State ex rel. Seeman v. Lower Republican NRD
319 Neb. 681 (2025)
Rule of Law:
Due process requires a natural resources district to provide notice reasonably calculated to inform a corporate landowner of administrative proceedings affecting its certified irrigated acres, otherwise the resulting order is void; however, a reduction of irrigated acres completed before an individual acquires an interest in the real estate is not affected by that acquisition.
Facts:
- Gerald Schluntz and his daughters, Julie Smith and Tamara Bishop, owned or operated farmland within the Lower Republican Natural Resources District (LRNRD) boundaries.
- During an inspection, LRNRD personnel discovered tampering devices on water flow meters on wells on the Schluntzes' property.
- On August 3, 2016, LRNRD issued a 'Notice of Intent to Issue Cease and Desist Order and Impose Penalties' to the Schluntzes, stating its intent to seek permanent forfeiture of certified irrigated acres.
- The Notice of Intent was served via certified mail on each of the Schluntzes.
- Gerald Schluntz died on August 13, 2016, two days before LRNRD scheduled a public hearing.
- SBS Farms, Inc. (SBS) owned some of the real property affected by the tampering allegations and LRNRD's subsequent order, but was not named as a party in the proceedings nor served with notice.
- At the time LRNRD initiated its proceedings, Steve Seeman had no ownership interest in the real property that would later be affected by the LRNRD order.
- Steve Seeman acquired ownership of some of the affected real estate through distribution from Schluntz’s estate on December 26, 2018, which was after LRNRD’s administrative proceeding concluded and associated appeals were dismissed.
Procedural Posture:
- The Lower Republican Natural Resources District (LRNRD) issued a cease-and-desist order (the 2017 order) against the Schluntzes, permanently forfeiting certified irrigated acres and future allocations due to flow meter tampering.
- The Schluntzes attempted to obtain review of the 2017 order by filing a petition in the district court for Furnas County.
- The district court for Furnas County concluded it did not have subject matter jurisdiction because all hearings regarding the 2017 order were held in Harlan County, and thus sustained LRNRD's motion to dismiss.
- The Nebraska Supreme Court affirmed the dismissal by the Furnas County district court on subject matter jurisdiction grounds.
- Years later, in 2023, Steve Seeman filed a 'Motion & Complaint for Peremptory Writ of Mandamus' in the district court for Harlan County against each member of the board of directors of LRNRD and its general manager.
- On the same day, in a separate case, SBS Farms, Inc., and its president filed a substantially similar mandamus complaint in the district court for Harlan County.
- The district court for Harlan County dismissed separate declaratory judgment actions but granted the mandamus relief sought by both Seeman and SBS Farms, Inc.
- The district court subsequently sustained the board’s motion to alter or amend the judgment 'to add clarifying language' to the writ, granting mandamus relief and attorney fees.
- In each case, the board filed an appeal and Seeman and SBS Farms, Inc., filed cross-appeals, which were moved from the Nebraska Court of Appeals to the Nebraska Supreme Court docket.
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Issue:
1. Does an administrative order issued by a natural resources district, reducing a corporation's certified irrigated acres, violate due process and render the order void as to the corporation if the corporation was not provided notice reasonably calculated to inform it of the proceeding? 2. Is an administrative order reducing certified irrigated acres void as to an individual who acquires an interest in the real estate after the administrative proceeding and any appeals have concluded?
Opinions:
Majority - Cassel, J.
1. Yes, the administrative order reducing SBS Farms, Inc.'s certified irrigated acres is void as to SBS because the corporation was not provided notice reasonably calculated to inform it of the subject and issues involved in the proceeding, thereby violating due process. The court reasoned that SBS was a 'person' under the Nebraska Ground Water Management and Protection Act (Act) and was affected by the contemplated cease-and-desist order. Due process requires notice reasonably calculated to inform the party of the subject and issues involved in the proceeding when a property interest, such as the use of ground water, is at stake. Although county assessor reports indicated SBS owned affected property and shared a mailing address with the Schluntzes, neither the Notice of Intent nor the notice of hearing was addressed to or served upon SBS, nor did the published notice specifically mention SBS. The court found no evidence that Schluntz represented himself as president of SBS to LRNRD for notice purposes. Therefore, LRNRD failed to acquire personal jurisdiction over SBS, rendering the 2017 order void as to it. Because the order was void, the LRNRD officials had a ministerial duty not to enforce it against SBS. However, sovereign immunity precludes relief compelling affirmative action, so the district court's judgment was modified to limit the relief to restraining enforcement. 2. No, an administrative order reducing certified irrigated acres is not void as to an individual who acquires an interest in the real estate after the administrative proceeding and any appeals have concluded. The court reasoned that Seeman had no interest in the real property at issue when LRNRD initiated its proceedings. He acquired title from Schluntz's estate in December 2018, long after the LRNRD proceedings concluded and the attempted appeals were dismissed. Seeman's claim implicitly attacks Neb. Rev. Stat. § 46-746(1), which authorizes the reduction of certified irrigated acres as a penalty. The court held that a reduction of irrigated acres completed before a person acquires an interest in the real estate is not affected by the acquisition of such interest. By taking the position that he owned no interest before December 2018, Seeman effectively conceded he lacked standing to challenge the order until after that date, at which point the decertification was already complete. He failed to clearly and conclusively show entitlement to relief. The court also rejected the notion that the order's invalidity as to SBS automatically rendered it void as to Seeman, as the order affected distinct parcels of real estate. The court also denied Seeman's cross-appeal argument that the order was an unlawful perpetual restraint, noting the Act authorizes such penalties and LRNRD rules provide a process to seek recertification. Consequently, the award of attorney fees to Seeman was reversed, while the award to SBS was affirmed.
Analysis:
This case clarifies the stringent due process notice requirements for administrative agencies, particularly when property rights of corporate entities are impacted by administrative actions like the reduction of certified irrigated acres. It emphasizes that general notice to individuals connected to a corporation, or general publication, is insufficient to establish jurisdiction over the corporation itself. Furthermore, the ruling delineates the effect of administrative orders on subsequent purchasers of affected land, establishing that new ownership does not negate a prior, properly completed decertification under specific statutory provisions. The decision also reinforces the limits of sovereign immunity in mandamus actions, distinguishing between actions that compel affirmative acts and those that merely restrain illegal or void actions by state officials. This serves as a critical guide for both administrative agencies in ensuring procedural fairness and for landowners in understanding their rights and the implications of land transfers.
