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Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

RETROACTIVE, INC. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 298 Neb. 936

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.

___ N.W.2d ___

Filed February 9, 2018. No. S-17-202.

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. Vacated and dismissed.

Douglas J. Peterson, Attorney General, and Milissa JohnsonWiles for appellant.

Burke J. Harr and Justin D. Eichmann, of Houghton, Bradford 

& Whitted, P.C., 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 

Nebraska Supreme Court Online Library

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

03/23/2018 01:13 AM CDT
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Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

RETROACTIVE, INC. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 298 Neb. 936

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 
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Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

RETROACTIVE, INC. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 298 Neb. 936

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.”
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Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

RETROACTIVE, INC. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 298 Neb. 936

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 license. The Commission appeals. The City did 

not file a notice of appeal.

ASSIGNMENTS OF ERROR

The Commission assigns, restated, that the district court 

erred in (1) failing to dismiss the petition on appeal for lack of 

subject matter jurisdiction, because Retroactive failed to name 

Hecker as a “necessary party” to its review under the APA, 

and (2) reversing the decision of the Commission to deny a 

Class C liquor license to Retroactive.

STANDARD OF REVIEW

[1] 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.1

ANALYSIS

Citizen Objectors as

Parties of Record

We note that the Commission uses the terms “necessary 

party” and “party of record” interchangeably in its brief. We 

read the Commission’s use of the term “necessary party” 

to mean “party of record” as that term is used in Neb. Rev. 

Stat. §§ 53-1,115 (Reissue 2010) and 84-917 (Reissue 2014). 

The Commission argues that the district court erred in failing 

to dismiss the petition on appeal for lack of subject matter 

jurisdiction due to the failure of Retroactive to name Hecker 

as a party on appeal according to §§ 53-1,115 and 84-917. 

Retroactive contends that the Nebraska Liquor Control Act’s 

statutory definition of “party of record” in § 53-1,115 does not 

1 Kozal v. Nebraska Liquor Control Comm., 297 Neb. 938, 902 N.W.2d 147 

(2017).
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Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

RETROACTIVE, INC. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 298 Neb. 936

extend to the APA and that under Shaffer v. Nebraska Dept. 

of Health & Human Servs.,

2

 the citizen objectors are not parties of record, because the citizen objectors were not treated 

as parties by the hearing officer at the hearing held before 

the Commission.

Both parties cite to Shaffer, in which this court determined that a Medicaid provider was a “party of record” at 

a Department of Health and Human Services hearing, and 

therefore a party of record pursuant to § 84-917(2)(a)(i) in 

the subsequent appeal to the district court. This court reasoned that the Medicaid provider was a “party of record” at 

the hearing, because the provider (1) was required by federal 

law to be a party to the hearing and (2) participated in the 

hearing and was treated as a party by the hearing officer. In 

determining whether the provider was treated as a party, this 

court stated that the provider “appeared at the fair hearing 

to explain and defend its decision.”3 In addition, the provider’s “representatives presented evidence, cross-examined 

witnesses, entered into stipulations, and presented arguments” 

and “[a]t the beginning and conclusion of the hearing, the 

hearing officer referred to [the Medicaid recipient] and [the 

Medicaid provider] as the ‘parties.’”4 This court accordingly 

vacated the judgment, because “the failure to make [the 

Medicaid provider] a party to the appeal deprived the district 

court of jurisdiction.”5

We recently decided Kozal v. Nebraska Liquor Control 

Comm.6 In Kozal, issued subsequent to the district court’s 

review of the Commission’s decision in this case, we held that 

“the definition of ‘party of record’ in § 53-1,115(4) controls for 

2 Shaffer v. Nebraska Dept. of Health & Human Servs., 289 Neb. 740, 857 

N.W.2d 313 (2014).

3 Id. at 751, 857 N.W.2d at 322.

4 Id.

5 Id. at 752, 857 N.W.2d at 323.

6 Kozal v. Nebraska Liquor Control Comm., supra note 1.
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Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

RETROACTIVE, INC. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 298 Neb. 936

purposes of the APA’s requirement that ‘[a]ll parties of record 

shall be made parties to the proceedings for review’ in a review 

of the Commission’s proceedings.”7 Thus, this court concluded 

that “the definition in § 53-1,115(4) is the controlling definition of ‘party of record’ for purposes of APA review of the 

Commission’s proceedings.”8

This court then addressed the application of Shaffer and 

analyzed the underlying facts to determine whether “the citizen objectors in this case acted as and were treated as parties 

in the Commission’s hearing on the retailers’ license renewal 

applications.”9 We held that

[b]ecause citizen objectors are defined by the Nebraska 

Liquor Control Act as “part[ies] of record” in the 

Commission’s liquor license application proceedings and 

because the citizen objectors acted as and were treated 

as parties in the Commission’s hearing, we conclude that 

they are “parties of record” for purposes of the APA.10

Ultimately, this court held that the failure to include the citizen 

objectors meant that the district court never acquired subject 

matter jurisdiction to review the Commission’s order.11

In Kozal, prior to analyzing the application of Shaffer to the 

facts, we held that the definition of “party of record” under 

§ 53-1,115(4) applied for purposes of the APA. We observe 

that contrary to our decision in Kozal, it is not necessary to 

also analyze the underlying facts to determine whether citizen objectors “acted as and were treated as parties.”12 Shaffer

involved a Medicaid provider at a Department of Health 

and Human Services hearing and is inapplicable to the current facts.

7 Id. at 948, 902 N.W.2d at 155.

8 Id. at 948, 902 N.W.2d at 156.

9 Id. at 952, 902 N.W.2d at 158.

10 Id. at 953-54, 902 N.W.2d at 158-59.

11 Id.

12 Id. at 953, 902 N.W.2d at 158.
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Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

RETROACTIVE, INC. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 298 Neb. 936

We define “parties of record” solely based on statute, not on 

the factual examination conducted in Shaffer. To the extent that 

Kozal suggested that citizen objectors in a proceeding before 

the Commission must do things such as submit pretrial witness 

and exhibit lists, file and respond to prehearing motions, call 

witnesses at the hearing, make stipulations, object to evidence, 

and examine and cross-examine witnesses in order for a court 

to have subject matter jurisdiction, such was dicta that we 

decline to extend to this case.13

In the case before us, § 53-133(1)(b) requires that the 

Commission receive “objections in writing.” Nine objectors 

filed citizen protests against the application. At the start of 

the hearing before the Commission, all nine forms submitted 

by the citizen objectors, including the objection submitted by 

Hecker, were offered and accepted into evidence.

The forms upon which the citizen objectors filed their 

protests against the application state that “[i]f after hearing 

the license is approved costs for the hearing will be assessed 

against the protestants.” The statutory authority for this provision, § 53-1,115(3), states in pertinent part that “[u]pon final 

disposition of any proceeding, costs shall be paid by the party 

or parties against whom a final decision is rendered.” As a 

result, all of the citizen objectors who submitted such forms 

have incurred a monetary risk by being invested in the outcome 

of the case.

Furthermore, the forms also require the citizen objectors 

to state their names and addresses. The citizen objectors sign 

the form, affirming that the information they have provided is 

available to the public.

The Commission argues on appeal that Hecker filed a citizen 

protest as an “individual protesting the issuance” of a liquor 

license through “objections in writing.”14 We agree and conclude that Hecker is a “party of record” under § 53-1,115(4). 

13 See id.

14 Brief for appellant at 9-10. See § 53-133(1)(b).
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Nebraska Supreme Court Advance Sheets

298 Nebraska Reports

RETROACTIVE, INC. v. NEBRASKA LIQUOR CONTROL COMM.

Cite as 298 Neb. 936

We hold that Retroactive’s failure to name Hecker precluded 

the district court from acquiring subject matter jurisdiction 

review of the Commission’s order.

The Commission’s first assignment of error has merit.

District Court’s Reversal

of Commission’s Final

Determination

Because we find that Hecker was a “party of record” under 

the APA and that the district court did not have subject matter jurisdiction, we need not address the Commission’s second 

assignment of error.

CONCLUSION

Retroactive failed to include all parties of record in the 

Commission proceeding when it sought review in the district 

court. The district court never acquired subject matter jurisdiction. The district court’s order reversing the Commission’s 

decision is vacated, and the cause is remanded with directions 

to dismiss.

Vacated and dismissed.

Wright, J., not participating.