Facial and As-Applied Constitutional Challenges to “Public Convenience and Necessity” Requirements: N’Da v. Golden

Introduction

In N’Da v. Golden, 318 Neb. 680 (2025), the Nebraska Supreme Court addressed a declaratory-judgment action brought by M’Moupientila “Marc” N’Da and his company, Dignity Non-Emergency Medical Transportation, Inc., after the Nebraska Public Service Commission (PSC) denied their application for a certificate to provide nonemergency medical transportation. The plaintiffs challenged the “public convenience and necessity” requirement in Neb. Rev. Stat. § 75-311(1)(b) and (3) (Cum. Supp. 2024) as unconstitutional on its face and as applied to them, invoking Neb. Const. art. I, §§ 3 & 16, and art. III, § 18. The key issues were:

• Whether a declaratory-judgment action was the proper vehicle for a facial or an as-applied challenge to the statute;
• What standard of review applies to a substantive-due-process challenge to an economic regulation under the Nebraska Constitution;
• Whether the “public convenience and necessity” requirement survives rational-basis review;
• Whether the statute constitutes prohibited special legislation or an irrevocable grant of special privileges or immunities.

Summary of the Judgment

The Supreme Court held that:

1. A declaratory-judgment action is appropriate to resolve a facial challenge to § 75-311(1)(b) and (3), but an as-applied challenge must be raised in an application to the PSC (and an appeal from any denial), because that remedy is equally serviceable for as-applied claims.
2. The due process challenge under Neb. Const. art. I, § 3, is reviewed under rational-basis scrutiny (economic regulations need only be rationally related to a legitimate state interest), and the “public convenience and necessity” requirement satisfies that test in protecting the public’s interest in reliable medical-transportation services.
3. The special legislation clause (art. III, § 18) is not violated because the statute does not create an arbitrary classification or a permanently closed class—it applies uniformly to all applicants and rests on a substantial public-interest distinction.
4. The special privileges and immunities clause (art. I, § 16) is not violated because the statute neither makes an irrevocable grant of special privileges nor singles out private interests for permanent protection.

Accordingly, the district court’s rejection of facial constitutional challenges was affirmed, but its rulings on as-applied challenges were vacated for lack of appropriateness in a declaratory action.

Analysis

1. Precedents Cited

• In re Application of Nebraskaland Leasing & Assocs. (254 Neb. 583 (1998))—Plaintiffs invoking a statute may not in the same action seek its benefits and challenge its validity; distinguished here for facial vs. as-applied challenges.
• Adams v. State Board of Parole (293 Neb. 612 (2016))—Appellate courts review questions of law in declaratory actions de novo.
• State ex rel. Peterson v. Shively (310 Neb. 1 (2021))—Statutes carry a presumption of constitutionality; constitutional interpretation is a question of law.
• Tymar v. Two Men and a Truck (282 Neb. 692 (2011))—Standards for determining public convenience and necessity in PSC applications: public demand, adequacy of existing carriers, and effect on existing operations.
• Malone v. City of Omaha (294 Neb. 516 (2016)) and Connelly v. City of Omaha (284 Neb. 131 (2012))—Substantive-due-process analysis under Nebraska law aligns with rational-basis review for economic regulations.
• McKay v. Bartels (316 Neb. 235 (2024))—Declaratory and equitable relief require the absence of an equally serviceable remedy.

2. Legal Reasoning

a) Facial vs. As-Applied Challenges

The Court distinguished facial challenges—seeking to void a statute in all applications—from as-applied challenges—contending the statute is unconstitutional only in specific contexts. It clarified that a plaintiff may invoke a statute while pursuing an as-applied challenge in its enforcement, but cannot claim its benefits and simultaneously mount a facial challenge to its validity in the same application proceeding. Thus:

• Facial challenges to § 75-311(1)(b) and (3) are properly brought in a declaratory action.
• As-applied challenges belong in the administrative application to the PSC (and appeal), an equally serviceable remedy.

b) Substantive-Due-Process Standard

Under Neb. Const. art. I, § 3, economic regulations not impinging a fundamental right or suspect class are subject to rational-basis review: the regulation must be rationally related to a legitimate state interest. The Court rejected the appellants’ call for a “real and substantial”-relationship test as vestigial, reaffirming that federal and state substantive-due-process protections are coextensive in economic matters.

c) Application of Rational-Basis Review

The Court recognized the legislature’s interest in ensuring reliable nonemergency medical transportation and preventing market conditions that could deprive vulnerable consumers (e.g., Medicaid recipients) of service. The “public convenience and necessity” requirement was deemed rationally aimed at that legitimate public-health and welfare interest. Appellants’ misgivings about “protectionism” did not overcome the low bar of rational-basis review.

d) Special Legislation and Special Privileges Clauses

(i) Art. III, § 18 (Special Legislation): The Court held that § 75-311(1)(b) and (3) do not create an arbitrary classification or a closed class. All would-be providers must meet the same standards, and the line drawn serves a substantial public-interest purpose rather than private favoritism.

(ii) Art. I, § 16 (Special Privileges and Immunities): Because certificates may be revoked and the statute serves a public, not private, purpose, the requirement does not grant an irrevocable or exclusive privilege to any carrier.

3. Impact on Future Cases and Regulatory Practice

• Regulators and litigants will distinguish clearly between facial and as-applied constitutional challenges. Facial attacks on licensing statutes must be decided in declaratory actions, but as-applied challenges should be raised in the regulatory proceeding and appealed.

• Substantive-due-process challenges to economic regulations in Nebraska now rest firmly on rational-basis review. Any reversion to a “real and substantial”-relationship test appears unlikely absent new constitutional text or precedent.

• Licensing or certification schemes that require a public-interest showing will survive rational-basis scrutiny if they bear some plausible relation to public-health, safety, or welfare objectives.

• The distinction between “special legislation” and legitimate public-interest classifications narrows baseless attacks on statutes that uniformly impose standards on regulated actors.

Complex Concepts Simplified

• Facial vs. As-Applied Challenge: A facial challenge says “this law is always unconstitutional”; an as-applied challenge says “this law is unconstitutional when used against me.”
• Rational-Basis Review: Courts ask only whether the law is logically connected to some legitimate government goal; this is a highly deferential test.
• Public Convenience and Necessity: A standard requiring regulators to ensure a new service fills a public need and does not destabilize existing service to the public.
• Special Legislation Clause: Forbids laws granting arbitrary or closed-class advantages that serve private interests rather than the public good.
• Special Privileges Clause: Prohibits irrevocable grants of exclusive privileges or immunities to private parties.

Conclusion

N’Da v. Golden clarifies that facial constitutional challenges to licensing statutes must be brought in declaratory actions, whereas as-applied challenges belong in the underlying administrative process. It reaffirms that economic regulations under Nebraska’s Constitution are reviewed under rational-basis scrutiny and that public-interest licensing criteria survive such review so long as they have a plausible relation to public health, safety, or welfare. Finally, it underscores that uniform regulatory standards do not offend Nebraska’s prohibitions on special legislation or special privileges so long as they serve a substantial public purpose rather than private favoritism.