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In re Claims Against Banghart Properties.

Terri Fritz, grain program manager, Grain 

Warehouse Department, Nebraska Public Service 

Commission, appellee, v. Banghart Properties LLC, 

also known as Fearless Grain Marketing Storage 

and Arbitrage, also known as Fearless Grain 

Marketing, also known as Fearless Grain, 

Gettysburg, South Dakota, appellant.

___ N.W.2d ___

Filed August 15, 2023. No. A-22-427.

1. Public Service Commission: Appeal and Error. Under Neb. Rev. Stat. 

§ 75-136(2) (Reissue 2018), an appellate court reviews an order of the 

Public Service Commission de novo on the record. In a review de novo 

on the record, an appellate court reappraises the evidence as presented 

by the record and reaches its own independent conclusions concerning 

the matters at issue.

2. Administrative Law: Appeal and Error. When an appellate court 

makes a de novo review, it does not mean that the court ignores the 

findings of fact made by the agency and the fact that the agency saw and 

heard the witnesses who appeared at its hearing.

3. ____: ____. Where the evidence is in conflict, an appellate court will 

consider and may give weight to the fact that the agency hearing examiner observed the witnesses and accepted one version of the facts rather 

than another.

4. ____: ____. In assessing a penalty under Neb. Rev. Stat. § 75-156 (Cum. 

Supp. 2022), it is appropriate, even under a de novo standard of review, 

to adhere to the common practice among appellate courts to afford 

appropriate deference to the findings of the agency before which the 

record was created.

Appeal from the Public Service Commission. Affirmed.

Nebraska Supreme Court Online Library

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

08/22/2023 02:07 AM CDT
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Loel P. Brooks, of Brooks, Pansing Brooks, P.C., L.L.O., 

and Robert Konrad, of Konrad Law, P.L.L.C., for appellant.

Douglas J. Peterson, Attorney General, and L. Jay Bartel for 

appellee.

Pirtle, Chief Judge, and Riedmann and Welch, Judges.

Welch, Judge.

INTRODUCTION

Banghart Properties LLC appeals from the imposition 

of a $290,000 civil penalty by the Nebraska Public Service 

Commission (PSC)for numerous violations of Nebraska’s Grain 

Dealer Act (the Act) under Neb. Rev. Stat. §§ 75-901 to 75-910 

(Reissue 2018) and related PSC regulations. For the reasons 

stated herein, we affirm.

STATEMENT OF FACTS

Banghart Properties is a limited liability company operating primarily in South Dakota and is engaged in the business 

of grain merchandising, brokering, and purchasing. Banghart 

Properties was also licensed as a grain buyer and dealer in 

Colorado and North Dakota and ultimately sought licensing in 

Nebraska to conduct business in this state.

In July 2021, Jan Banghart (Jan), the managing member and 

sole owner of Banghart Properties, contacted Terri Fritz, the 

grain program manager with the PSC’s grain warehouse department, to inquire into whether Banghart Properties needed a 

grain dealer license to operate in Nebraska. Fritz informed Jan 

that a grain dealer license was required to conduct business in 

Nebraska and provided information on obtaining a Nebraska 

license. During the conversation, after Jan informed Fritz 

that Banghart Properties had previously conducted business 

in Nebraska acting as a broker, Fritz indicated that Banghart 

Properties needed to obtain a grain dealer license prior to 

conducting further business in the state. Jan assured Fritz that 
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Banghart Properties would not conduct further business in 

Nebraska until it obtained a grain dealer license.

On September 15, 2021, Fritz received an application for 

a grain dealer license from Banghart Properties that did not 

include any other business names. On October 4, after receipt 

of Banghart Properties’ application, but prior to its approval, 

Fritz became aware of an advertisement that had been published 

in a Nebraska newspaper that indicated “Banghart Properties, 

d/b/a Fearless Grain Marketing” was buying commodities from 

Nebraska producers at set price ranges. Fritz subsequently 

contacted Jan, and during the conversation, Jan informed Fritz 

that the advertisement was published in error and reassured 

Fritz that Banghart Properties would not be purchasing grain 

until after the company was approved to conduct business 

in Nebraska.

Shortly thereafter, during another telephone conversation, 

Fritz asked Jan for copies of contracts that Banghart Properties 

had executed with Nebraska producers. Jan once again reassured Fritz that Banghart Properties was not conducting business in Nebraska. Fritz subsequently received a phone call 

from Banghart Properties’ attorney who, after reassuring Fritz 

that the company was not doing business in Nebraska, stated 

that any contract that the company had with Nebraska producers would be provided to Fritz. Around the same time, Fritz 

received another phone call from Jan, who disclosed that 

Banghart Properties had been doing business in Nebraska and 

inquired whether Banghart Properties could pay money owed 

to Nebraska producers.

On October 12, 2021, as a followup from the phone conversations, Fritz sent a letter ordering Banghart Properties 

to cease any grain dealer operations until completion of 

the application for licensing and the grant of a grain dealer 

license. In the letter, Fritz requested copies of all contracts 

between Banghart Properties and Nebraska producers. In 

response, Banghart Properties’ attorney provided copies of 
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the contracts and supporting documentation related to its 

Nebraska business operations.

After obtaining the contracts and accompanying documents from Banghart Properties, Fritz learned that Banghart 

Properties had entered into 12 contracts with Nebraska producers for the purchase and delivery of Nebraska grain despite 

not being licensed as a grain dealer in Nebraska. Additionally, 

Banghart Properties purchased grain from Nebraska producers 

on at least 50 occasions between September 16 and October 21, 

2021, which was during the period of time that Jan continued 

to reassure Fritz that Banghart Properties was not conducting 

business in Nebraska. Upon her examination of the contracts, 

Fritz also learned that Banghart Properties failed to provide 

specific “Warning to Seller” language as required by the PSC 

and that the tickets, receipts, bills of lading, and other written communication from Banghart Properties’ purchases were 

not prenumbered and maintained in numeric order as required 

by regulation.

On October 21, 2021, Fritz filed a departmental complaint 

against Banghart Properties alleging numerous violations of 

the Act and related PSC regulations. Specifically, the complaint 

alleged Banghart Properties violated the Act by (1) performing 

actions as a grain dealer without a license; (2) taking possession of grain without issuing written documentation to the 

seller that included the required “Warning to Seller” language 

that informed Nebraska producers of the right to recourse 

against the required grain dealer’s security; and (3) failing to 

issue prenumbered receipts, contracts, bills of lading, or other 

written communications. As a result of the violations, Fritz 

requested the assessment of civil penalties against Banghart 

Properties in the amount of $870,000 for 87 separate violations 

of the Act.

In the answer to the complaint, Banghart Properties admitted entering into the 12 grain purchase contracts as described 

in the complaint, took delivery of some of the contracted 
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grain, and paid producers. However, Banghart Properties 

denied violating the Act or any PSC regulations.

An evidentiary hearing was held before the PSC in January 

2022. Testimony was adduced from Fritz and Jan consistent 

with the facts as laid out above. The PSC entered its order on 

March 15, finding:

The record clearly shows that [Banghart Properties] 

acted as a Grain Dealer on numerous occasions by buying 

grain from Nebraska producers for purposes of selling 

such grain without first being licensed as a Nebraska 

Grain Dealer. Moreover, [Banghart Properties] was not an 

end user of the grain so purchased. [Banghart Properties] 

also did not attempt to make such grain purchases through 

any licensed Nebraska grain dealers, electing to purchase 

directly from Nebraska producers.

The Complaint identifies 29 separate grain purchases 

with respect to which [Banghart Properties] acted as an 

unlicensed grain dealer during the period of September 

16, 2021, through October 7, 2021. [Banghart Properties] 

admitted to these purchases in its Answer. Documentation 

of these transactions is included in the hearing record. 

The existence of these transactions is not in dispute. 

Therefore, we find by clear and convincing evidence that 

[Banghart Properties] has committed 29 separate violations of the grain dealer licensure requirements of the . . . 

Act as alleged in the Complaint.

Furthermore, we note that the record also includes 

documentation from [Banghart Properties’] own business 

records demonstrating that an additional 21 unlicensed 

grain purchases were made by [Banghart Properties] from 

four Nebraska producers between the dates of October 7, 

2021, and October 21, 2021, that were not referenced 

in the Complaint. The existence of these transactions 

is also not in dispute. Therefore, we find by clear and 

convincing evidence that such purchases constitute an 
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additional 21 violations of the grain dealer licensure 

requirements of the . . . Act.

Moreover, the record clearly shows that with respect to 

each of the 29 transactions referenced in the Complaint, 

[Banghart Properties], upon taking possession of the 

grain, failed to issue a receipt, contract, bill of lading or 

other written communication to the seller which included 

the required warning to seller language to inform producers of their rights to recourse against the required grain 

dealer security. Therefore, we find by clear and convincing evidence that [Banghart Properties] has committed 29 

violations of the transaction documentation requirements 

of the . . . Act.

Furthermore, the record clearly shows that with respect 

to each of the 29 transactions referenced in the Complaint, 

[Banghart Properties] failed to issue a pre-numbered grain 

dealer receipt as required by [PSC] regulation. Therefore, 

we find by clear and convincing evidence that [Banghart 

Properties] has committed a further 29 violations of the 

transaction documentation requirements of the . . . Act 

and [PSC] regulations.

After finding that Banghart Properties had committed violations of the Act and related PSC regulations, the PSC determined that “a substantial civil penalty” was warranted, but 

declined to award the grain department’s requested penalty of 

$870,000, instead reducing the recommendation by two-thirds 

and imposing a civil penalty of $290,000. In its order, the 

PSC stated:

We agree with the grain department that the facts presented in this docket warrant a substantial civil penalty. 

However, we decline to fully adopt the department’s 

recommendation that the [PSC] impose the maximum 

penalty for all violations of the Act identified in the 

Complaint. More specifically, although we agree that 

the documentation failures relating to the warning to 

seller language and pre-numbered documents are clear 
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violations of the Act, we also note that these documentation requirements are presumably directed at grain dealers 

that have actually obtained proper licensing.

. . . .

Therefore, we reduce [the department’s] recommendation by two-thirds and impose a civil penalty of $290,000. 

We deem this amount to be an adequate penalty, taking 

into account the 50 unlicensed grain purchases proven by 

the record, which includes the 29 transactions referenced 

in the Complaint plus the 21 additional unlicensed grain 

purchases documented by [Banghart Properties’] business records.

We also recognize that even this reduced amount constitutes a civil penalty that is on a scale greater than other 

penalties imposed by the [PSC] in other recent grain 

dealer matters. Nonetheless, after a careful examination 

of the testimony and the written record introduced at 

the hearing, we think a civil penalty in the amount of 

$290,000 is clearly warranted under the facts presented 

in this docket.

In determining the amount of the penalty assessed, the 

PSC considered multiple factors, including that an unlicensed 

grain dealer presents a significant risk of financial harm to 

Nebraska producers; that Banghart Properties operated as 

a grain dealer in Nebraska for an extended period of time 

without obtaining a license; that Jan, the owner of Banghart 

Properties, had decades of experience in state regulation; 

that Banghart Properties’ application for licensure presented 

an inaccurate picture of its Nebraska grain dealer business; 

that Banghart Properties never filed a financial statement as 

required under Nebraska law; that Banghart Properties did 

not demonstrate that it met the minimum net worth requirement needed to qualify as a licensed grain dealer in Nebraska; 

that Banghart Properties never obtained the required financial security to protect Nebraska producers as required by 

Nebraska law; that Banghart Properties continued to operate 
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as an unlicensed grain dealer for several months, while at the 

same time Jan repeatedly assured the grain department that it 

was not doing so; that Banghart Properties failed to exercise 

effective control over the activities of company employees; and that the mitigating factors identified by Banghart 

Properties did not excuse the company’s actions.

Following the entry of the PSC’s order, Banghart Properties 

timely filed a motion for reconsideration that was denied by 

the PSC. Banghart Properties now appeals from the order finding that it violated the Act and corresponding regulations and 

assessing a civil penalty of $290,000.

ASSIGNMENTS OF ERROR

Banghart Properties assigns that the PSC erred as a matter of 

law by (1) issuing an excessive and disproportionate civil penalty without giving proper consideration and weight to numerous mitigating factors and (2) directing Banghart Properties to 

rescind its grain contracts with producers and impermissibly 

using Banghart Properties’ failure to do so as an aggravating 

factor in support of its excessive penalty.

STANDARD OF REVIEW

[1-3] Under Neb. Rev. Stat. § 75-136(2) (Reissue 2018), an 

appellate court reviews an order of the PSC de novo on the 

record. In re App. No. P-12.32 of Black Hills Neb. Gas, 311 

Neb. 813, 976 N.W.2d 152 (2022). In a review de novo on the 

record, an appellate court reappraises the evidence as presented 

by the record and reaches its own independent conclusions 

concerning the matters at issue. Id. When an appellate court 

makes a de novo review, it does not mean that the court ignores 

the findings of fact made by the agency and the fact that the 

agency saw and heard the witnesses who appeared at its hearing. Id. Where the evidence is in conflict, an appellate court 

will consider and may give weight to the fact that the agency 

hearing examiner observed the witnesses and accepted one version of the facts rather than another. Id.
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ANALYSIS

Civil Penalty

Banghart Properties first assigns that the PSC erred in 

assessing a civil penalty without properly considering the mitigating factors presented during the hearing. More specifically, 

Banghart Properties argues that the civil penalty imposed was 

excessive in light of the remedial and corrective actions taken 

by Banghart Properties, that the record showed there was no 

economic harm to any Nebraska producer, and that the penalty 

was drastic and disproportionate to all previous civil penalties 

imposed by the PSC in grain-related matters.

The Act and corresponding PSC regulations require all grain 

dealers doing business in Nebraska to procure and maintain a 

license from the PSC. See, § 75-903; 291 Neb. Admin. Code, 

ch. 8, § 003.01 (2018). To procure a license from the PSC, a 

grain dealer must: (1) pay an annual fee; (2) file security in the 

form of a bond, an irrevocable letter of credit or certificate of 

deposit for the benefit of any producer who files a valid claim 

arising from a sale to the grain dealer; and (3) file a reviewed 

and audited financial statement prepared by an independent 

certified public accounting firm. See § 75-903(1) through 

(3). It is undisputed that Banghart Properties is a “[g]rain 

dealer” as that term is defined in the Act. See § 75-902(5). In 

addition to licensing requirements, we quote from additional 

statutes and a corresponding regulation that were violated by 

Banghart Properties and relate to the PSC’s imposition of a 

penalty here.

Pursuant to § 75-904:

Each grain dealer or his or her agent upon taking 

possession of grain from a seller shall issue a receipt, 

contract, bill of lading, or other written communication 

to the seller or his or her agent. The grain dealer receipt, 

contract, bill of lading, or other written communication 

issued by the grain dealer shall include the provisions of 

section 75-905 and be in such form as the [PSC] may by 

rule and regulation require.
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And, pursuant to § 75-905:

(1) No seller shall have recourse to the grain dealer’s 

security unless the seller:

(a) Demands payment from the grain dealer within 

fifteen days after the date of the last shipment of any 

contract;

(b) Negotiates any negotiable instrument issued as payment for grain by the grain dealer within fifteen days after 

its issuance; and

(c) Notifies the [PSC] within fifteen days after any 

apparent loss to be covered under the terms of the grain 

dealer’s security.

(2) The grain dealer’s security shall provide security for 

direct delivery grain until any post-direct delivery storage 

position is created for a period not to exceed fifteen days 

after the date of the last shipment of the contract.

Further, 291 Neb. Admin. Code, ch. 8, § 003.05A8 (2018) 

provides that “[a]ll receipts, contracts, bills of lading or other 

written communications shall be pre-numbered and copies 

shall be maintained in numeric order.”

The Act provides that the PSC “may assess a civil penalty, 

pursuant to section 75-156, against any person who violates 

the . . . Act.” § 75-910. Neb. Rev. Stat. § 75-156 (Cum. Supp. 

2022) provides in relevant part:

(1) In addition to other penalties and relief provided 

by law, the [PSC] may, upon a finding that the violation 

is proven by clear and convincing evidence, assess a 

civil penalty of up to ten thousand dollars per day against 

any person, motor carrier, regulated motor carrier, common carrier, contract carrier, licensee, grain dealer, or 

grain warehouseman for each violation of (a) any provision of the laws of this state within the jurisdiction of 

the [PSC] as enumerated in section 75-109.01, (b) any 

term, condition, or limitation of any certificate, permit, 

license, or authority issued by the [PSC] pursuant to the 

laws of this state within the jurisdiction of the [PSC] as 
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enumerated in section 75-109.01, or (c) any rule, regulation, or order of the [PSC] issued under authority 

delegated to the [PSC] pursuant to the laws of this state 

within the jurisdiction of the [PSC] as enumerated in 

section 75-109.01.

. . . .

(5) The civil penalty assessed under this section shall 

not exceed two million dollars per year for each violation 

except as provided in subsection (4) of this section. The 

amount of the civil penalty assessed in each case shall be 

based on the severity of the violation charged. The [PSC] 

may compromise or mitigate any penalty prior to hearing if all parties agree. In determining the amount of the 

penalty, the [PSC] shall consider the appropriateness of 

the penalty in light of the gravity of the violation and the 

good faith of the violator in attempting to achieve compliance after notification of the violation is given.

Applying the criteria set forth in § 75-156(5), the PSC 

determined that Banghart Properties should be fined $290,000. 

Banghart Properties assigns that the penalty is excessive. As 

an initial matter, the parties appear unclear on our standard 

of review governing this determination. Both parties cite to 

the Nebraska Supreme Court’s decisions in Telrite Corp. v. 

Nebraska Pub. Serv. Comm., 288 Neb. 866, 852 N.W.2d 910 

(2014), which was abrogated as stated in In re Application No. 

OP-0003, 303 Neb. 872, 932 N.W.2d 653 (2019), as providing governance on the subject. In Telrite Corp., the Nebraska 

Supreme Court examined the court’s standard of review in 

connection with the PSC’s order revoking the corporation’s eligible telecommunications carrier status with the PSC. In doing 

so, the Nebraska Supreme Court held:

As an initial matter, the parties disagree whether we 

should defer to the PSC’s penalty determination. Telrite 

asserts that, because § 75-136 authorizes de novo review, 

we do not owe any deference to the PSC’s determination. The PSC maintains that our previous decisions 
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require us to affirm the sanction ordered by the PSC 

absent “‘arbitrar[iness]’ or an ‘abuse of discretion.’” In 

those cases, we stated that determinations by the PSC 

are a matter peculiarly within its expertise and involve 

a breadth of judgment and policy determination that 

an appellate court should not disturb in the absence 

of a showing that the PSC’s action was arbitrary or 

unreasonable. But we made these statements before 2013, 

when the Legislature amended § 75-136 to provide a “de 

novo on the record” standard of review. Before 2013, a 

party appealed from the PSC under the Administrative 

Procedure Act and an appellate court reviewed the PSC’s 

order for errors appearing on the record. Under this standard of review, our inquiry was limited to whether the 

decision conformed to the law, was supported by competent evidence, and was neither arbitrary, capricious, nor 

unreasonable. Our review of pre-2013 cases shows that 

the deference accorded to the PSC was tied to the deferential standard of review applied by an appellate court 

under the Administrative Procedure Act. We therefore 

reject the PSC’s contention that it is due the same degree 

of deference it enjoyed before the Legislature amended 

§ 75-136. Under the amended § 75-136, an appellate 

court must reappraise the evidence on the record as it 

relates to the penalty issued by the PSC and reach an 

independent conclusion.

Telrite Corp. v. Nebraska Pub. Serv. Comm., 288 Neb. at 

874-75, 852 N.W.2d at 915-16. Notably, the court did not 

reach the issue of the proper standard of review in connection 

with a penalty determination under § 75-156 because, as the 

court noted:

We need not express an opinion regarding the appropriateness of lesser sanctions. The NTUSFA [Nebraska 

Telecommunications Universal Service Fund Act] provides that the PSC has the power to withhold funds if a 

telecommunications company fails to comply with the 
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PSC’s orders or regulations and, under Neb. Rev. Stat. 

§ 75-156 (Supp. 2013), administratively fine any person 

who violates the NTUSFA. We note in passing that noncompliance with the PSC’s orders violates the NTUSFA 

and may subject a telecommunications provider to fines 

under § 75-156. But the only order in the record that 

Telrite violated was the May 29, 2013, order, which 

stated that Telrite must use a Nebraska-specific form. 

Under § 75-156(1), the PSC has the discretion to issue 

fines of up to $10,000 per day if it finds, by clear and 

convincing evidence, that “any term, condition, or limitation of any certificate, permit, or authority issued by the 

[PSC]” or “any rule, regulation, or order of the [PSC]” 

was violated. Should the PSC consider the imposition of 

an administrative fine on remand, § 75-156(5) directs it 

to consider the gravity of Telrite’s violation and its good 

faith efforts to achieve compliance after being notified 

of the violation. And, of course, Telrite’s conduct at the 

Omaha event may be considered should future compliance problems occur.

Telrite Corp. v. Nebraska Pub. Serv. Comm., 288 Neb. at 877, 

852 N.W.2d at 917.

But in In re Application No. OP-0003, 303 Neb. 872, 901-03, 

932 N.W.2d 653, 675-76 (2019), the Nebraska Supreme Court 

revisited the issue of the standard of review in connection with 

certain PSC determinations and provided as follows:

The PSC is an independent regulatory body created by 

the Nebraska Constitution in article IV, § 20. The powers and duties of the PSC include the “general control of 

common carriers as the Legislature may provide by law.” 

The constitutional provision creating the PSC must be 

liberally construed to effectuate the purpose for which the 

PSC was created, which is to serve the public interest. In 

the absence of specific legislation, the powers and duties 

of the PSC, as enumerated in the constitution, are absolute and unqualified.
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We have repeatedly said that the determination of 

what is consistent with the public interest, or public 

convenience and necessity, is one that is peculiarly for 

the determination of the PSC. “‘[C]ourts must give substantial deference to [the PSC’s] judgment about how 

best to serve the public interest.’” We have made this 

statement in recognition of the PSC’s status as a constitutional entity, and we have gone as far as to state that 

the “Supreme Court does not act as an appellate [PSC].” 

However, in 2013, the Legislature amended § 75-136(2) 

to change our standard of review from errors appearing 

on the record, as provided under the APA, to “de novo on 

the record.”

We first addressed the “de novo on the record” standard of review for PSC cases in Telrite Corp. v. Nebraska 

Pub. Serv. Comm. Prior to the amendment, a party 

appealed from the PSC under the APA, and the initial 

appeal was taken to district court, which conducted a de 

novo review on the record of the agency. Our inquiry in 

appeals from a district court’s decision under the APA 

is limited to whether the decision conformed to the law, 

was supported by competent evidence, and was neither 

arbitrary, capricious, nor unreasonable. In Telrite Corp., 

we rejected the PSC’s argument that the previous, more 

deferential standard of review for an appellate court 

under the APA still applied after the amendment to 

§ 75-136. In so finding, we stated that the PSC was not 

“due the same degree of deference it enjoyed” before 

the amendment.

However, the issue of what deference is owed to 

the PSC regarding its public interest determinations is 

more nuanced than stated in Telrite Corp. Under [the 

Major Oil Pipeline Siting Act], the PSC views the witnesses and evaluates the strength of their testimony, 

receives comments from the public, investigates the 

issues presented in coordination with state agencies and 
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authorized consultants, evaluates the public interest, 

and makes the initial decision of whether to approve 

an application and authorize eminent domain power. 

Under the circumstances, it is appropriate, even under 

a de novo standard of review, to adhere to the common 

practice among appellate courts to afford appropriate 

deference to the findings of the agency before which the 

record was created. We articulate this standard in light 

of the PSC’s being constitutionally created to serve the 

public interest.

Thus, the question becomes, what is the proper standard of 

review in connection with a PSC penalty determination under 

§ 75-156? Again, although we are governed by the statutory de 

novo standard of review set forth in § 75-136, we recognize 

that the language of § 75-156(1) vests the PSC with discretionary authority to issue fines up to $10,000 per day if it finds by 

clear and convincing evidence that “‘any term, condition, or 

limitation of any certificate, permit, or authority issued by the 

[PSC]’ or ‘any rule, regulation, or order of the [PSC]’ was violated.” Telrite Corp. v. Nebraska Pub. Serv. Comm., 288 Neb. 

866, 877, 852 N.W.2d 910, 917 (2014). See In re Application 

No. OP-0003, 303 Neb. 872, 932 N.W.2d 653 (2019).

[4] We view the exercise of that authority as a determination 

of what is consistent with the public interest, or public convenience and necessity, and one that is peculiarly for the determination of the PSC. See In re Application No. OP-0003, supra. 

As such, we believe that the exercise of this discretionary 

authority as being more aligned with the more nuanced standard of review set forth in In re Application No. OP-0003. That 

is, in assessing a penalty under § 75-156, we find it appropriate, even under a de novo standard of review, to adhere to the 

common practice among appellate courts to afford appropriate 

deference to the findings of the agency before which the record 

was created.

In this case, Banghart Properties does not dispute that 

it violated the above-quoted provisions of the Act and the 
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corresponding regulations in multiple ways. Instead, it simply 

argues that the facts of this case should not result in such an 

egregious financial penalty and that multiple mitigating factors supported a lesser one. Conversely, the PSC, in its order, 

specifically stated that the mitigating factors presented by 

Banghart Properties did not excuse the company’s actions and 

did warrant such a penalty.

Based upon our de novo review of the record, but affording 

appropriate deference to the agency before which the record 

was created, we find that the PSC did not err in assessing a 

civil penalty in the amount of $290,000 for the multitude of 

violations of the Act and the corresponding regulations by 

Banghart Properties. We are persuaded that the mostly undisputed facts in this record demonstrate a case of serious misconduct with relatively minimal efforts at mitigation in light of the 

nature of the misconduct.

In reaching that conclusion, we are governed by the penalty assessment criteria set forth in § 75-156(5), which criteria require that we consider the severity of the violation 

charged, the appropriateness of the penalty in light of the 

gravity of the violation, and the good faith efforts to mitigate 

the violation after notification of the violation. The record 

demonstrates that Jan had extensive experience in regulatory compliance prior to commencing business as Banghart 

Properties, yet she began operating extensively as a grain 

dealer in Nebraska without pursuing a license to conduct 

business here. To that end, before pursuing required licensing 

in this state, Banghart Properties entered into 12 separate contracts with Nebraska producers to purchase extensive quantities of grain throughout the state. Once Jan, the company’s 

sole owner, inquired on July 19, 2021, about the requirement 

for licensure and learned she needed one, she represented 

to Fritz that although her company had commenced doing 

business here, the company would not do further business in 

Nebraska until it obtained a license. Notwithstanding Jan’s 

discovery of a licensure requirement on July 19, Banghart 
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32 Nebraska Appellate Reports

IN RE CLAIMS AGAINST BANGHART PROPERTIES

Cite as 32 Neb. App. 168

Properties delayed submitting an application until September 

15, and notwithstanding Jan’s numerous representations to 

the contrary, Banghart Properties engaged in 50 separate purchasing transactions between September 16 and October 21, 

prior to obtaining a license to transact business in this state. 

Twenty-one of these transactions occurred after Fritz filed a 

complaint on behalf of the department that alleged 29 such 

unauthorized transactions.

As to all of these unauthorized transactions, Banghart 

Properties failed to comply with the security disclosure requirements of the Act and the document maintenance requirements 

of the corresponding regulations. And all of this was uncovered by Fritz following her discovery of an advertisement 

in a Nebraska newspaper placed after Jan explicitly represented that her company would not conduct further business 

in Nebraska until Banghart Properties was properly licensed. 

Additionally, despite Jan’s representations, and following the 

filing of the complaint by Fritz, Banghart Properties executed 

two new contracts with Nebraska grain producers in November 

2021 while the application was pending. And despite at least 

four inquiries from Nebraska producers to Fritz about security 

concerns due to Banghart Properties’ violations, according to 

Fritz, Banghart Properties discouraged one such party from 

voiding its contract and refused to notify its other contracting 

parties of Banghart Properties’ unlicensed status so that those 

parties could pursue their contract rights.

In connection with Banghart Properties’ eventual submission 

of an application, the application itself contained statements 

that were inconsistent with, and contradicted by, its previous 

unlicensed contractual activity; did not contain the required 

financial statements required by the Act so as to demonstrate 

the financial strength of the company; and did not provide the 

PSC with sufficient evidence of financial security required to 

protect Nebraska producers under Nebraska law, despite the 

company’s having purchased grain from Nebraska producers 

on over 50 occasions.
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Nebraska Court of Appeals Advance Sheets

32 Nebraska Appellate Reports

IN RE CLAIMS AGAINST BANGHART PROPERTIES

Cite as 32 Neb. App. 168

While Banghart Properties does not contest that it violated 

the Act and regulations, it argues that the penalty is too harsh 

given the attempts to mitigate and that the penalty is vastly 

disproportionate to prior fines levied by the PSC. In furtherance of this argument, Banghart Properties argues that Jan 

was unaware of an employee’s placing of the advertisement 

in a Nebraska newspaper or entering into new contracts in 

November 2021 while the application was being pursued. 

Banghart Properties argues that these employees were properly 

disciplined and that new policies were drafted internally to 

ensure compliance with rules. Banghart Properties argues that 

Jan initiated cancellation of the November contracts, left the 

decision on cancellation of other contracts to the contracting 

producers, and by the conclusion of the hearing, had canceled 

all contracts requested to be canceled by any such requesting 

producers. Banghart Properties further argues that no Nebraska 

producer incurred actual harm here.

Although we agree that it does not appear on this record 

that any actual harm befell any specific Nebraska grain producer, we disagree that the actual mitigation pursued here 

warranted a lesser fine from that which was assessed by the 

PSC. In assessing the nature of the mitigation pursued here, 

the PSC found:

[Banghart Properties] has asserted that there are mitigating factors in the record which should reduce any civil 

penalty to a “minimal” amount. According to [Banghart 

Properties’] counsel, such mitigating factors include, the 

partial completion of the Nebraska license process, the 

existence of a South Dakota bond, the suspension of an 

employee who solicited Nebraska business in November 

2021, the development of new operational policies incorporating Nebraska rules, and discussions with Nebraska 

producers. In short, “new policies, new procedures, new 

rules, more oversight, more time in the office.”

We have considered these alleged mitigating factors, 

but we do not agree they should result in a further 
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Nebraska Court of Appeals Advance Sheets

32 Nebraska Appellate Reports

IN RE CLAIMS AGAINST BANGHART PROPERTIES

Cite as 32 Neb. App. 168

reduction of the civil penalty. To begin with, these socalled mitigating factors apparently did nothing to interfere with [Banghart Properties’] activities as an unlicensed 

grain dealer. The record shows that Banghart Properties 

employees signed Nebraska producers to grain purchase 

contracts as late as November 5, 2021, and the company’s 

business records show grain purchases from Nebraska 

producers as late as October 22, 2021. In addition, both 

the employee suspension and the adoption of the new 

operational policies did not occur until November 15, 

2021. Therefore, those items are not so much mitigating 

factors as subsequent remedial measures, undertaken after 

the Complaint was filed.

Effective mitigation would have been to offer producers the opportunity to cancel their purchase agreements 

after disclosing to them the lack of licensing and the 

lack of financial security that is required by the . . . Act. 

Effective mitigation would have been to diligently pursue the required license in the weeks and months after 

finally realizing it was required, and not purchasing grain 

until after the license was obtained. Effective mitigation 

might also have been for [Jan] to stop soliciting producers grain dealer business in Nebraska, until all required 

steps to obtaining a license were complete and properly 

licensing was obtained. However, this sort of mitigation 

did not occur.

We agree. Although Banghart Properties pursued some subsequent remedial measures as described above, those measures did not adequately address the series of unauthorized 

transactions Banghart Properties pursued with grain producers in Nebraska despite Jan’s representations to the contrary. 

And although the PSC ordered Banghart Properties to contact 

its multiple contracting parties to advise them of Banghart 

Properties’ unlicensed status in Nebraska so that they could 

pursue any potential contract remedies available to them, 

Banghart Properties refused to do so while positing that it 
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Nebraska Court of Appeals Advance Sheets

32 Nebraska Appellate Reports

IN RE CLAIMS AGAINST BANGHART PROPERTIES

Cite as 32 Neb. App. 168

would rescind contracts only with those parties that contacted 

the company directly. In short, Banghart Properties appears to 

have attempted to tread a fine line between demonstrating the 

appearance of mitigation while avoiding the loss of revenue 

from contracts it improperly entered into before being granted 

a license. And as we explain more fully in connection with 

our analysis of Banghart Properties’ second assignment of 

error, Banghart Properties’ contracts with these parties who 

were financially exposed by its lack of regulatory compliance 

were either void or voidable due to its unlicensed status when 

it obtained them, and Banghart Properties’ refusal to apprise 

the producers in this state with whom it unlawfully contracted 

of that status amounted to ineffective mitigation in relation to 

the degree of noncompliance on this record.

The record indicates 50 separate transactions by Banghart 

Properties constituting violations of § 75-903, all of which 

occurred after Jan was made aware of the statutory requirements, and 21 of which occurred after Fritz’ October 21, 2021, 

filing of the complaint. At least 29 of these purchases did 

not comply with the notification requirements of § 75-904 or 

the documentary requirements of 291 Neb. Admin. Code, ch. 

8, § 003.05A8. Although § 75-156(1) authorizes the PSC to 

assess a civil penalty of up to $10,000 for each violation, and 

although the department recommended the maximum penalty 

on each violation, the PSC did not fine Banghart Properties 

for each of the 87 violations. Rather, the PSC assessed the 

maximum fine for the 29 transactions originally charged in the 

complaint, which were entered into after Banghart Properties 

was aware of the licensure requirements, despite Jan’s representations that the company would not conduct business until 

after obtaining such licensure. These actions were accompanied by Banghart Properties’ unwillingness to notify Nebraska 

grain producers of Banghart Properties’ status in connection 

with these contracts and the grain producers’ attendant risk 

associated therewith. Although none of the Nebraska grain 

producers appear to have incurred actual harm, applying the 
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Nebraska Court of Appeals Advance Sheets

32 Nebraska Appellate Reports

IN RE CLAIMS AGAINST BANGHART PROPERTIES

Cite as 32 Neb. App. 168

criteria set forth in § 75-156(5), we cannot say that it was an 

error in the penalty assessed for these multiple violations under 

these facts or that it somehow is too disparate from other incidents or violations so as to require reversal. This first assignment of error fails.

Direction to Rescind

Banghart Properties next assigns and argues that the PSC 

erred as a matter of law when it directed Banghart Properties 

to rescind its grain contracts with Nebraska producers and then 

used its failure to do so as an aggravating factor in support 

of an excessive penalty. Although Banghart Properties frames 

this issue as a direction by the PSC for Banghart Properties to 

rescind its contracts, we disagree with that characterization.

The specific directive by the PSC was set forth in its order 

and provided:

IT IS FURTHER ORDERED that Banghart Properties, 

. . . must contact any Nebraska producers that are currently 

under contract with Banghart Properties, . . . inform such 

producers that Banghart Properties . . . is not licensed as 

a Grain Dealer in the State of Nebraska and provide such 

producers the opportunity to cancel their contracts.

When assessing Banghart Properties’ refusal to comply with 

this order, the PSC stated:

Effective mitigation would have been to offer producers the opportunity to cancel their purchase agreements 

after disclosing to them the lack of licensing and the 

lack of financial security that is required by the . . . Act. 

Effective mitigation would have been to diligently pursue 

the required license in the weeks and months after finally 

realizing it was required, and not purchasing grain until 

after the license was obtained. Effective mitigation might 

also have been for [Jan] to stop soliciting producers grain 

dealer business in Nebraska, until all required steps to 

obtaining a license were complete and properly licensing was obtained. However, this sort of mitigation did 

not occur.
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Nebraska Court of Appeals Advance Sheets

32 Nebraska Appellate Reports

IN RE CLAIMS AGAINST BANGHART PROPERTIES

Cite as 32 Neb. App. 168

As such, the PSC did not direct Banghart Properties to 

rescind these contracts but ordered Banghart Properties to 

inform its contracting parties that Banghart Properties lacked 

a license to do business in Nebraska when entering those contracts so that the contracting parties could pursue legal rights 

available to them. The parties then disagree over what those 

legal rights are. Banghart Properties argues that the failure to 

procure a license made the contracts voidable by the contracting producers while the PSC argues that the contracts were 

void. Whether these contracts are void or voidable is a matter 

we need not decide.

Both parties acknowledge that Banghart Properties’ failure 

to obtain a license when contracting within Nebraska provided the contracting parties with legal rights related to those 

contracts, and the PSC directed Banghart Properties to inform 

the parties of their contract status in light of their risk attendant with Banghart Properties’ failure to comply with the Act 

and the corresponding regulations. Banghart Properties refused 

to follow this directive, agreeing only to allow contracting 

producers that contacted the company to rescind their contracts. Rather than penalizing Banghart Properties for failing 

to rescind its grain contracts, the PSC considered Banghart 

Properties’ refusal to inform those producers of their contract 

status in connection with Banghart Properties’ claim that it 

adequately mitigated the damage caused by the company’s 

noncompliance. We reject Banghart Properties’ specific assignment of error that the PSC had no authority to direct Banghart 

Properties to rescind its contracts, as that is inconsistent with 

the specific language contained in the PSC’s order. We find 

that in assessing its penalty, the PSC did not err in considering 

whether Banghart Properties’ refusal to inform all Nebraska 

contracting producers of the status of their contracts was adequate mitigation. And, as we noted above, we find this failure 

significant as it relates to an appropriate penalty to assess in 

connection with Banghart Properties’ multiple violations on 

this record. This assignment of error fails.
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Nebraska Court of Appeals Advance Sheets

32 Nebraska Appellate Reports

IN RE CLAIMS AGAINST BANGHART PROPERTIES

Cite as 32 Neb. App. 168

CONCLUSION

As stated above, we find that the civil penalty was not 

excessive and that the PSC did not err in considering the 

alleged mitigating factors and Banghart Properties’ failure to 

inform the contracting parties of the status of their contracts as 

an aggravating factor in assessing a penalty. The PSC’s order 

is affirmed.

Affirmed.