Title: Citizens of State of Fla. v. Clark

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida 
 
____________ 
 
No. SC2022-0094 
____________ 
 
CITIZENS OF THE STATE OF FLORIDA, etc., 
Appellant, 
 
vs. 
 
GARY F. CLARK, etc., et al., 
Appellees. 
 
November 9, 2023 
 
GROSSHANS, J. 
 
We have for review a decision of the Public Service 
Commission allocating partial replacement power costs to Duke 
Energy Florida, LLC.1  We affirm, finding that the Office of Public 
Counsel (OPC) did not properly preserve its legal challenges and 
therefore waived the arguments it now presents in this appeal. 
I. 
 
In December 2020, a coal-fired steam power plant operated by 
Duke Energy Florida, LLC (DEF) unexpectedly went offline.  Before 
 
1.  We have jurisdiction.  See art. V, § 3(b)(2), Fla. Const.  
 
- 2 - 
bringing the plant—known as CR4—back online, the operator 
needed to synchronize the generator’s electrical parameters to the 
power grid.2 
DEF operators first attempted automatic synchronization, but 
the effort failed.  Roughly 10 minutes later, operators tried to 
perform a system reset by manually forcing a breaker to close.  
Under normal circumstances, the manual sync check relay3 would 
prevent closure and return the unit to “automatic” mode, permitting 
additional automatic synchronization attempts.  The manual sync 
check relay unexpectedly failed, and the breaker closed out of 
phase, harming the generator rotor and forcing an outage. 
After the outage, DEF performed a Root Cause Analysis (RCA) 
to evaluate the factors contributing to the event and possible 
corrective measures.  The RCA identified two primary causes: 
 
2.  Synchronization, which can be done either manually or 
automatically, involves (1) matching the generator voltage and 
frequency to the system voltage and frequency and (2) monitoring 
the phase angle to ensure the breaker close circuit is complete 
when the angle aligns. 
 
3.  A manual sync check relay is a device used to verify that 
two sides of a breaker match before closing. 
 
- 3 - 
(1) the failure of the manual sync check relay and (2) the operator’s 
failure to follow written operational procedures. 
DEF then petitioned the Public Service Commission for 
recovery of all its replacement power costs, arguing that DEF’s 
actions were “reasonable and prudent” with respect to the factors 
leading to the forced outage.  OPC and other parties challenged the 
petition.4  
 
The Commission held an evidentiary hearing to resolve issues 
concerning DEF’s prudence.  To establish its prudence, DEF called 
one witness who testified that the operator’s action plus the failed 
check relay led to the plant’s damage. 
After the hearing, the parties submitted additional arguments, 
and the Commission held an agenda conference.  At this 
conference, the commissioners discussed, sua sponte but without 
objection, mitigating circumstances and the division of financial 
responsibility.  Ultimately, the Commission unanimously voted to 
grant DEF’s recovery of fifty percent of the replacement power costs 
associated with the CR4 outage.   
 
4.  The parties stipulated that DEF incurred $14.4 million in 
replacement costs due to the out-of-phase synchronization. 
 
- 4 - 
The Commission’s six-page final order summarized the 
positions of the parties and evidence presented, noted that DEF 
bore the burden of proof, and concluded that two causes led to the 
outage.  Notably, in making that conclusion, the Commission 
agreed that the operator’s failure to follow written procedures 
directly led to the outage but found two “mitigating factors”: the 
reliability of the manual sync check relay, and the operator’s 
reliance on past success of the actions taken. 
 
OPC filed a motion for reconsideration with the Commission.  
It asserted that the Commission’s decision to consider mitigating 
factors was not authorized by law.  OPC also argued that there was 
insufficient evidence and factual findings to support the equal 
division of financial responsibility.  Prior to obtaining a ruling on 
the motion, OPC appealed to this Court for judicial review and 
subsequently withdrew the motion for reconsideration. 
II. 
OPC raises a series of interrelated legal challenges questioning 
the authority of the Commission to assign partial costs and 
consider mitigating factors when making a prudence 
 
- 5 - 
determination.5  It also argues that the Commission erroneously 
interpreted and applied the burden of proof.  In response, DEF 
argues that these issues have not been preserved for our review.  
We agree with DEF’s preservation arguments and affirm on that 
basis. 
It is well established that issues not properly preserved are 
waived.  Sunset Harbour Condo. Ass’n v. Robbins, 914 So. 2d 925, 
928 (Fla. 2005) (holding that it is “not appropriate for a party to 
raise an issue for the first time on appeal”); Tillman v. State, 471 So. 
2d 32, 35 (Fla. 1985); see also DeLisle v. Crane Co., 258 So. 3d 
1219, 1237 (Fla. 2018) (Canady, C.J., dissenting) (“Parties every day 
make choices in litigating cases that limit their options for review.  
And parties ordinarily must live with the choices they make.”); 
Carducci v. Regan, 714 F.2d 171, 177 (D.C. Cir. 1983) (The premise 
of our adversarial system is that appellate courts do not sit as self-
directed boards of legal inquiry and research, but essentially as 
 
5.  To the extent that OPC separately advances a sufficiency of 
the evidence argument, that argument also does not support 
reversal.   
 
- 6 - 
arbiters of legal questions presented and argued by the parties 
before them.”). 
Parties are required to preserve arguments because it allows 
the lower tribunal to consider and resolve errors when they arise, 
rather than wait for the process of an appeal and expend the 
judicial resources that come with that procedure.  Harrell v. State, 
894 So. 2d 935, 940 (Fla. 2005) (stating that the purpose of the 
preservation rule is to notify the trial judge of possible error and 
offer a chance to correct it at an early stage); Castor v. State, 365 
So. 2d 701, 703 (Fla. 1978).  The preservation requirement also 
serves the purpose of treating the parties, the court, and the 
judicial system fairly.  City of Orlando v. Birmingham, 539 So. 2d 
1133, 1134 (Fla. 1989); Eaton v. Eaton, 293 So. 3d 567, 568 (Fla. 
1st DCA 2020). 
One specific preservation principle comes into play when a 
final order addresses substantive issues or reaches legal 
conclusions that have not been previously raised or challenged.  If 
this occurs, a party must file a motion for rehearing to preserve 
 
- 7 - 
those alleged errors for appellate review.6  Holland v. Cheney Bros., 
Inc., 22 So. 3d 648, 650 (Fla. 1st DCA 2009); Morgan v. Am. 
Airlines, 296 So. 3d 565, 566 (Fla. 1st DCA 2020). 
These preservation principles are no less applicable in the 
context of formal administrative adjudication.  Fla. Dep’t of Bus. & 
Pro. Regul., Div. of Pari-Mutuel Wagering v. Inv. Corp. of Palm Beach, 
747 So. 2d 374, 385 (Fla. 1999) (applying the preservation 
requirement to review of a declaratory statement); see also Stueber 
v. Gallagher, 812 So. 2d 454, 456 (Fla. 5th DCA 2002) (“In 
administrative appeals a claim of error cannot be raised for the first 
time on appeal.”); Richards v. Dep’t of Rev. Child Support Program, 
306 So. 3d 220, 221 (Fla. 3d DCA 2020) (discussing preservation 
requirement in administrative hearings).7 
 
6.  Though, generally, a challenge to a final order would be 
termed a “Motion for Rehearing,” and a challenge to a nonfinal 
order termed a “Motion for Reconsideration,” see Fla. R. Civ. P. 
1.530, the Florida Administrative Code uses the word 
“reconsideration” when discussing challenges to final orders in the 
administrative context, see Fla. Admin. Code R. 25-22.060. 
 
7.  Our preservation requirement does not extend to 
determinations of whether there is competent substantial evidence 
supporting an order, or allegations of fundamental error.  See Fla. 
R. Civ. P. 1.530(e); Pumphrey v. Dep’t of Child. & Fams., 292 So. 3d 
1264 (Fla. 1st DCA 2020). 
 
- 8 - 
In this case, the alleged legal errors—burden-shifting, 
misplaced reliance on mitigating circumstances, and division of 
financial responsibility—first appeared in the Commission’s final 
order.  Though OPC filed a motion for reconsideration, it withdrew 
the motion without giving the Commission a fair opportunity to 
correct the alleged errors raised in the motion.  Thus, OPC failed to 
preserve these arguments.  See Pisano v. Mayo Clinic Florida, 333 
So.3d 782, 788 (Fla. 1st DCA 2022).  This failure constrains our 
review—that is, we can only reverse if those errors rise to the level 
of fundamental error.  Aills v. Boemi, 29 So. 3d 1105, 1109 (Fla. 
2010).  We have carefully reviewed the record and conclude that, 
even assuming error, that error would not be fundamental. 
To reiterate, we do not discount the significance of the issues 
raised by OPC.  Instead, our refusal to exempt OPC’s arguments 
from the preservation requirement stems from our commitment to 
the critical interests served by preservation and the structural 
limitations on the scope of our appellate review of lower tribunal 
decisions. 
 
- 9 - 
III. 
 
For the reasons stated above, we affirm the Final Order of the 
Public Service Commission. 
 
It is so ordered. 
MUÑIZ, C.J., and CANADY, COURIEL, and FRANCIS, JJ., concur. 
MUÑIZ, C.J., concurs with an opinion. 
LABARGA, J., concurs in result. 
SASSO, J., did not participate. 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION 
AND, IF FILED, DETERMINED. 
 
MUÑIZ, C.J., concurring. 
I concur in the Court’s opinion but write briefly to clarify the 
preservation rule that dictates the outcome in this case. 
 
The Court says that “[i]n this case, the alleged legal errors . . . 
first appeared in the Commission’s final order.”  Majority op. at 8.  
“If this occurs,” the Court says, “a party must file a motion for 
rehearing to preserve those alleged errors for appellate review.”  Id. 
at 6-7.  As authority for this proposition, the Court cites two cases 
from the First District Court of Appeal: Holland v. Cheney Bros., 
Inc., 22 So. 3d 648, 650 (Fla. 1st DCA 2009), and Morgan v. Am. 
Airlines, 296 So. 3d 565, 566 (Fla. 1st DCA 2020). 
 
- 10 - 
 
Those First District cases in turn relied on an earlier case that 
the Court does not cite, Hamilton v. R.L. Best International, 996 So. 
2d 233 (Fla. 1st DCA 2008).  Hamilton illuminates—and limits—the 
preservation principle in play here.  The Hamilton court observed 
that “[m]ost issues are raised by an argument that is presented 
during the course of the proceeding and resolved in the final order.”  
Id. at 234.  The court went on: “In some instances, however, the 
issue may be one that arises for the first time in the final order 
itself.”  Id.  Hamilton holds that, when an issue first appearing in 
the final order gives rise to asserted error, the aggrieved party must 
file a motion for rehearing as a predicate to seeking appellate 
review.  Id. 
 
The Hamilton principle applies in this case.  The parties’ post-
hearing briefs took an all-or-nothing position.  Each party assumed 
that the Commission faced a binary prudence determination and 
that the resulting award had to be zero or $14.4 million (the 
undisputed amount of the replacement power costs), depending on 
whether the utility met its burden of proof as to prudence.  But the 
Commission itself, after a post-hearing discussion limited to 
Commission members and staff, decided to pursue a third path.  
 
- 11 - 
One commissioner encapsulated the group’s thinking: “[T]his is one 
of those Solomon decisions, can you split the baby.”  The ensuing 
legal issues had not been litigated by the parties, who could not 
have anticipated that the Commission’s final order would announce 
such an unorthodox approach. 
 
Readers of the Court’s opinion must bear this context in mind 
when applying today’s precedent to preservation disputes involving 
alleged legal errors that “first appear” in a final order.  The appellate 
issues that the Court today finds unpreserved are ones that the 
Commission itself created by resolving this case along lines that 
neither party advocated.  Our decision today does not address 
preservation in the context of issues that are litigated by the parties 
and then resolved (correctly or not) in a final order. 
An Appeal from the Florida Public Service Commission 
Richard Gentry, Public Counsel, Mary A. Wessling, Associate Public 
Counsel, and Charles Rehwinkel, Deputy Public Counsel, 
Tallahassee, Florida, 
 
 
for Appellant Citizens of the State of Florida 
 
Keith C. Hetrick, General Counsel, Samantha M. Cibula, Attorney 
Supervisor, Margo A. DuVal, Senior Attorney, and Jonathan H. 
Rubottom, Senior Attorney, Florida Public Service Commission, 
Tallahassee, Florida, 
 
 
- 12 - 
for Appellee Florida Public Service Commission 
 
Dianne M. Triplett, Matthew R. Bernier, and Stephanie A. Cuello of 
Duke Energy Florida LLC, Tallahassee, Florida; Michael P. Silver 
and Alyssa L. Cory of Shutts & Bowen LLP, Tampa, Florida; and 
Daniel E. Nordby of Shutts & Bowen LLP, Tallahassee, Florida, 
 
for Appellee Duke Energy Florida, LLC