Court Opinion

ID: 9703705
Source: CourtListenerOpinion
Date Created: 2023-08-26 00:05:32.080785+00
Date Added: 2024-06-11T18:21:51.304723
License: Public Domain

Gerrard, J.,
concurring.
The primary issue presented in this appeal is whether the regulation defining a “disturbance” exceeds the authority granted to the Nebraska Liquor Control Commission (Commission) by the Legislature in the Nebraska Liquor Control Act, Neb. Rev. Stat. § 53-101 et seq. (Reissue 1998 & Cum. Supp. 2002). Stated more specifically, the issue is whether there is a nexus between the regulation and the sale or use of alcoholic liquors. See County Cork v. Nebraska Liquor Control Comm., 250 Neb. 456, 550 N.W.2d 913 (1996). The parties to this case have not presented us with a record on which we can base such a determination. Because administrative regulations are presumed to be valid, see Jacobson v. Solid Waste Agency of Northwest Neb., 264 Neb. 961, 653 N.W.2d 482 (2002), and there is no evidence in this record to rebut that presumption, I conclude that DLH has failed to demonstrate that the Commission’s regulation is ultra vires. On that basis, I concur in the result reached by the majority.
As noted by the majority, 237 Neb. Admin. Code, ch. 6, § 019.01F (1994) prohibits a licensee from allowing an unreasonable disturbance on the licensed premises, and § 019.01F1 defines a disturbance, in relevant part, as “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.” The parties appear to agree that § 019.01F1 has not been enacted pursuant to any statute that specifically authorizes the Commission to regulate such conduct. DLH contends that § 019.01F1 exceeds the Commission’s authority to promulgate regulations “necessary or convenient to the enforcement of the intent, purpose, and requirements” of the Nebraska Liquor *371Control Act. See § 53-118(4). The initial question is which party bears the burden of showing that a regulation is, or is not, within the authority delegated to an administrative agency.
The answer to that question is provided by the Administrative Procedure Act (APA), Neb. Rev. Stat. § 84-901 et seq. (Reissue 1999). Section 84-906(1) specifically provides that “[t]he filing of any rule or regulation shall give rise to a rebuttable presumption that it was duly and legally adopted.” This statutory presumption is consistent with the principle that in considering the validity of a regulation, courts generally presume that legislative or rulemaking bodies, in enacting ordinances or rules, acted within their authority, and the burden rests on those who challenge their validity. Jacobson, supra; Busch v. Omaha Pub. Sch. Dist., 261 Neb. 484, 623 N.W.2d 672 (2001). See, also, Dillard Dept. Stores v. Polinsky, 247 Neb. 821, 530 N.W.2d 637 (1995); Dolan v. Svitak, 247 Neb. 410, 527 N.W.2d 621 (1995); Wagoner v. Central Platte Nat. Resources Dist., 247 Neb. 233, 526 N.W.2d 422 (1995) (rebuttable presumption of validity attaches to actions of administrative agencies and burden of proof rests with party challenging agency’s actions).
Furthermore, this rule is consistent with the substantial weight of authority from courts in other jurisdictions, which have applied similar principles in the context of determining whether a rule or regulation is within the scope of authority statutorily delegated to an administrative agency. See, e.g., Mourning v. Family Publications Service, Inc., 411 U.S. 356, 93 S. Ct. 1652, 36 L. Ed. 2d 318 (1973); WPPA v. State, Dept. of Revenue, 148 Wash. 2d 637, 62 P.3d 462 (2003) (en banc); Mass. Fed. of Teachers v. Bd. of Educ., 436 Mass. 763, 767 N.E.2d 549 (2002); Kuppersmith v. Dowling, 93 N.Y.2d 90, 710 N.E.2d 660, 688 N.Y.S.2d 96 (1999); Fogle v. H & G Restaurant, 337 Md. 441, 654 A.2d 449 (1995); In re Township of Warren, 132 N.J. 1, 622 A.2d 1257 (1993); Ford Dealers v. Department of Motor Vehicles, 32 Cal. 3d 347, 650 P.2d 328, 185 Cal. Rptr. 453 (1982); Hiserote Homes, Inc. v. Riedemann, 277 N.W.2d 911 (Iowa 1979); Foremost-McKesson, Inc. v. Davis, 488 S.W.2d 193 (Mo. 1972) (en banc); Norwood v. Paranteau, 75 S.D. 303, 63 N.W.2d 807 (1954); Toole v. State Bd. of Dentistry, 306 Mich. 527, 11 N.W.2d 229 (1943); Public *372Counsel v. Public Utility Com’n, 104 S.W.3d 225 (Tex. App. 2003); N.M. Mining Ass’n v. N.M. Mining Com’n, 122 N.M. 332, 924 P.2d 741 (N.M. App. 1996); A-Plus v. Com’r of Jobs and Training, 494 N.W.2d 522 (Minn. App. 1993). Cf. O’Callaghan v. Rue, 996 P.2d 88 (Alaska 2000) (court exercises independent judgment, but defers to areas of agency expertise and policy determinations). But see Ore. Newspaper Pub. v. Peterson, 244 Or. 116, 415 P.2d 21 (1966) (en banc) (burden on administrative agency). Cf. In re Club 107, 152 Vt. 320, 566 A.2d 966 (1989) (deference not warranted where Liquor Control Board regulated outside area of expertise).
As one leading commentator has explained:
Placing the burden on agencies generally to demonstrate the lawfulness of their rules when they are challenged in court would be inconsistent with the well-established general presumption of agency regularity. Placing that burden on agencies is also not rational because, under normal circumstances, one would expect persons occupying public positions of trust to honor their oath of office and to act lawfully. Shifting this burden to agencies generally would also place an unnecessarily heavy burden on them, requiring agencies to incur significant costs in fully defending a rule every time an unsupported allegation of invalidity was made in a lawsuit. In addition, generally requiring agencies to demonstrate initially and finally the validity of their rules when they are challenged in court would needlessly increase the uncertainty with respect to the validity of many agency rules, would encourage litigation, and would automatically denigrate the competence and good faith of our government administrators. . . . Consequently . . . agency rules should be presumed valid, and the burden should be imposed on those who challenge them to initially and finally demonstrate their illegality, except in those unusual situations where countervailing considerations of public policy dictate a contrary result.
Arthur Earl Bonfield, State Administrative Rule Making § 9.2.9 at 569-70 (1986 & Supp. 1993).
I recognize that in County Cork v. Nebraska Liquor Control Comm., 250 Neb. 456, 465, 550 N.W.2d 913, 919 (1996), we said *373that “in order for a regulation to be ‘necessary or convenient’ to the enforcement of the [Nebraska Liquor Control] Act, the Commission must show some nexus between [the challenged regulation] and alcoholic liquors.” (Emphasis supplied.) We did not otherwise discuss the burden of showing such a nexus. To the extent County Cork implies that the burden of proving a nexus is on the Commission, it is contrary to § 84-906(1). More significantly, however, placing the burden of proving a nexus was not before us in that case. In County Cork, the Commission did not attempt to show that there was a nexus between the regulation at issue in that case and alcoholic liquor. See brief for appellee at 8 to 11, case No. S-95-1395. Since neither party in County Cork contended there was a nexus between the regulation and the sale or use of alcoholic liquor, we were not required to place the burden of proof in order to conclude there was no nexus present in that case.
Based on the foregoing analysis, I would hold that where a party asserts that an administrative rule or regulation is ultra vires, the rule or regulation is presumptively valid, and the burden is on the party who challenges its validity. See Jacobson v. Solid Waste Agency of Northwest Neb., 264 Neb. 961, 653 N.W.2d 482 (2002). More specifically, a party asserting that a Commission regulation is not “necessary or convenient” to the enforcement of the Nebraska Liquor Control Act has the burden to show that there is no nexus between the challenged regulation and the sale or use of alcoholic liquors. See, County Cork, supra; § 53-118(4). “ ‘That burden cannot be carried “by arguing that the record does not affirmatively show facts which support the regulation.” ’ ” Mass. Fed. of Teachers v. Bd. of Educ., 436 Mass. 763, 771, 767 N.E.2d 549, 558 (2002).
The difficulty in this case is that the record is devoid of any basis upon which this issue can properly be decided. Meaningful review of a regulation is very difficult without some substantiated explanation of the basis for the regulation. Courts are not intended to be experts in the area of alcohol regulation, nor are courts intended to be experts in other state-regulated areas. It is not the function of a court either to “provide a nexus” or to “show the lack of a nexus” between a challenged regulation and the regulated activity in the absence of evidence tending to *374prove or disprove the existence of such a relationship. A developed record is a prerequisite to meaningful judicial review.
For instance, in Anderson, Leech & Morse v. Liquor Bd., 89 Wash. 2d 688, 690, 575 P.2d 221, 223 (1978) (en banc), the appellant tavern owners challenged a regulation prohibiting “topless table dancing” on licensed premises. The record included evidence noting the “great increase in arrests for disorderly conduct on licensed premises, and the frequency with which these incidents occurred where topless table dancing was permitted.” Id. at 695, 575 P.2d at 226. Based on that evidence, the court concluded that there was “a nexus between the conduct prohibited and the sale of liquor.” Id.
This court has engaged in similar analyses when presented with records that substantiate the arguments made by the parties. For example, in County of Dodge v. Department of Health, 218 Neb. 346, 355 N.W.2d 775 (1984), the Department of Health had concluded that a hospital could purchase, but not lease, new nuclear medicine equipment. The record contained testimony from a hospital administrator regarding the need for the equipment and the choice to lease rather than purchase the equipment, as well as testimony from a certified public accountant and a financial feasibility analyst regarding the financial costs and benefits of either purchasing or leasing the equipment. Based on that evidence, we concluded that the Department of Health’s rules and regulations contravened the statute that the agency was obliged to administer. Id. Compare Cornhusker Christian Ch. Home v. Dept. of Soc. Servs., 227 Neb. 94, 416 N.W.2d 551 (1987) (upholding regulation prohibiting childcare agencies from using corporal punishment).
The record in the instant case contains no comparable evidence regarding the issue presented. In the absence of such evidence, I conclude that DLH has not met its burden of rebutting the presumption that § 019.01F1 was lawfully adopted.
Nonetheless, the majority concludes, in relevant part, that the Commission’s regulations,
by their terms, prohibit sexual contact occurring on the licensed premises or in adjacent related outdoor areas as a logical means of protecting patrons, employees, and others on the premises or in adjacent related outdoor areas from *375activity which could lead to conduct endangering those persons within the licensed premises or in adjacent related outdoor areas.
I would not go that far. First, the majority’s reasoning is circular. The majority appears to conclude that the Commission’s regulations are valid solely because the regulations are a logical means of protecting people from the conduct that the regulations prohibit. But more significantly, the record before us does not provide us with a basis for the majority’s conclusion — we should be in the business of “judging” whether a nexus exists based on the evidence presented, not providing such a nexus in the absence of such evidence. Thus, we should simply conclude that DLH has failed to meet its burden of showing the absence of a nexus between the regulation and the sale or use of alcoholic liquor, and reserve judgment on whether such a nexus exists until a record is presented that allows for a meaningful review of the matter.
I note that the Legislature’s 1994 adoption of significant sections of the 1981 revision of the Model State Administrative Procedure Act, although it did not take effect until after the regulations at issue in this case were promulgated, promises to greatly facilitate the judicial review of agency rules and regulations. Compare Unif. Law Comm. Model State Admin. Procedure Act (1981), 15 U.L.A. 7 (2000 & Supp. 2003), with 1994 Neb. Laws, L.B. 446. For rules or regulations adopted after August 1, 1994, § 84-906.01 requires an administrative agency to maintain an official rulemaking or regulation-making record, containing, inter alia, all of the written materials or petitions prepared for and by the agency in connection with the proposed rule or regulation, any content of oral presentations made in a proceeding about the proposed rule or regulation, and a copy of the “concise explanatory statement” that the agency is required to file with the Secretary of State stating the reasons for adopting the rule or regulation. See § 84-907.04(1). Upon judicial review, this record constitutes the official agency record with respect to the rule or regulation, although it need not constitute the exclusive basis for judicial review of the rule or regulation. § 84-906.01(3). Furthermore, “[o]nly the reasons contained in the concise explanatory statement may be used by an agency as justifications for the adoption *376of the rule or regulation in any proceeding in which its validity is at issue.” § 84-907.04(2).
These provisions are intended to facilitate a more structured and rational agency and public consideration of proposed rules, and the process of judicial review of the validity of rules. See Unif. Law Comm. Model State Admin. Procedure Act (1981) § 3-112, comment, 15 U.L.A. 51 (2000). “A court reviewing the legality of a rule can do so effectively only if it has access to all the relevant materials that were generated in the agency proceeding upon which that rule was based. Consequently, a rule-making record requirement helps to assure the legality of rules.” Arthur Earl Bonfield, State Administrative Rule Making § 6.12.1(a) at 327 (1986 & Supp. 1993).
This requirement does not shift the ultimate burden of persuasion to the agency. See § 84-906(1). See, also, Unif. Law Comm. Model State Admin. Procedure Act (1981), § 5-116(a)(1), 15 U.L.A. 144 (2000). However, it certainly places a burden of production on the agency to provide a reviewing court with the record maintained pursuant to § 84-906.01. This record will provide a basis for judicial review and, in conjunction with § 84-907.04, will provide the party challenging the rule or regulation with a meaningful opportunity to contest the agency’s basis for enacting the rule or regulation. Unfortunately, the regulations at issue in this case were filed prior to the August 1,1994, effective date of the amendments to the APA, and the Legislature specifically provided that the changes made to the APA should not affect the validity of a rule or regulation adopted prior to that date. § 84-906(4).
It is entirely possible, and perhaps even likely, that there is a nexus between § 019.01F1 and the sale or use of alcoholic liquor. Cf. County Cork v. Nebraska Liquor Control Comm., 250 Neb. 456, 550 N.W.2d 913 (1996), citing Major Liquors, Inc. v. City of Omaha, 188 Neb. 628, 198 N.W.2d 483 (1972) (recognizing, in dicta, a nexus between topless dancing and alcohol consumption). However, I am unable to reach that conclusion in this case, because it is unjustified by the record before us. In the absence of evidence proving or disproving a nexus between § 019.01F1 and the sale or use of alcoholic liquor, I conclude that DLH failed to meet its burden to rebut the presumption that *377§ 019.01F1 was lawfully enacted. Based on this reasoning, I concur in the result reached by the majority.
Hendry, C J., and Connolly, J., join in this concurrence.