OFFICE OF INSURANCE REGULATION AND FINANCIAL SERVICES COMMISSION, APPELLANTS,
v.
SERVICE INSURANCE COMPANY, APPELLEE
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The Florida First District Court of Appeal reversed an administrative law judge's decision that invalidated an administrative rule, holding that the rule had expired when its enabling statute was repealed and therefore could not be challenged after the rule's existence ended.
The court held that section 120.56(3)(a) requires that a rule challenge be initiated during the existence of the rule, and once a rule's enabling statute is repealed, the rule automatically expires and can no longer be challenged. The ALJ lacked jurisdiction to review the expired rule.
[1] An administrative law judge lacks jurisdiction to determine the invalidity of an administrative rule that has expired by repeal of its enabling statute.
[2] A substantially affected person may seek an administrative determination of the invalidity of an existing rule only during the rule's existence.
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Join FLexlaw to unlock all legal intelligence“[a] substantially affected person may seek an administrative determination of the invalidity of an existing rule at any time during the existence of the rule.”
This statutory language from section 120.56(3)(a) is the basis for the court's holding that rule challenges must be filed while the rule exists, establishing a jurisdictional timing requirement.
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Join FLexlaw to unlock all legal intelligenceIn 1996, the Florida Legislature amended section 627.062 to allow insurers to choose arbitration instead of a hearing for rate filing disputes and dir…
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The Office of Insurance Regulation and the Financial Services Commission, Appellants, appeal a final order determining that Florida Administrative Code Rule 690-170.105(l)(d) was an invalid exercise of delegated legislative authority. They argue, among other things, that the administrative law judge (“ALJ”) erred in exercising jurisdiction to review the rule, which had expired by repeal of its enabling statute before Service Insurance Company, Appellee, initiated its rule challenge. We agree. For this reason, we reverse the ALJ’s final order without reaching the remaining issues raised on appeal.
In 1996, the Florida Legislature amended section 627.062, Florida Statutes, to *638create an option for insurers to choose arbitration in lieu of a hearing pursuant to section 120.57, Florida Statutes, for the resolution of issues that arose when the then-existing Department of Insurance (“DOI”) took agency action with respect to a rate filing. Ch. 96-194, § 4, Laws of Fla. This option, which was codified at section 627.062(6), became effective January 1, 1997. Ch. 96-194, § 4, Laws of Fla. In addition to granting insurers the right to arbitrate, the Legislature directed DOI to adopt rules for arbitration. § 627.062(6)(b), Fla. Stat. (1996). DOI did so, and these rules were later transferred to the Financial Services Commission and the Office of Insurance Regulation pursuant to a government reorganization statute. Ch. 2002-404, § 2, Laws of Fla.; § 20.121, Fla. Stat. (2002).
In 2008, the Legislature amended section 627.062(6) to remove the arbitration option. Nevertheless, in June 2009, Ap-pellee sought a determination from an ALJ that one of the rules adopted under the directive of the former version of section 627.062(b) was an invalid exercise of delegated legislative authority. The ALJ reviewed the rule and declared it invalid.
Section 120.56(3)(a), Florida Statutes (2008), sets forth the parameters of an ALJ’s jurisdiction to entertain a rule challenge. It provides that “[a] substantially affected person may seek an administrative determination of the invalidity of an existing rule at any time during the existence of the rule.” § 120.56(3)(a) (emphasis added). This statute does not authorize a rule challenge to a rule that is no longer in existence. See id.; Dep’t of Revenue v. Sheraton Bal Harbour Ass’n, Ltd., 864 So.2d 454 (Fla. 1st DCA 2003). Once a rule’s enabling statute is repealed, the rule itself automatically expires. Canal Ins. Co. v. Cont’l Cas. Co., 489 So.2d 136, 138 (Fla. 2d DCA 1986) (citing Hulmes v. Div. of Ret., Dep’t of Admin., 418 So.2d 269 (Fla. 1st DCA 1982)). Therefore, even if the rule is still in print, it is no longer effective and does not meaningfully “exist.”
We recognize that our sister court in Witmer v. Department of Business and Professional Regulation, 662 So.2d 1299 (Fla. 4th DCA 1995), held that an expired rule could be challenged as long as it was still being applied to the petitioner. While this holding may be a good policy, it does not reflect the plain language of section 120.56(3), which requires that a challenge be initiated during the existence of the rule. The plain language of the statute makes this requirement an issue of timing rather than substance. See § 120.56(3)(a) (“A substantially affected person may seek an administrative determination of the invalidity of an existing rule at any time during the existence of the rule.”) (emphasis added). For this reason, we disagree with the Witmer court and hold that the ALJ in the instant case erred in reviewing the expired rule. Because Appellee did not file its challenge during the rule’s eleven 1 years of existence, the challenge was too late, and the ALJ should have declined to review it. Consequently, we reverse.
REVERSED.
KAHN, LEWIS, and CLARK, JJ., concur.
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Off. OF Ins. Reg. & the Fin. Servs. Comm'n v. Serv. Ins. Co., 53 So. 3d 1127 (Fla. 1st DCA 2011)…Florida Rule of Appellate Procedure 9.315(b), we summarily reverse the Supplemental Final Order awarding attorney’s fees to Appellee based on our reversal of the underlying Final Order in Office of Insurance Regulation v. Service Insurance Company, 50 So. 3d 637 (Fla. 1st DCA 2010), reh’g denied January 10, 2011. REVERSED. BENTON, C.J., WETHERELL and ROWE, JJ., concur.…
Authorities Cited
- Canal Ins. Co. v. Cont'l Cas. Co., 489 So. 2d 136 (Fla. 2d DCA 1986)
- Hulmes v. Division of Retirement, 418 So. 2d 269 (Fla. 1st DCA 1982)
- Witmer v. Dep't of Bus. & Prof'l Reg., 662 So. 2d 1299 (Fla. 4th DCA 1995)
- Frederick v. Florida Unemployment Appeals, 864 So. 2d 454 (Fla. 3d DCA 2003)
- Dep't OF Revenue v. Sheraton BAL Harbour Ass'n, Ltd., 864 So. 2d 454 (Fla. 1st DCA 2003)