Prokop v. Lower Loup Natural Res. Dist., 921 N.W.2d 375

Background

Prokop, a long-time irrigator in the Lower Loup Natural Resources District (LLNRD), failed to provide complete annual groundwater management reports for 2015 and 2016 (missing actual crop yield, nitrogen, irrigation data, signatures; 2016 was late). He had a prior 2013 enforcement action for similar reporting failures.
LLNRD’s Phase III rules require operators to submit annual reports on forms that request actual crop yield and other field data; Rule 2 authorizes enforcement by cease-and-desist orders.
LLNRD served notice, held a May 25, 2017 hearing, then issued a cease-and-desist order (served July 6, 2017) suspending Prokop’s groundwater irrigation for four years (2018–2021) unless he complied with reporting requirements.
Prokop appealed to district court under the Administrative Procedure Act (APA), proffered two extra-record affidavits the court excluded, and argued lack of authority, due process violations, and a taking without compensation.
The district court affirmed LLNRD’s authority and procedures but reduced the suspension from 4 years to 1 year (with up to 3 additional years for continued noncompliance). The Supreme Court of Nebraska affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Authority to require actual crop-yield data on annual reports	Prokop: Rule 7 doesn’t authorize collection of "actual crop yield" because it’s not an "operation" and wasn’t explicitly listed	LLNRD: "Other field operations" reasonably includes actual yield; yield data is relevant to nitrogen accounting and GWMPA objectives	Court: LLNRD’s interpretation is reasonable and not plainly erroneous; LLNRD may require actual yield data
Authority to impose suspension of groundwater access as penalty	Prokop: §46-746(1) requires NRD rules to specify available penalties; LLNRD lacked explicit rule authorizing suspension	LLNRD: Statute itself authorizes penalties including reduction of allocations; rule 2 provides enforcement procedure	Court: Statute authorizes penalties (including suspension) and LLNRD need not restate that penalty in its rules; suspension authority exists
Procedural due process and notice (including notice of evidence and prior case use)	Prokop: Notice did not identify specific deficiencies or evidence; no prehearing disclosure limited his ability to prepare; prior case should have been disclosed	LLNRD: Notice sufficiently alleged failure to submit "timely and complete" reports; missing items were apparent on report forms; no statutory prehearing discovery or evidence-disclosure requirement	Court: Notice was reasonably calculated to inform Prokop of allegations; LLNRD not required to provide prehearing disclosure of evidence; use of prior case was foreseeable and permissible
Takings / police power (suspension = taking)	Prokop: Suspension of groundwater use is a taking requiring just compensation	LLNRD: Suspension enacted under police power to protect public health; rule/report compliance furthers GWMPA public-welfare goals	Court: Groundwater use is subject to state police power; limitation to prevent public-harm is a legitimate exercise of police power, not a compensable taking

Key Cases Cited

Medicine Creek LLC v. Middle Republican NRD, 296 Neb. 1, 892 N.W.2d 74 (Neb. 2017) (standards for judicial review of NRD actions under the APA)
Loup City Pub. Sch. v. Nebraska Dept. of Rev., 252 Neb. 387, 562 N.W.2d 551 (Neb. 1997) (statutory mandate to promulgate rules when statute requires)
Goodyear Tire & Rubber Co. v. State, 275 Neb. 594, 748 N.W.2d 42 (Neb. 2008) (interpretation of when agency must promulgate rules necessary to carry out statutory purposes)
Blanchard v. City of Ralston, 251 Neb. 706, 559 N.W.2d 735 (Neb. 1997) (due process requires meaningful notice of specific problems so owner can prepare and defend)
Cain v. Custer County Board of Equalization, 298 Neb. 834, 906 N.W.2d 285 (Neb. 2018) (administrative adjudication need not provide all procedures of a judicial proceeding; due process baseline requirements explained)