Medicine Creek v. Middle Republican NRD
296 Neb. 1
| Neb. | 2017Background
- Medicine Creek LLC requested a variance from the Middle Republican Natural Resources District’s (MRNRD) moratorium on new well drilling; MRNRD denied the variance after a formal adjudicatory hearing.
- MRNRD’s rules required a formal hearing (advertised) for variance requests and allowed assessing fees for administrative costs.
- Medicine Creek appealed the denial to the Frontier County District Court under Neb. Rev. Stat. § 46-750 and the Administrative Procedure Act (APA).
- The district court received the agency record, took substantial additional evidence (100 exhibits and live testimony), and concluded MRNRD’s decision was unsupported by evidence and arbitrary; it ordered MRNRD to grant the variance.
- MRNRD appealed, arguing the district court applied the wrong standard of review (used the narrow “errors appearing on the record” standard instead of de novo review on the agency record). The Supreme Court found plain error, reversed, and remanded for proper de novo review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MRNRD’s denial of a variance is judicially reviewable | Medicine Creek: denial is appealable under § 46-750; MRNRD held a judicial-style hearing | Amicus/MRNRD: variance denial is ministerial/legislative and not subject to APA review | Held: Denial was judicial in nature (formal hearing, evidence received) and was appealable under § 46-750 |
| Proper standard of review for the district court on appeal from NRD | Medicine Creek: argued district court should review for errors on the record (as interpreted by district court) | MRNRD: district court must conduct de novo review on the NRD record per APA and precedent | Held: District court erred—its role is de novo review on the agency record; it used the wrong, narrower standard (plain error) |
| Whether district court could receive additional evidence beyond agency record | Medicine Creek: introduced extra exhibits and live testimony at district court | MRNRD: APA prohibits receiving extra evidence in district court review on the record | Held: APA does not authorize the district court to receive additional evidence; review must be de novo on the existing agency record |
| Remedy when the district court applies wrong standard of review | Medicine Creek: benefits from court’s reversal ordering variance | MRNRD: reversal and remand needed for proper de novo review | Held: Because use of wrong standard was plain error, Supreme Court reversed and remanded for the district court to redo the de novo review on the NRD record; did not reach constitutional claims on cross-appeal |
Key Cases Cited
- Wagoner v. Central Platte Nat. Resources Dist., 247 Neb. 233, 526 N.W.2d 422 (1995) (distinguishes standards: district court reviews NRD decisions de novo on the record; appellate review looks for errors appearing on the record)
- Kocontes v. McQuaid, 279 Neb. 335, 778 N.W.2d 410 (2010) (defines when an administrative body exercises judicial functions and what constitutes adjudicative facts)
- McNally v. City of Omaha, 273 Neb. 558, 731 N.W.2d 573 (2007) (board required to conduct hearings and receive evidence exercises judicial functions)
- Law Offices of Ronald J. Palagi v. Dolan, 251 Neb. 457, 558 N.W.2d 303 (1997) (prior decision remanding where district court used the limited standard instead of de novo review)