DLH, Inc. v. Nebraska Liquor Control Commission

665 N.W.2d 629, 266 Neb. 361, 2003 Neb. LEXIS 125
CourtNebraska Supreme Court
DecidedJuly 18, 2003
DocketS-02-033
StatusPublished
Cited by36 cases

This text of 665 N.W.2d 629 (DLH, Inc. v. Nebraska Liquor Control Commission) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
DLH, Inc. v. Nebraska Liquor Control Commission, 665 N.W.2d 629, 266 Neb. 361, 2003 Neb. LEXIS 125 (Neb. 2003).

Opinions

McCormack, J.

NATURE OF CASE

The Nebraska Liquor Control Commission (Commission) suspended the liquor license of DLH, Inc., after an administrative hearing. The Commission found that DLH allowed a “disturbance” in or about the licensed premises in violation of 237 Neb. Admin. Code, ch. 6, § 019.01F1 (1994). The district court affirmed the Commission’s order, and DLH appealed. We removed the case to this court’s docket on our own motion pursuant to our statutory authority to regulate the caseloads of the appellate courts of this state. See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).

BACKGROUND

DLH is a Nebraska corporation doing business as Coaches Sports Bar & Grill. In June 2000, DLH; Duane Hartman Investments, Inc.; and DTR, Inc., doing business as Cheetah’s, (Cheetah’s) entered into a contract whereby Cheetah’s would provide “adult entertainment performers” to its portion of the premises. Cheetah’s is a leased property separate but adjacent to Coaches Sports Bar & Grill and is within the licensed premises to be covered by DLH’s liquor license.

On three separate occasions, August 10, 16, and 19, 2000, an undercover Lancaster County sheriff’s deputy visited Cheetah’s. Thereafter, according to DLH, the Commission sent three notices to DLH, one for each occasion, alleging that DLH did allow or permit a “disturbance” in or about the licensed premises in violation of a Commission regulation, § 019.Q1F1. An administrative hearing was scheduled for October 19, 2000.

At the hearing, the State offered the testimonies and investigation reports of the three undercover officers who had visited Cheetah’s. The testimonies were consistent. Each officer testified that he observed female dancers dressed in bikini tops and bottoms, which generally covered their genital areas, buttocks, and breasts, engaging in physical contact with patrons. Contact involved the dancers’ touching the patrons, among whom were [364]*364the officers, with their hands and breasts, including rubbing their breasts on patrons’ faces. No attempts by employees or owners to stop or prevent the contact were witnessed by the officers. The officers also testified that the patrons often tipped the dancers with dollar bills after such contact. At no time did the officers observe topless dancing or physical contact initiated by the patrons toward the dancers. Nor did the officers observe activity which they believed to endanger the patrons, but if they had, they testified that they would have acted. The officers also testified that they did not inform the owners or management of their surveillance, nor did they inquire whether the dancers were agents or employees of DLH. After the officers testified, the State rested.

Hartman was the only witness called to testify on DLH’s behalf. Hartman confirmed that Cheetah’s is within the licensed premises of DLH and that a contract existed between DLH and Cheetah’s whereby Cheetah’s would provide adult entertainment to its portion of the premises. Hartman also testified that after receiving notice of the Commission’s allegations in the mail, he notified his attorney to make demand on Cheetah’s to comply with Nebraska law. To the best of Hartman’s knowledge, Cheetah’s complied with the terms made in the demand. In support of Hartman’s testimony, DLH offered exhibit 9, an acknowledgment signed by the owner of Cheetah’s, agreeing to abide by the laws of Nebraska. Hartman further testified that in July 2000, he applied to the Commission to delicense the space occupied by Cheetah’s. Hartman wanted to avoid any question concerning the compliance or noncompliance with liquor laws on Cheetah’s portion of the premises. The application was unanimously denied by the Commission. At the conclusion of the hearing, the Commission found DLH to be in violation of its regulation, § 019.01F1. The Commission suspended DLH’s liquor license for 30 days, 10 days for each offense.

Pursuant to Neb. Rev. Stat. §§ 84-917 to 84-919 (Reissue 1999) of the Administrative Procedure Act (APA), DLH appealed the Commission’s decision to the district court. The district court, in affirming the Commission’s order, found that (1) the type of business that occurs in Cheetah’s does fall under the Commission’s authority to regulate dancing where alcohol is [365]*365sold; (2) DLH did allow a disturbance in violation of the regulation on three separate occasions; and (3) it was DLH’s responsibility, as a liquor license holder, to ensure that the dancers were not violating any of the Commission’s regulations.

ASSIGNMENTS OF ERROR

DLH assigns, rephrased, that the district court erred in (1) finding that the Commission did not exceed its statutory authority in promulgating rules and regulations §§ 019.01F and 019.01F1; (2) affirming suspension of DLH’s liquor license for violation of a regulation which is not prohibitory but merely definitional; (3) affirming suspension of DLH’s liquor license for violation of a regulation, § 019.01F, which was never alleged to be violated in the Commission’s complaint or order; (4) relying upon Major Liquors, Inc. v. City of Omaha, 188 Neb. 628, 198 N.W.2d 483 (1972), in affirming the order of the Commission; (5) concluding that the Commission has authority to regulate “dancing” where alcohol is sold; and (6) determining that DLH is responsible for “dancers” at the licensed premises notwithstanding the absence of evidence adduced at the time of trial by the Commission to establish either employment or agency of the individuals by DLH.

STANDARD OF REVIEW

Appeals from orders or decisions of the Commission are taken in accordance with the APA. Neb. Rev. Stat. § 53-1,116 (Cum. Supp. 2002); City of Omaha v. Kum & Go, 263 Neb. 724, 642 N.W.2d 154 (2002). Proceedings for review of a final decision of an administrative agency shall be to the district court, which shall conduct the review without a jury de novo on the record of the agency. City of Omaha v. Kum & Go, supra. A judgment or final order rendered by a district court in a judicial review pursuant to the APA may be reversed, vacated, or modified by an appellate court for errors appearing on the record. Id. When reviewing an order of a district court under the APA for errors appearing on the record, the inquiry is whether the decision conforms to the law, is supported by competent evidence, and is neither arbitrary, capricious, nor unreasonable. Id.

To the extent that the meaning and interpretation of statutes and regulations are involved, questions of law are presented, in [366]*366connection with which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below. Id.

ANALYSIS

The Commission’s “disturbance” regulation at issue in this case provides:

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Cite This Page — Counsel Stack

Bluebook (online)
665 N.W.2d 629, 266 Neb. 361, 2003 Neb. LEXIS 125, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dlh-inc-v-nebraska-liquor-control-commission-neb-2003.