Big John's Billiards v. State ( 2014 )

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summary judgment in their favor. The district court’s entry of
summary judgment in favor of the appellees on this theory was
not error.
CONCLUSION
With respect to Brock’s first cause of action, the district
court determined that because Brock failed to show that he
made a written claim for the tort of wrongful discharge in
retaliation for filing his workers’ compensation claim, his
claim was barred under § 13-919(1) and entered summary
judgment in favor of the appellees on this cause of action.
With respect to Brock’s second cause of action under § 1983,
the district court determined that the appellees did not violate
Brock’s constitutional right to property, right to freedom of
speech, or right to privacy and entered summary judgment in
favor of the appellees on each of these three theories. Although
our reasoning differs somewhat from that of the district court,
we find no error in the entry of summary judgment in favor
of the appellees on both causes of action, and, therefore,
we affirm.
Affirmed.
Big John’s Billiards, Inc., a Nebraska corporation, appellee
and cross-appellant, v. State of Nebraska et al.,
appellants and cross-appellees, and Douglas
County Health Department, appellee.
___ N.W.2d ___
Filed August 29, 2014. No. S-13-803.
1. Constitutional Law: Statutes: Appeal and Error. Whether a statute is consti-
tutional presents a question of law, which the Nebraska Supreme Court resolve
independently of the lower court’s determination.
2. Constitutional Law: Statutes: Presumptions. A statute is presumed to
be constitutional, and all reasonable doubts are resolved in favor of its
constitutionality.
3. Constitutional Law: Statutes: Proof. The burden of establishing the unconstitu-
tionality of a statute is on the one attacking its validity.
4. ____: ____: ____. The unconstitutionality of a statute must be clearly established
before it will be declared void.
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5. Constitutional Law: Statutes: Legislature: Presumptions. The Nebraska
Legislature is presumed to have acted within its constitutional power despite that,
in practice, its laws may result in some inequality.
6. Special Legislation. The focus of the prohibition against special legislation is the
prevention of legislation which arbitrarily benefits or grants “special favors” to a
specific class.
7. ____. A legislative act constitutes special legislation if (1) it creates an arbi-
trary and unreasonable method of classification or (2) it creates a permanently
closed class.
8. Constitutional Law: Statutes: Special Legislation. When the Legislature con-
fers privileges on a class arbitrarily selected from many who are standing in the
same relation to the privileges, without reasonable distinction or substantial dif-
ference, then the statute in question has resulted in the kind of improper discrimi-
nation prohibited by the Nebraska Constitution.
9. Special Legislation. Classifications for the purpose of legislation must be real
and not illusive; they cannot be based on distinctions without a substantial dif-
ference. The question is always whether the things or persons classified by the
act form by themselves a proper and legitimate class concerning the purpose of
the act.
10. ____. A legislative body’s distinctive treatment of a class is proper if the class has
some reasonable distinction from other subjects of a like general character. And
that distinction must bear some reasonable relation to the legitimate objectives
and purposes of the legislative act.
11. ____. In order to determine if there is a “substantial difference of circumstances
to suggest the expediency of diverse legislation” between the general class gov-
erned by a statute and the exempted class, it is necessary to examine both the
purpose of the statute and the purpose behind the exemptions. The question is
whether there is a difference in circumstances between the general class and the
exempted class so as to justify treating one differently than the other, in light of
the purpose of the act.
12. Constitutional Law: Statutes. The general rule is that when part of an act is
held unconstitutional, the remainder must likewise fail, unless the unconstitu-
tional portion is severable from the remaining portions.
13. Statutes: Constitutional Law: Legislature: Intent: Appeal and Error. To
determine whether an unconstitutional portion of a statute may be severed, an
appellate court considers (1) whether a workable statutory scheme remains with-
out the unconstitutional portion, (2) whether valid portions of the statute can be
enforced independently, (3) whether the invalid portion was the inducement to
passage of the statute, (4) whether severing the invalid portion will do violence
to the intent of the Legislature, and (5) whether the statute contains a declaration
of severability indicating that the Legislature would have enacted the bill without
the invalid portion.
14. Constitutional Law: Contracts. A three-part test is applied to determine
whether a contract has been unconstitutionally interfered with. Pursuant to that
test, a court must examine (1) whether there has been an impairment of the
contract; (2) whether the governmental action, in fact, operated as a substantial
impairment of the contractual relationship; and (3) whether the impairment
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was nonetheless a permissible, legitimate exercise of the government’s sover-
eign powers.
15. Constitutional Law: Property. Payment of just compensation pursuant to article
I, § 21, of the Nebraska Constitution applies only to vested property rights.
16. Constitutional Law: Property: Legislature. The Legislature is free to create
and abolish rights so long as no vested right is disturbed. The type of right that
vests can be described generally as an interest which it is proper for the state to
recognize and protect and of which the individual may not be deprived arbitrarily
without injustice.
17. Constitutional Law: Words and Phrases. To be considered a vested right, the
right must be fixed, settled, absolute, and not contingent upon anything.
18. Constitutional Law: Property. With respect to property, a right is considered
to be vested if it involves an immediate fixed right of present or future enjoy-
ment and an immediate right of present enjoyment, or a present fixed right of
future enjoyment.
19. ____: ____. A vested right must be something more than a mere expectation
based upon an anticipated continuance of the existing law; it must have become
a title, legal or equitable, to the present or future enjoyment of property.
20. Constitutional Law: Statutes: Intent: Presumptions. A vested right can
be created by statute. But it is presumed that a statutory scheme is not
intended to create vested rights, and a party claiming otherwise must overcome
that presumption.
Appeal from the District Court for Lancaster County: Jodi
Nelson, Judge. Affirmed in part, and in part reversed.
Jon Bruning, Attorney General, Dale A. Comer, Lynn A.
Melson, and Natalee J. Hart for appellants.
Theodore R. Boecker, Jr., of Boecker Law, P.C., L.L.O., for
appellee Big John’s Billiards, Inc.
Heavican, C.J., Connolly, Stephan, McCormack, Miller-
Lerman, and Cassel, JJ., and Pirtle, Judge.
Stephan, J.
The Nebraska Clean Indoor Air Act (the Act)1 prohib-
its smoking in public places and places of employment
but exempts certain facilities from that prohibition. In this
action, we are asked to determine the constitutionality of
three of these exemptions. We conclude that one exemption
1
Neb. Rev. Stat. §§ 71-5716 to 71-5734 (Reissue 2009 & Cum. Supp.
2012).
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is constitutional, but the remaining two are unconstitutional
special legislation which are severable from the Act.
I. BACKGROUND
In 2008,2 the Nebraska Legislature amended the Act to make
it “unlawful for any person to smoke in a place of employ-
ment or a public place.”3 The Act defines “[p]ublic place” as
“an indoor area to which the public is invited or in which the
public is permitted.”4 The Act specifically provides that “[a]
private residence is not a public place.”5
Three indoor areas were exempted from the smoking prohi-
bition in the 2008 legislation:
(1) Guestrooms and suites that are rented to guests
and are designated as smoking rooms, except that not
more than twenty percent of rooms rented to guests in an
establishment may be designated as smoking rooms. All
smoking rooms on the same floor shall be contiguous,
and smoke from such rooms shall not infiltrate into areas
where smoking is prohibited under the [Act];
(2) Indoor areas used in connection with a research
study on the health effects of smoking conducted in a sci-
entific or analytical laboratory under state or federal law
or at a college or university approved by the Coordinating
Commission for Postsecondary Education; [and]
(3) Tobacco retail outlets.6
As defined by the Act, a “[t]obacco retail outlet” is “a store
that sells only tobacco and products directly related to tobacco.
Products directly related to tobacco do not include alcohol, cof-
fee, soft drinks, candy, groceries, or gasoline.”7
In 2009,8 the Legislature added a fourth exemption for
“[c]igar bars,” which are defined in the Act via reference to
2
2008 Neb. Laws, L.B. 395.
3
§ 71-5729.
4
§ 71-5726.
5
Id.
6
See, § 71-5730 (Cum. Supp. 2008); L.B. 395.
7
§ 71-5728.
8
2009 Neb. Laws, L.B. 355.
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the Nebraska Liquor Control Act9 as “an establishment oper-
ated by a holder of a Class C liquor license” which “[d]oes not
sell food,” “annually receives ten percent or more of its gross
revenue from the sale of cigars” and related tobacco products
other than cigarettes, “[h]as a walk-in humidor on the prem-
ises,” and “[d]oes not permit the smoking of cigarettes.”10 A
cigar bar may serve alcohol.11
Big John’s Billiards, Inc. (Big John’s), is a corporation
which operates a billiards hall in Omaha, Nebraska. On May
20, 2009, Big John’s filed an action in the district court for
Lancaster County seeking a declaratory judgment that the Act
was unconstitutional. As relevant here, Big John’s asserted
the Act was unconstitutional because it was special legisla-
tion, because it constituted a regulatory taking, and because it
impaired its right to contract. The operative complaint named
the State of Nebraska, two state agencies, two state officials,
and the Douglas County Health Department as defendants. We
refer to these parties collectively as “the State.”
In September 2010, the district court held a hearing on
summary judgment motions filed by both sides. The hearing
was limited to Big John’s claim that three exemptions from
the Act violated the prohibition against special legislation set
forth in Neb. Const. art. III, § 18. The district court concluded
that the exemptions for guestrooms, tobacco retail outlets, and
cigars bars were unconstitutional special legislation. In doing
so, it reasoned that the record failed to show that there was
a substantial difference in circumstances between those three
exemptions and all public places and places of employment
when considered in light of the purpose of the Act. However, it
found that the exemptions were severable from the remaining
provisions of the Act and that the Act therefore remained valid
and enforceable.
9
See Neb. Rev. Stat. §§ 53-101 to 53-1,122 (Reissue 2010, Cum. Supp.
2012 & Supp. 2013).
10
§§ 71-5730(4) (Reissue 2009) and 53-103.08.
11
See id.
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The State appealed to this court.12 We determined we lacked
jurisdiction because not all of the claims asserted below had
been resolved.13 On September 12, 2013, the district court
resolved the remaining claims in favor of the State. The State
then filed this timely appeal, and Big John’s cross-appealed.
II. ASSIGNMENTS OF ERROR
The State assigns that the district court erred in (1) misap-
plying the special legislation test and (2) determining the statu-
tory exemptions for hotel guestrooms, tobacco retail outlets,
and cigar bars were unconstitutional special legislation.
In its cross-appeal, Big John’s assigns that the district court
erred in (1) concluding the Act should not be invalidated but
merely should be subject to a severing of the unconstitu-
tional exemptions; (2) concluding the Act did not constitute an
impairment of its contractual rights, in violation of article I,
§ 16, of the Nebraska Constitution; and (3) concluding the Act
did not constitute an unconstitutional regulatory taking in vio-
lation of article I, § 21, of the Nebraska Constitution.
III. STANDARD OF REVIEW
[1] Whether a statute is constitutional presents a question
of law, which we resolve independently of the lower court’s
determination.14
IV. ANALYSIS
[2-5] Our independent resolution of the issues presented
by this appeal is governed by familiar principles applicable
to constitutional challenges to state statutes. A statute is pre-
sumed to be constitutional, and all reasonable doubts are
resolved in favor of its constitutionality.15 The burden of
12
Big John’s Billiards v. State, 283 Neb. 496, 811 N.W.2d 205 (2012).
13
Id.
14
In re Interest of A.M., 281 Neb. 482, 797 N.W.2d 233 (2011).
15
Connelly v. City of Omaha, 284 Neb. 131, 816 N.W.2d 742 (2012); Sarpy
Cty. Farm Bureau v. Learning Community, 283 Neb. 212, 808 N.W.2d 598
(2012).
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establishing the unconstitutionality of a statute is on the one
attacking its validity.16 The unconstitutionality of a statute
must be clearly established before it will be declared void.17
The Nebraska Legislature is presumed to have acted within
its constitutional power despite that, in practice, its laws may
result in some inequality.18
1. Special Legislation
[6,7] The enactment of special legislation is prohibited by
Neb. Const. art. III, § 18, which provides in relevant part:
The Legislature shall not pass local or special laws in
any of the following cases, that is to say:
....
Granting to any corporation, association, or individual
any special or exclusive privileges, immunity, or franchise
whatever . . . . In all other cases where a general law can
be made applicable, no special law shall be enacted.
The focus of the prohibition against special legislation is
the prevention of legislation which arbitrarily benefits or
grants “special favors” to a specific class.19 A legislative act
constitutes special legislation if (1) it creates an arbitrary
and unreasonable method of classification or (2) it creates a
permanently closed class.20 It is undisputed that there is not
a permanently closed class at issue in this case, and thus our
focus is on whether there is an arbitrary and unreasonable
classification.
[8-10] When the Legislature confers privileges on a class
arbitrarily selected from many who are standing in the same
relation to the privileges, without reasonable distinction or
substantial difference, then the statute in question has resulted
16
Id.
17
Id.
18
Connelly, supra note 15; Staley v. City of Omaha, 271 Neb. 543, 713
N.W.2d 457 (2006).
19
In re Interest of A.M., supra note 14.
20
D-CO, Inc. v. City of La Vista, 285 Neb. 676, 829 N.W.2d 105 (2013); In
re Interest of A.M., supra note 14; Hug v. City of Omaha, 275 Neb. 820,
749 N.W.2d 884 (2008).
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in the kind of improper discrimination prohibited by the
Nebraska Constitution.21 Classifications for the purpose of leg-
islation must be real and not illusive; they cannot be based on
distinctions without a substantial difference.22 The question is
always whether the things or persons classified by the act form
by themselves a proper and legitimate class concerning the
purpose of the act.23 A legislative body’s distinctive treatment
of a class is proper if the class has some reasonable distinc-
tion from other subjects of a like general character.24 And that
distinction must bear some reasonable relation to the legitimate
objectives and purposes of the legislative act.25
We have addressed special legislation issues on numerous
occasions. In one case, Hug v. City of Omaha,26 we examined
an issue very similar to that presented here. Hug involved a
challenge to exemptions to an Omaha ordinance imposing a
smoking ban throughout the city. In analyzing the special leg-
islation claim with respect to these exemptions, we focused on
the city council’s purpose in creating the class and examined
whether there was a substantial difference of circumstances to
suggest the expediency of diverse legislation. We noted that in
determining whether the exemptions to a city ordinance pro-
hibiting smoking in most public places and places of employ-
ment constituted special legislation, it was necessary to focus
“on the City’s purpose behind exempting certain entities and
decide whether there is a substantial difference of circum-
stances between exempted and nonexempted facilities which
would suggest the expediency of diverse legislation.”27
Hug noted that in comparing exempted and nonexempted
facilities, it was necessary to examine the stated purpose
of the ordinance, which was “the prohibition of smoking in
21
In re Interest of A.M., supra note 14; Hug, supra note 20.
22
Id.
23
D-CO, Inc., supra note 20.
24
Id.; In re Interest of A.M., supra note 14.
25
Id.
26
Hug, supra note 20.
27
Id. at 827, 749 N.W.2d at 890.
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public gathering places and in places of employment in order
to protect the public health and welfare and to guarantee the
right to breathe smoke-free air.”28 In finding exemptions for
stand-alone bars, keno establishments, and horseracing simul-
cast locations were invalid special legislation, we reasoned:
“Nothing in the ordinance’s stated purpose would explain why
employees of the exempted facilities or members of the public
who wish to patronize those establishments are not entitled
to breathe smoke-free air or to have their health and wel-
fare protected.”29 We also noted that the city had not offered
any evidence to support making such a distinction. Thus, we
determined that on the record, there was no “‘substantial dif-
ference of circumstances to suggest the expediency of diverse
legislation.’”30 We specifically noted, however, that we were
not holding that “similar exemptions could not be constitution-
ally justified.”31
(a) Special Legislation Test
The parties disagree as to how the special legislation analy-
sis is to be applied when exemptions to a statute are alleged to
constitute special legislation. The district court found, and Big
John’s agrees, that whether the exemptions are special legisla-
tion should be examined in light of the purpose of the entire
Act. The State, on the other hand, argues that whether the
exemptions are special legislation should be determined solely
from the purpose of the exemptions themselves.
[11] Both sides are partially correct. In order to determine
if there is a “substantial difference of circumstances to sug-
gest the expediency of diverse legislation”32 between the
general class governed by a statute and the exempted class,
it is necessary to examine both the purpose of the statute and
28
Id.
29
Id.
30
Id. at 827, 749 N.W.2d at 890-91, quoting Le v. Lautrup, 271 Neb. 931,
716 N.W.2d 713 (2006).
31
Id. at 827, 749 N.W.2d at 891.
32
Id. at 826, 749 N.W.2d at 890.
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the purpose behind the exemptions. The question is whether
there is a difference in circumstances between the general
class and the exempted class so as to justify treating one
differently than the other, in light of the purpose of the Act.
We explained this premise in Gourley v. Nebraska Methodist
Health Sys.33:
“‘Classification is proper if the special class has some
reasonable distinction from other subjects of a like gen-
eral character, which distinction bears some reasonable
relation to the legitimate objectives and purposes of the
legislation. The question is always whether the things or
persons classified by the act form by themselves a proper
and legitimate class with reference to the purpose of
the act.’”
(i) Purpose of the Act
According to § 71-5717, the purpose of the Act is “to pro-
tect the public health and welfare by prohibiting smoking in
public places and places of employment.” The Legislative
history makes it clear that the impetus for the Act was the
Legislature’s concern about the negative health effects of sec-
ondhand smoke.34
The district court concluded that the Act’s purpose was “to
protect the public health and welfare by prohibiting smoking
in public places and places of employment and thereby pro-
tect employees and the public from the hazards of secondhand
smoke.” We view the purpose as slightly broader. Based on the
language of § 71-5717 and the legislative history, the purpose
of the Act is to protect the public health and welfare by pro-
tecting employees and the public from the hazards of second-
hand smoke. The means the Legislature chose to accomplish
this purpose was by prohibiting smoking in all “public places
and places of employment.”35 Thus, the purpose was not to
33
Gourley v. Nebraska Methodist Health Sys., 265 Neb. 918, 938-39, 663
N.W.2d 43, 65 (2003).
34
See, e.g., Introducer’s Statement of Intent, L.B. 395, Health and Human
Services Committee, 100th Leg., 1st Sess. (Feb. 1, 2007).
35
§ 71-5717.
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prohibit smoking, but, rather, to provide protection from the
hazards of secondhand smoke.
(ii) Guestrooms
Guestrooms and suites that are rented to guests and desig-
nated as smoking rooms are exempt from the smoking ban.36
This exemption was part of the bill when it was originally
introduced and was the subject of almost no legislative debate.
The legislative history indicates, however, that the exemption
was included in the bill because hotels are similar to apart-
ments or private residences37 in which the Act does not pro-
hibit smoking.38
The district court essentially reasoned that even if guest-
rooms are akin to private residences and thus there is a reason
to classify them as something other than “public places,” they
remain “places of employment” and there is no substantial
difference in circumstances between them and other places
of employment regulated by the Act. But the legislative his-
tory shows that the issue of employees being exposed to sec-
ondhand smoke in private residences was considered by the
Legislature,39 and ultimately it concluded that a private resi-
dence is a place of employment only when it is being used “as
a licensed child care program and one or more children who
are not occupants of such residence are present.”40
We have noted that “when the Legislature seeks to inau-
gurate reforms in the area of economics or social welfare, it
need not choose between attacking every aspect of the problem
or not attacking the problem at all.”41 Arguably, secondhand
smoke is equally harmful whether it is encountered in a private
36
§ 71-5730(1).
37
See Health and Human Services Committee Hearing, L.B. 395, 100th
Leg., 1st Sess. 73 (Feb. 1, 2007).
38
§ 71-5726.
39
See Floor Debate, L.B. 395, 100th Leg., 1st Sess. 6, 15, 28-29 (Feb. 13,
2007).
40
§ 71-5724.
41
Bergan Mercy Health Sys. v. Haven, 260 Neb. 846, 856, 620 N.W.2d 339,
347 (2000).
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residence or a public place, but the Legislature chose not to
prohibit smoking in private residences except those used for
conducting a licensed childcare program. That was a legiti-
mate policy decision. Likewise, there is a logical basis for the
Legislature to conclude that guestrooms are akin to private
residences, and thus there is a substantial difference in circum-
stances between guestrooms and other public places and places
of employment. Based upon our independent review of the
record, we conclude that the evidence does not overcome the
presumption of constitutionality with respect to the exemption
for guestrooms and suites. This exemption does not constitute
special legislation.
(iii) Tobacco Retail Outlets
The exemption for tobacco retail outlets was not part of the
bill when it was originally introduced. Instead, it was proposed
by committee amendment.42 One senator stated the exemp-
tion was added because it was “reasonable that a business that
deals in nothing but tobacco products be able to allow smok-
ing within their facility”43 and that it made “sense to let people
try out the wares in the smoke shop.”44 In addition, the owner
of a tobacco shop testified during the committee hearing that
ideally, customers would be able to sample his products before
purchasing, “like going to the supermarket to sample various
foods that [it] offer[s].”45 There was no testimony or discussion
about whether such sampling is necessary to the operation of
a tobacco retail outlet or why any such sampling had to occur
indoors, as opposed to outdoors.
We conclude that there is no difference in circumstances
between tobacco retail outlets and all other public places
and places of employment so as to justify the expediency of
diverse legislation and that the exemption in § 71-5730(3) is
42
See Floor Debate, Amend. 276, L.B. 395, 100th Leg., 1st Sess. 20-22
(Mar. 5, 2007).
43
Id. at 20.
44
Id. at 23.
45
Health and Human Services Committee Hearing, L.B. 395, 100th Leg., 1st
Sess. 66 (Feb. 1, 2007).
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therefore unconstitutional special legislation. The mere fact
that tobacco retail outlets sell only tobacco products does not
distinguish them in any substantial way from other public
places or places of employment. And allowing patrons of
such shops to smoke simply because it is convenient does
not comport with the purpose of the Act, which is to pro-
tect the public and employees from the dangers of second-
hand smoke.
(iv) Cigar Bars
The exemption for cigar bars was not part of the Act as it
was originally enacted. Instead, it was enacted by subsequent
legislation in 2009.46 The Introducer’s Statement of Intent on
the proposed bill specifically stated that the purpose of the
exemption was “to provide protection for businesses currently
operating in the state as ‘cigar bars.’”47 During debate, the
senator who introduced the bill argued that cigar bars should
be exempt from the Act because they existed for the purpose of
allowing smoking.48
There is no substantial difference in circumstances between
cigar bars and other public places or places of employment
that justifies treating cigars bars differently. Indeed, the exemp-
tion is directly contrary to the purpose of the Act, which is to
protect the public health by limiting exposure to secondhand
smoke. The exemption in § 71-5730(4) for cigar bars is uncon-
stitutional special legislation.
(b) Severability
The district court found that the unconstitutional exemp-
tions were severable from the other provisions of the Act
and that the Act separated from these exemptions was valid
and enforceable. Big John’s challenges this finding in its
cross-appeal.
46
See L.B. 355.
47
Introducer’s Statement of Intent, L.B. 355, General Affairs Committee,
101st Leg., 1st Sess. (Feb. 9, 2009).
48
General Affairs Committee Hearing, L.B. 355, 101st Leg., 1st Sess. 50-51
(Feb. 9, 2009), and Floor Debate, 101st Leg., 1st Sess. 20-21 (Mar. 20,
2009).
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At the outset, we note that the cigar bar exemption was
enacted after the other exemptions, and in legislation that was
separate from the rest of the Act. Because that exemption was
not part of the original enactment, we need not engage in a
severability analysis as to it. Our analysis is therefore limited
to whether the Act remains valid and enforceable if the tobacco
retail outlet exemption is severed from it.
[12,13] The general rule is that when part of an act is held
unconstitutional, the remainder must likewise fail, unless the
unconstitutional portion is severable from the remaining por-
tions.49 To determine whether an unconstitutional portion of
a statute may be severed, an appellate court considers (1)
whether a workable statutory scheme remains without the
unconstitutional portion, (2) whether valid portions of the stat-
ute can be enforced independently, (3) whether the invalid por-
tion was the inducement to passage of the statute, (4) whether
severing the invalid portion will do violence to the intent of
the Legislature, and (5) whether the statute contains a declara-
tion of severability indicating that the Legislature would have
enacted the bill without the invalid portion.50
Big John’s contests only the district court’s finding that
the exemptions were not the inducement to passage of the
entire Act. It relies on language from a 1935 decision of this
court, stating:
“One of the tests used to determine whether a statute
is or is not severable so that a portion may be rejected
is that it ought not to be held wholly void unless the
invalid portion is so important to the general plan and
operation of the law in its entirety as reasonably to lead
to the conclusion that it would not have been adopted if
the legislature had perceived the invalidity of the part so
held to be unconstitutional; but where the valid and the
invalid parts are so bound together that the invalid part
is a material inducement to the valid portion, the whole
is invalid. This test is merely a means of ascertaining
49
State ex rel. Bruning v. Gale, 284 Neb. 257, 817 N.W.2d 768 (2012).
50
Id.; State ex rel. Stenberg v. Omaha Expo. & Racing, 263 Neb. 991, 644
N.W.2d 563 (2002).
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and carrying out the presumed intention of the legisla-
ture. If it appears that the invalid portion was designed
as an inducement to pass the valid, the inference is that
the legislature would not have passed the valid por-
tion alone.”51
Essentially, Big John’s argues that the legislative history shows
the introducer did not have the votes to pass the Act without
the exemptions and that therefore, the exemptions were an
inducement to the passage of the Act.
The legislative history certainly shows that some compro-
mise was necessary to pass L.B. 395. But compromise is an
inherent part of the lawmaking process. Nothing in the leg-
islative history demonstrates or even implies that the tobacco
retail outlet exemption was critical to passage of the entire
bill. And in any event, the inducement test, properly under-
stood, asks, “Did the Legislature intend to pass the bill only
as it existed with the unconstitutional exemptions?” and not
“Was the Legislature able to pass the bill only because it
contained the unconstitutional exemptions?” As the district
court reasoned, to hold otherwise would mean that any time
Legislative compromise was necessary, that compromise was
an inducement that prevents unconstitutional portions of an
act from being severed. And the Legislative history certainly
does not demonstrate that the Legislature intended to enact
the Act if, and only if, the exemption for tobacco retail outlets
was included.
Further, we consider all five factors when determining
whether unconstitutional provisions of a statute can be sev-
ered from it. Here, the Act is workable and its valid portions
can be enforced without the exemption for tobacco retail
outlets. Severing the exemption would not do violence to the
Legislature’s intent of protecting the public health and wel-
fare by limiting exposure to secondhand smoke. And, finally,
the Legislature expressly declared its willingness to enact the
bill absent the invalid portion, as L.B. 395, § 21, contained
a severability provision stating, “If any section in this act or
51
State, ex rel. Taylor, v. Hall, 129 Neb. 669, 691-92, 262 N.W. 835, 846
(1935), quoting 6 R.C.L. Constitutional Law § 123 (1915).
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any part of any section is declared invalid or unconstitutional,
the declaration shall not affect the validity or constitutionality
of the remaining portions.” We agree with the district court
that the Act is valid and enforceable without the unconstitu-
tional exemptions.
2. Impairment of Contract
Big John’s also argues the Act violates article I, § 16, of the
Nebraska Constitution because it impairs the obligations of the
lease agreement Big John’s entered into with its landlord. The
lease was entered into prior to the smoking ban imposed by
the Act.
[14] Article I, § 16, provides, “No . . . law impairing the
obligation of contracts . . . shall be passed.” A three-part test
is applied to determine whether a contract has been unconsti-
tutionally interfered with.52 Pursuant to that test, a court must
examine (1) whether there has been an impairment of the con-
tract; (2) whether the governmental action, in fact, operated as
a substantial impairment of the contractual relationship; and (3)
whether the impairment was nonetheless a permissible, legiti-
mate exercise of the government’s sovereign powers.53
The district court found Big John’s allegations failed all
three prongs of this test. Because failure to meet the first prong
necessarily means that the test fails, we need go no further
than that if we find the contract was not impaired as a matter
of law.54
Big John’s asserts that it relied on revenues generated from
smoking customers when it entered into the lease agreement,
that its revenues decreased due to the smoking ban imposed
by the Act, and that this decrease in revenue impaired its abil-
ity to make payments on its lease and continue its operations.
Even assuming these facts are true, the Act did not impair
Big John’s obligations on its contract. The Act did not alter
the terms of Big John’s lease in any way or make any term
52
See, Lamar Co. v. City of Fremont, 278 Neb. 485, 771 N.W.2d 894 (2009);
Miller v. City of Omaha, 253 Neb. 798, 573 N.W.2d 121 (1998).
53
See id.
54
See id.
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of that lease invalid or unenforceable.55 Instead, any effect the
Act has on Big John’s revenue is completely incidental and
not related to the lease agreement between Big John’s and the
landlord. There is no unconstitutional impairment of the con-
tract as a matter of law.
3. R egulatory Taking
Big John’s also argues that the Act amounts to a regulatory
taking because it damages its property rights without granting
compensation. Article I, § 21, of the Nebraska Constitution
provides: “The property of no person shall be taken or dam-
aged for public use without just compensation therefor.”
[15] Payment of just compensation pursuant to article I,
§ 21, applies only to vested property rights.56 Big John’s claims
that its vested right was “its ability to operate a premises that
allowed smoking”57 and that the Act took away this vested
right without compensating it.
[16-20] The Legislature is free to create and abolish rights
so long as no vested right is disturbed.58 The type of right that
“‘vests’” can be described generally as “‘an interest which it is
proper for the state to recognize and protect and of which the
individual may not be deprived arbitrarily without injustice.’”59
To be considered a vested right, the right must be “‘fixed,
settled, absolute, and not contingent upon anything.’”60 With
respect to property, a right is considered to be “‘vested’” if it
involves “‘an immediate fixed right of present or future enjoy-
ment and an immediate right of present enjoyment, or a present
fixed right of future enjoyment.’”61 A vested right “‘must be
55
See Lincoln Federal Labor Union v. Northwestern Iron and Metal Co.,
149 Neb. 507, 31 N.W.2d 477 (1948).
56
Tracy v. City of Deshler, 253 Neb. 170, 568 N.W.2d 903 (1997).
57
Brief for appellee on cross-appeal at 45.
58
United States Cold Storage v. City of La Vista, 285 Neb. 579, 831 N.W.2d
23 (2013).
59
Id. at 592, 831 N.W.2d at 33, quoting 16B Am. Jur. 2d Constitutional Law
§ 746 (2009).
60
Id.
61
Id.
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something more than a mere expectation based upon an antici-
pated continuance of the existing law; it must have become a
title, legal or equitable, to the present or future enjoyment of
property.’”62 A vested right can be created by statute.63 But it
is presumed that a statutory scheme is not intended to create
vested rights, and a party claiming otherwise must overcome
that presumption.64
Simply stated, there is no vested right at issue here. The only
“right” Big John’s had to allow its customers to smoke was
created by statute—the prior version of the Act, under which
smoking in billiards parlors was regulated but not prohibited.
That Act created nothing more than a mere expectation based
upon continuance of the existing law and did not create a
vested right. There was no regulatory taking here as a matter
of law.
V. CONCLUSION
There is a difference in circumstances between guestrooms
and other public places which justified diverse legislation,
because guestrooms are akin to private residences. We there-
fore conclude that the exemption for guestrooms is not special
legislation. We agree with the district court, albeit for some-
what different reasons, that the exemptions for tobacco retail
outlets and cigar bars are unconstitutional special legislation.
The Act is valid and enforceable when the unconstitutional
exemptions are severed from it. The Act is not an unconsti-
tutional impairment of contract or an unconstitutional regula-
tory taking.
Affirmed in part, and in part reversed.
Wright, J., not participating.
62
Id., quoting 16B Am. Jur. 2d, supra note 59, § 748.
63
United States Cold Storage, supra note 58.
64
Id.
Cassel, J., dissenting in part.
I respectfully dissent from the part of the majority opinion
holding the exemption for tobacco retail outlets to be uncon-
stitutional as special legislation. Although the majority recites
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the correct standard of review, the court fails to heed it. A
statute is presumed to be constitutional, and all reasonable
doubts are resolved in favor of its constitutionality.1 As to the
tobacco retail outlets exemption, the majority fails to discern
the reasonable doubt that seems so plain to me.
In every other respect, the majority opinion strikes the right
note. It recites the correct law. It correctly resolves the parties’
dispute over how the court should examine the legislation.
And it reaches the correct results regarding the exemptions for
guestrooms and cigar bars. Thus, I focus on the single issue
where I part company with the majority—the exemption for
tobacco retail outlets.
If, in the light of common sense, the statutory text reveals
a reasonable doubt whether there is a substantial difference in
circumstances between a tobacco retail outlet and other public
places and places of employment, our precedent mandates that
we defer to the Legislature. Because that reasonable doubt
clearly exists, I would uphold the exemption.
The majority articulates the purpose of the Nebraska Clean
Indoor Air Act (the Act)2 as “to protect the public health
and welfare by protecting employees and the public from
the hazards of secondhand smoke.” And I agree with this
articulation.
But tobacco retail outlets, as defined by the Act, have sev-
eral unique and substantial circumstances which inherently
distinguish these outlets from other public places and places
of employment. First, the product being sold necessarily pro-
duces the smoke that the Act is generally attempting to elimi-
nate. Second, a tobacco retail outlet’s purpose is to promote
“firsthand” exposure to tobacco smoke. Finally, the exemp-
tion’s prohibition on sales of other products demonstrates the
Legislature’s intent to limit the size and number of businesses
qualifying for the exemption.
1
Connelly v. City of Omaha, 284 Neb. 131, 816 N.W.2d 742 (2012); Sarpy
Cty. Farm Bureau v. Learning Community, 283 Neb. 212, 808 N.W.2d 598
(2012).
2
Neb. Rev. Stat. §§ 71-5716 to 71-5734 (Reissue 2009 & Cum. Supp.
2012).
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As the majority observes, under the Act, a tobacco retail
outlet sells only tobacco and products directly related to
­tobacco.3 And such products do not include alcohol, coffee,
soft drinks, candy, groceries, or gasoline.4 Thus, members of
the public who enter tobacco retail outlets necessarily do so
for the sole purpose of purchasing tobacco or products directly
related to tobacco.
These patrons have already chosen to expose themselves
to the risks of firsthand smoke. The Legislature could ratio-
nally determine that the dangers of secondhand smoke are
insignificant in comparison to the risk these patrons already
encounter firsthand. The exemption for tobacco retail outlets
is distinguishable from the exemptions this court found to be
unconstitutional special legislation in Hug v. City of Omaha.5
Unlike stand-alone bars, keno establishments, and horserac-
ing simulcast locations (and cigar bars in the present case),
there is no rationale for a patron to enter a tobacco retail
outlet other than to facilitate his or her access to firsthand
smoke. Such public places do not sell alcohol or offer other
forms of entertainment. They exist solely to facilitate patrons’
access to tobacco and its related risks. Thus, the purpose of
the Act in protecting the public from secondhand smoke is
contradicted by the nature of the product sold by tobacco
retail outlets.
Additionally, the Legislature could rationally conclude
that the narrow scope of the exemption makes it less likely
that nonsmokers, including potential nonsmoking employees,
would be exposed to secondhand smoke. By limiting the
definition of tobacco retail outlets to establishments that sell
only tobacco and products directly related to tobacco, the text
demonstrates that the Legislature intended this as a very lim-
ited exemption.
The Legislature was not required to “choose between attack-
ing every aspect of the problem or not attacking the problem
3
See § 71-5728.
4
See id.
5
Hug v. City of Omaha, 275 Neb. 820, 749 N.W.2d 884 (2008).
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at all.”6 This principle, which the majority quotes in upholding
the guestrooms exemption, also applies to the tobacco retail
outlets exemption. As to guestrooms, the majority concedes
that secondhand smoke is equally harmful in public and private
places. The majority also concedes that this was a legitimate
policy decision. And the majority recognizes a “logical basis
. . . to conclude that guestrooms are akin to private resi-
dences.” In enacting the tobacco retail outlets exemption, the
Legislature merely limited the otherwise broad reach of the
Act from locations already dominated by the much greater risk
of firsthand smoke. Given the mandate to resolve reasonable
doubts in favor of the legislation, I would conclude that this
was an equally legitimate policy decision.
I recognize that the exemption may not be perfect, in that
some nonsmokers may be exposed to secondhand smoke. But
the Legislature is presumed to have acted within its constitu-
tional power despite that, in practice, its laws may result in
some inequality.7 When I apply the principles of law articulated
by the majority, I conclude that there is at least a reasonable
doubt whether the exemption is unconstitutional. Thus, those
principles require that I uphold the exemption despite my
personal distaste for or objection to firsthand or secondhand
tobacco smoke. I therefore respectfully dissent from the portion
of the court’s opinion finding the tobacco retail outlets exemp-
tion unconstitutional.
Pirtle, Judge, joins in this dissent.
6
See Bergan Mercy Health Sys. v. Haven, 260 Neb. 846, 856, 620 N.W.2d
339, 347 (2000).
7
See Connelly, supra note 1.