Opinion ID: 2028292
Heading Depth: 1
Heading Rank: 4

Heading: standard of review under the apa

Text: The APA provides general principles governing agency rulemaking and promulgation. See Neb.Rev.Stat. §§ 84-901 through 84-920 (Reissue 1994). The APA is intended to establish minimum administrative procedures applicable to all agencies and provides for judicial review of agency determinations. §§ 84-916 through 84-918. However, the Legislature has removed some appeals from administrative agencies from the APA, and the appellate procedures and standards of review may differ in those cases from the provisions discussed below. See, e.g., County of Adams v. State Bd. of Equal., 247 Neb. 179, 525 N.W.2d 629 (1995); Clayton v. Nebraska Dept. of Motor Vehicles, 247 Neb. 49, 524 N.W.2d 562 (1994). Parties affected by the rules or regulations of a state agency can obtain a hearing before the agency. Under the APA, a contested case is a proceeding before an agency in which the legal rights, duties, or privileges of specific parties are required by law or constitutional right to be determined after an agency hearing. § 84-901(3). Each agency adopts its own rules and regulations for notice and hearing in contested cases. § 84-913. Contested case proceedings are conducted by hearing officers who may admit and give probative effect to evidence. The rules of privilege and evidence may be applicable. § 84-914(1). Any person aggrieved by a final decision in a contested case, whether such decision is affirmative or negative in form, shall be entitled to judicial review under the Administrative Procedure Act. § 84-917(1). Section 84-917(5) and (6) govern the scope of that review: (5)(a) When the petition instituting proceedings for review was filed in the district court before July 1, 1989, the review shall be conducted by the court without a jury on the record of the agency, and review may not be obtained of any issue that was not raised before the agency unless such issue involves one of the grounds for reversal or modification enumerated in subdivision (6)(a) of this section. When the petition instituting proceedings for review is filed in the district court on or after July 1, 1989, the review shall be conducted by the court without a jury de novo on the record of the agency. (b) If the court determines that the interest of justice would be served by the resolution of any other issue not raised before the agency, the court may remand the case to the agency for further proceedings. (6)(a) When the petition instituting proceedings for review was filed in the district court before July 1, 1989, the court may affirm the decision of the agency or remand the case for further proceedings, or it may reverse or modify the decision if the substantial rights of the petitioner may have been prejudiced because the agency decision is: (i) In violation of constitutional provisions; (ii) In excess of the statutory authority or jurisdiction of the agency; (iii) Made upon unlawful procedure; (iv) Affected by other error of law; (v) Unsupported by competent, material, and substantial evidence in view of the entire record as made on review; or (vi) Arbitrary or capricious. (b) When the petition instituting proceedings for review is filed in the district court on or after July 1, 1989, the court may affirm, reverse, or modify the decision of the agency or remand the case for further proceedings. An aggrieved party may obtain review of any judgment or final order entered by a district court under the APA. § 84-918. Section 84-918 provides the standard of review for the appellate court. When the petition instituting proceedings for review was filed in the district court before July 1, 1989, the appeal from the district court's order is taken in the manner provided by law for appeals in civil cases and is heard de novo on the record. § 84-918(2). Appeals involving petitions filed on or after July 1, 1989, are reviewed for errors appearing on the record. § 84-918(3). An appellate court, in reviewing a judgment of the district court for errors appearing on the record, will not substitute its factual findings for those of the district court where competent evidence supports those findings. Bell Fed. Credit Union v. Christianson, 244 Neb. 267, 505 N.W.2d 710 (1993). At issue is the effect of the 1989 amendments upon the district court's standard of review. The Department states that the Legislature was simply trying to place a broader standard of review with the district court and a narrower one with the appellate courts in order to rectify problems identified by this court in Haeffner v. State, 220 Neb. 560, 371 N.W.2d 658 (1985). The Department argues that the Legislature failed to consider the effect of its 1989 amendments upon the separation of powers doctrine. Further, the Department asserts that the Legislature failed to define the meaning of de novo review and that the term has been given different meanings in different contexts. In Haeffner, supra, we examined §§ 84-917 and 84-918 as those sections existed prior to the 1989 amendments. We held that § 84-917(6) limited a district court's review to a determination of whether the agency's decision violated constitutional provisions; exceeded the agency's statutory authority; was made upon unlawful procedure; was affected by other error of law; was unsupported by competent, material, and substantial evidence in view of the entire record as made on review; or was arbitrary or capricious. In Haeffner, we further held that the appropriate standard of review for this court was prescribed by § 84-918. This court's review under § 84-918 was conducted without the limitations imposed on district courts by § 84-917(6)(e) and (f). Our review was de novo on the record. Haeffner, supra ( overruling, The 20's, Inc. v. Nebraska Liquor Control Commission, 190 Neb. 761, 212 N.W.2d 344 (1973), and Weiner v. State ex rel. Real Estate Comm., 214 Neb. 404, 333 N.W.2d 915 (1983)). Subsequently, the Nebraska Legislature enacted 1989 Neb.Laws, L.B. 213, and amended § 84-917 to require district courts to review appeals from agency determinations in contested cases de novo on the record. The Statement of Intent for L.B. 213 indicates: Under current law [pre-1989 amendment], the district court which first reviews an agency decision on appeal applies the narrow criteria found in section 84-917. On appeal to the Supreme Court under current section 84-918, the Supreme Court reviews the district court's judgment de novo on the record, which is a much broader standard of review. LB 213 would place the broader standard of review (de novo on the record) in the district court, and then a narrower standard of review in the Supreme Court will be applied (errors appearing on the record). This change would take place with appeals filed in the district court on or after July 1, 1989. 213 would reduce the time required by the Supreme Court in its reviews under the Administrative Procedures [sic] Act. Rather than reviewing the record of the agency and making a decision anew as is currently required, the Court will review the district court's action and decide whether that court made any error. Committee on Government, Military, and Veterans' Affairs, 91st Leg., 1st Sess. (Feb. 23, 1989). We have had several occasions to address the judicial scope of review since the 1989 amendments to §§ 84-917 and 84-918. First, in Person v. Department of Soc. Servs., 234 Neb. 865, 453 N.W.2d 390 (1990), we affirmed our understanding of the APA's pre-1989 standards of review. Person involved an appeal from the Department's denial of an application for public medical assistance to a 5-year-old child suffering from multiple disabilities. In Person, the petition had been filed before the July 1, 1989, effective date of the amendments. The parents of the child, as his guardians, appealed the Department's finding and order to the district court pursuant to § 84-917. The district court, comporting with the limitations found in § 84-917(6)(a), held that the director's findings were totally unsupported by the evidence. The district court reversed the Department's determination denying assistance to the disabled child. The Department appealed and contended that its determination was, in fact, supported by the evidence. We again noted that the legislative mandate found in § 84-918, albeit incongruous, permitted us to conduct a true de novo review, although the district court had been bound by the standards discussed in Haeffner. We then defined a true de novo review. In a true de novo review, we are not limited to considering whether there was sufficient evidence to support the director's findings nor whether the district court erred in its determination. Rather, in a true de novo review, we use the assignments of error as a guide to the factual issues in dispute and make an independent factual determination based upon the record. In Bell Fed. Credit Union v. Christianson, 237 Neb. 519, 466 N.W.2d 546 (1991) ( Bell Fed. Credit Union I ), the 1989 amendments were controlling. Bell Federal filed an appeal to the district court from the Nebraska Appeal Tribunal's determination to award unemployment compensation benefits to striking workers. In affirming the decision of the appeal tribunal, the district court stated, `The standard for review on appeal of such an issue requires that the decision of the appeal tribunal should be affirmed unless it is unsupported by competent and substantial evidence, or is arbitrary or capricious, or the result of an error of law.' Id. at 522, 466 N.W.2d at 548. Bell Federal appealed to this court. We held that, as amended in 1989, § 84-918(3) permitted us to reverse, vacate, or modify the district court's judgment or final order if error appeared on the record. We stated: It is a logical impossibility for this court to review the district court judgment for errors appearing on the record if the district court incorrectly limited its review and, thus, failed to make factual determinations, as it must under a de novo on the record review. The district court's and this court's standards of review are interdependent. Bell Fed. Credit Union I, 237 Neb. at 522-23, 466 N.W.2d at 549. Therefore, in Bell Fed. Credit Union I, we stated that under the 1989 amendments to the APA, district courts were required to conduct a true de novo review, as defined in Person, of agency determinations. Such review is to be conducted on the record of the agency. The record consists of the transcripts and bill of exceptions of the proceedings before the agency and facts capable of being judicially noticed pursuant to Neb. Evid.R. 201. Dairyland Power Co-op v. State Bd. of Equal., 238 Neb. 696, 472 N.W.2d 363 (1991). In summary, our case law, the plain language of §§ 84-917 and 84-918, and the legislative history, are in complete agreement. Pursuant to the 1989 amendments to § 84-917, a district court is required to conduct a de novo review of agency determinations on the record of the agency. The district court is not limited to a review subject to the narrow criteria found in § 84-917(6)(a) but is required to make independent factual determinations based upon the record. The district court's decision is to be made independently of the agency's prior disposition. Therefore, the district court is not required to give deference to the findings of fact by the agency hearing officer and to the decision of the director of the Department. See, Department of Health v. Grand Island Health Care, 223 Neb. 587, 391 N.W.2d 582 (1986); Person, supra (defining de novo review). Upon review to this court, we are required to conduct a review for errors appearing on the record. See § 84-918(3).