A judge has dismissed a legal malpractice lawsuit filed by the owners of Whiteclay's four former beer stores who lost their liquor licenses in 2017, forcing them to close.
The owners of the Arrowhead Inn, State Line Liquor, D&S Pioneer Service and Jumping Eagle Inn sued their former attorney, Andrew Snyder, for $2.1 million saying they lost their appeal because he hadn't notified citizen objectors.
Before they were shuttered, the four stores had sold about 3.5 million cans of beer each year to the Oglala Lakota people of South Dakota’s nearby Pine Ridge Indian Reservation, where alcohol is banned.
Without the liquor licenses, they argued, the stores were effectively worthless.
Snyder considered it an issue that hadn't been decided yet in Nebraska. After all, there was no case law that said people who had testified against the licenses were necessary parties to a review of a Liquor Control Commission decision.
In an April decision, Sheridan County District Judge Travis O'Gorman said the ultimate question was whether an attorney of "ordinary skill, prudence, and diligence, utilizing reasonable care," would have concluded that they were not necessary parties to the appeal.
"This court believes that the answer is yes," O'Gorman wrote. "This court has already found that the issue was not settled in Nebraska law. To the contrary, this was an unsettled, complicated issue of first-impression."
He said Snyder is an experienced attorney who successfully practiced in front of the commission on numerous occasions and reached the decision after researching the question and consulting other attorneys.
O'Gorman said the issue also was not clear from the agency rules, regulations or state statutes, and there was a long list of cases decided previously where citizen objectors weren't included as necessary parties.
In the unanimous decision in 2017 that spurred the lawsuit, the Nebraska Supreme Court rejected the owners' bid to reopen their stores because their petition for review hadn't given notice to the citizen objectors who had testified at the hearing.
Their attorney in the malpractice case, Thomas Schumacher, pointed to an email, sent the day of the decision, where Snyder told them, "We lost because of my error in not including 'all parties' in the appeal."
"Obviously, this is my fault," Snyder told them. And he told them to contact his malpractice carrier.
Schumacher argued it was an admission of liability.
"However, the determinative question is whether that error was a breach of the standard of care. Snyder made no such admission," he said.
And he dismissed the case.