Amend v. Nebraska Pub. Serv. Comm.
298 Neb. 617
| Neb. | 2018Background
- Over 30 farmers (appellants) deposited grain with Pierce Grain Elevator, Inc. (PEI), which failed in March 2014, causing appellants ~ $2.56 million in losses.
- PSC performed a July 2013 compliance review showing PEI deeply insolvent (negative owner equity and working capital), contacted PEI’s bank, but took no further enforcement steps before PEI continued to operate.
- PSC terminated PEI’s licenses on March 5, 2014; appellants allege earlier enforcement (per PSC rules) would have prevented their losses.
- Appellants sued the Nebraska Public Service Commission (PSC) under the State Tort Claims Act (STCA), alleging negligent failure to enforce statutes/regulations and to institute complaint proceedings under PSC rules (291 Neb. Admin. Code ch. 8 § 003.07).
- The district court dismissed under Neb. Ct. R. Pldg. § 6-1112(b)(1), holding the STCA’s “failure to suspend or revoke a license” exception (§ 81-8,219(8)) and the discretionary function exception precluded the suit; the Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether STCA exceptions are affirmative defenses the State must plead | Appellants: exceptions are affirmative defenses the State must plead and prove | PSC: exceptions can be raised on appeal or sua sponte; district court may consider them | Held: Exceptions to STCA are jurisdictional and may be raised by the State on appeal or by the court sua sponte (Davis governs) |
| Whether PSC is a “state agency” under the STCA | Appellants: PSC regulation of grain falls within STCA applicability | PSC: (did not dispute applicability); argued dismissal proper | Held: PSC is a state agency for STCA purposes because its authority over grain warehouses is statutory |
| Whether appellants’ claims are barred by § 81-8,219(8) (failure to suspend/revoke license) | Appellants: claims allege failure to institute complaint proceedings and notice duties, not a failure to revoke or suspend a license | PSC: instituting complaint proceedings would naturally lead to suspension/revocation; gravamen of complaint is failure to suspend/revoke | Held: Claims are grounded in the failure to suspend or revoke a license and are barred by § 81-8,219(8) |
| Whether dismissal without leave to amend was erroneous | Appellants: should be allowed to amend complaint | PSC: dismissal appropriate because exceptions deprive court of subject matter jurisdiction | Held: Dismissal without leave to amend affirmed because lack of subject matter jurisdiction makes amendment futile |
Key Cases Cited
- Davis v. State, 297 Neb. 955, 902 N.W.2d 165 (Neb. 2017) (exceptions to STCA waiver may be raised on appeal or considered sua sponte)
- Jill B. & Travis B. v. State, 297 Neb. 57, 899 N.W.2d 241 (Neb. 2017) (discussing strict construction of statutes waiving sovereign immunity)
- Salem Grain Co. v. Consolidated Grain & Barge Co., 297 Neb. 682, 900 N.W.2d 909 (Neb. 2017) (procedural precedent cited for review standards)
- Shipley v. Department of Roads, 283 Neb. 832, 813 N.W.2d 455 (Neb. 2012) (interpreting STCA exceptions and gravamen-of-the-complaint test)