March 5, 1997

Rulemaking Reforms and Nonrule Policies: A Catch-22 for State Agencies

Lawrence E. Sellers
“Catch-22?” Yossarian was stunned. “What the hell does Catch-22 got to do with it?”

“Catch-22 . . . says you’ve always got to do what your commanding officer tells you to do.”

“But the Twenty-seventh Air Force says I can go home with forty missions.”

“But they don’t say you have to go home. And regulations do say you have to obey every order. That’s the catch. Even if the colonel were disobeying a Twenty-seventh Air Force order by making you fly more missions, you’d still have to fly them, or you’d be guilty of disobeying an order of his. And then Twenty-seventh Air Force would really jump on you.”

“That’s some catch, that Catch-22,” [Yossarian] observed.

“It’s the best there is,” Doc Daneeka agreed.[1]

From an agency perspective, the 1996 amendments to Florida’s Administrative Procedure Act (APA) must seem somewhat like “Catch-22.” On one hand, agencies’ rulemaking authority has been significantly restricted;[2] it is easier for affected parties to challenge proposed rules;[3] agencies are liable for attorneys’ fees and costs if their proposed rules are held invalid;[4] and agencies remain under the Governor’s mandate to reduce their rules by 50 percent.[5] On the other hand, the rulemaking mandate in former F.S. §120.535 is retained,[6] and the ability of agencies to apply nonrule policy on a case-by-case basis has been narrowed.[7]

This article focuses on these amendments and other provisions of the revised APA that are intended to increase agency accountability in the exercise of delegated legislative authority.


The political climate surrounding the 1996 APA amendments helps to explain the arguably mixed policy signals described above. Put simply, the Governor and the legislature wanted less bureaucracy and more accountability from state agencies. The revisions discussed in this article are infused with these different, but interrelated, policies.

As a means to eliminate agency bureaucracy, the Governor called for the repeal of F.S. §120.535, which he blamed for the dramatic increase in agency rules since 1991. The legislature and the regulated community, however, objected to the repeal of F.S. §120.535, claiming that it would result in the return of “phantom government” and, therefore, would reduce agency accountability in the implementation of legislative policy.

Enhancing agency accountability was the focus of many of the rulemaking reforms in the 1996 legislation supported by the business and regulated communities. For example, the new F.S. §120.536 was based, in part, on the testimony received by legislative committees during the past three sessions describing various agency abuses in the exercise of delegated legislative authority. The regulated community also called for reforms to the rulemaking process. These reforms are designed to reduce bureaucracy in the rulemaking process and to help agencies make better rules by encouraging agencies to provide early and meaningful opportunities for public participation and by requiring agencies to evaluate the economic impacts of the proposed rule and to consider requested lower cost alternatives.

Rulemaking Reform

Many of the rulemaking reforms in the 1996 legislation were modeled after rulemaking procedures already employed by some of the more prolific rulemaking agencies to ensure that these changes do not unduly discourage rulemaking or upset the balance between efficiency and accountability in the rulemaking process.

Agencies Must Publish Notice of Rule Development
The 1996 legislation makes several changes that are designed to further encourage informed public participation in the rulemaking process, particularly during the early stages. One change requires agencies to provide advance notice of the development of proposed rules by publishing a “notice of rule development” in the Florida Administrative Weekly.[8]

The “notice of rule development” is designed to facilitate early public participation. The notice must describe the subject area to be addressed. It must include a short explanation of the purpose and effect of the rule development and cite the specific legal authority for rule development. The notice of rule development thus provides the public with considerable information at an early stage, and it affords interested persons an opportunity to learn more about the proposal and to inform the agency of relevant matters while the agency is still developing its proposed rule.

Agencies May Be Required to Hold Public Workshops
Public workshops provide agencies with an opportunity to explore alternatives with interested persons and gather necessary information in an informal setting. Agencies have long been authorized to conduct public workshops.[9] The 1996 legislation recognizes the benefits of providing an early opportunity for public participation by requiring the agency to hold public workshops if requested in writing by any affected person, unless the agency head explains in writing why a workshop is unnecessary.[10] The legislation also requires that, when a workshop or public hearing is held, the agency must ensure that the persons responsible for preparing the proposed rule are available to explain the agency’s proposal and to respond to questions or comments regarding the rule being developed.[11]

• Agencies May Choose to Use Negotiated Rulemaking
Some agencies routinely make use of variously constituted advisory committees, working groups, or other forms of negotiated rulemaking to generate a consensus among interested parties prior to promulgating a proposed rule. These agencies have found that negotiated rulemaking often results in faster rulemaking, greater consensus among interested parties, and less litigation.

The 1996 legislation formally authorizes agencies to use negotiated rulemaking in developing and adopting rules, and the legislation encourages agencies to utilize negotiated rulemaking when rules are complex or controversial.[12] “Negotiated rulemaking” uses a committee of designated representatives to draft a mutually acceptable proposed rule.[13] An agency that intends to utilize this specific negotiated rule- making process must publish notice of the representative groups that will be invited to participate in the process. Other persons may apply to participate. All meetings of the negotiating committee must be noticed and open to the public. The negotiating committee must be chaired by a neutral facilitator or mediator.

• Notice of Proposed Rule Must Include Additional Information
Once an agency settles on its proposed rule, the agency publishes notice of its intended action. The notice includes a short, plain explanation of the purpose and effect of the proposed action, the full text of the proposed rule or amendment, and a summary thereof. In another effort to enhance public participation in the rulemaking process, the 1996 legislation requires this notice to include certain additional information. The notice must include a summary of the agency’s statement of the estimated regulatory costs, if one has been prepared.[14] The notice also must include a statement that any person who wishes to provide the agency with information regarding the statement of estimated regulatory costs, or to provide any proposal for a lower cost regulatory alternative, must do so in writing within 21 days of the notice.[15] Finally, the notice must include a description of the procedure for requesting a public hearing on a proposed rule.

• Agencies Must Choose Lower Cost Alternative
Since 1992, agencies engaged in rulemaking have been required to evaluate alternative approaches to any regulatory objective.[16] To the extent allowed by law, agencies also have been required to choose the alternative that imposes the lowest net cost to society or to provide a statement of the reasons for rejecting that alternative in favor of the proposed rule. However, there has been no sanction for an agency’s failure to comply with the requirement, so it was often ignored.

Accordingly, the 1996 legislation seeks to put some teeth into this requirement by requiring the agency to consider a good faith written proposal for a lower cost regulatory alternative to the proposal that substantially accomplishes the objectives of the law being implemented.[17] Such a proposal must be submitted by a substantially affected person within 21 days of publication of the notice of proposed rulemaking. The proposal may include the alternative of not adopting any rule, so long as the proposal explains how the lower costs and objectives of the law will be achieved by not adopting any rule.

The submission of the lower cost regulatory alternative triggers a requirement that the agency prepare a statement of estimated regulatory costs (SERC) or revise any previously prepared SERC.[18] The agency then must adopt the proposed alternative or give a statement of its reasons for rejecting the alternative in favor of the proposed rule.[19]

• New Statement of Estimated Regulatory Costs
Administrative rules often impose significant regulatory burdens on affected persons. For this reason, the APA has long required agencies to prepare economic impact statements under certain circumstances.[20] The quality and utility of these economic impact statements have varied greatly, no doubt in part because agencies often lacked or failed to provide adequate resources to prepare meaningful analyses of the economic impacts of proposed rules.

The 1996 legislation replaces the old “economic impact statement” with the new SERC.[21] Agencies are encouraged to prepare a statement in appropriate cases,[22] and they must prepare a statement if a substantially affected person submits a good faith written proposal for a lower cost regulatory alternative to a proposed rule.[23] The 1996 legislation also seeks to make the new SERC more meaningful by narrowing the scope of the required economic analysis. For example, the new SERC requires an analysis of specific “transactional costs” likely to be incurred by those required to comply with the requirements of the proposed rule.

• New SERCs Are Subject to Legal Challenge
The 1996 legislation also seeks to make it easier for affected persons to enforce the requirement to prepare the new SERC. The legislation provides that the failure of the agency to prepare or revise a SERC as required is a material failure to follow the applicable rulemaking requirements of the APA and is, therefore, grounds for determining the related proposed or adopted rule to be invalid.[24] This provision is intended to overrule legislatively earlier court decisions that limited the effectiveness of the economic impact statement requirement by requiring only substantial compliance, absent a showing of prejudice by an affected person.[25]

• Agencies Must Consider Impact on Small Counties and Small Cities
Agencies already are required to consider the impact of a proposed rule on small businesses.[26] The 1996 legislation requires agencies also to consider the impact of the proposed rule on small counties and small cities.[27] Whenever possible, agencies are required to tier a proposed rule to reduce disproportionate impacts on these small entities and to avoid regulating those that do not contribute significantly to the problem the rule is designed to regulate.

• New Public Hearing Requirements
After the agency publishes notice of the proposed rule, the agency may schedule a public hearing for the purpose of giving affected persons an opportunity to present evidence and argument. If requested by any affected person, the agency must schedule a public hearing.[28] The legislature recognized the benefits of using the required public hearing to explain the agency’s proposal, to respond to questions or comments about the proposal, and to discuss changes to the proposal that would make it more acceptable to affected persons. If a public hearing is held, the agency must ensure that the persons responsible for preparing the proposed rule are available to explain the agency’s proposal and to respond to questions or comments regarding the rule being developed.[29]

• Agencies Required to Publish Adopted Changes to Proposed Rules

Agencies always have been authorized to make certain changes to a proposed rule before filing the final rule for adoption[30] and they often did so, typically as the result of comments at a public hearing or in response to written comments. However, agencies were not expressly required to publish notice of these changes. Rather, agencies were only required to give notice to any person who requested it in writing or at the public hearing.[31] The 1996 legislation requires agencies to publish notice of these changes in the Florida Administrative Weekly.[32] This new requirement is particularly significant since affected persons also will be given a new opportunity to challenge these changes before they become effective.

New and Revised Remedies for Challenging Agency Rules

In addition to improving the rulemaking process, the 1996 legislation also seeks to enhance agency accountability by upgrading the “impressive arsenal of varied and abundant remedies for administrative error”[33] provided by the APA.

Additional Time to Challenge Proposed Rules. Under prior law, administrative challenges to proposed rules had to be filed within 21 days after the proposed rule was published.[34] The 1996 legislation adds three new “windows” for filing these challenges: 1) within 20 days of preparation of a SERC; 2) within 10 days after the final public hearing is held on the proposed rule; and 3) within 21 days after publication of a notice of change in the proposed rule.[35] The rationale for the establishment of two of these new “windows” is briefly described below.

Within 10 Days After the Public Hearing. Administrative agencies regularly make changes to a proposed rule as a result of comments received after the publication of the proposed rule, such as comments submitted at the public hearing. In many cases, these changes address objections that would form the basis for a challenge to a proposed rule. Often, the agency formally agrees to adopt these changes at the public hearing, which is held after the expiration of the existing 21-day time period for filing a challenge to a proposed rule. In an effort to minimize unnecessary challenges to proposed rules, the 1996 legislation extends the time for filing challenges to proposed rules until 10 days after conclusion of the public hearing on the proposed rule.[36]

Within 20 Days After Publication of Change in Proposed Rule. An administrative agency may adopt a rule that is different from the proposed rule. As a result, there often are instances in which an administrative agency has approved a rule that includes provisions that were not included in the proposed rule and, therefore, could not have been subject to an administrative challenge prior to adoption.[37] The 1996 legislation addresses this issue by requiring the agency to publish notice of any change in the proposed rule and by extending the time for filing challenges to a proposed rule until 20 days after publication of this notice.[38]

• “Leveling the Playing Field” in Challenges to Proposed Rules. The opportunity provided by the APA to challenge a proposed rule before the rule becomes effective is unique among state administrative procedure acts.[39] However, there was a perception that administrative agencies had come to enjoy too much of an advantage in these rule challenge proceedings, and that the proceedings, therefore, were not serving their intended purpose of discouraging the adoption of invalid rules. The 1996 legislation makes several changes in an effort to “level the playing field” in these proceedings. Two of these are discussed in the following paragraphs.

Presumptions. Under the old APA, a person challenging a proposed rule (or an existing rule) had the burden of proving the invalidity of the rule by a preponderance of the evidence.[40] However, courts often applied a heavier burden to challengers by also deferring to an agency’s construction of a statute the agency is charged with enforcing, or by otherwise indicating that the agency’s interpretation is entitled to “great weight” and, therefore, is not to be overturned unless “clearly erroneous.”[41] Courts also have held that an agency’s interpretation of a statute need not be the sole possible interpretation or even the most desirable one; it need only be within the range of “possible” interpretations.[42] In addition, courts occasionally have suggested that a rule enjoys a “presumption” of correctness or validity.[43]

One particular decision—State Department of Health and Rehabilitative Services v. Framat Realty, Inc., 407 So. 2d 238 (Fla. 1st DCA 1981)—came to symbolize the advantage that agencies enjoyed in defending their rules, and many sought to reverse the Framat Realty decision (and similar decisions) by legislative changes that remove any presumption of correctness or validity.[44]

The 1996 legislation expressly provides that a proposed rule is not presumed to be valid or invalid.[45] The legislation also seeks to ease the burden on the challenger by simply requiring the challenger to state with particularity the objection to the proposed rule and the reasons that the proposed rule is an invalid exercise of delegated legislative authority. The agency then has the burden to prove that the proposed rule is not an invalid exercise of delegated legislative authority as to the objections raised.[46]
• Limitations on Rulemaking Authority. The 1996 legislation also seeks legislatively to overrule judicial decisions giving administrative agencies “wide discretion in the exercise of their rulemaking authority” whether “clearly conferred or fairly implied,” so long as that authority is “consistent with the agencies’ general statutory duties.”[47] The 1996 legislation seeks to accomplish this by expressly providing that “[a] grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required.”[48]

The 1996 legislation also makes clear that a rule will be determined to be invalid for any of the seven reasons set out in the definition of “invalid exercise of delegated legislative authority.” Several judicial decisions appeared to require the agency’s rules to be sustained as long as they are merely “reasonably related to the purposes of the enabling legislation, and are not arbitrary and capricious.”[49] The 1996 legislation effectively overrules these cases by expressly stating that “[n]o agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious . . . .”[50]
The 1996 legislation recognizes that it imposes new restrictions on an agency’s rulemaking. The legislation therefore establishes a procedure by which each agency is to identify its previously adopted rules that exceed the rulemaking authority as now limited.[51] The 1996 legislation then “shields” those listed existing rules that do not meet this new test until the legislature may consider whether specific authorizing legislation should be enacted.[52]

• Additional Grounds for Challenging Rules.
Both proposed and adopted rules now may be determined to be invalid for two new reasons. First, a proposed or existing rule is an invalid exercise of delegated legislative authority if the rule imposes regulatory costs on the regulated person, county, or city that could be reduced by the adoption of less costly alternatives that substantially accomplish the statutory objectives.[53] Second, a proposed or existing rule also is now an invalid exercise of delegated legislative authority if it is not based on competent substantial evidence.[54]

New Limits on Agency Reliance on Nonrule Policies

Other provisions of the 1996 legislation sought to enhance agency accountability by discouraging agencies from relying on nonrule policies in lieu of formal rules adopted through the “improved” rulemaking process. This reliance on nonrule policies by state agencies can be traced to McDonald v. Department of Banking & Finance, 346 So. 2d 569 (Fla. 1st DCA 1977), in which the court held that state agencies were not required to adopt all of their emerging or “incipient” policies as rules. Instead, the court reasoned agencies may choose not to adopt those policies as rules and explain, support, and defend such policies in each case in which the policy is applied.

McDonald created an exception to the general rule that the formal rulemaking process, with its attendant notice and public hearing requirements, must be used to implement delegated legislative authority. However, as the late Professor Pat Dore noted, “[b]efore long, . . . the limited McDonald exception swallowed the rule, [because the courts] allowed the agencies themselves to determine whether and when they were ready to proceed to rulemaking.”[55] This reliance on adjudication instead of rulemaking to announce agency policy set the stage for the enactment of F.S. §120.535 in 1991.

F.S. §120.535(1) for the first time clearly provided that “[r]ulemaking is not a matter of agency discretion” and required agencies to adopt their policies through rulemaking as soon as “feasible” and “practicable.”[56] The agency has the burden to prove that rulemaking is not “feasible” or “practicable.” To meet this burden, the agency must effectively demonstrate that the policy is, in fact, incipient or evolving.

Along with §120.535, the legislature also enacted §120.57(1)(b)15. That section specifically authorizes agencies to rely on nonrule policy in determining a person’s substantial interests so long as the agency “proves up” the policy each time it is applied. In this regard, F.S. §§120.535 and 120.57(1)(b)15. arguably did little more than codify the McDonald decision.

Because the agency could continue to rely on its nonrule policy in subsequent adjudicatory proceedings during the rulemaking process, the remedies provided by §120.535 were incomplete, at best. A prevailing party was not entitled to an award of attorneys’ fees and costs under F.S. §120.535 unless an agency statement or policy previously determined to be an “unpromulgated rule” was relied on by the agency to determine the person’s substantial interests and the agency had not initiated the rulemaking process to formally adopt the policy.[57]

The 1996 legislation contains several provisions which enhance agency accountability by restricting the use of nonrule policies and encouraging agencies to adopt their policies as rules. First, §120.54(7) includes a new procedure by which an affected person can petition an agency to adopt a nonrule policy through the formal rulemaking process. Second, the remedies in former F.S. §120.535 are strengthened. Finally, §120.57(1)(e) places new restrictions on agency policymaking through adjudication.

Section 120.54(7)(b) and (c): “Forced” Rulemaking?

An affected person now may petition the agency to initiate rulemaking for an “existing rule which the agency has not adopted by the rulemaking procedures or requirements [of the APA].” The agency may not deny petitions to initiate rulemaking directed at an unadopted rule as freely as it may deny petitions under the former §120.54(5).[58] The agency’s decision on the petition is vested with agency discretion. Nothing in paragraphs (b) or (c) in the new §120.54(7) affirmatively require the agency to grant the petition and initiate rulemaking. The agency is only required to follow the notice and hearing procedures set forth in paragraphs (b) and (c).

If, however, the record of the public hearing required by §120.54(7)(b) demonstrates that adoption of the nonrule policy is “feasible and practicable,” a reviewing court may conclude that the agency was required by §120.54(1)(a) to adopt the policy as a rule and the agency had no discretion to refuse to initiate rulemaking. Alternatively, the agency’s failure to initiate rulemaking in such a circumstance may be considered an abuse of the agency’s discretion.

Under this new provision, the agency must either initiate rulemaking or provide notice that the agency will hold a public hearing on the petition within 30 days after the petition is filed.[59] The public hearing must be held within 30 days after the notice is published. The purpose of the public hearing is to receive public comments on the unadopted rule and to “consider whether the public interest is served adequately by the application of the rule on a case-by-case basis, as contrasted with its adoption by the rulemaking procedures or requirements [of the APA].”[60]

Stated another way, the purpose of the public hearing is to determine whether the agency’s policy has evolved to the extent that it should be formally adopted by the agency as a rule.

Within 30 days after the public hearing, the agency must either initiate rulemaking or issue a statement of its reasons for failing to do so.[61] This statement must be published in the Florida Administrative Weekly and must be filed with the Joint Administrative Procedures Committee (JAPC).[62] JAPC must forward this statement to the legislative committee with primary oversight of the agency, and that legislative committee may hold a hearing and may recommend the introduction of legislation to make the unadopted rule a statutory standard, or to limit or modify the authority of the agency.[63]

Clearly, this procedure is designed to encourage agencies to grant such petitions in most instances. Any legal discretion that an agency may have to deny a petition directed at an unadopted rule ignores the political pressure to initiate rulemaking in light of the JAPC and legislative review of the agency’s decision not to do so.

The agency remains free to rely on the unadopted rule to determine a party’s substantial interests, subject to the requirements of §120.57(1)(e). Further, an affected party who successfully convinces the agency to adopt the policy as a rule is not independently entitled to an award of attorneys’ fees and costs. The remedy offered by this new procedure is somewhat similar to that in the former §120.535—it can be used to force an agency into rulemaking but little more.

Revisions to Former §120.535

While the 1996 legislation repealed §120.535, its substance is retained in §120.54(1)(a). Agencies still must adopt their policies as rules as soon as “feasible and practicable.”[64] The procedure for challenging an agency statement defined as a rule but not formally adopted through the rulemaking process remains substantially unchanged, but the remedies available under that section are strengthened.

The 1996 legislation provides for an award of attorneys’ fees and costs to a person who successfully challenges an agency’s failure to formally adopt a policy as a rule.[65] The agency can still avoid payment of attorneys’ fees and costs by initiating the rulemaking process after a challenge to its policy has been filed pursuant to the new §120.56(4), but before the administrative law judge issues a final order on the challenge. If, however, the administrative law judge enters a final order determining that the agency should have formally adopted its policy as a rule, the agency must immediately discontinue reliance on that policy or any substantially similar policy as a basis for agency action and must pay the petitioner’s attorneys’ fees and costs.[66]

F.S. §120.57(1)(e)3: New Limits on the Use of Nonrule Policies

As noted above, the McDonald requirement that the agency “prove up” the nonrule policy each time that it is applied was codified in §120.57(1)(b)15. That section required the agency to demonstrate that the policy being applied is “within the scope of delegated legislative authority.” The 1996 amendments to the APA further specify what the agency must demonstrate to “prove up” its policy.

Where an agency relies on a nonrule policy to determine a person’s substantial interests, the policy is not presumed to be valid or invalid.[67] In each case where a nonrule policy is relied upon, the agency must demonstrate that the policy:

a. is within the powers, functions, and duties delegated by the Legislature or, if the agency is operating pursuant to authority derived from the State Constitution, is within that authority;
b. does not enlarge, modify, or contravene the specific provisions of law implemented;
c. is not vague, establishes adequate standards for agency decisions, or does not vest unbridled discretion in the agency;
d. is not arbitrary or capricious;
e. is not being applied to the substantially affected party without due notice;
f. is supported by substantial competent evidence; and
g. does not impose excessive regulatory costs on the regulated person, county or city.[68]

Except for sub-subparagraph e., these criteria are identical to the revised definition of “invalid exercise of delegated legislative authority” in F.S. §120.52(8), and it is expected that courts will interpret those provisions in para materia. Because this list uses the conjunction “and” rather than “or,” the agency must demonstrate that its policy satisfies all of the listed criteria.[69] Further, sub-subparagraphs e., f., and g. will force agencies to take additional care in formulating nonrule policy, especially when such policy interpretation is being made for the first time.

Sub-subparagraph e. was derived from a line of recent federal decisions in which an agency policy was being applied in licensing and enforcement decisions.[70] The theory underlying these decisions, and sub-subparagraph e., is that if the agency’s interpretation of its enabling statute (i.e., the agency policy) is unclear or does not logically and obviously follow from the enabling statute, the regulated party could not have been “on notice” of the policy as it would be if the policy were codified in a promulgated rule. Consequently, the agency should not be permitted to rely on the policy when determining a person’s substantial interests.

When the agency’s policy has been developing over a period of time and the agency’s position has almost solidified to the point of codifying the policy through rulemaking, this criterion should be easy to satisfy.[71] However, when the agency is applying the policy for the first time or changes its policy in mid-stream, it may be difficult, if not impossible, for the agency to demonstrate that affected parties have “due notice” of the policy. In such circumstances, the agency must demonstrate that its interpretation of the enabling statute is sufficiently obvious that all substantially affected parties are implicitly on notice of the policy. The authors suggest this standard also should apply when an agency’s nonrule policy is an extension of an agency rule to a circumstance not directly addressed or interpreted by the rule.

A somewhat related provision, sub-subparagraph f., requires the agency’s policy to be supported by competent substantial evidence in the record of the proceeding in which the policy is applied. In this regard, the agency must create a record foundation supporting the “accuracy of every factual premise and the rationality of every policy choice.”[72] This provision is similar to, but expands the language in, old §120.57(1)(b)15., which required that the recommended and final orders include an explanation of the policy statement that identifies the “evidentiary basis” of the statement.

Sub-subparagraph g. requires the agency to demonstrate that the policy does not impose “excessive regulatory costs” on the affected party. This provision does not specify what the costs are to be compared to in determining their excessiveness, or lack thereof. The determination as to the “excessiveness” of the costs imposed by the policy is likely a factual issue to be decided by the administrative law judge. As such, the affected party should be permitted to offer evidence relating to specific costs which may be excessive.[73] It is important to note, however, that the agency is not necessarily required to disprove the existence of a lower cost alternative. The agency must only demonstrate that the costs imposed by the application of the agency policy, including those party-specific transaction costs, are not “excessive.”

Not only may §120.57(1)(e) make it more difficult for an agency to “prove up” its policies before the administrative law judge, but it dramatically restricts the agency’s ability in its final order to reject the administrative law judge’s determination that the agency failed to “prove up” the policy. The agency may only reject the administrative law judge’s determination when it is “clearly erroneous or does not comply with the essential requirements of law.”[74] If, on appeal, the court determines that an agency’s rejection of the administrative law judge’s determination failed to comply with this provision, the agency action will be set aside, and the court will award attorneys’ fees and costs to the prevailing party.[75]


Certainly it was not the purpose of the 1996 amendments to the APA to create a Catch-22 directing agencies not to adopt rules without specific statutory authority to do so, while limiting the actions they may take based upon unadopted rules and policies. Instead, the purpose of this legislation was to reduce the likelihood that businesses and other regulated parties would find themselves in the shoes of John Yossarian, the rule-besieged hero in Catch-22.

In this regard, the 1996 APA reforms which are intended to limit agency reliance on nonrule policies are a necessary and logical complement to the new limits on agency rulemaking authority. Together, these reforms are intended to ensure that agency policy choices, whether in rules or nonrule policies, are specifically authorized by the enabling legislation. Whether the professed goals of the 1996 legislation—elimination of bureaucracy in agency decision- making and enhancing agency accountability to the legislature and general public—will, in fact, be realized remains to be seen. The 1996 APA reforms are a positive step toward this goal.

1. Joseph Heller, Catch-22.
2 Fla. Stat. §§120.52(8), .536(1) (Supp. 1996).
3 Id. §120.56(2)(a), (c).
4 Id. §120.595(2).
5 Fla. Exec. Ord. 95-74, (Feb. 27, 1995); Fla. Exec. Ord. 95-256, §7 (July 12, 1995); see also Fla. Stat. §120.536(2)-(3) (Supp. 1996).
6 Fla. Stat. §120.54(1)(a).
7 Id. §120.57(1)(e).
8 Id. §120.54(2)(a) (Supp. 1996).
9 Id. §120.54(1)(d) (1995).
10 Id. §120.54(2)(c) (Supp. 1996).
11 Id.
12 Id. §120.54(2)(d).
13 Id. See the federal Negotiated Rulemaking Act of 1996, 5 U.S.C. §§561-70 (1994).
14 Fla. Stat. §120.54(3)(a)1. (Supp. 1996).
15 Id.
16 Id. §120.54(12)(b) (1995).
17 Id. §120.541(1)(a) (Supp. 1996). See also id. §120.52(8)(g).
18 Id.
19 Id. §120.541(1)(b).
20 See, e.g., id. §120.54(2)(b) (1991). See Patricia A. Dore, Seventh Administrative Law Conference Agenda and Report, 18 Fla. St. U.L. Rev. 703, 703-707 (1991).
21 Fla. Stat. §120.541(1)(a) (Supp. 1996); id. §120.54(3)(b)1.
22 Id. §120.54(3)(b)1.
23 Id. §120.541(1)(b).
24 Id.
25 See, e.g., Florida-Texas Freight, Inc. v. Hawkins, 379 So. 2d 944 (Fla. 1979).
26 Fla. Stat. §120.54(2)(a), (2)(c)4. (1995).
27 Id. §120.54(3)(b) (Supp. 1996).
28 Id.
29 Id. §120.54(2)(c).
30 Id. §120.54(13)(b) (1995).
31 Id. §120.54(11)(a).
32 Id. §120.54(3)(d)1. (Supp. 1996).
33 Dept. of Gen. Servs. v. Willis, 344 So. 2d 490, 580 (Fla. 1st D.C.A. 1977).
34 Fla. Stat. §120.54(4)(b) (1995).
35 Id. §120.56(2)(a) (Supp. 1996).
36 Id.
37 See, e.g., Northern Palm Beach County Water Control Dist. v. Loxahatchee River Envtl. Control Dist., 16 Fla. Admin. L. Rep. 120 (1994); see also James W. Linn, Rulemaking and Incipient Policy: When Is a Rule Not a Rule, When Is a Rule Change a New Rule, and Who Cares?, 64 Fla. B.J. 63, 65-66 (Mar. 1990).
38 Fla. Stat. §120.56(2)(a) (Supp. 1996).
39 See, e.g., Stephen T. Maher, Getting Into the Act, 22 Fla. St. U.L. Rev. 277, 280 (1994).
40 E.g., Agrico Chemical Co. v. Department of Envtl. Reg., 365 So. 2d 759, 763 (Fla. 1st D.C.A. 1978), cert. denied, 376 So. 2d 74 (Fla. 1979).
41 E.g., D.A.P. Constructors, Inc. v. Department of Transp., 656 So. 2d 948 (Fla. 1st D.C.A. 1995).
42 E.g., Department of Labor & Employ. Sec. v. Bradley, 636 So. 2d 802 (Fla. 1st D.C.A. 1994).
43 E.g., Board of Trustees of Internal Improvement Trust Fund v. Levy, 656 So. 2d 1359, 1363 (Fla. 1st D.C.A. 1995).
44 Final Report of the Governor’s Administrative Procedure Act Review Commission, Appendix N, at 2 (hereinafter Final Report).
45 Fla. Stat. §120.56(2)(c) (Supp. 1996).
46 Id. §120.56(2)(a).
47 E.g., Department of Labor & Employ. Sec. v. Bradley, 636 So. 2d 802, 807 (Fla. 1st D.C.A. 1994).
48 Fla. Stat. §§120.52(8), .536(1) (Supp. 1996).
49 E.g., Marine Indus. Ass’n of South Florida v. Florida Department of Envtl. Protection, 672 So. 2d 878, 882 (Fla. 4th D.C.A. 1996).
50 Fla. Stat. §§120.52(8), 120.536(1) (Supp. 1996).
51 Id. §120.536(2)-(3) (Supp. 1996).
52 Id.
53 Id. §120.52(8)(g) (Supp. 1996).
54 Id. §120.52(8)(f).
55 Patricia A. Dore, Florida Limits Policy Development Through Administrative Adjudication and Requires Indexing and Availability of Agency Orders, 19 Fla. St. L. Rev. 437 (1991). See also id. at 448.
56 Fla. Stat. §120.535(1) (1995).
57 Id. §120.535(6) (1995).
58 Compare Citizens of Florida v. Mayo, 357 So. 2d 731 (Fla. 1978) (interpreting Fla. Stat. §120.54(5)). See also Bayonet Point Hospital, Inc. v. Department of HRS, 490 So. 2d 1318, 1320 (Fla. 1st D.C.A. 1986).
59 Fla. Stat. §120.54(7)(b) (Supp. 1996).
60 Id.
61 Id. §120.54(7)(c).
62 Id. See id. §§11.60, 120.545 (1995).
63 Id. §120.54(7)(c) (Supp. 1996).
64 Id. §120.54(1)(a).
65 Id. §120.595(4)(a).
66 Id. §§120.56(4)(d), 120.595(4)(a).
67 Id. §120.57(1)(e)1.
68 Id. §120.57(1)(e)2.a.-g. (emphasis supplied).
69 See Agrico Chemical Co. v. Department of Environmental Reg., 365 So. 2d 759, 762-63 (Fla. 1st D.C.A. 1978), cert. denied, 376 So. 2d 74 (Fla. 1979). But see Grove Isle, Ltd. v. Department of Environmental Reg., 454 So. 2d 571, 573 (Fla. 1st D.C.A. 1984).
70 See, e.g., General Electric Co. v. Environmental Protection Agency, 53 F.3d 1329, 1333-4 (D.C. Cir. 1995); U.S. v. Trident Seafoods Corp., 60 F.3d 556, 559 (9th Cir. 1995).
71 See McDonald, 346 So. 2d at 583.
72 See Anheuser-Busch, Inc. v. Department of Business Regulation, 393 So. 2d 1177, 1182 (Fla. 1st D.C.A. 1981).
73 Cf. Fla. Stat. §120.541 (Supp. 1996).
74 Id. §120.57(1)(e)3.
75 Id. The prevailing party is entitled to the attorneys’ fees and costs for both the appeal and the underlying proceeding. Id. Such an award is consistent with the awards authorized under the new §120.595(2). Unlike that section, however, an award of attorneys’ fees and costs under the new §120.57(1)(e)3. is not capped at $15,000.


*Wade L. Hopping is the senior partner of the Tallahassee law firm of Hopping Green Sams & Smith and concentrates in environmental law, administrative law, and lobbying. His administrative law practice focuses on assisting clients with the planning and licensing of complex projects including Development of Regional Impact, the creation and operation of Community Development Districts, and the siting of major facilities under Florida’s various growth management and siting acts. Mr. Hopping lobbies before the Florida Legislature on a variety of issues, including those related to the land use, property rights, and environment, energy, land development, boating, and automobile manufacturing issues. Mr. Hopping received his B.A. in political science from Ohio State University in 1953, and his J.D. from Ohio State University in 1955. He was admitted to the Ohio Bar in 1955 and The Florida Bar in 1958.

Messrs. Hopping and Sellers worked on the development of many of the rulemaking reforms described in this article.

Kent Wetherell is an associate with Hopping, Green, Sams & Smith, P.A., in Tallahassee. He graduated magna cum laude from Florida State University in 1992 with a B.S. in accounting, and received his J.D., with high honors, from Florida State University in 1995. Mr. Wetherell practices in the areas of administrative law, land use, private property rights, and legislative lobbying.


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