Just three months after the enactment of Amendment 6 to the Florida Constitution, it was addressed in a contentious case involving drilling rights in the Everglades. As we mentioned in a previous alert, Amendment 6 now prohibits Florida judges from deferring to state agency interpretations of state rules and statutes. Current administrative law also requires agencies to respect the findings of fact of an administrative law judge ("ALJ") unless the findings are not supported by competent substantial evidence.

Before granting oil and gas drilling rights, Florida's Department of Environmental Protection ("FDEP") must give weight to three statutory factors: 1) the nature, character, and location of the site for drilling; 2) the amount of time the site owner has owned it before applying for a permit, and whether the same entity owns both the surface and subsurface rights; 3) and whether the likelihood of profitably extracting oil from the site has been proven or indicated. In Kanter Real Estate, LLC v. Department of Environmental Protection, FDEP originally denied the petitioner's application to obtain oil drilling rights. The petitioner challenged the decision before an ALJ, who recommended that the permit be granted. On the first factor, the ALJ had found that the site had no special characteristics making it particularly susceptible to generating pollution. On the second factor, the ALJ determined that the petitioner's delay in applying for a permit should not count against its issuance. Although the FDEP acknowledged the statute as well as the ALJ's recommendation, it ultimately declined to issue the permit, citing a long-standing state policy in favor of restoring the Everglades.

On appeal, the First District Court of Appeal reversed FDEP's ruling, holding that the balance of factors weighed in favor of issuing the requested permit. The court determined that the ALJ's findings with respect to the first factor were findings of fact that the agency had improperly ignored. Additionally, pursuant to Amendment 6, the court cast aside the agency's interpretation of the second factor, reviewed it without granting any deference, and held that the factor did not count against permit issuance. Upon first glance, it may seem like Amendment 6's timely enactment affected the court's holding. However, the court further bolstered its decision for reversal by stating that, in any case, FDEP's interpretation of the purpose and implications of the second factor was incorrect. Clear error has always been a basis for reversing an agency's legal conclusions. This raises the possibility that the First District would have reached the same decision even in the absence of Amendment 6.

Although Amendment 6 may not have determined the outcome of this case, its enactment highlights a new reality for Florida agencies interpreting controlling statutes in many areas of administrative practice and for those seeking permits from them. Generally, these agencies must leave an ALJ's factual findings intact, but the agency's legal conclusions are now subject to increased scrutiny. This case also highlights the fact that agencies and permit applicants-and litigants-must understand this new reality even for matters that have been ongoing for years.

Our Land Development, Zoning & Environmental team has extensive experience advising clients in all types of environmental permitting and administrative proceedings. For more information, please contact us.