Frank A. Shepherd
Frank A. Shepherd (J. Albert Diaz)

The Third District Court of Appeal appeared to favor South Florida Racing Association’s argument Wednesday that it was wrongly denied a summer jai alai permit at Hialeah Park, which has never hosted jai alai.

South Florida Racing, which controls Hialeah Park Racing & Casino, argued it should have been given the permit it was denied in 2013 because it had the lowest earnings from pari-mutuel wagering on quarter horse races in the previous two years.

South Florida Racing had the “smallest play” of all pari-mutuel permit holders in Miami-Dade County for the 2010, 2011 and 2012 fiscal years, according to its appellate brief.

The law said the operator of a pari-mutuel permit in any county with five or more permits whose earnings are the lowest for two consecutive years may convert its permit to run a summer jai alai season or obtain a new permit to conduct summer jai alai games anywhere in the county, not necessarily at the historic Hialeah racetrack.

Garnett Chisenhall, the Tallahassee attorney for the state Department of Business and Professional Regulation, said South Florida Racing elected not to convert its permit.

Chief Judge Frank Shepherd said that was its prerogative.

Chisenhall kept referring to the department’s “strict construction” interpretation of the statute, but Shepherd said, “That doesn’t mean courts can stick whatever language they want.”

He said the law allows the opportunity for a summer permit after two consecutive years of being the lowest pari-mutuel venue in the pool, “so you want us to stick some more verbiage in there is what you want us to do.”

Chisenhall struggled to explain what he meant by strict construction and said there was a “latent ambiguity” in the statute.

“Are you suggesting we must necessarily find the statute ambiguous?” Judge Kevin Emas asked.

“That would be extremely helpful,” Chisenhall said.

“Is there any way for us to find for you without finding the statute ambiguous,” Emas asked. “What does that mean, ‘strictly construed’? It seems to me the language is plain and clear. The triggering event is they’re filing an application and you look at two consecutive years.”

Shepherd then read the law verbatim and agreed it was clear.

The department’s position is that West Flagler Associates Ltd. received a summer jai alai permit in 2011, and another permit could not be issued because two years had not passed by the time South Florida Racing applied Dec. 17, 2012.

South Florida Racing attorney Andrew Lavin of Navon & Lavin in Fort Lauderdale said it didn’t matter that Flagler, an intervenor in the lawsuit, got a permit. The law does not expressly say or infer that two years must pass after the last permit was issued.

He said that would lead to the absurd result that an applicant might have to be the lowest earning gaming site for up to four years.

Emas argued the Legislature would have anticipated this if lawmakers intended such a result, and the law would have language stating “a new clock shall start.”

Chisenhall said, “Well, your honor, it doesn’t look like they put that in there.”

Judge Edwin Scales asked Chisenhall if the department came out and said the statute was ambiguous. Chisenhall said it had not.

Shepherd dismissed Chisenhall with a strong indication that the agency had no case.

“It there’s something peculiar about what’s going on, maybe you get some deference,” Shepherd said. “But if we can read, we don’t let the administrative agencies make the law.”

Chisenhall acknowledged after a question from Scales that the Legislature didn’t delegate authority to promulgate a rule to support the department’s position.

“If the Legislature didn’t delegate any authority to you, it sounds to me like that makes the case even stronger that it’s the Legislature’s prerogative,” Shepherd said.