Prokop v. Lower Loup NRD , 302 Neb. 10 ( 2019 )

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www.nebraska.gov/apps-courts-epub/
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
Robert J. Prokop, appellant and cross-appellee,
v. Lower Loup Natural R esources
District et al., appellees
and cross-appellants.
___ N.W.2d ___
Filed January 11, 2019. No. S-18-082.
1. Administrative Law: Judgments: Appeal and Error. A judgment or
final order rendered by a district court in a judicial review pursuant to
the Administrative Procedure Act may be reversed, vacated, or modified
by an appellate court for errors appearing on the record.
2. ____: ____: ____. When reviewing an order of a district court under
the Administrative Procedure Act for errors appearing on the record, the
inquiry is whether the decision conforms to the law, is supported by com-
petent evidence, and is neither arbitrary, capricious, nor unreasonable.
3. Judgments: Appeal and Error. Whether a decision conforms to law
is by definition a question of law, in connection with which an appel-
late court reaches a conclusion independent of that reached by the
lower court.
4. ____: ____. An appellate court, in reviewing a district court judgment
for errors appearing on the record, will not substitute its factual find-
ings for those of the district court where competent evidence supports
those findings.
5. Natural Resources Districts: Political Subdivisions: Legislature. A
natural resources district, as a political subdivision, has only that power
delegated to it by the Legislature, and an appellate court strictly con-
strues a grant of power to a political subdivision.
6. Natural Resources Districts. A natural resources district possesses and
can exercise the following powers and no others: first, those granted
in express words; second, those implied in or incident to the powers
expressly granted; and third, those essential to the declared objects and
purposes of the district—not simply convenient, but indispensable.
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
7. Administrative Law. Generally, for purposes of construction, a rule or
order of an administrative agency or political subdivision is treated like
a statute.
8. ____. Absent a statutory or regulatory indication to the contrary, lan-
guage contained in a rule or regulation is to be given its plain and ordi-
nary meaning.
9. ____. A rule is open for construction only when the language used
requires interpretation or may reasonably be considered ambiguous.
10. Administrative Law: Political Subdivisions: Appeal and Error. An
appellate court accords deference to an agency or political subdivision’s
interpretation of its own rules unless plainly erroneous or inconsistent.
11. Statutes. A court must attempt to give effect to all parts of a statute,
and if it can be avoided, no word, clause, or sentence will be rejected as
superfluous or meaningless.
12. Statutes: Words and Phrases. In statutory interpretation, “shall,” as
a general rule, is considered mandatory and inconsistent with the idea
of discretion.
13. Due Process. Due process principles protect individuals from arbitrary
deprivation of life, liberty, or property without due process of law.
14. ____. Procedural due process claims require a two-step analysis: (1)
whether the plaintiff has asserted a life, liberty, or property interest that
is protected by the Due Process Clause and (2) whether the plaintiff was
deprived of that interest without sufficient process.
15. Administrative Law: Due Process. A party appearing in an adjudica-
tion hearing before an agency or tribunal is entitled to due process pro-
tections similar to those given to litigants in a judicial proceeding.
16. Due Process: Notice. Due process does not guarantee an individual
any particular form of state procedure. Instead, the requirements of due
proc­ess are satisfied if a person has reasonable notice and an oppor-
tunity to be heard appropriate to the nature of the proceeding and the
character of the rights which might be affected by it.
17. Administrative Law: Due Process: Notice: Evidence. In proceedings
before an administrative agency or tribunal, procedural due process
requires notice, identification of the accuser, factual basis for the accusa-
tion, reasonable time and opportunity to present evidence concerning the
accusation, and a hearing before an impartial board.
18. Due Process: Notice. Due process requires notice reasonably calculated
to inform the party to the action of the subject and issues involved in
the proceeding.
19. Administrative Law. While similar to a judicial proceeding, an adju-
dication hearing before an agency does not guarantee an individual any
particular form of state procedure.
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
20. ____. Administrative bodies have the authority to provide discovery
which must be exercised judicially and not arbitrarily.
21. Due Process: Property: Notice. Due process involving deprivation of
a significant property interest requires notice and an opportunity to be
heard that is appropriate to the nature of the case.
22. Due Process: Notice: Time. Due process depends on, in part, whether
the notice was sufficient to provide the party a reasonable opportunity to
confront and cross-examine adverse witnesses and present evidence.
23. Administrative Law: Due Process: Natural Resources Districts:
Notice. Due process does not require that a natural resources district
provide notice of its specific evidence to a party prior to a hearing.
24. Property. A takings analysis begins with an examination of the nature
of the owner’s property interest.
25. Waters. Ground water, as defined by Neb. Rev. Stat. § 46-706 (Reissue
2010), is owned by the public, and the only right held by an overlying
landowner is in the use of the ground water.
26. Constitutional Law: Waters: Appurtenances: Property. The right of
an owner of overlying land to use ground water is an appurtenance con-
stituting property protected by Neb. Const. art. I, § 21.
27. Waters: Public Policy. Through its police power, the State has the
power to determine public policy with regard to ground water and can
alter the common law governing the use of ground water.
28. Property: Constitutional Law. The appropriate exercise of police
power occurs where an owner is denied the unrestricted use or enjoy-
ment of his property, or his property is taken from him, because his use
or enjoyment of such property is injurious to the public welfare.
29. Waters. Appropriate use of police power includes that the State place
limitations on the withdrawals of ground water in times of shortage.
30. Administrative Law: Appeal and Error. In a de novo review on the
record of an administrative order, the district court is required to make
independent factual determinations based upon the record, and the court
reaches its own independent conclusions with respect to the matters
at issue.
Appeal from the District Court for Valley County: K arin L.
Noakes, Judge. Affirmed.
Brian C. Buescher and Dwyer Arce, of Kutak Rock, L.L.P.,
for appellant.
Blake E. Johnson and Katherine J. Spohn, of Bruning Law
Group, for appellees.
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
Donald G. Blankenau and Kennon G. Meyer, of Blankenau,
Wilmoth & Jarecke, L.L.P., for amicus curiae Nebraska
Groundwater Coalition.
Heavican, C.J., Cassel, Stacy, Funke, and Papik, JJ.
Funke, J.
Robert J. Prokop appeals from the district court’s order
affirming the findings and modifying a cease and desist order
of the Lower Loup Natural Resources District (LLNRD) Board
directing Prokop to suspend use of ground water wells for
noncompliance with LLNRD’s annual reporting requirements.
Prokop challenges LLNRD’s authority under the Nebraska
Ground Water Management and Protection Act (GWMPA)1 and
LLNRD rules which require operators to provide actual crop
yield data in their annual reports and to impose sanctions for
noncompliance with LLNRD reporting requirements. Prokop
further argues that LLNRD failed to provide him sufficient
due process in its proceedings on whether he complied with
LLNRD reporting requirements and that LLNRD’s suspen-
sion of his ground water rights constituted a taking without
just compensation. Prokop additionally challenges the district
court’s refusal to receive certain exhibits during his appeal to
the district court and its failure to award him attorney fees.
LLNRD and the board cross-appeal and argue the district
court improperly reduced the duration of Prokop’s suspen-
sion of ground water access. For the reasons set forth herein,
we affirm.
I. BACKGROUND
LLNRD is a natural resources district (NRD) authorized by
GWMPA to regulate certain activities which may contribute to
ground water contamination due to nitrate nitrogen and other
contaminants.2 GWMPA enables NRD’s to establish ground
1
See Neb. Rev. Stat. §§ 46-701 to 46-756 (Reissue 2010 & Cum. Supp.
2016).
2
§ 46-704.
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PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
water management areas for the protection of ground water
quality.3 GWMPA requires NRD’s to maintain a ground water
management plan that, among other obligations and to the
extent possible, identifies the levels and sources of ground
water contamination within the district; ground water quality
goals; long-term solutions necessary to prevent the levels of
ground water contaminates from becoming too high and to
reduce high levels sufficiently to eliminate health hazards; and
practices recommended to stabilize, reduce, and prevent the
occurrence, increase, or spread of ground water contamina-
tion.4 GWMPA authorizes NRD’s to adopt rules and regulations
necessary to discharge the administrative duties assigned under
GWMPA and to require such reports from ground water users
as may be necessary.5 GWMPA provides that a ground water
user who violates any controls, rules, or regulations “shall be
subject to the imposition of penalties imposed through the con-
trols adopted by the district, including, but not limited to, hav-
ing any allocation of water granted or irrigated acres certified
by the district reduced in whole or in part.”6 Cease and desist
orders may also be issued by NRD’s against ground water
users following 3 days’ notice to the person affected stating the
contemplated action and, in general, the grounds for the action
and following a reasonable opportunity to be heard.7
Pursuant to GWMPA directives, LLNRD established a
ground water management area comprising a large portion
of its geographical area, adopted water quality and pollution
control as one of its goals, and enacted rules and regulations to
implement its obligations under GWMPA. Rule 7 of LLNRD’s
“Groundwater Management Area Rules & Regulations”
directs that LLNRD is divided into 28 ground water quality
3
§ 46-712(1)(b).
4
§ 46-709.
5
§ 46-707(1).
6
§ 46-746(1).
7
§ 46-707(1)(h). See, also, § 46-746(1).
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PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
management subareas and provides that each subarea may be
subject to water quality controls in three separate phases based
upon median nitrate nitrogen levels. Under “Phase III,” rule
7 directs that an operator—a person with direct control over
day-to-day farming operations of the land—must, among other
obligations, “[s]ubmit, on forms provided by [LLNRD], a
report of yearly water tests, flow meter reading, water applied,
soil tests, crops planted, yield goals, nitrogen applied, and other
field operations required prior to January 31st . . . .” The forms
which LLNRD provides to operators require specific informa-
tion of farming operations, including number of acres, the crop
planted, expected yield, nitrogen readings and application,
water applied, irrigation date, and actual crop yield. Operators
are also required to sign and date the forms. To enforce compli-
ance with this obligation and other controls, rules, and regula-
tions adopted by LLNRD, rule 2 provides:
[LLNRD] shall have the authority to enforce these rules
and regulations for the . . . protection of groundwater
quality . . . by issuing cease and desist orders in accord­
ance with the procedure hereinafter specified and by
bringing appropriate actions in the District Court for the
county in which any violations occur for enforcement of
such orders.
Since 1962, Prokop has operated a farm on property he
owns within LLNRD’s regulated area in which he irrigates a
significant portion of his crops. Prokop’s property is within a
phase III subarea of the district, and he is required to submit
yearly reports to LLNRD on its forms provided.
In 2013, prior to the actions underlying the present case,
Prokop was subject to an enforcement action by LLNRD in
the district court for Nance County under case No. CI 13-01.
LLNRD initiated that case against Prokop for illegal wells and
failure to submit completed forms for 2010 and 2011 by not
providing the actual crop yield data for those years. The district
court found Prokop in violation of LLNRD’s reporting require-
ments and ordered him to provide the required reports.
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
1. A dministrative Action
The instant case involves Prokop’s annual reports from
2015 and 2016 and arose from LLNRD concerns about miss-
ing information from those reports, including actual crop
yield data, irrigation data, nitrogen application, and dates and
signatures. Due to these concerns, LLNRD’s board voted in
April 2017 to file a complaint against Prokop and issued a
“Notice of Intent to Issue Cease and Desist Order and Impose
Penalties for Failing to Submit Annual Reporting” which was
served on Prokop on May 2. In the notice, LLNRD alleged that
Prokop “failed to submit timely and complete annual reports
. . . for the [2015 and] 2016 crop year[s],” that “LLNRD sent
multiple notice to [Prokop] requesting he submit the annual
reports,” and that “LLNRD has reason to believe [Prokop]
has intentionally and repeatedly violated the annual reporting
requirements.” LLNRD stated its belief that Prokop “should
be subject to penalties pursuant to the GWMPA and a cease
and desist order should be issued.” The notice additionally
provided that Prokop “has until June 1, 2017 to submit the
complete annual reports” and informed Prokop of “LLNRD’s
intention to enforce the penalty provisions of the GWMPA in
the event [Prokop] fails to submit timely and complete annual
reporting in accordance with this Notice.” In particular, the
notice stated LLNRD’s intention to “de-certify [Prokop’s] irri-
gated acres” and “seek maximum civil penalties.” The notice
also informed Prokop that “a hearing is scheduled regarding
this Notice at 5:00 p.m. on May 25, 2017,” “[t]he hearing
shall be conducted on the record,” Prokop “will be given
the opportunity to present any evidence or testimony he may
have with respect to the violations identified in this Notice,”
Prokop may appear through counsel, and the board will deter-
mine whether a cease and desist order should be issued based
on the record developed at the hearing.
A hearing before the board on LLNRD’s notice was held
on May 25, 2017. At the hearing, LLNRD offered and the
board received a copy of LLNRD’s ground water rules and
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
regulations, a blank “Groundwater Management Area Annual
Report Form,” the notice, the return of service of the notice,
proofs of publication of the notice, the complaint and order in
case No. CI 13-01, Prokop’s “Groundwater Management Area
Annual Report Form” for the 2015 crop year, and Prokop’s
“Groundwater Management Area Annual Report Form” for the
2016 crop year.
LLNRD presented testimony from the assistant general man-
ager of LLNRD. He testified to the rules and regulations
adopted by LLNRD. He explained Prokop’s property is within
a subarea of the district that is designated “Phase III” and the
rules that apply to the property, including Prokop’s annual
reporting obligations as the operator.
LLNRD also presented testimony from an agronomy tech-
nician for LLNRD. He testified that the subarea in which
Prokop’s land is located has an issue with ground water
nitrates which are unsafe for consumption at certain levels.
He explained that the purpose of LLNRD’s annual reports is
to record nitrogen characteristics and develop a plan to reduce
nitrate contamination. He testified that actual crop yield data
is part of the factors that record nitrogen characteristics as it
helps determine how many pounds of nitrogen are removed
from the field.
The agronomy technician testified that he reviewed Prokop’s
2015 and 2016 reports and that the 2015 report was incom-
plete, because it failed to indicate an actual crop yield and
was missing a signature, and that the 2016 report was late and
incomplete, because it failed to indicate actual crop yields,
failed to provide the irrigation data, failed to provide the nitro-
gen applications, and was not signed or dated. He explained
that Prokop’s reporting insufficiencies are ongoing and that
LLNRD has had issues with the quality of Prokop’s reporting
since 2009.
Prokop presented no evidence or witnesses, but he made
factual arguments during the hearing and cross-examined both
LLNRD witnesses. Prokop stipulated to the receipt of the
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Nebraska Supreme Court A dvance Sheets
302 Nebraska R eports
PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
notice and acknowledged publication in the newspapers of
general circulation within the district. However, Prokop repeat-
edly objected to the hearing, arguing that he was not provided
LLNRD’s evidence with sufficient time prior to the hearing to
enable a fair opportunity to develop his defense. He addition-
ally challenged the applicability of the reports’ actual crop
yield requirements, stating he “has long taken the position
that the LLNRD’s demand that farmers provide actual yield
information is unnecessary from a scientific standpoint and the
request for such information is a governmental overreach not
allowed or required by law.”8
After the presentation of evidence and argument by the par-
ties, LLNRD’s board took the matter under advisement and
delayed any action until June 22, 2017, the next regularly
scheduled meeting. The delay allowed Prokop additional time
to meet the June 1 deadline set out in the notice to Prokop.
However, Prokop failed to complete the reports and the board
voted at the June 22 meeting to find Prokop had violated
LLNRD reporting rules by failing to submit timely and com-
plete reports for the 2015 and 2016 crop years.
Pursuant to its vote on June 29, 2017, LLNRD’s board exe-
cuted a cease and desist order to impose penalties, which order
was served on Prokop July 6. Through this order, the board
found the following: Prokop’s land was located in a phase III
subarea; Prokop’s 2015 annual report failed to include data
on actual crop yields, nitrogen application, and a signature;
and Prokop’s 2016 annual report was filed after the January
31 deadline and failed to include data on actual crop yields,
nitrogen application, water applied, and Prokop’s signature.
The order also noted Prokop’s history of noncompliance with
LLNRD’s reporting requirements. In consideration of its find-
ings and Prokop’s noncompliant history, the board ordered:
1) [Prokop] and all heirs, successors, assigns, or agents
cease and desist the use of all groundwater irrigation
8
Brief for appellant at 17.
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PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
wells on the Property for a period of four (4) years
commencing January 1, 2018 and continuing through
December 31, 2021;
2) [Prokop] to submit complete annual report forms
for the Property for the 2015 crop year and the 2016 crop
year by January 31, 2018; and
3) [Prokop] to submit timely and complete annual
report forms for the Property for all subsequent crop
years.
2. A ppeal to District Court
Prokop filed a pro se petition for review in the district court
in June 2017, prior to the board’s executing the cease and
desist order. After obtaining counsel, Prokop filed an amended
petition in July, claiming: the cease and desist order was not
supported by the evidence; LLNRD’s hearing and actions were
not conducted in accordance with Nebraska law, LLNRD’s
rules and regulations, and the requirements of due process;
the board’s order was in violation of Nebraska law, LLNRD’s
rules and regulations, and the requirements of due process; the
cease and desist order constituted a taking without just com-
pensation and the due process required for such action; and
the cease and desist order was issued for reasons not allowed
by law.
At a hearing on Prokop’s amended petition, Prokop offered
exhibits 4 and 5 to support his claims that LLNRD’s actions,
the hearing, and the cease and desist order were in violation
of his due process rights. LLNRD objected to these exhibits
because they were not part of the administrative record, while
Prokop argued these exhibits fell within an exception for evi-
dence showing a procedural due process violation.
Exhibit 4 was an affidavit from Mitch Husmann, a location
manager for a co-op, who sold Prokop and his tenants fertil-
izer and assisted Prokop in filling out the annual reports for
LLNRD. Husmann explained that he would work with Prokop
to fill out the reports, Prokop would sign them, and they would
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PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
be delivered to LLNRD. While this is what occurred in 2015,
Husmann provided that the typical procedure was interrupted
in 2016 because Prokop’s new tenant purchased fertilizer
through another sales representative. Therefore, Husmann did
not have all the information necessary to fill out Prokop’s
forms, so he filled out what he could and delivered the incom-
plete 2016 report to LLNRD in mid-January under the under-
standing that Prokop would come in to complete it.
Exhibit 5 was an affidavit from Prokop detailing his rela-
tionship with Husmann and explaining that he was unaware
until the hearing that the typical procedure was not followed
for the 2016 report due to his tenant’s using a different sales
representative. The affidavit also asserted that Prokop believed
the notice concerned only his refusal to provide actual crop
yield data and that the notice failed to mention the 2016 reports
were not signed and submitted in the same manner Husmann
had submitted previous reports.
The district court entered an order on the petition in
January 2018. The court stated that exhibits 4 and 5 were
not received because they are outside the scope of the offi-
cial record. The order then affirmed the cease and desist
order’s findings. First, the court determined LLNRD rules
and GWMPA enable LLNRD to require actual crop yield
data on its annual reports as “‘other field operations’” and
suspend ground water rights for noncompliance. Second, the
court determined LLNRD complied with its due process obli-
gations. Specifically, the court found the notice adequately
informed Prokop of the purpose of the hearing and the alle-
gations against him. Because the court found Prokop was
informed of the purpose of the hearing and the court’s under-
standing that due process does not require notice of evidence
to be presented at an administrative hearing, the court found
Prokop was not denied due process as a result of insufficient
notice from LLNRD of the evidence it would present. The
court also found the order’s factual findings were supported
by the evidence. Finally, the court determined the purpose of
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PROKOP v. LOWER LOUP NRD
Cite as 302 Neb. 10
the annual reports serves a substantial and legitimate govern-
ment interest in preventing ground water contamination and,
therefore, the cease and desist order is an appropriate exercise
of police power that does not deprive Prokop of property
rights without just compensation.
However, the district court’s order modified the cease and
desist order’s penalty. The district court found the suspen-
sion of 4 years to be an unreasonable use of LLNRD’s police
power under the facts of the case and determined the public
health and welfare could be preserved by imposing a less
severe restriction. Therefore, the court modified the penalty
from the 4-year suspension of Prokop’s ground water rights
to a 1-year suspension with the possibility of 3 additional
years if Prokop continues to violate LLNRD’s reporting
requirements.
II. ASSIGNMENTS OF ERROR
Prokop assigns, restated, that the district court erred in
affirming the board’s order and determining (1) LLNRD had
the authority under LLNRD rules and GWMPA to require
Prokop to provide information in his annual reports, includ-
ing actual crop yield data; (2) LLNRD had the authority under
LLNRD rules and GWMPA to impose a suspension of ground
water access as a penalty for noncompliance with LLNRD
rules; (3) LLNRD did not violate Prokop’s right to procedural
due process and deny him a reasonable opportunity to be
heard; (4) LLNRD did not erroneously limit the possibility of
competent judicial review by violating Prokop’s due process
rights; and (5) LLNRD’s suspension of Prokop’s ground water
access did not constitute a taking without just compensa-
tion. Prokop also assigns the district court erred in sustaining
LLNRD’s objection to Prokop’s exhibits 4 and 5 and failing to
award Prokop attorney fees.
LLNRD and the board assign on cross-appeal that the dis-
trict court erred in modifying the duration of the penalty
imposed by LLNRD.
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PROKOP v. LOWER LOUP NRD
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III. STANDARD OF REVIEW
[1,2] A judgment or final order rendered by a district court
in a judicial review pursuant to the Administrative Procedure
Act (APA) may be reversed, vacated, or modified by an appel-
late court for errors appearing on the record.9 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.10
[3,4] Whether a decision conforms to law is by definition a
question of law, in connection with which an appellate court
reaches a conclusion independent of that reached by the lower
court.11 An appellate court, in reviewing a district court judg-
ment for errors appearing on the record, will not substitute its
factual findings for those of the district court where competent
evidence supports those findings.12
IV. ANALYSIS
1. LLNRD Authority to R equire
Actual Crop Yield Data
Prokop first assigns the district court erred in determining
LLNRD had authority to require Prokop to provide actual crop
yield data.
[5,6] LLNRD, as a political subdivision, has only that power
delegated to it by the Legislature, and we strictly construe
a grant of power to a political subdivision.13 An NRD pos-
sesses and can exercise the following powers and no others:
first, those granted in express words; second, those implied in
9
Medicine Creek v. Middle Republican NRD, 296 Neb. 1, 892 N.W.2d 74
(2017).
10
Id.
11
Stejskal v. Department of Admin. Servs., 266 Neb. 346, 665 N.W.2d 576
(2003).
12
Id.
13
Medicine Creek, supra note 9.
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or incident to the powers expressly granted; and third, those
essential to the declared objects and purposes of the district—
not simply convenient, but indispensable.14
As stated above, GWMPA directs NRD’s to regulate certain
activities which may contribute to ground water contamina-
tion due to nitrate nitrogen and other contaminants.15 GWMPA
authorizes NRD’s to adopt rules and regulations necessary to
discharge the administrative duties assigned under GWMPA,
require such reports from ground water users as may be neces-
sary, and issue cease and desist orders to enforce any provi-
sions of GWMPA.16
LLNRD rule 7 directs that each subarea of the district may
be subject to water quality controls in three separate phases
based upon median nitrate nitrogen levels. Under phase III, the
phase Prokop’s land was designated, rule 7 directs that an oper-
ator must “[s]ubmit, on forms provided by [LLNRD], a report
of yearly water tests, flow meter reading, water applied, soil
tests, crops planted, yield goals, nitrogen applied, and other
field operations required prior to January 31st . . . .” Among
other information, the forms which LLNRD provides to opera-
tors require actual crop yield data.
Prokop claims rule 7 fails to authorize LLNRD to collect
actual crop yield data, because the rule does not include it in
the list of operators’ reporting obligations. Prokop also argues
that actual crop yield data was not implicitly included under
the phrase “other field operations,” because actual yield data
is not an operation.
[7-10] Generally, for purposes of construction, a rule or order
of an administrative agency or political subdivision is treated
like a statute.17 Absent a statutory or regulatory indication to
14
Id.
15
§ 46-704.
16
§ 46-707(1).
17
See Nebraska Protective Servs. Unit v. State, 299 Neb. 797, 910 N.W.2d
767 (2018).
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the contrary, language contained in a rule or regulation is to
be given its plain and ordinary meaning.18 A rule is open for
construction only when the language used requires interpreta-
tion or may reasonably be considered ambiguous.19 We accord
deference to an agency or political subdivision’s interpretation
of its own rules unless plainly erroneous or inconsistent.20
Here, LLNRD’s interpretation of “other field operations”
to include actual crop yield data is not inconsistent or plainly
erroneous. The use of “other field operations” requires inter-
pretation, and LLNRD has interpreted it to include data on
actual crop yield. In the blank “Groundwater Management
Area Annual Report Form,” as well as Prokop’s reports from
crop years 2015 and 2016, LLNRD asks for actual crop
yield data along with other information from operators’ farm-
ing operations. LLNRD’s agronomy technician testified that
requiring actual crop yield is important to LLNRD’s adopted
goals of water quality and pollution control and LLNRD’s
obligations under GWMPA to implement these goals. He testi-
fied that the actual crop yield data is used in connection with
the other farming operations data to record nitrogen charac-
teristics and develop a plan to reduce nitrate contamination,
because actual crop yield data helps determine how many
pounds of nitrogen are removed from the field. LLNRD, in
requiring the data on the reports, clearly interpreted “other
field operations” to encompass actual crop yield data, which is
supported by LLNRD’s utilization of the data in implementing
its statutory duties.
Prokop contends that interpreting “other field operations” to
include actual crop yield data is inconsistent with a plain read-
ing of rule 7, because actual crop yield data is not an opera-
tion. However, such a reading is incorrect. Rule 7 lists specific
field operations, including items such as “soil tests” and “yield
18
Id.
19
Id.
20
See id.
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goals.” If actual crop yield data, which is the end product
of field operations, is not field operations data, than neither
would soil tests as the state of the soil during field operations
or yield goals which are what operators believe they will pro-
duce through field operations even though soil tests and yield
goals are explicitly included in the list of required field opera-
tions data.
Prokop additionally contends that interpreting “other field
operations” to include actual crop yield data is inconsistent
and plainly erroneous, because the purpose of rule 7 is to
implement LLNRD’s goals of water quality and pollution
control through the reduction of nitrogen contamination, and
actual crop yield data is unnecessary to do so. However, we
cannot say that requiring actual crop yield data is clearly
erroneous to reducing nitrogen contamination. Moreover, the
record contains testimony on how actual yield data is relevant
to a determination of nitrogen levels removed from the soil
and how it is helpful to LLNRD and operators in determining
other relevant data required in the annual reporting. Thus, on
the record before us, we cannot say the interpretation of “other
field operations” to include actual crop yield data was incon-
sistent and plainly erroneous due its relationship to LLNRD’s
stated goals.
In consideration of all of the above, the district court did not
err in determining LLNRD had the authority to require actual
crop yield data.
2. LLNRD Authority to Impose Suspension
of Ground Water Access
Prokop next assigns the district court erred in determining
LLNRD had authority to impose a suspension of ground water
access for a violation of LLNRD reporting requirements.
Under § 46-707(1), NRD’s may adopt rules and regulations
necessary to discharge the administrative duties assigned under
GWMPA; require such reports from ground water users as may
be necessary; and issue cease and desist orders to enforce any
provisions of GWMPA.
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Under § 46-746(1), any person who violates any controls,
rules, or regulations “shall be subject to the imposition of
penalties imposed through the controls adopted by the district,
including, but not limited to, having any allocation of water
granted or irrigated acres certified by the district reduced in
whole or in part.”
Additionally, LLNRD enacted rule 2, which addresses
enforcement of noncompliance with LLNRD rules and regula-
tions and GWMPA. Rule 2 provides:
[LLNRD] shall have the authority to enforce these rules
and regulations for the . . . protection of groundwater
quality . . . by issuing cease and desist orders in accord­
ance with the procedure hereinafter specified and by
bringing appropriate actions in the District Court for the
county in which any violations occur for enforcement of
such orders.
Prokop contends the language of § 46-746(1) that
[a]ny person who violates . . . any controls, rules, or
regulations adopted by [an NRD] relating to a manage-
ment area shall be subject to the imposition of penalties
imposed through the controls adopted by the district,
including, but not limited to, having any allocation of
water granted or irrigated acres certified by the district
reduced in whole or in part
requires LLNRD to adopt rules and regulations that specifi-
cally list the penalties available. Further, Prokop argues, such
an interpretation required LLNRD to adopt rules and regula-
tions which explained that a violation of LLNRD reporting
requirements could result in the allocation of ground water
reduced in whole or in part.
[11] Contrary to Prokop’s argument, a “penalty” and a
“control” under GWMPA are separate and distinct terms.
A court must attempt to give effect to all parts of a statute,
and if it can be avoided, no word, clause, or sentence will
be rejected as superfluous or meaningless.21 The inclusion
21
Wisner v. Vandelay Investments, 300 Neb. 825, 916 N.W.2d 698 (2018).
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of both terms leads to the determination that the words are
not synonymous.
Section 46-746(1) enables an NRD to enforce a ground
water user’s obligations under GWMPA and the rules and regu-
lations of an NRD by imposing penalties, including, but not
limited to, having any allocation of water granted or irrigated
acres certified by the district reduced in whole or in part by
utilizing the procedure adopted in the rules and regulations of
an NRD. Section 46-746(1) does not require an NRD to restate
in its rules and regulations that a violation could result in a
reduction of ground water access. Instead, § 46-746(1) articu-
lates one specific penalty which an NRD can impose upon the
violator—the reduction of allocated water. As to the controls
adopted by an NRD, in this case, LLNRD adopted rule 2,
which enables LLNRD to issue cease and desist orders follow-
ing the procedure outlined in the subsequent rules.
[12] Such a determination aligns with our opinions in Loup
City Pub. Sch. v. Nebraska Dept. of Rev.22 and Goodyear
Tire & Rubber Co. v. State.23 In Loup City Pub. Sch., we
addressed the question of whether the Department of Revenue
was required to promulgate rules and regulations under Neb.
Rev. Stat. § 79-3809 (Reissue 1994).24 We concluded that
the department was required to do so.25 That statute, which
has since been amended and recodified, provided in relevant
part: “Establishment of the adjusted valuation shall be based
on assessment practices established by rule and regulation
adopted and promulgated by the Department of Revenue.”26
We noted that in statutory interpretation, “shall,” as a general
22
Loup City Pub. Sch. v. Nebraska Dept. of Rev., 252 Neb. 387, 562 N.W.2d
551 (1997).
23
Goodyear Tire & Rubber Co. v. State, 275 Neb. 594, 748 N.W.2d 42
(2008).
24
Loup City Pub. Sch., supra note 22.
25
Id.
26
§ 79-3809(1) (now codified at Neb. Rev. Stat. § 79-1016 (Supp. 2017)).
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rule, is considered mandatory and inconsistent with the idea
of discretion.27 Thus, under the plain language of that statute,
the department was required to adopt and promulgate rules
and regulations to regulate the valuation process.28 Because the
department had not adopted and promulgated rules and regula-
tions governing the valuation process, we concluded that the
adjusted valuations of the department were not in conformity
with the law.29
In contrast, in Goodyear Tire & Rubber Co., we addressed
whether the State Tax Commissioner was required to promul-
gate rules and regulations under Neb. Rev. Stat. § 77-4111
(Reissue 2003) to define “qualified property,” a term utilized in
the Employment and Investment Growth Act.30 Section 77-4111
provides that the commissioner “shall adopt and promulgate all
rules and regulations necessary to carry out the purposes of
the Employment and Investment Growth Act.” In conclud-
ing the commissioner was not required to establish rules and
regulations regarding its interpretation of “qualified property,”
we noted the language in § 77-4111 required the adoption and
promulgation of “only those rules that are necessary for carry-
ing out the purposes” of the act.31
While § 46-707(1)(a) authorizes the adoption and promulga-
tion of rules necessary to discharge the administrative duties
assigned in GWMPA, § 46-746(1) establishes that the penal-
ties for violations under GWMPA and rules and regulations of
an NRD include reducing the violator’s ground water access
in whole or in part. As such, we conclude that it is unneces-
sary for LLNRD to promulgate rules and regulations restat-
ing the potential for LLNRD to restrict a violator’s ground
water access.
27
Loup City Pub. Sch., supra note 22.
28
Id.
29
Id.
30
Goodyear Tire & Rubber Co., supra note 23.
31
Id. at 601, 748 N.W.2d at 49.
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In consideration of the above, the district court did not err
in determining LLNRD had the authority to suspend Prokop’s
ground water access under § 46-746(1).
3. Procedural Due Process
Prokop assigns LLNRD violated his due process rights by
not providing him adequate notice of the charges against him
and of the evidence to be presented.
[13,14] Due process principles protect individuals from arbi-
trary deprivation of life, liberty, or property without due proc­
ess of law.32 Procedural due process claims require a two-step
analysis: (1) whether the plaintiff has asserted a life, liberty, or
property interest that is protected by the Due Process Clause
and (2) whether the plaintiff was deprived of that interest
without sufficient process.33 Here, Prokop’s interest in the use
of ground water is a property interest that is under due proc­
ess protections.34 Therefore, the issue is whether Prokop was
deprived of that interest without sufficient process.
[15-17] A party appearing in an adjudication hearing before
an agency or tribunal is entitled to due process protections
similar to those given to litigants in a judicial proceeding.35
Due process does not guarantee an individual any particular
form of state procedure. Instead, the requirements of due
process are satisfied if a person has reasonable notice and an
opportunity to be heard appropriate to the nature of the pro-
ceeding and the character of the rights which might be affected
by it.36 In proceedings before an administrative agency or tri-
bunal, procedural due process requires notice, identification of
the accuser, factual basis for the accusation, reasonable time
32
Cain v. Custer Cty. Bd. of Equal., 298 Neb. 834, 906 N.W.2d 285 (2018).
See, also, U.S. Const. amends. V and XIV; Neb. Const. art. I, § 3.
33
White v. Busboom, 297 Neb. 717, 901 N.W.2d 294 (2017).
34
See Sorensen v. Lower Niobrara Nat. Resources Dist., 221 Neb. 180, 376
N.W.2d 539 (1985) (superseded by statute on other grounds).
35
Cain, supra note 32.
36
Id.
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and opportunity to present evidence concerning the accusation,
and a hearing before an impartial board.37
(a) Notice of Factual Basis for
LLNRD’s Accusations
In its notice, LLNRD alleged that Prokop “failed to submit
timely and complete annual reports . . . for the [2015 and] 2016
crop year[s],” that “LLNRD sent multiple notice to [Prokop]
requesting he submit the annual reports,” and that “LLNRD
has reason to believe [Prokop] has intentionally and repeatedly
violated the annual reporting requirements.” The notice stated
LLNRD’s belief that Prokop “should be subject to penalties
pursuant to the GWMPA and a cease and desist order should
be issued” for the violation. The notice additionally provided
that Prokop “has until June 1, 2017 to submit the complete
annual reports” and informed Prokop of “LLNRD’s intention
to enforce the penalty provisions of the GWMPA in the event
[Prokop] fails to submit timely and complete annual reporting
in accordance with this Notice.” In particular, the notice stated
LLNRD’s intention to “de-certify [Prokop’s] irrigated acres”
and “seek maximum civil penalties.” The notice also informed
Prokop that “a hearing is scheduled regarding this Notice at
5:00 p.m. on May 25, 2017,” “[t]he hearing shall be conducted
on the record,” Prokop “will be given the opportunity to pre­
sent any evidence or testimony he may have with respect to
the violations identified in this Notice,” Prokop may appear
through counsel, and the board will determine whether a cease
and desist order should be issued based on the record devel-
oped at the hearing.
Prokop acknowledges the notice accused Prokop of
“‘fail[ing] to submit timely and complete annual reports,’”
but claims that the notice provided no factual basis as to
what it alleged was deficient in the reports.38 Instead, Prokop
37
Stenger v. Department of Motor Vehicles, 274 Neb. 819, 743 N.W.2d 758
(2008).
38
Brief for appellant at 26.
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claims he was unaware of LLNRD’s allegations of missing
signatures, dates, irrigation data, and nitrogen application until
the hearing. Prokop argues that without such explanation of
deficiencies, he was deprived of the opportunity to gather evi-
dence and present witnesses on the precise allegations and was
prevented from taking action to correct any deficiency before
the hearing.
[18] However, contrary to Prokop’s claim, the notice was
sufficient to inform Prokop of LLNRD’s claims and support-
ing factual allegations. Due process requires notice reasonably
calculated to inform the party to the action of the subject and
issues involved in the proceeding.39 LLNRD’s notice alleged
Prokop “failed to submit timely and complete annual reports”
for 2015 and 2016 and that Prokop “intentionally and repeat-
edly violated the annual reporting requirements.” These allega-
tions informed Prokop that the reports for 2015 and 2016 were
deficient and incomplete. The deficiencies of missing annual
yield data, nitrogen application, water applied, and Prokop’s
signatures were apparent on the face of the reports listed in
the notice.
Prokop relies upon our decision in Blanchard v. City of
Ralston 40 to support his contention that the notice of LLNRD’s
claims and supporting factual allegations were insufficient. In
Blanchard, a city determined that a vacant house was a public
nuisance and that its nonremedy was an immediate emergency.
The city posted a notice on the house alleging only that the
building was an unsafe nuisance because of an “odor and
health-related hazards” and that the owner had 3 days to repair
or demolish it before the city would subsequently demolish the
house itself.41 The owner received no other notice and was only
made aware of the posted notice after the 3-day period lapsed
39
Robinson v. Morrill Cty. Sch. Dist. #63, 299 Neb. 740, 910 N.W.2d 752
(2018).
40
Blanchard v. City of Ralston, 251 Neb. 706, 559 N.W.2d 735 (1997).
41
Id. at 709, 559 N.W.2d at 737.
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but before the demolition occurred. A hearing was scheduled
for 1 hour prior to the demolition, with no further informa-
tion given to the owner on the specific problems posed by the
house. We determined that this violated the owner’s due proc­
ess rights, because the notice failed, under the circumstances,
to give her a statutorily required reasonable amount of time
and failed to meaningfully inform her of the complicated and
substantial specific problems alleged to constitute the hazards
so that she could have an opportunity to remedy the situation
and defend her case.42
Unlike Blanchard, LLNRD’s notice alleged a specific viola-
tion—that Prokop had “intentionally and repeatedly violated
the annual reporting requirements”—and provided specific fac-
tual allegations that the 2015 and 2016 reports were incomplete
and late. The individual violations of Prokop’s missing data
were simple and readily apparent from the listed forms without
the need of an expert, in contrast to the issues alleged to con-
stitute a hazard in Blanchard.43
LLNRD’s notice was reasonably calculated to inform Prokop
about the allegations against him and the issues involved
in the proceeding. Accordingly, the notice satisfied Prokop’s
due process rights by informing him of the factual basis for
the accusation.
(b) Notice of LLNRD’s Evidence
Prokop also claims that his due process rights were violated
by not receiving notice of the evidence LLNRD intended to
present and that such violation limits the possibility of com-
petent judicial review. Prokop argues the notice appropriate to
the nature of the present case includes “notice of the evidence,
witnesses, and factual basis for the allegations against him,”44
in part due to his significant property interest to the access of
ground water.
42
Blanchard, supra note 40.
43
See id.
44
Brief for appellant at 29.
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GWMPA does not set forth a specific formal due process
hearing procedure containing the requirement that an NRD
provide the names of any witnesses who will be called to tes-
tify against the alleged violator, an opportunity to examine any
documents that will be presented at the hearing, the right to be
represented, and an opportunity to cross-examine all witnesses
and to present evidence material to the issues.45 Neither do the
rules of LLNRD set forth rules of procedure regarding prehear-
ing discovery. As a result, we must consider Prokop’s argument
under the bare minimum due process requirements.
Prokop alleges not only that LLNRD failed to provide him
notice of the evidence but also that he repeatedly requested the
evidence prior to the hearing and was denied. However, in the
record before us, there is no available evidence or stated alle-
gations that would indicate Prokop requested and was denied
access to LLNRD’s evidence prior to the hearing, including
the 2015 and 2016 reports. Thus, we consider whether LLNRD
was required to provide Prokop with notice of the evidence it
intended to present and not whether LLNRD violated its due
process obligations by refusing Prokop’s alleged request for
access to the evidence.
[19,20] There is no due process requirement that an NRD
provide notice of evidence to an adverse party prior to a hear-
ing. In Cain v. Custer Cty. Bd. of Equal.,46 we stated that,
while similar to a judicial proceeding, an adjudication hear-
ing before an agency does not guarantee an individual any
particular form of state procedure. In States v. Anderson,47 we
declined to recognize prehearing discovery as a requirement of
due process but acknowledged that administrative bodies have
the authority to provide discovery which must be exercised
judicially and not arbitrarily. And in Marshall v. Wimes,48 in
45
Compare § 46-743, with Neb. Rev. Stat. § 79-832 (Reissue 2014).
46
See, e.g., Cain, supra note 32.
47
States v. Anderson, 219 Neb. 545, 364 N.W.2d 38 (1985).
48
Marshall v. Wimes, 261 Neb. 846, 626 N.W.2d 229 (2001).
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addressing the refusal of an administrative body to issue a
subpoena for appearance at a hearing, we explained that due
proc­ess requires notice, identification of the accuser, factual
basis for the accusation, reasonable time and opportunity to
present evidence concerning the accusation, and a hearing
before an impartial board.
[21,22] We have held that due process involving deprivation
of a significant property interest requires notice and an oppor-
tunity to be heard that is appropriate to the nature of the case.49
Stated another way, due process depends on, in part, whether
the notice was sufficient to provide the party a reasonable
opportunity to confront and cross-examine adverse witnesses
and present evidence.50
Here, LLNRD’s notice was sufficient to provide Prokop a
reasonable opportunity to confront and cross-examine adverse
witnesses and present evidence. The notice was given 23 days
before the hearing, informed him of the time and location of
the hearing, provided potential penalties, informed him that
he would have the opportunity to address the charges and pre­
sent evidence in his defense, and, as determined above, was
sufficient to notify him of the charges and factual allegations
supporting those charges, including that the 2015 and 2016
reports were deficient and that these deficiencies were part of
an intentional and continuing pattern.
The evidence LLNRD provided at the hearing included
the notice, proof of service and publication of the notice,
the reports specified in the notice, LLNRD rules establishing
LLNRD’s authority to require and enforce the information on
the reports, the complaint and order in Nance County District
Court case No. CI 13-01, and testimony concerning the defi-
ciencies of the reports and why the deficient material was
important. All of this evidence was either a source of author-
ity that was referenced in the notice, documents involving
49
See, Cain, supra note 32; Blanchard, supra note 40.
50
Id.
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the notice and its receipt, or factual confirmation of specific
allegations set forth in the notice. As such, the evidence pre-
sented was a natural extension of the notice and Prokop was
sufficiently informed to provide him a reasonable opportunity
to cross-examine LLNRD’s witnesses and present evidence at
the hearing.
(c) Notice of Use of Prior Violation
Prokop specifically claims his due process rights were vio-
lated by not receiving notice of LLNRD’s intended use of case
No. CI 13-01. By not receiving notice of LLNRD’s intent,
Prokop argues, he was denied the opportunity to gather evi-
dence, present witnesses, and prepare a defense concerning the
use of the prior proceedings. Further, Prokop claims case No.
CI 13-01 had nothing to do with the present allegations and
should not have been admitted and considered by the board.
[23] First, as discussed above, due process does not require
that LLNRD provide notice of its specific evidence to Prokop
prior to the hearing.51
LLNRD’s notice did inform Prokop of its allegation that
Prokop has “intentionally and repeatedly violated the annual
reporting requirements.” Case No. CI 13-01 was relevant to
LLNRD’s allegation because it was evidence of continued,
similar violations. Prokop emphasizes in his brief that case
No. CI 13-01 concerned illegal wells and alleges he would
have presented further evidence on the facts surrounding those
wells, but LLNRD used case No. CI 13-01 as evidence that
Prokop had a history of violating LLNRD’s reporting require-
ments. While case No. CI 13-01 does address the illegal wells,
it also, more relevantly, finds Prokop in violation of reporting
obligations and orders him to provide the required reports.
As such, LLNRD’s notice informing Prokop of its allegation
that he has “intentionally and repeatedly violated the annual
reporting requirements” appropriately informed him that his
51
See, e.g., Cain, supra note 32; Marshall, supra note 48; Anderson, supra
note 47.
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prior violations, including those violations under case No.
CI 13-01, would be at issue and that they would be relevant to
the Board’s consideration of a potential penalty.
4. Possibility of Competent
Judicial R eview
Prokop assigns the district court erred in finding LLNRD’s
action did not limit the possibility of competent judicial review.
Specifically, Prokop claims he was not provided adequate
notice of the claims against him and LLNRD’s intended evi-
dence, which deprived him of the opportunity to gather evi-
dence and arrange for witnesses to testify on his behalf.
Because we determined above that Prokop was provided
adequate notice of the claims against him, was not entitled to
notice of the specific evidence LLNRD intended to present,
and was given opportunity to present his own evidence and call
his own witnesses, Prokop’s assignment that he was deprived
of the possibility of competent judicial review due to lack of
notice is without merit.
5. Taking Without Just Compensation
Prokop contends LLNRD’s issuance of a cease and desist
order suspending his access to ground water, as modified by the
district court, amounts to a taking without just compensation.
[24-26] A takings analysis begins with an examination of
the nature of the owner’s property interest.52 Ground water, as
defined by § 46-706, is owned by the public, and the only right
held by an overlying landowner is in the use of the ground
water.53 As noted above, the right of an owner of overlying
land to use ground water is an appurtenance constituting prop-
erty protected by Neb. Const. art. I, § 21.54
[27-29] Through its police power, the State has the power to
determine public policy with regard to ground water and can
52
Hill v. State, 296 Neb. 10, 894 N.W.2d 208 (2017).
53
See In re Application U-2, 226 Neb. 594, 413 N.W.2d 290 (1987).
54
Sorensen, supra note 34.
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alter the common law governing the use of ground water.55 The
appropriate exercise of police power occurs where an owner
is denied the unrestricted use or enjoyment of his property, or
his property is taken from him, because his use or enjoyment
of such property is injurious to the public welfare.56 This is in
contrast to eminent domain, where property is taken from the
owner and applied to public use because the use or enjoyment
of such property is beneficial to the public.57 Appropriate use
of police power includes that the State place limitations on the
withdrawals of ground water in times of shortage.58
Here, LLNRD’s reporting requirements were implemented,
in part, to address the goals under GWMPA of water quality
and pollution control and address levels of nitrate nitrogen
and other contaminants in ground water. In order to do so,
LLNRD rules and regulations and GWMPA require various
data from operators, including actual crop yield, nitrogen
application, and water applied. This information is necessary
to create long-term solutions to prevent levels of ground water
contaminants from becoming too high and creating health
hazards.59 By not complying with the reporting requirements,
Prokop was preventing LLNRD from information necessary
to perform its duties under GWMPA. Thus, LLNRD limited
Prokop’s use, because his use or enjoyment of such property
was injurious to the public welfare and, in doing so, this was
an appropriate exercise of police power and did not amount to
a taking without just compensation.
6. Exhibits 4 and 5
Prokop assigns the district court erred in declining to receive
exhibits 4 and 5 to supplement LLNRD’s record. Prokop
55
See Bamford v. Upper Republican Nat. Resources Dist., 245 Neb. 299, 512
N.W.2d 642 (1994).
56
Strom v. City of Oakland, 255 Neb. 210, 583 N.W.2d 311 (1998).
57
Id.
58
See Bamford, supra note 55.
59
See § 46-709.
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claims these exhibits were admissible under “an exception to
the general prohibition of extra-record evidence” for evidence
of alleged procedural irregularities.60
However, exhibits 4 and 5 do not provide evidence relevant
to whether there were procedural irregularities denying Prokop
due process. Instead, Prokop purports that these exhibits dem-
onstrate what evidence he could have presented if those proce-
dural irregularities were not present. Evidence of what could
have been presented if not for the alleged procedural violations
is not evidence that would indicate whether or not such proce-
dural violations occurred. Therefore, the district court did not
err in declining to supplement LLNRD’s record and receive
exhibits 4 and 5.
In the alternative, Prokop claims the district court abused
its discretion in failing to remand the matter to the board for
further proceedings to allow Prokop the opportunity to pre­sent
the evidence from exhibits 4 and 5 in the interest of justice.
Prokop’s argument centers on the allegation that he was denied
due process and not provided sufficient notice of the claims
against him. Having determined that the notice was sufficient
to inform Prokop of the claims against him and that he was not
entitled to a notice of the evidence which LLNRD intended to
present, Prokop’s claim that the district court erred in failing
to remand the matter to allow him to supplement the record is
without merit.
7. Attorney Fees
Finally, Prokop assigns the district court erred in failing to
reverse the board’s order and failing to award attorney fees,
because LLNRD’s position was not substantially justified.
Under Neb. Rev. Stat. § 25-1803 (Reissue 2016), a court hav-
ing jurisdiction over a civil action brought by the State or an
action for judicial review brought against the State pursuant
to the APA shall award fees and other expenses to the pre-
vailing party unless the prevailing party is the State. Because
60
Brief for appellant at 33.
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we determined the district court did not err in affirming the
board’s order, Prokop was not the prevailing party and the
district court did not err in declining to award Prokop attor-
ney fees.
8. Modification of Duration of
Penalty LLNRD Imposed
On cross-appeal, LLNRD and the board assign the district
court erred in modifying the penalty from a 4-year suspension
of Prokop’s ground water rights to a 1-year suspension with the
possibility of 3 additional years if Prokop continues to violate
LLNRD’s reporting requirements. In support of this assign-
ment, LLRND asserts the district court should have given def-
erence to the board’s penalty. However, this assertion is at odds
with the district court’s standard of review.
[30] Any person aggrieved by an order of an NRD issued
pursuant to GWMPA may appeal the order, and that appeal
shall be in accordance with the APA.61 That appeal is con-
ducted by the district court without a jury de novo on the
record of the agency.62 In a de novo review on the record of
an administrative order, the district court is required to make
independent factual determinations based upon the record, and
the court reaches its own independent conclusions with respect
to the matters at issue.63
Here, the district court performed such a de novo review and
determined that the 4-year suspension was unreasonable under
the circumstances of the case and modified the penalty to a
1-year suspension with a possibility of 3 more years if contin-
ued noncompliance.
LLNRD and the board acknowledge the statutory standard
of review is de novo when a court is reviewing questions of
fact or law. However, LLNRD and the board argue that the
determination of a penalty is not a factual or legal issue but is,
61
See § 46-750.
62
Neb. Rev. Stat. § 84-917(5)(a) (Reissue 2014).
63
See Medicine Creek, supra note 9.
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instead, a policy matter. LLNRD and the board argue GWMPA
provides NRD’s deference to determine such penalties through
operation of § 46-746(1), which provides a violator “shall be
subject to the imposition of penalties imposed through the con-
trols adopted by the district, including, but not limited to, hav-
ing any allocation of water granted or irrigated acres certified
by the district reduced in whole or in part.”
We disagree with LLNRD and the board’s interpretation.
First, the language of § 46-746(1) does not limit the pos-
sibility of judicial review of the determination of penalties.
Moreover, GWMPA does not limit what parts of an order are
to be reviewed under the APA, stating “[a]ny person aggrieved
by any order . . . may appeal,”64 and the APA states “the review
shall be conducted . . . de novo,” without limiting the review
of the order.65 As stated above, a district court in reviewing an
administrative order is required to make independent factual
determinations and reach independent conclusions with respect
to the matters at issue.66 Clearly, the imposition of Prokop’s
penalty was a matter at issue in the board’s proceedings, as
evidenced by the amount of thought and consideration LLNRD
alleges the board undertook in determining the severity of the
issued penalty.
Because the district court utilized the appropriate de novo
review in considering LLNRD’s imposition of the penalty and
because the modified penalty conforms to the law, is supported
by competent evidence, and is neither arbitrary, capricious, nor
unreasonable, the district court did not err in modifying the
duration of Prokop’s penalty.
V. CONCLUSION
For the reasons stated above, the district court did not err in
determining that LLNRD had authority to require actual crop
yield data from Prokop, that LLNRD had authority to impose
64
§ 46-750.
65
§ 84-917(5)(a).
66
See Medicine Creek, supra note 9.
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a suspension of ground water access for noncompliance with
reporting requirements, that Prokop’s right to due process was
not violated in the proceedings before LLNRD’s board, that
Prokop was not denied the possibility of competent judicial
review, that the suspension of Prokop’s ground water access
was not a taking without just compensation, that exhibits 4 and
5 should not have been admitted as “extra-record evidence,”
and that Prokop was not entitled to attorney fees. The district
court also did not err in its modification of the duration of
Prokop’s penalty.
A ffirmed.
Miller-Lerman and Freudenberg, JJ., not participating.
Papik, J., concurring.
This court concludes that LLNRD had the authority to
require the submission of actual crop yield data in at least
partial reliance on the principle that courts are to afford def-
erence to an agency’s interpretation of its own regulations
unless plainly erroneous or inconsistent. We have cited and
applied this principle on many occasions over the last several
decades. See, e.g., Melanie M. v. Winterer, 290 Neb. 764,
862 N.W.2d 76 (2015); Kosmicki v. State, 264 Neb. 887, 652
N.W.2d 883 (2002); Wagoner v. Central Platte Nat. Resources
Dist., 247 Neb. 233, 526 N.W.2d 422 (1995); Department
of Banking, Receiver v. Wilken, 217 Neb. 796, 352 N.W.2d
145 (1984).
But while we have precedent for the principle that courts
defer to an agency’s interpretation of its own regulations, I am
not sure that precedent rests on stable ground. The principle
appears to have entered our jurisprudence in Wilken, supra. In
that case, we cited a case from the Eighth Circuit holding that
an agency is entitled to deference when interpreting its own
regulations. Id., citing Columbus Community Hospital, Inc. v.
Califano, 614 F.2d 181 (8th Cir. 1980). That Eighth Circuit
case, in turn, cited Bowles v. Seminole Rock Co., 325 U.S. 410,
414, 65 S. Ct. 1215, 89 L. Ed. 1700 (1945), a U.S. Supreme
Court case which stated that the administrative interpretation
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of a regulation has “controlling weight unless it is plainly
erroneous or inconsistent with the regulation.” The Court in
Seminole Rock Co. did not offer an explanation as to why the
agency would be entitled to deference in those circumstances.
See Decker v. Northwest Environmental Defense Center, 568
U.S. 597, 617, 133 S. Ct. 1326, 185 L. Ed. 2d 447 (2013)
(Scalia, J., concurring in part and in part dissenting) (observing
that Seminole Rock Co. “offered no justification whatever”).
Even so, the U.S. Supreme Court reaffirmed this principle
decades later in Auer v. Robbins, 519 U.S. 452, 117 S. Ct. 905,
137 L. Ed. 2d 79 (1997).
In recent years, however, the principle recognized in
Seminole Rock Co., supra, and reaffirmed in Auer, supra, has
been called into question. It has been criticized for lacking a
coherent rationale, see Perez v. Mortgage Bankers Ass’n, ___
U.S. ___, 135 S. Ct. 1199, 191 L. Ed. 2d 186 (Thomas, J.,
concurring in judgment); for incentivizing the promulgation
of vague regulations, see Decker, supra (Scalia, J., concurring
in part and in part dissenting), and for violating the separa-
tion of powers, Perez, supra (Thomas, J., concurring in judg-
ment). See, also, John F. Manning, Constitutional Structure
and Judicial Deference to Agency Interpretations of Agency
Rules, 96 Colum. L. Rev. 612 (1996).
The criticism leveled at Seminole Rock Co., supra, and Auer,
supra, by multiple justices of the U.S. Supreme Court (includ-
ing the author of Auer) had led some to speculate that “Auer
may not be long for this world.” Bible v. United Student Aid
Funds, Inc., 807 F.3d 839, 841 (7th Cir. 2015) (Easterbrook,
Circuit Judge, concurring in denial of rehearing en banc). See,
also, Turtle Island Restoration Network v. US DOC, 878 F.3d
725, 742 n.1 (9th Cir. 2017) (Callahan, Circuit Judge, dissent-
ing in part) (“Auer’s continued vitality is a matter of consider-
able debate”). Such speculation may prove to be prescient, as
the U.S. Supreme Court very recently granted certiorari on
the question of whether Auer and Seminole Rock Co. should
be overturned. See Kisor v. Shulkin, 869 F.3d 1360 (Fed. Cir.
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2017), cert. granted in part sub nom. Kisor v. Wilkie, No.
18‑15, 2018 WL 6439837 (U.S. Dec. 10, 2018).
We thus appear to have adopted the principle that courts are
to defer to agencies’ interpretations of their own regulations
by decades ago uncritically adopting a dubious proposition of
federal law that itself may not stand the test of time. While
that seems reason enough for reconsideration of the principle
in the appropriate case, I believe there is an additional reason
to do so: The principle also seems to be in tension, if not at
outright odds, with Nebraska’s version of the Administrative
Procedure Act (APA).
In this case, and many others like it, Nebraska courts are
called on to review the decisions of administrative agencies
under the authority granted by the APA. The APA, however,
provides that the review is to be conducted by the court “with-
out a jury de novo on the record of the agency.” Neb. Rev.
Stat. § 84‑917(5)(a) (Reissue 2014). This standard has been
interpreted to require district courts to make independent deter-
minations of both factual and legal issues. See Medicine Creek
v. Middle Republican NRD, 296 Neb. 1, 892 N.W.2d 74 (2017).
But if the APA directs district courts to independently decide
factual and legal questions without deferring to the agency, on
what basis can courts defer to the agency’s interpretation of its
own regulations? In my view, the lack of an obvious answer to
that question is yet another reason why we should reconsider
whether deference is owed to agencies’ interpretations of their
own regulations.
With all that said, the parties have not asked us to reconsider
our precedent in this case. Without the aid of argument from
the parties, I do not believe such reconsideration is appropriate
here. Therefore, I concur in this court’s decision in all respects.
For the reasons expressed above, however, I would be open to
reconsidering in a future case whether courts owe deference to
agencies’ interpretations of their own regulations.