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McManus Enterprises, Inc. v. Nebraska Liquor Control Commission

Supreme Court of Nebraska

May 3, 2019

McManus Enterprises, Inc., doing business as Heidelberg's, appellant,
Nebraska Liquor Control Commission, appellee.

          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 competent evidence, and is neither arbitrary, capricious, nor unreasonable.

         3. Judgments: Appeal and Error. 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 findings.

         4. Administrative Law: Judgments. Whether an agency decision conforms 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: Statutes. For purposes of construction, a rule or regulation of an administrative agency is generally treated like a statute.

         7. ____:____. Properly adopted and filed regulations have the effect of statutory law. 8. Administrative Law. Absent a statutory or regulatory indication to the contrary, language contained in a rule or regulation is to be given its plain and ordinary meaning.

         9. ____ .A rule is open for construction only when the language used requires interpretation or may reasonably be considered ambiguous.

         [303 Neb. 57] 10. ____ . A court will construe regulations relating to the same subject matter together to maintain a consistent and sensible scheme.

         11. ___ .A court must attempt to give effect to all parts of a regulation, and if it can be avoided, no word, clause, or sentence will be rejected as superfluous or meaningless.

         12. Administrative Law: Intent. In determining the meaning of regulatory language, its ordinary and grammatical construction is to be followed, unless an intent appears to the contrary or unless, by following such construction, the intended effect of the provisions would apparently be impaired.

         13. Administrative Law: Liquor Licenses. Under 237 Neb. Admin. Code, ch. 6, § 019.OIF (2012), a licensee cannot be sanctioned for a violation unless the licensee has allowed an unreasonable disturbance to continue.

         14. ____:____. Under 237 Neb. Admin. Code, ch. 6, § 019.01F (2012), in order for "other activity" to be a disturbance, the dangerous activity itself must arise and be of such a nature that may place others in danger.

          Appeal from the District Court for Lancaster County: Andrew R. Jacobsen, Judge. Reversed and remanded with directions.

          Charles D. Humble, of Erickson & Sederstrom, P.C., for appellant.

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

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

          CASSEL, J.


         This appeal turns on the correct interpretation of the Nebraska Liquor Control Commission's "disturbance rule."[1] The rule's plain language applies only where a licensee "allow[s] any unreasonable disturbance; as such term is defined [in the rule], to continue without taking the steps, as set forth [in the [303 Neb. 58] rule]."[2] The commission and the district court on review[3] disregarded that plain language: ignoring the words "to continue." Although we must reverse this license cancellation, we emphasize that our decision does not preclude the commission from adopting a rule that would impose upon licensees a duty to take reasonable steps to prevent disturbances from occurring in the first instance. But its existing rule does not do so, and we are required to apply the rule as written.


         Disturbance Rule Because our decision turns upon the plain language of the disturbance rule, we recite it in full:

019.01F Disturbance: No licensee or partner, principal, agent or employee of any licensee shall allow any unreasonable disturbance; as such term is defined hereunder, to continue without taking the steps, as set forth hereunder, within a licensed premise or in adjacent related outdoor areas.
019.01F1 A "Disturbance" as used in this section shall mean any brawl, fight, or other activity which may endanger the patrons, employees, law enforcement officers, or members of the general public within licensed premises or adjacent related outdoor area. Such term shall include incidents involving, but not necessarily limited to: drug dealing; intoxicated individuals; soliciting of prostitution; or any physical contact between the licensee's agents or employees and its customers, involving any kissing, or any touching of the breast, buttock or genital areas. Any brawl fight or other activity which results in serious injury to any patro[n], employee or members of the [303 Neb. 59]general public shall be reported to law enforcement. Serious injury means any gunshot wou[n]d, knife or other stab wound or any other injury requiring medical treatment onsite or transportation to a medical facility for treatment. Licensees and their employees shall not prohibit or interfere in any way with a patro[n] who chooses to contact law enforcement in the event they are assaulted on the premises.
019.01F2 Unless there is reason to believe that a licensee or partner, principal, agent or employee of any licensee would endanger himself/herself or others, such person shall take such action as is reasonably necessary to terminate the disturbance. Physical force should be exercised only in extreme circumstances and should be limited to the force reasonably required to terminate the disturbance and remove the individual from the licensed premise, without endangering any patron or other person.
019.01F3 In the event efforts taken in accordance with the preceding subparagraph are not successful or if there is reason to believe that the licensee, partner, principal, agent or employee of any licensee may create a danger to himself/herself or others, th[e]n in such event, such person shall immediately contact law enforcement personnel to assist in properly handling the disturbance. In the event law enforcement and/or medical personnel are summoned, the directions and/or orders given by such law enforcement or medical personnel shall be followed.
019.01 F4 A licensee who has conformed with the procedure as set forth in this section shall be deemed to have not permitted a disturbance to occur and continue. Licensees who wish to document their compliance with this rule may maintain a log in which they document disturbances or other unusual occurrences.[4]

         [303 Neb. 60] Events

         John McManus is the owner of McManus Enterprises, Inc. (collectively McManus), which operates Heidelberg's bar in Lincoln, Nebraska. In August 2017, a professional boxing match was held at an arena in Lincoln. The day before the match, an event promoter approached McManus, asking to host an event at Heidelberg's after the ...

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