Marion's v. Nebraska Dept. of Health & Human Servs., 858 N.W.2d 178

Marion’s Quality Services, Inc. operated a large licensed child care center (the Center) and held a separate family child care home license (the Home); DHHS revoked both licenses in 2011 (Home) and sought revocation or other sanctions for the Center.
The Center had a history of prior probations and citations for staffing, supervision, and discipline problems; it was on probation beginning March 14, 2011.
Two incarcerated persons on work-release (Tays and Johnson) were employed at the Center and had felony convictions (including theft by deception and methamphetamine possession); Marion’s relied on employee self-reported “Felony/Misdemeanor Statements” and did not request further law-enforcement verification.
DHHS found Marion’s violated licensing regulations by failing to request additional criminal-history information and by allowing persons convicted of moral turpitude and controlled-substance offenses on premises; DHHS revoked the Home’s license and imposed probation plus a civil penalty on the Center.
Marion’s administratively appealed; DHHS upheld revocation for the Home and imposed probation/civil sanction for the Center; the district court reviewed de novo and affirmed DHHS; Marion’s appealed to the Nebraska Supreme Court.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether DHHS lawfully sanctioned the Center for violating licensing regs while on probation	Marion’s: it complied with regs and was not required to obtain additional law-enforcement checks beyond applicant statements	DHHS: center had duty under ch. 8 § 006 to request additional info and violated ch. 8 § 002 by permitting persons convicted of moral turpitude/controlled-substance offenses on premises	Court: affirmed — Marion’s had duty to verify and violated regs; sanctions appropriate
Whether DHHS lawfully revoked the Home’s license / denied amendment	Marion’s: Home inactive; no injury occurred; violations elsewhere shouldn’t justify revocation/denial here	DHHS: applicant’s unwillingness/inability to comply and conduct at other centers justified denial/revocation under licensing regs	Court: affirmed — sufficient evidence Home’s application could be denied due to unwillingness/inability to comply

Kerford Limestone Co. v. Nebraska Dept. of Rev., 287 Neb. 653, 844 N.W.2d 276 (Neb. 2014) (standard for appellate review of district court orders under the APA)
Betterman v. Department of Motor Vehicles, 273 Neb. 178, 728 N.W.2d 570 (Neb. 2007) (review examines conformity to law, evidence support, and whether action is arbitrary or unreasonable)
Belle Terrace v. State, 274 Neb. 612, 742 N.W.2d 237 (Neb. 2007) (deference afforded to agency interpretation of its own regulations)
Fleming v. Civil Serv. Comm. of Douglas County, 280 Neb. 1014, 792 N.W.2d 871 (Neb. 2011) (sufficiency of evidence standard for administrative findings)
Hickey v. Civil Serv. Comm. of Douglas County, 274 Neb. 554, 741 N.W.2d 649 (Neb. 2007) (agency action arbitrary and capricious when taken in disregard of facts)
Hruby v. Kalina, 228 Neb. 713, 424 N.W.2d 130 (Neb. 1988) (theft and larceny generally involve moral turpitude)