City of Falls City v. Nebraska Mun. Power Pool

C ity of falls C ity, Nebraska , appellee aNd Cross -appellaNt,
v. Nebraska MuNiCipal power pool , a Nebraska NoNprofit
CorporatioN, appellaNt aNd Cross -appellee , J. Gary
stauffer et al ., appellees aNd Cross -appellaNts ,
C eNtral plaiNs eNerGy proJeCt, appellee ,
Cross -appellee , aNd Cross -appellaNt,
aNd aMeriCaN publiC eNerGy
aGeNCy, iNterveNor-appellee .
777 N.W.2d 327
Filed January 15, 2010. 	No. S-08-1184.
1. Equity: Appeal and Error. In an appeal of an equity action, an appellate court
tries factual questions de novo on the record and reaches a conclusion indepen-
dent of the findings of the trial court, provided that where credible evidence is in
conflict on a material issue of fact, the appellate court considers and gives weight
to the fact that the trial judge heard and observed the witnesses and accepted one
version of the facts rather than another.
2. Judgments: Statutes: Appeal and Error. Statutory interpretation is a matter of
law in connection with which an appellate court has an obligation to reach an
independent, correct conclusion irrespective of the determination made by the
trial court.
3. Governmental Subdivisions: Taxation. The purpose of the Interlocal Cooperation
Act, pursuant to Neb. Rev. Stat. § 13-802 (Reissue 2007), is to permit local gov-
ernmental units to make the most efficient use of their taxing authority and other
powers by enabling them to cooperate with other localities on a basis of mutual
advantage and thereby to provide services and facilities.
4. Political Subdivisions: Contracts. Neb. Rev. Stat. § 13-802 (Reissue 2007) of
the Interlocal Cooperation Act allows a political subdivision to enter into a con-
tract to form an interlocal agency that will act on its behalf.
5. Governmental Subdivisions: Statutes. An interlocal agency, as a creature of
statute, is bound by the statute creating it and has only the rights and remedies
granted to it under the statute.
6. Governmental Subdivisions: Contracts. Under Neb. Rev. Stat. § 13-804(6)
(Reissue 2007), a joint entity created under the Interlocal Cooperation Act is
subject to the control of its members in accordance with the agreement.
7. Governmental Subdivisions: Public Officers and Employees: Public Purpose.
Public entities serve the public good, as do public officials.
8. Standing: Claims: Parties. In order to have standing, a litigant must assert the
litigant’s own legal rights and interests and cannot rest his or her claim on the
legal rights or interests of third parties.
9. Municipal Corporations: Words and Phrases. A distinguishing feature of a
municipal or quasi-municipal corporation, or interlocal agency, is that it is not
only a body corporate but also a body politic, the components of which, the
238 	279 NebRASkA RePoRTS
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www.nebraska.gov/apps-courts-epub/
11/01/2026 04:48 AM CST

corporators, are endowed with the right to exercise in their collective capacity a
portion of the political power of the state.
10. Municipal Corporations: Corporations: Public Purpose. Profit-seeking enti-
ties operate under different principles than does a municipal or quasi-municipal
corporation or interlocal agency, which may act for a broader political purpose,
seemingly in disregard of the best fiscal interests of the entity.
11. Municipal Corporations: Corporations: Public Officers and Employees:
Appeal and Error. Interlocal agencies entrusted with a duty to the public at
large are not judged under the same principles governing private, for-profit cor-
porations. And when a decision has been entrusted to the discretion of a public
officer or board, that decision will not ordinarily be reviewed by the courts.
Appeal from the District Court for Lancaster County: steveN
d. burNs, Judge. Reversed and remanded with directions.
Daniel e. klaus and David J.A. bargen, of Rembolt Ludtke,
L.L.P., for appellant.
James P. Fitzgerald and James G. Powers, of McGrath,
North, Mullin & kratz, P.C., L.L.o., for appellees J. Gary
Stauffer et al.
Robert W. Mullin and David S. Houghton, of Lieben,
Whitted, Houghton, Slowiaczek & Cavanagh, P.C., L.L.o.,
and Douglas e. Merz, of Weaver & Merz, for appellee City of
Falls City.
James M. bausch and Terry R. Wittler, of Cline, Williams,
Wright, Johnson & oldfather, L.L.P., for appellee Central
Plains energy Project.
bartholomew L. McLeay and Heather H. Anschutz, of kutak
Rock, L.L.P., for intervenor-appellee American Public energy
Agency.
W. Scott Davis and Amanda A. Dutton, of baylor, evnen,
Curtiss, Grimit & Witt, L.L.P., for amicus curiae National
Public Gas Agency.
William F. Austin, of erickson Sederstrom, P.C., for amicus
curiae League of Nebraska Municipalities.
CITy oF FALLS CITy v. NebRASkA MUN. PoWeR PooL 	239
Cite as 279 Neb. 238

H eaviCaN, 	C.J., 	C oNNolly, 	G errard, 	stepHaN, 	and
MCC orMaCk , JJ.
H eaviCaN, C.J.
INTRoDUCTIoN
Nebraska Municipal Power Pool (NMPP) appeals from a
final judgment granted by the Lancaster County District Court
in favor of the City of Falls City, Nebraska (Falls City). J.
Gary Stauffer, John Harms, evan Ward (collectively individ-
ual defendants), and Central Plains energy Project (CPeP),
defendants-appellees, have cross-appealed. Falls City cross-
appeals. The American Public energy Agency (APeA) settled
its suit, and its claims are no longer a part of this case. We
reverse the decision of the district court and remand the cause
with directions to dismiss.
FACTS
NMPP was created in 1975 as a nonprofit corporation with
the purpose of idea generation, research, analysis, administra-
tion, and the creation of other entities to carry out these activi-
ties. NMPP has a 16-member board of directors made up of
representatives from the participating municipalities. Falls City
is a member of NMPP.
The first entity created by NMPP in 1981 was the Municipal
energy Agency of Nebraska (MeAN), under the Municipal
Cooperative Financing Act, see Neb. Rev. Stat. §§ 18-2401 to
18-2485 (Reissue 2007 & Cum. Supp. 2008). NMPP created
MeAN in order to obtain efficient sources of electricity for
participating communities. The National Public Gas Agency
(NPGA) was created in 1991 by NMPP in order to secure
natural gas for the participating municipalities. NPGA is an
interlocal agency created under the Interlocal Cooperation Act,
see Neb. Rev. Stat. §§ 13-801 to 13-827 (Reissue 2007 & Cum.
Supp. 2008). NPGA is governed by a board of directors made
up of a representative from each of the NPGA-member munici-
palities, including Falls City. both MeAN and NPGA require
their members to also be members of NMPP.
NMPP provides all the strategic planning and staffing serv-
ices for NPGA and MeAN. other than an executive direc-
tor, who is employed jointly by NPGA and MeAN, neither
240 	279 NebRASkA RePoRTS

organization has employees. NMPP’s budgeting process is
administered through a joint operating committee, which con-
sists of representatives from NMPP, NPGA, and MeAN. At
the beginning of each year, the amount of time each NMPP
employee will devote to a particular organization is estimated
and expenses are then allocated among the organizations.
In 1995, NMPP, NPGA, and MeAN created APeA, another
interlocal agency. APeA was intended to finance bonds through
which natural gas was purchased. APeA remained separate
from the joint operating committee and had its own staff, but
sometimes utilized NMPP staff for various projects.
APeA issued bonds and purchased gas through a series of
“prepays.” A prepay involves the purchase of a large supply
of natural gas to be delivered in the future. The goal is to pur-
chase a large amount of natural gas at a lower price than index,
or market, price. The bonds used to pay for the gas are tax
exempt as long as municipal entities purchase the gas later. As
the gas is delivered and paid for by the end user, the proceeds
are used to repay the principal and interest on the bonds.
In 	addition 	to 	these 	entities, 	the 	individual 	defendants
involved all work with or are involved with NMPP, NPGA,
or APeA in some capacity. Stauffer joined NMPP as deputy
executive director in 2003, then became executive director of
NPGA and MeAN in April 2005. The executive director is an
employee of NPGA and MeAN and has a joint employment
contract with NMPP, NPGA, and MeAN. Harms is employed
by NMPP, and his role is in purchasing and delivering natural
gas to communities; Harms is also the chief operating officer
of NPGA. Harms’ salary expense is totally allocated to NPGA.
Ward began employment with APeA as a consultant, then as
executive vice president. Ward’s role was in bond financing. He
became the director of capital strategies of NMPP in 2003, and
he served NPGA in the same capacity.
From the record, it is undisputed that there were per-
sonal conflicts between Roger Mock, president of APeA, and
Stauffer, Harms, and Ward. There was also a controversy
as to whether APeA should continue to run independently.
In September 2004, the joint operating committee, NPGA,
and MeAN’s executive committee brought APeA under the
CITy oF FALLS CITy v. NebRASkA MUN. PoWeR PooL 	241
Cite as 279 Neb. 238

direction of the executive director of NMPP. Three months
later, those orders were rescinded and APeA resumed its inde-
pendent operations.
It is also undisputed that in the summer of 2004, one of the
contracted gas suppliers notified APeA, NMPP, and NPGA
that it would be unable to deliver gas. Stauffer testified that
the supplier’s failure to deliver gas led to a need to restructure
the revenue stream for NPGA. The supplier’s failure to deliver
ultimately led to a $50-million settlement with NPGA. NPGA
still needed to find a reliable supply of gas for its participating
municipalities, however.
NPGA did have other prepays, but the existing gas prepays
were structured so that the amount of gas purchased increased
over time. As the amount of gas purchased increased, so too
did the amount of surplus gas that had to be resold, although up
to the date of the trial, NPGA had always been able to sell the
surplus gas. The sale of the extra gas allowed NPGA to cover
its operating costs, and one of NPGA’s biggest buyers for sur-
plus gas was Metropolitan Utilities District (MUD).
When the board of directors for NPGA met in December
2004, the gas supplier’s projects had been terminated and
Harms recommended that the board restructure its gas portfo-
lio. Harms also recommended that NPGA take the necessary
time to explore all options, because NPGA had enough gas
reserves to do so. In addition, Harms and Ward gave a presen-
tation to the board about the alternatives to a prepay structure
for obtaining natural gas; this same presentation was later given
to a number of entities that might be willing to partner with
NPGA. The record is unclear as to whether Harms included
information about CPeP at all the presentations.
In February 2005, Mock, president of APeA, presented
a potential prepay to the NPGA board. The prepay spanned
10 years, and Mock believed that gas could be purchased at
10 cents below index. Mock also believed that the terms of
that agreement would mirror the terms of a 2003 agreement
between NPGA and APeA. Harms and Ward recommended
against accepting APeA’s offer, informing the board that there
were other, more competitive sources of gas. NPGA declined
APeA’s offer. A few months later, Harms held a workshop
242 	279 NebRASkA RePoRTS

for the NPGA directors, wherein he argued that a 20-year
prepay had price advantages over a 10-year prepay. Harms
also suggested that a prepay structure which allowed NPGA
to purchase only the gas its members required would be more
efficient and that NPGA was currently required to buy more
gas than it could use under the terms of the APeA deal. After
that workshop, Mock again proposed the 10-year prepay, which
the board again rejected.
At the NPGA board meeting in May 2005, the NPGA con-
sidered proposals from APeA and the Goldman Sachs Group,
Inc. Harms recommended against the APeA prepay once again,
because he felt NPGA had more gas than it could use, but sug-
gested accepting the offer from the Goldman Sachs Group if
NPGA chose to do a prepay, because its discount was greater.
A director of NPGA then moved to accept APeA’s proposal,
but the vote failed after legal counsel for NMPP stated that the
proposed prepay might violate new Internal Revenue Service
regulations.
Harms held a workshop for NPGA board members on April
24, 2006, stating in a memorandum to the members that he
wanted to discuss CPeP and the value of becoming a member
of CPeP. Whereas APeA bought large quantities of gas and
then resold unused portions, CPeP’s goals were to purchase
just the amount required by the participants of the project at
the lowest possible price. At the workshop, Harms recom-
mended that NPGA consider membership in CPeP, because it
could benefit from being a buyer, particularly if it partnered
with MUD. As a partner with MUD, NPGA would benefit from
MUD’s large volume purchases to get a better rate. Harms pre-
sented two options: administer the program and/or buy gas as a
member. The board took no formal action at that time.
The Falls City City Council authorized Falls City to bring
suit against the individual defendants, NMPP, and CPeP shortly
after the April 24, 2006, meeting. Falls City did not disclose its
decision to sue at that time, and Falls City’s representative con-
tinued to attend board meetings of NPGA. Falls City later filed
suit on october 27, 2006.
Meanwhile, the option of joining CPeP was again brought
to NPGA’s attention at a meeting in July 2006, but no formal
CITy oF FALLS CITy v. NebRASkA MUN. PoWeR PooL 	243
Cite as 279 Neb. 238

action was taken. At that meeting, the NPGA board spent much
of its time discussing withdrawing from APeA. A month later,
Harms informed the NPGA board of directors that MUD and
the Cedar Falls, Iowa, utility district, as members of CPeP,
were planning to do a 20-year prepay transaction. No formal
action was taken by the NPGA board at that time. MUD and
Cedar Falls later completed the prepay transaction at a highly
competitive price. The NPGA and MeAN boards of directors
decided to withdraw from APeA in August 2006.
NPGA completed its withdrawal from APeA on February
26, 2007. NPGA, MeAN, and APeA entered into a written
agreement governing NPGA and MeAN’s withdrawal, as well
as the disposition of the entities’ equity in APeA. APeA was
allowed to retain approximately $3.5 million in equity. APeA
was also allowed to keep the prior claim it had filed against
Stauffer and Ward, but was required to pay NPGA and MeAN
85 percent of any recovery. NPGA released NMPP and its indi-
vidual officers from all claims, however.
In its complaint, Falls City claimed that NMPP had breached
its contract with NPGA and its individual members. Falls City
alleged that Stauffer, Harms, and Ward, along with others,
violated their fiduciary duties to NPGA by investigating the
possibility of forming a new entity, CPeP. Falls City claimed
that the formation of CPeP violated the individual defendants’
responsibilities to the individual members of NPGA, including
Falls City. Falls City further alleged that the individual defend-
ants took APeA’s proprietary prepay information and utilized it
in CPeP’s business plan, that they conspired to deprive APeA
and NPGA of business opportunities, and that the conspiracy
resulted in damages to Falls City. Falls City cited the possible
prepay presented to the NPGA board in February 2005 by
Mock as the lost business opportunity.
NMPP argues that the NPGA board was aware of its inves-
tigation into alternatives to natural gas prepays and that the
investigation was authorized. NMPP and the individual defend-
ants insisted that the boards had been informed of the pos-
sibility of creating CPeP and that rejecting the APeA prepay
was a business decision. NMPP and the individual defendants
claimed that Falls City did not have standing to sue in its own
244 	279 NebRASkA RePoRTS

right as a member of NPGA, or on behalf of NPGA, and that
the Interlocal Cooperation Act did not grant Falls City the right
to sue. The individual defendants argued they were protected
by the Political Subdivisions Tort Claims Act as employees of a
political subdivision and that the release signed between NPGA
and APeA applied to them and to NMPP.
After a bench trial, the district court dismissed two of the
individual defendants. The district court also found that Falls
City had failed to prove the breach of contract claim against
NMPP and dismissed that claim. The district court entered
judgment in favor of Falls City and against Stauffer, Harms,
and Ward on its claim of breach of fiduciary duty and its
claim of conspiracy. Falls City received a damage award for
$628,267.90, and the district court entered an injunction against
Stauffer, Harms, and Ward precluding them from participating
in any of CPeP’s prepaid gas activities. The district court also
required NMPP to disgorge payments from CPeP for the per-
formance of services for CPeP.
ASSIGNMeNTS oF eRRoR
NMPP assigns, consolidated and restated, that the district
court erred in (1) finding that Falls City had legal standing to
sue, (2) finding that the individual defendants were not exempt
under the Political Subdivisions Tort Claims Act, (3) finding
that the legal release signed by NPGA did not release NMPP
and the individual defendants, (4) finding that there was a con-
spiracy among the individual defendants and NMPP to breach
their fiduciary duty, (5) finding that NPGA and Falls City were
damaged by NMPP’s actions, and (6) exceeding the scope of
its authority by entering an injunction against NMPP and the
individual defendants.
The individual defendants assign in their cross-appeal, con-
solidated and restated, that the district court erred in (1) finding
that a member of an interlocal agency has the right to sue on
behalf of the interlocal agency and (2) awarding damages to
Falls City.
CPeP assigns in its cross-appeal that the district court erred
in declining to hold that the February 26, 2007, withdrawal
agreement effectively barred the claims asserted by Falls City.
CITy oF FALLS CITy v. NebRASkA MUN. PoWeR PooL 	245
Cite as 279 Neb. 238

In its cross-appeal, Falls City assigns that the district court
erred in (1) finding that sovereign immunity bars its action
against CPeP, (2) finding that Falls City did not adequately
prove its contract claim against NMPP, (3) finding that Falls
City cannot bring a derivative claim on behalf of NPGA, and
(4) limiting Falls City’s damages to a 5-year period of time.
STANDARD oF ReVIeW
[1] In an appeal of an equity action, an appellate court tries
factual questions de novo on the record and reaches a conclu-
sion independent of the findings of the trial court, provided
that where credible evidence is in conflict on a material issue
of fact, the appellate court considers and gives weight to the
fact that the trial judge heard and observed the witnesses and
accepted one version of the facts rather than another.1
[2] Statutory interpretation is a matter of law in connection
with which an appellate court has an obligation to reach an
independent, correct conclusion irrespective of the determina-
tion made by the trial court.2
ANALySIS
The determinative issue in this case is whether Falls City
has standing to bring this suit in its own behalf and on behalf
of NPGA. In its order, the district court stated that “Falls
City cannot bring an action on behalf of other members of
NPGA” but that Falls City could “acquir[e] for its own benefit
remedies for breaches of duties owed to NPGA.” The district
court stated that “each member of NPGA is a separate political
subdivision of the State of Nebraska and there ha[d] not been
a lawful delegation to Falls City to act on behalf of the other
members.” Therefore, Falls City could not bring suit on behalf
of the others. The district court determined that “the purpose
of the [interlocal] agreement is to permit Falls City to exercise
its power and authority.” The district court also stated that
“the relationships established by interlocal agreements are not
1 ProData Computer Servs. v. Ponec, 256 Neb. 228, 590 N.W.2d 176
(1999).
2 Japp v. Papio-Missouri River NRD, 271 Neb. 968, 716 N.W.2d 707
(2006).
246 	279 NebRASkA RePoRTS

delegations of authority and power by the individual member,
but a cooperative and joint exercise of powers possessed by
the individual members.” While we agree that an interlocal
agreement creates the opportunity for a cooperative and joint
exercise of powers, it also necessarily involves a delegation
of authority.
[3] The purpose of the Interlocal Cooperation Act is “to
permit local governmental units to make the most efficient use
of their taxing authority and other powers by enabling them
to cooperate with other localities on a basis of mutual advan-
tage and thereby to provide services and facilities.”3 Under
§ 13-804(2), any two or more public agencies may enter into
agreements with one another for joint or cooperative action
under the Interlocal Cooperation Act. An interlocal agreement
must specify its duration, general organization, and purpose,
among other things.4
In the event that an agreement made pursuant to this
section creates a joint entity, such joint entity shall be
subject to control by its members in accordance with the
terms of the agreement; shall constitute a separate public
body corporate and politic of this state, exercising public
powers and acting on behalf of the public agencies which
are parties to such agreement; and shall have power (a)
to sue and be sued, (b) to have a seal and alter the same
at pleasure or to dispense with its necessity, (c) to make
and execute contracts and other instruments necessary
or convenient to the exercise of its powers, and (d) from
time to time, to make, amend, and repeal bylaws, rules,
and regulations . . . .5
[4,5] The district court’s decision in this case rests on the
assumption that Falls City could not enter into a contract that
would prevent Falls City from later suing to protect its own
interests or to exercise its powers. However, the Interlocal
Cooperation Act allows a political subdivision to enter into a
3 § 13-802.
4 § 13-804(3).
5 § 13-804(6).
CITy oF FALLS CITy v. NebRASkA MUN. PoWeR PooL 	247
Cite as 279 Neb. 238

contract to form an interlocal agency that will act on its behalf.
And an interlocal agency, as a creature of statute, is bound
by the statute creating it and has only the rights and remedies
granted to it under the statute.6
[6] Under § 13-804(6), a joint entity created under the
Interlocal Cooperation Act is subject to the control of its
members in accordance with the agreement. The question
then becomes whether Falls City is allowed to bring suit as a
member of an interlocal agency under the agreement Falls City
signed. Under the bylaws of NPGA, the business and affairs
of NPGA are to be managed by the board of directors. As a
charter member, Falls City had a representative on the board
of directors and the right to cast a vote. The bylaws authorize
the executive director to enter into any contracts or instruments
to which he or she is authorized by the board of directors. If
NPGA is dissolved, the assets are to be converted to cash and
distributed to members in good standing. As a charter member,
Falls City is to receive 18.762 percent of the equity balance
should NPGA be dissolved.
The interlocal agreement, as signed by Falls City, recites that
“[t]he Participants desire to study and evaluate on a continuing
basis the benefits that may result to the Participants and their
residents from the coordination of gas resources and facilities”;
“to enter into an interlocal agreement pursuant to which the
Participants, among other objectives, will cooperate mutually
to assure an economical supply of firm or interruptible gas to
meet their respective local requirements”; and “to create a joint
entity to exercise public powers and to act on the behalf of the
Participants for the purposes set forth in such interlocal agree-
ment.” one of the purposes of the NPGA was to “attain maxi-
mum practicable economy to the Participants.” The interlocal
agreement also lists the privileges and powers granted to an
interlocal agency under the Interlocal Cooperation Act, such as
the power to sue and be sued, to have a seal and alter the same,
to make and execute contracts and other instruments, and to
make and amend its bylaws.
6 See Kosmicki v. State, 264 Neb. 887, 652 N.W.2d 883 (2002).
248 	279 NebRASkA RePoRTS

No case law exists as to whether a member of an interlo-
cal agency may bring a suit under these circumstances, but as
previously noted, an interlocal agency is a creature of statute.7
The interlocal statutes do not speak directly to this issue, but
the plain language of the statute allows a public entity to join
an interlocal agency in order to provide services and/or meet
obligations.8 The interlocal agreement signed by Falls City
gave NPGA the power to sue and be sued but says nothing
about the ability of its members to sue on behalf of NPGA, or
in its own behalf. In fact, the interlocal agreement gives power
and authority to make such decisions to the board of direc-
tors, which included a representative from Falls City. Under
the interlocal agreement, Falls City had one vote on the board
and the option to withdraw from NPGA if it was unhappy with
the decisions that were made. The record demonstrates that
the board of directors made a policy decision when it chose
to turn down the offered prepay and explore other alternatives.
Nothing in the interlocal agreement would allow a participant
to sue on behalf of NPGA.
[7,8] In addition, we note that Falls City is essentially ask-
ing that NPGA be treated as a private corporation when it is an
interlocal agency and is more akin to a quasi-municipal corpo-
ration. Nebraska has recognized various limited-purpose enti-
ties as quasi-municipal corporations, such as building commis-
sions,9 sanitary and improvement districts,10 school districts,11
and reclamation districts.12 Quasi-municipal corporations are
public entities, and public entities serve the public good, as
7 See, e.g., Jacobson v. Solid Waste Agency of Northwest Neb., 264 Neb.
961, 653 N.W.2d 482 (2002); Kosmicki v. State, supra note 6.
8 See Roggasch v. Region IV Ofc. of Developmental Dis., 228 Neb. 636, 423
N.W.2d 771 (1988).
9 Dwyer v. Omaha-Douglas Public Building Commission, 188 Neb. 30, 195
N.W.2d 236 (1972).
10 Rexroad, Inc. v. S.I.D. No. 66, 222 Neb. 618, 386 N.W.2d 433 (1986).
11 School Dist. No. 8 v. School Dist. No. 15, 183 Neb. 797, 164 N.W.2d 438
(1969).
12 Nebraska Mid-State Reclamation District v. Hall County, 152 Neb. 410, 41
N.W.2d 397 (1950).
CITy oF FALLS CITy v. NebRASkA MUN. PoWeR PooL 	249
Cite as 279 Neb. 238

do public officials.13 In order to have standing, a litigant must
assert the litigant’s own legal rights and interests and cannot
rest his or her claim on the legal rights or interests of third par-
ties,14 in this case, NPGA.
[9-11] We note that the character of an interlocal agency
such as NPGA, like that of a quasi-municipal corporation, “is
twofold—in the exercise of its governmental functions, as a
subdivision of the government, and as a private corporation,
enjoying powers and privileges conferred for its own benefit.”15
A distinguishing feature of a municipal or quasi-municipal
corporation, or interlocal agency, is that “it is not only a body
corporate but also a body politic, the components of which,
the corporators, are endowed with the right to exercise in
their collective capacity a portion of the political power of the
state.”16 As such, profit-seeking entities operate under different
principles than does a municipal or quasi-municipal corpora-
tion or interlocal agency, which may act for a broader political
purpose, seemingly in disregard of the best fiscal interests of
the entity. Interlocal agencies entrusted with a duty to the pub-
lic at large are not judged under the same principles governing
private, for-profit corporations. And when a decision has been
entrusted to the discretion of a public officer or board, that
decision will not ordinarily be reviewed by the courts.17
In its brief, Falls City asks that we apply corporate law, even
while asserting that NPGA is not a corporation. essentially,
Falls City has asked to be treated as though it is a shareholder
bringing a derivative lawsuit. As a member of an interlocal
13 See State ex rel. NSBA v. Douglas, 227 Neb. 1, 416 N.W.2d 515 (1987).
14 In re Petition of SID No. 1, 270 Neb. 856, 708 N.W.2d 809 (2006).
15 1 William Meade Fletcher, Fletcher Cyclopedia of the Law of Corporations
§ 60 at 389 (perm. ed., rev. vol. 2006).
16 1 eugene McQuillin, The Law of Municipal Corporations § 2.07.10 at 145
(John H. Silvestri & Mark S. Nelson eds., rev. 3d ed. 1999). See, also,
Kennelly v. Kent County Water Authority, 79 R.I. 376, 89 A.2d 188 (1952);
Matthews v. Wenatchee Heights Water, 92 Wash. App. 541, 963 P.2d 958
(1998).
17 See, Mtr. of Duallo Realty v. Silver, 32 Misc. 2d 539, 224 N.y.S.2d 55
(1962); Jones v. Hospital, 1 N.C. App. 33, 159 S.e.2d 252 (1968).
250 	279 NebRASkA RePoRTS

agency, however, Falls City delegated the power and respon-
sibility of providing natural gas to its citizens to NPGA. In
this case, Falls City does not have standing to sue because
neither NMPP nor the individual defendants owed it any fidu-
ciary duties.
We find that neither the Interlocal Cooperation Act nor the
agreement Falls City signed when it joined NPGA granted Falls
City the right to bring suit against NMPP or the individual
defendants. NPGA is a public body, and its duties are owed to
the public. Therefore, Falls City did not have standing to bring
this cause of action and the action must be dismissed. because
Falls City did not have standing to bring this claim, we need
not address the other assignments of error or the cross-appeals
filed by either the individual defendants or CPeP.
CoNCLUSIoN
As an interlocal agency, NPGA is a creature of statute, and
Falls City is a member of the interlocal agency. Falls City
signed the interlocal agreement giving the board of directors of
NPGA power to make business decisions on its behalf. Neither
the Interlocal Cooperation Act nor the agreement gives Falls
City standing to sue NMPP or the individual defendants. We
therefore find that Falls City had no right to bring this cause
of action, and we reverse, and remand to the district court with
directions to dismiss.
reversed aNd reMaNded witH direCtioNs.
wriGHt and M iller-lerMaN, JJ., not participating.
PIeRCe v. DRobNy 	251
Cite as 279 Neb. 251
pHilip pierCe et al ., appellaNts , v. paul drobNy, presideNt
of tHe board of eduCatioN of kNox C ouNty sCHool
distriCt #0583, et al ., appellees.
777 N.W.2d 322
Filed January 15, 2010. 	No. S-09-400.
1. Rules of the Supreme Court: Pleadings. Dismissal under Neb. Ct. R. Pldg.
§ 6-1112(b)(6) should be granted only in the unusual case in which a plaintiff
includes allegations that show on the face of the complaint that there is some
insuperable bar to relief.