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AGO Opinion 97014

Constitutionality of LB 482
Opinion 97014


DATE: February 21, 1997

SUBJECT: Constitutionality of LB 482


REQUESTED BY: Senator Stan Schellpeper, Chairperson,

General Affairs Committee




WRITTEN BY: Don Stenberg, Attorney General

Laurie Smith Camp, Deputy Attorney General




You have asked whether a provision in LB 482 would withstand

constitutional scrutiny. Specifically, you request our opinion on

the constitutionality of the following language contained in

Sections 4 and 16 of the bill:




Nothing in the act shall be construed or interpreted to limit

the powers of local governing bodies to (1) suspend, cancel

and revoke retail licenses, bottle club licenses, and craft

brewery licenses . . . .

. . . .

The governing body of any city or village with respect to

licenses within its corporate limits and the 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:

. . . .

(2) To suspend, cancel or revoke, after receiving a citizen's

complaint pursuant to Section 53-134.04 or on its own motion,

any license if it determines that the licensee has violated

any provision of the Nebraska Liquor Control act, any rule or

Senator Stan Schellpeper

February 21, 1997

Page -2-






regulation adopted and promulgated pursuant to the Act, or any

ordinance, resolution, rule, or regulation relating to

alcoholic liquor. Any administrative proceeding instituted by

a local governing body to suspend, cancel, or revoke a license

shall be a contested case conducted in accordance with the

provisions of the Administrative Procedure Act. Such order of

suspension, cancellation or revocation shall be subject to

review as provided in Section 53-1,116 . . . .




As you note in your letter, the Nebraska Supreme Court has

ruled that state laws which provided local governing bodies with

authority to approve or deny retail liquor licenses were

unconstitutional because they delegated authority to the local

governing bodies without sufficient, definite, and adequate

standards to guide those affected by them. In Bosselman, Inc. v.

State, 230 Neb. 471 (1988), the Nebraska Supreme Court found that

LB 911, passed in 1986, unconstitutionally delegated the state's

legislative power regarding approval or denial of liquor licenses,

because the standards by which such powers were to be administered

by local governing bodies had not been clearly and definitely

stated in the legislature's authorizing act and instead rested on

indefinite, obscure, or vague generalities. Id. at 476. In 1989,

the Nebraska Legislature attempted to address the deficiencies of

LB 911 by enacting LB 781 to provide local governing bodies with

the authority to grant or deny liquor licenses based on more

explicit criteria. In 1992, the legislature took the additional

precautionary measure of placing a proposed constitutional

amendment on the November 1992 general election ballot to provide

a constitutional basis for the authority of local governing bodies

to approve or deny retail liquor licenses. The proposed amendment

to the Nebraska Constitution was adopted, and became Art. XV, § 19,

of the Constitution:




Notwithstanding any other provision of this Constitution, the

governing bodies of municipalities and counties are empowered

to approve, deny, suspend, cancel, or revoke retail and bottle

club liquor licenses within their jurisdictions as authorized

by the legislature.




On February 16, 1993, the provisions of LB 781 were reenacted

through LB 183 to bolster the legislature's position that the

provisions of LB 781 and LB 183 did not lack a constitutional

basis. On April 9, 1993, the Nebraska Supreme Court addressed the

issue of the constitutionality of LB 781 in the case of Kwik Shop,

Inc. v. City of Lincoln, 243 Neb. 178 (1993). The Plaintiff, Kwik

Shop, had challenged the constitutionality of LB 781 under both the

Senator Stan Schellpeper

February 21, 1997

Page -3-






Nebraska Constitution and Federal Constitution. The Nebraska

Supreme Court found that the 20 standards established by LB 781

(codified at § 53-134(2)(a) through (t)) did not provide local

governing bodies with adequate, sufficient, and definite standards

within which to exercise their discretion, and did not provide

potential applicants with a reasonable opportunity to know what was

required to obtain a license. The Court found that the provisions

of LB 781 incorporated in § 53-134 were, therefore,

unconstitutionally vague and did not meet the requirements of

procedural due process under the Fifth and Fourteenth Amendments to

the United States Constitution. The Court also found that the

provisions of LB 781 contained in § 53-134 were an unconstitutional

delegation of power from a legislative authority to an

administrative or executive authority, in violation of Art. II, §

1, of the Nebraska Constitution, because those provisions did not

provide sufficient guidance to meet the requirements of a

constitutional delegation of legislative power.




On April 29, 1993, this office issued its opinion #93034,

concluding that LB 183 would be void for the same reasons that the

Nebraska Supreme Court had found LB 781 and LB 911 to be void. In

Marting v. Nebraska Liquor Control Commission, 250 Neb. 134 (1996),

the Court found that despite the legislature's enactment of LB 183

after the adoption of Art. XV, § 19, of the Nebraska Constitution,

the 1984 liquor statutes continued to control issues of liquor

licensing.




Nebraska's liquor statutes have recognized the authority of

local governing bodies to revoke retail liquor licenses "for cause"

since the initial adoption of the Liquor Control Act in 1935. The

power of local governing bodies to cancel retail licenses was added

in 1983. See Neb. Rev. Stat. § 53-134 (1984). This same statute

recognized the power of local governing bodies to cancel or revoke

liquor licenses if a licensee was found to have violated "any valid

and subsisting ordinance or regulation duly enacted relating to

alcoholic liquors." The constitutionality of those delegations of

power to the local governing bodies would be subject to the same

standard of review as were the licensing powers delegated through

LB 911, LB 781, and LB 183. A delegation of power to local

governing bodies should withstand constitutional scrutiny as long

as the delegation is not vague; includes adequate standards to

guide the discretion of the local governing bodies; and provides

adequate notice to the licensees regarding what actions may cause

a suspension, cancellation, or revocation of a license. The

proposed language in LB 482 now before the General Affairs

Committee would authorize local governing bodies to suspend,

Senator Stan Schellpeper

February 21, 1997

Page -4-






cancel, or revoke a license if it is determined in accordance with

the provisions of the Administrative Procedure Act that the

licensee "has violated any provision of the Nebraska Liquor Control

Act, any rule or regulation adopted and promulgated pursuant to the

act, or any ordinance, or resolution, rule, or regulation relating

to alcoholic liquor."




Liquor licensees have notice of the Nebraska Liquor Control

Act, and of the rules and regulations adopted and promulgated by

the Nebraska Liquor Control Commission pursuant to the Act. A

delegation of authority by the Nebraska Legislature to local

governing bodies authorizing them to take action against liquor

licensees who violate such statutes or such rules or regulations of

the Liquor Commission should not be held unconstitutional on the

basis of inadequate notice, vagueness, or inadequate standards to

guide discretion. It is more questionable, however, whether the

legislature can authorize local governing bodies to suspend,

cancel, or revoke liquor licenses based upon a licensee's violation

of a local ordinance or a "resolution" or "rule or regulation" not

promulgated by the Nebraska Liquor Control Commission pursuant to

the Nebraska Liquor Control Act. There are no post-Bosselman

Supreme Court cases addressing the power of local governing bodies

to revoke or cancel liquor licenses. Even if the licensees were

given adequate notice of the ordinances, resolutions, or rules and

regulations of the local governing bodies, the proposed delegation

of authority might be susceptible to challenge as vague, or lacking

clear and definite standards for the exercise of authority by the

local governing bodies.




Sincerely,




DON STENBERG

Attorney General








Laurie Smith Camp

Deputy Attorney General






APPROVED:









Attorney General




44-157-11