Opinion ID: 1292650
Heading Depth: 1
Heading Rank: 7

Heading: disqualifying interest

Text: The disposition of this appeal hinges on the interpretation and application of § 53-169.01. As previously noted, no manufacturer of alcoholic liquor (except beer) outside the State of Nebraska shall, either directly or indirectly, be interested in the ownership, conduct, operation, or management of any alcoholic liquor wholesaler holding an alcoholic liquor wholesale license (except beer). See id. We note that, while the forbidden interest in § 53-169.01 is worded as that of the manufacturer in the wholesaler and not the interest of the wholesaler in the manufacturer, the obvious intent of the Legislature is to forbid both types of interests. The undue favorable relationship likely to result from the interest is the ill addressed by the statute; it is logically impossible for one company to have a financial interest in another without that interest being reciprocal. USDP is the only liquor manufacturer in which NLD is alleged to have a disqualifying interest. Therefore, the district court's affirmance will be upheld only if a sufficient interest is established by the record between Mitchell (or his wholly owned NLD) and USDP. There are three sources of this alleged connection. First, the owner and president of USDP is Mitchell's nephew. Second, Mitchell owned stock in USDP, but he sold all his interest in USDP over 15 years ago. Third, both Mitchell and USDP had connections to Johnson Brothers  a fact which led both the Commission and the district court to conclude that Mitchell and USDP were indirectly interested in each other to a disqualifying degree. To properly analyze this third source, we must consider each of the two connections in turn. Mitchell's connections to Johnson Brothers are many. The chairman of the board of Johnson Brothers is both Mitchell's brother and a joint shareholder with Mitchell of another liquor distributing company. Mitchell was president of Johnson Brothers until his retirement in January 1997. Mitchell also had stock in Johnson Brothers but sold all of his shares to Johnson Brothers in 1995. Yet, at the time of the Commission hearing, Johnson Brothers was still paying Mitchell the predetermined sum for his shares of stock. Finally, the district court found the timing of Mitchell's application suspicious, coming as it did on the heels of the denial of Johnson Brothers' similar application. We assume without deciding that Mitchell is interested in Johnson Brothers. The Commission's conclusion regarding Johnson Brothers' connections to USDP appears to be based in large part on the findings in the unpublished Court of Appeals case, Johnson Bros. Liquor Co. v. Nebraska Liquor Control Comm., No. A-99-1182, 2000 WL 1725059 (Neb.App. Nov.21, 2000) (not designated for permanent publication), which upheld a previous finding of the Commission that Johnson Brothers had a business interest in USDP which disqualified it for a wholesale liquor license. The district court relied heavily on Johnson Bros. Liquor Co. to establish the connection between Johnson Brothers and USDP in its affirmance. We must decide whether reliance on that case conforms to the law. It is provided by statute that judicial notice may be taken of any fact not subject to reasonable dispute, when such fact is capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned. Neb.Rev.Stat. § 27-201(2)(b) (Reissue 1995). The Johnson Bros. Liquor Co. opinion is a source of which the accuracy cannot reasonably be questioned. See J.B. Contracting Servs. v. Universal Surety Co., 261 Neb. 586, 624 N.W.2d 13 (2001). However, the ultimate factual finding of Johnson Bros. Liquor Co.  that there was sufficient evidence to support the Commission's decision  is not helpful because the applicable standard of review for the district court in the instant case was de novo, not mere sufficiency of the evidence. Johnson Bros. Liquor Co. does not stand for a judicial de novo finding that Johnson Brothers had a disqualifying interest in USDP. It is critical to note the distinction between the standard of review applicable in Johnson Bros. Liquor Co. and the case at bar. In Johnson Bros. Liquor Co., the district court was to review the Commission's decision for jurisdiction and sufficiency of the evidence. See, generally, City of Lincoln v. Nebraska Liquor Control Comm., 261 Neb. 783, 626 N.W.2d 518 (2001) (describing change in appellate procedure from Commission). After Johnson Bros. Liquor Co., the standard of review changed. The district court in the instant case must review the Commission's decision under the now-applicable Administrative Procedure Act. See City of Lincoln v. Nebraska Liquor Control Comm., supra . Proceedings for review of a final decision of an administrative agency shall be to the district court, which shall conduct the review without a jury de novo on the record of the agency. Lariat Club v. Nebraska Liquor Control Comm., 267 Neb. 179, 673 N.W.2d 29 (2004). See Neb.Rev.Stat. § 84-917(5)(a) (Reissue 1999). This is an important difference. In a review for sufficiency of the evidence, an appellate court does not make its own factual findings, but in a true de novo review, the court uses assignments of error as a guide to the factual issues in dispute, but makes independent factual determinations based on the record. See, generally, Slack Nsg. Home v. Department of Soc. Servs., 247 Neb. 452, 528 N.W.2d 285 (1995) (explaining differences in standards of review). Therefore, the ultimate finding of Johnson Bros. Liquor Co. v. Nebraska Liquor Control Comm., No. A-99-1182, 2000 WL 1725059 (Neb.App. Nov.21, 2000) (not designated for permanent publication), that the district court should have found that the evidence was (merely) sufficient to support the Commission's finding, cannot stand for a judicial de novo finding that the record actually supports that finding. As a matter of fact, the Court of Appeals in Johnson Bros. Liquor Co. reversed the district court decision which, while erroneously applying a de novo standard to the determination of the Commission, found that Johnson Brothers' interest in USDP did not disqualify it for the license. Simply stated, since the Court of Appeals did not perform a de novo review of the record in Johnson Bros. Liquor Co., the Court of Appeals' decision in that case does not contain findings of fact that are judicially noticeable. Many of the other alleged facts in Johnson Bros. Liquor Co. are unavailable for judicial notice under § 27-201(2)(b). The Court of Appeals indicated that [t]he evidence was contradictory and hotly contested, Johnson Bros. Liquor Co., 2000 WL 1725059 at , and did not make any findings favoring one version over another. The remaining facts which were not subject to reasonable dispute are unhelpful. Thus, to establish the connection between Johnson Brothers and USDP, the district court was limited to the fact that the USDP president and sole shareholder is the son of Johnson Brothers' chairman of the board  Mitchell's nephew and brother, respectively. We must now apply § 53-169.01 to these facts, determining whether the court's decision that NLD was interested in the ownership, conduct, operation, or management of USDP conforms to the law, is supported by competent evidence, and is not arbitrary, capricious, or unreasonable. In discerning the meaning of a statute, a court must determine and give effect to the purpose and intent of the Legislature as ascertained from the entire language of the statute considered in its plain, ordinary, and popular sense. City of Gordon v. Ruse, 268 Neb. 686, 687 N.W.2d 182 (2004). It is the court's duty to discover, if possible, the Legislature's intent from the language of the statute itself. See Wolfe v. Becton Dickinson & Co., 266 Neb. 53, 662 N.W.2d 599 (2003). The scope of the interest forbidden is wide, prohibiting interests directly or indirectly held, and interests established in various indirect ways, for example, through a subsidiary or affiliate. The list of ways a manufacturer can hold a forbidden interest in a distributor is substantial, but each one listed indicates an interest of a financial or business nature. Under the ejusdem generis canon of construction, when a general word or phrase follows a list of specific persons or things, the general word or phrase will be interpreted to include only persons or things of the same type as those listed. Dykes v. Scotts Bluff Cty. Ag. Socy., 260 Neb. 375, 617 N.W.2d 817 (2000). Thus, under the ejusdem generis rule, specific words or terms modify and restrict the interpretation of general words or terms where both are used in sequence. Id. Therefore, we hold that the interest forbidden by § 53-169.01 is a financial or business interest. The interest between Mitchell, or his wholly owned NLD, and USDP, as established by the record, is largely familial. The three connections established by the record are as follows: (1) Mitchell owned USDP stock but sold it 15 years ago, (2) Mitchell is the uncle to the owner and president of USDP, and (3) Mitchell may have a business interest in Johnson Brothers, which has as its chairman of the board the father of USDP's owner and president. While Mitchell may indeed have some generalized familial interest in seeing USDP succeed, the record falls short of establishing that the interest is a financial or business one. We determine that the interest Mitchell and NLD have in USDP, as established by the record, is not indicative of the type of relationship which § 53-169.01 would forbid if NLD were licensed. The judgment of the district court affirming the Commission's order does not conform to the law and is not supported by competent evidence.