C&S Wholesale Grocers, Inc. v. State of Florida Department of Business and Professional Regulation, Division of ( 2023 )

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
_____________________________
No. 1D2022-2940
_____________________________
C&S WHOLESALE GROCERS, INC.,
Appellant,
v.
STATE OF FLORIDA, DEPARTMENT
OF BUSINESS AND PROFESSIONAL
REGULATION, DIVISION OF
ALCOHOLIC BEVERAGES AND
TOBACCO,
Appellee.
_____________________________
On appeal from the Division of Alcoholic Beverages and Tobacco.
Sterling Whisenhunt, Director.
December 13, 2023
PER CURIAM.
C&S Wholesale Grocers, Inc. (C&S), seeks review of a final
order from the Department of Business and Professional
Regulation, Division of Alcoholic Beverages and Tobacco (the
Division) dismissing its petitions for administrative hearing with
prejudice. We reverse the portion of the order dismissing the initial
petition, affirm the portion of the order dismissing the amended
petition, and remand for further proceedings as discussed herein.
Facts
C&S, a large out-of-state grocery wholesaler, distributes
tobacco products in Florida. Its Florida operations require C&S to
collect and remit Florida other tobacco products excise taxes and
surcharges (OTP taxes). See §§ 210.30(1) & 210.276(1), Fla. Stat.
C&S requested a tax refund for OTP taxes it paid between August
2013 and June 2015 (the refund claim).
On August 14, 2015, the Division denied the refund claim. The
denial letter notified C&S that under section 72.011, Florida
Statutes, it had sixty days within which to contest the denial via
an administrative or judicial proceeding.
On October 13, 2015, C&S filed a petition for formal
administrative hearing with the Division (the initial petition). The
parties agree the initial petition was timely. The second paragraph
of the petition stated:
[C&S] respectfully requests that this Petition be held in
the Office of General Counsel to the Department and not
forwarded to the Department of Administrative Hearings
as there is a substantially similar case (e.g., facts and
claims) pending before Florida’s Ninth Judicial Circuit
Court that will be dispositive of the matter once a final
ruling has been made.
The initial petition noted the refund claim was identical to that
presented in the Ninth Judicial Circuit case, to wit, that the taxes
violate the Commerce and Equal Protection clauses of the United
States Constitution. 1
1 C&S also raised Commerce Clause and Equal Protection
challenges to cigarette taxes under sections 210.011 and 210.02(1),
Florida Statutes, in a separate circuit court case specific to refund
years 2016–2019. The final judgment on the pleadings denied the
constitutional challenges. C&S appealed that case to this Court in
case number 1D2022-3040. A per curiam affirmance opinion issued
on August 23, 2023.
2
The Division admits it did not acknowledge, respond to, or rule
on the initial petition. Likewise, C&S admits it did not update its
hold request or take action to compel the Division to rule. As a
result, the initial petition languished with the Division for years.
A little over four years later, on February 28, 2020, C&S filed
a first amended petition for formal administrative hearing (the
amended petition). Count one added a new, independent basis for
refund under a 2012 Second District Court of Appeal decision.
Count two reasserted the constitutional arguments from the initial
petition. 2 The amended petition again languished with the
Division for years.
Finally, almost seven years after the initial petition and over
two years after the amended petition, on August 29, 2022, the
Division filed a final order dismissing the petitions with prejudice
(the final order). 3 The final order concluded the initial petition was
“insufficient” and the amended petition was barred by the sixty-
day jurisdictional window in section 72.011. The final order stated:
The [initial petition] cannot be indefinitely held while
waiting on an indeterminate outcome in an unrelated
case. The [amended petition], filed outside the 60-day
statutory requirement pursuant to section 72.011, F.S.,
cannot cure any initial petition deficiencies nor include
an additional independent basis first asserted years after
the Division’s refund denial.
The Division concluded neither it nor the Division of
Administrative Hearings had jurisdiction to consider the refund
denial after sixty days such that dismissal with prejudice was
warranted.
2 The related Ninth Judicial Circuit case was voluntarily
dismissed in August 2019.
3 The final order is titled as denying the petitions, but in fact,
dismisses both petitions with prejudice.
3
C&S seeks review of the final order pursuant to section
120.68, Florida Statutes. Our review is de novo. Save Our Creeks
v. State of Fla. Fish & Wildlife Conser. Comm’n, 112 So. 3d 128,
130 (Fla. 1st DCA 2013).
The unique procedural posture of this case raises two issues
for discussion: (I) What duty did the Division have to act on the
petitions, irrespective of any hold request from C&S, and (II) can
the amended petition relate back to the timely filed initial petition.
I.
The Division’s letter notified C&S of its right to challenge the
refund denial. C&S attempted to exercise that right by filing a
timely petition for formal administrative hearing with the
Division. Under the Administrative Procedure Act, chapter 120,
Florida Statutes, the Division had fifteen days within which to rule
on the petition. § 120.569(2)(a), Fla. Stat. (a request for a hearing
shall be granted or denied within fifteen days after receipt); §
120.569(2)(c), Fla. Stat. (“The agency shall promptly give written
notice to all parties of the action taken on the petition, shall state
with particularity its reasons if the petition is not granted, and
shall state the deadline for filing an amended petition if
applicable.”). An agency has a statutory mandate to act on a
request for hearing. See Failer v. State, Dep’t of Health, 139 So. 3d
359, 362 (Fla. 1st DCA 2014) (recognizing an agency “must” grant
or deny a request for hearing within fifteen days); Simmons v.
State, Ag. for Health Care Admin., 950 So. 2d 431 (Fla. 1st DCA
2007) (“An agency is not entitled to ignore a properly filed request
for hearing, and if it determines that the petitioner is not entitled
to a hearing, it is obligated to issue an order to that effect.”). 4 The
Division eschewed this statutory mandate when it took no action
for almost seven years. We recognize that C&S is not blameless,
4 It is worth mentioning that Simmons involved a petition for
writ of mandamus to compel the agency to rule on a petition for
formal administrative hearing. 950 So. 2d at 432. Had C&S truly
been concerned that the Division was depriving it of due process,
C&S could have filed a mandamus petition to compel a ruling. It
did not.
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but we disagree that C&S could have invited the error where the
Division had a duty to act. Cf. Salam v. Bd. of Prof’l Eng’rs, 946
So. 2d 48, 49 (Fla. 1st DCA 2006) (granting attorney’s fees on a
mandamus petition after finding the agency’s four-month delay in
ruling on Salam’s petition for formal hearing constituted a “gross
abuse justifying an award of attorney’s fees” and stating, “A
citizen’s rights under the Florida Statutes must be taken seriously
by the State’s agencies and handled expeditiously.”). The
Division’s inaction deprived C&S of a point of entry to challenge
its refund denial.
A.
The Division asks us to affirm under the harmless error
standard. See Chrysler v. Dep’t of Prof’l Reg., 627 So. 2d 31, 34–35
(Fla. 1st DCA 1993) (“An error is harmful where there is a
reasonable probability a different result would have been reached
but for the error committed.”). The Division now asserts there is
no reasonable probability of a different result because both it and
the Division of Administrative Hearings lack jurisdiction to
consider the merits of C&S’s constitutional claims.
Irrespective of the hold request, it is difficult to understand
why the Division needed almost seven years to determine the
initial petition was “insufficient.” The Division is correct that
agencies and administrative law judges have no authority to
declare statutes or existing rules unconstitutional. See Palm
Harbor Special Fire Control Dist. v. Kelly, 516 So. 2d 249, 250 (Fla.
1987) (“[I]t is axiomatic that an administrative agency has no
power to declare a statute void or otherwise unenforceable.”).
However, that does not mean the Division could dismiss the initial
petition with prejudice. In Key Haven Associated Enterprises, Inc.
v. Board of Trustees of Internal Improvement Trust Fund, 427 So.
2d 153, 157 (Fla. 1982), the Florida Supreme Court acknowledged
that a challenge to the facial constitutionality of a statute
authorizing agency action may be made in one of two ways — by
seeking a declaratory judgment in circuit court or by completing
the administrative process and seeking direct review of the facial
unconstitutionality in the district court under section 120.68. That
is to say, C&S had a right to a section 120.57 proceeding to make
its arguments and a record even though the merits of its
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constitutional challenge could not be considered in the
administrative context. We decline to find the Division’s almost
seven-year delay harmless.
While C&S is not blameless, the Division failed to follow the
mandate of section 120.569 and deprived C&S of due process when
it dismissed the initial petition without providing an opportunity
to be heard under section 120.57. We reverse the portion of the
final order dismissing the initial petition.
II.
That leaves the amended petition. We agree with the Division
in this regard. It had no jurisdiction to consider Count one of the
amended petition because the jurisdictional statute of nonclaim
expired.
Section 72.011(2)(a) prohibits filing an action to contest the
denial of a refund more than sixty days after the date the denial
becomes final. In this case, that date was October 13, 2015. C&S’s
initial petition was filed just in time – on the sixtieth day. The
amended petition was not filed until years later.
The sixty-day window in section 72.011(2)(a) is jurisdictional.
§ 72.011(5), Fla. Stat. With the addition of subsection (5), the
legislature clearly meant this to be a jurisdictional statute of
nonclaim. See Dep’t of Rev. v. Rudd, 545 So. 2d 369, 371 (Fla. 1st
DCA 1989); Am. Heritage Window Fashions, LLC v. Dep’t of Rev.,
191 So. 3d 516, 522 (Fla. 2d DCA 2016). Jurisdictional statutes of
nonclaim are distinct in that they operate to deprive a court of the
power to adjudicate an untimely claim. See Tampa Port Auth. v.
Henriquez, 48 Fla. L. Weekly D1358 *5 (Fla. 2d DCA July 7, 2023)
(citing Adhin v. First Horizon Home Loans, 44 So. 3d 1245, 1253
(Fla. 5th DCA 2010)). The Division is correct that neither it nor the
Division of Administrative Hearings had jurisdiction to consider
the amended petition that was filed well outside the jurisdictional
nonclaim period.
C&S argues a version of the “relation back doctrine” should
apply to liberally permit its amendment to the initial petition. We
agree that Florida Rule of Administrative Procedure 28-106.202
6
permits amendment. The “relation back doctrine” generally allows
an amended pleading to relate back to the date of the original
pleading for limitations purposes. See Fla. R. Civ. P. 1.190(c);
Smith v. Bruster, 151 So. 3d 511, 515 (Fla. 1st DCA 2014)
(recognizing the relation back doctrine should be liberally
construed and applied). The problem for C&S here is the statute of
nonclaim. A nonclaim statute is distinct from a statute of
limitation in that it deprives a court of jurisdiction to entertain a
claim filed after the nonclaim period. See Gulf Marine Repair Corp.
v. Henriquez, 48 Fla. L. Weekly D1363 *9–*10 (Fla. 2d DCA July
7, 2023) (discussing the application of the relation back doctrine in
statute of limitation and highlighting that the relevant statute was
not a jurisdictional nonclaim statute that would prevent
application of the doctrine) (citing Wilkinson v. Reese, 540 So. 2d
141, 143 (Fla. 2d DCA 1989)).
The Division correctly dismissed the amended petition with
prejudice as the expiration of the nonclaim period was a
jurisdictional defect that could not be cured. See Merrick Park,
LLC v. Garcia, 299 So. 3d 1096, 1103 (Fla. 3d DCA 2019) (affirming
dismissal of Count II of Second Amended Counterclaim where the
trial court could not acquire jurisdiction through the relation back
doctrine due to the nonclaim statute); Taylor v. City of Lake Worth,
964 So. 2d 243, 244 (Fla. 4th DCA 2007) (concluding circuit court
lacked jurisdiction to consider an amended pleading that was filed
after the nonclaim period expired). We affirm the portion of the
final order dismissing the amended petition with prejudice.
III.
Pursuant to section 120.68(6)(a)1., Florida Statutes, we
reverse the portion of the final order dismissing the initial petition.
We affirm the portion of the final order dismissing the amended
petition with prejudice. The case is remanded to the Division with
instructions to conduct a hearing under section 120.57.
REVERSED in part, AFFIRMED in part, and REMANDED.
ROBERTS, KELSEY, and WINOKUR, JJ., concur.
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_____________________________
Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
_____________________________
Kristen M. Fiore and J. Riley Davis, Akerman LLP, Tallahassee;
Michael J. Bowen, Akerman LLP, Jacksonville, for Appellant.
Jake Whealdon, General Counsel, Brooke Elizabeth Adams, Chief
Appellate Counsel, and Jett Lee Baumann, Chief Legal Counsel,
Tallahassee, for Appellee.
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