Hartman-Tyner, Inc. v. Division of Pari-Mutuel Wagering, Department of Business & Professional Regulation

Citations: 923 So. 2d 559; 2006 Fla. App. LEXIS 3719Docket: No. 1D05-5430

Court: District Court of Appeal of Florida; March 16, 2006; Florida; State Appellate Court

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Petitioners, holders of pari-mutuel wagering permits licensed by the Division of Pari-Mutuel Wagering, have sought judicial review of an emergency rule that repeals Florida Administrative Code Rule 61D-11.027. They contend that the Division's assertion of an immediate danger to public health, safety, or welfare does not substantiate the need for emergency rulemaking as per section 120.54(4), Florida Statutes (2005). The court agrees and invalidates the emergency rule. The Division justified the emergency repeal by citing unauthorized "no-limit" poker tournaments, claiming that the remaining provisions of the rule could mislead the regulated parties regarding the legality of such tournaments. The court confirms its jurisdiction to review the emergency rule, emphasizing that petitioners argue their rights are impacted. In emergency rulemaking, the court focuses on adherence to procedural requirements rather than the substantive validity of the rule. Section 120.54(4)(a) allows agencies to adopt emergency rules when immediate danger is present, provided they articulate clear and persuasive reasons for the emergency and follow fair procedures. The agency's justification must be factually explicit at the time of rule adoption to bypass standard rulemaking processes.

The Division's assertion of an immediate danger related to no-limit poker tournaments is unsupported by sufficient evidence. While it referenced one advertisement from a licensed cardroom, it failed to demonstrate that other cardrooms were conducting similar tournaments or that this would mislead licensees about the authorization of such events under rule 61D-11.027. Furthermore, the Division did not establish that any members of the public faced actual threats to their health, safety, or welfare due to these tournaments. Prior case law (Fla. Health Care Ass’n) indicates that without a factual basis showing potential consumer deception leading to risk, claims of immediate danger are inadequate. The petitioners argued that neither previous rulings nor the ongoing conduct of no-limit poker tournaments posed an immediate danger to public welfare, thus the Division's rationale did not meet the emergency criteria of Florida Statutes section 120.54(4)(a). Consequently, the petition is granted, and emergency rule 61DER05-1 is deemed invalid. Rule 61D-11.027 outlines specific requirements for poker tournaments, including the necessity of licensed facilities, minimum player participation, and adherence to established rules.

Cardroom operators must not allow participants to pay fees for re-entry into the same tournament, and elimination from a tournament is final. Each hand has a designated winner, and progressive games are prohibited. Tournaments must use distinct tournament chips provided in exchange for an entry fee, with all players receiving an equal quantity. These chips have no cash value and represent only tournament points, which determine winners and final placements. Prizes cannot exceed the total entry fees collected, and no table rake is permitted during play. Gross receipts refer to total entry fees received, which must be kept separate until counted, with tournament activity reported using BPR Form 16-008 by the fifth day of each month. The cardroom operator must submit tournament rules to the division and provide copies to participants upon request, including details about prizes, tournament duration, blinds, and wagering rules. A prior case affirmed that certain rules violated statutory provisions regarding rulemaking authority and were deemed arbitrary.