Court Opinion

ID: 9555844
Source: CourtListenerOpinion
Date Created: 2023-08-15 14:06:15.446939+00
Date Added: 2024-06-11T15:34:43.090487
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
08/15/2023 09:06 AM CDT

                                                       - 168 -
                             Nebraska Court of Appeals Advance Sheets
                                  32 Nebraska Appellate Reports
                                IN RE CLAIMS AGAINST BANGHART PROPERTIES
                                            Cite as 32 Neb. App. 168

                         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 exam-
                    iner 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.
                             - 169 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
         IN RE CLAIMS AGAINST BANGHART PROPERTIES
                     Cite as 32 Neb. App. 168

  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 operat-
ing 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 depart-
ment, 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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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
         IN RE CLAIMS AGAINST BANGHART PROPERTIES
                     Cite as 32 Neb. App. 168

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 reas-
sured Fritz that Banghart Properties was not conducting busi-
ness 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 produc-
ers 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 con-
versations, 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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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
         IN RE CLAIMS AGAINST BANGHART PROPERTIES
                     Cite as 32 Neb. App. 168

the contracts and supporting documentation related to its
Nebraska business operations.
   After obtaining the contracts and accompanying docu-
ments from Banghart Properties, Fritz learned that Banghart
Properties had entered into 12 contracts with Nebraska produc-
ers 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 writ-
ten 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 posses-
sion 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 admit-
ted entering into the 12 grain purchase contracts as described
in the complaint, took delivery of some of the contracted
                              - 172 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
          IN RE CLAIMS AGAINST BANGHART PROPERTIES
                      Cite as 32 Neb. App. 168

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 viola-
     tions 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
                              - 173 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
          IN RE CLAIMS AGAINST BANGHART PROPERTIES
                      Cite as 32 Neb. App. 168

     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 produc-
     ers of their rights to recourse against the required grain
     dealer security. Therefore, we find by clear and convinc-
     ing 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 viola-
tions of the Act and related PSC regulations, the PSC deter-
mined 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 pre-
     sented 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
                              - 174 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
          IN RE CLAIMS AGAINST BANGHART PROPERTIES
                      Cite as 32 Neb. App. 168

     violations of the Act, we also note that these documenta-
     tion requirements are presumably directed at grain dealers
     that have actually obtained proper licensing.
        ....
        Therefore, we reduce [the department’s] recommenda-
     tion 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’] busi-
     ness records.
        We also recognize that even this reduced amount con-
     stitutes 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 require-
ment needed to qualify as a licensed grain dealer in Nebraska;
that Banghart Properties never obtained the required finan-
cial security to protect Nebraska producers as required by
Nebraska law; that Banghart Properties continued to operate
                             - 175 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
         IN RE CLAIMS AGAINST BANGHART PROPERTIES
                     Cite as 32 Neb. App. 168

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 employ-
ees; 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 find-
ing 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 pen-
alty without giving proper consideration and weight to numer-
ous 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 hear-
ing. 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 ver-
sion of the facts rather than another. Id.
                              - 176 -
        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
          IN RE CLAIMS AGAINST BANGHART PROPERTIES
                      Cite as 32 Neb. App. 168

                            ANALYSIS
                          Civil Penalty
   Banghart Properties first assigns that the PSC erred in
assessing a civil penalty without properly considering the miti-
gating 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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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
          IN RE CLAIMS AGAINST BANGHART PROPERTIES
                      Cite as 32 Neb. App. 168

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 pay-
      ment 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, com-
      mon carrier, contract carrier, licensee, grain dealer, or
      grain warehouseman for each violation of (a) any provi-
      sion 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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        Nebraska Court of Appeals Advance Sheets
             32 Nebraska Appellate Reports
          IN RE CLAIMS AGAINST BANGHART PROPERTIES
                      Cite as 32 Neb. App. 168

      enumerated in section 75-109.01, or (c) any rule, regu-
      lation, 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 hear-
      ing 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 compli-
      ance 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 provid-
ing 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 eli-
gible 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 determi-
      nation. The PSC maintains that our previous decisions
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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

      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 stan-
      dard of review, our inquiry was limited to whether the
      decision conformed to the law, was supported by compe-
      tent 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 def-
      erential 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 appro-
      priateness of lesser sanctions. The NTUSFA [Nebraska
      Telecommunications Universal Service Fund Act] pro-
      vides that the PSC has the power to withhold funds if a
      telecommunications company fails to comply with 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

      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 non-
      compliance 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 limita-
      tion 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 compli-
      ance 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 pow-
      ers 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 abso-
      lute and unqualified.
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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

   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 sub-
stantial 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 consti-
tutional 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” stan-
dard 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 wit-
nesses 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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        Nebraska Court of Appeals Advance Sheets
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          IN RE CLAIMS AGAINST BANGHART PROPERTIES
                      Cite as 32 Neb. App. 168

      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 discretion-
ary 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 vio-
lated.” 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 conve-
nience and necessity, and one that is peculiarly for the determi-
nation 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 stan-
dard of review set forth in In re Application No. OP-0003. That
is, in assessing a penalty under § 75-156, we find it appropri-
ate, 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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                      Cite as 32 Neb. App. 168

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 fac-
tors 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 undis-
puted facts in this record demonstrate a case of serious miscon-
duct with relatively minimal efforts at mitigation in light of the
nature of the misconduct.
   In reaching that conclusion, we are governed by the pen-
alty assessment criteria set forth in § 75-156(5), which cri-
teria 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 regula-
tory 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 con-
tracts with Nebraska producers to purchase extensive quanti-
ties 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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          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 pur-
chasing 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 require-
ments of the Act and the document maintenance requirements
of the corresponding regulations. And all of this was uncov-
ered by Fritz following her discovery of an advertisement
in a Nebraska newspaper placed after Jan explicitly repre-
sented 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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                     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 further-
ance 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 pro-
ducer, 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 miti-
      gating 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 incor-
      porating 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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      reduction of the civil penalty. To begin with, these so-
      called mitigating factors apparently did nothing to inter-
      fere 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 produc-
      ers 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 pur-
      sue 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 produc-
      ers 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 sub-
sequent remedial measures as described above, those mea-
sures did not adequately address the series of unauthorized
transactions Banghart Properties pursued with grain produc-
ers 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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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 require-
ments, 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 repre-
sentations that the company would not conduct business until
after obtaining such licensure. These actions were accompa-
nied 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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                      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 inci-
dents or violations so as to require reversal. This first assign-
ment 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 produc-
      ers 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 licens-
      ing was obtained. However, this sort of mitigation did
      not occur.
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                      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 con-
tracts 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 contract-
ing 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 pro-
vided 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 attend­
ant 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 con-
tracts. 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 assign-
ment 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 ade-
quate 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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                      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.