Whiteclay beer store owners sue their attorney, alleging malpractice caused stores’ closure

LINCOLN — When the Nebraska Supreme Court upheld, on a technicality, a state liquor board’s order to shut down the controversial beer stores in Whiteclay, Nebraska, the attorney for the business owners dashed off an apologetic email to them.

“We lost because of my error in not including ‘all parties’ in the appeal. Obviously, this is my fault. You should all contact my malpractice carrier,” stated the email, sent Sept. 29, 2017, by Scottsbluff attorney Andrew Snyder.

Now, the owners of the long-closed beer stores are suing Snyder, seeking monetary compensation for his alleged mistakes that they maintain caused the businesses to be shut down.

A legal response to the lawsuit, filed by Snyder’s attorney, Steven Olson of Scottsbluff, said the email was not “an admission of malpractice” and that the lawyer had handled the case with the required “professional standard of care.”

The lawsuit seeks more than $2.1 million in damages for the value of the four beer stores — the Arrowhead Inn, Stateline Liquor, D&S Pioneer Services and the Jumping Eagle Inn — as well as damages for loss of future earnings.

The lawsuit, filed in April in Sheridan County District Court, is a rare action over legal malpractice, and is likely the last legal action over the April 2017 closing of the beer stores, which was hailed as ending “the shame of Whiteclay.”

Whiteclay, an unincorporated village in northwest Nebraska, was known as the “Skid Row of the Plains” because its four beer stores sold the equivalent of 3.5 million cans of beer a year and because vagrants openly drank and urinated on the village’s dusty streets. Almost all the sales went to residents of the adjacent, and officially dry, Pine Ridge Indian Reservation in South Dakota, where alcohol-related problems are rampant.

For years, activists sought to close down the beer outlets, saying that they preyed upon, and exacerbated, the problems of the impoverished reservation. But the beer store owners, as well as many residents, argued that they were legal businesses, and that the problem was the demand for alcohol, not the easy access to it.

In a historic decision in April 2017, the Nebraska Liquor Control Commission voted to revoke the licenses of the stores, ruling that law enforcement in the village was inadequate to allow liquor sales.

The beer stores appealed to the Nebraska Supreme Court, but their appeal was rejected on a technicality — that Snyder had failed to properly notify citizen protesters that an appeal to the court had been filed. Such a procedural defect, the court said, nullified the appeal, which left the commission’s decision standing and the beer stores closed.

Omaha attorney Jason Bruno, who filed the legal malpractice lawsuit on behalf of the beer store owners, said that some of his clients had attempted, unsuccessfully, to obtain compensation from Snyder’s insurance carrier. That prompted the lawsuit, he said.

Bruno commended Snyder for the email admission of his error in handling the case, but said it was proof that the lawyer had failed to provide the necessary standard of representation.

Olson, Snyder’s attorney, declined to comment on Thursday.