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Nebraska Supreme Court Advance Sheets

303 Nebraska Reports

ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 303 Neb. 214

Abay, 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 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: 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 determinations based upon the record and reach its own independent conclusions with respect to the matters at issue.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

07/26/2019 09:07 AM CDT
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Nebraska Supreme Court Advance Sheets

303 Nebraska Reports

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 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 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 JohnsonWiles 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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Nebraska Supreme Court Advance Sheets

303 Nebraska Reports

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 district court found that Abay had rejected the city council’s suggested 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 submitted 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 additional 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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303 Nebraska Reports

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 testified 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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303 Nebraska Reports

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 milliliters, the district court determined that the Commission possessed the authority to grant a license with reasonable restrictions 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 conditions 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 arbitrary, 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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303 Nebraska Reports

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 findings for those of the district court where competent evidence 

supports those findings.

[6-8] Proceedings in the district court reviewing a final decision 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 conclusions 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 witnesses 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 proceedings. § 84-917(6)(b).

In this case, the district court made indepth factual determinations, 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 performing 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 conditions 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, including 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. App. 711, 

832 N.W.2d 30 (2013). In case No. S-18-045, an unpublished memorandum opinion filed on December 19, 2018, 

we recently reached a similar result in ANS, Inc. v. Nebraska 
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ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 303 Neb. 214

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 certain 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 traffic 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 authority specifically conferred upon them by statute or by 
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ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 303 Neb. 214

construction necessary to achieve the purpose of the relevant 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 distilled 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 emphasized “the recommendation of the local governing body” in 

an effort to highlight the reasonableness of the recommendation 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 exacerbate 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, capricious, nor unreasonable.
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ABAY, L.L.C. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 303 Neb. 214

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 unreasonable, and there was competent evidence in the record for its 

decision. Accordingly, we affirm.

Affirmed.