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Retroactive, Inc. v. Nebraska Liquor Control Commission

Supreme Court of Nebraska

February 9, 2018

Retroactive, Inc., a Nebraska corporation, doing business as funkytown, appellee,
v.
Nebraska Liquor Control Commission, an agency of the State of Nebraska, appellant, and City of Omaha, a political subdivision of the state of Nebraska, appellee.

         1. Judgments: Jurisdiction: Appeal and Error. Determination of a jurisdictional issue which does not involve a factual dispute is a matter of law which requires an appellate court to reach its conclusions independent from a trial court.

         Appeal from the District Court for Lancaster County: Darla S. Ideus, Judge.

          Douglas J. Peterson, Attorney General, and Milissa Johnson-Wiles for appellant.

          Burke J. Harr and Justin D. Eichmann, of Houghton, Bradford & Whitted, PC, L.L.O., for appellee Retroactive, Inc.

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

          Heavican, C.J.

         INTRODUCTION

         The Nebraska Liquor Control Commission (Commission) denied the issuance of a Class C liquor license to applicant Retroactive, Inc., doing business as Funkytown, for premises [298 Neb. 937] located in Omaha, Nebraska. Retroactive sought review in the district court, arguing that the decision of the Commission (1) was arbitrary and capricious and unsupported by evidence and (2) exceeded the authority of the Commission. The City of Omaha (City) filed a motion to dismiss for failure to name the citizen objectors as "necessary parties" to the petition for review. The district court denied the City's motion and entered an order reversing the Commission's decision to deny the Class C liquor license. The Commission appeals. We hold that the district court did not have subject matter jurisdiction, because the Commission did not name the citizen objectors as parties of record to the petition for review.

         BACKGROUND

         Factual Background

         On October 1, 2015, Retroactive applied for a Class C liquor license for a nightclub located at 1516 Jones Street in Omaha (application). Nine objectors filed citizen protests against the application. All of the objectors reside in a residential building that shares a common wall with the proposed nightclub. On December 17, the Commission held a hearing concerning the application.

         At the hearing, the City called three witnesses. First, an assistant city attorney for the City testified that Retroactive's owner previously applied for a liquor license for the same location and that the application was denied. The attorney asked the court to take administrative notice of the file and order of denial for that license. Second, David Hecker, an objector, testified that he objected to the application, because the business proposal was inconsistent with the current status of the neighborhood and the application was identical in all material respects to the one that had previously been denied by the Omaha City Council and the Commission. Third, Billy Coburn, an objector, testified that "the nature of the community in the neighborhood . . . has changed over the last two years since prior clubs have existed at 1516 Jones." Coburn [298 Neb. 938] stated that issuance of the liquor license "will devalue the surrounding properties, affect the safety of the neighborhood, and the adjoining walls were not addressed for sound control." The two objectors who testified were not represented by counsel.

         Procedural Background

         Pursuant to Neb. Rev. Stat. § 53-131 (Cum. Supp. 2016). on October 1, 2015, Retroactive made an application for the Commission's issuance of a Class C liquor license for the location at 1516 Jones Street in Omaha. On November 3, the Omaha City Council held a hearing pursuant to Neb. Rev. Stat. § 53-134 (Cum. Supp. 2016) and passed a resolution to recommend denial of the application. On November 5, the Commission received a recommendation from the Omaha City Council to deny the application. On December 17, pursuant to Neb. Rev. Stat. § 53-133 (Cum. Supp. 2016), the Commission conducted a hearing on the application, and on January 8, 2016, the Commission entered an order denying the application.

         On January 19, 2016, Retroactive filed a petition for review under the Administrative Procedure Act (APA) in the district court. In the petition, Retroactive argued that (1) the January 8 order was arbitrary and capricious, (2) the January 8 order was unsupported by evidence, and (3) the Commission's determination outlined in the January 8 order exceeds its statutory authority.

         The City filed a motion to dismiss on February 24, 2016, arguing that the citizen objectors were "necessary parties" to the action and were not made a party to the petition for review under the APA. The district court filed an order on May 9, overruling the City's motion to dismiss. The court found that "[t]he plain language of § 53-1, 115(4) limits its application to 'for purposes of this section.'" Therefore, the court found that "the citizen protesters who provided written protests and those who testified at the hearing before the Commission were not 'parties of record' as that term is defined by the APA."

         [298 Neb. 939] The district court filed an order on January 24, 2017, reversing the Commission's decision to deny the application. The district court remanded the matter to the Commission to issue a Class C liquor ...


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