Amend v. Nebraska Pub. Serv. Comm.
905 N.W.2d 551
Neb.2018Background
- Over 30 farmers (appellants) sold grain to Pierce Grain Elevator, Inc. (PEI), which failed in March 2014, causing appellants >$2.56 million in losses.
- Nebraska Public Service Commission (PSC) conducted a July 2013 compliance review showing PEI deeply insolvent; PSC contacted PEI’s bank but took no further action until license termination in March 2014.
- Appellants sued the PSC under the State Tort Claims Act (STCA), alleging negligent failure to enforce statutory/regulatory financial requirements and to initiate complaint proceedings under PSC rules (291 Neb. Admin. Code ch. 8 §003.07).
- District court granted PSC’s motion to dismiss for lack of subject-matter jurisdiction, holding appellants’ claims fell within STCA exceptions: (1) failure to suspend/revoke a license and (2) the discretionary-function exception. Complaint dismissed with prejudice.
- Nebraska Supreme Court reviewed de novo, addressed whether STCA exceptions are affirmative defenses, whether PSC is a state agency under STCA, and whether appellants’ claims are barred by STCA exceptions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether STCA exceptions are affirmative defenses that must be pled | Appellants: exceptions are affirmative defenses the State must plead and prove | PSC: exceptions can be raised by motion or on appeal; courts can consider sua sponte | Court: exceptions are jurisdictional and may be raised by State or court on appeal (Davis controls) |
| Whether PSC is a "state agency" under STCA | Appellants: STCA covers PSC actions alleged here | PSC: implicitly conceded applicability; argued immunity applies | Court: PSC is a state agency for STCA purposes because its authority over grain warehouses is statutory |
| Whether claims are barred by the "failure to suspend or revoke a license" exception (§81-8,219(8)) | Appellants: claims target failure to institute complaint proceedings and enforcement, not directly license suspension/revocation | PSC: instituting complaints would lead to suspension/revocation; claims are grounded in failure to suspend/revoke | Court: Held appellants’ allegations are "inextricably linked" to failure to suspend or revoke a license; claims barred by §81-8,219(8) |
| Whether dismissal should have been without prejudice or with leave to amend | Appellants: dismissal without leave to amend was error | PSC: lack of subject-matter jurisdiction renders amendment futile | Court: Amendment futile because jurisdictional bar applies; dismissal with prejudice affirmed |
Key Cases Cited
- Salem Grain Co. v. Consolidated Grain & Barge Co., 297 Neb. 682, 900 N.W.2d 909 (Neb. 2017) (jurisdictional analysis precedent cited)
- Davis v. State, 297 Neb. 955, 902 N.W.2d 165 (Neb. 2017) (STCA exceptions are jurisdictional and may be raised on appeal or sua sponte)
- Jill B. & Travis B. v. State, 297 Neb. 57, 899 N.W.2d 241 (Neb. 2017) (strict construction of waivers of sovereign immunity)
- D.K. Buskirk & Sons v. State, 252 Neb. 84, 560 N.W.2d 462 (Neb. 1997) (application of STCA to state agencies)
- Edelman v. Jordan, 415 U.S. 651 (U.S. 1974) (Eleventh Amendment sovereign immunity principles)