SOP - 23. Legal Notes

Chapter 120 Petition Process

General Information

Chapter 120, F.S. (also known as the “Administrative Procedures Act”) specifies that any person whose substantial interests are affected by a Department of Environmental Protection (DEP) action has the right to challenge that decision.  Language explaining that right (also called “point of entry” language) is required in any correspondence that could be considered final agency action.  All orders must contain this language but any correspondence in which the DEP makes a decision that affects someone’s substantial interests must contain this language and be issued like an DEP order. Any party affected by the decision can file a petition with the Office of General Counsel (OGC) for an administrative hearing, or request a time extension to do so, at any time during the time period provided in the order (as prescribed by DEP rule), which, for Petroleum Restoration Program (PRP) orders, is typically 21 days (plus five days if the party files by regular US mail).  If the action or decision is not challenged within 21 days after receipt of the notification, it becomes a final decision of DEP. If the notification or order does not include the point of entry language, then the window to petition may remain open indefinitely. Refer all questions to the PRP program attorney in the OGC; if at all in doubt call the OGC.

Mediation

Mediation of agency action is only available when the DEP’s point of entry language provides for mediation which it does only under certain circumstances..  Do not accept or agree to accept any request for mediation.  If you do receive a request, forward it to your Section Leader immediately.  These requests have very short clocks (21 days) and must be immediately scanned and sent to OGC’s agency clerk at Agency_clerk@dep.state.fl.us with a copy to the PRP program attorney. Requests for mediation are evaluated on a case-by-case basis with the Division or District management with OGC. Refer all questions to the PRP program attorney in the OGC.

Petitions

Petitions may be submitted to request a hearing, rulemaking, variance waiver and other actions.  Do not agree in advance to accept or agree to accept any petition.  However, if you do receive a petition, forward it to your Section Leader immediately.  An agency must respond to a petition quickly, depending upon what the petition is for, as short at 14 calendar days.  Therefore petitions and must be scanned immediately and sent to OGC’s agency clerk at Agency_clerk@dep.state.fl.us with a copy to the PRP program attorney.  Refer all questions to the PRP program attorney in the OGC.

Public Records Requests

Essentially all documents handled by the DEP are considered public records pursuant to Chapter 119, F.S.  Any document you review or prepare, including notes, memos, letters, e-mails and electronic documents may be requested by the public.  The ‘public’ includes absolutely everyone, including Contractors.  You should follow the appropriate procedures as detailed in DEP directive 375 “Guidelines for Providing Public Records.”  There are provisions to exempt certain parts of documents from a public record request, sometimes this is call designating the document  as a trade secret, confidential or proprietary. However, the person submitting must clearly identify the specific provisions that s/he is proposing is exempt from Florida’s public records law and provide the citation to Florida’s laws that would allow for the document to be exempt.  .  Immediately refer all requests to exempt any record or document exempt from the public records, regardless of the reason to the PRP program attorney in the OGC.

Restrictive Covenants

PRP works with two kinds of Declaration of Restrictive Covenants (DRC). The first kind of DRC is required whenever a Site Rehabilitation Completion Order is issued with conditions pursuant to Rule 62-780.680(2) or (3), F.A.C. All DRCs whether interim or associated with the SRCOC must be added to the Institutional Control Registry (ICR). The site manager is responsible for completing the ICR forms for posting these restrictions.  All DRCs must be reviewed and approved by the OGC pursuant to the procedures in the Institutional Control Procedures Guidance Document (ICPG). More information on closing sites with restrictive covenants is in the SOP Site Manager Closure Guide webpage.  The ICR Data Entry Sheet and ICPG apply to other programs in the Division of Waste Management and are frequently updated.  Therefore, please refer to the DWM Institutional Controls Registry and ICPG webpage for the most current forms, guidance and information on this topic .

The second kind of DRC that only PRP works with are those associated with Conditional Closure Agreements (CCA) enter into pursuant to Rule 62-772.402(3), F.A.C. Under a CCA the real property owner is agreeing to conditionally closing the IPTF eligible discharge(s) and evidence of this commitment is the recording of an Interim Declaration of Restrictive Covenant.  The interim DRC is recorded with the Clerk of Courts and added to the Institutional Control Registry from the point of approval until the site reaches a conditional closure pursuant to Rule 62-780.680(2) or (3), F.A.C.. At that time, an amended or new DRC may need to be recorded.

Bankruptcy Issues

The following is an excerpt from the DEP OGC Enforcement Manual located online on the General Counsel’s webpage.  Words in italics have been added to provide PRP/Storage Tanks examples (not enforcement).  If you have any questions about this guidance, first contact your program attorney, then the senior tanks enforcement attorney then, lastly the DEP finance/bankruptcy attorney.  Information about attorneys is on the DEP OGC intranet website.

Bankruptcies

It is not unusual for staff involved in enforcement actions to find out either before, during, or after initiating formal enforcement actions that a responsible party has filed or has threatened to file for bankruptcy. The following sections provide some direction as to how to proceed in those circumstances.

Notice

The Department often receives information regarding bankruptcies of property owners, responsible parties, and related entities (other entities & RP may include parties to a SRFA or PCPP agreement). Typically this information arrives in the form of formal Notices mailed from a bankruptcy court containing vital information about the case. However, it is also possible that the Department learns of a bankruptcy proceeding from the newspaper, the entity’s counsel, a landlord, or a neighboring landowner. Under the law, each of these forms of notice is adequate to place the burden on the Department to determine whether it has an interest in the bankruptcy case and to appear and make its claims. Therefore, any knowledge that any employee (or local program on contractor) of the Department has that an entity indebted or obligated to the Department is in bankruptcy needs to be forwarded to OGC (local program to Team 3 first) as soon as possible. In bankruptcy proceedings, like probate proceedings, time frames for making claims are strictly construed and missing them can result in irreparable prejudice to the Department.

If you learn or are advised of a bankruptcy, you need to forward that information to the PRP program attorney in OGC who will coordinate with OGC’s bankruptcy attorney. The full and correct Name of the Debtor is crucial. If it is a corporation, include the name or names under which the corporation is operating as well as the official name under which it has filed. You should try to obtain as much of the following information as possible: the district and state of the Bankruptcy Court where the case was filed (surprisingly, Florida corporations and individuals may file in any state, from Maine to Hawaii), the Case Number, the Date of Filing, and the name of the Debtor’s Attorney. Likewise, any information you have with regard to the Department’s interest in the Debtor will be very helpful. With this information, OGC can locate the case, obtain court records, and appear in the case. The information does not have to be complete before it is forwarded, and any information that is available will assist the Department in investigating whether it has an interest in the case.

Department’s Interest

It will not always be apparent to you, or to your District, why the Department may have an interest in a bankruptcy case of which you have received notices. This can be because the Debtor did not do business in your District or did not operate under the name in the Notice. It is possible that the named Debtor is an officer in a corporation with which the Department is involved. Never dismiss a Notice as unimportant simply because you have not heard of the Debtor, the case was filed in another state, or the name does not appear in the Department’s database. The Department conducts a multitude of activities, and no person can be expected to know every way that a Debtor has or could be obligated to it. OGC will conduct a search of the Legal Case Tracking system, as well as poll the various Districts and Divisions to determine all of the interests that it may have in a case (some Debtors conduct different businesses in different Districts). By forwarding this information to OGC, the appropriate steps can be taken to determine how to proceed. If you indicate that you have a pending proceeding or discussion with the Debtor, you will be contacted to make sure that the actions you are taking are authorized in light of the bankruptcy and that all issues relating to the Debtor are addressed simultaneously.

Effect of Filing Bankruptcy

You may have heard, or be advised by Debtor’s counsel, that the bankruptcy prevents you from proceeding against the Debtor in enforcement, entering in to a Consent Order, or collecting debts owed to the Department. While this is an area with some complexities, the general rule is that you are not prevented from proceeding with any current inspections, notice of violations, or other enforcement proceedings to abate or prevent violations of our statutes. The best course for you to follow when advised of a bankruptcy is to immediately involve your enforcement attorney (and program attorney). You will receive instruction on any changes in procedure that you need to make as a result of the bankruptcy.

Department’s Response to the Filing of Bankruptcy

The OGC will evaluate the nature of the bankruptcy proceeding (there are several types of bankruptcy, and the effects may differ between an individual bankruptcy and a corporate or partnership bankruptcy). In some instances, the Department must make a dollar claim in the bankruptcy case. In this event, you may be contacted to help determine or estimate the claim of the Department in the bankruptcy proceeding. Because all claims made or available to the Department are dealt with in the bankruptcy, it may be necessary to estimate potential or contingent claims. Therefore, when considering whether the Debtor is obligated to the Department, you need to consider payments due in the future, possible defaults of ongoing agreements, and any other circumstance that could result in a Department claim against the Debtor (e.g., default by a previous or current owner in its obligations, outstanding non-program clean ups; penalties, SRFAs, PAC, executed PCPP agreements etc., this does NOT include FPRLIP & ATRP deductibles as those debts to the State are not specific to an individual but are required to participate in those programs.).

When asked to provide information DO NOT send ANY screenshots (STCM, Property Appraiser’s websites, etc.) or simply attach documents (compliance inspection reports, RAPs, etc.).  Doing so is NOT helpful to the bankruptcy attorney. The bankruptcy attorney is not familiar with every single program in the Department and does not have time to decipher STCM codes or technical reports.  The information necessary includes what – exactly - the Department regulations require: tank upgrade or replacement, tank closure, clean up, financial assurance mechanism, etc., with citations to the appropriate rule, statute or permit.  Then provide information regarding the cost estimates of complying with those requirements.  If supporting justification is necessary, then we can get that. 

Parallel Proceedings

The bankruptcy case is a separate and independent proceeding from any existing or potential administrative or state court action. The Debtor will often have different attorneys for each. The OGC will notify the appropriate courts or forums of the Debtor’s bankruptcy. Once you become aware of a bankruptcy involving a Debtor respondent, you need to begin copying both your enforcement attorney as well as the OGC bankruptcy attorney with information that you receive. Co-ordination of these processes is key to achieving the best result for the Department.

Discharge

You may be advised that a Debtor has been “discharged” in bankruptcy. While this again is a technical legal term, with many possible implications, the effect of a discharge is best addressed by OGC. In many cases, the discharge obtained by some Debtors has no effect on the Department’s claims. Likewise, the failure of a Debtor to notify the Department in advance could seriously limit the scope of the discharge. The principal of “discharge” does not alter an entity’s obligation to comply with state statutes (however, finances are radically altered in bankruptcy and if compliance with state statutes requires money such for clean up, financial responsibility – or for the bankruptcy trustee to file a claim with the insurance company- or upgrading a storage tank the Department may want to make a claim to the Bankruptcy Court to set aside funds to pay for those obligations – which is why it's so critical to report this kind of information to OGC as soon as you learn of a bankruptcy). Your attorneys will determine whether the discharge requires any modification of the Department’s procedures in a given case.

Subsequent Actions

Prior bankruptcy proceedings are irrelevant to the current statutory or rule obligations of a Debtor. The statutes and rules of the Department regarding operational standards, as well as fees, financial assurance requirements, and renewal obligations are unaffected by a previous bankruptcy (and are generally applicable to any Debtor while it is in bankruptcy). As a result, the fact that an entity has previously filed for bankruptcy should have no effect on subsequent actions by the Department. However, because some pre-bankruptcy monetary obligations are affected by the bankruptcy (e.g., damage clams, restitution claims), you need to advise OGC of the bankruptcy, regardless of how long ago it took place, whether it was dismissed or resulted in a discharge. This information is maintained in the OGC, and can be important.

Return to: PRP Site Manager Standard Operating Procedures (SOP) webpage.