Abay, L.L.C. v. Nebraska Liquor Control Comm. , 303 Neb. 214 ( 2019 )


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  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    08/02/2019 09:07 AM CDT
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    Nebraska Supreme Court A dvance Sheets
    303 Nebraska R eports
    ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.
    Cite as 
    303 Neb. 214
    A bay, L.L.C., appellant, v. Nebraska
    Liquor Control Commission
    et al., appellees.
    ___ N.W.2d ___
    Filed May 24, 2019.     No. S-18-715.
    1. Administrative Law: Judgments: Appeal and Error. A judgment or
    final order rendered by a district court in a judicial review pursuant to
    the Administrative Procedure Act may be reversed, vacated, or modified
    by an appellate court for errors appearing on the record.
    2. ____: ____: ____. When reviewing an order of a district court under
    the Administrative Procedure Act for errors appearing on the record, the
    inquiry is whether the decision conforms to the law, is supported by com-
    petent evidence, and is neither arbitrary, capricious, nor unreasonable.
    3. Judgments: Appeal and Error. An appellate court, in reviewing a dis-
    trict court’s judgment for errors appearing on the record, will not substi-
    tute its factual findings for those of the district court where competent
    evidence supports those findings.
    4. Administrative Law: Judgments. Whether an agency decision con-
    forms to the law is by definition a question of law.
    5. Administrative Law: Judgments: Statutes: Appeal and Error. To the
    extent that the meaning and interpretation of statutes and regulations
    are involved, questions of law are presented which an appellate court
    decides independently of the decision made by the court below.
    6. Administrative Law: Liquor Licenses: Final Orders: Appeal and
    Error. Proceedings in the district court reviewing a final decision of the
    Nebraska Liquor Control Commission involve review without a jury de
    novo on the agency record.
    7. Administrative Law: Appeal and Error. In a review de novo on the
    record, the district court is required to make independent factual deter-
    minations based upon the record and reach its own independent conclu-
    sions with respect to the matters at issue.
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    303 Nebraska R eports
    ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.
    Cite as 
    303 Neb. 214
    8. Administrative Law: Liquor Licenses: Courts: Evidence: Appeal
    and Error. A district court in its de novo review is not required to give
    deference to the findings of fact made by the Nebraska Liquor Control
    Commission, but it may consider the fact that the commission, sitting
    as the trier of fact, saw and heard the witnesses and observed their
    demeanor while testifying and may give weight to the commission’s
    judgment as to credibility.
    9. Alcoholic Liquors: Liquor Licenses: States. The power of the State
    to absolutely prohibit the manufacture, sale, transportation, or posses-
    sion of intoxicants includes the power to prescribe the conditions under
    which alcoholic beverages may be sold, and it may exercise large discre-
    tion as to the means employed in performing this power.
    10. Courts: Statutes. A statutorily created court has only such authority as
    has been conferred upon it by statute. Thus, its powers are limited to
    those delineated by statute.
    11. Administrative Law: Statutes. Administrative bodies have only that
    authority specifically conferred upon them by statute or by construction
    necessary to achieve the purpose of the relevant act.
    12. Administrative Law: Liquor Licenses. The Nebraska Liquor Control
    Commission may impose conditions on a liquor license.
    Appeal from the District Court for Lancaster County: Darla
    S. Ideus, Judge. Affirmed.
    Michael F. Polk, of Sena, Polk & Stacy, L.L.P., for appellant.
    William Acosta-Trejo, Assistant Omaha City Attorney, for
    appellees City of Omaha et al.
    Douglas J. Peterson, Attorney General, and Milissa Johnson-
    Wiles for appellee Nebraska Liquor Control Commission.
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
    Papik, and Freudenberg, JJ.
    Miller-Lerman, J.
    NATURE OF CASE
    After the Omaha City Council recommended denial, the
    Nebraska Liquor Control Commission (Commission) granted
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    303 Nebraska R eports
    ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.
    Cite as 
    303 Neb. 214
    Abay, L.L.C., a Class D liquor license for its convenience
    store, but restricted Abay from offering “single can sales”
    and “spirits/wine sales less than .375.” Abay appealed the
    order of the Commission to the district court for Lancaster
    County. Following its review de novo on the record, the dis-
    trict court found that Abay had rejected the city council’s sug-
    gested conditions of no single sales of beer and no distilled
    spirits less than 375 milliliters. The district court examined
    these conditions and determined that these restrictions on the
    liquor license were within the Commission’s authority under
    the Nebraska Liquor Control Act, Neb. Rev. Stat. §§ 53-101
    to 53-1,122 (Reissue 2010, Cum. Supp. 2016 & Supp. 2017),
    were reasonable, and were not arbitrary or capricious. The
    district court affirmed the Commission order. Abay appeals.
    Because there was competent evidence in the record for the
    district court’s decision and it was not arbitrary, capricious, or
    unreasonable, we affirm.
    STATEMENT OF FACTS
    In 2017, Abay, doing business as Blondo Convenient Food
    Mart, applied for a Class D liquor license to sell packaged
    alcoholic liquor at its new store at 7901 Blondo Street in
    Omaha, Nebraska. See § 53-124. In July, the City of Omaha
    (City) held a public hearing to review the license application.
    At the city council hearing, Tesfaye Kinde, owner of Abay,
    offered evidence in support of its application. Kinde submit-
    ted photographs and testified about his other two successful
    convenience stores. The City and citizens offered objections
    to the Class D liquor license, in which they asserted a lack
    of need for an additional liquor license in the area. Generally,
    the City and citizen protestors claimed that allowing addi-
    tional liquor sales would lead to more alcohol-related trash
    and vagrancy problems. At the hearing, members of the city
    council asked if Kinde would agree to “no single sales of beer
    in containers less than 40 oz’s [sic] and no distilled spirits less
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    ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.
    Cite as 
    303 Neb. 214
    than 375 ml” to prevent a “cycle of people coming back and
    forth” for “airplane” shots, single cans, and other high alcohol
    content, low-volume beverages. Kinde noted that at one of
    his other convenience stores, he sells more small bottles than
    big bottles of liquor. He claimed that the proposed restrictions
    would “hurt the business a lot.” Kinde declined to accept
    restrictions on the license. The city council subsequently
    denied recommendation for a license application.
    Abay applied to the Commission for a Class D liquor
    license. The Commission held a hearing on Abay’s application
    on October 18, 2017. Evidence was presented by Abay and by
    the City and citizen protestors. The City claimed that sales of
    small bottles were an issue, because such sales might lead to
    more trash in the area. Citizen protestors claimed, inter alia,
    that there “already are small alcohol bottles emptied around
    the neighborhood” and that there are problems with homeless
    people, trash, and alcohol bottles in a nearby creek. Kinde tes-
    tified that at his other locations, he does not permit loitering
    and his employees pick up trash every 2 hours.
    After taking the matter under advisement, in an order dated
    October 26, 2017, the Commission found that Abay met the
    criteria for a license as established in § 53-132(2), and issued
    a restricted license with two conditions: “No single can sales”
    and “No spirits/wine sales less than .375.”
    Abay appealed from the order of the Commission to the
    district court for Lancaster County in accordance with the
    Administrative Procedure Act. See § 53-1,116 (appeal from
    Commission order in accordance with Administrative Procedure
    Act); Neb. Rev. Stat. § 84-917 (Reissue 2014) (judicial review
    under Administrative Procedure Act). The district court noted
    that both the City and citizen protestors “expressed concerns
    about the litter in the area surrounding the store and how sales
    of single cans and small bottles of alcohol can create unsafe
    and unsanitary conditions in the neighborhood.” Following
    its review de novo on the record, the district court found that
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    ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.
    Cite as 
    303 Neb. 214
    Abay had rejected the city council’s suggested conditions
    of no single sales of beer and no distilled spirits less than
    375 milliliters.
    Given the understanding recited in its factual findings that
    the license permitted by the Commission order was conditioned
    on no single beer sales and no spirits or wine less than 375 mil-
    liliters, the district court determined that the Commission pos-
    sessed the authority to grant a license with reasonable restric-
    tions and conditions and concluded that the Commission’s
    restrictions were reasonable and not arbitrary or capricious.
    The district court affirmed the Commission order.
    Abay appeals the order of the district court.
    ASSIGNMENTS OF ERROR
    Abay claims, restated, that the district court erred when it
    affirmed the order of the Commission because, in its view, the
    Commission lacks statutory authority to impose conditions or
    restrictions on a liquor license, and, in any event, the condi-
    tions imposed by the Commission were arbitrary, unreasonable,
    and vague as a matter of law.
    STANDARD OF REVIEW
    [1-5] A judgment or final order rendered by a district court
    in a judicial review pursuant to the Administrative Procedure
    Act may be reversed, vacated, or modified by an appellate
    court for errors appearing on the record. McManus Enters.
    v. Nebraska Liquor Control Comm., ante p. 56, ___ N.W.2d
    ___ (2019). When reviewing an order of a district court under
    the Administrative Procedure Act for errors appearing on the
    record, the inquiry is whether the decision conforms to the
    law, is supported by competent evidence, and is neither arbi-
    trary, capricious, nor unreasonable. 
    Id. An appellate
    court, in
    reviewing a district court’s judgment for errors appearing on
    the record, will not substitute its factual findings for those of
    the district court where competent evidence supports those
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    ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.
    Cite as 
    303 Neb. 214
    findings. 
    Id. Whether an
    agency decision conforms to the
    law is by definition a question of law. 
    Id. To the
    extent that
    the meaning and interpretation of statutes and regulations are
    involved, questions of law are presented which an appellate
    court decides independently of the decision made by the court
    below. 
    Id. ANALYSIS As
    an initial matter, we note that the district court reviews
    a decision of the Commission de novo on the record under the
    Administrative Procedure Act. See § 84-917(5)(a). As stated
    above, in reviewing a district court’s judgment for errors
    appearing on the record, we will not substitute our factual find-
    ings for those of the district court where competent evidence
    supports those findings.
    [6-8] Proceedings in the district court reviewing a final deci-
    sion of the Commission involve review without a jury de novo
    on the agency record. See Schwarting v. Nebraska Liq. Cont.
    Comm., 
    271 Neb. 346
    , 
    711 N.W.2d 556
    (2006). The district
    court is required to make independent factual determinations
    based upon the record and reach its own independent conclu-
    sions with respect to the matters at issue. See 
    id. The district
    court is not required to give deference to the findings of fact
    made by the Commission, but it may consider the fact that the
    Commission, sitting as the trier of fact, saw and heard the wit-
    nesses and observed their demeanor while testifying and may
    give weight to the Commission’s judgment as to credibility.
    See 
    id. The district
    court may affirm, reverse, or modify the
    Commission’s decision or remand the case for further proceed-
    ings. § 84-917(6)(b).
    In this case, the district court made indepth factual deter-
    minations, and as we read the district court order, it found
    competent evidence in the record that the conditions in the
    Commission order prohibited single can sales of beer and
    “no distilled spirits less than 375 ml.” To the extent that this
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    ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.
    Cite as 
    303 Neb. 214
    finding modified the Commission order, it was within the
    district court’s authority to do so under the Administrative
    Procedure Act. See § 84-917(6)(b).
    Abay contends that the Commission is empowered only
    to grant or deny a license and cannot impose conditions on a
    license. We do not agree.
    [9] It is well established that the power of the State to
    absolutely prohibit the manufacture, sale, transportation, or
    possession of intoxicants includes the power to prescribe the
    conditions under which alcoholic beverages may be sold, and it
    may exercise large discretion as to the means employed in per-
    forming this power. Gas ’N Shop v. Nebraska Liquor Control
    Comm., 
    229 Neb. 530
    , 
    427 N.W.2d 784
    (1988) (citing Major
    Liquors, Inc. v. City of Omaha, 
    188 Neb. 628
    , 
    198 N.W.2d 483
    (1972)). Nebraska appellate courts and the Commission
    itself have long relied on this reasoning to conclude that the
    Commission can impose restrictions on a license as part of
    prescribing the conditions under which alcoholic beverages
    may be sold.
    In F & T, Inc. v. Nebraska Liquor Control Comm., 7 Neb.
    App. 973, 
    587 N.W.2d 700
    (1998), the Nebraska Court of
    Appeals concluded that the power of the State to absolutely
    prohibit the manufacture, sale, transportation, or possession
    of intoxicants includes the power to prescribe the condi-
    tions under which alcoholic beverages may be sold and that
    it may exercise large discretion as to the means employed
    in performing this power. See, also, Gas ’N 
    Shop, supra
    .
    The court’s recognition of the broad range of powers given
    to the Commission through its statutory authority, includ-
    ing the ability to impose conditions explained in F & T, Inc.
    has since been followed both explicitly and implicitly. See,
    e.g., City of Omaha v. C.A. Howell, Inc., 
    20 Neb. Ct. App. 711
    ,
    
    832 N.W.2d 30
    (2013). In case No. S-18-045, an unpub-
    lished memorandum opinion filed on December 19, 2018,
    we recently reached a similar result in ANS, Inc. v. Nebraska
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    Liquor Control Comm., in which we affirmed the order of the
    district court which had affirmed the order of the Commission
    which had found, inter alia, that a bar had violated an express
    condition of its Class C liquor license prohibiting a cer-
    tain individual from involvement with the daily operation of
    the bar.
    We further observe that because the Nebraska Liquor
    Control Act has been judicially construed to authorize the
    Commission to fix certain reasonable requirements upon a
    licensee and that construction has not evoked an amendment,
    we presume that the Legislature has acquiesced in the court’s
    determination of the Legislature’s intent. See State v. Coble,
    
    299 Neb. 434
    , 
    908 N.W.2d 646
    (2018).
    Although not explicit in F & T, Inc., we conclude that the
    authority of the Commission to impose conditions is consistent
    with its statutory powers. Section 53-101.05 provides:
    The Nebraska Liquor Control Act shall be liberally
    construed to the end that the health, safety, and welfare
    of the people of the State of Nebraska are protected and
    temperance in the consumption of alcoholic liquor is
    fostered and promoted by sound and careful control and
    regulation of the manufacture, sale, and distribution of
    alcoholic liquor.
    Section 53-116 provides: “The power to regulate all phases
    of the control of the manufacture, distribution, sale, and traf-
    fic of alcoholic liquor, except as specifically delegated in the
    Nebraska Liquor Control Act, is vested exclusively in the
    [C]ommission.” See, also, § 53-132 (regarding requirements
    for issuing retail license).
    [10-12] We have repeatedly noted that
    a statutorily created court has only such authority as has
    been conferred upon it by statute. Thus, its powers are
    limited to those delineated by statute. [Citation omitted.]
    Administrative bodies, likewise, have only that author-
    ity specifically conferred upon them by statute or by
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    construction necessary to achieve the purpose of the rel-
    evant act.
    Jolly v. State, 
    252 Neb. 289
    , 290, 
    562 N.W.2d 61
    , 63 (1997).
    Following our independent review of the law, we conclude that
    the statutes confer authority for the Commission to impose
    conditions on a liquor license and that the decisions of the
    Commission and of the district court in this case conform to
    the law. McManus Enters. v. Nebraska Liquor Control Comm.,
    ante p. 56, ___ N.W.2d ___ (2019). Thus, we reject Abay’s
    suggestion that the Commission cannot impose conditions on
    a liquor license.
    Abay also maintains that because the Commission order did
    not explicitly refer to volume, the district court erred when it
    affirmed the reference in the Commission order relative to dis-
    tilled spirits “less than .375.” We do not believe that the district
    court erred.
    As discussed above, the district court effectively found that
    the order should be read as “375 ml” and it found support in
    the record for this reading. To the extent that the district court
    order modified the Commission order, it had the authority to
    do so. § 84-917(6)(b). In its ruling, the district court empha-
    sized “the recommendation of the local governing body” in
    an effort to highlight the reasonableness of the recommenda-
    tion of the city council members that a license be restricted to
    “no distilled spirits less than 375 ml” which restriction was
    ultimately adopted by the Commission. The 375-milliliters
    volume is consistent with the concerns expressed by citizen
    protestors, also highlighted by the district court, about small
    bottles of liquor creating additional litter which would exacer-
    bate an existing litter problem in the neighborhood and nearby
    creek. As noted above, we review this district court order for
    errors appearing on the record. McManus 
    Enters., supra
    . Our
    review shows that there was competent evidence in the record
    for the district court’s decision. It was neither arbitrary, capri-
    cious, nor unreasonable.
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    ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.
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    CONCLUSION
    Following our review of the district court order for errors
    appearing on the record, we reject Abay’s assignments of
    error effectively challenging the validity and specificity of
    conditions on its Class D liquor license. In doing so, we hold
    that the Nebraska Liquor Control Act, §§ 53-101 to 53-1,122,
    empowers the Commission to include conditions on a liquor
    license if those restrictions are consistent with the purpose of
    the Nebraska Liquor Control Act and are reasonably necessary
    to the protection of the health, safety, and welfare of the people
    of the State of Nebraska and to the promotion and fostering of
    temperance in the consumption of alcohol. See § 53-101.05.
    The district court order was not arbitrary, capricious, or unrea-
    sonable, and there was competent evidence in the record for its
    decision. Accordingly, we affirm.
    A ffirmed.
    

Document Info

Docket Number: S-18-715

Citation Numbers: 303 Neb. 214

Filed Date: 5/24/2019

Precedential Status: Precedential

Modified Date: 8/2/2019