County Cork, Inc. v. Nebraska Liquor Control Com'n

• Citation: 550 N.W.2d 913,250 Neb. 456
• Decision Date: 28 June 1996
• Docket Number: No. S-95-1395,S-95-1395
• Parties: COUNTY CORK, INC., doing business as County Cork Liquor, Appellant, v. NEBRASKA LIQUOR CONTROL COMMISSION, Appellee.
• Court: Supreme Court of Nebraska

Page 913

550 N.W.2d 913

250 Neb. 456

COUNTY CORK, INC., doing business as County Cork Liquor, Appellant, v. NEBRASKA LIQUOR CONTROL COMMISSION, Appellee.

No. S-95-1395.

Supreme Court of Nebraska.

June 28, 1996.

Syllabus by the Court

1. Statutes: Appeal and Error. Statutory interpretation is a matter of law in connection with which an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determination made by the court below.

2. Administrative Law: Statutes. A legislative enactment may properly confer general powers upon an administrative agency and delegate to the agency the power to make rules and regulations concerning the details of the legislative purpose.

3. Administrative Law: Statutes. An administrative agency is limited in its rulemaking authority to powers granted to the agency by the statutes which they are to administer, and it may not employ its rulemaking power to modify, alter, or enlarge portions of its enabling statute.

4. Statutes: Words and Phrases. When an amendatory act uses language substantially similar to that found to be unenforceable and statutory changes were not made in response to the court's previous opinion, that statutory section will likewise be found unenforceable.

5. Constitutional Law: Statutes. When an amendatory act is invalid, the previous statute on the subject remains in full force and effect.

6. Statutes: Legislature: Intent. In construing a statute, a court must determine and give effect to the purpose and intent of the Legislature as ascertained from the entire language of the statute considered in its plain, ordinary, and popular sense.

7. Administrative Law: Alcoholic Liquors: Other Acts. In order for a regulation to be "necessary or convenient" to the enforcement of the Nebraska Liquor Control Act, the Nebraska Liquor Control Commission must show some nexus between the "Other Illegal Activities" and alcoholic liquors.

Donald L. Dunn and Timothy L. Moll, of Rembolt Ludtke & Berger, Lincoln, for appellant.

Don Stenberg, Attorney General, and Laurie Smith Camp, Lincoln, for appellee.

WHITE, C.J., and CAPORALE, FAHRNBRUCH, LANPHIER, WRIGHT, CONNOLLY, and GERRARD, JJ.

CONNOLLY, Justice.

The question presented is whether the powers statutorily granted to the Nebraska Liquor Control Commission (Commission) allow the regulation of illegal acts not directly related to the sale, manufacture, or distribution of liquor. County Cork, Inc., appeals from an order of the district court for Lancaster County affirming an order of the Commission suspending the liquor license of County Cork. The basis of the suspension order was a criminal citation issued to an employee of County Cork for selling tobacco to a minor. As we find that the Commission exceeded its statutory power in enforcing the regulation under which it suspended County Cork's license, we reverse.

FACTUAL BACKGROUND

According to the evidence presented to the Commission, Officer Dan Plautz of the Nebraska State Patrol conducted a series of tobacco compliance checks at a number of liquor stores in Lincoln, Nebraska, on October 24, 1994. Plautz drove a cooperating 17-year-old female to the liquor stores and instructed her to attempt to purchase cigarettes with her own identification. After showing identification, the cooperating individual purchased cigarettes at the County Cork Liquor store at 2702 South Street. After she left the store and gave the cigarettes to Plautz, Plautz issued a criminal citation to the County Cork employee for selling tobacco products to a minor in violation of Neb.Rev.Stat. § 28-1419 (Reissue 1995).

At the time at which this citation was given, a regulation of the Commission provided: "Other Illegal Activities. No activity prohibited by any provision of the Nebraska Law or Local Ordinance shall be conducted on or about any premises licensed under the Nebraska Liquor Control Act." 237 Neb.Admin.Code, ch. 6, § 019.01Q (March 29, 1994). Pursuant to this regulation, the Commission notified County Cork that it would hold a hearing to determine whether County Cork had violated the "Other Illegal Activities" regulation.

On January 5, 1995, the Commission held a hearing at which County Cork moved to dismiss the charges against it on the grounds that the regulation prohibiting "Other Illegal Activities" was overly broad and exceeded the Commission's rulemaking authority. The motion was denied. At the time of this hearing, the underlying criminal charge against the County Cork employee had not been adjudicated. Nevertheless, on January 31, the Commission entered an order finding that County Cork had violated the "Other Illegal Activities" regulation by selling tobacco to a minor. The Commission suspended County Cork's liquor license for 1 day and assessed court costs of $45 against County Cork.

County Cork timely appealed to the district court for Lancaster County, and the district court affirmed the order of the Commission. We granted County Cork's petition to bypass the Nebraska Court of Appeals.

ASSIGNMENTS OF ERROR

County Cork argues that the district court erred in affirming the order of the Commission because (1) the "Other Illegal Activities" regulation is facially invalid and unenforceable as an attempt by the Commission to regulate beyond the authority granted to it by statute, (2) it is beyond the power and authority of the Commission to enforce the "Other Illegal Activities" regulation against County Cork for selling tobacco to a minor, and (3) the order deprives County Cork of property without due process of law in violation of article I, § 3, of the Constitution of the State of Nebraska and the 5th and 14th Amendments to the U.S. Constitution.

STANDARD OF REVIEW

Statutory interpretation is a matter of law, in connection with which an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determination made by the court below. In re Interest of Archie C. 250 Neb. 123, 547 N.W.2d 913 (1996); Solar Motors v. First Nat. Bank of Chadron, 249 Neb. 758, 545 N.W.2d 714 (1996); In re Estate of Soule, 248 Neb. 878, 540 N.W.2d 118 (1995); In re Interest of Lisa O., 248 Neb. 865, 540 N.W.2d 109 (1995).

ANALYSIS

There are two related but distinct doctrines concerning the limitations on the delegation of powers upon an administrative agency. The first, and more common, problem is that of delegating legislative authority upon an administrative agency. We have previously held certain amendments to the Nebraska Liquor Control Act (Act) to be unconstitutional as delegations of legislative authority upon an administrative agency. See, Kwik Shop v. City of Lincoln, 243 Neb. 178, 498 N.W.2d 102 (1993); Bosselman, Inc. v. State, 230 Neb. 471, 432 N.W.2d 226 (1988).

However, this appeal does not present the delegation problem. Instead, we must determine whether the Commission exceeded its statutorily based rulemaking authority in promulgating the "Other Illegal Activities" regulation.

The Commission is statutorily created and empowered. We have previously noted that a legislative enactment may properly confer general powers upon an administrative agency and delegate to the agency the power to make rules and regulations concerning the details of the legislative purpose. State ex rel. Douglas v. Nebraska Mortgage Finance Fund, 204 Neb. 445, 283 N.W.2d 12 (1979). However, an administrative agency is limited in its rulemaking authority to powers granted to the agency by the statutes which they are to administer, and it may not employ its rulemaking power to modify, alter, or enlarge portions of its enabling statute. Bond v. Nebraska Liquor Control Comm., 210 Neb. 663, 316 N.W.2d 600 (1982).

In order to ascertain the powers delegated to the Commission, we must interpret its enabling legislation. Statutory interpretation is a matter of law in connection with which an appellate court has an obligation to reach an independent, correct conclusion irrespective of the determination made by the court below. Solar Motors v. First Nat. Bank of Chadron, supra; In re Estate of Soule, supra.

ENABLING LEGISLATION

As a number of statutory enactments relating to the Act have been declared to be unconstitutional, we will set forth only the relevant version of each provision granting powers to the Commission. See, Bosselman, Inc. v. State, 230 Neb. 471, 432 N.W.2d 226 (1988); Kwik Shop v. City of Lincoln, 243 Neb. 178, 498 N.W.2d 102 (1993).

Neb.Rev.Stat. § 53-101.01 (Reissue 1988) was amended by the following legislative enactments: L.B. 781 in 1989, L.B. 344 in 1991, and L.B. 183 in 1993. In Kwik Shop v. City of Lincoln, supra, we declared L.B. 781 to be unconstitutional in its entirety. L.B. 344 was an amendment to the version of the statute enacted as L.B. 781. Furthermore, the language of § 53-101.01, as amended by L.B. 183, is substantially similar to that found to be unenforceable in Kwik Shop. Additionally, L.B. 183 was adopted 2 months before Kwik Shop was decided; thus the statutory changes cannot be said to have been an effort to cure the constitutional infirmities addressed in Kwik Shop. See, Marting v. Nebraska Liquor Control Comm., 250 Neb. 134, 548 N.W.2d 326 (1996); Gas 'N Shop v. Nebraska Liquor Control Comm., 241 Neb. 898, 492 N.W.2d 7 (1992).

As we concluded in Marting, when an amendatory act uses language substantially similar to that found to be unenforceable and statutory changes were not made in response to the court's previous opinion, that statutory section will likewise be found unenforceable. When an amendatory act is invalid, the previous statute on the subject remains in full force and effect. Marting v. Nebraska Liquor Control Comm., supra; Kwik Shop v. City of Lincoln, supra. Thus, the controlling version of this statute is found at § 53-101.01 (Reissue 1988):

It is hereby declared to be the policy of the Legislature to: (1) Regulate the transportation or importation of alcoholic...