DLH, Inc. v. LANCASTER COUNTY BD. OF COM'RS

• Decision Date: 19 July 2002
• Docket Number: No. S-01-557.,S-01-557.
• Parties: DLH, INC., doing business as Coaches Sports Bar & Grill, Appellee, v. The LANCASTER COUNTY BOARD OF COMMISSIONERS et al., Appellants.
• Court: Nebraska Supreme Court

648 N.W.2d 277

264 Neb. 358

DLH, INC., doing business as Coaches Sports Bar & Grill, Appellee, v. The LANCASTER COUNTY BOARD OF COMMISSIONERS et al., Appellants.

No. S-01-557.

Supreme Court of Nebraska.

July 19, 2002.

Gary E. Lacey, Lincoln, Lancaster County Attorney, and David W. Johnson, Jr., for appellants.

K.C. Engdahl, of Raynor, Rensch & Pfeiffer, Omaha, for appellee.

HENDRY, C.J., and WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.

STEPHAN, J.

The Lancaster County Board of Commissioners, its individual members, and Lancaster County (collectively the Board) appeal from an order of the district court for Lancaster County granting declaratory relief in favor of DLH, Inc. The district court held that resolution No. 3557, adopted by the Board in 1980, was not a "valid and subsisting ordinance or regulation" within the meaning of Neb.Rev.Stat. § 53-134(6) (Cum.Supp.2000), which pertains to revocation of liquor licenses by the governing bodies of political subdivisions.

FACTS

This case was submitted to the district court on stipulated facts. DLH holds a valid and current Nebraska liquor license authorizing the sale of alcoholic liquor on its premises. DLH permits dancers to perform on its licensed premises nude, topless, and wearing G-strings. The premises are located within the corporate boundaries of and are under the jurisdiction of Lancaster County. The Board is a local governing body within the meaning of the Nebraska Liquor Control Act, Neb.Rev. Stat. § § 53-101 to 53-1,121 (Cum.Supp. 2000).

On December 16, 1980, the Board adopted resolution No. 3557. The resolution refers to § 53-134 as authority for its adoption and resolves that "the following rules shall apply to all premises licensed to sell liquor under the jurisdiction of [Lancaster County]." Included in the "rules" is a prohibition against a licensee's allowing any live person to appear nude. Nudity is defined as "the showing of the human male or female genitals, pubic area or buttocks or the human female breast including the nipple or any portion of the breast below the nipple with less than a full opaque covering."

On August 3, 2000, the Board issued a cease and desist order requesting that DLH conform its business to the requirements of resolution No. 3557. On August 9, the Board issued a "Notice of Hearing for Revocation or Suspension of Liquor License" on DLH. On August 24, the Board found that DLH had violated resolution No. 3557 and voted to refer the violation to the Nebraska Liquor Control Commission (Commission). On October 3, the Board requested that the Commission conduct a formal revocation hearing. All of the actions undertaken and adopted by the Board were in reliance upon § 53-134(6). On October 19, the Commission voted to suspend DLH's liquor license and scheduled a November 3 revocation hearing.

DLH filed an amended petition for declaratory relief on October 26, 2000, naming the Board as defendants. The petition alleged that a dispute had arisen between the parties concerning the applicability, validity, and enforceability of resolution No. 3557. The petition prayed for a declaratory judgment that resolution No. 3557 was not a valid and subsisting ordinance or regulation as defined in the Nebraska Liquor Control Act and an order permanently enjoining the Board from undertaking any future revocation or enforcement action based upon resolution No. 3557.

In an amended order dated April 12, 2001, the district court found that the resolution was not a "valid and subsisting ordinance or regulation duly enacted, adopted, and promulgated relating to alcoholic liquor" within the meaning of § 53-134(6). The court reasoned that the plain language of § 53-134 gave the Board power to take certain action relating to liquor licenses by resolution but specifically did not grant the power to revoke liquor licenses on the basis of a resolution. The district court also rejected the Board's argument that resolution No. 3557 should be considered a regulation, despite the absence of any evidence regarding the manner in which it was adopted. The Board filed this timely appeal, which we removed to our docket on our own motion pursuant to our authority to regulate the caseloads of the appellate courts of this state. See Neb.Rev.Stat. § 24-1106(3) (Reissue 1995).

ASSIGNMENTS OF ERROR

The Board assigns that the district court erred (1) in finding that resolution No. 3557 cannot be the basis by which it acts to revoke a liquor license when the district court did not address the issue of whether it was a valid regulation; (2) in finding that resolution No. 3557 was not a valid regulation or binding law because the Board did not follow other procedures, including the holding of a public hearing, when DLH did not sustain the burden of showing otherwise in attacking the validity of the resolution as a regulation; and (3) in considering that the Board offered no evidence that the resolution had become a regulation or actually was a regulation when DLH had the burden of showing the regulation was not valid.

STANDARD OF REVIEW

In an appeal from a declaratory judgment, an appellate court, regarding questions of law, has an obligation to reach its conclusion independently of the conclusion reached by the trial court. Ohio Cas. Ins. Co. v. Carman Cartage Co., 262 Neb. 930, 636 N.W.2d 862 (2001); Continental Western Ins. Co. v. Conn., 262 Neb. 147, 629 N.W.2d 494 (2001).

ANALYSIS

The primary issue presented in this appeal is whether a violation of resolution No. 3557, if proved, could serve as a lawful basis for the Board to revoke a liquor license. In its brief, DLH argues that a county has no legal authority or basis to regulate sales of alcoholic beverages. The Board relies upon § 53-134 as the legal authorization for resolution No. 3557. At all times relevant to this action, that statute provided in relevant part:

The local governing body of any city or village ... and the local governing body of any county with respect to licenses not within the corporate limits of any city or village but within the county shall have the following powers, functions, and duties with respect to retail, bottle club, and craft brewery licenses:

(1) To cancel or revoke for cause retail, bottle club, or craft brewery licenses to sell or dispense alcoholic liquor issued to persons for premises within its jurisdiction, subject to the right of appeal to the commission;

(2) To enter or to authorize any law enforcement officer to enter at any time upon any premises licensed under the Nebraska Liquor Control Act to determine whether any provision of the act, any rule or regulation adopted and promulgated pursuant to the act, or any ordinance, resolution, rule, or regulation adopted by the local governing body has been or is being violated and at such time examine the premises of such licensee in connection with such determination;

(3) To receive a signed complaint from any citizen within its jurisdiction that any provision of the act, any rule or regulation adopted and promulgated pursuant to the act, or any ordinance, resolution, rule, or regulation relating to alcoholic liquor has been or is being violated and to act upon such complaints in the manner provided in the act;

(4) To receive retail license fees, bottle club license fees, and craft brewery license fees as provided in section 53-124 and pay the same, after the license has been delivered to the applicant, to the city, village, or county treasurer;

(5) To examine or cause to be examined any applicant or any retail licensee, bottle club licensee, or craft brewery licensee upon whom notice of cancellation or revocation has been served as provided in the act, to examine or cause to be examined the books and records of any applicant or licensee, and to hear testimony and to take proof for its information in the performance of its duties. For purposes of obtaining any of the information desired, the local governing body may authorize its agent or attorney to act on its behalf;

(6) To cancel or revoke on its own motion any license if, upon the same notice and hearing as provided in section 53-134.04, it determines that the licensee has violated any of the provisions of the act or any valid and subsisting ordinance or regulation duly enacted, adopted, and promulgated relating to alcoholic liquor.

(Emphasis supplied.) § 53-134.

Subsections (2) and (3) of this statute permit certain...