA 1998), the First District refused to rule that "particular" powers and duties meant that each such power had to be specifically described in order for a rule to be possible. Instead, the court held that enabling legislation must set forth "particular" duties in the sense that they must be identified and that rules must be limited to that class of powers and duties set forth in the statute.[19]

The Supreme Court approved of this interpretation and held that a similar flexibility should be afforded to state agencies called upon to issue declaratory statements. When interpreting the "particular" circumstances limitation within declaratory statements at [sections] 120.565, the court found that the plain meaning of the law should be given effect without reaching an absurd or ridiculous result.[20] Given the notice requirements imposed upon agencies issuing declaratory statements, an interpretation of the law which limited declaratory statements to those instances where only a single party is affected is a hypertechnical interpretation which would not be adopted by the court.

By so holding, the Florida Supreme Court has sharpened a tool within the array of remedies available under the Administrative Procedure Act. The effect will be greater availability of the relief afforded by declaratory statements and, thereby, greater guidance from agencies.

Another distinction between declaratory judgments and declaratory statements regards the "case or controversy" requirement applied to declaratory judgment actions. In a declaratory judgment suit, the courts have long held that a matter in controversy must be actually present.[21] Because of the similarity between declaratory statements and declaratory judgments, at least one court has found that a similar "case or controversy" requirement applied to declaratory statements.[22] In Couch v. State, 377 So. 2d 32 (Fla. 1st DCA 1979), the First District held that a state agency should refuse to issue a declaratory statement when the same matter was the subject of suit in circuit court because no actual and present need for the declaratory statement was shown.

However, in Federation of Mobile Home Owners of Florida, Inc. v. Department of Business Regulation, 479 So. 2d 252 (Fla. 2d DCA 1985), the Second District suggested that the "case or controversy" requirement should not be strictly applied to declaratory statement actions. When the standing of an association seeking a declaratory statement was challenged, the Second District found that the legislative purpose of the Administrative Procedure Act was to expand access to the activities of agencies and distinguished the ruling in Couch.[23] Other courts have applied an "injury-in-fact" standard to determine whether a petitioner may bring an action for declaratory statement.[24] Such a test would be similar to the "case or controversy" standard, requiring a real and present injury to the petitioner. However, the Florida Supreme Court in Investment Corp. receded from those holdings, suggesting that a relaxed standard should apply based on its interpretation of the "particular circumstances" standard found in the declaratory statement provision, F.S. [sections] 120.565.[25]

The Florida Supreme Court's ruling in Investment Corp. broadly expands the availability of declaratory statements to those who would seek agency interpretation on a question of law or policy. This revitalization of an integral component of the Administrative Procedure Act can only improve the guidance available to parties affected by state agency action.

[1] FLA. STAT. [sections] 86.011 (1990) grants circuit and county courts the jurisdiction to determine rights, status, and other legal or equitable relations in a declaratory judgment action.

[2] Jackson v. Federal Ins. Co., 643 So. 2d 56, 58 (Fla. 4th D.C.A. 1994) (citing Bell v. Associated Independents, Inc., 143 So. 2d 904 (Fla. 2d D.C.A. 1962)); State Dep't of Educ. v. Glasser, 622 So. 2d 1003 (Fla. 2d D.C.A. 1993), rev'd on other grounds, 622 So. 2d 944 (Fla. 1993).

[3] Jackson, 143 So. 2d at 908 (citing Bell; 143 So. 2d at 908); X Corp. v. Y Person, 622 So. 2d 1098 (Fla. 2d D.C.A. 1993).

[4] FLA. STAT. [sections] 120.565; Sutton v. Department of Envtl. Protection, 654 So. 2d 1047 (Fla. 5th D.C.A. 1995); Couch v. State, 377 So. 2d 32, 33 (Fla. 1st D.C.A. 1979).

[5] FLA. STAT. [subsections] 86.011 (1990), 86.021 (1995).

[6] Patricia A. Dore, Access to Florida Administrative Proceedings, 13 FLA. ST. U. L. REV. 965, 1053, cited in Investment Corp. of Palm Beach v. Division of Pari-Mutuel Wagering, Dep't of Business and Professional Regulation, 714 So. 2d 589, 592 (Fla. 1st D.C.A. 1998) (Cope, J., dissenting).

[7] FLA. STAT. [sections] 120.565 (1979).

[8] See, e.g., Mental Health District Board, II-B v. Florida Dep't of Health and Rehabilitative Servs., 425 So. 2d 160, 162 (Fla. 1st D.C.A. 1983).

[9] Price Wise Buying Group v. Nuzum, 343 So. 2d 115 (Fla. 1st D.C.A. 1977).

[10] See Tampa Electric Co. v. Florida Dep't of Community Affairs, 654 So. 2d 998 (Fla. 1st D.C.A. 1995); Florida Optometric Ass'n v. Department of Professional Reg., 567 So. 2d 928, 937 (Fla. 1st D.C.A. 1990).

[11] For an overview of the 1996 revisions, see Jim Rossi, The 1996 Revised Florida Administrative Procedure Act: A Survey of Major Provisions Affecting State Agencies, 24 FLA. ST. U. L. REV. 283 (Winter 1997).

[12] See General Tel. Co. of Fla. v. Florida Pub. Serv. Comm'n, 446 So. 2d 1063, 1067 (Fla. 1984) (quoting Agrico Chem. Co. v. State Dep't of Envtl. Regulation, 365 So. 2d 759 (Fla. Ct. App. 1978), cert. denied, 376 So. 2d 74 (Fla. 1979); Florida Beverage Corp. v. Wynne, 306 So. 2d 200 (Fla. Ct. App. 1975)).

[13] FLA. STAT. [sections] 120.52(8) (Supp. 1996). This requirement has since changed such that rules may only be promulgated to the extent they set forth the "specific" powers and duties of their organic legislation. [sections] 120.52(8) (1999); 1999 Laws of Florida ch. 379 [sections] 1 (C.S.H.B. 107).

[14] Chiles v. Department of State, Div. of Elections, 711 So. 2d 151, 154 (Fla. 1st D.C.A. 1998), citing Florida Optometric Ass ' n v. Department of Professional Regulation, Bd. of Opticianry, 567 So. 2d 928 (Fla. 1st D.C.A. 1990); Agency for Health Care Admin. v. Wingo, 697 So. 2d 1231 (Fla. 1st D.C.A. 1997).

[15] Chiles, 711 So. 2d at 154-55; FLA. STAT. [sections] 120.565(3) (1996).

[16] Investment Corp., 714 So. 2d 589, 593, citing Patricia A. Dore, Access to Florida Administrative Proceedings, 13 FLA. ST. U. L. REV. 965, 1053 (1986).

[17] Florida Dep't of Bus. and Professional Regulation, Div. of Pari-Mutuel Wagering v. Investment Corp. of Palm Beach, 24 Fla. L. Weekly S520, S524 (Fla. 1999); cited with approval in 1000 Friends of Florida, Inc. v. State, Dep't of Community Affairs, 2000 WL 51820 (Fla. 1st D.C.A. 2000) (slip copy).

[18] St. John's River Water Management District v. Consolidated-Tomoka Land Co., 717 So. 2d 72 (Fla. 1st D.C.A. 1998).

[19] Investment Corp., 24 Fla. L. Weekly S520, S522, citing Consolidated-Tomoka, 717 So. 2d at 79.

[20] Investment Corp., 24 Fla. L. Weekly at S524.

[21] Martinez v. Scanlan, 582 So. 2d 1187 (Fla. 1991); Ervin v. Taylor, 66 So. 2d 816 (Fla. 1953).

[22] Couch v. State, 377 So. 2d 32 (Fla. 1st D.C.A. 1979).

[23] Federation of Mobile Home Owners v. Department of Bus. Reg., 479 So. 2d 252 (Fla. 2d D.C.A. 1985), relying upon Florida Home Builder Ass'n v. Department of Labor & Employment Sec., 412 So. 2d 351 (Fla. 1982).

[24] Florida Optometric Ass'n v. Department of Professional Reg., Bd. of Opticianry, 567 So. 2d 928 (Fla 1st D.C.A. 1990), applying the general test for standing in administrative hearings espoused in Agrico Chem Co. v. Department of Envtl. Regulation, 406 So. 2d 478, 482 (Fla. 2d D.C.A. 1981), rev. denied, 415 So. 2d 1359 (Fla. 1982).

[25] Investment Corp., 24 Fla. L. Weekly S520, S524 (Fla. 1999).

Seann M. Frazier is an attorney in the Tallahassee office of Greenberg Traurig, P.A., where he practices administrative law with an emphasis in health care law. He received his J.D. from the University of Florida College of Law and his B.A. from the University of Florida. Mr. Frazier currently serves on the executive committee of The Florida Bar's Administrative Law Section.

This column is submitted on behalf of the Administrative Law Section, Dan R. Stengle, chair, and Robert C. Downie II, editor.