The First DCA recently issued an opinion dealing with the interesting of issue of agency rulemaking.  The case is MB Doral, LLC v. Department of Business and Professional Regulation, Division of Alcoholic Beverages and Tobacco.  The order on appeal was a final administrative order, appealable under section 120.68(1), Florida Statutes.

MB Doral operates a bar in Miami-Dade County, and caters alcoholic beverages at events throughout Florida.  As part of MB Doral’s operation, it holds a liquor license issued by the Division.  The liquor license allows MB Doral to store its alcohol inventory in select locations, which include off-premises locations.  § 562.03, Fla. Stat.  If a liquor licensee stores alcohol off-premises, then the Division must approve an off-premises storage permit.

The problem arose when MB Doral sought approval from the Division to store alcohol outside Miami-Dade County.  The Division denied MB Doral’s request, relying on Florida Administrative Rule 61A-4.020.  The Rule, at the time, required that alcohol be stored in the same county as the licensee’s parent place of business.  For MB Doral, the Rule thus limited storage to Miami-Dade County.

MB Doral responded by filing a petition under section 120.56(3), Florida Statutes, alleging the Rule was an invalid exercise of delegated legislative authority.  MB Doral argued the Rule was invalid because the Division exceeded its grant of rulemaking authority and the Rule enlarged the law implemented.  The petition was filed with DOAH.

In DOAH, the Administrative Law Judge sided with the Division, concluding that section 562.03 gave the Division authority to restrict the location where alcohol is stored.  MB Doral appealed the final order to the First DCA.  The First DCA sided with MB Doral, and reversed the final order.  To reach its holding, the First DCA analyzed two issues:  agency rulemaking authority and rule enlargement of the law implemented.

Rulemaking authority is the “statutory language that explicitly authorizes . . . an agency” to adopt a rule.  § 120.52(17), Fla. Stat.  A statute that only generally authorizes an agency to adopt rules or generally describes the powers of an agency, is typically insufficient authority for a rule.  MB Doral, 295 So. 3d at 853-54.  General rulemaking authority, by itself, is typically insufficient to support a rule because rulemaking “must be based on a specific grant of authority delegated by the Legislature.”  MB Doral, 295 So. 3d at 854.  The Rule cited section 561.11, Florida Statutes, as its rulemaking authority.  Section 561.11 is a general grant of rulemaking authority, which, as held by the First DCA, is insufficient to support the Rule’s storage requirement.

A rule enlarges the law implemented when it contains requirements unauthorized by the law.  MB Doral, 295 So. 3d at 854-55.  The Rule cited several sections, including section 562.03, Florida Statutes, for its law implemented.  The sections cited as law implemented did not authorize the Division to limit storage based on the parent’s place of business.  The First DCA thus concluded the Rule enlarged the law implemented.  Because the Division exceeded its authority and the Rule enlarged the law implemented, the final order was reversed.

MB Doral is a good reminder that, if an agency has acted against you or your business, then it is important to research the administrative rule relied on by the agency.  If the statutes cited in the rule for its rulemaking authority do not authorize the rule; or the statutes cited in the rule for its law implemented do not authorize the rule; then you should consider filing a rule challenge to protect your interests.

Jonathan Taylor is an associate attorney with The Law Offices of Moffa, Sutton, & Donnini, P.A.  Mr. Taylor concentrates in the areas of Florida tax appeals and general administrative appeals.  Mr. Taylor also volunteers with Guardian ad Litem to handle appellate matters.  Mr. Taylor can be reached at 954-234-2884 or jonathantaylor@floridasalestax.com.

Posted in Administrative Appeals, Administrative Law