Court Opinion

ID: 4416279
Source: CourtListenerOpinion
Date Created: 2019-07-12 14:07:18.604552+00
Date Added: 2024-06-11T08:47:51.085644
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
07/12/2019 09:07 AM CDT

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                                  Nebraska Supreme Court A dvance Sheets
                                          303 Nebraska R eports
                         McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                                           Cite as 303 Neb. 56

                             McM anus Enterprises, Inc., doing business as
                             Heidelberg’s, appellant, v. Nebraska Liquor
                                   Control Commission, appellee.
                                                 ___ N.W.2d ___

                                        Filed May 3, 2019.     No. S-18-699.

                 1. Administrative Law: Judgments: Appeal and Error. A judgment or
                    final order rendered by a district court in a judicial review pursuant to
                    the Administrative Procedure Act may be reversed, vacated, or modified
                    by an appellate court for errors appearing on the record.
                 2. ____: ____: ____. When reviewing an order of a district court under
                    the Administrative Procedure Act for errors appearing on the record, the
                    inquiry is whether the decision conforms to the law, is supported by com-
                    petent evidence, and is neither arbitrary, capricious, nor unreasonable.
                 3. Judgments: Appeal and Error. An appellate court, in reviewing a dis-
                    trict court’s judgment for errors appearing on the record, will not substi-
                    tute its factual findings for those of the district court where competent
                    evidence supports those findings.
                 4. Administrative Law: Judgments. Whether an agency decision con-
                    forms to the law is by definition a question of law.
                 5. Administrative Law: Judgments: Statutes: Appeal and Error. To the
                    extent that the meaning and interpretation of statutes and regulations
                    are involved, questions of law are presented which an appellate court
                    decides independently of the decision made by the court below.
                 6. Administrative Law: Statutes. For purposes of construction, a rule or
                    regulation of an administrative agency is generally treated like a statute.
                 7. ____: ____. Properly adopted and filed regulations have the effect of
                    statutory law.
                 8. Administrative Law. Absent a statutory or regulatory indication to the
                    contrary, language contained in a rule or regulation is to be given its
                    plain and ordinary meaning.
                 9. ____. A rule is open for construction only when the language used
                    requires interpretation or may reasonably be considered ambiguous.
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              Nebraska Supreme Court A dvance Sheets
                      303 Nebraska R eports
        McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                          Cite as 303 Neb. 56

10. ____. A court will construe regulations relating to the same subject mat-
    ter together to maintain a consistent and sensible scheme.
11. ____. A court must attempt to give effect to all parts of a regulation,
    and if it can be avoided, no word, clause, or sentence will be rejected as
    superfluous or meaningless.
12. Administrative Law: Intent. In determining the meaning of regulatory
    language, its ordinary and grammatical construction is to be followed,
    unless an intent appears to the contrary or unless, by following such
    construction, the intended effect of the provisions would apparently
    be impaired.
13. Administrative Law: Liquor Licenses. Under 237 Neb. Admin. Code,
    ch. 6, § 019.01F (2012), a licensee cannot be sanctioned for a vio-
    lation unless the licensee has allowed an unreasonable disturbance
    to continue.
14. ____: ____. Under 237 Neb. Admin. Code, ch. 6, § 019.01F (2012),
    in order for “other activity” to be a disturbance, the dangerous activity
    itself must arise and be of such a nature that may place others in danger.

   Appeal from the District Court for Lancaster County:
A ndrew R. Jacobsen, Judge. Reversed and remanded with
directions.
  Charles D. Humble, of Erickson & Sederstrom, P.C., for
appellant.
  Douglas J. Peterson, Attorney General, and Milissa Johnson-
Wiles for appellee.
  Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
    Cassel, J.
                       INTRODUCTION
   This appeal turns on the correct interpretation of the Nebraska
Liquor Control Commission’s “disturbance rule.”1 The rule’s
plain language applies only where a licensee “allow[s] any
unreasonable disturbance; as such term is defined [in the
rule], to continue without taking the steps, as set forth [in the

1
    237 Neb. Admin. Code, ch. 6, § 019.01F (2012).
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              Nebraska Supreme Court A dvance Sheets
                      303 Nebraska R eports
        McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                          Cite as 303 Neb. 56

rule].”2 The commission and the district court on review3 dis-
regarded that plain language: ignoring the words “to continue.”
Although we must reverse this license cancellation, we empha-
size that our decision does not preclude the commission from
adopting a rule that would impose upon licensees a duty to take
reasonable steps to prevent disturbances from occurring in the
first instance. But its existing rule does not do so, and we are
required to apply the rule as written.
                        BACKGROUND
                        Disturbance Rule
   Because our decision turns upon the plain language of the
disturbance rule, we recite it in full:
         019.01F Disturbance: No licensee or partner, principal,
      agent or employee of any licensee shall allow any unrea-
      sonable disturbance; as such term is defined hereunder,
      to continue without taking the steps, as set forth here-
      under, within a licensed premise or in adjacent related
      outdoor areas.
         019.01F1 A “Disturbance” as used in this section shall
      mean any brawl, fight, or other activity which may endan-
      ger the patrons, employees, law enforcement officers, or
      members of the general public within licensed premises
      or adjacent related outdoor area. Such term shall include
      incidents involving, but not necessarily limited to: drug
      dealing; intoxicated individuals; soliciting of prostitution;
      or any physical contact between the licensee’s agents
      or employees and its customers, involving any kissing,
      or any touching of the breast, buttock or genital areas.
      Any brawl fight or other activity which results in seri-
      ous injury to any patro[n], employee or members of the

2
    Id. (emphasis supplied).
3
    See, Neb. Rev. Stat. § 53-1,116 (Reissue 2010) (appeal from commission
    order in accordance with Administrative Procedure Act); Neb. Rev. Stat.
    § 84-917 (Reissue 2014) (judicial review under Administrative Procedure
    Act).
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                         303 Nebraska R eports
        McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                          Cite as 303 Neb. 56

       general public shall be reported to law enforcement.
       Serious injury means any gunshot wou[n]d, knife or other
       stab wound or any other injury requiring medical treat-
       ment onsite or transportation to a medical facility for
       treatment. Licensees and their employees shall not pro-
       hibit or interfere in any way with a patro[n] who chooses
       to contact law enforcement in the event they are assaulted
       on the premises.
          019.01F2 Unless there is reason to believe that a
       licensee or partner, principal, agent or employee of any
       licensee would endanger himself/herself or others, such
       person shall take such action as is reasonably necessary
       to terminate the disturbance. Physical force should be
       exercised only in extreme circumstances and should be
       limited to the force reasonably required to terminate the
       disturbance and remove the individual from the licensed
       premise, without endangering any patron or other person.
          019.01F3 In the event efforts taken in accordance with
       the preceding subparagraph are not successful or if there
       is reason to believe that the licensee, partner, principal,
       agent or employee of any licensee may create a danger
       to himself/herself or others, th[e]n in such event, such
       person shall immediately contact law enforcement per-
       sonnel to assist in properly handling the disturbance.
       In the event law enforcement and/or medical person-
       nel are summoned, the directions and/or orders given
       by such law enforcement or medical personnel shall
       be followed.
          019.01F4 A licensee who has conformed with the
       procedure as set forth in this section shall be deemed to
       have not permitted a disturbance to occur and continue.
       Licensees who wish to document their compliance with
       this rule may maintain a log in which they document dis-
       turbances or other unusual occurrences.4

4
    § 019.01F.
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           Nebraska Supreme Court A dvance Sheets
                   303 Nebraska R eports
      McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                        Cite as 303 Neb. 56

                            Events
   John McManus is the owner of McManus Enterprises, Inc.
(collectively McManus), which operates Heidelberg’s bar in
Lincoln, Nebraska. In August 2017, a professional boxing
match was held at an arena in Lincoln. The day before the
match, an event promoter approached McManus, asking to host
an event at Heidelberg’s after the match. McManus agreed.
The promoter hired and paid a company to provide security for
the event.
   The Omaha Police Department informed the Lincoln Police
Department (LPD) that an event following the last boxing
match in Omaha, Nebraska, resulted in an “all call” disturb­
ance. “All call” means a radio call directing all available offi-
cers to respond. LPD became concerned that “there could be a
gang following and some violent problems.” An LPD officer
testified that on the evening of the match, LPD approached
John McManus, the owner, about its concerns and informed
him of the incident following the last boxing match in Omaha.
The owner testified that he was unaware of problems following
the last boxing match in Omaha and that LPD never informed
him about such issues.
   After the match, LPD had 10 to 15 officers in the parking
lot of Heidelberg’s. About 1:55 a.m., a small group of people
clustered around the front door started a fight that rippled
through the crowd. LPD entered the bar and began to break up
the fights. One officer requested an all-available-unit call. A
few of the security company’s guards aided LPD in breaking
up the fights. Approximately 15 to 20 minutes later, all patrons
were out of the bar.

                       License Proceeding
   The commission charged McManus with “allow[ing] or
permit[ting] a disturbance,” in violation of § 019.01F. Although
the commission charged McManus with a second violation, it
dismissed that charge at the close of the hearing.
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        McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                          Cite as 303 Neb. 56

   After the hearing, the commission found that McManus
violated the disturbance rule when it (1) “allow[ed] or
permit[ted] a disturbance in or about the licensed premises,”
(2) “ignore[d] security concerns that were expressed to it by
law enforcement and proceeded with the event despite the
warning,” and (3) “willingly turn[ed] over a portion of [its]
licensed business to the care and control of an unregulated
third party and its security force,” and that (4) such willful
actions “created an unreasonable threat to the health, safety
and welfare of its patrons and first responders.” The commis-
sion canceled McManus’ liquor license.
                          District Court
   After McManus sought judicial review of the commis-
sion’s order, the district court concentrated its analysis on the
“other activity which may endanger” language in the defini-
tion of “disturbance” in § 019.01F1. It reasoned that because
McManus was aware of the Omaha “all call” and admitted
to similar problems with previous events, it was aware of
the potential danger. It reasoned that the actions of the secu-
rity company and LPD could not be attributed to McManus,
because McManus had no control over them. The court con-
cluded that the record supported the commission’s findings that
McManus violated the disturbance rule when it was aware of
the danger and failed to take reasonable steps to terminate the
disturbance. It affirmed the commission’s order.
   McManus filed a timely appeal, which we moved to our
docket.5
                 ASSIGNMENTS OF ERROR
   McManus assigns, restated, that the district court erred
in (1) failing to apply the plain meaning of the disturbance
rule and thereby finding that McManus allowed a disturbance
and (2) canceling McManus’ liquor license “on the basis
that [McManus] failed to take actions required in the . . .

5
    See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2018).
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         McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                           Cite as 303 Neb. 56

disturbance rule to prevent the disturbance from continuing
when the required actions already had been taken by third par-
ties to prevent the disturbance from continuing.”
                    STANDARD OF REVIEW
   [1-3] A judgment or final order rendered by a district court
in a judicial review pursuant to the Administrative Procedure
Act may be reversed, vacated, or modified by an appellate
court for errors appearing on the record.6 When reviewing an
order of a district court under the Administrative Procedure Act
for errors appearing on the record, the inquiry is whether the
decision conforms to the law, is supported by competent evi-
dence, and is neither arbitrary, capricious, nor unreasonable.7
An appellate court, in reviewing a district court’s judgment for
errors appearing on the record, will not substitute its factual
findings for those of the district court where competent evi-
dence supports those findings.8
   [4,5] Whether an agency decision conforms to the law
is by definition a question of law.9 To the extent that the
meaning and interpretation of statutes and regulations are
involved, questions of law are presented which an appel-
late court decides independently of the decision made by the
court below.10
                          ANALYSIS
   The commission is empowered to adopt and promulgate
rules and regulations to carry out the Nebraska Liquor Control
Act,11 including provisions covering any and all details which

 6
     Leon V. v. Nebraska Dept. of Health & Human Servs., 302 Neb. 81, 921
N.W.2d 584 (2019).
 7
     Id.
 8
     Id.
 9
     Betty L. Green Living Trust v. Morrill Cty. Bd. of Equal., 299 Neb. 933,
     911 N.W.2d 551 (2018).
10
     Leon V., supra note 6.
11
     Neb. Rev. Stat. §§ 53-101 to 53-1,122 (Reissue 2010 & Cum. Supp. 2018).
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         McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                           Cite as 303 Neb. 56

are necessary or convenient to the enforcement of the intent,
purpose, and requirements of the act.12 McManus does not dis-
pute that as a licensee, it is subject to the rules and regulations
of the act, including the disturbance rule.
   McManus instead contends that the district court erred when
it agreed with the commission that the disturbance occurred
when McManus hosted the event. It argues this is contrary
to the plain reading of the regulation, because the regulation
is designed to terminate disturbances that are occurring from
continuing. It argues that nothing in the regulation places a
duty on a licensee to take action against something that might
or could happen. We agree.
   [6,7] For purposes of construction, a rule or regulation of
an administrative agency is generally treated like a statute.13
Indeed, we have often said that properly adopted and filed
regulations have the effect of statutory law.14
   [8,9] Absent a statutory or regulatory indication to the
contrary, language contained in a rule or regulation is to be
given its plain and ordinary meaning.15 A rule is open for con-
struction only when the language used requires interpretation
or may reasonably be considered ambiguous.16 Neither party
argued that the disturbance rule is ambiguous. We agree that its
plain and ordinary meaning controls our decision.
   [10] A court will construe regulations relating to the same
subject matter together to maintain a consistent and sensible
scheme.17 Consequently, we read § 019.01F, which includes
its subparagraphs, §§ 019.01F1 to 019.01F4, to determine the

12
     See DLH, Inc. v. Nebraska Liquor Control Comm., 266 Neb. 361, 665
N.W.2d 629 (2003).
13
     Melanie M. v. Winterer, 290 Neb. 764, 862 N.W.2d 76 (2015).
14
     See, e.g., Leon V., supra note 6.
15
     In re Petition of Golden Plains Servs. Transp., 297 Neb. 105, 898 N.W.2d
670 (2017).
16
     Prokop v. Lower Loup NRD, 302 Neb. 10, 921 N.W.2d 375 (2019).
17
     Utelcom, Inc. v. Egr, 264 Neb. 1004, 653 N.W.2d 846 (2002).
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                       303 Nebraska R eports
         McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                           Cite as 303 Neb. 56

meaning of the disturbance rule as a whole. In discussing the
rule, reference to § 019.01F will generally refer to the entire
rule. But when quoting the rule, we will use a specific para-
graph to enable a reader to easily locate our quotation.
   By its plain language, § 019.01F dictates that no licensee
shall allow any unreasonable disturbance to continue. The
commission argues that the regulation also prohibits a
licensee from allowing a disturbance to occur. Logically, in
order for a disturbance to continue, it must first occur. But
as we explain, under the plain language of the regulation, a
licensee does not violate the disturbance rule until a disturb­
ance has occurred.
   [11] First and foremost, the first section of the disturbance
rule compels this reading. It states that “[n]o licensee . . . shall
allow any unreasonable disturbance; as such term is defined
hereunder, to continue without taking the steps, as set forth
hereunder, within a licensed premise or in adjacent related
outdoor areas.”18 When quoting from this language, the district
court decision simply omitted the words “to continue.” Given
that we treat a regulation like a statute,19 a settled principle
of statutory interpretation20 dictates this rule: A court must
attempt to give effect to all parts of a regulation, and if it can
be avoided, no word, clause, or sentence will be rejected as
superfluous or meaningless. The district court’s reading disre-
garded this principle.
   A plain reading of § 019.01F2 supports our conclusion.
It requires the licensee and those who act for the licensee to
“take such action as is reasonably necessary to terminate the
disturbance.”21 “Terminate” means “[t]o bring to an end, put

18
     § 019.01F.
19
     See Melanie M., supra note 13.
20
     See Patterson v. Metropolitan Util. Dist., 302 Neb. 442, 923 N.W.2d 717
     (2019).
21
     § 019.01F2 (emphasis supplied).
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        McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                          Cite as 303 Neb. 56

an end to, cause to cease.”22 It seems evident that one cannot
“terminate” something that has not occurred.
    Section 019.01F3 reinforces this understanding. “In the
event efforts taken in accordance with [§ 019.01F2] are not
successful . . . , th[e]n in such event, such person shall imme-
diately contact law enforcement personnel to assist in prop-
erly handling the disturbance.”23 Efforts cannot be either suc-
cessful or unsuccessful until a disturbance has occurred and
the licensee or its representative has attempted some “action
. . . to terminate the disturbance.”24 And how, a reader of the
regulation might reasonably ask, is one to request assistance
from law enforcement in “properly handling the disturbance”
until after a disturbance has commenced.25
    [12] Finally, § 019.01F4 provides a safe harbor for licens-
ees which have “conformed” to the disturbance rule. It states
in part, “A licensee who has conformed with the procedure as
set forth in this section shall be deemed to have not permit-
ted a disturbance to occur and continue.”26 Another rule of
statutory construction27 leads to this rule: In determining the
meaning of regulatory language, its ordinary and grammati-
cal construction is to be followed, unless an intent appears
to the contrary or unless, by following such construction,
the intended effect of the provisions would apparently be
impaired. Under the interpretation urged by the commission,
one would expect § 019.01F4 to read “occur or continue,”
but it does not. The plain and ordinary meaning of “and,” in
this context, means that a disturbance has both “occur[red]”
and “continue[d].”

22
     “Terminate,” Oxford English Dictionary Online, http://www.oed.com/
     view/Entry/199426 (last visited Apr. 19, 2019).
23
     § 019.01F3.
24
     § 019.01F2.
25
     See § 019.01F3.
26
     § 019.01F4 (emphasis supplied).
27
     See Patterson, supra note 20.
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                Nebraska Supreme Court A dvance Sheets
                        303 Nebraska R eports
         McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                           Cite as 303 Neb. 56

   [13] Within the disturbance rule, the word “occur” appears
only in § 019.01F4. Under the commission’s interpretation,
one would expect it to appear in § 019.01F. But it does not. As
used in § 019.01F4, we understand it to support the ordinary
and plain language of § 019.01F. Similarly, §§ 019.01F2 and
019.01F3 support the plain language of § 019.01F by requiring
licensees to take reasonable action to terminate a disturbance.
Again, logically, in order to terminate a disturbance, it must
occur and continue. We hold that under § 019.01F, a licensee
cannot be sanctioned for a violation unless the licensee has
allowed an unreasonable disturbance to continue.
   The State agreed with McManus that merely hosting an
event is not a violation of § 019.01F. However, it contends that
McManus violated the disturbance rule when
      [McManus] agree[d] to host the event by opening its
      doors to a third party promotor and the promotor’s secu-
      rity team over which [McManus] had no control, with
      knowledge that prior events by the same promotor had
      resulted in an “all call” for LPD, with no clear plan and
      adequate security tailored to the nature of the event and
      size of the expected “standing room only” crowd.28
The district court reasoned that McManus “violated the dis­
turbance rule when it disregarded the security concerns
expressed to it by law enforcement and proceeded with the
event that placed the safety of the public at risk.” Both inter-
pretations relied upon the phrase “other activity which may
endanger”29 to craft a preventative interpretation of “other
activity.” This interpretation inconsistently read into the regu-
lation a preventative consideration that does not appear within
the explicit language of the regulation.
   Under the plain language, a “disturbance” applies a pres-
ent temporal meaning.30 The rule utilizes the present tense

28
     Brief for appellee at 10.
29
     § 019.01F1.
30
     See id.
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      McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                        Cite as 303 Neb. 56

when defining disturbance and does not place any conditional
language on the existence of the disturbance. For example, a
disturbance shall mean any brawl which may endanger others
or any fight which may endanger others. It would fly in the
face of the plain and ordinary language to read all other dis-
turbances as occurring in the present and “other activity which
may endanger” as preventative or precognitive. Effectively, the
district court’s interpretation placed the proverbial cart before
the horse when it placed the conditional language on the dis­
turbance and not the consequences.
   Moreover, the nonexhaustive list of examples of a “disturb­
ance” in § 019.01F1—such as drug dealing, intoxicated indi-
viduals, soliciting prostitution, and physical contact between
customers and employees or agents—further illustrates dis­
turbances happening in the present. The list utilizes the pres-
ent, present participle, and past tense to define disturbance. It
does not place any conditional language on the existence of
the disturbance.
   [14] A licensee’s hosting an event with awareness of a
potential disturbance will not be considered a disturbance.
Unlike the several other examples of disturbances listed above,
hosting an event, in and of itself (at least under the disturb­
ance rule as now written), does not put others in potential
danger. Some other activity must occur, like the brawl that
broke out, to place others in danger for it to be considered a
disturbance under the existing language. In this case, the dis-
turbance did not occur until 1:55 a.m., when the brawl took
place. At that point, LPD officers were immediately involved.
Therefore, under § 019.01F, in order for “other activity” to be
a dis­turbance, the dangerous activity itself must arise and be
of such a nature that may place others in danger.
   Under the plain and ordinary meaning of the disturbance
rule, McManus did not have to take reasonable action to
terminate the disturbance until 1:55 a.m., when it occurred,
at which point the duty under § 019.01F to “[not] allow any
unreasonable disturbance . . . to continue” sprang into effect.
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      McMANUS ENTERS. v. NEBRASKA LIQUOR CONTROL COMM.
                        Cite as 303 Neb. 56

Because the district court found that McManus did not take
reasonable action before the disturbance occurred, its interpre-
tation was inconsistent with the plain language of § 019.01F.
Accordingly, the district court’s interpretation did not conform
to the law, and we reverse.
   Our holding does not preclude the commission from promul-
gating a preventative rule for disturbances. The problem is, the
current rule simply does not do so.
                          CONCLUSION
   Under the plain and ordinary language, a licensee does not
violate the disturbance rule until a disturbance has occurred. At
that point, the duty to “not allow” the disturbance “to continue”
becomes effective. Because the district court’s analysis read
into the regulation an interpretation inconsistent with the plain
language, its decision did not conform to the law. We reverse
the decision and remand the cause to the district court with
directions to remand the matter to the commission with direc-
tions to dismiss.
                      R eversed and remanded with directions.