Case Name: MANASOTA-88, INC., et al., Appellants, v. GARDINIER, INC., the Florida Phosphate Council, Inc., and State of Florida, Department of Environmental Regulation, Appellees; MANASOTA-88, INC., Appellant, v. GARDINIER, INC., and State of Florida, Department of Environmental Regulation, Appellees; Dan LYONS and Manasota-88, Inc., Appellants, v. STATE of Florida, DEPARTMENT OF ENVIRONMENTAL REGULATION, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1986-01-07
Citations: 481 So. 2d 948
Docket Number: Nos. BD-124, BD-296 and BE-22
Parties: MANASOTA-88, INC., et al., Appellants, v. GARDINIER, INC., the Florida Phosphate Council, Inc., and State of Florida, Department of Environmental Regulation, Appellees. MANASOTA-88, INC., Appellant, v. GARDINIER, INC., and State of Florida, Department of Environmental Regulation, Appellees. Dan LYONS and Manasota-88, Inc., Appellants, v. STATE of Florida, DEPARTMENT OF ENVIRONMENTAL REGULATION, Appellee.
Judges: THOMPSON, J., concurs.
Reporter: Southern Reporter, Second Series
Volume: 481
Pages: 948–953

Head Matter:
MANASOTA-88, INC., et al., Appellants, v. GARDINIER, INC., the Florida Phosphate Council, Inc., and State of Florida, Department of Environmental Regulation, Appellees. MANASOTA-88, INC., Appellant, v. GARDINIER, INC., and State of Florida, Department of Environmental Regulation, Appellees. Dan LYONS and Manasota-88, Inc., Appellants, v. STATE of Florida, DEPARTMENT OF ENVIRONMENTAL REGULATION, Appellee.
Nos. BD-124, BD-296 and BE-22.
District Court of Appeal of Florida, First District.
Jan. 7, 1986.
Thomas W. Reese, St. Petersburg, for appellants.
Robert L. Rhodes, Jr., Lawrence E. Sellers, Jr. and Lynn H. Townsend of Holland & Knight, Lakeland, for Gardinier, Inc. and Florida Phosphate Council.
Charles G. Stephens and Clare E. Gray, Tallahassee, for Dept, of Environmental Regulation.

Opinion:
MILLS, Judge.
Manasota-88, Inc. (M-88) appeals final administrative orders of the Department of Environmental Regulation (DER) denying its petitions for a hearing pursuant to Section 120.57, Florida Statutes (1983), and for a declaratory statement pursuant to Section 120.565, Florida Statutes (1983). Dan Lyons joins M-88 in an appeal of a final order denying a second petition for declaratory statement. We affirm in part and reverse in part.
Gardinier, Inc. (Gardinier) filed with DER in 1981 an application for an industrial waste permit to construct a phosphogyp-sum disposal field, specifically seeking a Chapter 17-3 ground water permit and determination of compliance with surface water standards. During the pendency of this application, in response to a request from DER, Gardinier submitted a written report on estimated airborne radioactive emissions from the waste pile which would be created. DER requested and received review of the report from HRS. M-88, a non-profit environmental organization, submitted further data of the emissions, to which DER solicited and received Gardinier's response.
In November 1983, M-88 received formal notice of DER's intent to issue the water pollution permits sought by Gardinier. Section 403.061, Florida Statutes (1983), gives DER the power and duty to "establish a permit system whereby a permit may be required for the operation, construction or expansion of any installation that may be a source of air . pollution;" Section 403.087(1) states that "no stationary installation which will reasonably be expected to be a source of air . pollution shall be operated . without an appropriate and currently valid permit." DER provided M-88 with informal, telephonic notice that Gardinier would not be required to obtain an air pollution permit pursuant to these statutes.
M-88 thereupon filed a petition to intervene in Gardinier's permit proceeding, and requested a Section 120.57 hearing on the air pollution issue. Although the hearing officer held that M-88 had "adequately alleged its standing to request a hearing concerning [DER's] notice of intent to issue an industrial waste permit to Gardinier, Inc.," he struck the air pollution issue on the ground that no "agency action" had been taken on such permits. A recommended order to this effect was issued. M-88 filed exceptions, arguing that DER's decision constituted agency action implementing a nonrule policy, i.e., that no air pollution permits v/ould be required from any company with similar phosphate operations. The final order adopted the recommended order, rejecting the exception on the ground that no agency action implementing the alleged nonrule policy had occurred.
During the pendency of the Section 120.-57 request, M-88 sought a declaratory statement from DER pursuant to Section 120.565 as to the applicability of the air pollution permit statutes to the phosphate industry in general; M-88, with Lyons, then sought a second declaratory statement as to their applicability to Gardinier in particular. Both petitions were denied because they sought a declaration as to the effect of the statutes on third parties, contrary to Section 120.565.
The petitions for declaratory statement were correctly denied. Section 120.-565 provides for an agency's opinion "as to the applicability of a specified statutory provision . as it applies to the petitioner in his particular set of circumstances only." Lyons and M-88 sought DER's opinion as to the applicability of statutory provisions to Gardinier, contrary to unam biguous statutory language. We affirm on this issue.
We reverse, however, as to the agency's denial of M-88's request for a Section 120.57 hearing. We do not agree with DER's contention that its action with regard to the air pollution issue was not "agency action" within Section 120.52(2), Florida Statutes (1983). The agency relies on the nature of the original permit proceeding into which M-88 intervened, arguing that its only purpose was to determine Gardinier's entitlement to water pollution permits. However, DER itself, with Gardi-nier's acquiescence and cooperation, created the air pollution issue in the context of that proceeding by its collection and consideration of numerous reports and other information on radioactive emissions. It then made an affirmative decision, which was communicated to M-88, that Gardinier's proposed operation did not require air pollution permits. We hold that, given the circumstances, this communication is the equivalent of an order, and constitutes agency action as defined by Section 120.-52(2).
In its exceptions to the recommended order, M-88 argued that DER's action implemented a nonrule policy against requiring air pollution permits for any operation similar to Gardinier's. To the extent an agency may intend to rely upon or refer to such a policy, it must be established by expert testimony, documentary opinion, or other evidence appropriate to the nature of the issue involved and the agency must expose and elucidate its reasons for its discretionary action. Florida Medical Center v. Department of Health and Rehabilitative Services, 463 So.2d 380 (Fla. 1st DCA 1985), citing E.M. Watkins & Co. v. Board of Regents, 414 So.2d 583, 588 (Fla. 1st DCA 1982). Countervailing evidence and argument is permitted. Mcdonald v. Department of Banking and Finance, 346 So.2d 569, 577 (Fla. 1st DCA 1977).
DER did not deny the existence of the nonrule policy in its final order and does not do so before this court. It relies solely on the lack of "agency action" implementing the policy to deny M-88's entitlement to a hearing. Because we find that agency action did occur, the final order denying M-88's request for hearing is quashed, and the case is remanded for proceedings wherein the agency shall explicate its non-rule policy and permit M-88 to present relevant countervailing evidence and argument.
THOMPSON, J., concurs.
SMITH, J., specially concurs with opinion.