N'Da v. Golden: Clarifying Facial and As-Applied Constitutional Challenges to the Public Convenience and Necessity Requirement

Introduction

In N'Da v. Golden, 318 Neb. 680 (2025), the Nebraska Supreme Court addressed a challenge by Marc N’Da and his company, Dignity Non-Emergency Medical Transportation, Inc. (“Dignity NEMT”), to the statutory “public convenience and necessity” requirement in Neb. Rev. Stat. § 75-311. N’Da sought a declaratory judgment that subsections (1)(b) and (3) of § 75-311, which condition certification to provide nonemergency medical transport on a showing of public convenience and necessity, violated several provisions of the Nebraska Constitution. The district court rejected both facial and as-applied challenges. On appeal, the Supreme Court examined (1) whether declaratory relief was appropriate; (2) the proper standard for substantive due process review of economic regulations under the Nebraska Constitution; and (3) whether the “public convenience and necessity” requirement violates due process, the prohibition on special legislation, or the ban on irrevocable special privileges or immunities.

Summary of the Judgment

The Supreme Court affirmed in part and vacated in part. It held that:

Declaratory relief is appropriate for a facial constitutional challenge to § 75-311(1)(b) and (3) but not for an as-applied challenge, since applicants may raise as-applied objections in a PSC certification proceeding and appeal any denial.
The facial due process challenge fails under rational basis review because the “public convenience and necessity” requirement is rationally related to the legitimate state interest of ensuring reliable nonemergency medical transportation for the public (including vulnerable Medicaid recipients).
The facial challenge under the special legislation prohibition (Neb. Const. art. III, § 18) fails because the requirement does not create an arbitrary classification or a permanently closed class.
The facial challenge under the special privileges and immunities clause (Neb. Const. art. I, § 16) fails because the statute does not grant “irrevocable” private privileges or immunities—it is aimed at promoting the public interest.

Analysis

1. Appropriateness of Declaratory Relief

A declaratory judgment will lie to resolve a live controversy that is not otherwise ripe or convenient for traditional remedies. The Court reaffirmed:

Facial challenges—asserting a statute is always unconstitutional—cannot be raised in the same administrative proceeding in which the challenger simultaneously seeks benefits under that statute. Otherwise the positions and requested relief would be inconsistent.
As-applied challenges—arguing the statute is unconstitutional only in a particular application—can be raised in the certification process before the Nebraska Public Service Commission (PSC) and then appealed if the application is denied. That process is an “equally serviceable remedy,” so declaratory relief for as-applied challenges is inappropriate.

2. Due Process Challenge and Applicable Standard

Under Neb. Const. art. I, § 3, “[n]o person shall be deprived of life, liberty, or property, without due process of law.” Standard of Review: When a regulation neither impinges a fundamental right nor targets a suspect classification, it is evaluated under a rational basis test. The challenger must clearly establish that no conceivable rational relation exists between the law and a legitimate state purpose.

Application to § 75-311: Certifying nonemergency medical carriers is an economic regulation. The statute’s public convenience and necessity requirement is rationally related to Nebraska’s legitimate interest in maintaining a stable, reliable transportation infrastructure—particularly for elderly and disabled Medicaid recipients who rely on these services. Accordingly, the facial due process challenge fails.

3. Special Legislation Prohibition

Neb. Const. art. III, § 18 forbids “local or special laws” that (1) create arbitrary classifications or (2) produce a permanently closed class. Analysis: The “public convenience and necessity” requirement applies uniformly to any would-be carrier, without permanently excluding a category of applicants or bestowing arbitrary advantages on a discrete group. The statutory standard itself reflects a reasonable classification tied to the state’s interest in regulating market entry to serve public demand responsibly. The facial challenge under the special legislation ban fails.

4. Special Privileges and Immunities Clause

Neb. Const. art. I, § 16 bars “any irrevocable grant of special privileges or immunities.” Analysis: Section 75-311 certificates are not irrevocable grants—PSC certificates may be conditioned and revoked for cause. Moreover, the requirement is designed to promote public welfare by ensuring adequate service, rather than to confer a private, enduring monopoly on incumbents. The facial challenge under this clause therefore fails.

Precedents Cited

In re Application of Nebraskaland Leasing & Assocs. 254 Neb. 583, 578 N.W.2d 28 (1998): Statutory scheme for PSC certificates could not be simultaneously invoked and facially attacked in the same PSC proceeding.
State ex rel. Peterson v. Shively, 310 Neb. 1, 963 N.W.2d 508 (2021): Legislative acts carry a presumption of constitutionality; challengers bear the burden to clearly establish unconstitutionality.
Tymar v. Two Men and a Truck, 282 Neb. 692, 805 N.W.2d 648 (2011): Articulated the three-factor test for “public convenience and necessity.”
Malone v. City of Omaha, 294 Neb. 516, 883 N.W.2d 320 (2016): Economic regulations enjoy rational basis review absent a fundamental right or suspect class.
United States v. Salerno, 481 U.S. 739 (1987): Facial constitutional challenges require proof that no valid application of the statute exists.

Legal Reasoning

Distinction between facial and as-applied challenges: Constitutional challenges seeking universal invalidation must be raised in a standalone action; as-applied attacks belong in the administrative or certifying context with appellate review.
Substantive due process: Economic regulations are valid if any rational link to a legitimate government objective exists. Assuring continuity and quality of nonemergency medical transports is such an objective.
Special legislation: The statute applies broadly and uses reasonable classifications based on public need, not on granting closed privileges to incumbents.
Special privileges or immunities: Certificates are revocable regulatory instruments aimed at public benefit, not irrevocable private franchises.

Impact of the Judgment

This decision provides key guidance on how Nebraska courts will treat constitutional challenges to regulatory statutes:

Strict separation of facial and as-applied challenges, preserving administrative processes for as-applied claims.
Reaffirmation that substantive due process under the state Constitution aligns with federal rational basis review for economic regulation.
Clarification that Nebraska’s bans on special legislation and irrevocable privileges do not prevent well-tailored regulatory entry controls designed to protect public welfare.

Regulators, carriers, and challengers should expect that facial attacks to entry restrictions face a high threshold, while as-applied objections must be addressed through the PSC certification process and subsequent appeals.

Complex Concepts Simplified

Facial vs. As-Applied Challenge: Facial means “the law is always unconstitutional”; as-applied means “the law was unconstitutional in my specific case.”
Rational Basis Review: The weakest level of constitutional scrutiny. A regulation passes if it is not “arbitrary” and “makes logical sense” to achieve a government goal.
Public Convenience and Necessity: A rule that new transportation companies show they meet a public need before entering the market.
Special Legislation: The constitution forbids laws that create unfair classifications or permanently lock out challengers.
Special Privileges and Immunities: The constitution bans creating permanent, exclusive rights for private entities at the expense of competition.

Conclusion

N'Da v. Golden clarifies that in Nebraska:

Facial constitutional challenges to a statute’s validity belong in standalone actions, while as-applied objections should be aired in the administrative certification process and appealed.
The public convenience and necessity requirement in § 75-311 survives a facial due process attack under rational basis review and does not offend the special legislation or privileges and immunities bans.

This framework ensures both respect for legislative regulatory authority over economic activities and preservation of established administrative channels for resolving individual challenges to how those regulations are applied.