Administrative Appeals

• Publication year: 2021

76 Nebraska L. Rev. 204. Administrative Appeals

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The Jurisdiction of Administrative Appeals in Nebraska: A One-Way Ticket, No Returns, No Transfers in Metro Renovation, Inc. v. Department of Labor, 249 Neb. 337, 543 N.W.2d 715 (1996)

TABLE OF CONTENTS

I. Introduction 204

II. Jurisdiction Cases Prior to Metro 206

III. The Jurisdictional Holding in Metro 209

IV. The Model Administrative Procedure Act 212

V. The Constitutionality of Nebraska's Statutory Scheme. 215

VI. How to Resolve the Problem of the One-Way Ticket 219

I. INTRODUCTION

The Nebraska Supreme Court's decision in Metro Renovation, Inc. v. Department of Labor drew immediate public response because of the court placed limitations on the precedential value of Nebraska Court of Appeals' decisions.(fn1) This Note deals with the less controversial first section of the opinion. The first issue discussed in Metro concerned whether or not the district court where the case was filed had jurisdiction over the administrative appeal.(fn2) In Metro, the plaintiff's claim involved an administrative appeal brought under section 84-917 of the Nebraska Code, which confers jurisdiction in only one district court, that is, the court "where the action

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was taken."(fn3) Metro sets forth a two-part test to determine exactly which administrative actions grant a district court jurisdiction over an administrative appeal.(fn4) While jurisdictional issues may not always be newsworthy, the practical impact of the Metro jurisdictional test can be devastating for certain litigants.

For example, imagine a hypothetical case where local parents want to challenge a school policy at a Scotts Bluff high school. The parents claim that the policy discriminates against female students. These parents bring a request to change the school's policy before the local school board, which denies the request. The parents appeal to the State Board of Education in Lincoln. The request again is denied. The parents' lawyer files an appeal under section 84-917 in the Scotts Bluff County District Court. After reviewing the record, the district court sustains the State Board's determination. The parents then appeal to the Nebraska Supreme Court.

The Nebraska Supreme Court, in turn, dismisses the case for lack of jurisdiction. Why? Because the parents' lawyer incorrectly filed the initial appeal in Scotts Bluff District Court. According to the supreme court's interpretation of section 84-917(2)(a), the appeal initially should have been filed in the Lancaster County District Court, the site of the State Board decision, because this decision was the "action" conferring jurisdiction. The parties are not allowed to waive jurisdiction.(fn5) The parents cannot refile their appeal because section 84-917(2)(a) allows only 30 days to file an appeal after the State Board's decision.(fn6)Thus, the decision in this hypothetical case is final.

Sadder but wiser, the lawyer accepts another case involving an administrative appeal. This time the client is challenging a decision by the State Board of Mental Health. The Board conducts a fact-finding hearing in Omaha. The Board's decision is adverse to the client's interests, and the client appeals to the Director of the State Mental Health Board in Lincoln. The Director then affirms the Board's decision. The lawyer confidently files the administrative appeal under section 84-917 in Lancaster County District Court, the location of the appeal determination by the Health Board Director. Unfortunately, this time the Nebraska Supreme Court holds that the appeal should have been filed in the Douglas County District Court in Omaha, where the fact-finding hearing was held. In this hypothetical, the fact-find

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ing hearing was the "action" conferring jurisdiction. Again the case is dismissed.

Can the same statute yield such inconsistent results? Unfortunately, the answer is yes. In Metro, the Nebraska Supreme Court reaffirmed the rule that jurisdiction of an administrative appeal is proper at "the site of the first adjudicated hearing of a disputed claim."(fn7) The language of section 84-917(2)(a) itself does not contain the language used by the Metro court. Instead, the statute states that the petition to file an administrative appeal shall be filed "in the district court of the county where the action is taken."(fn8) The statute, however, fails to specify what administrative agency "action" is contemplated.(fn9) Thus, the Nebraska Supreme Court has stepped in and supplied the definition.

Section 84-917, adopted in 1963, is part of the Administrative Procedure Act, which sets out the judicial processes that apply to state administrative agencies.(fn10) A common issue when discussing jurisdiction in administrative law is whether an agency is acting within its "jurisdiction" or scope of authority. This Note does not deal with the jurisdiction of the administrative agency, but rather jurisdiction for judicial review of administrative decisions. This Note first will trace the history of the Metro jurisdictional test and then will compare the Metro test with the Model Administrative Procedure Act and other states' approaches to the jurisdiction of administrative appeals. Next, this Note will explain how the current test is unconstitutional, and will suggest some alternatives to the Metro test.

II. JURISDICTION CASES PRIOR TO METRO

The Nebraska Supreme Court has been called upon more than once to decide which district court has jurisdiction over an administrative appeal brought under section 84-917.(fn11) In Metro, the supreme court ties together all the previous cases with one consistent rule. Before discussing the facts of Metro, however, a brief synopsis of the prior cases will help to set the stage.

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The first case to raise the question of district court jurisdiction over an administrative appeal was Flamingo, Inc. v. Nebraska Liquor Control Commission.(fn12) After a hearing in Lincoln, the State Liquor Commission suspended Flamingo's liquor license. The plaintiff appealed the Commission's decision under section 53-1,116 of the Ne-braska Code.(fn13) The plaintiff filed his appeal in Dakota County, where he resided. The Commission made a special appearance to object to the jurisdiction of the district court, asserting that jurisdiction was proper only in Lancaster County District Court, where the Commission's action was taken. The plaintiff, on the other hand, asserted that jurisdiction was proper in Dakota County under section 53-1,116, which stated that the Commissioner's decision could be reviewed by "the district court where . . . the licensee resides."(fn14) The Commission pointed out that section 53-1,116 dealt with license revocations, but not license suspensions. The Commission argued that because section 53-1,116 did not apply, section 84-917(2)(a) governed the jurisdictional requirements and required an appeal to be filed in the County where the decision, and therefore the action, took place. The Nebraska Supreme Court, agreeing with the Commission, noted that both the hearing and final decision took place in Lincoln. Thus "the action was taken in Lancaster County."(fn15) The court dismissed the case for lack of jurisdiction.

The second case to raise the jurisdiction question was Downer v. Ihms.(fn16) In Downer, the Department of Public Welfare terminated the plaintiff's disability benefits. The Department concluded, after a hearing in Scotts Bluff, that the plaintiff was no longer disabled. In Lincoln, the Director of the Department of Public Welfare affirmed the decision. The plaintiff then filed a petition in error, rather than an administrative appeal, in the District Court of Scotts Bluff, where he resided. In his motion, the plaintiff stated that judicial review under section 84-917 was unavailable to him because financial constraints impeded his ability to file his appeal in Lancaster County, which was a substantial distance from his home in Scotts Bluff, as required under section 84-917(2).(fn17) The Commission filed a special appearance, as in Flamingo.(fn18) This appearance was sustained by the district

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court, which held that the plaintiff had filed in the wrong district court. The plaintiff appealed to the Nebraska Supreme Court.

The supreme court held that regardless of whether the claim had been brought as a petition in error or as an administrative appeal under section 84-917, jurisdiction was proper in Scotts Bluff. The court turned to the regulations of the Department of Public Welfare to define "where the action was taken" according to section 84-917(2). The court concluded that the Department regulations allowed appeal forms to be filed in the plaintiff's county of residence. Further, the court found that the hearings were conducted in the county of residence and the Director's final order constituted the sole activity conducted outside of Scotts Bluff, the plaintiff's county of residence. Based on these findings, the supreme court concluded that "action was taken" in Scotts Bluff.(fn19) The case was still dismissed, however, because the plaintiff failed to file the required copy of the record from the Department proceedings with the appeal petition.(fn20)

The third case is Keya Paha County High School District v. State Board of Education.(fn21) In Keya Paha, parents who resided in Ne-braska requested that the Nebraska school board pay tuition for their children to attend South Dakota schools. Their request was pursuant to a statute requiring the Keya Paha School Board to pay out-of-state tuition for Nebraska school children, depending on the location of the children's home in relation to the out-of-state school.(fn22) The school board denied the request and the parents appealed to the State Department of Education in Lincoln. The Department ordered the school district to pay the tuition. The Keya...