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Amend v. Nebraska Public Service Commission

Supreme Court of Nebraska

January 12, 2018

Karen Amend et al., appellants,
Nebraska Public Service Commission, appellee.

         1. Motions to Dismiss: Pleadings: Appeal and Error. A district court's grant of a motion to dismiss on the pleadings is reviewed de novo, accepting the allegations in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party.

         2. Statutes: Appeal and Error. Statutory interpretation presents a question of law, for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.

         3. Tort Claims Act: Appeal and Error. Whether the allegations made by a plaintiff constitute a cause of action under the State Tort Claims Act or whether the allegations set forth claims which are precluded by the exemptions set forth in the act is a question of law, for which an appellate court has a duty to reach its conclusions independent of the conclusions reached by the district court.

         4. Tort Claims Act: Immunity: Waiver: Appeal and Error. An exception to the State's waiver of immunity under the State Tort Claims Act is an issue that the State may raise for the first time on appeal and that a court may consider sua sponte.

         5. Jurisdiction: Appeal and Error. An appellate court has an independent duty to decide jurisdictional issues on appeal, even if the parties have not raised the issue.

         6. Constitutional Law: Immunity: Waiver. Under the 11th Amendment, a nonconsenting state is generally immune from suit unless the state has waived its immunity.

         7. Tort Claims Act: Immunity: Waiver. The State Tort Claims Act allows a limited waiver of the State's sovereign immunity, subject to statutory exceptions.

         8. Statutes: Appeal and Error. Appellate courts give statutory language its plain and ordinary meaning and will not resort to interpretation [298 Neb. 618] to ascertain the meaning of statutory words which are plain, direct, and unambiguous.

         9. Statutes: Immunity: Waiver. Statutes that purport to waive the State's protection of sovereign immunity are strictly construed in favor of the sovereign and against the waiver.

         10. Immunity: Waiver. In order to strictly construe against a waiver of sovereign immunity, courts broadly read exemptions from a waiver of sovereign immunity.

         11. Statutes: Immunity: Waiver. A waiver of sovereign immunity is found only where stated by the most express language of a statute or by such overwhelming implication from the text as will allow no other reasonable construction.

         12. Political Subdivisions Tort Claims Act: Tort Claims Act. The discretionary function exception is expressed in nearly identical language in the State Tort Claims Act and the Political Subdivisions Tort Claims Act; thus, cases construing the state exception apply as well to the exception granted to political subdivisions.

         13. Tort Claims Act: Immunity: Appeal and Error. An appellate court must determine whether sovereign immunity lies from the nature of the underlying dispute. Where the facts are undisputed, whether an exception to immunity under the State Tort Claims Act precludes suit is a question of law.

         14. Public Service Commission: Constitutional Law: Administrative Law. The Public Service Commission's authority to regulate public grain warehouses is purely statutory, in contrast to its plenary authority to regulate common carriers under Neb. Const, art. IV, § 20.

         15. Public Service Commission: Tort Claims Act. The Public Service Commission is a state agency for purposes of the State Tort Claims Act, and as a result, the provisions of the act are applicable in tort suits against the commission.

         16. Tort Claims Act: Licenses and Permits. State agencies may not be sued under the State Tort Claims Act for claims based upon the failure to suspend or revoke a license.

         17. Appeal and Error. An appellate court is not obligated to engage in an analysis that is not necessary to adjudicate the case and controversy before it.

         Appeal from the District Court for Lancaster County: Susan I. Strong, Judge. Affirmed.

          Shawn D. Renner and Andre R. Barry, of Cline, Williams, Wright, Johnson & Oldfather, L.L.R, for appellants.

         [298 Neb. 619] Douglas J. Peterson, Attorney General, and Timothy R. Ertz for appellee.

          Heavican, C.J., Miller-Lerman, Cassel, Stacy, Kelch, and Funke, JJ.

          FUNKE, J.

         This appeal concerns the dismissal of a complaint filed in the district court for Lancaster County under Nebraska's State Tort Claims Act (STCA)[1] which alleged the Nebraska Public Service Commission (PSC), the appellee, negligently failed to enforce Nebraska statutes and regulations against Pierce Grain Elevator, Inc. (PEI). The district court ruled appellants' claims were grounded in exceptions to the STCA's limited waiver of sovereign immunity and granted the PSC's motion to dismiss. We affirm.

         I. BACKGROUND

         The following statement of facts is taken from allegations in appellants' complaint, which we accept as true for purposes of reviewing the district court's dismissal of the complaint.

         Appellants are a group of over 30 farmers and farm management customers of PEI, a grain warehouse in northeast Nebraska, which failed and closed in March 2014. Throughout the fall of 2013 and spring of 2014, each appellant conducted business with PEI, unaware that PEI was financially unstable.

         On July 15, 2013, the PSC performed a compliance review of PEI which showed outstanding checks written by PEI exceeded PEI's account balance by more than $603, 000. PEI's owner equity was over $5.8 million in the negative, and its working capital ratio was $7.2 million in the negative. The PSC found PEI had over a half-million-dollar working capital deficiency dating back to at least December 31, 2012. The [298 Neb. 620] PSC contacted PEI's bank and expressed concern but took no further action. Until its closure, PEI's net worth and working capital ratio remained negative by millions of dollars. Nevertheless, PEI continued to contract with appellants and take possession of their grain.

         On March 5, 2014, the PSC terminated PEI's grain warehouse and grain dealer licenses. Appellants were in large part unpaid for their grain. Appellants suffered a cumulative financial loss of over $2.56 million.

         In June 2016, appellants filed a complaint against the PSC under the STCA which alleged their losses resulted from the PSC's negligent failure to perform its obligations under Nebraska law. Appellants' lawsuit claims the PSC failed to enforce several Nebraska statutes and regulations which impose minimum financial requirements for grain dealers. In particular, appellants highlight a regulatory procedure which they contend, based on the facts of this case, imposed a mandatory duty on the grain warehouse director for the PSC to file a complaint before the PSC concerning PEI's law violations, obtain a hearing on the matter, and notify PEI and its security provider. Appellants contend, due to the PSC's failure to fulfill its legal duties, PEI continued to conduct business with appellants, which caused appellants' financial losses.

         The PSC responded to appellants' complaint by moving to dismiss under Neb. Ct. R. Pldg. § 6-1112(b)(1). Following a hearing, the district court granted the PSC's motion. The court found appellants' suit was barred by sovereign immunity, because the substance of appellants' claims fell within the "failure to suspend or revoke a license" exception to the STCA's limited waiver of immunity provided in § 81-8, 219(8). The court further found appellants' suit was barred by the STCA's discretionary function exception provided in § 81-8, 219(1). The court dismissed appellants' claims with prejudice for lack of subject matter jurisdiction. Appellants filed an appeal, and we granted their motion to bypass the Nebraska Court of Appeals.

         [298 Neb. 621] II. ASSIGNMENTS OF ERROR

         Appellants assign, restated and reordered, the district court erred in (1) dismissing appellants' claims for lack of subject matter jurisdiction under § 6-1112(b)(1) based on exceptions to the STCA, (2) concluding that appellants' claims are barred by the license revocation exception in § 81-8, 219(8), (3) concluding that appellants' claims are barred by the discretionary ...

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