Abay, L.L.C. v. Nebraska Liquor Control Comm., 303 Neb. 214

Abay, L.L.C. applied in 2017 for a Class D packaged liquor license for a convenience store in Omaha; Omaha City Council recommended denial after requesting licensee accept conditions limiting single-can beer sales and distilled spirits under 375 ml, which Abay refused.
The Nebraska Liquor Control Commission (Commission) granted the license but imposed two conditions: no single-can sales and no spirits/wine sales under .375 (as interpreted by later proceedings).
Abay appealed the Commission’s order to the Lancaster County District Court under the Administrative Procedure Act; the district court conducted a de novo review on the agency record.
The district court found competent record evidence supporting that the conditions were adopted from the city council’s recommendation, construed the spirits restriction as 375 ml, and held the Commission had statutory authority to impose reasonable license conditions.
Abay appealed to the Nebraska Supreme Court, arguing the Commission lacks authority to impose conditions and that the imposed conditions were arbitrary, unreasonable, and vague.

Issue	Abay's Argument	Nebraska/Commission's Argument	Held
Whether the Commission may impose conditions on a liquor license	Commission can only grant or deny a license; cannot condition it	Statute and precedent vest broad regulatory authority in the Commission to prescribe conditions to protect public health, safety, and temperance	Commission has authority to impose reasonable conditions on licenses
Whether the specific conditions (no single-can sales; no spirits/wine < .375) are lawful and reasonable	Conditions are arbitrary, vague, and outside Commission power	Conditions respond to local litter/loitering/quality-of-life concerns and were reasonable	Conditions were reasonable, not arbitrary or capricious, and supported by competent evidence
Whether district court erred by interpreting Commission order to refer to 375 ml	Court modified/expanded the Commission order without authority; ambiguity makes restriction invalid	District court properly read the record and local recommendation; it had authority to clarify/modify under de novo review	District court permissibly interpreted the order as 375 ml; modification was within its authority
Standard of review for judicial challenge to Commission order	(Implicit) Defer to Commission’s factual findings	District court reviews de novo on the record; appellate review examines law and record for errors	District court’s factual findings were supported by competent evidence; appellate court affirms under APA standards

Gas ’N Shop v. Nebraska Liquor Control Comm., 229 Neb. 530 (discusses state power to regulate and condition alcohol sales)
Major Liquors, Inc. v. City of Omaha, 188 Neb. 628 (same principle on state regulatory discretion over intoxicants)
F & T, Inc. v. Nebraska Liquor Control Comm., 7 Neb. App. 973 (Court of Appeals recognizing Commission’s authority to impose conditions)
City of Omaha v. C.A. Howell, Inc., 20 Neb. App. 711 (followed F & T’s recognition of Commission powers)
Schwarting v. Nebraska Liq. Cont. Comm., 271 Neb. 346 (describes de novo district court review on agency record)
Jolly v. State, 252 Neb. 289 (administrative bodies have only statutory authority; courts constrained to statutory grant)
State v. Coble, 299 Neb. 434 (legislative acquiescence to judicial construction where statute unchanged)