Opinion
No. 1D20-1185 No. 1D20-1189
08-19-2021
CALDER RACE COURSE, INC., Appellant, v. SCF, INC., a Florida corporation, and Florida Department of Business & Professional Regulation, Division of Pari-Mutuel Wagering, Appellees. Florida Department of Business & Professional Regulation, Division of Pari-Mutuel Wagering, Appellant, v. SCF, Inc., a Florida corporation, and Calder Race Course, Inc., Appellees.
Wilbur E. Brewton and Kelly B. Plante of Brewton Plante, P.A., Tallahassee; Kristen M. Fiore of Akerman LLP, Tallahassee; and Tamara S. Malvin of Akerman LLP, Fort Lauderdale, for Calder Race Course, Inc. Megan S. Silver, Joseph Y. Whealdon, III, and Johnny P. ElHachem, Assistant General Counsel, Department of Business and Professional Regulation, Tallahassee, for Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering. Bradford J. Beilly and John Strohsahl of Beilly & Strohsahl, P.A., Fort Lauderdale; and David S. Romanik of David S. Romanik, P.A., Oxford, for SCF, Inc.
Wilbur E. Brewton and Kelly B. Plante of Brewton Plante, P.A., Tallahassee; Kristen M. Fiore of Akerman LLP, Tallahassee; and Tamara S. Malvin of Akerman LLP, Fort Lauderdale, for Calder Race Course, Inc.
Megan S. Silver, Joseph Y. Whealdon, III, and Johnny P. ElHachem, Assistant General Counsel, Department of Business and Professional Regulation, Tallahassee, for Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering.
Bradford J. Beilly and John Strohsahl of Beilly & Strohsahl, P.A., Fort Lauderdale; and David S. Romanik of David S. Romanik, P.A., Oxford, for SCF, Inc.
Per Curiam.
These consolidated appeals arise out of a final order concluding that the Florida Department of Business & Professional Regulation, Division of Pari-Mutuel Wagering ("Division") engaged in unadopted rulemaking when it renewed Calder Race Course, Inc.’s ("Calder") slot machine gaming license for the 2019-2020 fiscal year. We reverse.
As background, chapter 551 of the Florida Statutes governs and sets extensive restrictions on how slot machine gaming is to be administered in Florida. Most relevant to this appeal, section 551.114(4), Florida Statutes, governs slot machine gaming areas and provides the following physical requirements:
(4) Designated slot machine gaming areas may be located within the current live gaming facility or in an existing building that must be contiguous and connected to the live gaming facility . If a designated slot machine gaming area is to be located in a building that is to be constructed, that new building must be contiguous and connected to the live gaming facility.
Fla. Stat. § 551.114(4) (2020) (emphases added). Since 2016, the emphasized language has been hotly contested by several players in the pari-mutuel world. This is so because, in 2016, Calder demolished its "Grandstand"—the seven-story stadium from which patrons could view the horseracing track and wager on the races at designated betting terminals. Post-demolition, Calder's primary viewing (and betting) area is located in front of the final stretch of the racetrack, at a location called the "apron." The apron is an open-air area with outdoor seating, wagering machines, video screens, and a collapsible canopy tent. A concrete walkway connects the apron to Calder's slot machine building; patrons need not step on grass; cross a parking lot, street, or waterway; or leave Calder's property to reach the slot machine building.
Nonetheless, Calder's demolition of its Grandstand sparked litigation by (a) the Florida Horsemen's Benevolent and Protective Association ("FHBPA"), a Florida corporation in the business of representing licensed horse trainers and horse owners, and (b) SCF, Inc., a Florida corporation in the business of breeding thoroughbred racehorses, the petitioner below.
In 2017, the FHBPA filed an unadopted rule challenge against the Division for its alleged failure to enforce the requirements of section 551.114(4), by continuing to allow Calder to maintain its slot machine gaming license in the absence of the Grandstand. The FHBPA maintained that, in the absence of the Grandstand, Calder no longer had a live gaming facility that was contiguous and connected to its slot machine gaming area. In a final order issued in September 2018, ALJ Lawrence Stevenson concluded that the Division's renewal of Calder's 2017-18 slot machine license did not constitute an unadopted rule. The FHBPA did not appeal, and that order became final.
In 2018, the FHBPA filed a direct challenge to the Division's renewal of Calder's 2018-19 slot machine gaming license. In a recommended order issued in 2019, ALJ John Van Laningham recommended that the Division deny Calder's application for renewal of its slot machine license, finding that Calder's apron is not a compliant live gaming facility and, accordingly, its slot machine gaming area is not contiguous and connected to a live gaming facility. In February 2020, the Division issued its final order concluding that the ALJ's determinations in his recommended order were not reasonable; it found that Calder's racetrack and viewing locations on and around the apron comply with the requirements of section 551.114(4), Florida Statutes. An appeal of the Division's final order was affirmed per curiam by the Fourth District Court of Appeal on May 27, 2021. Fla. Horsemen's Benevolent & Protective Ass'n, Inc. v. Calder Race Course, Inc. , No. 4D20-505, 2021 WL 2172989 (Fla. 4th DCA May 27, 2021) (a motion for a written opinion and en banc rehearing was denied).
In August 2019, SCF filed the underlying petition, alleging that the Division's actions in renewing Calder's 2019-20 slot machine gaming license constitutes one or more unadopted rules, in violation of section 120.54(1)(a), Florida Statutes. SCF alleged the absence of the Grandstand caused Calder to fall out of compliance with section 551.114(4) because: (1) Calder's slot machine gaming area was no longer "contiguous and connected" to its live gaming facility, and (2) Calder no longer had a live gaming facility. Calder moved to intervene without opposition, which was granted.
"An agency statement that ‘implements, interprets, or prescribes law or policy or describes the procedure or practice requirements of an agency’ is considered a ‘rule.’ §§ 120.52(16), 120.56(4)(a), Fla. Stat. Statements that are rules cannot be enforced unless they are formally adopted in accordance with requirements set forth in chapter 120. See § 120.54, Fla. Stat. If an agency statement meets the definition of a rule, but hasn't been adopted as a rule under chapter 120, then it is considered an ‘unadopted rule.’ § 120.52(20), Fla. Stat. Agencies may not enforce an unadopted rule against a party's substantial interests. § 120.57(e)1., Fla. Stat." Grabba-Leaf, LLC v. Dep't of Bus. & Pro. Regul. , 257 So. 3d 1205, 1208 (Fla. 1st DCA 2018).
A final order issued in March 2020, concluding that SCF had standing to bring an unadopted rule challenge and that the Division's actions, in renewing Calder's slot machine license, constituted unadopted rules. The ALJ's final order relied in part on the Division's February 2020 final order issued in the FHBPA's direct challenge to the Division's renewal of Calder's 2018-19 slot machine gaming license. Calder and the Division have both appealed, resulting in these two consolidated cases. Calder and the Division raise a number of issues on appeal, most of which need not be addressed because the issue of SCF's standing to bring an unadopted rule challenge to Calder's license renewal is dispositive. As the petitioner, SCF has the burden to provide competent, substantial evidence that it has standing. St. John's Riverkeeper, Inc. v. St. John's River Water Mgmt. , 54 So. 3d 1051, 1054 (Fla. 5th DCA 2011). The essence of SCF's argument is that because the Division issued a slot machine gaming license to Calder despite its non-compliance under Chapter 551 (by replacing its Grandstand with the apron), there is a "diminishment and reduction in the pari-mutuel handle" that Calder would have generated had Calder remained compliant (by, for example, rebuilding a grandstand).
In its Petition, SCF claimed it had standing because:
Calder has made a series of business decisions—including demolishing its previously existing 450,000 square foot grandstand building and replacing it with small tents—that reasonably can be expected to dissuade potential bettors as well as the general wagering public from attending and betting on the live racing at Calder, thereby resulting in a diminishment and reduction in the pari-mutuel handle that Calder would have generated if the Division had required Calder to fulfill its continuing statutory obligation to remain in compliance with all of the requirements for slot machine licensure under Chapter 551—further resulting in the diminished availability of funds directed by statute for the funding and payment of breeders’ awards to the breeders of Florida-bred thoroughbred horses including SCF.
But no evidence shows any actual or likely harm to SCF based on Calder's renewed license. As such, SCF has failed to prove its standing, which requires a showing "(1) that the rule or policy will result in a real or immediate injury in fact; and (2) that the alleged interest is within the zone of interest to be protected or regulated." Off. of Ins. Regul. & Fin. Servs. Comm'n v. Secure Enterprises, LLC , 124 So. 3d 332, 336 (Fla. 1st DCA 2013). "To satisfy the sufficiently real and immediate injury in fact element, an injury must not be based on pure speculation or conjecture." Id. The "proper inquiry is on the likelihood of injury, not that it be certain." SCF, Inc. v. Fla. Thoroughbred Breeders’ Ass'n, Inc. , 227 So. 3d 770, 776 (Fla. 1st DCA 2017). Here, SCF's speculation that the removal of the Grandstand and reconfiguration of the slot machine gaming area may cause it to have some indeterminate degree of financial injury is not enough to support a finding of standing under the first prong of the two-part test. In addition, SCF's interests as a horse breeder fall outside the zone of interests that section 551.114(4) protects.
This case is unlike SCF, Inc. v. Fla. Thoroughbred Breeders’ Ass'n, Inc . In that case, SCF had standing to assert statutory noncompliance with respect to the annual plan for the distribution of owners’ and breeders’ awards because SCF provided proof that it had received such awards in the past and was overwhelmingly likely to receive them in the future. 227 So. 3d at 775-76. Its petition alleged a scope of interest and activities directly affected by the annual plan and requested relief that demonstrated the type of substantial interest that could be administratively addressed and resolved. Id. ; see also Fla. Horsemen Benevolent & Protective Ass'n v. Rudder , 738 So. 2d 449, 451 (Fla. 1st DCA 1999) (finding that three Florida thoroughbred owners had standing because the purse the three owners might have received was reduced by a statutory one-percent deduction paid directly to the association).
Most importantly, the statutory framework for the annual plan was specifically set up to provide economic inducements for breeders such as SCF to operate successful equestrian programs in-state. SCF, Inc. , 227 So. 3d at 776. Therefore, "it would be a curious conclusion that none of them individually or as a group has a legal basis to complain about the plan's compliance with statutory guidelines as to awards." Id. In contrast, the statutory framework at issue here—governing the structures and geographic relationships between live gaming facilities and slot machine gaming areas—was not set up to provide economic inducements for Florida breeders like SCF.
Accordingly, we find that SCF had no standing to bring the underlying unadopted rule challenge and we need not address the merits of SCF's petition.
REVERSED .
Roberts, Makar, and Bilbrey, JJ., concur.